Ep 626: How Wolfe Sells Gifting to Everyone: Top of Funnel Testing, CTV, and AI

0:00Matt Heckathorn:Gifting is astronomical. I never realized until getting into the space the layers that go into gifting. What makes us different is our card link gifting. What messaging have you hit on that's worked the best top of funnel? For us, it's been trying to tell our how-to of our product in 30 seconds and it's very hard. We are really pushing the needle right now with 30i. I think right now you're seeing a shift where average marketers are going away. Elite marketers are starting to really take stage. It's an arms race right now. We see it as we need to figure this out now and we need to figure out the infrastructure and how it actually works before those costs actually occur.

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1:47Matt Heckathorn:I'm doing fantastic. How about yourself? It's a beautiful day in Victoria, British Columbia. I'm still reeling a little bit at some of the crazy announcements that were made at the Whaley's regarding some of the AI media buying that some of the companies are doing. And we're going to, I think, dive in with you a little bit on how you guys are using AI on the creative side of things. But maybe if you could back me up a little bit and give me a little bit of background, give our audience a bit of background on the gifting space you find yourself in with Wolf and the brands that you run growth for.

2:18Matt Heckathorn:Yeah, of course. So Wolf, we help people show up with many moments that matter, right? Today, it may be a gift card, personalized greeting card, or even like a reward program with a company. But tomorrow, even today, we're thinking about technology, kind of like what you were talking about, like where the future is truly going within AI and gifting, but still making sure that we can kind of be relevant within not only the purchaser or the company, but even the recipient themselves and making sure that whatever layer of AI that we kind of indoctrinate into that, that it kind of enhances that experience, not dilutes the experience of gifting.

3:00Matt Heckathorn:Because, you know, for us, we, you know, many people don't probably realize the brand itself, Wolf, but we touch on many different parts of like the gifting ecosystem. So we own Gift Card Granny. That's mainly for one of the larger, you know, gift card market spaces for discounts and other, you know, brands that are out there for gift cards. We also have perfectgift.com. That's actually more of our focal, our point, you know, kind of the brand, you know, the child brand that we really want to see kind of catapult. And, you know, we look at that as more of a modernized gifting approach. It's really focused behind the perfect gift, the quality of that gift that you're actually receiving.

3:39Matt Heckathorn:So there's a lot that goes into that personalization, right? Like we want to make sure that this is not a gift card that's being sent or something that is, you know, hand written by AI, which we can touch on. But, you know, the recipient still feels like it's a warm gift that they, you know, smile from. Yeah, thoughtful, right? Yeah. So it's pretty interesting as we kind of navigate that world and even the news coming out about New York and what they're and kind of making that more of like a disclaimer note. You know, I think a lot of companies have to kind of back up for a second and kind of, you know, pedal back and say, what are we doing with AI?

4:22Matt Heckathorn:How is our consumer kind of receptive to our efforts with AI? Is it responsive? Is it helping them? Or is it actually diluting our message and our brand? I want to dive in deeper, but just you touched on it. What I think I heard this, this is news that's coming out of New York about how they're cracking down in New York state on AI generated images where people aren't disclosing or AI generated humans specifically? Correct. Right. So that is really something that I think a lot of companies, you know, and even though it's New York, this is going to trickle across the entire country. You know, California is going to adopt it and then all the other states are going to adopt it.

4:59Matt Heckathorn:So now we have to kind of plan. We have to really look at that. And I think that's where I'm getting to, right? You're going to have to take a step back to really think and assess what are you putting out there in the public? And is it actually aligning with, you know, kind of that consumer need and their intent? Yeah. I talked to a lot of people on this podcast about the gifting angle of their product. It's sort of like the hidden dark matter of why people buy things online. It's a good chunk of it is gifting. How do you think of how big the gifting space is as a gifting first company? Gifting is astronomical.

5:34Matt Heckathorn:I never realized until getting into the space, the layers that go into gifting alone, but the space itself is massive and there aren't a lot of players. There are a lot of good players. There are a lot of bad players, but with us being in our actual gift card space, we're one of the good guys. You know, we make sure that everything from, you know, what we're touching to the consumer is the quality and nothing, you know, kind of on the back end, you know, that people might feel, you know, could be fraudulent. You know, fraud is a huge issue in the space. You know, one of the things that we are trying to do is actually, you know, not only just make that more of a public service announcement, just, you know, be careful about where you buy it from.

6:18Matt Heckathorn:But because it is such a massive space. but really looking at how we can position ourselves in a way that you can be trusted with us. Talk to me about fraud. How does fraud happen in the gift card space? It's everywhere. So in person, a lot of people would think the old school approach is by email and the prints from Africa. But beyond that, what you're starting to see in a lot of companies get this obviously, right? The robo text or even the calls saying that you're the CEO of the company, you need, you know, they need help and you need to get gift cards. That's not what I'm talking about because that's still a space within the fraud that takes place within gift cards.

7:00Matt Heckathorn:But what I'm really referring to is there are individuals that are out there, organizations that what they'll do is they'll infiltrate even brick and mortar. They'll go in, they'll take the cards, they'll bring them home. They'll identify the pins, scratch everything off, kind of present it back into the store like it was never touched. That person goes to make a purchase. They load a value onto that. Their system identifies loaded value. They take the funds and you're now giving a gift to someone that there's no fund, is completely depleted. And so that experience is bad, right? I mean, think about even yourself as someone buying that.

7:39Matt Heckathorn:Not only have you been frauded, but now you're giving something, someone that, you know, kind of an awkward situation. And those are even things that you don't want to have in gifting. Gifting, you know, is about the smile. It's about the reaction, about the emotion, about the experience. And, you know, it's a shame that those things are taking place, but people don't realize it unless it's happened to you or an individual that you know. So this is one of the reasons for Wolf to have reinvented the gift card. What's behind? Give me the story about what's behind Wolf's reinvention of the gift card.

8:12Matt Heckathorn:Yeah, so Jason Wolf, who's the owner of the company, he's been in the space for a while. For him, he's seen the bad, and he's wanted to make the good. That is his biggest mission in this space is to kind of correct it, kind of lead a good step forward. For what we've introduced, there's a lot of fintech behind the scenes of what goes on. but with perfect gift plus it's our own ancillary product that where when i gift it to you you have the option to decide what you want to do with that we have hundreds of brands to choose from you know and these are large national brands also a ton of local brands as well so if you want to make it more of a personal experience give back to a small business you can you want to convert that into a Visa gift card, you can.

9:01Matt Heckathorn:You want to re-gift it, you can. If you want to add it to Zelle and add it into your bank account, donation, the options are endless. And for us, what really makes sense with the FinTech is that other companies are kind of adopting that same approach of all-in-one kind of card. But what makes us different is our card link gifting. What you have to do when you onboard and you receive, you know, you set up your profile, it'll ask you to link either your credit card or debit card. And the wonder of that is once you match that together, the funds are in your perfect gift account. Say that I give it to you, you end up, you know, turning it into a target gift card.

9:45Matt Heckathorn:You go into the store, you can completely forget you even had this gift card. It could be weeks later and you actually make a purchase. I gave you a gift card for 25 bucks, you made a purchase for$30. Upon leaving the store, you look in your bank account, you actually had$25 deposited into your bank account from us. And the entire fund of that gift card is used. That's one of the biggest pain points within the space, right? You have endless gift cards. I don't know if you could even open up your drawer right now, I guarantee you, you have a couple sitting there, right? At the end of the day, it's more, you know, um, seamlessness for the user.

10:22Matt Heckathorn:And we're also finding ways of even adapting that even even going further. And we're looking at like what technology we can kind of indoctrinate and use for even a faster experience, right? Someone even, you know, I look at it from the approach of what can one person do within one hand? Do they have the accessibility to actually streamline this and get this from purchase to send while going into a meeting? Yeah, it's possible. And That's what we're working on right now. And there's a lot of fun that we see behind the scenes of gifting here. And we celebrate the smiles. And we don't look at a purchase of a gift card as a purchase or a customer.

11:00Matt Heckathorn:We see it as a smile. We see it as an engagement, as something that really brightened up someone else's day. As you're saying, it's a huge market. Your ICP is anyone. Anyone sending a gift for almost any occasion. So in the world of Andromeda and drilling in on avatars and really letting your customer do the targeting, what growth levers have you pulled? Because you guys have grown quite a bit, right? We have grown. I would say that we've done a lot of things. Historically, we've always outsourced all of our marketing. That was one objective, right? Bring everything in-house, but really pull in a lot of great talent.

11:37Matt Heckathorn:But beyond that, we've been expanding our channels. our omni-channel approach has vastly expanded over time. Traditionally, we've gone through the SEM and social route, but now we are heavily in CTV. We're heavily in programmatic. We're exploring OOH. We are leaving no stone unturned as we are expanding. And that's been the fun part, right, as a marketer. You're not stale. You're not stagnant in one space, one platform waiting for the new update. We are constantly testing new things. But with that comes challenges, right? We're expanding so many channels that now we're reaching upon every cohort, like what you mentioned.

12:20It is hard for us to really define and layer in, this is who our exact cohort and ICP

12:28Matt Heckathorn:and persona is. We have ideas, but really at the end of the day, everyone is potentially gifting and or not realizing that they are in the intent of gifting. We talk about top of funnel all the time because our agency started as a meta shop. We've become an omni-channel shop, but I'm always interested in ways that you can truly grow the top of funnel. And when you have, I guess that's the double-edged sword to not having a traditional narrow ICP is those top of funnel sources. If you're sort of an idea whose time has come, this idea of the evolution of gift cards. So by having a TAM who's kind of anyone who's sending a gift, it kind of opens up those top of funnel channels you mentioned out of home radio streaming.

13:12Talk to me a little bit about which of those, I guess, you know, we met at a triple whale conference. So I assume you're using triple whale for your attribution for these sources. But what have you learned about advertising top of funnel in your efforts to do so?

13:25Matt Heckathorn:Yeah, it's been fun. I will say that because even from the top down, so Jason Wolf, the owner of the company, he's a marketer at heart. He has historically been the driving force of our marketing. And we've even had really transparent and candid conversations of, hey, we've always been bottom of funnel. We have to now completely switch this mindset. And this is even territory that we don't know. So a lot of it's exploring. And that's been at least the thing that's been successful for us is having that innate mentality of being bottom of funnel and applying a lot of those approaches to the top, meaning the endless testing and figuring out how you can optimize and looking at different metrics in different ways.

14:10Matt Heckathorn:And I will say that some of the issues that we're kind of seeing is, okay, well, it is such a large audience. We only have such a certain amount of budget and we are hitting that threshold where, all right, we are now starting to shift that budget to top of funnel. What can we still save grace to still make sure that we're still keeping the lights on at the end of the day, bottom of funnel, and still steering this? But then how do we make our messaging more effective to everybody? in a very global perspective. It's interesting, but there are a lot of great tools that have been phenomenal for us in terms of being able to look into that transparency.

14:52Matt Heckathorn:And Triplewell has been one of those that has really helped us leverage that confidence factor of just saying, hey, we are going to take this leap and we know what the return is going to be. We're confident in the shift actually taking place. What the next step looks like, I don't know. What have you learned about messaging top of funnel? Maybe for CTV as an example, what messaging have you hit on that's worked the best top of funnel for that? It's really your hook. The hook is one of the bigger pieces, but I think for us, it's been trying to tell our how-to of our product in 30 seconds, and it's very hard.

15:29Matt Heckathorn:It is very hard. And I think what's working for us more top of funnel is creating not only the demand or the anticipation almost of getting. It is a top of funnel thing that we top of mind thing that we want to always think of, but we forget. You'll think about it periodically throughout the day. And so one of the things that we look at is, okay, there is a lift to that. But then our messaging, how do we kind of segment either our value props or what really drives home to that consumer effectively, and then create those variations and really test. And that's kind of what we're doing. We're looking at really spacing out like our value props and kind of aligning them more effectively with getting that mindset to trigger, I need to gift.

16:16I can just see someone looking in their top drawer and seeing a smattering of gift cards that all have like$5.05 on them that you're just like, oh, what do I like? Because I think that's so many people's experience with gift cards is they'll use them and then they'll have all these unused balances sitting on this plastic that you're like, am I ever going to remember to use this again? And then it's just breakage, right?

16:38Matt Heckathorn:Right, exactly. And breakage is real. And people don't realize how much breakage was on in this space. It is astronomical. Like luckily, people do find their gift cards, but hopefully with us, you'll never have that problem. So digging into some of the tools that you mentioned to do your attribution, is there something that was like in using these tools that sort of surprised you about your omni-channel efforts when it comes to attributing what's actually working? Truly, I would actually say that it worked. I've always historically had looked at Top of Funnel as you're getting your impressions, your reach, you're hopefully starting that curiosity.

17:16Matt Heckathorn:And when you look at other channels that are out there, like we leverage a lot of programmatic, right? Retargeting has always been that historic play when it comes to display. And we are seeing that with CTV. And it is ridiculous to us. Um, you know, it is something to me that we are now testing which platform we want to sit with. Um, that's how good it is. It's not trying which one we can actually find success. It's now which one is more optimal for us. And that is something that I never would have expected. I remember we talked about our performance marketing background. You've been in it for longer or as long as I have.

17:54And I remember buying back in the day where you just, you do these spot buys and then you'd try to whittle down. And it was always hard for me to, especially coming from an affiliate marketing background, to think about those kinds of channels, programmatic CTV as really performative. But I guess once you reach scale, that's kind of what you're experiencing now is when you can actually quantify it properly, you can really make these channels performative.

18:17Matt Heckathorn:Yeah, I think you hit on something really, really big there. And I think I need to have a reality check from time to time of how big of a company we really are. because at the end of the day, we are a startup in Pittsburgh and we have about, what, 150 people in the company, but we feel small, but we're big. And I think you're right. You have that leverage of volume. You have that leverage of so much traffic to your site that you have so much availability to actually do more that it actually starts to work. It becomes more responsive. And you're getting your goals at a lower CPM or CPA than you would have actually expected, where smaller companies might struggle a little bit there.

19:01Matt Heckathorn:You have to be a little bit more tactful. How do you guys think about LTV and retention when your customers may only buy once or twice a year? Man, that is the age-old question for us. I would say that we are trying to determine and figure that out right now with Triple L and trying to leverage some attribution behind it because in leveraging AI, we have so much data that now we're trying to really piece it together. One of the things that historically for us that, you know, we have really two segments, right? We have our business segment, but I know that this is really D2C, which I'll focus on there.

19:36Matt Heckathorn:But, you know, with D2C, it's segments, it's different. We will find people that love our product and continue to repeat their VIPs, right? And they're growing and we're identifying that within our data. But the other thing that we're also identifying is adding to kind of this anticipation. Okay. I know that everything with gifting is always about personalization, heavy impersonalization. I think where it's going is kind of where we're looking at. It's the anticipation layer. So it is identifying, hey, what are ways that we can leverage people to provide more context that we can actually begin to segment because we do find these trends.

20:18People tend to gift historically once a year.

20:20Matt Heckathorn:Why are they gifting? Who are they gifting to? Well, it could be to a coworker that they love this gift card and they just historically, that's what they want to do. Or it's the grandmother who's buying it for every single one of her grandkids during Q4. If we could really identify more under these ICPs and really see what's making them tick and when and how, that anticipation, I think it's going to really catapult us. I brought up in the pre-interview something I talk about on this podcast a lot, my friend that runs a print-on-demand jewelry company, and he's always told me crying is buying. So getting to that underlying emotion of what happens when you receive a gift or the warm feeling you get when you see your gift being used.

21:04My mother lives across the country from my daughter, and so she's always like, do I know enough about what she wants to really give her a good gift. Whereas if you can give her something that can be a gift to any of the places that she might like, it's this warm, sort of safer feeling when you're gifting so that your gift will be used.

21:22Matt Heckathorn:Right. And that's a big thing. You know, we really lean on that a lot. You know, right now it's Father's Day. We are leaning on the angle of dad has a million things, you know, and even at times he might be kind of lenient towards, You know, being brand loyal, you know, historically we've seen Mother's Day is always personalized Visa gift cards. Getting back to your point of experience, of emotion, of memory, of capturing something. Dad has historically been closed loop brands because he's brand loyal. Dad, we know dad goes to Lowe's. We know dad goes to Home Depot. Dad likes dicks. We're just going to get him that card.

22:07Matt Heckathorn:but this is now opening up that whole discussion of dad already has everything you don't know what to get him get him this let him choose and i think that that that really sells because for at the end of the day you know and it's hard for a lot of companies to think this way but we are focused on the recipient first not the actual purchaser of the gift card and i think because we see that as as our loop back, right? That's your why. That's really your why, right? That's the why. And I think that for us, as long as we continue to focus on that of the recipient, I think it solves the answer for the question of the purchaser of what to get them.

22:49They don't

22:49Matt Heckathorn:have to think anymore. They just do this and it still doesn't feel like they Venmo'd them or they, It didn't feel like it's a cheap cop-out approach. It's still meaningful at the end of the day. So we met at Triple Whale, the Whaleys. You were on stage speaking about how you guys are using AI. How in your 150 or so person company, who's driving the AI bus? Is it decentralized? Do you have an AI czar? Is it you? No, I am not the AI czar. We are navigating that as we speak. That has been one of the really interesting things. we are growing an AI team that continues to scale. We do have individuals within every department that is kind of in multiple individuals in every department that is, you know, kind of taking their own leadership approach.