0:00 – 0:27 – Episode Intro
This is the Growth & Greatness eCommerce Podcast, powered by Right Hook Digital, with your hosts Scott Seward & Raymond Johnston. If you’re an eCommerce brand founder, entrepreneur, or marketer looking to accelerate profitable growth for your business, then listen in ‘cause this is the podcast for you.

0:27 – 6:44 – Look back into 2020 performance and eCommerce strategies that shaped operations
Scott (0:27 – 0:30) – Episode 1 of Growth & Greatness eCommerce Show.

Ray (0:31 – 0:33) – The start of great things to come, that’s right.

Scott (0:34 – 0:40) – It is, we’ve been planning for a little while, but there’s been a few spanners in the works in the last 12 months, that slowed things down.

Ray (0:40 – 0:41) – Had a busy 2020, that’s for sure.

Scott (0:42 – 1:08) – It has, and that’s probably the perfect place to start the podcast. Let’s have a look back at 2020. It was just such a, I mean, there’s negatives and positives. The whole COVID situation had, obviously, detrimental effects across a lot of areas, but when it came to eCommerce, it blew things up, right?

Ray (1:08 – 1:15) – It did. At the time, though, no one knew too so it was kind of a pleasant surprise that we didn’t anticipate, but we were prepared for.

Scott (1:15 – 2:25) – Totally. Let’s go back to March last year. When it all kicked off, we didn’t know what was gonna happen, right? We sat down, I remember sending the guys home, I think it was March 13 or 14, and we weren’t even that worried back then, but it was, like, let’s take some safety precautions. By that Sunday, you, Dee, and I were sitting down and okay, what do we need to do to prepare for this? What’s the worst case scenario? What happens if we lose 80% of business overnight? Because we’re looking at the whole situation and there’s a few ways it can go. There were so many outcomes possible. One was, people are not just gonna spend. They’re gonna be at home, they’re gonna lose their jobs, they’re gonna worry about not being able to pay for everything. That’s gonna dry up spending. What’s that gonna do to eCommerce? Then the other side, which is where it went, human psychology kicks in. At home, bored, more time on the phone, looking for entertainment, making life more comfortable at home when they’re on lockdowns. We had three weeks of just bumpiness and then April came.

Ray (2:26 – 3:20) – What I think is interesting, I think it’s interesting, real quick to pause on that… We hoped for the best, we planned for the worst. And if anything, I honestly think, looking back, all of our contingencies were, thankfully, diving into the finances with you and the team, what happens if we lose 80%, 50%, 25% of our business. We really didn’t have a contingency for what if things go crazy and everything works. At the time, it did ‘cause we were already well-prepared for a lot of, I won’t say success, but like a lot of influx of potential business and ad spend. Looking back, maybe a takeaway for other businesses as well is that all of our plans where the things that, if it was detrimental to our business, we would have to shift and shift hard. On the success of it, ‘cause we didn’t know what was gonna happen, I don’t even remember if we had a plan for how well it was gonna go. Do you?

Scott (3:20 – 3:34) – No, I don’t think we did. When we were all sitting down and looking at the situation, we, and I guess this is a lot of the media and the information we’re all consuming was more of the downside, more of the negative…

Ray (3:34 – 3:35) – For sure, that did shape it.

Scott (3:35 – 3:49) – Yeah, we didn’t really have a plan, we just had to adjust quickly, and once we saw those signals, which I think was like early April, mid-April, things started going, wait hang on, wow, there’s some verticals and brands here that are doing really well…

Ray (3:49 – 4:25) – … And March, I’m thinking a handful of our brands, the end of March were, wait a second, CPMs were super cheap. I remember, the beginning of April, once we started seeing that shift, what we did was we had an all-hands meeting with all strats, ‘Listen, this is a freaking goldmine. CPMs were the cheapest they’ve been in 3 years. Go to all of your clients who aren’t shut down, ask for as much money as you possibly can and tell them, this is an unheard of gold rush. You do not want to miss it.’

Scott (4:26 – 4:30) – But then there was other effect, right? The issue became inventory, supply chain…

Ray (4:30 – 4:31) – Yeah, that did hurt.

Scott (4:32- 4:40) – You know, we had some that just couldn’t get stock fast enough. There’s obviously issues with China… Fortunately, a lot of our, yeah…

Ray (4:39 – 4:49) – That was the thing. If you relied on China or you outsource your manufacturing to a different country, you had a really hard time.

Scott (4:50 – 5:16) – And then lockdowns in certain states were hurting distribution centers so you couldn’t get out orders quick enough. There was this challenge of, performance was really good, but you couldn’t actually get stock or orders out for a few clients, but that seemed to be fairly temporary. I think it was probably mainly April and a little bit of early May that that was a problem and then it smoothed out a bit after that.

Ray (5:16 – 6:11) – Yeah, it was. And that was only regional or state-specific lockdowns happened ‘cause obviously Australia and the US being very different in how they handled the situation, specifically when it came down to those specific states, but most of the time, it was for 3-4 weeks. Many of the brands who had their logistics and they knew their times when they could get their stock back in-house, they sometimes ship to like pre-order if they knew they can actually get it in time, but they just were really upfront, ‘Hey, this is coming, we’re on lockdown.’ If anything, I actually thought consumer sentiment was more forgiving during this period than anytime in the last, probably 4 or 5 years, if you told them, ‘Hey, stock’s late, we’ve been on lockdown.’ We have some brands where they didn’t get their products to people’s hands for 6, 7, 8 weeks, but they were very understanding. If anything, their return rates were really low ‘cause everybody was going through it at the same time.

Scott (6:12 – 6:44) – Yeah, I think, that just became the standard across the board ‘cause it wasn’t even just being able to get things out, but all the postal services had delays because they had social distance, they had restrictions in what they could do. I think everyone kind of expected delays with orders, but they were still shopping and buying like crazy. Then what do we see? We saw, pretty much, like Christmas numbers for about three months. Our overall performance across that time was the highest we’ve ever had.

6:44 – 14:48 – New normal of businesses – opening up a new world of buyers and products to include in supply chain
Ray (6:44 – 7:22) – Absolutely, and many factors. Obviously, lower CPMs. I also noticed, besides the big wave of consumers going online ‘cause they couldn’t go anywhere to shop, but also what I call sympathy buying. There’s a lot of sympathy buying. I know we’re not at this topic yet, but COVID, a lot of sympathy buying to keep businesses afloat. People really massaged, ‘Hey, help support small businesses,’ and there’s a big wave of that. Also, eventually one, in the US, when the protests started, a lot of sympathy buying for these ethnic or ethnicity brands. People buying to support what they stood for.

Scott (7:23 – 7:54) – I think a lot of things that were being monetized off the back of COVID. There were so many people selling face masks and that was becoming their best-selling product, which is great, and you take those opportunistic opportunities and take advantage of them. But, if that’s what’s driving your whole business or you’re a startup and you haven’t got traction with the rest of your product range and that’s the only thing selling, it can be a little bit misguided in how well you’re actually doing. You know that’s only gonna be a temporary thing.

Ray (7:54 – 8:35) – Without a doubt and I think, what we saw too, in the interesting conversations we saw, a lot of brands being born out of that, a lot of brands literally taking off only because of COVID, but then what happens is, once that kind of dies down, they came to the harsh reality that that’s not the normal. I think that’s where some of these brands, that’s where they really struggled with, these brands I’m thinking of, where they were one of those three people that they keep asking stuff, ‘Where’s the goal there?’ for that short period of time. Maximize what you can, but if you don’t pivot outside of that or find another product or something else that people actually are gonna come to you for, it’s an eventuality where it’s not gonna work anymore.

Scott (8:35 – 9:11) – It’s a little bit like investing, right? You have a big bull market and then you just think that’s continue forever, but if you’re looking at this going, well, it’s gonna slow down at some stage. But you know, the other positive, just for the industry, was it opened up a whole new demographic of people buying. My mum, wouldn’t buy anything online historically, people are worried about their credit card details on the Internet and privacy & security or this & the other. It’s now, I guess, fast-tracked eComm like 5 years, really, didn’t it, and opened up a whole new world of buyers.

Ray (9:12 – 9:36) – Slightly different, but for example, using the Shopify, they’re the number 1 eCommerce agent, and they were saying that they had plans for the eventuality of where eCommerce will go, but in that 3-month period, it shot 5 years in the future. Kinda pace that in your mind. We jumped from, in 3 months, 5 years projected where we would actually be.

Scott (9:39 – 10:04) – It’ll be interesting to see whether that’s something, that level sustains or it does pull back a little bit towards what it was or the trajectory it was on previously. I guess we’ll see a little bit more of that this year. Vaccine’s getting rolled out, probably not this year but next year, getting back towards more pre-COVID life, we still don’t know. Still lot of unknowns.

Ray (10:04 – 11:31) – Pre-COVID, I think, and in my personal philosophy on that, is I don’t think the new normal’s gonna be the normal that we’re used to. There’s been so many changes with the use of demographics and how they shop as well as with, a little different, but how people work from home. I don’t think that’s ever gonna go away now, I think that too many people love it and are convenient to work. Businesses have to conform to it, which is the benefit for us marketers and advertisers. Hypothetically, they’ll be still a lot of eyeballs on platforms ‘cause, let’s be honest, a lot of people, there’s a lot of distractions at home, they tend to be on their phones more often ‘cause there are no other people in the cubicles sitting next to you. Overall, I’m extremely bullish on the position, personally, ‘cause I feel like I understand human behavior. That makes me really excited, but then, in addition to that, there’s a massive opportunity now as well to where, if anything, I feel like because there’s more people being at home, I think you can relate to them more in a lot of ways because then, now that we’ve all experienced it, if you think about angles, I don’t think that at-home mom and dads angles are gone. I think, if anything, it’s gonna be more and more prevalent because 6 months is a really short period of time, if you really think about it, for example a person to get used to it. It’s gonna be awhile before they get used to it. And so, if you’re that kind of a brand who’s listening to this, I think it’s still your heyday, there’s a lot you can do in the future.

Scott (11:32 – 12:47) – I think it’s, I like the hybrid and I think for a lot of businesses, that becomes, we know firsthand, we’re probably 90% remote but we do have the offices so we have that in-house opportunity when we need it. We do have a small team in two offices, but yeah, I think, for businesses to be able to reduce their overheads as well, and maybe have a smaller office size but they take 3 days at home, 3 days in the office. There’s a bit more flexibility, bit more balance, reduce costs. Personally, I like being in the office. This is the hard part with young kids. Love being at home, love my kids, but when you’re trying to get in the work and get in the zone, and you got a 5-year old and a 3-year old smashing the door and who wanna show you their drawings, it gets a little tricky. I like that separation of home and work myself. With the flexibility, you’re able to do that, I think it’s super important. That will be a big shift, just in business in general going forward. So many people were against it before, so old school.

Ray (12:47 – 13:10) – An interesting question for you, Scott, would be… so thinking a lot about those people making that transition to be mainly at home, the pros and cons where you are, I wonder if there’s gonna be a bigger shift and, maybe, brands that have a bigger warehouse, but because of COVID restrictions, they realized it’s a lot of overhead that they don’t need. I wonder if you’ll see that there’s a shift of people going to 3PLs.

Scott (13:10 – 14:48) – I guess it’s just the cost-benefit, isn’t it? I think for brands starting out, they should be using 3PLs, anyway. Picking and packing and sending your own orders should be one of the first things you offload. That’s just not the best use of your time. It might add a little, reduce your margins a little bit in the short term, but in terms of, if you’re spending 3-4 hours a day packing orders, you can pay someone $20-25 bucks an hour to do that. I’m sure you can add more than that in terms of adding value to your business. 3PLs should be the port of call, whether you got a warehouse in place or staff doing that, it just depends on the cost. The whole point of having your own warehouse would be to reduce those holding costs for stock, picking, packing, but the other advantage with the 3PL is they can usually get better shipping cart rates just because of the volume that they’re doing. It’s really just analyzing the whole situation. What’s it costing your brand, your staff, your shipping costs, versus using a good 3PL? I guess the other good advantage of it being, in a warehouse, you’ve got more control over what you’re sending out so in terms of getting marketing material into those orders and customized on that side, you’ve got a bit more flexibility if it’s in-house. 3PLs are a little bit restricted on that front, usually, unless you’ve got, you know, a really good relationship with them and can go in and show them exactly what to do and can trust them to do that, but same as everything, pros and cons.

14:49 – 23:23 – After first few months of COVID-19 and lockdown, what are other developments in eCommerce? – Black Friday performance + strategizing for 2021 sale events
Ray (14:49 – 15:01) – Let’s kind of circle back around. COVID, you hope for the best, plan for the worst. Past COVID, let’s talk about, for example, what are some of the things that we saw?

Scott (15:02 – 17:10) – We saw like that sixth month, probably September, there was a slowdown, a little bit, like July, August. September was really good again and then October was probably the worst month I’ve ever seen. There was so much going on. There was COVID, there was the whole political situation in the US which was obviously having a pretty big global effect, and then, I guess it’s hard to say how much was political and how much is now the conditioning coming up to Black Friday. I know in Australia, specifically, we go back 3, 4 years, Black Friday & Cyber Monday weren’t a huge thing. It was there, and people did that offer, but the buyer behavior from September to Christmas now, especially in Australia, has changed a lot. Black Friday’s always been much more popular in the US so you’ll have a better perspective on that in a longer term view. So, what happened, it used to be from the end of September to the middle of December, was just solid, solid buying, pretty consistent all the way through. Over the last 2, 3 years, I’ve progressively noticed real big dip, October, November, because everyone knows it’s coming and they’re basically just saving up for Black Friday when they know they’re gonna get discounts and that’s when the buying really goes. There’s probably a little bit of a push to the middle of December until shipping dates get cut off. That cycle has changed so much, almost to the point, I posed the question a couple of times, has Black Friday kind of, in a way, damaged Q4? Or how do you address that, how do you shift? Is there a different strategic play? Running your big sale at the beginning of November, doing that, acquiring a bunch of customers, and then having a big product launch with no discount on Black Friday when everyone’s in buying mode anyway, and you’ve already built up that customer. There’s so many ways to go from here, but I think it’s just interesting to see it year-over-year, how it changes and the dynamics of the buyer behavior.

Ray (17:09 – 19:04) – It is and I think, this year, what really threw us for the curb is you had a lot of brands, if anything this year, they launched earlier for Black Friday than they ever had before. Some people, we were seeing brands launching in October so we were wondering, were those the brands that were struggling so much ‘cause October was a bad month that it forced their hand. This is something that we debate heavily internally with our team and we tested and, to be honest with you, I’d say that the only hang-up of launching early since we’re talking about Black Friday and Q4 is keeping the hype up and also the constant creative testing that you have to do and keeping things fresh. Just to go back to what you said about the pattern of how Black Friday shifts, every year it’s changed. This year was the weirdest of all, not only launching early, but a lot of deal releases as you get closer to Black Friday. You had, even some brands, where they started in October but then they would run Black Friday month. They would call it Black Friday month, not Black Friday anymore. That’s where I said Black Friday, I don’t think it’s a week anymore, it’s an entire month event. You also had other brands, for example, where Cyber Monday is not a day anymore, it’s an entire event, goes through all the way to December sometimes. Honestly, from the data, consumers I don’t think, either one of those, I don’t think it really matters. Are you giving them something of value? Is it an irresistible offer? In addition to that, I call it hype, are you keeping things fresh in front of them? This year, there’s so much noise when it came to Black Friday and offers to where some brands that we know of did not go so well because they didn’t have a good offer or didn’t stay in front of their brands. Unfortunately for them, they missed out on probably the best Black Friday we’ve ever seen.

Scott (19:04 – 19:32) – We see that nearly every year, right? For the brands that it doesn’t seem to click with, it’s nearly always the same issues. Usually not following directive or advice and wanting to do things either too complicated or just silly mistakes that haven’t been covered often – UX messaging, website functionality, the distribution side.

Ray (19:33 – 20:22) – One thing I want to add about what’s different is, I think, I’ve seen this trend this year. Some would call this, overall, the trend for 2021, but specifically, 2020 kind of shaped this thesis and that is planning has to be done way early than we ever thought possible. Meaning, typically, they’d plan, not just Black Friday, I’m talking about a campaign, a product launch, whatever, a lot of pre-planning goes into it to make it successful. For example, especially Black Friday since we’re parked on this topic. For us, internally, we start a lot of conversations with brands in July, start heavy planning in August so we’re ready for that. To be honest with you, just with how things went this year, I don’t know about you Scott, but I think we need to start that conversation maybe end of spring, probably even early spring.

Scott (20:21 – 21:39) – I think, strategically, it starts happening now. You went away and did a lot of data digging and looking at cohorts and LTV and how that impacted things. If you look, and the key finding that you saw across that was, the later in the year that people were purchasing, the higher the LTV obviously was in the short time frame, with repeat purchasing across Q4. Then, how does that impact what you’re doing earlier in the year? Is your strategy earlier in the year more, ‘Okay, we want to have more front-end profit because we know we’re gonna have to wait until the end of the year when the bulk of that repeat purchasing comes?’ Obviously, depends on your business and you know, what you got going on. And then, let’s say from middle of the year until November, it’s just heavy customer acquisition, list-building, audience building, knowing that you might be breakeven or a little bit better for those 3 months in terms of front-end acquisition, new customer acquisition, but you’re gonna get your 20%, 30% repeat purchase rates from your back-end retention marketing from all that work you’ve done ahead of time.

Ray (21:39 – 23:03) – Yeah, that’s exactly it. The cohorts we’ve done on these brands, early year, very low repeat purchase rate, but the really interesting thing is, just like investing and I think me and you, we draw a lot of similarities between investing as well as how we run accounts and ecomm. The interesting thing is, just like investing, it’s not always the amount of money, it’s the amount of time in the market, a lot of times that gets you the biggest return. What’s interesting about that now is that while people who buy, let’s say Q1 so January through March, the repeat buyer rate on those people, it’s really really low. However, your multiple on that return is much higher by the time Q4 rolls around so I think that’s a nuance. Just to have an agreement with you, I think, exactly right, eComm brands, they need to look at their entire year holistically. I think month-to-month is where a lot of people go wrong, and that’s where you asked the question, what we think about is, are you in the infinite game or are you in the short-term win game? If you’re in the infinite game, you need to plan out the entire year because, if you do the cycle you talked about was, what we agreed with is, Q1 focused on cash, Q2 start ramping up, Q3 customer acquisition as hard as you freaking can because the repeat buyer rate is gonna be the highest it’s gonna be for that cycle so Q3 and Q4, then it’s gonna be all year long.

Scott (23:04 – 23:22) – I think, adding on to that, which I call part of your strategy, primarily, you wrote a really good eBook on this last year, but all year, this needs to be a part of your strategy outside of the direct response advertising that’s focused on list-building.

Ray (23:21 – 23:23) – Without a doubt.

23:23 – 28:36 – Brand-building with your back-end processes – Email & list-building, SMS marketing, Messenger marketing
Scott (23:23 – 24:00) – And we can dive into that into another podcast as to how that’s gonna shift next year with big changes coming, obviously. But let’s talk about that in terms of, what does that strategy look like during the year, and especially leading up, not just to Black Friday, but to any big sale event and how you guys utilize lists to maximize that return. This is what, we had a $2.5 million dollars in 3 hour result for one of our clients using this, and it’s all on the back of list-building. That’s where the bulk of it came from. The spend was actually minimal in the end because we’ve done all the work on the front-end.

Ray (24:01 – 25:58) – In that case study, what’s really fascinating about that one is the amount of low ad spend, you’re right, it was from the, let’s call it the compounding effect of the snowball, the snowball compounding effect. There was so much momentum of the new customer acquisition for over 10, 12 months where it just kept compounding. Again, we had a good product and there was no offer, but just a really good product to where, when it actually dropped, all these people were buying from the brand, they were primed, it was crazy. List-building, again, subtle drop tease for another podcast episode we’re gonna do on. iOS14, we’re gonna park it there for now. It’s actually, really, data acquisition and really, internally, we challenge our brands because they’re so focused on the first sale, they’re so focused on it, and the moment someone tells me that, it’s either they don’t know the eCommerce game or they don’t know the infinite game. That’s how you can tell the big difference between, some of them are in it for the long-term, or to build a big brand, and some of them are just trying to get some cash, or they want a quick x or whatever that is. What we challenge our brands is, listen, like, you need to think of yourself, one, as a data company. Not always, you sell products and services, but the most valuable thing in your business is the actual customer data and this is the big difference. What we call internally, is a customer-centric brand versus a product-centric brand. A customer-centric brand, if they have obviously a good product and people like what they do, they’re the kind of people that data becomes way more important than the sale ‘cause once you have the data, you can get them to buy as many times as you need them to hit the revenue or profitability you need them to. And that’s where, you talk about this all the time is, like, if you can build a cult-like following or community, like, that right there, you’ve almost guaranteed your success as long as you follow other best practices.

Scott (26:00 – 26:57) – Yeah, community, and we always say this, the best-performing brands, let’s go back. You see, fashion brands, some are doing between 2.5x – 4x and you see the ones that are doing 7x, 8x, 10x+ with just, like, crazy returns. And all those ones with the returns are the ones with the strongest brands. I’ll go back 3 or 4 years ago when we’re probably more, very much just performance, it’s more about the cash than the brand but, as overtime, we’ve sort of had more experience with brands and seeing the varying results and seeing how they perform. The intangibles of brand and people’s relationship and customer relationship have just become more and more important. That’s been a big learning for me over the last, probably, 4 years since we started the agency.

Ray (26:57 – 28:22) – I would agree with that and I’d love for you to challenge me but again, for some of you guys listening, and brand isn’t only design or pictures. The brand goes way beyond that. Really, I’d say, if anything, the huge crux of it is the community and I think some people that are like, I’m afraid to make myself visible to people. I tell this all the time to our brands, listen, the one unique competitive advantage people can never steal is you, so, yeah, put your face out there. Build that brand with your face, build that brand so that they get to understand and get to know you as well and the brand you envision and why you do it and what you do with the proceeds if you have a philanthropic bone in your body, whatever that is. Some of the biggest brands that we’ve seen is that, their following, they know the people who work on the business, they know what the founder stands for, and that’s not the only way to build a brand, but the ones that we’ve seen that have blown up, they built that massive community. It’s funny, our strategists, we talked about some of these brands internally, and they tell them that some of their customers have addictions to this brand. I’m almost concerned if I’m like, I’m building these purchaser addictions because some of these people are buying 10, 15, 20 times from this brand. Yeah, it’s a good product, but man, the community behind, that’s the special sauce.

Scott (28:23 – 28:36) – My wife’s always the litmus test for a lot of these brands. ‘Do you know these guys? Yeah, I’ve got half ordered of this stuff.’ Okay, they’re good. It’s always a good tester, it works. That’s awesome, some really good insights.

28:37 – 40:15 – Correctly leveraging mediums of communication to connect with consumers – Email, SMS, Messenger, flash sales, and add-to-cart ads
Scott (28:37 – 29:13) – Let’s pivot a little bit, still on the Black Friday theme, but let’s talk a little more tactical and things that our listeners can action, it doesn’t have to be for Black Friday. Our strategy across is very much the same for any product drop, sales campaign, create your own sale day, the same stuff works. What tactics did you and the team see this year that worked really, really well? If there’s anything that didn’t, let’s dive into that as well.

Ray (29:14 – 30:44) – Every campaign, whether it was a product drop, a sale, a new release, whatever, it’s the same formula. If you’re in our Facebook group, we released a whitepaper about it so you can actually get a sneak peek about that. Fundamentally, it’s very simple. How we run these, that doesn’t change, but what does change sometimes, how we flavor it. So diving, I’m not gonna go into the nitty gritty of how that formula works ‘cause if you can just download our whitepaper, we’ll walk you through that formula. What did work really well, in our mind is, I’m gonna keep going back to this. It’s building the hype and, building the hype, it’s what we said 5 minutes ago, it’s list-building. That’s always gonna be the key. And I think what we’ve noticed from previous years, which I think is gonna trend continuously for 2021, to be really honest with you, it’s that phone numbers are the most valuable piece of data you’re gonna get on a person. Doesn’t mean email and Messenger doesn’t work. It still works incredibly well, we’ve tracked conversion rates on it, but phone numbers, per actual revenue per recipient, it’s still the highest conversion rate. That was the biggest eye-awakening thing for me, and we’ve been doing email and SMS for a while, Scott, but that especially for Black Friday, the brands that went hard on it saw really big numbers, and obviously, if you can continue to work and market to those people.

Scott (30:44 – 31:06) – You need to see it right? Everyone’s got that little ding. Email, it can get lost in the inbox, you might have good open rates, 20% – 30%, you can retarget them, but I guess the issue with trying to retarget those Messenger lists now is a little bit with delays and being able to feed ads out, but the real timeline, SMS is it, right?

Ray (31:07 – 31:30) – It is. I think, for all of you guys who are fans of Messenger, nice to land, I love it. Facebook, in response to some of those problems, they released what’s called a one-time notification. You still could get that really high open rate and click-through rate, but the heyday of what it was, a year or two, it’s probably gone, but it still has massive pros and cons and we still use it for different things.

Scott (31:30 – 31:44) – It’s kind of like a gateway to getting access to other information anyway, right? Run that, build that Messenger list, and then we’re getting details from email and SMS and that’s really the entry point for the whole back-end of the funnel.

Ray (31:44 – 32:08) – It is. I think, and you’re right, and I think that’s the big thing that Messenger has on SMS and email is you can personalize it and build a flow in such a way that it’s actually a good and sometimes a fun experience for a user. We tend to find that the more you can make your Messenger flow a fun experience for Black Friday or whatever, you actually tend to get better conversion rates and better opt-in rates.

Scott (32:09 – 33:14) – Which, again, comes back to brand, right? Relationship, messaging. Not just pitching, and if we look at SMS a little bit more, I think in the past, a lot of people have viewed it as an intrusive form of marketing, but I think that really comes back to the way it’s been done, generally. It’s not been good. I’ll get SMS from companies that are like, ‘how’d you get my phone number? I haven’t heard from you ever.’ And it’s, here’s some ridiculous offer. It’s out of place, right, whereas if you use SMS from the start for building relationships first, let’s just say, from a customer perspective right? You make a purchase, okay. When I had Epoch Collective, my brand, this is what I did and the feedback has always been positive. It was step-by-step updates, where your order is at, ‘cause people want visibility on that. I’d get people messaging me, saying they really appreciate the communication, your order’s been shipped out, it’s in transit, it’s been delivered.

Ray (33:14 – 33:16) – That’s a gateway drug in and of itself.

Scott (33:16 – 33:58) – Exactly! That’s the starting point, making SMS an enjoyable experience for them. That’s the first experience, it’s positive. We’ve always pushed hard on that little thank you message, we send thank you videos, getting founders on there to do that and personalize it, but doing that via SMS as well. No pitch, no sale, just appreciation, like that gives value. That opens the door to be able to put those offers to people down the road with the intermittent value-based sort of stuff that you’re putting out there. I think it really comes back to your strategy with SMS and making sure that you’re using it to build a relationship and not as just a sales channel.

Ray (33:58 – 34:55) – Yeah, and I think that’s where, I’d say, some brands go wrong. Specifically on that, I actually, we recommend to brands that, if you’ve ever followed what we say at Right Hook for a while, we have a lot of euphemisms and phrases that mean things. One of those is, if you wouldn’t personally wanna click on that or get that SMS message, why the heck would anybody else? Why would they? Use it as a guiding principle that if you can’t, as a brand, have either enough transparency, authenticity, or fun with it, and if you can’t do that and you don’t find it that way, then they’re not going to as well. Put the customer first, put yourself in their shoes, and if you provide them value. Value isn’t always information, it can be entertainment, it can be transparency, authenticity, whatever. If you don’t give them value first, they’re gonna resent getting your text messages.

Scott (34:55 – 35:14) – Totally, yeah. 100% agree. SMS is a big one. There’s a couple of others that come to mind that work truly well I’d like to dive in to. First one, flash sales, and then, like, the add-to-cart ads in the lead-up week for audience-building. It’s so good, so good.

Ray (35:14 – 36:53) – This is a great one. We actually, the flash sale deal. What’s really interesting about it is that it actually came off the back on the launch date for Black Friday for a particular brand where there were some hang-ups, functionality wise, from Facebook and Messenger. It was almost, we used it as a resort because we need to get the revenue numbers up where we need them to go and it worked so well that it’s become a core staple. For example, we’re gonna plan now, not only for 2021 but for all sale and campaigns as well, plan for what your main thing’s gonna be, the product drop or the sale. But also have an offer 2, 3, 4, 5, 6, but then make them for 1 hour at a time where it’s valid, and have emails and SMS messages ready because what happened was, over Black Friday, when we tested for this one brand, it didn’t go so well, their initial launch. We asked ourselves, what can spike this? What can bring the excitement back to the sale? The idea was borne out of, what if we just did a one-hour sale? One hour, we’ll hit everyone again, and that thing was actually what kickstarted the sale again and ended up actually hitting the revenue we needed to. We did that for all of our brands. What’s fascinating about this is that, by doing those one-hour flash sales over the weekend, many brands actually saw an additional 30-50% increase in sales from that flash sale. So if you make the assumption that they wouldn’t have gotten that revenue from the flash sale, that’s an additional 30-50% revenue that you wouldn’t have gotten otherwise. Honestly, it blew me away. I did not expect it to work that well during that weekend.

Scott (36:53 – 37:44) – It was cool looking at those little spikes in the revenue in a couple of hours. There’s the launch, there’s the launch, that was good. That was a big one. I think, just to keep that revenue pulse during the day, you know, you’ve got your evergreen offer or evergreen for the day or the weekend or whatever it is, but you staple an offer and then you got product-specific offers and bundles and this goes out intermittently during the day. It’s just a cool thing just to keep things pulsing. You can go real time with it as well. If you’re looking at it and go, ‘We haven’t sold enough inventory of this, we wanna move some of that to clear it out,’ gives you a bit more flexibility. Let’s be, kind of, nimble with it and make decisions on the fly as to what offers we wanna do just based on inventory levels. You can sort of use it to control your inventory and push what you need to.

Ray (37:44 – 38:13) – Without a doubt. While the hype is going, to piggyback off of that hype, like you said, to push inventory that is not selling fast enough. If you have a particular size or stock that’s last season’s style, but you have momentum going your way, throw it in front of those people. What you’ll find, what we found, is that people who bought two hours ago, get this text message, ‘oh crap, this is 15 bucks and it was like 50, yeah I’ll buy that right now,’ and they’ll buy again.

Scott (38:13 – 38:32) – Going into sizes right, that’s the power of segmentation with something like Klaviyo where if you got size data getting pushed through, ‘okay, these people bought size X, we can just segment and push it off to them.’ It’s gonna have a really really good performance. So much you can do there, so much you can do.

Ray (38:32 – 39:31) – Now, to piggyback off what you said about the add-to-cart, this is actually from our Head of Media Buying, Luke, this is a fantastic strategy where, again, really try to put yourself into the psychology of the person where we notice every time, and this is in 2020, when we would do a launch, whether a sale or a campaign or product drop, that a lot of people would start adding to cart to get their cart ready, and that’s something that they natively did while they’re waiting for it. We were like, ‘that’s interesting, they’re getting their cart ready, ok…’ what if we got more people to add to cart? What could that do? The team, they made specific graphics for the sale that they would run to people like, ‘hey, get your cart ready ‘cause the sale goes live at this.’ What you had was a massive spike of people adding to cart, and for us, was causing us 50 cents or a $1 cost to get people to add to cart so you can imagine what that translates to in the conversion rate when they actually buy when the sale goes live.

Scott (39:31 – 39:48) – It’s like the perfect little micro-commitment ahead of time, isn’t it? It’s not a lead, it’s not joining a Messenger list, but you’ve got them to take that extra step to actually move towards the checkout. Psychologically, that’s just a really good little step in the process.

Ray (39:48 – 40:05) – It’s a micro-commitment mentally and, also, it probably was the reason why some of these brands sold out so quick because there’s so many more people that they did, call it the micro-commitment, the pre-work to where, when the sale went live, it was automatically applied which is important for a sale, and then they just checked out and that was it.

Scott (40:05 – 40:15) – Yeah, it’s cool, it’s cool, I really like that one. Anything else that comes to mind, that you think, that’s a big learning?

40:15 – 49:17 – What didn’t work on Black Friday? – prepare extra budget for campaigns, poor inventory prepping, lack of planning for Black Friday/Cyber Monday
Ray (40:15 – 40:43) – I think we should dive into things that didn’t work. There’s a lot of things that worked. Again, go to our group, we have a free PDF, it’ll walk you through, like, the formula, but I think what’s really important is to focus on the things that didn’t work and why so that people can avoid those mistakes. I can’t overstate this and, Scott, this is probably a nerve of yours, the planning of the inventory. That’s critical, and I think you have a really good way of thinking about it. I’d love for you to jump in there.

Scott (40:43 – 43:03) – Yeah, I mean, It’s a hard one. I think it’s always, and when we set up campaigns, I think it’s always good to have an extra 50% of your budget already set up and ready to go. Ultimately, it all comes down to capital and client, but I think it’s always better to have that extra inventory if you can afford it from what you think you’re gonna need. Obviously, focusing really heavily on the sizes and colors and best-performing SKUs. The last thing you wanna do, especially for fashion brands, and this is an issue we face across the board, not just with big sale events, but you tend to under-order in the most popular sizes. What happens then, once they sell out, you only got your more extreme sizes on the scale, conversion rate just gets slugged. People are coming and they can’t find their size already. Just making sure that you got really good depth in the stuff that sells best. You don’t wanna run out of your best-selling things. Worst case, if you’ve ordered a little bit extra inventory, you still got 2 weeks ‘til Christmas. You can still run some other sales and pushes to get rid of that inventory if you wanna clear it out. You can also run something on Boxing Day, another event, that’s always something that performs well, especially in Australia and Canada, I’m not sure how big Boxing Day is in the US. Obviously, there’s some geo things here. Ultimately, you gotta sit down with whoever you’re strategizing with and who’s giving you financial advice if you’re not doing it all yourself and really just planning out your inventory and capital going, ‘okay, this is what we wanna do.’ Then working with your media buying team and figuring out, ‘this is how much volume we wanna push at this return.’ But if we can increase that, or if we’re hitting this return, we can increase that. It isn’t easy, it’s really not an easy one to manage. You just don’t wanna get caught short with what’s working, that’s where you’re gonna get stumped.

Ray (43:04 – 43:48) – Agree. Thinking about Black Friday, that’s one of the biggest mistakes. Poor inventory prepping, whether prepping too late, or actually under-anticipating how successful your campaign was gonna be. All of this comes down to mindset where if you know your bestsellers convert really well, almost like your ride or die or go-tos, not going as hard as you need to actually hit the revenue you want for Q4. In some brands, we see that where they’re almost skittish to really invest in their confidence of how it’s gonna go. It goes so well and the recurring theme we hear every year is ‘Dang it! I should’ve went harder. I wish I would’ve went harder.’ I can’t tell you how many times I hear that.

Scott (43:48 – 45:01) – I think this is the importance of doing these events during the year as well so that you can… Let’s go back a step. This is where, especially if it’s your first Black Friday, you’re only in your first couple year of business and you haven’t done a lot of these sale events. There’s generally a period of lower return in the build-up, right? You’re building audiences, you might be breakeven for 2-3 weeks. You don’t know yet, it’s a bit of an unknown as to what’s the output gonna be on that sale event. There’s gotta be an element of faith there. And you just don’t want to be in a situation where you don’t even have enough inventory to make up for the profit that you need, that you’ve given up over those couple of weeks of build-up and list-building. I think this is why it’s important to run a couple of these events beforehand during the year just to get the strategy down. And then you’ve got an idea of what it looks like and you can go back into Black Friday much more comfortable. Understanding, okay, ‘this is the type of return we’ve done in the past. This is Black Friday. Okay, now we know that we can push it a little bit harder and more aggressive in what we’re doing.’

Ray (45:01 – 45:11) – Yeah, almost think of it as you need to test your Black Friday before Black Friday. You need to do a launch event, a campaign, exactly, yeah.

Scott (45:12 – 45:54) – Again, you’re right. It’s a mindset thing. Be confident in what you’re doing and if it’s your first Black Friday, everyone’s nervous, there were strategists with us this year and it was their first Black Friday and it’s great to watch them go through with that. Obviously, got a really big team to help with and support, everyone’s sort of all around the clock and live Zooms and helping out and jumping in and whatnot. Having that collective thought helps. When you’re maybe isolated alone as a business owner, whether you’re working in-house doing it yourself or with an agency, having that experienced voice around you or someone experienced to help you plan and build confidence.

Ray (45:53 – 46:30) – The best thing is to have a plan. If you go on a Black Friday, ‘Oh, I’m just gonna turn my sale on, do a few Instagram posts, maybe run an ad,’ it’s much better to have a plan. Otherwise you can get that plan, but that’s a big one. Another reason why people failed besides the plan and the inventory management was the things that we talk about all the time and that is a really simple offer and it’s got to be compelling. No code needed, make it compelling to where, if you ask yourself, ‘would this be compelling enough to get me to buy?’ If you can’t answer yes, well then, why the heck would anybody else?

Scott (46:30 – 46:40) – It’s crazy that that’s one that keeps coming back year after year. We’ve been saying every year and tell people every year and they come back with something that’s too complicated. You sure you wanna run this?

Ray (46:40 – 47:24) – It all boils down to wanting to separate themselves to do what some, you know, 10-figure business does like Fashion Nova, ‘ooh, I wanna do what they do.’ Well, they’re a little different, or they’re trying to separate themselves by doing something so out of the ordinary that it actually falls flat. End of the day, we’ve done this so many times, you can never go wrong with a really good discount, a buy-one-get-one free, a fixed dollar amount off, or buy this and get a free this. Those are the tried and trues and as long as it’s compelling, it probably won’t fall flat.

Scott (47:24 – 48:19) – I think about how I’m thinking during that weekend. There’s brands that I follow and things… I don’t want to spend time thinking about the offer. I don’t care, if it’s a good 30% – 50% off and it’s a product I really like and I want to buy, the easier it is, the better. Some complex, complicated offer isn’t gonna inspire me to buy it any more. I just want a good deal. I’ve already got in mind what I wanna buy, in any case, before Black Friday. I don’t think it’s the deal. The deal can push buyers away, but a good simple deal is probably gonna help them more if they haven’t seen the product up until that point. Let’s just say they get the ad, they don’t know the product or the brand on Black Friday. Simple’s gonna work easier, but work better as long as the deal’s good.

Ray (48:19 – 49:17) – Correct. You mentioned something really interesting. It is a reason why people don’t fail and, you said, you probably have in mind what you’re gonna get. There’s so much noise out there that we equate Black Friday to going to a party. Around Christmastime, how many parties are there fighting for your attention? Maybe you have 5 on the same night, you can’t go to all 5, but the one that builds up your hype and keeps your attention, that’s the one you’re gonna wanna go to. A lot of brands, where they go wrong is, they don’t do that formula we talked about where they actually build the hype and keep the hype, and two, just because they launch, a small subset of people have you as the brand they wanna buy from, but at the end of the day, you’re competing with so many other people. You gotta keep their attention and you gotta keep your product as the one they wanna reserve with the limited amount of money they have for that weekend.

49:17 – 56:51 – Other things to keep in mind come Black Friday – managing ad account spend limits, creatives, don’t rely fully on ROAS
Scott (49:17 – 49:29) – 100%. Well, is there anything else that we want to cover on Black Friday that we think is important here?

Ray (49:29 – 49:33) – Ad account spend limits, Facebook keeps changing that every year.

Scott (49:35 – 49:36) – Ad creative limits.

Ray (49:36 – 50:33) – Yeah. So, this trend’s only on Black Friday, but it’s gonna hurt people going forward is Facebook did change the number of ad creatives who can handle an account. Before a campaign or a sale period, you need to check what that is on your account as well as how many you have, especially when it comes to spend limits. It’s not just, your ad account has a cap that you can change personally. Internally, Facebook has a limit that they’re allowing you to scale up to in a given day. They saw brands where their ad accounts spend limit was fine, but because they scaled so fast, it triggered an internal flag and it stopped them. Sure enough, we were blowing up our platinum rep’s email address, you know day and night, trying to get this thing lifted. That’s just where you do your due diligence and homework and have that conversation with your rep if you have one, or if you work with an agency, with them, to make sure that if things are going well, you wanna scale fast, you need to make sure you fix that. Otherwise, you won’t be able to.

Scott (50:33 – 51:04) – Yup. On creative, look at how much creative you need. We had some crazy numbers. We saw some of the accounts, some of our creative team did 500, obviously not all original, a lot of variations and things like that, but they had 500 ready. It’s always better to have too much creative. I mean, honestly, if you find something that’s crushing on Day 1, leave it, and let it run, you don’t wanna be switching stuff off when it’s working.

Ray (51:04 – 51:06) – Number 1 rule, never touch anything that’s working.

Scott (51:07 – 51:40) – Totally. The other thing that we’ve always pushed is make sure that you’re setting budgets. I’d like to say 50% or 100% higher than what you wanted to do. So then it can get going and you got room to move ‘cause it’s a lot easier to pull your budgets back than it is to increase them during the day. That’s where you start hitting scaling issues. If you already set your campaign budgets up to be bigger than what you want, you can dial those back, you can optimize ad sets out, you can do whatever you need to do, depending on how you structured it.

Ray (51:42 – 51:49) – And that’s a mental and emotional game. Let’s say your budget’s $2,000.00. ‘Oh no, what if I have to spend $5,000.00’ It won’t.

Scott (51:49 – 51:59) And you don’t wanna be performing really well and then not be able to spend as much money as you possibly can. That’s a frustrating situation. Things are crushing and you just can’t spend enough.

Ray (51:59 – 53:05) – That’s a really good and interesting topic because on a big campaign like that, or any other campaigns throughout the year, where it’s high spend and you’ve purposefully 100% the budget you’re spending, you don’t even want to look at the ad account’s ROAS per se, you wanna look at your total sales for that day, because it’s gonna be delayed. Facebook’s delayed, attribution, you’re not gonna get all that attribution, that’s an interesting topic that we do on campaigns like that… Facebook ROAS, we look at it to optimize, but it’s not the thing, it’s actually, what’s my total sales for the day and the ad spend. We call it internally, a different term. But because, for example, doing that, we actually scale brands much harder over Black Friday by focusing on that and then just focusing on the ad account ROAS. Maybe we can do a podcast on this one. For example, we did a statistical correlation on what makes up the most change in your Shopify’s sales and it wasn’t what you expect. I’ll just tease that for here.

Scott (53:05 – 53:57) – Nice, nice! But you’re 100% right. If you, and at any point in time, you should always be looking at what your ad spend is, the overall revenue, and if that’s healthy, don’t switch stuff off. If your ad account’s saying that your 1.5x, but it’s your only channel and you’re doing 3 or 4x to your Shopify sales from your ad spend, push it harder. You’re gonna lose attribution with Facebook, that’s obviously gonna be more extreme going down the road again, something for us to dive into next. Looking in-platform, great. Looking for opportunities to optimize in there, great, but in terms of making business decisions as to what you wanna do with your ad spend and your overall marketing budget and whether something’s performing or not, you wanna make sure that you’re looking at what your overall ad spend is compared to your revenue.

Ray (53:57 – 54:03) – Exactly. Don’t look at things in silo. You need to look at the whole picture to make an informed decision.

Scott (54:03 – 54:12) – Totally, totally. Alright, anything else we wanna cover there? That’s kind of the core things that come to mind for me.

Ray (54:12 – 55:20) – Yeah, I can’t overstate preparing and having a plan and planning ahead of time. I think everything else kind of falls underneath and, if you do that right, you tend to be a success. We’ve yet to have a brand where we did those steps and we planned ahead of time and things didn’t go well and the campaign wasn’t very profitable. It hasn’t happened yet and I think that’s because, when you go through that step, you uncover a lot of things. Maybe you change a strategy, you confirm a strategy, you do the proper research that’s needed to make that happen. At the end of the day, that is the most important thing ‘cause, also if you do that planning and preparation, you probably won’t throw together a crappy offer. You probably won’t miss UX issues on your website. We’ve had some horror stories that maybe we can go into one day, but you won’t miss that because you’re prepared and you have a checklist. Maybe you consult with other people, your agency, or whoever that is. That is the most important key, especially for Black Friday since we talked about it. Man, start August, September, always.

Scott (55:20 – 56:00) – And start list-building now. Again, going back to what you’re saying, it’s all compound effects. You start doing that now and the better your performance is going on Black Friday ‘cause you’ve got a list that already knows you. You’ve built a relationship with. They’ve likely brought from you already. Get those list-building strategies moving alongside whatever your direct response is. I think that’s a critical thing in so many ways. We can dive into that again in another podcast in terms of list building strategies, there are so many ways to do it, just start thinking about incorporating that so when you get into the back-end of the year, you’ve got the audience you can own, that you can launch everything to.

Ray (56:00 – 56:05) – That’s probably your most profitable year you’re ever gonna get, from the list.

Scott (56:05 – 56:17) – Yeah, cheapest acquisition cost you’re gonna have. Alright, man, we did it! Episode 1! This is the one we look back at Episode 50 and think ‘how bad were we?’

Ray (56:17 – 56:19) – I know.

Scott (56:19 – 56:46) – All good. Thank you, everyone, for joining us. Stay tuned! If you’re not in our Growth & Greatness eCommerce group, jump on there and join. We’re always trying to put out as much content out there as possible and we’re ramping that up this year. It’s a really good group with a lot of high-level marketers. Yeah, subscribe to this podcast ‘cause there’s gonna be a lot more coming. Big changes coming this year and we’ve got a lot to cover on that front coming out too.

Ray (56:47 – 56:49) – Big guests coming too so stay tuned!

Scott (56:50 – 56:51) – Perfect, alright, guys! See you next week!

56:51 – 57:40 – Episode Outro
Scott (56:51 – 57:40) – Thanks again for tuning to this episode of the Growth & Greatness eCommerce Podcast. We hope you got a ton of value out of this episode and if you did, we’d love for you to leave us a review on your platform of choice and help us reach as many people as we can. Now, if you’re a brand founder, an eCommerce entrepreneur, or an in-house marketing manager looking to accelerate your growth this year, reach out to us at Right Hook Digital. We’re a performance branding agency and we specialize in partnering with eCommerce brands to help them hit their growth goals with maximum ROI. Now, if this sounds like a solution that you need, check us out at righthookdigital.com and schedule a call with our client partnerships team. They’d love to have a chat with you and see how we can help you grow in 2021.