- Chase Clymer
- Co-Founder of Electric Eye Agency
- Traction by Gino Wickman
- Profit First
- Don’t make me think
- 3 Main KPIs
- Paid Media
- Don’t put all your eggs in the paid basket
- Keep the current system going
- Delegate content
- Conversion Rate
- Check mobile vs desktop
- Focus on UX
- Average Order Value
- Post Purchase Upsells
- Pre Purchase Upsells
- Bonus – Customer Lifetime Value
- Need 10k users per month to start to optimize conversion rate optimization
- Klaviyo or Drip
- Find most engaged subscribers and ask 3 questions
- Why do you buy our product?
- What could we do better?
- What do we do good/bad?
- Google Analytics Annotate
- Focus on one project at a time
Chase Clymer is the Co-founder of Electric Eye, an agency that increases sales for eCommerce brands. Chase is also the host Honest Ecommerce, a weekly podcast, community & educational resource providing online store owners with honest, actionable advice to increase their sales and grow their business.
In this episode of the business. E-Commerce I talked with chase climber about the three KPIs to focus on to grow your eCommerce business. This is a business of eCommerce episode one 31.
Welcome to the business of eCommerce. The show that helps eCommerce retailers start launch and grow their eCommerce business. I’m your host, Chuck [inaudible] I’m here today with chase climber. Chase is a cofounder of electric eye, an agency that increases sales for eCommerce brands. Chase also hosts honesty, commerce, a weekly podcast, community and educational resource providing online stores owners with honest, actionable advice to increase their sales and grow their business. I asked Jason on the show today to talk about the three KPIs that you should focus on to grow your eCommerce business. So, Hey chase. How are you doing today?
You know, doing fantastic other than the sump pump exploding. I would talk to that a little bit. Yeah.
Yeah. You’re a landlord as well, right on the side.
Yeah. And today I learned some pumps can’t explode, but we got, we got it. We got it sorted. And you know, I was on time for the podcast. So that’s all that matters.
Good to hear. Well, I appreciate you still making us very good. So one thing is I’d love the topic on what to focus on. Cause I feel like one of the things that happened right, is when you kind of early on, you start kind of growing and you’re doing all sorts of different things in the business. But as you start getting a little traction and as, or to start coming in and you start getting customer support, all these different things start happening, your focus gets very diverted very quickly, right? There’s you come, right? You’re coming here today and there’s one of a hundred different things you can do. And they first I think the expression is when you knew you knew new businesses die of starvation. And then as you get running, you kind of, as soon as it takes over, you dive into inner Justin, Justin, basically too much, right?
We’re going to have too many things to deal with. Now you can focus on marketing and customer service, your funnels, like there’s just so many different things. And the question of what you should be focusing on at any given day is something I think a lot of people struggle with or just people. The other side of the coin, right? Is they don’t struggle what they used to ignore it. Just go about their day and hope for the best and hope that, you know, they use our emails, basically their to do lists, which I don’t think is the right strategy.
No, it’s not a great strategy. So you mentioned a keyword there which has traction, and I’m going to shout out to Gino Wickman. Traction is an amazing book and I highly recommend everyone reading it. It’s a great concept. We use it within our agency to run our business and it’s essentially like a framework to approach problems and how to kind of operate your business. It’s a fantastic, fantastic you know, starting point to understand like how to actually run a business, which is where a lot of people fail because you’re right, like a running by like your inbox. If everything’s important, if like the latest thing that came up is the most important thing. You’re not worried about focusing on growing your business, growing your customer base, becoming a better, you know, creating a better product. Like all those things are on the back burner now because it’s, whatever the latest fire is to put out is what you’re focusing on, which is a recipe for disaster.
Yeah. Attraction is a great book. I’m actually rereading right now for like the fourth time. It’s one of those books that as you kind of progress in your entrepreneurial career, let’s say you get different things each time to read it. So like, as you move through different stage, you can re you can reread the exact same book and that’s one of them that you reread it. And all of a sudden you, like, I don’t remember any of these parts and it’s told differently applicable each time your readers as you kind of move. So it’s almost like a yearly read. You have to do it, which is interesting. So I love, I’ll definitely link to that one on the show notes.
Yeah, absolutely. And then there’s a, if that one’s a little more advanced for you, Mike McCalla wits a profit first is like his major book that everyone should read, but he has another book that he wrote. That’s essentially about like it’s essentially a scaled back version of traction and I’m actually trying to look it up right now. Because of course my brain works faster than my memory. So I’ll bring that outbreak. I’ll get back to that in a second, but yeah, so essentially the way that you want it, like once you kind of hit that initial traction as an eCommerce business, and with that initial traction, I would say is like, you’re getting organic sales. Like you pretty much have proven your product market fit.
Speaker 4 (04:33):
That’s like the inflection point where it’s now, it’s probably not a hobby anymore. This is moving towards becoming a business. And you need to have a plan to kind of like focus on
Making the most of, kind of what you have to offer. So once brands kind of get to that point, we kind of point them to look at like three specific KPIs and we can kind of get into that more here in a minute. I did find the book, the book is called clockwork and that’s like a, that’s like a it’s the same, it’s the same thing. It just shows you how to run a business the right way. And to distill that book down into like two sentences, it’s essentially like make a list of what you’re going to do for the quarter and only focus on that and then ignore everything else. Which is a big mindset shift that I don’t think a lot of people can make overnight, but it works.
Yeah. I think that’s the thing, right? That you, you deciding upfront what to focus on is kind of the first mindset shift on you have to sit there and say, here’s my goals for the year. Well, attraction actually mentioned as well, right? Here’s my goals for three year, one year, one quarter, and you keep zooming. So you start out and use the zoom down and then how do we get from that? What’s that three year vision. And what do we do today to move us a little further along?
Yep, absolutely. So once you read that book, I guess that’s the first thing I tell everyone to do. If you, if you don’t have a plan on how to run your business, do that first and then anyways, so once you, once you kind of get to that point, you got your initial traction. You’re, you’re making some organic sales, you know, you’re, it’s starting to become a real thing. So at this point, I’m assuming you already have your eCommerce store, you know, figured out you’re making sales, you’re shipping products, like all that basic stuff is done. And now you’re like, okay, I want to grow this business. How do I grow this business? Cool thing about e-commerce is it comes down to three key numbers essentially, or three key, key KPIs, key performance factors. And the magic of it is when you multiply them all together, you’re going to roughly get your average order, like gross for whatever the timeframe is that you’re looking at.
So what I’m talking about here is you’ve got your traffic. So like how many people are visiting your website, you’ve got your conversion rate, how many people that visit are actually buying something. And then you got your average order value, which, you know, is the average of all the orders that are made during that particular timeframe. So just with those three numbers, like those are what can make and break an eCommerce business. You know, people will argue like cost of goods, lifetime value, all that stuff. Those are cool. And they’re very, very useful later on in your journey. But for right now, if you’re talking about just like trying to get to the next level and kind of scaling your business up, I would focus on traffic conversion rate and your average order value.
So when you say you’d focus on those three KPIs, you could look at them first from the top level, right? Like what’s the business doing for so easy example conversion rate, right? Like what’s a blended conversion rate, or do you start looking at a per channel per funnel, that sort of thing, because your conversion rate based on your Instagram ads is very different than your conversion rates, just organic, for example, or for your newsletter, especially.
Oh yeah, absolutely. I mean, it’s the conversion rate on these specific channels is vastly different and that I think would be a further step. I think some people don’t realize how terrible their websites are to begin with. You can like an easy one to do. You just do this in the back end of Shopify, as you can look at the difference between your mobile conversion rate and your desktop conversion rate. And if they’re like off by more than say, 20%, there’s like something drastically wrong with your mobile experience, which I find probably a nine out of 10 websites that like, I just start poking around and getting some top level numbers. So like when people buy themes out there on the marketplace or they, you know, buy a custom site or whatever, a store being mobile friendly or, you know, or being responsive is 1000% different than it being optimized for mobile.
And that is like a world of difference on e-commerce. You’re talking about like, essentially, like people are coming to your website and they want to buy something. There’s kind of a flow that just the Amazons and the Walmarts have kind of taught the world of how things work. You’ve got the homepage, you’ve got the, the collection page or category page. However you want to say it, you got your product display page, and then you’re like moving into the cart. So like, yeah, your cart page. And then you just do your checkout spun stuff from there. But those other P like those first parts, you can really like affect how that works. And if you’re not actually thinking about how that experience happens on your phone, but hell just use, use it on your own phone and be like, this doesn’t make any sense actually making all the pertinent data appear within kind of the viewport or like inside the screen size you know, getting rid of stuff that doesn’t need to be there getting rid of distractions and mitigating risks, like putting your free shipping information in there, just like helping people to answer their questions within like the mobile experience that will raise the average order value.
Now, sorry, that will raise the conversion rate across all of the channels, not just like on the mobile channel, because say your newsletter goes out, it’s gonna hit someone’s iPhone. They’re going to click the link. They’re going to be on mobile now, but from that newsletter. So it’s actually going to help on that front or say your Instagram ads. That’s obviously on mobile. It’s gonna bring them back to the phone. So focusing on the user experience is key to raising your conversion value or conversion rate.
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Got it. Yeah. I feel like some people still aren’t real. Some people will do this like Ram tests on the desktop and don’t realize your mobile. It’s one of the things now that I was at the beach the other day, and I was sitting there on my cooler broke well, is the beach. I said, all right, you need a new cool for this weekend. Literally just popped in my phone, went to REI and within seconds, click, click, click. I bought the exact same course. I knew what I was getting shipped it and it was done. So that was the easiest conversion anyone’s ever made, where I just literally looked down at the model and just hit, buy, just reboot, repurchase the exact same core. And if there was any sort of obstacles in my way, I would have just hopped on Amazon or different sporting goods or whatever it was. I just happened to, I think of that first, I think people underestimate how E how like low hanging fruit that is. And you can just get very simple, easy little conversions that way.
I think people underestimate how lazy their customers are, which isn’t a bad thing. You know, they have things to do. They have families, they have obligations, they have stuff that is going on where any friction that they experienced in that journey is usually the best excuse for them to just not buy from you.
Yeah. And I get, and the thing is if, when you’re in your mobile, that’s usually, that’s usually the time when you like give laziest. If you’re not even, you’re just kind of going in your phone and you’re like, I want that. And you just buy right there. That’s where you want to be the most seamless, easy process, right? Because you’re sitting there, you’re at the beach, you’re not opening 10 different tabs. And you know, you’re not, I’m shopping around on price, just at the beach. You’re on this ice, just close a sale. Just go, just make the experience easy. Cause that’s what people in the mobile want.
Yeah. And like, I am, I have this whole theory, you know, which I should probably figure out how to vet this theory. But so people are like, Oh, your conversion rates are always going to be lower on mobile. And I was like, I don’t think that’s real. I was like, I think it’s historically lower on all these things. Cause people aren’t putting the time and to making their mobile experience as great as it can be. I think when the world starts to shift in optimizing for mobile, because that’s where traffic is, that’s where conversions are going to be.
Got it. So now let’s say, okay, let’s say you look at conversion rates. The thing is, you don’t really know as a retailer, you get this number. So make up a number. Let’s say it’s arbitrary number, arbitrary number. Let’s say it’s 20%. Or it could be 0.2%. You don’t even know if that’s good or bad. That’s the thing when you do that. So what do you, what’s the next like actionable thinking there because you get this, it’s very different to it, right? If I’m selling, you know, if my average order value is $10,000 verse before let’s him selling some sort of like ITI where verse I’m selling socks for $2, like every everybody’s numbers be drastically different. So how do I know if my number is good or what do I do with that number?
Yeah, that’s great. Here’s the thing. Conversion rates are 100% unique to your brand. You can kind of compare to your industry and kind of see where you sit, but what does that do? You doesn’t do anything like it doesn’t matter where you are, what number, what you start with can be improved effort in equals positive, you know, results out. So when you’re focusing on your conversion rate and you start to really think about your customer journey, think about reasons why they’re not purchasing, thinking about, you know, or just discovering weird bugs in your website on mobile, or like even on desktop. Like I I’m, I’m harping on mobile light here, but do the same thing on desktop as well. There’s a lot of stuff that you can do on both of them to make your website easier and more user friendly. So your customers will actually want to purchase from you.
But essentially you start with a number for your conversion rate. That’s your baseline. It’s like, okay, let’s find ways that we can improve this by, you know, doing kind of like what I’m, I’m drawing a blank here on things that everyone should be doing best practices. There we go. Making sure that you’re hitting all the best practices once that’s kind of out of the way, then you can start testing. And I kind of, that’s like where you’re starting to talk about conversion rate optimization. And like, once you get all the low hanging fruit out of the way and all the obvious stuff, you’re kind of to a point where you’re like squeezing blood from a stone. You’re like, you’re doing tests to like try to make a little bit more money, which it will work. And it’s obvious compounding. But you know, at first a lot of this stuff is fairly obvious. You know, if you’re not a user like user experience expert, there are millions of them out there that will audit your site for you. Or maybe they’ll fix it as well. You know, you can find people embarrassing, various budget levels. If you’re not really very familiar with like how easy should the site be? You know, you can go get, you can go ask you to help you with that. But like, that’s kind of where you want to start is like, whatever the starting number that you have is it can probably be improved.
Yeah. I’ve always kinda thought of it as kind of tic talking back and forth, right? You’re going to have this moment where you have day one, you have no traffic and no one’s coming to site you launch and visit accounts at zero. So traffic is your first thing. But once you start to get the traffic, you’re talking over to conversion rate optimization average order value kind of optimizing the traffic. But like you said, at some point, that just becomes, okay. You know, going from 1% to 0.9, whatever these tiny little numbers are, don’t matter. But then you go back to traffic and if you text that number, then that little percentage does matter again. So it’s always kind of back and forth because you go so much, it doesn’t matter.
Fantastic transition. Let’s go, let’s go to traffic next. Right. So that’s a great transition. All right. So say the first thing you’ve focused on was user experience. Like you realize that the free theme that you’re using from the theme store is garbage. You hired some consultant or something. You got a really beautiful theme and it’s solving a lot of the weird issues that you didn’t know exist. And now your conversion rates bumped up another 25%. You’re loving that. Right? So you focus there. Great. Now you’re going to shift your focus, by the way I said focus, you should only focus on one of these at a time. So you did that for awhile.
Alright. At the time, is this a day, a quarter a week? Like what, what is, what time are we talking?
Oh man. I would say that a day is never enough time to like actually get any statistical results in e-commerce. But I would say like I think a month is for a young brand, I think a month is a good timeline. It like, if, for example, if you did a, like, if you redesigned your store with a new theme, like, I feel like that’s a lot of effort. I think you’re done focusing on that for awhile. You know, you gotta let that go. You got to get the, you got to get the data back to see if your assumptions are true. And then you can go focus elsewhere you know, for while you’re getting that data back.
So give yourself like a project, like basically on a per project base. So here’s what I’m doing for this. Maybe that’s a great way to look at it. Got it. One thing actually, usually go ahead. I was gonna say one actual thing and it’s funny how many people don’t know about this. And every time I tell people there’s someone in some legal center in Alabama, I didn’t know that. It’s amazing when you annotate and go line analytics, are you familiar with us? Yes. Okay. So some people don’t wear, so if you’re not familiar, what it is is basically when you do one of these projects, you could say site redesign and you can go and Google analytics and Mark that. Yeah. Put a little pin in it because in six months you’ll go back and you’ll see, maybe you’ll see a line go that way.
Or maybe you won’t, but you won’t, you will never remember what that date was. And you’ll have some, I’ve done this where you have to like Zack spreadsheet and try to like piece it together. But that, that annotate, you just go back and you open those little dots and then you see, wow, I can see this. Exactly. I can see this moment where everything shifted and it’s just amazing visualization. So I maybe can find a link to that as well. But if you don’t know about that, look it up. Cause it’s pretty awesome. So anyway, back to traffic,
Yeah. Back to the traffic. And so you spent this time focused on the user experience. You did a project. That’s actually usually how all of our projects work at our agency is like, it’s usually like, they just want to make more sales. That’s like at the bottom of every issue I’ve ever run into with any e-commerce brand that we’ve consulted with, if you boil it down, they’re like, we just want to make more money. Right. So usually it works out in a couple of phases. And the first thing we’re gonna work on is that conversion rate, because that is the biggest multiplier when it comes to like how all these numbers work out in the wash. So we will usually focus on like, you know, either redesigning or like, or making what they have better. So that’s like the first project. And then you shift into either average order value or traffic.
We’re going to talk about traffic now though, this one’s the easiest one to like increase. Cause you can do paid media. You can literally just throw money at it and get more traffic. But you know, there’s caveats there. Like if you don’t know what you’re doing, you might be letting your money on fire. People that do know what they’re doing they are worth it. So it depends on where your budget’s kinda sit whether or not this is going to be worth it. But like I said, a few minutes ago was like, we focus on the conversion rate first because if your conversion rate is 1% and your average order value is $25. I needed, I don’t have a calculator in front of me. So this math is just going to pull it out of my ass. So, so if you just want to go, you’re like I’m focused on growth.
I want to go straight to Facebook ads. We’re going to be spending all this money a month, right? You’re going to be, let’s say you’re spending $10,000 a month. And your average, your conversion rates 1%, it’s only like your ads. If you get really, really targeted, well-targeted qualified traffic, it’s going to convert historically at kind of like what your conversion rate is. So why wouldn’t you first want to put the effort into raising your conversion rate, to getting a higher return on ad spend for those ads? Like, that’s my argument. It’s like, obviously you want more sales, you want more traffic, but like do the work first. So you’re in a better position to make more money and capitalize on your returns.
Yeah. So focusing on the bottom of the funnel first and then work your way up, that’s why I’ve kind of always understood, right? Cause that’s, that’s your force multiplier that bottom of the funnel, you’re already assuming you already have traffic coming in, you already have sales. Like you said, the bottom that’s when you kind of multiply everything up top. So everything, if you have that, you know, a hundred thousand people coming month, 10,000, whatever that is, whatever you can squeak that little percentage out of the bottom, you it’s way larger. And then when you double the top or doubling everything now, so
That’s all, that’s great traffic tracking. Traffic’s up there at the top, which is cool. But like, yeah, if you’re, if your conversion rate can be improved, focus on that because it’s, it’s going to multiply everything. So the next phase of our projects usually will go actually to average order value next and not traffic because we’re talking about multipliers here. Yep. So, but back to traffic, just cause we were talking about it. I don’t wanna forget anything here. So there’s really two options there’s paid and there’s organic paid, you know, influencers. I would, I would probably put under paid unless you get someone that owes you a favor. But like all of those are kind of expensive options and then you’ve got organic, which takes time. So there’s only two things here there’s time or money is how you’re gonna get more traffic to your website. So the easiest manipulate when you start talking about paid, but probably the longest to work on if you’re talking about organic. But those are kind of the only ways that you’re going to grow your traffic on your website. And then like kind of the other piece of the puzzle, moving into average order value. This is one is probably the second most important I’d say.
And we do do that as far as focus. Would you say because organic does take long a very, very long time, right? It’s like the snowball it’s slowly kind of growing. Would you, we talk about focus and I’ve heard people argue both ways. Would you say you should always be doing organic? You should always be writing some blog posts, just kind of doing that. Well, you’re kind of using paid to kind of juice the results or is it, Hey, if page is working just double, triple 10 X down on that to get organic and non paid stops work like max that channel out. And then when you can’t figure out any more paid than go to organic or would you do them at the same time?
That’s a great question. So if we’re talking about a young brand, that’s kind of getting that first initial hit, I’m going to assume that they started with organic to like get those first, that first kind of wave of sales coming in. So they probably have a system that works and I’m going to be operating under the assumption that that system never stopped. And there, they were always doing that organic system while they started to focus on like kind of these other KPIs. If you have all of your focus and not focus, like all of your eggs are in the Facebook, Instagram basket, when they changed the algorithm or your, your feed gets denied or something happens and that goes away, your business is now bankrupt. Like if you, you can’t focus your business success on another business. So you need to have a diversified like area to get people to see your product. So I would argue that you need to have an organic system in place, always for an eCommerce business. And then you find kind of the other channel and paid that works for you. It’ll probably work faster. It’d be more scalable. But if someone pulls the rug out from under you with that channel, you’re screwed.
Got it. Okay. Yeah.
I like that. I definitely, and the thing is organic does take so long and once you get it going, it doesn’t actually take a huge time, right? Like if you’re producing one blog post a week, a month, a couple of months, whatever it is, you just keep doing that. And once you get in the rhythm, you’re just, you know, it’s like going to the gym, you just get up and do it and then move on. So you don’t expect, Hey, I’m gonna write a blog post. And like the world’s on fire. You expect them to write a blog post every week for the next two years. And then all of a sudden it’s gonna be great. But yeah, I liked that. So then the pain is something you can add some sprinkle, some Facebook, Instagram to the top, and that’s where you see the traffic just spike overnight.
Yeah. And the cool thing with content, I feel like content is probably the easiest thing to delegate. It’s like one of the first things we delegated at the agency, I still do all of the content, but I have a team that helps me with like the polishing. So like it’s a very, it’s very easy system to build and then delegate. So it’s not one to take up as much of your time as it did when you first started your business. So and then kind of talking about traffic and talking about, about paid a good like algorithm, not algorithm, a good analogy that I heard once was like, when you’re talking about traffic, it’s like pouring gas in an engine. And if the engine sucks, it’s your it’s still going to perform terribly. It doesn’t matter how much gas you have. So it’s going to perform terrible three miles down.
Yeah. But if you have, you know, you worked on this engine, you tuned it up, you made it great. You replaced some parts that weren’t really working and you made it a lot better. Now when you pour all this extra gas in it, it’s actually going to work for you and you’re going to see this performance. So, you know, that’s like why focusing on the conversion rate before the traffic is the good way to do it. And then the third one here is average order value. And that one is probably the most difficult for people to figure out. I’d say, cause it takes a lot of strategy and it’s so different and unique per brand. It’s like, it’s more, you got to understand the theory first. And then you gotta like apply it to your brand. So like raising average order value, there’s a lot of ways to do it.
But like the most simple ones are like kind of like figuring out a good way to do bundling, figuring out a good way to do upsells or figuring out a good way to do cross sells. It’s essentially they come to you to buy one thing and you get it, you figure out a way to easily allow them to buy more and they feel like they’re getting value out of it. And they feel like they’re getting a deal. And again, like, I can’t tell you the right way to do it because your business is probably selling sneakers. Right. I only need one pair of those, but this other business is selling some disposable razor blades and sure. I probably need a three months supply that. So like there’s easier ways to do the upsells depending on what product you’re selling or the cross sells of the bundling. So those ones really take some like strategic thought to figure out like, what are my customers actually want? What, what are they willing spend and how do I make this easy for them in like my messaging?
Yeah. Tell us about the easiest thing to test, which is nice because you can run through a lot of different, like you already have your traffic going and it had many of us let’s go Jordan gal, thumb cart, hook on him. And for example, so card hook, what they do is after the checkout, they kind of hook onto the cart. Like the name implies, right. And base to say, Hey, you already checked out the orders already done, but you also want to purchase this other thing essentially like creating almost like a second order, but for the same person. And that concept right there, the neat part about that is it doesn’t change anything else higher up in the funnel. So you just kind of tack it on way lower on and you know, it’s not going to lower your conversion rate. You know, there’s some, there are some things right that could distract a user and worse than your conversion rate, but there’s certain things you can do after the checkout, which is sending them emails after the checkout and trying to do that sort of thing and basically another way, right. To increase the cock value essentially. And then that way, you know, it’s not going to affect the conversion rate. You’re not distracting folks. You’re just adding on the end. Super clever. I love things like that.
Yeah. I think post-purchase upsells. You know, it’s good to it’s good to differentiate between an upsell and a post-purchase upsell a enough sell would be like, I buy a pair of shoes and they’re like, do you want these socks before I get to the cart page? But if I’ve already bought the pair of shoes and they’re like, Hey, you get $5 off these shop the socks after I bought the shoes. Now you’re talking about a whole different game. Cause I’m already putting my credit card information. It’s, it’s a little bit easier to get that upsell. Unfortunately in the Shopify ecosystem up doing a proper post-purchase upsell is a pretty big project. And it’s not for the faint of heart cause you can screw a lot of things up.
Yeah. So that’s what their software does hook onto Shopify. And I think it’s a pretty big thing. Right. Cause they don’t make it easy.
I’m actually, Jordan’s, co-hosting a Shopify meetup with me July 15th. I don’t know when this is coming out, but if you guys are around,
All right. And are you in Portland? I know we’re doing it virtually. I forgot everything’s virtual now. Sorry. It’s 2020.
Yeah. I haven’t been important in the years. I’d love. I wish I wasn’t whirlwind. That sounds fun. But so like kind of going back to average order value you figure out a good bundle or upsell or cross sell system within your business. That’s fantastic. But like you said, that’s like the easiest thing to test and kind of once you get it to a point where you’ve like, kind of upped it up, you’re going to be what you’re going to be. Once you kind of get the most, you can get out of these three KPIs, then you start to get into like conversion rate optimization territory where now you’re making assumptions and you’re using the scientific method and you’re, you’re essentially testing hypotheses of how to raise these numbers and using AB testing to do this and just trying to squeeze blood out of a stone essentially at that point. But if you one year to that point, it’s that it’s a beautiful place.
Yeah. Well, and you have, you have to get there right by knowing your user, knowing your customer, right. If you’re selling high end handbags or you’re selling like discounts, socks, those are two very different ways you’re going to up sell someone different things. You can up sell them. The whole, the whole psychology is different. And knowing your customer at that point really is kind of the, it’s gonna, it’s going to get you to skip a lot of these experiments. Right? You just know these sort of experiments just don’t even bother. They don’t make any sense. So it allows you to be scientific, but just skip ahead of your scientific method.
Yeah. I mean like one of the first things that you’re going to do when you kind of get to the point where you can do AB testing and like do conversion rate optimization, first of all, to everyone listening, just to give you a number. If you’re not getting 10,000 unique visitors to your website a month, you’re not there yet. And don’t even worry about it
Like 10,000 in total. Right. Are you talking?
Yeah. That’s just, you don’t have enough traffic to statistically like get a real result. People will tell you otherwise and they probably just want your money. I like to be very honest. It’s, it’s just, you can do it with less, but it’s going to take a lot longer to get the results. You know what I mean? So anyways the first thing that’s going to happen, if you like engage somebody with conversion rate optimization is they’re going to interview all your customers. They’re going to ask them about your product, about the experience. Cause it’s insane. What you’re going to hear from your customers about your product and your website that you like possibly didn’t know what was a factor ever, unless you are interviewing your customer frequently.
Yeah. Yeah. I think a lot of people hire a consultant and I was surprised the first thing they do is talk to the customers and they’re like, I could have done that, but they don’t. No one does it, which is a crazy, very, let’s say no one, but very few people are on their phone with their customers on a daily or weekly basis. And that’s usually the first thing consultant does to get that exact sense of we’re talking about who the customer really is.
Here’s a, here’s a golden nugget for everybody. If you have Klayvio I would find your most engaged subscribers Klayvio has that like built in find your most engaged subscriber, write a campaign, offer them a like a gift card to your store to answer like a Google form survey and like ask them three very specific questions. And that’s your first step into interviewing your customer.
Got it. Okay. So basically just use, use the tools that are already there and start a, this also sponsored by drift this episode. So you can also use drip. Okay.
Yeah. You can also use drip. We use drip for a very long time at the agency.
Very cool. Yeah. It’s one of those things that a lot of them now it’s all built in. Right. So you can literally just most engaged and like they all kind of hook into your shop. Vi’s and big Commerce’s. So it’s so easy to get this data and it’s just so crazy that people aren’t doing that. So you’re saying just find the most engaged, email them and ask what, what are the three questions?
I mean, I didn’t say any three questions, but if I was to guess, I would say what about our product appeals to you? You know, find out why, like, why do you buy our product? What, why, what do you like about our product? Cause that’s going to give you some awesome messaging for your advertising to like use your customer’s own words back to them is the great way to sell more stuff. I would say Mino, ask them, what could we do better? They might have some good ideas for you. And then it’s, it’s very specific kind of to the brand after that. But I think like what we do good and what we do bad is like very easy starting points.
Yeah. Good or bad if they go either way there. I like that. Yeah. I think just asking basic questions like that you always see that score a zero through 10, like how’d you like that product and it’s just, you can just like hit the button and it makes it the easier you make it. The more people are going to respond. Right. Because if you
True, but just hitting a button, doesn’t give you like the, those like unique, like you need to have like a open ended question so you can get it in their own words. Cause they’re probably going to tell you something that you didn’t realize was like either an issue or like a value to customers to help you kind of mitigate risks and, and kind of start thinking about these things. The other thing that’s going to happen in conversion rate optimization is they’re going to install something like hot jar or lucky orange, and they’re going to watch your customers interact with your website. And I guarantee they interacted with it in a way that is insane to you. You’re like, why are you doing this? But it’s, it’s good to kind of see how they’re doing it so you can try to help them kind of help them out and get them down the funnel.
Yeah. I’ve told a story on head before where I was watching it and had this. It was an image, but apparently it was like a button and just kept watching, like, why does everyone just click on this same image that goes nowhere? And I realized let’s just make that link, just make it a link. I don’t even know why I couldn’t fail, wipe it, want to click on it, but just brought them one of the pages I want to sell. And people, all of a sudden the traffic went up. It was amazing. It’s so funny. People, people, people assume things. Yeah. And I, whatever it was, it was a photo and it just didn’t some, or some people kind of looked like a button too and made it a link and all of a sudden traffic went up.
Yeah. there’s a good book out there called don’t make me think very good book. And it’s just, it’s about just essentially this it’s just like, don’t make it harder for people to use your website, make it as easy as possible. And we kind of talked, I do want to bring this up a little bit here. There is kind of a fourth one that I like to kind of spend some time focusing on after we focused on all these other ones, which is lifetime value and it’s, you know, everyone knows it’s easier to sell again to a customer that already exists. So when you’re talking about lifetime value, you’re talking about doing kind of upsells and cross sells and post-purchase sells and reengaging that customer over kind of the lifetime of the business. And nowadays with all these crazy tools like drip and Klayvio yet postscript for SMS, like there’s all these ways to communicate with your customers. You also retarget these customers through advertising methods figuring out cool ways to make them buy from you. Again is good way to focus on kind of increasing the lifetime value. Because once you start getting really nerdy about the numbers, you can figure out like what you can pay to acquire a customer because you know, you’re going to make it out in the wash, like on the lifetime of that customer. And those are like really important things. When you get into actually scaling a business with like a capital infusion.
Yeah. There’s a quote. And I have no idea who said us, but it wasn’t me. Whoever can pay the most to acquire a customer wins. Ultimately today, it’s kind of just a bit right where, you know, if you can sell someone two and three and four and five times, all of a sudden now you can pay double triple for that same acquisition. So your ad spend can still profitably, double and triple, and you can just keep scaling every channel way beyond where your competitors can. And the neat part is your competitors. Can’t see that part of the business, right. They’re blind to that. So they might, they know their numbers. They know, you know, people can figure out average cart value, they can figure it, all that. And your competitors kind of know, they know their conversion rate. They can start buying to yours, but that one thing they can’t figure out. So if you could sell it to the same customer multiple times, you’re gonna blow out paid traffic and no one will understand why that people won’t understand how you’re doing it profitably, but that’s kind of your goal.
Yeah. Yeah. So there’s, here’s a good just behind the scenes. Look at paid media the companies like you see all these crazy case studies of people getting, you know, five, 10, 15 X returns on their Facebook ads. Those are probably like very specific advertising efforts and campaigns. And like, it might just be one particular part of the total campaign. You know, people like to talk about their analytics and it’s very, you know, especially in paid media case, studies can be very misleading. But I will tell you right now, the people that are using paid media to grow their agencies, they’re probably operating at a two to three X blended return on ad spend because they know their lifetime value and they know they can afford it because they know at the end of the day, putting that effort in is growing the business. And that’s all that matters.
Well, and you need to know that, right? Because you might not see that money back for 30, 60, 90, when you start talking like LTV, right. You might not get that money back for 30, 60, 90 days, maybe a quarter, right. Until you get the second and third sale, some people are going as far as yours. So you need to really be sure, right. Cause if you’re running at a loss at the beginning and you’re trying to scale up your loss, knowing, Hey, I’m going to win in the long run. You need to really know your numbers because that’s kind of like, if you’re tripling your budget and you don’t have that dial, then you can go, like you could lose money, big time over this. So you need to know,
This is pretty much just got to the point of that is how you hear about all these crazy like venture backed brands going bankrupt is because they were doing exactly that is they were betting on themselves. And then they couldn’t figure out a way to cut costs and like fix their margin to make it profitable at the end of the day. Like I literally just read Brandless was one of those that like went bankrupt because of this. And now they’re coming back is what I read on the line. They got a new CEO and they’re going to try it again. But yeah, so that’s a very scary element of growing a business is, you know, like understanding your LTV and then betting on yourself. Those are two different kinds of things.
Yeah. So it’s better to take the bet. You probably want to know these numbers, so yeah. So let’s see you get traffic conversion rate, average order value. And at the end customer lifetime value, it’s kind of a, yeah. Alright. I like it. I’ll definitely put that in the show notes. Anything else you’re working on to kind of plug show people where to kind of find you?
Yeah. if you like all my nonsensical rambling, you can listen to me. Every week I have a weekly podcast called honest, e-commerce, that’s honest, e-commerce dot com. And then I am the founder and strategist at electric eye. So that’s electric, i.io. We’re a Shopify specific direct to consumer brand full service agency. We help people make more money essentially kind of focusing on these three areas that I just described for the last hour or however long we were chatting.
Awesome. Yeah. I’ll definitely tell him the show notes. So I think people check that out. That’s super helpful. So awesome. Yeah. Thanks a lot for coming on. This was great.
Absolutely. Thanks for having me.