S16 E6: The Funnel Strategy Driving Brands Right Now

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0:38Nik:Right now, you can get 50 % off your first 60 days at instant.one slash Sharma. Welcome back to another episode of Limited Supply. I'm your host, Nick Sharma. And today we're going to do something a little different. We're just going to riff off the top of my head. I've been on so many phone calls in the last couple months just hearing about how brands are thinking about funnels. And so I wanted to do something that was just all my funnel thoughts that came to mind, especially after this call I just had this morning. So without further ado, let's get into today's episode. All right. So Groons got acquired for$1.2 billion.

1:21there's been so many other stories in this category uh which is why i've been or it's not why but i've been a part of many of these brands uh in this category and which is why i've been so deep in it uh for the last you know 12 to 18 months or so um from a standpoint of you know when i had sharma brands we were working with these brands as clients uh helping some of them even launch from scratch. We were building the funnels, we were running the ads, building the landing pages, building advertorials, you know, basically doing the entire the engine. In other capacities, you know, this year post agency, I've done some advisory style consulting with some of these supplement brands.

2:05And then also from an investor standpoint, so investing in various brands, and then, you know, spending some time with them kind of helping them perfect what this whole funnel game is. So funnels are kind of what I want to talk about today. And specifically, funnels that I feel really drive meaningful conversion from both a brand and performance marketing standpoint. And you know, if you followed me or any of the stuff I've put out since for a long time, you know that I have this term that I like to call performance branding. And I define it as building brand equity on the back of your working performance media dollars.

2:51So what that really means in practice is every piece of static Instagram ad creative that goes out or every quick cut 15 second video that goes out or every banner ad or every truckside billboard or every affiliate creator piece of content, all of it, even if it's all media that's being spent under the performance category, you still do everything you can to properly educate people on the product, the brand, and convey the polish of the brand. So what it ends up looking like is just really beautiful looking creative that works in a performance setting, but the mechanics behind it is really, you know, very performance first and then polishing it to make sure it actually comes off beautiful versus just looking like a as seen on TV, direct response style ad.

3:48So performance branding is this topic that I used to talk about a lot when I worked at Hint almost 10 years ago. And that was kind of my breakthrough there because, you know, when I first got there, everything was, you know, design that looked like 1995. And there was no polish. And then finally, we got to lead this rebrand internally, bring them to Shopify, and the whole thing just upgraded. And it was really this concept of performance branding, which is, we should do everything we can to push this beautiful new brand in our performance dollars, mainly because I didn't have any other brand dollars.

4:25We barely had enough money at the time to do the rebrand because our budgets were all performance. It was like 99 % performance and 1 % brand. And so performance branding is basically how we did it. And the funnels that I feel like I was building then, whether it was through whitelisting, through listicles, through advertorials, through conquesting on Google search to landing pages, you know, all of that stuff is basically very similar to what the biggest supplement brands or VMS or wellness or subscription focused or, you know, telemedicine brands are all doing today. And, you know, this category is pretty much always ahead of the curve, I would say, in terms of how people are kind of doing advertising just because they have to be the most, they are, it is the one of the most cutthroat categories from an advertising and creative and, you know, retention standpoint, basically acquisition retention standpoint.

5:29You even remember, probably last week, two weeks ago, or however long ago it was, the Medvi story, you know, two guys who basically on pace to do close to$2 billion in revenue. And how did they do it? Well, it was basically this entire strategy of what we're going to talk about today. So the reason I bring this up is I just got off a call with two people who are basically coming to market shortly with a pretty cool brand that they're launching, a very innovative device focused on health and wellness. And, you know, their initial question was like, well, basically it's a wellness device, you know, I don't want to give it away.

6:10So let's say it's like good for your heart health, right? So they're saying, well, our product is really good for anybody who has a beating heart, which is true. And I remember back at Hint, our founders used to always say, our product is for anybody with a mouth. But the problem is you can't make content for everybody with a mouth, unless you've got, you know, the ability to create thousands of pieces of content. So when you're starting, I always just like to think about it from a standpoint of like, all right, the people who are, you know, usually the founder or the founding team is usually also the target customer with who they're going after.

6:46And so a lot of times you can kind of start from that point of view and say, all right, what would make, based on me, my personal interests, what I do, where would this make sense to start? Where is there a unique wedge or an angle where our product will actually demonstrate that it works really well and we can sort of use that and attach that to the brand as we're building the brand? So, you know, one idea I had was, well, what if you focused on High Rocks athletes? High Rocks New York is about to happen, right? And everybody right now is kind of mid-training, figuring out how to maximize their lung capacity, maximize, you know, their endurance.

7:25They're maxing out on supplements maybe right now. And so maybe that's a place where, you know, you essentially niche down, right? You figure out how your device helps expand, you know, or make the heart feel run more efficiently. You document that as much as well as you can, right? Photos, videos, testimonials, whoop screenshots before and after, maybe eight sleep screenshots before and after showing the heart rate coming down during excessive training, whatever it may be. But you basically, you know, build this story and then you slowly start to build the brand around all these different stories.

8:02And why is that cool? Well, you're kind of starting in a niche that is going to get you a lot of credibility in that niche for what you're doing. And then you can use that credibility to expand. And, you know, my strategy, I like to always hit one niche at a time when you're launching. Obviously, if you're big and you're massive, like there's another grocery brand I work with, you know, over a billion dollars in retail revenue per year. They've got three massive audiences they go after. And so they're always focused on those three at a time. And, you know, brand new company, I think starting by, you know, basically going one by one and figuring out where those honey holes are is kind of the best way to approach it.

8:45Even if you look at brands like IM8 or Grooms or, you know, I'm trying to think some of the other ones that do a good job of this, but, you know, they essentially niche down within a funnel. So they'll say, all right, we're going to basically test, you know, this month, we're going to test 50 new angles. And out of those 50, we can probably rely on three or four of those to really hit as honey holes. So they make the ad creative, you know, maybe static ads. And at this point, or not at this point, you know, I'm thinking at this point as if you're spending, you know, six, seven figures a month.

9:21But if you're not there, then you basically create static ads. If you already are there, you already know what statics do well and perform well and have the highest click through rate based on the format, the design and the layout. So you just take those and basically refresh those into something new. Text wise, really, and maybe graphics wise, and you know, I don't know how much you guys are probably using AI, but you know, you can definitely use some AI tools from the art side to basically help rapidly create these statics and add objects in or create better, you know, lifestyle photos that are aligned with the angle you're going after.

10:04Nik:And then you start to understand, okay, now which of these 50 different angles from my testing is getting a higher click-through rate? Some brands even that are more like celebrity brands, what they'll do is they'll run these sort of tests through Instagram stories, either by attaching a link or by looking at engagement per story, depending on what the angle is that it's talking about or how many shares it's getting based on that angle. But a lot of these brands just kind of do this from a paid standpoint. So you start running the test and you basically figure out, okay, which one of these is, you know, which out of these 50, maybe, you know, 12 of them are starting to work really well and showing results that are, you know, exceeding where the average is.

10:49Nik:So those 12, you know, now become more built out funnels. You might say, all right, these 12 worked well. we're going to make two to five new statics per each of the 12. You know, we'll maybe make one or two videos with a couple variations per each of the 12. And then maybe we'll try a landing page for each of the 12. You could also maybe do a simpler version of that. And this is again, everybody does it differently. These are just I'm just running through different examples in my head as they pop up. Some might say, all right, we figured out those 12, leave the creative, just add landing pages to the 12.

11:24Nik:So, you know, you might build a, you might do something as simple as just taking, you know, if you run like a normal landing page, that's like an evergreen acquisition focused landing page, maybe you just change the headline at the top to match the angle that somebody just clicked on. You might be running a listicle landing page. So you might actually change what your five reasons, seven, nine, 12 reasons are that people would want to buy and subscribe to your product to align with the angle that they just came from. Or maybe your listicle is so good because you've tested it so much, you actually don't even change the content anymore.

11:59Nik:You just change the headline. In any case, just quick refresher reminder on listicles. You know, I usually recommend seven. I think five sometimes feels too short. And nine can get too long. 10 is definitely too long. Go rank, you know, based on the demographic you're going after, the angle you're going after, figure out what are the top five or seven or nine most important things to them. So for example, if you know, going back to the heart health, heart wellness device example, if you use a device for heart health for high rocks, right, the fitness competition, then your top five reasons will be completely different than somebody who's gonna click this ad that's more of a, you know, senior citizen angle maybe, or a, I don't even know what the angles are because I don't, this is a made up heart health product.

12:54Nik:So I don't know, I'm not a doctor, but you know what I'm saying? Like you use five different things for the different angles, or, you know, if you sell something that's a little more generic and easier to understand, like maybe it's a weighted blanket, then it's just your headline that changes at the top of the listicle. But then those five things change or don't change, sorry, because you already know that from other tests, they have high click-through rates. And ideally, you're trying to get, you know, 35 to 60 % click-through rate from a listicle over to the next page. Time for the retention tip of the week brought to you by Instant.

13:25Nik:Now raise your hand if you've built your welcome series and abandoned cart flow 18 months ago and you haven't changed a thing since. You're not alone, but here's the problem. Your product catalog has changed. Your pricing may have changed. Your best sellers may have shifted and your email flows are still recommending products from 2024. The dirty secret of retention marketing is most brands set up their flows once and never revisit them. And I get it. It's time consuming. You need new creative. You need new copy. You need somebody to actually go into Klaviyo and update everything. So it just doesn't happen.

13:53Nik:But stale flows kill performance slowly. Open rates drift down, click rates flatten, revenue per email drops, and you don't even notice because the flow is still on and generating some type of revenue. It's the slow leak that nobody plugs. The future of this is AI generated flows that stay current automatically. That's what Instant does. Their AI pulls your live site data, new arrivals, bestsellers, current promos, and generates personalized emails in real time. No templates to update, no flows to rebuild. It just stays fresh. Go to instant.one slash Sharma to see it in action. The other one you can do is advertorials, right?

14:30Nik:Advertorials are basically kind of like listicles, between listicles and getting like PR, only because with PR, you're getting in, more publisher feeling context, whether it's article style pages or on an actual legit publisher, which is PR. But with advertorials, you're kind of creating either you're renting space on a website like mysubscriptionaddiction.com where, you know, you pay a fee and you get your content up there. And then you can run ads using their Facebook page. Or you might, you might have created your own website. Like I've got a number of internet publishers I've made myself because I find that I like to have more control on the UX and the UI of that publisher site.

15:16Nik:And I like to put my own Facebook pixel on that publisher site and all those things. And I can control how the font looks and where the images are and what the buttons look like. And I can test all these variables. And depending on how much you're vibe coding right now, which again, I've been slowly talking about this a little bit, but I've been going all in on just AI and coding, which I guess is just vibe coding. But vibe coding doesn't sound as serious as the stuff I'm doing, which I guess it's not that serious when I say it out loud, but it feels more serious when I'm doing it. But whether it's like, I'm fortunate in the sense that I've written all these newsletters over the last four or five years.

15:57Nik:So all of my content and learnings and how I think about e-commerce or landing pages or creative and even being able to go through my agency creative folders and, you know, understand patterns across creative or across verticals and why, you know, one industry does creative a different way than another industry has been really eye-opening and really cool, but has also then allowed me to say, okay, now I have a, you know, a full website repository, or not a website, but a full like repository of thoughts around creative and how I think about creative or how we've done creative at Sharma Brands.

16:37Nik:I've got the same, you know, a 30 ,000 line landing page document basically, which is like, you know, all the things I've ever said, talked about related to sites, landers, CRO, product pages, et cetera. And I can basically use, and then, you know, other facets of it, whether it's retention or subscription or whatever it may be, you know, you can actually see, like if you go to vms.nick.co, that is basically an example of what one of these look like, where it's all of my thoughts kind of organized and, you know, cleanly laid out so that AI can then consume that and use that as a reference. So for example, if you go to roast.nick.co, you can see it's a tool where you put your website in, it references everything I know about landing pages, advertorials, web pages, home pages, you know, UX, UI, et cetera, and then cross-checks your website against that, and then it'll help you even rewrite headlines, for example.

17:38Nik:But all that to say, I've been going super deep in the world of AI, and one thing I find just super interesting is how fast you can get these things up, and I'm talking about landing pages here. So, you know, if you've got an angle that works from a click-through standpoint for your heart health device, within 10 minutes, you can now have a fully designed, fully ready to go landing page up and running with basically no issues at all. And whether you have that in Shopify and you're using like a Replo or I think there's one called, I forget the name of it, but there's a couple of different page builder softwares that basically allow you to drag and drop code in.

18:23Nik:So you can build a page with Claude or with Manus or if you use OpenClaude and have your own thing set up, you can build it with that and then drop the code in and boom, you have a full landing page ready to go. Or you can have it all hosted on a subdomain and maybe if you're using Claude or Manus or whatever and hosting it on Vercel, then you have try.domain.com or read.domain.com or whatever it may be, offer.domain.com And that way, you know, you have basically full isolated control of that entire web domain and, and those sites. And it's all, if you set it up right, you can literally just chat all the changes in to the bot, and all of it gets basically set.

19:06Nik:The next level is then, okay, now you validated out of these 12, maybe, you know, maybe four of them or maybe two of them or three of them are really doing well and ripping. And then that's basically where you go kind of all out. You might realize that, you know, let's say like gut health for this product, this magical powder, right? Gut health is an angle that's working really well and specifically gut health within older people. Well, you might decide now that, okay, well, this, because this is one of four angles that is ripping. And by ripping, I mean, you know, you're spending a ton of money acquiring customers efficiently.

19:47Nik:It's good, high quality customers that are coming in. Then, you know, what you would do is basically say, all right, let's build a whole brand campaign around gut health and older people now. or if your product does really well in supporting people on certain type of medication, then you can build a whole campaign around that. If your product does really well for people who've got plantar fasciitis, foot issues, you can build a campaign around that. And it's kind of this concept of almost like a volume model of content to basically decide what is the one to three to four really good angles that you really go deep on and basically blow up.

20:30Nik:The other thing that I didn't mention here is whitelisting. But whitelisting, you know, definitely happens on the side of the ad, right? Like where's the ad showing up and coming from? And ideally you have custom created content, meaning it's like a creator or something that is starring in the content versus just coming from their handle. But now because you can vibe code so quickly and get landing pages up so fast or build out advertorial pages to run so quickly or to go live so quickly. You can also do this. I've seen brands doing it where they'll work with a influencer that's like a wellness influencer on Instagram, or maybe it's a nurse who has a Instagram presence, but it's not super famous.

21:13Nik:And then from there, you go to reviews.nursejackie.com, right, and it's an advertorial or it's a listicle or it's Nurse Jackie's Favorites from Favorite Flavors Bundle. And you can basically take the funnels that you're running and put it on the whitelist track, but then put it on steroids because now you're running it with custom built landing pages that you're able to get up relatively quickly. Those are some of my favorite ways that I'm seeing just a very small percentage of brands who probably represent a very large percentage of revenue crushing it. And definitely a large percentage of ad spend.

21:55Nik:Like a lot of these guys who are running this formula are basically spending, you know, six to seven figures a day without fail. So I highly recommend it. And, you know, you don't have to copy it one for one. Like everybody's opinion is always going to be like, well, my brand's not set up to work that way. well yeah that's true if you sell a high AOV you know uh air conditioning unit then you know you might not be able to spend a crazy amount of money doing this but you could definitely learn from you know how do you improve the performance branding aspect of it you could definitely take notes and try to figure out how do you get your listicle click-through rate to get higher you know closer to 50 percent to get to a product page um you know you could definitely take the idea or the inspiration of doing a better job figuring out how your product outcomes and what the product does for consumers connects back to angles earlier up in the funnel to get people interested in the right way.

22:53Nik:Because, you know, if you're selling air conditioning units, your competition's not doing this. So it gives you a nice wedge or, you know, to get in and take some market share. All right. But that was kind of a fun podcast just right off the top, really based off a call I just had. So it was fresh in my mind. I wanted to get it out. I hope you enjoyed today's episode. And let me know what you think about this length too. Maybe we'll do a couple of shorter ones. But I'll see you same time next week. Thanks for listening. We'll be back next time to cut through the noise on CPG, retail, and e-commerce.

23:29Nik: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.