How "The DTC Guy" Makes Marketing Simple

0:00Guess what? Shopify Masters is now on YouTube. You can watch our interviews on YouTube. Just search for Shopify Masters. And as always, thank you for listening or watching. Now, here is this week's episode. Good content is always created for a couple of people, not for everybody. It builds this lifestyle that other people get attracted to and want to become a part of as well. Hey, what's up? I'm Benjamin Gottlieb, and you are watching Shopify on location from New York City. My guest today is better known as the DTC guy. What is the product? Why does it exist? Who is the product for? Those are basically the questions you want to answer over and over and over again.

0:42Nick Sharma is my guest and his expertise is all over some big direct-to-consumer brands. Think Carraway, Juneshine, Feastables. The first thousand customers you should try to go get without using paid methods. You're really trying to understand where do you have product market fit. He has not one, but three agencies. And he knows if you have not just a good product, but how to sell it. Nick, thank you so much for being here. Thanks for having me. What a killer intro. Well, thank you. I think that's over now. we can just leave. We're done after the show. Ready to go. Nick, what makes a good product?

1:17Well, a couple of things that come to mind. So my mom recently had this idea. She was like, well, we could sell this product for$99. We can manufacture it overseas. It sounds like it's a great business and then we'll put it in Target. The first few things that people don't necessarily think about, one is, okay, how are we getting eyeballs? How are we getting eyeballs to see the product? The second thing is, which actually should be the first thing, is like, what's the use case of the product? How does it compare to other products that already exist in the same market or as a competitor? And so those are the couple of things I first think about is, you know, why is this product going to win over its competitive set?

1:52And the second one is, why are people going to care? And if you get past the why, why will people care, then it's about how are we going to get eyeballs? A lot of the brands we've worked with will have a celebrity co-founder, celebrity partner. And so it's very easy to get eyeballs up front. but otherwise you have to spend that money to go basically get those eyeballs. And eyeballs essentially is marketing, right? How do you sell your product? That's what we're talking about in the introduction. That is a big piece of the puzzle, right? You could have the best idea, the best product. Maybe mom's idea is great.

2:23I'd love to hear what it is, but selling it is a whole different animal and that's where you really excel. So let's start with how you begin to market a good idea? Yeah. So, you know, I like to, I like to find hooks and angles. And I like to think, okay, if we're selling, you know, let's say we're selling a cooling cream for your feet, right? Or just a cooling cream, a moisturizer that has cooling properties or cooling effects. I didn't even know I needed that, but go on. Yeah, exactly. So now the audience of people who would want to buy a cooling cream is probably very small. But then the audience of people who want to buy a solution to stop itchy feet is probably much bigger.

3:05And so I like to first validate what the hooks and the ideas are that'll lead to the sale of the product. And from there, then it's about figuring out where can that message live or where can you say that message? Where can you talk about the benefits of that product that'll actually bring people in and get them attracted? A lot of times at first, it's social media. So whether that's organic social media. You're creating content on short form platforms that give you reach without any pay, TikTok, Reels, YouTube shorts, et cetera. And then it goes to the paid platforms. How do you pay for ads in a way where you can basically place your product in an ad and drive eyeballs there?

3:43Of course, if you're on Shopify, you also get the benefits of the shop pay boost and being able to show up in the shop marketplace. Well, we're going to talk a lot about organic versus paid a little bit later in the interview. But I want to get back to this idea that you just brought up about hooks and ideas. It kind of reminds me of songwriting in a way, right? When you're writing a song, you're looking for that hook. And you're big when it comes to marketing on explaining things in a simple way and really having something that resonates. Easier said than done though, right? I mean, how do you go about that?

4:16Yeah, I think the way to do that is, one is we have a litmus test that I love to use, which is your grandma should be able to understand what this is. So if you have a product and you have a product page, you're explaining what the product does on the PDP, your grandma should be able to go there and fully understand what does the product do? Why does it exist? How's it going to benefit me? If I order it today, when's it going to arrive? And how does it compare to the other products on the market that say they do the same thing? The second person you want to make that for is a drunk person. So somebody who's taken three shots of whiskey or three shots of tequila, can they still manage to go through that page, understand everything, and then eventually get to checkout?

4:57Outside of that, it is very similar to songwriting or even to crafting content, right? You have to have some sort of a hook that grabs attention. That hook that grabs attention is your permission to get somebody to stay for the rest of that, whether it's scrolling through a PDP or watching the rest of an ad. You know, everybody has 100 million things they could be doing on their phone or on their web. How do you stand out? Exactly. And you have to really earn that time and earn the permission for that person to stick with you. I love those archetypes that you just pulled out for the examples, grandma and the drunk person.

5:35I love how the drunk person is three shots, by the way, it's hilarious. Three shots, yeah. Maybe a little bit more, but those are great people to think about, imaginary people to think about because storytelling is really personal. And you want to talk to an individual when you're trying to tell a story, not to this broad audience. Why is that effective? Why is it effective to think of somebody when you're trying to market a product? You know, it's kind of like that saying, if you stand for everything, you stand for nothing. It's the same with marketing and thinking of who your customer is. You have to really think of, you know, I would say no more than four people that you're trying to sell to.

6:12Even when I write the newsletter, right, I think of three people. I'm always writing for three people only, not for everybody. One is like a founder who has no money, but needs to make moves in marketing. One is the CMO of a company that's doing 50 million or more in revenue. And the third is an investor of an early stage company. I always think of Kirsten Green, who wrote the first check into Bonobos and Glossier, et cetera. And so, and I think good content is always created for a couple of people, not for everybody. That also allows you to sort of build out that lifestyle, right? Like if you think about Allbirds, Allbirds when they started were, they were like the tech bro shoe.

6:51And then it built that lifestyle that everybody wanted to flock to and become a part of. I think that's consistent with a ton of other brands that have done well. Hexclad with, you know, chef made cookware or Jolie with, you know, people who want to be better for themselves and only use the best products. And then it sort of builds this lifestyle that other people get attracted to and want to become a part of as well. Back to this idea of organic versus paid ads. This is a common pain point. How do you know which avenue to pursue, to drive down when you're choosing between the two of them? Well, I always think of it this way.

7:25It's like if you've ever seen the movie Cars, the Disney movie, there's that scene where they're paving the asphalt on the road. And there's a big truck that's basically putting the asphalt down and then another steamroller behind it that's smoothing everything out. I always think of it as, you know, it's always, it's the same thing. You have to build your brand equity and you have to build brand awareness and create content and build legitimacy with organic. I think that's the easiest, cheapest, fastest way to do it. And then - You can't do it just with paid. Correct. The steamroller after is the paid traffic, but that wouldn't work unless you have that legitimacy and awareness that's planted with organic.

8:04Obviously, if you have, you know, millions of dollars, you can go spend on TV and out of home and all these channels. But But I have this thing I call the Broke Man's Content Playbook, which is essentially you use these social platforms that give you a ton of reach. Again, TikTok, Reels, and YouTube Shorts. And then, of course, channels like YouTube or Instagram. But you're able to create content that way. And then you see what does well. And whatever overperforms. So let's say your baseline is you get 3 ,000 views on a video on TikTok. if you all of a sudden get 7 ,000 or 12 ,000 views, that's a good indicator to now move that over into the paid side of the mix.

8:42And you start running ads that actually, you already know will resonate with the audience. Because really the best way to think about ads is not that they're just ads and that they're gonna work automatically, but it's rather how do you take something that works and just stretch it and just get it in front of more people, right? Paid ads is just taking content and just putting it in front of more people who you think are gonna resonate with the content. If you start with organic and validate what works, you've already got proof that there's a good chance that'll work when it comes to paid. Really good learning is here.

9:11So in other words, what you're saying is organic is kind of the test field. Exactly. This kind of stuff. And paid is where you really lean into what you have proven works. Correct. Right. It's a great piece of advice for any founder listening right now to the show. I guess, is views, is that the only way you know if your ad is working? I mean, how do you tell? Views is actually not the greatest metric. On the ad side, definitely not. You want to basically look at click-through rate. You want to look at CPM. CPM in ads will tell you how much does the platform like what you're putting out. And that's usually a factor.

9:46For our listeners, CPM stands for? Cost per thousand impressions. So for example, if you are running a Facebook ad and your CPM is$20, that's a good CPM. That means that Facebook likes what you're putting out. It's getting decent enough engagement to where Facebook is rewarding you with a lower CPM. And it's probably an ad that's doing well. Now, the second thing you have to look at is CTR, click-through rate. So do people actually care about what they're clicking on? And then you can look at the metrics down the funnel. So you have CPM to start. That tells you how much does the platform like it.

10:19You have click-through rate, which tells you how much do people on the platform like what you're putting out. In this case, the click-through is just on the ad itself. And then once you get to the actual site, You have your add to cart metrics, your checkout initiated metrics, and your purchase metrics. That tells you, you know, if for example, let's say your CPM is low, your click through rate is high. That means the platform likes your ad, the people like your ad. Now when they get to your site, there's no add to carts. That means there's some misalignment on the page they got to compared to what they thought they were getting to you for.

10:52It's not what they expected. Exactly. And so, So looking at these metrics helps basically understand and diagnose where you could be going wrong or what you need to fix. Views, you could be having high views for the wrong reason, right? You could have, if you're selling women's lingerie and you have a million views, but it's all men who are viewing it, views is not a great metric there. And so even then, a lot of times I like to use links in comment sections or link in bio and just understand traffic. That's one way. The other way is just understanding engagement. So if you got a million views, how many comments did you get off of that?

11:26How many shares did you get off of that? Generally, back in the day on Facebook, if your likes and shares were at an equivalent number, you have a really good post. Right. And today, because there's so many different platforms, so many different ways you can get your product before prospective customers, data and diversity in data is key. I'd be remiss if I didn't mention that we at Shopify do a pretty good job of helping you digest and understand some of this data. What are some of the things when it comes to our platform that you think Shopify does really well? You know, the revamped analytics in Shopify has gotten much better, especially around cohort analysis and cohort data.

12:07I think the average order value now, you know, not including things like discounts is also very helpful. The Shopify reports tab is probably one of the more underutilized reporting features in Shopify, but you're almost able to cut up anything. I personally like to go and look at conversion rate and metrics per page or per page that's landed on. The other thing that Shopify does is, you know, like just really rich integrations into companies like Triple Whale. So you can actually see other versions of that data cut up. So overall, I think the Shopify analytics tool is really sharp, sometimes more helpful than Google Analytics even.

12:49But I do think that a lot of the metrics, especially as it relates to content performance, and every media buyer who's bought ads will resonate with this, but it just comes down to gut feeling sometimes. I'm glad you brought up content performance because part of the equation that's changing a lot today is how much it costs to get a customer. Customer acquisition costs continue to grow. And it's a big issue, especially if you're just starting out and you don't have a lot of cash on hand. When do you know and how do you understand the moment that's right to start spending more for your customers?

13:28So assuming somebody's starting from zero, I think that, you know, the first thousand customers you should try to go get without using paid methods. And the reason is because you're really trying to understand what is the messaging or the positioning or the reasons that somebody's coming to buy this product. You're still testing is what you're saying. Exactly. You're really trying to understand where do you have product market fit, right? So if we go back to that cooling cream, just advertising something as a cooling cream is not going to work. But you might have 25 different reasons somebody wants a cooling cream, and you can test those 25 different reasons using organic content or putting out content, or even just going to a supermarket or a flea market and talking to people and understanding why they're buying the product.

14:13I think that's how you should get your first thousand customers. But basically, you want to really understand and hone in on what is it that the majority of people are coming here? Why are they coming here to buy this product? And then you turn on paid, and now you have something that you know works. You're not now testing this and throwing things against the wall with money behind it before you understand why it actually works. Then once you turn paid on, you should have three milestones, basically. The first is, how do you get to$1 ,000 a day in revenue with paid channels efficiently? Yeah, efficiently can mean break even or slightly profitable.

14:48Once you get to$1 ,000 a day, how do you get to$2 ,500 a day? And then how do you get to$5 ,000 a day? And 5K a day is$150 ,000 a month business. This is gross sales. Exactly. That's a decent-sized business. Once you get to$5 ,000, it's very easy to get to$10 ,000. Once you're at$10 ,000, it's easy to get to$20 ,000. But that first$5 ,000 a day in sales really forces you to think about how are you understanding what the customer needs or what the customer wants from you. And until you can do that and sort of very meticulously understand that, it's hard to scale unpaid. When do you give founders permission, Nick, to start freaking out because their ads aren't doing well, right?

15:25I mean, they've got an ad, they've been pushing it out for a while and performance is low. Pretty early on, I would say. You know, I think it's hard to quantify exactly when, but if you're running an ad and nothing's working and you're, let's say, a week in or a couple thousand bucks in, you can probably kill the ad. The other things you want to look for is, outside of just purchases, you have to look for a few things. You have to understand, is there social proof that exists for the brand? So if I'm launching this cooling cream, and again, somebody goes to the site, they see cooling cream, it's got all these benefits.

16:01I could have the best product page, but the second somebody Googles Nick's cooling cream on Google, if nothing exists, There's no social proof. There's no articles. There's no blog posts. There's no YouTube videos. I'm already fighting an uphill battle. So social proof is a big one that a lot of people tend to forget. It doesn't necessarily mean you have to go pay a PR agency$25 ,000 a month to get you articles, but there are bloggers that exist that you can go to and send them product and they'll write reviews. There are YouTubers you can do the same thing with. There's TikTokers you can do the same thing with.

16:33And you basically just need content to show up and sort of validate somebody's belief that this is a real brand, right? Nobody wants that feeling of, oh, am I about to get scammed? Because that's what the feeling they would have if nothing exists there. Social proof. So in essence, looking online for other folks who have desired this product or used not even necessarily the same product, but something related. Exactly. Exactly. That's interesting. So you say you don't have to pay a big PR agency to do that. Is it simply approaching an influencer or approaching a journalist or a blogger and saying, would you write about this?

17:08Exactly, yeah. And what's your approach to getting that to happen? Yeah, I mean, you know, if I was, so back to the cooling cream, I would basically Google best cooling creams. I would go find, you know, I'd go through the first five pages. Anybody who's written about that, I would email them. And I would say, hey, I saw you wrote about this. And I would link the article. You know, I just launched this product and we're trying to break into the market. I would love to send you product and see if you like it enough for a review. And that's about it. It's that simple. Old school, just it's the modern day knocking on someone's door, sending them a letter and saying, hey, I've got this product.

17:44Do you like it? Yeah. Good learnings here from Nick. I want to get tactical if we can and kind of move into a different mode here. Do you have a prescription for how much money a business owner should spend on marketing? It's something we get asked a lot. How much of my budget, regardless of where I am, should I be spending on my ads? Yeah, good question. So my personal rule of thumb is$1 ,000 a day. That's the budget you should have. Doesn't mean you're going to spend it all. Might mean you also might spend more, which is a good problem to have. But$1 ,000 a day is enough to properly test. You can get away with$500.

18:23It really depends on what the product is you're selling, how much education is required, and how much does that product cost, right? Because if you're selling, let's say you're selling a bookshelf, that's$300. To understand - Expensive bookshelf. Yeah, to understand how that's going to work. Or let's just zoom out and say, let's assume your customer acquisition cost is$150, right? For an ad set in ad platforms to prove significance that it works, statistical significance, you might have to sell 50 bookshelves in a week for the platform to say, this is a good ad and we're comfortable running this.

18:59And so in that case, you would multiply 150 times 50, and I think that's 7 ,500 maybe. And so that's your budget for one week, right? But if you're selling a cooling cream and it costs$10 to acquire a customer, then 500 bucks is all you need, assuming 50 purchases times the$10 acquisition cost. So the budget really depends on what the projected acquisition cost is. And that correlates directly to how expensive the product is. And is that an argument for if you're starting out or if you want to get into entrepreneurship or sell a product to maybe think about a lower cost item in the early days or maybe when you just started?

19:40No, because I think the alternative is what I think most people should be doing, which is how do I create something where there's enough juice there where I can go create content? Let's take Carraway, for example. Carraway initially created a ton of content themselves, but also with a bunch of different content creators. Or take Jolie, for example. Jolie has created 10 ,000 pieces of content this year alone with a network of content creators that they've done the same thing. They reach out and say, hey, we'd love to send you a showerhead. Let us know your address. And that's pretty much it. And so they relied a lot on their community or forget the word community.

20:19They relied on a bunch of people who are open to take the product and just create content for them. In turn, they got a ton of reach. And that helped sort of pave that asphalt road for them to steamroll over with ads. So I don't think you necessarily need to think about that ad budget as you're building a product. You definitely want to understand a rough comp of what is customer acquisition cost going to look like. But if you have a brand where you can build a bunch of content around, then of course your acquisition cost is gonna be much lower than if you didn't have that. Nick, you and your team have made a lot of Shopify sites, right?

21:01And you have a lot of experience, a lot of insight into what works, what doesn't. What do you think makes a good Shopify store? The real answer is, will my mom look at it and have questions or complaints? And if she doesn't, then it's generally a store that converts over 5%, which is hilarious. If she does, it doesn't convert that well. But really, it comes down to four or five main questions that you're consistently answering. What is the product? Why does it exist? Who is the product for? Why is it better than the competitive set? And when would I get it if I order it today? Those are basically the five questions you want to answer over and over and over again, whether it's a landing page or a website that you're driving people to.

21:44The other thing is you just want to make it easy for somebody to shop. So I always think of an example of if you walk into the Kuyana store in Soho, you could walk in and the store associate might look at you and think, okay, based on what this person's wearing, the purse they have, the shoes they have on, the watch they're wearing, I know exactly the route to take this person through the store. And that's sort of what you want to build online, is that experience where you can understand the type of person you're going after and then build, you know, build a pathway for them to come into. Obviously online, you can't see what somebody looks like behind the screen.

22:21That might be illegal, but you can build different characteristics or you can build journeys that help, you know, for example, starter kits, bundles, first time offers, things like that. I love that you keep bringing up this example of the grandma or the mom. It's the same exact principles that I teach when I'm teaching students how to write journalism in the early days, right? You think about someone, especially your mother, and do they understand what the hell you're talking about, right? If they don't, the odds are that the person who's visiting your store with distracted attention, by the way, mom usually has pretty good attention.

22:58It's like, oh, check this out, mom. And she's like, okay, I'll look at it for you. But distracted eyeballs in this polluted and crowded information landscape we live in. It's a tall order. So it's a great piece of advice, but I think it's easier said than done. Sometimes distilling something is difficult, right? Have you unlocked the key to that? How to write something that is easily understandable? Personally, I've found that the best way to do it is, you know, when you, let's say you're writing product descriptions or headlines, right? You want to almost overwrite in just a blank Word doc, write a bunch of stuff, and then start cutting it down.

23:42And challenge yourself to get it down to however small it needs to be. But start with something that's two pages long and then gets distilled down to one sentence or two sentences. I think a lot of times when you start, even even writing ad copy. When you write ad copy that is one sentence long and your goal is to just write one sentence, it's easy to miss the other 97 things that make your product special. But if you start with a two-page document and work backwards, you'll start to identify themes and patterns in the product that you can talk about together and basically create something that is much more cohesive.

24:20It's high level ideas and thinking, I think, from you. And it takes a lot of skill. It does. I mean, writing is a skill. We have a new tool that's been helping folks with writing, artificial intelligence. Are you leaning into that? And what are some of your best uses for artificial intelligence today? Yeah, great question. So definitely a fan of it. When it comes to, let's say, even creating content, we might say, we're a deodorant brand like X. So OpenAI or Shopify intelligence doesn't know the new brands that have just launched today or last week or last year. You're prompting it. We're like this brand.