From Customer Journey to Employee Journey and the eCommerce Growth Formula

Welcome to the E Commerce Growth Stories podcast. If you worry about your growth, if the business model isn't working anymore, if you're running out of ways to optimize your E Commerce, or if you're looking to get the E Commerce fundamentals right, then that's the show for you. Hello, everyone, and welcome to a new episode of the E Commerce Growth Stories. I'm Valentin Rado and I'm here with.

Dennis Yu. Coach Yu. Glad to be here, everybody. Let's grow your E Commerce today.

Let's do that. So the topic for today is how can we identify the employee journey versus the customer journey versus the company journey? Because all of those three paths are not aligned most of the time. And if you're an E commerce entrepreneur, you need to be aware of that. If you're an employee, you need to be aware of your own journey. And if you're a marketer, you need to understand the customer journey, because otherwise the whole company is screwed. So that's one topic for today. Let's get the party started. Dennis, when you first hear about customer journey, what do you think about?

Most people think about acquisition, but that's only one part of it. Because if we think of an hourglass, the sand is flowing down the bottom of the funnel is where there's the difficult point, right, where it's narrow, but then it's actually much bigger. And thus, once they become a customer, all the things that you do right from the initial purchase, where you give them another offer, where you say thank you, you follow up, you ask for feedback, there's referrals, there's all the content that you're creating when you're thanking your customers is the increase of ltv. I think of the customer journey as not just the typical funnel, but it's more importantly the bottom half of this hourglass. And so all the processes that are necessary to grow our companies, like increasing LTV so we can spend more money on ads, so we can hire more staff, so we can do the kinds of things that bigger companies can do, means that the more we can leverage the bottom of this hourglass, the more we're going to be able to do things that are related to the employees and to the company itself. And the mission, because the mission of the company is only as valid and credible as if you're actually backing it up consistently with customers that love you. So the more you focus on these customers that love you, it's great for you, it's great for the employees because you can show the employees as they're helping out the customers. And then that reinforces the company story. So a week ago I was in San Francisco with my friend Jonathan Pantales and I think we're going to show his data. He's agreed to show all his data inside OmniConvert. So another one, which is great. Where he started off selling chocolates initially from his house until it grew into this big factory. And it grew because of word of mouth, which he then took the feedback that he got from taking care of his customers. He invested very, very heavily into customer support. Not just good customer support, but really good customer support. And that's how he grew and grew his list. So every time he sends out an email, he makes $100,000 easy on the new chocolates that he has and whatnot. And I consider that's part of the customer journey. But the thing is he's not using that as acquisition. He's doing it by increasing ltv. And then I like his chocolate so much, I'm telling all my friends about them. These keto chocolates with no sugar, it's made with monk fruit instead of regular sugar. It has antioxidants, reduces stress, all these different things, that kind of thing is spreading. He's got influencers and these are not influencers who are paid. These are people who, they really like his chocolates. They're really good quality chocolates. It's good service. These influencers are telling people about it and that's also enhancing this overall journey. So I consider these influencer people as like mega customers. They're not just like regular customers. Some of them have 50,000 members. There's this one guy, he just talks about Keto on YouTube. He has 50,000 subscribers. Right. That's absolutely fantastic. And now he's turned into an affiliate. But he was a customer first before he was an affiliate. So I think about the customer journey is not just the top of the funnel, but the bottom. And then everything necessary to have this system which we call the content factory, where we're telling stories. You know, when we're a small company, we tell stories of just the customers. When we're a mid sized company, we focus on the employees. When we're a larger company, we can work on the brand. But it is this progression.

Yeah, that's fantastic. And what I think it's misunderstood by a lot of of marketeers out there is that most of them are hypnotized about the first part of the customer journey, which is acquisition. But then it's the conversion, which is the website experience. And then it's the retention. These are the three pillars of cvo. And when you are focusing on the full, the whole life cycle, you end up understanding why the customers which ended up buying bought in the first place, what would make them stop buying, what was the main source struggle that they have. And when you understand the struggles, then you can reinforce the acquisition. And that's the E commerce flywheel from, from my perspective, this, this is one of the most, let's say impactful things to understand the full life cycle of the, of the customer. Because the ecommerce flywheel is being reinforced by happy customers, the ones that solve the problems. You don't need to be incentivized to talk about the company which has done their job fantastically. And you, you've your own struggle because we talk about the best brands out there, but we talk about fantastic products that improved our lives. And if you focus on that, you will, you will end up having lower CPCs, higher conversion rates and higher customer lifetime value. More budgets to acquire, to get talented people within your E commerce. And that's how you end up growing. But if you ignore the last part of it and it's like going into always dating with new persons and never, never committing. Right. You can't build a relationship if all you are doing is just invite her to dinner.

Yeah. My friend Brennan Agranoff, he's 21 years old and he started. You may have seen the socks with your face or your pet's face. That's his company on PetParty co. And also you can order face of your friends or whatnot or your wife or a colleague@videostocks.com and he started this seven years ago and he did it completely organically. He had no virtual assistants, he had no email follow up. It was just him actually doing the designs and actually printing out these socks himself. But because of what he's done by applying the principles that we're talking about here in CVO Academy, he's spending seven figures on Facebook ads. And when we were doing Facebook ads, he first started it maybe five years ago. He came to one of our workshops, our three day workshops at GoDaddy headquarters or Infusionsoft headquarters. We were doing really well. Our cost of acquisition was maybe $10. And so we were able to spend a lot of money during Christmas time gifting. And it was just the ads were so cheap that we didn't really have to worry about being efficient with the customer journey. We could just spend money purely on acquisition. But now in 2022, with the cost Our average cost of traffic has gone from $4 or $5 per thousand impressions to $15. And our customer acquisition cost has gone from $10 to $40. Right. So now it costs us $40 to acquire a new customer. But we've still been able to grow because we've been able to increase our lifetime value, the number of people that repeat and purchase another set of socks. Because if you purchase socks for your wife, maybe for Christmas, maybe then for Valentine's Day, or maybe for a co worker or maybe for the baseball team that you coach. So we found that actually acquiring people at a cost that is higher than the cart value is actually okay. Right. So even if we spend 50 or $60 to acquire a customer where they only spend $40 the first time, that's okay if we have the rest of the customer journey. And so that's allowed us to continue to invest. We're not spending as much as we did a year ago because we're bidding right at our customer acquisition cost. We put right above our break even roas on the initial purchase.

Yeah, that totally makes sense. And I think an important aspect that the marketeers should take into account is that people are very bad at understanding time. How time works, right. We can't understand timing very well. And that's why companies like Peloton or other type of companies are thriving so much. Because if you pay $200 on a subscription and you're using this freaking bike only six times a year, then you've paid like $33 per session and it's in your own house and you've paid 1500 more to get that bike. So that's why the companies are thriving, because the marketeers, companies know that people are bad at understanding time. But they are falling, the E commerce marketers are falling into the same trap. They are not understanding that besides the customer lifetime value and the customer acquisition cost, there's also the payback time. So you, you need those two things. What is the customer acquisition cost? What is the customer lifetime value? And on top of that, when you are going to break even. Because if you know the average days between the transactions, you will know that maybe in 45 days on average you will break even or maybe in 12 days. And if you know that, then you know how to invest and then you, you'll be able to cluster your customers and to see which are the RFM segments, which are the type of customers that are called, that are having the highest potential to buy from the very beginning and they have the shortest.

That's right.

Cycle. And if you understand those two things, you go backwards. You ask them why they've bought, you look at what the products they've bought, you get the narrative, their own words, you look at how they articulate their reasoning to buy those products and then you change the creatives and then you build audiences based on those narratives and that's how you'll be able to thrive. That's the new way. And I think this is going to be default in three, four years. If you don't do this, you're going to be wiped out because now the is too high. Yeah.

And fundamentally it's on the business model and it's less about marketing tactics and tools and data and the kind of tricks that we'd expect. Jeff Bezos said that the ultimate winner in e commerce is whoever can pay the most for a customer. Which is just another way of saying whoever has the highest LTV can afford bid the most. So my friend Colin Wayne Ehrman, he started Redline Steel a few years ago. Now he's the number one seller and manufacturer of home decor items in the United States. So he's spending seven figures a month on ads on Google and Facebook and YouTube and Instagram. You probably see him there. Right. He has millions of followers doing very well and he used to be able to operate at a three ROAs, meaning he spends a dollar, he gets back three. And thus the payback period was zero. Right. Because on the purchase he was immediately profitable because he was selling things like Tattered American Flags to soldiers for $60. Or maybe in your home you have something with the letters of your name, of your family name, and you buy that for $40. And his cost of acquisition was maybe 15. And the cost of all the other things like manufacturing and shipping and whatever, it gave him a good profit. So his payback period was zero a few years ago. But now because he's grown so much and because the cost of ads have gone up so much, his payback period is now more like two months to three months. And so I think that anyone who can get that payback period in ideally under six months, depending on what you're able to stomach, is where it's going to win. So he's actually losing money now on the first month because he has something he calls $2 Tuesdays. So for $2 on Tuesday you can get one of the new items. So every week, every Tuesday, all these, you know, 40 year old women, they're always excited about, see what's the new item and they might buy the latest item but if they buy, he doesn't really lose much money because he still charges them for shipping, but later they're going to buy something that's $40. So he'll have a loss leader. You know, you go to the grocery store and they sell something for cheap, you know, for a dollar, two dollars just to get you into the store. Because when you're in the store, you enter you, then you're gonna buy all these other kinds of things. And I thought that was incredible because when I first started looking at his analytics, it was heavily ad driven, which is that was the easiest way for all of us in E Comm to drive sales, is just run ads, right? But guess what? His main focus is now on channels. Email. Yeah, email. Email is the key to ltv. And I put text messaging inside email. Text messaging is just smaller email, right. He's constantly messaging people and he's building that relationship. And when people talk about customer journey, it's usually a marketer talking about sending more emails, they're sending more messages as opposed to telling the story. So he was with Donald Trump recently. And some people, you know, maybe you hate Donald Trump, maybe you don't like, you know, you like Donald Trump, I don't care.

I like him, okay?

It's love America, right? And, and so he did that as a way to show that he loves America. And he's giving away gifts to firemen and he's participating in the local politics and like when there's a disaster, he's there to help out and contribute. And during Thanksgiving in the United States, his team is handing out turkeys, right, to all the poor people and veterans and firemen and people who are lonely. He's giving away these different things. But then I would ask you, what does that have to do with selling more monogrammed steel items? Right? The thing he sells are like your letters and a thin piece of steel that's cut out to your name, right? And lots and lots of different things that are cut out to your name. But what does that have to do with being patriotic? Because he was a soldier, right? He was injured. They said he would never walk again. But then he overcame all of this, a big, big story around that, became a bodybuilder, very successful entreprene, helping out all these other entrepreneurs. So why do you think someone like that, who's grown his business from completely broke seven or eight years ago to now, I think he's on track to making $100 million a year, not like that's the only measure of success. But clearly he scaled his E commerce business. And I would tell you what he's done in terms of the marketing adjustments because of all the things that we knew were going to happen in 2020, this is not a surprise. Those things that he's doing now are not a coincidence. So all the things about telling his personal brand story, helping out in the community, elevating these veterans that were injured and just driving all these kinds of connections, driving emails. His email list is so big now, I think most of his sales are probably coming through this email nurture, which is a lot cheaper than having to acquire, acquire, acquire. If we have to only acquire, we're never going to get the numbers to work out in terms of overall things like cac, LTV ratio and so forth. Because we got to, let's just like SEO and ppc. The better we are, we're going to eventually have more and more coming from SEO.

Yeah, I want to tell you a story about this principle of under promise and over delivery. Because at the end of the day that's one of the most impactful laws in trade itself. So I've been with my wife in Greece, in an island, and I had to leave for three days and come back for three days. She was with the kids and with some friends and they got to a restaurant and that waiter over there, when they saw, when he saw her with the kids, he said, stop, I have a better table for you. He got her. There were like 50 restaurants on that street, you know, he got her there. And then he said, for the kids. Do you want some toys? He asked. I mean, the customer journey was the same to everyone because after three days she was eating their breakfast, lunch, dinner every day, you know, every day. The kids wanted there, she wanted there. The food wasn't like fantastic, but it was good enough.

And it wasn't the food.

Yeah, it wasn't the food. And when I got to meet her, I've said, where do you want to eat? Oh, there. It was like, it was like a ritual already. It was like. And I said, why there? Let's go to some someplace else. No, you gotta see this. And I got there and he said, oh, you're, you're her husband. Nice meeting you, I'm gorgeous. Whatever. Take a seat. There's. And he come up with two different bottles of wine. These are from the house because you're, you are one of the best customers. We' but when I looked around, he was doing the same thing that was the customer. Yeah.

Not so special, huh?

Not so special. But it Worked because you had this reciprocity feeling coming back. You know, it was kicking in and you felt bad not to tip the guy. When he came out with the bill, it was like 123. And he said, he cut it out, it's 110 for you. And we paid like 140 because of that. It was this game. But they knew this kind of principles. And at the end of the journey, he knew that we are leaving. He knew that that's our last day over there. He came back with some toys with their restaurant, with some thing like a teddy bear for my daughter and for me bottle with their brand, their restaurant. And he said, every car, every time you come to our island, tell your friends to come to this restaurant. What do you think? When I'm hearing someone, because people from go to Greece, I'm always sending them there. It's like he, he inserted like a program in my brain. So that's, that's how it works. That's Customer Journey at its best. I mean, that guy with his small restaurant, he did everything but like he should write a book about it, you know, because that's how it works. That's Customer Journey at its best. Every single touch point was made so that the dopamine was kicking in. And I was feeling like I need to do more for this company.

You know, Valentin, the things you mentioned about what works for a restaurant or what works in local are the same things that I think all of us that do E. Com need to realize are going to happen in E. Comm. So I'm here in Nicaragua and this hotel that I'm at is not a particularly fancy hotel, but it came recommended by my friend who's about to have the largest company here in Nicaragua. And plus he's the largest ad agency, JC Height. And it came so well recommended because of these common friends and because of how well they treat us. They serve breakfast, they serve dinner. I wanted to have a drink, but it was outside of the regular hours and they still brought me a drink, which is great. Right. And they're very helpful. We needed to print some items. They took care of that. And if I look at the other hotels, there was an. I was going to stay at the Hilton. The Hilton here. And you know, you know, like Hilton and Marriott, these are well known sorts of brands.

Yeah.

And these other hotels have more reviews and are better known. But it's because of that connection. It's because of reviews, it's because of all these other things that are more powerful. So think about all of you guys here, when you go look for a restaurant, how do you decide? Is it because a friend told you? Is it because it's better rated on Yelp? Is it because on Google or Facebook it has a particular feature like they have a really good steak or the service is really good? Those are the same things. The same factors that apply in local are the same ones that apply in E commerce. And I don't see people who are in E commerce realizing that you absolutely have to go nuts with the service. So it's not enough to provide good service. Like, not good service, but incredible service.

Yeah.

Then on top of that from the incredible service, you need to collect their feedback. And I don't mean hassle them to leave a review. I'll leave a review. Leave a review. Right. But interview them, talk, ask them in a mini podcast. You can, even if you don't have a podcast, just say you have a podcast and get them on Zoom for five minutes and say, today I want to honor Valentin and Valentin, you know, maybe I'm rode and I produce these. These microphones like the one I'm using here.

Yeah.

You know, I just want to ask you, you know, some tips on podcasting and how you're able to grow your company. I'm not saying tell me why you think this is the best microphone for mobile. Right. I'm asking you questions about you. Five minutes. I'll call it the Dennis you, Audio pro podcast, something like that. Right. And I chop up our videos and then I turn. That is my advertising, that is my.

Marketing, that is my content strategy, because it's for real. And people see that this is authentic. It's not like you got some famous actor to say, this is the product. And we are in this moment, we need to be all creators. We need to broadcast ourselves. Because many brands, many ecommerce companies are behaving like they are not aware about the fact that they need to have a voice. And if. If they are, they are not aware about their own voice or you as a brand, if you're not aware of your voice, if you're not saying anything different, if all you are doing is carrying boxes from A to B, if you don't differentiate against the crowd, you will not survive. And you have this sample, this. This guinea pigs, which are your guinea pigs, which are your. Your own customers. You have them ask them why they've bought, understand who they are, understand their rituals, when they are using the product, and then, as you've said, fantastically, interview them, use them, because they can help you leverage them and get to the network effect. One more story. Our first customer at Reveal, our new software. I personally went last week to see him. It was the fourth year. He was our guinea pig, right? We promised that we're going to deliver in April. By June, we made it. He always said, yeah, guys, I know that you're going to make it. I love it, whatever. So he's using RFM segmentation with the nps. He's selling office things like Office Depot, but way smaller. They still have something like 150,000 customers. However, what they've realized is that their best customers are producing something like 60% of their margin and they are only 8% of their customer base. So they got Reveal and they've said every time a Soulmate is placing an order, we're going to make the screen go red on the order management system. And there's a countdown timer from five minutes so that the customer service gets in touch with that Soulmate. And they always over deliver. And it's fantastic. Like nobody's buying from other companies here. They went with their NPS, now they have 93. So it's. They have 4,000 people answering every month to the NPS and their NPS is 93. That's crazy. And they are so obsessed with this and that leveraged their business and now they tripled, right? And every year they make this one year project, right? They want to do a one year project and that one year project that they made RFM plus NPS and over deliver to their best customers because they can't afford to. And you, you can't afford to over deliver to everyone. You need to over deliver to the ones that you can afford because you always also have low value customers like 40% of your customer base. You don't even make money of those. You are losing money to acquire 40% of your customer base. And you need to understand those, we call them the breakups. You need to understand who they are so that you get rid of ways to acquire them. It's not like you're not servicing them, but you can come up with ways to fine tune your pricing, your aov, your minimum order value so that you can increase the overall margin of your business. Because profit is key.

Yeah. And so what you mentioned about the Soulmates being the highest value tier in the RFM segments, most people don't know, or maybe they've heard briefly of the 80:20 rule, the Pareto principle, where 20% of the customers are 80% of the profit or whatnot. But because of online because of algorithms, because of this multiplying effect of digital. It's more like 95. Five. Yeah. So five customers, 5% of your customers are 95% of your revenue or even like 98% of your profit. I did a profitability analysis in American Airlines. So when I first started in American Airlines, you know, we segmented by tier because there are people that were, you know, gold and platinum and executive platinum. And I thought, you know, these executive platinum people, there's only, you know, maybe 20,000 of them. They're really not all that profitable. I found. They're actually very, very unprofitable because they knew how to play the game on, how to upgrade, how to use miles, how to play the credit cards, all of this. But then we changed things around and we found, just like you said, with turning the screen red or whatever, we found ways to enhance their status, to make them feel special. Because really, it wasn't the miles. It was that they wanted to tell all their friends how they were being treated so well. How often is it that you want to. When you get a really good, a really special treatment, that you want to tell your friends how well you were treated? Right. Everyone wants to feel like they're being really well treated. And so with just simply the change of acknowledging these customers more because the airlines have a reputation as generally treating people very poorly. But by treating these. And you can't treat everybody red carpet, because that just doesn't make any sense. You can't fly everybody first class. That obviously doesn't make any sense. But what we did in this analysis, which had never been done in the history of the airline, we found that those top tier customers, if we gave them extra special treatment beyond what they were expecting, that the profitability multiple on that was huge. So we had something that we called a customer win back campaign. So we called up all the customers who in the last quarter had spent less money than they did before. And we asked them why. And people would say, well, you know, I died, or you know, someone that the wife died or whatever, or they moved to another city. So they used to live in Dallas, now they live in Atlanta, which is the big hub for Delta, or they change jobs so they're not flying anymore, or they're unemployed or whatever. You know, it's different reasons like that. But what do you think was the number one reason when we asked them, hey, why aren't you flying as much with American Airlines anymore? What do you think the number one reason was?

Maybe they felt that the company doesn't care or.

That'S it. Poor service.

Yeah.

So then when they said poor. So if they gave any of the reasons that weren't one of the important, one of the main reasons, we'd say, oh, you know, very sorry about that, or, you know, whatever. But if they said, which was the number one reason that they said poor service, we said, I am so sorry. I worked for the CEO in the executive office and I want to make it right. So I looked at your account and I see that, you know, you used to be platinum and you are 30 segments away from being platinum this quarter. What if I just go ahead and make you platinum? I'll just go ahead and make you platinum. I'm very sorry about what's happened before. Would you. Would that be okay with you? Right. Or if they already have a lot of miles, we're not going to ward them more miles, we would say, you know, I see you've been, you've been flying with us for 12 years and man, it's. I feel bad about what happened to you on that one flight where the flight attendant was rude to you. How about we give you and your wife some tickets to the opera? I just like to do that just as a way to say we're sorry. Right. And then what do you think happened when we would do something? We give them miles, we give them tickets to the opera, we make them platinum. So we calculated what the cost was of all those incentives and then we calculated what the increased revenue was to calculate the incremental ROI. It was fantastic. It was like 20 to 1. 30 to 1.

Yeah. Did the same thing back in 2010. We've sent 3,000 anniversary cakes to our customers here in Bucharest. We negotiated with the cake shop and we've sent 3,000 anniversary cakes. @ the beginning, we've said that we thought that it's a bad idea, but the leverage we've got, man, from 16%, we were doing post purchase surveys. From 16% we were asking, where have you heard about us? And we were asking, Facebook, Google, blah, blah, blah. And from a friend, A friend recommended you. And then it got from 16% to 60% while we also improved, increased the revenue by 20% month over month after that. So basically that activated the network effect. And don't think that people which are at their anniversary are all happy and they have the family around them and so on. There are people which are single, they are 58 years old, whatever. So they felt so good that someone actually cared enough to deliver a cake at their door. And we were selling only car Insurance. I mean, it wasn't like we were selling cars or something. Way better. But I wonder why the big brands don't do these type of things. Because it's so easy and it's so cheap. If your clv.

You know why they don't do it is because no one's in charge of the customer, and no one's in charge of saying thank you or the customer experience. Most companies, they're organized by silo, PPC and SEO and the website and legal and HR and all this. No one's in charge of the customer. So even though you said it's easy to implement the program and it is, and it's cost effective, they don't do it because no one owns it. So I would ask you and everyone else here, when was the last time you felt that a company cared? Like, they sent you the anniversary cake, they sent you some socks with your face on them. When was the last time? How many days or months has it been? For most people, it's been months. When they open the mail, what do they get when they go to the mailbox and they open the mail? Junk mail, right?

Yeah.

Bills.

Buy, buy, buy, buy, buy. Discount. Buy, buy, buy. We are all bombarded with that.

Yeah. Now, people, I. I get a lot of gifts because people know that I like to give out gifts. So they'll. I've had, like, four popcorn. People know I like popcorn. So I've had four popcorn makers sent to me. I'll open the door like, oh, my goodness, what is this? There's another popcorn maker. I'm like, okay, yep, yep. They're, you know, trying to use my tactic on myself. Okay, fine. But think about what Valentin just said. If you do something simple, like, I know in the world of e commerce, we love to do emails, we love to do digital, we love to do, like, tools that are online. But sending a physical gift, like a pair of socks that cost $20, or sending them a postcard, handwritten, that costs you $3 to send. Right. Think about what kind of impact. I know you could send an email saying, oh, thank you so much for being a good customer, but if you actually had someone handwrite this message, how much more different would it be by leveraging that medium? I think most e commerce folks, the ones that go from making only a million dollars a year to, say, $50 million a year, they know that the physical channel, just like what we said about local, like finding a restaurant or a hotel, those same things that affect local are the same things we need to do for E comm and just making that change, that's a business model marketing change. It is not. Here's a cool tool that I can use, right? It's not a pure online way of doing things. That's the big shift.

And I think it's so easy to differentiate from the crowd because nowadays most there are like it's the attack of clones. All the E commerce companies do the same thing. They acquire customers, they bombard them with discount. They don't wait for them even to get the package and they ask for the next sell. But what if you would do something different? I mean analyzing the whole customer journey. Understand the touch points that you have and understand that the cheapest campaign that you could have is the unboxing campaign because you've paid for the delivery already. You have the box over there, you do a package insert and voila, you made them a surprise. And that surprise is very easy to identify. I'm using metrics, I've talked about it in the CVO academy. So I'm using a simple matrix. You have the usage on one axis and you have the value of the item on the other axis. If you go on the low usage, high value don't go there. But you have high usage and low value like coasters, like I don't know, a hat like things that people use it every day. Amazon used the bookmarks, right? They've inserted those freaking bookmarks on every cell back in 1999. Yeah, mainly that's how you differentiate from the crowded is not so hard to do it. We had one company which was, which was doing something like scratch cards, you know, like a lottery ticket. You get your package is the first purchase and you get a scratch cards and ha. You want this? Go to this landing page to get it. Yeah, it's easy to differentiate if you think about it. But you need to go back and to think more like a movie director. Like what should I do after they get the package? What should I do to make sure that they are consuming the product? For instance in the nutrition in the food industry and beverages. They don't. They, they don't, they don't realize that let's say you are selling wine replacement like non alcoholic wines count. If you don't bother to understand if they consumed the product, let's say you know that they like the product but they haven't consumed it. It's a waste of money and time and energy to follow up on buying again if you don't understand this parameter, like every days between the transactions when the second Purchase is being placed when you, you've just bought six bottles of wine and your pay sits, let's say you consume them in three weeks. But your email marketing team, which is a silo like you've said, they know that they send a follow up every week and that's it. For three weeks in a row you bombarded them with buy again, buy again message. And it's frustrating. So it's like, imagine like your company is someone that you've met and every time you meet that guy, he said, do you want to buy from me? Do you want to buy from me?

It's like, fuck off, get out of here.

You need to have a voice. You need to build a relationship with your consumers. You know, it's not about only squeezing them. It's like you see the dollar bills on their faces. So that's what you need to do. You need to realize, to take a few step backs and realize that you're an individual, you're an actual person.

Yeah, everything about being human. Instead of just buy my stuff like some robot that keeps spamming you all the time and spamming you Inside your Instagram DMs and your LinkedIn and your email and you're like, I get all these text messages saying, hey, would you like to buy another one? Right? Like, no, I, I like your product, but please stop doing this. Right. I think of the, you know, all the stuff we're talking about and building the customer value journey, which is a step by step sequence, you know, what's next? What's next? What's next in a human kind of empathetic, useful way. Not just buy my stuff. I think the best implementation of this is loyalty programs, right. Video games. So everything to do with like game mechanics where people have points and leveling and unlocking and status and feedback and redemption and randomization. All the different things that are part of the tenets of game dynamics, I think are what a lot of us in E commerce have to move to because that is where there's some level of fun in the journey. And I don't mean a pure gimmick like spin the wheel to earn a prize or lottery tickets or something like that, but something that's more meaningful because when you get a gift out of the blue, then it feels meaningful because it's unanticipated and it's something positive. And they don't. Even though just like that waiter at the restaurant you mentioned, he says the same thing that pretend that everybody's special, they still feel like they're Special. So in order to systematize making people feel special, you have to implement a system. And therefore the system by definition has to be gamification. Because the implementation of those rules at the high end hotel, at whatever it is, where this, this amazing above and beyond experience needs to be documented so that other people in the other people, the employees know how to behave. For example, I probably shouldn't tell you, but I'll say it. Anyone who spends at least $150 with us, they buy a course or program, we send them a pair of socks with their face on them. Even if they're in Nigeria, which costs US$40 to ship it, we still send it to them. And so we don't tell them that, right? We don't tell them if you buy a course that's over $150, we will send you this surprise. We want the surprise, right? So like you said, the under promise over deliver these little bonuses that you have, you actually don't you think like including them in the landing page would increase the sale, but it's actually better not to because you need to leave room for surprise.

Exactly. Because that's over deliver, you know, because if it's part of your promise, they will end up, hey, I haven't got my socks, what's going on? Because they will perceive it as being part of what they've bought. But if it's on top of that, they will disproportionately value that, that thing from me. Because this kind of gestures is what we are looking for. So we are these irrational beings which are thriving. To be accepted, to be loved, to feel that we, we belong, to feel that we, we, we are okay. And if, if we give something more that we will feel, the customers will feel that they are accepted and they are loved. And these kind of brands are the ones that are going to win in the future because there are just too many players, there are just too many companies selling the same freaking objects. Who are you going to pick? The one that cares or the one that doesn't care?

The funny thing is that most companies think the way to differentiate is to lower the price or to have a sale or some kind of discount. But all that does is attract the wrong kind of customers. And it also reduces your ability to invest in the customer experience. So take whatever discount you would have had, just put that money into treating the customer better and it almost always wins. Unless you're selling a commodity item where it's like corrugated steel boxes, where it's like all the same thing. You know, but if there's some level of differentiation, it's always better to invest the customer experience than try to discount. And we've learned this one time and time again. We see some folks where they've not been able to sell their product very well, and so they drop the price 20% think that they'll get more sales. Doesn't work. If anything, you can raise the price to create a better experience.

Yeah, it was that same from Joseph Pine, which was writing about the experience economy. Think about what your company should do in order for the customers to pay tickets just to have access to buy the products that you're selling, make that experience so exciting that they will pay the ticket just to have access to buy the products that you're selling. I think that's a fantastic endeavor. Let me give one tip to our audience today. You have this incredible tool which is called Google Sheets or Microsoft Excel. It's so easy to use and you just need some columns over there. So you have different customers, you have different groups, you have your best ones, you have the worst ones, whatever. If it's too hard to apply rfm, just take the best ones and understand what's their aov, what's their purchase frequency, how much they are spending, and then find the customer lifetime value. Then you subtract there the margin that you're keeping from those customer segments and then come up with scenarios like what should happen in order to break even. If I'm carving something like $10 to give them a gift or to give them something else, or not to discount just to understand how much you can afford, what is the margin that you can afford to sacrifice in order to do this type of experiment. And then you do this type of cohort experiment and you will end up learning something. I'm not telling that this is going to work from the first time we had a company. The first time when we did that, it was with the shoe, shoe seller. They were having a lot of customers and they thought what we should be giving and we scratched our heads, whatever. And they realized, hey, we have these slippers that we can't sell because the season is almost tough. It was September and they said, okay, let's send to 1,000 of our new newly acquired customers that have a CLV large enough. Those slippers. What do you think it happened? Those people that got the sleepers had their next purchase in the next 10 days. You know, we got like usually the cohort stickiness rate. It's like how many customers from a cohort will buy in the next month was something like 40%. They've got 60% because of that. So. So those type of things are at your disposal. I'm not talking about the high scale here, but you can do some small tweaks to understand. Maybe you have some goods in your warehouse that you're not selling anyway. Maybe you can talk with some friends that are selling other things and you can do some cross reference in exchange to just cover the cost for those items. So there are many things, but you just need to think outside the box. And that's what we are trying to to help you do with this podcast over here.

I'm so glad you guys are here. There's so many opportunities for us to grow our businesses. I want to see you guys implement the techniques that we're talking about and I want to feature you guys right? Come to Valentino, come to me. And as long as you're willing to share openly so other people can learn, then this is great for everybody. I believe that there's an abundance here. There's so much opportunity in E commerce. Most people are not even doing it right. There's plenty of room for so many people to succeed. Then it starts with something as simple as the customer value journey. Most people have not done this customer value optimization. They're not focusing on the very top customer. So they're trying to sell to everybody. And we know, think about this. You have everyone who, no one wants to admit this, but we all have customers that complain and refund or they're not happy. And the thing is, we know who those people are. They're the ones who pay the least. They're the ones who are not in our core target of the people who really love us. And we know that those people who really love us, love us. They would probably pay double or triple the price because it's worth it. I'm not saying triple your price, but focus more on those people using the techniques that we talked about. They're very simple. You can put them into a systematic way. Have tools like reveal from OmniConvert, do the segmentation based on RFM. So you can actually treat these people and have the right treatment to them. And I want to see what happens to your overall machine. I want to see what happens when, when you treat these people better, you get more repeat purchases, which is a higher ltv. Your NPS score goes up, you're able to spend more on advertising, you're able to treat just those people a lot better. And with the pricing going up, maybe if you do that for example, to push out the customers who really shouldn't have been your customers anyway. Because it should be a privilege to be your customer.

That's right. I want to share something very say that was very impactful for me and my personal life. I had this code from Albert Einstein. I was struggling with a problem and this code popped into my face like, a problem can't be solved with the same type of thinking that you had when the problem was created. And I thought, yeah, it's all in my head. So if you want to change the destiny of your company, you have to change your level of thinking. You have to change your mindset. And in order to change your mindset, you need to learn the mind, Needs food, needs different food. If all you are doing is tweaking those same campaigns and making small optimization things at your local maxima, that's it, you're not going to step up. And with the radical changes, the results are instantaneous. That's the good thing with the radical changes. So do something radical for your company this year. Go wild and over deliver to your customers. But of course, in a way that you're not going to jeopardize your company.

Amen. Because problems, the people who create the problem are usually not the people who can solve the problem because they're still at the same level. So try some new things. The thing is, it's not really that new. These are just principles that you haven't implemented. We know so many people, it's incredible. So many people that can grow to 3, 4, 5 million dollars a year in E commerce. And they got there off of doing just one thing really well. All right. They did email marketing really well. They have really good word of mouth because people love the like one thing. It's crazy. I, like, I've audited so many of these people. They have this one thing they did well. But then I look at everything else, right? Their customer journey, their ppc, their website's broken. Like, they don't collect reviews, they don't have an email sequence to find all these other things. So the odds are you were probably in that category where you're doing one thing really well and these other things you haven't done. But maybe you feel scared to try these other items because it's risky or you're busy or you need to hire someone else or you're afraid the agencies are going to rip you off. But most of these things that we're talking about with segmentation using tools like Reveal and other omniconvert tools are actually really easy. And it's just mainly a matter of just finding ways that you can treat the customer a little better, which actually is internal. Right. So if you do this internally, then mapping out the journey is actually not that big of a deal. And it's core to, you know, you as the business owner, are the figurehead who's in charge of this. Your team is not going to care. They're employees. They're not going to care about your business as much as you are.

Exactly. So, Dennis, we are at the end of this session. I want to announce two things before we wrap it up. First is that we're almost there with the crazy idea about helping people learn how to play the e commerce game. We have videos at the end of last year, me and Dennis, we picked up the brains of other e commerce thought leaders. We made them film themselves opening doors like Kramer from Seinfeld. And they also answered to five burning questions about how to play the e commerce game. In 2022, towards the end of January, we're going to make it live. So stick around. Go to omniconvert.com ecommerce game and you will be able to be among the first one that see it. And the second thing is that me and Dennis, we are working and our teams are working to build a fantastic project about recommending to e commerce people what they should be doing by analyzing the data. So you'll be able to push data from Shopify, from Google Analytics, from Facebook ads, from Google Ads. We're going to crunch the data and we're going to help you understand, make sense of data because there are a lot of analytics tools that you need. It makes you go there and you are lost in all this data. But we're going to help you make sense and prioritize this year and hopefully we're going to give you more status about that. Now we are at the step where we are. We've extracted, extracted, extracted all the data points. We have 50 different data points. That's 50 and incredible. Yeah. And we're going to make it happen. So stay tuned on this. And that's it from me. Dennis, any announcement from your end?

I'm excited. I want you guys to come play our e commerce game. Come learn how you can learn and then with these tools, check it out because it's just like having Valentin or I or other experts look over your data and make recommendations. There's a lot of dashboards that are out there, but imagine if you had one that was a smart tool that would actually look at all your data, instead of trying to make all the different reports, actually tell you what is going on with your data. And then when you implement the changes, like the recommendations we talk about here in the E Commerce Growth Stories podcast, we're going to find the recommendations that are best for you and your situation because not everyone should try to do everything. So imagine a doctor that actually has an mri and so we can scan you and we can determine, you know, maybe I have a problem with my eye and Valentin has a problem with his hand or whatever it is. We're going to give you the right treatment plan based on a diagnosis. So I can't wait to release what I think is like this digital mri. We're going to scan everybody and we're going to tell them what they need to do based on real data. Measure everything. No more witch doctors and Ouija boards and voodoo dolls, right? I think it's time. Modern medicine, modern science in marketing. I can't wait for you guys to play and let us know how it is for you.

Yep. That's fantastic. So that's a wrap. Thanks, everyone, for tuning in today. We'll see each other next time. And Dennis, enjoy Nicaragua, man.