S13 E9: Real DTC Stories to Learn From

22:51Nik:You can do things like, you know, if you've got 25 flavors of something or 25 colors or, you know, different variations of a product, you can have your top three to five best sellers on Amazon. So you capture the demand that goes there and then have the alternatives on your website. So you're still, you're fulfilling the Amazon customer, but you're also giving them a reason to come back to your site. And that tends to work pretty well. But yeah, the other consideration for Amazon is like, if you're a grocery product, and you're selling in Target, and you happen to run a sale during the summer in Target, then Amazon is going to match your target price and potentially cannibalize some of your direct to consumer sales.

23:33Interesting. So we'll get to the multi channel thing in a second, because I have more questions, but I want to go into the organic versus paid conversation because I think there's a lot in there. I mean, I come from obviously B2B, sort of like the HubSpot playbook. You write blog articles, you create free guides or templates, people give you their email address, you grow your lead list or your newsletter from there. I mean, people are still running this playbook today in variations. And Classy was so successful. It took a long time, but Classy was so successful at this that our blog is more popular than every trade publication in the nonprofit space combined.

24:09But it took like 10 years. It took forever. You know what I mean? So like half, you know, in the beginning, we're like, God, why are we doing this? I mean, we did hire two writers before we even hired our first sales person. We were that dedicated to content early on. I think it was a big reason why ultimately we kind of just like, you know, kind of exploded at some point. And I see people doing this formula and it still seems to work. I mean, I mean, I write really long articles on purpose still for like sort of long tail SEO. But it still feels a little old school. And then I wanted to ask you, like, is that a playbook that's still working for brands in general, whether it's B2B or B2C, just like deeper, richer content creation, whether it's on a blog or the equivalent and driving people through sort of education and that type of content?

24:54Or are you seeing a mix of that plus like sort of new age social media? Or like, When you go into a brand, you're talking about organic. First, how do you think about an organic strategy? And what's sort of a tried and true playbook that may work across a broad swath of customers?

25:10Nik:Yeah, it's a good question. I think it's different for B2B versus B2C. On the B2C side, I'm a huge fan of trying to crack the code on organic. Because essentially, if you're running ads, it's a supplement for not getting eyeballs another way. Running ads is just basically you're paying for eyeballs. You're forcing eyeballs to look at the content you're putting out. And brands that can crack the organic side are, you know, like we have some clients that get 100 to 500 million views organically, which saves them anywhere from, you know, it's really a couple million bucks worth of advertising dollars in eyeballs that they're getting.

25:54Nik:and uh the other reason that organic is is uh is well it's hard to crack because on the paid side you just push push stuff out there and you put dollars behind it and there's no there's no uh you know like you don't know what's better until you see it but if you're just putting out mediocre content and you're getting some cpa or acquisition cost close to what you're happy with you're not going to really improve it on the organic side if you don't have good content it's just not going to work. And you have to keep trying to figure out what works until it works. And then it resonates with who is consuming it.

26:26Nik:And if you can crack the organic side, it makes it a hundred times more efficient to crack the paid side because organic is really, if you do it well, organic is laying the foundation and the awareness for the paid side to go after in a more targeted and, you know, more lower funnel manner. When you say organic, Nick, like today, Like if we're thinking of like an organic piece of content, like what are some examples of that? I know it's like basic, but is that a social post to you? Is that like a blog? Yeah, I'm mainly thinking like in the B2C world, I'm thinking like short form video. That is probably the easiest way to get eyeballs is just cracking the code on short form video.

27:12Nik:You know, from there. Or just multi-channel. Yeah, Instagram, TikTok, and YouTube shorts. And honestly, even LinkedIn, like LinkedIn is cranking right now on the video side. But short form video is probably the easiest way to get eyeballs with. It's like the intersection of most eyeballs for least amount of work you have to put in is short form video. And it's virtually free because you can just do it on your iPhone and put it out. So who does short term video or short form video well? Is there like an example that pops into your head? Because I think when people get in front of the camera, they don't know what to do.

27:46You know what I mean? Totally. It sounds easy once you get into a groove, but like to these founders that, and we've seen this work in B2B too. So it's not just B2C, but like, I'd love to hear maybe an example or two of people doing it well, or what you would consider a good short form video for specifically for selling.

28:03Nik:Yeah, totally. Well, that's the other part is sometimes it's not necessarily, yeah, maybe you're not selling. It's like, you're just putting the awareness out there. One brand that comes to mind is called Waterboy. They're an electrolyte brand based out of Austin. They'll do double-digit millions in sales and barely spend any real dollars on advertising. It's all because of the awareness they generate on TikTok, which has then gotten them into some great retail relationships. Another one is a bikini brand called Strawberry Milk Mob, which is huge on TikTok as a result of just creating content.

28:42Nik:Her goal is to wake up and post 20 TikToks as fast as she possibly can. Some other brands that do - Founders post, sorry to interrupt, but these are the founders like posting them themselves, which comes back to my original question, which we didn't really get to. It was like, as a founder, granted I was B2B, but I wasn't out in front. I wasn't like a personality for my brand. In today's world, do you feel like that's a prerequisite for companies, especially in the D2C or B2C side? And if not, what's the importance of having like a partner or an influencer or someone that can be that person in front of your brand?

29:16Yeah.

29:16Nik:I don't think you necessarily need to have a person in front, but I do think that like, you know, the same way that like the same way that you could see the rise in like alternative media channels, podcasts, YouTube shows, live streams, things like that. I think that's happening on the B2B side with a bunch of more like B2B focused content creators. You know, if If Shopify, like Shopify will usually, if they have some big updates, they want to route that in through my newsletter because it's something that people, they know people will read versus, you know, who's going to go to emarketer.com and read like Shopify's press release.

29:56Nik:I think that thing is definitely happening on the B2B side, but I don't think you necessarily need to have a face. Like I think of this company, Okendo, which is like a reviews app that I invested in on Shopify. And, you know, they have no face. The founder isn't really well known. His name isn't super talked about, but they just have a strong, they have strong brand. They do a good job with showing up at events. They do a good job with partnerships with other companies. You know, there's basically like a few different levers. And I think you don't necessarily have to pull on all of them. You know, if you pull on a few that you find work really well for yourself.

30:29Nik:I do think like the advantage of your face being out there, and this is just speaking from my own experience is that everything that I put out, you know, I put it out with the intention of reaching either a founder of a new company who's bootstrapped and has no money to go and pay for things. So, you know, that persona I write for is like super tactical things they can do today that they don't have to spend money on. One is a CMO of a company that's doing over 50 million. So those are things that are generally more focused on scaling, customer acquisition, et cetera. And then the third one is, is an investor into these direct consumer brands, where in theory, they should, I should have something that is very tactical and they can forward it to somebody and say, Hey, this, you know, do this or take a look at this or look at this part and execute that.

31:15Nik:So I think like what, what that does is it just gets, you know, when it's coming from a person rather than coming from my company, it makes it feel a lot more like personalized or human or one-to-one. And it just kind of adds that like personality to it. Whereas, you know, if a company is writing with some sort of a personality, it's like, I don't know if you would trust it as much. Yeah, that's actually, that's awesome. So you're talking about basically almost content buckets around personas. And I think people really get stuck there kind of on the starting line of like, what do I write? Or what do I even talk about?

31:50Because if you're not, if you're not gonna, you don't want to oversell, you don't want to just talk about, hey, buy this thing, obviously. But then you need something on the periphery that's sort of related to the product that kind of makes sense. Like, how do you, for you, you just described yours, but do you advise some of your clients on like how to figure that out? Like how to actually figure out what to talk about that's sort of tangential, but relevant? Like how does a founder go about doing that?

32:17Nik:Yeah. Well, there's actually this, so there's a few writing courses I took that were really helpful in figuring out frameworks and whatnot to have unlimited things to write about. One of them is this one, which I'm posting a link for, which also they talk about their frameworks to create endless content. Another one was Sean Puri's power writing course. And then the third one was David Perel's rite of passage course. All three are very different, but sort of get to the punchline of like, here's how you create a bunch of content that is, you know, essentially going to perform well. I would say, you know, it kind of depends, like for the, for the brands we work with, it's probably different.

33:02Nik:It's more focused on what is working in their category or what are we seeing things? What are, what are more macro things that are working on the B2B side? I think it's straightforward. It's just like, okay, what is something where somebody can read it on the left side of their screen? And then on the right side of the screen, do something about it. And ideally it rewards them in some way. Either it saves them time, it makes them money, it does something. So whenever I create content, no one knows anything about my personal life on the internet because I don't think they care or really would want to care either.

33:32Nik:I think they only want to see stuff that they read it and then it can make them money. And so I'm a fan of everything being actionable or tactical on the B2B side. I think anything else that you post is pretty useless and it just doesn't get engagement. On the B2C side, I think it's all around understanding that people are consuming content. They're not going to open TikTok for the purpose of, they're not like, I really want to learn something today. And they open TikTok or YouTube or Instagram. They're there because they want to be entertained. And so I think from that standpoint, you want to create content that is either A, entertaining or B, something that gets thrown into a group chat.

34:16Nik:And yeah, drives shares. So short form video is like a really far distance from like a podcast. If you know, those are completely different content types. And with a completely different preparation process, everything's different. How do you like if short form isn't speaking to someone like they're just like, that's just not me or like, I mean, I'm kind of in that bucket. I've tried short form. I just have a much better and granted, it's just, it's only a couple of us doing my, this Highland right now. But you know, I am out in front with Highland and it feels way more natural to do longer pieces of content, way more natural to do stuff like this, like almost podcasts for me personally.

34:55But when you're meeting with founders and stuff, like, is it, is, is short form just so effective that you're like, no, you need to figure out a way to do this. Or is it sort of like a, oh, well, if your personality type is this, maybe lean into the long form stuff. Like, how do you, how do you advise around that? Yeah.

35:10Nik:I mean, I think if you're more suited for long form stuff, you should totally do long form stuff. I feel like as long as content is good, it will always get consumed. If you look at Netflix document, people are like, oh, there's no attention span. Look at how many Netflix documentaries absolutely rip globally. Those are one to three hours long. Same thing with if you look at some of these like more guru type people on YouTube. These guys have built followings with long form content. It's not that long form content won't work, but I think the key is that you have to figure out how are you driving eyeballs back for people to discover it in a way that is convenient to them.

35:50Nik:And that is usually taking long form content and transcribing it. Like a lot of times I'll take a podcast episode and turn that into a newsletter because I know people love consuming the newsletter and that might drive traffic back to the episode. Or you do it with, you know, you You plant certain clips inside the podcast that become clippable and do well on the short form platforms to then drive traffic to the longer form piece of content. And if you're doing those things, I mean, do you always look for like sponsors or other ways to monetize that? Or is it more, you know, if like a brand has a podcast, is it's like it's kind of all about them?

36:30How do you think about that?

36:32Nik:Yeah, I would. So for me personally, I have sponsors on my podcast. Every season we have a different sponsor. And it's always a vendor or a partner that we work with at my company. So it's never like a random company. But if I was a tech company and I had a podcast, I probably wouldn't have any sponsors on it. if anything, I would maybe flip it and say, you know, who are, who's like one customer we can bring on and talk about every time or, or something of that nature. But, but yeah, for me, I mean, I started the newsletter and podcast really as like me versus coming from my company. So initially I would just fake the sponsorships.

37:18Nik:I'd just, companies I invested in, I'd, I'd put them as the sponsor and then that started to get people interested in, oh, I wonder if I can sponsor that. and then slowly started getting inquiries about sponsorship. And now there's like a partnerships team that handles it all. All right, let's jump over to paid. We kind of hit organic pretty well. So obviously paid is when you're paying for an advertisement across whatever platform, trying to convert them right there or soon thereafter, I would imagine was retargeting or other strategies like that. I guess for everyone on the call, I know that people struggle with like when to start paid and how to start it?

37:56Maybe we just tee that question up for you. Like when should someone go, okay, now's the right time to start paid advertising and how do you start?

38:04Nik:Yeah, I mean, for me, if I'm doing paid, first I wanna make sure that wherever I'm deciding to drive traffic to is like fully buttoned up. Ideally, it's been validated through other traffic sources, whether it's organic social or email or that's just the link that you tend to give out to people to sign up or leave info on a form, whatever it is. On the paid side, if you're going B2C, you want to make sure you have a decent enough budget to test things because you're basically looking to... Paid is like, think of it as like a casino slot machine. You really have to get five things lined up in a row for paid to work really well.

38:45Nik:It's got to be your positioning of the brand and the product. It's got to be what the creative looks like. It's got to be the copy within the creative. It's got to be the landing page you drive traffic to. It's got to be the offer you're driving traffic to. It's got to be an efficient checkout process. So all five things have to line up for paid to click. And it's rare that it just happens out the gate. In fact, the only real time it'll happen right out the gate is if a brand has amazing brand awareness. It's like a Kate Spade or an Orgain protein or something that's been ripping on organic and just has a lot of relevance.

39:16Nik:If you're just starting paid though, and you don't have that base, which is majority of people, then you sort of have to make sure you have enough budget to properly test things, you know, different messaging, different creative, different hooks, different copy, different offers, different AOVs, all that kind of stuff. And so depending on like how much your product is, you can get specific around how, you know, like specific around how much budget you need. You know, Facebook, for example, says that for every audience you target, in order for us to understand if we feel confident in this campaign being able to scale within a specific audience, you have to get 50 sales within a seven day period.

39:59Nik:And that's like the bare minimum. So sometimes it's more like 85 sales is really what you need for that platform to feel comfortable. So, I mean, typically for our clients, I'm like, hey, if you don't have 30K set aside, like a thousand bucks a day, it doesn't mean you're going to spend a thousand dollars on day one, but it means that you have the ability to continue testing and learning and iterating. And then if you find something that works, you can scale. On the B2B side, it's a lot simpler because it's generally around lead collection. You're not really going for a purchase per se. You're more so trying to get lead opt-ins or form fills.

40:33Nik:And B2B also, I think there's an art to do it well, which is still that you've got to have something valuable or something convenient for that person to want to get the click. For us, I've, you know, previously done like, you know, I've been like, hey, here's a 40 page deck of how you, I think even now, if you go to nick.co slash email, it's like, I'm looking to build my subscriber base with that landing page, but immediately I'm going to give you a 40 page deck on launching a brand or other variations we've done is like, you know, here's a 30 page deck of how you build landing pages. And so it's like, you're going to sign up and get something immediately, but then I'm also then going to put you on my newsletter and continue to watch you as a user opening and clicking.

41:18Nik:But typically, yeah, I guess the... Keep going. I was going to say the same kind of framework I think still applies where you create something interesting, you drive traffic to it, and ideally you're getting a form fill or a download request, something like that. Um, but I think where most companies go wrong is they'll be like, you know, sign up for a demo and it's like, you're getting, it's like the same thing as that hint. You're going straight to that buy watermelon for 20 % off. You're not whining and dining this person before you're, you know, asking them out or whatever. Yeah. That makes a ton of sense.

41:52And we learned that lesson the hard way at Classy. Um, and we were found much more success driving people into the newsletter and, and really free resources and guides were the number one thing. Not only, not only paid advertising, but also in or mixed into organic content. So if you had a long blog, someone was reading, you'd have the free offer that was layered through the blog. And that worked super well. I know that's, again, kind of old school, but there's flavors of that all over the place that still work. It seemed to work at least really well. We had a question from Cassie that is relevant, because I was going to ask basically the same thing.

42:24When you say like, you need a decent budget, like, what do you mean by that? And what would be considered? I guess you could answer it two ways, just like in an absolute value sense, or also as relative to their overall revenue, you know, like how, how would a founder think about that before they sort of get into the reckless zone? They're just like burning, burning money on fire. You know what I mean? Like, how do you clarify? I'm definitely, he definitely said like minimum budget already. So I'm more interested in as a percentage of overall revenue expectations from a DTC channel, how much of your marketing budget should be allocated to paid spend versus organic and how do you balance those i mean i've read a lot of you know linkedin posts over the last couple years about you know investing in organic is the cheapest way to acquire customers if you do it right but and the most enduring but um yeah how do you look at balancing your organic versus paid spend, especially as a percentage of revenue.

43:28Nik:Totally. So I would say like, uh, the shitty answer is it depends, but it's, it's like, if you're scaling, I would say for brands that are scaling heavily, um, if it's like floor on the gas pedal, it's usually a pretty high percentage of your, of your gross revenue. Um, in your case, I believe you're selling apparel, right? Yeah. I'm outdoor, technical outdoor apparel. So our price points higher. It's not such a impulse purchase. Yeah. So we, we worked with a similar brand selling outdoor apparel. And for them, our goal was always to be at a two to three X return from meta. And, and we sort of just continued to scale as long as we were within that range.

44:14Nik:So for them, it was less about like, what is our budget, but more so within, within constraints of a return, how much more can we continue to push the gas pedal? Um, if you're just starting, I would say, I mean, a 10,$10 ,000 budget is probably a fair place to start and test, um, at a minimum. But at the same time, you know, I would also think about like your, the places you're driving traffic to, whether it's the product page of, you know, the baddie bib or whatever, or even like a collections page, like, I think you're still missing some level of customer education, or this is why WildRy is different.

44:53Nik:You know, this is why you should shop from us versus a competitor. This is what makes this, this is why we created this product specifically because it solves for this problem. And I would probably get that on there before I spend on driving traffic. The other thing you can do is, is there's a tool we love using called heatmap.com. and heat map allows you to basically throw a pixel onto your site and it'll fully track everything. So it'll, it'll track heat maps. It'll track how deep people are scrolling and where they drop off. It'll track user recordings of people interacting on your site on mobile and desktop.

45:24Nik:It'll just help you really understand like, okay, you know, for example we see that there's a lot of people who are clicking into the fit and sizing drawer and they tend to stop on the, you know, the gloves are maybe like the bottom sizing piece, but it's so hidden and far down that maybe we need to move that up. Like that's what heatmap.com will help you understand.

45:51Nik:But, but yeah, I think for, for your question, I would say like for, for your category, you know, if, if it's like something that is not a high, high repeat purchase or like high consumption in the sense that you run out and you need to buy it again, you probably want to figure out what is that number where you're at, you know, either a two to three X is what I would imagine for you, um, where you can acquire customers, you know, not feel like you're losing money on that customer, make some profit, um, and, and, uh, scale that way. Whereas like if you're a supplement brand or a beverage company, you're reliant on these people coming back.

46:27Nik:And so you might spend at a one X row as, or when we were at hint, we knew that if we were at a 0.7 or 0.6 ROAS, we would actually break even online knowing that the retail sales and the, you know, purchases that come down the line are all going to basically get baked back into that. Yeah. Kyle had a clarifying question on this too. Kyle, if you want to jump in. Yeah, sure. Hey, this is Kyle Sleeper. I have a skincare company called Rosebud Woman. we definitely get tripped up on all the different reporting tools things they're saying you know you'll your row ads on facebook might be a one five or it might be a two nine or it might be a point one and then we have a completely different report coming through google analytics or from shopify native and so we have been told by other data tracking people like triple whale or whatever might be that, oh, you need to track customer journey.

47:27MERS is the new ROAS. ROAS doesn't really matter, etc. And I would be curious because of how much money you guys are spending every month. To give you context, we spend about between$50 ,000 and$70 ,000 a month across Meta and Google Ads and trying to figure out how to scale more effectively because we are in that gas pedal category, I would say. We're spending a little bit more than I'd like to for the return. so just want some light on that roe as verse murray's conversation totally um what are all

47:57Nik:the places you're selling like is it mainly just the e-commerce website or are you selling amazon we're we're at an interesting point because we we were in uh neiman northstrom anthropology sacks blooming dales bergdorf detox market like a bunch of places at the shop and we off of them because we were losing money. And our direct consumer store, we do a couple million dollars a year there in sales. But now, Amazon's booming. We've grown 60 % this year on Amazon, but Shopify has been flat. But it's also stayed at like a 70 % return customer rate on Shopify. We are not getting new customers as quickly as we would like to there.

48:41And so it's this weird dynamic where there's new competitors in the market. People are coming on. It was an emerging space. Now it's a little bit more crowded. Amazon seems to be easy to get new traffic and to grow. But to our other channels, there's just more competition. And I guess by pulling out of retail, we also made a choice to not be discovered at the shelf. There's a lot going on. I don't need it to turn into like a rosebud conversation.

49:15Nik:Um, okay, cool. So, um, okay. So the way just from like looking at this, how are you guys currently like getting new eyeballs? Is it mainly just Facebook ads? Uh, Facebook and, and Google ads for sure. Facebook and Google ads. Okay. The current Facebook ads that you have are, are more so, um, like they look more like, uh, either dynamic product ads, or they come off to me as ads that are like relevant to somebody who already knows what the brand is. Right. The, the ads don't necessarily speak to, um, you know, a few main questions, which is like, what is the brand? Why does it exist? What problem does it solve?

49:58Nik:Um, you know, how does this compare to others on the market? And, you know, The last one is usually for a product page, which is like, if I order this right now, when does it arrive? Or even like, what happens if I don't like it? So I feel like if your ads shifted more toward that, I'd imagine your ads would start to perform a little bit better. It looks like your products are clearly loved. You have a lot of really good ratings on the site and people seem to love it. But I would say it's probably just a more matter of figuring out that funnel, that new customer acquisition funnel. I think a lot of people tend to focus on selling individual products, but maybe there's a place to start or a bundle to start or a collection of two or three products you buy as a new customer to sort of get a sample of what the brand is before you get into buying more individual products.

50:50Nik:From more tactical or creative side, I think your dynamic product ads, for example, are great, but they don't do a good job of explaining the product or speaking to some of the benefits. Whereas if you use a tool like this right here called Marpipe, you can take these plain dynamic product ads, create a template, and then it still runs through the feed, which is great because it's very targeted product ads, but they're just more enhanced from a creative standpoint. And sort of it adds the brand, which adds to the trust, which affects everything else down the funnel. I also think some of the product pages you drive to, when you talk about competing brands coming up on the market, they're definitely looking at where the opportunity is from a landing page standpoint or a creative standpoint or copywriting standpoint or offer standpoint to steal market share.

51:48Nik:And so I would just focus a little bit more on what else you can do to drive product education or even like the Soothe common cream. If you go to the page on mobile, make it easy so that as soon as you see the image, maybe there's benefits on the side of the bottle versus just like a plain product image. But in my opinion, it really just comes down to like product education or brand education to the person who's coming to the site. Um, and, and I would imagine that just some tweaks within your creative and the page you're driving traffic to is probably going to do well. Maybe there's also like an offer, you know, between the soothe calming cream and, um, you know, the, um, the, the, the Volvo vaginal dryness, like maybe there's gotta be products that people are buying together often or buying back to back within the first like 45, 60 days that you could probably put together and create a new offer with.

52:51All right, cool. We've got tons of questions coming in. I'm just going to jump to another one. Ryan, you want to ask yours, the one about converting and then how it sort of falls off as you scale? Yeah, great. Thanks, Scott. Nick, Ryan Thompson from Tenth Mountain Whiskey.

53:09Nik:We've been advertising online, mostly meta, 90 % Facebook, 10 % Instagram. We have ads that start converting at a decent clip, and then we try to scale it, and it starts falling off. It stops converting when we try to scale. I've heard that's a challenge just in the industry in general. What do you do to combat that? How often are you testing new creatives? A couple a week. How much are you spending? uh about uh 10 000 a month okay so um 10 000 a month so about 300 bucks a day right i would say um you know first of all like only 10 percent of creatives you put into the account are ever going to reach scale um so sometimes it becomes a numbers game of rotating new creative in, I would, I would create some sort of a, um, a creative.

54:12Nik:Well, the other problem is you, you, you may have, uh, like for creative testing to really work, you have to have a decent amount of budget behind it. So it can see those eyeballs and properly run its test. If you don't have much budget going to new creative, uh, because you have it on whatever seems to be working now, then you're, you might be like skewing the results of those tests. For us, what we try to do is we'll take a percentage of the budget, usually anywhere from 10 to 20%, and just put it towards a rigorous creative testing process where initially we run, we input new creative on a weekly basis.

54:48It runs two days each per three different audience.

54:55Nik:One, it's basically like, uh, dude, what is it? It's, uh, it's some form of like you test interest. Oh yeah. You test a broad. If broad doesn't work, you test, uh, lookalikes. If lookalikes don't work, you test interest audiences. And within six or seven days, if that doesn't work, you kill it completely. Um, and, uh, and if it does work, then you move it into whatever your scaling campaign is. My guess is there's probably not enough dollars behind like what you're testing. Um, And do you use any sort of like creative analytics tools? Not necessarily. So it might be too... Well, I think these guys have a free plan that you can try.

55:38Nik:But this is what we use, like all of our designers, video editors, animators, copywriters use. It lets you sort of splice up data from your ad creative in Facebook in different ways. So you can see, okay, this one had a really good click-through rate. this one had a really good hook but the rest of the video didn't perform that well you know this one drove purchases even though the hook was really low so maybe there's something interesting there we need to extract so this might be helpful and then great outside of that I would you know a lot of it just might be that your your creative just isn't hitting the mark it might work with a very a very like you know an audience that that Facebook already knows your brand, but maybe it's that it's not doing a good job getting past the people who already know your brand.

56:27Nik:Right. Okay. This is another thing where like cracking the organic code. If you take, for example, stuff that does well organically, it crushes on the paid side. And so this might also be a good, a good thing to like, see if there's something you can crack on the organic side and then bring that over to the paid side. We actually, we used to run ads for this brand called 21 seeds, which is a tequila brand. And what we found was that our best, anything that did well on Tik TOK organically, we would bring that over to Facebook and it would destroy on Facebook. I have a five or 6 % click-through rate, which is almost unheard of.

57:02Nik:Right. Okay. Great. Thanks, Nick. Appreciate it. Of course. And again, just to clarify that last comment, Nick, when you said bring it over from Tik TOK, is that video about the product or is about something tangential to the product? Like, is it actually directly about the product? Okay. Directly about the product. It's either like explaining, you know, it might be that it's a, it's a video of the brand put out, or it might just be that somebody else who's tried the product and put up a review on TikTok, you know, that might, and it did well on TikTok, bringing that over to Facebook ads. This kind of touches on Georgia Grace's question.

57:35Georgia Grace, are you there? You want to ask it? Yeah, sure. So you mentioned a few trends that are working across organic and paid and we keep a viral real tracker so anything that blows up on social that we quantify as like a million views or over we automatically turn into an ad um and i'm curious about what trends you're seeing that you think are here to stay versus the ones that are going to be short-lived so for example like trending audio has always worked for us across tiktok across instagram but now we're seeing um other brands do a lot of voiceover videos or just doing like a flat lay picture of their apparel lineup.

58:15We're in technical women's apparel too, that has a patented zipper technology for answering nature's call quite literally. But we have super limited budget for testing things. So we really just use organic for testing as opposed to dumping 30K into tests. So that's kind of at the root of this question.

58:38Nik:Totally. um i think well i think with organic so you know the way that organic social has shifted has gone from this like feed approach where your feed has to look pretty and beautiful and on brand to throw a bunch of shit out and see what sticks on it within the algorithm because that's going to get views and rarely do people ever click over to the profile um so with that said i think the reason these trends have, they go so fast is a trend go, you know, pookie becomes a thing, a bunch of people make pookie related content, and two weeks later, it's gone. And then the next trend comes up and it's brat and then it's gone.

59:16Nik:And then it's demure and then it's gone. And then it's AI voiceover and then it's gone. And I think it's like, you know, you just basically have to keep writing that. Whereas stuff you might think of in terms of a podcast or a YouTube channel is much more longer form. That's more pillar-related content. In fact, I just see in the chat here, somebody mentioned JT Barnett. I have a really good deck that JT shared with me a while ago that I'm going to try to pull up here and give you guys a link to. But he talks all about how to create this like pillar versus short form content.

59:56Nik:JT. Oh yeah, here it is. TikTok PDF. Okay. Is it TikTok PDF and a TikTok masterclass? I think it's the same thing. Okay. Let me just grab a link. And so if you grab this, you can download this deck or PDF, but it's one that JT put together a while back. And it talks all about like, you know, figuring out how you find your sort of pillar content or your evergreen kind of always on content. But then at the same end, Waterboy actually does a really good job of this too. And then at the same time, they are also pushing forward on the trend stuff, the stuff that's like really hot. And that also only works when you catch it early.

1:00:36Nik:If you catch it too late, then then it's not going to pop as much. But yeah, I don't think any of these trends are here to stay, to be honest. Um, you know, we can't even figure out if we like skinny jeans or, or loose jeans. So these TikTok trends are definitely not even here to stay. Uh, but you got to just take advantage of them. I think as soon as you see them, especially if you can see your brand play a role in it, like, you know, the banana taped to the wall selling for some crazy amount that becoming in the news cycle, like, you know, tape your protein bar up against the wall and take a picture, whatever it may be.

1:01:09Thanks. Of course. Yeah, all that stuff kind of drives me wild. I don't even know how you would keep track of it all. But and I don't know where you fall in the skinny jeans, loose jeans thing, but I'm really confused right now as well. I'm good with relaxed jeans. Okay, big thighs. Fair enough. This is a good one from Spencer. Spencer, you want to ask the the one about testing price testing yeah absolutely um and i work with mark over at launch

1:01:37Nik:boom uh so we help new products come to market uh and one thing that we've kind of always failed to find like a really clean way to achieve is price testing you know the very easy to get the the data really muddy unless you can kind of create like two completely isolated things so just wondering because you talked about you know offer uh creation and price testing a little earlier Just wondering if you had like a good framework or kind of some best practices that you follow when you're looking at, you know, that initial stage of crafting the offer, testing the different bundles or just any sort of price testing in general.

1:02:14Nik:Yeah, it's tough, but I would say the way I've always done it before, I think now there's like tools you could A-B test with, even though, you know, that's probably not the most efficient way to do it. The way I've always done it before is just create a split test of landing pages. So I remember we did this with a cleaning brand. We drove it to a generic landing page with a starter kit, but we had three different price points across three different landing pages. We'd split the traffic evenly between the three and just look at which one had the most efficient conversion rate or had the highest take rate.

1:02:56Nik:That's one way to do it. But the other way is just like you start high and then slowly, incrementally go lower. There are some apps like IntelliGems is a Shopify friendly app where you can do price testing within the theme of a Shopify site. But yeah, I'm always a fan of like start high on the higher end of where you think you're at and then go lower slowly. I think once you go low, it's impossible to go back high. Yeah, totally. Especially if people remember that. Awesome. Yeah, thank you. I think we've been very much aligned with like the start high and get lower over time. Just way easier to work down than work up.

1:03:40Nik:Yeah, it's, there's also probably some like level of intuition in it in terms of like, what's the market charging for this product or service or related product or service. And then that combined with whatever additional benefits we have, you know, does that help you justify a higher price point or similar price point? Actually, that's another place too, where like these intro offers or intro bundles do a great job because you can create a high perceived value with intro offers or bundles. And, you know, it might be like, let's just say, for example, you're selling skincare and you've got, you know, three creams and a dop kit, a little travel bag that comes with it.

1:04:21Nik:You know, the dop kit might be valued at$29, but it costs you$1.60 per bag to source landed at your warehouse. So you're adding this additional kind of perceived margin or a deal, a perceived deal that somebody's saving 20, you know, 29 bucks, but really it's only costing you a dollar to get that.

1:04:41I have a question for you, Nick, and it's sort of like the intersection of retail and DTC. I know there's a lot of folks on the call that either do both where they have a DTC brand, but they're also in some sort of retailer or they own retail and they work with DTC brands that put their product in their store, Haskell Creek being one, my company. Caldera Labs comes to mind for me as a brand that's been like heavy DTC, you know, the men's skincare brand that probably spams you on Instagram. So, you know, we started carrying them in the Haskell Creek store and I think we're the second retailer in the country to carry them.

1:05:16They're like exclusively D2C. But we sometimes have issues with those types of brands because they have such a strong online audience that it's hard for the retailer to sort of catch up, if you will, or to match discounting or all these different things that are happening with their strong online audience. So that's sort of from the retailer's perspective. It's really cool, but not always as successful because they're so good online that it sort of sucks the oxygen out of the room to some degree for the retail presence. my question is really like how do you see the best brands of the world balancing those two things i obviously my question was from the retailer's perspective but more like how do you balance the ddc and retail world and how do you get those left arm right arm to like coordinate correctly

1:05:58Nik:yeah i mean um you know the the from a retailer standpoint you're sort of in a pickle between the wholesale cost and the suggested retail price. And it sucks because you've got credit card fees, you've got your overhead, and you've got any sort of discount that you need to push the product. And that all comes out of your cut, basically. What the larger retailers do is they will demand that those discounts be applied. If they're running a promotion on... If they're going to run a promotion, they're going to go to the brand and say, well, we need you to pay for the discounts here, or you're paying for the discount that we're offering.

1:06:43Nik:Like I remember when Hint would go on sale during summer in Target, be a dollar a bottle. And that was on Hint to pay the difference. But in exchange, they would give better placement and there would be a lot more units moved. So it was like a volume play. So that's one way is you just demand it from the brand. Most retailers also like larger retailers, but I'm sure maybe some smaller ones too, they'll charge some sort of like a slotting fee or marketing fee. But, you know, there has to be the pull from the brand to want to be in the retailer to do that versus vice versa.

1:07:19Nik:But in overall, thinking about like e-commerce and retail working together, you know, I think pricing wise, you have to be pretty consistent across the board. because regardless of the margins or who's paying for the discounting at the consumer's eyesight or from their viewpoint, they're just looking at what's more convenient. Do I go to Best Buy and buy the product or is it cheaper on Amazon? But also if I go to Best Buy and price match it to Amazon, they're going to give me the same price too. So I think it's on the brand to make sure that the pricing is consistent. And at the end of the day, it's like, yeah, I still think that there's, it's hard to do the battle of, should we be pushing retail?

1:08:02Nik:Should we be pushing online? You should really just be pushing where your product is more likely to get picked up. There was a toothpaste brand, for example, that I advised. They had no shot at winning online because when you run out of toothpaste, you're not going to go place an order on Shopify and wait two days for it to come. You have to go to retail to get that toothpaste. Whereas if it's cookware, you might say, well, I'll buy this one online because it looks nicer than what's in the retail. I feel like now I'm just rambling, but essentially I think it's like, you've got to, yeah, you've got to figure out where the balance is from the consumer standpoint.

1:08:32Nik:And then if you're, you know, if you're a marketer and you're like, well, how do I understand what my ads are doing for the retail side? Then you've got to figure out some way of understanding incrementality that's driven into retail or Amazon or other wholesalers as a result of the actions you're doing online. Yeah. Sometimes from a retail perspective, if we get the sense from some brands that like the retail side is sort of an afterthought and it's like, they're not their core. And so they'll run discounts, we'll do aggressive, whatever. And we're just at the whim of, like, we're just basically floundering around trying to figure it out.

1:09:02And our customers then maybe go online, maybe purchase online and become a repeat online purchaser versus coming to our store consistently. It's not like, you know, a catastrophic thing, but it's, it's like always this turbulence that sort of exists between the retailer and, and, the product company, which is unfortunate. You'd want potentially some coordination, but I could see how that would be really difficult too. So I'd be interested to hear from some others who are in both, but we've got two big ones. One from Georgia Grace, why don't you tee up this Amazon question? Because I did want to jump into Amazon and just talk about that strategy.

1:09:39Yeah, we launched on Amazon almost midway through this year and it's been growing really quickly, but we have yet to spend any money on it. Um, so I'm wondering what you'd suggest as a super beginner friendly strategy for scaling on that, um, platform.

1:09:57Nik:Um, I would say, you know, definitely like beef up on the reviews, um, so that you're maximizing again, the, I always have this framework in my head called like the best possible at bat. It's like when you walk up to the home plate to hit that ball, you want to make sure your shoes are tide, you know, your shin guards are tightly wrapped on, your gloves are snug, your helmets on nice. You give yourself the best possible shot to hit a home run. You know, you don't leave any stone unturned there. I would do the same thing here. Like make sure you've got, maybe run a couple of reviews campaigns either through Amazon or like, you know, privately among friends and family to get the review numbers up.

1:10:33Nik:And then I would probably start testing. You could either go either way, right? Organic or paid. You could start testing some of the stuff on the organic side where you're creating maybe short form content and talking about the fact that you got it on Amazon. Or I think now on TikTok, you can even link to Amazon or you start on the paid side and you start running some Amazon ads based on their DSP, which should do well. If you're already doing well without running ads, you should do really well when you run some Amazon ads. And for review campaigns, like I have a lot of friends in the CPG space.

1:11:05So for food, it's easy to be like, hey, if you buy this, I'll reimburse you if you leave a review. I can't do that with a hundred plus dollar products. What's another good way to get reviews? And we've had friends like add a couple, but, um, if it's not a verified purchase, they don't always get approved.

1:11:22Nik:Yeah. Um, I don't know that there is another way. A friend of mine runs a company, like a beauty device tool. He did the same thing. It was like, you know, basically reimbursed everybody 200 bucks through Venmo. They filled out a Google form, you know, they upload their receipt. he sends him a Venmo. I don't know that there is another way. You could probably do like the Amazon programs, but I think that's the same thing. You're basically like giving the product for free and they're trying it out. Okay. Yeah. Cassie, do you have anything? I saw you type the blurb in the chat too. Did you have anything on top of that?

1:11:58Amazon related?

1:12:03No, that's a, that's a great help. We're sort of in the same boat. We actually launched it as a clearance channel initially, but are starting to work in more evergreen styles into our merchandising on Amazon, because we understand that when things are out, it's bad for the algorithm. We also are starting to think about starting to invest in the Amazon channel and making it a real customer acquisition channel for us. But yeah, I mean, I think just the reviews note first, making sure that that's in order and is really helpful. Easy first step before investing. I see that. I do have a question. Go ahead.

1:12:43Are there any like strategies to Amazon creative that you'd suggest that's different from meta creative, for example?

1:12:51Nik:In terms of ads or like what's on the product page and store page? Ads in particular. You know, I'll be honest. We don't make a lot of Amazon related ad creative, but I would go and look at like, I would go look at brands that do sell well on Amazon and just copy the, you know, you can usually see like the framework of creative. Generally, Amazon ad creative looks more like a muted TV commercial. So it's like, it has a similar approach to like a TV commercial would. I always think of like the TV at the gyms because they're on kind of generic cable channels, that style of creative. But instead, because you can't have a voiceover, you've got all the text overlaid and things popping up as text overlays or calling out this material and you drag a little arrow out and it says what it is.

1:13:39Nik:That's usually the type of Amazon creative that works really well. You have to also remember that it's on a really, really tiny screen. And so that whole video might just be this big. And so making sure that it's very clear to understand, going back to that drunk grandma framework of thinking, is a grandma able to read that with her eyesight in that little Amazon video window. After five whiskeys. After five whiskeys. Yeah, she's still alive. I have terrible eyesight. So I'm going to test myself. Yeah, perfect. But yeah, I would just copy what's already working for, you know, if you know that some brand is doing really well on Amazon ads, just copy, you know, good artists copy, great artists steal.

1:14:21Mm-hmm. Perfect. Another question came in from Rishi. It was how often do you update creative for seasonal businesses? And I sort of had an extension to that question, which is like, how do you think about creative fatigue or ad fatigue? And how do you just generally think about switching out creative? But then I guess that links into seasonal. Can you use seasonality as a way to refresh things? And I guess, how do you think about that cycle?

1:14:47Nik:yeah i mean you know my philosophy on creative for media buying is that you should you should try to um rotate new creative in on a regular cadence um i like to recommend that every week you're rotating a new creative and um and and testing pretty rigorously like what's working what's not working of course you have to have a decent budget to be able to do that because you want to make sure whatever is working is getting enough budget, but then you also have some budget to drive new stuff. Uh, I'm going to quickly pull up a slide where I have our creative testing, um, our thing, like what we recommend.

1:15:30Nik:Um, but yeah, I think like weekly creative testing is a good practice. Um, and you know, I also think that there's, there's, there's some creative testing where it's like, Hey, based off of what we know is working, let's go ahead and make iterations of that or, you know, if we know that this hook works, maybe let's make another creative that's more aligned with the hook itself. But I think there's also value in let's just go completely off the walls and try something random and new and, you know, out of the ordinary. And I think both are required. Okay. So does that rule apply to organic content as well?

1:16:07Or do you feel like, I mean, weekly would be pretty aggressive, but do you feel like switching out the style and the types of content is important with organic as well.

1:16:16Nik:Yeah. Yeah. Like I think if, uh, I think that if, if you're definitely, if you're not getting results on the, on the organic side, then a hundred percent, um, a hundred percent swap it out and test new stuff. Like, you know, if you're, if you're on episode or if you've put out your 55th video and you're still getting 137 views, it's not that the algorithm hasn't caught up to you. It's that your shit sucks. Or if you're putting out content and it's just not getting engagement, like just switch it up. You know, the beauty of some of these platforms today is because everything is now become engineered to the same way ads are served, which is just based on interest, demographics, psychographics, et cetera.

1:17:01Nik:It's very easy to figure out if something is going to hit or not. It's not like you have to go build a following and then test stuff first. um so yeah these platforms will fully tell you what works and what doesn't work and you just have to make sure you're able to uh you know you're you're there to listen to that on that point can I just ask do you judge success on any other metrics other than cost for conversion we obviously track that one but when you're testing these other things are you looking at all this one generate a ton of impressions or like what are the key metrics you're looking at to kind of be the leading indicator that something's going to be successful?

1:17:37Nik:Totally. Yeah. Great question. So there's a few. So, so typically I'll customize the ads manager dashboard and Facebook to see all these numbers. And keep in mind that the ads manager is just, those numbers are just modeled. Those are not necessarily real. A lot of the clicks can be looked at as real, but like everything else is just based off a model. So, which is another flag. You want to make sure that the inputs to Facebook are correct. So checking things like what is your AOV, for example, is a huge indicator because a lot of times Facebook might misrepresent what the AOV is on your website, which means that their model that they're running numbers into and then displaying numbers on the ads manager is wrong.

1:18:15Nik:TikTok is a huge culprit of this. You might have a product doing 150 AOV, but it'll show a 96 AOV and yeah, just something to flag. But the way I would go about this is I tend to look at CPM. So that tells me how much does the platform agree with what I'm showing. If it's a really high CPM, there's a huge mismatch between what I've put in and what the platform wants me to put in. And if it's a really good CPM, really low CPM, it means that whatever I've put in, the platform likes. The next one is duration, watch duration. So if you've got a video, you want to try to understand against your baseline, is somebody watching above or below your baseline.

1:18:55Nik:That depends per brand. Some brands have a, you know, like we have one brand where their best ad is a 10 minute long video ad. And, you know, as long as they're at a three minute watch time, like we consider that good, but for other brands, it might be a three second watch time or a five second watch time. So you can kind of understand above or below. And again, these are just signals. It's not that if it's above or below, it's going to make or break the ad, but it's just a signal for you to intake. The next one would be click-through rate. So what percentage of people who view the ad are clicking it?

1:19:21Nik:Um, uh, after click-through rate, It's, I tend to look at, you know, who's reaching the site, who is adding to cart or sorry, how many people reach the site? How many people add to cart? How many people begin checkout and how many people actually purchase? And then if you have a subscription, how many people end up subscribing out of that? And that sort of gives you a high level funnel overview to help you understand where's the problem. If you have a really high, high CPM and low click through rate, it's the creative. You can't even blame the website or the product page you're going to. If you have a high click-through rate and your ads are getting decent clicks, but then people don't add to cart, that's where your problem is.

1:19:59Nik:It's in the shop section or whatever page you're driving to. If people add the product to cart, but they're not checking out, it's because you need to reiterate trust and do some more trust building so that when they are checking out and giving you their credit card number, they don't think they're getting scammed out of it. So all of that is stuff I would look at. Obviously, there's different tools. You know, if you're running the best, the best time to do this and really figure out like your funnel is right kind of close to the beginning. If you're, if you're too, if you're selling in too many places, it makes it hard to really understand like where the issues are.

1:20:34Nik:But, um, you know, if you do this with Facebook alone, you don't have to use any sort of fancy apps or attribution software. You can usually get a pretty good idea of where the issues are. And then you couple that with something like heatmap.com or the free version of that is Microsoft Clarity. and you can really, like, if you see, okay, a lot of people are clicking, their creative is good, but then they get to the site. We don't know why they're dropping. You can use heat map to actually watch the recordings and see where people are dropping off or what it is that they're not clicking or what it is that they're not seeing there.

1:21:06Nik:So that's how I'd go about it. And then the last thing is post-purchase surveys. So get, ask, ask as many questions as you possibly can. You know, maybe 30 % of people end up completing it, but 60 % of people get halfway through it. Um, and you know, you ask them, how'd you find us? How long ago did you hear about us before you made a purchase? Who are you buying for? You know, whatever questions you want to know that are going to help you inform the, what creative you make or, or how you position it differently. You know, you might think that you're selling to, uh, you're selling to people like me, but in reality, you're actually selling to moms.

1:21:40Nik:And so that will be, uh, you know, it's a good insight for you to, to do that. Or, or you might see that, um, you know, people hear about your product and then it takes some 14 days in order to then make a purchase. And if that's very common, then you understand that you need to be a little smarter about the middle of funnel or where you're nurturing people. So yeah, those are kind of the high level metrics I'd look at. That's amazing. Thank you. Quick question. Does it change in Google in any way? Does it change in Google? Yeah. I think you could look at a lot of those similar metrics and understand that way.

1:22:15Nik:And same thing with TikTok too. So, okay, perfect. Thank you. One last question because we got like three minutes. I think about half the Highland community wants to work with you now as clients. So we're just going to put you on the spot and ask for a bundle discount of some sort for everyone in Highland. But in all honesty, maybe you can follow what we'll connect and we'll get your information to share with folks. And maybe there is some sort of sweetener there, but either way, I think these guys are interested in what type of customer that you normally work with. you know a lot of the founders on the phone or on the line here, like 1 to 10 million in revenue, maybe a little bit, some a little smaller, some a little bigger, but mostly 1 to 10 million in revenue and all looking to scale.

1:22:57So I don't know what type, obviously you're working with huge guys like Taco Bell, but do you ever work with smaller startups as well?

1:23:05Nik:Yeah. I mean, our minimums on the friend and family rate is probably like 15K a month to work with us on customer acquisition with the funnel. That's media buying, that's ad creative, that's reporting, that's sometimes building out or modifying site experiences. And with that too, essentially if you're spending more than I would say 150, 180K a month in ads, that's probably a good deal. If you're spending less, then I would say there's either people I could recommend you to. A lot of times people just email me and they're like, here's all the context. Can we work with you? Or do you have somebody else we should work with given our stage?

1:23:50Nik:Or I also do like consulting calls, one-off consulting calls where people will just buy my time and we'll go through everything from their funnels or, you know, whatever they want to go through. And we can pull you as a repeat guest. So they'll just get it for free too. Yeah, a hundred percent. Yeah, totally. Yeah. I mean, I feel like, sorry, just to chime in real quick. Like we have a performance guy who's wonderful and inexpensive and affordable and all that jazz, but he pulls the levers, but getting the advice on landing pages and how to set up to be successful in, you know, meta and make your ads more successful.

1:24:25Like that's the type of advice and feedback that I'm specifically looking for. So if consulting is an option, that would be super interesting.

1:24:32Nik:yeah totally um yeah if anybody emails me happy to send you more info it's just n at sharma.com we'll put it there's also um put it in slack there's a i send a newsletter every sunday it goes to about a hundred thousand people and everything everything that i would create or basically like you you should never have to book a call with me if you if you read the newsletter like everything that i have i put out in there um okay and so there's and there's always a bunch of different like um guides but also like decks i'll make i'm trying to find one for example on landing pages since you just mentioned that um but yeah if you sign up to that or if you email me i can always help awesome thank you so much well we're exactly on time this has got to be a first uh it's 11 at least mountain time nick just want to thank you that was like an amazing session and really hit a piece of the whole scaling journey for folks that we haven't really dove into as specifically and acutely as we did with you.

1:25:35So I think it added a ton of value. And just from some of the, we have a Slack channel for the community, just from a couple of folks that had to jump, but like we're begging for the video. I think it was an awesome session. So thank you so much for coming.

1:25:47Nik:Yeah, of course. Again, if anybody has questions, shoot me a note and I'm sure I'll be back soon. Thanks for listening. We'll be back next time to cut through the noise on CPG, retail, and e-commerce. If you enjoyed this episode, why not share it with a friend? And be sure to subscribe wherever you listen so you don't miss the next one.