Customer Experience

Talk-Commerce Nadav Charnilas

Unlock the Power of Your Customer Journey with Nadav Charnilas

Do you want to improve your conversion rates, decrease abandonment rates improve your acquisition efficiency, and spend? Have you ever created a customer journey? Nadav Charnilas helps us to understand and answer these questions and more.

Nadav is with Namogoo. Namogoo helps to maximize each online journey’s potential for eCommerce brands by experiencing everything through the customers’ eyes. The Namogoo Digital Journey Continuity Platform automatically gathers non-PII data on customer behavior, website, product, device, and environment to give each customer what they came for and get everything else out of the way.

Transcript

Brent: Welcome to this journey with Talk Commerce. today I have Nadav Charnilas. He is with Namogoo. Go ahead and tell us what you do in a day to day role and maybe one of your passions in life. 

Nadav: Thanks, Brent. So like you said, my name’s in Navav. I am the director of product marketing here at Namogoo.

Nadav: We’re located in Lia in Israel. I run all the product marketing functions at Namogoo. So that means all the positioning and the messaging and the sales enablement working with product and working with sales and across all the different roles here Namogoo. So yeah, creating all the all the collateral around our different products.

Nadav: As far as a passion is I used to be a passionate runner. I used to run like half marathons every few months, but then I had kids. Not so much anymore. 

Brent: yeah, kids will do that. There’s always time in your later in life to get back into running. So don’t get me started on that. Good. So let’s dive right into customer journeys.

Brent: For just a little bit of background, let’s help our listeners understand what is a customer journey for a brand. 

Nadav: right. So that’s everything. So if you’re a brand or an e-commerce brand it’s everything that your visitors, your shoppers go through from the minute they see, become aware of your brand to the moment they.

Nadav: Go to your website and browse your product and then go to check out and put things in their in their cart and check out and convert. And then even how do they come back to your website and their journey back? So it’s their entire experience from creating awareness about who you are coming to your website, shopping and converting.

Nadav: And then hopefully coming back and creating loyalty. 

Brent: And I know that if you’ve ever, if you’ve ever attended a tech conference or they’re talking about platforms to do this a lot of times as a merchant, you feel, or you could feel as though this is only for enterprise platforms or huge retailers in the world is customer journey good for anybody? Any size store? 

Nadav: Yeah. Every store has a customer journey, right? Everybody does acquisition. Everybody brings people into their site and you wanna, and your shoppers they have to go through a few steps on their journey until they find the product that they want until they realize that they trust you as a merchant.

Nadav: Until they’re ready to. So yeah, everybody has a journey and everybody needs basically optimization of their customer journey because it’s customer journeys are inherently complex. No matter how big you are, obviously the bigger you are, the more complex it is. But the level of complexity, even for smaller stores is immense.

Brent: And what’s, what are some of those challenges then as you move into trying to find out what is your customer journey? 

Nadav: Yeah. So we at Nomogoo we’ve actually been working with, so we started off working with some of the world’s biggest eCommerce brands. And now as we’ve matured and as we’ve grown we’ve opened up our platform to smaller brands, mid-market brands, SMBs.

Nadav: And what we found is that everybody in the market, in the e-commerce market and more so mid-market and SMBs they face I think basically there’s a couple of like segments of issues that they face. One issue is with their marketing stack. One place is that it’s really hard.

Nadav: Everybody wants to move the needle on the KPIs in their customer journey. We even did a survey a while back of e-commerce leaders. And we saw that e-commerce managers, marketers, 75% of them have tools and data at their just disposal, but they still struggle to, to put it all together to act on their customer journey.

Nadav: They have a hard time maintaining that data stack and that marketing stack. They have to work with a bunch of different functions in their organization. Sometimes they’re not always aligned in priorities. It takes a long time. And even when those things are set up, those tools kind of work in silos.

Nadav: They don’t roar in the same direction. They’re all roar in a different direction. So it’s really hard to align those tools around their segments and the messaging, and it creates problems. It creates a very hard experience in actually moving KPIs in the direction that you wanna move.

Nadav: And then the other set of problems is what every e-commerce manager or whatever marketer at an e-commerce company wants to do, which is improve conversion rates, decrease abandonment rates improve their acquisition efficiency and spend. Create brand loyalty and get people engaged in coming back.

Nadav: And what do you do? What are the tactics that you use? What’s the data that you use? What are the segments that you use to move those KPIs in the right direction? And beyond that there’s a slew of other problems, right? So there’s privacy issues now with GDPR coming up or GDPR existing and the cookieless world coming up and and issues around all of that which makes it difficult to use the data that we’ve all been used in using there’s testing issues.

Nadav: And I think pretty ubiquitous around every e-commerce brand is there’s a blind spots in the customer journey. So we don’t know what we don’t know that’s going on in the customer journey. It’s hard for us to see what our customers see within the journey. 

Brent: Yeah. So I think you the two points are the two main points you talked about the moving, the KPIs, improving conversion, things like that.

Brent: The first part of that is there is a myriad of data. And how can you help your marketing professional or marketing manager harness some of that data and put it into a place where you can actually do something with it. 

Nadav: So that’s why we created at Namogoo, why we created something called we’re calling the customer journey operating system.

Nadav: And the way you can think about it is if you think about your computer, you’ve got a bunch of apps on there. But you really couldn’t use them and take advantage of them. If you didn’t have an operating system, it would just, you’d have to know the code, or know which code to go to, or it’d be very difficult and complex.

Nadav: And that’s why, what’s why window Microsoft and Apple, they created operating systems. So you can have one place to go and you can. Use all your different apps, right? So that’s, if you think about the customer journey, it’s very similar, both whether you’re thinking about the different data points that you need to use and all the different tools that you want to use across analytics tools and personalization tools and customer market, customer communication tools, and all these different tools that exist in silos.

Nadav: You want one place to go where you can activate all these different things. So that’s what customer it is what customer journey operating system does. It. It brings in all these, all the data points, all the events and segments that you as an e-commerce manager has have on your site. It standardizes the data for you.

Nadav: So it’s all defined in the same place and it lets you activate those different data points across your different tools, whether within. CGOS which is what we call customer attorney operating system, or across your own tools. So whether it’s Google ads or Facebook ads or something like a dynamic yield you can use your tools with the data that’s already centralized and standardized within CGOS.

Nadav: And that data is also based on, like I said, Namogoo’s experience with eCommerce, right? So these data points are proprietary data points that are pretty unique, right? So there are things like your shopper that comes to your site. What device are they using? What’s the, what’s their internet connection.

Nadav: What’s their device speed strength. Do they have shopping extensions like honey or Amazon shopping, Simpsons built into their browser? So a lot of these things that we usually don’t think about when we’re thinking about conversion and engagement that we found are actually really important to understand what the customer intent is.

Nadav: The shopper intent is whether they intend on buying or they intend on abandoning and taking action on those things. So we’ve built. All these data points based on our huge network of 1.2 billion unique users that create indications of intent of the shoppers. So basically we’ve created an operating system that is one source of truth for your data points.

Nadav: So your segments, your events, your attribute. You can grab them immediately from CGOS without the need of, to talk to a developer or an analyst or any. So you, as a marketer you implement this tag on your site and you get all those things prepopulated, and you can use them across your tools. And on top of that, we’ve also got AI, which bubbles up different insights for you.

Nadav: Whether they’re correlations between data points and KPIs, or there’re interesting things that are happening within your sites data that we kind of pinpoint for you. So I think to your question it’s a long winded way of getting to your question. We make. Working on that data and moving the needle and understanding what’s important and working across your tools much easier than it was before and much more impactful.

Nadav: So you can actually see the things that really make a difference for understanding when a user is intending on purchasing or when a user is intending on abandoning or anything else that you’d like to know about your shoppers. 

Brent: Yeah, that’s fascinating. Even digging into the extensions that they may have in their browser.

Brent: If you were looking at the customer and you wanna know, or you wanna personalize their journey, how do you balance between. Being a little bit too personal to just being anonymously personal. So we talk about the runner example, that this person’s a runner. You give them a group of runner things rather than giving them specific things that are so to them that they’re like, wow, this they’re like watching me.

Nadav: I think that’s something that we at Namogoo were very aware of. All of the data points that we include in in CGOS they’re all cookieless, non PII, so they’re all GDPR compliant. So what does that mean? It means that the data points that we take are not things that are considered infractions of any privacy laws.

Nadav: And it’s all aggregated, right? So I can create these segments based on these data points that are an aggregated to an aggregated point. So it doesn’t become. Doesn’t become like things that I’m showing you like, oh, Hey Brent, this is the exact thing that I know that you like, the color blue and that you’re a football fan or or something like that.

Nadav: So here’s the team that you like and the blue shoe that you want. It’s a lot it’s aggregated to that. So it’s personalized and it helps conversion. But it’s also still mindful of privacy laws and the general feeling of a shopper that they’re not being followed by a big brother type.

Brent: If you’re a marketer, do you want to rely more on the journey platform to bubble down those those segments? Or do you want to have some of your segments come up because you’ve relied on them over time. 

Nadav: so I think it’s a two way street, right? So the beautiful thing here is that you can actually, with CGOS you can import your existing segments from your tool, right?

Nadav: So if you have your tools in Facebook ads, or in your, a analytics tool like Adobe or anything, any other tool that you are working with, you can import those segments into CGOS and then you can export them into your other tools. If you want to. Or you can take these pre-populated proprietary data points.

Nadav: Explore what’s going on with them create correlations with other data points, create new segments and then push them out into your tools. So basically you can both use the ones that you know, or are successful for you, and you can use them as they are across your tools, right?

Nadav: Create that standardization across your tools, or you can use our AI and the things that we pinpoint for you or the things that you find yourself as you explore the data and export it into your different tools. 

Brent: And do you think that a lot of times marketers get caught up or get caught in what they’ve had in the past?

Brent: And let’s just continue with that without analyzing, looking, what is new out there and taking some of that new data in and maybe creating new segments. 

Nadav: Definitely. I think it’s, I, as a marketer can say that I’ve, I’ve fallen into that. I’ve got my same my same segments that I’ve always created based on data points that I’ve always used.

Nadav: And I try to use them again and again. And then the problem with that can be, trying the same thing over and over again, without working. Is usually not gonna be successful. And also trying to share these segments across tools is also usually unsuccessful because you have to redefine them and they’re defined differently across your tools.

Nadav: So I think both having a tool that kind of pinpoints for you, the interesting things that are happening gives you points of data that are new, that you haven’t used before. And. A company like the Namogoo with the massive network that it has knows are impactful for e-commerce brands.

Nadav: And then being able to use that in a standardized way across your tools is can be extremely impactful. 

Brent: Do you have an anonymous example that you can share about a merchant who found something that was surprising that they wouldn’t have normally have discovered if they were just using their automated marketing platform, that doesn’t track all the different things.

Brent: Cause I can see how, if you’re not putting everything into one big bucket or at least tracking everything holistically, how you could really miss out on certain parts of that data coming through. 

Nadav: Yeah I can think of, there’s a few example. I’m trying to think about which one would be probably the best one to use.

Nadav: I think one of the data points, one of the interesting data points that we have is does the visitor have ad blocker on, right? And AdBlockers can be a pain for marketers for a lot of different reasons. One can be, you can be targeting your campaign at these you can be targeting like a Google ads campaign.

Nadav: Or whatever type of ad campaign at shoppers with a, with an ad blocker. And then you’re basically spending money on somebody who’s never gonna see your ad, or you’re running AB tests on ad and that kind of muddies up your data. So we’ve had customers, vendors sorry merchants out there that, that have used that data point to block out those ad blocker, shoppers and improve their spend efficiency, right?

Nadav: Their acquisition efficiency, or to improve their AB testing ability. And that same goes, another data point that we have is is the user in incognito mode. So that, that can be also very, that can tell you a lot about that user. That user is interested in privacy. They don’t wanna maybe they don’t want to answer all kinds of questions that you want to ask them.

Nadav: So you might want to change the way you have forms for them or the different type of messaging that you show. Another type of data point that we have is is is a weather data point. This is the shopper in the general area where they are like, what’s the weather.

Nadav: And we found that different for different products. The weather can affect their conversion rate. So you can see in real time, by the way, all the data points are in real time. And they perform in real time what the weather is like for that shopper and provide them with a different offering.

Nadav: So if you’re selling hats and you know that it’s sunny, then maybe that’s the time to create ads for your hats at that time. Or if you know that there’s rain. Maybe that’s a time to offer free shipping or a free delivery if you’re sending out food, maybe people don’t wanna leave the house.

Nadav: So these things will let you do a lot of personalization in real time with data points that I in, in the research that we’ve done is not something that most marketers use. 

Brent: Yeah. That is really good though. Just jumping back into ulus and maybe the iOS 14. Privacy, things that have come up, it sounds like a lot of the things that you’re doing are naturally things that aren’t gonna be tied directly to some user’s account.

Brent: So you can anonymize this quite a bit, talk about the challenges that now merchants have, who say relied on Facebook ads for their for all their income and how that has really been hindered through some of the changes in privacy that have happened. 

Nadav: Yeah. So I, as we all know, that’s been a huge challenge for marketers.

Nadav: And I think we’re going towards a world where cookies become less and less available, for across different platforms, whether it’s Facebook or anything else. So it’s becoming harder and harder to personalize messaging and ads and even the actual, user experience on your own. Using the traditional means that we’ve always used as marketers or e-commerce managers.

Nadav: And that’s really why one of the reasons we created this solution is we have the ability to, to both anonymize and aggregate our data. And it’s all cookieless, right? It’s all, we don’t use cookies. It’s all session based data that, that is completely in line with GDPR and privacy regulations.

Brent: Just as a privacy thing though, for abandoned carts, in order for you to know that someone has abandoned a cart, they have to be logged in, you have to know something about them to be able to target them, to tell them, Hey, this was in your cart or can you know that they’ve come back again? 

Nadav: That’s a great question.

Nadav: In our product that still works if you are anonymous. So for, in most, I think in most solutions, yes, you need to know that they’re registered or you need to know who they are and collect that personal data in our solution that, because it’s session based. It’s anonymous again.

Nadav: Now if that user is registered, obviously that’s that you’re probably gonna have that data and you can, by the way, you can import that data into CGOS. If you choose to, if you are a vendor, if you’re a merchant and you’re one of our customers and you want to import that the data that you have, that personal data that you have into CGOS that’s up to you, it’s completely customizable.

Nadav: But the data that we provide that’s, autopopulated within CGOS none of that is, is it’s all cookieless. It’s all anonymized. And we can, because it’s session based, we can see things like cart abandonment, even if you’re not registered. 

Brent: right. And you can target them again when they come back to your site.

Brent: Yeah. Okay. Do you see, I think I see Apple pushing towards this really really private world and maybe Google going the other way. Is there, do you see trends from the big tech companies wanting to push one way or the other. 

Nadav: I think everybody’s going in this direction. I think Apple and Google are setting the kind of setting the scene.

Nadav: And I don’t, I personally don’t see anybody going in a different direction and even the and. And I think it’s a, for the world, it’s a good thing, right? Nobody even we e-commerce even we marketers and e-commerce professionals, we don’t wanna be tracked either. And nobody wants to feel like they’re being tracked on a personal level.

Nadav: And that’s why I think solutions that aggregate. And provide you the ability to personalize without kind of infracting on people’s privacy or GDPR regulations is really important. And it’s something that’s gonna become more and more important as the years go by and as, as vendors like Apple and and Google become more and more privacy focused.

Brent: Do you think there’s a way of ever getting around the fact that you’ve looked at, let’s say a running shoe store and then for the next two weeks, all you get is targeted display ads for running shoe stores, or for myself, I get umpteen million Adobe ads because I’m on the Adobe website. . 

Nadav: Yeah, I get the same thing.

Nadav: I’ve got I’ve as a product marketer. I do a lot of competitive research and then I get followed around by every competitor that we have get, I get their ads. I think as cookies become less and less available, that’s probably gonna happen less but there’ll probably be different solutions that are I assume less obtrusive to your into your privacy, right?

Nadav: So there’ll probably be different solutions that are aggregated and put you into different groups that kind of try to predict whether you belong to a group that is going to convert for brand X and brand y. But it’ll probably be a little less intrusive than it is right now. Is there a way to get around it?

Nadav: Yeah. If we use, if you use incognito mode in everything you do if you don’t use WhatsApp and and you stay off that kind of platform, that probably is gonna, you’re probably gonna get targeted a little bit less. But today in like a world with cookies, it’s still gonna happen, 

Brent: yeah, and I guess I was going down the path with this question to lead into, is there a better customer journey or does a customer journey platform in general kind of alert merchants to say, Hey, dial down the creepiness factor. 

Nadav: I think it does allow it, so it allows it allows you to be efficient with your target.

Nadav: It allows you to actually give your shoppers a personalized and relevant experience. That’s better within their customer journey. It allows you to remove blockers from your customer journey, which is a huge problem for a lot of vendors without, yeah, without being like super privacy creepy, without following people around with. All over the place, but still targeting them when it’s relevant. A lot of times, even with the way things are now with a lot of cookies the targeting that you get just doesn’t seem relevant, right? Like it’s not at the right time.

Nadav: It’s not like it doesn’t talk to really, to the, to what you really want. It’s just dumb and rule based, it’s oh, you visited our site. So now you’re gonna get this ad for the next 150 years wherever you go which is inefficient for everybody, like the customer ends up hating it, cuz they, they get inundated with ads that aren’t relevant for them.

Nadav: And for you, the merchant, you’re just spending a lot of time on hands. And that’s why solutions AI based solutions like ours. They we have a prediction engine that can predict when a shopper want intends on purchasing when they intend on abandoning. And you can create different segments based on the different data points that we do that make it really smart.

Nadav: And you can target in real time. Shoppers or prospective shoppers with targeted ads that make sense for them at the time, instead of the blackening their sky with with ads wherever they go. 

Brent: What if you had some advice to give to a smaller merchant, even as they move into maybe medium size merchants, how would you tell them to start looking at or analyzing their customer journey?

Nadav: I think the important part is understanding first of all, understanding, like what are the KPIs that are really important to you, right? What’s the there’s, there are vanity KPIs and there are important, there are KPIs that are really important to you. What are the things that are really affecting your bottom line?

Nadav: Is it conversion rate? Is it average order size? Is it abandonment rate, like where what’s the thing that’s impacting you the most? And where are you? Where do you find weakness? Like where are there big drop offs? Where is there a number that’s lower than you would’ve expected it to be?

Nadav: Try to see your customer journey, both based on those KPIs and from your customer’s eyes. So sometimes when we see the journey from our customer’s eyes, we discover things that we wouldn’t see as in our day to day. Are there blockers there? Are there distractions are there things that are affecting them that we wouldn’t think of in the day to day?

Nadav: And try to act on those things. In real time. So when a customer is facing a problem when they have when they’re, when they intend to do something that, that is either positive or negative, you can find a way to act on that. An example of that for us at Namogoo is another tool that we’ve that we’ve developed.

Nadav: It’s called intent based promotions is a tool that knows to present promotions, to shopper. Based on their intent to their probability of acquisition or probability of abandonment. So if we see somebody that has a high probability of abandonment, maybe at that point, we’ll show them a promotion of X percent off, or if we see somebody that has a high probability to, for, to, to purchase, then we might show them. A lower promotion, or we might not show them a promotion at all. Even if there’s, in other cases, you’d have a site wide promotion that they see. So solutions like that kind of save you margins.

Nadav: Aren’t like a one size fits all solution. I think that makes sense for mid market in smaller brands, right? Because it really helps you be efficient. And get the most out of each shopper that comes to your site. . 

Brent: How about the idea of reducing friction across the entire journey?

Brent: How I, how much importance do you put on that? 

Nadav: That’s BA that’s basically how we started at NA mobile. The original product that we developed was something called the customer hijacking prevention. And that was there’s something called ad injections that come into e-commerce sites.

Nadav: It’s unauthorized ads from competitors or from other brands. And sometimes they. They’ll be attractive enough to take your customers off of your customer journey and take into their own customer journey. So that’s how we started in identifying those things and blocking them where needed.

Nadav: And we’ve developed that into newer and and a broader use cases. Right? So one of the things that I’ve already mentioned is shopper extensions. So shopper extensions can be very useful for you as emergent or they can do things that you don’t want them to do, they can provide coupons or discounts where you don’t want them to provide coupons or discounts or to shoppers that you wouldn’t want them to get discounts, or it can do comparisons to your competitors and funnel your customers to other sites.

Nadav: So these are all things that we’ve been very focused on throughout our history. and we know for fact that it affects a lot of e-commerce brands. And there’s a lot that you can do. You, one of the first things is identifying these things that are happening in your customer journey. And then you can fight back.

Nadav: You can either block them. Or you can analyze when it’s actually good for you and when it’s not good for you and pick and choose the places you block, or you can do something active and engage with promotions that are personalized or messaging that’s personalized. And there’s a lot of different ways that you can interact and with your shoppers to overcome these blockers and these things that are distracting within your customer journey.

Nadav: And there’s a lot of distractions in the customer journey for, I think almost every. . 

Brent: Yeah, that’s amazing. NAA, thank you. Today for this has been a great journey to go through in 30 minutes. At the end of every podcast to give our guests a chance to do a shameless plug about anything you’d like to plug.

Brent: What would you like to plug 

Nadav: today? Yeah, I think I’d like to plug obviously Namogoo and and our platform I mean for if it isn’t clear from from everything I’ve talked about until now, Namogoo is a digital journey continuity platform, and it helps currently over a thousand brands shape their customer journey.

Nadav: And what we do is we make each customer journey fit each and every shopper’s needs. And if all of that has been interesting, whether it’s our customer hijacking prevention, Product our intent based promotion product or our customer journey operating system, which basically provides the underlying infrastructure for e-commerce brands to power their customer journeys in real time.

Nadav: If any of that is interesting to any of our listening listeners and please visit Namogoo. That’s N A M O G O O and learn more and we’ll be happy to talk to you and let you know about our solutions. 

Brent: All right. First thing then, where did the name Namogoo come from?

Nadav: That’s actually, I actually recently found out so Namogoo is, comes from a Hebrew word. Namogoo basically means in Hebrew is a plural of they went away, they disappeared. So basically the solution was for your shoppers, that disappeared because they were taking away because of ad injections or because of shopper extensions and things like that.

Nadav: They went away. They disappeared to your competitors. So that’s the word in Hebrews it’s Namogoo. 

Brent: That’s great. And what is the best size merchant then? What would you like to speak to anybody? Or is there a good fit for your platform? 

Nadav: Yeah we speak to SMBs. All the way up to enterprise customers.

Nadav: If you’re, if you’re a very small brand it, the solution you might not have as much value from the brand because you might not see as much of these interruptions or these things that are coming up. But as, but if you’ve grown, you’re already like an SMB, you have some activity on your site, you have some orders, things like that around a thousand orders, a month.

Nadav: Then you can already start to see value from these products. And we’d be happy to talk to you. 

Brent: Yeah. And I always say in marketing, you don’t get any good marketing until you have some data to analyze, to see what exactly that’s gonna happen. So you can always speculate, but having actual data and volume, there is always a great great thing 

Nadav: to have.

Nadav: Yeah. Yeah. Our data is based both on our, like I mentioned, our huge network of 1.2 billion unique users, but also it. As it’s implemented on your site and the more data you have, obviously the faster it learns and the more accurate it becomes. 

Brent: Nadav thank you so much for being here. Thanks for staying up late.

Brent: And and coming on the show today and I appreciate it. Thank you. 

Nadav: Thank you so much, Brent. And thanks everybody for listening.

Talk-Commerce Evan Padgett

Subscription Commerce with Evan Padgett

Subscriptions are for everyone and merchants need to examine their catalogs and learn what they can be selling constantly month over month. We interview Evan Padgett with Stealth Venture Labs and learn about subscription commerce. Even is a tenured eCommerce executive dedicated to driving performance and growth in fluid landscapes with nearly 20 years of operating and marketing subscription commerce businesses.

Transcript

Brent: Welcome to this episode of Talk Commerce. Today I have Evan Paget. He is the C O of Stealth venture labs. Evan, go ahead. Introduce yourself. Tell us what you’re doing on a day to day basis and maybe one of your passions in life. 

Evan: All right. Thanks, Brent. So Evan Paget, Stealth venture labs chief operating officer here.

Evan: Hitting my 20th year in the industry this year, actually. And pretty much the entire time inside of subscription commerce companies or here at Stealth overseeing the acquisition marketing for subscription commerce companies largely. Been around the recurring revenue model for a long time.

Evan: I spent a lot of time in recurring revenue models in women’s fashion running brands, like just fab and shoe dazzle. With unique sort of membership models there and a stint as the chief marketing officer at a company called thrive market online grocery company mixing the the model of annual membership and, really awesome club prices for organics and non GMO, really healthy foods.

Evan: And then here at Stealth, really just running and building this company, we’ve had an awesome run building up a marketing agency focused on. A lot of the team here coming from vertical inside of brands and we’ve just had subscription commerce brands gravitate towards us. They also tend to do really well in acquisitions.

Evan: My job is pretty much managing the entire company bringing in the team, making sure that with a lot of our bigger clients at the higher level strategies are sound and being met and channel expansion, everything like that operations you name it. I’ve seen it all at this point.

Evan: And that’s what we do here at Stealth have a good time doing it. 

Brent: I’m excited about subscriptions. I think that subscriptions at all agencies should be a practice. We’re gonna learn today how much it helps to drive revenue for merchants. And I think that subscriptions should be the basis for a lot of how merchants are gonna grow their business and help them create better ROI on every one of their products.

Brent: And so maybe dive into what platforms you’re looking at and and how you’re helping to enable subscriptions. 

Evan: What I tell people about subscription commerce and how you’ll get this question just generally, how do you, I jump into subscription commerce. Few things come to mind.

Evan: One, you have to create a technology or work with a technology. So Shopify has several different plugins, personally biased towards recharge as a great option for most subscription type platforms. When I say most meaning a routine monthly billing and shipping a product or some kind of or access to a product

Evan: covers that really well, but there are sophisticated subscriptions that exist out there that could be based off of triggers or different bespoke, timings, or variable pricing subscriptions. That maybe you have parts of recharge. You need a little bit more custom work or there’s other subscription technologies out there to jump in, but the beauty of subscription, and you might hear me say this and I’ll switch back and forth between the terminology here, subscription and broadly speaking, creating a recurring revenue stream is actually the goal. Subscription is a recurring revenue stream.

Evan: But it’s also not necessarily exclusively depending on your product, the end game, meaning you might have a service fee, that’s a subscription. You might have a subscription that is for exclusive access, or if you are a scarcity type commerce company, meaning you have rare things, you only get 50 of them in stock.

Evan: And you wanna say. Paying members get an hour head start, right? That’s a recurring revenue model as well. So a lot of that I’ll switch, my terminology between saying subscription or recurring revenue model, but the point being the beauty of a subscription model and what you’re trying to get to is predictable revenue over time.

Evan: And it’s basically a machine that allows you to have with really good accuracy. Predictability in your business cash flow management of your business. And usually not always, but usually higher lifetime values of customers for you to be able to go out and attract more customers with acquisition marketing, the one who can pay more for a customer.

Evan: And has a better product can usually win them. There’s a lot to unpack there, as I look at it once you’ve determined a technology, there’s a lot of them out there. You need to be thinking about what your recurring revenue model’s gonna bring to the customer. And I can elaborate on that some more.

Evan: What you’re looking for, is a few is like five key things. Your subscription’s gotta have five key things that, that pretty much help it be successful. One passion audience meaning a subscription and recurring revenue model establishes a relationship between a company and a brand.

Evan: And that passion goes beyond something transactional. You really gotta nurture that relationship. You gotta communicate with them about their package, their tracking their shipment, why they’re buying what they’re buying and what it stands for. Doesn’t have to be cost driven, but it needs to be something that sort of shows the convenience or shows the value it brings to their life.

Evan: So that’s one thing. Ideally, the number two thing is you want that audience to be as large as possible best example I could give. And we work with a lot of these. Our meal at home companies, everyone’s gotta eat. Therefore you’re addressable audience, pretty much everybody on the internet at any given point in time.

Evan: If you have a really passionate audience, but they’re very niche. if it’s too small, they can be very hard to find any cost effective manner when it comes to acquisition marketing. But not to say you can’t find them, but then at a certain point you hit. Terminal velocity a little bit more quickly.

Evan: So that’s number two. That’s the second thing you need is that audience to be large? Number three is this is the hardest one I think is having a unique value prop. You can make a, me too company, right? You can do a copycat of somebody else doing something that you like, maybe. Maybe you got a better supply chain or maybe you own the factory, or maybe, there’s things like that could give you a little bit of a competitive advantage, but seeking the thing that makes you different and using that as a claim or as something that you could put in front of customers is critical because when they’re bouncing you against your closest competitor, if you guys are copycats of each other, down from your claims, your pricing and everything, Then you gotta coin flip chance of winning that customer and it’s gonna come down to the other things like reviews or credibility or how long you’ve been in business.

Evan: So finding a unique value proposition that, that says we do this, or we are unique because it’s our own brand and we’re not reselling third party product. I don’t know what the answer is there, but finding something that’s unique to you, that’s number three. With that uniqueness, good unit economics.

Evan: This question comes up a lot. What do I need to be doing? What’s my margin need to be when I’m doing subscription on the internet. And I always say start at 50%, 50% gross profit margins delivered to the customer before you’re before acquisition marketing, before your team, before all that, just shipping the product from your fulfillment center.

Evan: Cost of goods with shipping, with the actual product itself, to the customer’s door, 50% gross profit margins at that level, give you room to grow and scale and throw money into advertising lower than that, you’re gonna find that you struggle to scale your advertising because your CAC, the fluctuations in CAC can lead you into really challenging territory when it comes to your overall bottom line margin.

Evan: And EBIDA And it’s also gonna be difficult to scale because media prices tend to only go up over time, as we’ve all seen those number four, the economics and last piece that you were looking for when you’re building out a subscription, is it needs to solve a pain of some kind. It needs to solve something for the end user to make their life better.

Evan: Meaning I’ll use meal at home again, cause again, I have a lot of experience and this vertical. Meal at home. It’s not just food delivered to your doorstep. That’s a feature. A benefit is you’re now not having to spend time going to the grocery store. You’re not having to fight about what we’re eating for dinner tonight because the food your meals were delivered for the next several days.

Evan: And you’re picking which one you wanna do. You are now creating less gravity for that consumer because they now have something delivered conveniently to their door. And that is now releasing them from a pain that they were feeling before. And that’s that’s one example, but you gotta find a reason why your product alleviates a pain from the consumer.

Evan: And once you do that, you have all five of those things. You gotta really great. Subscription model, I think. 

Brent: Those are five great points. So just keying on the number four, you said having that economics on there A lot of subscription models offer a discount on top of just getting that subscription as an incentive to get it a subscription.

Brent: Do you feel as though there’s some built in economics in there for that guaranteed revenue over time where you might want to at some point dip down to some level. I’m not arguing about the 50%. I think that’s a great value. But having that revenue maybe cut into in the beginning where later on, you might get some more margin and then secondly the idea of a recurring service, a long time ago, we did some work for a music company and we did fan subscriptions.

Brent: So from that standpoint the margin is essentially a hundred percent, there’s no real cost to it. It’s just trying to get money or a Patreon or something like that, where you have a subscription. All you’re trying to do is get revenue for something. 

Evan: Yeah. So the the beauty of subscription and recurring revenue models is I’ve worked in subscription companies where the first order that goes out the door with cost of goods.

Evan: And this is an extreme version is actually negative. We’re losing money. We’re losing money by shipping to the customer on that first order, even before customer acquisition cost, I’ve been in a major subscription company where that is how we started. Our goal was like, Hey, we’re breaking

Evan: even before customer re acquisition cost and team and everything just breaking even that was success for us. But the reason why as subscription, you’re bouncing against an LTV you are buying and optimizing your media against an LTV. And that allows you to be, hypercompetitive even unbelievably competitive on that first order, which is very common.

Evan: Huge discounts on subscriptions on that first order. I don’t think that’s a bad thing because look, you need to get people to take a leap of faith on you. If you’re consumable, if you’re something that you eat, if you’re something that you drink they wanna try you out first, before they jump into could be a year or more of commitment.

Evan: You’re buying against an LTV. And when you’re doing that, you’re looking at, Hey, my average customer. And you model this, we’ll probably talk about this in a minute on the on the financial and how to build up a subscription company, but you have a, typically a forecast model looking at your attrition, your revenue, everything over time, and you come up with an LTV and let’s just say for hypothetical sake that your LTV is $400.

Evan: I would always say, Hey look, do you wanna maintain. A LTV to CAGS ratio of four to one for conservative scale and three to one for aggressive scale, meaning you, you trying to lean into that. You’re not maximizing your EBITDA or bottom line profits. You’re reinvesting heavily back in an increase your media spend.

Evan: And that’s with 50% margin. If your margin’s less, that ratio’s gotta be better, but at a 50% margin, you’re basically saying on $400, LTVs. I’m gonna make $200. I could spend $100 to make $200, and then you have team and everything after that. But at least from there you get your ROI. If you’re an e-commerce company without a subscription element attached to it, you have to be getting that ROI on that first order.

Evan: Otherwise you are just literally burning money and you’re waiting for them to come back. And you might know that customer comes back and purchases three times throughout the year. But sometimes that’s two, sometimes that’s four. And you don’t know when they’re coming back, subscription creates predictability there.

Evan: And you’re not just focused on making sure that oh, I got a customer for a hundred dollars and they bought $400. That’s how it is when you’re doing e-commerce. We do a subscription commerce. You can draw that out a little bit, and that allows you to be competitive in the advertising space and also make sure that you’re

Evan: controlling your downstream revenue. 

Brent: You mentioned the media spend, what out of a percentage of that would be your typical media spend or would be a recommended media spend and let’s just let’s compare to the subscription. Like you’d probably wanna spend a little bit more on media for subscriptions as compared to a one time buy type of product.

Evan: Yeah, I think the generally yes. And I think it’s more about the scalability subscriptions, the compounding effect of revenue over time with subscriptions allows you to have money, to invest to, reinvest into marketing. When you are an e-commerce company without a recurring revenue model behind it.

Evan: You might have months where your ROAS is sitting very comfortably at five or six or seven. And then you’re saving some of that for months when that ROAS is two, three or four. And you’re and then your media availability becomes really touchy, but with LTVs generally being hired with recurring revenue models.

Evan: That kind of gives you the ability to. Can continue to create a sustainable growth trajectory as long as your CAC stays within a bigger range and also you can really just hone in on understanding your customer’s needs and desires and improve your product over time. Where. Most e-commerce models,

Evan: they just have a position in the marketplace I’m and I’m not do on e-commerce models. Okay. There’s still a lot of them that exist and they do really well. I say you really want to unlock revenue potential for your company is find a recurring model to go along or be the primary offer and have regular, e-commerce to go along with it, but just the ability to reinvest into media and control your numbers more holistically predictably.

Evan: That’s the big benefit of recurring revenue models on top of, I, generally I’d say higher LTVs customer LTVs, et cetera. The beauty of it is it’s if you do it right there aren’t any surprises with e-commerce. I find that you could be surprised a lot and those surprises are usually not positive ones.

Brent: It’s just a little bit on surprises. The supply chain issue, especially in the subscription market can be very painful, especially if you’ve had a standard product that you’re selling over and over again. What do you recommend to merchants who have something and suddenly it’s outta stock for a month?

Brent: Does that lead buyers to have to look somewhere else? Or do you just try to source something that may be more expensive and lose money for that month? 

Evan: Yeah. This is probably the hardest part about subscription. And it, the hard part is understanding and seeing the cliff coming because usually the beauty of a eCommerce company non subscription is if your inventory is low for the month, you could just pull back your marketing and maybe your website isn’t as fun.

Evan: Are you. You come up with another angle to get people excited. So they’re not coming back to your website and being like, oh wow, this the merchandise this month is not interesting. But you’re not as primed to lose money. You might lose momentum if you’re an e-commerce company, subscription commerce, though, here’s the rub you usually know pretty far in advance.

Evan: If you’re, unless even if you’re manufacturing your own stuff, running your own supply chain, you’re ordering. Four to six months in advance, unless you have manufacturing here in the United States or locally to your country, wherever you’re at. If you’re ordering from anywhere overseas, you’re ordering four to six months

Evan: usually more even in advance. So you’re tying up your working capital in that product. You gotta give yourself a certain amount of buffer, cuz the earlier you procure your inventory, the more working capital you have just sitting on your shelves in a warehouse, which is important when you’re managing your cash flow.

Evan: The other side of that, if you’re cutting it way too close to being like, oh, it’s gonna arrive in the warehouse on the third and we’re selling it on the seventh. All it takes is a little jam up in the port and all of a sudden you’re like, yeah, Hey we know we’re supposed to deliver and unload on the third.

Evan: They’re not gonna get to it until the 26th of next month. It’s Okey dokey. So when you’re a subscription company, you now have to get ahead of that. And you’re doing something like sourcing product locally. If you have a, the ability to get inventory, if you’re in fashion, for example, you can always maybe find.

Evan: More fashion products that you could throw in your box, but if you’re your own supply chain, if you’re your own first party brand, you might just be low on inventory that month, which means you’re gonna have a huge bump in attrition. You’re gonna have to convince your customers to stick around and say Hey, we have some problems here or you’re paying.

Evan: Exorbitant amounts of money to somehow get that date of the 23rd back down to the 15th. And you’re able to say, Hey guys, we just have shipping delays for a week, not a big deal. But you have to scramble. Now, you usually see that coming usually, meaning, if your boat leaves, from wherever it’s coming from on time or early you’re like, okay.

Evan: And I, maybe you build in buffer time look, we’re gonna get this in the warehouse. Gonna sit there for a. Then, maybe it sits there for two weeks instead of a month, you build in that buffer, but that comes at cost. It comes outta working capital cost, because guess what, they don’t let you get your inventory without paying for it.

Evan: So you have the ability to create cash flow models that answer these questions for you and give you the means to, to create alternatives. But. If you’re not planning. And if you don’t have these check downs between how to get my inventory, how to replace my inventory, what happens? I always like to say always think about what happens if a boat sinks and I’ve been in

Evan: that business and I’d had product that was important. That was on a boat that sank. What do you do? And what plan do you put a place to, to do that, between communicating with your customers, finding alternative product, trying to rush something from somewhere else who knows. But everything comes with a calculated and quantifiable cost and risk.

Evan: And you really have to think about that. The beauty of subscription is you usually see that coming. It’s usually not the last minute. You see the horizon of alright, 60 days from now, we’re really low on inventory. We can find things. We have to act quickly, but we can solve this problem.

Evan: But it’s expensive. It is expensive and you gotta be, you have to have rainy day funds for that. 

Brent: Yeah, I think you keyed on two points there. The first one is you talked about the fashion business and maybe the box model. Compare that to just buying toilet paper where you want to get it every week or every month.

Brent: Actually maybe not even toilet paper, something a little more like coffee, let’s talk about coffee. Because somebody really likes some coffee and you need to fulfill that exact same thing month over month or week. Yeah. Week after week where a fashion you do have the option of of mixing and matching and taking 

Brent: what you have that’s most popular, but also what you have in stock. When you’re looking at the strictly subscription call it the pantry business that another big platform uses how do you manage that? If somebody has something that they really want every month and then suddenly it’s gone.

Evan: Yeah. So depending on the timeframe, you have to do that one, one beautiful thing about subscription. If you’re selling the same product one thing you can do is slow down customer acquisition. If you’re paying I, if you’re doing advertising for customer acquisition and it’s the same product conceivably, coffee’s a good example.

Evan: Like your coffee starter box from the company you order from and your recurring subscription. They have the same, goods in them. And what you do is say, okay we’re gonna be short 5,000 units in two months from now or three months from now. What you do is slow down your customer acquisition cost to say, okay, we, I think we can pick up 3000 units.

Evan: We’re gonna get a little less customers. Now, those less customers I get now are also gonna be less customers later. So you work into the number that you. I think above all my opinion on this is do your best to not upset the customers that you have, the customers you’re going to get. You will get them later chasing customer acquisition,

Evan: and I have a big tirade on this one, is what ends up crippling most up and coming subscription companies and consumer packaged goods. A good example, a practical example outside the one I just gave right there. Your company, and let’s just say your customer acquisition costs $50. Okay. Keep it easy numbers.

Evan: And your payback on that, your media payback periods for most subscription companies. Usually around three months, if you have a healthy subscription, you’re getting fully paid back on your customer acquisition cost after about three months time let’s just say you’re spending $50,000 a month to get a thousand new customers a month.

Evan: That’s a again, easy numbers here. What that means in your company. If you have not done this analysis is you have $150,000 in working capital tied up in your media, right? 50,000 a month, three months until you’re getting a media payback. You are always having $150,000 in media working to, to keep your current pace.

Evan: What I see happen a lot of brands jump in, they have some tailwinds, good news. They’re C is lower. Awesome. They think they wanna dial it media. Hey, you know what? We got the cash spend a hundred grand this month. Sound good, everybody. We all feel good. Great. Guess what? A hundred grand a month,

Evan: for three months to maintain. Now you’ve doubled your working capital for media to $300,000. Somebody’s gotta come from somewhere. It comes off the balance sheet, but uhoh customer quality. Maybe you’re going a little too hard. Maybe they’re jumping on because you ran a buy one, get one promotion and it’s dropping customer quality.

Evan: Even though your CAC went down, your customer quality went down. Maybe you have a little bit higher first cycle churn. Now your media payback’s four months. Oh. Now instead of $150,000 on working capital you’ve created $400,000 in working capital to support your current media. Guess what you also did.

Evan: You bought more inventory because you got more customers that are gonna be coming in 3, 4, 5, 6, 8 months from now, from all the new subscriptions that you’re planning on getting that, and you’ve increased your media spend. So now you’ve committed more working capital to your product. and just because you saw tailwinds and you see an opportunity there, you’ve consumed 500, $800,000 of additional working capital out of your company.

Evan: And what happens if that boat sinks? What happens if your product’s just gonna show up late jams up in the port? No one’s fault necessarily. Can’t really avoid it sometimes. The truck carrying your product, got in an accident it’s delayed a week now. You’ve overextended your company

Evan: significantly. And that leads to people having to do distressed fundraising. They have to go out and get desperate bridge capital because their vendors still gotta get paid. Their teams still has to get paid. They have to still order more product down the road. And they’ve overextended themselves on their own working capital.

Evan: This all comes together with planning your subscription business well makes an elegant machine that is controllable. There’s several levers to do that, but being too aggressive when the grass is green could really end up jamming your business up in ways that and I think if you were to.

Evan: 10 subscription company operates successful ones say, sort of 50, a hundred million dollar plus businesses. They all have that story. Every single one of them has that. We went a little too hard and it blew up in our face. So that’s one thing I always tell people, like plan ahead, but don’t stretch too far because unless you’ve got

Evan: a rich family or rich uncle. That’ll just write you a check by asking them, you could end up significantly crippling your business because you cannot control the market conditions. You can’t necessarily control your competitors. You also can’t control the nature and volatility of a boat on the ocean.

Brent: yeah. That’s a great point. That brings up the question. How do you properly measure and forecast your subscriptions? Is there a model to that? 

Evan: Yeah, proforma modeling, subscription waterfalls. These are terms that you usually hear a lot if you’re into the space, but it’s not very hard to do this.

Evan: It’s just a little bit complicated. Meaning there are a handful of key KPIs. You need to know one, your revenue, of course, revenue per box revenue per shipment, whatever that is for your, for every single cycle. And that cycle could be monthly every other month, every quarter annual. don’t really know, right?

Evan: Every business has its own revenue stream. And you need to be looking at, if I just say, if I use this the most rudimentary example of I’m a subscription box company that sends a box every month and it doesn’t matter what I’m sending in it, but just as go with that, you need to be looking at what is typically referred to as a churn water.

Evan: And another term you hear a lot in subscription is cohorts, and this is all very important. If you’re gonna go out and raise money on your subscription, these are the words that the investors love to hear and understand cohorts, cohort being typically defined as new customers. You get in a month or in a period of time, but typically a month, that’s a fixed number.

Evan: That number doesn’t change. You get a thousand customers this month. That is a fixed data point that never adjusts. You’re always gonna get a thousand new customers in April of 2022. And then by cycle usually month again. In this example, you’re looking at what’s called the churn waterfall and you’re applying churn percentages to each month.

Evan: So your a thousand customers after one month might be 800 customers. And then you apply, 20% drop off there. Then that 800 customers, it may lose 10% of that 800. So now it’s gonna drop to 710 customers you’re gonna lose or 720 customers. It’s gonna lose 80 customers. And that seven 20, maybe you apply another 10%.

Evan: And there’s I have a lot of experience on different types of models, but generally speaking, usually in that first cycle, typically the highest attrition, 20, 25% of all your subscribers gonna drop off. after that 10 to 15% on that second cycle on a monthly cycle. Then from there, you’re usually looking at about three to 5% per month.

Evan: If they stick with your product for three or four months, they’re not dropping off at high clips anymore. As long as you maintain quality service. Now, when you have all those customers and then you have the revenue attached to them, you can now plot your revenue over time, what are you gonna collect? You can also project your inventory demand over time, how much product you’re gonna be selling from that cohort.

Evan: And then you layer on multiple cohorts. So you build a model that says, okay, this is what our customers were in April. This is what they were in March. This is what they were in February. And then you get a final total from every single cohort of all right, I’m gonna. 4,000 boxes this month. And I know if I ship 4,000 boxes, I put three things in a box.

Evan: I need 12,000 units plus or minus for this month in demand plus new customers for that month. So maybe it’s 15,000, whatever your new customer rules are. Now you can track revenue, you could track product demand. You could track you could start applying customer service interactions for workforce.

Evan: That a every thousand boxes we ship out, we get 10 tickets, we have this math, right? So then you know that from sending out 10,000 boxes, I’m gonna get a hundred tickets. So then you know, how many customer service agents you need. Now you have your revenue planned up. Great. Awesome.

Evan: Now you gotta plan out your media. Media advertising. If you’re doing direct to consumer advertising on Facebook, Google, et cetera you’re balancing that with a new customer acquisition cost number. So spending $50,000 at $50 fully blended CAC means something at a thousand new customers. And you’re tracking that as media dollars spend over time.

Evan: You used that revenue model that I mentioned to derive an LTV all an LTV is. There’s different versions of LTV that people use. But, generally speaking, there’s two that make sense. You’re of your gross revenue per customer after discount. So just what you’re gross, getting from them, which is typically referred to as an LTV number.

Evan: And many of them apply their margins after that. So they’ll reduce if you have 50% March and it might say, Hey, my LTV is, $400, but my LTV after cost of goods is $200. All that does is really tell you what you’re dropping further down on your P and L sheet, right? So once you have all that, now you’re looking at trying to layer that into cash planning.

Evan: So this is the tricky part, managing your cash flow because cash is coming in when you’re selling product cash is going out for media pretty much real time, not unless you’re a gigantic. Media partner spending tens of millions a month. You’re not really getting terms with Facebook or anything like that.

Evan: You’re not able to get an invoice at the end of the month for Facebook. They’re not floating that you’re, they’re just hitting your card every thousand dollars you’re spending. But inventory there’s long lead on that and you gotta look out and say, okay, Hey, eight months from now, we need 20,000 units and I gotta buy those next month.

Evan: I gotta make sure I have cash for that. And where is that cash coming from? What happens if it’s a little tight, do I need to slow down my marketing? Maybe you do. You run those scenarios. You start having all of these numbers in place. It’s not an incredibly large set of numbers, but the primary numbers being, cohorted customers churn your revenue per cycle for those customers and your media spend.

Evan: And product demand, those five things. When your product’s gonna hit, you can work backwards and build a cash flow analysis you could build and understand all this from understanding your initial cash balance of what’s gonna go out. What’s coming in. And you do that. You can really manage a business again.

Evan: It sounds complicated. It’s really not. It’s just, you have to be planning far further in advance subscription you’re always looking forward. E-commerce you can find opportunities. I’ve, the drop ship, world’s the most prime example of this, but even just anyone else that’s been like, Hey.

Evan: I go buy a hundred thousand of these products right now at a great price. Let’s just sell ’em sweet. Let’s do it. Drop the cash for a hundred thousand units or something. You’ll spin up a website, do run some advertising. You try to make money off of that. And you close that chapter. Subscriptions just require.

Evan: It’s more like a locomotive down the you’re going down the tracks and you gotta keep it going. You gotta keep it rolling. You gotta pay attention to enough things. The moment you disregard a lever you can end up blowing something up and that’s not what you wanna do. 

Brent: So we have about five minutes left today. If you were to give some nugget to a merchant and they would like to enter into subscriptions, or they would like to find some products that may be already in their catalog. how would you recommend they start to find that right product and start doing subscriptions.

Evan: Yeah, one thing I always say is just listen to your current customers. If you’re an e-commerce company, you already got a company rolling. And it is healthy. Maybe you’re doing five, $10 million a year in revenue, have some money on advertising, listen to your customers. They’ll tell you the things they want on a recurring basis.

Evan: They want to get access early. They want to get. Consumable product, if you sell that they wanna be part of a membership for some reason. That’s not everybody, you’re not gonna convert a hundred percent of your existing customers into it, but listen to your customers. If you already have some, if you’re coming into the market with subscription, I largely say, look at what solves a pain the most.

Evan: That’s the biggest one. What would be the thing that if you had it in your life or, everybody, had it in their. It would make their life easier. If it’s getting food delivered at home. If it’s getting toilet paper delivered at home, if it’s laundry services start there and see if you can build up and work backwards.

Evan: See if the economics works, not everything is meant to be in a recurring revenue model, but I do think that almost every business can create a part of their business that has a recurring revenue component to it. So doesn’t mean that, one of the questions I got asked, we put on the spot, which I thought was literally like mattress companies, right?

Evan: Like online mattress companies Purple like Casper, all them. How do you make a recurring revenue model out of that? I said, look like, yeah, then people don’t need mattresses very often, but would they pay more for, would they pay 50 year, $50 a year for no questions asked replacement? If something happens, maybe, but in that guarantee, the warranty of expensive goods is one of the oldest subscriptions that’s ever existed.

Evan: Could they get on a subscription for quarterly bedding? Like people have not a nice bed. If they were to get new bedding every quarter, that’s seasonally relevant. Again, not everybody would want that, but there’s some that would want that if they bought a bed from you, they want bedding, think about that.

Evan: But try to find something that solves the pain for the customer base that you’re going after. And ultimately that has the biggest applicable audience. If you can find pretty much adults, 24 and over to cater your product to, you can find a subscription stream there that will hit on all of those marks to end up solving a pain, have good economics, create a service and a relationship and, make people’s lives better.

Evan: That’s where I begin. And then on that. And then last piece be adaptable. Nobody gets it right on the first swing. You just, you really just don’t like every subscription brand that exists out there today. Right now, if they’ve been around for more than a year, probably year, maybe two years, they are different than when they started.

Evan: They have a different product line they’ve expanded, they’ve changed. They’ve pivoted their pricing, their service, their quality, all that stuff. Usually for the better know that it just don’t overthink about where you’re trying to get to. But if you see an opportunity, it will evolve with the company into what the market needs.

Brent: I think as everybody knows in the marketing world measure test, and then yep. Do it all over again to see how well it worked. And these are great opportunities that everybody has with every product in their. Online store or in, in retail store, whatever that thing is.

Brent: Like you said, with the mattress, there is opportunities for subscriptions across almost every product certainly is gonna be some that don’t apply. But if you look at what are the big box stores are doing, I think the add-on warranties and add-on products, and I the mattress pillows are a great example of how a mattress company would leverage the fact that somebody’s sleeping to the fact that you could brand a pillow that goes along with their mattress anyways. Absolutely. So yeah, this has been great, Evan. As I close out on every podcast, I give the guests a chance to do a shameless plug about anything you’d like, what would you like to plug today?

Evan: I just say that, if you what I was talking about, curious about how to build out a subscription platform, reach out to me, evan@Stealthventurelabs.com or it’s just Stealth venture labs.com. And see what we’re up to see how we can help. Sometimes we advise sometimes we just jump in and run this business for you.

Evan: Also I’d like to say that we are building out. If you go to our website we have a fully functional 5 0 1 C three, which is really important to us. Something we call our impact lab. where we as a company built a 5 0 1 C three and built a product focused on teaching young entrepreneurs from really tough areas of the country, how to build and launch their own e-commerce business and actually fund with cash.

Evan: Their first $5,000 in media spend After we help them build a website and show ’em how to do all that. So something we’re really passionate about is a developing the entrepreneurial spirit and the bridge to get from an idea to an online presence. So something, if you’re ever interested in donating or helping and mentoring reach out to us about that as well, it said something really important 

Brent: to us.

Brent: That’s awesome. Thank you so much. Evan Padgett from Stealth labs. Thank you so much today. And it’s been a pleasure having you on the show. 

Evan: appreciate it, Brent. Thank you.

Talk-Commerce Andrew Barkan

Faster is Better

Accelerate Site Speed With Automatic Image Optimization:

Improve page load times by optimizing images tailored to the end user’s device with our device-aware image CDN. Start your 30-day free trial, no credit card is required. See how easy it is to integrate your website with ImageEngine.

Try their Image Speed test https://imageengine.io/developers/image-speed-test/

Talk Commerce Rob Holthause

Pros at Subscriptions with Rob Holthause

Brent speaks with Rob Holthause from Subscribe Pro. Rob focuses on helping businesses improve their efficiency and grow their revenue while building a loyal customer base. Rob is a native of Maryland and is proud to call Baltimore home. When not educating customers about subscription marketing and Subscribe Pro’s products, Rob can be found hiking and playing with his Chocolate Lab mix, Atlas. He teaches music lessons on the weekends and plays bass with the popular Baltimore-based reggae group, Can’t Hang.

Subscribe Pro is a subscription commerce solution that enables brands to offer auto-ship, subscribe-and-save, monthly box, and recurring billing programs on the Magento and Salesforce Commerce Cloud e-commerce platforms. They provide a thorough interface for customer service personnel to manage auto-ship or auto-replenishment programs and allow customers to modify subscriptions easily.

Talk Commerce David Wachs

The Robot That Handwrites Thank You Notes For You with David Wachs

How often have you gotten a handwritten note from an online store or a service that you bought something from? I bet you can remember when this happened last. David Wachs tells us about his unique business and his army or robots churning out thank yous and notes in your handwriting (But written by a robot!)

Do you want to learn more about Product Services? Click here

TalkCommerce with Avi Kumar

Optimize your buyers journey with Avi Kumar

Do you know the four ways to add B2B business to your B2C Shopify Store? Avi Kumar helps us to understand some of the complexities around doing B2B on Shopify. We discuss different business models and how you can be successful on your SaaS-based eCommerce store.

Avi is the owner and chief wizard of Invisible PPC, a white label PPC company that is helping agencies break into new markets.

Four ways to add B2B business to your B2C on Shopify:

Keep it simple, offer special Discount codes on the current B2C site for small-scale B2B sales, and/or just testing waters. For more robust solutions consider Third-party wholesale applications. Simplicity and single store to serve B2c and B2B Use Shopify’s wholesale channel if already paying for Shopify Plus. This provides a simple ordering channel to receive B2Bo orders. Finally, a fully separate Shopify online store gives B2B customers the most leeway both during and after the project, enabling, among other things, different catalogs and promotions in different stores.

Trying to go online from the Distributer model, consider these points:

1. Is your distributor willing to buy the product/service online? First test with them.

2. Set a higher price on the website Vs what distributor end retailers can offer? Will keep your distributors/retailers happy and trust us clients are willing to pay higher prices on the Brand site.

3. Offer exclusive products online

4. Exclude distributor Geo from online and go to new areas.

5. Offer a percentage for online sales in their territory, this will buy their goodwill and support for online.

InvisblePPC White Label Google/Bing ads service focused local businesses, a great choice for small agencies working in the local markets. Highly cost-effective and ROI positive to run Google ads for local business niches.

TalkCommerce with Avi Kumar

Optimize your buyers journey with Avi Kumar

Do you know the four ways to add B2B business to your B2C Shopify Store? Avi Kumar helps us to understand some of the complexities around doing B2B on Shopify. We discuss different business models and how you can be successful on your SaaS-based eCommerce store. Avi is the owner and chief wizard of Invisible PPC, a white label PPC company that is helping agencies break into new markets. Four ways to add B2B business to your B2C on Shopify: Keep it simple, offer special Discount codes on the current B2C site for small-scale B2B sales, and/or just test the waters. For more robust solutions consider Third-party wholesale applications. Simplicity and single store to serve B2c and B2B Use Shopify’s wholesale channel if already paying for Shopify Plus. This provides a simple ordering channel to receive B2Bo orders. Finally, a fully separate Shopify online store gives B2B customers the most leeway both during and after the project, enabling, among other things, different catalogs and promotions in different stores. Trying to go online from the Distributer model, consider these points: 1. Is your distributor willing to buy the product/service online? First test with them. 2. Set a higher price on the website Vs what distributor end retailers can offer? Will keep your distributors/retailers happy and trust us clients are willing to pay higher prices on the Brand site. 3. Offer exclusive products online 4. Exclude distributor Geo from online and go in new areas. 5. Offer a percentage for online sales in their territory, this will buy their goodwill and support for online. InvisblePPC White Label Google/Bing ads service focused local businesses, a great choice for small agencies working in the local markets. Highly cost-effective and ROI positive to run Google ads for local business niches.

Aron Stanic

Giving an Inch(oo) in the Magento Community with Aron Stanic

We speak with long-time Magento Community member Aron Stanić from Inchoo. We discuss all the changes in the community over the years as well as the state of Magento and its brand. We finish off with a discussion on the importance of expectations in the client/agency relationship.

Transcript:

All right. Welcome to this episode today. I have Aron Stanić. Aron is a long time a Magento community member. I think at least 25 years. You’ve been in the Magento community. Aron why don’t you go ahead, do an introduction. Tell us what you do on a day to day on your day-to-day life and then maybe one of your past.

Thanks, Brian, it’s great to be here. As you mentioned, my name is Aron Stanić. Currently Exploring what the future calls I was for 12 years employeed Inchoo Croatian based e-commerce agency in true ease, their famous word of famous company in the Magento world, at least.

And so I’ve spent my, my, the most of my 12 years there as one of the co-owners as well. I was mostly working around sales, marketing activities. And I worked a lot with merchants right. Directly with merchants. So one of my passions is you put it so other than e-commerce and you ex in particularly around e-commerce, one of my passions is running.

 I can say him. As much of a passion as it is for you, because I cannot pull off those mileage is I think similar, especially in those temperatures that you do your rounds. But that has been a passion for my wife and myself. We started running actually in 2019 little did we know that habit will actually get us through COVID and pandemic with some degree of sanity.

Wow. Okay. That’s great. Yeah. And I think you’ve been to the big damn run I’m sure I’ve seen pictures of you at the big dam run. So was it the 2019 was your first big dam run or it must be since you started running in 2019. Yeah. Okay. I did run hearing nurse even before that. I used to play basketball actually back in high school and Rhodes college.

 Big run was the one and only for me in front of the 19th. Yeah, it was the first time I was running in the desert and it felt great. It was a great drapes thing. But even before that, I used to have these 5k or three K runs that were in that. Organized that’s various other Magento meetings, right?

So we organized the developers paradise back in 2016 in Croatia. And then we organized to meet Magento’s in Azek, in our hometown hearing in Croatia. So each of those events also had its own small major on as a part of the agenda. Great. Yeah. So let’s talk today about Magento and the Magento association and where the community’s going.

 What you’ve been involved in the association, or have you been involved at some level and what are you, what is your thought on what’s happening at that? Yeah. So I haven’t been formally involved with Magento association as such. I was involved in meat, Magento association, like back in the days, because we were organizing these events and we were constantly not just organizing, attending a lot of these events and we were also parts of some task forces back into the, but now since maybe since plenty, again, like 19.

Around the time. And before Adobe took over completely now, Magento association had its, I don’t think he ever had exact clarity right on, on what it should be after he took over from each Magento association because it was a very turbulent time and it still is around the ecosystem and especially in the community.

And now with the latest The fork side right there that you’ve heard with the Moscow, with the open source community Alliance being opened up. I think that this is very interesting times. I’ve noticed that with the initial Moscow initiative it opened up. And Magento association in a way to organize the task force that we live in big numbers is also then involved in but from the latest things with hero with, I believe on three there, I don’t think he’s that thrilled with how some of the conversations went around the whole magenta and keeping the brand or north keeping the brand within the Adobe ecosystem.

So we’ll see, I’m actually very curious and anxious to see what. Comes back with max, because I was just checking before the call there hasn’t been the official communication from the magenta open source community Alliance, since I believe in the vendor. Because then they were involved with Magento association as the members of task force that was supposed to.

Come up with a way of how to keep Magento community or Magento open source now, still alive, right? In one way or another. I for one would be very disappointed if it, if Adobe just simply don’t give up on on Magento community rights. And I can completely, I can totally relate to a lot of people, especially the contributors through the Magento open source who would feel in a way be betrayed.

Maybe it’s a harsh word, but they have to understand that point because when you’re contributing through an open source initiative, obviously there’s a notion then. Okay. If you’re contributing, if you’re putting your time and effort and it’s free, right. And you know that it’s free Should you expect anything in return?

And I think that anyone who was actually contributing did expect initially anything in return, but with the open source contributions, it’s inherent that there is not necessarily a quid pro quo, but th the sharing you’re sharing, not because he wants something. And not because you expect something back, but it’s understood that by this sharing, it will be better for everyone around you.

You know what I was thinking about it. But when you, obviously, you also have a you’re also our father and father of two kids. One is 10, one is seven. And for them the first things that we are learning, we are teaching them how to. We’re not talking to them about individual ownership and private property and its we’re teaching them.

Really good to hold on to something for the toy or to food or anything that you should share with someone else, not just because then they will share with you, but because it’s, these are the things to do. And I believe that open source is a great way of organizing efforts of individuals and agencies alike to, to add value to any ecosystem.

And over here we have. 12 13, 15 years, whatnot of people really heavily contributing. And now for it all to not necessarily fall apart, but for them to feel like it has not, again, been for nothing. Obviously a lot of people have made a very decent living and have brought their careers on a different path because of magenta and because of what Magento open-source was and still is.

But it’s he has got some other over a bit. They it leaves an author faced in your mouth. And the I’m very curious to see where this is going. I’m actually I can’t say that I’m ha I’m having a preference. Obviously it would be great if Adobe showed That there they understand the value and the strength of Magento can source and to not treat simply disregarded, but even if it happens now, if it’s business as such then I would.

Welcome an initiative that comes up with a fork because in the open-source world of e-commerce softwares, I don’t think that there’s anything still there that can meet that can match Magento’s community and Magento’s feature set. So there are contenders, definitely shopper is one of them, and there has been silliness and others, but no one has.

Really beer. Yes. And it would be a huge waste to just ditch it altogether. Yeah. It’s not only just the feature set. It’s also the ability to add all of your own features without having to have some external service as your feature. In a SAS platform, you’re going to have some external service that connects via APIs.

And the ability to do that inside of Magento is another uniqueness that it has. I have a theory on why Adobe does it, why it seems like Adobe is squashing, the Magento name, or doesn’t seem to care about open source. If you think about all the people now that have, that are making these decisions, nobody at Adobe that’s making these decisions is left from Magento.

All the senior management is Adobe, senior management and their goal is to create a suite around all the different Adobe enterprise products. And have a complete experience for the user. All their products are enterprise products. So it makes sense that Adobe commerce is a part of that suite. And why would they pay attention to anything that doesn’t, that isn’t part of it.

 So if their goal is to get clients that can work in this. In this enterprise suite of products, so experience manager and target and all the other products that make up the Adobe. Their priority and their goals are not anything around, Hey, let’s get people onto a free version of it.

I think that experienced manager is a patchy sling. There’s a free version out there to use. There’s no talk about that. And there’s no community around that and I’m sure that actually there’s probably a small community around it, but there’s nothing that. Resembles, what is the Magento community, which incorporates hundreds of thousands of people.

So I think the mistake that Adobe is making is that they are forgetting where the software came from. And they’re forgetting about the path that smaller and medium-sized businesses will take to get to the point in which they now. And they now will be, could be part of that Adobe suite that would incorporate experience manager and all the other parts of that puzzle that Adobe would like to assemble, to make a complete experience solution for users.

I agree. I agree with that. Definitely been another thing is you mentioned that small and medium businesses might that the open source might be. Path words, they send the price level, but then, and I’m not sure that would necessarily be the case, at least for the majority of small and medium sized businesses that were usually that were original using magenta one to begin with even Magento.

When there were still no thoughts of squashing open or anything while he was still alive and kicking Magento two was still maybe a third too complex and overly robust. That’s pretty much made for the needs of those really small and medium sized businesses. And they make up the vast majority of implementations of Magento globally even now For them, even if Magento stays as such as Magento opensource or some within some other name complexity.

 Losing its complexity is not yet getting it. The lecture of, in the field that Magento one used to have towards the, in the eyes of those small businesses, because they want something that’s fairly quickly set up that they can start selling tomorrow. And even in the pandemic during the pandemic, right there was when the lockdowns.

 I remembered that the BigCommerce had a huge in the UK big commerce had a huge marketing efforts saying you’ll get the line with us in 24 hours. I think you could not do that essentially with my gender, even with some other open source platforms you could, if you had a really good theme and they had all the time in the world just for you, but SaaS platforms suffer a service platform such as Shopify and BigCommerce.

 Took advantage of this type of, not just the pandemic, but also of where Magento 2 went and with all the issues that Magento 2 had in the previous versions and a lot of those small and medium size businesses rolled over. And you can see if you’re looking at BuiltWith or some other platforms, you can see where businesses who used to be on Magento, are now.

I know where did they go? So unless they stayed in that open source, and in that case, they might be still in Magento 2 even still on Magento 1, or maybe have considered Shopware or WooCommerce. If they are really simple businesses, then you have the other ones, the other huge batch that have actually moved away to towards the SaaS Platforms.

Yeah, and I think you’re exactly right. The messaging from Shopify for the longest time has been, their platform is easy and Magento is super complicated. I know that Derek Harlick and myself way back in to. 15 or 2016 did a presentation on getting Magento up and running in 90 minutes and selling something to the audience right there.

 And it can be done, but you’re exactly right. The complexities that are there and the way that the admin is presented gives you everything you need and more. And sometimes just on a SaaS platform, there’s guard rails around it. You can only do so much. You can’t do everything you can do in Magento.

And if you were to say, or even hide some of those things, maybe Magento would be more popular. I know that we had, for a long time, we had the client of universal music and they the problem was that they’re the people that were deciding what they would like in their store knew they could do anything they want.

And when you can do anything you want, and then you run up to the saying, okay, you can do anything you want, but you have to also spend that much time and money to get anything you want. So with a SaaS base, you suddenly say you can get almost anything you want. Here’s what you can have choose from this.

And that. A lot of times it helps people to determine what they need. On the other hand, they promise you other things. So maybe you are limited in terms of the feature set and features and the innovations that you may have, but they promise you your time and they promise you the stability of the platform and they tell you it’s for your own.

 And I can see that, but for example, I think there’s something also here involved.. If you take a look you’re graphically, right? Where SaaS has higher market share.. That’s US. That’s Canada. That’s Australia. That those are your, let’s say single markets countries, primarily while in Europe, where there are a lot of different small countries.

But if you disregard Germany and UK and all of this huge ones, then if you’re a business you’re usually operating regionally, not just now. And you have to take care of various facts you have to take care of multi languages. Multicurrency is, are local regulations. And this is where actually open source gives you the ability and the flexibility that you need even out of the box, Magento supports multilanguage multicurrency.

So in your. And if you think of that then, and connect it with who is leading the now Magento open-source community Alliance. If you take a look at the people, they’re mostly 90% European. Right there, not that many Americans actually, who are involved in that because again, they have either lean towards the view, Adobe commerce and the professional enterprise level side, or they’re in the SaaS business because SaaS makes sense, makes much more sense.

Then it’s much easier to adopt. In a single market, such as you know US. So in that sense, I believe that open source can meet the needs of European businesses still with much on a much higher level than. SaaS can, obviously you can, even the Shopify BigCommerce, you can add plugins that allow you to have, or go with Shopify plus then it opens up and you have the ability of multilanguage multicurrency and all of these things. But in its nature open source is much more flexible and it can respond to. Ever-changing regulations, of the European union in a much better way than then it is the case with SaaS it’s easier at the end of the day it’s much easier.

And it, a lot of Surveys have shown that in one or different researchers that, that ease of doing business in US as compared to you is much higher. So there, there are very little regulations, very little friction. You have an idea or a product you want to start selling online. Do it over here, you have to jump through several hoops and especially then you have to fire an accountant who can explain to you a lot of the details and intricacies about how much can you sell to a specific country and how much then you can you have the tax when you reach a certain threshold and these Northern states can not be done probably as easily as they can with opensource.

I just want to back up to some what you said about Mosca and and there’s two points like the con the most people they decided they’re going to do this fork. And then I do want to talk about the speed of change and the amount of people in those decision-making processes and how long it takes.

So I do disagree a little bit about the fact that the most was, I feel like the most good decision was made in a bubble in Europe. And I wasn’t exactly consulted or I wasn’t on the, I wasn’t in the inner circle in that I didn’t know what was happening until after it happened. And I also realized that there wasn’t an effort to bring it to a broader community because they would like to make this quick, they would like to make this a little bit quicker than if you have more people there’s going to be more disagreements.

 So I don’t disagree that the most initiative is. Is I think it’s a good thing. I think it’s a good thing to keep things rolling. I don’t a hundred percent agree with the fork. However, I do feel like if Adobe’s not going to listen, if Adobe is going to sit, continue to sit on the bench and not recognize that there’s a strong community, that the fork is a great option.

But I do feel like because Willem and the team there recognize that if they don’t do something. And if they try to incorporate too many people that’s speed in which it takes to get agreement on what they would like to do is going to, it’s going to stall and you’re never going to agree on anything, you’re going to be stagnated. So I going back to that, I do want to talk about, I know that Karen Baker has continually talked about the fact that we need to be an inclusive community and she has a lot of very strong opinions. There are also going to be very strong opinions in the opposite.

 And that then turns into stagnation. So how do we make, how do we keep this moving forward without this just being a European centric organization? What’s wrong with it being centered in Europe and just getting a. I do agree with that. We, the notion that the speed is here also very important.

I had a feeling that Adobe is letting the time clock play off, just letting it play out, then we’ll see what happens if it comes to that then we might need three act or not. And I think that you hit the nail on the head when you mentioned that some of those decisions and everything.

From the fact that there are no more regional Magento people left at Magento. So starting with Roy and Yoav and moving towards through generations and generations of these people. Yeah. You are completely correct. So then you have a feeling that The care for this product and for the community is in the hands of the community itself.

You don’t have strong organization or old, either sheep. That’s that has been throughout these years, running this product. And that’s definitely a challenge, but if you don’t know who is exactly calling the shots and how are these people decided, or who decides that they’re calling the shots.

Then you may get into a point where there’s just too much noise and too many distractions for them to be able to create anything. So inevitably in the way I see it, there’s going to be, have to be if the fork is. Really going forward, there’s going to have to be some type of an entity behind it. Leading it, calling the shots and it’s not getting, you can’t have 100% democracy and these things because we didn’t have it. Even when it was still open source within Adobe, within Magento, you still had contributions and pull requests and everything. And someone had to prioritize.

 Yeah, I think what we’re thinking. Yeah. People were thinking the Magento association was going to take over the charge or a. The care for the product, for the open source product. But that was not even the initial idea. I don’t think that was why Magento association at the beginning started.

It was organized through to, again, they grow from Meet Magento association, but to be more a facilitator of networking and then knowledge exchange and those kinds of things. So we are not. Somewhere on defense or in the, in between. And whether someone will step up and say, okay, we’re doing it this way.

I know if they get their livid and then we’ll take it or we’ll give it, if not, I think if this gets dragged on for too long, then the other thing that, that, that works for him. Yeah. And take it or leave it as a good way to put it and sometimes take it or leave it as decided on 51%. So there’s going to be a, there’s going to be a very small minority that doesn’t agree with what you’re doing, but again, these decisions have to be made.

 And I guess the only way to do it is just to wait in the court of public opinion in terms of how the Magento community is viewing it. I do want to circle back again to the European centric because the reality is the reality is that, that there’s a lot of people in America that.

That don’t have any stake in this. They don’t really care. I can probably count on my two hands, the amount of people in the U S maybe it’s more than that, but the people that are that have some, still have some passion about it the passion for Magento is definitely still rooted in Europe.

 The bulk work of Magento is being done in India. Let’s face it There’s a ton of people. There’s tens of thousands of Magento developers in India, but they don’t they’re, their voices is heard in a different way. If anything, maybe there has to be a strong voice coming out of south Asia as well to help push this.

But I think from a commercial standpoint and we always have to go back to Adobe, has a commercial vision for their product and. This open source product fit into their commercial vision. If it doesn’t, we have to help them understand how it can if it and if they’re not going to listen then the fork is an inevitable, but I will say that as soon as that letter came out, I think the next.

Adobe had a post that said, no we’re committed to this product and here’s why, blah, blah, blah. Now the ironic part of that is that, that I can’t remember the person’s name at the moment. But he’s gone. He’s not part of the, he’s not even part of this effort anymore. So again, there’s been turnover and there’s new people that have no vision or they have no history of what Magento has been.

And so they, they have no idea why this should be at all important. And yeah, one more point about the board that the other part of a Magento association is a lot of the people that were involved in that these first two years of. Board level membership are gone. I think Ben marks was on the original board as an adviser.

He’s gone. Guido was on the board and I believe he’s gone as well now. So some of those people that have a strong opinion about where it should go are gone. Yeah. You are completely right there. So what’s the funny thing is that you mentioned India as one of the very important, the areas or regions where a lot of bulk of Magental work and implementations, and even globally is being done, not just in, but from and I noticed on the Magento association page that the next event.

The only one in between a little, two or three events that are left in the Meet Magento ecosystem is the one in India. It should be true to happen in early February. And then it’s followed up by, by Mexico land and I’m not sure what it’s called. We have a Baltics events scheduled for me, so we’ll see what happens there.

 There, there’s still some of those efforts and organizations being, you did mention a really good point. About us agencies, not really getting, not necessarily invested, but involved in all these areas, they don’t see their own benefit. So you with what gentle and. A handful of other agency that I’ve known from these 12 years like Shiro and Creatuity who are based in the US are still there.

But a lot of others were either acquired maybe by some other agents, but Accentures and whatnot, by those larger agencies, or they have also switched right towards other solutions. So yeah that that’s why you see that European centerism and around around so interesting times definatly they have had some, we’ll be we’ll see where this all goes..

Yeah, I think gone are the days of the single Magento agency who only does Magento. Unless you are a a Viamo of the world that has that clout and enough business to sustain that at that high level, it is difficult to operate in there. Just, I think one last point on this, on the American side as these agencies solidify and get bigger..

The management also has a commercial vision of the product and the people who remembered what Magento was and where it came from are also gone. And so from a leadership standpoint, that agencies. If those agencies have no have no recollection of why should happen and their team, isn’t part of that community.

Then there’s also going to be a disparity in how that agency reacts to events. And. Things like that. And I think we’ve seen it. Mainly at the sponsorship level it’s been difficult to organize events in the U S there are assuming it’s a hundred percent going to be a developer event, which it traditionally has been, but like Mage Titans was a good example of how it worked well in Europe, but did not work well in the U S.

Yeah, I know. Yeah, because it was always, let’s put it this way, business oriented rather than community oriented. So one thing that I saw with Adobe’s acquisition, obviously Adobe’s and other companies similar to Adobe, they’re acquiring a lot of different businesses and it’s usual, it’s normal for them to then absorb that product that they have acquired or an agency or.

Within their own system renamed it, rebranded, whatever. I think that Magento is maybe the first one that, that, where Adobe in their own acquisitions felt the pushback, such a pushback from the community. And when you’re talking about in the scale and the real business numbers, five client numbers, This is small.

This is a small piece of apply, but it creates much greater noise. Then it’s probably the worst thing in their mind. I get just think of that someone at the top level saying, okay, what are these guys even talking about? What kind of community open source?

What are we talking about? It’s like, how can we get. Yeah. And why should we care about us as a brand? So I think that the ensemble handle some of these conversations that are also taking place. Yeah. I’m just writing that down. You said, how should we get rid of. And unfortunately it’s partially true.

 They would like it to all go away and their vision of where it should be, I think. Okay. So let’s, we’ll, let’s just close out this topic on the Magento stuff, but I think that if we’ve identified the main problem with the Magento association, Adobe has been communication and Mosca really highlighted the fact that, Hey, if we make a lot of noise and somebody’s going to answer, so Magento association has answered and Adobe has answered. But I think the vision of where Adobe would like to see. The magenta opensource is so muddled that if they were to just come out with a clear statement that would be such a a boost for the community. And honestly it wouldn’t hurt their enterprise side of things.

There’s no downside to committing to something on the open source, even saying even having a public or having some public statements about open source. And saying how important it is to the community. There’s absolutely no. Cause they could change their mind in a year and again, we would be back in the same spot and they would, there would be nothing lost to them because the reality too, is that the enterprise level clients out there who aren’t using community, they don’t care about community either or right.

 It’s it’s developers and at the merchants who are using it and have. Who believe in it that those are the ones that really have something in it. Yeah. He needs. And those third party providers, service providers who lean on to merchants wherever they are. And if they see that there are hundreds of thousands of businesses on a particular platform, that they will create an integration for that particular platform.

 We’re talking about the ERPs or search engines or. Yeah. You mentioned it wouldn’t hurt, but I think that anything that they would come now from Adobe without it feeling. That, that it’s really honest and that they’re substantial. Let’s just follow the process, but that there’s real substance behind me with just know backfire.

 So from my point, you mentioned that the vision is muddled. I haven’t seen that there’s any vision at all. To be very frank,, I assume that the vision exists for them for the open source. And it’s very difficult for someone probably to just come out and say that. Yeah, I think the same thing from the Magento association, I think what we’ve seen is a announcement in, in, around Magento Connect, which I think happened in September, October.

 And and they said that that there’s a commit there. There’s going to be things happening from their side. And that there’s a podcast coming out. That’s gonna help support the Magento community. Actually, they didn’t say what the podcast is a commercial podcast and it’s just advertising Magento as a platform.

 And I don’t know if you’ve listened to it my, my complaint and I’m on the membership community. For the Magento association. Our goal on the membership community is to grow membership, right? And I would think the best thing to do in a podcast is to make a short commercial for the Magento association to join.

And right now it’s completely free. So here’s my commercial right now is go to Magento association.org forward slash join and join it’s free. And eventually it’s going to be, there’s going to be a paid membership, but right now it’s free. And there’ll probably be some incentives if you’re already a member.

That you’ll be a founding member. Blah-blah-blah so that’s my little, that’s my little pitch on why you should join the I think that there, there is a lack of cohesive vision from the Magento association. There is a vision, but I don’t think. It’s communicated. That’s my thought on that.

Yeah. It’s all comes down to communication and it’s probably something that we’ll talk about in the next part of the conversation as well. How important communication you think. Not just between the members of the ecosystem, but in between the relationships between the agencies and merchants.

So yeah, definitely. We know the task force that was established right around the gentle can source. I think that the community likes some, again, some clarity and communication on where the task force is, what they’re talking about. The only thing I believe that we heard that. Those couple of speeds from Wheeler a week ago or something like that.

So yeah, that never seemed. Yeah. So let’s move to agency discussions and communications. A great is a great thing to talk about. What’s your approach from the agency side to make sure your clients are. You know what we did throughout these years, we’ll be okay. We created, we made a lot of mistakes.

We did some good things as well, but th the one thing that I. Strike it as the most important thing in any agency, client relationship any business relationship whatsoever is actually managing expectations now, because if a client comes, if a merchant comes to an agency or looks for an agency, they have.

Be very clear first and foremost in front of themselves, what did these, did they expect from an agency? Do they expect them to be a partner through partner and then they will rely on their advice and then maybe hire them, not just for the technical and for the development part, but also for some of the e-commerce marketing activities or are they just looking for someone to.

The solution. And that’s one of the most important things to have as, as initial conversations. Then you, as an agency could also decide whether you want to establish this kind of relationship. If there’s someone who’s just looking for you to create the technically sound solution, then they will then take over and manage and run them their own.

Okay. Perfectly fine. If we can meet halfway, if the expectations are. Ben’s a great place to start. On the other hand, if you, as an agency are looking for partners or for merchants who we can partner with, who you can grow with and help them grow, then you probably would not be that willing to take such clients.

We, you see early on. They don’t see you again as equals or someone who can contribute to the growth, the bottom line, but just expect you to deliver the code that is floats. So those are the initial conversations. So what are the expectations? What do you expect from this relationship? And then. Even beyond that, obviously you have to talk about the budget expectations and the overall total cost of ownership and within the e-commerce and within, especially with the open source, there’s a lot of education that has to happen from both ends.

 You have to understand the client’s business, but you have to also. The client or the merchant understand options and weighing these options. And then teach them that it’s not a good idea to, to. To overall to over the blow the the installation with 1500 extensions, hoping that because each of them is doing their own part, everything will magically happen.

We’re not in the microservices yet. So if you know that there’s, there has been a lot of a ton of conversations around these kinds of things because they’re that. It’s it comes down to communication. Sometimes someone from the Magento side has communicated that it’s open source, it’s free.

Then you have thousands of extensions on the marketplace that you can simply plug and play. And help your business, help your installation be more complex. And then you have to manage again, the expectations not tell them that it was completely wrong, but explain why it’s not exactly like that.

 And then when you were in that position and did, this is what has happened to me a lot of times, a lot of the times is when you are, have a good understanding of the product, which you should have, if you’re talking to a potential customer or the potential line, You are not avoiding some of the difficult conversations.

Sometimes you are even opening them. If you know that they are crucial to managing expectations properly. And then that puts you in a, why was he positioned? Because someone else is just pitching the solution, right? Someone else is just pitching the product, just the bank. Again, it depends who you have on the other side, if you have personal on the other side, who recognizes that and for understands, and who’s not looking for yes.

People on the other hand, on the other side of the table, then you opened up the doors to do some proper relationships down the road. But for me over the years speeds being a hassle sometimes managing no. Let’s say, and I’m not not saying anything against Magento, but understanding why their marketing and where they buy their sales theme does not know the product really well.

It’s because the knowledge of the product and potential issues and the downsides and the comparisons between others will inevitably Put them in the in the worst position it will not help themselves. If you’re talking primarily about benefits and what the product gives you, and then hand it off to an agency who needs to implement everything that you have promised, and that it’s easier.

The hard work comes down, comes back to you. So the experiences have been you have to prepare, you’re very open, very honest, because at the end of the day, if you over. Someone will end up hurting it will be either your product your project development team, or are you going to approach your manager for them will be in a pickle or inevitably there is going to be issues on the client side as well, because the new solution that you put out will not be what they thought it would be or where they, what they hoped it would be.

 This is where I doing open source in general has to have these conversations with SaaS platforms. Let’s say that the conversations are faster. It’s you have that? It works in that way. Can I tweak it? No. K right then. Yeah, I can. So that means I have to adopt my business model to the platform. Thank you.

They’re leaving again. It’s faster. It’s clear. We don’t know source. You can do everything, but that doesn’t mean you should, right? Because he then jeopardizes the stability of the system. It jeopardizes the business. Model as a whole, if you start doing all too many customization, so managing these kinds of expectations has been in my book crucial for establishing good, solid, honest long-term clients relationships.

 I gave a talk at Magento, imagine 2015, and the title of my talk was what to expect when you’re not expecting. And it was the, you hit on many of the same topics. So education uncom uncomfortable conversations has been one of the main parts of my talks at these events. My original talk was in meat, Magento or Magento live journal.

And my, my thought was I want to educate merchants on what to expect from an agency and how to maybe navigate some of those communication points. And the funny part about that was all the people that raised their hands were developers. You have developers, agencies and murders.

And the ones that are struggling the most are the developers who are on their own, who don’t, who, oh, maybe you’re not, they’re not communication savvy. And I think the makeup of a developer, isn’t exactly how well they communicate with people. Their makeup, a really good developer is a good developer because.

They’re engrossed in their technology. They’re not necessarily engrossed in how well they communicate with the client. So I think you’ve hit them all exactly right on the point. I think that the best thing Adobe could do is have an engineer on a call with a client to help the client understand what they can and can’t do.

But the thing is that happens, especially on magenta. The client will find out they can do it and then they’ll find out that’s going to be 500 hours and they’re like no, it shouldn’t be that much. I want to do it in 200 hours. And then there’s somebody at the agency, a sales person, normally, who would.

Yeah, we’ll figure it out. Let’s get this signed and that’s starting from the sales cycle and you hit it on the head as well from the how Magento used to sell a Magento enterprise for the salespeople start that. And it ends up having to be cleaned up by the project management team.

Yeah. And there’s even that’s, all of these things are coming from us being immersed in Magento as a product for these 10 or 12 years. So you cannot even blame. Some of these people who are actually, they’re also doing their own job, because a lot of those people, especially in the sales and marketing.

Thought or in a different way, or haven’t been directed, is there a job description and then understand completely from that standpoint, that we touched on previous from the business standpoint, it’s about the numbers, right? It’s about the new logos. How did they put it right then your sales, and then someone else has to clean up the mess. And then when you have invested several thousand hours, maybe in. That it’s not that easy to take on that Suncoast motion, and forget about it. Let’s move away and start something in you. Then you’re stuck and. Again, from the magentas standpoint, from the open source perspective of e-commerce softwares, there’s nothing yet there that’s matching Magento.

 So anyone who has a fairly complex website especially if they want to create a lot of these things, even if they’re on, even with the notion that they’re on e-commerce or sorry, on open source, they sometimes feel stuck. I you because they might want to move away from agenda, but they understand that it’s very difficult to them.

Replicate that. Yeah. And sometimes impossible. Yeah. So I just we only have five minutes left, so let’s we have to close out. Unfortunately we have to close out this conversation just to recap what you said earlier the expectations of the client should be should be, you should learn those that the agency needs to learn the expectations of the client at the start of the project.

I’m an advocate of bringing the sales person in, because oftentimes to this, the client will say I was promised this and what the client hears sometimes is different than what the sales person says. That’s all just meeting expectations and then education, I think is what you said next. So listening to the client, helping them understand the way things are going to go.

And then also helping them to understand. So the client has to do some education and we have to do some education as an agency. And then I think that just to key in on that, what you said about having those difficult conversations and making sure you talk about that. As soon as you can, because the longer you wait, the longer there is for that time to pass.

And the client say you should’ve told me this a month ago. We could have dealt with it. Then none of the waiting around is going to help anybody. Is it did I summarize what you said earlier? Pretty well. Perfectly. All right. So Aron, what is, so you just briefly, what what is your future look like?

 What are you planning on? I got, as I mentioned, I’m on my way out I’ve been having some conversations over these past several weeks with again, with some of the members of the community I’m taking some time off even though with restrictions now in Croatia, both colleagues, some online classes with the kids.

It’s not a sabbatical, it’s not really a relaxing time. But still it gives me some times to Re-evaluate what I have done over these 12 years see some of the things that I love doing see some of the things that I might not want to do again. And then I know the easiest way for me east of stay around e-commerce ecosystem, because I know like that in terms of weather, whether it’s going to be.

Similarly agency experience or something completely different fairly open to new experiences in that regard. Great. And as I close out I was give everybody an opportunity to do a shameless plug to promote anything you’d like, what would you like to promote today? Okay. I haven’t actually through things.

For one 12 years is 12 years. Hey, so each crew.net, I N C H O o.net for anyone who is looking for a solid or grave Magento. That’s you don’t have to look elsewhere. They’re still a great team who can handle any kind of Magento project. Other than that I’m based in Croatia, leading creation.

So great shot, especially is no fraud, especially in the U S for Fritzy and for the nice beaches. But one thing that, that has really been a good thing or. Past year or so throughout the pandemic is that the Croatia has opened up for these are the non digital nomads, right? So you have you, right?

So that’s the freedom of movements or anyone can work, travel anywhere, bar the COVID restrictions. Other than that Gratiot has starting in 2021 and starting to get digital nomads. It’s a perfect for any Nani resident, primarily for us people to stay, to live in Croatia for up to 12. No, no questions asked.

So it’s a permit for a long-term state. And this is being done. And this is being taken advantage of by a lot of us actually residents who are traveling, who have found, and it’s fairly affordable to live in Croatia. And there are a lot of different homes who are offering that type of long-term state options.

So if. In Kingsville for remote work and you’re looking for a country where you can actually live on a in a much more affordable way with your celery and learning from the states, from anywhere else in the world, and still have a great view. They take a, I dunno, take a swim in March if you want to.

So there they’re really great options for Nani residents or anyone who’s listening. You should visit DNA Croatia dot. So DNA, crayfish.com. That’s these are the no men’s association of, for creation over there. You can learn a lot about what it takes to travel, to come live in Croatia and work for your current employer or for yourself, if you are a freelancer.

So this is a great place to be. And if you do decide to come no, feel free to give me a call. Maybe we can meet for a coffee or. All right. That’s fantastic. And we cannot swim here in our lakes and March. In fact, yesterday I was out around the lakes and there was a whole group of people doing kite surfing which was really cool.

And it’s not surfing as you would think. It’s on a big frozen lake and they’re going across this lake probably 60 miles an hour with there’s both a wind surfing on the ice and there’s kite surfing. For if there’s no snow, if it’s just straight up ice, you can go more than 160 kilometers an hour on the ice.

It’s crazy fast and no more than a hundred miles an hour. Anyway, You don’t care if it’s fluid or solid, you just pull up. Yeah. Right now it’s all solid. It’s going to be solid until March our lake. We can run, we can walk on our lakes from December, until March anyways. Not a plug for Minnesota. If you like that winter outdoor lifestyle, that is a great place to be.

So anyways, Aron, I really appreciate you being here. It sounds like we’ll have to do a co we should do a follow up conversation with the, with your next chapter in life. And we can continue to talk about how we can improve Magento association and the communications around it so much for being here.