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229: The Trump Trade Tariffs – Everything You Need To Know With Nathan Resnick

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229: An Expert's Opinion On The Trump Tariffs With Nathan Resnick

Today I’m really excited to have Nathan Resnick back on the show. If you don’t remember Nathan, he is the founder of Sourcify which is a company that helps you find manufacturers to produce your products.

Anyway, Nathan has been on television multiple times in the past month to talk about the Trump tariffs and since he’s an expert on the topic, I thought I’d have him on to discuss his thoughts. Enjoy!

What You’ll Learn

  • The current state of the tariffs and which products they affect
  • What impact the tariffs have on large businesses vs small businesses
  • How to find vendors outside of China
  • The short and long term impact of the tariffs

Other Resources And Books

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Transcript

Intro: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not in business. Now, this week, I invited my buddy Nathan Resnick of Sourcify to give his expert opinion on the Trump tariffs. We talk about which products are affected and how to best avoid the brunt of the impact.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. And I like Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 30% of my revenues. Now Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here is why it is 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 out an email to everyone who purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they purchased, piece of cake, and there is full revenue tracking on every single email sent. Now, Klaviyo is the most powerful email platform that I’ve ever used and you could 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.

I also want to give a shout out to Privy who is also a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now what does Privy do? Well, Privy is an email list growth platform and they manage all of my email capture forms. And I use Privy hand-in-hand with my email marketing provider. Now they’re a bunch of companies out there that will manage email capture forms, but I like privy because they specialize in e-commerce.

Right now I’m using privy to display a cool wheel of fortune pop up. Basically a user gives their email for a chance to win valuable prices in our store. And customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%. So bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve. Now onto 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.

Steve: Welcome to the My Wife Quit her Job Podcast. Today, I’m really excited to have Nathan Resnick back on the show. And if you don’t remember Nathan, he is the founder of Sourcify, which is a company that helps you find manufacturers to produce your products. And prior to that, he owned two e-commerce companies, Yes Man Watches and Cork Supply Co., and recently actually, he spoke at my annual e-commerce conference, the Sellers Summit. Anyway, Nathan has actually been on TV multiple times in the past month to talk about the Trump tariffs. And since he’s an expert on the topic, I thought I’d have him on to discuss his thoughts. And with that, welcome back on the show Nathan, how are you doing today, man?

Nathan: What is up? I’m doing great. Thanks so much for having me.

Steve: So first off, can you just kind of summarize why Trump has issued these tariffs in the first place? And what kind of are his demands from China at the present time?

Nathan: It’s crazy. And I kind of want to start the conversation saying, I’m not political at all. But what I’ll say is, these tariffs are crazy. And I think he is trying to position himself with these tariffs thinking that these products are going to now be produced in America, which there are companies that we work with are rapidly diversifying their supply chain across Asia. And so for him, and I think the US government is just a way for them to make money. Really what Trump doesn’t even realize it and what he said actually, last week is that China is now paying us billions of dollars in tariffs, but really tariffs are paid for by American companies that are importing products from China.

And so it’s really in my mind just a bit ridiculous, but at end of the day tariffs are a way for the US government to make money or to balance out trade. And if you look at the trade between America and China, there’s a huge deficit. We’re importing way more than we are exporting to China.

Steve: I know, but realistically does the US have the infrastructure that China has to produce all these things at low costs?

Nathan: Oh, we don’t. I mean, that’s really the global economy. If you look at it from my more bird’s eye view, there’s a reason products are produced outside of America. And the reason being is it’s just the way that the currencies work. If our dollar equals 6.8 renminbi right now, then you know that our dollar is going to go further there. And really, I almost break it down to the ground floor. When you’re in Guangzhou or Shenzhen, let’s say you’re going to the Canton Fair coming up here in October, and you’re over there and you’re going out to dinner, you’re probably spending almost a fifth or a 10th less on dinner than you would here in America.

And that just shows the way the international economy work is that our dollar goes a lot farther. And you know what; you know the Chinese government is doing? And I’m not exactly sure if I should say this in this way. But they’re actually, they’re putting, they’re making the renminbi at almost their all time low a year low. So right now, the dollar is extremely valuable compared to the renminbi. And so our dollar is going to go a lot further than it would last year, a year before, and the reason being is the Chinese government, they’re trying to enable US corporations to have more buying power in China, even with these tariffs.

Steve: Hmm-mm interesting. Okay. But then, doesn’t the factory kind of get screwed over then?

Nathan: Well, in this case, the factories are really screaming. I’ll tell you, I was in China two weeks ago at our Guangzhou office. And you go to these, even the fabric markets there in Guangzhou and everyone’s screaming, they’re saying, hey, well buy fabric here, but can we send it to Vietnam? Can we send it to the Philippines? Can we send it off to Cambodia? And even at Sourcify, when we work with these companies to produce products across Asia, there’s probably been about a 30 to 40% increase in companies requesting to produce products outside of China, and I’m talking in India, Vietnam, Thailand, the Philippines.

And if you look at larger enterprises, if you look at the Nikes or Adidas of the world, these organizations have already been producing outside of China for a long time. And so really, what’s scary with these tariffs is that in my mind, they’re just starting. Trump just put a 10% tariff on $200 billion of Chinese products last week, and that tariff is going to be increased to 25%, starting January 1, 2019. Now, they’re still actively negotiating and trying to figure out really what’s going on with this trade war.

But if you’re an e-commerce company, and all of a sudden, you have to pay 25% more tariffs, you’re going to want to figure out, how can I avoid that tariff? And I’m happy to dive in the ways that you can avoid the tariff. Some, I will say will be legal, and some are a bit under the table. But I’m not recommending the under the table ways at all.

Steve: So before we get into that, can you just give us a quick update on kind of the current state of the tariffs and what products they are affecting, kind of give us a timeline and how it started out and where we are today?

Nathan: Yeah, a hundred percent. So it started out a few months ago. And really, originally, it was more so targeting industrial and agriculture products, where you’re talking about steel, you’re talking about soybeans, you’re talking about products that will probably not affect your general e-commerce entrepreneur that’s selling consumer products. And then all of a sudden last week, tariffs got put on electronics, cosmetics, clothing, home, and home furnishing products and TVs. I mean, these tariffs now are really actively affecting HTS codes that companies like you and I are importing under. And so it started to all of a sudden have an effect in the e-commerce world. And really, that’s scary.

I mean, if you’re an e-commerce entrepreneur, that’s just starting out running on thinner margins. These tariffs are going to have a direct effect on your business. And really probably the first question that comes to mind right there is, how do I find out, how do I know if these tariffs are affecting my product? And so what I do right now is really ask your freight forward. If you’re importing products, even just at a smaller scale, whether it be a pallet or just one container, so ask your freight forward and say, hey, do I have to pay a higher tariff?

And your freight forwarder should know, right off the bat if your HTS codes that you’re importing under are affected. And really, that’s the first way that you start, you can also definitely go on Google and do some research yourself. But I think at the end of the day, your freight forwarder should have the most knowledge in regards to all your products affected.

Steve: Okay and then what impact would you say the tariffs are going to have on larger businesses like we were talking about CVS earlier, versus smaller businesses?

Nathan: I mean, it’s crazy on the larger scale. They’re hurting; they’re trying to avoid them as fast as they can. I mean, there was this story, it must have been two months ago, where there was this company that was trying to import or it was they were actually exporting, because on the other hand, China has lifted tariffs on products that American companies are trying to sell into China. So it’s back and forth, these trade wars, but there was this company that was exporting soybeans from America to China, they literally missed the cutoff time by 30 minutes. And they started paying $12,000 a day just to have their container ship off the port waiting to figure out what’s going to happen with these tariffs. Because if they have brought those soybeans to port, they would have to pay $6 million in new tariffs just based off these new tariff increases.

And so from a larger scale from these larger enterprises, the effects are huge. And so what these companies are doing are diversifying their supply chains very fast, which means a lot of these production lines in Vietnam or India are a lot of times already booked their capacity for the next year. You really have to dive deep and figure out who is going to be a supplier that still has some capacity for your products outside of China, or you find ways to diversify or get around these tariffs in maybe not the most cleanest way.

Steve: So, what would you say is the short term impact versus the long term impact? Are you already starting to see prices increase?

Nathan: Yeah, I mean, I would say short term impact is that you as a company need to start negotiating right away with your factory to see how can I balance out these increased tariffs, because on the factory side of the table, you’re going to want to try to lower costs there and cut your unit costs on that end. On the consumer side of the table, we as American consumers are going to have to start paying more for these products. I mean, I actually wrote this down as estimated by students at the London School of Economics, that each American citizen is going to have to pay $127 more over the course of the year for average products that they’re buying, whether it be TVs, or clothing, and washing machines. I mean, you’re really going to see a direct effect.

And, at the larger enterprise level, you have toy companies like Hasbro that are saying during their earnings call last week that the company will move production outside of China immediately as fast as they can. And so, not only are you seeing the effect with just families here in America and having to spend more for products, but larger enterprises are having to figure out how they can really diversify their supply chain.

Steve: So, let’s say I needed to — let’s say I wanted to negotiate with my vendor, would you mention the Chinese renminbi against the US dollar? Like, does it all kind of balance out right now, when it’s only like a 10% tariff?

Nathan: Yeah, I would say 10% tariff. It depends how much you’re importing. But yeah, it definitely does balance out in some sense. I would say too, though, from the factory perspective, I know even our supply chain team, they’ve been getting a swap just with inbound requests from factories outside of China saying, hey, we can enable you to produce these products and avoid these China tariffs. And so even on the factory end of the table, you have factories, sales reps that are now hitting us up outside of China more activity using these tariffs as a sales pitch. And I would say inside China, the smarter factories are saying, hey, well, the renminbi is that almost a year low, we’re really trying to balance out our currency here. And so there’s not a huge effect.

I think it also just depends how you pay your supplier. I’ve heard of a lot of e-commerce entrepreneurs having great payment terms with their suppliers, not having to pay right up front, or 70/30, excuse me, 30/70 or maybe having 60 day payment terms. If you can flow some of your cash with production, then you might be able to have less of a direct effect right now with these tariffs.

Steve: So, I mean, is it just a really bad time to import from China?

Nathan: Yeah, I mean, well, especially right now with the holiday season coming in, even the freight lines are crazy, all industry is going nuts trying to ramp up for the holidays. And with these tariffs, it’s really, I think, become a bit of a mess. But I think the smarter companies are planning long term. If you’re a company doing business right now, you probably already got your holiday season planned out. You’ve got your POs in for the holiday season, and are already midway through production. And hopefully, especially if you’re producing in China with the Chinese New Year and the Spring Festival coming up there in February, that you’re going to have production in inventory ready to last yourself throughout that time period. Because otherwise you’ll probably run out of inventory or just probably take a trip to Vietnam or India, or Thailand or something.

Steve: I guess the reason why I’m asking that is I was wondering if you have any predictions on what will happen and whether this will get resolved, whether you should hold out on buying large amounts of inventory until this kind of blows over?

Nathan: That’s a great question. I mean, from what I’ve seen in the media, I’ve talked to reporters at CNN and CNBC, and Forbes. And it’s very interesting because from the news perspective, I mean, this is great press for the newscasters. I mean, they love talking about this, and I honestly think it’s going to become, it’s going to continue to rise. I think Trump really has it in his mind that by putting on these tariffs, he thinks that number one; he thinks that China is paying for these tariffs, which is not true. And number two, he thinks that we’re going to see a shift in production back to America, which I don’t believe is going to happen, just because it’s going to be way too expensive to produce most of these products here in America.

And so I think hopefully, he’ll come to a realization and the government will come to a realization that really what this is causing is just American consumers and companies are paying more for these products. And these companies are now just diversifying their supply chain outside of China, or making some tricks under the table to avoid these tariffs.

Steve: Okay, so let’s talk about that now. What are some ways to avoid these tariffs?

Nathan: Yeah, so we’ll divide by legal versus illegal. And I do not recommend the illegal.

Steve: Start with the illegal stuff first because I’m sure [overlapping 00:15:35].

Nathan: Yeah, I mean, so, right off the bat, you have transshipments. And transshipments are legal and transshipments, what they are, is when you’re sipping a container, let’s say from Guangzhou to Long Beach, and you have to ship the cargo, ship has to stop in Malaysia, or Thailand or whatever maybe. But what a lot of these freight foreigners are offering now is with these transshipments, they’re going to change the country of origin on your products. So they’re literally telling you, do not put those made in China labels on your products, we’ll change the country of origin during the transshipment when we stop over in Thailand, or Malaysia, or whatever may be, so your products are actually on paper imported from China.

And so that’s one way to avoid this. Trans shipments are legal, but the act of actually changing the country of origin on your products is illegal. On the other hand, this is something that’s probably a bit more common in general, with smaller scale e-commerce entrepreneurs, or companies that haven’t necessary gotten the scale, but just lowering the value of the actual Bill of Materials, saying that, instead of buying this product for $10 per unit, you’re buying it for $1 per unit. And so the actual tariffs that can be levied on your products is much lower. So instead of having a total dollar amount of 10,000, you have $1,000. And so, really at the end of the day when tariffs are applied to the import value of your products, the value of the products is much lower than they actually are. And so you kind of slide into the cracks that way.

Steve: Hold on Nathan real quick. I know some of my vendors had done that for me without even me asking.

Nathan: Well, yeah, I mean, it helps them too, because they also have to pay an export tax in China. So it is in some sense win-win, but is it actually legal?

Steve: What is the risk actually, is what, because I feel a little uncomfortable by it. I mean, this happened a lot early on. And so have you known people to get caught by this?

Nathan: Not on a small scale. There’s definitely been some fines at a larger scale, but the border patrol and just the organization that is really balancing out these tariffs and forcing them, they’re not going to have time to deal with companies that are importing $10,000, or even sometimes even $100,000. In the grand scheme of things, it’s not that much. And so, the risk of getting in trouble at that level is extremely low. At a larger level, if you have companies like Bass Pro, one of the biggest toy makers in the world, if they get caught doing this, there’s definitely some questions and media attention that will come their way.

So I would say, as a e-commerce entrepreneur, the risk is very low. And really, the other solution that I want to note on is actually doing fulfillment at or in China, for example. So, if you’re importing products, and they’re under $800 per parcel, you actually are exempt from customs duties all together. And so what we’ve seen actually is number one, a lot of fulfillment companies or a lot of factories start to offer fulfillment options in China. So you’re shipping products direct to consumer from Asian based fulfillment centers, whether they be in Hong Kong or in China, and shipping these products directly to consumers here in America. Your shipping rates are definitely going to be a bit higher; it depends on the shipping method you use.

And also, sometimes I think, just with international logistics, if you’re shipping product, just one by one from overseas, it’s got a higher risk of it getting lost or damaged in the mail. So I don’t know if that’s the best option.

Steve: But is that a realistic option?

Nathan: I mean, there’s companies like actual companies I know top of mind, one called Fulfillment and one called the Floship. They both have facilities in Hong Kong and Shenzhen, I think. And they’re doing D2C fulfillment out of China, and they’ve had success there. There are companies that work that way. I would say, a lot of times, though, you see more kind of drop shipping oriented type of companies shipping through this route, because just the customer experience doesn’t have that high of a level. I think, with today’s world with two day Amazon Prime shipments, consumers expect the product to come fast. And when you’re shipping from a fulfillment company in China, obviously, the products aren’t going to come as fast, probably a week at the fastest. And so it’s something to consider when you think about your customer experience. But at the end of the day is it an option to explore? Yes.

Steve: So in regards to relabeling the boxes to have a different country of origin that sounds kind of risky to me.

Nathan: Yeah, it definitely is. I mean, it’s not something that I am recommending by any means. But it’s a way that some companies are avoiding these tariffs. And I think that the end of the day, you got to sometimes explore all options. But I would say the best way to avoid these tariffs is to explore other options to produce in other countries. And I know, for example, we have companies that we work with right now that sell into large retailers like Wal-Mart and Target that are producing in India and Pakistan, and finding way better rates producing in those countries than China, because the labor rates, it’s crazy right now in China, with the growth of the economy and the infrastructure there, labor costs have definitely gone up.

And when you think of a product like arrow [ph], or clothing, or even any bag, like the main cost outside of the actual raw material is actually the labor. So when you’re having to spend let’s say half an hour to produce a bag or something, that’s labor cost. And so if you go to India or Pakistan, where the labor costs are even less, you’re going to be able to have better production rates. And so that’s something that I’d really look into. There are some great factories outside of China.

And, it’s crazy, like when I look at China, when I was first over there 10 years ago, and look at it today, 10 years ago, you go to a factory and they’re picking you up in a pretty rundown car, there’s not all these nicely paved roads and there’s not all this crazy traffic. And now you go to these factories, you getting picked up in Range Rovers and Mercedes Benz and you’re thinking to yourself, they must have made some money on some of the margins with their production runs.

Steve: So given that, like let’s for like the little guy, how would you find suppliers in countries outside of China? Like, there’s no Alibaba for like Pakistan or Vietnam?

Nathan: Yeah, it stems from network I think 100%. And even here at Sourcify, it stems from our network, when we go into these other countries. And I’ve done trips this year alone to Vietnam, Thailand, and the Philippines, and have one plan for India later this year. And it’s a different ecosystem. Number one, when I go to China, China is a great country, don’t get me wrong, but am I going there to enjoy the environment, no. When I was in the Philippines, I mean, we’re looking at this factory in the south in the city called Zamboanga and the beach was right across from the factory. I was like, wow, this is actually great environment, I wouldn’t mind hanging out here for a few days. Whereas, when we’re in a factory in China outside of Guangzhou or wherever may be, it’s not always the nicest area.

And so, I would say for a smaller buyer, like there’s definitely some different trade shows, you can exploit, there’s the gifts and premium show in India. I think it’s later this month, I think it actually coincides with the Canton Fair. I can double check, and I’ll send you the dates on that later. But, I mean, there’s definitely some other trade shows in other countries. And what I would do too, is you actually can Google some of the trade organizations that they have in these countries. There’s free economic zones, there’s the Clark free economic zone in the Philippines, there’s the Zamboanga free economic zone in the Philippines.

These organizations are actively looking to boost local trade. And it’s amazing, because these free economic zones; they have no import or export taxes for companies that are set up in these zone so a lot of factories go there. And there’s no taxes or very little taxes for these companies in these free economic zones. And so, if you’re working with a factory that’s in a free Economic Zone, you could literally be importing product into that free economic zone for free and exporting that finished product for free back to your home country. And there’s been talks I know with the Philippines and America to get into some sort of free trade agreement. And NAFTA, the North American Free Trade Agreement just got resigned, which is awesome. So, you could explore options to produce in Mexico. And down just south of the border in San Diego, you have the Economic Development Council of Baja and the tier one or region there.

Steve: So I know that when I go to like the Canton Fair, I know it’s actually worth my time, because the trade show is just so large. But these ones that you mentioned, I think you mentioned one in India, is it a much smaller scale? Like, how can you be a lot more efficient with your time and finding these factories that are outside of China?

Nathan: Yeah, I mean, I would say it stems from network. So, feel free to ping me up to try to introduce you to some people outside of China. I would say, for any e-commerce entrepreneur going to some of these smaller shows, it’s probably not going to be worth your time. I mean, I think the beauty of the Canton Fair is that you have so many different factories at your fingertips there. But what you could explore is there’s some trade shows here in America. I was at a magic sourcing trade show and the sourcing direct show at ASD market week in Las Vegas.

And those aren’t big shows from a sourcing perspective, especially compared to the Canton Fair, but they actually diversify the amount of suppliers that they had there. There was a lot of booths there from Turkey, from India, from Vietnam, from Korea, it was pretty cool. I mean, honestly, and a flight to Vegas is usually pretty cheap. So it was pretty cool. I mean, that’s something that I would definitely recommend. I’ll send you the dates on when those trade shows are.

Steve: Okay. Yeah, it sounds good. What about from an online perspective, though? Like, is there like some sort of directory or some central location where I can get access to a lot more of these factors that are outside of China?

Nathan: None that comes to mind. And that’s probably a pretty big, good business opportunity right there, it’s creating some sort of international Alibaba. I mean, I think Alibaba does have some facilities and factories that are outside of China. And when you search, I mean, when you search Alibaba, you can specify the country, so you could try to just specify countries that are obviously not China and see what comes up. But as far as my knowledge, there is no go to online directory that’s focused outside of China.

Steve: Okay. And is that something that you guys do though?

Nathan: We definitely do diversify company supply chains at more of an enterprise level. At a smaller scale, I would recommend like the factory confirm Chrome extension that we have, I’ll send you the link for that. It’s pretty cool tool that enables you to analyze factories in real time. But I’m happy to help. For me, I’m a former e-commerce entrepreneur myself, and now just focus on the supply chain side of the business. And that’s what I love.

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Can you kind of describe generally I guess, what the infrastructure is like for China compared to some of the other third world countries like Pakistan, Indonesia?

Nathan: Yeah, 100%. I mean, I’ll describe the Philippines right off the bat, because I was just there last month. And it’s a lot different when you think of the infrastructure. And I would look at it from almost the freight forwarding world where in China you have FOB in Ningbo, you have Guangzhou, Hong Kong, you have all these different major ports along the coast and you can ship containers very readily out of these ports. When you look at the Philippines, pretty much every factory is shipping FOB Manila. And so what that means is that they’re transporting and they’re taking responsibility for your product because it’s FOB terms that they’re taking responsibility for your product to get it to Manila to get it to that container ship or whoever your freight forwarder there that’s picking up the container in Manila and putting it on the cargo ship or air freighting it back to your warehouse.

But there’s just not nearly as many ports that are shipping on FOB terms internationally in the Philippines or India or Thailand compared to China. And so from a logistical point perspective if you think about it from a factory side of the table, these factories are oftentimes spread out pretty far from these main ports and so they’re having to handle the transportation costs to get your product to wherever you have those FOB terms from. And I think also the other hand to if you ever get terms on DDP rates, then you’re going to have — it’s going to be harder. I remember in India most the production quotes that we get are all FOB or x works because DDP out of India, just with freight is a lot more complicated to calculate than out of China.

Steve: Can you kind of comment on the prices of some of these countries compared to try to China?

Nathan: Yeah, I mean, it’s pretty incredible. Really, especially for the cut and saw industry, like, let’s say you’re producing any sort of fashion item or bag or any kind of cut and saw oriented product, just because the labor rates outside of China, and India or Pakistan is much less. We’re talking about like t-shirts like a nice shirt that is literally you have like $2 and 20 cents for DDP like duty to the repaid delivered t-shirt that’s got a print on it and that’s got pretty good fabric. And so some of the rates are incredible but that’s at a much larger scale. I mean, that’s a really company that’s spending close to $10 million on production. And so their rates and the margins that these factories are making are much lower.

But even then, if you can try to fit your production run in with a factory that is producing for a larger buyer, and sees the growth of your product and really likes your brand, and there’s not too much that separates the production line that they’re doing for this larger enterprise and you’re small e-commerce company, there could be great synergies to explore. And I think that’s really like the — it’s like a double edged sword. Like, it’s great that the supply chain world is so relationship based. But on the other hand, you have very little transparency. If I asked you right now, what’s the name of your factory? Like, I wouldn’t expect you to tell me, it’s just like, not that – it’s not a question that you ask other e-commerce entrepreneurs, because that’s like a trade secret, that’s a trade secret of your business.

And so I think that’s like kind of the craziness of the supply chain world in the e-commerce arena, is that like, if you see a company that’s crushing it, and they’re selling socks, and you also want to start selling socks, well, you can’t just go up to that company say, hey, who’s your factory? I also want to start selling socks. They’d be like, well, why would we tell you and they’ll probably actually try to pitch themselves as a middleman that will produce socks for you.

Steve: So, would you say in these other third world countries, that they tend to work with larger guys, like are there opportunities for some of the smaller people, or even the people that are just starting out to look there?

Nathan: There is, I mean, it’s definitely smaller facilities. I would say, from a larger level, most of the facilities that we know, that we’re connected with are bigger, but there’s definitely a lot of growth in smaller facilities there. And I think the beauty of it too, is as a e-commerce entrepreneur that’s growing and looking to extend your product categories, it’s not going to make sense for you to go work with a factory that has 10,000 employees. If they can produce a million units a month, and you’re producing 10,000 units, it’s not going to make sense for them, or for you to work together. I mean, you’re going to be the smallest fish in their pond. And it’s very unlikely that they’re going to spend that much time or give you that much attention.

And so for you, especially if you’re starting out, or just kind of starting to see some growth, it’s going to make much more sense to work with a smaller midsize factory that you can start taking up maybe 20 or 30% of their capacity with rather than just getting a percent capacity here, 5% there. I mean, really, I think the key to finding a good factory for e-commerce Company is finding one that they can grow with, finding one that they can really scale with and build a relationship with.

Steve: I guess what I’m trying to get at is, what are the big disadvantages of going outside of China?

Nathan: I mean, the disadvantages are I would say just the visibility. You have really, in China, the infrastructure is very strong, you have a lot of options, there’s a lot of material sources there with different fabric markets or raw material sources. And outside of China, it’s just not as developed. You’re going to places where sometimes they don’t have good internet access; sometimes they don’t have access even to running water. I mean, it’s really sometimes a bit crazy. And you look at some photos or some of the infrastructure in countries like India or Bangladesh, I mean, there’s flooding, there’s even it was crazy, like when I was in China two weeks ago, that typhoon hit, and I was flying out of LA, and my plane was delayed three hours because the typhoon was supposed to basically hit Guangzhou and we were supposed to land.

And so you have especially outside of China, I think you are more prone to face more natural oriented disasters and more production problems. Whereas, in China, and especially if you’re working with a facility that has more inspection certificates, it’s more likely to be stable, it’s going to be a stable production environment. So you add more risks to the table. But that’s not to say you should be scared. I mean, I think it’s really important right now, especially with these tariffs in place that you are motivated and excited to explore other production opportunities.

Steve: What about the other way around? Are the Chinese tariffs on US products, is that going to affect anything?

Nathan: Yeah, I mean, it’s affecting companies that are exporting to China and China selling into China. Are many e-commerce entrepreneurs doing that right now? Not necessarily. Is that a huge opportunity? Yes. I mean, I know a lot of companies that have done pretty well in China, but it takes investment. You either got to go set up your own store on TMall or Taobao or find a distributor or really try to figure it out how to hit a molder niche in the Chinese market. And I think it’s much easier said than done. If you don’t have experience selling into China and don’t know how those consumers interact with your product, it’s going to be pretty challenging.

I mean, I always find it surprising when companies ask about selling into China or other Asian countries because the market is so big and seemingly so untapped, but if you’re struggling to sell products to consumers that you know so well here in America, it’s very questionable to me how you think you can do so much better selling products in China, if you don’t know that market at all.

Steve: Okay, I mean, we’ve been talking a lot about Philippines, Vietnam, Pakistan, but what are your thoughts on sourcing in the US at this point?

Nathan: I mean, sourcing the US is an option that should be explored. I think that the costs are definitely going to be higher; the experience can be hit or miss. You definitely have a lot of US facilities that are going to give you sometimes even a worse experience than you would get producing abroad, but I think at the end of the day, it comes down to cost and your margin. And if you’re spending 30% more to produce your products here in America, and your brand doesn’t revolve around that made in America aesthetic, it’s probably not going to make sense for you as an e-commerce entrepreneur because if you’re spending 30% more to produce these products than your competitors, well then you can’t have that cost per acquisition that these other companies can take in because their margin is 30% higher than yours.

Steve: I guess with the 25% tariffs coming down, that might even things out a little bit.

Nathan: Yeah, but I mean, well, here’s what I would say though too, is in the e-commerce world, I would say, outside of your brand, really what it comes down to is your margin. If I know that I can produce my products for let’s say, even 10% less than you can, then I can go spend 10% more to acquire a customer while staying profitable. Whereas, you can’t spend that 10% more because you’re spending 10% more to produce your product than I am.

Steve: Where are some places that you would go to find US manufacturers?

Nathan: There’s sites like Thomasnet, there’s Makers Row is American based manufacturing marketplace that it’s pretty cool. Those are the two main sites that come to mind, Makers Row and Thomasnet. And that’s definitely some options that I would look into. I mean, I think there’s definitely opportunity to potentially produce in America, but I would first explore outside of China and other countries in Asia.

Steve: Okay, so Nathan to kind of conclude this little talk that we’re having here, where do you see things going looking one year out just your own personal predictions?

Nathan: Yeah, I mean, one year out, I would say companies that are smart are going to diversify their supply chain outside of China. I think China in general has gotten more expensive. I mean, when we started exploring production outside of China almost two years ago for some of the companies we work with, there was so much just amazement, because it’s really ripe with opportunity. When I look outside of China, when I look at countries like India, or the Philippines or Thailand, it almost reminds me of China 10 years ago, when companies were really starting to scale up there, and the infrastructure was just starting to grow.

So I assume, and I think that companies are going to continue to transition production outside of China. I don’t, I honestly don’t think there’s going to be a huge shift of production back into America. And I do think these tariffs are going to affect a lot of consumers, a lot of American companies, and even Chinese factories.

Steve: Can you real quick comment on these other countries outside of China, and what kind of their specialties are? So you mentioned like cut and saw, and was that the Philippines or Pakistan? Do these countries have some sort of specialty?

Nathan: Yeah, so Pakistan, India can be great for leather, a lot of cut and saw fabrics, basically any textiles or bags, sometimes hats, shoes, you can produce across India, Pakistan, Vietnam, Thailand, and the Philippines. I would say more electronic oriented products; it’s going to be very hard to diversify your products outside of China. That area around Shenzhen, it’s just so good for producing electronics that I don’t really know anywhere else in the world that has that capability like that. But for other products, sun glasses I think are mostly in China, and even kind of all those little types of gadgets, those kind of small price products, it’s all done around Yiwu and it’s going to be pretty hard to diversify those outside of China. But there definitely are some hidden gems out there. And I really encourage people to look for production opportunities outside of China.

Steve: So it sounds like the primary opportunities outside of China are in the textile space.

Nathan: Yeah, textile, handbags, bags, backpacks, all that.

Steve: Okay. And if you sell electronics, China is probably going to be the place to be. What about plastics?

Nathan: Plastics, you can do some like injection molding in Vietnam, in India. China is definitely still really good for plastics, but there are opportunities to explore outside of China.

Steve: Okay, cool. Nathan, this is a very enlightening talk. Where can people find you if they have questions for you besides on TV and MSN?

Nathan: Yeah, I mean, they can find me on LinkedIn or Twitter, Nathan Resnick, and feel free to check out Sourcify. We’re the fastest growing B2B manufacturing platform that helps hundreds of companies produce products around the world. And I really appreciate you having me on today.

Steve: Cool. Thanks for coming on.

Hope you enjoyed that episode. And even if you don’t currently sell online, these latest rounds of tariffs will actually affect everyone. And if you do sell online, you better have an alternate sourcing plan going forward. For more information about this episode, go to mywifequitherjob.com/episode229.

And once again, I want to thank Privy.com for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop-ups for any primer that is closely tied to your store. If you want to give it a try, it is free. So, head on over to Privy.com/Steve, once again, that’s P-R-I-V-Y.com/Steve.

I also want to thank Klaviyo which is my email marketing platform of choice for e-commerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post-purchase flow, a win-back campaign, basically all these sequences that will make you money on autopilot. 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 talk about how I use these tools on my blog, and if you’re interested in starting your own e-commerce 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’re 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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228: Improving Email Deliverability And Powerful New Klaviyo Features With Jake Cohen

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Improving Email Deliverability And Powerful New Klaviyo Features With Jake Cohen

Recently, I attended Klaviyo’s first ever email marketing conference in Boston and while I was there, I recorded a bunch of podcasts. Today’s episode is with Jake Cohen who is the director product at Klaviyo and an expert on email deliverability.

In this episode, we discuss some of the awesome features Klaviyo just released but the best part are the nuggets that Jake provides on how to improve your email deliverability. These are strategies that I was not aware of and I’m definitely going to change things up.

What You’ll Learn

  • Klaviyo’s new feature that will allow you to track any parameter to trigger email campaigns
  • How to improve your email deliverability
  • How to dynamically change up your set depending on customer behavior
  • How often you should prune your list

Other Resources And Books

Sponsors

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.

Klaviyo

Privy.com –  Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store.  They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget.   Click here and get 15% OFF towards your account.

Privy

Pickfu.com –  Pickfu is a service that I use to get instant feedback on my Amazon listings.  By running a quick poll on your images, titles and bullet points,  you can quickly optimize your Amazon listings for maximum conversions.  Click here and get 50% OFF towards your first poll.

SellersSummit.com – The ultimate ecommerce learning conference!  Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business.  Click here and get your ticket now before it sells out.

Sellers Summit

Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and dig deep into what strategies they use to grow their businesses. Now recently I attended Klaviyo’s first ever email marketing conference in Boston. And while I was there, I recorded a bunch of podcasts. And today’s episode is with Jake Cohen, who’s the Director of Product over at Klaviyo and he’s actually an expert on email deliverability.

And in this episode, we discuss some of the awesome new features that Klaviyo just released. But the best part of the show to be honest with you, are the nuggets that Jake provides on how to improve your email deliverability. These are actually things that I did not know. And I’m going to be changing up some of my email strategies for sure after this interview.

But before we begin, I want to give a quick shout out to Privy who is a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now they’re a bunch of companies out there that will manage your email capture forms, but I like privy because they specialize in e-commerce. Right now I’m using Privy to display a cool wheel of fortune pop-up. Basically a user gives their email for a chance to win valuable prizes in our store. And customers love the gamification aspect of this, and when I implemented this form email sign ups increased by 131%.

So bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my Klaviyo to close the sale. So head on over to Privy.com/Steve, and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ For 15% off. Once again that’s P-R-I-V-Y.com/Steve.

I also want to give a shout out to Klaviyo who is also a sponsor of the show. I’m always blessed to have Klaviyo as a sponsor because they are my email marketing platform that I personally use for my e-commerce store, and I depend on them for over 30% of my revenues. Right now Klaviyo has a special offer to help ecommerce businesses like yours prepare for the holiday season. From planning your email schedule to creating powerful holiday target segments, Klaviyo is actually offering their expertise for free.

So go to Klaviyo.com/BSCM and sign up for a free holiday strategy assessment. This assessment will be geared towards the needs of your business, chock full of strategies and tactics that will help you make more money, so sign up now for free at KLAVIYO.com/BSCM, now on to 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 My Wife Quit Her Job Podcast. Today is day two of the Klaviyo conference in Boston and I was lucky enough to have Jake Cohen with us from Klaviyo. He gave an excellent keynote this morning on the brand new features that Klaviyo is introducing. And just to be upfront with you guys, normally I don’t actually go on a podcast and talk about new features of just some random tool. But I really felt that these brand new features are actually very compelling and it actually makes Klaviyo like light years ahead of anyone else that’s out there and I have the man himself here to explain these features. And one thing okay, I just want to start with this one feature that really made me excited.

Jake: Sure.

Steve: It was the custom objects. And I’m a geek, right. I’m an engineer and what this feature is, and I’ll let you elaborate but it basically allows you as a store owner to pass any arbitrary information over to Klaviyo that you can then use to trigger email campaigns and actually have the data that you pass through. And so…

Jake: Nailed it.

Steve: If you could just provide some like practical applications of this in case I got too technical for the audience there.

Jake: Yeah, I’ll try to not get more technical, teasy with that kind of thing. Great summary by the way, that was really good. You’re totally hired. Yeah, that’s the idea, right? So when we’ve talked to a lot of different customers and there’s these kind of buckets of information that they have that they want to use in their marketing. So you’ve got your customer data, things you know about different people, your sales data, and then your marketing engagement data. And then there’s this kind of other bucket, which is it tends to be very business specific. Probably the most common thing which we talked about today is gift cards.

And so like lots of businesses have gift cards, it’s a great way to get some revenue in before you know what you want to buy. But what ends up happening a lot of times is people will get a gift card, but they won’t necessarily spend all of it or they’ll forget that they have it right.

Steve: And is that a problem though? If they forget that they have it then…

Jake: Well, so here’s the interesting thing, maybe not, right. So that’s breakage is what you’re talking about. Breakage isn’t necessarily bad. You don’t have to give anything away, you got cash. Sure, I know that that’s like a viable long term business strategy. People don’t ultimately spend money. But it’s certainly not the worst problem you could have. Instead, what we found when we talk to store owners, is that when someone has a gift card, there’s certainly a percentage of people that only spend that gift card amount, and then pay for shipping. But a larger percentage of people actually use it to buy more items than they would have in the past to try more things.

And in that case, you start to build the relationship where someone can try your inventory, try your products; hopefully, they said they liked it, because you have good products, and then they come back and buy again. And the gift card just kind of makes it easier to start that next phase of the relationship where they become a purchaser.

Steve: Okay, so what is this customer object API? How does that solve the gift card problem and getting them to redeem the card?

Jake: Yeah, so gift cards are objects is the technical term. And the way this API works is, you can pass us anything you want. So you can say, like, I want to share with you that there is a gift card, when it was created, how much is on it, and the last time that the value changed. And so what you could do is, when you pass that over to us, what we do is we expose that in the UI. So without being someone who is an engineer that’s looking through all the different databases and writing, command line scripts to try and get stuff out, you can literally say, hey, I want to trigger a flow when the amount of the gift card changes. And then you want to say, like, hey, I noticed you spent something, and you could put a filter and say, if the gift card value is above zero in 30 days, I want to send an email and say, like, hey, you have this much money left, and put some recommended products right in the email.

And so what ends up happening is you’re taking into account this very specific piece of information about your business, and you’re creating an opportunity, a moment to help your customer basically benefit, because they forgot about something, and they’re going to save some money on their next purchase.

Steve: And I would imagine that there’s scarcity in this gift card. And chances are people are going to spend more than what’s on the gift card, right?

Jake: That’s what we find yeah.

Steve: And that’s really powerful. And I would imagine, once this is out, there’s going to be just all these Shopify apps and whatnot that automatically take advantage of this, right. So really, there’s not going to be any coding involved.

Jake: For like a store owner.

Steve: For like a store owner.

Jake: No, in fact, the way that we’ve designed the feature — so what — there’s only a limited time when I’m up there so I can only share so much. One of the things that’s part of this work is we’ve extended the flows feature, the template editor and the different campaigns too so that you can automatically select for example, a trigger from a custom object to start a flow. So as soon as the data is in right, you can access it through the regular UI that you would have within Klaviyo and you can just like easily whip that up and take advantage of it in the same way that you would from a placed order event or any other piece of information.

Steve: So just to be clear for the audience members who aren’t familiar with Klaviyo, what Jake is saying here is that once Klaviyo has this gift card information, you can actually whenever someone makes a purchase and deduction that you’ve card, you can actually use that as an event to trigger an email autoresponder sequence…

Jake: That’s right.

Steve: To get them to buy more.

Jake: As one example yeah.

Steve: Just as a simple example yeah, but it’s going to be a lot more powerful than that for geeks like me, especially.

Jake: Yeah.

Steve: You call me geek?

Jake: No.

Steve: Okay. So the other thing that I thought that…

Jake: Me too, we’re in good company.

Steve: Yeah. The other thing I thought that was actually really cool was the analytics, the additional analytics of Klaviyo. I know there’s a whole bunch of slides.

Jake: Yeah.

Steve: I don’t know if you want to just kind of give a brief overview of what you think that the majority of store owners out there will be concerned about.

Jake: Yeah, so this is — I’ve spent a lot of time thinking about this. I think in April of this year, maybe March or April of this year, we got a lot of feedback, we did like a big poll with all of our customers. And we were like; if you could change one thing about Klaviyo and make it better what would it be? And like resoundingly, it was reporting. People were like, man, you just can’t see anything in the product, you have all my data, you make it impossible to see. And we were like, we most definitely need to solve that.

So the customizable analytics feature, which is when you come on the dashboard, there’s a series of tabs, one of them is analytics. We designed it in a way that’s completely customizable. So we’ve built some default dashboard. So we’ll show you the things that we think are important, so you don’t have to work very hard. But if you’re specific about seeing the data that you want, within a certain time interval, or a certain time range, or you want to see certain metrics that matter to you most in a certain order, like if you can just drag it all around and switch everything up you want and like you’re done.

And so, we’re actually really excited about this, because if you look around at other platforms that sort of give you some reporting on how things perform, there’s one of two problems. The first problem is it’s incomplete. So you don’t really get good views, you get some views. And then you’re like, hey, what should I do? And they say, oh, well, you can export a CSV and spend your life in Excel. And then you can find what you want, which is not helpful, or it’s a very technical experience, where you have to basically understand how to work within a Redshift cluster and write cron jobs that are going to go like clean everything up and then automatically work with a visualizing tool so you can go see and it’s like, who the heck wants to do all that stuff, right?

And so we tried to take approach where, like, you don’t have to work hard, and you can be as flexible as you want. And what we also announced which is coming which I’m really pumped about is the Report Builder. So as an extension of customizable analytics, you can just see what you need to see. We think there’s kind of this other bucket of analytics where people have these sort of more sophisticated, more robust, more specific questions. So they want to know hey, when someone buys – I’m making up an example, if someone buy shoes first, what’s the thing that they most often buy next?

It’s actually really hard to understand without buying some other service that’s going to integrate all your stuff and then it’s like crazy, but we already have all the information. So, we just have to give you guys an experience where you can basically select a couple of inputs to get a report out. And what I didn’t announce because it’s coming later is we’ll add visualizations to that too. And so eventually you’ll get this experience where you can have a really sophisticated question, you can store that and then you can go see it anywhere you want, and so it becomes a really dynamic experience where all your data is at your fingertips and it will tell you anything that you want to know, you just have to ask.

So just for the benefit of the e-commerce users out there, Klaviyo actually has all your data, all your sales data about everything a customer purchased when and how. And I teach a class on this and a lot of people just use Google Analytics. Google Analytics is actually very complicated to extract information, and it’s often incomplete too because sometimes like the pixel doesn’t fire and then Google might not get the data whereas Klaviyo has all the real data. And what they’ve essentially done and I’m just paraphrasing…

Jake: Yeah, that’s clever.

Steve: Is that they’ve allowed you to extract all of your sales information and generate your own reports and it’s just really powerful, and you have infinite freedom to look at whatever key component that you’re looking at. Jake used the example of shoes, maybe you can say hey, tell me what other products were bought with shoes, all that stuff you can just generate reports on the fly and get accurate data for.

Jake: Nailed it yet again [overlapping 00:11:27].

Steve: Wonderful. And then okay so one thing I was kind of excited about was your new lifetime value of customer features. And the main reason I’m interested in that is because in the past I’ve created custom audiences of my best customers, but sometimes a little haphazard right? I send that over to Facebook and I run ads, but because Klaviyo has hired this data analytics group, I guess, is it…

Jake: The data science.

Steve: Data science team right, they can now predict based on customer behavior how much money a particular customer is going to spend in their lifetime. And then you can create segments in your email for this and then use that for Facebook ads to create lookalike audiences. I’ll let you explain since I’m clearly not the expert, I’m just — all this stuff I’m talking about is what I gathered from your presentation.

Jake: Yeah. No, no, no, it’s great. So yeah, so we hired — yeah, this data science team, they’re awesome. And there’s a series of really, really good blog posts that they publish, that explains the models that they created, the experiments that they went through, how they went to figure this out, because it’s a bit of it, it’s kind of a journey, it’s a little bit of a wild west industry where everyone says they have the answer. But it’s math, right. So it’s like, let’s publish the math and let’s talk about it and make sure it’s right. And so that’s the approach that these guys take, which I love.

What they basically figured out is if you look across the aggregation of customers within your account, the likelihood that any of them will spend, how much they spend, and how frequently you can distill that and apply it to an individual profile to help understand how you specifically might spend. And so what they’ve done is made projections for the next year for every single profile in your account of what they’re going to spend.

And what we do is when you want to gather that information; we compute it on the fly every time you want, because every time there’s a purchase, or a new customer, the model changes the results. So it’s the most up to date information every second that you go use it as opposed to something gets stored and stale after a long period of time. So that’s how it works.

Steve: What do you see are some main practical applications that store owners can use with this information?

Jake: The one that I like the best, which is one of the ones we talked about is you can take your predicted lifetime value, this is exactly — okay, here are a set of steps of what I would do right now. If I was running a store, number one, I would take, I’ll create a segment of all the profiles in my account, which is just email address has an ad sign in it. I would export that and I would select all the predictive analytics. Once I had that out, I would look at what the average lifetime value is, and then I would take the top 20%, when you spend it out, I’d figure out what that number is, and I’d build a segment of anyone who’s predicted lifetime value is above that number.

Once I had that, I would do exactly what you said, I’d integrate with my Facebook ads account, I would turn that into a custom audience, I’d build a look like audience and I would target them with an offer to try and get them to come into my store if I did offers, if I did just, whatever, some call to action to acquire them. And I track how that’s performing over time. And like, guarantee you’re going to get some good people that way. And these are going to be like your best customers long term, who will buy from you over and over and over again?

Steve: Yep. And I would imagine you would also send out an email campaign to those people alongside of the Facebook ads, right?

Jake: So it’s a more loaded question. It depends on what your campaign strategy is. I probably would not recommend just like, here’s your list, go send something. Again, our sort of big vibe, and spirit here is like, you want to build more personal connections over time. What I might want to do is, if I were having a big sale, or a big product launch, where I was going to talk to every single one of my people anyways, sure, I might stagger my campaigns. And I might start with these top spenders and see how much revenue I can generate just focusing on them and have the content speak to hey, we noticed that you’re an amazing customer and we appreciate all your business. And so we’re literally sharing this with you first, and everyone else is going to get it next week.

So like limited supply, get it while it’s hot, and I bet you’ll see a lot that way, then you can start to open it up to everyone else. And yeah.

Steve: One thing that I’ve noticed in terms of deliverability is if I email someone who’s much more likely to open an email, then my overall deliverability works better. So what I do is I email the guys who really love me, and then the guys who are less engaged I know, like at some point later, I would imagine you can apply that here as well right? Email your highest lifetime value customers first.

Jake: Yeah. So this is cool. I’m the deliverability guy and so you’re. This is perfect; we’ve unlocked this amazing treasure chest of fun things.

Steve: I hope the audience is interested Jake, so let’s not – we could go all day on this.

Jake: Okay, yeah, so the thing that’s interesting, that’s a little bit counterintuitive about deliverability, so this is when the inbox clients make a determination as to whether or not to deliver your message. The inbox clients don’t know anything about your sales, and they don’t care. And so, what’s fascinating about this is we as store owners are like, but wait a second, someone who buys from us is obviously interested, they’re obviously engaged. But from an email perspective, they might never open an email. And in fact, you could be harming your deliverability by sending to people purely on the basis of whether or not they’re a customer and not on the basis of whether or not they engage with your the emails, because the inbox providers don’t know.

And so in fact, if your letter of the law of deliverability, which is a little bit extreme, but for theoretical applications, good to know, if you’re going by the letter of the law of deliverability, your sales data doesn’t matter. So it’s just straight open rates, just straight, well, opens. And so, and it gets even more complex, and I have a blog post about this, that explains like the secrets of each different inbox client, what signals they look for, how to…

Steve: Okay, send me the link; I’ll link it up in the show notes.

Jake: Yeah, totally. Different inbox providers, sort of like signal different things. And so for example, Hotmail, if you send to people who have not opened in the last six months, they will flag you, and they will start to penalize your placement, because what they do is they look at engagement over that time period, not really granularity beyond that. Gmail is much, much, much more sophisticated. And so what they’ll do is if let’s say you’re a daily sender, if you send every day for 7, 14, 21days, and someone doesn’t open, they’ll penalize you for that person. And if there are a lot of people like that, they’ll penalize you overall. And only has to do with opens.

And so like the best practice, and we’ve got some articles about this too, is to include in your segmentation some logic that says, like, has opened within the last depending on how frequently you send three, four or five, six months, and that will make sure that there are people who are generally engaged, so that you’ll stay out of deliverability trouble.

Steve: Okay, do you send to those people first or do you intermix them in with your…

Jake: Again, it’s kind of like how strategic you want to get. You could, there are some people that like, just don’t send campaigns to people unless they’ve opened, and they let their automated flows take care of making sure these people start to engage. Because where you get into trouble is, if you send campaigns all the time, or to a large number of people, but you’re sending to people that haven’t opened lately, that’s going to have enough signal, enough volume that the inbox is going to look at you as a sender and go, you’re bad. Your flows have a higher likelihood of being opened; always have higher open rates, because they’re triggered by events that your customers go through.

And so a really, really clean strategy is you sign up a — you hook up a welcome series to a form and people start to open that. And when they open, they make their way into the segment that has the criteria has opened recently, and you can start to send those campaigns. And then you can create a flow that is sent only to people haven’t opened a long time offering them something to try and get them back into the cycle of stuff that you can send all the time. And that’s a really clean way to keep high engagement, really good positive deliverability and make sure that your emails get in front of the people who have to see it.

Steve: I just want to take a moment to thank Pickfu for being a sponsor of the show. If you currently sell on Amazon like I do, then you know how crucial the quality of your Amazon listing is to the success of your e-commerce business. So for example, I’ve run experiments on my Amazon listings, where simply replacing the main image with a different photo resulted in a 2X increase in conversions. But how do you choose the best and highest converting photos for your listings? How do you know that you’re using the most profitable images for your products? And how do you know that your bullet points are convincing? This is where Pickfu comes in.

Pickfu allows you to solicit real human feedback about your Amazon listings in 10 minutes or less. And you can target the exact demographic of your end customer. So for example, let’s say you sell napkins and you have two main product images that you want to test. You would simply go to Pickfu, list the images, target female Amazon Prime members over the age of 35 and hit go. Within 10 minutes you’ll get feedback of which image people are more likely to buy along with specific feedback on why they made their decision.

In fact, I’ve used Pickfu to almost double the conversion rate on several of my Amazon listings by testing my images, bullet points, and product titles. And what I like about Pickfu is that you get results quickly unlike traditional split testing, and you can use this to test book covers, landing pages, basically anything. Not only that, but it’s super cheap to run a poll and right now you can get 50% off your first poll by going to Pickfu.com/Steve, once again, that’s P-I-C-K-F-U.com/Steve. Now back to the show.

Okay, that’s fantastic. I did not know that.

Jake: Oh, yeah.

Steve: You didn’t even cover this in the speech this morning.

Jake: Other stuff.

Steve: This is the other stuff. Well, let’s go back to some of the cool features that actually destruct my eye. One of them was the ability to actually change your store, depending on behavior within Klaviyo, right. So I think the example you used was, if it’s a guy and I ended up shopping, and I signed up shopping for men’s clothing, the next time I come on, I am shown men’s clothing.

Jake: Oh, you mean the dynamic web personalization.

Steve: Yeah. So how does that work exactly?

Jake: So this isn’t released yet. This is the next big thing that we’re working on. But the way it will work is using the information that we collect on your behalf about people, whether they’re men, whether they’re women, whether they’ve looked at certain products, or purchased certain products or certain collections, that kind of stuff, our recommendation engine will pull out, and this works for emails today, we’ll pull out some of the products that we think fit for that person. And it roughly works by pulling best selling products, excluding stuff that they’ve purchased in the past, and then reordering it based off of stuff that they looked at, or purchased.

And what will happen is, depending on the logic that you set up, when someone comes to your site, we’ll know who you are, because we will have cookied you, and you will have signed up, and we’ll have this information. And you could have a widget kind of show up on your screen that says, hey Steve, we recommend the following things, we think these are right for you. And so as a consumer, you have this experience where you feel like someone is actually doing some hand-picking if you will off products that are right for you to both increase the personal experience that the store can give you, but also increase the likelihood that you buy it, which is good for the store too.

Steve: Cool. So this feature is not released it yet? Do you have any, like preliminary data from live shops that you kind of bating this with?

Jake: No, we’re in the design phase with this right now. So the feature that we talked about this morning, where you can target list and segments for forms, there are some really rich underlying technology there that’s going to be used for the onsite personalization. So, we’re designing the right experience to get this live right now. But we’ve got the sort of core tech in place to make it happen. And so that’s where it’s at, we expect it will be coming out in the month — next, probably, like one to four or five months, something like that.

Steve: Okay, Jake, the reason why I’ve been kind of rushing through this interview a little bit is because I know you have to speak in a little bit.

Jake: Yeah.

Steve: Do you know how much time you have left?

Jake: What time is it?

Steve: It’s 3:11 right now.

Jake: 3:11?

Steve: Yeah.

Jake: I probably have to go.

Steve: Probably okay.

Jake: Let’s do a couple more minutes.

Steve: A couple of minutes, okay. So I want to get back to deliverability because it actually applies to everyone who’s listening.

Jake: Cool.

Steve: So you mentioned that one flow where you’re using your automated flows to determine who you should send a campaign to. Are there any other tips that you have to improve deliverability?

Jake: Honestly, there’s two things. One, every three or six months, there’s a pretty healthy group of profiles that you should probably suppress, which means like unsubscribe, like not send to anymore. This is, in my experience working with people, it’s really hard because you’re like, ah, but there’s like missing value in these people. They might buy something. And if I send a campaign, maybe one day, they’ll buy something. And it’s like, maybe, but probably not. And so it’s a good idea to build a segment of people that you’ve sent, I don’t know, 20 emails to in the past two years, but haven’t opened any, and they’re just gone, you know what I mean? And suppress those people.

And the reason is when you send to them, it’s a huge signal to the inbox providers that you’re not cleaning your list. And I go to this conference called M3AAWG. It’s the — what is it, the Mail Messaging Anti Abuse Working Group.

Steve: That sounds pretty geeky.

Jake: It’s super geeky. It’s like the extreme gray beard under lords of email around the world, like get together and decide what to do with email. It’s wild, but they’re literally looking for ways to penalize senders that don’t respect in boxes. And so if you just think about earning the right to send the message and removing people who don’t want it, and being respectful, you’ll be in great shape. And the second thing I’d say is like, actually, don’t worry about it that much.

If you use Klaviyo, we have some very high quality shared infrastructure that we have our sender send on and we are monitoring automatically every single send from every single person that we remove bad senders and promote good ones. So, we have huge volume and great relationships with the ESPs like, it’s just not something you should stress about if you’re respecting in boxes, you’ll be in good shape.

Steve: So what you’re saying is when you’re sending to people who aren’t opening, that will affect your overall deliverability. Is there some sort of best practice on who these guys that you prune, what are the rules that you’re using to suppress?

Jake: It kind of depends on how frequently you send, but like a good — like you can’t go wrong type of a segment is people who have received 10 plus emails in the last two years and opened none.

Steve: Okay, just get rid of them, that sounds like pretty conservative.

Jake: Yeah, it’s very, very conservative. You won’t like harm your business really materially in that way. And like you’ll help your deliverability. Something that’s really interesting, Josh was on a panel yesterday, he works with JackThreads. He tells a story, they had 16 million email addresses and then realized that they were all unengaged and eventually had to go down from 16 million to 5 million to 1.1 million to 300,000 to 30,000 email addresses is all they had left.

Steve: Ouch.

Jake: And then they’ve built their list back up to 300,000. He’s making more money today with 300,000 emails than he was with 16 million.

Steve: That’s crazy.

Jake: Because along the way, he got mass blocked by Gmail and put immediately in the spam folder, every single email because he wasn’t respecting the inbox. And now – oops, that’s mine, I got to go. Now he’s the biggest fan boy in the world of making sure that you respect the inbox and you send to people who want it because it works.

Steve: Okay, well Jake, I’m going to let you go. You got one last talk and then you’re home free right?

Jake: Yeah, this is — I mean I could do this all day, it is my favorite thing in the world to do, this is like vacation for me.

Steve: All right man. Well, Jake, I really appreciate your time.

Jake: Likewise, thanks for having me.

Steve: All right, take care.

Hope you enjoyed that episode. As you can probably tell from the interview, Jake is a total email geek and his insights on deliverability really blew me away. For more information about this episode, go to mywifequitherjob.com/episode228.

And once again I want to thank Klaviyo for sponsoring this episode. Klaviyo is my email marketing platform of choice for e-commerce merchants and you can easily put together automated flows like an abandoned cart sequence, a post-purchase flow, a win-back campaign, basically all these sequences that will make you money on autopilot. And right now they’re offering free consulting, so head on over to Klaviyo.com/bfcm to sign up for free. Once again that’s K-L-A-V-I-Y-O.com/bfcm.

I also want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop ups for any primer that is closely tied to your e-commerce store. If you want to give it a try, it is free. So head on over to Privy.com/Steve, once again that’s P-R-I-V-Y.com/Steve.

Now, I talk about how I use these tools on my blog, 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.

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227: Email Marketing Takeaways From Klaviyo Con With Austin Brawner And Toni Anderson

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227: Email Marketing Takeaways From Klaviyo Con With Austin Brawner And Toni Anderson

A few weeks ago, I attended Klaviyo’s first ever email marketing conference and it was an amazing event. In this episode I go over some of my key takeaways from day 1 along with Toni Anderson and Austin Brawner of Ecommerce Influence.

What You’ll Learn

  • How to create optin forms to attract higher LTV customers
  • Is giving away coupon codes for an email a good idea any more?
  • Some overall statistics for email optin rates
  • Creative ways to gather email addresses
  • How to improve open rates and click through rates
  • How to improve email conversion rates
  • Do text based emails outperform html emails?

Other Resources And Books

Sponsors

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.

Klaviyo

Privy.com –  Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store.  They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget.   Click here and get 15% OFF towards your account.

Privy

Pickfu.com –  Pickfu is a service that I use to get instant feedback on my Amazon listings.  By running a quick poll on your images, titles and bullet points,  you can quickly optimize your Amazon listings for maximum conversions.  Click here and get 50% OFF towards your first poll.

SellersSummit.com – The ultimate ecommerce learning conference!  Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business.  Click here and get your ticket now before it sells out.

Sellers Summit

Transcript

Intro: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not in business. Now last week I attended Klaviyo’s first ever email marketing conference in Boston with my partner, Toni Anderson. And there, we actually met up with Austin Brawner of the Ecommerce Influence podcast and decided to record a couple of sessions together. Now in today’s episode, we do a breakdown of day one of the conference including some key email marketing takeaways of the day.

But before we begin, I want to give a quick shout out to Klaviyo who is also a sponsor of the show. And I like Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 30% of my revenues. Now Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here is why it is 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 out an email to everyone who purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they purchased, piece of cake, and there is full revenue tracking on every single email. Klaviyo is easily the most powerful email platform that I’ve ever used and you could 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.

I also want to give a shout out to Privy who is also a sponsor of the show. And actually at the Klaviyo conference, I had the pleasure of meeting the CEO Ben face to face as well. And Privy is the tool that I use to build my email list for both my blog and my online store. And what does Privy do? Privy is an email list growth platform and they manage all my email capture forms. Now they’re a bunch of companies out there that will manage your email capture forms for you, but I like privy because they specialize in e-commerce.

Right now I’m using privy to display a cool Wheel of Fortune pop up. Basically a user gives their email for a chance to win valuable prices in our store. And customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%. So bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve. Now onto 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.

Steve: Welcome to the My Wife Quit her Job Podcast. We are broadcasting from Klaviyo conference in Boston. And what was cool is I didn’t think that I was going to actually know anyone here, but it turns out my buddy Austin Brawner is here speaking and I brought my business partner Toni Anderson with me. And what we’re going to do today is we are going to do a recap of day one of the event and kind of go over some key takeaways because we attended quite a few sessions between the three of us. And we’re just going to talk about what we learned.

So I will start first. And one thing that surprised me was one of the things that – I can’t remember, one of the Klaviyo guys got up there and he said that the wheel of fortune is bad, right. And I was curious about it. And he showed some other good examples of opt in forms. And they were giving away coupon codes without any context either. So you have this wheel of fortune, which also gives out coupon codes, and then you have a good example of a coupon code. It just didn’t quite make sense to me because if you’re giving out a coupon code, no matter what, then shouldn’t those two things be equivalent. I don’t know, do you guys have an opinion on that?

Austin: So yeah, I totally agree. It’s an interesting point. And I think with the wheel of fortune, the wheel to type options, where I feel like people run into trouble is setting them and forgetting to clean your list, right? Like, it doesn’t really matter if you are bringing people in from a discount that’s static or a discount that’s spinning. The one that’s spinning is probably going to attract more emails. But if it does attract more emails, you need to clean your email list or you’re going to get in trouble. And you’re going to have a bunch of emails that bounce and junk and that sort of thing.

Steve: Right. It actually kind of goes back to the philosophy earlier of like single versus double opt in. I’d rather get the emails upfront, put them through a sequence, and then prune as opposed to potentially driving someone away in the beginning, or using something that’s less high converting and then letting it go. I don’t know. Do you have an opinion Toni?

Toni: Well, I thought it was interesting. As soon as I saw that slide, I wrote a note, ask Steve about wheel of fortune, because I know it’s something that you’ve talked about a lot.

Steve: Yeah, I had great results with it. So yeah.

Toni: And I haven’t used it. But I use a pop up with a discount. And that’s actually my highest converting flow in my all of my flows. So I actually I didn’t see there was much of a difference either. I find the wheel of fortune annoying personally as a shopper. And I think because you talked about it maybe and other people, it’s everywhere now.

Steve: That’s true. Yes, I have mentioned it on the podcast. And then all of a sudden, like, I see all these stores using it.

Toni: Well, and I wonder how much of it is maybe saturation.

Steve: Probably now. In the beginning, when it was a novelty item, it worked really well. Like, I think my email sales got boosted by like 130% or something like that when I first started using it.

Austin: Sure. I think it’s a great tool. But it comes down to like everything with email capture; it all comes down to what your offer is. And it doesn’t really matter the technology that you’re using. It’s like are you providing quality offer? Are you making sure that the emails you get are quality afterwards, are you checking them and just monitoring your open rate? Because you don’t want to have poor open rates that lead to down the road issues with deliver ability. But yeah, no, I think the biggest thing is just focus on your offer. That’s the most important when it comes to email capture.

Steve: Cool. And then one thing that I just jotted down here in case the audience is interested, the median opt in rate for an email form according to Klaviyo stats was 1.8%. And then the top 10% of opt in forms opt in at 6.5%. And the decay rate per month is somewhere on the order of 1.4% of people kind of drop off your list on a monthly basis. So, I thought those stats were surprising. I think my top email form is at like 3% or something like that. So I’m obviously not in the top 10%.

Austin: I get the privilege of taking a look at a lot of different email opt ins, and for different businesses I work with. So the best I’ve seen consistently is 12% opt in rate. And so, I’m going to talk a little bit about this in my presentation tomorrow. Generally, well I have seen above 10% a couple of times. And both of them were with quizzes that were highly relevant to what the outcome people wanted to get. So both of these were quizzes related to skincare. And they would rate people. You can get your skin — like your skin or reading and ask people — that’s something that’s very much important to people that they’re looking for skincare, they can get a better idea of what products they need. They go through a quiz, and then from there they can get directed to the correct product. So those are the things I’ve seen that are kind of the most effective.

Steve: I can see that working really well because you want to know what your skin type is so you can buy the product. So it’s actually providing some value in a way, right?

Austin: It’s providing value, and also delivers the product that is perfect for you at the end of the quiz. It’s like a perfect little fit in certain products that will actually work.

Steve: I know for me, this whole coupon pop up thing is already getting saturated. I feel like any store that I go on instantly has a coupon pop up these days. And so I’ve been mixing it up over the years. I actually had an EBook that I was delivering. So if someone’s looking at handkerchiefs, I had a crafts eBook, if someone was looking at napkins, I had a napkin folding eBook. And then when I did the wheel of fortune it jammed. And maybe it’s time to move back to the old school way now that the coupon thing is getting really saturated again, I don’t know. It shifts over time.

Toni: One of the things in that same session he talked about was the, I think they called it a welcome mat where it takes over the whole screen. And actually that for me as a shopper causes me to immediately not want to be on the site. He is trunk Club, which is a completely different user experience. But I’m wondering, Austin, in your experience, how do those work, because as a shopper I find them, I’ll click off the page almost immediately.

Austin: So I think it’s always dangerous to think about what you as a shopper do because I feel the same. I have not; I don’t really open that many emails. I’m not a big — I despise my email inbox even though I’m the person helping people send thousands of emails. And so, for me they’ve always worked very well like taking over the page and delivering. But again, it goes back to has to be quality offer. So you’re not going to go away from the page if it’s something that you really want. If it’s just an annoying bad offer, we’re going to give you 5% off for your next purchase; it’s going to be annoying.

If it’s something super relevant, a good example I’ve seen a client I worked with for a while this, they had a discount and they sell national park maps. They are really beautiful, custom designed. They had a discount offer for a while and then they actually switched that up to a giveaway for a park pass for the national parks. And it was way more aligned with what their customers were looking for. And it was one of those things where they could stick it right in front of people and deliver it in kind of an abrasive way, but people were like, okay, well, actually, I do want a national park’s annual pass. It sounds awesome. I’ll put my email in and also it didn’t cost anything for them except for one pass a month, which is way cheaper than giving 15% off.

Steve: Oh yeah, it’s a good idea. Yeah, one thing — there was one example in the presentation. I think it was — was it a shoe club or something? I was sitting next to you and I think what they do is they try to get you on a subscription. But they give you $20 towards a gift card first, and then you pay $20. But essentially they’re getting on the list and there are essentially making you pay money right up front for a subscription. This is only for shoe fanatics. And then at the same time, you’re attracting lifelong customers who are really into shoes that will buy over and over again. So I thought that was really clever.

One other key takeaway I had that was pretty clever, which is something that I’m actually not doing right now, there are a bunch of emails on my list that have not opened in a very long time. And the first thought is to send them a win back campaign. And I have, but still no one opens, right, because you haven’t opened in a long period of time. And so one takeaway that I got was that you can just create a custom audience, add those guys and run them on Facebook ads to try to get them back because clearly, they’re not opening your emails. So you might want to try a different channel. Any other takeaways from you guys?

Austin: I think my biggest takeaway from the sessions in day one is how important it is to focus on your product and make sure — so there was a presentation the second half of day one, which was about customer loyalty and about — put on by smile.iOS. And they were talking about the experience that people have with your product, and how if you’re competing, there’s a realm of confidence that Amazon has that you just should not be competing in. That’s price, convenience, and select in like selection. If you’re competing on any of those things, you’re going to lose; you’re just going to lose. They’re better at it than you, they’ve been doing it for longer, they’re going to continue, they’ve got more resources in you.

So, my biggest takeaway is just to take a look at whatever you’re selling, and look at the product and say, is this truly something that is unique, is it quality? Is it outside those three things that Amazon specializes in? And can we compete on experience versus price selection and convenience, because the long term even the short term really, you’re going to lose if you’re competing on those three things.

Steve: I agree. And in a way, that is why with my store at least, we’ve kind of doubled down on the personalization. And we emphasize fast turnaround times and will basically take care of the phone; you have a human that you can contact about the personalization to go back and forth with. And even though Amazon does have that, it’s less personal. And so it’s a pain in the butt to handle personalized orders. But the profit margins are very high. It’s just one of those things where if you put a little extra effort, it kind of differentiates your company, and that’s how you differentiate yourself from Amazon. And I think for us, actually, the other stuff that we sell to be quite honest, will probably become commodities except for that. So that’s why we double down on it.

Toni: I think we’ve all been in Mike Jackness talks about email marketing. And he in ColorIt emails people, I mean I think there’s like 90 some emails in his flow. When we were listening to — I can’t remember his name this afternoon, but he talked about same…

Austin: Mike Gracewicz from Taylor. It’s a really tough last name, but he’s from Taylor Stitch.

Steve: Yeah.

Toni: And he talked about looking at your customer buying cycle. So are they buying like at 30 days and 60 days? Then why are you emailing them for seven, eight months? And that was actually something interesting that I started thinking about, because I took Mike’s advice and I have a fairly long email sequence as well. But I might change it up now and work on some of that segmentation that he talked about in his session.

Austin: Yeah, I think that’s a really good point. He also made another point about — somebody asked the question, what do your emails look like? And he responded, he was like, well, they’re generally just one image in a panel direct to that product. He’s like, for a long time, our designer continually wanted to make these beautiful long emails. But I kept looking at the click map and everyone was just clicking on the first thing. So he changed it up and he had the designer, he’s like, I’d rather you make five emails rather than one big long, beautiful one. And let’s send those five emails to spend way less time, and his results have been the same. Yeah, I think that’s a really good point.

Also, the other thing that he mentioned around welcome series, which a lot of people, this happens to I think most businesses; most of the revenue is going to come from that initial email, right? Somebody ops in, most of the revenue, maybe 80% is going to come from that initial email. And sometimes people will invest too much energy in the fives, like the remaining five emails after the first email, when the one that’s moving the needle is that first one. Until you’re really, really large, doing like millions of dollars a month, a lot of your energy is best spent on higher leverage activities than tweaking emails.

Steve: Do you have an example of what you mean for that first email? Now, how do you focus on that first email? Like, what are some things that you can do?

Austin: Well, I think — so the examples that he gave today were focusing on making sure the subject line is super compelling. He focused on giving the best offer possible right away, like the best offer that they could give and remain profitable. That’s what they’re doing, because their idea, and right or wrong, this is something that can easily be debated is that they wanted to increase conversions for people who come to the website, and they wanted, if they could increase it by let’s say, 25%, by providing a better offer, then it’s worth it for them. Because until they get a customer to make their initial purchase, they don’t — like their marketing — your marketing can’t really kick in until they’ve even tried your product.

Steve: Yeah, totally Austin. Just kind of along this whole topic, I just think to myself, a lot of times, you’ll hire like a web designer, and they’ll make a site that looks beautiful, but it might not convert as well as just a very simple design that has a simple call to action above the fold. And one thing that I found interesting in one of the talks was that the consensus seems to be from all the different Klaviyo folks that text based email seems to outperform HTML emails. And I know that from my blog, at least, I haven’t done it with my store, because we wanted a little bit of branding on it.

But from my blog, text based blew away anything with graphics in it. And I don’t know why I didn’t do that, why I’m not doing that with my store. But for some reason, maybe there’s just a mental block that I have. But I feel like the store needs to have a logo on it, and then a picture of my product. So, maybe I’m going to go back and experiment with that.

Austin: I think it’s a great idea and something so easy to test. You can just send split test between text and panel image, not very hard to set up and see which one performs better.

Steve: Yeah, in your experience, what have you seen with your clients? Because I know you’ve had a lot of clients.

Austin: Yeah, I mean, text email generally performs equal to or better than spending all the time with imagery and branded emails. The only thing is, I feel like, it’s not necessarily sustainable, right? Like you want — if you have a brand, a beautiful — if you’re selling beautiful cowboy boots, then you want to, you might be able to juice sales with a text email here and there. But overall, like your messaging, you want to deliver those beautiful images so that people see your product, and then here in their mix in some text based emails, maybe around promotions.

That’s something you could do for Black Friday, right? Try a couple of branded promotional image based emails, and then have one direct from the CEO saying, hey, I just wanted to make sure you saw this, you’re a loyal customer. Why don’t you — here’s the link to the sale for the next couple of days. Also works really well like for VIP customers just a direct personalized email.

Steve: Just to be clear, though, a text based email; does that mean it’s completely text, meaning you don’t even have like an image of your company? That’s one thing that wasn’t quite clear to me.

Austin: I don’t know what they were specifically talking about.

Steve: Okay, but the ones that you were just talking about, is there even like a logo at the top, like even a small one, or is it just flat out playing text, no HTML at all?

Austin: Flat out plain text.

Steve: Okay.

Austin: Even like just text based with a little bit of HTML I would say performs equal to or better than image based, but you could also strip entirely out and just send a text based email.

Toni: So it’s interesting because the second email in my welcome flow is a totally text email that actually makes it seem like I’m talking directly to them. And there’s not even a link to the store. And that is my most opened, that’s got my highest open rate. And people reply to me in that email. So I mean, I think it does work, but you definitely can’t do it all the time. Because I’m like, I’ve had people email me and say, hey, I want to shop at your store. What’s the link? I’m like, you managed to email me@my.com address but…

Steve: What is that? Can you give us an idea of what’s in that email?

Toni: Yeah, so I just say hey, here I’m the owner of the company; I want to tell you my story of why I started it. And then I — it’s like three paragraphs; it’s not even very long. I mean it’s probably 13 sentences total, and then my last thing is like PS, hey, I want to hear your story, how did you get into this?

Austin: There’s another one, another store that does something similar to that called Kindred Bravely, they sell maternity like nursing wear. One of the things they do I think it’s brilliant, after you make a purchase, a few days later you get a text based only kind of inspirational message from the founder that says at the bottom sent from my iPhone. So it looks like it was just composed on the fly, sent directly to you. And it’s like because their entire market is mothers, and so they basically talk about motherhood and how, keep being strong as a mother sent from my iPhone. I thought that was brilliant, it’s like that’s a really good…

Steve: That’s so deceptive. So one thing they did talk about also today were all the various automated sequences that you can run. And one thing that I found interesting is that they actually published the revenue per subscriber, the average for some of these sequences. So for example, a browse abandonment. This is if someone’s already on your list and they look at a product but they don’t check out, the average on Klaviyo is on the order of 50 cents per email per visitor, an abandoned cart was $2 and 75 cents per visitor, and the welcome series was like 25 cents per visitor so on average. And I know you work with a lot of clients Austin, is that in the realm of what you see or?

Austin: So when one thing about this statistics it’s so…

Steve: Yeah, I know yeah it’s out there.

Austin: It really depends on average order value, right? So all those statistics are totally skewed by average order value and larger businesses that sell products…

Steve: Oh, no. I’m so sorry. The presentation was segmented by average order value. What I quoted was the one that falls in for me, which is 50 dollars to $100.

Austin: 50 to $100.

Steve: Yes.

Austin: Okay, yeah. So I have to like [overlapping 00:21:04]

Steve: …top of your head. No, I was thinking you were going to say, well, since they were my clients and I was working with them, my numbers would be a lot higher.

Austin: No, I think that it’s good to have benchmarks like that when you’re trying to get a better understanding of whether or not your sequences are compelling or working. But one of the things I always tell people is like generally I’ve seen browse abandonment do about 50% of the revenue that you do through abandoned carts probably do through browse abandonment. That’s generally what I see someone who’s doing a good job. If you’re not doing that, there’s probably some opportunity there. But it’s tough. It’s tough just off of the metrics.

Steve: Sorry, I put you on the spot there. So, one thing that came up over and over and over again today was this thing about attribution. So, someone might open an email, see your ad but then two days later click on a retargeting ad and then the retargeting ad gets credit and Klaviyo takes credit for as well. Right, because in analytics, it’s last click attribution and in Klaviyo, I don’t know what the default is. But it’s on the order. Do you have it off top your head?

Austin: So the default is whether or not somebody opened up an email.

Steve: Okay, but within how many days?

Austin: Oh, I think the default is somewhere between three — I think it’s five but then you can adjust it and like generally you should be adjusting it from five to a much lower time window if you’re sending more than one email a month.

Steve: I just want to take a moment to thank Pickfu for being a sponsor of the show. If you currently sell on Amazon like I do, then you know how crucial the quality of your Amazon listing is to the success of your e-commerce business. So for example, I’ve run experiments on my Amazon listings, where simply replacing the main image with a different photo resulted in a 2x increase in conversions. But how do you choose the best and highest converting photos for your listings? How do you know that you’re using the most profitable images for your products? And how do you know that your bullet points are convincing. This is where Pickfu comes in.

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In fact, I’ve used Pickfu to almost double the conversion rate on several of my Amazon listings by testing my images, bullet points, and product titles. And what I like about Pickfu is that you get results quickly unlike traditional split testing, and you can use this to test book covers, landing pages, basically anything. Not only that, but it’s super cheap to run a poll and right now you can get 50% off your first poll by going to Pickfu.com/Steve, once again, that’s P-I-C-K-F-U.com/Steve. Now back to the show.

Right, so which kind of brings me into my point like no matter what you do whether you’re running Facebook ads, Google ads or email marketing, each tool is always going to set the attribution window to their benefit so that it seems like they are driving more of the conversions. So you really got to dig deep, I think Facebook has a view through conversion by default that you should turn off right? If someone just happens to be scrolling by and they look at your ad, they’re going to take credit for it if they end up buying. Someone with Klaviyo if it’s set at five days, a lot can happen in five days, right? It could ultimately be multiple retargeting ads, Google AdWords, anything comes into play, and if everyone takes credit for all that, it can really screw your metrics.

So for example, your metrics might say that you made 100% increase in a month but then when you check the actual numbers, it’s much, much less. So I’m curious, Austin, what do you set your attribution windows out? And how do you deal with attribution?

Austin: Well, in Klaviyo specifically, it really depends on like I was mentioning earlier, how many emails you’re sending per month. If you’re sending one a week, then maybe I’ll put the attribution window down to like two days like that, if you’re sending multiple per week, then definitely down to like one day and adjust kind of based on this to a certain extent gut feeling. If you feel like there’s a lot of more attribution than is actually happening, then you should definitely shrink it down. Because like Steve said, you don’t want a seven day window and then you’re emailing three times during that week. Everything is attributed email at that point. So I just would adjust it based on that.

But I think that’s a really — that’s something that everybody struggles with; there’s no clear answer to how you attribute sales. There’s models that are built, but that’s a really difficult question. And again, it did come up multiple times because everybody is asking that, how do we attribute; because everyone is trying to take credit and everyone is trying to earn more of your marketing spend by taking credit. So, I think it comes back to just having a little bit more of a holistic approach and recognizing that you want business growth over the long, long haul, and being performance driven is good, but sometimes it doesn’t — sometimes it can limit your long term growth if you just have to focus on getting ROI on every single channel at all times.

Steve: So anyways, I had this problem with Facebook ads where I really wanted my top of funnel to convert at like 3x and it was just very frustrating when it didn’t happen. And it was only after I just took all of my funnels holistically could I sleep at night, just because I’m a very metrics focused person, right. So one thing I did want to talk about to kind of end this was what are some creative opt in forms that you’ve seen? We talked about [inaudible 00:27:11] and we talked about giving out coupon codes. For both you guys, what are some ones that might work for you, or what have you seen that has been really especially creative?

Austin: So I mentioned it briefly earlier, but I can go into a little bit more deeply. I’m very into looking into like the quiz type funnels, not necessarily like the ask method quiz funnels, but more — so we’re hitting the point now where we can, it’s very easy to assign properties to people based on selections and answers they’ve given us. So if you’re using Klaviyo or Drip or whatever email service provider you’re using, you can ask people questions and then have their answers sent passed over as properties on to their record, and then learn what they’re interested in, what they’re not interested in, how often they purchase from you, and use that down the road. You wouldn’t have to know exactly what you’re going to use that information for, but you’ll have that to be able to create segments in the future.

So the things that I see that are quite unique and that are interesting are quizzes that you can ask people that are providing value to people that are giving them interesting answers. I know a beard brand that runs an interesting quiz, it tells you what type of beard’s man you are, it gives you products based on the type of beards you have which is kind of cool. I’ve seen…

Steve: I always ask [inaudible 00:28:39] if he’s going to start an Asian line, it always makes them laugh. I got to shave like once every three months. Sorry, go on, I interrupted you.

Austin: No, that’s I mean, that’s the thing he’s going to come up with a product, the thing first, you got over the product. So those are interesting right now. I think we’re seeing a lot of kind of chat bots capturing emails, which is interesting using Facebook Messenger for that, and then passing that along to Klaviyo, that’s a tool you can use. Those are the things I’m probably most interested in that are unique. All the same stuff continues to work. All it matters is if you have a good offer and if you can display that offer in front of people. If you don’t have a good offer, nothing you do no matter how crazy the wheel is spinning or how in your face it is, it’s not going to convert.

Steve: All right, here’s a hard one for you, Messenger or email? What’s your priority and getting first?

Austin: So for me, it’s still email at this point. I think depends a little bit on the product that you have. And it also doesn’t — it doesn’t need to be either or, right. You can capture an email through…

Steve: It’s not either or but I have my answer to this. I’m just curious what you’re going to say, but you do have to decide which one you want to try to get first, right?

Austin: Sure. Yeah. So for me, it’s still email right now. That could be changing over the next the next year. I think that there’s still some work that needs to be done with some of the platforms that are delivering, so there’s a lot of infrastructure behind email at this point, right. We’re at Klaviyo conference; they’ve invested millions of dollars into building a system that delivers emails reliably, predictably. And Messenger is still new, right? There’s not as much infrastructure around delivering those things. The reliability is not there as much, not in the sense of deliverability, but incentive the product delivering the message. So for me, it’s still email but that is subject to change Steve.

Steve: Interesting, you left that open. You kind of played both sides of the fence there. So for me, I have a similar sentiment as you do. I always try to go for the email first, mainly because Messenger is controlled by Facebook and they’ve already changed the rule as a couple of times. And who knows what’s going to happen, like you’re putting all your eggs in something that someone else controls, whereas email you always control for yourself. So what I usually do is I go for the email first. And then almost immediately, I go for the Messenger while they’re still hot with a separate offer. And I also find that that Messenger to email is a little bit clunky, because sometimes you have to use like a glue tool to get that to work.

Austin: I like the visual of this person who just typed in their email. And now they’re hot. Steve is going in for the Messenger. They’re sitting there, they’re all hot. No, I totally agree with you around the terms and conditions with Facebook. The writing’s on the wall, when you start thinking about Messenger marketing down the road, they’re running out of supply and advertising. So everywhere, you’re able to deliver toll free messages, toll free ads. They’re no longer going to be toll free in the future, you can be paying for every message you spend.

Email is something that you can deliver. The reason why email is so powerful is because you’re not paying a toll per message that you send, you’re paying email service provider, you’re not paying a toll to Google or anybody. So yeah, the writing’s on the wall with Messenger. They’re going to be charging for it.

Steve: It’s already actually in their docs actually, it’s in beta.

Austin: It’s in beta, so get it while the getting is good, where it’s cheap. But if you build your entire list around that, realize that you can be paying to reach that audience, just like you’re paying to reach your fans in the past if you’ve gone through this, but we’ve gotten to this before so many times, Instagram [overlapping 00:32:48], so shiny.

Steve: So were there any other key takeaways that I didn’t touch upon, because we kind of went down my notes, but you guys probably had your own separate notes.

Austin: The only thing I’ll mention, it was brought up a couple times in one of the presentations that someone was talking about — so the premise of one of the talks was to move away from having discounts and move towards other ways of bringing in customers, maybe and a lot of…

Steve: True fans.

Austin: True fans, customer loyalty, that sort of thing. I think it’s, you have to ask yourself truly what your business is and what your product is. So, one of the things he mentioned was around referral programs and the power of referral programs. So referral programs can be incredibly powerful. But your product has to lend itself to being talked about. I can’t imagine, I don’t know, do you have a referral program Steve?

Steve: We do not.

Austin: And I think I do, I can’t imagine it being an incredibly profitable driver of sales for you guys.

Steve: But that’s correct. It probably would not be. But one thing I got an idea was from today; they had this like, one year sequence for anniversaries, which I’m actually not doing. And the average divorce rate is about seven years, so maybe we’re going to have a seven year sequence.

Austin: That’s true.

Steve: Yeah, exactly. That’s another takeaway, which I just recalled right now.

Austin: So I think it just comes down to knowing what your product is, what your business is. Is it something that people would ever talk about with their friends? And if they do talk about it, then yeah, referral program might work. So it’s really being strategic about the things you initiate in building your business. Not everything is good for every business; it just happens that some things are good for certain businesses. Like that skin quiz I was talking about, that like is very, very good for that type of product. Other businesses, if you’re selling microfiber towels, probably not as good, maybe, but probably not.

Steve: I was just thinking about how I would do a wedding quiz, but I don’t think it would work.

Toni: Actually going back to the customer loyalty, I like that sneaker example where you joined the VIP, you actually paid to join. And it was kind of tricky because it was like 1999 to join, but you got the $20 gift card. So right there there’s a little psychological game for you.

Steve: As you can tell, Toni is a prime customer for this.

Toni: I am.

Steve: She has a ton of shoes.

Toni: I do. I would totally pay to join a shoe club. But I actually think that’s an interesting one because they aren’t giving you a discount. And they’re actually forcing you get your credit card before you’ve even really shopped with them, which I think is really — like I’d be interested to see, they didn’t give us stats on that one and I would really want to know how well. I don’t know, have you worked with any company that does that?

Austin: So I work with a company that does something similar to that. And they have kind of their own Prime membership on the back end. After somebody makes a purchase, you can immediately upsell into paying $20, and you will get back your initial shipping cost. So, it makes the offer really, really sweet where I think if you purchase two times, you’re going to come out ahead with this deal. And you recoup your shipping costs, which I think is around eight or $9 right away with this yearly membership. So that’s been successful for them. And it’s been successful not selling it in the front — it’s [inaudible 00:36:24] selling on the front end like getting people to get a gift card before they buy. But that’s another way to do it be maybe right at the back end. And that’s been successful for them.

Steve: Yeah, I’d be curious to see more stats. Maybe I’ll have to have that company on the podcast.

Austin: Yeah, see what’s actually going down.

Steve: Exactly.

Austin: To the Steve Chou case study.

Steve: So I can do a hanky of the Month Club.

Austin: Yeah.

Steve: Make them commit to five hankies.

Austin: That’s actually not a bad idea, or just one.

Steve: Cool, well thanks a lot for coming on both of you and we’ll probably end up doing a wrap up tomorrow. This conference is two days and this is just day one.

Austin: Steve, this has been a lot of fun. Thanks for putting this on. And it’s been funny, I don’t know if you guys — so you can never know where we’re at. We’re in a conference room here. And it’s funny because as we’ve been recording, five people have been coming in and out, so it’s been a lot of fun recording.

Steve: And I just want to add that Austin is sporting a beard which I haven’t seen on him yet. So that’s why he’s been mentioning beard brand. I suppose you’ve been on that site.

Austin: Well, that’s the beauty of having a podcast. Nobody actually knows what you look like.

Steve: Although there were a couple people that did approach you

Austin: Yes.

Steve: Fan blowing over Austin. Oh my god. It’s Austin.

Austin: I think this Klaviyo conference is where a lot of my people are. People love Klaviyo brands, on Klaviyo, so it’s actually fun.

Steve: So tomorrow we will — Austin is speaking tomorrow. So I’ll give like the skinny on his talk tomorrow and I’ll be sitting on the front row heckling as well. And thank you Toni for being the co host as usual.

Toni: Thanks for having me again.

Steve: Of course.

Hope you enjoyed that episode. I actually ended up learning a ton from the event and I got a chance to meet up with the CEOs of many of the popular email marketing tools out there. Stay tuned for my next recap of day two of the event where I interview some of Klaviyo’s engineers regarding email deliverability. For more information about this episode, go to mywifequitherjob.com/episode227.

And once again, I want to thank Privy.com for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop-ups for any primer that is closely tied to your e-commerce store. If you want to give it a try, it is free. So, head on over to Privy.com/Steve, once again, that’s P-R-I-V-Y.com/Steve.

I also want to thank Klaviyo which is my email marketing platform of choice for e-commerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post-purchase flow, a win-back campaign, basically all these sequences that will make you money on autopilot. 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 talk about how I use these tools on my blog, and if you’re interested in starting your own e-commerce 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’re 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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226: How To Design A Product From Scratch And Fully Fund A Kickstarter In 18 Hours With Shirley Tan

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226:  How To Design A Product From Scratch And Fully Fund A Kickstarter In 18 Hours With Shirley Tan

Today I’m thrilled to have a very special guest on the show, Shirley Tan.

Shirley is someone who I met at the Traffic and Conversions Summit. I actually don’t remember exactly how we met but we hit it off immediately because a long time ago, she founded American Bridal which was a company I competed against when I first got started in ecommerce.

Anyway, Shirley sold American Bridal long ago but she’s back with a completely brand new product called The Posture Keeper. Recently, she launched a kickstarter campaign that was completely funded in 18 hours. So today, we’re going to learn her process for manufacturing and how to fund raise like a pro.

What You’ll Learn

  • How Shirley came up with the idea for the Posture Keeper
  • How she manufactured it so quickly
  • Why she decided to patent the product
  • Her initial investment
  • How to generate buzz for a kickstarter and get funded in 18 hours

Other Resources And Books

Sponsors

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.
Klaviyo

Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
Privy

Pickfu.com – Pickfu is a service that I use to get instant feedback on my Amazon listings. By running a quick poll on your images, titles and bullet points, you can quickly optimize your Amazon listings for maximum conversions. Click here and get 50% OFF towards your first poll.

SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
Sellers Summit

Transcript

Steve: Welcome to the My Wife Quit Her Job Podcast. Today, I’m thrilled to have a very special guest on the show, Shirley Tan. Now, Shirley is someone who I met at Traffic and Conversions. And I actually don’t remember exactly how we met, but we hit it off immediately because a long time ago, she founded American bridal, which was a company on my radar screen back in the day because I’m in the wedding industry.

Anyway, she since sold that company, taken some time off. And now she’s back in full force with a brand new product called the Posture Keeper. And recently, she launched a Kickstarter for this product and had it completely funded in just 18 hours. And today, we’re going to kind of learn her process for manufacturing her product from scratch, by the way, and launching such a successful campaign. And with that, welcome to show Shirley, how you doing today?

Shirley: Hi Steve. I’m so excited to be on your podcast.

Steve: So how did we meet actually? It was at T&C for sure.

Shirley: I believe it was. I think it was at Traffic and Conversion probably three to four years ago.

Steve: I think we just started talking, right?

Shirley: I think, well, what it is, is I recognized you from your podcast, and being a follower of yours online. So I was like, hey, there is Steve standing right there. I just got to muster up the courage to go say hi.

Steve: Yes. Unfortunately, I’m not very intimidating.

Shirley: Yeah, yeah, I approached you. So I introduced myself.

Steve: So Shirley, give us the quick background story. I’m actually curious why you sold American Bridal years ago. And then what happened when you took your time off, and why did you come back and decide to release this brand new product?

Shirley: So let’s see. So, I created American Bridal back in the 1990s, I’m showing my age here. And from a mail order catalog, we went online when the internet got in that if you so to speak, right, so 1997, right around there. And so that’s when I — I was already in the wedding business for a while. And we sold products to our showroom in our wholesale/ retail business. And when the opportunity in 2009 to sell the business, we had grown it to nearly year over year, about 7 million with actual revenue of six and a half. We decided to — I decided too that I wanted to take it bigger; I want the American Bridal to be become bigger. And I felt that theknot.com who is the premier wedding company, even to this day is the vehicle to get there. They can help me grow it.

Steve: Okay.

Shirley: So, that didn’t happen exactly that way. As they say, when you have plans, God has ideas, other ideas, right. And so they bought it from me, I worked there for a whole year. And after I left and two, three years later, they decided to have a different strategy. So, not only did they not continue American Bridal but they revamped their whole e-commerce to move it all strictly drop ship. So, they went from being a fulfillment house in Redding, California, with over 150 people to just a skeleton crew of people who just add products into their platform and then just do everything drop ship. So, I don’t have like direct information since I’ve left, this is just my me guessing.

Steve: Sure. So you sold because you thought that your business was kind of plateauing at that time, or?

Shirley: Well, so we have actually grown to six and a half million and the prior year to that was probably 6 million, and the prior year to that was four and a half million, something like that. So, I didn’t necessarily think it was plateauing, but I knew that to compete, I didn’t have the financial capital to get it to the next level.

Steve: I see, because it was an inventory based business.

Shirley: Inventory based business is they had a big warehouse out in Redding, California. Their operational cost was much more efficient and scalable, right. So for that reason, I thought that they would be a good partner to do that.

Steve: Okay. And then after you sold the business, you took some time off, and then what made you kind of get back into the game?

Shirley: It was a way to stay married. So let’s see. So it’s a double edged sword, right? When you have too much time on your hand, you can get yourself into trouble. And then when you have too busy, you can get your — you don’t have balance of life. So, after I took some time off, I renovated — I have a non compete, so I had to like be a good girl and don’t do anything that would make them mad at me. And then after that — so during that time, I did some renovation to our house. We’ve been wanting to do that for a really long time. So I used to work in a retail hardware store, I have experience in home reno, I love home renos. And so that’s what I did. And so why did I go back?

Steve: And tell us about the product along the way, like what it does, and how you came up the idea.

Shirley: So, I went to — so during this time when I was working for the Knot and working, I started thinking about consulting. So, I did some consulting for a while. And during this phase of my life, I was already having a lot of chronic pain challenges. And I work for myself now, a little bit more flexible schedule. So, a lot of my days would consist of going to the doctor, getting tests, then taking pain medication, going to physical therapy, you just like, you name it, I did it, right. And it was through all of this frustration that I created my own prototype. I never really set out to be an inventor, I’ve always been more like, hey, I’ll buy and sell products that are already proven right. So I never thought of myself as an inventor. I’m an accidental inventor, if you will.

And so through that challenge that I had years ago, I made my own mock up, a prototype that through a backpack basically, that I wrapped around my chair, and I used it in the way that I use Posture Keeper now, which is to hold me up so that I don’t slouch, so that I don’t lean forward, which is my biggest crime in my poor posture behavior, which is I sit at the edge of my seat, I lean forward and I’m leaning into the computer because well, I want to see the computer bigger, better or [inaudible 00:07:35]. I don’t even know that I’m doing it. I think that’s what it is, is most people that do this hunching over, they don’t realize they’re doing it until they’re hours into the behavior.

Steve: Yeah, so just for the benefit of the listeners, Shirley has developed what she calls the posture keeper, which allows you to sit up straight in your chair, so that you don’t have problems later on with your neck and your back.

Shirley: That’s a great description, I couldn’t have said it better myself.

Steve: Just trying to set the scene here. And what I really like about Shirley’s story is she’s not an inventor. She’s never created anything. And yet, she managed to manufacturer this product from complete scratch. And it’s got a bunch of pieces and it’s pretty unique. And so, I kind of wanted to get your story on that, and how you got started with just the manufacturing phase. Can you just walk me through it, because I know there’s a lot of people out there who want to manufacture their own stuff, but it’s kind of intimidating when you first get started.

Shirley: And it is, especially when you didn’t set out to go do it, right. So I’ve always bought, I’ve been to the Canton Fair several times, I’ve always seen how you could just say, oh, that’s an existing product, maybe I’ll make it bigger, make it smaller, change this material, this and that. So, I’ve always been able to do that when I’ve seen something and improve upon it, private labeling.

Steve: Yeah, exactly.

Shirley: And I’ve done that. I imported in that context, but I’ve never invented something from zero and go, how do I do that? And so, I actually had — the posture keeper I have today is like my third version of it if we were counting. And I actually initially came — the first idea of posture keeper came from straps. It was just going to be like very similar to the posture correctors of today that’s selling well in the marketplace. So I go some version of that tied to the chair, but it was too complicated, too many moving parts. It was too — when you just look at it, it was like a big gigantic mess. And so I threw that out the door after four months doing that.

Steve: So I’m sorry, you created your own?

Shirley: So I created — the first initial posture keeper was made mostly out of straps.

Steve: Did you make that yourself like you sewed it yourself or?

Shirley: Yeah, so that’s another story for that as well. I had to — I don’t know how to sew, I didn’t know how to sew and I can only basically stroll straight lines even today. And I had to cancel some pieces and I had to learn how to operate a sewing machine with this.

Steve: So your very first prototype is something that you put together. Did you have a pattern made or did you literally just sew some straps together and create your first…

Shirley: I literally sew some straps together and…

Female: I don’t know what you mean by…

Shirley: I’m sorry about that.

Steve: It’s okay, I’ll cut it up.

Shirley: Yeah, I’m sorry. I’m going to turn off the phone. So I literally, I put a bunch of straps together. I bought some wedding material, some buckles and parts and components and started making some things together.

Steve: How did that turn into something that you can actually manufacture, though?

Shirley: So after three versions of this, I was able to come up with the version that I have now, which is well, you have to put together basically. You have to try all these different pieces. So for example, the lumbar support is a product that currently exists in the marketplace. It’s a memory foam pillow shaping the lumbar, but what the issue was with what’s in the marketplace is most of the lumbar are too thick. They’re over five inches thick. And so my challenge with that is that it pushes you off the chair that you have in a typical office chair because it’s so thick. So, I felt that people would not be happy with that if I’m not able to reduce it.

So, there’s this image of me cutting the phone with an — I tried different ways. I manually cut it with a utility knife, so the final way to properly shave off the lumbar pillow was to use a kitchen knife.

Steve: Okay, so basically, from what it sounds like you manufactured all your first three pieces by hand. You kind of taught yourself how to sew and all that stuff. I’m just curious like how do you actually take that to a manufacturer? Have you found a manufacturer yet for this? I assume you have, right?

Shirley: Yeah, and that’s the first thing I did first. I wasn’t comfortable with launching the Kickstarter without having that piece nailed down. That was critical for me, because I needed to make sure that the factory can deliver on what I show.

Steve: Okay, how did you find your factory?

Shirley: The factory guy was actually introduced to me by Kevin Harrington, who was one of the original Shark Tank.

Steve: Oh nice, okay.

Shirley: Yeah, so I was very comfortable in meeting him. Kevin introduced me to him. I met him, I saw his process. We went to China and I saw how the factory was going to — how it’s run. It’s not a little small cottage industry that some uncle has put together, and it’s a real bonafide factory that they have standards.

Steve: Were you worried about them taking your idea and stealing it?

Shirley: Ordinarily, I would be but because I met this factory through the connection of Kevin Harrington and I just knew that at some point you have to trust. And I knew that they weren’t going to do that.

Steve: So did you take a pattern to them, or did you just hand them your prototype and say, hey, can you make this?

Shirley: Yeah, that’s basically what I did.

Steve: Okay. So the factory just had this ability to I guess undo your work and find what all the pieces were and did you have to pay for that upfront or?

Shirley: No. And that was the other thing too, when you work with a factory and they see your vision and they’re in it more than just [inaudible 00:14:17]. Normally you would have to, you would have to pay for a sample, you would have to pay for all the different versions and minimum and all that stuff. But because I came into this under, I basically borrowing from Kevin Harrington’s his credibility, his relationship. So, I came into this really fortunately that this gentleman Ken made it very easy for me to just work with him and work with his factory.

Steve: Okay, and then we talked a little bit about this prior to the interview, but you decided to patent your product. And I guess that had nothing to do with people copying you in Asia and more for just protecting the rights in the US, right? Or can you just walk me through like the pros and cons of patenting?

Shirley: So Kevin Harrington when I first showed him the idea, he encouraged me to pursue it. So, he showed me some other products, he goes your product is better than this other product, and you should file a provisional patent immediately before you show this product to anyone else because I’ve never seen anything like it. And I think you have something near if you do it right. So I said, okay. And so, once I did that, and once you’ve talked to Kevin Harrington, you can’t go back, right.

Steve: That’s true.

Shirley: Oh, well I flicked that on you, right. So, I don’t know, it’s just me, maybe it’s just me. But once I went down that path, I decided that okay; I’m going to trust that this is happening for a reason, right. And really because I also believe that it has helped me so much that you could help other people. So the process of the patent was after I filed the provisional patent, you have one year to do something about it. So, that initial filing the provisional patent basically locks in the idea that you’re pursuing this concept, okay, so that’s all that does. And I haven’t even officially come up with a name yet I believe. I think I just — I don’t think I had a name yet, I can’t remember exactly. But I filled the provisional patent under my name…

Steve: How much did that cost you by the way to file that provisional patent?

Shirley: I can’t remember but it was probably 1,500 or 2200.

Steve: So not that much.

Shirley: Not that much, enough that I would be willing to take a risk to do it. And then once I was nearing my provisional patent, I think that was April or something like that, then I decide — so I had much closer, right. I had all this year to come up with a final design, what I call the final design, come very close to it, right. And so, that’s when I filed the utility patent because now when you submit that, you actually have to have drawings, you have to describe how the components work, what part does what.

Steve: What happens after a year if you don’t do anything with the provisional patent, it just disappears?

Shirley: I’m not quite sure. I think you might have to start over again, or you can’t use that and if there was a gap, somebody might say that there was a lapse, and therefore that maybe they can come in, in the middle. I’m not exactly sure and I wasn’t going to try to find out.

Steve: Sure, of course it’s not that important. I was just kind of curious.

Shirley: I’ve been in it, right. So not just the provisional patent costs, but I’ve spent this whole year working on the prototype, so I wasn’t going to walk away from it.

Steve: So it’s funny. So this prototype, you essentially manufactured it yourself, and then you brought it to the factory. And so was there an initial investment on your part at all outside of like the patent I guess?

Shirley: Yeah. So I had to have 30 of them made. Once we finally agreed on all the measurements and the bill of material that it takes to get this product produced, I had to bring in my own 30 pieces to — actually how many have been made, 30, 30 plus five. So I have like 35 pieces that I initially brought in to try with friends and family and to get it out to the media.

Steve: Did you kick those 30 pieces yourself? Like, it’s weird that the factory was willing to just make 30 pieces for you. Or did you hand make 30 pieces?

Shirley: No, the factory made 30 pieces for me.

Steve: Okay, so how did you negotiate that?

Shirley: Again, it was the relationship…

Steve: With Kevin okay.

Shirley: With Kevin’s factory guy.

Steve: Got it. Okay. So he knew that you were serious. And so that’s why he was just willing to do that for you. Okay.

Shirley: And really he believed in the product. It was very interesting story because he let his wife try it. And his wife goes, I want this. I’ve never met his wife, but his wife is on my side. So, that helped a lot, I’m sure.

Steve: Why only 30 pieces then in your first run? That doesn’t seem like that many.

Shirley: Because the foam had to be manually done. They had to hand — like I said, the readymade foam for the memory foam, you cannot just buy it off the shelf. So they had to cut it to my specification. And therefore they had to do by hand. So like, just like my first two that I did, I did it by hand; they had to do that 35 pieces by hand.

Steve: Okay. And then in terms of the price of these first 30 pieces, I imagine it’s a lot more expensive?

Shirley: No, there are fair. It was the price that they would have charged me. It cost me more to bring it air freight. The air freight killed me, not killed me but…

Steve: Yeah, comparatively percentage wise yeah.

Shirley: Yeah, it was ridiculous. I was just like, oh my god.

Steve: So you didn’t basically have — like the factory you kind of already got from Kevin and it was kind of pre vetted and you only trusted them. So, all those issues went aside and then they believed in your product so they were willing to do a small production run.

Shirley: Yes.

Steve: Let me ask you this question. Like if you didn’t have Kevin, like did you try to do this on your own before you met Kevin?

Shirley: No.

Steve: No. Okay.

Shirley: No. But I would have done exactly the same process, right. I think my hurdle would just be a little bit more challenging unless I get lucky. Which is you find the right factory; they’re willing to do it for you. A lot of it is accommodation. I think I don’t think I’m that special, right, that I just happened to get lucky in this one. But I hear a lot of good stories about factory willing to accommodate the importer or the customer in the right circumstances.

Steve: How essential do you think it was that you actually went to the factory and met with the guy? Do you think you could have accomplished all this stuff remotely?

Shirley: Maybe, maybe. I mean, I met with this guy, I met his people. He picked me up at the hotel, with my factory guy. So, we had meals together, it’s a lot of relationship, right? They think I’m funny because I’m Chinese, I look Chinese, but I can’t speak the language. So they just think I’m kind of funny, kind of like what kind of a Chinese person are you?

Steve: Yeah, that happens to me all the time too.

Shirley: And to find that you don’t speak Chinese.

Steve: Actually, what happened to me was I tried to speak Chinese to them. And then they replied back in English.

Shirley: I feel you, brother, I know what you mean.

Steve: So what would you say were some of your main challenges just on the manufacturing point, before we kind of moved on to the Kickstarter?

Shirley: I think it’s still the communication. There’s a lot of details, I’m a stickler for detail. I still drive, even though Ken is — my friend Ken, the factory guy is now leading all of this. And he keeps telling me, don’t worry Shirley, I got it because I am that kind of personality. I worry about everything. And therefore, I need to make sure I double check, triple check everything. So that’s just, it’s just my own anx [ph].

Steve: And in terms of like the kitting, there’s a lot of pieces in your thing. Are they in charge of sourcing all the little pieces and assembling it all together?

Shirley: Yes.

Steve: And everything is just kind of available in China like all the parts and everything.

Shirley: Yes, but things takes time, right? So my advice to people who are listening and wanting to do something like this where you have, the factory don’t make everything, they have to source the components. So it’s about availability, it’s about timing; it is also about how resourceful they are. So, I mean everything is made in China anyway. But it’s still a challenge of procuring the number of units that you want to get it done. And a lot of how much the factory end up pricing a product depends on the pricing that they can get if they have to buy components from places that they don’t really make.

Steve: Right, okay.

Shirley: So keep that in mind as a factor. And just because they quote you this first price doesn’t mean that it will always be that way. As the volume goes up, they can go back to their component supplier to say, hey, our volume just went up; we are now buying 20,000 of these pieces. How much is it?

Steve: Right. So Shirley, you got these 30 pieces. Why did you decide to do a Kickstarter versus selling an Amazon?

Shirley: So, I really had for long, I struggled with that same question for a really long time, at least a couple of months and one, because with Amazon I’m familiar how to do it, right? I sold off stuff on Amazon, I know how to – there’s a lot of resources on that. I’m part of different groups and I have a lot of resources to help figure that out. With Kickstarter, I’ve never done it. I only have a handful of friends that have ever done Kickstarter. And so, I wasn’t even sure how to go about it.

But I think the reason that pushed me over in making that decision of doing a Kickstarter is one, I wanted to see if I could do it. That’s probably a big chunk of it. And then too, I really believe that for something that is not a ‘me too’ product that you need that push, you need that early adopter community that will come in and say, I’ve never seen this before. I really like the product; I want to support the creator and that community to give you that social proof. And also, it removes my risk, right? If this community of people who I don’t know is willing to come in and give me their pre order, they’re willing to give me their money, trust me to create it. That gives me that proof that my product has greater potential to be adopted by the masses.

Steve: I guess your product is a little unique in that aspect. Like, people probably aren’t searching for posture keepers on Amazon, right? Do people actually search for these types of products?

Shirley: Posture correctors, posture trainers it’s like actually a good category. There’s a lot of skews now coming up under that space.

Steve: I see. So conceivably, you could have listed this on Amazon because there is search volume for these keywords.

Shirley: Conceivably, I could have done it that way. I just thought that the Kickstarter community is so cool and that again, if I could get these early adopters to give me that social proof. And also, remember, I’m still in the pre order stage, right? So I don’t have to risk inventory right now if I didn’t meet my campaign goals. And so, whereas with Amazon, I would have to tell the factory guy says, yeah, you need to give me 3,000 units before for the rest of it. Now, hey, I’ve been nice to you all this time. Now, this is official, right? And he has to not give me a small team to make it but now he has to run it through his regular production. So that changes things.

Steve: Okay. So would you recommend that everyone do a Kickstarter then prior to just taking the risk up front with all the inventory on Amazon?

Shirley: I think it depends on your stomach for capacity to ride the wave, I guess. I mean, Kickstarter can be — the biggest challenge I had was — is building the email list. I have to admit, it’s a big struggle.

Steve: Okay. I mean the reason why I’m asking you this question is because I kind of know how Kickstarter works. And it’s not like you list something on Kickstarter and it magically generates money. You have to promote your own Kickstarter, right?

Shirley: That’s right. That’s right, just like you would have to promote your Amazon listing, right. It’s not any different from that.

Steve: I guess the differences though, is that Amazon has this huge built in marketplace. Kickstarter kind of does too, but you kind of need to jumpstart it before you get to leverage any of that traffic, right?

Shirley: That’s true, before the organic algorithm kicks in for your product to rank.

Steve: So you said that you didn’t really have a huge email list and it was a problem. So, did you have an email list prior to your Kickstarter?

Shirley: No, no. My email list consisted of friends and family and people who I’ve done business with in the past.

Steve: Okay, so how did you meet your goal in 18 hours? Like what was your process?

Shirley: I cultivated that email list like you wouldn’t believe. So I just like I just went after, you have to work with what you have, and that’s all I had at the end of the day. And we had actually some smaller number of email list that we’ve been doing for pre launch, our pre launch campaign.

Steve: How did you do your pre launch campaign, how did that work?

Shirley: With Facebook advertising.

Steve: Okay, it was that successful. And how much were you paying per lead? Like, do you remember?

Shirley: Yeah, it was pretty high. So, in the early stages, it was probably about 5, $7. And I think we got it down to about $3 or so. Still pretty high is what people tell me.

Steve: Per lead, right. And did you separate out those people when the Kickstarter came on board?

Shirley: They’re definitely not different bucket lists in our email.

Steve: Okay. And were they profitable, like the ads ultimately?

Shirley: I think some of those people; I mean they’re targeted ads, right? So those people did sign up. I couldn’t tell you at this very moment, because we’re still in the middle of all this. I couldn’t tell you how many of it came from that list, because some of these people bought under a different name. Sometimes you can’t tell from the email some people sign up.

Steve: So you developed a pre launch list via Facebook ads, do you know how big that list was approximately?

Shirley: Yeah, it was just slightly under – let’s see, probably was slightly under 350ish or so.

Steve: Okay, yeah so not that many.

Shirley: It’s very small from what people tell me.

Steve: So you took that list and then you pointed that at Kickstarter, what am I missing? What about the other like how did you generate so much money so quickly?

Shirley: So a lot of it came through from the friends and family lists and the people who I have done business with in the past. So on that email list, I had I believe probably 3,000 or so.

Steve: Oh, wow. Okay. And these are just colleagues that you’ve worked with?

Shirley: People — if you are on my Gmail and I emailed you, and you emailed me, you’re on my list.

Steve: Okay and these are just like personal contacts that you’ve had.

Shirley: Over the years. I mean like you, I know a lot of people through conferences and just being in the business for so long. And a lot of those people supported the campaign. I’m really humbled and grateful and just — and they came through. I didn’t even set out to complete the fully funded within the first 24, the first day, if you want to say. But during the afternoon, about five o’clock when I saw the number at seven, I was saying, hey, wait a minute; we could do this, right. So really, I just like just reached out to all those people, even after I already emailed them, like okay, come on, you guys. You guys, we can do this. So, really supportive group of people that really want to help me out.

Steve: Did you get any momentum from raising all that money so early, like did Kickstarter end up featuring your product?

Shirley: So I shortly learned, I was shooting for — it’s called stock pick, right, or campaigns we love or something like that. And I shortly learned that they don’t do campaigns we love if your product is somewhere what they might feel that it’s close to being a medical product. So, even though my product is not really medical, but they feel like it might be borderline and therefore if it’s borderline then they just kind of push you over to that category. So, I was bummed to hear about that, of course I didn’t know that before I got in. So, not that it would really change anything, but it definitely would have boosted my campaign, more visibility, right.

Steve: I guess what I’m trying to get at is did Kickstarter actually help you raise the money in any way?

Shirley: I think so. I think so, a lot of it is ranking, so you rank on different categories, like product design. And so that initial push that they give you, they give you the benefit of the doubt, if you want to call it that. And then they ended — until new projects come on, if you’re able to hold the momentum, then you don’t get pushed down, or even as new products are coming in and they’re popular too, there’s a lot of good products. So you have to be able to hold that momentum.

Steve: So now that you’ve met your goal, and I guess your Kickstarter has as of this recording of 22 days left, after that initial push what is your strategy to kind of make even more sales?

Shirley: So, one of the things that we’ve done is sign up with an agency to drive momentum, they have their own list of super backers that they have access to cross marketing campaigns. So cross promotional campaigns, so I’m counting on them to do what they’re really good at, right. So, I really come to respect that the agencies can really add a lot of their value to the campaign because they just done so much of it, right. And initially, I thought I could cobble it all together and work pieces because I’ve done, I alluded to doing construction earlier in our call. And so I I’m used to being the general contractor. I’m a really good project manager and organized in that way.

And so, I thought I could cobble it together by being the general contractor. But now I realize that when you don’t have a big list, you don’t have a community which other people do, right, they start off with a big community, and then they leverage that community to drive the traffic. When I don’t have those pieces, you’re going to have to use something else if you want to get closer to a higher number. And that’s what I’m hoping for.

Steve: Okay. And I know the agencies take quite a bit cut, and so if it doesn’t end up being that profitable, are you just doing it for the emails at this point?

Shirley: I’m doing it for the emails and also still my outlook on this is that can I get this product in more people’s hands, because if I could get in people’s hands and they use it, then post Kickstarter life that there’ll be other people going, yes, I missed the Kickstarter but I want one. And I don’t care. I don’t care if I don’t get it for the early bird price.

Steve: Okay. No, that makes sense. And then by the way, I’m going to post the link to Shirley’s Kickstarter underneath this podcast and it’s very well done. And I noticed that you actually got some doctors to endorse it. How did you get them to endorse it? And what was your outreach, like what was your outreach plan outside of your friends and family?

Shirley: So, I actually developed this product with help of a chiropractor and I’ve been showing him the product. I’m not a science person right, I don’t have a medical background, but it was through all my challenges that he just basically said you need to sit upright. And if you stopped leaning forward, your nerves won’t be pinching; you won’t have all these problems or less of it. So, that’s really what precipitated this product, this backpack invention years ago. And so when I was started making this product, so I said to him, why don’t people just use the backpack like I did, right? He goes well, because you’re going to incorporate a lumbar support system that the backpack don’t give you right and it has to be comfortable, it has to be you can get in and out of it easily.

So, if you just attach your backpack to your chair, some of it will fall off. I mean, it is not hooked up properly; some chairs are tall so not a lot of backpacks would work. Those were my challenges that I had to overcome when I was bringing my design because you can’t just wrap a backpack around the chair. If you’re a six foot tall person, you can’t do it because it wouldn’t sit on you properly and it wouldn’t be comfortable, you would just never use it. So because I happen to be small, the backpack prototype worked for me but I had to design it so that it works for all people of different shapes and sizes. And that was the biggest challenge is designing it that way. Where’s originally the backpack was behind the chair and came forward because that was the…

Steve: In terms of proving to people that it works though, how did you accomplish that?

Shirley: I think when people see it and they — so people go, yeah, I always get skeptical which is actually fine. I like that because when they actually use it, they go oh my god. So intellectually they understand, but when they sit in it they go, oh my god, this is amazing. It really will not let me lean forward. So people get it instantly especially after they’ve tried it on. So, I hope that the videos and the campaign images and through the imagery we were able to accomplish that, but people are smart, they can see it.

Steve: So what is the future? So once the Kickstarter is over what is your plan?

Shirley: So, we’re going to deliver, we’re already working with the factory to get all the materials together where we have to estimate how many pieces we’ll get made. And so we’re preparing all of that, we’ll deliver on all the Kickstarter pledges first, then after that we’re going to set up shop on – we’ll turn our Shopify store into a shopping cart, and then I’ll probably sell on Amazon.

Steve: Okay. And then in terms of Amazon, I guess, is most of your efforts — I guess what is your plan? Is it to focus more on Amazon, your own shop, or is that TBD?

Shirley: We’re going to do both; we’re going to do both. I think we — I mean you cannot be in e-commerce without being on Amazon these days. But at the same time, I think what we could do is maybe — so as an example, there’s other colors, right? There’s other colors, there’s other personalization that we can do to the product that we can offer on our Shopify store and on Amazon we could just offer let’s say, the black right, a black available everywhere. And that will be the one that we will sell most of.

But other people want — some people want other colors, they want other personalization. So, we have to think through those pieces of how we want to differentiate so we don’t compete with our Amazon business if you will, and still be able to build up this other our other ancillary related products.

Steve: Cool. Yeah, well Shirley, definitely going to post the link to the Kickstarter beneath this podcast on the show notes. And if any of you guys have posture problems, or anything, I encourage you to check it out. And Shirley, where can people find you online?

Shirley: They can find me on LinkedIn, I’m Shirley Tan. They can find me on Facebook, Twitter, I’m everywhere, Instagram, so I’m everywhere.

Steve: Cool.

Shirley: [inaudible 00:41:24].

Steve: Well Shirley, I appreciate you coming on the show and teaching us how you manufactured your product from scratch and launched a successful Kickstarter. I mean, from my gather from this interview, a lot of it is just hustle. And you created your own prototypes. You found the factory and then just through networking, you had contacts and then from there you decided to launch a Kickstarter and the Kickstarter is just very thorough, it’s actually very well done. It’s one of the best I guess Kickstarter campaigns that I’ve seen, just very thorough. It’s like this endless long form sales page.

Shirley: Yes. And I really, I spent weeks and weeks on this and going back and forth, how detailed, too much detail, back and forth. In the end, I didn’t want to — I wanted people to see all the benefits of having improved posture and correcting that behavior that you can correct the behavior with the right device.

Steve: Yeah, no, absolutely. I mean, if even if you guys aren’t interested in the product, you should go check it out just to see how thorough the Kickstarter page is. Anyway Shirley thanks a lot for coming on the show. Really appreciate your time.

Shirley: Thank you Steve. Thank you so much.

Steve: Take care.

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225: Dropshipping, Negotiation And Emotional Decisions With Andrew Youderian

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Fireside Chat With Andrew Youderian On Dropshipping, Negotiation And Emotional Decisions

Recently, Andrew Youderian and I took an epic 5 day camping trip in the wilderness of Montana. There was very little internet so we decided to record a few podcasts along the way.

This episode is part 3 of a 3 part series where we discuss the other side of entrepreneurship. Today’s topics include the state of dropshipping, the art of negotiation and how emotions affect our decision making.

What You’ll Learn

  • Andrew’s views on dropshipping as a long term business model
  • The art of negotiation and how to hedge your bets
  • How emotions often cloud our logical decision making process

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Transcript

Steve: You’re listening to the My wife quit her job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not in business. Now, just like last week, today is a completely different type of episode. My buddy Andrew Youderian of Ecommerce Fuel and I recently went on an epic five day camping trip, and we recorded a couple of episodes together in the wilderness where we chat about business and life. Today we talk about the state of drop shipping, negotiation, and how some of our decisions are emotional rather than logical.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. I like Klaviyo because they are the email marketing platform that I personally use for my e-commerce store, and I depend on them for over 30% of my revenues. Now Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here is why it is 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 out an email to everyone who purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they purchased, piece of cake, and there is full revenue tracking on every single email sent. Now Klaviyo is the most powerful email platform that I’ve ever used and you could 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.

I also want to give a shout out to Privy who is also a sponsor of the show. And Privy is the tool that I use to build my email list for both my blog and my online store. Now what does Privy do? Well, Privy is an email list growth platform and they manage all my email capture forms, and I use Privy hand-in-hand with my email marketing provider. Now there are a bunch of companies out there that will manage your email capture forms, but I like Privy because they specialize in e-commerce.

Right now I’m using Privy to display a cool wheel of fortune pop-up. Basically a user gives their email for a chance to win valuable prices in our store and customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%. So, bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve. Now onto 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. Andrew Youderian and I, it’s day three of our epic Montana Yellowstone Park road trip. Right now we’re sitting in front of a campfire, no internet access, nothing to do except hang out with each other. And today, what we did is we went hiking. We went to the Upper and Lower Falls, we saw some bison. But as usual, today we talked a lot about business, we talked about life, we talked about other things.

And so we’re just kind of kind of go down and maybe summarize some of the topics that we talked about because they’re probably going to be interesting to you business owners out there. And one thing that did come up is Andrew as you know he’s sold to businesses. He sold Trolling Motors and Right Channel Radios, and he also created a seat back organizer. I think the brand is what, Rough Riders is that correct?

Andrew: Rough Routes.

Steve: Rough Routes, that’s right. And so I thought it would be interesting for Andrew to share first of all why he sold Trolling Motors and Right Channel Radios and why he’s thinking about giving up the Rough Routes product.

Andrew: Yeah, I sold the two businesses for different reasons so the Trolling Motors business because it was the least profitable business of the three I was running at the time, and I wanted to focus my efforts elsewhere. I sold the CB Radio business because it was a drop ship, exclusive drop ship business. And as we’ve kind of talked on multiple times on this trip, it is getting harder and harder to resell other people’s products. Yeah and the seat back organizer was an interesting product…

Steve: Before you go into this organizer, drop shipping, like what was — I don’t think we covered this right? What are your views on drop shipping going forward as like a long term business model?

Andrew: I think it’s getting increasingly difficult. I think it will only get harder. Either you can do it in very specific niches where you can add a lot of value and where the niches lend themselves for maybe confusing purchases or needing a lot of customer support up front, but I think it’s only getting more difficult.

Steve: What was your average order size, do you remember?

Andrew: Yeah, it was about 120 bucks per horn.

Steve: So do you think drop shipping is still viable for big ticket items like trolling motors, for example, versus smaller items?

Andrew: It is but the problem is when you think about that is you’ve got no inventory costs and so your profit per order, anyone out there is potentially — you compete with more people when the profit per order is $100, right? So say you’re selling — the margins are small, 10%, and you sell $1,000 trolling motor, you don’t have to have — you have no inventory costs or capital requirements. So you get more competition because the whole profit order is going to be higher.

So it is potentially more viable, but you still have to overcome what I call the friction barrier. Like, even if you provide the web’s best site for big screen TVs in terms of education and product knowledge, you still have to have some reason they want to come buy from you versus Amazon once they find what they want. So you can do it. But I still think it’s tricky.

Steve: I mean, do you think that drop shipping is more viable for big ticket item as opposed to like a $50 or $100 item?

Andrew: Not necessarily. I think if standalone, yes, actually, I’ll say that. If you’re trying to individually sell smaller type items, I think that is much more difficult because you just don’t have the profit per order. I think if you’re going to do smaller orders or sell — if you’re going to drop ship items with smaller — has smaller price point, you need to be able to sell a lot of accessories with it because that’s where you make the money with drop shipping.

Steve: I see. And the accessories naturally have higher margins, right?

Andrew: Yeah of course.

Steve: Okay. All right so I understand. Okay. So in the Rough Routes, that was your first private label product, right? You actually went to China, you had it manufactured yourself, and you listed on Amazon, right?

Andrew: Yeah. Not private label, because I didn’t, I designed it from scratch. So it wasn’t something an existing product I put my brand on, I designed it kind of from the ground up. But I guess yeah, I private labeled. Yes. Not white label, so yeah private label.

Steve: I mean, it was your brand on it, right?

Andrew: Yeah.

Steve: Rough routes?

Andrew: Yeah, right.

Steve: Okay. No one else can sell that exact same thing under label.

Andrew: No.

Steve: Okay. And so you actually bought a barcode and you listed that on Amazon? Yes.

Steve: Okay got it. Okay. Yeah, I qualify those private label.

Andrew: Okay yeah, got it.

Steve: And so how did it go and why are you thinking about stopping that product?

Andrew: When I started doing it, I did it primarily because I wanted to build something from scratch for the experience to learn how it worked. I did something very much to scratch my own itch. We’ve been having this funny battle throughout the whole trip Steve, I will pull up my paper map, and you will pull out your digital map on your phone. And it usually takes you five minutes to realize you’re not going to get anywhere with it. And I usually find where we’re going in like 30 seconds.

Steve: I just want to add that Montana is the only place where paper maps are a viable business.

Andrew: So I — there weren’t any organizers on the market, the backseat organizers that really held large full atlases. Anyway, yeah, so I designed this product and it was — I learned a lot and it was fun. But I think I got — I didn’t think about the size of the market enough when I designed it. And I was okay with it. I knew there was a good chance I can design this that it was going to be not the next big business for me. But at this point, they’re selling kind of onesie-twosie on Amazon here and there, but they’re not going to be an enormous business going forward.

Steve: So let me ask you this. How do when to call it quits because in theory, you could put a little bit more marketing behind it, maybe some more content marketing behind it and triple the business or 10X and maybe even I don’t know.

Andrew: Yeah, but it would still be a really small business and it’s not something that I want to do compared, and it’s not something I think relative to the other things that I’m doing that is a strength or passion has that much potential.

Steve: So that being said then, why did you even do it in the first place if you didn’t think it had that much potential?

Andrew: Perhaps because I really wanted to get the experience of understanding how building a product from scratch works. And I wanted to get the experience of understanding how to work with suppliers well, how to design a product from the ground up and understand Amazon too.

Steve: Okay.

Andrew: Yeah, because I’ve gotten more from being a store owner first and foremost, to kind of transfer me a little bit more into a somebody who manages a community of store owners, but still really important to understand the things that they deal with and face.

Steve: And with that knowledge do you perhaps plan on starting another e-commerce product line going forward?

Andrew: No, not in the near future. I’m definitely doubling down on the community and the job board and trying to spend all my efforts on making those as valuable as possible.

Steve: Yeah, I know earlier today, when we were talking about how crappy selling physical products can be. And everywhere you go on the internet, you hear about all the good things and all the rah-rah, yeah start a business, start a business. So, I thought it’d be interesting today to share some stories from both of us, actually. And I remember Andrew; we were talking about returns, handling returns and chargeback.

Andrew: Oh yeah, yeah.

Andrew: And you told me this one horror story. I’ll let you tell it with Trolling Motors.

Andrew: Oh, yeah. I mean, this is getting really old because it’s something done a long time ago. But yeah, we were in the trolling motor business. You’d be selling these $2,200 GPS power trolling motors. And anytime you sell a big ticket item like that, you get people who are trying to scam you. And I think once or twice we definitely shipped at least three or $4,000 worth of trolling motors to people and ended up finding out they were scams which is brutal, right? Like that’s a tough — that’s a hard thing to swallow, yeah but it’s kind of part of the game.

Steve: We were just talking about drop shipping large big ticket items.

Andrew: Yeah.

Steve: So the thought of dealing with fraud is infinitely worse for a big ticket item drop shipped?

Andrew: Oh 100% yeah. You sell linen Steve.

Steve: The thing is with our linens, we’re not — our products aren’t the type of things that people will actually buy charge back and try to scam us with right? Again, I can do that with like handkerchiefs.

Andrew: Well, I’m going to go home and start doing that now.

Steve: But you might do with the trolling motor or a right channel radio or radio right?

Andrew: More likely Yeah.

Steve: Right. So how did you deal with that problem, like how did you prevent that from happening?

Andrew: A lot of it was we were on Shopify at the time, and they have some built in risk analysis which is nice. But on top of that we would look at the bill to ship to. Almost all of the fraudulent orders we had, had different bill to ship tos. We’d look at that, in any of those we came across we’d be much more careful about. We’d look at the email address. It’s funny a lot of those scammy, those fraudulent orders, you could tell that the email was fake on it.

Steve: How? What if it was like SteveSmith@gmail.com.

Andrew: I found that fraudsters weren’t that intelligent. They put like 12345@gmail.com.

Steve: Interesting.

Andrew: You just think, there is no way this is an email address. Not all the time but a lot of the times. So that we would look at, we’d look at the name. If it seemed like a strange name – again it sounds odd because there’s a lot of unusual names out there, but again some really weird ones that didn’t even make sense with some of the fraudulent orders. And then we’d also call the number, and a lot of times if it’s a legit order, you can get at least a voicemail or something like that. If you try it for a couple of days, you can get somebody on the phone. For most fraudulent orders, not always, there’s some really smart scammers out there. But a lot of the times you wouldn’t be able to get ahold of somebody and that was a big red flag.

Steve: Mm-hmm. Okay. So you would do this test — like what were your rules? You obviously can’t do this with everything right?

Andrew: You could do it with — our rules were kind of okay, pay special attention to the orders that came across that had different bill to ship to, look at those. If anything looked fishy on them, then call or email them. And if we couldn’t confirm by a call or email, then we wouldn’t ship the order. Oh there’s a deer Steve.

Steve: What’s that?

Andrew: There is a deer right behind you, the other way. All right, you’re not going to believe me just this quick.

Steve: What, are you lying?

Andrew: No I’m dead serious.

Steve: We are out in the wilderness and there are bears. Andrew has been trying to scare the crap out of me actually in regards to bears, oh there Steve a bear. What, what?

Andrew: It’s working really well actually; it’s probably the best part of the trip.

Steve: I’m not afraid of deer though. There’s a couple of interesting things that speaking of Andrew BSing me all the time. We did have a little bet today, that was kind of interesting.

Andrew: You’re going to bring this up really after the results?

Steve: Yeah.

Andrew: You’re a bigger man than I thought.

Steve: I think we are. So we actually ended up hiking to the top of a fire tower. And for those of you who don’t know what a fire tower is, well, why don’t you explain it?

Andrew: A fire tower is just a big tower on the top of a big hill where usually you have one or two people stationed for the summer, especially in the fire season where they have a great vantage point to look for fires. And you can hike to the top and it’s a great panoramic view from the top of this tower.

Steve: So we hike to the top, and I’m just looking around and I see this like patch that looks just like a golf course right. It’s got a green perfectly cut out. It looks like it’s got a sand trap, padding green. I’m like, Andrew, that looks like a golf course, what do you think? That’d be a great place to put a golf course. And then Andrew was like, I’ll give you three to one odds that that’s a golf course. And I think Andrew knew that it wasn’t a golf course.

Andrew: I think you knew it wasn’t a golf course.

Steve: Yeah, but I wanted to see how far he would go. So what I said was — you give me three to one odds, if you were so sure this was not a golf course, why weren’t you giving me like 101 odds, are you willing to give me 101 odds?

Andrew: And what I choose is if you’re so sure it is a golf course, you should give me one to one odds or three to one odds that it is a golf course.

Steve: So that bet never went anywhere because we couldn’t even prove that it was a golf — it was like way too far for us to walk. So we couldn’t prove it. So Andrew proposed a more realistic bet something within walking distance that we could actually prove. And he was like, hey Steve…

Andrew: No, no, no, no.

Steve: I’ll let you tell it.

Andrew: I’m sorry. I didn’t mean to interrupt. You were the one who insisted it was sand; you pointed out and said it was sand.

Steve: I pointed out?

Andrew: I think so.

Steve: Okay. Well, anyways, it’s like 70 degrees outside, I’m sweating. It’s hot. It’s really hot. And I was like, oh look, there’s a little white patch of sand right there. Andrew is like no, that’s snow man, that’s snow. But you got to understand, like this entire place on this fire tower, you look around, you can’t see any snow. And there’s this white patch there that looks like sand, like a sand track for a golf course for example. So Andrew, what he does — well, I’ll let you tell how you phrased it because he kind of tricked me into betting him.

Andrew: I did that okay. That first time I did not trick you into betting. Secondly, there was snow capped peaks all around us. So I’m not sure how you didn’t think it was snow.

Steve: There was no snow anywhere on those peaks.

Andrew: There was snow everywhere on those peaks.

Steve: It was hot lustrous vegetation.

Andrew: We will see if — is it okay if in the show notes we post a picture that I took from the lookout tower and listeners can decide to…

Steve: did you really take photos?

Andrew: Of course.

Steve: Oh man.

Andrew: The listeners can decide if there were snow cap speaks in the park.

Steve: All right fine, go on with your story.

Andrew: Oh, I just I mean when we started betting, I was just kind of bet you that it was snow, you thought it was sand. At first I went to five to one odds. But then I thought there’s no reason I should give you five to one odds on this because I know I’m right. But at the same time, I don’t want to give you the satisfaction of having a great leverage deal. So, I feigned a little bit of ignorance and doubt thinking like even though it’s 99.9% sure it was snow a mile away thinking like oh okay, Steve, I think maybe you are right. I’m not sure about this. Maybe you are. I still think it’s snow, but I’m not so sure. Let’s do one to one.

Steve: And that was just the right thing to say because I wasn’t 100% sure that it was not snow, and I wasn’t 100% sure that it was not a sand trap for an old golf course. So as soon as I heard some doubt in Andrew’s voice, I was like, okay, I’m probably right, because there’s no snow anywhere luscious green 70 degrees outside. So, I ended up taking the stupid bet, I paid 20 bucks.

Andrew: You still haven’t paid me.

Steve: I still haven’t paid him yet. Well. Okay. Here’s the thing. He’s like, you can either pay me 20 bucks or you let me pat you with a snowball as hard as I can. Of course I’m going to pay him 20 bucks; my dignity is now worth 20 bucks. Anyways, we walk over and yes, it is snow. I didn’t realize you documented it with a photo.

Andrew: But I think kind of the takeaway here is thinking about how we thought about this with a couple of things. One negotiation and also two, kind of the expected value when you bet for things, betting to a level that you feel confident with. I love betting with different odds and giving people different odds because a lot of times if you give that straight up bet, people won’t bet, but if you give people a three to one, five to one, ten to one odds on something they’re much more likely to bet. So I don’t know. Do you think of it like you like — I love to bet, you like to bet. Do you think about that a lot when you bet or even maybe even more so when you make financial decisions?

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I generally don’t like to bet unless I’m pretty sure I’m going to win.

Andrew: Like today.

Steve: Like today. Well, I wasn’t sure until you feigned your little, oh you know what, maybe it isn’t. That’s really clever. But that golf course bet or whatever that hole was at, I was trying to negotiate you down so I could have a fun time and not really take a huge loss just in case I was wrong. Whereas you were trying — if you gave me five to one odds, I probably would have taken in a heartbeat, but you improved your odds overall. And I was a sucker; I ended up just getting one to one odds.

Andrew: The outcome was still the same for me. I would have won either way but I reduced the amount of risk I had, right.

Steve: That’s correct. You mentioned earlier that you weren’t 100% Sure.

Andrew: Right. I was 99% sure.

Steve: Okay 99% Sure.

Andrew: Correct. But still it would have been really painful on that 1% to pay $100 to you perhaps because I’m cheap, two partially because I never want to pay $100. But yeah, I mean, a lot of it I think a lot of times too, is if you can think about ways that you can still get the same outcome, but reduce your risk, it’s a beneficial thing to do.

Steve: Yeah, clearly, I have more to learn in this department. So Andrew applied all of this over me for the rest of my life.

Andrew: Not nearly as much as the grasshopper and Lucas bet that we had the day before.

Steve: That’s true. Well, one other thing we also talked about was where to invest our money, because right now I’m in a lot of cash and I think you are too, right. Yeah. And we are looking to buy a house in Southern California, and Andrew was just starting to talk about investment and property. And the climate in California obviously, is a lot different than the place where you’re looking at right, and I think I casually mentioned that most houses it just makes more sense to rent than to buy right? And then you said, well, if I put 20% down, can I at least break even on a house? And I said maybe not. It’d be border line but probably not. And then you thought that was crazy right?

Andrew: Well, you — I’ll start a little bit with it all started with you potentially thinking about making a move to LA. If you do move to LA, I asked, would you sell your house in the Bay Area or would you keep it? You said, well, I’ll keep it. I said, okay well, the cash flow meaning that assuming you had a mortgage on it and maybe you put 20% down, would the rent from the house that you rented out be enough to cover your mortgage, your insurance, and your maintenance? And you said probably not. So it would be completely a appreciation play at that point.

Steve: Right, but you also have to keep in mind that my house has more than doubled since I bought it and it’s been nine years.

Andrew: Sure.

Steve: And it still goes up, like I think it went up 20% last year and this year it’s already up in the double digits again.

Andrew: Yeah, and that’s kind of crazy. I mean, that’s phenomenal for who owns in the Bay Area. But from my perspective, I thought it was interesting that you would buy an asset like that purely based on the appreciation play versus the cash flow play, because you’re really you’re betting at that point that appreciation continues. And there was also a part of it though too that was emotional for you and maybe you can touch on that because it wasn’t — you were very — you strike me and I know you really well, you’re a very logical person, you think through financial decisions fairly clearly.

But in this case, there was a big emotional component that even that didn’t — that kind of prevented, at least in my opinion, prevented you from looking at an investment from a pure return standpoint and banking all on the very risky proposition that this crazy bull market in housing continues to go. So what was like – what are the emotional reasons why you would have kept that house?

Steve: Yeah, there was a couple things. So one, my parents made most of their wealth from real estate and once you have a house — so our house is pretty much paid off. And so by keeping it and renting it, that cash flow is very consistent. And you made the argument like you could take that cash; put it somewhere else to make a lot more money. But I feel like just emotionally, I guess money from renting is rock. It’s pretty rock solid, especially in the Bay Area where there’s a very finite amount of land. And there’s high to — I guess the only risk would be if high tech like totally tanked which I think is unlikely to happen.

And the fact that more jobs are coming in, in fact, there’s just not enough room to build anything, I think the appreciation will continue. And if anything, even if the appreciation doesn’t continue at breakneck speeds, we’re not going to lose any money. The property value probably isn’t going to go down. And if you remember the downturn back in 2008, 2007, most of the property where I live remained pretty much flat. It didn’t really drop too much, at most maybe 10%.

Andrew: Yeah, I thought it was interesting that you were baking a lot of — and I’m not a real estate investor at all.

Steve: Neither am I clearly.

Andrew: Yeah, although real estate investors have wasted more cash.

Steve: Exactly.

Andrew: But I just thought it was interesting that even though it’s cheaper to rent, you still would hold on to it for the risk, like you said, like your parents made a lot of money in real estate versus the kind of the actual calculations of the deal, and the past expectations of appreciation. So, I hope it works very well. I just thought that was interesting.

Steve: I mean, I don’t always make logical decisions, you know right. Yeah, I mean, I’m quite illogical actually for a lot of things that you make fun of me on a regular basis.

Andrew: Well, let’s go through those. What are some of those things?

Steve: No, no, no, you’ve got to give something too, what’s something that you do that’s not quite logical that you do anyways?

Andrew: No, but I mean, there is a vehicle that we have been driving.

Steve: I was going to point that out.

Andrew: This vehicle we’ve been driving around and it is like the absolute worst financial decision I’ve ever made in my life.

Steve: How much did you pay for that vehicle?

Andrew: We’re not going to talk about that on this public podcast, but it was more than you should pay for a 30 year old vehicle.

Steve: Let’s just say it cost more than my BMW.

Andrew: Yeah, I guess yeah, it’s not been a logical decision, but it’s been a good investment in terms of like we’re doing this right now partially because we had the vehicle right?

Steve: That’s true and I’m not going to say anything more because I want to sleep in the vehicle tonight and not outside.

Andrew: But it’s — yeah so there are good non financial reasons to do things.

Steve: Do you have anything else to add?

Andrew: I think it’s good to take a break from business sometimes and get off. It’s been interesting watching our habits with like cell phones. We’ve checked in a little bit but being able to unplug is really nice, having really slow internet that prevents you from getting stuff done quickly or going through a lot of emails. I don’t know, do you feel like — what have been your thoughts on having really poor, really poor cell service?

Steve: I know for me, it’s always a blessing because I’m addicted to my phone. And so this is actually one of the reasons why my wife and I we like to go on cruises because we’re on a cruise ship there’s no internet. Well, I rephrase that, you can pay for internet, but it’s really expensive and my wife and I are too cheap to pay for it, or we’ll pay for the shortest plan and as soon as we log on, I type as fast as I can. It’s like a race against time to get everything else just because we’re too cheap. I like to think that this trip is the same way except there’s no cheapness in play. So most of the time we didn’t have internet access, right. Only when we saw Old Faithful, that area had very limited internet access. And it was really nice, because it kind of took my mind off work.

Andrew: Yeah, it’s good. It’s good to decompress sometimes and get off the digital grid.

Steve: One thing I do want to say is Andrew and I we’re kind of doing something interesting with these set of podcasts. And what we’re doing is we’re kind of alternating the parts on each other’s podcasts. So episodes one and three are on my podcast and episodes two and four are going to be at the Ecommerce Fuel podcasts which can be found at EcommerceFuel.com. And I think our trip is actually about to conclude. We got one more day left tomorrow, and we’re probably going to be filming another episode in the van right?

Andrew: Yeah either driving or stopping. I’m hoping to be able to time it perfectly so we don’t have time to get you home for a shower. So you have to sit on the flight sandwiched in between two people licking of camp fire and fish.

Steve: Well that’s good for me right, I need more leg room and enough movement.

Andrew: It would be good for me too because I want to hear the stories when you get back, probably business partners that you’ll need to be connected with in the future.

Steve: All right, well, stay tuned for episode number four on the Ecommerce Fuel Podcast.

Andrew: It was fun, thanks Steve.

Steve: Hope you enjoyed that episode. And in case you missed episode number one, it is over at mywifequitherjob.com/episode224. And episode number two is actually over at EcommerceFuel.com. For more information about this particular episode, go to mywifequitherjob.com/episode225.

And once again I want to thank Privy.com for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like them because they are so powerful, and you can basically trigger custom pop ups for any parameter that is closely tied to your e-commerce store. If you want to give it a try it is free, so head on over to Privy.com/Steve, once again that’s P-R-I-V-Y.com/Steve.

I also want to thank Klaviyo which is my email marketing platform of choice for e-commerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post-purchase flow, a win-back campaign, basically all these sequences that will make you money on autopilot. 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 talk about how I use these tools on my blog, and if you’re interested in starting your own e-commerce 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.

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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224: Fireside Chat With Andrew Youderian On Business, Happiness And Wealth – Part 1

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Fireside Chat With Andrew Youderian On Business, Happiness And Wealth - Part 1

Recently, Andrew Youderian and I took an epic 5 day camping trip in the wilderness of Montana. There was very little internet so we decided to record a few podcasts along the way.

This episode is part 1 of a 3 part series where we discuss the other side of entrepreneurship and our views on balancing happiness, wealth and the keys to success.

What You’ll Learn

  • Our views on the balance between business success, life and happiness
  • How we invest our money
  • What’s your magic “number”

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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.
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Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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Pickfu.com – Pickfu is a service that I use to get instant feedback on my Amazon listings. By running a quick poll on your images, titles and bullet points, you can quickly optimize your Amazon listings for maximum conversions. Click here and get 50% OFF towards your first poll.

SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
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Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and dig deep into what strategies they use to grow their businesses. Now today is a completely different type of episode. My buddy Andrew Youderian of Ecommerce Fuel and I went on this epic five day camping trip in Montana. There was no internet so we decided to record some podcast about business, happiness, and life. Now, I also gained some good jabs in this episode, so please enjoy the banter.

But before we begin, I want to give a quick shout out to Privy who is a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now, what does Privy do? Well, Privy is an email list growth platform and they manage all of my email capture forms. And in fact, I use Privy hand in hand with my email marketing provider.

Right now I’m using Privy to display a cool wheel of fortune pop-up. Basically a user gives their email for a chance to win valuable prizes in our store. And customers love the gamification aspect of this, and when I implemented this form email sign ups increased by 131%. So bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve, and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ For 15% off. Once again that’s P-R-I-V-Y.com/Steve.

I also want to give a shout out to Klaviyo who is also a sponsor of the show. Now, I’m always blessed to have Klaviyo as a sponsor because they are my email marketing platform that I personally use for my e-commerce store, and I depend on them for over 30% of my revenues. Now, if you want to achieve similar results as I have in email marketing, I encourage all of you to attend Klaviyo’s upcoming conference on September 13 through the 14th in Boston.

This event is the largest in-person gathering ever for the Klaviyo community. With two days and over 30 practical sessions, it is a no fluff, no BS e-commerce marketing conference. Get your ticket at Klaviyo.com/Boston. Once again that’s K-L-A-V-I-Y-O.com/Boston, now on to 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 My Wife Quit Her Job Podcast. I am here with Andrew Youderian on an epic camping trip in Bozeman, Montana with no internet access. I’m not used to be disconnected from the rest of the world for this long. Apparently you do it all the time Andrew, but I’m just not used to it. And in fact, I keep finding myself checking my phone for bars, but there are no bars. And then finally after checking for maybe 20 times I finally became resolved to the fact that I’m stuck with you today for the next three days.

Andrew: It’s one of the benefits of living in Montana is they’ve taken out a lot of the cell phone service. They’ve really [inaudible 00:02:51] to reduce stress, increase quality of life, it’s really helpful. That’s why Montanans are so generally happy.

Steve: What’s terrible about this is I can’t piss you off because if I do, you’re just going to leave me in the middle of nowhere and I’ll have no recourse.

Andrew: Oh, there’s a reason I didn’t give you a specific instrument.

Steve: Oh, speaking of which we’re in — we’re camping in my dream van, which my wife will not let me get.

Andrew: Just come on, you would love it.

Steve: It’s called the Volkswagen Westfalia. It’s pretty sweet. It’s a camper van. It’s got beds, it’s got a stove. It’s got a fridge.

Andrew: Let’s clarify, it has two beds. It’s important.

Steve: No, I thought we’re going to sleep in the same bed.

Andrew: No unfortunately not.

Steve: We’re not going to sleep in the same bed?

Andrew: No, I’m sorry.

Steve: Uh man. Okay.

Andrew: Yeah, you’ve been really loving hard for that. But yeah, answer is still no.

Steve: So we’re sitting here in the middle of nowhere without any internet access. And so the only thing we can do is like talking stuff, right. And so we’ve been talking about a bunch of different topics today. We went whitewater rafting today.

Andrew: Yeah, maybe like a quick little.

Steve: Yeah, why don’t you do a quick little recap?

Andrew: A quick recap, you came into town. I knew this is — you want to do this, I want to hang out with you. So you came into town. We’re on a three night trip starting in Bozeman going through Yellowstone Park, looping back up kind of through a big pass and Red Lodge in the back. So, three days on the road and have adventure, mostly adventure, but also a little bit of we talk of course like our business a lot. And yeah, so we just figured, we both always wanted to do a few episodes from the road to talk about kind of just we’ve been doing a lot on the adventure side, but also a lot on the business and just kind of lifestyle.

Steve: I’m actually kind of surprised you asked me on this trip, right? I didn’t know we were at that level.

Andrew: I asked like three other people and none of them could come.

Steve: Okay yeah.

Andrew: Yeah, you were number four though.

Steve: That makes more sense. So, one thing that I noticed when I got off at Bozeman — so I live in the Bay Area, probably one of the most expensive place in the US to live I would say.

Andrew: One of, apart from New York where I mean, one of the two most expensive places to live.

Steve: Exactly. Yeah. So a big city and then I walk into Bozeman, and here’s what’s funny. I was actually stuck on the tarmac of my plane for 20 minutes because the airport didn’t have enough gates.

Andrew: [inaudible 00:04:55] place. We got a lot of construction going on.

Steve: It’s got like six gates or something like that.

Andrew: About eight, we got eight come on.

Steve: Actually, I was happy to get a real jet this time instead of a prop plane. Anyways, one thing that we started talking about earlier was we started talking about success. I don’t know about you, Andrew but I compare myself to a lot of people. And every time I do so, it just makes me kind of depressed.

Andrew: Yeah, I think its human nature, right?

Steve: It is. And that’s why I like to hang out with you. It makes me feel better.

Andrew: You’ve been rehearsing on that.

Steve: I wrote that one down in my notes actually. So, one question that I posed to Andrew earlier today, which is kind of interesting was, would you rather make $100,000 and live where people make half as much like 50K, or would you rather make 500k which would be five times as much where everyone else makes a million bucks and I have my answer. Actually, what’s interesting about this question is that Andrew kind of lives in the first category, and I kind of live in the second category which is in Silicon Valley. I do pretty well with my businesses, but I am by no means I would say one of the wealthier people where I live for sure.

Andrew: Yeah. It’s tough because they did studies about this, I think. And I mean, overwhelmingly, I think people chose to have less absolute wealth but make more than their neighbors. I think if you look at what people on average report, that’s what they say.

Steve: But what’s your answer?

Andrew: What would be my answer?

Steve: Yeah.

Andrew: I would like to say from a purely a character driven approach, I would like to say I would like to have more absolute wealth, but I think I’d like to say I wouldn’t compare myself to other people and I try not to do that. But I think at the end of the day if I was brutally honest with myself, I would be less happy like for example, you live in Silicon Valley. I’ve intentionally chosen, and Amy and I, and our family chose not to live in some of those really expensive places partially for just because you don’t want to spend the money, but also partially because I think it’s really important. I think it’s great to hang out with smart, interesting people that you can do that in a lot of places other than places that are crazy expensive.

And yes, we’ve personally made that choice not to live in some of those places. And I wish I — I’m kind of rambling. I think what I’m getting at is I wish I could say I would just look at the raw income and say I want the 500k when everyone else is making a million, but I think it would be hard to not let that impact my happiness in a negative way.

Steve: See, I asked Andrew a simple question, which was just one word. I just want a one word answer and he went off for like five minutes.

Andrew: I really wanted to explain myself. I feel guilty for my answer as well really.

Steve: So I would actually rather make 500k where everyone else makes a million because I know that I can probably get out at any time and live like a king.

Andrew: Mm-mm.

Steve: So you’re imposing right now and I’ve been trying to get Andrew to move over to California.

Andrew: Mm-hmm.

Steve: But you’ve experienced sticker shock right?

Andrew: Sticker shock is part of it, but yeah a big part of it yeah.

Steve: But I mean the weather here in California is a lot better than Bozeman for I would say at least half the year, right?

Andrew: Yeah. Yeah.

Steve: Would you say so?

Andrew: Mm-hmm. I mean I think California has undisputedly the best year round weather in the country.

Steve: Yeah, I mean, the question is whether it’s worth the money or not, and you already you had the sticker shock. And for me, it’s easy to leave California because everywhere else is cheaper.

Andrew: True. But this is also predicated on the fact that you are going to actually leave California. I would say, and I hope maybe I’m wrong here, correct me if I’m wrong, but I would say my happiness on a day to day basis of not feeling like all my friends are driving Teslas and I’m driving a 2008 Subaru Outback, which I do. That I think on a day to day basis, it’s easier for me again, I try not to compare myself, it’s easier for me, there’s less of a temptation to compare myself to other people when most of my friends are not outrageously wealthy, working at Facebook and doing things I couldn’t afford to do.

Steve: Actually, this reminds me of a story. So Andrew actually visited me in my house in the Bay Area. And I don’t know if you’ve seen his Volkswagen Westfalia, but it’s — at the time I — it looks much better now. But at the time, it was not easy on the eyes.

Andrew: Oh, don’t go there [overlapping 00:09:10] man.

Steve: And then dents all over.

Andrew: How about the tent, the little tarp for you sleeping on the ground. I can get that out, man.

Steve: So Andrew rolls up into my neighborhood. I mean, it’s just a nice neighborhood but there’s all these nice cars. And he rolls up in this Westfalia with tiny tires.

Andrew: Your butler wouldn’t even get in — your butler would not even get into it.

Steve: And then my wife — like I want one of these Westfalias. Don’t get me wrong. But my wife comes out. She’s like; this is the car that you want?

Andrew: You make her sound like way less sweet than she actually is.

Steve: Do you mind if Andrew parks at not in front of our house but maybe like in the backyard or something? So I [inaudible 00:09:47].

Andrew: I’m sorry for reducing the property values in your neighborhood for the time I was there. I apologize.

Steve: Yes, it is weather tax. So, I was trying to — so I’ve been trying to get Andrew to move to California. But you’d be a lot happier in California, won’t you?

Andrew: No, in some instances, in terms of the weather, yeah I love warm sunny weather, absolutely love it yeah. But I also think there’s creative ways you can do things like for example there’s some — again our family has thought about a lot of time, we’re actually moving to Tucson this spring, excuse me this fall to spend the school year there and then to try to come back to Bozeman in the summertime, because we have a really great community we love in Montana but we also really hate the winters.

And I mean moving to California is one option but another option is going to somewhere else. And Tucson, I feel like Tucson is a place that is a little undiscovered with a lot of cool things that isn’t on the radar quite yet. And the cost of living is much, much more reasonable. And so you can kind of we can kind of be able to arbitrage the weather, get the weather we want at a lower cost and still have some cool extra benefits like meals and spend time in a couple of different places. So it’s not just — so there’s other just kind of a third option. You don’t have to just pick the one.

Steve: One thing I actually don’t like about living in the Bay Area is that for one, everyone makes a ton of money. But they also work really hard too. I mention this on my podcast all the time, in order to live where we live and get a decent house, pretty much both need to work in order to get a good house in a good school district. And so, when it comes to work, life balance in a lot of cases, a lot of times nanny raises the child, or people are just really happy about getting their three or four weeks of vacation. They’re making a ton of money and got this nice house, but they’re working all the time.

I have a friend who basically works all day at work, comes back at six, has dinner with the family, but then he logs in and works again at night, and then usually ends up working one day at the weekend. And so the question is, is that really the lifestyle that you want? Is it worth it even though you’re making a ton of money?

Andrew: I guess if a lot of people really started asking yourself like the why question three or four times, why are you working so hard? Well, trying to provide for my family. And why do you want to do that? Well, because I want them to do well but I am also working hard to spend time with them. Where if you potentially went to live somewhere else and cut your cost of living by 50%, 60, 70% you can work a ton less and spend way more time with your family or build better relationships which ultimately is like if you look at what makes people happy and from a research and scientific standpoint, it’s relationships, hands down, that make people happiest.

Another thing we were talking about today which was interesting on the road just kind of driving over the din of the second most quiet vehicle in the world as we were shouting at each other, I asked you would you sell your business, and if you would like what multiple would — because you’ve said, I’ve asked you before and you’re like, there is no way I’m going to sell for 3X which is like the average e-commerce store multiple. Well, what about 5X, what about 6X? And I was trying to find your…

Steve: I started hesitating at 6X.

ANDREW: You did, 6X is the point you hesitated. And anyway we got into it and tried to figure that price point out. But you started coming up with a bunch of non financial reasons you wouldn’t sell which I thought were interesting.

Steve: Oh yeah. Like if I sold my business, I’d probably get depressed because I’d have nothing to do. As it stands right now actually, I feel like I’m not working enough. So my schedule right now looks like this. I wake up in the morning; I start working probably around eight, and sometimes a little earlier. And I quit around between noon to 1:00, and after that I pretty much work out and exercise, pick up the kids. And I don’t actually get a whole lot of social interaction either because most of my friends are working. But yeah, to answer that question I just did what you did. I just went on this long winded thing.

Andrew: It feels great, it was awesome.

Steve: Not only I could sell it, I got nothing else to do and it makes me happy right now.

Andrew: It does surprise me, a little tangent here, like in Bozeman I feel like there’s a great group of entrepreneurs I can hang out with. Really, really great people that are running their own businesses and that we can take time off in the middle of the week and go floating if we want to, or have a regular breakfast or get together. A lot of my friends are entrepreneurs and you surprise me, a lot of your friends….

Steve: Well, I’m Asian, so they’re either engineers, doctors, or lawyers.

Andrew: I love your friends. Yeah, I love friends. You don’t have very many entrepreneurial friends, especially bootstrap entrepreneurs.

Steve: Yeah, actually, I have a lot of entrepreneurial friends. But they’re all the traditional VC backed companies.

Andrew: Right yeah. But essentially, you’re talking some of the other things I thought were interesting on the why you wouldn’t sell your business. You talked about the value of some of the ancillary benefits like a network. Like you mentioned, you can drop into most cities in the US, be able to reach out to people, connect with people, hit up your list, which is really cool. But not all businesses you can do that. But all businesses have some fringe things and for you like that’s a pretty cool thing to be able to do.

Steve: I just want to take a moment to thank Pickfu for being a sponsor of the show. If you currently sell on Amazon like I do, then you know how crucial the quality of your Amazon listing is to the success of your e-commerce business. So for example, I’ve run experiments on my Amazon listings, well simply replacing the main image with a different photo resulted in a 2X increase in conversions. But how do you choose the best and highest converting photos for your listings? How do you know that you’re using the most profitable images for your products? And how do you know that your bullet points are convincing. This is where Pickfu comes in.

Pickfu allows you to solicit real human feedback about your Amazon listings in 10 minutes or less. And you can target the exact demographic of your end customer. So for example, let’s say you sell napkins and you have two main product images that you want to test. You would simply go to Pickfu, list the images, target female Amazon Prime members over the age of 35 and hit go. Within 10 minutes you’ll get feedback of which image people are more likely to buy along with specific feedback on why they made their decision.

In fact, I’ve used Pickfu to almost double the conversion rate on several of my Amazon listings by testing my images, bullet points, and product titles. And what I like about Pickfu is that you get results quickly unlike traditional split testing, and you can use this to test book covers, landing pages, basically anything. Not only that, but it’s super cheap to run a poll and right now you can get 50% off your first poll by going to Pickfu.com/Steve, once again, that’s P-I-C-K-F-U.com/Steve. Now back to the show.

It is actually, I mentioned this before but I use my podcast as just a way to meet people. And if I were to sell that man, I’d be lonely I think.

Andrew: Super and very social outlet is the podcast.

Steve: My primary social outlet — I mean I hang out with my wife a lot, but it’s mainly my kids right now. And I like going to conferences and so I try to hit like six conferences a year. But yeah it’s – you know what 6X might not even be enough, I don’t know.

Andrew: Really.

Steve: Yeah because what would I do with the money. So we can kind of diverge into this other topic like what do you do with your money, right?

Andrew: When you sell a business?

Steve: Yeah, so let’s say I sold it for like 6 million, what am I going to do with 6 million?

Andrew: You’re going to either do one of two things, put in index funds and just super boring Vanguard index funds or you’re going to wait for a huge market crash forever which we’ve both been doing and which has not materialized and feel like an idiot.

Steve: That’s true. Yeah actually Andrew we need someone who’s less risk averse to talk to us. Andrew and I we’ve been both waiting for the crash for a long time.

Andrew: You’re right, everyone else just gotten filthy rich while we lost like a third of our money too.

Steve: Well, let’s say you just got 6 million, what would you do with it seriously right now?

Andrew: $6 million?

Steve: Yeah.

Andrew: I would just put it in the bank and index funds and just live off of it, and still probably do what I’m doing because I really enjoy it. But get to a point where…

Steve: But you can’t do what you’re doing. You just sold it.

Andrew: What’s that?

Steve: You just sold your business.

Andrew: Oh, yeah. Okay. Good point. It’s kind of obvious, isn’t it? I don’t know, I would probably do something; I’ll take a little – for the first time I’d take probably 18 months off and travel.

Steve: 18 months off.

Andrew: And travel significantly with my family and spend a lot of time with my kids teaching them and stuff. They’re kind of in that school age right now and I think it’d be a lot of fun. And then from there, I would probably start doing something that was business related, potentially nonprofit related that I enjoyed that my skills could be useful in and thought could have a really potentially positive impact on the world.

Steve: For me, I have a lot of problems seeing my bank account get reduced from month to month. I think that would really bug me.

Andrew: I feel like — but the thing is, I feel I can vary. I think most people myself especially included, can very easily if I was lucky to ever enough have a $6 million dollar excellent, I think I could very easily live off the interest of $6 million. And that goes back to the kind of where you live right?

Steve: That’s true.

Andrew: In the Bay Area that’s going to be tricky.

Steve: I’m pretty sure I spend a lot more a year than you do. We were just talking about this like summer camp for my kids right now in California. It’s $500 a week per kid.

Andrew: Yeah, we should segue into something else which is interesting is the way we kind of raise our children, all the differences. You have — I tease you a lot about Russian math, you have your children, you are — I love teaching my kids things. I love teaching them more about kind of the world and geography and kind of in organic manner. If I see something, I’ll try to explain it to them. Anytime I try not to talk down to them, anytime a hard word pops up, I’ll try to explain it to them. So, education is very important to me. But I think you’re much more intentional.

Steve: So the way you put it makes your way sound so much better. It sounded really good.

Andrew: What, if my kids aren’t going to have like stress disorders 160.

Steve: Okay, where I live it’s an arms race. If you’re not in Russian math, you’re behind because all the other kids are doing Russian math.

Andrew: Another reason not to live in the Bay Area.

Steve: So, this is how I grew up in case you guys don’t know. So, I grew up studying for the SAT starting in fourth grade so that I could take them in sixth grade to qualify for nerd camp.

Andrew: This is crazy.

Steve: But nerd camp was awesome, I grew a lot during nerd camp. So, just to give you an idea how it’s structured, I took this math class at nerd camp. Its three weeks long, but you finished three subjects in three weeks. So, I finished algebra one, algebra two and geometry in three weeks and I passed all of them.

Andrew: What grade were you in?

Steve: I was in seventh grade.

Andrew: Seventh grade. Okay. Do you — so two, you think about education, you went to Stanford, a phenomenal school. You were talking earlier, though, you were saying that a lot of times the education you don’t feel like in Stanford is as good which I probably disagree with, but having obviously being much less qualified to make that comment than you. But you think that sometimes it’s not as good based on the fact that some of the teachers are researching a lot more, and kind of made the comment that you believe that the primary or at least a lot of times, the biggest, one of if not the biggest benefits of an Ivy League school is the network.

Steve: Yep. Well, the network and the resources, I should say.

Andrew: Networking and resources, but you could do what you’re doing now, which obviously, like you’ve had a job that you could have gone to, you get less satisfaction out of what you do now, but you could do what you’re doing now without the Ivy League degree. And I guess I’m thinking what I’m driving at here is some of the externalities if you really push people. I’ve seen people who have gone to Ivy League schools. Now, there’s a lot of benefits there. But also, if you raise kids from the age of like eight to try to get them into an Ivy League school, there’s a ton of pressure that you can put on their system that I would argue maybe isn’t necessarily healthy relative to the benefits there again.

Steve: I don’t know if they need to go to an Ivy League school, but I wanted so that regular school is easy for them. And they feel really confident. I think confidence is really important for a kid. Like if they walk in the classroom and they already know all the stuff, then that’s going to kind of boost their ego a little bit. I think a lot of times it’s just all about confidence, right? Even starting a business, it’s about confidence.

Andrew: That’s true. I mean, there’s many elements but that’s one of them. It’s having the courage to do it.

Steve: Well, now that’s just getting started. But knowing that what you’re doing will eventually lead somewhere and not giving up too early.

Andrew: But nobody knows. I think most people that started a business, myself included, you never know. I mean, a lot of times people I’m guessing ask you like, hey Steve, I’m thinking about doing this, is it going to work? And you have no idea. You can spend a month researching something and you still, you can maybe get closer to having maybe a I think this is 70% likely to work versus 20%, but you still have no idea. And so you go through and really push through it for at a minimum six months but more likely a lot of times years.

Steve: Yeah, I mean, I think it just depends on the person’s personality, right? This is why VCs invest in the person and not necessarily the business, right? If you have the right personality — and we’re not talking about trying to start like a multimillion, like $100 million business here, we’re just talking about like a six or seven figure lifestyle business. And a lot of that a lot of times when you’re talking about that threshold, personality matters a lot more necessarily in the business idea.

Andrew: I’ll give you that. That’s true. As long as you don’t have a horrific business model, if you have one that’s quasi reasonable, the work ethic, hustle, and commitment of the person is more important. Yeah, I’ll give you that.

Steve: Yeah. And you have to have the courage that what you’re doing is kind of on the right track so that eventually it’ll start making money.

Andrew: Yeah, that’s true.

Steve: I don’t know. So I want my kids to be confident. Like, honestly, if my daughter right now was not in Russian math, I think – yeah because math just does not come naturally for her. Yeah, if she wasn’t taking that, she’d probably be really discouraged about math.

Andrew: Yeah. But it’s funny, you can get beginning back to the comparison thing you made the comment, you really want your kids to do really well. And even just assuming, I think your daughter is much smarter than this, but for the sake of argument, if she was in the middle of the pack, like just say, if anyone is middle of pack in Silicon Valley, you go anywhere else in the country, and you’re probably going to be top EDS, 90th percentile. It kind of goes back to some story I heard somewhere, I was mentioning this earlier, where this family moved, they worked their whole life, this couple worked their tails off to get to Park Avenue.

They bought the cheapest place on Park Avenue and they were both really discontent because they had the cheapest place on Park Avenue and felt like the other people didn’t respect them. It’s not that they hadn’t done well in their life, it’s that they had self selected into a small sample pool of people who were outrageously successful, and by comparison, they felt awful, right.

Steve: I actually have a good friend that bought a house in the neighborhood just like that. It was a step above what he could really afford comfortably. And now he feels like he’s just spending money just to keep up with the Joneses, so to speak, and he’s always complaining about that to me.

Andrew: Why doesn’t he stop?

Steve: There’s other pressures too like that house is close to his wife’s family and stuff. But he feels like he constantly has to work really hard now, just so that he can afford this mortgage on the house.

Andrew: Yeah, that’s brutal.

Steve: It is brutal. It’s a nice house though.

Andrew: So you got back to how living in California it sets you at a high baseline so you can afford to live anywhere else. But do you think you’ll actually ever live anywhere else, like do you think you’ll take advantage of that parachute that you kind of created as a reason for living in California?

Steve: I probably won’t because my wife requires temperatures between 65 and 76 all year round.

Andrew: Jen, we can just build you a wonderful little like wing of the house that is like a cigar like humidifier but much warmer that just is perfect for that.

Steve: Actually you got a pretty solution to that, a pretty good solution to that, right?

Andrew: For the temperature?

Steve: For the temperature or for the weather.

Andrew: What do you mean?

Steve: In that you’re like kind of like a nomad in a way, right?

Andrew: Yeah, I guess so, yeah.

Steve: It’s almost like you’re a bird. You go west for the winter.

Andrew: We call that snow birding here.

Steve: Yeah, exactly. But that might have to stop once your kids get older.

Andrew: No, I don’t think so. I mean, we’re going to — I don’t think so because I think there’s some great benefits from public school or formalized education. But I also think there’s a lot of benefits for instruction from a parent who really cares about your kids, and this is not say that you don’t care about your kids. But it’s just having one on one instruction with your kids is hard to beat, and seeing the world and experiencing the world in more of a traveling sense and more of just kind of a hands on approach. So, I’d love to — I mean, I think once you get to high school that’s harder, but through middle school I think you can easily do. So we’ll see. I’m probably eating my words, eating crow here in about two months.

Steve: We’ll see. We got totally different like educational philosophies just based on how we grew up, right?

Andrew: Yeah, we do. So since we’re going to do like three or four of these, maybe we should wrap this one up. But do we hit any more other either the big three topics that we talked about on the road today, maybe we should cover before we wrap up.

Steve: Man, I can’t think of any more. Let’s just cut this one here.

Andrew: Cool. So tomorrow…

Steve: If we’re still friends tomorrow, there’ll be another episode.

Andrew: It seems like you just slandered me. I’m hitchhiking home.

Steve: Oh, by the way, that was interesting. That was the first time that I’ve seen anyone hitchhike before.

Andrew: You have never hitchhiked before?

Steve: Never. In fact, I’m like why are you sticking up your thumb man here like the fonz.

Andrew: That’s how you hitchhike. So we did a little, a self guided whitewater rafting today. And it was just us in advance. We didn’t have a shuttle driver. So, I hitchhiked back to get the car. Yeah, that’s how you — you put out your thumb like this to hitchhike.

Steve: No, no.

Andrew: How would you have hitchhiked, like jumped up and down, and waved your hands?

Steve: Well, I tried to fly down this dude and you were like, don’t do that.

Andrew: Well you were going to try to go to the [inaudible 00:27:08] if you could ride with them. It just looks like, yes, serial killer.

Steve: No, I was smiley, like I looked pretty…

Andrew: But all serial killers are smiley man, even people in super creepy uncomfortable situations.

Steve: Actually you looked a little bit more creepy in your sunglasses on, you had a life vest on.

Andrew: So two reasons why I did not have my sunglasses on because it’s important when you’re hitchhiking to make eye contact with people. Yeah sunglasses – well…

Steve: You were wearing your shades, weren’t you?

Andrew: No I wasn’t, I potentially took them off. I had this — secondly the reason I had a life jacket on was so people knew I was a rafter and a boater so that they would — hopefully if other boaters or campers were coming by, they’d be like, oh hey, there’s one of our crew. We can help them out. So, they know I’m not hitchhiking to try to go. If they see the life jacket, it’s a signal that hey, he just needs a ride 10 miles, five miles up the road.

Steve: Interesting.

Andrew: It was very intentional.

Steve: It was.

Andrew: I was subliminally signaling to people on the road.

Steve: Were you smiling? I couldn’t tell on your face.

Andrew: Oh, a huge grin.

Steve: Huge grin okay.

Andrew: As huge as I could make it without being creepy.

Steve: I thought they’d probably just pick me up because I stand out here, not that many Asians here in Bozeman. Like look at the Chinese boy, let’s go pick him up.

Andrew: Oh my goodness, you make it sound like we’re like a bastion of white power off here. You said there were a bunch of people who were Asian there on your flight?

Steve: Actually there were. I thought I was on the wrong flight in fact; a quarter of my plane was just…

Andrew: [Overlapping 00:28:23].

Steve: They must all be going to Yellowstone. They were all going to Yellowstone.

Andrew: Awesome.

Steve: All right, let’s end it right here.

Andrew: Everyone we will be back tomorrow.

Steve: Perfect.

Andrew: Good day one.

Steve: Hope you enjoyed that episode. We actually recorded three episodes total, and we’re releasing them in an alternating fashion on our podcasts. So, what that means is that the next edition will actually be on the Ecommerce Fuel podcast, and then episode three will be right back here at My Wife Quit Her Job. For more information about this episode, go to mywifequitherjob.com/episode224.

And once again I want to thank Klaviyo for sponsoring this episode. Next month Klaviyo is holding a two day conference for 400 e-commerce marketers and store owners with an awesome lineup of speakers. They’ve got experts coming in from Shopify, BigCommerce, Google, Octane, Recharge, Smile.IO, Swell, and other top e-commerce agencies plus panels with successful Klaviyo customers and a keynote address by Ezra Firestone. So, you can find out more at Klaviyo.com/Boston. Once again that’s K-L-A-V-I-Y-O.com/Boston.

Now, I also want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop ups for any primer that is closely tied to your e-commerce store. If you want to give it a try, it is free. So head on over to Privy.com/Steve, once again that’s P-R-I-V-Y.com/Steve.

Now, I talk about how I use these tools on my blog, 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.

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If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

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223: How To Scale An Ecommerce Business to 8 Figures In Just 2 Years With Kevin Chen

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How To Scale An Ecommerce Business to 8 Figures In Just 2 Years With Kevin Chen

Today I’m thrilled to have Kevin Chen on the show. Kevin is someone who I randomly bumped into at Traffic and Conversions and I’m lucky to have met him.

He runs Freedom Laser Therapy which is a company that sells a laser hair growth system to treat hair loss. Not only is the product cool but what’s even more cool is how he has successfully scaled to a 8 figure business in just 2 years.

In this episode, we’re going to talk about his exact strategies. Enjoy!

What You’ll Learn

  • How Kevin manufactures his hair loss products
  • The challenges of selling on Amazon
  • Why Kevin decided to focus on selling on his own site
  • Kevin’s Facebook ads strategy
  • An in depth description of Kevin’s funnels

Other Resources And Books

Sponsors

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.
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Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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Pickfu.com – Pickfu is a service that I use to get instant feedback on my Amazon listings. By running a quick poll on your images, titles and bullet points, you can quickly optimize your Amazon listings for maximum conversions. Click here and get 50% OFF towards your first poll.

SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
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Transcript

Steve: Welcome to the My Wife Quit Her Job Podcast. Today, I’m thrilled to have Kevin Chen on the show. Now Kevin is actually someone who I randomly bumped into at Traffic and Conversions, and it actually turns out that he’s the cousin of Grant Yuan, who I actually had on the podcast last year. So, I guess entrepreneurship runs strong in that family. Anyway, Kevin runs Freedomlasertherapy.com, which is a company that sells a laser hair growth system to treat hair loss.

Now, not only is the product cool, but what’s even more cool is how they’ve successfully created an eight figure business. And today, what we’re going to do is we’re going to talk about the exact strategies they use to grow so quickly. And with that, welcome to show Kevin, how you doing today, man?

Kevin: I am doing awesome. Thanks for having me Steve. I’ve been a big fan of the podcast. So, it’s really exciting to be on here.

Steve: Yeah, that’s one of the things I really like about conferences, like you just run to these random people. And, we chatted for a little bit, and as soon as I heard your story, I knew I wanted to have you on.

Kevin: Yeah, and likewise, I saw you roaming around I was like, oh I got to go talk to Steve, I know that guy. So, I’m glad we got to connect, that was a great conversation.

Steve: So since a laser hair growth helmet is a little bit random, tell us how you got into this business.

Kevin: Sure. So basically, how we started was that back in 2003, my dad and his partner Craig had started a business in laser therapy, but that business was actually not for treating hair loss. It was treating nicotine addiction. So, it was a physical clinic in Los Angeles, where people would go into the clinic. There would be a beautiful girl there to treat you. And for 30 minutes, you get audio therapy, tranquilizing audio, and laser treatments that were intended to stimulate endorphin responses similar to that of when you inhale a cigarette.

So, there was a limitation with what you can do with a physical business, because you can only treat so many smokers in Los Angeles before you exhaust your demand. And so we sought out other options for us to expand the business. And one fortunate trip to Canada, my dad’s partner, Craig had actually found out about laser therapy for treating hair loss. And that was done in the clinical setting. So you went to a clinic, there would be a big machine, you put that over your head, and you get treated by low level laser therapy. And over the course of three to four months, you’ll start to see your hair grow back.

But the problem with that, of course, is when you have a clinical setting, you needed to go there weekly, most likely two to three times a week. And that was a — that’s a big hassle for someone to drive in there. In addition, the cost of going to a laser therapy clinic was so foreign to build up. So, we knew that there had to be a better way. And with that the iRestore Laser Hair Growth System was conceived. The brand was developed to serve that same market, but make these same solutions and technology available in their home whereas before it was only available in a clinical setting.

So, we recognized that there was an opportunity for us to take this online and ship this to every home so people can have this kind of new novel non invasive and side effect free solution. So, with the advent of platforms like Shopify and Facebook, we were able to take this opportunity and start sending out Laser Hair Growth helmets to people’s homes. So that’s how we got started. And it’s been about two years since we started iRestore brand.

Steve: So Kevin, how do you source these products? Are these like unique designs that you own like a patent for?

Kevin: Yeah, so with a product like this, you really have to go through a long and tedious process. So, with any medical device that has lasers in it, you need to go through the FDA. It’s considered a class of 3R device, which means you have to submit a FDA 510k application to get it cleared. That process is about anywhere from three months to 12 months. We actually had a submission previously that was rejected so we had to resubmit. So that was kind of a painful process, because it’s not easy. There’s a lot of paperwork, a lot of tests, a lot of all kinds of things that you don’t even want to think about you have to deal with.

Steve: Okay, so, I mean, there’s high barriers to entry for this particular product, because of the certifications.

Kevin: Exactly.

Steve: Okay. And you managed to scale that to eight figures in just two years, which is really impressive. And so what I was curious about is what have been your primary sales channels? Like are you selling primarily on your store or on Amazon?

Kevin: So our store was started after our Amazon business. Initially, we had started on Amazon and then we used that cash flow to finance our off Amazon business, which is on Shopify. Our primary channel for growing has been Facebook. So, our approach has been to set up a multi channel approach with typical things like Google hopping, Google AdWords, YouTube, Display, all that kind of stuff. But on the scaling side, it’s been all Facebook really for us, because as you know and your audience knows, with a platform like Google, its intent based, so there’s only so much demand that we can capture from Google.

Steve: Sure.

Kevin: Whereas something like Facebook is contextual marketing. So you’re allowed to market to a billion people if you had the budget for it. So that allows us to scale our business from there.

Steve: Is your business 50/50, Amazon, your own store? And you started on Amazon; I was just curious why you didn’t decide to just press the Amazon channel? Why did you decide to start your own store?

Kevin: Yeah, I mean, for many reasons. One is there’s only so much demand on Amazon, although that demand is growing year over year, and we’re thankful for that. There’s still a finite number of searches with buying content on Amazon, whereas on Shopify, if we drove demand off Facebook, we essentially have unlimited access to the roughly 80 million Americans that suffer from hair loss. And the second reason, of course, is to diversify, because if your business is all Amazon, that’s a very scary thing for you. As we all know, Amazon can drop the hammer any day and just suspend you for no reason.

And in fact, they have suspended us for about two weeks for basically no reason. And we have no recourse. You can you can frantically call them or sending messages, but seller support is one of the least helpful support out there. So, what can we do?

Steve: So your Shopify store makes more than your Amazon side, right?

Kevin: Correct.

Steve: Okay. Okay. So that’s really interesting. Let’s talk about your Facebook ads. I know you kind of hired a company to help, but I’d love to hear about how you’ve managed to kind of scale these ads. So first things first, like when you first approached this company, were you running any ads whatsoever at that point?

Kevin: MM-hmm, yeah, we’ve been running ads for since our first year. And initially, we had started off with another agency. But that didn’t work out so well, due to the relationship and I think just there was a mismatch there in terms of their strategy and our approach. So, we had gone to a different agency with the understanding that they were going to take on our account with a different approach. We have learned about them through another podcast. So thankfully, we were able to find a successful partnership there.

Steve: So can we talk about what were some of like the first steps when you started launching this campaign when it was successful? Like, let’s pretend you started out with nothing, like what did your creatives look like? What did your top of funnel look like?

Kevin: Mm-hmm. So I think the biggest thing on Facebook is that everyone has to understand that a great video creative is worth 1,000 images. If you can get a really good creative in there, whether it’s a minute or three minutes, and that really takes them through the process of understanding the problem, your product and your unique selling proposition and what it’ll do for them, as well as a good guarantee and offer, that really allows you to, in one video, take someone from a cold prospect to someone that may have by intent, or at least be very, very interested in continuing to stay in contact and hear from your brand again.

So, I think that’s been key for us, because we had a two minute commercial that we’ve been running since day one. And we still run it today successfully with a positive ROI, and that video has done really well for us. What we’ve done initially, since it’s so expensive to produce a video and so much time put into it, we’ve done the thing where we created many, many different variations of that same video. For example, you can create a shorter version that you can run on Instagram sub one minute, or you can have a longer version for Facebook, and then you can take advantage of the different ad formats available.

So for us in the beginning, it was all about leveraging the power of Facebook to the Facebook newsfeed to continue to show our ads to different audiences, a lot, a lot, of split test with different audiences and copy which is of course the first step to scaling anything, but essentially on Facebook, that’s super important. So for us, just testing nonstop and then finally adding more creative to the mix as we continue to build assets from our customers, or from testimonials, or even something more recent, where we had a clinical study done with a doctor who conducted a formal study with our product and that creative.

Steve: Can we talk about that first video? And was it professionally done? How long was the video? What was the content of the video, what did it look like?

Kevin: Sure, we produced the video ourselves, and it was a two minute video. Basically, we talked about the problem for the first 10, 15 seconds. Then we went into the product, talked about the certification with the FDA, and anything that helps us to build more trust with our audience. And after that, we went into the how to portion so how it works. We did a 2D animation and a 3D animation. We worked with one editor on this. So it was all done in-house. And from there, we went into the money back guarantee and the offer, and so that was about two minutes, and we walked them through the entire process.

Steve: Was there a lot of talking, or was it like caption based to express the value proposition?

Kevin: There was audio.

Steve: There was audio, okay.

Kevin: There was voiceover yeah. I think that makes a big difference. If you don’t have the budget for it, I think not having audio is fine, too. But to me, it’s really a different kind of feeling when you have someone talking.

Steve: I guess what I’m asking is did you rely on your voice to express the value proposition, or did you also have captions next to your images? I’m just trying to get an idea of how this video was created. Was it like a slideshow? Was it a high budget affair?

Kevin: It wasn’t a high budget affair, but it was certainly not a slideshow. We had — the audio was talking the whole time. We had text call outside in. So that helped to reinforce certain things. And I think the animation really helped to make it a really good video to explain how it works in a digital kind of way.

Steve: And what was your offer, your initial offer?

Kevin: Our initial offer — so in addition to a six month money back guarantee, that was a full money back guarantee, we offered a discount, which varied at different points anywhere from 100 to $200. Just to give you some context, our product generally sells for about $600, so that’s, you get the idea.

Steve: Yeah, that’s a pretty significant discount there. So was your — so this ad that you’re running, like which audiences did you initially choose, and how did you narrow down which audiences were working?

Kevin: So I think this varies with each product and market, but especially for us and hair loss, the distinction was pretty clear to me. It was going to be a gender distinction and an age distinction. So how you speak to an older woman is different than how you speak to a younger man when it comes to hair loss. So that’s the way we went about dividing and testing. We would test with older females, younger females, older males, younger males, and then within each of those groups, we would have multiple ad sets with different types of copy.

For example, some people would be in early stages of hair loss, so you want to speak to them, as sort of stop your hair loss before it gets worse, whereas for some other people, it may be more advanced. So it’s more about re-growing back your hair so you can look younger and get your hair back where it used to be. So I think that conversation is different when it comes to different audiences. And it’s important for us to split test the copy and create it too.

Steve: Was this with your first initial video that you did this, or? I just want you to just kind of rewind to like the when you only had the video and you were just starting out. You weren’t using different creatives then for the different age groups, right, when you only had that one creative.

Kevin: That’s right. Yeah, we just had that one creative. So it was more of a copy test.

Steve: Okay. And then how did you know like which audiences did you try first? And during this testing phase, how much money did you put behind it? And what were some of the metrics that you used to kind of determine whether something was working or not?

Kevin: To be honest, at first it was a segments that we talked about with male and female, young, old. And the metric that we were looking at initially, was always revenue purchase conversion value on Facebook. But since then, we’ve kind of changed the way that we look at things. But initially, it was all about ROI for us.

Steve: So you were just targeting like blanket males of a certain age group, like no interests or anything, it was just like…

Kevin: Oh, yeah, there would be interest and the main groups would be male, females and age, but we would — over that was interest like on the hair loss brands, or on hair care products. But the problem with that is on Facebook, you really aren’t able to select hair loss as an audience, because it’s such a vast audience. And there’s no specific targeting for that.

Steve: Okay. I was just — the reason why I was asking that was like Facebook is actually really smart now about conversions. And so I was just wondering whether you could just target an age group in male and still do okay and just let Facebook do the work?

Kevin: Mm-hmm. Yeah, back then it was really more of that kind of segmentation with demographics and overlaying with interest. But now we’ve really refined our approach, of course, with a larger customer list and email list. We build look alikes, and we overlay that with all the different attributes that we have. And that’s been performing better for us. So, if we were starting out, because hair loss is such a big audience, we kind of went really broad on it, and then niched down from there.

Steve: So with these ads, so you had your offer and it’s still a really expensive product, and it’s not an impulse buy, right. So I would imagine your — was your top of funnel profitable, like right off the bat?

Kevin: Yeah, I mean in the beginning, we really didn’t have much of a funnel to be honest; it was just let’s show this video to our audience. Let’s see if they buy something. And that was it. It wasn’t that advanced in the beginning.

Steve: Okay, but it was no, that’s fine. No, that’s fine, because a lot of people who are just starting out are similar situation. I was just wondering if you saw conversions right away with that ad or whether you had to just really work for it on the backend?

Kevin: I see. Yeah, we did see conversions from the very beginning. I mean, the ROI wasn’t super high in the beginning. But we had an email campaign to go with it, and continued to nurture them. So originally, the strategy was just to show them the same creative over and over and over again, that was our only strategy at first.

Steve: And what was the landing page? Were you trying to collect emails or was that just going straight to it like a product page?

Kevin: We took them straight to our homepage.

Steve: Okay. And so how were you collecting emails, and was it just like pop ups and that sort of thing?

Kevin: Yeah, we were using Privy and I was popping on giving me on the offer.

Steve: Giving him the coupon code.

Kevin: Yeah, yeah exactly.

Steve: I see. Okay. And so when you were first starting out, your ROI wasn’t that great but then you were converting on the back end with your email sequence as well?

Kevin: Yeah, our email sequence was a key contributor to our success in the beginning, for sure.

Steve: Okay. And so once the agency started taking hold of this, like what are some of the things that they did like right off the bat to scale your ads?

Kevin: Yeah, lots of things. I think the biggest part in partnering with a new agency was that we started to view our advertising and funnel as broken down into top, mid, and lower funnel. So, we started to look at campaigns holistically rather than watching every single ad set like a hawk, which is what I used to do. And I think that was incorrect approach. With something like Facebook, you really have to look at your account as a whole, by first understanding that you’re going to lose money on the front end, or maybe break even on that in order to get the customer pixels or get them as a lead on your website, and all kinds of things.

So, we started shifting the way that we structure things into cold campaigns and warm campaigns. And in the cold campaigns, we would identify the video creatives that made the most sense to lure the customer to our brand and product. And there were a couple creatives and one of them was the commercial that we continue to run. The other one was a clinical study video, which I referenced earlier. We had a doctor talk about our study. And the third one was a more creative one, where the whole goal of this video was to get someone’s attention. And what it was it was a collection of user photos. So, if you imagine a bunch of people wearing the helmet, it’s running up in red, it’s moving around a lot in your newsfeed.

And we kind of took that approach of having a really attention grabbing short video as well, 15 seconds. And we just showed that a lot to people. It wasn’t necessarily converting, but the relevant score was extremely high on that because people would make fun of it, they would tag a friend, they would share. So, that was our portion on the other top funnel.

Steve: So for these videos on the top of funnel, were you just running engagement ads or were you running targeting for conversions for the core?

Kevin: We actually tested this out where we ran — yeah, we tested this out, we rent on video views, we rent conversions. So different campaigns, and actually made a big difference. And I can tell you from our tests; we spent a significant amount of money and at the end conversion still won by far.

Steve: I see, over the engagement. I’m just curious because I talk to a lot of people who run Facebook ads, and some people run like the video for engagement for us just to get a lot of social proof, and then they turn that same ad and target for conversions to their cold audiences. And I’m just kind of curious, everyone has a different approach. And so you, it sounds like you tested engagement ads versus conversions. And for your conversions, were you doing purchase conversions or add to cart conversions?

Kevin: We tested both, but the one that really performed was purchase conversions.

Steve: Okay. And this is on the top of funnel, right?

Kevin: Correct.

Steve: Okay. And I’m just kind of curious, what does your return look like on the top of funnel?

Kevin: Top of the funnel typically, we weren’t looking for a high ROI; we were looking at 100% or 150% ROAS, which is just getting your money back.

Steve: Like breakeven yeah, okay.

Kevin: Exactly.

Steve: Okay, so you’re running those to a whole bunch of audiences, what does your middle of the funnel look like?

Kevin: Yeah, the middle of funnel is where it gets very interesting because we — one of the key strategies for our success has been to leverage social proof. So, we have a ton of customer testimonials. We’ve worked with a lot of influencers on YouTube and Instagram and we own the rights to most of those assets. So, what we do is typically once they watch commercial and enter into the funnel, we’ll split the creatives that we have into the different age groups and gender that we talked about earlier. Then we would follow them around Facebook and the internet essentially with those influencer or testimonial content. So, obviously an older man will see an older man testimonial, younger woman, younger woman.

So that was our strategy. And in addition, we took the same top funnel creatives and we continued to show them at the middle funnel. And you’d be surprised; sometimes people need multiple touch points of the same thing to convert. So, as we mentioned earlier top funnel, we’re just really looking at breakeven, but middle to the bottom funnel is where we’re really looking to convert. So, with the middle funnel, we also have things like DPS, dynamic product ads, which is super, super profitable. I mean, if anyone’s not running DPS and they’re in e-commerce, they need to be doing it.

Steve: I consider DPS bottom of the funnel though. So, you’re classifying that as middle of the funnel here.

Kevin: Yeah you’re right, that’s more of a bottle funnel.

Steve: Okay so it sounds like the middle of the funnel, you got testimonials from influencers, and you’re just showing them video testimonials to everyone who clicked on one of your top of funnel ads?

Kevin: Mm-hmm, and that’s on the video side of things. So in addition to that, we actually run other campaigns in the middle of the funnel, and I’m happy to go into that, too.

Steve: Yeah, let’s talk about it. I think — yeah, go ahead.

Kevin: Yeah, so one of the offers that we run is a free plus shipping campaign. Our core product is the laser device, which is that six, $700, but we had a suite of products that compliment, so we have a supplement; we have a shampoo, a serum, and now a vitamin hair gummy. So we ran a free plus shipping campaign for our supplement. And that was intended to be a lead generation campaign. But also, of course, we can convert them into even a low dollar amount customer; it was worth it for us. In addition to that, we’d also run giveaways. So we use Gleam.io to run giveaways. Basically, every month we give away our products.

Steve: Is this for middle of the funnel, or is this top of funnel for these offers?

Kevin: This is both top and middle. So we tested out both.

Steve: Okay. And what had worked well for you for these offers, like the free plus shipping…

Kevin: Middle of the funnel.

Steve: Middle of the funnel, okay. So, you’re getting people who are kind of already familiar with your site to take part in these offers.

Kevin: Yeah, exactly. The cost per lead is way lower on that.

Steve: Okay. I’m just curious for your free plus shipping offer. Are you actually making a profit on that or are you just trying to break even on that?

Kevin: We’re just trying to break even on that.

Steve: Okay. Okay, so when you’re calculating ROI, for example, for your free plus shipping offer, you have to look at like your email funnel and your back end as well.

Kevin: Mm-hmm. Yeah, we’re using Klaviyo. And basically, our main metric for free plus shipping is just cost per lead. However, the interesting thing that we noticed was when we run our free plus shipping campaign for one traffic. A lot of times they would just end up buying the kit anyways, because I think it just reminded them of the brand. And maybe they had it in a car or forgot about it, or something.

Steve: I see, okay.

Kevin: So if you look at it that way, our free plus shipping campaigns actually, we have a pretty good return on ad spend although that was not the intended goal of that campaign.

Steve: I see. So you’re free plus shipping offers — they’re kind of like ours. Like, we’re doing that too. And they end up getting the free one and then they buy other stuff, which makes it like slightly profitable in the end. Is that what happens with yours also?

Kevin: Exactly.

Steve: Okay. Okay. And then the — I’m sorry, what was the other campaign that you’re running, the giveaways, and that is…

Kevin: Contest.

Steve: The contest, right. And that is to your existing audience that works well, as opposed to top of funnel?

Kevin: We’ve done both, we’ve done top of funnel to cold traffic, and we’ve done it to warm audiences. But the problem with that is, I think when we have a cold audience campaign, there’s going to be a lot of freebie hunters. So, especially with a product like ours that’s worth $700, you got a lot of people signing up that may not actually be interested. So in addition to that, we just had a better cost related, we ran into warm traffic in the middle of funnel.

Steve: Interesting, can we talk about how your giveaway is structured so that it eventually turns a profit.

Kevin: Yeah, so we have a landing page setup with a Gleam.io widget, then we will run an ad, whether it’s static image or a gift. And one advice here is if you have any movement, whether it’s a gift or video, it’s going to perform so, so much better and it’s worth the time to invest into. And once someone enters the Gleam.io campaign, we would then opt them in to an email sequence. And in that email sequence, which is a flow in Klaviyo, we will talk about of course, the contest first and welcome them, then we will introduce them to our USP, unique selling proposition, then we will go into the core offering the products. And then at the end of that contest, which is run every single month, we will give them an offer, so a 10 to 15% off offer so we can hopefully convert that lead into a customer.

Steve: And so when you’re running Facebook ads for this giveaway, your conversion is just for a lead, is that correct?

Kevin: Correct.

Steve: What I’m trying to get at is like, there’s all these complicated things going on here. And it seems like the ROI calculation; it gets a little bit more complicated as soon as you start mixing Facebook ads with email, or whatever you have in your back end, right?

Kevin: That’s right. Yeah, I mean, the truth is, at some point it’s kind of impossible to get an exact calculation on these things, that’s why you have to look at everything holistically.

Steve: So let me ask you this. So what goals were you — what did you have for like cost per lead for both the free plus shipping offer as well as your giveaway? Like, how do you come up with these metrics?

Kevin: So our goal for cost per lead is under 250, and we kind of just backed into it by doing some math about what we think what number of people will convert into an actual customer. But I think the other side of this too, is that with a product like ours, we felt like awareness was a big component of it. So we also looked at things like cost per click. So, if we’re able to get people to share this and talk about it, and comment on it, we felt that there was a lot of benefits to that too, in addition to getting the conversion, because we understand that not everyone will have hair loss but certainly everybody knows somebody that has hair loss so that that kind of played into it.

And being a data driven person, it kind of sucks to not be able to attribute everything correctly and exactly, but I think there’s intangible amount of value from people just seeing and sharing that contest with people.

Steve: Yeah, I think your product is actually really well suited for Facebook, because it has a very clear value proposition and a huge number of people have this problem. And people tend to talk about it, because so many people have this problem. And I’m guessing that’s one of the main reasons why ads are working so well for you as well, because everything’s just so clear, at least in my mind.

Kevin: Yeah, I think we got lucky, certainly when we started the business, we didn’t know all these things, check the boxes. It was, of course vanity sales, right? Everybody wants to look good, look younger, look sexy, attract the opposite sex. The other thing too, is it’s a high ticket item but it could be an impulse buy for somebody because there’s a natural sense of urgency built into the product, because you’re going to keep losing your hair over time. I mean, you’re going to have less hair tomorrow than you do today. So there’s kind of a natural sense of urgency built in and that works to our advantage, of course. And it’s just vanity; people are willing to pay a lot more for it. And it’s something that you can see. If your dad’s balding, you’ll see his head, you’ll recommend something like this to him. So, all these things were top end.

Steve: So are your dynamic product ads, are those the ones that are creating most of the conversions?

Kevin: I wouldn’t say that they’re creating most of the conversions because we do have a lot of video creatives running. But in terms of return on ad spend; those are the highest performers by far.

Steve: Sure, okay. And in terms of scaling, like when people scale their Facebook ads, sometimes they’ll increase the budget, and then all of a sudden the conversions go down. What was your formula for scaling these ads to as high as you have to run an eight figure business? Are there any tricks or any tips along those lines for scaling?

Kevin: Mm-hmm. Yeah, for us as you scale, I think the key thing is that you can’t continue to show the same thing to a small audience. So, in the beginning, when you’re starting out, you can have a smaller audience because your AdSense is not that great and you’re really trying to find your absolute best audience. But as you start to scale out, you need to go out to broader audiences. And that is going to require a lot of playing around with different interests and targeting. For us, what we did was, we would take look alikes and essentially expand out from 1% or 2% to 5%, and then we would combine different lookalikes into a larger pool of audiences. So, initially we, we might have had a few hundred thousand. And now we’re scaling out to audiences of a few million and letting Facebook do its optimization.

Steve: Are look alikes performing better for you than other audiences?

Kevin: Yeah, look alikes by far are the best performers.

Steve: Okay. And so when you were developing these look alikes in the beginning when you had nothing, can you kind of talk about the progression? Were you just looking for, like video views in the beginning and followed by add to carts, like how were you creating these lookalike audiences?

Kevin: In the beginning, we were using conversions, of course, but we didn’t have as much data. And then we were using video views. That was a big one. So anyone that viewed 50, 75%, we would group into one audience and build a look alike off of that. As we matured our business, then we started adding different data points into that equation. So things like a larger email list and reminiscing with — I mean, crossing that with our page likes or video views. So basically, we would mix a bunch of different lookalikes together to build even larger audience. And then we would continue to do that, as we found more success with individual groups.

Steve: I guess one thing that’s still not like clear in my mind is like you started out right off the bat with this two minute video and it immediately started returning like 100 or 150% return on ad spend. That sounds a little unusual to me. And I was just wondering if there’s just any iteration in the beginning, did you get these results like right off the bat, or because the video was just so good?

Kevin: I mean, I think the video is pretty good, yes of course, but the one thing that we did now that you mentioned I remember is we tested out a lot of different creatives in the sense that it was all the same thing. But in the beginning, first five seconds, we would test out a ton of different things. So, we tested out something like a red screen, it flashes a red screen. So, the video is automated so you want to get their attention. So we tried different tactics to get people’s attention. And then once we got their attention, we will have text slide in the initial three seconds. And we tested a lot of different texts in that initial screen.

So, we would have things like money back guarantee mentions versus questions versus different types of things. So, that was our initial strategy was run a bunch of video creatives with different intros. And then once we found something that worked, we would then split test all the copy for it.

Steve: And can you talk about like some of the click through rates that you were getting, what metrics were you kind of using to determine whether something was working or not? Or was it just straight conversions when you’re comparing the different ad variations?

Kevin: Yeah, back then I didn’t know anything about Facebook. So we were just looking at revenue and conversions, to be honest.

Steve: Okay. And then, I guess what was the fundamental shift when the agency took over that really allowed you to balloon your revenues?

Kevin: Yeah, the fundamental shift was nothing thinking about ROI, at least not short term ROI but considering our business as this ever growing thing that is going to continue to build a list and pixel audiences and generate momentum from there. So, we started looking at things like cost per click, cost per view, basically anything that meant that we earned an opportunity to talk to the same person again, whether that’s getting through our website, or on the email list or watching a video. So, I think that was the biggest shift for us was looking at cost per pixel, especially for those front end campaigns, and then perhaps not only hanging on conversions only for the lower funnel campaigns.

And we didn’t really have all these middle of funnel campaigns that we talked about earlier, with contests and free plus shipping. And so we signed along with the new agency. So that also contributed to a lot of the winners campaigns that we started to get through. And in addition to that, we started scaling up our influencer efforts. And that’s been really, really good for us, because as you know, influencers that have a very, very in tune on audience, they’ll buy anything that they say. In addition to that, we always made sure to negotiate in a way that we can reuse assets. So it’s a win-win for both parties.

Steve: How did you find your influencers? Did you use any service or did you just do straight outreach?

Kevin: Yeah, we actually had a PR agency that did the outreach for us. But what we found to work a lot of times was just to go to YouTube, and type in all these hair loss keywords, and then look at all the videos. Eventually, you’re going to get suggestions from YouTube on all the hair loss videos, and you just reach out to all of them. That’s what we did. And the one thing that I will suggest, at least it worked for us was that we would always reach out to people that actually have the problem of hair loss instead of just someone with a million followers, because we felt like there was more authenticity, if someone was speaking from a true problem that they had, rather than just an advertisement for our product.

Steve: Yeah, no, that totally makes sense. So, it sounds like the fundamental shift for Facebook ads is like not straight ROI. But that implies that a bunch of your ads now and your campaigns are actually losing money, right? And just collectively, they’re making money and collectively they do really well. But so is that true? I’m just reading in between the lines here.

Kevin: Yeah, that’s right.

Steve: Okay. And so you have to have faith then in those ads that are hemorrhaging money or losing money, that it’s driving your other ads at the bottom of the funnel, and making those convert better with a higher return on ad spend.

Kevin: Yeah, you hit on spot.

Steve: Okay, so how do you — okay, so my next question is how do then whether that middle of the funnel add that might be losing money is actually having a positive effect overall?

Kevin: Well, the thing about Facebook is that it’s really hard to know to be honest, because last click attribution is not everything. I think anyone that’s been at Facebook knows that they only track back last day, and they only track for 28 days. So we’re not able to only look at return ad spend and make a decision off of that. So, as an advertiser that’s not in there day to day, I really am looking at it from the campaign level, and then also on account level. So, what is it that we’re comfortable at losing money for this middle of the funnel campaign? And how much money are we making back on the bottom funnels, and then holistically as a whole count what kind of ROI are we getting?

So that’s been really the key for me is not really looking at the ad sets so much. I mean, of course, we have individual goals for different campaigns and ad sets, but at the end of the day, we are looking at return on ad spend. And we’re also looking at things like outside of Facebook, right? How is stuff performing outside of Facebook, we know that Amazon business has been growing because of the Facebook ads spend, there’s been a direct correlation there. So, it’s really hard for me to say this one metric, or this exact number is what’s contributed to our results, and this is what I look for, because it’s really not perfect in attribution.

Steve: Yeah, I’ve asked you for selfish reasons because these are some of the same issues that I face with my ads, right. There might be something that’s losing money and I have to debate with myself whether to continue doing it. I mean, it’s driving people to buy things and I know that I have their contact information, I have their messenger and I have their email, and they’re going to buy again later on. And it’s just hard for me to correlate and decide whether to continue with that ad, or scale it or not. And so that’s why I was just trying to glean some insights on like you how you’ve been able to I guess, take that leap of faith with your ads, that there’s a general positive correlation with everything else when you’re running these ads. Does that make sense?

Kevin: Yeah, yeah, it makes sense.

Steve: Okay. And I did want to talk a little bit about Amazon, since I know you’ve had a bunch of challenges. First of all, when you’re on Amazon, you’re selling an expensive product, right? You said it’s like 600 bucks.

Kevin: Right?

Steve: You can’t do giveaways because it’s just cost prohibitive, right. And so I was just curious how you managed to seed your listings early on when you first launched there.

Kevin: Yeah, it’s another one of those things where when we started out, it really was a very rudimentary basic strategy with our product, hopefully, they will buy it, maybe they won’t. So, in the beginning, there was really not any kind of strategy to drive any traffic towards Amazon if I’m being honest. But fortunately, we were in a category where there was a high barrier to entry, and there was not a lot of stuff being done by the competitors. So, once we started getting some PPC running sponsored ads, headline search, and product display, we were able to gain some traction. And once we gained some traction, we really made a big effort to make sure we reach out to customers to get reviews and make sure that there’s a lot of social proof on there.

And from there, we really saw the conversions start to go up, and our rankings go up. And pretty soon, we were number one for all the niche keywords. So to answer your question, we really didn’t have an advanced strategy. It was more just to sell things, do all the standard stuff that everyone else recommends.

Steve: Well, I mean, I think there’s a lesson to be learned in what you did, right, you chose something that was kind of a pain in the butt to get approved, get FDA approval and certifications, right. And just by nature of putting more work up front, that has made your product much more unique and have less competition overall. Whereas I see a whole bunch of other people right now, they’re just choosing like really simple to source products that have a whole bunch of competition. And it makes the launch — it makes the getting the product part easier but then the launch process so much harder. And so I don’t know if you had the foresight of doing this by just choosing something really difficult, but it seems to have worked really well for you.

Kevin: I wish I could say that. But the truth is we didn’t. We just got really lucky. But I absolutely 100% agree with you on that. I definitely, I think the days of private labeling and selling me too product is over. You really need to differentiate on Amazon. And if you’re not able to have a product that is yours, you’re really just trying to squeeze some money out of people for a few months. And that’s not going to be a sustainable listing because you’re not building a brand if you’re not differentiating and creating product that’s difficult for someone else to create.

Steve: Yeah, can I ask whether you’re using any Facebook Messenger marketing right now?

Kevin: We are, but we hadn’t got a lot of success with it to be honest. One of the things though we’ve done is just we’ve done an abandoned cart with messenger. That one’s performed pretty well. So if you guys don’t know out there, you can — there’s an app, I think it’s called ShopMessage that you can install on your store. And basically what it is, it’s a below the add to cart button, you would have an opt in box. And if someone checks that box and adds to cart but they don’t purchase, they’ll get retargeted with messenger ads. And you can follow up I think up to 48 hours after the abandoned cart. So that’s done really well for the little amount of time we put into it. I think that’s the best return on ad spend, I mean, return on investment that we’ve ever had.

Steve: The problem is you can’t have that box checked by default anymore. Facebook took that away. They grandfather people way before.

Kevin: Exactly. Yeah, so we unfortunately got grandfathered in, but what you can do is give them an offer and then they’ll opt in something like that.

Steve: Yeah, that’s how we’re doing it right now with our site. Just curious, with your dynamic product ads, are you doing anything special with those, like are you splitting them up to like 1, 3, 7 day, 14 day time periods and doing different offers for each?

Kevin: The dynamic product ads we’re not really splitting up into different offers, it’s really the same offer that we’re showing. We do split it up by time since last visit. One thing that we’ve done though that’s very interesting is that we’re able to — I actually saw this in the news feed about a month ago, and I wanted to test it out was we put gifts into the DPS.

Steve: Yes, I’ve heard about that. Yes aha.

Kevin: And that’s really performed well for us. I don’t have the exact numbers here. But you can imagine having something move around in a carousel or whatnot, really grabs their attention.

Steve: So you went ahead and switched out all the images in your product feed with gifts for your products?

Kevin: We didn’t switch it out; we just added it to the mix.

Steve: Okay, in one of the custom primers.

Kevin: In addition to that.

Steve: Oh okay. And so far, that’s been really positive for you?

Kevin: Yeah, it’s been great for us.

Steve: Interesting. Okay, what else do I have to ask you about DPA? So, you said you split out into different time periods, what are those time periods?

Kevin: Yeah, generally with our product, we’ve seen people convert as long as outside of 30 days. I was looking at Google Analytics earlier, I think about 10% of our converters are actually 30 days or more. And because of the way that Google Analytics tracks things, we know that the number is actually bigger in reality. So for us, because it’s a high value product that requires a lot of research, and there’s actually a decision process, we even go out to 60 days, 90 days. But with a lower ticket item, we wouldn’t be showing ads for that long. The DPS, obviously, the highest converting one is going to be the seven days, the 14 days, and 30 days.

Steve: So, does that imply that you’re bidding differently on those? Is that the only difference?

Kevin: On the audiences are for though from the visit?

Steve: That’s correct yeah.

Kevin: Yeah, that’s right.

Steve: Okay. I think I’ve covered most of what I wanted to cover here. I did want you to give like a little testimonial about not putting all your eggs in Amazon’s basket, because I heard you on the EcomCrew podcast with Mike, and you ran into some major issues with one of your listings on Amazon. If you wouldn’t mind just kind of retelling that tail for the audience here just to kind of convince them that they really need to kind of diversify and own their own site.

Kevin: Yeah, absolutely. So, as I mentioned earlier, we started off on Amazon and there were a few competitors on there but really they weren’t doing too much. And as we started to gain some traction and climbed out in the rankings, we noticed that — we started getting hit by a lot of one star reviews, and these were just typical one star reviews. They were reviews with photos, with illustrations, I think one of the reviews was like a huge essay with five paragraphs going into the details of why our product sucks, and that was going on for a few months. And it was crazy because we were just like, oh my god, at this rate, if we keep getting hit with one star every week, or every few days, we’re going to be at three stars or two and a half stars pretty soon.

So, we actually took some measures to reach out to Amazon. We did a few things, so we reached out to Amazon. So, what you can do is you can reach out to Jeff Bezos, Jeff@amazon.com to see if the executive team can do something for you. We also did seller support, we did our performance manager, we did everything that we could. In addition to that, because we read about how Amazon actually will take you more seriously if you get a lawyer, we lawyered up. And we had our lawyer to write a letter, also send it into Amazon. But after all this effort over the course of a few weeks, all they did was remove one review. And that was it, when all these reviews were clearly fake reviews from the competitor.

In fact, one of the reviews was left immediately after purchase before the product even got to the customer. And I pointed that out to Amazon and they didn’t do anything about it. So it was just ridiculous, man. So, the lesson there was that Amazon does not give a crap about you. And you need to kind of defend your own listing and make sure you take the right measures to diversify an off Amazon business in case something happens to your business on Amazon.

Steve: Did your efforts prevent any further one star reviews from happening or did you just have enough reviews to counteract it?

Kevin: Yeah, I mean, it was twofold. One was to continue to get good reviews. The other one was continue to follow up with seller support. I think the truth is, they may or may not have done something, but they just don’t let you know. They just tell you, we received a message and we’ll look into this. And of course, you never hear back. What I’m hoping might have happened was that they might have reached out to somebody that they suspected of doing this and warned them or something. But I don’t think so. So at the end of day, it’s really for us and our efforts just kind of got flushed down the toilet.

Steve: Ah, man, that sucks. Well, Kevin, hey, I didn’t realize we’ve been chatting for like over 50 minutes. And I want to be respectful of your time. Where can people find more about your product? I’m sure some of my listeners have hair loss problem. Where can they find you? Where can they find your product and that sort of thing?

Kevin: Yeah, you can learn more about our product at iRestorelaser.com. And over there, I would definitely recommend any of you guys to sign up for our email list and see what we’re doing there in Klaviyo. And also I can guarantee that we’ll follow you around the internet with our Facebook ads.

Steve: Yes.

Kevin: And you’ll get a chance to watch all the videos that we’ve been talking about, maybe opt into our contest or something. And who knows you might win something. And if any of you listeners out there do have a thinning hair problem, I’d love to give you guys an offer. So, if you guys go to our website and put the device in your cart, and put in the code Steve, S-T-E-V-E, we’ll give you $150 off our kit and that offer will last until the end of April.

Steve: Well that sounds great. Actually you should probably make it last longer than April because this episode is probably not even going to go out until like July or August.

Kevin: Okay let me do the last part again.

Steve: Okay.

Kevin: We’re so sorry.

Steve: No wherever.

Kevin: So we’ll learn more. Okay yeah, sure you guys can learn more about us, and our business at IRestorelaser.com, and from there I would encourage everybody to sign up for our email list. You can see what we’re doing on Klaviyo, we’ll be sure to bombard you with emails every single day. And in addition to that we’ll pixel you on Facebook so you get to see a lot of our Facebook ads that we talked about today and maybe opt in to our contest to win something.

In addition to that, I’d love to offer your audience Steve a offer to our device. If you go to our website iRestorelaser.com and put in the code Steve, S-T-E-V-E, We’ll give you $150 off our device or a kit, and you’re going to try our products as well and see our creatives. Our shampoo is really amazing. So I’ll just use it myself.

Steve: And I’ve seen Kevin in real life, and he has a nice rich head of hair on him.

Kevin: Yeah it’s all…

Steve: Even though you know it.

Kevin: Yeah, it’s all the device.

Steve: Yeah. All right Kevin. Thanks a lot for coming on the show man. Really appreciate it.

Kevin: Yeah, thanks so much Steve, take care.

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222: How To Sell 25,000 Online Courses Without An Audience With Joe Nicoletti

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222:  How To Sell 25,000 Online Courses Without Your Own Audience With Joe Nicoletti

Today I have my friend Joe Nicoletti with me on the show and Joe is probably one of the most successful online course creators that I know.

He’s sold over 25,000 courses which is a ridiculous amount and he’s got this great down to earth and step by step teaching style that everyone loves.

In this episode, you’ll learn how he started from nothing and built a 7 figure business with no audience of his own.

What You’ll Learn

  • Joe’s motivations for starting his first hit product
  • How that first product evolved into a full time business
  • How to get started with your first product
  • How to get people to sign up for your course if you don’t have a big list
  • A step by step launch strategy for your digital product

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Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and dig deep into what strategies they use to grow their businesses. Now today, I’ve got Joe Nicoletti on the show. And Joe is probably one of the most successful course creators that I know. And he sells his online courses without his own audience, crazy, right?

But before we begin, I want to give a quick shout out to Privy who is a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now, what does Privy do? Well, Privy is an email list growth platform and they manage all of my email capture forms. And I use Privy hand in hand with my email marketing provider. Now there are a bunch of companies out there that will manage your email capture forms, but I like Privy because they specialize in e-commerce.

Right now I’m using Privy to display a cool wheel of fortune pop-up. Basically a user gives their email for a chance to win valuable prizes in our store. And customers love the gamification aspect of this, and when I implemented this form email sign ups increased by 131%. So bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve, and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ For 15% off. Once again that’s P-R-I-V-Y.com/Steve.

I also want to give a quick shout out to Klaviyo who is also a sponsor of the show. Always blessed to have Klaviyo as a sponsor because they are the email marketing provider that I personally use for my e-commerce store, and I depend on them for over 30% of my revenues. Now, if you want to achieve similar results as I have in email marketing, I encourage all of you to attend Klaviyo’s upcoming conference on September 13 to the 14th in Boston Massachusetts.

This event is the largest in-person gathering ever for the Klaviyo community. With two days and over 30 practical and substitute sessions, it is a no fluff, no BS e-commerce marketing conference. So, get your ticket at K-L-A-V-I-Y-O.com/Boston. Once again that’s K-L-A-V-I-Y-O.com/Boston, now on to 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 have my buddy Joe Nicoletti with me on the show. And Joe is actually someone who I met at FinCon on multiple occasions. I think our wives actually went shopping together causing all sorts of monetary damage and they had a great time. And Joe, he’s actually one of the most successful online course creators that I know. I think he’s sold over 25,000 courses, which is a ridiculous amount. And he’s got this great down to earth and step by step teaching style that everyone loves. And he’s also got a great story to tell. And I’m just going to let Joe talk about it. Welcome to show Joe, how you doing today man?

Joe: Hey man, doing great. Thanks for inviting me on. I’m super excited to talk about the story and everything else that we’ll dive into.

Steve: Yeah, I’m so glad to have tracked you down. I mean, it’s been like six months since the first request till now. So I want to take advantage of these moments.

Joe: Let’s do it.

Steve: So Joe, you got a really cool background story that I really want you to share with my audience. What were some of your motivations for starting out with your first hit product? And how did that evolve into like a full time business?

Joe: Oh my gosh, yeah. So I was just your typical, I like to say, average Joe from St. Louis, Missouri. And that’s kind of what I always tell people like hey, if this average Joe from Missouri can do this thing, then anybody can. I know this is kind of cliché to say, but I’ve lived it, I really believe that now. I was just your typical Joe working in corporate job for my gosh, I was in the same job for like 10 years or so. I stayed at my jobs a long time because I just believed the whole, do a good job, do your work, you’ll get promoted, climb the ladder, and it just wasn’t happening for me. I was showing up early and staying late. I was doing everything I was supposed to do in these just small little 3% raises per year.

And I’ve always been ambitious. I always had the entrepreneurial bug, tried a lot of things, failed at a lot of things. And I was kind of at the point where I was giving up, to be honest. I was like I guess the entrepreneur thing is just a dream. It’s just a myth or some people get lucky. And so I was just doing the corporate thing. But life happened. And my wife got pregnant with our second child at this time, and we just like needed more space. We were living in a small condo. And I was like, all right, I guess I’m going to have to start making some extra money, right? So let’s get a second job I thought.

So like, what can I do on nights and weekends? I didn’t really want to work in the restaurant business but I was like, I can deliver pizzas or something. So, I was literally trying to get pizza delivery jobs. I remember I applied to a couple near where I worked. I thought I could shoot over there after work, I don’t know make a couple of hundred extra bucks a month doing that. And the funny thing was, and this was like, this was the start of my journey online. Funny enough, I kept getting rejected from these pizza places. Like here I was, I was a manager in my day job. But yet, because I didn’t have previous pizza delivery driver experience, I wasn’t getting hired. And I was like, this is ridiculous.

So, kind of bruised my ego a little bit like man, I’m just like, I’m not advancing in the corporate world like I thought, I can’t even get a stupid pizza job. Like, what am I going to do? I was like this is just not where I saw myself. I was young and I’m like, I’m going to be a millionaire by the time I’m 25. I remember thinking that as a teenager. And then you’re like, okay, life’s a lot harder than that. So, here I am with a growing family, we’re barely making ends meet, we forget about vacations or any kind of thing like that. We’re just trying to pay the bills, and I can’t even get a side job.

So at this point, I’m like, what else can I do? Like, honestly, I’m just thinking about this driving home in rush hour traffic one day, and I’m like, okay, let’s do what they all say. Like, take a look at your skills, what can you do? People always told me, I’m resourceful. And I just kind of hated that. I’m like, that’s stupid. What can I do with that? Like if I’m the guy who’s somebody says, how do I get to there and I’m doing directions, I’ll draw them like a color coded map and like overboard, right? Then I realized maybe I could teach something, I have no idea and basically, stumbled online through different sites that I would search literally.

I searched like how to make money online, right? I did that thing. And I just thought this stupid, I don’t want to sell weird things on eBay, or — and then I ran across people, actually teaching people, helping people and making a really good living. I ran across folks like Pat Flynn, and Michael Hyatt, and internet business mastery, and all these kind of things. And I just got addicted and just devoured everything I possibly could. So I thought I don’t know what I’m doing, but I’m going to start. That was like — that’s why I always tell people now like start before you’re ready, start even though you’re scared, start even though you have no idea what you’re doing, because that’s where like your ideas will come from. So I started a productivity blog way back in the day.

Steve: Was that efficient life skills?

Joe: Yeah, it was. And that’s where I just like experimented with random things, just completely random. Like my daughter learning how to tie your shoes was like one of the hardest things I found like teach a kid. We like totally take it for granted. And we found this cool, quick way and she literally picked it up in like five minutes. I was like, all right, let’s make a blog post about it. And I think to this day, it’s still gets just an insane amount of traffic, because obviously, a lot of other parents had this particular pain too. And that’s where it kind of took a direction. I was like, hmm, okay, people really like their problem solved. What else can I do?

And so I just had this kind of radar of posting things, blog posts, just like get in the game, but also looking for like, I don’t know, what problems can I solve? I was jealous of people that just knew from day one what they wanted to be or what they wanted to do, that wasn’t me. But I found this funny software called Scrivener. And for those of you who don’t know, it’s a writing software, kind of like Microsoft Word, but souped up on steroids where you can do all kinds of things with it. It’s kind of meant for like long form writing like novelists, things like that.

I was using it to organize all these random blog posts. I had like three different blogs by that time just trying everything. So I was using it to organize stuff. And I loved it. And I kept seeing people talk about it. And it’s kind of like that familiarity thing where like the second you buy a car, you see that brand everywhere now. So it was like articles on Scrivener were popping up. And this one article popped up from Michael Hyatt, who I was following and it said, why he’s using Scrivener for all of his writing. And I was like, oh cool. Well, let me see what he says about it. I’m using it too. And started reading through the comments.

And then people just kept talking in these comments. Like, I want to learn Scrivener too, but it’s too hard. I tried it and I gave up, the learning curves too much. If only there was a course on it. And then since I was this hyper aware of looking for pains, I was like, hmm, could I create a course on Scrivener, like people seem to be wanting that. Then of course the self doubt and all that stuff kicked him. I know, who are you to create a course on that? Why would anybody listen to you?

Steve: Were you an expert on Scrivener at the time though? You were not, right?

Joe: I was just a casual user of it, like I wasn’t, I would never consider myself an expert. I definitely hadn’t even written a book with it. And here I was like, how could I teach people to use Scrivener to write a book? And it was just one of those things where I also challenge people now all the time to just instead of saying, why you, what if you just said, why not me? And then it’s like well, I don’t know, why not? And if I wouldn’t have asked that question, and actually just followed through with the experiment of trying it, it scares me to think how different my life would be. It was just that little key that unlocked the potential for everything.

I remember thinking, well, worst case scenario, it’ll be a total flop. But at least I’ll learn the process of like setting up a curriculum and making an online course. And this was like four or five years ago before we had all these cool course platforms. So, I had to literally like learn how to make the course. And so I started making it. And I kind of I was naive, ignorant, which I think are good things when you’re starting out, because I didn’t know how to make it perfect. I just knew let’s make it to help somebody. So, I was literally reaching out to people one on one on Twitter and things like that, sharing with them what I was making, and would they be interested in something like this? Would it be helpful? And what else would they want me to include in it?

Steve: Did you have a large Twitter audience when you were doing this?

Joe: Oh, my gosh, yeah, super large. I mean, it was like seven people. I just started like, what I say, I started from scratch. It was like, I didn’t even — I had no clue how to acquire a following at all. So I was literally just jumping in. I remember having a conversation with somebody really early on, and asking them like what is a hashtag exactly? And like why do these even matter? Like, what are you supposed to do with them? And he’s like, oh, it’s a way for people to talk about things, and you can search hashtags. And I was like, okay, and then I remembered that conversation, let’s see if there’s a Scrivener hashtag. Sure enough, there’s people talking about Scrivener on Twitter. And so I was like, well, I’ll just jump in there.

And that’s just literally how it started. I was getting feedback, people were responding. And I was just starting to build these relationships, learning about what writers wanted, and so forth. And any chance I could get to jump on Skype or connect with somebody and talk with them, I would take it. So that’s literally the humble beginnings of how I started. And I was just sharing what I was making while I was doing it. And it was working.

Steve: So Joe, let’s say someone in my audience wanted to create their own digital course, I would imagine the steps that you would follow today are different than when you got started, right? So, if you were to start today, what would be like your first step? And what’s kind of like a logical progression?

Joe: Yeah, so the things that — like I did a lot of things right but I also did a lot of things wrong and would have, I could have done everything a lot faster. And so today, I actually teach a course on how to basically do what I’ve done called easy course creation.

Steve: Perfect.

Joe: And a lot of the mistakes that I made early on were making something that I thought people wanted or should care about. I think a lot of us have that idea. It’s like I give the funny example of sometimes there’s people that think you shouldn’t have six pack abs, you should have a three pack abs. I’m like nobody wants that, though. So stop trying to convince them that they need three pack abs, they want six packs. So make that. And then that’s just kind of where it starts is to really find out what people want. They’re already having a conversation in their head about what their pains are, what their struggles are, and you need to just jump in there and find that.

So today, I teach and it’s just you’re never wasting time when you’re researching the audience, and you’re collecting their actual language, and just hunting and searching. And so many people want to just dive in and start making something. But it really is that groundwork of making sure you could write a page out of their diary before you ever start making that thing.

Steve: Where are some great places to do this research if you have no audience whatsoever?

Joe: Yeah. Oh, my gosh, that’s what’s amazing about the opportunities today is we have all these tools like number one, Google is amazing, obviously. So you can jump in and just type your topic and forum and you can find forums anywhere. Obviously, Twitter is a place where I started. You really got to find out like where your audience who you want to serve, where they hang out. So writers happened to be on Twitter. So that’s the only reason I jumped over there. Some people are on Facebook, some are on Reddit. So, you just got to do a little digging, find out where they hang out.

There’s forums, Facebook groups, Twitter. There’s also tools like BuzzSumo.com where you can type in a topic and it’ll show you all of the popular blog posts or anything written about that topic and which articles got shared the most and things like that. And that’s exactly how I started developing relationships with like influential writers that were bloggers who had the audience that I knew could benefit from my Scrivener course in the beginning. So, I would literally just type in Scrivener into BuzzSumo, see if any popular bloggers had written about it. I would jump over, read the article, see if they had a lot of comments and engagement, whatever, like, okay, this particular person does.

Are they active on Twitter, by chance, I would hop over there to see their profile. Oh, cool. They’re actually responding, posting stuff. And I would start mentioning their blog and sharing their articles and just kind of building that relationship that would eventually form to some of my biggest affiliate partners today, which also in turn, would grow my list with webinars. And it’s just that kind of groundwork in the beginning that…

Steve: How do you how do you approach like a big blogger? Like, for example, I’m not saying I’m a big blogger, but I rarely check my Twitter feed. Like, occasionally I’ll check it. But I rarely converse on there. I don’t know, I guess it takes a little bit of skill involved to get someone’s attention. I’m just curious how you did that early on. Like, I know Michael Hyatt was like one of your earliest and biggest affiliates, right? How did you get his attention?

Joe: Well, so the thing is, you don’t start with like the A players like you. You don’t start trying to reach those. And if you do, you could start early. But that’s a long game, right, unless you get introductions. And so what I found was like, okay, there was no way I was just going to get introduced right to Michael Hyatt, or because I didn’t — I got to find out who knows him first. So, you just think a little bit strategically about, all right, well, who might be their inner circle and who might be their inner circle’s inner circle and just kind of go out a little bit. And so I would first start with the smaller blogs and maybe do a couple reach out to them, get some results first.

And so I did some really small webinars in the beginning, got some sales and then would approach somebody else and say, this is the results that we got, this is the testimonials that we got, and it would just kind of build from there. And I always, always asked anybody I met; do you know anybody else that would benefit from this? And would you be willing to give me an introduction? And somebody always knew somebody and nobody ever told me no, and I thought, what’s the worst that could happen? They say, no, or, yeah, I know somebody Joe but I’m not going to introduce you, like, okay, I can handle that. Like, I’ll just go to the next one, right?

And for an introvert that was kind of a big deal but I just got over that. And it’s funny if I put like this timeline out, it’s all because of reaching out and meeting somebody and asking for an introduction. And then one day that led to somebody introducing me to Andy Traub, I believe we both know Andy. And Andy is like the super connector, right? He knows everybody. So you can meet one super connector.

And then Andy introduced me to Jeff Goins who has a huge writer following, and we connected and of course, once Jeff and I did a successful promotion, and then his audience loved it. Well, now, that’s a really big testimonial that I can use to approach whoever Jeff knows. And then because of Jeff, I met Joanna Penn who has another huge audience. And so really, it’s just spending the time building relationships, adding value. And so that’s the thing.

Like with you, Steve, if I didn’t know you, and I was trying to get ahold of you. If I was trying to reach out on Twitter and you weren’t responsive there, then I try Facebook, or I’d try — so like, try to find out where you were. If I was having no luck there, I’d try to find out who knows you and try to build relationship with them and then maybe get a direct introduction. So like same thing while I was on Smart Passive Income podcast, Pat Flynn, who was like my first hero, right, who I learned online business from the beginning. And I met Greg Hickman, who happened to know Pat Flynn. And I was like, hey, it’s been my dream to be on Smart Passive Income, would you be able to introduce me. And sure enough, that’s how it works.

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How important was it to go to conferences? Like I know we met at FinCon, but how big was that in terms of your networking?

Joe: That was pretty big. For me, what the conference really did for me, and I remember I came through St. Louis. I was just starting my Scrivener idea at that point. And I remember, it was a big deal talking to my wife about purchasing a ticket, because this was — I was trying to do the pizza thing, we had no extra money. I was like, I want to go to this conference just coming through St. Louis. And it was FinCon back then, it was like what, four or five years ago came through St. Louis.

Steve: St. Louis yeah, that’s where we met, I’m pretty sure.

Joe: Yeah, and I went there, I had nothing going. I was like a complete nobody. But what I remember taking away from that was just meeting as many people as I could, and realizing, hey, these are just people too just like me. I thought they were like special, like there had to be something different and like they just took action on their ideas. And of course, I got to share what I was thinking about with several people and I got some great takeaways and ideas. But yeah, some of those relationships that I met, I met you there, I met gosh, some of the people that ended up being in my mastermind later, many years later, just all from that initial conference. So conferences is like a, I don’t know, when you say it’s like a shortcut almost.

Steve: Yeah, I mean for me, I’m kind of like an introvert in certain ways, and I guess offline so to speak. At a conference, I’m much more social. But I’m very hesitant to reach out to someone randomly like on Twitter, or via Facebook or email just because I don’t get any feedback or facial.

Joe: Yeah.

Steve: You know what I’m talking about?

Joe: Absolutely yeah.

Steve: Did you do most of your damage online or at conferences in terms of…

Joe: I couldn’t really afford to go to conferences. So I was in a place where I really didn’t have a choice. Yeah, I remember like that’s really not my style, either. I’m glad I stepped out of my box, though, because some of my best friends are people I met online, it’s crazy. I never would have thought that, but I remember thinking, I kept hearing people all the time, they would say that like you can’t do it alone. You need to build relationships and I was the introvert, I was like, no, no, no, I don’t want to do that. Like, I’m going to try to build it alone. I don’t think I need people for what I’m doing.

And just my introvertedness, I didn’t want to reach out; I didn’t want to get uncomfortable. And finally, I was like, all right, I’m not making any traction. Let me try this. And so I thought, okay, I’m going to reach out, great, what do I do? How do people do this? So, I remember thinking — I was in the efficient life skills. There was this other blog that was kind of like mine? I was like, what do people do? Do they go on Facebook or something and message them, and say, I like your blog. So that’s literally what I did. Like, I messaged this one guy, and I’m like, hey, I like your article. It looks like we’re writing about similar things.

And he was like, oh yeah, what’s your site? And he’s like, hey, we should we should hop on Skype. And it was like, oh, okay, this must be what people do. Like, let’s do that. Let’s hop on Skype. And I was like, I never used Skype. I remember setting it up with my mom to try to like test it with her so I didn’t look like a fool. I was like, okay, so this is a Skype call. And so we did that. I jumped on and we just chatted, and he was like, oh, do you know so and so? He’s like, really great with social media. I was like, no, I don’t. He’s like, let me introduce you. Next thing I knew, the next day I was hopping on a Skype call with him. And from there he was same thing.

And so like all because I had no idea and just reached out to somebody randomly basically, let’s just put things in motion. And then one guy would give me a little confidence, like you’re doing that, like you’re so far ahead of where I started. I was like, oh really? Cool. Okay, so maybe I can do this. And so a lot of it’s about your own internal growth, stepping out of your comfort zone, and just not being afraid to try things.

Steve: Did you lay this groundwork before you launched your class, or did you already have the class together and then start doing your outreach?

Joe: So one of the things I’m glad that I did, which I actually struggle with more now, because I sometimes I know too much now I think, that’s why I talk about sometimes just who is it Steve Jobs who says like, stay what is I forget, stay stupid, stay something. I think what he meant by that was just like…

Steve: Stay foolish I think is what…

Joe: A fool yeah. Like, some of the things I’m glad I was foolish about was, it was just natural for me to be like, well, I’m not a total expert in this. So I need to find out what the people want. And that was my goal was always to be just about the people kind of on accident, because it wasn’t like about me. And so now I have a lot of things I want to teach. And so my tendency is to be like, well, I’m going to make this because I think they need that. But instead, I was just reaching out literally, to people, and then building what they said they needed. They’re like; do you have a section on how to make an eBook in your course that you’re making? And I was like, no, but I will.

And then I was going to study how to do eBooks with Scrivener. And then I would make a tutorial and I’d literally come back and like share like here’s a preview of it. What do you think? And what I found was I didn’t need to be an expert for people to care about what I was making. I just needed to know a little bit more than they did. That’s all they cared about. And nobody ever asked me, well, what are your credentials? Why should I listen to you?

I was so afraid they would. It was just all about, oh, that’s awesome. You just showed me how to do something I wanted to learn. That was it, they didn’t care who I was. So, it’s kind of freeing to think it’s kind of freeing just to say, like, people don’t really care about you that much.

Steve: Yeah, they just want to learn. It doesn’t matter about your credentials unless it’s something I guess that requires credentials, I guess. But very few things do these days.

Joe: Yeah, not that many things where people just want to — they go online to learn something, they need a quick result, they don’t want to spend hours researching it. Just like think about what we say to ourselves like when we’re looking at a tutorial, even today, when I’m like how do I do this? Well, let me search YouTube. And then if a guy’s rambling on in the beginning, telling me all about him and his credentials, I’m thinking in my head, like dude, just get to the point. I need to know what I need to know so I can get back to do my thing. And that’s kind of how people are. So they just, they go online, they’re looking for information. It’s a whole new ballgame today with all these opportunities, and it’s pretty exciting.

Steve: So let’s say you have your course down. How do you launch it, like you have no audience? So when you first completed this Scrivener course, how did you actually get paying customers?

Joe: Yeah, I remember being all excited about having my course, it was probably about 75% done. And I was like, okay, it’s good enough to start getting it out there. And I remember I had one of those moments just like I did about how to connect with folks. Now it was like, okay, how do I tell people about this. I was like, oh, this is that marketing thing, it is kind of important, right? So it’s like making your thing is part one, now you got to get it out to the people. And so I would literally spend like an hour every day on Twitter, just doing the one to one thing, and I was getting sales that way, which I was super excited about.

And I think back then, I was afraid to charge money for my course. And so I would make 100% off coupon code and handed out for free to people. But it was great feedback in the beginning. And then people were like, oh my gosh, I’d pay this or that for that. And this is great. And I can’t believe you’re only charging 27 bucks.

Steve: Interesting, so you gave it away to people on Twitter. You just said hey, here’s a download link.

Joe: Yeah, I used Gumroad back then because it was just super easy. And then I would just create 100% coupon code. And because I was afraid to like, just reach out and say, here’s my thing but it costs money, right? And so I would say I’m building this, I’m looking for some feedback. Here is it, would you be interested, I’ll give you a free coupon code. And they were like, of course, like, well yeah. And so I’m glad I did that because I did get some really good feedback. And it built my confidence because people were like, this is great.

And so I would, then I would open up a conversation with them like, oh well, do you think it’s — is it worth $27? And they are like, are you kidding me? I’d pay 97 for this. And I’m like, oh my gosh, are you serious $97? I just couldn’t fathom just making money from something that I had made. It was amazing. And so people kept encouraging me to make it better, put more out there. And slowly I did. I said, well, let’s try $47. And people were buying it saying, this is great, I recommend this to my friends.

Steve: This is through Twitter still.

Joe: Yeah, this is still very, very network, one to one, not scalable. And then I started thinking, how do I scale this, right? How do I get a bigger audience? I had no money for ads, so I couldn’t run Facebook ads. And not to mention, I had no clue how to do that. And so that’s when I started researching and just goggling right how to get your things out there and different strategies. And I remember webinars was one of those. I was terrified of ever doing a webinar. But one of the folks I met Andy, happened to know Jeff Goins like I said, and he set it up with Jeff to like, hey, could you do a private webinar for Jeff’s tribe writers group? He’s like it’ll be a smaller group. He’s like would you be able to do that? I was like, well, yeah.

He said just come on and teach what you know about Scrivener, and then we’ll tell them about your course at the end. I was like, yeah I could do that. Right? And he’s like, okay, can you do it in a couple of hours. And I was like, oh my gosh, I was still working my day job. I like flew home on my lunch break to do this webinar, super terrified, I was going to be live. And I did the webinar and people loved it. We sold like, I forget how many, I think then it was like we made $1,000 in sales. And I was like, I made that on my lunch break. Like, that’s crazy. And I was just like, that was the most money I’ve ever seen in a short period of time like that. And I was hooked on webinars after that. I was like, this is great, like to get…

Steve: So at this point you didn’t have an audience at all and so you kind of leveraged Jeff’s audience?

Joe: Exactly yeah. And not to mention that I set up the registration page, and I remember reading enough about people saying, build an email list, because then you can serve people better and you can tell them about updates. So I was like, all right, I’m going to make a registration page, Jeff sends an email to go register for the webinar, which I’m going to teach, now they’re signed up for my email list too. And so just like that, I had an email list of 1000 people who I knew were interested in Scrivener. And so I was like, well, let’s do more of these, right.

And so that’s when my Twitter strategy kind of shifted to let me find more people who have an audience already, instead of me, taking two to three years blogging and building that audience. I wasn’t very patient. So I was like, if I could leverage the time that somebody else spent building their audience and they can vouch for me, and just send them straight to me, in the meantime, I will teach them something they want to know. And so that’s what I did. I started asking for introductions. And I remember reaching out to some folks several times; they turned me down at first. Then I did this webinar with Jeff, we got good results, I’d go back to them, share the results. And they were like, oh well, yeah, maybe we could do something.

Steve: Did you know Jeff before you did the webinar, or was it a cold introduction?

Joe: I didn’t, it was just a cold introduction. I had been trying to get in touch with him for a while but just never — it is tough when you’re dealing with somebody who’s very busy, they’re very successful. They get asked for things all the time, right? And so you don’t want to — I made the mistake of just leading with an ask many times. Hey, would you be interested in a webinar? Yeah, yeah, yeah, they never even see it. And so you just have to be a little strategic, try to get them results.

Steve: That’s interesting that Jeff allowed you to give a webinar to his audience and he’d never seen you present before?

Joe: Never seen it, but the only reason he did was that he trusted Andy.

Steve: Got it.

Joe: And I got to connect with Andy. And so that’s why if you can meet somebody within their sphere of influence, like that’s the open door, and that’ll get you past any gatekeeper or anything like that. And so that was my strategy of like, just connecting with folks. And you never know who knows who. And so, just taking the time to do that, not being afraid to ask for introductions, because that’s the ultimate shortcut. You’re not having to deal with emails whining in somebody’s inbox that they never see because a personal introduction, you just go boom, straight to them.

Steve: And then that — and Jeff, he benefit from this because he took half of the proceeds?

Joe: Yeah, that was always my thing was like, hey, you spent all this time creating and building your audience, I spent all this time creating this product, let’s just meet in the middle 50/50, we’ll split any sales that come from it. And in the meantime, I will teach your audience and give them something that will be worth their time. And you’ll look great because you brought me on to teach them. So, regardless whether they buy anything or not, they’ll love you for it, it’ll be the best teaching I can possibly deliver for that hour. And it was and it was great.

And then people would buy it who were interested, and we’d split the commission 50/50, and it was a win-win for them. And I was like, I didn’t really know that true win-wins existed like that where we talked to the audience, they got something for free. Those who wanted more, could get more, they were happy, the affiliate was happy, because he got a good, great commission. I was happy, obviously, because we made sales. And I was like, let’s just keep doing this. And I didn’t have to spend a cent on advertising, right? It was just — and the webinar worked really good too, especially because I wasn’t a credible name yet.

So, I didn’t have this huge following if somebody was going to Google me, but all I needed was a vote of approval from them. And so that credibility transferred, because they trusted me enough to bring me in front of their audience. And that’s literally to this day, I don’t have a blog. I don’t, I just didn’t go that route. But I grew my email list super fast. We have over 100,000 on our email list now. And that’s just from webinars.

Steve: That’s crazy.

Joe: And people can’t believe, they’re like you didn’t blog, you don’t have all these sign up forms on your website. And like, no, there’s no website, there’s no signup form.

Steve: So today you don’t have a — I mean, you only have a website that serves as like a sales page for your products, you don’t have — you’re not putting out content on a regular basis?

Joe: So yeah, I didn’t — my business was built zero from content marketing, and basically all from affiliate marketing basically.

Steve: Wow.

Joe: Yeah, it’s kind of crazy. And some people are encouraged when they hear that, like, oh, there is another way. You mean, I don’t have to just like blog my face off for two to three years and build the audience and then create a product? Like, no, you can create it backwards. Find the audience first, find the pain they have, create the product, and then build relationships with those who have that audience. And it feels like it’s taking longer in the beginning, like you’re not making any traction. But once you start to make that traction, the snowball effect, it just grows exponentially.

And so within a year, I went from zero to a thriving growing email list, which I learned later, will buy from you over and over again. And so there’s that, and then a thriving business to where I was like quadrupling my day job income, and here I was trying to get a couple of hundred extra bucks delivering pizzas. So it was just kind of a crazy transformation.

Steve: So, let’s talk about some tips because clearly, you’re really good at getting to know people and networking. So what are some of your tips for when you’re first starting out, and you’re trying to get that first webinar blogger or whoever?

Joe: So don’t be afraid to do things for free, like do small webinars, do a webinar yourself, do a webinar that has only 10 people on it. Just get results, start, and that’s great too, because these webinars, you’re able to interact with folks, and you’re able to ask questions and get feedback live. And that’s really just the most important thing you can do in the beginning.

Steve: I mean would you even suggest doing a webinar with an influencer where they get to keep all the proceeds and you get the email list? I mean, have you ever done that too?

Joe: Yeah, I haven’t done that myself. Everybody’s always been super generous and say, no, we’ll split it. But I’ve heard people do, that’s definitely a good incentive, or at least do like a 75/25 where you just stack it in their favor heavily. The one thing I did do well in the beginning was, I tried to put myself in their shoes and thought, okay, if I’m super busy, if I don’t really trust this guy, I don’t know how it’s going to work, the last thing I would want is for this to be like, feel like work for me, right? Like, I want to make this as easy as possible for them.

And so I would always approach it with a, hey, this is going to be a done for you service, like, I’ll handle all the technology, I’ll even give you the emails to send that you can just swipe copy. So you don’t have to think about that. I wanted them not to have to think. They just basically take a chance on me and get commission if it works. So, I set up all the registration pages, I went live, we used my technology. And I said, all you have to do is literally send a couple of emails and show up and I’ll make you look like the rock star because I’ll just give your audience so much and I’ll make it look like you organized the whole thing. But basically, I did.

And so that was always my goal from the beginning, is just make it as easy as possible on them to where they don’t have to have any bit of friction. And I would even tell them, hey, you don’t even have to show up. I would just go overboard. And they were like, wow, that is great. Like, you don’t know, a lot of them would tell me like you don’t know how nice it is to really not have to worry about this. Because that’s what they’ll see a lot of times is like, oh, this is going to take me a lot of coordination and thinking about, and I got to set up the page. And then I got to think about the emails to write.

And they don’t have to do that, especially these guys. They’re already making money; they don’t have to do it. And so some of them, they didn’t care about money at all, like they were already doing very well and their key to their — key to their heart so to speak, was their audience. And I would try to learn about them from their blogs. And you could tell some of them like, they really care about the audience. And so I wouldn’t lead with pitching them the money, like I will give you 75% blah, blah, blah. I lead with, I can see your audience really craves this information, and I believe we really can help them.

And then it would be kind of like, oh, and by the way, I always, do a 50/50 split, and yada, yada. That’s where they’d be like, oh, I get questions all the time about Scrivener, and I never really know how to answer it. So this would be great. And so you got to find what works.

Steve: I just wanted to take a moment to tell you about a brand new service that I personally just launched that will help you grow your email list for free. First off, my new business is called GoBrandWin.com. And it’s a service that helps e-commerce sellers build their email list through group giveaways. And here’s how it works. If you own your own e-commerce brand, and you have a following, what you do is you contribute a gift card toward your products valued at $200 or more. Now Go Brand Win will assemble gift cards from other participating brands with a similar customer demographic into one massive sweepstakes giveaway.

Now, all participating brands will then send our co branded giveaway email to their entire customer base driving them to a special landing page on GoBrandWin.com where we will acquire email addresses and Facebook pixel data. We will also send the giveaway entry forms to related influencers in our blogger database. And between my co founder and I, we have access to almost 1,000 bloggers in our database. Now, consumers who enter the giveaway will enter their email addresses, we will send them special offers from your company and select a grand prize winner. And after the sweepstakes are over, you will receive the full list of entrants and instantly grow your audience.

Bottom line, the concept is very simple. We all help each other promote each other’s businesses, get free promotion from bloggers, and share the spoils, which in this case, are the email addresses. If you are interested in growing your email list, then head on over to GoBrandWin.com, that’s G-O-B-R-A-N-D-W-I-N.com. It’s 100% free, so sign up now. Now back to the show.

Yeah, I’m just trying to think from my perspective, if someone came up to me and wanted to do a webinar, I would be less concerned about the money and more concerned about the information that was to be delivered. So I guess, if I saw this person in action, and they really delivered quality content, I’d be much more inclined to do it.

Joe: And you got to think like they’re taking a risk on you, right? Like, just like you would be taking a risk because now you’ve built this credibility with your audience. And you don’t want to ruin that. And so you got to think of it. And it’s different. Like when I was — because I was coming at it from a place where I was hustling, I was struggling, I needed money bad. Like, that was my motivation. But that doesn’t mean it’s theirs. And so you have to think about it. Put yourself in their shoes.

And that’s what I would do on Twitter just reaching out to folks too was like would I want to just be hounded with a questions and requests? Like, no, so for like months, like six months to a year, every time Michael Hyatt would post a blog and he posted on Twitter, I’d comment on it, I’d share it, I’d like it, and just jump in a conversation. Never once asked for anything until one day Michael, I guess probably noticed, I was always showing up, recognized my name. And he asked me a question on Twitter. I remember that day like it was yesterday.

He was like, is there a way to work with my editor who uses Microsoft Word with Scrivener? Because he went through my handle, saw that I was Scrivener coach on there and I posted Scrivener tips and things like that. I was like, oh my gosh, he’s asking me and I said, you know what, I don’t know the answer to that. But let me get back to you. I will find out. And I dropped everything. And like spent a week researching it, finding out what other authors were doing. And I came up with this method, this workflow, recorded them a super like good video. I thought this is my chance, right, because he asked me now.

And I just went over the top, made him a video, responded back on Twitter. I was like, hey, I think I found the perfect solution for you. And he was like, great, email it to me here. It’s like, boom, right? We have direct access to his email. He’s looking for it. Like, this is so much easier rather than me just knocking on his door constantly. And so that, like I said, that was six months to a year of patience and just reaching out and giving back and sharing and doing what I could.

Steve: I’m just trying to think of my own experience here. Like the people I noticed, especially on Twitter are the ones who constantly tried to share my content, or re-tweet it, and it’s a long term play, right? I might not notice it for like a full month. But if this continues for like six months or longer, I’ll know who that person is.

Joe: Yeah, because we get people all the time. And the same with me now, they will pop up a time or two and you’re like, that’s nice. But you notice the ones that have perseverance that stick around. I mean, that’s how — do you know Bryan Harris of Videofruit?

Steve: Yeah, he was on the podcast not too long ago.

Joe: Okay, cool. Yeah, that’s how I met Bryan. He’s one of my best friends today actually. It’s funny, because on Twitter, I remember anybody who would mention or have a question about my course, as it became more and more popular. Like, hey, I have a question about this. And Bryan would see that and he’d comment. He was like his course is legit. It’s one of the best courses I’ve ever taken. And I remember, I’m like, who is this guy? He is very nice. I did not ask him to just jump in here and say a nice thing about it.

Like, you notice people like that, who complement your work and stuff like, and so of course, I’m curious, right? You click through their profile. Like, who is this guy? Oh, my gosh. And I clicked through his blog. I’m like, he’s legit. Like, this is crazy. And then I message him, and let’s chat. It’s funny how things work, but it doesn’t take a lot. Especially if — something else I’ve learned is really powerful. Think about this. Like, if somebody were to message you, Steve and say, like, I’ve taken what you recommended I do in this article, or here or there and I did it. And I got these amazing results. Like, how…

Steve: Yeah, you bet, hell yeah, I’m going to contact them.

Joe: Yeah, you’re going to be like, let me hear more about that, right, because, it makes you look good. And it’s a credibility for you. And so you kind of think, how can I make them look good? How can I help them share, them whatever, increase their audience, help their audience, find the things they care about, and focus your time there.

Steve: I’ve actually used that exact technique, it works really well.

Joe: It does, it really does. And so you just have to be a little strategic about it, and have patience and find something you can help with. So, like in the beginning, I remember thinking, I really, I can’t introduce anybody to anybody, because I didn’t know anybody. I remember feeling bad about that, because people were like, oh, I can introduce you to so and so. And I’m like, I’m sorry, I can’t introduce you to anybody. So, I was like but you know what, I’m pretty good at graphic work.

And I was like, do you need anything help with a design, like eBooks are really big there. I was like I could design eBook cover for you, whatever. And like they were thrilled with that, like are you kidding me? I’ve been wanting that thing redesigned forever. Like sure, that’d be super helpful. And like, that was a big deal to them. And it was something I could give. So, always just find your skill set, whatever it is, and just don’t be afraid to offer that.

Steve: That’s really great advice Joe. Really quick, I just, I did want you to talk a little bit about some of the tools like what are you using for webinars? What are you using for courses? And what are you doing to just kind of monitor social interaction?

Joe: Yeah, so today, I’m really a huge fan of these course all in one platforms, like Thinkific.com and Teachable.com, they make things so much easier, like stuff that I think spent the better part of a year trying to build, it was like, done it all for you. So, I highly recommend starting on a platform like that. And what’s great is, yes they have a fee, but they handle all the technology and headache stuff for you. And it’s usually a free plan to start with. And so you can grow together, it’s just like a perfect solution really.

So a lot of times I tell folks, if they want to start like I did, like look for the pain, look for who you want to serve, and start reaching out, help, have the audience build it with you. And you can start with a free plan on Thinkific or Teachable and like kind of start fleshing it out a little bit in there. It’s fun to see a course kind of take shape. And so that that’s kind of what I’m using today. For course platform I use everything on WordPress and like would build it myself, but the more things would break and plug-ins weren’t communicating with each other, it was just like uh. So that’s what I’m using these days for that.

For webinars I use GoToWebinar just because it’s just like never breaks. We have a lot of people on our webinars now, but I’m also…

Steve: Thousands right from what I heard?

Joe: Yeah, and so I made the mistake early on of trying to go a cheap route with a service and people got kicked off and it crashed. And I was like uh. So that’s been the most reliable for me. But I know a lot of folks are having great results with things like Zoom and a lot of other ones. There’s just a lot of great ones out there now. And then…

Steve: Email marketing… sorry.

Joe: Yeah, I had email marketing.

Steve: What are you using for email?

Joe: We use Infusionsoft for email marketing now because we have like all of our courses, and we’re kind of complex. Starting out though, like if your business isn’t in certain like really complex or anything like that, I definitely wouldn’t use Infusionsoft. I would probably use ConvertKit, a huge fan of just their interface, the way they’ve laid it out. It’s just super clean and nice and again, a tool that didn’t exist when I started.

Steve: Yeah. Joe, I didn’t realize well, we already been talking for like 45 minutes, and you just have a new kid and I want to be respectful of your time. So Joe, where can people find more about you, get ahold of you, maybe check out the products that you have to offer?

Joe: Yeah, so the best place today still is right where I started on Twitter. So I’m @Scrivenercoach over on Twitter. And I am slowly starting to build out kind of a resource page over on JosephMichael.net. So my Scrivener kind of pen name is Joseph Michael online. So, you can check out that, it’s a work in progress but we’re going to be putting all the programs and courses that I’ve designed over there, and so you can check them out.

Steve: Yeah, and you’re launching a course on how to get a pizza delivery job right? Is that coming out soon?

Joe: Yes just avoid it entirely.

Steve: All right man, take care Joe, really happy to have you come on the show. Really appreciate it.

Joe: Thanks Steve. It’s been fun.

Steve: All right. Take care.

Joe: All right.

Steve: Hope you enjoyed that episode. Joe is probably one of the biggest hustlers that I know, and he basically started with nothing and now he runs a seven figure online business selling courses. For more information about this episode, go to mywifequitherjob.com/episode222.

And once again I want to thank Klaviyo for sponsoring this episode. Next month Klaviyo is holding a two day conference for 400 e-commerce marketers and store owners with an awesome lineup of speakers. They’ve got experts coming in from Shopify plus BigCommerce, Google, Octane AI, Recharge, Smile.IO, Swell, and other top e-commerce agencies plus panels with successful Klaviyo customers and a keynote address by Ezra Firestone. Find out more about this conference at Klaviyo.com/Boston, that’s K-L-A-V-I-Y-O.com/Boston.

I also want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop ups for any primer that is closely tied to your e-commerce store. If you want to give it a try, it is free. So head on over to Privy.com/Steve, once again that’s P-R-I-V-Y.com/Steve.

Now, I talk about how I use these tools on my blog, 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.

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If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

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221: Advanced Techniques With Amazon Sponsored Product Ads With Edward Ruffin

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221: Advanced Techniques With Amazon Sponsored Product Ads With Edward Ruffin

Today I’m thrilled to have Edward Ruffin on the show. Edward is in charge of sponsored products ads over at Sellers Labs and he was one of the speakers at this past years Sellers Summit.

During the event, I really got to know Edward well and I discovered that the man is truly a sponsored products ads fanatic and he lives and breathes it 24/7.

So today, I brought Edward on the show to talk about the latest and greatest with Amazon ads. Enjoy the show!

What You’ll Learn

  • How to launch a product today with Sponsored Product Ads
  • Advanced ad features that few people are using
  • How to run headline ads
  • Common mistakes that new advertisers make

Other Resources And Books

Sponsors

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.
Klaviyo

Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
Privy

Pickfu.com – Pickfu is a service that I use to get instant feedback on my Amazon listings. By running a quick poll on your images, titles and bullet points, you can quickly optimize your Amazon listings for maximum conversions. Click here and get 50% OFF towards your first poll.

SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
Sellers Summit

Transcript

Steve: You’re listening to the My wife quit her job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not in business. And today I have Ed Ruffin from Seller Labs with me on the show. And Ed is one of my go to guys when it comes to Amazon sponsored product ads, now why? It’s because he lives and breathes ads for hundreds of clients every single day, and today we’re going to get a lesson from the man himself.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. And I like Klaviyo because they are the email marketing platform that I personally use for my e-commerce store, and I depend on them for over 30% of my revenues. Now if you want to achieve similar results as I have in email marketing, I encourage all of you to attend Klaviyo’s upcoming conference on September 13 to the 14th in Boston Massachusetts. This event is the largest in-person gathering ever for the Klaviyo community. With two days and over 30 practical sessions, it is a no fluff, no BS e-commerce marketing conference. Get your ticket at K-L-A-V-I-Y-O.com/Boston. Once again that’s K-L-A-V-I-Y-O.com/Boston.

Now I also want to give a shout out to Privy who is also a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now what does Privy do? Privy is a list growth platform and they manage all my email capture forms, and in fact I use Privy hand-in-hand with my email marketing provider. Now there are a bunch of companies out there that will manage your email capture forms, but I like Privy because they specialize in e-commerce.

Right now I’m using Privy to display a cool wheel of fortune pop-up. Basically a user gives their email for a chance to win valuable prices in our store and customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%. So, bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve. Now onto 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 Edward Ruffin on the show. Now Edward is in charge of sponsored product ads over at Seller Labs, and he was actually one of the speakers at this past year’s Sellers Summit. And one of the things that I do for speakers on the last day of the event is I hold a special mastermind session for the speakers.

And during that mastermind, I really got to know Ed really well. And I discovered that the man is truly a sponsored product ads fanatic, and he actually lives and breathes it 24/7 and I’m not even exaggerating here. Anyway Today I brought Edward on the show to talk about the latest and the greatest with Amazon and ads. And with that, welcome to show Ed, how you doing today man?

Ed: Doing great. I really want to thank you for having me on Steve, and I can definitely speak back to that, I do live and breathe sponsored product ads. And I am a huge nerd when it comes to advertising on Amazon. And a lot of people can try to knock me for that, but I’ll take it with pride. I definitely do wake up and think about ads. And I do it all day every day, and I really enjoyed talking about it at your conference as well. And I just want to — I want to say I’m glad to be here and I’m excited to talk about some things today.

Steve: And you also stay up to the wee hours of the night thinking about sponsored product ads too from what I remember?

Ed: I definitely do, I stay up quite late. I’m always like reaching out to clients and responding to the client emails. And it can be pretty intimidating sometimes to some of my employees, but I tell them like, hey, you don’t have to be like me, I just promise, like I’m just get really excited about these things. And I want to get people set up correctly and I want them to succeed in the sponsored product ads. I think it actually; it really makes other people want to do the same thing like within office hours if they need to, like do not really extend yourself too much, by all means.

Steve: So, I’ve had people already on the show talk about sponsored product ads. So, what I was hoping to do today is let’s like skip, just like skip the basic stuff and go straight for the intermediate and advanced tactics. And I know that when you were at the event, so Seller Labs had a booth at the event, instead of like a traditional booth what Edward did was he signed up one on ones with Amazon sellers and he went through their accounts and he told them ways that they could improve their Amazon sponsored product ads. And so, I thought I’d start by asking you, you looked at a whole bunch of people’s accounts during those three days and what were some of the common mistakes that you saw and common improvements that could have been made for most Amazon sellers?

Ed: Yeah. So, I saw quite a different array of different people’s accounts. I think I met with over well over 20 people; I have like these 20 minutes to dance with them. And it just gave me time to look at their ads and see what they were currently doing, and it really just gave me a chance to peek inside their account and see like what could be done better. I will say some of them, they were like beautiful, and I think they were just as much of a nerd about PPC as I was. So there were a couple of them actually at the conference that I was just like, listen, like you’re doing everything great. And this is awesome. Keep at this, here’s my card. Let’s meet up and geek out together later on about this.

Steve: So you found a new friend.

Ed: Exactly, I found some new friends that were just as nerdy as I was. But there were some things that I did see kind of across the board. And this isn’t really limited to just like the people that I met at your conference, this is kind of some things as I see all the time. But in particular at the conference, one of the biggest things I saw was people were running these campaigns and they had them running for quite some time and they had all this data, but then they just didn’t know what to do with it.

And really, when I say data it’s like they’ve been running the campaigns for quite some time, they have a lot of keywords, which also leads to a lot of user search terms inside of their campaigns. And they were just like, I don’t know what to do, because I had these thousands of search terms, a lot of them are not relevant to my product, and I just don’t know what to do to really get the most out of these campaigns. And I kind of looked at him and I was like, that really is a great question because you gain all this data with your sponsored product ads, you have these beautiful campaigns running but then it starts to build up and then you start losing money because you’re not diving into your campaigns.

So, one thing I saw pretty much across the board was just a lot of people weren’t diving into their campaigns to look at the search terms and they weren’t setting these crazy search terms as negatives or anything. And what I really mean by that is, they just kind of had it running and they were hoping for the best, they weren’t doing any of the cleanup process that’s really required to maximize your profits on your sponsored product ads.

Steve: I can actually relate to that because it’s a process, right? It’s something that you have to do consistently. And so, you have to get in there and then you have to set these as negatives. And it’s a tedious process, because the keywords are constantly appearing, the negatives are constantly appearing. So, I was just curious, do you have like a process for that?

Ed: Yes. I mean, really like whenever my team or I were first starting to manage someone’s account, and we were doing the ads for them, when we create some new campaigns, we let them run for like a week or sometimes a little longer than a week just so they can get enough data. And we usually do a first like cleanup process about that time and that’s just where we go through their search terms, and we look at the ones that have nothing to do with their product. This does seem like a really daunting task, but it’s not honestly because really if you’re selling let’s just say an apple slicer and I know everybody wants to sell an apple slicer, it’s the hottest product in the market right now.

But let’s just say that you’re selling an apple slicer and you have a campaign running and you’re going to start getting these odd search terms. And that’s just because Amazon is trying to drive traffic to your product and they’re trying to find out exactly what type of traffic converts for your sponsored product ads. But you’re going to get these search terms that have nothing to do with their product, you may start seeing terms for mouse or keyboard, or let’s just say garlic press or Gatorade or something of that nature. So, it’s really easy to just go through and you can pull up your full search term report if you want to, or you can go in at a campaign level inside our tool at night and actually see like the search terms for a particular campaign or a keyword.

And we start cleaning those up by setting those odd phrases as negatives. And this is just really just going through and just seeing things that catch your eye. After about a week or so they may not have enough data to throw up any red flags, but just the term itself can be a huge red flag. And we just go through; we set them as either negative exact or negative phrase keywords. That’s also something else a lot of people weren’t doing was using both exact and phrase negatives. And we just cleaned it up. We do that initially, just like after the first week or so, and then we continually go back in there and check it every so often to see also if there’s just terms that are not converting.

So it’s not just the ones that had nothing to do with your product but also if you think that you are getting a lot of traffic for red apple slicer, and it turns out you don’t, then you may want to set that certain search term as a negative possibly because it’s just leading to a lot of clicks and no conversions by chance.

Steve: So how do when it’s an ad problem versus a listing problem?

Ed: That is a wonderful question, it really is. I think the biggest thing is when it comes to it being an ad problem, that’s just where you’re kind of going after unprofitable keywords and ones that aren’t relevant for your product. And that’s kind of just like overextending yourself and trying to say, well you know what maybe someone that searches apple peeler will also want to get an apple slicer at the same time. So it’s just like having these types of hunches, but not having any data to back it up. And then after a while, you may see, okay, wait a minute, when people search for apple peeler, they want to buy an apple peeler. And you just have to kind of go in there and negate that or like pull the keywords themselves.

So like, that’s more like the AdSense like the ad side of that where you’re just setting things up kind of for failure without knowing it because you’re trying to overextend yourself. When it does come to more of a listing issue, that’s when you’re noticing that you’re constantly showing up for terms that had nothing to do with your product. And that really goes back to Amazon doesn’t have someone who is working 24 hours a day who’s going through every listing and saying, okay, cool, this is an apple slicer. Okay, cool this is a garlic press. Oh, cool look, this is a monster truck for kids. It’s an RC car. Nobody is doing that at Amazon.

So, Amazon looks at your listing and pulls in like the keywords and everything that you have inside of it to really decipher what your product is. And that’s where it gets problematic because if you’re noticing that you’re showing up for all these searches for these random keywords, that means Amazon is trying to drive traffic to these keywords because they think that that’s what your product is and that’s where it’s a listing problem, because that shows that you just didn’t pull out your listing correctly and you weren’t successful in telling Amazon exactly what your product is, and a lot of people can lose a lot of money that way.

Steve: So what are some other things that you saw that could be improved on some of these accounts? Like you mentioned, a lot of these people that you talked to at the Sellers Summit already knew what they were doing. So what are some things that you spotted that could be improved upon?

Ed: Yeah, I mean, like a lot of them they had done some really great keyword research. They had done the research, they have done all these keywords that they saw that had a lot of traffic going to their products and really were relevant keywords for their product and they had these beautiful campaigns running, but they weren’t competitive enough. This is something where it’s just really about getting your feet wet and trying to capitalize on the traffic that Amazon is pushing towards you. You have to be competitive.

I’ve really seen a lot of people that have done the research, they have these awesome keywords, they see the potential for traffic, but then they’re bidding like the bare minimum on these keywords. And they’re like, I’m just knocking at the traffic that I want and I’m just not getting the conversions that I really need for this product. And the thing is you have to be competitive when you’re doing sponsored product ads. I mean, there’s no if there, there’s no buts or anything about that, you have to be competitive because you want to capitalize on that traffic and you want to show up for those keywords, because you know that you’re going to do well for them, why would you not want to show up for them?

And so really, I saw people that were bidding very, very low on the suggested bid range or they were just like, not really adjusting the bids as they need to. And same thing goes for the budget. They were just kind of keeping the budget at a flat rate. And if they were maxing out their budget all day, every day, they were still not increasing it. And that’s something else that you…

Steve: How do you know what to bid, how do you know what a high bid is? Do you just take the higher end of the recommended range?

Ed: Yeah, so normally I do that honestly, a lot of times I just see the suggested bid range is really just like what Amazon notices the bids being throughout the day normally. It is just like an estimate. So I never take it 100%, I take it with a grain of salt, of course, just like everything else. But I usually do go towards the higher end of the bid, if not even more than the bid range that they provide. And this is really just a good tactic because you can get more data in a shorter amount of time. And that means you don’t have to wait a month before you optimize your campaigns.

You can wait like a week or two instead because you’re going to have a lot of data that’s coming through, because you were competitive, because you did show up for these keywords, because you did get these clicks. Then you can finally say okay, cool, I got this data really fast. Now I can bring down the bid on the keywords that got clicks, but didn’t convert as much, or I can actually pull some of the keywords that got clicks and didn’t convert at all. So, I do go towards the higher end of that suggested bid range, and then I adjust it as needed. I’m usually not the type of guy who pauses keywords I’ll be honest with you, unless there’s no conversion.

So, by starting off with a higher end of the mid range, I can just slowly scale it downwards over time if it’s not converting as well as I wanted to. And that helps me maintain my ACOS as well because it helps me control how much I’m actually spending. And this is a much easier approach as opposed to starting off at the bottom end of that range and then slowly going upwards, because that’s going to take two or three months to really get where you need to be if you’re being really cautious. So I saw people that just weren’t being as competitive as I wanted them to.

Of course, this does go back to whatever your budget is, you should work towards that. I don’t want to ever tell somebody to spend $30,000 on ads if they don’t need to, but it’s just willing to kind of play the game a little bit more and be able to work [inaudible 00:14:41] to get that data that you need.

Steve: Sure, I mean this is common with Google AdWords too. You always bid high and you never end up paying what you bid when you bid really high anyways. And you just want to get data as quickly as possible.

Ed: Exactly. Yeah, I mean, it’s really just like that you’re just telling Amazon okay, I’m willing to spend up to this amount. But I mean, you could be spending like 50 cents less, or like there’s probably certain times throughout the day where other people aren’t running ads, or they’ve already met their daily budget and those bids drop, like at certain points of the day, depending on the market that you’re in, or like type of category. You may see that like at 6pm, you just you don’t have that much going into your ad, but you’re still getting great conversions. Maybe that’s just because everybody else in that category, their ads went out of budget or people just aren’t running ads at that time.

Steve: So when you make adjustments, like how often do you wait, how long do you wait before you look at the data again to make another determination?

Ed: So honestly, I do it every two or three days. And that’s just because of the clients that I’m working with. They are high volume and since they are high volume accounts, they do a lot more data that comes in, in a shorter amount of time. But normally I do tell people to look at their accounts two times a week or something like that, maybe a little less sometimes if you just have like a very steady stream where you’re kind of more on maintenance mode with your campaigns. You can just look at it maybe once a week and that’s just because you don’t want to overcrowd your data.

You definitely don’t want to smother it, you don’t want to look at it every day because you’re going to be like well, oh dang, this keyword got 12 clicks today and no conversions and you may see it as a negative or pause it and the next day you get 10 conversions for it. So, I usually look at it every few days. So I’ll look at the account and adjust it as I need to. Another tip for that as well is I usually look at like the past two weeks or the past month of data whenever I’m looking at the data. That way it gives me more of a range of the kind of like second scene and it helps me get a better average amounts so I’m not just looking at like one day or two days worth of data. And it allows me to not make such crazy judgmental calls on some of these keywords that I won’t mess myself up in the time I have coming forward.

Steve: So for people that are impatient, is there like a certain impression count or clicks, like some sort of guideline that you use before you take any action?

Ed: Yes I mean, so impressions I really just use to make sure that I’m getting seen. I really kind of look at impressions last honestly, just because it didn’t cost me anything. It doesn’t cost anything to be seen. So, I usually just use impressions as a last like notify of how this keyword is doing. I do primarily look at clicks. Normally, my rule of thumb is I wait so something has at least 10 clicks before I make that judgment call. And what that really means is, I wait until it has 10 clicks to say, okay, should I lower the bid some, should I increase the bid, or should I just go and pause those keywords?

So if I have something that has like 10 clicks and no conversions, I’m like, all right, now this is not working out. I may have wasted like 20, $30 on this keyword and it’s just not converting well. At that point if I’ve gotten 10 clicks, and it’s been like a few weeks or so, or something of that nature, I will potentially think about pausing that keyword just because it hasn’t converted for me. And the way it’s trending, I don’t want to keep on spending money on this keyword going forward because I’ll potentially be spending more money that’s not going to convert for me.

But on the other side, like if I have something that has 10 clicks, and it has like six conversions or seven conversions I’m like, heck yeah, this is doing great. It’s converting well, it’s providing the traffic and the conversions that I want, I may up the bid some to remain competitive on that keyword going forward. And then the third case, of course is like where you have something that has 10 clicks, and maybe one or two conversions. That’s one of the cases where I may just lower the bid because it’s still showing that that keyword is profitable. It is giving me the conversions. That’s awesome, but it’s just not at a really good rate. I want to lower the bid so I’m not spending as much on those conversions that happen every now and then.

And that allows me to maintain my ACOS and make sure I’m not just throwing money at a keyword that’s converting once every blue moon, but I’m still showing up for it just not as often as I was before.

Steve: So, as you’re running other people’s campaigns do you tend to be really aggressive in terms of ACOS, and just try to break even on your ads or even lose money and just let the organic takeover, or do you tend to take more of a stance of being profitable for your sponsored product ads?

Ed: So honestly, the end game is to be as profitable as possible. But it really does depend on exactly what the client wants. That also depends on the category as well. So usually whenever I go into this, I’m completely straight up with the client. I’m like, hey listen, we need to know what you want to do with your account going forward. Do you want to be aggressive? Do you want to spend a little more money and actually lose some money but build up your brand like just like what you’re saying Steve and actually get that organic ranking running and moving upwards? Then there’s also the way of just breaking even and then being profitable.

So the first thing that we do is we kind of determine their breakeven ACOS on their campaigns so we can kind of know exactly what their account overall ACOS is and their target is and we try to at least break even to begin with. But of course, we try to maintain breakeven at first because there is kind of like a swell upwards of spend at the first segment of running ads, and then we taper back down to be more and more profitable. But it really does depend on the category as well because people that are in things such as the supplement marketplace…

Steve: Yeah sure.

Ed: They are like 100% ACOS. That’s fine because they’re looking for that return sale, they’re playing with the big guns, up on the big guns and they’re really trying to get as much traffic as possible to build up brand reputation. But I always do want to be profitable, so I always keep that ACOS goal in mind that I try to always undercut it, and I try to just like trim it down as much as possible so it can get something more of a maintenance mode where I’m just trying to optimize it every now and then.

Steve: Okay, so what are some of the more advanced tactics that you aren’t seeing people use that they should be using?

Ed: Yeah, so I mean, one of my favorite is using both auto targeting and manual targeting campaigns. I know that sounds like well hey, everybody does that, everybody knows what those are. They run those all the time. Yeah, they do but it’s knowing why you’re doing it. That really helps you understand what the benefits of both are. Of course, everybody knows that manual targeting campaigns, you’re telling Amazon which you want to show up for, you get that top of page placement if you’re really aggressive and you’re trying to get that higher bid, so that gives you a unique placement.

But people don’t know about auto targeting campaigns as much. People usually will just run auto targeting campaigns just to get the ball rolling, then they pause them, or they archive them completely. And I’m like, no, what are you doing? Keep those running. And the main reason I tell people to keep auto targeting campaigns running is because you get unique placement with auto targeting campaigns. There’s placement that you get with auto targeting campaigns that you cannot get with manual targeting campaigns.

And that’s huge because some of the placements are like whenever you’re looking at a listing, and assess sponsored product items related to this one, those are auto targeting campaigns right there. That’s Amazon advertising other people’s products on your listing and it’s kind of giving you that extra traffic. Also, whenever you add something to your cart on Amazon, there’s ads there as well. Those are also auto targeting campaigns. And whenever you actually buy a product, like you’ve actually spent money on a product and you’ve already given Amazon money, they’re like, oh cool, thank you for buying this product, here’s some more ads. Those are also mainly auto targeting campaigns.

So you want to have both of those running like all the time is what I say. I say have them running all the time so you can get all the placements possible. You can show up in the normal search, you can have that top of paid search, be on competitors’ listings, the ad to cart, and the actual thank you page as well. Those actually convert really, really well. So, I tell people all the time, you have to run these all the time and you have to kind of be somewhat aggressive with it.

And you really do want to open that up to build out your strategy because especially if you’re building out a brand, you want to have that brand recognition, you want people to see your product more and more. You don’t want to have just your product showing up on page seven of the search results. You want to see it on page one up top, you want to have a headline search ad as well and also show up on competitor listings. And when people are adding other items to your cart, you want to show up there too. You want to build up that brand recognition so people see and they’re like, wait a minute, like this has shown up a lot and it does look pretty nice. They have a nice listing. I actually know what the product is. I may consider buying that because I’ve seen it so much. So, a lot of people just miss auto targeting campaigns.

Steve: So you bid on the auto campaigns as aggressively as you would on the manual ones is what I’m hearing.

Ed: So you can. Honestly auto targeting campaigns are a heck of a lot cheaper than manual targeting campaigns. And that’s just because the placement is different and it’s more reliant on Amazon actually driving that traffic. So when I say be aggressive, I’m not saying like bid $20 on a click or on a targeting campaign, but go up to like $1 or $2 depending on the category and you’ll see the trend over time to what the actual cost per click is. And that will allow you to kind of gauge exactly what you’re spending on average for a click for the auto targeting campaign. Then you can kind of taper down or taper back up if you need to, depending on what that range is that you’re seeing for those clicks that you’re actually getting. So, it is nice to be more aggressive though in general for sure.

Steve: So you mentioned auto targeting, the ads show up in the headlines? I didn’t know that.

Ed: Yeah, I’m sorry. It’s just like — it’s just using the auto targeting and manual targeting and headline search ads.

Steve: Oh, got it got it. Okay actually let’s talk about this for a little bit, the headline search ads. So what is your strategy for those?

Ed: Well, first of all, they are my favorite ad of all time.

Steve: Really, okay.

Ed: Because I get to spread my wings and be creative and make it look beautiful for everybody and everybody loves the ads. But in all honesty, I really do just love headline search ads. I really enjoy first of all there at the top there on the sidebar now, they have some other placements as well now which is awesome. They’re not just that top of the page headline search ad that you see or are so used to. But with headline search ads they’re so nice, because you get to be more creative. You get to create a headline that’s catchy and gets people’s attention while also using an image that you want to use.

And what I really mean by that is whenever you’re building out a headline search ad, you get to choose the image to the left of the app. You’ll have an image and then you’ll have the three items that you’re advertising. The image over to the left, you can actually choose the lifestyle image of someone actually like using your product or just like a really awesome picture of your product that has some Photoshop skills behind it, or like has it outside or has somebody using it or something of that nature. You can even have like your logo in it. So that actually leads to better conversion because people see that and they’re like, wow, this is a different image.

It’s not just like your normal stock photo of a product that has a white background is just really, okay, this is a product, but you actually see someone using it. And whenever a headline search ad is actually viewed on a mobile platform, that may be the only picture that’s actually showed to somebody. So that can be like your one chance to actually pull someone in and look at your product. So with headline search ads, they’re so important when it comes to building out a brand because you can express your brand more than you do in just like a normal sponsored product ad, because you can have a headline that says like use this to help out with this or a great gift for dad if it’s Father’s Day or something of that nature.

So you can try these different types of headlines as long as I think they’re then like having 50 characters very, very short. But you can express your brand more to kind of show like more what your brand is about and what is pushing while also having an incredible image that you may not have in any of your other ads. And those are awesome, I love them.

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How does your strategy differ for headline search ads versus the regular ads?

Ed: So, with headline search ads, there is always a chance that they will not convert as much. When it comes to someone that has a brand for instance, a headline search ad may mainly just be targeting their brand name and some of their primary products they are trying to advertise. When it comes to something like a normal sponsored product ad campaign, I may be thinking about like just the type of keywords that will convert. With a headline search ad, it’s more building up that brand awareness.

And I go into it knowing it may not convert at the same type of rate that a sponsored product ad does just because I am advertising more products at a time, and it is kind of going out to a somewhat possibly wider audience. So, every time I do this for a new client I do say hey, just giving you a heads up, it may not convert at the same rate that you are used to with your sponsored product ad, but this is going to help you build that brand and help you show up for these other searches.

And you can also use headline search ads more to target competitor brands. That’s something that you can’t do as much with sponsored product ads. Like if I’m selling an apple slicer and my brand name is Edwards best apple slicer ever because that’s a really good brand name by the way, nobody can take that from me. And let’s just say that Joe over here has Joe’s best Apple slicer. If I’m doing a sponsored product ad campaign, and I have a manual targeting campaign running, and I’m targeting his brand specifically, I’m not going to convert as well possibly just because I’m just going to have the normal ads that show up. It’s just one image.

But if I’m using a headline search ad, and I’m targeting my competitor brand names and other competitors that are in the space or like products, and I’m targeting to show up for the searches with a headline search ad, I’m providing more value to the potential customer that’s coming through on Amazon. And they’ll see that and they’ll see this is like another option to the product; they’re going to see the awesome lifestyle image. They’re going to see the headline, they’ll learn more about the product right there. And then also they’re going to see three different images of possibly other products that I’m offering as well.

So they can be used more for a competitive strategy. There’s actually a lot of clients that I’m working with right now. There’s this one product on Amazon, this one brand that I swear targets every brand on Amazon. It is crazy. And of course, I can’t speak about it, but they’re just they’re very competitive. But it’s actually it’s really astounding on how wide their competitiveness is because they’re using these headline search ads to show up like that.

Steve: So you keep mentioning the word brand with headline search ads, so does that imply that you’re willing to break even or take a loss on these for the sake of branding or is the strategy basically still the same in terms of profitability for these ads? I mean, obviously you want to be profitable, but is the strategy different or is the purpose different?

Ed: So, I would say the purpose can be more focused on brand because like of course you have to have Brand Registry 2.0 to actually have headlines search ads. So Amazon is doing this more in the fact of building out these brands. And my stance just my personal stance on headline search ads is more of like breaking even to some profit, but I usually use these to really just kind of target outside of the normal ads that I’m really running. So, I usually go into the space like with a mindset of knowing okay, this won’t be as profitable as the normal sponsored product ads normally, just because I’m trying new things like trying to target competitors, and trying to really go out to these other types of products that are on Amazon.

But I mean, like really that being said, if I have a headline search and I’m only targeting my brand name, I’m going to have an ACOS of like 2 or 3%. And I’m going to have awesome profitability because people are searching for my brand and they had this beautiful ad come up, they’re going to click on it, it’s going to convert more than likely. So it really does depend like how competitive you’re being. If you are just using a headline search ad just kind of the same way that you would for a sponsored product ad like just targeting like apple slicer or apple peeler or whatever like that, you can still kind of see the same type of return if you’re being kind of really I guess cognizant of what your current bids are and where your range is.

You definitely don’t have to go negative when it comes to headline search ads, but really like my team and I we use this to really branch us out and to not steal traffic because that’s such a bad word to use steal, but to really try to enhance our brand by reaching out to other potential clients that are – sorry, potential customers that are used to other brands on Amazon.

Steve: Sure.

Ed: So I do kind of, I say that this can be a little less profit usually or it may just be more of a break even just because I want to build up that brand and kind of show people what the brand is capable of.

Steve: So, if you’re targeting other brands, does that imply that the copy that you use is a little bit different as well, like do you compare yourself to the brand, or do you use reviews like that?

Ed: So really know no. Amazon is picky when it comes to the headlines that you use honestly, like the headlines can’t do any claims that you can’t back up. You can’t say like world’s best or the one and only, or proven the cure of cancer or anything like that. You can’t do anything of that nature in the headline or it will be really denied. So like I usually just use the headlines to just say like just a little something about the product, like stay sharp and [inaudible 00:32:57] or something like that, or I don’t even know if you can do guarantees like money back guarantee. I don’t think you can even do that. But I do something like that.

So right off the bat, someone already sees some type of added value to the product that I’m presenting. And they really learn right off the bat exactly what my brand and my product is about. But one of the cool things about headline search ads is like all the ones that I’ve ever gotten created and then they were denied and shut down by Amazon with an iron fist, I was able to actually open up a case with Amazon and talk to them about it and they told me exactly why it was denied and what I need to do to fix it, and then I can normally actually resubmit it and it’ll get approved.

So, usually it’s like a lot of times I tell people to go into it having like five or six different headlines setup and of course split test them, if they all get approved, have them all running simultaneously, or try them like on and off to see what headline converts the best. But that headline is like one of the first ways to kind of throw out the hook for somebody potentially coming to your brand and coming to buy your product.

Steve: Okay, okay, what else you got Edward?

Ed: So, one of my all time favorite tips man is the product placement reports, and what this actually is, this is — it’s not really a hidden report but it’s one a lot of people don’t know about. It’s actually report that shows you which ad is getting the top of page placement and if they’re converting. And what this is really used for I’ll kind of back up a little bit is a lot of people are asking me about bid plus and they’re like hey, is bid plus worth it? Should I turn on bid plus? Should I let Amazon just take my money? Should I tell Amazon I’m willing to spend more? Amazon already gets all my money, man Amazon takes a lot of my money, that’s coming out here honestly. So my answer…

Steve: Actually if you want to back up and explain bid plus first.

Ed: Yeah. So bid plus is really something that you can turn on at a campaign level. And what it does is it says okay Amazon, I’m willing to allow you to raise my bid up to 50% so I can get that top of page or middle of the page placement on page one for your campaigns that you have running. And the kind of the theory behind this is if your ad is at the top of the page, or actually like kind of like middle of the page sometimes to those are the two that convert really well, then you’ll get better conversion rates because it’s showing up first, it’s kind of blending in with the other top of the page products, the ones that are ranking organically and you’re just telling Amazon, you know what, I’m willing to spend more because I feel like my product will convert if I’m getting that top of page placement.

And so, one way to do this is just say, heck yeah, let’s turn this on all the campaigns, and see what happens. But that’s not my way of doing it because I’m very analytical. I want to see some numbers behind it. So there is a report that you can find in your ad reports. It’s a sponsored product ad placement report. And what this does is it shows you the campaigns that are running in a certain time period that you have chosen, and it says okay, this one was at the top of the page, or this one was other. It says other page, it doesn’t say like bottom of the page or page seven. I would love it if they did that but it just says top of page or other placement.

And what this allows you to do is it allows you to see if campaigns that have that top of the page placement if they’re converting better, if they’re actually providing the return that you want. And this is really awesome because then you can say okay cool, on average campaign X, Y and Z really do convert better whenever they are at the top of the page. And if that’s the case, I will turn on bid plus for those campaigns. And this is just kind of giving me more, I guess it’s backing up my idea more, it’s telling me okay, there actually are numbers to back this up.

I can see that this actually is going to work out, and I will turn on bid plus because that will tell Amazon okay, I’m willing to spend more on these campaigns because if it is at the top of page placement, it will lead to better conversions. And of course you’re happy about it because you’re getting those conversions. The customers are happy because they actually do enjoy your product but especially Amazon is happy. One thing that I see a lot of people get upset about is Amazon spends all this money; they try to drive conversions yadi yada. Amazon is doing that for the customer.

So I want — you will understand that you’re willing to spend more because you’re willing to actually get your product to a potential customer on Amazon. And if you can back that up with data and see okay cool, I’m at top of the page, and it converts well, I’m willing to spend that extra money to get that top of page placement. And of course it really is a great way to do that to get you kind of a wider range of people looking at your product.

Steve: So, what has been your experience with bid plus because you deal with so many clients, in general what has been your experience versus just increasing the bid altogether?

Ed: So really, it’s just, it gives you more control I guess, and it doesn’t make its way out to do things a lot more manually. Of course you can go in there, and you can look at your campaigns, you can see if you have like a swell up and conversions that you want to increase your bid, but really bid plus is nice because it’ll kind of somewhat guarantee that you’ll get that top of page placement if possible, or the middle of the page placement. And I keep on saying top of page or middle of the page because Amazon actually does give you kind of both of those placements for bid plus because it is where the highest conversions happen across the board.

But it just makes it more automatic. You don’t have to constantly be monitoring things like that. Of course, you can still go back and look at this ad placement report, and see if you’re still getting conversions at that top of page placement. But it really is just an easier way to do this without having to manually adjust bids or like…

Steve: Got it.

Ed: It’s on a keyword level, or do it like at a campaign level and then just be like, well, I just wasted all this money. So this allows you to really get more of like a peace of mind knowing that it actually will potentially lead to more conversions for you.

Steve: Okay, so I mean your basic strategy is look at the product placement report, find out the ones that are converting well when they’re at the top and then just turn on bid plus for those?

Ed: Right yeah. And I’d say especially for like whenever you do have like a holiday coming up, or if you have a very seasonal item. If you are really like focusing on like just three months of the year, even just one month of the year to make up all your sales, you may want to do this for your advertising just because you want to capitalize on that traffic, especially in Q4 or like if there is just like some sale that you’re running for a day, you may want to pop bump that up to the top of the page, that can kind of give you more visibility as well.

So, yeah, bid plus, I used to actually not be a fan of it, because I was one of those guys. I was like, Amazon wants my money. Amazon wants to spend all my money, but then I was like, wait a minute, if I can actually justify this with metrics from a report then heck yeah, I’ll go ahead, and do that. That makes 100% sense to me.

Steve: I mean you were just talking about the holidays and that’s actually a good segue. Do you do anything different as like prime shopping seasons start?

Ed: Yeah, I mean, so prime shopping is amazing. I mean, the holidays are getting bigger and bigger on Amazon even like they have things like Prime Day I know, then just Q4 is especially huge. I turn up the aggressiveness leading into like those time periods especially for when it comes to Q4 I’ll probably be starting that in August I’ll be honest with you.

Steve: Interesting okay.

Ed: The real reason why I say that is because we want to have as much organic data before Q4 hits, before q4 takes off so we can know what the traffic was like beforehand. And so, a lot of the different tactics that I use is I will kind of blow out the budgets so we have more room to get more traffic in a day. Also be more competitive with the bids, I will increase the bids, but it’s just like a one day event or something like that. I will possibly double the bids, and then also double to triple the budgets possibly. And that’s just because it makes sure that my ads won’t run out of budget because if they run out budget then next thing I know, I’m not being advertised and I cry and I can’t sleep at night.

So, I opened it up and I make sure I have that room to spend more. I do have to kind of change the mind frame and have to explain this to the clients is like, hey, we’ll be spending more, but you will see higher conversions because people are willing to spend, they are in the mood to spend, and I will just double or triple the budget and same thing with the bids too. This is also a good time to use that product placement report to see if I want to turn on bid plus for some of the campaigns as well, because if they’re converting well normally, I definitely want to have bid plus on when it comes to the holidays too.

Steve: So the reason you start so early in August, is that because you’re trying to increase the sales velocity leading into the holiday season as well?

Ed: Yes, so definitely just like showing the increase can help with their algorithm and help you with your ranking organically too. And it is harder to do things like launch your product around the time of the holidays because you’re still trying to index for certain keywords and you’re still trying to find out what Amazon thinks your product is. That’s why I say people, telling everybody now optimize your listings, optimize your listings before there’s millions and billions and trillions of people on Amazon looking at products, because if you’re still showing up for the search for a bicycle and you’re selling an Xbox, then something is wrong and you’re going to lose a lot of traffic.

So, that’s why we start so early, because we can see what the normal traffic trends are. We make sure we’re showing up for the right types of terms in our auto targeting campaigns. And we also really want to make sure that our manual targeting campaigns are targeting the correct keywords that are normally converting. And then as we roll into Q4, like in the holidays or any type of events, then we can just kind of blow that out because we have the data to back it up. We’ve seen it work organically before and also just with our normal sponsored product ads, and then we go into it with more confidence because we’ve already done the research, already targeted the keywords that we want to target. We’re already looking to get better results right off the bat because we’ve already done the hard work beforehand.

Steve: Okay. I know it at the Sellers Summit; you mentioned some of the more advanced tactics like day partying and that sort of thing. At what point do you start doing that last I guess 2 to 3% of optimizations?

Ed: Yeah. So I mean, day partying honestly, that’s something that I would do, I would prepare for that especially before you hit something like Q4 or any type of holiday because day partying if anyone that doesn’t understand that, that really is something where you’re running your campaigns at a certain time of day. It’s not just having them run all day so their budget runs out; it’s allowing them to run at only the best time of day for you. Before we actually put this into our tool, this was a very, very manual process.

You had to actually manually go into Seller Central and pause the campaign at a certain time of day and then go back in and re-enable it and it was easy, and I had some people that did that, and I was like you guys awesome. You’re very, very meticulous and I love it. But you have got to get some sleep man, because you’re waking up to turn on and turn off your ad. So we’ve built this into Ignite, the tool that we offer, and it allows you to just set the time of day where your ads are going to run. And this means it will actually enable the ad at that time of day and then will end the ad at the time of day that you specify, because we see that everybody’s budget resets at 12 midnight on Pacific Standard Time. And most people’s budget runs out by 9am PST.

And that just goes to show that people are not really doing the research. They’re not seeing what time of day their campaigns are converting the best and they’re wasting their budgets. So, what I usually suggest is, this sounds like a lot of work, but I promise it’s not. You create multiple campaigns, let’s just say you create 24 campaigns and they’re all running for one hour of the day. And this allows you to really see exactly what time of day your products are getting the most traffic but also converting the most. So you can create the exact same campaign 24 times or even just 12 times, have it 12 times being two hour segments. And this will allow you to see what time of day is best for that product.

And instead of Ignite, we actually do have a copy campaign button so you don’t actually do this yourself. You can just have one created and copy it and you can actually choose the day, the time of day that you actually want it to run. And after a week or two, or more like two weeks, you will have some usable data that shows you okay, at five or 6pm PST, I get the most conversions. So, I may want to make sure I’m really focusing on my traffic, on my campaigns towards the latter part of the day, because that’s where I see most of my conversions. Most of the traffic actually coming through is doing well for me, and I may not want to run it in the morning.

And this also helps out if you have like a very, very odd product that only sells at night. Like if you sell coffee, honestly, this can be something as well. You may see people buy coffee more in the morning, or they may buy it at night because they realize, oh crap, I don’t have any coffee for tomorrow morning. This is terrible. How am I going to get through work? So you can actually see that trend and that’s one thing I really like too is like you can actually see trends in a way that Amazon doesn’t really provide you a way to see that yet.

Steve: So, have you found that the bids are cheaper at night then since everyone else has blown their budget by then?

Ed: Yeah, honestly, I’ve definitely seen that. Normally I do see that bids do go down from like — we see like most conversions from what we’ve seen happen around three and like towards the evening like six or seven or so because people are actually off work and they’re coming home and they’re eating and then they’re going on Amazon and buying stuff. So, we usually do see that normally people will just leave their budgets wide open and they their campaigns running and people do start running out of budget early in the day, and then as time goes on, since there’s less people bidding on those keywords that you’re going after those bids drop tremendously.

That’s also a good reason to always have an auto targeting campaign running because you can pick up on that traffic where people just aren’t bidding anymore, and you can get some really cheap clicks for like 20 to 15 cents and then you get a sale and you’re like, heck yeah, my ACOS is 1%. This is wonderful. So like I really do see like towards the end of the day that people do tend to have cheaper cost per clicks on average, and that really is just one of the times that you want to capitalize on for sure.

Steve: Okay. Hey, Edward, I wanted to give you guys a chance or give you a chance to talk about Ignite, and then your versions that are coming out because we’ve already been chatting for 40 minutes. So, I just want to say for the listeners out there, I’m using Ignite right now to manage my campaigns and I’m kind of excited with some of these new features. Ed, you want to elaborate?

Ed: Yes. So everybody, Ignite has been revamped. It is currently out, it’s wonderful. In the previous version of Ignite, it’s awesome because it helped you analyze your campaigns. You could do things such as day parting, then it could also get suggestions based on a target ACOS that you have, and this kind of is just like having a mini me or something inside your account saying hey, you should do this or hey, you should lower your bid here. And what we’ve really done, we’ve really taken that and we’ve enhanced it. The biggest update I think first of all is just the UI.

It looks beautiful now, it’s a lot easier to navigate and find out exactly what’s going on inside of your account. The suggestions are easier to see, they’re easier to understand exactly what’s going on with the suggestion and why Ignite is telling you that. And also there’s more bulk uploads and more bulk changes. So you can do things on a greater scale a lot easier. We had a lot of requests for this where people were having to go through and do things on a keyword by keyword basis. And we’ve actually opened it up so it’s a lot easier to do for more keywords at a time. And really, it’s just like I said before, it’s beautiful. It is a good looking tool. And I can say that for sure.

And then on top of that, we actually rolled something else out. It’s called Ignite Plus. And Ignite Plus is actually aimed for agencies or people that are managing multiple different sponsored product ad accounts simultaneously at the same time. And this is really awesome because you can actually add all the accounts with no problem, but then you can actually set up sub accounts. So then that way if you’re an agency and you only want Johnny to see let’s say Nesquik’s account, I don’t know why Nesquik is on my mind, but let’s just say you only want John to be able to log into that one account, you can now do that.

That way you don’t have to have all your employees going into all the accounts and possibly messing with something else that someone else has done, it allows you to grant access on that level. And also, one of my favorite things is monthly spend notifications. You can actually go into your account and set up monthly spend notification, because even like on my end, a lot of clients want to stay within a certain budget on a monthly basis. And I can know when you’re getting to a certain percentage close to that monthly budget.

So, lots of great updates have come out. I am a huge fan of the tool. It’s even better than it was before. And I definitely want everybody to check that out, and really just tell us what you think. And definitely reach out to us and tell us if there is anything else that you want or anything that you have as feedback on the tool. We definitely love to hear it.

Steve: Yeah, I know that if you’re running ads on Amazon, you pretty much need a tool. Now Ignite just happens to be the one I use and there’s other ones out there, but the interface for Amazon is just kind of clunky, and you really need something to help you run your ads. It just makes life so much easier.

Ed: It does.

Steve: Anyway Ed, I just wanted to thank you for coming on the show. As always, you deliver lots of value and I really appreciate you speaking at the summit this past year.

Ed: Well, I definitely appreciate you. Like I said, I really enjoyed that conference. I would love to come back whenever I can. I definitely love nodding out with someone about PPC, but people please do not hit me up like at 12am to just talk about PPC because I’ll do it, so you can always hold me to that. But thank you very much Steve for having me on, and I really look forward to speaking with you soon again about PPC as it advances as time goes on. So thank you again.

Steve: Yeah, it sounds good Ed. Take care, man.

Ed: All right. Do the same.

Steve: Hope you enjoyed that episode. Once again there are a lot of people out there that teach Amazon sponsored product ads, but Ed is the one guy I know who actually personally gets his own hands dirty on a bunch of different campaigns. For more information about this episode, go to mywifequitherjob.com/episode221.

And once again I want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful, and you can basically trigger custom pop ups for any parameter that is closely tied to your e-commerce store. If you want to give it a try it is free, so head on over to Privy.com/Steve, once again that’s P-R-I-V-Y.com/Steve.

I also want to thank Klaviyo which is my email marketing platform of choice for e-commerce merchants. And next month Klaviyo is holding a two day conference for over 400 e-commerce marketers and store owners with an awesome lineup of speakers. They’ve got experts coming in from Shopify, BigCommerce, Google, Octane.AI, Recharge and top e-commerce agencies plus panels with successful Klaviyo customers and a keynote address by Ezra Firestone. You can find out more about this conference at K-L-A-V-I-Y-O.com/Boston.

Now if you’re interested in starting your own e-commerce 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. 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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220: Why I’m Giving Away $50,000

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220: What Is The 5 Minute Pitch?  Meet The Judges For My New Show

Scott Voelker of The Amazing Seller, Greg Mercer Of Jungle Scout, Mike Jackness of EcomCrew and I are launching a brand new show called The 5 Minute Pitch. What is the 5 Minute Pitch?

It’s a Shark Tank like show where we’ll be giving away 50,000 dollars to one lucky business. 32 companies will be selected to pitch Greg, Scott, Mike and I and the winner will be selected on a live show with all of us.

It’s going to be an awesome show and we’re going to start filming in the fall.

If you are interested in submitting your business, head on over to 5MinutePitch.com.

Click Here To Sign Up For The Chance To Win $50,000

What You’ll Learn

  • How to become a contestant on 5MinutePitch
  • The judges criteria for picking the winner
  • How to become a sponsor of the show
  • The details of how the contest is going to work

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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.
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Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and dig deep into what strategies they use to grow their businesses. And today I’ve got Scott Volker of the Amazing Seller, Greg Mercer of Jungle Scout, and Mike Jackness of EcomCrew to talk about a brand new show that we are all launching together this fall. It’s called the 5 Minute Pitch, and it’s a Shark Tank like show where we’ll be giving away $50,000 to one lucky business. And in today’s podcast episode, we’re going to talk about the criteria for the companies that we will be selecting along with more details about the show.

But before we begin, I want to give a quick shout out to Privy who is a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now, what does Privy do? Well, Privy is an email list growth platform and they manage all of my email capture forms. And I use Privy hand in hand with my email marketing provider. Right now I’m using Privy to display a cool wheel of fortune pop-up. Basically a user gives their email for a chance to win valuable prizes in our store. And customers love the gamification aspect of this, and when I implemented this form email sign ups increased by 131%.

Now bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve, and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ For 15% off. Once again that’s P-R-I-V-Y.com/Steve.

I also want to give a quick shout out to Klaviyo who is also a sponsor of the show. And I’m always blessed to have Klaviyo as a sponsor because they are my email marketing platform that I personally use for my e-commerce store, and I depend on them for over 30% of my revenues. Klaviyo is the only email platform out there that is specifically built for ecommerce stores and here is 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 last week, easy. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they purchased, 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 could 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 to 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 Mike Jackness, Greg Mercer, and Scotty V on the show. These three guys are my partners in crime for a brand new show that we’re starting called the 5 Minute Pitch. Now what is the 5 Minute Pitch all about? It is basically a Shark Tank like show. We will be giving away $50,000 to one lucky business. 32 companies will be selected to pitch all of us, and the winner will be selected on a live show with all of us. Anyways, in case you guys don’t know who Greg Mercer, Scott Voelker, and Mike Jackness are, we’re going to take some time today to kind of get to know the judges a little bit, their backgrounds, and how the contest works. So what up fellows?

All: Hey, hello.

Steve: So what’s interesting about the 5 Minute Pitch is that all three of us, or all four of us, I should say, have completely different personalities and backgrounds. And so Greg, why don’t you talk about how the content is going to work and how the application process looks like?

Greg: Application is open right now at 5MinutePitch.com, and it’s open to all bootstrapped online businesses. So if you’re selling physical products, or info products, or have a software company or a membership site or anything else online, and you are bootstrapped, then this competition you are eligible for. So you’re going to go online, you’re going to apply for it. We’re going to choose 32 contestants which will be narrowed down to eight. Four of those people will then fly out to pitch to us live and one winner will be chosen for the $50,000 prize.

Steve: Cool. And in terms of the criteria for the people who are applying, well, that’s Scott here, what are some of the criteria that you’re looking for in some of the brands that are going to be applying?

Scott: Yeah, I mean, my biggest thing is the people, right? The people behind the brand, what the mission is behind the brand. It doesn’t have to be like it has to be this fantastic like mission but it’s got to have some purpose, right? I want some purpose behind a brand that we’re going to be working with. And I think just, I want them to have some type of direction already. I want them to have some type of definitely forward motion, right?

Like we want some movement, since we’re here we can turn some dials and flip some switches to make their business even better. But I want them to, number one have a story of some kind, or the reason why they decided to do this. And then from there, I also want them to have some type of plan of what they would do with that $50,000 to help them really get that extra boost.

Steve: And what would you say is like the most important factor and what you’re looking for Scott in deciding on a winner, or who advances to the next round?

Scott: That’s a tough one. I mean, I think the one thing like I said, is I want them to have some momentum. But also I want them to have like I can see that if they did have that 50,000, or even just 50,000 and a little bit of mentorship, which we’re also going to be giving, if I’ve seen that that’s all that they really needed, that’s what I’d be looking for. Because I mean, in all honesty, we’re looking to be able to go back to these people six months or a year and say, how did it help you, and they’re like, wow, three extra, 5X to my business. And now I’ve got this business that’s grown because of being on the show and then that little bit of help, and also that extra money. So I guess that would be it.

Steve: What about you, Mike?

Mike: Yeah, I mean, Scott stole my thunder, those are definitely things we’re looking for. I’m looking at some of the other people that we looked at from the previous iteration of this, when we did this with Greg. The things that I thought that were — that really shine were personality, but it’s already covered. I mean, I think that people that resonate well with the audience that’s going to be listening to this, people that are highly motivated, that put everything on the line.

My favorite story from that was a guy that just received the six figure, a real estate commission and put all that into his product, just like all in and it was just like, he didn’t just like order a 500 sample size order, he ordered like a full container of his product. And he was just like, now I got to figure out how to sell those. Having some type of side story like that was really cool. One of the other people that got really deep in it was a couple that the guy was a military, ex military and military family had been moving around and stuff. And they had thought of this idea during that time. So having that is really cool.

As Scott was saying, having something that you could really use our help with this. I mean, not having a company that’s already super well established. We’re not looking to invest $50,000 in the company, and own five or 10% of it, or whatever it might be. This is a gift or a grant, whatever way, which way you want to look at it. And we’re looking to help someone where this is going to make a monumental difference in their business and their lives. So those are the types of things that I would be looking for.

Greg: Speaking of different personalities Steve, I’m looking for some numbers in this business. These guys are looking for the personalities behind it, and the story behind it and stuff. I want to know some numbers about your business, how you’re acquiring customers, what’s the cost per acquisition? And what are the unit economics per sales, how scalable is this, how big is the market? Those are some of the things that are going to be looking for when I’m choosing who to move on to the next round.

Mike: Yeah, it’s actually a really great point. Because I remember one of the businesses that really turned me off, one of the things that turned me off when we did this before was someone that wasn’t going to disclose some stuff. So I think you got to be ultimately like pretty transparent when you’re coming in and doing something like this.

Steve: So if you guys were to kind of rank based on your own personalities, the product, the team and the numbers, how would you rank those three in determining which business goes to the next round?

Scott: Well I think…

Mike: Go ahead, I was going to say, I’ll go first. But I’ll let you go first.

Scott: Go ahead. Go ahead. I don’t want to steal anything from you. Because I’ve got some things that you might like go, oh Scott, you stole it from me?

Mike: I only got, I said I’m to answer one of three things here. This is a simple question, but I do think ultimately, the product is probably the most important thing. I mean, as much as people are cool, it is a business. And I think that if you have something that’s really unique, and it can become a seven or eight figure business, I think the product is probably the thing that I would pick over the other stuff.

Scott: And I was going to say product.

Mike: So I wasn’t stealing your thing.

Scott: But I have something to add to that. I don’t think it’s just a product, I think its products. I think it’s figuring out other angles that you’re going to because sometimes you find that ceiling on that product, that you’re only going to be able to go so far. So if we can have other products in the product suite, or actually a plan of other ones that they want to add, but they can’t fund them for whatever reason, that actually is really important. Because now we can say, well, yeah, if they got two more skews in their lineup, their audience is going to want that.

So yes, you have to have a good product. If it’s not a good product, like we’re not going to be like, oh, yeah, like, sure your numbers are okay. But it’s not going to work because we know that it’s a trendy thing, right? It’s a fidget spinner that’s going to go away. So it’s not just the numbers, it’s actually the product, the market trend. I think so we’re looking at those things. But like Greg said, we are going to be looking at the numbers because the numbers help us decide if there’s something that can be done here or if you take the money and you apply it that you will see growth. But yeah, I do think product is a big one.

Mike: Probably the best example of how product is really important, no matter how you look at a handkerchief, you still can’t make Steve Chou cool.

Greg: I’ll have to go out and say that all you guys are wrong.

Scott: Oh, Greg just said we are wrong.

Greg: Product is the least important out of these three.

Steve: I have to agree with Greg.

Greg: The numbers are the most important, then the team, then the product. I don’t care what your product is. You can have some weird membership site or some I don’t know, like weirdo physical product. I don’t care about any of that. If you’re acquiring customers for inexpensively, they have good margins, you’re making good money on all this, the market is big enough, I don’t care what your product is. And then the team is the second most important to me, because the team are the people who are able to make this work, they are the ones that are able to acquire the customers; they are the ones that are able to sell the product. So if that product were to go where they are more likely to be able to do it again. So I say Steve, numbers, team, and number three, product.

Steve: Mm-hmm. For me, I always like to say that the first part — Okay, we didn’t go down the structure, right? The reason it’s called 5 Minute pitch is because we’re going to have 32 people and we’re going to limit their pitches to five minutes. And we’re going to do a hard cut off, and we’re all going to have buzzers and we basically buzz people into the next round. So for me, I would say the product is probably the most important in getting past the first round. But then once you get past that first round, I think it’s all about the people.

And here is why. I think even if you have a product or the numbers aren’t that great, or they should be good, but even if they aren’t the best, I think ultimately, if you have the right people, they should be able to pivot around that problem, solve all their problems in advance. So you want people at least the way I’m going to be judging it is how flexible they are, how open minded they are to try new strategies and that sort of thing to grow their business, even though they might not have the strongest product at the present time.

Scott: All right, well, wait a minute here. Wait a minute here. So, okay I’m going to challenge that Greg. So, I’m selling a fidget spinner. I’m doing awesome by the way. And that’s all I am. I’m just selling it to that audience, right? Who is the audience? I have no idea. It could be these kids spinning this thing. And yeah, I’ve got a great a great crew that can find other potential products. But I’m always chasing that product. So I don’t see the clear path. So that to me, for me personally, again, everybody’s different, that’s a little bit riskier.

I’d rather say you’re going in the bass fishing market. And in that bass fishing market, I know that now and 10 years from now, I’m going to be serving that market with these different products versus saying, like, I got to figure out that next Hatchimal thing, right? So I’m not looking at the trend necessarily, like that would for me personally, I wouldn’t want to invest in that. So, I would be challenging you that on the panel, my friend.

Steve: Just to be clear, we are not investing in any of the companies who pitch, the $50,000 prize is a gift,

Scott: That’s true. Sorry about that. Did I say, invest?

Steve: I wanted to make that clear.

Scott: Okay, but if I personally was, I meant that, I meant that if I personally was taking my money and throwing it in a business that I’d be looking at those things. But anyway, go ahead Greg.

Greg: What’s important to me is that a team has been able to find a niche or a product or whatever else and it has been able to make it successful. So for me personally, Steve talked about earlier, different personalities on the board, I don’t really care what your product is, or if I see that this is a long term niche that I think is going to be highly profitable or viable for long term. What’s more important to me is just that you’re making it work now and you’re the team that has assembled this and make it work. And just as a reminder everyone, we’re not just talking about physical products businesses here, info products, software companies, membership sites, any type of online businesses are eligible to pitch to us during the 5 Minute Pitch and we encourage you to do so.

Steve: Cool. Mike you’ve been silent here which is unusual.

Scott: He doesn’t want to get involved.

Mike: It’s your show man I’m…

Steve: I just want to take a moment to thank Pickfu for being a sponsor of the show. If you currently sell on Amazon like I do, then you know how crucial the quality of your Amazon listing is to the success of your e-commerce business. So for example, I’ve run experiments on my Amazon listings, well simply replacing the main image with a different photo resulted in a 2x increase in conversions. But how do you choose the best and highest converting photos for your listings? How do you know that you’re using the most profitable images for your products? And how do you know that your bullet points are convincing. This is where Pickfu comes in.

Pickfu allows you to solicit real human feedback about your Amazon listings in 10 minutes or less. And you can target the exact demographic of your end customer. So for example, let’s say you sell napkins and you have two main product images that you want to test. You would simply go to Pickfu, list the images, target female Amazon Prime members over the age of 35 and hit go. Within 10 minutes you’ll get feedback of which image people are more likely to buy along with specific feedback on why they made their decision.

In fact, I’ve used Pickfu to almost double the conversion rate on several of my Amazon listings by testing my images, bullet points, and product titles. And what I like about Pickfu is that you get results quickly unlike traditional split testing, and you can use this to test book covers, landing pages, basically anything. Not only that, but it’s super cheap to run a poll and right now you can get 50% off your first poll by going to Pickfu.com/Steve, once again, that’s P-I-C-K-F-U.com/Steve. Now back to the show.

Scott: So can I add one more thing?

Steve: Go for it yeah.

Scott: So, my thing is here too, and again, I think we’re all looking at this not just as collectively, we’re looking at it as if Greg was going in business with someone, what he look for and what would he feel comfortable in? Me personally, if I had someone that had a strong presence in a market, that’s really the first thing that I would look for, if I could choose. So, if someone already had a following, someone already had a list, I know I can sell them pretty much anything. It’s like you’re an influencer now in that space. So, if I’m in bass fishing, and I’m known for bass fishing, I know I can pretty much sell anything to anyone about bass fishing.

So and I honestly think that I could personally help someone at that level. Not saying that that’s the only requirement, but I’m just looking at in that direction versus of, okay, I have a team that can go out there and build this thing. So then I know that they’ll replicate it in another market. Makes sense?

Steve: So, the product doesn’t matter as much to you so much as the platform.

Scott: Yeah, yeah, I guess if they’re already doing physical products, and they’re really good at it, then yeah, what Greg is saying is 100% true, right? They can adapt that to another market for sure. But I’m looking at it as like a runway for the future for this business, right. So if they’re specialized in a certain market, because that’s what they’ve been known for and they’ve spent all that time and everything into that, that shows me that they’re going to be able to just keep going down that path. Versus them pivoting and saying, okay, now I got the money I’ve already figured out over here. Now, I’m going to figure it out over here into crochet or crocheting or whatever, right. So that’s what I’m saying. That’s the difference for me.

Mike: I think the thing that’s cool about like having this group and doing this is that we all look at things a little bit differently. And this is what made all the cool debates at the end. So I’m looking forward to getting the pitches and us debating at that stage of what makes a business worthy to move on to the next round at that point, or ultimately win. And a part of this, we’re also going to open it up to the audience. So, I think when it gets from down the eight people, we agree, we’re going to do a round of audience participation to get down to that final four so we have a little bit of everything.

So, I think that the business that ultimately wins is going to be really well rounded is what it comes down to. They’re going to have more than one competitive advantage than kind of like, they’re not going to just have a great product, but probably a great team and also have good numbers.

Greg: And a huge benefit of entering this competition, even if you’re not the one to win is you are going to get feedback from the judges along the way. It’s like, hey you know what, you weren’t selected to go on the next round, but if I was you, I would change this or that and keep doing this thing and focus more on that. So everyone gets a certain level of mentorship from the judges, even if you’re not selected to be the winner.

Mike: Yeah, you also get exposure for your business. I mean, I bought a couple of the products from the Go Pitch Win stuff. I mean, they were we’re cool things. And not only — one of the products I bought just to like help them out. I was like, they’re cool. So I want to buy one. And one of them was something that I wanted myself. So you get exposure, I mean, all of us have really large audiences. And you’re going to get exposure as a business to a bunch of people as well.

Greg: Actually the message I heard when I interviewed them for the winning episode, they said that their sales have been through the roof ever since the Go Pitch Win episode went live. Also another huge advantage of pitching.

Steve: Yeah nice. And just a couple of notes on the application process, you will be required to submit a video. And what I encourage you guys to do is just be very natural in the video, tell your story, expose your personality, just like let it loose and act yourself. Because the applications that we will tend to accept will be those that have the most personality in addition to the product and the numbers and that sort of thing. And Greg just mentioned that he had a previous show called Go Pitch Win where the winner got a whole lot of new business. Well, that actually works for the sponsors as well.

All four of us, we have large audiences. So, if you’re a company out there, or you want to sponsor this show, feel free to reach out to me or Mike at Steve@mywifequitherjob.com, because we’re going to be putting a lot of episodes out, and these are going to go to all of our four combined audiences for a lot of reach. Anything else you guys want to add? Greg, about the application process, what you guys are looking for, how to actually get chosen to be even to take part in the actual contest?

Greg: Just to let you know we are recording this, this fall, starts fall of 2018. And once we’ve reached the 32 contestants for the first round, we’re going to be shutting down the application process. So, I’d encourage you guys to apply sooner rather than later, applications are currently open. Like I said, once we’ve received 32 that we really like, we’re going to shut that down.

Scott: And I would just also say, if you just want to follow along, like I think Mike had mentioned, or you did Steve, you can just sign up there as well and then you’ll be notified. And this will be audio form, but it’s also going to be highly production value, also for YouTube, and any other platforms that we post the video itself. And so again, applicants, you’re going to get exposure and also sponsors, you’re going to get exposure. And I think that’s also something just to touch on really quickly, Steve, maybe you can just add not anyone can be a sponsor, right?

Steve: That’s correct.

Scott: They’re only going to have to be or they’re going to have to basically be approved by us. But they also have to be ones that we believe in, or that we’ve used or other people that we know have used.

Steve: Absolutely, yeah, for the sponsors, just like normal for all of us, we’re going to be very selective about the sponsors that we choose in addition to the candidates. And one thing I will say is that we’re investing our own money into this, the $50,000 Prize. We’re hiring the camera crew, a professional crew essentially to film this and produce the podcast as well as the YouTube channel. And so it’s going to be a lot of fun.

It’s actually an excuse for me to actually get out of my house and get together with these guys in person, and actually to get to know and meet all the candidates out there. One of the reasons why I run my conference Sellers Summit, is so I can ask physically go out there and meet other people, mainly because when I first got started, it was a lonely process, guys, anything else you want to add?

Mike: I just want to say I’m looking forward to it. We did this with the old Go Pitch Win thing; it was a lot of fun. I already know we’re going to have fun and looking forward to doing it.

Scott: Yeah, I just think that people that are listening to this episode, and that will be watching or listening in the future, you’re going to learn something too even if you aren’t at this level yet. If you’re just starting or if you’re in the beginning stages, you’re going to learn from listening to these conversations, and also just how other people started their business and how their idea became. And like I think that’s an important part because people all think that they have to know that all the numbers are perfect before they pull the trigger. And I think that you’re going to probably be surprised at how these people started their business but also got the idea to really go into business for themselves.

Steve: And I will say, I’m speaking for myself here, but my filter is going to be off on this show. So, I’m going to like speak my mind, I think you guys will too. We got all four of us…

Scott: Time in [inaudible 00:22:01].

Steve: We have an interesting dynamic going on where…

Mike: I’m just curious why the filter on because I’m not sure I’ve ever seen that part of Steve. Like what am I missing here?

Steve: So if you guys want to apply, go to 5MinutePitch.com. It’s the number 5 and then M-I-N-U-T-E-P-I-T-C-H.com. And hopefully, from listening to this episode, you get an idea of all our personalities and how we kind of evaluate things. We all have an equal vote, so depending on how you put your presentation; you might want to try to cater to all of us in our criteria for selecting the companies.

Mike: One of the things we didn’t really talk about yet, talking about equal vote, you might be wondering about that since that was brought up, there’s four of us and how do we break a tiebreaker? And that’s actually, we have some guest evaluators where everyone can judge us I guess was what I was looking for coming on. We don’t know exactly who they’re going to be and we’ve already reached out to a whole bunch of them and we have commitments, but we don’t the full field now we’re down yet. But there’s some pretty cool guest judges that are going to be in here to help us break the tie, and I think that’s going to be another cool dynamic because that each week as we’re running these, there will be a different guest judge as well.

Scott: Good point.

Steve: Yeah, absolutely. And we’re not going to – are we going to announce those judges, the guest judges ahead of time? Probably not right?

Mike: I don’t know, we’ll see. We’ll see.

Scott: I think we got to figure that part out. So stay tuned.

Steve: Stay tuned.

Greg: Dah, dah, dah.

Steve: All right, so just to close, if you guys are interested in applying or just following along and getting news about the show when it comes out, go to 5MinutePitch.com. And if you are a sponsor who might be potentially interested in sponsoring this show, send me an email at Steve@mywifequitherjob.com, and I’ll send you a sponsorship packet. Hope you guys enjoyed this episode. Once again I am super excited about the brand new show that Greg, Scott, Mike, and I are releasing in the fall. And if you’re interested in pitching your company to us with the potential to win $50,000, head over to 5MinutePitch.com, that’s the number 5-M-I-N-U-T-E-P-I-T-C-H.com. For more information about this episode, go to mywifequitherjob.com/episode220.

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 flow, 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.

I also want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop ups for any primer that is closely tied to your e-commerce store. If you want to give it a try, it is free. So head on over to Privy.com/Steve, once again that’s P-R-I-V-Y.com/Steve.

Now, I talk about how I use these tools on my blog, 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.

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219: Practical Applications For Facebook Messenger Chat Bots With Ben Beck

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219: Practical Applications For Facebook Messenger Chat Bots With Ben Beck

Today I’m thrilled to have Ben Beck on the show. Ben is someone who I met randomly during lunch at Social Media Marketing World. I sat down at a table and Ben started talking about chatbots which is something that I’m really into right now.

Anyway Ben is an entrepreneur, marketing consultant and author of the weekly monthly column on the Clear Voice blog and today, we are going to talk about the practical applications of Facebook Messenger chatbots

What You’ll Learn

  • Practical applications of Facebook chat bots for large ecommerce companies
  • Practical applications for brick and mortar stores
  • Practical applications for digital marketing firms
  • The best tools for Facebook Messenger marketing

Other Resources And Books

Sponsors

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.
Klaviyo

Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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Pickfu.com – Pickfu is a service that I use to get instant feedback on my Amazon listings. By running a quick poll on your images, titles and bullet points, you can quickly optimize your Amazon listings for maximum conversions. Click here and get 50% OFF towards your first poll.

SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
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Transcript

You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not in business. And today I’ve Ben Beck with me on the show, and Ben is someone who I met at Social Media Marketing World and he’s a marketing consultant that specializes in chat bots. Ever since I decided to go all out on Facebook Messenger, I wanted to have Ben on to talk about the many different applications for chat bots that he’s been seeing from a wide range of industries.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. Always excited to talk about Klaviyo because they are the email marketing platform that I use for my ecommerce store, and I depend on them for over 30% of my revenues. Now Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here is why it is 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 out an email to everyone who purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they bought, piece of cake, and there is full revenue tracking on every single email sent.

Now Klaviyo is the most powerful email platform that I’ve ever used and you could 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.

I also want to give a shout out to Privy who is also a sponsor of the show. And Privy is the tool that I use to build my email list for both my blog and my online store. Now there are a bunch of companies out there that will manage your email capture forms but I like Privy because they specialize in e-commerce. And right now I’m using Privy to display a cool wheel of fortune pop-up.

Basically a user gives their email for a chance to win valuable prices in our store and customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%. Bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve. Now onto 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 Ben Beck on the show. Now Ben is actually someone who I met completely randomly at lunch at Social Media Marketing World. I basically sat down at a table and Ben just started talking about chat bots which happened to be something that I’m really into right now. I discovered that he was a speaker and then decided to have him on the podcast. Now Ben is an entrepreneur, a marketing consultant and the author of the weekly monthly column on the Clear Voice blog.

And today what we’re going to do is we’re going to talk about applications of chat bots in businesses of all kinds. And with that, welcome to show Ben, how you doing today man?

Ben: I’m doing so great, thank you Steve for having me on the show. I feel like it’s an honor because I listened to your podcast that you got a few weeks ago, where you’re talking about the technology that you used to run your business and it was fascinating. I’ve always loved marketing technology, and to hear how someone like yourself has used it to build a publishing business, it was just fascinating. So thank you for having me on your show.

Steve: Yeah, man. I’m just so happy that I went to Social Media Marketing World. I just met so many people just kind of randomly in the hallways too and you just happen to be one of those people.

Ben: Yeah.

Steve: So we did chat a lot about bots that day, but I actually don’t really know your entire background. Like how did you get into this field in the first place?

Ben: Yeah, so my undergrad degree was Business Information Systems and so the more technical side of business. And then I started my career actually as a web developer, so doing PHP code, building a website. That was before WordPress was big, so it was a custom built CMS that we had. And that technical side, I really enjoyed it but the company that I was at had a need for someone to apply that in the marketing sense. And so I started to apply it in marketing. And it’s blossomed from there where for three or four years after leaving that company I was working on marketing automation really heavily.

And then marketing automation the last year and a half, two years has really blossomed into chat bots. And so while I’ve been working for companies, I’ve also been doing a lot of side consulting and it’s given me experience with all these different marketing automation tools. And now getting into the chat bot space I’ve played with all of the big chat bot builders. Yeah, I love it. It’s just so cool to get to try new things and be learning and helping clients grow as I also grow in my own experience.

Steve: So just to be clear, like when you’re talking about chat bots, are you referring to messenger or are you referring to like text messaging and some of the other chat applications as well.

Ben: So I have only launched on Facebook Messenger, even though I’ve done some consulting for a client. They launched a text messaging campaign, and their whole business is around getting reviews, mostly for auto dealers. But they are a big review aggregator and they’re using chat bots instead of text messaging to do that, and they are growing hand over fist. They’re here and Utah with me, and this company is they are exploding in their growth because of their leveraging chat bots.

Steve: It’s interesting you mentioned like you’ve used all these different tools. What are some of your favorite tools just to kind of start it off right off the bat?

Ben: So my top four faves are ManyChat, that’s if anyone who’s done research on chat bots who’ve been around there, ManyChat is getting the most press right now. So ManyChat is the big one. Another one is Chatfuel. I like Chatfuel just because its ease of use is really good if I have a client who wants to build their own bot and they just want me to kind of teach them how to do it. A lot of times I push them to Chatfuel. And then the two other ones — so one used to be called API.AI, it recently well within the last several months was rebranded as Dialogueflow, and that’s Google’s product. They acquired API.AI and they’ve got a very robust tool.

Their tool is robust because you can build your chat bot once and release it in multiple places. And one of the really cool places you can you can release your chat box, so you can build the logic for a chat bot that would work on Facebook Messenger. And then you can take that same logic and roll over to an Alexa skill and actually lets you export the Alexa skill that you can then put on that you can then import over to Amazon’s developer tools. So, really cool stuff that I had I geek out on Dialogueflow, even though it is it is hard to use, you kind of need to be a developer.

Steve: It’s a Google product. So naturally, you probably need to know how to code right bit, right? You know, I actually jumped ahead a bit about myself — I jumped ahead a little bit in terms of chat bots. Let’s talk about what it is first, just in case there’s people listening out there that have no idea what is. And then I want to talk about some of the practical applications that you’re seeing some of the companies that you’ve worked with, and how they’re using these bots right now.

Ben: Great. So yeah, taking a step back to even I tell people I work on chat bots and their eyes kind of glaze over and they say, oh, really? Okay. Well, what’s that? Most of your listeners have probably used Facebook messenger to communicate with their loved ones, and a chat bot is when you interact with a business. And this can be from their Facebook page, there’s that blue button that hovers over the right sidebar on a Facebook page and you can click it. You just send a message.

If you send a message to a business and they reply instantly, then they’re likely using a chat bot. And it’s just an automated conversation that they’ve pre programmed to do certain tasks. I’ve got a business here in Utah that has a family fun center, and their chat bots are really simple. It’s only for frequently asked questions and for if people have questions about promos or hours, or directions to the location or the pricing per different activities at the family fun center. The chat bot can handle those different elements. So chat bots are…

Steve: What do they do if someone asked a question that isn’t part of the database?

Ben: Yeah, if they ask a question that isn’t part of the database and that happens frequently, the automated response says, I’m sorry, I don’t understand that but would you like to talk to a human. And there is a button they click, and they click that button and it actually places a phone call from their phone.

Steve: Ah, interesting. How is that implemented to place the phone call? Is it just built into these tools?

Ben: Yeah, all of the — I think all of the tools, the four tools out there, the ones I had started discussing, so Dialogueflow, Flow XO, ManyChat and Chatfuel, all of them have that natively built in where it’s just an option. You say, hey, here’s the button. If they click it, dial this phone number.

Steve: Awesome, awesome. So, the idea here I guess is the chat bot replaces or tries to handle the most frequently asked questions for business so that it reduces their support load in a way.

Ben: Exactly, it reduces their support load and it gives them some interesting insight. So, this company, they use Google Analytics and they watch Google Analytics pretty closely to see which pages are being visited, which search queries when they can see that are leading people to their website. And they watch all that data relatively closely to try to determine, hey, where do we need to improve our business? And the chat bot opens that up for them because now people that might have been reticent to reach out because they don’t want to wait forever for someone to chat bot chat back, or they don’t want have to call in and talk to somebody, now they’re getting people that are reaching out to them through an automated means and they’re getting that feedback.

They’re seeing what kind of questions people are asking, and they’re using that to actually develop content for their website. If someone asks a question to the chat box that they don’t understand, and they’re seeing that coming up multiple times, then they’ll go in and they’ll program that into the chat bot.

Steve: Interesting, so does that imply then that you need someone human to just kind of man this thing?

Ben: You do. There is a — I have a golf company Teesnap. They provide software as a service for golf companies to help manage the courses. They’re really innovative. Just last week, I helped them launch a birthday club chat bot. And the birthday club is it’s a really simple bot simply asking for birth date and then it helps fulfill the birthday club promise in the chat box. So on their birthday month, people get an offer to go out and get a free round of golf.

And it’s a completely automated process, but there’s still a human interaction there. The marketing director for Teesnap, super responsive, he jumps into ManyChat every single day and he just watches the conversations. And you can within ManyChat actually interact right there in a live chat module with the people that are trying to converse with your bot. So you can have those conversations right there inside ManyChat as well.

Steve: Interesting. Okay. And then what are some of your other companies specifically in like the e-commerce space, I don’t know if you have any clients selling physical products, or even like brick and mortar stores, what are some ways that some of these businesses are actually getting new clients as opposed to just doing customer support with the bot?

Ben: Yeah, so one of my clients, they’re in Provo, Utah. They are in a high end strip mall, they’re brick and mortar, but they also do online Blickenstaff’s. It’s a toy store. They are quite excited about Toys R Us going under just because it’s going to lead to extra business for them. And they’re a really innovative store where they — it’s more about an experience. Trying to compete with Amazon, you have to compete on price, but you also need to make it a really neat experience.

And so, one of the things that they are doing to improve that experience is you have your mother audience, the moms that get the invitation for a birthday party for their children. And if it’s anything like my wife or myself, we put that invitation on the fridge. We RSVP and say yeah, we will send our child, and then a day or two before you realize, oh no, we need to get a gift. At that point it’s too late to order on Amazon unless you do one day shipping or maybe if you live in a big city, you can get…

Steve: Get same day.

Ben: Yeah, that’s available on same day. But what my wife and I usually do is we’ll just run to a local store, and pick up a toy, and then it’s kind of a chintzy toy. It’s not really creative. There’s not as many options, but this toy store, what they’re doing to compete is we’re building a chat bot right now. And it’s not completely baked out because they’re being really strict on what products they put into the bot. But it is a bot where the mother can say, I’ve — it kind of demographically profiles the child. So it asks for the gender, it asks for the age and asks for interests. And then it returns some ideas for products.

And the mother can click buy right then right there inside the chat bot, and it will pull up, it’ll do a little slide up in the bottom of Facebook Messenger where they punch in their credit card info. And as soon as they place the order, it actually takes the order and drops it into a Google spreadsheet that the store is using and we could put it into their point of sale, but they chose to use a Google spreadsheet because that’s kind of a communication means they’re using inside their store already. It adds a line to Google spreadsheets and it turns on a Philips Hue light bulb right there by their front desk so that they know there’s an order they need to go check on. And they go and check the order, they fulfill it and the mom comes by within 15 minutes and has a pre wrapped gift ready to go.

Steve: Interesting. Okay so both Chatfuel — Chatfuel has this option to take payment directly through messenger and I think that’s coming to ManyChat pretty soon I believe, right?

Ben: Yeah Chatfuel has, and ManyChat when you and I were talking Steve at Social Media Marketing World, I mentioned that they didn’t have it yet. They released it like two days before the conference, so I was actually wrong when we were talking. ManyChat does have it now.

Steve: Okay cool.

Ben: It’s still in beta, it’s only in some accounts, I don’t think all accounts have it yet. But it’s a little bit more limited than Chatfuel too. Chatfuel uses the native Facebook credit card processing. So if someone has ever purchased anything through Facebook Messenger, their credit card details are stored there, and that’s using the native engine that Facebook provides. ManyChat uses Stripe or PayPal and so it’s not native. The people I believe have to enter their credit card every single time they purchase something if you use ManyChat’s.

Steve: I see. So for this toy store, how are they actually getting people to engage with the chat though?

Ben: So they’re advertising heavily. The nice thing as you know with Facebook advertising is you can draw a fence around your store because they are trying to capture brick and mortar here. They’ve drawn a 10 fence around their store and then choose the demographic that they think likely have children, and then they’re advertising in that way.

Steve: Interesting. Can you give us an idea of what these ads look like?

Ben: Yeah, so the ads have birthday type image and the calls to action are all around have a birthday party coming up, use our app.

Steve: Okay.

Ben: They are getting a lot of clicks where people click it and it takes them straight into the chat bot.

Steve: I see, where then they enter in their parameters, and then they get gift recommendations.

Ben: Exactly. Yep.

Steve: So it’s actually providing a useful service like even just for researching a toy, period.

Ben: It is. And it’s something that they haven’t started to promote it in this way. But the thought is, if it goes well with brick and mortar, they’ll expand this, and they’ll use it for online ordering. And then you don’t get the immediacy that you — the benefit that you do from the brick and mortar, but they can ship stuff out from their online inventory to people that have used their gift idea outside of the Utah area.

Steve: Interesting, interesting. And so once they get a customer this way, they have a messenger subscriber, what are they doing with these subscribers like outside of these ads?

Ben: Nothing yet, and it’s a matter of, we just haven’t built it. The plan is though; you can broadcast messages out to the people or your subscribers. Once someone has engaged with your bot, you can send them broadcasts. The Facebook rules say that you can only send a salesy or a heavily marketing promotional type message within 24 hours that someone has engaged with you, but if it’s a value added offer, and you’re not really being salesy, then you can send those out as frequently as you want.

And so the thought will be, hey, let’s send birthday guides, or let’s send toy guides, or let’s just send us an announcement about a new toy that they have in the store and it’s got a video of someone using that toy. You’re not selling it, you’re simply showcasing a tool or a toy, and then if someone wants to, they could go on and buy it from there.

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So I can imagine that implementing some of these chat bots can be kind of spammy. So what are some rules of thumb that you kind of use when implementing these chat bots so that they’re done tastefully without annoying a potential customer?

Ben: Absolutely. It’s a great question. So it’s still a wild wild west where like within ManyChat. If someone replies with stop, it will unsubscribe them from the bot and they won’t receive broadcasts from you anymore. But the way that Facebook has gone about it is that stop parameter, the unsubscribe isn’t handled on Facebook side, it’s actually handled inside of ManyChat. So, if someone wants to, they can go in and they can open up the program with that unsubscribe handling and they can just delete it and then it doesn’t work anymore. And then Facebook’s privacy/ spam policy is kind of kind of broken.

So, in that regards, there is a lot of room for spamming. And that’s why I always tell marketers, hey, be above board with this. We don’t want this to become like email, where you’re getting tons of messages all day. It needs to be something that’s truly above board. Just a couple of key points I always tell clients, always specify that it’s a chat bot. You might want to try to make it seem like it’s a human and you’re just ultra responsive and you have really good customer service, but unless you have millions of dollars to spend on developing artificial intelligence and natural language processing around your chat bot, it’s going to fall short and you’re going to have egg on your face. So, always specify that it is a chat bot.

Steve: Like in the first line you mean, like this is our automated bot.

Ben: Yep. And I actually I’ll have them do it a couple times. So, you have your greeting text that when someone first like clicks the little blue button on Facebook Messenger, or if they search for your bot inside a Facebook Messenger, or if they, I guess those are the two scenarios, if they see — if their first interaction is through one of those scenarios, there’s some greeting text that shows up and you’re supposed to state the purpose of the bot. I always specify there that it is a chat bot. And the second thing that I specify is what the purpose of the chat bot is. So, for this golf company, we specify very clearly that it is a bot for the birthday club.

Steve: Do you use the word bot?

Ben: A lot of times I do. I like to give the button a name. For example, a real estate bot that I built out as an example that I showcased at Social Media Marketing World and now I’ve actually got some clients that I’m implementing it for, I named it Roger, Roger the real estate bot. But I do say bot just to make sure people are — it’s very clear what…

Steve: Interesting okay. I’ve actually had some issues with that on my store as well. Like I start out saying that you can ask a question, check up on an order, basically our frequently asked questions, and then I guess there must be some misunderstanding because sometimes people just start typing like these really long involved questions. And that’s when I tell them that it’s a bot. Like, we don’t understand this question. Would you like to talk to a human. Yeah, I never thought about just stating that right from the start. Does that change the behavior of their questions though?

Ben: It would and you might actually benefit the way that you’re doing where you’re getting a longer comment on Messenger, they think they’re talking to a human. You’re gathering extra intelligence that you could use for business process optimization. But I still like the idea of making it clear up front that it’s a bot just because I know you’re setting expectations up front which to me it seems like it’s always a good thing to do.

Steve: Okay. And so you always offer the ability to unsubscribe. Do you do that for every single broadcast, every single message or is it just something you just say once right from the start and then that’s it?

Ben: Yeah, I just say at once from the start. I don’t know that I would want to say it with every single broadcast even though what I have done for some of my clients where they’re more sensitive and they really want to make sure that they’re above board and not getting in trouble for spam is they program in other things too. So, the two keywords that ManyChat and Chatfuel on most of these platforms use out of the box is stop or unsubscribe. And so we program in other things like anymore, I mean, just little phrases that might come up if someone doesn’t want that conversation anymore, they program those in as well.

Steve: What are some ways that people who are maybe selling digital products or have their own blogs or content marketing services, how are you seeing them use these chat bots/

Ben: Yeah, so one of the best examples out there and I recommend all of your listeners to go and look at his course. Andrew Warner if you search him, he has I think he calls it the Bot Academy.

Steve: Isn’t that more for teaching people how to become a services business related to chat bots?

Ben: it is, it is, but it’s a really good example even if you just — you don’t need to pay for his course and sign up for it, but go in and sign up, just interact with his bot, and then you will get messaged like crazy. I think his bot is perhaps a little bit too pervasive along the lines of annoying, but you’ll see some ways that he’s delivering content. He’s got videos, he’s pushing out, he has little PDF guides that people can download that he’s pushing out, he’s got lots of content, and he’s not even requiring that you give him your email, he asks for it.

But you don’t have to give him your email because he knows he can still communicate through the bot to you and he can drip this content. He sets it up, it’s all automated, and he’s seeing really, really good success rates with it where I would be surprised if he’s not making a few million a year off of his course with how pervasive he is in the marketing.

Steve: Yeah, I’ll have to link that up in the show notes. I remember the question I wanted to ask you now. What is Facebook doing right now to just kind of enforce these non sponsored broadcasts? Have you seen people get banned? What are the thresholds involved? Like, what are people doing? Like I’ve gotten actually promotional messages in my chat and I’m like, hey, how did people get away with this. What have you seen in terms of people getting banned or punished for this?

Ben: So Facebook, I have not heard of any stories of them banning or punishing anyone yet. So, in that regard, I think it’s still so new that you don’t have a lot of bad players in the space. Facebook is quite good at the 24 one rule. I know with ManyChat at least. So, it’s called 24 plus 124, we already mentioned, you can send a promotional message within 24 hours of interacting with the person. And then the plus one just means that you have a onetime exception to that.

So if you have 3,000 people in your database, and let’s say 1,000 of them, you have tagged as being a really strong prospect for purchasing your course or your information product, you can you can tell ManyChat, I want to message all of these people, these 1,000 people that I’ve identified. And even if I haven’t interacted with them in last 24 hours, I want to use that plus one. And so ManyChat and Facebook through their terms and agreements, they allow you to send one promotional message to that audience.

But ManyChat tracks it if you’ve used that plus one for those thousand people, they’re not going to be reachable anymore for promotional messages. It’s an honor system right now where ManyChat, you just check a box to say if it’s promotional or not. It’s that simple. And so because it’s the honor method, people could abuse it and I think we’re going to see Facebook is going to have to police that once the problem starts. I just think there’s not a big problem with it right now since it’s still so new.

Steve: I see, I see but from the perspective of the end user, all these different message types, they’re all the same right, they’re just something you get in your messenger inbox?

Ben: They are, they’re all the same from the perspective of the consumer even though there’s some really smart things you can do in ManyChat and I believe Chatfield has this too. You can say, hey, when I push a notification, you can do a couple things. You can make the phone make the little ding or the vibration every single time a message is sent, so like if you’re setting up a promotional string and it is has three different messages in that promotional string, their phone will ding three different times. Or you can say, I only want it to ding once for the first message, or you can say I don’t want to make any audible or vibration, I just want to show up in their notification tray.

Or you can say I don’t even want it to show up in the notification tray, only show it when they log into Facebook Messenger, and then show it as the bold black text on unread message. So, you can choose the different ways that you are notifying your consumers and use that very responsibly. If you have something that’s not urgent, then don’t ping your customers every single time you send a message. So, just be systematic and thoughtful, and intentional in the way you do it.

Steve: It just seems counterintuitive because you want them to see the message, right? And so it seems like most people will just check off all those things whenever they send something.

Ben: Yeah. But then you’re also creating noise. Like if your audience — it’s kind of like an email. I mean, if you keep spamming people with unrelated emails or irrelevant emails to them, they’re going to stop listening to your brand. So, it’s in your best interest as a business owner to just be careful and only bring that notification if you need an immediate action. Otherwise, it might be okay if it just shows up in their notification tray with no audible notice.

Steve: What do you do with your clients for broadcasts?

Ben: If it’s something that’s timely, I will recommend that they do a single audible notification. Otherwise, if it’s not something timely, I’ll ask them to just have it just show up in the notification bar. I’ve had some clients before try out having no notification to have it just be in Facebook Messenger when they open the app, engagement rates are all still about the same. And it’s between 80 and 90% open rates on all these messages, despite the way that you notify them.

Steve: I see. Okay, that’s what I was getting at. But it’s just a timing thing, like whether they open immediately or they get to it later, right?

Ben: Exactly.

Steve: Okay. And I did want to — you mentioned four tools in the beginning. I kind of want to revisit that. What do you recommend? Like you mentioned ManyChat and you mentioned Chatfuel, and you mentioned API.AI, that was the tool?

Ben: Yeah, now called Dialogueflow.

Steve: Dialogueflow. So, when would you use each, under which circumstances?

Ben: So, Dialogueflow, if you have some real budget, let’s say that you work for Keller Williams, the big real estate brokerage and you’re working for corporate and they have 50,000, $100,000 whatever it is to develop a chat bot, I would recommend you look at something like Dialogueflow, because Dialogueflow has more functionality. With ManyChat and Chatfuel, they’re both point and click interfaces.

But because they’re point and click, you can’t use any of the real native API that’s available to you on Facebook Messenger, whereas Dialogueflow you can. You’re actually doing coding. They have some point and click elements, but to really get your chat bot working, you’re going to have to have some development skills. And because of that you get more power and more functionality and you get the natural language processing.

The ability for someone to, let’s say Keller William’s example, let’s say someone sends a text message for a house and they put in the wrong address but it’s close, Dialogueflow could catch that and return the right product, the right home listing based on a slightly incorrect address. And they use natural language processing to do that. They’re the only one other than Microsoft has what they call Microsoft, they call it Bot Framework. They do the same thing. But Microsoft’s is not nearly as well integrated. I wouldn’t go with that one.

Steve: So, when you say natural language processing, you’re implying a bot that’s actually intelligent, where you can actually make it appear as closely to human as possible compared to some of the other tools?

Ben: Yeah, exactly. And so far Dialogueflow is the only one that’s doing that really well.

Steve: Is it free then or?

Ben: It is, it’s free. Knowing Google, they’re likely not going to ever charge for it simply because it’s giving their platform, their Google Assistant or their home products, the voice products; it’s giving that an extra platform and a way to get out there. They’re putting a lot of money into them.

Steve: Okay so basically don’t use it unless you have technical skills or you have a developer, or you need something super advanced with your bot, right?

Ben: Exactly, yep.

Steve: Okay so, then Chatfuel and ManyChat, what are the differences there?

Ben: The big difference is Chatfuel I would say is easier for really simple bots in large part because you login and they have a drop down tray at the top with templates, and you can simply select the template. It’s not a huge library of templates yet, but they do have some good starter templates and you select one and then you can go over and view how the template works and you can customize it. So, Chatfuel is easier for first time users.

Steve: What do you consider a really simple bot?

Steve: A really simple bot would be one that simply provides hours and directions for our brick and mortar location.

Steve: Okay go it. And what would be a more complicated bot that you might want to use ManyChat for?

Ben: ManyChat as if you get any kind of calculation in or like for example the Blickenstaff’s bot is built on ManyChat because you can use routing that’s a little more advanced. You can do it with Chatfuel too, but how Chatfuel works is it’s all a linear conversation like you will open up a message and you’ll edit a message. And then you’ll say, if they click this button, go over here to this message. And if they click this button, then go to this message instead. And you need to then click over and edit that message. And it’s really hard to keep it straight in your head with Chatfuel.

Steve: I see okay.

Ben: When you get multiple threads, but ManyChat is very visual. It’s got like a dialogue; it’s got a canvas with the different messages on it. And then you click and drag arrows from one message to the next. And so when you get more complex, ManyChat becomes easier.

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I see. So it sounds like it’s a user interface thing when it comes to developing the chat. It sounds like they have similar functionality. Just one has a better UI in terms of developing a more complicated chat flow.

Ben: Yeah, functionality I would say they’re both on par with each other. They watch each other really closely in the development cycle. But yeah, it comes to the user interface.

Steve: Okay. And so when you’re making a choice like for your clients since you’re doing the work like what does it come down to?

Ben: Yeah I would say about 50% of the time I’m putting them on ManyChat. A lot of that is I can build the tool and then I can do a 15 minute screen record and send them a video showing them how they can edit it, and I’ll do that whole screen share from within the canvas view or I can just show them here this node goes over to this conversational node, that’s really easy. So 50% of the time it’s ManyChat, the other 50% of the time is split between the other three products just depending on complexity of the product.

Steve: And you have any clients using the Google product Dialogueflow?

Ben: I don’t, I’ve only played with that one. I have some development experience but only enough to be dangerous.

Steve: Okay and what were the other — you said three other tools, what are the other two?

Ben: One is Flow XO, and for anyone who attended the Social Media Marketing World Conference, if you went to their support page, they have frequently asked questions but they also had a link to the chat bot, and you could engage with the chat bot through that link. And it was all of their frequently asked questions that have been programmed into a chat bot. And the reason we use Flow XO is because even though Flow XO doesn’t have natural language processing, it does have a better system for catching a wide variety of queries.

So, if someone let’s say if someone uses the word meal in their question, in ManyChat you would just show them the menu or show them, maybe you just show them the dining times or the location of the dining. But it’s kind of hard to differentiate between which of those responses you should show. And in Flow XO you’ve got some really sophisticated logic where you can say, if they use the word meal and they use the word gluten, then you know they’re asking about gluten free options and so return this message. Or you can say, if they use the word meal and they don’t use this word, then return this message.

Steve: I see.

Ben: So like it’s better at handling keywords.

Steve: Interesting, so but what are its limitations outside of that?

Ben: The user interface is pretty clunky; it’s just not nearly as good as Chatfuel or ManyChat. And then functionality, it has some more sophisticated integrations. It was built as an integration platform originally, so it’s got some really good integrations, but if you’re trying to get a lot of new audience into your chat bot, ManyChat and Chatfuel will have some things called growth tools. And these would be like a little slide in that lives on your WordPress site and it slides in from the side, and it’s got a call to action, they can click the button and it will take them straight into your chat bot. ManyChat I think has around 15 of those different kinds of growth tools and Flow XO only has three or four.

Steve: One thing I’ve been curious about is once you have subs on one of these platforms, can you move subs around to different platforms like email or no?

Ben: Not easily. You’re asking about the — when you say subs, you’re talking about the programming language, like the actual logic that you’ve built around that?

Steve: No, that’s what I mean. Like, let’s say I have 1,000 subscribers on ManyChat and I want to move over to Chatfuel later, like move those subs over, is that possible?

Ben: It’s not, the subscribers live inside the individual platform database, and they don’t make them movable.

Steve: Interesting. So, once you’ve chose — so it’s important to kind of choose the right platform from the start it seems.

Ben: Yeah. Otherwise, what you would have to do and you could do this, you can actually have a Chatfuel bot living at the same time as a ManyChat bot, and they both live on your same Facebook Messenger account. The problem is they’re going to be stepping on each other’s toes. But if you did need to move from one product to the other, what you could do is you could ask a question inside of ManyChat and then deactivate all of the other logic inside of ManyChat, and then when they respond to your question then them responding if you have Chatfuel turned on, you get Chatfuel then respond to their response. And at that point they’re opted into your Chatfuel bot. So that’s a way that you could move them. It’s not ideal, though because you’re going to…

Steve: Yeah, you’ll probably lose some people yeah.

Ben: Exactly. Yep.

Steve: Interesting. So this is different than email in that respect for sure.

Ben: It is.

Steve: And was there a last tool that you didn’t mention, there’s two more, there’s Flow XO, and there’s one other?

Ben: No Flow XO, there’s hundreds. Well, I’d say there’s probably 100 chat bot builders out there right now, but those four are the big ones.

Steve: Okay. And then early on in the interview you mentioned some company that was using text messaging bots. Do you do that for your customers, and is there like a program that does that as well?

Ben: So that was they actually built — I consulted on them just from an ideation phase. They took it and they built it out themselves. They connected directly through Twilio for their text messaging, and they’ve got their own code in the back end that’s running that whole chat bot.

Steve: I see. I see. It seems like that would be right for abuse, right, because there’s no control whatsoever. There’s no one controlling a text message, right?

Ben: Yeah, text messages are a little bit more intimate too than a Facebook Messenger stream, so I think yeah, you have to be really careful to not abuse that.

Steve: Interesting, but there’s also no one to punish you either, right?

Ben: There’s not. In the case that if you were using Twilio for your text messaging, they do have unsubscribe parameters built in where it’s the stop unsubscribe thing, and if you had a really high ratio of individuals responding with stop or unsubscribe, Twilio does black your account. They’ll black label you, because Twilio does need to be careful about their own servers that are sending the text messages and whatnot.

Steve: Sure, sure, sure. It seems like text messaging is very similar to email like once someone has your number they can text you, whereas Facebook at least it’s gated right, where you have to opt in and there’s no way to message them with some sort of number or ID?

Ben: That’s right and yeah and that’s some people, some of my clients have been hesitant to launch on Facebook Messenger because you’re really building your whole audience on someone else’s proprietary platform. And what happens when Facebook Messenger decides that, hey, we’re going to change our 24 plus one rule to 12 plus one, or hey you can’t outbound message them at all anymore unless you pay us the advertising, subtract the advertising dollars for that. I don’t see Facebook doing that, that would really kill the platform but as we all saw a few about a month ago, they changed what business posts show up in the Facebook stream, and it is affecting advertisers.

Steve: Do you have any insights or predictions on what you think is going to happen in the next couple of years with the messenger platform?

Ben: Mark Zuckerberg was end of 2017 in a quarterly earnings call. He indicated that it is one of their primary focuses, Facebook Messenger chat bots. And his quote was something along lines of we haven’t monetized it yet, but we will. And so, I could see Facebook continuing to put a lot of money into it. They already are, their developer stack if you want to tie straight into it is changing on a monthly basis where they’re introducing new functionality. So, they’re putting a lot of resources into their messenger chat bots.

And I think they will for another three or four years. I think it’s going to be a really hot place for Facebook for their focus, and they’re going to start to monetize it, that they already have. You can buy advertisements that will show up in Facebook Messenger now, and you’ll see more of that over the coming years.

Steve: So given that Facebook has been reducing the reach of all these pages and everything, would you be worried at this point about putting all your dollars into a platform that you don’t control? Like, what are your views on that?

Ben: My thoughts are you don’t control the platform, but it’s the biggest out there by far right now. I’ve got one client that’s having me build a bot on WhatsApp for them. And it’s a really difficult system. There’s no good bot builders out there. You have to build straight on the code. So I’m hiring a developer to help with it and it’s just a gnarly process. So, with Facebook, your barrier to entry is so low and they’re still so few companies doing it.

I wouldn’t allow that hesitancy to keep you out. What I would recommend though is collect the email addresses of your subscribers. I try to do that for all of my clients and that way, if Facebook Messenger does hurt your audience in some way, at least you have the email address. And maybe you could invite them to a new platform, or just start communicating with them through email if all hell breaks loose.

Steve: Okay. But in terms of priority, you always go for the messenger subscriber first followed by email, right?

Ben: Yes absolutely.

Steve: Ben we’ve been chatting for quite a while now, I want to be respectful of your time. Where can people find more about you and your services and where you blog?

Ben: So, I blog on Clear Voice most active. I have a weekly blog there where I talk about Martech. I talked about chat bots too. But in general, I talk about marketing technology, and how businesses can leverage that for their own use, so, I would recommend you follow that blog. If you want to reach out to me though, you can go to Martech.live. There’s a contact form there, or you can drop me a message on Twitter. My Twitter handle is @MartechBen, and I’m very active on Twitter at least in responding where I will respond to you. And I’m more than happy to help anyone in your audience with questions they have about chat bots.

Steve: Cool. And then are you for hire as well for implementation?

Ben: I am. Right now things are really busy, where if I can’t take on your project right away, I have other contractors that I can help put you in touch with, or I can point you in the right direction. But if you have something innovative or unique or new that you’re working on, or you think hasn’t been done, I’d like to talk to you because that’s really — those are the projects I like to work on and I’m prioritizing those projects right now.

Steve: Cool. Well Ben, thanks a lot for coming on the show. Really appreciate you.

Ben: Absolutely. Thank you, Steve for having me on the show.

Steve: All right, take care.

Ben: You too.

Steve: Hope you enjoyed that episode. I think in the last four months or so I’ve spoken to at least five different Facebook Messenger experts, and I’ve gone all out on Facebook Messenger for myself. And at some point, I’ll probably talk about my own implementations on the show. For more information about this episode, go to mywifequitherjob.com/episode217.

And once again, I want to thank Privy.com for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop-ups for any parameter that is closely tied to your e-commerce store. If you want to give it a try, it is free. So, head on over to Privy.com/Steve, once again, that’s P-R-I-V-Y.com/Steve.

I also want to thank Klaviyo which is my email marketing platform of choice for e-commerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post-purchase flow, a win-back campaign, basically all these sequences that will make you money on autopilot. 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 talk about how I use these tools on my blog, and if you’re interested in starting your own e-commerce 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’re 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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218: Mid Year Report: How My Online Store Performed In The First Half Of 2018

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218: The 2018 Mid Year Report For My Ecommerce Store

My wife just closed the mid year books so today I’m going to breakdown the numbers for the first half of 2018 for BumblebeeLinens.com.

I’m going to talk about our how online store performed in the first half of 2018 and why 2018 has been one of the toughest years for us so far.

I’ll also go over what’s been working well for us and how we’ve managed to maintain growth despite the adversity. It’s going to be a short but sweet episode. Enjoy!

What You’ll Learn

  • How a simple mistake has made it an extremely challenging year
  • The pros/cons of using an open source cart vs a fully hosted one
  • What’s worked so far this year and what has not
  • The one marketing platform that has been a home run

Other Resources And Books

Sponsors

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.
Klaviyo

Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
Privy

Pickfu.com – Pickfu is a service that I use to get instant feedback on my Amazon listings. By running a quick poll on your images, titles and bullet points, you can quickly optimize your Amazon listings for maximum conversions. Click here and get 50% OFF towards your first poll.

SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
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Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where bring on successful bootstrapped business owners and dig deep into what strategies they use to grow their businesses. Now today, it’s just me on the podcast. And I’m going to talk about how our online store Bumblebee Linens performed in the first half of 2018, and why 2018 has been one of the toughest years for us so far. I’ll go over what’s been working well for us, and how we’ve managed to maintain growth despite the adversity, it’s going to be a short but sweet episode.

But before we begin, I want to give a quick shout out to Privy who is a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now, what does Privy do? Well, Privy is an email list growth platform and they manage all of my email capture forms. And in fact I use Privy hand in hand with my email marketing provider.

There are a bunch of companies out there that will manage your email capture forms, but I like Privy because they specialize in e-commerce. Right now I’m using Privy to display a cool wheel of fortune pop-up. Basically a user gives their email for a chance to win valuable prizes in our store. And customers love the gamification aspect of this, and when I implemented this form email sign ups increased by 131%.

So, bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So, head on over to Privy.com/Steve, and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ For 15% off. Once again that’s P-R-I-V-Y.com/Steve.

I also want to give a shout out to Klaviyo who is also a sponsor of the show. Always blessed to have Klaviyo as a sponsor because they are my main email marketing platform that I personally use for my e-commerce store, and I depend on them for over 30% of my revenues. Klaviyo is the only email platform out there that is specifically built for ecommerce stores and here is 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 last week, easy. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they bought, 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 could 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 to 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. My wife just closed the midyear books. So, today what I’m going to do is I’m going to break down the numbers this past year for my e-commerce store BumblebeeLinens.com from the period of January 1st to July 1st of 2018. Now so far in 2018, it’s been a crazy challenging year. And in fact, I would say that it’s been one of the hardest years in recent memory, but not because of demand. Demand for Bumblebee Linens and our products has been great. But the reason why it’s been challenging is because we’ve hit some major snafus in the first part of the year that have greatly hindered our growth.

In any case, let’s just kind of start with the numbers first, and then I’ll go into more detail. So, so far, for the first half of the year, year over year profit and revenue is up only 3%. Traffic is up 6%, margins are relatively flat. All in all, it’s safe to say that things were mostly flat from the prior year. And to be quite honest with you, I was really ecstatic that we were even up at all given what happened in the first two quarters of the year. Now, why would I just be happy just to have a flat business that hasn’t grown from the prior year? Well, mainly, it’s because for the first half a year, we were out of inventory for most of our best selling products, out of inventory. I mean, you can’t make sales without inventory, right.

So, here’s what happened. First off, whenever we place an order for linens from our vendors, there’s actually a good three to four month lead time. Now that lead time might seem pretty long to you, but it’s something that we have to deal with because a lot of our stuff is handmade. There are literally women in rural China who are hand making our products. And what our vendor does is he actually drives around to all these little rural communities, goes to these houses for these ladies who make our products, pick them up, and then ship them to us. And so as a result for that, it takes forever to get it made and it takes forever to get some of our products.

And for the first half of the year, we were actually expecting a major shipment to arrive in the beginning of the year. And as usual, we paid for an inspection, which incidentally, even if you’ve been working with a vendor for a very long time, you should always get inspection no matter what. And what happened was, this time when we got the inspection, the samples that we got back from the inspection had a slight tinge of blue instead of pure white. Now for our store Bumblebee Linens, in case you guys aren’t familiar, we primarily sell white products. And the samples that were getting back had a slight off white aspect to it that was a tinge of blue.

And normally it wouldn’t be a big deal if it was slightly blue. Like if you looked at this thing by itself, it actually looked pure white. But the problem is we often sell our products and we cross sell our products if they match with other ones. And this particular white which had a tinge of blue didn’t match the other linens that we sell, and this would have been a huge problem. So for example, we’ll sell dinner napkins of a certain color, and oftentimes that same vendor will buy cocktail napkins to match those dinner napkins. And if the colors don’t match, that’s simply not going to work. And as a result, we couldn’t really accept that order.

Now, here’s the thing about all this. We’ve actually used this vendor for over five years, I would say even longer than that, maybe six or seven years and they’ve been rock solid, same quality product every time, same color product every single time. But this one time, for some reason in the first half of 2018, the linen color was completely off. And even though we caught the problem before this whole big shipment was shipped, they actually informed us that they could not dye the fabric to the usual white color without degrading the fabric. And as a result, they had to start all over which essentially meant another four months that we had to wait for product.

We actually ended up not having to pay for the shipment because they could sell that exact same inventory to someone else. But heck, we were expecting this order to come in January, and now we had to wait another four months. And what’s even worse is this started a huge cascade. Our number two and number three vendors, they all of a sudden started shipping us product with the exact same blue color tinge in the fabric. So, it wasn’t just our best vendor. It was our number two and number three vendors as well, and this couldn’t just be a coincidence. And so we asked, what was up with this? We asked all three vendors what was going on, why is there this tinge of blue in our white linens that we’ve been buying from you guys for years.

And it turns out that a lot of Chinese linen manufacturers decided to switch over to this color, because customers in Europe and Japan prefer a more bluish white. And as a result, all the factories started following suit and dyeing their white fabric this way. So, bottom line, we basically went through the first half of the year without a whole lot of inventory. And as a result, our Amazon listings were sold out, we didn’t have a whole lot of product to blind our event planners, and it ended up just being one huge mess. Hopefully, some of our event planners didn’t find other vendors to supply their linens for them in the meantime. And hopefully we’ll be able to get their business back once we get our inventory situation sorted out.

Anyways, as of right now, the recording of this podcast, we just received a partial shipment last week, but the rest isn’t going to come until the beginning of August. And hopefully we can make up for this shortcoming during the holiday season. The second major low light is also something that was completely unfortunate that occurred, but it had to do with technical dent. Now, it’s been a very long time since I upgraded Bumblebee Linens, the software and the server. And what happened was sometime in January, something auto updated on my server, which caused our website to start behaving erratically.

And normally, I have auto updates turned off on my server. But I must have missed something because something auto updated in January, which ended up breaking a few things. And so what ended up happening was that on random orders — so we sell personalized items where people can actually write a message of their choice on our linens. And on random orders, every now and then the personalization would get completely lost. So let’s say someone ordered 10 hankies with personal messages, every now and then all the messages for all the hankies would be completely lost in our database. And as a result, when this happened, we’d have to reach out to the customer and ask them for their personalization all over again.

And it was a huge pain in the butt. And my wife was telling me that this was happening multiple times per week. And as a result, during this duration, I ended up dialing down the ads so we wouldn’t sell as many of these personalized items. And pretty much I dropped everything that I was working on to try to fix this issue when it started happening. And it turns out that the problem had to do with our database software version changing automatically. So I spent a lot of time trying to fix this stuff. And while I was under the hood already, I decided to upgrade everything to the latest and greatest, which actually involved a pretty major code rewrite of our software.

Remember, I’m on an open source platform where I control the code. And just to give you guys an example, we had to migrate the code from PHP 5.3 all the way to the lacing grace, which is PHP seven, and PHP 5.3, which is what we were on was no longer supported. And going from that one language version to the next language version, they decided to remove certain functions in the language and I had to do the conversion with my code. And that was a major pain in the butt to say the least. I also ended up upgrading the operating system on my server to the latest and greatest Linux because my old version was getting deprecated as well. I also ended up upgrading my SQL database to the latest. I updated a bunch of plug-ins.

All in all, the process was a major pain in the butt and it took me about four days of uninterrupted work. And by uninterrupted for me that means I basically locked myself in a room for eight hours a day only leaving for food and bathroom breaks until this whole migration was done. It was an extended project. I actually, I’m kind of sadistic, I actually kind of enjoyed the upgrade, but it was a pain in the butt mainly because I didn’t know what I was doing. And I basically had to browse a bunch of forums and facts in order to just kind of get through the migration. I learned a hell of a lot, and I actually don’t regret doing the upgrade. I rather enjoyed it.

But it was a little bit stressful because we were running the store at the same time, and things were broken in the process. Anyways, this whole snafu with the migration, it actually prompted me to write a blog post on the merits of going with an open source platform, versus a fully hosted solution like Shopify, or BigCommerce, where they basically do all the upgrades and the work for you. Anyways, here’s what I had to say in that article. After all, upgrading my shopping cart to the latest and greatest was pretty hellish. Not only did I have to make the appropriate fixes, but I actually had to test them as well after I made the changes.

So, when it comes to choosing between an open source cart and a fully hosted cart, if any of the stuff that I just kind of described terrifies you, you should probably just go with a fully hosted platform like Shopify, or BigCommerce, and just be done with it. But here’s the thing, I haven’t actually had to do a major update of my shopping cart or my server in almost 10 years, I would say. And I’ve probably saved nearly six figures of money versus a fully hosted platform, if you take into account transaction fees, plug-ins, and all the extra expenses of going with a fully hosted platform.

The other thing I also want to say is that under normal circumstances, upgrading a free open source shopping cart should pretty much usually be seamless. And my situation with my cart was kind of unique in that my shopping cart pretty much stopped getting supported several years ago. There haven’t been that many updates and I’ve pretty much been on my own in maintaining my own shopping cart for quite some time now. Now, on the other hand, if you choose a well supported open source shopping cart, this will not happen to you. And I’ll just give you a quick example of this.

I use one WordPress on my blog. And I’ve used them for the last nine years, and I haven’t had to do much work at all in maintaining the core. And why is this? The main reason is because WordPress, even though it’s free and open source, it is well maintained, and extremely seamless to upgrade. Oftentimes upgrading WordPress just involves pushing a button. And because there’s a lot of third party developer support, even if you do run into some hiccups, you can usually find someone who can help you with your problem and your upgrade.

That wasn’t the case with my current shopping cart, because it’s not really supported well anymore. There aren’t a whole lot of people on it anymore, and they’re not a whole lot of people developing software supporting anymore. And so that’s why I’ve had to do this maintenance on my own. And I do want to actually emphasize, like if you guys are trying to decide between using the open source shopping cart really versus a fully hosted one, the exact same thing can actually happen to you with a fully hosted platform as well.

So for example, if Shopify or BigCommerce would ever run out of money, or become less popular, you could be stuck on a dead end platform as well, even though you’re paying them to maintain it for you. And in fact, this has already happened with a bunch of fully hosted carts, which I don’t really want to mention by name. But let’s just say that I used to be an affiliate for one of these platforms. But I stopped promoting them because they basically let their cart go to crap.

Anyways, the moral of the story here is that you want to go with a cart that has the features that you need, and the one that’s the most popular and well supported by third party developers. And of course, it’s impossible to predict the future. At the time, when I chose my shopping cart, it was actually the most popular one, and it was the one that a whole bunch of people were using. But over the years, what happens is competitors pop up, and there’s a new, most popular shopping cart over the year.

So it’s impossible to predict the future. But I would say that if you had the technical chops, and you want full control over your software, go open source. Otherwise stick with a fully was a platform like Shopify, or BigCommerce. Now, looking back, I actually don’t regret my decision at all. And the hope at least is that I won’t have to perform major surgery on my shopping cart or my server for at least another decade based on my track record.

Steve: I just want to take a moment to thank Pickfu for being a sponsor of the show. If you currently sell on Amazon like I do, then you know how crucial the quality of your Amazon listing is to the success of your e-commerce business. So for example, I’ve run experiments on my Amazon listings, well simply replacing the main image with a different photo resulted in a 2x increase in conversions. But how do you choose the best and highest converting photos for your listings? How do you know that you’re using the most profitable images for your products? And how do you know that your bullet points are convincing. This is where Pickfu comes in.

Pickfu allows you to solicit real human feedback about your Amazon listings in 10 minutes or less. And you can target the exact demographic of your end customer. So for example, let’s say you sell napkins and you have two main product images that you want to test. You would simply go to Pickfu, list the images, target female Amazon Prime members over the age of 35 and hit go. Within 10 minutes you’ll get feedback of which image people are more likely to buy along with specific feedback on why they made their decision.

In fact, I’ve used Pickfu to almost double the conversion rate on several of my Amazon listings by testing my images, bullet points, and product titles. And what I like about Pickfu is that you get results quickly unlike traditional split testing, and you can use this to test book covers, landing pages, basically anything. Not only that, but it’s super cheap to run a poll and right now you can get 50% off your first poll by going to Pickfu.com/Steve, once again, that’s P-I-C-K-F-U.com/Steve. Now back to the show.

Now the final thing, the final bad thing I should say that hit us is that we had two employees out of four leave our company this year. Two out of four, that’s 50%. And we’re not used to having turnover at Bumblebee Linens. These employees have been with us for a very long time. One employee was with us for five years and the other was here with us for two. And quite frankly, we treat our employees very well. And by well, just to give an example, we actually have given two cars away to our employees just kind of as thank yous.

And the upshot is they left for other better opportunities, or because they had other circumstances where they couldn’t work for us any longer. And we were really sad to see them leave. And we, over the years, we train them up, and so they actually knew our business inside and out. Anyways, because of these departures, I’ve had to actually personally go in and pack linens as well while recruiting new employees. And as a result of this during this period, I had to actually purposely dial down our ads, just so that we wouldn’t get overwhelmed with orders that we couldn’t fulfill. Remember, we run our own warehouse, and we do our own fulfillment, primarily because we sell personalized products.

And the entire hiring process has been extremely tough. And I don’t want to go off on a rant here, but I will say a couple of things. Hiring is tough. As part of our application process, we have everyone who applies, find our website, and then send us an email with a special subject line kind of as a test. And you would not believe how many people simply can’t follow directions, and it’s really frustrating. And the other thing that’s been hard about hiring for kind of warehouse related employees is that overall I think the talent pool has been greatly diminished by services like Uber, Lift, DoorDash, and other on demand delivery services.

Having a nine to five warehouse job just doesn’t seem as attractive when you can drive for Uber and Lift and work basically whenever you feel like it. So, this whole on demand sort of employment has made nine to five warehouse jobs a little bit less than attractive, at least in the Bay Area. In any case, I’ll keep you guys posted on the entire hiring process. We are not done recruiting just yet.

All right enough with the bad stuff. As you can probably tell, with all the bad luck in the first part of the year, we were actually lucky to have any growth at all. So, how do we manage to eke out growth without any inventory? Now, if you recall a prior episode that I did on the podcast with my wife, my wife and I actually purposely limit our growth so that we don’t let our business rule our lives. After all, we started our business to spend more time with the kiddos. And as a result, we have a couple of levers that we can pull to increase growth when necessary. But our goal is to not get stressed out about our business.

So we don’t want to grow too fast. And we’ve been controlling growth over the years. So for example, to account for the lack of inventory of certain linen products, we simply upped the ad spend for the products that we did have. And as a result, some of our shortcomings were offset by other the products that we don’t normally push as hard with Facebook ads. The other thing that we started doing is we started sending out more email campaigns to kind of offset the losses as well promoting the products that we actually did have in stock.

And here is one thing that I will say about email. Most people don’t send enough of it. And it works every single time. Every time we send out an email, we make money. Now, most people that I talk to rarely email their list because they’re afraid of burning out their list or pissing off their customers. And for those people who do this, they’re leaving money on the table. Your subscribers are surprisingly resilient, and you should be able to email them more than you think. And if you’re only sending emails once per month, or every other week, I’d say the minimum frequency should be once per week. And then when you decide to run a sale, you really need to up the sends.

So in our case, for any given sale, we usually email our folks six times or more to talk about the promotion and every single email makes money and our spam rate is 0%. It’s under like 0.01%. Anyway, email frequency is just another way that we control sales. So when we need some sales, we’ll send out some more emails, when we want to control sales, we send out less emails. But outside of dialing up and down the ads and sending more emails, the one major win for the first half of the year has been Facebook Messenger marketing. Right now our Facebook Messenger open rates are 6X greater than that of email. And the click through rates are over 10X better than email.

And I wrote a post about my Messenger exploits a while back, which I’ll link to in the show notes if you guys want to check it out. But my numbers are actually continuing to improve. And I would say at this point that Facebook Messenger is the future of marketing. As email gets more and more saturated, Facebook Messenger marketing has been a breath of fresh air, and not a whole lot of people are using it right now. So this is the right time to get in. And in fact, I’ve moved a lot of my Facebook ads and strategies over to Messenger, and I might do another podcast episode just to talk about it.

But overall, the combination of increased email sends, increased Facebook ad spend, and Facebook Messenger marketing have allowed us to eke some sort of growth for the first half of the year, despite missing some of our best selling products, despite all the server snafus, and despite the fact that a couple of our employees left. And as of right now, we should have inventory soon in the beginning of August, and hope to make up for the poor first half of the year, and putting the pedal down for the second half of the year. Anyway, I hope you guys enjoyed this episode.

I just want to give you all a quick update on Bumblebee Linens. And one thing I actually did want to end this episode with, our key lessons that I learned for the first half of the year. So, lesson number one, even if you’ve worked with a vendor for many, many years with a rock solid track record, do not take product quality for granted. Things can change at anytime; always get an inspection no matter what.

So, one major mistake that we made is that we opted to only get an inspection at the end of the production run. And this entire inventory fiasco could have been prevented much earlier on had we done an inspection at the start of production, which is actually something that we do for brand new vendors. But because we never had any problems with this vendor for five plus years, we decided to skip the start of production inspection and we paid the price.

Lesson number two, choose your shopping cart wisely, and keep backups of everything. Back in 2007 when we first got started, there was no Shopify and there was no BigCommerce and open source shopping carts were all the rage. And I think at the time the best fully hosted solution was Yahoo Merchant Solutions, and there were a whole bunch of people that went on Yahoo. And well, guess what, today they are a non factor. And I still know a couple of people who are still on Yahoo Merchant Solutions, because it’s so painful to switch.

Now, when it comes to carts, there are no guarantees at all. And arguably, I think you’re actually in a worse situation if a fully hosted shopping cart decides to go out of business or stop maintaining their cart than it is to have your own open source cart go unsupported. But nonetheless, when in doubt, go with the shopping cart that has the most third party developer support and the one that is the most popular, because that way you always have someone that you can call for help or pay for help whenever you have problems with your tech.

Now, my situation with my shopping cart is definitely not ideal for most of you out there listening. But I actually love having full control over my source code, which allows me to program in whatever feature I want. And who knows, I may migrate to another open source shopping cart someday, but for now, I bought myself at least another five years I would say with the last upgrade that I just performed.

Lesson number three, treat your employees like family. One thing that I forgot to mention is that even though our employees left, they gave us plenty of notice. And in fact, they even volunteered to try to stay as long as possible to help ease the transition to our new employees. And one thing that I’ve just learned is that if you treat your employees right, they will take care of you as well. Anyway, that’s it for today. For more information about this episode, go to mywifequitherjob.com/episode218.

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 flow, 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.

I also want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like them because they’re so powerful and you can basically trigger custom pop ups for any primer that is tied to your e-commerce store. If you want to give it a try, it is free. So head on over to Privy.com/Steve, once again that’s P-R-I-V-Y.com/Steve.

And I talk about how I use these tools on my blog, 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.

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217: The Future Of Ecommerce With Scott Voelker, Greg Mercer, Mike Jackness And Steve Chou

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217: The Future Of Ecommerce With Scott Voelker, Greg Mercer, Mike Jackness, Steve Chou And Toni Anderson

In this episode, Scott Voelker of The Amazing Seller, Greg Mercer of Jungle Scout, Mike Jackness of EcomCrew and I get together to discuss the future of ecommerce.

I’m also happy to announce that the 4 of us have decided to launch a brand new show together called The 5 Minute Pitch. Basically, it’s a Shark Tank like show where we’ll be giving away $50,000 dollars to 1 lucky business.

Click Here To Sign Up For The Chance To Win $50,000

What You’ll Learn

  • Should you start your own store or sell on Amazon first?
  • How to compete with Chinese sellers
  • How to deal with the Trump tariffs
  • How to find a product to sell
  • How to launch a product
  • Common mistakes in ecommerce

Other Resources And Books

  • 5 Minute Pitch – Sign your business up for the chance to win $50,000

Sponsors

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.
Klaviyo

Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
Privy

Pickfu.com – Pickfu is a service that I use to get instant feedback on my Amazon listings. By running a quick poll on your images, titles and bullet points, you can quickly optimize your Amazon listings for maximum conversions. Click here and get 50% OFF towards your first poll.

SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
Sellers Summit

Transcript

Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and dig deep into what strategies they use to grow their businesses. Now, today, I have an extra special episode for you. Instead of the usual where I interview a single guest, I decided to bring my good friend Scott Voelker of the Amazing Seller, Greg Mercer of Jungle Scout, Mike Jackness of EcomCrew, and my partner Toni Anderson on the show.

Now, this podcast was actually a live Q&A session that we held last week where all of us answered questions about the future of e-commerce. So for example, we discuss how to deal with the Chinese competition. We talk about the tariffs, and how they will affect sourcing costs, we talk about finding products to sell; basically we cover a lot of ground here in one action packed hour. Now what’s also cool about this episode is that I’m happy to announce that Greg, Scott, Mike, and I are launching a brand new show together called the 5 Minute Pitch.

Basically, it’s going to be a Shark Tank like show where we’re giving away $50,000 to one lucky entrepreneur. 32 companies will be selected to pitch Greg, Scott, Mike, and I, and the winner will be selected on a live show with all of us. It’s going to be an awesome show and we’re going to start filming in September. If you’re interested in submitting your business, head on over to 5minutepitch.com, that’s the number 5-M-I-N-U-T-E-P-I-T-C-H.COM, now on to the show.

Intro: Welcome to the My Wife Quit Her Job Podcast where we’ll 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’s your host Steve Chou.

Toni: Hey everybody, it’s Toni Anderson from Sellers Summit and I’m excited today to be with some of my absolutely favorite e-commerce people and faces you probably recognize if you’ve been to any of our Sellers Summits. In fact I think everybody who’s on today is a three times Sellers Summit alumni, right guys?

All: Yeah.

Toni: Yeah. So joining us today to discuss some of your favorite e-commerce topics that you’ve submitted, we have, let me go left to right. So I think Greg is first with his fancy elevator background which…

Greg: Thank you for having me on.

Toni: So yeah Greg, CEO of Jungle Scout. I think you’re probably known him best from that. He’s doing a lot of things; he’s got a new podcast out too. Next we have Steve Chu who you guys are probably pretty familiar with, I won’t even bother with more of an introduction, but he’s a big deal. And then we have Scott Voelker who — I know.

Steve: I don’t have an elevator that goes to my private floor however.

Toni: Exactly. Scott Voelker from the Amazing Seller and everybody is really familiar with Scott, our three times speaker at Sellers Summit. And then Mike Jackness, mentor, seller extraordinaire from the EcomCrew Podcast, and probably more famously of ColorIt I think, I don’t know which is bigger now, but they’re probably equal. So these guys are here today to answer some of your questions and talk about e-commerce. Hey, guys.

Scott: What’s up Toni?

Greg: Hello, excited to be here?

Toni: Yeah. So we’re going to just kick off right away with some questions. That’s the best way you think?

Steve: Yeah, let’s do it.

Toni: All right. Okay. First question and this is for anybody who wants to answer. It says, with the dominance of Chinese sellers at Amazon for someone just starting out, would you recommend starting on Amazon, or avoiding it completely and just going with your own website?

Steve: I wonder what Greg is going to say here.

Greg: [inaudible 00:03:25] through that first question. So yeah, I’ll go ahead and take this one to start. There’s going to be mixed opinions with the different speakers here. Me personally, I’m under the belief — I think I’m the minority here that like to me everything about Amazon is just so much easier, regardless of how many of the Chinese suppliers are trying to go direct there. And when you really factor into the time that you spend on doing everything, whether driving traffic to your site, building your own e-commerce sites, whatever else that that time and effort and brainpower is best spent on Amazon. But let’s hear some of the other guys’ opinions because I know you have conflicting views.

Scott: I think for me personally, like I would say, and I’m still like advising like people launch on Amazon. But I think it also — you have that additional channel that’s being built alongside. I think like Greg said, I mean, the traffic’s there, everything is built, like, all you really need to do is kind of like set up your listing, and optimize and all that stuff. But in the same token, if that’s all you do, and you don’t give yourself the outside channels, or the assets to drive traffic, and even push the algorithm, or just take your traffic and direct it wherever you want, I think it’s risky.

And I think then you could have a product that’s doing well with 1,000 units and then all of a sudden, a Chinese seller comes in, hijacks whatever, and all of a sudden, you’re fighting that and you might be on to your next product, I would rather have the ability to be able to take that traffic and direct it to where I want. So that’s where I’m kind of leaning. And that’s where I’m advising other people to do. But I think for launching, we’re always launching on Amazon, like, first. That’s kind of how we’re doing it.

Mike: Yeah, so for me, I mean I agree with all these guys. I mean, I think that until you have a business that’s large enough to start diversifying that you should just be on Amazon 100%. I mean, for me, it’s a million or 2 million, whatever that number is. I mean, Amazon is where 50 something percent of all e-commerce searches start. So it has a tremendous amount of built in traffic. And if you’re a solopreneur like just getting started, like trying to do all the other things to manage a business that is required when you have your own store, I think it is overwhelming.

But you also still need outside traffic sources I think to — if you look at what’s the future of Amazon, I think outside traffic sources, your own list and ways to dictate where that traffic’s going whether it’s to Amazon or not, is going to be really important. And I think the other thing that’s important when it comes to the Chinese sellers thing specifically, is not to develop like exact me too products. If you work more on a brand then a look and feel and improve upon products and make them your own, add functionality or do something different so it’s not like the exact same product that 10 other people have up there, I think, is how to win in the future on Amazon over the next couple of years.

Steve: So I actually agree with Scott and Mike and to a certain extent Greg. I don’t have that much to add, except for the fact that the way I’ve been advising people these days, is to start out on an Amazon for sure. It’s an easy way to get quick wins, get sales. And then once you know that you’re going to stick with that product line or that brand, then start your own website and start building up a list, start building up assets, because it’s really hard to establish a brand on Amazon that’s memorable.

To this day my mom still thinks that when she shops on Amazon, she’s buying from Amazon. She doesn’t even notice the brand star per se. And again, it depends on your product. You need to be able to differentiate your product in order to succeed these days. Don’t tell me too products, like Mike said.

Toni: All right. Well, staying on the Amazon thread and this is a real beginner question and I think you guys probably have some good advice for this. But if you want to get started on Amazon, do you recommend a course or video that people should be using as a resource? Steve you got anything?

Steve: Actually, we all have our courses [overlapping 00:07:27]. We all have stuff now. Greg’s stuff is free I want to say. So like, you don’t want to pay any money. Actually, we all have free stuff. Actually, we all have free stuff. Just go on all the websites, I’ll go ahead and link all that stuff up in the membership site. And you can just go and take all of our free stuff and then decide for yourself. I think that’s the best way to do it.

Toni: I think too, if you have a virtual pass which you do if you’re watching this, there’s a lot of sessions from this year’s summit that will help you get started on Amazon as well.

Steve: Yeah, we all have different styles too and that’ll really come through as soon as you start looking at some of the free stuff. And so you just want to gel with the person’s philosophy that most resonates with you.

Toni: Yeah, but everybody’s got a ton of free stuff. So, definitely grab that stuff first, and see who you connect with the best I think would be my — since you didn’t ask me, I’ll say that. Okay, let’s see what else? Okay, so this is one a little bit off Amazon. What is the best way to get traffic to your brand, Facebook, Instagram? Would you start with paid advertising? What are your recommendations?

Mike: So it’s probably going to be market dependent. So I think that the younger the crowd probably more leans towards Instagram and orders leaning towards Facebook. Women seem to lean towards Pinterest or Instagram more heavily as well, versus men, just from what we see. We run three different brands. So like, for instance, Tactical and ColorIt do really well with Facebook and WildBaby does better with Instagram.

I think that starting with paid traffic is probably the way to go because if I guess the alternative that you’re asking about would be organic traffic or SEO which takes 18 months to really ramp up. So, if you need quick wins, faster revenue in the door, faster fetcher your motto or your goal before right now then I would work on getting good at pay traffic, because you can get basically instant wins with that once you get over the learning curve.

Steve: A common question I get asked is why don’t you just start with Google or Facebook? So, first of, I just want to say that when you’re starting out, you should probably just choose one and become really good at that one channel instead of just trying a whole bunch of different things and failing at everything. That’s just a common thing that I tend to see, they try something once, it doesn’t work, then they give up. So, you want to choose one of the other. Google and Facebook are the largest players and it just really depends.

So, if people are out there searching for the thing that you want to sell, then Google will tend to work well. But if people aren’t actively searching for what you had to sell, then Facebook will tend to work better. And Google in my experience that we run Google ads and Facebook ads, and our Google ads are actually very profitable. But it really depends; Google tends to be a lot more expensive. And the way you want to start out with Google is you want to probably just start out with retargeting and just trying to get people that have already been to your site. And if you have to choose the different Google flavors to start with, I would start with Google Shopping.

And the main reason for that is you have an image, and you have the price. And so when someone clicks on the ad, there is a much higher probability of them actually having the intent to buy a product, and of course there’s Facebook ads. I think Facebook ads; the interface is a whole lot easier. And again, if you’re just trying to get leads or if you’re just trying to get some traffic to your site, then Facebook ads tends to work really well. And as Mike said, it really depends on your demographic.

For our demographic which tends to be older people, a lot of older people are on Facebook, including myself, and my mom and sister, those platforms tend to work well. Google I found is just really expensive and you have to spend a lot of money to kind of train Google to understand where your conversions are coming from, and only then will your prices start to come down.

Scott: And the only thing I want to add to that is it’s one thing to grab traffic from the paid side of things. But I think the really important part is, and I think Mike talked about that a little bit is like, understanding who it is you’re targeting, and trying to get really focused on that. And if you do have your own web property, to instantly put a pixel on that page, so you can start to build that custom audience as soon as possible. That’s with Facebook that is because we can get traffic pretty much on any platform. But if we have the right traffic, that can be a big difference between converting and not converting.

And then also knowing where to send them, whether it’s your own website, or if you’re going to do a coupon, let’s say, for an Amazon thing I would always intercept that with an email address in exchange for the coupon code. So I have that opportunity later to be able to target them and they also raised their hand. So, that’s the only thing I wanted to add, just make sure that you understand who you’re targeting.

Steve: I also want to add that you don’t want to be driving traffic to your site unless you have a way to retain them. So these days, it takes up to like eight touch points before someone is going to buy. And so you have to have things in place to bring people back to your site, either through email, through messenger, through pixel and retargeting ads, you have to have all that stuff in place, so that you’re maximizing the traffic you are paying to get to your site.

Mike: One other thing I want to mention about Facebook ads I forgot to mention earlier, Facebook ads are very dependent on the type, but I already mentioned the type of demographic, but also the type of product. So, Facebook ads work way better if you have an audience that’s aligned with your product. So as a for instance, there’s an interest group on Facebook of people who like coloring.

So it’s very easy for us to target people for that. We have the Tactical brand. It’s very easy to target people who like camping, or hunting or fishing. The example I always give for IceWraps is it’s hard to target someone who has aches and pains because that’s not an interest on Facebook. So, it’s also very product dependent. And some things just do not and will not work well on Facebook because of that.

Steve: Someone just asked in the live chat. I thought I just answer this real quick. Do you have any advice for tricks on configuring an email campaign to minimize the chances of those emails going to the dreaded promotions tab? In our experience, even pure text emails end up being flagged as marketing emails? Yeah, the way you get out of the promotions tab, so there’s one way that when someone signs up, you can actually give them a tutorial on how to drag that email out of promotions tab into the inbox so that you’re regarded as a safe sender. And then at that point, all of your email should go to their inbox.

If they don’t do that, well, then you actually have to send out good emails that people actually open. And over time, Google or Gmail will learn to not put that email in the promotions tab, because you’re actually engaging with the person they’re emailing. Any of you guys have anything to add about that?

Scott: Yeah, the only thing I want to add to that, I’m not sure if it’s 100% across the board. But what I’ve found, it seems to work is number one; we need them to open the email, right. And in order to get that first email open, we need it to end up not in their promotions tab. So, what we’ve played around with is not having anything promotional or anything that could flag it as spam. So the title could be like, thanks, or something very generic. And then inside of the email copy, again, no links, just maybe, hey, if you have any questions, let us know, reply, keeping it really lean. And then that will allow you to possibly get in the inbox. And then if they do open it and touch it, it also signals that they want to receive that email. Now, again, I’m not sure if that’s going to work across the board. But we’ve seen, we found that to work really well.

Steve: Actually, one thing that does work across the board is you say something in the first line, hit reply to this message and say, hey, and asking a question.

Scott: Yeah, that one works well, yeah, or just like, what do you think about this email, or what’s your favorite type or something else, and they respond to those, it helps train Gmail. But I would say, there’s also there’s no golden ticket for this, like, Google is very smart. I’m sure they’re using machine learning algorithms for this. Over time, they’re constantly changing it and everything else. I mean, if you’re sending emails that are very promotional in nature, it’s going to be like a constant battle that oval overtime and Google is usually probably going to win.

Mike: We use a program called GlockApps, G-L-O-C-K-A-P-P-S.com, and it allows you to send your emails to a bunch of seed addresses. And it’ll tell you if they’re going into the promotions tab, or the primary tub. And we’ve had really good luck basically doing that, and then refining the email over two or three, or sometimes 10 edits depending on what we’re doing. And it’s some of the things these guys have already mentioned, some of the wording and stuff is a lot of it, the number of links, if you have an image that needs to be compressed and be smaller, things of that nature.

And we’ve had really good luck getting emails from promotions to in the inbox by doing that, and that increases our open rates typically on those campaigns by like 50%. So instead of having a 20% open rate, we’ll see 30% open rates on ones that are in the inbox versus promotion.

Toni: All right. Well, speaking of tools, the next question that we have is how much software should I have in my business? It feels like I have too much, one for sales tax, one for inventory, accounting, it adds up to decent monthly expense, what do you guys recommend? Maybe keep using the software and focus on the 80/20 of my business?

Mike: The only tool that I have that I pay for is Jungle Scout.

Steve: I agree.

Greg: Catch you.

Mike: That’s the only one you need.

Greg: Everyone is always, and of course I’m open to software solutions so it’s rare to hear this from me. But like, everyone is always looking for like software platform, it has to be like magic bullets. Like what piece of software do I need? It’s like, well, like, what pain points do you have in your business? Are you having a really hard time managing your inventory? And so then that’s probably money well spent. So, I would say more so be thinking about like what kind of ROI are you getting from these and like what pain points do you really have, and then look for software to solve this particular one.

Mike: It’s hard to get by in this business without a whole bunch of different tools. And I think the person is probably coming from the same level of frustration that I have. I look at that line item on our PNL every month and it continues to get bigger and bigger because you’re right, you need now especially with this tax rolling that just came down, you need something like a tax jar of relearning, you need something like an inventory management software and a shipping software and accounting software and an email platform.

And next thing you know, you’re spending mid four figures or even getting to high five or four figures in just SaaS applications. And yeah, definitely eats into your bottom line. But there as Greg said, I mean, we look at the ROI of those. I mean, the ones that we continue to keep are ones that add some benefit to our business that more than pays for the cost of the subscription.

Steve: I think it’s just much harder to do this when you’re first starting out, right? You’re not making that much money, and then you having huge bills. And so…

Scott: I wouldn’t get them though at that point then, right? It’s like, I think you have to add as you need, right? If you want to free up — if you find yourself at the end of the tax season wondering, why you’re spending a week or two weeks trying to figure out where you are, and you don’t know where you are in your business, then you need an accounting solution, right? But I mean, probably should have that beforehand.

But like, yeah, there’s a lot of the bells and whistles out there I think are the ones that are like tools that are like, you’re going to find the ultimate like silver bullet like, no, like those I don’t think we do have to have, maybe you get it for a month, and then maybe you cancel it. But for the most part, you need the basic ones to run your business, but when you need them. I don’t think just because you have a business doesn’t mean you need to have an inventory solution when you don’t have a lot of product, right?

Steve: Yeah, I mean, I recommend starting out with the starter plan of the web app. And then as your business grows, then grow up, sign up for the professional Jungle Scout web app. Right, Greg? It does take a nice trajectory of growth as your business grows.

Greg: Yeah.

Toni: Steve, I know you don’t like to pay for anything.

Steve: Yes, I don’t. I’ll just take like one minute talking about my philosophy.

Toni: Yeah talk about your philosophy because I think it’s a little bit different than most people.

Steve: It is. So what I tell everyone to avoid is like paying for like stupid apps that don’t do very much that carry a monthly fee. There’s a bunch of these on Shopify, for example. I’ll just give you an example of something I just did last week. So there’s this program called Funnel, which is basically a countdown timer that you can create scarcity in whatever you’re trying to sell. And they wanted $80 a month for that.

And it took me two days to replicate that, and I just sat down and wrote that and then I saved $80 a month essentially. Now, and not all of you guys are probably developers, but a lot of these stupid things you can probably just hire someone to do and then you won’t have that cost forever. I don’t advise this for everyone, and thanks for bringing that up Toni.

Greg: I guess that’s one of the tricky things though like to me hearing that like, man, if I just spent two whole days to do something, it’s like man, I’d rather just spend the 80 bucks a month to solve that problem to save myself two days.

Steve: But I actually also enjoy doing that stuff too.

Scott: Let me ask you this Steve, do you like to go out to dinner or do you like to cook at home?

Steve: I prefer going out to eat.

Scott: And you’re willing to spend that money?

Steve: I am.

Scott: Even though you can go…

Steve: Well it depends…

Scott: I would have thought you would say, honey, we’re staying in tonight [overlapping 00:20:52].

Steve: …bill is ridiculous actually; we go out practically every single meal.

Mike: I mean, well, he’s told me probability is he prefers to go out because he doesn’t like Jen’s cooking. But…

Steve: No, I would never say that. I would never say that. We did have this, just like 30 seconds, we didn’t have this like Chinese chef that we used to hire to cook meals for us. So we had to go out, but her for food was just so terrible to the point like I used to dread coming home to eat. And then one time I actually got Chinese takeout and I ate it in front of her by accident. I wasn’t even thinking she was there cooking and I was even take out like Panda Express. So anyways, next question Toni.

Toni: A little Steve therapy session. Okay, here’s one for people who have a B2B business. It says what is the best thing I can do to drive traffic from my website, which is a B2B business, in your experience, does Facebook work well for this? And this, I think piggybacks a little bit on what Mike was saying earlier about you have to know your audience. So, if you have a B2B product, what’s the best solution for driving people to the website?

Mike: I can talk about the Facebook part specifically first. I mean, you can target things like job titles. So, depending on again, the type of product you have, you can target the procurement manager titles or things like that. It’s very tricky, though and it’s tough. And it really depends. It’s very, very product specific. We have some B2B component to our IceWraps business. And we’ve tinkered with this without a whole ton of luck. What has worked better is just as Steve was saying earlier, Google ads seemed to work better for these things. When people are actively looking for that product, you want to be in front of them.

So whatever, again that’s product specific. But if it’s something like custom gel ice packs, as a for instance, one of the things that we do that does really well for our B2B business, we just, we want to be ranking front and center when they’re searching for that, at that moment when they have that pain points. Facebook ad is still tougher, because they’re not looking forward at that moment. And for businesses, that type of marketing is much more difficult to kind of get over that hump than it is for an individual looking to buy something that’s more spontaneous. So again, it’s product specific. But businesses don’t typically spontaneously go out and buy a whole bunch of widgets.

Steve: I think an indirect way of doing it is to sell to the consumer and see who buys a lot of whatever you’re selling. And then reach out to those people or stock them, find out if they work for a larger Corporation, and then reach out to them and give them special coupon codes and special treatment. Like I went over this in my breakout session at the summit, but this is basically how we get B2B customers. As Mike was alluding to, on Facebook, we did try once a campaign because there’s, you can target like event planners and whatnot on Facebook. And we were trying to do that and our ad was basically giving out free samples of our napkins for these events.

And we ran it for a little bit and we had limited success, although I think we did get one or two customers. But as long as you just get like one or two of those guys who buy consistent from you, that can make your entire campaign worth it. But we weren’t getting that many bites because it’s hit or miss. They just happen — they have to be actively looking for whatever that product that you’re supplying is. And so that’s going to be hit or miss.

Toni: Anybody else got something to add? Scott’s nodding furiously, so I don’t know.

Scott: I was agreeing with him. I think all that’s a great idea, do it. But I think whenever you’re going to a B2B, it’s like you have to find either that purchasing person, right, or the person that’s supplying. If you’re selling like k cups for the office, it’s like you have to be able to target the person that’s making the purchases. And this is a little bit harder, but like Steve was saying, if you find even one or two, that can be well worth it, because it’s just kind of it’s like recurring revenue, you know? Yeah, I agree. I think that it’s all good stuff.

Steve: But one thing we used to do when we were really scrappy is we used to just cold call wedding planners and event planners and offer discounts. I think that will work better than Facebook ads, because you’re going through the — I don’t want to say Yellow Pages because that dates me, but you go out there and you find companies who might be interested in your stuff, and you just establish a conversation.

Mike: Hey, Scott, how have you been able to sell garlic presses to restaurants?

Scott: It’s been a challenge. But we’ve reached out to some of the top chefs in the market.

Toni: Waiting for your Gordon Ramsay partnership.

Scott: Yes, yes.

Toni: All right. Okay. So this is another one. I think this is basically if you already have, if you’re already selling, what is your mindset for trying new things or launching tests for new ideas? What parameters do you set for yourself regarding budget, test period, anything?

Steve: Is this for ads or for products?

Toni: Let us limit it to introduce new products.

Steve: New products.

Scott: Okay. But so it’s you’re talking about in the same brand though? We’re not talking about jumping to a different project.

Toni: Well, they weren’t specific.

Scott: Because that’s immediately what I started thinking about because as entrepreneurs we’re like, oh, wait a minute, there’s something we can do over there. If it’s in the brand itself, that’s different. And we can talk about that. But if it’s projects, like let’s start a new venture over here, I’d be careful on that.

Mike: If it’s within the same brand, like one of the best feelings in the world when you get to a certain point within your brand is to just be able to like send out an email and pull your current customers, and ask them what they want. It was like a wonderful, like year to 18 months for ColorIt and new products. We kind of got to a certain point, we had a core group of people, we sent out a poll, like what do you want the next book title to be, or next product? And we polled people with some multiple choice stuff, and also right in. And yeah, we didn’t have to come up with any ideas for a very long time after that. So that was a really good way.

Scott: Like, let me ask you, like so on that survey and stuff that you did, how many people do you do you think that you sent that to or that you didn’t send it to, how many responses? I think people would be interested to know that because some people think, well, I got it this massive list and this massive amount of people coming in and giving me this stuff. Like, where could — or when could someone start to do that?

Mike: We didn’t, we weren’t smart enough to figure out to do it until I think further than that we needed to. I think that if you got at least 1,000 people that have purchased from you, I think it’s probably a good barometer for that actual purchasers. I think it is probably a point where you can send it out and get not false positives, right. Because like, you can end up with like some variance issues where like if you’ve only had 100 customers, three people wanting something can really throw that off. But yeah, when you kind of get, I think a point where you have 1,000 or 2,000 people that have purchased from you.

We already had like over 10,000 customers by the time that we sent this poll out. And the thing that was interesting about it, we do a thing called ColorIt Live every week. And we’ve been doing now for a couple years. And we had a couple of people in the ColorIt Live every week asking for a ColorIt by number book. And this was actually when we decided to do the poll. And I was like, okay, well, we’re going to go out and do this ColorIt by numbers book. And in that smaller subsection of just a couple of hundred people a week that will come to ColorIt Live, it seemed like this was something that was like going to be really, really in high demand.

And then we did the poll, and it was literally the least ranked one. So like if you can get a larger group of people together. And that basically stopped us from doing a disaster because it would have been a much tougher project than our typical stuff. And those same couple of people still ask all the time, when are you coming out with a ColorIt by number book? We know that there just isn’t going to be any demand there for that. And the books that we did release because they were the one that, we ended up releasing first from that was the mythical and fantasy book that we do. And it’s still by far and away our best seller to date, because we polled our customers and we knew exactly what they were looking for.

Greg: Oh, I had something to that, since the question wasn’t too specific I’ll just talk real quick about kind of like my philosophy about too many projects as an entrepreneur. I think Scott started to allude on this a little bit about like always kind of chasing the next shiny object, and I’m super guilty of this. But like when I look back, kind of like throughout my career, I’d say like as an entrepreneurial, most of the biggest mistakes or little same mistakes that I’ve made is like trying to do too many like different things instead of like really doubling down on like what’s working.

It’s like when you find those one or like two marketing channels that work really well for you, don’t feel like you also need to be going out and doing Snapchat ads and this and that, the other thing. It’s really easy to do when you hear these things or you hear someone else is having successes, usually doubling down on what’s working for you is the better solution as opposed to always trying to do more and more and more and more.

Steve: A real question, a quick question on the live chat. Do you guys use brand ambassadors in your brands and how do you structure that? What are the requirements and benefits for a brand ambassador? Scott that’s you, right, or?

Mike: So marketing or are you talking about like an actual like…

Steve: Like over space in the company, I guess? Yeah.

Mike: Okay.

I wanted to take a minute to talk about a brand new show that Scott Volker of the Amazing Seller, Greg Mercer of Jungle Scout, Mike Jackness of the EcomCrew, and I are launching in the fall of 2018. It’s called the 5 Minute Pitch, and it’s a Shark Tank like show where we’ll be giving away $50,000 to one lucky business. 32 companies will be selected to pitch Greg, Scott, Mike, and I, and the winner will be selected on a live show with all of us. It’s going to be an awesome show and we’re going to start filming in September. If you are interested in submitting your business, head on over to 5minutepitch.com, that’s the number 5-M-I-N-U-T-E-P-I-T-C-H.com. Now back to the show.

Scott: Yeah, for the brand that we’re working with now, we do have a face. The question I get a lot of times, what if you don’t have a face? What do you do with that? I say, then you can find someone that could be the face. And I do think there’s a lot to it as far as giving you an advantage. Plus, that person is now kind of representing your brand and also people start to buy into that person. Obviously, it has to be a likable person, or it has to be someone like we were just talking before we even got on here about being animated, being excited, like those things play into that.

If he just came on here and go, hi welcome. I’m going to share with you how to press garlic today, like you need that. But I think it’s important if you can have it. I don’t think it’s a deal breaker if you can’t. And I think if you’re struggling with finding that ambassador, that someone that could be the face, then I say go out there and find someone that enjoys doing what — in your market, doing what it could be to help your market or like in ColorIt like color, right? Like finding someone that is that person and then offering either to pay them weekly to do an hour or two, or possibly even have them come in on the company with a small portion of the company depending. I think it’s a huge thing if you can find one.

Greg: I agree with Scott a lot on that, like people like purchasing from like other humans and people really enjoy like a little bit like behind the scenes like what’s going on in the company or who they’re purchasing from, or those types of things. They like want a much stronger connection, you’re kind of like building a tribe that’s like a fan of this. For example, like Mike Jackness, I don’t think I’ve seen like him all over the ColorIt stuff. But I have seen videos of like this other female personality. I don’t know if that’s a full time employee or what.

But I think like anyone could do this pretty much across any different type of company or product, but just giving like a little bit more like an inside look at what’s going on behind the co– on inside the company or kind of like who they’re buying from. It’s like they’re buying from a human instead of just this company object.

Steve: I think we can attribute the success of ColorIt to the fact that Mike is not the brand ambassador.

Scott: It’s true.

Mike: Actually I accept that’s true

Toni: Okay. While we’re speaking about personalities, we have a question for Scott. Steve and I actually got a little laugh out of this question earlier. Scott, you’re a pretty quiet and reserved in person, but your personality packs a punch during the recordings and videos, how do you make sure you’re engaging to listen to? I don’t, I don’t think you’re quiet and reserved in public.

Steve: I don’t either man.

Toni: We have to like mute your microphone in there.

Scott: Yeah, that’s a little odd but okay. Yeah, I’m not really sure. I think whenever the video is on I guess I get excited about what I’m talking about. And generally, in this case, it’s business. But I could be talking about I don’t know, if I’m into dirt bike riding, like I’m going to be excited about that. I think people have told me before like I could get excited about anything if I’m — and get people excited about it. But in person, I don’t know, I think I’m a little bit more laid back because — not laid back but I think because I want to listen to those people versus me just being like listen to me.

So when you’re there, it’s like a two way conversation versus here it’s kind of like you’re kind of filling in the voice. Now we have people on the panel here. So it’s a little bit easier. If you’re doing a one off podcast by yourself, you really got to keep it moving. And I don’t know, for me it’s hard to slow down. But if you have people that kind of interject the stuff it’s better. But I think also in person I like to try to listen to where they’re coming from. But yeah, I think, I don’t know, I do pushups and stuff before I get on and everything. I don’t, I don’t really. Hopefully that answered that question. Next question.

Toni: All right, all right. Okay speaking of podcasts, and I guess this is a question for everybody since you all have podcasts. What is your podcast system workflow?

Scott: Oh, I love one, go Steve.

Steve: Mine is really simple. I basically…

Scott: Pay for anything.

Steve: I don’t pay for anything, except for Libsyn. I use Libsyn to host my podcast. I use my podcast to meet people. So I’ll basically just reach out, I use a tool called Meetme.so which I am paying for by the way [inaudible 00:34:50]. And I basically just schedule people, I record it, and then I dump it in my Dropbox and I have an editor who edits everything and then puts it up on my site. And that’s, it’s pretty much good to go. I don’t know, you guys flow is probably similar, right?

Mike: That’s very similar, like for me when I started it, I knew that if it became a burden that I just won’t stick with it, like I had to make it as simple as possible. So, when I record a solo podcast, I just use, I think it’s the built in app QuickTime, or I think it’s QuickTime. Oh, yeah, QuickTime. And then I use Call Recorder if I’m recording somebody over Skype. And I just drop that on Dropbox and Abby, who takes care of it for us now, she’s a full time employee for us, but it’s a Filipino employee who makes like 700 bucks a month.

And so she’s doing everything for EcomCrew. But also one of things that she does is produce the podcast. So she’s putting on the bumpers and the commercial spots, and the intro and autro and like edits, and does all that. And it’s super easy for me. Like, typically, if it’s a 30 minute podcast, I’m spending 35 minutes of total time to do it.

Scott: Yeah, and I’ll just say mine in the beginning I was everything. I was doing you know, I was recording, editing, even trying to put show notes together, no transcripts, but then I started to see that it was becoming a burden. And also, I was saying like, okay, well, the podcast wasn’t making any money in the beginning. So once I started to make a little bit of money from the podcast, I reinvested that back into hiring someone to do show notes professionally at it, and then also do transcripts. And so now my workflow really, I guess my biggest thing is preparing it. I don’t prepare like long, but I like to prepare three or four episodes so I can knock the three or four episodes out.

Generally, Tuesday and Wednesdays are my planning and recording days. And then I’ll just record in GarageBand, I use GarageBand, and then from there export, and then I will take that file and drag it up into Dropbox. And then they know what to do with it from there. And they even post it on the blog and all that stuff. And now that I’ve added YouTube into it, I’ve got a whole another flow for that, which is becoming a little bit of a challenge but I’m figuring it out. But that’s pretty much the podcast is really planning, recording, and then uploading it. Once it’s set up, it’s kind of like Mike was saying, it’s just like you record and then you just add it to your Dropbox.

Mike: If you’re asking the question, you’re probably thinking of starting a podcast yourself. So, just one piece of advice with that is that probably for the first year or a year and a half, you’re going to be talking to yourself and your mom. It takes a long time to kind of get a following and traction and almost just like blogs, like almost everyone gives up within the first year because they don’t realize like how much work and dedication it does take to do it week in and week out. Or like Scott does like three or four days a week now or whatever, it’s not a small time commitment.

And typically, people just fizzle out, or you’re excited about it to start with, and then you just don’t see the results as Scott was saying. You don’t make any money from doing it to start with. So, don’t even bother getting started unless you really know that you’re going to continue with it.

Scott: Let me just add… Oh, sorry, Steve go ahead.

Steve: I was going to say, my mom still doesn’t listen to my podcast.

Scott: I just want to add one more thing and then Greg you chime in. It’s like I’m realizing that there’s people in the e-commerce space that could start a podcast. And to me, you could stand out because there’s not as many people doing podcasts as there is people doing YouTube. Now, YouTube is good, because it’s visual and if you have stuff to demonstrate, I think it’s great. And I think eventually, you can do both. But a podcast if you have something, I know Death Wish Coffee has their own podcast. Now, it’s not about drinking coffee. It’s basically an entertainment show. But it’s also they’re now sponsoring the show in a sense, right.

So, if you have a way to connect with your audience and you enjoy doing it, and show up at least once a week. Now, think about that once a week. I think everyone can do once a week, 52 weeks, I mean, 52 episodes. And even if you’re only getting 300 listens, or 500 listens, it’s still people that are connected to you. And I haven’t found anything as close as connecting with my podcast listeners even YouTube, because people actually listen longer, and they get to know, like, and trust you to me faster. And you can’t really fake that.

So anyway, I just want to kind of throw it out there. If you have an e-commerce brand and you’re thinking about it, like I say, do it and you can commit to once a week. I think it’s a great thing. And I think it’s underutilized right now.

Greg: The as far as workflow, it probably sounds kind of like a broken record there because I have someone else schedule it, I just shove to record, it gets dropped into a Google Drive folder, someone else edits it and posts it so not a lot of work Kind of like on my end. To kind of tag on to what Scott is saying though, I’ve had a little bit different results with like podcasts versus YouTube. The one really nice thing about YouTube is or the biggest downside to podcasting in my opinion is like the discoverability in the search functionality to it.

So, once you like really putting your time, like all these guys had, you’re in those top hundred spots, then all of a sudden you do get discovered, just like from people browsing iTunes, or whatever else or like recommendations, but there’s no good search engine inside, I’d like to find podcasts like there is YouTube, or there’s nothing close to as good as what YouTube is. So I’d actually, if you were just starting out in my opinion, I’d probably actually be more interested in starting a YouTube channel targeting keywords that I know people are searching for to start to build up that audience a little bit faster. But yeah, just a little bit of a different opinion there, probably no right or wrong answer.

Steve: I think YouTube is like yeah, like you said, it’s a great way to get people to come on, but they’re not like the most loyal, whereas your podcast listeners are going to be very loyal. It’s like part of the game.

Scott: When you subscribe to a podcast like I’m usually listening to like all those new episodes where that’s not really true on YouTube. I’m more so like I guess I’m not subscribed to that many YouTube channels, right? I’m searching for something, I find it, then I’ll watch it. And I think with YouTube also, your attention span is a lot less, right. So you’re on there, you might have a 15 minute video and someone watches two minutes. Now, which you might want to do is plan it to where you can do a YouTube and then turn that into a podcast and then you can get two things out of one recording. So that’s another option. And really not a lot more work.

I mean, it’s just two different channels, as long as you can basically set that up to where you’re not like saying visual things that won’t make sense if you’re listening. So you got to kind of be careful there. But yeah, I agree. I agree, Greg. I mean, yeah, YouTube is a great platform. And I think there’s still room there, it will take time. But I think if you can then get people to listen, I think on a podcast, they’re going to listen longer, which then would get them, the people that are listening are going to be I think more connected if you have a story or if you have a brand that can utilize that. Not all brands will be able to utilize that.

Steve: I think we’ve beaten this one to death, Toni what’s the next question?

Toni: So the next question comes from the chat and it’s about oversize products. I’m not familiar with oversize products, so I’m hoping I’m explaining this correctly. It says it’s from — we have no luck trying to have Amazon not split our oversize product container. I wonder if it is because our oversize is not really oversize enough. For example, the product size is 20 inches by 20 inches by three inches.

Greg: I don’t think that really has anything to do with it. Typically, like there’s oversize warehouses, there’s some that I think are mixed and some that only do standard size. Amazon is typically going to want to split up these containers usually into three different distribution centers. Some things you can do to kind of hack it, usually if your ship wrong, like the best ship from zip code is one like in Southern California and then hopefully you get the Menlo Park distribution center. Sometimes that works.

I know some people do like say that they really have 1,000 units, they’ll tell Amazon they’re sending in 3,000 units that gets split into three shipments and they only fill one of them. But I do know like over time that Amazon usually send you like warning email saying that you’re going to get in trouble if you continue to do that. So that is against the rules. But I do know some people do that. But fact of matter is that Amazon wants you to send in to multiple distribution centers.

Mike: So we do that trick Greg that you just mentioned. We split up, I know it’s a little bit gray hat, obviously. But what we do is actually send in those other shipments eventually. So, like we do send them to the other two centers. We don’t delete the shipments. There is no like time frame on it.

Greg: Uh that’s a good thought.

Mike: Yeah. So like where I’ve heard people getting in trouble is like they only ship into one and they create another shipment and only ship into one and create another shipment, and eventually Amazon will warn you for that or give you trouble. We’ve never had that problem because we’ve never done that. But what we do again is we will do 3,000 units, it will produce three containers worth of stuff for three different centers. Shipment one will go on to Ontario, then when we’re restocking the next time we’ll send it in the Arizona or wherever it wants it to go. And then Florida or wherever, whatever it is, we stagger that out in advance.

Greg: That’s a good hack, I like that.

Toni: All right. Okay. Sticking with Amazon, Brand Registry 2.0, what’s your take on avoiding inauthentic product claims, products that are not counterfeit but may have not come from an Amazon approved source? If I’m doing wholesale or arbitrage, I have no way to know beforehand what Amazon’s approved sources are.

Mike: They just came out with this new program that they just introduced in the last two weeks called transparency that we’re going to think about getting into. But basically, you need to serialize every single product before sending into Amazon, they give you like these codes to put them on the package. And that guarantees that you’re the only seller that can sell it on Amazon.

Scott: I didn’t know that, that’s cool.

Mike: It just came out with I think it’s in beta and it was an invite only thing I think right now, but you can…

Greg: And that’s through Amazon.

Mike: Yeah.

Greg: And is that Brand Registry only?

Mike: Yep, yep.

Greg: Okay, so you got to have Brand Registry 2.0 which requires a trademark, which could require eight to 12 months.

Mike: Correct.

Scott: So that’s why it is important to get that trademark as soon as you can.

Greg: But with the question that the person was doing like retail arbitrage and then sending stuff in, they’re getting in trouble for it?

Toni: It sounds like that was probably the direction of their question was a wholesale or arbitrage?

Mike: Hmm, I misunderstood. I thought that they were — it was their own private label brand that they were also wholesaling and then the stuff was ending up on Amazon.

Toni: That was a good tip though Mike. I don’t think anybody knew that.

Greg: That was good.

Scott: But I mean, as far as that goes, I don’t know if there’s too much that you can do about that. I mean…

Greg: Don’t buy a lot.

Steve: I would change your business model long term, like yeah, if it’s making you money right now, like pay the bills for sure, but be thinking about another way to make a living long term with Amazon.

Scott: I think that’s always risky whenever, I mean retail arbitrage is great for beginners to get started, and stuff a lot of times. But again, you don’t want to be buying 1,000 units of something with RA, especially because that can happen. I’ve seen it happen to people all the time. They’re selling something that’s selling well, and all of a sudden they get told that they can’t sell that certain item anymore and they’re stuck with whatever how many units, they got to go sell them on eBay or whatever. So just be careful.

Greg: For the record, Amazon does not like the name Brand Registry 2.0. They emailed us a few weeks ago and asked us to change our blog title. It’s not called Brand Registry 2.0. It’s just called Brand Registry.

Mike: Ha, ha it’s not new coke. It just coke.

Greg: All right.

Steve: By the way we might shut Jungle Scout down if you don’t comply.

Greg: Beautiful.

Toni: All right, what plans if any, are you making to address tariffs and possible trade wars between the USA and other countries, for example, establishing a financial store presence in overseas markets, changing up your shipping methods, slowly raising prices, solidifying your position with more brand loyalty, emphasis on trademarks and patents.

Mike: I mean I’ll take this one first.

Greg: USA, Jackness is pretty in tune with all these things.

Mike: Yeah, I mean, this has actually been like a long term — I haven’t ever like talked about this. But this is a long term strategy of ours. When Trump I think when he first got elected, it was like when he was president elect, basically, he had come out with saying that they were going to work on the windows border adjustment tax, and that really scared the crap out of me. And the border adjustment tax basically is a tariff on anything coming into the US from anywhere, and you can offset that by things that are made in the US. So, that’s when we actually went out and bought survivalfood.com.

And we’re in the process right now, of like finally having that come to fruition. We waited to get the thing ranking towards the top of Google. So it ranks between the first and third position now for survival food, and we’re going to start making our own food in the US. So, our strategy has been to have things that are made in the US that can offset these types of things. Now, the way that it has played out, unfortunately, for that particular plan is that the way that it’s playing out now is not a border adjustment tax, but just basically cherry picking for whatever reason things that the administration or whoever sets these rules like has a thing of their way around for.

I can’t quite figure out the pattern here, but it’s been steel products, or electronics or whatever. And it’s constantly like a different thing, which is that’s the scary thing for business, it’s hard to plan. But for us, I think the balance is going to be having some things that are made in the US. So those products for us, again, are going to be the food, the freeze dried survival food stuff that we’re going to make like a really big run out, I’m really excited about. And the other thing that we’re working on for WildBaby is some shampoo and body wash and stuff that’s also made in the US inorganic, high quality stuff that you wouldn’t want to make overseas anyway.

So, just hedging our bets as we get bigger. I mean, and I want to preface all this, that we’re heading towards 10 million this year. And we, I think, have a reason to diversify it. I would not go and do all this stuff if you’re still a smaller company, and things are working well for you if you are sub 1 million or 2 million, I don’t think it’s necessary. But for us, that’s been the way that we’ve been heading the last year or so. And it’s starting to kind of come together now.

Scott: I would just say like Mike said, at the tail end there, if you’re like not at that level, like I don’t know if I would lie awake at night thinking about it. I’d just go out there and build my business. And if it happens, it happens. And I’ll deal with it when I deal with it. But I think it’s a great strategy to be able to do that because you have to offset it. But again, if you start worrying about that stuff, you’ll never move, you’ll just stay stuck.

So yeah, and the reality with a lot of that is it’s most likely going to affect your competitors just as much as it affects you, right. So, like there are probably be some short term weirdness as far as pricing goes, but long term, that price is probably just going to get passed on to the consumers because it’s like most people don’t really have the room in their margins to take that hit. So I’m always Scott.

Mike: The long term there is at least 12 to 18 months, because there’s a period of inventory that’s already in the country. And the thing that’s the scariest part of all that is a bunch of sellers that don’t realize the implications on their actual products. So, there’s a lot of things that are selling on Amazon at a loss, people don’t realize it, they don’t understand all the fees and other things that kind of go into it or they saw other people doing things at a certain price and they brought things and didn’t quite understand the dynamics. This already happens.

So yeah, the short term pain I think would be tough. But again, no, I wouldn’t lay awake at night. These are things that are out of your control. And for me, it’s just like I’m pretty nimble in business and have dealt with a lot of other adversities that are way bigger than someone passing a tariff on one of our products. So I don’t know.

Toni: So what I’m hearing you say is Trump hates colored pencils?

Mike: He does. I don’t know if it was Trump. That was actually there before him.

Steve: Oh, colored pencils are already taxed?

Mike: Those are already under anti dumping tax.

Toni: Because they would.

Mike: Yeah.

Toni: Okay. So, back to a beginner question, what things would you steer away most from launching a product you found with good demand? So, you found a product that has good demand, but what would steer you away from that product, too many competitors, hard to differentiate, etc.

Greg: So yes, both of those, those are the two things I would steer me away the most. Like, if there’s 50 people all selling the exact same product, it’s very hard to differentiate it and sell it. So no matter, yeah, I mean, those are the two biggest things. I mean, I’d be thinking like, whenever I sell a product, especially now, it’s always, what can I put in my listing that can really show the user why they should buy this instead of any other item out there?

So, if I’m selling this glass mason jar, it’s because it’s now in the size people are looking for, the thicker glass or the I don’t know, it comes with the handles or something else. So yes, even if it has good demand, you want to make sure that you can differentiate yourself from the competitors and there’s not just 100 people all selling the same thing.

Scott: And the only thing I want to add to that is, and I think something to be careful of, is even though you do what Greg said, and you get that head start, there still will be people coming in on the back end that will eventually be probably try to knock you off. And that’s where you have to be willing to keep pushing that product heavily to keep it being ranked, to keep yourself above.

So this way here, you’re not going to be just competing again with — because I’ve seen it happen. It’s happened to us. You come in, you’re the one, you’ve made adjustments, and then all of a sudden, you’ve got five other ones, you ran out of inventory, and you’ve got five other new ones by the time you come back in. So what’s going to help you there is having your own assets to be able to then spike sales again when you need to but then also being able to have had all of that history of the sales before they entered the market. So that way there it keeps you ahead of the curve.

So that’s all I would add to that. I think it’s always — there’s always going to be a risk there. But having yourself to where you’re not just the same product at day one, I think is key. That’s just my two cents.

Steve: I think just I teach a class. So just from experience, people always tend to look for like the easy way out. And I tend to have like the opposite philosophy. Like the more work you’re willing to do to launch a product, the more barriers to entry that you’re going to have. So don’t always just gravitate towards the easiest thing that you can do.

Mike: Mm-hmm. I think that’s really important, actually.

Toni: Yeah, so I know we have a hard stop coming up in six minutes. So I think to wrap it up, let — if we could go through each one of you guys. And if you could share one thing that you know, today that you wish you would have known earlier that helps your business, sorry to put you on the spot.

Scott: Wow, that is…

Greg: One thing.

Toni: You got 30 seconds.

Steve: You didn’t warn me about this one Toni.

Toni: Well, I know, I know. Sorry.

Scott: Oh, man.

Steve: Well, I think what I just said will be by cheating.

Toni: That’s cheating but okay.

Steve: I mean, I really believe in it. Everyone’s just always looking for that easy way out magic bullet. But the stuff that is a pain in the butt tends to be the stuff that stands the test of time, at least in my experience. Everything that I do, whether it be the podcast, or blogging, or even like the personalization for our linens, like that’s all pain in the butt, but that’s like our key differentiator for our store.

Greg: I guess what I’ll say here, if I had more time, I would be able to give you a better one. But I’m going to go with what I’m feeling right now. And that is staying consistent and not jumping off of the path that you’re traveling because you see another shiny object, or you think that there’s an easier way or it’s not working. There’s been projects that I’ve worked on that I just haven’t given them enough tension. And if I would have, I’m not sure, I mean, it probably would have changed where I am today.

But in the same breath, I always look back and go, I wonder if I would have just stuck with that a little bit longer where that would have been today and whatever. It’s like, whenever we create a business or something, we always we’re creating something to see where it can end up. And there’s some things that I’ve done in the past that I can think of, that’s like, man, I wonder where I’d be if I would have just stuck with that a little bit longer.

So I think just sticking with something a little bit longer, even though the results might not be there today, as far as monetization, but really just sticking with something and giving it your full attention for a period of time.

Mike: So for me, I would say that it would be I wish that I kind of got the branding and list building stuff figured out sooner. We are in the middle of a product launch right now, we’re launching a new product for ColorIt and we have like that like coveted like new number one bestseller, a little orange badge on there like instantly, like first day. It’s so easy to launch products for us now because of that.

And I really wish that we kind of figured that out sooner, man I went through this period of six to 12 months of just like looking for any product I could find that would sell on Amazon and just getting it up there and not working on improvements and making it better and having everything to be like under one cohesive brand. And working on building a list and the community that we can — that stuff like Steve is saying, it’s like it’s hard work.

And like a lot of days, it doesn’t feel like it’s — we’re just spinning our wheels and it’s not worth the effort of doing all that until days like this week where we’re in the middle of a product launch. And we start dripping out content to these people about this new product. And it just immediately like flies to the top. And like I said, I wish that we kind of figured that out sooner because we have a bigger list right now and be able to go after even bigger and more competitive products.

Scott: My one tip is going to be that — we spoke a little bit about this earlier. But I’m a firm believer that people like to connect with other people to purchase goods from and not just companies. So, having a company that has more of a personality of knowing who’s behind the company, what’s going on behind the scenes. Those are the types of companies that are — those are the types of products that people really like to purchase from. So, I wish I had figured that out earlier on.

Toni: All right. Well, that’s great feedback, guys and great advice. So, we will have, we have Greg Mercer, Scott Voelker, Mike Jackness and Steve Chou, we will have in the show notes, or I don’t know is this going out on in an email Steve, show notes is like podcasty thing.

Steve: Yeah.

Toni: They all have amazing free resources on their websites and their podcasts. In fact, one of the main catalysts for me starting selling not only was meeting Steve, but was a podcast that Scott had done in another different e-commerce podcast. So, you can get so much free stuff from these guys and they also have some paid courses as well. So, thank you guys for doing this. It was fun, as usual. And I look forward to hopefully seeing all of you guys next year in Miami.

Scott: Hey, Toni one thing, what’s your one thing? What’s your one?

Greg: Yeah, you’ve been firing at us.

Scott: Yeah, we got two minutes.

Toni: Two minutes. My one thing, actually the one thing that I think I — except that I learned early, but I’m glad that I did was to connect with other sellers, some of the best…

Steve: Meeting each other in Canton, I know it’s the best thing.

Toni: Meeting Steve, it was actually meeting Mike Jackness at the Sellers Summit, no, but meeting other sellers and watching what they do so that you can learn from them. Because I feel like I’ve learned so much from other sellers in the community. And I’ve been able to — I mean, they sell different products, but I’ve been able to take the things that they’ve done and make it work for my own brand.

And I think that’s really important is if I think a lot of entrepreneurs tend to isolate themselves, and just like head down and work, and I think getting out there and connecting with other people, you learn a ton and you’re able to impact other people too.

Scott: Love it.

Mike: You should do that at Sellers Summit.

Toni: Or another econ, you have to come – but even like connecting with people via the podcast or commenting on people’s Facebook pages and things like that. You don’t have to meet people in person necessarily right away. There’s lots of opportunities there.

Greg: Thanks for having us on, it’s been fun.

Scott: Yeah it’s been awesome. Thanks for having us.

Toni: Thanks, guys.

Steve: Good stuff.

Steve: I hope you all enjoyed that Q&A session. I wish we could have all chatted for longer than an hour but it was actually pretty difficult getting up of all of us together and at the same time. For more information about this episode, go to mywifequitherjob.com/episode217.

And once again I am super excited about the new show that Greg, Scott, Mike, and I are releasing in the fall. If you are interested in pitching your company to us with the potential to win $50,000, head on over to 5minutepitch.com, that’s the number 5-M-I-N-U-T-E-P-I-T-C-H.com. 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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216: Google Display Network – How To Run Profitable Ads With Ilana Wechsler

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216: Google Display Network - How To Run Profitable Ads With Ilana Wechsler

Today I’m thrilled to have Ilana Wechsler on the show. Ilana is someone who I met randomly at the Traffic and Conversions Summit in San Diego.

She founded Green Arrow Digital where she runs pay per click marketing for other businesses. In fact, her bread and butter is the Google Display Network which is the only ad network that I have never been able to make profitable.

So today we’re going to learn how to run profitable Google Display Network ads.

What You’ll Learn

  • Ilana’s background and what led her to create Green Arrow Digital
  • How the Google Display Network compares with Facebook ads
  • The most common mistakes people make with the Google Display Network
  • Important guidelines for running successful ads

Other Resources And Books

Sponsors

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.
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Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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Pickfu.com – Pickfu is a service that I use to get instant feedback on my Amazon listings. By running a quick poll on your images, titles and bullet points, you can quickly optimize your Amazon listings for maximum conversions. Click here and get 50% OFF towards your first poll.

SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
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Transcript

You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not in business. Today I have Ilana Wechsler with me on the show. And Ilana is an expert at running ads for the Google Display Network and actually have a long history with the Google Display Network or GDN for short. I have never ever been able to get those ads profitable except for retargeting ads. So Ilana is going to teach us how to do it the right way.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. 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 30% of my revenues. Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here is why it is 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 out an email to everyone who purchased a red handkerchief in the last week, boom. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they purchased, 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 could 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.

I also want to give a shout out to Privy who is also a sponsor of the show. And Privy is the tool that I use to build my email list for both my blog and my online store. Now Privy is an email list growth platform and they manage all of my email capture forms. And in fact I use Privy hand in hand with my email marketing provider.

Now, there are a bunch of companies out there that will manage your email capture forms, but I like Privy because they specialize in e-commerce. Right now I’m using Privy to display a cool wheel of fortune pop-up. Basically a user gives their email for a chance to win valuable prices in our store and customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%. Bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve. Now onto 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 Ilana Wechsler on the show. Now Ilana is someone who I met at the Traffic and Conversion Summit in San Diego, and it’s actually super random how we met. We were both hanging out at the wicked reports booth and getting a tour of the tool. And during that tour I noticed that Ilana was very knowledgeable and knew what she was talking about. She was asking really intelligent questions. So we started chatting, exchanged info, and here we are today.

And Ilana runs Green Arrow digital, where she runs Pay Per Click marketing for other businesses. And in fact, her bread and butter is Google AdWords, especially the Google Display Network. So today, what we’re going to do is we’re going to pick her brain. And with that, welcome to show Ilana, how are you doing today?

Ilana: I’m well, thank you so much for having me on the show.

Steve: It’s been a long time since we’ve spoken, so what’s funny about this is Ilana had me on her podcasts, like just last week. And so…

Ilana: Four days ago.

Steve: Yeah four days ago, yeah. So what is your background and what led you to create Green Arrow Digital?

Ilana: Yeah, interesting question. I guess I’m not like your traditional kind of story of entrepreneurship. My background is, I used to be a data analyst actually. And I used to work in corporate like funds management. And I guess I’m not the classic story in that I hated my job and I always wanted to work for myself, far from it actually. I loved my work and was in it for 10 years, and got to work with really smart people and do really fun and interesting work. But as a female, I decided that I wanted to have a family.

So when I went on maternity leave for my first child, basically, I came to the realization that family and corporate are like oil and water and they don’t mix. So I made the decision. And it wasn’t an easy decision, obviously, to choose family over my career. And that sort of sparked my journey. But it’s been, I didn’t first sort of launch into Green Arrow straightaway, actually, I had lots of failed attempts, lots of different things on the internet. I tried affiliate marketing, and that didn’t work.

And so what I used to do was build AdSense websites and that worked really well for a while and I had a whole content team and a whole bunch of websites until, of course, the SEO game caught up with me. And it all came crashing down overnight. And then I thought, all right, it’s time to get serious. So I flipped the Google equation, as you could say, and started to do Google ads, because I really knew keyword research very, very well through my SEO efforts. And then yes, that was all on a more than five years ago that I made that switch. So it’s been I guess, a 19 year journey, because now my oldest child is nine. So yeah.

Steve: We’re on the same trajectory, actually, because my kid is 10. And we both quit for the same reasons, spend more time with family.

Ilana: Yeah, interesting. Yeah. So, I guess if I think back, like, my data analyst skills kind of have really come into play, which I never would have predicted. But it’s funny how life works.

Steve: So Ilana, I run all my own Facebook ads, my own Google Shopping ads, my own Google AdWords ads, my own Bing Ads, but my Achilles heel has always been the Google Display Network. I have never ever been able to make it profitable except for dynamic retargeting ads. And so I kind of wanted to have you on the show for selfish reasons today. And I know we kind of talked about this when you were interviewing me.

And I think it’s pretty rare to have a PPC expert on the podcast, who lives and breathes the Google Display Network. Like most of the people that I encounter, they talk about Facebook ads, and that sort of thing. So I thought it’d be actually interesting to see today on the podcast, how you would run a Google Display Network campaign. And I want to use my store as the example. But we can talk in more general terms as well. But first question, I guess is, do you believe that most businesses can profit from the Google Display Network? And are there just certain that aren’t cut out for it?

Ilana: Yeah, interesting question. I think, yeah, I would say it’s probably not for everyone. It probably wouldn’t be for your local general store, for example, I wouldn’t suggest them. But I’ve struggled to find a niche or niche in American terminology that it wouldn’t really work for. The success with the Display Network really hinges on what offer you’re showing. And I think that’s kind of the biggest piece of the puzzle that people struggle to get right is, what is your offer? I kind of like to use it compared to Facebook. If you’ve got an offer on Facebook, because it’s the same kind of marketing, right?

It’s interruption marketing, someone’s reading an article on the New York Times, for example, and suddenly there’s a banner sort of in line with their article, it’s got to capture their attention. And it’s got to be compelling enough. Same as Facebook, right? Obviously, you get much less text and all that kind of stuff. And we can get into all that the nitty-gritty a bit later, but the same style of marketing. So it’s got to be the right offer, and therefore the success on whatever niche or industry you’re in really hinges on what you’re showing people.

Steve: So what is the main difference would you say between the display network and Facebook ads, because I know the display network, and I don’t think a lot of people realize this, but it’s a lot bigger than the Facebook network, right?

Ilana: The GDN or the Google Display Network is huge. And I think I mean, got to think Google’s actually ever come out and said exactly how many websites but it’s over 2 million websites. So if you think of it, New York Times, or if for Australian listeners, it’s the Sydney Morning Herald. They’re basically banners or text ads on other people’s websites. So on a publisher, and I kind of I’m a bit of a big picture kind of person.

If you think of it like two broad categories, you can show people ads based on the kind of the content on people’s website, be it specific news articles on the New York Times or a blog talking about yoga, I don’t know if there’s infinite examples, or there’s a whole another part of the GDN which is based on the person was called behavioral targeting. So that’s similar to Facebook in that respect. It’s based on the who, who you are showing the ad to, as opposed to the what of what content you’re showing people.

Steve: So why are people primarily focusing on Facebook ads? Like why aren’t more people talking about GDN at least in my circles?

Ilana: Well, if you think about it, Facebook have so much data on people, it’s because they have what’s called first party data based on what people actually input in their profile. So largely, the interest targeting is undoubtedly better on Facebook, I’m definitely not going to argue with you there. It’s some people like certain pages, and they telling Facebook a whole bunch of information about themselves, as opposed to Google who is kind of guessing. But Google draw a lot of their data about an individual based on whether they’re using Chrome browser, whether they’ve got an Android phone, whether they’re logged into Gmail, etc.

So, I think that’s why they launched forever ago, Google Plus is an attempt to buy that first party data or get that first party data from individuals rather than just guessing. So Facebook is great because you can really narrow down with a level of granularity that you can’t on the individual. But also, Facebook have a share button, which is so powerful. Plus you get huge amounts of ad copy above your image or video ad. So I think that’s why Facebook is all the rage, but it doesn’t mean that you should discount the GDN because as a business owner, myself, and for all the business owners out there, you know, I personally wouldn’t put all my eggs in the Facebook basket, especially with all the latest information that’s come out now.

And it’s good to diversify and create what I like to think of like a holistic ad campaign. So have my ads on multiple ad platforms to protect yourself. If for whatever reason, Facebook, might get, your ad account might get shut down, or for the multi different touch points that people use these days.

Steve: Would you say that you can use the same creatives that you’re using on Facebook on GDN?

Ilana: Yeah, I would say that, absolutely. And I would definitely test that. But I will also test lots of different creative on the GDA.

Steve: Sure, of course, I mean a lot. I’ve lost my fair share of money on the Google Display Network. So if you were me kind of starting fresh for my own store, what would be some of the first things that you would start? What are some of the like the low hanging fruit things that will give me some profits right away so I don’t get discouraged?

Ilana: Okay, well, I’d like to think of it as remarketing being really the lowest hanging fruit. I mean, somebody has just come to your website, hopefully you can track the people based on whether they did purchase or didn’t purchase. So getting those people back is often the lowest hanging fruit that you could use. So that would be the first place to start. So implement a remarketing campaign, excluding the people who have already purchased because you don’t want to show those people an ad, and showing ads to those people.

When your remarketing campaign is running for a little while, the beauty with AdWords is they give you a whole lot of information. They tell you where your banners, we’re showing like what actual specific URLs displaying those banners and therefore you can get a sense of once someone does leave your website, where else have they’ve gone? What other websites are they going to that they perhaps reading a blog article on or etc. So you can paint a bit of a picture about your past visitors.

Steve: Okay, and so am I looking for specific sites or am I looking for specific posts at that point?

Ilana: I would just be looking for specific websites. So we did for a client, they got a whole bunch of organic traffic and we were running search ads for them on Google and then time to scale the campaign. So obviously we implemented — first thing we did was we implemented a remarketing campaign, and when that remarketing campaign was running for a little while we analyze the placements where those banners were and that’s what I’m talking about the specific URLs. And then we could see some obvious placement.

So this particular client was in sort of the home improvement industry, and we could see that they were looking at various online magazines and publications about home décor, and it made sense, of course, right that they’re looking to renovate their home, they looking for styling and all that kind of stuff. So we can then use those insights from our remarketing campaigns say, hey, Google. Yes, our banners are showing on these home decor websites. How about let’s just have a placement on that website for all their traffic, not just the remarketing traffic.

Steve: Okay. And then, so yes, it does. So you find these sites where your customers are visiting. And then what type of ad do you show those people?

Ilana: So the first thing I like to do is so you get a whole bunch of different ad units sizes that you can run. And so let’s say I’m a publisher, I might only want to run a specific ad unit size, let’s say 300 by 250, also known as a medium sized rectangle. So often that’s like the most common banner sized…

Steve: Because there’s like a whole bunch, there’s like nine different — there might be even more, I don’t know.

Ilana: Nine yeah. So I know when you’re starting out, I don’t actually recommend you do all those because it’s going to cost you a fortune in graphic design, etc. So often what we do is we roll out one ad unit size first, 300 by 250, which is the most common but we will test like 10 or 12 different designs and offers, very different designs. I’m not talking about one’s got a green button, one’s got a red button, like wildly different designs and use that one ad unit size to test creative. And then when we get the winning creative or the top two creative, then we roll out that in the different ad unit sizes.

Steve: Can we talk a little bit about the offer, and what the creative look like for that one example that you brought up with the home improvement store?

Ilana: Sure. Yeah. So I like to think of really the GDN being what’s called like a top of funnel offer. So, think of, I mean a good starting point would be what’s an offer that’s working on Facebook? So that’s a question for you. What’s an offer that’s for you, for your Ecom business that’s working on Facebook?

Steve: Yeah, we’re doing a free plus shipping offer where you get a handkerchief for free as long as you pay for shipping.

Ilana: I lost you.

Steve: Oh, yeah so right now I’m doing a free plus shipping offer.

Ilana: Okay, sorry, I lost you there for a second. So yeah, you’re running a free plus shipping offer. Is that right?

Steve: That’s correct yes.

Ilana: Perfect. I would totally do that on the GDN. If you think — put yourself in the mind of your target customer. I know you’re in the sort of the linen, the wedding industry.

Steve: Sure.

Ilana: Somebody might be reading a blog about getting their makeup done for their wedding day. And they might see a banner there for the [inaudible 00:16:39]. That’s right. I’ve got to get these napkins created, and here’s a free plus shipping offer. Absolutely, you should test that term.

Steve: Let me ask you this, would you say that like Facebook, would you recommend a video ad, or do text ads work just as well?

Ilana: I would definitely test a text ad, a bit of a tongue twister. I would definitely test that. Most people forget that you can run text ads on the GDN and that’s a common kind of little gotcha that people forget. But I would also test just a standard image ad. So the 300 by 250, not like Facebook, where you have a 20% text rule on the image. You can have as much text as you want. You just need to have your business name or logo on there so they kind of — it looks like you’re a proper business really.

Steve: So it’s interesting. So you test both. But can you just kind of discuss like the pros and cons of image versus just like a regular text ad?

Ilana: Well, they’re different. So as a publisher, you can control what kind of ads you’re willing to have on your site. So you’re catering for the people who don’t want banners on their site. They only want text ads versus people who only want banners and no text ads, etc. So it just almost like two different placements. So if you were to browse any kind of website that allows Google ads on their website, you’ll see the different ad unit sizes that that website owner has allowed. Does that make sense?

Steve: Yeah, it does yeah.

Ilana: By having those multiple options, you’re catering for the different allowable placements that people have permitted Google to put an ad on there. So let’s say I own a blog about winning makeup for example, I’m not going to let Google put any ad on there. Let’s say I only want one of those both the 300 by 250, I don’t want one of those leader board ones, so that’s the only banner size that will be allowed to show on my website based on what me as a publisher have chosen.

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In fact, I’ve used Pickfu to almost double the conversion rate on several of my Amazon listings by testing my images, bullet points, and product titles. And what I like about Pickfu is that you get results quickly unlike traditional split testing, and you can use this to test book covers, landing pages, basically anything. Not only that, but it’s super cheap to run a poll and right now you can get 50% off your first poll by going to Pickfu.com/Steve, once again, that’s P-I-C-K-F-U.com/Steve. Now back to the show.

I see. And then certain sites will only allow text ads and not image ads I would imagine that.

Ilana: Correct, that’s right. Yeah.

Steve: Okay. So you’re doing both just to kind of account for both. And you need some sort of offer it sounds like a lot like Facebook.

Ilana: Yeah. So I wouldn’t kind of go — I’m a bit of a direct response person, I wouldn’t go for the generic branding purely because I’m a data driven person. So I would definitely do some kind of offer so that you can get people to make a response. Otherwise, they’re going to see your banner and most likely not do anything. Not that it will cost you anything, because most people pay for ads for an impression on Facebook, on Google, you only pay for click. So you will get a ton of free branding. But really, it’s all about getting results, right. So I want people to actually take action.

Steve: Can you give me some examples of offers for your clients that have worked pretty well?

Ilana: Yes, so yeah, we had with this Home Improvement client, we had a free guide sort of related to that industry.

Steve: Like a PDF?

Ilana: Yes, exactly, just a PDF. For a different client we had, they were running a free video course. So, we showed banners regarding the what did the free video course problem solve. And that’s like a PLF kind of style video course that they were running. And actually, what we did do was, so this was the video course that ended after four days of email. So we then created actually a remarketing campaign in Google and the final offer was a $1 trial for three days for a membership. We then stripped out the people who had actually registered for the video course, delayed the campaign by four days, and then showed them a banner for the $1 trial for three days.

Steve: I see. And when it comes to running these ads, can you give me any sort of guidelines on like what a good click through rate is, and that sort of thing, some of the metrics.

Ilana: So you will get a really low click through rate on the GDN. It’s not like the Google Search Network, where you can typically get five to 10% click through rate on often more purely for the fact that there is no intent there. But that’s okay because you don’t pay for an impression; you only pay for a click. So you will get — I mean, I’m usually pretty happy with a 1% click through rate on the GDN. But I don’t really look at click through rate personally, I look at conversion rate. Of the clicks I’m paying for, how many of them are turning into leads? That’s the metric that I run the GDN by.

So looking at my overall cost per lead, what am I paying for a lead on search versus what am I paying for a lead on display, and then hopefully drill [ph] they’re cheaper because they generally will be because search is so expensive, the GDN is significantly cheaper. And then once we do get an appropriate cost per lead, hopefully, we can then drill down more into the campaigns and build out the GDN more to get more of those leads, because I like to think of… yeah sorry.

Steve: I was going to say, does the GDN work just like regular AdWords where like your higher click through rate kind of factors into how cheaper clicks are, and like your quality score?

Ilana: Yeah so it does kind of behave a little bit differently. But it really depends on how you kind of structure your campaign. So I would say to people, there’s a little common gotcha that people have is that the default setting within Google is when you create a campaign, you might do search network with display select, so that’s combining the Search Network with the display network. If you are running a GDN campaign, you want your display campaigns to be display network only, because then you will be able to analyze that network on its own. Does that make sense?

Steve: Yeah.

Ilana: And you create it very, very granularly. So I mentioned before that you can target certain websites that are displaying certain content. So, in your niche, you might want to be on as I said, the wedding makeup blog, or any kind of websites that mentioned weddings and wedding dresses, and all that kind of stuff because that’s the kind of person you’re after is somebody who is getting married, right? Or you could target based on the who, so based on behavioral. So Google know a bunch of information about where we’re going, websites we’re going to, so they have a whole bunch of behavioral targeting.

One of them which is one of my favorite actually is called in market. And this is based on really short term behavior, what websites have I been going to in the last two weeks, for example. They’ll know if I’m going on the wedding makeup blog, etc, etc, because I’m using Chrome, for example. So one of the in market categories before recording this podcast, I knew you would kind of ask me a question around this would be somebody who is in the market for bridal wear, that kind of person who is looking at wedding dresses would be your target customer. So you can target those people who are in the market for bridal wear.

Steve: I see. So there’s literally an option where I could say this person is in the market for bridal stuff.

Ilana: Exactly. There is a specific in market category for that one.

Steve: Is that only — is Google only tracking people who are using Chrome for this?

Ilana: Chrome, Gmail, Android phone users.

Steve: But not like someone on Safari, for example, it won’t track those people, right?

Ilana: They might get you from — it sounds really bad, they might be able to track you a different way if you’re logged into Gmail in Safari.

Steve: Okay, so this sounds really powerful. So you can actually target people who are actually in the market to buy something in general even?

Ilana: Exactly. That’s right. And it’s based on very short term behavior. So for my home improvement client, we were targeting people — one of them was people who are in the market for Roofing Services, another in market category was for people in the home improvement area. So there were specific in — there’s over 500 of these in market categories, which is really based on that short term behavior versus what’s called affinity audience, which is really based on who you are as a person long term.

So, for example, my affinity category would be I mean, like cooking. So I might not necessarily have looked at some recipe websites in the last one or two weeks, but over time, and my long term behavior has been that I do look at cooking recipe websites, etc. That’s probably my least favorite one, I’ve tested that a lot personally for my clients, it hasn’t worked so well. I find that the best results that I get for my clients has been this in market one.

Steve: So this in market, it sounds really powerful. It sounds more powerful than Facebook, right? Because Facebook doesn’t have any search data to show intent, right?

Ilana: Exactly. And actually, for best results I get, we’re going to get a little bit technical here, so forgive me, but we will layer, so will overlap the in market let’s say bridal wear targeting with keywords or with a topic. So it’s like, forgive my math reference here, it is like a Venn diagram overlapping those two circles on top of each other to really steer Google in the direction I want them to go.

Steve: Okay, and so all right, so in my case, I’d be targeting like wedding blogs, for example, and then I would layer on search intent to purchase bridal wear, how much would I bid? Like, if I’m just starting out like, what’s a good bid, how do I know what to bid, and how do I kind of monitor the campaign?

Ilana: Yeah, so this is an interesting topic you bring up because a huge push by Google now has been towards automatic bidding or smart bidding they call it, where it uses all their artificial intelligence and machine learning to take care of the bidding for you. And I’m personally just testing this now for my clients. And I would say it’s not for everyone. But that’s the direction that Google is heading, where they completely take the bidding. They take control over the building in terms of using context of the person versus what’s called manual bidding where you’d set it yourself.

But let’s say, starting out, you definitely would do manual bidding. I would set your bid to be a dollar and see if you get impressions. If you’re getting no impressions, then you need to raise a little bit, but I’m sure building a dollar to start with would more than sufficient to get you some traction. Once you start getting leads coming in, you might find you can drop the bid a little bit, and you just play along with it there.

Steve: So along with that automated bidding, I’m actually using that right now for my shopping campaigns and it’s working really well. I think you need a minimum number of conversions per week in order for it to actually work though.

Ilana: Yes. So I find, I guess a non kind of e-commerce because you going for a top of funnel offer, right? Where it’s the free plus shipping or something, you do need a minimum of 50 leads per month, but I believe for shopping, it’s 100 sales a month. Is that right? Something like that.

Steve: I don’t know what the minimum is, I know meet it. And it’s actually been working pretty well.

Ilana: It’s 50 yes. So we’ve selected — I’m actually running experiments. I don’t know if that’s the way you did it, where we’ll split the campaign budget, so I can test it without rolling out a full-fledged campaign.

Steve: I see.

Ilana: This is probably a bit advanced.

Steve: So with this offer, and if I’m bidding a buck, I know I’m not necessarily paying a buck, but that seems like a lot. I guess. Okay, so let’s say I’m bidding a buck and I’m getting some traffic, how do you decide whether it’s working well, or not, if you don’t have a whole lot of conversion data, like, do you just let it run for like a week?

Ilana: I would think after a week you will see some traction if you were to get some traction. So, there’s a few optimizations that you can do. So, the first thing I would optimize would be the different creative and the offer. Really you want to be sure that your offer is — I guess you want to be sure that your lack of traction is not from a bad offer, it’s from maybe it’s a targeting issue. So that’s kind of the biggest thing that’s going to really hinder the success of your campaign. Also, we’ve got a whole bunch of what’s called negative placements that we have standard that we load into every campaign.

Over the years, we’ve built a placement list that we say to Google, hey, Google, do not show our ads on this kind of website, because we’ve noticed that they get a lot of impressions and clicks, but very low conversions. And so we load those in from the outset so that we’ve kind of…

Steve: Do you want to talk about what some of those are?

Ilana: Oh, I mean, like, it’s a lot of these like, weird websites like these dot infos, dot XYZ, just kind of really bad placements, because if you think about it, on the flip side of the AdWords is the people who earn income from these ads, right? So the AdSense, so people build these content websites with the sole purpose of generating AdSense and they’re pretty crappy websites. And actually, they’re not humans really going there. It’s these bots and bots click on the ads and all this.

So there’s a lot of let’s say there is some degree of click fraud, which Google are pretty good at preventing, but we just add the extra layer of defense in there to prevent those placements happening at all. And if you want, like I can make that resource available to your listeners if you want.

Steve: If you go with the method that you kind of advised me where you run retargeting first and figure out what sites that people are going on first, you’ll never run into this problem, right?

Ilana: No you shouldn’t, no because it’s retargeting, exactly yeah. So going back to the retargeting, also what you could do in addition to running a retargeting campaign is you can actually go into your Google Analytics account in the audience section and see what some of those in market and affinity categories that you can use. So basically, analytics is telling you, hey, based on everyone who’s come to your website, these are the categories that they fall into, based on the visitors or people who have actually purchased. So you can use those, I mean, you probably, I don’t know if you’ve noticed it in your Google Analytics, those categories. Those are the exact categories that you can use on the GDN.

Steve: I see. I actually have not visited GDN in a while, but okay, I get it. And okay, so let me ask you this. So my average order size is on the order of $60 or so, would you say there’s some sort of minimum threshold to get this working? Like I know your home improvements, I bet the average order size is a lot higher, right? I’m just trying to get an idea of the cost compared to like running a Facebook campaign?

Ilana: Well, it really depends on the targeting you do. And the thing is, you don’t have to have a huge GDN campaign. You might find, you just want to run a couple of placements and a couple of in market targeting and that’s it, you might find that’s all you want to do. You don’t have to scale it out hugely. And yeah, you might be like you’re in a pretty specialized industry, that maybe there isn’t a lot of GDN placements, that would be really, really good for you. Obviously, you would see how they’re performing at a campaign level to work out, is my cost per lead here too high? If it is, I’m just going to turn that specific part of the campaign off.

And this is kind of where account setup and structure is very important to set it up in a very granular way so that you are armed with that level of insight to go, this specific in market like the bridal wear is not working. Let’s just turn that off. But the other one is working very well.

Steve: I remember when we had talked when you interviewed me that there were certain sites for example like, I could place my handkerchiefs on like eBay in a wedding handkerchief search.

Ilana: So that’s what we did for an e-commerce client. They were selling something — I obviously can’t reveal the industry, but they was selling something that was quite obscure, and those particular items were for sale on eBay as well as we’ve got a website here in Australia called Gumtree. I’m not sure if you have it over in the States, it’s pretty big. It gets a lot of traffic. And how we discovered it was we looked in the remarketing placement.

So people would go to their website but then they were also going to eBay and Gumtree. So they were like, hang on a minute, of course, right. So we created a display GDN campaign targeting the placement of eBay. But we overlaid the key word of the product so that we were only there for when they were looking at the listings on eBay. So rather than being on all of eBay, that’s not really relevant. We want to be in the listings where people are searching for that product on eBay.

Steve: Yeah, that makes a lot of sense. And I do want you to comment on doing keyword versus direct placement versus the other type of — the interest based.

Ilana: Behavioral.

Steve: The behavioral yes. How do you merge all of them? Like, when is a good time to use keyword? Like my AdWords campaigns are running really well. Does that mean I should try going for a keyword type of targeting?

Ilana: I would go for a quite a general type keyword. Like you wouldn’t type in a keyword that’s very product like specific, like probably going to ruin it, but whatever is the linen and the serial number.

Steve: I was thinking weddings. Would that be like a keyword that I might?

Ilana: Yes, exactly, or handkerchiefs, something like that. But I would go broad; I would go top of funnel keyword. And I wouldn’t really do just that, I would layer with let’s say, a topic of weddings. So I kind of like to do those two, the Venn diagram, the two circles together to kind of give Google a bit more guidance of what I want. So yes, I want the keyword of weddings. And I want to on the top of that layer in a topic. Maybe I want the keyword of weddings with the market category of bridal wear, etc, and mix and match that way. It’s kind of like coordinates on the globe.

Steve: Yeah, and this is actually when I ran into problems. I remember when I was using — this is kind of why I’m asking this. Like when I used keyword — and back in the day when I did this, like those other affinity audiences actually didn’t exist at the time. And when I did it, and I did keyword targeting, that’s when I ran to a lot of problems like they were showing my ads on like apps, all these crappy websites, like the ones you were talking about. And it was just out of control. It was like playing whack a mole.
Ilana: That’s right. So this is why you’ve really got to rank Google in. So you mentioned apps. That’s really good because what you can do is, so I don’t really like showing ads on apps. There’s a lot of inadvertent clicks and I know it from my own kids, they’re on the iPad playing on these apps and they’re clicking on ads all the time. And they’re like, no, I don’t want it. So there’s a lot of wasted ad spend that comes with being on apps. So you can actually add in a negative placement called AdSenseformobileapps.com that will prevent all your ads from showing up on any apps.

Steve:I guess too, I’m trying to — what I’m trying to get from you right now is like a logical progression. So you mentioned start with retargeting. You figure out where your ads are being shown and then target those sites first and layer in a fit any audiences.

Ilana: So I would separate them into different campaigns. So yes, start with remarketing, that’s working leave that alone that’s its own campaign. Work out what placements are working really well based on your remarketing campaign, and that’s a second GDN campaign, it’s called the direct placements campaign. And you’re just running alternate camps, so you create a different ad group placement, and you see how each of those URLs go on their own to get all their traffic.

Steve: So one of those isn’t working that well, do you actually try to dig a little deeper and figure out what pages are converting?

Ilana: Not really no. If it’s not working, I would just turn it off or try a different offer or a different creative.

Steve: Okay, the reason why I’m asking that question is like, back when I did this, there was like, I remember I found this one page, there was only one page that was converting and perhaps I was just going to granular. But I remember everything else was not working that well, except for that.

Ilana: Really, interesting. I personally don’t go to that level because I guess a lot of the…

Steve: It’s too much work.

Ilana: It’s too much work and it’s too granular, whereas somebody might browse around a little bit and I prefer to capture the whole URL. I mean, it’s different. Like, I wouldn’t do New York Times as a placement; I would overlay New York Times with some kind of keyword like category, etc. Even if you’re going for a pretty obscure blog or the online magazine kind of thing for particular client, I just go for that whole URL.

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I see. So, for even your direct placements, you are overlaying keywords as well as affinity audiences and behavioral?

Ilana: Sometimes.

Steve: Oh sometimes.

Ilana: If that URL, if it’s a really big domain.

Steve: Okay.

Ilana: Yeah, like the New York Times I would definitely overlay or eBay, I would overlay.

Steve: Okay, and so the direct placements, retargeting that’s low hanging fruit, and if you want to scale beyond that, is that where you start going more general with interest — not sorry, with keyword and behavioral?

Ilana: Yes, yes, that’s where you can really scale out your campaign. So I would start in one region first. Once you get a good targeting metric, then you can roll out for different regions because there’s no reason why it wouldn’t work in other locations.

Steve: If I know my customers are in a certain state primarily, would you recommend further like only showing to people in those geographical regions as well?

Ilana: It ultimately comes down to what are you paying for that lead in that region? So you might want to separate it by regions because you might find that different states you pay too high, you pay too much for the lead and then you can pretty easily turn it off. So you might want to set it up that way to start with if the cost per lead, if you’re really monitoring your cost per lead. So generally, we separate things out by country and then we can dig further deeper into certain regions. But with our clients it doesn’t really kind of get to that level.

But I mean you know your business so well, if you find that certain states work really well then yeah, I would say just start there, see what the cost per lead is there. Once it’s under your magic threshold of whatever you’re willing to pay for that lead, then that can just run all the time. This is the beauty of the GDN I find is it’s not like Facebook where often your Facebook ad that’s working really well and then for no apparent reason it just dies, nobody knows why, it just suddenly go south for no explanation. Whereas the GDN it’s very reliable, it’s very consistent traffic.

Steve: That was my next question actually. Like how often would you rotate ads, or do you even need to rotate ads do you find with the GDN?

Ilana: It depends on the audience size. So, I think that’s another kind of mistake people make especially for remarketing is they’re just loading basically one form of creative and that person, that poor individual only for you don’t have a very big remarketing list is just seeing that same banner over and over again, which you don’t want to do because people will just get annoyed and they’ll just get upset with it. So, I would definitely rotate creative.

But if you’re dealing with a really large audience, much like Facebook, we’re dealing with a large audience on Facebook, there’s no need to kind of rotate your creative as often as if you’re dealing with a remarketing audience, for example, the audiences are much smaller. But Google will tell you the approximate size of your audience.

Steve: You know, one thing that kind of blew my mind the last time when we spoke was the fact that you can use GDN to make your regular Google AdWords ads and your shopping ads perform a lot better with RLSA. So if you wouldn’t mind just kind of defining what that is and talking about how you run those campaigns in conjunction, that’d be great for the audience.

Ilana: Yeah, sure. So RLSA stands for Remarketing Lists for Search Ads. So most people know remarketing is these banners that we’re talking about on other people’s websites. You go to let’s say I go to your Bumblebee Linen website, I leave being the bad visitor that I am and I don’t purchase and then suddenly I see your banners on other people’s websites, what you can do, a nice compliment to a remarketing campaign is Google will know the fact that I’ve been to your website, but then if then I type in napkins, something very general, I can say, hey Google, this person was on my remarketing list, they’ve typed in like a real top of funnel keyword, show that person an ad.

Steve: I was going to ask, so traditionally GDN ads are cheaper per click, right? And so you can kind of build a remarketing list with GDN and then convert the sale with search ads.

Ilana: Exactly. And that’s often what we would do. So we’ve got Facebook campaign running, we’re running maybe we’re promoting content on Facebook, maybe we’re promoting — I don’t do this a lot but some people do promote content on the GDN, build a remarketing list. And then when that person is searching for something, then we’re willing to pay for that search because search is expensive. I mean, it works very well because there’s intent, you’re sliding your business card under the nose of someone at the very instant that they’re looking forward. It’s an amazing advertising opportunity. But you pay for that privilege.

So how about you only pay for the people who are on your remarketing list, and then you’re moving them along the funnel. And then you can bid from a keyword point of view on very broad type keywords, because they’ve clicked, they don’t want to be read, you know they’re interested in your content or your product, but they’ve just typed in something very general that you wouldn’t otherwise be done.

Steve: Can we talk about why you wouldn’t run ads for content, like I do that a lot on Facebook, like I’ll run Facebook ads in the content and then I’ll retarget those people to get a lead like an email address from.

Ilana: I mean I’m not against it on the GDN; I just don’t really do it for my clients. But if you think about it, you don’t actually have a lot of room on your ad to really talk about what the content is about. But yeah, I mean as a concept, absolutely I would, we just generally go after a top of funnel kind of direct response kind of offer.

Steve: Would you say that an image ad is a lot more expensive than a text ad, then in general?

Ilana: No, no, no, they would cost the same.

Steve: Okay. It seems like with an image ad, you could convey a lot of information about the piece of content, right, because you have more, or as much room at least as a Facebook ad.

Ilana: Well, I mean, technically with the Facebook ad, we do a lot of long copy ads above the image.

Steve: Yes. Okay, I see the difference.

Ilana: That’s more what I’m talking about.

Steve: Okay, that makes sense.

Ilana: The actual copy on the image. I mean, if you’re testing a banner size of the seven to eight by 19, which is a very common banner size, that’s what the leader board or actually the actual.

Steve: Skyscraper.

Ilana: Yeah, one of those. You could probably get quite a bit of copy on there. And in the — yeah, I would I mean, if you find that that the content is working really well on Facebook, then yeah, absolutely test it on the GDN. And you can say you only want to be 20 cents for it and see if you get any traction that way.

Steve: Would you say that in general, the GDN is cheaper per click than Facebook?

Ilana: Yes. 100%. Yes. And there’s heaps you can do as well. I mean, another [inaudible 00:48:58] I guess a ninja tip I would do is with this strategy of promoting content or building a remarketing list, what I also like to do is create a remarketing list in Google Analytics. So rather than just getting everyone on my remarketing list and bidding on them, I will create an audience in Google Analytics, filter out the people who spent less than five seconds on my website, the people who may have inadvertently clicked on my ad or bounced really straight away and then use that as my remarketing audience.

So hey, Google, yes, some person has come to my website. But I want the people who spent more than five seconds or 10 seconds, or even 30 seconds. And those are the people I want to remarket to. Or maybe you bid a little bit more for those people because they’ve been more engaging with your content.

Steve: That’s interesting you say to build these in analytics. Can you not build these in the AdWords audience interface?

Ilana: No, you need to build them within analytics, and you can do any kind of audience, so any kind of Google Analytics audience and push it through into AdWords. So you might say, hey analytics, I want to create an audience of people who based on your — if you’re doing UTM links in Facebook, everyone who’s come from Facebook, the medium of Facebook whether source is CPC or you want to mix it up and create an audience of those people to show those people a specific banner that you’re offering on Facebook. So that continuity aspect.

Steve: I see. I’ve been doing it all wrong this entire time, or I didn’t have access to these features actually back in the day. I guess I kind of gave up too easily.

Ilana: Yeah, I wouldn’t give up because this is really, it’s a massive area of opportunity, and it’s really where you can grow and scale your lanes beyond search, because what happens with search is this is a classic conversation we have with clients. We start small with search, it does well. I say yes, we want to increase budget, it’s working very well and we increase to a point where we’re buying all the profitable search traffic there is. And then they say, we want to spend more. I’m like well, I can’t make more people search for things if they’re not, so we need to come up with a different strategy. So the GDN is like that next level or next layer that you can really grow and scale.

Steve: Have you ever had any success running a GDN ad just like straight to a product, or is it always some sort of offer where you’re trying to get a lead primarily?

Ilana: I wouldn’t do a remarketing campaign absolutely on…

Steve: Besides remarketing, sorry, besides remarketing.

Ilana: Oh besides remarketing? Personally, I wouldn’t — I haven’t had success with that. But it might be worth trying to — on the right placement, it might work well. Actually, that’s not true. I did it with eBay. That worked really well.

Steve: Oh yes okay. And you were pointing just to a product on that one.

Ilana: Exactly. Yeah. Because I knew they’ve searched for it. They’re on eBay. They’re on that category page for that product. And we linked straight to that product in the banner.

Steve: Okay. Yeah. So that’s really powerful that you can build the audiences in analytics because you have access to every parameter on your entire site in analytics, right?

Ilana: That’s right. So a common misconception is people think they can only do it like let’s say do remarketing based on their AdWords traffic. That’s not true. It’s based on all your website traffic. So yeah, within your analytics based on everyone who’s come to your website, filter out the people who have bounced or left straightaway, because they’re not worth spending money on in my opinion. It sounds really harsh, but it’s…

Steve: No, it makes sense, yeah, totally makes sense.

Ilana: Yeah. So, filter out the people who spent less than 10 seconds and then only show those people a remarketing ad.

Steve: It’s funny like all these options, it seems to mimic Facebook. It just had to dig a little deeper to know about them, it seems.

Ilana: Yeah, absolutely. And Google is getting much better at their targeting, I would say there’s some been a huge amount of R&D that they’ve put in with a lot of their interest targeting. And Facebook has always been superior on this front even with their lookalike audiences, if we’re talking Facebook speak. Google has got their equivalent of what’s called similar audiences which are getting better. So yeah, you can create a similar audience based on your remarketing list or etc.

Steve: Do you use those the similar audiences? Have you had much luck with those?

Ilana: I have tested them for some clients; it’s worked for some but not for others. So I think it’s getting there. It’s a question of how much data they’ve got on their particular the size of the remarketing lists. You might have a business or for your listeners, they might have a business that has a really large YouTube channel for example. You can remarket the people who have engaged or watched a video on your YouTube channel on the GDN, and you can integrate all your assets into the GDN.

Steve: I see. Yeah, that sounds like it’d be really powerful. I can’t wait to try all this stuff after we talked.

Ilana: Awesome.

Steve: So Ilana thanks a lot of thanks a lot for coming on the show. I learned a lot. It’s been so long since I’ve given up on GDN. But it sounds like with the scale it’s a lot bigger than Facebook and it just seems like everyone should be giving it a try. Everyone’s just been all about Facebook as of late, but GDN is just so much larger. And I feel like there’s a lot more potential there as well.

Ilana: There’s a huge amount of potential, but I think importantly, it’s important to diversify where you get your leads from because yes, I’m a huge advocate for Facebook. I spend a fortune on there for my clients and it’s a great advertising platform, but you need what’s that quote that the biggest risk in your business is the number one. You don’t want one resource of your leads being Facebook, you want to diversify.

Steve: True.

Ilana: And the GDN is a great compliment to it as to complete the holisticness of all the different touch points for your client.

Steve: One last question, you’re starting out, Facebook or Google or GDN for business?

Ilana: It’s a hard one. It really depends on the industry. I think really what Facebook does have which Google doesn’t have is that share button which works so well on Facebook. But Facebook is getting more and more expensive, let’s be honest. So it depends on your industry I’d say, that’s a tough one to answer.

Steve: Where can people find you online if they want to get ahold of you or know more about your services?

Ilana: Yeah, sure. So my main website is GreenArrowDigital.com where we do this stuff for clients but we also have a whole training program on the GDN and a whole bunch of Google stuff as well as Facebook and analytics on the training page on our website. So yeah, you just go to GreenArrowDigital.com, or you can listen to my podcast and yours truly talking.

Steve: Where is your podcast and what is it called?

Ilana: Talking Web Marketing.

Steve: Talking Web Marketing. Okay, and are those tutorials free on your site?

Ilana: I do have a whole free video course actually on remarketing on my website. That is available for anyone, if they want.

Steve: Excellent. And do you take clients, because you’re based in Australia, do you take clients outside of Australia as well?

Ilana: Yes, absolutely. Most of my clients are out of Australia.

Steve: Excellent. Okay, I will post all that in the show notes. Ilana, thanks a lot for coming the show, once again I really appreciate it.

Ilana: It’s my pleasure. Thanks for having me on.

Steve: All right. Take care.

Hope you enjoyed that episode. I don’t know about you, but I’m really anxious to go back and give the Google Display Network another shot. After all it does have the largest reach of any ad platform around. For more information about this episode, go to mywifequitherjob.com/episode216.

And once again, I want to thank Privy.com for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop-ups for any parameter that is closely tied to your e-commerce store. If you want to give it a try, it is free. So, head on over to Privy.com/Steve, once again, that’s P-R-I-V-Y.com/Steve.

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Now I talk about how I use these tools on my blog, and if you’re interested in starting your own e-commerce 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’re 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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215: The Future Of Facebook Messenger Marketing With ManyChat Founder Mikael Yang

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215: The Future Of Facebook Messenger Marketing With ManyChat Founder Mikael Yang

Mikael Yang is someone who I was introduced to by Nathan Barry and we met at Andrew Warner’s whiskey party at Social Media Marketing World.

He is the founder of ManyChat, the leading Facebook messenger chat software on the market and it’s actually the chat software that I’m currently using for my store and blog.

Today, we’re going to pick Mikael’s brain about some of the current and future applications of Facebook chat as well as why he decided to start his business.

What You’ll Learn

  • Why Mikael started ManyChat
  • Why you should be using Facebook Messenger marketing
  • How to avoid getting flagged as spam
  • What’s better, an email subscriber or a messenger subscriber and how to get both
  • How long until messenger gets saturated
  • The best way to grow your messenger subscribers

Other Resources And Books

Sponsors

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.
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Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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Pickfu.com – Pickfu is a service that I use to get instant feedback on my Amazon listings. By running a quick poll on your images, titles and bullet points, you can quickly optimize your Amazon listings for maximum conversions. Click here and get 50% OFF towards your first poll.

SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
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Transcript

You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and dig deep into what strategies they use to grow their businesses. Today on this podcast episode, I have Mikael Yang, the founder of ManyChat on the show. And as many of you know, Facebook Messenger marketing is something that I’ve been using for both my blog and my online store with great success. Anyway, today we’re going to be talking about the future of Facebook Messenger marketing.

But before we begin, I want to give a quick shout out to Privy who is a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now, there are a bunch of companies out there that will manage your email capture forms, but I like Privy because they specialize in e-commerce. And right now I’m using Privy to display a cool wheel of fortune pop-up. Basically a user gives their email for a chance to win valuable prizes in our store. And customers love the gamification aspect of this, and when I implemented this form email sign ups increased by 131%.

Bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve, and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ For 15% off. Once again that’s P-R-I-V-Y.com/Steve.

I also want to give a quick shout out to Klaviyo who is also a sponsor of the show. Always blessed to have Klaviyo as a sponsor because they are the email marketing platform that I personally use for my e-commerce store, and I depend on them for over 30% of my revenues. Now Klaviyo is the only email platform out there that is specifically built for ecommerce stores and here is 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 last week, easy. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they purchased, 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 could 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 to 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 Mikael Yang on the show. Now Mikael is someone who I was introduced to by Nathan Berry. But we actually didn’t get a chance to meet until we saw each other at Andrew Warner’s whiskey party at Social Media Marketing World. Anyways, Mikael is the founder of ManyChat, the leading Facebook Messenger chat software on the market. And it’s actually the chat software that I’m currently using for my store and my blog. And I’ve been getting a killer ROI from that has blown my email marketing numbers out of the water.

And today what we’re going to do, is we’re going to pick Mikael’s brain about some of the current and future applications of Facebook chat as well as why he decided to start his business. And with that, welcome to show Mikael. How are you doing today, man?

Mikael: I’m doing great. Thanks for having me Steve.

Steve: Yeah, Mikael, so when you are at Social Media Marketing World, you were like the celebrity with like a mob of people following you around. But for the benefit of my listeners, what is ManyChat, and why did you actually start this company?

Mikael: So ManyChat is a Messenger marketing platform. It helps businesses do marketing, sales and support through Facebook Messenger. And basically, the reason to do that is Facebook Messenger has over 1.3 billion people using it monthly, and it’s the most engaging channel right now on the market. And that’s actually the answer to the second question. That’s why we started the company because we saw an opportunity to deliver a lot of value to businesses by helping them leverage this new channel of communication with their customers.

We started in 2015 with a different Messenger, it was Telegram Messenger. I don’t know if your listeners know about this Messenger. But it’s kind of like Facebook Messenger, WhatsApp, Fiber, but just popular in different countries. And it’s one of the more like advanced in terms of technology Messengers, one of the most secure Messengers out there. And they were one of the first Western Messengers to open up their API. And basically what that means is that Messengers are typically owned by their companies that developed them. And they are closed gardens, which means that developers cannot build on top of them.

And Telegram opened up their API so that developers like ourselves could build platforms on top of them. And we’ve built one of the biggest bot platforms and Messenger marketing platforms on top of it. And a year later, Facebook Messenger opened up, and Facebook Messenger in terms of its reach is just much bigger. It has many more people using it. It has many more businesses using it. So for us, it was a no brainer to develop, to take what we’ve learned from Telegram and to take it to Facebook Messenger. And that’s how we’ve launched ManyChat just a month after Facebook has opened up their API.

Steve: Were you using chat to market your own stuff before you got into this, or did you just decide to go with it because you knew that chat was going to be the next big thing?

Mikael: Yeah, that’s great question. So we’ve been doing projects since I was 19, so for over eight years. And one of the projects that we did was a Messenger that was the whole theme of it was entertainment, you could message to friends [inaudible 00:06:22]. And we saw that compared to applications that didn’t use the messaging technology, ours had five, six times more retention, because there was this loop of sending a message, getting your friends into the app again, receiving a reply, getting into the app again, etc. So we experienced firsthand the power of how messaging is super engaging.

So when Telegram opened up, we saw 65 million people that were using Telegram at that time, every month that were, the only thing that they were doing was just messaging each other and there was no business application to use Telegram. So we like my first thought was, why not use this channel to broadcast messages the same way that you would do an email campaign, but through Messenger and get a list, a Messenger list inside and start doing broadcasts. And that’s exactly — I tried to do it myself using the APIs.

I have a technical background, and after a few hours of struggling with Postgres databases, setting up an instance on Hiroko [ph], etc, I just thought like, this is way too much work to do just a simple broadcast. So I called up my technical co founder Anthony, who is just a wizard of technology. And I said, like, we got to do this platform. And in just about a few days, we had a working MVP, where you could connect your bots to the app and get subscribers into broadcast.

Steve: Cool. So Mikael, this topic of Messenger marketing is still relatively new. And I know that there’s a lot of skeptics out there, because we use Messenger to communicate with our friends and our family. And so the question is, and the question that I’ve been getting is why should people use Messenger bots for marketing? Isn’t that going to piss people off? Isn’t it kind of intrusive and spammy?

Mikael: Hmm, that’s a great question. So Messenger is much more engaging than email. And that is because it is delivered to the inbox that you check like multiple times every day. And some businesses have this hesitation, like is it okay to be in that space where you talk only to your friends? And the answer is yes, because it’s the same way that every marketing channel starts. Usually, it’s a platform that is used only to communicate with a community or friends or family, there’s this use case where people use it for the most like basic social needs. And then that platform gets opened up for businesses.

And the difference between Messenger and other platforms is that the customer stays always in control and I’m going to touch on that later. Because the next question is, like okay, businesses can use this, but how do we make so that the platform does not become spammy?

Steve: Like email, for example, right? Like, I get tons of spam every day.

Mikael: That’s true. Like, basically, I stopped using email. The only reason my system still checks email is because some of our service providers, there is no way to connect with them on Messenger. So this is the only like use case for email that is left like our whole company. We have over 30 people and we don’t use email internally, like zero emails to share it inside the company. We only use slack Messenger, Asana and like all the tools around email. And that was a big chord when that happened. We were like, well, this is where the world is heading.

So, answering your question, it does feel like for some people, it could feel like, am I intruding, but like our data shows that customers are more than willing to subscribe to brands and businesses on Messenger and receive notifications from them and interact with them? The open rates, the typical open rates for broadcast on Messenger is 80, 90% and the CTRs are anywhere from 10, 20% to like, 30, 40, 50%. I had one girl come up to me and say, Messenger CTRs are going down, like they’re no longer where they used to be. And I’m like, well, really like what’s happening? Tell me more about it, because I want to learn what’s people’s experiences with the platform. And she is like, I used to get 76% and now I only get 48. I’m like, that’s not a reason for complaining.

Steve: I’m getting about 36 to 45% CTR, and my open rates are 80 to 90. Yeah, I mean, it’s crazy. And compare that to email…

Mikael: What is your email CTR?

Steve: Yeah, my email is anywhere between two and five I would say at most, yeah.

Mikael: So it’s 10X of your email CTR?

Steve: Yeah.

Mikael: Got it. Yeah, that’s what a lot of people are reporting, 10X of email.

Steve: So let me ask you this, though. Do you think that it’s going to become saturated? Because it’s such a more personal medium, do you think it’ll get saturated quicker than email? Like, what do you see going forward?

Mikael: So definitely, marketing channels are getting saturated and it’s just the nature. More people know about them, more people start using them, there’s only a limited amount of attention that people spend on the platforms. So definitely Messenger will become saturated. It’s nowhere near that point right now, I think there’s another 1, 2, 3 years where the brands will just start on boarding. Right now, it’s only the — there is a book called Crossing the Chasm. And so right now it’s only the innovators and the early adopters, it’s still like going only into the early majority stage.

And I do think that it’s going to become more saturated. But look at email, like it took email to get to this point 20 years. And if you look at the numbers, email marketing as an industry is growing, like it’s not declining at this point. I think it will in the next few years but right now, it’s still growing. And the difference between email and Messenger is that email is an open protocol. It’s an open platform, nobody controls email. And Messenger is controlled by let’s say, Facebook, WhatsApp is also control by Facebook; other Messengers are controlled by other companies.

Their number one goal is to make sure that the messaging experience is valuable to the end user. If that suffers, then like nothing will — like they don’t have another aim other than making sure that their Messenger is used by maximum amount of people, maximum amount of time, and with maximum frequency. So if they see that this is starting to degrade user experience, they’re going to put systems in place that will make sure that the end user is happy and receives valuable information from businesses, because there is a fine line between like being spammy and being helpful for the customer.

Steve: I guess the key difference here is that anyone can send me email, but no one can just message me out of the blue, right? I guess that’s the one key difference.

Mikael: Exactly. If somebody has your email, and they’ve got it through you opting in or from them buying a database or like stealing a list, they can message you. That’s basically your email is a key to your inbox. For Messenger, you have to opt in consciously, and no business can message you, can initiate a conversation unless you start a conversation with them. That’s one of the key differences. That’s true.

Steve: So given that Facebook is in control here, and I know you’re probably biased, but if I’m a company, what would I prioritize, getting an email or a Messenger subscriber, because Facebook might change things going forward, right? They might start charging, they might limit the scope, whereas email is something that we’re in control of. So how would you prioritize the two?

Mikael: So I think that that question comes up a lot when we are talking to businesses. And typically what we say to them is that you don’t have to choose between email and Messenger. It’s not something that like one thing, if you use one thing, you cannot use the other. I think you should start getting and like gathering your Messenger list and you should not dump your email strategy, get your emails, and get your Messenger list. And actually, if you get a Messenger list like we have a lot of people who are using their Messenger list to get people’s emails.

Just a few weeks ago, Facebook Messenger introduced an update that allows people to share their email with the bot with just one tap. So you could ask something like, you could run ads to your Messenger bots, get the lead on Messenger, and then say something like, by the way, we have this eBook, if you want it, like do you want it? And if the person answers yes, you say okay, what’s the best email I can send it to? And they tap like share email and you get the email and ManyChat integrates seamlessly with MailChimp, Active Campaign, any email service provider that is connected through Zapier. So you can actually get the Messenger subscriber and turn that Messenger subscriber into an email subscriber. So now you have two points of contact with the same person, which makes your connection even stronger.

Steve: Interesting. So what are some of the best ways that you’ve seen some of your clients get both chat subscribers as well as email subscribers.

Mikael: So this was one of the ways that people do this. Basically, it’s all about when you ask the person to share a point of contact with you. And Messenger like starting conversation in Messenger is one way to do that, people sharing an email is not a way — people sharing a mobile phone number is the third way. There are different channels which you can unlock, basically, when you are connecting with your subscriber. And typically the architecture of this process is pretty much the same. You ask them for the point of contact in return for some value that you’re giving them.

So it’s typically a strategy that some people call a lead magnet, like you have to have something of value and say like, hey, if you want this thing, this eBook, this video, this something, a consultation, an appraisal or something, leave us your Messenger, we’ll contact you and or will deliver it to you, etc. So the same way that you would get an email subscriber, you would use the same strategies to get a Messenger subscriber and vice versa.

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Pickfu allows you to solicit real human feedback about your Amazon listings in 10 minutes or less. And you can target the exact demographic of your end customer. So for example, let’s say you sell napkins and you have two main product images that you want to test. You would simply go to Pickfu, list the images, target female Amazon Prime members over the age of 35 and hit go. Within 10 minutes you’ll get feedback of which image people are more likely to buy along with specific feedback on why they made their decision.

In fact, I’ve used Pickfu to almost double the conversion rate on several of my Amazon listings by testing my images, bullet points, and product titles. And what I like about Pickfu is that you get results quickly unlike traditional split testing, and you can use this to test book covers, landing pages, basically anything. Not only that, but it’s super cheap to run a poll and right now you can get 50% off your first poll by going to Pickfu.com/Steve, once again, that’s P-I-C-K-F-U.com/Steve. Now back to the show.

So specifically what I was referring to as you know in ManyChat, you offer all these different growth tools like different ways to get email addresses. And I was just curious which one is the best performing one that most marketers are using today.

Mikael: We do have a lot of growth tools. But basically for your listeners who might not be familiar with ManyChat interface, growth tools are a set of tools that lets you convert any traffic into Messenger subscribers. And that can be a website traffic, that could be a Facebook ad, that can be your social media followers, and we provide like certain tools to convert those people into Messenger subscribers. I think one of the best things right now that is working really good for businesses is actually if you have a Facebook page and doing the comments to Messenger growth tool. Basically, it allows you to convert anyone who comments on a Facebook post to a Messenger subscriber by sending them an auto message as a response to that comment.

And we’ve seen a lot of people getting amazing results, getting hundreds or even thousands of subscribers using that one growth tool. And specifically, it is really powerful paired with a Facebook Live. If you have a following, if you have people watching your Facebook Lives, or if you can make your Facebook Live appear in front of a lot of people, then connecting a comment growth tool to Facebook Live will basically try to turn everyone who comments on the Facebook Live and people who are commenting on the Facebook Live like a lot. It’s one of the best ways to get comments. And it will start an interaction with them on Messenger and if they’re interested, they will respond. And that’s how you get subscribers.

Steve: So let me ask you this. I know Facebook has been cracking down on using language that attracts comments, right? So if you’re not doing a Facebook Live, for example, you can’t just go on and say, hey, comment yes, to get this lead magnet, because Facebook will probably reduce the reach of that post, right? And so how are people doing it without Lives?

Mikael: So the thing that you’re referring to is the engagement baits that Facebook started to crack down on, and I’ve asked this question to our partnership manager and I’m still waiting for a response from them is that does that actually count towards sending lead magnets and like providing any kind of value through Messenger. Because basically engagement baiting, what Facebook was trying to crack on is they were trying to reduce the number of posts that gets fake engagement, that get engagement that is not supposed to be there like voting on the picture or something else. And the commenting, the reason for commenting is not because you want to increase the reach of the post which is a great side effect. But for a lot of people that’s not the actual reason to do that.

Commenting is just a really natural way to opt in into the bot because when you comment, the bot sends your reply, you reply back like there’s a lot of conversion steps that are dismissed when you do the comments to Messenger growth tool. And so we are waiting for a reply from them. Right now it’s a gray area. And the way to answering your question I would use a Facebook video. I’ve seen a lot of people using a video to actually ask a question and get replies, and respond to those replies accordingly.

Also asking an open ended question like nobody, like it’s concert engagement bait to like just say comment to something. But if you just ask a question there, like a yes or no question or something without specifically telling people like to do something in return for something, if this is considered by Facebook to be a natural part of the social interaction, then everything is good. So these are two ways I would suggest, using a video or asking an open ended question.

Steve: So does that imply then that you should have like ManyChat try to get a subscriber off of any comment, not necessarily using a specific keyword?

Mikael: If it’s an open ended question that’s not an open question, if it’s a yes or no question, then you can actually do automations based on yes and nos. And you can actually do the automation based on without a keyword because if the person has engaged with that post, it opens up the possibility of the page replying to them. Because basically when you think about this, when a person comments on a page’s post, they started an interaction with this business, they are interested, and they have something to say in reply to what the business has said. So there is a conversation that is going on right now in the comments with the person and the business.

So there are ways to like if you don’t use keywords functionality. So basically, again, for people who are not familiar with ManyChat, basically, you can reply either to comments that have certain keywords mentioning in the comments or you can reply to all of the comments. And what Steve is referring to is maybe replying to all the comments. I think that’s a viable strategy. It’s not as targeted as replying to certain keywords. But I do think it’s like you should always think about the customer.

And there is like the golden rule of marketing, market to others as you would want to be marketed to yourself. So imagine yourself in the shoes of your customer and think like, when I wrote this comment, would I expect a message from the business? How would I feel if I got it? Would it feel intrusive or would it feel natural? And if the answer is natural and relevant, then by all means, do it.

Steve: So Mikael, because a large part of my audience, they sell physical products online, what are some of the applications that you’ve seen for e-commerce stores selling physical products with chat bots?

Mikael: Yeah, e-commerce like we’ve seen people just making — this is going to — I don’t want this sound like that everyone can get the same results but e-commerce has been big on Messenger marketing. And so I’ve seen results where just a person was selling t-shirts and just made a few. I think he made over $5,000 in sales in just 24 hours of starting it. And so it was really — I think it was a great result for a person who is a single person operation and just starting out.

Steve: How did he acquire subscribers?

Mikael: I think he run ads like he shared with me the end results. And there is like so many stories that right now it’s like even hard to go into the details of every story. But if I remember correctly, he run ads to his bots and there’s this thing called the Jason ads. Basically Facebook a year ago, Facebook introduced ads that show up in the news feeds. And when you click on them, it starts a conversation with the business. So this basically, they are called click to Messenger ads. So basically, you can create an ad on Facebook that promotes your bots. And instead of going to a landing page, the person goes to the Messenger, straight to Messenger, and the bot starts the interaction.

The reason to do that is if you think about a landing page, the only like purpose of a landing page is either to get you to an instant sale or to get you a lead so that the person leaves their contact information. Facebook Messenger when you run that ad gets you and instantly because when the person starts a conversation on Messenger, you get their first name, last name, their profile picture, gender, time zone, like a lot of information. But most importantly, you get the connection, the ability to reengage with them on Facebook Messenger.

So he run the ads and then just fold up, you have 24 hours. After the person starts an interaction with you on Messenger, you have 24 hours of free reengagement where you can send any promotional materials, any discounts, anything. After 24 hours, you have to stick to subscription messaging permissions. And so we can go deeper into that. But basically, what that means is that you cannot do promotions or sales after 24 hours of the last user interaction. So the user has to interact with your bot and then you can market to them and do sales pitches. So yeah, I think that’s what was…

Steve: Yeah so just to reinforce your point, that’s how I’ve been building my list. So I’m running an ad right now. I’m doing a free plus shipping giveaway where I’m giving away a free handkerchief on our store. When they click on the ad, it opens up a Messenger bot, and then I give them basically a coupon to get this free handkerchief in the Messenger. And then on the landing page, I actually try to get an email. So, if all goes well, I get an email subscriber, I get a chat subscriber, and I get a sale as well. And that’s worked really well so far.

Mikael: Are you already getting the email subscriber on the landing page?

Steve: I’m getting on the landing page because the landing page I give a lot more information about exactly what the product is. I provide pictures about exactly what they’re getting. I would have tried to get it in the chat window, but they don’t have enough information to want to give me the email I felt.

Mikael: Got it. If you think about like, I would just experiment because there is this, if you try to just use user input with an email type, they will be able to share the email with one tap. And it’s just such a natural thing to do because if you think about your Messenger experience, how many times have you talked to somebody and somebody said to you like, okay, I’ll send you a calendar invite, what’s your email? Or I’ll send this over to you, what’s your email? Your use — before even businesses have entered the messaging space, you were already sending your email to your friends through Messenger for one reason or the other. So I would just try it out and see like, what happens. If you provide enough context to them, and enough conversational value what you’re going to give them for this, I think that they are going to share the email with you even before they’re going to visit the landing page.

Steve: Interesting. Yeah, definitely should give that a try. One thing I’ve noticed about Facebook, like the lead ads and whatnot, is that the default email subscriber isn’t necessarily their main email. So for example, like for Facebook, I’m using a way old email address because I signed up for Facebook way back in 2008, or whenever I signed up. So have you found that as well?

Mikael: That’s true, a lot of people have mentioned this. And we’re just — it’s the functionality that was rolled out by Facebook just a few weeks ago. So we’re still gathering the data. But basically, what happens there is that a person sees the email that they’re sharing, and then they feel that this email is old and like not the one that they want to be providing, there’s an option to just enter it through a sense, just…

Steve: The next field.

Mikael: Just the text field. So we will see how that plays out. I think for a lot of people, that increase conversions, like even though some people have older emails connected to their Facebook accounts, it’s just the simplicity of tapping the pre filled email like increases the conversion much more than the number of people who have their older emails attached to the platform. And those who do want to share the correct email with you, they can just type in their current email address, which was the only case before they rolled out the sharing of the email with one tap?

Steve: Okay, yeah, it’s definitely worth experimenting with. On my landing page like, there’s a bunch of sense of urgency, like I have a countdown timer, I have a detailed description. So yeah, it’s probably worth experimenting to see which one works better. Mikael, I also want to touch upon spam. Like, what are some of the rules regarding sending these broadcasts, because I know you can’t just fire off coupons and just start spamming people with offers, right, what are the rules of that?

Mikael: Exactly as we’ve mentioned before in this interview, Facebook, the number one thing for Facebook is the end users experience. So they’re really strict about what you can and cannot send on Messenger. I’ve already mentioned that you have a 24 hour window after the last user interaction. So not just the first one, but every time they use your opens, your bots and presses a button inside of it, the 24 hour window starts where you can send anything, promotional messages, coupons, etc. But after 24 hours after the last user interaction, you cannot send anything promotional; you can only send things that are non promotional.

And please do go to Facebook policies. They’re short, they’re succinct, anyone will understand that they’re written in plain language and just see what’s okay, what’s not, okay. Basically, after 24 hours, you cannot just directly sell anything to your customers. The only things that you can send is content, news, product updates, like things that are not like nothing or pay, here’s a 20% sale or something. That thing will get you like banned. So please be mindful of that and check the Facebook Messenger policies before doing anything.

Steve: So what are some clever ways that you’ve seen people do broadcast to get them to have an interaction, so you can send them a promotion?

Mikael: So I would say anything engaging like anything that would get your customers to engage would be a good idea, because engaging content means that you have captured their interests enough so that the person actually lifted their finger and tapped on a button without just swiping back to their friends’ messages. So I think one of the best ways that we’ve seen people do this is by asking questions, and by asking questions stuff like pay, we’ve got a new podcast, do you want to listen to it now, or maybe later. And people that maybe wouldn’t click on now, a lot of them start to click on maybe later, which sets up a let’s say a 30 or an hour timer, and then reminds them, hey, you wanted to listen to this podcast an hour later.

Or same thing with a blog posts or maybe doing surveys about what people think about this or that issue? Of course, it should be relevant to your audience. You’re talking to your audience. So it should be relevant to the things that your brand and your business is involved in. And so yeah, asking questions is one of the best things in Messenger.

Steve: Is it okay to say something like, hey, we’re having a special promotion, would you like to hear about it? Yes, no, unsubscribe.

Mikael: No, I think that would be crossing the line. Everything should be checked. There is a Messenger community that is the official Facebook Messenger community, and I would encourage ask any questions there. But basically, asking people if they would be interested in the promotion is already, I would say, in my opinion, I would say it’s promotional. The correct answer here is even Facebook says that right now different teams have different opinions and said it depends on like which reviewer that message will fall. So I would stay away from anything that could get you in trouble until the rules settle down. So until Facebook itself decides what is okay and what is not okay, and like gets past this ambiguity, I would stay in the safe and try to not send anything that would be considered promotional.

Steve: I just wanted to take a moment to tell you about a brand new service that I personally just launched that will help you grow your email list for free. First off, my new business is called GoBrandWin.com. And it’s a service that helps e-commerce sellers build their email list through group giveaways. And here’s how it works. If you own your own e-commerce brand, and you have a following what you do is you contribute a gift card toward your products valued at $200 or more. Now Go Brand Win will assemble gift cards from other participating brands with a similar customer demographic into one massive sweepstakes giveaway.

Now, all participating brands will then send our co branded giveaway email to their entire customer base driving them to a special landing page on GoBrandWin.com where we will acquire email addresses and Facebook pixel data. We will also send the giveaway entry forms to related influencers in our blogger database. And between my co founder and I, we have access to almost 1,000 bloggers in our database. Now, consumers who enter the giveaway will enter their email addresses, we will send them special offers from your company and select a grand prize winner. And after the sweepstakes are over, you will receive the full list of entrants and instantly grow your audience.

Bottom line, the concept is very simple. We all help each other promote each other’s businesses, get free promotion from bloggers, and share the spoils, which in this case, are the email addresses. If you are interested in growing your email list, then head on over to GoBrandWin.com, that’s G-O-B-R-A-N-D-W-I-N.com. It’s 100% free, so sign up now. Now back to the show.

What about I’ve got like new products that just arrived in the store? Would you like to see them?

Mikael: That might be considered as a product update. So there is a way to — there is certain tags inside the Facebook Messenger. And one of them is product update. Usually it is more towards the bot itself. So like the bot getting new functionality, but like it depends on how you think about this, like maybe new products inside the bot is like now you can buy, now you can do something inside the bot that you weren’t able to do before that. But I don’t want to – I’m not a Facebook reviewer.

Steve: Yeah, it sounds like it’s the Wild West right now. Right?

Mikael: Exactly. The point here is not to like, hey, can we do this, can we do that. I’ve seen people who are doing promotional messages, like for half a year and they then get blocked or banned, or restricted in any way. And I’ve seen people who were doing something like that could be considered by that was like kind of in the gray area, and they got the restricted. So basically, it all depends. Even Facebook’s own internal policies change. So they see how people are using the platform. They see how end users respond to that usage. And based on that they make the rules and they have guidelines internally and they change those guidelines and they are not sharing those guidelines publicly.

Steve: I see.

Mikael: So the answer here is that nobody actually knows what is like the current state and what is okay, and what is not okay because even Facebook changes this stuff. And so the answer is, it is wild, wild west, be careful, read Messenger policies, and just have a head of your own and don’t get in trouble by sending like — because I’ve seen people who are sending like they knew about the 24 hour message window. And they were sending like just directly sales pitches like hey, 20% off only in the next hour or something. And like, they got restricted, and like we couldn’t do anything about this. And they reached out to us and said, like, hey, we’ve got this thing. And we were like, yeah, you were violating Facebook Messenger policies. You cannot do that. That’s what you get for that.

So yeah, I would, I would say like I would stick to questions, I would stick to quizzes, I would stick to surveys. And Facebook is going to introduce a way like, there’s a definitely going to be a way for businesses to send promotional messages to their customers to reengage them using the platform. Basically, that’s how Facebook makes money. So you should expect that. And before Facebook releases a solution like that, just grow your list. Don’t be like, don’t try to optimize everything.

This channel is not something that is like this new shiny thing that is going to go away like in a few months. And if you don’t get value right now, you’re never going to get it. Go try it, and start growing your list and start learning how it works, because this is going to be the channel that is going to dominate all the other channels in the next 3, 5, 7 years. This is a long term game, you’re starting to build your Messenger list, this is going to be the main channel of communication of your customers in the next three to seven years. So it’s not a question of trying to extract as much value right now. So just be careful, grow your list, learn how it works, provide as much value as possible, and then see what happens next because like, a lot of these rules are going to set up exactly this year.

Steve: I see. So basically, what you’re saying is Facebook’s kind of vague on the guidelines right now. So just err on the side of caution so you don’t get banned.

Mikael: Exactly.

Steve: So no content basically yeah.

Mikael: Yeah, send no content and when the person engages, then you have the 24 hour window. And Facebook is doing this for a reason. They don’t know themselves, like they are a technology company. And they have to strike this balance between giving businesses tools to markets and to grow and also giving customers the user experience that they will value and that will be good for them. And it’s a very delicate balance. And they themselves don’t know where that balance is. So the reason that they’re big about this is because now they can see how different interactions resolved in like different user experiences. And they can say, okay, this is what we’re going after. And then they’re going to put a stick in the ground and say, this is what is allowed and this is what is not allowed.

Steve: Okay. I would also say that you should always give the user the option to unsubscribe with every broadcast, right? Is that just general good practice?

Steve: That is a very good practice because that decreases the number of blocks that’s your page receives. And if your page receives a lot of blocks, then you’re going to get flagged for review and then you’re going to get, then you might get in trouble if you were sending something out. That was like in the gray area of the Messenger policies. So I would encourage everyone to make it super easy for your customers to unsubscribe. Right now it’s already easy, like, they can just swipe inside Messenger and delete the conversation with your bot, but not a lot of like, some people just don’t do it. They just read the messages and like, basically tolerate that you’re in their inbox.

So please do send an unsubscribe option the same way that you would you do that inside email, there should be a link to unsubscribe from your broadcasts and from your bot but leaving the option to do live chat, etc. So ask your every message, every broadcast, I would say something, if you ever wanted to unsubscribe from these messages, just type stop and just like STOP all caps or something, or provide them a button to do that just like unsubscribe or manage subscriptions, yeah.

Steve: Okay. Hey, Mikael, we’ve been chatting for quite a while. I want to be respectful of your time. Where can people learn more about your company and where can they get ahold of you if they have any questions?

Mikael: So the company is M-A-N-Y-C-H-A-T, ManyChat.com. And you can go to ManyChat.com and connect your Facebook page with one click and start getting your first subscribers and doing your first broadcasts, and then maybe even graduate to doing more sophisticated marketing automation. We do have a free course that we put out just a week ago, and it’s over 10 hours of content. And it’s like people were charging for this like hundreds and thousands of dollars. And we are putting this content out for free just so that millions of businesses can learn how to do Messenger marketing and how to connect with their customers. So it is beneficial to the customer and to the business and is not violating any policies of Facebook Messenger.

So if there is something that I would encourage everyone to do is just check it out. The platform is free to use like there’s a freemium, it’s a freemium model so there is a free plan that will allow you to do everything that you want, get subscribers, do broadcasts. And as soon as you experience the results, as soon as you experience the open rates and the CTRs, you will get hooked like this is just going to be super engaging and you will want more of those results. But that’s for you to experience.

Steve: Yeah I just want to add that you can do a lot of this stuff for free on the free plan on ManyChat. And the pro plan is actually pretty inexpensive, like I’m not affiliate with ManyChat in anyway, but compared to email marketing right now I think ManyChat just to be able to gather subscribers and send to them is really inexpensive now, and it’s like a no brainer to try right now.

Mikael: Oh thank you, thank you Steve.

Steve: All right Mikael. Thanks a lot for coming on the show. I really appreciate your time.

Mikael: Great talking to you man.

Steve: All right take care.

Hope you enjoyed that episode. Mikael actually lives right by my house, so we had a chance to grab coffee and hang out. He’s a super nice guy and he really knows his stuff. For more information about this episode, go to mywifequitherjob.com/episode215.

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 flow, 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.

I also want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop ups for any primer that is closely tied to your e-commerce store. If you want to give it a try, it is free. So head on over to Privy.com/Steve, once again that’s P-R-I-V-Y.com/Steve.

Now, I talk about how I use these tools on my blog, 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.

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214: The Right Way To Run Facebook Ads For Physical Products With Andrew Foxwell

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214: How To Run Facebook Ads To Sell Physical Products In 2018 With Andrew Foxwell

Today I’m happy to have Andrew Foxwell on the show. Andrew is someone I met through Austin Brawner who I had back in episode 165. Both Andrew and Austin run Brand Growth Experts which is a company that runs live workshops to help grow your business.

Andrew is also the cohost of the Ecommerce Influence podcast of which I was a guest on long ago and he and his wife Gracie have helped over 250 businesses manage over 10 million in Facebook ad spend.

In short, Andrew is a Facebook and Instagram ads expert and we’re going to pick his brain today.

What You’ll Learn

  • The difference between running Facebook ads for digital vs physical products
  • The minimum average order value to make Facebook ads work
  • How to build social proof for your ads quickly
  • How to structure your top, middle and bottom of funnel ads
  • All about broad match product ads
  • How to narrow down the right audience

Other Resources And Books

Sponsors

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.
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Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
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Pickfu.com – Pickfu is a service that I use to get instant feedback on my Amazon listings. By running a quick poll on your images, titles and bullet points, you can quickly optimize your Amazon listings for maximum conversions. Click here and get 50% OFF towards your first poll.

SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
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Transcript

You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are working and what strategies are not in business. And today I have Andrew Foxwell with me on the show. Andrew is the founder of Foxwell Digital, and he’s also the co host of the Ecommerce Influence Podcast. And Andrew is an expert on Facebook and Instagram ads specifically for selling physical products online. And in my opinion, this is one of the better Facebook episodes that I’ve heard.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. 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 30% of my revenues. Now, Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here is why it is 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 out an email to everyone who purchased a red handkerchief in the last week, easy. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they purchased, piece of cake, and there is full revenue tracking on every single email sent.

Klaviyo is the most powerful email platform that I’ve ever used and you could 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.

I also want to give a shout out to Privy who is also a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now there are a bunch of companies out there that will manage your email capture forms, but I like Privy because they specialize in e-commerce.

Right now I’m using Privy to display a cool wheel of fortune pop-up. Basically a user gives their email for a chance to win valuable prices in our store and customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%. Bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve. Now onto 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 happy to have Andrew Foxwell on the show. Now Andrew is someone I met through Austin Brawner, who I had back in Episode 165 and both of them run brand growth experts, which is a company that runs live workshops to help grow your business. Andrew is also the co host of the Ecommerce Influence Podcast of which I was a guest on long ago. And he and his wife Gracie have helped over 250 businesses manage over 10 million in Facebook ad spend. In short, Andrew is a Facebook and Instagram ads expert and we’re going to pick his brain today. And with that, welcome to show Andrew, how you doing today man?

Andrew: I’m doing good. Thanks. Thanks. I’m glad to be here and glad to be chatting with all of you. It’s an honor to be on the podcast. So I’m doing well.
Steve: It is an honor to have you. And for the benefit of the listeners, who don’t know who you are, give us a quick background story. Tell us how you got started with Facebook ads.
Andrew: Absolutely. Yeah, I got started with Facebook ads. Actually, I’ve been doing it since it was invented. So I’ve been doing it since 2008. I was working for a member of Congress and was helping do social media. Facebook pages were invented in January of 2009. And from there I helped members of Congress launch Facebook ads and Facebook pages and helped them to get on social media. And then I went to 3Q Digital and became the director of social there doing mostly direct response Ecom buying. I had a team of seven that I worked with at 3Q, and I went out on my own with my wife after that.

So Gracie and I’ve been running Foxwell Digital now for a little over four years. And we help e-commerce business owners and people running Facebook advertising to grow their businesses and to do it the right way. So we talk about ourselves as social media advisors is a big part of what we do.

Steve: So you specialize in e-commerce stores selling physical products, right?

Andrew: That’s correct.

Steve: That’s great because most of the Facebook consultants I find out there, they mainly focus on digital products. So it’s a great challenge to talk to someone who focuses on e-commerce.

Andrew: Yeah, and I think a lot of those people that are in that industry, that are in that niche part of the industry, it is a similar, but separate discipline, right? So there are pieces to it where you’re using lookalike audiences, you’re using those tenets of what a good Facebook campaign looks like. But there are strategies and there are sort of margin conversations that you have to have that are a lot different for direct response product selling on Facebook.

Steve: Oh, yeah, totally. I mean, I sell digital products. And I can be kind of Lucy goosey with my budget on Facebook, because my product is 1,500 bucks and I’ve got a lot of leeway. Whereas with my e-commerce store, there’s not a lot of margin there and I have to do a lot better job of managing my ads. So I want to focus today obviously on how to run Facebook ads, specifically physical products, especially ones that carry kind of lower margins. First of all, would you say that there’s a certain average order size that you need to have in order to just make Facebook ads work in general?

Andrew: I mean, it’s very difficult in 2018 Facebook and Instagram advertising, we’ll talk about them together. It’s hard to make a product that is sort of that sub $50 category work well at scale. Not saying it can’t happen. You look at somebody like Pura Vida Bracelets or Blenders Eyewear right there, AOVs are lower. And it’s because our product has a much bigger mass market appeal. You know, bracelets, everybody likes that, sunglasses; everybody is going to need a pair of shades. So in those cases, it can work. But I think if you’re looking in that $50 category, it’s going to be difficult.

Now, I’ve seen people that have had a [inaudible 00:05:57] an average order value of 25, and they need to get people to purchase. What you have to do is basically start to look at bringing people in for emails, which is going to be a much more reasonable expectation to bring people in, and overtime convince them. So it’s not that it can’t work. It’s just that the model of taking them from buying or from never knowing of you to buying in a short period of time and only spending, let’s say, your CPA margin and the $25 AOV is $15 or 10, right? It’s good. You have to really condense that and make that shorter. So that’s what I would say.

Steve: And would you say that all products are good for Facebook ads? Like does your product need to solve a specific problem in order for Facebook ads to work well?

Andrew: Not necessarily. I think that if your pitch is a good one and the way that you’re coming at it is interesting and his novel and is something that people would be interested and potentially aware of, then I think you can be okay. There’s 100,000 different watch companies online, right? Let’s just take that example of that market. Okay, so you look at, there’s everything from movement who those guys have seen great success, right. And then there’s if you sort of go up from there, there’s a brand called Linjer [ph], they are much even more expensive, then there’s things all the way down to Flex Watches.

And this is an interesting company. I don’t know if you’ve ever heard of them. My friend David Herman at Social Outlier, he’s the one that runs a lot of the Flex stuff. And it’s interesting because for them, it’s a pitch that you can make, because they’re saying, look, here’s what we do, these watches are tied to causes. So it’s something that people immediately are attached to, versus something where it’s not just a watch, there’s a more meaning to that.

So I think if you have something like that, where it’s a story, you look at a company like Rareform, they take old billboards and turn them into bags. That’s an interesting story, right? There’s a lot of other bag companies, but what’s the genesis of it? What are you doing either before, how is the product created? Is there a story there? And then at the end, is there something that, or is there something happens after, so you buy a product, and then something gets donated because of that.

So I think if you have that pitch, and you have the hook in the way that you’re talking about it in a different way, absolutely. It can work on Facebook, even if it’s a product that there’s a lot of…

Steve: Okay, I mean, just basically make sure you have a strong value proposition before you start running ads, essentially.

Andrew: Yeah, and I would say not just one, so like making sure that there’s multiple. There was a company I worked with that was a wind purifier, handheld wind purifier. Well, okay, that is a great product but how do you pitch that? How do you talk about that? What are the multiple ways that you can pitch that because the first one that you think is the greatest part about it is probably not going to be the one that the audience responds to. So making sure that you have multiple ways that you’re willing to talk about it, and setting the expectation too of saying, okay, I’m willing to try this for six months of trying different pitches, and hooks and value props.

Steve: So let’s pick one of those examples that you just said and just kind of run through a complete example of how you would use Facebook ads to kind of build up an audience and sell that imaginary physical product. So where do you begin?

Andrew: So I think the first place that you would start in looking at what you’re trying to sell is, number one, what can I do in terms of the creative pitch that I am making with multiple types of content? So the first one is, what can I do with visuals in terms of photos that are going to make this product something that’s going to stand out? The first one is, let’s think about static imagery. So what are ways that you can set this product against a background that is going to cause it to have high contrast? So that’s the first question.

The second question is, what can I do in these images to add movement? So maybe I’m setting it against a high contrast background or something, it’s going to cause it to stand out. And then what can I do in the product, in the imagery that is turning it into a gift or even a video file that’s going to add movement to that, that’s going to cause people to stop in their Instagram or Facebook newsfeed and look at that?

Steve: Would you say that video is pretty much the standard now when you run Facebook ads, at least top of funnel ads?

Andrew: Actually video for a long time for top of funnel and direct response for products actually has never really been something that’s worked. It’s something that people because of the info market talk about a lot for being a video prospecting tool. And we can talk about that. But in many cases, video actually doesn’t work that well for driving physical sales. Now, there’s many exceptions to this rule, right? So there’s a lot of places where people have said, hey, I’ve used this video for a long time, it describes what we do, and people love it, then fantastic. But in a lot of cases, if you said to me, hey, I want to get up and get profitable and I want to get running on Facebook using the methods that you have Andrew in the first 30 days, I would not suggest video.

Steve: Interesting, okay.

Andrew: Video is something that is really middle to lower funnel because you’re trying to further a brand proposition. But I think in-house, it is a thing to experiment with. So adding that movement, as we talked about is an interesting one that you can do. And the third one I would try too is trying video. Maybe for your brand, it’s something that works, maybe it’s something that the story there does work, and you’re not necessarily looking for a return on that particular creative right away. But you’re using that as a way under video view audiences. So people watch 10 seconds of a video or 30 seconds of a video and that’s a way that you’re remarketing to people. So under like what’s called engagement, customer audiences, which many of you may be familiar with.

So those are the first things that I would set up as a test and kind of looking at this surveying the creative landscape. Now, a lot of times the second and third options for e-commerce business owners that are like Andrew, that’s great. I’m glad to do that. But I have like this video that we created about my brand story. We don’t have the money to create another brand video now. And so what do you suggest that we do? I think, going back to what Rick said, right on previous episode for you is talking about, Rick Mulready was talking about what can we do using iPhone. What can you do that’s going to be sort of something that looks more native, that generally does work better?

But in a lot of cases, I think those are the tests that I would run. Now, if you were to go more specific on prospecting and saying, okay, setting up day one, what are we doing? The first things I would ask for are at least three to five 1,000 by 1,000 images. All right, so basically square images that we can use in photo posts or that we can use in carousel ads. And then the second one would be a collection of three to five, 1,200 hundred by 628 link post images. So those two drivers are the most common — or those two ad units, excuse me, are the most common drivers for prospecting traffic to a website? And those are the ones that are the most proven in overtime that really get people to a site.

Steve: So for your top of funnel ads, do you always offer — give some sort of offer to entice people to click on it for the top of funnel?

Andrew: If you can, it’s always a good idea. So what are the things that you can offer? Is it is it 15% off, is it 10% off? I think that is something that is going to get people to check it out if it’s coupled with a creative that they find visually interesting and appealing. And that deal obviously, can become more sweet as you go down the funnel. Some people don’t want to do that. So I have a client of mine that is they sell mostly handmade, all organic baby clothing, okay, so kind of a very specific niche thing.

And for them, what they do on the top of the funnel is they actually just talk about and use language about slowing down and making sure that you’re caring for your child, there’s no discount offer on the front end of it at all. Because what we’re trying to do is find that very specific type of person that’s going to connect with the messaging first to go and say, oh, that’s interesting. What is this? Right, it looks more of something that you’d see like from a friend, that they would share or something, right. It feels more native in that way.

So I think that’s kind of — there’s different routes. If I were to set it up say Andrew, what’s the successful route, it would be trying a 15% off offer on the top of funnel if you can, even if it doesn’t get redeemed as much to try to bring people in, you give them an incentive.

Steve: Would it be better to send a coupon to a product page or would you suggest sending them to some sort of landing page where you can really describe your unique value proposition or both?

Andrew: I’ve done both. And it depends, again, on what the product is, right? If something requires more explanation, then sending them to a place where there’s more explanation that’s going to have more context is going to be a great idea. I think the first one, though, I mean, in most cases, if you’re saying, okay, this is a watch or a pair of sunglasses, that doesn’t need a lot of explanation. So for me, then it’s driving them to a best seller’s page in most cases, where how quickly can we get someone to this site that’s going to check out what we’ve got, and start to browse the products from there.

Steve: Okay. And in a previous podcast that I heard you on, you mentioned producing your ad with social proof, possibly by running ads to cheaper countries before putting the ad out to the US, or wherever you happen to be. Is that still something that you do?

Andrew: Yes, and so this is a strategy. Yeah, it’s called social proofing that people use in the industry and it’s an interesting one, specifically in relation to photo post. So if you have a product that you’re trying to basically get people to — you’re trying to take over a large percentage of the mobile news feed, a photo post, which is that 1,000 by 1,000 imagery with a copy in the description and then a Bitly link at the and or a shortened link at the end is going to be a productive one for you. That social proofing and some people do it to other countries. It’s something that I’ve tested, but you get a lot of low quality on it.

What happens now with social proofing in this concept is you basically take an ad, you run it for page post engagement to a selection of the audiences. This is the way that I do it in the United States, a very wide audience. So if my core market is 20 to 40 year old women, I’m going to run it to 20 to 40 year old women, exclude my fans, and all my website visitors and basically anybody that’s ever been in touch with me, and I’m going to run it with no other targeting. Sometimes you can layer in, okay, if it’s a mom product, I’ll layer a mom demographic or something. But your idea is to basically build social proof and let Facebook find people that are likely to engage under that objective with that particular ad.

And what happens is that helps to increase relevance score. So the zero to 10 score of quality that Facebook gives you on the ad level, and it says, okay, this is an ad that’s engaging, you can then take that post ID, and you use it within a conversion campaign. And really what it does more than anything, Steve, is it really takes your copy, it takes that ad, and it turns it into a place where people are looking for validation. If you think about the times you’ve looked at Facebook or Instagram ads in the last six months, many of us look at the comments, right? You’re like, I’m interested, like it’s kind of an interesting product, and you’ll click and look at the comments.

So it’s something that it helps to turn your ad into its own landing page. That’s really the power in my opinion of the social proofing. Because if you start to use that ad, and then you get people that have bought, that have seen it, that are commenting on it, saying, hey, I checked, I got mine, I’ll let you know, that’s really where the power of this starts to come in with social proofing. Because it validates the product before the person even gets to your landing page in many cases, which is a good thing.

Steve: So how long do you run this social proofing ad before you start writing the real ad?

Andrew: It’s generally around 48 to 72 hours that we’ll run it depending on how much social proof we’re getting. So in many cases, if you’re running, what I’m looking for initially, is I’m just looking for all right, what can I do to just get some likes and shares on this, just some social engagement that’s going to give it a little bit of a leg up. That’s really the first thing that I’ll do, and then we’ll kind of switch it over. And then sometimes what you can do too is, okay, let’s say an ad, or let’s say, one or two ads are doing well on that prospecting traffic is you can take that same ad that’s running and doing well. And you can launch that to middle of the funnel, for example.

So let’s say if an ad is doing well, they can keep seeing it. So let’s say they’ve engaged with a post in your 14 day engage your audience, they’ve engaged with it previously on Facebook, you launch it to them again, and maybe it’s even a different one. And you’re continuing to build social proof on it from people that are a little bit farther down the funnel. So you’re looking to kind of use those posts as, again, a validation that you have. And all of this will of course, be in combination with using dynamic product ads and remarketing.

Steve: Sure, we’ll make it down to the bottom of the funnel. So with those engagement ads, what are some guidelines on whether it’s working well, or not? Like how do you determine whether it’s working well?

Andrew: I mean, for me, in terms of the engagement, I’m just looking in terms of is it getting engagement, and is the click through rate like north of 2%, like are there people that are looking at it, clicking through on it, and is the relevant score like north of eight as well? So seven or eight, that’s looking pretty good, right? People find this kind of interesting, that’s a good thing. So that’s kind of the quality that I’d be looking for. And then, of course, once we pull it in, and giving it that 48 to 72 hours of testing on a conversion campaign, is this something that people are going to click on and buy?

So I’ve had plenty of times where I’ve had a social proved post that’s gone into Facebook in a conversion campaign and I’m running it and it’ll have a really high relevance score, but it won’t convert. So it’s getting a lot of great traffic, but it’s not necessarily converting, and then you can make that determination, right? If I’m okay because my ROI is so great on remarketing, if I’m okay, recovering my costs on my prospecting traffic, then absolutely, that’s a bet that you can make.

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Okay. And then how do you pick an audience for that top of funnel? I heard in a separate interview that people are just targeting huge audiences now, huge, broad audiences. And some people are even just not even targeting at all, like targeting the entire country. What’s the rationale for that?

Andrew: Yeah, so I think this is an interesting shift that we’ve definitely seen in the last, let’s say, three to four months, which is Facebook gives us so many options on targeting, right. I mean, it’s just enormous the amount of things that you can do. And in many cases, what we do is Facebook advertisers, the traditional method was that we were going to use that targeting to our advantage and we’re going to make it as specific as possible. What’s happened with the maturity of the Facebook ad auction and the algorithm itself is that the amount of data that they have within that is now so good and so rich, that basically launching advertisement to that grouping is something that to any grouping is they’re going to know that those are the people they’re likely to convert.

So launching it to a wide audience is basically you saying to Facebook, hey Facebook, you know better than I do, find me people that are likely to convert, and especially if you have what I call a seasoned pixel. So if you’ve spent north of 10 to 20,000 dollars through Facebook ads, Facebook understands what the difference is between somebody that, let’s say, adds to cart, use content or converts. So they’re going to be able to properly understand, okay, we’re going to women 18 to 40 in the United States, we want to find people who are likely to convert, they look like these people, which is thus making that pool larger and the converting is helpful.

So prospecting traffic can be set up in a whole number of ways. And what you’re trying to do, I mean, generally, what you’re looking at for successes is you’re looking at using lookalike audiences in many cases of not just purchasers, but looking at your lifetime value purchasers, your best lifetime value purchasers, you’re looking at people that have taken multiple actions. So for you, if you’ve seen that, let’s say, the engage your audience, as we talked about before, is a valuable one to you, I have a client that basically when people engage with them on Instagram, that is a fairly good signal that they’re probably going to buy. So creating a lookalike audience of those people that have engaged with them for 1% is a really helpful thing.

So I think, traditionally, if you were to look right now at a huge account, or even a mild sized, midsized Facebook ads account, let’s say spending in that 20 to $50,000 a month range, and then you look at those that are spending 200k a month plus, you’ll see a pattern in prospecting of generally a 1% look alike of those top AOV customers, and then generally some other 1% look alike that is kind of built from some other set of audience. So that engage your audience is one maybe it’s a two time page views last 60 days, something like that, let’s say the add to cart is a strong signal for you. So something like that.

And sometimes these are separated, sometimes they’re grouped together. Then you look and see a three to 5% lookalike range, sometimes people will have there for scale, and then they’ll have a wide audience. So they’ll have a wide audience that they’re running, generally no targeting. That’s very common now letting Facebook decide. And then you’ll have many times a broad match dynamic product ad, which is another one, which is a prospecting traffic that’s under product catalog sales.

But it lets Facebook again decide based on what they know previously about those that have interacted with your product catalog and shows it to them, shows them dynamic creative on basically, okay, these are the products that have sold well to these types of people before. So those are kind of the components, I would say that you’ll see commonly with the prospecting traffic in a lot of those accounts.

Steve: So if you don’t have a season pixel, though, you wouldn’t recommend going broad with no targeting, I would imagine, right?

Andrew: No exactly. So if you don’t have it, if you don’t have a season pixel, let’s say you’re getting into — I work a lot with companies that are spending in that 5000 a month, 10,000 a month, they’re kind of getting going. And what you’ve got to have then is, you’ve got to have generally look alikes as well. Of course, you’ve got to have — if you have had a lot of people come through purchaser funnel, then you can do a look like of that, maybe an email look alike, maybe you’re grouping those together. And then you got to have a section of interest based look alikes that usually are built off of audience insights in a lot of cases.

So, you’re building off of really not like really big interest, but more specific interests on other brands. And then you have another one usually of behaviors. So it’ll be based on credit card behavior, of people that look like X or buy X, or donate to this type of nonprofit or whatever, right. So I think you want to try experimenting with as much as you possibly can. And where you find scale in some of those as well as you’re growing is, instead of grouping the interest targets together, you can separate them out and make sure that, okay, look, fans of Tim Ferriss are more likely to buy this product than people that follow Amy Porterfield or whatever the example is.

So instead of grouping them, you can find scale by testing those things on interest, because you just don’t have enough data yet, which is totally fine, right? I mean, you have to basically you have all this other targeting is available to you with the ultimate goal of bringing it into something that is that proprietary lookalike audience that only you have the data available to use.

Steve: So what are your goals with your top of funnel campaigns?

Andrew: So my goal and a lot of people I’ve had discussions I would say about this with people and for many e-commerce business owners, it’s hard to do. But for me in the first what I’m looking for in prospecting is can I basically break even in the first 30 days, okay? So can I recover my costs, because you have to think about what you’re trying to do, right? You’re trying to take people from never hearing of you to buying within a 30 day period, which in some case is easier than others. But in other cases, if you don’t have a product that sets itself apart necessarily, then that’s something to be aware of that is going to take maybe a little bit longer.

So I was talking to a client of mine, they sell t-shirts that are awesome t-shirts, they are very witty, and they have a lot of funny things on them and people really love them. And for them the way that they worked in their cogs, they needed to make at least one and a half ROS over a 30 day period. Okay, fine, then that’s the metric, right? That’s what you want to build. But that’s generally what I’m looking for. Because then what that means is I’m not only recovering my costs in the prospecting, but my remarketing then has to be productive at a 3X or whatever.

I’m able to look at a combined ROS of let’s say, two and a half or two. I mean, it depends on where your metrics are. But generally speaking, that’s what I’m looking for to say, okay, that is successful for me. And a lot of other people would say, and then they have said to me, Andrew, I think that’s ridiculous. Like, it should be much more productive than that. And, okay, right. If you have a higher AOV product, that’s going to be easier. Let’s say you spend $200, but your AOV is $200, you get one sale, you’re in much better shape. So that’s kind of the way that I think about it from a prospecting standpoint.

Steve: What’s your experience been with the broad match dynamic ads? I’m running them right now and I’m getting like a two to one ROS, but I’m just letting Facebook do all the work. Is that something that you’ve been doing a lot with your customers?

Andrew: Absolutely, broad match ads are fantastic. They’re a great tool for free to use. And again, letting Facebook decide. They generally what you have to do though, is be really patient with broad match ads. It’s very common that they will take 30 to 45 days to see a return. So you have to just sort of let it be. There was a person that came to the intensive that Austin I did in Austin and he launched it when he heard about me talking about this on another podcast in January, or excuse me in December. And he came in January, and he had let it run for 30 days. And he said, the first two weeks it was crap, nothing happened. He said it was like three sales. And he said, then by the time he came in late January, excuse me, early February, that it was like two and a half, 3X.

So you have to be — it takes into consideration a lot of latency. So you have to be just sort of cautious of that. But that’s generally, that’s a great tool for prospecting. And I think ultimately, what Facebook is trying to do here is trying to give us options to have us not overcomplicate things as well. Right? So lookalike audiences are always going to be something you’re layering and then the way that you’re using middle to lower funnel stuff is always going to be a little bit more complicated of a way that you’re going about it. But generally speaking, that broad match and the wider audiences are both fantastic ideas to try.

Steve: So speaking of letting it run, how long do you let ads run before you make any determination?

Andrew: Yeah, I mean, I completely agree with sort of other industry knowledge in this. I generally look at a 48 to 72 hour period, I mean, before I’m saying, okay, that’s interesting, that’s not going to do anything for me. If I’ll see that, let’s say the cost per click is incredibly low on something, and the relevant score is high, I may let that run longer, even if it hasn’t had a sale just because I’m curious of the reaction that would come off of that. But that’s generally the rule that I have.

Steve: Okay, and then what conversion objective do you choose the Add To Cart purchase?

Andrew: It depends on the product itself. So in many — if let’s say you’re looking at a product that has a higher average order value that would be let’s say, north of $100, you’re going to see more success doing generally something like an Add To Cart instead of a purchase. And that’s because getting people to purchase and the amount of people that are going to purchase $100 product on something immediately is smaller than those that are probably going to add to cart or even page view.

What you’re trying to do is get as close as you can to those that 50 conversions a week under the initial learning phase that Facebook has at the ad set level. And so you have to think about, okay, look, if I get one purchase over a seven day period, or two, or three on a prospecting audience, that’s not giving Facebook the strongest signals. And so it’s really about the signals you’re giving to them. And you want to, if you can stabilize, and let’s say change that pixel optimization to add to cart, which is going to be bring that into a more stable period, and it’s going to get you closer to 50, which would hopefully then sort of stabilize that performance on that ad set if it’s doing well.

Steve: Okay. And what does your middle of the funnel look like?

Andrew: Middle of the funnel is really interesting. It looks very different for a lot of different people. In many cases, what I’m trying to do in middle of the funnel is taking, I’m trying to talk to people using page post engagement objective, using sometimes a lead ad objective for email signup, using even conversion campaigns, website click campaigns. I’m using a lot of different stuff to launch to people that are in that middle of the funnel of engage your audience. They have watched a video, they’ve done something, they’re generally many times in a fan base. That’s something I consider middle of the funnel to some degree, let’s say fan, but hasn’t been back to the website in a certain period of time, or 180 day visit, or minus 30 day period.

So what I’m trying to do is within Facebook, everybody has it sits within a different objective pool. So let’s say there’s people that are really big engagers, they engage with stuff. Let’s say, there’s people that watch videos, there’s people that click to the website, there’s people that convert. So I’m trying to basically find out where my audience responds and what they will do. I have a middle of the funnel ad running now that I update every two days for one of my clients. And that middle of funnel ad is their Instagram content, basically, that I just repurpose as an ad every two days to people that are in a 21 day top 25% website custom audience.

So they’ve been to the website, they’ve spent time there, but they haven’t purchased or added to cart. So I’m trying to launch a page post. I launch a page post engagement at them to get them to comment, to get them to consider because that’s going to hit a larger segment of that audience generally speaking.

Steve: What does that look like? Is there an offer associated with it?

Andrew: No, it’s just a branding piece, pretty much. I mean, it talks about things that are back in stock, but it’s not generally getting any sort of discount. And people will do that in different places. Sometimes people will say, okay, look in that middle of funnel, I do want to put a discount in it, I want it to be a pretty decent one, because I really want to try to bring them back. And that’s something that has worked, then great. If you see that in your email flow, let’s say you have Klaviyo setup and you see that a BOGO offered as well to a 14 day or 30 day audience or something, then try that in Facebook, I’ll bring them back in.

Sometimes it really depends on what the person is trying to do of driving them back in. Sometimes by not pitching, you can be better off by not discounting heavier. And that’s something that I’ve had to really swallow as a marketer to try some of the branded content that they have just to see, and to try to build that story, especially if it’s a higher average order value product. Now, if it’s a $40 product or something, then I think discounting in the middle of the funnel is a completely reasonable thing to do. But if you’re trying to really tell a story and turn them into eventually a purchaser and then an advocate, I think branding in the middle of funnel can be something that can be helpful for driving them back in.

Steve: So it sounds like your middle of the funnel isn’t really designed to be profitable?

Andrew: No, it actually many times it usually is. I mean, many times, it’s at least a one and a half to two X in a lot of cases because again, depends. But that’s really something that I’ve seen work because I’m hitting people with all different objectives. Sometimes a video ad won’t work, let’s say a brand story in the middle of funnel, they’ve come, they’re brand new visitor, they’re not on the email list or something. And let’s say the video ad I’m spending $5 a day on but it’s going to some of my best audiences, that may get one sale a week, but that one sale is enough to cover two weeks of spending on it.

So it is definitely intended to recover costs. But it’s also intended to tell that larger part of the story. And that’s something again; I’ve had to adjust my methods on. My old method was this simplistic sort of 1% lookalike offer on the top link post ad or photo post ad, driving them in and then just having a dynamic product ad over a 60 day period, that something they viewed or added to cart. I think more than anything, what I’m trying to do now is help people and help clients understand that that model is okay and it can work, but it’s not something that’s going to be sustainable.

So how do you build out sort of some more content, that storytelling that feels more organic that’s going to help them over time be like okay, I really like these people instead of just saying like, oh, let’s get to the discount immediately. And it requires more patience frankly, which is tougher because it’s sometimes can take a little bit longer to prove but generally is more sustainable.

Steve: And then your bottom of the funnel is just DPA?

Andrew: Yeah, so bottom of the funnel is usually a mixture of dynamic product ads within certain window. So many times I’ll have a 90 day, a 30 day, a seven day, and a one day. People do this very differently. There’s different levels of offers within those dynamic product ads. Let’s say sometimes it’s a collections add in a 30 day and it’s a singular image within a one day because they probably looked at a specific product, and it’s a carousel on a seven day something like that. And then always doing a 30 day remarketing if you can just website custom audience launching new creative at them to make sure the frequencies aren’t above three and kind of freshening those up and running those as complementary to one another.

In many cases we’ll also have some sort of a Yotpo or review DPA running which does well as another level of validation. And then of course in the really bottom is loyalty. So building, sending new product ads to custom previous customers is something that I really love to do because it kind of helps to them say, oh, that’s really neat or giving them some sort of special offer, something to those previous purchasers. That loyalty audience is one that I would say in nine out of 10 consulting sessions that I’ll do I don’t see setup because it doesn’t — you’re like I don’t want to bother. But you can set it up to be very careful around how your messaging.

Steve: These are people that is not for me already, but you want to buy them but they haven’t purchased in a while, right?

Andrew: Yeah, they haven’t purchased in a while, right? So you’re excluding let’s say the last 30 day on that and you’re wanting to just tell them about what’s going on, right? You want them to become an advocate. I think it’s akin to what you talked about in your previous episodes even of calling people and saying how is the going, right? I have one client that launches previous purchase, actually its previous leads in this case. They have a messenger ad campaign going and it doesn’t even go into ManyChat flow or anything and actually just drives them in, it’s day parted so it’s only live from nine to three their local time. And it’s a day parted ad that runs to previous purchasers asking them how is the going? Like, what can we do for you, is there anything that you would like to chat about?

Steve: They have someone physically man the chat, you mean?

Andrew: Yeah, they have somebody physically manning the chat. So again, I don’t think a lot of people are going to do that. But it’s akin to what you’re talking about, right, of getting feedback from people and turning them into advocates. I mean, we had a situation with a major client of ours a year ago. They launched a similar ad campaign in Messenger asking people about which products they should launch. And it was a survey that they took actually again, not in ManyChat or anything which we certainly could do now really easily. But it asked them what they thought, and they got 5,000 people that gave them their thoughts on new products. I mean, it was just ridiculous.

So, that’s one of those things where I think loyalty — we have to remember that these are people, right? You have to remember that if you get 1,000 impressions that’s 1,000 people you’re showing it to, and so take care of the those customers. And generally, that can be a really nice long tail effort that’s going to help to really build things and build a nice organic base too for your people that are coming back.

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It’s just hard to measure that though, you know what I mean? For me, personally, I like to see the sale obviously. So it’s hard for me to take into account the loyalty factor in the numbers.

Andrew: Yeah, and loyalty factor generally for us, we’re always tracking it with the pixel. So that ad set, I mean, if you’re launching product release ads or something, we’re always — I very regularly will see a two or 3X on that very commonly. There’s one company that I’m privy to, just looked at their ad account last week, they spent a quarter of a million almost over seven days. And one of the things that they have running is they have the exact same ads that are running to prospecting that they have running to the loyalty audience that are new styles.

And what has ended up happening is people are taking screenshot, or taking photos of themselves and putting them in the comments because they asked for it in the ad. If you bought this product before, check it out. And it’s absurd. It’s like it goes back to the idea of turning that into that landing page. So that’s where I think experimenting on that is something that could be powerful. You could have it be super laborious, it has a ton of steps where you have to sit there, and man the chat, or you can just try it saying, hey, by the way, we’ve got these new products, check it out. And you could launch that using daily unique reach base that they only see it once a day and just see what happens, right?

Steve: What does your 30 day dynamic product ads look like 30 and 60, and 90 day?

Andrew: That again, totally depends. In many cases, I like to use collections ads in those because in a 90 day period, it’s like you’re trying to get them to a catalog, right? So you’re trying to like get them to sort of like, browse again. And so that’s what we’re looking for. In the 30 day generally speaking, it’s I would say a split between kind of the carousel and the collections ad, it depends. Many times it’ll be a carousel, though, in that case.

Steve: Do you offer discounts at that point?

Andrew: Yeah, yeah, definitely. So that’s where most of the discounting is coming in, is hey, here’s the deal, right? Come in, and check this out. Here’s a discount, 20% off. Usually, it’s more, I mean; you have to think about how good of an offer is this? It’s like, sometimes people say, well, I want to do 10% on the low funnel. Okay, that’s fine. But like, would that make you buy? It’s like, you have to – and they’ll say, well, I don’t have the margins for it. Okay, then maybe we should talk about building that into the margins, because just the sheer fact that your products are cool is great. But it’s not going to probably be something that’s incredibly scalable over time.

Steve: Right okay. And then how do you work in Messenger ads into all this? Like for your top of funnel do you try to get a Messenger subscriber or do you ever run Messenger ads?

Andrew: Yeah, Messenger ads live in an interesting place. And mostly where we’re using Messenger ads in this case is for doing things that are more B2B. So, asking them, hey, are you — taking let’s say, a 30 day remarket or a 30 day top 25% website custom audience and launching Messenger ads at them and saying, are you interested in talking more about this? If so, comment, get started, right? And comment, let’s talk or whatever. And then you’re bringing them into a flow or you’re qualifying them and asking them questions, and then adding them to different kind of broadcast pools from there.

So that’s really where I’ve been using it more often. We haven’t used the messenger flows as much in e-commerce. The people that — I sort of, I wait a while on new stuff to be honest with you to see what other people are doing and to prove it out. I think where I’ve seen the best success with it is using it in a contest thing format. So if you have a customer or potential customer that is somebody that would be interested in a contest, then using Messenger ads can be a really interesting way, comment here to enter in this contest, and that’s one way to do it. But I’ve used it in B2B mostly. And then I’ve used it in loyalty ecom for asking questions and things like that. But we haven’t used it as much in the driving sales.

I think, what Messenger ads that — I’ve spoken to Mollie Pittman about this many times, who’s sort of the woman…

Steve: She’s coming on next week, actually.

Andrew: Yeah, she’s amazing, right. She’s sort of the woman of note in the Messenger ad industry. And I think she has a lot of interesting ideas in terms of — and better that have worked, how you bring leads in, right. So in the lead cost, there is really low open rates are incredibly high. And there is ways that you can use it in Ecom, but I think they are less common right now. The thing that I worry about with Messenger ads to be honest with you and I’ll probably take heat for this, but I worry that they turn into what video ads have become to some degree in the industry where they talk about it and there’s sort of this whole body of discussion in the industry about how video ads are everything, you got to do them all the time.

And they don’t work in direct response product Ecom as well. They may work in lead generation, but then I’ll look at something like there’s a CrossFit brand that I know and work with, and they launched a deep discount on a particular product that they had. And it brought them into saying, hey, are you interested in this product, it’s normally $40, it’s $10, click here to subscribe and buy this product. And that they’re seeing a two and a half return on ad spend on that on prospecting right now. And they’re also getting people subscribing into their daily inspirational message flow.

So that’s where I think that’s an interesting way that it can be used, but in the times that we have tested it at scale, it’s not something that’s been 100% part of the recipe yet. So I think there’s more to note about that. And hopefully Molly can give some good inspiration as well next week.

Steve: Why would you say that? Why do you think that video ads don’t work as well as the image ads for the prospecting phase?

Andrew: I think it’s because a lot of people, I mean, you’re just not going to get people to watch a certain percentage of the ad to make it worth it on video, right. I think video generally speaking, think about how quickly you go, I mean, you go through newsfeed. Like for me, if I’m looking at for 30 seconds like I might look at like 30 posts, like, you’re going through it very quickly. If it’s a company I don’t know, then I think it’s much more difficult. Now, there’s exceptions to this. Let’s say takes like a Brooklyn or something, where they’re doing animated GIF and or like a boomerang video. Okay, well, that’s an interesting way to take over the newsfeed, to add movement, and to then have a video ad that is building that video view audience.

So I think that there are opportunities with higher AOV products that it can work in that regard. But for many cases, it just doesn’t drive the traffic. That’s really where I mean, I have tested this so many times. And you can look at that — I can show examples. I mean, I could take screenshots of things where video has been tried in accounts of major scale and it just doesn’t work as well. But video can, I looked at an account yesterday, they had Instagram story ad running, they’ve four Instagram story ads running that I thought were awesome. They looked really good. And all of their prospecting over a 14 day period on the Instagram story ads, CPAs were through the roof, it wasn’t working. But in the add to cart, that was working well, right.

So the farther people go down, they are, like oh, yeah, that’s awesome. I was going to buy that anyway. So I think that’s where it can become powerful. But it just doesn’t generally drive the traffic. And this is a big difference between the info market in this because in info market, it’s something that you get people to watch part of it, it’s inspirational video, and you’re like, oh, yeah, that’s awesome. I definitely want to be a part of that moving forward. So that’s generally why I it’s harder. I’m not saying it doesn’t work. But I believe that there are more challenges that will present themselves. So just be careful where you use it and prospecting is generally my rule.

Steve: Interesting. Yeah, I mean, it just seems like video offers more options for retargeting because you can target based on how much they’ve watched, like, more options than if you just did a regular link ad.

Andrew: Yeah. And again, great point. It does, there are options that are there and it does give you a lot of flexibility. It’s just that for those of you that are thinking about trying it, or have tried it, it’s something just to be aware of, it may work for you. This is something that I have — I look at literally probably at least 30 accounts a week. And so this is something that I have just seen more often than not, it’s something I wanted to throw out there to be careful of.

Steve: Cool. Well, Andrew, believe it or not, we’ve been chatting for almost 45 minutes now. And I want to be respectful of your time. Where can people find you if they want to learn more about what you do or what you’re working on with Austin and that sort of thing?

Andrew: Yeah, definitely. So you can check out the Ecommerce Influence Podcast, which is one place and then you can check out our Foxwelldigital.com, which is the business that my wife and I run together with our fluffy golden doodle dog.

Steve: Typically what type of clients do you take on at Foxwell Digital?

Andrew: Well, we’re doing a lot of different things. Sometimes we play matchmaker between companies that are looking for an agency and agencies. So that’s a little bit of work that we do, we also do coaching for people. So we’ll come in and look at things and we’ll do everything from we come to your company, and we sit there for a day with you going over things and actually fly out to we’ll do coaching over a certain period of time over zoom and things of that nature. We do take on some management but it’s very, very specific mostly because we purposefully are a very small shop.

So we don’t take on a lot of management at this point because the people we have are good and we want to really grow in the coaching area versus the management side because that’s just what we do. So yeah, so that’s where you can check it out. But that’s generally what it looks like. But if you’re interested in chatting, send me a note. I’d love to chat with you. And if you have different experiences or you disagree or agree with what I’m saying, I’m always interested to hear because the thing I love about this industry is honestly I’m always learning every day. I get proven wrong and sometimes I’ll get proven right, and so I feel like it’s never ending. And for me that’s always really interesting because there’s always something that you can be trying.

Steve: Well Andrew, thanks a lot for coming on the show. Really appreciate your time.

Andrew: Yeah, absolutely.

Steve: All right. Take care.

Hope you enjoyed that episode. What I find interesting about listening to Facebook experts is that everyone has different experiences and strategies which just goes to show that you have to take it all in, experiment yourself and figure out what works best for you. For more information about this episode, go to mywifequitherjob.com/episode214.

And once again, I want to thank Privy.com for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop-ups for any parameter that is closely tied to your e-commerce store. If you want to give it a try, it is free. So, head on over to Privy.com/Steve, once again, that’s P-R-I-V-Y.com/Steve.

I also want to thank Klaviyo which is my email marketing platform of choice for e-commerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post-purchase flow, a win-back campaign, basically all these sequences that will make you money on autopilot. 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 talk about how I use these tools on my blog, and if you’re interested in starting your own e-commerce 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’re 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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Ready To Get Serious About Starting An Online Business?


If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

213: A Tour Of My New Business Venture GoBrandWin With Toni Anderson

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A Tour Of My New Business Venture GoBrandWin With Toni Anderson

As all of you know, I quit my full time job as an engineering director 2 years ago. And with 40 extra hours per week of free time on my hands, I’ve been searching for a long time for another project to pursue that would keep me happy.

In this episode, I’m going to formally announce my new business with my partner Toni Anderson!

Go Brand Win

Click Here To Add Your Brand To Our Next Sweepstakes

What You’ll Learn

  • Why giveaways are a great way to grow your email list
  • How our new service works
  • Why it’s free:)

Other Resources And Books

Sponsors

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.
Klaviyo

Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
Privy

SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
Sellers Summit

Transcript

You’re listening to the My Wife Quit Her Job podcast, the place where I bring on successful bootstrapped business owners and dig deep into what strategies they use to grow their businesses. And today on this podcast episode, I’m actually announcing a brand new project that I’ve been working on that is finally ready for public consumption. It’s a business idea that will help you build your email list and your social following for your e-commerce store. And it’s actually a free service that leverages collaboration and influencer marketing. That’s right, it is completely free.

But before we begin with the details, I want to give a quick shout out to Privy who is a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now, there are a bunch of companies that will manage your email capture forms, but I like Privy because they specialize in e-commerce stores. And right now I’m using Privy to display a cool wheel of fortune pop-up. Basically a user gives their email for a chance to win valuable prizes in our store. And customers love the gamification aspect of this, and when I implemented this form email sign ups increased by 131%.

Now bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve, and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ For 15% off. Once again that’s P-R-I-V-Y.com/Steve.

I also want to give a quick shout out to Klaviyo who is also a sponsor of the show. Always blessed to have Klaviyo as a sponsor because they are the email marketing platform that I personally use for my e-commerce store, and I depend on them for over 30% of my revenues. Now Klaviyo is the only email platform out there that is specifically built for ecommerce stores and here is 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 last week, easy. Let’s say I want to set up a special auto-responder sequence to my customers depending on what they purchased, 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 to 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 we’re doing another special episode that’s going to be different from the norm. Now as all of you know, I quit my full time job as an engineering director two years ago, and with 40 extra hours per week of free time on my hands I’ve been searching for a long time for another project to pursue that would keep me happy. And man in the past couple years I’ve gone through a bunch of different business ideas that never panned out.

I had two software business ideas that really never made it past the validation phase. I had an influencer marketing business idea that kind of never made it past the testing phase either. Now, I guess the good thing about all these ideas is that I didn’t end up wasting any time and money on these projects, because I basically called it quits before a large amount of time and money was spent. Anyways, there are a few things actually, that I discovered about myself during this phase in my life and trying these businesses, that never panned out.

And when I quit my technical job in 2016, I remember I immediately wanted to replace that job with a technical hardware based startup company. After all, I had been an engineer for 17 years; I wasn’t ready to give up the technical part of my brain. And so I kind of desperately went in search of a software SaaS based business that I could pursue. But I remember while I was starting working on prototypes for these software projects, I kind of quickly realized that the amount of upfront investment and more importantly the time commitment to get a SaaS based business off of its feet was pretty significant.

And in order to commit to a large software project, I’d have to devote many more hours per week than even my day job, I would say. And in the end, I remembered why I started my businesses in the first place to spend more time with friends and family. Also, the other thing that I learned was that it didn’t really matter what type of business that I decided to pursue, whether it be software or hardware or something else, but more that I enjoyed who I was working with because life is too short to not be working with people that you like.

Today I’m going to be talking about a project that I’ve been developing silently in the background with my business partner, Toni Anderson. Toni is also my partner for the Sellers Summit, which is my annual e-commerce conference and we worked really well together. I mean, at least from my perspective, I really have no idea how she feels about it, but it just felt right to start another business with her.

So what is this mystery business? Let’s start by saying hi to Toni first, Toni, how you doing today?

Toni: I’m doing great. Thanks for having me on again.

Steve: So I mentioned at least from my perspective, I think we work well. I assume you feel the same way?

Toni: I do. I think we have a good balance in personalities and also just the way we work. I think it really complements each other.

Steve: So our new business is called Gobrandwin.com, and Toni do you want to kind of do some of the onus about explaining it?

Toni: Sure. And can I give a little background on why I want to be a part of this because it’s something that to me is very important for my own e-commerce business?

Steve: Yeah, go for it.

Toni: So one of the things that and I think like a lot of you, I’ve been a part of Steve’s course. I’ve been in e-commerce world for several years now. And one of the hardest things that I have found is building my customers off Amazon and getting them to buy from my own store. And while I love Amazon, and I love the revenue and the amount of traffic that I get, I realized that those are Amazon customers and not my own.

And so for me trying to find a way to get inexpensive customers to the site has been a huge challenge. And one of the ways that I feel like has been very successful is through email marketing, but how do I get those people on my email list? And that problem that I have and I think most e-commerce people have has been something that we feel like Go Brand Win can really help with.

And so to explain what we’re doing, Go Brand Win allows e-commerce sellers to partner with each other to host massive giveaways. Now I think most of us have probably run giveaways on our websites that have been $100, $200 and you get some entries but you’re basically marketing to your own audience. Well, what this does is allow us to collaborate with other sellers in basically parallel vertical. So not competitors but people who maybe you sell shoes and another person sells scarves, so your customers are fashion focused.

It allows you to partner with those people and market to everybody’s audience and gain customers that way by hosting a massive giveaway in the likes of $1000, $2000, $3,000 but everyone is only contributing a couple hundred dollars in gift cards. And so that’s what Go Brand Win is going to do. We’re going to facilitate these giveaways for e-commerce sellers to help you build your email list, grow your audience, and gain new customers.

Steve: Yeah, along those same lines, I actually recently published an article about how Chinese sellers are really taking over Amazon. And they have a lot of inherent advantages, especially on price. And in this day and age, in order to be successful in e-commerce, you really need to have a strong brand. And the only way to have a strong brand is to have a way to bring customers and visitors back to your site over and over and over again in order to gain mindshare for your business. So you need to build an email list, you need to create a following.

And that’s one of my motivations, at least for building Go Brand Win.com to help brands develop their email lists with group giveaways. And it’s a win-win situation. Everybody wins, everyone gets a list, and everyone gets in your customer base.

Toni: And one of the challenges that I’ve had in the past is one, I’m only able to market to people who already know about me, or I’m using Facebook ads, which can be super expensive over time, especially if you’re not able to target the right demographic right away.

Steve: Yeah, absolutely. And I’ve actually done this in the past on a smaller scale. I’ve partnered with other wedding companies where we would send out information about our own companies to each other’s lists. And so far, as far as I know, there haven’t been anyone who’s done this facilitation at scale. So here’s how it works. Let’s go into some of the details. If you want to participate, you contribute at least one gift card towards your products valued at $200 or more, and this is the prize for the sweepstakes, Go Brand Win will assemble gift cards from other participating brands with a similar customer base to be combined in one massive sweepstakes giveaway.

Now, all the participating brands will send our co branded sweepstakes email to their list of followers and drive them to a sweepstakes landing page hosted on Go Brand Win.com. Now, all these entry forms will also be sent to related influencers in our blogger database. And right now we have almost 1,000 bloggers in various niches in our network and Toni has a huge Rolodex of bloggers as well. Now, consumers enter their email addresses in order to enter the giveaway. We send them special offers from your company, and then we select a grand prize winner. And after the sweepstakes are over, you will receive the full list of entrants and instantly grow your audience and your email list. Everyone wins.

Now the requirements to enter is you must have your own branded shopping website, you must be willing to contribute a gift card of at least $200, and you must have an existing email list or social media audience.

Toni: So I’ve done varieties of this over the past couple of years to build my email list on my shop. And I will say that I’ve had some massive successes and I’ve had some huge failures. And one of the things that I’ve learned from doing this is that the follow up sequence and the emails that I’m sending to these people after they enter is very, very important. Because one, you want to weed out the people that there are definitely going to be people that are just entering giveaways and they’re really not interested in your product. So you want to weed those people out fairly quickly.

But then the people that are interested and the people that are potential customers, you want to work with them through your emails to get them eventually to buy from you. So in the past, I found that the better my email sequence is and the more authentic I am in my communication, and the more purposeful I am in what I do with these people, the more success that I have. And the last project that I did like this totally on my own, I ended up with about a 17% conversion rate for sales on these customers after about a six month period. So I feel that’s successful because it didn’t cost me anything to actually run this giveaway minus the gift card, the value of my cost of goods.

Steve: Yeah, so I’ve actually run several giveaways myself, and I’ve compared notes with several colleagues. So one of my colleagues, Mike Jackness, he actually runs giveaways all the time. And he’s been getting incredible results. In one of his last giveaways, he got 6,000 email subs, paying only 14 cents per sub. And his overall cost of customer acquisition was only $3 and 47 cents, which is pretty crazy. I’ve run giveaways myself, not quite with the same results as Mike, but many of the contestants have become repeat customers on my list as well.

And I also had a student in my class Abby who took part in a group giveaway relatively recently, and she received over 6,000 names, and of those 61 people purchased for a total return of over $3,000. And one thing that we’re going to do is we’re going to try to make this contest really viral. We’re going to use a tool called ViralSweep and here’s how it works. Once you enter in a contest, you’ll be given additional options to promote the contest by sharing on Facebook, by pinning on Pinterest, by sharing on Facebook Messenger in return for additional entries into the contest. And the fact that everyone has an incentive to share will generally make the contest go a lot more viral.

So now if you haven’t run a giveaway or a contest in the past, if you’re just kind of brand new to the concept, you probably have a couple of concerns. So, one of the main concerns that most people have about giveaways and contests, are concerns about low quality email subscribers. One thing that we’re going to do is we’re going to have an autoresponder sequence in place. Once someone enters in, that will introduce you to all the brands and the sweepstakes along with some smaller gift card offers. And what that’s going to do, it’s going to introduce people to your brand along the way so that when they get emails from you, once we deliver the email subscriptions over to you, they’re not going to be surprised at receiving emails from your brand.

Toni: In addition to that, we’re going to provide all of our e-commerce sellers with basically a cheat sheet that helps you learn tips and tricks that we’ve learned over the years of doing this to obtaining those customers, keeping them on your list, taking them from cold to warm leads. So we’re going to give you resources so that you can do a better job of keeping those customers and encouraging them to make a purchase.

Steve: And bottom line this service is free. So if you think about it this way, a $200 gift card probably cost you maybe $50. And if you get a few thousand email subs out of it, that’s like 2.5 cents per email, which is ridiculously cheap.

Toni: Okay, so if it’s free, what’s in it for us, Steve?

Steve: So one thing for us, I run a blog. I also run a training class and I run a conference with Toni, and I want this as a value add for the students in my class and for those who attend the conference. I will also use these lists to promote my own e-commerce brand. I’ve run Bumblebee Linens for over a decade now. And I know these emails will be good for my store as well. And for me, at least, once we have critical mass, we may choose to monetize this list for larger brands. But for the foreseeable future, all these giveaways will be Free. What’s in it for you, Toni?

Toni: I think like you, Steve. I also want to grow my own business. To me being introduced to other sellers in my same vertical where I can partner with them is very helpful. I’ve seen the power of this in my own shop; I went from a website that basically had no customers to a website that’s profitable basically by running these similar giveaways on my own. So the ability to do this with other people, I’ve seen the power of I’ve seen how it works. And I love the fact that it’s basically free, there’s very little risk. So that for me is really important. It also obviously helps us with Sellers Summit and the other e-commerce projects that we work on.

Steve: I mean, we’re trying to make this a no brainer. And one of the other concerns that we think you guys might have is, what if I’m matched with other brands that have tiny email lists, like what’s in it for me? And what Toni and I are going to do is we’re going to spend a lot of time matching companies of the same size and reach together. And in addition, we’re going to also make sure that all the companies participating in a given sweepstakes all have a similar customer base.

Toni: I think if you’ve attended Sellers Summit and you’ve been in part of our mastermind groups, you see that pairing up the right people is very important to us. And we’re going to put the same level of effort into this project as we have pairing up people in Sellers Summit and other projects we’ve done.

Steve: And to be quite frank, I think we’re pretty good at it. Just based on running the conference, and the masterminds for the past couple of years, we have a pretty good handle on which customer base, and which brands will kind of go together. So the site is called GoBrandWin.com. And I just want to emphasize that everything is free for advertisers, go on the site, go on the advertise tab and go ahead and fill out the application. And if you have any questions at all, feel free to contact either me, or Toni at Toni@Gobrandwin.com or Steve@Gobrandwin.com. And that’s G-O-B-R-A-N-D-W-I-N.com.

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 flow, 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.

I also want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop ups for any primer that is closely tied to your e-commerce store. If you want to give it a try, it is free. So head on over to Privy.com/Steve, once again that’s P-R-I-V-Y.com/Steve.

Now, I talk about how I use these tools on my blog, 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.

I Need Your Help

If you enjoyed listening to this podcast, then please support me with an iTunes review. It's easy and takes 1 minute! Just click here to head to iTunes and leave an honest rating and review of the podcast. Every review helps!
 
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Ready To Get Serious About Starting An Online Business?


If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

212: Key Takeaways From Sellers Summit 2018 With Steve Chou & Toni Anderson

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Key Takeaways From Sellers Summit 2018 With Steve Chou & Toni Anderson

In this episode, I brought Toni Anderson back on the podcast to do a recap of Sellers Summit 2018.

The Sellers Summit is a conference that Toni and I throw every year. This is our 3rd straight year and it’s all about bringing ecommerce entrepreneurs together and learning new strategies on how to sell physical products online.

Today, we’re going to do a recap on what worked, what didn’t and some key takeaways from the sessions.

Right virtual passes for Sellers Summit 2018 are available for sale until July 1, 2018.

And as an added bonus, I also invited Scott Voelker from The Amazing Seller, Mike Jackness from EcomCrew and Greg Mercer of Jungle Scout to join me in a private Q&A webinar for virtual pass holders on June 28, 2018 at 10AM PST.

Click Here To Buy The Virtual Pass For Sellers Summit 2018

What You’ll Learn

  • The one change this past year that made a huge difference
  • Key takeaways from the Sellers Summit speakers

Other Resources And Books

Sponsors

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.
Klaviyo

Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
Privy

SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
Sellers Summit

Transcript

You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into what strategies are w