Ezra Firestone: How To Build Audiences, Grow Sales, And Stand Out In An Ultra-Noisy Marketplace #BrandBuilderPodcast

The thing that people don't realize about brands that have scaled is they have what's known as the halo effect. There's a reason why eight figures, for the most part, happens in year four, five and six.

Welcome to the Brand Builder podcast presented by capitalism.com I'm Max Kerwick and I advise physical product brands to find their story.

I'm Ryan Daniel Moran and I invest in physical products brands. A physical products brand is arguably the most predictable path to a seven figure business and we advise them, build them, buy them and sell them.

The show goes behind them, tracks their success and hands you the keys to what's working.

Let's dive in.

Hey guys, Ryan here. And as you have heard me say about a thousand times, I'm getting tired of saying it by now, I sold a company in 2017 for a nice eight figure check, which was great, but at the end of the day, all I really care about is passive income. So that's why I'm in this game and that's why one of the first things I did when I sold the company was I called my friends over at Income Store and said, hey, I want to buy some income producing websites. And the reason I did that is because buying websites has some really strategic tax benefits. It also has a very attractive ROI and they can go up in value. So I called my good friends at Income Store in order to see where I could park some of this cash for tax efficiency, for upside, and for passive cash flow. I would do this on my own if I had the capacity to do so. But they're a management team that will automate the process for you. So I use them in order to make it truly passive for me again. I love this stuff. So I would do it on my own if I didn't know the good folks over there and if I had nothing else going on in my life. But it's a really interesting vehicle that I think more people should consider. I've had Ken, the founder here on the podcast. You can search Freedom Fast Lane Income Store and if you want to find that episode, or you could just go to incomestore.com and see more about what they do. But they're always at our events, they're always very compelling when they talk about their model and talk about passive cash flow. And I think you'll really enjoy hearing about their philosophy and seeing how, how their model works, even if you don't decide to use them. So you can go to incomestore.com or search freedom Fast Lane Income Store to find out if Investing in income producing websites is a fit for your goals.

My name is Ezra. I build brands and I also build teams. I'm going to tell you a little bit about what's working for me and what I think that you can do. But I first want to give it up for Ryan Daniel Moran, ladies and gentlemen.

Who apparently really likes ice cream. I'd like to know the story of this picture and why the tiny little one on the top. You know, it's like you really like he went for it and I'm like, with that. And then he sort of didn't commit there at the top. He just kind of went for like a tiny, I don't know. Okay, not about business, we'll move on. So I thought that would play better, by the way. Come on, look at that. It's good. So here's what we're gonna do. You know, this weekend is going to be. Is it the weekend or is it. It's not quite the weekend. These next couple of days you're going to get a lot of really in depth, tactical technical content, which is generally the type of stuff that I talk about. However, I'm switching it up a little bit because what I want to do is give you sort of the overview of what it takes to build an eight figure brand and tell you what I think you need to be thinking about right now as brand owners based on my experience. And so the first thing I'm going to do is I'm going to talk about the problems that you are facing. So I run a mastermind of seven, eight and some nine figure e commerce business owners. I have a blog where I've got a couple hundred thousand e commerce business owners who engage with my content and videos and I get a chance to talk to you. And so these are the problems that our community is facing. Assuming that, you know, let's say you have a six figure plus brand, these are the problems you're facing. Number one, scaling ads profitably. That is like the big, big problem that people are reporting to me when I talk to them. The other problems, there's some dude's head. It was Chris's or no, it was someone else's. It's kind of cool. We could do a puppet show later if anyone's interested. Probably not. All right. Tough crowd. Okay. Crickets like a tumbleweed rolls by when you tell a joke, you know, and just nobody responds. Then the other big problems are money and funding, hiring, sourcing and training, diversification of traffic, source of channel, diversification in general is a problem. For us in this community, growth plateaus, you know, generally at 1 million, 5 million, 10 million and 20 million. Those are like the plateaus where people will sit for a few years and get stuck there. And a lot of you are in that spot. And then finally, and this is one that like, you know, this one is really prevalent right now is life, work, balance and people feeling overwhelmed. Do any of you resonate with these experiences as brand owners? Yeah, one guy says, me, no need to admit to it, but like these are the experiences that you're having. And so I'm going to share with you what has worked for me that will help you with this stuff. So question I get a lot as a guy who really loves this stuff and talks about it and does it really well, is like, hey man, what's the play? What are we doing? What's next? This is me talking about what the play is right here on this picture. So we will cover in the next 26 minutes what I learned from 13 million in advertising spend and 50 million in revenue from one brand in the last 30 months. Ish. Our. This is not all the revenue. That's just the Shopify store revenue from one brand. And I have other brands that have sold about 10 million in this same timeframe. And I've learned what it takes to scale an offer. And it's a little different than like just building a brand of six figures. There's some things that you've got to be thinking about that if you haven't had this experience, you're probably not yet confronting in your business. So that's what we're gonna talk about. It's a little bit different when you do it for one brand, not across a whole bunch of brands. And so.

One thing to know about scaling a brand to eight figures is that the game is won or lost on the back end. It's not the front end offer. Take a look at this. This is that same 46 million in revenue. This is first time customers here, about 30 million. This is. So that's the revenue number there. This is Repeat customers, about 20 million. Ideally you get your brand to 50, 50 every year. And I'm going to show you how we've grown this in a moment. So one thing to know is that if you look at my brand or you look at Dr. Axe or you look at any of these brands that have scaled really big, one thing they do immediately is add more products. Because once you have customers, if you want to make it, because cost of customer acquisition goes up over time, 15% year over year is basically what you will spend. If you're spending 60 bucks to acquire a customer, next year it'll be 15% higher and so on and so forth into perpetuity. And so you have to be able to get more from the customers you already have. Take a look at this. This is 2016. It's the year in this brand that we went from 3 million DOL. We did 3 million in 2015, 17 million in 2016. So that's January to December 31, 2016. Look at the repeat customer rate, only 20% because it was our big year of real growth where we got a whole bunch of new customers in the Funnel. This is 2017. 19 million in revenue, 34%. So now a third of the business was coming from repeat in 2017. Now here's year to date. 2018 so far will probably do about 21 million this year. So a good 15, 20% growth rate, 44.9%. Repeat business at scale. You need to be able to do this. I'm going to talk to you a little bit about how, but the first thing to know is, like, if you're not trying to release at least two new products a year, you're not releasing enough products that are going to make your business work at scale. And I look at a lot of brand owners and they don't have any focus on innovation in the direction of releasing new products. My goal for 2019 is one product a month. I don't think I'm going to get there, but, like, I'm shooting for that because it becomes very, very important if you want to run a business at scale. You should also go all in on email. If you look at email, this was in the last 12 months, you can see 34% of our revenue came from emails. And Even if you're 95% on Amazon, you should still be focusing on email, because it will be. Right now, there's two channels of communication. There's advertising and there's emails. That's it. That's all you have. As a brand owner, you have the ability to communicate with a group of people by running ads to them and emailing them. Now, Facebook messenger is coming up and some other things are coming up, but those are really the two. And so you should send like five times more emails than you think you should. You know, if you're on my email list, you get a lot of emails because they work. So we send a lot of them. We send like three emails a week. We're always running sale campaigns. And so when you look at a brand at scale, you've got to be. These are. One thing we learned about email recently was that if you put GIF images, I think I've upset someone's baby. Is there a baby in the room and have I pissed it off? Sorry, little baby. Oh, you guys are over here messing with me. I mean, was there a baby crying? Did I make that up? All right, let's move past that.

Putting gifts in emails get higher clicks, we've discovered, and that's something you should do in your emails. But what I wanted to point out was that if you're going to do one thing with emails, run a sale every six weeks. Even if you only have 50 people on your email list, you will make more money. If you run a sale every six weeks and you email those people about the sale, they work extremely well and they will be. 25% of the revenue you make from email will come from sale campaigns. And if you look at us, we have our sale campaigns scheduled out through the end of next year. We run about 8 email sales a year. The ones that are bolded are like 12 day campaigns and the ones that are not bolded are like little three day flash sales. You need to be sending far more emails and acquiring emails and there'll be talk about that this weekend. But like at small, if you look at any of these brands at scale, they're making between 20 and 40% of their revenue from email. Which if you're all on Amazon and you're starting to invest some of that money over into paying for ads on Facebook or paying for ads on Instagram or YouTube, getting people to your own website, you want to have email capture and you want to be doing a lot more email because it becomes very, very important at scale. And when you look at, you know, Ryan is really focused on building brands to sell. I have a lot of experience in the private equity and venture capital world doing consulting. Basically what happens is these private equity firms that have hundreds of millions of dollars under management, they're all investing that into E commerce. Right now they're buying up E commerce brands and they will come to me and say, hey, we're thinking about buying this brand for 100 million. It does 25 million a year at 6 million in profit or whatever. Can you vet it for us and tell us what you think about it, tell us if it's a good deal and then put together a growth plan for us. So I get paid as a consultant by these private equity firms. And there's two things that I noticed One of them relates to this and one of them is just going to relate to this overall top. The first is that the people who have grown brands to nine figures look at business differently than we do. The way I used to look at things, having started with no money, started from the bottom. Now we're here. Anybody? Yeah, started from there, man. Working a job, no money, the whole thing. And I would always look at advertising as like, if something doesn't work, turn it off, right? But what I noticed when I looked at the analytics of like dozens of 50 to $200 million commerce brands was that they don't look at advertising that way. They all have one channel that subsidizes all of the rest of their channels. Let me explain. Most of the time it's Google Organic Traffic or Google AdWords traffic. Sometimes it's Facebook and sometimes it's Amazon. But predominantly it's Google organic and Google AdWords for these giant companies. And that will be a very profitable source of customer acquisition or it'll be repeat business. People are coming back and buying from them and they'll be like, for you guys, you know, you might have a brand that does 100 grand a month, all three Amazon sales, maybe you spend a little bit on Amazon, but that channel Amazon is super profitable. So what they do is they then take all that profit and they reinvest 100% of it back into ads on Facebook, on YouTube, on Instagram, on Pinterest, on AdWords to buy customers at a loss, break even or a loss. But they're growing their customer base. So when they run an email sale at the end of the year, they have more customers, therefore more profit. So does that make sense? Have I lost you here? So this is what made us go from 3 million in 2015 to 17 million in 2016 was the understanding of the long game and the understanding of one channel of visibility, one channel of customers subsidizing the rest of our advertising. Change the game for us. And the other thing that they talk about is the customer mix. If your business is at $10 million a year in revenue and 2 million in profit, which is about an average revenue to profit margin for a commerce business of that size. And you have 80% first time customers and 20% repeat customers. Like 80% of that 10 million came from people who never bought from you before and only 2 million came from people who have bought from you before, they call that a customer mix and they call it a bad customer mix. The closer you get to 50, 50 of customer mix of repeat to new People, the higher your multiple. So E commerce businesses will sell for a multiple of yearly profit in general. So if you do 2 million in profit, you might sell for 5 to 8 times that 2 million. If your customer mix lingo term from private equity people is skewed towards repeat business, which is why we run email sales and do all the stuff I'm telling you about, you get a higher multiple. So something to think about as you're growing a big brand. The other thing that you will notice from big brands that I don't see small brands doing is user generated content. You should go all in on user generated content. I cannot tell you how valuable user generated content is. And all it is is incentivizing your customers to tell you they think you're wonderful because obviously you think you're wonderful, right? But if someone else does, it's a more valuable conversion asset for you to use to market your brand. So we take our reviews from our website and we put them next to our products and we put those images out and we run those as ads. We send our customers who buy from us. We say hey, like 15 days after they buy we will give you a $20 gift certificate to our store if you send us a video talking about why you love our products and this and that. We use these videos in ads, on our landing pages, in emails, user generate. We get people to send us pictures. Oh there's some lady, she's real happy. I don't know where the pictures went but like we use them on our mini sites for our products. If you look at big brands, they all are all in on UGC and small brands are not. And if you're going to scale a brand, you got to step your user generated content game up. Sun.

You do for some reason at these events. If I throw sun on the back of something, people really like it. Like I was at 10x this event. Actually there's a little bit of a maybe I shouldn't bring up that whole thing. There's some contention between the. Anyways, long story short, I was at this guy's event and everyone there says 10x. I was like 10x. Sun played really well. For some reason, people like sun.

Does not have to do with growing your business. I should move on. All right, let's move on. User generated content is my point that you're not doing enough of it. And if you want your brand to scale, you need what are known as conversion assets. Conversion assets are pieces of content that you can leverage to promote your brand. There is no better conversion Asset than user generated content. You're not doing enough of it. Frankly, it's kind of all you need. It's your own way of doing influencer marketing. Except for that the influencers who are marketing your brands are just customers who don't have followings. You're making them influencers by running ads to the content they generated for you. You're not doing enough of this, I can tell you that for sure. I've looked at brands like yours all the time because I have a community similar to this, you know, so. Oh, this was the picture I wanted to show you. Our brand is a cosmetic line for women over 50. So we would get them to send us pictures when they're 20 and the pictures when they're 50 and show off beauty at every age. Like.

You can get creative with user generated content, but you really should be using it everywhere. There's two communication channels, emails and ads. User generated content on both of them and your website, obviously. All right, so that was just some stuff that I think that smaller brands who are looking to get to that eight figure level don't put enough attention on. Now I want to talk about the big one that everyone struggles with, which is paid amplification. If you're like me, you subscribe to the idea. This guy's going for the notebook. Right on. Did you just get that? Here, give it up for these guys. Giving you guys cool notebooks, huh? Those things are like, that's like, got like a fancy. I think it's called embossed, am I right? Yeah. Okay. I've definitely made invitations with my wife. We've embossed things. So you got like a fancy embossed notebook. All right. Don't care about the notebook. Okay. So I thought it was cool, you know. So let's review what's happening with paid amplification. If you're like me, you subscribe to the ideology that paid amplification is the right way to build a brand in today's environment because it's a guaranteed visibility source and it allows you to get your product out in front of audiences and see what plays well to those audiences. And I'm going to get into how I think you should be doing that. But it's changing and people are failing at it. And I'm going to tell you where I believe the opportunity is over the next 24 months. Now, I am someone who has spent millions of dollars a year on paid advertising dating back over a decade. I ran an AdWords agency 2006-2009, where I spent millions of dollars a year for physical product brands on Google AdWords, which was search based traffic, very similar to Amazon. Today Amazon is query based traffic, right where you buy ads on Amazon sponsored search, when people type in queries and you show your product page and all that. I was doing that back in the early 2000s for E commerce brands. I had my own E commerce brand. And so anyways, point is I've been buying visibility for physical product brands for over a decade at scale. And I can tell you definitively that what I'm going to tell you to do is what you should do over the next 24 months with paid. So let's look at it. There's a battle for video going on right now and the battle is between YouTube and Facebook. Facebook is investing a lot of money in trying to get some of YouTube's ad revenue because YouTube, their ad revenue is going up year over year. I think in 2018 they're projected to do 4 billion just in the US on ad revenue for videos. Facebook wants some of that YouTube money. It's why you've seen Facebook watch, it's why you see Instagram tv, igtv, longer form content. So Facebook, Facebook really was only good for short form content. Instagram was only good for short form content. Now they're rolling out longer form. So what happened to Facebook is the news feed sold out. So the ad load. Ad load is a lingo or it's a term for. It's a term that Facebook uses to describe the experience of having more ads than inventory in the newsfeed. This is the newsfeed on the iPhone and on the desktop computers. It's kind of like it's your main feed that you scroll through. So there are more people who want to buy ads there than there are space to put those ads. And it's why Facebook this year had a bigger jump than it did last year in cost. Everyone's worried about Facebook's cost going up because they went up significantly because this is their main placement for where they put ads. And they got more people who want it than they have inventory. So they jacked their prices up and that is why everyone is freaking out. Fundamentally this is what happened. And so in the last 12 months, Facebook has tried to solve this problem by opening up ad units and they've opened up mid roll video ads. So now when you watch a video on Facebook, you get annoyed because it stops like 20 seconds in. Anyone had this experience. It's a terrible ad placement because you're watching a video, you're enjoying something and then like someone like me pops up and starts talking to you and you're like, what the heck, man? It's a really bad ad placement. And it's not the answer that Facebook was hoping it would be to subsidize the news feed because people are clicking out of those ads. Nobody likes those ones. Ads and Instagram stories, these are working super well. Everyone is using these. They work really, really well. They're limited to 15 seconds. They open that up, they open up ads inside of Facebook messenger, they opens up ads inside of Facebook Marketplace. So they're trying to find their next news feed placement where people can run ads successfully and make money and they can charge. And Instagram Stories is the best example of it so far. IGTV's gonna come out, Facebook Watch ads are gonna come out, and Facebook is now doing what YouTube did. See, what made YouTube famous and what made YouTube successful was they leveraged user generated content and they allowed you to monetize your videos so you could create videos that were interesting for people to consume. And then based on how many people watch them, YouTube would let advertisers like us run ads on those videos and they give you a commission. Right. It's called Google AdSense. You're familiar with that business model where you make money putting. It's not a good one. You don't want to do it. It's not a good business model because you're creating all this stuff, you're generating all this visibility and then you're letting other people advertise on your content instead of you. But anyways, Facebook just rolled this out. If you're someone like me who's got a bunch of videos on Facebook, they're now incentivizing you to monetize those videos. They're letting you choose where the ads show up in the videos. They're trying to incentivize creators to put videos on Facebook and get paid for doing so. So they're coming after YouTube and they've got this whole thing now when you put videos on Facebook where they're trying to get you to sign up to let your videos be monetized. So that is happening. And I'm getting to a point here. This is Instagram's growth rate worldwide. Projected. Instagram is projected to nearly double from what it was. Hey, in 2016.

It'S projected to nearly double by 2021. And that is wild because people on Instagram consume a lot of, like me as a consumer, I only consume on Instagram. Now. I used to be only Facebook. And before that I was only YouTube and now I watch Instagram Stories and I look at my friend's Instagram feed and that's it. Because it's short, it's quick, I get a window into their life. That is where I consume for the most part when I'm consuming social media is Instagram now. And Instagram did 2 billion in ad revenue in 2016 and it's projected to hit 22 billion by 2021. So what does this mean for you? I'll give you one more stat which is, well, two more stats. 90% of Facebook's ad revenue. I'm getting to a point, something that's going to help you, but I want to give you context. 90% of Facebook's ad revenue comes from mobile. 90% of the money that they make on ads comes from people consuming on their mobile devices, clicking ads, watching videos on mobile devices. The average video watch time on Facebook is six to eight seconds. That's the average video watch time on YouTube or on Instagram it's shorter.

So you need to go all in on short form content. The average watch time is six to eight seconds. What you need to do is look for ad units. They're gonna start popping up everywhere. Instagram Stories is a great example of it. Mid roll video ads is a great example of it. Although it's a terrible placement, creating short form video is where you will get the cheap inventory. Short form videos between 5 and 15 seconds long that make a communication and have a call to action. This over the next 12 to 24 months is where you should spend a lot of your money. And if you don't have this ad unit, if you don't, if you, if the only ads that you have are 30 seconds, 60 seconds, two minute videos, you're going to spend a lot more than the people who go out and make short videos in addition to those. Because this is where how people are consuming, they're all consuming shorter and shorter and the inventory that's opening up is only for short form content. Instagram stories, mid roll videos. This is really what is going to make your advertising effective and cheap over the next 12, 24 months, if you're willing to do it. And that doesn't mean you shouldn't also run ads in the newsfeed and long form videos and all that stuff. That just means that like as someone who has been advertising and understands these trends, I'm going all in on short form content, all in for my brands. And I'll explain what I mean in a moment and how that actually looks. But this is worth doing and it will make you money over the next couple years. This is an example of a product focused 10 second video. This is someone who would have actually seen one of my products already. So this is a retargeting video where it's short form content, it's just showing off the benefit of the product in about 10 seconds. Here's another example of it, right? You don't have to do them this highly produced, this one doesn't even have audio and it works super, super well. There's no music, there's nothing, there's just the montage of the benefit of the product. But it's cheap to advertise this because it's filling remnant inventory. It's filling inventory. Facebook doesn't have enough short form videos to fill all the mid roll ads, all the Instagram stories and all the new places that are going to open up for short form video content. So you have a real opportunity if you're willing to create it. The other thing that you're going to need to do to make your advertising work is you need to go all in on content sequencing. So here's what content sequencing means. This is an example of someone who visits my e commerce store. You'll notice that at the bottom of the screen you see zero to three days people who visited the store, excluding anyone who visited a product. I'm showing them a carousel of products from three to six days. I'm showing them a video testimonial from six to 10 days. At the very top I'm showing a one minute video. From 10 to 30 days, I'm showing some images. So what you have to understand that today's the other thing to know is when you're doing this, you've got to monitor it and adjust for that particular segment. So this segment, the way to look at your business if you're running paid advertising is in segments. People who watched a video on Facebook and didn't make it to your store, people who made it to your store and didn't make it to the product page, people made it to the product page, didn't make it to the cart. So this particular segment of store visitors, 95% of purchases come within three days. So we've now redone this to do day one we show this. Day two, we show this. Day three, we show this. So instead of having it stretched out over 30 days, for this particular segment, we have three days, three pieces of content and then 27 days of one piece of content. Because only 5% of sales for this particular segment come in that 27 days. Today's sales cycle is longer than you think. Take a look at this. This is people who commented. This is Facebook analytics, by the way. They're trying to also, they're trying to just do everything Google does. So Google has an analytics tool for e commerce businesses. Facebook now has an analytics tool for e commerce businesses. And the cool thing about Facebook analytics, and I'm going to do a video about this on my blog, is they layer in the data from your Facebook fan page, which Google does not have access to. So I can see, for example, how many people commented on a post on my fan page or one of my ads and ended up purchasing. And what we see here is that this is only people who commented on a post or an ad and later purchased within 14 days. 1% of people made a purchase who commented on an ad within 28 days. 2% of people. So two out of 100 people who commented made a purchase within 90 days. That is up to 4%. Your content sequencing, I guarantee you, doesn't go long enough. And this is where big brands excel and small brands don't. Because small brands don't understand that the sales cycle has elongated to be about 60 to 90 days. My wife is an avid Instagram shopper. Girl's on there shopping. Women be shopping. She's on there buying stuff and it's awesome and she loves it and it's cool and she gets good stuff. However, her consumption habits are, she'll see something, she'll check it out, she maybe click on it. It'll be two to three months before she buys that thing. They'll be hitting her with ads. So the sales cycle is really long. Here's an example of another sales funnel. This is a much longer sales funnel where we're sending ads to an article, to a product page. It's. And you can see within seven days, the first week, 1% of people buy. Stretch that out to 28 days. That's almost 2% now. Oops, I went a little too fast. Go back. So you just have to understand that your sales cycle is a lot longer than you think it is. And if you want to make paid amplification work, this content that you're sequencing out over time has to be sequenced out for longer than you think. And this is where I see small brands making mistakes with paid amplification is they only have one piece of content. It's like, oh, someone visited my store. Store set the retargeting window for 30 days and have one ad that doesn't work anymore, it worked two years ago, does not work today. The way to have your retargeting work and the name of the game with paid amplification is retargeting. Get someone to engage with you by watching a video and then follow up with them over time. And this is where the ad units come into play. Because someone like me, I'm only going to see your Instagram story or Instagram one minute video ad, I won't see your Facebook video ad, I won't see your Facebook images ads and I won't see your YouTube ads because I only consume on Instagram. So if you're not running an Instagram story 15 second ad and or an Instagram one minute video, you won't convert me. Which is why you need creative. Creative is the lingo term for images or videos for every available placement. Short form, long form, YouTube, Facebook, Instagram, you have to be everywhere and it's actually not that hard once you get in there or you have one person that's dedicated to setting it up. And one thing that we've learned is that images are a lot easier to create than videos and they work just as well in retargeting. So for all of our top line awareness generation where we're getting new people into the funnel, we're running videos because those work the best there. But then for all the retargeting, for the most part we're running images like these where we're just getting people's attention with compelling images. And one of the things that you'll notice, I only have a few examples here is we always do a hero shot of the product, a headline and some colors to stand out, works extremely well. Sometimes a picture of people's face. But like this formula is working really, really well for our image ads right now. When you're looking at advertising, how's this going for you guys by the way? I'm almost done. So we're getting there, we're almost over. But this is the stuff that like small brands don't know that I want you to know. And I know you're gonna go deep into content, but I just wanna give you like the overview of like here's the stuff you gotta know to do. So when we're looking at the reason that paid amplification doesn't work for people is because most people focus only on product and not on story. Most e commerce brands who are running ads and trying to tell the story of who they are and what Their product is focus only on the product and you actually need both. You have to lead with the story, which is who you are and why you're doing what you're doing. And that's the video. Go to Kickstarter, look at all of the top funded campaigns. Notice one thing in common, they all lead with the story. Here's who we are, here's why we're doing what we're doing and here's the problem we're solving. That is the formula. And you can just model the Kickstarter videos because the ones who are the top funded are all using this and it works. So you have to lead with story based content about who, why and like what it means. Because in today's environment, in today's social media economy, people want to know who and why first. Then you go to product. Only after you've had someone consume content about who you are and why you are do you start talking about what the product is and what the ownership benefits are. And that generally happens in the retargeting pillar. And this is where people get mixed up. They lead with the product and it's like, great, I lead with the product too, but it's on the back end of a three minute video where I first start with who and why and then I go into what and the ownership benefits of the product. You have to do both. And if you're not doing both, your advertising won't work. We're almost here. I got like three more slides or four more slides. I think I'm all in on lumpy mail, like sending out postcards to people who bought from me in the past. There's a new app out there that one of my buddies just bought that I'm helping him with, where when someone enters your checkout and they put in their address but they don't finish it, it'll send them a postcard. So just using tactile physical mail where you can ideally when you're starting on the back end. And a big part of making a brand work is cross selling and upselling. So you'll notice that we upsell in the shopping cart. We're like, hey, do you want to upgrade? We're now starting to test. This has worked. This increased our average order value by like 20%. Just having. And it's dynamic. It's like if you have this product in, we try to get you to upgrade to the next logical step. You have one stick, we try to get you to upgrade to two. You have three sticks, we try to get you to upgrade to the bag, that kind of thing. We are now testing pop ups on the checkout. We're testing in checkout order bumps. This will all be in our app. By the way, I have a booth right out here. I'll be there all day tomorrow. Come hang out, talk to me, tell you about what I'm up to or order bumps in the checkout flow.

This was wild because all we did here was we took all of our products and we bundled them together based on what people most frequently bought together. We now make about 15% of our revenue from these bundles. So if you have at least three products, create a bundle, do a sale around that bundle, put it on your website, use bundles. Bundles are awesome. People like to buy bundles for some reason. And they're fun because you can package all your stuff together and they make a lot of money. Cross selling, upselling, increasing the average order value, bundling your products, you're going to have to do that. Well on this product we have what's known as a price tier order bump where you can have an order bump right on the product offer page by having different pricing tiers where you could buy 2 ounce, 4 ounce, 8 ounce. That kind of thing works really, really well. The average order value from this page went up significantly when we introduced bigger options. And that's the fastest way to grow your catalog. If you sell something and you can sell it in a bigger size, a different size, do that because some people will buy it the last thing. Well, I actually have some motivational stuff at the end but like you will have to make the switch from driver to navigator. I did my whole career as a driver on the road, taking the turns doing everything myself for like when I was a younger person in this industry. And as you scale and as you learn to delegate, your skill set has to be that of navigator. Because when you're on the road, you, you can't see the mountains in the future. You can't see what's coming up. You can only see what's right in front of you. And it's your job to come to events like this and figure out what the strategy is and hold the container and be the person who sets the vision. And you can't do that when you're driving. And you're going to drive at some, you're going to probably drive 80% of the time when you're starting to learn this skill set. But eventually you want to get to the point where you're driving only 10% of the time and the rest of the time you're navigating, strategizing, holding people accountable, talking to people about what they did. So if you can bring on one good person, man, the amount of value I have now, 70 plus on my team, I went the friends and family route and I have a whole course that you can get from me at my booth on how I did this and how to scale teams and how to run organized projects. And it's taught by Colleen Taylor, who's my coo. Give it up for Colleen Taylor, ladies and gentlemen. She's. Before Colleen Taylor, the back of our business was chaos. After Colleen Taylor, the backdrop of our business was like, smooth. You know, Anyways, how are you to work for? You know, do you give people good benefits? Do you have a comfortable work environment? Do you give people autonomy? Do you set a container? Do you give them support and feedback? For example, when I bring someone on, I say, hey, look, within two years, I want you to be the best social media manager in the world. Here's how we're going to get you there. You're going to go through these three courses. You're going to take notes, you're going to read these 10 blogs. They're going to populate into the Slack channel. You're going to spend four hours a week reading these blogs. You're going to take notes. Once a week, we're going to meet, we're going to talk about what you learned and how you think we can implement it. You have to give people a container. People say, I brought someone on and they weren't good. And it's like, no, you weren't good. You get out of someone what you put into them. If you're not investing in someone and giving them the opportunity to grow and setting goals for them and giving them a way to get there by sending them to events, you're never going to have a good team. You know, we believe in people over progress and we believe that like a happy team is a winning team. So we invest a lot in the culture and in our team and in educating people and giving them opportunity. And I think that, like, at some. If you want to scale, you're gonna have to get good at this. I got a whole course on it. But invest in the team and that's one person. Get one person to come in. You can. My experience has been that two people plus outsourcers can get to low seven figures. Three to five people plus outsourcers can get to mid seven figures, maybe eight figures. You start to see five to nine, five to 12 starting to hit that eight figure mark. And that's just generally what it takes to the infrastructure to grow a brand. And so you're gonna have to get good at this at some point. Last technical thing is that 85% of web traffic is mobile. 85% of the traffic to your web pages are mobile. So you're gonna need a good looking mobile website and you really need one version of your product page for mobile and one version for desktop. They're two totally different buyers. I want to show some updates that we made that doubled our mobile conversion rate. So this is our mobile site. You can see that when you scroll down, as soon as you start to scroll up, there's a little button as you're scrolling down, there's a little button that you can click that takes you back to the top. If you start to show scroll intent, the menu drops down at the top. We've got a nice clear menu there. You can go to our website, I'll put a link to it, or you can come find out at my booth. But basically the header of your website on mobile is worth 10% of your conversion rate if you update it and make it nice and easy to use and make it easy to consume on mobile. The other thing that we learned is that mini sites work really well. So this is a product page, but it's a product mini site where we have a homepage about the product with kind of the video that explains what it is, a little bit of sales copy and then we have a story page that's more of like the sort of long form, left, right, content about the product. And you can see these on my website right now we've got the ingredients section. Section. Why do we have what's known as a sticky header, sticky footer? You see at the footer it's always there because on mobile you want people to tap through the consumption experience, you don't want them to have to scroll a whole bunch. So if you set it up such that there's only bite sized pieces of content and instead of a product offer page, you have a product mini site, your conversion rate, your time on site goes up significantly. So we have now kind of every one of our products by the end of the year or by early 2019 will be mini sites rather than long form pages. All the same content, but structured for mobile, structured for more ability to consume in a tiny little window. 2017, 25.1 million in revenue for our brands. We spent 6.2 million to generate that. My viewpoint is that we spent exactly right. My viewpoint Is that there is a perfect top line to spend ratio, meaning if you want to generate a certain amount of money in revenue, you're going to have to spend a certain amount. So I think that 15 to 30% of your top line revenue should be reinvested in paid amplification. So if you do 10 million a year, you should be spending 1.5 to 3 million on advertising. The thing about paid advertising is people like, do a little bit of it and then they stop. Have you ever seen a diet or a workout routine work? If you did it two days, stop for five days, did it two days. You have to do it consistently. You have to set a budget and spend it every single day. You have to spend money growing your business. Because when you look at that ad spend 20. Look at those flames. Those are cool. 24.7% of our ad of our revenue is ad spend for last year. The thing that people don't realize about brands that have scaled is they have what's known as the halo effect. There's a reason why eight figures, for the most part, happens in year four, five, and six. It's because as you spend money to amplify your brand, you generate what are known as brand assets. Customer email addresses, people who bought from you in the past, people on your pixel audiences, that is, people who visited your website that you can follow up with ads those pay dividends the next year. So I advocate for consistent investment year over year, Every day spending money on ads because it has a halo that helps your business. So every year your business gets more powerful because it has more brand assets that it can monetize. So you have to really be willing to invest. And if you're not spending at least 15% of your revenue on ads, you're not spending enough. You get out of your business what you put into it. And people try to pull from their business instead of reinvesting. It's like reinvest more, let the snowball build bigger, and then pull out money from it.

The other thing about E Commerce that I have discovered is that you want to be on the premium end of the marketplace. These are some brands that I buy from. Quip, Mjemmy, Allbirds. I don't buy Purple Mattress. I haven't bought Tushy yet. But I know the woman who created it. What I have learned is that, man, it's just as hard to sell a cheap product as it is to sell an expensive product. And expensive products are generally better products and they have a much higher profit margin. So you might as well Play on the premium end of the spectrum if you're going to play at all. So all of my brands that I'm building now, I'm looking for a minimum $75 average order value, ideally about 120, 150, right. Premium level, I don't want to sell $30 products. It's fine. And you can do that. And it's wonderful for visibility sources like Amazon where you get query based traffic. But if you have to go out and buy visibility, buy running video ads, it's a lot easier if you have more profit margin to play with. So premium works better in today's environment. Another thing to remember is it's not about how much you work, it's about what you produce. A lot of people work super hard. They burn themselves out. They're working 18 hour days ongoingly. They're grinding, they're sacrificing, they're hustling in the name of their family, but then they don't see their family and they let their body go to shit. And they have no intimacy or connections or social life. And it's like, man, the way to business will fill the amount of time that you give it. So if you don't set a container on it and stop it at 7pm and start it at 10am or whatever, it'll just permeate your entire world. And people have conflated working a lot with being more successful. And my experience has actually been the opposite of that, that when I work a good amount but not don't let it. And we've all been there, right? We've all, hey, there's going to be weeks where you got to work 10 hour days, 12 hour days, sure. But if that is how you approach business, you're going to burn out. It's not a sprint, it's a marathon. So it's not about how much you work, it's about what you produce. And you can produce more in less time when you feel good. And the one big secret to building a really big brand is consistency, right? Repetition creates mastery. Pick up an instrument every day, you get better at it. The skill set that you want is the skill set of mastery. Every human being, that's the number one skill set to generate. And what it is is the willingness to put your attention in one place consistently over time. That's all the willpower to do that. It's hard. Keep at your business, keep at your brand. If you've got a new brand that you started and you haven't given it 24 months, you haven't given enough time. People quit after 12 months and I'm like well you only built took you six months to build the product and then six months to like get the technology together. You need at least 18 to 24 months to be able to judge new brand. So give yourself time. My name is Ezra Firestone. I've been out of time for like 15 minutes. Catch me at my booth. Thank you so much.

Hey Brand Builders. We hope you enjoyed this podcast by capitalism.com check out our website for upcoming events and additional content about building businesses, building brands and investing. My name is Max Berwick and my mission in life is to transform businesses into brands. If you have any feedback about the show, any guests you want to see, case studies covered, topics explored, or frankly, just any questions about branding in general, just shoot me an email@maxmaxrandbuilderstrategy.com again, that's maxrandbuilderstrategy.com and I'd love to hear from you. One quick note, if you could subscribe to the podcast or even leave us a review on itunes. These things really do make a big difference in helping us book amazing guests and then also helping people just like you find the podcast. So thanks and we'll see you next time.

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