Drive and Convert: Recent Episodes
Jon MacDonald and Ryan Garrow
Hosts Jon MacDonald and Ryan Garrow want to help businesses be more effective at driving high quality traffic to your site, and making sure that traffic converts from a visitor to a buyer, by sharing the secrets that have helped some of the brands big and small to drive the right traffic to their sites, and convert that traffic into customers at a rate well above their peers.
So, what is a good conversion rate? Is there a magic number you should be aiming for or a percentage that, when you reach it, means you’ve hit the big time and you can sit back and relax?
In this week’s episode, Jon and Ryan discuss why there is no one-size-fits-all answer to this question. They delve into the definition of conversion rate and the countless variables that affect it. In the end, their advice is this: a good conversion rate is one that is constantly improving.
Listen to the full episode if you want to learn:
- What variables affect conversion rates
- What conversion rate actually means
- How to measure conversion rates
- What are the challenges in measuring conversion rates
- Why you shouldn’t measure yourself against ecommerce benchmarks
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
What is the future of digital marketing and online experience?
Jon and Ryan unpack the valuable insights gained from recent events with Google and Logical Position to try and answer this question.
They discuss the challenges faced by smaller businesses in the ever-changing landscape of attribution models and the importance of thinking outside the box when it comes to driving brand growth.
From exploring alternative methods of customer acquisition to diving into the world of AI and attribution, this is everything you missed at the Google and Logical Position events!
Listen to the full episode if you want to learn:
- How GA4 will impact SMBs and larger brands
- Why it's important to constantly analyze data
- What the future of attribution and AI looks like
- What additional strategies and resources to consider for the holidays
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
Sending everyone to a Product Detail Page (PDP) without context or information about the brand can be counterproductive in building trust. Landing pages, however, allow for more curated information and more consistent and relevant messaging during the customer journey.
This is exactly what Jon and Ryan explore in this week’s Drive and Convert episode. They also cover how the lack of educational information on a PDP could make it difficult to convince customers to make a purchase.
Listen to the full episode if you want to learn:
- Why landing pages are crucial for building trust and educating customers
- Why alignment between ad messaging and landing pages is important
- How landing pages should be optimized for Google Shopping traffic
- How context and personalization can improve landing pages and PDPs
- How to create and optimize landing pages
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
From struggling marketplaces to recent stock turmoil, Jon and Ryan explore the factors impacting traffic and sales in the ecommerce industry. They take a deep dive into how competition, economic factors, and changing consumer behavior are reshaping the e-commerce landscape.
In this week’s episode, they discuss powerful strategies for driving traffic and sales and how brands can leverage Google's algorithms to their advantage.
Listen to the full episode if you want to learn:
- How the decrease in search volume on Google affect transaction and sales volume
- What methods Amazon uses to drive traffic beyond search traffic
- How brands can leverage Google's algorithm to increase product discovery
- Why testing and experimentation are crucial for staying ahead of the competition
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
It can be difficult to convince new customers to purchase from your site the first time they visit. Instead of driving traffic and new visitors to your site, why don’t you focus on the customers you already have?
This week, Jon and Ryan share how you can leverage nine proven strategies to help you increase average order value. By improving the average order value of your website, you can grow your business without having to invest heavily in additional marketing and advertising.
Listen to the full episode if you want to learn:
- How to find out your customer’s needs
- Nine proven tactics to increase AOV (with examples)
- Why social proof is such a powerful tool
- How to execute limited offers properly
- Why it’s important to remember post-purchase offers
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
Each holiday season is different, so how do you prepare for one? As a business, it’s important to use data-driven strategies and think creatively when planning for your holiday campaign. In this week’s episode, Jon and Ryan share a few ideas on how to think about the holidays and what you need to do to stand out from the competition.
Listen to the full episode if you want to learn:
- Why each holiday season is different
- How to define the holiday season
- How to use data to determine holiday periods
- How to prepare for the holiday season
- When to start advertising for the holidays
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
Sharing winning tests isn’t just a way to celebrate success with previous clients. The patterns and insights from winning tests can offer a lot of ideas for other brands looking to improve their conversion rates and boost sales.
In particular, Jon and Ryan talk about three areas of a site that tests work really well in: category pages, social proof, and website copy.
Listen to the full episode if you want to learn:
- How personalization can improve category pages
- Why you need clear and specific labels on your navigation
- How to leverage different types of social proof
- How small changes in copy can lead to big results
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
Wouldn’t it be easier if you could talk with other business owners and find out what's working for them and what’s not? Ryan and Jon were wondering the same thing. In this episode, they discuss the advantage of sharing data, strategies, and test results with businesses that aren’t your competitors.
They also discuss the value of rapid testing on ads to optimize your content, running tests with influencers, and testing on your own.
Listen to the full episode if you want to learn:
- What data and results businesses can safely share with each other
- Why building a group or community can be advantageous
- How rapid testing works on ads and segmenting your audience
- How to run your own ad testing to get the data you need
- The cost of testing various ads
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
According to a research by Adobe, 2021 brought the first ever $200+ billion online holiday season in the US. Assuming this year follows similar trends, optimizing your website before Black Friday and Cyber Monday can help your ecommerce brand win big.
In this episode, Ryan and Jon talk about how to optimize your website to drive more revenue for your brand this Black Friday and Cyber Monday. They cover the importance of website audits, how to improve user experience and why you should re-evaluate your sales strategy.
Listen to the full episode if you want to learn:
- Why website audits are necessary
- How to leverage user experience to improve site performance
- Re-evaluating your sales strategy
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
Feeds are everywhere: Google, Bing, Walmart, Amazon, Facebook, Instagram. Anytime you see a product image and a price on some sort of app, it's probably coming from a feed. And even though they've been around for a while, it's more important than ever to understand how you can use them to your advantage.
With so much automation in the marketing world, some campaign details are out of our control. But, you can still optimize the inputs to a feed and that can be the difference between a shopper clicking on your product over a competitors.
In this episode, Ryan and Jon talk about the importance of feeds for ecommerce brands. They discuss why feeds are so important and how to optimize yours for more traffic.
Listen to the full episode if you want to learn:
- Why feeds are so important right now
- Where feeds begin and how they work
- How you can optimize your feeds for more traffic
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
Getting others to promote your brand is infinitely more effective than promoting yourself. Face it, the glowing recommendation from a friend might be the only thing to convince brand loyalists to try a new product.
In this episode, Ryan and Jon talk about why social proof is one of the most powerful tools of persuasion sellers can employ and how to use it to improve your conversion rate.
Listen to the full episode if you want to learn:
- Why social proof is so effective
- Different types of social proof that can increase conversions
- How to collect and deploy it on your website
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
Google is always changing, so why is the news about Performance Max Campaigns any different?
In this episode, Ryan and Jon talk about the massive changes in Google Ads that are coming over the next few weeks. They cover the importance and scale of this particular update and why it matters to you.
Listen to the full episode if you want to learn:
- What advertisers should be thinking about as they switch to Performance Max
- The results brands can expect from the new campaign type
- How to prepare for the switch
- The impact this has on brands moving forward
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
There is one major driver of successful and innovative companies: experimentation culture. It begins with a willingness to ask the right questions and stay humble about the answers – data will drive your decision-making, not opinions. But, it's easier said than done.
In this episode, Ryan and Jon cover the proven steps you can take to build a culture of experimentation in your own company and share examples of brands already putting the steps into action.
Listen to the full episode if you want to learn:
- How to start developing a culture of experimentation
- Mindset shifts you need
- 6 steps to building an experimentation culture
- Real-life brands that put this practice into action
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
Most brands are already deep into their holiday planning, and there is some really fascinating data that Ryan is seeing from Logical Position clients that's driving Q4 strategies. But, there is still so much unknown. How will a second Amazon Prime Day impact the holiday season? What about all the ecommerce buzz around selling at Walmart? Are there still supply chain issues or do some brands actually have too much product?
In this episode, Ryan and Jon talk about how Amazon's "most successful prime day ever," and their announcement of a second prime day in Q4, will impact the holiday season for ecommerce brands. They also cover what brands should be doing now to prepare for a great Q4.
Listen to the full episode if you want to learn:
- What really happened on Amazon Prime Day
- The impact of a second Amazon Prime Day
- If your brand should be selling at Walmart
- How to prepare for Q4, now
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
One of the largest groups of online shoppers often surprises brands and marketers... adults over 55. While it's a mistake to ignore this key group of shoppers (and their disposable income), it's also tough to connect with them when there's a lack of understanding around their needs and habits. So, to fill that gap, the Good surveyed Active Agers on a large variety of ecommerce practices, attitudes, and their general outlook on digital commerce.
In this episode, Ryan and Jon talk about the findings and insights from The Good's latest research report published in collaboration with Age of Majority.
Listen to the full episode if you want to learn:
- How to understand and engage adults 55+
- Surprising (and unsurprising) insights about this group of shoppers
- How to build trust with Active Agers
- The best ways to connect and build trust
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
Soon enough, Google will be launching its new Performance Max campaign option. The addition has received mixed reviews from agencies and in-house teams alike, but ad managers will need to find a way to adjust their strategies in this new environment.
In this episode, Ryan and Jon provide a detailed overview of what Performance Max offers, how it fits into the existing set of tools and tech and what acquisition teams should be doing to prepare for the upcoming launch.
Listen to the full episode if you want to learn:
- What is performance max in Google Ads and why you should take it seriously
- How it is different from the existing toolset, and what that means for your campaigns
- What advertisers need to be doing to prepare and take advantage of this new feature
- Informed predictions about the long-term impact of Performance Max
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
A lot of CRO firms try to close a deal with an ecommerce brand by promising them that they will run “hundreds of tests,” sometimes over the course of just a few weeks! While that sounds like a great bang for your buck on the front end, it's probably not the best option for your company long-term.
In this episode, Ryan and Jon talk about the perils of high volume or high velocity testing programs. They also revisit the concept of "rapid testing," including why it's a different (and better) approach than programs built entirely on volume of tests.
Listen to the full episode if you want to learn:
- Why, when it comes to testing and optimization, more doesn't always equal better
- What risks come along with high volume and high velocity testing
- How to know the difference between a good deal and a "too good to be true" deal
- How “rapid testing” is a similar, but better approach to optimizing your site
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
There are a lot of companies right now that are seeing poor year-over-year performance in their traffic and sales data. On top of that, there is international conflict in Ukraine and signs of an impending economic downturn.
Some industries are being hit harder than others, but there are plenty of brands that are feeling anxious – and rightfully so!
In this episode, Ryan and Jon talk about the current macroeconomic trends and how they are influencing the behaviors of both consumers and brands alike. There is a lot of reason to be pessimistic, but Ryan still has optimism about the rest of 2022, and he's here to explain his position.
Listen to the full episode if you want to learn:
- What impact stimulus checks, inflation, and international conflict are having on brands
- Why poor year-over-year performance isn't the end of the world
- What has Ryan feeling optimistic about the back half of 2022
- What you should be doing today to set yourself up for success
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
Marketing leaders love to redesign websites. Putting a fresh coat of paint on your brand's online presence feels like a meaningful project to undertake. It certainly is a significant effort, but it isn't always the best decision if you're goal is to improve your sales performance.
In this episode, Ryan and Jon talk about how to know if your brand should invest in a full-scale redesign or commit to an ongoing testing and optimization program. There are merits and flaws to each approach, so you'll want to listen in to figure out which option is right for your business, and what you should do to get started.
Listen to the full episode if you want to learn:
- How to know if you should be pursuing optimization or a redesign
- What considerations to keep in mind when redesigning your site
- What you should know before diving in to optimization
- The best step to take after you've made a decision between the two
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
Once the excitement of the "shopping phase" dissipates, building a new home can be a taxing experience. There are often challenges with supplies, logistics, team members, timeline, budget, and a host of other variables that make the ordeal more stressful than anticipated.
Ryan is currently living through this experience, and although going through life with a spouse and four kids all living in a barn while their home is being built, he's managed to learn a few important lessons about what it takes to build a successful business along the way.
Listen to this episode if you want to learn what building a home and building a business have in common, and maybe jot down a few tips from Ryan to prepare yourself for the day when you're ready to build your own new home.
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
In this episode, Ryan and Jon continue experimenting with a "mailbag" format, where they answer questions that were submitted directly by Drive & Convert listeners. The conversation covers a wide range of topics, which makes it the perfect listen for a dog walk, office commute, or spin bike session.
Listen to the full episode if you want to learn:
- How to allocated paid acquisition spending across channels
- Whether to sell pre-selected bundles or allow customers to build their own
- How to improve discoverability with a large product catalog
- Whether you should race to take advantage of emerging ad channels
- How virtual/augmented reality may impact ecommerce behaviors
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
In this episode, Ryan and Jon experiment with a "mailbag" format, where they answer questions that were submitted directly by Drive & Convert listeners. The conversation covers a wide range of topics, which makes it the perfect listen for a dog walk, office commute, or spin bike session.
Listen to the full episode if you want to learn:
- How to drive traffic in a world where privacy provisions are ever-increasing
- Whether you should focus your optimization on your desktop or mobile site
- How to reach that coveted "1,000 customers" milestone for a new brand
- How to allocated your paid acquisition budget across multiple channels
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
Most business leaders understand that you need a significant amount of traffic to run an optimization program that gets results. However, having 100,000+ sessions per month doesn't necessarily mean that your site is ready to optimize with 100% confidence. Not all traffic is created equal, and you have to attract the proper quality and mix of traffic to stand up an optimization program that gets results.
In this episode, Ryan and Jon talk about how much traffic a brand needs to start taking optimization seriously. They also discuss the difference between traffic and qualified traffic, and what impact that has on CRO efforts.
Listen to the full episode if you want to learn:
- How much traffic you really need to start optimizing
- Why many brands overestimate the quality and volume of their site traffic
- What counts as "qualified" traffic in terms of optimization
- What you should do if you're not getting enough qualified traffic
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
Marketplaces like Amazon and Walmart can be a polarizing topic in the ecommerce space. Some folks swear by them as one of the most effective "growth levers" you can pull, while others contend that what you're required to give up in exchange for access to marketplace customers means that the "juice isn't worth the squeeze."
In this episode, Ryan and Jon assess the current landscape around marketplaces and provide a balanced recommendation for ecommerce brands who are considering adding marketplaces to their growth strategy for 2022.
Listen to the full episode if you want to learn:
- How big the opportunity for "marketplaces" really is
- What surprised Ryan and Jon about marketplace activity in 2021
- How to determine if joining a marketplace is right for your brand
- What opportunities and challenges are on the horizon for 2022
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
In this episode, Ryan and Jon talk about how too many ecommerce brands lead by sharing information about their company, their team, or their mission before they tell a prospective customer how they can help solve their problems or address their needs.
You don't need to sterilize your brand or devolve into some kind of faceless, robotic corporation, but there is a way to serve customer needs first while still sprinkling in some of your brand's distinct personality.
Listen to the full episode if you want to learn:
- Why going "brand-first" is seldom the best approach
- What customers care about most when they visit your site
- How you can maintain strong brand positioning without losing sales
- How the most successful brands are balancing customer needs with company messages
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
In this episode, Ryan and Jon talk about the patterns and trends they saw related to traffic generation in 2021. They also cover some of the expectations they have for traffic acquisition this year and how brands can put themselves in a position to take advantage of those market dynamics.
Listen to the full episode if you want to learn:
- What traffic generation strategies did/did not work in 2021
- What emerging trends or technology will impact acquisition in 2022
- What channels look particularly attractive to brands right now
- How to set yourself up for success in 2022 and beyond
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
The name of this show is Drive and Convert for a reason. At its core, online business is about driving traffic to your site and then converting that traffic into customers using an outstanding product, engaging copy, and intuitive design.
In this episode, Ryan and Jon talk about the relationship between SEO and CRO, including how business owners should be thinking about balancing their efforts between attracting websites visitors and converting those visitors into buyers.
Listen to the full episode if you want to learn:
- The "Chicken or The Egg" challenge for SEO and CRO
- How active CRO tests might impact SEO efforts (& vice versa)
- What are the risks of running these campaigns in parallel?
- What most people are really worried about when they ask this question
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
Most marketers are used to digging around in Google Analytics to review their website traffic from organic search, social media, and email marketing, but far fewer dedicate time to analyze their referral traffic – often to their own detriment.
In this episode, Ryan and Jon talk about referral traffic as one of the most commonly misunderstood traffic sources and highlight why failing to dig deeper into the quality and sources of your website referrals could mean leaving money on the table.
Listen to the full episode if you want to learn:
- What referral traffic is and how it is categorized in your website analytics
- Common issues with tracking referral traffic and how to fix them
- What referral traffic data can tell you about your marketing efforts
- How analyzing referral traffic can uncover ripe opportunities for growth
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
Traditional conversion rate optimization is built around achieving statistically significant results through a combination of research and testing. It can be expensive and time-consuming, but it also carries a >90% confidence level.
In this episode, Ryan and Jon talk about the merits and challenges of another optimization approach known as Rapid Testing. It requires less time, traffic, and resources, but also provides less confidence in the efficacy of the results.
Listen to the full episode if you want to learn:
- What separates Rapid Testing from traditional CRO methods
- Which businesses are a good fit for Rapid Testing
- The benefits and challenges of implementing a Rapid Testing program
- What kind of results are typical of a successful Rapid Testing program
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
It's not uncommon to hear the phrase "work/life balance" thrown around in a business setting. It's usually brought up by well-meaning managers who want to make sure their team is protecting the time and the space to be successful outside of the office as well.
In this episode, Ryan and Jon talk about how work/life balance doesn't always translate to a true 50/50 split. Instead, it usually requires investing heavily in one area of life (Ex: Career) for a period of time, and then slowing down to focus more time and energy elsewhere (Ex: Family) to get back toward a more "balanced" position.
Similarly, a brand's allocation of resources across multiple traffic generation channels can (and should) ebb and flow over time. For example, if you continue to hammer on paid search long enough, you'll eventually run headfirst into diminishing returns. The world's most successful brands acknowledge this, and take a more balanced approach to driving leads to their site – and Ryan's here to help us understand how they do it.
Listen to the full episode if you want to learn:
- Why balancing your traffic generation efforts is important
- The different types of channels you should consider investing in
- What a healthy allocation looks like for most brands
- How to know when you're over/underinvested in a specific channel
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
Fill a room with 100 ecommerce managers and ask them where they are investing their time, energy, and resources to try and hit their growth goals. Chances are, most of them will check the box for Paid Ads, Influencer Marketing, or SEO...but far fewer will have a strategy for conversion rate optimization.
In this episode, Ryan and Jon review the most common reasons why ecommerce brands don't invest in CRO, and why that might be holding them back from reaching their potential. If you're directing most of your spend toward acquisition and ignoring conversion or retention, you may want to listen in to get an outside perspective from two industry experts.
Listen to the full episode if you want to learn:
- Why most brands fail to invest in CRO
- What information gaps or misconceptions hold them back
- What a reasonable testing and optimization budget looks like
- Why more traffic doesn't always equal more revenue
- Realistic expectations around cost, timing, and impact for a CRO program
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
The 2021 holiday season is here, but recent events have made it so that paid acquisition can no longer be considered the "easy button" when it comes to attracting potential buyers to your store. As a result, many brand owners are scrambling to figure out how to generate site traffic effectively and affordably.
In this episode, Ryan and Jon talk about the macro trends that are going to influence consumer behavior and what savvy brand owners should do to make the most out of their holiday campaigns. If you're worried about supply chain issues, record-breaking ad prices, or increased competition from big retailers, then you should listen to this.
Listen to the full episode if you want to learn:
- What economic trends are influencing consumer behavior
- How to stay competitive as ad prices increase
- How to separate yourself from big box retailers like Amazon and Walmart
- Which strategies are going to drive qualified traffic to your site this year
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
With the explosion of direct-to-consumer online retailers, things have been heating up in the ecommerce industry. The differentiators of yesterday have become table stakes for modern brands – those that want to defend their position or gain market share will need to level up from foundational practices to advanced tactics.
In this episode, Ryan and Jon talk about Jon's second book, Opting In To Optimization and review some of the key concepts that are covered inside. The book condenses more than a decade of experience optimizing sites for some of the world's most recognizable brands into a tight, actionable playbook you can read in a week.
Listen to the full episode if you want to learn:
- How to build a culture of optimization inside your brand
- How to better undersand your customer's needs and challenges
- How to use psychology and research-driven design to convert more visitors into buyers
- How to protect your profit margin while chasing ambitious growth goals
- How to convert run-of-the-mill customers into raving fans
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
Believe or not, the 2021 holiday season is right around the corner, and it's shaping up to be another big year for ecommerce brands. Hopefully your preparation is well underway, but there is still time to take steps that will help you make the most of the extra attention and higher purchase intent.
In this episode, Ryan and Jon talk about what brands should be doing NOW to set themselves up for a successful holiday campaign. You'll have a playbook for locking down everything from traffic generation to conversion optimization and post-purchase support.
Listen to the full episode if you want to learn:
- What you should be doing NOW to make the most of BFCM
- How to come up with a compelling offer
- Why holiday shoppers are different from your usual customers
- Why personalization might not skyrocket your sales, but segmentation could
- How to use cross-sells, upsells, and post purchase offers to maximize AOV
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
For many brands, Search Engine Optimization (SEO) is a lot like eating right and exercising regularly. You know that you SHOULD be doing it. You know that it has lots of benefits over the long term. But it's still difficult to find the time to make it happen on a regular basis.
In this episode, Ryan and Jon talk about when brands should start taking SEO seriously, as well as what they should be doing to make the most out of their efforts and what they can expect to get as a return on their investment.
Listen to the full episode if you want to learn:
- Why most brands (understandably) start with paid search instead of SEO
- When (and why) brands should start giving more attention to SEO
- How do stand up a high-performing SEO practice the right way
- How to find an external service provider you can trust
- Why SEO is a smart investment for your business
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
Many brands default to discounting as the "easy button" for juicing their online sales, but doing this too often can put you on a price-cutting hamster wheel that is increasingly difficult to get off of.
In this episode, Ryan and Jon talk about the psychology behind discounts, why they are so attractive to consumers, and how you can achieve similar results with alternative strategies that don't undermine the value of your products or position you as a "bargain brand."
Listen to the full episode if you want to learn:
- Why discounts are so compelling for consumers
- The downsides of habitual discounting for your brand
- When discounts are the correct pricing strategy to use
- Alternatives to discounting that work just as well
- How to assess and improve your current pricing strategy
If you have questions, ideas, or feedback to share, hit us up on Twitter. We're @jonmacdonald and @ryangarrow.
There's currently lots of frustrations in the E-commerce world around ad performance. What we all expected to happen in 2021 is not happening. Cost per click is up, sales have dipped, and the data is telling us that there is a lack of volume of sales –– but is this just poor advertising channel performance? Or is this pandemic hangover as more folks rush back to retail? Today, Ryan and Jon unpack these questions.
Clients at The Good are interested in how firms like Logical Position are still getting results for their clients –– and why optimization is more important than ever to make the most out of the traffic they’re already getting. The challenge I’ve seen, and I’d like to address today, is that I haven't seen anybody really talking about optimization when it comes to iOS15 updates. And that's what Jon and Ryan focus on today.
Today we're tackling the hot topic of Facebook and how Apple's ios 14 update has affected its performance. Based on analytics, it appears like the data might be going in a negative direction, and many people are jumping ship to other platforms. But should you? Today Ryan tackles the question of whether you should be re-directing Facebook traffic to other platforms.
Direct-to-consumer is all the rage right now...and for good reason. Removing wholesalers, retailers, dealers, and marketplaces generally reduces costs and provides a better purchasing experience. BUT, the strongest brands find a way to balance a DTC model with other external sales channels. When considering this option, many brand owners are justifiably concerned about introducing channel conflicts to their business. So, today we're going to talk about channel conflict and how to manage it effectively as a fast-growing ecommerce brand.
Read the blog:
https://thegood.com/insights/overcoming-channel-conflict/
With that advent of smart shopping campaigns, it has become ridiculously easy to start spending money on Google shopping ads and to see some return. But one area that's become overlooked is text ads. Ryan explains why you shouldn't be sleeping on text ads if you want to push your brand further.
Digital marketing can start the fire, but CRO adds fuel to the fire. Yet, it seems every business has this bank of excuses on why CRO can't happen now, or why it doesn't make sense. Today Jon overcomes these objections and explains why CRO can be of such a high value to your business.
There's no end to new platforms popping up and claiming to be the next great source of traffic to your business. First there was Yahoo. Then Google. Then Facebook. Then Twitter. Then Instagram. Then TikTok. Then… well, the list goes on and it will forever be growing too.
So, how do you decide which one to test and how to gauge the success or failure of these new exciting ways to spend your marketing dollars to generate business? Luckily Ryan is here is to break it all down for us.
TRANSCRIPT:
Jon MacDonald :
Hey Ryan, welcome to another episode of Drive and Convert. Today we're going to talk about shiny new traffic sources. Right. There's no end to the new platforms popping up and they're always claiming to be the next great source of traffic for your business. So, we're going way back first though is with Yahoo, then Google then Facebook then Twitter then Instagram now everyone's on TikTok. I mean I'm not but everybody is supposedly. Definitely feeling old these days based on these stats.
Ryan Garrow:
Yeah. Me neither.
Jon MacDonald :
But look, the list goes on and on. And I'm sure I've left a lot off of that list over the history and it will forever be growing too, right? So, what I'd love to get schooled on today from you is how do you decide which one to test? And how do you gauge the success or failure of each of these new and exciting shiny objects to spend your marketing dollars on to generate revenue? It's a lot, right? But look, with so many social networks and traffic sources popping up seemingly every week, how do you know if it's a good place to spend money?
Ryan Garrow:
The real answer is, always it depends. But that's always the answer we give everybody no matter what we're talking about in the digital marketing world. It's my least favorite answer but it has to be the one you give every time and with context. And when you're looking at all of these wonderful platforms and companies that you can spend money on the ads, I think the first step is to really understand what the platform is. Who's on it? What are they trying to do? What's their goal of being on that platform?
Because we all really understand Google and that was always a pretty easy one. Like I'm on Google to find something either information or a product that's why I'm there. And it makes a lot of sense logically saying, "I get it, if I am selling that product or I provide an answer to that I want to show when they're searching for that." There's a lot of intent there. If you're selling houses you might not necessarily want to spend a lot of time on TikTok, generally. TikTok is skewing. It's getting older, I think, as young people blow platforms open like in Facebook and Instagram did and then older people take them over because I think they're being cool by getting on them.
Jon MacDonald :
I saw a stat today about Facebook that something like 70% of people over 60 are on Facebook, which is the highest user percentage base. It's crazy.
Ryan Garrow:
Oh, [crosstalk 00:02:57].
Jon MacDonald :
We used to tell our customers you want to convert older folks and high income, you would advertise on Microsoft Bing. Because they're using Internet Explorer out of the box and not changing the default search engine, right? So-
Ryan Garrow:
Correct.
Jon MacDonald :
... But now it's definitely Facebook too. Like it's crazy.
Ryan Garrow:
What's sad, well I'm not going to say sad, but you have to advertise through Facebook to really target Instagram. You have to use that Facebook ads platform like Joyful Dirt, which hopefully I'll be able to bring this back later to talk about one of my issues with the Joyful Dirt brand. But Joyful Dirt doesn't have anything going on on Facebook really. Instagram because we're targeting millennial plant moms generally, I mean obviously anybody can buy the product, but we get very little and to no interaction on Facebook and it doesn't work when we market on there.
But at least you're understanding that, right? If you are selling arthritis cream you want to be on Facebook. And we've got a company that sells arthritis cream and does really well on Facebook. So understanding who's on it, where it's going, and then also just how they're interacting. If it's short-form video like TikTok, then if you're not prepared to make short-form video you're probably not going to be tremendously successful in that space. Do you have a personality? Like if you're just a brand throwing ads up randomly on TikTok with no face to the brand, I can't imagine it's going to do well.
And I think in early on you've got these platforms that you have to really get into the platform, I think, and understand how you're interacting. And so if I was going to spend my money on TikTok step one is I would go join TikTok. Like I'm not there, I don't want to be there but that would be understand who's there. And in theory until you get in there you won't even know that, you have to get in there and start watching TikTok. You know I was never a Snapchat person either, I just wait for Instagram to copy their stuff and then I'll see if I like it. But again, understanding where the ads are being put there can really help you figure out does this conceptually make sense for my brand?
Jon MacDonald :
So I'm hearing from you if I could summarize two things, one is know who your target audience is and where they're at and what platform and then that's a good place. And then B is test it, right? You really don't have a choice you just need to test it. Throw some money at it and see what sticks if you think you have a good understanding of your consumers being on those channels.
Ryan Garrow:
Yeah. Like once you can advertise in there and decide that this is based on who's on it, who my demographic is or target market is go spend some money. And it could be that you're trying to open up a new audience, so it's you're testing it for that. Like if you want to sell to teenage kids TikTok may be a great place to start pushing into.
Jon MacDonald :
That's great. Okay.
Ryan Garrow:
I mean it's gradually older, but.
Jon MacDonald :
Yeah. So how do you test the traffic then?
Ryan Garrow:
Well, once you're on the platform and you've seen what it looks like, my lens that I look through is I want a light money on FIRE budget. And I have to be comfortable with it just not working, because we don't know. It's a new traffic source for you, it's a younger platform often, because we're talking about the shiny new ones that haven't matured like a... If you're not advertising on Google and Facebook I probably don't recommend that you start looking at the shiny new ones yet.
Jon MacDonald :
Right. Yeah, start with the basics.
Ryan Garrow:
Yeah, start with the basics. And then, okay great. It makes sense to do this so you need to have a budget in mind that if it goes horribly wrong and you lose it all and you get no results, it's not going to sink your business. If you're doing a hundred thousand a month in revenue you're not going to go onto a brand new channel for the first month probably and spend $50,000. It just doesn't line up, doesn't make sense unless there's some crazy reason that you believe in your core that that's there.
Jon MacDonald :
Maybe you like lighting money on fire.
Ryan Garrow:
True. Maybe you do. And I've got a great thing I can sell you, I'm sure, somewhere that's going to run 50,000 bucks. And so have that budget first.
Jon MacDonald :
Mm-hmm (affirmative).
Ryan Garrow:
Then you need to make sure that you can track the traffic. Just by going off on advertising there you have to be able to tag the ads to make sure that when they go to your website or wherever your call to action is, Google Analytics can see that traffic coming in and then tell you if they took the right action after they came to the site. And that's not always the easiest. If you have a profile, let's pick on Snapchat, and you're driving traffic from Snapchat already, does your ad set allow you to do UTM parameters in the URL when you're sending traffic over?
Because you want to be able to differentiate organic traffic from that platform and the ad stuff or the traffic from that. Even a lot of companies don't even do that with Instagram and Facebook still. And just look at the different, is it coming from the organic Instagram interactions? Or is it actually coming from an ad that I placed? So be able to track it, and then watch it carefully as it's coming through. Either your marketing team or you as the business owner probably has a good gauge of traffic as it's coming from a new source pretty quickly.
And so that's where that light money on fire you have to have some patience to let it do some of the stuff. If there's an algorithm that's helping run your ads for you. Facebook's does some great algorithms in their space, Pinterest has some going. You have to give it enough to do something as far as the budget's concerned. Going out with $5 is probably not going to give you a good test and you also have to give it some time. It's just that data collection to really see it churn and see, is it improving after seven days? Or is it staying the same? Or is it getting much worse? Because maybe you have to make some changes.
Jon MacDonald :
Now that's a great segue to my next question which is, how do you have the right expectations, right? So you're saying give it a week or so at least, but what are the right expectations I should be having? Obviously if I'm setting the money on fire is what you're suggesting here, my expectations are pretty low, right?
Ryan Garrow:
Yeah.
Jon MacDonald :
Maybe I'll stay warm. But other than that, I think it's interesting. I should expect to learn probably, right?
Ryan Garrow:
Mm-hmm (affirmative).
Jon MacDonald :
What else should I be expecting here? How do I set those right expectations?
Ryan Garrow:
Generally, and again I can't give the specifics for every potential business listening to this, but generally newer platforms are not going to generate profitable sales initially. And so what you're often looking for is new users, new sources of traffic, people that you're not reaching in other platforms. Because if you're already reaching everybody on Google and Facebook, why would you go try to target those same people if you're already capturing them at a rate or at a cost that makes sense?
So you're trying to move generally up the funnel, and when you move up funnel or find a different source of traffic don't expect it out of the gate to be profitable. It can happen and nothing is impossible lightning can strike, and you can be profitable out of the gate. And if that happens continue dumping money on it and figuring out what's causing it to work and try to analyze why and how this happened. And so, have low expectations for it. You're trying to see trend lines going in the direction you need marketing budget to get to.
And so if the first week it's you spent, I'm going to just use random numbers, if you spent a thousand dollars in the first week and it drove $200 in sales on your site, great. Week two, did that $2,000 generate more revenue than the previous week? Are we starting to see a trend line in the same direction? Or did that extra thousand dollars a week to generate $50 in sales? What is that conversion rate of the traffic? Be paying attention, do you have to go to the homepage on that? I mean, where are you driving? What's the call out that you have within the ad that you're running?
Jon MacDonald :
So what we're looking at here, Ryan, in reality is not even trying to break even, but you're paying to acquire a new customer that then you're looking for the lifetime value, right? And that's really where you're paying to acquire that new contact, that new customer. And then at that point you can continue to sell to them and continue to market to them and that's where you're going to make your money.
Ryan Garrow:
Yes. I mean often in these, right? It's the expectation is not out of the gate head profit. And if you have that I think your chances of success are higher. Your chances of having the patience necessary, you see a platform out. I think often I talk to business owners or marketing teams that all marketing needs to drive a profit, and if it's not driving profit why are we doing it? And I think that's very shortsighted of a lot of business owners and marketing teams and saying, "Look..." Billboards for the last hundred years have not had direct attribution to what's going on or the sales that are coming, but people still did it. And there was still value there that people knew about or saw.
And so sometimes on these new platforms it may be a branding play. But can you start seeing the impact? Or if you're in the data enough? I have a really good feeling in the businesses I'm involved in when something is working. I might not see the data yet but I can say, "Ooh, this is definitely moving the needle for the brand. I don't necessarily know yet how or why, but I'm going to continue doing it." And then the opposite is true sometimes as well like, "This is just not working."
And the marketing team may be like, "Well, how do you know?" I'm like, "I don't see the data telling me that yet, but my gut's telling me that." So I'll let me be. If the marketing team has faith I'll let them continue on for a little bit and say, "Okay, I'm going to trust your instincts on this and go against mine, but let's see what happens." You can't always run a business, I don't think, on gut you have to have data. And with a new platform that you have no experience in you have nothing to base your gut on to get the data.
Jon MacDonald :
Yeah, you have a gut feeling.
Announcer:
You're listening to Drive and Convert, a podcast focused on e-commerce growth. Your hosts are Jon MacDonald Founder of The Good, a conversion rate optimization agency that works with e-commerce brands to help convert more of their visitors into buyers. And Ryan Garrow of Logical Position, the digital marketing agency offering pay-per-click management, search engine optimization, and website design services to brands of all sizes. If you find this podcast helpful, please help us out by leaving a review on Apple Podcasts and sharing it with a friend or colleague. Thank you.
Jon MacDonald :
Well let me ask you this then, what have you seen work? Looking at these expectations, when has it worked out well for you?
Ryan Garrow:
Well, new platforms like Instagram. I think the Instagram rollout and execution, thankfully it was coming from Facebook that already had a very solid marketing program built out at the time that they started doing ads on Instagram. And they did it at a small level saying, "Hey, we're going to let some people into the beta. We're going to start it here." But at the initially Instagram was not a driver of valuable traffic for marketing initially. I mean, we had some clients that started on Instagram initially and quickly and it was bad. It was pure branding, there was not people on Instagram that were used to seeing ads.
So, I think you have to be aware of where you are on that adoption and on the maturity of a platform as well. Because it took Instagram a while to get people to understand that I'm going to see ads and they're going to be targeted to me and I'm going to take action on them. Innately at the beginning of the platform it was I'm scrolling through a feed, I'm laughing, I'm seeing my friends, and seeing pictures rather than words on Facebook. I mean initially I thought Instagram is stupid. I like reading and nobody's going to like that pictures and then I'm like, "Well, I'm..." Now I don't even get on Facebook and I'm on Instagram because I like images.
Jon MacDonald :
You and the rest of the world as it turns out, right?
Ryan Garrow:
Exactly.
Jon MacDonald :
Look, I buy a lot of stuff that I find in discover via advertising on Instagram. It's just the reality is I hear about products on Instagram and I end up... I mean I just bought one last night that popped up, it was the weirdest thing. It was a hose reel. And I was like-
Ryan Garrow:
Our lives are so exciting.
Jon MacDonald :
... I know. But I'm like, "You know what? I just spent all weekend with one of those crank hose wheels that's without wheels on it and it's really cumbersome to move. And it's just a huge issue and I can never get the hose long enough. And here it's one that attaches to the wall and bolts in and then it pivots and you can pull on the hose and it auto retracts and it's a 90 foot hose. And I'm like, "This is awesome." Like it was a hundred dollars, a hundred and change, and I was like, "That is going to make my life so much better. For that a hundred dollars I am not going to have to mess around with this hoses ever again. I mean, I'm sold."
Ryan Garrow:
Oh, yeah.
Jon MacDonald :
And it was like a 10-second ad of this guy working this hose that's attached to the side of his house and I was like, "That needs to be me." Right? And if I saw a text ad I would have never bought that, never clicked on it. But I saw the video of the guy using it and I'm like, "Yeah, I just had that problem the other day." Now how I knew I had that problem that's a whole nother episode maybe. But I will say-
Ryan Garrow:
It's listening.
Jon MacDonald :
... I know. I will say I was complaining about it quite a bit. But not on Facebook and not on Instagram, so I don't know. But look, I think that it can work well, right? What about what have you seen not work though? Right? You've tried a lot of these things, you've tested a lot how do you know when a test is going poorly?
Ryan Garrow:
Obviously being in the marketing world I want to know and see and experience a lot of things on my own, so I know what the platform is doing. And so the last one I tested personally was Pinterest last year, because Pinterest fits all the buckets for me. For Joyful Dirt there's plant people all over Pinterest. There's some big influencers there, there's a lot of interaction on plant pictures, there's a lot of interest on Pinterest for when to plant certain parts of my garden, what kind of light do I need for this plant?
So all of it lined up I'm like, "Okay. Well, if my target market is women between the ages of 25 and 45, my wife is in that demographic and she loves Pinterest." I go to Pinterest for meals so I was like, "Okay, this is just logically checking all of the boxes for me." And by being an early adopter in a platform I know there can be some pretty significant advantages if you understand the algorithm early enough you can really step on the gas and your competition may never catch up. So I was pretty excited about Pinterest.
Jon MacDonald :
Mm-hmm (affirmative).
Ryan Garrow:
Called Pinterest up, I got a rep I was like, "Okay, I've got my budget. And for me at the size of Joyful Dirt last year my light money on FIRE budget was about $3,000." And then Pinterest was like, "Yeah, you got to go at 5,000." I was like, "No, I'm going to give you 3,000 and you can tell me based on your knowledge of the platform, your Pinterest. And so, you want me to be successful because I can spend more money with you, and I will spend a hundred thousand dollars a month with you if it's working and not a problem."
Jon MacDonald :
Right.
Ryan Garrow:
And they're like, "Okay." So I was like, "How long do you think we should run?" Like, "Well, we like to see a couple hundred dollars a day for 14 days." I'm like, "If you say so." I was like, "Why?". And then we went back and forth and I was like, "Look, I'm going to know pretty quickly if it's working. I see data, we're going to tag ads. I'm confident that if it's working I'm going to know quick. But I'm going to give you the benefit of the doubt and you help me and we'll design." So we went back and forth.
22 days in we had spent $2,700, tested different ads, we'd done some things, we'd seen a lot of impressions, we had a hundred dollars in sales. And I'm like, "This platform is not working for me. I am not seeing the traffic coming to the site that is engaging well with our content on the site." The images were getting clicked, I mean it's just I could tell that their platform... And this was November of 2020. And so people were on Pinterest, it was holiday season, it was impulse purchase can be... I mean we're only $15 so that's not a difficult impulse purchase for our target market. So my expectations were high and the reality was bad.
I still believe Pinterest has a huge potential for a lot of brands. I personally just think it doesn't have the maturity as an ad platform yet. It's got the eyeballs, it's got the people but as people are searching and scrolling Pinterest they're not yet thinking the same way that they are on Instagram. So I don't know how that changes, I don't know how Instagram got us to think that but for whatever reason like you I will click and buy things on Instagram that I think are cool. And that it's easy.
Jon MacDonald :
Well I think it's different, Instagram you're open to discovering new things because you're just scrolling through a feed. Pinterest, do you have the search intent, right? In the sense that you're setting up, you're looking for inspiration around something specific. And I don't know that people are going to be on Pinterest looking for inspiration around fertilizer. Right?
Ryan Garrow:
Mm-hmm (affirmative).
Jon MacDonald :
And I think that might be the difference. Yes, they're related in terms of like, "Hey, I want to know what house plant I should get for this. Oh, the fertilizer that might work well." I could see that perhaps, but I don't think people go there with the buying intent, to buy off of there, right? They're more like, "Hey, I'm putting together a new living room decor and I'm going to pull some Pins and one of them is going to be the plant that I want to use." Right?
Ryan Garrow:
Mm-hmm (affirmative).
Jon MacDonald :
And so I think it's a different mode. And that's where I've heard from folks it doesn't work as well for advertising, but that's interesting. I mean, what I love about talking to about all this stuff is you have the real world examples, right? You've done it, and so for your own brands and for thousands of clients so it helps. So let me ask you this then, generally somebody comes to you at Logical position and they say, "You know I'm looking to get into this shiny new platform or source of traffic." How do you advise them? What do you tell them right upfront? I mean, you've given a lot of good advice already today, but I'm coming to you and I say, "Hey, there's a new platform I really want to do something with it. What do you think I should do?"
Ryan Garrow:
Yeah. 99% of the time? I will say, "No! Do not do that!" And it's not because the platform might not be good for them, it's often they haven't maxed out what they could or should be doing on Google and Facebook SEO. I look at most marketing like most people in a funnel. And so when there is search intent on Google they are trying to find that product to purchase and you're not in front of them. Why would you go off and try to convince somebody that's never heard of you, may not even be considering that product that you sell to come to your site and buy something? It doesn't make any sense.
So for most of these shiny new platforms it's larger brands that are going to pave the way. They have the budget to go light on fire and spend a million dollars figuring it out. And the platform will mature and generally they go downstream. Like the first advertisers on Facebook and Instagram, which is our most recent memories of successful platforms, were large brands. They went on there, we want a brand, we want to be in front of people, the Coca-Colas, the AT&Ts of the world they did it. The platform matured and went downstream and allowed smaller advertisers to take advantage of all that algorithm, that learning that happened early on, and generally make it work for them.
Most business owners at Logical Position that are bringing up Pinterest, for example, because it's still is a very buzzy platform now. Recently I IPOed last year, I bought some of that because I do believe in the platform. Business owners are always trying to find where can I get some new source of traffic that my competitors don't have so I don't have to compete on Google? Because Google maybe is not as profitable as it was five years ago for my brand. So oh, all I need to do is go spend my 5,000 on Pinterest and that's going to get me the cheap traffic because there's less competition. No, probably not. And most business owners have bad goals, and you and I talk to lots of business owners all day every day. And-
Jon MacDonald :
We have a great episode about that, setting bad goals.
Ryan Garrow:
... Yeah. You have bad goals. And so, spend down at the bottom of the funnel until you have maxed out and you are breaking even on new customers. At least get to that point. And you're like, "Okay. From the search intent, let's move up a level and say the audience of my target market on Facebook and Instagram I need to max that out and make sure that I'm capturing all the people in the algorithm that has more history. And we can validate that it works well for a lot of other brands, there's proof there, take care of that piece."
And then, "Hey, have you actually worked on raising your organic rankings on Google and Bing and Yahoo where people have the search intent that you could shoot or could be getting a higher percentage of that traffic at the bottom of the funnel?" For most brands, they should be doing some of that before they go try something way at the top of the funnel, trying to drive Pinterest traffic or TikTok or Snapchat. So most people don't even need to be looking at these, but they do.
And so my message today is stop. Don't go waste your money. I didn't even follow my own advice at Joyful Dirt. And that is I'm not perfect, I will make mistakes but my job is to learn quickly and pivot. I also wanted to a degree understand Pinterest myself so I can be advising people that it's not there yet for most of you.
Jon MacDonald :
Great. Well, this has been really informative and really helpful. So I've learned a lot. If there's a whole new shiny object out there for driving traffic, you generally recommend letting others figure it out a little bit before you jump in. At least figure it out yourself if you were going to test it out and jump in, but always be testing it, right? Start with a small amount and then figure out from there. Set the right expectations. You're going to light money on fire and that's okay.
You're going to try to otherwise go for the branding and get that new-to-file customer that you're looking for the lifetime value not just that initial sale, and then go from there. And generally unless you're a large brand, you might want to just avoid those shiny new platforms and figure it out a little bit. There's always going to be room there a little bit in, doesn't have to be as mature as Google, right?
Ryan Garrow:
Yeah.
Jon MacDonald :
So, this has been informative. I appreciate it as always getting schooled by Professor Garrow over here. And I look forward to learning more next time. Thanks for your time.
Ryan Garrow:
Yeah. Thank you, Jon.
Announcer:
Thanks for listening to Drive and Convert with Jon MacDonald and Ryan Garrow. To keep up to date with new episodes, you can subscribe at driveandconvert.com
Product descriptions may seem straightforward, but if done right they can significantly improve conversion rates. Today Jon explains why product descriptions are one of the most effective changes you can change to your website and how to write great product descriptions that will convert.
The article Jon mentioned on how to write production descriptions that sell:
https://thegood.com/insights/product-descriptions/
TRANSCRIPT:
Announcer:
You're listening to Drive and Convert, a podcast about helping online brands to build a better eCommerce growth engine, with Jon MacDonald and Ryan Garrow.
Ryan:
Jon, you recently wrote an article that kind of put my head in a spin around product description.
Jon:
Sometimes that's too easy.
Ryan:
I know. Spinning my brain's not necessarily the most difficult thing to do if you're in the space, but you wrote an article about product descriptions and how they can significantly improve conversion rates. And that surprises me because I personally ignore those all the time and I focus on other aspects of marketing and driving traffic as per usual. But that for me, is kind of like a side, just put it in there. As long as it's in there and then we can manipulate it going into Google shopping, where it's going to have an impact on your traffic. Just get something in there, period. Obviously I was wrong on this in my opinion. And I'm probably not alone in that. I'm excited today, Jon's going to school us on product descriptions and what you should be doing as an eCommerce business to leverage that to improve conversion rates. Jon, kick us off, explain at a high level, of all the things you could be focusing on on your site, why product descriptions in your mind, are one of the top things you can be doing to improve conversion rates?
Jon:
Yeah well, I think you basically just said it best in your tee up here where a lot of people just don't pay attention to this. And I think it's really, really forgotten. And that's a challenge in that as you're optimizing websites, it's one of the first places we go because most people forget about it. But look, we've learned over a decade of running AB tests on hundreds of product detail pages that optimizing your product descriptions is just one of the highest return, lowest investment improvements that an eCommerce manager can make. And look, they're key part of your potential customer's decision making process. I think the stat that my team here at The Good always says is that 87% of consumers rate product content extremely or very important to deciding to buy.
Ryan:
Wow.
Jon:
87%.
Ryan:
Way higher than I would've thought.
Jon:
Right. Well, that's exactly the problem is most people don't think about this. And so if you're not optimizing product descriptions, you're certainly leaving money on the table. That's why you should focus on this.
Ryan:
If we're going to improve it, if we just assume that for example, my product descriptions are just terrible because I didn't focus on them, what are the areas I need to be looking at as I'm staring at my product description? And where do I start? I guess would be the best question.
Jon:
Well, I think there's four main areas that everyone should be focusing on and we can chat about today, but we can break these down. But the first is the real job of a product description. Most people think the real job of the product description is something that it's not. And we'll dive into that a little bit. The second is that it's an effective product description template needs to be used, so we can talk about what goes into those and what items you need to check the box to really make it great. And then how to write one that converts. It's not just having the content, you need to also be thinking about how you're writing that content.
And then we can really talk about frequently asked questions around the product descriptions that I get, because I get a lot of questions about it. Once we start optimizing, people start thinking about it, a lot more questions come up than you might imagine. Partly, that's why we're doing the show today, it makes your head spin a little bit. That means there's a lot of questions there and you're not alone in that really. Maybe we can just break those four down and discuss each pretty briefly.
Ryan:
Yeah, I'm excited for it. What's the real job of a description of a product? In my mind, it's to describe the product. It's a blue t-shirt, congratulations.
Jon:
Yeah, right, exactly. If you just said blue t-shirt, how many sales do you think you're going to get? Let's just poke a hole in the idea that the job of the eCommerce product description is just to describe the product. I think that that's not right. Given the name, it makes sense that most folks think this, but product descriptions aren't there to just describe what's on your eCommerce site. They're also there to qualify. Do they help your visitors quickly assess, is this for someone like me? Do they persuade? Is it a compelling description? Is it customer centered on the reasons they should be considering that product?
And then it's also there to surface. And what I mean by that is to help people find the product. This is the third one on purpose because a lot of people will stuff keywords throughout in terms of search engine optimization in optimizing the product description, but look, SEO keywords and search terms, and if you use those in a natural way, you'll get the page to show up and you want it to show up in search engine or even Amazon results if you're talking about optimizing your product descriptions on Amazon, which should also be done.
Here's really one way to really think about this, product descriptions are a bit like your 24/7 in store retail associate for your online store. We often talk about if you wouldn't do something in a retail store, don't do it on your website. Let's take that analogy a step further and say, "How would associate talk about the product?" If you walked into a store and said, "Hey, I'm looking for a t-shirt," what questions are they going to ask to help you find the right one in that store? As a virtual retail associate, the product description can have that same kind of impact. And if it does its job well, it's going to draw visitors to your goods and then increase the conversions on those. And if it's done poorly, it's just going to frustrate visitors and push them away and hurt sales. It's very, very similar.
Ryan:
I like that. I think a lot of people, at least in what I think through is I don't think about qualifying. I'm like, you got to my page, you click on my products from Google shopping, you saw the price, just go buy it. And then if I'm in the jar looking at the label in the wrong way, from that perspective and I step out, I realize, okay, well I know conversion rates on shopping traffic is generally lower than category page traffic and so I'm like, oh well, possibly because my category is doing a better job describing a product or qualifying that person coming in and I'm just leaving that there rather than pulling it through and looking at qualifying them.
Jon:
Yeah. You're not alone on that. A lot of brands look at a category page as an opportunity to convert. I look at a category page as an opportunity to help somebody to the next step in the funnel, which is get them to that product detail page. And that's where you can really convert and sell and make sure people are getting the right product for them.
Ryan:
Okay, I concur. Tell us then okay, once I decide that it's more than just describing a product, what's a template look like that's going to help me through creating this product description that is going to be more than just describing my product?
Jon:
I love when I can change minds. And I'm glad we're helping do that today. All right.
Ryan:
We are.
Jon:
Again, here.
Ryan:
I'm taking notes.
Jon:
There are a handful of bullet points of things that you want to ensure are included. First of all, you need a descriptive headline. Use a product title that's going to hook your audience. Bonus points if you can connect with them emotionally. We don't want blue t-shirt, we want the t-shirt that makes your dad bod look hot.
Ryan:
I'm getting those ads on Instagram, by the way. I'm like, no, this is terrible.
Jon:
Ryan's looking good today in his shirt, by the way. All right. Benefits focused paragraphs. Use a descriptive paragraph to explain why, and I mean exactly why the customer benefits from the product. Too many people talk about features and that's it, they're just bullet point features and then don't talk about the benefits. You know how I led with the t-shirt that's going to make your dad bod look hot? That's what we want to be talking about here. What's the benefit? Not that it's a blue t-shirt. Yeah, that might be in there, but what's the benefit of wearing that t-shirt?
The other thing we want to have in here is a key benefits list. Follow that description with a bulleted list of product features and benefits and this is where you can get into those details that if somebody is just skimming, they're going to look at that list. You're really what you're doing here is you're providing the benefits in a paragraph, maybe even telling a little bit of a story could be really helpful there. Don't make it too long. But then if somebody really wants, just give me the details. I already know I want a blue t-shirt, I just am deciding between two or three different ones and they want to know the specs and the features, that's where they're going to go is the bullet list. Don't bury those in the paragraph. The paragraph should be, hey, here's the benefits to you. If you want to know the features and the details, look at the bullet list that comes next.
And then the fourth thing is, add some additional motivations. Really what we're trying to do here is just minimize those remaining purchase hurdles. Will it fit? Do others like it? Do things like credibility, social proof, you can bake in product reviews or even urgency. And of course, make sure you have a clear call to action. So many brands, we talk to have four buttons to add to cart and it's like, oh, you can use quad pay, after pay. You could use Amazon checkout. You could use both. And it's like, just give them one button and then push that to the next step. Get them to commit and then ask them how you want to pay.
Ryan:
Because my brain goes in funny directions when you say urgency, can you explain what that means from you, your perspective? Because it's probably not the little popup thing on Shopify that says, "Hey Bob in New York just bought this and Suzie in Florida just bought.
Jon:
You know me well.
Ryan:
Because I guarantee you don't like that one because I don't like that one.
Jon:
Yeah, nobody likes that.
Ryan:
And I don't have as many dislikes as you.
Jon:
I call that one of those wildfire apps and I call it wildfire because they just spread without anyone knowing how it started or why it's spreading.
Ryan:
Yeah, my competitor's probably doing it so I did it, and that's the worst way.
Jon:
And you don't see those apps as much anymore, a couple years ago, it was really popular and then everyone installed it and they realized this isn't doing anything. And also half of the companies using it are aligned about who's purchasing what, they all had Bob from Waco, Texas and it was kind of like you see Bob from Waco, Texas.
Ryan:
That guy shops on every site and I've been on.
Jon:
Exactly. And you're kind of like, that's the default it gives you. Here's the other thing. I really think what you need to be thinking about here in urgency is stock levels. And I'm not talking about lying. I'm saying, okay, only a few left. And what I mean by few? Well, I have two or three and you'd better buy it right away or it's going to go out of stock. There's some great tools, especially if you're on platforms like Shopify that are great apps that will do dynamic badging around quantity left so it can pull your quantities and do a dynamic image overlay on your product images. It will put a badge up in the corner that says, "Two left, one left," whatever. That's what I'm talking about with urgency. Or something like, hey free shipping.
You're doing an offer, not a discount. When I talk about urgency, I'm not talking discounts as you know quite well. There could be some offers. It could be, right now it's a buy one, get a free gift. There's a whole litany of offers you can do that are not discounting and so I think when I'm talking about urgency, I'm talking about those type of items.
Ryan:
And so generally if you're a brand that has just tons of inventory, you have to focus more on getting creative and incentivizing without discounting to get that purchase from the product page.
Jon:
Right, exactly. Yeah. Yeah. Create urgency if it's necessary. The other thing we see perform really well in terms of urgency is if it's out of stock to sign up to get notified when it's in stock. We have a client we've worked with for years, that is a really well known Japanese outdoor brand, outdoor camping high end. And what we have done for them over the years is help refine their out of stock notifications. They have some products that never are in stock because as soon as they send out that out of stock notification, they burn through their stock again.
And I'm not talking that they only get five or 10 in, no, they get thousands. But the thing about it is, is that consumers have all signed up for this list and they want these products. We say, "Hey, you want this product? Sign up to be notified." And then we send out on an email and that email goes out, "Back in stock, click here to buy it," adds it right to the cart and they're able to purchase. And then before it even ever hits the site and it changes the product detail pages show how much stock is left, it's gone within hours.
Ryan:
Geez. Yeah, I'm going to test pre-sale. I'm going to say, "Hey, this new blend from Joyful Dirt's coming out, we're going to start advertising it and pre-sell it on social so we can start demand, figuring what demand looks like, what our production runs need to look like."
Jon:
That's a great idea.
Ryan:
And hopefully there's a lot there, but if not, they were like, "Yeah, we're only going to produce a few hundred. We'll be fine." Okay, so what else do we need to be considering what's average eCom business owner not going to be thinking about that you know that they don't even know to ask? What don't I know that I should know.
Jon:
Well, I think there's some simple questions that need to be answered. Let's look at this as maybe I don't know, questions that somebody doing a natural deodorant product might have. You need to think about this, who's the customer? That's always the first one, who's the potential customer? When you're starting to write this, you need to be thinking about that first. Let's say here, it would be men and women who are fed up with chemical packed deodorants. Just being a normal deodorant and saying, "Hey, people who don't like to stink," that's not going to be good enough. What's your differentiating point?
The second is, what problems does it solve? This is where you can get into it helps keep them stink free. The potential customer is not the problem, it's what pain are you solving for them that is a little bit deeper than the surface level? And then the problem it solves is really the high level okay, people buy deodorant for this main reason. But the differentiating point is what's going to define that potential customer.
Then you get into what desires does it fulfill? For this theater and it would be something like feeling healthier, more responsible towards their bodies and the planet, maybe just feeling less dirty and smelly. They could be that generic. And maybe they've been fertilizing their garden all day with a Joyful Dirt and now they don't want to come back into the house and smell.
And then you need to be thinking about what objections people have. And this is where it's like, hey, why are you using a natural deodorant? Or maybe other natural deodorants just don't seem to work or they lie about the ingredients. Those are all types of things you should really be thinking about there.
The next question you really want to ask yourself is why you? Why your brand? Compared to the other guys, why does this deodorant actually work? And then last of all, definitely not least, but you really want to think about what words your consumers are using so you can mirror what they're looking for there. And this is great, this is where user research can really come in, just interviewing consumers, doing some user testing, for instance so when they talk about what words they use, things like natural, fresh, perhaps scent or confident, and those are words that you can bake into your product description. They're going to write it for you. And if you go and you answer all of these questions in an outline, kind of like I just did where I answered each question a little bit about deodorant, you'll have most of your product description written and then you can move on from there.
Announcer:
You're listening to Drive and Convert, the podcast focused on eCommerce growth. Your hosts are Jon MacDonald, founder of The Good, a conversion rate optimization agency that works with eCommerce brands to help convert more of their visitors into buyers, and Ryan Garrow of Logical Position, a digital marketing agency offering pay per click management, search engine optimization and website design services to brands of all sizes. If you find this podcast helpful, please help us out by leaving a review on Apple Podcasts and sharing it with a friend or colleague. Thank you.
Ryan:
I know though, pictures are worth more than words and so do you consider the images on the side of a product description as part of the description? Or is that different entirely? And that's a whole nother conversation around the images? Or do you use them together?
Jon:
I think it's a whole nother conversation, quite honestly. Although people say a picture's worth a thousand words, I think that's true. And that's why pictures, we should do a whole nother episode on that because I do think it matters. And I think that there's a lot of things out there that you could be doing. I think on model, off model, 360, in use, size comparison. You really got to be thinking about all the different types of images that you could be doing. And a lot of brands will focus on the words, because a lot of consumers will go to the words and with one good photo you can still get them to convert. But after that, you really need to dive in and start thinking about all the other photos that you could do. And that's a ripe opportunity for optimization as well for sure.
Ryan:
Got it. You've done a lot of obviously user testing and listen to a lot of people go through the process of buying, are there certain types of people that are only going to pay attention to image and some that only pay attention to the words and that's just is a personality or a person? Or is it everybody's taking all that information in together?
Jon:
I think that as humans we're visual, but there are some people who will, if you have a video, they're just going to watch the video and they're going to skim. This is really huge on B2B websites where you want to bake in video because what's going to happen, meaningful video, Telling you about the product and walking you through it, et cetera, because consumers are going to just scroll until they find video and then watch that video while they're doing something else like on a bus or in traffic or eating lunch. I just did that. I was evaluating some software for our business, for The Good, over lunch and I was eating lunch, watching product videos. I didn't want to read about it. I just wanted to sit there and watch the video. I just put it on one and a half speed and then go.
And I think that's a lot of people will do that. And I think in terms of images, it's similar. A lot of people will get that content from the images, but they're not going to get all the features and benefits that way. They're really not. People still need the bullet point list to see all of the features. People who are going to be watching the video, looking at the images, that's where they're going to start and if you don't get it right there, they're not even going to go on to read the bullet list. It is important for a segment of the audience for sure.
Ryan:
I think of product descriptions kind of like I think of one on my website and I think of the one on the Amazon and I probably put more time into the Amazon one, but I have more volume on Amazon right now. And so, but Amazon has multiple areas for information. You get the top there's image and then a short description and then you go down and you have A plus content and the expanded descriptions. And now that I think about it, a lot of websites have that same type of feel built out around them. Are you seeing a lot of focus needing to be on the short snippet, kind of at the top, more than at the bottom? Because sometimes the descriptions I see, especially on B2B, all the spec tab that is really long and drawn out, you can tell people are just dumping information from an SEO perspective sometimes in there. Is there one area that's more important in all of that?
Jon:
Yes. I think in the concept of the description, this is what those towards the top of the page. Often you'll have images on the left and then all the product description content on the right. As you scroll down, you can take those bullet points we talked about earlier with the benefits and the specific features and that bullet list and break that down throughout the page. That's typically what I would recommend. Have the bullet point and if people want to dive into each one of those, so say you're talking about the deodorant as we talked about earlier and you want to look at the ingredients list. Well, you can say all natural ingredients as a bullet point. And then at the bottom you could start saying all natural ingredients and then you break out what those ingredients are and talk about the benefits of each and how it's truly all natural and it doesn't include, what is the big one? Aluminum or something that people don't like? I don't know.
But I think, it's something like that where you would use the rest of the page to truly break it down. And that's where you can also inject some brand. And it's also where you should be injecting supporting content like blog articles. To me, too many brands put the blog on the homepage, so they have like this lineup of blog posts that nobody cares about on their homepage. The blog post is top of the funnel. It's great for getting people to your site. It's great for SEO for instance. But then if they're on product detail page and you send them back up the funnel, you need to make sure that it's done in a supporting fashion so that you're not just sending them right back to the top of the funnel for no good reason.
What I mean by that is maybe you have a blog article all about those ingredients or a specific ingredient that you're using and you want to talk about why it's more superior and you need a 1,000 or 1,500 words. Well, that's not good for your product detail page, but it would be good to link to that and say, "Hey, want to learn more about this? Read this blog post about it." That's also going to help your SEO and Google find all of that content together.
Ryan:
Yeah, I think exactly zero times have I ever gone from a homepage trying to research a brand for a product and gone to the blog and be like, hmm, let me read some blogs.
Jon:
No, not going to happen.
Ryan:
Never happen. And I'm like, no, I'm here to buy a product or research the product, not read about how the product worked on X, Y, Z in these conditions.
Jon:
Yeah, but when you're on a product detail page and doing your research and you're far enough down that step, it might be relevant to some degree to know that it's there.
Ryan:
Awesome. No, obviously Jon you've broken down and torn apart a lot of product pages over your life. What are some of the questions that you've had clients ask you as they've gone through the process and tried to implement a lot of what you've talked about, even with your template? And are there any funny ones or when it makes sense that other people are probably going to be asking after they start doing this?
Jon:
Yeah. Yeah, you're right, I've probably broken down hundreds of thousands of these at this point. I don't know that might be exaggerating, but it is kind of like what's that movie with the kid where he's like, "I see dead people." That's me. I can't go down the internet and shop without seeing messed up product detail pages everywhere. It's just unfortunate side effect of my job. But I will say, I do love when we have a positive effect on those. And so I'm always happy to answer questions, but yeah, I do get some off the wall ones.
I think the biggest one I get all the time is, can't I just copy my description from a competitor? It's working for them so why not? I hear that all the time. But I'm shocked I even have to answer this. But yeah, the short answer is no, you can't lift product descriptions from your competitors. Look, beyond the SEO challenges of that, meaning that it's going to be a challenge where Google sees the same as that content across two sites and then you're playing a really hard to win game because Google is going to pick one of them or when they do that, it's likely not going to be you because it knows that content has been on the other site longer and so that's what it considers the original source.
Ryan:
Now what about product descriptions from the supplier or the manufacturer? Especially if you've got a site with a 100,000 products on it.
Jon:
Well, you might want to evaluate why you have a site with a 100,000 products.
Ryan:
True. There's a lot of them out there.
Jon:
Yeah. I wonder how many of those are just dropped shipping, not doing that great. And that's why they're not doing that great. If you really want to be successful at something like that, you need to customize the heck out of it. And so you really do need to sit down and do this for all the products so it's not just the manufacturer description. Now you can base it on that manufacturer description, but don't copy and paste that because everyone else who's drop shipping that product is doing the same thing. Or on top of that, you're not really adding any additional value and I can promise you, most of those subscriptions are D level work. They're not even a passing grade in most cases. I think copying is a moral issue for me in addition to the SEO issue so it's two strikes you're out rule, really. Using the manufacturer, I think is the SEO role and ineffective. It's just a non-starter.
Ryan:
And I think that if you are in the eCommerce world and you are assuming something, you're going to lose. You never assume that this is working for a competitor because they're doing it and you think they're bigger than you. And you assume that somebody knows what they're doing. Obviously I have a wine and beer read business and you drink wine, if you read wine descriptions, those are generally written by somebody sitting at a desk at a winery that's coming up with weird terms. One of my friends owns a winery and I'm like, "Well, how'd you come up with your descriptions?" "Oh my wife and I started drinking wine and decided, let's start putting these things in there." You can't assume that, if it works it's on accident many times.
Jon:
I have a good friend who runs an agency that does nothing but branding and labels for wine and spirits brands and that is the number one challenge that they get from brands, their customers that they work with, is that those vineyards will send over the descriptions and they're like, this isn't going to fly, we got to help you optimize this. It's a challenge. It's not unique. They're like, you might as well just label it alcohol, alcohol from grapes. And that's always the joke. My friend is always just like, "You sent me this description. I'm just going to change it and say alcohol from grapes."
Ryan:
We're planting wine grapes right now. And I told my wife, it's like, "We're going to make some wine with it." She's like, "You think it's going to be good?" I'm like, "Probably not, but we're just going to call it Ryan's Yeast Juice. It's going to be great. It's going to sound like crap."
Jon:
When you gift me a bottle, I'll know.
Ryan:
Yeah, Ryan's Yeast Juice. That's actually why, I add grape juice with some yeast in it that sat in the bottle for too long, became alcoholic.
Jon:
Can't wait, can't wait.
Ryan:
I can't wait for my marketing to go, all the marketing energy I have, Ryan's Yeast Juice. I should probably trademark before it gets out.
Jon:
Yeah. Made with Ryan's fertilizer. How's that?
Ryan:
Yeah.
Jon:
Joyful Dirt line. Well yeah, I think the other question that I get a lot here is how long product descriptions should be. And I think it's not a one size fits all. It's long enough to be helpful, short enough to be digestible and depends on the product. A few quick sentences could work for your products or you may need to write 1,500 words, but I think it's something where you really need to understand your audience. Are they here quick? Are they deciding between a couple of things and want a feature list? Or should you put more effort into the story? Also, there's the brand aspect. There's a lot of brands who have a lot of fun with their product descriptions. And then there's a lot of brands who are just dry. That's just kind of their brand and you go from there.
Ryan:
Okay. Over the past, let's just keep it recent, three years, who would you say of companies you've at least seen their site, you don't have to work with them, probably did the best with their product descriptions?
Jon:
Yeah. Are you familiar with Chubbies?
Ryan:
I'm not.
Jon:
Ooh, okay. Chubbies is a men's, mostly men's clothing brand and they do some hilarious descriptions. They started out, I believe selling swim trunks.
Ryan:
Oh yeah. Yeah, now I remember.
Jon:
And it's now a bunch of other stuff, but they've always done some good work. I haven't looked at the site in a while, but they were pretty good one from back in the day. And I think, generally there's brands like OLIPOP and a few others like that who are new and are doing a really, really good job with it. I don't know if you've heard of OLIPOP. It's kind of like a new flavored seltzer brand. They do a really, really good job with it. I also think that there's a couple out there around more around eyeglasses, Felix Gray, things of that sort, that do a really, really good job. And I think that their biggest competitor is Warby Parker. And I think Warby Parker does a good job, but Felix Gray has really made their calling card being better content on the page.
Ryan:
Got it.
Jon:
The other one that I really like is Cards Against Humanity. I don't know if you've ever been to their site.
Ryan:
I love that game. It's the most inappropriate fairly game we've played with my in-laws.
Jon:
Okay, I was going to say, yeah, that could be awkward at best.
Ryan:
Oh it for sure is.
Jon:
They have a teenager version I've played with my cousins and I will tell you, that got awkward real quick too. But they have add on packs and all this other stuff and they do a great job with branding. And they have a couple of sentences, they'll say, "Hey, this is just," they'll be very quick. This is all about these topics. It's 300, but they'll inject some brand. They'll say, "All new absurd box contains 300 mind bending cards that came to us after taking peyote and wandering in the desert." And it's kind of like, that's funny and I know what I'm going to get is just weird random stuff. And then it's, they did in the bullet points. 300 brand new cards to mix into your game. This one's pretty weird. They're going to be weird, I get it. It's an expansion. It requires the main game. Now I'm like, okay, I get it. It's expansion pack. And you have nothing to lose, but your chains, I don't know what that even means, but that's what they're telling you.
I think, it's on brand because it's super random. And I think that last bullet point is all meant to just demonstrate the randomness that you're going to get out of this pack. And then if you go down the page, they have a lot more info about and some samples and stuff, but that kind of gives you a good example there.
Ryan:
Thank you. That's awesome. Any parting words or places people need to be focusing and getting started on?
Jon:
Yeah, I think look, it's there's a simple formula that you can follow and too many brands don't even try to follow the formula. And if you go to The Good's website and on our insights or articles page, or just go to thegood.com/insights/product-descriptions, we have a really great article that breaks all of this down and more. Gives you ton of examples and it's a great way for you to just take the template we've got on there and start using that and applying it to your product descriptions and Ryan, it sounds like you may have some work to do, but it will get you a higher conversion.
Ryan:
I think I might. But thanks for the time, Jon. I appreciate it and educating me as always on how to make my site work better.
Jon:
All right. Well, I'm looking forward to seeing the results on that. Thanks for chatting today.
Announcer:
Thanks for listening to Drive and Convert, with Jon MacDonald and Ryan Garrow. To keep up to date with new episodes, you can subscribe at driveandconvert.com
Traffic sources can come from a number of places, but for most companies the largest source is Google. And things can get confusing when it comes to organic traffic versus paid ads.There are a number of things that can affect organic traffic and paid traffic in Google, and it can get confusing quickly. Today Ryan clears things up and tells you what does and doesn't work in Google, and focuses on what you can do with on-site SEO to improve your organic rankings.
The site mentioned for checking your organic rankings:
www.semrush.com
TRANSCRIPT:
Announcer:
You're listening to Drive and Convert, a podcast about helping online brands to build a better e-commerce growth engine with Jon McDonald and Ryan Garrow.
Jon:
Hey Ryan. So traffic to a website comes from many different channels and avenues, as we all know. And for most companies though, that largest source is always Google, the infamous Google traffic source. Now, from previous conversations with you, I know that Google shopping, spend and traffic can have a really positive impact on organic traffic in Google. Which always has blown my mind when I've heard that, because I heard from you recently too, that there are several types of search engine optimization that can have an impact on paid search. Not just on on-page. So this really confused me, because I thought Google kept everything separate. You can't spend money to grow rankings within Google. You can buy your spot with an ad, maybe do some stuff around shopping to get surface there. But I wasn't aware that those two really correlated with organic. So I'm looking forward to hearing about how search engine optimization can help your paid search. And I guess more simply, what are you talking about? Can you fill me in on this?
Ryan:
Yeah. So I don't want to confuse people kind of with the title or how we're putting this out there, but you can't spend money on paid search to have Google increase your rankings. That's been a myth disproved multiple times over, and Google has been very, I think, above board in how that works. But we do know that spending more on shopping, where people discover your product more, they will come back and buy through organic and direct, and those channels will start producing more revenue. But what people I think overlook are the fact that there are two types of SEO that people need to be aware of. And you should always as a business owner be investing or planning to invest in both SEO and paid search. I don't think one is greater than the other necessarily long-term, but you need to have both.
And the type of SEO that people talk about or think about when they say SEO is what we've been doing generally for 20 years, building our rankings in authority with back links that are of high quality, putting content out on the internet that Google recognizes as valuable and they will give you more authority. You spend now on SEO with that's either your time or money, hiring people to do that. And then four to six months you see the results in increased traffic. That's generally what people think about with SEO. What they tend to overlook is the SEO that gets results actually within two weeks of you doing it. And that's the on-site SEO work.
And so there's things you can do on your site to improve it that when Google re-indexes that you will move up in rankings. And this type of SEO will help organic traffic, but also have an oversized impact on paid search. And so because it dabbles both of those buckets I like to focus on that SEO before I even go to the SEO that people normally think about. And so on-site SEO at its simplest form is improving your category pages for Google.
Jon:
Okay. So you're talking content, better imagery, things of that sort?
Ryan:
Yeah. The content, the tags, the titles, things on that site that Google indexes and sees have a lot of benefits around your website and traffic generally. And so, if you do a search for your product, and so if you sell Nike shoes and that's the broad search that has lots of traffic, you will notice on Google most of the organic results are for categories of Nike shoes. It's not one specific Nike shoe like a shopping ad would be. Because Google, based on that search, knows that you don't know which specific model you're looking for or if you're looking for men's or women's. You're looking for Nike shoes. And so often the high volume terms are going to be category pages that Google is going to be indexing and sending traffic to until people get more and more specific with their searches.
And that's how people generally move down a funnel, is I gradually do my research... Forgot, okay. Now I know I need to be searching for men's Nike shoes. Then I see that page. I'm like, "Oh, I need to be searching for men's Jordan Nike shoes." And then I'm like, "I really want to search for Jordan 4 men's shoes." And then that's when I'm getting to more and more specific and even adding color onto that, and people will do that through a search funnel. But the biggest advantage is saying, "All right, I have this category page and I need to have a description on that page about what's on that page that Google can see." And it doesn't necessarily matter for searchers because if I'm searching for Nike shoes and I'm on a page of Nike shoes, I can see they're Nike, I can see they're shoes. I don't need to read that text to see it. And so putting that on there though will have an outsized impact on quick increase in rankings.
And so I like to start this by telling people to go to SEMrush, or some site like that to be able to see what is Google doing with your organic site, how are you average ranking on there? There's some wonderful reports on SEMrush. It's the one I use because it's probably simple enough that we to dive into very, very quick. I don't get super deep on a lot of my analysis. I get high-level and figure out some strategy and then move off of that. But SEMrush has some great things they've done from an organic perspective. They scraped these results pages, and they know generally where you're ranking. Obviously you rank in different parts of the country differently, and search intent and my previous search history is going to impact my organic results. But generally we know that hey, you're ranking here on this keyword. And SEMrush also brings in the average volume of searches a month.
And so to start to see where your site could have a quick impact on this, you go to SEMrush, click on your organic rankings, sort it by volume. And you'll start seeing where your site is ranking. So if you're ranking on number 70 for a term with 10,000 searches, you're still getting zero traffic because you're stuck somewhere on page seven. But it'll also show you which page is ranking there. And when you see that you're like, "Oh, this page is ranking for that. And I'm seeing the term 'Nike shoes' goes to my Nike shoe page. That's great." You can click it actually in SEMrush and pull it up. Very simple. And you can see there's nothing on that page other than my title that says, "Nike shoes," in text that the search engine can scrape and understand.
And so you take those category pages and you write that paragraph of text. You maybe make sure that your title is short and appropriate for that search. You make sure the H tags on the site are appropriate for that, and it's not including random other characters or doesn't have your brand first. It doesn't have sizes first maybe, if you're looking at shoes. That information on your site will raise the ranking within two weeks. And it really depends on your competitors on what they've done or what they're doing. But within two weeks, you can assume that you're going to have more value to Google. They're going to raise you up there. And that's by no means a bad thing when you're getting quick results on SEO.
Jon:
Yeah. So if you're looking at all of this and I'm hearing from you that okay, do onsite for sure. But how does this affect paid search? I understand that you can't buy your listings. You can buy optimization of these pages, which is search engine optimization, and that could help you. But how is this going to affect your paid search? To me, it doesn't feel like it would. So that's what was kind of shocking. So yeah. Tell me more about that.
Ryan:
For Google ads, if you're running text ads there's something that Google has called the Google quality score. That basically gives you three components. It says if you do well here, we're going to let you pay less than your competitors for the same search. So there's always a value having a higher quality score. It's one to 10 and there's three components. There's the expected click through rate. That's always relative to your competitors. And so somebody may come to me and think, "Well, I have a 7% click through rate. That's great. Right?" And I'm like, "No. There's no way of knowing that." It's based on your competitors and what are they getting. If Google knows that compared to your competitors you're getting a 7% click through rate on the same search term and they're getting a 10% click through rate, guess who Google wants coming up higher?
Jon:
Right. Just because it's more relevant to the searcher, and that's what they're understanding. And that's going to drive more money for Google in the end because more people will click on it.
Ryan:
Exactly.
Jon:
Okay. Yep.
Ryan:
Google makes decisions for themselves. They have shareholders, they need to make money, and that's fine. It's their platform. So the higher click-through rate is good. And then the ad relevance, so they're saying, "All right, does your ad have instances of the keyword that was searched in it?" We generally, horrible broad stroke, shoot for about three times in the ad, and the rest of the text in the ad doesn't have an oversized impact on the actual click rate. It's just you have it for Google, you're playing the game to get ranked higher. And then the other piece is the landing page and the quality of that landing page based on the search query. So Google can't see the actual image itself and decide is this image what they searched for. They can see the tags you put on the image, but the actual physical image AI is not actually determining is that actually what they searched for.
And so that piece of content you're putting on your category or in Shopify, the collection page is telling Google what's on that page. And if you have that keyword in that content, Google is going to think this is a more relevant page to what they're searching and give you a benefit by lowering your cost per click through the increase of quality score. And it's a very easy thing to tie together and see the changes because quality score is reset every time somebody searches and every time your ad shows. And so if you make a change on the site to that description, today, and you see that I have a quality score of seven and you can break down the quality score components using columns in Google ads. And if you haven't done that before, you can get to all your keywords in the list in Google ads, that you're showing a text ad for, go to columns and ad quality score, and you can see, "All right, what's my click expect to click through rate, what's my ad relevance. And what's my landing page quality?"
Jon:
Okay.
Ryan:
And it'll tell you. You can either get below average, average above average. There's only three pieces to it. If you've got a lot of keywords, I like to push it down into an Excel pivot table. So I download it, put pivots on it-
Jon:
You love your pivot tables.
Ryan:
I love pivot tables. If you're running Google ads and you don't use pivot tables, you're wasting a lot of time. We still use Excel a lot in Google ads, but that can find really quick your below average landing page quality scores. And you can focus on those first, saying, "Okay, for whatever reason, this landing page, I'm getting dinged." And it's the largest component. It has about six of your 10 points associated with it. So moving from below average to above average can give you a significant boost and you're probably getting zero or very little traffic if you have a below average landing page score,
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You're listening to Drive and Convert, the podcast focused on e-commerce growth. Your hosts are Jon MacDonald, founder of The Good, a conversion rate optimization agency that works with e-commerce brands to help convert more of their visitors into buyers, and Ryan Garrow of Logical Position, a digital marketing agency offering pay-per-click management, search engine optimization and website design services to brands of all sizes. If you find this podcast helpful, please help us out by leaving a review on Apple podcasts and sharing it with a friend or colleague. Thank you.
Jon:
Optimizing your site increases your quality score, which then helps you get more visitors and makes your ads more effective because it's going to be ranked higher in that list. So if you're on the search results page and there's three items, the one that comes first has the higher quality score. It's not just how much you bid, or is it how much you bid and the quality score? What other factors might come in there?
Ryan:
It's both.
Jon:
Okay.
Ryan:
Yeah. Google keeps a little bit of a black box in play. But they say it's the ad rank, which generally we know is the bid and the quality score going into play. And so the highest on the list is not always bidding the most. You could actually pay less per click and being ranked higher, generally. I guess it's not always the case, but generally the higher up you are in rank on that first page of Google, the more you're the more clicks you're going to get. The higher your click-through rate. And you obviously want more of the traffic if you're bidding on the keyword. And so improving the site experience for a Google perspective, and we're not talking about... Unfortunately sometimes for Google is not always best for the user. But you got to get the traffic to be able to determine if it's good for the user.
So get the traffic from Google by increasing what Google thinks of the site. And often it's a pretty simple implementation to get this text on there. It's not tremendously complicated. I don't think you need to have a master's degree in onsite SEO to be able to do this. I've done it on a lot of my own sites and it's just having something there is better than nothing. And using general logic is saying, "Okay, I'm writing this for the search engines, not necessarily the user. So I want to make sure I have the right density." It's got to read in normal English because people are still going to see it, even if they're not reading it. But just get it on the site. And most small sites that don't have this are going to be on Shopify, just from a numbers perspective. We know they have over a million people using it.
And so on Shopify this is the Collections page. And when you're putting that description in on your collections, in fact, I was just talking to a company that I'm helping advise in this area, and the business owner had all the descriptions already put on there, but they weren't showing on their Shopify site. Well that's interesting. And so we've dug into it and it's the theme. The Shopify theme she's using doesn't pull those descriptions in by default. And so some themes do it and some don't. So if you put it in there and your theme doesn't have that when you go to the collection page, you need to get a developer to force that theme to show it. And if you have a choice, put it below the product results on that category or collection page. If you don't have a choice, just get it on there. It's going to be fine. I haven't seen a meaningful increase or decrease yet on putting that continent in there on conversion rate.
Jon:
I was going to say, is there a... Thinking about my conversion rate hat, of course, as always, is there a better consumer experience when you think about that? Is having that content higher on the page, lower on the page near the products, things of that sort. Does that seem to matter?
Ryan:
I haven't seen it, but obviously I haven't done as much broad research on that. That's probably something in your bucket of skillset to look at that. And all right, on these Shopify sites where it defaults to above the fold or above the product results, do we see a change one way or the other when we move it below? My gut tells me I want to see the products first and most of the time when I go to a site, I'm not reading a bunch of texts when I'm searching for a product. I want to go right to the products and see which product makes sense based on the images I'm seeing and the titles of those products.
But there probably needs to be some testing for most sites around that. But I would say if you don't have it there above or below, you're probably not getting very much traffic on it from a paid perspective. So you just need to get it, even if it's above the products, because now you don't even have-
Jon:
Done is better than perfect.
Ryan:
Yes. That's most of my method of business based on my business partners. We're just going to do it and we're going to make choices as we go, because if we're not moving forward, we're not going to make any decisions at all.
Jon:
And this is slightly unrelated, but I would say that a lot of our success at The Good has been purely because we just keep making decisions. And we know we're going to make bad ones along the way, but we're doing the best we can. You just keep moving forward, just keep taking those steps. And that, really, I think has been a competitive advantage. Or at least over just business in general, it's really helped us. And I think that's, that's a challenge I see. We talk a lot about all of these different optimizations you can do, and just getting it done, taking that step is 99% better than a lot of your competition.
Ryan:
For sure.
Jon:
A lot of them just aren't even taking the steps that we're talking about. So even if you don't take all of them, just take one. Like go to SEMrush today and look at these organic results and have a list of these opportunities and then fix them. And you're going to be 99% ahead, being armed with that data and having a good understanding of what to do next. And even if you're not running ads, because then when do run ads, you'll be well ahead of the game.
Ryan:
Yeah, exactly. I think it's always better to take two steps forward and one step back than it is to try to plan the best step perfectly the first time out. I know I'm going to make mistakes in business. That's fine. I don't care. As long as it's not a crippling business killing decision, I'm willing to make all of those.
Jon:
Which 99 out of a hundred couldn't be. They're small enough decisions that you just got to do it. And if you go to SEMrush and you follow their instructions or the recommendations, is there a chance that that kills your business? Unlikely. It's very unlikely. So what do you have to lose? You just got to put the time in and do it.
Ryan:
Exactly. And that's for most business owners, it's going to come down to a time-money thing. If you've got more time than money, which smaller businesses generally do, you're going to do some of this work yourself and figured out the hard way. If you've got a little more money than that, you're going to hire an agency to go do some of that work for you. And that's what I advise a lot of businesses to start. I was like, "Look, if you've not done this before, and you're really worried about making a bad mistake, hire an agency to do very small amounts." So you can see the model that they're using.
And I even tell them, Logical Position for a thousand bucks, we will put six category pages together for you and do the work from the titles, descriptions, all that stuff. And you can then see, "Oh, that's actually not that complicated I see it where you put it in there, I see how it got on there. I see the keywords you used. Great. I can go build out the next 15 of these to help those all increase and then by that time, I might have enough money to pay for more paid search because I'm seeing organic traffic increase."
Jon:
This is why I tell people all the time when I send them to Logical Position, it pays to work with a partner that is large enough that they have an SEO focused team and a paid team because these things work together so well. And they need to be talking to each other. You can't just go off and do these SEO things and then not have your paid team aware of it. Because as we found out today, that's going to affect your quality score. And so not only could you get some increase in organic rankings pretty quickly by doing some basic SEO stuff, if you're not doing that, but then you can also do some off-site stuff that builds for a longer term. You were saying about four to six months, roughly. And then on top of that, you can be affecting your quality score.
So what I've learned today is, okay, you still can't pay Google to list higher organically. Okay, that's a bummer, but I get it. I assumed that was the case. And so second, what I've learned is I need to get a better quality score if I'm ever going to run ads, because you need to make sure that quality score is high because I'm not going to pay a thousand bucks a click. But if I have a better quality score, I might pay a little less than that.
Ryan:
Some of your settings, you may get close.
Jon:
Let's just bury that one and keep it buried. Jon likes to waste money with his spend. But that's what I get for not talking to my friends before doing that. So look, I think there's a lot of great things here around things that every business of any size could be doing to really get more out of their paid media spend.
Ryan:
And just business in general, best practices, laying a solid foundation to build on for a brand. I think it's an easily overlooked one for a lot of brands that can have house sized impact for that time. I mean, writing a description might take you five minutes if you're the business owner and that five minutes could produce massive dividends on both SEO and paid search.
Jon:
On that, we'll leave it. It sounds like folks have some tasks to do that are pretty simple. Just need to put the time in to make it happen. Or if they don't have the time to give you a call and have your team at Logical Position make it happen for them.
Ryan:
Yeah. I'm looking forward to it. Let me know how I can help.
Jon:
All right, thank you there, Ryan. Appreciate it.
Ryan:
Thanks John.
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Thanks for listening to Drive and Convert with Jon MacDonald and Ryan Garrow. To keep up to date with new episodes, you can subscribe at driveandconvert.com.
In the Ecommerce world, it's almost always about the data. But what works well for large organizations may not work well for small ones and vice versa. A lot of that has to do with how much data you have, and large organizations tend to have more. So where should different size organizations starts as far as collecting data and making use of it? And why do we even need data in the Ecommerce world?
Larger companies get most of the press and excitement with their 6 and 7 figure marketing budgets, but the majority of clients we work with are smaller. And smaller companies have to do things a little differently than the big guys. What impact does a small budget have on driving traffic? How should small budget brands compete online?
https://www.logicalposition.com/
TRANSCRIPT:
Jon:
Hey Ryan. So we get companies contacting us all the time, that don't have large, six or seven figure marketing budgets, and many times, those large clients get most of the press and excitement, but the majority of companies that end up investing in marketing are going to be smaller, and smaller companies have to do things a little bit differently. I want to ask you today, what impact does a small budget have on driving traffic and how do those small budget brands compete online? They obviously want to compete, they have to compete in order to grow, and I want to know what's the magic, how do they make that happen? I'm excited to talk to you about this today, and I guess I'll start pretty broad, in e-commerce, is there such a thing as too small of a budget?
Ryan:
Across the board as a broad general rule, no, but if you're really going to do something with your budget, then yes. I mean, you have to have enough budget to start moving things around and collecting data. And I think that initial starting budget, if you're a smaller business, is going to be important to determine how quick you can grow, how aggressive you can be, where are you going to find that opportunity to take the next step in the digital marketing evolution of your business? And I challenged a lot of business owners in this space, as I'm talking to smaller ones all the time. Like for example, yes, you can start with $100 a month budget, it's your money, and you can market it however you want, invest it however you want.
But if you're e-commerce, you're e-commerce so that you can sell everywhere and have your online store open all the time, even when you're sleeping. And so if that's the case, $100 is not going to get you very far in marketing across the internet. And so if you're going to do something that small, you really need to be hyper, hyper, hyper-focused, which does limit your potential and opportunities to find little pockets where you can really dominate or win. And so I would generally say less than $1,000, there may be better places for your money than trying to drive traffic with it online.
Jon:
Interesting. I was going to ask, and maybe you've just answered, but I'd love your take on this too, if I only have $1,000 a month to spend, is it worth doing it or am I just throwing my money away, when we're talking about driving traffic through traditional paid media sense?
Ryan:
That's a difficult one because most business owners that are coming up with this $1,000 and you're smaller, that's a meaningful number to them probably, but they probably don't have the expertise to really make that $1,000 do as much as it can. And so you probably have to bring an expert in, and that costs money as well, because most people in the digital marketing world are not working for free. And so you have to figure in an expert generally, and I'll probably come back to that point, but for most businesses, I would say that you have to look at it through a lens of time and money.
Jon:
Okay.
Ryan:
Anybody can learn how to do digital marketing. You have to be able to study, you have to be able to go in and make some mistakes and learn it, but anybody can figure it out. It's definitely not the most complex thing you could be learning. But if you have more time, then you should be doing some of that work yourself and learning it and getting it to it like, "Can I get some basic things done?" If you have more money, than you need to hire people and your budget should probably be a little bit higher to be able to invest and push traffic.
Jon:
So we should be saying, when we say budget for today's conversation, should I be thinking about it as budget including the expert or budget just in what you would spend to drive traffic in these channels?
Ryan:
I think businesses should be looking at it together, but I think most business owners are thinking about, "Okay, I can spend $1,000 to drive traffic. Let's go put that on Google and make it work." I do believe though, the Googles in particular and I'll focus on Google for right now, but Google in particular has done some pretty cool things helping small e-commerce businesses get going. If you've got a feed and you're on a smaller platform, like if you're on Shopify, it's very, very simple to get up and running on Shopify and get your products going to Google. And then there's what Google is calling smart shopping campaigns that allow a business really to say, "Google, here's how much I'm willing to spend per day, and here's the goal I need to get out of it." It does not take an expert to get that up and running.
And in fact, I tell companies, do not pay an agency to manage smart shopping campaigns because there's nothing to do. It can be a small piece of an overall structure, in fact, we at Logical Position do use smart campaigns in a small piece of a campaign occasionally, but we have to do a lot more work in the reporting and strategy on that type of client, to be able to justify charging management fees on smart campaigns.
Jon:
Okay. That makes sense.
Ryan:
Small budgets use more automation, I think, is the name of the game. Use things that are set up to make sure you don't just waste a bunch of money, and I think that's where a lot of small businesses, what keeps them from starting often is that fear of, "Oh my gosh, I'm going to go waste money trying to drive traffic because I don't know how to do it right." Doing some research, I think, can help keep that option to a minimum, that is just going to go out there and be a big waste.
Jon:
Let's say a company hasn't driven traffic on Google. How do they decide what that starting budget should be?
Ryan:
This generally comes down to, what's the business doing as a whole? If you're doing $100,000 a month on your website and you haven't been spending money, you probably have a larger amount you could start with then if I'm only doing $1,000 a month in sales. It's a threshold there of starting to look at it, but I generally say, in e-commerce, at least $1,000 to start with on Google. And then start thinking about it through a lens of, "I know I'm not going to be starting out at the gate if I'm doing it myself in a perfect world scenario." So there's going to be some learnings. I look at it through the lens of what's my light money on fire threshold, to let me get things going, and I've done this with new platforms on some of my brands.
Nobody knew what they were doing yet, across the entire platform. Pinterest is being one of them. A couple years ago, it was just wide open. Nobody knew what it was going to do. I think they're getting some more structure in place and it's driving better traffic, but I went onto it saying, "Look, I don't know what it's going to do." My light money threshold at that point was, I think about 2,500 bucks, so I talked to Pinterest like, "Look, we can go a thousand a day for two and a half days if you want, or we can go $100 a day for about a month. I'm okay with either, whichever one you think is going to work better for me." And that was my light money on fire threshold, that I wasn't going to be mad, I was just like, "Yeah, that did suck, but I got some learnings." Pinterest didn't work for us at that point in time on that business, we'll continue to be revisiting it.
But all that to come back around to it can't be a budget that if it doesn't work, it's going to tank your business, because there's a lot of unknowns if you haven't been on Google before, to how is your website going to convert, what traffic is going to work best for you. Because you'll take the same product with the same price for the same search query, going to two different sites and it's going to convert and there's going to be a different return on ad spend. And so with all of that unknown, anybody that tells you they know exactly what you're going to get by putting $1,000 out there, they're lying to you because there's no data to tell you one way or another. There's no way to know.
Jon:
Okay. So don't bet the farm.
Ryan:
Don't bet the farm, but it should probably make you a little uncomfortable.
Jon:
Okay.
Ryan:
When I'm looking at business decisions and I want to grow, and you know me, I tend to be on the aggressive side of things, I want what I'm risking to make me a little uncomfortable. I don't want it to be an easy decision or an easy thing to be like, "Okay." Could I have wasted $100 to test Pinterest? Yeah, but that was not an uncomfortable thing. 2,500 from me was a little bit uncomfortable. Partners and I talked through it and we're like, "Okay, if it returns nothing, that's not going to be great. But again, we're not going to lose the business because of a mistake if it doesn't work." So a little bit of uncomfort, I think, is good.
Jon:
Okay. So then let's say I have a thousand bucks, where do I start, Facebook, Google, something else?
Ryan:
I think generally it's going to come down to those two for most businesses to start off with. I think other platforms generally are younger and they are less proven and therefore generally higher up in the funnel. Like if you're going to jump right on TikTok or Snapchat for marketing and you haven't done Google or Facebook, I think it's going to be difficult to know if that platform is actually working for you, if you haven't gone to more advanced ones yet. And so when I talk to a business owner or a marketing team that's looking at deciding between both of those two to start, the easy way of looking at it as if there is existing market for your product, I generally say go to Google because you're going to capture people towards the bottom of the funnel as they're looking for your product.
If you're creating a brand new category, there's not a lot of people searching for it on Google and so you're going to have to figure out how to create that and find the right audiences on Facebook and convince people to start trying you to build that search volume. So for example, last week I talked to a guy, his company makes edible bubbles and I'm like, "I have never heard of this before.'.
Jon:
Isn't that bubblegum?
Ryan:
Yeah. This is for kids going out and playing and blowing bubbles, he makes edible bubbles. And I had no idea my kids would want that until he sent me some samples and they're actually pretty cool.
Jon:
That's awesome.
Ryan:
But they actually make them for bars. Someday when we get to go back to a bar, they make these bubbles you can blow on top of a drink, and a lot of times they infuse them with smoke for presentations.
Jon:
That's cool. That's a great idea.
Ryan:
So really cool stuff, but there's not a target market yet that they know to search for that. So I, before last week, never would have even considered searching for the term edible bubble or edible bubble for a drink or bar drink presentation bubbles, that's just not even there. And so for that type of business, you've got to go on Facebook, you've got to target bartenders, you've got to target moms with kids, with the kid bubble one. And there's some really cool targeting on Facebook, and if you've got a good visual and some good offers, I think Facebook can work really well. For other businesses, Facebook generally will hit top of funnel like that, and so the return, again, generalizations, is going to be a little bit lower than if you had run some bottom funnel, Google stuff to figure out where people are searching for your product and what are your advantages and all of that.
Jon:
So we're talking the difference between perhaps intent versus awareness?
Ryan:
Yes. Like if there's already people searching with intent for your products or services, I would go capture them first. It's going to be a little more expensive per click, possibly, there's generally going to be more competition, but it's an existing demand that you're tapping into. You've just got to figure out how you're going to compete there. If you're creating a brand new product that nobody's ever searched before, you probably can't even spend your money on Google on search terms, you're going to be on broad match keywords on Google wasting money.
Jon:
Right. No, that definitely makes sense, then
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You're listening to Drive and Convert, the podcast focused on e-commerce growth. Your hosts are Jon MacDonald, founder of The Good, a conversion rate optimization agency that works with e-commerce brands to help convert more of their visitors into buyers. Ryan Garrow, of Logical Position, the digital marketing agency offering pay-per-click management, search engine optimization and website design services, to brands of all sizes. If you find this podcast helpful, please help us out by leaving a review on Apple podcasts and sharing it with a friend or colleague. Thank you.
Jon:
What other things tactics do the smaller budgets need to be aware of? What else would you consider?
Ryan:
Some of the tactics I talked about when looking at smaller budgets on advertising and driving traffic, don't even have to do with the tactics to drive the traffic. A lot of small businesses, even over the last year with COVID and a lot of brick and mortar moving into online, a lot of them haven't thought about what is my advantage online? If you are selling the exact same product at the exact same price, and you have no discernible advantage over a competitor, what are you doing? Try to figure out, before you go spend money, why somebody is going to buy from you. And you can't really tell me that your advantage online is going to be because you have really smart salespeople inside, or you have a lot of knowledge in your industry, because that's not going to come across in Google shopping. Nobody cares how much you know, they don't know how much people know when they're just going to a website and transacting.
And so you've got to figure out what that advantage looks like first. Why should somebody buy from you versus a competitor, if they've never met either one of you and all they're doing is seeing your website because the internet is the great equalizer and small companies can't compete with big companies, if they're better at certain things. Better at converting, if all of your competitors are stuck on really ancient Yahoo stores that are 20 years old, and you're going to come in there with a Shopify or a big commerce site, that's really easy to convert on. That can be a significant advantage, even if everything else is the same.
Jon:
It's funny, you say that, a friend and I were just talking about that and we were laughing, saying a great business model would be to just go to find a index of all the remaining Yahoo stores making over a million dollars a year and just replicate that on a better platform, with better usability and you would print money.
Ryan:
Why are we doing a podcast? Let's go get a list and start making business. But it's true. I think we still have 50 clients on Yahoo and some of them are, I think, are on the RTML, that really old coding platform, that if you're not 50, you've never even heard of that. And I only heard about it because we have clients on it.
Jon:
Yeah. Look, I mean, I think a lot of these stores take the approach of, if it's not broke, don't fix it. And they're still printing money, so why change it? I think they're going to ride that till the end. So somebody will come along and end them by doing something better, but you got to find it first. Talking about that is one of the things that the platform could be, one thing that these smaller companies are doing wrong. But thinking about smaller budgets, if they're sending traffic to their site, what do most of these smaller budgets do wrong? What mistakes are they making with their small budgets?
Ryan:
I think a lot of them, if they do have some advantages and they do have a reason to market, a lot of them make the mistake of not being aggressive enough. I think I've mentioned this probably multiple times, but a lot of small business owners really watch their P and L and all line items going in and out of the business, which is good. But when they come to Google ads, it can quickly become a very large line item and they want to focus on, hey, I need to increase profits, so we need to start cutting this budget and controlling Google, because if I control something in the middle of my P and L, the bottom gets bigger. And unfortunately, something like a Google ads or Facebook ad, is generally driving top line number that does translate into bottom line number, but if you eliminate what's driving that top line, it can really have an opposite effect of what you're intending.
And so it's really a paradigm shift. If you're looking at your budget like a line item, you start looking at it as you're investing in getting new customers and then what are you going to do with it? Don't see Google ads or Facebook ads as a cost necessarily, unless you're purposely losing money and you have to control that piece, but that's a whole different story and most small businesses are not doing that, so I won't dive into that necessarily now. But then trying to figure out, okay, once you've got a customer, what are you going to do with them? Because Google and Facebook, they're a marketing channel and you're going to have to give some or all of that initial order margin to the platform to get the customer. And that allows you to compete and capture more market share, but if that margin is going to the platform, it's not going to you, the business owner or marketing teams future budgets. So you've got to do lifetime value, figure out what you're going to be doing to bring them back.
So many times small businesses are thinking about, I've got to get customers, I've got to get customers, so I've got a market. Okay, good, you do have to do that, but you can't keep trying to do that without focusing on the customers you do have. What happened to the customers from last month, what are you doing with them? If you're not emailing them, if you don't have a loyalty program, you're essentially wasting all of this effort that you're doing to successfully bring new customers into the brand. And so that's where I see most struggles, because then they'll just be like, "Oh, Google was terrible. It took all my profit and then I had nothing."
Jon:
Well, we've talked about this several times on the show, of understanding that it's okay on that first sale to break even, and your customer acquisition costs might be high on that first sale, but you have to have a longer term game plan in place. Is it a subscription type product that you're going to use, if you have a consumable, is it something where you're able to continue to market to them afterwards, but you're doing it in a way that is going to continue to drive down the customer acquisition, but up the lifetime value over time? That definitely makes a lot of sense. So, okay, we've heard a lot of disadvantages to being small here today, but there's still a fact that most brands are going to be in that small budget. What are the advantages, what's the positive side, the glass half full here, what's the advantages to being smaller advertisers?
Ryan:
Yep. There's no secret that having more money can have more advantages in advertising, I mean, that's just basic marketing 101. But what I've seen through a lot of small businesses and having my own that compete against much larger brands, is you inherently have more flexibility. In fact, we were just laughing before we got on and started recording, about politics in larger companies, having all these things that you have to wade through to get things approved, or to do things, where you can't move quickly into new markets, because there's all these layers of approval. Small businesses, hopefully don't have that problem. And it's like, if you see an opportunity, you can just go do it and there's not a lot of people that have to sign off on. It's like, no, I'm going to go capitalize on that change in the market or that area that hasn't been attacked by larger brands.
And so that can be a huge advantage, but I still think a lot of small businesses don't think of it that way and look at it, hey, I can afford to make mistakes and learn from them very, very quickly and pivot and adjust. And I can test new products on my site, I can test things on my site as a small business that I don't have to go to a web dev team. I can make quick little changes on my Shopify site to say, "Hey, let's see if this works or not. Let's run it for a week and if it doesn't work, flip it back." So much opportunity to test and so few small businesses actually taking advantage of that. I mean, I can't say the number of times that we've tested small things, even on Joyful Dirt, as we're moving very quickly and say, "Hey, let's test this or test this." That many of them work. I mean, we've got a really smart team that can come up with really cool ideas to test.
For example, this month we did a black history month label, so we just, "Hey, let's just do a small run of a few hundred labels and see what happens." And larger brands can't in mid January, decide to do a label run for a specific event and try to get it to work. We're like, "Yeah, let's just see if it works. And so based on the success, we're going to do this multiple times throughout the year for different events and just have custom labels.
Jon:
That's a great idea.
Ryan:
Because we can.
Jon:
I believe this is called the innovator's dilemma. So when you're at a large corporation, you as an individual can come to the table and say, "I want to do custom labels for this month, starting in two weeks." But you have so much red tape to get through that you can actually affect the change that you want to affect. So that's a definite competitive advantage for a small brand, I can completely understand how that would work in their advantage. So that's great. Is there any other advantages that we should be thinking about?
Ryan:
I think being smaller also forces you to pay attention to details, that larger brands don't have to. We have a lot of large clients that focus on such macro level numbers, 35,000 foot layer of saying, "Hey, what's our data? How much should we spend? What is this?" And there's not the deep dive on, "Okay, how can I squeeze this little bit more out of this product?" It exists on a few large brands, but generally it doesn't matter to them on the small little minutia. And I think smaller brands, really have an opportunity because there is less data to sift through, they can quickly see where markets may be changing or evolving, that larger brands aren't going to catch till later.
So you have to be willing to be aggressive and move quick when you see them, but you might see, even on Amazon, this is a massive thing with one of our clients where there's a couple really big players in vital wheat gluten, for example, on Amazon and the volume of sales on baking products on Amazon, is astronomical, I had zero clue until we started working with this company.
Jon:
Yeah, would not have suggested or thought that.
Ryan:
No, I'm like, "Vital wheat gluten," that's a very specific product for a very specific niche of people.
Jon:
Baking in general on Amazon, you would think there's no way.
Ryan:
It blew me away. But because the volume is so high, everybody selling FBA can only send in, because vital wheat gluten comes in, it's heavy and it comes in five pound bags or two pound bags, so it takes up enough shelf volume that you can't get 50,000 units in there at a time. And because you're usually co-packing, you're getting pallets delivered, and once it's down, you can't all of a sudden like, I'm just going to send 10 units today to take care of the sales. It's massive in and out of stocks all over the place. And so smaller advertisers could leverage that by saying, "All right, if I have my own fulfillment house, I can always keep a seller central product in stock on Amazon. Even if my FBA stock goes out," and you can play a lot of games and figure out what part of the country is or is not working.
But that type of flexibility as a small brand, can pay huge dividends just by being aware of some of the struggles of your larger competitors. If your larger competitor has a disgusting amount of aging inventory, they've got problems probably floating the next purchase. Whereas you may not have that problem as a small advertiser, and you can even use drop shipping through one of the partners that could help you. So I think small companies have some significant advantages and I enjoy that part because it is more exciting to grow a smaller brand to take on a larger one. I do it myself, I add to this one.
Jon:
You'd love to take down the big guy.
Ryan:
IT do.
Jon:
Who doesn't? I mean, if you're in business, you're a competitor, just the way it is.
Ryan:
Oh yeah. And I love competing. And so it's fun as smaller business, but it does take a mentality that you are going to scrap and do everything you can to make it work. And when you come in with that mentality, I think it's very difficult to fail on Google ads or Facebook ads, because you're not accepting that it's not going to work. You see the data, you know people are spending money in your industry and they may not all be making money, but there's consistent effort there. And you just have to get to the point where you can wade through it and make it work because it will.
Jon:
Well on that note, any parting thoughts on this? I feel like I'm sufficiently equipped if I were a small brand advertising. You're giving me some renewed hope, that's for sure, that my $1,000 per day or per month, excuse me, would actually go someplace.
Ryan:
Yeah. The only thing I will say is that I do believe quality help will go a long way. You can be a small advertiser as a business owner and spend $1,000 if you learn and you're quick enough at adjusting and pivoting and looking at data, you're going to learn how to do it, but it might take you six, seven, eight months to get the point where you could have started at that point with an expert. And so it's at least worth interviewing a couple of agencies to see what it is they could do to help you if you bring experts on to manage that $1,000 spend. Yes, you're going to have to pay an agency extra cost, but can they get you moving towards your target at a quicker rate? I think often they can, but even if you're going to do it yourself, at least talk to somebody else that really knows what they're doing to see what the advantages could be.
Jon:
Well, and it could be huge too, if you get a higher return on that ad spend, that margin difference, they pay for themselves. It's like working with a great CPA, they're going to get you a bigger refund than if you did it yourself. So that covers their fees and hopefully more.
Ryan:
For sure.
Jon:
All right Ryan, well, thank you for your expertise on this. I know you guys work with thousands. Every time I talk to you, it's another thousand. So I'll just say thousands and thousands of clients at Logical Position, and a lot of those are smaller ones and you guys have learned a lot from that. So thank you for sharing all of the expertise you've learned.
Ryan:
Oh yeah. Thank you, Jon. I appreciate the time.
Announcer:
Thanks for listening to Drive and Convert, with Jon McDonald and Ryan Garrow. To keep up to date with new episodes, you can subscribe at driveandconvert.com.
Today, Jon & Ryan talk about how Digital Marketing and CRO work together to create a scenario where one plus one really equals three or four. When these combine it It becomes an explosion of revenue and profit. Today the guys why it is that these two things work so well together.
The official data from the Census Bureau has stated that through Q3, e-commerce was up 32% year-over-year in 2020. By no means should a company complain when they're up 32% during a pandemic, but there are times when a company should be concerned when they have 32% year-over-year growth. That sounds backwards, but business owners and marketing teams should have regular fear of missing out or FOMO, to help make sure that their brands aren't falling behind their competitors. Even when the numbers look good. That's the best time you can have all the cash in the world to reinvest. Today Ryan shows you how to push for more in 2021.
How does one break down optimization into some key principles? In episode #24, Jon started talking through his eight laws of conversion. The first four were:
- It's hard to read the label from inside the jar.
- People come to your website for only two reasons: to purchase, or to research.
- Your goals are aligned with customers, both of you want a conversion.
- Competitive research is not data.
Today, Jon and Ryan pick up where they left out and give you Jon's final four laws of conversions.
www.thegood.com
As business owners, we’re always worried about missing out. Many businesses owners we talk with seem to regularly have FOMO (fear of missing out) when it comes to marketing: Are my goals right? Was optimization right? Was there an area of the market I didn’t pay attention to? During holiday periods, which is when we are recording this, everything is intensified and I find most business owners are stressed about this more. Especially in a year like 2020. Today we dive deeper into the details of how a business owner can uncover where they are missing out on valuable traffic, and therefore revenue… and if their FOMO is valid.
Connect with Ryan:
https://www.linkedin.com/in/ryangarrow/
Today, is the first in a two part series about the first four principles of the world of Conversion Rate Optimization. What are these fundamental truths, and how can I break down optimization from a high level to not focus so much on the tactics? Everybody goes directly to the tactics, but what are the overarching things that a brand needs to know and be thinking about? Today, Jon breaks it all down.
It's hard to talk about E-commerce and driving traffic without thinking about Amazon. How do you find new customers there? Should you run on ads on Amazon? Ryan has the answers!
For help with your Amazon Advertising:
https://www.logicalposition.com/amazon-advertising-management
There are seven different types of people that you're going to find coming to your site. And if you can understand who these people are in each one of their buckets, you're going to be able to help each one of them convert because they're all going to look at your site a little bit differently. So how do we understand who they are? And what do we need want to know how do we convert these people? Jon's got the answers!
TRANSCRIPT:
Announcer: You're listening to Drive and Convert, a podcast about helping online brands to build a better e-commerce growth engine, with Jon MacDonald and Ryan Garrow.
Ryan: Well, Jon, welcome to the Drive and Convert podcast. You've done a lot of writing, to say the least. You've got some phenomenal content out there on the internet and as somebody that reads most of your content and speaks to you often, it's always good to read. So if you're listening to this, go find Jon and all of his content on his website. I highly recommend it. You will come away as a smarter human. But one of the fascinating concepts that at least for me seems fairly unique to your brain and at least the content you're putting out is the idea of there are seven different types of people that you're going to find coming to your site. And if you can understand who these people are in each one of their buckets, you're going to be able to help each one of them convert because they're all going to look at your site a little bit differently or want to do slightly different things.
But I guess step one is just, how do we understand who they are? And then we want to know how do we convert these people? We've got them to the site. We know who they are, now how do we convert them? So I'm excited to hear about this because I can never get enough insight into how to make my businesses and my clients' businesses work better. But can you kick us off just by telling us who are the seven personas that you're seeing on the internet coming to websites?
Jon: Well, thank you, first of all, for the kind of compliments on the content. I'm blushing over here if you can't see that. Yes, there are seven and a lot of people think, seven that's a lot. But the reality here is there might be some overlap in these as well, right? And these are all different types of people that you really need to address on your site. And so many people don't do that, that it really led me to write this content. So the first set of folks coming to your site are what I call lookers, right? These are people who are just looking. They're browsers, if you will, right? They're not after any one thing in particular, they're having fun just looking around. They want to see what you offer that maybe will catch your attention.
Honestly, they may even have been just searching around Google for different types of products and ended up at your site, not necessarily by mistake, but they ended up there and now they're just looking at what you have to offer. Really you just need to understand that not everybody who approaches your site's going to buy. Most e-comm sites know that, right? Because their conversion rate's not a hundred percent or else we wouldn't exist. But the reality here is that you still need to address this audience.
A second one to be thinking about is bargain hunters. These are people who are only at your site because you're having a sale or some type of offer.
Ryan: Hopefully, it's not a discount.
Jon: Exactly. That would be my point of view. But that's what they're looking for there. They're trained, as we have said, several times, they're trained to look for that sale. And so there are people, and there is a segment of folks who will only buy if something's at a perceived bargain, right? And they really want to see if they can find the bargain. Sometimes it's the thrill of finding the bargain that really gets to them.
The third you really want to think about it as the buyers. Now, it seems pretty obvious, but some people are really on a mission. They know exactly what they want and they're there to get it. So they searched for the model number, they found your site, and they are ready to buy. And so you really want to facilitate that. A fourth is researchers. Some folks are just researching. They have a general idea of what they're after, but they want to compare those options and the prices. So, a lot of people will go to Amazon for this, but now, a lot of people are doing that on brand sites as well. They go to Amazon and they find the product they want but then they end up on your brand site after they've done that research. They find the model number on Amazon, they Google it to find more details about the brand behind the product. Amazon isn't always the best at having product details, right? So a lot of times you'll end up on a brand site trying to do that and that's what these folks are.
Ryan: Now, what would be the big differentiator on the researchers and the lookers? Because a lot of similarities between the two, but what would be the key differentiators in your mind?
Jon: The key differentiator is the researcher knows what they want. They know what they're looking for. The lookers are ... It's kind of like wandering around a mall versus going right into the Apple store. You're at the mall but you beeline it for one shop because you know that you need something from that shop. Where you might just go to the mall to hang out, right? If that's even a thing, post-COVID one day, we'll see.
Ryan: Someday we'll get back to a mall, maybe.
Jon: New customers is another one. People don't really think about that often. And this is really where some visitors are just going to be new customers. They enjoyed their last visit. Maybe they were a looker on their last visit and now they're there to find out more and potentially become a new customer. Perhaps these are people who you should really be thinking about post-purchase, like they just purchased. What happens at that point, right? So these could be people who are buying from you the first time. And it's an audience you really need to be thinking about because you need to make them feel welcomed and appreciated.
One that a lot of people don't think about is dissatisfied customers. Everybody has them. I don't care if your net promoter scores is perfect or you don't hear about these complaints. Everybody has a dissatisfied customer or more. And that's okay. These people are there for a number of reasons and it might not always be that bad. Maybe they're just dissatisfied because it didn't fit the way they thought it would, but they still like the product, they're there to return or exchange. For some reason, a previous purchase didn't suit them and now they want customer service. And the goal here is to make it easy for them to get that and perhaps even do self-service where possible. And the last one, seven of seven, we blew right through these, but we'll dive into each in a second, but this is loyal customers. So some of these are your best customers. They come back, they love shopping with you. They love your product and then they're going to be repeat customers. So, that's the seven. To run them real quick, it's lookers, bargain hunters, buyers, researchers, new customers, dissatisfied customers, and loyal customers.
Ryan: Got it. So we know what personas people are in, generally. And then are there ways outside of the types of traffic that you help decide who this one is on the site to do that, or is it, I just want to make sure the site works for all of them?
Jon: You really want to make sure the site works for all of them. And I think that there's many ways to group people into these different types. As I said earlier, they could be multiple types. But I heard you say the word persona, and I think I really want to make clear that it's easy to get dragged into things like personas, or where people are in the sales funnel, or warm, hot, and cold leads and visitors, or any of those things that can really just take you down the rabbit hole if you will, right? And I see this all the time where we ask people, who's your ideal customer, and they give us an avatar of somebody that has flowcharts, and photos of Charlie, the avid runner, and his demographics, and preferences, and what soda he drinks, or what bottled water he prefers, and all of that stuff doesn't really matter. It's never really put to good use, especially when it comes to optimizing a website, because that guy, Charlie, the runner, he was generated in the mind of the brand. He's not an actual consumer, right?
So what you really want to do here is just keep it simple. Really you just want to focus on better serving each of these. And by doing that, you're likely to increase your conversions for each of these. Additionally, if you go any deeper than that, you're unlikely to get started because you'll end up in this, as I said earlier, rabbit hole of trying to figure out who Charlie is. Well, Charlie, isn't going to be all seven of these, right? So don't worry about Charlie and don't worry about going so deep.
Ryan: Because you might have your ... If you've done the persona thing as a brand, you could have your same persona being all of these types. And so at the same time, keep this very top level when you're looking at your site and trying to guide traffic and just do what Jon says at the end of the day.
Jon: If the world only worked that way. I'll have you call my wife after this and tell her that too.
Ryan: Yeah, you do the same for me when we're talking about driving traffic. Okay. But we've got to tell people how do we take these groups of traffic and these people and get them to take the action we want them to take on the site. Because I'm guessing to a degree, not all of them are the same conversion either.
Jon: Very accurate. That's true.
Ryan: So we've got to think about that as well. Like a disgruntled customer is probably different than a looker at the end of the day, as far as action. So guide our listeners and viewers around what that looks like and how you're seeing converting those people.
Jon: Well, let's break them down one by one, shall we? So start with lookers, really is what I would recommend here. And I think the thing to be thinking about here is with lookers is you're going to catch your attention and get them to stop that just shopping and not browsing long enough to consider some type of offer or something that gets their attention, right? So if you know your customers well enough, which most brands listening to this will, they'll know what will entice their customers.
And I'm not just talking about an offer or a special or deal or anything of that sense, I'm also saying what's that one feature that makes you unique and makes you stand out? What's the benefit of the product that's really going to hit home for these people? They're at your site because they had a pain or a problem they're trying to solve. And they think your products can help them solve that problem. So you really want to make sure that you're putting that right upfront to get these people's attention early. But know also, it could take a few sales to get these people in there, right? So don't be discouraged when you see the bounce rate up there because people are just looking and leaving. That's what they do. That's why I call them lookers.
Ryan: I hate when people talk to me about bounce rate. Take your bounce rate to the bank. Have them tell you what that's worth.
Jon: Yeah, it doesn't help, right?
Ryan: No.
Jon: And it's a metric so many people chase, I think, thinking, oh, I can get my bounce rate down. Okay, this one goes in with time on-site with me as well. So many people track time on-site and I think it's a false metric because if you think about it, I'm there to get my tasks done. I'm there because I want to buy this product, or even if I'm just looking around, I generally have an idea of what I'm doing at your site. I might just still be browsing, but I have an idea of why I'm there.
The problem with this is if I'm there for 10 minutes, you've made my life really complicated. I'm there because I need something, I'm looking around, and then the problem is I can't find that or I got sucked into something and I'm there for 10 minutes. As opposed to, I would much rather have customers who are at my site for three minutes and buy, right? And then I have their information. I can continue to market to them at another opportunity. But if somebody is spending 10, 20 minutes on your site, we probably have some type of usability problem.
Ryan: Well, and also I laughed when you started talking about catching their attention because I know you're going to tell people it is not a pop-up telling them to join your email list for 10% off your first order, especially if you're a looker.
Jon: Yep. I agree with that.
Ryan: That is not going to be a quality email.
Jon: Not at all. But you do want to encourage them to get on your mailing list but not through a discount, not through a pop-up, really encourage them in other ways so that you can then follow up with them later. Maybe that's something like an upcoming new release that they might be interested in, right? You should be thinking about it in that way. Once you've kind of got their attention, then how are you going to continue to keep that attention and continue to market to them? This is where I hear you say all the time, you're happy to pay for ads and break-even knowing you're building your customer roster. And I think that this is a good opportunity to be thinking about that without actually converting for a sale, right? This is what we would call a micro-conversion, where they're doing something that's not actually an exchange of money.
Ryan: Now I would venture a guess and you can probably correct me if I'm wrong, but lookers probably make up the largest portion of traffic to most e-comm sites.
Jon: Yes. There's a reason that I put them first on the list. It's because it's going to be the vast majority.
Ryan: So it's a vast majority. You've worked with some pretty large brands with the ability to test measure lots of different things. Top of mind, obviously on the fly because we didn't talk about this beforehand, but what's a good implementation of this catch your attention that you've seen implemented that caused the brand to continue to be able to grow and push these lookers further down the funnel?
Jon: Yeah. So this is where things like we were just looking at a company that sells a bunch of different pants. The price point was like $128 for a pair of pants. And I was like, man, that's, that's kind of expensive. I'm just looking at these pants. I don't really need a pair of pants right now. But the reality is what caught my attention was that they are five times stronger than jeans and I can do a lot of different activities in them. And that caught my attention because now I'm thinking, "Wow, they're going to last a lot longer than jeans and I probably spent $100 on a pair of jeans." So what's 28 more dollars to have them last five times as long as jeans, right? So just something like that, the benefit is really going to hit that. And I'm the target audience for that site I was looking at.
So, these lookers, they're likely, the vast majority of them should be your target audience. If you're working with Ryan in Logical Position, then you're driving qualified traffic. And so assuming you're driving qualified traffic and these lookers end up there, they're going to be within your demographic of who is your ideal customer, so then really it's all about connecting with them on the benefit.
Ryan: Got it. Okay. I think that's a great thing. It's easy to execute for most brands, I think.
Jon: Yeah, for sure. So we can also talk about for each of these how I would recommend converting these. And I think for the lookers, I would want to really just make sure the e-commerce site is easy to navigate and search because really that's what they're here to do, is just walk around the store, right? So make it easy. Don't put barriers in their way, help them get where they want to go, and give them a really excellent reason to give them that email address that we talked about or other contact information, and so you can build a relationship with a nurturing campaign. That site I was just talking about, they had a bi-weekly $150 gift card that they would give to somebody who signed up. So you're entered to win a $150 gift card every other week, which is great because of $128 pair of jeans, I might get those for free. So if I'm seriously interested and I want to continue to stay in touch with this brand, I might've given them my email address there, right?
And then another way really here is cart abandonment because a lot of lookers will add stuff to cart as a way of holding it to compare and look at when they're done browsing your store. It's kind of like if you go shopping and you might pick up a couple of different pairs of clothing or something off the rack when you're walking around the store because, "Oh, I like this. I might like it. Let me see what else they have too." And then you end up with three or four things, right? It's the same thing browsers are doing on your website. They're throwing it in their cart and then they want to just take a look at that and evaluate after. So having some type of cart abandonment there can be a great way to captivate their interest.
Ryan: Awesome.
Jon: So next would be bargain hunters. With bargain hunters, it's really not about discounting, right? That's not conversion optimization. I think you know my stance on discounting. People who listened to this show will know I'm fervent about not discounting, right? But instead, really look to offers like free shipping, or gift with purchase, BOGO. We did a whole episode on this. People really want to know the alternatives, they exist. And really here, you just want to be thinking about things like current offers on your website. Don't make your customer's desert at the checkout and then go elsewhere to find that bargain or that special code. If they have to go to any of those sites, they're not coming back. And so we really don't want to drive them there. And you might also highlight, last chance or clearance items instead of making shoppers really go find those on your site. It could be really good on every category to have a little tout or badge or flag on each product that says something about how it's last chance, or low inventory, or something that's on clearance.
Ryan: Now, do you advocate for having a clearance or an outlet navigation button on brand sites for this type of thing?
Jon: Generally not. Where I want to see that as within the category because, yes, having a clearance item ... A lot of brands will put that in the main navigation. The problem is you're wasting a really critical main navigation slot. You only want five to six navigation items to begin with. And if you're taking clearance as one of those or something of that sort, a sale, I see a lot of people have sale in main navigation, what's going to happen is people are going to go there first and they're not going to get a total view of your products. Usually, the products that are in that clearance are in clearance for a reason. They weren't really popular. So why do you want the first impression of what your product should be, for a person coming into your site to see, is only the products that other people normally wouldn't buy and they're on clearance, right? So instead, mix clearance in with your other products. That way you're not promoting only your worst sellers if you will.
Ryan: A couple interesting points that deviate a little bit from what we're talking about, but it's applicable in that I can afford most things on the sites I go to, but I am cheap by default so I always go to the clearance button first. Because I'm like if I can find what I'm looking for on clearance first, I'm going to get it. Even though if I didn't see clearance, I would have gone to the product and probably bought a higher price one by default because that's just how I operate on a site. But also, when you are throwing discounted products on your site, and there's a clearance section that they are in, if your Google shopping is not set up properly, all of those products would have been going into the clearance section and you can be stuck in the clearance section of the site and you're going to be staying in there most of the time.
And because products are discounted price, generally get to show more often in Google shopping because they're lower price point or there's a discounted price, you will, unfortunately, be sending a lot of discounted traffic to your site when that maybe is not the focus of your brand. So some brands I advocate for having an outlet site that's completely separate.
Jon: That's a great point.
Ryan: Kind of like Gap Outlet, their stores, they sell all their old stuff and they'll have a separate site, and then having the people going to gap.com on that.
Jon: That's a great point. And that probably makes Kanye very happy as well. Next up is buyers. Buyers should be buying from you in a way that's hassle-free, right? These people want to buy. They're there to buy. They have a job. That's one job that they're there to do and that's to buy, so let them buy. Clear these obstacles, make it easy and simple to buy, really be thinking here about the bottlenecks in the path to purchase that people must take, right? What are the hurdles you're asking them to jump over? Let's get rid of those. A really great way to look at this is to do user testing, get people who fit your ideal customer profiles, and have them run through your site while you record it and talk about the challenges they're having.
Again, the whole goal here is to get outside the jar, read the label from outside the jar. And it's really hard to do that when you're too close to it. So really be focusing on just eliminating every single possible barrier, too many fields on checkout, making people create an account before they buy, all of those things that would be extra steps or what we're looking to eliminate with these.
Ryan: And be clear on your shipping rates. That's the one that makes me so mad lately, is people not telling me what I'm going to pay for shipping, so it'll increase your cart abandonment too.
Jon: Yeah, Exactly. I mean, these people are ready to buy until they saw you were going to charge them 20 bucks to ship, right? And so, there you go. Perfect case study.
Announcer: You're listening to Drive and Convert, a podcast focused on e-commerce growth. Your hosts are Jon MacDonald, founder of The Good, a conversion rate optimization agency that works with e-commerce brands to help convert more of their visitors into buyers, and Ryan Garrow of Logical Position, a digital marketing agency offering pay-per-click management, search engine optimization, and website design services to brands of all sizes. If you find this podcast helpful, please help us out by leaving a review on Apple Podcasts and sharing it with a friend or colleague. Thank you.
Jon: All right. Should we move on to researchers?
Ryan: Yes.
Jon: Really, researchers, my point of view on these is these folks need to just make sure that they feel like they've considered their options and they're making the right decision. And your job, your only job is to help them do that. So what does this look like? Well, provide all the info you can think of, dimensions, instructions, details, data, data, data. That's what these people want, right? They're comparing. They came to your site because as I mentioned earlier, they were on Amazon, the Amazon didn't have the details, so they're relying on your site to have them. And you want to help them just make an informed decision. This could be everything from product reviews from other consumers to video. Researchers love video because they can see the products in motion and in use. Somebody even just holding the product and walking them through it.
Specialized Bicycles does an amazing job of this. They actually have employees of Specialized, not models or anything else. It's employees hold the bike and then walk a consumer through it on video. And it's really, really well done. It does not have to be ... They shoot it in a studio, but it doesn't feel like it's a super well-polished and professional video on purpose, right? It's not some high production quality. You're aiming for your local news versus the national morning show, right, in level of quality here.
Ryan: Got it.
Jon: So the other thing is, really help these people understand things like sizing and photography. Video, I mentioned. So those are the things you just really want to help people dive into are all these different decision points. All right, new customers. These folks, they really want to feel like they've made a wise decision or that you want them to feel like they can make a wise decision, understand your warranties, helping people stand behind their products. You want to make sure that you're glad that they are your customer and make them know that.
So this is where you think about retail source. Like your wife's retail store, right? She's there to answer questions. She can help out with returns. She'll generally just express gratitude when these people are shopping, right? It's hard to do that online, but this is where it becomes really, really important that you're doing things like building relationships with nurturing campaigns. And that can start with, as I mentioned earlier, a post-purchase campaign. What happens after this new customer becomes a new customer, right? They're no longer a visitor, they're now a customer. What do you need to do there? Loyalty campaigns, a huge way to engage these folks, right? You get them in and say, "Thank you so much for your first purchase. Here is points for your next purchase," or, "Two more purchases and your fourth one is free." Something of that sort, right? Where you're helping these loyal people become loyal customers. That's really what this is all about.
Ryan: And these people just purchased, so maybe they haven't even gotten the product yet or maybe they just got it.
Jon: Exactly.
Ryan: Even just user videos on how to use the product you're getting can be valuable. I do that with Joyful Dirt.
Jon: That's a great point, right? So what can you send as that follow-up email flow while the people are waiting for their package to make sure they know that you have their back, right? So if I bought Joyful Dirt, what do I need to prep for? Is there a season I should be doing this in? How much water do I need to apply? All these other types of things that I probably don't really think about, but are really key to somebody getting the most out of the product and buying again, right? If I follow your instructions for Joyful Dirt, I am more likely to have a good experience and then buy again, then if I just use the product without reading the instructions, which is more likely for me than not so.
Ryan: What I appreciate on it too, on that first email after I purchase, usually the next day, it builds the anticipation because often I forget what I bought yesterday and I get surprised by Amazon in two days, who are the site I purchased it on. And so you're like, "Oh, yeah, I do have that coming in a day." I'm excited to get it now because I was excited yesterday when I bought it, and I forgot today, and then tomorrow when it arrives, I get excited. So it's a good way to continue that kind of that high from my purchase that I just paid.
Jon: How is there not a phrase like the Amazon phenomenon or something, where everybody forgets what they ordered at Amazon at midnight the night before and then it shows up two days later and you're like, "Oh, yeah, I was looking for that. That was great. I'm a genius."
Ryan: I know. I was like, well, I knew I wanted one of these and like, oh, I did want one and then I bought it. It was great. In college, it would have been, "Man, what did I do at 2:00 AM?" and talk about, "Oh, I had a bean burrito." Now, it's just transaction fatigue or something. And I'm just [crosstalk 00:25:48].
Jon: That was much lower key than I thought you were going there, Ryan. 2:00 AM in college. But this happened to me recently where I was working out with a trainer and we do an outdoor workout in my garage now. And it was really funny because he didn't bring his TRX bands. If you know about these TRX straps, they're a way to do workouts. And the reality is that I went on and I just ordered a pair from Amazon. I was like, "Well if you ever forget them again, I'll have some here." And totally forgot about it. And then the next workout came by and the Amazon guy literally showed up two days later while we were working out. So it had been like two days to the hour and the guy shows up and I'm like, "Oh, I wonder what that is." And you could read the outside of the box. It said TRX. And my trainer is like, "Did you get something from TRX?" I was like, "Oh, yeah. Last time you were here. Yeah, remember?" Yeah, so that's was pretty funny. I was like, Amazon wins again.
Ryan: Yep.
Jon: All right. Dissatisfied customers. We have two left. So let's talk about the dissatisfied customers. Everybody has them, right? And they exist. And that's okay. These folks often can just be made satisfied by helping them understand that you're trying to fix their challenge and improve the experience for everyone else. Often, it's like if I come across a problem on our website, okay, let's just say, I just bought a bed. I'm not going to name names, but I bought a bed online and it has a whole bunch of technology in it. Love it. But, I'm a tall gentleman, right? And I bought a king, and it comes, and I was like, "This is a lot smaller than a king." It turns out, I measured it, it's two inches less than a king. And I was like, that's really weird. It's not a queen. So what's going on here?
And so I contacted the brand and said, "Hey, this bed is two inches smaller than a king." And they said, "Oh, yeah. Because of some of the technology, blah, blah, blah, we have to make it a little bit smaller." And I was like, "That would have been nice to have known up on your site. You need to tell people that it says king, but it's actually two inches smaller. Because you're advertising all these NBA players use this bed and things like that, and I'm thinking great, right? But then it's two inches smaller." And the founder actually emailed me and said, "Hey, I got this feedback. I heard this. Well, we're going to add this to the website and make sure people know." And I was like, okay, well, I still have the bed, now I'm satisfied.
And I was like, at least other people won't have that problem, right>. So I felt vindicated in some way. And so I think I made this point to say that complaining customers are an excellent source of feedback. And that's how you need to look at these, right? It's not about just having dissatisfied customers, it's about understanding what their problems are and fixing them. They tell you what the problems with your website and your consumer experience are, and so you could fix those problems. So really just want to be quick to listen to things like bad reviews, understand the complaint before responding, and understand that you can turn dissatisfied customers into loyal ones. It is possible.
Ryan: I think too often brands hear or get bad feedback or just dissatisfied customers, and it's just for them, it's almost scary confronting it, or they're really excited and passionate about their brand, and somebody doesn't like it, they're like, "They just don't know what they're doing." I've done this myself with brands, and I'm like, "They just don't know what they're doing." And then I'm like, okay, it happened again. I'm like, okay, fine, we need to adjust the product. And my baby may be ugly, so let's fix it and not make it so ugly to some of these people. You can't be scared of dissatisfied customers, or you're going to lose your brand. At the end of the day, it's going to be just terrible.
Jon: That's a good point. Yeah. All right. Last one, loyal customers. So, look, the 80/20 rule says that 20% of your customers will be responsible for 80% of your business. So the way I like to look at this and it's hilarious, I was just saying this to somebody else, but loyal customers are your bread and the rest are your butter, right? So really want to be thinking about what are you doing for these loyal people? So look at loyalty programs. I like to use airlines as examples because they are so good at gamifying, right? I'm platinum on Delta. I mean, I haven't flown them in nine months and I just got another letter from them yesterday with baggage tags for platinum level. And they said, "Hey, we're going to keep you a platinum level for another year. Don't worry about it. All the miles you've accumulated will count towards next year. So you don't have to start over. We understand." And they're gamifying it and in a way that's, okay, now, next year, when I start flying again or whenever that is, I'm going to go right back to Delta because I'm still platinum there.
If they had removed, I'd just figure out, I'd be like, hey, well maybe Alaska or whoever else flies more on the West Coast where I'm all the time going, I would probably switch. But now I'll stick with Delta, right? They've done a great job with that through what's no doubt a challenging time for them. So really want to be thinking about a way to keep customers coming back and how you can take care of your most loyal customers. As I say, gamifying works very, very well. Every customer is special, but you really want to treat these folks with even more kid gloves, if you will.
And then find ways to reward and recognize these people, you can give them special amenities. Baggage tags aren't really going to be much for me. I don't really care about that, but I'll take the free upgrades and the free alcohol and everything else that comes with being platinum with Delta. And then really just treat them like a VIP and they'll continue to be loyal. That's really my key point here.
Ryan: And this is really probably the one area that I advocate for companies looking at competitors and taking note because a lot of times when you look at competitors and they have this widget on their side, or they do this thing in their ads, they probably have no idea what they're doing. At the end of the day, they're testing something. But when it comes to loyalty and what they're doing with their customers to try to keep them loyal, often, this is where a lot of research goes and especially in the airlines. If I was running an airline, I would go to all of the other airlines' loyalty program, find a list somehow and say, "Look, if you are platinum with Delta, I will automatically make you platinum or whatever my highest thing is with Alaska, give me a shot." And just automatically, because you're losing nothing. I'm not getting Jon's business right now.
Jon: Right. It's funny you say that because Alaska does just that. They'll do a status match, where if you're platinum on Delta, they will status match you and give you that for a year on Alaska. Sadly, you can only do it once in your lifetime. And I did it right before the pandemic, so that's not a good situation for me. But yeah, at any rate [crosstalk] travel.
Ryan: Join your competitor's loyalty program. I highly recommend everybody do that because it's going to give you some ideas of what they're seeing in the data or how they're gamifying it. Just jog your brainstorming ideas.
Jon: Yeah. Status matches is a great idea, right? That's wonderful. Yeah. Where do you think you want to go from here?
Ryan: Well, we're about out of time. So, I guess, I've got a lot to chew on too because I'm sure we're going to come out with some other ideas on this after digesting most of your data. But there's a lot of things you can do on a site to target a lot of people. And so what would your suggestion be to somebody that's just taken this fire hose to the face for their site and they're like, oh, my gosh, seven different groups of people? Where do you start and how do you start taking some actions so you're not a paralysis-analysis scenario?
Jon: Yeah, great point. I would say here, start by asking questions about each of these groups and taking a good look at your site from their perspectives, right? So do each of these customer types get their needs met or are you just leaving some out in the cold? And how do you identify and engage the most loyal customers, or how do you flag and recognize new customers? And are you providing enough information to researchers? So really there's a key question in each of these if you go down and just ask yourself, am I meeting the needs of these people? And you'll come up with tons and tons of optimizations that you can do to your site on your own pretty easily.
Ryan: Got it. And I would probably just broad stroke saying if you move up through the list in reverse order, you're taking care of some of the easiest or most important things. Like keeping your loyal customers loyal to you, you can't lose lifetime value customers, otherwise, your top-funnel marketing is just wasted. So keep those and move up. If you have to make a choice on where you're taking actions, I'm guessing that's where I would start.
Jon: There you go. Awesome. Well, thank you, Ryan. I really enjoyed the conversation today.
Ryan: Yeah. Thank you. Thanks for bringing your brain and letting me pick it and add some value to our listeners. I appreciate that.
Jon: All right. Well, have a great afternoon.
Ryan: You too. Thanks, Jon.
Announcer: Thanks for listening to Drive and Convert with Jon MacDonald and Ryan Garrow. To keep up to date with new episodes, you can subscribe at driveandconvert.com.
With Cyber Week just in the rear view mirror, we’ve got a lot of questions for Ryan...Outside of revenue, how does a brand know if they were successful for Cyber Week? How do they know if money was left on the table? Or their goals were misaligned? What were the common missed opportunities in search engine marketing? What does a brand’s data say about their Cyber Week performance? When a brand looks back at their ecommerce data for Cyber Week, what should they be looking for? We've got even more questions, and we’re very fortunate to have access to Ryan who has answers!
TRANSCRIPTION:
Jon:
With Cyber Week just in the rear view mirror, I've got a lot of questions that I've been wanting to ask Ryan. Outside of revenue, how does a brand even know if they were successful for Cyber Week? Or how do they know if they left money on the table or if their goals were even just misaligned? And what are the common missed opportunities in search engine marketing that have been happening over Cyber Week? And what does a brand's data say about their Cyber Week performance? And I keep going here, but when does a brand look back at their e-commerce data for Cyber Week and what should they even be looking for? So, I've got even more questions, and we're very fortunate to have access to Ryan who has answers on things like this. Ryan, let's start with the big overarching question that is likely on the minds of e-commerce brands right now. Outside of revenue, how does a brand know if they were even successful for Cyber Week?
Ryan:
Yes. A lot of great questions, Jon. I would say revenue, most likely, is most important to brands. And so, we do have to look at that, but it gives you a very one-dimensional picture of what happened. The year 2020, almost anything goes and expectations have to be adjusted very quickly, almost in real time, of what we think is going to happen, we test it, we go, "Oh, that didn't happen. Great. Do this, this, or this." I think looking back on Cyber Week is going to be important for a lot of brands to really decide what you're going to do for the rest of the holiday season. Because for most brands, you rate in the middle of your holiday season, you still got a good solid couple of weeks left of really high conversion rates, high traffic rates, and a lot of time to make up for missings on Cyber Week or continue what was successful in Cyber Week, and really make it a holiday to remember for an e-commerce brand.
Step one, when I'm looking at data for a holiday season, I have two buckets of companies in the e-commerce world in my head. Either you have good goals or you have bad goals. Those are the only two buckets I look at. And thankfully, it doesn't really matter which bucket you're in, you can look at a certain metric that's going to help guide the rest of your analysis. Let's say you have great goals, and you are shooting generally in my world, you have great goals if you are shooting for a non-brand goal specifically. And so, let's say you had a breakeven goal during Cyber Week. And if you had a 50% margin after discounts and everything, you're going to shoot for a 2X. If you were above 2X during Cyber Week, either the whole week, or sporadically, or consistently, that tells me you left money on the table.
Jon:
Let's talk about that for a minute. When you're talking about a 2X, a 2X of what?
Ryan:
Your spend on Google, it's your acquisition market. That's generally where you can leave money on the table. Your organic traffic is set. You're not going to do any organic work and SEO work in the middle of Cyber Week and have it move the needle for you. Your acquisition market is going to be Facebook, Google, Microsoft, Amazon if you're on Amazon, and that's the leverage you can push and pull and move stuff real quickly. And so, generally, brands are going to go into Cyber Week with a goal. Generally, they'll set a goal for budget, set a goal for revenue. What are we going to spend on each channel? And what do we expect from each one?
If you were above goal, I'm going to tell you left money on the table. Now, a lot of marketing teams, a lot of agencies are going to go back to the exec team and be like, "Look how amazing we are. We spent your money and we were above goal. Aren't you happy with us?" I would be furious with my marketing team, and I'm the marketing team for my brand. So, I'd be mad at myself that, "What are you doing not spending more money to capture more customers?" I didn't want to shoot for, let's say, 4X on my non-brand. That's great that you did that. You got us more profit, but I would rather have customers than I would profit on my non-brand terms.
Jon:
So, using Cyber Week as a way to build your rolodex, if you will, right? To build up that customer list that then you can go and get more sales from later.
Ryan:
Yeah, that's what I do with every week, it's not just Cyber Week. My goal on every week of every year on marketing is more customers. And so, that's where I set my goals, that's how I use my acquisition marketing with Google, Facebook, Microsoft, Pinterest being a new one, that's pretty lucrative now. If you're not looking at Pinterest, you should be looking there. You're probably too late to holiday season with the setup times in there. But again, all acquisition market where I have a non-brand, new customer acquisition channel, I want more customers. And that's where I set my goal. And I don't want to overshoot that. If you're under the goal, and this is an asterisk, but you probably capture the market you could have. Now, there's a lot of things that go into that, was your conversion rate garbage because you weren't working with Jon? If so, then yeah, you might not hit row as you left money on the table, because you weren't converting as well as you could have.
This year's obviously unique. And there's no scenario in which you can say that 2020 is not a unique year, period. Based on what we've seen the previous 10 years of my e-commerce time. But another wrinkle coming into this year has been Smart Shopping. Google has been a big advocate for pushing for this. And so, Smart Shopping and Google has a big push this year. It was around last year, but it was a very small percentage of advertisers we were seeing with Smart Shopping. This year, a lot of advertisers in Smart Shopping, my gut tells me they're going to go back and look at all their Smart Shopping campaigns and that was a lot of missings. There was a lot of money left on the table with those.
Generally, it's because all of your search queries go into one bucket. You can't effectively, in Smart Shopping campaigns, separate out brand and non-brand at scale. Small little tests you can do, but it doesn't work at scale. And so, if you have a goal, it's going to include brand searches, non-brand searches, remarketing display, there's a lot of things bucketed into that campaign. If you did not adjust your goal for a promotion week like Cyber Week, you, for sure, left money on the... If you're shooting for... I'm going to make this up again, say a 5X. Your blended goal, 5X, in your Smart Shopping campaigns and you're like, "All right. We're going to ride that into Cyber Week." And the only change is going to be a promo.
Your competitors probably had a promo, they probably adjusted their goals down to capture more market share, knowing the competition was going to go up. And so, the smart campaign that's trying to hit the target row as a five in this campaign is not going to be able to adjust well against all this increased competition, increased click costs, increased conversion rates to really understand how and where to play well. It just doesn't react necessarily quick, and it's got to have a lot of data to make decisions. And so, I'm guessing, if you were in a Smart Shopping campaign, chances are you left some money on the table.
Jon:
And do you feel like that should be changed until the end of the year? Until we're through this high volume shopping area?
Ryan:
If you're in Smart Shopping now, chances are, you probably don't have a team that can move you off of that in time, chances. If you're with an internal team that has only managed Smart Shopping, they're probably, internally not going to have the skillsets necessary to build out all these granular ad groups needed to do a brand, non-brand shopping and push that way. If you're working with an agency that was running Smart Shopping, but also knows how to break out your search queries and set that up. Generally, I would advocate for that, because shopping can be changed very, very quickly in Google with very little penalty. The quality scores reset very quick and Google has even said that they are going to be on hand to make approvals in merchant centers and in shopping campaigns very, very quickly this holiday season. And we've seen that continue through.
So, I wouldn't be worried as much as long as there's proof that you have the ability to create that. Well, I would also say, I've talked a little bit about good goals, and if you've got bad goals and you're shooting for too high of a return on ad spend, and you weren't going from market share or customer acquisition, which generally, you need to be in a holiday period where the competition ratchets up so aggressively. If you didn't lower goals that's bad goals, you, for sure, left some money on the table.
And the easiest way to measure that would be to put, probably, let's say, a 10-week period on Google Ads, and just map out your return on ad spend or your conversion rate divided by cost, and see how that changed by week. And if it stayed flat the whole time and didn't move even through Cyber Week, there's probably money being left on the table. You probably could have been pushing harder through that time period. If it spiked and you got a higher return on ad spend, you, for sure, left money on the table. If it dropped and you kept pushing at the same investment level, you probably left a little bit less on the table at that point.
Jon:
Okay. Interesting. What are the common missed opportunities? And you mentioned the Smart Shopping, right?
Ryan:
Mm-hmm (affirmative).
Jon:
Are there other things that you have commonly seen be missed over these high volume time periods?
Ryan:
Yes. You have to be in the account constantly. And so, if you are running your own account or you have an internal marketing team, you are making changes or you need to be making changes daily, many times throughout the day during holiday periods. And because we're in a condensed environment where it means that less people are at retail stores, more people are shopping online even more so than the rest of the year, you have to be adjusting and pivoting to competition constantly.
Jon:
What should they be adjusting, I guess, is the question? What terms? The dollar figures?
Ryan:
A lot of times it's bids. And so, you're moving your bid. a lot of people will put in an automated bid system or they'll use Enhanced CPC on Google and assume that they are fine at that point.
Jon:
Yeah. Don't do that, because that's where I spend a ton of money, without making [crosstalk 00:00:10:06]-
Ryan:
Oh yeah, your $200 click, that was a fun one. One click, 200 bucks, gone. That's a nice bottle of wine, just to that click.
Jon:
Yeah. Well, lesson learned.
Ryan:
Lesson learned. Yeah. We got you back to some better spending habits. It's not going to be... Even those settings need to be adjusted all the time. And the larger you are, the more often you need to be in the account. And larger by an ad spend perspective, not a company perspective, but the more often you need to be in the account. Some of our largest spends, and we're talking seven-figure holiday spends by week, in the account, on the hour, looking at data, we have some clients that will be adjusting promos at 9:00 AM every morning. And re-looking at them at 1:00 PM based on the results. It's basically moving up. There's not many scenarios in a holiday season where you're moving bids down. The competitions only increasing, your competitors get more desperate because they're not getting sales and you are.
Brand terms are going to be especially good to stay on top of that. Make sure your competitors not coming in and trying to steal some easy clicks, keeping your budgets up. And so, if you went through holiday week, for example, and you were limited by budget all week, because you set a fixed budget saying, "All right, we're going to spend X dollars. I'm going to spend $5,000 on Cyber Week, not a penny more." And you left money on the table. If you had a return on ad spend that was acceptable and you had limited by budget, why would you not spend more? Unless you're on purpose losing money to acquire customers, then you limit it based on what your CFO tells you. But for most companies, you don't want to be limited by a budget if you're hitting goals
Jon:
Okay. That's really insightful. And I have a follow on to that, which is assuming that a brand has had to spend a lot more because pre-Cyber Week, we saw how Facebook ads and Google Ads were way more expensive. The invested dollar did not go as far as it was going pre-pandemic or earlier in the year for instance, right? With all those costs going up, what are you... And I'm hearing from you, you should be spending even more right now, right? Because you're only going to adjust those bids up. What should a brand be thinking about spending the rest of the year? Not in terms of dollars, but is it... And this might be something that's just a based on a per account basis, but overall, should brands be expecting to spend twice what they were normally budgeting during this time period? Or is it a certain percentage that you're seeing brands? Are budgets have gone up and just need to be budgeting for the rest of the year?
Ryan:
Tough question, because every e-com business is going to be a little different. Some e-com businesses, 80% of the revenue comes between Thanksgiving and Christmas, and you can't possibly be spending enough. Others are pretty flat throughout the year. Some, like in the auto parts world, generally, this is slower than it's going to be in tax return time come January, February. So, it's going to depend. But one of my favorite quotes in a good movie called Wall Street was, it's more, at the end of the day. You generally need to be comfortable spending more, and it can make you uncomfortable committing to that. But, I, as a person, hate constraints, just as a general rule. I hate being told what to do. I hate having guard rails put in place. I know they're necessary, but it doesn't mean I don't push against-
Jon:
This is why you have a farm with a lot of land.
Ryan:
It is, yes, it helps. But I hate budgets in the digital marketing world. You shouldn't put a constraint on your marketing budget and say, "This is how much I have to spend. It doesn't really matter what happens." That is a huge fail that a lot of business owners and exec teams get caught in, because it's how we've budgeted marketing since we've had business. Thousands of years, you'd be like, "Okay. I have this much to go market my produce at the market." Now, because you actually pay for Google clicks after you collect the revenue, you can be free to spend more as long as you can fulfill the orders. And that is a constraint coming up here. UPS, FedEx, USPS, there are some physical constraints to how much can fit through the shipping pipeline.
There's also constraints on inventory. If you're out of inventory, obviously you're not spending, but you sold all your inventory, that's fantastic. Go enjoy the last weeks of the holiday season and not worrying about selling anymore. But then, be mad at yourself that you didn't buy more inventory. So, spend more, but understand generally, marketing channels for acquisition are getting closer and closer to a vacuum in which all of that first order profit goes to the platform driving the sale to you whether that's Google, Facebook, Microsoft, Pinterest, Etsy, Amazon. The ad platforms are phenomenal at getting that margin, because competitive people like myself, getting into the saying, "I don't care if Google gets all of the margin on the first order, because I'm going to make money on repeat business. I'm building my email database. I have phenomenal email marketing. I have a phenomenal product."
The more people look into marketing the way I do, the more of that margin is going to Google. Five, six years ago, it was not tremendously difficult to have a decent margin on that first order from Google Shopping. Now, I think that is going to be more and more of a rarity just because of the... Just the nature of so many competitors and very limited real estate on the screen.
Jon:
Let's talk about this. Say I'm a brand, not one of yours, but brands that is out there, and I missed out on Cyber Week. I listened to everything you just said, and I am kicking myself because I've missed out. And I'm at the point where I have some ground to make up between now and the end of the year to hit my numbers. What would you suggest here?
Ryan:
Step one would be adjust goals down so you can spend more. Take the constraints off of your budget, and if you're shooting for a profit, even if you are on a smart campaign, you have to take some guesses and figure out how much of your orders are brand versus non-brand sales, that's going to be in Smart Shopping and educated guess at the end of the day. Based on the size of your brand and new file customers you're getting, but adjust down so that you're fine breaking even. If you have a 50% margin, and I was stuck on a Smart Shopping for the rest of holiday, I would set it at a 2X goal, jack the budget way up, and let Google go find it, and find some opportunities for you to be in there. Lower goals, increase your spend level.
And in lieu of discounting, which discounting is one point I'll talk about, I know one that you don't like, but at this point, becomes almost necessary evil to get some market share that if you were out-discounted by your competitors in Cyber Week, Cyber Week is an anomaly where, to a degree, I would go against Jon MacDonald a little bit and just say, you've got to discount, everybody's expecting it. And Google Shopping being the biggest Avenue for acquisition for e-commerce brands, if everybody else is discounting and you're not, you probably can't bid enough on a cost per click to compete even. It's just, Google's algorithm is so sensitive to price that if you're giving a 10% discount and your competitors giving a 25% discount on the same product, they're going to win almost every single time. Really doesn't even matter what you bid.
Jon:
So, doing things like offers, BOGOs or gift with purchase, Google's not going to pick up on that. You're just going to lose out because you didn't do the price discount.
Ryan:
Exactly. And it's unfortunate, really, at the end of the day, because I really, like you, advocate for creative bundles. I love giving free shipping to your loyalty program if you do have a minimum shipping threshold, but those just don't translate to Google Shopping and actually getting a traffic. And so, you might need to start discounting to try to make up for the fact that you weren't discounting enough earlier. And so, you have to react a little bit to your competitors. If they're giving 10% off for this week, maybe you jump to 15, maybe 20%. And then, you will also, generally, be rewarded with a lower cost per click in Google Shopping.
Jon:
Okay. So, you get some of that back in theory.
Ryan:
You get some of it back. And what most brands and marketing teams as well, and even some agencies, aren't paying enough attention to in Google Shopping is the halo effect. And I think I've talked about that a few times on this podcast, but the more you spend in Google Shopping to acquire traffic in non-brand terms, so people that don't know who you are yet, they're looking for your product, the more traffic you're going to get in organic traffic, from Google organic, Bing organic, Yahoo organic, the more direct traffic you're going to get, and the more email you're going to collect. And you're going to get revenue through email, because Google Shopping is so good at introducing people to your brand, it doesn't actually... If it's run right, often, you will actually see more assisted conversions than last click conversions analytics from Google Shopping.
And so, that's why breaking even on Google Shopping is not a bad thing at all. And in fact, you're not losing money, you're building up credit card miles for your wife, for your husband to go off and travel with you after the holiday season. But you're also getting a lot of extra profit through increased direct organic and email.
Jon:
Right. Makes sense. Thinking about that, what about Microsoft Ads? Should we be looking at additional channels assuming that you missed out on Cyber Week? Now, you're pushing other channels as well.
Ryan:
Jon, you know me so well. Microsoft Ads is a layout for almost... And if your stall is [Jon Macdonald 00:20:08]. But it's the easiest marketing that most companies are not taking advantage of. It constantly surprises me how many companies I'll talk to that just aren't spending on Microsoft Ads that's like, "We did in the past, it just wasn't doing much. So, we just turned it off." I'm like, "There is so much easy money there." The conversion rates are almost always higher. The competition is lower. Yeah. There's not a ton of search volume or near this... I mean, there's a lot, there's billions of searches there, but it's just, in comparison to Google, not nearly as many. But take it, get out there, get more aggressive on Microsoft. Get there if you're not there.
Jon:
Do you have any other final thoughts on this? What else should brands be doing? I know you well, but I'm out of ideas of what I would think people would do.
Ryan:
Well, where we're at in the holiday season, there's still a lot of sales to be had. And so, I haven't even bought a Christmas present yet. I'm a free agent at this point. And I always am... I don't buy my... I'm so busy in the e-commerce world, helping other brands-
Jon:
Ryan last minute Garrow over here.
Ryan:
It's terrible. Yeah. And when we can go to stores, I'm always the first on Christmas Eve freaking out buying what I can. Free Shipping Day and Green Monday are on the same day this year, December 14th. Green Monday is not necessarily a holiday that we talk about outside of the e-commerce world. But that Monday every year in December is the highest online shopping day of all of them. Unless Cyber Monday happens to get into December, which I think it might've been last year. And so, it's a big day still coming. You want to be prepared for it. You don't have to call it out as Green Monday, because most people not in the e-commerce world don't even know what it is. They just know that our app work and they're shopping rather than working on Green Monday with everybody else. So, be prepared for that.
You're going to give free shipping out that day. Just give it to people. You need to be a little more creative at this point if you're trying to make up revenue with free shipping. My brands, I try to give free shopping on everything. I don't even want it to be a barrier to conversion personally. So, if you can lower your free shipping threshold, give it on everything, that's better often than giving a discount. And so, using easy math, let's say your free shipping threshold is 50, but you've got a lot of products that are 25 bucks. Okay, well, rather than discount those $25 products 20%, giving them, basically, five bucks off, why don't you just include shipping? It doesn't have to be fast shipping. They can pay for two-day if they want, but just say, "Hey, it's free shipping on everything." And that will often go much further or just as far, but you won't be seen as a discount brand. So, your lifetime value on those customers can be higher.
Jon:
That's great. Let me ask you a question about shipping. Pre-Cyber Week, we saw a lot of shipping delays, and that's been happening a lot. I know that even companies like ShipHub are setting up trackers to help brands really understand what shipping times were looking like and they were obviously extended. Do you think post-Cyber Week that... I mean, December 14th, you got 11 days to get them a package in theory. Probably 10, right? Because you really want to get there before Christmas. So, you have 10 at most. Is it possible? I guess, that's my question. Is it something where brands need to start thinking before December 14? Is it something where like, "Hey, this shipping cutoff date has got to be earlier. So, all the chips on the table, just push them all over for that first week of December and just be done with it." Right? Is that something brands should be thinking about this year, because the shipping delays?
Ryan:
I mean, again, it has to be in the back of your mind for sure. And I would think that most delivery systems given 10 days, even in holiday, are probably going to do okay. I assume there's still going to be late packages and people will be celebrating Christmas gifts the following week into New Years. Leading up to Christmas this year, it's an entire week of shipping days. I think the last couple of years Christmas was on Saturday, Sunday or something, or it was set up in a way that we didn't have as many... I think it was on Tuesday recently, where there was a whole weekend where maybe shipping wasn't done as well leading up to it. We've got a lot of shipping days. And I think that because of COVID, there's been a lot of investment in the shipping space. And so, I think, we're going to be in better shape than we would have been normally. But still, we are cramming a lot of e-com through these shipping companies.
And so, as a merchant, I would probably do my guaranteed shipping cutoff on USPS, probably right around free shipping. And then, work with my FedEx or UPS reps to figure out realistically when I should be cutting it off. And they should have a good idea, I think, internally, on what that should look like. But understand too, you're going to have some customer service issues. If you're not using Route yet on your site, I highly recommend putting it on. If you're on WooCommerce, BigCommerce or Shopify, you can just push a button, and then get it on there really quick and easy, and let that shipping insurance cover you for some of that struggle.
Jon:
That's a good point. Yeah. Then at that way, if things don't show up on time and they've paid extra, they can then get that. At least, that expenditure back to some degree or if their packages get stolen in transit or from their porch, then they get that [crosstalk 00:25:30]-
Ryan:
Yeah. I think there's going to be some porch piracy coming up unfortunately.
Jon:
I'll tell you what, I have seen it, I should say, already. Great. Well, any other comments on this? Today has been super insightful for me. I've learned a ton like I always do. So. Thank you for educating me. Anything I missed?
Ryan:
I would just say if you're at this point, and you're having to make up ground, it's time to start throwing some Hail Mary's at this point. I mean, you can't possibly test or try something that... Even if it has a low chance of succeeding, you got to make an effort if you're trying to make up ground. I would even, potentially, look at doing some social promos with complimentary brands even. And if you're going to do that, you're going to have to go big during this time period to get through the clutter, and you're going to have to promote it. So, if you're going to do a giveaway, it's going to be a, "Hey, we've got a two or three-day window. We're going to push hard with ads, get a crazy thing given away to people to draw some attention and try to get some eyeballs on something." Build up some audience lists, you can market to them or remarket to people. But really, nothing at this point would be off the table in my mind in trying to get eyeballs to the site and try to get some conversions.
Jon:
Awesome. Well, thank you very much, Ryan, and go Beavers. For those who can't see Ryan right now, he's wearing the Oregon Ducks gear through and through. And the Beavers, the Oregon State are their biggest rivals. I have no stake in that claim being an Ohio boy. I'm Ohio State all the way.
Ryan:
Well, maybe we'll meet in a bowl game somewhere.
Jon:
Yeah. Well, hopefully.
Ryan:
That neither of us were able to go watch in person.
Jon:
All right, Ryan, thank you for your time today and educating us as always.
Ryan:
Thanks, Jon.
Psychology plays an important part in business no matter what business you’re in or how you’re getting sales. The best tactics to convince us to spend money are the ones we’re not aware of. Retail stores have been using music, scents, and merchandising to get us to spend more money for decades if not centuries. Those tactics online now have a name and its Dark Patterns. Jon explain just what Dark Patterns are and why your brand should avoid using them.
Read more about Dark Patterns:
https://thegood.com/insights/dark-pattern-ecommerce-ux-design/
Transcription:
Ryan:
Jon, psychology plays an important part in business, no matter what business you're in and how you're getting the sales. Now, the best tactics to convince us to spend money are the ones we're not really aware of. And retail has been doing this probably for hundreds of years, even though I haven't been involved in it, using music's sense merchandising of how they put products on the shelves to get us to spend more money. And all of that research and data is out there for the taking, but I would venture a guess that most of the public is unaware of actually what's happening in those retail environments to commit us to spend money. When it comes to e-Commerce though, and the way our economy is moving to transacting online, I'm finding a lot of these "psychology tactics" are much more in your face, or at least I'm more aware of them.
And maybe it's because I'm spending too much time in front of my computer talking to e-Commerce business owners and looking at e-Commerce sites. But I see it all the time, and a lot of times it just bugs me and you have a term for it called dark patterns. And that's a new term to me, but probably not to you because you work in the CRO world, but you recently mentioned it on LinkedIn. And I wanted to learn more about it because it fascinates me, the intricacies of psychology because studying sales my whole life and now having a retail store with my wife, it's just always there. And I think most of them I see online are garbage, some plugins on Shopify sites that maybe should never have been put on in the first place, but I want to learn about dark patterns. And I learned from one of the best in the world, who should be you.
Jon:
Awesome.
Ryan:
It sounds evil, but I just want to know more. How do we use our powers for good?
Jon:
I'm looking forward to it.
Ryan:
Jon, why don't you just take a moment and give me a high level of what do you mean when you say dark patterns when it comes to e-Commerce and e-Commerce sites?
Jon:
So when I talk about dark patterns, what I'm talking about is similar to, if you think about hacking and in a way that there's white hat and black hat, right. And black hat hacking is when you're doing something intentionally for a negative outcome, it might be a benefit to somebody like it's going to be benefits to the hacker, but you're hurting somebody in that process or you're creating a problem in that process. Where a white hat hacker is really just trying to help. They're trying to do things for positive. Maybe they're looking for bugs, but they're going to report them to the software maker before they do anything to exploit it. So you think about that. Exploitation is really what comes in here to my head when I think about this more than anything else. So, what we're talking about here today is really when an e-Commerce store makes something difficult because they want to influence the outcome that they're trying to do.
So whether that's something through psychology, you talked about in a retail environment, the type of music they play in the background that calms people down, or how they price, where they make things $2 and 99 cents instead of $3, right? You start thinking about all these psychology tricks that come at play well in e-Commerce there's all those psychology tricks. Plus there are ways to actually increase barriers intentionally on a website so that the consumer can't take the action that they're trying to take, instead, you've made it more difficult. Some examples of this really easy one, an email pop-up pops up when you come to the site to sign up for email lists and there's no way to close it. So the only way you can get back to what you were trying to do is to give them your email address, or I like to call this negative intent shaming.
So where the button in that pop-up says something like, no, I don't like discounts or I don't like saving money, right? There's all these types of dark patterns. And it can go even more, really sinister and you make it just impossible to unsubscribe without calling, right? So for years, and it may still be this way, but Skype was an amazing case study of this, where they would claim massive retention rates, but their user rate was super low and usage. And the only reason they had retention rates that were so impressive is because the only way to actually cancel and delete your Skype account was to call a phone number in the U.S. So, if you're an international user where Skype was way more prevalent than in the States, you had to call international, talk to somebody in English only, and say, I need to cancel my Skype account.
Please delete it from your servers. Why won't you just do that when a click of a button? So this is a good example of a dark pattern where the brand really valued retention, so they made it near impossible, right up, maybe to that legal limit. And one of the things you saw on LinkedIn was I had posted to an article it had run in what's called The Hustle, which is a great entrepreneur email. If you're no signed up for a free email, it comes out every morning, just around entrepreneurship and the tech industry and whatnot. And they were saying that there's new legislation coming in that is all about making these dark patterns illegal. And that most things need to be self-service, and it shouldn't be a challenge. So that's really where I was going with this was not only is this just bad to do and lead to a horrible brand image in the longterm, but it's also going to become illegal fairly soon. And I hope it's sooner than later, I have my doubts that would happen anytime in the near future, but I hope it's sooner than later.
Ryan:
So could you also bundle in to that broad, I guess I would probably try to broaden dark patterns a little bit and say it also includes what people think is helping from a psychological perspective, but it's actually just stupid. Well, one of my, I guess, favorite, least favorite was the one that I noticed the most is there's a plug-in on a lot of sites that says, Oh, little Jimmy just bought the pink t-shirt and Oh, look over here, Susie just bought this vase. And Oh, people are buying all over on the site and I can go to some sites and I've seen maybe the analytics behind the scenes and maybe some of my audit. And I know for a fact, there's no way that five people just bought something in the 30 seconds I was on their site.
Jon:
That's exactly it. Fake social proof is a great example of this, right? So it's having a random number of view, people are viewing this product right now, having X number of people who just bought this product from wherever in the world. And consumers always distrust that now, because it's been abused. Right. But it's a dark pattern because what are they trying to do? They're trying to influence your psychology around social proof and having fear of missing out. And you want what everyone else wants and, Oh, well, if so-and-so just bought that product, then it's probably legit and I should buy it too. And we see this more and more, a really good example is well, and we're getting through a lot of good examples. I could go on for days for examples, but another great example is a fake countdown timer, right?
They're introducing scarcity, but it's false scarcity. What I mean by that is sign up within the next five minutes and we'll give you something or okay, we've talked about this in other shows, we did a discounting episode, not too long ago. And you were talking about how your wife just leaves products in the cart, abandons the cart, waits 24 hours and knows there's the discount email coming. You know that that clock is no good. Okay. Reminds me of the old TV commercials call within the next five minutes and you get this free bonus. They have no idea when that commercial is going to run, down to the minute, they don't know. And if you think about it, especially when you see these on news stations, right? News stations have somewhat of a cadence for ad timing, but it's never down to the second, to down to the minute.
So there's no way you could start a clock and say in five minutes, right? I guarantee you, if you called them in a week, they'd give you that same price. And it's the exact same thing happening here where there's a whole bunch of these dark patterns that are playing on people's psychology or making it really complicated for them to actually take an action they want to do in order to benefit the brand.
Ryan:
So what we're not talking about though, is actually having your inventory show on the siting. I actually only have three of these left because Amazon, I see doing that. And based on some of my experience in Amazon, on my brands, I feel the trust that at this point they might change, but that's not what I'm talking about as far as scarcity.
Jon:
No.
Ryan:
Okay. It's the manipulation of faking scarcity or faking a countdown timer.
Jon:
Yes, exactly. Now, if you're just always going to say that there's only three of these left, in order to have scarcity when none exists, then that's a dark pattern. But if you're actually trying to help the consumer, get the product they want and know that, Hey, if you don't buy it, now you're going to have to wait for the next batch to come in. And that could be six weeks or whatever. Right. Then I would put that under the white hat, right. You're really trying to help people and you're giving them more information to make a decision. And that's why this is such an interesting topic. How do you prove what's dark and what's not? Right. If you look at a brand, you mentioned, well, I've had experiences with Amazon. I trust that based on my experiences there. But if you just saw that on some random new e-Comm site that you've never been to before, how do you trust that for sure. How do you know for sure that, that's the reality?
Ryan:
I personally would have trouble with that. Just knowing as much as I do about e-Comm.
Jon:
Yeah. You've been burned before, right. There was a great Twitter thread, a few weeks back. It was what is one thing about industry that you work in that the general public doesn't know? And this falls under for e-Commerce that I saw somebody posted, well, I run an e-Commerce brand. And we tell people our products are selling out, when they're not. I was like, okay, well, there you go. That's a dark pattern, right?
Ryan:
Yeah. Happens often.
Ryan:
Obviously we don't like them. And I would believe they're hurting brands to a degree, but I bet you probably have some data about how does some of these products that you've seen actually do opposite of what this business owner probably intended for it to do, this countdown timer or, Hey, everybody's buying this all over the world. You need to buy now.
Jon:
Right.
Ryan:
Do you see it actually hurting the conversion rate?
Jon:
Well, I will tell you this, first of all, does it work for the initial conversion? Sometimes, perhaps, right? It might, probably not as well as people think, because if you have to get to that level to get people to buy, you probably have other systemic issues that you need to solve. A product issue, a pricing issue, a brand trust issue, right? There's a lot of other things that you should work on solving instead of trying to take the shortcut. So let's say you get that original purchase, right. Then the person comes back to buy again and they notice that, okay, well now I've got another countdown timer, or maybe it happens where like your wife, you wait that timer out every time. And you know, it's not happy now you trust that brand a little less, right? So I would say that on the first purchase, it might work, but for the longer term customer lifetime value growth, and maybe a brand perception angle, no, it's not going to work. I argue that it's going to hurt you more in the longterm.
Ryan:
Yeah, I guess an argument could be made based on that. But if you only get one sale ever you're selling mattresses, you don't care if they ever come back.
Jon:
Boom. That's a great example, right? A mattress store, you go to any mattress store. They're always having the best sale ever, always. And you walk into a mattress store, I guarantee you, you're not going to pay the price that's listed there. You can talk them down because they're going to give you a price that is just a random price. And you're going to be able to go in and just say, okay, well, last week it was this other price or, Hey, well, what if I give you a $100 less? And they're probably be like, okay. Yeah, that's true. If the goal is to get that first sale and that's it at all costs, and you're never going to sell to them again. And you just don't care about your brand over the longer term of, with that customer or even your reputation perhaps. Then I would argue sure. Have at it. Still, not ethical or moral in my point of view. But if you don't want to grow a sustainable brand and revenue, then have at it.
Ryan:
Yeah. And I would argue though, that even if that is unethical, not great, your business won't be around anyway, because people are going to see through it more and more, I think. And then the marketing costs of getting traffic to your site, necessitates at this point, a lifetime value on a customer.
Jon:
Right.
Ryan:
If you're not playing the lifetime value game in e-Commerce, I don't think you're going to be hearing from me and Jon in a couple of years. Because you won't be in commerce at the end of the day. You've got to have that. No matter if you're a retailer or if you're a brand that's selling through retailers and on your own site, you have to have a plan for selling to that customer multiple times in the future.
Jon:
Right, right.
Ryan:
Building trust, obviously we focus on that on both of our ends of marketing constantly and dark patterns can interrupt that even if it's short-term creates commercial rate increase, but are there some areas in this that you say are valuable on both of those counts? Like increases conversion rates and while some people might think this is maybe in that space, it actually does good as far as building the lifetime value as well.
Jon:
Well, I would say that if your intent is to put up a barrier for the consumer, that there's no positive, they can come of that in my point of view, right? People are at your site because they're there to complete a task, right. They think that your product or service can help them complete that task. And now if you are trying to actively prevent them from completing the task, they want to complete only because you want them to complete the tasks you want them to do. There's no positive that's going to come out of that. Right. For instance, you're in a checkout and the default check is yes, subscribe email list, right. How many times do people just leave that checked, right. Or you use confusing language check here to not receive our emails lists each week.
Ryan:
I love that example of yours. Like, wait, what do I... Is it checked?
Jon:
Exactly. Yeah. All of that stuff is where I end up getting really, really frustrated. And when I see that stuff often, quite honestly, I choose not to work with that brand. I just say we're not a good fit because our mission to remove all of these bad online experiences is not going to be further long by working with them because they don't really want to help the consumer. Right. Maybe it's a mistake if there's one of them or maybe they got some bad advice at some point, if it's just one thing that's happening, or they using an app that makes it too easy to do that. Like one of those purchase apps you were talking about that come up out of the corner and telling you that somebody purchased recently, but they didn't.
But I would say, at that point there's really not anything I can do to change the ethics of that company. And that's, I think what this really comes down to. And there's too many brands out there that want to help consumers and do the right thing that they don't... We don't need to work with the brands who are only just trying to use psychology to trick people into purchasing.
Ryan:
Yeah. I think both of us have been as long enough. We know there's a lot of people in our industry that loves selling some snake oil and there are a lot of them giving bad advice and I come across constantly. So that's why my mission's probably not as holistic or maybe pretty as yours. I'll say mine is like, I just want to put all my competitors out of business that are selling snake oil and then sell [crosstalk 00:17:04] behind me.
Jon:
Exactly.
Ryan:
Save e-Comm brands from stupid advice.
Jon:
Hey, that's a good moral lesson in that though. Right? Just making it happen. Right. And I think the reality is, is you guys have won it Logical Position, and you've gotten as big as you have because of the way you treat people and handle these accounts. Right. You would never be serving 6,000 clients if you tried all these tricks because there would be a handful of people out there who would be okay with it. But the vast majority of brands are good. And I wholeheartedly believe that, but unfortunately, what do they say? That one bad Apple spoils the whole bunch. Is that the phrase?
Ryan:
Yeah. At least it does on my phone.
Jon:
Yeah. I've been apple picking once when I was a kid maybe, but I can't claim to have much farm experience.
Ryan:
So, just as in most things in business, as long as you filter through some type of lens that says, is this something I would be comfortable with my mom getting or being presented with like, Hey, if I'm lying that somebody is checking out and there's an app for that. Why on earth would it make sense for me to put it on there? If I know that, Hey, this might convince my mom to buy something she doesn't need and be a good human at the end of the day. If you do that as a business owner with an e-Comm site, you're not going to be putting these things on there to do this. And hopefully we're going to help you put your competitors out of business who are trying to do those things.
Jon:
Well, I think that's a great lens to put this through the mom test, right. Be thinking about this. If you are doing something that you wouldn't want done to your mom. Then don't do it. Right. And I think that, that's a really good way to look at this. If it would trick your mom into doing something that she really didn't want to do, then just get rid of it. Would you want your mom automatically opting into this privacy statement or would you want your mom to automatically get these emails? And you know she'd be frustrated if she just wants to purchase a product. And all of a sudden was getting marketing emails every day. Or if she got tricked into doing an upsell on a product, because it was default added to the cart, the highest, most expensive shipping option was chosen when there were way cheaper options.
There's a lot of things like that that happen all the time. And the problem is, it's really something that would frustrate most people. But I think I see it more than probably the casual online shopper, but I also have [inaudible 00:19:40] and obligation to resolve those problems when I see them as much as possible.
Ryan:
Yeah. And if you do convert optimization, right, you don't need them.
Jon:
Right.
Ryan:
And that's the crazy thing. You don't need gimmicks, if you've got a solid business, good products, and you've worked with Jon, or if you're not quite to Jon's level, you're doing just good things at the end of the day. And I think the example of shipping is a phenomenal one that I didn't even think about until you said it that as a business owner, you're like, Hey, shipping, we make margin on this shipping or not this shipping. And we have free shipping here or not, but you can just check this one because it just makes sense maybe from a business perspective where is, we need more margin here because we're giving it up here. But at the end of the day, if you just do what is right, that you would want done to you, you've got that potential for customer lifetime value.
Jon:
Right.
Ryan:
And that's where your profit can come from.
Jon:
Yeah. I really like your approach of, if you've wouldn't do it to your mom, don't do it on your set. I think that's great. I wholeheartedly believe in that. And I think all of these things would fall under that. Right. Would you really want to do face fake scarcity and make your mom believe there's only one item left when there's not?
Ryan:
I'll tell you your mom, she's an idiot that she doesn't want to save money. I know my mom wants to save money, believe me. I'm not going to call her an idiot for not-
Jon:
Exactly. She doesn't want your emails. That's why she's clicking no. But...
Ryan:
Yep.
Jon:
Yeah. Well, I think this has been great conversation though.
Ryan:
Yeah. Me too. So is there anything anybody needs to know that we haven't touched on when it comes to dark patterns or things you can or might do to your site even by accident that you just want to be aware of?
Jon:
Yeah. I would think the first thing you should do when you add any app from the Shopify app store or any of those is give it a good look. Don't just use it because you see a competitor using it. Don't just assume they have positive intent here, go install it and then really dig in. Do some user testing on it, get understanding from consumers. Is it really being helpful for them or is it causing a another barrier in their road to conversion? And if it is ask yourself, am I putting up that barrier because it's better for me, or am I putting up that barrier unnecessarily? And it's actually making it hard for them to complete the purchase, which is what you ultimately want. And I have yet to hear an example that fits into both of those. Again, it's either black or white, it's either white hat or black hat, and there's really nothing in between that I can find. And if somebody listening to this has a great example of that. Please let me know. I would love to have some good examples of that.
Ryan:
Put it on LinkedIn, share it with Jon, so we can all see.
Jon:
Yeah. Tag Ryan and I.
Ryan:
Well, thanks Jon. I appreciate you giving me an education and anybody else's listening for that because it's very helpful.
Jon:
Awesome. Thanks Ryan. Appreciate the conversation.
Ryan:
Thank you.
Most online businesses are hooked on traffic. It's like a drug –– they think if they just get more traffic, all their problems go away. Because traffic equals sales, right? On the surface that seems right, but Ryan is here to dig deeper, and explain why that isn’t the whole story.
TRANSCRIPT
Jon Macdonald:
There's a common saying that there are only three ways to increase the revenue of an online business. You get more people to visit your site while keeping your conversion rate the same, or you can sell to more people who are visiting, thus increasing the average order value. Or you can convert more of those visitors coming to your site into customers. There is a reason that more traffic is first on that list. It's where most e-commerce brands focus because usually they can throw more money at ads and see traffic increase. So it's the easy button for them. But most online businesses are also hooked on traffic. It's like a drug. They think that if they just get more traffic, that all of their problems are going to go away because traffic equals sales, right? But on the surface, that seems right, but my guess is that if we dig deeper, that just isn't the whole story. It's safe to say that everyone wants more traffic, but is all traffic good traffic? Today that's what we're going to find out. Ryan, I'm interested to get your point of view on this as always.
Ryan Garrow:
I'm excited to touch on this one because it comes up in 2020 more often than I thought it would be. And I think it's unfortunate, but it's also nice because I get to help redirect thoughts and how people are coming to that conclusion. But it's always surprising when companies come to me and they're like, we just need more traffic, go find traffic. Interesting. Okay. Let's dig into that.
Jon Macdonald:
It should be fun. Okay. Look having optimized websites for conversions for a decade plus now, I think I know the answer to this, but let's just start high level. Is all traffic, good traffic?
Ryan Garrow:
Hopefully most people in organizations listening to our podcast and they've gotten this far down the road already know that not all traffic is good traffic, and it's not all the same. There's different purposes, for different types of traffic, different purposes for driving traffic to different parts of the page. So, no, it's not all the same. I find a commonality, and this is probably something that's been consistent for a very long period of time. That's why it stays consistent. But companies that have investors or they're chasing investors are constantly talking about site traffic.
They fall into that first point you made I think all the time like. The site is going to convert traffic. We already know that. All traffic on the internet converts at 2%. that's a metric that's been thrown out for, I don't even know how long. I even use it sometimes just to give people a ballpark. Here's what you're going to pay for costs. 50 clicks gets you a sale. At least that's a barometer to start with and most people will be like yeah, 2%, I've heard that number before. When in reality, you know this 2% could be great and 2% could be terrible.
Jon Macdonald:
Right. It's all relative.
Ryan Garrow:
It is. But they say sites are going to convert at this rate. All we need is traffic. Please go get us traffic. I'm always confused. Well, my kids probably get on my phone and click on ads so that's tactically traffic, but I'm pretty sure you don't want my three year old on your site when you're trying to sell something to me. So not all traffic is good traffic, or the same quality.
Jon Macdonald:
That's an interesting approach. It's almost like, I don't want to blame everything on Facebook, but it's similar to their business model where it was just, let's just get as much traffic as possible and then we'll monetize that traffic. But when you're an e-commerce business, you're not selling ads on your site, right? You're trying to sell product. You want qualified traffic, not just eyeballs that can increase your advertising rates.
Ryan Garrow:
Yeah. I was trying to rack my brain going into this. Is there a space in the e-comm world where just high traffic numbers helps and I couldn't come up with an example. On Amazon, you can combine organic and paid and that helps cause you're driving all kinds of ranking increases. On Google, they're separate. Bing, they're separate. But in no scenario in the e-comm world, could I figure out where just a bunch of traffic would be beneficial to me. Maybe there's some out there, but maybe there's different goals that I'm not aware of in the e-commerce world where generally you want to sell more stuff.
Jon Macdonald:
Yeah. And it's interesting. I was just having this conversation with our director of marketing at The Good today about our site traffic. We've grown that real steadily and it's a point of pride for us over the years, but we're very consistent with the content and trying to drive traffic. But we were talking about a competitor had posted on LinkedIn today about how much traffic they're getting and how proud they are. And I was like, man, that's like, two or three X what our traffic is. And I know that competitor is a lot smaller than us. So I was like, okay, all traffic is not qualified traffic. If we're not getting qualified traffic, they could be sending your three-year-old to their site and it's not going to matter. They're not going to have more business from that. That's proof right there that it's not the same.
Ryan Garrow:
Yeah. It takes no skills to find people to come to your site. Anybody can do that. You want to pay me some money, I will get traffic to your site at a cheap cost, but it's not going to be anything relevant. Anybody can put a simple display ad on. A great one would be mobile apps. That's a display setting on Google. They have a massive network of mobile things. If you're running some display, a remarketing and you haven't eliminated the flashlight app on Google Display, that person that developed that app has made probably seven figures and Google knows numbers and nobody at Google has been willing to tell me, but it is a significant number of flashlight app clicks. You have an app to click on a flashlight.
Well, I don't know why you would even have that app anymore, but the number of people that have it and are using it and accidentally clicking ads is astronomical and kudos to that guy. It was just probably one of the greatest inventions of the last 10 years specifically for money making. It's the simplest app, I'd go into the phone, open the flashlight app, and click ads accidentally, and I get paid. So traffic is easy, but if you're getting a bunch of traffic that spends less than one second on your site, what's the point? They didn't intend to come to your site, but you technically go into analytics, have a lot of sessions and a lot of users. If you have an unsophisticated investor, I guess, that only they want to see is you had 1 million visitors to your site last week. Yeah. Guess what? I paid $10,000 for it and I got zero out of it. But yeah, I got a million visitors. not going to any good.
Jon Macdonald:
Right. So ROAS is really important here. That return on the ad spend is really the metric you should be looking for?
Ryan Garrow:
I think it is. I've talked a lot of companies recently that are launching and it's an important for them to get eyeballs when you're launching, even though, you know you're probably not going to get some conversion out of it. But you want some metric that you can track that says that you're getting the right eyeball. And so there's a beauty brand that's launching that's going to be a very high end, very, very high end, very exclusive. We're talking like the Oprahs, the Michelle Obamas, that level. The founder was talking to me about how they were going to get traffic. And I said, you know what, I can get it for you, but it's not going to be traffic that's going to be valuable based on your price point and what you're trying to accomplish and exclusivity. You're basically going to come to us and we could spend money for you, but you're going to get almost zero.
If you're expecting to be able to spend at a return, not good. But you need to be able to say, all right, we're trying to figure out who this product relates to. And who's at least showing some interest and what are their demographics look like? Because we go in and we have an idea and so even if they don't buy, we know that women in San Francisco, in New York are spending, and I'm making this up, a minute and a half on the site. Maybe men in West, Texas are coming to the site and spending three seconds on the site. Okay. Well, great. We've at least seen something we can decide what is more or less valuable in that traffic and eliminate traffic that is most likely less valuable and try to enhance what is valuable. The wonderful thing about e-commerce is that we can track everything.
It's phenomenal. That's what I love about e-commerce. There is so much we can track. You probably realize this too, that the more we track, the more we realize we can't track. The more I know, the more I realize, I just don't know. It's crazy, but we are light years beyond what we were even 10, 15 years ago, as far as what we can track and the value of that. If you can track it, you can improve it and you probably should be. So not looking at all your traffic as being equal.
Jon Macdonald:
How does a brand see sources of traffic that are not converting then?
Ryan Garrow:
They're probably just mad at their agency that's sending the traffic or they're mad at their CRO company where they didn't think that's actually not the problem. It's different depending on the person or group leading that company. We'll have some companies that come and see traffic that's not converting. And they're like, okay, well we have a product problem, not a traffic problem. Because we're getting the eyeballs, now we just have to figure out why the product isn't selling to them or find the product their selling. Okay, well we know our product. The product is good. We're getting the wrong traffic. So let's look at the audience, let's look at a different way of getting traffic, but the right audience of traffic. Whether that's from a search perspective or whether that's from a demographic, geographic perspective. I would generally say that it's better to focus on the type of traffic or it's easier, at least for businesses, I think to focus on the type of traffic than it is changing their product mix.
It really depends on where you're at in the business cycle. What you're willing to do or what you're trying to do. My brand, for example, on joyful dirt. We'll send traffic and I know all of the metrics around our conversion rates, traffic coming from social versus coming from being, versus coming from Google. Our Amazon traffic is in another bucket and the search engines are pretty easy. I know that if they're looking for houseplant food, I know what product they're generally going to see, where they're going to land and what I can expect from a conversion rate and return on ad spend. But if we're releasing a new product, like we're going to come out with a vegan blend because we found out from social and interacting with people there that, Hey, we really need a vegan blend because it turns out plants really like bone meal, because it's an organic matter that plants thrive on.
We've had to test and measure, come up with some new product around vegan. If I happen to target a bunch of health and wellness people on social, that does encapsulate a large portion of vegans, generally speaking. And that traffic doesn't convert as well. It's not necessarily a traffic problem because we still do really well with that group of people. But it's partially because we didn't have a product that solved that problem. So I had to go listen to that group of people and honestly have our social manager go out and like, okay, we're getting people in this industry coming to us.
Why isn't it working? There were just random comments we could see in the feed and on our posts that were like, Hey, we want a vegan. We want vegan. We want vegan. So we changed the product mix or added to it, I guess. I can eliminate on Google people looking for vegan because I know I don't have that product yet. And so that becomes, I can eliminate the traffic there, but if I'm going to get it because they're in the same bucket, I don't know how, and maybe it's because I'm not as good on a socials as others. I don't necessarily know how I'd completely eliminate all people that would be interested in a vegan plant food.
Jon Macdonald:
There's a difference between search traffic and shopping traffic. There's people out there who, if you're not eliminating these audiences, you're just going to be wasting your money. But there's also people who are landing on a category page versus perhaps a product detail page. Those who are ready to buy and it's that intent to have somebody who's ready to buy versus those who are just browsing.
Ryan Garrow:
Yeah. Sure. All of these traffic sources when they're showing intent. I kind of break it down into, If I'm looking at a funnel almost all the time when I'm talking to people in my head. And you've got at the bottom of the funnel is people that are searching for your brand. They know you, they're going to come buy. Then you have remarketing on top of that. Then you have your search and your shopping of non-brand stuff. And then generally above that gets bucketed, social and display. Because people on social generally are not going onto social and searching for your product on a social network. They're not for that. They're for connecting with people, posting political opinions in fact has been very popular on social sites for some reason. When you're putting an ad in front of them, you're kind of interrupting and trying to convince them to break away from whatever they were doing on social.
Whereas, on the search engines, they're trying to find you, or they're trying to find your product or service. You're capturing them at the point where they're actually showing some intent. Facebook, I don't know if you guys have all seen the social dilemma, but Facebook has a lot of data. If you didn't know that already Facebook has creepy data. It makes your experience on social better, which is good and I appreciate that point. And they've got a lot of signals that say is this person in the position to probably buy your product? And they actually have some settings within social ads that you can say, Hey, there's a high intent to buy. Let's show them an ad. Facebook wants to make money from me as an advertiser so they know I'm going to need to see sales to continue advertising on Facebook and Instagram.
All that to say, there's some good traffic there from social, but it's just going to be very different from Google. If we go on the Google path it breaks into two streams where you have text ads and shopping ads. And shopping ads, pretty simple, most people understand that if you click a shopping ad, you land on that specific product. On a text ad, you can land them wherever you want. I can land that person on a homepage, on a category page or on a product page. If I have a choice as an e-commerce brand, almost 100% of the time, I want to land a text ad on a category page because the conversion rates are better. If somebody is looking for again, I'll think about if somebody does a search for plant food, and at Joyful Dirt, we have four varieties right now on our website of plant food.
I don't necessarily know which one they're looking for when they say just plant food. On a shopping ad, they're going to land on all purpose or succulent or tomato and herb or houseplant. If they were looking for an herb plant food and they land on my house plant, either they're going to keep searching my site or they're going to bounce back to Google. The conversion rate generally is lower on shopping than it is if you went from a text ad to a category page that had all of my plant food on there. It's very easy to see, Oh, he's got four plant foods, okay, this is great. He's always got a one pound or he's also got a mix and match three pack. There's just more options on a category page. Generally, there is more value there and if I could land some shopping ads from those general terms on a category page, I'd be a pretty happy camper.
Hopefully Google is listening and they're going to start testing that. Being able to land different terms at different points in the funnel on my site. But then even beyond that, once you've got that traffic, a certain percentage is going to convert, whatever that happens to be on your site, your return is what it is with those, and then on your ad spend. But then you have remarketing and then you can go chase the people that didn't convert and bring them back. So you have a different source of traffic of people that have already been to your site. Even that traffic is going to convert at different rates. What a lot of people unfortunately don't do on remarketing, is segment their remarketing by category page visitors, product page, visitors, shopping cart abandoners. A lot of them have a shopping cart abandonment like RLSA list, but even having those buckets in your remarketing lists, you're going to be bidding different on them.
Because as you move from shopping cart abandoners up to product page visitors, up to category visitors up to homepage visitors. Your conversion rate on remarketing goes down as you move up that. There's less intent to purchase from you. The less depth they had on the site closer to purchase. It's fascinating data that allows you to really start increasing return or focusing on the best types of traffic to your site. I think you want as many levers as possible on Google ads, Microsoft ads now, generally speaking. That's one reason I don't often recommend the smart shopping campaigns because you lose a lot of that data that allows you to push and pull a lot of those levers within your site or within even the shopping campaigns. Because it includes your remarketing, it includes some display and Gmail things in there as well. And you can't separate out that brand versus non-brand. So I would even say smart shopping traffic is a much different type of traffic than a regular shopping campaign traffic.
Jon Macdonald:
Interesting. I kept thinking as you were going through that, which is all really helpful that, consumers, again going back to this, consumers are really only at your site for two reasons. They're there to research and understand if your product or service can solve their pain or need. That's really the first step. And if you can't do that, they are going to bounce. That's where the different types of really come in, where are they in that research process? Are they pretty deep into that? And then once they've determined that you can help them, and that's where that category page might happen. Where it's versus just one product. Once they see that, okay, I landed on the house plant, but I really want the tomato fertilizer. Then it goes a little bit deeper of, okay, now they're ready to convert. You just have to make that easy to do. That different types of traffic there definitely, definitely makes sense to me about why people would convert more coming into a category page versus a individual product.
Ryan Garrow:
The crazy thing about what we do is that you're never going to get to a spot where you're done. You'll never have a conversion rate that was good enough. You'll never have traffic on your site that's qualified enough. One thing is you're never going to get a 100% of your traffic to convert. Unless you get one click and one purchase accidentally for the entire month, you're not going to be there. Because even if people are looking for your brand plus product, you don't get a 100% conversion rate. I've never seen it at least. I'm not saying it's impossible, but I'm just saying the chances are unlikely since I've seen a lot.
Jon Macdonald:
The only way to have a 100% conversion rate I've seen is to send one visitor to your site and give them the credit card number.
Ryan Garrow:
Yep. Exactly. Hey, my wife needs to go test my site. Go test my site and buy something. Oh great. I bought something for myself, 100% conversion rate. In that little window of time. All traffic, not the same. If you're an e-commerce business, why would you not want to find qualified traffic and I guess see your traffic differently? I haven't met an e-commerce business yet that doesn't conceptually understand the sales funnel. Your job is to push people through the sales funnel on a site or through remarketing or just through general logic, that there are different places that people enter into the sales funnel. You should be looking at that sales funnel differently. And then the traffic sources beyond that, that's coming into your site. And so general display traffic, or I don't eve know how you would do it.
But if you paid for somebody to find a bunch of people in India to go click on your site, you can do that. That's one reason we have click fraud companies that protect against that because there are companies that will do that. Those are bots coming to your site. That's technically traffic. That bot is not going to buy from you. That bot is coming for information to go feed it back to the search engine, to feed it back to somebody that wants to see what's going on on your site type thing.
Jon Macdonald:
What I'm hearing from all of this today, Ryan to summarize a little bit is, it's not about traffic. It's about the quality. It's not about the number of visitors, even if you're trying to raise money, et cetera. It's really about the return on that ad spend. Then you're looking at, okay, my ROAS is pretty high. There's a good chance that I could invest a little bit of more money here and get more good traffic. But there's a point at which, do you have diminishing returns of just throwing cash at traffic of any type? You really need the scalpel that type of traffic into what's good for your brand. And then on top of that, you really need to bring the traffic into the right place so that they convert higher, like a category page versus a product detail page in most cases. Did I miss anything else here, Ryan.
Ryan Garrow:
I would say there's exceptions to every rule as well. And I also default generally in my businesses to start putting things in motion and directing it to fix it as we go. In many ways I'll just build the car as I'm driving it. I'd like to be able to direct something in motion, because I know that I'm not going to come up with the best car sitting in the garage. I might find out that I need these wheels as I'm driving. Like yeah, those are bad wheels, let's put new ones on. I understand to a degree some of the thought process of let's just start getting traffic to the site to see what they do and not a terrible idea. But like I was, again, I was talking to a client this morning that she's got a great product.
She's got a market she wants to target, but it was clear that there needed to be some improvements to the site because I would not spend my money to send traffic to that site. I don't think it's going to convert well enough. She needed to get a product builder on the site to be able to show swatches on our products because her competitors had it and she had that type of customization available on our site. It just wasn't done right. A lot of people that are investing in companies tend to want a return and they're going to be impatient. So they're like, all right, you can delay all you want in trying to get a perfect site.
But at some point you're just going to have to turn on the traffic. And that is true, but also just running that through a lens of logic, to a degree being like, okay, you know, we could send the traffic that would be appropriate, but it's not going to work yet. Let's at least get what some experts would say is a good starting point and then go and then understand that you might be paying a little bit more for quality traffic, but in the e-commerce space, quality is much better than quantity, as far as the traffic perspective.
Jon Macdonald:
Well, yes. I don't know about you, but I don't like throwing money away. If it's not quality traffic, then I'm basically throwing my money away.
Ryan Garrow:
Yep. I would agree with that. I don't know where that thinking always came from. All traffic just go to the site. It must've happened before I jumped into the industry a decade ago, but I would challenge that most of the time.
Jon Macdonald:
Yeah, well, I think an e-com entrepreneur, if you're following the general entrepreneur communities that are out there, they're all about just get eyeballs, get eyeballs, get eyeballs. But that works if you're trying to build some type of platform where you eventually want to monetize that platform, but that's not the goal immediately. The goal immediately is to get awareness, et cetera. That's where I think in my opinion, that might be where that comes from, but it's shortsighted for e-commerce. Right. It doesn't really work in that way. Well, Ryan this has informative as always. I appreciate the conversation. Each week we're continuing to remove some of the errant ways of thinking that are out there and the things that we hear every day that we're like, no, no, no, no, that's wrong. Don't think about it that way. Let's try to convince them otherwise. And so I'm glad we're able to do that. And hopefully we were able to convince some folks today that they need to take a step back and think about traffic a little bit differently.
Ryan Garrow:
Yeah, I hope so. Love helping people not waste money.
Jon Macdonald:
On that note, thank you, Ryan.
Ryan Garrow:
Thanks John.
It seems most brands are using email popups on their website. Today Jon dismantles this practice with passion, explaining why they're bad for everyone, and offering better alternatives.
TRANSCRIPT:
Ryan:
Jon, we've spoke together quite a few times around the country, and then recently just around the internet, since we can't leave our houses. And almost every time we talk, you ruffle quite a few feathers when you're answering questions about email pop-ups. It seems that most retailers and brands out there on their websites, they are absolutely in love with their email pop-up campaign, they think it can do no wrong. And I personally don't like them because they're just annoying and I close them immediately because I'm trying to look at something else. And, but you're distaste, some may say hate, goes a little bit deeper within this space, but so many, again, so many brands are using these. It's just making me crazy.
So, I want to talk about these and get your opinion, the backend and the numbers that are guiding your distaste for these. But even to start with, what do you think is pushing this trend and what data are these merchants seeing that's causing these email pop-ups for discounts or anything just to become the norm? If you don't have it, you're weird almost at this point.
Jon:
Brands, what they're doing is they see another successful brand they look up to have email popups and they say, "It must be working for them. We need to do this as well." It goes in line with all the little Shopify apps that are out there that just spread like wildfire overnight, and then they'd disappear just as quickly once everybody realizes they don't actually move the needle, but they saw their competitor trying it out, so they thought they showed as well. Tons of examples of that. I think that's generally what happens here, first of all. Second of all, the brands see that email is their highest revenue channel, most likely. And so, they say every time I send an email, it's like printing money. So I should collect more emails. And that sometimes even comes down from the executive level, down to that marketing manager who is needing to implement that, whether they think it's right or not.
And third, I think what happens is that brands look at a success metric of how many people do we have on our email list. And they see these pop-ups collect email addresses. And so, they assume they are working. And I guess the goal that they usually have is just to collect email addresses at all costs, right? And they're thinking, "If I get someone on my email list, I can then continue to market to them and the rest will fall into line." And that just is a huge problem. It's, to me, it's the wrong way to be thinking about it. And after optimizing sites for 11 years, statistically, it's not accurate.
Ryan:
Being an e-commerce brand myself, I know that if my email list goes from 10,000 to 20,000, I'm probably making more money from email. So, where are brands missing the logic behind these pop-ups and not equating to larger email database equals more revenue from emails every time I send one?
Jon:
Yeah. I think, I don't have an issue with collecting email addresses. As I said, it should be, and looking at 10 decades of content and data around emails, it definitely can be your highest revenue channel. The problem I have with is the method of collecting, right? So, let's just start with that. I mean, we could, there's lots of directions, we'll, I'm sure we'll go today about the method of doing it around discounts and everything else, but let's just talk about the pop-up form in itself. And what I mean by that is just there are multiple ways to collect email addresses. You can start with those who have ordered and how you have the actual customer contact information that you own, right? If you doing an owned to sale, as opposed to something like an Amazon, then you have that information, people you can remarket to and continue to sell to.
However, if you just put a pop-up on your site versus maybe even baking a form into the page, right? Where customers who are actually interested, will scroll down to your footer and they'll enter their information because they're super interested. Right? I would almost encourage anyone listening to this to set a separate form up in your footer and tag people who fill that form out as higher intent, because they actually are interested in what you had to say. Now, the problem with a pop-up, let's just talk about straight up pop up, not an exit intent, right?
Ryan:
So, you're categorizing your email pops up into different buckets?
Jon:
Yes. Yes. There's different types. And I think that's important here because the one that I want to eliminate from the internet is just the pop-up. As soon as I come to a site, or maybe as soon as I start scrolling or even the timed ones that come up within a couple of seconds of loading the page, those are the ones I want to eliminate. Now, exit intent. Let's put that in a different category. I'm not as opposed to those. But what I'm talking about here is the disruption to the consumer experience, the interruption factor as well. Think of your site like a retail store. Now I know your wife has a retail store, right? If I walk into her store and she jumped out at me and said, "Here's a clipboard, give me your email address." I'm going to probably have a negative reaction to that. Right?
Ryan:
At least she's cute. That does help.
Jon:
Well, Hey.
Ryan:
Popups, aren't as cute.
Jon:
Hey, you know what I mean? You could make, you could put a nice looking picture on a pop-up, but that still doesn't change the fact that I'm there because I have a problem that I'm looking to solve. And I'm at the website because I think that their product or service can solve my pain or need. And all of a sudden now, before I know anything about the brand, something led me there, was it I clicked on an ad or a Google search or someone told me about it, so I have idea that they can help me solve my pain or need. But then all of a sudden I just get there, I still don't know about the value proposition of the brand, I don't know much about their products yet, but then I'm getting hit up right away being asked to give them information.
And I think that that's just disruptive and I can promise you every test we've run where we've eliminated that pop-up conversion rates have gone up on the site and sales and revenue. Now yes, you will collect less email addresses. But I argue that's not a bad thing in this case, with this type of pop-up. And the reason is a couple of faults. So, first of all, the email addresses you're going to collect out of those pop-ups are going to be very, I would argue they're not going to be very effective, right? Because you're getting a consumer who is entering their email address into that pop-up specifically to get rid of the pop-up in a lot of cases, because they... This goes into more things like negative intent shaming, because maybe in that popup, it's a pretty common trend now for a company to say something like, "No, I don't like discounts and offers."
Ryan:
Gosh, I hate that. I had that happen a couple of days ago. And I was like, "Of course I like discounts. I'm not an idiot, but I just don't like you telling me that I don't like discounts."
Jon:
Right. You're you're hurting the brand, right? And you're hurting your customer experience and that's damaged that you now have to repair. So, within the first five seconds of getting into the website, you're already have dug yourself a hole you have to get out.
Ryan:
Yeah. And I think brands are getting kind of like, "Ooh, we're kind of that little unique, give it to the man brand. And we're going to use that humor." [crosstalk 00:07:34] That doesn't necessarily come through because I actually don't know you yet. And maybe that's my first... I don't know that that's the type of brand you are. I was looking for a pair of board shorts. And now all of a sudden you're telling me I'm an idiot before I even know that you're, that's the voice of your brand.
Jon:
Exactly. Okay. This is another great example of real world for this, right? Popups are just like those people who canvas on the street corner, who come up and you're just trying to walk by and get to your next location, right? You're trying to get some job done in your life, going to the coffee shop or whatever it might be, you have a meeting you're walking to. And Greenpeace, not just to pick on Greenpeace, but they're out all over in Portland. They run up to you with a clipboard and they say, "Hi, can we chat for a minute?" And it's like, "No, I'm trying to get something done. This is not a good time for me." And then they follow you, "Well, did you know that this is happening with the environment? And this is happening." And it's like, "Yeah. You know what? That might still be important to me, but now's not a good time." And they're like, "That's fine. Just give me your contact information. We'll follow up with you." And it's like, "No, no, no. I don't know who you are."
Right? I don't want to just give some random person my contact information. And then what are you doing with that contact information? So, I think the problem is, is that marketers stop having empathy for what the consumer is going through on the other side of the screen, and they just feel like it's okay because they can't see that person to do these really poor consumer experience activities on their site. And that's what I try to fight against with this. And unfortunately pop-ups is the worst example of this on the internet. And so, that's why I ended up fighting against it.
Ryan:
Oh yeah. And it's people like me that are probably helping give them bad numbers since my computer saves the email address na@na.com for all of my form fills that I don't want them to email me on and I'm like, "Yeah. Yeah, here you go. Have that."
Jon:
Well, that's exactly it. So, now let's talk about the data that a marketer's going to get back out of this pop-up, right. So, a new site pop-up, you just came to this, a new visitor pop-up I should say. I get a form. Sometimes it just says, "Give me your info and you can stay up to date on the latest product releases, et cetera." So maybe they're not really dangling a carrot there. Right? I can't figure out how to close it. Maybe there's no close button and it takes over the entire screen and it's really annoying. So what happens? You put in an email address that like na@na.com, right? So now the brand has pretty muddy CRM, right? Their customer data, their marketing data is pretty horrible.
Now what's going to happen there is, they're going to start using all that data. Some will clean it, but I guarantee you most don't based on our experience and what happens is they're going to use those email addresses that are uncleaned. They're going to start sending them through their email platform. And then they're going to get a ton of bounces, a ton of spam complaints for those who might be okay, it might be good, or they're going to get a bunch of generic Gmails that never get opened. And I promise you one thing that's happening with your emails and large providers like Gmail, MSN, et cetera, is they're tracking when you send an email out to a thousand people, Gmail knows that at that same email is going out to a thousand people on their platform, and they're looking to see how many people are opening and clicking on that. And they're tracking that data to make sure that spam doesn't get through. And if nobody's opening it, nobody's clicking it, it's more likely to end up in that dreaded promotions folder or just directly into spam. [crosstalk 00:11:07].
And that's not even without people who are actually seeing that email and marking it as spam, which is only going to hurt your deliverability. So, over time what's happening is the quality of your email list is going way down only because of how you collected that as emails and the methodology you went through. And so, what happens then is you've turned what should be your highest revenue generating channel into something that is no longer producing at the level it used to, even though you have more email addresses on it.
Ryan:
Got it. Okay. That makes a lot of sense there. And you can kind of send yourself in a downward spiral. But I can also see the logic behind getting to that point. If logic states that me as a brand or a website, I'm willing to break even on my first order from Google ads when I'm buying traffic to my site, and then if I don't have an email up and I put it on, I'm like, "Oh, 10% discount. That's only going to increase people's conversion rates because I'm giving 10% off. But then these are people that maybe weren't going to buy, but now are because people that were going to buy, maybe they would anyway without the discount." So, I understand that logic to a degree, but how do you see that logic break down when somebody actually starts going through with that execution?
Jon:
Well, so now we're combining two negatives. We're taking an email pop-up that's disruptive and we're making it a discount. Now what's happening is same thing. As you said earlier, I just got to the brand, I don't know anything about the brand or their value proposition, et cetera, but now you want my contact information, and also you're already giving me a discount. Now, why are you offering a discount to somebody who just got to your site? They haven't exhibited any signs of intent to buy just yet, other than showing up at your door and you're giving up precious margin and you're creating a discount brand right away. Where it's the first thing I know about this brand is, they're going to give me a 10% off for giving me an email address. It's like, "Well, okay." And what's going to happen here is a couple of things.
One is, you're creating a discount customer who sees your brand as a discount brand forever, just because that's the first impression they have. And the problem with this is you've done it just to collect an email address. Well guess what? What's going to happen now is that person's going to put in their junk email address again, the one they use just for discounts and pop-ups, right?
Ryan:
Everybody's got one of those.
Jon:
Exactly. We all use Gmail for that, probably. Right. So, then what happens from there? Well, perhaps they might open the email, maybe not, more likely not. They just wanted that discount code. And the worst offenders in these popups are the ones that, where they collect the email address without any verification, they don't email you the discount code. They just show it in the box in the pop-up. So, they just give it to you right away. Well, then that's even worse because you're putting in whatever email address you want and you're still going to get the discount.
The other thing here is that, now every time I come back to buy, I'm going to want that discount. And I know I don't need to pay retail. I know that you're going to offer 10%. So, what am I going to do? I'm going to open your website in incognito, and I'm going to give you another fake email address just to get another discount code or another junk email address, or I'm going to do that Gmail trick, where you can put a plus sign and then anything you want after the plus sign. So, it's like Jon+, whatever I want @gmail.com and it ignores anything with the plus sign and after that.
Ryan:
That I did not know.
Jon:
So, you can create [crosstalk 00:14:31] a million email addresses just out of your one Gmail address. And most email platforms allow you to use a plus sign because it's a valid email character. And so, it's really interesting when we start working with brands, one of the first things we do when they put up a fight about removing their pop-ups, or at least running a test around it, is we go into their email database and check for the plus sign and see how many emails have a plus sign in it. And most of it it's like, plus spam is what people put, right? Or they'll even get more tricky. People who are really, want to know if you're selling their email address, or if you're giving it away or if you're abusing them and they do plus in the brand name.
And then it's like if you sell that email address or share with a partner, do anything else, they now know where that came from, and they're even more upset with you when that happens. So, I think it's really important here that people, brands really need to think about not discounting because you're basically taking what is a bad consumer experience and you're making that a bad experience for your brand too. And you're just doing that to collect an email address. And now you've created a discount customer right up front, who's forever going to look at your brand as a discount brand. And that's a really hard hole to dig out of in the future.
Ryan:
Well, and I think a lot of brands don't give consumers enough credit, and I think people pick it up pretty quick, where they know the strategies to try to get discounts. Especially people like me that just because I can, I'm not going to give up 10% of my money to a brand just because I like them. If I can keep 10% in my pocket, I will, even if I can afford the full price, which generally is the case, if I'm shopping for it. And so, my wife knows that I'm the cheap one in the relationship. And if she's going to go buy something, she knows that if she can tell me she bought something, but got a discount, and I'm like, I'm much less likely to put up a fight about that. And so she knows the strategy. It's like, "Okay, all I need to do on my computer is start to move my cursor towards the navigation bar and boom, exit intent pop up."
Or she even tells me now, she'll just, if she's interested in something, but it's not a need, it's a more of a want, she'll go put things in shopping carts, and then just wait a few days. She's like, "I don't need it right now. They're not going to run out of inventory. I'm going to go set up a shopping cart, I don't care. See if they sent me a discount." [crosstalk 00:17:29]. Almost all of them do. I mean, just people figure it out. It's not complicated. Marketers, I think sometimes think too much of themselves like, "Oh, we're going to do this. And we're going to trick all these people into spending so much money with us." And I'm like, "Nah."
Jon:
Well, I think that's exactly where having empathy for the consumer really comes in, right? And just saying, "If you, if this is happening to you, what's the experience you want to have?" And I think this goes back to a whole nother episode we can record on discounting and why that's a challenge. I mean, we just did, you and I just did a webinar yesterday and a big portion of that was about discounting with one of our partners. And I thought it was really interesting because so many brands are discounting. And when you think about this, you could be doing so many things that are and offer and not a straight percentage or dollar off discount. And I'm okay with doing an offer in an email. And there's a lot of other ways to collect email addresses that tie in with offers, right?
I mean, you could do "Coming soon, get on the list to be first notified," and that's providing value for an email address that they wouldn't get unless they gave you the email address. But it's also valuable to them. You could do, something where it's like, "Hey, if you sign up for our email list in checkout, you get free shipping." Right? So, you're giving some value. It's not a straight dollar or percentage off discount. You're doing an offer and there's scarcity. You could say, "Hey, these products sell out. It's sold out right now. If you sign up for this list, you'll be notified." And we have a brand we work with, a really high end camping brand, that a lot of their products, they sell out before they've even landed in the United States for manufacturing, where they just have a running list on their product detail pages that say, "Hey, this product is sold out. We have a new product coming in soon, get on the list, we'll notify you. And it will be presale before it goes up on the site."
Now there's a lot of value to a consumer who wants a product and is interested in that and giving their email address for that purpose. And it's a much better way to collect an email address over offering a discount. So, now they're selling these products before they've even hit the site. They're selling them at 100% margin or, well, not 100% margin, but without draining their margin by discount, right?
Ryan:
Or marketing.
Jon:
Or marketing costs. [crosstalk 00:19:54]. Yeah. What? Fractions of a penny to send that email. So, I think it's really interesting that brands immediately go to this discount right upfront and present that discount through such a disruptive manner that they have to use an email pop-up.
Ryan:
I think it's just, I mean, it's the easy button that they're thinking about. They're not taking that next step and actually having conversations with people, strategizing what could my options be? Because even me, having you as a friend and a business partner and various things, I come to you and I'm like, "Okay, Jon, I know you don't like discounts, but I know that there's value in somehow doing something like that, that maybe is not a discount, that keeps me from being a discount brand." And you've got phenomenal ideas for ... Now, we should probably do one, a thing on that. But you don't have to give a discount to give a discount type thing, which is a difficult thing. You have to really think through it.
Jon:
Right. Yeah. And you got to be creative with the offer, right? And sometimes people, like you said, it's the easy button. There's so many Shopify apps, for instance, that do these pop-ups and do discounts. Then there's apps that are really cheap to free that will do customized discount posts for email address exchange, stuff like that. It blows my mind because they see other brands using them and they think it must work for them, so we're going to do it too. Or they just, they think discounting is the only way. And I really argued that as soon as you get into discounting, it is impossible. It's like a drug, a really bad drug. It's really hard to get off of that. You got to wean yourself off of it because now everybody is expecting and they're not going to pay retail price.
I mean, we talk about how your wife sends you to Michael's to pick up stuff on the way home. And you know that she's going to have a 50% off coupon, no matter what. And if she didn't, for whatever reason, she couldn't find one right then, or whatever, you just ask the person at the register when you're checking out, like, "Hey, what's that? What's the coupon that went out in the mail last week? Do you have it?" And they're like, "Oh yeah, it's right here. Here you go." And they just scan it [crosstalk 00:21:55].
Ryan:
Yeah. That actually happened a couple weeks ago. [crosstalk 00:00:21:58]. I was, I got in line, she was like, "I couldn't find my code. Can you just pull one up on your phone and do a search?" I'm like, "Okay, yeah. I'll figure it out."
Jon:
Exactly. So, they're a discount brand and you go to them because they're a discount brand. There's nothing wrong with that if that's how they want to do it. But I would argue that, they're never getting out of that, right? They're just going to have to slash all their prices if they want to stop doing discounts. Then what promo or offer can you run because you've got razor thin margins at that point?
Ryan:
Yep. No. And I think one of the points you hit on too, is part of that other bucket of email popups, which you don't hate, those exit intent things. And this one works phenomenally well, for me at least, with one of the clients you've worked with in the past is Nike. One of the shoe companies you're based in Oregon. And I have an affinity for Jordan 4's. I'm not a sneaker head, but that's the one shoe that I grew up always wanting and I couldn't get them because didn't have enough money for them when I was a kid. But now I can. And so, I do keep up on the releases. And so, in this case, I gave Nike all my information to avoid the FOMO, the fear of missing out scenario. And I went to Nike site today just to see what they were doing, saying, "Okay, Jon worked with them. Did they get the message when he was working with them?" And they use only exit intent, no discount.
Do you ever advocate for discount at... Well, I already know the answer. But exit intent, how should brands be looking at that? Is there anything besides FOMO or anything to do besides offering a discount that you've seen be successful?
Jon:
Well, I think that there's a lot of options that you can do in these pop-ups. But specifically in exit intent, this is where it's one of those things that you should really be looking at segmenting your audience and tailoring the message with those pop-ups. So, for you, let's think about the journey you just mentioned you went through. You were, you love Jordan 4's and you were looking at those on the site and they popped up with an exit intent and you were like, "Yeah, sure. I'll do that because I want to be the first to know when new ones are released." There's value there for you in that, right? And they knew, this is a collector shoe, if you will. And most of the people, you claim you're not a sneaker-head, but let's be honest, you probably are if you're into Jordan 4's, right?
Ryan:
Probably.
Jon:
And so, the reality here is they know that. That people who are looking at this shoe aren't discount motivated because for them it's all about having the Jordan 4, that they don't need the discount. They could sell those out, no problem without ever discounting them. And in fact, you and I living in Portland, Oregon, we're blessed that we get to go to the Nike employee store occasionally. And whether we're working with them or, somebody who does work with them is able to share a pass with us occasionally. And I can tell you that they have some Jordan's there, but it's not their top sellers. I say that because at the employee store, there's a large discount when you shop there because you get employee pricing, but they don't have their top sellers, usually, in the collectible ones, like Jordan's et cetera there, because they don't need to discount them. If you want them, you're going to just go up on the site and buy it at retail.
So, I think that too many brands skip right away to the discount when there's other value adds you could provide. And that's where, again, you got to do a little bit of thinking on that. It can't just be the easy button.
Ryan:
Okay. So, pop-ups, avoid coming to the site pop-ups. Exit intent could be worth it, but you make sure you're adding some value to that, that customer that causes them to want to give you a real email address and not necessarily just throw a discount out. So, all companies want more emails. Do you have any strategies that you've seen be successful in your experience over the past decade in the e-comm world for brands to get more emails?
Jon:
Sure. I think there are some great ways to do, I mentioned earlier, some segmenting. So, let's say you run somebody in to your site from a Google ad that has a specific message, your value prop in it, aligning that with the message that you share for an email signup, right? So, maybe they're searching for a specific item and they get to your site and it's out of stock, well, there you go, now you should do not a stock email collection. I think that the biggest mistakes I see around email forms are that they're missing some key information. The first is you really need to set expectations on this email form. What does that mean? Well, you need to tell people what they're signing up for and how often they're going to hear from you. Pretty simple.
But most brands say stuff like, "Sign up for updates." It's like, "Why do I care about updates from your brand?" Right? "I don't need more updates." Nobody needs updates. But if you me, I'll be the first to know when Jordan 4's are released, I'm in, right? That's what I'm here for. That's what I want to know. So, it's all about saying, "Okay. Well, how often are you going to hear from me?" Well, maybe it's, "I'll email you once a month." Okay. I'm okay with that. If you say, "I'm going to email you every week," I have to think twice about it, but if I really am into your brand, maybe I'm okay with that. Or maybe it's where we have special product bundles that are only for email subscribers, "Sign up and you can learn about our bundles, exclusives." Right? Things of that sort, that aren't straight up discounts.
Ryan:
Almost like a merging some of this email acquisition with your loyalty program.
Jon:
100%. That is a great way to build email is through loyalty. It's through having, whether you want to do something as complicated as a point system, or just as simple as saying, if you're on an email address, you will get access to things that people who aren't on the email address.
Ryan:
And people are willing to give you more information, generally, when you're providing value outside of discount. For example, Nike, I give them my birthday. No other company gets my birthday. [crosstalk 00:27:51]. But they're telling me I'm going to get a special reward on my birthday. And I'm like, "Cool." I like Nike. They do have some trust. They built a brand that says, "I can trust them with my data already," just because I have an affinity for them and I've been wearing Nike's for, geez, 30 years. So, there is some of that that maybe not every brand is going to be able to get to, but you can probably do some pretty solid segmentation in your customer database if you had everybody's birthday. Like, Hey, this person's 20, this person's 40, they probably need different messaging. They probably have different interests, different disposable income level.
Jon:
Yeah. Yeah. The 20 year old is aspiring to get the Jordan's. The Ryan Garrow age folks are really out there to [crosstalk 00:28:35].
Ryan:
- 22.
Jon:
Okay. Okay. If you say so. And so I think it's, now you can afford the $300 pair of Jordan's and you're excited to buy them because you've earned that right over all these years of hard work, right? And so, or those two years of hard work, if you will. But I think it's one of those things where most brands aren't even segmenting. They're just doing that really clear scatter shot, hoping to collect email addresses, just to build their list. And I just, again, that's the wrong philosophy, whole-heartedly, full stop. Popups are not the way to do that. And I just, it pains me when I see brands do that. Part of me is because our mission at The Good is, I say all the time is just to remove all the bad online experiences until only the good ones remain. And email popups are such a bad online experience. I'm on a crusade to eliminate those.
And part of that is to help brands understand what damage they're doing with these initial email pop-ups. And it's true, I don't hate them just because they get in my way as a consumer, I hate them because of what they do to the brand over time. And the experience that you're putting consumers through is really negatively affecting the brand and the brand perception. And then most brands are applying a discount on top of that, so they're kind of adding fuel to that fire of just negativity and it's really just going to hurt them.
Ryan:
And the one thing I'll leave with would be the best emails you can get are from people that have purchased from you. So, if you just got more aggressive on getting more customers through marketing or driving people to the site, those people in your email database are going to be infinitely more valuable than anybody that just wants a coupon code or signs up just to have you go away or an email pop-up. So, I would challenge a lot of brands just to say, if you're comfortable giving an additional 10% discount, so you're taking 10% off your top line for somebody, why don't you just get 10% more aggressive on your marketing and get that customer to actually buy something and get more of them and increase your market share because that's the type of emails in my database that I'm going to be in love with.
Jon:
Yeah. I mean, you mentioned right up off the top that you're happy to spend your initial margin on that first purchase to acquire the customer through Google ads or whatever advertising you would do to get them to the site, so that you can continue to market to them and go after that customer lifetime value. And that's the right way to approach this because that's sustainable. Where if you're just going to give a discount and someone's only going to purchase once, because they can't get that discount again, or maybe they just see you as a discount brand, then you're going to have a bigger issue. So, I'm all for paying to get people to purchase, but I'm not, I don't think you should do that through a discount upfront.
Ryan:
Yeah. Don't go the lazy way. If your marketing team or your agency is telling you, "Use discounts or we can't do our job." It's time to maybe look outside that.
Jon:
Yeah. Find a new marketing agency. People come to us all the time and they say, "Well, we've been doing optimization on our site." And I say, "Okay, great. Let's talk about what you've been doing." "Well, we put a pop-up on, we offer discounts and our conversion rates went up." I was like, "Well, yeah. You know what? Every house will sell at some price. Ask any realtor. And they'll just say, 'Well, we'll just keep reducing the price until it sells.'" And it's like, well, eventually you're going to sell it for less than you bought it for. And that's exactly what's going to happen with your brand too.
Ryan:
Oh, and didn't you, you have some stat around, you give a small discount, your conversion rate has to go up just some astronomical percent. What was that number?
Jon:
Yeah. Mackenzie did a bunch of research on this. They surveyed and did a bunch of research on the, it was like the top 1000 e-comm sites. And what they found was that for every 5% that you run a discount on, you have to acquire, it was like 19% in additional sales just to break even on that discount.
Ryan:
And most people are not only giving 5%.
Jon:
Right. It's way more than that [crosstalk 00:32:36].
Ryan:
It's usually 10, 15, 20%.
Jon:
And so, you really have to think about this. Now for 5% discount, is that 5% discount going to get me greater than a 19% additional sales? Likely, that's not the case. And, in fact, the article that I read on that said, and I'll have to quote it, but it said "This rarely to never has ever happened." And I was like, "Okay. So, they said rarely, never, and ever in the same sentence."
Ryan:
Yeah. Having done this a decade, I can almost guarantee you that that has not happened. I mean, because you would just double that maybe for 10%, you have to get 38% increase in revenue for a 10% discount. There's no way.
Jon:
If, I mean, if that's how the math works out on that, then yeah, you're screwed if you start discounting at that rate in reality. Because yes, you've collected email addresses and markers will come back to me and say, "Jon, yeah, sure. That's if I only do it on that first sale, but now I'm going to have those customer in my database for a lifetime." And I'm like, "Yeah, but what are you going to have to do to get them continue to buy? You're going to have to give another 5% off and another 5% and another 5%. where do you get out of digging that hole? Right? How do you fill that hole so that you're getting your margin back and your customer lifetime value and your average order value keeps going up? How do you make that happen?"
You're better off it doing an offer. And, yep, it may equate to 5% off, but in the mind of the consumer, you're giving them an offer, not a straight dollar or percentage off. And then you come back the next order and you're not having to fight on a discount, you can give them some other offer, perhaps if that's needed. So yeah, we should definitely do a whole show, Ryan, on discounting. I think that could be another way to share one of Jon's things he hates on the internet.
Ryan:
Yes. I think we for sure should do that. Man, there's so many, so many good things in this. Jon, thanks for the time. I appreciate it. And I come away learning lots of things, including just adding a plus sign to my emails now. [crosstalk 00:34:30]. I can track where I'm being sold.
Jon:
There you go. Well, I appreciate you bringing the topic up and helping me share one of my missions. So, thanks for doing that.
Ryan:
Thank you
We know that internet traffic doesn't operate in silos. No matter what method you are using to drive traffic and sales, there's always going to be a halo effect. Today Jon and Ryan chat about Google Shopping, but more specifically the effect it has on other channels.
TRANSCRIPT:
Jon:
Hey, thanks for listening to Drive and Convert. Before we jump into this episode, just wanted to take a quick second and let you know that during this episode we had some recording issues and the audio quality is nowhere near where we would normally like to see it. But because the content was solid, we decided to keep it as is and get it out to you. Hopefully you can see through this less than perfect audio, but a big shout out to our editor, Josh, for helping make us sound pretty solid, despite all of the technical shortcomings. We do have some improvements in audio quality on the way, so thank you for listening and on to the show.
Jon:
Ryan, we know that internet traffic doesn't operate in silos. No matter what method you are using to drive traffic and sales, there's always going to be a halo effect. We've all heard this famous quote from 120 years ago, "Half the money I spend on advertising is wasted. The trouble is, I don't know which half." That is still true today, even with all of the attribution and digital advertising tracking we're able to do. But the good news is that with all of the data we have these days, it allows us to know that there is a halo effect and to know how much that halo effect is worth to each brand.
I was recently checking out a presentation you gave [Aclavio 00:01:44] and you showed data for some real clients that blew my mind and I actually just found out one of them is a shared client of ours, which made me even more excited.
Ryan:
Yeah, maybe some of that's due to you.
Jon:
Hey, I'm not going to take credit for this, but the data was a comparison of revenue and performance before and after implementing Google Shopping. I'm talking 1800% increases in revenue in both of these cases. Tens of hundreds of thousands of dollars in newly found revenue.
Now, it seems to me that Google Shopping itself didn't account for most of this revenue gain, but rather that it could be attributed to the halo effect of implementing Google Shopping correctly. Today I wanted to chat about Google Shopping, but more specifically the effect it has on other channels.
Ryan:
Oh, man. It is such a unique topic that doesn't get brought up enough. I'm exciting to really dive into this. I don't even necessarily know if halo effect is a technical term that anybody really uses. It's just kind of how we refer to it internally at Logical Position and what we're seeing.
Jon:
But I do think it makes sense though. You said halo effect originally when we started talking about the topic for today and I immediately got it. Here you are inventing another term, perhaps, that makes a lot of sense. Ryan, tell me. What is the benefit of understanding the halo effect of Google Shopping? Maybe we just start there.
Ryan:
As you're understanding conceptually, and most I think business owners, marketing teams understand that attribution paths generally look like bowls of spaghetti at this point in time, as people can really easily do research and understand what they want from a product as they're finding it and then coming back to business that they had maybe found it somewhere on. What I've learned, through the last decade plus in digital marketing and a lot of that in eCommerce, is that I'm weird in the eCommerce transaction space. I have a very linear conversion path. I see it. I click it. I buy it. Every company on the planet can track my conversion. It's just very simple. If I've bought from you, you know exactly how I found you. Maybe I don't do enough research or I do enough research before I actually go search for the product. I haven't done a lot of analysis on myself, but that's not normal.
What's more normal is my wife buying something, where she'll do research over probably a week and a half and she's got a pretty low threshold for extensive research. If she's going to buy something for $25, she does a decent amount of research to make sure that that's the best deal. But she'll click on multiple shopping ads, multiple social ads, multiple things throughout the process as she goes back and forth between different sites to figure out where she should buy something.
Through that process, what we've seen is that the Google Shopping click, for somebody that is more normal like my wife, is how people are originally going to find you, but it's not how they're, at the end of the day, going to buy from you. It's more of a discovery tool for a lot of people because Google is a research entity for most people in finding the product on eComm. They're very good at it. Google is just phenomenal at product discovery and helping people figure out what they need or want.
Knowing that, most business owners still look at Google Shopping based on last click, because that's what Google Ads has set them up for. Google Ads tracking by default is last click. You can change it to be linear. You can change it to all these other things, which can make sense, but I don't necessarily think it's bad to be looking at that way, but I think you have to understand as a business owner or marketing team that it's doing other things and that attribution conversation... I've been in digital marketing for over a decade, just like you, and attribution just makes my brain hurt.
Jon:
Yeah, there's too many models. None of them are ever accurate.
Ryan:
Yeah. You conceptually know it's there, but you never really want to be like, "Let's really dive into attribution today." That has never come out of my mouth and probably never will.
Jon:
I'm pretty nerdy, but it's never come out of my mouth either.
Ryan:
Yeah. That just doesn't sound fun. No. No, not going to do it. The halo effect is something we've seen and it's an easy way to explain the fact that attribution is happening and we want to be aware of it and know it's there and that helps direct a lot of our goal setting, I think. Knowing that, from a very simple perspective, the more you spend in Google Shopping, the more the other channels on your site are going to increase even if you're not doing anything else to increase them.
The easiest example, I think it happened in May of this year. We were in the middle of COVID and pretty strict lockdown at that time. This company is a B2B company and they came to me I think through a partner of ours and we were talking just general strategy and marketing, what were they trying to accomplish as a business. They sold on Amazon. They sold on Walmart. They sold on Ebay. They sold on their website, but it was very small. They didn't really care about the website much at all and they had an agency that had told them that buying on Google was the best place for them to be, which the Google Shopping actions. At that time it was I think they were the 12% mark, based on their product mix. Then, they had another agency tell them that, "Hey, your product makes us too big. You need to shrink it down because it'll never work with that many SKUs." So, they shrunk down their product mix on their website. All these things are coming together.
Before they kind of have to look at their company now like a before LP and after LP because it was so dramatic, the change. Their website, in the month of April, did $16,000 in revenue and their buy on Google entity did $34,000. They combined did $50,000 in total revenue from Google and their website and they paid $4,000 for that buy on Google, $34,000. That was their total cost of doing that. By no means bad. There's not many business owners that would be like, "Ah, that's a bad idea. Don't take it."
When I told them, I was like, "I think you're leaving a lot of money on the table," because we as an agency have done a lot of pretty advanced analysis on the buy on Google entity. When you run that, generally you're losing about 40% of the volume that you could be getting if you didn't use buy on Google. So, I just said, "It's probably worth a test. It's a very small piece of your business at this point. Let's just go. Give us three months. We'll go with Google Shopping instead of buy on Google and we'll see what happens. If I'm crazy and it's not more volume for you, you can very easily just flip the switch and go back to buy on Google."
They thought, "Okay. That's a reasonable test for us. If the website evaporated tomorrow, our business doesn't materially change. So, let's try that." We decided to start May 1. Takes us a week or so to get campaigns up and running, but what happened in the month of May surprised even me, and I've seen lots of things in the digital marketing space. The first month, getting out of the gate, we weren't hyper aggressive. We were getting things in position. We spent a total of $2500 in Google Shopping for this business. They're a multi-million dollar business, so $2500 still wasn't a big number. The data in May, the site did $192,000 in revenue as a whole. That $2500 of spend was given attribution credit in Google Analytics of $115,000. So, they spent less, $1500 less, and they gained a 3X increase in revenue on their Google Shopping by moving from shopping actions to shopping on Google. Which is good and that return is not normal. Nobody should ever reach out to me and say, "I expect you to get that type of return." It would just be-
Jon:
Well, now that you say it, Ryan.
Ryan:
... Yeah, it's out there in the public. Don't say that that's going to happen. It can happen, lightning can strike, but what was really surprising to them is they, on their organize traffic and analytics, they weren't doing any SEO by the way. Their organic traffic, their channel and analytics in the month of April did $10,000 of their $16,000 in revenue. In the month of May, again no SEO, that organize channel and analytics did $45,000. It was up 350%, from $10,000 to $45,000 with no SEO. That's an extreme example of that halo effect, where you spend more in Google Shopping. They find you. They didn't convert through that Google Shopping click, otherwise it would've gotten the attributed revenue and analytics. They came back and bought later, after doing research through your organic links and your organic rankings within Google.
Same thing happened on direct traffic. They didn't do any other external marketing and their direct traffic went up 250%. Their email went from, I think, two or three clicks to having $4500 in revenue. Again, no changes in those things to justify that type of increase, but just starting to spend on Google Shopping. The numbers are cool. It's an extreme example that shows the value beyond just looking at the results in Google Analytics or even Google Ads, but just having that understanding that there is more going on.
When I'm looking at my businesses... and I talk to business owners regularly and tell them that I am a fairly aggressive marketer, a fairly aggressive business owner, I want to win... I will spend to break even on Google Shopping all day long. It's not exciting for business owners to hear this from me because every business owner usually goes into business to make money and to have profit, but when somebody's looking for your product on Google Shopping and they haven't put another brand or competitor along with that product search, they're a free agent. That's going to go generally to the more aggressive marketer.
If I have a competitor that is shooting for profit on Google Shopping and I can break even, I can be more aggressive on there. I can pay more per click than a competitor, so I can get that traffic. I can get that buyer to my site and I'm going to have a good product. Part of my model is I have to have repeat business and lifetime value, but even if I didn't, by spending more on Google Shopping and breaking even, I know about this halo effect and I know that I'm going to get profit from my organic rankings and my direct traffic will increase.
So yeah, I may not see the profit from my spending $1,000 to get $2,000. That may not be profitable for many businesses, but understanding that there is profit coming is a pretty big light bulb for a lot of business owners. And a lot of agencies don't talk about this because it is a little more advanced and somebody that's only been in the space for six months to a year may not have understood that this is there.
Jon:
Well, and it's harder to track, right? Because you can't give a straight answer and just say you tell a client halo effect and they're like, "Well, I'm doing a lot of marketing things." So, any of those could've been the halo effect.
Jon:
Let me ask you this, what are some of the common challenges to understanding these halo effects? Obviously, you have to have the right data, right? And some attribution. But where do we go from there?
Ryan:
Step one is just knowing it's there. Okay. If we know it's happening, then I can go look for the data to help explain what the magnitude of it is. I kind of go back to GI Joe growing up, knowing is half the battle. Once you at least conceptually understand that it's going to be there, then we can start looking for examples of it. I keep my analytics investigations pretty simple. I'm by no means one of the experts at Logical Position. There are people that can make my brain hurt in attribution and analytics, so I like looking at the attribution tabs within analytics and seeing, okay, I want to know what is it looking like as far as last click and assisted conversions?
I'll click into the attribution and assisted path portion of the conversions tab and I'll click on the top for Google Ads. Then, I want to see the campaign names and I want to filter for campaigns that are shopping. In Logical Position's structure, it's pretty easy. I can just put in the keyword shop and it'll find all the shopping campaigns. Then, I can easily sort for assisted conversions. I can sort for last click. So, people just have to basically understand analytics, by default... and probably 99% plus analytics accounts are going to be setup by the default stuff... it's last non-direct.
If somebody clicks on a shopping ad and then comes back later that day, tomorrow, whenever, directly by typing the URL into the browser, that attribution or that credit for the sale is going to go to the channel that was right before that direct. You look in there and you can see, okay, if my shopping campaign did $10,000 in revenue that analytics is telling us it got credit for, it did this work to do this, as far as a last click attribution, you'll see right next to that what did that shopping campaign do for assisted conversions.
It's basically telling me, as a business owner, if that shopping campaign wasn't there, if I didn't spend that money, I would for sure lose the $10,000 that it drove in analytics. That would just not be there probably. I can't say for sure, but the majority of that would just evaporate. But what you'll see in assisted is often in shopping, that assisted conversion number is much bigger. It assists on a lot more sales than it closes. That's just the patterns of people shopping and doing more research and making it so easy to click into a site, see what it is, go back to Google, search for another site, see what they're doing. It's very easy. People are using tabs a lot, especially me. I'm a tab-a-holic. I have multiple tabs open as I'm researching. But that assisted conversion, that's where it's just pushing the process forward and something else in analytics is getting credit.
So, if you take away that shopping campaign, there's a lot of other revenue that's going to be impacted. Will 100% of that assisted conversion revenue go away? Probably not. But there's no reason you'd want to take that away and you want to keep emphasizing it. By spending more in shopping, there's a lot more of this assisted conversion revenue coming, which is where you're seeing the evidence of this halo effect in the process.
Then, you can also do... I like looking at the conversion paths. There is a conversion path report in Analytics and I like going by source medium so I can see if it's Google Ads. You can even get into some of the campaigns and finding out where the campaigns are in the process. This is more advanced, so a lot of people probably aren't ever doing this, but you can download it into Excel and pivot against it and you can actually see which channels is it helping the most, what's getting the credit often, is it coming back through organic from the shopping campaign, is it coming back from an email. Maybe abandoned cart emails are a big deal for your brand. You can see a lot of that and who's getting credit in Analytics.
Jon:
This is my favorite view in Analytics, by the way, because it really tells you were people are dropping off in the funnel, how they came in. It really shows you a great view of what are the different challenge points along the way, based on where people came from.
Ryan:
Oh, yeah. When you're looking at it, where are you seeing for most businesses? What channel's often falling off that you're able to help with or that you're able to direct them to and like, "Hey, they seem to be breaking right here."
Jon:
Usually what we see is when an ad campaign is setting some type of expectations that aren't being met on the site, people then start clicking around a little bit. Maybe they end up on a product detail page eventually that doesn't align with that expectation the ad set. So, the messaging there is usually the case, where the alignment is off between the two. But also, it's just really helpful to understand, from a purely conversion standpoint, where people are leaving the funnel who maybe in come in via organic or non-attributable methods. The whole point there is just what's causing people to bounce at that particular page or point in the process?
Ryan:
Yeah, and if you can minimize that friction, then conversions go up.
Jon:
Exactly.
Ryan:
And Jon looks even smarter. Dang it.
Jon:
Well, it's easy when you drive good traffic and you have all these halo effects for me to solve the problems and move forward from there. This has been great, Ryan. Anything else that you wanted to touch on on this that we haven't yet today?
Ryan:
I just think it's important, if you're going to get more aggressive in shopping, and you also are doing SEO, you have to understand that, okay, the SEO work is probably doing good, but if there's a huge jump it's probably not necessarily 100% attributable to the SEO work being done. That's where this does get really messy. You don't want to stop doing SEO because you're doing shopping stuff, but understand that there's going to be a bump and you're going to enjoy that, but there's a lot of things probably contributing to that. Just be aware that there may be some more analysis needed, but also don't get analysis paralysis. Just understand there's a lot of good things happening.
You'll find getting aggressive in Google Shopping, knowing that there are some side benefits that you're getting, that even if you can't put a number on it you know it's going up. So, breaking even on Google Shopping on non-brand searches is never a bad thing if you have some lifetime value and you just want to get market share and be more aggressive than your competitors. Because there's very few companies out there that are willing to consistently break even on some of that traffic. And a lot of companies aren't breaking out brand and non-brand shopping, which still surprises me that companies aren't wanting to do that.
If you've got a campaign that is just general shopping and if you can see search queries so that you're not using a smart shopping campaign, you should go in there and see how much of your shopping revenue is actually people looking for your brand. I think too few business owners look at that. If you're getting more of your shopping revenue from brand and that's what's causing the results that you're seeing that are exciting you, you've already done the work for those companies and for those searches. You've got the brand you've built up.
You need to separate that goal off on its own and you're not going to be able to set a goal specifically around what do you want to get for your brand search, as far as a return. It's going to fluctuate with things that you can't control from a Google Ads perspective. Google search results pages being tested and changed, competitors coming in and out of the market place. The brand is just going to fluctuate. It's going to be profitable, unless you have an odd brand name that is more like a Kleenex, when people just search for the product you come up because of the way your brand is named. You can be assured that your brand search is going to be profitable. Put them in their own shopping bucket and in the non-brand is really where you set your goal. That's where you decide, hey these people don't know me yet. They're going to find me.
If I'm breaking even, if you're in certain competitive industries on Google, baskets, there's a lot of money to be lost on that first order because lifetime value is so high. So, sometimes you may lose money on that first order on non-brand searches, but unless you're tracking that data you won't necessarily know what you could or should be losing to get that customer, what you could be shooting for to get market share. That segmenting is important when you are pushing in shopping and you're doing that because of some of the halo effect.
Jon:
Yeah. If there's one big lesson I've learned from you recently, and you keep hammering this point home so hopefully everyone else is learning this as well, but it's your goal on spending with ads, it's okay to just break even because of the customer lifetime value you're unlocking there. There's other things besides just return on ad spend or just revenue that comes from that initial order from those ads. There's value in emails. There's value in all these other things that somebody knowing about your brand now and having actually validated your brand by giving you revenue. There's a lot of value here outside of just getting a high return on that ad spend. As much as that should be your goal, it's also okay to buy that first customer by breaking even there.
Ryan:
Well, yeah. The thing you've talked to me about, enlightened me on, about the post-conversion CROs, things I never thought about. If you're breaking even right before but you've got a great process after the fact to just increase sales immediately after a sale, wow. You've got the halo effect on the front end as well and then you've got additional revenue coming back through a better conversion process to keep that a happy customer. There's just so many wonderful things that happen when you are pushing more traffic as well. Most business owners, I need to tell you and preach to you, don't be timid.
Jon:
Yeah. Well, Ryan, I definitely feel more comfortable today about knowing half of the money I'm spending on advertising is wasted, but also understanding that I now know that halo effect is helping to ease some of that spend and pretty excited about that. Thanks for walking us through some examples and showing us the value here in doing some of these digital marketing things like Google Shopping, that you might not see a huge return on ad spend immediately, but are increasing your revenue overall. Thanks for your time today, Ryan.
Ryan:
Oh, yeah. Thanks for the questions.
So many Ecommerce stores offer discounts. Should you? Today Jon breaks down why discounts are probably doing more harm than good for your brand, and offers some better alternatives.
The Essential Guide to Ecommerce Sales Promotions [78 Tactics] :
https://thegood.com/insights/essential-ecommerce-promotion-guide/
TRANSCRIPT:
Ryan Garrow:
Jon, I come across this all the time, and I found myself accidentally suggesting these things to maybe my wife's business or some friend's businesses. When it comes to conversion rates on websites, one of the easiest ways to increase an e-commerce site's sales rate is to offer discounts on products or site-wide. I see it all the time, and I know you have your favorite email popups for 10% discounts and your Reelio spin for discounts on every Shopify site on the planet two years ago.
When you see all these discounts out there, it gets stuck in the back of all these e-commerce marketer's minds that it must be a good thing to do. And I think some companies get addicted to it. In fact, one of my wife's favorite stores is Michaels, it's a craft store, and I get the wonderful job of picking up her orders on the way home from the office. And as I'm looking at these receipts, as I'm picking it up, there is not an order she puts in online for store pickup that doesn't have some crazy discount codes.
It's at least 40% on every order that Michaels is giving away on these orders. And that blows me away how they must have a lot of false front on their pricing to be able to do that and that limits what they can do outside of direct consumer marketing like in Google Ads or things like that. But Jon, technically these discounts increase conversion rates and may, in fact, be increasing new-to-file customers in their database. Given those two metrics, why does a brand need to be careful if they're using discounts on their site?
Jon MacDonald:
Well, I think there's a couple of things to be thinking about here, first of which is that discounting is not conversion optimization. It's margin drain. These brands who are engaging in discounting, what they're really setting themselves up for is to always be a discount brand in the eyes of their consumers. And just like you're saying with Michaels, your wife is never going to pay retail price at Michaels. She always knows there's a discount code or some special that they're running.
Once you dig that hole, it's so hard to climb out of it. It really just becomes impossible. Once you're a discount brand in the eyes of the consumer, you forever are going to be a discount brand. It's just not something that you can easily really recover from. And I think a good way to think about this is the real estate market. A good realtor will tell you, or almost any realtor will tell you, that every house on the block, no matter how ugly, will sell at the right price.
And so my point of view on this is that if you have to discount that severely, you likely just have a pricing problem or you have a product problem. And most people try to solve those by just severely discounting, or what they try to do is to get those new-to-file customers in by offering an initial discount. And those just become really, really complicated to recover from.
Ryan Garrow:
Now, are you saying that 10% sales or sales throughout the year are bad across the board, or does it occasionally make sense to have a sale of some sort?
Jon MacDonald:
Well, let's talk about what sales are, because I think there's a ton of ways to drive e-commerce revenue without using discounts. A sale could be anything that is different than just a discount, right? So you could do different types of promotions. So you could do buy one, get one. In essence, you're basically giving somebody a free product, but you're not calling it a percent off. You could say something like buy three of these, you get the fourth free, something like that. And that also helps you get your average order value up.
And yes, you end up eating some margin there. It's a psychological shift from offering a dollar or a percentage off and instead, helping you to look at other metrics. Same thing with something like free gift with purchase, right? So if you purchase something... You could always say, "Buy this and we'll give you X product for free," or you could say something like, "If you spend X dollars, you get this product for free." There are other ways to do that. I mean, you could do free shipping, which is essentially a discount.
I mean, it's almost an expectation anymore in e-commerce, but it could be looked at as a discount, or you could even do if you spend over $50, you get the free shipping. You could look at free returns. I think a lot of people are interested in making sure that they can return their item without having a charge there. This list could go on and on, and you could do loyalty programs. You could do urgency by saying there's limited quantities. You could give a money back guarantee or some type of service guarantee of we'll make it right.
There's a lot of other things you can do to incentivize purchase that is not a dollar or a percentage off, and I think too many people get lazy and just go straight to that as the original tactic.
Ryan Garrow:
So from a broad stroke over-simplification, try generally to avoid any kind of dollar discount or percent discounts as a standard practice with your site. Are you saying that necessarily like a Veteran's Day 10% off discount would not necessarily be a great thing or tied to a certain event randomly throughout the year?
Jon MacDonald:
Again, I wouldn't do a percentage off or a dollar. I think there's a lot of other things you could do.
Ryan Garrow:
Okay.
Jon MacDonald:
Right? So all those things I listed, you could say, "Hey, if you're a veteran, we do these special things for veterans." It doesn't have to be a percentage off. Free shipping for all veterans this weekend, or we're doing free shipping just because it's Veteran's Day. So there's a lot of other ways you could get urgency and have people to want to take action.
And that's really all we're looking to do with a discount is to create urgency where somebody is interested in the product, but they need to be moved to actually converting, and you want to give them that little extra push. Most people, it's just commonplace or perhaps this laziness, I'm not sure, but we see it so much and it's where people just immediately go to that discount.
Ryan Garrow:
I think it's the easy button.
Jon MacDonald:
Right.
Ryan Garrow:
Even me in strategizing with my wife's retail storefront and her e-commerce site, she's getting more involved in e-com and is trying to figure it out. And so we're like, "Hey, let's do a 10% off sale for this event." She did this event for I want to say 15 online retailers, and it was a great success, but one of the requirements is everybody's got to have some kind of promo to draw in all of your followers on Instagram to this event. And 100% of them did a percentage off discount.
Jon MacDonald:
Yeah, exactly.
Ryan Garrow:
And I advocated for that. So I failed you, Jon.
Jon MacDonald:
Well, that's why we're educating you today, Ryan.
Ryan Garrow:
Okay, so percentage off, dollar discounts, bad. Getting a little more outside the box, creative thinking and how can you incentivize. With other methods, it may in effect just be a discount. It's just presented in a different way like BOGO or free gift with purchase. Free shipping is probably not necessarily an incentive anymore for most companies, but depending on what you sell. There is a unique one that just came up with my wife and I yesterday, abandonment emails with discounts. So you've abandoned the cart, almost every site...
Shopify, in fact, has it built in. You can do abandonment emails. You don't have to sign up for any kind of email plan. They'll send it out because they know abandonment emails work. A lot of companies give percentages off. My wife was telling me that she leaves things in the cart on purpose for a day or two to see if she gets an email.
Jon MacDonald:
Right, and that's the problem right there, Ryan. Right? I think it's because we now know and we've been trained on a couple of different things. The first is that we're likely to get an abandonment email, so we might as well wait because I'm not in a huge hurry. So you're not creating that urgency by offering the discount. And two, you know how you're in checkout and you see that little coupon code field? What's the first thing we do?
Ryan Garrow:
Oh man.
Jon MacDonald:
We go to Google, right? You search for discount plus company name or website, and you see what comes up. How many thousands of sites out there now that are affiliate sites that list these discount codes that they find? And there's whole apps based around this. PayPal just bought Honey, which is a plugin for your browser that goes out and searches for all these and makes that easy for you. And PayPal loves it and Honey loves it because they get a commission on each of those.
The reality is there's a whole economy based around discounting. If that doesn't tell you there's a problem, I don't know what would.
Ryan Garrow:
Oh, for sure. Okay. We all agreed now we're not discounting percentages off, dollars off. Okay? So you've seen almost everything under the sun for increasing conversion rates with some sort of incentive. What would you rank as probably where somebody should start? If they're going to break themselves from this percentage off drug that they've been feasting on for the last five years of their e-commerce career, what steps should they take to start weaning themselves off of that? And how can they test and measure and show results outside of that?
Because many times as marketers, we're scared almost to stop doing something that's been working for the last five years because these numbers we're reporting up the chain, we don't want to risk that and the new customers or things like that. So how do we take baby steps?
Jon MacDonald:
First thing you should do is have one-time use discount codes, and that really helps prevent the issue of your discount codes ending up on these aggregate sites that people are just going to search for. The second thing you should do is hide the coupon code field behind a text link in your checkout. So instead of just having the field open and showing, you actually have to say, "Have a discount code," and then you click on that and then it opens a field.
The reason is we've done tons of A/B tests on this and the psychology behind showing an empty discount field make somebody want to go find it, because not only they're like, "Oh, well, it's here and it's empty. I need to fill that with the discount because I'm not getting the best deal." The other thing you could do is just have discounts that work based on a link. So if you email someone a discount, then only click on that link and then it automatically does it for them and it's not a discount code field in the cart at all, even behind a link like, have a discount code.
So there are some things you can be doing there. Also, immediately just look at your promotions calendar over the next three or six months and just say, "Okay, which of these can and should be changed to different types of promotions?" I think that almost every brand has done some type of discounting, right? And not to the extreme that Michaels has where... Same thing with like Bed, Bath and Beyond where I'm not going there unless I have one of their spam mailers out of my paper mailbox that I'd never checked.
And unless I go there and I have that that says I'm getting $20 off or whatever. And it's interesting. I haven't been to that store in quite some time, but the last time I was there, I remember I walked up to the counter and I was like, "Oh, I had that coupon at home and I didn't bring it," even though I didn't. I just said that because I know they have them, and they're like, "Oh, no problem. We have it right here," and they pulled it out from next to the register and just scanned it for me. And I was like, "Wow, okay. How many people are saying the same thing I just said?"
They all know they're going to give me a discount. And it's just not a really good situation. You want to break that cycle and really look at what you're planning upcoming six months ideally and then just start weaning yourself off of it over the next six to 12 months.
Ryan Garrow:
We can't all be the biggest brands in our industry. And so as we look at our competitors and see discount codes, discounts happening, especially on Google Shopping where I spend most of my time and strategy, it's you get that wonderful little button that says, "20% off discount until January 7th," or something like that. It's actually good to have that there because your click-through rate increases. So you have to just be aware that you're not going to have that anymore, but there's different things you can put into that field to get there. And overall price is generally a better principle in Google Shopping.
Jon MacDonald:
Well, that's exactly it. I mean, part of the algorithm with Google shopping, correct me if I'm wrong, is price, right? So why hide all that behind a discount? If you're going to offer the discount anyways and make it super easy for people to get it, just cut your price. And there's a lot of ways you can show that people are getting money off without having to have a discount code.
So on your product detail page where you have the price, show three things, the strike-through price, so the original price with a strike through and then the new price next to it, and then show them how much money you're getting off, and then show them what the discount percentage is as well. So you're basically just showing them, this is what our price is off of the MSRP or whatever, and then they feel like they're getting a good deal.
Ryan Garrow:
Does this change it all in a MAP industry? I feel like that industry is a little interesting when you're all competing at the exact same price point, and then there's a little gray areas around discounts because you can't necessarily do BOGO discounts on Google Ads necessarily, at least on shopping ads.
Jon MacDonald:
Right. Yeah, I think it becomes a little more complicated to show how to communicate that, and that's why I always say, just have your best price available. Now, if it's a MAP pricing situation, which the manufacturer is requiring a certain price to be listed, you can do what Best Buy does, which is, shows the best price in cart. That's how they get around that, right? It's not a discount code. They just say, "See price in cart." Now, there's some psychological play there in the terms of once it's in your cart, you kind of feel like, "Okay, I'll just move forward."
So they're pushing you that next step down the funnel. But I can't tell you the number of times I've went to BestBuy.com, added something to my cart, and abandoned it. I can't imagine what their abandon cart rate is, but that's obviously not a metric they're that concerned about with this model. But I think they're kind of stuck in a bad spot by their manufacturers of how do you have to list the price. And if the only way you can show that price is in cart, then, okay. If that's the best thing you can do, then I would highly recommend that.
Ryan Garrow:
If you're going to do that, don't make people log in to see it in your cart.
Jon MacDonald:
Right.
Ryan Garrow:
That's a failure, because I've been to those sites. They're like, add to cart for price. I'm like, I try to add it and they want my email and all this information before I can get to the cart. And I'm like, I'm not doing it. Sorry.
Jon MacDonald:
Yeah. Well, if you're going to do that, there's other ways you can do this. You could have loyalty programs. Then if you're going to make people log in to see what their price would be, you could put it behind it a loyalty program, for instance. That's where you're going to be able to say, "Okay, we're not giving you just a percentage off here. We're saying that as a loyal member, on every purchase you get X percentage off." Right? And at that point, it's a different psychological trigger because at any point, they're a loyal customer now, right?
There's an argument to be had. I saw a great article on LinkedIn today that somebody was posting about the argument that consumers fall in love with the loyalty program, not with the brand. Same thing here...
Ryan Garrow:
Really?
Jon MacDonald:
Yeah. You start thinking about airlines and sky miles. I'm on Delta. I'm loyal to Delta because I've tons of miles there, and I'll pay a little bit more. But I'm falling in love with gaming the sky miles system the best that I can there, right, in terms of how do I get as many points that I can. I have the credit card that's associated with it. I'll try to fly them. But if they're like $400 more to fly someplace... There's a threshold in there. It's a lot less than that.
But if there's a threshold for me, I'll fly a different airline, and then I'll say, "Okay. Well, first of all, who's the partner that I can fly so I still get the miles? And then if that doesn't work, then who's my second choice airline that is a non-partner that I can get miles from that I can also use?" So then you start gaming the system around the loyalty program instead of having loyalty towards the brand.
Ryan Garrow:
Yup, I would agree. I do that myself. But there is value to obviously loyalty programs.
Jon MacDonald:
Of course.
Ryan Garrow:
Is it generally a simplification of it to keep them from trying to game it and just make it like, "Hey, I'm a loyal customer," or how do you take that next step then, I guess? I don't want to dive too much into loyalty, but you also don't want to just move your discounts and your pricing issues from one place to another, right?
Jon MacDonald:
Yeah. Well, let's just talk about the best loyalty program in e-commerce. What do you think that is?
Ryan Garrow:
I mean, the one I use the most is probably Starbucks. They keep changing it, so I'm less excited about it.
Jon MacDonald:
Yup. That's a good one. I'm talking about Amazon, right? If you think about the best loyalty program that there is right now, Starbucks aside, because I love that too. I get a free coffee a week essentially, so I love it. And they do a good job of not discounting. It's for the loyalty program, right? It is essentially a discount, but now I'm earning that discount. And so they're increasing their customer lifetime value. But if you look at Amazon, I think they do a really good job. Now, generally they compete on price to some degree, but not always.
They also compete on speed, right? And so what I mean by that is best testament to this is Walmart. Everyone thinks Walmart's coming out with Walmart Plus here very quickly. Now, that's the rumor on the street right now, which is going to be their same type of Amazon Prime, where it gives you free shipping in a fast speed by paying a yearly fee. Well, this is just like the Costco model. Costco makes more money on the yearly membership than they do on the margins of their products. And so I think that's a really interesting model.
People don't go to Costco because Costco is running massive discounts. They just have low prices. And, of course, you're buying in bulk, so you're upping your lifetime value and your average order value, and you're paying for that privilege. So it's a win-win on revenue for them. But most brands aren't going to make that commitment, and most brands don't want to start out by doing that. But I think if you start a brand by doing that upfront, then you're going to be in a much better position.
And I think it's still something every brand can do and should start thinking about.
Ryan Garrow:
No, I would fully agree, and I have to start rethinking some of my easy button discount suggestions now for even my own brands. All right. Any final points on discount? Obviously we're not using percentages off or dollar discounts. We're getting a little more creative and actually maybe not pushing the easy button. Do you believe in regular annual events in online marketing? Like Nordstrom has their yearly sale, their half yearly sale, and that's pretty much all they get.
And I have a lot of clients that do friends and family sales every month of the year or something like that.
Jon MacDonald:
Yeah. Look, I think that those types of promotions work really well and that's what those are. They're different types of promotions, right? I think if we could be thinking about this as a holistic kind of overarching topic for today, it's less about using discounts or the negativity of discounts. It's really about how to move from discounts into promotions, right? And so tattooing promotions to regular intervals, like the Nordstrom anniversary sale, or looking at holiday-based promotions, or any of those types of things.
I think that a promotions calendar is necessary for any brand. I'm not saying don't do promotions. I'm saying don't step down to the easy button of a discount. Now, I do think the only time that a discount makes sense for a brand is if you're okay breaking even on the initial sale to get that customer in, but you know you're going to have a massive lifetime value for that customer. And only then is it probably okay to start doing discount and understand they're always going to want to pay that discounted price. So only offer a discount that you can sustain forever.
And at that point, maybe this works, but I have yet to see a brand that has pulled that off effectively and done it extremely well. But that's the only instance I've really seen discounting work well.
Ryan Garrow:
Got it. So if I'm selling a product and I know once they buy one, I'm going to sell a hundred of them over the next three years to this one person. And I can replicate that.
Jon MacDonald:
Exactly. You know who's really good at this? It's Quip, Q-U-I-P, toothbrushes, right? What they do is you buy the Quip toothbrush and they include inside the first order, in the box is a little code on a piece of paper that you then go to the website, you type in that code when you're ready to refill the brush head, and they mail you another brush head and a battery for free. But it's a onetime thing, right? And what they're doing there is getting you in the habit of going back to them to get that product, and you're starting the habit.
And so that's where I think something like that can work extremely well for offering a discount. They tell you upfront that it includes a free brush head replacement. We'll ship you your first battery and brush head replacement. They're very open about that. And it works extremely well for them, because they're forming the habit of, now I have a second pressure head, so I'm not going to just throw the whole thing away.
I have the free brush head, even if I was like, "Yeah, the product's okay. It's not as good as the Sonicare maybe, but you know what? I have a free brush head. I'll go ahead and get that and stick with it." And by that point, you're, you're in it, right? You're going to do it again.
Ryan Garrow:
You're talking about maybe from a marketing perspective, you invest to get the new customer. Once you have them, your next order somehow is going to be discounted through email or something. Did you just get them in the habit? Like, "Hey, your second order is X because it's the second order," but you set that expectation upfront?
Jon MacDonald:
Right, because you know you're going to have a high lifetime value from them and you're just helping move that further along, meaning the habit that comes with somebody having a high lifetime value.
Ryan Garrow:
Got it, Because you wouldn't want your normal email cadence to be, "Hey, here's your coupon code. Come back and buy from us," because now they're going to expect that that happens all the time almost.
Jon MacDonald:
Exactly. And again, this is not a dollar off or a percentage off. In reality, it's costing Quip the same amount of money as if they did that, but they're being really smart with that investment.
Ryan Garrow:
Lots to ponder through and lots of brain synopsis to start reconnecting in different ways so I can solve problems better. Jon, I appreciate the challenge as e-commerce marketers to not do the easy button and start getting a little more creative and maybe better for the brand long-term.
Jon MacDonald:
Yeah. And if anybody is really interested in this topic, just go to thegood.com, click the little magnifying glass in the top right, which is our site search, just type in discount and you'll come up with a ton of articles that have... There's an article 78 ways to do promotions without discounting up there. There's a lot more ideas than what we've covered today that we can't possibly get to in a 30 minute episode, but I want to make sure people know that that's a great resource for this as well.
Ryan Garrow:
Yes. You can spend hours learning from Jon on his website. Go there, but make sure you've built some bandwidth in after you go there to read all of the stuff you find. Thank you, Jon. I appreciate your time.
Jon MacDonald:
Thanks, Ryan.
Google recently dropped all commission fees on their "Buy on Google" platform. On the surface-level this seems like a very intriguing offer. But Ryan here is to explain why "Buy on Google" may not be the best thing for your brand.
TRANSCRIPT:
Jon:
Ryan, a few days ago, I sent you an article I read about Google's Buy on Google program and how they were dropping all commission fees for their sellers as part of the program. Now, to me, this seemed like a pretty good deal. Who doesn't like freeways to sell products and utilize a huge platform with lots of awareness like Google search? At least that was my take, but when I asked you about it, you said, and I'll quote, hopefully this is okay, "That product was dead in the water before this change. Some merchants will of course test it, but it will compete for ad presence with their regular Google ads." Honestly, this was not what I was expecting to hear from you at all.
I was really interested in connecting with you a bit more about this and just seeing your thoughts on it and getting some more information about the program out and seeing where and when it makes sense for all of our eCommerce listeners to take advantage of it. I guess just to jump right in, Ryan, on a high level, just so we're on the same page, what exactly is Buy on Google?
Ryan:
Buy on Google is the little colorful shopping cart icon that shows up in Google shopping. When you start filtering and sorting, you actually transact on Google and then the merchant fulfills it. It's basically a Google trying to be this marketplace saying, "Oh, we can trust Google because I'm buying it here." It's a shopping ad set that you're able to get when you push your inventory into Google and say, "Yes, I'm willing to sell this on Google."
Previously, there were commissioned tiers to sell different products. It ranged somewhere from five to, I think, 12%. It was a 12% number that Google [inaudible 00:02:07] because it was less than that Amazon 15%. That came out, man, I want to say maybe three, four years ago, maybe in an alpha-beta four years ago. I think it did cause some Amazon changes within their system on what they were going to be charging to try to have more parody with the Buy on Google scenario. Yeah. It was basically give Google the commission that you would maybe be paying Amazon and we'll push your product out there. There's no advertising costs. Google's the one putting it out there and then you just get the sale and give commission to Google.
Jon:
They're trying to create a marketplace without really holding any inventory or doing any fulfillment. They literally just take the money, take their cut and send everything over to the retailer?
Ryan:
Yeah. From a high level, it sounds like a great idea like, "Okay. I have all of this work. I'm spending all this money in Google ads and shopping and I've got agency fees or employee costs or my time in it. Now, I can just go to Google and you're just going to take a commission and it's a fixed cost, so I don't have to worry about what my return on Google shopping is." That theory sounds phenomenal. There's not many business owners are going to be like, "Yeah. Here, take my products. Sell them for me. I now know that I'm only going to be paying 12% of my revenue for my advertising cost." There's no scenario in which that doesn't sound like a good idea.
Jon:
That definitely makes sense. How does Buy on Google differ from Google Shopping? This is a complete novice asking that question.
Ryan:
It's part of Google Shopping. You only see the Buy on Google when you're in the Google Shopping tab within Google space. It used to be a little more prevalent on the first page of Google, but I believe it's only showing now in the Google Shopping tab. It's one of the filters you can put on there.
Jon:
Okay. Then, really Google Shopping is getting your listing of products up there. Some of them will take you to the retailer. Some of them will just take your money on Google.
Ryan:
Yes. It's always interesting. Google's, as we know, a for profit company. They want to make money. When they came out with this program, it obviously sounded great to business owners, but it immediately put up some flags on our team internally to say, "Okay. Google needs to reward shareholders for their investment and needs to make money to afford employees," and all the things they do around the world that are very good and positive, including paying people. If Google is going to take 12% of the revenue for a sale and not charge for any clicks to the merchant that's selling that, in theory, Google's not going to be willing to lose money by showing those products at 12% when they know from a click cost, they're getting a 20% or a five X return for the merchant.
Jon:
I see. Yeah.
Ryan:
Google's got a lot of very smart people and they do say that they are out for the good, and they will do things to just benefit people. Period. There is an opportunity maybe that they're willing to take less money, but that's not always the case. You just have to start investigating. That's why I challenge every merchant to do with any product in Google is test and measure and see if it does actually make sense for your brand.
Jon:
Spoken after my own heart there, test and measure.
Ryan:
Yes.
Jon:
I've had an impact, Ryan. I appreciate it. Let me ask you this then. If they're not doing any commission anymore, then how are they going to make any money and how could any brand really think that Google is going to list this above their ads?
Ryan:
It's a great question. That's why it's surprising that Google made this move, especially when they just released earnings when we're doing this podcast yesterday where they had the first time that their revenue dropped in a quarter. I don't know how long, if ever, that Google being willing to give up money. When that happens, it's telling us internally logical position that, "Okay. Something wasn't going the direction that Google thought it was going to be going." Either we're in the process potentially of just sunsetting this or moving it to a place where it's not going to be necessarily a focus of Google because if there's no revenue coming in, how are you going to support it internally?
You can't dedicate a bunch of employees necessarily longterm to a product that makes no money. It's either a stepping stone into something different, or they're taking steps to buy some market share to a degree and try to get people using it in broad adoption so that they can monetize it later. We don't necessarily know where they're going because they won't necessarily tell us this despite our levels of... I actually asked the question. I was interviewing, I think the global partner strategy person for Shopping. He's a big guy in the Shopping space. We were talking about the free and fast program that's recently come out and I brought it up and he's like, "I answered something, but not how you want it. Then, we can't have this in the interview because I'm not authorized to speak on it."
Awesome. Thanks. It's a big unknown. I know that if Google is not making money on it generally, it's not going to be something that I, as a brand, am going to get really excited about and try to push all of my eggs into that basket for my personal brand. I might test it. Again, test and measure, see what it does, but my hopes are not high. Also, my hopes are not high, but just because of the nature of the Buy on Google and the data we've seen in it. A logical position... One of the companies I talk about often, I won't mention them by name, but they started working with us in May of 2020 after they had not been doing any paid search with an agency. They had been using Buy on Google with another agency that recommended that this was the greatest thing for them.
This sells B2B kind of like distributor cleaning products, just all things businesses need. They have something in the neighborhood of hundreds of thousands of skews. Most of their sales come from Walmart or Amazon, at least, they did at the time. We looked at Buy on Google and they did about $34,000 a month on average. That was over the previous six months, and they paid Google and this agency somewhere around between four and $5,000 for that batch of sales, $34,000 worth.
Jon:
It seems like a good [inaudible 00:08:20], if you will?
Ryan:
Yeah. It wasn't terrible by any means. I said, "Okay. Well, that's not bad, but based on what we see, I believe you're limiting yourself on the potential that our website only did, I believe $16,000 in revenue in the month of April." Their web sales, just if it evaporated tomorrow, not a big deal. I said, "Okay. Look, I think you're being limited here. Give us three months to test this and see what we can do." This was in the very end of April. They said, "Okay. Fine. We're going to fire the agency we've been working with, but it's going to take two weeks. You're going to actually officially be able to kick off mid-May. But in the meantime that first two weeks of May, we're going to just push all our products into the merchant center and flip a very basic shopping campaign on based on just... We don't know anything. We're just going to have the products in there. Just see what happens."
I said, "Okay. Great. Can't hurt anything while we're building it out." The data, when we're on a test and measure here, Jon, the data in the month of May, half of this was just that are basic campaign. Half was us getting ramped up. Their sales went from the site in April, $16,000 to $192,000.
Jon:
Now, that's a return on investment.
Ryan:
They only spent 2,500 bucks in Shopping in the month of May to generate an additional... What is that? $176,000? The crazy thing we saw and it surprises a lot of companies, but shopping has an effect on lots of areas of your site, not just what you're going to see in analytics on Google Shopping. That $2,500 generated Google Analytics last non-direct attribution, $115,000. The organic traffic on the site went from $10,000 in April to $45,000 in May. They weren't even doing any SEO. There was a halo effect on other things that Google Shopping does because you click to a site on Google Shopping, go back and do more research. Then, you're going to come back through other channels. Direct traffic was way up. Email was way up. Social was even up and they don't even do much on social.
The Buy on Google doesn't allow for that because you're buying on Google. You're not even going to the website. You don't have the ability to buy other products. We know as well, based on our research and expertise within the Google Shopping space, over 50% of the time, people click on our product to go to a site and they're going to buy something else entirely. You get to the site and you start shopping. You see the data when somebody interacts with product suggestions on a site, time on site goes up dramatically. Conversion rate goes up on dramatically by clicking that suggested product, or you might also like type products. Everything gets better. They've committed to shopping the site. Maybe you can challenge me in that in some other arena, but all you want is a traffic from Google Shopping to get to the site because everything looks better from an analytics perspective.
When you don't have that because of the Buy on Google not sending people to the site, you lose all of that. When I'm seeing Google give something for free, red flags and lights and flashes of all kinds of go off in my head saying, "Okay. Either something wasn't working for Google on this. They just need to get it out there more for adoption to try to take a last gasp for effort, or are they going to try to get companies to forget about sending traffic to the site to try to convince them that Buy on Google is the only thing to be doing?" It's just interesting to say the least.
Also, if you have the product in Buy on Google and also in Google Shopping, you don't get to show in both ad sets, so it's not giving you extra inventory. It's a replacement, which also tells me if it's now free, how... Yeah. Google's not bad by any means. I think Google's great company. I'm very honored to be partnered with them at the level we are. I know that they're not going to give up all their revenue from Google Shopping.
Jon:
Right? Well, there's something else they're getting there in terms of... It's like the old adage about Facebook. If you're not paying for it, you're the product.
Ryan:
Yeah.
Jon:
There's something here that makes me think that they're interested in the consumer data.
Ryan:
Yeah. They want some data, and how much are they willing to pay for that? If they have 100% of all merchants adopt that immediately because it's free, they're not willing to take a $10 billion hit in Q3 probably to see some data.
Jon:
Not after Q2.
Ryan:
Because Google already has more data than they know what do it through a degree. Again, interesting. You need to watch it, test and measure it, but often it does not make a lot of sense to utilize the Buy on Google for most eCommerce companies.
Jon:
Is there anything else you feel like eCommerce brands should know about Buy on Google?
Ryan:
If you put this on your site and you're also running Google Shopping, we've got some merchants that spend north of $10 million a year on Google. When they came to us, they're shopping... Overall, they were using Buy on Google and Google Shopping and their shopping traffic was down 40% year over year including Buy on Google. Then, they couldn't figure it out. They came to us that find out about this. They had some prior relationships with us from other companies, the eComm team that had started working with them. They brought us on and we were able to uncover that when they had flipped on Buy on Google, that's the key thing that happened to drive the volume down. They thought they were going to be adding ad sets, adding all this additional stuff, and it was going to fix their marketing costs because the numbers looked great. When they flipped it on, everything went down and the agency they had been working with just said, "Well, it's just because the market's down or your prices are too high," or they had all these excuses that just didn't necessarily hold water when we started looking at the data.
It's not easy to analyze Buy on Google and what the impact on your business, because the transaction is not happening on your website. You don't see that in Google Analytics. There's a lot of matchup data. There's a lot of filtering and analysis you have to do that is very complex to actually see the impact. When I say test and measure, you're going to actually have to do a lot of work on that measuring to figure out what the impact actually is. You have to look at skew data to see, "Okay. This product, I started showing in Buy on Google. What was the impact of overall sales in taking some of my offline data?" Because the Buy on Google's not going to show up in Analytics. What does that look like?
When we put it here, we started seeing what's the impressions of Google Shopping that I lost? If I lost again, easy math, a thousand impressions and 10 sales on Google Shopping when I flipped on the Buy on Google, did I get more than 10 purchases of that specific product? Probably need more than that because the halo effect of Google Shopping of my organic traffic getting more searches and clicks and purchases because of my shopping investment, that goes away. You got to take in the fact, the halo effect. Go in paranoid like I do with most things. I'll go in paranoid to start and say, "Okay. If my business is not going to go to the direction I want to, where am I going to see it? What levers am I going to need to push and pull quickly and uncover some changes?"
Jon:
Is that paranoid why you live on a farm and all that acreage?
Ryan:
No. I also have four small kids and you need room to run. We're very blessed in COVID time to have all that room.
Jon:
You had said at some point, as we were having this conversation a few days ago, that larger merchants will usually lose volume when they have both ads and shopping actions. Is that summarizing what you were talking about a second ago?
Ryan:
Generally, yeah. It's simply because you can't show both ad sets. Playing out the conspiracy theorist in me saying, "Okay. Google's... Previously, they were going to get 12% from your Buy on Google, but they knew they were getting 20% with people clicking on ads to your site, they're probably going to take the 20% margin that they were getting on click and not show the Buy on Google." Buy on Google, you don't get any search queries, so we don't actually know what you were showing for. What we were seeing often was that it was cannibalizing brand terms and taking some of the easy stuff that you were probably getting at less than 12% cost already. Not that it's bad, but even smart shopping to a degree, take some of those easy layup searches and shows a pretty strong ROI.
But a lot of that was brand that maybe you could have been getting a better return on ad spend with a more complex shopping structure. That's where you can't see the data from a search query perspective, so you have to see it from a transaction perspective. You're never going to get really apples to apples, but when you're comparing it volume loss of sales or volume increase based on skew, you'll want to hopefully have a lot of that data you can be pulling. If you have smart campaigns running currently on Shopping, you're probably not a large merchant. If you are a large merchant, we should chat. Smart campaigns are quite limiting to your scale, but if you have smart shopping and then you do Buy on Google as well, you have zero data in both of those.
You're just going to be able to measure total site sales and maybe they do increase, but could they have gone higher if you went just to a manual shopping campaign structure and didn't do either smart shopping or Buy on Google. It's a difficult analysis, but it's something that all brands spending over 10,000 a month on Google should probably be doing. If you're doing spending money on Google Shopping and also doing Buy on Google, you need to be doing some deep analysis of what that looks like because I would venture, I guess when you flipped Buy on Google on, you probably lost some volume because of that transit. People not being able to shop the site and add different complimentary products.
Jon:
Right.
Ryan:
Buy on Google doesn't do that. They don't know what the complimentary products would be, but if you work with Jon who's going to help you figure out some of those things that are going to help your conversion rate to help your AOV, you can only do that on your site.
Jon:
Right. Yeah. That's been my rub with Google Shopping and I guess Buy on Google, more specifically is that you have very little control and you lose the contact information for the buyer. This leads me to my next question, which was I had mentioned there was an article in Forbes that kick started this whole conversation. That article says something along the lines of Google just updates eCommerce game to attract more sellers, but it's still not enough to compete with Amazon. What stuck out there was not that it's not enough to compete with Amazon, but this has been viewed as a play to compete with Amazon. Do you agree that this is a play to compete with Amazon?
Ryan:
Well, Google and Amazon has been competing for over a decade. I don't think it's a new thing for Google to try to test waters to create more of a marketplace. It just makes sense. With over 50% of all eComm transactions happening on Amazon, there is a risk to Google on ads that people could be just moving stores to Amazon and not paying for traffic on Google. That is a potential that Google is probably well aware of, probably not giving them any insight they don't already have.
Jon:
But I was wondering with that approach also, they're willing to offer this for free almost as like gut punch to Amazon in that, "Hey, we'll keep the customer data and the sale. We'll give that commission up to increase the volume and steal basically the revenue away from Amazon," almost as a way as a retaliation. I'm sure Google would never say this, but for Amazon launching on platform ads, which kind of hurt... I'm sure hurt some volume on Google.
Ryan:
I don't necessarily think that if you are selling online, you're not aware of Google or this was what was going to all of a sudden, get you to start working with Google to a degree. I think that there is some of that there like, "Hey, we want to try to get more merchants and more data," but I don't think that that was necessarily the play for Google that they're trying to use this to be the marketplace or take down Amazon at all. Then, probably trying to get new data to see, "Oh, if it is free, what is that doing to our margin? What is that doing to the volume of people buying on Google? Does that give us the ability to push into a marketplace?"
The fact that they're integrating with PayPal, the fact they're integrating with Shopify Pay is pretty big. Letting people pay with those things, so it does seem that there is a marketplace potential here and it may be if we play this out, I'm guessing that Google is taking some margin from PayPal and Shopify Pay if people are using those for the transaction.
Jon:
I see.
Ryan:
Google's Pay could be as a merchant processor at the end of the day because they already have Google Pay. If they're making enough money on the processing fees, maybe they don't need to charge for a marketplace listing.
Jon:
That's a great way. I hadn't thought about that, but that's a great way for them to increase the volume there, which probably makes their cost cheaper to process those overall because of the larger volumes. Yeah. That's a great idea there in terms of how this makes sense for them. That leads me to my next thought, which is that Google has really tried several ways to take a piece of the eCommerce pie in the past few years. Right? We talked about Google Pay for instance, right? But I don't see a whole lot of eCommerce brands taking advantage of it or really making it a priority to support all these things. Do you have a feeling that Google will ever become a really large player in the actual eCommerce space besides driving traffic?
Ryan:
I would never bet against Google.
Jon:
That's fair.
Ryan:
They have a tremendous amount of intelligent people and more data in the eCommerce space than almost any other company [inaudible 00:22:14] in Amazon just control it. I think there's so much value to owning the customer experience for brands that as a brand owner myself, I do have an Amazon storefront. I do advertise on Google. I do have my own website. I look at Amazon as a retailer because it's their customer. It's not a me customer. For me, the more people that I can get my product into their hands through Amazon, the more likely they are to become a loyal advocate brand fan for my brand and maybe they'll buy from my site. Maybe they'll follow me on social and I can get new products into them, but I know it's Amazon's customer and Google can send traffic to my site.
I have a lot of affinity for that because they're willing to share all of that customer data with me and not own it. It's difficult for me to be able to give up my customer and sacrifice that data and potential relationship and experience that I know I want my customer to have on my site to ever be like, "Okay. I'll never drive traffic to my site. I'll just let the transaction happen all over the place with everybody else's system."
Jon:
Government antitrust interviewing aside with all these big tech companies recently. I've always wondered why Google didn't just buy Shopify before it went public or by big commerce before it goes public. I could see a massive antitrust issue there perhaps where they own the entire ecosystem, but I also think that for them to really get a piece of this pie in the longterm in terms of on the transaction side, I almost see that that's going to have to be a requirement and we'll see what happens, but it would be interesting for them to take a play there.
Ryan:
Yeah. I think it's going to be easier for a Shopify to move into a marketplace than it is for Google to move into a web ecosystem that you can't get out of, but there's potential that Amazon gets broken up. As big as it is, maybe they have to uncouple their fulfillment and let everybody on the planet use Amazon fulfillment or Amazon becomes just the marketplace. I foresee that as potential. I know that Shopify is moving into logistics. They're going to start fulfilling orders for their merchants. There's a lot of frenemies in the digital marketing space. You and I partner with companies that we technically can compete with on certain areas as well. It's not uncommon and it's going to be to fascinating next few years to see how a lot of this is going to shake out.
Jon:
Yeah. Not really on topic, but I do see that if Shopify starts fulfilling, that's a huge win for Amazon because they can go back and say, "Well, we're not on it. There's no antitrust issues here," that Shopify fulfills and they do two days. Walmart now does one day. What's the problem? You could definitely see that argument.
Ryan:
Yeah. I think Walmart, we need... I didn't mention. You brought up Walmart. I think they have more distribution than even Amazon. Amazon has for their FDA, I think something in the neighborhood of 77 locations around the country. Walmart's got, I don't know how many thousands of stores, but a lot of them and Shopify has all this data around all of these merchants that a lot of them sell the same thing. If you've got the same skew at Shopify system, they know where you're located. They know where you're shipping from. In theory, Shopify could start selling that particular product and saying, "Hey, merchant X, Y, Z, you have it listed for 50. We know that we can sell it for 45. Do you want to take 45 and ship it to somebody?"
Yeah. Most merchants are going to be like, "Yeah. I'll take that. You're going to share this customer data with me." Kind of like the dealer network. Do you remember Shopatron? I think it's now Kibo or something like that. The dealer or the manufacturer sells it and the dealer fulfills it. That's for sure within the realm of possibility within the next couple of years.
Jon:
Yeah. Wow. This has been fascinating. Thank you once again for educating me on this. You're always so knowledgeable on what's happening in the Google ecosystem, not only because you guys are such great partners with them at that scale, but also that you dive really deep into this personally as a store owner and somebody who helps clients. I really appreciate your time on this today and looking forward to the next conversation, Ryan.
Ryan:
Yeah. Me too. Thanks, Jon. I appreciate the time and the good questions.
How can you prepare your businesses for operating in a future that has yet to be determined? Today, Jon explores the future of CRO. With such a high volume of transactions happening on Amazon and Shopify are we nearing the end of incremental improvement from CRO?
For help with your CRO visit:
https://thegood.com/
TRANSCRIPT
Ryan:
All right, Jon, as a business owner and strategist, I'm constantly thinking about the future and how I can prepare my businesses, my teams, clients for operating in a future that has yet to be determined. For me, it's just kind of fun to think through. Recently, one of the things that's been on the top of my mind has been the future of CRO and how do we continue moving the needle to improve our sites, but doing that like five years in the future, what is that going to look like? With such a high volume of transactions happening on Amazon and Shopify, are we nearing the end of incremental improvements in CRO? That's kind of the thought that's going through, and I guarantee you have some serious opinions on this that I have no idea about. So I'm excited to learn from you what you're looking for in the future.
But it also came top of mind because of a recent Google announcement that they're going to start including site experience into their organic algorithm. And so let's just start with that. Based on what you've heard and what you know about Google, what do you expect this to look like when it rolls out?
Jon:
Well, I think that the biggest concern for brands and the biggest concern they should have is that if you haven't been optimizing your site's consumer experience, it's going to severely impact your rankings, and thus your organic traffic is going to go way down. Google was kind enough to tell us now, even though it's not going to roll out until 2021. So we're recording in mid 2020. So they have given you a six months heads up, which is very nice of them.
They also have provided all the tools you need to be able to improve your site experience, including one of my favorites, Google Optimize, which is their A/B and multivariate testing tool set that they've released that's great. So they're not only just giving you the tool sets, but they're also giving you the guidance on the fact that they want you to have a really great consumer experience. Say when they go to Google and search, and then they end up on your site, that they have a great experience and that they love the search results that Google is producing. So that's what Google cares about right now, is they're saying, yes, everybody knows if I need an answer, I can go to Google. But a lot of those sites that rank first have made the experience so poor in an effort to get listed higher that they don't have a good experience on those search result pages.
Ryan:
How much in your opinion, and maybe you can assign a percentage, is the actual act of converting on a site the experience? Can you break that out into its own piece, you think?
Jon:
Well, without question, I think Google has been very upfront about this. Normally they'd never release a specific percentage that anything weighs into that algorithm, but they are saying that it's going to be one of the top factors.
Ryan:
Is the rate of conversion on a site?
Jon:
They can track conversion to some degree, but I think what they're looking at is how long are people staying on your site? How many pages are they looking at? Are they converting is definitely a factor in there, but are they bouncing right back to Google? And I think they're looking at a lot of other metrics too. They're looking at page speed. They have a whole bunch of algorithms and artificial intelligence, AI, that has gotten really, really good at telling things like, do you have a popup on your site where it, as content loads on the screen, that popup kind of moves around a little bit, and just because the page loads slowly and you have this bad user experience, and now people are trying to click buttons and the button keeps moving as the page loads.
Ryan:
I hate that.
Jon:
Exactly. That's the thing that Google does not want, that experience, what you just had, that emotional reaction. If you had clicked on the first item in a search engine result page, and you went to a site, and you had that reaction on that site, Google now knows that that's what's happening, based on their AI, because they can test for those type of experiences. And so really what they're advocating for here is the consumer experience on your site, the user experience. And they're asking you to make sure that you have a consumer friendly experience. And I think that's really what's going to matter.
Now, the outcome of that is naturally going to be higher conversion rates. So I've always been a proponent with CRO that says the goal of the brand is to convert higher, almost always, right? The goal of the consumer is to have a better experience. Those are actually very much aligned, because if you have a better experience, you're going to convert more. And I think Google is recognizing that now, too.
Ryan:
You could take the stance of maybe some of the conspiracy theorists out there, that a higher converting website in the eCommerce space could hurt Google's revenue, since people don't have to go back to Google to keep researching. They're just going to find it, buy it, kind of like how I usually convert, versus my wife, who's all over the place in her conversion path. What would you say to those conspiracy theorists?
Jon:
Well, I don't think it's a conspiracy. I think it's, you know, Google's pretty upfront how they make their money. It's what the ads on the search engine result pages for the vast majority of their revenue. So yeah, they want people to keep coming back to Google, but I can promise you that if I keep searching Google and I keep getting a search engine result as the first second, third, which are the only ones people are really clicking on for the vast majority of times, and the experience is crappy, I'm going to stop going to Google.
So they must know, because they've factored this in as one of the top ranking items in their algorithm, they must know that this is causing a concern, and they're feeling a lot of pressure from tons of other search engines out there right now. I mean, you've probably heard of, what is it, DuckDuckGo. There's all of these other search engines that are way more privacy focused right now. Windows, any Windows laptop comes with Bing as the default search engine, Microsoft search or whatever they're calling it these days.
So I think they're feeling that pressure of making sure that people have a great experience, so they continue to come back and search on Google. That's why they're making it such an important factor. Will it cost them some money? I don't know. I think they must've done that math, but I will tell you that I'm excited that this is new and that they're making a big stance for this, because it's needed. It's really needed.
Ryan:
Speaking of competitors to Google, Amazon controls over 50% of the online transactions in the world. And how much in the future do you think Amazon is going to impact the way we view a checkout or a conversion process? If we play it out, say, let's just say Amazon is going to continue increasing in dominance. You can't do much with their checkout. So are we going to be so conditioned as Amazon Prime members that anything that deviates from Amazon's checkout process is going to throw us for a loop, and we're not going to know what to do? Kind of like the idiocracy model, where we just get dumber, because it's so simple for us?
Jon:
Well, I think that's the internet. The evolution of the internet has been that way for years. And I think we did a prior episode where we talked all about how eventually what's going to happen, are we going to totally optimize ourselves out of optimization, right? You're going to have done so much optimization that every experience is going to be the same. And I don't think that's going to happen. But I do think, I mention this book all the time, it's called Don't Make Me Think.
And the whole point of that is that as consumers get used to conventions, it makes it easier for them if you follow those conventions. It's so true today that people are used to Amazon checkout. They're used to the Shopify checkout. They're used to these platforms that have grown to be the monsters in this space. And if you really deviate from those best practices, then you are potentially creating a barrier. Now, that doesn't mean there aren't areas that can be optimized in those. There most certainly are. But at the same time, looking at Amazon as an example, in terms of how to convert better and not just on the checkout, I think Amazon does a lot of nice things.
But you know what? It's akin to when a small footwear brand comes to work with The Good, and they say, "I really like what Nike is doing. I want to do what Nike does. Can you help me do that?" And I say, "Well, but you're not Nike. Think about this. Nike has hundreds of product lines across all these different sports. Their marketing is based on the celebrity of getting athletes to market for them. And you don't have the money to go out and get LeBron James to market your shoe. You are fighting a 10,000 pound gorilla here, trying to fight a gorilla fight when you're not a gorilla. So think about having the better consumer experience."
Nike can get away with having a worse consumer experience because of how ubiquitous their brand is. It's the same thing with Amazon. I go to Amazon to buy something because I know they're going to probably have what I want. And it's a quick and easy way to just go there, type in what I'm looking for, get a handful of options, do some research, and buy something at a decent price point. And I know I can get it in a couple of days. But if I really want to find a particular item, I don't go to Amazon to buy that particular item. I'll go to the brand website to do that research, because I know in my research it's going to get way, way deeper, even though maybe the consumer experience isn't going to be as good. Maybe I won't get it in two days. However, I know that I'm going to have more content and I'm going to have a better research path on that brand site than I will on Amazon.
Amazon is great for not going very deep, but going very wide. Looking at tons of different products, but not going very deep into the research on each of those individual products. And a brand site is different. It's going to help me go real deep on products, but not very wide on competitors. So I think they serve different purposes. And it depends on if I'm looking for a commodity, right? Like, I was looking at ethernet cables yesterday. I needed a 50 foot ethernet cable. I just ordered it off Amazon, because it doesn't matter. It's a commodity. I can get an ethernet cable anywhere. But I know I can get it in two days. I needed it quickly. In fact, they dropped it off the next day and it said, have it by next day. And I was like, perfect. That's what I need.
So I didn't even look anywhere else at price. It was fine. It was like a $10, $15 cable. It's not going to break the bank to do that. If I saved two bucks going someplace else, it didn't matter to me. But I think that's where Amazon has its place. And I don't want people to get confused by thinking we have to meet Amazon's experience, because they're doing a lot of things that I would not recommend and do not test well. Their navigation is a mess, but it's like walking into one store, in a retail store, versus walking into your local mall that has hundreds of stores. And Amazon is trying to be that mall, when you're trying to just be the retailer. And you really need to take that approach a little differently.
Ryan:
Looking forward a couple of years, and maybe the physical checkout process on a site is pretty standard across a lot of things. I mean, there's Bolt right now. There's even Shopify checkout that's been very simplified. So CRO, I would assume over the last five to 10 years that you've been doing it, you've had to educate some people on just the basics of checkout. Like, why are you doing checkout this way? So if that goes away, it sounds like you're saying CRO becomes more of a brand experience on your side rather than, okay, you changed your checkout button from pink to purple, and then look at that [inaudible 00:12:29] type thing.
Jon:
Right. I mean, look, I think CRO has evolved over the past, we've been doing this 11 years now, but over the past five years, it's become something that most people know about. If you're on the eComm side of any reasonable size, you're looking at and doing some CRO. I think the biggest difference here is that you're right, that there are areas that are transactional that just need to be transactional. And then there's areas of a site that are going to have a better consumer experience, that are going to then reflect better on the brand.
And I think that's what you mean by branded experience, where if I go to a site and I just have a poor experience, then I am at that point going to have a bad reflection of the brand. And I think that's exactly what Google is trying to prevent here, is saying that you need to have a good reflection of your brand so that people don't just equate that Google, where you started, gave you a bad experience, as well, by sending you someplace that has a bad experience.
Ryan:
Got it. Okay. So if you're looking five years into the future and making some crazy predictions or looking at, what are you preparing your agency, The Good, for in the CRO space? What are you maybe not doing now that you think you will be doing in CRO in five years?
Jon:
I think that what needs to be happening is a way to make this more accessible to brands of all sizes, first of all. I think CRO, just like most technologies and consulting and things of that sort, it's for the elite when it starts. You have to be able to afford it. It's a competitive advantage. And so you're looking at the top one percent is able to take advantage of it. Then it starts filtering down. And that's what we've seen over the past five, six years, has been really the first five years that we did CRO, it was only for massive brands. And then it started getting to the point where those mid market brands really knew it was something they needed to do, and it became more available, and the tool sets got more available.
We went from having just Optimizely, which is a great platform, but it's $10,000 a month to use, just the platform, to having Visual Website Optimizer, which was a couple hundred dollars a month, to now we're at Google Optimize, which is just as good as VWO, and it's free from Google. We've kind of run that whole gamut, and each of those tools have their space, don't get me wrong, and they're good at individual items. But my point here is we've gone from $10,000 a month to free over a span of a few years, and I think we're going to see that democratization of CRO continue to happen.
So what needs to happen is that it needs to have these methodologies, and the strategy behind them need to catch up with the tool sets and need to be accessible to brands of all sizes. And right now that's not the case. The only things that are out there are eLearning, where you as a small eComm owner, and you're wearing tons of hats, you don't have time to sit down and learn for 25 hours and watch videos and then figure out how the heck do I apply this to my site specifically, and pick and choose, and then still act on it, right?
So you've invested all this time and you still haven't made any changes to your site. So there's some ways to fix that, and we're working on that at The Good, but really I think that democratization of CRO is where this needs to go. And I think in addition to that, I think we're really going to see tool sets continue to evolve, and I think AI is going to play an even bigger role. As you know, we've been proponents of that for years. We do AI eye tracking heat maps, which is our way of dipping our toe into that. And we've been tracking it for years, and looking and testing at those algorithms to the point where we wanted to make sure it was something that worked before we heavily invest in it. And we're ready to heavily invest in it and go all in. Being a data driven company, we're seeing a lot of artificial intelligence with big data sets really start to pay off and make this successful to brands of all sizes.
Ryan:
That's [inaudible 00:16:46]. I think that is going to be phenomenal, when these small companies that we know of that need the CRO services are able to get those at a point that makes sense for them financially and for the improvements that'll make. That'll be cool. Okay, here's a fun one. Besides the death of the email capture pop up that you're so advocating for and the death of Wheelio spin-to-win, do you see something that we all currently expect on an eCommerce site to not be a part of an eCommerce site in the next two or three years?
Jon:
Yeah. I think putting your credit card in is going to go away. I mean, I don't know about you, but I'm fully in on the Apple ecosystem. And if other ecosystems catch up with this, I know Google has done a lot with this, with Google Pay, but Apple Pay, I will now, if I'm searching online to buy something, I will use Safari just so that on my phone or even on my laptop, I can just do Apple Pay and not have to go get my wallet. I don't want to have to memorize my credit card. I don't want to have to deal with any of that.
And in fact, it's just like retail. If I have the option to use Apple Pay and not touch anything and not give somebody my credit card to swipe or even have to touch the screen to do it myself, I will do that. And I use Apple Pay every single time. I was even in a drive thru getting food the other day and I used Apple Pay, and it's just like that's my first question anymore. It's like, do you take Apple Pay, because I don't want to touch anything. And it's so convenient. So same thing online. Everyone expects to have to put in their credit card. I think we're going to see that go away. Shopify has taken a big leap in that direction, by making it, you can put in your phone number and then it will auto fill out your information. It'll send you a text and confirm, and then you can auto fill all your information in. I think there's a lot of things like that that are going to start happening, just as a way to make this process way easier.
Ryan:
Yeah. I'm excited for that. It's during this pandemic, where we're not going into an office or commuting, I found that I don't have my wallet on me. And so when I'm off somewhere else on our property and I want to transact, I don't want to go get my wallet. So if it already has my information, I'm more than likely to go to that site, and I may pay an extra dollar. But for me, it's like, nah, it would have cost me 10 minutes of walking somewhere on my big property. So I'll pay the premium to use, so that it's already stored.
Jon:
That's exactly it.
Ryan:
I didn't even think about that, but that's very true. I may be lazy sometimes. Okay.
Jon:
Sometimes. We'll leave it at that.
Ryan:
Sometimes. Yes, sometimes. Is there something out there that you see that if just something on an eCommerce site that if a brand adopted it now, they would have a pretty significant advantage over competitors in the next couple of years, if they really took a leap of faith? Outside of using our services, because we're so amazing, what would that look like, do you think, if you had to pick one thing? It's like, yeah, most people aren't using this yet, but I think if they do, they're going to have a big advantage in a couple of years.
Jon:
I think that it's not just one tool, and I don't even want to go to a hundred percent to tools, because I think that's the first spot that every eComm owner looks to, is like what's the new greatest and hottest tool that I can deploy on my site and be ahead of everybody else on that? A tool is only going to do one of two things. It's either going to help you do something better, or it's going to expose a weakness. And what we see is a lot of brands jumping into tools.
And what I would like to see these brands doing is using tools like Klaviyo, for instance, to do email followups post purchase. We have a whole episode, go back and look for post purchase emails and what people should do for post purchase optimization. I talk about all the different email flows that you should be thinking about post purchase, and there's so many things like that that brands right now just aren't doing. And I'm not a big proponent of just having a best practice checklist, but I will tell you, there are a bunch of items that when we jump into work with a brand, we just immediately look at and evaluate and figure out what are the top opportunity areas here.
And I'm always surprised, no matter what the size of the brand is, that there's almost always things on that list. And one of them is, as I mentioned, post purchase followups. One is definitely the checkout. Are they optimized around that? You mentioned Bolt and Shopify and things like that. And I think there's a lot of great optimization happening in check out right now.
I think there's also a lot of optimization that can be happening in just assets on the site. What do I mean by that? Well, like product photos. You and I have talked a lot about 360 photos, and the revolution that's coming with that, in the past. And I think that that's, you know, having better product photos as more people are going online to purchase, is really going to matter, because you can't touch a product right now. So making sure that you have a way to see every angle, to really understand what you're buying, is going to be really important.
And I think reviews and social proof is a huge one that people miss out on. And I'd be shocked if more brands don't do that in the future, because there are right and wrong ways to do that. But it is something that if you don't have reviews on your site, people start getting suspect about trust. They don't trust your brand as much. They're wondering why you're not sharing reviews or collecting them. And we've seen time and again, consumers trust what other consumers have to say more than what a brand has to say.
Ryan:
That's awesome. So thank you for all of that information. That definitely got my mind going, and some of my brands and what I should be doing that I'm probably not, because I'm stuck in the minutiae of the business myself. So thank you for all those insights of what we're going to be looking for in the future of CRO. Any parting thoughts or words on the future of CRO?
Jon:
Well, I think the best way to stay ahead of the curve is to start tracking your data today. Understand how people are engaging with your site. Make sure you're tracking every click and movement. And if you do that now, no matter what tool you deploy, no matter what you start doing down the line, you will have more data to make informed decisions, because you're going to have a longer timeline to look at trends. You're going to have a longer timeline of data to look at what potential changes you made and when, and what the impact of those were, so that you can skip having to collect all that data and wait around before you can take action.
Because the biggest issue I see with brands who aren't collecting data when we start working with them, is they start getting anxious, because they say, "Hey, we're just sitting and waiting right now." And I said, "Yeah, we need to get all this data that you weren't collecting forever, so we can make informed decisions. And then we can act." So it's this whole issue of eComm brands who come to the table ready to act, but then they don't have the information or data to do it, and then they get anxious because they were so ready to act. They made the decision to act, but then they can't do anything yet. And so they have to fill that gap somehow. And I think that's a big concern for eComm brands, and I think we're going to see more and more brands collecting data. And I think it's becoming a lot more popular and easy. The tool sets are so easy right now.
But just get some data collecting every click and movement. Set up Hotjar and just let it run. Even if you can't do much else, just set up heat maps and let them run for a while. Do some session recordings and let them sit there. Google analytics, of course, but there's even tools like Glew, G-L-E-W, that is amazing for helping you understand your consumer audiences. All of that data is really going to be important. So that's what I would recommend. If you want to be able to take advantage of what's coming down the line in the future, start collecting data today.
Ryan:
You heard it here first. Jon Macdonald says collect data. Do it. Thanks, Jon. Appreciate your time.
Jon:
Thanks, Ryan.
Today, Jon asks how to determine what your SEM budget should be...and Ryan explains why the answer may actually be to have no budget at all
For all your digital marketing needs:
https://www.logicalposition.com/
TRANSCRIPT:
Jon:
It's a common question that I hear quite a bit. "How much should I be budgeting for search engine marketing and how do I even forecast what I should be spending?" Well, securing the SEM budgets is always a challenge, right? So when you do spend on search engine marketing, you want to ensure that you reach your performance goals, but there are countless traps and ways to actually overspend or even underspend on your search engine marketing budget.
And even if you follow all the best practices, you could still end up with some inefficiencies, so correctly addressing the ways to misspend requires paid search experts to consistently monitor campaign performance and budget spend. And also they need to have a pulse on what the company is trying to accomplish. So luckily for us, we have access to Ryan and he has access to 6,500 search engine marketing budgets to learn from. So today we're going to talk about ad word budgets and how to forecast what your brand should be spending and how to ensure you don't overspend or underspend. So, Ryan welcome.
Ryan:
Thanks, Jon. It's a big one. This topic is constantly top of mind for CFOs and there's constant tension, I think, between marketing teams and finance teams over budgets. And for me personally, it's one of my favorite topics and also my least favorite topics, just because of all the tension around it. It's my favorite because almost every company needs to be educated in how to forecast and plan budgets. But it's also my least favorite because it's always an uphill battle with changing the opinions of business owners, executives, finance teams, even marketing teams that don't understand forecasting and budgeting. It's a difficult conversation to have, but I'm happy we're going to be diving into this and hopefully doing some education. Hopefully making people think about what they're doing and how they can be maybe looking at SEM forecasting a little bit differently.
Jon:
Awesome. Well, I'm looking forward to being educated on this. This is a topic that we were chatting before we started recording, and you have some unique perspectives on this that I've never even given thought to. So.
Ryan:
We both have [inaudible 00:02:32] all kinds of things, Jon. It's great to be able to do this with you, but when this topic came up in our sequence of things we're going to be talking about it. I get all hot and bothered and excited and adrenaline starts flowing and I talk fast. So bear with me, but very similar to how you get when somebody's got a discount email pop up on a site is how I get when somebody tells me what their budget is X number of dollars a month. And don't overspend. It's just, I'm on a personal mission to eliminate SCM budgeting for 99.9% of the population. It just doesn't make sense for most companies.
Jon:
So explain that to me, I'm interested to learn more. Why is that? Well,
Ryan:
we get into the conversation because finance people want to see what numbers are going to be and understanding what's going to be coming in and out of accounts.
And so it's for the last a hundred years of CFO's doing work to prepare bank accounts. Marketing has been a line item on the P and L that they've paid attention to and set goals around on how much are we going to spend? What are we going to do? How much are we putting into magazines and newspapers and TV ads and billboards? So it's understandable, but SEM is in a very unique position that it's not a normal P and L line item. Let me just use an example because here's what normally happens. Finance meeting, all right, the owner is, "What the heck," gets all red in the face. "What the heck is this $350,000 charge for Google last month? You know, we need to cut that down because our retailers are selling less of our product. We need to save money. And you know, if we go into a COVID time, we've got to control all of our money and keep it from going out so we're not spending $350,000 on Google anymore. Every month, a marketing team, we need to cut a hundred thousand dollars of that."
Marketing team reaches out to the logical position says, "Hey, yeah, our wholesale channel is down because nobody's shopping in stores. So we need to cut a hundred thousand dollars of our marketing budget on Google." And that I get it, logically it passes the make sense test that you're going to take that hundred thousand dollars from Google and move it to the bottom line of profit. So you can cover the missing profit from some retailers that aren't selling product.
Jon:
Right. They're looking at it purely as an expense line item.
Ryan:
Exactly. Which again, conceptually makes sense. What isn't considered in that is that $350,000 drove 1.3 million of top line revenue, 10,000 new to brand customers, and also had an impact on two million organic direct traffic revenue.
And so cutting that hundred thousand dollars, most likely won't even save that company money. It'll probably cost them revenue and profit because it's not going to be driving as much top line revenue. And many times in the past, if you cut a hundred thousand dollars of billboards, you may not actually feel an impact in the business at all over the next month, depending on what you're selling, depending on what the billboard's mentioning, but it simply does move that hundred thousand dollars to the bottom line. And that again, logically makes sense. But with SEM, it doesn't operate like a historical marketing channel. It is driving so many other things that impact the business.
And so because of that, it is somewhat complicated to explain that to a business owner over a phone call or, "Hey, we've got five minutes with the exec team. Let's tell them why we need to be spending on SEM." For most businesses, I'll add, will start with the crazy notion that you should not have a budget for paid search. It should be, "Nope. You are going to set your goals and going to spend. And if you can spend more, you are going to take it if you're hitting your goals."
Jon:
Okay. So it's not an expense line item. It's an investment.
Ryan:
Yeah.
Jon:
Okay.
Ryan:
If you're printing money with an investment, is there any reason you wouldn't continue printing money? And the general answer is, "Well, no, if I put a dollar in and I get $10 back, I'm going to go find a bunch more dollars. There's no limit to the number of dollars I can be spending. Because I could take that $10 that I just printed and put it back in and it prints a hundred and I take it out and it prints a thousand." The asterisk to this, which we will touch on probably a little later is it does make sense to forecast sales from SEM, potentially based on historical data for inventory or production. And that's where it does get kind of like a sliding scale on what we can spend based on the inventory we have. And I've got a couple of examples on that.
Jon:
So if you're not budgeting the spend, should you be looking at the back end is what you're saying. You should be budgeting the return on that adspend and what that's going to be in revenue. So you're saying, "I want to make a million dollars. What does the adspend take to hit a million dollars?"
Ryan:
Maybe? But the reality is, is I challenge companies to, yes, you're going to look at this, after the fact on a PNL, as a line item, but in the month itself, the spend on SEM actually doesn't have an impact on cash. Therefore it's not necessarily a normal P and L line item. So easy math example, you're going to spend a hundred dollars on paid search on Monday. Great. You set up your Google Ads account. You've got your credit card on there. You spend a hundred dollars on your credit card on Google. It drives $500 of revenue. Okay? That hundred dollars that you spent on Google Ads doesn't even hit your card until you spend 500. So it's still just in Google system. You spent in essence, at that point, fake money, it didn't hit anything. It's just a Google system, but that $500 that you processed on your website is real money.
And that's going to hit your account as soon as your merchant processor will send it to you. So let's just say easy math. It's going to hit you on Wednesday 48 hours later. So every day you're going to spend a hundred dollars to get 500, your credit card's not going to get built from Google until end of day Friday, when you hit the $500 billing threshold from Google. And by that time you've already collected $500 on Wednesday, $500 on Thursday, $500 on Friday, that's hit your bank account minus the processing fee. But we will ignore that for this example, you've got $1,500 in your bank account. Your credit card has only been hit for $500. If you are like me and you're [inaudible 00:08:29] this, I pay my credit card once a month. And I pay off the entire balance on ever pay interest. And that credit card bill is probably not due until the 14th of the next month. Let's say this was the first of the month.
So you've got 45 day float on that hundred dollars you spent on Monday. And by that time you've already collected money. And if you're not losing money, which ideally you're not, but you're actually making money, then it's a money printing machine that actually doesn't cost you any money. You have, in theory, an unlimited amount of money, as long as you're at least breaking even just from a cash perspective, right? And your credit card limit, obviously.
Jon:
So it's no longer about SEM budget forecasting. It's around the laws of SEM cash flow.
Ryan:
Not every business has unlimited inventory. So you might be able to spend a hundred thousand dollars tomorrow to generate a hundred thousand and $1 of profit in your business. But if you don't have the inventory to back that up, then you do have problems. And we have some clients right now that are struggling to get inventory from China for their production. I think one company has a hundred containers en route from China they're just waiting on to be able to sell and they can flip a switch, and that inventory is almost going to be gone immediately. It's crazy, the demand for their products. So from that perspective saying, "All right, we have this much inventory coming. We want to sell it." And maybe that becomes the conversation around, okay. Based on the historical data of what we've been able to sell, what we've been able to spend, what's the return on adspend goal that we need to be at to sell that much inventory?
So again, this is getting somewhat complicated math, but I'll try to boil it down simple. Let's say in my brands, for example, I will spend down to break even to acquire a new customer at any point in time, because I'm competitive. I would love to put my competitors out of business because I think my product is better. My service is better, but break even is fine for me because it doesn't hit the cash. I'm getting new customers. And I have a lifetime value. If, for example, I all of a sudden had a... And this happened, I think in April we had a production hiccup. And so I knew that I was going to run out of inventory if I kept spending down to break even on like, let's make it up the 20th of April. So I said, "Okay, all right, marketing, we're actually going to raise our return on adspend goal because I need to throttle down sales because I can't run out of inventory on the 20th. I have to be able to get to the 30th before I can get my inventory back in."
And so that's the strategy I use. I didn't care what we spent, as long as it wasn't losing money. I still, I said, "All right, instead of breaking even, and we're going to get a 2.5 X because based on the historical data, we think that's where my sales special is going to be." So that took some guessing and manipulation on daily sales totals. And we had to watch it pretty carefully. But once we hit inventory levels again, I was right back to pushing aggressively to sell an inventory.
Jon:
Yeah, that definitely makes sense. So there's other factors you need to be thinking about here and inventory sounds like is a big one for sure. Then that could be the more delimiter than what you should be spending or what the budget would be for SEM.
Jon:
Let me ask you this as a little divergence, but how do you get leadership on board with this type of mindset? Right? Because if you go in most financial folks would probably understand that return on investment spend, but maybe if leadership and finance is still looking at all of this as a budget line item, that's only on the expense column. How do you recommend people approach this conversation? Obviously there's simple math, just like writing it out, might help, but have you have found any tips and tricks for how to approach leadership about something like this?
Ryan:
It's difficult again, going into this conversation about money is always... I don't think there's any conversation around money that becomes easy, except, "Hey, I want to give you a million dollars." That's pretty easy. I'd be like, "Yeah. Okay, great. I'm in." The longer an organization has been looking at marketing on Google or Microsoft Ads as a line item that they forecast and budget annually, the more difficult it's going to be to change the minds of the team that's been doing that. We've worked in some billion dollar organizations that said, "All right, last year we did X number of dollars on our website and we expect a 10% growth. Therefore we're going to take our marketing budget for paid search, which was 10% of that total. And then we're going to add 10% to it again. So there's your budget. Go do it. Divide it up by the quarter that you think the revenue is going to come in and four quarters higher, therefore it gets 42% of the budget."
And then they work down into the week and have even daily budgets. Those organizations are going to be much more difficult because they're bigger, their CFO, they were publicly traded. So they had to report numbers to shareholders and forecast what their expenses were going to be. And because SEM is an expense you report to shareholders, if that expense was a hundred percent higher than you told them it was going to be last month, they may not be happy because they're not understanding what's that top line number that it was driving. So you have to have it correlate really, really well saying, "Hey, we spent a hundred percent more, but we actually drove over a hundred [inaudible 00:13:53] more revenue." It's going to make them excited. But the group that's doing the conference call with the shareholders may not understand that and be able to break it out in that much detail, especially if it's a multibillion dollar organization and the website is a small piece of that overall business, which it was at the point we were working with them.
It's challenging. So my advice is to try to chip away at certain aspects of it over time, being able to show, "Hey, when we spent more at this level, we got more, it was a direct correlation." And I like to use impression share showing potential like, "Hey, there's a potential there in impression share. We used absolute impression share at the top, which means you're in position one on Google and top impression show, which means you're just above the search results," to kind of give an indicator if there's a room to push. And then I also like to talk about what we refer to an internally as the Halo Effect. I don't think that's an official term, but if it does become an official term, you heard it here first.
Paid search, specifically shopping in eCommerce has a large impact on organic traffic and direct traffic. And in fact, if you look in Analytics and you get lost in Attribution, sometimes it's hell, sometimes it's heaven, but you can get lost all over an Attribution. You will find out that the more you spend on Google Shopping, the more your organic traffic increases, the more organic sales you get. And you can look at assisted conversions to see that if you label your campaigns appropriately, you can see generally on non TM shopping campaigns, which is non trademark people, just looking for your product and service, and don't know you as a brand yet for that product or service, you will see assisted conversions generally higher than attributed last click conversions in Google Analytics. And so it's having a disproportionate influence on driving sales through other channels, and it is driving sales to its accredited channel.
And so showing them that, showing them, "Hey, this says have a large impact. If you just cut it, you're not just cutting the results that you're seeing from the SEM budget. You're cutting results you're seeing in other channels as well." And so in some companies, this is unfortunate, but if you cut Google Shopping, your SEO team, all of a sudden is going to look worse without them doing anything wrong. They just happen to have the organic traffic drop because of Google Shopping not spending as much money. So it's a very complicated web picture as we continue to shop more and more online, it's only going to get more complicated and intertwined, but at least helping them understand some of that first, even before you get to the, "What are we going to spend," budget.
Jon:
Yeah. It's almost like we, as an industry, need a one sheet for executives on how to explain this simply for them, because I think there's a so much education that goes into this. And I think half the job of marketing ends up being internal education, which is really just reduces effectiveness. I mean, we fight that all the time with conversion optimization ecomm and marketing teams, they're all a hundred percent on board and understand the return on the spend on optimization. But then you look at a high level executive and they say something like, "Well, but you know, we just had our best month ever. Why would we need to optimize?"
Ryan:
No, exactly. We're constantly in education mode in what we do. And I actually had this conversation with Google last week because they're really internally pushing for more automation within Google to control a lot of the inner workings of Google, which is not bad for many companies, but they want to move agencies into more of an advisor role and helping companies grow by educating them on digital marketing, which I think is a great goal. I said that, "Well, the problem you're going to experience with that though, is you've got a bunch of, let's just say 24 to 30 year olds in digital marketing that have never owned a business that are trying to educate business owners on growth strategies for their brand. And they probably just don't have the experience to be educating at a high level why these companies should be investing in marketing." And it's scale yet, I just don't think we have the expertise as an industry to be advising people that have grown hundred million dollar brands on how they should continue growing.
Jon:
And the barrier to entry with marketing roles is typically pretty low, right?
Ryan:
Yup.
Jon:
It's something where there is a lot of people in the industry, but there's few experts. And you start doing something like that with all of the junior folks who are just getting into it, and you're going to end up with some big problems. So let me ask you this, Ryan. What are some ad word budget management solutions that kind of help you maybe just prevent yourself from even under spending? Because I think we've determined today, most companies under spend, right?
Ryan:
Mm-hmm (affirmative).
Jon:
Because they're not focusing on the right metrics around this, but I know you're talking about a lot of these tool sets that Google's coming out with. I know we've talked about them on this podcast before how I've even been personally kind of put through the ringer by using automation tools through Google. So what are your thoughts just on the AdWords budget management solutions that are out there?
Ryan:
Generally, I don't like them, but when I'm talking to business owners about controlling budgets, the first thing I tell them is, "Look, you're going to have flexibility, regardless." If you're rigid on your goals, you're either leaving money on the table or you're wasting money. You can't dictate search volume across the entire United States, for example, for your product or service, but what you can do is decide, "Okay, here's what my goals are. Let's make sure that we're at least meeting those. And if we have a little bit more we spent, that's probably okay, as long as we get the goals, if we under spend it's okay, because the search demand wasn't there." Google at its core is a demand capture. People are searching for a product. You put it in front of them because you have that product. There are pieces of Google that can be demand creation, but by and large, it is demand capture.
And so build flexibility into your model. But then this is another thing I have to educate a lot of businesses on as well. A big education piece is aligning your marketing goals with your business goals. So often those are not going in the same direction. So you have a marketing team. That's been given a goal and they're rowing in direction to achieve that goal because they have incentives and bonuses in place to hit those goals. And then you have an executive or a business owner that's driving or paddling the boat in a different direction because of their goals. And if they're not aligned, you have a lot of tension and issues because there's going to be frustration from the executive team. "Why isn't marketing giving me the results I want? We set this wonderful goal and they achieved it, but it didn't have the impact I wanted it to."
So you start with, what's your business goal? Do you want to grow? Even beyond that, do you have an exit strategy as an owner? Do you have shareholders? You have to hit certain metrics as a business to be successful and make them happy? And then after you've set that you say, "Okay, how can my marketing team utilize the SEM channel to help hit that goal?" And let's set incentives around that rather than what a lot of companies do is well, "We had an agency five years ago tell us that we should be getting it for X or you know, 10 years ago, we were highly profitable on Google Ads. I want to be highly profitable still."
And don't pay attention to the changes or evolution of digital marketing over the last decade that has made your 10 X profit goal spending 50 grand a month, not possible at this point, based on what your site's converting at or all these other things you could be doing or should be doing. So it's goal alignment build in flexibility and then monitor it. It's not something you just set it, forget it, let the marketing team just do it. Like I'm in marketing, I have brands, I still daily track everything. It's all about the data. Like I want to know what's happening in my business regularly. I don't let it go on autopilot. Sometimes I want to, but I don't. And just in be involved as a business owner, you have to have an understanding of what it's trying to do.
Jon:
This is great because I think if I could summarize a little bit of my learnings from the conversation today, it's you shouldn't have a budget, you should have a goal, right? So look at the other end of the spend, not the front end, but the back end.
Ryan:
Mm-hmm (affirmative).
Jon:
And then you really need to work on educating your team internally and the executives, if it's not your money that you're spending, because that way, you're making sure that they understand the return on the investment there. And then from there it's really an inventory challenge perhaps on how much you could spend. And you could really look at this as a cashflow machine. And that's how this should be looked at, perhaps is what's that cashflow equation? How are you getting that money before it's even truly spent? And how can you reinvest that up until you have no inventory left or you have an inventory problem. And then from there, there's no real way to kind of put something on autopilot here. They just don't work that well. You don't want to look at your marketing channels as equal. You really want to play at these different points of the acquisition funnel as you've mentioned. Did I miss anything on that?
Ryan:
Well, there's a couple of points. I think people should just pay attention to as well. There are circumstances where some companies intentionally lose money on the initial order from a customer. They have high lifetime value, they have a competitive space where it's necessary to even compete. They're going to lose money on the first order, beauty, skincare, that is often the case.
Jon:
That's still the cashflow formula. You're just stretching it out, right?
Ryan:
You can't spend unlimited money because it does actually cost you money to get that customer. And so you have to look at, from a finance perspective, how much money do I have in the bank? I can't spend endlessly if I'm losing money on the first order, if I'm breaking even or profitability, you can usually spend endlessly, but then it's also saying, "Okay, what's my diminishing return, and is there a better place for that investment?" Yeah. Diminishing returns is I'm losing money to spend. So maybe I stopped spending here on Google because I know that I can get this money losing return on Facebook or Instagram which is actually better. And so that's where forecasting probably has a bigger impact. And we've had those conversations with businesses about lifetime value. And there's some complex math formulas around it, but it can be done.
But then when you're looking at moving budgets, there are some automated tools that brands love looking at. I mean, brands really do love tools that have great graphics and sliding things you can move around and makes it look like you're just doing amazing. And there's one that I really don't like. And it says, "We're looking at your Facebook spend and your Google and Microsoft spend. And if Facebook is at a five X and Google is at a three X, Oh, we're just going to move money from Google over to Facebook and keep spending until they're kind of at equilibrium," because that totally makes sense if you're just looking at math and numbers, but what most brands miss is that those budgets are accomplishing very different things.
And so you have to look at them differently and not necessarily move budget from one to the other, just because a return on adspend goal makes sense like, "Oh, I'm printing all this money on Facebook and I may be breaking even on Google." It should be looked at differently. So generally avoid tools that just automatically move budget to the best performing things. Because for most businesses that doesn't make sense.
Jon:
I think that's a great point to end on today. And I think we've packed so much into 30 minutes here. I really appreciate you as always Ryan educating me on and helping me change my point of view on this, as I definitely came in thinking of SEM as an expense line item and you need to budget and have a forecast around that. And you've definitely shifted my thinking completely around, which is awesome.
Ryan:
One less business owner to educate. I love it.
Jon:
Boom. All right. Well hopefully a few other got educated today by listening to this and we'll continue to spread the word. So thank you Ryan.
Ryan:
Thanks Jon.
In every business there are tools specific to that industry or type of business that will help them grow. Ecommerce is no different. CRO is one of the most important tools to grow an Ecommerce business. Today, Jon dives into the role CRO plays in Ecommerce businesses.
For help with your CRO:
https://thegood.com/
TRANSCRIPT:
Ryan:
Oh Jon, most people start businesses because they've got skills, knowledge, and the desire to control their work and what they're actually doing on a day to day basis. I would also guess most business owners want to grow and in every business there are tools specific to that industry or type of business that help them grow. E-commerce, as we know, is no different. You and I both know CRO is one of the most important tools to grow an e-commerce business and it's never a bad time to grow.
Ryan:
Today I'm really excited to dive into the role CRO plays in e-commerce businesses. You, Jon McDonald, knowing more about CRO than anyone I know, can you start us off today by giving us your thoughts on CRO and the growth process of an e-comm business, at a high 30,000 foot level?
Jon:
Yeah, sure. Well I think the best way to think about this Ryan is that there's only a small number of ways to grow your company just at a high level before even thinking about conversion rate optimization. You can get more new customers, you can get your current customers, or even those new ones, to spend more with you, and you can get your average customer lifetime value up by getting those customers that have purchased to come back and purchase again. Those are really the only three mechanisms you have for earning more revenue out of your business.
Jon:
So, of course, traffic generation can hit that first one really well. We might argue, and maybe you could fill in on this a little bit Ryan, but traffic generation, when done well in digital marketing, can help you also increase average order value. Then remarketing, you can resell to the people who have already purchased perhaps and you can run campaigns around that.
Jon:
But I think if you're really looking to impact the first two of those in a major way, conversion rate optimization is really going to be how you're going to get a higher return on that ad spend and how you're generally just going to convert more of your visitors into buyers. So if you're thinking about growth the biggest lever with the highest return on investment, and of course, I'm biased, but I think that the highest return on investment is going to be conversion optimization because with a small investment in making it easier for people to purchase on your site you're going to get a high value back that's going to be sustainable over time.
Ryan:
Well yeah and I think even on a previous podcast we talked about CRO after the sale even and increasing some of that lifetime value in areas I hadn't even considered actually being CRO. Like even some of the things in the shopping cart post purchase which would increase lifetime value had never even occurred to me.
Ryan:
I think it does play in all three, but I think for most people as they're thinking through their entire e-comm business they're going to probably see CRO in those first two buckets of growth. As you're looking at e-comm businesses and you analyze tons of businesses, is there a place in the growth curve of an e-comm business where you really see CRO as being the most impactful? I'm thinking in my head of a bell curve and growth or maybe you're growing up to a plateau like where would you in a perfect world insert CRO?
Jon:
Well I think that you need to have enough traffic to effectively do certain types of CRO. Let's break this down a little bit. Let's look at this bell curve in three chunks. The first chunk would be the folks who are just getting started, maybe we'll just say less than a million dollars in revenue, which is a pretty big gap there. But that first million what you really need to be focused on is making sure people know that you exist.
Jon:
They need to have an easy to use website but normally you're going after those early adopters who are willing to put up with a little more complications on your site than the average customer. So it's really important for that first third of that curve that you are mainly focusing on driving traffic that is going to hit a very specific segmented marketplace that is going to be your key customers that are going to stick with you no matter.
Jon:
You probably aren't going to be converting much on branded terms because people don't know who you are, so when people do find your site, at that point, you want to make it as easy for them to purchase but you're not going to be able to do things like AB or multivariate testing because AB testing and multivariate testing, et cetera, require enough traffic for you to get results in a meaningful timeframe.
Jon:
So in that first third what I usually would want people to do is when I'm looking at these companies I want to see them collecting data. What do I mean by that? Well are they actually looking at great analytics data? Have they actually ever dived in there and customized it a little bit or is it just they just put the snippet from GA on their site and that's all they have.
Jon:
Couple other things to be thinking about there, like you could easily pretty cheaply get things like heat maps and movement maps. You can do that type of stuff to start understanding how people engage with your website and just make changes based on data. You don't have to test it, right?
Ryan:
Mm-hmm (affirmative).
Jon:
Just make the changes. The best way to test there is just to do week over week or month over month. Now if you're making changes every day that's going to be hard to really know what worked well, but I don't want that to stop brands. They should still be tweaking their site as much as possible and then sticking to perhaps even larger changes in that first third.
Ryan:
In that space, in that first third, a lot of times the business owners generally don't know best practices on website. They know their industry, they know their products well. But how much would you as that business owner trust your gut looking at small pieces of data like that on a daily, weekly basis where you can't actually get an AB test and have full confidence that this is what is better. You just say hey, go with your gut on that because it's probably better than not going with your gut?
Jon:
Well I think that it goes back to the phrase I say quite often which is it's really hard to read the label from inside the jar. I think that with that in mind that it's still as an owner of a site and a daily operator you're still too close to it and you really still need that consumer feedback. Collecting that data and paying attention to it, even if it's only 100 visitors a day or a week, that's still data that you should be looking at. Where are people leaving, what pages are they getting stuck on perhaps, where are they dropping off in the funnel, that's all good information to know where are the holes in your bucket because they're flowing right through that bucket instead of collecting them as revenue. You really need to know where those holes are and that's really what I'm getting at here.
Jon:
The other thing you can be in this first third of that curve, go talk to consumers. You should email every single person who buys personally. There's not a volume at that stage under a million where you can't email every single person individually and just ask them, "Hey, this is me, this is actually me," just start the email that way. "I'm sending you a personal email. I want to know why you purchased and what your experience was." That's it.
Jon:
I have never gotten an email like that and I purchase online almost exclusively now, that's my job. I have never gotten a personal email from a brand. It's always an automated give me a thumbs up or thumbs down, or what's my net promoter score and they're doing it in a really horrible way. I don't want to rate you on a scale of 1 to 10, that's not what this is about. I'm not going to waste my effort there. If you sent me a person email and said, "Jon, thank you so much for buying from me, we're just starting out, as you likely know. If you didn't know, well hey, welcome to the small club. Excited you're here.
Jon:
I want to know about your experience because we want to continue to improve our site. Can we chat for 10 minutes at some point or can you just spend 10 minutes right now just write down your thoughts? Nothing is going to be better than that." There's a lot you can do in that first third that people just aren't doing and that's what I'm looking at these businesses if I'm going to give them a passing grade they're doing at least some of these items and most aren't.
Ryan:
No, I think that's important as somebody that's launched my own brands. You get, as a business owner, so many different directions that many times it's difficult to I think step back and think about okay, if I am selling online what's the most important thing to me right now. If I'm acquiring traffic I need to make sure it's doing the best. I don't like wasting money.
Ryan:
So I think most business owners probably need to do a little more of what I would consider some of that grunt work on their own where maybe it's not going to be your most favorite thing to do, but it's highly important if you really want this brand to work.
Jon:
Right. I think to get to that next level, and I would say that middle of that curve is generally a million to 25 million, big gap. But you can get easily get over a million by just doing what I mentioned. If you put in all that grunt work you will get over a million dollars a year in revenue of your site. Then once you get over that point you will likely start having enough traffic, and by enough traffic, let's just say 40 or so 1000 visitors per month. At that point, if you have 40 or so 1000 individuals hitting your website, and I should say users instead of visitors, there's a difference there in analytics. But when you have that 40,000 users on your site you can now start running AB testing on your site and actually get things to hit statistical significance, which is the mathematical formula that's going to tell you that this is proven with math that it's going to improve the metric you went after.
Jon:
I think that's what's really important here is that once you hit that middle part of the curve that you are really starting to invest in data-driven decision making that is run by testing ... and usually in this part when I'm looking at these businesses, these are the ones who have some money to start growing and reinvesting on a regular basis. It's usually no longer just the owner spending their own money to grow the company because when they got over that million mark now they have some employees, they start having enough margin, ideally, that they can reinvest. Maybe the owner is still involved, but they also might have hired a digital marketing manager or an e-comm manager.
Jon:
So at that point, that's when you really start to see some rapid growth and that's why that band is typically a million to 25 million because you can really grow pretty rapidly in there if you're AB testing in each of these 3 points we talked about earlier, which is the first time visitors, getting people to buy more, and then also a repeat customer. You can start optimizing all three of those because you have enough traffic going far down the funnel where you can even run tests in the checkout, which typically is going to be one of the pages that has the least amount of visitors to it because you're only in checkout if you're actually going to buy something. That gives you a wide range.
Jon:
Now if you're over 25 million, what I really start to look for there on that growth curve at that point is these people have in-house teams, generally, focused on optimization. They've proven out the value in that middle tier and now they've moved up to the top tier and they can start having a whole team centered around this, and if they don't, they realize that they're missing out. They know that they're missing out but there's something else holding them back from doing that.
Jon:
Generally, that's when they also either start to outsource that or they're looking to augment their team and come up with some additional new, fresh ideas because at that size they start to realize that they're too close to their site and they need some outside ideas. It could be as simple as they're just looking for test ideas or it could be as simple as they want to accelerate their testing and do more of it, or they want to train up their team and refresh the skillset there.
Ryan:
Got it. So grunt work "CRO" what we termed an earlier episode CRI where you're just making improvements to the site that are removing some friction even if there's not tests to back it up, you're just seeing some of the friction. Really it's 40,000 visitors, million dollars plus in revenue, really want to take the next step and grow. If you don't want to grow you're probably not even listening to this podcast.
Jon:
Right.
Ryan:
So you're probably not appropriate for this anyway. But here's something I don't think I've ever asked you about this, and I don't know why. Obviously when you're doing CRO on a site it's impacting everything all the site, all visitors are going to convert better once CRO process is going. What traffic channels generally see the biggest uptick in conversion rates once you've started the process and you're really seeing some good improvements going on? Is there a certain part of the site or type of traffic that you're seeing as just takes off really, really well?
Jon:
Well I think that it can affect the entire lifecycle of the customer, as we talked about earlier, and thus all the different types of channels once they get to your site. Now in terms of traffic generation channels, I think that generally what we see return on ad spend does improve because you're getting more people to convert. Now at The Good, we focus exclusively on onsite test, so we don't do any testing offsite, so we're not testing ads or any of that type of stuff.
Jon:
That's where Logical Position in your team comes in. But what we do see here is the match between having a successful ad campaign direct that visitor to an optimized portion of the site, that is like adding fuel to a fire. At that point they both become way more effective. So there's definitely synergies there.
Jon:
Now in terms of overall channels, generally, we see organic go really, really high. This is because people are already looking for you. They already know you exist. At that point, they've made their mind up that they likely want to purchase, maybe they heard about you through a friend, or it's all those channels that are going to have the people who are going to clearly fit your ideal customer profile.
Jon:
Now you're going to see those organic numbers really start to increase and improve because you've made the site easier to use. You've reduced all of the barriers that person who already really wants to buy that they're not going to get as frustrated. They're not going to have a reason to desert like they had prior to optimization.
Jon:
So that's one of the benefits because at that point you can get your cheapest traffic to be optimized and convert higher, then that's where you're going to see a massive return on your investment. But that's not to discount that you would see higher conversions from people who come by clicking on an ad and I think that's really going to be valuable in terms of return on investment. So there's a couple ways to look at that.
Ryan:
For a business's initial foray into CRO do you recommend their focus be on increasing the number of conversions, increasing the average order value, something else, or all of the above at the same time? Is there an order that I should be looking at those as a business owner?
Jon:
Yeah. I think that unfortunately The Good is in an industry called conversion rate optimization, so a lot of people come in with the expectation that conversion rate's the only metric that matters. Now I totally understand that 100% matters and if you can move that lever then you're going to see a massive return on your investment in it. But there are a ton of metrics that you do want to be looking at that are I would argue as valuable, if not more valuable and more sustainable. So if I get your conversion rate to double or I get your average order value to double we're going to have this very, very similar outcome, mathematically. People spend twice as much or let's just break it down, I get 100 people to spend $2 or I get a 100 new people to spend $1, we're going to make the same amount of revenue, right?
Ryan:
Mm-hmm (affirmative).
Jon:
So I think you want to look at these metrics more holistically and then develop a plan to one, analyze where your weakness is. Maybe you already have a really strong steady conversion rate and it's more about getting your average order value up, or maybe you notice that your cart abandonment rate is really, really high, or maybe there's not enough people even adding something to a cart, so there's all these clues, there's all these clues around why people aren't buying.
Jon:
If you just focus on conversion rate you're going to be, as a consumer, an untrained eye or maybe just somebody who's in that first band of up to a million dollars. They're going to go online and read a bunch of articles about improving conversion rates, and the reality is, a lot of them are just going to start running discounts, do pop-ups. Do all these that will show you an immediate boost of numbers but it's not sustainable in any way. And you start having long-term systemic issues where you're stuck on the discount train and once that discount train leaves the station your consumers are always going to be expecting discounts at every single purchase and every single stop, and that's really hard to get off the tracks once that happens.
Ryan:
And that's not a fun business.
Jon:
Right. Nobody wants to be in the business of, how do I put this, of giving everybody free stuff. It's basically what it is if you over discount. So I think you really want to be thinking about what metrics are most important to moving the needle for your business. The only way to do that is to go back to what I said earlier, which is early on in your business you need to set up the right tracking. You need to get used to looking at the numbers and you need to start making data-backed decisions. If that guides you into understanding where your metrics could be improved then that should be where you're going to start working on your optimization moving forward.
Ryan:
Oh man, and I will double down on that statement. I have talked to so many businesses in the startup process or they've been in it a couple years even and they're with a platform like a Shopify or a Bitcommerce and they don't have Google Analytics. How are you looking at your business, oh I just look at the back end of Shopify or Bitcommerce. It's like wow, there is so much more available in a more robust analytics platform than just your shopping cart or the web platform that you utilize that I think both can be important for various things, matching each other up, verifying certain things are working, but for sure make sure your analytics is working and tracking reasonably close. Because even with the Shopifys and the Bitcommerces of the world that have 1000s, millions of users if you're Shopify, the implementations of analytics do not work the same on each one of those. They don't line up correctly all the time, so you got to make it at least line up as close as possible.
Jon:
Yeah and there's one thing that one of your team members at Logical Position, Brian Aldrich, he really hammered into my head over the years. I've seen him speak at the same events all the time, and stuff. He always says, "You need a single source of truth." Unfortunately, if you the e-commerce platform be your single source of truth you're missing out on a full picture.
Jon:
So just getting started early on using Google Analytics, or some analytics package, I mean I don't know why you wouldn't use Google Analytics for this, but make that your single source of truth because no two analytics packages are going to line up exactly, and I think that's the point you're making.
Jon:
But if you just look at one of them like Shopify's built-in analytics that's great for at a glance how did I do day over day, et cetera, but the reality is, it's not going to help you optimize your site so you really need to have that real truth, source of truth, be something that is a full picture of the consumer experience.
Ryan:
Funny enough, analytics is top of my mind because I had a contact from another one of our partners. He's going off to look at other businesses to get involved with and one of them was an analytics company, so he had me sit down and talk with him to see what it was about and if it had some validity. They started their pitch at me was, "Well you already know analytics is bad, right? Google Analytics?" I was like, "Well, no."
Ryan:
Their whole thing was like oh yeah, Google's just bad. Google Analytics is bad because it gives itself too much credit and doesn't actually let you see the full attribution of everything. I'm like, well, I mean I don't believe that. But you see it's probably more in depth analytics products across the board. Does one in particular stand out as a business owner when you're looking at things? Is Google Analytics okay but actually bad or is it Adobe is way, way better, or something most companies haven't heard of that they should be looking at in addition to analytics, or instead of?
Jon:
Well I think you make a good point here and that's that every analytics package is going to be a little different. The thing is it's all in how you use it and the consistency in which you use it, it doesn't matter which platform you use. Also, a startup doing less than 10 million, they have no business looking at Adobe. They can't afford it, just be upfront about that. So it's also what is your return on your investment going to be?
Jon:
If you are spending a ton of money to get some data but you're not utilizing that data to get a return on that spend then don't do it, what's the point? This is where Google Analytics really serves in a great need is yeah, look, you're giving data to Google, if you're not paying for it you are the product. So the reality is it's a trade off. A lot of people think there's privacy issues in giving that data to Google, and whatever.
Jon:
Reality is that if you're a site doing under a million dollars a year, or even way more than that probably, Google doesn't care about your data, quite honestly. They've got bigger fish they're working with. The reality here is that out of the box Google Analytics is a great tool to get started with. Then if you don't ever touch it and you don't customize it, yeah, there's going to be better tool sets out there that come customized out of the box. But what I highly recommend is that you start learning early about Google Analytics, you learn how to set up custom dashboards, you learn how to feed information into GA through events on your site.
Jon:
There are limits on what type of personally identifiable information you feed in, but you can still feed in stuff without tying it back to a user pretty easily. You don't have to send a user's email, or an order number, or a phone number, or any of that kind of stuff into GA to warehouse it there, but you should be able to feed in whenever someone buys a product you can event that says this product was sold and this is the dollar value. That's not tied back to anybody.
Jon:
So I think there's a lot you could be thinking about there that could extend the Google Analytics to do everything you need and it's going to happen pretty easy out of the box. Now if you're looking to do segmentation that's really drilled down and have a lot of other information, you're going to need tools on top of Google Analytics to do that. But quite honestly, Google Analytics is great for the vast majority of brands out there.
Ryan:
Good insights, I appreciate that. As we're winding up I do have one more question that maybe it's interesting for people or not, but what's been the longest CRO engagement you've been a part of?
Jon:
Yeah, it's a great question. If I understand why I usually get this question it's because people want to know how long can conversion optimization influence growth. Is that basically where you're going with this too?
Ryan:
Yeah, it's like is it 2 years, is it 10 years, is it 6 months.
Jon:
I have a couple of answers to this. The first is that we've been in business over 11 years and if conversion optimization was not a sustainable thing then there'd be no way we'd be in business this long. I think the longest that we've been, I would say, we had a customer for four or five years and the engagement ebbed and flowed over time, meaning that we would sometimes be launching a lot of tests and sometimes just be holding their hand as they went through changes and coming back and forth. But they were a paying customer of ours for a handful or quite a few years, however you want to look at that.
Jon:
Now an average, an average goes about two years. Right around that timeline is when I see an average customer that we've helped them get to that next level where we have helped proven the value of conversion and optimization to the point that senior management decides this line item, that's not going away, so we should probably hire and bring that team in-house. I applaud that. I think at that point it makes sense.
Jon:
If you have a brand that has grown and you've used optimization, and you know that you're going to continue doing this, and you have successfully changed how you think as a brand to where you know that you are going to use data to make decisions, that you're going to put the consumer interactions on your site first, that you're going to really, truly care about your consumer's user experience on your site and the customer experience over all, then great, we've done our job.
Jon:
We have fulfilled The Good's mission of removing all of the bad online experiences until only the good remain. If I can do that at a brand and help them eliminate all of that, and want to have that same mission, and carry the torch, then I applaud that. So I think after about two years is generally when I see brands start to take that in-house, but there's a lot of brands who decide not to and continue to work with us beyond that.
Ryan:
In the CRO process does it ever work where you can start and stop constantly like hey, I want to do a three month here, stop for six months, do another three months, six months, stop, does that ever work or is that just more butter and can't finish the process when you start and stop constantly like that?
Jon:
Yeah, look at it this way, if you want to run a marathon are you going to train to win a marathon by one week running and then taking a couple weeks off and then running again? No. You need to build up [crosstalk 00:27:03].
Ryan:
Did you get my training schedule?
Jon:
Yeah. I'll leave that one.
Ryan:
Yeah.
Jon:
But I think it's interesting, a lot of brands and business owners approach it the same way, they just feel like hey, well I can go optimize my site right now and do this once, and be done with it. That's not how it works. I think anyone can go out and do this checklist but that's just step one, that's really just the beginning. So I think all in all that when I see that and I try to set that expectation upfront and when somebody says, "Yeah, I'm going to do this for three months and then reevaluate," it's like well you know what, we can always reevaluate. We can just have that conversation at any point.
Jon:
But if you're only truly going to do this for three months then we're not going to be a good fit. In fact, do not spend your money on optimization at all because it's not going to have a sustainable long-term impact. You're better off just taking that money that you are going to spend and just running a bunch of discounts on your site, or spending it to drive a lot more unqualified traffic, or doing a lot of other things just to get your brand out there.
Jon:
But if you really truly want sustainable investment and optimization it needs to be a small amount spent on your site in a regular interval over time and it needs to be a long-term line item. So spend each month and compound that growth very much like a retirement investment account. You need to put a little bit in with every paycheck and then eventually you're going to start getting a lot out of it that it's going to just grow and grow and grow over time.
Ryan:
That is a phenomenal analogy, I think, for what CRO and what you should be looking at it as. Thank you Jon, I appreciate all the insights today.
Ryan:
Is there anything I didn't ask that I should have or a point that you wanted to get across in this topic that you couldn't get in there?
Jon:
I think I wanted to emphasize that CRO can be done at a company of any size, it's just the methodology in which you're going to do that. So I think you have the option to look at getting some data and making data-backed decisions at any size company. How you might use that data and approach, are you going to use that data to run AB testing? No, not for every size company.
Jon:
But I do think that there are options for every size company. So the mistake I see small brands make is that they feel like they can't do optimization because it's just too expensive and they look at it as an expense instead of investment, and perhaps they're intimidated by the data. But I think that there's a lot of options out there.
Ryan:
Jon, thank you as always for enlightening me and teaching me something new. I appreciate it.
Jon:
All right, looking forward to the next chat Ryan.
There are so many folks selling “search engine” services these days. And a lot of that is “snake oil” –– especially when you talk about “search engine optimization” or SEO. And this no doubt bleeds over into the SEM – or “search engine marketing” field too. Today Ryan unpacks just exactly why SEM is so hard to do yourself.
For help with your SEM:
https://www.logicalposition.com/
TRANSCRIPT:
Jon:
There are so many folks selling search engine services these days, and that is a lot of snake oil out there. Especially when you start talking about search engine optimization or SEO, this no doubt bleeds over to SEM, or search engine marketing field, as well. The challenge that I see here with SEM is similar to what often happens in my world with conversion rate optimization. There are a ton of free resources out there, checklists, how-to articles, online trainings and certifications, and most of them are too high level and broad to actually be helpful with the e-commerce site. In my view, this really makes SEM very hard to do yourself, especially if you're an e-comm owner.
Ryan, today I'm really interested in your thoughts about search engine marketing and why and what makes it so difficult to do it yourself? I really can't wait to get schooled by you once again. Ryan, let's start maybe with what your definition of search engine marketing is.
Ryan:
It's not complicated, for me. Search engine marketing involves making sure that you are showing up when people are searching for your product or service. As long as there's an intent or a search around that and an active process of putting something in, whether that's voice or typing, texting, it's ... they are searching for it. For me, the biggest ones are obviously Google. Bing, which is now Microsoft Ads. And then I consider Amazon Ads search engine marketing. Yahoo's in there but they usually just get powered by Google and Microsoft Ads themselves. In all of those platforms they are searching for it, and you can design a specific ad in that system to attract that searcher.
Jon:
That's interesting. I just heard something that brought up an interesting point for me. I've always thought about search engine marketing just being on search engines, but there's so many things out there that are search engines right now. YouTube is the number two search engine. Would you consider showing up in results and marketing around YouTube part of this?
Ryan:
I guess ancillary, to a degree, yes. It's part of Google. Google owns YouTube and you advertise on YouTube through the Google Ads platform. When you're capturing searches on Google looking for your particular product, you can also have YouTube ads, as far as remarketing.
The difference I see on YouTube versus general search engine platforms is that a not a lot of people go to YouTube to find the product to buy. They may be doing some higher level research on looking for reviews. If I'm looking to buy a Bluetooth speaker, my dad just bought one for his neighbor, he had to do some research and figure out which one was going to be easiest because she's 80 years old. You can go on YouTube and find some reviews about ease of use or older people using Bluetooth speakers, and see which one's easiest. It's a research process, more, on YouTube, then it'll be, "I need a Bluetooth speaker now. I'm going to go to YouTube and buy one."
Generally that's not how people are trying to transact yet. They can transact with Google or go to the website and buy it, or they go to Amazon and buy from the Amazon platform.
Jon:
That definitely makes sense. It's ancillary there but it's not the main way you would define it. You're thinking Google, Bing, those type of search engines at this point?
Ryan:
Yeah. They're actually searching for the product or service. That, for me, is the big key. In the paid realm, it involves a lot of things outside of a search engine. You can pay for display ads that are prospecting, they're not searching for you yet, or you're remarketing through those ads that can happen across the internet. You have social ads where you're marketing to followers of your brand or trying to find new followers and get your products in front of them for them to try, but they're not actively searching for that product. You're trying to get them to search for that product. So search, generally, I see further down the funnel.
Jon:
Okay.
Ryan:
[Crosstalk 00:04:18] a cut when people are not searching for it.
Jon:
That definitely makes sense to me then.
I know this is a high level question but it is the topic of the episode today. Let's just dive in. What makes SEM so difficult to do it yourself?
Ryan:
Jon, that is a great question because it crosses the mind of almost every business owner as they're looking through a [PNL 00:04:38] and see the charge for an agency or an individual that's managing their marketing, like, "Well, why can't I just save this money, put that in my pocket, or develop something else with that extra money monthly or annually?"
The real answer is because the search engines are constantly changing. What is currently happening on Google or what you currently see on your phone or your desktop when you do a search, is not the way it's going to look in a couple months, six months down the road. That constant change means that you need somebody or something to keep on top of all of those changes constantly. Just from the Google algorithm of ranking organic results, I think there's 500 to 600 changes every single year to that algorithm alone. If you've been in e-comm long enough, you've seen a huge change around the paid side of things. You had Frugal 12 years ago, 10 years ago, where all of your clicks and shopping were free. Then it changed into PLAs, then the Google officially called it Google Shopping and then there was Smart Shopping.
In between those big shifts, there was all these little changes. Constantly new ad sets, new placements. We now have ads that show in Google images. We have Google Shopping showing all over the place and being able to dissect and see which ad types are working versus not working. It's crazy how much development we have to do internally to keep on it, and we have 700 people at the company constantly researching, studying. And then we have that group think kind of thing going on. But that amount of change is astronomical, and I've been in the industry for 10 years.
My general thought is, I've been studying to be an expert for over a decade now, and I'm still, by no means, the smartest person in e-comm marketing. There's people like [Frederic Filloux 00:06:19] whose brains are ... I'll probably never catch him, but if you're a business owner or a marketer and you've not been studying specifically how to be the best possible expert in paid search, for example, you're going to beat ... get beat by somebody that's been studying it to survive or as a career path, or because they're super passionate just about paid search.
I think understanding that dynamic, it makes it difficult to say, "Oh, yeah, I probably should DIY this to either save some money or because I think I can really do it well." I think about it as, you're going to be in a fight with somebody, because that's kind of what paid search is. It's your money versus theirs, your ad versus theirs, for the consumer at the end of it all. You could be a decent fighter, but if you're not a professional, you're not going to jump into the octagon and try to take on somebody that does this for a living and eat, sleeps, trains, and breathes ultimate fighting. It's not going to happen.
Jon:
We don't need to get kicked in the face because you have not been training, right?
Ryan:
Exactly.
Jon:
Let's break that down then. There's two possible options if you are going to work with an expert. There's the contractor and there's agencies. What's the difference between hiring that really passionate individual versus hiring that agency with 600 employees?
Ryan:
This is a good one. There are some highly talented contractors in the world. Very, very good. Some of the best people at an agency will go off on their own and take one or two clients and just operate those clients. Nothing bad with it, it happens regularly in our industry. The problem is for the majority of contractors, their life's going to evolve. If you get a contractor, let's say when they're 25, it's just them, they're traveling around, enjoying life, managing a couple of clients. Great lifestyle for them. Let's say they decide to take steps and have a family where maybe income needs to increase. Well, if your company is not providing enough income for them, they need to have more clients.
Generally in America, you want your business to increase in value or you want your work to increase or your income to increase. Most contractors are good for a little while and then they want to scale. They want to get bigger. That means they have to also look at acquiring and so they're stepping away from just managing your account and figuring about, "How can I get another account?" or, "How do I insulate myself if this client canceled so that I don't have a huge income hit and starve for a few months until I find another client?" There's always going to be this dynamic with a contractor of growth versus taking care of what they have versus how do they protect themselves or insulate themselves from clients that eventually will cancel? That's part of it.
The other part, I would say, is when somebody is doing nothing but working on your account they will know your account intimately, but are they going to be able to see other things coming down the road or learn new techniques from an account that they wouldn't be managing because they're a contractor, but they can learn from the person sitting next to them in an agency? I've seen a lot of group think that's helped. We've, at least at our agency, have repurposed a lot of things that Google intended one way, completely different way, and it worked phenomenally well.
For example, this beta, we did one that was intended for the travel industry. They were showing these big, beautiful images when you search this destination. We're like, "Wow, that is just awesome." We didn't have a tremendous dearth of travel clients at the time but we're like, "That's really cool beta." We're like, "I wonder if we could get one of our e-comm clients to show product images in there when somebody searches for a product." So we went to our Google team and was like, "We think this has some validity with this client here. Do you think we can get him in the beta?" They're like, "Let's get him in the beta."
Worked phenomenally well. They crushed it. I think they had it for four months and then Google sunset the beta because it didn't actually work as they intended it for travel, but it worked phenomenally well for e-commerce. So we had an eCommerce client using something in a different purpose, that if we didn't have a breadth of clientele, we wouldn't have even heard about that beta and seen that. Also, Google does have some teams that help agencies that they may not be at the same level or even can have the resources to help aid just a contractor. Sometimes it can but most of the time you're going to have additional resources that Google throws at an agency because it scales Google better.
Jon:
They're more of a partnership there.
Ryan:
I also worry about the bus. If your contractor gets hit by the bus, what happens? If they're stuck at a hospital, you don't even know because they didn't have to notify their client when they got stuck in the hospital. I like having backups in place.
Jon:
That's a good point.
Ryan, let's dive one step deeper on this then. You were at a small agency previously before you were brought into Logical Position. Now you're with a large agency with over 6,000 clients. What should people be thinking about between a small agency versus a larger agency?
Ryan:
Having seen both sides, I do have a little bit of a unique perspective. When I was at a small agency, I really liked being small and nimble and being able to pivot. As a CEO of that agency, it was great to have all of these options. If I saw something I wanted, I was like, "Yeah, let's go do that. That sounds like fun." At a larger agency, there may be a little bit more red tape when I want to just go do something. We have to get some people aligned and make sure it's not going to impact other parts of the business.
From a client, I get some clients that have said, "No." They don't want to work with us at Logical Position because they don't want to get lost inside a large agency. They want to be more important to the agency that they're working with which, I can see that. As a business owner myself, I'm like, [inaudible 00:11:40] my vendors to care about me and pay attention to me. So some of them are like the big fish, small pond.
There's some good things about that. I think most agencies in the U.S. are not as big as us and so most agencies I would consider small. They can be hyper-focused on industries so there's some ability, if you have clients that operate locally ... I know there's a really big agency, actually, that focuses just on flooring. Most flooring contractors and suppliers operate locally and so they're able to just be very, very good at saying, "We know how to market flooring. We're going to do it in Dallas for this company and this company in this area of Dallas," because there's not as much overlap. In the e-comm space, generally we're all competing with everybody in the U.S. for eyeballs, for clicks, and for sales.
I personally want the absolute best for my marketing, whether it's big or small. That part becomes, if everything else is equal, I generally like more resources in my vendors. They are more insulated. They're more protected against employee turnover. They're more protected against a power outage and one office can be compensated for in another office. Generally more security measures in place at larger organizations. This is obviously generally speaking.
That's just a personal preference of mine. I've seen the difference at a larger organization. That group think is just expounded upon if the agency is run well. We have people dedicated to strategy. We have omnichannel strategy team that our clients don't pay for but they rotate through all of the clients and help their clients understand omnichannel strategies and maybe things they weren't normally thinking about in their paid search conversations that has to do with, "Your social strategy, maybe you need to look at this," or, "Your wholesale or direct to consumer through brick and mortar, maybe we need to talk about this," or, "Here's some partners that we have over here that may be appropriate."
I think it's the overall resources we can allocate because of scale, it's pretty impressive. I didn't dislike boutique, but, man, our clients have so many more resources now under the Logical Position banner than they had beforehand. I think our skillset and optimization strategies have evolved at a much quicker pace with all the people involved in hiring new people and new blood to give us fresh eyeballs. We may be doing things one way and somebody else comes in and like, "Well, you could really change this and do it that way." And we're like, "You know what? We never even thought about that because we've been doing it this way for three years." Now we have another set of eyes that's fresh and they're like, "That could be done better."
Jon:
We've talked about what search engine marketing is. What's the difference between working with a contractor versus doing it yourself versus hiring an agency of different sizes. What if somebody who decides, "I'm not at the point where I can pay somebody for this yet. I need to do search engine marketing to get started. I know it's going to be difficult to do well myself, but I want to set myself up so that I can transition to that agency and get some help down the line," what are some good ideas for how they should get started? What should they be thinking about as they're diving into this?
Ryan:
I think people starting off, you need to start with the idea that you're entering the marketplace and you haven't been there yet. What I look at is there's been homeostasis across the marketplace as it sits now, and you're going to put a new competitor in there. That's going to have an impact. As the new competitor that doesn't have the data that the other competitors do, whether the other competitors use it or not, it doesn't necessarily matter. They have some data if they want to use it, you're coming in almost blind saying, "I think this is going to work. I want to pay for clicks and traffic to my site." That disruption, you need to probably default to aggressive.
Aggression can mean many things in the e-commerce SEM space. When I say it, I'm meaning that you are willing to take less margin-per-order to capture market share and start collecting that data fast. If you're going to compete nationwide, e-commerce in the paid search realm, you're probably not going to compete well by spending 100 or 200 bucks a month. If that's your budget, there's probably better places to put it. I generally say, if you're not going to start with at least 2,500 bucks, I think you could probably do better things with it. This is not a fast and true across all industries, all e-comm period, but as a general rule, do that. Then you also need to commit to it for at least three months. Basically you're looking at 7,500 bucks of marketing to be able to get a good gauge. In a perfect world, you're going to go at least six, but the shortest I would go would be three months to get this data.
Jon:
What I'm hearing then, Ryan, is if you are going to dive into this, you likely should be looking at spending a decent amount of money. If you're spending that much money though, then it does make sense to have someone manage it. It's like, if you have a lot of finances personally, you should have someone helping you manage that because you can't be looking at it every day, adjusting your investment. That's kind of what's needed here, right, is somebody to help look at that?
Ryan:
Oh, yeah. In fact, I actually tried to start up a domain called, Search Investors, because I wanted people to see us as investors where you're putting money in, and our job is to make it do what you want it to do. It is complicated. Just like I don't manage my own money, my investments. I don't have the time to dedicate that somebody that knows the investment world and can prepare for ups and downs and get my money doing what it's supposed to do. I'm not even passionate about it. It's like, "Just go make it happen. I'm good at maybe bringing the money in and you're going to be good at making it grow once it's in."
Yes, that is part of it, is once you're going to spend 2,500 a month, it does make sense to have somebody that's really, really good at this to give you the best shot at it. If you're going to spend less than that, you can probably get a little more creative. There's some areas you can probably be spending money. One of the great ways to start would, if you wanted to truly spend 500 bucks, put a gun to my head and say, "You have to come up with an idea for 500 bucks a month." I would say, "We're going to go onto Microsoft Ads because the competition is lower there, the search volume is lower. You can maybe test the waters a little easier. The platform itself is a little more difficult to work in, maybe, than Google, but it's still generally the same thing. Track your sales and orders there through that process."
Even then, I think 500 bucks a month could be spent more wisely at growing an e-comm brand. Maybe if you also sell on Amazon, Amazon Ads may be better. There could be a better place on social media to be spending 500 bucks on an influencer to drive some sales. Even doing some SEO at 500 bucks a month may be more valuable for your brand than $500 in paid search. Could be. Every situation is different. I don't even do my own ads because I know there's people better than me. I'm fairly good at the ad piece, but I know people that are so much better than me, I'm like, "All right."
I'm playing this game to win. I'm not playing it for fun. My businesses aren't ... they are hobbies because I just enjoy them, I'm passionate about business. But at the end of the day, I want my businesses because I believe I'm the best at what I'm doing there, to be the biggest and the best because I'm going to be able to help more people. I use my resources and thoughts saying, "If I'm really good at the marketing piece, I'm going to capture a larger market share, I'm going to have more of the market, and there are going to be more people that know me and are happy with what's going on versus my competitors, which maybe aren't as good as I am."
Jon:
Within the past year we've had this global pandemic. I'm wondering, how does that change some of what you're thinking about here around these items?
Ryan:
I think it's even more important to have experts that have lots of data behind what they're doing. We've had global pandemics which are relatively new [inaudible 00:20:01] States, at least since we've been alive. The last big one we had, you can look back at the Spanish Flu of 1918, but there's not a lot of people that have been alive that experienced both that one and then we've had the coronavirus going on.
Changes like that, I think, are going to become more common in the online space. It's just going to shake things up and cause people to look at data differently or transact online differently. I think people with more data and more access to it are going to be able to see trends quicker and pivot clients quicker or test more things at the same time. It is, to a degree, another argument for maybe a larger agency, that when you have 6,000 clients that you're talking to monthly that you're seeing what they're doing in the marketplace and you're seeing, "This business owner tried this over here, look at how good that worked. Hey, we've got a bunch of other clients that can now try that or experiment with that in their business." It's almost like CRO across 6,000 clients, to a degree. Not necessarily CRO but you're seeing all these various things happening and all these AB tests going on that we can look at our Google MCC and see, "What is causing that client to go crazy right now? Let's dive into that."
It's, I think, more important to have somebody that just understands. As we get more and more experienced with these massive global hiccups, if you will, we're going to know how to react better and better as a society. I think also, generally experts react even quicker to changes. You play a lot of basketball, and when they started shooting more three-pointers in Golden State, they had people that adapted very quickly to that. Then even just a couple of years later, the best basketball players in the planet weren't able to do as much as they could have before against that offense or against the defenses they were setting in place.
The experts will evolve the quickest, and now you could probably still go into high school basketball and shoot three-pointers all day and that same exact Golden State offense will work really well at the high school game.
Jon:
Now it's changing, you have seven-footers shooting three-pointers.
Ryan:
Oh my gosh. Never would have thought before. Manute Bol when I was a kid [inaudible 00:22:01] shooting three-pointers.
Jon:
Yeah, I wouldn't have thought that.
This has been really insightful. As usual, it comes back to expertise. If you have expertise in this industry, you will do way better than if you're just trying to do it yourself. Getting that expertise on your team is really going to drive the results for you. It's just so hard to know what's out there, what is all that data? It's hard for you, within your own little world of just you and your company, versus having a partner who is seeing this across 6,000 clients and seeing the trends and data. That's really interesting to me.
Any final thoughts here, Ryan, before we wrap up?
Ryan:
I would just say there's very few scenarios in which I'd recommend a business owner or high level marketing executive doing in ... being involved in the minutia of digital marketing. Even if you hire a small agency or large agency or contractor, that time alone can be better spent in other areas. If I come across a business owner that's doing their own marketing on Google, I know there's nothing happening on there. They may log in every day, but you see the changes they're making, it doesn't have anything to do with optimizing the account. Maybe a couple of negative keywords but that time spent working on the business would have way bigger dividends if you'd hired somebody to handle that piece and moved on to that. That's what I try to do in my business is just, "Where could I find people that are smarter than I am?" And it's most often in almost every area.
Jon:
Yeah. I call that, best and highest use. What is your best and highest use? It's probably not messing around in AdWords or Microsoft ads. It's making sure that you spent the time to find somebody who is an expert to help you, and making that effective.
That's a great point. We didn't even talk about the return on investment today. I think that's a really great point that people should be thinking about here.
Ryan:
Make more money on your time and money.
Jon:
There we go.
Ryan, thank you so much for educating me once again. I've been schooled on what makes search engine marketing difficult, to do it yourself.
Ryan:
Thanks Jon.
Today Jon takes a look at how to improve your category pages on your website. He'll explore what you should know about headers, footers, navigation, bread crumbs, and more!
For help optimizing your category pages:
https://thegood.com/
TRANSCRIPT:
Ryan:
Hello Jon, and welcome to the podcast.
Ryan:
I was digging through one of our shared clients analytics, and this is a rather large international brand that most of our listeners would probably recognize if we mentioned their name. And outside the home page, the largest volume of traffic to their site is condensed into just a couple category pages. Now that's not unusual for a lot of major brands because of Google's algorithm, on the organic side, favoring category pages over product pages. But it also means that there's a huge opportunity for a brand capturing a lot of this traffic to really make that traffic work better on category pages specifically.
Ryan:
So through this, I'd really love to hear some of your suggestions and best practices on improving those category pages. And maybe even at least some tests people can be testing as they're looking at their category pages to make some improvements. Kind of like our CRI name we coined. What do you think of that category pages and the importance of them? And should we continue down this path?
Jon:
I love it. Let's gain some knowledge on this.
Ryan:
Fantastic. So most of the listeners probably haven't had the amazing opportunity I have of hearing you talk about landing pages as much, and just seeing some of your tear downs. And so as with most of these, let's start at the top and kind of work our way down, and even some of your general best practices, probably, in header navigation can be applied to other places of the site. Especially if you keep it consistent. But do we need to think about mobile and desktop separately in this scenario? Or just pick one and go with it? What's your usual recommendation?
Jon:
I would recommend that we start with desktop and keep it to that for today. The reason being is that even with e-com, I think we're seeing the vast majority of traffic is now on mobile, but still a very, very large majority of conversions are happening on desktop. Now that varies from site to site, of course, but I do believe in what we see here at the good on a daily basis is conversion kings is still on desktop. And so it always makes sense to start there. The other reason is that if you fix your desktop experience and you have a responsive site, that should, for the most part, filter down to your mobile website. And so there's no longer just a desktop and a mobile version of a site. It should be responsive or adaptive for the most part. And so with that in mind, I would highly recommend starting with desktop. And then of course you could look at mobile later, but I think for the point of today's show, we could just stick with desktop.
Ryan:
Yeah. And if you do maybe have a mobile site and a desktop site, you may need to contact us because we may have some abilities to fix that [inaudible 00:03:12], because that's probably a struggle for your business. There's maybe some lower hanging fruit for you, before you get into Jon's conversation about it.
Jon:
The number of sites I still see, it's dwindling. But there is still a number of sites out there that they have mobile on a separate domain. And that's always... It's like M dot, the domain dot com. That's when I know there's a bunch of opportunity there to increase sales and conversions.
Ryan:
God, John knows he's going to make that company a lot of money when they listen to them.
Ryan:
Okay. So let's start right at the header, very top as you're scrolling down this page as soon as you come onto it, a lot of companies do things that are not great in the header. What are some of the things that they're putting in there maybe that aren't needed or that distract from the actual conversion that they're attempting to get these people to take on the site?
Jon:
Well, I think the first thing is that it always blows my mind when I see a header, and these brands invested so much to get people to their site, right? Whether it be content marketing or paid ads or SEO, whatever it is. And then they immediately show them social icons, and show them ways to bounce off the site. Right? Social is great for getting people to your site, but once they're there, keep them on your site. Don't send them back out to those channels. And so really be looking in the header to keep people on a site, as opposed to sending them back off through something like social links or icons, things of that sort. That's the biggest one I see.
Ryan:
Okay. So as far as distractions, social is the biggest issue there. What are the things that maybe companies are missing out on in that header that they should be thinking about putting into them?
Jon:
Well, I think that the biggest thing people miss out on is just communicating very simply what the brand is, what the value proposition is.
Jon:
Now, most people don't think about including that in the header. And I'm not suggesting putting your entire company story there, your entire value prop. But what I am saying is you can communicate these things through perhaps your navigation and the language that's being used there through the utility navigation, through what's the lines of texts that goes right next to your logo, right?
Jon:
So a lot of people will just put a logo up and expect that because they're on your website, they know exactly what you do. Well, think about it through the eyes of a new to file customer. That customer just got to your site by clicking on a link that a friend posted on social. They have a little bit of context, but it would be great to get that reinforced and the first place, especially in Western cultures, folks are going to look is the top left corner of your site. That's generally where people put their logo, but then they miss the opportunity there of including additional context. Could be just one sentence or one line, does not have to be very huge and it can be blended in with the logo, even.
Ryan:
Dang it. I am taking notes. I think I need to go to some of my brands and add some, maybe, lines of contexts.
Jon:
Well, if you want a good example just go to thegood.com and look what we do in the top left hand corner right next to our logo.
Ryan:
No, that's brilliant. And I think as a business owner myself, and working with brands constantly, I'm in the business too often that I don't step out of it often enough and think about the perspective of a brand new user. I clicked on a link, maybe not even necessarily thinking before I clicked, and boom. Logo. I'm supposed to know what you do right before that, but probably I don't.
Jon:
Well Ryan, this applies to you based on what I'm hearing right now, but it also applies to almost every e-com brand and e-com manager. Is that it's, and I've probably said this a hundred times on this show already, but it's very difficult to read the label from inside the jar. Right? You are so close to this, you probably helped to wire frame out the site, design it, define the navigation, lay out all the content. And so you're so close to that, that you know what each link does, you know what the site is, you know your value prop. So it doesn't occur to you that other people might not get that, might not understand it. And it could use a little assistance there.
Ryan:
Yeah. And you've helped me a lot on navigation so I'm going to jump into that in a second. But before that, site search is a often misguided location on the site. Do you recommend that as high up as you can, as obviously as you can in the header? Or do you recommend other places on the page for that?
Jon:
I am not opposed to having search be front and center. Having search front and center is great for people who are second time visitors or repeat visitors to your site. They know exactly what they're looking for. Think about things like a car parts dealership, right? Or car parts retailer. People may come and know exactly what model number for that very specific part that they need. They're definitely going to know what car model that they want to put that on, so they might just search by that car model. So anyway you can give people a shortcut down the funnel, and skip steps of the funnel so that they can just get to exactly what they need as quickly as possible, is better. And I can tell you that search is going to convert twice as much, if not more, than just a regular visitor. So encouraging people to use search can really help boost conversions and sales.
Ryan:
Wow. That is an impressive stat. So just on average from what you see when somebody uses at least a decent search, because there's different levels of search quality-
Jon:
Of course.
Ryan:
... On a site, but an average search you see approximately 50% increased conversion rate on the traffic that uses search versus doesn't?
Jon:
Right. And an easy win for listening to this is just look at your top five, maybe 10, search terms that people are using and search those yourself and see what the results are. They're likely lackluster. You can easily fix that, just go through your product detail pages that are relevant and add some additional meta information to those pages to have them pop up in search results. Things like common misspellings or the plural of an item. I can't believe how many times people don't think to add an asset at the end of an item because people may search for it that way. And also just make sure that the search results page... The results themselves matter, but also that search results page that shows those results needs to be optimized as well. A lot of people just forget about it and just show no context at all. They just show the title of the page and link to it. Why not have the description there? You already should be, on your product detail pages, having some meta-description that Google can pick up, why not display that there if it's already part of the page?
Ryan:
No, that's great. And I think making sure that a search that happens on the site has a listing of products, generally, make sure that you can look at that in an incognito window when you scrape the URL and paste it. That way you can use it, from a traffic generation perspective, you can drive traffic from a paid search ad. But also, if you're having enough people search that on your site, you should probably make that a category page so that Google can start indexing that as well, because you're probably not alone on your site in people searching for that product. Or group of products.
Jon:
Exactly. Yeah. And an easy way to find out what people are searching for, just go into your Google analytics. Most platforms, I mean they all have a little bit different perhaps, but most eCommerce platforms, the search results page is just something that ends in a question mark S equals. So if you figure out what that URL pattern is, and then you can just run a filter for that question mark S equals or whatever, and then you can understand how many times people are hitting each of those search terms.
Jon:
So it's pretty simple to figure out with about five minutes of work and I can promise you it will increase your conversions immediately.
Ryan:
Awesome. Okay, one area you've helped me a lot in sites and understanding how to improve the experience for the users is navigation. And a lot of companies tend to do this wrong. They seem to think that more is better. What do you often suggest to companies when it comes to navigation?
Jon:
Keep it to five items or less, first of all. Anything over that and people just assume that it's going to be a lot of work and they're not at your website to do work, right? So they just like, "I don't want to weed through all these options," and it becomes more taxing than it needs to be. What I would recommend here is you keep it to five items, but also have the navigation copy, be in the context of your customer, not of yourself. What I mean by that is so many brands try to promote themselves in the navigation. They have things like about us. Nobody's coming to your website to learn about us. Now they may want to learn more about you, but not in the main navigation. They typically will scroll down to the footer and look for that, or that information that's on your about us page should be throughout your site in places that people are actually looking for it in context.
Jon:
So a lot of people will do things like put home as the first navigation item. Really, we all know, we've been trained over years, that if you clicked the logo in the top left hand corner, it's going to take you to the homepage. So you can eliminate home out of your navigation. That's a real easy one. Also, highly recommend if you're an e-com site and you have only a handful of categories, that you just list the high level categories in your navigation and leave it at that. That will do two things. It clearly tells people what you sell, how you can help them. And in addition to that, it gives them a quick and easy way to get to the place they want to go to. So that again, they're skipping steps that are in that funnel by having to kind of continue to drill down and find it.
Jon:
So there's a lot that can be done in navigation. It needs to be clear. It needs to be concise. You need to keep it to five items. And you need to try to keep yourself out of the navigation whenever possible.
Ryan:
Got it. Now on many category pages I will see, in addition to the top navigation, a left hand navigation or kind of a filtering system on the left hand side of the category page. Do you have an opinion on if that is good, bad, helpful, indifferent?
Jon:
I think it depends on the amount of product that you're trying to sell. So let's talk about that. We were actually, just before we got on the recording here, we were talking about a shoe manufacturing brand that had a left hand navigation that was filtering, that contain, I think, 40 to 50 different check boxes, right? That you could filter by. Right? And the problem with that, I mean, they had every single shoe size as a filtering option. It wasn't a dropdown, it was just a whole bunch of check boxes. So imagine being a consumer and trying to filter, but you have to look through all of these items just to find the ones that are relevant to you. It's really not that helpful. In the end it actually, I would argue, makes it more complicated.
Jon:
Filtering in that way can be helpful. I think it needs to be a high level filter. What are the main differentiating points? And then once they get down to the product level within that category, then you could start doing some other points, like size, availability, in stock, out of stock, et cetera. So helpful, but it depends. And the thing it depends on is how many products are you selling? If you have a handful of products, then you don't need it. People will scroll and look at your six or eight categories. If you have 50 categories, so many that you really just can't list them all on a page. Then of course you need some filtering for categories.
Ryan:
Got it. Okay. Makes sense. I've seen some that are great on that left hand side and the other ones that I get lost and I just leave.
Ryan:
So on each category page, generally speaking, best practices are to have a piece of content for the search engines, usually three or four sentences talking about that category. It's great for SEO. A lot of platforms default to having a place for that content at the very top. Have you seen that impact conversion rates being at the top, the bottom, the side, or is it kind of like it hasn't mattered too much to what you've seen?
Jon:
Well, I think that ideally I would put it below. If you need it for SEO purposes, that is. Right? Because most of the time that SEO type of content is not going to be helpful to the consumer. You're trying to write for Google, you're not writing for a consumer. So in that sense, I would get it out of the consumer's way. But I do think that some content above the products on a category page could be helpful in letting people know A, where they are. So any type of wayfinding you can do there, that type of stuff can be really helpful. I do think that if you're running a promotion on one category, that could be a great place to do it. If you have a little bit, or just maybe even some branding stuff where you have an image that relates to that category, showing it in use, something of that sort, can be really, really helpful.
Jon:
Say you sell tents and you are showing a family and you're on the category page for four people tents, right? And so you show a family camping and are sitting around a campfire with the big tent in the background. Right? Something like that can be helpful. You're setting the context and the tone.
Ryan:
Now also at the top, a lot of times you're going to see bread crumbs. And I've heard some good things from you about breadcrumbs and some bad things about breadcrumbs. So how do you decide whether or not breadcrumbs are helpful? Or are they always a terrible idea?
Jon:
I'm not really a fan of breadcrumbs. I think at this point that what has happened, it's a hold over from SEO practices of yesterday. It's not something that I see quite often anymore that is actually helpful for a consumer. And typically you're just giving them information either that they're already aware of, or that they don't really need. And if they want to go back up a level to the homepage, for instance, because you're only on a category so you're probably one level deep, maybe two. At that point they're probably just going to click the logo and go home or look at your main navigation. So overall, likely not that helpful. It's just another piece of content you're asking your visitor to wade through before they get to the content that they really are at your page for.
Ryan:
Okay, good. And so, just a general question going deeper, do you like them more on product pages that can get you back to a category page? Or is it just kind of across the board breadcrumbs are not a great idea?
Jon:
I think that it's helpful to have a navigational item that takes people up one level. Now, when you say breadcrumb I think that it starts out with homepage, next page down category page then, then your product detail page, right? So now you're four or five items long. Most people put the entire page title in those. It's not just so and so category. Look, the breadcrumb typically is dynamically built and the way that the platforms do it is that they will use the entire page title. And so they put that into the breadcrumb. Now your breadcrumb ends up being like 300, 400 characters long. It's massive. It's stretched across the entire page. It's distraction. It's not really helpful either at that point. And all of the eye tracking that we've done at the good over all these years, people never look at the breadcrumb. It becomes blindness because they see it and they stop, maybe for a split second, but they're definitely not reading the entire breadcrumb. And that's why I say it becomes a distraction and it gets in the way. Because you're making people stop and think before you're giving them the content you want.
Ryan:
Got it, okay. So sitting on a category page, you see a list of all the products. More and more often on a lot of these SAS platforms, I'm seeing the ability to add to cart from the category page or even just a kind of a quick view, popup JavaScript. Have you seen some direction on whether either one of those or both of those as good or bad?
Jon:
I personally am not a fan of those. Unless you have a product that's like a refill or something like that, where you have a limited number of products and you have a product that somebody is coming to the site and is quickly looking for that product and knows they're going to want to buy it without having to see any additional details.
Jon:
Here's the thing, on category pages people are still looking and browsing and trying to find the product or service that is going to solve their pain or their need. And the challenge here is that you're putting a really high intent to purchase call to action by saying add to cart, likely when they're not at the stage where they're ready add to cart. And if you just give them one image and a title, and maybe it shows the stars and the price, and then says add to cart, I would think most products, that's not enough to get somebody to purchase. So you're blowing an opportunity to send them to a page that you can convince them and show them all the wonderful benefits of your product and how great everyone else says it is in the reviews, and show it in use, and all these other things. So you're shortchanging yourself by just having the small little thing that comes up, gives minimal details and then asks people to add it to the cart. Likely not a good idea.
Ryan:
Probably [inaudible 00:21:29] in the quick view as well, just from, if nothing else, an analytics perspective. Where it's going to be much more complex to track that process or that funnel like category page, product page, purchase. Whereas if I go quick view, it's got to be an actions in Google analytics, if it's a JavaScript overlay, you don't get to do as much optimization on the JavaScript overlay popup necessarily.
Jon:
Yeah.
Ryan:
That's what I would say.
Jon:
You end up recreating that funnel in Google analytics and it's a lot of extra work. And I just think all of the negatives outweigh any of the positives. Then people say, "Well, I added this to make it easy for people to add to cart." Well, if they're not ready to add it to cart then it's not easier.
Ryan:
Moving down, anything else that I kind of skipped in that middle page where we jumped into the footer? You've seen products, is there a good way to put products? How many across? How many deep? How many products on a product page makes sense? What's your default response to that?
Jon:
I think on the category page, there's so many times where people will do a couple of things. They'll list hundreds and hundreds of products here. I think that's obviously the best use case for filtering, and I would do that filtering at the top of the page.
Jon:
Great example of this is we helped, a handful of years ago, to optimize Easton Baseball's website. Now, if you don't know what Easton Baseball is, they're the number one supplier of little league aluminum bats. In little league college, about 99% of swings are done with an Easton bat. They don't do anything in the major league baseball because they don't do anything with wood and aluminum's outlawed. So what does that mean? Well, the vast majority of people coming to the site are parents looking to buy their son or daughter a baseball bat. Or a softball bat. And if you went to their category page, all you saw was a wall of grid of bats. And if you can imagine what a little picture of a bat looks like online, they all look the same.
Jon:
They're all these sticks that are different colors, maybe. Right? But you can't communicate out of that picture. What the benefit is between the different bats, right? And they have wildly different prices. I mean, you can get a hundred dollar Easton bat and you could go all the way up to, I think, a five or $600 Easton bat. And so if you think about it, you're a parent, you get really confused. And right away, you're just upset, right? You're like, "Man, I don't know what bat to get. I'm going to be here all day clicking through all of these." And you just get frustrated really quickly. You probably just log off and go to your sports sporting goods store and just ask the guy which bat you should buy. Who's just working the counter. Not a great experience.
Jon:
And so once we dug in a little bit, what we found was that there are four or five different leagues, little league being one of them, that have certifications for different bats. And if your bat that you start swinging with does not have that logo of certification on it, then the umpire is supposed to not let you swing with that bat. And so the big problem is that all these parents were buying the bats based on price or the color they thought their kid would like best or whatever that is, and would end up getting to the game and the bat wouldn't be able to be used. And that's a huge let down, not only for the parent who just invested all this time trying to figure this out and got through that frustrating experience, but then the child who is up at the plate to swing, and they're being told that they have to use someone else's bat.
Jon:
It was creating a really poor brand experience. And what we found was that there were a couple of things parents knew about their children. What league they were playing in, and then they knew what style of hitter that the person was. So were they swinging for the fences or are they somebody who's just trying to get on base or something in between, perhaps. And then they generally knew what size of child they needed. So right? The bat is going to be different weights based on the size of the person swinging it. So they would say, "Okay, well I have a 12 year old. He can probably swing a heavier bat than my six year old," for instance. Right? So generally you have an idea of what weight you need based on the child who's swinging the bat.
Jon:
So what we did was we added some filtering and we made it three quick questions. With easy dropdowns. What league is your child playing? What type of hitter are they? And then do you know what weight bat you should be using? And usually what we found, we came to that third one because coaches would often tell the parent, "Buy this weight of bat for your son or daughter." So they already had that knowledge that they could bring. So what was really great there was we turned a wall of bats into something that now became three to four options. You answered those questions and it gives you a couple of options and a range of price points. And then you could decide, for your budget, what would work best and what was the bonus of stepping up a level?
Jon:
And it took all the frustration out of it. And their sales went up online 200, I think, 240 something percent Euro per year. Just by taking the pain point out of their category page.
Ryan:
So you're saying CRO has a return on an investment?
Ryan:
Little shameless plug for Jon's skill set there.
Jon:
We wouldn't have been doing it for 11 years if there's not a return here, I can tell you that. But at the same point, I think that it's all about just increasing that consumer ease of use. And if you just have a laundry list of products on a category page, that's not very useful. Especially if they all look the same or there's very minimal difference, or if they're all wildly different products. That also was a problem. And so it's like, "Where do you start as a consumer?" You think about walking into Walmart. If you didn't know what you wanted, when you walked into Walmart, you're going to be really overwhelmed because they sell everything.
Jon:
Yeah, it's a very similar type of experience to that feeling that somebody would have, and you want to make it as easy to use and help them to... Let them know they're in the right place, and help them make that decision as quick as you can.
Ryan:
Got it. And so I would advise people, a lot of times what I've heard you say, is take your category page to Starbucks. Buy somebody coffee and have them try to do something on it, to try to see some of that, because I'm guessing the Easton people didn't even conceptually think about that. Like, "No, we have all these bats. We know which one you want. Just get this one." Rather than, "Oh, you're not a parent trying to buy a bat."
Jon:
That's exactly it, is that they were too close to the product. They were inside the jar, and they didn't understand the pain points that the parents were having because the parents don't know as much about the product as the staff did at Easton.
Ryan:
Got it. Okay. So in conclusion, we've got all the way down to the bottom of the page. We've seen all the products. What are some of the things and quick best practices to be looking at in the footer of the category page? And what are some of the things you see that people do wrong down there?
Jon:
Well, the first thing in the footer that most people will do is they just dump all their links, extra links, down there. And it's just a grid of link after link, after link, no order to them. Maybe they put a header above them, but generally not that helpful.
Jon:
The first thing you should do in your footer is you should repeat your main navigation down there. And it should be the first thing on the left hand side of your footer. That way people don't have to scroll all the way back up to continue the shopping experience. If people scrolled all the way down to your footer, they are interested in your company and in your products and they want to continue shopping. So give them an easy way to do that.
Ryan:
And then do I add in all the navigation links you made me take out? At the top.
Jon:
I think there's a place here for a secondary navigation, and there's generally room for it. So that's a good thing you could add here. I think that another thing that you could add in here is your email sign up. That's always a great place. If people are still interested, but they're not ready to buy, they reached your footer, that's a good time to say, "Hey, you know what? Sign up for email and we can stay in touch."
Ryan:
You mean if they ignored my popup giving them 20% off their first order if they signed up with an email?
Jon:
Yeah. If you have those popups around by now, we're going to have some big issues because you obviously have not been listening to the questions you ask me. Yeah.
Ryan:
Yeah. Do not have popups. Everybody listening to this, do not have popups for email. Please put it in the footer.
Jon:
And maybe we'll do a whole episode on popups. And then I-
Ryan:
It'd be very short.
Ryan:
Simple answer, don't have it.
Jon:
Yeah. You can get me really riled up if you just keep asking me about them.
Jon:
Yeah. And I think the thing that should also be on the site in the footer there is your contact information. And that should be in the bottom right hand corner. And I'm always surprised by the number of sites that don't have contact information in their bottom right hand corner. But here's the thing, it increases trust if people see that you have a way to get ahold of you, but more importantly just put a physical address there. Let them know that you're not running the site out of your parents' basement. I mean, even if you are, just list your parents' address on there. It doesn't matter, right? Nobody's going to show up to this address. What they do want to know is that you're a viable business that's not just drop shipping and with no care. That you are actually reachable by either phone or support email. Ideally the physical address is really just a reassurance tool. We see that trust increases dramatically if you list one. So I would highly recommend that.
Jon:
So having your contact information in the bottom right hand corner is just standard practice. That's where people are going to go if they want to get ahold of you. Somebody comes to your site, they're immediately going to scroll to the bottom right hand corner if they want to reach out to you.
Ryan:
Yeah, I can actually vouch for this. Recently I actually didn't purchase from a site because they didn't have an address. That just, it made me concerned like, "Oh, you're just drop shipping, you're living on the internet, you're a fly by night organization." Just surprised me after I got done. I was like, "They just didn't have an address and that's all that caused me to not buy from them? That was weird."
Jon:
Yeah. It's surprising, right? I mean, the return on investment in this is pretty darn high because all you have to do is go to mailboxes et cetera, or a UPS store or any of those places, right? And just get a box from them for, what is it? Five bucks a month? And nobody knows that that's the address, right? People aren't Google Mapping this address. They're literally just saying, "Is it there? If it is, okay, I feel better."
Ryan:
Yeah. And I mean my wife and I, we have five businesses and live where we registered a lot of the businesses. And I have them on the internet, you can find my home address and nobody comes to us. Thankfully. Because I want to keep it that way, keep my privacy.
Jon:
Well now we're all going to show up.
Ryan:
Yeah.
Ryan:
But I think it does. I think it's a very simple thing that I've never really thought about, even until last week when I just didn't buy from a company. And I spent all day online looking at sites. And just the simple act of putting an address in a footer would have gotten that company a sale.
Jon:
Exactly.
Ryan:
Okay. Anything we've ignored or haven't touched on on a category page that you think we should be aware of?
Jon:
Yeah. Don't have popups.
Ryan:
Just email sign in at the bottom. They're not going to get a discount, it doesn't matter.
Jon:
Yeah, I think we've done a pretty good job of working our way through the entire page. So I feel pretty comfortable that we've answered the majority of concerns that I would have on a category pitch today.
Ryan:
And understand too, you'll never be done optimizing your site. You can't.
Jon:
There's always something. It's interesting you mentioned those tear downs that you see me do quite often at conferences and the like, and I'm never at a loss to find content for those tear downs. You can continually optimize the site and always be iterating on the site for a better experience. It's just a fact of life, but it's something that gives you a big return on that investment. It's well worth it.
Ryan:
Yeah, it's kind of like that Gordon Gekko thoughts. Like, "How much is enough?" More, well what's a good conversion rate? Better. There's no answer.
Jon:
One that is always improving.
Ryan:
Yes. That's your perfect conversion rate.
Ryan:
All right, Jon, thank you for the time and enlightening me as well as the people that are listening into us.
Jon:
Yeah. Thanks. It was a great conversation. Hopefully everybody's learned a lot today.
Ryan:
Thank you.
Most Ecommerce brands are starting to feel like they can’t beat Amazon and thus, they must join them. Ryan unpacks the benefits of joining Amazon and the things you need to watch out for if you do.
TRANSCRIPT:
Jon:
So, Ryan, we've all heard the old adage, "If you can't beat them, join them." Right?
Ryan Garrow:
Mm-hmm (affirmative).
Jon:
So from what I hear on a daily basis in the conversion optimization world is that most eCommerce brands are starting to feel like they just can't beat Amazon, and thus, they must join them. If nothing else, they're looking to have a presence on Amazon so they can at least be found. It's becoming a huge search engine. I'm sure we'll talk about that. But I see a lot of good things that brands get from participating in the Amazon game, but there seemed to also be a lot of downfalls in doing so as well. So today, I'd like to pose the question, Amazon, fight or join? So Ryan, I think start just by breaking this down a little bit. What are the benefits to joining Amazon?
Ryan Garrow:
There are a lot. I mean, the easiest answer for that is volume, volume, volume. I mean, Amazon. There's no statistic that shows Amazon is not dominating the online ecosystem as far as volume of sales. They're over 50% every holiday season. They somehow made July into a shopping holiday because every retailer on the planet has low sales in July until Amazon comes along and says, "Well, I'll just put Prime Day out there." There are sales on Amazon. They have figured out how to remove friction from the purchase process better than any other retailer has so far in at least initially looking at it. The benefits of joining Amazon? There's a lot of volume. You can sell stuff.
Jon:
Okay. So what are the benefits to fighting Amazon?
Ryan Garrow:
Well, you enjoy pain. You like losing. The benefits of fighting it is you get to control a lot more of your brand. Amazon has been trying to do some things to improve that, but you get more control. You get customer data. It could increase your chances of having repeat purchases if they buy from your website. You get to personally handle that conversion optimization after the purchase, and you get to keep some additional margin. Amazon does charge for the platform when you sell. So there are some benefits to not selling on Amazon.
Jon:
If you were to choose to join Amazon, what would be your recommendations? Where should we start?
Ryan Garrow:
Whether you join or fight Amazon probably needs to start with what type of business are you. If you are a retailer selling other company's products through your website or even with a retail storefront as well, Amazon may not be the best place for you. Amazon, largely speaking, is the biggest retail. I mean, Walmart and Amazon are both massive retailers. Other people sell their own stuff on Amazon. Amazon also is a brand. They do have their own products that they sell as well. But as a retailer, it's probably less beneficial. Your margins are already smaller, and you're going to give another retailer some of that benefit. You race to the bottom when you're competing with the same exact product that other retailers are also selling on Amazon.
If you're a manufacturer, I think there's a little more upside. You get to control your brand exposure on Amazon. As a manufacturer brand owner myself, I limit my retailers. I don't let them sell on Amazon. I want to own that and keep my cost as low as possible from an ad perspective. But the big key here too is you need to be able to protect your product. Hopefully, that's with some patents. Hopefully, it's a difficult thing for Amazon to maybe find your factory in China to have them make them cheaper for Amazon because they probably will.
If you make or sell clothing, you better have a powerful brand. I mean, even Nike doesn't sell on Amazon right now. They went down that path and decided not to. I don't know the intricacies of their agreement and why Nike backed out, but Amazon is the biggest clothing manufacturer in the world. Most of the brands on Amazon for clothes are actually owned by Amazon, even if they don't say the Amazon name. It's just clothing would be difficult, but generally, most manufacturers should be considering it, at least in their process. Retailers, there's probably some different things you need to be looking at.
Jon:
Well, we've probably all heard the story about Allbirds, the shoe company, right? That Amazon went out and basically created a knockoff because Allbirds was selling so well on Amazon. As a consumer coming to the site, you really can't tell the difference. I've heard from numerous brands that the biggest downfall has been that they have a product that is easily reproduced or that Amazon... Maybe we should get into this a little bit, but I've even heard from people where they've done direct factory to Amazon shipping. So it's not Amazon Fulfillment Warehouse. Amazon then knows who's making the product, and then they contact those people and say, "Hey, we'll pay you a little bit more. Make it for us," or, "We'll do a much larger order if you make it for us," and then they lose their... The retailer loses the factory, and so it's something where Amazon is a double-edged sword for sure. That's why this is going to be such an interesting topic.
Ryan Garrow:
It is. Amazon basically is going to be frenemies with every company on the planet. They're a necessary evil for certain companies. Google and Amazon are very much frenemies. They both will say that, hey, their biggest competitor is... Google will say it's Amazon. Amazon will say it's Google. They're fighting over that search volume and that revenue from search traffic and paid ads, but Amazon is... I don't know this for sure, but I would argue probably the largest advertiser on Google and driving traffic to the apps into their website.
So you have to go into Amazon with your eyes wide open, understanding that Amazon is aggressive. They are not your friend. They will stab you in the back. They will cut you if they get the chance. So you have to always be on your guard and looking at Amazon as, "How could Amazon steal this from me?" and just being operating as a paranoid brand owner or even a retailer. However you're operating on Amazon, protect yourself as often as possible, and look at it through the lens of, "If I was trying to steal this product from me or make money off of me, how would I do that? What would it look like?" Always use that lens on Amazon to see, "Does it make sense? Does it not make sense?"
There's too much of a risk. There's a problem because even if you have a patent, which I'm sure Allbirds had some protectable intellectual property within their product. Amazon has more money than you, guaranteed, and they can fight you in court, and they can also probably have... They probably have enough smart lawyers on staff that they can say, "All right. Here's the patent. How can we get close enough to compete, but not necessarily actually break that product or break that patent?" It's probably going to get Amazon in trouble long-term, but in the short-term and where we're at right now, they are able to operate that way, and it's been very effective. I don't dislike Amazon, so don't hear me saying that Amazon is bad for what they're doing or how they're operating. You just as a retailer, or a brand, or a manufacturer have to understand what you're getting into in this relationship.
Jon:
Yeah, and I think that goes into why Nike left Amazon because Nike, I believe, originally joined on to fight counterfeits on the platform. The problem was is that it just wasn't effective. It actually made more counterfeits because they had more products on there that people could counterfeit, and then list and say it's a Nike product, and list it for cheaper than what Nike was willing to do. So then, it just became even worse for Nike. I think that's why they decided to pull out. That was my understanding.
Okay. So if you choose to join, I'm hearing a couple things. Make sure you have a brand that you're selling that people know. Make sure that you have some type of protections in place not only for production of your product and manufacturing, but also on the legal or IP side with doing patents. What other things would you recommend if you choose to join into Amazon that brands do?
Ryan Garrow:
Based on my experience of selling multiple different ways with the same brand on Amazon, I would say utilize their FBA shipping. I don't necessarily think you need to go Vendor Central. So there's two ways you can go in there, Vendor Central or Seller Central.
Jon:
Mm-hmm (affirmative).
Ryan Garrow:
Most of the time, I advocate for Seller Central because you get to control your pricing. Whereas Vendor Central, as of now, Amazon is not great at protecting your MAP pricing. They have incentives, and they will undercut. They have some things in their agreement in the past that they've since eliminated where they have to be the lowest seller. But I think just for controlling a brand, Seller Central is good. I think a lot of Amazon is moving towards that. They've even removed a lot of people from Vendor Central that probably shouldn't have been there in the first place. In Vendor Central, you sell your product to Amazon at wholesale as a retailer, and they buy a large volume typically to get you excited.
Jon:
Okay.
Ryan Garrow:
In Seller Central, you put your own listings up and are responsible for all of the content and selling it, and you're going direct to the consumer in a way on Amazon's platform. But then, in Seller Central, you can actually do seller fulfilled shipping where you're shipping it from your warehouses or your location, or your third-party fulfillment center is sending it, or you can do FBA, which is Fulfilled By Amazon, where you send it into Amazon, and then they ship it for you. They make Prime very easy.
For most companies, I'm going to advocate for FBA. Some companies want to own a little more of the packaging process, inserts, things like that, be able to communicate with the customer a little bit better direct to the consumer, and that's where maybe a third-party fulfillment or sending out on your own warehouses makes more sense. But what we've seen is that FBA seems to be getting a little bit better placements or your organic rankings are benefited a little more from having FBA on your products.
As Amazon goes to one-day shipping, same-day shipping for a lot of products, it becomes a disadvantage to say, "Hey, yes. We have Seller Fulfilled Prime, but it's going to arrive in two, three, four, five days," because there's a dissatisfaction to the customer having to wait that long. Amazon is really using their competitive advantage of warehouses all over the country and a distribution network that is unrivaled probably on the planet, and that FBA allows it. Also, their shipping rates are just ridiculously good. It's just so cheap.
Jon:
As they became even more aware with a few presidential tweets complaining about the deal they have with the Post Office. Yeah, so what about advertising on the platform? What do you recommend there? I mean, because it seems like if you're going to join them, you might as well promote your products on the platform. Right?
Ryan Garrow:
Yes. I mean, there's so much search volume. There are so many people going there to buy that advertising makes sense, and Amazon is, as of now, not a great platform for product research. It is not an easy system to go start looking... If you're going to buy a coffee cup, it's not a great platform to start by searching coffee cup, and filter your way down, and try to figure out what you actually want. At this point, Google is still better at finding the products you're looking for, and so by advertising on Amazon, you do get better placement obviously and can compete for that. The conversion rates are crazy good. I mean, I don't know if I've told you, but one of my brands, my conversion rate is 25% to 35%, depending on the amount of traffic I'm driving.
Jon:
No. That's a good return on ad spend.
Ryan Garrow:
Yeah. Well, it's a $15 product and I am paying between $1.75 and $2 per click.
Jon:
Okay.
Ryan Garrow:
So you need a high conversion rate to make it work. But when you are a price point that makes sense, 15 bucks, most people in the planet won't blink at that. You click "Buy" like it's worth trying, and you trust Amazon's brand. They've built a huge amount of trust and one of the most trusted brands in the world. They know that if they don't like the product they're buying, they can easily return it with no questions asked and get their money back. So there's very low risk on Amazon to buying, which is another reason that it's nice to utilize Amazon because they send a product back, and it's resellable. It goes back in their inventory. It's not a huge issue on that part.
So I would advertise for most companies at least covering your brand names, ensuring competitors aren't there. If your product page is on Amazon though, we'll have competitors on them, so that's a no, and there is some risk as well there to be considered. You might want to be bidding on your own product pages because some [inaudible 00:12:30] their products, and I would always own a trademark. It doesn't matter if you're a retailer, if you're a brand. Owning a trademark and being able to register that on Amazon gives you advantages that are not available to companies that don't have a trademark. You get a storefront. You can get specific ads that are available to you that aren't available to other companies without a trademark. Trademarks aren't that difficult to get. I went through the process myself just trying to see if I needed to pay a lawyer 2,500 bucks to get it, and I was able to get one, but just by spending about an hour of my time.
Jon:
Right.
Ryan Garrow:
So any trademark, whatsoever gives you the ability to get some benefits.
Jon:
So that's not a protection angle, right? If you own a trademark on a term, can other people run ads on Amazon for that same term that you own the trademark for?
Ryan Garrow:
As of now, yes, but you get some additional ad placements that are only available to brands, which a brand has a trademark and you get a store URL.
Jon:
I see.
Ryan Garrow:
So you get the "amazon.com/" your store, and you get to put your products on there and curate your own website, if you will. You get to put your A+ or enhanced brand content on your product pages, or we've been experimenting to see if that actually does impact conversion rates, our own... I would call it CRI for the improvement, not CRO, which Jon would correct me if I said it was CRO. But at least seeing if that has an impact. Honestly, as of now, having it as a benefit, there's not much optimization or changes you can do that will materially impact your conversion rate at least that we've seen.
Jon:
Okay. So this is really helpful. I feel like I have a much better understanding of why I should join in.
Jon:
Well, what if I choose to fight? Right? Obviously, I like the pain. Right? I like losing. Right? So I'm going to do it. Forget Amazon. I'm just going to go DTC all the way. What are your recommendations there?
Ryan Garrow:
You're going to need to advertise on Google and Bing through Microsoft ads to keep Amazon from taking your traffic. So both on brand and on your product searches or service searches. Don't forget Microsoft ads. So many companies forget that and Amazon is all over Bing searches. It's really cheap traffic, and too many companies overlook it, so don't forget about that one. But then, if you're going to fight Amazon and not be on there, you really have to be on brand building mode. You are not just selling products to consumers. You are building a brand, and you got to do it aggressively.
So think Nordstrom, Sephora. Those are strong brands. They are just retailers. They have some of their own products, but they have a loyalty that is unparalleled in the market. If everything else is equal, my wife will buy from Sephora or Nordstrom because she wants the loyalty points and she trusts the brand more than the brand she's buying from them. So loyalty programs are going to be very important to ensuring that people come back and buy additional products from you. That lifetime value is huge, and that's whether or not you're on Amazon or not. You need to be doing these things, but it becomes more important when you're deciding that Amazon is not going to be an outlet for your product.
Jon:
Yeah. I was just going to say, so first of all, I know that Nordstrom notes loyalty very well. Right?
Ryan Garrow:
Those are dangerous. You spend a lot of money to get a glass of champagne.
Jon:
Yeah, yeah. The 10-point days and all these other things that Nordstrom does is a Harvard Business School case study on how to do loyalty, so that's great to hear. What else should brands be thinking about if they're going to fight Amazon?
Ryan Garrow:
I would consider what I call a destination retail. So my wife has been passionate about retail her entire life, and so we actually have a retail store even though in this world of eComm, and that's where I spend my entire day, I know that retail is not the best place, generally speaking, to be jumping into. Physical storefronts are struggling. Malls are closing. But if you are looking at retail, which I think there are still some significant advantages to having a physical retail presence, you need to be looking for your brand beyond just a retail store.
One of the best examples I've seen of building the brand and creating an experience at retail that is not just simply going into a store and getting something off a shelf. If you've heard of Magnolia like Chip and Joanna Gaines in Waco, Texas, there's literally nothing in Waco, Texas. Other than Baylor, there's no reason that anybody would ever go to Waco. It's not easy to get to. You fly to Austin, drive a couple hours, and it's usually really hot and sweaty. No reason to go there, but they have a destination retail store that I've been dragged there, and it's a phenomenal store.
There's a reason that people flock there. They just retail other people's stuff. They have some of their own brands, but my wife's retail store can buy a lot of the same things that are sold at Magnolia, but they've done a phenomenal job at building and curating their brand and causing people to want to go shop from them even if they can get the same product cheaper at a store down the street or on Amazon. Not everybody is going to be able to get their own TV show and do all the things they've done, but at least begin studying what they've done and try to emulate some of the ways they've built that crazy passion and loyalty that causes people over the country to fly and land in Waco, Texas. I went there in August.
Jon:
Yeah.
Ryan Garrow:
Ugh, it is hot, sweaty, sticky, and...
Jon:
Husband of the year right here.
Ryan Garrow:
My wife was literally in heaven. It was like the closest she's going to get to heaven on earth, and that was Waco, Texas.
Jon:
But I think that expresses the power of brand, one, right, and how if you've done all that other work to build the brand, then if they were to move on to Amazon at some point, I'm sure people are going on Amazon and searching Magnolia to find their products.
Ryan Garrow:
Mm-hmm (affirmative).
Jon:
They're not finding them, so then they have to go elsewhere. But I think that definitely speaks to the power of brand and why that's going to be massively important if you don't want Amazon to go after you.
Ryan Garrow:
Yeah, and I would say even if you're going on Amazon to sell, you need to be building a brand. So don't take that as, "Oh, I'm going on Amazon, so don't worry about brand." It's always going to be important if you want to grow and scale, but just the magnification needed to compete with the... just sales volume, and ease of conversion, and how we are training. Amazon is training us to just do nothing, but look on Amazon and click "Buy." Sometimes I don't even price check. How sad is that? I'm super cheap. I spend all day on a computer in eCommerce, and I know that there are always better deals or easier ways to get it, but it's like, "Okay. It's going to be $3 more expensive on Amazon. I probably don't even care. I just want to get it because it's going to show up tomorrow and I don't have to worry about it."
Jon:
Right. It's the convenience factor, right?
Ryan Garrow:
It is. They've done a great job. Bezos is the richest guy in the world for a reason. He's created a monster that is phenomenally successful and very good at getting people to purchase.
Jon:
So what have we not covered that you feel would be really important for folks to know about the Amazon fight or join question? If they're considering this, what else do you think they should know?
Ryan Garrow:
I mean, just be aware of customer data, what that looks like. How valuable are repeat purchases to your brand? Does everybody buy a product you have no margin on the first one and you need them to come back and buy another one or something different to actually make the brand work and the lifetime value work? Because Amazon owns your customer if you sell on Amazon, so you have to treat them as a retailer that owns the customer. So Nordstrom, if you sell at Nordstrom, Nordstrom is going to own the customer, and they don't care if they ever buy your brand again. Amazon doesn't care if they will buy your brand again. They want the customer. So treat it like a retailer and just always go with your eyes open.
There's always risks to copycats no matter where you are. If you find success, people are going to copy you. So that's just one of the functions of success. You'll always have it, but it gets, again, magnified on Amazon. Even eBay sellers will take your Amazon listing, and start selling it on eBay, and shipped direct to the consumer off of eBay from Amazon. The order will come in on eBay, and they will go immediately, automatically, usually with bots, buy it on Amazon and have it shipped directly to consumer with a gift receipt. They don't even touch the product.
I have some people selling my $15 product for $25 on eBay. We're going to be a registered brand on eBay eventually at this point. There's other things that are higher priority right now in our brand growth, but just know that people are going to take your stuff, and it's just part of... what comes with success. But I would also keep some of your products on your website. Don't give Amazon everything if you choose to go there. You want to have a reason for people to maybe get your gateway drug product like the thing that people always need to start with you and that create high lifetime value customers. But try to get those customers to come back to you through your website.
Once they've experienced your brand, you always want your URL on the packaging if possible because Amazon can't control your packaging, like control what goes in the box and the smiley face that goes with it, but keep your website on the packaging. A lot of companies are printing their loyalty program on the packaging. So if somebody goes to Amazon and buys, they are able to still be a part of the loyalty program with that purchase. Again, that's a way of getting that customer data off of Amazon to you as the brand so you can communicate directly. But I think step one for most companies is at least test it. There's no reason not to test what's there, and how much volume, and how it operates, so at least you can better see. If you're going to fight Amazon, you'll have some of the insight into what goes on in Amazon, and you better be prepared internally to take it on.
Jon:
Which brings me to a really great question, I hope, if I do say so myself because I'm about to ask it, but I'm wondering. What kind of tools exist out there to help brands on Amazon? There's going to to be a whole ecosystem of these, right?
Ryan Garrow:
Oh, yeah. There are tons. There are repricing tools, which can be very powerful. As a retailer, price is a huge driver of the Buy Box and the whole algorithm behind. If there's 20 people selling that same product, they all get mapped together. There's one listing officially. There are sometimes rogue ones that Amazon eventually will catch. But then, only one of those 20 retailers gets when they click "Buy," and so there's part of the algorithm that's price. If you're cheaper, your chance to get in the Buy Box are much higher. So repricing is a big deal.
There's a partner of both of ours. SellerActive here in Portland does a great job at that. There are companies that will help you with listings to make them appear better. So if you have A+ content, they'll get like photographs or images in there. Product images are huge. So make sure you have good product imaging because that will be a big part of the clicks you're going to get. I'm telling most retailers to be ready for 360 images. If you can put 360s on your website, do it now. Have those ready when Amazon does release that to everybody. Right now, it's been held back to some of the larger brands at this point. I think some of it is just a bandwidth issue. 360 images are large, and it's just a... If you put a few million products all at one to have 360 images, that's a lot of server space, but just be ready.
Jon:
Well, if anyone has that server space, it's Amazon. Right?
Ryan Garrow:
Yeah, it's probably... They have it. Whether or not they're going to use it for themselves or lease it to somebody else, it's there. I would also say there are some companies out there that will own your brand on Amazon for you, and they will do the advertising. They will act as a retailer and help control Amazon. If you're going to go directly on Amazon through Seller Central or Vendor Central, you have to have some time internally to dedicate to managing that and controlling it. So if you've got retailers who are selling on there and you don't want them violating your MAP, it's going to take some work on your end. Some of these companies who will take over your brand on Amazon will help you control that. So if you just don't have the time, there are some of those companies available. Most brands now can handle Amazon direct, but it still does take some investment of time.
Jon:
I feel very well educated at this point. I feel like there's so much to think about, but you've done an amazing job of breaking this down, so thank you. Any final thoughts on this before we head on our way?
Ryan Garrow:
Just don't be scared of Amazon. Yes, it can be dangerous, but it can also be really fun, and it can be very beneficial. But if you'd go in just scared of Amazon, I think you're going to trip up, and you're going to have more issues rather than if you look at them as a potential upside or partner. I think just be optimistic rather than pessimistic when you're looking at Amazon, and I think you'll do a lot better.
Jon:
That's a great perspective. If you do make the leap on Amazon, hit Ryan up, and he'll help you advertise on there as well.
Ryan Garrow:
Yeah, or even just set some strategies so you don't lose a bunch of money.
Jon:
There you go. Always has proved valuable for me, so thank you so much for sharing today, Ryan. I really appreciate it.
Ryan Garrow:
Thank you.
Jon:
You've made us all smarter about Amazon and deciding whether we want to fight or join the cause. So have a wonderful day. Thank you for the interview today.
Ryan Garrow:
Thank you.
Ryan unpacks the different social media platforms and how you can use them to sell your product. He explains where you should start and then where you can test the waters next. Jon and Ryan also provide an update about what you need to know about the recently released Facebook Shops.
TRANSCRIPT:
Jon:
Hey everybody, just a quick note before we jump into this episode, we recorded this episode on Selling on Social before Facebook Stores was launched, but everything we discussed still applies and is relevant. But stick around until the end, we are going to record an update on selling on social media with some details on Facebook Stores. So enjoy the episode and be sure to stick around towards the end, and you'll get an update.
INTRO MUSIC
Jon:
So Ryan, it's probably a bit maybe cliche to say that everyone is on social media these days, but as a digital marketer, it's true, right? If you're not selling on social media platforms, are you really even trying to succeed? The more I thought about this, the more I thought at The Good we don't do anything around driving traffic, which obviously would include advertising or selling on social media. So I thought, "Why not learn a thing or two from Ryan and your 6,000 clients experience at Logical Position today?" So Ryan, I'm excited to have you, to school me on selling on social.
Ryan:
Oh man, it's such a big topic and such a big opportunity, I think, that so few brands are capitalizing on, fascinates me.
Jon:
Well, this will be fun then. So Ryan, let's start with the big picture, when I say social, what channels does that really include?
Ryan:
I would say when most people say social or selling on social, social advertising, they're most likely referring to Facebook and Instagram, it's the big 800 pound gorilla in the industry. But there are quite a few other platforms that I would probably bucket into that social platform and the advertising and traffic driving that you can execute there. You've got one that a lot of people forget, and it's probably unfortunate there, but Twitter, you can still advertise on there should you want to. Pinterest has some advertising, Snapchat, you can advertise on. LinkedIn is a social channel that a lot of e-commerce companies forget about, there's still some value to be gleaned out of there for e-commerce, but it is pretty lead gen heavy.
Jon:
Yeah, I love LinkedIn.
Ryan:
LinkedIn is great for our prospecting and finding just people that talk about it, there's a lot there. And I think it's under utilized for a lot of companies, but it's also, I think, confusing to a degree on how you sell on a business social tool. Do you have any e-comm clients that are doing anything on LinkedIn that you know of?
Jon:
No, I don't, but I thought that's such a great one that you could run some highly targeted ads on, pretty easily.
Ryan:
Yeah, if you know who your target market is, and if it's a... Just a conversation with a guy that was selling to doctors today, and I was like, "Well, if you're selling it to doctors and you know that there is a certain role at a doctor's office that always is responsible for finding your product or deciding to buy it, you could target all of those people on LinkedIn very easily." So I think there's opportunity there, I don't think it says much about, on LinkedIn at least, getting click-buy, it's part of the process generally. But with some of the other platforms too, like TikTok, for some reason has just jumped out at me over the last, just two weeks. We've actually had a bunch of clients reach out and say, "Hey, we want to get onto TikTok and do some advertising, how can you help us?"
That came out of left field for us, we're like, we know it's there, but we were so focused on Facebook and Instagram with them that we hadn't been pushing for other channels. So, that was on us to a degree, so I think there's some opportunity on TikTok. And then the other one that I think a lot of people maybe think of differently, YouTube has a very strong social component. But it's because it's run through the Google Ads platform, most people don't bucket it under social, but I think there's a component there that, to a degree, could be looked at that way.
Jon:
Yeah, a lot of people are sharing YouTube videos, right? And it's got a massive comment thread on videos, and they do make social sharing on there easy so that's a good one to think about. Okay, so I had never thought about LinkedIn in the way you're talking about and really hadn't thought about YouTube, so that's really interesting, that's good to hear. And TikTok, I just feel like maybe I'm too old for it, but that's a whole different situation.
Ryan:
You and me both, that's probably why I didn't have it top of mind. I was like, "TikTok, what are you talking about? That's just Gary Vaynerchuk trying to get people to like his social stuff.
Jon:
Yeah, but I mean the minute he's talking about it, it's probably the immediate time to jump into it. Okay, so when I'm thinking about selling on social, are we really talking about advertising or actually selling, right? So for instance, I've seen brands that do Instagram Ads, right? And I've seen brands that actually make their posts shoppable, and you can actually complete a transaction on Instagram now. So are we really talking here about advertising or are we talking about actually selling?
Ryan:
Well, I think it's both. I mean, I like the old adage, always be closing, always be selling. Like if you're an e-comm site, you need to constantly be thinking about how are people going to find me and buy my stuff. And I think if you have the ability, because not everybody can check out on Instagram, or every brand doesn't have that access, let me put it that way, not every site can just flip a switch and automatically be selling on Instagram without leaving the platform. It's still in controlled level, you have to have enough followers or you have to be invited into betas to a degree.
But you want to sell as often as possible, and I think having that extra channel, if you can get that conversion on Instagram without them leaving, you do it. But all of them I think you're going to be advertising on, even if you can have the checkout on Instagram rather than your site, you're still going to be advertising to draw people to that checkout or to your page, and constantly try to find new users. And I think Facebook and Google both have a lot of creepy data, it's not a surprise to anyone, and I think Facebook even gets slightly more creepy, but it is phenomenal for marketers. We can upload a list of our clients, and then Facebook's algorithm can go find everybody on the world that looks like your current customers because they're more likely to be buying. If I buy your product and like it, you go find everybody else that has the same demographics as me, whether it's on a farm, has four kids, has too many businesses, there's maybe 10 of us out there.
Jon:
But all of them will buy.
Ryan:
But all of them will probably buy your product. So be thinking about both, I think, because of the algorithm. A lot of people forget about this, but the Googles and the Facebooks of the world, the dominant ad platforms, they've created a free platform for everybody and they make money by ads, and so they have an incentive to get people to click ads. And so on Facebook, not everybody that follows your brand, Facebook and Instagram, not everybody that follows you will see your post. And so promoting posts, getting your ads out there, you have to feed the beast, to a degree, and make sure that you're leveraging the ad platform appropriately to get the right content in front of the right people.
Jon:
Got it, okay. So where do you recommend brands start then? What channels and how would you best utilize those channels if you're just starting out?
Ryan:
Some of it depends on the size of the organization and the budget to start with. If you're already a $10 million online brand and you hadn't advertised on social, that would surprise me, but it probably exists somewhere. You could probably start a little more aggressively than somebody that hasn't hit their first $100,000 in online revenue yet, but the general rule of thumb that I have for most brands is start with remarketing on Facebook and Instagram. It's all done through the same platform on Facebook, since they own Instagram, and if you're remarketing to people that went to your site and didn't purchase, you'll get a good gauge of what kind of potential Facebook and Instagram have.
So if people that went to your site didn't buy, come back and buy through remarking ads at a rate that makes sense for your company and your products, it indicates there's potential for prospecting or finding new users that haven't heard of you yet. But if people, through remarketing, are not coming to your site and buying, it would lead me to hypothesize that finding new users is not going to be the best opportunity for through that social channel, because remarketing generally always works better than prospecting as far as the return on investment.
So start there, and also understand that when you move beyond just the remarketing pixel on the remarketing ads, social is not like search, it's not a demand capture. People, for the most part, are not going to a social channel to find a product to purchase, generally you're interrupting their flow of connecting with friends and family or coworkers, and convincing them to click an ad to go outside of that flow to look at a product, it's something they probably hadn't been thinking about before.
Jon:
Yeah, that's such a great point. You really think about, at least in my business, around conversion, right, it's all about that capture and not the creation portion. And that's a really great point that if you are able to create that demand and then make it easy to do the capture or conversion at that point, then you're really going to see some great return on that ad spend here.
Ryan:
Yeah, and understand too, that generally as you move up the funnel of purchase, the return on ad spend drops, but I think it becomes more important as you're driving people to your site off of a social channel, to focus on that conversion optimization. You want them to be sticky and you want them to buy then, if at all possible, remove as much friction as humanly possible on social traffic because once they leave, go back to the social platform, you're no longer top of mind, now you're going to be remarketing to bring them back in. So it probably extends the purchase life cycle, if I could say it that way, when they're coming from a social channel. Not always, depends on how impulsive the purchase is, but you just have to generally be watching data very closely on social as you're looking to get sales there.
Jon:
Okay, so let's say a brand has been successfully selling on social already, what's the next step you would recommend?
Ryan:
Probably the same as with all of your marketing, it's test, test, test again, test again, test again, and not ever be satisfied with where you're at. You'll be trying out new ad sets, maybe if you haven't done video before, you need to do video, you're going to be testing new platforms. And so this is one where it's easy to get stuck on Facebook and Instagram and assume that that's your social media marketing, that's it, you're done, you've got it covered. But if you take me for example, I don't know how many years ago, maybe... gosh, I'm getting old, but what is it 15 years ago that we started on Facebook, maybe? I don't remember when it came out, but probably a while ago, and I was on Facebook for a while, thought Instagram was really stupid, why would people just not want to read anything, they just want to look at pictures, and then realize, "Oh, Instagram is pretty cool."
I no longer really go to Facebook, I am on Instagram because it's easier to scroll through the feed maybe, but I'll go in maybe once a week and check on Facebook. My mom's on Facebook now, she's not that interesting to me to follow on Facebook. She's retired, she sits at home and it's just not as interesting. And so people are going to constantly be moving from platform to platform, I think. And I think as Instagram ages, we'll probably move to something else. People have moved to Snapchat, maybe it's going to be TikTok.
Jon:
TikTok, there you go.
Ryan:
Who knows? But you want to be making sure that you're aware of the demographic shifts, maybe the baby boomers start moving on to Instagram in a heavier flow, and all the gen-xers like myself were going to fall off and go somewhere else because we don't want to be hanging out with our parents on social media.
Jon:
Yeah, this is what's really interesting to me about social media, it's so easy... and I think as an outsider, obviously I'm not printing campaigns, but it's so easy to target different demographics because it's pretty clear what channels they're on. If you want to advertise to the teenager, you're going to advertise on TikTok, that's just generally where they're going to be right now. They're not going to be on Facebook, we know that. But if I want to advertise to Ryan's mom, I'm going to go to Facebook, right? It's just where it is. So yeah, that's something to definitely think about, but what I'm hearing from you is the core tenants of digital marketing apply to social, right? So whether you're doing ads from Google or you're doing ads on Facebook, it's really the same core tenants, it's just a little bit different, perhaps, on the execution.
Ryan:
Yeah, and the important metrics are going to be a little bit different. So whereas Google's algorithm is fairly advanced, and we have a lot of really quality data around quality score, for example, we know what goes into it, we know what makes up a quality score, and how to manipulate it to get a higher one. Whereas some of that information on Facebook isn't as readily available, and there's more testing and measuring to figure out what is going to work and what's going to be a good click through rate. It may be different for different ad sets, and there's a lot more visual ad types you can create on Facebook than maybe just text ads and shopping ads on Google.
Understand it's different, but it's all the same thing, we're always looking at data and deciding what to do based on what the data is telling us. And on their demographic point too, there are young people on Facebook. And so if you do want to target younger people, you just set your targeting for younger people. You may not spend as much as you could on, say, Instagram or on maybe TikTok and be going to teenagers, but there's millions and billions of people on each platform so there's a lot of eyeballs.
Jon:
So would you recommend then that when a brand is looking to choose a social channel to sell on, that demographics would be their first elimination point? Or I'm hearing from you that, obviously there are, yes I agree, there's younger people on Facebook as well, perhaps, but would you still recommend demographics be that first deciding point where to start at choosing a social channel to sell on?
Ryan:
That's probably going to vary quite a bit depending on the brand and what you're selling. I mean, almost across the board, I'd probably recommend most companies start for the first time on Facebook, Instagram. It's a mature platform, you really know what to expect out of it, people expect to see ads, click ads and go somewhere else, and get basically their flow interrupted, it's not an uncommon thing to see an ad and click. I mean, I remember one of the best ads on Instagram was somebody that showed me a paddleboard surfboard with a rocket engine on the bottom of it. And I was like, "I didn't even know I needed that until I saw that on Instagram, and now I need to spend $2,000 on that even though I don't have-"
Jon:
Now you can be lazy during your workout.
Ryan:
Exactly. So start with what's known, where there is a lot of talent to execute for you, because there's not a lot of people right now that are TikTok marketing experts on the planet. And so if you're going to go off and start on TikTok, it may be much more difficult to get the goals that you want achieved there. Start there and then branch out as you see data, so set the demographics, knowing let's say you're going to target the younger demographic, and so people that are 18 to 24. You start on Facebook, Instagram, set your target demographics there, see how many there are, see how they respond, because you have a lot of... a mature platform is just easier to work on generally, knowing that you probably want to end up on TikTok as well, Snapchat, and expand out of that once you have a baseline to say, "Okay, I know that Facebook, Instagram, I get this return on ad spend, let's see how TikTok actually works for my brand as far as a return."
Jon:
So, I get asked this question all the time, Ryan, what's a good conversion rate, and people don't like my answer, generally, because-
Ryan:
Better.
Jon:
Yeah, one that's improving, right? That's generally how you should be thinking about it. Is there a goal for brands when it comes to selling on social, should we be thinking about specific goals or is there a percentage of a brand's overall revenue you prefer to see coming from selling on social? What are the metrics that you think are most impactful, and are there general standards for those metrics that people should be aiming for?
Ryan:
Unfortunately, no, it is very similar to the CRO question that it's an improving one, and you've got to look at your brand and who's buying, why they're buying, and where are they buying. So if you sell CNC machines online, you're probably not going to get a lot of direct conversions out of social for that. But it's an awareness thing, you can do some good top of funnel work there, that maybe it's not necessarily the final attribution is coming from social, but it is on the path. And so I think it's only going to get more and more complex as we continue to get more ways to engage with people through different channels, that I would probably never be able to put an exact number on it. But one thing I do like doing, and I do this in my own brands, I keep each marketing team siloed to a degree, so the Google Ads group, the social media group, I generally, personally at least, don't want the same team doing both because I want them both competing for a share of my sales.
I want them to say, "Hey, the social should be bigger." Okay, if the same person's running Google and social, they may not care which one's bigger, they just want to push where it's maybe easier. And I think there's always a chance to win on social or win on Google, but I want hungry teams that are going to make that channel work no matter what. And so I would say, I always want it to be more but I also don't want to lose money. Anybody can sell a million dollars through Facebook, but some companies, it might cost you 20 million to sell that one million and so it's not worth it. So you just have to be aware and monitor what's happening and where that social channel fits for your brand. One of my brands, I haven't even gotten it on social advertising yet, I'm still Matt trying to max out Amazon and then I'm going to try to max out Google, and then I'm going to try to push on social. So there's so much you can do that it becomes mind boggling at some point to where you can be pushing a brand.
Jon:
Awesome. Well, I think we've sufficiently tackled this topic. Do you feel the same?
Ryan:
I mean, it depends on who's probably asking that question, but I feel like at least we've covered a topic and we've gotten some good insights.
Jon:
So Ryan, we promised at the start of this episode that we'd provide an update on the just released Facebook Stores, and I'm counting on you to educate me because quite honestly I heard about it, but I did not read anything about it. So can you give us a quick overview of what Facebook Stores is?
Ryan:
Yeah, so welcome to the world of e-comm, where things change more rapidly than we can produce podcasts, but it means it's fun and things are constantly changing. So Facebook Stores is basically what it sounds like, it is a store for your business on Facebook properties, mainly Facebook and Instagram. Allows people to checkout on the platform, many companies were, at least, aware of the checkout on Instagram feature that was in closed beta for a while, so it's basically all of that rolled into one. Facebook has an entity they're trying to release quickly to help local [inaudible 00:21:06] that maybe never had a website, offer the ability to transact online, at the boiled down version of it.
Jon:
Okay, and do you think this was in reaction or response to COVID and a lot of retail not being open?
Ryan:
I think that was the initial thought, but I think it was also quite an opportunity for the Facebook engine to push into e-comm with a lot of people paying attention, and that's a very easy release at that point.
Jon:
Great, and so it's separate, because I know Instagram is owned by Facebook, but it's separate from, or is it somehow linked to Instagram? I know you could sell on Instagram for some time now, not necessarily in a store, but you can do shoppable posts.
Ryan:
You can do shoppable posts, but those still take you to your website for transaction. There was that swipe up feature that was very popular, if you get over 10,000 followers, you get automatically put into it if you're a verified Instagrammer. A lot of value to those, we've seen some great data, but this is the next iteration of that, which is you don't have to leave the Instagram platform to transact. Once you've transacted on Facebook or Instagram, they store your data if you want them to so you can easily transact without having to put any data in. So just kind of try to make it as seamless as possible.
So a great [inaudible 00:22:26] I believe, but one of the things people are going to realize as they start doing their research is when you have such massive organizations that try to move nimbly and quickly, there's some struggle. So by no means is Facebook Stores just [inaudible 00:22:41] working for everybody as they think it would at this exact moment. In fact, even me personally, my wife and I are trying to get our businesses up on Facebook Stores, like with Shopify a couple days after it came out, did not work. It was not just a click a button, you are going. You've got to have some things in place that will allow your business to work, and so obviously you've got to a Facebook page, so if you don't have [inaudible 00:23:08] out there.
If you're going after people that are in the younger [inaudible 00:00:23:14], younger than baby boomers, you should probably have an Instagram profile. You need to have a platform that can easily get products into Shopify, and so this where Facebook and their post called out a few partners in the intro that came out right after Zuckerberg's live thing, where they say, "Hey Shopify, BigCommerce, WooCommerce, ChannelAdvisor, CedCommerce, Cafe24, [inaudible 00:23:44], and Feedonomics can all [inaudible 00:23:46].
I don't think all those integrations are perfect yet, and I've tested on some Shopify sites where you can add the Facebook Commerce Manager, get the Facebook shopping plugin, the Instagram shopping plugin and it's be live [inaudible 00:23:59] not perfect. So I think that most businesses have to realize going into this is, if you've never been online before [inaudible 00:24:08] to accomplish that you've ever done. If I'm seeing articles and blogs from people, the e-comm experts not being able to do this, the switch, just with their knowledge, then I would say at least test measures and things, test [inaudible 00:24:22] things. If you get stuck, there are going to be a lot of blog articles, there are going to be a lot of help things within Facebook trying to solve these problems, but you're going to need some patience for sure.
Jon:
So Ryan, knowing all of that, how does one get access to Facebook Stores?
Ryan:
You need to go in and set up Commerce Manager, and so that's step one, like a great digital marketer that I am, I just go Google, Facebook Commerce Manager and find it. It wasn't as simple for me to find inside the Facebook platform, you also want to have a site like a Shopify, BigCommerce that already has a plugin for it, so you may need a plugin on that. Our Shopify site, we had to put a plugin on the site to get to send inventory over to Facebook, you've got to have something sending those product details over, along with inventory, what's available. Every business that has a Facebook page should be able to do Facebook Stores, but that doesn't automatically open up Instagram Stores, or so we're finding.
There's a lot of misinformation out there, so you need to do some research on your own and see your business is able to do certain things. There were some articles that my wife came across that said, "Okay, if you try to do an Instagram Store, you can't do a Facebook Store and vice versa." I don't think that article is necessarily true, but the Instagram Stores or the Instagram checkout is still closed beta if you go to that page on Instagram.
Jon:
Okay. So, we should state that there's a lot in flux here, right? And we're doing our best to get this information out quickly, but things are changing rapidly is what I'm hearing from you as well.
Ryan:
For sure. So we're recording this today, and people are going to get access to it probably in a week and there's going to be constant change until we get to a homeostasis in the Facebook Stores environment, and so we'll probably have to do an update a little bit later. But as of now, just know that there's a lot of moving pieces at this point, and if you're on a platform that doesn't have an integration already built into Facebook, it's going to be much more difficult for you to get that thing set up.
Jon:
Okay, so what does Facebook cost? I assume they're not doing this for free.
Ryan:
It'd be nice if everything was free, but unfortunately Facebook is a business, and they have an obligation to shareholders to make money, nothing wrong with that, they do provide a service for free for people getting their own profiles. But as of now, they are charging 5% per transaction, now that is great in some areas, it does say that includes taxes and processing fees. And so that could be good, but I do have some struggle with that because if your business already has nexus in Washington, for example, you need to be collecting all of the sales taxes in Washington, which add up quickly. If you sell in Seattle, you're getting charged almost 10% sales tax up there, that that 5% just can't cover taxes.
So that's how I know a lot of this is going to be changing and updating, because I'm not sure that it built out everything for tax collection perfectly. Because when you jump into e-comm and you have stores like mine and they sell on Amazon, their website, retail storefronts, I mean there is so many potentials for tax nexus they had to be collecting that Facebook sells a unit there, I'm on the hook actually as a merchant for that. And so that's where stores need to be aware that that's there. If Facebook doesn't collect the tax, nothing on them, I mean, they're not coming to Facebook for that, they're coming to the person that actually sold that product on Facebook for the tax.
Jon:
Right. So definitely something to keep track of, and I think we both know in e-comm, and there's whole companies dedicated to just helping you figure out your commerce tax situation. And it's down to the street level at times, local taxes and sometimes stuff like that.
Ryan:
Yeah, good luck in California, it's just not going to happen.
Jon:
So since this was released, and it is in beta as we were kind of talking about, what do you think is still being worked out with Facebook and their Stores platform?
Ryan:
Some of it, I think, is going to be that cost, like they want to have something that works and keeps it simple. But as of yet, I haven't seen how you can simplify commerce to a flat rate for everybody in every possible scenario. So I do think that's going to adjust somehow, and Facebook is potentially opening up for a local store that's never had a website, to sell across Facebook, which is a massive opportunity, but also adds in massive complexities to a small local business that [inaudible 00:29:10] had to consider before. Especially if you're in Oregon, where we don't have sales tax, that's just kind of a foreign thought to us that, "Hey, I can go anywhere I want, I buy something and whatever it says on the tag, I actually pay versus not having to worry about tax."
Whereas I go to Washington, there's all kinds of taxes added on that as an Oregonian I'm just not thinking through. So an Oregon business, you have to be aware that most of the country charges sales tax, and if that collection's not there, how do you do it? And maybe Facebook has taken some liability in some of their fine print saying, "Hey, we're going to charge 5%, and we'll make it right, some how, some way." I don't necessarily think that Facebook shareholders [inaudible 00:29:50] too keen on that.
Jon:
Yeah, not for permanent, right? But I could see them doing that upfront to get users and to kind of buy their way in.
Ryan:
Yeah because it would be great if you could simplify processing and taxes into just one number to [inaudible 00:30:05]. You're just taking 5% and I'm done, that would be huge, and I think a great opportunity.
Jon:
I have to think, yes, we're in Oregon, so not really up on every other State sales tax, but I have to think that there's some States that have more than a 5% sales tax, right? So even just then, they would be losing on processing or any of the over right away.
Ryan:
Yeah, and it could be maybe they're pulling that from their small business fund that they talked about, where they say, "Hey, we're going to release a 100 million to small businesses." And so instead of giving them ad credits, they're just going to use some of that to collect the data. Because I think some of it Facebook needs is that data, because they've not done enough online commerce to actually have the data to know this is what it is and here's where things can go bad. Unless they hired some high up people at Amazon that have all this data that they could pull with them, I doubt it.
Jon:
Yeah. Well we all know that, and this perhaps is for a whole nother podcast, but we all know Facebook loves their data, so they'll get it one way or another. So is there anything we didn't talk about, you thought I should have asked you about Facebook Stores today?
Ryan:
I don't think so, I think as a business there's very little reason not to get into this channel and test it. Every business is going to have a different level of success with it, but if you're going to open up a massive channel, I think there's more risk to not exploring it than there is to explore it and put some of you inventory there and see what happens. I mean, I'm going to get all of my businesses on there that I can to say, "Hey, I want to be available where people are trying to transact." And if Facebook is successful at creating an e-commerce platform to rival the Amazon's or Google Shopping's, then I for sure want to be an early adopter into that system so I can get as much data as I can get to make smart decisions for myself and any of our clients. So I would say, get in, take some risk, take the time to study it, and just see how you can make it work for your business and your specific situation.
Jon:
Yeah, that's great advice. I mean, there's still millions and millions of people on Facebook, so it's a massive audience, right, and you might as well try to throw your store up there and see what happens. So, okay, great. Well, this is really helpful and I think it's a great add on, as we said, things are going to change rapidly with this, but hopefully this gets people started. They know where to look now, they have some understanding of what it's going to cost them, and why they should do it, and I think that's a great add onto this episode. So thank you, Ryan, again. And I look forward to doing an updated show in the future as things settle down with Stores.
Ryan:
Yeah, looking forward to it. Thanks, Jon.
Jon explores the nuances of CRO and explains why it can be so difficult to take a DIY approach with it. He also offers a few tips for those just starting out to improve your CRO without spending a whole lot.
[The Mom Test book]:
(https://www.amazon.com/Mom-Test-customers-business-everyone/dp/1492180742/ref=sr_1_1)
For more CRO help visit The Good:
https://thegood.com/
TRANSCRIPT:
Ryan:
Hello, Jon.
Jon:
Hey, Ryan. How are you today?
Ryan:
I am doing well. Excited to get educated today by you, on some areas that I have very little knowledge. It's exciting, the world of CRO. When you see the results on my side... I get to see the results of what you do, but I don't conceptually understand it well. So today, I really wanted to dive into the weeds with you about conversion rate optimization, and help our listeners get a better understanding of just what you're going to need to do to help execute some CRO. And then, as we live in this DIY world... I can't tell you how many Pinterest things I see, or YouTube things I see, that I try to execute, and it just, God, doesn't quite turn out the way I want to. Especially when I'm cooking, all the recipes I find on Pinterest, just man, the pictures look so great and then my finished product is not great.
Ryan:
I own a few businesses. Logical Position does a lot of advising on best practices in improving conversion rates, but I wouldn't call what I do on my own sites or what we do at LP to kind of advise clients as conversion rate optimization. So from your perspective, as an expert in CRO, isn't it easy to just watch a YouTube video or find a Pinterest article on CRO and just do something and watch the conversion rate on your site increase?
Jon:
Well, I think that, just like anything else, right... Like you mentioned Pinterest or YouTube videos, how many times did you watch these videos and it had not turn out like you had wanted, right?
Ryan:
Yeah, most of the time.
Jon:
Yeah. I think, it's probably not too dissimilar. Now, look, there's a lot that somebody can do on their own to help improve their conversion rates. Is that technically and truly full conversion rate optimization? No, of course not. But there's a lot that people can do out there, and should be doing, and should be thinking about. I think that... Look, is it easy to do everything yourself? No. Could you focus on one or two areas and do very well? Yeah, maybe.
Jon:
But I think the biggest challenge I have, is we see this all the time at The Good. People come to us and they say, "Hey, I have one staff member I hired who's a conversion optimization specialist, but it's just not moving the needle in the way that I would like. We're not seeing the return on that salary spend or that contractor spend." The problem is that, and we've proven this out over 11 years now, you really need to have a team with a whole bunch of specialists, and it's impossible for one person to be expert in all of the areas that you need for conversion optimization.
Ryan:
What I'm kind of understanding is there is a conceptual difference between CRO, or conversion rate optimization, and, maybe what I would call CRI, conversion rate improvement. They're not necessarily the same thing. I can [inaudible 00:03:21] can change a button and improve our conversion rate, but that's not actually conversion rate optimization.
Jon:
I think we just came up with a new term and I love it, CRI versus CRO. That's awesome. Thank you, Ryan. Okay. Yes. Now, here's how you can do improvements, go out and get these tool sets that all talk about doing an optimization or improving your conversion rate. There's tools out there that can help improve your conversion rate, but they're not going to get to the level that a customized program with a team of experts can do for you. So you think about all those tools like Privy, or there's Hotjar, or Crazy Egg, or... I could go on and on, right? There's tons of these tools out there that each provide a little nugget of conversion rate improvement, but they're not truly doing full optimization, right?
Jon:
If you're really going to optimize anything, it needs to be a scientific process of optimization. It's not just a make these changes and you're done. It needs to be the ongoing iterative improvements where you're making incremental gains, month over month, that compound and grow. That's where the big numbers are going to happen and the massive results are. I mean, you look at this and maybe this might feel daunting to the entrepreneur who's doing a $100,000 on their site right now. But Amazon has a team, a massive team. Last I heard, it was well over a hundred, doing nothing but optimizing the Amazon experience.
Ryan:
Holy smokes.
Jon:
So you think about that, and you're like, "Man, I'm at a huge disadvantage here." But the reality is, they're looking at every little data point. That team has a wide range of people doing different items, you have data scientists to analyze all the data coming back. You have test developers to build out all the tests. You have conversion strategists who can help you to better understand what should be tested. You have experts in user testing, those people who speak to your consumers and understand how to get information out of their heads about what they're thinking.
Jon:
So you have all of these other types of roles that exist that can combine, be like the Avengers, right? But individually, if you just have the Hulk out there or... I'm not a huge comic book guy. Maybe I'm mixing up my worlds here. But, I would say individually, they're not going to be as great as they would be all together.
Ryan:
Interesting. So almost in putting it in terms I can quickly relate to would be PPC optimization. You can know conceptually that I really do need to be putting negative keywords into my account to eliminate some waste, but there's a lot more to that, and there's a lot more specialist in the die that I operate in so often. But also, as I'm looking at all the accounts we work in, the way we operate is very different on somebody that sells $50,000 CNC machines versus a five-dollar mug on their website.
Jon:
Exactly. We talked about this a little bit at one of our recent episodes, where I was interviewing you and I admitted to how I had a button checked in our ads account and it cost me $2,000 that I didn't need to spend.
Ryan:
That was a fun one.
Jon:
Right. But here's the thing, I thought I was doing the right thing by letting Google manage that. And it just kept bidding me up, bidding me up, bidding me up until I spent all this money. Where an expert who's in it every day would know, "Hey, on the surface level, I get why you would want Google to own that and optimize that for you. But the reality here, is there's a much better path ahead if you have experience here." I think that's where it really comes in, is having that experience and it means that you can rely on the tool, right, and you could just have a whole bunch of tools. The challenge is going to be, that you're not going to see the gains that you would if you work with somebody who does nothing but optimization and has a team centered around that.
Jon:
Think of it this way. I spent 2,000 extra dollars I didn't need to spend because I misused the tool, right? I could have spent that $2,000 with an expert who maybe could have generated me an extra $5,000. That would have been a massive return on my investment, by making the investment there, as opposed to clicking a button that I was trying to take the cheap way out, right?
Ryan:
Mm-hmm (affirmative). I guess, in the e-commerce space, we have some very major players like Amazon, a hundred people or more on their conversion rate optimization team. Shopify has a million businesses utilizing their platform. And I assume, again that's an assumption so nobody quote me, but I assume they have an internal CRO team to a degree, because the more conversions they get, the more people use Shopify and the more money they make on the payment processing.
Ryan:
So with all of these major platforms having so much influence, do you ever think it's possible that we fast forward five years and all of us just are so trained in Amazon and clicking this to get this, or Shopify clicking this to get this, that it's almost standard like across e-com. Like checkout, I expect this, I do this, and there's very little optimization beyond that.
Jon:
I hope that we get to that point, I don't think we will. Now, here's why I hope, because... I've mentioned this book a hundred times, that's called Don't Make Me Think, right? The whole premise is that we have conventions as internet users that we've become akin to that we know and we like, and it makes the internet easier to use if everybody follows those conventions, so I don't have to think about it, right? Anytime you change that convention, you're making the user of your site think. And that delays them converting. It makes them frustrated. They bounce. They leave. They desert, whatever you want to call it.
Jon:
I hope we get to the point where there's a standard here, but I can promise you we never will. Now, here's why, they can standardize things like checkout, right? Shopify has done a wonderful job with this and this is where their optimization team internally would come in, where they are optimizing the checkout experience. However, if you go to a Shopify site and they have a custom theme and it's branded, you wouldn't even know it's on Shopify until you got to that checkout and then you know it's a Shopify checkout, right?
Ryan:
Mm-hmm (affirmative).
Jon:
And here's the thing... So there is so much to optimize beyond that. We're never in on the internet. And I hope we get to the point where things are standardized, but I never hope we get to the point where the internet just becomes this big gray area of everything being the same.
Ryan:
Yeah.
Jon:
Then it's not going to be cool. We're taking the branding out of the internet, which is part of what makes it really fun, is to go to a brand's website and get a feel for that brand, have an understanding of what their value proposition is. I hope we don't get to something where every website is just black text on white screen, with blue links, and the navs all look exactly the same, et cetera. I do think it's important that some things are standardized and some usability aspects of websites are standardized. I think that's important and we're making strides to that, but there's always going to be that brand pool. And it's going to be a push against that standard experience that makes people think a little bit.
Jon:
I really don't know how the experience, if you will, is going to be that much better over time. But I do think, if you're a small shop and you're using a BigCommerce or a Shopify, yes, use their default checkouts because they're pretty good. But you're going to get to a point where you're noticing some checkout cart abandonment, and you want to improve those metrics. And at that point, you're going to want to start to optimize those a little bit. That's when you move up to something like Shopify Plus, where you're paying a little more every month, but you get the ability to customize your checkout. And then you can start adding in some additional tools, you can start looking at moving some fields around, asking for less information if you're not using it or don't need it.
Jon:
And then on BigCommerce, one of the big things about BigCommerce is the customization that you can do with the platform. So their checkout, out of the box, if you're a BigCommerce subscriber, you can alter that, which is great. It gives you a rope to kind of hurt yourself with a little bit there. But in time, it can... If you're a smaller brand, you want to start using some of these tools, you have that capability.
Ryan:
For some of those bigger companies on BigCommerce, you can use something like a Bolt that is really focused on one thing only, and that's streamlining that process.
Jon:
I'm glad you brought up Bolt, because that's a great example of how they can take something that we just spent five minutes discussing as a standardized experience, and they've made it better. That's a great example, where there's always going to be room for improvement. How bolt has even done that, is they focused on reducing risk, right?
Ryan:
Mm-hmm (affirmative).
Jon:
So you're able to ask less information of the consumer, than you would on the standard Shopify checkout. That means you're going to convert higher, but you don't have to eat the risk of the fraudulent transactions as part of that, right? So you have options. And I think that there's always going to be room for improvement, I really do.
Ryan:
Well, I think it's also at this exact juncture to remind people, as I constantly had to be reminded, that conversion rate optimization is not checkout optimization. There is every step before, and I think this was a couple episodes ago, and a couple of steps after the fact of checkout, that conversion rate optimization plays.
Jon:
Yeah. [Crosstalk 00:13:39]...
Ryan:
So, often we as e-com companies and business owners focus, "Oh, I got to get people to check out, and then it's done." [inaudible 00:13:45] is over. But there's that huge process.
Jon:
Right. Yeah. We've talked about this a few times where... What happens when somebody gets to your site? What's their intention when they're there? All the way through what happens after they check out, how do you optimize post purchase checkout? And I think there's so much that can be done there. Again, very likely that it will never end in opportunities for optimization here.
Ryan:
Not every company is in a position to be able to start the full CRO agency or hire enough people to fully optimize their entire funnel of conversion, before and after giving the business money. Are there certain areas of CRO, outside of maybe just getting a Privy or a Hotjar or any of those other tools, that they can be doing something that would get them going towards official CRO? Like you've got to be able to grow the brand into a size to be able to afford a CRO agency or employees. So outside of just the tools, what... Is there AB test they can be doing? I mean, what does that look like for the e-commerce business owner doing a hundred thousand a year?
Jon:
Well, I think that most likely, you're not going to want to even dive as deep as doing something like AB testing, because you don't have enough traffic to prove those out, it's not going to be a good return on your time or funds investment.
Jon:
Now, what I would recommend here is two-fold. One, start tracking some data. This is not complicated, but it will help you later just to have more timeline of data. Go into Google Analytics, turn on things like enhanced e-commerce, set up some additional dashboards. Just Google e-commerce analytics dashboards, you'll find a bunch of great ways to set that up so you start tracking some good data, okay? There's a easy checklist to follow there.
Jon:
Now, other thing is start tracking user engagement. How do I mean that? Well, go sign up for Hotjar, it's $9, right, per month. Just sign up, go, and what you can do is you can start understanding how people are engaging with the content of your site. And I promise you, if you just spend one hour a week reviewing that data, you will learn where challenges are on your site, with things that you think you can do yourself that will improve conversion rates.
Jon:
Are you going to see massive gains? No, but I think if you're in the situation where you have more time than you have money, as you're growing your business and you're starting out, spending that hour to better understand your consumers yourself will help you find a better product-market fit, it will help you to improve your website overall. And as you continue to grow, you're already building that culture within yourself and your company with your team, as it grows, of understanding how consumers use your website and what data you should be looking at.
Jon:
If you just go out and you start talking to consumers, take a laptop, go to your local mall, or, I don't care, bar, doesn't really matter. Wherever your consumers hang out, right? Go to the coffee shop. Sit at the Starbucks and just say, "Hey, can I buy you a coffee, if you give me five minutes of your time, while they make your coffee. You're just going to be standing there anyways. I'll buy you a coffee. While they make it, I want you to use my website. I'm going to ask you to complete a task, and I'm just going to watch you do that. I just want you to tell me what you're thinking as you go through those steps." You will be amazed at what you learn. And all it takes is five, 10 minutes of someone's time and the cost of a coffee. So anybody of any size can do this.
Jon:
Now, you don't have to just be there all day, either. Do this for a couple hours. Get under 10 participants, and I promise you, you will walk away with a laundry list of improvements that you can make to your website. So if you don't-
Ryan:
It's almost like gorilla marketing in its purest form. Like, "You've never heard of my business before, I'm going to buy you a coffee and you're going to see it."
Jon:
Yeah. You're not trying to sell them anything, right? You're just trying to understand how they're using your website so that you can take that data and improve. The idea here is that you're getting an understanding of somebody who is a new to file customer, somebody who's never been to your website before. You're walking away with an understanding of what their first impressions of your site and the experience on your site. So the navigation, the funnel, how they find the right products, what they think of the content, right? All of those things are what you're looking for. You're not necessarily saying, "Hey, I want to introduce you to my business, so you buy something," because then they're not going to really have a great understanding.
Jon:
Now, there's an amazing book out there. It's called The Mom Test. You can get it on Amazon. It's 20 bucks or something. It's amazing. The Mom Test, we'll have our producer put it in the show notes. The Mom Test, it's got a pink cover, it looks like it's a not really helpful book, but I will promise you that it is amazing. The whole thing about this book, is that it gives you an outline of how to ask the right questions about your product and your website to get customer feedback, so that you're not asking them leading questions, that they're only going to give you positive feedback.
Jon:
So why is it called The Mom Test? Because this should be questions that you can ask your mom where you're going to get good feedback, not where you're going to get the mom feedback of, "Oh, honey, that website is awesome. Yeah, of course it's beautiful, you built it. This is the most usable website I've ever had." No. You want somebody, even your mom, to give you the best feedback about how to improve your product and what they actually think. That's where it gets important. So asking the right question is really the key here, but that's something that 150 page book can teach you, and you're not going to be expert right away. But again, going back to where we started this conversation, that is just one small item that you need to learn and master out of the whole range of conversion optimization. That's why it gets really hard to do CRO versus CRI.
Ryan:
We have to trademark that. Nobody think. I want to go back, really quick though, to a point you made about traffic being too low for CRO, because I know you have this conversation constantly. And then I get to talk to some of these people because their traffic's too low for CRO. But it crosses the minds of most business owners, as they're starting up, "Hey, I'm getting traffic to my site. And it's converting at," I'm going to make it up "1%. If I just made that go from 1% to 2%, I would double my revenue and I didn't even have to work on increasing traffic, which may be is a struggle for me or I've got really big competitors."
Ryan:
All that is true, but sometimes that time and energy should probably be spent more on getting, maybe, more appropriate traffic or figuring out what traffic is coming and is not converting. But how do you have that conversation on the front end? Because I usually get it from you, at least, after you've already had some kind of conversation around, you just need more traffic. What insights would you give to people in that scenario?
Jon:
Well, I think, there's a couple of things you have to really consider before you're going to deep dive into optimization. The first is, have you found product-market fit, right? So is anybody, A, interested in your product and, B, are they going to buy it because it's solving a pain they actually have? It's one thing to get people to your site, but if the product isn't really hitting with the market, then you are going to waste your money. You can optimize and have the best funnel and the best site ever, but if it's really just not something people want or need, then you've wasted your money, right? So that's the first thing.
Jon:
Now, a great way to determine that and the way that I usually determine it, because it's really quick and it's something most people know if they're running or managing an e-com site, is number of unique monthly users to your site. Because here's the thing, if you've generated enough traffic, that means people are interested. And if you're able to drive traffic with ads, where you're spending at a sustainable level, that means people have a pain point and they're actually willing to click on an ad to solve that pain. That kind of proves it out, right?
Ryan:
Mm-hmm (affirmative).
Jon:
Now, what's that level? I generally want to see about 50,000 unique users per month before you're going to start doing true optimization. That's actually a pretty low number. It might feel like a mountain for some people, but if you've gotten to 50,000 per month... I mean, think about that, that's 12,500 per week, it's really not that many, right?
Jon:
The idea here is that you are able to drive enough people to your site, that you can start making scientifically-backed decisions. That's really where you're going to find those gains because you're no longer relying on what you think is best, or those 10 people you interviewed at Starbucks. Now, you're starting to get in mass enough data that you can prove stuff out to where it's statistically relevant.
Ryan:
That's a great insight, I think, on just a number, but also, I think, on market fit. I talked to so many startup businesses throughout the course of my day, weeks, months, but so many entrepreneurs come up with a really cool product that they just love, but unfortunately they have no idea who their market is or who they really think is going to buy. They have an idea like, "Oh, I really thought this company was going to buy it." But if you've created a product that hasn't existed before, nobody's searching for it. Or they're maybe searching for a problem, but getting a shopping ad to show appropriately, that image may not solve or cause them to take that click. So it becomes a much deeper conversation of, what are you going to do to get this into market? Not necessarily start by optimizing your site. It's, you've got to really find that fit, whether you go to social, whether you go to Google for that, whether you go to retail for that.
Jon:
Yep. That's exactly it. Conversion optimization is usually step two, right? So first step is... I would say step zero, is find product-market fit, right? Then step one is drive traffic. Then step two is, once you've proven those out, you want to start getting a higher ROAS or return on ad spend. At that point, that's when conversion optimization can help get you to that next level. And I say this all the time, Ryan, when...
Jon:
We have dozens of clients that share both Logical Position and The Good as partners and vendors. What we find, and I say this all the time, is when you have a company like LP that can really drive qualified traffic and you have a company like The Good that can help you convert that traffic at a high level, it is like adding fuel to a fire because it just accelerates things. And it really starts to show that you can start making a living off of your website, or take it to that next level that you never thought was possible.
Jon:
That's really where the gains can come in is, at that level, after you found product-market fit, you're driving some traffic, now you really want to take it to the next level. And then it becomes this great circle of, "Hey, you got your conversion rate up. Now, you have more money to spend on driving more traffic. And then you take that funds from the sales you're getting there, you reinvest it in additional optimization." You just keep going in that circle and it continues to compound that growth over time.
Ryan:
Mm-hmm (affirmative). It makes entrepreneurs, startups, even existing business owners nervous when you start talking about paying for traffic, but the value there, even if you're doing that to get to the point where you can use CRO, is you get the insight into the intent of that visitor. If you're just focusing on organic traffic, that's great by the way. We've already mentioned in this podcast before, there is no such thing as free traffic. You're going to pay for all of it in time, money, energy. But when you're using Google Analytics, you don't get the insight of what did they actually search when they came to my site, when they came through an organic link, or they came direct to my site. I don't know how they got... I don't know why they got my link, or they knew my website.
Ryan:
But if they're using paid search, you get all this really cool data of saying, "Hey, they searched specifically for this, clicked on my ad, went exactly to this page where I sent them, and they either took the action I wanted or didn't." So I can get a lot more of those insights. And you can even get... If you are paying for it, because obviously Google is a for-profit organization, if you do pay for clicks on Google Ads, you can use Google search console to connect Google Analytics and Google Ads, and you will actually get the search queries on your organic traffic, and see how that is operating and what that search intent is, and where you're ranking. That'll actually give you real average ranking for an organic query. Phenomenal data. But again, you have to pay for it by utilizing the Google Ads platform.
Ryan:
So some business owners out there that are listening, you do have to take the leap and actually pay for some traffic to get some of these insights that let you figure out where your market fit may be or may not be. And it becomes exciting, but also challenging. And so I will put an asterisk by that, that Google does have a great product for starting up and getting your business going. A lot of their smart campaigns, smart shopping can be very powerful to get a business up and running on Google shopping, unfortunately, you don't get that search query data. That becomes problematic when you're really trying to figure out your intent or what you're actually showing for on Google that is becoming so valuable and why your business is growing. So just be aware of that, that you may actually have to do some more manual work in there, but, man, there's a lot of opportunity.
Jon:
I didn't even know about that one. So now, I don't have to get the... What is that message that shows up in Google Analytics now? It always says something about like not found or...
Ryan:
Not provided.
Jon:
Thank you. Yeah.
Ryan:
That came about 10 years ago. It was great for Google because you're forcing people to pay for it, I get it. That data does exist though, you just have to pay.
Jon:
Yep. Well, that's good to know. Ryan, this has been a great conversation. Are there any other questions that I can answer for you on how to do CRO DIY?
Ryan:
No, I've just got to go get some things on my website so I can get to the level that I can pay you to take my CRO to the next level.
Jon:
Well, I know you and I know you've already found product-market fit on all of these, so drive that traffic, which you're expert at, and then I can come back and help you convert, and we can go from there.
Ryan:
Yeah. Thanks for enlightening me and helping me figure out some of these details of CRO that I didn't know, so that I'm not just doing CRI all the time.
Jon:
Go trademark that right away.
Ryan:
Thanks, Jon.
Jon:
Thanks, Ryan.
Ryan explores whether you should or shouldn’t use PPC automation tools to assist you in your paid search efforts. The answer isn’t so simple.
For all your PPC needs check out:
https://www.logicalposition.com/
What's covered today:
What is PPC Automation?
Should we use it?
What are the benefits to Automation tools?
What are the drawbacks to Automation tools?
TRANSCRIPT
Jon:
All right, Ryan. Today we're going to talk about PPC automation, or pay-per-click automation. Now Ryan, I've been hearing a lot about pay-per-click automation tools. Now, this is mainly with brands who are doing one of two things. I see it when they're either trying to save a dollar by not working with an agency, and they think, "Hey, automation can help me do all of these things that my pay-per-click agency is doing for me." Or, they're just trying to scale their traffic up extremely quickly, and they see automation as the holy grail of them being able to do that. So, I'm really excited to learn about this, because I keep hearing about it, but I don't know much about it, and so I'm happy to have an expert to discuss this with. So let's just start by defining what PPC automation is exactly.
Ryan:
It's a big topic, and PPC automation can mean so many different things to different people. But high level, it generally means not touching certain pieces of an account, and having some type of computer system make decisions for you, within the Google or Microsoft Ads space, and it's even going into the social world as well. But basically, something gets done without a human touching it. Whatever that looks like, it's from high level computers.
Jon:
So, it's not an all or nothing. Because I was just looking at this as an all or nothing, like you're either using automation to run your PPC, or you're not. But you're telling me that just having some automation built in can actually be beneficial, as opposed to just going full automation.
Ryan:
Yeah. And there's different thoughts on that, just like everything online, even in CRO, I'm sure that it has to do with... Everybody's got an opinion, and it's different than everybody else's, on what works or what doesn't. It's based on their experiences or what they've seen, or what they've been told. And so, you've got extremes, where Google Smart Campaigns are an automation in Google Shopping, that will literally do everything. All you do is give it a budget, and what your return on ad spend wants to be, and it goes and does that. If it can be accomplished in the system, it will do it. If your return on ad spend goal was too high, for example, it's just going to sit there, and not really spend any money. If it's really low, it's going to spend a lot more money, and get you a lot more clients because the potential's there.
Jon:
So you're telling me automation can't solve all of my hopes and dreams.
Ryan:
I wish it could. There's some people that will promise you that, for sure, but if anybody is telling you that, they are lying, or they have an ulterior motive in place for you and your business. And on the other side, there are ways to use automation that help but don't necessarily do even the work in place of a human doing the work. And, as with most things, and my most common answer, which is also my least favorite answer in questions about digital marketing, is, it depends. Where should your business lie in that space around automation, specifically in the PPC realm? It's going to depend on where your business is at in the life cycle, what you're able to afford as far as agency or humans doing work, and what are the long-term goals of the business, or what are you trying to accomplish?
Ryan:
And so, let me take it in a few phases I guess, in kind of explaining what I believe in automation. You've got the full automation, where you're just going to either use a tool, or, for most businesses, use Google's Smart Campaigns in the e-commerce world to spend money for you in Google. I think in some spaces it does make sense, but it also comes with a very large asterisk, where you're having Google do all of this work for you to grow your business, but Google's goals, generally speaking, are different than yours. As a big, publicly traded company, they have responsibilities to their shareholders to grow their revenues and profits, just like you as a business owner have a responsibility to yourself or to your employees to grow revenues and profits. So for most businesses, Smart Campaigns and full automation in Google is not my recommendation, and it is mainly around understanding what's going on in your account and the ability to really scale.
Ryan:
But small advertisers, just starting up, you've never spent before, you really want to see if your business online has some legs to it if you start spending money, I do think Smart Campaigns within the Google space do have a place to play in that. And if I had to put a line in the sand, probably somewhere around $500 or less a month in ad spend to kind of prove a model. My wife, for example, would make me prove something to her before we actually jumped with both feet into a business and say, "Yeah, let's throw a bunch of money at it, and really see if it works." She'd say, "All right, let's kind of see what happens if you just kind of let Google do something on the side here to see what happens with 500 bucks over a couple months, 500 a month for a couple months." I think there's something there.
Ryan:
On the other spectrum, no automation, where you are 100% customized, doing everything either with an employee or an agency internally running an account on Google and Microsoft. That has a place to play, and I think that pool of companies where that makes sense is probably in more of a mid-tier type business model where you're spending a few thousand a month, maybe as high as 10,000 a month, where you're really just one person doing all the work for you, and you can do a lot of customization, because generally when you're at that spend level, you're not the biggest, you're not the smallest, but you're having to compete with some of those biggest, and you need some of that kind of surgical precision to find those specific keywords, or specific searches for specific products that really makes sense for your company, and you've seen the conversion rates that work.
Ryan:
And then, the vast majority of businesses fall kind of in the middle, where you do need some automation, and you do need some human strategy and somebody else, and some humans touching the account as well. And so, focusing on the middle is where it gets most complicated. So, for the majority of businesses out there, it's how much, or what parts of the account really make sense there. Is it an internal employee with some automation? Is it an agency using humans, and some automation? And what goes first? Is it the automation first, with a human checking on it, and making sure it's working? That's going to be a broad spectrum within the space.
Jon:
So, I'm hearing that it makes sense to prove out a business. So, prove out a new product perhaps, somewhere where you're just going to spend a little bit of money, and you want to start and see if there's a good product market fit there. And if so, then it would make sense to expand beyond just automation. But it does have its use cases, which is great to hear. So, okay. So, you've talked a lot about, there's three tiers to be thinking about, right? And that that kind of messy middle is where "it depends" is usually the answer, which makes sense. So, let's talk about some tools around this. What are the benefits to using pay-per-click automation tools? You mentioned one of them being to prove out a marketplace, but in terms of the tools themselves, can you talk a little bit about what the automation does in that sense?
Ryan:
Yeah, so there's a lot of different areas of PPC that you can actually automate. And a lot of PPC automation came about, let's say maybe 10 years ago it really started to get some traction, around bid management, and having some computer system actually automate the bid changes in the account, because it does get mundane. It does become difficult, in the middle of the night, for example, or around the clock, to be making changes in an account when you actually have humans working your account need some sleep. And so, bid management was really the beginning of the space. And so, that's constantly there. It's still there. Google even has automations built into their platform now around bids. They have enhanced CPC, which I believe, Jon, you had some fun with that setting when Google changed some settings around that. I believe you spent upwards of $200 per click on Google when we looked at your account together.
Jon:
Yes. That's where automation became dangerous. And again, I know nothing about this, right? And so, I thought, "Hey, I'll let Google handle it," and I clicked the box, and then ended up spending a lot of money.
Ryan:
Yep. Oops. And that, it happens. It's not, obviously, what happens all the time. But when automated systems get... be doing what they're told, I mean, they have to still have input from a human, they can do things that maybe aren't intended, and that is really the big thing you have to be aware of in using automation. They're really as good as the inputs you're giving them, or the person designing the algorithm. And so, heavy trading algorithms are really impacting stock markets all over. And so, big drops, big swings up and down can happen because of automation. So, you just need to be coming in with some concern or just awareness that that can happen, so you're watching it, no matter what level of automation you're using.
Ryan:
But there's bid management, there is automated campaign management. In fact, one of my competitors that's been around for even longer than us, and they actually have a really good name in the marketplace, they built some automated systems to take search queries that converted and build them into ad groups automatically, because that became some of the more mundane time-draining things that were happening, when you'd see a search for this specific product that you hadn't seen before, you're like, "Oh, that converted, that's great, let's make sure there's not more of that out there. Let's build a specific ad group for that search and capture all of it." Great strategies. And so, the main argument that a lot of agencies that are using automation and automated systems that are helping internal employees and agencies scale is you can spend more time strategizing on growth and let these automated systems do a lot of the stuff that are just sucking time away from maybe the things that are more mundane and you don't need to be spending high-powered talent on doing those things. Very logical. I mean, there's no scenario in which that sounds like a terrible idea.
Ryan:
What's happened with that, that I've seen over the last 10 years, is a lot of agencies have adopted this automation, and it's allowed for tremendous amounts of scale, without having to develop a bunch of humans to understand what's going on, or to know how to communicate with clients, which is in no way bad. But what's happening is as this scale is happening at a lot of agencies that I'm seeing their accounts is they're losing their touch with what's going on, and then how to strategize for actual growth because this tool is doing so much of the work, that they can't go in and say, this client may say, "I really want to start doing this," or, "I want to move my return on ad spend goal to this," or, "Should I be breaking into this market?" And because these tools are doing so much of the work, that question isn't as easily answered as if by somebody that was actually in the account all the time that saw the search queries, that was doing negative keyword reports, that was doing all these wonderful things, and bid management, that could actually respond very quickly and say, "Oh, here's what you need to be considering as a business owner or your marketing team when looking at this question."
Ryan:
And so, that's been one of my big concerns. I think about stupid, stupid movie, but Idiocracy, where you've got a guy that's been dead for so long, comes back and everybody's really dumb, and he was not smart back when he lived, but everybody got so much dumber because of automation and the world doing everything for them. I worry about that. I don't think it's happening across the board at agencies or internal teams, but I really have a lot of respect for groups of people, or agencies that have to be in the account regularly, and I see a lot better results, generally speaking, when somebody's in a Google Ads or Microsoft account making the changes, because they're seeing in real time what's happening in the market, and they have to have a lens where they're looking at things through and say, "Why is this happening? I have to go solve this problem or understand it a little bit more." Whereas, if a tool's doing all the work, they don't have to try to get in there and understand what's happening, or what is the competitor doing that's causing this to happen in this account.
Jon:
I heard you talk a lot about search and search ads and Google and, okay, so Google has some automation. Does Bing have automation? Microsoft Ads.
Ryan:
They do have some, and it's not as old as Google. So, I can't say that it works as good or has as many advancements because I also don't look under the hood and I don't understand all the engineers and what they're doing. Microsoft obviously has some very smart people and they're doing some great things in there. So, a lot of the same things you see in Google, Microsoft Ads also has a lot of that capability for automation, and I would use a lot of the same automation the same way depending on where you are in the business cycle and what is needed in your business.
Jon:
Okay. Now, what about social channels, because that falls under pay-per-click for me, right?
Ryan:
Yep.
Jon:
So, what about things like LinkedIn, Facebook, Instagram, Twitter? Is there automation built into those platforms?
Ryan:
There is some level of automation built into almost every platform, and I look at it almost the same no matter who or what platform it's on. It's an old example, but it still rings true. I wouldn't give all my taxes to the IRS to have them do them for me and tell me how much I owe them. We're diametrically opposed to what should be happening in that scenario.
Jon:
Right, success is different for each of you, right?
Ryan:
Exactly.
Jon:
Okay.
Ryan:
Exactly. So, if Facebook is doing everything for me and I'm just giving them a credit card and hoping that it does well, there is a piece of Facebook that wants me to succeed, but Facebook's success is more important to Facebook than my business succeeding. They know that if my business fails, another one's going to come up. Same with Google, same with Microsoft, same with LinkedIn. It's all the same. So, I, having been in this for a decade, I step a little bit away from automation whenever possible and I say, "Okay, how can I understand this better? How can I try to beat what the automation is doing?" Because what I've seen a lot of times with the engineers that build automated tools, way smarter than I am, as far as coding, math. I mean, it's not even close. But we're coming up with a strategy of maybe why this should be bid up or bid down, or maybe why this keyword should or should not be in the account.
Ryan:
I've still seen the humans making better decisions on that, and I think the machines and the AI is a very popular term. Artificial intelligence, everybody wants to be able to say that they do have a lot of that in their agency or in their organization, because it sounds really good. Like, "I've got this artificial intelligence that's really pushing growth and doing a lot of my thinking for me." Again, not bad at all, and I actually recommend businesses step into that space to understand it more and to use it where it's appropriate. But I still think when you have human searching and the change is constantly happening, we know that something like 15% of all searches done on Google every 90 days have never been done before. So, what is an artificial intelligence going to do with a search term that's never been done before? It can gain some insights possibly, but as we're blending in search query reports now voice search with text search, like, I type it into my computer or I search for it on Alexa or Google Home. There's a lot of different intent behind that. I've seen better results from humans looking through that and being able to filter it.
Jon:
Right, right. Especially working with natural language and understanding the intent behind what people are searching versus just what they say, right?
Ryan:
Yeah. Yep.
Jon:
Okay.
Ryan:
And so, yes, companies need to be looking at automation and considering the opportunities available, and then how is that going to compliment what they currently are doing? I don't ever look at, long-term, replacing humans... I mean, again, in the next five years that will be my long-term view. You can't predict anything in the digital space beyond five years, and really, anything longer than a year is, you're throwing darts at a dartboard way far away. But I don't foresee any time soon where I would be comfortable with my money on full automation, no human looking into that or doing it, or having a serious play within that space. I spend a decent amount of my own money on all these platforms, and I see the automation. I know the biggest players in the space. I mean, if you're in the PPC world, Marin, Kenshoo, Adobe, Acquisio. Probably hundreds of others that are doing the same thing in bid automation, in addition to Google and Microsoft, including Facebook will do some bid automation based on goals. There's no shortage of those. There's no shortage of very, very smart people working to create the next best automation.
Jon:
I think you made a good point earlier, and that's something I think you just touched on right now even, but it's in the favor when you do bid automation of Facebook or whoever to have that bid go up and up and up, right? So, automating means that escalation seems to happen more quickly. Is that not true?
Ryan:
Yeah, I mean, we saw it in your account, right? Where you were averaging in your business $20 a click, which is reasonable, based on how you spend money and the returns you get. But then all of a sudden, if everybody is on automation and everybody's using Google's automation on Google, how does Google know who's going to win? Does Google play, you know, make it socialist where everybody gets 5% because there's 20 people advertising, so we're going to even it out and make everybody little? How do you grow beyond that? And that's where logic comes into my side and says, okay, we can't all be on automation or there's just, there's no win. There's only so many ways you can look at moving bids up or down, for example. They can only move up and down, they can't move sideways, they can't move diagonal. And so, it's understanding more about the user as we add layers in from a remarking perspective, from an RLSA perspective. The more information we have about this user allows us to get more aggressive or less aggressive than maybe a competitor that doesn't have that information.
Ryan:
And so, all of these layers we add on add complexity and give opportunity to people that have that data. So data is actually probably, in my opinion, more valuable than some automations. The more data layers you can get, and you can get lost in data, so don't get me wrong, the idea that "Oh, big data, all you need to do is look in all these thousands of Excel sheets to figure out where that one specific customer is that you want and go find them and bid on them." It's more about using that as you're making adjustments and using the understanding and strategy behind why you may or may not be making this move.
Ryan:
It's fascinating, when I look at all the people I've hired in the digital marketing space and the people that have really succeeded on the backend of making the moves in an account. It's really, from a human perspective, becoming an art form in how you look at a Google Ads account, and you're kind of, I joke with the guys and girls on the team, or ladies on the team, that it's kind of like the Matrix, where you're looking at just all of these digits flying around. And the really good paid search account managers in the account really see it in a much different light than somebody like myself that would go in and say, "Yeah, okay, I see it says $200 and it says conversion." They're seeing all these different layers because of their experience. I mean, some of our people have been doing this for over a decade, 15 years actually, in the accounts, doing it, and they're so efficient and so crazy of what they can do.
Ryan:
And we've matched that up with people that are very good at gaming, like, the strategy piece of gaming. And so, really, we're looking at almost the gamification of digital marketing, where we're looking at these and saying, "All right, you're trying to beat these other advertisers." I'm a hyper competitive individual, as you know, and you're pretty darn competitive as well, in your basketball and marketing world. I want to win. And we find people that really want to win, and then they add their ability to see all of these moving pieces and saying, "Hey, if that competitor of our client goes out of business, that's unfortunate for that company, but it's really good for us and our client."
Ryan:
It becomes fun but also interesting in how you're taking that human that is really good at paid search management, and what we're trying to do is kind of make, right now my best analogy is kind of the Terminators. How are we using technology and bolting it on to them to make them more effective at what they do? Rather than replacing it, how do we give them things they can look through with weird glasses or things they can add onto their mice? What are we doing to make them more efficient as a human, and that's how we look at technology and automation.
Jon:
So next time I visit Logical Position, I'm going to be interacting with a bunch of cyborgs basically.
Ryan:
I mean, hey, if my vision comes in place. I mean, maybe two years out on that one.
Jon:
Dart board, right? That's one of the darts.
Ryan:
Yeah, one of the darts. But it's... I think the best use of PPC automation, personally, and this is my lens I look through and how we're looking at automation internally at Logical Position is, for the majority of companies in the middle, it's, how are you supplementing the humans? Instead of replacing them, how are you making them able to do more? So, we use, scripts are a great automation that a lot of people don't think about. We're using scripts to say, "All right, this ad group had a hundred impressions by 6:00 AM yesterday and it has zero today. What just happened? Something is broken there. Let's go in and see that." Replacing some of that minutia or things that just get really bored or tedious, or we just don't have the scale of a human in a large account to get to all of those pieces efficiently. How can we say, "All right, I need this to go do that"? Maybe it's not going to go through the search query reports for us and find all the negative, but it can bubble up some opportunities.
Ryan:
I've talked to a phenomenal technology company, Metricstory. If you haven't checked out Metricstory I think they're really cool, and they're really, man, they have some smart engineers. They're doing some automation where they're able to bubble up new opportunities based on scraping a Shopping search query report and saying, "Hey, these converted and they're actually not showing in your text ad or search portion of your account, from a search query perspective. You should put this keyword in there because it's converting on Shopping." And it can, based on their algorithm, their really smart algorithm, it can even give you an estimated return on ad spend, saying, "Hey, this keyword we think is going to get this based on ad groups around it."
Ryan:
So we're really looking at leveraging some of that in our efficiencies. Say, "Okay, if we have that, can we make this person able to focus more on bids on text ads because we have this filtering a search query report on Shopping?" Or we're able to find losers in the search query report on the text ad side much quicker than we could if we had to comb through it by hand.
Jon:
Yeah, this is a really interesting point, adding on to what people, the strategy that a human person can bring to this, with a little bit of AI, helps them to push this even further. But you still have to have the insight that somebody is bringing to the table with that experience to really pull out the meaningful changes. And I thought it was really interesting, you said earlier that aligns with this, bids and these automated bid machines, they only can go up and down. They can't go sideways or diagonal or any other dimension, right? And that's what a human is able to do.
Ryan:
It's a frustrating answer, but every company should be looking at kind of a backstop. And then also, if you're a company that has one person managing your account internally, I always had the worry as an agency of the bus theory, like what if they get hit by a bus? I told my team, nobody could take the public transportation because you can not be hit by a bus. We don't have enough backups. But in that scenario it's like, okay, well, who else is going to be aware of that? And it can't just be an automated system that's going to be continued going if they evaporated tomorrow, because it's unencumbered, you know, what's going on.
Ryan:
So, having some automation helping them, but also documenting things too so that an automation doesn't need to take all of it, but that another human could come in and replace or augment as well if somebody needs time off or pregnancy or birth or sickness, all these other things that we, at scale, with 750 employees here, we can do that automatically but a lot of companies don't have that ability. And so, they need probably a little more automation just to protect themselves but also ensure that there are some humans looking at things.
Jon:
Well Ryan, this has been extremely educational for me. Thank you for sharing all the knowledge around this. I am really looking forward to the day that I walk into Logical Position and I'm interacting with some cyborgs and then having you bring that skillset over to The Good so that we can continue to do the same on the conversion side.
Ryan:
Oh yeah. That looks fun, huh?
Jon:
Yes. Awesome. Well, thank you so much for educating me today. Really looking forward to not spending $200 unnecessarily on my own ads by checking a box for automation in the future. So, thank you for saving me on that earlier on. Any last words on this?
Ryan:
Of course, you can just send me a $200 bottle of wine and it'll be just the same.
Jon:
Perfect, I know what you like. It's in the mail.
Ryan:
No, I think it's good just to always be careful with automation. Don't assume it's going to work for you always. Just have smart humans working with you.
Jon:
Awesome. All right, thanks Ryan. Have a wonderful afternoon.
Ryan:
Thanks Jon.
Jon dives into why Conversion Rate Optimization doesn’t stop after the purchase and the different points after-purchase that you need to optimize in order to drive higher revenues.
Link:
The Essential Guide to Ecommerce Sales Promotions
(In this article, #51-78 are focused on promotions you can run that aren't discounts)
Outline:
First, Jon cover’s different points after purchase that CRO can have an impact:
In cart, right after purchase
-Thank you page
Email post-purchase sequence:
-Confirmation email
-Shipping confirmation
-Customer service
-Please leave a review – just click here
-Add to general marketing email list sends
He also explains the metrics a brand should be looking at to track progress of post-purchase optimization:
*-Return purchase
-CLTV
-Conversion (overall, should go up with repeat customers!)*
Jon is a firm believer that companies shouldn’t use discounting in post-purchase communications. However, there may be offers you can make that are not discounts. You do not want to become a discount brand.
Finally, Jon explains that a successful method for getting referrals post-purchase outside of a set loyalty program is just to ask! Very few do!
Transcript:
Ryan:
Jon, today, I really want to move our focus to an area that I think many companies and individuals would not normally think of conversion rate optimization and the impact it can have. I'm talking about post-purchase. Most people generally would assume that once a purchase happens on the website, CRO has done its job, time to move to the next person on the site and get them to convert. But, because I know you, I'm aware that CRO doesn't stop at the purchase. There's a lot more to be done. Can you explain to people, that maybe aren't aware of post-purchase conversion rate optimization, what they need to be thinking about, what they need to be doing, and why it even exists after they've already taken the sale, done what you wanted them to do originally?
Jon:
Right, and I think that's an important point there, Ryan, which is that most people think that conversion optimization stops as soon as you get someone to purchase. I think that's really shortsighted and it's a big problem because so much of the consumer experience and getting people to purchase a second time, is all about what happens when they purchase that first time. So, if you get them to convert, your job's not done. At that point... you got to think of this like a marathon. You just ran a marathon. Most people who are seasoned marathon runners, they get through that finish line. They have a process they still go through to cool down, protect their body, recover a little bit. It's the same thing here. After you've-
Ryan:
... And I just go drink beer.
Jon:
... Right, exactly, and that's why you don't run marathons.
Ryan:
That's why I don't.
Jon:
Learned that lesson the hard way, huh?
Ryan:
Uh-huh (affirmative), I did.
Jon:
Yeah, so exactly, this is it, where we can't just stop and drink a beer. You've got to go through a follow-up process here that can really, really have a massive impact on your overall metrics of your site and success and revenue, and even your conversion rate, because most people don't think about that. But overall, your conversion rate should go up with repeat customers.
Ryan:
True.
Jon:
There's a handful of things you should be thinking about that I think we should talk about today. There's a bunch of different points after purchase that can have an impact with conversion rate optimization, and if you optimize these points, you will see higher revenues.
Ryan:
Okay, so somebody's purchased on my site or client's site. Action's done. Does post-purchase conversion rate start after the product arrives, or where's the first point that we can be making an impact to improve conversion rates in the future?
Jon:
In the cart. It starts right then. As soon as somebody completes the order, gives you their payment, what happens?
Ryan:
Hmm.
Jon:
Most of the time, people aren't really considering the first step, which is a thank you page. What is the content that you're putting on there? Now, there are ways to, even on that thank you page, influence so many extra metrics. You can influence your average order value on that thank you page. There's some great tools out there right now. One of my favorites is a company called CartHook. CartHook has a tool, where you put it onto your thank you page, and it actually shows you complimentary products to what you bought and says, "Do you want to add it to the order?" You're doing an upsell after the purchase. You already got them to commit, and maybe they're thinking, "I bought those shoes, maybe I'll add a pair of socks. Why not?"
Ryan:
Now is that in addition to maybe also having upsell in the shopping cart, or do you usually recommend just get them to commit to something and then try to upsell them later?
Jon:
Right. I think that's a big mistake people make is to do the upsells in the cart. I don't think that's serving the consumers' needs, because serving the consumers' needs is helping them complete that checkout as quickly and easily as possible. You want to get that conversion. That's most important, obviously. So, after you've completed that sale, then, go back and do the upsells. Now, that doesn't mean you're not doing upsells throughout the funnel and throughout the product detail page or categories, things of that sort, right, complimentary products. But I don't think you should be doing it in the cart. That's when you just closed the transaction, at that point.
Jon:
A lot of people like to think of it like retail, where you're at a grocery store and they have all the candy bars and magazines, and you're just standing there in line. It's not like that because online, you shouldn't be waiting around at the checkout. Those items are there at the grocery store line because you're waiting for the person in front of you. You're likely bored, and they're capturing your attention. It's a captive market. Well, when you're in the cart and you're checking out online, you just have one goal, and that's to get it done. So, anything you put in the way there is actually going to become a distraction and annoying for the consumer. Not something where, "You're entertaining me with the latest gossip about celebrities for five minutes while I'm waiting for the family in front of me that's scanning 300 items at the grocery store."
Ryan:
Oh, you follow me at the grocery store, huh Jon?"
Jon:
Exactly. I got one kid. I can't imagine having a whole family like yourself. I think the first step is definitely in-cart, on that thank you page. Pay attention to the messaging. You can run a lot of A/B tests on the messaging alone and see what resonates. But also, adding a tool like CartHook, where you're figuring out all of these additional metrics and how to increase things like customer lifetime value, average order value. All of that kind of even goes back into your ROAS, your return on ad spend. If you start thinking about it this way, the higher your average order value, the higher your return on ad spend.
Ryan:
Mm-hmm (affirmative). Now, in addition to something like a CartHook offering up some complimentary products, is there any kind of messaging or kind of like, "Hey, I really want to make them feel good about what they just did. They spent money with me..." because most companies are like, "Hey, thanks. We'll be emailing you a confirmation," and that's pretty much the thank you page. Do you recommend adding more to that, or is it just kind of just get the products in front of them, get them in and out type thing?
Jon:
Well, we've actually run some tests, where brands who already participate in like 1% For Good or some of these other donation or charity causes, at that point, and reemphasizing that on the thank you page. Like, "Thank you for your purchase. Did you know part of your purchase is going to these great causes?"
Ryan:
Oh.
Jon:
Right?
Ryan:
Mm-hmm (affirmative).
Jon:
So, what's happening there is you're actually just making somebody feel even better. You're reassuring them about their purchase. I think that's really important there, is the reassurance. I don't know about you, but sometime... like, I bought a new car six months ago now, maybe. There's nothing like the joy of driving the new car home. But then you're sitting at home and you're like, "I'm a little guilty. I feel guilty. I bought a new car today." You know what I mean?
Ryan:
Mm-hmm (affirmative).
Jon:
It's that thing where it's like, "I just dropped a lot of money on this." Yeah, it's awesome, but at the same time, I could have got a used car that had a hundred thousand miles on it and would have got me from A to B. It's the same thing when you buy online. You need to reassure people that... they probably didn't need what they bought from you. Maybe they had some need around it. But if you did a great job with your marketing sales and every everything else but your customer experience, you helped them see the benefit of a product that maybe had a little more cost to it than what they were planning to spend, but there's some value there for them. Sometimes that's just the emotional value. But, at the same time, reassurance is really key on that thank you page.
Ryan:
Got it. Okay, so we've got the thank you page dialed, we've got some upsells potential there, we've told them that they're amazing and they bought from an awesome company. Now, how do I go about encouraging future business from this customer of mine?
Jon:
Well, I think the first thing that really needs to be paid attention here is that what happens in email post-purchase. Now, most people don't think about this when they're optimizing a site. They usually just leave it to whatever the defaults are. So, if they're using Shopify, it will automatically send out some emails, depending on what email provider, using like a Klaviyo or something like that. It will have some of these built-ins with some best practices. But this is a ripe opportunity for optimization that most people are not thinking about.
Jon:
I always say there's five emails that should be sent out after a purchase. It's a huge opportunity if you're missing any of these five. Now, the easiest one, and the first, is always confirmation email. The order went through, all is well, it's received, we'll be shipping it on this date or soon. Just confirming everything's gone well, it's gone through. Just send them an email, and that email should go out immediately. There's no reason to hold on to it, even if you don't have a shipping date yet. It doesn't need to have tracking information in this email. It's just, "Hey, you know what, we have your money, your order, here's your receipt," right?
Ryan:
Okay.
Jon:
That's a good opportunity, at that point... I've seen this done very well, and I don't know what the tool is, but I should definitely look into that. I've seen this done so well, where they even do the upsell in that email. This happened to me last week. I bought some lights for my yard, solar lights, and to light up what's been real... we live in Portland. It's super dark here this time of year for long hours of the day. So, I'm driving home and it's dark in my driveway. Well, what I did, I went and I got some solar lights. Yeah, probably not the best for how dark it is here, but we'll move on from that.
Jon:
In the cart, it said, "Hey, you bought a certain number of these, did you want to add more?" That was a great in-cart experience and I decided not to do it. But then, I got the email right away. In that email, it said, "Hey, if you change your mind, you have four hours from when this email is sent to add a few more before we're going to start packing up your order, and you'll have to just place another order." And it said, "Click here to add four more, eight more or twelve more." It even had a discount on them. I thought that was really interesting. I wanted to see it, what would happen, just from a research standpoint, so I added four more to my order. It was great. It just took me right back to a page on the site that said, "Thanks, Jon. Here's your order number. We added four more to it. Your new total is X."
Ryan:
And you got a discount on it, on adding the four more.
Jon:
Well, it was because they didn't add any more for shipping those extra four, right?
Ryan:
Mm-hmm (affirmative).
Jon:
So, it wasn't a percentage off. It was saying, "Hey, we'll add these, but we won't charge you more to ship them."
Ryan:
Got it.
Jon:
Now, you could do a whole bunch of different items around discounting. We should definitely talk about discounting today, a little bit there. But I think the point here was, is that they had a captive audience. I'm going to look at my receipt email. Most people do.
Ryan:
Yep.
Jon:
It should be a highly opened email. So, it's a great captive audience and a great opportunity to do an upsell that nobody really thinks about.
Ryan:
No, yeah, and I can easily see how... you didn't take the complimentary products, but maybe you suggest something maybe even more different in the email, but offer a discount. Like, "Hey, add this in and we'll give you 10% off, and just include it in the order and it'll go out at the same time," or something.
Jon:
Right. And you think about it, it's a free cost of sale at that point for the retailers. So, there's really no additional cost in sending that email. You're already going to send the receipt. Email is super cheap as is anyways. But you don't have to advertise to them. You're not remarketing. You're not doing any of that that could add the extra cost.
Jon:
Okay. So, we have confirmation email. The second email is shipping confirmation. Once the order has shipped, let the consumer know immediately. "Your order has shipped. It's on its way. Here's the tracking number, and it should be there within this date range or on this specific day." Now, even if the tracking number is not available in UPS or FedEx or whatever at this point, because those can take 12 hours or 24 hours to show up in there, you can always just say, "Hey, this link won't show any results for X amount of time." But you should give them that right away because they're going to reference that, perhaps, throughout the order process or while they're waiting for the order. But I think it's a great opportunity just to confirm things have been shipped, all is still well, it's going to be there.
Jon:
It's a great opportunity, at that point, to also offer any resources. So, you can say, "Hey, you bought these solar lights. Let me include a video..." and this is exactly what they did for me. They included a video that showed me how to put them together, in that shipping confirmation.
Ryan:
Hmm.
Jon:
So now, I had something to kind of tease me a little bit until the products arrived. I thought it was super interesting because, not only was I just getting that shipping information, which normally I would just look at, but archive and save in case it didn't arrive, but I actually went through and reengaged with the brand by watching an installation video, which is a great opportunity. Now, when I get the product, immediately I can open the box and start using it. Right?
Ryan:
Oh, yeah.
Jon:
That's a much better experience. So, we've got confirmation email, shipping confirmation email, and the third email I always recommend is a customer service email. What do I mean by that? Well, this is just a check-in email. This should be a couple of days after the product was supposed to arrive. What should happen here is it should say something like, "Did you receive the product? Was everything okay? If not, just reply to this email and let us know." Pretty simple, right?
Ryan:
Mm-hmm (affirmative).
Jon:
It's a just let them know you're there, that they have a channel if there's an issue. And what you're going to do here, is you're going to prevent a negative online review. Because if they have a problem, they're not going to go online and vent. They're going to say, "Oh, you know what, I got that email from them. I'll reply to that email and try to figure this out." And then, you have an opportunity to turn a bad situation into a good one very quickly. You're preemptively handling that situation by just letting them know you're there. And if there's no problems at all, it's still awesome just to know that that brand is available for you and that they're there.
Jon:
I often recommend, have this email either go out the day the product should arrive, and you can say something like, "Your product should be arriving today. Let us know if you have any problems," and things of that sort. It's also another opportunity to send some more resources. If you want to link to more stuff up on your site, or there's... we worked with a company that sells tents. They did a really good job with this. It's like how to set up your tent, right?
Ryan:
Mm-hmm (affirmative).
Jon:
Because a lot of people struggle with that. They've gotten a lot easier over the years, but it's still something that required a little bit of knowledge. So, we've got confirmation emails, shipping confirmation, customer service, and then the fourth email I always recommend is please leave a review. This is a review request. Now, this should definitely go out a couple of days, maybe even a week, after they've gotten the product. The idea here is just make it so simple for them. There's a couple of tools that make this super easy. Shopper Approved. It does this extremely well. It's a reviews platform, where they just send out an email that asks for the review, and then it has five stars in the review, and it says, "Click the star that you want to rate."
Ryan:
Yeah, I've actually done that before and didn't even know I was giving a review.
Jon:
Right. It's one click.
Ryan:
It's phenomenally simple. Me, as an online marketer, I'm in it all day every day. Then I got a review email from one of the companies I bought from, and it was Shopper Approved. Blew me away. Like, "Wow. I actually just accidentally gave a five star review." I was going to give it anyway, but it was like, "Wow, that was ridiculously simple."
Jon:
Yeah, and that's exactly what it's about here, is just make it quick, make it easy, but ask for the review. Most people, at this point, don't ask for a review. They're asking for a review on their website, which I can promise you, nobody is going back to a website, from finding that product detail page for the product they purchased, and giving it a review. It's a huge red flag and perhaps we should do another episode, Ryan, on product reviews, because it's a huge red flag for consumer trust.
Jon:
If you see, on a product detail page, that you can leave a review, that tells me that there are so many unverified reviews on there. I don't trust what's being said anymore because the manufacturer or retailer could just be sending their entire family to that page. I want to know that they're actually verified reviews from people that have purchased and that's the only reviews that are in that mix. The best way to do that is just ask for it via email after the purchase. It's going to be a verified review. That also, and you probably know more about this though, Ryan, but that also allows you, if they're all verified, to have the star ratings show up on your product detail page listings in Google search results.
Ryan:
Yeah, exactly. You need to have a review aggregator that's approved by Google that's looked at their system and said, "Yes, you're actually getting legitimate reviews." I know there's some plugins on a lot of eCom platforms that allow people to just leave reviews on the site, like you said, and it doesn't build trust. Those can't be sent to Google. So, if your website is, "Hey, I got a place to get reviews. I've got 500 wonderful reviews on my website. How come Google is not allowing me to send them?" It's because you haven't used one of the 30, I believe, companies that are approved to send those reviews to ours, and Google trusts that they're legitimate.
Jon:
Now, you're not gaming the system, so that's helpful.
Ryan:
Mm-hmm (affirmative).
Jon:
So, five emails. Confirmation email after purchase, shipping confirmation, customer service, leave a review, and then the fifth is just add them to your general email marketing sends. So, whatever that next email marketing send is, just add them. Now, here's the thing. If you're going to send an email every day, or even every week, the cadence can't be the same as somebody who clearly signed up for your marketing emails on your site. Now, I'm suggesting sending them marketing emails, but maybe it's once a month. It's just some way to stay in front of them, and these emails should be more helpful. They shouldn't be, "Here's the big promotion we're running right now." It should be something like, "Hey, Valentine's Day is coming up. Have you thought about ordering by X date to ensure that you'll have it in time?"
Ryan:
And so on this, real quick though, you would, in theory, keep them out of your marketing emails until they get to this point. You don't want to automatically, you purchased, you're in my marketing email, and you're going to get a marketing email in the middle of this cadence of emails. Like, you don't want, "Oh, shipping confirmation." "Oh..." two hours later you got the marketing email.
Jon:
That's exactly right. I think that's extremely important that even if they signed up... okay, this isn't a tactic I recommend. You know I rail on this all the time. But even if you had a pop-up, and you offered a discount to sign up for the marketing emails on your site before they made a purchase, you need to hold those emails a reasonable amount of time, maybe a day or two, to see if they made a purchase right away. There's so many of these tools, like Klaviyo, that make that pretty easy to do, where you can just add an exception real quick to hold them until the next email blast or something. But I would wait for them to at least complete that purchase. If they complete the purchase, then don't send a marketing email until they've gotten the other four emails.
Ryan:
All right, so we've got an email cadence. We've got in-cart right after the purchase. Some of the things you can do on the thank you page. We touched on this a little bit, in the process of going through there, but in addition to CartHook and maybe the email platform you're using, are there any other CRO tools people can be utilizing or looking at when they're trying to improve post-purchase conversion rates?
Jon:
Well, I think that it's not as data-focused on tracking every click and movement at that point. So, it's less about the toolsets here. It's more about that customer experience. Email is going to be your biggest toolset here. Yes, there's a lot of stuff you can do to run tests and see how much people are engaging with that thank you page, and there's tools like CartHook and several competitors to them, but I don't think that being as data heavy at this part of the process is going to be very beneficial.
Ryan:
Got it. And a lot of that is going to be measured by lifetime value of your customers. Are they increasing or not? So, if your lifetime value was $500 and then you implemented a bunch of these things Jon's talked about, did it move to $700 or $800 over a course of the time period that you're outlining?
Jon:
Right. And there's really three kind of goals that you should have from doing this, and three metrics that you should be tracking by optimizing post-purchase. The first is that customer lifetime value, of course. We want to see that go up over time. What influences that? A return purchase. Did you give them such a good customer experience that they came back and purchased again? Another thing is number of reviews. That's a great one because people are only going to leave a review if they're satisfied or if they're deeply unsatisfied, right?
Ryan:
Mm-hmm (affirmative).
Jon:
That kind of mushy middle there, nobody really leaves a review, typically. That's why you very rarely will see like a three star review. You're going to see a five or a one, or a four, sometimes people don't like to give five unless... they reserve that for the one time a year. Maybe it's between four and one, but you see very few in between, typically. Then the third metric, besides those, that you should be thinking about is just your conversion. Your conversion rate overall should go up because of those repeat customers, in the sense that if you get more people to come back and purchase again, you should see your conversion rates go up because it's going to be an easier purchase, you're going to have more sales. So, it kind of feeds itself in this cycle.
Ryan:
Got it. So it's post-purchase conversion rates not something I've normally thought about, or even associate with typical CRO and what you're doing with customer testing and heat mapping and all these wonderful things you do onsite. Now, is generally post-purchase CRO a part of an overall CRO strategy or do you kind of separate them into like, get the purchase CRO and then post-purchase CRO?
Jon:
That's a great question. Now, my initial thought on that is that it is something that is built into what we do at The Good, and it should be part of a full conversion optimization. But it is a graduate level step. What I mean by that is if you haven't gotten into college and completed those courses of just getting the conversion, then there's no reason to focus on post-purchase yet. So, you really want to have a good customer experience up to that point, and then you can start working on post-purchase optimization. But it is an overall part of the CRO picture, and it really should be.
Ryan:
Now, one easy way to increase your conversion rate is to throw a bunch of discounts out, obviously. If people save money, of course they're going to buy more, generally. But how do you, or do you, recommend any discounting post-purchase? I kind of mentioned like, "Oh maybe I would throw a 10% discount out for complimentary products in an email." But that may be a bad idea. I don't know.
Jon:
Well, I'm not a proponent of doing discounts on a site at all. I really believe discounting is not optimization. I call it margin drain, because that's really what it is. Now, can you get more sales through discounting? People love a discount. It does work, but I'm not a proponent of it. I don't think you should be testing discounts, testing promotions in that way. There's a lot of other ways to be doing promotions that aren't just a straight up discount. And the reason is, and I say this all the time, once you bring a new-to-file customer in through a discount, your brand is forever a discount brand in the eyes of that consumer. And it's just not going to change. That means, every time you do a purchase in the future, you're going to have to offer a discount. It's just what's going to be expected. They're never going to want to pay retail price because that's not what the expectation is.
Jon:
But there are ways around this that are still intriguing offers that aren't discounts. We actually have an article up on our site. We'll have our producer put it in the show notes. But there's an article that we have up on The Good that's something like 90 or 100 different types of offers that you can do that aren't discounts.
Ryan:
Oh wow.
Jon:
There's just an unlimited number up there, it seems like. Now, things like buy one, get one, bundling. I mentioned, just earlier, how the company got me by saying, "Hey, we'll add four more to your order without charging you more for shipping." So, you can do things like shipping promotions. Free shipping should be something that you're considering. If not, look at a better fulfillment partner, perhaps, but there's a lot of options out there. That you're allowing people to upgrade their shipping speed.
Ryan:
Yeah so, one final point, I think, in the post-purchase thing. Something you and I do a lot of between our organizations is referrals. I'm always referring business over to Jon and Jon's very good at referring business to us. But in the eCommerce space, very rarely do I get asked to refer somebody else. I just bought this product. I'm really excited about it. I mean, more than likely, I'm going to be willing to refer, but very rarely do I get asked about it. And a lot of times it's... there may be a loyalty program system out there that does some of this, but what do you suggest companies do to increase some of that potential for referral?
Jon:
Just ask. I think, as you mentioned, so few do, and there's... most eCommerce managers are spending all this effort and money in affiliate programs, where they're getting people to recommend their product in exchange for an affiliate fee. But they ignore the power that people who actually buy can have. And I think that's a mistake. They really should be thinking a lot about how can we just get somebody who purchased, and is happy with that purchase, to be a referral source? One of the things you can do is, in that email chain that I mentioned of those five emails, instead of asking for a review, you could ask for a referral at that point, right?
Ryan:
Yeah.
Jon:
You could mix it up and do a 25% you're asking for referrals, 75% you're asking for a review, however that mix is that you'd like. There's a lot of options there. But the reality is, is all you have to do is ask, and it should cost you nothing at that point. You could offer them a gift in exchange for making a referral, something of that sort, or have a loyalty program that you're doing. There's some great tools out there. I'm a huge fan of one called Smile, smile.io. Smile.io, however you want to pronounce it. But there's a handful of these out there that do a really good job with the loyalty programs. And one of those is asking for referrals and doing it at the right step in the process. Just so few people do it that it blows my mind.
Ryan:
Is there a right or a wrong way to ask for that referral? Is there a way that it can make people mad, or there's a way that you've seen that's been very successful in that email chain of asking for one?
Jon:
The first thing I would do is offer them something of value to share. So, instead of the overt, "Just click here to publish to your Facebook a, "I just bought this product, you should too," or something that is super cheesy and very pushy. That's the mistake I see, typically. And most people aren't going to do that. But if you make it something that is really useful, like, "Hey, I just bought this tent from this company, and here's a video on how to set up a tent, or a trick on how to set up a tent, perhaps, that would make your life easier if you camp too." So you say, "Okay, well, share that out," perhaps with this referral code, something of that sort. And you can offer people a discount.
Jon:
Now, a lot of times... I do this a lot. If I really like something and I'm recommending it to somebody, I'll say, "You know what, I know I get a discount on that. Why don't I just make the introduction and then I know you'll get a discount." So it's, "Offer 10% off to your friends," or whatever that might be. Or, "Use this code and your friends get free shipping," or, "They get a free gift if you refer them." It doesn't, again, have to be a percentage off. But I think there's a lot of options there and a lot of offers that could be mixed in. It just requires a little bit of thought and creativity instead of doing the lazy thing that every eCom site's doing, and either not asking or just saying, "Hey, use this code and give it to your friends for a percentage off."
Ryan:
Got it. So, just kind of make it a little more fun or exciting, or not just the basic "give me a code."
Jon:
Right, exactly.
Ryan:
Well, that's awesome. Okay. So, we've got a lot of potential for increasing conversion rates from thank you pages to emails to referrals to countless different things. Thank you, Jon, for downloading all of that education on us. I think there's just a ton in there that I'm actually going to start implementing on some of my brands. Anything else you want to leave us with?
Jon:
No, I think that the first thing to think about is getting that conversion. After that, there's so much more opportunity to go that most people don't pay attention to. I think it's really important that they take that extra step. I appreciate you bringing this topic to the table and us discussing it today. Hopefully it's a value for folks.
Ryan:
Oh yeah, I'm sure it is. Thank you, Jon.
Ryan is excited to dive into the often overlooked remarketing options for re-engaging those prospects who don't convert on their first visit to your commerce website.
Contact Logical Position for remarketing needs at https://www.logicalposition.com/contact.
Reach out to Ryan Garrow on LinkedIn: https://www.linkedin.com/in/ryangarrow/
Transcript JON MACDONALD:
Ryan, good to talk to you again. Today we're going to talk about remarketing and re-engaging your audience, how does that sound?
RYAN GARROW:
Man, nothing gets me more excited, John.
[laughter]
RYAN:
Marketing is a huge piece of online marketing driving traffic, it's an often-overlooked piece of digital marketing. I'm excited to drive into some of these details with you and hopefully shed some light on the mystery that is remarketing for most companies.
JON:
I really want to talk about a few things today, what do you do when someone doesn't convert on your site? You spend a ton to get folks to a site but then when they don't convert on that first visit because let's face it, most visitors aren't going to convert on their first visit, how do you keep marketing to them and close the sale and get that conversion? As my understanding, and hopefully, you're going to school me on this today this is typically what is called remarketing and it can be extremely powerful when done right. I do know that, tell me a little bit about how you and the team at Logical Position define remarketing?
RYAN:
Man, nothing as a marketer can make you more frustrated than somebody not doing what you wanted them to do when they came to the site because he spent all this time and energy sculpting traffic, eliminating waste saying, "All right, they are searching for my exact product and service. They are ready to buy, they're ready to put a credit card in." To get you into the right category or the right product page and then conversion rates on websites dictate that for almost every company we work with over 90% of that traffic goes somewhere else to do something and not take an action, and it just is frustrating.
Especially if you do some of those real-time heat map watching and watching people on your site behind the scenes, you just get frustrated like, "Why didn't you click that? What's wrong with you? You should have just gone and clicked add to cart and buy?" Remarketing ends up becoming the step in the process next. You almost need to look at remarketing as a bunch of different layers. It's not just one simple, "We're remarketing, we're good." There's search remarketing, there's remarketing through email, there's remarketing through display ads.
There's so many different things you need to be doing and be aware of in the e-Commerce space to help bring those people back to the site and take the action you want. Each one of them needs to have a lens of what's the return, am I doing it properly, is it generating the type of return that I need it to be as its own entity? When you look at driving traffic through paid search, and I think one of our earlier podcasts we talked about all traffic is paid traffic.
At this point, it is requiring some level of investment to get that traffic to your site. Whether that's just time, energy, money, thought, something's happening that you're putting out there to bring people in. Paid search, hopefully, there's a return that's making sense with paid search as its own entity, search shopping, Bing, Google, Yahoo, whatever that looks like for you hopefully there's a return that makes sense.
An additional marketing piece needs to be re-marketing, and it needs to have a return that makes sense for the business and for the products and services that you're selling. Within that re-marketing entity, there's different layers within that that say, there's this type of re-marketing and this type of re-marketing and this type of re-marketing and each one of those has different expectations for return. It may be five years ago re-marketing was vanilla and now we have the Baskin Robbins if you're in the Oregon area and you know Baskin Robbins, there are 31 flavors.
There's all these different things you can be doing with re-marketing that for some brands it's overkill, you don't have enough traffic to use all of these wonderful different things. Other brands are using just the most basic remarket and they should be using a really complex additional layers of re-marketing to help drive different types of traffic, different ways, with different expectations. Brands should be doing it and they should be doing it more than likely more complex than they are. I think on average, most companies are not utilizing all the things they can be doing, even just through the simple Google platform of re-marketing, there's a lot there.
JON:
I look at this as two sides. One is what is the data that you need to be tracking or where are the points where you can then have data to know who to remarket to and then on what channels can you be re-marketing? Maybe we break that down. What events or obviously, there's the simple page view. Somebody views a particular page like a product detail page, you can then start re-marketing that product to them. What are some other options there for how to get data to know who to remarket to?
RYAN:
For simplicity purposes right now let's just focus on the Google re-marketing platform. Most companies are at least familiar with it, most people probably understand conceptually what the Google re-marketing is inside the Google Ads platform. All re-marketing is dependent on the data you're putting into these lists that you're re-marketing to.
If you've got really crappy lists, you're probably going to get crappy re-marketing results.
Step one is understand how you are breaking up your data. I would say as a general rule, more granular is better because you can combine those audiences into bigger groups. If you have really granular data sets within your lists in audiences, wonderful, use those, make sure that are in there. You can always make bigger groups but if you don't have the small granular groups you can't get to them. At least set them up there whether you use them or not, at least get them in there.
By granular groups I'm talking about you should have a list for shopping cart abandoners. When I say list, it's an audience within Google ads. Let's have one for shopping cart abandoners, let's have one for product viewers, people that have viewed a product page. Let's have one for people that viewed a category page and people that only view the homepage, what's on the homepage and left.
Site depth would be a good way of looking at that, the deeper they go on the site, the more likely they are to convert through remarketing and the messaging is probably different. What we see when we do this, when we add these in, and we add the audiences in for not only display ad re-marketing, which is an important piece to follow people around appropriately, we'll talk about some of the details on what's appropriate and what isn't later, but also re-marketing lists for search ads.
If people go back and there's a heavily researched product that, "Hey, I found this one, it looks like it's good, then let me go back to Google and do a couple more searches to make sure that I'm not leaving a lot on the table as far as options or price point," you can bid on those people differently based on where they went on your site now. What we see, generally speaking, you're going to have a higher return on re-marketing the further down into the site they went. For example, people that were a shopping cart abandoner that you're re-marketing to are probably going to have a higher return to re-marketing than the person that went just to the homepage and bounced, fits the logic generally too.
JON:
These are all intent signals, you're looking for high intent?
RYAN:
Yes, to a degree. If somebody comes through a shopping ad they're obviously going to land on a product page. That same searcher could also land through a text ad on a category page. The search is exactly the same, I'm looking for a purple widget. If I click a text ad, I should land on a category page for purple widgets but I could also have clicked a shopping ad and landed on a product page.
Same search, same intent that we saw on Google went to different spots on the site, but if I landed them on a category page and then they went and clicked on a product page we're probably getting the same level of intent on a purchaser as word there. If I clicked on the product image with a price point off of Google to your site, probably likely that they're looking to purchase one rather than I'm clicking on a text ad because I'm going to go to a category and do some more research. Then if I bounce re-marketing maybe a little bit different than someone that took an extra step.
JON:
That covers what you should be looking at to form that audience as you call it. It's not a list because you don't know who's part of that audience specifically, you can't get the individuals. Google masks that and tells you generally how many people are in that audience, is that correct?
RYAN:
Yes. Then each audience will tell you how many people you can re-market to on the display network and YouTube versus on a remarketing list for search ad. Because then you might have a 100,000 people in that audience but maybe only 30,000 of them you can remark it to as a remarketing list for search ads type thing. There's always going to be different numbers around those because of how Google is collecting data and allowed to present information around that as a re-marketing list.
If you have medical devices of some sort or you're treating some medical problems, you may not be able to remarket at all on Google because that could potentially be personally identifiable information. If you share a computer with somebody and you don't want them to know that you may be feeling sick, you may have these symptoms or you may need-- I'm older than my wife so maybe if I need a knee brace, maybe I don't want her to know that I'm getting old and fragile.
[laughter]
RYAN:
Google won't let people remarket it to me cause my wife might see that. That type of thing is a limitation within remarketing based on some products.
JON:
We both know we're getting old and fragile so we'll leave it at that. In terms of the platforms of which you can then take that audience and market to them, I heard you say Search terms, search ads, I heard you say YouTube, obviously display ads. What other mediums can be used for remarketing?
RYAN:
YouTube is a big one that I think most companies overlook, and there's this general opinion or thought around YouTube being complicated or difficult because you have to create a video and there's that barrier to entry there. Creating a remarketing video is really not difficult, it can even be very basic, it doesn't have to involve human or video, it could just be static images with voiceovers or image textovers. There's a lot of things you can do to make a pretty basic video on YouTube that can still be effective but the cost of YouTube is so low that your reach can go so far.
What I tell people about YouTube is you do remarketing true view, which means they have to watch a certain amount of your video to be counted as a view that you actually pay for so they skip it. Everybody's seen those videos on YouTube that you skip before watching the cat video your mom sent you that you have to watch because she's going to bring it up when you're at dinner tonight. If you skip it, they don't pay anything. There's still some forced branding though because you have to watch five seconds but if you watch it, and you can do all kinds of overlays and allow people to click and go right to the site and the product that they were viewing, but if you watch it, it usually costs $0.10 to $0.12 for that view.
The average click on the display network can sometimes be up over $1, $1.50, and so lots of opportunity on Youtube that people don't pay attention to as much. YouTube, email, you can remarket through email. In certain areas, you can remarket on the display network through dynamic ads or static ads that show the product you're looking at, and you can also do a list that allows you to bid differently on them based on their behavior of your website in the past.
JON:
That sounds interesting, it can get really complicated then. Of those, what do you think is the most powerful or has the highest ROAS, return on ad spend.
RYAN:
That is really going to vary, it's my most often response but my least favorite response, is it just depends. Every online company's probably going to have slightly different numbers based on their products, based on their website, and their conversion rates. Generally speaking, I really like the remarketing list for search ads, especially if you have a research product. People are going through the process are going to do a lot of searches before they buy something, finding out if that person is valuable or not to be bidding on again, and so many companies don't look at this.
You can actually take this list of all the people that have visited your site before, and let's just say you sell coffee cups-- I'm staring at one in front of me. You sell coffee cups and this person searched for white coffee cup, came to your site, didn't buy, that's a list I can put in there. If they go back to Google again and they search for gray coffee cup or red coffee cup-- you don't even have to change your bids in there and you can see them because normally you'd be bidding on them again anyway because they're searching for another coffee cup, which you sell.
You can see, "The people that have been to my site that searched this term either perform better or worse than the average person searching for this product off of Google." If it does better, you catch them again in the research process, and they perform better you bid up on them, be more aggressive because the return is higher, you have more you can be spending on them.
If it's worse and once they've been to your site and they leave they're not going to buy on their second visit, then you just save the money, don't bid on them at all. You can actually spend that money on acquiring a new person to the site rather than somebody that's already been there and you know is not going to buy based on the data you see. There's a lot of levers that Google is now giving us as marketers that really can get creepy to a degree, but also really gives us actual leverage to push more return when it's necessary and then pull back when it's not. I think that those search ad remarketing lists can be super powerful.
You can even do your past customers. Google does have an email match, you can upload your past customers into Google and create an audience around them and say, these 100,000 people have bought from me over the past decade. I upload them to Google Match generally, it's about 50%. Let's just say you have 50,000 people in an audience, you can now bid on them differently based on their search. If you sell mattresses, they're going to buy a mattress one time every 10 years on average, even though we're supposed to buy it more often than.
That list of people, if they're going off and you know that they've bought in the past and they're searching again for another product you sell, maybe you can bid more aggressively on them. Because now you sell pillows, for example, and they're searching for a pillow and are like, "I really did like that mattress and they also sell pillows. That's great, I had a great experience on the mattress, now I can buy pillows."
You can bid more aggressively on them even though it's a general search on pillows that maybe you wouldn't spend a lot of money on just by itself, but knowing something about that customer gives you the ability to be more aggressive than your competitors. It's a phenomenal subset of the remarketing world because you have some information about them.
JON:
This sounds like its own specialty. Just running ads is a specialty that you have to know a lot about, but even just going into the remarketing this is way deeper than I would have thought.
RYAN:
Man, we have an omnichannel strategy group now internally at Logical Position and the reason they came about largely is because of all the demands of our clients trying to figure out how to get all of the use out of remarking that they could. They were having so many of these conversations with our clients saying, we need to be doing this, we need to be doing this and the strategists having to work with all of our teams like, "Hey, we just need a department that can do this." So we've scaled internally, we've got a whole group that handles strategy across all of our accounts and a lot of it is around remarketing.
JON:
That's great.
RYAN:
Just the things you can do that are-- again, I say it's creepy [chuckles] but really fantastic as far as the marketing person's concerned on the things you can do with these levers that Google gives you.
JON:
On the flip side of creepy, it could be helpful because you're reminding folks of where they were, what they were doing. In terms of conversions, we see at The Good that you only have a certain amount of time to convert someone on your site and that's a couple of minutes typically if that. If they get distracted they end up onto something else. It's often even just personally I forget what I was looking to do and then I see a remarket and I'm like, "I really needed that." Then I end up going back and completing it. It seems to me, I'm hearing, that there's a ton of data that can be collected to ensure proper remarketing, and you just listed off a ton of them. It gets real intricate pretty fast.
JON:
Folks usually default to thinking about remarketing only on Google, what other kind of tools do you think could be used for remarketing? I know there's other providers out there, there's other toolsets that aren't Google, display ad networks, and things of that sort. Am I right in that thinking?
RYAN:
You are. Google is probably one of the most well-known just because if you're spending money on ads it just becomes very easy to see there's a section for remarking on display ads in Google. Everybody tries to claim that they have the largest display network on the market. When you look at remarketing a lot of it is done on the display network with display ads. As you're reading an article on a new site or something you're going to see images that are ads all over as you're scrolling down.
We've been doing that for a while, most people know about it, most sites, not all, but most sites aren't going to say no to a display network that wants to put some ads on their site. A lot of these ad buys are done behind the scenes on a secondary market that most people don't even-- it's like the matrix, most people don't even know it's there but all of these ad buys are happening in this big secondary market that's an ad desk that all these networks plug into and they all compete in real-time to whose ad's going to be where. It's crazy when you start looking under the hood of the display network world.
From a remarket perspective most companies are aware of Google, not a bad place to start, it covers almost everything. There's a couple of other competitors in the display space of note that we come across most often, it's Criteo and AdRoll. Both of them have some good things and some drawbacks and they have some exclusive sites that may be Google doesn't have access to. By and large, most companies should at least start with Google because it's already there with every context that gives you an idea of how remarketing is going to work for you.
AdRoll and Criteo can do arguably better ads. Google's use of the HTML5 stuff now can make pretty darn good ads if you have a good creative team but from what I've seen, you do go into buckets within Criteo and AdRoll. They say, here's the return you need, this is your bucket. Here's what we're going to do for you. Done. It goes and it just does a lot of work. You don't have a lot of extra leverage to push and pull within their platform. It's kind of a, "We do it for you", scenario and it can be good.
The only thing I caution people to look at when they're at Criteo or AdRoll is generally those companies out of the box are taking full credit for a sale through remarketing for an impression. If I'm scrolling through and reading a website and I happen to see a remarketing ad from a company who I was on, I didn't click on it, I just kept scrolling and finished the article and then later that day I went and bought direct. I just typed the website in, went and bought and finished my transaction, generally, the pixel for AdRoll for Criteo will say, "Hey, Ryan went and bought and we did it. Our impression generated it and we claim 100% credit for that."
Their report will generally say, and most marketing platforms take a lot of credit so you just have to understand how to look and filter that data to get a real number. Because you can see in Google Analytics the click data, "AdRoll and Criteo they had 50 clicks and this much revenue." Not hard but trying to assign a value to that impression becomes complicated and usually requires conversation. All that to say AdRoll, Criteo for the display products out there for remarketing along with Google. Yahoo in the past has done a lot through remarketing but they've shrunk down and they're not as impactful so generally, I would say for display, those three.
Video remarketing generally lives on YouTube, there's not a lot of video re-marketers that compete yet with YouTube and the scope and size of them. Email remarketing has become a bigger and bigger player in the space. Most people that come to your site, you can get an ad in front of them through a display network. Regardless of what you choose, you can probably find a website that they're going to be visiting and you can get an ad on. If they have an ad blocker on you're probably not going to get that cookie, you're not going to be able to remarket to them.
There's been recently over the last couple years, a couple of companies that have come up with the ability to send emails based on the pixels. They have a list of-- I think the latest I heard is somewhere around 300 emails, they have permission to email these people. These people have opted in and said, you can email me and they've been able to combine that with a pixel or a cookie saying, "Hey, they went on your website, they didn't buy. We can filter that against converters. Let's send them an email and say we'll give me 10% off if they want to buy." They email themselves on behalf of one of their partners, which would be you.
It's actually been gaining some good traction and it's another opportunity to get in front of people that you couldn't get in front of before possibly or in a way that they're actually going to pay attention to. It is a little bit promo heavy so you might give a 10% off discount coupon code, but for many of these companies, they're willing to do it for free for a rev share. It's just an add on, "Hey, if we're going to get a 10x with a 10% off, we're going to get a 5x at the end of the day, that's not terrible."
JON:
I'm pretty sure this happened to me the other day because I was on a site, I didn't give them any information and I left. Then I got an email from them about an hour later just like, "Hey, noticed you were on our site and didn't buy, here's a discount if you want to come back." I was like, "How did they get my email?" That's pretty interesting.
RYAN:
If you looked at the bottom in the fine details of that email, you'll probably see that it came from a company you've never heard of on behalf of that company.
JON:
I see.
RYAN:
I think if you haven't tested it and you've got enough traffic, and enough traffic would be you've got 30,000, 40,000, 50,000 visitors a month to start generating a real number through remarketing, I would at least consider it at least testing it. That's my general rule with most marketing test and measure. If it's working do it better or more, if it's not working stop it and then maybe come back and revisit it later once you understand some of the things that may have caused it to not work well.
As we live, especially as Americans in a very busy, complex society, our attention is being drawn all over the place. You and I both have kids, John, we're not sitting down in the evening doing anything without an interruption, we're not alone. Understanding that as our day - as I go between three screens and I've got phone calls and emails and SMS and text messages coming on my phone that's on the other part of my desk, I'm going to get interrupted in the process of purchasing something more than likely.
Remarketing, I believe, is going to have a bigger and bigger place in the overall online marketing scheme over the next few years. We're not going to get less distracted as Americans, I don't think. Understanding the appropriate way to get in front of people in the way they want to be communicated with. Text remarketing is becoming a bigger, bigger thing, especially with millennials that want to be communicated over on their phones almost exclusively. It's fun but complex.
JON:
I was going to ask you SMS like Facebook or Twitter or Instagram, all those are platforms you can do remarketing on too, is it not?
RYAN:
You can. Social remarketing has been a big one. In a lot of companies, I suggest that that's the way they test social marketing. If you've not done ad buys through Facebook and Instagram yet, an easy way to test it and the validity and what return you can get is start by remarketing on them. Again, we'll go by my coffee cup example, if you're selling coffee cups and you're going to remarket them on Facebook, these people have been to your site, they've seen your product, they know who you are, they haven't bought yet.
If you put an ad in front of them on Facebook and Instagram to try to draw them back and that ad does not work at a profitable level or rate that makes sense, the chances of going out and finding a broad swath of customers that have never heard of you before to buy at a rate that makes sense for you is much lower. If remarketing works, that tells me that there could be some potential to draw in or prospect new customers off of social channels through ads. There's always some ways you can do without ads, but at least through ads. It's a good way to test it all and see if that can make sense for your brand.
JON:
Okay. This has been really educational for me, I appreciate that. I'm now wondering what budget should be reserved for remarketing versus driving initial traffic? Is it maybe a percentage that someone should be setting aside of their total budget spend on traffic? What do you typically see there or recommend? I know it varies but is there a general rule of thumb? People should be at least trying a certain percentage of their overall budget towards remarketing?
RYAN:
It's my wonderful it depends answer again, unfortunately, but the bigger and more complex and the more research that is done to make a purchase of your product or service, the more you're probably going to spend on remarketing. You want to be staying top of mind. If you're selling $10 coffee cups, you're probably not going to have a huge portion of your budget on remarketing. There's probably going to be somewhere between 5% and 15%. Again, there's going to be outliers on that. 100% of the time, there's always going to be outliers.
Step one is just start doing it if you're not doing it and then understand that you need to have frequency caps so that you're not blasting somebody and spending $20 remarketing your $10 coffee cup in one day because you won't stop being in front of them. Understand that you're going to test and measure your promotions, sometimes you're going to need promotions to get people back to the site to buy something. Sometimes you won't, it's just timely like, "You forgot that something was in your shopping cart," or, "I was looking at that red shoe."
Also, when you cross apps, bring apps into the space, that's another big one. I tend to be a sneakerhead and so I buy stuff on Nike's app and the remarketing potential within that space for them is even more creepy and awesome. Because they have all the first-party data around what am I doing on their app and on their website and what type of products do they want to prospect me with, "Hey, you've never seen this shoe. You should think about it."
I'm a huge fan of Jordan 4s so anytime there's a new Jordan 4 release coming up they know they need to let me know about that before. Even though I've never seen the product they are remarketing to me with a brand new product because they have that data of what I've purchased in the past, so much opportunity in the space that you probably need to be a little bit uncomfortable with your remarketing budget. I love saying that to people because they're like, "I'm going to dedicate 10% to remarketing." That's good but if you see it working don't be afraid to go to 20%. Why not? If it's there and you can put money in front of it and you're getting a return that makes sense for your brand there's no reason not to do it.
JON:
It's an awesome way to just attack the people who are already interested. They're obviously already interested so get your ad back in front of them because they were already on your site. That's a great way to attack that marketplace that is there for more conversions getting back to your site, for sure. What's the biggest common mistake you see around remarketing?
RYAN:
Oversimplification. I think we've got the data, we've got all the levers we can push and pull to get the appropriate message in front of the appropriate person at the appropriate time. Often I see just blanket remarketing as the name of their campaign in [unintelligible 00:28:59] one campaign, all visitors in there, they have no frequency cap then it's like, "We spend $1,000 a day on our general marketing and we spend $100 a day on remarketing, done," and they just let it run. They just think that it is what it is, like we randomly get a sale, we don’t…
It is probably necessary to build multiple campaigns for multiple audiences and change the messaging throughout the time to K model. Day one you have one message for them when they didn't buy. When they don't buy. If they don't buy you move them to your three-day remarketing lists with a messaging change or the ad changes, you're staying fresh. If they don't buy then they move to their seven-day remarketing list. You're always moving converters off of these lists as they go down, you can store pixel on somebody's site for 540 days. We have a long term pixel list that we use for friends and family events or discounts online or when they want to run a big promotion. We can get more aggressive with those people that have been to the site in the past when they're searching for a broad non-brand term or something.
Not getting complex enough is one of the biggest issues most companies are having, there's a lot more leverage you can put into your re-marketing starting just with all that data that you're tracking. Having the granular list that allow you to do some of that really cool/ creepy re-marketing to make your company more impactful in this digital marketing, is traffic generation.
JON:
Ryan, this has been a super educational experience for me, I really appreciate you sharing your experience on remarketing and re-engaging your audience. I know this is something that you have that whole I'm Your Channel team you mentioned at Logical Position that handle this. People wanting to get a hold of you, ask you any additional questions, we'll put into the show notes how they can email you directly. It's been an amazing experience, I look forward to our next topic coming up here next week.
RYAN:
Thank you so much, John, I appreciate it. Any time I can get into the weeds on helping clients get more success from all of their marketing in general, I'm in for it. Having such conversations individually, with anybody listening, I'd love to because it's just fun for me.
JON:
All right. Thanks, Ryan. Talk to you soon.
RYAN:
Thank you.
As the coronavirus pandemic is changing the game for businesses around the world, Jon and Ryan offer some timely advice on what you can do to propel your ecommerce business forward instead of just sitting on the sidelines.
TRANSCRIPT RYAN GARROW:
Jon, we are all working from home, because there's a virus running around the country, scaring us but also driving us to be safe and do different things. I'm not at all making light of that, but it is changing the game for every business. If you're a business that hasn't been impacted by this in a positive or negative way, you might be on vacation somewhere not knowing what's going on. As you're talking to companies over the last week or two, what are you hearing? Have you seen anything work, anything that's been terrible? What's the general gauge of customers that you've been speaking to or prospects you've been speaking to when it comes to business right now?
JON MACDONALD:
Good question. I'm hearing two camps, pretty exclusively, and it seems to be clear cut one or the other for e-commerce. The one camp is, "My sales are going better than ever. People are home, they're not shopping on retail at all and we're picking up the slack." A lot of brands that also sell through retail are seeing this because they still have a demand for their goods and they're still shipping. A lot of them are even offering special deals right now to get people to purchase even more.
I see a lot of e-commerce brands I'm talking with that fall into the camp of, "Things are better than ever," and that's great. I'm so glad to hear that. Then there's the other camp that are saying, either, "I'm already out of stock of items, and I don't know when I'm going to get more," because they're having challenges-- In the United States, we're probably, what? Eight weeks behind where China was with this health epidemic.
You look at that and you say, "Okay, eight weeks before the factories got going again." If they're full scale in eight weeks, we don't really know and then, the ports are really backed up and people aren't able to get the goods, even into the country. If they are, they'll be in China right now. We have a lot of issues with supply chain and I'm hearing a handful of folks that are saying, "This is a problem, I need to stop all spending. I'm not going to drive traffic anymore, because, why would I drive traffic? Why would I spend to convert my site if I can't get any product in the hands anyways?"
I'm not suggesting that's right or wrong. I would love to hear your opinion on that aspect, but that's what I'm hearing. It's one of those two camps. What about your side? What are you hearing on these daily conversations?
RYAN:
Because we touch companies that are all e-commerce as well, we've got probably the full gamut of it. We have some small local businesses that only have storefronts and they've-- Obviously, nothing is happening. I can think of escape rooms like for entertainment, those companies stay with small little companies, didn't spend a lot but we helped them do well but nobody's going to go to an escape room for the near future. They have just nothing, no chance to market.
They've got to do some interesting things. We're advising them in different ways. E-commerce, there's a lot of gut reaction we hear, mainly from smaller clients that it's like, "Pull everything back in, don't do anything. We just got to ride this out and huddle and protect what we do have." Then we have other companies of all sizes, saying, "Hey, this is great. Let's step on the gas. Let's go."
Again, there's supply chain issues all over the place. Some of them are pivoting, some of them had backstop because of the previous issues with China production last year with tariffs, so that has some of our clients. They have a bunch of back stock from that even because they were worried about 25% tariff, so they had loaded up before that. We have, like you said, the full gamut. I don't think we go back to where we were three weeks ago. We're going to have a new normal for almost every business in the United States, no matter what your business is. Just lots of change.
JON:
Yes. Talk about that new normal a little bit, then, I'm interested. What do you think won't change? What do you think will stay the same, and what do you think will change?
RYAN:
What's not going to change is people are going to buy stuff online. People have already been buying online, they're going to continue buying online and so that doesn't necessarily change. What you're buying right now, I mean, if somebody had an online toilet paper retailer, they are probably in great shape right now. That's probably the ones that are like, "This is great, this is the best thing that's ever happened."
I think we're going to have a reaction to that and people that sell petits are probably going to be doing wonderfully well because people are going to be sick of buying toilet paper. I think there's going to be a shift in retail, obviously. I don't know if-- I knew retail was going down and you've probably known this as well, like, it's not been a secret. Somebody told me today, I haven't actually found the article, but JCPenney may have like Forever closed all stores and gone online totally. Probably it was a good decision anyway.
JON:
They were headed that direction before, right?
RYAN:
Yes, so it accelerated that. What I see with a lot of these things that happen-- I mean, this is a very rare occurrence. I did a lot of research and I was preparing for talks around what do you do in a down economy, and you look back at the depression, and you can see how you can spend through that and you can do depressions-- Companies that advertise through recessions, depressions do better.
There's a bunch of studies around that, it's no secret but when you have a cliff that we fall off of, it's not necessarily economic related. You do have to look at it from different lens and the easiest, closest thing I saw was 1918, when it was the Spanish flu, the first H1N1 and it was after World War 1 and the US was already in a recession to a degree and so this exacerbated it, but it was also, we had people that couldn't find work already and then people couldn't move. It was a very similar scenario, kind of a lockdown.
They also didn't have e-commerce, they had local stores. That was basically all you could do. Retail obviously came back from there, but very unique times, but I think what it does is that when things like this happen, it shines a magnifying glass on things that were going really well and things that were going really bad. If you had a store that was already not doing well, it's really not doing well now, unless you randomly got some of the products that people need right now.
JON:
Right. I'm hearing that same thing that the best way to think about this is that your company needs to be able to survive this initial shock. I keep hearing the biggest similarities economically are 9/11. You get through that initial big shock and then we'll get into the recession, and then we can deal with the financial impacts. If you had a business that was having challenges already, you're not going to survive that shock because all it takes is one shock to a weakened system if you will, and your business is going to suffer the ultimate consequence because of that.
If you were able to get through that shock, then you can probably pick up the pieces and we should see-- I'm not an economist, I'm just telling you what I keep hearing is optimism about this coming back up quickly. That, "Yes, we're going to hit a recession for a minute, but then we'll work our way back up pretty quickly." I think the long term effects are going to be more of an issue because of all the bailouts and money we're pumping in, we got to pay that back somehow as a United States economy, but we'll get there.
The reality I think is if you are already running a business that couldn't survive the initial shock, then you had other issues as well, and if you run a decent business that had some cash that could weather the storm a little bit, then you're likely going to be better off coming out of this because maybe you'll run a little leaner, maybe you'll make sure that you're spending more effectively. I think that for you and I in terms of E-competence is what we're going to see on a regular basis is more emphasis on return on ad spend, coming out of this.
I think there's going to be more emphasis on conversions for sure. I'm hearing that already from our customers and our clients. We did some research reports and interviewed everybody and the data was very eye-opening, and where people are going to cut and how they're going to cut. Are you seeing the same things?
RYAN:
Yes. Every company is a time to step back and analyze what's going on. I think what companies have to protect themselves against is making a really quick decision, just like, "Oh my gosh, we got to pull back and stop everything and then figure it out." It's like, "Let's stay calm, even if everything goes down." Let's hypothetically say the economy drops 20%, that's a big drop, but that still means that we have 80% still going. That's not a terrible thing.
It's painful, bad things are going to happen. There's going to be people out of work. If 3 million people lose their job. I, it's 3 million people that can't buy your stuff but it also means there's still 97 million people probably working. It's not the end of the world. For some businesses, it will be, but I think it's-- Step one, remain calm and understand where we're at and that it's not a death sentence for every business out there.
JON:
I pulled up the data from our survey we did of e-commerce store owners. We ran the survey for about a week, last week, and I feel like it's already been a month since then, just in terms of how quickly things are moving. At that point as of the end of last week, we asked the question, "Have your e-commerce sales been negatively impacted by the recent health and economic events?" 52.2% said no.
Again, it's been pretty split down the middle there, right? 52% are saying that they have not been negatively impacted. I know you sent out a bunch of great data as well, from what you're seeing from January to February, February, mid February and then end of March. Any thoughts on that data? You said January 1 through February 17th, that shopping impressions were up by 17% year over year, and revenue was up almost 14% year over year.
RYAN:
We saw really normal data. E-commerce has been steadily growing at that rate for years. For us, it's like, all systems go, everything's normal. I think we've got somewhere around 3,200 to 3,300 e-com clients. Then for some reason, I don't know why, I pulled some big snapshots of large segments of our e-comm data. Something happened on February 18th, couldn't find a news article or a reason. The first death in the Us-- this is US data by the way, first death in the US wasn't until February 23rd so in my head, there was something building up, some reason that people are starting to shop more.
Impressions jumped to 37.4%, I think, year over year from the February 18th to 28th. I eliminated the 29th because of the leap year but that significant bump for no reason. External, there's no holiday involved and this is your year data too. Then we went into March and we looked at March 1st to the 9th, year over year and it got a little less crazy but it was still up 27% year over year. We didn't have a big move of Easter this year. I mean, there was no data other than people are online to buy things or search for things at a much higher rate.
I didn't bring conversion data into those yet because latent conversions are important in a few of our clients that we just couldn't calculate that yet, but people are online. Even take my family, for example, we've been buying our groceries online for store pickup and delivery for, I don't know, a couple of years. Now, we have four small kids, nobody wants to take four kids under six to the store to buy groceries and out of everything. You can't get meat at Fred Meyer, for example, here in Portland.
We had to check Walmart, can't get meat there. Costco, you could probably get meat but you're going to wait in line for an hour to get in. You're going to wait in line an hour to get stuff. They don't do pick up or delivery. Found Whole Foods, so we did a lot of searches actually just to find certain things we needed. That could be a part of it. Just continuing to search at a local level for certain things. Again, if you're being appropriate with your budgets and search, then you can capture a lot of these people that are trying to find various things. If you have it, people want to buy and they're not going to stores.
JON:
I think you made a good point there. I think there's goods that you need to purchase locally. You're not going to get online like meat, but even then, it's interesting. I mean, there's a lot of frozen meat companies out there that will ship you-- Omaha Steaks, things of that sort.
RYAN:
Exactly. If I could order Omaha Steaks for every meal, I totally would. Unfortunately, I haven't made enough money for that to be the case yet, but someday Omaha, you're shipping my steaks on a daily basis. How about that?
JON:
Love it. It's interesting because I'm also hearing, despite all of that, one of the questions we asked was, "Do you anticipate seeing your e-commerce sales grow as people take health precautions by not shopping in retail?" Again, 52% said yes. It aligns with those who feel their sales have not been impacted. They're also hopeful that they're going to do more of the capturing that retail group that is not buying at retail. I think that's really interesting that we'll see some hit from the e-commerce world, but it probably won't be as bad as retail.
RYAN:
I sure hope not. We do a lot in e-commerce together, so it'd be bad for us. I look at this, I'm an optimist. I'm an eternal optimist. I always think I'm going to win. I always think things are going to be great. I fail, of course. That's the way I look at it. I get excited because I see economic downturns as opportunities. The last time we had a big downturn, 2006, 2007, 2008 I wasn't prepared. I didn't have businesses in the places that I do now, so I couldn't capitalize when things got bad, they were house deals all over the place.
If you had cash in 2008, 2009 you have a fleet of rentals at this point that probably tripled in value because you had that and you were prepared. I see this, I'm like, "Oh my gosh, this is exciting. I am prepared. I have the ability to move in and get aggressive where it's appropriate." Businesses, you might be able to buy competitors for pennies on the dollars very soon if they weren't prepared.
If you're an e-com store for example, and you don't have the overhead of a retail and some of your competitors have expensive retail spaces, they have to support and still pay rent, or they have employees that maybe aren't being utilized in an e-commerce scenario, they're going to be struggling and it creates significant opportunities. For me, I'm excited because I think there's so much to do and this is where companies that really want to win will be able to distance themselves if they take appropriate actions.
JON:
I think that's a great point of taking the optimistic view of this of, "Well, how can you help someone out by perhaps bailing them out a little bit, buying their company and helping them turn that around and everybody win from that?" I think we're going to see a lot of that coming down the line just from an economic standpoint. You mentioned there's going to be deals to be had and if you're an e-commerce company in a position to be able to invest and take advantage of those, you're going to be doing I think very well coming out of this.
JON:
Well, we asked a question as well around what is the response these brands are going to take. "I predict my brand will respond to these health and economic concerns by," and reducing marketing spend was 61% of the response and I thought that was interesting because that's not taking advantage of this opportunity. I mean ad-words and stuff, are going to get a lot cheaper because people aren't bidding.
RYAN:
I feel bad for companies that their default reaction to the tough times is to pull back marketing, especially when we're in e-commerce. For example, my brand. I separate my accounts so I have brand terms and non-brand terms. You've heard me say this constantly. I probably preach it every event you're at with me. Non-brand, that's a free agent. If somebody is searching for your product but not you, they have intent to buy based on the search, they're choosing you or a competitor.
There is no scenario for a business that I am involved with in an ownership and I have some say where we are not spending down to break even to buy that customer, no scenario. I want that customer and I want them more than my competitors do. It's going to become mine so I am turning up marketing. In fact, I hired people last week in the middle of this to increase production like we are going in and we're going in aggressively.
Hey, it might not well be able to win as much as I want or could, but there's no scenario. I'm actually taking it. I'm going all in and if I fall a little bit short, oh well, at least I've made some gains and I got some clients that maybe I wouldn't have been able to get even as recently as two weeks ago because my competitors hadn't pulled back their marketing yet.
JON:
I think that's interesting because in that same response, 8.7% said they're going to spend more on marketing. I think that's 8.7% that's going to win. I look at that and I'm like, "If you're in that minority of 9% let's just say, you have a big opportunity where you're just going to be able to take over your competition and if you keep marketing through this, there's a very high likelihood that you'll have more revenue. You're going to have more resources when you come out of this, frankly, be able to overtake your competition and just in overall spend, because they're going to be limping along through this.
They're hurting themselves or their sales not being able to be propelled by this marketing. When they come out of this, it's just not going to be as pretty for them as it would be for somebody who tries to maintain their marketing as much as they can." That's been a big message to my team here too. It's like, "Let's continue to keep marketing." Now, it needs to be done tactfully. Let's not get mixed up in the COVID-19, "Here's how we're continuing to serve our customers," emails. That's not helpful.
RYAN:
Oh my God. That's like popups to me for you. It's like, really? Thank you 500 people that I've ever bought something from in the last 10 years emailing me. Kudos.
JON:
That's exactly the problem. Most people aren't going to be upset about those emails, but they're certainly not going to read them. It's not a good opportunity.
RYAN:
My password keeper sent me an e-mail, the one on my iPhone that stores all my passwords that I pay for once a year, sent me an e-mail. I was like, "Do I care if your developers are working from home or working from the office?"
JON:
As long as I can get to my passwords.
RYAN:
I don't care. Why would you waste the, I even cost you something to send it like human capital, fractions of pennies for emails. Like, Oh my gosh.
JON:
There's that for sure. The way to get through this in terms of the marketing is to acknowledge it's a problem and just say, "Hey, you know what? We know that this is going on. Don't ignore it, and certainly don't take advantage of it and try to say 'Oh, we're running a shop from home sale because everybody's stuck at home right now."' That's not going to go over very well.
RYAN:
No. I was talking to one of our clients that sells, it's a beauty skincare cream. They focus on organic and teens or preteens. It's something like that. They're like, "Okay, what do we do with COVID-19?" I'm like, "What do you mean? You sell skin-- You're not going to talk about that. That's terrible." They're like, "Well, people can't go out for Easter."
I was like, "Well, yes, they can't." "What about getting Easter baskets? You're going to buy your daughter some makeup for," I was like, "That's great. Maybe you can do an Easter sale and push your heart on social and get some--" Influencers may be involved, but you don't want to necessarily say, "Hey, you can't go out on Easter. You still want to dress up." I mean, that's just rubbing into somebody's face because there's going to be a lot of disappointment.
Every Easter we do a big event at my barn with my whole family, because I have a large one and we do a beer tasting. We work our way through the Easter letters. The beer had to start with E one year, then A, we're around S which was a great one because there's a lot of great beers that start with S or they have to have like Jesus in them. There's some bad beers with Jesus. I'm just telling you that right now. [crosstalk]
JON:
I can't imagine it's good beer.
RYAN:
But we're doing it virtually, we're doing a virtual tasting.
JON:
Talk about taking advantage of a situation, naming your beer off of religious figures.
RYAN:
Oh man, there's-- I won't mention a brewery but there's a pecan Jesus beer that it is not very good.
JON:
Pecan beer sounds horrible to me.
RYAN:
Everything about it was like, "That is not a good sounding beer."
JON:
I'm much more of a wine person, unfortunately.
RYAN:
Well, we could do wine tasting too, but it's changing. Don't push it on people.There's two things I'm telling a lot of companies [unintelligible 00:21:30] is number one, assume everybody knows I'm going to tell them to keep marketing. Outside of that, you have to be creative but move. If you don't do anything, you're never going to start moving. Understand that you're going to make some mistakes and you're going to go out there.
Maybe you accidentally mentioned the COVID or coronavirus when you maybe shouldn't have, but at least you're out there testing something and you realize, "Oh, that wasn't great." Get out there and do something to expand your brand. You have to think outside the box. This is unprecedented. None of us have been through a giant downturn related to a virus. If you find somebody that's been through this, I'd love to know what country they were in when this exactly happened.
They had e-commerce versus Amazon not being able to send anything but toilet paper. Getting out of, it's going to take some testing. I say also talk to an expert, whether that's Jon, whether that's me, somebody else. Talk to somebody that understands something about what you're trying to accomplish and run some ideas by him and then say, "Hey, I'm thinking of doing this. Is there a reason that you would say bad idea or yes, it's worth a try. Let's measure it." Pull back quickly if it's not working.
JON:
I mean one of the benefits of a slowdown right now for e-com brands is that there are experts like you and I who were a little bit slower perhaps than what you would typically see and we're giving our time back and saying, "Hey, I'm happy to chat with you. I'm happy to help as much as I can, answer questions, let's do these things." We're stuck at home. We have an extra hour a day because we're not commuting.
We have extra time on our hands as a whole, as a community that I think is really interesting. It's really, really fun to see how you can use that goodwill in a way that-- I'm answering questions. I sent an e-mail out last week instead of an article which we've sent out for seven years in a row over seven years now. We send one every Tuesday and last week I was just like, "Team, it doesn't seem right to send an e-mail out this week with an article that's quite frankly a topic we had booked three months out. On our content calendar. It's not really relevant to what's going on. I don't feel we should send that out this week."
They were like, "Well, we don't want to just send no e-mail. Let's send, 'hope everybody's doing well."' I was like, "No, no, no, that's not going to go well. Nobody wants to hear that." Instead what we decided was let's send an e-mail that's basically being helpful. We really wanted to just be as helpful as we could for these e-com brands and be in it with them. The whole goal was,"Okay, we have all this content, seven, eight, nine years of content that we've have up on our site that we've written. It's super helpful."
I just said, "Hey, if you're having a challenge, you want some expert advice on it, reply to this e-mail and we'll look at our back catalog of content and send you the article that's specific to your need along with some context and a little bit of help on that." The amount of responses I got is overwhelming. We sent it on Tuesday, we're recording this on a Thursday afternoon. I still have dozens of emails in my inbox that I need to get through.
The benefit of that is not just that we get to help the community, but also that now I'm basically writing content because I'm answering these people and saying, "Here's the old content, but here's all the stuff I would update on this right now and here's how I would be thinking about it." Then I sent that e-mail to our marketing team and they're taking that and they're updating the content on the site, or they're writing new content based off of what I'm suggesting.
We're able to produce a lot of great content with this extra time that we have on our hands because everybody's working from home, not commuting. We do have some clients who are like, "Hey, talk to me in two weeks when things calm down." They're not dropping but they're saying, "Hey, I just need some time right now," which is understandable. I think that it's really interesting to see how we can all band together and help each other out and really use this to generate some great content that will be everlasting out there. I think the knowledge base, the communal knowledge base is just going to grow so much.
RYAN:
I think it's going out with the idea people want to give help, they want to be helpful, but they also are going to be looking for help. I think it opens up a lot of doors to maybe a partnership that you wouldn't have even been able to approach or do anything with before. One of my companies is a brand that sells to retail as well as online and my retailers are closed. They're struggling. They still have expensive rent to pay in certain areas, and so I'm like, "Okay, well, you don't sell online. I do. I know how to do it. Let's get some of your stuff online, how can I help you move product?"
They're going to sell more of my product probably with some of these things as well but it's like, "Hey, you're being forced as a local business to start selling online now, let me help you compete with some of those big retailers," because a lot of times it surprises me. We have some rather large advertisers and some of them came in and said, "Yes, right now we're going to cut budgets 50%," and there's no data around that.
We didn't have anything to say around it. They just dictated that. We're going to go back and talk to them through some of the logic, but that was an e-mail we got yesterday and I was like, "That makes no sense." If you have one of the largest advertisers in a category that's going to pull back 50% of their digital spend, small guys have a huge opportunity to fill that void because people are still buying these things. The volume is still there.
JON:
That's so true. That goes back to just that small 9% in that survey that said they're going to invest more or continue the same. I think those are the folks who are going to come out winning. If nothing else, their brand is going to get in front of new people that they wouldn't have been able to afford to get in front of before. There is some bright spot here for sure.
RYAN:
I'm excited but it's also, I guess I get nervous, but it's almost like an excited nervous. We don't know what's going to happen. I'm pretty confident with our team's skill set and what we're going to be able to do and your team skill set, we're going to come out of this fine. Hopefully, most of our clients do and we're able to help that but if some of their competitors of our clients don't make it.
JON:
Maybe they should have talked to us first.
[laughter]
JON:
I think there's a bit of a Machiavellian message here. I don't want to say take advantage of the situation but definitely think twice about how you can utilize this in a way that is going to help your company instead of hurt it. If you start thinking with that mindset, I'm not suggesting even a growth mindset, I'm just saying every company is going to have down revenue this year. If you are just thinking about how do I maintain, then when things pick back up, you're going to really pick back up much quicker.
If you say, "Hey, you know what? I know we're going to have a 20% drop, I'm just going to cut everything." Like you mentioned with that one customer, that's just the wrong mindset. I understand. Of course, that sounds, coming from you and I, of course, we should be saying keep spending on marketing because that's our business. I cannot stress the data that's behind this and the reality of this. I know I've seen you do presentations on just how car companies back in the depression came out of this and how Ford really blew up coming out of that because of the actions they took versus what is it, GM at the time?
RYAN:
Chrysler.
JON:
Chrysler.
RYAN:
That was crazy.
JON:
I think the same situation can apply here. People who keep moving forward, keep marketing are going to grow like Ford versus Chrysler did back then. Different time maybe different industries, but I think the same tenants apply.
RYAN:
Yes, I probably would agree. If you Google recession studies, and I think I've referenced one from the '70s and then one from the early '80s they were recessions. They did some studies around companies that advertised in, during and after a recession and compared their growth to companies that cut marketing and every time companies that advertise and marketed through the recession, despite what maybe they felt like doing grew and their marketing wasn't even as traceable as our last-click attribution type tracking that we have online.
We have unprecedented tracking online that if you have profitable or even break-even marketing, I don't care what the economy is doing, there's no reason not to spend that money. I mean it's just, it's layups.
JON:
Well, Ryan, this has been a lot of fun to connect about this today. Hopefully, there's been some value here for listeners, some things they should be thinking about. If nothing else, hopefully, they decide that they can be the Ford of the world versus the Chrysler coming out of this in a way that is really going to help propel their business forward versus sitting on the sidelines.
RYAN:
Yes. Hopefully. If anybody wants to reach out to either one of us, please do. This is fun for us to talk through and help companies and advise them. It's what we live for.
JON:
Yes.
RYAN:
And we've got extra time with no commute.
JON:
There you go. I'm happy to help. I've been putting this on LinkedIn. Anytime I see any of our partners or any offers out there, I repost them on LinkedIn. It's like, ''Hey, guys, look, e-commerce community is banding together.'' I don't know if you saw, Privy just came out with today ShopSmallEcomm.com.
RYAN:
I did see that, yes.
JON:
Ecomm with two m's at the end. It's just amazing. They're really trying to just help all of these e-com businesses to get listed in this directory and they're doing this effort for free. Yes, it's a marketing thing for Privy, nobody's hiding that. The reality is that it's helpful and it can't hurt to list your site on there. Right, so why not?
RYAN:
No, not at all. I already sent it out to my wife's businesses. I've sent it to all our directors and VPs like, ''Hey, there is no reason not to support a partner, number one, because we want to do that.''
JON:
I'm hearing things like Brex does credit cards for e-com. They usually offer net 60 terms with no fees and they're extending those terms out to 90-120 days with no fees, no interest. Things like that are like, ''Hey, can you see three months in the future right now. If you are sure your business is going to be around in three months, why not do this and give yourself that runway, and perhaps be able to pay some employees in this time. Otherwise, you wouldn't be able to and keep advertising and take advantage of this opportunity."
There are ways out there. I know there's Clearbanc that does funding, as well B-A-N-C, Clearbanc with a C. There's a ton of these type of things out there that are offering a lot right now. They understand that your balance sheet looks low, there understand what we've all been going through and they're willing to work with that. If you can show that going into this, you were doing okay, they're confident you're going to do okay when you come out of it, and they want to help you see that through.
There's a lot of stuff out there right now, Ryan and everybody's got a little extra time to contribute. Everybody's kind of banding together, it's been amazing to see the e-com community. I just recommend that as many as e-com brands can take advantage of these opportunities that are in front of them and the help that has been extended, will really see it through. As you mentioned, we're both happy to help on paid search and how to keep marking on that front. Also on conversion to make sure that once you get those people there, that those dollars go as far as possible so definitely reach out. Any last thoughts on your side, Ryan?
RYAN:
I think the last webinar was probably just when in doubt, go. Just do it. See what happens. Again, that's kind of just get in motion. I think you can't fail if you're moving somewhere. You'll figure it out.
JON:
I'd rather go down swinging, right?
RYAN:
Heck, yes.
JON:
That's it. All right, Ryan. Thank you. This has been fun chat today, considering the sad circumstances and topic, but I think we're going to pull through this.
RYAN:
I agree.
JON:
I'm very excited to be able to help everybody. Thanks, Ryan.
RYAN:
Thank you.
Jon outlines what businesses should be paying attention to as they begin the CRO process, in order to make sure your commerce website's revenue continues to grow over time.
TRANSCRIPT RYAN GARROW:
Jon, usually my goals are around revenue, new clients, employees, you name it, but as a sub-point of some of my goals I find myself penciling in a line that's usually says something around improve website. Usually, when I'm penciling that in, in my head, I'm not articulating it correctly, but in my head, I want to increase the conversions with the traffic I already have, because I've already got some traffic going to these sites. I just want to get more out of it, how to squeeze this lemon a little harder and get more juice out of it, but given the dynamic nature of conversion rates based on traffic type seasonality, I've struggled with even figuring out how am I supposed to be setting a goal around my conversion rates other than just better. I want it to be better.
It's never going to be good enough, everything make me happy that we've got this conversion rate, I just need to be better. As an expert in this field and probably the smartest person I've ever come across in the conversion rate space, [chuckles] should I even be setting goals around conversion rates, or should it be like am I going about it in the wrong way?
JON MACDONALD:
First of all, Ryan, I appreciate this topic. I think it is timely and it is something that a lot of people I talk to on a daily basis struggle with. The reality is, what gets measured gets improved. There should be some goals here, and you do need some data to make data back decisions about how to improve your site. With that in mind, I think it's only helpful to really be thinking about goals, but around conversion optimization improvement there. Yes, there's tons of goals you should be thinking about, but just better is probably not going to get it done because where do you start from that?
RYAN:
[chuckles] Good point. I always keep putting it on there, and I don't actually have anything around it. [laughter] Probably not the way I should be going about this.
JON:
One of the things to be thinking about here is that you really want to break that down a little more. I would think about it in terms of are you looking to increase average order value? Are you looking to increase the amount of people getting to a particular point in the site? A conversion rate, let's just start there. Overall, most people think it's just converting the amount of visitors into buyers, and overall, yes, that's true, but there's so much more underneath that.
Think about, do you want to get people from a landing page to the next step in the funnel, and then from there to a product page and then adding to cart? Then once they're in cart to actually completing that process, and then what even happens after that? How do you get them to come back in order again? You really want to be thinking about all of the different steps that go into this and then just look at improving each of those steps. That is what is going to bring you sustainable growth and conversions as opposed to just saying, okay, I really need to just get more people to buy. We all want that, but unless you're improving every single step of the process that our consumers going through on your site, you're not going to see much of a sustainable growth there.
RYAN:
Got it. There's a lot in that statement from you. As an econ business owner myself, my goal is, click-buy. My thoughts around conversion rate is, all right, well, if I change my button from pink to blue, and test that A/B, one of those colors is going to cause people to buy more, but you're saying, yes, you could probably do that, but it's probably not a great good idea. You should probably start thinking about how people are getting down to that product page or getting into the shopping cart experience. Try to not lose people on the way and that would probably be and you can fix my verbiage, maybe there's a better way to starting your conversion optimization process, rather than just looking at the Add to Cart button.
JON:
Right. I think you brought up something that you've heard me rail on 100 times probably. Maybe that why it's in your mind.
RYAN:
Yes, just maybe. [laughs]
JON:
Is the button color issue. Here's the thing, changing a button color are very unlikely to do much for your site, but if you go online, and you Google conversion rate optimization, one of the first things that comes up is a case study around a brand that somebody wrote this article. It's been handful of years, now it's been out there and it's a running joke with our team, but a brand said they changed the button color on their website and got like $5 million in additional revenue because of that. I call bullshit, first of all.
RYAN:
Wow, I'll do that. [laughs]
JON:
Exactly. Second of all, it's really setting a bad precedent for conversion optimization because it's really not about button colors. You go online, the second thing you're going to find is checklists all over the place of things that you should just do to your site. Here's a bunch of checklists. The problem is, they're not based on data from your specific site visitors.
Now, are there best practices, of course, but do they apply to you? The only way to know that is to truly understand your site visitors. That means collecting data. All of this, I've said already, data back decision making is what's imperative here. If you don't have the right data, you don't have good baselines for where you're at today, how do you even know if what you're doing is working? That's where you have to track every click and movement that people are taking on your site. What's that mean? Well, get Google Analytics, but Google Analytics out of the box, it's meant to help people like you Ryan, some more ads.
RYAN:
[chuckles] It's good for that.
JON:
It's all about driving traffic. It's great for that, but most people, unfortunately, try to use Google analytics as a viewpoint for how to improve their website, but out of the box, it's horrible at that. Doesn't mean it's not good for it, you just have to take a different view of the data and do a little bit of extra work. What does that mean? Well, really quickly, you could just go in if you're an e-commerce site and make sure you have e-commerce tracking turned on. There's so many sites, even some large ones doing tens of millions a year that don't have that box checked, and it's an easy win.
RYAN:
Blows me away.
JON:
Yes. I'm sure you see that all the time too.
RYAN:
I do it, just I don't get it.
JON:
It's all because again, only the marketing team that's driving traffic has really used GA when the e-commerce manager who is actually trying to get more sales out of the site really needs to be paying attention to this data too.
The second thing is, get those heat maps, click maps, scroll maps, understand how people are engaging with each page of your site. You can get all of that data through a handful of tools. The one we love the best here at the Good is called Hot Jar, H-O-T J-A-R. It's a really great tool and helps you have a good understanding of how people are engaging with your site. Now, all of that data can then tell you what people are doing, but you also need to understand what they're thinking. That's where things like doing user testing can really come in.
Understanding. What does that mean? We send people to the site, who match an ideal customer profile and we ask them to complete tasks on the site. While they're doing that, we record their screen and their audio. Now we could do a whole episode on user testing, we probably should because if you're real deep on this and the insights are just amazing. Really, the point I'm trying to make here is that you have to understand what people are doing on your site and why they're doing it, and then use that data to help you understand what you should be optimizing on your site. Then you can set some goals.
At that point only should you be setting goals. You can clearly say, "Well, I'm having a huge problem where people can't find the right product that's a good fit for them. That means that I need to help them filter a little better, or change the content on my site or the navigation." There's a lot of different things to be looking out there already that you could set goals around. Maybe I want to increase engagement with my navigation by 20% because you know that's an issue. Look for the places that people are dropping off in your conversion funnel, and then set goals around that. That's going to be way more effective than just saying I want to increase my overall conversion rate.
RYAN:
Obviously, if you're an e-commerce site, your goal is to get more revenue to the site. You're saying, if I'm understanding correctly, I'm going to look at who converted and almost use the Google analytics visualization tools to work backwards and say, hey, well, they went here, here, here and then you had drop off here. Maybe that drop off where I'll make it up. I lost 70% of my traffic going through the funnel, maybe I go to that page or that area of the site and say, all right, how do I keep people flowing through the process to the next step in that overall conversion?
JON:
Exactly.
RYAN:
Got it. For most businesses that you've seen going through that process, is there a specific part of the site you say most e-commerce companies are overlooking the importance of that part of the site and the flow down the funnel to buying?
JON:
Well, I think everyone puts an emphasis on their homepage. It's the entry point for the vast majority of traffic, so it's a great place to start. I think though that you should really be focusing on what people do next. What's that second step they take from there? That's truly going to be where the decision is made or broken, and here's why. On the homepage, you're going to have a lot of people just bounce off the homepage that right away they weren't a good fit or they clicked on an ad by accident, whatever. If the highest bounce rate is going to be your homepage, almost always, but secondly, once they get to that next step, that means they're actually interested. At that point, you know in your funnel, those are the people that you need to start paying attention to. Now, I'm not suggesting ignoring your homepage. It's important. Trust me, Ryan, you've seen me do teardowns of websites hundreds of times probably now, and you know how many times I can rail on a homepage.
RYAN:
Yep.
JON:
I will tell you, there's a ton of optimization that's it's almost more meaningful for actually converting somebody at that second stage because people who get to that second step are actually interested in your product or service.
RYAN:
I would say it's almost more than likely a category page after that homepage leads in the e-commerce realm. You'd probably get to a product page from the homepage.
JON:
I would hope not because, at that point, you really are helping these people do one of two things on your site. They're trying to decide if your product or service can help solve their pain or their need. If they get past your homepage, they think that there's a chance you can help solve that pain or need that they have. Then so they're on a category page now. Now, you need to help them to understand which of those products is going to help them solve that pain or need.
RYAN:
Interesting, because one of the things I talk about in driving traffic, when I'm separating out like text ads versus shopping ads, almost across the board you would prefer searchers coming to your site off a text ad than a shopping app because it can land on a category page, which most of the time will convert better than a product page. I get horrible generalization across e-commerce sites, but even then, being able to focus on that category page could reap phenomenal rewards in the paid search realm in making that traffic channel much more effective and you can scale it quicker if they're converting or getting through that process quicker at least going into the next step.
JON:
Right. I've heard Ryan that when you send people to shopping to an individual product, I think I've heard this from you, the vast majority of people don't actually purchase that product, they buy something else, so why not send them to that category page?
RYAN:
Yes. If you use shopping traffic to get to the site, which I assume most e-commerce companies have done it at some point, when they land on that product page, you want them to find a category page as quick as possible. Breadcrumbs or other things, because really that's when the shopping of your site starts. A lot of product pages get bounced off of from shopping traffic because they couldn't get to a category page and find the product that they were actually looking for. If I'm taking something away from you, at least in this section, it's let's focus on some category pages. If you can, in the e-commerce space, leave the homepage, maybe for the second step as you're looking at conversion rate optimization.
If they're not utilizing a conversion rate optimization agency like yours, which they probably all should, what are some of the things they need to be aware of now that they've got hot jar on their site, and they're able to watch people on the page and you can really, I mean, you can get lost in watching people click on your site? It's fascinating as you're in there. You can look up and all of a sudden, an hour's past and you've been watching people just click around on your site. Other than giving us a checklist, how should they be looking at this traffic now that they have some of this data that they've never experienced before?
JON:
Well, I think the first thing to think about here is most people will set these things up, pay attention to it for a week, and then they forget about it. Now, for all of your sites, how often are you looking at Google Analytics?
RYAN:
Probably not often enough because I'm not in the weeds as much. [chuckles] Hopefully, some of the people doing the marketing around there are more, but probably not.
JON:
That's fair. Think about it this way. Most of the people and I surveyed them when we start working with them as a customer, maybe I'm in an initial exploratory conversation, or we just decided to start working with them, the first thing I hear from them is, "I don't know what people are doing on my site." I say, "Well, you already have Hot Jar installed. You're using GA. Well, what's preventing you from understanding this?" They said, "Well, I just don't look at the data." I would say the first step here is just spend 15 minutes a day to set a timer because you can't get lost in it.
I think the problem is most people do, what you just said is they dive in, they spent an hour at it, and then they're like, "Wow, I'm overwhelmed," and they just ignore it from there. Instead just spent 15 minutes and try to take away one small insight a day. That's it. Instead of trying to solve all the world's problems on your site, and right away, just say, okay, I'm only going to focus on watching what people do in my category page. I'm going to spend 15 minutes and try to have a good understanding here of how far down the page they're scrolling, what content they're engaging with, how they got to that page, and where they're leaving to go. Just do those four things and spend a few minutes you will learn a little bit more about your consumers that day.
Then come back the next day and build on top of that knowledge. You will just continue to learn, day over day, a little bit more about your consumers, where they're dropping off and what frustrations they're having. I say this all the time, but it's really hard to read the label from inside the jar. What I mean by that is, if you are the one who designed or developed your navigation or outlined your part of category pages, you know your products so well that you just assume everyone else has that same level of understanding. They don't. Following what other people are doing on your site will really help you have empathy for that consumer on the other side of the screen.
RYAN:
Now, that's fine. I didn't quite write quick enough, but what are the four things you say I should be looking at for 15 minutes on Hot Jar or Analytics?
JON:
Where people came from, so how they got to that page. Where they're going next, so you have an understanding of whether they are clicking into a product or they are doing something else on your site. If they are clicking into a product, what are your top products? That will help you understand where to look next the next day. What they're engaging with on that page. Are they scrolling down and seeing a lot of products where they're dropping off? What content they're engaging with, et cetera?
RYAN:
I'm always worried on my businesses about distracting with additional information. I have one goal of driving traffic to my site, and that is to get products sold. I know some people go to sites to do research and there's a longer sales process. How aggressive should business owners be at creating that simplicity on their site and avoiding the potential distractions on the site, whether that's category or product pages when your whole goal is just to get them to buy something?
JON:
Well, I think you hit the nail on the head on me. Maybe it sounds too obvious, but avoid distractions. The whole point here is that consumers have lives happening while they're on your site. I have a three-year-old at home. I can tell you that I had this experience and I'm choosing a flight because this happened to me last week where I was booking a flight and my son interrupted me. I had found the flight out but I hadn't flung the return flight yet, and it just timed me out. I had to start the entire process over again. It didn't save anything, just took me back to the homepage, refreshed it, took me back to the homepage like I had done nothing.
It didn't say, "Hey, we timed you out, because we couldn't save your seat anymore on that first flight, but here was the search you did, click here to start it again." That would have been such a great experience, but instead, I came back in 15 minutes, and I was just so frustrated, because it's like, oh, it's spent so much time finding that perfect first flight and now I don't remember exactly what it was. I got a look at my calendar and my agenda and start all over again. There's nothing that I hate more than wasting time and I can tell you that your consumers on websites are doing the exact same thing.
RYAN:
Got it. It's almost a rule of thumb and give them enough info to be interested maybe in your product or service, but don't overshare or don't put things in the way of them actually taking that next step and that can be almost a step one as you're looking at sites and trying to clean things up and the conversion rate process.
JON:
Yes. Look, consumers are only looking to do two things on your site, research and understand if you can solve their pain or need. If you can, they want to convert as quickly and easily as possible. Trust me, your goals are aligned on this, not only do you want them to convert quickly and easily, but they do too. Stop making it hard for that to happen.
RYAN:
Okay. As we dive deeper into this, like, what's a reasonable expectation for CRO improvement? Knowing that my end goal is to get more people to buy something, and I'm going back in those steps to move people through the process better, do I still set the end goal? Do I give it like, hey, I want to go from 1% to 2% on my site within the next six months? Is that a goal that makes sense or are you like you got to do it this way and it should be a lot different than that?
JON:
Well, I think the best goal to think about is what is the return on investment from the activities that you're doing to optimize conversion rates? The reason being is, I've worked with sites that if we move that conversion rate even a 10th of a point, it's millions of dollars in revenue. I've worked with sites where I'd have to double that conversion rate to even make it worthwhile to work with us. If you look at it in that way, it's going to be different for everybody.
I don't think anybody would tell you they don't want to double their conversion rate, but the reality is that it's really hard to look at a conversion rate and compare to even your competitors. It's just that does your disservice. It doesn't help you, it distracts you. Instead, really just focus on showing incremental gains month over month, where you're looking for that small gain, and you're saying, I'm getting a small gain on my conversion rate, and that is enough to show a large return on investment from these activities.
Now, how do you track that return on investment? Your goals around that should look at things even including ROAS, Return On Ad Spend. Now you're spending a ton of money to drive traffic, it's valuable, but once they get to your site, if you're not converting them, you're not making that money work as hard as it could be. It doesn't matter how good your ads are and how qualified that traffic is if your site is just tossing that traffic out the window because you made it too complicated for them to convert. There really is a nice synergy between those two areas.
RYAN:
A lot of the goal I'm hearing you say, would depend on how big is my site currently because moving the needle in one month, a 10th of a percent from maybe 1 to 1.1 could mean millions of dollars. That could also mean, you made an extra $15 and maybe that's not enough, and you had to get a larger goal to move the needle because you were spending more than $15 on CRO stuff.
JON:
Yes, and that's fair. Look, I think there's a point at which it makes sense to truly focus on conversion optimization and start working with somebody where it's a budget line item. I like to look at that in terms of traffic volume because typically there's enough traffic where we can start running some tests and get a nice return on that investment through detailed findings off of these tests.
Now, that traffic level's generally around 40,000 visitors a month, which is probably much lower than you would think, but the reality here is anything below 40,000 visitors and it becomes really hard to prove a test out in a timely fashion and show a return on investment there. That doesn't mean you shouldn't be making data back decisions, or even perhaps doing testing, it just means that it's going to take you a lot longer to prove this test out. The best thing you can do at that stage is to have that data, start collecting it, start reviewing it, and then talking to your consumers and making changes based on what you're hearing and seeing them do. Instead of testing them, just go ahead and make those changes.
RYAN:
Do you see a difference at a high level between somebody that is a pure-play retailer and just selling a bunch of other people's products on their site, or a brand and the types of traffic and/or conversion rates, like if I was a shoe retailer versus a Nike or an Adidas?
JON:
For sure. I think that it all is about the context of what somebody is coming to your site to do. It's interesting, Amazon Prime, if you're a Prime customer, you're going to convert at an extremely high rate. I think it's over 70% of your visits are going to buy something on Amazon, because it's the marketplace. You have the widest selection of products possible. You can do all your research on that platform in theory and buy something and do that all fairly quickly that they've done a really great job of that, but if you're a Nike, for instance, people understand, I'm coming to Nike because I want Nike product. I'm not there because I'm trying to compare Nike and Adidas. You've already done that homework, you already have a brand affinity.
If somebody is coming in with a brand affinity, they're going to stay on your site, they're going to purchase, but if somebody is just trying to buy something that is more of a commodity, and I'm not suggesting a shoe can't be a commodity but look, I play basketball, and I have a basketball shoe that I really like and there's different brands that I know fit my foot better. I have a brand affinity for those and I'm going to go use those brands. It doesn't matter how much the other brands are spending on their superstars to promote their shoes. That doesn't really matter to me. What matters to me is okay, was my foot comfortable in those shoes? It's a little bit of a different type of approach. I don't need to go to a marketplace. I need to go to the specific brand I know fits me well and I'm going to go there, see what colors they have, what styles they have and buy that.
RYAN:
Okay, helpful. Is there a time in the business lifecycle outside of traffic? Where does it make sense to start doing some conversion optimization? Like if I just launched a brand, it may not make sense yet to do full-blown, maybe some Hot Jar stuff, but where do you set those different things like okay, do some of your own at this stage, find some help at this stage, and oh, you need full-blown CRO agency at this stage?
JON:
I would say that, again, going back to visitors to your site, you need to have some traffic to your site before it even really matters to do optimization. Get yourself 10,000 visitors a month through driving some traffic, that proves it's not a product problem because no matter what, conversion optimization of your site, it's not going to help if you have a product problem. What does that mean? Well, if nobody wants your product, nobody knows about your product, your product isn't solving an actual pain or need, then it's not going to sell and it doesn't really matter at that point. Prove out your product first and get to about 10,000 visitors a month. That means that there is a need out there that people have found it and that you can successfully drive traffic through either free or paid channels. Earned or paid.
The way that I look at that is between 10,000 and 40,000 visitors per month. You really should just get a list of things to change on your site. I'm not suggesting a checklist. I'm suggesting, go get an assessment from somebody who's an expert in conversion optimization.
RYAN:
Like Jon.
[laughter]
JON:
Yes. I will happily do that, and really go in there and get one or two pieces of data, be it heat maps or et cetera, and make some decisions based on that data, and then just make those changes. Don't test them, just make them because they're probably at that stage where you would see a bump from just doing that.
Now that you've got your return on ad spend high and you're starting to actually convert at a higher level because of those assessment changes, you should start to be comfortable spending more money and seeing a return on that ad spend, setting some goals around traffic and generation and what the revenue should be off of that. At that point, you should be able to get to 40,000 visitors. Now, it starts to make sense to do more of a tailored program where on a monthly basis, you are running multivariate or A/B tests on your site, you're starting to see a return on that, you're continuing to accelerate month over month. At that point, you will see a much bigger gain over time.
RYAN:
Got it. I think one thing that people also need to realize or get their mind around is something that was foreign to me before I started working with you and seeing the results of conversion optimization, but before Jon and I kind of like the pre-J arena of my life, my vision of CRO was like I spend a couple months in the site, get conversion rates up, go make a bunch more money, then maybe revisited a year or two later, get this conversion rates back up again, but that's in reality not at all what your clients are doing. They have line items of commercial optimization and their budget, and they are paying you every month and seeing phenomenal gains consistently.
You've had clients for years upon years. We've shared a few clients for probably three or four years still, and it's still going. Explain that to a lot of people and how they can start reframing and understanding what a regular constant conversion rate optimization program looks like and why they should be considering that type of process for their business?
JON:
Yes. The best way I can describe this as liking it to here in the United States, we have a retirement account called a 401(k). Typically, what happens is your employer takes a few dollars out of your paycheck every month, you decide how much you want to put into it, and then that goes into an account that continues to grow and compounds over time.
Somebody once told me that if I put $10,000 into my 401(k) when I'm 21, that would be like putting $400,000 in when I'm 40 because it just sits there and grows and compounds over time. It's the exact same thing with conversion optimization where if you just make some changes here and there, then come back to it a year later, you're missing out on that compounding effect. You're leaving a lot of revenue on the table, a lot of customers, a lot of conversions over that time.
The second thing to be thinking about here is that customer actions are always changing. E-commerce is always changing. Your products are always changing. If you're a big enough brand that's doing this for years and years and years, you're coming out with new products, you're changing your product lines, you really need to understand how people are finding those products, what they're engaging with, et cetera.
In addition to that, I hear this all the time, it's like Jon, how long should I expect to do conversion optimization? The reality is it does need to be a line item, it is something you should always be doing. Now, I will tell you, you will never run out of things to test. Where you need to make the decision about whether or not you keep going is whether or not you're continuing to get a return on investment from that spent. That goes back to having the right goals and tracking the return on investment that you're seeing from your conversion optimization activities.
You should be getting a return on investment that continues to thrive over time. It may ever flow over the course of a year and seasonality et cetera, but in the end, you should be seen at least a 4:1. We see about an average of a 9:1 return on investment so for every dollar that you give the good, our goal is to get you $9 back in additional revenue.
RYAN:
That's great.
JON:
That's one of the highest marketing returns on investment activities that you can do.
RYAN:
Now, I think there's not many e-commerce businesses that I know of or that we work with that wouldn't be excited about a 9:1 consistently. As we're winding up now, the question that always comes up with CRO is probably one of the worst questions to ask you, but I have to. What's a good conversion rate?
JON:
Haha. I know this. I get this question daily. Hundreds of times a day. Look, here's the reality. I mentioned this earlier. It does not matter what your competition's conversion rate even is. I get that question all the time. "Hey, I think that our competition is converting a lot higher than us, I want to get up to that rate." Look, it doesn't matter. A good conversion rate is one that is always improving. That's all you should care about, is just continually making that small investment into your conversion rate so that it compounds over time, and you will see sustainable growth in doing that. If you're just looking for that once a year pop, I can tell you how to do that. Just go discount your products heavily.
RYAN:
[laughs] It's like the best conversion optimization right there. Just you get a 50% off sale.
JON:
Yes. The reality is that's not conversion optimization in terms of how I would define it, but you will get your conversion rate up. It's one of those things where if you really want to do this, you really need to be thinking about sustainable business over a longer-term. That means investing in it month over month, looking for small incremental gains, and just tracking all of these metrics we've talked about today, in whole, and then looking at that and saying, okay, our overall conversion rate is going up, yes, but there's also a ton of other metrics that are really important here.
I think that's where if I see a lot of econ managers fail to sell CRO services through to the higher management, and maybe somebody sign off on a full budget, it's because they only focus on saying, hey, we're going to just improve the conversion rate. Instead of saying, look, there are four or five metrics that really matter to our e-commerce business, and yes, they ultimately gather and combined to improve your conversion rate, overall, but all of these other metrics matter just as much, because if we're not doing those metrics, then we're never going to actually convert the person in the end.
RYAN:
I think that's extremely important and good point there to finish up. As you mentioned, people should be starting their CRO in assessment. Funny enough, you actually do those for a lot of companies. What's the best way to get in contact with you for an assessment if they want to take that first step in CRO?
JON:
For those brands under 40,000, we have what we call our conversion growth assessment. That is basically gathering a couple of points of data and telling you exactly what you should change on your site based on our experience and looking at that data, and we'll help you bring those insights to the table. If you have over 40,000 visitors, we do a more comprehensive conversion audit. This is something where we spend about a month doing this audit.
We're going to help you make sure you're tracking all that right data, get some great baselines, talk to all of your consumers, do that user testing, we're going to go real, real deep to help you track every click and movement on your site. Then we're going to put together a huge report, 60 to 100 pages, and we're going to tell you, not only what you should change, but how you should do ongoing testing to continue to see that compounding growth over time. All of that you can find on our site @thegood.com.
RYAN:
Fantastic. All right. If you need some help, or you want to take some steps in CRO, make sure you reach out to Jon and have him take things over and look at your site, and give you some feedback, but set some goals, make them appropriate CRO goals and let's have some fun doing it.
JON:
Awesome. Thanks, Ryan. This is fun to talk about it.
RYAN:
Thank you, Jon.
Are your marketing goals lining up with the goals you've set to grow your business overall?
Many business owners or executive teams set goals for their online marketing to drive profit to the company. Unfortunately, the current digital marketing landscape makes it difficult to reach digital marketing goals that have a focus on profit:
- Generally speaking, digital marketing has increased in competition and the real estate available for paid ads has shrunk (mainly on Google which controls a vast majority of search volume).
- This has forced companies to further emphasize customer lifetime value activities (such as email and loyalty programs) to drive business profit.
- Instead of driving profit from the first order on paid search, companies now may only break-even on that initial order (some companies even lose money on the first order-on purpose).
The solution is to focus less on marketing ROI and focus more on the overall business objectives, like increasing market share:
- Revisit the goal every two months to see how email and loyalty channels are impacted by the increase of new customers.
- In theory, both of those channels will be driving much higher volumes of sales at extremely profitable levels. Even if profit doesn’t match up exactly, the sales volume will be making a noticeable dent in competitors.
- Customers that buy from your website through non-brand search and shopping are customers that were likely going to purchase from a competitor if you didn’t get them.
- They didn’t have any brand or site loyalty when making the search.
- Over time, investing in non-brand search/shopping more aggressively will also have what we call, The Halo Effect.
- Don’t let any changed goal continue for more than two months into the new year without analyzing the data to make sure that it is driving the intended outcome.
- Having goals that don’t drive the business in the right direction aren’t necessarily bad, but can have unintended consequences when left unreviewed.
LINKS "I Have Bad Goals, You Have Bad Goals, We ALL Have Bad Goals" by Ryan Garrow
TRANSCRIPT JON MACDONALD:
Ryan, I know you've spent a lot of time communicating with business owners and marketing teams about their goals with online marketing. To put these goals in perspective, we have to discuss overall business goals, and that's to me where things get really interesting, because their current marketing goals are not driving the online business towards an overall business goal. The business or individual usually has set a bad goal and the best time to review those I would think is at the beginning of a new budget year, which is typically the start of a calendar year. Ryan, today let's talk about setting more appropriate goals to online marketing and align that with business objectives. How does that sound?
RYAN GARROW:
Sounds awesome. It's one of my favorite topics actually. I get into this all year actually. I'll be talking to business owners as they're thinking about becoming a client or working with us. Or even if I'm just out having a beer after a conference, I always love talking about goals. It's been a big part of my life, and how I operate so I'm constantly setting goals, revisiting them, and business strategy and goal setting go so hand in hand that it just becomes a topic I naturally get to probably in almost every conversation with business owners or marketing teams.
So often, I find that there are well intentioned people throughout an organization that set what seems to be an appropriate goal for their team, and then they get down the road 6 months to 12 months, and maybe they hit their goal, but it drove the business in a completely different direction then it actually been anticipated. Without all the stops in place, you really revisit that goal and decide, "Is this actually working and are we actually accomplishing what we're trying to accomplish?" It can be very fascinating conversation in that process. I'm excited about this topic for sure.
JON:
I recognize and maybe our listeners don't know, but you run several online businesses yourself, right?
RYAN:
Yes, my wife and I have probably more than our fair share [laughs] that we run.
JON:
I would think one is a fair share so the fact that you have more than that is awesome. That speaks to the fact that you put a lot of what you preach into practice, right?
RYAN:
Yes, there's actually not a scenario in which I will advise a business owner or marketing team to do something that I'm probably not already doing or I haven't learned from and therefore advise them correctly based on my own misgivings or wasted money.
JON:
I imagine in your day, you've probably set a bad goal or two.
RYAN:
The list is ongoing and my wife likes to remind me of those [laughs]. One funny one recently, I was so mad at myself for this one. We were launching a brand and we decided to launch it on Amazon. Partially for the education, but also because I had been built up as a digital marketer to fear Amazon, and that just made me mad that I was scared of Amazon. That's why I go, "Forget it. We're going to launch a brand on Amazon and see what happens. We have to understand the landscape." Our team was deciding to start up an Amazon ads department. I said, "All right, we'll launch on Amazon, you can have my money. I'll set a wonderfully appropriate goal to make sure we hit our objectives."
Initially is like, "All right, I'm going to share the upside with this team and we're going to have a profit share." They know my margins because they need to know that to run the digital marketing through Amazon and help create the pages and all that. We had this wonderful goal that every dollar of profit we got from ads, they were going to get, I think it's something around 20% of that dollar, whatever that looked like. I can't remember exactly the goal.
My goal as a business owner in launching this business was to dominate the competition. I was not in the game for profit. I want to spend down to break even to get customers, I want to understand the Amazon ecosystem, but my goal really in this is it's an organic fertilizer. I want to take down Monsanto. A pretty lofty goal considering how many billions of dollars they have.
JON:
Yes, no kidding.
RYAN:
Profit was secondary to me, it was like, let's get the product in the hands of people. I want to know their feedback as well as saying, "Hey, the more people that get it, the better my opportunities for repeat business, et cetera, et cetera." We get three months down the road, and I'm just frustrated with growth, like, hey, we went up aggressively. When we started the marketing it was exciting. My partners and I were looking at numbers daily. It was actually when the Apple Watch which we all had had the Amazon ping every time you got a sale, which was great. We'd have a glass of wine at the end of the day and our watch would go off and we're like, "Yes, we just got a sale. This is awesome."
We were excited, but it flat-line so quick, and three months in I was talking to the team and I was like, there is way more search volume here on Amazon than what we're capturing. I could see our search rank and where we are ranking the competitors and their sales volume based on reviews and all these other metrics we had to look at. We were not moving the needle forward according to my overall business goal of becoming one of the largest houseplant fertilizers in the marketplace. The teams like, "Oh, the numbers are great. Look at we spent $5,000, regenerated 10 $12,000 of profit. You cut us a cheque on the side for $1,000. Isn't this great?"
That is not my goal. Profits, not bad. The partners weren't upset about the profit, but the flat-line growth had to do with the fact that our marketing team that was pushing the levers, and pulling levers on the Amazon ads weren't actually able to accomplish my overall goal of market share and getting sales and new users because they were being conservative to protect that margin, which was their goal. I had to go back to the team and like, "Okay, I like the fact that we're able to pay you because you generate a profit. You nailed the goal. Awesome job. High fives all around, but as a business owner, I have to now change the goal because I don't really care about profit. I care about sales."
We adjusted the goal to get on to percent of overall revenue, as long as we're not losing money. I said, "If there's a dollar in profit, I'm still paying you and I'll technically lose money as a brand, but that's the goal I want is aggressive sales growth, regardless of dollar profit from marketing, because that initial orders when I'm getting on Amazon, and we had some brand campaigns set up so we can avoid brand non brand stuff. It turns out, we started growing again, once we adjusted that goal and better aligned with my overall business vision, but that was frustrating for me, but it's also an example of how easy it is to get going on the wrong goal just because good intentions are not. I set a goal that just wasn't appropriate.
JON:
I think that aligns with the current digital marketing landscape, which has had a major shift over the last few years. Would you agree with that?
RYAN:
For sure. It's constantly changing. I think one of the reasons I still have a job in the digital marketing spaces is because it's constantly changing and the landscape is constantly in flux. Google, where the largest percentage of spend many times is for a company. In the last couple of years, we've gone from 11 text ads down to 7, and there's more companies competing. You can see you compressed the amount of available ad space, and then increased number of advertisers, logic dictates what's going to happen when that does, there's just an increase in cost per click and a real shift.
Maybe five, six years ago, a lot of our e commerce clients would have said, "Set a goal around profit, and I need to get profit from ads because it's available." Now profit from that first ad isn't necessarily there for every company. In fact, many industries, it's you're losing money, no matter what happens on Google ads, or Microsoft ads, but you're moving the focus from that initial sale and what are you getting from that sale to, What's the lifetime value am I getting from that? And so it's extending out that return.
We started doing this actually funny enough, probably about four or five years ago, with a company called Harry and David, where they did the math and actually understood how much money they should be losing on that first order to maximize their long term lifetime customer value, and how many companies they could get and how much market share could they capture. It was a real fascinating study, but we're finding that to be more than norm now than shooting for a 10X return on ads spend when your margin is 50%.
JON:
Yes, so they're basically looking to break even on that initial order.
RYAN:
A lot of companies should whether or not they are or not. My advice to a lot of companies is that first what we would considering a non brand acquisition, so somebody searching for your product or service and not your brand. That ordered in a perfect world right now should probably not have profit, it should be right about break-even and then having some lifetime value, being able to email them and bring them back into the brand through the same product again, another service, another product, having that future business coming in with your profit actually comes from.
JON:
Yes, because the cost of that second sale is so much cheaper.
RYAN:
Yes, and the more customers you can acquire on a non brand search, the less customers your competitors have, because that person is searching for product A unattached to a brand at this point. They're going to buy from somebody, it might as well be you because now you have that customer data, and that ends up becoming one of the most important things to a brand, regardless of whether you're a retailer or a brand. It's that customer data and knowing something about them that maybe your competitor doesn't know.
JON:
Is it safe to say that the number of levers that have impacted digital marketing return has just magnified tremendously over the past few years and maybe that's causing confusion with the goals?
RYAN:
I think so. I think you also have a lot of marketing teams and business owners that have goals that they have them and they don't necessarily know why. They've had them for years and it comes across to companies big and small that either their goal is, "We just take last year's numbers and add 10, 15% whatever we think the market's going to do and that's our goal." Or, "Hey, we have this profit goal from paid search and we look at it as a profit center and we always have, therefore why would we change that?"
What I'm seeing from a broad stroke high level is most of those companies looking at profit goals from their marketing are shrinking as much for what their spend could be or what they actual new customers coming through that channel could be or it's causing them to focus more on just brand search in their paid channels, which has meaning they're capturing the same customers over and over and over again and are not actually growing their database.
JON:
Step one is to understand and acknowledge that we've had bad goals, right? Step two is to fix those goals and make sure that we've got marketing in alignment. I think we can all agree, at least in some part, we've all had bad goals. You had a great example of a bad goal earlier on and now that we've all agreed on that, let's talk about how we can fix those. Can you walk us through maybe an example conversation you've had with clients who have had bad goals and how you start to correct those?
RYAN:
One actually comes to mind. It's in the auto parts space. Generally speaking the margins are not extremely high. This particular brand though manufacturers and goes direct to consumer and so their margins are higher than most. In fact their margins I think are just below 50% but they're fairly large organization online. I think they are doing north of 50 million or so per year through their website.
We took it over from another agency and magnified their sales phenomenally. I think they spent 1% last year over year, one of the months we looked at, before I was talking goals with them, spent 1% less and had 50% more revenue and their overall profit because they track profit outside of that for their marketing team, was that 57% on marketing even including agency fees because I think that was about a wash agency-to-agency.
High level numbers looks phenomenal. They are really printing a lot of money on their paid search and they were beside themselves excited. The marketing team was in a great spot. They were super happy and one of our better references in the space. As we got into the numbers and started talking about overall business goals and what they could or should be doing, it became apparent that their marketing team had an incentive to create profit from paid search ads, which is one of the reasons they were so excited to be working with us at Logical Position because profit from paid search ads was up 57% and obviously their incentive was looking fairly solid.
Diving into the numbers. They are a $50 million auto parts company that's part of a huge market. 50 million is one of the probably top five players in their specific segment, but it could be massive. They could probably be doing 100, 150 million a year online rather quickly, but they're being held back by some of their goals internally. Analyzing analytics and Google ads together uncovered some things where they only had about 20% of the impression share in shopping on some of their non-brand queries. Not that impression shares and end all be all because it can be manipulated within shopping to show almost whatever you want.
This was fairly clean data that we knew that the market was fairly big for what they were doing and so despite their numbers being great, I had to talk to the CFO and talk to them about overall business goals and their goal is really become a big player and they do want to hit that 100, 150 million revenue number online and I had to talk to them about, "Okay, well, your marketing team is getting a 14X, spend a dollar, get $14 in revenue on non-brand terms," which is phenomenal in the auto space, especially in a place as competitive as theirs.
There was a lot of room to run even with profit in the space and I put some numbers in front of them. I said, "Right now you're using a 15X as a barometer of success in non-brand search. What if you were able to say lower that goal to a 4X. You spend a dollar to get $4 in revenue, still technically profitable. What would that do to your spend to your overall sales to your new customers? Let's just play this out and see what happens?"
It basically said, "If you tripled your budget on non-brand terms and we're talking about a six- figure budget so it's not inconsequential on a monthly basis, you are still able to get the same amount of end profit to the organization as you had before, but you were able to acquire a vast amount of new users. If you're manufacturing your fulfillment, all these things can keep pace with that. You should be pushing for a much lower return on ad spend on your non brand goals to take that market share," because they were covering such a small-- It was almost like the tip of the iceberg and they were being successful.
There's no scenario in which they weren't happy, but the magnitude that they could move below that waterline and capture a massive amount of market share from competitors was for sure there and that's not the case with every company we look at or talk to. Some of them have really maximized their acquisition ability on non-brand terms, but most companies out there listening to this podcast, there for sure is the ability to push more aggressively.
John: Let's talk about the different levers then that are involved in that equation. I heard you say that they got a few of those wrong and had to go back and correct them or that it's limiting them. Can you tell us about a handful of these levers that everyone should be considering when they're setting goals?
RYAN:
First you have to separate out brand and non-brand. People searching for your brand and your brand plus product or brand plus service, those are your earned customers. You've already done the work either in digital marketing or branding offline or social media. Those people are actually searching for you. That group of people searching, you're not going to be able to necessarily set a goal that you can stick to around that because it's going to depend on what are your competitors doing? What does the landscape look like on Google based on your brand?
If you're Kleenex, your brand searches a little nebulous space on are they looking for you or are they looking for just your product because you've been branded so well for that particular product separating that out. You have to have very clean data in your account to say, that's one piece of the account that's just going to-- we want to maximize our coverage and that's really your goal there.
Acquisition goals in the page search realm or digital marketing realm are around new customers to your brand. We call them new to file customers. They're new to file a new in your CRM, new in your email database. That's really where you have a lever to push and pull for your acquisition of new customers. That's where you take into account what are your margins? What’s your lifetime value? Those are numbers the brand has to be able to at least have a good understanding of margins fairly easy to capture that but usually we'll start with just a broad stroke.
What's your average margin? If it's going to range between 40 and 50 depending on the product line they're buying, but to meet in the middle right now at least to start with goal setting at 45, great let's figure out your break-even is and then what's your lifetime value? How often do they come back and rebuy or how often should they? And most companies don't know this piece.
This is where they're guessing and revisiting goals comes into play because you might not have a successful email campaign currently and you're going to start it right away and you're going to make an estimate that our product has a life span of six months, so we expect to be able to get in front of these people again in six months. Great, let's figure that then. How many customers should we be acquiring to get this test going? Some companies and actually I would say most companies don't start with the goal of losing money to acquire customers. Just break-even and figure out how hard can we push? This makes people really nervous by the way [chuckles].
JON:
I can only imagine, especially that CFO, you always have to talk to.
RYAN:
Oh yes, the CFO and in my world the CFO is my wife [laughs]. I like if I could spend a 100 grand tomorrow on digital marketing and get 100,000 profit, that'd be great. That makes some CFO, like my wife, very nervous to see, oh, the potential to spend $100,000 tomorrow is there. What if we only brought in $80,000 of revenue or profit? That would be concerning to have the family at a deficit of 20 grand in one day.
The wonderful thing about digital marketing, specifically, we'll focus on Google right now, for the purposes of this conversation, money comes back into the brand almost as quick as you're putting it out and depending on how Google is billing you, whether it's net 30 or whether it's every $500 and how quickly your merchant processor is bringing your payments into your bank account. Generally speaking, it's a very quick wash on that. Money goes out, money comes back in and because you can see in Google ads and fairly close to real time what sales are coming in, there's very little risk to the cash flow of the business.
That's where most CFOs start coming at me within the cash flow like "Oh, we've got a byproduct. We've got to do all these other things." Yes, you have to do that but if money's coming back in as quick, in theory, it's not causing any issues. There can be issues with having the product in stock. If you are a manufacturer, do you have the bandwidth to create that volume? Do you have the ability to fulfill that? There's a lot of other questions that come into that based on what we think the volume could be. As you're going into this, the threshold may not be how much can you spend, but it could be how much can we produce, sell, et cetera, et cetera. Data considerations within the space.
JON:
Ryan, one thing I've heard you talk a lot about between conversations with the clients that we jointly work with is something called the halo effect, right? Over time if these brands are investing in that non-branded search or shopping more aggressively, they'll have that halo effect. Can you talk to that a little bit?
RYAN:
Yes. You're going to set a goal and for most of you listening, start with a goal around breaking-even on non-brand. That needs to be on search and shopping but shopping is the fun one on Google. That's where if you control your search terms well enough and this one isn't necessarily easy to control because shopping is not set up with keywords. It does take some manipulation of the campaigns and structure and hierarchy and negative keywords, all of that.
Let's assume you have that together pushing aggressively in non-brand shopping. I'm staring at my computer screens now. Let's just say you're selling computer screens down to break-even by marketing aggressively and shopping and pushing for extra units there. Most people that go to Google Shopping, actually two things. They buy something different. What you're pushing and shopping as far as the click, over 50% of the time they're going to buy something entirely different.
That's where it does become important to monitor what they're buying because if your margins are different, it can be problematic, but they also convert often through other channels. I personally, when I shop on Google Shopping, when I click it, I buy it. I don't do a tremendous amount of research or I've done it beforehand by the time I'm looking on Google Shopping, I click, I buy, there's not a huge attribution funnel for my personal purchases.
It's unique for me when I look in the data and actually see that Google Shopping actually opens more sales than it actually closes. If you're clicking on computer screens on Google Shopping, on average, you're going to come back and buy through a different channel. If you're looking at Google analytics, you can see a city conversions.
You're going to see that the halo effect of investing in Google Shopping on non-brand terms, your organic traffic generally will increase. Your email, will generally increase, your direct traffic, your referrals, your social media. All of these channels will be impacted by Google Shopping. It's fascinating to see the impact that Google Shopping can have across channel and it generally doesn't get the credit that it's due.
JON:
Do you mean the organic and direct traffic and these other brand channels are all going to have noticeable revenue increases as well?
RYAN:
They should. Again, it's not in a vacuum where it's perfect for every brand across the world, but generally speaking do it for three months and look at the numbers and you should see an increase. Now if you're doing SEO as well, you would expect organic to continue to increase as well, but using the Google analytics assisted conversions, you should be able to see where Google Shopping is having an impact and you can actually get down into conversion paths and all that fun data to tell you what is being impacted the most by your extra investment in Google Shopping.
In fact, just had a conversation with the CFO, one of our clients a few days ago and they've been investing in non-brand shopping at a lower return on ad spend than they normally would because they've been seeing this halo effect. They've measured it and said, "Hey, we actually aren't there." It's a very competitive space where there's not a lot of profit, if any to be had in the digital marketing space because of the competition but for them they realized, "Hey, we've got this extra data showing that organic traffic is having an uptick and so is email and direct traffic based on what analytics is telling us about our investment in shopping.
Therefore we can go down a little bit below break-even because of that halo effect and allows them to get a little more aggressive because they do have a pretty strong lifetime value where people are coming back into the brand after their first acquisition.
JON:
I heard you say, Ryan, a little bit about how often you should be looking at this data. How often do you feel people should be reviewing that data and then perhaps even revisiting their goals?
RYAN:
I'm probably a little more odd in that I'm always looking at data constantly in there and you want to be aware of it. You can also get caught in making knee jerk reactions too quickly. I caution most marketing teams or business owners to go in there daily and look at the data and want to make changes. You have to let the experts in marketing do their thing. I like to revisit goals quarterly.
For my businesses, I want to say, "All right, I was shooting for this goal quarterly. Let's look at what happened and do I need to pivot the goal, adjust the goal based on what my business is trying to accomplish?" Like I did with organic fertilizer. I did revisit the goal quarterly and thankfully a day because I was able to adjust and make it a better goal to help me drive the business where I want it to go.
In marketing, we always have the best intentions and the best hypothesis is going in and saying, "If we do this, we believe this is going to happen." There's always something that's going to go wrong. Always. You may not completely miss the goal. We may go in with one hypothesis saying, "Oh, there's this much search volume on this term, let's go get it and then there's more or less than, so we have to pivot a goal", and that's really where some experts can be valuable on your marketing team and seeing that because knowing that it's going to be different than what you expect, being able to pivot and adjust on the fly is very important for the minutia of working on account in the paid search realm.
The marketing teams in the account constantly look at the data and make adjustments to help the account get to the goal and then higher level, I would be looking at your goals quarterly to see those goals are appropriate and they're heading in the direction that you really wanted them to go.
JON:
Who do you recommend is involved in that conversation then? Because I've heard you mentioned the CFO a few times and I've heard you mention the marketing teams and of course the marketing experts that they might be working with to help them drive traffic. Who all do you think should be involved in those goal setting conversations on a quarterly basis?
RYAN:
To a degree I say less is more. I don't like meetings in general. More people generally cause meetings to go longer. I like to keep it small. Depending on the size of your organization, you may not have a large marketing team, you may not have a CFO. Its business owner and marketing team. If there is a CFO in the organization, I highly recommend they're involved in the goal because they're going to have a general overview of what's going on in the organization and maybe the sales volume is not sustainable based on inventory levels or manufacturing capabilities or the ability to ship and distribute.
The CFO should have some insight on that. I for sure think a CFO should be involved also from just a cash perspective. You need somebody that understands the digital marketing deep enough to be able to talk strategically, but also not the person actually pushing all the buttons necessarily and then the person leading marketing overall should probably be involved.
JON:
Just like all goals, there's value in discussing those goals with experts though, right? Would you suggest that they have a third party reviewed these goals as well?
RYAN:
I would probably bring a third party in, maybe not necessarily quarterly, but at least annually to look at your goals. Maybe biannually, somebody that you trust just to have an unobstructed view of what you could or should be doing. Audit of Google's a place where you're spending a lot of your money, maybe have an audit at least once a year.
If you're working with Logical Position, I don't dissuade somebody from having an audit done by somebody just to see-- to help keep them accountable. Accountability is not a bad thing. You want to make sure that you as a business owner or head of marketing are really getting what you're paying for or that your goals are appropriate and driving the business in the direction that you need it to be going.
JON:
You're not missing those potential pitfalls of that goal, right?
RYAN:
Yes, there are pitfalls of all kinds of goals that if you're expecting lifetime value, but your email program is not generating it, maybe you can't be shooting for break-even on the first order because you need some of that profit to cover a retail store that maybe isn't as profitable as it should be. There's a lot of variables to every business on the planet that one size doesn't fit all as far as a digital marketing goal, but you can use guidelines, regard rails in place to help formulate the most appropriate goal.
JON:
Ryan, this has been an amazing topic. I know I can't wait to start refining some of my own goals here at The Good. Anything else you wanted to add to this conversation?
RYAN:
I think just the most important thing is just make sure you're having fun. I see too many business owners and marketing teams getting into the minutia of goal setting or digital marketing and that just becomes not fun and that's really why a lot of people are in business in the first place. Yes, it's a job. It pays the bills, but if diving into the details is not fun, find a way to make it more enjoyable.
Enjoy the process of setting goals, analyzing them and really find ways to win. It should be fun talking to your goals. It should be fun talking to business strategy of how is your brand going to win in 2020 and in this new decade? The potential right now for every brand is huge. You've got a new decade to look at, have fun with it, set some goals, be aggressive, conservative goals aren't nearly as fun to accomplish as aggressive, big pioneer sky goals.
JON:
I would say most people would think that looking at numbers can't be fun, but you know what? If those numbers are going up into the right and they're trending positive and you've set the right goals that are helping you achieve success and revenue and profit, then things get a lot more fun, right?
RYAN:
They do and I like setting goals to like, "Hey, there's a bottle of champagne in place when we hit this micro-goal on the way to our big goal."
JON:
I love it. Most people listening probably don't know that Ryan lives out in Sherwood, Oregon which is in the heart of Oregon Pinot, so I'm surprised you used champagne instead of a bottle of fine Pinot Noir but we'll pop it either way and enjoy. [chuckles] All right, Ryan. Well, this has been a wonderful conversation. I can't wait to set my goals as I mentioned, and hopefully everyone else is going to do the same for a successful 2020 and decade. We'll chat soon.
RYAN:
Yes, and if anybody really out there wants to talk goals, reach out. I mean, it's fun. Jon and I do this constantly for brands all over the planet. For me-- I'm sure for you as well, Jon, it's just it's fun. Reach out because there's conversations-- Even if you're not working with us, I just enjoy the process and talking through and helping companies align their goals.
JON:
Great. Well, we'll look forward to hearing from everybody. Thanks, Ryan.
RYAN:
Thanks, Jon.