Ep 622: How Outway Runs Canada and the US as Two Separate Businesses

0:00We don't do any retargeting.

0:01Taylor Fraser:What I see time and time again is that maybe 70 or 80 % of your hardest excluded campaign is still going to have like a 20 % bleed into retarget. It will naturally retarget for you. All of my ads from last year were performing all through this year. We couldn't beat it. And we were just constantly trying to beat our ads from Q4 last year and it just wasn't happening. Then all of a sudden, randomly, it'll just switch. Meta is so random sometimes that you'll get caught in your head thinking it's a certain way. And then as soon as you put that thought out there, it just changes and you're like, okay, nevermind.

0:34Taylor Fraser:If you're sub eight figures or, you know, if you're doing$5 million a year in top line revenue, you're not going to be able to like CRO your way to success. What ads can I make? Let's just make more ads.

0:52welcome to the ddc podcast i am here with my friend taylor fraser recently you just told me you are now the cgo which is actually the first time i've heard of a cgo yeah same at outweigh uh which is one of the most successful if not the most successful sock company in canada i love the socks fantastic product here in victoria um you've been at this now how many years Today's my seventh year anniversary at Outweigh. Oh my God. That's an eternity in this industry.

1:20Taylor Fraser:I know, right? Like we've managed to get through, but yeah, CGO. When I first heard it, I was like, what is that? But chief growth officer. So, and there's a reason behind that. I was CMO, but it didn't really make sense. We didn't really need a CMO right now. It just didn't really make sense to us. Talk to me about the distinction just from the outside looking in. What does a CGO not do or do that a CMO doesn't? Yeah, I just think that like, first off, we're not a huge, huge team. We have a lot of external partners. And so, you know, there's only 10 to 15 of us on the island. I think with like AI, you're seeing kind of like a flattening of a lot of middle management and the communication is changing and the hierarchy is changing.

2:00Taylor Fraser:And I think when we really just looked at our own needs of the business of like, where, where do I exist all the time? Where do I need to be? And where should I be? Kind of did that to everyone. And then just the realization was like, we don't really need a chief marketing officer, we need someone that's obsessed with growth. And so we break growth into three pillars. So it's performance, retention, and e-com. Obviously performance is like, you know, that's where we're going to grow the most, but, uh, retention being like email SMS and e-com being the store also arms of growth because you know, how we do things on those, um, determine like, you know, LTV and things like that.

2:36Taylor Fraser:So we just basically in a nutshell, broke down the growth department into three sections and just said, what's the main function of it? And retention was LTV, performance was acquiring new customers, and e-com was conversion rate. That was it. And then you said Emily is the chief CBO, chief brand officer. Yeah. So Emily was kind of like, she had so many titles and basically just content, but she was doing so many other things. And so while we were trying to hire around her to kind of make her work on the things that she should be working on, it also became clear that content didn't really necessarily need to live inside the marketing under me you know now there's no cmo i'm focusing on growth so now she's kind of in her own arm with like brand so she's just basically making content for all the channels obviously that changes every month sometimes we do a product drop sometimes we're doing a big campaign or a summer sale or sometimes just making like evergreen ads but basically her job is to work with me i provide you know numbers metrics and reports and she comes to me with kind of more gut instincts and things you know what's going on in the world.

3:38Taylor Fraser:And we work together to try to make creatives and get good assets for emails and all that stuff. So it's kind of nice actually having that split because I'm not so involved anymore. If anyone's seen our ads, I'm in like so many ads, hundreds and hundreds of ads. And I will still be in them, but I was also so deeply a part of like writing the scripts and the hooks and getting them put together. And I can kind of just go, Hey, this is what the account needs. And then she can just sort of make the magic happen. Tell me what to do. You might, this might be a better question for Emily, but in your, from your, where you sit, how has the brand evolved over the past year or a couple?

4:12Cause it's, it's interesting to see, to see how much you're, you and Rob and your like fitness journeys, for instance, are like in, in the brand at this point.

4:19Taylor Fraser:How would you categorize how, how you guys have evolved that? I mean, I guess the last time you were saying we talked was like 2024, but we've talked like, you know, we've bumped into each other at the grocery store. um i think probably a lot of simplification in the brand being a little slower to make hires like experiencing pain for a lot an extended period of time until we're like hey let's hire and like patch this hole in the boat yeah really like thinking long term on everything and then also just being able to like when say we're hiring someone to the team being able to understand how we can attribute revenue to that person like even if it's directly or indirectly so really just like slowing down.

4:58Taylor Fraser:We have like a decision framework. We have like management meetings where we actually stop and we, you know, listen to Rob's ideas and we go through like, does this make sense? Like, you're right. It's cool. It's the coolest idea ever, but should we be doing it? Is the consequence of doing this that we're going to keep our eye off the ball and, you know, miss something else down the road? So I would say like the growth that we've experienced has actually just been like very like smooth, calm, wise, battle-tested approach to everything that We do. Very cool. How do you characterize the growth that you've experienced over the past, call it, two years since our last podcast?

5:30Taylor Fraser:I would love to just say up and to the right every single month. I would say on a larger graph for sure, we have grown. Every month we're always beating year over year. Sometimes it's harder to get there than we would think. I think what we're seeing a lot now, especially in our space, is it's very promo driven. you're seeing i i obviously sign up for like every brand just because it's annoying but you want to kind of see what what's the temperature it's very promo driven out there right now so it does suck when you you know you feel like you're always having to have some sort of offer every week and to sort of hit these like top line revenue goals what's the most just you brought up offers what's the most effective offer you've run in that time or is it more about the the shape of all the offers over time yeah for socks it's been interesting like you would think like you know bogos would work really well, right?

6:19Taylor Fraser:Because people buy socks in sock packs. That's what they're used to seeing. They're used to seeing eight, 10, 12, all that. So, you know, when you're selling them a single sock, it actually kind of doesn't make a lot of sense to sell them one sock. So the offers that we do, I do find the most straightforward and clear ones. Like we had one, it was basically, it just said 30 % off everything and literally just everything. And we just didn't try to like change discounts per SKU or whatever it is. It was just like one size fits all and it was really successful just because it's so easy to understand when you go to our site there's so many designs there's so many combinations of heights and yarn comp you know compositions that i think it can become a little bit overwhelming for some people but when they see one solid number they just know no matter what i pick i'm getting the same deal where when we run like bogos people don't understand them very well they're like wait so if i buy two i get like this one free or like the next one free and it's really hard to communicate that deal and then ultimately you We don't actually see like big carts and stuff.

7:18Taylor Fraser:So we're always playing with different offers. It also depends on like the season, the time, the product. Is it a performance offer? Is it something that we're having just like live on the website? So typically what we'll try to do is just like fill the funnel during the week or the beginning of the month. We get people excited on new releases, live in that momentum. And then once that momentum starts to die and those loyalists, you know, are already bought their new releases, we start to um then have like a couple promos in the back end of the month so our conversion window is like you know seven to 14 days so if we get someone's attention in the beginning of the month we're trying to consider like how do we really grab their attention near the end of the month and so to liquidate the funnel kind of thing exactly so like we have like quarterly peak moments so we like look at it in a quarterly and a monthly so the quarterly does the same thing it's kind of like we have like little peak offers around moments like whether it's father's day or Mother's Day or whether it's, you know, prime days.

8:10Taylor Fraser:And we try to take advantage of those moments. But then at the end, we like unload the, like the funnel and try to like clear everything up. And then we start again. So we do that four times a year. And then on each month, it's like a microcosm of that quarter. That's awesome. Yeah. I bought my whole family outweigh socks for Christmas this past year. Yeah. And I love the, the mystery sock that you have as well. I have a pair of avocado of like anthropomorphized avocado socks. That's the only sock I've drawn that I never, oh, you drew that. Yeah, we were like really low on designs and Caroline at the time said, Taylor, can you draw like a sock for like, I think it was Valentine's Day.

8:46Taylor Fraser:It's like me draw a sock, like I'll try. And I sketched it in paper and like went to a bunch of websites and drew it. And then it became like a sock. And then I see people wear it all the time. I'm like, hey, did you know that I drew that? I drew that sock. I will wear it with more pride now knowing that. What's the take rate on something like a mystery sock to offer? because it's such a novel thing in your funnel that I bet it's pretty high take rate. Yeah. Okay. So mystery pair is like the most annoying thing ever for us, but it's the golden handcuffs. Like it works so well. Yeah. So like the reason we first had it was because we used to warehouse our products here in Victoria and we would turn over designs quite frequently and we would literally have shelves filled with socks of like weird sizes or like maybe designs that didn't do well with the male demographic or the female.

9:32Taylor Fraser:And so we'd be stuck with all these like remnants and it's cash. So we'd have to clear up cash because we were bootstrapped. And so we were like, let's create this mystery pair and it'll be like 50 % off. People won't know what they're getting and we'll just make this big bin of like random socks that are still decent, but like you're getting 50 % off. You can't be mad, right? Yeah. Some of them are drawn by me and it worked really, really well. So it was this really cool way that we could sort of just make room for new stuff while also like giving people the socks we had. So we did that. And then once we moved to a 3PL we have one in LA and one in like you know Toronto area now uh we've can we don't technically need to do anymore but it works so well and it adds like one like it's like 30 40 percent of every order has like a mystery pair and sometimes like two or three um and I don't get it I like to know what I'm getting personally but some people really like it and then they like the deal too so it's a really tough setup on the back end to be able to have a mystery pair I won't get into the technical side of it, but it's been the most annoying thing ever.

10:33Taylor Fraser:But yeah, we've continued to do so. How important to your growth has been your product line expansion? Because when we last spoke, I think still probably your three or your millennial no-show white socks, or maybe still among your top, your simplest stuff, but you have so many different patterns. And now you have my personal fave of your Merino wool socks. So you now have all these different threads or or variations. How important has been adding all of that? How important has that been to your growth? What I see is that most people still typically buy crew socks with designs on them. So the stuff that we like initially came out with that made us outweigh is still the predominant item in people's cart, which is nice to see.

11:17Taylor Fraser:Like we've, you know, we nail it in that way. But I think, you know, when you look at the actual sales spread of say No Show or Merino, they definitely take up a smaller percentage of people, but they're really great like items to have seasonally because most people, when they like a certain sock, they're not really going to change. Like someone that's like, I really like ankle socks. It's just really tough to be like, Hey, you should also try crew. They're like, no, I like ankle. And we see that there's a singularity in most of our carts. Like most, most carts you would think, Oh, they, everyone's buying a variety of flavors and different yarn comps and heights.

11:51Taylor Fraser:And it's not true. It's like always like one type of sock. so the the beauty is is that like seasonally it's been kind of nice so like when we go into spring or summer ankles will tend to do better and then when now we have printed merino are yours printed yes okay so yeah they're like the light version of it yeah okay yeah so like those will do well in like the spring summer because people that really like merino that are going on hikes they'll be like oh cool a thinner merino that looks cool and i can still wear my yarn but it's not super bulky so the product expansion's been really good for just having a little bit more interesting things to say and being able to increase our TAM.

12:28Taylor Fraser:But it's not necessarily that like we've taken a customer that's a diehard crew sock person and now they're like wearing everything else. If anything, then maybe they'll just refer their friends to it. It just helps you reach different avatars and different need states. 100%. Yeah. It's more like actually just expanding like the funnel of people that might be interested in our brand. Because there's a lot of people, I've even seen it, where they're like, hey, I saw your ads. They're like super cool. I really like the product. But like I went on here and there was no this. That's all I wear. I would totally wear them if you had them.

12:59Taylor Fraser:And you're like, we don't have them. So how many times is that happening, right? Like it's like those silent killers that you never really see. Yeah. There's always so much discourse in the DTC world around meta and meta performance. How would you characterize meta performance? And have you had to make any fundamental changes to how you guys think about how you do meta with Andromeda coming onto the scene? yeah we're like in the right in the middle of kind of that whole andromeda thing right now where i think and it comes from uh me like i've been doing facebook ads for a long time like you know way back in the day when it was like interest-based targeting lookalike audiences and things like that it is really hard to unlearn that stuff and understand that you need to get out of um meta's way it's like the most difficult thing to just go i mean i remember the first time doing like broad targeting and i just was like how could this possibly work yes and understanding that your new targeting is your creative consolidating your account down keeping it more simple not having a hundred different campaigns and really obsessing over offer and creative and not doing the other part so you don't really feel like a media buyer like like that media buyer role is like kind of gone away.

14:17Yeah.

14:18Taylor Fraser:Um, even though I very much am in the numbers and I'm looking and I feel like a media buyer, I'm not doing the old things where I'm like tweaking, uh, you know, tweaking a cost cap or like surfing the budget. Yeah. Like it's like, there's no, like, like the other day I went into Claude and asked it a basic question. I was, um, creating like ad labeling for North beam between that and like this report. And it was like boff, moff and toff. And I'm like, we don't use that anymore like i'm not gonna do a bottom of funnel like you know at least for our product right yeah and we have such a short consideration period that it's all just top of funnel do you still have separate retargeting campaigns we don't do any retargeting yeah no you just leave it to the algo retargeting is built into um you can have the hardest this is and everything i say is my experience and like and we're always learning too so what i like the drum that i beat this month i am happy to see data like prove me wrong and then i switch but like i what i see time and time again is that maybe 70 or 80 percent of your hardest excluded campaign is still going to have like a 20 percent bleed into retarget yeah or people that are on their you know second or third touch point um i don't do any retargeting because i just find it like you're kind of just burning money at that point it will naturally retarget for you do you pause ads?

15:36Taylor Fraser:Yes, but not as quickly as a lot of people do. Yes. Yeah. That's my understanding of where we're at now is that you never know when gem or lattice or whatever is going to need that one ad impression to move someone along in the conversion funnel, even if it doesn't have a directly applicable ROAS. Yeah. If I, if I see, you know, if I look at our CAC and we're like a $50 to acquire a customer, let's call it 50 bucks. And I see an ad at$45 spend and it's spending a couple bucks a day in my mind i'm like oh in a few more bucks it's gonna find a conversion so it's like i it is a weird um feeling when you're like you're trying to stop bleed in the account but yeah the thing that's bleeding might actually end up being your best thing ever and we've seen so many ads that have just come out of the woodworks and just been amazing for us like randomly like one thing we were experiencing this year and i've heard it from others too is all of my ads from last year were performing all through this year we couldn't beat it yeah everything we were putting to the account, which I thought was objectively better, wasn't beating our old ads.

16:36Taylor Fraser:And we were just constantly trying to beat our ads from Q4 last year. And it just wasn't happening. Then all of a sudden, randomly, it'll just switch. And Meta is so random sometimes that you'll get caught in your head thinking it's a certain way. And then as soon as you put that thought out there, it just changes. And you're like, okay, nevermind. So kind of like, for me, I like answers. I like knowing and pointing at something and be like, that's how it works. With Meta, you have to sort to let go of that part and just be like feed it really good creatives um get out of its way understand like your your metrics that you want to follow so like i obsess over like nc roas like we did that as well too like with north beam we'll go to like first touch like attribution like first day click like one day click roa is like up like the most harshest look at our ads in that day and yeah you can watch that but then you sort of see the conversion like report and that changes things for you and then you realize that you're killing ads that maybe you shouldn't kill some take a couple weeks some take you know a couple days some get a lot of spend and have horrible quality like traffic yeah so i think the one thing that i've just like looked at is just are we diversifying our ads um the first metric i look for is spend because at the end of the day if meta is giving you spend in the cbo that's a signal that there's engagement there and there's something there regardless of whether it works or not and then from there if i put out a hundred in ad spend, how much money they get back in new customer revenue.

18:00Taylor Fraser:That's really all I care about. And then from there, there's metrics around there, like curiosity metrics. Like what's the AOV? Like what's how many units in their order? Like, you can't really control those things. It's nice to know. But yeah, it's dollars in, dollars out. That's it. Yeah. Simplified. Yeah. And then what's your take on creative volume at this point? Because it's been quite a discourse on Twitter about whether you just need really strong, diverse creatives or whether you need that and then lots of it like well how do you think about creative volume yeah again another thing we're talking about i actually had a call today with emily or yesterday and we were talking about like you know we typically would do like a concept and it'd be like okay this concept and then we would just switch out hook lines in the in the front and but the thing is is like a lot of our videos have had very similar like take rates like Like, you know, like the CTRs would be really good, but then one would just get more spend.

18:56Taylor Fraser:So we're going to try a different approach where instead of taking like one concept where it's the same video with just like the first four seconds being different, actually just doing like two or three that are the same concept, but completely different videos. Like they're truly diverse. So like the actual creative is a different hook instead of, you know, the five and five and five, like all the time. I think it's an easy way to produce more creatives, right? you make a cool video and then you're like, Hey, the first three seconds just switch it out. Yeah. But I don't even know if that's the way to do things anymore.

19:27Taylor Fraser:We're trying to figure it out right now. Like what makes the most sense? You got to, you kind of get stuck in these old habits and then, and everyone has an opinion. That's the problem too. Everyone has an opinion. Go on Twitter and someone's like, if you're not doing it this way, you're an idiot. You're like, Oh my God, let's change it. And then someone's like, you're doing it that way. That's crazy. Do it this way. And they all like are right and wrong at the same time. So I try to like keep a level head and just like, we just test our own. Understand it's a real time experiment for everyone.

19:52A hundred percent.

19:52Taylor Fraser:Yeah. Yeah. I was, I've been told CBO by everyone, CBO, CBO. Then I talked to a guy yesterday goes, I'm spending six figures a day with ABO. Yeah. I'm like, well, I can't disagree with you because you've got like, you're doing it. Yeah. You know? And it's like, well, let's have a look, you know? So we're going to try something like that. And what are you doing now? Are you mainly on CBO? Yeah. CBO. Yeah. so we're like we're cbo with cost caps right now okay um i don't always love it it's can sometimes have really slow spending days where it takes a few days to recover it's like just won't spend your budget and then it has some days where it goes 30 over so it's a little bit weird i do miss like high value low costs i just like they just rip but like you don't always see the good good performance with them so right now we're gonna we're gonna try and experiment with um testing our new ad sets with an ABO, which we haven't done for a while, which scares me a little bit because it's just a, it's a lot of money to commit to an ad set for it to fail.

20:50Taylor Fraser:But we're going to create a system where we can just like find out very quickly if we want to keep it on a lot. Talk to me about your American expansion, because I know you guys have such a strong foothold in Canada. I know you've been growing in the US for a long time now as well. Talk to me about how that project has gone? Yeah, it's hard. It's really hard. Everything we have done is hard. So we see all these businesses that come to Canada and then they do a U-turn and they go back. And they're like, anyone doing business in Canada, you're insane. We're like, we have a great business in Canada.

21:23Taylor Fraser:80, 90 % of our business has been Canadian. But at the same time, it's also very difficult in many ways. So parts of it are easier because there's less competition up here, but there's also less population. Our Canadian customers, like when we compare both of them, they're just like a lot more loyal. They require a lot less offers. They're more considerate. When they purchase from you, if they like it, they'll refer like their whole family and friends. In the States, what we're realizing is that it is a slightly different consumer. They have a much higher expectation level for logistics, like packages showing up quicker.

22:01Taylor Fraser:I don't know, you've grown up your your whole life i remember going on like ebay.com and you would order something and you would be like lucky if it showed up a month later yes and or if it just showed up without duties on it or something yeah we're just so used to paying taxes and duties and waiting a long time that are like if we get a package that week we're like this is great and i think amazon's starting to change that for us our expectations higher but in the states it's even worse that like if you don't get a package them in like one or two days regardless of how much they like the product you're inconveniencing them at some level yeah so there's like this weird thing where they go unless someone that they know is telling them to buy or unless you're giving them something like a lot of value at the first on the first offer it's really hard to like get a customer just naturally interesting yeah like canadians will just try you out because they're like oh it's a cool brand yeah i'll try that out 20 oh it's 20 bucks a pair yeah i'll try that they're not like asking for anything in the States, it's like, how quick's your shipping?

22:57Taylor Fraser:Is it free? Can I get like 50 % off today? And they need to see a landing page and a timer and all these things. It's just a different - They are the kings of consumerism. So their expectations are - And it's not even their fault. It's just the environment that exists there. So you're like in this market where there's other sock brands that are just arbitraging like so many bundles and deals. And then you're trying to be like maybe a legacy brand and it's really hard to keep up. So you have to kind of ride that line between maintaining your brand and also living in the realm of reality where you have to be offer based.

23:31Taylor Fraser:Yeah. Yeah, it's been an interesting experience. One day, Claude said something to me. I felt called out. It said, you have two completely different businesses disguised as one. That's what it said to me. And I was like, oh, that hit hard because I was like going through stats. So I'm going, these are totally different businesses, different margins, different cogs, different behavior on like buying patterns, way different LTV, like everything is different. And so we've now fully split off both businesses, like in the back end and the front end. And so now it's like very much they're looked at in their own way.

24:02You were telling me an interesting anecdote about some of the challenges we've had in Canada with Trump mentioning the 51st state, which he has just started mentioning again a little bit. But talk to me about how that affected your business, both in Canada and the US.

24:18Taylor Fraser:Yeah, that's what I was saying. It's like last year. So we've just kind of got through the wave where last year around this time and like, you know, from whatever March all the way up to now, we had this like crazy tailwind because of the tariff wars. And so there was this negative sentiment on in the political world where Canadians were saying, we're only going to buy Canadians. And then there was also this cohort of Americans being like, we feel for you, Canada. We love you. Like, we're going to buy from you as well. And so we were like running a lot of like, we're proudly Canadian ads in Canada and they were crushing.

24:50Taylor Fraser:And then all of a sudden we were like, let's try them running them in the States, like change nothing and just run them in the States, like post ID into the account. Yeah. And just destroyed. It just did so, so well. Blue States and red States? I would have to look again. I would have to look again, but probably like blue States. Population centers. anyway so yeah just i'd have to look at which states were doing really well um but it just crushed for us and then we just hit these insane numbers like in from what we thought we were going to hit and then it went away and we were like oh the high is over and like the moment's over but then when we came to this year it was like so we want to grow year over year but last year's year was like you know a hundred plus percent you know year over year so this year was interesting because like we had to manage our expectations that we can't really make that moment happen again you know so you can only do so much but i think like when you market around certain moments is really your biggest lever lever other than like performance marketing and then what's been your biggest lever this year honestly just understanding that like we can't create a moment so like we learned this like years ago we were like we're gonna have a summer sale it's gonna to be insane.

26:01Taylor Fraser:Like our black Friday is crazy. So we're going to do a summer sale and it's going to be like, we're going to have two crazy moments. So we tried to make this thing happen and it just totally flopped. Like it didn't flop. It is, it didn't hit our expectations. It was really, really made us realize that what consumers are doing outside of your business, you're better to ride those waves than try to like make your own thing happen. So we take that into everything we do. So like if Mother's Day is coming up, there's going to be a cohort of customers that are really responsible and they go, I'm going to buy my mother something for Mother's Day because it's two weeks from now.