Audio

185: The 80/20 Rule Of Sales And Marketing With Perry Marshall

The 80/20 Rule Of Sales And Marketing With Perry Marshall

Today, I’ve got an extra special guest on the show. Perry Marshall is one of the world’s most sought after business consultants and is the author of many bestselling books in the PPC advertising industry including the Ultimate Guide To Google Adwords and the Ultimate Guide To Facebook ads.

He’s consulted in over 300 industries and he’s known as the godfather of PPC. Enjoy the show!

What You’ll Learn

  • The 80/20 rule in action and how it has helped many of Perry’s clients.
  • How to directly apply the 80/20 rule to your business.
  • How to decide which PPC ad platform to use for your e-commerce business.
  • The pros/cons of the major PPC platforms.
  • Where to focus your energy when you have limited resources.
  • Perry’s guidelines on how to market your business.

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

Ignite.Sellerlabs.com – If you are selling on Amazon and running Amazon Sponsored Ads campaigns, then Ignite from Seller Labs is a must have tool. Click here and get a FREE 30 Day Trial.
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Kabbage.com – If you run a physical products based business, sometimes you need a short term loan to buy inventory to meet demand, especially during the holiday season. Kabbage helps small business owners access simple and flexible funding right away. Click here and get a $50 Visa gift card upon signup.
kabbage

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 with their businesses. Now today I’m thrilled to have Perry Marshall on the show.

Perry is one of the most sought after business consultants when it comes to pay per click advertising, and he’s known as the godfather of PPC. And today we’re actually going to pick his brain on how to grow your business with the 80/20 rule.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. Now I’m super excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I actually depend on them for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not another provider.

Well, Klaviyo is the only email platform out there that is specifically built for ecommerce stores. Klaviyo can track every single customer who has shopped in your store and exactly what they bought, which makes it extremely powerful. So let’s say I want to send an email out 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. And if you’re interested in starting your own online business, head on over to mywifequitherjob.com and sign up for my free six-day mini course. Just enter your email on the front page, and I’ll send you the course immediately. 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 an extra special guest on the show. He is one of the world’s most sought after business consultants, and is the author of many bestselling books in the PPC advertising industry including The Ultimate Guide to Google AdWords, and The Ultimate Guide to Facebook Ads. He has consulted in over 300 industries, and he’s known as the godfather of PPC.

Now does this man sound familiar? Well it’s none other than Perry Marshall. And with that welcome to the show Perry, how are you doing today?

Perry: Great Steve, it’s a delight to talk to you and you’ve got a pretty great story. We were talking earlier about your story of living in Silicon Valley. Living in an expensive city is no day at the beach.

Steve: It is not yeah, but there’s perks, you can’t buy the weather anywhere else, right?

Perry: Right, right. Well, I live in Chicago and our weather isn’t always that great, but it’s a great city. So you have these tradeoffs, like well are you willing to pay to live in a world class city, and all the things that — and I think it’s worth it. I think the connections that you have and the things that you can do, and so probably a lot of your listeners live in expensive metros, and have to thrive in the competition, right?

Steve: Absolutely.

Perry: It’s a pretty new topic.

Steve: So hey I actually know your work because I think back in 2007, I think I picked up your Ultimate Guide to AdWords. But for the benefit of the listeners, can you give us like a brief background story about how you got into PPC in the first place, and then eventually what led you to focus on like the 80/20 principle of sales and marketing?

Perry: Well, I want to quickly start by connecting with the name of your show. So my wife quit her job when our first was born. And a few months before that I had gotten laid off from my engineering job and gone into sales, which was kind of being thrown in the lake and see if you can swim. So I’ve lived this man, and it was a good two years of bologna sandwiches and rum and soup, dialing for dollars and pounding the pavement, and so man I totally get it.

And look I think that when you take on that extra burden of being the breadwinner, and of course it could be the woman being the breadwinner, it could be the guy being the breadwinner. But I think there are just situations where you put yourself in the situation, it’s almost like a movie, like what is this character going to do anyway. And well he’s got a battle ox, and he’s got to go through wars and battles and go on ships in the stormy sea, but you end up being a lot stronger and having a lot more moxie.

So I say there’s two kinds of people in the world. There are poodles and there are or are wolverines. And the way that you become a wolverine is your wife quits her job if you have to make it work. So that’s like the early back-story.

Steve: Was that the last time you did engineering by the way, because I know we’re both electrical engineers, was that the last time you did electrical engineering?

Perry: Well, in a sense I still do it, which is a whole another story, which if you want to get into we can talk about, but actually I feel like in engineering background is a liberal arts education for the 21st century.

Steve: Interesting.

Perry: It’s really helpful, and so I’ve always had a hand in — and I mean I even regard a lot of what I do now and what we’re talking about as engineering. Like all of these marketing problems are really engineering problems with a whole bunch of human psychology mixed in. In fact I think part of my job — I got this customer named Ari Galper. He lives in Australia and he does not have an engineering or a mathematics bone in his body.

But he said to me the other day, he goes you know Perry, you actually did teach me to think like an engineer, and I can put on that hat when I need to. And there are times when it’s really called for all the way from, hey I get this agency and they want to manage my clicks, all the way to somebody wants to buy my company, or somebody wants to sell me their company, or they want to sell me their website or any of those decisions.

There’s a little engineering problem, like well is the money going into the black box and coming out with more dollars than went in? Those are all engineering problems.

Steve: Okay interesting. Okay so I didn’t mean to interrupt you. You were talking about — you left off on I guess the meat of the story how you got into PPC.

Perry: Yeah so after a couple of years, I started to find my way and I discovered direct marketing. And I worked in a company that sold industrial hardware and software, and the company got sold and I got some stock options, and I hung out my shingle. It’s like dude, now you’ve got like make this thing work, and you’ve got to generate leads. And Google AdWords came out about six months after I quit my job. And I was trying to generate leads, I had this little CD I would mail out called guerrilla marketing for high tech sales people.

I was looking for people to fill in that form and request the CD. And Google AdWords came out, and after about three days of playing with those I was like, oh my word, this is the coolest thing I’ve ever seen in my life, this is amazing. And so I grabbed onto it and for about a year it was my little secret, it was like I’m not telling anybody about this, a seeker fishing hole.

But then Ken MacCarthy who ran the system seminar for internet marketing, which as far as I’m concerned at the time was the best seminar for marketers on the internet. He said, hey you know Google AdWords, why don’t you come and speak at my seminar on Google AdWords. And all of a sudden I found myself in the Google AdWords business, which I didn’t even really know was a business, because it kind of wasn’t at the time.

And then what happened over the next couple of years was it just exploded and went crazy, and I found myself on the inside of every business that you can imagine like seeing their numbers, seeing their clicks, seeing their conversions, how it works, every kind of product you can imagine. I mean I remember when my first customer sold Japanese maples trees. And there was another guy who sold a summer camp, and there was all these people selling different things, and some of them were physical products and some of them were services and you just had this vast thing.

And well, so fast forward and here we are and all this stuff is normal now. In fact direct marketing is normal and tracking conversions is normal, and all this stuff that Claude Hopkins wrote about in scientific advertising in 1918, which is 99 years ago, is normal, right? And so, massive paradigm shifts.

Steve: So given that, so one of the common questions I get asked, I mean you’re familiar with all the PPC advertising platforms. So most of the listeners are on the e-commerce space, and one of the common questions I get asked is hey I just launched this site to sell physical products, and I really don’t know where to start with generating traffic, like should I go with Google, should I go with Facebook, should I go with a marketplace? Like can you kind of walk me through like the thought process on how you advise a client when they come to you with such a question?

Perry: Yeah, and this is a really good question, and so let’s just start — let’s try to keep you from getting eviscerated, okay? So first off you can’t master six PPC platforms, and like there’s this whole sort of social media guilt trip like, oh you got to be on LinkedIn and Pinterest and Facebook and Twitter, and [inaudible 00:11:04]. Like you can’t, you just can’t, and especially if the person who’s asking this question right now, there’s no possible way.

Here’s what you can do. You need to master one form of traffic and one form of conversion. And before you go doing anything else or get distracted by anything else, that’s what you’ve got to do. And so you need to pick a platform that’s appropriate to you, and I’ll get to that in just a minute, but then you need to really just hone it in and narrow it down, find probably some niche within the niche that you can master. And just like ruthlessly knuckle down on that one thing.

And it’s almost like do not pass go [ph], do not collect $200, do not skip around, do not get distracted. And I mean if there is anything that is just the mortal enemy of most people today, it’s just in the list, distraction.

Steve: Yes.

Perry: And it just it robs people of their whole life. So now you got to pick a platform. Well, I got a few things that might help. On our website, well we have a few interesting little websites. So is Facebook for me, is AdWords for me? And you actually get a score. So if you go to is FB for me, isfbforme.com, you can answer a dozen questions in about 60 seconds, and click the button, it’ll give your score on a scale of one to ten. How suitable is Facebook for your business?

You can go to is AW for me, which is AdWords for me dot com. And same thing for Google, and it’ll tell you not only Google’s search, it will also give you Google display, it’ll also give you a competition index of probably how much are you up to.

Steve: Can we talk a little about how that works?

Perry: Sure, sure, sure.

Steve: So like what businesses are more catered to Facebook, kind of like on a high level versus AdWords, versus the display network?

Perry: So really oversimplified summary is Google is the yellow pages, Facebook is the coffee shop. If what you sell is cultural and emotional, and relational and identity oriented towards the tribe that you belong to, then Facebook is really up your alley. If what you sell is more analytical, if it’s more business to business, if it’s more propeller head or more technical, Google is probably better. I mean just think of it from the standpoint of what is the state of mind of a person who is on Facebook versus what is the state of mind versus they’re on Google.

They’re using different sides of their brain really, and the whole entire platforms really reflect a different side of the brain. And so now both — there’s a lot of overlap between the two. Another thing about Facebook is Facebook is easier to make a splash; it’s easier to just go make something happen today right now. You could come up with a good ad and you could post it, and you have people responding in seconds.

But it tends to wear out, things you do in Facebook tend to have a limited shelf life. Whereas Google is a more — if you can get dialed in and optimized, which might take you months, it will run in run for a long time. So it’s kind of like a freight train. It takes a while to get going, but the momentum is tremendous. And so, there’s pros and cons to all these platforms.

Now, here is another thing that I think can be very powerful. Remarketing or retargeting which is when you go, you look at a dress on eBay or Amazon or somebody’s site, and then all of a sudden all these little dress ads are following you around. I think everybody has seen that. That is actually an underrated form of marketing that people have a lot of skittishness about. And they’re kind of resistant to do it, they’re like, well that’s creepy, I don’t really want to do that.

Plus those people even visited my website; I don’t want to have to pay to bring them back again, like that doesn’t seem fair. Well, all of those are reasons why you should actually do it. And what I want to say to you is that it’s probably the first thing that you should do before you go do everything else. If you have any traffic in your website, now if you’re starting, if you just bought your domain name yesterday, you have zero traffic; it’s going to do you no good.

But most people already have some traffic. And what’s happening on your website right now is three or 5% or 10% or 1% are doing whatever it is you want them to do, and the other 90% aren’t. Now out of the 90%, probably 70 or 80% will never do what you want to do ever, ever, ever. But there’s this like top like you already skimmed the cream off the top, but then there’s the top of what’s left that you can get to engage with you if you use remarketing, but you will lose them if you don’t.

Now, here’s why I’m actually telling you this. The reason I’m telling you this is because this is a great way to start either Google advertising or Facebook advertising. It could even be a way you get into You Tube where if you’re in a really competitive market and the clicks are expensive, and it’s hard to get a conversion for an acceptable cost, start with three marketing. And draw little concentric circles and make them wider and wider until it’s actually working with cold traffic.

And so remarketing becomes like a clutch that you let out so the engine doesn’t stall. And I just think, that’s probably going to help some people really…

Steve: When you’re talking about remarketing for AdWords, are you talking about just bidding higher for the people who already visited your site for your search terms?

Perry: Oh okay. So there’s several kinds of remarketing. So there’s remarketing lists for search ads, RLSA, which means you can bid very differently for people who already have visited your website on Google search than for people who didn’t. But there’s also remarketing on Google’s display network, which is an entirely different thing. So, all the banner ads on The New York Times, and in everywhere on the internet, in text ads.

So one of the problems with remarketing is people just keep seeing the same thing over and over again, they become banner blind. Well, you don’t want to do that, you actually want to take maybe your five best campaigns and put them all in rotation, so that the person who visited your website is now being introduced to multiple angles on what you do not just this one thing. And that makes the advertising interesting instead of boring and repetitive, and it makes it less creepy and more relevant.

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Can you comment a little bit about like the major differences between Facebook ads versus the Google Display Network?

Perry: Okay, so Facebook is always based on targeting some fixed audience. I mean pretty much any context like; well okay I’m targeting fans of a certain TV show, or feeds of a certain website or even some custom audience. It’s a finite audience which you are saturating. Well, Google Display Network is not like that. Google Display Network is always a passing parade, there’s always new people coming through. And so that makes Google Display Network much more evergreen.

So on display network, you can have text ads, you can have banner ads, there’s an enhanced ad where you actually load up all these different bits of text and images, and Google actually try different combinations for you. So all of these all these things exist.

Steve: There’s a reason why I’m asking these questions Perry. So I do, I run all the ads, all my own ads in all these platforms. And the only ad platform that I’ve never quite gotten to convert that well is the display network outside of dynamic retargeting.

Perry: Oh? Okay.

Steve: Yeah and so originally when I got you on here, I wasn’t going to talk about this, but I’m just kind of curious now since I do have you on. Of the clients that you’ve had gotten the Google Display Network working for like kind of what has been your strategy?

Perry: All right, so there there’s a bunch of strategies because there are a bunch of different ways that you can target. And so here’s kind of how you need to think about it is what’s going on for the most part on the Display Network is that there are a bunch of advertisers who have gotten locked in. And when you have a locked in, it is a magic carpet, right? It is and there is — like if you have a mass consumer product that could appeal to lots of people, there is gargantuan amount of traffic on Google Display Network, I mean you can hardly believe it.

Well so what happens is, what a lot of advertisers do is they use cost per action bidding and they lock in on a certain set of websites that give them an acceptable return on investment. And so now they have a very tight feedback loop, so they’re saying, I’m willing to pay $3 a conversion or $30 a conversion, or whatever the number is, so Google just show me these sites that get me these conversions. And so when you do that, you have to pay your dues at first, but once you start to get it locked in, it gets super locked in.

And then those sites become very difficult for other advertisers to wedge in on, because the existing, the incumbents are already in there, and Google always favors an incumbent. It’s just like elections; it’s actually for all the same reasons. And so the really like dreadful part about Google Display Network is that there’s millions of sites, and Google is prone to show your ads on sites that are full of all these people that are just doing ring tones or really low quality traffic.

Furthermore, there’s click fraud and like all these like scammy, spammy sites that run Google ads. And so there’s a whole lot of swamp land in Google Display Network, and so you actually kind of have to double down to figure out where to target. And Google Display Network — I mean I can’t even keep track of it, my co-author Mike Rhodes actually keeps official track of all these things. But I think there are something like eight to ten different targeting methods on Google Display Network.

So you can target by keyword, you can target by website, you can target by something called in market, which might be a good place to start where Google can figure out this guy is trying to buy a refrigerator right now. This whole group of people that you can target, all appear to be buying refrigerators in the last two weeks, and so you can target them. You can upload lists to Google, and you can create similar audiences, which is not as effective as Facebook’s version, but it does exist.

Steve: So do you recommend starting with keywords or these different audiences that you’ve been talking about, like in market audiences?

Perry: I would start with the less commonly used methods. Now, we have some chapters about this in our Ultimate Guide to Google AdWords book, and we also have a course center website called Display Expert Series, which is a real deep dive into how you do it. And if you’re going to spend money on Google, I would suggest availing yourself of a resource.

Another method that can be affective is category targeting. There are about 2,000 different product purchase categories on Google. And so if you’re selling baby stuff, then you can target baby clothing and things like that, and zero in a lot closer, and you need to take a mentality like — I call it toehold, foothold, stranglehold. You don’t try to kill the whole elephant all at once. If you can get a few whether it’s keywords or websites or categories, if you can get a few sites and a few targets that lock in, because you’re going to end up with certain pages that convert at an acceptable price.

And once you get into that virtuous cycle, then you can continue to expand. And you have to — especially at first you have to spend a lot of time eliminating all of these sites that don’t convert. It’s just this huge game of elimination.

Steve: So what I’m hearing is basically you want to go really narrow and maybe even pick specific pages on the web that you think are going to convert and just get those pages, and just kind of gradually build up your…

Perry: Okay, I don’t really go so granular that you think you know what the pages are going to be. That’s really dangerous. In fact guessing that I found is almost impossible. But what you can do is you can limit your exposure, you can pick some narrow band of some topic or some keyword, and then you can find some pages within that, that convert, and you can ruthlessly eliminate the rest. And once you start to have some that convert, then finding similar ones, it just becomes a lot easier.

Steve: Okay, so when it comes to someone who is brand new, and a lot of these listeners are probably just getting started with their sites, which platform would you recommend they start with? And I know it depends on the nature of their business, but so I kind of teach AdWords, not the display network obviously, but I mainly tell people to start with Google Shopping and Facebook depending on what type of stuff that they sell. Like what is your kind of recommendation, and if you have any sort of clients that you’ve — client examples that you’ve used to advise them, that would be great.

Perry: Well, I would certainly start with this is AW for me, is FBfor.com. I would start with the scoring, and I would at least start with what gives you the best score. And then I would shut out all the distractions, just try to hunker down, and I would start with remarketing which exists on all those platforms. And then I would expand outward to colder and colder forms of traffic. And the Holy Grail is that you actually get it to work on completely cold traffic instead of traffic that in some way, shape, or form has already been warmed up before they got to you.

If you expand out in those concentric circles, that’s the best way to ensure you don’t lose your shirt. Like if you’re just retargeting people that already visited your site in the last three days, it’s almost impossible to go broke or wake up the next morning having spent $2,500, and feel like you have a hangover, which is you really don’t want to have a bad experience right out of the gate, and then be soured to the whole thing, because PPC is like crack cocaine if you can get it to work right.

Now, I want to make sure — I mean answering your — you talked about Google Shopping. Google Shopping is definitely one of the less picked over, less competitive compared to a lot of other — so like compared to Google search. So Google search if you’re like in the local market is usually pretty reasonable, but a lot of national markets it’s very, very competitive, whereas Google Shopping is more reasonable for most people.

Like I have a client right now, and they were experimenting with, well they’d been doing Google search for a while, and they never could quite get it to convert an acceptable ROI. I started working with them, we did some aggressive experiments for a little while, they got a little bit of improvement, but not all that much, and basically we switched all of our efforts to Google Shopping, and that appears to be working better. And now they can hang out there for a while, and they can develop that.

So let me give you an example of what they’re trying to do. They have thousands of products. And some people would be tempted just like throw a bunch of mud at the wall. What I told him to do — and like a lot of the stuff they’ve sold, they’ve sold like little tiny quantities of most of it, and they’ve sold large quantities of only some of it. And I said, so what I want you to do, think about — so the way I do 80/20 is there’s the 20% that generates 80%, and there’s the 20% of the top 20%, which is the 4%, that gives you 64% percent.

I said start with that 4%. In other words start with the 4% of your SKUs that have generated 64% of your sales, which is almost exactly what the ratios are going to be. You have about 4, 5% of what you sell is two thirds of your business. It’s almost always true. I said just target those products on Google Shopping and ignore all the rest, and just get those working. That way you’re going to risk less money, and you have a way, way better chance.

And then within the 4%, you’re going to find the 1% that’s probably 50%, and you want to own it. And one of the most important things that I could ever tell you is you want to pick a couple of specific niches and completely own them, and you want to be number one. Being number one on the internet is great, being number four is terrible, it sucks.

Okay so I haven’t heard your whole story. I’m willing to bet money that when your handkerchief website went crazy, and you replaced your wife’s income, it was because within certain platforms, maybe it was search engines or advertising platforms; you were the number one handkerchiefs guy.

Steve: That’s correct. We focused on that, and we were the best, and the largest brand in handkerchief. So we ranked on Google, and our AdWords actually really made us a lot of money in the beginning.

Perry: Right, so you weren’t number one on handkerchiefs at the local mall, but you were number one on here, just on Google. And you’re like oh my word, honey, look at all these thousands of people every day, they’re looking for handkerchiefs on Google, who knew. And she’s like, really, wow, well I do not understand it, but I do accept it. And you’re off on your adventure.

Steve: I just want to take a moment to tell you about a free resource that I offer on my website that you may not be aware of. If you are interested in starting your own online store, I put together a comprehensive six-day mini course on how to get started in e-commerce that you should all check out. It contains both video and text based tutorials that go over the entire process of finding products to sell, all the way to getting your first sales online.

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So I’ll just try to summarize what you said. So for Shopping, pick your highest grossing products and then only bid on those in the beginning for Shopping.

Perry: Well yeah, like whatever the most with the highest margins and the most profitability and the most uniqueness and the best unique selling proposition, and the least me too thing that you have. It’s probably going to be all of those things, and you just leaves are down on that.

Steve: Okay, what is the disadvantage of just bidding on all of your products, but even like at a low bid just to see if you can get in those French clients who just happen to be looking for those products online?

Perry: Well, okay just think of it like this, every single product that you try to sell, you’re going to spend a certain amount of wasted money 50 to 95% of those, and you’re going to find out that they don’t work, okay? And it might be 99; I mean you may have a very low betting average on most products. And so if you have 30,000 products, and if it takes you $10 of advertising to find out that this product doesn’t work, then you could spend $300,000 just to know that 29,950 products don’t work. Like the odds are so tilted against you.

I mean you really; you can’t go into this with a bunch of blind optimism. That is just a recipe for disappointment.

Steve: So you’re recommending is go with the best product and just kind of gradually expand your product base on that?

Perry: Yeah.

Steve: Okay, and I heard you mentioned earlier with the retargeting, what time window do you recommend people start out with for like quick wins?

Perry: Well, it depends on what you sell and what the time — but most people are going to know, do people shop for my product for five minutes or five months, right? And so if it’s a short time window, well the smallest time window that any of the retargeting platforms give you to my knowledge is a day, and it’s pretty hard to risk that much money if your retargeting window is one day. It’s pretty hard to go along with that. I find a lot do well with maybe three days, but of course if you’re selling a $100,000 piece of machinery or something, then you might go several months.

Steve: And in terms of advertising, so once you have the retargeting mail done, what is your strategy for getting cold traffic to convert?

Perry: Well, so first you need to test a lot of different things. And the number one deficiency of most ad campaigns is they test this really narrow impoverished range of hooks in USPs and graphics and language. So the classic thing that we did in all the early Google Books is we showed people, if you change this one verb, if you change just cheap to free, or if you change half price to two for one, or you do these kind of simple little changes, that’s how you split test.

And so people sit there and then they split test commas and verbs and capitalization and stuff. Well, in principle that’s fine, but really the principle is forest, trees, branches, leaves. You tests like, am I in the right forest, let’s try these wildly different locations, let’s try — so I’m writing ads and one ad is about absolute fear and terror that something horrible like could happen if you don’t solve this problem. Or another ad is just how you’re going to be absolutely in Nirvana if you can solve your problem.

And so one is towards and one is away from you. You test black versus white, you test heavily contrasting ideas. And you see you can do that with retargeting. And so if you test ten radically different ads, you’re probably going to find that the difference between the best one and the worst one is at least three to one. Well, if you do this several times, and all of a sudden you come up with just really fantastic ad sleighs [ph], then you probably got an ad that can convert cold traffic. But 90, 95, 98% of your ads are never going to convert cold traffic, and they’re kind of doomed from the start, you just don’t know it.

Steve: What is your opinion on losing money on the cold traffic, and then making up for it on the retargeting? Do you do you always – let me see how I can phrase this question, do you always assume that your cold traffic efforts are going to yield a profit?

Perry: Well, probably the realistic assumption is that your cold traffic is going to break even, and that you’re going to actually make money starting with the second sale. In most markets that’s roughly the water level of equilibrium is most people are actually going slightly negative to acquire a new customer. And the really smart players, they figure out how to do that, they know that they can afford to do that, and they’re prepared to do it.

Steve: So when you’re calculating like the ROI of your campaigns, do you look at it holistically then across all the campaigns, or do you do it at the individual campaign level?

Perry: Both. So now if I’m going to lose money on the front end to acquire a customer, I’m really going to pay attention to what I’m doing. I mean look, it’s a very common strategy, in fact the bigger the companies are, the more they’re doing it, right? Like Amazon has been losing money acquiring customers for a long time, but of course I think we all know the reasons why they can afford to do that. But you still need to put every individual thing under a microscope, and you need to know, it’s like well, I’m willing to lose 15% acquiring this customer because I know that 1% of these customers go on to buy my $10,000 thing, and it’s worth it.

But you’re always dialing it down. Even after you get a few of those customers to come and spend the $10,000, you start to go, oh you know what, those customers are from these certain kind of suburbs, with these kind of backgrounds or these demographics, and I’m going to turn off all my losing money campaigns that don’t cater to that demographic, because now I know what my high end customer actually looks like, and I’m going to do my loss ladder stuff to acquire those people.

Steve: Okay. This kind of leads me to my next question is how has AdWords evolved over time? Like a lot of people believe today that AdWords is just so competitive and the cost per click is just so high that it’s just really hard to break into the incumbents as you mentioned before. And so have your strategies kind of evolved since that first edition of your book?

Perry: Well, so what you said is true, but there’s a yin to the yang and here’s what it is, is that — and this is sort of true of all the platforms is they are so aggressive, meaning Google, Facebook etc. They are so aggressive in developing new features and new menus and new ways of targeting, and all this kind of stuff. Most advertisers, like 90% of advertisers only use about 5% of the features, and 5% of the targeting methods. Ad it’s actually only a tiny percentage of huge advertisers that take advantage of all the stuff.

Meanwhile, there’s all these nooks and crannies that are on these platforms that in any particular one niche like handkerchiefs, hardly anybody is using at all. And so it’s the principle of the slight edge, it’s like if you’re slightly better than everybody else in six or eight areas and not just one, then eventually you’re going to edge out the competition. And you just you really have to know your numbers, your tracking has to be set up exactly right, it needs to be feeding you the right information.

And then also very few companies are actually methodically systematically testing stuff. Like even just basic A/B tests, very few companies actually do that the way they should, and almost none of them have a master plan for, oh I’m going to — so I have architected these me tricks of things that I’m going to test, and I’m going through all the different contrasting ways that I can present and offer. And so between now and next October, I’m going to go through this whole battery of options here.

And when you start combining those together, you really can win. And I’ll tell you something else just for free. The Google reps, 98% of them are just dialing for dollars. And they give them a script, and Google is a really trusted brand, and they’re friendly and they’re Googlers and all this kind of stuff. Okay first of all, most of them have never spent their own money on any advertising campaign. Secondly, they’ve got a quota.

I’ve got a friend who owns an agency, he won’t even talk to Google reps. His staff is instructed, I don’t talk to Google reps, sorry. Like the Google reps are astounded, like everybody wants to talk to me. Well, look, who’s paying for Google Earth, and who’s paying for all this stuff, right? Who is paying for Google Scholar and like all these other things? It’s you, okay? If I had a dollar for every person who says, yeah the Google rep called me and suggested this thing, and I lost $20,000, and this happens all the time. Google is not your friend.

Steve: This has happened to my student also. Like a Google rep called them, and they’re like, oh yeah, start the campaigns. And they blew by a $1,000 in a day and a half, and then they contact me. And I look at their campaigns, and it’s all display network, they’re bidding on games and all these like wasted areas, so yeah.

Perry: Look, Google is a casino, and they are stacking the deck against you. All the default settings when you open a new account, they’re all tilted in Google’s favor, okay? They’re out to get your money; they don’t care if your business succeeds. You have to sleep with one eye open, and frankly like if you’re not willing to invest in some education, don’t bother. Who are you kidding? You’re going to go into a game that’s existed now for how long, 15 years, and you’re going to play against the casino, and you think you’re going to win without going to card counting school, are you crazy?

I mean really? I mean and I know there’s a cynic who is going to go, oh Perry is just saying that, he’s self-serving. Well, there’s a reason I’ve made a living teaching Google advertising. It’s not like Google is helping me. But hey, if you want to go give your money do a Google rep, go ahead, it’s not my money.

Steve: I mean Google is — the interface is just so much more complicated these days too, like Facebook is just so much easier to teach. I don’t know, you’ve got your work cut out for you there Perry.

Perry: Well, I agree and we teach Facebook too, and I think Facebook is easier. It’s easier at the beginning, it’s in fact frankly it’s a lot easier. Google is this long optimization curve. But the nice thing about Google is once you get the freight train going, I mean it’s really awesome.

Steve: Yeah, it’s I think you forget it almost, yeah. Well hey Perry, we’ve been chatting for quite a while, and I want to be respectful of your time. Where can people find out about your services, what you offer, any books that you recommend, and that sort of thing?

Perry: Well, I think you should go to is AW for me, is Facebook for me, and sign up for what comes next. We have some free courses online, and look, if you’re going to spend any kind of real money in this, I would suggest that you get our Google AdWords professional courses. There’s Display Expert Series, and there’s AdWords mastery for people. Like if you really got to do this, then do it right, and Mike Rhodes and I will teach you how to do it correctly, and it’s at perrymarshall.com.

Steve: Cool. And I’ll link up all those resources in the show notes. Perry, it’s a pleasure having you on, and finally able to chat with you after I guess ten years is when I first encountered your book. Really happy to have you on, I appreciate your time.

Perry: It’s an honor to be on, and congratulations on what happened when your wife quit her job.

Steve: Yeah, and it’s cool. It’s nice to talk to another electrical engineer on the show as well.

Perry: You bet.

Steve: All right, take care Perry.

Perry: Take care Steve.

Steve: Hope you enjoyed that episode. Perry has been doing this for quite a long time, and he’s actually one of the entrepreneurs that I followed early on with my businesses. For more from information about this episode, go to mywifequitherjob.com/episode185.

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.

Now, I talk about how I use all 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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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!

184: How My Student Ron Makes 7 Figures Selling Childrens Wall Decals Online

How My Student Ron Makes 7 Figures Selling Childrens Wall Decals Online

Today I’m really happy to have Ron Eiger on the show. Ron is probably one of my oldest students in my Create A Profitable Online Store Course.

I launched the class in 2011 to very small group and I believe Ron joined in 2012 after I released it to the public. Now what’s cool is that Ron and I have kept in touch over the years and he’s been doing awesome.

He runs the store SunnyDecals.com where he sells children’s wall decals. In addition, he also private labels various products on Amazon. All told he’s on track to do 7 figures this year. Enjoy the interview

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Create  A Profitable Online StoreDid you enjoy listening to Jen’s story? If you would like to create your own profitable online store and join a community of like minded entrepreneurs, then sign up for my full blown course on how to create a profitable online store.

My course offers over 100+ hours of video and includes live office hours where you can ask me questions directly.

If you want to learn everything there is to know about ecommerce, be sure to check it out!

What You’ll Learn

  • How Ron came up with the idea to sell childrens wall decals
  • How he generated his first sales
  • How he recovered from losing 75% of his sales overnight
  • Ron’s advice for new ecommerce entrepreneurs

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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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. Now, today I have another student from my Create a Profitable Online Store Course on the show.

Ron Eiger runs Sunnydecals.com, and he’s on track to hit seven figures this year. He’s one of the oldest members of my class, and he’s had a lot of ups and downs with his business over the years. You’re going to love this episode because it provides a realistic account of what it’s like to be an entrepreneur.

But before we begin I want to give a quick shout out to Seller Labs for sponsoring this episode, and specifically I want to talk about their awesome Amazon tool, Scope. Now if you know me, I get really excited about tools I like and use. And Scope is a tool that actually increased my Amazon sales on several listings by 39% within the first week of use. Crazy, right?

Now what does this tool do that could possibly boost my sales so quickly? Well, quite simply, Scope tells you what keywords are driving sales on Amazon. So here is what I did. I searched Amazon and found the bestselling product listings in my niche, then I used Scope to tell me exactly what keywords that bestselling listing was using to generate sales. I added these keywords to my own listings, and my sales picked up immediately.

So today I use Scope for all my Amazon products to find high converting keywords in the back end as well as for my Amazon advertising campaigns. So in short, Scope can boost your Amazon sales almost immediately like they did for mine, and 39% is nothing to sneeze at. Right now if you go to Sellerlabs.com/wife, you can check out Scope for free, and if you decide to sign up, you’ll get $50 off any plan. Once again that’s Sellerlabs.com/wife.

I also want to give a shout out to Klaviyo who also is a sponsor. I’m always excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 20% of my revenues. Now 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 out an email out 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.

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. 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 really happy to have Ron Eiger on the show. And Ron is probably one of my oldest students in my Create a Profitable Online Store Course. Like I launched the class back in 2011 to a very small group, and I think Ron joined in 2012 just after I released it out to the general public.

Now what’s cool is that Ron and I have kept in touch over the years, and he’s been doing awesome. He runs the store Sunnydecals.com, where he sells children’s wall decals, and in addition he also private labels various products on Amazon. And all told, I think he’s on track to do seven figures this year. And with that, welcome to the show Ron, how are you doing today man?

Ron: Good. Thank you for having me on.

Steve: Ron let’s start like from the very beginning, because I know you’ve had a whole bunch of ups and downs in the past, what has it been like, five years now I guess?

Ron: Yeah.

Steve: Yeah, so how did you come up with a niche for Sunny Decals first?

Ron: Well, we were trying to find a good idea. I was taking your classes and you were encouraging people to find a specific niche. At the time our first child was born, and we were decorating the nursery, and I don’t know how most people are, but we were choosing paint with no VOCs, we want to get organic cotton, want to make sure the crib is not made in China. And then we got this custom made decals on Etsy. And when we installed it, we’re like, oh my God, it had such a strong plastic, almost toxic smell, and this was going right by the crib.

And we literally had to open the window and the doors and air it out for I don’t know, five, six days before the smell dissipated. And my wife and I looked at each other, we were like, there’s going to be a nontoxic decal out there on the market, right? And we started searching online, and we couldn’t find it. My wife is a graphic artist, so like maybe this is a good idea. Maybe let’s explore this a little bit further and do something a little bit different than what’s out there.

Steve: What were your motivations for starting the business in the first place, was it because you’re both going to quit or?

Ron: I was actually in the middle of looking for something new to do. Prior to this I was doing something completely different which was Intel marketing at a call center, and that was right towards the end of 2009. This is when the economy started taking a downturn, and we were doing mostly B to B sales, and it just started going downhill, and we decided to just get out of it. So I was in the process of just trying to find something new.

Steve: So your wife’s background was in graphic design. Did you have any prior experience selling online or even selling decals or are making decals?

Ron: None.

Steve: Zero, all right. How did you know that they were going to sell?

Ron: Well, I started studying some competitors and some other companies that were doing something similar but not exactly. So I knew that there was enough of a marketplace out there that if you could take a piece of that pie, we’d have a good business. And like I said, we wanted to make something different enough that was not being offered in the marketplace at the time and we thought that idea would work.

Steve: And because the decals that you bought were stinky and toxic, the ones that you were selling were not obviously, right?

Ron: So the difference between our decals and most decals that you find online is most decals online are made from vinyl, which is made from PVCs, and most of it is coming from China especially what you find on market places like Amazon that just mass produce. And ours is made from a fabric material which is nontoxic, and has a water based adhesive. It’s extremely user friendly, there’s no smell, and it’s — I would consider it a high end product. It’s more expensive obviously than Chinese decals out there, and all the vinyl ones, but it’s a quality product.

Steve: Was that a problem, like not the quality part but like you had to price it more expensive, right?

Ron: I mean I guess you could still say it’s a problem in a way to this day, because our volume is going to be less because most people don’t want to spend that extra money. But if the feedback that we’re getting and we get a lot of repeat customers, people understand that you get what you pay for. And it really is a big difference when you compare them side by side. It’s just hard to portray that online when you can’t show physically the product to the customer until they actually purchase it or read the reviews.

Steve: So let’s — so what I was hoping to do for the listeners is just kind of give a realistic view of your journey, because it’s not all like roses and make money all the time, and it’s not like you had an instant hit. So let’s talk about the beginning, like how did you start out, and then how did that kind of evolve — your business evolve over time? Like what was like the eureka moment when you started making money?

Ron: So we started selling on our website first. At first we played it really safe, we found a wholesale printer that was close by to us in LA. We had a very limited catalog, and it wasn’t going that well. And then we decided, let’s explore some other marketplaces. At that point I looked at Etsy first, and as soon as we start listing on Etsy, we started getting sales, which come on guys, Etsy, this is great. It’s a great marketplace, we’re getting consistent sales, things are going well. And after that, I started looking into selling on Amazon.

Then Amazon started taking off way faster than Etsy did, which is obviously, it’s a much bigger marketplace, more eyes, more customers ready to shop. And from there, say about a year or so into the business, we decided to buy our own printer and start manufacturing ourselves. And I had really put the printer in our garage, and worked from there.

Steve: Is it still in your garage?

Ron: Not anymore. We actually grew, we grew more, we got a warehouse now.

Steve: Okay, cool.

Ron: We’ve got more machines; we’ve got people helping us. The nice thing about having our own printer is now we’re not limited to carrying inventory; we could just print on demand.

Steve: Okay, and these printers, did you lease them or did you actually buy them out right?

Ron: We bought them out right, it was an investment.

Steve: Okay, sorry I interrupted you, so okay so you bought a machine, how did you needed to go that route, like was it just a numbers game at that point?

Ron: I saw our sales; I figured that the way we can grow is by adding more items to our catalog. The more options we present in front of customers, the better chance we have of getting a sale. So I knew the machine, having machines would be an important investment, and the only way that we could further grow the business. The model that we had before was just not going to work.

Steve: Okay, now let me ask you this. It seems like decals, you have these designs that your wife is generating, right, like how did you choose like what keywords to target on Amazon and your site? Like what was your strategy for deciding what designs even produce?

Ron: Just researching. We would just look online to see what was getting most traffic and those hits, and really just expand that we wanted to create like I said a wide set of options for our customers so anything good related, I think we have pretty much everything we could think of covered at this point. And right now we’re doubling or tripling the options on those, because we just want to offer more selection. And yeah, we just build it on that.

Steve: And these are all designs that your wife is making, you’re not licensing any designs or anything like that, right?

Steve: We looked into licensing, but honestly it just doesn’t fit our model. To get like a Disney license, you’re looking at 50K or more, and that only makes sense if you have like a master solution, if you get into like retail. And the volume that we’re selling at just doesn’t make sense to do it. So most of the art is either done by my wife, we’ll also hire some artists from time to time to help us with some designs. So we get different ideas, different styles.

Steve: I’m just trying to get an idea of like how you test a design. So you get a design, do you list it on Etsy and Amazon right away?

Ron: I list them on yeah Etsy, Amazon, and our website all at the same time.

Steve: And how do know — like what’s your launch process then?

Ron: Well, before October we had some review groups that we work with. At least it gets some reviews for our launch, but that obviously doesn’t work anymore. So honestly at this point if we launch new designs, if I feel really good about the product, I may send some into FBA, so it’s available for prime, turn on the ads, and we also have access to AMS. I do some headline ads as well to see if we could take off.

And it’s one of those things that I never know what’s going to do well until we just do it, because sometimes I love a design, I’m like, oh this is going to be a huge hit, and it’s not. And sometimes I don’t like a design, and that becomes a huge hit. So I couldn’t tell you why it happens, but that’s how it works.

Steve: So it sounded like you do merchant fulfilled normally, is that correct?

Ron: Well, we have — on a suit [ph] all the variations, we have more than 1,000 skews.

Steve: That’s crazy, okay.

Ron: We could have a million skews really because we could — like I said we print it on the fly, so when the order comes in, we could just make it. But I probably keep 100 skews our top sellers at Amazon that are available for prime. So yeah between the two, I’d say we probably sell more on prime because those are our best sellers and we do a merchant fulfilled. But yeah we have orders that we’ve got to make every single day.

Steve: Okay, and in terms of all the different platforms, do you use any software to kind of just manage the orders and consolidate them?

Ron: The only thing I do for software, I use ShipStation. That just makes it easier that I could do all the labels, and I don’t have to go to these marketplaces and copy and paste. The tracking information, it does it for me. But aside from that I don’t worry about inventory, which is nice except for whatever happens in Amazon Prime. And so yeah, I don’t need to worry about tracking that. Yeah, so it’s just really ShipStation like in a supervisor…

Steve: That’s actually really — your model is really nice because even though you’re doing merchant fulfilled, there’s no inventory, and you just kind of print on demand.

Ron: Yeah, I mean it opens up; we could do a lot of customization which we do. And like I said, I just want to keep adding more and more products, and there’s nothing stopping us from doing so.

Steve: And so for Amazon it sounds like you launch a skew and you run a lot of PPC to it and see if it has legs, and if it does, you send in a whole bunch for prime.

Ron: Exactly. And honestly at this point we’re kind of having a hard time keeping up with some of our top sellers, just printing them as fast as we can, but we’re at a point now we either have to start a second shift, or get another machine.

Steve: Oh is that right? Okay so you are machine limited right now?

Ron: Probably machine and manpower.

Steve: And manpower okay. Can I ask what your margins are, like I imagine ink and paper cost money, right?

Ron: Those are our biggest expense. Our material is our biggest expense. We definitely honestly the price of our material is — I’m not even joking, it’s like five times as much as like your standard vinyl. So it’s a big cost. Our margins are probably around 50%.

Steve: Okay wow even though you’re producing yourself.

Ron: We’re the manufacturer, right, so I don’t have to pay the margin to anyone else to make it for me; it’s all coming to us. But it’s coming to — it’s all our hard work.

Steve: Is that net or gross?

Ron: That would be net.

Steve: Okay net, that’s not — okay so that’s after Amazon fees and everything like that.

Ron: Yes.

Steve: Okay, that’s not bad, that’s good. Okay I see. And okay so Amazon — let’s start getting into the bad stuff now. So okay your Amazon sales are going well, and then what happens?

Ron: Well, there was a point, a couple years ago where we were approached by Amazon, they’re like you guys are doing really great, we want to bring you over and become a vendor for us. And my eyes are like, wow we made it, right because Amazon is not coming to us, they want to sell our products, they’re giving us tools that we don’t have now, like at that time A plus listing. At that time enhanced brand page content did not even exist. We had access to AMS, which was extremely hard to get into; there was no vendor express at that time.

So unfortunately this is hardly any information out there and no one’s talking about it about the vendor program on Amazon, and I didn’t know what to do. I thought about it, the sales rep was super aggressive that was talking to me, and assured me that everything’s going to go really, really well, and they want to transition our account over to the vendor side. I agree to it reluctantly, and it was a nightmare of a process. They basically — the process at that time moving on to vendor central means we had to recreate all of our listings, and move it over to the vendor side.

And what I learned from that is basically everything, all of our history, all of our BSR, all of our ranking got reset. And when this actually happened, our traffic dropped by maybe 75%.

Steve: Crazy.

Ron: And it turned out to be honestly the worst mistake we’ve ever made on Amazon. And to be honest now in retrospect, we weren’t a good fit for the vendor program, because we don’t want to wholesale to Amazon, we want control of our listings, we want to sell ourselves. And the vendor program is maybe good for manufacturers who can produce and just ship it, and they don’t want to deal with the sales on Amazon, but that’s not us. And that obviously wasn’t explained to me at the time. It took us…

Steve: How do you recover from that?

Ron: I want to say it took us a long time to recover. The vendor side is honestly awful. You don’t have seller support that you can call and talk to on the phone. Anything that you need, any problem you have, you have to open up a ticket, it goes to India, there’s definitely a language barrier. They hardly want to help, and it was terrible. I mean they changed all of our titles. I can’t — right now, I still to this day I can’t edit a lot of our products, they’re locked on the vendor side.

Steve: I was just wondering, can you create like very similar skews just as your own again, and then just…

Ron: Yeah, I probably could, but I know Amazon frowns upon duplicate listings. So if I let’s say have owls [ph], and I want to sell the same owls on the seller central side, I don’t think they’ll like that I’m creating a duplicate listing on the catalog.

Steve: Or maybe something very slightly different, just so you could put a new skew?

Ron: I mean that’s possible. Honestly our best selling products are the products that we came after this whole transition happened, because those are the products that we have full control over.

Steve: I just want to take a moment to thank Kabbage for being a sponsor of the show. Now, if you run a successful e-commerce business like I do, you probably know that the worst thing that can happen to you is to run out of stock. Now, my wife and I regularly import container loads of merchandise from China, and sometimes you need a short term loan to buy enough inventory to meet demand especially during the holiday season.

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So basically the ones that are now vendor central you kind of just let them go essentially?

Ron: We’re still getting sales from them, but nothing like we did before. It really threw us through the roof because at that time we had a lot of stuff on FBA, and we stocked according to demand. So some of our best selling products, we had a lot of interest in there. Now when everything reset, it’s like starting over from day one. So all those bestsellers were not bestsellers anymore, and we had a lot of stranded inventory, and we had to recall that.

And then all of a sudden things that were not bestsellers were becoming our best sellers, everything flip flopped around. So it was definitely the worst experience, and I think still to this day no one talks about the vendor program. I’m not sure why, maybe because there’s very few people in it.

Steve: I haven’t heard anything good about it actually from anybody.

Ron: It’s a mess. It feels very disorganized, and like I said you can’t — the support is really terrible. And you basically lose control of your listings. So I don’t think I would recommend it for most people.

Steve: Okay, so you started producing new listings obviously as yourself in Seller Central, and you kind of recovered your sales from doing that, right?

Ron: Yeah, it took time, it did take time, and our traffic to be honest till this day, our traffic probably did not recover from where we were before. We had a lot of traffic. Our conversion rate is a lot higher, but our traffic is down. We just — we can’t even buy the traffic that we had before.

Steve: Can we talk about some of the other marketplaces that you’re using, like you have your own website, and then you said you mentioned you sell on Wayfair, at CN House. And I’m just kind of curious like what the breakdown of revenue is there, probably you can just approximate. And I know you told me beforehand, before we started recording that your site actually doesn’t generate that many sales, and I was just wondering like what your take is on all those things?

Ron: Well, okay so Amazon dominates the business for us for sure, probably 70% of our sales, followed by Etsy I’d say maybe 15% of our sales, followed Wayfair, which maybe is 10% of our sales, followed by our website, which is maybe literally 5% of our sales, and Houzz probably not even a percent. So it’s a fraction of that.

Steve: So what are some of your challenges with your own website? I know you gave it a pretty strong go because we were communicating quite a bit in the beginning.

Ron: I’ve lost thousands of dollars trying to make our website work. I’ve hired out — I first of all I tried doing all the ads. I did Google ad campaigns and Google Shopping by myself, I couldn’t get to work. And I hired a Google partner, they promised me the world, and I paid them – I think I paid them a couple of thousand dollars to set up our campaigns. I tried it for six months, they just were not able to turn a profitable campaign, it just was not able to work.

And I think the problem is, our product is like, I compare it to buying art, and if someone is looking to buy like a tree decal, more than likely they’re not going to buy the first tree decal that they land on. They want to see other designs and other styles. Because of that conversion rate is kind of low.

And AdWord – text ads for sure don’t work, and the Shopping, the conversions were just not high enough to pay for themselves. So most of our sales honestly, are probably coming from organic traffic. And people maybe shopping around from other marketplaces, looking for us to see if we have other options or other deals.

Steve: I kind of categorize what you guys do like jewelry and clothing almost, because it’s all about the design, right? And so someone in the search for wall decals or children’s wall decals, they’re probably looking for something very specific, and unless you have this like gigantic library, it’s going to be kind of hard to make a sale.

Ron: That’s pretty much exactly it.

Steve: And your best bet is probably Facebook, where you show a specific design that’s a best seller and attract someone to just buy it.

Ron: We’ve played around; I’m not good with social media. I think that’s like my weakest skill that I have, but we have played around Instagram, we still do have an Instagram account that we post on, we have Pinterest, and there’s entries…

Steve: Has Instagram brought any sales for you guys?

Ron: No, when the ads first came out, I tried to promote that as well, but just wasn’t generating revenue for us.

Steve: What about email, do you have any email list for your business?

Ron: I know this is like a really important thing to have, I swear everyone…

Steve: I’m not trying to get at you, I’m just curious because we haven’t chatted a while.

Ron: No, I don’t and I know I should, and I know how important is, but I don’t have one set up.

Steve: So there’s different schools of thought on that, right? I mean Amazon is working for you, right? And why not press it, why not put all your efforts on Amazon as long as it’s working?

Ron: Well, that’s exactly what we did. When we started our website and then Etsy and then Amazon, and I saw Amazon was taking off, I’m like I’m just going to focus my attention here. And of course our site got neglected for a while because I want to go where the money is at. And yeah, I mean truth be said, like I said Amazon is our biggest producer, and I’ve learned a lot about the Amazon marketplace, all the ins and outs, and how to market products on there. And I learned some very valuable skills over the years on there.

Steve: So can we talk about why you decided to launch other private label products like kind of straight away from decals?

Ron: The deal thing was not always like a passion of mine, I thought it would be a good thing to launch to get something started for my wife because she’s very much the creative type. I wanted to learn how to sell things online. And I think from listening to your classes, I got turned on to other people like Scott Voelker, Greg Mercer, and I started learning about all the private label world.

And I thought this would be perfect, I’m very familiar with how Amazon works, I think about finding the right product, I’ll be able to make it work. And about a year and a half ago, I started another private label and that took off way faster than Sunny Decals. So I think you find the right product just moves more volume, and there’s just more demand. It’s a different business altogether.

Steve: Are you still having those products shipped to you, or do you ship them directly from manufacturer to Amazon?

Ron: I ship it to a freight forwarder, and from there to Amazon. So I do my inspections in China, make sure everything is okay. By now I have good relationships with my manufacturers, and yeah I ship them directly to Amazon.

Steve: So it ends up being less work then, than sunny Decals?

Ron: It is but it isn’t, right, because there’s always work to do. I’m always tweaking campaigns and optimizing, and there’s a lot of customer service. The more sales you get, the more customer service there is. So I definitely put my time into it every single day.

Steve: Okay, but in terms of just inventory and what not right, I mean on one percentage you can always — you have to deal with all the machines probably breaking, and…

Ron: Yeah, if I knew five years ago what I do today, I probably would have done things different.

Steve: Okay, let’s talk about that actually, what would you do differently if you’d start all over?

Ron: I wouldn’t do it myself. I mean manufacturing is hard physical work, and it’s very — it’s just labor intensive, and you have limitations as to — like right now how much we can produce because we have maybe lack of manpower or lack of machinery. And when you produce something overseas, someone else is making for you. You can move more volume; you don’t have to stress out about making it. Maybe the margins are a little bit less, but you’re selling more with no physical work involved. So essentially I’m a manufacturer right, so it’s hard work. I would prefer to white label out personally.

Steve: Have you run into any problems selling on Amazon, whether it be just like copycats?

Ron: I deal with every single issue you could think of. I mean anyone who’s in the marketplace long enough has seen it. I have so many stories; I wouldn’t even know where to start. I mean on the Sunny Decal side, we had for almost a year these brand new accounts popping up like maybe six seven at a time listing our whole catalog all at once at a fraction of the price. And they weren’t sending anything out, they were just basically collecting the money and shutting the accounts down within a month, and moving on, and I get them kicked out. By the time I get kicked out there’s three more replacing them.

Steve: That’s still happening by the way.

Ron: It’s still happening. It’s slowed down for us thankfully; maybe, I mean I was super aggressive on stopping these people. I just ran to something new actually this week. Someone, another seller I believe from China, they literally printed our decals, the image on Amazon onto a clear decal if that makes sense. So they just printed our image that was listed on Amazon, the worst quality ever and yeah and they had the nerve to actually send it to prime. They copied our title, they copied our image, they copied the decal, the bullet points, everything, and they made a separate listing.

Steve: That’s crazy.

Ron: So that’s the newest thing that I’ve seen. And then of course I’ve had people counterfeiting our products in other ways. We had even on the private label, the private label…

Steve: Do you find yourself constantly having to come up with new products because some of your old ones like the competition comes up, and then it’s not as profitable anymore?

Ron: I might be in a unique position because I know that happens a lot, but with my private label, I’m not budging on the price. I decided this is the price I want to sell it at, and I’m not going to do the whole price cutting. And we’re going to focus on the quality; we’re going to focus on customer service. And to be honest our sales never took a hit. I’m not saying that’s going to last forever, but it’s lasted this far.

We are probably one of the more expensive ones amongst the competition, but I’m definitely getting the volume that I want to get. We’re ranking very high up on page one. So k I’m just going to stick to what we’re doing.

Steve: Yeah, would you say that your listing is superior to the rest?

Ron: For sure. I mean I’m probably the only that have the enhanced brand page content, I have professional photography, it’s really well done. In my opinion, not to boast, but I think it’s really well put together.

Steve: And so one of the reasons why I like to have students on the podcast is to just kind of give like a realistic view, and there’s probably a lot of people listening who are on the sidelines who want to know like how hard it was for you to start making money. And so what would you say was like your biggest challenge, and give them some advice, like just from you people, because you started from scratch.

Ron: Well, there’s different challenges on Sunny Decals and the private label. So I don’t know which one would you want me to focus on?

Steve: Let’s go with both of them, we’ve got some time.

Ron: Okay, challenge on Sunny Decals, I guess justifying our price. We’re more expensive than anyone else, and why is someone going to want to spend more. And when you’re brand new, we had no reviews, no feedback, and honestly all this stuff just takes time. There was no shortcuts for us. If you look at our reviews, if anyone goes on Amazon and looks at Sunny Decals, you’ll see our reviews are stellar. We have a quality product; I mean you can’t really compare our stuff with most of the stuff sold on Amazon.

Ours is pretty much like handmade product, everything we do is touched by our hands, and it’s what I consider very high end, but it took time, it took time. It took a long time to get sales, to get reviews and feedback.

Steve: Do you still do giveaways?

Ron: No, I stopped that completely, because I don’t — I understand there’s a point of me trying to get sales velocity, but getting reviews is almost scary these days if you’re doing the giveaway, because Amazon may use that is incentivized. So I just avoid it altogether.

Steve: What about heavily discounted, do you do any of those?

Ron: I’m doing that right now with one of my new launches on my private label, but I’m so funny with challenges. I mean it’s not — still not taking off as fast as I want despite cutting the price. I think I just have to build up over time.

Steve: Okay, what would you say is the biggest challenge in launching a product on Amazon, or the whole product selection process?

Ron: That’s, honestly that’s something I still struggle till today. I am in a position right now; I’m actually kind of stuck. I’m trying to find another product to launch for the private label business.

Steve: How did you find the winner, you mentioned that it sells like 1,000 units or thousands of units a month or something.

Steve: Well, I used Jungle Scout honestly at that point, which Jungle Scout; this is probably in the early days of Jungle Scout, which there were probably not as many users on. I found a product, I read the reviews, I found what people were complaining about it, I found ways to improve on it and make it different, make it our own, made some really nice packaging, which no one else was doing at that time. I just found ways to just make it a little bit better than what else is out there.

But today I want to say I’m kind of scared to use Jungle Scout. I just feel like every time I add something to a tracker, I’m just showing it to the rest of the community. I hope I’m not getting you in trouble by saying that.

Steve: No, that’s okay.

Ron: But that’s why maybe I’m finding it harder to do the product research now.

Steve: Interesting, so what advice would you give someone who wants to start on Amazon today?

Ron: I would use certain tools, maybe not necessarily the tracker, but I still use the let’s say the Jungle Scout plug-in.

Steve: the Chrome plug-in, yeah.

Ron: Yeah, so today you have tools that didn’t exist years ago, and you can validate products that you couldn’t do before, and honestly it makes it a lot easier. You can go with full confidence knowing ahead of time that an item sells before you have to invest into making it and start selling it, right? What I would advise people is just once you find that item is to just do it, and I think people are just reluctant or may be scared of the challenge, and maybe the first product is not going to be like a home run, but you’re going to learn a lot in the process.

It’s learning, there’s a learning curve here, and the only way to learn it, is to actually get your feet wet and do it. And like I said I mean till this day I’m still learning new things every day, so this is part of how it works. I think you just have to try it.

Steve: Let me ask you this Ron, when you place an order for a brand new product that you don’t even have a listing for, how many units do you start up buying these days?

Ron: I always buy a 1,000. Again I do enough research where I feel confident that I could eventually sell them, and I am terrified of running out of inventory. I don’t know, I feel like back in the day of running out of inventory, I restock. I’d almost jump back almost immediately back to where I was before. but the last couple of times I’ve run out, I suck, I’m doing a new product launch all over again. I really had to fight my way back to my position I was before.

Steve: Interesting okay.

Ron: My advice is, don’t run out.

Steve: So what’s interesting about Ron was saying, for the people who are kind of on the sidelines is he’s willing to put down a 1,000 units as an initial investment. I know like the people that I teach, they are a little bit squeamish about dropping a lot of inventory. And so I guess what most people don’t realize is how huge the market place is, and if you do the research right, like even if it takes you a little bit longer to move those units, like eventually they’ll move if you did your research correctly.

Ron: Exactly, and if you got to drop, maybe your margins might not be as attractive as you first thought, but I believe you could always unload it if you really wanted to. So especially if you’ve done your research and you know that there’s enough demand for that item, you’re going to be able to do it.

Steve: Let me ask you this, so most of your sales are on Amazon right, and so are you ever worried about that market kind of changing and like if it — I don’t know if you’ve ever gotten a serious ban or anything like that, but are you worried at all about that?

Ron: I am very worried about that, yeah. I have had issues like that already happen; I’ve had fake people trying to report me for some sort of infringements. So like I said, I think at this point I’ve dealt with almost every scenario out there. Yeah, it does make me nervous. At any point Amazon can decide to sell a product, at any time Amazon can decide to increase their commissions or to increase storage fees or something else that will hurt us.

Steve: I just want to take a moment to tell you about a free resource that I offer on my website that you may not be aware of. If you are interested in starting your own online store, I put together a comprehensive six-day mini course on how to get started in e-commerce that you should all check out. It contains both video and text based tutorials that go over the entire process of finding products sell all the way to getting your first sales online.

Now this course is free and can be attained at mywifequitherjob.com/free. Just sign up right there on the front page via email, and I’ll send you the course right away. Once again that’s mywifequitherjob.com/free, now back to the show.

So my follow up question for that is, are you worried enough to focus on other marketplaces at this point?

Ron: To be honest I did recently get our products listed on to Wal-Mart. Not on the Sunny Decals, on the private label. So yeah, I think it’s important to try to leverage yourself and get yourself to other marketplaces for sure. It’s just all those marketplaces combined don’t have the volume and just the traffic that Amazon produces. I mean whoever goes to — Amazon is just a beast at this point, and I think they’re unstoppable. People go there to shop for one reason only, so it’s a really — it’s an addiction that I don’t think can stop, right?

Steve: Yeah I know, yeah that’s what I’m finding as I’m teaching my class now, like people get like this huge flood of sales on Amazon, and it’s natural to just put most of your efforts on whatever is working, and kind of ignore everything else. So I was just kind of curious what your take was on that.

Ron: I mean I wish that super sales were coming all from my site. That would be the ultimate. But it’s not for lack of trying; I just haven’t been able to produce those kinds of results.

Steve: Hey Ron, how much money did you invest when you first started because this business?

Ron: The Sunny Decals or the private label?

Steve: Let’s do the Sunny Decals.

Ron: So Sunny Decals initially was very little because we didn’t have the machinery, I was basically buying it wholesale. So I would say definitely less than $10,000, but the machines are expensive. They run anywhere from $20,000 to $30,000 each, so that’s an investment. By that time I knew that was going to work, so I’d already — I took a very cautious approach. If I was more risky, then I probably would have bought machines from the get go.

But I validated by how we started, yeah maybe it was a slower approach, it took a little bit longer, but I felt confident that I could spend that money on that machine to get the business started. So yeah, [overlapping 00:38:31].

Steve: What was your initial investment on the private label?

Ron: I started with 10,000.

Steve: Ten thousand also, okay.

Ron: Yeah, $10,000 got me pretty much my first purchase order. I started with just one skew. This is another thing that I feel like a lot of people don’t talk about is liquidity when it comes to private label. The more successful you become, the more you have to invest in the products, and it gets extremely expensive very, very fast, especially when you move a lot of volume. So it takes a lot of money.

Steve: Let me ask you this, do you take a salary for yourself, like it’s really easy to just put all your money back in inventory, right?

Ron: It is. On the private label, I honestly just started paying myself salary a few months ago, and that was after over a year. I was just like you said, I was just dumping everything right back in, but at some point you have to pay yourself for your time, for your effort, you have to give that to yourself. And yeah, I’m just lucky that I guess I got to that point where I feel comfortable to do that.

Steve: Yeah it’s funny, like with our store we always — we needed the money to live in a way. So we always risked running out of stock. It was just a conscious decision, like it stunted our growth for sure, but it is…

Ron: Yeah, exactly. I mean that’s something you have to do.

Steve: How long did it — so with your site or with Sunny Decals, like how long did it take you to launch, and how long till your first sale?

Ron: It probably took longer than it should have, because we’re super picky on how things work out. My wife is extremely meticulous about things, she designed our website herself, it was a lot of work. I’d say Sunny Decals probably took us maybe a couple of months before we could even start selling anything. It took us — we wanted to put enough designs together that we felt we could launch with.

Like I said we started on our website, we wanted to make sure everything was set up perfectly. So yeah, I mean it took longer than I feel like it should have, but it was our first try, our first go at it, we just wanted to be super careful.

Steve: And in terms of Amazon or your last private little product, like how long to the first sale?

Ron: I started researching products in February, not this year, the year before, and by April I was already selling. So I’d say that…

Steve: Pretty fast.

Ron: Petty fast yeah. I did airship the first ones. I was able to do a little bit faster, but I mean at this point our products are just too much. We ship now by 20 foot containers.

Steve: Cool man. So, any advice for anyone out there who just kind of waiting on the sidelines and afraid to take any action?

Ron: Well…

Steve: I mean given all the bad things that have happened to you and all that…

Ron: I think people today have a lot of information out there to help them that really wasn’t as available when I first started. I was in your class. I wouldn’t be able to do it without taking a class. I’m not just saying that to boast or give you a big boost or anything, but it’s shaped…

Steve: Check the mail man, yeah.

Ron: I do get some people ask me from time to time like, hey how is his class, is it worth it, is worth the cost? And I always say, yes it is, because the value that you gave us at that time, and I’m sure that you still do, it’s constant updated information, nonstop work. You gave me a lot of one-on-one personal attention that I needed when I had questions to ask. And honestly when are you going to get a coach or someone to help you when you run into these obstacles and problems?

I think people today have enough resources out there to get the knowledge that they need, and to just do it. People that hesitate, they’re like; oh they don’t know if they want to take the leap and to give it a try…

Steve: Let me ask you this Ron, clearly you don’t think that you actually need ten grand to start, do you?

Ron: You could do it for less. I know there’s certain classes out there also teaching to start with $1,000 or to start with making very small purchase order let’s say on Ali Express, and to validate products before you invest more money, or to go bigger. So there’s certainly — look like I said, we started very cautiously. We didn’t start right away by buying machines. So there are ways to start private labeling with a lot less money. It just maybe will take a little bit longer.

Steve: Okay, let’s talk about your lifestyle real quick to kind of end this interview. So I mean you have a family?

Ron: I do.

Steve: How many hours do you — I guess has the business made you have less time without a lot more time…

Ron: I mean I’ve been an entrepreneur pretty much my whole life, and I think entrepreneurs work more than one else. I work a lot; I mean I work all day. I come home; I come home at relatively early times so I get to spend time with my kids. But after they go to bed I’m usually working. So whether it’s orders or product research or talking to my manufacturers, I’m still up for a couple more hours at least every single night still working.

Steve: Okay, but you do have the time — I mean you can time shift your time so that you have plenty of family time. I know you’re coming to my neck of the woods tomorrow, right?

Ron: I am yeah. We’re going to go visit family up there. So yeah I am fortunate enough that I could kind of like set my own schedule on the way. I start work a little bit later maybe than most. I get to wake up with my kids, and make sure before they go to school and everything, and then I’m home when they come home, and I get to spend a few more hours with them before they go to sleep. So I do appreciate that I’m not working a typical like nine to five job. Yeah, but my hours are — I’m fortunate that I can work at night and put some hours in at night when I need to.

Steve: You would never go back to a regular job, right?

Ron: Steve, honestly I’ve only had one job my whole life, and it was my first year out of college. Ever since that first job, I’ve always worked for myself. So I don’t think I could work for anyone else, that’s just not my personality Steve.

Steve: Well hey Ron, thanks a lot for your time man. It was really good to hear a very candid interview from you about like what would be good things that have happened, the bad things, and just like a pretty realistic view of what it’s like to be an entrepreneur.

Ron: Yeah, well thank you for having me on, and of course there’s going to be challenges for everyone out there. Nothing in life comes easy. I don’t care what job you have or what you do, there’s going to be challenges in everything. So this is just a different type of problems I guess to have, right?

Steve: Yeah man and congratulations on your success. And I’m going to be seeing you at the conference, at my conference next year which will be really exciting because we’ll finally get to meet after what is like five or six years?

Ron: Yeah, I almost made it last year. But this year for sure, right?

Steve: Yeah for sure. I got you down man.

Ron: All right, thank you so much.

Steve: Bye man, take care.

Ron: Thanks for having me on.

Steve: Hope you enjoyed this episode. What I love about Ron is that he didn’t give up when he lost 75% of his revenues with Amazon vendor central. He stuck with it, and he now makes seven figures with his e-commerce business, and now he’ll be joining me at the Seller’s Summit mastermind in May. For more information about this episode, go to mywifequitherjob.com/episode184.

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 Seller Labs as well. Their tool Scope has completely changed the way I choose keywords for both my Amazon listings and my Amazon advertising campaigns. Instead of making random guesses, Scope tells me exactly which keywords are generating sales, and within the first week of use, I saw a 39% increase in sales. It is a no brainer. So head on over to Sellerlabs.com/wife and sign up for free. And if you love the tool you will receive $50 off. Once again that’s sellerlabs.com/wife.

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 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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183: How To Get Over A Million Email Subscribers In 2 Years With Sam Parr Of The Hustle

How To Get A Million Email Subscribers In 2 Years With Sam Parr Of The Hustle

Today I’m thrilled to have Sam Parr on the show. Sam is the founder of TheHustle.co which is a media company that caters to entrepreneurs.

They have more than a million email subscribers and email is the backbone of their business. Every single day, they send out an awesome email that details the latest startup and tech news.

The also run an annual conference called HustleCon that I had the pleasure of attending as well. Anyway, what’s amazing is that Sam has managed to build this gigantic email list in a few years which is crazy. And today, we’re going to learn how he grew his company so large in such a short period of time.

What You’ll Learn

  • How Sam gathered a million email subscribers in such a short period of time.
  • The Hustle Co’s business model and how they make money.
  • How Sam generates traffic to his site.
  • How Sam gets high profile folks to write for him.
  • Sam’s email metrics and he maintains such high numbers

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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Ignite.Sellerlabs.com – If you are selling on Amazon and running Amazon Sponsored Ads campaigns, then Ignite from Seller Labs is a must have tool. Click here and get a FREE 30 Day Trial.
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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. Now today I am thrilled to have Sam Parr on the show. Sam is the founder of Thehustle.co, the premier media outlet for entrepreneurs, and he’s amassed over a million email subscribers in a very short period of time. And today we’re going to find out how he did it.

But before we begin, I want to give a shout out to Klaviyo who is a sponsor of the show. Now I’m 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 20% 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.

They can track every single customer who has shopped in your store and exactly what they bought, which allows you to do many things. So let’s say I want to send an email out 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.

Now 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 I also wanted to give a shout out to my other sponsor Seller Labs, and specifically I want to talk about their awesome Amazon tool, Scope. Now I’m really excited about Scope because it’s a tool that I like and use. And Scope is actually a tool that increased my Amazon sales on several listings by 39% within the first week of use, crazy, right?

Now, what does this tool do that could possibly boost my sales so quickly? Well, quite simply, Scope tells you what keywords are driving sales on Amazon. So here is what I did, I searched Amazon and I found the bestselling product listings in my niche, then I used Scope to tell me exactly which keywords that bestselling listing was using to generate sales. I added these keywords to my own Amazon listings and my sales picked up immediately.

So today I use Scope for all my Amazon products to find high converting keywords in the back end as well as for my Amazon advertising campaigns. So in short, Scope can boost your Amazon sales almost immediately like they did for mine, and 39% is nothing to sneeze at. Right now if you go to Sellerlabs.com/wife, you can actually check out Scope for free, and if you decide to sign up, you’ll get $50 off of any plan. Once again that’s Sellerlabs.com/wife, 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 Sam Parr on the show. Now, Sam is the founder of Hustle.co, which is a media company that caters to entrepreneurs and millenials. They have almost a million email subscribers, and their primary form of media is actually email which is pretty cool. So every single day, they send out an incredible email that details the latest startup and tech news.

And they also run an annual conference called Hustle Con that I had the pressure of attending a couple weeks ago as well. And let me just say they get the most incredible speakers to speak at this conference. And what is actually kind of amazing about Sam is that he’s managed to build this gigantic email list in just a little bit over a year which is crazy. And today we’re going to learn how he grew his company so large in such a short period of time. And with that welcome to the show Sam, how are you doing today man?

Sam: You know I’m great, how are you?

Steve: So Sam, how does a dude from in the middle of nowhere Missouri create Hustle Co? What’s the background story, how did you get started with it?

Sam: Well, my mother would not be happy if you said that. I’m from St. Louis, it’s somewhere, it is in the middle of the country though, St. Louis, Missouri. So how did it get started? Well, the abbreviated version is basically I went to college in Nashville Tennessee, and while there I started a couple companies because I met this very inspiring person, this guy’s name was Mike Wolfe. Have you seen that TV show, American Pickers?

Steve: I have not.

Sam: Okay, it was a TV — it was really – it was way, way, way popular between 2008 and 2012 or so. It was the second most popular show on TV. Basically they went and bought junk and sold it for more, that’s the over simplified version. But anyway I met him, and I worked for him, and he was the first like real — he was like the first real entrepreneur that I’d ever met. I was like, oh that’s cool, like I’ve been selling stuff that I bought forever, but I didn’t know like you could like make a big thing out of it, and that’s what he taught me.

And so basically while I was a junior in college, I started a chain of hot dog stands called Southern Sam’s, winners as big as a baby’s arm, and that was my first introduction into entrepreneurship. And while doing that, I met another mentor of mine, Casey Smith who showed me that you could do like cool things on the internet, like you can make a living on the internet. And I started doing some research, and I found some cool companies. One was called Air Bed and Breakfast.

This was in like 2009 when I first heard about them – oh no, sorry 2011when I first heard about them, 2010. And I was like this Air Bed and Breakfast thing, that sounds awesome. And then I did more research, and I realized there was another company nearby called Uber. And I was like, man, all these like really cool internet companies are all in the same area in San Francisco, I need to get up there.

So I applied to get a job at what was then, its Airbnb now, but it was then Air Bed and Breakfast. And I flew out for my interview, and while here I stayed on an Airbnb. And I met a guy named John Havel, and John Havel was basically had just quit his job like three weeks ago, and I was like — because he did start a company, and I had never met anyone my age who moved to another city like I was planning on doing, and who also made money on their own, and started companies, that I was like, oh this is sick, I feel like I’m at home. I feel like this is where I should be.

And so this all happened when I was a senior in college. And so I decided to pack up my bags and I left school before our graduation.

Steve: Crazy.

Sam: And I turned down the Airbnb job, and then I asked John if I could join on the idea that he was working on. And that’s kind of how I got up to San Francisco, and that was in the fall time of 2012. And so we, John and I created this website where we helped people find roommates, and very quickly like ten months after starting it, we had a very small exit, and we sold the company.

Steve: To Airbnb or no?

Sam: No, to a company called Apartmentless. That would have been close to Airbnb though. And then we sold it, and I worked at that company for one year and one day, and then I was like what next, what do I do? And I wasn’t sure what I wanted to do in my life, I wasn’t sure at all. And so my idea was, what if I host a conference called Hustle Con, and I can surround myself with lots of other entrepreneurs, and kind of like what I did with John. Maybe they can give me inspiration, and hopefully I can find my next big idea.

And that’s what I did, and I hosted an event called Hustle Con, and that’s kind of started this whole media business that we run now, and hopefully will become a huge empire one day. But yeah that’s kind of how we got to where we are now.

Steve: So the conference came first before the email list or?

Sam: Yeah kind of, so basically yes it did, but the conference was an email list as well, so basically I like knew that — I did the math and I was like, okay like one percent of people who come to my website will buy a conference ticket, but like 20 or 30% will give me their email, and about 20 or 30%, this percent will make a purchase. So it’s very — like it’s far better if I just collect people’s emails and try to sell them when they come to the website.

And so what Hustle Con, the premise was quite simple. I would collect people’s emails, and I only had two or 300 at the time. I just like all my friends and their friends, I just like spammed them all, like hey, you guys know where my home is, you’re now on this email list. And it was basically two days a week I would write a funny article on someone or something interesting, and then I would send that to my list, and then at the very bottom it would say like, I would write something funny about the speaker. That if you want to participate and like see this person and like hear and learn from them, click here and buy a ticket and come to Hustle Con.

Steve: Okay, so let’s back up here. So in order start a conference like you kind of have to have an audience. So you didn’t have any audience before you decided to start the conference?

Sam: The email list was 200 people.

Steve: It was 200, okay and how did you attract the speakers, because you had some high profile speakers even that first year, right?

Sam: Yeah definitely, bigger than I deserved, how? Well, I’m a cold email master you know, what I do is I’m a self taught copywriter, and I’m a sales person. I’ve been selling forever, and I understand marketing a little bit. And I just added those altogether, and I was like you know I’ve been reading, I love business news and technology news, and I love reading about other companies. So I was really well versed in other companies, I knew who was interesting; I knew who would come and speak.

And so I basically just cold emailed them and I did a really good job of saying, you need to speak here because — and I would tailor my pitch to whatever their needs were. And I kind of understood where they were in their company’s lifecycle because I had been — I like to follow some brands.

Steve: So give me an example, like let’s see, you probably got some high profile CEOs. So how did you pitch them, give me an example?

Sam: Sure, so Rick Marini, I love Rick Marini. Maybe you don’t know, but basically Rick started a company called Branch — was it a Branch — no sorry, not Branch, Tickle. He started a company called Tickle, do you remember Tickle?

Steve: I’m not familiar with the company actually.

Sam: It was it was huge. Yeah it was pretty huge, but he sold it like 120 or $30 million, like some big number, and then he started BranchOut. That was really a big company. Anyway I was a big fan of his, and I read and watched every conference that he had done, and I knew that he had a situation in his life where he kind of got a job at Scientific [inaudible 00:10:42] which was a high end consulting firm, and they would pay him like a quarter million bucks when he was 26, or he could like risk it all and go and start a company, and he decided to start a company.

And I basically when I emailed him, I said, Rick I’m similar to you in that when you were deciding between going to this really nice company, Scientific [inaudible 00:11:01] or starting what would then become Tickle, you decided to go with Tickle. I did that recently as well, and so we could kind of relate on that, and I would love it if you could tell that story at my conference. And he said, I can’t believe you found that story because it was a video with like 200 views. He was, that’s amazing that you found out, you really done your research, come to my office and we can talk about this, and that was how it happened.

Steve: Wow, okay so for every person that you pitched, it was like a very specific personal pitch for everybody?

Sam: One hundred percent.

Steve: Okay, and so once you had the speakers, then I guess selling tickets made it a whole lot easier, right?

Sam: Well, you know starting an event is a really fluid process. It’s kind of like when you’ were a kid, and you go and you want to pull one over on your mom and dad, you go to your mom and say, hey mom can I do this, and she says, if your dad says it’s okay. And then I go to my dad, hey mom says it’s okay, is it okay with you? And then and he’ll say, yeah it’s okay, and then you go to your mom and say, hey it’s okay, he said it’s okay. You know what I mean how you kind of say…

Steve: Yeah, yeah.

Sam: That’s what hosting a conference is like. You basically get like 16 people who you would love to come, and then you pitch each one promising that the other four are going to be there. And then you just go down the list of like promising each one, and then slowly like the previous seven that you pitched finally say yes. So you’re no longer like completely paving, it’s like the truth. And you do this with sponsors as well, you say, hey these people are all in, these speakers are all in, and there’s going to be like 400 people there.

Of course no one has signed up yet, but you just hope that you could pull this all off. So it’s a very fluid process of like three things, speakers, audience, and sponsors. I guess the fourth one is logistics, and you’re doing them all the same time you’re kind of like each one is like halfway there, but everything raises at the same time.

Steve: It’s crazy. Okay so it sounds like once some of the speakers start like agreeing to do it, the rest kind of fall like dominoes at a certain point, it gets easier, right as time goes on?

Sam: Yeah, well we’re always kind of getting in the way also, it’s actually a way better if you spend like — if let’s say you only have four weeks of time to do something, if you can spend three weeks getting the biggest name possible, it’s worth it, because then the next week you can go ahead and get like a bunch of people that are really great people, but they are saying yes because the big person has said yes.

Steve: Okay, that totally makes sense. And then once you have the speaker line up, and then you’re selling tickets kind of at the same time, right?

Sam: Exactly, we’re adding speakers as we’re — and it’s not — the lineup is never set. Sometimes a lot of stuff is sent just like a week out.

Steve: Oh really, that’s crazy.

Sam: Yeah that’s an extreme situation, but it could be, oh yeah I mean it’s happened like two nights before someone has gotten sick and we had to make changes. So yeah it’s changed two nights in advance, but sometimes it can be like yeah sometimes people bail for crazy reasons, or we add people probably last minute.

Steve: So meanwhile to get interest for the conference you’re also getting emails and these are based on articles that you’ve written and shared, right?

Sam: Yeah exactly.

Steve: And then so it’s kind of like a blog in the beginning right, it’s kind of how you got started?

Sam: Yeah I’d been blogging; I had my own personal blog and never did anything. That wasn’t particularly huge, but every once in a while I could get like 60,000 people on one article. But yeah I mean I’ve been a blogger for years, so yeah it’s basically blogging, it’s just in the — people when they hear email I’m like look, think of it this way, your email is your website, and so think of it that way. And so yes it is a blog, but it’s like in an email form.

Steve: Sure, sure. How many times – I’m trying to think, so when you first had those articles, I’m just trying to think how you got to like where you are today like a million in just a little over a year.

Sam: Yeah sure, so we did this conference now, the first time I did it I had 360 people come, the email list started out, I don’t remember the exact number, but let’s say it’s about 200 people that started. By the end of that seven week cycle, I launched the website and then the conference happened seven weeks later and 360 people came. By the end of that cycle, the email list had grown to maybe 2,000 people.

And basically I would write email a week, and that email I would then post that e-mail on the blog, and then I would share the blog on Reddit and places that would get more traffic, and then more people would sign up, they’d fill up the cycle. So that was kind of how it worked, it’s quite simple.

Steve: Can we talk a little about that, so how do you share your own content on Reddit without getting like creamed?

Sam: Well, because I’m like the biggest Reddit nerd on earth. So like only like 10% of my content that I post on Reddit was actually mine. The other 90% was just me being a community member of lots of sub Reddits. So it wasn’t really like I don’t like break any rules.

Steve: I see, so you’d already been established on Reddit?

Sam: Well I wouldn’t say the word establish, I don’t know if that’s the most accurate word, but I was a user and I was like I was a community member, and I was a participant , I wasn’t just a regular, I participated. So I wasn’t quite established, but I was just like a user. And then same with Hacker News, I was a user, I commented, people didn’t know my handle or anything, but I would like comment on stuff and ask questions and submit stuff. So it wasn’t like I was a spammer, I was not a spammer.

Steve: Okay right.

Sam: And I could post up on there, and every once in a while it would get one or two thousand views. Sometimes I could get a million views if I got to the front page which has happened maybe five or six times. But yeah that’s kind of, that was like the cycle. And then I would also have these two to a thousand people or so a day getting my email and they would help share as well.

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How does it work on Reddit actually, just I’m sure some of listeners are very curious, and in terms of getting traffic? So you share other people’s stories and then maybe one out of ten times you’ll post something to your own website?

Sam: Yeah, so Reddit is like an interesting beast. Reddit is, if you get Reddit on your side, you’re a god. If you don’t you’re going to be ashamed and it’s going to destroy you, so like it’s very volatile. So basically Reddit, you just have to understand the personalities of each sub Reddit, and then create content sometimes if you want to go big on Reddit, create content that that particular sub Reddit would really like. But before you do any of that, you have to participate, and at times — so basically the rules sometimes for a lot people it’s like one out of ten things that you post can be self promoting.

Steve: Okay, so were you just sharing other people’s posts then in the beginning?

Sam: Yeah or obvious I guess the question like if I’m in like, I like to follow male fashion, that’s a sub Reddit that I love, male fashion, and I’ll post like, hey does anyone have any used like this brand jeans for sale? I live in San Francisco and I’m interested. Or my boosted board, [inaudible 00:19:44] board, the remote control broke and so I was asking questions on how to fix the remote control. Things like that.

Steve: What about an entrepreneurship example?

Sam: Yeah I mean I would post in the tech news, the tech news section any time like Travis Kalanick like get some crazy stupid stuff, I would always be the first to post that in the tech news section, or in the our entrepreneur. Those entrepreneur ones I really get spammed at times, you have to be particularly — they have a particularly high bullshit detector. So to circumvent that, you have to just don’t bullshit. So I would write comments about people who I found to be inspiring, and I would write stories about why I felt that, but I won’t actually link to anything, and that would slowly build up.

Steve: I see okay.

Sam: I would do it as a hobby, yeah.

Steve: So essentially writing like a little post within Reddit so to speak?

Sam: Exactly.

Steve: Okay, and then what about Hacker News?

Sam: Hacker News, you just have to understand their audience which is young nerds, and I would post lots of press anomic articles on there because press anomic articles are awesome, and I knew that Hacker News loved it, and that one got me my initial color, my initial [inaudible 00:21:02].

Steve: And then have you kind of established like a little group where you can easily get votes for your posts that you post on there, or did everything just kind of happen organically?

Sam: I would never have done that, no. Those just get — I used to be into that type of stuff, but since you know I just I wouldn’t do that because I just would rather do things organically because I think that you’ll have — in the long term, it just pays high dividends. You know I don’t know do those things actually work?

Steve: They do for a while as long as you don’t do it all the time, but after a while like Reddit for example though easily figure that out after a while.

Sam: Yeah so I just like whenever you know — yeah I just never really want to mess with that.

Steve: Okay, so you focused on Reddit and Hacker News, and then every now and then you’d hit the jackpot and drive a bunch of people to your site, and then you’d get a ton of email subs during that period, right?

Sam: Yeah although that’s not like particularly the biggest way that helped us get to where we are. So what happened was I did the first conference in 2014, and it was a pretty good success. The second conference got beat, because I did the first conference, and I thought, oh I did not expect that to be big, 360 people came and it made a whole lot of profit. And I took about six months off and drove my motorcycle around the country is what I did. I just kind of reflected and did a lot of soul searching.

And then I was like, okay let’s try this one more time to see if this actually has legs. And so we did. We did the conference again, and 80 days later it was four times bigger than the last one and we used the same tactics. And at this point the email list grew to be about 8,000 people. And so it wasn’t terribly big, and after that second conference, we realized the reason people liked our events was because of the content that we were sharing. So like during this time I’d read Ted Turner’s biography, the guy who started CNN.

And I got really interested in like these huge massive media conglomerates like Time Warner or Fox Interactive or News Corps, and I was like these companies are like super cool because they have all these like little sub businesses in their company, and that’s not that exciting. But they are their audiences, a lot of their companies are just like dying, they’re really old. Like the average CNN or Fox News age is in the 60s. And I was like fuck it, why can’t we just start the next like huge media empire, and that’s what we wanted to do.

And so in that summer of 2015, we said, let’s try to create a huge media company. And that’s kind of where we started. So the whole thing started with only 10,000 emails, and getting on top of Reddit would drive thousands of emails a day, but the real value happened after we created like hundreds and hundreds of blog posts, and we started covering news and doing news coverage. But the real thing happened in April of 2016 when we decided to switch to email only, and that’s when everything just took off.

Steve: That’s interesting, why would switching to email only cause things to take off?

Sam: Well, a couple reasons. One it’s really noteworthy. So a lot of people told their friends, it’s like kind of weird, like email only media company is like a very strange, it’s unique, it’s noteworthy. And two, when we started emailing people every single day, our open rates actually started increasing a ton, and because we were becoming a hub in people’s daily life, and we began providing a service for them. So in the morning The Hustle was the source of information that they had to make better decisions and be successful and sound intelligent throughout their day.

So our goal was, let’s quickly give them the news they need so they can eat their breakfast and read this, and then go and talk to their coworkers and will sound like they know what they’re talking about. Because that’s kind of a problem is like not being informed, you’re not really part of the conversation too often and you kind of feel up out, or you don’t feel as intelligent, and we were like what if we could solve that? And that’s what the Daily Mail did, and so that’s why it grew.

Steve: I know for myself it’s actually one of the few emails I open because it’s well written, and it provides like all like the latest news. I’m just — what I’m curious about is like once you stopped blogging, it seems like that would hurt things a little bit, right?

Sam: It seems like it yes, but when we first focused on it, it really worked. I mean we did a couple things like we have an ambassador group, and that accounts for a lot of our news [overlapping 00:26:08]. And well basically it’s this, we did four conferences, but basically like if you would share your unique URL with your friends, and some of them bought tickets, you would get a free ticket to the conference.

Steve: I see.

Sam: And so we just hacked that code together, and if a user shares their unique URL, and they get four people sign up, they become an ambassador. If they get 20 people sign up, they get a t-shirt, they get 100, they get a hoodie, things like that. And so that kind of viral looped, it definitely helped us.

Steve: Okay, and so you’re actually sending out physical products for people who share the word about Hustle?

Sam: Yeah, t-shirts, stickers, hoodies, hats, socks, all types of like cool gear. My co-partner, he’s kind of a brand genius, and so whenever — like he’s homemade t-shirts that are so good that people want to buy them, and we just gave up for free.

Steve: Amazing, so how much growth would you attribute to that?

Steve: 20%.

Steve: Really, okay. So once you — when you had the blog, you were still getting subscribers, and I would imagine these posts are getting ranked in Google and they’re driving traffic also, right?

Sam: That’s true yeah, so we still get to this day, I don’t know, you can probably look this up on SEMrush, but roughly 20,000 to 30,000 visitors a day from some of our articles where we wrote like about — when we wrote like some really crazy stuff about like living [overlapping 00:27:36].

Steve: Yeah, I just read, that that was a crazy post.

Sam: Or taking Elsy [ph] and how [inaudible 00:27:41] and how it impacts your work. So that’s up still ranks for a high.

Steve: Whereas — but when you just go straight to email like you lose out on like the extra Google traffic, right?

Sam: Well, we still have that, we still get a lot of traffic from that, but yeah so for this quarter we actually are — we are building ways for our articles. So like basically when we write stories for our daily email, that’s five articles a day at least. We are making it so that actually starts to rank for us.

Steve: Okay, so sorry where we left off we’re at the end of conference two, and you’re at you said 10,000 emails at that point?

Sam: Yeah between ten and 15,000, I don’t remember the exact number, but we can say 10,000 because that’s probably more accurate.

Steve: Okay, and so from there like what was the next step in scaling, like how did you get to your first 100,000?

Sam: Well our first three months doing what we’re doing we wrote some crazy articles, and like in our first three months of business we were averaging probably half a million to a million monthly unique visitors. And it was just me and John writing articles, and we just we knew how to write well, but we also were afraid and we were willing to be extremely controversy off, and that got us to 60,000 people by the time we switched to email which happened nine months later.

So that got us 60,000 people happened in April. So we kept writing these articles, and so by April 2015 we were at 60,000 people, but we’re like this business like it’s not going to be that huge, like creating articles and making money off ad revenue on your site it’s dying. It’s not going to ever be big, or if it is like it’s going to be rare, and we’re not in a position to win. And so we completely pivoted the company on 420 [ph] of 2015 where we said, we’re going all in on email because that way we don’t need that many writers to do stuff.

And our goal is to find a new revenue engine for media companies, and we think that we could do that with email because the economics are so great. And you could sell things to your audience and you can learn from them and build great products and services for them, and then even do even more media. And so that was our goal, and so we launched that on 420.

Steve: We need to talk about how you guys make money. So outside the conference how do you guys generate revenue?

Sam: Yeah, so practically all of our money comes from email advertisements right now. We make a lot of money from conferences, but 90% of it is from email advertisements. But our goal with this company is I believe that advertisements for news can be a meaningful number, tens of millions maybe hundreds of millions of dollars in revenue. But in order to be a massive media business which is definitely our goal, you have to have another source of revenue.

So for example NerdWallet while they don’t do news, they do make hundreds of millions of dollars a year because of the credit card offers or AARP. A lot of people don’t think them as a media company, but they are and they make two or three billion dollars a year from their membership program, and so same with Bloomberg. Bloomberg everyone thinks that they’re a media company, but they make the majority of their money, so like nine billion dollars a year from their Bloomberg terminals. And we looked at some of these companies that do that; we were like that is the way to go.

Media should be basically your news coverage should be content marketing for other products and services in your repertoire. And I think that that’s how our media is going to be in the next ten to 20 years.

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So in terms of your ads that you’re putting in your emails like what is the going rate on pay outs for that?

Sam: It ranges from $20 to $60 CPM.

Steve: Okay, is it for people who open or people who you send to?

Sam: Send.

Steve: Send, okay. And then so up until this point you’ve been advertising other people’s companies and it sounds like your end goal is to use your email list to sell your own products?

Sam: Yeah.

Steve: Okay, and then 90% of your revenue — I was just looking at your email the other day, the advertisement is always at the end, but it doesn’t sound like an advertisement at least if you read it quickly.

Sam: Well, it says that it’s an ad; it definitely says it says it. It says sponsored by, and it’s native. So it’s supposed to read, you know the same writers who write the news write that stuff, write our advertisements. I mean don’t get me wrong, it reads native and that’s what we want it to read.

Steve: Yeah it’s excellent.

Sam: But we also want to make it crystal clear like that that’s paid for which I sleep well knowing that we do. People should know we’re definitely — our product at the moment is our audience, this trust in us and we definitely always want that be crystal clear that this is paid for. But at the same time we don’t work with assholes, and we don’t work with brands that have bad products, so we’re always promoting stuff that we actually like.

Steve: And then so it’s just one advertisement per email right is what it…

Sam: Well, you’ll see two in there sometimes. Yeah sometimes you’ll see two and then also we split the list as well. So you may not see the same advertisement as your wife or your friends who are also on The Hustle.

Steve: I see, so it’s segmented based on what you think people are interested in?

Sam: Exactly. Yeah so on the same day both Microsoft and Sam’s Club can be an advertiser.

Steve: I see. Just curious, did you build your own email management system or are you using something off the shelf?

Sam: Originally we used MailChimp, then we switched to SendGrid. Now we built our own service.

Steve: So you have your own server sending out the emails?

Sam: It built on top of another person’s API, but we’ve built the CMS.

Steve: Okay cool, and then okay so when you went to email only, it sounded like one of the biggest advantages was the fact that you didn’t have to pump out these long five page blog posts anymore, you could just focus everything onto a single email, is that accurate?

Sam: That is accurate. Another advantage that’s as huge as my whole life I always say I want to be a pilot ship, meaning I want people who I enjoy being around to be able to get on our pilot ship, and I want us to be able to do whatever we want. And if you’re building a media company, right now you are beholden to Facebook and Google. And while I don’t mind having them guide parts of my business, a lot of companies like say Upworthy, that’s an older example, but many media companies today fall in that category as well.

They rely 95% of their company on Facebook, and to me that is like the worst thing on earth. And so with email it’s not so much that. I don’t rely on one thing.

Steve: But I guess you could argue that like Google’s promotions tab is a way to affect that business model as well, right?

Sam: That is correct, but not every one of our people has Gmail.

Steve: Sure.

Sam: And of course there’s no perfect platform, we’re always — unless I build my own platform, we’re always going to be a little bit beholden to someone. I’m just trying to hedge my bets and make it so I have the best likelihood to win.

Steve: Yeah, that makes sense. And so by going all email also people are much more likely to open that mail because it’s not like you post the entire library of emails that you’ve ever sent on your site, right?

Sam: You could find them but it’s not…

Steve: It’s not easy to find them, right?

Sam: Yeah that’s right.

Steve: Okay, so that adds like an extra incentive that improves your open rate? Would you mind sharing what your open rate is actually, I’m curious since you have so many emails?

Sam: It ranges, but it’s you know on a low day, it’ll be 40%, on a high day 60%.

Steve: That is crazy okay.

Sam: Yeah, if you do a good job, yeah it’s cool. I mean email is cool.

Steve: Does that — how much of that has to do with the fact that you kind of control your own email and your own IPs and everything as opposed to using a service like MailChimp?

Sam: It went up big time.

Steve: And at what point…

Sam: It’s the product is good.

Steve: Yeah I know the product is excellent, yeah.

Sam: That’s the biggest thing is that it’s a really good product, targeted, and we found a product market fit. We know who likes our ship and we go and find them, but we also make it really easy, like making sure the HTML code in the email is like perfect and will not get flagged by spam, in spam boxes.

Steve: Yeah I know that’s where I was getting to, like a lot of emails don’t even make it to the inbox even, even if it’s good a lot of people miss it.

Sam: Yeah and that’s hard, that’s a challenge. I mean at these big companies, I imagine Amazon has like a 50 person team for email deliverability.

Steve: Actually since we’re talking about that, how do you guys manage that, do you run it through tools like mail tester and before every cent?

Sam: So I am far from being a tech person, we actually have a tech team. So I mean any advice I can — or any feedback to this I can give is going to be strictly high level. But my partner and Wes are our two tech guys, and they — yeah they do use — they have some very expensive tools that tell them the deliverability rate, and they get suggestions on how to improve that. But basically, you can fix the code a little bit, so you want your HTML code to be really clean. When you send, you want to send from your own IP address, and you want to make sure that your own IP address has a really good reputation with Google and Yahoo and things like that.

And there’s like another — it’s basically email deliverability is the same thing as SEO. There’s a whole bunch of best practices to follow, and if you follow best practices, you most likely will be okay. But there’s no like perfect like silver bullet.

Steve: Okay, it seems like your secret sauce is actually the content that you write in your emails. I was wondering if you could talk a little bit about your process for constructing these emails?

Sam: So at first it was just John and I, and we would just go back and forth and we would read what’s going on in the world, and then we would have conversations about what we thought was interesting. But now I don’t have anything to do with the daily process, and John now doesn’t either. We have a team that does it, but the process is actually coming to work, and between eleven and noon, between that when they come in and two or three, they’re reading the news, and they’re learning what’s going on in the world.

And then like three to five, they’ll get in a little room and they just shoot the shit, it almost feels like a Saturday Night Live like writing room where they just like make jokes and they talk about what’s going on in the world and what’s important. And then from like five to like eight, they’re cranking, they’re writing drafts and then throughout the night, like sometimes as late as 3am, they’re editing and fixing and looking at anything new that’s going on in the world, and they’re trying to perfect it, and proofread it, and then they get up early.

Right now we’ve got in New York now, so they don’t have to get up as early, who sends the email at like 8:30, 8:45, and then they come to work and do it again.

Steve: That’s crazy. So does each person, are they responsible for like one day of the week because to do this over and over on a daily basis sounds pretty intensive?

Sam: It is intensive, but that’s the type of people they are, yeah.

Steve: Okay.

Sam: Each person contributes like 30%.

Steve: So okay, so we’re running a little bit short on time here, and we kind of left off at like one 100K emails. Growing from 100 — like where would you say are the inflection points in email growth that you experienced?

Sam: Yeah, so like getting the 30,000 was a big deal for us. And then from 30,000 to 100,000 was a big deal.

Steve: What did you do differently in each of those inflection points?

Sam: You know like not much. What happened was like it’s just consistency really, like you know our mutual friend Nebol [ph] kind of pointed this out to me. He’s like — because he comes to our office, he’s like, I see you guys doing this, I’ve seen you like each quarter and you’re not doing anything different, but the thing is, is that you’ve been in this office, this little crappy office, we’re in a much bigger and nice office, but at the time it was a small apartment.

He’s like you’ve been in this office and you’re just doing this shit every single day, and that catches on eventually. And I think that’s what happens, it’s extremely unsexy, but you know do the same job like what we’re doing every day for like 18 months and if you’re doing a pretty good job, you’ll see results.

Steve: Okay.

Sam: It just takes a ton of turn.

Steve: The reason why I asked that question is because sometimes as you get bigger, so going from getting to a million for example which is where you’re going to hit later on this year, like the same tactics that you used percentage wise might not yield the same gains. So that’s why I was just kind of curious if you’ve instituted new tactics over the years to kind of boost the growth or scale it?

Sam: Well, so in the beginning when we started, we did a lot of scammy stuff like some giveaways we would do, or we would have like a Reddit voting ring, and that stuff like gave us like a little like bumps, but like bumps in traffic. But really the stuff that’s been the biggest evidence, we’re just doing the really like the right thing, and doing it over and over and over again. So just like not like — I think the problem with a lot of people in our world and all my internet marketing friends is they’re always looking for short term gains.

But really focusing on like, okay we may like suck like for the next like month, but if we like with time and create these articles are going to give us good search traffic now, then will be paying huge dividends in like a year. And doing stuff like that has added up.

Steve: Let me ask you this Sam, if you were to start this thing all over again, would you do anything differently than the way you proceeded now?

Sam: No.

Steve: So you’d start with the conference to build that initial pool, would the conference be like the integral part of this still?

Sam: Yeah, our conference — like in order to do what we need to do or what we want to do, we don’t make money right away. Like with media once you have a huge audience, then the money just pours in. But to get there you have to be poor for a little while and so the conferences were our cash cow that allowed us not to be able to — like we’re going to need to raise a lot of money.

But what I’m hoping is that our conferences, the profits from our conferences will subsidize the amount of money that we need to raise, and give us a better valuation and allow and keep us majority owned by ourselves and our employees. So yeah I would do everything the same way. I will make the conferences much bigger.

Steve: So the conference allows you to bootstrap The Hustle essentially is what you’re saying?

Sam: Exactly. We have since raised 1.3 million dollars, but I wouldn’t really even say we needed that, but it makes us grow faster.

Steve: Based on our earlier conversations it sounded like you got some of that early investment as kind of like a strategic move to get access to some of these big profile people, right?

Sam: Yeah so like the founders of Bleacher Report, the founders of [inaudible 00:44:47], Tim Ferriss, Ramit Sethi, these are some of our investors and some of our friends, and we have access not only — I would normally pay for their advice, but it went the other way round. Locally we’re going to pay them a lot more for everything, so it worked out, but yeah so now we have these guys on our team.

Steve: That’s ingenious. And so going forward we kind of talked about you introducing your own products, care to share any of the things that you have in mind going forward?

Sam: Yeah, so we aren’t revealing anything big yet, but we’re not publicly talking about it yet. But I will say this, we have this massive audience of people who all have similar tastes, and buy similar things. And I think that it would be really powerful if we could leverage on group buying power to get really cool deals and discounts on shit that we’re all buying, that everyone buys.

So we’ll definitely — that idea to me is really interesting because it’s very powerful, because if you get 30 or 40 million members of an infinity group, you could I bet you can change the law. I mean you know what I mean like you can change policy. And I think that’s really exciting for me, and that’s something that we’re interested in.

Steve: That’s cool. Hey Sam, I want to be respectful of your time, where can people find more about you and your company?

Sam: Well, if they want to find out more about the company, they can just search The Hustle and hopefully it will be the first thing that they come up. And if they search The Hustle they’ll also find cool articles about how we started and things like that. Me personally, I’m on Twitter @theSamParr, and my email is very easy to find, so you can always shoot me an email as well.

Steve: Cool Sam; well really appreciate you coming on the show. I learned a lot and your story is just crazy.

Sam: Well, hopefully it’s just the first ending.

Steve: Cool man, take care Sam.

Sam: All right, see you man.

Steve: Hope you enjoyed that episode. I actually had the opportunity to meet Sam in person at his last conference, and he’s one of the most ambitious people that I’ve ever met. For more from information about this episode, go to mywifequitherjob.com/episode183.

And once again I want to thank Seller Labs. Their tool Scope has completely changed the way I choose keywords for both my Amazon listings and my Amazon advertising campaigns. Instead of making random guesses, Scope tells me exactly which keywords are generating sales, and within the first week of use I saw a 39% increase in sales. It is a no brainer. So head on over to Sellerlabs.com/wife and receive $50 off. Once again that’s sellerlabs.com/wife.

I also want to thank Klaviyo which is my email marketing platform of choice for ecommerce 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 auto pilot. So head on over to mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

Now, I talk about how I use all 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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182: How To Make Millions Selling Clothing Online Using Facebook Live With Tiffany Ivanofsky

How To Make Millions Selling Clothing Online Using Facebook Live With Tiffany Ivanofsky

Today I’m really happy to have Tiffany Ivanofsky on the show. Tiffany is someone who I was introduced to by Toni Anderson and she is making millions of dollars selling LuLaRoe clothing.

But here’s the kicker. She sells all of her inventory using Facebook Live. In fact, I’ve watched her and her husband Paul live and the way they sell is mesmerizing.

Anyway, today we are going to break down how they manage to sell so many pieces of clothing live on Facebook and learn about their strategies.

What You’ll Learn

  • How selling LuLaRoe products work.
  • How Tiffany came up with the idea of selling on Facebook live.
  • How she created a crazy Facebook following.
  • How her sales tactics can be applied to other products online.

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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Ignite.Sellerlabs.com – If you are selling on Amazon and running Amazon Sponsored Ads campaigns, then Ignite from Seller Labs is a must have tool. Click here and get a FREE 30 Day Trial.
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Kabbage.com – If you run a physical products based business, sometimes you need a short term loan to buy inventory to meet demand, especially during the holiday season. Kabbage helps small business owners access simple and flexible funding right away. Click here and get a $50 Visa gift card upon signup.
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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 delve deeply into what strategies are working and what strategies are not. Now today’s podcast guest has an amazing story to tell. Tiffany Ivanofsky sells millions of dollars worth of merchandise broadcasting live on Facebook. So think of it like a QVC except on the Facebook platform. Anyway it’s a fascinating way to sell online, and today we’re going to learn exactly how she does it.

But before we begin I want to give a quick shout out to Seller Labs for sponsoring this episode, and specifically I want to talk about their awesome Amazon tool, Scope. Now I’m really excited about Scope because it’s a tool that actually increased my Amazon sales on several listings by 39% within the first week of use, crazy, right?

Now what does this tool do that could possibly boost my sales so quickly? Well, quite simply, Scope tells you what keywords are driving sales on Amazon. So here is what I did. I searched Amazon and found the bestselling product listings in my niche, then I used Scope to tell me exactly what keywords that bestselling listing was using to generate sales. I added these keywords to my Amazon listings, and my sales picked up immediately.

So today I use Scope for all my Amazon products to find high converting keywords in the back end as well as for my Amazon advertising campaigns. So in short, Scope can boost your Amazon sales almost immediately like they did for me, and 39% is nothing to sneeze at. Right now if you go to Sellerlabs.com/wife, you can check out Scope for free, and if you decide to sign up, you’ll get $50 off any plan. Once again that’s Sellerlabs.com/wife.

Now, I also want to give a shout out to Klaviyo who also is a sponsor of the show. And I’m always excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not another provider. Well, 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 out an email out to everyone who purchased a certain colored 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.

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. 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 really happy to have Tiffany Ivanofsky on the show. Now Tiffany is actually someone who I was introduced to by Toni Anderson, and she’s actually making millions of dollars selling LulaRoe clothing, but here is the kicker. She actually sells all of her inventory using Facebook Live. And in fact I’ve watched her and her husband Paul live on Facebook, and the way they sell is actually really amazing, and it’s actually mesmerizing.

And today what we’re going to do is we’re going to break down how they managed to sell so many pieces of clothing live on Facebook, and kind of learn about their strategies which I believe can be applied to actually any e-commerce business or any situation where you have to have to make sales. And with that, welcome to the show Tiffany, how are you doing today?

Tiffany: I’m doing so great, thank you so much for having me on here today.

Steve: Really happy to have you Tiffany and I just think what you’re doing is amazing, and I hope to learn a lot about your sales strategies. So first of all, let’s talk about how you got into selling LulaRoe. I know that you are into extreme couponing, you’ve been on like to Today show and TLC. How did that kind of transition over to LulaRoe?

Tiffany: You know it was actually a little bit of an accident. I have a couple of VAs that work on my site for me, and my husband and I had experienced a great loss like two years ago, and one of my VAs was actually concerned about me. And for Valentine’s Day She was trying to cheer me up, and she sent me some leggings for myself and my children, and I got them and I couldn’t understand why they didn’t match, and why I couldn’t get matching leggings.

And I went completely obsessed with trying to find these matching leggings. If you know anything about LulaRoe, nothing matches, and it’s hard to find coupons anything, and so I was obsessed with trying to figure out why I could not just order these online. And that kind of led to looking at this business and trying to figure it out, and then really looking even past the clothing part of it to see this incredible business opportunity that I felt like people were not realizing the value in it. And I within — I couldn’t think about anything else for 24 hours a day.

And I just decided to sign up and I said the same thing to my husband. And I just, I put my paperwork in, and you actually have a little bit of a wait. And so I had a three month wait before I could even do anything. But it just, it really kind of, I stumbled into it just from a VA. I kind of recognized that business opportunity there that I felt like people were not taking advantage of.

Steve: For all the listeners who might not be familiar with LulaRoe, could you just kind of describe what it is first of all.

Tiffany: Yeah, so LulaRoe is — it’s truly amazing comfortable clothing. They’re all about family, but the thing that is such a draw is that they have very popular prints, and they’re very limited. And so any given pattern, they only make 5,000 of a print, and even in the clothing industry, that’s a little bit unheard of because it’s very expensive to make a limited run like that when they’re producing so much. And so the popularity is when you have a print that you love dearly, and let’s say you need it in a medium and spread out between three different styles, extra small to three XL.

There’s only going to be about 225 of those mediums spread out between 60,000 consultants in the draw as you see that print and you want it, you’ve got to jump on it and grab it like that. And so that’s what makes them popular is the exclusivity and the difficulty sometimes in getting those patterns.

Steve: Are they collector’s items then or no?

Tiffany: Definitely some of them are, and it’s funny they call them unicorns.

Steve: Unicorns, okay.

Tiffany: So you’re always on this – you always hunt for your unicorn.

Steve: Interesting, so this is like I don’t know if this is the correct analogy, but it’s like pokerman for clothing or no?

Tiffany: Yes or Beanie Babies for adults.

Steve: Okay, but people actually wear the clothing too, is that correct?

Tiffany: Oh definitely.

Steve: Okay, so you found out about this opportunity from your VA. So what is actually involved in signing up, and how does like kind of the program work?

Tiffany: So well what you do is you just basically find a sponsor, you submit your paperwork as your interest in joining this company. It doesn’t cost anything to do that. And then you do have a wait in the queue. So at the time I signed up, the wait was about 13 weeks, it’s actually down to about six weeks right now. The benefit is that it’s gives you time to get ready, kind of wrap your brain around this business to prepare how you’re going to sell it, if you’re going to be able to have space to have it displayed, or if you’re going to be able to do this out of rubber maids, however you’re going to have your business set up.

So you wait about six weeks in the queue, and then you’re going to get your phone call from home office, and they welcome you, and that’s when you place your first wholesale order.

Steve: So you have to buy the inventory, it’s not like…

Tiffany: You do, yes and as a blogger, one of the big things that almost kept me from doing this is we’re not used to having the inventory here in your home. And I was actually really concerned about that. I didn’t want to ship everything; I didn’t want to have the inventory in my home. But more than that I wanted to give it a try, and so I was willing to kind of try to figure out what to do with this inventory. And then you place that first wholesale order, you get this inventory delivered…

Steve: I think it’s that first wholesale order; I’m just kind of curious how much they made you buy.

Tiffany: It’s about — there’s three different packages. We always just recommend going with that lowest package, because as soon as you’re off the phone with them, you can turn right back around and you can reorder whatever you want. So you get that package. That first one is about 325 pieces of inventory, and it’s around $5,000.

Steve: Oh, wow, okay so the upfront investment is fairly significant?

Tiffany: It is yes, and I’m okay with that. I actually sometimes wish it was a little bit more because you really need that amount of inventory to have a good variety for people.

Steve: Do you get to pick out, like you have to go through and pick out all the stuff you want, or how does that work?

Tiffany: The crazy part is, and this is the other crazy part is that you can pick your styles and sizes. They have about 39 different styles, and so you can pick from a range of that. We suggest going with probably the six to eight most popular in the beginning, and then going actually deep in the sizes. So instead of just having three in every size, if you have ten, you’ve got more variety for your customers. So we suggest about eight styles to begin with, ten of every size in the kind of building your inventory like that.

So now you’re allowed to choose your styles and sizes, you can’t ever choose your patterns, which is really interesting. So when you get that box, every time it’s kind of like Christmas, like you’re opening it up, you have no idea what you’re getting.

Steve: That is crazy, so how do you know that when you’re buying this kit, whether it’s going to sell or not?

Tiffany: Do you know and the wild part of this and you’re going to hear this from everybody is everything sells, which is amazing. And I didn’t — at first I thought what am I going to do? And I would open a box and I would pull out a shirt, and I would be like, oh what I’m supposed to do with this? And then the funny part is, is that was the first item that would sell. And so I think what it does teach you is not to prejudge your inventory, and not to just assume that you know what everybody else likes.

And that can be a little bit of a hard lesson to learn, but you realize pretty quickly the things that you think are going to sit there and not sell, and someone walks in and they’re like, oh my gosh, that’s my unicorn, I love that, I have to have it. And you’re like oh, okay then, I wasn’t expecting that. But it really teaches you to kind of have this broad; just an open mind when you’re giving everything that somebody loves it.

Steve: What about deciding on like sizing in the beginning, like how do you know what size your target customer is going to be?

Tiffany: You know I think you have to guess a little bit. Some of it is a little bit of a trial and error. I knew — I took a kind of a stab in the dark, and I decided that I wear about a size ten, and sometimes I don’t like going into the store to try stuff on, because you’re uncomfortable, you don’t want to go in a dressing room. But I noticed that my friends that were maybe plus sized, they really shop online at home. They don’t want to go in and try stuff on as much, they don’t feel comfortable doing that, and they kind of like the privacy of shopping at home.

And so I kind of took a guess that I felt like some of those bigger sizes might sell a little better. And for us in our group they have, we sell I would say about 60% is large and above, and about 40% would be under. We carry everything; we carry every size just because I don’t want my customer to feel like we don’t have something for them. But the girls that have really focused on a niche, of course they’ve built this great community around that. Some just focus on large and above, and some just focus on smaller sizes.

And so I think when you find your niche, or if you go in knowing what your niche is, I mean you kind of cater towards a little bit towards that niche, I feel like you’re always a little bit more successful.

Steve: Okay so going in, you kind of made a guess about who your target customer was going to be, and then you kind of skewed your sizes accordingly to the larger sizes?

Tiffany: I did and really just kind of when I knew that — I knew in the beginning I would have to some trial and error. Some people might have a better idea, but I just I wasn’t sure where I was going to go. And I took one poll in my Facebook group to find out. I thought I better do that. I mean it was kind of all over the place, I don’t feel like I got a very good, I mean got a real good answer from that. But we just started watching what we were selling, and we just went from there.

Steve: Okay, so let’s now back up and kind of start from the beginning. So you have this initial set of inventory, and you primarily sell on Facebook. So this Facebook group I presume started from zero members, is that correct?

Tiffany: It did in August last — I’m sorry, April last year, zero members, opened it up, and just started.

Steve: That’s great; it’s millions of dollars in just a little over a year which is really crazy. So you talk about how you started that targeted Facebook group, like what was going on through your head? How did you know what type of people to attract?

Tiffany: Steve I wish that there was — I wish I had something crazy to tell you, but I opened it up, I invited a couple of close friends, my mom and my sisters, and I…

Steve: What is the group called first of all actually so people can look at it?

Tiffany: Oh sorry?

Steve: Can you just tell me what the group is called.

Tiffany: It’s actually Emma Lou’s LulaRoe Boutique.

Steve: Okay, I’ll link that up in the show notes.

Tiffany: And I invited them to come on in. I started posting pictures of myself in the clothing, and I wasn’t even really advertising the clothing. I was just posting a picture of me every day wearing one of the pieces of clothing, or just asking, do you think I should wear these shoes or these shoes with this skirt? I mean I just was getting interaction and people were interested, and then every now and then they would ask what I was wearing, and I would tell them.

But the focus in the beginning wasn’t — I wasn’t trying to sell them anything, I was just kind of posting about what I had found, and I didn’t know much even about it. And I was asking a lot of questions and posting pictures, and still talking about our family and just things that are personal to me and people just were interested, and they just were joining my group and joining my group. In the beginning…

Steve: Were these friends or were these random people?

Tiffany: Well, originally it was friends, and then they were inviting their friends and their friends and their friends. I did one giveaway in the beginning with a crazy cool pair of leggings, and told people to add friends. Again a lot of people do a lot of giveaways, I wouldn’t suggest that because you get a lot of extra in your group that don’t really want to be there, and it doesn’t help you.

But I only did that one kind of giveaway in the beginning, and people just — they were just joining. They were interested in it and they were interested in posting pictures of themselves in the clothing, and I just kind of left that open for them to ask questions, post pictures of themselves. I would continue to post my pictures, and it just was growing from there.

Steve: So can we break it down like how often were you posting in the beginning?

Tiffany: I was posting probably about — I would do a post in the morning what I was wearing that day, I would comment on any, reply to everybody, and then I’d probably post something later in the day. I’d post a minimal recipe or just something interesting and following up. I was at least posting twice a day.

Steve: So would it be fair to say that your customers are like you in terms of demographic?

Steve: They are one 100% yes. They’re probably — mostly around the same age, stay at home moms, work at home, we do have a lot of teachers, nurses, yeah they definitely are.

Steve: Okay, and then you are in love with the clothing and it kind of shows through in the photos that you were posting, and then your friends kind of still recommending their friends because they’re all into the same clothing, is that correct?

Tiffany: Correct, yes.

Steve: And so you were posting it sounds like what, three times a day?

Tiffany: I would say so yes.

Steve: And this is just you posting, it’s not any software, it’s just you coming up with content and posting on your Facebook page?

Tiffany: One hundred percent and I have other Facebook pages I’ve done where I’ve scheduled stuff out, and it was very planned and thought out. This was extremely organic, and just — I had seen someone at a park wearing something LulaRoe, I took a picture, I asked her, took a picture of her and I was talking about it, got 500 people commenting on that. It was very, very organic compared to a lot of other stuff that I’ve done.

Steve: Interesting, so at what point did you start selling?

Tiffany: Well, this is interesting, so typically my personality, I love to plan everything out and write lists for my lists, and I had this great amazing business plan all written out. And I had followed some of the big top who I thought were the top people in this company, and watched what they were doing, and I had this strategy of how I was going to sell this clothing once I got here. At the time I was traveling about three weeks out of every month with my job. I was teaching coupon classes all across the country for newspapers, and I was really tired of traveling, and I knew that when my inventory would come I would be gone.

My husband had just — I had just kind of passingly mentioned that this inventory was coming. One day I had just left to go out of town and my inventory showed up. Facebook Live was really new, I think we had even just gotten the ability to do it on that page for that group, and I asked him I said, hey my inventory is scheduled to come today, and I was looking at it. I said when it gets there, is there any way I could get you just to open it up and live, and just show me what it was, because I want to see it, I was so excited.

I was teaching classes, and I got home to my hotel room that night about ten thirty. I open my computer and went to my group to find out that my husband had been on live for almost six hours with my son’s girlfriend, and they had sold almost all of my initial inventory. I was…

Steve: Okay, can we break this down, because okay so what’s funny, and this is for the listeners, what’s funny is that her husband, Tiffany’s husband Paul actually does most of the selling, wouldn’t you say?

Tiffany: Yes, yes he does.

Steve: And he does a fantastic job. So can you kind of break down what he did on that first Facebook Live, and how many people were actually watching first of all?

Tiffany: Oh my goodness, I actually I don’t know how many were, because I wasn’t on the whole time. I’m guessing he probably had 50 to one 100 people, maybe even a little more. He had no idea what he was doing, he didn’t know the names of anything, I had just days before told him that I was even doing this. And he has a very outgoing friendly personality, and he just thought the whole thing was funny, and all these boxes show up at the door.

And my son’s girlfriend knew what it was, but didn’t know a whole lot about it, and she happened to be there, and they start opening these boxes, and they were showing people this clothing, and people were saying, well when can we buy it. And my husband kept saying, well, when Tiffany gets back, and they were like, why can’t we buy it right now. And he’s like; well she wants to sell it, why not? So they start selling it, and they didn’t know the prices, people would say how much is it, they would say, oh I don’t know. But my husband would be like, it sure is pretty.

People are saying, I want it, so they’re trying to write names down, it was crazy. And I mean it was just it’s so funny to go back and watch some of those videos, I mean it was just, it was so organic I think, and just so interesting and so probably just hilarious to people, that they just, I think they fell in love.

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So it’s like an unboxing video, right? Is that how you would best describe it?

Tiffany: If you could in any way describe it, I would call it that.

Steve: Okay, because I’ve watched some of your latest videos, and it seems — Paul is awesome by the way, but if we can go back to that first video when he didn’t know what he was doing, can you kind of just describe like why it worked, or like what exactly he was doing that actually triggered all of these sales, or is it just — let me rephrase that question. Is it is it because like the product is just so popular that it sells itself, or do you think it was Paul in that first video?

Tiffany: I think it was Paul. I think it was that my customers originally a lot of them didn’t really know much about LulaRoe, and as he was pulling stuff out of the box, I think it’s a combination of thinking it’s very interesting to purchase something like that online that way, almost like a life QVC where you’re interacting. And then the fact that I think there was probably some, what is this guy doing? And like just maybe even some of them, this guy is hilarious, like he has no clue what’s going on here.

And we tease him every now and then, we’re like, well how many people felt bad for you, but he was I think just so genuinely trying to help these women find what their size was, and find something that they liked that I think that they kind of took that to heart. It was almost endearing that they thought, here is this guy trying to help me decide what to wear. I think it was just so different that they were just like, I’ll take it, I’ll give it a try. And so I think that that’s why it worked.

Steve: I guess for anyone who’s listening, you guys have to just watch Paul in action. He’s actually really polished now; I was just kind of curious what happened that first day. You said he was on for six hours?

Tiffany: He was, and back then you could only go what, like 45 minutes I think on live, maybe half an hour or 45 minutes to maybe an hour. So they were just restarting video after video when it would cut him off. I mean they knew nothing about Facebook Live, I mean they didn’t know it would even cut them off. None of it, I mean we really didn’t know anything about it. And they were trying to figure out just how to record the information, figure out who actually got what, how to sell it. I mean just how somebody can claim it; it was crazy just trying to figure out that process.

Steve: So let’s talk about how you guys do it now, because it’s a lot more polished now, and you guys have your routines down. So can you just kind of walk through how you are able to move some of the sizes and the styles that aren’t that popular?

Tiffany: Yeah, so I think what is key, and this is as much as we have this online businesses, online community, a lot of what has built that is we still do have open houses, and we’ll let people come try things on. There’s always going to be people who will buy something online, and there’s always those customers that won’t purchase it online until they can try it on or feel it or touch it. And so we do let them come in, try stuff on, we’ll have open houses, let them feel comfortable doing that.

But in doing those open houses, I feel like myself and Paul have really gotten a grasp on how this clothing fits women. And beyond that, I think it just — and how it can make them feel good and make them feel confident, and make them feel beautiful. And so I feel like we try to make sure that that comes across, and comes across as genuine, that we want them to feel good about what they’re wearing. And so when Paul’s on, I mean he really pays attention to what they’re saying to him, even typing out what they’re typing to him. Is this woman tall or does she have broad shoulders? Maybe has she had some kids, is she trying to hide that weight in her stomach? What is going to fit her body the best?

And I think for a lot of people I think it’s very interesting that a guy can pick up on that with just the things that you type out, not even seeing you in person. But that he’s telling you, try it, give it a try, post your pictures when you’re done, we want to see how this looks on you. And then quite honestly just getting it right, getting it right that this is what they need to be wearing, what style is going to fit on them best? And so as much as it is online, having that in-home experience where we get to know what does fit them is invaluable.

Steve: So are most of your customers kind of local to your house then, or are they like all over the place?

Tiffany: Oh no, they are all over the place, and they are enough that a lot of them have tried stuff on other places which we love with other consultants, and then they kind of come on because our show is very entertaining. And so they come on and I think they get wrapped up in the moment, and they’re like I’ve always wanted to try that, I know what to look at, so I’m going to go ahead and give it a shot, and then I’m going to go ahead and pick that one up.

Steve: Okay, so let’s get to specifics, like what does Paul do, okay so you guys start live, what is the first thing that Paul does?

Tiffany: We give it a second where we’re always talking to them calling them by name. So I think one of the most important things that you can do in a Facebook Live is recognition. You just have to recognize people, sometimes these people get on and it’s been days without someone actually saying their name. And so we make sure that we recognize them, and we’ll remember them. We ask how their kids are, we ask how their job interview was, we remember what sizes they wear. But we welcome them onto the show, we kind of give it a few minutes to get going, we’re playing music or we’re just we’re chatting with them, getting stuff arranged.

And then typically we start with just — it’s a pretty random for us. We don’t necessarily tell them ahead of time what sizes or styles we’re doing; it’s really a free for all. And a lot of that is because Paul doesn’t know, he’s got such ADD and he’s all over the place. A plan for him would just put him under the table. Me I love to make all my outfits ahead of time, have them all in a rack ready to go. Paul just likes to grab stuff from boxes, and just keep everybody guessing as to what he’s going to do next.

Steve: Okay so that implies – so you said a couple of things there. You remember their name, you remember their stories, does that imply that you kind of know all your customers, or do you have some sort of CRM system?

Tiffany: No, we 100% it’s getting to know them, we truly get to know them, we truly try to, which it’s comes back to that basic community. They have a place where people recognize them, other customers get to know other customers, and they develop a friendship. It’s somewhere where they come, they can tell us about the job interview they had, or they did the job interview that we helped them pick something out to wear, they’ll let us know if they got the job and how it’s going, they talk to us about their kids, we find them stuff to wear before they have a baby and after they have a baby.

Steve: Is this up another Facebook page or on the live itself?

Tiffany: It happens in both.

Steve: Okay but they can only text, all right; you guys have a video there only have text?

Tiffany: Correct, and the great new feature where you can call somebody else in or invite them in, in video, we started doing that a lot. And so that is just still another better way that you can even connect with them face to face.

Steve: Okay so in the very beginning like if we back up to his very first time on the Facebook Live, did he already know everyone from the group?

Tiffany: No, he knew nobody.

Steve: He knew nobody okay, so how did he make all those sales that first time then?

Tiffany: I think that the first time I feel like that they were probably so fascinated about what was happening that it just happened. I think it’s one of those that people are probably going, can you believe this guy on here is trying to sell his wife’s LulaRoe stuff. But then with people asking to buy it, and I think everyone was just getting caught up in this moment of never having seen this before that they were just so interested, and they just wanted to purchase stuff.

Steve: Okay, was he wearing — he doesn’t wear LulaRoe, does he? Do you have a male line?

Tiffany: They have a couple male shirts, he will for fun and you know what, he kind of developed his own brand where he wears like a different unicorn shirt every night. So he’s got hundreds of unicorn shirts, but I mean it’s just you kind of develop your own thing.

Steve: Okay, so how does the ordering work on Facebook Live, like how do you guys take orders?

Tiffany: Well, so what happens is he holds something up; we give it a number so that we know what people are actually claiming. They comment and they put the number on there. That lets us know they’ve got that item. Once they have that item, we put the number and put it in a box, we’ve got a Google doc that we’re keeping live as it goes, we’re recording people get what. And then we go to our system that we have through LulaRoe, and we invoice them through their email.

Steve: So what happens if you hold someone something up and like 20 people want it, does it go to the first person or?

Tiffany: A lot of times it’s the first person, but then we do try to take in account that some people have faster internet, we can get nights where the same person can almost claim everything because they’re on super fast some kind of crazy internet. And so a lot of times we’ll do even what we call radio style, where we say, okay we’re going to take the fifth person that types in a number — and they type in these numbers, and so we’ll go more count off which I mean it gives people such anxiety.

It’s actually kind of fun, because they are just sitting there going, I don’t know where my name is going to show up in this, but we count off five and we yell out the fifth person’s name and they’re the ones that get it.

Steve: Okay, all right, this is just crazy to me because I can’t even imagine the audience that would be in suspense over shopping for clothing online. So maybe what would help me a little bit is like if you could help me understand the target demographic, and how you kind of – it sounds like you just naturally created this fanatical fan base through your page, and then live is just like a medium with which you ell, right?

Tiffany: Yes, and that’s probably just a very — you say it very eloquently, that’s what it is. And the other part of it, I tease and I joke about it to my our customers and stuff, I’m like, I think there a lot of gamblers on here. But I think people more than anything they want to be entertained, we’re not just selling something to them, they’re there to be entertained and they’re there for a break, or they’re there because they know that somebody will recognize them.

We have a lot of military wives who come on because they’re just alone at night, and it’s hard to go to bed with no noise, and sometimes they just want to hear a voice. We get it is just — it’s really kind of fascinating. So a lot of it is also just curiosity, and it’s a different way to shop, it’s something new, it’s something that they can do from home. You can be anywhere and just there’s a live video, and you can start watching. If you see something you like, you can purchase it. I think it’s just different, I think it’s exciting, I think it’s entertaining.

Steve: It’s almost like an interactive infomercial?

Tiffany: Yes, that’s a great way to describe it.

Steve: Okay, and then — okay so let’s work to – sorry, it’s really hard to describe this to listeners without watching. So I’m actually going to probably post one underneath the video just to see Paul in action, because he’s actually really good. So he gets on, he starts talking to people, saying people by name, asking them questions that are pretty personal about how they are, the fact that he shows that he knows who they are, and then what does he do next? Does he just start holding up clothing?

Tiffany: Correct, sometimes we’ll get a new box, almost say, oh my goodness, this is what came today, let’s open it up. We’ll open it, start pulling clothing out of bags and holding it up, telling him the size and style, letting him know how much it is, giving him an idea of what size it would fit.

Steve: How does that work, like how can you tell what a person looks like?

Tiffany: Well somebody types in, I’m 5’1, I’ve got really broad shoulders, it gives us an idea, okay maybe this longer waisted dress is not going to look good on them, maybe they need a shorter waist. Or if they’ll say, we get a lot — I mean it’s so funny, Paul will joke all the time, I have more women telling me their bra size. They’ll come on and they’ll say, I wear, this, this and this, and you’ll know right away, okay that dress, they’re not going to feel comfortable in that, it’s too tight across the chest.

And so I think it’s getting to know the clothing well enough that you can guess what it’s going to look like on them, and try to help steer them in that direction because they are buying clothing that a lot of them have not tried on. And so you want to get it right, I mean we take clothing back, we have a return policy, we’ll exchange things for them, but we don’t want to have to do too much of that. So we try to get it right the first time.

Steve: What’s funny about this is there’s like 300 or 400 people on watching you guys at any given time, like are you giving like one-on-one service on this live?

Tiffany: We don’t as much. Some nights we will, and like you said, no sometimes that traffic will drop; it gives us a little time to come on and be more personal with each individual person. We also, something that we do that’s not live is I will come on and I will take some personal styling requests, I will go make them outfits, and then I will take a picture and post it to the wall in my group, and say, this outfit was made for and give their name, and then let them have the opportunity to say, I want that or I don’t, and then pass it to the next person.

Steve: Okay, sorry I keep interrupting. So you get up and you have whole articles of clothing up, sometimes you get through with some of the people and get their sizing. And then what, is it just like that for like two or three hours?

Tiffany: It is, it totally is, but you have to be smart about it. If you can see that people aren’t interested in something, that style is just not what’s clicking with them that night, we will quickly change to something else. So we can tell that tonight, those smalls and those extra smalls, people are snapping those up, we will change and go and pull those sizes specifically. So we do try to pay attention to what’s going on, and try to kind of in a way I’ll say cater to that, because we don’t necessarily take requests individually.

If you can imagine if you had 400 women on all requesting you to show them something at the same time, you’re not going to please anybody. And so instead of doing it that way and making 399 people unhappy, we kind of just show everything and let everybody have the chance to — there’s going to be something for them.

Steve: Okay so what do you do about like stuff you can’t sell?

Tiffany: So far I’m going to tell you so far we have not had something that we can’t sell. Something will stay a little bit longer, a lot of consultants have a strategy too to where if you’ve got something that stay a little while, we’ll style it a different way, we’ll show it worn a different way, we’ll put it with another piece to show them how they can actually wear it, and then if it comes down to where you really feel like my customers just aren’t connecting with this piece or this pattern, within consultants, we’ll swap clothing with each other.

So maybe I’ve had this dress for a while, my customers just aren’t interested in it, I’m in Texas, this pattern is not appealing as much here, but I might trade with another consultant, I might ship it to her, she might ship me something. Or a lot of consultants will get together, and have a swap where they will swap inventory just to freshen things up a little bit.

Steve: Okay, but for the most part like even like your extra small sizes still manage to sell?

Tiffany: They sure do. I mean it’s crazy.

Steve: It’s just crazy to me, sorry it’s still…

Steve: No it’s so different Steve and I think that this is what was so attractive to me in the beginning was it’s something that was so different, and then the way that it was done where you could never choose your style or pattern when you ordered, it was really kind of eye opening that it was a way to keep it exciting and in demand.

Steve: So let me ask you this Tiffany, I mean you’ve had a lot of success selling LulaRoe clothing using this method, do you think that this method could apply to just general e-commerce stores, like if you were to sew like your own widgets, and I know in the past you had thought about starting an ecommerce store, would you go with this strategy, and how would you go about doing it?

Tiffany: You know what Steve I would, and you’re seeing it more and more. When I’m scrolling through my feed, I’m seeing people selling baby blankets online live, I’m seeing people selling makeup, I’m seeing people selling jewelry live now. I 100% just think this is kind of where it’s going in a way. I think that you should be showing everything that you’re selling; I think you should be showing it live, and I think you would be surprised at how many people would say, can I purchase that when you weren’t even intending to sell it.

Steve: Okay, so let’s say I — so we actually do have this older demographic that really are into handkerchiefs. So let’s say that I want to be going on Facebook Live heaven forbid, and I want to try selling these, like what — if you can give me some tips on how to actually hold this live, that’ll be great, like what are some must have things that I should be doing?

Tiffany: Okay so first I think if you have a little bit of an older demographic and you’re a man and you’re selling handkerchiefs, I think they’re going to fall in love with you. And I really do, I think they’re going to just think, how does this guy know his stuff, and he’s explaining these handkerchiefs, and he is using terminology that he clearly knows what he’s talking about. They’re going to be confident in you, and part of this is falling in love with you, especially because with video you’re making such a connection that you don’t make when you’re buying just in an online store with no visual of who is selling it to you.

And I feel like in a market where a lot of things are a little bit saturated, or they can get a handkerchief anywhere, I mean I know yours are unique, but I mean if you can get that stuff in a lot of different places, why do I want to buy from Steve? If I see Steve on video and I see his personality and I fall in love with his family, and I think he’s adorable, I will buy from him before I will buy from anybody else, and I will be loyal to that.

I think if you were to do something like that, I think it’s fun, just a cool set up, good lighting, knowing what you’re talking about, and just a lot of different samples and things for them to purchase, and then an easy way for them to be able to purchase it is really interesting.

Steve: I just want to take a moment to tell you about a free resource that I offer on my website that you may not be aware of. If you’re interested in starting your own online store, I put together a comprehensive six-day mini course on how to get started in e-commerce that you should all check out. It contains both video and text based tutorials that go over the entire process of finding products to sell all the way to getting your first sales online.

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Actually that’s a good point because come to think of it, my mom is on QVC all the time, and she buys stuff like every day. It is this infomercial site, except you’re taking it one step further, and you actually know the customers on a personal level. Can we talk a little bit about some of the things that Paul does in particular that some of your customers like about his personally, or some quirky things that he does on a live video?

Tiffany: It’s a lot of quirky things Steve. I think that they love — it’s very interesting, and I found this is in the blogging world as well. As a female blogger in coupons, what I could get away with as compared to what — so now Paul’s a blogger as well about coupons, he has a different site than I do, what Paul can get away with is a lot different than me. So if I did something wrong I would have a lot of hate mail and people coming at me. If Paul does something wrong, it’s more, hey Paul sweetie, I’m not sure if you realized. They’re very different with men than they are with women especially when you’re — we’re selling to 95% women online.

We have a lot of husbands are watchers, but we are, and so Paul can get away with things that I can’t that would make me look mea, or would make me look too firm. But he can say, you must pay your invoice in the next twelve hours or I put your stuff back. If I say it the same way he says it, all of a sudden they don’t like me. But for him they don’t question it at all. So there are some things about being a man that especially in the demographic that we have that does work that way, that he’s allowed to do something that I’m not.

But some of the things he does, he’s got certain songs that they know that they come on in their dance break, and he’s yelling at everybody to get up and dance, and he’s dancing and totally crazy. He wears his unicorn shirts, he always has had on backwards, and that’s something he’s done with his with his blog as well, it’s kind of his brand, they’re all surprised to see that he has hair, just things like they just that they get to know him, they know what to expect from him every time, so that it’s also comfortable for them.

Steve: So does that kind of imply that like a guy might be better at selling women’s products than a woman?

Tiffany: I don’t think all the time, I mean there are some products I don’t want a man to sell me, but I think that there’s some stuff that if they’re knowledgeable, and I’ve done a lot of different things. I also — this just shows I’ve done, I’m old now, I’ve done tons of things, but I also was a hairstylist. No matter how bad the men hairstylist were in our salon, women always wanted them to cut their hair because you want that acknowledgement from men I think. It’s a very weird, it’s just a very — women want men to tell them that they look nice, that this is going to look good on you, that you look amazing in that dress, you want to hear that.

When women say it to other women, a lot of times they doubt that you’re sincere which is a shame. They feel like you’re not being maybe sincere to them. If you hear it from a man, you’re kind of pretty sure that they didn’t have to say that, and they definitely don’t always go out of their way to say it. So they’re probably — you’re thinking it’s probably true, and it is I mean you don’t lie to anybody about anything, but it’s the way that it’s coming across to them, women like to have I think men help them find something to wear. I think they think it’s very interesting, and it makes them feel good.

Steve: That is really interesting what you just said there. So that’s the reason why you have Paul do the most of the selling, like I don’t think I saw you when I watched that one live with you guys?

Tiffany: I’m often a lot of — so it works really well for us. So I’ve seen a lot of men try to do what Paul does, and it comes across in ways insincere from them, because they’re not doing their own thing. They’re trying to do something that somebody else has already done, they’re trying to be someone that they’re not. If they come on and they’re just genuine and they are who they are, they don’t try to be crazy like he is, because he just is that way, then if it’s genuine people get that. If they’re trying to be something they’re not, you get that as well.

And so it just happened, it just works good. So I’m on often during the day, I do a lot of the kids’ stuff, I sell a lot of the kids things during the day, because I feel like it kind of comes across, I’m a mom, we’ve got seven children. I can tell you how this stuff’s going to fit your child. A lot of women, they like to buy the kids’ clothes from me. So that’s how it’s worked for us. Now you’ve got a lot of businesses where the husband although he might be full time LulaRoe, he doesn’t go on video at all. His wife is the one who’s selling.

It just for us happened, I mean Paul was never part of this plan for us, he was never part of this, he was not supposed to be involved at all, and now he does our live. So that original business plan I have Steve has I mean no as being on it. We have actually done, it just it completely flew out the window the very first day. But it just evolved into what it is now.

Steve: I’m just curious, have you guys tried to sell anything outside of LulaRoe, like it seems like everyone loves Paul, everyone loves you, and so at this point it almost seems like you could get away with selling anything.

Tiffany: You know what, and we have that talk a lot and I believe we could, I believe we could. I think that we — I mean we know how to build communities just from our experience blogging for so many years, and in running coupon classes and online communities for all that. We have sold out things, we had coupon binders that we designed ourselves, we had them made, we sold those along with our classes and stuff.

So we have done some of that, we talk about it all the time. I really believe that this is a way that anyone can do anything to create this community around this niche and around a certain demographic. They get to know you, they get to know why you love it, why you’re passionate about it, and if they’re going to purchase it anyway, they might as well purchase it from you.

Steve: Can we talk a little bit about how to build your community on like a Facebook page because you’re not going to have video per se, right; you said you were just posting images in the beginning. Can you talk about some of things that you did early on to build that page?

Tiffany: I make sure that I respond to everybody, whether or not it’s liking or it’s commenting or telling them thank you or amen, or just whatever funny little comment to them, always acknowledging them. I love to encourage them to post pictures of themselves, and it’s just that personal acknowledgement and making them feel like if they need something, I’m solving a problem for them. Or I am like them; I’m still trying to figure out what to make for dinner tonight. I’ve got to keep my kids up from 10,000 places. So I think it’s just it’s really just that that kind of basic community stuff.

Steve: Does that mean that you don’t use any auto posting, like everything is just you personally doing it?

Tiffany: You know sometimes I did for example in January, we did a fitness challenge. I went in and I did schedule out, every day we had a check in, and then at night we had a check in. I scheduled that stuff just to make sure it was posted at the same time every day, but I [inaudible 00:46:26] post a lot of stuff just organically, and right now we have so many of our readers and our customers posting that often I can’t get a word in.

Steve: Okay that’s great. So how many people did you have on your page before you started — before Paul did this first live that sold everything out?

Tiffany: We’re trying to look back, I wish we could get that like that timeline from Facebook of how many people you had when, but I think we had about 1,200 people when we did that launch.

Steve: Okay, not a huge page.

Tiffany: No it wasn’t at all.

Steve: Did you buy any likes or do you ever spend money on ads or anything?

Tiffany: Never. I haven’t.

Steve: Wow, okay this is completely organic?

Tiffany: Yeah.

Steve: Crazy.

Tiffany: I know. It is wild; it’s a little bit wild.

Steve: Can you just give the listeners an idea of like a typical nightly haul, like when Paul gets on, like how many do you sell?

Tiffany: You know what; we actually have a goal of selling 100 items every night. And so it’s we kind of — on our Google doc, we’re recording who purchased white, we have a good eye, we can kind of tell how many items we sold. There’s times when he’ll just keep going because it was a pretty slow night, and we just had that goal that we’re doing.

Steve: Okay I see, so you just keep going basically until you’ve sold those 100 items?

Tiffany: Mm-hmm, correct.

Steve: And I’m just curious, and this is just out of my own curiosity, are you taking orders still via like a Google doc, and then entering stuff in? I’m just kind of curious how come you’ve chosen not to use like an e-commerce platform for that?

Tiffany: Actually in our terms and conditions we’re not allowed to, so we can’t have a separate checkout cart system of any kind, we have to invoice through their program. So we’re a little bit limited on some of that. What we’ll do if we have a big cap to launch like Halloween or 4th of July or Valentine’s Day, we will do like a pre-sell and let people just blindly order, I just want this many pairs of leggings, and just to make sure they can get something, maybe they don’t want to sit on a live sale and wait till we show leggings.

So we’ll let them kind of preorder that, we’ll invoice them, they pay for it, and then when it gets — as soon as it gets here, we just automatically ship it out to them.

Steve: So you have to enter everything into LulaRoe system and then LulaRoe invoices the person?

Tiffany: Well we’re entering what they’ve got, we send that invoice out, but they’re paying through LulaRoe system yes.

Steve: Okay got it right, so you never actually touch the money?

Tiffany: No.

Steve: LulaRoe gets money, then they pay you?

Tiffany: Correct.

Steve: Okay, interesting. Wow, oh okay so let’s conclude this interview by asking you if anyone wants to kind of apply your principles to their own e-commerce store, what would you say would be the most concrete steps to get started doing this? So you need a Facebook page obviously right?

Tiffany: Actually we’re doing for the longest time just user group, we just used a Facebook group. Actually like you can build a little more tight knit community now. I know that a lot of people are more familiar with pages, I feel like we’ve kind of developed this in our groups. We also have the ability in the groups to create those albums and even post pictures and albums, and even use albums a little bit like forums which was something I’d never seen before. And that was also a draw to me, I just saw, I had never seen people using groups like they were.

So we do most of ours in a group, a Facebook group. I know I have my page, but that’s mostly just that’s kind of a way to if I want to run an ad, at some point if I want to do all that kind of stuff, that’s kind of my business card, but my group is where it really all happens. And some of the reason for that is ours has gotten so large, ours was closed, we can’t change it back. But it also makes some of our customers feel really secure when they’re like sharing their sizes and things like this, they’re more comfortable doing that in that closed atmosphere.

But we started in a group and so if people were to do that and they just — you were to build that community like you’re taught to build a community and to grow that with people within that same niche, if you show them yourself and you show them on video who you are and they get to know you, that is what is going to sell your product.

Steve: Can you talk about the distinction between a page and a group in terms of how you use it?

Tiffany: So your Facebook page is that kind of open business card that the whole world can see. It’s amazing for running ads, for boosting your posts, for sharing content. The group is a situation where it makes me kind of when I’m thinking about it, I think about it as a more like you’re having everyone over in your living room. And I feel like it gives them the opportunity to interact and comment more where they can post their own pictures and things which is important for our business, that they can show us what they’re doing within that. And so that’s why we do that.

Steve: Okay and then do you keep the group open, or do you have to approve every one that comes in?

Tiffany: We actually now have to approve every one. Even if your group is public, in order for them to comment, you still have to approve them. If it’s public, they can still watch a video, but to comment they still have to be approved into a group.

Steve: Okay and then to get that initial group of people, you mentioned that you started with friends, was it just completely organic from there like friends who were following friends?

Tiffany: It totally was, I did that one giveaway for those leggings in the beginning which you could always do that, but you risk getting people added in that really didn’t want to be there.

Steve: I see, and is there a problem with adding people that didn’t necessarily want to be there, they’d just be dead people, would that be a problem?

Tiffany: They are in your group, and they kind of pull that group’s weight down. And so you don’t necessarily want to have that happen. You could do, I’ve seen people do where they do a best friend give away, or you should only add your best friend or only add someone who loves LulaRoe, only add somebody who loves this product.

Steve: Okay, do you ever go in and clear out members who aren’t active?

Tiffany: A little bit. I haven’t taken the time, I think about every day, it’s on my list of stuff to do, but I mean definitely something I want to do.

Steve: So the idea there just to kind of summarize then is that you don’t want dead weight there because it brings the visibility of the group down on their feet, is that accurate?

Tiffany: And that’s correct, and the thing is if you have a very interactive group, you don’t have to have a lot of people in there. So for example we’ve got neighbors that sell LulaRoe, they have about 3,000 people in their group, and they do well over $60,000 a month. So it’s not about necessarily the size of the group that you have, it’s really about how that community is interacting with you, and what really they’ll purchase.

Steve: Okay, and in terms of your page versus your group, you spend most of your time in the group and not the page, is that right?

Tiffany: That’s right.

Steve: Okay, and the page you just kind of post, do you post like your personal stuff on your page as well?

Tiffany: I do a little bit and I also I mean that’s more why we have things scheduled on my page. I will schedule stuff on my page, I’ll actually have a post from Instagram to my page, and so I kind of have that linked that way, and I’ll create events and things on the page telling them what’s happening in the group.

Steve: Okay, I’m just trying to figure out like what purpose the page is at this point, it sounds like most of the business comes from the group, is the page like a conduit to your group?

Tiffany: In a way, so it also goes back to me just being in my background just being a blogger knowing I have to have a page, you can’t and it’s funny because you’re like you just feel like you’ve got to have that. We have a couple times gone live on our page, and shared that into our group. The problem with going live on the page is it is so open to everybody. We have a real high percentage of non pays when you do it on your page, because they don’t understand how it works. You’re doing a lot of re-explaining.

We typically only have about anywhere from three to five percent who don’t pay when we go live on our page, because so many new people and they don’t understand. We’ll have about a 10 to 15%.

Steve: Oh okay. And so the penalty for not paying in the group is you get kicked out of the group?

Tiffany: They do, they get two chances, and they’re kicked out.

Steve: But on the page you can’t really do that?

Tiffany: You can’t, no you can’t.

Steve: Got it, okay interesting. Well, Tiffany this interview was eye opening to me. I just can’t imagine being able to sell millions of dollars of product in an infomercial type environment on Facebook Live. And I do know that LulaRoe is an MLM type of thing. It seems like you make most of your money doing a lot of sales as opposed to depending on your down line?

Tiffany: Yes, exactly and that’s what was attractive to us.

Steve: Okay and then you could take this method and let’s say you decide to sell your own brand or your own line some day, you could just take this method that you’ve used, and then sell your own products that way as well and keep all the profit?

Tiffany: Yes that’s correct.

Steve: Okay, crazy, crazy. Well for the listeners out there, I’m going to try to post one of Paul’s live, you guys really have to just check this out, it’s crazy. I think he even like rings a cow bell at times right?

Tiffany: Exactly, it’s so funny Steve it’s back to that recognition.

Steve: Yeah so they ring this cow bell and it’s some like daily deal, or I can’t remember what he does.

Tiffany: It’s your first purchase, your first purchase for this, you get the cowbell, and I mean your readers will be like, oh my gosh you forgot Michelle’s cowbell, it’s crazy, they get there and do it.

Steve: Yeah and then people are nuts over this. You just have to see it to believe it. Well Tiffany I really appreciate your time and coming on. I learned a lot and I’m sure the listeners will get a lot out of this, because a lot of people aren’t selling this way right now, and it sounds like it’s an amazing way to sell, and it converts really well.

Tiffany: Yes it does.

Steve: Well Tiffany, thanks a lot.

Tiffany: Thank you Steve.

Steve: All right, take care.

Hope you enjoyed that episode. Tiffany and Paul are one of the very few people I know who sell physical products via Facebook live, and you really have to watch them in action to believe it. It’s actually crazy. For more information about this episode, go to mywifequitherjob.com/episode182.

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.

Now, I also want to thank SellerLabs.com. Their tool Scope has completely changed the way I choose keywords for both my Amazon listings and my Amazon advertising campaigns. Instead of making random guesses, Scope tells me exactly which keywords are generating sales, and within the first week of use I saw a 39% increase in sales. It is a no brainer. So head on over to Sellerlabs.com/wife and sign up for free. And if you love the tool you will receive $50 off. Once again that’s sellerlabs.com/wife.

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 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.

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!

181: How Dave Munson Started Saddleback Leather By Leveraging The Power Of Storytelling

How Dave Munson Started Saddleback Leather Using The Power Of Storytelling

Today I’m thrilled to have Dave Munson on the show. Dave is the founder of Saddleback Leather which is a company that sells indestructible leather bags. I’m actually quite familiar with the Saddleback Leather story. In fact, I even used his company as a case study in my create a profitable online store course on how to create a great unique value proposition for your products.

Even though Dave’s company sells leather bags which is a commodity product that is highly competitive, Dave has created an incredibly profitable business selling bags by standing out in a competitive niche.

What You’ll Learn

  • Dave’s motivations for starting his business
  • How Dave started a leather bag company without knowing anything about leather
  • How and where he produces all of his bags
  • How he marketed his store with You Tube videos, stories and word of mouth
  • How to find your unique value proposition

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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Transcript

Steve: You are 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.

Now today I’m thrilled to have Dave Munson of Saddleback Leather on the show. Now Saddleback Leather sells leather bags, and way back in 2011 when I first launched my e-commerce course, I actually used Saddleback Leather as a perfect example of how to sell a product in a competitive niche by having a great value proposition. I know you’ll love this episode.

But before we begin, I want to give a shout out to Klaviyo who is also a sponsor of the show. Now I’m super excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I actually depend on them for over 20% 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, and that allows you to do many things. So let’s say I want to send an email out 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.

Now 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 I also wanted to give a shout out to my other sponsor Seller Labs, and specifically I want to talk about their awesome Amazon tool, Scope. Now I’m really excited about Scope as well because Scope actually increased my Amazon sales on several listings by 39% within the first week of use, crazy, right?

Now, what does this tool do that could possibly boost my sales so quickly? Well, quite simply, Scope tells you what keywords are driving sales on Amazon. So here is what I did, I searched Amazon and I found the bestselling product listings in my niche, then I used Scope to tell me exactly what keywords those bestselling listings were using to generate sales. I added these keywords to my own Amazon listings and my sales picked up immediately.

So today I use Scope for all my Amazon products to find high converting keywords in the back end as well as for my Amazon advertising campaigns. So in short, Scope can boost your Amazon sales almost immediately like they did for mine, and 39% is nothing to sneeze at. Right now if you go to Sellerlabs.com/wife, you can check out Scope for free, and if you decide to sign up, you’ll get $50 off of any plan. Once again that’s Sellerlabs.com/wife, 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 Dave Munson on the show. Now Dave is the founder of Saddleback Leather, which is a company that sells indestructible leather bags. Now I normally don’t interview anyone who I’ve actually haven’t met, but Dave is different because I am quite familiar with the Saddleback Leather story, and in fact I even used his company as a case study in my create a profitable online store course on how to create a great unique value proposition for your products.

So here’s the thing, Dave’s company sells leather bags which by most standards is a commodity product that is highly competitive. But Dave has created an incredibly profitable business selling bags. So I invited him to come on the podcast today to talk about his story, and how to make your company truly stand out in a competitive niche. And with that, welcome to the show Dave, how are you doing today man?

Dave: I am doing great, thanks for having me on Steve, I appreciate that.

Steve: Yeah, really happy to have you especially since I’ve actually kind of analyzed your company over the years, so it’s great to actually be able to speak to you mano-e-mano. So give us a quick background story. I know the story for Saddleback Leather is great; I wanted you to tell the story to the listeners though about how you came up with the idea of selling leather bags, and what your value proposition is?

Dave: Okay, so back in 1999, I was kind of like, I don’t know, what do I do, what should I do? I was 28 years old, I was like, what should I do? And I — someone said hey, would you volunteer to teach English sound in this little school in Mexico? I was, yeah that sounds cool, I’ll do that. And so I moved to Mexico, and way down south, and I taught English for a year.

And while I was there, I was looking for a bag. I had this bag in my head; it’s like something like Indiana Jones would carry. And so I was looking around, I looked around for it, I couldn’t find one, but I found a guy making bags. And so I sketched it out, he made it for me. And everywhere I went, people would say, oh my gosh, where did you get that bag, that is gorgeous.

I went back up to the states, to Portland, Oregon where I’m from, and man it was constant, four or five times a day, bankers and people coming out of their offices as I walked by were like, “Excuse me sir, where can I get one of those?” And I thought, huh, and I’d always been a youth worker, I always work with youth. And so that, I was like, hey this could — this I could do it for free, and I just sell some of these bags, that would be cool.

And so I went back down to Mexico, I had been selling real estate, I had a – Federalist [ph] sent to kill me for something. It was like, I fought a bull in a bull fight, you know what, all this stuff in Mexico is really cool, and not always comfortable, but it was really cool. And I ended up in Juarez Mexico, right across the border from El Paso Texas, and just me and my black lab blue, we just slept on the floor of this $100 a month apartment, no hot water for three years, and yeah that was kind of sucky. That was kind of rough.

But all the money that I was making, I would send money, I put money into his bank account in Juarez, and this father and son were way, way further south. They would send up three or four bags on the bus. I would go to the bus station in Juarez, I’d take the bags over to El Paso, and I used — a friend of mine has a mechanic shop, and I’d use his internet to surf at night, and I would sell on eBay.

And so I’d sell a bag or two here and there, and then I would sell them, and then I would deposit the money into the bank account that this father and son and I would – I would buy seven bags, and then 12 bags, and then 14 bags, and then I’d buy dog food again, and pay rent and stuff. And then I would start with six bags again, and then 12 bags, and pretty soon I got to where, yeah he couldn’t keep up anymore.

Around that time, it’s 2006, I was in Panama with my brother, and I stopped and see how the auctions were doing, and they went to like $710 for two bags, and then the second chance offer to the third person was for 705.

Steve: Sorry, this is on eBay or?

Dave: Yeah it was eBay, yeah.

Steve: Okay.

Dave: And my dad was sending the bags out while we were down there, and I was like I just made $2,125 while I’m in Panama, are you kidding me, that is awesome. So I was like, man I think I’m really on to something. And just after that, like seriously I clicked out of that, went to My Space, and this is 2006, and very beginning of 2006. And there was this really pretty girl who was asking me about — she’s like where is the phone number of Bible College where I went to school. And I was like, wow she’s pretty, so I read her profile, we had a whole lot in common, got back, I went to visit her, started kissing, the next thing you know, we’re married like five months later.

And yeah, so then we started our factory down there in 2008, and because the other people couldn’t keep up with the production. So we started our own, people don’t care about quality of your stuff as much as you do, nobody does. So I started our own factory, and yeah [overlapping 00:09:07].

Steve: Can we talk about that for a minute, like you went from a single Mexican craftsman to a factory. How does that happen exactly? How much did you pay to like start your factory? It just sounds really intimidating actually to me.

Dave: Well, this restaurant that my wife and I like to go to had this Dutch guy that was managing it, and real likeable guy, sparkly eyes, you know real doer, we really liked the guy. So I said, hey Renee, if we start this factory, you know we want to do it, do you think you can find some people. So we invested about $60,000 in machinery and rent and renovating this place, and he went over to the Dooney & Bourke factory where they make Dooney & Bourke purses, and he just — if the sheep were too skinny, then I’ll buy them over to my pastor.

So they would pay them a little bit more and we got some of their — we got about 14 of their very best. I mean the grass is greener and if they can fit through the fence because they’re so skinny, then ah. So we brought him over, and we got another name, spent time with them, and Renee bought our business name. He got us going, got us really strong, and he’s still with us today.

Steve: What were your sales like at that point, just curious?

Dave: When I got married we were at 75,000, I think I’d sold 74 – in 2,000 like $74,000 or $75,000 that year.

Steve: Okay, wow.

Dave: And you know cost of goods was probably half that or something like that. I didn’t have a lot of overhead, it was just my dad shipping stuff, and my sister was doing some customer service, and I was doing everything else.

Steve: And that’s actually when you decided to start your own website as well?

Dave: Yeah, a friend of mine from church said, hey Dave, you need a website man. So like 2004 I think, he was like you really seriously Dave you need a website. And so you got to think of a name, because I was just selling these bags with no names on them. And I wrote my story out of what I was doing and stuff, blew it nicely on the floor travel around Mexico in my old Land Cruiser, a really old Land Cruiser, and we’d sleep on the rack and blue would run and jump up onto the hood, and he’d jump up onto the rack, and we’d sleep up there you know behind some gas station or somewhere.

And people liked to just say man and his dog just trying to travel around, an. I didn’t know, I was like, I thought it was just kind of normal.

Steve: Did you know anything about leather before starting this company?

Dave: I knew that it smelt really good.

Steve: Okay, so here’s the thing for the listeners out there, like Dave has all these videos on his site that emphasize the quality of his bags. And you come across as supremely knowledgeable about leather and craftsmanship, and I guess that just picked up over time. So you had none of this knowledge before you started right?

Dave: I knew nothing, I would go to Wilson’s Leather in the mall, and I would go in there and like tell them, oh it smells so good in here, like that’s all I knew about leather was just it smells really good. But here’s what happened, so I took a tour of the factory, and I just started asking a lot of questions. And so what I tell people, if you’re going to get into something, become an expert, I mean an expert in what you’re doing. So like I went into to go into Australia once to find out about kangaroo leather, and they use it for like high end motorcycle racing, and suits and shifty boots in Porsche and high end soccer shoes.

I was like; okay what is it about kangaroo skin? So the guy was telling me at the tannery, and I go, no I want to know — and we don’t use kangaroo, but I wanted to know about it. So he goes, okay in a molecular level, all of the fibers grow at a 45 degree angle to each other in like 3D, all different directions, and they weave together, and that’s why it’s flexible, and that’s why it’s so strong. I was like, oh that’s what I needed to know is — and you can split it, you can split kangaroo leather in haves like lengthwise, like horizontally, and the bottom half is equally as strong as the top half.

I was like, oh that’s wonderful stuff to know. And if you do like irregular hide, if you split it in half so it’s like one millimeter on top, one millimeter on the bottom, the top half has all the really tough fibers all kind of woven together, and the bottom half has all the flat fibers and it tears easier. And so you just start learning stuff like that, but I always tell people become an expert in your area. Learn all about the tanning process, learn all about different skins, learn all about why they’re like they are and so on and so forth.

Steve: So Dave, so you transitioned from eBay to your own site, but eBay already has like a built in audience right, and so I was just curious how you got some of the early sales for your own site.

Dave: I’m sorry, what was that again, I missed that last part?

Steve: How did you start getting sales for your own site, and not taking advantage of eBay’s audience, like when you started your own site, you have no audience, you know traffic, right? So how did you get some of your early sales?

Dave: Oh so what I would do is really was word of mouth. People were just talking about it. I started off the site, or I started on eBay and then I would mention my website. This is just one of the bags we have, but I hope you like it, and people go, oh they have other bags, and so they look at the name, they go to Saddlebackleather.com, and come over to our site. So then we started having people talk about us. One of the big things I would do is I would do — like I did a You Tube video in Australia with a crocodile, I was doing a tug of war with the crocodile with my back.

And then on our honeymoon we did this — we went on to Bora Bora for our honeymoon, and super duper cool place, and we went scuba diving. And so we go down there and there were sharks all over the place, and as we stuffed the bag full of like fish guts, and we took it down like 60 feet down, and we set it there, and all these fish were just swarming all over it. And so and the sharks were swimming around, we got some great pictures and great video of that.

So we just started doing — and that was in 2006, I posted both of those and YouTube had only opened, man, I think a year earlier or something like that. So we were kind of newbies there. But that kind of stuff, crocodile attack, that’s where they just started giving traffic to our site.

Steve: So let’s talk about that video. So first of all for the listeners out there, Saddleback Leather’s value proposition is that these bags are indestructible, and what’s your tagline again?

Dave: They’ll fight over it when you’re dead.

Steve: Right, and so this first video that he was talking about was to demonstrate how indestructible it is by throwing it to sharks. So I’m curious like how did — so these YouTube videos, were people just clicking on like the link underneath the video, or were you just getting type and traffic from people actually seeing your brand on the video and then going to your site that way?

Dave: Yeah, I think people were just — you know I don’t know, I just thought was going to post it. So I was just telling my nephew, we were talking, he has a photography business here with us in Fort Worth, and he was saying – we were talking about getting a university or college to put a link on their site for you, and how Google stands up and salutes that. And he said, but yeah but if it’s not on the right page, there’s not a lot of traffic, SEO, blah, blah, blah.

I said it’s 100% better than no link. So I say a video with a crocodile attacking the bag or shark swimming around the bag is way better than no video. So actually so I tell people, how do I get my video presence up, or how do I get good at writing blogs, or how do I get – I’m sure you get it all the time, how do I get good at podcasts?

Steve: Sure, yeah.

Dave: I say the way you get good at these things, the way you get good at photography is by taking a whole lot of pictures. The way you get good at public speaking is by doing a whole lot of public speaking. And you name it, you just have to put the time in. Podcast, how long have you been doing podcasts?

Steve: Not that long, three years at this point actually.

Dave: Okay, I bet you — well you’re really good at asking questions, and you have a good voice for this, you’ve got a good presence, you seem very at ease. It’s because you did three years of this. Seriously that’s how you do it; you’ve got to put your time in.

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And Dave we were talking about this before we hit the record button, but the way you’ve kind of marketed yourself with your unique value proposition is a little bit unconventional, right? So when I think of leather bags, I tend to think of like the Guccis and like the Ferragamos because that’s what my wife is into, but here you have this slogan, they’ll be fighting for it when you are dead. And I’m just curious whether all that, I guess the shock value of that statement was intentional on your marketing, or was it just your sense of humor coming out?

Dave: Well, so in 2005, I went around and travelled around Eastern Europe and North Africa just with my bag and my like my briefcase and my suitcase. I was just carrying a cool leather suitcase, and I was — one of my plans was go to Switzerland and buy a gold watch. I wanted to buy — or something with gold. I had like $3,000 I had saved up, and I said I’m going to buy this because I want to hand it down to my grand kids to behold this, that was grandpa’s old watch.

And I found that, I was talking about, then people are like, yeah I want something like that to hand down too. Everyone kind of wants to be remembered by or something to that. So I figured, you know why not it be a bag where people go, oh man, that bag has got a million stories, yeah my grandpa’s old bag, it’s really cool, we found it after he died. And this is the desire people have, and so I thought what would go after that? And I told the guy when I made it, I said I just — I don’t want to any breakable parts on it, no zippers, no. I want it to be used after I’m dead.

And how do I say that in a one nice little phrase? Yeah, they’ll fight for it when you’re dead, that’s cool. So a lot of these good slogans and stuff, it takes verbally processing with other people. It takes just writing it out, and it took several months to come up with that slogan.

Steve: Was that available when you were selling on eBay, I’m just trying to kind of understand how like the evolution of your marketing and your branding went over time? Like when you first listed a bag on eBay, did you have a slogan or were you just literally putting up a bag on eBay?

Dave: No, I didn’t even have a name for the company. I was just, hi, anybody who would like to buy one of my bags, they’re really good.

Steve: Okay, so how did that evolve to like all these strong value propositions on your site and your slogan, and just the marketing and the branding?

Dave: That, you know I don’t know. I just kept thinking this would be cool. I remember laying there in bed one time on the floor, on a mattress on the floor, and I was thinking, wouldn’t it be cool if I like travel around the world and take pictures of my bags, and people would think it was really cool and everything. And I don’t know, it just sort of evolved into that, and now we — but I think the more you put yourself out and put yourself into the brand, the more of who you are comes out. And the way we’re shaped and the way we’re formed by our environment, by what we read, by the people we spend time with, all that shapes us.

And so as I started getting into being around leather workers and being around you know these things, man it really — I began to care about quality, and I wanted to teach people because people need to know about quality. And so yeah, it just sort of evolved, it just kept on — so now we do films. Instead of just doing funny looking for a viral hit of you know someone stepping in dog poop or something, yeah it’s funny and many people will say that, we just started doing films and videos about things that we care about.

And instead of saying, hey guys we value Juvenile Diabetes Research Foundation, let’s do a video on my niece who has type one diabetes, and what her life’s like. So we did a little film, it made it into everywhere, film festivals, and all the stuff. Or, hey let’s do one about people, about a daycare or a factory, or let’s do one about quality, like what goes into a quality bag and this, and what to watch out for. Let’s do one about – and we share about what we value, and then people look at our stuff and they say, hey I value the same things that that guy does. And without us even saying, hey we value philanthropy, we value people, we value quality, we just share with them. And they kind of gather what we care about.

Steve: Do you don’t recommend that all businesses put themselves out there like this? I know some people who start a business, they kind of like to hide behind like a website, or can we redo this all over again, would you perceive the same way? And let’s say you were shy on camera and you didn’t really want to put yourself out there like that, how would you have proceeded? It’s a complicated question I know.

Dave: If I were shy, like I’m super not shy.

Steve: Yeah you’re not, I see it on videos.

Dave: Like I’m the opposite of shy. So I would – you don’t have to put yourself on camera, but you certainly can like do this, you can be the voice of it, or you can people film little things, little educational pieces, you can post blogs about quality. If you have a printing business, you can post and educate people about like the different papers that you want to use, and then make sure that they’re using this kind of ink because this other kind of ink will fade in the sun. So you want to make sure that you don’t have a pink sign, you have a red sign just like you bought three years later.

And you don’t want a gray sign, you want a black sign. So here’s something, let me educate you on ink and educate you on paper, and the coatings and UV, and just have but post associate yourself with other people who are not shy or…

Steve: No that makes sense. And I’m just curious about your marketing strategy. Is making videos and kind of humanizing your company your primary marketing strategy, or do you run a lot of ads, like I’m just trying to get an idea of where most of your sales come from?

Dave: Yeah, so it’s interesting, most of our sales for the longest time until recently until the last couple years had come from videos, Facebook being very social, and getting involved in people’s lives, caring about people. And then other people said, I found this cool company, and you got to buy something from them. It doesn’t matter what, just buy something from them. So yeah, most of our business has been just word of mouth, and worked for us. We kind of spur on word of mouth by doing videos.

We have a little show called, The Not Dead Yet show, and it’s every week, we’re coming up on episode 50. And, oh actually do 49 here pretty soon today, but we just do film our everyday lives, and but we spend on things that we value, and we don’t have very many people watch it, just kind of a little thing we do with our kids and my wife, see I got a super cool wife by the way, seriously. Eleven different women call my wife their best friend, and I sleep with her, it’s great, but anyway yeah.

Steve: How do you attribute like your sales, I was just kind of curious, like how do you attribute the sales to the videos? Like usually when — like for me like before I’m going to undertake something, like I kind of want to know whether that’s going to have a positive effect. And so when you produce a video, how do you know — do you know ahead of time that that’s going to drive traffic to your site which will lead to sales, or is it just something that you put out there and over time you can’t really quite put a finger on it, but in the back your mind you know that it’s doing something?

Dave: That’s exactly it, so on the videos you know or how to knock off a bag video we’ve had like 540,000 views of it. When I was putting the other, I was just educating people, and so if I only did things based on our ROI, I would be living in my mother’s basement. Not all the time, but for me that’s what would have happened with my company. So I was doing stuff that I just felt like it was a good idea, and it will pay off. So we never had a video, besides the crocodile attacking the bag video, we never had a video that really had more than ten or 20,000 views. And number 223 was how to knock off a bag video.

And we looked at it, we were like, okay what is it about it that people really like? And since then we’ve had several videos that have had 60,000, 160,000, 280,000 views on them. And because the way you get good at doing videos is doing videos, but here’s the thing, here’s something that happened because of, The Not Dead Yet video. Of course right away we had like 350,000 views or something like that, 300,000 views.

Steve: Where are these views coming from, are they just subscribers, or are you sending them an e-mail to check out the video?

Dave: No, people were posting on other websites. Like, oh my gosh, you guys, this bags company, in all these different places, or you have got to see this video, this is great, They’re going on and on about the video, and I even got an e-mail from Seth Godin, and he said, hey, nice job on the video.

Steve: Wow, okay.

Dave: I was like, wow, that was cool. But then a year later Kai Ryssdal from Marketplace, NPR with eight million listeners every week, he got a hold of me and said, hey, we want to interview you about this video, how to knock off a bag. And so that just — they just — it’s the gift that just keeps on giving that way there still. But you can’t expect to have any kind of great video. Don’t go for a viral video. And so what I say is like let’s say you have a field, and you’re out in the field and it’s like 15 degrees Fahrenheit, it’s just cold in the field.

Say you brought a fire, you know regular size camp fire, it’s warm around it, but if you get away from it you know — so the way to warm up the field is to have — what if you had like 250 fires going in the field all spaced out, it would be nice and toasty warm, you could wear flip flops and sandals and a t-top. So that’s what you’re after, I believe that’s what you’re after. Don’t go after the viral videos, go after educating people, go after sharing what you value. Go up for quality, and let that out there, and those, each one of those is a little fire that keeps your business really warm.

Steve: Dave, this sounds a lot like blogging and podcasting to be honest with you, like you put out content, and you’re not sure where it’s going to go, but if you continue to do it on a consistent basis, like I’ve been blogging for eight years now, and over that time you know some of them will be hits, some of them won’t, and the important thing is just the consistency of putting stuff out there, and putting your name out there.

Dave: Yeah exactly, we have this Not Dead Yet show. And you know all these episodes we’ve done, and all over the world we’ve done little bits and pieces from different places. And we have we have like 2,200 people watch it, or 1,100 or 4,200 people watch these little videos, and it takes a while. But I promise you, it’s going to lead to something, it will lead.

In fact we had — now come to think of it — going into it, we had a news anchor here in Fort Worth on CBS. He was looking for a briefcase, he went to our Facebook page, he saw the Not Dead Yet show, watched it, and he saw this tent that we were putting up, and we live in tents out in the country, but they’re like super cool tents like it’s kind of hard to explain. But he saw that and he was like, oh my gosh, we have to do an episode on you.

So they sent the film crew out, they did this episode of us and these tents that we were moving into, and we had — and that was probably worth $200,000 in sales.

Steve: Crazy, okay.

Dave: So you don’t know where it’s going to go. And then we had someone approaches two different people; they saw our shows and said, I want to have — would you guys do a reality show. And I couldn’t at the time, I put those on hold, it was last year, I just have other things more important. But see it leads to stuff, and people are like, dude, what are you doing, you waste all this money doing these, and all this time? And I go, I don’t know, but I promise you something good is going to come of it. And I don’t know, but something good is going to come of it, I don’t know.

Steve: Yea, I think a bit like lottery tickets, like every time you put something out there, it’s like another lottery ticket, and if you have enough out there, pretty soon you’re going to win the lottery or the jackpot.

Dave: That’s it, right.

Steve: Let’s talk about some other things, so we mentioned word of mouth is the majority of your business, are you guys doing any other sort of marketing as well?

Dave: Yes, we do we do Google AdWords, and actually we’ve gotten — we started out the business all like 100% word of mouth. We didn’t spend money on marketing for the first until like 2012 I think is the first time we spent money on anything else, any kind of marketing. From 2003 until 2012, the first nine years we didn’t spend — that I can think of, we didn’t spend any money on marketing.

Steve: It’s crazy, okay.

Dave: Well, I paid this guy in Jamaica $200 for our briefcases to turn into backpacks, and so I paid him $200 to film. He had dreadlocks, he was super cool looking guy, really nice guy, and I filmed with him all day, and I gave him $200 to have him demonstrating how to put it on, how to make it into a backpack. Other than that really yeah, I didn’t really spend any money.

Steve: So AdWords, are you doing any Facebook ads at all or?

Dave: Yeah so now we do Facebook ads, we’re doing Amazon, we sell an Amazon, that’s about — I think it’s about 8% of our business.

Steve: Let’s talk about Amazon a little bit because it’s hard to kind of put your brand and your value proposition out there on Amazon, right? And so the people that find you on Amazon, do they — and you probably don’t know this for sure, but do they already know your brand, or do they just think of you a just another handbag company, or a bag company?

Dave: Yeah, I think they just think of us as just another bag company. Yeah but we get a ton of traffic from Amazon to our website. So now our trick, our what we try to do is to keep them from buying on Amazon, and get them to buy from our website, because we don’t want to pay that 15 or 30%, whatever the number is that Amazon charges. So if we can get them to stay on our website, I mean all the better.

Dave: So how do you get people to come on your website from Amazon?

Dave: Oh well, we’ll say this is some of the stuff we have.

Steve: Okay, is that in the bullet points you mean?

Dave: Yeah, well, I get to look now what we have now, but we would strongly allude to we have a whole lot of other stuff elsewhere. And so yeah we’ve got a — we’re right now, my brother just took over Amazon and he has his own business too in Amazon, stuff for other people, and he had grown like super huge. And so he just took over our Amazon, and I know they don’t do the reviews where you get all those people to review your stuff for cheap, and they don’t do that stuff anymore.

So yeah we’re right now we’re working with doing a fulfillment by Amazon, and with a lot of our smaller pieces. We don’t want to put all of our big pieces in there. It’s too expensive for the storage and the fees, and that sort of thing. We have suitcases, we have some really big duffel bags and stuff, we’re not supper about shipping. So we’ve chosen the product line to send there, but also in there we’re going to — you can’t put a link to your website or anything.

Steve: Right, yeah.

Dave: But we do want to have, you register your bag. We want to have, we’re going to be having when you register your bag, you get this key chain that has like the letter S on it, it’s one of the — it’s not the A or the D or the L or the E or the B or the C or the K, but it’s the S. And when you register your bag, you get that key chain, that sort of thing. So we ultimately we want them to come back and buy off of our website.

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So that implies that not all of your items are on Amazon, right?

Dave: Exactly.

Steve: Okay, how do you pick and choose which ones you want to list on there?

Dave: Well, we go best sellers. We don’t want to have too much of a selection on there. If there’s too much of a selection, then people don’t choose at all. So we just — we’ve learned that the hard way, but so we’re narrowing down to just one size and these are best sellers of our briefcases, and the best sellers of our wallets. We’re not going to have all of the wallets on there. And most people just — I’m guessing they just buy off of Amazon.

Steve: There are some people that are like that yeah, I was just kind of curious yeah.

Dave: And here’s something I was thinking about, people I don’t think they go to Amazon or go to the website or internet, I’m looking for a briefcase that like everyone’s going to compliment me on or be part of this for Turtle Club, and all the people high five me and I’ll get the job because my interviewer liked my bag, and I’ll win the case because the judge liked my briefcase.

We hear all these stories all the time. And people aren’t looking for that, so they’re just going. They are not looking for what’s the best briefcase in the whole world, or what’s the most masculine briefcase there is out there? They’re just looking for something to carry their stuff. That’s what they’re looking for. So that’s why they were – they are not asking their friends even, hey what kind of briefcase should I buy? They just go to either Google images or Google Shopping or they go to Amazon. And they look for stuff. And then they fall in love with it and we get them to fall in love with it.

Steve: I mean it’s very easy to fall in love with your products, and I just – I encourage actually anyone who’s listening to this to go to Saddleback Leather, and I challenge you not to like their products, because David does such a good job of showing the quality and the care and the class that goes into every bag. I mean it’s crazy, I mean you have to go there and actually believe what I’m talking about.

Dave: Well, one of the things that we found — I just felt like instead of — I don’t want to dog another company, there are a lot of really good companies out there, and no one likes it when you insult and slam other companies. And so I just — what I do is I highlight what we do, and the quality that goes into it. I teach them, make sure that your hardware is like this, make sure that it’s polyester thread not nylon, make sure — and then people trust you.

So the more you educate people on whatever service you’re doing or whatever — if you install gates and fences, ensure that people understand what goes into a good quote, what goes into a good fence, how deep do you put the posts. And then it can — first of all they search trust in you, and second of all they go, I wonder if that guy does it, or is he going to be sneaky, or do I have to be out there all the time checking to see if you went down two feet on my yard. I wonder if the new soil is five inches deep, or if he just spread and put new soil on top of the old. I wonder, and they start questioning everyone around you, and then they just go, it’s not worth it, I’ll just buy from this guy.

Steve: That’s ingenious, like I can’t even think of that many companies that do that to be honest with you, it’s actually rare surprisingly.

Dave: I’m glad there aren’t, this is free more.

Steve: No I’m just thinking about handbags, I’m just thinking about your niche right now, and I can’t really think of very many companies that do that, it’s like an aha moment right now, it’s crazy.

Dave: Yeah, that’s very good.

Steve: And I’ll probably take this in the context of my own store being very selfish here, I could very easily talk about our personalization process, the care with how we deal with the items and packaging and everything, just like that. And that would instantly give us more credibility, and cause everyone else to question the other companies that are doing what we’re doing.

Dave: No absolutely, and I always say to quality, just go after quality, because you can’t compete with China on price, that is just a race to the bottom, but they can’t compete with you on quality. Now, they do quality things in China, there are people who make wonderful craftsman there, and the people are just like — seriously I’ve heard they’re super relational and really sweet, sweet, sweet people, but there’s such pressure for making money and at whatever the cost that you just kind of question.

We had some hardware made in China once, and it was nickel plated brass hardware. Brass is 70% copper and 30% zinc. So we got it, and their definition of copper wasn’t our definition of copper according to the American test standard measure, ATSM or whatever that is. And the hardware started falling apart, it started like the dealing would rub against the class for the shoulder strap, and it just would wear through in like a month, it cost us so much money to repair all of those. But we had it tested; it was like 34% copper instead of 70% copper.

Steve: I see, where do you guys source your stuff from, like how do you ensure quality for your own stuff?

Dave: Oh, we do our own inspections, we send stuff to laboratories with random inspections, government laboratory, we have our factories in Mexico, and so there’s a place called CA Tech just down the road, it’s a government laboratory. And we will drop off hardware; have them give us the report of what the hardware is made of.

Steve: Where do you source the materials from like both the leather and the rivets and the hardware?

Dave: Yeah it’s mainly local. We have a tannery in this town called Laon [ph], and it’s right kind of central Mexico, it’s really a pretty place, and it’s kind of the leather capital. So we’ve learned like two tanneries that we want to work with, and one tannery is — they voluntarily submitted themselves to be inspected by this British company — British kind of the head of all leather for the world, and these guys come in and we’ll check their break rooms, and they’ll check the dressing rooms and the bathroom, make sure they’re clean, they want to make sure their employees are being treated right, that they have a water treatment plant, they’re checking their chemicals randomly, they’re inspecting the leather, and they just fly in and just take stuff and sample it.

And so they won tannery of the year one of the years for North and South America, and another year they came in second to the red wing tannery up in Minnesota, but that’s out of even Brazil or Argentina, they came in second out of hundreds of tanneries. So we do business with them, they love their people, they really care for them. They are just a good solid tannery.

Steve: So it seems like all materials and everything that you do is the highest quality, and so does that affect your margins, I mean you have to be priced higher to afford this, right, and so do you ever run into problems where people just want like the cheap stuff?

Dave: Oh they’ll come see us next year when their bag is all crappy. I ran into a guy in the airport once, and from a distance I said, hey that’s a nice briefcase. And he looks at me, you wait in line at a restaurant, and he is like, oh thanks. And I walked over to him, I was like, hey where did you hear about Saddleback Leather. And he goes, who? I looked at us like oh that’s a knockoff bag. So I go, oh this is Saddleback, and he goes, no. I say, where did you get it? He said, oh I got it on the internet somewhere. And I said, well, I’m glad that at least you like my design.

So those guys, they all come back when their bag wears out. Some of the bags are like the people knocking off our stuff. They sell their bags at the cost of my raw materials. I mean like or they sell them at less than the cost, the price of my raw materials, and people are embarrassed, yeah I couldn’t afford one. Dude, I understand that, I’ve been there, but save up.

Steve: Right, okay so it hasn’t really like all these knock offs hasn’t really affected your business much, which is kind of where I was getting at?

Dave: You know what, when you educate, when you’re first in the market, when you’re high, high, high quality, they can’t compete with you, it’s just, they just can’t. I mean of course yeah I’m sure we lost some sales. I lost that guy, I ran across two other knock offs. But those are the exceptions. I’m not going to worry about those guys; I will put my head down and keep doing the right thing.

Steve: That was my next question, do you have to try and go after these people, and it sounds like no.

Dave: No, I just put my head down, and I just work really hard. A company, some lawyers in Chicago said, because the guy I had when I first — the father and son in Mexico couldn’t keep up the production. So when my wife and I got married, we moved to Mexico, and I found a small factory to make my stuff. Well, then we started our own factory like a year and a half later, but in the meantime — or after we started our factory he started the website called SaddlebackLeather.us, and he was selling my bags, because he knew how to make them.

And so I talked to this lawyer in Chicago and the guy said, yeah, I’ll talk to my partners, we can take care of that guy for $410,000, and we’ll get him to stop selling. And I was like, man, hit men are a lot cheaper than that. No, I said, no thanks, I’m not going to do that. So I went to Carlo, and I said Carlo, I’m going to tell your dad if you don’t stop making my bags, it’s a disgrace what you’re doing, and I knew his dad. And he was like, okay, okay, okay, I’ll stop. But I just put my head down, and those guys will go out a bit since. They will.

Dave: So Dave, we’ve been chatting for a little bit, and I did want to get your opinion because I get this question all the time. I have people that come to me and they say, hey Steve I would like to sell such and such, like baby clothes or wedding favors, or something like that, things that are really competitive and pretty commoditized. And I would actually categorize leather bags in that category, right? So what advice would you give people, who are trying to sell something that’s highly competitive, if you were to start all over again?

Dave: Yeah, I would say, again I would say personalize it, because if they see you and your wife and your little baby selling baby clothes and you’re like, you know what is this little Mom & Pop saying and it’s new to us, we just love it, and we found there was a lot of baby clothes out here that we really like for our kids that were soft enough, or whatever it is. And so we found this group and oh out of Spain, they’re just fantastic, and anyway we’d love for you to buy from us, you know something and I’m just making that up right now, baby clothes what you said.

But people want nice people to succeed. And if they have a choice between some corporation, you know Saddleback Leather cot, or Dave and Susan and their family, who do they buy from? They’re going to buy from us. So I would say make it personable, be yourself, and if you’re not a nice person then don’t. Do videos, I would say do videos, put it out there. I would say, yeah I would say do videos and put them out there, and show yourself, reveal yourself, be transparent in it. And I would say that you’d be surprised how many people are going to want to — like oh, I hope one day I can have lunch with them, just because they think you’re a celebrity because you do videos.

So I would say make it really authentic, but put yourself, personalize your company. So when they do go from Amazon to your website to check it, or whatever it is, if you do party favors, I don’t know if they do that, but yeah, I would say know all those, and know about party favors. And maybe have some sort of a custom party favor. Think of how you can improve it, or do bundling, you know we’ll sell not only paper maché, but we will you know rolls, but we will also throw in there a roll of tape also. And yeah, I would say start over, but above all things I would say be generous with people. Just take that, just be generous with people even in your personal life, be generous with people.

Steve: Well, that’s great advice Dave, and I really appreciate your time, and I’m actually probably going to go out and start documenting our processes and how we actually take care in stitching out our products now after talking with you. So I think that’s great advice, and it’s almost like, why didn’t I think of that earlier. Thanks a lot Dave for coming on the show, really appreciate all your advice. If anyone wants to get ahold of you, or if they have any other questions, where can they find you?

Dave: Yeah, Dave@SaddlebackLeather. And they can go there or Dave@SaddlebackLeather.

Steve: Okay, all right then, thanks a lot for coming on the show Dave, really appreciate it.

Dave: Hey, it was good talking with you, take care.

Steve: All right, take care.

Hope you enjoyed that episode. I’ve actually known about Saddleback Leather for quite some time now, and I really admire Dave’s approach to business, and it’s a model that everyone should follow. For more information about this episode, go to mywifequitherjob.com/episode181.

And once again I want to thank SellerLabs.com. Their tool Scope has completely changed the way I choose keywords for both my Amazon listings and my Amazon advertising campaigns. Instead of making random guesses, Scope tells me exactly which keywords are generating sales, and within the first week of use I saw a 39% increase in sales. It is a no brainer. So head on over to Sellerlabs.com/wife and receive $50 off. Once again that’s sellerlabs.com/wife.

I also want to thank Klaviyo which is my email marketing platform of choice for ecommerce 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 auto pilot. So head on over to mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

Now, I talk about how I use all 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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180: How To Train Yourself To Innovate, Inspire And Implement With Stanford Professor Tina Seelig

An Interview With My Stanford Entrepreneurship Professor Tina Seelig On How To Implement Your Ideas

Today I have someone extra special on the show and by extra special, I mean that this person is one of the main people responsible for introducing me to entrepreneurship.

Tina Seelig is a professor in the Management Science and Engineering department at Stanford University. She’s also the faculty director of the Stanford Technology Ventures program of which I was a member. And most importantly, she was my professor of entrepreneurship way back in 1999 along with Professor Tom Byers.

Recently, she released a brand new book called Creativity Rules: Get Ideas Out Of Your Head And Into The World that you should definitely check out. Click here to grab a copy!

Enjoy the show!

What You’ll Learn

  • How to learn creativity and entrepreneurship
  • How to come up with innovative business ideas
  • A framework for taking your ideas all the way through implementation
  • How to change your way of thinking while brainstorming

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

Ignite.Sellerlabs.com – If you are selling on Amazon and running Amazon Sponsored Ads campaigns, then Ignite from Seller Labs is a must have tool. Click here and get a FREE 30 Day Trial.
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Kabbage.com – If you run a physical products based business, sometimes you need a short term loan to buy inventory to meet demand, especially during the holiday season. Kabbage helps small business owners access simple and flexible funding right away. Click here and get a $50 Visa gift card upon signup.
kabbage

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 working and what strategies are not. Now today I’m thrilled to have someone really special to me on the show. Tina Seelig is a professor in the management science and engineering department at Stanford University, and she happened to be my professor of entrepreneurship back in 1999 when I was at Stanford. I know you’ll love this episode.

But before we begin I wanted to give a shout out to Seller Labs for sponsoring this episode, and specifically I want to talk about their awesome Amazon tool, Scope. Now if you know me, I always get really excited about the tools I like and use, and Scope is a tool that actually increased my Amazon sales on several listings by 39% within the first week of use, crazy, right?

Now what does this tool do that could possibly boost my sales so quickly? Well, quite simply, Scope tells you what keywords are driving sales on Amazon. So here is what I did. I searched Amazon and I found the bestselling product listings in my niche and then I used Scope to tell me exactly what keywords that bestselling listing was using to generate sales. I then added these keywords to my own Amazon listing, and my sales picked up immediately.

So today I use Scope for all my Amazon products to find high converting keywords in the back end as well as for my Amazon advertising campaigns. So in short, Scope can boost your Amazon sales almost immediately like they did for mine, and 39% is nothing to sneeze at. Right now if you go to Sellerlabs.com/wife you can actually check out Scope for free, and if you decide to sign up, you’ll get $50 off of any plan. Once again that’s Sellerlabs.com/wife.

Now, I also wanted to give a shout out to Klaviyo who is also a sponsor. Now Klaviyo is the email marketing platform that I personally use for my ecommerce store, and I actually depend on them for over 20% of my revenues. Now you’re probably wondering what’s Klaviyo all about, and what makes it special. Well 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 out 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.

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. 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 someone extra special on the show, and by extra special I mean that this person is one of the main people responsible for getting me into entrepreneurship in the first place. And this person is none other than Tina Seelig. She is a professor in the management science and engineering department at Stanford University. She is also the faculty director at the Stanford Technology Ventures Program of which I was a member, and most importantly she was actually my professor of entrepreneurship way back in 1999 along with Professor Tom Byers.

Now Tina is also a well accomplished author, and has written 17 books that have sold extremely well. She’s an accomplished public speaker, and travels the world teaching entrepreneurship as well. And with that, welcome to the show Tina, I am so happy to have you on today.

Tina: Thank you so much, it really is my pleasure.

Steve: So what’s funny about this interview is that we’ve always had this like Professor-student relationship. So I actually have very little knowledge about your past. And so I was just kind of curious for my knowledge at least, how did you get into entrepreneurship, and how did you end up at Stanford?

Tina: Yeah, you know what, it’s such a funny question, because of course all of us have such interesting, and circutous paths in our career, and mine certainly is. I don’t know if you know I started out, I did my PhD in Neurophysiology. I did my PhD at Stanford Med School, and when I finished way back in 1985, I said, you got to be kidding, I really — the money for research was drying up. I was going to have to go do post docs all over, and although I was you know really love neuroscience, I don’t think I was the best neuroscientist in the world.

And I thought I really want to get out into industry and see how people take their ideas, like the things that come out of the lab and actually turn them into products. So I ended up going into industry, which is its own interesting story about how do you actually transition from being a scientist to going into the industry? That was not an easy path, and I’m happy to share some of the funny stories there about trying to sort of change careers. But it’s a very long circuitous path doing lots of different things.

And then in 1999, which is the year I met you, I saw a job posting about this new Stanford technology, this program, and I thought, wow, that sounds like an incredible confluence of education and technology and entrepreneurship. And I threw my hat in the ring.

Steve: Wait, was that the first year?

Tina: Yeah, you were like my first students, the first Maytho [ph] fellows.

Steve: I had no idea, wow, that’s so awesome, I did not know that.

Tina: I was totally green, I was totally green. Honestly, I wish we could go back and do it again.

Steve: So Tina recently sent me one of her awesome lectures on bringing entrepreneurship ideas to life, and that’s what I’m going to discuss today with the listeners here. So here’s the thing Tina, so many of my listeners and readers, they often complain that there aren’t creative or they aren’t innovative. So the question I’m hoping that you can answer today is one, can you learn to be more creative and innovative, and can you actually teach entrepreneurship? Like a lot of these people come to me and they say, hey I’m just not a creative person, I don’t think business is cut out for me. Is this like an innate talent?

Tina: Oh my gosh! Thank you so much for asking this. Honestly I get asked this all the time, and I am delighted to answer this question. First of all creativity is not like eye color that you can’t change. It is something like every other skill that can be learned, can be improved, can be mastered, the same is entrepreneurship. I mean would you ever say — I mean no one says, can you teach math, or can you teach science or history or even can you teach music or sports. Like we assume you can teach us. I mean I might not be a world class musician or athlete, but certainly I can get better with training. And so the same is true with creativity and innovation and entrepreneurship.

The other thing that is critically important here is that we are all creative. I mean look at any little kid, they’re creative. Think back to when you were a little kid, you know everybody is creative, and unfortunately our school system is designed to essentially beat it out of us, because — and this is sort of one the areas I’m most passionate about is like how do we rethink the way we teach, because our school systems are designed in ways to be able to measure the impacts of teaching. Well that sounds like a good idea right, except creativity is hard to measure.

And so because it’s hard to measure, we don’t teach it because it’s hard to measure. In fact one of my favorite quotes about this is the quote is, “Not all things that count can be counted, and not all things that can be counted count.” And unfortunately the problem is because creativity is hard to count, we don’t count it and we don’t teach it.

Steve: I already knew the answer to that question before I asked; of course the answer is yes. And so I want to talk about your entrepreneurship framework, kind of regarding how you start from an idea all the way through the implementation of a business, and I’d like to actually address the creativity and innovation problem first. How can you become more imaginative, creative, and innovative?

Tina: Yeah, so first let’s start out with the definitions, and I have to tell you I fell into a trap that everybody falls into, the trap is around using these terms, imagination and creativity and entrepreneurship and innovation, all sort of interchangeably. And so it becomes a big soup, and therefore what you think we’re talking about is really different than what I think I’m talking about, and we’re talking past each other, and it seems very unscientific. And so, I decided to put a stake in the ground with some very clear and easy to remember relationships and definitions. So here they are.

Imagination is envisioning things that don’t exist, pretty straightforward, right? I mean it’s something we all do right; I can envision a butterfly flying around my room. Creativity is applying that imagination to solve a problem, innovation is applying the creativity to come up with a unique solution, and entrepreneurship is in applying the innovation to essentially scale the idea. So what you’re seeing here is a hierarchy of skills from imagination to creativity to innovation to entrepreneurship.

One thing I want to underline, highlight, bold is that the difference between creativity and innovation is very important. Creative ideas are new to you, but innovative ideas are new to the world. And it’s really important to distinguish between those two, because if you really want to come up with innovative ideas, something that is new to the world, that’s fabulous. But if you use the concepts of creativity, you’re going to really stop short of coming up with reaching that goal.

So anyway, those are the definitions, and I like to compare it to learning how to talk. So if you think about it, babies naturally babble right, they just make noises. They apply those sounds to make words, apply the words to make sentences, and the sentences to make stories. And it’s the same hierarchy going from sound to word to sentence to story is the same as going from imagination to creativity to innovation to entrepreneurship. They each are the application of the scope before.

Steve: But the baby learning how to babble and speak is not innovative, right? It is just…

Tina: Well, I’m just using it as a metaphor, just as an example. And the idea though is that — and this is very important is that, in this I call the invention cycle is that when you get to the end, it leads back to the beginning, which is one of the most powerful parts of this framework is that once you’re entrepreneurial and have scaled your ideas, you can only do this by inspiring other people’s imagination. So it leads to their — it triggers the cycle for them as well.

Steve: So what are some exercises, so you mentioned like innovative means that something is new to the world and not just to yourself. So for those people out there who don’t think that they’re innovative at all, like what are some exercises that you can do to actually come up with innovative ideas?

Tina: Great, I love that question. This is what I spend 99% of my time in my classes doing, it’s coming up with ways to do this. So the most important thing is to question the question you’re asking, that is to reframe the problem. That’s where the innovation comes in, is when all of a sudden you look at the problem from a very different angle. For example, let’s say it’s your birthday, when’s your birthday?

Steve: May 19th.

Tina: Okay, so we have some time to plan here okay. We can say, okay Steve it’s your birthday, we’re going to brainstorm about the best birthday party. And that might seem like a really good idea to brainstorm about the best birthday party. But if we question that question, and change the word party to celebration, let’s plan the best birthday celebration, what happened to the set of solutions?

Steve: So that opens it up to more.

Tina: Many more, what if I said, let’s find the best way to mark your birthday. That becomes an even bigger set. What if I said, let’s come up with the best birthday present, or the best birthday card or the best way to surprise you on your birthday, or the best birthday ritual? Here is the key; the answer was baked into the question. When I ask the question, there is an assumption about what the answer is. If I said we’re going to have a birthday party, the assumption is it’s a party. And so if you really get good at questioning the questions you ask, in fact I like the concept of frame storming.

It means you actually brainstorm about the questions you’re asking before you even start thinking about the solutions. This is something I feel so passionate about. What happens is people rush to the solution, because that’s the way our school system is, right? You get given a question and you have to rush to the solution, you know what’s the sum of five plus five, ten, right? I get to the answer. But what if I question the question? What if instead of asking, what’s the sum of five plus five, I said what two numbers add up to ten? We’re not going to come up with an infinite number of solutions. So you need to fall in love with the problem, not the solution.

Steve: We need some examples here.

Tina: Okay, I’ll give you lots of examples. I mean I gave you the birthday party example, but imagine, let’s make it really serious. Let’s say I’m really interested in dealing with people with cancer. So I could say the problem I’m trying to solve is how do I cure cancer. That’s, again it sounds like a great question, but what if I say well how do I prevent cancer, or how do I allow people to live better lives with cancer, or how do I deal with the families of people with cancer?

So if you actually spend the time thinking about the question you’re asking, you’re going to really open up the frame. So question the questions. One great way to do this is to unpack all of your assumptions about a topic. So I could, I don’t know, pick any topic, it could be restaurants, what are all the assumptions I have about a restaurant, or a hotel, or a family vacation? And once you unpack all those assumptions, you can then turn them upside down to start coming up with some really interesting new ways of looking at the problem.

Steve: I just want to take a moment to thank Kabbage for being a sponsor of the show. Now if you run a successful e-commerce business like I do, you probably know that the worst thing that could happen to you is to run out of stock. Now my wife and I regularly import container loads of merchandise from China, and sometimes you need a short term loan to buy enough inventory to meet demand especially during the holiday season.

Well if you’re wondering how to get the funding needed to run a small business today, Kabbage has the answer. Kabbage helps small business owners access simple and flexible funding right away without the headaches that come with applying for a traditional loan. Apply online or from your phone by securely linking your business information to get an automatic decision. There’s no waiting in line, scanning documents, or tracking down financial statements.

Kabbage gives you the flexibility to decide what is best for your business, and once you’re approved you choose when to use your funds and how much to take. You’ll only pay for the funds that you actually use, and it’s a line of credit that can be used for your purchasing needs.

Kabbage has supported over 100,000 small businesses with over 3.5 billion dollars in funding. So visit Kabbage.com/ wife. There is no cost to apply or to set up your line of credit, and as a My Wife Quit Her Job listener, when you qualify for funding, you will get a $50 visa gift card that you can use anywhere. Now that’s Kabbage with a K, K-A-B-B-A-G-E. com/wife. Once again that’s K-A-B-B-A-G-E.com/wife, now back to the show.

I see, so instead of limiting yourself with your language like the birthday party analogy. Everyone throws a party for someone right, but by opening it up; you could probably come up with something a lot more special, maybe a lot more meaningful by just making it more open ended questions.

Tina: The other thing is more innovative, right? I mean now this is really critically important because not all the time do you want to come up with a innovative solution. Sometimes a creative solution is just fine. I mean I don’t have to reinvent the wheel every day I make my kid a lunch for school, right? So sometimes I just want to open the refrigerator and I use my imagination which is envisioning things that don’t exist, a lunch. And I go, okay fine I’m going to take the peanut butter and jelly and make a peanut butter jelly sandwich.

So sometimes you know if I’m trying to get through traffic on the way to work, I don’t need an innovative solution, I just need a creative solution to do this, and that’s fine. And I think we should acknowledge that creative solutions are incredibly valuable for 99% of the problems we solve in our life, but for that 1% where you go, I really need an innovative solution, I need something that no one has done before, that’s when you really have to push further.

Steve: When I was listening to your talk, one thing that really struck me was one of the analogies that you specified about puzzles versus quilts, I want you to go into a little bit about that, and how we’re trained in a certain way in schools, and how this puzzle versus quilt analogy really works.

Tina: Yes, so I love this analogy, and I did not come up with it, I borrowed it from a colleague, Heidi Neck who’s at Babson. But I heard her talk about this and it really resonated with me. The idea is that people are really not tapped into their motivation properly, and that we don’t really think about it. Most people in the world just follow the motivations of other people. They go to work and they just follow instructions. And they are puzzle builders; they are people who basically — I mean think about doing a jigsaw puzzle. You pull out all the pieces, you start putting maybe this picture of the Eiffel Tower, you know someone else took the picture, someone else made the puzzle. You’re making the puzzle, but here’s the problem, you’re missing a piece, what do you do?

If you’re a puzzle maker, puzzle builder, what happens is you’re missing the piece puzzle; you go, well, I can’t complete this puzzle, too bad. And these are the people who at work say, oh I’m sorry that part is out of stock, or you know the person we need is on vacation. I mean they have lots of excuses. But a quilt maker is quite different, they look at what the end goal is, okay I want to make a quilt, and they look at all the resources they have at their disposal to get to that goal.

Again it’s falling in love with the problem not the solution. The puzzle is the solution, the quilt is the problem. So it’s like, okay how do I get there? And I’m going to use all the resources at my disposal. In fact there’s a great story I tell in one of my books about Peter Diamandis, who is the founder of the X Prize and Singularity University, he’s a really big thinker, he’s out there thinking about how to mine asteroids. And he walked into a colleague’s office, and the colleague had a sign on the wall, Murphy’s Law, if anything will go wrong, it will, Murphy’s Law.

And he got so upset, and he picked up a sharpie and he went up to the poster and he crossed out, it will and wrote, fix it. If anything will go wrong, fix it. And that was the point, it’s the difference between the puzzle builder who’s saying if anything will go wrong, it will, versus a quilt maker who says, I’m going to figure out, I’m going to find a piece, I’m going to find a solution to get me to my goal.

Steve: So one thing I really picked up when I was a student of yours was that there’s no right way to do anything, and a lot of my listeners are following these step by step programs on how to start a business. There really is no exact formula, right? You kind of just have to take what you’ve got, and then make the best of what you have. And when something breaks, you just got to find a solution, and there’s no really like set path, and the people that get stuck are the ones that you know they run into their first roadblock, and it wasn’t in their little protocol sheet on how to deal with it, and then they quit. And so that’s why I really loved your puzzle versus quilt analogy.

Tina: Yeah, one of the biggest problems is that people don’t really deeply think about tapping into their own motivation. I do an exercise, and in fact I would encourage people to grab a piece of paper and a pen or just to say remember this, because it’s pretty simple exercise, but you can do it right now, okay, do you have a pen and a paper?

Steve: I can.

Tina: Yeah.

Steve: I don’t, you know what I can’t walk right now, I’m still like, I still have my torn Achilles.

Tina: Oh no, you can’t walk around, okay.

Steve: I can type though, I have…

Tina: It’s okay, it doesn’t matter, it’s pretty straightforward. Imagine a two by two matrix, a vertical and a horizontal line, a little chart. And on the vertical axis is passion, so high passion on the top, low passion on the bottom. And the horizontal line is confidence, so high confidence on the right, low confidence on the left. So the upper right hand side is things in your life where you’re highly passionate and highly confident. The upper left is you’re highly passionate, but not confident. The bottom left is not passionate and not confident, and the bottom right is highly confident, but not passionate, makes sense?

Steve: Sure, yes.

Tina: Well you’d think it would be super simple to fill this out, and to put things in your life into these categories. But it’s harder than you think because people often don’t even think about the things in their life and how they fit into these boxes of what things they really care about, and their level of confidence in being able to deliver.

But what’s really interesting about it is once you do this, and I really encourage people to do it. It takes a little bit of time, but it’s really well worth it. If you start realizing why are things in these different categories, like what about the things that you’re highly passionate and highly confident, so what would be something for you, you’re highly passionate and confident?

Steve: And confident. Right now I’m feeling pretty passionate and confident about this podcast for example.

Tina: Great, perfect. Do you spend time doing it?

Steve: I do, absolutely.

Tina: Yeah, of course you spend a lot of time, right? So you’re passionate about it, and then that led to your doing it, which has made you confident, right? So essentially you would not be confident if you hadn’t actually been doing it?

Steve: That’s correct.

Tina: Right, your confidence comes from the fact that you’re actually engaged in doing this. But what about things that you’re highly passionate, but not confident, can you think of something there?

Steve: Yes, raising children, I’m not very confident, but I’m very passionate about it.

Tina: Okay, well that might be, I might ask you to come up with a slightly different example because…

Steve: How about teaching children, is that more specific?

Tina: Teaching, yeah, yeah, yeah. You’ll see in a minute why. Okay so let me ask you this, teaching children, so you’re passionate about it, but why are you not confident?

Steve: Because I’m not sure if the tactics that I’m using might have like long-term repercussions.

Tina: Okay, and what would make you more confident?

Steve: If someone blazed the path for me and gave me like some guidelines on what has worked and some statistics maybe.

Tina: Okay, so more information, maybe spending more time actually focused on this?

Steve: Yes.

Tine: The things for most people that are in this category are things like skiing, or singing or cooking or whatever else, and they go, well how do these fit in your life? Well these are things I dream about doing, they’re not things I actually do. And what’s going to change to get it into the upper right quadrant is actually doing it, right? I mean I can say I’m really passionate about anything, but unless I actually do it, I’m not going to become confident.

Now the things in the bottom lower left hand quadrant, you’re not passionate and you’re not confident, how do those fit into your life? I mean what might be an example?

Steve: Of something I’m not passionate about and not confident about?

Tina: Yeah, yeah. It’s hard.

Steve: It’s hard because like if I’m not passionate about it, that means I’m not thinking about it.

Tina: Yeah right. So let’s say maybe water polo.

Steve: Yeah.

Tina: Okay right, so you don’t do it, like if you’re not passionate and not confident, you’re not doing it, you’re not thinking about it, it’s not even in your world. And maybe if it’s something that you really have to do, like maybe it’s you know washing dishes or doing the laundry, you might even choose to outsource to someone else, you might make a deal with your spouse that, you know what, honestly I’m not passionate nor good at this, and maybe you take that and I’ll take something else. So maybe you outsource to someone else, maybe hire someone to do it.

The most interesting quadrant that was the lower right, where you’re highly confident but not passionate, can you think of something?

Steve: I’m not passionate, not off the top of my head.

Tina: I know it’s hard.

Steve: Yeah.

Tina: So the thing that’s so interesting is that most of the things that are in for most people in the lower right quadrant are things they have to do for work. It might be doing spreadsheets or writing reports, or if someone’s at home it’s like cleaning the house, but you realize what is it that has limited their passion for this, I mean at some point they might have been passionate, why is it been lost? And you realize that in this chart, the way to get from the bottom to the top to increase your passion is a change in your attitude, it’s your mindset.

And to get from the left to the right from a change from low confidence to high confidence is your actions, right? So let me ask you Steve, who’s in charge of your attitude?

Steve: You are.

Tina: Yeah, who’s in charge of your actions?

Steve: You are.

Tina: You are, that’s the point, you put things in this chart as if somehow it’s sort of carved in stone, but we are each responsible for understanding and for managing our attitudes and our actions. Now it doesn’t mean that everything in our life should be in the upper right hand quadrant. We shouldn’t be necessarily passionate and confident about everything, but to be very thoughtful about what things we want to have there and to basically say, okay these are the things I’m going to put my energy into. And I think that probably when you’re working with people, you see the same thing is that what’s getting in the way of their success is many times their attitude, and many times their actions.

Steve: That’s correct, but if they’re not passionate — so one question I often get asked is, should I pursue this business if I’m not passionate about it?

Tina: Well okay, this is super interesting question. I love this because people often talk about their passions; I need to find my passion. And it is the wrong question to ask, because passions do not come from nowhere, passions come from engagement with the world. So let me just give you a bunch of examples. I mean it’s not until you’re engaged in the world that you start seeing things that might spark your passion. I tell a story, I don’t know if I told it in that talk that you watched about Scott Harrison, did I tell that story?

Steve: I don’t remember the name.

Tina: Let me quickly tell you.

Steve: Sure, yeah.

Tina: Scott Harrison spoke at our entrepreneurial lecture series, and he’s super impressive guy, started an organization called Charity Water. And they bring clean drinking water to the hundreds of millions of people around the planet who don’t have access to it. Now very impressive guy, but he wasn’t always such. In fact in his 20s, he was a self described loser. He worked in New York, he was a nightclub promoter, and his job was to get people drunk and the drunker he got them, the better, he was really good at this. And one day he became an alcoholic, a drug addict, his life was a mess.

And one day he woke up, he was down in South America and he said, you know my life is a disaster, I am really a loser, I need the opposite of my life. And to make a long story short, he made a decision that he wanted to do volunteer work, and he started writing letters to all of these charitable organizations around the world, and honestly they all wrote back and said like no, you can’t work with us, you do not look like you could contribute. He kept writing letters and finally he was invited to go on and work with an organization called Mercy Ships, where they send doctors on these floating boats to parts of the world where they don’t have access to doctors.

So he jumped at the chance, and he went to Liberia, he didn’t even know, this is important, he didn’t even know where Liberia was. He had to look it up on a map. He went there; he was quickly taken with the fact that so many people there were stricken with horrible water borne diseases. He thought I have to do something about this; I have to do something about this. And so he went back to New York, and using his knowledge of how to promote things, he had been a nightclub promoter, he started promoting the idea of helping people get access to clean drinking water.

And the point is before it is your passion; it’s something you know nothing about. He didn’t know about Liberia, he didn’t know about their water issues, he didn’t know about the diseases. But once he was engaged, he started getting excited about how he could make a difference. And engagement is the master key that unlocks everything; you need to start doing things. And here’s what’s really important, you don’t need instantly to be struck by lightning to say, oh my God this is my passion. You start with a little bit of motivation, like wow, maybe I could do something to help these people, or maybe I could solve this problem.

Tina: My guess is this is true with you in your business, like your wife had a problem trying to sell some of her products, and you thought well you know let me do a little experiment and see if I can be helpful. And like wow, that’s really interesting, you got some really puzzle results, then you got more motivated, am I telling the truth here?

Steve: Yeah, actually the problem was that she wanted to stay at home, and we needed to earn income through a place to sell.

Tina: Okay, exactly and you had like, okay how do I do this? Let me do an experiment, right? And then you go, okay, well that worked, well that’s kind of interesting, let’s try something else. And you kept — your motivation led to some experimentation which led to more motivation and more experimentation, and pretty soon you were so motivated, and you said, okay great, now I’ve got something. And this is a very key part of this invention cycle is understanding that motivation and experimentation process.

I just want to take a moment to tell you about a free resource that I offer on my website that you may not be aware of. If you’re interested in starting your own online store, I put together a comprehensive six day mini course on how to get started in e-commerce that you should all check out. It contains both video and text based tutorials that go over the entire process of finding products to sell all the way to getting your first sales online.

Now this course is free and can be obtained at mywifequitherjob.com/free. Just sign up right there on the front page via email, and I’ll send you the course right away, Once again that’s mywifequitherjob.com/free. Now back to the show.

Back on the axis that you were talking about confidence versus passion, do you actually recommend people look at what they’re confident at but not necessarily passionate about when thinking about something to pursue?

Tina: That’s a really good question, yeah that’s a great place to start. But you don’t have to, because you could go there and say, okay how do I change my attitude about this thing that I’m really good at right. Like maybe I’m really good at cooking, but I’m not really passionate about it. Okay, how can I leverage this? I think it’s probably more fruitful to start in the upper left hand corner, and say, what are the things I’m really passionate about that I’m not confident, how can I build my confidence? Because I think the passion is probably a much bigger driver than confidence.

Passion leads — the reason that you’re confident about your podcast is you started with a little bit of passion, a little interest, which led you then to do, to the behaviors. I think that that’s often the place to start is not your skills but your interests, does that make sense?

Steve: Yeah, the reason I’m asking that question is because in that lecture that you gave, which I should probably link up to after this in the show notes, you had an example of a waiter.

Tina: Oh yeah.

Steve: He might not necessarily have been passionate about waiting, but he figured out different ways of getting higher tips through experimentation, but he was…

Tina: Yeah, yeah, yeah. Yes but what I would say there is — so let me just replay that little story. The idea is that anything — the idea is that you can start anywhere, and this is the point is that you can start anywhere, you don’t have to be in some fancy place, you don’t have to get on a boat like Scott Harrison to go to Liberia. You could be a waiter at a restaurant, and by really paying attention, you’re going to notice opportunities. You’re going to notice, wow people are ordering a lot of gluten free food, or wow you know, how can I get higher tips, or wow there’s one customer here who’s diabetic and has certain needs.

And you could use that small motivation to solve that problem to end up building up to a whole career, right? If you’re just interested in getting higher tips, let’s say you’re just really want to earn more money, and you start becoming an expert on customer service because you’re seeing every single day what experiments you do lead to higher tips, you can then parlay that into you could become a consultant to other waiters, you could start a consulting company, you could write a book, you could make a movie, you could start a whole you know restaurant chain based on your insights.

So it doesn’t really matter where you start, and this is really critically important. But there it was based on again motivation, on my passion for earning some more money that had led me to do some experiments.

Steve: Let’s talk about the experimentation phase. Let’s use that waiter analogy real quick, let’s say this waiter you, he’s been working in a restaurant, he wants to start his own restaurant, and he’s deciding on the menu, right? What are some of the first steps?

Tina: Yeah, I love this. So one of the concepts I talk about in my book is one that I learned from my colleague Alberto Savoy, and he’s just so brilliant. And he started several very, very successful companies, but also had some failures. In fact his first company, they sold for 100 million dollars, the second company lost 30 million dollars. And he thought, wow what happened here? And he realized that oftentimes you are building the wrong it. You might be able to build it right, you know how to build it, but you’re doing the wrong thing, and he realized that you need to do these tiny, tiny little experiments, and he calls them pritotypes [ph].

So with the restaurant, the pritotypes could be super simple. What I would do and what he would recommend is, let’s say you want to put together your menu, just start putting some things on the menu that you haven’t even made, and see if people order them. You can always say, oh out of stock on that. But let’s say I thought, well I wonder if people would order lobster, and lobster is going to be really expensive for me, and I know so I’m going to have to charge a lot of money in my restaurant. I can just put it on the menu and see how many people order lobster, and I go, oh I’m sorry, unfortunately we ran out a lobster, we had all the fresh lobs — we don’t have it, but you know would you like to have some other thing, okay?

And you can quickly get some data. You can do this in so many ways. These pritotypes are such a fun and easy way to get to data about whether your idea works very, very quickly. One of my favorite — can I tell you my favorite example?

Steve: Yeah absolutely.

Tina: Is Jeff Hawkins who happens to be a good friend of mine, and I’m just like his biggest fan.

Steve: Palm Pilot, right?

Tina: The Palm Pilot, he’s the founder of Palm and Handspring. But most importantly he’s a self-taught neuroscientist, and has — is like running a company now called Numenta that is really trying to reverse engineer how the brain works. And when he was starting Palm though, he knew he could build it, he knew that he had the technology to build this handheld device, but he wondered would people want it? I mean really the Apple Newton had failed, so would this be something people want?

So you know what he did? He just made a block of wood, a block of wood, the form factor of a Palm Pilot, and he just covered with a piece of paper, a little sleeve of paper and kind of wrote on it the things he imagined would be on it. And so that was his text, he carried it around for a few weeks to see how he might use this thing. And so once he realized, hey guess what people would actually find this really interesting that he decided it was time to start — go into the next stage just trying to build it.

Steve: I’m just curious, did he have other people like unbiased people carry on the…

Tina: Yeah, it’s a really good question; because it’s a really good question how many people do you have to test it with. And I would argue you would need a lot more people, but I love the idea that you know just the concept that he carried around a block of wood for a few weeks, and wanted to get a sense of like how he might use it. But in a real pritotype you would give something like this to other people as well.

Steve: So you’re implying that you shouldn’t even invest any money into this or anything before you…

Tina: Oh yeah, you should be able in a very short period of time with a very small amount of money. One of the biggest problems is that people fall in love again with their solution, so they spend a lot of time, a lot of money, a lot of resources, a lot of energy building something and only to find out afterwards people don’t like it. But you know a few Google ads, a few you know put up some flyers. Let’s say I want to run a workshop, I can put up some flyers around campus and see if people time often call me. If I get enough, guess what, I’ll schedule the workshop.

Steve: So let’s the reception is positive, like how do I still know whether the idea has legs or whether it’s innovative enough so to speak?

Tina: Say more, what do you mean?

Steve: What I mean by that is, so you’re in the beginning where you were talking about creativity and innovation, and innovation is something that the world doesn’t necessarily have, it’s new to the world, right? How do I know whether the interest is innovative versus just something that’s nice to have, does that make sense at all?

Tina: Well, I think the key is whether people are actually going to buy it, right? People need to have skin in the game, and one key thing that people often don’t realize is I can ask people for their opinion, I can say do you think people would like this, do you think people would like this, would you buy it if I made it? And they go sure, sure. It’s easy for people to say that, but if I actually have to do something, even if suppose giving you my e-mail address, or putting five dollars down, think about you on mask, he the Tesla, he makes people put $5,000, I think it’s 5,000. Put some amount of money, a significant amount of money down before they buy the car.

Steve: I see, okay.

Tina: I mean that is a perfect example of skin in the game. People have to say, yes I want it and I want it so much, I actually will give you some money for it. Then you’ll go build your car.

Steve: Okay, and so if you have – let’s say people are willing to pay you money for this, and you think your idea has legs, what is kind of like the next step, how do you actually take that then, and actually turn into a real company?

Tina: Yeah, so that’s really important. So in each of these stages of the invention cycle, there is an attitude and an action. We talked about that framework, the confidence, and passion matrix and looked at the importance of attitudes and action as well. Attitudes and actions happen in this entire cycle, and I’m going to get to what happens in entrepreneurship in one second. So imagination requires engaging in the world, and envisioning what might be different. Remember we talked about your passions follow engagement, so engaging the world and envisioning might be different.

Creativity requires motivation and experimentation. We talked about that, that a little motivation, a little experiment. Innovation requires focus and reframing. We talked about that looking at problems from a different angle to come up with something really new. And entrepreneurship requires persistence and inspiring other people, okay. So persistence is all the things they teach in all of our other classes, strategy finance, marketing, organizational behavior, leadership, all this stuff. But the inspiring other people is one of the key things; it’s being able to tell a compelling story that engages other people in a really meaningful way.

And that storytelling ability allows you to attract people to your team, attract investors, interact customers, attract people who are going to write positive reviews about your product, all those things that are needed. Because to be successful it’s a barn raising, it’s not an individual effort, you need to get other people as motivated and as excited as you are.

Steve: Can you give us some examples?

Steve: Sure, I give you lots of examples. I have talked to so many entrepreneurs, and they all say yes, this is exactly what I had to happen. So let’s just…

Steve: I guess what I’m getting at is you know, is the product itself good enough, or I mean does it always have to have a really good story along?

Tina: Yes, yes, yes, absolutely. You can have the most amazing product, but if you can’t tell a story that places me in that, you know places me in the story, and allows me to see what the world would be like after this product affects me, you’re not going to sell it. You do this all the time Steve. You have a story to tell that allows people to see how their life can be transformed by using the tools that you deliver, and that you teach. I know that, I mean people are inspired by the vision that you’ve created a future for them.

Steve: I guess it’s just something I don’t really think about specifically.

Tina: Yes, but it’s really helpful. So the story structure I like the most is called the story spine, and it’s a super simple framework. It’s been picked up, and it’s used in many places, it will sound familiar. It’s a little harder to use than it sounds on the surface, and it takes some practice, but here’s an example, super simple. Once upon a time, sounds familiar already?

Steve: Mm-hmm.

Tina: Okay, once upon a time and every day. So now what I’ve done is I’ve set the stage about here’s what the problem statement is. And it doesn’t have to be once upon a time, it could be you know what, there are 500 million people who suffer from debilitating tremors from Parkinson’s like diseases. And every day they struggle with feeding themselves and buttoning their shirt and drinking a cup of coffee, and this is incredibly stressful to them and their families, and I paint a picture of what this is, and then I go, until one day. And that’s where you have your intervention, until one day, and here’s my invention.

And then you paint the picture of all the consequences. You go because of that, and because of that, and because of that, because of that, because of that you can have as many because of thats as you want, until finally and ever since then. So what I’ve done is I paint a picture of a problem, and it could be any problem. Every day, our kids walk to school, and they carry big huge backpacks, and they end up really hurting their backs, and it makes them — impossible for them to study in school, and this is such a terrible thing.

You could pick whatever you want, until one day we came up with a way to put all the books on iPads, and because of that the kids have their information with them all the time, they don’t hurt their backs, they blah, blah, blah. And because of that you know and as a result until finally all kids have their books on these iPads, and ever since then this has become the standard for the way we deliver this.

Steve: How does this model apply to a product that isn’t necessarily have utility value, for example like clothing or jewelry, like how would you frame the story there?

Tina: Well if you think about it, the way that the clothing and jewelry is actually sold, it’s very aspirational. You paint a picture of what your life is going to be like, if I wear these jeans, I’m going drink this Coca-Cola, or wear this necklace, I’m going to be cool, and I’m going to have lots of friends, and my life is going to be better. I mean people buy these things because they actually have some sort of dream and vision of what they’re going to actually do for them.

Steve: Okay yeah, yeah.

Tina: I mean is that true?

Steve: yeah that’s true.

Tina: And so if you look at any commercial, you’re going to see this story spine play out. I could give you some examples that I can send to you that you can put some links of fabulous commercials that tell use the story spine incredibly effectively.

Steve: Do you have any thoughts about how to stay persistent; is this just a mindset sort of thing, like how do you force yourself to stick with something even though it might not be working at the moment?

Tina: Yes, so when you go through the invention cycle of going from imagination to creativity, innovation to entrepreneurship, the mindset piece, the engagement, the motivation, the focus, and the persistence which are the four attitude pieces of it, get harder and harder. I mean let’s not pretend it’s easy, and that’s why not everybody is successful, because that focus and that persistence that requires in the innovation and entrepreneurship stage are really hard. And it’s particularly hard when it’s against in the face of disappointment, when things don’t work, and you have to keep pushing.

But that’s what differentiates those people who are successful from those who aren’t is being able to really muster the grit that’s required to get through the hard times, and also to build the team. And I just want to say, one of the most effective things is to build the team around you to buoy you up, and to help support each other when things are not going well.

Steve: I was just curious like kind on the flip side how do you know when to give up on an idea?

Tina: Yeah, super good question. I get asked this all the time, and it’s something that you know we all have to struggle with internally. Interesting enough many years ago one of the PhD students in our department did her research on when do founders sell their companies. And there had been a lot of research that had already been done about why do big companies buy small companies, but she looked at it from the other — she sort of reframed it, said, let’s look at the small companies, like why do they sell?

And it was always when there was some life event that triggered that. Like you know what, I really don’t want — like I’m burned out, I don’t want to work this hard. Or I just had a kid, or my wife is going to, or husband is going to leave me if I don’t stop working this much. There was something that was going on in their own personal life that led them to make that choice. And that’s true in everything we do, we have to make that choice of how much we want to keep putting into a problem. If you’re passionate enough about it — one of the things I do, an exercise with my students on risk taking and failure, and I go through this whole exercise with sort of giving them the opportunity to put a financial value or a time value on different things.

And I’ll go like how much time would you put into solving a problem that you weren’t sure you could solve, like curing cancer? And it’s really interesting, different people have really different amount of times. Some people say a lifetime, like I would commit my lifetime to this, and other people go, you know four years. People even know in advance how much they would put in, how much persistence and grit they have.

Steve: So would you recommend that people kind of bound their efforts then?

Tina: I think really knowing yourself well enough, and taking on projects that fit within the scope of what you’re willing to give, I mean there are some people who say you know what, honestly my priorities in my life are this right now. I mean so for example your wife wanted she work at home, she probably wanted to stay home with the kids. She probably said, I have this much time to put into my work.

Steve: That’s great, yes.

Tina: And that’s her middle like down this, this is what I can do right now. Or I’m training for a race, and this is how much time each week I can put in to train…

Steve: Actually we gave ourselves two years to see if we could make it go out…

Tina: Exactly, and you go I’m going to go handle to the metal for two years, but you said, I’m not to do this forever. You said, I’m going to see what happens. But it might be something like if you had a family member who was suffering from some ailment, you might say, I’m going to give my life, my entire life to try to solve this problem.

Steve: Right, right okay. Tina we’ve been chatting for quite a while. I know you have another appointment in like five minutes, so I wanted to just end with, Tina where can people find you online, what is your next book that’s coming out?

Tina: Yes, so thank you for asking. I’m easy to find, I’m on Twitter at @tseelig, that’s T-S-E-E-L-I-G, and I also have a website which is just TinaSeelig.com, and I have medium where I blog. So you can find me there at Tina Seelig medium. But I’m super excited; I have a new book coming out in just a couple weeks, on September 26th.

Steve: Oh that’s right around the corner.

Tina: It’s called Rules — yeah it’s called Creativity Rules, and I’m super excited to share it. It describes the entire invention cycle framework with lots of examples and also some assignments at the end of each chapter that leads you through the process.

Steve: And Tina is an excellent teacher, she was my professor way back in 1999. Entrepreneurship can be taught, and hopefully we touched on a bunch of the things that are necessary for you to get started. I highly recommend Tina’s — I’m going to link up her speech which is podcast based which was excellent. She’s an excellent public speaker, and she’s an excellent writer as well. So I highly recommend that you guys go check out the book.

Tina: Great, thank you so much, it was really a pleasure, and looking forward to seeing you again soon.

Steve: Yeah thanks a lot Tina, thanks a lot for coming on the show.

Tina: You too.

Steve: Hope you enjoyed that episode. Now I owe so much to Tina, it is actually her class that I took back in the day at Stanford that actually gave me the courage to start my own business. Anyway do yourself a favor, head on over to mywifequitherjob.com/Tina, that’s T-I-N-A, and go pick up her book. It’s called Creativity Rules: Get Ideas Out of Your Head into the World. I’ve read it myself, and it’s a great book if you have ideas and don’t know where to start with your business.

I’ll also be giving out copies to anyone who purchase my online store course and pays in full until October 1st. For more information about this episode, go to mywifequitherjob.com/episode180.

And once again I want to thank Seller Labs. Their tool Scope has completely changed the way I choose keywords for both my Amazon listings and my Amazon advertising campaigns. Instead of making random guesses, Scope tells me exactly which keywords are generating sales, and within the first week of use I saw a 39% increase in sales. It is a no brainer. So head on over to Sellerlabs.com/wife and receive $50 off. Once again that’s sellerlabs.com/wife.

Now, I also want to thank Klaviyo which is my email marketing platform of choice for ecommerce 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 auto pilot. So head on over to mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

Now I 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 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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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!

179: How To Scale Your Facebook Ads To Sell Digital Products Online With Rick Mulready

How To Scale Your Facebook Ads To Sell Digital Products Online With Rick Mulready

Today I’m lucky to have Rick Mulready on the show. Rick is someone who I met at Social Media Marketing World while waiting for a gigantic mob of people around Amy Porterfield to dissipate so we could say hello to her.

He’s a Facebook ads specialist and helps small business run profitable Facebook campaigns. He’s also runs a popular podcast called the Art of Paid Traffic and a training class called The FB Advantage. Enjoy the show!

What You’ll Learn

  • Where to begin when launching a Facebook ad
  • Some guidelines for setting up a a high converting campaign
  • How to choose an audience
  • How to test your creatives
  • Best practices when running Facebook ads.
  • Sample metrics to reference as you run your ad campaigns

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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Ignite.Sellerlabs.com – If you are selling on Amazon and running Amazon Sponsored Ads campaigns, then Ignite from Seller Labs is a must have tool. Click here and get a FREE 30 Day Trial.
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Kabbage.com – If you run a physical products based business, sometimes you need a short term loan to buy inventory to meet demand, especially during the holiday season. Kabbage helps small business owners access simple and flexible funding right away. Click here and get a $50 Visa gift card upon signup.
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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 are 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. Now today I’m thrilled to have my friend Rick Mulready on the show. And if you’ve never heard of Rick, he is a Facebook ads expert. So I’m going to pick his brain on how to use Facebook ads to sell digital products online.

But before we begin I want to give a shout out to Klaviyo who is also a sponsor of the show. Now I’m always excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I actually depend on them for over 20% 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 which allows you to do many things. So let’s say I want to send an email out 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.

Now 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 I also wanted to give a shout out to my other sponsor Seller Labs, and specifically I want to talk about their awesome Amazon tool, Scope. Now if you know me I get really excited about tools that I like and use, and Scope is actually a tool that increased my Amazon sales on several listings by 39% within the first week of use, crazy, right?

Now what does this tool do that could possibly boost my sales so quickly? Well, quite simply, Scope tells you what keywords are driving sales on Amazon. So here is what I did, I searched Amazon and I found the bestselling product listings in my niche, then I used Scope to tell me exactly what keywords that bestselling listing was using to generate sales. I then added these keywords to my Amazon listings and my sales picked up immediately.

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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 lucky to have Rick Mulready on the show. Now Rick is someone who I met at Social Media Marketing World, and it’s actually pretty funny how it happened. We were both standing around waiting for this gigantic mob of people surrounding Amy Porterfield to disappear so we could actually just say hi to her. And while this huge crowd was mobbing Amy, Rick and I we just kind of met and started chatting, and I’m really glad that we did.

Rick is Facebook ad specialist, and he helps small businesses run profitable Facebook campaigns. He also runs a popular podcast called The Art of Paid Traffic and a training class called the FB Advantage. And yeah, Rick is very knowledgeable about Facebook ads, and he actually also spoke at the conference. And with that welcome show Rick, how are you doing today man?

Rick: I’m doing great Steve, thanks for having me on man.

Steve: Yeah, wasn’t it crazy like we were waiting like 30, 40 minutes [inaudible 00:03:50].

Rick: I’d love to give her; I’d love to give her a crap about that. She always has a big mob of people and you described it really well, that’s exactly how it happened.

Steve: So Rick give us the quick background story, and tell us kind of how you got started with Facebook ads.

Rick: Yes I’ve been doing online advertising for about 17 and a half years now, actually a long time.

Steve: Wow

Rick: And started back in a while back when the dial up days were going strong and AOL was sending CDs out in the mail to get you online, and that was my first sort of exposure if you will to online advertising on a big scale. I spent five years in well back in starting in 2000, and then came out here to the west coast. So at AOL I was on the operations side, so I ran some of the operations teams who were — we were implementing all the online advertising deals that were being sold.

So I got to see a really unique side starting out on that end of online advertising. I got to see it from the back end if you will, and then came out here to the west coast and I spent a couple years at Yahoo where I moved more to the client facing side. So I did campaign management, and worked with the clients in the ads, the campaigns that they were doing, and then also got into sales at that point. And then I was in online ad sales for the rest of my time in the corporate world.

So I was at Yahoo for a couple of years, spent time at Funny or Die doing video and stuff like that, yeah and then also worked for a company called Vibrant Media which is a textual advertising platform. And sort of during this time there was a kind of a shift going on where all these big brands, all these companies had like these minimum advertising spends that companies needed to hit in order to work with them. And it makes sense because there’s a lot of resources that go into working with an account, the Yahoo or AOL or whatever company it is.

And that minimum spend is often too tight, too often too high for many small businesses, you know it makes sense. And so I saw this going on and this is right around the time, right on 2010, a little over seven years ago. This was at a time when Facebook was starting its meteoric rise, and really started to gain traction and you know small businesses — this is back when you could post something on Facebook and all your fans were able to see it.

Steve: Oh yeah.

Rick: And so the good old days.

Steve: Good old days, yeah.

Rick: Yeah and so I started seeing what was happening here for the opportunity that small businesses had on there on the platform, and not only to build a community of fans and people who like the business, but also the opportunity to advertise in a very targeted way because all these people were on the platform, and Facebook was getting — was starting to get really — starting to get sophisticated with the data that it had available. Not like today of course, but it was starting to get more sophisticated. And because of my background in online advertising, I naturally gravitated towards that side of Facebook.

So I was like you know what I’m kind of thinking about leaving the corporate world at some point, I’d like to start doing my own thing. I didn’t know what that was, but because I was so interested in the Facebook ad side, I kind of dive — I dove in at that point and started teaching myself as much as I possibly could about Facebook ads, this is seven and a half years ago. There was not a whole lot out there of learning about Facebook ads and how you do this.

So it was kind of like find what you could and then just dive in and start doing it. So that’s what I did, and I started managing ads for some friends who had online businesses and so forth just to kind of get more and more experience with that. And I was really the star. I left the corporate world at the end of 2012 to focus full time on doing this as a business, and it really — it took me a good year and a half after I left the corporate world to gain traction as a “Online entrepreneur.”

Steve: So you were making any money when you quit?

Rick: Very little bit, very little bit.

Steve: Oh wow, okay.

Rick: Yeah and so when I quit it was one of those — I look at that as if you’re in the corporate world and you’re looking to leave the corporate world, or leave your day job if you will to do something else, I kind of look at it as you’re going to fall in one of a couple of categories. You’re either going to be your side gig or whatever you’re doing is going to equal your day job income. And so I was doing really well, I was making a few hundred thousand dollars a year doing that, so I wasn’t necessarily coming out of the gates making or equaling that.

The second, I was in the second phase of that would be if you have that side gig and you are bringing in some money, and it’s not equal to your day job but it is looking pretty consistent, and you’re growing that. Or you just make the jump, you just like you know what, I’m going to go for it and this is going to work out. I kind of fell into sort of that second and third way if you will where I was like you know what a couple things I need to have happened is I need to have a big safety net, and I also want to be out of debt.

And so I at the time I was $75,000 in debt and — not at the time I left, but I was $75,000 in debt those last few years in the corporate world. So I got out of debt, I built up a big savings and it was like you know what, let’s do this. And so that was in the end of September 2012, and for the next year and a half it was a really, I fumbled around really trying to make this work on a consistent basis. And you know [inaudible 00:09:32] you know this whole thing.

I was doing it myself and things weren’t really working. And it wasn’t until really January 2014 that things really started to take off when I created a Facebook ads training program, and I used Facebook ads to sell that that training program I did webinars and stuff like that. That was supposed to be a short answer; it turned out to be a long answer.

Steve: No, no, no, and the reason why I’m always curious is it took me 17 years to quit my job, and I still kind of on the fence on whether it was the right decision believe it or not. It was never because of the money, it was always because of like the people that I was working with, and the nature of the fact that I studied, microprocessors, that was my thing for so long, and I gave it up. And like that whole side of my intelligence and career is now over with, so I’m still trying to get over that, but…

Rick: It makes sense.

Steve: So Rick what I was hoping to do today is actually run through a complete example of how you use Facebook ads to kind of build up an audience, and so this is your product. And we were talking earlier about your clients who are doing this and this is kind of how you got started with webinars and selling your stuff?

Rick: Yeah.

Steve: So on a personal level at least; I’m sure that I’m not doing everything correctly. And so I’m curious to see how a seasoned pro runs things. So let’s start from the top, shall we?

Rick: Sure.

Steve: Where do you begin? So let’s say I go up to you and say, hey Rick I got this course, I got a small audience, I got a little bit of content, maybe a blog, what are the first steps?

Rick: First thing that I’m going to ask you is you said you have this course, I’m going to want to know what you’re trying to achieve, like I have — always the first question I ask people is why? Why are you doing what you’re coming to me talking about? And a lot of that unfortunately a lot of the time people say, well I keep hearing how great Facebook ads are, I have friends who are using them in their business, so I just figured I’d start using them as. Well I applaud you for that, but that’s not a good enough reason because you got to go into Facebook ads with a strategy, what is the goal I’m trying to achieve.

So if you’ve got an online course, so let me ask you Steve is that course in this hypothetical situation is already created, or do you have a course sort of in mind that you’d like to create?

Steve: Let’s say it’s already created.

Rick: Okay cool. So you have this course now, and like all right how can I promote this course? The next question I’m going to ask you is who is your target audience, who is the ideal audience that you want to target? And you’ve got to have a very, very specific knowledge of who that person is. And I say have a specific knowledge; just know that that’s going to be evolving. Like you know I have been doing this a long time now, my ideal audience is always evolving, I’m always looking at, okay I understand who it is, but there’s always iterations if you will of that audience that I can understand more, or create a better “avatar” of who that person is that I’m trying to reach, and who I’m trying to reach might be different from product to product that I have.

Steve: Sure.

Rick: And so I want to make sure that I understand that so that I can speak to specifically those people in my marketing, in my advertising. And when I say advertising and marketing, I’m talking not only Facebook ads, but also the emails that I’m writing or on my landing pages, on my sales pages, that sort of thing. And so if you’ve got the course, all right cool, you’ve got a very clear understanding of who your target audience is…

Steve: Let’s say I don’t know who my target audience is, like how do I figure it out?

Rick: Yeah, I would at that point look at, okay what is the problem that you are solving with that course, what is it that — what business or what niche are you specifically in that you can help somebody with? And then once you understand that look at, okay, who are these people, what’s their demographic, what’s their age range, are they men or women, what are they interested in? This is one of those things where people get really sort of tunnel visioned if you will, and I like to use the example of if I’m in the yoga niche. And so I know that I probably want to be reaching women between let’s just say I don’t know 25 and 45, let’s just say.

That’s my primary people — women between 25 and 45 who have an interest in yoga. That’s kind of the obvious one. So most people would kind of stop there, maybe they’re interested like in maybe Pilates or something like that. You’ve got to take a step back and think about, all right what are they also interested in, what are they reading, where they shopping, what are they watching? Those types of things. So for example, if I’m trying to reach those women who are inside yoga, yes I do want to target people who target women who have an interest in yoga. But also they might be reading Yoga Journal magazine, maybe they’re shopping at Lululemon for their clothing or Lorna Jane or something like that.

Maybe they’re shopping at Whole Foods, you know taking a step back and looking at the big picture of what your target audience, who their target audience is and what they’re interested in on all different types of levels. Again where they’re shopping, what they’re reading, what they’re watching, that sort of thing.

Steve: And where they’re hanging out and that sort of thing?

Rick: Absolutely.

Steve: Okay, got it.

Rick: Or it could be yeah it could be are they attending conferences, are there associations that they might be a part of, that sort of thing. And this is where I say getting a really clear picture of who your target audience is and who you want to be reaching. And so once you have an understanding of that, then we want to look at, oaky what is the strategy that we’re going to use? Remember we haven’t even set our Facebook ads up at this point.

Steve: Right yeah right.

Rick: We haven’t even guided the system yet, and most people are just like, all right I want to do Facebook ads, let’s jump in and start setting stuff up. All well and good but you’ve got to do this sort of pre-work upfront if you will, and this is the hard work I like to say that no one really wants to do. But yet when you do this work, this is what sets you up for success with your Facebook ads, you know having a clear understanding of why you’re trying to achieve what you want to do, who your target audience is, how you’re going to be serving them, and then what’s the strategy there to start selling that course. Okay so what’s the initial offer going to be?

And so let’s just say that if you have an online course, let’s just say in our example here that we’re going to do a webinar. And so we’re going to do a webinar, so we in the very most simplistic sake, let’s say one strategy could be we’re going to run Facebook ad to a webinar. So we’re going to do a live training and then on that live training we’re going to offer our program to people, and then we’re going to have – let’s just say we’re going to have a close date after that. So we’re only going to offer our course for a certain period of time. Okay cool, that’s one strategy.

Well another strategy that we could do is we could run a Facebook ad to a free piece of content, and that could be a blog post. You mentioned Steve that this person, this hypothetical situation has — they have a blog and they’ve got some content there. Well we could send people from the Facebook ad to that piece of content, and on that blog post, on that video or whatever, that may be there is an opportunity to register for a webinar. And for those people who land on that page, consume the content but don’t actually register, they don’t opt in, we can retarget them to get them to opt in to that webinar.

So our goal here is to get them on that webinar, and we’re doing that a couple of different ways. And so having that clear picture of, okay what is the strategy going to look like beginning with what’s the offer that I’m going to be doing? In this case here in our hypothetical is our offer is going to be that webinar. And so from there, then it’s really like, okay what are we going to be teaching people?

Steve: So let’s back up a little bit. So you mentioned a bunch of different strategies, or two different strategies right there. Like how do you know where to start, or you do actually try to implement both and see what works well, like the content play versus just direct webinar sign up?

Rick: I mean ideally you do you want to be doing both, but that can be really overwhelming for people to say, oh I have to do all this in order to get going. I mean the easiest thing that you can do, and it’s going to be most likely a little bit more expensive these days is to run an ad directly to a webinar registration. And so like, all right, maybe I do — I know I want to test both of these things, but let’s start with this first.

So we’ll get this final set up, we’ll get this strategy in place, and then we can look at, okay, maybe we send Facebook ads then to that free piece of content to try to get them eventually over to the webinar. But let’s just start with the first thing, getting that done.

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Can we set some expectations also, like I know this is going to be too broad of a question, but like how do you calculate what you should be spending per lead on the webinar and that sort of thing, and what you should expect?

Rick: Great question. So everybody wants to know like, well what should my cost per lead be, how much should I spend on my Facebook ads, right? So allow me start with the how much should I spend on my Facebook ads. The first one, like I look at that as sort of a two ways to answer that question. Number one is what can you afford? Like the easiest is like if you’re just starting out, what kind of budget can you afford? You can be getting results on as little as say five to ten dollars a day. So you really don’t need to be spending a whole lot of money in order to get some results going.

And the idea with Facebook ads and really with any kind of paid traffic is start off. I mean if you’re just starting out, start off small and then sort of snowball. So as you start making money and getting some results, putting it right back into your ads. So maybe start off spending $10 a day, you’re spending $300 a month. But then once you get into it, you start making some more money and you put it back in. Before you know you’re spending $500 a month and $700, $1,000, just kind of snowballing that and letting that build.

So I’d start there, is what can you afford, what will your budget allow. And in the longer term answer there Steve as far as like how much should you spend on your ads, it’s really doing this for a little while, and starting and really tracking everything that you’re doing. So how much money that you’re spending on your ads, what’s the revenue that you’re making coming out on the back end, figuring out what your ROI is so that you can eventually get to a point, and you can get there pretty quickly is by watching the numbers, you can know, okay for every dollar that I put into my Facebook ads, I’m getting two or three or five dollars back.

And so then it becomes very easy to figure out how much you want to spend, because you’re like, all right well I know pretty much from what I’ve been seeing in my campaigns, I know that for every dollar I put in, I’m going to get two dollars out, so let’s just start spending on that. And of course that does align with what your budget is as well, but you do need some obviously historical numbers there, you need some experience doing this for a little while before you can say, okay, I know exactly – I know roughly, I never want to say exactly, but I know roughly how much money I can put in and get back out.

Steve: So at the beginning, there’s just too many variables, right? Like the effective – so the webinar, the product also comes into play. So from what I gather what you’re saying at the beginning is just spend a little bit of money, get some leads, actually run your webinar and get some data and then over time with enough webinars, you’ll get an idea of what your ad spend is.

Rick: Absolutely and you bring up a great point there Steve is that you can’t go into this stuff thinking with the mindset of, this is going to work tomorrow, like this is going to work overnight. You have to go into it with knowing that it could work, like right out of the gate, so you could be seeing success right out of the gate. I was very fortunate, now granted it took me 15 months to get there. But I started running my first webinars in January 2014.

I did $30,000 in 45 days, and so things were successful very quickly. But you know this is all testing, this is all figuring like trying different things out to see where the sweet spot is, and also or where the sweet spots are I should say, and then also again figuring out your numbers so that you can start making more educated decisions. But that’s a big thing that people sort of get hung up on.

And I would say easily what separates people who are successful with Facebook ads and really any kind of paid traffic is those people who have the mindset of, well I’m going to go into it, I’m going to start testing different things out, I’m going to spend a little bit of money to see what works and what doesn’t, and I’m just going to be flexible here. I’m going to try different things until I find what works, and I’m not going to give up after the first 30 days if things don’t go my way.

And I see that all too often when in fact it’s those people who are getting to that point, and they’re like you know what things are not working, I’m trying different things. It’s the people who stick with it just past that point where they feel like giving up. Oftentimes that is when things really start to click for them.

Steve: Okay, so far we’ve talked about an audience; we’ve kind of made an educated on the audience. And then we decided we’re going to do a webinar. Let’s talk about the creative a little bit, like how do you structure that?

Rick: Well that really goes — so when you’re putting your ad together, whether it’s the image or if you’re doing a video and the ad copy, so when you’re putting your ad together, it really goes back to who is that target audience that you’re trying to reach. And so let’s just say that you are trying to reach your – I’ll go back to the yoga example, and let’s just say that you have a product that is you’re teaching I don’t know — I don’t know how much…

Steve: I don’t do Yoga either, but…

Rick: Terrible example for you that I’m bringing up here. But let’s say there’s different levels okay, but I’m teaching all this in here. And so I need to be able to speak to the people who are at different levels. And so the conversation I’m going to have with a beginner is very different than what I’m going to have with the more advanced type of person. And so that’s why it really comes down to understanding who your target audience I,s and then are there sub-segments of people within that target audience, so that I’m going to have different conversations with those people, right?

Likewise, if I’m targeting people who have an interest in Yoga Journal magazine versus people who shop at Whole Foods, that’s probably going to be a little bit of a different conversation there. And so when you’re putting together the ad, whether it’s the image of the video and the ad copy, you need to make sure that you’re speaking directly to that person within your target audience. And so you know people get hung up on the images and so forth, or a video. Right next to me right now I’m actually just picked it up is my iPhone.

One of the best things and one of the easiest things that you can do is just start taking pictures that you find that might be relevant to your specific niche and your specific business. Same thing goes for video. If you’re doing video that you want to do a video ad on Facebook, you don’t need to hire this big production crew in order to do it. You could be doing Facebook live, or you can be just getting in front of your Smartphone and start taking video.

But you do want to make sure that whatever image that you’re using or video that you’re doing is relevant to the audience that you’re speaking to, and obviously you can try to convey the message that you are trying to get across with that. Now…

Steve: Do you recommend videos now over images? At least in my experience, videos just tend to have a lot more engagement than just images these days. So I was just curious what your experience has been there.

Rick: Yeah video does really great. I would never say only do this over this, I’m always going to say test both. But there’s a few different benefits of video, actually lots of different benefits. Number one, the kind of connection that you can make with your target audience is I mean with a video, I mean they get to see you, they get to hear you, they get to watch you. So you can create a connection with your ideal audience that you can’t necessarily with a standard image ad. Video gets higher play with on Facebook because Facebook has really put an emphasis on video in the newsfeed, on the platform in general.

The other thing that you can do is you have an amazing opportunity to create what they call engagement audiences based on how long people are engaging with your video. So you can say, well if I have people who are watching 75% of my video, that’s a pretty engaged person, versus somebody who’s only watching say 25% of my video. And so we can go down a big rabbit hole here, but so you can build these audiences, you can build look like audiences out of these people who are watching these videos. So video is a really, really powerful tool to be to be using.

Steve: So let me ask you this, so assuming we have the creative and then we have the audience, like our best guess audience, and we’re driving to a webinar landing page. So let’s say we hit go and it’s running, like how long do you let it run before making a determination? How do you decide which creative is working and what is not working, like what are some of the metrics involved that you use?

Rick: Great question. So one of the biggest mistakes I see people make is that they make a determination on their ad far too soon, and you really got to give it at least, let’s just say at least three days. I mean we’re talking 72 hours from when you start your ad before you make any kind of determination. And it’s the hardest thing for people to do. So like if you start your ad — let’s just say you start your ad at six o’clock in the morning, you know people you’re there watching it at ten o’clock. You’re like what’s the ad doing, like what are the numbers really, what’s going on here? And it’s the hardest thing.

So what I like to say is when you schedule your ad, let’s just say you started the next morning, just check in with it when you get up to make sure that it is running, and that it’s active, and then the hardest thing you have to do is just leave it alone. You got to let your ad get into Facebook’s algorithm if you will, and let the algorithm do its thing for you, and so at least three days before you start making any kind of changes to your ad. I like to try and get the reach if I can depending on what kind of budget I’m amusing to about 1,000 again before I start making any determinations there, and generally that will happen over — and again it depends on what your budget is, but generally that will happen over those three days.

Then you can take a look and go in and start to diagnose what’s going on with the ad. And the first number I like to say that you look at is whatever your objective is. So in this case here in our hypothetical, we’re trying to get people to register for a webinar. So I want to see what is my cost per registration, what’s my cost per lead? And everyone always wants to know what’s a good cost per lead here? That’s always going to depend on — it just depends on what niche that you’re in, what your offer is. Going from an ad to a webinar registration is likely going to be more expensive than if you go from an ad to a PDF, a free cheat sheet download sort of thing.

Steve: Sure.

Rick: So it really depends. People are saying, well Rick just give me a number. For most people who are doing the online course, I would say try. If you’re under $8ish, you’re doing pretty well.

Steve: Interesting, I think it depends on the course or class too, like I remember when I was doing this for my class, I made an estimate of how many registrants would show up and estimated the conversion rate. And I determined that my breakeven point was like twelve and a half bucks.

Rick: Yes and that, again that goes back to figuring out how much you should spend on your ads because what they have this number called earnings per lead that you can figure out. So it’s like okay I brought in this many leads, and then I did this much in sales. So that will help you determine what your earnings per lead is so you just divide the amount of revenue that you made divided by the number of leads that you brought in, and that will give you like you said Steve that twelve dollars and fifty cents let’s just say.

So then you can start to say, okay, well for the next one, based on this last campaign that ran, I can probably spend up to twelve dollars and fifty cents per lead before I’m losing money on that. And again that just means that you need data in order to make those decisions. So once I looked at that metric that most aligns with my objective here, so in this case here it’s we’ve figured out what our cost per conversion is, then I’m looking at what I like to call troubleshooting numbers.

And so then we’re looking at what’s the conversion rate on the landing page? What is the click through rate on the ad? What’s the relevance score which is at the ads level by the way, what’s the relevance score of this? And if your ads have been running a little while, what’s the frequency? So like you’re using these other numbers to help you diagnose what’s going on with your Facebook ads campaign.

Steve: Interesting, so what relevancy score do you typically recommend?

Rick: Well it’s a one to ten scale, and basically we don’t know everything that goes into the relevance score. But it’s safe to say that Facebook is looking at how relevant is this ad that you put together that you’re showing to the target audience that you have, that you set up? So how relevant is this ad? Facebook wants good content on the platform, and so this relevance score is a scale of one to ten, ten being the highest. So the higher the relevant score, the lower cost you’re going to have, and the more of a higher delivery reach that you’re going to have with that ad, because again Facebook sees that as, oh this is a good ad, I’m going to show this to more people, because it’s a higher relevance score there.

So if you’re in that seven –now this is going to be again some general generally issues that we’ll make here.

Steve: Of course, yes.

Rick: If you’re in that seven to ten range, you’re doing really well on the relevance score. If you’re in that four to six range, sort of obviously middle of the road there, I’d keep an eye on it, and then generally if you’re in that one to three range, again probably need to look at changing things up. Now relevance score is one of those stats that it’s really hard to pinpoint, okay go do this, because the relevance score has to do with the ad that you put together and the target audience that you are targeting.

So it could be things with the ad, it could be things with the audience that you have set up there. So it’s just a matter of starting to look at each of those different things to figure out, okay what are some changes that I might be able to make to improve this relevance score. Now I see a generality with that on the one to ten there. If you’re in that four to six, I’ve actually seen lots of ads that are doing quite well with a really good cost per lead that are like a three relevance score.

Steve: Interesting okay.

Rick: Yeah. So in that case there I would probably say, okay well my ad looks like it’s doing pretty well, I’m pretty happy with it, the cost per lead is I’m not too unhappy with it there, I’m going to let this run for a while, and just keep a close eye on it.

Steve: Do you have any click through rate guidelines?

Rick: Yeah, I like to see at least above one percent or above, and if you’re in that maybe like let’s just say 0.85 to 1%, you’re not — and here I am saying 1%, but if you’re right around that, again I would say look at the rest of the stats just to try to diagnose what if any changes that you might want to make to that. But I would say try and be at least 1% and above. Likewise on the conversion rate on the landing page, now this is not a sale by the way, so different from a sale. If you’re sending people to an opt-in page or registration page, I’d like to see that conversion rate at least 20% on that landing page.

Steve: Okay, any special guidelines on the landing page that you recommend or tools that? Do you just have people use Lead Pages or Instapages?

Rick: Yeah exactly. I use Lead Pages every day in the business, and so Lead Pages is great, ClickFunnels, Instapage. Use a tool that makes it super simple to create a landing page. They run all these tests, all these tools like Lead Pages or ClickFunnels for example, they run all kinds of tests, they know what’s working and what’s not, and so they’ll just give you these templates, they’ll make it available to you, that you can go in and quickly create a landing page that you can use.

Now I will say, you said as far as I got any special things to be thinking about, make sure there is consistency between the ad that you’re running and the landing page that you’re sending people to. There’s nothing worse than — think about how you would react if clicked on an ad, and you go this landing page and it looks nothing like the ad that you just clicked on. You’re like, am I on the right place here? Make sure there’s consistency there. That can greatly affect the conversion rate on that landing page.

So if you’re using an image in your ad for example, try and have that same image on your landing page. Or if there’s a headline that you’re using or words that you’re using copy you’re using in the ad, make sure that that copy and that headline is the same on the landing page as well. Or a color scheme, that sort of thing. Make sure there’s consistency between the two things.

Steve: Okay, can we talk about the campaign structure real quick. Like do you separate out each audience in different ad sets, and then how many creatives do you use like when you’re doing split testing?

Rick: Yes, so I’ll start with the audience question, and this is something that has shifted over the past let’s just say eight to ten months for me, because it used to be that we only put one target audience per ad set. And the reason for that is because Facebook in its reporting doesn’t break — if I put multiple targets within multiple target audiences within one ad set, Facebook isn’t going to break out which of those target audiences is performing the best for you, or performing the worst. So there is limited visibility there.

Now what we’re doing now, and we’ve been testing this is that we are now combining multiple interests, so cold audiences meaning other Facebook pages for example into one inch, into one ad set. And the reason for that is we’re trying to get that potential audience size up between say 500,000 and 2 millionish people. And the reason for that is we’re trying to give more data to Facebook’s algorithm. That algorithm has gotten very, very smart, and so this algorithm is sort of what’s sort of running in the background on your Facebook ads, and it’s what’s trying to get your results.

Facebook wants us to succeed, because what happens when we succeed is we’re going to spend more money. So Facebook does want us to succeed, and so the more data that we can give to Facebook to work with, the better. So that’s why we’re trying to get that audience size a little bit larger, and thus we’re combining interests within one ad set. Now when I say we do that, really think about combining similar interests. So let’s just say for example, I don’t want to target — I wouldn’t target Whole Foods and Yogurt Journal in the same ad set necessarily, because those are two different types of things.

Or if I’m targeting newspapers, I’m going to target Wall Street Journal and New York Times and whatever in the same ad set, because those are similar interests. So try to combine similar interests within one ad set. Then when we’re talking about warm traffic or warm audiences like our email list or our website visitors and stuff like that, we will look to combine those into one ad set. Again depending on — it all depends on how big that is for you, but we will combine those into one ad set again to try to increase that potential audience size.

Steve: Interesting, how did you come to that determination?

Rick: Just testing, it’s because the longest time is that for the longest time we were just putting one interests or one target group within the ad set. Let’s just say, okay now our audience size is like 60,000 people, let’s just say in this one ad set. Okay great, but we can kind of tap through that audience pretty quickly because it’s not that large. But then if we start combining it with two or three or four other interest there, maybe now we have like a million and a half people in the audience. We’re never going to reach all those people, but we’re getting data, we’re getting more data for Facebook’s algorithm to work with.

And when we’re using the Facebook pixel and we’re looking for these conversions and stuff like that, the algorithm is learning. So it’s learning the type of conversions that you’re getting, and then once it’s learning, it’s looking for more people like those people who are converting, and will show your ad to those people. So again it’s all about giving more data to the algorithm. And then to answer the question about split testing, the biggest thing I see that — the biggest mistake I see people make is that they get started and they start, they’re like okay I know I need to split test, I’m going to have ten different ads running.

And it’s like they don’t know what’s working and what’s not working. And so it can be very overwhelming if you kind of — you can lose track of that really quickly. Now the other thing that we don’t like to do, and again this is over, we’ve been testing this for about two years now. We just don’t get the results that we would hope that we get is we don’t put multiple ads within one ad set, and the reason for that – let’s just say I put three ads within an ad set, Facebook’s algorithm is set up to rotate those ads through and find out which of those ads performs the best for you, and sort of do that testing for you.

But what we’ve found is that it “declares a winner,” way too soon. So for example if I start my ads let’s say like six o’clock in the morning, within a few hours it has identified one of those ads that is performing the best, and it gives all of its like I’ll just say delivery love to that one ad, and then very little love to the other ones. When in fact like it happened too fast, when in fact those other couple of ads that you have running in there, they really could be actually good ads, but they just didn’t give –Facebook’s algorithm just didn’t give it a chance to run to actually truly see if they’re doing pretty well.

And so what we’ll do instead is we’ll actually break those up. So we’ll do one ad set with one ad, and then identical ads set we’ve had and we’ll split test another ad. And again it’s not a true 100% split test, but it’s more we’re trying to run it more evenly to now we can see which ad is performing better.

Steve: I just want to take a moment to tell you about a free resource that I offer on my website that you may not be aware of. If you are interested in starting your own online store, I’ve put together a comprehensive six day mini course on how to get started in e-commerce that you should all check out. It contains both video and text based tutorials that go over the entire process of finding products to sell, all the way to getting your first sales online.

Now this course is free and can be obtained at mywifequitherjob.com/free. Just sign up right there on the front page via email, and I’ll send you the course right away. Once again that’s mywifequitherjob.com/free. Now back to the show.

Okay that’s a great tip. And then in terms of — so you wait three days and then do you immediately cancel the ones that aren’t doing as well, and just try to narrow down to one high performing ad?

Rick: Well I mean it really depends on how many we’re running here. So let’s just say that I have 25 different ad sets running. So I’m doing 25 different groups of targeting and I’m trying to see which of these is performing the best, I’m trying to figure out which ads are performing the best. We might end up with six ad sets that are better performing the best, and that’s what we run with, and we’re always trying to beat that best performing ad.

But it really depends on how many ad sets that you’re running and that sort of thing, but it goes into, all right after three days jump in your campaign, start to see what’s going on there and looking at what’s performing and what’s not performing, and really try to start to see like you’re going to have definite outliers, like you’re going to have things that just are not performing well at all for you. In that case there, okay cool, maybe we shut those off. Well while other ones they’re performing really well for you, then we start to scale those ads, and we want more of those good results.

And then you’re going to have sort of those sort of the middle tier if you will of ads that are — they’re not terrible, but they’re not really good either as good as your good ones. Well, what kind of changes can we make to those in order to try to improve those results? And then that goes back to looking at the stats that we talked about before.

Steve: Okay, so everything we’ve been talking about has been top of funnel so far. Can you talk about your middle of the funnel and bottom of the funnel, what that looks like?

Rick: Yeah so for sure. I mean the cool thing about Facebook is unfortunately too many people, and here we are actually talking about a webinar campaign which is you’re looking to get quick results. You’ve got to look at Facebook ads as a long term play. It’s you’re building — because Facebook is not like Google where people are physically searching on something, and you can just show an ad and then it’s relevant to what they just searched on, Facebook is more of an interrupted experience. Like they’re on there to share with their friends and family, look at a cat photos and stuff like that.

So whatever kind of ad that you’re showing needs to get their attention, always needs to be relevant to them, and really need to be focused on how you can be helping those people. And so if you think about it from that perspective, like all right, you know what, I’m going to come on to Facebook here, I’m going to play the long game, I’m going to provide value to attract my ideal audience. Then at the top of the funnel there, we could be going like providing free content and sending people to free downloads and free content videos and stuff like that.

Then we can move people further in that middle of the funnel there like we just talked about with the webinar and that sort of thing. Again we can start right there with the webinar if we want to, but again thinking about what is the long term play here? And then as we move further down the funnel, then we get into the more sort of advanced stuff with retargeting, and we can use — Messenger ads are all the rage right now on Facebook, and how can we use Facebook ads to have a more deliberate conversation with people to move them from, you know what I’m really not sure about buying this or enrolling in this or signing up with this service or whatever it is, to how to actually moving them to the sale.

So how can we use Facebook’s retargeting, how can we use Facebook’s engagement retargeting, how can we use Facebook’s Messenger ads to have actual conversations with people, to move them from maybe up there on the fence to having an actual purchase?

Steve: Yes, so Rick in my experience, and I don’t have a whole lot of clients, I just run the ads for myself. I discovered that running ads is just like content, and then retargeting them to like a webinar or landing page or a email sign up form has been dramatically cheaper than just going for the sale right away. Do you find that with your students and your clients?

Rick: Yeah absolutely. I mean we do quite a bit of running ad directly to webinars ourselves, but again going back to what we were just talking about is looking at Facebook as a long term play, and really starting to nurture that relationship with people. The example that gets thrown around there out so much, we were talking about this sort of stuff and it’s very relevant, it’s like you don’t walk up to somebody that you just met and ask them to get married. In this you get to build a relationship and then you go on a few dates and that sort of thing.

Well it’s the same thing here where if you are showing your ad to somebody who doesn’t have any idea who you are, you’ve got to build that relationship first. It’s not like, all right, I’m going to sign up for a webinar, and although this does happen, but you spend an hour with somebody, and then you’re pitching them $1,000 course let’s just say. I’m just, okay cool, I’m going to whip up my credit card and give you that money. Yes, and that does happen, but for the most part you’ve got to build that relationship, you got to what they call warm people up.

And that’s what you’re talking about Steve is or what we’re talking about here too is sending people from our ad to that free piece of content. You’re building goodwill if you will, you’re positioning yourself as an expert, they’re getting value out of it because your — it’s whatever a blog post or a podcast episode or a video, and they are able to take and implement that hopefully right in their business and get help. That starts to position you as the expert, and the more or the better the relationship that you can build, the further that you can take that person giving them free content and so forth, then you can move them through your funnel as we’ve been talking about here, closer to a sale.

Steve: Okay, and then I’m just curious like how often do you rotate your ads, like what frequency do you look at before that ad gets fatigued so to speak?

Rick: Yes so the frequency, great question — the frequency is a numbered score of — it’s the average number of times that one person is seeing your ad. And so the higher that number — we get in to what we call banner blindness, meaning like how many times have we seen the same ad over and over and over. What’s going to happen is you’re just going to tune it out. When you’re on Facebook, you’re just going to tune that ad out.

So I like to say if you’re in that one to four range for frequency, you’re doing pretty well, like you’re okay there. I would be looking at that, I’d be looking at, okay my frequency is getting a little bit high, and obviously the smaller the audience that you’re targeting, that frequency is going to increase more quickly because the audience size is smaller. But I try to stay in that one to four range.

Steve: Okay, interesting. For me at least I tend to just look when my conversion rates start plummeting and then it’s time to rotate.

Rick: Yeah I look at that frequency again is what I like when I’m troubleshooting numbers. It’s like all right what’s my cost per lead doing, okay is it starting to go up a little bit? Okay what’s going on with that? And then frequency number is one of those things that I’m going to look at to try to help determine why my cost per lead might be going up.

Steve: Okay and final question here since we’re running out of time. When you’re choosing your targeting, do you always go for conversions, or do you sometimes do website clicks or video use when you’re first starting out?

Rick: Yeah great question. So if our goal is to, okay this is why from the very beginning of our conversation we said it’s very important to understand what’s our strategy going to be, what are we going to kind of come out of the gates with here? And so if our goal here is to get people from ad to webinar, then I’m probably going to do website conversions as our objective. But if our goal here is to get people over, we’re going to send people from our ad to a free piece of content, and then retarget them; well then traffic would be our objective.

And why we’re choosing objective in very simplistic terms, you want to choose an objective that most aligns with what you’re trying to achieve. So if I choose traffic, essentially and there’s other different factors here, but you’re telling Facebook, show my ad to as many people in my target audience who are most likely to take this action, meaning click on my ad. All we want them to do is click on our ad over to the landing page, versus conversions is like we want people to convert.

And if we’re using say like video views, well video views is, okay I have this video here, and all I care about is just getting people to watch the video. I don’t necessarily care if they click or convert on the landing page; I just want people to see this video. And so it’s more of like an awareness type of play, but you’re using video to do that, and so that would be good. Again if all you want to do is just get people to watch your video, you can also use that to get people to watch your video, but also with the strategy of I want to build engagement audiences based on how long people are watching that video, so that I can turn around to retarget them.

Steve: Right cool. And I don’t know if you can sing the same thing, but like if I’m trying to drive traffic to an article, but indirectly I want to get an email sign up because there’s email sign up forms within our article. I found that paying for clicks is generally cheaper than paying for website conversions, at least in my experience, I don’t know if that’s true in your case?

Rick: Yeah, 100% because the experience when they land on your landing page isn’t an opt-in page, it’s actual piece of content. So we’re just trying to get people there because once they are on that page, the goal, yes you do you really truly want them to opt-in? Yes it is, but when they get to that, it’s a content experience; it’s not an opt-in experience. So if they opt in, it’s just sort of an added bonus there.

What you’re really trying to do is give them free content, warm them up, if they opt in great, if they don’t that’s okay, because we’re building those retargeting audiences, the people who are coming to that piece of content to try to get them onto our list after that. So yeah traffic is your objective to drive people over to that content.

Steve: Hey Rick we’ve been chatting for quite a while now, and I want to be respectful of your time. Lots of knowledge that you dropped on the audience today. Where can they find you online, what’s the name your podcast again, and what’s the name of your class?

Rick: Yeah its The Art of Paid Traffic is the podcast, and we talk a lot about Facebook ads on there, but also other forms of paid traffic and copywriting and stats and all that fun type of stuff. So that’s The Art of Paid Traffic. RickMulready.com is the website, and the FB Advantage is my training course for online programs, and I also have the FB Ad Manager for people who want to manage Facebook ads for other businesses, and the FB Advantage local for local business.

Steve: Cool, and then Rick also does a live event also where it’s like really hands on and it actually helps you launch your campaigns during the event, right?

Rick: Yeah absolutely, we call it FB Live, and it’s a multi-day live — I call it a workshop here in San Diego where it’s a lot of teaching. I get guest speakers to come in. I’m teaching a lot, but it’s also as you mentioned Steve, it’s very implementation focused. And so it’s very hands on, like I want you leaving there with stuff set up, whatever you’re trying to achieve like let’s get it set up for you by the time you leave.

Steve: Which is very cool, and I’ll link all these resources up in the show notes, so you guys don’t have to jot all that stuff down. But Rick, thanks a lot for coming on the show, I really learned a lot, thanks a lot.

Rick: Absolutely, thanks Steve.

Steve: Take care.

Hope you enjoyed that episode. Rick is actually one of my go to guys when it comes to Facebook ads for digital products, and you can find him at Social Media Marketing World in San Diego every single year. For more information about this episode, go to mywifequitherjob.com/episode179.

And once again I want to thank SellerLabs.com. Their tool Scope has completely changed the way I choose keywords for both my Amazon listings and my Amazon advertising campaigns. Instead of making random guesses, Scope tells me exactly which keywords are generating sales, and within the first week of use I saw a 39% increase in sales. It is a no brainer. So head on over to Sellerlabs.com/wife and receive $50 off. Once again that’s sellerlabs.com/wife.

Now I also want to thank Klaviyo which is my email marketing platform of choice for ecommerce 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 auto pilot. So head on over to mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s mywifequitherjob.com/ K-L-A-V-I-Y-O.

Now I 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.

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!

178: How To Create A 7 Figure Podcast With 3M Downloads Per Month With Jordan Harbinger

How To Create A 7 Figure Podcast That Gets 3M Downloads Per Month With Jordan Harbinger

Today, I’m really happy to have Jordan Harbinger back on the show. Jordan and I were part of the same mastermind group a while back and he runs one of the top 50 most popular podcasts in iTunes called the Jordan Harbinger Show.

His podcast gets millions of downloads per month and he’s had some incredible guests on the show including Shaq, Mike Rowe, Tony Hawk, and Gary V.

Anyway the last time we spoke 3 years ago, his podcast wasn’t nearly as large but it has really blown up in the past few years. And today, we are going to see how he did it. Enjoy!

What You’ll Learn

  • The key to growing a podcast from a hundred thousand downloads per month to millions
  • How The Art Of Charm has evolved in the past 10 years
  • How to get on the front page of iTunes
  • The chain of events that led to exponential growth
  • Does frequency really matter?

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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Transcript

Steve: You are 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 with their businesses. Now today I’m thrilled to have Jordan Harbinger back on the show. And if you recall Jordan is the founder of The Art of Charm podcast, one of the biggest podcast in all of iTunes. And what is cool that is we are actually recording this episode direct in The Art of Charm studios. So the audio might be a little bit better quality today.

But before we begin I wanted to give a shout out to Seller Labs for sponsoring this episode and specifically I want to talk about their awesome Amazon tool, Scope. Now if you know me I get really excited about the tools that I like and use, and Scope is a tool that actually increased my Amazon sales on several listings by 39% within the first week of use, crazy, right?

Now what does this tool do that could possibly boost my sales so quickly? Well, quite simply, Scope tells you what key words are driving sales on Amazon. So here is what I did, I searched Amazon and I found the bestselling product listings in my niche and then I used Scope to tell me exactly what keywords that bestselling listing was using to generate sales. I then added these keywords to my Amazon listings and my sales picked up immediately.

So today I use Scope for all my Amazon products to find high converting keywords in the back end as well as for my Amazon advertising campaigns. So in short, Scope can boost your Amazon sales almost immediately like they did for mine and 39% is nothing to sneeze at. Right now if you go to Sellerlabs.com/wife you can check out Scope for free, and if you decide to sign up you’ll get $50 off of any plan. Once again that’s Sellerlabs.com/wife.

Now I also wanted to give a shout out to Klaviyo who is also a sponsor of the show, and I’m always excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store and I actually depend on them for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not a different provider. Well 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 out 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.

Now Klaviyo is the most powerful email platform that I have ever used and you can actually 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 really happy to have Jordan Harbinger back on the show. If you guys recall Jordan and I met through Noah Kagan. We were part of a mastermind group together, and then the guy had the goal to call me Kim Jong Un the first time that we met.

Jordan: Yeah, the first time and that’s- it goes, it’s an AOC principle, it’s a risky, high risk high reward behavior and we can talk about that later but most people are-

Steve: Yeah, it’s a part of your plan?

Jordan: It’s a part of the plan and I’m telling you, most people are probably thinking it but people who’ve know you for years are like oh my God, I can’t ever say that. They are not taking the risk.

Steve: And that is what Jordan teaches you guys in charm school. Anyways if you don’t remember Jordan he runs one of the top 50 most popular podcasts on iTunes called The Art of Charm. He gets millions of downloads per month, and he’s had some incredible guests on the show including Shaq, Mike Rowe, Tony Hawk, and Gary V. And last time we spoke I think it was what? Three years ago. The podcast wasn’t nearly as large as it is today.

Jordan: Yeah.

Steve: But it’s actually really blown up in the last couple of years, right?

Jordan: Yeah, it’s a — I mean it doubles every year.

Steve: Doubles every year, crazy. What’s also cool though is that actually Jordan moved within 15 minutes of my house. So we are actually recording in his studio today which is pretty impressive. My studio is just a mic so.

Jordan: Yeah, my studio is a room in my house where people know not to bother me because they think I’m recording, sometimes I am, often I’m just in here because I don’t want people to bother me.

Steve: But it’s impressive.

Jordan: Thank you.

Steve: Anyways, welcome to the show Jordan, how are you doing today man?

Jordan: Good man, I’m glad we are here, going to hang out, we got our old friends in town and like I said earlier which some of you may have snipped the beginning of us fumbling around the mics, but both of our wives have quit, and I just noticed that when you were coming over today. I was like oh yeah; we both work with our wives and so do Omar and Nicole who are downstairs.

Steve: That’s true, yeah. It’s actually a really great set up.

Jordan: It is a pretty good set up although you said well, you know I hang out with my wife more now and maybe that will keep being a good thing.

Steve: Well, let’s keep that in the down low because she does listen to all these podcasts.

Jordan: All of them? Okay.

Steve: But-

Jordan: I mean he actually put it in a much friendlier way than that but Omar and Nicole, they hang out all the time, Jenny and I we hang out all the time and it is a good thing. It is a really fun thing.

Steve: It is. I mean when is the next time that you can work with someone that you trust implicitly, right? Who has the same goals as you? So it’s a great set up.

Jordan: It’s pretty rare. It’s pretty rare.

Steve: Yeah. So Jordan you were on the podcast I think three years ago, I want to say 2014.

Jordan: It was a long time ago.

Steve: Yeah, so give us like a- just a quick 30 second intro on like the primary revenue generating businesses that you run.

Jordan: So the primary revenue generating businesses that I run are the — well that we run at the Art of Charm is The Art of Charm School in LA where people come in from all over the world. They stay on the school premises. It’s a residential program and they learn things like body language, non-verbal communication, persuasion, networking, the science of attraction, influence strategies, and things like that. And they learn that all with coaches in person in a classroom setting where they cannot escape. And it’s a joke I said they cannot escape because, of course you can leave but since you are staying on site you can chicken out when things get hard and be like oh, sorry I was late for class unit today. I was getting my emails. It’s like, no, you are upstairs, I’ll come find you.

You will come down and you will do the hard stuff and then we have a lot of experiential exercises, and we rotate the coaches just like — we call it boot camp. We rotate the coaches just like general surgeon rotating, we just don’t yell, because it’s better for you to be in an immersive environment. And so we have that and then we have our online products one of which is called social capital which is all about networking and relationship development for business and personal reasons, and then of course we have ad revenue from the podcast.

Steve: Okay, and then last time we spoke, I think we primarily focused on like your live training program, right? It’s called Charm School.

Jordan: It’s called The Art of Charm Boot Camp, yeah.

Steve: Art of Charm Boot Camp, right?

Jordan: Yeah, Charm School is just something you just made up, just now.

Steve: Did I?

Jordan: Yeah.

Steve: For some reason I thought it was called Charm School.

Jordan: That’s okay.

Steve: Anyways, today I want to talk about kind of how you have blown up the podcast. So I don’t know if you remember back in 2014, like how big was your podcast back then?

Jordan: Let’s check. Should we check right now?

Steve: Sure, why not. And then while you are checking like how big is it now today?

Jordan: Yeah, let’s do that.

Steve: Sweet, so Jordan right now is bringing his lips in, holy. He is bringing his stats right now and they are incredible. I actually have never seen anything this high before. It’s ridiculous.

Jordan: Okay, this is the month we transitioned, obviously it doesn’t count. So July 2014 we had 619,000 downloads, well 620. Because it’s 619,760 plus whatever we had on these like little sound cloud or whatever.

Steve: Yeah.

Jordan: So 620,000 in July 2014 and then in April we had 3,260,699.

Steve: That’s crazy.

Jordan: So if we divide that. Let’s call this 3.261. Hang on. I’ve never actually done this.

Steve: He’s doing math now.

Jordan: 326,100 okay and divided by 619,760. It’s 5.26 times bigger than it was when I was last on your show.

Steve: Crazy in three years.

Jordan: Yes.

Steve: Would you say that, you mentioned that you make money off of sponsorships for your podcast. Would you say that the podcast has kind of overtaken The Art of Charm Boot Camp in terms of revenue or no?

Jordan: No, not even close.

Steve: Not even close.

Jordan: No.

Steve: Okay, so would say then that your podcast is like your primary lead gen into your boot camp then still?

Jordan: Yeah, it is definitely primary lead gen.

Steve: Okay and here is the thing. Ever since we had that interview, I’ve actually been following The Art of Charm. And one thing that I’ve noticed from listening to your podcast kind of over the years is that it’s kind of evolved, right? A lot of the earlier episodes were about dating and relationships I would say.

Jordan: Yeah, definitely, yeah.

Steve: And then in the last couple of years it’s kind of been more focused on business, right?

Jordan: I mean maybe. I would say less so business than just smart people, high performers and critical thinking. So let’s look at the last few episodes. I love that we can just look at the computer right now and not like go off memory road. All right, so, the latest episode is with this guy who wrote a story about, do you know what Silk Road is?

Steve: No — oh yeah I do actually, yeah.

Jordan: That website where you sell guns and drugs.

Steve: Yeah, yeah.

Jordan: This guy’s knows more about the guy that started that site than the guy who started that site. I mean he just, he is a journalist who works for Vanity Fair, he works for New York Times. So he just learned everything, read all of his chat transcripts and everything, and went inside this guy’s head. Super interesting because this guy was a boy scout and then he started Silk Road… hired hell angels to murder his like foreign ministers, and crazy, crazy story. Before that we had Dean Karnazes, the guy who runs ultra-marathons. He ran like 350 miles through a desert once, bananas, and then before that Neil deGrasse Tyson.

Steve: Yeah, which is crazy.

Jordan: And guys like David Eagleman who is a neuroscientist who developed a vest that deaf people can wear so that sound creates feeling on their body that their brain can then translate into hearing. Yeah, so all kinds of crazy stuff like that is one the show. We focus a lot on high performers, critical thinking, and amazing people that can actually teach what they know such that we can all use the lessons that they are teaching.

Steve: So I’m just kind of curious like what caused that shift?

Jordan: It’s really – it’s so interesting because people always say things like, well, you got to be ahead of the customers so that you know. You got to do customer research so that the branding works and all this stuff, and I was just like, I was massively overwhelmed by that. And I remember having this business coach a long, long time ago, and when it was all dating and relationships I was like, I have a girlfriend now, and I’m really sick of talking about the same dating and relationship stuff.

If people want to learn that they can just listen to older episodes of the show because the stuff is ever green. It’s a podcast; you can just go back and listen. And sure the newer shows are better because I’m a better broadcaster, better host, but the old episodes have great content and if you just want the content then fine. And I will do the occasional relationship thing or whatever with an expert and do a really good show like that.

I did one this morning with David Buss who’s like the guy for evolutionary psychology, and we talked about mating strategy. But people always say things like well you know, if you go away from your core message, you are going loose fans and loose this person. I believe that to a certain extent that is true. With respect to people that — how am I going to try and explain this?

If you have a show that is about scary stories and your show is about scary stories and everybody goes because they like scary stories, and they listen to scary stories on your podcast, if you then go you know what? I’m going to do a comedy podcast. They are going to go mmh, I don’t really like this. You are not that good at it or you are good at it, but I came for scary stories, I’m out of here.

What I had found with The Art of Charm, what we found, I should say, with The Art of Charm is people came for dating and relationships, but they also really liked intelligent talk. And I’m not saying I’m intelligent. I’m saying my guests are intelligent. So they liked intelligent talk that had practical takeaways that they could use to improve their lives. So we got some resistance when I started shifting from just dating and relationships to smart people like this blind guy who figured how to see using echo location.

Steve: Right.

Jordan: That’s cool. But the people that were giving resistance I found when we I looked at them and when I did my customer research on those people. I found that — and this is going to sound like a jerky thing to say but I’m just going to say it anyway. I found that I was kind of glad to get rid of those people. Because I found that people who were like this show was great until they started interviewing.

I saw a post on Reddit, ‘I used to love this show and then they started posting crap like this.’ And it was a link to Maria Konnikova who is a brilliant writer for the New Yorker who writes about con men and griffters and stuff like that. And I thought, you used to like the show when we used to talk about body language and stuff like that cool, but you find no value in talking about con men and how to protect yourself from manipulation and influence.

I feel like you are either not seeing the forest to the trees because you don’t want to, you are not smart enough, or because you just want to get girls and you don’t care about anything that might be tangential to that that a smart person and intelligent well rounded person might be interested in. I decided I’m okay loosing that audience.

Steve: I was just wondering if you made that shift due to business reasons, right. Because in theory there is more money in like the business side of things in terms of sponsorships, right?

Jordan: There is yeah. I just, I never make branding decisions based on sponsor dollars.

Steve: Okay.

Jordan: Ever.

Steve: Okay.

Jordan: I in fact I turned down a huge amount of money which I could have repurchased the house I grew up in two times with the amount of money, but they wanted me to talk about finance. And I was like, mmh, that sounds really lame and I’m going to hate it and my audience is going to hate, so I’m just not going to do it. And my network said, can you please come to Norm’s office so he can throw you out of the window because what the hell are you talking about, you are not going to do it, but I just didn’t want to do it.

Steve: Okay.

Jordan: And I think that’s good because networks are trying to make money short-term and long-term, and in theory a business is trying to make money short-term and long-term, but what I’m really trying to do is generate an audience long-term.

Steve: Okay.

Jordan: So anything that creates friction for that is bad, and I balance that. The show will better with no ads but I have to pay the bills at some level.

Steve: Sure.

Jordan: Sell through ads, for things that I like. But if it’s an ad for some crappy real estate investment BS, I’m not going to do it because I know that short-term and long-term I will lose listeners because of that, and that is antithetical to my goal of creating really high quality educated listeners base. And so I never make decisions based on — I never make decisions like that based on sponsored dollars ever.

Steve: Sure.

Jordan: The only decision I make based on sponsored dollars which is based on other things is get more people listening to the show. Sponsors are more than happy with that.

Steve: Right.

Jordan: Right but I’m not doing it just because they are paying me for that. I’m doing it because that’s the goal, that’s the whole goal.

Steve: Okay.

Jordan: In fact and I can show you if you are interested again to the computer. If we look at our brand spanking new advertising data, we just updated this this week. So, $150,000 per episode, three and half million monthly listeners, whatever.

Steve: Can I ask you how much money the podcast generates? At least give me like a ball park, it doesn’t have to be…

Jordan: Yeah, it’s essentially, well not counting products and services sold, right? You just mean the ad dollars?

Steve: That’s correct yes, just ad dollars.

Jordan: It’s really hard to say because — it’s not hard to say. It’s hard to put this in a concrete way that I can guesstimate it because you get different CPM.

Steve: Sure.

Jordan: Cost per thousand dollars blah, blah but it’s basically a seven figure ad revenue shell.

Steve: Okay.

Jordan: However, I’m not getting a million dollars a year from ads that I’m selling because you see you might put — I put my own ads in here for things that I’m not getting paid the ad dollars when I’m selling the products and those are making seven figures instead.

Steve: Okay.

Jordan: But the property itself if I only sold ads and I only existed off the ad revenue would be seven figures.

Steve: Okay, okay.

Jordan: If they sold all the ad inventory, like there is all these little factors in it, right? So that stuff is in there, but I wanted to throw this out to you, right? We just updated this. The Art of Charm audience is more educated than the general US population. 92% of our listeners have a bachelor’s degree or higher. The US average is 37%.

Steve: How did you get that data?

Jordan: I did some research, did a survey of our listener base.

Steve: Okay.

Jordan: Because of our network. Art of Charm audience is more affluent than the general US population. 45% make over a 100 grand. The US average is 18% and 85% make over 50 grand and the US average is 31%. That is bananas, and I thought jeez that’s crazy, but there is probably a bunch of other shows that do something similar. And so I tried to find that out and I thought how am I going to ever find this out? And so what I did is I Googled and searched for and bookmarked the NPR audience demographics.

What I found was this, cut pause for our searching. What I found was this, the NPR audience 49 sorry, 73% make over $50,000, so compared to The Art of Charm’s 85. So we are more affluent than NPR, and if you look at education, 58% of NPR listeners have a college degree or beyond compared to 92% Art of Charm. So that’s huge because NPR is theoretically the most educated and affluent audience anywhere in radio, and we are crushing those statistics.

Steve: Right. Okay, that’s amazing.

Jordan: With reliable data. Not data that I collected, data that I got from a third party company that is designed to find it for advertisers that got paid separately from those advertisers or separately from me.

Steve: I just want to take a moment to thank Kabbage for being a sponsor of the show. Now if you run a successful ecommerce business like I do, you probably know that the worst thing that can happen to you is to run out of stock. Now my wife and I regularly import container loads of merchandise from China, and sometimes you need a short term loan to buy enough inventory to meet demand especially during the holiday season. Well, if you are wondering how to get the funding needed to run a small business today, Kabbage has the answer.

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So let’s switch gears a little bit, and let’s talk about like what happened in those three years. Like how do you grow from – what was it? 640,000 downloads to over three and a half million?

Jordan: So the way that we grew the show was by — and this is totally related to what we were just talking about actually. So we are not really switching gears, we are just bringing it home. The reason that that makes sense is because I didn’t make decisions, we didn’t make decisions, nobody in our company made decisions based on how can we make money really quickly. It was all about how can we create something that’s interesting to the people that we want to attract.

And this is where you can either hire some statistician from Harvard and go crazy and spend millions of dollar trying to figure this out or you can go, all right, what do I like? Because I kind of want customers that are like me except in different areas and different walks of like. So that’s a much easier system than doing some sort of crazy $48,000 a week survey of a massive amount of people and trying to figure out what they might respond to.

And I think a lot of companies do stuff like that. They try to figure out how their audience is going to respond to this and how their audience is going to respond to that. But since we are always leveling up our audience, I don’t have to figure out what The Art of Charm audience is going to like when I release an episode. All I have to do is figure out what area of interest I’m mostly interested in that’s tangentially related to applied psychology, high performance, personal growth and some fashion, and we have a perfect candidate for an episode of the show, and that’s really easy, right?

So basically I think about what I’m interested in, get really passionate about that, do a bunch of research on it, talk about that and people who like that will share it. I’ll get more people interested in what I’m doing which means that I’m leaving that bottom crust, the crusty unwashed masses at the bottom 10% are complaining, I like this show until you started interviewing the world’s foremost authority on emotions and the brain. Well good, see you later, right?

Steve: So does that imply then that your growth was kind of organic or did you do anything to grow? I mean it seems like 5X growth is not an organic thing, right?

Jordan: Right. It seems like it but we don’t do paid acquisition.

Steve: Yeah.

Jordan: Which is what you would think you’d need for 5x growth.

Steve: Correct.

Jordan: Correct, it’s 5X growth over three years. So you know, let’s be fair.

Steve: Yeah.

Jordan: But it’s more about the idea that the show became not only more palatable for people to share because nobody wants to go, hey man, check out this show about why your relationships all fail. Women share that. That’s awesome because our female funs share a ton, a ton more than the guys do. That’s general. I would imagine that’s actually true across the whole internet.

Steve: Sure.

Jordan: Because of the way women are wired for social duh, duh, duh evolutionary psychology, totally different show, different topic. But for us, what worked really well for us was look, if I’m going to have a bunch of really interesting folks on the show, let’s look at our best off. These are our most popular and well performing, again going to the computer, episodes of the past few years. Neil deGrasse Tyson, genuinely an A-lister in the science field, in fact probably just an A-lister generally, period, in the world. My friend Vanessa Van Edwards, super fascinating body language expert.

Steve: But you couldn’t have gotten these people three years ago, is that right?

Jordan: I definitely couldn’t have gotten Shaquille O’Neill three years ago, or Neil deGrasse Tyson three years ago or Mike Rowe.

Steve: So what I’m trying to get at is like what did you guys change?

Jordan: This is a result of the numbers, period.

Steve: Okay.

Jordan: These big guests, they see the numbers and they go, sweet.

Steve: But back when you were like let’s say, 100,000 downloads like what did you do to grow to even 600,000?

Jordan: So let’s go all the way back and look at some of our best off from way back and you will see.

Steve: So it seems like your growth is based on the guests that you can get, right?

Jordan: No, here is another bit of wisdom that people who sell courses on podcast promotion won’t tell you. You can have a huge guest and nobody gives a crap because the guest isn’t going, hey, I was on this podcast, make sure all million of my followers go get it. Neil deGrasse Tyson is not spending any time promoting his episode on The Art of Charm, right? It’s being shared because it’s good in my opinion. It’s being shared because it is good and in other people’s options as well.

What I did to grow the numbers was be consistent with the content, constantly work on my presentation skills as a host. Constantly work on researching this. So for example if I have, when I had Shaquille O’Neill on the show, I interviewed people I knew that knew him in person. I read anything I could find on him. I got in touch with people that we had mutual friends; I got in touch, I read and watched videos of his for a long time. When I had — let’s find another person, Gavin — sorry Peter Diamandis, he’s written a bunch of books. I read all of them, took a bunch of notes. Then I found out what projects he was working on, I read all the work that he had done. I watched a bunch of his talks. So when I came in, I literary knew more about his work and recent work than anybody who had interviewed him pretty much ever.

Steve: Okay.

Jordan: And that made it good for his fans, it made it good for him which brought him more into an engaged conversation. And I’m not a journalist, so I don’t have to do stupid stuff like get them to admit something, or they don’t have to be on their guard. And I have more time to research them, and I can do a really in depth profile. And that gets you a little incremental bump in listeners who go, wow! I listen to everything Peter Diamandis is saying and this is really, really good one. Who else has he interviewed? And then they find Tony Hawk and then they find Roy Wood Jr. from the Daily Show and they find Mike Rowe etcetera.

And those little bits of things start to bring in more fans. So you can have a huge guest, but if you do a crap job you are actually hurting yourself. And I know people that interview like; oh I interview all the top YouTubers. Well, guess what? They go to your interview and they go, this guy sucks. So next time they see you interview somebody they already know you stink, so they pass; they don’t pick it up and download it. So I see people who are, they have same amount of famous guests that I do, but their listenership is going down.

Steve: Okay.

Jordan: And it’s not going down because they are not marketing it well or whatever, these are internet marketers. They are way better at marketing than I am. They are going down because everyone has seen them and said, ah, it’s crap and that’s a problem. You can just as easily market yourself down as you can up. You can find a bunch of new people and they can go, great, I’m going to check this out. But if they keep churning on subscribing or stop consuming your stuff, the next time they see an ad for you, they’re just going to be like, oh, that’s that guy who has that crap show that I don’t like.

Steve: So you attribute your growth primarily to the quality of the episode and not — you don’t run the ads or anything…

Jordan: Right.

Steve: So it’s purely organic is what I’m hearing.

Jordan: It’s organic. People find this stuff because people share it. So there is word of mouth, and I’m not saying we don’t buy ads, pat myself on the back. I’m saying we haven’t figured out the ad thing well enough. I mean we have people working on that, so don’t email me and say you can help with that. It’s like I don’t want people to do that.

Steve: So I’ve seen, I’ve noticed some of your episodes get on like the front page of iTunes.

Jordan: Right.

Steve: Like how do you get on the front page of iTunes?

Jordan: That is because enough people share it and consume it in a short period of time that it trends really highly in the iTunes ranks.

Steve: I see, okay. So it’s not something you can really control?

Jordan: No.

Steve: So it’s not like you call someone…

Jordan: Not to my knowledge.

Steve: Okay.

Jordan: Not to my knowledge, no.

Steve: Okay.

Jordan: Apple could feature you, but they don’t care about indie shows like ours. They care about NPR and their friends.

Steve: So one thing I noticed about Art of Charm also is that you increased the frequency of your episodes, right? Now you got fan mail Friday and you got minisode Monday. What was kind of like the reason for doing that? Was it just to get more stuff out there and increase your downloads?

Jordan: Yeah, so I ran an experiment a while ago that was something a little along the lines of – well first of all I used to do this show whenever I felt like it. Not a good strategy.

Steve: Okay.

Jordan: And then around 2013 I was like ah, I should this every week. Like that’s Kevin Smith, you know who that is? That director he told me I got to do it every week, it’s important. And I said all right, fine. That was maybe 2012, 2013. I started doing it every week and then I interviewed this author, Robert Green and he was like, hey this is really good interview. And I thought, really? I’m kind of surprised. I was kind of surprised to hear that. And I thought, well, I’m just really interested in his stuff, so I didn’t know that he was getting a lot of bad interviews.

So he was like yeah, I will do this any time and you know you should interview other people too because this is something that you are good at. I thought okay, great. So I kept doing it and I started to enjoy it more. So I upped the frequency, and I decided I want to do two a week because there is so many guests that are interesting. So I did two shows a week, and what I found was that my audience, my download numbers didn’t double, they 2.2ed.

Steve: Interesting.

Jordan: And I thought, wait a minute, how is it possible that I’m doing twice as many shows but I’m doing more than twice as many downloads. Some of it is back catalog and you get people downloading, but the math still didn’t make sense. And what it meant was not only am I getting twice as many downloads because I have twice as many pieces of content up there, but those pieces of content are being shared more collectively, and people who subscribe to podcasts are listening maybe more frequently to Art of Charm instead of just going, I’ll listen to this one and then forgetting about us for two months, and then going I’ll listen to this one again. Right there now maybe more engaged.

So then I thought, well what happens if I do three shows a week? And so I did that and my audience more than threed, or whatever you want to call it, 3xed. And then I tried four, and then it didn’t work at all, and it was like too much. So I went back down to three, and I found that the audience 3x-ing worked okay. Not the audience, the download numbers worked okay.

But I decided all right, I want to do four because I have these little things on Monday that I want to get out there. So those became minisode Monday. And I get so much email and some of the answers are really interesting, and I don’t want to put them in the middle or at the end of the interview because it makes no sense. So I’ll do fan mail Friday.

Steve: Right.

Jordan: So I do that every week. And what I found was that not only did my downloads go up quite a bit, but the downloads per episode which in podcasting is really the only metric that counts at all started to go up too.

Steve: Okay.

Jordan: And what that meant was people were not only becoming more engaged with the show, but they were sharing it lot. And what we found which took a long time to get out of our audience because it takes a while for people to feedback to you. You don’t know that if you try something it works right away. This is not how podcasting works. So now I find that there is a lot of people that like the occasional interview and they listen to every episode fan mail Friday. Those are the people that would have read Dear Abby 20 years ago.

Steve: Sure, right, right.

Jordan: And there is people that look at every single episode of Minisode Monday, but those are people that go, I just can’t pay attention for more than ten minutes to a podcast. I just can’t, I just can’t, I just won’t. So they love Minisode Monday. And then there is other people, a large number that consume every interview and go, hey Jordan your great interviewer, I don’t care at all about what you say in your fan mail Friday. I don’t care about your advice, I don’t care about your mini things, go fly kite, but I do want to hear you interviewing Neil deGrasse Tyson.

Steve: So you are like segmenting your audience, kind of like having a low, middle, and high price point for a product for example, right?

Jordan: Totally.

Steve: Okay.

Jordan: It’s just low, middle, and high attention span.

Steve: Right.

Jordan: And then there is huge number of people that really just consume everything, and that’s great. I love those people too. So that’s how we started to scale this thing up. The problem is with podcasting, you can’t just buy a Google AdWord, this is like listen to this hour long interview.

Steve: Yeah.

Jordan: Because people go, no right?

Steve: Right.

Jordan: And you can’t do an Instagram promotion where some grown spray tan boob says, listen to the show, it’s so great and meanwhile while they are swiping right on Tinder. They are like let me sit down for an hour and 19 minutes and listen to an article about space time. Not going to happen, or interview about space times, it’s not happening. So you really have to grow this audience so slowly, but as you can see via our new statistics which I was really proud of, it works. You can’t get a more affluent or educated audience anywhere on the internet really, and at the same size unless you are reading the Atlantic or something.

Steve: Right.

Jordan: So that’s a big deal because it was for a long time I was beating myself up and going, man, look at these YouTubers. They got like 2 million subscribers and each of the videos gets a million views and I just, I hate my life. I should have done YouTube. Why did I do podcasting? I’m so stupid. But then you look at their demographics and you hear them talk behind the scenes and they go, I’m making two bucks CPM on ads. All my comments are showing me your boobs or whatever, just some low brow BS.

Steve: Right.

Jordan: Their age group is 11 years old to 14 years old, and the occasional 18 to 21 because that’s all you can measure on the internet. And then it just drops off a cliff from there as you get older because adults don’t want to see some guy bungee jumping again in a travel video. They just don’t care. And their videos can only be two minutes long because people close them after that.

Steve: Right, right.

Jordan: So when you look at a property like a podcast where you keep someone’s attention for an hour, and you can do it 3.5 million times a month, it starts to look really good even when you compare it to a YouTube channel that gets 40 million clicks.

Steve: So what are the CPMs that you are getting? Like you just mentioned YouTube is…

Jordan: 45 to 50 bucks.

Steve: 45 to 50 bucks and that’s — is that three spots?

Jordan: Three spots per show.

Steve: Okay.

Jordan: Yeah.

Steve: Okay.

Jordan: I mean not on Monday and not on Friday, but the two in the middle of the week, yeah.

Steve: The big one, right?

Jordan: Yeah.

Steve: Yeah. Okay. Let’s talk a little bit about how you get your guest. Like if you can just kind of look back to the first big guest that you landed, how did you – what’s your process for landing a big guest?

Jordan: Man who’s — the first, the process hasn’t changed much, let me put this way.

Steve: Okay.

Jordan: You beg people to come on your show. But a long time ago nobody knew what podcast was. So I remember asking people and they would be like no, or I don’t know what a podcast is or don’t text me anymore, you know the standard.

Steve: Right.

Jordan: And I remember a lot of times I would have to — I would call a company and be like, hey, I really want to interview someone from your company. And they would be like mm, you can interview one of our interns or something because they just did not want to waste their time. Now I have numbers that I can email to people and say, do you want to be on this program? And the publicist goes yeah, of course. He is selling a book. [Inaudible] [00:34:12] says he wants to talk to all these people.

You can’t really figure out how to get that audience anywhere else. So yeah, sure, where do we sign? But 90% of it now, those two exceptions aside is still, hey Steve, I heard that your cousin worked at one time at Unilever, and that CEO now works at Starbucks, and I really want to interview the Founder of Starbucks. Do you think you can like reach out and see if they know the person?

Steve: Okay.

Jordan: And then after trying for four months you can get a hook up to that person.

Steve: So social engineering still.

Jordan: Social engineering.

Steve: Okay.

Jordan: Social capital really is what we call it.

Steve: Okay.

Jordan: Because social engineering might be like tricking somebody, but social capital is what we call it. And social capital would result in me getting a guest like Shaquille O’Neil. This was something I called in a bunch of favors who called in a bunch of other favors who called in a bunch of other favors like Shaq. That was through Norm who owns the network at PodcastOne, and then but Neal Brennan I twitted at him.

Steve: What About Mike Rowe actually.

Jordan: Mike Rowe, that was me emailing the right people and waiting like a year.

Steve: Wow! Okay.

Jordan: For them to have time. Yeah, I just waited. I mean I didn’t wait a year for them to respond to one email.

Steve: Sure.

Jordan: I just patiently said this is what I’m doing, really keen on it. This is what I kind of want to do, and they said oh, man dude, he is just so busy. I mean I don’t know what to tell you. And I went cool, no problem, when is it good to circle back? Like a month or two? Yeah, perfect, great. Next time, next time, next time, next time until finally somebody over there was like hey, you’ve been really patient and not a total entitled jerk face about getting Mike on. Let me see what we can do. And then that turned into cool, well, if you come to me I will do it, which I obviously did and here we are, right?

Steve: Okay.

Jordan: But a lot of these are mutual friends, mutual friends that I made throughout a decade, 11 years of doing a show where somebody know somebody who knows somebody.

Steve: So it just gets easier as it goes on.

Jordan: It just gets easier as you go on. So the guests I have — looking back at some of the best we have, it took forever, forever to get some of these bigger guests. But as you get more and more bigger guests, you find okay, well I get General Stanley McChrystal and when he came on Art Of Charm his book went back on New York times best seller list because we moved so many copies. So when I wanted General Ann Dunwoody on the show, he just emailed her and that was a done deal.

Steve: So what do you have to offer when you have like a very small download rating? Like when you can’t move the needle?

Jordan: When you can’t move the needle you really have to figure out what you can do for people. So you are not going to put their book back on the best seller list.

Steve: Right.

Jordan: But if you know that you’ve got 3,000 listeners, 5,000 which actually sounds like a lot but isn’t, then you can sell a few hundred copies of a book. It’s worth their time to do a show on Skype. It’s definitely worth it if then you can say, hey, I would like to introduce you to five other shows that have a similar number, and they are going to be prepared and they are going to make it easy, they are going to be professional, they are not going to be annoying, they are not going to flake, they are not going to forget. They can also sell hundreds of copies of your book.

Now you’ve sort of built some social capital with that author. Then when you want them to come back as they have got another book or another author that maybe works with their same agent, with their same imprint, they can introduce you to their PR people, their publicist, their agent.

Steve: Okay.

Jordan: You can go through that person and then they can start throwing you stuff. And then after years, literary years of doing this, and everyone always tries through the short cut, and I have not met anybody who’s done it well. But after years of doing this you can finally go, all right, look, I got Shaq, I got Neil deGrasse Tyson, I got this comedian, Mike Rowe, this other person, this other scientist, Tony Hawk, whatever.

When you throw that into a pitch email, and you find somebody who’s current, some people are going to take a chance on you because you’ve got the social proof to back it up. And then as that happens and people start to become more aware that you bring it, you do a good quality show with a good guest, and you start to see your numbers go up, now for me the numbers speak to themselves, speak for themselves, sorry.

Steve: Sure, sure.

Jordan: Because now I can write to a publicist and I still get ignored like 80% of the time. So don’t feel bad, right? I still get ignored 80% of the time because some publicist who is 60 years old goes, I don’t know what that is. So never mind, I’m going to go with the person who has the cable public access TV show because I know what TV is, but I don’t really get podcasting, so forget it.

Thankfully now those serial NPR, a lot of these other shows people go, oh I’ve heard of that. Oh, your podcast is that? All right well cool, I’ll do that. And then we also make it really easy. So if they go, I really don’t know how those things work. Can you help us? I go, sure, here is how it’s going to work. I’m going to fly to your house and do it. And they are like okay, but I live in Florida and I go, I don’t care.

Steve: So you actually make house calls?

Jordan: Oh yeah, if the person needs it.

Steve: High profile enough.

Jordan: High profile and needs us to, yeah.

Steve: Okay.

Jordan: I mean I went to Peter Diamandis; I did in the X price office. Roy Wood is a buddy of mine, so we just did it on Skype. He is young; he knows how Skype works whatever. Mike Rowe, I went over to their place. I’m interviewing Wyclef [ph], he invited me over to his house because he’s got a studio, right?

Steve: Wow! Crazy.

Jordan: Vanessa Van Edwards, a friend of mine knows how this stuff works. We did it in San Francisco when she was here in town. Neil deGrasse Tyson, he was on a tour. I’ve run a studio in the city where he was.

Steve: Wow!

Jordan: He showed up, did the show.

Steve: Okay.

Jordan: You have to put in the effort because a lot of folks think, oh, it’s so easy it’s on Skype. But what that means for a lot of — if you are 55 and you don’t use that, doing it on Skype you might as well be asking to make sure you bring your laptop and your webcam. Set this software thing up and it’s more like, no, I will call you on a phone or you can’t do that next.

Steve: Okay.

Jordan: Because these people have a ton of pictures. So you have to make it easy but not millennial easy. You’ve got to make it — you got to do it how they want to do it.

Steve: Sure.

Jordan: And that can be tricky and honestly getting good shows often requires some investment on your part. I know my friend Tom Billy, he runs a show and he will literary fly the person to LA, put them up in a hotel, then they show up at his house because he has a car and a driver to take them there. They show up, he’s got a full set, full camera crew, full audio crew. It’s expensive but that’s what you are competing with now.

Steve: I just want to take a moment to tell you about a free resource that I offer on my website that you may not be aware of. If you’re interested in starting your own online store, I put together a comprehensive six day mini course on how to get started in ecommerce that you should all check out. It contains both video and text based tutorials that go over the entire process of finding products to sell all the way to getting your first sales online.

Now this course is free and can be obtained at mywifequitherjob.com/free. Just sign up right there on the front page via email, and I’ll send you the course right away. Once again that’s mywifequitherjob.com/free, now back to the show.

So why aren’t you doing video then?

Jordan: I do video sometimes. Like I have videod Neil deGrasse Tyson, I’ve videotaped Vanessa Van Edwards, Shaq is on video, all these guys, Mike Rowe, etcetera. But the level of production versus the level of engagement versus the cost is just not there.

Steve: Okay.

Jordan: People who are looking at the right metrics will show you the same thing. So if I video tape an interview with Neil deGrasse Tyson, there is going to be a certain amount of organic views on YouTube because people are searching for Neil deGrasse Tyson. Those same people are not going wow! I really love Art of Charm; let me go download the podcast.

In fact they might even subscribe to your YouTube channel, but that doesn’t mean they are going to watch it. And if you look at YouTube things there is another reason why I hide my YouTube fomo is basically gone. I’ve got friends, who have millions of YouTube subscribers, and they will do a video and they will be like I don’t know they got 3,000 views or 30,000 views.

No episode I have ever done of Art of Charm in the last few years has ever gotten that low amount because everybody consumes everything that I’m putting out, okay? Because they’re subscribed and they have to constantly make that decision to engage with it. YouTube, unless you have email notifications on which is literally no one does, you don’t know if a channel you subscribe to has a new video nor do you really care.

Steve: Right.

Jordan: You might check sometimes, but really, not really that much at all. So those video views are not representative of your actual audience.

Steve: Okay.

Jordan: Which and advertisers know that because a lot of YouTube people and marketers especially will argue with me on that. Okay marketer, why do you get $2 CPM and I get 45? Okay, come back to me when you have an answer for that. Because advertisers know the level of engagement that exists on YouTube, and they know the level of engagement that exists on podcasting, and they are paying accordingly. So I do video sometimes to future proof things or to have like a cool video of me interviewing Neil deGrasse Tyson.

Steve: Right.

Jordan: Because I’m already going to do the show in person, and I just bring some go pros and hit him up and they are great.

Steve: Okay.

Jordan: But other people go, well, I’m only going to do my show in person, so they can’t get guests like this.

Steve: Right.

Jordan: Because they call Neil deGrasse Tyson publicist and she says, are you kidding me? You want us to come to your house, click, right? You are not getting it, and or I’ll beat you to it because you are waiting for three months for Neil deGrasse Tyson to book his thing in your studio and blah, blah, blah, and I go to his house to do it.

Steve: Okay, that makes sense.

Jordan: Or do on phone.

Steve: Actually let’s talk about monetization real quick.

Jordan: Sure.

Steve: At what point can you get sponsors and is that basically the only way to make money?

Jordan: No, it’s the worst way to make money.

Steve: Okay.

Jordan: Podcasting is a terrible way to make money.

Steve: Okay.

Jordan: I will throw that out there and you should not start one. If you think you need to start one because everybody else is doing it, you should totally never start one. It will be a terrible idea.

Steve: Okay.

Jordan: It’s a lot of work. You are not going to be good at it. It’s like writing, you are just going to start doing it and be good at it, and it’s got crap monetization. You need — my network for example PodcastOne, great network, a good place to be. If you don’t have 25,000 downloads per episode, they are not even going to be on the phone with you.

Steve: Okay. What is the advantage of going with a network?

Jordan: A network will sell ads for you.

Steve: Okay.

Jordan: And they will also promote you on other shows. So if you are listening to like Bulletproof Radio with Dave Asprey, you are going to hear commercial for Art of Charm sometimes.

Steve: I see.

Jordan: And I’m going to get 10,000 new listeners because of that.

Steve: So is that a good strategy for growing?

Jordan: It’s a decent strategy for growing. The problem is that big networks like PodcastOne that have 300 shows or something on them, they can’t promote everybody. They are going to promote their money makers.

Steve: Okay.

Jordan: Which tend to be the people at the top. Which is fine but that means you have to do more work to grow to get attention so that then you are worth promoting, right? Does that makes?

Steve: That makes sense, yeah, yeah.

Jordan: And also they’ve got to know you are not going to quit because a lot of people who come into podcasting, the vast majority in fact they quit when they find out it’s not just a matter of getting drunk, turning on your USB mic and starting to rumble about your Twitter feed.

Steve: I think that’s like anything, right?

Jordan: Right.

Steve: Whether it be blogging or YouTubing, yeah.

Jordan: Absolutely. It’s just that podcasting has a tougher bar because if you are blogging, if you write a blog and if I start a blog with you, right? And we are like okay; we need to work on the business side in the business. We just hire writers, the end. All right if I don’t want to host my podcast next week, guess what, there is not freaking podcast next week. I can’t hire some dude off the street to host my show for me. It’s not going to work.

Steve: Right.

Jordan: The amount of money I would have to spend to have somebody good at that would be more than I’m making from whatever else I’m doing, right? So it just doesn’t work. And the other idea behind monetization is if you have enough people listening to your show that you can get advertisers and make money doing it. Okay, let’s talk about this.

Let’s say you are going to get $20 CPM because you have an agency selling for you and you are kind of small, and you are getting some basic advertisers that just want to dip their feet in the water, you are not getting the top dollar money, right? Let’s say you are getting $20 CPM all said and done. That’s $20 for every 1,000 downloads. Let’s say that you’ve got 25,000 downloads, pretty big show, decent size. So that’s 20×25, that’s 500 bucks.

Steve: Right.

Jordan: Let’s say you even have two ads per show, that’s 1,000 bucks. Let’s say you are doing that every single month — or every single week, sorry. So you are making four grand. Your hosting bill is going to be at least 500 bucks.

Steve: Wait, what?

Jordan: Yeah. You are going to pay around there for that much.

Steve: Okay.

Jordan: Let’s say you are hosting free for some reason.

Steve: Okay.

Jordan: Let’s say you are just doing some weird thing and you’ve got free hosting.

Steve: Okay.

Jordan: You know you got on Amazon and they are not billing you because you might even have a better deal than that. My hosting bill is $2,000 a month.

Steve: Okay. I thought the way most podcast — at least the way my hosting works is you get unlimited downloads until you reach a certain point, right?

Jordan: Yeah, okay so I have reached that point.

Steve: You have obviously reached that point.

Jordan: I reached that point when I say, hey, I heard you have an unlimited deal; they laugh until I hang up the phone, okay? So that doesn’t work for me. So let’s say hosting is free because you paying, you are getting a great deal.

Steve: Right.

Jordan: You are getting $4,000 but you have 25,000 people listening to every episode of your show. If you had a product and that product was 40 bucks and you sold at a small single digit percentage of conversion every show, you would make way more than 4,000 bucks.

Steve: So let me ask you this. So why are you even accepting sponsors and not just focusing you message to your Art of Charm Boot Camp?

Jordan: Well, the boot camp is a super high ticket item. Most people aren’t going to buy that.

Steve: Okay.

Jordan: Only certain selection of people are going to buy that.

Steve: What about the digital course?

Jordan: Digital course also high ticket.

Steve: Oh it is.

Jordan: I don’t have anything that is under two grand.

Steve: Oh really?

Jordan: Yeah.

Steve: Okay.

Jordan: No, because I don’t want to service that particular client niche yet. I will probably hire a team to do that eventually, but right now I’m just focused on people who are kind of serious and have the means to do that because that’s where I see the needle moving the most for people.

Steve: Okay.

Jordan: But I will eventually have a lower end product that’s a little bit more accessible that doesn’t require me and my team to be in their coaching.

Steve: I see.

Jordan: So but until then the sponsor money is great. The other reason is because I’m getting a lot more dollar, a lot higher CPM than other shows for advertising because of the affluence and education level of the audience.

Steve: I see. So would you recommend, like for example for my podcast do you recommend that I do one of these surveys because it will actually help?

Jordan: Yeah, you could do a survey. I wouldn’t, I don’t know if — a decent research is like 20 grand, so you might want to look for something a little more a little cost effective.

Steve: Sure.

Jordan: But yes. The message that I’m trying to hammer down home here though is by the time you have an audience that is big enough to net you even a remotely living wage from advertising, you have far exceeded the number of fans you need to have an info product that will make you a much larger amount of money.

Steve: Right.

Jordan: Does that make sense?

Steve: Yeah, it does. Sure.

Jordan: So people who are like trying to get rich on podcast advertising because they saw this product on the internet that says you can do that, not realistic. The average podcast size has like 200 downloads. Let’s say you are doing great and you’ve got 3,000 downloads, right? That’s three — and let’s says you are getting $30 CPM because you are smart and you know how to negotiate. That’s $90 per episode.

Steve: Right.

Jordan: And then let’s say you got two ads per show, that’s $180 times weekly episodes, $720 a month that you are earning.

Steve: Right. That’s pretty weak.

Jordan: But you still have, you have 3,000 fans. So you can’t sell those 3,000 people something that costs a few hundred bucks and make multiples of this? I mean of course you can.

Steve: So let me ask you this, so going forward, given what you just you told me. What is your top over strategy going forward? I mean you are going to continue to grow the podcast, right? But the podcast in itself doesn’t generate the money, and you have this really high ticket item that probably has limited space, right? Because it’s very hands on, right?

Jordan: Oh yeah, it’s every week there is ten people on each one, and it’s sold out three months in advance.

Steve: Right, exactly. So going forward like what is your plan with the podcast?

Jordan: The plan is to; well we continue to sell our high ticket items, those prices go up.

Steve: Which already sell out anyway. So that’s probably not growing because you only…

Jordan: It still grows because we raise the price.

Steve: Okay. Got it, okay.

Jordan: We raise the price and we do more of them. Like there is still every week but we can — we bought another property that’s next to the property we have, so we can expand the capacity and we raise the price.

Steve: Okay.

Jordan: And we do an online course that sells quite a bit and that’s a high ticket item. So we are doing it backwards. I know like you are better at ecommerce stuff. You are supposed to start with a small one and then build your way to a large one. We actually just did it backwards. Not because we are geniuses, it’s because we actually don’t know anything about business when we started ten years ago, and we just though hey, this is a hobby.

I used to be a lawyer and AJ my business partner was a cancer biologist. So we decided we were going to run weekend boot camps in New York. It was going to be super fun and we were going to pay, we wouldn’t have to pay for anything and we were going to make our rent money and that would it. We didn’t know it was going to turn into a seven, eight figure business.

Steve: Yeah, right.

Jordan: But then it was like, well we really need an online product because not everybody is going to fly in from wherever they are in the world. Not everybody can take a week off and do that. So we started social capital which is great, but we didn’t want to be like, here is a bunch of crappy PDFs and some videos, no offence to people who are doing that. We still wanted to coach. So we coach all those people on the phone and on slack and then on Facebook group. So we still have to put a lot of energy into that and those man hours are worth a lot of money.

Steve: Right.

Jordan: I should say, they cost a lot of money. It’s up to you what they are worth as a customer, but they cost us a shit load of money. They cost us a darn lot of money.

Steve: I have to believe that all thanks man.

Jordan: You are welcome.

Steve: Just like Noah, man.

Jordan: So those are in there and those products are in there and they are making a healthy sum, but eventually we are going to have to build out something lower end. But the reason we haven’t done it yet is because it’s seemingly just as hard to make a low end product as it has been for us to make a higher end one, except whenever we’ve had lower end products in the past, we’ve had lower end clients that require a lot more service.

Steve: Sure, that makes sense.

Jordan: And there is a lot more of them.

Steve: Right.

Jordan: So now I’ve got, instead of having 1,000 in change people who’ve paid a couple of grand to be in our social capital program or whatever other program that we’ve got depending on what deal they’ve got on social capital because it can be lower than that sometimes. Those people are great, they are intelligent, they invest in themselves. Our life program people, they are amazing, they’ve invested in themselves, they are in front of me. I don’t know if I want 10,000 people who paid 70 bucks to be emailing my team and distracting.

Steve: That makes sense, yeah.

Jordan: I literary want — when we do that we will entirely have a different team handling that because I don’t want any kind of low end BS to affect the quality of my mid and high range products.

Steve: Sure, now that makes sense.

Jordan: It’s totally unacceptable for that to happen.

Steve: Actually the quality of my students in my course went up dramatically once I started raising the prices dramatically as well.

Jordan: Yeah. I believe that. And I used to think that was marketing BS, but then when we tried to have a low end product, we were like, oh my god! People aren’t kidding. No wonder they want high end products because we were like our customers are awesome. What are all these people complaining about?

And then we had a low end product and we were like, oh my God! When people start low end, imagine what their life is like. They must be going bald, but since we started higher end we didn’t see the problem that obviously marketers were having when they started with you know, this is only 9.99. That did not occur, that hadn’t occurred to us dude as they said in the big [inaudible] [00:53:11], right?

Steve: Right.

Jordan: We just didn’t see it coming. So we pulled that product from the market within months. It was just a disaster on wheels.

Steve: Jordan so we’ve been chatting for quite a while. I did want to ask you this question because I get a lot of it myself about people who want to start podcasts. What do you tell these people? Like-

Jordan: Don’t do it.

Steve: Don’t do it.

Jordan: No, don’t do it. I mean we touched on this a little bit beforehand but the reason I say don’t start it is the market is saturated. It takes a long time to become a good host because it’s performance that requires research and practice, like no one wants to do that. It’s just like being a speaker. A lot of people think, yeah you just go up on stage, and if you don’t have stage fright you talk, no. That’s what low end to crappy boring speakers do.

Good speakers rehearse a ton, they take classes. They are doing improv exercises; they craft jokes to keep the audience interested. They know where they are moving on the stage, they do it with no notes; they are visuals half the time. Like that’s a performance. It’s not just like, I guess I will go up there and talk about something I’m interested or that I’m an expert in. That’s what boring speakers do, low end speakers do that, same thing with podcasts.

You are welcome to start a low end average podcast that no one will listen to. You think you are going to get attention in iTunes or you think you are going to be consistent with it, but then when you get real work or your kid gets sick, you are going to fall of the wagon, 99 out of 100 or something like that. I can’t even remember. I think John Lee Dumas or somebody did a stat, and it’s just like more than nine out of ten podcasts just quit at episode number six which is crazy, right?

Steve: Right.

Jordan: Six episodes, you haven’t even done anything yet man. And that’s not a lot of work in my opinion to do six episodes. That’s a week and a half of Art of Charm, right?

Steve: Yeah.

Jordan: But people will quit after that, and they are doing that once a week. And I get it. I have a different work flow, I have a team, but to be fair they are doing that. Now if you really think no Jordan, you know what, I love the idea of talking to people, having interesting conversations. I know that I can do this because I used to be on radio, or I know that the conversations I’m having are going to sound good because I’m on YouTube, then good, ignore me because everybody who’s actually probably going to be good at this is going to ignore me saying don’t do it.

But the people that are thinking, I should do this. Everybody says I should have a podcast and I’m still on the fence, they are not going to because I’m going to give you permission to not do it. And they are going to go, ah, you saved me so much time. So I have a keynote speech so they can get called Please God Don’t Start Another Podcast, or For The Love of God, sorry, Don’t Start Another podcast.

Whenever I do that for a room there is nine out of ten, 15 out of 20 people who go oh my gosh! I’m so glad I came to see this, because now I’m just really not going to do. I was thinking about maybe doing it, all my friends said I should it. I saw a bunch of my friends doing it, I really didn’t know if I wanted to do it, now that I’ve heard you speak, I’m not going to do it.

And then there is another few people who go, what, I just the love idea of doing it. It just seems so fun. Go ahead and test it. But if you’re thinking you should do it because you got fomo, don’t waste your time.

Steve: Okay, last question. Remember earlier when we were talking about when you called me Kim Jong Un? What was the, what was the reason for that again?

Jordan: Because you got that haircut.

Steve: No, no, not that part. You mentioned there was some strategy or something or reason, yeah.

Jordan: Oh, you do have that haircut though. Hold on, the reason was because when I first saw your picture on My Wife Quit Her Job, it’s like this close up of your — I don’t know if you saw the same show ad.

Steve: Yeah.

Jordan: It’s like this close up of you and I was like, oh he’s got like kind of Kim Jong Un hair cut is kind of funny. And I’m a big fun of like researching North Korea. So it was kind of like an endearing thing. Obviously you are not an evil dictator, right? So I remember talking with mutual friends of ours and they were like oh yeah, this guy Steve Chou is really cool, and first I called you Steve Cho because that’s how I thought your name was pronounced but…

Steve: Well that’s how it’s pronounced in Korean actually.

Jordan: Oh it is.

Steve: Yeah.

Jordan: Okay, in North Korea?

Steve: In North Korea, yes. Whenever I visit that’s yeah.

Jordan: Whenever you go back home yeah, and so I just remember talking with like Noah Kagan and John Conklin and stuff like that, and I said something along the lines of like, oh yeah, a guy with the Kim Jong Un haircut. I’m looking forward to meeting him. And everybody was laughing and I realized oh okay, I’m not the only one that thinks this. So when I met you I just decided, look, I’m going to get this out of my system first of all, and I would playfully jab.

Because I can tell you are a good humored, good natured guy. I’ll playfully jab you in a playful way and since that happened just immediately sort of generated a little bit of rapport in a way that was like, okay, this person is not afraid to just put it all out there. And you probably said something back; I don’t remember what it was, probably equally clever. And then we ended up hanging out, complaining of scape game like did some fun cool stuff.

And it’s not this sort of, like oh don’t say it because you might get offended, and I like to start interactions with that because there is very few people that actually get offended by things like that. And I find that person is going to get offended by something I say at some point in the first 90 days of our relationship and they are going to be annoyed by that better anyway, I don’t really need to be around all that. I’m not trying to…

Steve: Let’s say you are breaking the ice early.

Jordan: I’m breaking the ice, but I’m not just breaking the ice, I’m breaking rapport in a way that you go, I can’t believe this guy just freaking said that, but then you know everything is kind of on the table, nothing is off limits. I’m not going to get offended by something. Clearly if we made it through that, we are going to get along fine, and I’m not tooling you.

I want to be really clear here like, like you don’t want to make fun of people in front of other people to make yourself look cool. That’s not what that’s about. That wasn’t me being like yeah bro, nice haircut. That wasn’t that at all. It was just like let’s get this cat of the bag that’s probably been on a bunch of other people’s minds. And everyone kind of laughed including you, and it wasn’t like designed to embarrass you. It was just a stupid comment that was equal — it made me look just as damn saying it as it did for you to be there.

Steve: Well what was funny is that Navel and I we have Photoshop wars, and he actually started that even before like…

Jordan: Even before that.

Steve: Yeah.

Jordan: So it was a meme that was going on that you had with your close friends and so I immediately escalated myself into the echelon, but it’s high risk high reward, right? I could have either become a buddy of yours that’s allowed to say things like Kin Jong Un and do the Navel Photoshop war thing, or you could have gone wow! This guy is such a tard. I don’t want to be around him anymore.

So high risk because it could have turned out poorly, but high reward because since it didn’t somebody who met you on that exact same day may not have the same level of rapport with you that I do because I just decided to dispense with formalities.

Steve: Right, right.

Jordan: And I do that with a lot of people. I mean when I was interviewing Mike Rowe, I found a story that was mildly embarrassing about something that happened to him in college because I found his college roommate, and he was just like eating it up. He thought that was hilarious, right? And I made fun of Shaq in a way that he thought was ridiculous and funny, and his manager was like I can’t believe you did that, that was hilarious. Nobody would ever do that, I can’t believe it; no wonder you have a show.

And you have to be very careful with it. I have definitely blown it a lot in the past. But now I have kind of figured out the way to do it right and you know enough that if the one time out of 100 that it is sort of un-calibrated, I can either rescue it because the people around me go, he just didn’t mean it that way, or it’s just not somebody I’m not going to click with and there is no reason for me to be around them.

Steve: I didn’t realize it, but I think I do the same thing except via email. Like when I interviewed Tony Horton of P90X, I photo-shopped him like eating fries, and like he used to be a Chippendale, so I photo-shopped him like an old dude. Like an old Chippendale with like grey hair or whatever on the tour.

Jordan: With a bow tie.

Steve: Yeah, so again it worked, like he found it hilarious. So by the time we got in the interview, it was a lot better in terms of rapport.

Jordan: Right but conventional wisdom would say, dear Mr. Horton. I am a big fun of P90X. I have your life sized cardboard cutout in my room, or just to be really polite or something like that. And then you just blend in with everybody else that talks to him, but when you are the guy that sent him a picture of him scarfing fries using the facial ageing software in a Chippendale’s uniform, you are now remembered, and you did it in a way where he didn’t feel like well, screw you then too buddy, right? He didn’t mind. He though it was funny.

So it’s high risk high reward. You do have to be careful. If you had done it differently or delivered it differently, and it went bad, he could have just said, I’m not going to let you interview me, you dick bag. So are you going to bleep that out too?

Steve: Yeah, dude you are marking my podcast editor’s life difficult. Hey Jordan, cool man. Thanks a lot for coming on the show. Where can people find you? Can people find you?

Jordan: Nobody can find me.

Steve: Yeah, that’s what I thought.

Jordan: I’m listening…

Steve: I’ll post your cell phone out too.

Jordan: Post my cell phone number on the show notes. If you are listening to a podcast, I would just greatly appreciate if people would seek out The Art Of Charm Podcast because I think that people who listen to your show are also smart and intelligent, and might like intelligent talk that somewhat irreverent, but not try hard irreverent I would like to say.

And it’s actually, I mean what we do on The Art of Charm is we study the thoughts, actions and habits of brilliant people, ask them what I would like to think are smart questions, and allow them to apply that same wisdom for themselves. We focus on emotional intelligence. We teach emotional intelligence in a systematic way that anyone can learn and understand. And so I think that your audience would dig that as well, and of course people can find us at the Artofcharm.com if they want to do that.

Steve: Cool man and just a quick plug on my end, I actually really like fan mail Friday, and in fact those are the episodes I listen to the most, while I’m working out.

Jordan: Really?

Steve: Yeah.

Jordan: There you go. You like the advice, like I don’t care about space time with Neil deGrasse Tyson.

Steve: It makes me feel better about my life. I think that’s why I listen to it.

Jordan: Really?

Steve: Yeah. All right, cool dude.

Jordan: Well thanks. I appreciate it.

Steve: Thanks a lot for coming on the show.

Hope you enjoyed that episode. Jordan is probably the most successful podcaster that I know personally, and I can’t even begin to fathom getting millions of downloads per months on a podcast. It just blows my mind. For more information about this episode, go to mywifequitherjob.com/episode178.

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.

Now I also want to thank SellerLabs.com as well, and their tool Scope has completely changed the way I choose key words for both my Amazon listings and my Amazon advertising campaigns. Instead of making random guesses, Scope tells me exactly which keywords are generating sales, and within the first week of use I saw a 39% increase in sales. It is a no brainer. So head on over to Sellerlabs.com/wife and sign up for free, and if you love the tool you will receive $50 off. Once again that’s sellerlabs.com/wife.

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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177: How To Successfully Sell Food Products Online With Justin Mares Of Kettle And Fire

How To Successfully Sell Food Products Online With Justin Mares Of Kettle And Fire

Today, I’m thrilled to have Justin Mares on the show. He is the founder of KettleAndFire.com, a company that sells America’s first and only USDA grass-fed bone broth.

I’ve been getting a lot of emails lately from readers asking for more food based business owners on the podcast. And Justin will walk us through the process of selling food online.

What You’ll Learn

  • Why Justin decided to sell bone broth.
  • How he evaluated his product for profitability.
  • Kettle and Fire’s value proposition
  • How to create food products when you know nothing about the industry
  • What certifications are required to sell food products
  • How Justin validated this niche before investing a lot of money

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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Ignite.Sellerlabs.com – If you are selling on Amazon and running Amazon Sponsored Ads campaigns, then Ignite from Seller Labs is a must have tool. Click here and get a FREE 30 Day Trial.
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Kabbage.com – If you run a physical products based business, sometimes you need a short term loan to buy inventory to meet demand, especially during the holiday season. Kabbage helps small business owners access simple and flexible funding right away. Click here and get a $50 Visa gift card upon signup.
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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 are 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 with their businesses. Now today I’m thrilled to have Justin Mares on the show, and he’s actually the first ecommerce entrepreneur that I’ve had on the show that sells food products online. And today we are going to learn what it takes.

But before we begin I want to give a quick shout out to Klaviyo who is a sponsor of the show. I’m always super excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not a different provider. Well 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 which allows you to do many things. So let’s say I want to send an email out to everyone who purchased a red handkerchief in the past, 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.

Now Klaviyo is the most powerful email platform that I have 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 I also wanted to give a shout out to my other sponsor, Seller Labs and specifically I want to talk about their awesome Amazon tool, Scope. Now if you know me I get really excited about tools that I like and use, and Scope is a tool that actually increased my Amazon sales on several of my listings by 39% within the first week of use, crazy, right?

Now what is this tool do that could possibly boost my sales so quickly? Well, quite simply Scope tells you what keywords are driving sales on Amazon. So here is what I did, I searched Amazon and I found the bestselling product listings in my niche and then I used Scope to tell me exactly what keywords that bestselling listing was using to generate sales. I then added these keywords to my Amazon listings and my sales picked up immediately.

So today I use Scope for all my Amazon products to find high converting keywords in the back end as well as for my Amazon advertising campaigns. So in short Scope can boost your Amazon sales almost immediately like they did for mine and 39% is nothing to sneeze at. So right now if you go to Sellerlabs.com/wife you can check out Scope for free, and if you decide to sign up you’ll get $50 off any plan. One again, that’s Sellerlabs.com/wife, 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 Justin Mares on the show. Now Justin is someone who was introduced to me by Sol Orwell who actually will be a future guest on the show. He is the founder of kettleandfire.com, a company that sells America’s first and only USDA grass fed bone broth. Now, I’ve mentioned this before but I’ve been getting a lot of emails lately from listeners asking for more food based business owners on the podcast. And Sol hooked me up with Justin and with that, welcome to the show Justin. How are you doing today, man?

Justin: I’m doing great man, how are you?

Steve: I’m doing great. Justin I had a chance to go through your site and Bone Broth to me at least seems a little bit random. So give us a quick background about how you got into ecommerce, and how you came across bone broth of all the different things that you could sell online.

Justin: Sure. So I’ve been involved in CrossFit and Paleo communities for a couple of years now and so I was into Paleo. I started doing Paleo, honestly shortly before Tim and the Four Hour Body came out. And so after being in that space a lot of people, a lot of friends that I had in the CrossFit were talking about this bone broth thing. Like they were saying it helped with recovery, it helped with certain issues, it helps improve health, all this. And being someone that cares very much about my health, wellness and wellbeing, I decided to look into it, and yet at the same time Bone Broth is a real pain to make, like you have to cook it for 24 plus hours.

Sourcing that is a lot, like the quality of the bones, where you get them from, all that stuff is really, really critically important. And so what I decided to do is like, I can’t buy this stuff. It’s something I wanted to incorporate into my diet and it is highly unlikely that I will incorporate it into my diet if I have to make it every single time.

Steve: Sure.

Justin: Just because I, at the time I was working in technology, I was travelling a lot, I was very busy, and so just didn’t have the time. And so that was kind of at the back of my mind, and then around the same time my brother who I ended up starting the company with, he suffered a really bad knee injury and was like bed ridden for seven weeks after surgery. And so he was looking at foods that could help him with recovery.

I mentioned Bone Broth, he went online to buy some and literally couldn’t find it anywhere, and so it was kind of at that point we had the aha moment of like, well, can we be the only two people in the US that want this product? Probably not, and so we decided to start the company and that eventually became Kettle and Fire.

Steve: You are going to have to excuse my ignorance. So this broth is like different than the cans of like chicken broth and stuff that you get in the grocery store, right?

Justin: Yeah, yeah.

Steve: Okay.

Justin: So I’ll explain the difference. So the big difference is the stuff that you’ll get up in grocery store is often made with like crappy cuts of meat. So these companies will take these really awful cuts of meat. They’ll boil them, flush boil them for two hours or so, add a bunch of spices often a ton of sodium, and make a broth or a stock that they then sell and it has effectively no nutritional benefits.

Steve: Okay.

Justin: When you look on the back of that, like zero to one grams of protein, lots of sodium, nothing good in it whatsoever. Bone broth is different, so a bone broth is made when you take the bones of the animal, in our case we use marrow bones from 100% grass fed, grass finished cattle. We then cook them over a long period of time. So we cook ours for 20 plus hours.

And as you go with those long cook times at low temperature, the bones themselves breaks down, the marrow seeps into the broth, and then you get a lot of the amino acids, proteins and nutrients that truthfully most of us just do not get into our diets out unless we eat organ meats, or brains, or kidney or liver or whatever it is.

And so there are a lot of amino acids in bone broth, collagen, glycine, glucosamine, like they are not present in almost any individual’s natural diet unless you are incorporating organ meats into your diet in some way.

Steve: That’s interesting, okay.

Justin: Yeah, and that breakdown is why bone broth is also high protein and has real nutrient content as opposed to the store bought stuff.

Steve: Because as a kid — so I’m Asian and we actually used to suck the bones, dry their marrow. Is it something similar?

Justin: Yeah.

Steve: Okay.

Justin: Exactly.

Steve: And my parents always told me that the marrow was like the most nutritious part of the bone, so.

Justin: They were correct.

Steve: So did you have to create the formulation for this broth yourself or it as simple as just boiling these bones and then selling that broth? Is there additional formulations to it?

Justin: Yeah, so it’s actually really difficult to make a product that is good, also goes through our packaging process and consistent is the big piece.

Steve: Okay.

Justin: So we are buying bones that have from all over the country which we are and when you are using ingredients and like a process that can vary a couple of percentage points every time you go through it, it’s actually really difficult to make a formula that is consistent. So we worked with someone that was on Iron Chef. We worked with the Iron Chef Team to help us develop our formula, and then we worked with what’s called a co-parker which is the company that actually makes the product for us to develop the formula and now they manufacture it for us.

Steve: Okay, so let’s take a step back quickly. So you had this idea, how did you kind of evaluate it for profitability? Like did you know upfront that it was going to sell?

Justin: Yeah, so I wrote a blog post about this but basically what I did is I put up a fake website where I — not a fake website but a landing page, and I bought traffic like Bing ads, directed them to the page where I took customer orders and I just saw, okay, if we had this product and I wrote about it like we did is this something that people would buy? Is this something that people would actually purchase, get excited about? I could email them and ask how do you like this, is this something you would buy on repeat basis? Yeah, yeah.

And so I tested that with I think it was $80 worth of ads. We sold something like $500 worth of product with a incredibly poorly done landing page. A super junky check out process and a product that didn’t exist, and for me that was enough to say like wow! That is some really interesting traction, that’s a really strong response with something that doesn’t exist.

And so I refunded everyone their money that they had purchased, and then just started to email friends and kind of saying how would use this? Why do you want it? How did you hear about bone broth? All these questions, and it turns out that it was revalidated enough that we decided like this is a business that we can start and get into and I think do well.

Steve: Just curious, you mentioned Bing ads. Why Bing ads as opposed to like Facebook or Google? It seems like Facebook would be ideal for this, right?

Justin: Yeah, Facebook certainly is but the truth is that when you are testing an idea, I found that Bing worked really well just because it was so cheap that you could actually pay relatively well and get to statistical significance faster because you are buying keywords that you can overbid the competition so that your ad is at the top of different Bing searches.

Steve: Interesting.

Justin: You pay less to do that just because it’s much cheaper than average on Facebook.

Steve: So what’s funny about that, that you say that, Bing ads are actually a little bit more expensive than AdWords for us, for our company.

Justin: Really?

Steve: It just so happens, it converts better. So it ends up breakeven but that’s curious. So your landing page, was it an email opt in form or were you literary just trying to convert the sale right away?

Justin: Yeah, it was to convert to sale right way. So it was an orange button that you would press to buy. You then would get directed to PayPal where you are asked to PayPal Jwmares@gmail.com $29.

Steve: No way.

Justin: Yeah. So it was incredibly junky.

Steve: Okay, so people are willing to buy that way, it doesn’t even look like a professional store at that point, right?

Justin: Exactly.

Steve: Then you are definitely onto something, okay, okay.

Justin: Yes, 100%

Steve: All right. So let’s move on to like the formulation. So you know you want to do this at some point, and it sounds really intimidating to me actually. So where do you start? Did you start contacting the Iron Chef to make the formulation? Like what were your first steps?

Justin: Yes, our first steps were actually that we called about 300 different manufacturing companies in the US to see if they can make this product. And it wasn’t until — this was the 280th or something like that we found someone that could make it. And at that point they were like hey yeah, we can make this, but we’ll need someone to make the formula. We know this guy that can actually help you with it. He was involved with Iron Chef, yadi yada and that’s how we met him. And so, yeah, it was a long process of having a ton of conversations with different companies that like might be able to do this.

Steve: Did you know anything about, like you said you had a co-packer, did you know anything about all that stuff, or the way it will worked when you first started this?

Justin: No, nothing.

Steve: Okay.

Justin: Absolutely nothing.

Steve: So this is just stuff that you picked up after contacting all these different manufacturers?

Justin: Yeah, exactly.

Steve: Okay, all right and so you have someone who is willing to manufacture this and then you create the formulation with the Iron Chef dude. What about certifications? Like can anyone just sell food in the US? Like do I need to get certified? Do I need to go undergo testing and that sort of thing at all?

Justin: Pretty, much anyone can sell food in the US, but you cannot sell into retail and you cannot sell more than, I think the cut off is $100,000 a year unless you get some of these certifications. So there are like farmers market exceptions, there are home kitchen exceptions like big sales. The government doesn’t really want to regulate that stuff, you know what I mean. Like if you are going to make brownies in your kitchen and sell them at your son’s school, it doesn’t really make sense for you to need a permit to do that.

Steve: Okay

Justin: So if you are doing anything at scale, yes, then you need a permit and then the government is very, very rigorous about saying what you need. And so for us…

Steve: What permits — oh yeah, sorry, go on.

Justin: So for us we fall under USDA because our product is — so bones are considered in many cases a meat product because we are — very rarely are bones completely clean. They’ll often have scraps of tendon or something like that on it, and because of that our product is considered to be more than 3% meat which is kind of the USDA cut off. Which is the US department of agriculture cut off for saying, okay, this is something we are going to regulate and they regulate beef, pork, all that stuff.

And so we fall under their standards and they have a long kind of process where they have to look at the co-parking facility you are working with, that you are sourcing, your formula, they have to approve all of it. They have to approve the language on you packaging, they have to do all of this kind of stuff, and so the regulation can be quite a lot honestly.

Steve: Can you give us an idea of how much it cost to pass all these regulations?

Justin: Yes, so often times if you are working with a co-parker it’s just a matter of sending this stuff to the USDA. It takes time but not really any money.

Steve: Okay. Because when I read your bio you said that you are the first and only USDA bone broth, but then you also said that you require a USD certification to do bone broth. Does that mean like you are the only supplier of bone broth?

Justin: No, no, so we are the only USDA approved like grass fed and shelf stable bone broth. So we use basically 6 million dollars worth of packaging technology to make a bone broth that is shelf stable aka won’t go bad if left unopened without any preservatives, additives, anything like that.

Steve: Okay, so that sounds like a huge value prop there. How did you decided that you needed to that and how did you go about that?

Justin: Yeah, so my background and what I was doing previously, I was pretty much all in online marketing, and so there were two ways we could have gone about it. We could have launched a frozen bone broth relatively quickly. That would have been competitive, it would have been really difficult to just honestly do conversion, do all sorts of stuff, even home sales would have been more difficult because if you are doing frozen you are looking at shipping costs that are 20 to $40 per order.

Steve: Wow!

Justin: And in so many cases that is basically cost per unit. And so for us I was like okay, we want to figure out how to do this shelf stable thing, I think it will be a source of lasting competitive advantage which it turns out it certainly has been. It allowed us to get some recognition opportunities like with ripe market, selling on Amazon, do things that our frozen competitors couldn’t. And it also played and plays really well into my skill set of being able to do online marketing without these crazy prohibitive shipping costs that a lot of our competitors run into.

Steve: So you probably didn’t have a background in this packaging technology before you started, right?

Justin: Right.

Steve: So how do you start like in developing this packaging?

Justin: Yeah so you basically, I mean we found a co-parker that was willing to work with us and at that point they just decided to say like here is how you can go about this. Like here is how you would work with the packaging. Here is kind of the individuals that I would talk on the co-parkers side, and we got walked through this whole process and with a lot of their help figured out how we could it.

Steve: I guess what I’m trying to ask is why haven’t other people who sell frozen things go with this type of packaging? There must be some reason why, right?

Justin: Yeah, so there are a couple. So one, if you do frozen – yeah so all [inaudible 00:17:07]. So if you do frozen, you can launch today. You can start selling on the farmers market, you can start selling online. You can deal with the USDA stuff after you have a real business. It’s you can literally make bone broth in your kitchen, sell it by the jar and you have business tomorrow. A lot of people do that.

Steve: Okay.

Justin: With what we’re doing, we had to get USDA approval right up the gate. We had to line up sourcing right up the gate. We have to create our formula, do all product development, all of this stuff before we could sell a single unit of product. So that takes a really long time. And the second thing is a lot of people moving into entrepreneurship especially if it’s your first company especially in food, a lot of people are kind of don’t have a lot of capital to put to work right away.

And so our first production run I wired, it was like 120k to our co-parker, and you know I did it with my money. Fortunately I was in a position to do that, but many people don’t want to start a business with 140k upfront expense.

Steve: Sure.

Justin: And just hope that works, and so it’s a little prohibitive on that side as well if you are just looking to start a company.

Steve: But you did mention that if you are making under a 100k, I can’t remember the exact number. I think I heard under 100k you could just start selling right way, right?

Justin: Mm-hmm.

Steve: So why did you have to go so large in the beginning and get USDA certification? Couldn’t you just have started selling?

Justin: Got it, yeah, yeah. Sorry, so I’m so used to this stuff at this point, that’s an excellent question. Yeah, so the reason is that the companies that we are working with will not work with you if you are a tiny customer.

Steve: Okay.

Justin: And so that is why. So our minimum run size or our first run size, they would go no lower than 30,000 units. And so, that 30,000 units cost us over 100K, and so we just had to pay that to get started.

Steve: Okay. Whereas if you are just like a Mom and Pop you are just boiling in your own kitchen, it’s not a big deal.

Justin: Yeah, exactly.

Steve: Okay, so now we have 120k worth of bone broth, I imagine there is quality control issues, how do you manage that?

Justin: Yeah, so a lot of that is over at the co-parkers side. There is also USDA regulations that the co-parker has to follow in order to receive USDA approval.

Steve: Okay.

Justin: And so a lot of that is kind of taken care of throughout the USDA approval process. Like they have systems in place that help with quality control and we just kind of follow those systems.

Steve: Is the co-parker the same person who is actually boiling the bones?

Justin: Yeah, that is the same person.

Steve: Okay, okay and they just take a cut of whatever comes in?

Justin: No, so we pay them a certain price to manufacture the product. They tell us how much it will cost and then we pay them that, they give us however many thousand units and then we resell those units.

Steve: Okay. So you are not worried about them like knocking off your idea or anything? They are just in it…

Justin: No, not at all.

Steve: Okay.

Justin: I mean they have five to ten million dollar worth of equipment that they need to make productive and like maybe there is a risk that we become their biggest customer and they want to move into the space or whatever, but I think it’s highly unlikely. The skill set for running a successful co-packing operation is entirely different than building a brand and selling a consumer product in retail, online all that.

Steve: Okay.

Justin: And most of these guys just say like if you have five million dollars worth of machines you can often get a couple of customers, and if you have 100% lie time utilization which is like full utilization of the machines you own, you could be pulling a couple of million dollars a year on that business, and that is a pretty darn healthy business and a good business to be in.

Steve: Okay. So kind of along these lines before we move on to the marketing, you took 120k bet in the beginning just from selling a couple of hundred dollars worth of units. So I just want to know what your mentality was. Why didn’t you try to create some of this stuff yourself first in small batches and actually sell the physical product to get people’s opinions before you put down that money?

Justin: Yeah because I didn’t really think that it would matter. Like the product that I would have had to make myself in small batches would have been entirely different than the product that we would actually end up selling. And so because if I was making in small batches I would have to freeze it, I would then have to ship it via dry ice. Like I would have to encounter all the problems that we wanted to solve by going shelf stable.

Steve: Okay.

Justin: And so for me like it would prove that you could sell frozen bone broth, but that wouldn’t necessarily be that interesting to me because that’s not what I wanted to do anyway. And because this stuff has a two year shelf life, I just looked at the ads that I had bought in the test and looked at a couple of other things around velocity, and realized that worst case scenario I would probably get my money back inside of like 14 months even if things didn’t work out just from buying Bing ads and driving people to our website.

Steve: Okay, I guess that makes sense because the value prop completely changes too, right if you are selling frozen products?

Justin: Yeah, exactly.

Steve: Okay.

Justin: It’s an entirely different product.

Steve: Right, right, okay. So let’s talk about marketing. All right, so you have the stuff, you have it all packaged, how did you first get the word out and how did you sell your first units?

Justin: Yeah, so that was an interesting challenge. So moving to a space that I sort of knew but didn’t really know about broth consumer, we were selling our first few units. I had two ways. So we bought AdWords and Bing ads, we tested different value props on the landing pages and that accounted for a decent number of sales up front.

We then started to do a lot of outreach when it comes to influencers, and so that was stuff like just emailing people samples, running promotions, trying to do something different like co-promotional offers and yeah, that was kind of the big way that we got some traction in the early days. We had a bunch of people like Melissa Hartwig from Whole30 that were really excited by what we’re doing, because we were the first ones out there that were convenient, shelf stable and had a product that frankly was good.

Steve: Right, how did you reach out to her? Were you friends at the time or did you, was it a cold outreach email?

Justin: Yeah, all this was cold outreach.

Steve: So can you just kind of give me an idea of what you wrote in that email to get them excited?

Justin: Yeah, I mean it was pretty easy. It was just describing like here is this product that we made, here is why we made it. Two senses about the founding story, about to send you some, what is the best address? And that’s a pretty easy way to start a conversation with people. It’s like can I send you a free product that I know you have a high probability of liking.

Steve: Okay and they said yes, and then after that they wanted to feature you or did you ask for any of this stuff or did they just naturally…

Justin: Yeah they definitely asked.

Steve: Okay, okay and so how — so that first person that you mentioned, how did they feature you in the beginning?

Justin: So they did Instagram, blog post, email last like a combination of all those.

Steve: Okay, wow! So they must have really liked the product. So the product essentially sold itself?

Justin: Yeah, I mean it definitely works well.

Steve: Okay and I did want to talk about your Bing and AdWord ads, I would imagine does bone broth, does that cost a lot per click?

Justin: Now it does, it didn’t at the time.

Steve: Okay. I was thinking to myself wow! That sounds like a really expensive keyword. How much do you — like what was your return on ad spend in the beginning when you first started running it?

Justin: Like when we were testing it or when we actually had a product?

Steve: When you actually had the product.

Justin: We were around three to 400%.

Steve: Three to 400%, okay. And you were just biding on grass fed bone broth and people were actually searching for this?

Justin: Yeah, pretty much all bone broth related terms. Some other amino acids related terms.

Steve: Okay.

Justin: So yeah, and I’m not AdWords savant, so by no means was that like incredibly well optimized campaign.

Steve: Okay, I’m just curious why you started out with those types of ad platforms as opposed to Facebook or a different platform.

Justin: Well, I mean the demand is there already. I think Facebook works incredibly well for interests and for really specific targeting. At the time we didn’t really know who our customer was and we were trying to figure that out.

Steve: I see.

Justin: And so rather than spend, and you know Facebook is more expensive and so rather than spending a ton on Facebook ads to figure that out, we just decided to focus on people that were already searching for what we had to offer and in a space that was highly non-competitive at the time.

Steve: Okay, did you have a subscription model in the beginning or did that come later?

Justin: We did, just from day one.

Steve: Oh, okay so can we talk about how you steer people towards subscriptions versus one time purchases?

Justin: Yeah so we do give them a discount and that is the biggest thing is someone will sign up for a subscription as opposed to an overall purchase because it’s about 25% cheaper.

Steve: Okay and did you have any idea like how long to make these subscriptions? Like does a typical bone broth consumer like to buy like three months in advance, or like how did you structure all these things in the beginnings?

Justin: Yes so we did monthly just pretty much out of the gate, and we are still figuring out and starting to be slightly more data driven around our subscription program to figure out what works and what doesn’t.

Steve: So with these influencers, were they driving people straight to like a special landing page or just the site?

Justin: They — it’s a good question. So at the first they were doing just the site and then we started setting up special landing pages.

Steve: Okay and then how do these special landing pages look? I’m just kind of curious how it would be different from your landing page, because your landing page actually expresses your value proposition really well.

Justin: Thank you.

Steve: I took a look at it before this interview.

Justin: Thank you yeah; it was just longer form stuff, so talking a little bit more about the benefits, the founding story, giving a special offer, all that kind of stuff.

Steve: Okay, and so when someone lands on your site, do you do any sort of giveaways or anything or do you just go for the sale right away?

Justin: Yeah, we usually just go for the sale.

Steve: Okay.

Justin: I mean we have email capture where people can enter their email and get a discount and stuff like that but you know.

Steve: Okay. So today like what is your main drive? I mean you mentioned earlier that you are that you are a seven figure business in just 18 months. So what are your primary drivers of traffic and sales?

Justin: Yes, we have a lot of organic traffic. We do a good bit of wholesale as well, and then as of May this year we will be in every whole food in the country so.

Steve: Wow! Okay, let’s talk about that because I heard it’s pretty hard to get into whole foods.

Justin: Yeah, it can be. I mean we fortunately had unique products. We got into two regions as kind of a test, and after the test, I mean they performed well enough in there, in the space that they gave us that our numbers were really strong, and they approved us for a national roll out. And so it was pretty not easy, but our numbers made a very clear case that we should be in as many whole food stores as they can put as in, and that, when you can say that you guys are losing money by not having us in your stores, that makes it a lot easier.

Steve: I just want to take a moment to tell you about a free resource that I offer on my website that you may not be aware of. If you’re interested in starting your own online store, I put together a comprehensive six day mini course on how to get started in ecommerce that you should all check out. It contains both a video and text based tutorials that go over the entire process of finding products to sell all the way to getting your first sales online.

Now this course is free and can be obtained at mywifequitherjob.com/free. Just sign up right there on the front page via email and I’ll send you the course right away. Once again that’s mywifequitherjob.com/free, now back to the show.

But not everyone can just apply to whole foods like right off the bat, right? Did you have to work your way up there, or did you just apply right away pretty much?

Justin: Yeah, we applied and we got in within six months of the company’s existence.

Steve: Oh my goodness, okay.

Justin: Yeah.

Steve: Okay, that is unusual, okay.

Justin: Anyone can apply, they just don’t accept, they don’t accept everyone because a lot of people have products that they don’t, they aren’t necessarily differentiated or on trend or something that whole foods is necessarily looking at. And so I think if you have a product or you can tell a story better than what’s currently in whole foods, you can actually get into whole foods quite easily, like they are always looking for new stuff. That’s kind of the only advantage they have over any of the other big grocers.

Steve: What does the application process look like, just curious?

Justin: So we just filled out a bunch of stuff and said, here is the company sourcing practices, financial stability health, ability to make as much product as they needed, and submitted some samples and that was kind of that.

Steve: Really, okay and then are you ready to talk about the margins and the financials when going with whole foods.

Justin: Yeah, I mean they generally look for a 30 to 40% margin, and so you are selling them wholesale at something that allows them to get to that.

Steve: Okay, and in terms of volumes, like what do they expect?

Justin: It’s still dependent on the category and the product that you have; it’s going to be totally different.

Steve: Okay, but for yours for example.

Justin: Yeah, for us they want to see a certain dollar amount per store per week that we will sell in terms of our products.

Steve: Okay, I mean do they come to you and say, hey, we need this amount of volume? Can you actually deliver?

Justin: No, you just kind of — because there is no way that you would know that if you are not in retail. Like they will know that better than you, but they will say like here is how this category moves on average. So an average product will move call it 20 units per store per week. That’s kind of the bench mark. If you are above you are going to be great, if you are below that like it will be a low performing product and we are going to look to get you out of there within the next like six or 12 months.

Steve: I see, do you — can you comment on some of the performance metrics? I imagine they tested your product in a couple of stores first, right?

Justin: Yes, they put us in a couple of regions first, and then moved it up as they saw a good performance, yeah.

Steve: What is considered good performance, I’m just curious?

Justin: Well, so this is what I’m saying it’s so dependent on the category that for a — I don’t know, for a serial product’s good performance might be like $20 per store per week whereas for a kombucha or a juice, a good performance would be $200 per store per week.

Steve: Okay, Okay.

Justin: And that’s because it just is reflective of how much, how often and the price point of these different products.

Steve: And your products get classified under meat or?

Justin: We get classified; we are in the broth and stock section.

Steve: Broth and stock section, okay, okay.

Justin: Yeah.

Steve: And so you are performing better than average I guess in that category, and then they just want to do a national roll out after that point.

Justin: Yeah, exactly.

Steve: Okay. How does the — how do you return an expired product when you are selling to like a food store.

Justin: Yeah so I don’t really know because we have a shelf stable product to be honest, and so we’ve never had issues with expired products or anything like that. Returns are totally up to the retailer.

Steve: Okay.

Justin: Like that’s a retail level decision.

Steve: Okay, so because your product is a two — did you say a two year shelf life?

Justin: Mm-hmm.

Steve: Okay, so people tend to consume it within that period, so you don’t — okay, so this all comes in to the pack, like the packaging is actually a very important part of your value prop.

Justin: Yup.

Steve: Okay. All right, so you have whole foods, has that happened yet?

Justin: No, that’s happening in May.

Steve: Oh man, that’s exciting.

Justin: Thank you.

Steve: Okay, so does that — how does, is that going to be like the bulk of your revenue once that starts happening?

Justin: Probably not. The bulk will still probably be ecom.

Steve: Interesting, okay so let’s talk about ecom then. So you are making money through ads and influencer marketing. Is that where the majority of sales are coming or you are doing other channels as well?

Justin: Yeah, definitely. Most of it is coming through ads and then some organic and just kind of some brand recognition as well.

Steve: Okay and in terms of the influencers is that like a consistent amount of traffic, or does it tend to be like a very big bust once like the post or the Instagram thing comes out, so…

Justin: Definitely bust which is why we are investing in content and SEO pretty heavily because that’s a lot more steady.

Steve: Okay and so in terms of like your SEO strategy, are you targeting a specific audience. Like do you know who your audience is now at this point?

Justin: Oh we do, yeah.

Steve: Okay and what’s your content strategy like?

Justin: Yeah so if you look at our blog which we are still working. We just made our first content a couple of weeks ago, but we are still working on to refining it, but it’s just a lot doing really in-depth long proven content around topics people care about that are also related to bone broth. And so nothing crazy, we are not like content marketing geniuses over here. We are just still in kind of the basics and it seems to be working so far.

Steve: And does email, like I imagine you are gathering emails and then emailing out these posts. I’m just curious like what your strategy is for getting people to continue the subscriptions, and what your infrastructure looks like.

Justin: Yeah so we use Klaviyo. We have a third party logistics provider that does all our fulfillment and then yeah, and in terms of keeping people retained like a lot of people were making their own broth in their home before finding out about Kettle and Fire. And so, we just kind of replaced that habit to save them some time, and many people are still with us you know, a year plus later.

Steve: Okay, and then you mentioned you are on Klaviyo. So are you using all of these standard campaigns, bending card, win backs?

Justin: Yup, exactly.

Steve: Okay. What does your pre purchase sequence look like, and how do you get people to actually sign on?

Justin: What do you mean by pre-purchase sequence?

Steve: So when you gather an email like you already have some sort of drip sequence, right?

Justin: Yeah.

Steve: I’m just curious, what is your lead magnet to get them to sign on, and how do you kind of structure the campaign to actually get them to actually buy the product? So first of all are you only collecting emails on your blog, or you are doing that on the main store as well?

Justin: We are doing it on the main store as well. Main store is 10% off and then on the blog it’s bone and broth recipe book.

Steve: I see.

Justin: And then we just kind of do a drip sequence around like here is how, here are the benefits, here are why kind of buy your special, why we’re unique, all of that.

Steve: Okay and so this is the first couple of emails and then do you give any hard sell or anything or is it just — does the product sell itself? Because it’s the only…

Justin: Yeah, so we don’t do any hard sales, and that is for a couple of reasons. Like I don’t — one thing I’m very conscious of is I don’t want to over sell this product, I don’t want to kill this base, like you see some people like doctor X is over selling like a bone broth protein supplement he has. And I think that that just leads to people not trusting the product and not trusting the benefits in general which is not a great thing.

And so I’m very, very conscious of that and I think that as long as our offer stays strong, and as long as we are the best option out there I think I am, I feel very comfortable that if you are going to want, if you are going to drink bone broth like we are the best option that you have. And so then the question is how do you get someone to drink bone broth, and that then leads back to more of the educational piece, and so that is where we tend to go instead of like hard sales and stuff like that.

Steve: Okay, are you trying to actively build a community around your products?

Justin: Yeah, so we are working on this. Like we are working on Facebook groups, we are working on all kinds of stuff, but we are still working on it. It’s certainly not something that’s…

Steve: No, no, no worries I mean you guys are only 18 months old and kicking butt it sounds like.

Justin: Yeah, exactly, so we still have a lot to do.

Steve: So it looks, okay so we have wholesale, we’ve got influencer marketing and we’ve got just ads, any other channels that I’m missing?

Justin: No, those are the big ones.

Steve: Okay and do you anticipate moving forward? Like I’m just curious what direction you are going to scale this. Is it going to be primarily to the wholesale channels? Are you pursuing more wholesale channels? Like where are you spending your efforts right now?

Justin: Yeah, so a lot of it is wholesale. I mean getting ready for the whole foods launch is a really big thing for us right now.

Steve: And what is involved in that? I mean I would imagine just huge volumes, right?

Justin: Yeah, definitely volumes and it’s also you know a lot of stuff is involved in terms of getting the products ready and making sure we can do production.

Steve: Does your co-parker — are you going to grow out of your existing co-parker at some point?

Justin: Sorry, could you say that again, Steve.

Steve: Are you going to grow out of your existing co-parker at some point?

Justin: At some point yeah. It will take us a little bit though. They have a lot of capacity but yeah, definitely at some point we will have to rethink our production.

Steve: And at some point does it make sense to like do it yourself? Like I’m just kind of curious what the economies look like of using a co-parker versus doing it yourself.

Justin: Yeah, it certainly might, I mean that said though being a new food brand, a new food startup is all about growth. Like that’s what the category leaders are looking for and that’s kind of big CPG companies are looking for. And if we were to build our own facility, we’ll probably be on the order of three to seven million dollars, and if we can plough that back into growth, that might be a better investment for us, but that’s something we have to consider.

Steve: Everything is bootstrapped for you guys, right?

Justin: Yeah, so we were bootstrapped and profitable until November where we raised a small round.

Steve: Oh okay, what were the, what is the rationale for that? Was it just for inventory purchases?

Justin: Partially inventory, partially to have good people just behind us who know the space better than I do, because it’s my first time in it, and also just to have a little more, a little less pressure on cash flow, so we could like hire forward and not need 30 day payback periods for new hires, but instead like three to six months.

Steve: Okay and how many people do you guys actually have to run this operation?

Justin: We have nine now.

Steve: Oh wow! Okay.

Justin: Yeah.

Steve: And the bulk of that do you have like a full time engineer on staff or?

Justin: No we don’t.

Steve: No, okay so everyone is pretty much marketing and product and sales.

Justin: Yeah, marketing product, customer support, yup.

Steve: Okay. Cool man, hey Justin we’ve been chatting for quite a while. Where can people find out more about bone broth? Where can they pick up your products? Where can they find you online?

Justin: Yeah, so check us out kettleandfire.com. You can enter your email, get a coupon, all that good stuff but we also, we talk about this all the time in the blog. This is something I obviously care about a lot, and so yeah so kettleandfire.com is the best way to find us.

Steve: And for the people listening actually can you just give like a summary of what the nutritional benefits of bone broth are?

Justin: Sure yeah, so at a high level bone broth is full of a ton of nutrients and amino acids that you don’t often get in your diet otherwise. And so you know collagen, glucosamine, glutamine, glycine, all of these amino acids and proteins that form most of the body’s connected tissues and lead to skin health, digestive health and the like, they are all highly, highly present and concentrated in bone broth.

Steve: And how quickly can you see the effects? I’m just curious like yeah.

Justin: That’s a good question. So we find that people that drink it call it three to five times a week already are in 48 ounces will start seeing effects after two to three weeks.

Steve: Interesting, in their joints, and then your brother it helped in your brother’s recovery from his knee problem as well, right?

Justin: Yeah definitely. I mean we have some crazy stories from customers that are pretty cool about like no knee pain; 115 year old customer says she doesn’t use the cane anymore which is pretty crazy.

Steve: Wow, okay so all these stories can be found on the Kettle and Fire website.

Justin: So not now, we are working on a page that talks about these stories a little bit better.

Steve: Okay.

Justin: So it’s definitely something we are working on.

Steve: All right, well, there you have it. Kettleandfire.com guys, go check it out. The first USDA grass fed bone broth. Justin thanks a lot for coming to the show man, really appreciate your time.

Justin: Yeah, thank you so much Steve, I appreciate you having me on.

Steve: All right take care.

Justin: Take care.

Steve: Hope you enjoyed that episode. Justin’s story is pretty amazing and I really admire the guy for taking on that extra risk of selling food products online. For more information about this episode, go to mywifequitherjob/episode177.

And once again I want to thank Seller Labs. Their tool Scope has completely changed the way I choose keywords for both my Amazon listings and my Amazon advertising campaigns. And instead of making random guesses Scope tells me exactly which keywords are generating sale, and within the first week of use I saw a 39% increase in sales. It is a no brainer. So head on over to Sellerlabs.com/wife and receive $50 off. Once again that’s sellerlabs.com/wife, and you can actually try the tool for free.

I also want to thank Klaviyo which is my email marketing platform of choice for ecommerce 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 auto pilot. So head on over to mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s mywifequitherjob.com/ K-L-A-V-I-Y-O.

Now I 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 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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176: How To Use Instagram To Explode Your Business With Nathan Chan

How To Use Instagram To Explode Your Business With Nathan Chan

Today I have my buddy Nathan Chan on the show. Nathan is someone who I met recently at Social Media Marketing world and I’m really glad we did. He’s the owner of Foundr Magazine which is an incredible resource for entrepreneurs.

He’s had some incredible guests on his site and podcast including Richard Branson, Gary V, Tony Robbins, Tim Ferriss and other famous entrepreneurs. What’s even more amazing is that he attracts most of his traffic through instagram of all places. If you look at Nathan’s account, he has over 1 million followers which is crazy.

So today, we’re going to do a deep dive into Nathan’s Instagram strategy and how he’s used IG to grow his magazine and his podcast.

What You’ll Learn

  • Why Nathan created Foundr magazine
  • How to establish contact with other famous entrepreneurs
  • Nathan’s outreach strategy
  • How Foundr makes money.
  • How Nathan uses Instagram to market his site.

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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Transcript

Steve: You are 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. Now today I’m thrilled to have Nathan Chan on the show, and today we are going to discuss how he created Foundr magazine, the leading resource for entrepreneurs by promoting it through Instagram. It’s going to be a great episode.

But before we begin I wanted to give a shout out to Seller Labs for sponsoring this episode, and specifically I want to talk about their awesome Amazon tool, Scope. Now if you know me I always get really excited about the tools that I like and use, and Scope is a tool that actually increased my Amazon sales on several listings by 39% within the first week of use, crazy, right?

Now what does this tool do that could possibly boost my sales so quickly? Well, quite simply, Scope tells you what keywords are driving sales on Amazon. So here is what I did. I searched Amazon and I found the bestselling product listings in my niche then I used Scope to tell me exactly what keywords the bestselling listings were using to generate sales. I then added these keywords to my Amazon listings and my sales picked up immediately.

So today I use Scope for all my Amazon products to find high converting keywords in the back end as well as for my Amazon sponsored ad campaigns. So in short, Scope can boost your Amazon sales almost immediately like they did for mine, and 39% is nothing to sneeze at. Right now if you go to Sellerlabs.com/wife you can actually check out Scope for free, and if you decide to sing up you’ll get $50 off any plan. Once again that’s Sellerlabs.com/wife.

Now I also want to give a quick shout out to Klaviyo who is also a sponsor of the show, and once again I’m excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store and I actually depend on them for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not a different provider. Well 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 and that adds a lot of functionality. So let’s say I want to send an email out 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.

Now Klaviyo is the most powerful email platform that I have 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 I have my buddy, Nathan Chan on the show. Now, Nathan is someone who I met recently at Social Media Marketing World and I’m really glad that we met. He is the owner of Foundr Magazine, which is a great resource to hear the stories about today’s successful entrepreneurs and learn what’s needed to be successful yourself in the business world.

And he’s had some incredible guests on his site and podcast including guys like Richard Branson, Garry Be, Tony Robbins, Tim Ferriss, and other famous entrepreneurs. And what’s even more amazing is that he attracts most of his traffic through Instagram of all places.

Now, if you are look at Nathan’s account or Foundr Magazine’s account I should say, he has over one million followers which is crazy. So today I was hoping to do a deep dive into Nathan’s Instagram strategy and how he’s used IG to grow his magazine and his podcast. And with that, welcome to the show Nathan, how is it going man?

Nathan: I’m doing great, thanks Steve. Thank you so much for having me brother. It’s an absolute honor.

Steve: Dude, it’s an honor to have you on the show. It was a pleasure meeting you, what, a couple of weeks ago, was it now? I think you are still jet lagged; it was last week, probably, right?

Nathan: Yes, it feels like last week, it was like yesterday man.

Steve: So Nathan what’s the story, man? Why did you decide to create a magazine of all things?

Nathan: I wish I could tell you it was like a crazy strategy, but I just kind of fell into it dude. I was working in a job that I really didn’t like. This was what? Four years ago and I never started a business before, but I started to read a lot of books around personal development and also just you know 4 Hour Work Week, Rich Dad Poor Dad, just you know all these great kind of iconic books you can grow rich that people read to improve themselves.

And there was two books in particular that really, really changed my perspective, almost made me see the matrix. I think when you are working nine to five job, corporate job, it’s easy to think that’s all there is. That you are not going to start businesses, nothing at all possible but those books opened up my mind to what is potentially possible, and that sparked the seed of really deep interest.

So I started listening to podcasts like Pat Flynn and reading his blog, or we speaking to Yarrow. I used to read Yarrow’s blog. For these guys it was like so cool and then as time went on I was like you know what, I think I should do something. So I started playing around with affiliate marketing and I remember I created this website called bestsmellingcologne.net which was absolutely ridiculous at the time. And then what happened was this opportunity came about.

This guy that I was following, his name was [inaudible] [00:06:16]. He was creating this software, this SaaS product that would allow you to produce your own digital magazine, and I just thought that was such a brilliant idea. And then so I fell in love with the idea of producing a magazine, but I didn’t know what the topic was. At first the topic was going to be on horse racing, because horse racing is really big in Australia.

Steve: Interesting.

Nathan: And then I ended up — that didn’t end up working out. I was going to do with one with my best friends and roommates at the time that I was living with, and that didn’t end up working out. And we said no, this is not going to work because he got a full time job and he couldn’t do anything on the side, and then I was like I’m going to do my own thing but he was a horse racing journalist.

So I was going to be like kind of marketing and tech guy sort of thing, and that’s when I was just like okay, what else could I do? And I just wrote down a huge list of things that I’m passionate about, I’m interested in and just started deep diving into thinking about how I can differentiate myself in the market place which is a really, really key thing and I’m glad that I did.

And yeah, I identified that there wasn’t really a business magazine in the space that spoke to aspiring novice stage, at least stage startup founders and entrepreneurs and also millenials. And yeah, that’s kind of what happened is I just was like okay, this is what I’m going to do. I’m going to stay in my day job and do this on the side and see how it goes, and I’m going to give it a good hard crack for a year and then it just kind of took off and the rest is kind of history man.

Steve: I vaguely remember when I first heard of you and I think like one of your first big names, like the first guy you landed was like Richard Branson, right? I want to say, was it?

Nathan: Yeah, yeah, it wasn’t the first one. We are related with Richard Branson. He was in the first four months, three to four months that I landed interview with Richard Branson, and that was for issue number eight.

Steve: Okay.

Nathan: And we didn’t start the podcast right away. With the podcast it’s only been around for two years. I started the magazine exactly four years ago now.

Steve: Who was your first big name guy that you got?

Nathan: I don’t know. Classify big name.

Steve: Well, like a Richard Branson type. Like, I’m just kind of curious.

Nathan: It would be Richard Branson then.

Steve: Okay.

Nathan: It would Richard Branson, yeah, yeah.

Steve: That’s when you came on the map for me and I was just curious like how did you get him first of all? Like what’s your outreach strategy?

Nathan: So a few things, we wrote an in-depth blog post 6,000 words to detailing the exact process. So you can go there, foundrmag.com/getinterviews. No opt in required, just check out the blog post, it’s really, really in-depth but the way — that breaks it down to really, really deep level. But the main premise of it Steve is one, I find out who the gate keeper is. Who is the person that’s going to be the decision marker because it’s usually actually at this level with an entrepreneur that’s famous or an influencer that is as famous or influential as Richard Branson, he’s in our niche, the entrepreneurship niche, they don’t even really make the decision. It’s actually a PR person usually or you pass on to their assistant.

So you need to find who that gate keeper is. It might be an agency that they are paying. I’ve got a lot of individual through agencies, like that is how we got our first interview was actually both of our interviews with Tony Robbins, dealing with separate PR agencies. So it depends on the gate keeper, you need to find the gate keeper, assistant, PR agency or internal PR person in the company. How do you find that person?

You can use a tool like Clearbit, C-L-E-A-R-B-I-T. You can use a tool like Email Hunter, you can just do Google searches on LinkedIn to find out who that person is that’s head of PR or whatever, and then you need to start contacting them. You can call with email and you can use tools like rebound.cc which automates your follow up, say that person doesn’t respond you can see, you can do something like that, or you can call them on the phone which is something that I actually prefer more times than not now. And you just keep following up and if they say no, they say no, if they say yes, they say yes.

Some people like for example Barbara Corcoran of Shark Tank, she said no then I come back to her a year later. So I spoke to her assistant and I found her contact details from her personal website and then I come back. So it’s all about the follow up too man, and it’s all about also making it a no brainer by finding out what that person wants.

So for example before I met you in person at Social Media Marketing World I actually interviewed Tony Robbins in person in New York and that came about because he was launching his new book Unshakable. So it’s a great way to find people that are looking to do interviews at the present time is when they are launching a book or a new company. So for example you can go to the Amazon coming soon list, and I’ve already identified, I sent someone in my team. I’ll tell you right now you find this interesting, I’ve opened up my slack, just give me a second.

I identified, I was looking in the app, Amazon coming soon literary last night of people we might want to interview, and I said these are the people you want to get in contact with, because I don’t do the outreach anymore, someone in my team does the see up. And there was somebody that is launching a book — yeah, so there is Kevin Kelly the founder of Wired Magazine. He is launching a book called Inevitable Understanding Technology Forces of the Future, and then there is also Sheryl Sandberg, COO of Facebook and Foundr of LinIn and she’s launching a book called Plan B — no, Option B I think, or Plan B.

But either way they are two targets and they are going to be looking for a lot of press, and they are going to be much easy to get interviews with as opposed to going in cold. And they are super busy trying to grow their company and super attached to whatever their mission, what they are driving and it’s not a focus. So with Richard Branson, I played on the fact that his first business magazine, his first business venture was a student magazine and also that our audience is young entrepreneurs and he does a lot of work on helping, and he’s been working with the next generation of entrepreneurs.

Steve: Did you have an audience at that time?

Nathan: No.

Steve: No not at all. So he just did it because his story resonated with him, right?

Nathan: He did it more than anything because one I played on the fact that his first business venture was a magazine. Two, I pitched the right person and three, because we had a magazine. A magazine is much more powerful than having a blog or a podcast or like, and it’s so much more influence. I can’t put my — it’s hard to explain Steve, but there is a lot of credibility that comes when you produce a publication even if it’s just digital in the app store. There is a really high perceived value.

Steve: Interesting, okay.

Nathan: Just like if you have a TV show versus a YouTube channel, you know what I mean?

Steve: Right, right, right, okay, okay. That’s interesting and then once you started landing one I imagine landing other big names is much easier then afterwards, right?

Nathan: Yeah, and we started to build up our audience and we were able to justify that this person, the exchange in value, their time versus exposing them to our audience was a mutually beneficial exchange in value. I got lucky with Sir Richard Branson and he really did help me get my start, and then I really built off the back of that in a big way.

Steve: Sure yeah, of course, of course.

Nathan: I’ve leveraged the shit out of that man; I’m not going to lie.

Steve: So I’m just curious, so you have this magazine and like if were to start today I don’t know if I would go into blogging or what not. I’m just curious so how does Foundr Magazine make money? Is it the traditional way with like advertising or do you have other ways of making money?

Nathan: Yeah, so we have an interesting business model. It’s a non-traditional media business model, non-traditional publishing model. So most of the traditional media companies, they just make money from ads and subscriptions, mainly advertising. We do make money from ads and sponsorship but it is probably the lowest tickets where we generate our income.

We have a membership site where we generate recurring revenue from. So that’s a subscription base. We also have the magazine which is charged. We charge for the magazine as well which is a subscription base, and then we also have educational courses and products and will eventually get into events.

Steve: Okay.

Nathan: So that’s — and I want eventually build a SaaS products. So I see the magazine as the face of the business and then connecting people that follow the brand, the podcast, the blog, social content, all that free stuff. You know 99% of our stuff is free and then we kind of segment our audience finding out what their problems are as founders, entrepreneurs, if we can further solve them with educational courses, the magazine, membership site, events, a SaaS tool eventually etc. etc.

So that’s our model and I didn’t — I will not claim credit for this model. There is a company called Maquoda, M-A-Q-U-O-D-A and they help — it’s like a consulting company that helps old school publishers. Like people that have been publishing a magazine for like 20 years. They help them digitize it and make it, turn it to this business model that I discussed, I described. It’s called a multi faceted platform.

Steve: Okay.

Nathan: Multi-platform or something they call it and their blog is amazing. So I just read all the free stuff off their blog and stole that idea.

Steve: What generates the most revenue for you of all those sources that you specified just now?

Nathan: Definitely the educational products.

Steve: So these are the courses, right?

Nathan: Yup.

Steve: Okay, okay, got it. Okay, so let’s get into the meat of this. So you have this magazine, you have some content, was that correct actually in the intro that the majority of your traffic comes from Instagram?

Nathan: Not majority, but it’s our highest traffic source definitely on social. I think organic might be marching it now because we are pushing pretty hard on organic.

Steve: So Google you mean, right?

Nathan: Yeah.

Steve: Organic Google traffic?

Nathan: Yup, yup, yup.

Steve: Okay. I was looking at your Instagram account and it looks like you have over a million followers, and what I would like to do actually is maybe take it from the perspective of someone who has like less than a 1,000 followers. Like how do you build it up to a million? And first of all what is the time frame with which you build those million followers and what is the fastest way to kind of build a following that’s very targeted?

Nathan: Yeah, sure thing. So I started on Instagram in November 2014. It was the same month that we launched the podcast.

Steve: Okay.

Nathan: And I stumbled across it purely because I had left my job because I was working with Foundr on the side as I mentioned. I left my job and I stumbled across it because I was looking for a [inaudible] [00:18:05] channel and I don’t know — I didn’t know PPC and still to this day we are not that strong on PPC to be honest with you.

And yeah, I was testing many different channels and I tested Instagram and I just saw the subscriptions of the magazine spike, because I had a friend that has in fact a few different ecommerce businesses and was crashing it with Instagram two years ago as a traffic source. And he told me, he gave me some tips and I followed those for a couple of days, and I just saw on Google analytic our subscriptions spike, and I was like yeah, I’m on to something here.

Steve: Okay.

Nathan: So I built Instagram to a million in about two years, two years.

Steve: That’s crazy.

Nathan: Probably two years and three months and…

Steve: All right, so what were these tips? You are killing me.

Nathan: Yup, yup, so pretty much the first thing I did was I did a competitive analysis looking at the kind of content that our competitors were posting on social because please note at this stage we had no presence on social. Now we have six figure followers on Twitter, Instagram, and Facebook, and now our next focus will be YouTube.

But I had to do a deep competitor analysis to find out what kind of content other magazines, other people that were producing entrepreneurial content were producing on their social channels. And one thing that I found and I don’t know why but startup tips and facts and quotes just killed it for like Success magazine and all these other publications.

So I was like okay, let’s just test that, and obviously differentiate ourselves by posting photos of the magazine and the podcast and lessons learnt from the founders we had interviewed, and photos of people and bits and pieces, and probably we should show a bit more behind the scene stuff, but the core emphasis is “Start up tips and facts.” So it would attract the kind of people that are interested around entrepreneurships and startups.

And that’s what I started doing and every time that I posted about the magazine and told people to click on the link in our bio to get the free Richard Branson issue, or subscribe to the magazine. And I did a direct link to the iTunes link and we are on Google Play as well, but I’ve found that most of our revenue is generated from the app store and a lot of people that — 99% of the people that are on Instagram are on their phone.

So if you press on that Apple link in our bio, they just have — they are two clicks away. One click to open and it says, yes, do you want to open this app? Do you want to open the app store? You say yes and then you say the — you get taken right to the landing page to download the app and then one more click they press download, obviously put in their password and then they got the app. It’s like literary three hoops and jump. It’s a low — I guess it’s, there is low resistance to download the app. It’s free, you get the free Richard Branson issue, and yes that was the second thing.

I started producing content that our audience loved, then I started pushing people to click on the link in our bio. And then the third thing was I discovered that one of the fastest ways to grow an Instagram account is to get other people to share your content and to influence the marketing.

Steve: Okay.

Nathan: And I did that at scale man, and I did pay a little bit but I didn’t really have that much money. So what I did was I paid a little bit but I convinced people and found people that had a similar size following to Foundr and re-share each other’s content, and that term, that method is called S for S, share for share. Share that for share that where you team up with other companies, people, pages, you name it and get them to share your content.

And if you do that, you do those three things; produce awesome content that your audience loves that resonates, that looks great. You do it at scale, like what we do. We post anywhere between five to nine times a day and you produce content that your audience love, that looks great with great aesthetics. You encourage people to click on the link in your bio. If your account is verified you can get people to swipe up on your stories like what we do a lot, and then also another thing that you have to do is make sure that you are consistent, never stop and then work with influencers. Yeah, you are in a good spot, man.

Steve: So let me ask you this, so you say you post five to nine times per day. I mean that sounds like a lot. If you are first starting out, is that what you would recommend as well or?

Nathan: No, no if you are running an ecommerce business you only have to post one to two times a day. You just have to make sure your photos of the products looks great and you have to make sure that photos of people using the products and people that you want to — your audience aspires and you have to know your audience aspirations, pains, gains, wants, needs, problems, frustrations, desires, and you have to match that into the brand and the communication of those images that you’re a putting out there. That’s really, really key.

So we don’t have any ecommerce based products. Well, actually we do. We are just about to launch a physical book. We are about to go live with that like we did Kick Starter but I know this because I know a lot of ecommerce founders that are crashing it plus I’m about to launch my own ecommerce business, and these are the things that we will do. And we also have students that have done our Instagram course that have made easily over a million dollars just from Instagram from doing this. Using influencers, getting people to take photos of the products, giving them away for free, doing giveaways, you name it man.

Steve: I just want to take a moment to tell you about a free resource that I offer on my website that you may not be aware of. If you’re interested in starting your own online store, I put together a comprehensive six day mini course on how to get started in ecommerce that you should all check out. It contains both a video and text based tutorials that go over the entire process of finding products to sell all the way to getting your first sales online.

Now this course is free and can be obtained at mywifequitherjob.com/free. Just sign up right there on the front page via email and I’ll send you the course right away. Once again that’s mywifequitherjob.com/free, now back to the show.

So in terms of just the actual images themselves, do they have to be professional? Like did you go out and hire like a photographer for your initial postings?

Nathan: No, so with full transparency, like this is what — I will tell you what we are going to do. It might be helpful actually, 1,000 followers, less than a 1,000 followers. This is where we are at now with my girlfriend’s company, right? And you can watch it grow man, you can follow along in a couple of months, watch it grow, okay. So we are starting an ecommerce business from scratch. We did pay a few hundred dollars to get a professional photographer to take great images of the products for the website.

Steve: Okay.

Nathan: We will be able to use that collateral on the Instagram page but all the other photos that you see now for that product and the product if you want to check it out, you go to Instagram.com/Healthish, H-E-A-L-T-H-I-S-Hco, if you go to Healthishco you’ll be able to see that all those photos are taken with your phone and just touched up with apps. What’s really going to get the growth going, like we have already got people messaging us all the time with only a few hundred followers saying, when is this product going alive? How can I get? How can I get it? How can I get it?

And we’ve got a waiting list with only like 100 people on it, but it doesn’t matter. The point of the story is what you have to do is you need, you always need professional photos done to make it look the part, look great on the website and then the key thing is sending out that product. Allocating it 100 units, 200 units to fuel that user generated content and work with influencers. So you want to send like this bottle we are going to send to Valley Arcade I think 300 bottles, send to 300 influencers.

And we are going to absorb that cost because we know our margins and those influencers as part of the deal is they have to post to their audience and that’s one piece of content that we can use. Plus every single person that we send the bottle to gets a card where we encourage them to share and post on Instagram and we’ve incentivized it. So that’s another thing that we’ve done to encourage user generated content.

Steve: Let’s talk about the influencers, like how do you convince them to post?

Nathan: Give them the product for free bro.

Steve: And that’s good enough?

Nathan: Yeah.

Steve: So can you give me an example of like an outreach. So let’s say you’ve tracked down someone on Instagram. So one, how do you find their contact information? Two, like what does your outreach email look like, and what’s the size of these influencers right now in your case when you are launching this ecommerce product?

Nathan: Okay, so sizes really range. With full transparency, I think if we try to send a bottle for free to someone with 300k followers they probably will say yeah, we can post it plus its going got cost this, but we don’t want to do that.

Steve: Okay.

Nathan: So we are going to look for influencers, micro influencers, anywhere between the size of ten to 50k, maybe upwards of, maybe close to 100k.

Steve: Okay.

Nathan: And we are going to cut deals. The outreach depends. We go to the profile, if somebody’s profile has their email address on their profile then we know that they want to hear from us, then we send them an email, otherwise we direct message them.

Steve: Okay.

Nathan: And then we just take it from there and it’s quite manual. But you just got to get down and dirt man, and from doing this at scale we will start to get other people to share our content, share photos with the bottle. Them having the bottle it will generate sales, it will generate us content and it will generate us followers, and as time goes on we’ll organically get more and more followers.

I’ve got a whole ton of other strategies that we can use that I can talk about if you like right now how we are going to grow it, but a big one will be influencers, and just working with them one to one and what the outreach looks like. We will just sell the product man. Sales process, hey, we are launching a health based product, this is what we are inspired by, this is our why, we’d love to send you a bottle in exchange for you posting, doing one post. If you are interested in this, here is the directions of what we are looking for, and we’ll just constantly follow them up until they post. Please email us once you post it.

Steve: Do you provide the image or do you have them take the image.

Nathan: No, they have to take the image. That’s what is very, very key Steve because it’s all about the user generated content. For a physical product it’s one of the best ways to sell man, is to show somebody else using it, every day people like me and you using the product. If you get models, it does work if you use Kim Kardashian or Kendall Jenner, it does work but the everyday people is what’s most relatable bro.

Steve: Okay, Okay.

Nathan: Makes sense?

Steve: Yeah, and then do you give them instructions on like what hash tags to use and like how specific are the instructions that you give them when they post?

Nathan: Yeah, look, that’s — we can get supper complicated or we can make it simple. It doesn’t really matter. We can get them to use the Healthish hash tag, we can get them to use the hash tag that lets us know so that we don’t have to always search or whatever. We can get them to use Healthish promo or whatever.

Like we can get a Healthish one, Healthish one, two, three. Like it doesn’t really matter, like we can’t tell what hash tags to use, but I think the main goal is one to expose your product to their audience, two to get the UJC, to get that content because all that content man and you want to get as much content as you can to build up this rapport and community around the brand and reputation and people using the product. That’s where it’s at.

Steve: Are there any tools that you use to find out like which influencers that you’d want to target?

Nathan: No, not really. You can do it manually, but there is Iconosquare. Iconosquare do have like a free search database and one of my friends Greta, she is launching an amazing influencer based tool called Hey, H-E-Y. It was called Nichify, if you search for Nichify or Hey you will be able to find it. But I haven’t used it yet but the platform looks amazing, we’ll probably start using that, but for the most part you can do it manually yourself.

Steve: Okay and I’m just curious like what has been your hit rate doing this?

Nathan: With Healthish with full transparency bro, we haven’t launched the product yet, so we have nothing to send to people, so we haven’t hit any…

Steve: Okay, what about when you were…

Nathan: But when I was doing Foundr, yeah I will draw from my experience at Foundr.

Steve: Sure.

Nathan: What has been my hit rate? In the early days obviously when we had no followers it was pretty rough dude. Maybe ten, 20% but as time went on…

Steve: That sounds high actually, to me at least yeah.

Nathan: Really?

Steve: Yeah.

Nathan: Well look, I was cutting deals too remember, like I was making friends with these people. I built up a book of around 20, 30 people that were in my roller decks which I would team up with and set up rotations of sharing content, and also some of them I featured in the magazine, I featured in the podcast, I featured in the blog. Some of them I mentored because I didn’t even have a product, I just had an Instagram account.

So it really depended on the mutually beneficial exchange in value. So it’s hard to draw on that one but yeah, it wasn’t really — I don’t think the hit rate was that high, but I had leverage. With Healthish I’m starting from scratch man. Hit rate would be probably I think not that high, but doing this process and being very, very gradual with it, getting down and dirty, doing things that don’t scale, this is what you have to do in the early days to build up any brand. So I have to be honest with full transparency, I’m not going to do the work, it’s going to be my girlfriend, I might help her a little bit, for the most part I’ve got run Foundr.

Steve: Okay.

Nathan: That’s the strategy and that’s what we teach to our students that have ecommerce companies and they do very, very well, like we had a student that sells hair extensions. She generated over a million dollars last year mainly from Instagram, that’s her only channel and she did exactly that. Same with another one of our students who sells 4×4 tracks. He doesn’t see, what’s interesting for him is he obviously can’t give away cars for free because he charges like 30, 40, 50, 60 70k for these cars but he finds niche pages. So here is a key differentiation Steve that you might find interesting. There is three different kinds of Instagram accounts.

One there is a personal brand account that’s like Steve Chou. You’ve got your Instagram account, you are an influencer, you run entrepreneurship, podcasting, ecommerce, FB ads all these things. So if you are a personal trainer you’ve got your own personal — if you are a personal trainer you’ve got a big account, you’ve got a personal brand page account, right?

The second one is a company/ a company brand page. So that’s like a Foundr or Healthish or Nike or Daniel Wellington or any of these brands, right? And then the third one is a fan page. Have you heard of fan pages before?

Steve: No, I’ve not, keep going.

Nathan: Fan pages are a page that is 100% dedicated around a certain niche.

Steve: Oh yes, yes, of course.

Nathan: And they don’t have a brand behind it, all they literally do is post and build follower base and then they make money from promoting other people’s products, and there are so many young kids who want to go real date. There are so many young kids from the ages of 12, 13, 14, 15, 16, 17 that I have spoken to that have these niche pages that I’ve worked with, I’ve cut all sorts of deals, I’ve done all sorts of things to get them to share Foundr’s content. And we’ll do the same with Helthis bro. We will not only work with micro-influencers and people with personal brand pages, I will use my networks and hustle to cut deals with these niche pages.

So these people that might have a collective of like a hundred million followers and they will have like literary 40 different accounts. One in fashion, one with watches, one in luxury, one on cars, it’s crazy. So those niche pages are ones that you want to try and work with as well. And then another strategy you want to build and this is something that my friend Greta did, and we are actually working on an ecommerce course collaborative ecommerce course with her that she’s teaching and she has, she runs Shopify to first build the business. She has four multi-million dollar brands and she told me she uses Instagram as one of the main traffic sources too for her ecommerce products.

And one thing that she told me was another thing you can do is actually create these fan pages yourself. So if you want to go real deep man, you can start to create two accounts, one a branded account which is Healthish which is around your brand and then two, I could create a health based account around health and fitness. Because anyone that’s following the health and fitness niche fan page they are going to be interested when every now and then throw in that product and fan pages are really, really easy to grow because people treat Instagram now like a vision board.

People post things that inspire them. It’s a little bit like Pinterest man. So there are a lot of people that create niche pages just for fun as well. So yeah man, there’s [overlapping 00:36:52]

Steve: Let me ask you; let me ask you this question. So the algorithm has recently changed so that they show more content that is getting more engagement, right? So I actually had someone else on the show and I don’t know if the episode is published yet, but they built their business through Instagram as well. And the way they started was, they were paying influencers and doing share for shares also, but what he told me was like, ever since this algorithm hit, like whenever one of those influencers shows one of their products, that post would not get as much engagement than their regular post and it is not working as well anymore. So I’m just curious what your take is on that.

Nathan: Yeah, look, there is no doubt about it that there was, there is conflict, it’s like Facebook man. Facebook or Instagram there is no doubt about it that two years ago Instagram was hotter and easier to get free traffic or a better ROI as opposed to now. But man, for me it works, for me it continues to work for our students and you look at Instagram and yes, the engagement isn’t as powerful as it was two years ago, but yes it’s still extremely powerful bro.

Steve: Okay, okay and then…

Nathan: Yeah, like I wouldn’t say that it is a channel that you should stop using just yet. In fact I would say it’s still a channel that you should be doubling down on right now and you can get an ROI because I see it day in day out.

Steve: Just curious, are you paying for ads at this point or are you still just doing everything organically.

Nathan: For Foundr or what we are going to do with Healthish?

Steve: Let’s start with Foundr because it sounds like you’ve been doing this for a while. Are you buying ads for Foundr right now?

Nathan: No, I hardly buy ads at all.

Steve: Okay.

Nathan: I have gone through phases where I have and I haven’t but for the most part after we hit 100k we haven’t really bought ads. The only time I have bought ads is when I can see the ROI and might be promoting a product or something like that. Like for example when we did the launch for our Kick Starter book, the book on Kick Starter, coffee table book. So I might buy ads for that and I can measure the ROI but otherwise no. I don’t- and I get people to share and link in their bio and stuff like that, otherwise no, I don’t really pay for ads. We just do, it’s all organic, or we get people to share our content.

Steve: When you do share for shares are you having them change their link in their bio or are they just having them like at direct to your page?

Nathan: Correct, yeah.

Steve: Okay.

Nathan: Shares for shares unless I cut a deal with and I have done this many, many times where I cut a deal with an account where a million, I might cut a deal with an account that’s like a 100,000 followers. So we’ll post one of their pieces of content, we never post products; we always want to promote Foundr stuff unless I’m really helping out a friend like Daniel for example.

Steve: Wait, a mutual friend yeah.

Nathan: Yeah, yeah, yeah, mutual friend. Yeah how we met big time because he’s actually featured me in his book as well. So like in that aspect, but I will never change linking bio but yeah, I will post the product but yeah, for shares for shares like if someone is 100k or at a million I say like yeah, yeah, post about that book and we’ll post like one of your quotes and we’ll link back to you and change the linking bio. But it will be with a niche page like a fan page man. Companies don’t do that really, branded page don’t do that.

Steve: Just curious like when you were small and like you didn’t really have a large audience at all like what did you have to offer? Like you mentioned like cutting all these deals and I’m just curious what some of these deals were early on when you were, when you had less of a presence.

Nathan: Fully subscriptions to the magazine, life time subscriptions, interview them for the podcast, interview them for the magazine, interview them for the blog, mentor them, a lot of stuff man, help them [overlapping 00:40:56]

Steve: You just get creative depending on what they want, right?

Nathan: Yeah, yeah intros, you name it bro.

Steve: Okay. I’m just curious like of all of these currencies like do you gather emails as well? I’m just curious like where in the hierarchy all these different social currencies lie? Like do you try to get an Instagram follower first or would you rather have an email address? Like what’s more valuable to you?

Nathan: Email.

Steve: Okay.

Nathan: Our email list is quarter of a million. I built that. We’ve only been list building for two years. It was over 300,000 but we removed a lot of inactives or people that weren’t opening up our emails. So it’s a quarter of a million and a lot of that is being generated from Instagram and here is the cool thing, Steve.

The cool thing about Instagram yes, we can attribute how much traffic we drive, yes we can attribute how many emails subscribers we get but what we can’t attribute is the influence that we build, the people that follow us and the people that hear about the brand or might come back to us at one point in time. And they might have originally found us on Instagram or seen us on Instagram because we are everywhere and that’s the cool thing.

And that’s something that you know you cannot measure or track, but I’m telling you man, like we don’t do this anymore because I just couldn’t keep up, but when someone would sign up to our list we’d have an indoctrination series, right. And one of the things I would ask people is what is your biggest problem and frustration? I’ll write back, I’ll write back to every email. I’d also love to know how did you find out about Foundr?

And so many people man always start following me on Instagram, start following me on Instagram. Or they’ll say I can’t remember but most of the time they say, oh yeah actually this is when I’m asking somebody in person, oh, I can’t remember, oh, I think I’ve seen you on Instagram. So that stuff that can’t be attributed.

Some of my followers on Instagram that might not download one of our lead magnets from Instagram but then will promote the podcast, they might start listening to the podcast, and then they might have actually downloaded the Branson issue. They might go and check out the website, they might start reading the blog post and then they’ll see content upgrade. Like it’s just an ecosystem, but followers to me Steve don’t really mean anything, it’s for me how much traffic you can drive, how many email subscribers because that’s the core of our business.

The front end is the magazine, the podcast, the blog, social channels, but all leading back to the email list and the email list connects people to our products, with our sales funnels et cetera, products, or services and then yeah, so I’m always of the opinion, I actually don’t really care how many followers we have. Yes, it’s great for influence and yes it’s great for spreading the message, but it’s not owned media; I’m all about owned media, bro.

Steve: Okay. So you post between five and nine times a day, can you kind of describe like what those postings consist of, are they mostly content or are most of them like postings where there is a link in bio where you want them to click on something?

Nathan: Jab, jab, jab, right, hook Gary V stuff.

Steve: Okay, okay. So we are looking at mostly inspirational quotes with maybe one post that’s a link where you want to drive an email sign up it sounds like.

Nathan: Correct and we constantly alternate the lead magnets.

Steve: Okay.

Nathan: So we have about 20 different lead magnets that we alternate between.

Steve: Can you describe what your — like you have a team that just generates this Instagram content. Like I’m just wondering for someone small out there who might not have a team like what is the really easy way to just put out Instagram content?

Nathan: It depends on the kind of business you are. If you are ecommerce and I really wish I could share with you how we do it from the Healthish brand once we launch because I really, really want to show you how it’s done for ecommerce, because I know you’ve got a lot of ecommerce people for the brands.

Steve: Yeah.

Nathan: But for Foundr man, it’s all run by VAs. I have two Vas that run the Foundr camp, that do our support, they do admin, they do loading up the blog post, the serious weapons. They run all of our social, so it can be easily done, it’s all about those systems. So I’ve got- we’ve got a graphic designer in that team and he set up these amazingly designed templates.

He did like 20 different templates and then he gave it to one of their VAs who knows how to sue Photoshop and in design, and then now she just uses those templates and he does little bit but for the most part she is creating the content and then we’ve got another one that’s posting it and has a list of – we’ve got some serious weapons in our team just VAs in Philippines that manage it all.

And yeah, look it just depends. Like I don’t want people to think you know, oh, Nathan is posting five to seven times a day. That’s what I got to do, you don’t. The key thing is being super consistent, building a community, being patient, being prepared to play the long game and utilizing influencers.

As I said we do have a course that goes in depth about so many other 30, 40 other growth hacking strategies if you want to know more, but pretty much it’s a combination of all those things. But producing content, I highly, highly recommend to really go down the path especially as an ecommerce business obsessing about UGC, user generated content.

Get your community that you are building up to stop producing that content. That’s where it’s at. That’s how you have an endless amount of content and you can use a VA or you can do it yourself and you just do social media Mondays. You create your seven posts or eight posts or ten posts, or 20 posts or whatever, spend two hours starting every Monday and do for the week and you are done. And you can schedule that up using like a tool like Later or Schedugram, totally up to you. But we posted all manually but yeah, totally up to you.

Steve: So it sounds like a good way to do this perhaps would be when someone makes a purchase you incentivized it somehow in some sort of post purchase sequence to send you a picture of them using in action which you can then use for your Instagram account, and then it kind of just feeds upon itself.

Nathan: 100% and you want to send a little cog with the product incentivizing it on that card with instructions about the product and getting, encouraging people to share and yeah, it’s all about the UGC especially ecommerce for content man, very, very key.

Steve: Is that the same with Foundr magazine as well or no?

Nathan: For us it’s easy to make those quotes and we produce a magazine issue every single month. We’ve got a hit — we are pumping out so much content man, it’s not hard for us and we have a team around us, but in the early days I used to get my girlfriend to help me. You can use little apps and this is if you want to create like, if you want to create images with writing like that you can just use a tool like Iconosquare or Wordswag, you don’t even need to be a graphic designer. It’s really, really easy.

Steve: Okay, so yeah, it sounds like your strategy would differ between an ecommerce store versus like a blog or a content based site, right?

Nathan: 100% but I know…

Steve: So it’s all that UGC for ecommerce.

Nathan: Yeah but I know how to grow a fast growing Instagram account no matter what the initial industry.

Steve: Okay, I’m just trying to summarize everything, so UGC and then rely on influencers share for shares to kind of grow your account gradually and keep up putting out content and occasionally put out an offer with a link in bio trying to get an email address or point directly to a product. Actually what would be your prerogative for an ecommerce store? Would you post them — would you have them go to like some sort of landing page where you can get email or would you just point it straight to the product right off the bat?

Nathan: For now we’ll point straight to the product right off the bat, but I will be running a series of tests like giving away coupon codes, free shipping codes, running random flash coupon codes, giving them to people, all sort of things. I think it would be a combination to be honest man.

Steve: Okay, and then you also advise to set aside some of your initial inventory for giveaways for these influencers, right?

Nathan: 100%.

Steve: Okay.

Nathan: And also running competitions, that’s key too. Another great way to network with other influential camps or you can do things like, you can do like a round up giveaway, have you heard of those?

Steve: No, go ahead, talk about it.

Nathan: So you can like if you run a health based product you can find ten other health brands and then you all promote it together; you all promote the giveaway together. And part of the rules of entering is you have to follow all these like ten accounts or something, stuff like that.

Steve: Cool and just you know what I’m thinking in my mind right now is all these things are things that I’ve done with email and it just seems — and that’s kind of why I asked you that question in the beginning. Like you can focus your efforts on getting Instagram followers or emails or turn your Instagram followers into emails. And so when I asked you that question you said emails were the biggest or more important than Instagram followers, right? So it seems like all these contests and all these shares, like these things can just go straight to email addresses instead, wouldn’t you say?

Nathan: Yeah, look, it depends on the product man, because we are switching between physical products and Foundr digital media company.

Steve: Yeah I know, it’s really confusing, yeah.

Nathan: So like for Foundr, I’m 100% focused on the email, for the Healthish based products, we’ll do a combination of both.

Steve: Okay, okay. Nathan, we’ve been chatting for a while and I appreciate your time and your expertise. Maybe we should do a follow up episode about your ecommerce brand once it’s actually launched; I think that would be interesting to the people listening here.

Nathan: Yeah, for sure, more than happy to man. Give me a few months, we’ve got a hustle, but yeah, you can watch, you can follow along anyone listening and yeah, please watch now, now the pressure is on.

Steve: Yeah, and I will link up all those pages that you specified, right? Was it satish? I can’t remember what it was now, but I’ll look it up. I’ll have my podcaster link all those up and we will follow you in real time. The pressure is on.

Nathan: Yeah, the pressure is on. Also man, well, thank you so much for having me. It was a great conversation dude; you’re a great interviewer man.

Steve: Thanks man and where can people find you online?

Nathan: Best place you just go to Foundr.com, F-O-U-N-D-R.com, so Foundr without an E, .com

Steve: Sounds good, Nathan take care man. Thanks for coming on.

Nathan: Thank you so much Steve, absolute pressure brother.

Steve: All right, take care man.

Hope you enjoyed that episode. Nathan’s story is incredible and it’s amazing how he’s been able to build his magazine so large on the back of Instagram, he’s the man. For more information about this episode, go to mywifequitherjob.com/episode176.

And once again I want to thank Klaviyo for sponsoring this episode. Klaviyo is the email marketing platform of choice for ecommerce merchants and you can easily put together automated flows like an abandoned cart sequence, a post purchase sequence, a win back campaign, basically all these sequences that will make you money on auto pilot. So head on over to mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s mywifequitherjob.com/K-L-A-V-I-Y-O.

Now I also want to thank SellerLabs.com. Their tool Scope has completely changed the way I choose keywords for both my Amazon listings and my Amazon advertising campaigns. Instead of making random guesses Scope tells me exactly which keywords are generating sales and within the first week of use I saw a 39% increase in sales. It is a no brainer. So head on over to Sellerlabs.com/wife and sign up for free, and if you love the tool you will receive $50 off. Once again that’s sellerlabs.com/wife.

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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175: How To Create Viral Facebook Pages To Drive Ecommerce Sales With Rachel Miller

How To Create Viral Facebook Pages To Drive Ecommerce Sales With Rachel Miller

Today I have my friend Rachel Miller on the show. Several months ago, Rachel spoke at my conference, The Sellers Summit, and she knocked it out of the park.

Rachel runs a popular training class called Moolah where she teaches others how to build humongous Facebook followings with rabid fans. She’s created multiple Facebook fan pages with more than a million likes and she uses these pages to drive traffic and sales to both physical and digital products.

In this episode, she’ll teach you how to drive traffic organically to your website or Amazon without spending a lot of money.

What You’ll Learn

  • Rachel’s strategy for building viral Facebook fan pages
  • How to generate your first 10000 likes
  • How she uses Facebook to market her sites.
  • How to use your fan page to drive organic sales for your physical products.

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

Ignite.Sellerlabs.com – If you are selling on Amazon and running Amazon Sponsored Ads campaigns, then Ignite from Seller Labs is a must have tool. Click here and get a FREE 30 Day Trial.
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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 are 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 with their businesses. Now today I’m thrilled to have Rachel Miller on the show, and today we are going to talk about how to create crazy popular Facbook fan pages without spending a lot of money. But before we begin I want to give a quick shout out to Klaviyo who is a sponsor of the show.

Now I’m always excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not another email provider. Well 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 purchased which allows you to do many things. So let’s say I want to send an email out 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 exactly what they purchased, that’s a piece of cake, and there is full revenue tracking on every single email.

Now Klaviyo is the most powerful email platform that I have ever used and you can try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O. Once again that’s Klaviyo, mywifequitherjob.com/K-L-A-V-I-Y-O.

Now I also wanted to give a shout out to my other sponsor, Seller Labs and specifically I want to talk about their awesome Amazon tool, Scope. Now if you know me I get really excited about tools that I use and like, and Scope is actually a tool that increased my Amazon sales on several listings by 39% within the first week of use, crazy, right?

Now what does this tool do that could possibly boost my sales so quickly? Well, quite simply Scope tells you what keywords are driving sales on Amazon. So here is what I did, I searched Amazon and found the bestselling product listings in my niche and then I used Scope to tell me exactly what keywords that bestselling listing was using to generate sales. I then added these keywords to my Amazon listings and my sales picked up immediately.

So today I use Scope for all my Amazon products to find high converting keywords in the back end as well as for my Amazon advertising campaigns. So in short Scope can boost your Amazon sales almost immediately like they did for mine, and 39% is nothing to sneeze at. Now right now if you go to Sellerlabs.com/wife you can check out Scope for free, and if you decide to sign up you’ll get $50 off of any plan. One again that’s Sellerlabs.com/wife. 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 friend Rachel Miller on the show. Now several months ago Rachel spoke at my conference, the Sellers Summit and she knocked it out of the part. There is like this huge crowd around her asking questions, and Rachel and has an amazing wealth of knowledge when it comes to building humongous Facebook followings with rabid fans. And she’s built multiple Facebook pages with more than a million likes, and she uses these pages to drive traffic and sales to both physical and digital products.

Anyway one of the most common questions that I always get asked is how to drive traffic organically to your website or your Amazon listings without spending a lot of money. And today Rachel is going to teach us exactly how she does it. And with that welcome to the show Rachel, how are you doing today?

Rachel: Steve, thank you so much. It’s great to chat with you again. I had so much fun with you at Sellers Summit.

Steve: Yeah, totally. So just for the listeners out there, Rachel has like so much energy and it’s awesome and it’s really infectious. So I know you guys are going to enjoy this episode.

Rachel: I might be a little energetic yeah, it’s been so much fun seeing people’s business grow and helping — I used to be one of those people hoarders who just horded people for my self and I’d collect these audiences and be like, I don’t want to tell you what my product is, I don’t want — now I’ve actually shown other people how to make almost the same audiences I have and it’s really fun to see, it just explodes. It’s not like mine stops growing. It’s just, it just multiplies, it’s so much fun.

Steve: And I’m actually a member of Rachel’s class and the stuff that she teaches really works. And that’s kind of what we are going to be talking about today. But before we start, Rachel, like what is your story? Like I know you started some ridiculously popular blogs in the past, but how did you kind of transition over to Facebook pages?

Rachel: Well, I started — my first blog was Quirky Momma. I started that one and then worked on it until it was 2.2 million and then left that business, and the cool thing is that after I left it was almost like a transition period for me. So I started a new one but I used a lot of the resources I had in the past. I used my other audiences, I used Quirky Momma to help build. So I got shares from big pages, I got shares from big friends, I had shares from like I would pay a couple of big bloggers money here and there to help share my content.

So I was using all of these resource that people had, that other people didn’t have to build this new page in record time, and I think I built it to like 500,000 in like less than a year. I think it was like 18 months I got to 500,000. But the thing is that it wasn’t replicatable if you didn’t have a large budget and if you didn’t have a lot of relationships that you could on.

Steve: But you build that first Quirky Momma site up to 2.2 million you said, right?

Rachel: Yes, yes I left…

Steve: That was from scratch, right?

Rachel: The first million was zero advertisement on that.

Steve: Okay, okay.

Rachel: It was all organic on that one. I did help in the sense we created relationships with other blogs and so we would all share each other’s stuff.

Steve: Okay, okay. But with Quirky Momma though, did you drive — was most of your traffic derived from Facebook for that first blog?

Rachel: Facebook and Pinterest, yes.

Steve: Facebook and Pinterest, okay, okay.

Rachel: Yes and then I roughly, with One Crazy House I got over nine million page views in 2016 from Facebook.

Steve: Just from your fan page, like without ads.

Rachel: Just from Facebook, yes.

Steve: That is crazy. Okay.

Rachel: No ads.

Steve: So with this blog then, so do you focus more on like the blog content these days or do you focus on like the Facebook page stuff?

Rachel: I focus on building audiences and right now my audiences are primarily Facebook and Pinterest. Facebook is the one that I’m exploding on right now, but I mean these principles can be used really on any social media platform.

Steve: Okay.

Rachel: So Facebook is the one that I’m focusing on but yeah, but I get my traffic and have grown my websites by building an audience. And then when you build that audience you can ask them what do you want and what makes your heart happy, and then give it to them and they become your die hard funs.

Steve: So would you say then that it’s almost not even necessary to have your blog? Like if you have this huge Facebook page, like doesn’t that kind of replace the blog?

Rachel: It does, it’s kind of crazy. But it does have a life of its own. You don’t actually need a website as much anymore. You can have a landing page with your products that you are selling and a Facebook page that has your audience like you are engaging with and use those seamlessly to promote each other.

Steve: And so how do you — I’m just curious how do you use these Facebook pages to make money right now?

Rachel: Lots of different ways. We’ve got — I do have seven, I guess eight now private label products.

Steve: Oh, you do? Okay.

Rachel: Yeah, I do have private label products that I sell. I do sell a couple of retail arbitrage products, and then I’ve also got where I sell affiliates of everybody else’s products. So I sell affiliates to find out what people are buying, and then I see if that thing that people are buying can I source that. And if I can affordably and easily with very minimal time effort on my part then I’ll go do that and if it’s going to take time, effort, research then I’ll outsource that task or not source it myself and just do an affiliate on it.

Steve: Interesting. So in terms of the products that you sell, are they — they had to be obviously related to your Facebook fan page, right?

Rachel: Yes, you have to find a way to connect that to your readers and to your reader’s hearts. So chalkboard labels, this is going to make your life easier getting ready for school because you are going to have all your products, your things that you need organized and if you need to change your label you just wipe it off and you can rewrite it. So chalkboard labels, they are very easy, quick to source from China, they are very cheap and I can have a high mark up on them. So that was one of my products that I sell.

Steve: So to develop that product, was that like a school based fan page?

Rachel: No, that one was to anybody who would want to write something on a label. So I would make an ad for it and I would put that ad on a DYI home site. I would do it on a preschool site; I would do it on even my cat site because you could label your cat food and label your cat products.

Steve: I see, I see. So you don’t really have to — so you build the fan page first and then you find products that kind of fit into the mold?

Rachel: Yes.

Steve: Okay.

Rachel: Yes. So things like, I know my DYI home site loves to buy mats. There are certain types of mats that I sell the most of even when I promote other people mats. Like that’s the one that they all tend to go back towards. And so if I could, I actually can’t source because it like the brand will only work with this other seller wherever they’re like they are locked in the contracts, but whenever I link to that product I can sell more. I know I can put that product up on Facebook and I can sell.

Steve: So can you give me an idea of like how much product like as an affiliate first. Like what’s you process? Like how do you figure out whether it’s a home run or not? So you’ll post something about a product, what does the posting look like, and what are some good numbers for it?

Rachel: My best bet in my mind is to have something that’s entertaining. So something that makes someone smile, something that makes their day better. So a lot of my products that I sell I sell through memes or through photos of the products in use in someone’s life. One of my students just like two weeks, three weeks ago maybe sold a weaner dog paper towel holder.

Steve: Weiner dog, okay.

Rachel: I know, she sold out of it on Amazon and she’s just talked on her page about how it was kind of ridiculous that she had to sign her counter and she linked to the product on Amazon and sold out of that product.

Steve: So what is selling out? We are talking of thousands of units, hundreds of units?

Rachel: I don’t know how many units she sold of it, but Amazon went ran of stock.

Steve: Okay, okay and so was she an affiliate or was that her own product?

Rachel: She was an affiliate and she made over $2,000 on the affiliate sales of that product.

Steve: Wow! Okay and so typical affiliate pay is like 5%? Something like that.

Rachel: It ranges between four and eight depending on the product.

Steve: Four and eight, okay.

Rachel: So if it’s a household product, sometimes it’s up to eight.

Steve: So you would consider that a success obviously.

Rachel: Yes.

Steve: So from that point would you try to start sourcing it?

Rachel: Yes, if I was that person I would try to seek where I could find that product and then source it, and then I would control the traffic that goes to that product. So next time I put that link up it would always be my product that’s up there.

Steve: Okay and so you can put these links up over and over again on your fan page?

Rachel: Oh, yeah.

Steve: Okay.

Rachel: And once you have a winner, I tend to cycle them where they go up two to twice a month every other month. So it depends on how often.

Steve: Interesting, and so it’s important…

Rachel: Like a Christmas product I might have go every other month during the whole year but then during Christmas time it will go up every other week.

Steve: I see and then so when you have your own product you get to keep all the product profit. Do you also get affiliate revenue off of that also?

Rachel: Yes, if you have it set up where it’s a separate EIN for your affiliate and a separate EIN for your business that is selling the product. Amazon at least whenever I talk to them lets me have multiple accounts as long as they are all under different tax IDs.

Steve: Okay, this is really interesting. And so just for the benefit of the listeners here, what have been some of like your viral posts that have generated a ton of traffic for your stuff? Like what’s your best that you’ve ever done?

Rachel: My best personal one, well toilet paper is my ongoing one. I can sell toilet paper through Amazon Prime now that now delivery with a post about — one post is about kids playing with toilet paper, and the other one is about your cat shredding toilet paper, and basically saying you are out of toilet paper, lucky for me Amazon delivers in an hour. And then you can tweak lucky for me I get another shipment coming in next week because it’s subscribe and save.

So I push those products and that’s my ongoing one that sells the most, but my all-time best is these cat rolling pins. And I sold, I think I made like $2,000 off two $3,000 that month off of cat rolling pins, but I continue to make revenue off of that for like three or four months just on affiliate link and it took me three or four minutes to put it up.

Steve: That’s crazy. So what — sorry I don’t know, what’s a cat rolling pin?

Rachel: It’s a rolling pin like to make cookies. Like you know you roll out your rolling pin you know, only it’s got like embossed cats on it. So whenever you roll the cookies or whatever it is that you are rolling on has the shape of cats.

Steve: Okay, okay.

Rachel: And so that — my Crazy Cat Lady page went crazy about it, but here is the thing, my other pages also ended up going crazy with it too. So it didn’t just do well in Crazy Cat Lady, it did well in my Crazy House one and that one I said, know someone who is a crazy cat lady? So I framed it in such a way that everyone would share with their crazy cat lady friends.

Steve: I’m just trying to picture, in order to make a couple of thousand dollars worth of affiliate sales, that means you have — like how much traffic do you have to drive to make that off of a post.

Rachel: Well, I sold out of Amazon products, so I probably could have sold more but I brought in four million eyeballs to that.

Steve: That is crazy, okay.

Rachel: So but it sold out. So if I had known that it was going to do well I could have had multiple providers of that product or you know.

Steve: Is that one your own is that one affiliate also?

Rachel: That was an affiliate one.

Steve: Okay.

Rachel: So that was my best one that was an affiliate, yeah.

Steve: Are you planning on selling these cat rolling pins then?

Rachel: I was until I found out that there is like, like you have to make sure that they are like end up the paint on it is you have to have the paint test it and all of that other stuff. So it’s easier for me to not have to — that’s a lot of work to figure out what all those parts are so I don’t get sued. So I just have somebody else, it’s like I’m going to do the chocolate labels, easy.

Steve: Right, yeah, yeah, okay. That makes sense.

Rachel: I go the path of least resistance. So if it can take me 15 minutes to make money on it, it takes 50 minutes for me to source to chalk board labels. It’s going got take a lot longer to source that one in a way that I won’t get in trouble with.

Steve: No, that totally makes sense. So when it comes time to do this, do you — so you put up the fan page first and then you figure out what products make it in there as opposed to figuring out what to sell out first and then creating the fan page, is that it?

Rachel: Yeah, I create the audience because when you have – it’s like the cart with the horse you kind of need both. You need the cart which is your product that you are selling and you need the horse to drive that cart somewhere, the traffic, right?

Steve: Okay, right.

Rachel: So you need both. So I like to get the horse first and the find out what kind of cart fits that horse.

Steve: Okay.

Rachel: What kind of products can that horse drag?

Steve: So let’s talk about, so now that we’ve kind of talked about the power of these pages that you are building, let’s talk about how you create one of these fan pages. Like how do I get started from scratch?

Rachel: Oh it’s fun, I like to do, I have what’s called the fast track plan and that’s where you can post win, but before you even start — and that plan is free and Steve can give you like a link to it.

Steve: Okay, yeah we’ll post it, just send it to me after this yeah.

Rachel: Cool. So you guys can follow exactly what I schedule in, but before I begin the fast track plan I like to do tests because you need to find out who your readers are, what they are going to relate to, and then where they are. So who your readers are, okay I want to do a niche about cats, or I want to do a niche about garages, or I want to do a niche about golf or whatever your niche is that’s what you have to decide first, so who your people are.

And then next you’re going to find out what they love. So if I’m a golf person I’m not actually a golf person. So maybe they like looking at golf courses, maybe they like looking at golf clothes, maybe they like looking at golf clubs. I don’t know, so I’m going to put six to nine different posts up and I’m going to boost them all to the same audience. So boost all the golf people and say, okay which one of these gets the most reaction out of you? Okay.

Steve: So you are buying ads to – so how do you figure out what audience to try?

Rachel: I try just the general one to begin. So if it’s golf, I will just try golf.

Steve: Okay.

Rachel: So golfing as an interest online. For my cats, when I just targeted cats and I found out by testing out the different types of content that the cats people related well to anthropomorphizing, is that the word? It’s when you make cat into a human.

Steve: Okay, right.

Rachel: So cat slumber party, cat acting like a toddler tearing up toilet paper, cat eating with a messy mouth. All of those things are making your cat to a human; those were the ads that really got the most engagement. So if I can sell a product by saying this makes your cat look like human, it will sell better.

Steve: Interesting, so how much are you so spending to boost these posts initially?

Rachel: Like two to three bucks.

Steve: Two three bucks, okay so not a lot of money.

Rachel: I don’t want Facebook to think I have money.

Steve: Okay. And then how do you know whether it’s good or not? Like that are some of the metrics?

Rachel: When people like that content then they like your page. Because my goal is not even to get that piece of content to go viral, my goal initially is just to build my audience. I don’t even want people to buy from me. All I want is to have them join my page and tell their friends about me.

Steve: Okay, okay.

Rachel: Think of it like the MLM. We’ve all seen like those pyramid schemes, right? Only instead of making a pyramid scheme where you are selling something, make it a pyramid scheme of collecting people where if you tell one person who is the die-hard fan about cats or golf clubs about how awesome this your golfing situation is, then they’ll tell two people and those two people tell two people and those two people tell two people, and next thing you know you have a large thriving community that you can engage with.

Steve: So in terms of like back to the ads, like you said you run a whole bunch of them, so do you just pick like the best one that generates the most like and then stick with that theme?

Rachel: Yes, that one tells me what people like. So I’ll do six to nine posts and then I might three to four more versions to see which ones people real — I always want to find the one that beat my winner. So once I find the one that okay, this is real, I’ve narrowed down exactly what my people want to say. After that now I have already gone to the cats, now I want to find where inside the cat realm are people most passionate and active about cats or about golf.

So maybe they are golf course owners. Maybe instead they are pro wannabes, pro golf wannabes, maybe they are the hobby guys who golf on the weekends. So you want to find where those people are who are going to become your most die-hard fans who are going to share your content for you.

Steve: Okay.

Rachel: So in the cat one, I targeted cats and that brought in likes when it was make your cat human, but what really brought in the die-hard fans was when I narrowed down and tried cat pages a little bit better, and then cat pages and cat products, well, that’s a little bit better. But I narrowed down to the people who can’t resist talking about cats are the people who work at no kill shelters.

Steve: Interesting, wait, so how did you figure this out? Would you say you started changing the audience’s around for your [overlapping 00:19:26]?

Rachel: Yeah. So once I found this one post converts to likes, now I want to make three more ads with that same post targeting different interests.

Steve: I see, okay.

Rachel: And see which interests then converts best, because once I know this type of post as well anthropomorphizing, and I know where those people are now I can make any post that’s about a cat as a human and target that audience and I know it will do well.

Steve: I see. So how long do you boost the post for it in the beginning? Like how much data do you need to gather?

Rachel: I try to just — I do two to three dollars each and I try to keep the same amount. So I’m going to do two dollars, I want to always do two dollars on my post, or three dollars, always do three dollars. It’s up to you as to which. I would not go higher than five dollars because you are wanting to stay a low budget because you want Facebook to think of you as an organic content source not as a money pot.

Steve: I see, okay.

Rachel: So I keep the dollar rate low, and then once — I like to send about 200 people to it because with 200 people I will know if there is a percentage of people that clicked through, if there is a percentage of people that buy. With 200 people I should be able to tell that information.

Steve: Okay and so let’s say you picked, like in that first experiment let’s say you pick like six really bad ads, like how do you know that they are bad? Or do you just always run with the winner?

Rachel: Whatever the best winner is, now that’s your winner, so beat that one.

Steve: I see, okay so do you do multiple rounds at this beginning?

Rachel: Oh yeah, oh yeah.

Steve: Got it, okay.

Rachel: I may have done 15 rounds.

Steve: I see okay, so how do you know when to stop doing the rounds?

Rachel: When you’ve got — okay my last sales page I got it to convert at 34%. I don’t know if I can get a sales page to convert better than 34%, like that’s insane. So if you can get it to convert at 34% there is a point where you are like, that might be just as high as we can go, and now you can make another one so.

Steve: I meant in terms of like the, I guess in terms of like the metrics. Like do you look at the click through rate, do you look at likes, shares?

Rachel: Likes that then convert to your page as fans because what you want to do is whenever they like the content you ask them, hey, do you want to like my page? So there is an invite feature that you have if you have less than 100,000 fans. So you can say, hey do you want to like my page? And if the majority of the people who see that post like that post and then also go on to like your page, that’s a winner because that’s a person that’s already proven to click and to engage with your content. So they are already more likely to buy from you because they are already interacting with you.

Steve: Okay so I just want the listeners to know these facts. So if someone likes one of your posts you can actually invite them to like your page, right?

Rachel: Yeah, it’s so cool.

Steve: Is that a manual process or is there a way for you to just say ask everybody who’s liked?

Rachel: Unfortunately it’s manual right now. They did have an easier way but they took it away from us.

Steve: Okay and it’s…

Rachel: And it’s capped, so you get to do 500 a day. So what I suggest doing is like you, your spouse, your mother, you each get 500 a day to invite.

Steve: And so it sounded like you made it up to like a 30 somewhat percentage conversation rate off of this and then that’s when you knew to stop.

Rachel: Well, yeah I mean if you in your heart will know if you can top your win or not.

Steve: Okay, and then at that point you started looking at different interests to just further narrow down the…

Rachel: Duplicate, do it another time. So make another one, so you now have two that convert at 30% or four. Most of mine do not convert at 30%.

Steve: Sure, yeah, yeah. I was just trying to get a general guideline, yeah.

Rachel: I’m usually at the, a lot lower than that.

Steve: Okay, okay, and then you mentioned earlier like with our cat page you finally found this one group that just was, it knocked it out of the park, right?

Rachel: Yeah, that was the no kill shelter. For my crock pot page I found them in Mormon Women. So more Mormon Women because they I guess cook in bulk or they I don’t know, I tended to convert better from that. So it’s like, it’s funny how you find the people where they are going to convert the best but yeah.

Steve: Is there like a method for you to pick your audience? Like with the crock pot thing I would not have not thought of trying Mormon Women, it just seems random.

Rachel: It is random, it is. What I do is I interview my readers. Once I get a couple, I start realizing I’ve got a couple of die-hard fans, and it’s usually when you have about 500 readers, you have some die-hard fans on there. And so I interviewed my die-hard fans and I look for similarities in who they are and what they call themselves, and it turns out four out of five were Mormons.

Steve: Interesting.

Rachel: So I was like, oh I guess Mormons like crock pots, and then I started targeting that and it was true, I converted much better. So I don’t know what it was, I’m not Mormon but I just find that I found that audience. I’ve used for one of my doctors who’s taken my course, he’s a pain practitioner, and we targeted cross fit and you don’t necessarily know who it is until you start interviewing your readers, and we found out that his die-hard fans were cross fit people. And so we were able to then target his anti-narcotics use program to people in cross fit and it did well.

Steve: I just want to take a moment to tell you about a free resource that I offer on my website that you may not be aware of. If you’re interested in starting your own online store, I put together a comprehensive six day mini course on how to get started in ecommerce that you should all check out. It contains both a video and text based tutorials that go over the entire process of finding products to sell all the way to getting your first sales online.

Now this course is free and can be obtained at mywifequitherjob.com/free. Just sign up right there on the front page via email and I’ll send you the course right away. Once again that’s mywifequitherjob.com/free, now back to the show.

Interesting, how do you interview your fans, like do you just say, hey, can we get on the phone?

Rachel: Yeah, I know it’s crazy. Some people say to give them a survey, but my thing with the survey is that you are asking them questions that you kind know the answers to or you are assuming an answer. When you are talking I would not have assumed my people were Mormons, or that they worked at no kill shelters. I’m not a cat person, I didn’t think of that out of my own.

It was from talking to them and them being, yeah, well my wife — one of the fans with the cat page, his wife had recently died and he’s like what my wife loved to do before she died, what I would love to keep her memory on is she worked at no kill shelters, and that was really important to her. And I was like, oh let me target no kill shelter next. Like the gold, the coins are falling. You know how like when you hit the lottery and all of those coins-

Steve: Yeah.

Rachel: I bet it was like this, whenever I saw it and it worked I was like, oh my word this is amazing because the cool thing too is when you find those die-hard fans, the ones those ads are the cheapest because Facebook, if somebody engages with you and they can’t help it. Every ad, everybody that likes it likes it; Facebook will give you likes for like 0001, I mean they are so cheap because every person that sees it converts, right?

Steve: Yeah.

Rachel: So that’s funny [overlapping 00:26:36].

Steve: What is their incentive to talk with you on the phone? Like I would be a little apprehensive if somebody randomly…

Rachel: I know it’s kind of crazy. I just would say, hey how are you doing, I am starting this page and I’m running it and I saw you interacted with me, and I was just wondering if I can talk to you about cats, and they did.

Steve: I guess if they are diehard fans they probably want to talk about it, right?

Rachel: I know it’s kind of funny they are. Six people I asked if I could talk to them and five said yes. And then with the Mormon one I think I had to go – oh it’s the crock pots that I think I asked like nine people and five said yes, and I think actually interviewed four.

Steve: That’s actually a really high percentage, I’m surprised.

Rachel: Well they are bored at home and they want to talk about cats, or they want to talk about cooking and their families.

Steve: Okay, so you hit upon no kill shelters and you found ads that anthro- I don’t even know how to pronounce it, anthropomorphizes your cats, so what’s the next step after that?

Rachel: Scaling.

Steve: Scaling, okay.

Rachel: So I found that making this about the cat is humans and this is the audience, well now all I have to do is do that a lot.

Steve: Okay, so how do you find the content? Like you are not creating this content, are you?

Rachel: Well, I was at the beginning and then once I was able to have some staff I started having my staff people, I always have my readers submit photos for me to use, and then I would have a staff person make them into memes and connect to Amazon products to sell.

Steve: Okay, but that involves a little bit of creativity, right?

Rachel: Yes, in the sense that I had to find somebody who is snarky, because I’m actually not very snarky. I’m kind of happy all the time, like what you see is what you get. I don’t like, there is no subtlety, there is none.

Steve: Okay.

Rachel: And sometimes like snarkiness needs to have a little bit if subtle finesse if that makes sense. So it wasn’t something that I’m good at. None of my memes do well, the ones that I make. So I found somebody who’s really gifted at snarky comments and smart out.

Steve: Okay.

Rachel: And she is really like really cheap. She makes a meme for a dollar a meme and I’m like, oh my worth, this is insane because for her it just takes seconds. She looks at the photos; she’s got snarky comments, the next photo snarky comment. And they’ve got meme creator software programs where you just type it in and move on to the next one. So she can do 30 images in an hour.

Steve: Crazy, so she must be a cat lover then, right?

Rachel: She is yeah; she is a snarky cat lover. So you do have to find somebody who is passionate in your niche.

Steve: Okay, okay. So is it required that you produce your own content or can you just like share all the other people’s stuff?

Rachel: Definitely not. Actually when you are starting your page I would suggest that you don’t share your own content primarily.

Steve: Okay.

Rachel: I would suggest starting sharing at least half somebody else’s content, if not a little bit more than half. The reason being is that you want Facebook to see you as the place where all the good content in that topic area goes. So if this is going viral on Facebook land in your niche, you want it to be on your page. So Facebook is like oh, all of the best cat stuff is here, all the best golf stuff is here, all the best fly fishing equipment, it’s all on this page. So you become the leader in your niche, kind of like the best library.

Steve: Okay and so how do you go about finding all this viral content?

Rachel: I know it’s kind of crazy; you just go to the Facebook search bar.

Steve: Okay.

Rachel: Yeah it’s that easy. You just type in fly fishing and then you get the top posts for fly fishing.

Steve: So for your cat example you would just type in cats or-

Rachel: Yeah.

Steve: Okay.

Rachel: And I would say things like cats baby or silly cats. I would always add something with the word cats to make sure I narrow in on what my people are going to look for, but yeah, yeah you just type it into the search bar. And the most common stuff pops up. Facebook tell you this is doing well.

Steve: And then do you share it or do you kind of like download the photo and post it as yourself, as your own?

Rachel: When you are under 100,000 fans you want to share more from other sources than you download and upload. When you are over 100,000 you are going want to upload more than you share. Now you will always want to credit though because you are going to get into trouble if you download a photo and upload it to your page without citing.

Steve: Okay, so citing is just saying like I got this from this and this site?

Rachel: Tag the page and if possible add their URL, and even better is to get permission first but I don’t always have permission so I don’t always do that, but that’s the best case scenario. Legally you probably need to get person first.

Steve: Okay, but to tag them usually they don’t get upset?

Rachel: I have had like four-five people get upset with me about it, but I just don’t do it to them again.

Steve: Okay, and so why is it important share after 100 — like where is the distinction of 100,000. Like what’s the magical thing that happens.

Rachel: Under 100,000. Facebook loves when you get lots of likes and they reward you by you get to invite those likes to like your page. After you have 100,000 fans it kind of switches up a bit and you don’t get rewarded for having likes but by getting to invite them to follow your page.

Steve: Okay.

Rachel: And the algorithm emphasizes shares now for your page.

Steve: Okay, and then when it comes to sharing stuff, like just because it’s popular that doesn’t necessarily mean it’s going to be popular with your audience, right?

Rachel: Not necessarily but at the same time if it’s popular with cats and your cat page it’s probably going to be popular with your audience too. There is a high likelihood that Facebook is going to say oh, your cat page that’s cat content. We are going to show it to more people right now when you start your content out because we know that that post and your audience already fit together well.

Steve: I see, I see. And so in terms of posting stuff on your own page, like if it’s a dud do you want to remove it or you just leave it there and move on?

Rachel: I leave it there and move on because I don’t have time to mess with it, but I would love to have somebody test that. So if anybody in your audience wants to test removing and see.

Steve: Yeah, I’m just curious.

Rachel: I still might not do that out of practice but.

Steve: Okay.

Rachel: You got to pick where you got to spend your battle and your time, but I’d love to see if that works.

Steve: So it’s important to always pick stuff that you think is going to go viral, right?

Rachel: Yes.

Steve: Okay.

Rachel: And actually one of the things that we talk about, one of the secret ninja tricks in the course is something called dark posting and viral funneling. So that’s where you post something as an ad as you test to see which version does the best, and then that’s the version you are going to post to your page.

Steve: I see so let me just — you want to just to translate that for the listeners. So this is a post that’s not actually on your page, right?

Rachel: It’s not there yet but you make it ad out of a post and you test. So that way let’s say you have three videos of your cat product and you don’t know which one you want to put all your ad dollars behind and you know that like next week you are launching, so you only have one week to figure it out. You don’t have three months to test and whatever. So what you could do is you could put three different versions up in the ad. Put five bucks on each of them, see which one does the best, and then start there. So it gives you a little bit of a heads up, a head start.

Steve: Are you writing that ad against your own page or off of it?

Rachel: Yeah, you run it on your own page in a dark post, so it looks like a post on your page but it’s only going out as an ad.

Steve: Okay.

Rachel: So it’s only people that you pay for. So it tests. It’s a way to test your audience and it’s something that Buzz Feed, Nifty a lot of the big pages do.

Steve: I see.

Rachel: So you will never see anything on their page that hasn’t first been tested.

Steve: I see, so do you do that with all of your pages as well?

Rachel: Not unless it’s important.

Steve: Okay.

Rachel: So if it’s something that I’m going to convert from, I’ll do that. I’ll make that extra step, but if it’s just regular content I don’t that regularly, no.

Steve: Okay. So you are sharing other people’s stuff, you are sharing your own clever memes, how do you enter posts like links to your own content and links to your own products, Amazon products and that sort of thing?

Rachel: The memes a lot of times I use my memes to sell Amazon products. So you just find a way to connect to your product to the meme. So it could be the product is included in the photo of the meme or it could just be the cats is drinking water out of the toilet, and you are like, hey, they should have had this water fountain, because if they had this water fountain they wouldn’t need to drink water out of the toilet. And the meme has the cat drinking out of the toilet saying something about whatever; it doesn’t have to be related. Does that make sense? Like it’s related but not related. It doesn’t have to…

Steve: What does your cat rolling pin ad look like or your post? I’m just curious.

Rachel: Oh, know someone who loves a cat, know someone who thinks cats are great or awesome or know crazy cat ladies, and then the link, and here is where you can get it, your cookies will be amazing or something like that.

Steve: Okay, you obviously can’t — or actually can you post like product links for every post as long as it’s corresponds with the meme or?

Rachel: Yeah.

Steve: Okay.

Rachel: I mean you could do product links all the time. You just want to make sure that you are not like pushing your product on them. So if you are pushing at them it gets a little bit spammy if that makes sense.

Steve: I see.

Rachel: So I would try to reserve ¼ of my posts to be a little bit more where I want to direct traffic to. So I don’t consider the memes to be traffic directing as much because I’m not saying go click here to buy this for 20% off. It’s more of building my audience, and if I happen to make sales at the same times, that’s amazing.

Steve: So there is no real call to action here. You are really guiding them to the content and then kind of indirectly as some people click then that’s great.

Rachel: Yeah and so like know someone who is like a crazy cat lady, what my call to action is, is to tag your friend who loves cats.

Steve: Interesting, okay so nothing about go buy here or anything like that or sale.

Rachel: No, no, so it looks like hey, I have a crazy cat friend, I’m going to let them know about this cat product too. So they are telling their friends about the cat product, I don’t have to.

Steve: What is a good percentage in terms of shares and likes when you post something of the people that view it?

Rachel: It depends on the type of product and the size of your page. So as you get bigger, you are going to have a slightly lower reach as you grow and grow and grow.

Steve: Okay.

Rachel: So per capita. So as you are beginning you get kind of like a oomph, a little bit of extra power behind your shares. So the sweet spot is like 50k to a 100k you have a lot of reach per capita. So yeah, it varies per page.

Steve: So what is like considered a good reach? Because I know Facebook keeps nurfing that, right? And so what percentage would you consider a good reach off of the number?

Rachel: I like to have each of my posts reach roughly 20% of my audience that then probably half of them reach it right now. So probably only half reach that target right now.

Steve: Okay, I mean that sounds really high compared to like what I’ve talked with other people, but perhaps they are not sharing viral stuff which is why it’s much lower.

Rachel: Yeah, and most of my content reaches, I’d probably say about half of my content reaches 20% of my audience so.

Steve: Okay, that’s really high and so that’s probably because you take the extra effort to only find stuff to share that you know it’s going to be popular.

Rachel: Yeah, I only want — I don’t want to cannibalize my page. So my audience is my primary goal and if I can keep them happy on my page, then they will keep buying from me. So if I can build that audience of people who love a topic and cultivate them, yeah.

Steve: So let’s switch gears a little bit, let’s say you already have a fun page and a lot of people already do, and let’s say the engagement is like really, really bad, do you recommend just starting from scratch or can you revive something that’s dead?

Rachel: We do have students who have been able to revive. We’ve had a couple of students who revived in massive ways. We’ve had one student who her page was at 25k for like years and she hadn’t grown with like a couple of thousands in like a year or two. Does that make sense? Like she’s just been 25k forever.

And so she grew her page to 265,000 by today and it’s been on like four or five months. So she went from 25,000 fans to 260,000 fans. So it’s totally, totally possible but she had to do it by focusing only on her audience. So how do I make them really, really thrilled to receive this content?

Steve: Okay, because I was thinking and we kind of had this conversation at the summit where I have a page where I have just been kind of posting my blog posts and lot of them get no engagement. And I remember you telling me to just stop that and then — actually you recommended I start over from scratch. I can’t remember what the distinction was.

Rachel: So it depends how much of the page is branded as you and how much you can brand as your reader. And you can still be branded as you and feature your reader. You just need to find a way to feature your reader more. So you can revive a dead page, but sometimes it’s easier depending on your size to just start over.

Steve: Okay.

Rachel: Another thing you can do is that trick is to go in and check your audience. So you can go in your page settings of your page and then go to people in rows — people in pages I think. People in pages and you can see who actually is liking your page. So you can go down there and see, okay are they cat people.

For me I can see this person has cats or this person does not have cats, or I can see, okay wait a second I have got a lot of guys, I’m a mom mom’s page for DYI mom stuff and there is a lot of guys with all international sounding names. So they are probably not my audience. So I can see where I’ve been off on my targeting.

Steve: Okay, and do you recommend like let’s say you have a company. Do you recommend doing a company page or just some complete third party page that is unrelated to your brand?

Rachel: It’s best in my mind if you don’t look like a company because Facebook wants brands to pay. Facebook is a business, they are out to make money, but they also have a need to make people happy reading their content, have people engage in content.

Steve: Okay.

Rachel: So if you look like a content provider, i.e. the person who’s just really passionate about trains and just wants the world to see this new train engine that does X, Y, Z and all the other train people that love trains like to talk about it there. If they see you as that passionate train person, they are going to give you more juice to that train audience than you would if you were a train company selling a product.

Steve: I see, so if you already have like a company page that’s kind of dead, then you may as well just leave it as your company page and then start.

Rachel: Use it as a resume.

Steve: Okay.

Rachel: So like with my pages I have Muller marketer and it’s not a page that’s going to go viral, it’s a resume. So you can go there and you can see here is who Rachel is, here is what Rachel believes in, here is Rachel’s products, here is people who love Rachel. It’s a resume. But it’s a good and you can convert from it, but it’s not going to be a traffic driver, does that make sense?

Steve: Yeah, that totally makes sense. And what about the distinction between groups versus pages?

Rachel: Oh, groups are so much fun because you can motivate people to love you in a different way, connect with you. The problem with the group for selling say Amazon products is that you give a lot of your control away when you bring people on in a buy in like they do in a community because everyone now gets a chance to talk. So they might complain about your product, they might complain about you, they might complain — so for physical product sales, groups are harder to win at unless you are going to do like Facebook lives regularly, kind of like an infomercial system insider group.

Steve: I see but on a page they can still comment and there could be backlash still, right?

Rachel: But it’s easier to hide that backlash.

Steve: I see, I see.

Rachel: Whereas as in group you don’t have as much control over the backlash.

Steve: Okay so for ecommerce you still recommend going the page route?

Rachel: Yes because you can’t run ads from your group, you can only run ads from a page.

Steve: Okay, got it, got it.

Rachel: So now what I would suggest too maybe have a VIP group where they talk about discounts, or they give reviews to each other. Like you team up with six other Amazon people and you make a review group, and so all of your customers go here and then they can get early access to new products at a discount, and as long as they give reviews to each other’s group. So it’s like a corroborative review. I don’t know if that’s even legal or anything but that could be a system where you have a group that’s still meeting your needs.

Steve: Okay, okay and in terms of like the timeline, like when would you start actually start to link to products? Do you recommend having a certain number of fans before you start doing any of that stuff?

Rachel: I link to products right from the beginning.

Steve: Oh you do? Okay.

Rachel: Yeah, because I want to test to see what they buy, but my goal isn’t to get them to buy the product, my goal is to build my audience. So even if I’m putting that product up, if it’s going to take away from building the audience, then I’m not going to put the product up. So it’s not about me getting sales, it’s about me collecting those people.

Steve: I see so it sounds like the sales are just kind of gravy for you.

Rachel: Yeah, once you get the people the sales kind of happen automatically and you don’t even have to work for them. Like it’s not — I mean you don’t, it’s not that you don’t have to work for them, you still have to put the product up, you have to think about it, you have to find new products, so it’s not — but the effort of trying to convince someone to sell and to purchase is a lot easier when they’ve already told you what they want to buy.

Steve: Right, right, and in terms of what you are sharing, do you find yourself sharing more videos these days or photos?

Rachel: Videos, yes. Videos, videos, videos, but the thing is too you can kind of make those video photo things where you take a screen shot on your page. They’ve got like Camtasia has a screen sharing system and you can take a photo, put it on your page, make the Camtasia over that and then just run it for five minutes.

Steve: Oh, and that works too, interesting.

Rachel: Yeah.

Steve: Okay.

Rachel: So it looks like a video but it’s not a video. It’s kind of sneaky and I don’t like seeing them as a user but they do convert.

Steve: I see and that might just be temporary but yeah, for now that’s probably working well.

Rachel: It is, I can’t see it lasting though but yes, right now video is but you don’t have to, it doesn’t have to supper fancy. A lot of times authentic sells better than fancy and perfect.

Steve: Okay, so you are actually recommending like less polished videos for example. Like iPhones videos.

Rachel: Definitely.

Steve: Okay.

Rachel: Something that your readers can say that’s me. So if the readers can see something polished and say, oh, that could be me then that works. So like purple has an egg, the egg falling on the mattress, it’s very well-polished, it’s very well screened but at the same time you are like oh, I could slip up. You can picture yourself putting an egg on your mattress and trying that.

So you want to have something where the person can picture themselves in that scenario. Most of the time people can picture themselves with a cell phone and they feel like it’s a real product review versus somebody just talking trying to sell them something.

Steve: Interesting, okay yeah so all these principles it sounds like will translate directly over to running Facebook ads for your products. Like instead of saying, hey we have a sale, put – run a Facebook ad for just some meme and just link to your product and just see where it goes.

Rachel: The word sale actually will hurt your reach because sale assumes you are a business and Facebook wants businesses to pay. So instead of using the words sale, say this is rock bottom guys.

Steve: Okay, okay.

Rachel: I can’t believe this one, go grab it quick because it’s going fast but that’s…

Steve: So you are saying these trigger words actually reduce your reach.

Rachel: Yeah, we have a whole list of the banned words somewhere in the course too.

Steve: Cool, cool.

Rachel: And like words from a place like go get this now or it’s a buy one get one. Could you believe what I got to leave the shopping cart with double or something like that? So you can- I get to leave with double or something. That way you are saying I got two without saying buy one get one.

Steve: Okay. So it sounds like you can get by sharing other people’s stuff for the first 100,000 and then once you pass 100,000 fans you got to start kind of inter-mixing your own stuff in there.

Rachel: Yeah, I would suggest starting, making sure that you’re starting to focus on shares after 50,000 for sure.

Steve Okay.

Rachel: Before that is good too but after 50 for sure, but by 100,000 if you are not, your page is going to have a hard time growing, and you are just going to be stagnating.

Steve: Okay, I’m sure a lot of the listeners will be happy just to have 100,000 fans.

Rachel: The cool thing about 100,000 is you can just coast at 100,000 too for a long time and drive traffic decently. So it’s not, it’s like my Crazy Cat Lady page now. I’m not really working on growing it as much because it’s at 100,000, it’s driving traffic. It’s a lot faster for me to share somebody’s stuff than it is for me to create new and so I’m just kind of coast at 100 and keep making money of what I am. So there is nothing wrong with once you get to that stage duplicating it and saying okay, I’ve got one, I’m making money, I’m selling, now let’s get the second page going before we want to scale those to kingdom come.

Steve: What about in terms of content like blog posts. Is it fine just to post the link to your blog post like when you are not trying to sell something?

Rachel: I would instead of uploading a link; I would use a photo or a video to drive traffic to a blog post as well because…

Steve: With a link in the content or notes?

Rachel: In the description, you can put in the description or in the content, either one, comments.

Steve: Okay.

Rachel: So I try doing both really if you have time. I schedule everything ahead of time so I don’t always remember to go back and put something into the comments, but yes, you can put into the description and into the comments.

Steve: Interesting, because it works better when you put in the comments.

Rachel: It does but that requires you to then baby sit it.

Steve: That’s true.

Rachel: And from my opinion the value of the, it works better versus my time of now having to go online four to five times a day at a certain time to post, I’d rather one more time a week and get the whole week done.

Steve: Okay, well this has been really great information Rachel, and believe it or not like this 40 minutes that we’ve been talking like just blew by really quickly.

Rachel: Oh, it’s been 40 minutes already, wow?

Steve: Yeah, it has crazy, right?

Rachel: Yeah, wow!

Steve: But Rachel where can people find more about your teachings? I know they work and you’ve had amazing results, where can people find you online?

Rachel: I have a Facebook group where we, you are part of it, we get all nerdy and we talk about Facebook algorithms and this does better and we crowd source and we test okay, well this wording is not doing well, what does well? What video does well? And we test new stuff all the time, and its Facebook page strategies but there is links, I’ll give you the links so you can share and make sure you get…

Steve: Yeah, absolutely, cool.

Rachel: Yeah, it will be easier for people to click through on that link and you will always find me.

Steve: Yeah, for user, for sure, let’s do that. Rachel thanks a lot for coming on the show. I feel like we covered a lot in just 40 minutes, maybe it’s because you talk fast and you are always full of energy.

Rachel: I do I talk way too fast. I know it goes really fast. I love collecting people and this is really fun topic for me. So thank you.

Steve: And one thing I really like about Rachel too is like a lot of the money that she makes goes to charity also, so I mean yeah.

Rachel: I know we can build the whole school, I’m really excited.

Steve: Yes exactly, do you want to talk about that real quick? What you are doing with that.

Rachel: Oh, do you mind?

Steve: Yeah, go for it.

Rachel: I’m like beyond over the moon over it. Yeah, we found — we are going to be building an entire school for 300 to 400 students in Kenya in internally displaced person’s camps. That’s where people who were moved out of their communities by force due to segregation now get to have like a brand new school and hopefully in the future we’ll get to put in wells and electricity. I want to make impact on more than just me and even more than just those people whose businesses aren’t healthy. This is the chance to kind of make a difference on the world and I’m excited by it, so yeah.

Steve: Yeah, so I mean if you support Rachel you are supporting Kenya as well.

Rachel: Yeah, thank you.

Steve: Thanks a lot for coming on the show Rachel, really appreciate your time.

Rachel: You have a great day.

Steve: You too, take care.

Hope you enjoyed that episode. Rachel is awesome at creating viral Facebook fan pages and I’m actually taking her class right now and I highly recommend it. So if you are interested in learning more about Rachel’s teachings, head on over to mywifequteherjob.com/Rachel. And that’s R-A-C-H-E-L. Now for more information about this episode go to mywifequitherjob/episode175.

And once again I want to thank Seller Labs. Their tool Scope has completely changed the way I choose keywords for both my Amazon listings and my Amazon advertising campaigns. And instead of making random guesses, Scope tells me exactly which keywords are generating sales, and within the first week of use I saw a 39% increase in sales. It is a no brainer. So head on over to Sellerlabs.com/wife and try the tool for free, and if you like it you will receive $50 off. Once again that’s sellerlabs.com/wife.

I also want to thank Klaviyo which is my email marketing platform of choice for ecommerce 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 auto pilot. So head on over to mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s mywifequitherjob.com/ K-L-A-V-I-Y-O.

Now I talk about how I use these tools on my blogs 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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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!

174: How Sol Orwell Grew Examine.com To A 7 Figure Business By Using Reddit

How Sol Orwell Grew Examine.com To A 7 Figure Business By Using Reddit

Today I’m thrilled to have Sol Orwell on the show. Sol is probably best known for starting the company Examine.com, the leading resource to get unbiased information on nutritional supplements.

He also runs the popular site SJO.com where he writes about entrepreneurship. Anyway, what’s really interesting about his company examine.com is that he grew it to a 7 figure business primarily by using reddit. Enjoy the show!

What You’ll Learn

  • Why Sol started Examine.com and what led to its creation
  • How Sol got a one word domain and why he bought it
  • How Sol got his initial traffic
  • How to leverage reddit to gain traffic for a business
  • How Examine.com makes money
  • How Sol created his first product
  • How to rank #3 for creatine

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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Ignite.Sellerlabs.com – If you are selling on Amazon and running Amazon Sponsored Ads campaigns, then Ignite from Seller Labs is a must have tool. Click here and get a FREE 30 Day Trial.
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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 are 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 with their businesses.

Now today I’m thrilled to have Sol Orwell on the show and today we are going to go back to the beginning and discuss how he created the seven figure company Examine.com, the leading resource on nutritional supplements. But before we begin I want to give a quick shout out to Seller Labs for sponsoring this episode, and specifically I want to talk about their awesome new Amazon tool, Scope.

Now if you know me I get really excited about tools that I like and use, and Scope is the tool that actually increased my Amazon sales on several listings by 39% within the first week of use, crazy, right? Now what does this tool do that could possibly boost my sales so quickly?

Well, quite simply, Scope tells you what keywords are driving sales on Amazon. So here is what I did, I searched Amazon and found the bestselling product listings in my niche, then I used Scope to tell me exactly what keywords that the bestselling listings were using to generate sales. I then added these keywords to my Amazon listings and my sales picked up immediately.

So today I use Scope for all my Amazon products to find high converting keywords in the back end as well as for my Amazon advertising campaigns. So in short, Scope can boost your Amazon sales almost immediately like they did for mine, and 39% is nothing to sneeze at. And right now if you go to Sellerlabs.com/wife, you can check out Scope for free, and if you decide to sing up you’ll get $50 off of any plan. Once again that’s Sellerlabs.com/wife.

Now I also wanted to give a shout out to Klaviyo who is also a sponsor of the show. And I’m super excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not another provider. Well 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 which makes it extremely powerful. 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.

Now Klaviyo is the most powerful email platform that I have 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 I’m thrilled to have Sol Orwell on the show. Now what’s funny about my story with Sol is that I asked him to come on my podcast and then like two days later he publishes this post on Facebook that reads like this.

He wrote, “Many people have been contacting me lately but not a single person has made a compelling case. Going to someone you don’t know with let’s chat or I want to mentor me or the worst I want to pick your brain causes me to only respond with just one word, why? Time is the single most precious thing you own and control, and I guard mine like a zealot.”

And so when I saw this and I just contacted him just before, I was saying to myself, oh crap, did I just do exactly what he was complaining about, and fortunately he actually replied after a couple of weeks and I managed to land him on this interview. Anyway, who is Sol Orwell? Sol is probably best known for starting the company examine.com which is the leading resource to get unbiased information on nutritional supplements, and he also runs the popular site SJO.com which are his initials where he writes about entrepreneurship.

Anyway what’s really interesting about his company, examine.com is that he grew it to seven figure business primarily by using Reddit, and with that welcome to the show Sol. How are you doing today, man?

Sol: I’m great, thanks for having me on.

Steve: So yeah, I was – after I contacted you and you posted that thing I was really worried, and if you look at your email I actually wrote another one afterwards and I pointed out the reasons why you should come on the show.

Sol: That’s right, that’s right. I mean to be honest it was more in the context of like you and I we had at least engaged, right? So I knew who you were and you knew who I was, that was fine. But what always happens is every time on — I was on Ramit site at that time and Brian Clark had mentioned me, and Nathan Shane. And the first [inaudible] [00:04:53] happened with Ferriss.

Man like people just come out of the wood work and I have no idea who they are, I have not context of who they are and it just makes you realize more and more as you build up an audience, you need to start building in almost filters, and most people just, they think- we talk a lot about entrepreneurship. We talk about you have to think about the you, right.

You have to convince the other person why they want to buy from you or why they should follow you, why should they listen to. But inevitably people forget that that applies to them also, and so when they contact you it’s all me, me, me, me and you are just kind of like, I have no idea why we should have a conversation. Which makes me sounds like a bit of a dick, but at the end of the day right, like we’ve got family, we’ve got friends, we’ve got business, there is only so much time we have and often time people squander it, but like you read, I’m quite the zealot about it.

Steve: Yeah, and it happens to me too and I completely understand. I actually don’t even open emails. Like I read like the first sentence a lot of the times and if I don’t really know who the person is, or if they are not compelling in like the first couple of sentences I usually don’t finish the rest of the email.

Sol: Yeah, no kidding, especially when you got like essay emails that are- that’s going to take like ten minutes to read and another 40 minutes to reply if you really want to do it right. You have to triage emails, right? And I think what’s interesting is as I’ve learned this more myself, I have become better at communicating with other people about this is why we should have a conversation, this is why we will get along, or this is what we will talk about and it’s done great for me too. So it’s one of those fascinating things that when you are in it you just become better and better at it.

Steve: Right, and then your little post on Facebook was a reminder that I should put more effort in my email even for people. The thing is we hadn’t talked for couple of years, right? I didn’t even remember if you knew who I was at that point actually so.

Sol: It was a while. I think it was an email chain though. So it’s always easy to just go back up and see it, right?

Steve: That’s true.

Sol: But yeah, a lot of people they come in cold, you have no — so I actually send, one of the people who sent me one of these emails, this is like, I thought this was just fun. He sent it to me and I was like I was just waiting for my girlfriend to come home, so I wrote him like the scathing email. I’m like listen, I’m not trying to be a jack ass, and I just like totally ripped into it.

And he replied and he is this incredibly successful CEO who’s got so many employees doing really well, and he is like you know what? You are right. So hopefully our [inaudible] [00:07:06] will impact other people in a positive way and everyone will win from this.

Steve: So Sol, let’s talk about examine.com real quick.

Sol: Sure.

Steve: How did you start it and why did you start it and what lead to its creation?

Sol: So we actually just turned six years old two days ago.

Steve: Congrats.

Sol: Thank you, and basically I used to be a lot, lot heavier and when I started losing weight, I got suckered into it. I bought a lot of supplements. I’ll send you the link to the image so you can add it to the notes at the end. It was a lot of supplements and-

Steve: Is it a fat image or?

Sol: No, like two of my other supplements I owned.

Steve: Okay, got it.

Sol: Trust me it was a ridiculous amount. And so as I lost weight I realized there are so many companies, they are misrepresenting science, they are ripping us off, and I was actually in Colombia. I was hanging out with two of my post doc friends and I was complaining about this. And they said listen, you are bomb, you are not doing anything with your life right now, why don’t you do something about it.

So some back-story, I had we had had other successful businesses and to me entrepreneurship has always been about independence. I’ve never really chassed money per say, so a lot of it to me was just like relaxing.

And so after they caught me out on it I realized you know what, this is something that needs to be done. And so from day one we’ve never sold any physical products. We’ve never done any supplement sales, we’ve never done any coaching, we’ve never done any consulting. We’ve always been an education company.

And the hard part of it all was most often and most like areas like entrepreneurship or even- especially health and fitness it’s usually around the personal brand, right. It’s this one person that has a PHD or a doctor or whatever that everyone listens to, whereas for me the focus was always on I want examine.com to be a repository. Whenever people think supplements, I want them to think of examine.com.

So that’s kind of how we started, that’s what got us going. We were actually only covering body building supplements, then we got into health supplements, then all supplements, then nutrition. Now we are into like education certification or we are getting into it. But yeah, it’s been an interesting journey, we get over two million visitors a month now.

Steve: Nice.

Sol: And the other important thing is that a lot of the time people get focused too much on their own niche, right? They only stay in their own little bubble. So we did- we are all over men’s health and men’s fitness and muscle fitness and all those, but our real point of pride is that we’ve broken out. So you’ll find our stuff in New York Times or BBC or all these, like we wrote about Boom Broth for mother Jones. So that’s been the most rewarding part is getting our message across to a lot of people instead of just the most focused hyper fit people out there.

Steve: So of those other publications that you mentioned, did they just start coming to you once you established your site as an authority?

Sol: So a bit of A, a bit of B.

Steve: Okay.

Sol: Some of them do come out to us especially even when you search for let’s say Creatine or fish oil we are usually top five, so they do find us there. We do put a lot of effort in outreach. The reality is that most nutrition information out there, most any information out there is very sensationalized, right? We have click bit headlines and we are driven by page view. So we’ve put in a lot effort of whoever is writing in a no non-sense manner, we tend to reach out to them, introduce ourselves, explain what we do and just because of what we do and what they do, we become fast friends.

So it’s one of those things where examine.com is a calling card, you just look at the website and you instantly know, oh my god! These guys are nerds. And that’s done a lot for us. And the other important thing is we stay in our lane. We know we are researchers, so we don’t say hey, we are going to write for you or hey you should do this. We always say listen, this is the latest nutrition research and we can help you analyze it and get it across to your audience, and people love it when we just help them do the job.

Steve: So do you have scientist on staff that can like verify the stuff that’s being published? Does that make sense?

Sol: Yeah, so basically there is a bit of misinformation out there. There is researchers who are in the labs who are doing the bench work, and then there is people outside who are analyzing it. And so we have the entire spectrum. So we have medical doctors, we have PHDs; we have pharmacists which are very underrated. We have registered dieticians, we have people with clients, we have people who are only on the research side, and you need all these people because that’s the only way you get the entire breadth and depth, right?

You’ll hear some person say, oh, I’ve figured how to do exercise and nutrition. Like we have over 50,000 references and we only stick to nutrition and we have a team of up to 30 people who contribute. There is no one person who knows everything or even 10% of everything, and the only way to do it is with a huge army really.

Steve: I’m just curious what happens when you get conflicting advice? Because a lot of times doctors might not agree, right?

Sol: Right, so actually what’s really interesting is this is one of those examples where a lot of research is hyper specific, and research actually rarely conflicts. It’s just it’s so specific that in broader context it may seem like its conflicting. So for example, a few years ago a study come out saying that, fish oil my cause prostate cancer and you are reading like holy shit! I’m done with fish oil. But when you actually get into it you find out that they actually only analyzed people from 50 years and older, and it was only this one specific group from I think it was like 55 to 60 that were taking this and this and this. That’s all higher rate of prostate cancer.

And so the research doesn’t that often contradict each other. It’s just when you generalize it, it becomes very contradictory, but when you look in depth and like, oh, it’s different when someone has diabetes already versus someone who doesn’t, right?

Steve: Okay.

Sol: It’s different versus someone who goes and exercises a lot. So it’s this, it often times is just adding one piece of the puzzle to the bigger picture, but people imagine it as if it’s like 50,000 pieces all put down at once.

Steve: Okay, and then they probably choose a title that’s more click baity or not click baity but, okay more clickable.

Sol: Exactly and it’s one of those things where because the internet is driving traffic and traffic drives ads and ads is what they are all after and the newspapers are desperate for, the quality of reporting gets — in a way it’s not even it’s getting worse, they have less and less time to analyze it or research into it, and that’s where we become sort of valuables. We are that resource source for them.

Steve: Okay and I was kind of curious about it. How the heck did you get a one word domain and I assume you had to pay a lot of money for it.

Sol: Absolutely.

Steve: Okay.

Sol: So I used to be in the domain name industry, I have dabbled in a lot of different things and so I know a lot of top domain brokers. And so examine.com cost me 42,000 and then SJO.com cost me 27,000. But the reason I mention it is, I knew that there was a base of at least 30,000 for examine.com. So if there was some emergency and I had to liquidate the domain, I could get 30,000 within 24 hours. So there is more on that it was some cost of maybe 10,000 into it, than oh my god! I’ve put down 42.

Even now man, examine.com alone as a domain is likely base of worth of 50,000, so same thing with SJO, right? 27 but I could easily sell it for 20,000 within 24 hours. So it’s one of those things where I would rather put in a bit of money, knowing that it’s still liquid than come up with something you know more generic — not more generic but more like harder to remember. Whereas examine.com often times I tell it to people, and they are like how do you spell it, and I’m like literally as the word is, so yeah.

Steve: I’m just curious why you felt it was so important to get a one word domain from the start.

Sol: I mean to me it was one of those things if it failed as a project I could repurpose it. So I could have bought supplement.com, and I think it was a friend of mine who had it. He wanted 25,000 or 20,000 but that would have stuck me into the world of supplements. So examine.com was generic and it was something I could have easily used for something else.

So back in the day- so I know the guy who created HostGator. In fact I bought a website from him in 2002 and used that money to start it, and I bought launchpad.com for 50,000 and he was like, what’s the plan? He is like, I have no plan, but I can use it for like ten different things. And that always kind of stuck with me where I’m like, examine.com isn’t one specific area. I can do whatever I want with it. And going to somebody and saying hey, I own examine.com versus I own Solsupplementresearchsite.com, it’s nowhere near the same, right?

Steve: That’s true, yeah.

Sol: And everything I do is really long term oriented. So I knew that worst case if it failed that’s all right, but long term examine.com was a brand that we could keep for a very, very long time.

Steve: Interesting. So would you recommend that for new people starting out too?

Sol: I mean, at the end of the day it’s really about how much money you have to throw at it.

Steve: Okay.

Sol: Like to me 42,000 was let’s say 40% of my 100k outlay into the company.

Steve: Okay.

Sol: So I wouldn’t spend more than 25%. I spent more because I knew the industry, I knew what would work, I knew what I could resell. But in terms of like overall marketing budget I would never spend more than 20-25% on the domain just because there are more important things at that moment, you can always rebrand. I just found it for myself it would be a lot easier not to.

Steve: Okay, okay, fair enough. Let’s talk about traffic. So you have this site, you have a lot of great information on it, how did you actually get people to go and take a look at it?

Sol: So originally like you mentioned, we actually spawned from Reddit. So when I joined Reddit fitness, so people who don’t know Reddit it’s basically the world’s largest message board. I joined Reddit fitness when it had maybe 50,000 people. Right now I think it’s at almost at seven million, and what I noticed is people kept asking the same damn question.

Steve: Okay.

Sol: So I thought about entrepreneurship, I always talk about like opportunity is right there; you just kind of have to have your eyes open. So people kept asking the same questions, so like, is Creatine bad for kidneys, and somebody would post all these scientific paper links, right? And then three days later because no one never actually searches the history, someone else post the same damn article, and people eventually get tired of it, so that’s why we spawn.

And instantly we had a very symbiotic relationship where Reddit was a source of questions and answers for us and things to research on. And for Redditers anytime these newbies would come and ask the same question over and over again, instead of having to answer with these long witted answers or copy paste, they just be like go to examine.com, go to eaxmaine.com. So that’s how we originally started.

And then afterwards honestly man, like people ask me, how do you get links from X site or B site? Like high authority sites. It’s all relationships, right? Like the way we set it up is because we don’t do any coaching, because we don’t do any consulting, we are not competing with anyone. We are not competing with legend dietitians, we are not competing with personal trainers, and overtime I have built up relationships with all of these guys and girls that every time someone asks them about supplements, they all link to us. They all talk about us.

So for example right now I said, we turned six two years ago, we are doing a quick anniversary sale as of this conversation that is, and so Charles Poliquin, god father of strength and conditioning training. He has been on for example on Ferriss’ podcast twice. He has heavily promoted our sale, because we have this relationship, because we stay in our lane everyone talks about us and it just adds and adds and adds up over time.

Steve: Let’s talk about Reddit in particular because I have some experience with Reddit and I’m definitely not engrained on there at all, but like the culture there can be pretty nasty, right?

Sol: Quite super nasty.

Steve: And I’m just curious like how you get people, like I remember one time I posted a link to my site and I got roasted, right?

Sol: Yeah, for sure, for sure. So the thing with Reddit is they are very, very, very sensitive to people coming in to try to get traffic. I have been a Redditer now for over ten years. In fact in like four months or three months I will hit 11 years. So I was part of the Reddit ecosystem before I ever created examine.com, before I even had the idea of it. And if you-

Steve: For a long time you mean before-?

Sol: Yeah, yeah, so I was on Reddit for about like four years, right before examine.com even came into existence. And the other thing is everyone’s comments and posts are public. So if you go look at my history, if you look at what I have posted, I rarely post about examine.com and I post in other areas. I post in Reddit Toronto, I post in Reddit Canada politics, I post in Reddit NBA and NFL.

So if you look at me and if I’m posting an article or a link to examine.com, no one says anything to me because they know I’m a Redditer first, that I’m a part of the community more than someone coming in and trying to monetize it, or abuse the community for my own good.

Steve: Okay.

Sol: So when I do, like if in Reddit entrepreneur which I got I think two-300,000 people. If I go in and I drop a link, no one is like hey, this asshole is just promoting himself because I’m part of the community. Because I comment there, because I post there other things that have nothing to do with me, they are a lot more forgiving. So that’s it, a lot of people just try to use for themselves, they just try to promote themselves but Reddit is very sensitive. If you are part of the community then you can promote happily and they’ll like you.

Steve: So as a new business who would like to leverage Reddit, do you recommend — okay how would you approach that?

Sol: So yeah, I would not recommend Reddit as a leverage for traffic. The traffic tends to convert poorly. What Reddit is great for is research.

Steve: Okay.

Sol: It’s amazing, it’s a great way to find out what are people talking about. So Reddit basically- again for those who don’t know, any article you can give it one up vote or one down vote, and the more up votes it gets the more popular it is. And so you can actually sort what the most popular posts ever have been in the past month, in the past week, in the past year or all time. So if you are getting into a new area, if you are getting into a niche and you go to that specific section in Reddit and you look at what their top articles are or questions are, you instantly know what you need to write about because users have already voted for you.

So it’s a great way to do research, it’s a great way to find out what’s going on, but it’s way too long term to be like, oh, I’m going to use Reddit for traffic.

Steve: Okay.

Sol: And the other thing is honestly Reddit traffic converts relatively pace poor. In terms of conversion it’s as bad as Twitter and Twitter is not something I ever recommend to anyone to focus on in terms of generating revenue. It’s good for other things, again it’s good for community building, it’s good for networking, there is a lot of interesting people there. It’s great for research as I mentioned, it’s even good for employees, you can find — because Reddit is as a chess pool, right?

People are mean and they are nasty to each other and being successful online is a big part of just having a thick skin. So you can find people on it that have thick skins that are subject matter experts on whatever you are talking about and poach them for writing, hire them full time whatever.

My co-founder for examine.com, he was a moderator in the Reddit fitness section, and the only — well not the only, but a big reason why I chose him was because people would hurl abuse at him and it would just bounce right off of him. He never took it personally and that’s great for working online.

Steve: So you said you got your start on Reddit, but I would imagine that you just mentioned that that traffic doesn’t really convert and what not, and so how did it evolve from Reddit to other traffic sources then?

Sol: Right, so Reddit basically what it allowed me to do was say hey, look how much traffic we are getting. So it gave me the topics that we needed to talk about. It gave me the initial let’s say 500 visitors a day or 300 or 1,000. I think right now we get maybe a couple of thousands a day just because we are still embedded in the system, but again honestly man, it was all relationships.

It was going to these people and like for example, I have a genetic disorder which causes my ligaments and tendons to tear easily. I’ve had seven surgeries and I have huge shoulder problems. So this guy named Eric Cressey, he teaches a lot — he trains a lot of professional baseball pitchers. That’s his area of expertise, and so he created a product and he talked about shoulder health and it worked for me. And I mass emailed him and I said, hey man like I just wanted to say thanks for the shoulder thing, it really helped me blah, blah, blah. And again I showed my value and all that jazz we were talking about.

Steve: Sure.

Sol: And he replied and that’s where our relationship started, and that’s kind of then he started writing about — so he covered things that we wrote about. So it was all these confluence events and eventually as more and more of these important or influential people started writing about us our rankings went up and up and up, right. So if we’re like let’s say 75,000 visitors a day now, Google sends I think 40 of those, 40,000 that is.

Steve: Okay.

Sol: Because we rank so highly for fish oil, Creatine and all that. It’s all interconnected, right? The more better relationships we build, the more links we get which increases our search engine rankings which makes it easier for us to build even further relationships, and it just goes round and round and round and round.

Steve: So let me ask you this, was that accidental or do you make an effort like I’m going to contact X number of people every single month and just see where it goes?

Sol: So a big part of who I am especially if you look over my Twitter feed is I share anything I find interesting. And I would say 75% of it has literally no connection to me at all whatsoever in a professional capacity. I am of the mindset of if I read something interesting, I will share it and then I will contact the author and say, hey I like your work.

And I work online long enough that you’ll hear from people who hate your work 100 times more than you’ll hear from people who actually like your work. And so when I reach out and say, hey I like your work and I talk — and I’ll mention about why I’m even saying this because for example I’m used to people hatting on my stuff, this is why I wanted to say thank you for it. That’s where the relationship starts building.

So I have always been about how do I get deeper relationships with people. You and I previously talked about like the cookie off and all that kind of stuff, I’m very fascinated by human connections and it helps my business, but I’m more interested in, is this person doing something interesting?

For every four or five people I come across in any industry I will maybe contact one person because when I contact them I want to contact them from position of authenticity saying I actually like your work and I actually want to get to know not, oh you are influential so I think we should become BBFs. So that’s my approach.

Steve: I just want to take a moment to tell you about a free resource that I offer on my website that you may not be aware of. If you’re interested in starting your own online store, I put together a comprehensive six day mini course on how to get started in ecommerce that you should all check out. It contains both video and text based tutorials that go over the entire process of finding products to sell all the way to getting your first sales online.

Now this course is free and can be obtained at mywifequitherjob.com/free. Just sign up right there on the front page via email and I’ll send you the course right away. Once again that’s mywifequitherjob.com/free, now back to the show.

Can you give us an example of an approach email that you might write? And like earlier in our conversation, at the very beginning we were talking about how we get lots of emails and it’s hard to stand out from the crowd, right? So how do you stand out from the crowd?

Sol: Okay, easy. So for example recently think I read someone on Mental Floss. This writer on Mentalfloss.com, she had written about some supplement, let’s just say supplement X. And I read it and I really liked it, and so my next step is to then further read the person’s other stuff. And so I read her other stuff and she has the same genetic disorder I have EDS, and this will be another little spin and I’ll add on the end. So I send her an email saying, hey Cate, you know I read your article, really liked it and I tweeted it too obviously first.

Steve: Sure.

Sol: But I really liked it, I enjoyed, it’s always good to see no nonsense information because we get a lot of nonsense. And then I explained, this is what we do and this is why I’m so used to nonsense, and then I’m like, oh, and one of the big reasons I really wanted to reach out was because I have EDS and not a lot of people talk about EDS. Man, it’s always like good to read about it, people becoming more publicly aware of it.

Steve: Okay.

Sol: Now, and then so I just sent that email and she replied being like, oh yeah, somebody knows what EDS is. But the way it ties into the rest of the things is I hate reading books about business, about marketing, about entrepreneurship. Every time I see a list — sorry I have to be honest. Eveytime I see a list of like 42 business books you have to read, I’m like, what are you going to read in the 9th book that you didn’t read in the first eight books, right?

Like business in itself is an easy concept. Figure out something people want and sell it to them. And we can get into the marketing psychology and that’s all important, but that’s the basic premise.

Instead, I spend most of my time reading random things that have nothing to do with business. So for example right now I’m reading about living with the borderline mother, which talks about how women with BPD impact their families.

Steve: Okay.

Sol: I’m also reading the oral history of the daily show, and I just recently finished Michael Jackson Inc. which talked about the business that Michael Jackson made and how he made all of his money which was through music licensing. So what happens, because I read so much but I read about things that have nothing to do with business and entrepreneurship, whenever I meet someone, I can instantly go on depth with something that’s of interest to them because I have also been exposed to it. So the reason I became good friends with the editor in chief of Entrepreneur Magazine is because he is a huge NBA fan and so am I.

And so he loves the Miami Heat, I’m a huge Raptors fan, we are both under East Side, and so when I speak to him in this language he knows I’m a serious like fan, right? And I find this is the key, this exposure to external things is what makes ‘networking so easy for me’ is because I connect with people on a 100 different things instead of, oh, did you read about the latest AB test that growthhacker.com is talking about? That’s boring as hell.

We want to connect on a personal level, we want to work with people we like and we like them on personal connections, not oh I think you are supper smart because you are successful, and oh I think you are supper smart because you are so succefull, none of that. So I focus on the personal side or the human side.

Steve: So let me just kind of summarize what you said to me.

Sol: Yeah.

Steve: So when you do your outreach, you try to find out as much about that person as possible and pick something non business related to kind of establish rapport with?

Sol: Yeah, I connect with them on things that I’m also interested in or something that I’ve also been exposed to. And I always — I don’t read one thing, I read multiple things from them and often times when I start reading other stuff, I’m like, no, we are not going to connect and I don’t bother. I’m very big on only contacting people I actually want a contact with, and so my cold email response rate is above 50%.

Steve: Wow! Okay.

Sol: Because I only contact people I actually want to have a conversation with, and that I think — and I always write my emails from scratch. I’m a fast typer which I think makes it a little bit easier for me. But I always write emails from scratch so that you can almost feel the energy or the vibe in my words that I like you, I think you are an interesting person, I like what you are writing, let’s become friends. That’s always my mindset.

Steve: So while we are talking, would you mind opening that email app that you sent to that woman?

Sol: Sure.

Steve: I’m just curious about the part where you are establishing yourself as someone she would actually want to talk to as well, right? Because that woman who had EDS she probably gets a ton of emails every day also I would imagine, right?

Sol: Yeah, you know what? I just opened up another one that’s just sitting in my inbox.

Steve: Okay.

Sol: And so this guy is an editor at a popular science magazine. And so the email is, Hi Stephen, after our exchange I found your post via my RD friend Robin and saw exchange on Twitter. I spend quite a bit if time reading your stuff, very interesting and your bit about teaching creationalism to debunk it actually made me laugh. And so he had talked about creationism in school, and I had done a lot of research or reading about how the Texas curriculum has a massive impact on what’s taught in the US because they are the number one text book buyer in the States.

So there is that little randomness that I’ve learned that we were able to bond on. And then so hey, anyway I just wanted to quickly introduce myself, hey I’m Sol, this an old email now. Over four years ago I helped found examine.com. We are an intermittent organization, no donors, no sponsor, no advertisers and we just look at the evidence behind nutrition and supplementation. We recently released an examine.com Research Digest where every month we analyze nutritional studies. If you are interested I’d love to show it to you. I promise you it’s like nothing else you have seen before, regards. That’s it.

Steve: Okay.

Sol: That was the entire email and he responded to me like, hey I just visited your site. The few pages I visited sum up exactly what I’ve found. I really like your human effect matrix, blah, blah, blah. And so he actually mentioned — this is actually funny, he mentioned this seems like a site that Reddit fitness would find very useful.

Steve: Interesting.

Sol: And then I responded being like, blah, blah, blah, and so it’s just this right there. One little mention about creationism and that basically I understood what he was talking about on the text, his perspective, that was our connection, that’s it.

Steve: What attracted to you to this person in the first place, and did you contact him with the intention of getting the word out about examine.com?

Sol: No, so I actually contact a lot of people. I am very, very — so I am big on human connections, and the reason I mention this is it opens up things that you would have never considered. So like my life goal is to enjoy as many shenanigans as I can. And two real life examples are one, I bought this piece of art. It is this gorilla and there is like all this color on the outside, and it’s very calm on the inside.

And I send an email to my list saying I bought this piece of art and this is why bough it. It reminds me of me. It’s chaotic on the outside, it’s very cool on the inside and this is why I love it. And a guy replied and he is like, hey I am Banksy’s broker, if you every want a Banksy let me know, and I’m like [inaudible] [00:32:33].

I would have never thought about me buying a Banksy. For those who don’t know who Banksy is, he is a very well graffiti artist. Very well known, like people they will cut out, if he does graffiti on like a house, they will actually cut out that part of the house and save it as a piece of art.

Steve: My goodness, okay.

Sol: And just because I was interested in art. Or another time I was hanging out with an entrepreneur and I’m like, hey man, like I’m really — we were just talking and I’m like yeah, one of these things I want to do is get my pilots license. And he said, hey, I have a plane but I don’t get the minimum number of millage I need on my engine every year. You are free to use my plane for free; you just pay for the gas. I’m like yes.

So what I found is that I almost rarely ever go into any conversation with a plan, with a mission, being like oh, this is how this is going to help me because almost everything awesome that’s come out it including the cookie off and the sausage off that you and I talked about was completely irrelevant to my business interests or to anything specific. It was just okay, let’s see where it goes. And so the case that attracted me to him was, he had actually published a graph about reliable sites about science and nutrition.

Steve: Okay, got it.

Sol: And that’s what made me go like, oh this is cool and I agreed with most of what he wrote. Like I have like guys like David Wolfe and Food Babe, they are horribly misrepresenting nutrition and research and science and all that stuff. And so that’s what originally made me come across his work and then reading about creationism stuff I’m like [inaudible] [00:34:03] we should get to know each other and that was it.

Steve: It sounds like we have similar thought philosophies except that I use my podcast to reach out to people that I actually want to get to know.

Sol: 100% right, it makes sense.

Steve: And you get to chat with them for like an hour so.

Sol: Exactly and you can get to ask questions that you want to ask, works perfectly for you.

Steve: Exactly. So let’s talk about okay so you are getting all this traffic from examine.com and you are getting back links from experts that you’ve reached out to. From what it sounds like, examine.com did grow pretty quickly, right?

Sol: Actually no. It’s one of those things where people think that there is this big hokey pokey and all that. I published numbers like a year ago in traffic, and don’t quote me on this exactly, but I think it took us about two years to get to 10,000, then another year to get 20 and another year to like 40 then 50 now 75.

It seems like it’s quick growth but in terms of the actual graph, it’s actually pretty linear a curve. Because we are not like one of those cool Chinese sites, right? Like it never — TechCrunch is never hearing about us. Mashable doesn’t read about us. It’s not that the Technorati has ever taken attention to us.

Steve: Okay.

Sol: We have been slowly but surely sloggin away and it just keeps growing and growing and growing and growing and that’s it.

Steve: Okay, it sounds like my blog as well. No hokey pokey at all on my end either.

Sol: No, no hokey pokey. This is — but it’s one of those things where it’s like a snow ball going down a hill, right? The momentum builds up and builds up and builds up and in absolute numbers it seems like it’s a big jump, but as you keep going it just seems to be a pretty relatively stable hill.

Steve: Okay, let’s talk about monetization. So you have all this data right?

Sol: Yeah.

Steve: And I remember you mentioning before that you do not sell supplements or anything along those lines.

Sol: Correct.

Steve: So how do you guys make money exactly?

Sol: So we are an education company.

Steve: Okay.

Sol: All we do is we have three products, two of them — all three of them are PDF based. Two of them you just buy straight up and then the last one is a subscription which we’ve built for professionals. So in that email I was reading you I mentioned the Research Digest. Every month we analyze six nutritional studies and we break it down, we analyze it. And so if you are registered dietician or personal trainer or a medical doctor it’s supper useful to you.

And in those health industries you have what we call continuing education units. So for example to be a registered dietician you need to do 75 hours of approved credit work every five years to remain an RD. And so our Research Digest is approved with all the training organizations, with registered dietician organization.

So it’s like a double bonus for professionals, they are learning, they are being better with their clients and they are also getting their accredited hours. The other two products then are more for the end user basically like, hey, take this supplement, don’t take this supplement. It’s very much what we found is our free information is I think three million words now on our website. It’s just incredibly in-depth, but at the end of the day people want step by step directions, and that was where we found our monetization was.

Steve: Let me ask you, how did you figure out what to create?

Sol: A lot of it is through conversations.

Steve: Okay.

Sol: So one of my talks for example is about the three lessons I’ve learned over 18 years of entrepreneurship, and one of the main lesson — one of those three is you need to talk to your customers. And when I say talk I don’t necessarily mean just surveys, which is what everyone does. You need to pick up a phone and you need to have a conversation with them, because it’s when you are having that conversation that you really realize what they want from you, what they are looking for, what they need, what they want you to solve, and it’s in that conversation that you realize not only what they want and what you can sell to them but also what language to use.

Steve: How did you choose who to talk to on the phone because obviously it’s not scalable?

Sol: Yeah, honestly it’s one of those random things. Like when you are new you are just desperate to talk to anybody.

Steve: Okay.

Sol: So you are like listen, I want to talk to you. Eventually now so our Research Digest we have three tiers. We have a monthly, a yearly, and a life time. And the reason we added life time is if you look at a credit card and on average a credit card will last you three years when somebody signs up for you.

And so what we did was if we can just get someone to pay us upfront for three years, that’s a win and so we would talk to our life time customers who have paid us a 1,000 bucks and we said, all right, what do you want from us? And so we usually, we tier down now to like the most highest paying customers and then go downwards there.

Steve: I guess before you have any customers at all, like how did you even know that you needed this membership tool? You see what I’m getting at?

Sol: Yeah, yeah, so-

Steve: Like in the beginning you don’t know anything.

Sol: Yeah so we had already built an audience. We weren’t making money and we specifically on purpose didn’t make money. We were like all right, we are going to build something high quality and there is a rush towards eye balls and all that kind of stuff but that’s more like a generic brand thing. Like oh I’m Snapchatting, I’m going to get ten million eye balls or 100 million eyeballs and I’m somehow going to monetize it.

For us it made sense. We are doing research, its high quality information, its high quality users, right? It’s like Shane over at Finance Street, right? He gets a million page views a month. But his audience is very, very high level, so he know he can sell them high level stuff or like what Ramit does or IWT.

Steve: Okay.

Sol: So we were building up an email list and from them we started asking what do you want? And so the first thing people wanted was, oh you know we want one way to quickly look up what the human research says about supplements. Boom! That was our first product.

Steve: Was that via email that you asked these questions?

Sol: Yeah, this is all via originally, right? Just to kind of get it going. And then we started having conversations with people who bought and then on the front they were like, yeah it’s great, I love it, but I’m a little bit overwhelmed because this is huge. It is like 1,000 pages, it’s a huge tabular data. They are like I don’t know exactly what to do. That’s when we created our next product which was Stack Guide which is step by step directions.

Steve: Okay.

Sol: And then after we did that we talked to more people and we talked to more like trainers and RDs and they said, you know what, I love it, this is so great, I use it on my clients all the time, but my client will come up to me and be like, hey man, I read this study about fish oil causes prostate cancer, what do it do? Or high protein is as bad as smoking three packs of cigarettes a day. What do I do? And then we are like all right, this is where our other opportunity is. Is that they need to stay on top of the latest research and we can do that for them.

And so our next one that we are working now is certification and the same thing, they are like hey, how do I know who I can trust with supplements? How can I come across as a teacher of supplements? How can I be an expert in supplements like you guys are? We are like all right, there is the opportunity for us. Let’s teach other people how to be great at supplements, that’s our expertise, so yeah.

Steve: Okay, okay, so it sound like you started by pulling the audience via email and then you actually had some customers and you ended talking to those customers by phone to figure out what to do next?

Sol: Exactly.

Steve: Okay.

Sol: Like and maybe you just want to have a conversation, and it’s even people sending messages in contact form, great, that is your opportunity. Customers buy — we are big on — so there is a man named Joy Coleman and he talks about 100 days after. Brilliant speaker definitely, if you’re listening to this, go check out his stuff. And he says basically you have 100 days to convert a customer into an evangelist, and we are big on that.

So when they buy we reach out to them, ten days later we are like did you download it, or we check if they downloaded it. Hey, what did you think? What did you like, what did you did you not like. 35 days later we contact them, three months in we contact them. So we are very, very big on making ourselves accessible and that just parlays into everything we do.

Steve: And how did you know when was the right time to actually develop a product? Because you have this wealth of information.

Sol: Yeah.

Steve: At what point did you say, hey it’s time to start making money?

Sol: There wasn’t a specific moment that just hit for us. It was one of those things that the demand was coming and coming, and I think we were at maybe 10,000 visitors a day. And I just felt — and this is like two and half years in, this was not overnight. And I was like, all right, I think we are at this position that we have leverage. To me it’s all about leverage, right? Do we have leverage over in a way our audience to say, we are awesome, you guys trust us, this is what we are going to sell.

And I think I was hoping we’d sell 1000 over four days. I think that was my original target and I think we sold 1,400 in the first day alone. So the demand was definitely pent up and waiting. So it just, we felt like we had enough of an audience that this was the time to go, but there was no specific metric that I can point toward and say this is how we knew at this moment.

Steve: I guess what was trying to ask is like at this point you have a staff, right that you have to pay?

Sol: At this point, no. it’s just my co-founder and I.

Steve: Okay, okay, got it.

Sol: My arrangement with my co-founder and this is how I do everything now is, listen you focus on your one thing and for my co-founder was research, and I will take care of everything else, the customer service, web hosting, web design, web development because I had programmed the website from scratch. Customer service, editing, copy editing, all of it, I’m going to do it.

And so what’s great about that is then and then like you give a percentage of the company and I gave him a stipend basically. Like I think I paid them $800 a month or something. I’m like, listen, you know the potential — and the nice thing is I had a reputation, I had already built sites, he’d already seen that stuff, we’d actually hang out in real life too. So he knew I was the real deal, and so he was willing to go along with it, and obviously he has been well rewarded for that now.

Steve: Okay, so all the scientist and everything they came after you already started making money and you could afford to pay people, right?

Sol: Yeah, so once we actually made that money from the first sale, that’s when we started — so we had already built up a team of advisers that we regularly had conversations with that gave us feedback, but it was definitely that led us to get to the next, next level.

Steve: Okay, and in terms of — I just typed in Creatine just now and you rank number three I think right now.

Sol: There you go.

Steve: Are those SEO efforts just a result of outreach and just people naturally linking to your site?

Sol: Yeah, so pretty much now we get random links all the time from random websites. We use [inaudible] [00:43:41] .net, for example I use it just to see what people are talking about. And I’d say about 80% of the links that go up; I had no idea they were going to go up just because we built up the reputation in the brand.

Steve: Okay, got it, got it, and today are you still involved with examine.com?

Sol: So I’m essentially like a chairman if you wish.

Steve: Okay.

Sol: We do a conversation once a month with the top people on the team just to see what everyone is up to, that we are all on the same page. But for example Kamal who runs it now. So Kamal has a double MBA MPH which is a Masters in public health which is like the macro level policy stuff from Hopkins, and he was doing his PHD in nutrition when we picked him up. He’s like yeah, you know we are working on our side effect database. I had no idea it was even happening. I was like okay, cool tell me more about it.

So I’m effectively outside of the organization, and part of it I think that a lot of entrepreneurs struggle with when they hire people is they micro manage them, or whenever they screw up or do something wrong, they are too harsh on them. But the reality is that someone like you or someone like me who’s been doing it for five, ten years or whatever that we are deep in, we have all this domain expertise built up that they don’t. And people are very uncomfortable with their employees failing, and I’m big on like let them fail but they better learn from that failure and we’ll go over why the failure happened, and then they will be better for it.

And so during this sale we’ve had, we’ve sent out this segment of emails and that segment of email and this and this and that. I’ve heard to do none of it, all I’ve done is talk to some of our affiliates who I initially contacted years ago and just be like, hey, we have a sale going on and they are like, cool, that’s it.

Steve: Nice and so that was kind of like my Segway because we chatted a little bit before this interview to see what you are up to now, and I just want to touch on those topics. Like your cookie challenge and some of the philanthropic stuff that you’ve been doing as well.

Sol: For sure, for sure. So to me the entire point of entrepenunerhsip is independence. I am so independent that I legally changed my full name. That the idea that I did not get to choose my name was completely unacceptable, so I changed it. And a lot of entrepreneurs I know get lost in making money or hitting some goal or this or this or that.

But for me it’s more like what stupid things can we get into. And so this entire cooking thing happened because I was trash talking a friend about this place has the best cookie, she is like no. We went there, she tried them, she’s like yeah, you know what, you’re right, best cookies ever. I’m just giving you the super quick version.

Steve: Sure, sure.

Sol: Then she started trash talking me the week later on my Facebook thing, I found better cookies, I’m like, you are crazy. Her friend came in, I have no idea who her friend is, never met her before. Her friend is like, I make even better cookies, I’m like you both are crazy. We agreed to do a blind taste test and I’m like you random person you came to my wall. I’m inviting myself to your house; we’ll do the cookie off there.

So we had 18 cookies there, it was insane event. I posted on Facebook, people started saying, hey I can make better cookies. And this is usually where the story ends where I’m like okay whatever. But being the person I am I’m like all right, prove it to me, send me your cookies. So one person sent me cookies, then three then five then ten from Australia, from the UK, people started sending me pies, peanut butter, random stuff.

So in the last 13 months I’ve had over 130 people send me cookies and other versions of deserts. And to me it was always about a reminder that if you have an audience, you don’t need to make to make money from it. You don’t need to become more internet famous from it or be a celebrity or whatever from it. You can use it to have and do ridiculous things. And so earlier this year, January we had our second cookie off. This one became an event. There was 140 people showed up, we had 27 professional bakers and pastry chefs come with their cookies, and then we made it a charity event.

So we raised 2,500 bucks. And so in June we are doing the sausage version and this time I’m charging it even more because I want to raise $10,000 for charity. So it’s one of those things where to me having an audience is more about what can we do and what fun can we have than, oh I’m going to sell a course now, or I’m going to do coaching or consulting. So yeah that’s what I’m up to.

Steve: Yeah, it sounds like a lot of fun man, and it’s for a good cause at the same time as well.

Sol: Exactly, and I’m big on like supporting local charities just because you know the money is going to be in your neighborhood, it tends to be better spent. You know the people so you know exactly what they are doing with it. So yeah it’s really satisfying to be honest.

Steve: Cool, so hey, we’ve been chatting for quite a while, like where can people find more about you or reach you the right way of course? And where can they find more about the sausage challenge that’s coming up?

Sol: Oh yeah, so honestly so if you just head on over to SJO.com and link to my Facebook and my Twitter where I talk about all this stuff. All that stuff is out there. Just SJO.com, that’s all they need to know.

Steve: Cool man. Hey Sol, thanks a lot for coming on the show man, it was a pleasure having you.

Sol: Dude, it was my pleasure, thank you.

Steve: All right, take care.

Hope you enjoyed that episode. Now I love Sol’s story and it just goes to show that if you really want something it’s never really too late to take action and change yourself for the better. For more information about this episode, go to my WifeQuitHerJob.com/episode174.

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.

Now I also want to thank SellerLabs.com as well, and their tool Scope has completely changed the way I choose keywords for both my Amazon listings and my Amazon advertising campaigns. So instead of making random guesses Scope tells me exactly which keywords are generating sales, and within the first week of use I saw a 39% increase in sales. It is a no brainer. So head on over to Sellerlabs.com/wife and sign up for free, and if you love the tool you will receive $50 off. Once again that’s sellerlabs.com/wife.

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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173: How To Run Profitable YouTube TrueView For Shopping Ads With Brett Curry

How To Run Profitable YouTube TrueView For Shopping Ads With Brett Curry

Today, I’m thrilled to have Brett Curry on the show. Brett is someone who I met through Drew Sanocki at the Traffic And Conversions Summit In San Diego and we hit it off right away.

He runs OMG Commerce which is a 7 figure ecommerce agency that has helped over 125 companies with their pay per click advertising.

Not only does Brett speak at major ecommerce events across the country but he also writes for a variety of sites like Digital Marketer and Search Engine Journal.

He’s also the author of the ultimate guide to Google Shopping published by Shopify and the host of the ecommerce evolution podcast.

What You’ll Learn

  • How Google Shoppable True View Ads Work
  • A specific strategy to get YouTube ad campaigns profitable
  • How YouTube ads work
  • Examples of successful You Tube TrueView campaigns
  • How to optimize a Google Shopping campaign

Other Resources And Books

Sponsors

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Transcript

Steve: You are 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 with their businesses.

Now today I’m thrilled to have Brett Curry on the show, and we are going to talk about a cool ad platform that is very effective that very few merchants are using today. Brett has spoken at various conferences, and I know you’ll learn a lot.

But before we begin I want to give a quick shout out to Klaviyo who is a sponsor of the show. Now I’m always excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I actually depend on them for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not a different provider. Well 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 which allows you to do many things. 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.

Now 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 Klaviyo, mywifequitherjob.com/K-L-A-V-I-Y-O.

Now I also wanted to give a shout out to my other sponsor, Seller Labs, and specifically I want to talk about their awesome new tool, Scope. Now if you know me I get really excited about tools that I like and use and Scope is a tool that actually increased my Amazon sales on several listings by 39% within the first week of use, crazy, right?

Now what does this tool do that can possibly boost my sales so quickly? Well, quite simply Scope tells you what keywords are driving sales on Amazon. So here is what I did, I searched Amazon and found the bestselling product listings in my niche, then I used Scope to tell me exactly what keywords that bestselling listing was using to generate sales. I then added these keywords to my Amazon listing and my sales picked up immediately.

So today I use Scope for all of my Amazon products to find high converting keywords in the backend as well as for my Amazon advertising campaigns. So I’m sure Scope can boost your Amazon sales almost immediately like they did for mine and 39% is nothing to sneeze at. So right now if you go to Sellerlabs.com/wife, you can check out Scope and save $50 off of any plan plus your first three keywords are free. Once again that’s Sellerlabs.com/wife. 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 Brett Curry on the show. Now Brett is someone who I met through Drew Sanocki at the Traffic and Conversion Summit in San Diego and we hit it off right away. Now Brett runs OMG Commerce, which is a seven figure ecommerce agency that has helped over 125 companies with their pay per click advertising.

Now not only does Brett speak at major conference events across the country, but he also writes for a variety of sites like Digital marketing and Search Engine Journal. He is also the author of the Ultimate Guide to Google Shopping published by Shopify, and the host of the Ecommerce Evolution Podcast.

Now, today what I’m going to do is I’m going to pick Brett’s brain and talk about some of the PPC platforms that not a lot of the little guys are using yet such as shoppable TrueView ads. And with that, welcome to the show Brett. How are you doing today man?

Brett: Hey Steve, I’m doing fantastic, really excited to be here. Thanks for having me on.

Steve: Yeah, really happy to have you. Let’s start by having you give us a quick background on how you got into ecommerce and why did you decide to create an agency of all things?

Brett: Yeah, so I kind of fell in love with marketing. I started working for a radio station in college. So I was kind of trying to pay my way through college, I was selling ads to business owners. I fell in love with marketing; I fell in love with ads, just kind of kind of a psychology behind it, what causes people to take action and buy things, and so changed my major to marketing surely after college.

I don’t know if this was divine providence or just youthful ignorance, but I started an agency right out of college, probably not the best idea, and but just grew it and it started working mainly with companies doing traditional marketing, so TV, radio. TV was my passion and so helped that, and then I guess in 2004 I had a client coming to me and say, hey do you know SEO? They were an ecommerce company and I said no, I know nothing of it and he said, we will pay you to learn it.

Steve: Wait, why you?

Brett: And I said great that sounds fun; that sounds awesome. So I learned SEO, I get them actually ranked on page one for the search term brochures. And I was using like article directory and stuff that does not work anymore, but I was hooked man. I was hooked as I mean the search engine stuff is awesome. And so really started digging in and then a business partner and I started OMG, Online Marketing Giant is what that stands for but started OMG…

Steve: I’m sorry, what does that stand for?

Brett: Online Marketing Giant.

Steve: Oh, okay, I was thinking of it, oh my gosh!

Brett: That’s what everybody thinks, but it’s one of those things where we kind of started the business as more of a project. We didn’t even put like time and energy into the name. So Online Marketing Giant is what came out.

Steve: Okay.

Brett: But then everybody started calling us OMG, so that’s what we stuck with. But yeah, started doing — tried everything in the beginning like a lot of agencies do and that was a mistake. We were doing development and design and all kind of stuff. And we realized, we are good at search, like we do search really well. And so that’s kind of where we’ve been focusing since about 2010.

Steve: How has that evolved into like Google Shopping and some of the other search campaigns that you have done? Like it sounds like before you started out with SEO, right?

Brett: Yeah, and we still offer SEO and I’m still a believer in SEO, but it’s changed so much. Like I think now one of the best things you can do with SEO is just to make sure your data is correct, and make sure your site is crawlable and structure it, and then make sure you are putting on great content as there are no shortcuts, no secrets, tricks to SEO any more in my opinion. So we still do a little bit of that, but the thing that forced us to do more on the page search site is Google start changing the SERPs, the search engine results pages.

Ads are now dominating the top, you know often the top four spots, and you got Google Shopping which is very prominent. And so we started doing more and more paid because we love the math there, future campaigns down, then you spend more, you make more. Everything is measurable and trackable, and you have a lot more control which is great. And then I guess it was about, I was getting my — I’m bad with dates, but I think around 2012 is when Frugal which was the old Google Shopping right it used to be free.

Steve: Yeah.

Brett: It transitioned, yeah so transitioned into product listing ads. I had a friend of mine who owns an ecommerce store who pulled me aside one day and he is like, dude, I’m getting ten to 12X on my product listing ads. I was like whoa, so I kind of dug in then with both feet because we had some ecommerce clients, and I just felt like man, this is going to be huge. And so we really tried to establish ourselves as experts there.

Steve: Okay.

Brett: And so yeah, so it’s worked well, so I get to speak at Traffic and Conversion which is where I met you and speak at RCE in June on Google Shopping. So it’s phenomenal but then it also relates to what our topic is today of shoppable TrueView which is pretty cool.

Steve: Yeah, so before we actually get into that I’m just curious and I want the listeners to hear this because I always get questions on how to rank organically in search. And I just wanted quickly your take on you know, if you are just starting out going after organic versus PPC traffic, and I know my answer to this question, I’m just curious what yours is.

Brett: Yeah, I would definitely go — I would focus more, well, I would do both, but I would, I would put more emphasis on the paid search in the beginning because you can control it. And also if you’ve got a site that has no traffic, so nobody is visiting the site, nobody is clicking around or anything, Google is going to be pretty hesitant to rank that. That’s what we’ve seen anyway.

Not the traffic itself is a huge signal but zero traffic can cause some hesitation, recently what we’ve seen. So I would definitely work on getting your structure correct, your title tags and good content, but I would put a little more emphasis on paid searches, did you ever thought that Steve?

Steve: Yeah, my answer I always give is SEO is always kind of a slog, like you might not even see results until like a year, a year and half later.

Brett: Exactly, exactly.

Steve: And so you need to get some traffic there. And then Google actually needs that traffic to determine whether your content is actually any good because they have a lot of measures for like time on page and user metrics and that sort of thing so.

Brett: Exactly, and I think that’s fantastic right, like I know a lot of SEOs complain about that. But I think Google looking at those on site metrics and using that to influence the ranking out rhythm makes sense, like they want to rank sites that people consume, and that they are actually good. So the other thing I think you can do is you can start to use some of your copy, your headlines and some of your hard copy that work to potentially influence your meta description, which is mainly — it’s not a ranking signal, it mainly just helps to get the clicks, so you can use that.

You can maybe use some of your headlines and ads that work to influence your title tags which I think can work. And then and one thing that’s weird is about the hierarchy of your ecommerce sites. So home page is most important, then category pages, and then product detail pages. And if you can spend time on these categories pages, try to build the authority, try to share them, try to make sure they are structured right, that can kind of pass through the authority to the other pages.

Usually for new sites though it’s those product details pages that will rank first because they will rank for long tail product specific queries. So yeah, fully grip. SEO it is a marathon for sure, months and months usually in the works.

Steve: Okay, it’s good have that it’s coming from someone who does this for a living. I’m just curious also before we begin like how do you kind of differentiate you agency from like the thousands of other PPC agencies out there?

Brett: I know, I know it’s tough. There is a lot us, that’s for sure. I think it comes down to a couple of things. One, we think — we try to think more like business owners than just technicians when it comes to AdWords. So of course we are geeks when it comes to the numbers and we have formulas we use for Google Shopping and AdWords, and then so we all about the performance. We try to think strategically and try to think like business owners because my business partner and I, we are all business owners.

We try to instill that in our people as well. We’ve had the good fortune of becoming a Google premiere partner, so in the top 3% of Google partners. I just found out a few weeks ago we are one of the fastest growing in season North America from Google’s numbers which is cool, but we will try and emphasis results and reporting, right?

Steve: Okay.

Brett: So we want to be keyed in on what your goals are, but then how do we show you what we are doing? And that’s really I don’t know if you’ve talked to many other agencies, but the act of reporting, like getting the showing clients what you’ve done and how it works and all that, it’s just tricky. We have a lot of clients come to us saying, I don’t know that my previous agency was terrible, but I never got any reports, I never knew what was going on, so reporting is huge as well.

Steve: Okay, so Brett one of the reasons why I want to have you on the podcast is because you work with a variety of ecommerce companies, and you have a lot of data and experience with a bunch of different types of products, right? Specifically I want to talk about shoppable TrueView because it’s actually one of the few ad platforms that I’ve actually not tried myself. And so let’s start out for the benefit of the listeners, first of all what is it and how does it work?

Brett: Sure, so let’s talk about TrueView first, just in case anybody doesn’t know what TrueView ads are. You’ve all experienced some, so if you go to YouTube, watching your favorite cat video or whatever. And before your video starts you see the ad that pops up and about five seconds in you see the skip ad button pop up.

And what’s always amazing to me is and I’ve had this happen before where the ad will pop up and I’ll get angry, I’ll be like no, I want to watch the barbecue video or whatever it is that I’m looking at. But then something in the video hooks me, and I end up watching the whole thing. It seems to be like the Red Bull videos for me, for whatever reason they are mesmerizing.

Steve: Okay.

Brett: Yeah people jumping out of spaceships and back flips on motorcycles and stuff. But anyway I’m planning on skipping but then I don’t skip, and that’s kind of the idea there is you want to hook the person so they do watch all the way through. But the beauty of TrueView ad is if someone hits the skip ad button, the advertiser does not pay for that. So it’s called the TrueView, you have to watch at least 30 seconds of the video or the whole video, whichever comes first.

So if it’s less than 30 seconds, yeah, watch the whole thing or the advertiser is not charged. If it’s longer than 30 seconds then the viewer has to watch at least 30 seconds before the advertiser is charged. And one of the things I mentioned briefly that I did some work in TV and radio. TV was always my favorite. I love the video component. I never created, I mean videos, but I worked on the campaign side of things structuring buys and where the video would run and things like that.

But there is just something kind of magical about video I think. There is like almost a celebrity status if someone sees you or your product on a video especially if it’s on TV. But I think you get some of that with YouTube as well. Like seeing that video ad, just it can bring credibility, it’s just pretty powerful. But with TV, we were doing TV all the time with my small agency back in the early 2000s.

We didn’t know if people were engaging with the video, if they were watching all of it or if they are changing the channel or is if they T bailing it, or if they are getting up and going to the bathroom, we have not idea on any of that. With YouTube you can see, you know you don’t pay if someone skips, you also can see how much they are viewing, to what percentage are they viewing. So it’s pretty cool, so the viewer has to at least watch 30 seconds of the whole video or they have to interact with the video. So…

Steve: Let me ask you about YouTube Videos in general.

Brett: Yeah, go ahead.

Steve: So I noticed some of them force you to watch like the full 30 seconds and some of them are the TrueView ads. So do you recommend using the TrueView type of ads?

Brett: I do recommend TrueView. So the ones where you have to watch all 15 seconds or whatever, now they got some six seconds and eight second ads. We are actually experimenting with some of those six second and eight second bumpers is what they are called for a shoe client of ours, online retail that sells shoes. But it’s kind of a different purpose there, and usually you will see larger advertisers will do that just because all they care about is the branding.

Steve: Okay.

Brett: But if you are looking for someone to take action which we usually are looking for someone to click through, to visit the site, to click on the product listing ad, whatever the case may be, then we want a little more time and we also want people to self-select. So if they are not interested at all, then we don’t want to pay for that person.

Steve: Okay.

Brett: So yeah, usually it’s the TrueView that we are recommending.

Steve: I’m just kind of curious what some of the metrics that you see are, because I actually, like when I’m on YouTube, I want to watch the video, right? It’s very rare and I don’t think I have ever actually clicked on an ad to actually get taken off the site to go somewhere else. I’m just curious what are some of like the click through rates that are good for like a YouTube ad?

Brett: Yeah, so that’s kind of very pretty, pretty wild layer. There is a couple of metrics that we’d want to look at. One is the view through rate, right? So that’s kind of the first metric we want to look, and that’s the percentage of people that see the video, that actually complete a view. So again that will be the 30 seconds or whole video, whichever is first.

So with that I mean ultimately it doesn’t matter I guess if you are making money on the back end what your view through rate is. But we see anywhere from on the really low end like nine to 12% on up to 20 to 30% if the video is compelling and if it’s highly targeted.

Google will also show you your cost per click as well. So they don’t charge you for the click just to be clear there. So let’s say you are running an ad for your product and you get some kind of offer that overlays on the video, someone clicks on that to go to your site, basically you are charged your view rate.

Steve: Okay.

Brett: So if you are biding like nine cents to 12 cents is often kind of what we are looking at on a CPV or cost per view bid. Sometimes it’s low as a penny, we’ve done as low as a penny in certain cases. If someone then clicks you are actually charged your view, your CPV, your cost per view

Steve: Okay.

Brett: But what Google does is they’ll calculate a true cost per click, so they will look at all of your expense divided by clicks and give you a true CPC but that’s often a few dollars. Like if you are just looking at the CPC, you’d say, oh this is terrible compared to AdWords to look at click through rate. So the other metric we want to look at is view through rate as well which lets someone — I’m sorry, view through conversions so that someone who views the ad does not click on anything but then they purchase within a certain window.

Steve: Okay.

Brett: And to me that’s valuable because like you said, okay if I’m on YouTube it’s because I want to watch the sports highlight, or I want to watch this how to video, how to fix my mower, my dishwasher, whatever. But seeing that message, seeing that offer maybe I’m going to come back later to the site. So looking at the view through conversion rate as well is also important.

Steve: And so Google can tell like if you switch devices and still consider that a conversion?

Brett: There are — I mean Google is getting better and better at cross device conversions which we had our reps come in right from Mountain View a couple of weeks ago, and we were talking about that specifically. They are getting better at that, I mean it is not perfect in that Google kind of needs someone to be signed in on their desktops and on their mobile device to be able to be really connected, but Google is getting better and better at that.

So yes, so someone can see, Google can see if maybe I convert on the desktop so I view the TrueView ad, I don’t click on anything, but then later I visit the site and Google can track that that person actually did convert later.

Steve: Okay, and so you mentioned like a good ad that you’ve seen can get like a 20 to 30% view through rate?

Brett: Yup, yup.

Steve: Wow, okay that’s really high, okay.

Brett: It’s really high. Now I’m looking at some of the — I’ve got one campaign up now so the skin care products. It’s actually Boom by Cindy Joseph just a good friend of mine. We partnered on some deals, but this is one of his videos. It’s actually done very well; its view through rate is more like 11.78%. So again like you can’t take your view rate to the bank.

Steve: Of course.

Brett: You take conversations and sales to the bank of course, but it can at least indicate, okay how engaging is this video, and then we want to dig in a little further and see, okay when are people bailing, at what percentage? It could be that they are bailing when they see our offer pop up, and if so, great. Like we want them to take the click through and take the offer, but we do want to pay attention to that. This particular video that I’m looking at now that had the 11% view through rate, it’s a long form video, it’s like a four minute video.

Steve: Wow! Okay.

Brett: But their view through rate is based on the 30 second minimum though, so yeah, it’s going to vary.

Steve: Okay, and in terms of targeting then, is this more like top of funnel stuff or is it more like retargeting? Like what do you recommend? Like if I was just starting out with my store for example and trying the YouTube ads, what would you recommend?

Brett: Yeah, it’s good question. So yeah, for Bumblebee Linens as an example or any site, the first thing I would is start with remarketing list.

Steve: Okay.

Brett: And that’s where this has the most predictable wins. You know I think probably most people that are listening are learning some form of remarketing, I would anticipate that they are. And yes it’s pretty easy in AdWords to set up your dynamic remarketing where the products someone looked at, that’s a product that’s going to be in the ad provided that you get your feed set up and everything. But I would look at — for shoppable TrueView I would look at a couple of different remarketing lists first, and I’ll kind of break these down from least likely to convert to most likely to convert.

So you can start with just all site visitors, and typically the more recent that visitor was the more likely they are to convert. So you may have all site visitors from 180 days, 90 days, 30 days, and then the most recent are going to convert the best. Usually we break up those audiences into different ad groups at least to manage different campaigns.

Steve: Okay.

Brett: But all side visitors, so obviously that anybody who has visited the site that they didn’t convert, let’s consider remarketing to them kind along the next step up they will be more likely to convert, would be product page visitors. That’s where you are saying, okay target people that visited a product detail page or PP viewer and maybe will bid a little more on that view.

And then one step up of that would be then cart visitors, so people that have visited cart but abandoned. And again I would at the recency of 30 days, 15 days, seven day. Usually the 15 day or 14 day, seven day is what’s best, and then the step up from that and this one is kind of interesting. This takes a little custom work with your audiences, but the bought X but not Y list is a very powerful one.

Steve: Okay.

Brett: So back to Boom by Cindy Joseph, and Ezra actually had a case study that will be released maybe here in I don’t know, a month or two, but one of their more popular products is BoomSilk. So it’s a moisturizer, a skin care product for females over the age of 45, is kind of his target demo. But basically we get this list of all these buyers who have purchased from Boom but did not buy Silk. And so the beauty of that is then we can run a video targeting them that features BoomSilk, and then with that video then we have the product listing ad that runs next to it.

So that’s kind of the beauty of shoppable TrueView. I guess I didn’t really explain what shoppable TrueView is, but that’s where you get your TrueView ad that’s based on a- you are only if someone views or clicks through to your site, but then right next to that, either under it on a mobile device or next to it or top of it on a desktop, you get your product listing ads. So picture priced title, those ads are right there by your video. So it really encourages shopping, pulls someone through to click on your products. So that bought X but not Y, I mean that’s a killer list right there that works very well.

Steve: I just want to take a moment to tell you about a free resource that I offer on my website that you may not be aware of. If you’re interested in starting your own online store, I put together a comprehensive six day mini course on how to get started in ecommerce that you should all check out. It contains both a video and text based tutorials that go over the entire process of finding products to sell all the way to getting your first sales online.
Now this course is free and can be obtained at mywifequitherjob.com/free. Just sign up right there on the front page via email and I’ll send you the course right away. Once again that’s mywifequitherjob.com/free, now back to the show.
Okay, and yeah, I would imagine that works well because someone has already purchased from you and it’s a related product to what you have already purchased, right? So-

Brett: Yup, yup, exactly.

Steve: Just curious and maybe we can just use as an example since you are already doing a case study on it. So what do the conversions — what do the ROIs look like kind of going up that tree of audiences that you specified?

Brett: Yeah, so we are having the most luck with cart visitors and then the bought X but not Y. The bought X but not Y that’s smaller list, so total conversions are a little bit less. I don’t have the actual numbers of that one — yes I mean we are looking at their cost per conversion goals. These are right under it. So we are kind of maintaining or coming a little bit under the cost per conversion goals for that particular list. Now actually for this one, for Boom, the cart visitors has actually worked a little bit better. It’s well below; it’s almost like a third of their CPA goal.

Steve: Okay.

Brett: They were getting on cost per conversions for that audience. A little bit different video, the one is just targeted just for Silk is that for specific product video, so it can be part of it. But yeah, I mean typically if you are looking at, hey what is my CPA? If you are doing, if you are running this as a remarketing vehicle and you got your lists set up properly, you got your products and your products listing ads are running next to the video, you can usually hit that CPA target or come in a little bit below it.

We got a jewelry client, so they sell earrings, body jewelry, things like that. We are coming in at about 30% under their CPA target with this platform, and then getting some nice volume as well.

Steve: I know for me I haven’t tried these YouTube ads yet but just my regular retargeting on Google, like the all website visitors tends not to return my investments that well. So I switched over to just cart ads and then all of a sudden it’s — and I’m just curious whereas you know on Facebook I’ll do visitors and it works pretty well or product views I should say, and it works significantly better than Google. Would you expect like the display ads to perform similarly to the YouTube ads with the retargeting?

Brett: Yeah, I would think so, I mean I don’t know that I have ever done a comparison of the two to see how comparable they are. But we definitely see the same thing, so with all of our clients we recommend remarketing and typically dynamic remarketing because we are already running Google shopping; we got the feed there so we can do the dynamic remarketing. It is a little hit or miss when it comes to the all visitors. You are absolutely right, sometimes for certain clients that does really well, for others not that as much. But yeah, the cart visitor or even per detail page viewer is much more likely to convert, that’s for sure.

Steve: I guess what I’m asking is should I be using these YouTube ads, the shoppable TrueView like if I’m successful with shopping and my display ads, like is this shoppable TrueView like the next step for me? Like should everyone be doing this basically?

Brett: You know it’s kind of hard to say that everybody should be doing it, and I’m all just a little bit skeptical I guess as far as that goes. But I mean one, you do with that video assets and your product has to lend itself well to video. I think most physical products do, but there may be some exceptions. So if your product, you know probably demonstration, testimonial, having a good video that really shows the feature benefits of the product, it’s got a good call to action, you got your viewer rated products right there next to it, it can work very well.

So in most cases I would say absolutely through running. If you got some success with Google Shopping, your remarketing ads are working pretty well, your display ads are working well, I think this is a great next step because a little bit different ad format, it’s interactive, you got sight, sound, motion. You can see the product in action; it’s a little bit different as well. It’s also the combination of; hey this is like it’s my shopping ad all over again. It’s my shopping ad but with this commentary, this video running right next to it which is pretty cool. So yeah, I think for most people it can be great. You do have to work on the video content, we had a…

Steve: Yeah, can we talk about that for a little bit, like what makes great video content? Like you have five seconds to get them to watch, right?

Brett: Exactly, exactly, so yeah, that’s one of the first steps is you got to hook them in the first five seconds because that’s all you have. So we had a — we got a client that sells barbeque grills and pellet grills and camping stoves and things like that. And so they brought us this one video they wanted us to advertise, we do a lot of video work for them. But they brought us this one video and it was like six seconds of the logo flying in and doing stuff and we were like guys, this is not going to work.

Your logo is cool, we like it, but not six seconds worth of logo animation. So you got to catch within the first five seconds. You are one of my favorite examples and I mistakenly showed this video to my kinds and then paid for it because they were quoting it all the time, but the Potpourri video, where you got the…

Steve: Oh yes, yes, yeah.

Brett: Yeah, it’s a great video, so there is this young attractive British girl in a toilet in a dress, yes so it’s very appropriate. She is on a toilet in a dress and something to the effect of- hopefully this is too inappropriate, but she says you will not believe the mother load I just dropped, right. So that’s the opening of the video and you are like what is this you know. So obviously that’s the humor play, and that can work for some businesses, obviously it wouldn’t work for others, but it at least hooks you in the first five seconds and makes you think.

So back to the barbeque grill place like we said, hey, show the food, like show the food sizzling. I want to see a rack of ribs on a grill or some music behind it, the steam coming up, something like that. So hook them in the first five seconds, right? You also want to lead with the strongest benefits. So what am I getting from this? What is this ultimately doing for me? Is it a time saver? Is it money saver? Is it changing my life in some way? Is it allowing me to cook the best barbeque I have ever cooked? Is it allowing my bathroom in office to no longer sting? Whatever it is, lead with that, the strongest benefit.

I think one of the things that people don’t do with videos, they don’t use it to its full strengths right so show me, don’t just tell me. Don’t give like just the bullet list, just flash like a bullet point up on the screen. Like show the product in action, show the video working and cutting through this really thick underbrush or whatever. Like show the product in action [overlapping conversation] [00:31:55].

Steve: Can you talk about production quality? Because I know probably a lot of listeners don’t have like the budget to create like a professional video, is that required or?

Brett: Not at all, I’m really glad you asked that. Yes, I’ve mentioned some kind of well known ones that are high production quality, but no I do not believe it has to be high production quality at all. Shooting even with an iPhone, but as long as it’s to the point. I think it should look clean and it shouldn’t look sloppy, but it doesn’t have to have like a high finish quality right. If it was making via testimonial based thing, right? So it could be even a customer saying, hey, use this skin care product, I absolutely love it, he’s been using it for 30 days, these are the results that I saw or whatever. So it could be even more like a customer testimonial type approach.

So there is not one right or wrong way to do it. I wouldn’t say, hey, let’s invest $5,000 worth of video production company to test this, like that’s kind of silly. I would look at how can we — the minimum viable product type approach. How can we get a video that speaks to our customers, that highlights the product, that has a good call to action, and how can we do that really affordably?

Steve: Okay, so let’s assume that I have my shopping list or the feed, my product feed set up and let’s say I have a creative set up and I’ve run some ads into my retargeting list, so what do I do? Like what am I looking for in terms of metrics? So you mentioned the number, the percentage of people that actually view the video to completion, what are some good percentages? Like how do I know it’s a dud, and what are some of the next steps after I’ve let the video run for a little bit?

Brett: Yes, so I would look at the view through rate in a couple of different ways. If it’s really low, like if its sub 10% then you may either want to think about two things; either the video is pretty bad. You know it’s not capturing someone, it’s not picking their interest, there is no benefit whatsoever. So it’s not causing them to want to watch.

Or something is wrong with the targeting right, which probably shouldn’t happen if you are doing a remarketing list. Like that should be a pretty good list. But maybe, consider this has happened where someone thinks that their marketing to a remarketing list but they just have that in addition to a general audience or something.

So if it’s sub 10% I would look at those two things; like either we are not targeting the right person or this video is really bad. So that’s something to look at for sure. The thing that we always do, this is not like your bread and butter campaign, right? If I were to say okay, your foundational campaigns that you are going to build your business on are your text campaigns and your shopping campaigns.

Like those are your bread and butter, those are your real money makers. This is something you run in addition, like this is something that you help get more total conversions, because they didn’t convert initially and it’s your remarketing vehicle. We can talk maybe a little bit about top of funnel stuff in a minute if you want to.

Steve: Sure.

Brett: But this is not going to be your bread and butter, how I make millions of dollars you know with this campaign, but it can be very powerful. So then I want to look at your conversion rates, so how many direct conversions and the default there is those are conversions where someone clicks through the video and buys right then, right? Because the default is always last click attribution. So someone clicks through the video, they buy right way.

So I would look at that, but then I would also combine your view through conversions and then calculate your total CPA, or total return on ad spend whichever metric you prefer to see okay, is this within my goal? So for remarketing campaigns I’ve got a $15 CPA, that’s my goal. Well, if I combine those view through conversions and the last click conversions, am I getting there or not?

So ultimately for me that’s the biggest number is looking at my total conversions and view through conversions, and am I meeting my target, but you can also look at it at a couple of different ways. We have a few — they are not large clients like fortune 500 or anything but people with pretty good size budgets. They also view this as I just want to make sure people remember my name you know.

Steve: I see.

Brett: And so then we’ll look at audience building as well. So one of the beauties of running anything on YouTube is you can build YouTube remarketing list. So as you run these videos, as people engage with them, they get dropped into a YouTube remarketing list. So that’s a list you can use in other purposes as well which that’s kind of cool. So you can say okay, people who have seen this video now I want to remarket to them with this other video.

Steve: Okay.

Brett: And almost create like a funnel with your YouTube targeting. There are also there a few YouTube lists. You can even remarket with your text ads, or you use like a remarketing list for search ads.

Steve: Interesting, okay.

Brett: Yeah so that’s growing and it’s only — I don’t even remember which list it is. It is limited so not all your YouTube lists can you use to target on search, but I do anticipate that will expand over time. Google is doing a pretty good job about making, allowing more and more audience layering, audience targeting even on the search platform.

So that’s another thought, like the outdoor cooking company we work with. A lot of what want to do is like they just want; they want people to know their grill, right. And then they want those people to come to the site, so it’s kind of an audience component with a few of our advertisers, but ultimately I’m looking at CPA.

Steve: Here is a random question, like let’s say someone watches one of these YouTube ads and clicks on it, but later on clicks on one of my AdWords and makes the purchase. Does Google double count that as a conversion?

Brett: So right, so they would count that if it was in the view through window, then yeah, it would be conted as a view through conversion for that YouTube video, right? But the last click conversion, assuming you got a last click as your attribution which most people do, that’s the default, then it would also be attributed to that text campaign as well.

Steve: Okay, so that makes ROI calculation confusing, doesn’t it?

Brett: It can, it really can. Yeah, I mean one of my favorite quotes when it comes to analytics is by a guy named Avinash Kaushik. Have you ever read any of his stuff yet?

Steve: Aha, I know who he is, yeah.

Brett: Yeah former Googgler and Occam’s Razor is his blog, all that analytics, supper smart guy, but he says your goal with analytics and attributions is be less wrong. So you are never going to be right, you are never going to be 100%, so just continually try to be less wrong. We are experimenting with different attribution models now, so there is last click is what almost everybody uses so that’s the default.

That’s where, say someone clicks on a YouTube ad and then they click on one of your text ads and then they come back through an organic search, with last click all the credit is going to go to that organic click, because that was the last click before conversion.

We are looking at you know linear, we know some of these linear, there is time decay where you can maybe get a little more credit to the first click, a little more credit to the last click and a tiny bit of credit to those in between. We are also playing around with the data drone which is kind of interesting is where Google begins to look at all the attribution models, and they begin to assign different weights based on the numbers to first click, last click, middle click. But anyway yeah, that long winded answer, but yes it does make it tricky.

Steve: Okay.

Brett: So one of the things we recommend people do is let’s consider what that view through conversion actually means right. So and let’s make sure that we are building an audience and that we have other goals in place as well. So if you are looking at your click through conversions and you are just like barely meeting your CPA targets, then maybe you need to do some adjusting because likely it’s possible that that view through conversation is being attributed to something else as well.

Steve: How do I come up with a good CPA target?

Brett: Yeah, so I keep saying CPA because a few of the examples that I’ve used here that those clients prefer CPA. To me it’s either going to be — it kind of comes back to are you building a customer or are you are making a sale, right. So if you are making a sale and that’s all that matters, then is that am I profitable on that first sale. So I’m looking at AOV and my margin, and then I’m calculating okay, what percentage of my margin can I give up as a cost of advertising.

Steve: Okay.

Brett: Other people and Boom would be this way and we’ve got a few other where they look at, okay, we know people are going to purchase maybe a couple of times for the first year, so our CPA target is going to be based on that.

Steve: Okay.

Brett: But we actually use, we use return on ad spend a little bit more. And so that’s where — but it’s basics you get to either number it kind of the same way, but we try on ad spend as revenue divided by cost.

Steve: Right, right, that’s what I use too. I actually tend not to use CPA but yeah.

Brett: Because then, because a lot of our — we have some merchants that are like Boom where AOV is very consistent, so CPA makes sense. But we got clients that have over 100,000 products, so did someone buy the $10 product or did they buy the $1,500 product that makes a difference. So that’s why we usually favor return on ad spend.

So that’s where again you are looking at okay, here is our margins so quick math, you have 25% as our margins. If you want to break even on that first order, we need a four X return — for return on ad spend. So you kind of get into the numbers either way, but yeah preferable 80% of our clients will look on return on ad spend, but CPA works as well.

Steve: Can we talk about top of the funnel a little bit; I mean it sounds like you would use up a lot of money on top of funnel.

Brett: Yeah, yeah. So this is something I just want to be totally transparent, we are experimenting a lot with this, so we got a couple of clients where they know, we know, hey this is experimental so we are not going to use a big budget, we are just going to start testing some things.

So if you are just starting out, if the majority of businesses on Amazon let’s say you are just building your store, don’t go top of the funnel with video. They’re like — it’s kind of like getting a half-court shot at the buzzer, you know when it happens it’s awesome and not supper likely. Go for the lay-up, go for the remarketing list first.

Steve: Okay.

Brett: But what — so what we are doing though, I’ll just give you a little bit insight here. We are looking at similar audiences, so you can take your purchase list, all those that are, all converters and then just like in Facebook you get the look alike audience, you can do a similar audience with Google. And so that’s a pretty good audience to test.

Steve: What does the landing page look like, just curious for those ads?

Brett: Well, if you do shoppable TrueView, your landing page is probably your detail page because that’s the way that item, that’s how that platform works.

Steve: But for top of funnel, like, they won’t have visited your site yet right? So are you just showing them random products then or related products to the video?

Brett: Yeah, so usually you try to relate the products to the video. So it depends, like if you are going top of the funnel and you more want to get them into like a sequence, a presale sequence where you just get them plugged in, then it’s probably not going to be shoppable TrueView. It’s just going to be TrueView with click through to the site, and then your page is informational.

You want to definitely try to grab their contact info in some way. I love how you guys are doing the spinning wheel on your site. Some of the clients same end working pretty well, but yeah, it’s top of the funnel purely then, then maybe you don’t do shoppable TrueView. But we are still testing shoppable TrueView even with top of the funnel because we are looking at a similar audience. Sometimes we will refine that a little bit more.

What seems to be the most promising audience right now is looking at a combination of in market audiences and keyword targeting. So if you look at in marketing audiences, those are people that identify themselves through their behavior or something else for this that I’m in the market for skin care, or I’m in the market for an automobile, I’m in the market for hair care, something like that.

So you get this audience you can pick in and YouTubers saying, okay, these people have indicated they are in the market for this product, and then want to layer in keyword targeting. So now I’m saying, okay and this person has recently searched for organic skin care where they recently searched for barbecue recipes or best pallet grill or something like that.

So now you are saying, okay I’ve got this audience that they have identified they want to buy something and they are searching on YouTube for keywords that also cause them to be more qualified. So that audience seems to be the most promising and the most exciting. But it’s still, we are still testing a lot of things and I would not start with top of the funnel.

Steve: That’s interesting; I didn’t know you could do that. So you can target people based on what they’ve searched in the past recently?

Brett: Yeah, yeah, what they’ve searched for on YouTube, so you do your keyword targeting.

Steve: On YouTube, okay, okay got it, got it.

Brett: Yeah.

Steve: Uh okay interesting, so I cut you off, yeah.

Brett: Yeah, so that’s what I’m most excited about, so I mean so then what I would look at let’s say we are promoting pallet grills which we’ve done this a lot with their huge portion on holidays. So I’ve got my pallet grill video, in that case, I’m going to go ahead and put the pallet grill PLA. So I’m going to make that shoppable TrueView because why not, I want to show the price, I want to maybe get some people clicking and shopping.

So I’ll run the pellet grill video. I have the pellet grill PLAs right there with, it’s going to be Shoppable TrueView, and then I’ll go after that audience, so if in market plus keywords. But again, it’s going to be nowhere near what your remarking list is and in some cases you’ll get nothing in terms of [inaudible] [00:46:07].

Steve: Okay, I mean this sounds like a lot like Facebook top of funnel also right, I mean like whenever I run top of funnel Facebook, I’m just trying to get their email for the most part.

Brett: Exactly, trying to get their email, trying to get them on a list so you can remarket them in a slightly different way exactly, yeah. It’s definitely the long play. Like if you are just looking at, okay, I’m running top of funnel to get some direct conversions, good luck. That’s probably not going to happen right away. You need to push them into your funnel.

Steve: Okay, okay. I’m just curious like what is like the minimum budget you would recommend to even start running these types of ads like the shoppable TrueView ads?

Brett: Yeah, if you are doing remarketing, then I wouldn’t really put that much of a minimum on there, you may as well set it up and start testing. I guess the one variable though is like the effort or the expense to create the video right. So you a want pretty decent size remarketing list. The minimum I think is 1,000 people on the list as your absolute minimum, but if that’s all you have you are going to be pretty limited in your visibility there. But I would look at, do I have 1,000 people on my marketing list or hopefully more.

And then really whatever budget you want to put out there, a lot of times we are looking at $500 so a month budget for shoppable TrueView just because we kind of calculating, okay that’s going got get us X number of views, and will that give us any meaningful data? But if you are going after remarketing list, as long as you’ve got enough people to target then go for it. If you are a smaller store with smaller amounts of traffic, and you are only doing remarketing, then likely whatever budget you have you are not going to quite hit.

Steve: I guess what I’m trying to ask is like how do I know, like in Facebook like there is this, there is frequency right, and so how do I know whether I’m saturating these people, is it just adjustment based on like the return on ad spend when it comes to ranking these ads?

Brett: I mean that is definitely the most important metric in my opinion is to look at the return on ad spend and CPA. But we do often look at frequency capping when we are setting up these campaigns, we just kind of did that for one of our retail clients recently. And it depends, I mean it all goes back to testing in my opinion, but maybe three views within a week or something like that and that’s going to be your cap on frequency. But just kind of look, dig into the numbers.

But to me it’s like would it be a worthy effort in starting; probably need to have a remarketing list of minimum 1,000 to 5,000 and hopefully more before we kind of dig in you know.

Steve: Okay, okay yeah, I mean of course you have to look at your numbers. I was just looking for like some general guidelines since you run this for so many different companies.

Brett: Yeah I got you; it’s all over the board on some of that, so I’m having a hard time getting an exact number there.

Steve: Okay and I know you specialize in shopping. I’ve actually, we spend a lot of time talking about TrueView, but I was wondering if you had some — like when someone comes to you with their shopping campaign and let’s say it’s not performing well, what are just, like the first three things that you might do to try to see what they are doing wrong or how to fix one of their Google Shopping campaign?

Brett: Yeah, yeah it’s a great question and actually it’s very related because when you start working on your feed as an example to optimize your feed that’s going help with shoppable TrueView as well, because shoppable TrueView uses the same feed, the same product feed you use for Google Shopping and it’s used for shoppable TrueView. But usually the first three things we look at, the first is going to be the feed, we want to look at the actual product. So how optimized is your title, description, product type, you got the correct Google product category.

A lot of times we see miss matches there which can throw Google off just a little bit and kind of to go back to the SEO days you know back — it’s kind of where I got my start was optimizing titles and descriptions and things like that. So we look at that first, and it’s very common to either find clients that have lots of products that are disapproved, or very weak tittles that are not very descriptive without keywords in the title.

So look at the feed first and then you want to look at the structure of the campaign itself. So I’m a big believer in even looking at full funnel for Shopping. And Shopping by nature is kind of lower in the funnel anyway, so I mean there is not a true top of funnel for Google Shopping, but relatively speaking there is.

So like if some just typing in, going back to the barbeque example, I’m kind of stuck on that I guess. But if I just type in just pallet grill, I’m probably higher in the funnel on the search there because I don’t know brand, I don’t know details, I’m just pallet grills is what I’m typing it.

Steve: Okay.

Brett: But I have someone to target that person most likely, so we like to have kind of a top middle and bottom of funnel campaign in Shopping. Now as you know and I don’t want to get into all the details because I know you got another episode all about Google Shopping. You don’t pick your keywords; you influence keywords with your feed and with your negatives and with your bids and things.

So we typically just try to pull out top products, push those into the top of the funnel campaign. So what are our top converters? That’s what we are going to bid higher on, we are going to structure that campaign where someone who is typing in that really broad general term, that’s the product you want to lead with.

Then we look at — we like skew level biding, so kind of on the middle of funnel, bottom of the funnel where we at least want to look at skew level performance. And this is another one of first things we look at is, okay if it’s underperforming, there is probably some winners and some losers in there. What are the products that are doing well, what are the products that are not doing well? And we like to separate those out on separate bids. There is some disagreements on that, I think at a minimum you have to look at reporting at the skew level, but I like to bid at the skew level as well.

Steve: Interesting, okay.

Brett: And so what we’ll look at is okay this product is really underperforming, then why is it underperforming because we are at price competitive, is it an image issue, is it something else? And so we will try to trouble shoot that product so that basically you are trying to prune the campaign and feed the winners and starve the looser.

But then also one of the things that’s just fascinating, we try to run a bottom of funnel campaign that is super low bid, put everything in it and occasionally those do really well. But we like to look at yeah feed and then structure and then bid, and then those are typically the areas where you win.

Steve: I notice in my feed there is always like a handful of products that just don’t get any impressions, but in terms of what the merchant center is telling me everything is set up properly, is there a reason for that do you think?

Brett: It could be a number of things; I mean it could be that just there is not much search volume for that product. It could be that your title that you don’t have enough detail in the title description product type for Google to say, ahh, this is exactly what this is. It could be, so if you haven’t double checked that everything is approved, then one of the other things we’ve seen is that sometimes people think it’s okay, but it’s actually listed as out of stock when it’s actually in stock.

Steve: I see, okay.

Brett: But typically like one of the things we do is we’ll take things with zero impressions and make sure that they are actually eligible to be served, and then we’ll bid up on it. It could just be that you are not competitive; there are some, some areas where even the competition is really fierce for that particular product and those particular keywords. So you need to push the bid a little bit more.

Steve: Okay.

Brett: So that’s another place to look.

Steve: Okay, hey Brian, we’ve been chatting for 50 minutes.

Brett: Yeah, yeah, all right.

Steve: I know, yeah I can’t believe it actually. I do want to be respectful of your time. Really learned a lot about shoppable TrueView today because I’m not using it and it’s only been up for about a year or so, has it been a year?

Brett: Yeah, I think it’s been about a year, so it’s new for us to. I mean we knew Shopping forever but yeah, it’s still newer and not a lot of people are using it, at least I don’t encounter that much so I’ll talk to a lot of people using it. But I think it’s pretty exciting and I think it’s getting continued to improve, and I think it could be a good little addition for most commerce stores.

Steve: Yeah, absolutely, I mean the conversion rates for someone who comes to your site is what? The average conversion rate is like 2%, right? So the more ability of view to bring people back like the more sales you’ll make, right?

Brett: Absolutely, absolutely.

Steve: Brett, where can people find you online if they need help with their shopping campaigns?

Brett: Yeah, absolutely so check us out at omgcommerce.com, I’m also on twitter occasionally @BrettCurry, get me on LinkedIn or Facebook whatever you prefer, but at omgcommerce.com is probably the best.

Steve: Cool. We’ll Brett thanks a lot for coming on the show man, I learned a lot.

Brett: Yeah, really enjoyed it, thanks Steve, we’ll have to do it again.

Steve: All right, it sounds good, take care.

Brett: All right, you too thanks.

Steve: Hope you enjoyed that episode. Brett is an expert when it comes to Google advertising, and we are actually working on a joint case study right now where he has taken over a couple of my Google ads and I will report on the results. This post will come out in the next few months, so stay tuned. For more information about this episode, go to MyWifeQuitHerjob.com/episode173.

And once again I want to thank Seller Labs. Their tool Scope has completely changed the way I choose keywords for both my Amazon listings and my Amazon advertising campaigns. And instead of making random guesses, Scope tells me exactly which keywords are generating sales, and within the first week of use I actually saw a 39% increase in sales. It is a no brainer. So head on over to Sellerlabs.com/wife and receive $50 off. Once again that’s sellerlabs.com/wife.

I also want to thank Klaviyo which is my email marketing platform of choice for ecommerce 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 auto pilot. So head on over to mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s mywifequitherjob.com/ K-L-A-V-I-Y-O.

Now I talk about how I use all these tools on my blogs, 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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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!

172: Ramit Sethi On The Psychology Behind Starting A Successful Business

Ramit Sethi On The Psychology Behind Starting A Successful Business

Today I have my buddy Ramit Sethi on the show. Ramit is a New York Times bestselling author and founder of I Will Teach You To Be Rich.

His site reaches millions of people every month where he uses psychology and systems to help others to automate their finances, make more money, find their dream job, you name it.

In fact, I’ve generated millions of dollars over the years selling my class because I was inspired by Ramit’s success. Make sure you check out his latest book here

What You’ll Learn

  • Why Ramit waited 10 years to write his second bestselling book.
  • How he helps his students decide what business to pursue.
  • How to validate your business before investing a lot of money.
  • How to get your first customers.
  • How to make money when you have very little to invest.

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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Ignite.Sellerlabs.com – If you are selling on Amazon and running Amazon Sponsored Ads campaigns, then Ignite from Seller Labs is a must have tool. Click here and get a FREE 30 Day Trial.
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Transcript

Steve: You are 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 with their businesses.

Now today I’m thrilled to have my good friend Ramit Sethi on the show, and Ramit is the founder of the popular website, iwillteachyoutoberich.com. And today we are going to talk about his strategies for starting a successful business from scratch all the way from initial idea to execution.

But before we begin I want to give a quick shout out to Klaviyo who is a sponsor of the show. Now I’m super excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not a different provider. Well Klaviyo is the only email platform out there that is specifically built for ecommerce stores.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought which makes it extremely powerful. 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.

Now Klaviyo is the most powerful email platform that I have 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. And if you are interested in starting your own online business, head on over to mywifequitherjob.com, and sign up for my free 6 days mini course. Just enter your email on the front page and I’ll send you the course immediately. 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 Ramit Sethi on the show. Now if you don’t know who Ramit is, you’ve probably been living under a rock. He is a New York Times best-selling author and founder of iwillteachyoutoberich.com.

Now his site reaches millions of people every month where he uses psychology and systems to help others automate their finances, make more money, find their dream job, you name it. And what is double cool about Ramit is that he is fellow Stanford grad, which is pretty refreshing considering that I have interviewed my fair share of Cal alumni over the years.

Anyway here is a quick story about Ramit and I know that most of you out there probably do not know about. So way back in 2010 when Ramit released his Earn 1K program, I was actually one of his earlier affiliate partners for his course. Now this was about a year before I launched my own class and even before I had an email list.

So basically I read a blog post promoting Earn 1K, and I made eight sales in like six days, and that completely blew me away. Basically that was four- actually how much was it? So I think $4,000 in like six days, and after that experience Ramit actually indirectly convinced me to start my own email list and to create my own class. And today I generate millions of dollars over the years selling my course because I was inspired by Ramit’s success with Earn 1K. And with that welcome to the show Ramit, how are you doing today man?

Ramit: Hey I’m great and I didn’t even know that story, so that is incredible. I’m really happy to have played a tiny part in that.

Steve: So I think you were working with Charlie Hoehn at the time?

Ramit: Mm-hmm.

Steve: And I remember Charlie telling me he was like hey, I had only been blogging for a year at the point, and he was like, “Dude, you need an email list.” Like if you had sent an email I’m sure you would have sold a lot more than eight sales, and so I was like, “Wow! Okay, yeah.”
Ramit: So true, that is very true. Getting an email list is one of the best things you can do. One of the biggest mistakes I ever made was taking too long to set up my email list.

Steve: And not only that, I remember like your pair was half of the course sales, and I was thinking to myself, well if I create my own thing, well I get to keep 100% of that. And so that’s what kind of what inspired me to create my course in 2011 in fact.

Ramit: Yeah, that’s great. I think more people should think about what skills they have and turn around and create classes. I do think that everybody out there is telling you to create a class, and we try to take a very different approach, which we can talk about today because we always believe quality first, and I’ve seen it myself.

I’ve seen it to the tune of millions of dollars of difference between creating something that is super high quality and designed to stand the test of time versus just creating a piece of junk in two weeks, and just getting it out there because you want to make a quick buck. I think there is a huge difference, I love the craft, I want to talk about that, but I do think that every one of us has something interesting inside of us that other people might be willing to pay for.

Steve: Absolutely and we’ll get into that more during this interview, but Ramit, you know most people probably already know your story. But one thing that I’ve always kind of been curious about is how I Will Teach You To Be Rich has evolved over the years. And so back when we first met, I think it was in 2013, you were more focused on personal finance, but now it’s just like so much more. So what is like the long term game plan for your platform?

Ramit: Well, we changed a lot since we started. We started in 2004 and I started this not as some genius master plan. I started it out of frustration, because I was trying to teach my classmates at Stanford about personal finance and nobody really wants to listen. And in retrospect what college kid wants to talk about money and taxes and all that, nobody cares.

So what I did was I started a blog because I got frustrated, and I figured maybe these annoying college kids will actually sit in their dorm rooms, and we can talk about stuff that’s fun. We can talk about the cheap friend who doesn’t want to chip in for his tip when we eat out. We can talk about how to make your money work for you et cetera.

And that ended up being a great decision. The key learning I had from that was if you have a message that the world needs to hear, they might not listen the first time, they might not like the way you deliver it the second time. But if you keep persisting and you find the right channel, then people will sit up and they’ll pay attention.

So when I started off with personal finance that was awesome. To tell you the truth Steve, personal finance isn’t what motivates me every day, like I don’t wake up and talk about oh, let’s talk about tax deferrals, who cares?

Steve: Sure.

Ramit: But I do love psychology and I love using our behavior in pro social ways, so finding a better job, starting a business. So after I wrote a book and that did better than I expected, I started to see the potential of this business. And I learned about this thing called information products, online courses and really decided to double down there after trying a whole bunch of other options.

So since then the business has really evolved. Money is one of our core areas, but we’ve also added on careers and salary negotiation, starting a business, inner psychology, we even talked about cooking. So every part of a rich life, if we have something valuable to add we want to create material round it.

And what you’ll find is that our students who come to us. They’ll typically come to us for one reason, maybe they need to get their finances in order, they want to learn how to invest, or a lot of them negotiated $20,000 raise using our material. And then their eyes open up, they like, “Wait a minute, I can take these same principles and apply them to other parts of my life,” and that’s when they really start to stitch together their own version of a rich life.

Steve: So the rich and I will teach you to be rich is more like rich as in rich life as opposed to rich as in money, anyway.

Ramit: That is correct.

Steve: Okay.

Ramit: That is something I’m so glad you brought up because the first thought when people hear the word rich is a lot of time is just Scrooge McDuck. Sitting around, throwing gold coins in a vault, and swimming it and that is not my life. Now I will say this, I will say I think money is a small but important part of a rich life, and that’s why I started writing out about personal finance, because if your personal finances are not in order then it’s going to be very difficult to start a long term profitable business if you can’t even pay your bills.

It’s going to be very difficult to focus on losing weight or finding a new job and being patient enough to do that if you’ve got bill collectors, or you are worried about if you can afford Starbucks coffee. So I believe it’s an important, small, but important part. And then I do think that a lot of people try to nag us into telling us what we are not allowed to define as our rich. “Oh no, you can’t go on vacation. No, you can’t buy that leather jacket. No, you can’t do that.” No, no, no, and my approach was always, let’s use our money to say yes.

So if you want to go to Vegas and fly your buddies out with you for a weekend, awesome. Let me show how to do that. If you want to buy an expensive coat, beautiful, I’ll show you how to do that. You want to pay for your parent’s retirement; I can show you how to do that. So you define what a rich life is to you, whether it’s working from your home office like I do, or it’s going out and getting VIP service somewhere, that’s awesome. But I would rather say yes to a rich life instead of all the things you can’t do.

Steve: Basically focus on what makes you happy and then spend less emphasis on the other things that you don’t care that much about.

Ramit: Yeah, I mean if hear another person telling me to cut back on my lattes; I’m going to jump out of the window. I mean it’s the kind of advice that people say it sounds catchy, but nobody even follows. I know a lot of these personal finance experts; they do not care about spending. They love their lattes, and by the way if you actually ran the numbers and realized how much you actually save, three dollars a day for the next 25 years which by the way you are not going to do, it’s not even that much.

I would rather get a $20,000 raise or start a profitable business and buy all the lattes I want. So a lot of times we forget that we are cognitive misers, and instead of worrying about 20 or 50 little things, we should focus on those five to ten big wins in life, get them right, and then you never have to worry about, can I afford this appetizer or this coffee.

Steve: Those are great points Ramit, and I know that you talk about some of these things in your book, in your latest book called ‘Your Move: The Underdogs Guide to Building Your Business.’ One thing I was kind of curious about is your last book, ‘I will Teach You To Be Rich’ was released way back in 2009, and one question in my mind actually was, what made you wait so long to write this new book, and why did you decided to make it Kindle only?

Ramit: Well, it’s really hard to write a book.

Steve: Okay.

Ramit: I mean, that’s the truth. You know my publisher, they had a very, they had a very good experience with the ‘I will Teach You To Be Rich’ book, and we were very fortunate because our community really rallied and made that book an instant New York Times best seller and all that. So of course they want me to write more, and I love the idea of taking my very best concepts and advice and putting it into something that stands the test of time.

You’ll hear me say this a lot “Stands the test of time,” because I think that there are so many people and so much emphasis on creating the cool new Instagram video of the day, or the Facebook post is going to get a lot of likes. And I think that’s great, there is a time and a place for that, but 20 years from now I want my material to stand the test of time, or 50 years from now.

I find some of the most valuable insights are in books written decades ago, and that is something I aspire to, and that’s what we design for. So I didn’t want to write another book just for the sake of it, I wanted to wait until I had something really valuable to say. As for why we did it with Kindle, Kindle only, we started there because we wanted to create something that was easy for people to consume, and we also wanted to — we are focused on experimentation, so we want to try different things and see how they work.

You will notice if you really track our business closely that at any given time we are running many, many experiments. And I just think that living an experimental life is a really interesting way to live. It actually means you have to be pretty humble, because you might be good at what you do, but you realize that maybe 50% of what you believe is wrong. So you know I believe that eating this makes me overweight, or I believe that this price is the right price. Well, let’s figure it out, let’s test it and we discover very, very, very frequently that the things we were convinced of might actually not be true.

Steve: So this book is an experiment in a way then.

Ramit: Everything is an experiment.

Steve: Okay, and what is your goal for your book, for this latest book as opposed to the last one?

Ramit: Well, the last book was a technical book. Here is the deal. Many of the things that I do in life are because I’m super frustrated at something. So I started my blog because I’m sick of people not coming to my free class at Stanford. All right I’m going to start this blog, and then still the funny thing is nobody still actually came to my blog for like six months, but I kept at it, and finally people started to come.

With the I Will Teach You book, people were emailing me asking these random questions, what bank account should I use or should I do a Roth IRA or a 401K? All these weird questions, and they are good questions, but after you hear them 100 times a day for four, five years, you start to say, wait a minute, I want to give them something I can hand to them and say, here are the answers to all your questions, and even questions you didn’t even know you should ask.

So that was the IWT book. People got it and if you follow anybody who’s used that book, a lot of them since the book came out in ’09, many of them have generated over six figures, over $100,000 sitting in their bank account and investments, just following the basics in the book.

This book, what I wanted to do was to show people like, yes, we have very advanced courses. Some of our courses are $2,000, or $10,000, okay, and when you are ready you can join us. But for a lot of people it’s not just the information that’s stopping them from creating a business, it’s first of all meeting people like them and seeing that other people have the same concerns or fears. Like do I have an idea? Do I have time?

And kind of really showing them in an approachable way, hey lot of other people had the same challenges you do, so let me show you how they solved it. You may not need to use their exact techniques, but I find comfort in knowing what other people did to solve a similar problem.

I also wanted to tell some of the stories that we’ve learned. You know we’ve been battle tested, and we have created over 20 products, we’ve done dozens and dozens of launches. We know a lot about what works and what doesn’t. And I consider it a service and an honor to be able to put something in the market place that we definitively know is true and it works because we’ve been doing it for years and years and years.

As opposed to you know, somebody comes up with this thing about, oh, let me teach you how to do Facebook ads, you know, they’ve been doing it for four weeks, maybe they made a couple of thousand of bucks, and now they want to create a course. I’d rather wait, I’d rather wait, and do it right than arbitrarily do it quickly.

Steve: So for all you guys listening out there, you know one thing that I like about Ramit is that he’s blunt. He doesn’t BS and plus he’s Asian, so I can totally relate to all the stories. But today what I was hoping to do actually Ramit is to kind of actually walk through the steps of building a business, some of the concepts that you talk about in your book, kind of from your perspective and from some of the experiences of the students in your class.

And one of the most common question that I get asked since our audiences do overlap is how to find that profitable business idea. So what is your take and how do you actually help your students to decide what to pursue in the first place?

Ramit: This is one of the most common questions people have. What should my business idea be? And let me first start off by saying that I can give you an amazing business idea right now, in fact I’m going to give you a perfect business idea right now that has generated millions of dollars, here it is. Teach people about personal finance.

Steve: Okay.

Ramit: Or teach people how to find their dream job, or teach people how to start a business or improve their social skills. Okay, I just gave you four ideas that have generated millions and millions of dollars. Now here is my question to you, do you know what to do with it? Of course not, because so many of us are using this idea that, oh I don’t have the perfect business idea. If only the perfect business idea fell down from the sky, then I would magically open my mouth, angels would rush out, and I would know exactly what to do.

That’s not how it works. Okay ad one of the things — I’m glad you said that I try to be blunt because I think that more of us actually want someone to be blunt and honest with us instead of feeding us this typical BS. Find you passion, oh, passion solves all problems. No, it’s not true, your passion is great, but you know what makes me passionate? When I get really good at something, and when I help other people.

So I will be more than happy to talk about how we find a business idea. But I just want to start by telling everybody listening, I can give you the perfect business idea, in fact I just gave you four, but it’s not just the idea, it’s the process of finding it, and it’s then knowing what to do with that idea.

Ideas are a diamond dessert and I have a million ideas so does everybody. You do it right now, I’ll show you how find it, they are in your own head, but that’s just the first step. And when you can really understand it’s not just about the idea, it’s about actually executing on it, that’s when you have a real business.

Steve: So let’s talk about the process and the initial execution to know whether that business first has legs or not.

Ramit: Okay, all right. First off let’s start with the concept that it’s not magic, it’s math and Steve, are you good in math?

Steve: I’m all right. I’m Asian.

Ramit: Okay, I’m not good which is-

Steve: You are not, really?

Ramit: No, I know, it’s very surprising.

Steve: Oh I’m going to have to revoke your membership card then, I didn’t realize.

Ramit: I know, it’s really bad. As and Indian guy, I’m not good in math and I don’t like mangoes, so we got a real problem here. The only math I’m good at is conversion rates though. I memorize every conversion rate of almost every campaign we’ve ever done, really weird. But anyway okay, you don’t need to know any advanced math for this. I’m just going to give you some real basic math.

What I love about this concept of ‘it’s not magic, it’s math’ is that you know, we might look at somebody like Elon Musk or Bill Gates and say like, “Oh my God! They have something I don’t have.” And it’s true, right? They have a lot of skills and experience and resources that you and I don’t have, but at a very simple core level business is just very simple math.

So I want to show you what a million dollars in revenue looks like, and I bring up a million dollars because that’s a good amount of revenue, and to the outsider it seems like pure magic to be able to generate a million dollars. But I’m going to give you about five examples of how you can make a million dollars, okay? Write this down, it’s not magic, it’s math. So to create a million dollars you could sell a $50 product and sell 20,000 of them. You could sell $100 product and sell 10,000 of them. You could price your product at $200 and sell 5,000, a $500 product you could sell 2,000 of those, or you could sell $1,000 product a 1,000 times.

So to me this actually starts to be really interesting, because it’s approachable. I realize that if I can sell a $50 product five times, hey that’s pretty interesting. Maybe I can scale that up to ten and if I can do ten in a month I can probably do 20, and then maybe I could add on $100 product. So and it’s totally up to you, some people prefer the $5 products, some people prefer the $10,000 products.

Now there is pro and cons. I have created products at all those points, so I could tell you about each. The point is suddenly it’s not just a million dollars in the cloud; it’s actually something that is pretty approachable. $50 product and if you can start to sell five a month which is not that much, then you can scale up from there. So that’s the first concept, it’s not magic, it’s math, right?

Steve: Okay.

Ramit: Should I go to anything on that or should I keep…

Steve: So here is the thing, like most people have problems, at least when people email me they are like, everything is already saturated out there, so-

Ramit: So what does that mean? We can’t do it? We better give up and go home and cry?

Steve: Basically, basically they say there is too much competition out there, how am I going to stand out, right?

Ramit: Oh life is so difficult, oh there is so many people who have brown hair, I better not have brown hair. Oh, there is so many people who drink Starbucks coffee, I better not buy Starbucks, what do you want me to give you, a hug? Hey, let me tell you a different way to look at it. When I started writing about personal finance, do you understand how many people wrote about personal finance, tens of thousands.

There are entire bookshelves in book stores with personal finance books on. So what did I do? Did I sit and cry? No, first of all I got really good at knowing about personal finance. So I knew all the basics, I had read all the books. And I actually build my own system to manage my own money, and I started helping friends very casually with theirs.

As I got further and further along, I started to realize there are certain things I disagree with and certain things I really agree with. This is why I’m one of the only people who talks about — forget about the latte thing, it’s irrelevant, and start talking about earning more. That came out of my discussions and my beliefs and my history, and I have a lot of other things that I was different and I have lot of other things that I’m similar on like low cost index investing.

Well over time I started to develop what I was the same at and what I was different at, just like you know how any of us go through life. Same if you are a fitness instructor, you know there is — every fitness instructor under the sun is telling you basic things, cut you calories, move around more et cetera.

But there is different gradations with inside of fitness. There is the good guy, there is women only, there is nerd fitness, there is a whole bunch of stuff. So what I would say is there is lots of ways to stand out, one is who is your audience? My audience that I was talking to was typically younger people. So when I use examples like flying out to Vegas or buying a round of drinks, that’s appealing to younger audience, not a 72 year old guy planning his estate taxes.

Okay, the next was in the language I used. If I’m running for men versus women, it’s often going to be very different for money, definitely for fitness okay; we are using different words in a fitness world for men versus women or young versus older. Then…

Steve: How do you figure out which audience you should be targeting? Like so, let’s take one of your examples, like fitness for example, how do you decide which audience that you should be targeting based on your skill set?

Ramit: Okay, so first of all if you have been helping anyone you can simply look at the people that you have ended up helping and see if there any patterns. You might often discover about yourself that you prefer to work with men or women, or just happens that you relate more or they relate more to you, so I would start there.

The second is to ask yourself, who do I understand more, and the third and this is really important, which audience is willing to pay? We call this the pay certainty technique. You want to be certain that they will pay, and here is how it goes. All you have to do is ask two questions. Do they have the ability and willingness to pay? Ability and willingness.

Let me give you an example. Steve, let’s say you are a stylist, you are just amazing, you dress really well okay, and everybody always compliments you on how you dress, and it’s something you just enjoy, you read style magazines all the time. So let’s pick three different example audiences and let’s see how we would apply this to narrow them down, okay.

So audience one is 20 year old college kids, audience two is 75 year old retirees and audience three is 40 year old senior executives, okay. So let’s use this pay certainty techniques, do they have the ability and willingness to pay? 20 year olds, do they have the ability to pay? No, they have no money. Do they have the willingness to pay? What do they care? They wear hoodies every day, okay eliminated. Now let’s go to the retirees. Do they have the ability to pay? Sure, they saved some money. Do they have the willingness? No, they are wearing a golf shirt every day.

Okay, oh I’m so mad Remit, you are stereotyping. I really don’t care about offending and stereotyping because at this stage it’s okay to come up with some guestimates. You are going to test those assumptions later. So I might — you know if I said, hey, I actually don’t think they are all wearing golf shirts, and I’m going to write that down and go talk to ten of them. I can quickly find out if they actually have the ability and willingness, okay?

Now to the third category, senior executives, do they have the ability to pay? Yes they have money. Do they have the willingness to pay? What do you think Steve?

Steve: I just want to take a moment to tell you about a free resource that I offer on my website that you may not be aware of. If you’re interested in starting your own online store, I put together a comprehensive six day mini course on how to get started in ecommerce that you should all check out. It contains both video and text based tutorials that go over the entire process of finding products to sell all the way to getting your first sales online.

Now this course is free and can be obtained at mywifequitherjob.com/free. Just sign up right there on the front page via email, and I’ll send you the course right away. Once again that’s mywifequitherjob.com/free, now back to the show.

So the answer is yes, but what questions would you ask these people to determine whether they would be willing to pay, because often times you’ll ask someone if they are willing to pay something, but then when it comes to time to collect the money, they don’t actually want to pay.

Ramit: Yeah, that’s because people ask the wrong questions.

Steve: Okay.

Ramit: If you’d ask, “Hey, do you want to buy my weird eBook?” What are they going to say? They are going to say, “Yeah, yeah, just send me an email when it’s out so that I can send it straight to my spam folder.” Nobody wants your eBook, nobody wants your course, what they want is the outcome of what you can deliver.

So my book is not called six weeks on financial literacy so that you can optimize your compound interest returns, it’s called I will teach you to be rich and I will. Similarly when you speak to someone, here is the number one question you want to ask is, you want to find out if they have actually tried to solve this problem in the past, that is the best determinant of whether they will try to solve it in the future, and when I say solve it I mean paid to solve it.

Steve: Okay.

Ramit: So for example, I would ask somebody, you know I might say, hey, tell me what’s going on, like walk me through your day, I’d love to understand your day. And I start of really broad. So they are like, well I wake up at eight and I drink coffee and I go to work and then I come home and watch Netflix. Awesome, I love it. Okay, fairly typical day, that sounds good, talk to me what happens after work. Okay again let’s say in this case I’m a fitness instructor.

Well, I come home and I really, I try to work out about three times a week, and then you know, I come home da da. Oh, that’s cool, so like did you work out yesterday? Well, no, I’ve been really busy. What about the day before? No, it was raining. Okay, so on average a week, what would you say you work out? Two, I really should do four, but I really do two. So talk to me about that.

Okay, right here so far I have, it’s not intrusive, I’m not asking them to buy an eBook. In fact in your research phase you cannot sell anything to them. You are not there to sell; you are just there to do research. What I really want to know is I want to hone in on that area where they say one thing and they do another. I really should keep a budget, I don’t keep a budget. I really should work out, I don’t work out. I should eat less, I should dress better, I should start a business, and then I want to ask them why.

Now after I ask them why and they are going to give me some reason, I want to dig in, I want say have you tried to solve that in the past? Most people you talk to have not tried to solve it, you know why? Because they are not really serious. Oh, I should start a business, okay so have you tried? No, I’ll do that another day. Okay bye, I appreciate the time. That person is not serious. The best answer to that would be yes, yes I actually joined, I bought this book, I tried it, I like this part, that part didn’t work. Then I joined this course but that didn’t work either.

Now I’m leaning in, tell me more. What would it look like if you waved a magic wand, what would happen, and I want to understand. This has nothing to do with price. Price is determined, way, way, way later and it’s not determined by your users, okay, and it doesn’t even have to do with how long your eBook is or how many videos are in your course. It’s all about their problems; this is pure research at the beginning.

Steve: Okay, and so let’s extend that fitness example. So do you ask them why he works out in the first place or?

Ramit: Absolutely, guess what? So this is where you start to – so let’s say you don’t know if you are better serving women or men. So if you ask, tell me a little bit more about why do you want to work out, what does it mean to you? And you are going to get radically different answers from men and women. Men in their 20s are going to answer differently than men in their 40s. Steve, what’s the difference between what a 25 year old guy would say versus 45 year old guy?

Steve: For me I work out so I don’t get injured.

Ramit: Love it, that’s a great answer. You think that a 25 year old is going to say that?

Steve: Yeah, he wants to pick up girls.

Ramit: Bingo. So again we are stereo typing and we’re generalizing, of course there are exceptions, and of course there is nuance to that. But at a high level if I were to create, get ripped six pack abs for 50 year old men, that’s likely to fail, whereas if I created a more vanity focused or aesthetic focused approach for 20 something men, that’s likely to succeed, and in fact that is exactly what you see in the marketplace.

So you don’t actually need to worry about your competition, your competition if anything is telling you there is a big market here and a lot of buyers, that’s a good beacon. The good news is that your competition generally doesn’t know anything about business. They are usually not that savvy about marketing, they’ve never really studied this like the courses we teach, Zero to Launch and on and on. And if you actually do the research and ask the right questions and build a product for a hungry market, you can very often surpass your competition.

Steve: So let’s extend that example a little bit further. So let’s say I have decided that I want to pursue fitness for 40 year olds. How do I stand out among the crowd? There is like thousands of thousands of personal trainers out there, thousands of programs, fitness programs. How do you stand out?

Ramit: Okay, again when you say 40 year olds, let’s get even more specific.

Steve: Okay.

Ramit: 40 year old men or women?

Steve: Let’s do men.

Ramit: Okay, what are some different types of goals that 40 year old men might have?

Steve: Let’s see, not being able to plays sports better, recovery time, not getting injured, those are my goals and just general strength.

Ramit: Aha, so guess which one of those stands out the most to me?

Steve: Strength.

Ramit: Yeah, you know why?

Steve: Why?

Ramit: Because in general people particularly in America don’t pay for prevention. Now this is a little subtle nuance that you will learn over time as a business creator for everybody listening, but you kind of just think about it. Like do people pay for melt the fat around your stomach? Yes that sounds very appealing, or do they pay for live healthy life by avoiding these bad things and having a moderate lifestyle? No, they don’t care about that, not in this country.

So when I hear you say strength, that instantly makes my ears perk up, and I say to myself, wow! Okay, so we have a 40 year old man who wants to improve his strength. So if I were going to position myself and go out there, the first thing I would go is I’ll go find ten to 20 40 year old men and I would talk to them. I’d say, tell me about your fitness goals, tell me about how you wake up in the morning, et cetera et cetera. And if they said I’m really interested in this, I would say, why? And they are going to tell me the why.

So one, I’m going to know how to position myself differently. They might want strength so they can be a good role model to their grandchildren or their children, okay? That’s one example. Two, they might actually want to be as strong as they were in their 30s, okay. This is a common thing you will see in the beauty market, the old idea of you know, youth and beauty and regaining that, that’s another position.

You want to talk to them and you want to say which of these is most appealing to you, tell me about what would it look like if you had a magic wand, and they are going to tell you in their own words. Suddenly all the other people who are out there, fitness instructors who are just doing six pack abs and these you know 25 year old guys, they are not appealing to those 40 year olds anymore, you are speaking to them.

To give you one great example of this, I used to be a really skinny guy, I was 127 pounds. There is not a lot of stuff out there for guys like me especially back in the day. There is amazing program called bonny to beastly. Think about that name, bony to beastly. That is an amazing position in the marketplace for skinny guys who want to get bigger. So there are so many ways you can position yourself, but you want to identify your market and find out if they have a real pain they’ll pay for.

Steve: So to summarize what you just said, in order to stand out you have to get super specific and focus on a small segment of the market?

Ramit: That’s right.

Steve: Okay.

Ramit: And I can demonstrate that with I will teach by the way. Personal finance it’s very similar, so you know you can look at the core market from the outside and just be like, oh my God, there is some much competition. But when you get into it, you realize okay, most of the personal finance material out there is written for older people. Why? Because nobody really cares about their money until they are really 40. That’s just weird, but it is what it is.

Two, it’s generally written with a slight masculine slant. That’s not as true anymore, but it used to be. And three and this is huge, almost every piece of financial advice out there is focused on frugality. Cut back on this, cut back on that you know, don’t buy any groceries, and reuse your toilet paper. I say I’d rather be dead than reuse my toilet paper or take out the oven light. Okay, these are real suggestions, I’m not kidding you.

So I said all right, I’m targeting young people. My friends were generally, they had good jobs, they were fairly affluent, they wanted to go out, they wanted to have a good time. They didn’t want to cut back on everything, but they also wanted their money to go where it needed to go. And my background was in psychology, so I didn’t know this from day one, but I started to figure it out. I would write just the way I talk.

So I was writing casually, I was using casual examples like the tipping friend. I was talking about not just cutting back, but earning more. That was unusual. And then I was also taking the conventional advice and showing why some of it did not work. So people enjoy that pointed view. If you can say, hey, everybody is talking about this for abs or back development or whatever, and you are saying here is how it actually works, that can be very powerful.

Steve: Let me ask you this question since we are on that topic. You mentioned that you wrote in a certain tone, you were very blunt. And one of the questions I often get asked is, if I’m starting my own business, do I have to be — does my personality have to be in it? Meaning do I have to show my face when I sell a product?

Ramit: Absolutely not, and in fact the little known secret of a lot of online businesses is that there are certain people out there using pen names just like they were novelists.

Steve: Okay.

Ramit: So you absolutely do not have to show your name if you do not want to, and you can use a pen name if you like. What I find with my students, the students who join Zero to Launch, a small percentage of them have this concern. Typically it’s for professional reasons, they might not want their co-workers to know they are talking about X or Y topic. What they typically find out is after they do this for a year or two, they realize they actually don’t mind anymore, and that they are happy to share their name and their face, and it actually makes a decent impact to the business.

Steve: Okay.

Ramit: We saw this in the personal finance world by the way. You know this Steve, like a lot of people in their early days had pen names, and then eventually they came out and shared their names and it was perfectly fine. So if you don’t want to share you don’t have, but ultimately it’s really not that big of a deal is what most of my students find out.

Steve: Okay, so let’s say okay, so we have come up with the idea at this point and we’ve got really specific about the target customers, how do I get my first paying customers?

Ramit: Okay, so at this stage you have come up with a few ideas, you’ve picked one and you’ve decided to kind of spend some time on it. So you’ve gone through, you’ve talked to 15 or 20 people. How do you talk to them? Well, I always say if can’t find them during research, how are you going to find them during sales?

So if you are going after pair up with somebody you want to learn a violin or people who want to get into college or whatever, whatever the topic is. You better be able to find those people and it’s actually not that hard these days. There is Reddit, there is forums, you can set up emails. And the truth is most people will actually talk to you and they’ll talk about openly. They’ll talk about their problems if they believe you are willing to listen not you are trying to shove something down their throat, okay?

So like I will have conversations routinely with people who talk about relationship problems, they will talk about fitness stuff, they will talk about very emotional stuff. I would strongly encourage you to talk to at least 20 people. When I say talk to, email is okay, phone conversations are the best. One phone call conversation is worth a hundred or even a thousand survey responses.

So after 20, you start to say like, oh wow! This is really — people are interested. In fact if you are really good at your research, by the end you’ll have people saying things like please if you create something like this please take my money. In fact I’ll be willing to sing up right now knowing that it’s not even ready. People actually say that.

And if that is the case at the end your call, you can say, hey, I’m planning to think a little bit more about this. I might create something you or not, can I add you to a tiny list, and I’ll email you when I’m ready? This is a very simple way of getting your first five to ten buyers. And so if you’ve done your research right and you’ve found people who are interested, they will easily buy your first products. Exactly what I did with my first products.

If on the other hand, this is very common, you don’t really listen to your market. You think that when they say, oh yeah I may be out to buy that, that that’s a yes, and then you kind of create this product fast to just make money, then the minute you go to sell it people are not going to pay. And that is in my opinion a huge tragedy, because your time is limited and you should spend it building something that can actually help people that they want to pay for.

Steve: So to figure out exactly whether they are truly going to pay for your product, would you recommend taking a small amount of money upfront?

Ramit: You can do that. You absolutely can. I don’t think that’s the only way, but if people are serious, you can absolutely say hey, you know I’ll be willing to put you in the top five or first in line, and I’ll take a deposit. It’s totally refundable, you know, 10% or 50%, honestly all that matters is they pay you $1.

Steve: Okay.

Ramit: The difference between zero and $1 is massive, massive. So many people for example don’t understand that if you have 100 people on your email list maybe 0.5 of them will buy particularly as you scale up. So don’t be angry if you talked to 20 people and 19 of them don’t buy, that’s okay, maybe they’ll buy later maybe not. But the law of internet numbers says you are going to have a bigger denominator than the number of buyers.

Steve: Where are some of your go to places to do your research?

Ramit: I love Reddit although you have to take it with a grain of salt, because people there are cheap, angry, bitter, and young. But aside from all that it’s great. No, there is a lot of great insights there. Like I love reading about you know if you’ve tried to lose weight but you’ve failed why. I love reading about relationship things, they have money, personal finance, there is some really good stuff, you just need to take it with a grain of salt.

I love Quora; I think it’s really good. I read a lot of forums, so if you are looking into style for example, there is styleform.net, there is a whole bunch of stuff. And then the best of all is I actually love knowing people from very diverse backgrounds in real life.

You will often find that people will say certain things online and certain things in real life, and they often won’t cross over. So the best research incorporates both, because people online will though often be anonymous, they’ll be more honest in certain ways, but they won’t talk about certain things. Only somebody you know who trusts you will open up and share you know often times the real biggest fears and pain points about a certain topic.

Steve: So I guess that implies that it’s much more important to get someone in person, right? Because they will be more — yeah.

Ramit: The better. Yeah and again if this intimidates you, good, it should. It’s not supposed to be easy. This is why you are competition, you don’t need to be worried about them, because how many people do you think actually talked to even five prospects in their market. I’ll give you an example from my book, okay check this out. When I was starting to write the book, I went and I bought like almost every personal finance book that you can read, all right, and I read all of them, took notes on every single one.

And I actually went to Barnes and Noble and I would just be sitting there browsing, and I’d see people browsing next to me. Okay, here is the fascinating thing, Steve in virtually every single personal financial book, what does chapter one start with?

Steve: I have no idea.

Ramit: It starts with okay; let’s figure out how much you are spending so we can start a budget. How do you think the average person feels when they open a book and see that?

Steve: Probably a negative feeling like as if I don’t know how to budget already.

Ramit: Yeah, what else? You are right about the negative feeling, but they don’t know how to budget, they don’t and they know that. So why do they feel negative?

Steve: That they have a problem.

Ramit: Yeah, so the average person picks up a personal finance book, and the first thing they are told is let’s figure out how much you are spending, okay so let me get this straight Mr. or Mrs. Author. You are telling me that number one, I need to do a bunch of work to figure out how much I’m actually spending, because I don’t even know how where my accounts are and the passwords.

And number two, I have this feeling in the back of my head that I’ve been spending way too much for the last ten years, and I don’t even know how much debt I have. No, thanks I think I’m going to put this book back on the shelf and go you know, eat a piece of cheese cake, okay.

Steve: Right.

Ramit: So you would only know that if you had talked to people. You would never see that online. No one would ever even have the knowledge to share that. So instead with our book the first chapter, instead of telling you how bad you are doing, and all the things that are wrong with you and you are a horrible person, it was, hey, you’ve got a credit card; I’ve got a credit card. Let me show you how to beat the credit card companies at their game. And in that first chapter a lot of our readers you know, they beat a $22 late fee; those students are students for life.

So when you are thinking about doing your research, you are going to discover these things only talking to them in person and on the phone. Don’t be an internet nerd and be you know, so afraid of talking to people. If you want to start a business and you want to grow it past ten dollars, past $100,000 into the seven or even eight figures, then you are going to have to get comfortable with being uncomfortable, and that means talking to people.

The first four, five times, maybe they are not going to go that well, but that’s okay. You can just tell them openly, here is a script you can use. Just say look, I’d love to ask you a few questions about fitness. The reason why I’m asking is I’m thinking maybe of creating something, I’m not sure, maybe I will, maybe not, but I just love to talk to you and see how you think about fitness. And if it turns out into something that would be awesome, but if not I appreciate the time. Super candid, supper causal, not weird at all, and that is how you are going to get people to talk you.

Steve: How important is it to have to your own platform?

Ramit: It’s very important.

Steve: Okay.

Ramit: We see so many courses that have come telling people you know all these tricks to do on Facebook and Instagram et cetera. And those are cool, if you want to that great, but every channel we see inevitably the channel creators like Facebook et cetera will constrict and restrict your ability to reach your own people. The best platform you can have is your own, one that you control, and typically that’s an email list.

Steve: So I guess where I was going with that question was, is it a chicken and egg problem? Like should you work on getting a platform and followers first or should you just go ahead, jump into it, and just do what you are suggesting. Talk to a handful of people and just try to sell something before you have a platform?

Ramit: Well, you don’t need to wait to create a platform. Okay, one thing that really annoys me that I see, is people creating all these unnecessary steps before they watch their business. Oh, I spoke to somebody yesterday, oh, I need to create a website, I need to learn how to learn how to do copy writing, and I’m like, no you don’t. You need to go find three clients. You can find that on Craigslist, okay.

So can you talk to 20 people without having a website and opt-in follow? Of course these people want to be talked to. They want to be listened to. So you can go find 20 people. If I were somebody listening to this, I’d be sending out ten emails a day minimum. Okay, minimum ten emails a day, more like 15 emails a day to 20, and I’d be scheduling those calls. You can do 20 calls in one to two weeks, it’s no that hard.

Steve: Okay.

Ramit: But ultimately to scale, then you are going to want to have — you are going to want to create some content and give people a reason to come to your platform. And that’s how you are going to build a more sustainable business.

Steve: Right, so the order that you would advise to proceed is to get those three customers, validate that you have an idea, then work on the platform when you want to scale.

Ramit: Yes you can – that is absolutely the fastest way to go.

Steve: Okay, okay. A couple of questions that I also get asked are from people who have very little money to invest in a business, and what would you suggest for these people?

Ramit: Why don’t you get a better job?

Steve: Okay.

Ramit: I find it a little bit puzzling, I get emails from people who are like Ramit, I have 30 days left of money for my rent. I have no groceries, my fridge electricity just turned out, so I’ve got about eight hours of food left, can you help me start a million dollar business? Like no, go work. Get a job, get a good job, stop thinking about this passive income.

That’s why I started off this whole call Steve talking about money is a small but an important part of a rich life. Starting a business is challenging, it’s not what everybody tells you, oh a million dollars overnight, it’s BS, people are lying to you. I’m here to tell you the truth, this is hard, talking to people is uncomfortable. You don’t know how to do it the first time. That’s okay you could do it, but it takes time.

If you have very little money, then my question to you is why not first focus on getting a solid job, get stable, put a month of savings in the bank. I’m not saying that to be condescending at all. I actually think it’s the most respectful thing I can tell you because it’s honest. If you are down to a few weeks or a month worth of savings, and the clock is ticking, there is no way you are going to make patient long term decisions. No, no, no, instead you are going to make impulsive quick decisions to try to make a quick buck. And now you have joined everyone else out there on the internet who’s trying to make a quick buck.

You talk about competition that is the competition you do not want to be in. One of the ways that we separated our self is by not having to make quick buck decisions. Steve, do you know one decision we made that cost us millions of dollars a year?

Steve: Let’s see, you probably worked, you probably released a course, and then you cancelled it.

Ramit: We’ve done that, we’ve done that many times and those I hope to never repeat, but they somehow always seem to come up every so often. One thing we do is we don’t allow anyone with credit card debt to join our flagship courses, and that’s nobody else in the market place does that because most of them would go out of business.

We do it for two reasons, one; if you don’t have money, if you have credit card debt, you should use our free material which is 98% of the stuff on our site is free, and you should pay off your debt, okay. That’s what you would do, that’s what I would do. And the second thing we tell people is if we found out they joined with credit card debt, not only will we refund their money in that refund period, we will ban them for life. And so we actually turn down millions of dollars in revenue. That’s a way to stand out from your competition is who you serve.

So I think that it is a bit disingenuous when people ask you know, I’m running out of money, I don’t have a lot, how do I start a business quick? These people are always the worst customers. They don’t have the fortitude or the patience. And again not to be condescending but to be respectful I would strongly encourage them, focus on your career, get a job, it’s much easier to get a solid job than to start a profitable and growing business.

Steve: So Remit, we’ve already been chatting for 50 minutes, I want to be respectful of your time. It seems like you actually cover the entire garment, right? You teach people to hag at their job, the dream job in the beginning, and then transition gradually to earning their first thousand bucks, and then launching a potentially million dollar product. So where can people find you. Can you tell us a little bit about what you have to offer?

Ramit: Yes, you can find all of our materials at iwillteachyoutoberich.com okay, and everything there is going to guide you to the right place. You should join our email list. You will really enjoy the emails; they are different than anything else you will see out there, I think you will really love them.

And we have a new eBook on Amazon called Your Move: The Underdogs Guide to Growing Your Business. I think you are really going to enjoy it. We priced it low; we want everybody to get it. It’s on Kindle or any Android, any device. It’s going to be a quick read, and a really new way of looking at starting and growing your own business.

Steve: Plus it’s three bucks, that’s like a no brainer.

Ramit: Thank you for saying that.

Steve: And the other thing is, join his list because the way it’s written is actually the way he’s been on the podcast today. He doesn’t hold back, he doesn’t sugar coat anything and he’s actually hilarious, especially if you are Asian, because you will actually get a lot of the Asian jokes.

Ramit: Steve, are you basically telling all non-Asian people not to join my list? Come on, non-Asians you are welcome too, everybody is welcome.

Steve: Okay, yeah, fine, fine you will like this if you are not Asian as well, but-

Ramit: I’m very inclusive on this list of 800,000 people, so please join in. I’d love to share. It’s not just about money, it not just about business. A lot of fun stuff about relationships and just a different way to look at life. I think in the first week you will be compelled by something you learn there.

Steve: Yeah, and I’ll link up all this stuff in the show notes, so you guys don’t even have to memorize all this stuff. All right Ramit, take care, really happy that you came on.

Ramit: It’s been a pleasure, thanks for inviting me.

Steve: All right man, take care.

Hope you enjoyed that episode. Ramit is someone who I’ve looked up to for many years now, and I highly recommend that you check out his latest book. I’ll have a link to the book in the show notes, it’s only 2.99, and it’s basically a no brainer to pick up. For more information about this episode, go to my wifequitherjob.com/episode172.

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.

Now I talk about how I use all 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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171: How To Run Profitable Amazon Marketing Services(AMS) Ads With Brian Johnson

171: How To Run Profitable Amazon Marketing Services(AMS) Ads With Brian Johnson

Today I’m thrilled to have Brian Johnson on the show. Brian is the founder of PPC Scope, a PPC measurement and optimization tool for Amazon Sellers.

In addition, he runs a course called Sponsored Products Academy which teaches Amazon sellers the ins and outs of Amazon PPC ads.

He was also one of the speakers at my conference as well. Brian is an expert on Amazon PPC and today we are going to delve deeply into how to optimize your campaigns.

What You’ll Learn

  • Brian’s process for launching an Amazon product.
  • Outdated strategies that should be avoided today.
  • What is AMS and how do you get access?
  • What AMS ads allow you to do.
  • How to structure AMS ads and how they are different

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

Ignite.Sellerlabs.com – If you are selling on Amazon and running Amazon Sponsored Ads campaigns, then Ignite from Seller Labs is a must have tool. Click here and get a FREE 30 Day Trial.
Ignite Logo

ReferralCandy.com – If you’re already getting steady orders every month, adding a refer-a-friend program to your store can give you a new sales channel. And ReferralCandy is the best in the business. Click here and get a FREE $50 credit towards your account.
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Transcript

Steve: You are 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 with their businesses.

Now today I’m thrilled to have Brian Johnson on the show, and we’re going to talk about strategies on how to improve your Amazon sponsored ad campaigns. This is a great episode, and I know you’ll learn a lot.

But before we begin I want to give a quick shout out to Klaviyo who is a sponsor of the show. Now I’m always excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I depend on Klaviyo for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not another provider. Well, Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here’s why it’s so powerful.

Klaviyo can track every single customer who has shopped in your store and exactly what they bought which allows you to do many things. 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 autoresponder 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 I also want to give a shout out to my other sponsor Seller Labs, and specifically I want to talk about their brand new tool Ignite which helps sellers manage their Amazon sponsored ads. Right now I’m using this tool to manage my Amazon sponsored ad campaigns, and it makes things a heck of a lot more convenient.

So number one, I’ve always found it a major pain to generate my PPC reports on Amazon, cut and paste the data over to an excel spreadsheet and use pivot tables before I’m able do any analysis. Well Ignite pulls all that info for you automatically and allows you to easily see what keywords are working and what are not immediately, there is no need to manually create reports or play with excel.

And second of all unless you’re a data geek, Amazon campaign data can be kind of hard to understand, and what is cool is that Ignite makes keyword and bidding recommendations on the fly that can be applied with a couple of clicks.

So let’s say one of my keywords is bleeding money, well Ignite will alert me of that fact, and I can reduce that bid immediately. So bottom line Ignite makes managing your Amazon sponsored ads so much easier, and the fact that they provide me with alerts means that I no longer have to monitor my campaigns like a hawk.

If there are keywords that are doing well, Ignite tells me to add them to my exact match campaigns. If my keywords are losing money, well Ignite tells me to either remove the keyword or to reduce the bid. So head on over to Sellerlabs.com/steve where you’ll find awesome tutorials on how to run Amazon PPC ads and the opportunity to try Ignite for 30 days for free. So once again that’s Sellerlabs.com/steve. Now on the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast. Today I’m thrilled to have Brian Johnson on the show. Now Brian is the founder of PPC Scope, a PPC measurement and optimization tool for Amazon sellers. In addition he runs a course called Sponsored Products Academy, which teaches Amazon sellers the ins and outs of Amazon PPC ads.

He’s actually also going to be one of the speakers at my conference in Fort Lauderdale Florida in about four weeks, and he’s an expert on Amazon PPC, and today we’re going to delve deeply into how to optimize your campaigns. And with that welcome to the show Brian, how are you doing today man?

Brian: I’m doing fantastic, thanks for having me here.

Steve: Yeah, so Brian, what is your background with selling online, how did you kind of get into physical products, and how did that kind of gravitate your career towards teaching PPC?

Brian: Absolutely, so I actually started out on the eBay platform many years ago. I was in – I was selling physical products. I was actually selling like banking equipment, coin sorters, money counters, that type of thing to governments, to the FBI, to movie CDOs all over the place.

It was kind of fascinating but it was a lot of work, because my margins were like 15% because of the way that I was doing it, primarily drop shipping through eBay. But I did that for about seven years.

Steve: Wow.

Brian: And at some point I started switching over, and I actually got pulled in during – was it Amazing Seller machine two, or ASM 2 by a friend of mine who was going through and sign on Amazon. And so that was probably what, three years ago now, and time flies. And so I jumped over and started selling on Amazon and realized, okay knowing – because I had tried Amazon before and I just didn’t know all those steps, I didn’t know how to game the system if you will.

I had to ask for reviews out, you know what the weaknesses were. I made a lot of assumptions as far as the similarities between Amazon and eBay, and I found out that eBay does a lot more work for the seller than Amazon does, at least originally did. And so I did and once I started selling and started sourcing for products on Amazon, I realized, okay I get much better margins, and I’ve got a whole new environment I can play in, let me switch over to AMS — to Amazon, excuse me. And I left eBay behind.

Steve: Did you start by drop shipping on Amazon at first like similar to eBay or no?

Brian: I was yes, so similar to eBay I started out with the products that I already knew, and one of the things I found was it was a different animal, because I was typically dealing with higher price point products, those that were $1500, $4,000, that type of thing.

Steve: Okay.

Brian: And I found on both platforms that fraud was still an issue. The same kind of fraud issues that I would have on eBay, the same kind of problems on Amazon.

Steve: Sure.

Brian: It just wasn’t converting as well, because you couldn’t get all the reviews and the social proof, and so you just couldn’t get the conversion. So I immediately realized that, okay I need to kind of conform to what the popular teaching is right now, and that is the whole small item, with no moving parts, and something that you’d easily source and re-label and that’s how I started out.

I actually started out in – what was it, in kitchen. I think my first product was a Julian vegetable peeler which I still use like a demo or a training product today.

Steve: Okay, so you’re basically not passionate about per se about the price that you sell, and are they like all over the place, or are they all within…

Brian: Yeah, I think like most people is that they are opportunity buys. They are primarily ones that – initially I started looking at ones like a lot of people do, you look at the ones that are, like hey this would be cool to sell and everything. I realized you know what, there is a lot less competition, there’s a lot more money in the stuff that is absolutely unsexy. Kind of my jokes example of that is yoga mats.

Steve: All right.

Brian: Very probable, you could sell them all day long, but you don’t want to tell anybody.

Steve: That goes along the same line as handkerchiefs. For the longest time I didn’t want to tell anyone that because it’s a feminine product, but anyways.

Brian: Sure.

Steve: So how did that evolve to PPC?

Brian: So I started selling and I had friends of mine who were also their own business owners, they weren’t on necessarily on Amazon, but they were friends of people who were trying to sell on Amazon and were struggling. So they said, hey can you start helping them, can you give them some advice? And I had learned just enough to be dangerous, and so I started helping them.

Quickly that took over, so I was actually consulting and managing their entire account of over 800 products selling on Amazon.

Steve: Oh wow, okay.

Brian: What evolved from that, I started adding like second, third, fourth company or different company while I was consulting. Suddenly I was consulting for brand management, dealing with FBA, dealing with support, dealing with the customers, everything. And one of the things that I kept on struggling with was the advertising. Like there’s got to be a better way that I can do this, and nobody was teaching anything that makes any sense when it comes to the advertising.

So out of survival I learned how to do sponsored products, and I spent way too many hours. It’s something that I usually say on – Tommy [ph] was, don’t do what I did, because I spent way too many hours and way too much money testing all this stuff and I still do to this day.

But two and a half years later of doing, finally I actually just came into only working on sponsored products and AMS. You get a certain amount of expertise when you finally, you do it every single day.

Steve: Yeah absolutely. Did you have any prior like Google AdWords experience for example?

Brian: I did yeah. So I had used Google AdWords, I used other ad platforms before, and so I certainly respect that those are much more powerful, much more flexible platforms than what sponsored product or AMS offers. But at the same time Amazon has got to start somewhere just like Wal-Mart and Jet will eventually start somewhere.

Steve: Sure absolutely. I guess let’s start this interview since you sell your own products, like if you were to launch a brand new Amazon product today, you know incentivized reviews are gone, what would be your process and how would sponsored ads kind of fall into that mix?

Brian: So I generally teach the – in 2017 I’ll tell people that you got to really understand who your target audience is. A lot of times we come in as sellers and we make opportunity buys based off of some analysis we do. It’s not necessarily a product we’re passionate about, nor do we know who the specific sellers are, or rather the [inaudible 00:10:05], I guess that would be true too, the other sellers as well as who the buyers are, and so you’re just kind of jumping in blind.

We can use sponsored products because that’s the only platform that Amazon has given us as feedback as far as what the customers are using, or those shoppers and terminology is, so that we can learn what it is that they are looking for, what they’re searching for, so that we can understand them better and what flavors they’re looking for, how they’re using the language as far as how to find a product and to convert to a product. And we can continue to horn in and target that specific audience that’s working well for this specific product variation.

And so a lot of times if we can first learn who our audience is, we can do a much more effective job with a much better ROI in targeting that audience, both through the product listing content as well as any kind of external promotions we might do in order to boost an initial product launch. And certainly through our advertising, we can put a lot more money into very targeted phrases that have a lot more impact in moving units, in getting profitable with our advertising.

Steve: So walk me through this process of kind of getting to know and understand your target customer.

Brian: Okay so in sponsored products, because sponsored products is the one that gives you that customer search term list.

Steve: Right.

Brian: I’ll set up a series of campaigns starting out with automatic, an automatic discovery campaign, which is basically going through, and just kind of testing the market, allowing Amazon to show the ad to audience relevant. They may not necessarily have product relevant search terms, but they’ll certainly show it to relevant audiences. They may be looking for products similar to the product that we’re selling.

Steve: Okay, how granular do you put these campaigns, let’s say you had ten products and they are kind of despaired items, would you create ten different campaigns at that point?

Brian: No, I’d actually create – I mean so if there are two total or if there are ten different audiences with the expectation that the search term analogy and the keywords are going to be different, those would justify a different campaign, because that’s a different target audience. If they are simply variations, the same product group, they’re all variations targeting the same audience, likely to have the same search terms and keywords, or a high overlap, then I’ll put those into the same target audience campaign.

But then I’ll separate each product into their own ad group or ad group set. So single ad group in an automatic campaign because that’s all you can do because it’s just a broad match. And that’s kind of give me better analytics and optimization control that allows me to really identify, okay this search term performed best for this specific product variation, that kind of segmentation.

It also allows me to do have a very fine grind control of optimization, my negative keyword matching as an example with automatic campaign. I can do that at the product level because a search term that may seem relevant to both may perform very well for one product, may perform very poorly for a different product. I want to be able to drop the one that’s performing poorly for that specific search term, but then I want to amplify where it’s working well for the other product.

And so that kind of segmentation is necessary in order to accomplish that.

Steve: So you start with these automatic campaigns, like how much data do you gather before you start making any decisions?

Brian: I usually within two days. So I typically set up my manual research campaign at the same time. I’m not waiting around for data any more. I used to, just like go through and do really high bid and then switch to a low bid and then wait a couple of weeks. That was all fine ideally, but this year we have to move a lot faster because there is way too much competition to just kind if sit on it for too long.

So with the automatic discovery campaign, essentially what we’re just trying to do is allow Amazon to run with a fairly low bid, sometimes that’s 30 cents, 50 cents, so lower than you would expect for that target audience and for that product line. The manual campaign is a research campaign. This is where we’re going to be testing, we’re going to be researching a ton of related keyword phrases to the product that I’m selling, and I’m going to dump those into what I call the ad group set.

So the same similar structure in that you might have one campaign that covers ten similar product variations, but then I segment further so that each product has three ad groups, one for each match type.

Steve: Okay, right.

Brian: That gives me even more control when it comes to analytics and optimization, because now I can control between each skew, each product range, and between each match type. And there is a lot of confusion as far as match type progression or match type optimization on Amazon compared to AdWords. There is a lot of…

Steve: Yeah there is no money those orders actually, yeah they are different ones.

Brian: Yeah different strategies.

Steve: Okay so for the automated campaigns, so you said you start driving data from that within a couple of days, does that imply that you’re just picking the keywords that you think are going to convert for your product from that automated campaign list, and then creating manual broad match campaigns in the beginning?

Brian: Well so let’s say in the manual campaign it’s going to be in all three match types, phrase by far at a minimum I will do phrase match, but that’s kind of a longer discussion there. But what I’m doing is essentially I’m not waiting around for my automatic campaign to tell me what to do. I’m simply just turning it on to allow Amazon to show my ad to audience relevant as well as competitor search terms.

So they do a pretty good job as far as that goes, but I’m going to go out there and do my own keyword research, be aggressive about and not wait around for an automatic campaign. I’m going to set up my manual campaign with my three ad group structure for each product. I’m going to go out; I’m going to research hundreds if not thousands. I might start out and just create a presence – actually I create a cheat sheet for this whole thing.

But initially well I’ll start out with my initial keyword research. It’s simply just using Amazon’s own internal suggested keywords when you create an ad group for its product variation. That’s the minimum, but that’s only going to give you like 10, 20 keywords maybe. And then I’ll move on to using basic keyword research, so I’ll go and use something like keyword.io or a Samurai tool or Merchant Words.

And I will go out and find several hundred, a couple of a hundred to several hundred keywords that are directly related to the keywords that I think are most likely to be the big, my number one keyword or number one keywords for my product, and I’ll add those into my manual research campaign in each ad group, in each match type. I’m not concerned about duplication of keywords.

That allows me to test all these keywords, it basically gives Amazon – I’m telling Amazon here’s all these options for you to show my ad across multiple match types, across multiple products. And then I’ll take a step further in my keyword research and I’ll go out and I’ll really reverse engineer my competition using more advanced tools such as like say Keyword Inspector for instance, and some of these tools that I can pull in a lot more keywords.

And I’ve got some pretty specialized research methods that I use for the things like Keyword Inspector.

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So your automatic campaigns, you’re not really using them in the beginning, right? You just kind of let them run in the background?
Brian: Yeah pretty much because what I’ll do is I might run it, I may start it out, I’ll kick it off just kind of arbitrary and entirely understand the product, the competitive average cost per click of the product that I am in. If I’m launching a brand new product that I haven’t been before, I might start it out at 75 cents, I might start it out higher just to kind of get an idea, okay what are some of the popular search terms going for from a cost per click stand point.

But ultimately probably within two to four weeks, I’ve already dropped down my automatic campaign to half of that, like maybe 30 cents, may 50 cents, something very lower than what I’m definitely spending in my manual research campaign as an example. And at the same time if the automatic campaign does pick up any converting search terms, I’m going to pull those over to my manual campaign and test them across all products in each match type anyway. So I’m essentially constantly just gutting the automatic campaign.

Steve: Right, right.

Brian: But I want to run it in the back ground because the automatic campaign does a decent job of showing your ad for again audience relevant and competitive brand names.

Steve: Okay, and in terms of launching a brand new product, you start running these right away?

Brian: Correct.

Steve: Okay.

Brian: Yeah, in fact a lot of times what I will do is I’ll set up a shell campaign even before I have the product stocked. So as soon as I create the product listing and I’m waiting around, I can do all kinds of keyword research in advance. I don’t need to wait until my product is live.

Steve: So you are doing this is via an automated – are you running ads actually before your- actually that can’t happen, right?

Brian: You are not running ads before you have a product live, but you can do a keyword research on your competitors as an example.

Steve: I see you are just prepping yourself for the campaign before your product is in stock?

Brian: Exactly.

Steve: Got it.

Brian: Because it might take me a few days in order to collect all the data that I need because I might be collecting thousands of keywords in my keyword research.

Steve: Right.

Brian: And I don’t want to wait until after my product is live because I’m losing a precious amount of time during that initial honeymoon phase where you are trying to get that sale velocity going for a brand new product.

Steve: Okay, and in terms of your target ACOS — actually let’s talk about the matrix that you use for a spread. I assume you use a cost and conversion rate. In the beginning when you’re first launching a product, are you trying to — are you devoting a much larger percentage of your product kind of like a giveaway?

Brian: Yeah.

Steve: Okay.

Brian: So in other words I’m overspending on my ad.

Steve: That’s correct.

Brian: So as an initial advertising objective, and that’s something I indefinitely teach is to identify what your advertising objective is, because that’s going to dictate how you are spending your money, how you are doing your weekly activities on optimization, or competitor targeting or something like that. Initially I am overspending; I am basically just flooding Amazon with a ton of keywords.

They are only going to show — I might give them, even if I gave then 50,000 keywords, they might only show ads for 50 of those keywords per products as an example, because they have a very limited attention span if you will. But the problem is I don’t know which 50 until I give them everything.

So that’s part of the reason why we do all this, and it seems like it’s really wasteful, but at the same time we don’t have many options that allow us to really focus in on — like only show the keywords that we think have the highest potential, because the data simply isn’t offered, not by third party tools, not by even Amazon itself as far as only pick these 50 and only run these 50. Unfortunately he had to shotgun it so.

Steve: Interesting, so there is no way for you to know which keywords Amazon actually is going to use. Are there things you can do to kind of better influence Amazon to use those keywords, so to speak?

Brian: Well, I wouldn’t say that there is absolutely no way. There are ways, but the problem is that the advanced tools that are necessary in order to do the analytics regarding relevance have not been fully developed yet. We have some in — we have prototype tools right now within our software team, but we haven’t made those public yet.

Steve: Okay.

Brian: So there is basically, there is ways that you can test for relevancy; there is also ways you can test if you have an AMS account. For instance you can test to see what Amazon’s own internal expected volume rage is, otherwise any kind of third party tools is going to be a rough estimate as far as tra — anybody who comes from the AdWords background is always reliant on the search volume. We always kind of live and die by that search volume number and unfortunately Amazon doesn’t divulge that information to anybody, to any third party tool and so a lot of those are primarily estimates.

Steve: There’s probably a pretty good correlation though between like Google searches, right and Amazon searches?

Brian: You would think, yeah, I mean one of them is informational search engine that was an ecommerce search engine. However if you can narrow it down, I wish that the Google keyword planer tool allowed you to focus just on Google shopping as an option, because that would give us a more, a stronger, a closer correlation to what it might work on Amazon.

Steve: So your objective in the beginning is to flood everything. So when do you start turning back the dial, like do you do that based on like the number of reviews that you’ve gathered so far. Like kind of, like how does it transition down?

Brian: Yeah, so initially my first advertising objective might be simply just to get sales velocity. In other words pushing as many units as possible that’s going to contribute all be it a small amount to the number of units that are being sold overall for the product in hopes that that’s going to help bump up my organic search position. Obviously the sponsored products may only contribute 15 to 20% units, total units sold to that volume and so it’s not going to have, it’s not like you can turn on sponsored products and just suddenly be on page one.

Steve: Right.

Brian: It simply doesn’t work that way. However it can make a small contribution and it may be enough to carry you up to page two, maybe even page one if you have weak competition, to hopefully allow you to stick your landing if you will, to get up into that high position. Same kind of thing, I would probably also supplement that with some kind of a launch service. If I can do giveaways without the review incentive of course, then I would now probably combine that in order to try to get the biggest push initially.

Now once I see that I’m starting to hold a higher position, then I’ll switch my advertising objective to more of an audience research. That’s primarily where I’m still willing to overspend, just not to an extreme that I might during a launch.

Steve: Okay.

Brian: And at that point what I’m doing is I’m collecting as many search term data as I can about the shoppers for this product, how they are finding me, especially what the clicks through rates are for the products, for the campaigns, for the keywords or the search terms rather. And then ultimately carrying that over to what the conversion rate is or the conversion is for each of those search terms. So I can start identifying a set of search terms that convert the best for each product variation, for each skew.

Steve: You mentioned click through rate, what is like a good click through rate in your eyes?

Brian: So at the campaign level usually I’m looking to try to get in the, at a minimum above like say like 0.3% click through rate.

Steve: Okay.

Brian: Ideally what I’m expecting typically is over 4.4% at the keyword level, at the campaign level. I started dropping down below 0.2% and I’m losing my audience relevance. I’ve got to disconnect with my audience.

Steve: So that’s interesting that you look at those two metrics, so you don’t look at ACOS or?

Brian: Only the ACOS, not necessary just because I use tools that obviously with PPC Scope we calculate profitability and profitability is more accurate than ACOS.

Steve: Okay, Sure.

Brian: Ultimately if you know which most sellers unfortunately don’t know, please find this out is what your net profit margin percentages is for each product. What is your break-even number, what is your break-even percentage before advertising? That can equate to what your break-even ACOS is. So you technically could use the ACOS number, the advertising cost, or sale percentage as a guideline as far as whether or not your advertising is profitable. But ultimately I also like to calculate the full profitability so that I know how profitable each keyword is let alone each product reach campaign.

Steve: Okay, so what’s interesting here is the click through — let’s say you had a keyword that had like a pretty low click through rate like below your guidelines, but the conversion rate was excellent. Has that ever happened to you?

Brian: Oh yeah.

Steve: Okay.

Brian: No, I mean that does happen because there are some product niches that have — where shoppers tend to gravitate toward one or two very generic keywords. Like a one word keyword, maybe a two word keyword and unfortunately it has such broad appeal across a lot of different products, but it’s used, it’s kind of like — it’s used by the popular group, by the masses. It’s not as long tale; it’s not as descriptive as some other products have.

And so sometimes you don’t have a choice but to simply compete with other sellers on these really high competitive search terms. And I can tell you is that especially products that — here is where that click through rate really tanks for most people and conversion rate, is anytime you have a product that you are selling that has either a lot of competition, has a lot of style, flavor, color, size, variations, clothing is an example, cell phone cases, anything that has a lot of different style variations reduces the chance of a shopper to make a decision quickly.

Steve: Right, Okay.

Brian: And so they tend to — they get into this window shopping mode, and they browse around, they are just shopping surfing around for different styles that seem to jump out at them that they like. The problem is that your click through rate, and your conversion rate usually get pretty poor as a result of selling in that type of product.

Steve: So at that point you probably would cut down on those keywords and use more specific ones that specify the color in the search?

Brian: If you can, if you can segment. That’s one of the reason why we segment into separate ad groups, so we can try to identify these five search terms as an example seem to gravitate toward this one product variation. That way we can emphasize for that product variation rather than try to force it for all the product variations.

So that’s when we start looking at — and certainly taking each I’ll certainly go in and look at the ones that are converting, and I’ll do additional keyword research in order to see if I can find a handful of other related, directly relevant keywords to that one that is converting but maybe has other poor metrics to it, and see if I can find some alternatives that I can supplement or even replace that.

Steve: Okay, but often times there is one advertised search volume right, of course, the specific ones.

Brian: No, no, true, true. But cumulatively, cumulatively they may.

Steve: Okay, so okay so, let me just kind of summarize what you said. So you run all out, and you flood the market at first, but then once you start getting some traction, meaning like you are moving up in the organic search ranks, you start dialing it down. Do you always, at the lowest point of your campaign, are you just trying to break even or are you trying to be profitable with your campaigns?

Brian: Well, and so that’s I mean that’s another advertising objective. Do you want to move the most units you can while still in break even while not overspending on your ads, or do you want to go for profit? Those will be two different advertising objectives and both of those are totally fine.

Steve: Okay, I was just asking from your own personal products like how you do it. Are you just trying to break even, or do you try and make a profit on the product that you personally sell?

Brian: Well, so my first goal with my advertising, I usually try to do breakeven so I can move the most number of units. But I’m also primarily using the advertising in order to really understand who my target audience is so that I can optimize my product listings for the highest organic search position in specific keyword product niches that has less competition, less resistance, yet still converts, still has been proven to convert through my PPC advertising.

So really I’m leveraging the data that I have invested in my PPC in order to benefit my organic sales. My organic sales are typically going to be four of five times the number that I’m going to sell through my advertising. So my focus really is on the organic, where results can I use the PPC data in order to improve my organic listing.

Steve: Okay.

Brian: And that’s mostly just about understanding the audience very well.

Steve: Okay, Okay. So in that case from what it kind of sounds like is since organic is such a large percentage of the sales, it kind of makes sense to keep your advertising spend on the higher side to kind of boost your organic, the organic sales. Is that kind of true?

Brian: Yeah.

Steve: Okay.

Brian: Exactly yeah, that makes sense. I mean some people will still continue to overspend on specific keywords, because they need that in order to hold a position because maybe they have a product listing that is organically positioned between competitor five and competitor seven. And if they slip at all, if they sell one less unit per day, then they are going to slip down to position eight which of course they wouldn’t want.

Steve Right, okay.

Brian: And so you kind of have to pick your battle.

Steve: Sure, no that makes sense.

Brian: As far as — there are some keywords that you usually kind of continue to overspend because you have a need in order to maintain a certain level from an organic standpoint, and the slight bump that the PPC is going to give you may make all the difference in the world in some product niches.

Steve: Okay, okay, let’s switch gears a little bit and talk about AMS sponsored ads. So first of all if you wouldn’t mind defining to the listeners what that is, how do you get access and what do these AMS Ads allow you to do.

Brian: Okay, so AMS ads are — typically you’re going to find these in three different areas. They are going to be the bottomed sponsored ads, the bottom search results, they are going to be the top banner ad that goes along the very top above all organic search results, above all sponsored ads, just below, some of them just below the search bar, you’ve got a wide banner ad that goes across top, and that’s an AMS headline search. And then on not only your own product listings, but also your competitor product listings you’ll typically see an ad that runs below the add to cart button on the right hand side.

These are all AMS ads that are part of the Amazon marketing services which is a second Amazon marketing platform, their PPC platform that supplements sponsored products. The way that you get that is through — currently for most marketplaces you have to get ungated through vendor express. There are like Japan for instance they’ve already made it so that you can go directly. You can avoid Vendor Express and get directly to AMS.

There are plans for AMS to become more accessible to more sellers. However right now you have to go through and get approved through Vendor Express in order to get ungated to the Amazon Marketing Services ads.

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Now this course is free and can be obtained at mywifequitherjob.com/free. Just sign up right there on the front page via email, and I’ll send you the course right away. Once again that’s mywifequitherjob.com/free, now back to the show.

So here is the misconception that I had hoped you can clear up. So you don’t — just because you sign up for Vendor Express doesn’t really mean that you need to sell the Amazon at volume, right?

Brian: No, in fact one of the things that we teach is to essentially put in like a sacrificial product. This could be one of your own products, simply is just a dead product and you don’t care about as much. It could be one that you source specifically for ungating into Vendor Express, it’s more of a case of you get, you submit a product that you effectively want Amazon to take control over the whole listing.

Meaning you lose over that listing, and you are selling wholesale to Amazon, they are selling the product but really all it takes in order to get ugated to AMS is to have an initial product approved, and you fulfill the sample order that they have and sometimes that’s a dozen, sometimes that’s 30 units, and they’ll give you access to the AMS platform which ultimately is what we want. You don’t have to continue to sell to Amazon after that initial sample order is fulfilled because you’ve already been ungated.

Steve: Right, okay. So let’s talk about some of these ads. So let’s talk about the headline search ads first. First of all how do you search for these ads, and then how do they kind of perform compared to some of the other regular sponsored ads that you have access to?

Brian: Sure so typically AMS ads are going to have lower volumes simply because they tend to be more targeted, more segmented. So the way that we set up the campaigns for headline search within AMS is typically a lower bid. This is — for instance if our sponsored product keywords have an average cost per click of a dollar for instance, we might be spending 20, 30 cents on our bidding on the headline search ad within AMS.

We sometimes do, we do a lot more variety and a lot more volume as far as number of campaigns that we run, because it’s giving us more flexibility on how we structure these ads. It’s not simply just showing our product and a limited portion of a title like sponsored products does, we actually have a little more control as far as how these are presented. The images that are being used, the title that’s being used, and so we have more controls as far as being able to copyright some of the compelling messages that are being shown in these AMS ads.

With headline search, I might set up a campaign that is running a single keyword. I might have 1,000 keywords in there, and also I have a few different headline search ads running for the same product, always testing those out. AMS ads…

Steve: Can you give me an example of like a headline ad that’s worked for you really well, and how you kind of write the copy differently than what the default is for regular sponsored product ad?

Brian: Sure so, typically for our sponsored products the titles are usually, we are trying to lead with our target keyword phrase that were trying to get organically ranked for. That’s unnecessary from an AMS standpoint, because an AMS headline search ad or a banner ad, we can target a specific keyword, maybe that’s our highest volume keyword. It could be a single keyword. AMS will even tell us if it’s a high, medium, or low search volume keyword. So it gives us some benefits there that we don’t normally have.

Steve: Right.

Brian: And I might put in, Amazon is certainly going to like sponsored products, AMS is going to come back and here is a bunch of suggested keywords. What they typically do is here is a bunch of single word high volume keywords, and they might give you 15, 20 keywords, and you could run that banner ad just like that, run it with a low ad…

Steve: But developing the banner ad it’s like AdWords at that point. You get to write the copy, right?

Brian: Correct, yeah, so what you can do is on a banner ad, typically you have to put three products. You have to identify three of your products that are going to be shown as part of this banner ad. So you got the ability to modify a short title. It’s like 50 characters and so you can wordsmith that 50 characters to try to be a bit more compelling. In other words you are not just simply just saying blue widget, you are saying, this is the most popular blue widget. You can’t necessarily lie and make a claim that’s not real of course.

Steve: Sure.

Brian: But you can certainly get away with more…

Steve: Sensationalist language.

Brian: Yeah, exactly, yeah, yeah, thank you. A bit more sensational title in that 50 characters than you are going to get away within a product listing title for instance.

Steve: Right, okay. And so given that, when you think that the quick through rate will be higher for these since it’s like right smack at the top, right?

Brian: It is, yeah the click through is higher and in fact it has a higher requirement also. So for a keyword to continue to run in sponsored products it has to maintain at least a 0.07% click through rate over like let’s say a four week period of time, extended period of time.

Steve: Okay.

Brian: So it’s 0.07%. In AMS it has to be 0.7%. So it’s a lot more, it requires a lot higher click through rate otherwise Amazon will automatically, or AMS will automatically shut off that keyword and say, this one is not getting a high enough click through rate for us to keep showing.

Steve: I see.

Brian: So you do have to do some clean up periodically as far as that goes in your little place keywords maybe that that are not performing as well. You can also adjust keywords, there is some individual tools within the AMS ads that allow you to control how likely your ad is going to be showing up, you can adjust the bid. Sometimes some individual keywords, they may have a high volume, but then you are going to have a higher competition, the cost can like skyrocket pretty quickly under the right conditions.

Steve: So the AMS ad it sounds like is two, over two times the click through rate of where you would consider a good click through rate on a regular sponsored ad, it sounds like, right?

Brian: Yeah, you can say that yeah.

Steve: Okay, okay. So can we talk a little bit about the conversion rate of these, I mean since the click through rate is a lot higher, chances are you are even getting more traffic, like higher volumes of traffic, right?

Brian: Right.

Steve: And so how does — is the conversion rate just as good as the regular sponsored product ad in your experience or is it worse?

Brian: I think it’s actually, yeah, I mean I would say it’s probably — actually there is actually similarity. Typically what affects the conversion rate is once you bring — because what you are essentially showing in the banner ad, in the headline ad is you are showing, here is three different products with some short titles and some small images.

And people are clicking through thinking they are going to see a variety of products and you may show three on there and you come in to a brand page with this product page, and you are not going into a specific product detail like you would for sponsored ads. You are going into essentially a brand page that has multiple products.

Steve: Right.

Brian: Now AMS also gives us some additional options in order to be able to present more polished form added brand pages, and to how to use different templates that allows us to make a much better presentation similar to what we might see with enhanced brand content for instance or a plus content where you have much more formatted and like larger images or specific text that you can use on a brand page that is going to very heavily, as far as like how does that appeal to a shopper, does that increase conversion rate?

By default you can just dump them to essentially a search result page that has just your products or…

Steve: So it takes some two clicks to get to a product essentially, minimum right?

Brian: Yes, correct, yeah.

Steve: Okay.

Brian: Because you are basically going to a search result page or a brand landing page, and then you can go into a specific product. That is correct.

Steve: Okay. So that in itself would probably reduce the conversion a little bit I would imagine, right?

Brian: You would think, yeah, but your cost of going in, your cost of running the ad is so low in comparison to sponsored products. A lot of times your ROI is much better. You’re ACOS is very low.

Steve: Okay, okay. So this sounds like an essential tool to go on your PPC arsenal when you say like the volumes are higher, higher visibility, okay.

Brian: Correct yeah.

Steve: Okay.

Brian: Yeah, a common question that we get is why can’t I just AMS exclusively? And I would say don’t do that, because you need to continue to use the sponsored products in order to continue to understand who your audience is and the search terminology they are using because AMS is not going to tell you the search terminology.

Steve: Right, okay.

Brian: So don’t go blind to your audience simply by going to — committing to just AMS, use them in conjunction with each other.

Steve: What about the product display ads, like the ones that are underneath the add to cart, how do those perform for you?

Brian: Product display ads do not perform nearly as much. They take a lot more work. Similarly you can do a certain amount of formatting. You can target individual competitive products or audience classes during categories, and so you’ve got different options as far as how you target your ad, how you place your ad. The challenge that you usually have is if your ad is showing up below the add to cart on somebody’s product detail page, then you are essentially competing.

A shopper is already on that product detail page, so for whatever reason they’ve been convinced so far of this product, and they see your ad as kind of a distracting alternative, and unless you have a compelling offer, a more compelling than the product detail they are on, it’s not going to be as effective. It’s not going to either get click or is not going to convert. And so it does require a lot more work from a standpoint of set up as far individual targeting, it requires a lot more set up than say sponsored products does.

Steve: Okay.

Brian: But if you do it and you test a lot of different ad titles and you test a lot of different targeting methods, then it can evolve into a very effective method of advertising, but keep in mind is the more work you are willing to put into it the less competition you will have.

Steve: Okay, now that makes sense, but in terms of low hanging fruit, regular sponsored products ads plus the headline search are the primary drivers, right, for you?

Brian: Yes, I would say.

Steve: Okay.

Brian: Yeah, definitely. Now one of the things that for your audience is that a common method is that I have to have three products in order to run the headline search. You have to have three product listings, but one of the things that I might do on that is I’ll have one product that is — because once I get past Vendor Express, I can advertise all my products and still qualify for AMS. I don’t have to do just the one that I submitted to Vendor Express.

Steve: Right.

Brian: So what I might do is I might create a second and a third product listing that is, maybe my first one might be fulfillment by Amazon, or if it’s a Vendor Express product, then it’s fulfillment by Vendor Express. Then I’ll also have two fulfillment by merchant products which might be a two pack and a three pack that are both overpriced, so they aren’t likely to convert. But I can easily create a variation on my existing products in order to satisfy that second product, and third product, even though I don’t expect any conversions on the second and third. It’s a…
Steve: It’s like a loop hole.

Brian: It’s a walk around.

Steve: Yeah, right, right.

Brian: But don’t stop yourself saying, I have to wait until I have three products otherwise I can’t do this, no, no.

Steve: When you are launching a product, do you go full blown headline search ads also in addition to these sponsored products, what we were talking about earlier?

Brian: Yeah, yeah, absolutely.
Steve: Okay.
Brian: Anything but I can get more realistic when I first launch to get more brand recognition, and the more number of times that I can get in front of an audience, because I’d rather have three ad placements, an organic listing, a sponsored ad, maybe even two sponsored ads, both in line sponsored ads as well as the light rail sponsored ads, because I can get both of those as well as the headline search.

So potentially I could have four placements or four points of visibility on page one for my target keywords if I line up all those — if I have all those running. And that’s four times the chances that somebody else who just has their organic position or just has an ad running, I have four times the chances that a shopper is going to click on my ad as opposed to somebody else’s.

Steve: Right. Cool. Well Brian we’ve chatting for almost 45 minutes, I want to be respectful of your time. I’m going to be seeing you pretty soon at the Sellers Summit, but where can people get a hold of you or check out some of the product offering that you have?

Brian: Okay, so certainly my flagship training is sponsoredproductsacademy.com, the PPC analysis software, that’s the one we’ve had for two years now. It’s certainly come a long way and that is PPCscope.com.

Steve: Okay.

Brian: And then I’ve got my Amazon PPC trouble shooting community on Facebook.

Steve: Okay, why don’t you send me that link for that, and then I’ll go ahead and put that in show notes. Is your Sponsored Products Academy open all year round, or do you close and open it?

Brian: We close and open it. Yeah, I think it’s closed currently.

Steve: Okay.

Brian: Because we just had a launch recently so, yeah I need to be able to focus on the individual students.

Steve: Right, right, okay. So I’ll put a link. I mean I imagine there is a waiting list, right?

Brian: On the — yeah, so basically you can sign up…

Steve: For the course yeah.

Brian: Yes, correct.

Steve: Okay, cool. So I’ll link all that stuff up in the show notes. Brian, thanks a lot for coming to the show, really appreciate your time.

Brian: Absolutely Steve, thanks for having me.

Steve: All right, take care.

Steve: Hope you enjoyed that episode. Brian Johnson is one of the best guys in the industry when it comes to running profitable Amazon sponsored ad campaigns, and he also has a course. So go check it out when you get a chance. For more information about this episode, go to mywifequitherjob.com/episode171.

And once again I want to thank SellerLabs.com. Their tool Ignite is what I use to manage my Amazon PPC campaigns. Instead of the old tedious way of generating reports, and analyzing your ad campaigns in Excel, Ignite aggregates all that info for you in one place, and allows you to quickly visualize your data to make decision fast.

So not only does it save time, but it also makes managing your Amazon campaigns so much easier. So head on over to Sellerlabs.com/Steve and sign up for a free 30 day trial. Once again that’s SellerLabs.com/Steve.

I also want to thank Klaviyo which is my email marketing platform of choice for ecommerce 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 auto pilot. So head on over to MyWifeQuitHerJob.com/K-L-A-V-I-Y-O, once again that’s MyWifeQuitHerJob.com/K-L-A-V-I-Y-O.

Now I talk about how I use all these tools on my blog, and if you are 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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170: How To Build A Highly Engaged Instagram Following With Sue B Zimmerman

 How To Build A Highly Engaged Instagram Following With Sue B Zimmerman

Today I’m excited to have Sue B Zimmerman on the show. Now Sue and I met through a mutual friend and I actually recently watched her speak at Ryan Deiss’ Traffic and Conversion Summit.

She is known as the Instagram Expert and travels across the world sharing her Instagram expertise. Today we are going to explore ways on how to increase your Instagram following and how to use Instagram to sell your products online.

What You’ll Learn

  • Sue’s strategy for building an Instagram audience
  • Where to start building your following
  • How Sue recommends generating content for Instagram.
  • The tools she uses to post on Instagram.
  • How she collaborates with other Instagrammers.

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

Ignite.Sellerlabs.com – If you are selling on Amazon and running Amazon Sponsored Ads campaigns, then Ignite from Seller Labs is a must have tool. Click here and get a FREE 30 Day Trial.
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ReferralCandy.com – If you’re already getting steady orders every month, adding a refer-a-friend program to your store can give you a new sales channel. And ReferralCandy is the best in the business. Click here and get a FREE $50 credit towards your account.
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Transcript

Steve: You are 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 with their businesses.

Now today I’m thrilled to have Sue B. Zimmerman on the show. And if you don’t know who Sue is, she is actually known as the Instagram expert, and she is going to teach us today how to start a highly engaged IG account.

But before we begin I want to give a quick shout out to Seller Labs who is a sponsor of the show. And specifically I want to talk about their brand new tool Ignite which helps sellers manage their Amazon sponsored ad campaigns. Right now I’m actually using this tool to manage my Amazon sponsored ad campaigns, and it makes things a heck of a lot more convenient.

So number one I’ve always found it a major pain to generate my PPC reports on Amazon, cut and paste the data over to an excel spreadsheet and use pivot tables before I’m able do any analysis. Now Ignite pulls all that info for you automatically and allows you to easily see what keywords are working and what are not immediately, there is no need to manually create reports or play with excel.

Second of all unless you’re a data geek, Amazon campaign data can be hard to understand, and what is cool is that Ignite makes keyword and bidding recommendations on the fly that can be applied with just a couple of clicks.

So let’s say one of my hankie keywords is bleeding money, well Ignite will alert me of that fact, and I can reduce that bid immediately. So bottom line Ignite makes managing your Amazon’s sponsored campaigns so much easier, and the fact that they provide me with alerts means that I no longer have to monitor my campaigns like a hawk.

So if there are keywords that are doing well, Ignite will tell me to add them to my exact match campaigns. If my keywords are losing money, well Ignite tells me to either remove the keyword or to reduce the bid. So head on over to sellerlabs.com/steve where you’ll find awesome tutorials on how to run Amazon PPC ads and the opportunity to try Ignite for 30 days for free. Once again that’s sellerlabs.com/steve.

Now I also want to give a shout out to Klaviyo who is also a sponsor of the show. I’m always super excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I actually depend on them for over 20% of my revenues. Now you’re probably wondering why Klaviyo and not another email provider. Well 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, and that makes it extremely powerful. 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, that’s piece of cake, and there is full revenue tracking on every single email that I send.

So 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 I’m excited to have Sue B. Zimmerman on the show. Now, Sue and I met through a Mutual friend and I actually recently watched her speak at Ryan Deiss’s Traffic and Conversion Summit. Now, she is known as the Instagram expert and travels across the world sharing her Instagram expertise.

She also runs two popular online courses called Ready Set Gram and Insta Academy, and she’s actually a well-known speaker that specializes in Instagram. So today what we are going to do is we are going to explore ways on how to increase your Instagram following, and how to use Instagram to sell your products online. And with that, welcome to the show Sue, how are you doing today?

Sue: Hey, it’s so great to be here, and yeah Ryan Deiss’s event just like rocked the house. That was the largest stage I have ever spoken on in my life, and I have to be honest, I was a little nervous.

Steve: So what’s funny is I was going to approach you afterwards, but then you were mobbed with like 20 people and I didn’t think I could fight my way into the middle there so.

Sue: Yeah, I think it’s because I was giving away a pen that really enables people to do Instagram stories, and because the conference is primarily men, their fingers are large, and it’s hard to do like the fine script on a phone. So everyone wanted a pen and I shoed everybody out into the hallway where there was really good, what I call #hotelfilterforgoodlighting, so we could take a ton of photos to post on Instagram. So like, I gave a little workshop in how to take the perfect selfie photo after.
Steve: What’s funny is one of those few conferences where there is always a line for like the men’s room, but there is no line for the women’s room which I always find odd.

Sue: Exactly, exactly, yeah.

Steve: So Sue, how did you get started in business and kind of what led you to specialize in Instagram?

Sue: Yeah, great question. So I’ve been an entrepreneur my whole life, I actually had my very first business when I was a teenager. And then through the years I’ve always been that person that saw opportunities and trends in primarily consumer product space. I was heavily involved with clocks and [inaudible 00:05:44], the little two dots that you put in the clocks.

And I even was on stage at QBC, with one of my businesses which was a double sided sticky tape that allowed scrap bookers to embellish their photos, because I’m the person who has always loved photos and my most prized possessions are my photographs.

And so it’s really ironic fast forward eight years after being on stage at QBC that I’m now teaching a global audience how to embellish their photos to put on Instagram, their digital platform using third party apps, and all kinds of fun tools to really enhance what I call their digital magazines.

Steve: You are thinking giblets, yeah.

Sue: And yeah, gibits [ph] to go, yeah digital magazine because like I, Steve, I believe that Instagram is essentially that, it is your digital magazine for your business, your brand your product or your service where if you craft the perfect bio, and we certainly can go over with that is a new show, awesome photos or videos not only per post, but they cohesively all go together as a whole magazine.

You can certainly attract the right followers, the right customers, the right clients and ultimately grow your business, and I really think that there is a big disconnect with you know, people understanding this. And so when I had my retail store on Cape Cod I was selling clothing, jewelry, and accessories all with a very preppy, nautical vibe.

And I quickly learnt that by posting images around the products that I sold, not just the products that I sold but the beach and the sunset and the yachts, and like the whole vibe of Cape Cod and Hide Ranges- which always got a lot of likes, I could essentially craft that perfect magazine. And eventually my business throughout that summer grew 40% from using Instagram, and before using Instagram I was using all of other social, because I taught social media off season when I did run my store.

So I’ve been versed in social media, I’m very visual; I catch trends and opportunities before they go mainstream. And I knew that Instagram was going to be a big deal because of the visual component, because of that magazine opportunity that you – and even because people always say, when they were walking in my store and they are like, “Can I post– can I take a picture of…

Steve: This is the physical store?

Sue: Yeah.

Steve: Okay, got it.

Sue: The physical store and I had an ecommerce store. Yeah, so people would walk into my store and I would always ask them after they purchase something if I could take a picture and usually they were like holding up what they bought, and they are like, ‘sure.’ And they are like, “Oh my God! I love Instagram.” And I’d be like, why do you love Instagram? And the answer over and over and over again Steve was, because it’s fun, it’s fun. And I don’t think people think of social media as fun, I think that they think of it as a time sack, and often pull down rabbit holes.

So I knew I was onto something from the success that I had at my store. And because I love teaching, empowering and helping other people make money, I knew that I had a platform to teach. And so I just started teaching, but you’ll be excited to hear that the way I got on stage and stage is all over the world is from doing podcast interviews, and the very first…

Steve: Interesting.

Sue: Yeah the very first one I did was with Michael Stelzner, the owner of Social Media Examiner. And as soon as he was done interviewing me he was like, “Damn, I need to get you on stage in Social Media Marketing World,” and I’ve been there speaking ever since.

Steve: That’s funny because that’s how I met Mike. He just had me on the podcast. The podcast literally went live like three days ago or whenever you post them, and so are you telling me that the speaker engagements should start coming in any minute now?

Sue: Oh, yeah, I mean, well here is the thing I believe. When you — I say yes to pretty much every podcast opportunity as long as it aligns with kind of where I am in my niches, and they have the market that I want to amplify and broadcast to, because I love that I get interviewed from people all over the world. From Australia, from Israel, France, Spain and I’m talking and people are, you know- I’m in their ears all over the world, and then they are opting into my email list because I have a free download that I talk about, and they are coming into my community, and that is how you grow a business.

Steve: Let me ask you this. I was curious when you were talking about growing your businesses 40%, the one on Cape Cod, were people actually going to your bio and clicking on the link, or were you getting that data from just whenever someone made a purchase you asked them, how they found you?

Sue: Exactly.

Steve: Okay.

Sue: So my store was tiny, like 10 x 12 on the inside, and then I got to merchandise on the outside and so it was a very, very intimate store in a community, like in a country club community.

Steve: Okay.

Sue: So it was kind of like friends and family and then you know visitors from the Cape. So every time someone checked out, it was mandatory for my employees to ask, how did they find us.

Steve: Got it, okay.

Sue: And often they would hold up their phone and say, “Oh my God! This picture on Instagram.” Like I have to have this anchor bracelet or I need this tunic, and by the way to the guys on the call, tunic is like a beach cover up.

Steve: Okay.

Sue: So yeah, so they would check a box and we would know where that sale was originated from.

Steve: Okay, and then in terms of your brand, Sue B. Zimmerman, where you teach these classes, like how do you generate traffic to that site? Is it primarily Instagram traffic also that leads to your courses and classes?

Sue: So that’s a great question, so the way my business model is set up is that we craft an epic blog post every week, and in that blog post not only is it written words teaching, but also a YouTube video. So I have a YouTube channel and today we hit 10,000 subscribers.

Steve: Nice.

Sue: So I’m super excited about that, and we get a lot of traffic from YouTube because of the search engine optimization from Goggle obviously.

Steve: Okay.

Sue: And when we publish that blog post Steve, we create custom links, UTM links so we can track, and we have different links for all of social. So we have a link for Instagram, Facebook, Twitter, YouTube. Those are primarily the spaces where I am most frequently broadcasting.

Steve: Okay.

Sue: And so we are able to track the success. Now we treat each blog essentially like a launch. So the blog is published, it goes to our email list first because those are the people who know, like, and trust me and are already in on the inside of my life and community, and have some connection to me. And then they are more likely to share it, comment on the blog and then after it’s gone out to our email list, that’s when I’m all in on social.

So that’s when I would post on Instagram, both my personal page @SueBZimmerman, my business page @theInstagramexpert, and occasionally on my company page which is @spzteam which is my team page, my team manages that.

Steve: Okay.

Sue: So we will amplify on Insta. I used to do a live stream on Periscope; I was an early adopter on Periscope. I have over 22,000 followers there, but things have really changed significantly over the years since being there. So now I amplify on Facebook Live, and I now have an Instagram Live strategy that I’m using to amplify even though it goes away as soon as you stop the broadcast.

Steve: Are you using that instead of Periscope now?

Sue: Yeah. It’s so funny you asked that, like as of yesterday, when I talked about a webinar that I’m doing this Thursday, I went on Periscope first, I had only 53 people watching live, and then I had a lot of replay, and then I did my second Instagram Live ever and I had over 360 people on.

Steve: Okay.

Sue: And here is the thing, they were so happy to see me, they were so engaged in like, “Oh my God! Sue is on Instagram Live, this is so great.” And I’m like, “Ask me a question, ask me anything.” And they are like, “Are you kidding me? This is amazing, I have Sue’s attention.”

So I know that Instagram Live is a good place for me to be. So now we’ve got the blog, it sits on our website. In the blog we also have some links to our free strategy guide, we have some links encouraging our audience to click to tweet, and we’ve got people leaving comments and people sharing it.

And I’m really proud of this blog because this year we were nominated as one of the top ten blogs from Social Media Examiner. So just to have that credibility, and the reason I’m saying this is not to brag but to say when you go all in and commit to doing something consistently over time, it really can pay off. And so we knew this is where we needed to create stellar content and become known as the Instagram educator. And I know my handle name is the Instagram expert, but I like to pride myself on being a really great teacher and educator.

So that is essentially what we do, and so the link on Instagram Steve, gets changed out for the various reason. One, usually the link is our Instagram strategy guide, and that’s what you see most frequently.

Steve: Okay.

Sue: That sits on our website, that sits on our Facebook page, but if we are in a launch, like I was when I did Marie Forleo B School a couple of weeks ago, and right now I’m in a launch with my business coach Lisa Larter, we have a webinar for Thursday. We switched out all those UTMs; we go all in on the launch. And right now we are driving traffic to synapse for the webinar, but before that we were driving traffic to our blog, and the article on our blog had to do with the content that people would want who would sign up for the webinar.

So it’s all about money, money mindset, like how to get a handle on your money. So the bog always matches up to the campaign that we are doing. So we can — you will love this obviously, we can drive traffic once people click on our blog, we can retarget with Facebook ads.

Steve: Sure.

Sue: And so the blog is always the seed to the next content, to the next campaign. And when I say seed it’s like we are not selling anything, we are giving great value through content that we can amplify. And then this Thursday when I do the webinar, you know right now my link is for signing up for the webinar, and then after the webinar the link will get switched out to purchasing the course or the class that we are offering from the webinar.

So it’s very, very strategic and it’s very formulaic, and we’ve had great success with launches when we do it this way, did that all make sense?

Steve: Yes. Let me ask you this, so there is a couple of things that you said there, so wherever you put together a blog post, you use the link in your Instagram and usually that link is the link to your blog post unless you are doing some sort of launch or promotion, is that accurate?

Sue: Yes, a launch or promotion and then when we are done with the launch or the promotion we go back to the strategy guide. The strategy guide, my Instagram strategy guide is always our list builder.

Steve: Okay.

Sue: So Suebzimmerman.com/guide gets anyone listening, our 17 page free Instagram guide, and that is where we build that. I know they can trust factor because we do have a nurture sequence, about seven days after you opt-in to that guide where you really get to know me more.

Steve: It sounds like that would be a better link because you are getting an email list, an email address as opposed to just a regular blog post, right? So Like what percentage do you have that link up as opposed to the content?

Sue: 75 to 80.

Steve: Okay, 75 meaning the opt-in or?

Sue: The opt-in, the opt-in is there most frequently.

Steve: Okay, got it, got it. Okay, and then once you have them you probably have an auto responder sequence that walks them through.

Sue: Yes, yes.

Steve: Okay, I’m just curious myself, like, how big is your Instagram following and like how much traffic does it actually drive?

Sue: Great question, so because I have three different accounts, there is — some of the followers probably follow me on both, so I have — I’m opening up Instagram right now. I don’t pay attention to my numbers as much other people might, but I have 46,900 on my personal account.

Steve: Okay.

Sue: So that’s a shit ton, that’s a shit ton, right? And then I’ve got on the Instagram expert which is my business account where I share Instagram tips, tools and strategies, I have almost a 1,000 more 47.7.

Steve: Okay.

Sue: And then on my team account we have almost 3,000, and here is what I want to say to the listeners. I have a ton of people following me and a lot of those followers could be 13 year olds for all I know, and aren’t necessarily my ideal followers. I really wish that people would unfollow me who aren’t there to engage, because they kill my engagement rate.

So you know, I get suggested to be a follower because in the bio on Instagram it says, I’m an Instagram marketer. So anyone searching for Instagram or marketing, I come up and they start following me. I pay attention to those who leave real authentic comments, and who actually engage in my content. To answer your question, we get about 250 opt-ins a week from Instagram.

Steve: Okay, okay.

Sue: So I care more about that number than my followers, and from that we can nurture people over time. Now this is not including any paid ads or Facebook and all the other stuff, you know.

Steve: Of course, these are just people clicking on your link in the bio and actually signing up.

Sue: Yes, yes exactly.

Steve: Okay, got it. And let’s switch gears a little bit. Let’s talk about selling physical products, because a large portion of my audience sells either on their own store or on Amazon. And so what I want to do today is let’s pretend that I’m an ecommerce store, which I am actually selling physical products, so it’s not that large of a stretch, and I’ve come to you for help, right? So what questions would you ask me, and how do you formulate a social media strategy?

So for example, my store I sell wedding handkerchiefs and wedding linens. So if I were to come to you for help, like how would you walk me through an Instagram strategy?

Sue: Well I love it that you have a very niche account; a lot of people don’t have that. So you are not just wedding, because wedding is so broad.

Steve: Right.

Sue: You got handkerchiefs and that’s so cool, like I love that. So what’s the most important thing for people to think with an Instagram strategy is who is your customer, and where do they hang out. You literary need to know where they hang out, where they vacation, where they shop, what their interests are. And I’m actually going to use one of my favorite Instagram accounts to really go deep with this stuff.

Steve: Sure, sure.

Sue: So the Drybar which is one of my favorite Instagram accounts is where you can go and get a blow out. So Alli Webb is the owner of the Drybar, I met her on [inaudible 00:21:32] Interview with her back in the day when Blab was a thing, and she not only has physical locations in the US, she also has some in Canada.

What I love about the Drybar are so many things. The main thing is that when I physically walk into the Drybar, I literally feel like I’m walking into their Instagram account. Alli knows that her customer who sits in the chair to get a blow dry has kids, likes fashion, likes fresh flowers, lots of people have dogs and they like funny quotes.

And so when you look at that Instagram account, it’s not just about a blow dry, it’s about their brand color yellow, their language that they use. Everything in their branding has to do with the bar, so all of their products are named after anything that you know, chase sack, tequila, money maker, like there are so many play on words, like a shot of this.

And so I love the branding and the language and the visuals around everything, and there is a lot of user generated content, there is a lot of celebration of the people who work for her. And so that knowing exactly what your customer or client loves will help you set your strategy up for success.

Steve: I just want to figure that out, like in a brick and mortar store, it’s a little easier but like if you are online how do you figure that out?

Sue: You’ve got to do surveys; you’ve got to survey the people who have either purchased from you in the past or inside of a Facebook group. Like ask them, I mean I would, I know from my free Facebook group, Instagram results for business and anybody can join that; there is 6,000 people in there.

I know from the pain points and the questions that they ask there what my content should be that I cover when I’m teaching, and then often you know, put into my paid course. And then I have my VIP group for my online course Ready Set Gram. So the more you communicate with and know exactly the language that they speak, and what they like, the more you can create content for them.

This is not about you and what you like, it’s about what do they love seeing and learning, and I think a lot of people on Instagram get this piece wrong. Does that all make sense to you?

Steve: It does. So the idea is to find out who your target customers are, and then create images that kind of follow through with that brand that appeals to those people. Here is a question that I always have with Instagram, like how do you measure the effectiveness of a campaign, outside of the link and bio?

Sue: Okay, I’m going to answer that in a sec, but let me just go back to one ninja tip for you before we go to the next question.

Steve: Okay, Sure.

Sue: So most businesses know who some of the brands are that not only do they buy your wedding handkerchief, but maybe they also buy — give me like the most popular designer dress, is it Valentino?

Steve: Vera Wang, Vera Wang.

Sue: Okay, so maybe they also, so you know that the people that buy your handkerchief also buy Vera Wang. So if you go to Vera Wang’s Instagram account, you can look at who their followers are, and you can start engaging in those followers. Now this takes time, this takes like creating a spreadsheet and really — when I say engaging, it’s not just like double tapping, liking, and writing a comment that says nice pic.

I’m talking about what is it that you like about what you are looking at and why, and you can get their attention. And so if you did this to five or ten accounts every day, you can get their attention and their eyeballs on you, because every time someone leaves a comment on Instagram you get a notification, and let me tell you something, everyone looks at their notifications.

Steve: Interesting, okay, so these are just followers of Vera Wang in this example, right?

Sue: Yeah, but people that follow Vera Wang are following them for a reason, and if they are following them and you are telling me that Vera Wang is one of your buckets, then that makes sense for you to be following that, or is it people that have their weddings at you know, in the Bahamas or at Turks and Caicos, or at the high end Regency, like knowing literary where your clients hangout on in Instagram, then going into those accounts and engaging with them.

Steve: Interesting, so are you looking for just the largest followers of that account?

Sue: No, I’m looking for the right followers.

Steve: The right followers, okay.

Sue: It’s never about being popular, it’s never been about the numbers for me, it’s always about the right follower.

Steve: Interesting, so what is your — how do you figure out what the right follower is?

Sue: So the right followers, if you go into Vera Wang and you’re looking into the followers and then you click onto their account and you see that they are getting married, and they are planning a wedding.

Steve: I see.

Sue: And you are like damn, they are planning a wedding, I got the perfect thing for them. Like you got to literary know what they are doing.

Steve: So you comment on them and then you tag them, and what would be an example of something you might say?

Sue: You don’t tag them, you just comment.

Steve: Okay.

Sue: And you can say, “Hey I see that you love Vera Wang and that you are having a wedding, I thought you might be interested in you know, I think you might be interested in my account.” I wouldn’t say I think you would be interested in buying this from me. I would just say you know, I think that you might be interested in my account, you know, very, very — it’s just like you are having a conversation with one person. Not all, not 600 million people on Instagram, but a real private conversation with the person that you think would be your ideal customer or client.

So I mean I could go even deeper with a comment, but it’s literally taking the time to craft a comment that makes sense based on the post that you are leaving a comment on.

Steve: Okay, that makes sense. So it’s really going deep as opposed to blasting so to speak? Like I’m going-

Sue: Oh my gosh, I cannot stand the blasters, get rid of them.

Steve: I know they are always, there is like a thumbs up or nice post or whatever, I just ignore all of those.

Sue: I block, I delete, block, and report anything that’s not legit.

Steve: Really, okay, interesting.

Sue: The more you do that, the more they’ll go away. No one messes with me anymore.

Steve: Okay, and so you get their attention and then hopefully they will go and check out your account. I’m just curious how frequently you do something like this. Is this every day?

Sue: Okay, so I don’t need to do this anymore, because of the way and my account is growing and the exposure I get from everything else that I do, but when I was starting out and I had under 1,000 followers, this was a strategy that worked extremely well.

Steve: Okay, so this is like a way to get your first 1,000 followers so to speak?

Sue: Yeah, and it’s a way to be – well is to continue to grow. So again I get 100 new followers every day on both accounts.

Steve: Okay.

Sue: And it’s because I’m often a suggested account to follower now, because I have so many followers and you know, I’m not like, oh my god, I have so many followers, but compared to most people I have a lot of followers. And so I’m suggested and people just start following me, but I look at a lot of these accounts that follow me and I’m like oh my gosh, I could never even look at that account or follow it, because there is nothing to do with what inspires me.

I only follow accounts that give me aesthetic value, who entertain me, educate me, or teach me something new. I’m not one of these people that follows just to be nice.

Steve: Okay.

Sue: I follow so that everything that I see in my newsfeed is content that I want to see, because here is the thing you need to know with the new algorithm, the more you double tap and like and follow random ass accounts just to be nice and just like they did it for me I’ll do it for them, that’s the content that’s going to show up in your newsfeed.

The more you are very discerning and selective as to who you follow and why you follow them, that content will show up in your newsfeed. And so you’ve got to be really strategic with not only what you are posting, but how you are engaging and commenting.

Steve: So in terms of people who follow you that are spammers, is it in your best interest then to block them, because if they don’t engage in your stuff, that hurts your account?

Sue: Yes, absolutely.

Steve: Okay. So let me ask you this question though, when and how often do you go through your account and prune the people who aren’t engaging?

Sue: I don’t do it anymore, because I don’t have time for it.

Steve: Okay.

Sue: But it definitely affects my engagement rate. So if someone were to say, oh, I just heard Sue B. Zimmerman on a podcast, she’s the Instagram expert and you go on and you look at my account and you are like wow! She has 47,000 followers, but you go and look at my post and you are like, okay, so she has that may followers, but she only gets like two to 300 likes per post, like what’s up with that?

Well number one, I don’t pay for likes, some people do. Number two, I don’t hire people in China or India to like my photos, some people do. Number three, I don’t use hash tag automation to get people to do things either. Everything you see on my account is 100% authentic, and so what I tell people is look at the comments that I actually do get and look at the conversation, but more importantly Steve, is I’m getting opt-ins to my list.

Steve: Okay.

Sue: And that is my success measure, and so I come out of these very differently than a lot of people on Instagram who feel like it’s all about, like, oh my God! You got to get the engagement rate where you want. Do I want more engagement? Absolutely, I would love more engagement, but you can’t force that.

Steve: Let me ask you this then, what is your view on using hash tags then?

Sue: Oh, I definitely you have to; I mean hash tags I think the magic is in the hash tags until you are like a famous celebrity or a famous account or a famous brand.

Steve: Okay.

Sue: Famous brands like people naturally follow and have notifications turned on. You don’t have to have such a strong hash tag strategy, but if you are looking to show up in certain conversations and I call them hash tag hubs, you need to be very, very, very strategic with your hash tags, and I do have a hash tag hymn book, Suebzimmerman.com/hh. It’s under $30 and it literary is the 35 top industries on Instagram, and the best hash tags to use that we researched.

Steve: I was going to ask you that question actually. So how do you choose a good hash tag? Are you looking for volume or you are looking for something niche?

Sue: You are looking for the places where the people who you are trying to attract hang out.

Steve: Okay. Are there any tools to help you figure out these hash tags?

Sue: Well, Instagram does suggested hash tags based on the ones that you use, and there are some hash tag tools out there that I don’t pay attention to, because I know how to find my best hash tags.

Steve: Okay, if you can give like one strategy for finding the hash tags that you use that would be great.

Sue: Yeah, so what you want to think about is like, maybe a broad hash tag around the space that you serve. So for me it’s Instagram for business.

Steve: Okay.

Sue: Instagram tip, Instagram strategy, Instagram speaker, Instagram webinar, social media, which is broad, but I’ll use event hash tags like #SMMW17; I’m speaking at Social Media Marketing World. Obviously I want to show up there using event hash tags like #TNCS2017 for Traffic and Conversion. I’ll use event hash tags before, during, and after an event so that I always show up in the top nine. Those are more niche, and I love event hash tags because I definitely want the people at the event to find me and connect with me.

So event hash tags, also location based hash tags. So I live in downtown Boston in a high rise, so I’ll do #Bostonbusinessowner, #DowntonBoston. I also have a house on Cape Cod, so I’ll do #Capecod or #Farlethheights where my house is, and it’s so important to do location based hash tags if you do workshops, and I’m doing workshops on the Cape and here in Boston. So businesses in the area will be like, Wow! She’s local; I need to connect with her.

So there is all kinds of strategies around your location, around your industry, around the products that you sell. So when I had my store and I sold nautical jewelry, #nauticaljewellery, #anchorenecklace, #nientackitredbaseballhat.

Steve: Do you look at the volume of those hash tags in determining which ones to use, or is it just what you think is relevant?

Sue: Both. So the ones that have a lot of people like okay, so Lily Pulitzer and Vineyard Vines, they have like preppy, like a lot of preppy hash tags in there, so you know you really can’t compete with those bigger brands and get seen in their hash tags, but you can get ideas of what would work for your business in those hash tags. So the most important thing to do Steve is to look and see what content is being curated in those hash tags, so that you don’t land in a hash tag that’s all porn or something.

Steve: Okay.

Sue: Sometimes people use random ass hash tags and they don’t even look at what content is being curated, and it’s like OMG! Do you really want your brand to be shown up in that hash tag?

Steve: Okay.

Sue: All the popular hash tags on Instagram I say stay away from. Like #Instagram you know, #likeforlike, #instafollow, #pickoftheday, #outfitofday. Like you and 600 million other people are using those.

Steve: I was going to ask you this question, how do you feel about like for like?

Sue: Nothing, No.

Steve: Okay, you don’t do any of those or share for share or okay.

Sue: Here is what I say, here is what I say Steve, and you can quote me on this. You should never ask for a follow, you should earn it by giving value.

Steve: Okay. Does that imply that you are also against paying other people for some exposure back to your page?

Sue: Yeah, I know people ask me all the time if they can pay me for a shout out, and I don’t. Everything I do is authentic. I am a collaborator and I tag naturally brands and businesses and people that I love. I am not an influencer; I mean I am an influencer. People send me free products all the time, and I do tag them in my posts, I talk about them in my Instagram stories, but I’m not looking to be making money this way.

There are influencer marketers that get paid to post on Instagram, I’m not that person. But it’s an industry and it’s definitely valid, I’m not dicing the industry, it’s just not what I do.

Steve: Okay, and so you would not pay someone to accelerate your account getting larger?

Sue: Never, because it’s not going to be with the right people for me.

Steve: Interesting, okay. Even if there was like another Instagram person out there who specializes in teaching Instagram, would it be relevant?

Sue: There is like 500 people that specialize in teaching Instagram or so they say.

Steve: Okay.

Sue: For me it’s always attracting the right person.

Steve: So let’s switch gears a little bit and talk about content, like if you can provide some tips, because that’s most of the story, right? You have to, yeah.

Sue: Yeah, yes, so yeah, so content, there is two types of content — I’m just getting a sip of water, hold on a second.

Steve: Sure.

Sue: There is two types of content; there is engagement content, and then there is traffic driving content. And on Instagram the content that gets the most attention is the engagement, is the fabulous photo or video that looks so good that it emotionally pulls you in, because you know, it’s making you laugh, it’s educating you in some way or inspiring you, and you are just like, oh my God! That’s so cool or that’s so funny, oh my God! I love that.

And so that’s the double tap, and I say don’t just double tap, like talk to Siri [ph] and say why you like it. Don’t just like do the lazy thing. If you are going to take the time to double tap, take the time to leave a comment, but then there is the promotional post, the post that you are posting to drive traffic to the thing.

So for me right now if you open up either of my accounts, you’ll see a promotional post, a traffic driving post, because I’m doing this webinar. Now these posts typically aren’t as pretty or exciting or interesting to some people to double tap, like, and comment on. However there are people that want to learn about money mindset, and then numbers that you need to pay attention to in your business, so that when I promote a webinar that I’m doing, people are interested, they are double tapping, they are liking and they are commenting.

But here is what the listeners need to know. If you do more engagement posts and less promotional posts, you’ll get the engagement, which means you’ll beat the algorithm, which means more people will see your posts when you are doing those engagement posts, because engagement is all about likes, comments and now saved post. It’s a new feature on Instagram where you can save a post by tapping on the little ribbon on the bottom right of every post, there is a little ribbon like tab that you can save a post, or you can take a screen shot of a post. And so Instagram counts that as engagement.

So the more engagement you get, the more reach you get. It’s not so much about the impressions, but it’s about the reach. And when you have a business account on Instagram which all your listeners should have, you can look at the reach and the impressions for each post on Instagram, and you can promote and boost each post on Instagram, and you can do ads right from Instagram when you have a business profile.

Steve: Do you boost your posts?

Sue: Occasionally.

Steve: Okay.

Sue: So it depends, if I’m in a campaign, yes or when doing Facebook ads. Our Instagram Ads do extremely well because we know all the different elements and Morgan on my team on the SPZ team does all of my Facebook and Instagram ads, and often gets interviewed on podcasts about Instagram ads. So if you want to have her on talking all about Instagram ads, she’s awesome.

Steve: Okay, what was I was going to ask you next? So with your account then what is your ratio of engagement versus promotional posts?

Sue: So I would say once a week I’m doing a promotional post for the strategy guide unless I’m in a campaign. I’ll do two or three a week.

Steve: Okay.

Sue: You know when I was heavily into — I’ll give Marie Forleo as the best example because it’s the biggest campaign that we do. It’s over a month long. Every third post was almost a traffic driving post, either to the training series, to the webinar or to buying B School.

Steve: Okay, and in terms of the engagment, like is there a certain percentage based on the number of followers that you shoot for?

Sue: No, I don’t shoot for anything other than real organic engagement. I really — to be honest Steve, I don’t get caught up in the numbers as much as in the comments and in the conversions.

Steve: Okay.

Sue: I just don’t, it doesn’t impact me that way, because I know I’m attracting people I’m meant to be serving.

Steve: It’s funny, it’s very interesting that we are talking because I had someone else talk about Instagram before you, and their strategy was completely different. They are all about like social proof, getting followers and then kind of driving that traffic even though the percentages wouldn’t be as high, it’s just interesting.

Sue: Yeah, I guess it’s because I’m such a seasoned, successful entrepreneur , and I know that community trumps everything, and authenticity and like I just, I don’t play the follow game, it’s so not my thing and it’s just who I am.

Steve: Can we talk about business accounts for a sec?

Sue: Yeah.

Steve: If you transition over to a business account, do you end up losing anything or is just seamless?

Sue: It’s seamless and I think you gain so much because you gain access to all the insights and the ability to assess how many followers, the gender of your followers, the demographic of your followers, what time of day do your followers engage? What day of the week do they engage? I mean talk about looking at data; you can do it right in the app under each post. You can view your insights from each post, it’s crazy, yeah.

Steve: So when you have this data, does that imply that you’re posting at a specific time also?

Sue: Yes, I know that 12 to 1PM EST is my best time to be posting, that is lunch time for me and then again typically six to eight at night, but it’s different for everybody.

Steve: Okay, and in terms of frequency, like how often do you post?

Sue: I’m finding that the less I post the more engagement I get, because I do show up at the top of the algorithm for a lot of people that follow me. So if I wait things out and don’t post daily, like I say within maybe 30 to 48 hours, I do a lot better with my reach.

Steve: I see, so you post just at most it sound like once a day.

Sue: Yeah, I mean once a day or once a day and a half, every day and a half.

Steve: Every day and a half, interesting, okay, wow! So there’s been other people I talked to that recommend posting like three or six time a day. It’s just very interesting.

Sue: Oh my God! I would unfollow them in a second. It’s too much.

Steve: So if you are looking at analytics that we were just talking about, like which specific metrics do you actually focus on in determining what sort of content that your customers like?

Sue: I’m looking — I used to spend a lot of time in Iconic Square, but now I just spend my time looking in Instagram and seeing what people — like I’m looking at the reach. I’m looking at the reach of my post, like you know; there is two numbers that you look at in your insights. It’s either; the impressions — now the impressions can be impressions from the same person more than once.

So someone logs into Instagram, they see your post, they log, they are doing their work, they go back and they see your post again because it’s still at the top of their feed, so those are the impressions, but the reach is how many people is it actually reaching. Those are the — that’s the number, like how many people is it reaching and what kind of comments and engagement are you getting.

Steve: Okay, and are there any tools that you use to like post on Instagram or manage your accounts.

Sue: Yeah, so I love Planoly, that’s my go to favorite right now, but also Hootsuite is awesome and Buffer, you can use Hootsuite or Buffer. Planoly now has, where you can plan your Instagram stories too. You can schedule your Instagram stories, which is a great new feature.

Steve: Interesting, so when you plan out one of these posts, do you still have to – I actually don’t do it this way, I do it manually, but do they just send you to a link where you actually start to manually approve it before it goes live?

Sue: So you download the app and as soon as you schedule the time there is a push notifications to your phone, it says, “Do you want to post it now?” And you say, “Post now,” and then you just double tap in the description, and then copy and paste your whole description that you write.

Steve: Got it.

Sue: It will direct to your desktop yeah.

Steve: What is your view on photo content versus video content now?

Sue: What’s my view on what? You went in and out?

Steve: Photo content versus video content.

Sue: I do both, I think videos tend to get more, I do a lot, I do animated gifts from my graphic designer. I also do, I also do every set hash tag, every 7th post I have a video tutorial that I do, so that’s a hash tag that I created, don’t go crush tagging my hash tag anybody, #every7thpost is a video tutorial that I teach. So video definitely has a huge, I think more people are interested in seeing good video, I also use the video right within the Instagram app which is the start and go video, which can really be a creative way for you to get content out there. So I do video and I like video.

Steve: Are you finding that it works better than images, or it gets more reach than the posts?

Sue: You know both do very well for me, and very well is so different for every person. I’m more concerned about the aesthetic magazine look and feel that we talked about at the beginning of the interview, and making sure that the content is always on point with who, you know, what my followers, what my ideal customer, client wants to see.

Steve: I see, so you are very concerned with when someone first opens your Instagram account, the layout and how everything comes together on that one page with thumbnails?

Sue: Yeah, I want each post to stand alone as a very, very valuable post, and I want you to be able to look at the whole feed and get a sense of who I am and what I do.

Steve: Okay, so last question here, when you are looking at someone’s account and the account is just bad, meaning there is no cohesiveness or anything, do you actually have that person go and delete like their images and start from scratch, or do you kind of just start from then on posting content that kind of matches the realm? Does that question make sense?

Sue: Yeah, I tell them to download my strategy guide. Yeah, I mean you can either transition into learning and doing it better and say this was me then, this is me now. I think people seeing how far you’ve come sometimes is actually quite exciting, or you can do what a lot of people is delete. People delete posts all the time, they don’t get engagement, or they don’t think is working.

Steve: Is that something you recommend doing, like if a post has no engagement you just delete it?

Sue: I don’t know, it all depends, I think it’s only human to keep things and show people how you’ve improved. I don’t need the social proof every day. I would rather people — I would rather be able to say to someone, I understand where you are because I’ve been there, and you know I’ve been teaching for almost five years now.

So I’ve learned a lot and I’ve tried a lot of different strategies, and Instagram is constantly updating, improving, and making this little app a positive experience for everyone. So I’m all in on Instagram and know that it is absolutely the platform that is most visually appealing to everyone who’s on social media.

Steve: Okay, we’ll Sue thanks a lot. I mean we’ve been chatting for quite a while now and I want to be respectful of your time. Where do we want to send the listeners? You mentioned a strategy guide, you want to just give a quick update again where people can find you?

Sue: Yeah, so first I want everyone to take a little challenge that I do when I do interviews now is love for you guys to come on over to @suebzimmerman if you are interested in seeing my comings and goings on my personal account, and that’s just simply understanding how to create a personal account. But more importantly my business account @theinstagramexpert and @theSPZteam. And the challenge that I like to do on this podcast is to post, to have you guys post a photo listening to this interview, taking a great photo, maybe a #deskie and using the #suebmademedoit.

Steve: Okay, yeah that will be interesting.

Sue: So when you do Sue B made me do it, you will be joined with over a 1,000 people who have taken this challenge, and you’ll be able to meet some other awesome people who have listened to me speak or do a podcast interview, and it’s a good way to connect to some awesome people. So that and then they should @mention your account as well. I don’t know what account it would be.

Steve: It’s My Wife Quit.

Sue: Oh, My Wife Quit okay, so there you go, and so that way Steve will get a notification that you @mentioned him as well, and then yeah, everyone here you should be definitely be downloading my strategy guide which is Suebzimmerman.com/guide.

Steve: Okay, that’s easy to remember.

Sue: Yeah, you got to make it easy; if it’s not easy people don’t do it.

Steve: Hey Sue, thanks a lot for coming on the show, really appreciate your tips, and I’m sure the listeners will find it very valuable.

Sue: Yes, absolutely.

Steve: All right, take care.

Sue: Bye, bye.

Steve: Hope you enjoyed that episode. I’ve actually been using some of Sue’s strategies for my own Instagram account, and my IG fan base has been steadily increasing as a result. For more information about this episode, go to MyWifeQuitHerJob.com/episode 170.

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 SellerLabs.com as well. Their tool Ignite is what I use to manage my Amazon PPC campaigns. Instead of the old tedious way of generating reports and analyzing your ad campaigns in Excel, Ignite aggregates all that info for you in one place and allows you to quickly visualize your data to make decisions fast.

So not only does it save time, but it also makes managing your Amazon campaigns so much easier. So head on over to sellerlabs.com/steve and sign up for a free 30 day trial, once again that’s sellerlabs.com/steve.

And if you’re interested in starting your own ecommerce store, head on over to mywifequitherjob.com and sign up for my free six day mini course. Just type in your email, and I’ll send you the course right away, thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.

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