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Unlock the Power of Your Customer Journey with Nadav Charnilas

January 6, 2025July 13, 2022 Brent W. Peterson

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.

Subscription Commerce with Evan Padgett

April 14, 2023July 5, 2022 Brent W. Peterson

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.

The Evolving Landscape of SMS Payments with Osa Gaius

May 29, 2024June 28, 2022 Brent W. Peterson

How do merchants transition from email to SMS? Osa Gaius walks us through some large issues around regulation and also issues around just understanding as a brand, and how to leverage SMS the right way. We talk about how to not make your consumers upset when you send them communications once or twice a week.

Osa strongly believes that great technology should empower people. This stems from the fact that he grew up in Nigeria with little exposure to computing. That experience has fueled his passion for elegant and useful software products. Osa is the CEO and founder of Parrot, a mobile payment platform bringing customers closer to the businesses they love.

Transcript

Brent: Welcome to this episode of Talk commerce today. I have Osa Gaius Osa, go ahead and introduce yourself. Tell us a little bit about what you do day to day and one of your passions in life.

Osa: I’m the founder and CEO of Parrot.

Osa: We are a SMS payments platform that helps merchants collect money directly over text. I got started working at MailChimp and that’s where I really became familiar with e-commerce space. When I’m not working on Parrot and running the company, I spend most of my time making hip hop music and really hiking here in San Francisco.

Brent: That’s awesome. So today we’re gonna talk a little bit about texting and the importance of texting. Why don’t we dive into that? I know that I’ve worked a lot in emerging markets and texting is much more important than it is here.

Osa: Yeah. Yeah. Spot on. And that’s been my experience before starting Parrot.

Osa: Like I mentioned, I worked at mechi and while at MailChimp, I went back to Nigeria where I grew up as a kid. And that’s where I really got to see exactly what you’re describing, which is merchants and consumers in Africa and in Asia using texting as the primary way to communicate with each. But also to transact and buy and sell goods.

Osa: And so when I came back to the us, what I really tried to focus on was how do American merchants over the next 10 years transition from email to SMS and the biggest challenges there we found were, large issues around regulation and also issues around just understanding as a brand, how to leverage SMS the right way and not make your consumers very upset when you send them communications once or twice a week.

Brent: Yeah, I think you, you keyed in on a really good thing there making him upset because I think people are still well and Americans, anyways, I think C SMS is their private little zone. How do you get around that to help them feel comfortable with getting a SMS message?

Osa: Yeah, I think the biggest challenge that a lot of

Osa: merchants are gonna have when they try to text consumers, right? Their customers for the first time is making sure that they treat SMS as a sacred channel. I think how you just described it is perfect. A lot of consumers see it as a private space. They see it as a place where their friends and families can communicate with them.

Osa: They don’t see it as an email inbox where anyone in the world, including spamers and fishers and bad actors can get. SMS really feels like where I’m talking to my mom or where I’m talking to my best friend and having a random brand that I’ve never shopped at, or I don’t care about trying to get into my SMS conversation feels like an invasion of privacy.

Osa: It feels like someone’s bothering me. And so what we recommend for brands is think about how you would communicate if you had your best customer in front of you. Like not over an email, not over Instagram, but if you had them literally in front. What would you say to them? What would that conversation look like?

Osa: And we think that if brands start there and if you write down that conversation on a piece of paper and you text it to yourself as a merchant, that’s gonna radically change how you approach your SMS strategy. Because now you think about it as a person, communicating with a person rather than a brand shooting campaigns or dumping advertising into someone’s phone and the brands we work with when they do that, they’re able to leverage SMS in a radically different way, by starting from the human perspective.

Brent: Yeah, that’s a good point. I was on, I was involved in a CRM demo yesterday and it was it was more of a retail CRM. And SMS was a bigger part of that. I would say the only thing, they didn’t really do what I thought they could have done better was to separate out that sacred part of it.

Brent: They did add SMS, just like email. May, maybe you could dive into the differences between email and SMS and maybe some of the reasons around why email seems to be less popular.

Osa: Yeah. I think one of the biggest challenges of email is, when we started and when I came to America 20 years ago, It was pretty uncommon for businesses to email you.

Osa: It’s a few and far between maybe Amazon was one of the main merchants who would email you back then. But you fast forward 10 years and I’m, out of school I to start working and now there are so many companies like Melham constantly contact Klavio who just specialize in email.

Osa: And the real reason there as you called out is emails seen a massive rise, right? It’s the primary way that businesses choose to contact their customers both before and after they Purchas. And the challenge there has been email is non interactive. And so you’re really treating the email inbox, like a space for advertising, very similar to the actual physical mailbox in your home.

Osa: Like you just, you put stuff in there, businesses put stuff in there and they hope you look at it, it’s not really intended for you to respond to you or even to really interact with, and the challenge with SMS. one out of 10 emails get opened. So you, as a business can be cavalier about what you put in the email, because it really doesn’t matter to be honest, if only one out of 10, people will ever open it.

Osa: But with the challenge of SMS messages is nine out of 10. People will read a text message, you send them. And so while that may be exciting, because you can now put, a discount code in front of them or a sale in front of them, it can also be annoying because nine out of 10 people are gonna see that when they’re driving their kids to work or to school, or when they’re driving to.

Osa: And they have to feel like whatever you put in front of them is gonna be life changing or it’s gonna be exciting. It’s gonna make ’em feel like, Hey I really want to deal with this brand. I want to communicate with them or ideally I want to respond to them. And we think that’s the biggest challenge people are gonna have as they transition for email is.

Osa: Although email open rates are significantly declining. 10% compared to open rates or SMS, which are 90%. We think there’s a bigger challenge if you screw up SMS because a lot more people are gonna see it. And that’s something you, you can’t really recover from

Brent: that interactive portion of it,

Brent: do you equate that a little bit with how brands will go out on social media? Then they’ll put out a message. People respond to that message, but then the brand never responds back or they don’t interact with that message. Is that a danger that people have with texting that nobody’s gonna come back to them?

Brent: If they do

Osa: respond? Yeah, we think that’s a major issue that brands have to think about, if email was great because people knew they couldn’t respond, a lot of emails would come from no reply@brandx.com. No reply@nike.com. So consumers were trained to never interact. Whereas with social media, consumers feel like, yeah, if a brand posts something on TikTok, I should be able to comment.

Osa: And hopefully the brand will get back to me and say, they liked my comment. If I ask for, if I give some review or some feedback, or if I post some user generated content on social media, I expect the brand to engage with me and a lot of brands to your point, just ignore that, right?

Osa: They don’t have anyone to deal with it in the case of SMS. I think a lot of brands are saying if we can interact on social media, we definitely can’t interact over SMS. So let’s just ignore any responses. We get to our text messages and we think that’s a really bad mistake to make. Now you’re training consumers who are used to ignoring your emails to also ignore your text messages, because it’s not a conversation it’s just honestly spam.

Osa: And we think that the right way to approach it is to take a percentage, right? Maybe it’s 20, 30% of your customer care time. The time your support reps would spend on gorgeous or Zendesk, just like dealing with customer feedback and then put those people on SMS conversations, help them, learn how to respond to customers or engage with customers, especially your VIPs.

Osa: Over text, because those are the people who you want to be in a conversation with in real time, especially when you know, there’s an issue with their order when you want their feedback on something, or when you just wanna let them know about something very exciting that’s happening with your business.

Osa: We think that’s the right way to be thinking about SMS, as opposed to treating it like an email inbox where people can expect no responses.

Brent: Do you think some of the. So I think SMS is fairly common in the financial institutions, at least just to get updates and things like that, but there is no, there, I think they’re pretty explicit as well about saying you can’t reply to this.

Brent: You can reply to say stop, but otherwise this is just a tell you that something’s happening. Does that sort of cloud it for merchants who would like to use it more as an interactive channel?

Osa: Yeah, I think you raised a gray point around financial institutions. I think those. For me when I went to Nigeria and came back, what I realized was that the financial institutions in the us, particularly the credit card companies and the banks were using SMS the best way, in the sense that when something is wrong, when capital one, for instance needs you to confirm that you indeed trigger a payment on an e-commerce store somewhere or at your car dealership, they’re gonna send you a text and say, Brent, did you actually mean to make this purchase and you as a consumer have to respond one to that text message from bank of America or capital one.

Osa: And we think that’s one of the best examples of interactive transactional texting, right? Because it is a transaction, your bank needs to know whether or not they should treat that thousand dollars charges, fraud or not. Or whether that she let it just happen. And, you can continue on with your day and you’ll notice that when you do reply.

Osa: Yes. Yeah, it was me. I was the one buying the. They’ll always say, great, we’re gonna let the charge happen. Or we are gonna block that charge. Please try again, in five minutes or so. And we think that for a lot of brands, that’s the way to be thinking about, responses from your customers is when you’re texting them, you want them to be able to make something happen in the world.

Osa: By responding to you, whether that’s, getting points or store credit for responding to you with a review, whether that’s confirming yes, they do wanna buy something that was previously sold out. That’s we, that’s the way we think the branch of approaching this is treat it like you’re a bank.

Osa: Like it’s a sacred, very important moment. When you do text someone and they should be able to get value out of it by responding to you. If they can’t get value out of it, by responding to. It starts to feel like you’re bothering them anyway. Whereas in the case of the bank, I’m getting a lot of value, I’m being protected, but I’m also getting to confirm a charge that I want it to actually happen or stop a charge that I did not want to happen.

Brent: The so the banks versus merchants that may I let’s just say that financial institutions are pretty good at not abusing it, but. my experience with some merchants have been, Hey, sign up, get a 20% discount code for SMS.

Brent: And then pretty soon I’m getting an SMS message every single week for something that I’ve already purchased. And it’s a super annoying, so right away, I’m like, okay, I’m gonna opt out of this list, cuz this is crazy. I don’t need to, I don’t need to get a he phone email every week I bought your headphones, right?

Brent: I’m not gonna buy another pair. There has to be an awareness as well by the brands when to overuse it.

Osa: Yeah. Yeah. And one of the things we felt longer part about and still think long and hard about is, why do brands abuse it? Cause I think initially our response to brands when they came to us was, no, you can’t use us because we can tell you’re gonna abuse it.

Osa: And we kept asking them, why are you abusing it? What’s missing for you. And I think the first thing that we found was that a lot of these brands. They do email marketing or even SMS marketing, to be honest. Their retargeting is very I’ll use the word non-smart right, because they don’t actually know that Brent has bought the pair of headphones.

Osa: When they’re texting you, they don’t know you bought a pair of headphones when they’re emailing you. They pretend they do right. Cause they have some segment somewhere in Klavio. That’s supposed to indicate that he bought before, but they don’t know what you bought. They don’t care what you. They’re just gonna shove as much stuff into your inbox, which could be your phone or your or your email inbox.

Osa: And they’re gonna hope and pray that you click because the brand, in the case of the performance marketing manager or the, the director of marketing is only tracking click throughs, they don’t actually track. Did Brent open the email and engaged? Did he respond to the email? Did he transact based on the email and that’s unfortunately how they’re treating SMS?

Osa: It was like, we don’t really care what Brett. We just know he bought one time. So he’s more likely to buy again. Let’s just shove, whatever we can in front of him. We hope to God, our click through rates are high. But when we asked the brand if you were the bank if you knew that Brent had a credit card, like right next to him and he could confirm he wanted to buy something from you over email or text, would you still send him the annoying emails?

Osa: And they said, no, of course not. Cuz if I know what Brent bought and he was in a. I wouldn’t sell him a pair of headphones. Again, I would sell him some accessory or some new thing we’ve got. And so I think for a lot of brands, that’s the right way to think about SMS is, it really is one to one.

Osa: You should know what Brent has bought, and you should know what you’re putting in front of Brent at 9:00 AM in the morning. Because if you don’t, then it’s gonna feel like you don’t know what you’re doing as a brand. And Brent is gonna unsubscribe. And we’ve seen that in the data, right? The brands that do SMS.

Osa: Have low unsubscribed rates, the brands who don’t have extremely high unsubscribed rates and SMS ends up not being a good channel for them six months after they start.

Brent: I think that unsubscribe thing is a great kind of topic to go down. There is rules around or there’s best practices let’s say around email and how often people should get emails.

Brent: It has to be. Even more important to learn and know what this is for SMS. So what is your advice to merchants who are sending and how many you should send and how often?

Osa: Yeah, so you know, where I’ll of start is by just giving folks an overview of the regulatory landscape.

Osa: There’s really only. Law that matters when it comes to SMS, particularly within the us. And that’s the telephone consumer protection act or the TCP. And a lot of merchants I recommend, go to Wikipedia, just spend maybe a few minutes glancing over the TCPA overview they’ve got there. It’s really good.

Osa: And the thing that’s important about the TCPA is that it highlights a few important rules for merchants, right? Because they, the government in the us knows that people will love to use the phone as a way to get in front of consumers. The first rule a mentions is that you should. Aim to only text consumers between 8:00 AM and PM third time.

Osa: That, that can be difficult if you don’t know where your customer is. If you don’t know where Brent is, you may be emailing or you can be texting him at the wrong time. But 8:00 AM to PM is a general guideline. The second is that unless you have explicit opt-ins so unless at some point you can verify that he, the consumer gave you their phone number and said, yes, I want to get text messages from.

Osa: unless you have that opt in, you have to pay $500 as a fine, for every text message you send for that person. That’s not for every, every time the person says stop, but every time you actually text them. And so those are the kind of two, like regulatory things. You gotta keep in mind. When you start texting us, you gotta have opt in and you really should honor that 8:00 AM to 8:00 PM.

Osa: But the question you’re asking is if I’m honoring those two basic rules, how often should I text people? Some, providers who do SMS marketing and have an incentive to make you text more. We’ll tell you that you should text people twice, three times, four times a week, because that’s mostly what you’re doing over email, right?

Osa: You’re just hitting their email inbox every day or every other day. What we recommend is you actually do not do any of that. You should really only text people at most, twice a month. And the reason we say twice a month is because if you’re texting someone more than twice a month, it means that they’re buying, they intend to buy from you more.

Osa: Twice a month. And if you know that they’re not gonna buy from you twice a month it’s a little weird to text them. Because at that point you’re really just tweeting their inbox, like a spam folder. And it’s not a spam folder. It’s the spam folder is the email inbox. So use that for more heavy weight communication, sales and things like.

Osa: But the real reason you should put a text in front of someone is when you want them to take an action. And that may mean, you’ve got a 50% off sale on your site. Cool. Like we get it. You should text that to everyone, but otherwise you have to really be judicious about what you put in front of people.

Osa: Now, maybe in five years, it’s gonna change because consumers will have a spam folder on their phone as well. That automatically gets silenced. That doesn’t trigger notifications. But until we get there we recommend you treat every communication you send over SMS is mission critical. And that may mean you have to spend extra time on your campaigns and be a little more judicious, but it’s really worth it to do that because nine out of 10 people will read your text message and will be able to ideally take an action.

Brent: The spam folder thing, I think for 20 or 25 years now, people have been saying email market. Or email is gonna die out. Do you think that email marketing is ever gonna die

Osa: out? Yeah I the interesting thing with regards to email is, for a lot of brands, it still works right. For a lot of brand. It makes a lot of sense, because I think a great example is if you’ve got a hundred thousand people on your email list and you can guarantee. 10% of them will open that email and interact in some way, right? Whether they click through for sale or they click through for restock, that’s not bad if you’ve got a hundred thousand people on your email list.

Osa: And so I think brands who tell us that email is working for them, have a massive email list. Some have a million people on their email list because they’ve just built that email list through various tactics. They might have bought some emails. They’ve got a large list. The challenge in SMS is war.

Osa: SMS is not cheap, right? It costs you money to actually send a message to a consumer. Second, you can’t buy any phone numbers because that’s illegal, right? You can’t buy phone numbers and just start email, start texting those people. And so we think that for brands, it’s gonna take you a while to build a phone number list.

Osa: And so it’s really important to not compare email to SMS in the same way, because you can get away with a lot more over email. You can get away with a lot more spam, right? To be honest, because there are no significant fine. as you would in SMS. And so for brands who think emails working I would, recommend that they think through, okay, if emails working today and it continues to work for another year or two, the real question for you should be if your open rates are around 10, 20% today, can you project out?

Osa: Can you forecast with your open rates are gonna be in five, three years, cuz if you can do that and it holds for you then yeah, you can continue using email and only leverage SNS once in a. But if you know that email is already dying for you, if your open rates are sub 10%, then maybe it’s time to start mixing in other channels and thinking about what are we gonna do when email eventually fades?

Osa: Because it’s not dying tomorrow, but as we can see with gen Z and millennials the open rates continue to decline for those emails.

Brent: Yeah. And I think it’s from a marketing standpoint, it’s always good to try other channels and test and make sure that it’s working. I do want to pivot a little bit to, we talked a little bit about CRMs.

Brent: I know some, some brands that have done well, or let’s say airlines, some of the airlines have done well with messaging and they’ll move you to SMS and you can talk to an agent directly through SMS talk about how brands can use from a customer service standpoint, their SMS to really get

Brent: better at helping clients. Yeah.

Osa: Yeah. I think, if you go back to the bank example, when there’s an issue with, a payment it’s very common for capital one or any of the other credit card providers to send you a text and say, Hey was it you, we think that’s a great example of automated customer service, right?

Osa: Because there’s a real issue, if you don’t respond to this. we’re gonna treat whatever happened in the world as fraud, or we’re not gonna treat it as fraud, which is even worse because now we’re letting the charge happen that should have been stopped. We think that’s a great example of customer service because the consumer needs to do something right.

Osa: May take an action and it’s dire it’s mission critical. And in this case, the financial institutions have been able to leverage texting to do that and have been able to automate the texting. Because that way you can happen in real time, a human being doesn’t have to actually message you when there’s.

Osa: And we think that for brands, that’s the right way to think about customer care is what problems are mission critical for your business? What things do consumers need to know about vis-a-vis, their order vis-a-vis a review about your business even, right? What kinds of things are gonna be critical for your business or critical for the consumer and how do you move those away from the email inbox where people might not even respond or might respond late?

Osa: Might not even see. Into a channel where people are gonna say, yeah, I’m ready to solve that problem right now with the brand or I’m ready to respond to the brand. And the immediate things we’ve seen are around customer care. When an order is fundamentally messed up, right? When something’s significantly late, that’s a place where you want to get in front of the consumer as quickly as possible and say, Hey, we’re here,

Osa: we know it’s happening and we’re here to resolve it with. In real time, you can get in touch with us. I think the other approach that we see today brands use is like live chat on the website, which, works it’s okay. The consumer has to log in, find your website, live, chat you and that’s fine.

Osa: The other approach is to have the consumer just email you, and that’s gonna go into your Zend desk. You’re Gorgeous. But we think in the future, a lot of brands will start to look for ways. Leverage SMS is a way to really stand out from the other brands in their category and say, Hey, if you’re a consumer, you can get in touch with us this way, but more importantly, we can help you solve large problems directly over text in a way that you couldn’t over email support or live chat support.

Brent: And I’ll go back to let’s just say Delta airlines has been, especially during the pandemic they’ve offloaded some of their live customer support to texting. And then they usually run you through some sort of a filter to see if you really are going to talk to somebody in real time.

Brent: And then you do end up talking to a real person. And I would imagine that real person is managing probably three or four or five, six queues. So from the merchant standpoint allows you to have more active conversations at once and from the. Client or the customer standpoint, it allows you to feel as though they’re actually hearing you without a bot.

Brent: So I think there is a difference hearing that robot or that AI behind it, Hey, I’m gonna respond and they’re just going to send me some garbage back is there’s no real person there compared to a real person who’s

Osa: really helping you. Yeah. Yeah. And that’s something we think a lot about at Parrot.

Osa: Parrot. We provide every brand who uses us an AI that can handle some automated customer service kinds of things, but we always make it clear to brands that automating all your customer service is not the goal, especially when you’re in a channel like SMS, because you should let the consumer know, Hey, this is a bot you’re talking to, but there is a human being available, right?

Osa: You can always type human or agent to get right. Really into a conversation with someone because there are some issues. If you imagine hello, fresh in the us here if someone, has an issue with their delivery because their meals got delivered, but it’s all messed up or it’s not refrigerated properly.

Osa: That’s a situation where I want to get in contact with a human being as quickly as possible. I don’t want to go through a bot and have to explain myself. And so we think that mix of automated plus human is gonna be how the best brands stand out over the next 10 years when they’re leveraging SM.

Brent: Yeah. Just tell us a little bit about your company and how it’s solving some of these

Osa: problems. Yeah. Parrot really is a simple way for brands to collect money directly over SMS. And the reason we focus on collecting money and payments over SMS is because we realize that for a lot of brands, they do not have the infrastructure to do what capital one or bank of America does.

Osa: They can’t go process payments or handle charges over text and for the brands who can do that’s gonna be a superpower in the future. And we’ve already seen some brands like verb energy, like Dirty Lemon which is now part Coca-Cola build infrastructure to collect money over text, because that allows them to provide a radically different customer service experience, but also to get offers and incentives and also campaigns in front of their consumers that consumers can say thumbs up.

Osa: Yes. I want that. A great example would be, Dirty Lemon sells energy drinks, and they use SMS to remind people every 30 days to reorder and they process that reorder directly over text and send consumers a receipt. And so Parrot helps merchants who can’t be capital one. They can’t build that secure, simple way to check out over text.

Osa: We provide that infrastructure for them and we think really that’s the future of SMS, right? It’s going. Spaming people are going beyond spray and prey and really focusing on how do I solve a problem with this customer and then get this customer to transact in the same channel that they were actually having a conversation with me in.

Brent: I think one of the differentiators for let’s say Africa specifically is that you can make payments directly with your SMS provider. Do you think the US is heading in that direction?

Osa: I think one of the challenges in the us is that the carriers here, the phone carriers, Verizon ATT so on and so forth have not really embraced payment over text as a core part of their business.

Osa: One can argue that’s because, they’re inherently monopolistic right. There are a bunch of reasons why it haven’t. But I think one of the other challenges here is that the banks, right? The Capital Ones the folks who could provide the infrastructure for this kind of thing, Don’t really play nicely with the carriers.

Osa: Whereas in Africa and Asia the phone carriers telecom plays very nicely with financial institutions. And so here in the US, we’ve had to essentially build that infrastructure, that to allow for payments over text. And so at Parrot, we work with the financial institutions on one hand, and we also work with the telecom providers, Verizon ATT to provide us infrastructure to merchants.

Osa: It didn’t exist and it needed to be built, but we think that over the next 10 years, the best brands will leverage this infrastructure that we built. And there will be other folks, right? Like Parrot to help actually solve these problems. But we think it’s the right time to actually go build that.

Osa: That way. If you’re a merchant, you don’t have to go talk to ATT and do this yourself.

Brent: The whole payment over texting I know. What 10, 10 years ago, or something like that, maybe even still today, you could buy something from a vending machine, over a text. It wasn’t super clunk. It wasn’t super easy, I think now with smartphones, you could, you can do it over apple pay.

Brent: Do you think some of those things are moving in front of SMS for payments, or do you think SMS still has a place that’s more seamless to make those payments at say a vending machine? some local thing.

Osa: Yeah. Yeah. think brick and mortar is really interesting at brick and mortar, payments where you’re not buying something from a merchant who has no physical presence who has a physical presence.

Osa: So the vending machine being a great example, right? That’s a physical thing that the merchant is set up. Or when you walk into a restaurant and pick up some food they’ve got a physical presence. And so you can either tap your card. If you’ve got one of the contact list cards or you can double tap Apple Pay, just tap your phone.

Osa: We think for a lot of physical purchasing, that’s gonna be the best way. Cuz a lot of folks have really nice credit cards that you can just tap and walk away with with your food or with whatever you are buying. I think the challenge for a lot of merchants who are online though, is that they don’t have a physical presence.

Osa: And so you can’t really just pull out your card from your wallet and tap it to your phone and buy when you’re on online merchant. You can use apple pay if the merchant supports it. But we’ve seen that, a lot of merchants across the internet do not support apple pay.

Osa: Whereas 90% of physical merchants in physical stores do support apple pay. And so we think that there needs to be some in between for merchants to be able to engage you when they don’t have a physical presence think of an online store selling t-shirts they need a way to engage you and get you to transact.

Osa: But unfortunately, Apple pay or a contactless credit card. Isn’t really great in that situation because again you’re on your phone, you’re walking around and your phone isn’t really intended to be a point of sale system. It’s really just a browsing device. And so that, that’s why companies like Parrot will, I think, need to exist for those merchants.

Osa: But the other thing we’ve seen merchants do is actually open up physical locations. Right? Think of Warby Parker, think of brands like that. They just say. Online is too difficult. I’m just gonna go open a physical store because that way I can get that, ease of transacting. People can just walk up, tap a card leave.

Brent: Yeah. And that’s a good point. I went to NRF in New York in January and Amazon had a popup store that had everything in it. You just walk through, get whatever you want. I can’t say that I could buy anything with SMS, but , it certainly was an online in person popup store that that they’d setup

Brent: At the end of every podcast I give the guests a chance to do a shameless plug about anything. You’d. What would you like to plug today?

Osa: Yeah, I’d love to plug get Parrot. We getParrot.com is our website. If you’re interested in learning more about how to collect payments over text, or if you got conversion problems and you’re trying to solve that in the next 30 to 60 days, please go to getParrot.com and we’ve got a bunch of resources for you to explore there, but also a way for you to get in touch with us and get a demo and learn more about Parrot.

Brent: I’ll put these in the show notes. And how would they get in touch with you

Osa: through your website? Yeah, the best way to get in touch. Yeah. The best way to get in touch is to getparrot.com. Or you can send us an email at osa@getparrot.com, and we’ll get back to you as quickly as possible.

Brent: That’s fantastic. It’s been a great conversation. Thank you so much for being here today. And I look forward to some SMS texting in the future.

Osa: Definitely. definitely. Thank you for having us.

The Inclusive Value Chain with David Edgerton Jr

April 14, 2023June 21, 2022 Brent W. Peterson

Do you have the best available people for each part of your supply chain and within your own organization? David Edgerton Jr helps to debunk the myth that there isn’t talent in this low unemployment economy and maybe we are just overlooking it or worse excluding it because of bias.

David is the founder and managing principal of The DEJ Group LLC, an executive search and recruiting firm dedicated to uncovering the real needs of organizations and bringing forward a diverse set of candidates with an array of backgrounds and experiences. The company focuses on increasing the economic inclusion of people from underrepresented communities through employment.

Talk Commerce DEI Talk

Transcript

Brent: Welcome to this episode of talk commerce today, I have David Edgerton Jr. He is the managing principal at D E J group, LLC. David, go ahead and do an introduction much better than I did. Tell us what you’re doing day to day and maybe one of your passions in life. Oh,

David: absolutely. Again, I’m David Eton, Jr.

David: And thank you so much for this opportunity to be a part of your podcast. I appreciate the invitation I’m the managing principal of the DEJ group, LLC, which is an executive search firm that I started. About, eh, I’ll say about two years ago working on two years now before that I was doing management consulting and working with minority business owners to help them grow and scale their businesses.

David: And we’ve pivoted into executive search because. That is the space that we have found a passion in for our own business. And it helps when you’re coaching others, that own businesses that actually have a business yourself. There’s an integrity part of that that we wanted to make sure came out and it is very transparent open with our audience and who we work with.

David: What we say we do is we match diverse talent with inclusive companies. So there’s a DEI piece of that, where we do some consulting with firms on their workplace inclusion practices and we try to make sure that as we go out and find talent, that the organizations are ready to receive that talent as well as cultivate that talent so that they stay there.

David: And also help the organization really bring the right people in to put ’em in the right seats so they can grow and scale themselves. So that’s what we do overall. We’ve been successful in doing several searches in the non-profit space, in the retail space where we operate and the manufacturing space and the healthcare space.

David: So those are the industries we try to hang around. And have some success. Most of our business so far has been coming from the nonprofit space, especially in the philanthropy and the development areas. So we’ve been doing a few searches in that space here in the Twin Cities and we do national searches.

David: By the way, we don’t just focus here in the Twin Cities, we the clients we have are here, but the search range goes all the way from coast to coast. So that’s what we do. We also. Do some adjunct work in several universities in the business and entrepreneurial space. And yeah we are busy right now, especially in this job market.

David: So just like other firms are really scrambling, trying to find talent. We’re just as busy trying to find the right talent for our clients. So that’s what we do.

Brent: I saw a statistic this week that the Minnesota unemployment rate is at about 2% historic lows, the lowest it’s ever been so it must be a challenge to, to find anybody for any job right now.

Brent: It

David: is a challenge. Now what’s interesting about that fact is that 2% rate is what it is, for everybody, but for people of color, it’s three times as much. So it’s somewhere around five to 6%, which is above the national average. So it just depends on, the demographic that you’re going after.

David: And so that’s what makes it really interesting. because there are people there. There’s talent out there. That’s ready to go to work. But it seems that in some cases we’re not finding that talent. So one of the things we talk about as a part of our business is that we want to debunk the myth that the talent doesn’t exist, especially when you hear numbers like that.

David: So for us it’s not just, finding the talent to fill these roles. It’s also making sure there’s a diverse state that you can choose from. So that’s the main thing that we focus on.

Brent: We met in a diversity training session, which I attended. Yes. And that was very good. Thank you very much.

Brent: Thank you. And I, you had some great points about entitlement and some of the reasons why people of color and other less non-white bald guys. Aren’t. even getting the opportunity to go to jobs. Yeah. Maybe we could talk about that. I thought that was very interesting in a in that as an employer, as an entrepreneur, we should always be aware of that.

David: Yeah. And one of the things I could get into as you asked that and make that point where I ask that question is this concept of an inclusive value chain that I have actually done a talk on and what it is. What you could do is look at your supplier, your supplier, you, your customer and your customer’s customer.

David: That really is like the, what we call it, the supply chain right overall. But the reason we are using the term value chain is that value is created from upstream and it flows downstream. So in the way that value is created, there are opportunities where you could look at that whole entire process and say, you know what?

David: Do I have the best available resources for each part of the chain, whether that’s suppliers, as far as now, we get into supplier diversity, right? Channels that we sell through world that’s channel diversity. And then inside the organization is where we should really focus on, are we hiring the right kinds of talent?

David: Where are they coming from? And things of that nature. So one of the things that we talk about there is. When you are looking at your personal and professional networks, this is where we derive a lot of our talent choices referrals, things like that. I think in that session that we were talking about earlier I mentioned that.

David: If you are listening to people that look like you sound like you and are connecting with people that are very similar to you, which we naturally do as human beings. And we don’t consciously look for the differences and we don’t consciously look for opinions that oppose us. We tend to acquiesce if that’s the right word to a certain kind of think and a certain kind of decision making.

David: which limits what’s very possible. So one of the things that I wanna do as a part of our firm was why we focus on trying to bring diverse talent is we only wanna, not only want to bring people that look different and sound different to, but with different perspectives as well. Because when you do that, you end up with a more superior product or superior service, especially if you’re creating one yourself.

David: So you need that to sharpen what you’re offering. You need that to help you with any blind spots or any, biases that you might have that tend to. To bleed into how you make decisions. So if you’re already, if you’re always working with and connecting with people that always agree with you or like you there’s so much, you’re leaving.

David: On a table that could actually make you better. So that’s why we focus on it more so than anything else. Plus, a lot of people say that’s just the right thing to do. People have different perspectives on right or wrong. So I don’t usually just go with, it is just the right thing to do well to whom.

David: Right. the thing about it is at the end of the day, if you want the very best product, you need to get the, all the perspectives possible on it, on your service, how it’s being sold, how it’s been marketed, how it’s being consumed, how it’s been used, you need all the perspectives you can to make it the very best product it could possibly be.

David: So as an entrepreneur, that’s what I actually look for that kind of feedback and that kind of perspective to help me be better.

Brent: I’m a board member on EO, Minnesota, one of our goals and we have a diversity and inclusion committee now. Yeah. One of our goals is to increase diversity and that’s not just for people of color, it’s just women, everybody just diversity across the board.

Brent: Yep. I know that some other chapters have. Automatically put white males on a wait list to join. Are those type of strategies, something that you would recommend or is there certain strategies to become more diverse?

David: Oh, here’s yeah,

Brent: I get where you go. I’ll let you go. And then I’ll have another question to follow up.

David: that’s a great question, actually. Here’s the thing you can’t do any of this without everybody involved and I think people have made this mistake. a lot across the conversations we’re having across the initiatives. If you leave white men out, you’re actually making it worse. Because if you look at the numbers, there are more of them so what you gotta do is you’ve gotta make it so that

David: everyone can be included including white men. I was at a company and I was the diversity director for this company. And one of the things we did was we created these groups called ERN employee resource networks based on the different types of groups that wanted to get together and be represented and be able to support each other.

David: And one town hall, one of the guys got up and asked me questions about this. He said, can we have a white men’s ERN? And I said, yes. And people looked at me like I was crazy and it was because I said, yeah, because you should be able to connect with other men like yourself and white men and be able to have a conversation.

David: Here’s the thing though. What type of conversation are you having that helps with diversity? That helps be more inclusive? Now what we’ve had historically before we’re white men getting together and not having that kind of conversation, which is why we got what we got now. So it’s not that, there’s a challenge with white men getting together.

David: that’s not the issue. The question is the target of the conversation and what you actually come up with that will help the situation versus take shots at the situation and make it worse. So there to leave white men out of it, I think is very detrimental, because we need everybody to really contribute and have a perspective and really look at it for what it is.

David: See the problem with, excluding white people and white men specifically. Is that it makes it feel like, oh, so now we have to punish people for where we are instead of saying, oh now that everybody hopefully has taken the right attitude about this to say, yeah, we have a problem collectively.

David: We need to solve that problem. And usually they’re more white men that have influence that have finances that have all the other things that have traditionally been helpful in making change. You need them as partners. So if you can help with some of the mentality around, it, it should be good for everybody.

David: It should help everybody. Or at least everyone should have the same fair shot. That’s really what I focus on. It’s not that you should just give people a color stuff. That’s not where I’m coming from. You should give underrepresented. And I don’t like to use that term underrepresented, cuz I I did a post on this a few weeks, a few days ago.

David: I said underrepresented is not the right term. Excluded is the right term because underrepresented says, Hey, I just went out and I invited everybody to come. And only one black person showed up. Okay. That’s underrepresented because you asked everybody to come and you made it so everybody could come.

David: But the reason one person showing up in most cases, because you put some stuff in place, so they couldn’t show up. That’s not underrepresented, that’s excluded. So let’s be open and transparent about that. But to exclude people that could help you is the wrong thing. So those strategies, I don’t suggest those.

David: I suggest things like let’s make sure that people understand what it means to truly be, for example, and ally and what the parameters are around that. Because allies today, can step into a situation and help, but they can also step right back out. And sometimes they don’t think about that part. when they’re talking about, Hey, I’m an ally.

David: I stand with you. Yeah. But tomorrow you don’t have to stand with me. You can step right back out and the situation doesn’t change. So are you really having an impact? I know that’s a long answer, , but as far as excluding white men from the conversation you just can’t do that.

David: That’s just not helpful. You won’t go for it.

Brent: You brought up some great points in there. So the first thought that I have is employers who just give lip service to to being diverse or saying we’re posting out there on LinkedIn. Yeah. I wanna be diverse.

Brent: So I’m gonna hire a more diverse group of people for our company. Yep. And then they never do anything. That’s right. Is there, like we talked about that whole pipeline or that journey of the opportunities that you have to get to a job. And then when you’re in that job, how do you feel included or excluded and then the total makeup of that company is there a way to hold leaders accountable

Brent: who just give lip service?

David: I have a statistic. I might have shared that in that session that we had since, and I’ll use George Floyd’s murder as a point in time since that incident, when a lot of companies and a lot of leaders started to say, okay, wait a minute. We’ve had enough. We’ve seen this too many times.

David: And this is major. This event affected the planet. You saw protests in Belgium, , about what just happened, not like a few miles from where we are. So with that, 50 billion dollars, I think was promised through the media from very large companies. A lot of folks said, Hey, we need to, do something about this and we’re gonna pledge this money.

David: Only 250 million of that 50 billion at the time that I checked on this, which might have been a few months ago, was actually received and actually went to those places. So here’s what happens. People will say, Hey, we’re together and we’re gonna give this money and we’re gonna make this better, but no one follows up to see if they actually did it.

David: They hang on the fact it was said by these large companies, another one the CEOs of all these companies getting together, saying we’re gonna sign this petition. and we are gonna stand together against, an racism and white supremacy, all these things. So we see that in the media.

David: Okay, great. So you signed a piece of paper that says you’re with this, but we don’t see. And we don’t follow up to say what came out of you signing that . So sometimes it feels like these things are happening. In the moment where the attention is, and companies are leveraging this to, I’ll say, position themselves to be on the right side of the discussion yet what they’re not doing is sharing with you

David: what they’ve done since then. and the, any improvements that they may have made since then. So we call that performative marketing. There’s a term for that performative marketing, and it’s performative because it is a performance. You put stuff out there to say, Hey, you’re doing this. You put stuff out there to say, oh we’re with you.

David: We’re doing this. But then when you look at the numbers don’t move. So when you started going back to the thing about accountability, , it’s very hard to hold some of these companies accountable because at the end of the day, unless the board’s involved, unless the senior leadership team is involved and they’re committed to some of these things, unless you’ve got some folks who can just say, you know what, this is what you said you were gonna do.

David: This is what you did. What happened unless you have folks in that position to do that, it’s very hard to hold people accountable because in some cases, They don’t really have to do anything. And I think that’s the piece that people don’t wanna really, accept and really understand companies don’t have to do anything about diversity and inclusion.

David: They don’t. And the reason why it’s such an issue is because they don’t, it’s hard to enforce something it’s hard to, get traction on it because if you have a few people in the right places, That don’t agree with it. They’ll stop any kind of initial they’ll stop any kind of project, any kind of improvement, because they don’t agree with it and nothing will be done.

David: So the answer to that is one of the things we’re gonna talk about when we talk about entrepreneurs, my thing that about that, and the answer to that is to help companies who are diverse, who have diverse leaders, usually startups and smaller and middle size companies. Help them grow because if you help them grow, they create the cultures that attract the right type of diversity.

David: They also build out and invest in the communities where the founders come from. So now you’ve got that investment going back to those communities that need it right. And as they continue to grow. They continue to help with the conversation, cuz it proves that the people that are in those organizations that come from those diverse backgrounds actually can do what they say.

David: They can do what they say. They’re doing and they actually do bring a good product of service to market, but they get crushed by the big guys. Because, ah yeah we don’t want to innovate anymore. We now going, we’re now gonna buy our innovation. That’s what Microsoft Google, and some of these bigger companies doing though.

David: They don’t innovate as much or really any anymore. They wait for a startup hot startup to come along with something that’s disruptive that they could not organize their teams. To, go do, and then they go just swallow ’em up. And there’s nothing wrong with a nice exit. Don’t get me wrong entrepreneurs out there who might be saying, wait a minute.

David: I’m thinking about selling my company one day. That’s not what I’m saying. What I’m saying is to really solve the problem. From my perspective, let’s get some companies that have founders that look like me and others. The opportunity to really have a chance to survive and thrive and actually take off.

David: And I think that would help with the conversation and actually help with the gaps that we have and the challenges.

Brent: So circling back to the discussion about the $50 billion. Yeah. You’re saying, or it is really. A one could say a PR stunt and I’m sure that the idea behind it or the motivation behind it, wasn’t a PR stunt.

Brent: Yeah. But it was certainly an opportunity taken from marketing to raise the awareness of some brand, whatever brand that is. And and then after that PR has been done there. Really no motivation to follow through on it.

David: Right there, there isn’t. Because it’s like the latest news, you hear the news, you read it.

David: Great. What’s the next story kind of thing. And we’re starting to see a little bit of that, but in the challenge of, for example, the George Floyd murder, we keep seeing in the news. Unarmed black men being killed by police. In other situations, we keep seeing injustices, for example, that keep happening.

David: So what companies are doing is saying, okay, that’s why they want to be on the right side of it. But at the same time, we don’t have some overarching accountability partner or for to say, okay this is what you said you were gonna do. You did not do it. Therefore. So the only thing that you have is I guess we’ll have to wait till the next thing to happen, to see what people are gonna do and see what band ride we gonna jump on.

David: But here’s an example that I would go back to the sixties to tell you why I think it can work if we do it the right way. The when Martin Luther king was in, I think it was Alabama Selma, Alabama, 1965. I think first time we went over to. Pettus bridge. It was all black pastors and they stopped and they didn’t go any further.

David: And they went back three days later, they came back to do the March again, but this time he had white pastors and black pastors and they went over the bridge and they kept going and it was successful. The reason I used that in a lot of my talks, especially DDI type talks, I say it takes all of us to do this.

David: It takes all of us to do this because the freedom is supposed to be for everybody, not just the minorities, just not people who have been disenfranchised. It’s supposed to be freedom for everybody. So just as you are free enough to start this podcast and have your own business and do everything that you’re doing, I should have the same freedom.

David: And you wanna hire who you wanna hire. It doesn’t matter who they. so should I that’s the land we live in, right? Or at least that’s the way it’s supposed to be framed. that? That’s the case. So for us, it’s more about, we really need to figure out the best way to engage with incumbents, large institutions who were built using.

David: Some of the things that we’re actually now fighting against , but at the same time they have the resources and they have the things that we need in order to make a change. So to make that change I say, I don’t wanna say start at the bottom up, cuz we’re not at the bottom, but I would say start from a different part of the discussion for me.

David: It is. let’s help. Small business, medium business, be large businesses. Let’s help small businesses, medium businesses be larger businesses that are more inclusive because they’ll do just based on research and just based on what I’ve seen in myself, they’ll do the hiring of other. People of color, they’ll promote people of color to the right kind of roles.

David: They will give them opportunities to have their own franchises, have their own kinds of, startups and things like that. That’s the way to get to it. And I think if we were able to invest more into that, there’s a stat somewhere. I’m trying to remember how it goes. I think we would add.

David: 2.5 trillion to our GDP. If we only allowed businesses of color that are owned by people of color, to just have the same rates of success that white businesses have. Now, when I say have the same rates of success, I’m not saying do anything different, but what I’m saying is. If a black business goes to a bank and asks for a loan or asks for money, they should have the same probability of getting that money as a white business.

David: And we all know that businesses of color, lack in getting access to capital. from structural things that have been put into the financial industry in institutions and into the financial industries. What I’m try to say there. So if we just let everybody have the same shot, that’s why I keep going back to that.

David: If everybody had the same shot of success, without any of the things being put in place to keep certain groups from having success, then we would add that to the economy, which would create jobs, which would probably solve a lot of the problems that we’re having right now. So that’s how I would look at that.

Brent: Yesterday I heard guy Jeffrey Brown talk. Yeah. About the fact that as a white guy , he gets in front of leaders and he can talk about diversity, where there may be less opportunities for somebody of color to get in front of some of these leaders. How do you then trickle that down to getting the opportunities for everybody?

Brent: I thought he made a compelling, not an argument, but he. Make a reason of why he does that. Because sometimes people might not even listen. I think you said oh yes. Earlier people only listen to what they wanna listen to. And they listen to the people they agree with.

Brent: And our current political climate it’s more fragmented, right? We’re not hearing anybody. And if we are, we’re gonna tell ’em, they’re some kind of horrible expletive and then we’re gonna, we’re gonna kill ’em on Facebook and whatever, put all kinds of horrible comments on a post, which is no, that’s not what we should be doing.

Brent: So no, for what sort of advice would you give to a white person that wants to. help. Raise the awareness, I think is the first step. Make sure that everybody’s aware and then actually start taking some actions. Yeah, that’s a

David: great question. I tell you there’s a lot, I think some people may not agree with this, but I’m just gonna say it I think there’s a lot one.

David: The first thing you gotta do is I think you have to, before you try to help somebody that doesn’t look like you, first thing you have to do is understand. How we got here, the biggest problem that I see, and it’s usually one of my big frustrations actually is when you talk about the conversation of, okay why do we have the gaps we have?

David: Why do we have the challenges we have? Why. Some folks don’t want to talk about how we got here systematically, historically, and don’t want to acknowledge those things. In fact, you’ve got now I hate to be political, but Hey I am who I am. You’ve got folks now writing laws that say that you can’t talk about certain things in school and getting them passed right.

David: That are really. History, not making anybody feel guilty as they put it, but it’s history. These things happen. So when you acknowledge these things that have happened, things that have been put in place that have disenfranchised certain people and certain types of groups, you’re saying, okay, we, we can agree that it happened, but now here’s the hard part though.

David: On both sides, you have to now say, okay, it happened, what do we do together going forward? And that’s the challenge. So if you don’t acknowledge what happened, you can’t come to some common ground to say, okay, now what do we do to go forward? So a person like you just mentioned, who’s says, Hey, I talk about racism and white supremacy.

David: And I talk about the things that have happened and I’m white. When I do this, I am white, for example. The reason it’s good is because the folks that don’t want to have the conversation with somebody that looks like me, they can at least have a conversation. So the question there would be, can you hold each other accountable now?

David: That would be a good outcome. So when you start talking about the performing of things that we talked about earlier with these companies and leaders they should hold each other accountable. Actually, the CEO of Target, for example, should hold the CEO Best Buy accountable for what Best Buy said it was going to do.

David: And Best Buy, gave $10 million to an organization recently that I’m familiar with to support black and brown businesses being, funded. They said they were gonna do that. Target said we’re gonna, support black and brown business. so somebody else should hold them a account. So what they said they was, going to go to do hopefully fortune five, something like that.

David: There’s this initiative, I think it was 1 million black jobs or something from saying that that was signed by, I think it was. 10 big companies said, Hey, we’re gonna hire I think 1 million black people in the next 10 years or something create jobs for them because we realize they’re one of the groups that have been disenfranchised.

David: Okay. Somebody should host those companies accountable to, to do with that. Since you put it out there and then you did the marketing and did the YouTube and the tos and all that stuff to talk about it, where somebody should hold them accountable to that, but that but getting to the point. White people being allies.

David: Yes. We need white people to talk to other white people about what white people have done and hold people accountable and say, this is what we should be doing now. And not be afraid. Here’s a key piece though. Not being afraid that they’re going to lose something. because the fear of loss is one of the reasons why some folks are very complicit.

David: And here’s another thing I saw the other day that might, speak to this when you’re talking about this. And my brother said this while back it’s sometimes, and I hate to keep saying white people, but it’s just the easiest thing to say. but sometimes white people don’t realize that they’re acting as a group.

David: my brother said that one time. And I thought about that just before I really started doing DEI work. And I kept that thought like right here. And it’s an interesting thing. When you see how whenever something happens with a certain protected group or a certain community, if someone does something, let’s say it’s negative, then it reflects on the entire community that they’re coming from.

David: This is where we get this thing where people talk about black on black crime, and say, oh this person did this and they murdered this person. So now it’s a black on black thing. You fix your own problem. You’ve heard that you’ve heard that. What’s interesting is no one ever talks about white on white crime.

David: because when crime happens and it happens to be Caucasians in the mix of that, no one looks at it as that’s white people. They look at it as that’s an individual, you notice that, think about all of the shootings that have happened recently. They look at that and say, oh, that white person, oh yeah, that, that person did this, not the group did this.

David: So that interesting dynamic that I heard and it’s one that I’ve been said of steadying out. That’s one that needs to change. Either it’s everybody’s an individual or everybody’s part of the group it’s one or the other, not the middle, which is, oh if a black person does this, then it’s black people.

David: So now we’re gonna just look at the group and say, this is what they do. And when white people do it, oh it’s an individual that doesn’t reflect on the group. So that group dynamic piece. that’s the thing that if we tapped into a little bit more and say, wait a minute, now, if you did something well, we’re all white.

David: So you made all white people look bad. Imagine if that was the conversation. . If you did that, you just made all of us look bad. That’s not what we want. We want it to look like this. That could be the start of something really cool. Actually, just that little dynamic of, Hey, no, that, that person looks like me to, they could think that’s me doing that mass shooting or that , whatever the thing might be, that embezzlement of millions and millions dollars, Hey, that made all the white people look bad.

David: So we don’t see that as much, but it’d be neat to see something like that.

Brent: Yeah. I think one thing that that I heard yesterday was that entrepreneurs are change leaders. They embrace change. And part of that is feeling uncomfortable in where you’re at.

Brent: And a lot of conversations like this make white people as a group, feel uncomfortable. Yep. Cause it’s not comfortable to talk about anything other than what is comfortable. As a definition. If we were to say that the, maybe the top three things and I hate to put it that way, that’s okay.

Brent: Somebody like me could do to help increase the awareness of diversity and I’m. And again, I’m gonna go back to EO Minnesota. We’re not diverse in terms we’re all white males. We’re not all white males, but I bet it’s, I bet we’re at 85 or 87% male. And then it’s probably, yeah. The per the numbers.

Brent: Aren’t great. How would we go about, and I’ll say we as a group, white men go. doing those, some of those things. And I think the, for me anyways, the first step is being able to have those conversations and feeling a little uncomfortable in it. Yeah. And if you don’t feel uncomfortable either, you’ve made it past that mark of it’s we’re all one big group.

Brent: Yeah. Which I doubt there’s a lot of anybody out there that feels that way, or you’re gonna feel uncomfortable and you should embrace the uncomfortableness and then start working on ways that we can work together.

David: One of the things I always ask people when they say. , I’m uncomfortable.

David: Let’s talk about why you’re uncomfortable. See nobody asked that question, right? They don’t say, okay like I’ve been in sessions and people say I don’t feel comfortable not even talking about this. But we never asked the question why don’t you feel uncomfortable? What is that?

David: And what you will see in the root of a lot of these is one white people don’t want to be labeled as racist. They don’t and they’ll say I’m not racist. That’s the first thing that pops up. I’m not racist. Nobody’s saying you’re racist. As far as you are a bad person, you grew up wrong. None of that’s not the challenge.

David: In fact, when we start talking about racist and racism, it’s a system. See you and I both have biases and we have I’ll call it. Prejudices I’ll even go that far. Because we’re individual. But racism. Is a system. It is a systematic way to disenfranchise a group of people, especially people of color. So what have you put in place in covenants and laws and regulations that say that this group of people are less than, or they can’t have the same God given rates as Americans that you have when you put stuff in place that makes it so that people cannot live the way you live.

David: That is a racist system. And if you don’t do anything about the racist systems you’re benefiting from, now I can call you racist, but realize the context around why I’m calling you that now it’s not that, oh, I have black friends because you get that all the time. I have black friends and I go to, different organizations and I support black people.

David: Yeah. But what have you done to take down? The laws and the regulations that kept black people from owning homes, whatever you said about, for example, when they did the interstate system and they built all of those interstates from the fifties through black neighborhoods and displaced them, what’s your opinion on that?

David: Whatever you done about that, there’s this new thing now called the reconnect Rondo, for example, in St. Paul, we’re just talking about, Hey, let’s build a land bridge. 94 on that stretch because that’s where black people in their neighborhoods used to be thriving, not bothering anybody, but, Hey President Eisenhower said, we need the, our interstate system to happen in 19.

David: I think 51 is when that was. And they in several cities, not just here, several, I just hear several cities. They built those interstates right through black neighborhood. So the question is, what are you doing about that? What do you, first of all, do you know that? Go back to the knowledge and the history and stuff you need to know, but then what are you doing now to write the wrong.

David: and are you writing wrong or are you just saying, oh, that just happened. My grandfather, my great grandfather. They might have been a part of that, but that’s not me. Yeah. But guess what you got trust fund that or you have some investments coming to you and inherit just coming to you because they benefited off of that system.

David: So in other words, you kinda are indirectly tied to that. so the question is, what are you going to use that for, to make it right? If you truly call yourself high or truly call yourself a friend of the movement, if you will. So that’s the kind of stuff that, if you’re talking to other people that look like you about and holding each other accountable, that’s where the change starts.

David: It’s very wrong to look at the folks that you’ve disenfranchised and tell them to fix it. But at the same time, we can’t stay the victim either. So there’s the other balancing part of that. We can’t just say, oh this happened to us. This happened to us. This happened to us. Woe is us?

David: No, we have to have, we also have to say, okay, this happened to us. What are we doing now? To make it better, which is why it’s gotta be a partnership between both sides to really get to where it needs to go.

Brent: Yeah. I really like that. Are you are you, why are you uncomfortable? That’s a great question to ask.

Brent: Yeah. And it’s a great question to ask of everybody of themselves. Yeah. So we have a little bit of time left. Sure. I, and this conversation could go on and on and I’m very, I’m really enjoying it. I think that making sure that let’s just call it a change agent. I think that’s a great word.

Brent: For anybody to, to spark change and to feel uncomfortable for a bit and then ask those questions. I think moving forward, it would be great if if people would embrace some of this and I also like the term that you said, ally create allies and work across people and genders and everything.

Brent: Yeah. and I don’t wanna, I don’t wanna make a blanket statement that it, that yeah, I think we all have to start doing one thing at a time. Yeah.

David: We do one person and bring it home to like the EO, for example. One of the things, when you talk about, being more diverse and things like that, I think you have to look at.

David: I’m gonna tell you why it is what it is. It is what it is because most of the people have similar experiences. Therefore they have similar expectations, right? And when you have similar expectations, the first thing that happens is, and I’m not gonna call this privilege, even though some people define this as privilege, but I might as well I’ll use word, now that I said that but here’s the privilege you have. You can say, Hey, Johnny, struggled got his business off the ground. Now it’s $2 million a year. He’s headed towards 5 million had these type of opportunities to get it going. Great. So did Bob, right? Larry too, we throw Larry in that too.

David: So you look around and if everybody looks the same, you automatically think. There’s a bias for what I’m talking about now. I can’t remember the name of it, but cuz they’re like 16 or 17, but there’s a bias that I’m about to describe to you. You look around and you say, okay, it’s a confirmation bias is really what it is.

David: Everybody looks like me. And we all have very similar experiences to how we got our business to where it is. And our business is at a certain level. This is how it should be for everybody. That right there, as soon as you say that and think that way you’ve just excluded a whole lot of people that could potentially be in the organization.

David: And if you make your rules around that, for example a million dollars revenue is the minimum you have to make to even be a part, for example. And I’m making that up. I don’t know if that’s a rule or not, but let’s say that is right. You just cut out a lot of people that could be in, because you got a million dollars as the nut, you gotta crack just to be a member.

David: But here’s the thing. If everybody around the room looks like you and they made that million dollars, then they think that’s what it should be. See what I mean? So that’s how that bias piece starts to creep in because you’re around people that are like, you. Who may have similar experiences, yet you’re not just demonstrating true empathy. Here’s what empathy is. Empathy is I don’t have to go through what you have gone through to understand what you’re going through, but I can still support you. sympathy is when we go through the same thing I say, oh yeah, you started your business and you struggled and all that.

David: I did the same thing and I, so now I understand you that’s sympathy. We need empathy. And I talk about in one of my talks, how empathy is a strategic, competitive advantage, when you can help people and see people where they are based on what they need. And it has nothing to do with you now, you that’s called de privileged.

David: If you want to use a term, I might have invented a term right then. That’s de-privilege. That’s saying, Hey, let me take all of that out and really look at the situation for what it really is. That’s how you begin to diversify your organization though, because you’re now saying I’m not gonna put into this, the perspectives and thoughts of how I got here and now make that the requirement, because there are people around you that look different from you sound different from you come from different ways of life.

David: they don’t have that exposure. They don’t have that experience. They don’t have some of those things, but they would be awesome members in your organization if you could meet ’em where they are. So that’s what I would say a about that. How do you make sure that you are empathetic, truly empathetic?

David: To all walks of life and how you’re truly empathetic in how you build your networks and build your connections, your circles, your stuff like that, because it’ll make you better. it just will. Once you see that, oh wait a minute. It’s not the way I thought it was. Or at least for everybody it’s not.

David: But you just learned something that just makes you better. And the same thing with me, I try to find people who do things differently and have different perspectives, cuz it just makes you better. And it lets you know that there’s still some human in humanity.

Brent: I’m gonna close us out here with some coincidences, because yesterday empathy was one of the topics that was talked about.

Brent: And I have a quote because it really struck me. Empathy is one of the qualities, young businesses, lack, most entrepreneurs build things and solve problems for people in hopes of a return on investment, which people with high empathy do not generally expect. And I thought I actually took a picture of the slide down the screen.

Brent: Because there are definitely two different types of entrepreneurs. There’s one that are empathetic to their employees. And this can then fall into everything, right? Yeah. The empathy for diversity for having gender, any type of thing. Or just having empathy for that individual who’s in your company.

Brent: And then the other side of it, that is just that, Hey, we need to get our billing out of that person. And if they’re not gonna be around, we’ll find somebody who can do it. I don’t care about that person. I care about the return on investment of that person. Yeah. And to slide, the scale at a slide, the needle, or however you wanna say it is that we all have to have some empathy for our fellow human beings, no matter what they look like, no matter what gender they are.

Brent: And. And see them as they are, instead of seeing them as a

David: number or seeing them how we want them to be . Yes, exactly. See, that’s the thing. If you see them, how you want ’em to be or how you think they should be, that’s the problem. That’s not empathy at all. And that’s, you’re right. That’s why it’s lacking because we wanna see people how we wanna see ’em versus see them for what they are.

David: And what they can do and what they can become. And it takes a sacrifice from yourself. You have to deny yourself in order to really help somebody be what they’re supposed to be irregardless of what you think and how you process. So that’s being selfless. And in business, we are taught and have been taught, especially in the United States, since the beginning, it’s all about what we want and who we are and what we’re after.

David: So it’s almost dally opposed, from being an entrepreneur in some cases, unless you’re one of those ones like the ones that are coming up now in the social space and the B Corp kind of thing, where you’re like, I’m gonna create this because it’s solving their problem, regardless of what I think, the more that we have, some of that kind of thinking, I think that gets us on the right path.

Brent: Yeah. And that we could keep going David on and on. But so we’re, as I close out every podcast I give I give my guests an opportunity to do a shameless plug about anything you would like to plug

David: shapeless plug. Would you like to plug the. I’ll tell you our executive search firm is, has been, really doing well.

David: You can follow us. The DEJ group.com. That’s our website. You can follow me at David Edon jr.com. So I have a little site that I keep and I’m on Twitter and LinkedIn and Instagram and all those things. So if you ever wanna follow me and see what’s up, what we’re up to, you could do that as well.

David: But no, we just appreciate the opportunity to have the conversation and we’re gonna. Looking for the talent that people say that’s not there and it’s gonna keep showing up cuz I’m gonna show them where they are. And hopefully they’ll take a chance of these wonderful people and make their organizations better.

David: And I just appreciate you inviting me to be a part of this. So

Brent: thank you. And David, I’m gonna invite you back again because I feel like this is a conversation that could keep going and we could have spent probably three hours oh yeah, we should definitely plan on the, another future topic around this.

Brent: And. And figure out how can we all feel more

David: comfortable. Absolutely. I I tell you, I can help you with that now, but the thing about it’ll be painful at first . Yeah. It’s like that, it’s like that first shot you get when you’re little, you realize every 10 years you need a shot to keep that back, keep that immunity up.

David: So it’ll be something like that.

Brent: All right. Thank you so much. All right.

The Google Dashboard Genius with JJ Reynolds

May 28, 2024June 14, 2022 Brent W. Peterson

Have you ever thought about the actions you should take on your marketing data? JJ Reynolds (@JJReynoldsjr) helps to eliminate the guesswork by using Google Marketing Cloud. JJ shows how his team can increase MMR while measuring the customer’s journey. He describes how you can take your data from your CRM, Google Analytics, and cart platform and turn it into a real-time data dashboard for you to take action on. This is exciting stuff for both B2B and DTC marketers.

Transcript

Brent: Welcome to this episode of talk commerce today. I have JJ Reynolds JJ, no relation to aluminum foil, but still a great last name. JJ is a marketing and analytics expert. JJ, go ahead and introduce yourself. Tell us what you do day to day and maybe one of your passions in. Hey

JJ: thanks so much for having me the first off, my name is JJ Reynolds.

JJ: Again, no relation to Reynolds rap at all. But I run media authentic, which is we’re a small, nimble team of data analytics marketers. So basically we help marketing teams report on their numbers from everything from customer acquisition costs to stick and churn to how well your Facebook ads are doing and everything

Brent: in.

Brent: that’s great. Thanks. So today we are gonna talk about customer acquisition. I would like to talk a little bit about the difference between D to C and B2B in an acquisition cost. And, but I’ll kinda let you drive some of that, some of those topics maybe just tell us what are some of the misconceptions on acquisition costs, especially from a

JJ: merchant point of.

JJ: Yeah, definitely the biggest I guess misnomer around customer acquisition costs it comes on both of those customer side and the cost side. So in order to have customer acquisition costs, you have your happy customers and you have to have your costs and you have to divide the two. Just for everybody listening that didn’t know what we’re talking about.

JJ: The both of those things can be defined differently. At every level of an organization, whether you’re a small, nimble team or a big like hundred person team is a customer, a free subscription. If you’re a SAS company or a $7 makeup brush, if you’re a, an e-commerce company. And on the flip side so like basically to start off, is that a customer, right?

JJ: Is that defined as a customer, to everybody in your entire team? And you need to get everyone on board with that because I’ve seen big tuffle and curve ruffles and all types of things happen about defining what that customer. Is so once you can define that, I’d say, write out on piece paper, then you need to define costs, right?

JJ: So is cost your ad spend? Is it your marketing team? Is it the agency running it? What is the definition of cost? Because the agency or your marketing team. if you’re running ads, which is the most, the simplest customer acquisition cost you can have is the ad spend divided by customers. Once you define what a customer is that’s the easiest thing, right?

JJ: And so if you can define what your costs are, if you’re gonna use ad spend, if you’re gonna use marketing costs, because in theory, marketing if you’re having a person running your ads, that’s a cost. If you could define that next, then you have a great baseline because someone just asks what’s a better what’s the good customer acquisition cost and for market eCommerce or make or SAS.

JJ: The answer to that question is better than it was yesterday. That’s the answer to the question because everyone’s trying to get a lower customer acquisition cost. And so that, that’s my thoughts in broad strokes about. How to simply go about it and have the least amount of confrontations at your organization company, or even like small business, depending on the size.

Brent: Yeah. So we’re talking here, we’re talking, maybe a D to C customer where you’re trying to get as many people to, to to purchase something. And what does it cost to get that customer? I think if you, if, then if we dig in a little deeper it’s, if they’re gonna buy something else, that’s. Average customer value or average average customer length. Tho those things also play in to that initial cost. And then if they’re buying a subscription or if they’re just buying a hairbrush. I don’t buy a lot of hair brushes and I don’t really need a subscription for one, but I would imagine there’s people that buy hair brushes, I’ve never bought one.

Brent: But having said that it is PO there’s a different once you’ve acquired them, they’re worth, every customer could be worth different. So you also should define how much you should be spending potentially, cause if you have a subscription that, that the acquisition cost could be higher, but.

Brent: Total customer value would be higher.

JJ: Exactly. And my favorite metric to have on a dashboard for that exact question is what is the like cycle you expect? And what’s your What’s your not like a stick rate, but what’s your rebuy rate or repurchase or reengage rate. So for example, if you’re a pool company selling chlorine it’s gonna be a year, right?

JJ: Every summer people are gonna buy it. So you should say, Hey, we acquired a thousand customers this summer or in the month of June or whatever it might be. When did they buy next? Probably next June. They’re not gonna buy in July cuz they just bought like three months of pool supplies. And so what you need to do is you need to look at the next buy. So the next June, how many of those customers that you acquired in June, 2020 bought in. June or summer 2021. And then if you say, oh, 60% bought again. Now we got something to go off of. If we can say every year, 60% is who reengage with us, rebuy, repurchase, re give us money.

JJ: You have a much better way of saying projecting the future of what’s gonna happen when you acquire today. It’s a very loose metric, right? We’re not like looking exactly this percentage, this number like from a SAS, like standpoint people. Do that. But that’s usually really the most helpful and I guess actionable.

JJ: Oh I cannot hear you

Brent: most important thing. There is to get the number of staff, establish a baseline and then see where you’re improving. So you’re right. That number is flexible and it’s not a set number it’s different in every industry. I think that you’ve mentioned gauge a few times.

Brent: The most important thing then how do you get them to engage on something?

JJ: Yeah. I, again, I would love to, to play with definitions of what is, what does engaged mean to different people? Because marketers I love us all. Like we all love to make up new terms of what different things mean. So at your what, whether you’re trying to engage someone to do a bajillion different things, right?

JJ: You could have them engage with a blog post, which is. The blog post, and you should measure for that is Hey, let’s see how hit 90% scroll on our blogs. And then you can measure, there are people who are reading your blogs. There are page views of your blogs, because page views just means someone clicks on something and need a good title.

JJ: Doesn’t mean your content was actually helpful. From a reporting standpoint and from. A measurement to then action, right? Because reporting is only useful. If you take an action on it, at the end of the day, doesn’t matter. How pretty the reports look, how bold the numbers are.

JJ: You need have an action. So whatever the engagement metric are, whether it’s reengage with a product to say you, you sold a, an RC car and you wanna sell the upgraded wheels. Like you could have them reengage and buy. Set of wheels or to just have your content marketing, be like, we’re gonna try and get our entire email list to at least read one blog post to the end, the, to the end of it.

Brent: Yeah. And I think you’ve brought up a really good point about engagement and how that is different from taking the action. I can remember a client that we had that had a huge amount of volume on their site, like a million views. and their orders were 400 or something like that. They were just using their site to display information and they’re driving people to retail where they could be taking advantage of action items on that to make them buy something.

Brent: And I think what you’re saying, and what I hear you saying is that the engagement part of it is important, but then during that engagement, we want to take, we want them to take some actions, right? So maybe you could go into what are some of those actions? Typical merchant could do or entice them in that engagement to take those actions.

JJ: Yeah. Like I love breaking it down to a customer journey that you can actually measure. And then ultimately that you can like, again, action on it. And so the biggest fail point I see in most eCommerce, like every business, every single online is just. The default metrics that are given to you by any platform of conversion rate, right?

JJ: That’s a big thing everyone talks about. What is a conversion rate? Is that number of people who you hit your site to purchase, or is it number of page used to purchase number of sessions to purchase number of product detailed views to purchase, there’s so many ways to slice and dice that, that we wanna make it.

JJ: Sure. It’s hyper focused. You like the action taker, can actually dive into it and say, Hey, this is the problem. So what I personally love to do is take every page of a website and define what the goal is of this page of your website. So for example, a blog post, what is the purpose of this blog post?

JJ: And it might be different. Everyone has I just wanna have like epic content that people read that could be the goal of the blog post. And to have people understand who the brand voice is. Some people write blog posts to have call to actions like every 300 pixels. And so if you wrote that thing, okay.

JJ: Let’s start at the top. You have, remember who saw blog post, like page used. Page loaded. You might wanna do 20 seconds on page people who stuck around. They’re now aware that you even offered a blog post, you even had that to be there. I usually use engage as a 50% scroll, so Hey, they engage with our content.

JJ: We know they actually like. did not just leave immediately. They investigated usually to say, Hey, they saw a call to action or whatever the goal was for at least five seconds. So if you see your call to action, you’ll blurb there. Boom, five seconds. Now they’re like in they’re investigating what the heck is happening.

JJ: And then initiate is, took the action that I wanted them to do. So click the button. So now. If something is broken, safe, for example, your content sucks. You’ll see impression to engage terrible dropoff rate, right? You they’ll just be like, oh yeah, 90% of people didn’t scroll 50%. Doesn’t matter how great your call to action is at the bottom of your blog post.

JJ: No one saw it. So that’s like my actionable journey, for lack of better terms that you can really start to dive into immediate. Yeah.

Brent: Just a sidebar. If you’ve ever looked at a recipe and you’ve looked it on your mobile phone the content layout shift, cumulative layout.

Brent: It takes into that account horribly when you’re going through your recipe. And you’re getting a popup ad, that’s changing every 10 seconds. And that’s a negative on that, but I love this four step process. So page views. Amount of time. So you said 50% scroll investigating. So where are they going?

Brent: And then and then action in initiating an action. That’s they, I think that just really boils it down in a nutshell. Yeah. And then how do you, so you help, you would help them determine where that drop off is. And so it, maybe if it’s under investigate, how would you help somebody to increase that, that percentage?

Brent: Yeah, like the

JJ: easiest. We’ll help people like set this up, cause by default, none of this is being collected aside from like page views, right? Like most of the time, not all the information is being collected. So that’s of step one is defining all these terms for them, for a client of ours or even talking with somebody over the phone.

JJ: But what the goal is that these numbers jump off the page. And so if you go say for impression to aware. and we normally see like a 90, like 95% continue, 90 to 95%. If you’re at 80%, there’s a problem with your above the fold content. Like plain and simple that’s it like above the fold, something’s wrong with the expectation of what someone was expecting to see.

JJ: And then each step, we have some kind of like benchmarks depending on the industry and also just like intuition where you’re like if we make it into a funnel chart, you’re like, it let’s see a nice, beautiful tape or fall off. And if you’re like, whoa, that thing got really like skinny, fast.

JJ: Let’s go see what, like, why is that the case? Was it the fact that. We had a YouTube video that no one’s watching, that’s taken a half the screen. Was there a popup that’s happening at 15 seconds that makes everyone leave, seeing that happen? Not a fan of popups personally. And yeah, that, that’s where the actions come into play.

JJ: You see these percentages and then if they’re not what you would expect then you have to go in and hop and make, hopefully make a change that is very easily tied to those percentage.

Brent: Yeah. And I like that. I just to, for the listeners who don’t, I think above the fold and below the fold is pretty obvious.

Brent: So you’re saying 80%, if they drop below, you’re talking about a bounce rate, right? So that first time they land, if they pop off of it without doing anything within and 80% of those people are popping off that, or more than 80%, that there’s something that’s wrong with the visible section that somebody sees, as soon as they land on that page.

JJ: Yeah, exactly. That and bounce rate is like my least favorite, like thing, because by big default, just for everyone listening, who’s seen bounce rate, right? Like it’s a metric that a lot of platforms will give you. Bounce rate is normally calculated by people who load a page and then do not continue. There’s no other events on a page.

JJ: So what that means is someone could read the whole blog post, sit there for 30 seconds. but they didn’t do anything. They didn’t click on anything. They didn’t go anywhere. So to Google analytics or whatever your platform is, they were, they bounced, they read the article and left. They didn’t click anything, but that was great.

JJ: Like they read the whole article. So that’s something to just consider is how define bounce rate for how you like the listener. Want to determine it? Like we use 10 seconds, that’s it like 10 seconds. And we have an event that fires that then. This person didn’t bounce. So you could say 30 seconds, you could say they have to scroll 10%.

JJ: You can define it. However you’d like to, by default, I’d say it’s not the most useful metric, because a lot of people probably are engaging with their content.

Brent: that’s interesting. So are you saying then, oh, so if I’m the merchant, I have access to my Google analytics. I’m seeing my bounce right on this landing page.

Brent: That’s super high. Does Google analytics have the ability to tell you, are we looking then at how much time they’re looking at each page as compared to the bounce rate, then you can still get that out of Google analytics.

JJ: It. Yeah. So by default and we’re getting it into technical technicalities now.

JJ: Universal analytics, which is like the current Google load platform. Doesn’t how, like, how they calculate time is basically the distance between two different events. So event one happens of page view loads, and then event two happens of clicks to product. And then it calculates the time between those two event.

JJ: if there’s no second event, they never click to a page. The time is zero. And so which, for example, if you have a blog post that was saying like how to fix your sync, right? If you have a very hyper specific problem of like you are a plumber and you’re wrote an article of how to fix your sink in five minutes and your article is the best, it just says it clearly, like this is your problem. This is how you fix. And there’s no action. They’re just awesome contents. People who load the page, look at it, read it, and then leave bounced. They read the whole articles stood there for five minutes. , but then there’s no second event for Google analytics, universal analytics to define the time.

JJ: So that’s like a very technical thing. Just wanted to make sure everyone knew that Google a looks for, which is the new version coming out soon. Or it’s already here, but the new it’s gonna be launching the next like into production, I’d say in the next little bit does it solve that problem, but just wanna let you know for.

JJ: The current state of affairs, that’s how it is defined.

Brent: no, I think that’s really interesting. And I think there’s so many I know that there’s so many merchants that are probably looking at their Google analytics and saying, wow, this page is terrible. It’s bouncing right away. But people are really only looking at just one page they’re not looking around.

Brent: So maybe some. Some tips on how to get around on, I’m assuming first thing is to have some called actions at the top of the page to get some, to push to the bottom of the page and just get some to engage

JJ: on the site. Yeah. I’d say the number one thing is define. the purpose of every page of your website, right?

JJ: What’s the purpose of this? Because for example, you could have a blog, like the plumber example I just gave that’s like all these things. And the goal of that, the purpose of that article is to rank number one in Google and to build retargeting audiences for your ads. All those people are having plumbing problems and you wanna build lookalike audiences of these people.

JJ: Because you know that they have problems, that could be your purpose of the page. Is that, so define the purpose of your page if it’s a product detail page, if you’re like for all the eCommerce people, where it’s like, Hey, buy this water bottle, what’s the purpose of this page to get them to fricking hit the buy button, or add the cart button. And so you wanna make sure that you’re measur. For that, but then every step before, like they engage with their carousel. So define the purpose of your page. If it’s a blog, if it’s a piece of content, some blogs are very much more call to actiony where it’s like, Hey, here’s how.

JJ: If you’re a plumber, here’s how to do this thing, buy this part, right? This part will solve your problems. This is how you solve the like world piece, right? Click this button. Then you wanna measure for that button click and if people saw the button to begin with so that’s probably the most actionable piece of advice that like everyone can do.

JJ: Just audit your, every page of your site to be like, what’s the purpose of this page. And is it achieving that if it’s not, let’s delete it or let’s fix it right.

Brent: I like that. I, I think deleting it I suppose deleting, it would have some organic search that somebody would land there and then they’re like, this makes no sense to me and I’m gonna leave.

Brent: Would it be better to have it still and, but updated or make it try. Try I guess the point of where we’re really making here is we always wanna measure, we wanna create a baseline and then continue to measure and investigate always. We don’t wanna just stop. We don’t wanna leave something stagnant and there so you know, I’m interested in the second part of your journey, the 50% scroll.

Brent: Does Google analytics measure that the current version, the G GA universal, or do I FDA have a different, does the consumer have to have a different tool or the merchant have to have a different tool to do that part of it?

JJ: Yeah so there’s kind of two tools that work hand in hand with each other Google analytics, which I like to say is like the.

JJ: Data storage, right? It’s like your warehouse of where all the information that you stored live, but then there’s another tool called Google tag manager, which is what tells Google analytics, Hey, store this piece of information, right? By default, it collects a few things like page views, some platforms like Shopify will add some extra pieces to that.

JJ: But at the end of the day, you have to explicitly tell Google, Hey, I wanna store this information and you do that via Google tag manager. And it. Like impressive as far as what you’re able to do. I just mentioned all these metrics. So you probably have never even thought were possible. But you can measure for example, did someone see something like what we do call to actions, right?

JJ: If there’s a call to action box, we want to say how many people saw this call to action for at least five seconds. And then how many people clicked the call to action . So then now. You have a much more actionable thing of saying let’s change this call to action box to then improve that.

JJ: But by default, no, not many of these metrics are collected out of the box for nearly all analytics platforms, right? Whether Google analytics, Adobe analytics any of the other platforms, not usually collecting that.

Brent: Yeah. And I just we won’t get into technically again, but the Google analytics free version, doesn’t actually.

Brent: Report all the data reports, a subset of the data. Is that correct? Still like it’s doing 60% of your data. There’s a certain amount that it doesn’t report.

JJ: Yes. And it depends on how many events that you’re storing. Most of the time you’re pretty much good to go. Like I’d say unless you’re like.

JJ: Doing significant volumes of like 10 million hits per month. You’re gonna have pretty much the, like all of it there, and then you’d want to use a tool to make sure you have the action, of like, how do you wanna visualize this information? That makes sense to you? That’s the, like the last piece, like the top of the iceberg, right?

JJ: Is how do you wanna actually visualize this? Because row and columns are only. For some things at the end of the day, you might want to have a nice little funnel that says, whoa, how did people view this content for each stage? And what’s the dropoff rate.

Brent: Yeah. That, that brings up a really good point is like, how do you report to your boss what’s happening on the website?

Brent: And then maybe how do you get your boss to actually read it?

JJ: Yeah. And for that, like I am data studio is my go-to. Like we use that power users of data studio even have an entire free blog with nothing to ask of data studio.vip. Which is, there’s not even a, you can’t even give money if you want to.

JJ: Data studio.vip is what we like. I basically, I just post about how to visualize things for your boss and for clients. Though, number one thing, just hot tip. If you’re visualizing any information is what is the one takeaway from that report? And what is the action you’re gonna take from that take.

JJ: So that’s it. If you can define those two things your boss will be like, oh, I understand this because you are gonna be very tempted to be like, look at this really cool thing about Hey, you want mobile? We actually do X, Y, and Z. If there’s no action, it’s useless. Like you can collect information out the Wazo, but if there’s no action might as well just delete the report.

JJ: And I’m like genuine on that part. Like I’ve deleted pages of reports that we have, because there’s no action behind it. So we need to rebuild that to make it action. .

Brent: Yeah. And, I think the boss is always gonna look for what, how does this affect my, the bottom line? So those actions are gonna lead into something.

Brent: And I think that you’ve brought up a great point about how you present that data. And maybe you could come up. Maybe you could just share maybe the five top points that somebody should be looking at when building out a report. There’s always something they should do. Like they should be looking at actions.

Brent: but what are some other data that we should be seeing in a report? And then when is too much data, is it possible to have too much data for a boss?

JJ: It, yeah, it depends who the stakeholder is. And I like to define this as far as I’m gonna call it C-suite but like the highest level of reporting who they’re not like actually practicing the thing, but there’s a, C-suite, there’s a manager, of like person who’s over that. Then there’s the practitioner, those three levels, you can define them. Like I use Csuite just for clarification, but the highest level, a mid-level and then the practitioner. And so the practitioner’s gonna want all the nitty gritty details, because they’re gonna say.

JJ: For example, Facebook ads. What’s our clickthrough rate of each individual ad. They’re gonna wanna know that so that they can tweak each individual ad to improve those clickthrough rates. The C suite does not care about each individual ad at all. They want to know how are we doing overall as far as clickthrough rate, as far as Even just rev, spend to returns.

JJ: And so define who your stakeholder is first and then take the one takeaway that they should have. So for example, if it is a practitioner maybe like, how are we trending overall? Month over month because they usually don’t look at that. So that might be useful report for them to be like, Hey, we’re trending upwards.

JJ: And then they can go to their manager and be like, look at this guys. We’re fricking crushing it. Whereas a manager might wanna say, how are we doing on each individual platform by broken down. And then the C-suite the top level might wanna say. How are we doing it as a company, as a whole, for all ad networks or whatever it might be.

JJ: So define the stakeholder is number one, priority. Number two priority. Define the simple the easiest answer. That is to the question. So define the question first, then the answer. And then if you can pull the action into that that’s gonna be ideal the higher up that ladder. You go though, the less.

JJ: The actions to be less defined right at the C-suite like the action is whatever they, the C the CEO or the C-suite wants to do. We’re trending downwards. How are we gonna fix that? That’s not me as the dashboard builders problem. That’s the C-suites to figure out how

Brent: to fix that. . Yeah, so visualization, it could be a pyramid, right?

Brent: The less data at the top with the most important data. And I guess it’s, just like it’s important to get what is success in a, in a software project you want to get what success from your user at the end of every sprint you wanna know what’s successful for your boss. What do you deem as success?

Brent: and then just give them that data. And if you start giving them a whole bunch of data, then some of that success gets watered down. So if you look at a, if we’re looking at this as a pyramid the the highest level, the C-suite is gonna wanna see that boil down data at as they define it.

Brent: And then I suppose it’s step to the middle management or somebody to tell them. This data’s also important. We should look at that. There’s some education involved. Maybe you could talk about how to educate people as. yeah,

JJ: I education’s gonna be the big piece of this. Cause a lot of people, whatever you reporting on, whether it’s your CRM information, your eCommerce information, even your like your warehouse, if you have a warehouse as far as shipping, as like, how are we doing as far as stock to like capacity. Are we like running outta products or are, is our, all of our warehouses full, right. That could be a very useful report for somebody to know Hey, we can actually add more products to this warehouse. It has capacity. So at the end of the day, you have to define what are we actually looking at?

JJ: Are we looking at e-commerce stats? Are we looking at warehouse stats? Like a number I tell you 823,000. That means nothing to everyone listening. You’re like that’s a lot. I’m like 823,000 pixels, like on my entire website. Ah, not that much. You to define what it is that you’re talking about to whoever it is you, because if you build this information to you, it’s intuitive.

JJ: You’re like, oh yeah, of course this is good. You got 823,000 pixels. Awesome. But to somebody else, they’re like, I got no idea what this means. So the more you can do to either in your, if you’re building a dashboard or if you’re building something report, a PDF, whatever it might be try your best to simplify the explanation of what every metric is and how it’s defined.

JJ: You like I mentioned, engage, engage. What does that mean? What is engage? So you can define that for the end user. So hopefully it allows you to hop on less calls, as you as the data dashboard builder collection reporter.

Brent: Yeah. And I think going back to a developer conundrum, getting you as the practitioner, sometimes you get caught into what you’re doing.

Brent: And you forget that all this granular things you’re doing, maybe they’re not that granular when it’s put together makes a nice pyramid, but sometimes nobody cares about the little tiny piece that’s at the bottom. What they care about is how does that piece affect the top and then explaining that.

Brent: And then that’s, where the middle level comes in to help boil down what really needs to go upstairs? Yeah, go ahead.

JJ: Exactly. Yeah, exactly. That my favorite analogy is it’s a bunch of. In order to have a beautiful report for that’s super actionable for somebody, whether that’s a practitioner or that’s a manager, or that’s a C-suite level, that’s gonna be the last domino to fall over.

JJ: Is that beautiful dashboard. The first is building a website, right? That’s like your first thing. You’re gonna have to have a, or building the data collection system of however, you’re collecting all this information that we’re talking about. And then you’re gonna have to have a way to report on it, to store it, all these pieces action.

JJ: So each domino is gonna push the next domino down that hopefully if you can line all those dominoes up to begin with, then you have a really streamlined way to get point a to point Z really fast, but it’s knocking that first domino down. So that’s the way I can most easily define this entire process.

Brent: Yeah. So I wanna just talk a re just briefly. I know that you’re a videographer, correct? This this idea of adding video to content and adding content or video content to products, and then having that as part of your content action where are you seeing that going? Is that it’s been around, but a lot of, I, I’m just gonna say a lot of merchants Haven, an adopted video, like you would think they should.

Brent: How important is that? .

JJ: Yeah. Just for everybody listening, like I used to I shoot, I shot videos for production for a while. So I’m very familiar with the video process as far as on a site, it can do both pros and cons and that’s where the biggest thing is to say, define what we’re trying to do.

JJ: And the biggest, if you’re trying to educate really quickly and there’s a video. It might be a great use case, right? It might be an awesome use case to define who you are, introduce your team, introduce what’s happening. How’s what’s about to go down by your next action. I’m a big fan of that personally.

JJ: But if everyone’s on mobile say for example, you’re a lower A ticket product or maybe it’s a less investment right. To do. And someone’s a soccer at a soccer game watching their kid play a game. They’re not gonna watch your video scrolling through during halftime. There’s not.

JJ: So if that’s the use, if that’s like where people find it, like not a great case for a video. But if it’s like, Hey, everyone’s always browsing on desktop because they’re trying to solve this problem because they need to do X, Y, and Z. a video might be an awesome use case. So I just defined where the user is in that journey of like, where would they physically be?

JJ: Is usually my biggest tell. And are they on a desktop? Because mobile’s usually not the best. And then a video might be an awesome. Use case.

Brent: Yeah. And it would be good as supplemental information. And would you, maybe in a stacking and a responsive version, you could push the video to the bottom of a blog post if you want to have it on there, but still want to have your main content for people to read through.

JJ: exactly. Yeah. And I love to measure you can measure via tag manager, people who play your video. So then you can say, Hey, here’s people who saw the page, right? People who played the video, people who watched 50% of the video, and then you can say, is it worth it for us to invest in video? We actually had a client that was like, we’re going all in on video.

JJ: But we were gonna test it with, I think, five production, like high production videos education content, and. I was like, cool. Let’s define what success looks like first. So for these first five videos, you’re gonna invest a lot of the time money effort into what they’re like. Okay. If 50% of the people that hit this page watch 50% of the video success.

JJ: Awesome. We’re gonna do basically and success, like we’re gonna do double down on this. We’ll make 10 next month. It was like 90% of people watched 70% of the video. like just knocked their benchmark out of the fricking park. And so if they didn’t define that up front of what are we trying to do?

JJ: It’d be super hard to take an action on that because we did, because we’re measuring it because we had all these dominoes lined up. Now they’re like we’re doubling down next month and we’re gonna even have more content people to en engage with. And we’re just gonna keep measuring it to say, Hey, if we ever drop down to our 50%, 50%, we’re gonna either slow down or reevaluate it.

JJ: So that’s a very actionable, hopefully actionable, or at least real life use case of video.

Brent: Yeah. And I think at least YouTube anyways people sometimes get stuck on YouTube and then they, instead of going back to Google to search for something, they’re just searching for more videos on YouTube because they’re enjoying it.

Brent: And I know that some of the merchants have put up content just to drive traffic from YouTube to their site. And then you could also embed that video with your product. So anyways, exactly. Yeah, so we have, couple minutes left here. If you were to have some insights on marketing trends for a D TOC right now, what would you, what would be a nugget you could give a merchant going into the last half or the second quarter of of 20, 22.

JJ: I’d say defining what you’re trying to do is gonna be really important moving forward. It used to be super, super easy to do just about anything online. There was no competition. There, mark, the, there was a blue ocean of for everyone who’s read the blue ocean book would reti really recommend.

JJ: So it was super easy to do anything. You could basically throw money. And make money back and you’re like, oh cool. This is gonna be awesome. So the biggest thing I’d say is define what you’re trying to do and what success looks like to know if you’re gonna keep doing more of that, or if you need to shift paths and what the minimum amount of effort required to get an actionable result is because a lot of people entered online in the past 18.

JJ: That’s a fact so you have more competition online. Whether that is also good, because now consumers are much more understanding of the online process. So you have to define what is the good enough for us and how do we improve that so that we know that we’re improving. And then how can we All the metrics that we’re trying to increase because that’s gonna be key in the net, like moving forward.

JJ: You’re just gonna have to be on top of your game as far as knowing your numbers so that, if you swung and you missed to not do that again, because you can swing and miss that’s. Totally. Okay. Just don’t keep swinging and missing. .

Brent: Yeah. Yeah. So yeah, I like that defined success. And again, in, in in the software world, defining your success at the end of every deliverable or what is the deliverable I think is a great way to look at it.

Brent: What is the success out of this is is really good. And then I like that minimum effort. What is, what can we do at a minimum to get to what our success is? And then what is overdoing it? I think you, you said Briefly got a video again, you could spend $20,000 on a one minute video. Would that be worth it?

Brent: Or should you just go out and get yourself a GoPro and make some fun, fun video on the road that would get you the same effort for very little cost? That’s good. JJ, as we finish out, I always give everybody an opportunity to do a shameless plug about whatever you’d like to plug. What would you like to plug.

JJ: Yes. If anybody has would like to build out more visualizations for what you’re doing. Data studio.vip is tons of free resources on how you can do this for yourself. We’re building that out as we speak lots of awesome content. If you want this done for you, anything that I’ve spoken about media authentic.com.

JJ: Sure. There’ll be like a link in whatever bio we’re talking about here. And we can figure that out for you, but W feel free to connect any way. You’d find.

Brent: Yeah, and I’ll put those I’ll put those URLs and contact information in the show notes. And I’m a big fan of data studio. So data, studio.vip, I think is great.

Brent: Thanks for that. JJ Reynolds thanks so much for being here today. It’s been a great conversation. We didn’t even get to B2B. But I think this is super valuable content for any merchant that wants to do. I I think you’ve made it easy to understand, and I think this, that four step journey for a client or for a merchant to understand what their clients are doing, what their users are doing are really important.

JJ: Yeah. Thanks so much for having me Brent. And if we ever need to talk about B2B, let me know, because we’ve got lots of examples on that as well.

Brent: great. Thank you so much. Thank you.

The Real Kid in the Bulk Candy Store with Ken Shenkman

April 23, 2024June 7, 2022 Brent W. Peterson

Have you ever felt like a kid in the candy store? Imagine if that was your day job! This week we interview Ken Shenkman, who has been running his family business since 1992 and is on BigCommerce.

Nestled in sunny South Florida, The Bulk Candy Store sees its staff as family and its customers as close friends. Bulk Candy Store has been helping celebrate memorable events with sweets and snacks since 1992. Every day is a celebration, and sharing those moments with the people we cherish is priceless. Whether you are ringing in the New Year or just gathering to make merry, the Bulk Candy Store has all of the sweet treats you need to make the special occasions of your life exceptional.

After all, Candy is Happy

@bulkcandystore
Perfect Peanut Butter Cup ??#bulkcandystore #candyishappy #colossalpeanutbuttercup #delicious #giantpeanutbuttercup #fyp #madetootder #foryoupage
? original sound – BulkCandyStore

Help a Billion People with Reynaldo Santana

April 14, 2023June 1, 2022 Brent W. Peterson

Do you want to have an impact on the world and do something to better it? Reynaldo Santana helps us understand the complicated maze of the Non-Profit Google Adword program and how he helps non-profits to better themselves through these online tools.

Reynaldo is a former tech executive with 10+ years of experience working from corporate to small-medium businesses, to non-profits and start-ups. Managing a budget of 30MM and teams worldwide. Reynaldo is a serial entrepreneur, investor, speaker, philanthropist, and author on a mission to impact 1 Billion lives by using what he has learned along his journey.

https://www.linkedin.com/in/reynaldoasantana/

https://www.impactannex.org/

Transcript

Welcome to this episode of Talk Commerce today I have for Reynaldo Santana. He is an entrepreneur and the founder of Impact Annex. Reynaldo, go ahead. Introduce yourself. Tell us what you do in your day-to-day life and maybe one of your passions.

Thank you so much, Brent, for having me here today and everyone for listening today.

Happy to so who is Reynaldo Santana? I am still one who was born in Lawrence, Massachusetts I’m a serial entrepreneur. Investor, I’m an author. I’m a motivational speaker for young people. I am second generation here in the U S my parents came from the Dominican Republic.

So are we going to that I do is new and the first one in my family is pretty cool. It’s like a journey or an adventure on everything that I do in life. So it’s pretty awesome. But aside from that my background 12 years working in the tech fields I used to live in Mexico, San Francisco, California.

I did some time in Florida and Columbia, Venezuela. So I’ve been everywhere as well. One thing that I also like to do and to share with everyone is that I’ve been playing the trumpet since the age of seven. So I’m a musician as a hobby and also. So I do love music a lot, and I love to travel, like to eat food.

You can consider me as a chubby guy. And you see me in the street, not that big, I’m a chubby guy, but if you read, come to Massachusetts, hit me up, happy to grab some sort of food or

drink. All right. Yeah. Trumpet. I played trumpet in junior high and I still have my trumpet.

I was thinking about putting up on the wall behind me and I’ve played piano all my life. So two things had common already. The Minnesota twins have a large following in the Dominican Republic for their baseball players. And I think we have what towns for the wolves that is from there.

His family’s from Dominican Republic anyways. So true. I’ve been there a couple times. Done some work there anyways. So let’s get talking about Impact Annex. What is it, what do you do?

Within these past 12 years, I’ve had the opportunity to be a business owner myself and work for a few startups started my owner startup as well, worked for corporate small medium businesses.

So had a chance to really understand the different types of pain points that a different size or organization can have and understand how sales and marketing works as well. And actually wrote a book on 2016, it’s on Amazon, on catching up to millennials because technology doesn’t wait for anyone.

It keeps evolving over and over. And we have to keep adapting as business owners. That’s not easy, especially if you’re a different generation. So things are moving very rapidly. So in that book, I it’s explaining. The history of marketing sales and how that’s changed into this thing called inbound marketing which, people today are now creating a lot more content to be found and to build that trustworthiness with the consumers, because we can agree that consumers have also changed the way that they buy today.

There’s a lot of due diligence in the process now of buying a product or service beforehand. And people like to now go onto, Google or Yahoo or something to look up the person’s name or the company’s name, and look at reviews that there’s different types of checklists that we all do now naturally, before you buy something.

The idea of Impact Annex came about. It’s time that we normally understand that this is where things are going, but it’s also a shift in mindset. I went to business school, I’ve been a business owner. I worked in different businesses and it’s really the same thing where it’s pitch your product, pitch, your idea pitch sell push.

And then it becomes a knowing at some points and people would like to be pushed. And so I’m on a mission to impact 1 billion people out there. And with the message of you should give before you receive. And I’m sure some of us have heard that before from, our grandfather or grandmother or charger committee members overall.

And it’s true. If you get. First before you receive great things, come out of that. And that’s what impact is all about. It’s about giving free receiving, and I showed that mindset shift and I use different tools to help people thrive and be a thought leader and stand out. So going straight to the point, what is Impact Annex?

Is basically we in an organization. That helps organizations create a philanthropic arm to their business or to the organization. Now, does that mean basically let’s take a for-profit organization, for example. I would come speak to the owner and be like, Hey, what do you care about? What kind of causes that you really that’s close to you?

It can be the red cross. It can be, saving animals, saving children, you name it. What’s that special thing that’s close to your heart. And typically they’ll tell me what that is. And if they don’t know what that is, I can tell them, what have you ever thought about giving back to community by just teaching people?

or what you do for your for-profit. So rather than pitching and selling your service and products, why not teach people about your products and services and how you help people and what are the pain points that you’re trying to solve and become look and be like, huh? That’s a different angle.

What is, and so once we come down to, all right, so this is what we’re going to do. This is the cause that you’re going to focus on. I file and register a nonprofit. On their behalf, it can be in the U S or it can be in Canada. And once we have a nonprofit set up and once we have the. Targeted or, all set with agreed upon.

I tend to focus on a particular grant that many people don’t know about Brent, and that is that there’s the Google nonprofit program grant and Google provides nonprofits with $120,000 with Google ads. Every single year for a lifetime, which is remarkable. Number two, I found out that Google only works with one partner.

In this to validate nonprofits and their contexts when they’re a global organization. And if you don’t do that application well or correctly, you can get denied and you can no longer apply to Google which is unfortunate. And then number three is Google does, is they don’t provide good support on this.

I Their website is nice and shiny with testimonials and everything else. They tell the steps on how to do this, but it’s harder than you think it is. And all they have to offer is heavy documentation. I don’t know why, but that’s what it is. And we all know that this many people have lost many people out there who are not technical to understand these documentations.

So that’s where we come in as well. You can do it yourself or you can have us help you do this whole process. We have a hybrid model, which is a done for you. And you do it yourself as well. So we teach you there’s a video series and you can submit information to us. We can take a look at it and we’ll give it back to you to submit.

And you have weekly support from us and support is live on Facebook. And also we give you best practices that do’s and don’ts so they won’t interrupt your grants. And also how to scale up and optimize your ads. It can be found on Google and on the front page. Now for a for-profit you may be asking, oh, thanks.

So how does that benefit me? I By doing that, okay. I have a nonprofit now, what we’re going to as grants. The several things you can do you can test ads. $10,000 per month to test ads is enough money to make you dangerous. What does that mean, basically? You can test different markets, different age groups, races languages.

countries, nationwide different states. You name it. You can test different things out and whatever works. Take that and optimize and skill up right now. How do you make those, both those non-profit for-profit work together, right? I’m sure that’s one of the things you guys are thinking about right now, it’s basically when you have your nonprofit.

So for profit, for example, is Joe’s plumbing, right? We create this academy called Joe’s academy for plumbers and what Joe’s gonna do. On his nonprofit, he’s going to create courses. It can be webinars presentations, just teaching people about plumbing, overall plumbing.

One-on-one. And what’s great about it is that when people find you online on a nonprofit, they’re going to one have access to your content to learn for free. And in exchange, you’re going to have a. Some sort of contact form or some sort of a form that says, give me your first name, last name, email, and we’ll give you access to our content.

Great. As you grow that mailing list you can follow up and be like, Hey Brent. So I saw that you downloaded my my workshop on plumbing 1 0 1. I hope you loved it. If you need any information, let me know. Or if you’re interested in a partnership or a addition to help, here’s my website, Joe plumbing.com.

Happy to support. Great right. Ciao. And what happens is, I We go on YouTube. We go to school, you name it wherever we get educated naturally would tend to have a respect for that person. That’s teaching us something. We see them as my meastro, or professor or someone that’s just of high authority.

That’s teaching us and we’re learning from them. And somehow like to partner up with them where we trust them. And that’s what’s happening in the backend is that you’re building your brands. You’re building your trustworthiness. You’re doing good will you’re doing great for your community. You becoming a thought leader in your space, you stick out from your competitor

and people naturally want to work with you because you have that. Non-profit where you giving first. So that’s really the strategy behind it. Is your for-profit does this, your nonprofit does this and they both support each other. Now that’s just for profit, for nonprofits that are existing, you’re already halfway.

Which is we just help you apply for the grants and help you understand Google ads and how to optimize it so you can promote your mission, help fundraising and basically get out there worldwide. So that’s what we do at Impact Annex.

I’m part of entrepreneurs organization. It’s a global network of entrepreneurs. There’s chapters in every city. There’s one in Boston. There’s one here in Minneapolis. We are using this grant. It is a non, it is five, I don’t know, five or something. Whatever’s and as a pure non-profit, there is no there’s no for-profit arm of EO.

It is effective on getting our goal is to get membership in our own local chapter. So I think what I hear you saying is that you provide the help for somebody that’s either already registered. Backing up, you would provide help. If somebody wants to create a nonprofit to helping them navigate some of those waters and creating it as that correct?

Yeah, we do all the fun administration on your behalf, in the U S or in Canada. Okay.

Get you all set up and running. Perfect. I think the exciting part is, and a lot of people don’t know about this Google grant, this nonprofit grant for ads is that once you become that, that nonprofit you are eligible to apply for the grant and start.

Using the Google ad network for that. And I can say here we rarely ever even use up our $10,000 a month. It’s a lot of ads to run for for entrepreneurs for trying to get people to join an entrepreneurs organization. But I think you’re also right. It does give them an opportunity for people to test some of these things.

Even as a nonprofit to learn to navigate how Google works. I did do that Joe’s plumbing thing. And I went through all those, and then my wife said, no, just I’m hiring a plumber because there was water everywhere. I never, it never worked for me, but I know a lot of people are going to be able to do the DIY plumbing thing.

So maybe walk us through how you would take an existing nonprofit and help them with the Google part of it, or just getting them on to the ad network.

Basically I actually had a workshop that we conducted three weeks ago for no 40 non-profits. It was great because I got to really understand what are the common pain points for these 40 nonprofits and a large majority of it was technical skills.

They were, non-profits already up and running and again, they also didn’t know about this Google nonprofit program even existed. Not only that, we walked through the steps and how to get this Google grant. And like I mentioned earlier, one of the things that’s getting through tech soup and once you get to tech soup, they give you this token that allows you to apply for this for the Google grant.

Now what some people could also miss out. Tech soup, they partner up with a lot of other large organizations, similar to Google, like Microsoft as well. And I’m on a tech suit website. They actually have a page for partners where you can look up all the partners that they work with, including Google.

And with this token that they give you only for 60 days to apply, you can use this token, to not only apply for Google, but all these other organizations, somebody give you free computers, they give you discounts and support and all sort of supplies that can be helpful for your nonprofit organization. We were short showcasing them that page of partners.

So they take advantage of that opportunities as well to support them. And then number two, it was understanding how Google non-profit program works overall because you’d be surprised how many people get the grant. And then two months later their account gets suspended or canceled because they didn’t know how to use it properly.

Like I mentioned, Google, they provide heavy documentation, but then to give you all the answers, they don’t give you a best practices and do’s, and don’ts that much. So we teach them not to enter a debit or credit card on the backend because that will interrupt the. We also show them the website policy that Google expects before they give you the grants.

Google has their expectations, making sure that it’s mobile friendly, making sure there’s no commercial activity or language on the website and a few other points there. That one has to go along that line. So we teach them to make, to make sure you go through that policy very well. And also we start teaching about.

Google ads can be very complicated for some folks, if you’re not really tech savvy. So we, create these videos to show them step-by-step how to use it. What each certain things mean, buttons, wordings what are keywords, so help them with the, define their keywords and also how to.

Use pixels to to track everything. Because if you know how to use a pixels and conversions, stuff like that, you’re able to cut track on all on your other social media platforms, how things work and attract the right people. Not just only on. So we do share best practices, so they don’t have to go through the headaches and they can get fast results less than 90 days and how to optimize their their ads.

Number four, we like to set up automation. We tend to use Zapier to do a automation things to make things easier for people. It can mean, Lee comes in, goes to your CRM and then it sets up a booking on Calendly. So all these automation things to make them much more efficient because sometimes if we don’t know about automation, we tend to hire more people and they can do those sort of roles.

Now there’s software that can allow us to scale up and do these sort of things. So we’d have to. Fund raise more money to find an additional marketing person. We like to save people money safe. People’s in terms of. And help them scale up and get to their goals a lot faster.

So that’s what we do for an existing nonprofit.

I know that one thing in your bio, you said that you help serve underserved communities. You help with underserved communities. Maybe tell us about how you’re helping in that. And maybe why those underserved communities don’t have the kind of access that.

You’re a fortune 500 company that wants to do a non-profit would have,

yeah. Happy to do that. So actually have a nonprofit here in the U S and a it’s called E S G housing Inc. Stands for environmental social governance. And our mission is pretty simple as to provide access to affordable housing

for low-income families and seniors. Now why is that important to me? Because I grew up in the projects. You could say, that’s the word we use it’s projects and I’m in Lawrence, Massachusetts. And I remember not having a lot of access to resources or education. I it was just me my family I, all I did was just, live there play game with the kids, really nothing else. I didn’t see any sort of, a lot of programs. Maybe I was too young. I don’t know. But what I do remember is, as I grown all these years and, diving into real estate and I’m still around these communities. And I have friends who live in these communities and they still give me their feedback and how things work.

People feel like they are, that the government is not working for them. And they show me around, so I created this this nonprofit, not because I’m also. But I’ve been in their shoes. I have friends who are in these projects. I have people who can’t find apartments I have on people who yes, they can find apartments, but also the too expensive.

And within my experience I’ve learned a lot about technology. I learned a lot about robotics 3d printing. And what I’m hoping to do with this nonprofit is to build a lot of affordable homes with a lot of green technologies and materials. That includes plastics instead of concrete and, create homes

under three months under six months, these are, that are very it’s going to change the game. I call it, the future of technology or future of construction. But it’s basically being able to build homes in a faster pace. Building homes that are safe building homes that have resources that needs access to education, access to programs nationwide.

So I’m gonna pause it, creating different partnerships to make that possible. So I’m serving those communities that are distressed and underserved, just how I grew up. Cause I know how it feels and I think today in America, there’s still a lot of opportunities, a lot of fems, other need, and a lot of communities that are still distressed.

And for those folks that are not in real estate these are called are call qualified opportunity zones, which are zones that need to be developed that the town or city they incentivize you to build schools shopping places, affordable homes, et cetera. And it also incentivizes the investors as well.

So overall that’s how I’m serving, serve communities. I grew up in and in other states is by creating affordable housing with these green technologies.

That’s great. Yeah. And I think if anybody has traveled to other parts of the world and I’ll point out Venezuela as particular, that there are areas in south America where there’s different levels of economy and emergence.

I traveled to Bolivia quite a bit, and I know that their economy is completely different than Mexico or even Dominican Republic. So the closer you get to the U S things get a little bit better, but I think we as Americans we get notified or you don’t understand what the rest of the world lives and how they live and how lucky we are.

And then how many resources we have to help our fellow brothers and sisters to lift up and and move up. So I applaud you in that.

Thank you Brent, that’s one thing that I am very appreciative of is I’ve been able to live in the Dominican Republic, live in Mexico, travel often to Columbia been in Venezuela.

And I’ve learned that there’s more to life than what we think and the different perspective that I’ve been through. And I seen, and I understand what hard work is. And I’m thankful that I grew up in, in my environment with my family, pretty humble. My wife is from Colombia from a third world and I’m humbled and blessed that I’ve had these experiences because it has made me who I am today.

Using Google Yahoo, just promoting things online. Practicing inbound marketing as well. So I think that a lot of potential to do good and to impact many people out there in many businesses.

Kept me humble for sure. And blessed to have what I have today and being, raised here as an American, but it has opened up my perspective on the opportunities and where the need is and where we can provide help. ESG Housing Inc and Impact Annex. It’s just the beginning. I’m planting my seeds here in America to boot case studies to create some sort of long-term game here.

But my long-term goal is to expand to these countries that I visited, because I’ve seen that, they’re still countries out there that still do business face to face. They use radio ads, newspaper ads, they do WhatsApp promotions right on his communication apps. And. They’re all transforming into the digital world as well.

So they’re all beginning to, create online websites that creating inbound marketing techniques offers, right? They’re transforming this digital age and all this it’s going to be helpful for them, especially the Impact Annex $10,000 here for us is about 30, 40 million pesos in Colombia

and that can make a big impact for any business down there to be found on Google. Just think about, back when we got internet and we started having AOL and Google, anyone who knew the. Dot com era and was able to be on a first page of anything or just have a page. I You’re a thriving, I you’re ahead of the curve.

So that opportunity still occurs for other countries. And we’re about to provide that opportunity with this Google ad grants. So the hopes in the long-term goal is to expand to other countries and create more JV opportunities. And on the ESG housing, Don’t get me wrong. I already have people in Peru who want have 500 single homes to be built with these 3d printer machines.

So there’s the demand is growing there’s education. That’s still happening evolving. But I’d love to see how we can do more international work as we get. I’m trying to get my feet wet here in the us first, but the vision, the long-term goal, the feature, it’s going to be a beautiful thing. We’re gonna help a lot of people.

And I think achieving a goal of impacting 1 billion lives is a reality, and I can’t do it alone. I can only do it with everyone who has similar vision, who feels that energy through this podcast. And hopefully that we can connect at, in this podcast to make that dream into reality.

And that’s great. So we have a couple of minutes left, so maybe tell, help people understand how they could get ahold of you.

What are the right people that that you’d like to talk to. And and

yeah. Happy, thanks so much, Brent. For those listening, if you have an interest to learn more about Impact Annex if anyone has to look you up on Google, then you’re a great fit for us because this grant is for anyone that’s a, that can be found on Google.

So that can be a for-profit or non-profit, we’re happy to help you out. Just visit our website at www.ImpactAnnex.org that’s spelled ANNEX and browse around and any contact form you, you find there will lead up to me. We’ll have a half hour conversation. Just learn more about your current situation and and for those folks that are interested in learning more about ESG housing, Inc.

We have a website www dot ESG, housing.org, and we’re looking to, of course, any donners like the fund lights donate, happy to have you part of the family. And in terms of partners we’re looking for partnerships for developers, landlords former mayors or governors anyone that’s involved in QLZ which has qualified opportunity zones and any volunteers or potential community members like to join our team.

That’ll be phenomenal because then we can scale up very rapidly. We’d love to have people in different states because your, your town and city of situation more than I do. And we’re looking to scale up that way, where you can be an ambassador for ESG house Inc for your committee.

And you tell us, what’s happening what’s needs and let’s start building and helping your community and friends and family. Cause that’s what really it comes down to is making a win-win for everyone. Keep growing together. So that’s my my message to everyone today. And I, again, I appreciate Brent and everyone for listening today and let’s build up America together.

I’ll put all the, I’ll put the links in the show notes so people can find those grade Reynoldo at the end of every podcast, I give you an opportunity to do a shameless plug go ahead and plug whatever you’d like to.

Sure. I thank you so much, Brent, for the opportunity.

I guess my plug is Come to support ESG housing, Inc. I think that’s a big priority right now for many people is to find affordable homes. We’re all seeing prices are jacking up everywhere and it’s hurting. I had a friend last night, came over saying my budget is only $1,600. I can’t find a place I have to move up at the 14th, and it really hurts me that I really.

If I had, a few buildings, but dude, I’ll plug into this unit. Don’t worry about it. I’ll cover the first two months. Give yourself, on your feet, happy to help you out, bro. No worry about And that’s the organization that, or the community I’m trying to build here is.

Let us be your plan B or your plan A regardless we have your back. Which one thing I forgot to mention Brent, is we’re looking to within this model is to create an emergency fund so that every building that we create for families they’re all going to work interconnected. So all that cash.

Goes among all these buildings. So that let’s say the epidemic will happen again. Basically, and he can’t pay rent. We’ll take money from that fund to pay your rents until you’re back on your feet. That also includes providing little to free internet in terms of it can be a low cost or it can be free internet, but we’re looking to pay people’s bills when it comes to internet, because we want might not be the issue here.

We want you to have access to these resources and There is

right.

So it’s I think people make it over complicated. I think many people sometimes it can be ego. It can be just about money, but I’m trying to take away all those roadblocks and just really help people leave. Both all the way and start doing start executing.

Because I think we have a power to do great things here if we put our minds to it. And if you work together, so that’s my plug a little bit long, but basically supporting us at ESG housing. There you

go. No, that’s fantastic. Thank you so much for being here. And again, I’ll put all the links in the show notes.

Reynoldo Santana the. Yeah, Gusto. Great. Have a great afternoon.

Thank you.

The new world of digital with Lewis Rothkopf

April 14, 2023May 24, 2022 Brent W. Peterson

Remember the days when you could turn on Google Ads, and the customers would come flowing in the door? Those days are gone, and Lewis Rothkopf walks us through techniques and ways to spend smart and measure often.

Lewis has led global businesses and revenue lines at the world’s foremost marketing, ad tech, and media companies. Lewis has contributed to the demand-side global inventory supply chain, as well as mobile, video, and advanced TV, streaming audio, digital out-of-home (DOOH), social, and emerging channels businesses.

Brent Peterson and Lewis Rothkopf discuss the digital advertising industry from the lens of a veteran digital marketer. Rothkopf’s innate interest in this niche started at a very young age. He exerted all efforts to learn the processes and metrics on how marketers measure success in this field, including artificial intelligence (AI) and media buying. Enjoy this episode and gain insights into digital marketing and advertising that is not just from the book.

Stay tuned and enjoy this Talk Commerce episode.

A notable quote from this podcast:

“So there’s no machine to learn, and then take those learnings and turn them into better outcomes. So AI is becoming more and more entrenched in everything that we do. It’s just more often called machine learning. And, you know, we do it, I’d have to imagine that all of our competitors do it. But it’s the sort of thing that can make better decisions quicker than humans. So yeah, you got to get on board with that.”

Our guest today is Lewis Rothkopf, CEO of Martin.ai, a demand-side platform (DSP). It is a media buying platform for marketers.

Here, Lewis discusses the idea of digital advertising from its primitive days until today, when AI is already making noticeable progress in the industry.

Gain useful insights on how the advertising industry has changed over time, including how marketers measure campaign performance’s success in the past until now. Look at the optimization efforts that can be done these days to maximize the results of any digital advertising campaign.

Key Takeaways

[2:18] – How do marketers measure success? (Click Through Rate, Cost Per Action)

[6:06] – The Technicalities

[11:46] – The Budgeting Scheme

[14:05] – How does Google rule the digital advertising industry?

[16:44] – The Industry’s Changes: Explained

[26:48] – The Role of Martin.AI

[35:01] – Artificial Intelligence in Digital Advertising

Ideas/Quotes by Lewis Rothkopf

In truth, I’ve been in the space, as Brent mentioned, for 23 years. I started at the beginning of digital advertising at a company called double click, which was subsequently bought by Google. I’ve seen it all I’ve seen what works, I’ve seen what doesn’t work. And it’s really been my mission for the last six or seven years to fix the industry. I began by trying to fix it during most of my career on the sell side of that is people who are selling advertising. And you know, not surprisingly, if you really want to fix things, you have to be on the buy side, which is the people who have budgets to spend money on advertising, because of course, those who have the budgets are those who can really help dictate a better and stronger and more accountable industry.
So in the very beginning of digital marketing, marketers measured the success of their campaigns by click-through rate, right, so an ad is displayed, the user a consumer clicks on the ad, and a number of times, and that n number over the number of impressions is your click-through rate 23 years ago, that was really the best measure that was used, there’s only the only measure that was used. But that was a really long time ago. And so things haven’t changed, marketers are still measuring their success by things like click-through rate, they’re also measuring by things like views through so how many people sat and watched a video ad to completion. And if that video complete rate is high, then the marketer goes home happy, except maybe they sat there and watched the whole video, or maybe they were in a different browser tab, or maybe they were in the bathroom, or maybe they were in the kitchen getting a snack. And so that’s not a great measure, either, where you start to get a bit more excited is something called CPA cost per action.
Look, we’re a small company martin.ai, we have a dedicated group of engineers and data scientists who are willing and excited to help you, I mentioned that we’re a small company because we help in many cases, midsize agencies and mid-sized marketers punch above their weight, right companies that don’t have an army of data scientists in the house to do all this measurement and all this optimization that we talked about, they can do it with us, and they are doing it with us.

Resources/Social Media

Martin.ai Website

https://www.martin.ai/

Social Media

Twitter: https://twitter.com/martin_rtb

LinkedIn: https://www.linkedin.com/company/martin-ai/

Transcript

Brent: Welcome to this episode of Talk Commerce. Today. I have Lewis Rothkopf. He is the precedent of Martin DSP. He is a digital media veteran with more than 23 years of experience in the space. And the funny part is Lewis was just telling me that he’s twenty-five years old. Lewis, why don’t you go ahead, introduce yourself, and do a better job than I did. Tell us what you do in your day-to-day life and maybe one of your patterns.

Lewis: Thanks for having me. Your note that I’m twenty-five years old is absolutely accurate. I began working in digital advertising when I was a fetus, and that’s why it all sort of worked out so well. I also want to compliment you on getting the name right on the first try. Rothkopf means redhead in German. And if this were a video podcast, you would see that I do not have any red hair. So I’ve begun with my name being a lie. In truth, I’ve been in this space, as Brent mentioned, for 23 years, and I started all the way. Back in the very beginning of digital advertising at a company called DoubleClick, which was subsequently bought by Google.I’ve seen it all. I’ve seen what works. I’ve seen what doesn’t work. And it’s really been my mission for the last six or seven years to fix the industry. I began by trying to fix it during most of my career on the sell-side,

that is, people who are selling advertising and, you know, Surprisingly if you really want to fix things, you have to be on the buy side, which is the people who have budgets to spend money on advertising. Because, of course, those who have the budgets are those who can really help dictate a better and stronger, and more accountable industry. That’s why I made the jump. And it’s why I’m really passionate about what we’re going to talk about today.

Brent: I think the idea of marketing has been out for a long time. And then the idea of measuring what your marketing has been out, you should always try to measure it. And I think the reality is that most people doing marketing aren’t measuring at all what they’re doing. I know that we talked a little bit in the green room about your approach to measuring the marketing and what that means to the person that is spending the money on marketing and how that really helps them, and maybe go into some of what we were talking about where it hasn’t, you know, things are changing in the digital market.

Lewis: Yeah. Great point. So in the very beginning of digital marketing, marketers measured the success of their campaigns by click-through rate, right? So an ad has displayed a user, a consumer clicks on the ad and number of times, and that N number over the number of impressions is your click-through rate. Twenty-three years ago, that was really the best measure that was used. There was only the only measure that was used. But that was a really long time ago. And so things haven’t changed. Marketers are still measuring their success by things like click-through rate. They also measure by things like view-through, so how many people sat and watched a video ad to completion? And if that video complete rate is high, then the marketer goes home happy except. Maybe they sat there and watched the whole video, or maybe they were in a different browser tab, or maybe they were in the bathroom, or maybe they were in the kitchen getting a snack. And so that’s not a great measure either. Where you start to get a bit more excited is something called CPA cost per action. And that is the cost that is imputed from the number of times that a consumer sees an ad. And then it takes the action that action can be buying a product or signing up for a lead gen form on a website or really anything. And while that is eons better than click-through rate, it’s still problematic. And the reason for that is a cost per action fails to separate users who saw an ad, comma, and took the action, so I know I’m going to go out and buy a pair of Nike sneakers.For instance, I see a bunch of Nike ads, and then I go and buy the Nike sneakers, but I was going to go buy those sneakers regardless of whether or not I saw the ad versus somebody who knew they were going to buy sneakers, saw the ad for Nike’s. These are super awesome. And they went out and bought the Nike’s because they saw the ad. And so that relationship between people who saw the ad and then people who bought the product because of the ad is called incremental lift. As opposed to CPA, which only tells you how many people saw the ad, comma, and how many people bought the product. So you’re giving credit to wherever you’re running that advertising as a marketer for people who would have been your customers anyhow. And so I think that’s crazy. We believe I believe that in order for measurement and optimization to be accurate, it has to be. Otherwise,

you’re using these old proxy metrics or vanity metrics where, you know, as a marketer, you pat yourself on the back. You’re like, oh man, a lot of people saw the video. But it’s not really true. And even cost per action. All it tells you is that you reach the right audience. Congratulations. You reached people who buy sneakers but were going to buy sneakers. Anyhow. So you just wasted that money as opposed to crediting the supply source when the action was taken because of the advertising.

Brent: That’s a great point. And taking on a real-life example, Nike has a, and I’m a runner. So Nike has a type of running shoe called vapor fly that every single one of the major marathon winners are wearing. However, I guess there is a whole community of people that talk about those and then use them. I think at some point somebody’s going to buy them, but you write it. How do you determine, was it me who saw the ad for vapor fly, or was it me that I saw the race where I see every single runner wearing them or the winners wearing them? Like, how do you make that connection? That’s where you’re getting to?

Lewis: Yeah, it is. And another great point you just made. So I’ll dive ever so slightly into the technical aspect of it, but I promise I won’t go too far. We use a technology at our company called ghost beads. We didn’t invent it. It’s been used by many marketers. But it avoids much of the noise and much of the false positives that are associated with the older forms of measurement like CPA. And so you use these anonymous unique identifiers to create a statistically significant and accurate model of people who were shown the ad and took action because of it. But then critically, you use a statistical model to not show the ad to a holdout group. So think about it like the random control trials that pharmaceutical companies used to understand placebo versus effect and safety of medication. Now, to be clear, we are not saving lives here. This is digital advertising. Everybody goes home alive. And so let me stop the patting ourselves on our back too much. But the difference there is you now understand the Delta between those who saw it and those who took action because they saw it. How do we do it in the case of online sales or being driven to a website where that’s the marketer’s KPIs. It’s always on. It’s built into our platform. We do it by default, and we highly recommend to our customers that they measure that way. If your KPI is brand lift or brand sentiment, if you’re a brand advertiser running a branding campaign, Then we work with a survey vendor that similarly has a control group and a holdout group. If your measure is real-world traffic, so football, we work with a partner that does football analysis and understands test group hold out-group, et cetera. So long answer to your short question is it’s not enough to say, Hey, I think we should be figuring out causation it’s. I think we should be figured out causation. And now, what’s the best way to measure that to the KPI that I want to achieve.

Brent: Okay. That’s very interesting. At the top level, you’re sir, you’re doing some broad surveys to determine what is the group doing, and then you have, do you have it different levels that you’ll break down those statistics as it go through. How does that work? So in a break it down a little bit,

Lewis: We work with a great company called lucid which is our default partner for serving they’re built into our platform. They’re really good at what they do. And then they have the statistical models to run against their panel of consumers who’ve seen the ad versus not seen the ad and then they derive statistical significance of Whether it had enough responders, whether there were enough impressions that were delivered in order to achieve stat SIG. And then based upon all those inputs were able to understand causation, unlike in some of the older models you do have that delineation between actions taken because of versus noise. And let me explain a bit what I mean by that? A way of AB testing, the effectiveness of a campaign that is still in use by marketers is DMA based. So I’m going to show this ad to people in these designated market areas. And I’m going to show the same ad to people in these designated market areas and I’m going to work really hard to ensure that the DMA audience population. Is similar. So roughly same number of people, roughly same demographic makeup, roughly similar DMA size. The problem is it doesn’t work. Because there are all these exogenous factors that come into play when you’re using geographic differentiation, what did the consumer in one DMA here on the radio that made them take an action. What stores are located in these DMAs? What TV commercials did they see what’s with road traffic in the area that will lead people to either go to a store or say, you know, what to hell with it? You know, this was my first choice of product, but I’m not going to sit on the 4 0 5 for an hour. So I’m just going to go buy this other thing. And so while it’s a sound idea it’s really imperfect because a lot of the noise that’s injected in. We look to figure out and to be clear, like with any model there’s going to be noise. So the objective here is not no noise. You know, this vaccine is safe and effective 99% of the time. Again, it’s digital advertising. We’re not saving lives here. We don’t necessarily strive for 99 and, you know, five nines statistical accuracy, but we try to get really close. And noise is definitely a thing, but it is much less of a thing than with some of the older models, even models that are better than doing silly things like measuring a click-through rate. They still do have some noise and we are on a mission as an industry. To get the noise out and really help marketers understand cause what’s worse. So you measure a campaign and imperfect way you get your report. That’s bad enough because now you don’t know if or where or why your marketing is working. But you double down on those results and you optimize towards stuff that is irrelevant. And so you create this vicious cycle of garbage data in garbage outputs, and you may feel good about the clicks you see on a thing, but is it really moving your shampoo off the shelf? I dunno, it’s not knowable unless you measure this stuff correctly.

Brent: You’ve talked about some larger things here is this apply to just big brands or can this filter down to medium size and even the mom and pop shops?

Lewis: Absolutely. I think, look, I think it’s more important for smaller marketers, because their budgets tend to be limited. Like you don’t want the pizza place. We stick their money. Like you just don’t. It works at all stages of the. So whether it’s a brand advertiser and looking to generate awareness, or it’s a direct response advertisers looking to create, I don’t know lead gen or an online purchase it works at all levels and it’s important at all levels, right? Like again, think about the pizza place example. Did someone come in and buy a slice because they’re like, oh man, Pizza sounds really good. This ad was shown to me at exactly the right time and the cheese is bubbling and it’s awesome. Or did they see that ad as they were already on their way out the door to go to Brent’s pizza place? Brent’s pizza place does not have a lot of money to waste. And so it’s really important for them to understand what’s working and double down on it, as opposed to we call it spray and pray where. Sure. Close your eyes and cast a really big net and hope to, you know, DD of your choice that it’s going to work.

Brent: Yeah. And I can guarantee that nobody’s going to go to Brent Peterson’s pizza place and look for a Swedish meatball pizza. You know, I think it’s one of the interesting things here. If you look back like 20 years ago, I can remember that at the time you could spend money on Google ad words, and it was like a faucet. You just started doing Google ad words, and suddenly you’re getting a ton of leads right now, 20 years later. It’s not the case anymore. And I think you make a really good point about wasting your money and the novice person who’s logging into Google ad-words thinks still. Hey, if I’m going to throw $5,000 or $10,000 at this, I’ll get that in return, but double or triple fold. And in lead quality, even maybe talk about the. The flaws in just throwing that money at Google ad-words for the your pizza place and your Lewisredhead pizza place. And that how maybe thinking more about how that works for that consumer and for the for the person doing the marketing helps them.

Lewis: So look, I mean, Google’s a great business. You’re absolutely right. Like you turn it on and you see search is great. Nobody can debate that. But search is really good for lower funnel, right? Like you’re searching for sneakers. Just, you already know you’re going to buy sneakers. It’s what happens when you don’t already know that you’re going to buy sneakers? You know, you see an ad for for Brooks running, for instance, or you see an ad for Nike or seen an ad for Reebok. Mainly those are pretty fly shoes. Like I could really use a new pair of sneakers, like hell yeah. And then you see the ad the second time and you’re like, oh man, my sneakers suck. I could really use some new sneakers. And then you see the ad the third time and you’re like, oh, F it like, not only do I want sneakers, I want Nike sneakers. I want Brookes sneakers. I want Reeboks Adidas, sneakers. And now. Okay, cool. Let me search for Nike sneakers and then, you know what the search people do a good job. They click on the link and all as well, or they just go to nike.com or they just go to Brooks or reebok.com. And they buy the sneakers now, should search get the credit when the consumer already knew they were going to buy the sneakers by virtue of having seen the ad for a sneaker brand. You know, another example is brand sentiment. So let’s say your brand doesn’t have the greatest reputation, or not even something so extreme. You’re known as a brand for Swedish meatball pizza place, but you’re like, That’s not all we do. Like we also have Turkey. And so you want to change, these examples are terrible. I’m so sorry. You want to change the public’s perception that we’re not just a Swedish meatball pizza place. We’re actually a Turkey place. And so getting at Turkey tacos exactly. And tacos. So get it the really early in the funnel. And then get a survey that says, Hey, did you, the Brent sells pizza? Yes, of course. That’s sort of your you know, baseline question, but did you also know that Brent sells Swedish meatballs? Oh man I didn’t before, but I do now. And that’s how you measure lift really high in the funnel.

Brent: You know, another thing as a conception for a smaller, medium sized business too, is they have this pool of budget money they want to spend. And they devote all that money to Google ad words. They don’t think about this bigger brand and where they should be putting some of that money. Maybe talk a little bit about how some of that should be spaced out for your ad spend and what type spends you’re going to go after it’s

Lewis: such an easy oversight,. Right because to your point 20 years ago, you turn on the spigot and boom it’s money and it’s not that it’s not boom it’s money today. It’s that consumers have way more choices than ever. And you have this notion of DTC direct to consumer, which really was way less of a thing 20 years ago. And so at that point in time, it was just about I am searching for sneakers. And you know, here’s the only place I’m really going to see it relevant sneaker ad because. Real relevance only comes from the search signal. So Lewis search for sake first for sneakers. And so I’m going to put them in a bucket of people that like sneakers and I’m gonna show them a bunch of sneaker ads. But I like other things too. And I do other things too, and I have my own preconceived notions about which brands are better or even which you know which model is better within a brand. And so when you buttress your lower funnel campaigns with upper funnel brand awareness brand sentiment, as we talked about a moment ago and then understand the brands lift will now you’ve come much closer to solving that classic Wanamaker problem of, I know half of my advertising works, but I don’t know which half, like you can keep targeting that unknown 50% by using only a lower funnel tactics, which is fine, or you can make the pie bigger and get a bit more precise on how much of your target audience you’re reaching effectively by way of your advertising and then optimize like quickly do this stuff in real time. If you sit around, run a campaign and then get a lift report a month after the campaign what do you do? Like that money is spent, you’re not going to get it back. And so all you could hope to do is get it right the next time. Versus if you’re measuring this stuff in flight, you could make the changes right away and double down on what works and pull back on what doesn’t.

Brent: I did an interview a couple of weeks ago with the guy from the Netherlands. Who’s really big into conversion optimization. And he gave the example of booking.com and how booking.com has been a big proponent of AB testing and conversion testing and all that fun stuff. And he gave the statistic of, they have 10% win rates on their hypothesis or their tests. Which leads to say that then they continue to do it. And booking.com is a pretty big company. The idea of the merchant and what they should expect in some of these metrics and then how do they see success after that? Especially if you hire a company to do conversion optimization. And they say, well, 10% of our tests are good. How do you as a marketer, how do you translate that to the merchant? No, this is really successful.

Lewis: Yeah, exactly. So which channel. That’s awesome that you’ve got 10%, like that’s more than awesome, that’s incredible. But how much of that was caused by the advertising versus coincidental to the advertising? Like you got to know what the, and 10% is and who they are so that you can reach more of them or, similar to a drug trial where it’s just not working and you’re running the risk of hurting people just to stop. Just stop And regroup. And there’s a whole bunch of factors that go into conversion and going to ad effectiveness. One that is very overlooked so much of the time, and it’s pretty surprising is. Like at the end of the day, like you, you’ve got to have creative that resonates with the consumer. And so almost all the time when a campaign is not doing well on a particular publisher or a group of publishers, the marketer, or the agency will pull that publisher off. Cause they’ll say, you know what? Your audience sucks. They don’t click on anything. They don’t convert. It’s probably the wrong people. And so they pull the ads away from that audience. Then they do the same thing with other sites and you know, this is how much optimization runs today. However, Your creative is terrible. Like it’s ugly. No, one’s going to click on it. Nobody wants to see more or it’s obnoxious, you know, you load the page and then you get this like sound on auto start video and it pisses the consumer off. Like you got to remember that all the marketing science-y stuff, that’s smarter people than I love to talk about is so important. But creative is really important too. So if you’re getting 10% resonance on a campaign, you know, sort of statistically, that’s great, but how much more resonance would you get if you tested multiple varying variables within the creative, right? If you dynamically optimize creative based upon what you know about the context and the anonymous attributes of that user. Will you just by so doing, you’re already speaking in much clearer and more appropriate language to your target customer.

Brent: I think oftentimes, especially as your budget gets smaller, creative gets almost non-existent right. They think that tech stack is going to be, what’s going to sell them. And you’re exactly right. How important creativity can be and how I can think of a brand called the Geek Squad. I, the Geek Squad started in Minneapolis. And the owner drove around Simcas and had all kinds of old-fashioned cars that he drove around and did repairs. And then all of a sudden Best Buy bought them. They’ve kept some of that creative but he started that business on this little creative notion of getting better service and more innovative support for your computer needs. And now suddenly it’s doing everything everywhere in the country. You know, I think a lot of, again, going back to creative, a lot of smaller merchants look at creative, even medium-sized merchants, they don’t, they forget about creative. They just think. I like your idea of the hitting the shotgun, trying to hit everything at once, and then hopefully something sticks.

Lewis: You’re a small advertiser, you’ve got a small target audience. You got to reach them and you don’t really have a budget to hire a, you know, top 50 creative shops. You can go on to Fiverr, right? You can go on to, you know, any talent marketplace and find somebody fantastic and tell them here’s what I’m trying to communicate. I don’t know the first thing about, you know, creative or brand marketing, but just do something that is going to result in the consumer being inspired, to take any action based upon it. Do at least that and do it in a way that the ad is not like repulsive or offensive by being so obnoxious to the user. And I can almost guarantee you that with better creativity comes better outcomes.

Brent: Sometimes it’s noxious to the user. It works, but not very often. So really quick, a B to B, I know you’ve mentioned, I think a lot of these things apply directly to D to C, but B2B is such a huge market. And I think a lot of those, a lot of the people that are on B2B are what’s called legacy. Pre sometimes pre-internet users, even a B2B marketing is kinda hitting its stride now. Does a lot of the supply to B2B?

Lewis: Yeah. So we have one B2B client. We’re hoping to bring another one in soon. It’s re you’ve dealt it, right? It’s very important that you reach the right consumer and in the world of B2B, the Target’s just smaller, right? Unless you happen to be a massive solutions provider or you sell products to, you know, every store owner, every business owner in the world, which let’s face it is not many. Then you’ve got to make sure that you’re reaching the right people. So examples of that would-be doctors in hospitals lawyers in law practices, maybe not even while they’re at home, maybe only when they’re in the practice or they’re in the hospital because they’re in the mode of. I don’t know, boy, these syringes are really terrible. I would love to find a place to buy new and better syringes. So what does that mean in terms of nuts and bolts? Budgets, probably going to be much smaller because there are just fewer doctors in hospitals to reach than there are sneaker aficionados. And so you have less to screw up with, right? Like getting it wrong from a targeting and creative perspective or a measurement perspective when your audience is, you know, 20 million consumers are like, you got a little runway here, you’ve got sort of statistic probability of some of it working somewhere just by virtue of the large numbers. But if you’re trying to reach 500,000 doctors in hospitals who want to buy those new syringes. You can’t screw up from the get-go. Like you have to make sure that you’re getting it right. And if you’re not getting it right again, have those results available to you in real-time so that you can titrate up or down based upon how the campaign is performing tweak, tweak the creative, but absolutely this certainly applies to B2B marketers. You’re just targeting a different mindset. And so the demographics, the psychographics, the geography, right? So remember. You’re able through the use of, you know, a handful of partners to draw these squares or around a map. And, you know, maybe the one square you want to draw is this hospital and that hospital. And just by virtue of doing that, we’ll now you’re able to understand what the footfall is based upon the advertising that you’re running. And a pretty, pretty good sense that you’re targeting the right individual.

Brent: So if maybe just walk us through, if somebody has some interest in free-thinking how do they talk to you about this and how do you start that conversation? So you can reach out to us and let’s not make it an advertisement, but I think this is super interesting.

Lewis: Yes. We like to help people you go to martin.ai and you see. You know, Lewis sounded really interesting or he sounded like a moron, but what he was talking about was interesting. And the first question we asked, both prospective customers and existing customers, when they want to launch a new campaign is like, what do you want to do? Like do you want to get people to come to a physical location? Do you want people to buy things online? You know, like what’s your objective here? And then we say, who’s your audience. Then we say, how much are you looking to spend? Because that absolutely dictates how much of it you’re doing, but what it should not dictate is quality. So if you come to me or any of our competitors with a $5,000 budget you should get as high-quality properties that you advertise on. And as. Quality results as those that come to us with a $50 million budget. However, what you might struggle with a little bit is achieving statistical significance in measurement studies. So for things like visits to a website or, you know, online dr type metrics or sales online, it’s pretty easy. If you’re looking to do brand sentiment, measurement, footfall measurement, you’re probably gonna have to spend a bit more than 5,000 bucks in order. To achieve stat SIG and take some real learnings from the situation. But again, like we’re happy to help folks succeed. They have to have a good understanding of what good looks like to them. And then we can help them take it from there. And whether that goal is sales, you know, foot fall sentiment we can help tune.

Brent: People have to wake up and realize as well, is that because the market is so small. I’ll talk about hosting companies. Hosting companies tend to have a small market, but they tend to spend a lot of money to acquire a customer. So whether they’re using a LinkedIn ad or they’re using a Google ad or whatever they’re using that specific ad rate is going to be a lot higher than another industry, especially if you’re talking B2B like this, and a lot of times. I hear from inexperienced b2B owners that don’t understand some of this digital and looking back at some of the legacy B2B, where they’ve always relied on a call center to take their sales. And it goes right in another ERP and they’ve skipped the website completely. Suddenly. It was. W let’s look at their website, and let’s try to acquire some customers. They don’t necessarily equate how much it costs to acquire that customer for that voice. There’s a person that’s making outbound calls. There’s a whole cycle to that. I think one thing that we were saying, or you’re saying here is that there’s this bigger picture that most owners have to see entrepreneurs, whoever it is that’s spending the ultimate check has to see that the cost to acquire this customer is going to be. Somewhat similar if you’re going strictly digital as if you’re going analog over the phone.

Lewis: Yeah. And targeting it’s just so much more precise and it’s so much more efficient to execute via programmatic pipes and right. Digital pipes than it is via, you know, the old, like sending an IO back and forth, you know, using your fax machine, some of the, getting it right stuff for B2B. Is super unintuitive, right? So you know, you spend enough time in this stuff and you start to draw some really interesting correlations things. Like people I’m only making it up. People who are in market for a luxury auto are substantially more likely they over-index on people who like chocolate chip cookies, okay. You’ll never know that before you run a campaign. And the other thing is it doesn’t matter. Just because you can know something doesn’t mean that it makes sense for you to exercise, right? However some targeting is super intuitive. You are a hosting company and you want to reach IT professionals. You want to reach only CTOs. And so we run a digital campaign that runs on a streaming audio channel. You can buy. You know, radio programmatically that is of particular interest to CTOs or buy a podcast spot on, you know, the CTOs who drive to work in San Francisco podcast, right? Podcasts are the new magazines they allow for super precision targeting. It is a misconception that you can only do that by picking up the phone and calling the podcast. It’s just not the case. There are multiple avenues today to be able to run programmatically in audio and the holy grail of all of this is reaching consumers and businesses. In the case of B2B cross-channel. I’m a doctor in a hospital and, you know, I’m looking up new syringes on my hospital computer. And so I see the app, Benny, get into my car and I’m listening to the, you know, doctors who need syringes podcast. And all of a sudden I hear whoa, that’s the same ad. I just heard. That I saw back when I was in the hospital and then they get home and they’re watching, you know, connected TV. They’re watching a program on-demand and they see that ad for that syringe company. And it’s oh my God. They know exactly what I care about. Isn’t that awesome. And you know, you do have to be a little careful not to be creepy about it. You do have to be careful to make sure that you’re not targeting. Individuals because that’s gross and contrary in most cases to industry rules and best practices. But if you’re targeting a group of anonymous consumers, anonymous business owners, and you’re surrounding them with high-quality advertising, well, now you just replicated in, in many senses, the most effective historical analog campaigns. And you’ve done so in a way that it’s pretty efficient.

Brent: If so, looking ahead into 2022 now what is the thing that a merchant who’s going to spend some money on advertising should be looking at? Is there a trend that you see coming testing?

Lewis: Test and learn like experiments only work when you experiment with them. Don’t go in with preconceived notions, right? Like you’re a very smart person. I promise you, you don’t know everything about how your campaigns are going to resonate. So again, some of these things are really intuitive. Most of them are not. And so don’t be afraid to experiment with creative, with targeting with, you know, all the different apps with. With the kinds of sites or apps or radio shows that you want to get on or connected TV channels. Don’t be afraid to give all this stuff a try and don’t be afraid to give it a try with a modest budget like you may not reach stats SIG on a $5,000 budget, but you may start to get some inklings that would lead you to move budget away from something else in, into this. And for the love of God, like don’t optimized to stupid old things like just don’t optimize to CTR. Don’t optimize to, well, I have $5,000. I want to spend $5,000. So let me just let the supply source run this thing for $5,000 worth and like sure enough, that’s going to lead to success, right? No, don’t do that. Be scientific about that and work with companies that are willing and ready to help you by making data scientists available and saying, this is your campaign, these are your results. But did you know that if you just tweaked the creative like this, or if you just increased your bid amount by 10 cents, you’d be able to win over this whole additional audience that is square within your strike zone? You gotta work with people that are willing to tell you that.

Brent: I think you’ve hit the nail on the head there. So one last question while we close out here, where do you think AI is going to bring us into this next realm? And how much of a play do you think it has? Certainly, it’s making a play in the smaller portions of marketing, but do you think some of these bigger things are going to be controlled by algorithms rather than just by people?

Lewis: Great question. The exciting and challenging thing about that question is everyone defines AI differently, right? Like the buzzword of AI. Is probably a bit better replaced with algorithmic machine learning. You know, at our company, we have algorithms that can be customized based upon things we know from the advertiser and things we know about the user. And that helps inform how much we bid on a particular impression opportunity. I think if you’re not doing something like that in 2022. Where can’t you do that? You can’t do that in analog at all. Like you just can’t you’re buying a page or you’re buying time or you’re buying like, you know, a column of a newspaper. But there’s no impact from who’s reading that newspaper or, you know, who is my target within that newspaper readership. There’s no feedback loop there. And so there’s no machine to learn and then take those learnings and turn them into better outcomes. So AI is becoming more and more entrenched in everything that we do. It’s just more often called machine learning and, you know, We do it. I’d have to imagine that all of our competitors do it. But it’s the sort of thing that is able to make better decisions quicker than human. So yeah, you got to get on board with that.

Brent: And the important part there is machine learning because you know, part of this, everybody does have something they’re calling AI. And if it doesn’t learn from your mistakes, it’s not really AI. It’s just automation. And I’ll just give my last little clothes out. I been trying some of these Jarvis style services and it wasn’t Jarvis that I tried, but it writes, you know, an article for you or whatever that thing is. And as many times as you put it in, it’s going to give you the same thing back out and there’s no way to tell it. It did it wrong. And I remember I tried to do it just to summarize a podcast and it made up all this stuff about a guy that he did, this stuff wasn’t even real, but it gave me a, you know, five, five paragraphs of content. That was completely wrong. I couldn’t use any of it. It gave me some bullet points that were good. The content within that bullet point was completely wrong. And the point of this is that it was automating it, but there’s no way to tell it. No, this was completely wrong. And here’s why in order to make machine learning work, it has, you have to have, you have to tell the machine. When it’s done something wrong so it can learn that’s my little soapbox complaint. So apologize for throwing that in. As we close out, every episode I give you a chance to do a shameless plug about anything you’d like to plug today.

Lewis: Yeah. So Lewis, what would you write to him? Always full of shame in my life. So I will try to be shameless. Look, we’re a small company. Martin.ai. We have dedicated groups of engineers and data scientists who are willing and excited to help you. I mentioned that we’re a small company because we help in many cases mid-size agencies and midsize marketers punch above their weight. Right companies that don’t have an army of data scientists in-house to do all this measurement and all this optimization that we talk about, they can do it with us and they are doing it with us. And, you know, as a smaller company ourselves, we’re super, super proud of being able to help marketers again at all stages of the funnel and all up and down in terms of size and scope. And I guess the shameless part of this is. We’re really the only platform that we’re aware of that has a built-in incrementality measurement, always on. So in real-time is your thing working. And if it is to go back to your immediately proceeding point, like feed that knowledge back into the algorithm, and pretty quickly you’ll start to learn.
Okay. People who come from making this up Chrome web browsers are more likely to resonate with this particular type of campaign. And so bid more for consumers that are in Chrome web browsers and, you know, to close it out if you’re not measuring the right thing, you’re telling the algorithm the wrong thing, and it’s just going to be an amplification of bad decisions.

Brent: And I think those bids for the IE6 users are pretty low Lewis Rothkopf. Thank you so much for being here. As Lewis is the president of Martin DSP, martin.ai is the place where you can find him. I will post a show notes. Thank you so much. It’s been

Lewis: I really enjoyed this. Thanks for having me on.

Protecting your Digital Identity with Jaime Ramirez

April 14, 2023May 17, 2022 Brent W. Peterson

Merchants want a seamless user experience without sacrificing thorough identification and monitoring and they want the power of fraud prevention with the intelligence of AI and biometrics integration.

Jaime and Brent talk about how merchants can use digital identity verification to ensure that their clients are who they say they are. Jaime walks us through some of the different aspects of fraud prevention.

Jaime is the Founder and CEO of Preventor, a RegTech enterprise. Prevention is the next generation in integrated financial crime risk management.

Swiftly get Certified with Joseph Maxwell

April 14, 2023May 12, 2022 Brent W. Peterson

Engineering-Focused eCommerce Web Agency & World-Renowned Developer Training Platform

SwiftOtter is a trusted guide for eCommerce brands of enduring quality in a dynamic online marketplace. Our highly-experienced team of engineering-focused developers are known for helping our clients establish an excellent presence in the marketplace, avoid costly pitfalls and position themselves for explosive growth.

In addition, SwiftOtter enables eCommerce developers worldwide to improve their skills, get certified, find their ideal career paths, and reach their full potential. We’ve got something helpful for every developer, and we’re super excited about it.

https://swiftotter.com/

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