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31 minutes | 12 days ago
Episode 23: Amazon: How and Why to Drive Traffic
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
34 minutes | a month ago
Episode 22: 7 Types of Customers and How to Convert Each of Them
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.
27 minutes | a month ago
Episode 21: What does YOUR data say about Cyber Week?
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.
23 minutes | 2 months ago
Episode 20: Dark Patterns
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.
24 minutes | 2 months ago
Episode 19: Is All Traffic Good Traffic?
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.
35 minutes | 3 months ago
Episode 18: Email Capture Popups
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 firstname.lastname@example.org 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 email@example.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
24 minutes | 3 months ago
Episode 17: The Halo Effect of Google Shopping
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.
24 minutes | 4 months ago
Episode 16: Discounting for Conversion Rates
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.
27 minutes | 4 months ago
Episode 15: Buy on Google and Your Brand
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.
25 minutes | 5 months ago
Episode 14: The Future of CRO
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 hav
26 minutes | 5 months ago
Episode 13: SEM Budget Forecasting
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.
30 minutes | 5 months ago
Episode 12: CRO's Role in Ecommerce Growth
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
24 minutes | 6 months ago
Episode 11: What Makes SEM Difficult to DIY Well?
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
34 minutes | 6 months ago
Episode 10: Optimizing Category Pages
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
26 minutes | 7 months ago
Episode 9: Amazon: Fight or Join?
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 fulfille
33 minutes | 7 months ago
Episode 8: Selling on Social
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 r
30 minutes | 8 months ago
Episode 7: What Makes CRO Difficult to DIY?
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
27 minutes | 8 months ago
Episode 6: PPC Automation
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
32 minutes | 9 months ago
Episode 5: Post-Purchase CRO
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 th
31 minutes | 9 months ago
Episode 4: Remarketing and Re-engaging Your Audience
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 so
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