TRANSCRIPT
This transcript was completed by an automated system, please forgive any grammatical errors.
SUMMARY KEYWORDS
retention, business, brands, acquisition, customers, black friday, clients, ltv, ads, dylan, channels, agency, acquiring, cyber monday, day, offer, email, revenue, jacob, spend
SPEAKERS
Liam Veregin, Noah Rahimzadeh, Dylan Byers, Mariah Parsons, Jacob Paduch
Noah Rahimzadeh 00:04
Hey retention pros. I'm Noah Raheem today and I lead partnerships here at Malomo. I'm super pumped to continue to chat with ecosystem experts alongside Mariah, who you all already know and love, say hi, Mariah.
Mariah Parsons 00:16
Hey, everyone, as you probably know, retention Chronicles likes to bring in some of the best retention focused brands in the Shopify ecosystem.
Noah Rahimzadeh 00:24
Well, we don't just feature brands, we also feature some great thought leaders in the Shopify ecosystem that serve brands.
Mariah Parsons 00:31
And because we always want these conversations to be fun, you'll hear us talk with our guests about what they're excited about and what's helped them get to where they are today.
Noah Rahimzadeh 00:39
We hope you'll stick around to learn and laugh with us retention Chronicles
Mariah Parsons 00:43
is sponsored by Malomo, a shipment in order tracking platform, improving the post purchase experience, be sure to subscribe and check out all of our episodes at go. malomo.com.
Noah Rahimzadeh 00:58
Awesome, awesome. All right, cool. Welcome back, everybody to another episode of retention Chronicles. Super excited for today's episode, I think it's the first time I'm recording post Black Friday, Cyber Monday. So really excited to have a top e commerce agency Applo joining us today and the co founders from that group, Jacob Dylan and Liam, thanks so much for being here, fellas. With that, I'll pass it over to you guys for quick intros. And we always like to start with with some good personal news. So one or two things that you're excited about in your personal lives along with the intro would be awesome.
Liam Veregin 01:36
Awesome. Well, yeah, thanks. No for having having us on. So yeah, one of the cofounders of alpha, my name is Liam, personal, personal life. We're based in Canada. So it's getting cold. It's getting snowy soon. So I'm looking forward to the winter weather and getting getting on the ski hill and skating and that sort of thing. So that's kind of the most exciting thing at the moment from a personal standpoint. But yeah, just a quick intro there.
Jacob Paduch 01:58
Ya know, Amara thanks again for for having us on. So Jacob, one of the co founders, as well oversee mostly the email, SMS side of things that haplogroup and just with the holidays coming up, I think it's gonna be nice to see some family, go back and visit my family and friends in Ottawa. So looking forward to that.
Dylan Byers 02:16
Yeah, and I'm Dylan, one of the cofounders of Apple group as well oversee our paid ads and growth team as a whole here at Abloh. And I'm actually looking forward to the complete opposite of Wii and I'm looking forward to better as it comes going to Barbados in a few in a few weeks. So that's, that's a little personal highlight on my end.
Noah Rahimzadeh 02:35
That sounds incredible. Dylan before you joined out, as I was telling me, I'm in and Dylan that we are sorry, Jacob, that we I've said for like four straight years that I'm never going to do another Midwestern winter. And here I am. Your five bracing from the cold again.
Liam Veregin 02:55
Gotta embrace it. Embrace the gold.
Dylan Byers 02:58
It's probably not as cold as Canada, though. So that there is worse, worse does exist.
Noah Rahimzadeh 03:04
That's 100% True. And I know that because the first time I ever went to Toronto was like, February 1 week of February. And it was it was quite a shock. Yeah, I was way I was not prepared. That's awesome. Yeah, Liam, I love skiing, too. We always do a Breckinridge trip to Colorado with people every winter and it's always a highlight of the year. Have you been to Barbados before?
Liam Veregin 03:34
I opened the Barbados before, so I know. I'm gonna love it.
Noah Rahimzadeh 03:39
Yeah, that's awesome. I have not. That sounds like a great place to escape the call.
Dylan Byers 03:46
selbourne enough so that it does it does the job. Well. Love it.
Noah Rahimzadeh 03:53
Cool. Well, with that we'll, we'll hop in love the personal insights. Since we have the three co founders, I think it's only fitting to talk a little bit about the background of Applo, the founding story and dive into sort of what the what the agency looks like today as well.
Liam Veregin 04:12
Yeah. So in terms of kind of the background of us, so we all three of us originally started contracting for E comm on the email and SMS side. So one of our actually our first clients of Apple, we started contracting for him in late 2018, I believe, and essentially over through the process of kind of getting into the weeds of working with him here and obviously other pitches from agencies and kind of understanding how they operate. One thing that we kind of realized was kind of underserved, so to speak in the agency world. Many agencies in the E commerce space focus, obviously on you know, single channel metrics and platform performance, whether it's on the ad side or the non SMS side specifically, but oftentimes, what's overlooked is obviously the impact that, you know, those those channels have on the business as a whole. And oftentimes, there's so much focus on single channel performance and single General metrics to the detriment of obviously understanding how that impacts the actual business outcomes that the business is shooting for. So one of the kind of the founding focuses, so to speak, or founding principles that that we kind of focus on as an agency in the E commerce space, is not only obviously improving in platform metrics and channel specific metrics, but more so than that is focusing on the business outcomes that the client we're working with is trying to achieve. So sometimes, obviously, that's usually a mix of top line growth or bottom line growth, to a certain degree, and obviously, our focus is helping them achieve those outcomes by obviously implementing a cohesive strategy across the board. So right now, our core focuses our acquisition and retention. So everything on the paid ads side all major social platforms, as well as search platforms, as well as email and SMS on the retention side. So from a high level standpoint, that's kind of a little bit of the founding story, obviously, as we are contracting for for our first client, let's embrace it there that I mentioned. That's kind of when we came to this realization about that, that kind of gap and that area being underserved in the agency world. So that's kind of where we decided, okay, there's obviously kind of room to kind of focus on that has as a core principle of how we service. And that's kind of how we started developing our service and serviceability. Alongside that. So yeah, from my little standpoint, it's kind of the background and what we focus on more. So we're a team of 27. At the moment, most of us are based in Canada. And again, like I mentioned, those are the acquisition retention side are kind of our core focuses at the at the moment, but we have some some services slotted to be released next year that we're going to branch off into as well. So cool.
Noah Rahimzadeh 06:33
Yeah, I think of all the agencies we've had on, we haven't had anybody sort of talk about how those two core aspects of the business acquisition and retention and and the different channels that you're sort of leveraging to see results in those different initiatives. factor into the larger business goals. So I'm curious if you have like an example of how, like, how could somebody take that into practice or think about how to how to sort of level up from, you know, just thinking about this individual metrics to them to the broader business goals? Because that sounds like it's sort of apples differentiator.
Liam Veregin 07:13
Yeah, one thing like billing can also dive into this in more detail to as he oversees more of the growth team. But one thing that often is overlooked, like many times clients, will will basically say, if you're hitting this row as an acquisition, or this, these metrics on acquisition, just scale the moon, spend as much as you want on on ads, and just continue growing. When in reality, oftentimes, that breaks the minimum net margin requirement for the business to actually reinvest in inventory and continue scaling healthily. So that kind of model breaks over time. So there's oftentimes where there's kind of a gap even on the actual business operators, and about what's been done on the acquisition side, how that relates, obviously scaling down the line in a sustainable way. And obviously, that ties into retention as well. But But Dylan can probably dive into into some more specifics there. Because it's something that he deals a lot with on the on the growth side.
Dylan Byers 07:59
Yeah, so like, a super obvious example might be like, we see we have clients asked to test this all the time. And the test basically has never not reached the same outcome. So like, for example, let's say you have a pop up on a website, and you're collecting emails and texts. In theory, if you remove the pop up, does the conversion rate on the site increase? Sometimes by a little bit, if you remove it, it depends if you have an offer, how you're presenting the offer in equally in both situations, but let's say you're optimizing for that, like let's call this I always conversion rate on website. So that's like a partially an ad KPI normally, and also it's a conversion rate optimization KPI, if you're actually trying to optimize your website for convertibility, and let's say you optimize that single metric. But in reality, let's say that impact is you've lost 80% of your inbound email list growth, well, you just optimize that KPI but the side effect is that now your email list is growing exponentially slower, and therefore is going to hurt future revenues. So it's kind of understanding that you have to have a full funnel approach and understanding okay, what levers do I actually want to pull in which leverage Should I pull to be able to drive those business outcomes I'm actually hoping to achieve instead of having everything be compartmentalized. And that's generally like whether you upload group or work with somebody else. We generally recommend working with agencies that can control both acquisition and retention. Because there's only two ways to make more money as a business either acquire customers for cheaper or make them worth more to you over the long term over the long run at different points in your journey as an E commerce business owner, there will be times where the acquisition side is easier to improve, and then there'll be times when the LTV side will be easier to improve. And if you have different groups or teams or whatever, trying to fight over what the focus shouldn't be, that just creates a giant conflict of interest in our opinion. So that's that's just one small example of probably the most common One we see. But yeah,
Jacob Paduch 10:04
yeah, and one kind of less obvious takeaway too is depending on what your like buying duration time is from first touchpoint to basically when the actual conversion takes place, if you have a product that requires quite a bit of education, it also becomes a game of kind of lead generation in some sense, where again, your KPI is not necessarily leads, per se, or cost per lead. But at the end of the day, you have a welcome series that you need to warm that audience with. And those customers that you're, you know, acquiring. So a lot of the times you're getting that extra lift from the email channels at a higher profit, or better efficiency, you could put it that way.
Liam Veregin 10:36
I'm just one thing to kind of tie it up to like, our job as an agency in this space. And the way that we operate is kind of showcasing this and explaining it to the clients we work with and why there's so much dependence on each, like paid ads that depend on email, emails, depending on paid ads. So this would be like part of our focuses, is mapping that out and explaining it because we know a lot of people that are obviously bringing on agencies, their core competency might not be these channels, and they might not understand exactly how they're related. And that's exactly why we focus on on again, going back to what I said at the beginning, implementing a holistic approach, and obviously shooting for business outcomes and explaining how all of these channels interact with each other and relate to each other when you're going about the scaling process. So yeah,
Noah Rahimzadeh 11:16
that's awesome. Yeah, Dylan, I really love that. That really easy to understand example. And then the first question that came to my mind is like, when would you think about? Like, are there any types of businesses that lend themselves more toward always have the pop up, for example, and, and Jacobs sort of gave an example of that, right? Where if they're, if the product requires more education, than sort of nurturing is more important than, you know, first stop purchase. And so that that's really, really fascinating. I'm curious, so. So one thing that sort of sticks out to me is, it seems like in a way, like at the highest level, there's a lack of transparency, when agencies report results in a way, because if you're only showing like less growth, and that was the goal, but you don't show like this also had this major hit on on conversion rate, or vice versa, then at the end of the day, you're really sort of just like telling a story that's, you know, well suited to shine you as the agency in the best light. Whereas by focusing on both acquisition and retention, you're always sort of showing like the trade offs that are made when you focus on one area first another, that's sort of my stance or my understanding of all this, would you agree? What would you what would you change about that?
Jacob Paduch 12:47
I would say, attribution is definitely important. So understanding attribution, understanding, basically, which channels are driving what but more. So understanding that there will be overlap between channels and looking at basically the business as a whole, rather than trying to, you know, aim at isolated kind of KPIs within specific channels. And then again, having a system where you can actually measure out that lifetime value and understand your different customer cohorts in context. So I'm sure Dylan can kind of offer more kaxite. But that's kind of how we would approach it.
Dylan Byers 13:20
It's it gets it gets. So you can overcomplicate these things so fast, like even as simple as like, is Google reported robots and Facebook reported row as the same? No, all of these channels have different attribution models, and you can toggle them differently, and some are even less accurate or more accurate. And then if you want to start getting, you know, fancy and start using you ATMs, or through other third party tracking tools to try and democratize, so to speak, the attribution across all these platforms to make the attribution models all the same. In doing that, you lose something like I'll give another example. So Facebook arise if you want to, if you want to look at return on adspend in a way, where you're actually trying to draw very, very direct correlations with actual business outcomes, ie revenue, your click based return on adspend metrics. So click based attribution is always going to be more accurate, view based attribution, you based attribution often inflates, and that's why people think the remarketing or think the retention marketing on ads is better than it actually is. But in reality, it's other things via email via other sales channels that are actually driving sales, and you're just picking up the user data. So that's what that's why when you're working with an agency or whether you're working with an in house employee, no matter what, no matter who your your team is driving these channels, you want to make sure you're setting KPIs firstly, at a business level. So that's normally like marketing efficiency, efficiency ratio, or full funnel row as or new customer row as some of these like very simple business metrics. Like what percentage of revenue is adspend? What percentage of new customer revenue is ad spend? And then that's how you're going to Aside most of the time in most business scenarios, how how you're going to spend, where you're going to spend, and then the in platform reporting is solely used for where or how I'm going to distribute my budget amongst these platforms. And there's, unfortunately, every single business tends to be a little bit different. Like for like, for instance, if you're a company that has a rather large purchasing window, you're often gonna pick up a lot more view attribution inside of your Facebook or Tiktok ad account as an example. Whereas if you're a product that tends to buy on first page load, you might actually be able to utilize and leverage and believe what Facebook is telling you a little bit more. So it's case by case, but totally agree in that it has to be set. I like the business level KPI.
Liam Veregin 15:46
Yeah, and and one thing to know, like, to your point about kind of, like agencies reporting on a certain channel. And obviously having cohesion amongst both like a good example that we like to give is, let's say, you're you have two separate agencies, one on email, one on ads, and you're monitoring the email agency and basically giving them KPIs on a percentage of overall revenue driven from email, let's just say it's 30%, whatever it may be, and you're spending, you know, a decent amount of money on ads, and all of a sudden, you Jack spend up tremendously on the on the acquisition side over, you know, X period of time, over x period of time, eventually, email revenue as a percentage of overall revenue is going to diminish, because you're driving in so many new customers via ads. And then as as somebody managing those two agencies, you might look at the email agency and say, hey, you know, what is going on? Why is, you know, got me down. And if that email agency doesn't understand what's been on the ad side, they might not actually know. So they might make up but not make up stuff. But they're going to look for ways to kind of answer your question, which might not be entirely true. And the simple reasons, because you obviously started spending exponentially more on ads, and obviously, vice versa, if you drops then. So everything's correlated to a certain degree, and everything needs to be looked at in that way. Because no channel is completely agnostic of the other channel. And in that example, obviously, that's paid being the primary driver of new acquisition, but obviously, same can go for organic if you have a large influx in organic traffic and things like that, as well. So
Jacob Paduch 17:06
yeah, yeah, and the reverse is true, too, right? If you drop spend, for example, you can look like a genius when you know, 50% of your revenue comes from email. But at the end of the day, you look month over month, and your actual total revenue is dropping, right? Because efficiency might be up, but you're acquiring customers much, much slower, or at least new customers. So you're basically then squeezing everything you can from your retention channels, and not growing. So it's efficient, it looks good on paper, but it's not actually growth.
Noah Rahimzadeh 17:33
Love, love that example, again. And I can I can relate in so many ways, even on the b2b side, like I think for our listeners, mostly merchants, they totally understand this problem. But even on the b2b side, for me, for example, I work with our agency partners also work with our tech partners. But then there's this other side of of my role where I work really closely with Mariah on the marketing side. And if we don't have sort of like clear swim lanes around, how do we attribute, you know, let's say applet makes, makes a recommendation that one of your clients looks at Malomo. But they come inbound from a forum after a webinar that was completely unrelated. Like, there have to be ways to identify the different touch points, and which brought that in, because at the end of the day, departments get cut, if you don't, if you can't identify the impact that you're having, you all want to work harmoniously together toward this common, much larger business goal, which I think is one app alone and you three are really, really focused. Do you think that that's unique because of the full funnel approach? Yeah.
Liam Veregin 18:39
And that point knows exactly why oftentimes, you know, if you're an agency, for example, and you're solely managing a single channel, whether it's paid acquisition or email and SMS, like oftentimes, you can get the finger pointed at you when something goes wrong, when in reality, it's more of a macro issue. It's not actually a channel agnostic issue. And then you can get an end up being cut as an agency, when in reality, it wasn't necessarily something that you you, you did, for example, going back to the example about increasing spend, and decreasing spend, and how that relates to, you know, revenue as a percentage of overall revenue. So it's, it's funny that way, but yeah,
Jacob Paduch 19:09
yeah. It's also why these conversations are so also important to have within organizations because at the end of the day, like, the entire organization structure across the marketing team, the executive team, like need to be pretty intimately familiar with these different KPIs and how these different channels interact. Because if those conversations aren't taking place, then there's confusion. There's like, you know, more conflict than there is actual like collaboration towards a common effort. Because you're looking at these as competing channels rather than one piece of a pie that's working together. Right. As Liam said, like the paid side feels the retention side, the retention side produces and drives the LTV that makes the actual you know, paid side worth it. So it's all interconnected.
Mariah Parsons 19:48
I have a quick question. I love that you brought up Jacob like the issues or the potential issues of having like different parties involved, being like conference occasional are conflicting rather than working together. So if you find like there's certain objectives that a brand can't decipher that they're like, Okay, this is our ranked priorities like top three, do you guys find your self in the spot where you're like, Okay, this is what we've seen with other use cases and bringing that to the brand to be like, This is what we think you should prioritize like, number one, number two, whatever. Like, do you find that common?
Jacob Paduch 20:26
I'd say so I don't know. I wouldn't use the word conflict necessarily. Yeah, it's definitely always positive conversations. But I would say, Yeah, there's definitely there needs to be clarity. I guess whenever these kind of conversations take place. And the KPIs to first set the KPIs, there has to be an understanding for why we're setting them the way we are. And oftentimes, that's a broader discussion with the business owner or the key stakeholders. Dylan, I don't know if there's anything you want to touch on there from like more of a broad standpoint, but that's kind of how we typically approach those.
Dylan Byers 20:54
I think it's also I think, I think if a lot of merchants are honest with themselves, a lot of the time we don't actually know what they're actually trying to achieve. Like, are some people trying to scale to 500k a month in revenue and maximize for profit? Or are you trying to become an enterprise business and go for nine figures in revenue, etc, etc. Because what you do is very different depending on where you're trying to go. And I think that as long as you have a actual end outcome that you're optimizing for, there is usually a good amount of obvious decisions that can be made in that process. So I think to answer that, as long as you actually know what you're trying to achieve, then I think it becomes fairly simple, but it always exists to some degree, like even some of our merchants that are like multi figures in revenue a year. Maybe now they're doing multi figures in DTC land and they're entering the wholesale space. How do you start allocating between wholesale and DTC? Well, that gets even more complicated, because whoever makes that decision has to understand both very, very well. So I always exist to some degree, whether it's on DTC specific super micro or it's like, I have an order for 10s of 1000s from from a potential wholesaler 10s of 1000s of units and opened how you sell all those, I have way less units on my Shopify store, and therefore my returns are going to drop because there's less opportunity for people to convert on like, it gets it gets, it gets more and more complicated. But long story short, I do believe that as long as you know what you're optimizing for, it is possible to come to
Mariah Parsons 22:27
a conclusion. Yeah, super interesting. Thank you.
Noah Rahimzadeh 22:31
I want to move on to what you guys saw around Black Friday, Cyber Monday, Super Bowl of E commerce and what we are expecting for the rest of the year. But before that, just for for our listeners who might be interested, are there like specific verticals that Applo tends to focus on or feel that you sort of have carved out a niche or even like, specific business goals that if a business is thinking about going, you know, Dylan in a couple of your examples from x to y, that you're that you're typically looking to have strategic guidance to? Or is it just ecommerce guys,
Liam Veregin 23:10
I'd say like most of we've serviced a lot of clients and do service a lot of clients with a clothing and apparel space, as well as basically what we call replenishable products, replenishable products, anything in cosmetics, supplements, you know, food and beverage, things that are consumable, whether it's ingestible, topical consumable things that you have to come back and buy to continue using. So those are two areas that we we've had a lot of experience in and do work pretty heavily in quite a few brands in the pet space as well. So those kinds of areas are places that we're pretty familiar with, in terms of kind of the size of business, and kind of the stage that where they're at where it makes sense to kind of look at working with a team like ourselves, obviously, we kind of have two different ways we service we have the growth package, which is where we come on and do paid acquisition, retention, and also kind of that macro level alignment on the the business outcome standpoint, and relaying that into what we do from from a strategy perspective. Then we also have email and SMS as a single service. on the growth side, if you're, you know, if you're doing under I'd say, 30 to 50,000 a month in revenue, it's sometimes very difficult to rationalize bringing on a team to manage all of that if you don't have outside capital or funding that you're using to fund that that process. So that would be kind of again, there's always unicorns in situations where we do an audit and we see you know, they're very early stage business, but there's a lot of potential to really scale healthily. There's always, you know, variations to that and unicorns so to speak. But that kind of area and ranges is typically where we say it's not necessarily in the best interest of the business to bring on a team to completely manage everything. Before you kind of hit that that point in revenue. as kind of a rough rough guideline, I'd say.
Dylan Byers 24:44
Yeah, and just on the on the on the other side, too, like we some of our clients during November, we're spending upwards of $100,000 a day on ads doing like multi seven figures and monthly revenue. So we have a we have a really big scope in terms of like the size of businesses, we were With like Liam said, you know, from like multi multi eight figures in annual revenue all the way down to, you know, just starting out 40 50k A month in sales and trying to become a seven figure year business. So it does vary, and we're like, the niche of the e commerce Store doesn't really matter too much to us. But I do think that people like to work with agencies who have worked in similar niches. And yeah, to Liam's point, like you said, clothing and the replenishable is have totally been a consistent one for us. Cool,
Noah Rahimzadeh 25:32
that's really helpful. And I, I, I am going to jump to Black Friday. be remiss if I didn't ask. There's obviously this trend of you know, I've seen it a ton lately, retention is the new growth strategy or retention is the new acquisition, take your pick. When clients come to you, or when you go to them, you've identified an area where you can help. Are you starting to see that trend? Are clients starting to be more sophisticated when it comes to retention and maybe even be like letting acquisition fall to the wayside? Or do you still see this heavy skew toward acquisition and retention is still the area that that tends to need focus,
Dylan Byers 26:12
I think, I think it really just depends on the situation of the business. Like we have some clients who just have bad LTV comparatively to other clients, because they sell things that don't lend themselves to being purchased again. And if they want to go out and try and improve LTV, they have to start selling skews with high affinity meaning skews that people who are likely to buy after buying their existing skews, or try and find skews that just naturally can sell with higher lifetime value. But in some cases, it absolutely can be a lever for growth. And this is another example of getting like KPIs wrong and such. But one of the most common mistakes we'll see made is Pete, let's say a brand is doing $5 million a year in sales a few years ago, they were doing $2 million a year in sales, and they still have the exact same new customer row as KPI they had two or three years ago. And maybe that's okay. But if you're a brand that's amassed a really, you know, active customer base, you may be able to financially look at your business and say, okay, the economics of my business is telling me that I have this LTV. Now I have years of data, it's it's quite good. Maybe I'm willing to budge a little bit on this super strict acquisition target, because to some degree, while not always to true, generally, as you spend more money, your cost of acquisition go up and normally occurs to some degree, how fast and how much depends on what you're selling, what you're selling, etc. But in certain cases, absolutely. Brands are starting more looking at that that data, not to necessarily throw acquisition to the wayside, but more so to look at acquisition differently and maybe come to a conclusion that you can stomach less favorable acquisition costs.
Liam Veregin 27:50
Yes. I think a good way to put it to like to Dylan's point is you look at acquisition as what it really is acquisition like it's an acquisition vehicle, you don't want to look at it as like, Oh, I'm this is my focus to drive profit is acquisition like that's what retention there is, therefore, to support acquisition. And sometimes people will look at acquisition as a profit driver. While it can be for some businesses, for most businesses, there's not going to be a significant margin on the acquisition side. So it really needs to be looked at as the acquisition vessel. And retention is the profit vehicle for sure.
Jacob Paduch 28:19
Yeah, and in the business owner shoes, it also just depends what your cash requirements are, what your financial requirements are, as well, like how quickly or I'm guess how much time can you stomach, for example, to actually realize that LTV post acquisition, that's that's another metric that often gets overlooked. Because we can all sit here and say, you know, 12 month LTV looks fantastic. But, you know, if you need the cash back in 60 days, or 90 days, well, then that's problematic, right. And that's going to dictate what you can actually, you know, how hard you can push on the paid side. So, you know, when when we're looking broadly at KPIs for, you know, most of the brands we're working with, we're looking at 30 days, 60 days, 90 days LTV and what that increase looks like so that we can then, you know, plan CAC accordingly, because that will also have downstream impacts on you know, cash management, you know, inventory planning all of that stuff.
Dylan Byers 29:06
Yeah, like most, most commonly, if you're not making your money back on a customer on until like, months 678-910-1112. You either have to have a lot of cash yourself as a business, willingness to take on debt and or willingness to take on outside the capital. But for a lot of the businesses, those three things are not sure. So like Jacob said, really narrowing down that payback window to 3060 90 days. Normally, that's a window that allows a little is a little bit more manageable, because that also just directly correlates with how fast you can scale because one of the things that gets overlooked most commonly is like what net margin at different amounts of month over month growth rate does a brand actually need to continue financing that growth rate. And if you're waiting three to three to four months after acquiring a customer just to make any money back. In that situation, you're not really having much net margin at all until maybe eight months seven, eight or nine or But arbitrary examples, right? So it's retention is hugely important. And it's I think it's been overlooked by a lot of brands for a little bit too long now. But at the end of the day, it's it's easy to look at the data. Sometimes it was split off, I'll recoup my investment in six, seven months. But in that process, you sometimes forget, but you actually do need that cash to reinvest into growth sooner than that.
Noah Rahimzadeh 30:24
Yeah, the we like to say that, you know, there really is no point in acquiring customer if you don't have a plan to get them to buy again. So, you know, yeah, the only thing more important than the first purchase is the second.
Liam Veregin 30:41
Like ads don't work without retention, supporting any profit, sporting, and so on.
Noah Rahimzadeh 30:47
And I think that the example that you guys just gave really clearly shows like the value in having an agency or you know, an internal department that is coordinating across both of those efforts, because without that, I can see how confliction can occur. Let's move on to Black Friday. We're recording on December 6, so about a week after Cyber Monday. curious what you guys saw in terms of trends, what worked, what didn't Did anything surprise you. And we can go from there.
Dylan Byers 31:24
I think that for like, I will speak for our growth clients like 90% plus of our growth, clients had record months, record profits, etc. And I think if you like talk to people in the industry as a whole, that also is quite true. A lot of people had success this year, it seemed like going into it, a lot of people were a little bit concerned, given the state of the economy, whether that's strong, not strong, and we can all speculate on that all day will last, but at least for the time being things continue to look quite good. One of the biggest things that people I guess don't realize on Black Friday, is that like Black Friday for like, you should look at every single business should look at their own data. Because when you look at all these, like comparable stats to other whether it's same same company, sorry, same industry, different company, or just a large data set of the company as a whole, don't get me wrong, there is some value in that. But there are many brands who do not have their best real as of the year on Black Friday. In fact, there's some brands who have like very bad row as of the year on Black Friday, that's namely going to be like things that are less giftable, maybe if you were selling medical supplies or like food for yourself, you're probably not going to gift you're probably not going to buy medical supplies as a gift on Black Friday to then get them during the holiday season. So you know, there's some there's some there's some there's some situations where this is not true. But for many, many brands, not only is Black Friday going to be the best return on adspend day, but you're also going to see the least amount of regression in your return on adspend. on Black Friday, and this remain true this year, we have some we had some clients who on Thursday, they've been stealing a Black Friday campaign for a week, maybe two weeks, maybe three weeks depends when each brand started. And then on the Thursday, they're looking at their profits for the last X X number of weeks. And they're just like, Let's do X ad spend last 5x ad spend and let's 6x ad spend doing that does present some risk. And don't get me wrong. But in situations like that, if you've had a successful beat up, you might be willing to take a little bit more excess risk during that Black Friday period. And from basically everyone realize that knock it works row has actually maintained as scale happened incredibly aggressively. And that's partially because there's more buyers of your product that day, most of the time than any other day of the year. But you also get your an increased target market normally, because people are in that gifting mindset. So your your your ads your offers now also match with other people who may be gifting for your target audience. So you're to some degree, your total addressable market on some of these paid social platforms technically increases. So overall, I'm really successful on our end, I'm really happy with how it blends. And I'd say the same trend occurred this year as years prior Black Friday is the one day of the year one of one of a few days of the year where it really really makes sense and is off of often logical to just put the foot on the gas pedal and go super aggressive. Yeah.
Noah Rahimzadeh 34:24
In terms of Black Friday, verse Cyber Monday, for us, specifically, calm space. Do you see any are there any differences in terms of strategies that you recommend brands employee on the different days? Yeah, so
Dylan Byers 34:41
I think I can go many ways. We're not a huge fan of turning off Black Friday ads on Cyber Monday, mostly because you do run with some risk with Facebook. I use Facebook as an example because that's where most brands are still spending the bulk of their advertising dollars. to actually stay meta, so will often run Cyber Monday ads alongside Black Friday. That way in doing that process, if the Black Friday ads continue to stick to be the top performers, they will get the bulk of the spend. And there's a small chance sometimes when you try and live ads, they get disapproved, or they get stuck in processing, these things do happen sometimes. And on those days, when you're trying to push a lot of budget behind the platforms, you want to make sure that your ads are actually live. There are other workarounds to try to get a get it approved ahead of time, but they also have their drawbacks. So between Black Friday and Cyber Monday, one of the biggest adjustments we can make to brands is basically keeping your Black Friday ads on and launching your cyber monday ads alongside them. And then also, on email and SMS. Specifically, depending on how long your sale has been, as well as what your offer has been, it sometimes makes sense to start trying to throw in a few different offers on Cyber Monday slash cyber week just to keep your email list engaged. Because let's say you're running a very simple offer, that's to the two weeks leading up to Black Friday, call 30% off because there's only so many times you can tell people that is 30% off before your your click rates, etc start to drop on email and SMS and maybe Jacob wants to speak to this. But we normally suggest keeping the same offer live on the paid acquisition side for more safety and how you're scaling spend. But again, it's brand new, brand dependent, as always, but really suggest consistency on the ad side. And then Jacob will pass it off to you for any comments on the email and SMS side for approaching Cyber
Jacob Paduch 36:38
Monday. And yeah, I think it also to Dylan's point depends like how long you've been running it to begin with, right? If you've started at the beginning of November, and you've been running it, the whole month, like that owned audience is gonna get a little bit tired of seeing that same offer over and over potentially, it depends how you're segmenting how often you're sending. But generally speaking, it is good to have some sort of mix in there where it's either new product features, new collections highlighting fault, like just speaking from like a fashion apparel brand. But you know, on the consumable side, maybe you're doing bundles, maybe you're doing some sort of holiday highlights, maybe you're taking a gifting angle, you're still highlighting your hero offer, it's still the same message, you're still trying to drive people back to maybe the same PDPs of the same, like collections, pages, etc. But at the end of the day, you just want to make sure that that content still engaging and that you're you're actually you know spicing it up a little bit. So it's not just the same creative over and over to that same audience. You're also acquiring customers along the way. So there's new subscribers that are joining through the pop up and the funnel there. So having some sort of strategy that's adjusted, whether it be you know, updating your recovery flows, like abandoned cart, browse abandonment, even, you know, making sure your welcome series is tailored to the offer you're running. That's something that we've seen work really well with our brands, just because, again, making sure the offer is consistent from first touch point on ads to pop up to what they're being presented, you know, all the way across the funnel has been huge. So that consistency does create a lot of trust, it does definitely improve the metrics, when it comes to you know what those customers are being shown. And again, also for brands that are conscious of margin, if you're stacking coupons on top of like a site wide discount, or you're getting like conflicting coupons, for example, in emails like that, from a technical standpoint can get kind of messy and just create a lot of confusion for CES or just for customers in general, right. And that can create friction for free conversion. So those are some of the things we've seen work well on email and to the Cyber Monday point. One thing is depending how you're excluding purchasers, and you know what your affinity between products is maybe reintroducing some of the purchases that were acquired in the early stages of that sale, into, for example, the Cyber Monday messaging and kind of repackaging that offers a new one and maybe taking a gifting angle, or maybe trying different creative for those new customers acquired during that specific period could be a good way to, again, get that second purchase faster than you normally would. Because you have a really, you know, strong offer that you're running to a fairly high intense, you know, purchaser base one that's probably still excited about the fact that they just ordered or they just received the product. So again, trying to like leverage those, you know, timeframes and post purchase, to really drive LTV during this time of year would be would be the recommendations. And then also for brands running like loyalty programs, give, give get offers, you know, referral stuff, that's another great way to drive, you know, new customers through these retention files.
Noah Rahimzadeh 39:20
I love that theme of you know, leveraging retention for for acquisition. I think one of the biggest opportunities for brands these days as you have this, you know, normally Black Friday, Cyber Monday is the biggest influx of new customers that a brand sees all year. And I know you just mentioned one or two ideas, but what are some other strategies or ideas that that you would share with brands to make sure that they're putting their best foot forward and not just acquiring all these new customers but actually retaining them because like, we know, if you're just getting them for that one time purchase, you're probably losing money as a brand. So super important that you keep it Many of those new customers as you as you can, and I, and just real quick, I think Shopify had a had an article maybe last year or two years ago that spent like 60%, like ACV for sorry, not ACV. LTV for new customers acquired during Black Friday, Cyber Monday is typically down around 60% versus the average for their brands. So super, super important that that branch retain these customers, what can they do to do that?
Dylan Byers 40:33
I'll answer this partially, then I'll hand it over to Jacob as he might have some specific email SMS stuff. But one of the biggest ways mentioned earlier like focusing on the second case, one thing that we encourage brand owners to do, especially when they have a year or two of data at minimum, is actually try and set month to month, like month to month CPA targets on paid acquisition. So for example, October is normally a relatively painful month for most ecommerce brands. But if you look at October to that, if you look at the 3060 day LTV for the October cohort for many stores, this is going to have the highest success rate of getting a second purchase at any month. So it's like product condo October one of the worst acquisition months, because the con pro is that so many people come back. That's one way to kind of set yourself up well, for that, that that period of bfcm itself. So we always we always recommend kind of taking a step back and try to look at things in a slightly bigger timeframe for the month of October for most brands, in terms of how we're looking at, like getting bfcm purchasers to come back and buy in December, the honest truth is you probably in many cases, won't be able to actually get that LTV up to what it is for some of the other months of the year just because of the nature of the customers. But in terms of doing your best to do it, I think it actually comes down to how you specifically take that cohort of customers and market to them in December. And Jacob will probably have much more beneficial logical things to say to me on that.
Jacob Paduch 42:08
Well, I think Dylan brings up an important point, which is also that this is something we've seen true with brands going to year over year as well. A lot of like your q4. And say revenue is also baked in what you do in q3 and the customers you acquire in that time. So from a retention standpoint, the brands that we see that have kind of the most buffer or the most room to actually scale in November are those who have done the work in previous months acquiring customers to then be able to leverage that returning customer revenue to you know, kind of push it on the paid side more than they you know, what if they didn't have that, you know, expected revenue coming from, you know, a large email list, or SMS list for that matter, right. So, I would say in terms of strategies for these to retain these, these customers, I would say that, you know, the obvious ones could be something like VIP offers post purchase offers new products, you know, being able to test new products during a time when you have new customers recently acquired or acquiring new customers, just again to you know, to test products that lend themselves that lifetime value that Dylan was was mentioning. But then also, if you're running other sorts of programs that are inherently like retention programs, whether it be the referral programs, whether it be you know, loyalty programs, being able to kind of leverage, you know, those during a time when you have a lot of new customers acquired. And also, you know, on the print side, for example, if you are a brand that's leveraging points program or something when customers are out of, you know, spending money after the holidays, or after a really busy weekend of online shopping, and they've accrued a lot of points, maybe leverage those points into, you know, steep discounts that they can then, you know, essentially turn into actual conversions and actual products sold on your on your site. So that is another way to kind of leverage customers that have kind of built up that sort of store credit with you. But then, in terms of other offers, I would say product strategy is probably the biggest thing that you need to have figured out. And that's not to say that every product launch is a certainty. It's just that testing products over the long run is kind of the best way to continue seeing what actually drives lifetime value for your brand. And what that, you know, ideal offers. strategy looks like over you know, multiple purchases, versus just looking at the one.
Liam Veregin 44:21
Yep. And also to add on to a deal and Jacob said like, some of the clients that perform the best of our of our roster during Black Friday, Cyber Monday like don't don't really do too. We're the ones that were fairly aggressive leading up to that period of time. And obviously, going back to again, how we focus on on on synchronicity between acquisition and retention and outlining that journey outlining how they relate to each other, being able to showcase to clients. Why being aggressive beforehand, prior to Black Friday, Cyber Monday prior to November is going to be so beneficial for them to spend even more and reap more rewards out of Black Friday. Cyber Monday is something that we focus heavily on and again like I said the ones that had the most success during this period of time, were oftentimes the ones that were most aggressive leading up to it as well. So it all ties all ties together. And that's the benefit of being able to be aggressive beforehand as well.
Jacob Paduch 45:11
Like one interesting thing that we've seen too, and this isn't necessarily true for every single brand, but we've seen it true for many, the customer cohorts that actually are the most valuable when you look at them from like, month of month when they were acquired to, you know, how much they're worth after 90 days, for example, are typically those August, September and October cohorts. So yes, to Dylan's point, you might have a more difficult time acquiring customers during the October period. But then again, you do have that LTV increase that takes place when they come back to purchase during you know, probably one of your best offer seasons and during kind of like this cultural buying moment. So again, acquiring those customers kind of early does definitely pay in dividends later. And you kinda have to look at customer acquisition as an investment into the future as well, assuming that you do have a roadmap to LTV, of course. And those strategies are, you know, kind of baked up?
Noah Rahimzadeh 46:03
Awesome. I'm curious. Well, we're, we're recording a few other podcasts. This we actually have another one today. This week and next. So I'm curious if that theme of like, actually leveraging Black Friday, Cyber Monday for, you know, repeat purchases, as well as something that comes through. But I have a feeling that it well as much just because of your dedicated focus to both acquisition and retention and how they sort of play off one another. Before we move on to the to the last thing here, MRI, any questions or Applo? Team, anything that we didn't get to that you wanted to talk about? I
Liam Veregin 46:42
think we covered covered some good stuff so far.
Mariah Parsons 46:46
Yeah, this has been great, like super interesting. I love that you posed the question now about like, Cyber Monday versus Black Friday, Cyber Monday, because I think it's really easy. Obviously, we group them together a lot. And then also, the point about, like, the most valuable customers coming back is super interesting.
Liam Veregin 47:06
There's so much value in looking at like a yearly cycle and looking at what cohorts of customers are most valuable to you. And then spending against that to acquire customers during that period of time, the following year, there's tremendous value in that. And that's something that a lot of brands, I think, often overlook, because they don't necessarily look at the historical data in context to what's what's upcoming, and then plan accordingly based off that. So yeah, definitely very important to focus on that.
Noah Rahimzadeh 47:31
Awesome. Okay, real quick, we always like to wrap up with one thing that's helped our guests throughout their career and sort of help them get to where they are today. I think what's really interesting about you guys, is we haven't had three co founders on before, so take it wherever you want. But I'm curious if there's any advice you have for like working, working well as a as a unit as three co founders, but not to pitch in holy? Yeah. So
Liam Veregin 48:00
I guess generally speaking, like us three operating together, I think we all have three, we have different strong suits. And we play to that. And we have kind of clear responsibilities when it comes to what we focus on. So from a like a very simplistic view, that's one thing that I think has helped us operate well together. And obviously, as this helped us succeed well, so far in what we're doing, and provide good value to the clients that we're servicing as well, in terms of kind of recommendations for E commerce merchants as well. And we kind of talked about this beforehand. And Dylan has a good good point to to jump into there. But it's definitely more so on the financial side of operating and running an E commerce business. I think it's something that, again, is often neglected. And not there's not as much focus put on that piece as there should be. So Duncan can probably touch on that. And I'll probably be good, good little bow tie up the conversation, I think. Yeah,
Dylan Byers 48:52
I'd say one of the biggest, for most of the for most of the clients we've worked with who have had like outsized returns on their eventual business outcome, they're optimizing for mainly meaning growth. They learned very quickly that they have to execute really well on understanding like basic economics of their business. If you're if you're going to go and try and do $50 million in sales one year, and you have to buy the inventory for that, like how you actually plan that, while you're also spending millions and millions of dollars on ads is it gets relatively complicated. And it only gets more complicated as you get bigger and bigger. Like how good are you at forecasting because if you buy too much of a certain SKU or a certain collection, and you just have all your liquidity tied up in inventory that doesn't want to move, how do you actually deal with that? So having strategies to actually move inventory that doesn't frequently move, whether that's doing a warehouse blown sale, a lot of our clients do that whenever they over buy certain categories, understanding on different growth rates, what net margin you need to actually sustain that growth. And then whenever you realize So you're growing so fast, like, even if you're going with like, let's say 15% net margins, and you're growing like a crazy percentage rate month over month, quarter over quarter year over year, that may not be enough. So it's like, well, we could grow slower, we could try and be more profitable. Or maybe the path of least resistance is just going back and negotiating payment terms with our suppliers. Like, there's so many ways you can try and improve things if you start to get creative, but it's about knowing when and what things to actually focus on. So when I'd say our biggest our biggest recommendation in emergencies, or other agencies working with merchants, is make sure you really know your numbers, because that's one of the things that will allow you to actually scale the fastest and not run into bottlenecks, be it with inventory, be it with cash on hand, to finance inventory, adspend, etc.
Liam Veregin 50:48
Yeah, and one. One other thing I'll add, and making making very clear as well, like the reason that we've had great success with with the clients that we serve as this year and for Black Friday, Cyber Monday is largely is mainly due to our team, like we have an incredible team that understands the affinity and the relationship between acquisition and retention, understands the proper way to position copy and products from a design and copywriting standpoint when creating the material that we that we output. So it really goes back to that as well. Like we all have a very good understanding of what needs to be done to scale brands within the E commerce space. And again, the correlation between all the channels that we manage, that's a huge, huge, huge factor, the main factor.
Noah Rahimzadeh 51:28
Jacob anything to add,
Jacob Paduch 51:29
locally. So said I think honestly, the biggest wind in our backs has been the team. Frankly, I think we do what we can on the team to kind of assist and help and make sure that everyone kind of has the, you know, the tools they need to do the best job possible for the clients. But at the end of the day, the team has been amazing. So I can't speak more highly of the work being done. It's 27 People now, which is crazy to kind of say it's definitely been a lot of growth, just even personally speaking. So I think that's speaking for all three of us, the team has definitely been the biggest wind in our sails here.
Noah Rahimzadeh 52:05
And it certainly shows in the results. Encourage the listeners to check out the apple Group website and check out some of the awesome case studies there.
Liam Veregin 52:13
It's got it's getting revamped right now in about a month or so. So it's gonna look a lot better. And we won't we won't shy away from saying there's work to be done on the website. But yeah, thank you.
Noah Rahimzadeh 52:23
Awesome. Well, thanks so much, guys. It was it was really cool having you on just after the holiday. And I know that it'll be really valuable for our listeners. So we appreciate it.
Liam Veregin 52:32
No, thank you. No, thank you Mariah for having us on. It's been it's been great.
Jacob Paduch 52:36
Thank you guys.