82. How to Make $22M/Year With eCommerce

0:00Every pet owner in America has a 1 in 17 chance of lining Marshall Morris' pockets with money. But as the CEO of iHeartDogs, Marshall's mission goes beyond just profits. And then in addition, they're getting to see kind of like our servant's heart, right? Like how we operate, what we believe in, and what we're doing together with the community. Just traffic itself, it means nothing. You want to attract the people that have the right profile, searching for the right things that are the highest probability user of your product or service. From a content perspective, an SEO, right now our strategy is we're going to have 10x the amount of content we put out.

0:35So in the past 10 years, we did 20 ,000 pieces. You know, in the next 10 years, we want to have a million. You have to be adaptable and you have to be tenacious. You've got to be able to overcome. You've got to think through problems and not be stopped by them. You don't want to reinvent the wheel. You want to keep refining and building your process. So as new platforms come out, as new technology advances, it's really great to see kind of battle-proofed or battle-tested results. and then being able to apply that to your business. I'm your host, Alex Freeman. Join me as we delve into the inner workings of this$22 million a year e-commerce giant, from their genius marketing strategies to their unique community-centric approach.

1:13Marshall, thanks so much for joining us on the show. Yeah, I'm excited to be here, Alex. For those that are on the YouTube channel, they know we have featured iHeartDogs recently on the YouTube channel, but for those that haven't encountered that video yet, can you briefly explain what iHeartDogs is and how you got started in the business? Absolutely. iHeartDogs or iHeartDogs.com, we're a pet health and wellness company. We create products and services to help us live the longest, best life with our pets. From our genesis, we started 10 years ago building online communities around the joy of having a pet, sharing education, and helping others in their pet journey.

1:45And then from there, we looked at the needs of our community and we decided we're going to start solving those one by one. And we've done that for the past 10 years and here we are. Amazing. Amazing. So before you got into the business, what kind of planning did you do? Research did you do? And is there anything that you didn't plan for that you wish that you had? Always. I think there's always look back as an entrepreneur figuring, hey, I could have done this better. But honestly, this was the quintessential build the parachute after you jump launch. We didn't know how to build a company. We didn't know how to run financials.

2:14We didn't even know how to ship products. But what we did know, what people needed, what people wanted. And that came from the communities. So that was key. And so for us, knowing what people want, we were able to go figure out the rest of it out. Now, on the question of what did we plan or what we could do differently, I think if we could do it all again, we would start building email lists and really focus on SEO sooner tactically because we've seen we're a very heavy social company. We've seen that change. You've had to adapt and we've still done it well. But earlier on, if we had to kind of push a little bit harder into those channels, I think we would see an impact because those channels tend to compound over time.

2:48So while we're really big into those now, if we had started earlier, looking back, we probably would have seen even more growth. I want to ask you about tapping into that community. I guess we'll start from the perspective of you as a brand new business and what advice you might have for brand new online businesses to identify and connect with the broader community for their product. When we're building products or brands, what we found is that the communities that have a passionate base of people who self-identify and self-collect, meaning they find a way to get together somewhere, some way, tend to have a lot more longevity long-term for a myriad of reasons.

3:25for when we look at a product itself or a brand itself, one of the first questions is, is there a community existing or is there a community we can build from this? And the reasons why, there's a tactical reason why, ultimately, when you have the right products in the right place, you start generating sales just from association. A community shares it, the community engages with the brand and things like that. And you see that across the board. If you look at Nike, Nike started really in the fitness space, right? Track and field. And so there were communities there. And so it started, oh, what are you wearing?

3:52Hey, what is that? Where'd you get that? those kinds of things that happen organically and those push brands further because you're not just relying on paid spend, meaning you're paying to introduce your property to someone and hoping that they'd buy it. So community is a really important factor. And so when you're evaluating any type of business, a product, a product extension, anything like that, I think one of the best things that an entrepreneur can do is pull back and say, okay, is there a community that can serve while I'm building this? Because not only will it help your marketing costs ultimately, because that is important, you're going to get a lot of idea and a lot of feedback.

4:23and that itself will help you make better decisions. I'm curious about walking the line as you enter into some of these communities with entering with a servant's heart, I guess, to actually like create something that is useful versus coming across as somebody who's just like pushing a new product to be sold. There's this concept that we've embodied since day one and there's a phrase, it's called incremental reciprocity and it's kind of like you give me something, I give you something. Like we're wired like that, right? And so from a servant's perspective, what you want to do is either you're building a community, you're creating a place and you're honoring that and your audience, the way they want to connect and what they want to see and how they want to engage each other.

5:00It's like you're being a steward of that community or you're going to an existing one and you're serving, you're finding how to plug in and serve, find a way to create value. And this is beyond just, Hey, I have a product you should try. Right. You see this in brands, especially one space that is probably really examples in the fitness space. Right. So a lot of brands, fitness brands, but their workout gear, for example, right? Whether it be like shirts and shorts and all these kinds of things. If you notice the strongest brands aren't just saying buy this stuff, they're actually showcasing, they're showing their community how to work out.

5:30They're showing their community how to connect. They're showing their community, they're supporting the community and events, things like that. They're sponsoring key people in their community. And they're also inspiring and motivating the community. And you see a lot of that. And so that's an example of like brands who said, okay, hey, like there's going to be people that get together and work out across all of the world. How do we create a space for ourselves to fluently engage in that in a way that doesn't sound salesy. And there's definitely strategy and tactics, but when you do it well, it's a harmony almost, right?

5:58You just seamlessly fit. What's one mistake that you made when you were building the iHeartDogs community? And what did you learn from that experience? When you're running a company like any kind of online company, ultimately sales solve problems, right? Like you've got to sell products to keep the lights on and things like that. And there were times where we may have leaned a little bit too hard into it. We're like, hey, let the product first and then we kind of had to auto-correct in a way like, all right, hold on. Let's rebuild the strategy from the ground. Meaning like, let's not just push product.

6:27Let's figure out how to get in people's hands. Maybe we can select 100 people to send product to and just get their feedback. It's an UGC, those kinds of things. We learned that lesson too. I mean, is that when you're managing a community or you're part of one, it's a delicate balance because you don't want to take more than you give. That's the ultimate and send and that will kill you. We've certainly had that challenge as well. And it's a real one. It's hard. It's hard out there to do that. But when you do it right, it's one of those powerful things you can build. Listeners, you can find winning blueprints to start an online business on upflip.com.

6:57Check out the site for actionable advice and expert insights from real world entrepreneurs that can help you start your own business today. Marshall, I feel like we've been dancing around the social networks here. We haven't really engaged it directly. So I want to ask, how do you like social media platforms play into this? and what are some of the best platforms for building that community? Yeah, that's a great question. So we're very heavy social. We run 100 Facebook pages, 100 Facebook accounts, dozens of Instagrams. Like if you can imagine, we try to find every single niche in the pet space and build a community around it, whether you own a big dog or whether you own a German Shepherd, right?

7:32Those kinds of things. Or you rescue your dog. There's a community for you. So we're very heavy into this. And that's not going away. So from a social perspective, it really depends on the demo of your audience and where they naturally connect. And this ultimately is one of the biggest failures I see is that people want to build a community where they want to build it. So like, hey, we're going to create this community over here. But the rest of the people who are interested in that topic or that passion are over somewhere else, right? And so the key is you want to figure out where your people are and where they're at.

8:00And then that's where you want to build the community. It tends to look like, now in the landscape today, you've got Facebook groups, typically Facebook groups for certain things. Instagram is really great. It's a personal community, especially sit in these things like that where it's very visual, right? And they want it in the audience, different type of experience. TikTok is one that's emerging too. People are learning how to manage trends there. Ultimately, you're going to have to find and figure out a way to, we use the word acquire, but really opt in to connect with people via SMS, email, like directly.

8:31Like the direct connection is absolutely key. So all those social platforms really work well for different reasons. We're seeing emerging ones and we're learning a lot from an organic presence in a community. People just show up naturally and are drawn into those kind of communities. It tends to be Facebook or Instagram. And then obviously TikTok is emerging too. And they're kind of trying to figure that out as well. The other ones that right now, there's two more that really you see a lot happening on Twitter. One, it's a different type of community. Again, it depends on who your target is and where they naturally connect.

9:03And another one that's really surprising us lately is Reddit. So the Reddit thread from people who follow these Reddit threads, I'm seeing a lot of opportunity in supporting the community and adding value because there's, again, 90 % of people or more just instantly think about the transaction. Buy this, take my stuff, buy my stuff. I want this. But if you go in and try to add a lot of value and you do that consistently, you can be successful across any platform. Now, you mentioned that it was important to move those potential customers and eventual customers off of the social platforms into email lists, SMS marketing.

9:34I want to get into the how, but the first question there is obviously that why, why is that important? All these platforms ultimately are run based on the economics of revenue, right? At some point in time. So like they're sure with Facebook in any public company, like Twitter's private now, right? But there's forces that drive their decision-making that's not necessarily community minded. The forces that drive it tend to be based on revenue, tend to be based on shareholder value, tend to be based on other things, right? So when they decide that, and we've learned this, because remember, this is only 10 years old.

10:07We've learned a lot through these platforms, that ultimately you could build in one platform and it could be in your favor. And then this happens quite a bit where they change something in the algorithm, because remember, they're all algorithm driven to some extent. And ultimately, all that work kind of changes, right? Like you're getting a ton of traffic or a ton of people seeing your posts and all of a sudden they're not, right? You've got to hedge your bets. This is very similar though to the retail concept. So if you have a retail store near a Starbucks, right, bar none, you're going to get a ton of traffic.

10:35Starbucks just brings in a ton of traffic. If that Starbucks is gone, right, which you don't control, all of a sudden your foot traffic can rapidly decrease, right? So it's a similar model of like, okay, how do I make sure that I can reach my people regardless of what happens on the platform? And that's where acquiring email and SMS, we're getting people to sign up. There's a few different ways you can do that too. It's extremely important for the longevity of the business. Just to give you guys an example, kind of behind the curtains. So we started this, we really started ramping up email about four or five years ago.

11:02We have probably 5 million emails across our whole infrastructure. If Facebook goes down, we can still make money. So it certainly is advantageous to hedge your bets, even though sometimes you feel like you're really winning. That's great. But ultimately, you want to control your destiny. That does bring us to the how. How do you then move them either off the social platforms or acquire them in other ways to get them onto your email list? How do you start that process and how do you make sure that they don't subscribe and cancel immediately? Right. So there's a couple of different ways. One is when you're thinking about acquisition or acquiring new users, there's the transactional component.

11:35That's what most people think about. Subscribe, meaning pay me something, right? Or buy a product. Obviously, that's going to happen there, right? You're getting data. There's got to be a top funnel. And I think that's really where a lot of brands miss. For example, we'll do in the pet niche, we may do a training guide for free, 100 % free. Ton of value. We invest in it. You're the best trainers in the country or in the world. Put together a course, right? Roll it out for free. Hey, it's free, right? We're at a ton of value. People who sign up now are acquiring their email. We also know more what they're interested in, right?

12:04We do the same thing actually in multiple different ways. So we'll do one, for example, maybe there's natural remedies. People are looking for things, high search demand. People are looking to solve the dog's allergy, their dog's itching, things like that, right? We'll create resources for them that they can access via an email. And then that allows us to organically, we have this thing for you. and it's zero charge for our community. Zero. Awesome, I'm in, right? Email, boom, now we know who they are. We know about the tool that we offer. Also, we try to create them in a way that that itself creates information that we can then use to better understand who they are.

12:36So like, it wouldn't be like, we wouldn't do something really general. It's like, oh, how to be happy with your dog. This too general. It'd be very specific, right? So like a training guide may have a few key components in it. We know who take that guide, they're interested in those things, right? If it has to do with itch, allergy, something like that, like your dog's itching a lot or you're having issues with that, it'll be specific. So we create free resources and we've done this for years and it's worked really well. And we do digital, which is awesome because it's free. And we're actually set up to do physical.

13:02So we have our own fulfillment center that we built from the ground up. So like we can run free stuff where people actually just pay a couple bucks for shipping and they get something free. But it's an acquisition tool because now we know what they're interested in. We get their information. Now I have a way to connect with them outside of social or outside of pay. Once you've got the list, How are you then taking advantage of that? You've brought them in with this great value proposition, and then now they're there. How do you nurture them and get the most engagement from those subscribers? The technology platforms, especially email providers, have gotten far more robust.

13:34And especially with AI, it's been an incredible journey in the last six months, just to say the least. So what we're doing is when they come in the funnel to a specific funnel, they're going to get tagged. There's a topic they're interested in, right? That they've engaged a resource around free. And so digital or paid, right? So they're going to go into a funnel, they're going to get tagged based on that stuff. And then we're going to actually build an automation sequence via email. So it automatically goes out with specific information that's relevant to that. So can we add more value? So they come in for one thing, then we add a ton more value through automations.

14:03In that automation sequence, there are opportunities, there are soft asks where they can say, hey, look, here's how to solve X, Y, Z. Here's what other owners are doing. Here you go. Oh, and by the way, if you want to try this, it's 20 % off. We'll weave those in there in a non-salesy way. And so for us, it's two things. One, it's, hey, we want them to know us as the expert for this condition because that means that they're going to trust us when we make recommendations. So it's filled our expertise. Our brands specifically also have a very heavy give back program and everything. We're one of the top fundraisers for animal shelters in the country consistently.

14:37So like we'll weave that in as well. So someone who comes in for one thing, they're getting a ton of value. They recognize that we're the experts in an area because we've hired the best minds in the world to write content. And then in addition, they're getting to see kind of like our servant's heart, right? Like how we operate, what we believe in and what we're doing together with the community. And usually through that process, they get to know who we are and they actually become connected to us in a deeper way than just a transaction, right? So like we're able to warm that up. Again, that happens because we're getting fighting something up front that's a tremendous value for them.

15:10It solves a problem. It solves a need. And then they're willing to lean in as we connect with them more. So tactically, you're looking at your top funnel is, you know, free resource or digital physical product, something that gets in the door, identifies who they are. And then you're going to basically create, build an automation sequence that supports them at 10 years to add value. Right. And then kind of introduces your brand in a really unique way that it's one all one. So how does your email strategy differ from your SMS marketing strategy? You know, obviously they feel similar in some ways in terms of ways in which you're communicating.

15:41You know, they're obviously different platforms, different ways you're reaching somebody. So how do the strategies differ? So SMS, it's a great question because SMS is very personal. If you think about it, like email at this point in time, we get tons of email, right? Like it comes in, we get a whole load of email. SMS is very personal. So it takes a lot more tactful approach when we're doing that. We don't have automations for SMS per se the same way. So like an email automation, we may create a timing sequence based on what we see as optimal time to connect the amount of information that we deliver at a certain period of time.

16:11And the data will tell you that, right? Like, hey, you know, an email every three days or two weeks works really, really well, right? Where one every day is too much, those kind of things. SMS, though, is a different beast. SMS is very personal. And so when we're SMS, we tend to use, you know, 20%. So from our marketing perspective, you know, I would say that email comprises maybe 80 % of what we're doing. And maybe SMS is 20 % because you have to be a lot more tactful. We all sign up and get SMSs from brands and we've all gotten way too much. So you've got a very, very selective with SMS. We tend to use more of a personal approach, meaning it'll come from me personally.

16:49So like the first SMS might be a note for me. That's it. There's no link. There's nothing. Just literally saying, thank you. This is what we're doing. We appreciate you. That's it. And so you try to continue that cadence because again, it is a very personal medium. You don't want to blast it the way you do email. So we just have a strategy depending on how people respond. And we tend to take way more personal approach with SMS. How do you go about building an SMS list? Is the top of the funnel look the same for email? It does two different ways. I mean, you can actually, when you're doing acquisition, you can have people opt in via SMS and email as well.

17:22Some people do both. So it's very much fundamentally the same, but the way we communicate with it, again, like I said, it really does take a different strategy to do it well. It's the same top funnel. We do run some campaigns where it's specific SMS. Like, hey, if you want this, like drop your number, we'll text it to you. right that's another way you can do it versus like hey go check your email it's like hey we'll send it to your phone right it depends on the product too because like if it's a product they're going to if it's like ebook or something they may not want to read that on the phone per se right because it's in the talks and stuff so we might default to email and have SMS as an option we're rolling out this new pet rx card which stakes 90 on their pets discounts pharmacy up to 90 that's a physical card like a cost card kind of thing right so like we'll just SMS that to them it's free and they save up to 90 % on their pets meds.

18:06And we'll just literally push it on there, boop, and your car shows up on your phone. You could save it. So it depends on the offer. But again, with SMS, we're a lot more tactful about how we use that because it's a very personal medium. We've covered the social side of getting folks to your site. We've talked about some of what's going to happen when they actually land there. But I'm curious how organic search plays into your strategy as well. Can you just kind of talk about that initially and then we'll dive into some kind of hows and what's involved there? We're really excited about organic search.

18:33Even now, a lot of people have mixed feelings about it because it's one of those things, again, like anything else online where you can run a strategy, it can change based on an update or things like that. We found that for us, we've been writing content for 10 years. So we have probably 20 ,000 pieces of written content that we've written, like not AI, like had an expert write. And so we have a high rate in Google. So when we tend to create content, it sticks faster than a site has a lower kind of domain authority, right? So for us, SEO has become more and more a channel and a focus for us, especially when it comes to our niche.

19:06Some niches have very high search volume because there's so many questions. Those tend to be around, if you think about it, anything around health, a pet's health, your health, right? Those kinds of things tend to have a lot of search volume because you're looking for information that you just don't have in your circle, right? Like expert stuff. And so for us, we look at searching, great opportunity to introduce people to the brand. We run our acquisition through that too. And then also we help people find products. So we'll look at the way people are searching for certain things. Because people are using the search to solve problems.

19:37They're getting information, they're solving problems. That's typical legal search. So we're writing content nonstop around what we're finding, branding searches, those kind of things, to help answer those questions. And I have to give them options to take action. So if they're looking to solve problems with the pet, write around this thing, like, here's what you need to know. Here's everything to make you as informed as possible. And then, by the way, here's some options you can jump into right now, whether it's go to Amazon and buy that from us or whatever. One of your choices. So we try to be very neutral in how we write content, meaning that it's not just about us.

20:09We're trying to give them as many options as possible. If you channel a product in there, if you can't, that's fine, too. But search is a powerful tool. And it's just built in. And people are like psychologically ingrained to search Google. And so you can't ignore that. We don't feel like we can. So we do that. The other thing we've been doing this year, which is really big for us, is using AI as a way to generate content that then goes to our writing team. We think that big picture AI and writing is a perfect fit, especially from a just from getting ideation of ideas to core content to research analysis, like stuff that's kind of really would take some hours you can get in seconds.

20:46and then we have a team that goes over that. So for us, from a content perspective, SEO, right now our strategy is we're at 10x the amount of content we put out. So it's in the past 10 years, we did 20 ,000 pieces. You know, the next 10 years, we want to have a million, something like crazy like that. So that's more than 10x, but like we feel like we can do that with a combination of writer talent and then AI. And so for SEO, again, SEO is all about finding people where they're searching that have relevancy to our brands, which is pet health, pet health and wellness, and then getting them engaged there.