How to grow your eCommerce in the cookieless era

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 the first episode of the E Commerce Growth Stories. I'm here with Dennis Yu. Hey, Dennis, how's it going?

Valentin, Always good and always love hanging around people who are smarter than me so I can learn from them.

I'm doing the same, so pretty much, I guess the universe will decide. Okay, so guys, this is a new season. The intention that we have for the E Commerce Growth Stories is to provide you a lot of insights and to come up with a lot of cool guests to to address a lot of topics that are some burning desires for you to achieve growth. Dennis, what's your intention for this season?

I want you guys to be able to grow in a scalable way using content and advertising. A lot of folks, they can get to one or two million dollars a year just off of having a good traffic source or being good at email or having a good product or being they get some kind of media mention. But what I'd like to do is, is take you guys to the next step. And Valentin and I have a lot of friends who have scaled much larger and because we get access to these other people, I'm here at a mastermind with other people that are doing very well. I want to share their stories, I want to share their techniques and that way you guys can learn and even connect with these other people that we're learning from. And everything that we share is from what we have seen directly from other people.

Yeah, I guess there is a lot of noise in this space and the idea is to cut through the noise because at some point I remember when I was younger, I was just starting off the my E commerce. I was the only guy that I was following was Vinas Kaushik. Yeah. And he was a stud from, from, from the very beginning, let's say. And I remember that I was reading his blog and I was asking myself when I'm going to be able to do all these things. And bit by bit, experimenting, applying this type of insights led me to do the exit from my E commerce company. We were growing like crazy. 250,000 customers, 40 million in turnover, and it led me there in six years only. So I guess and now the opportunities are way larger even though the competition is larger as well.

Yep. Amen. So you guys are here because you want to grow your revenue and you know that direct bidding and the tactics you've used need to be expanded. And we want to talk about what all these different techniques are. And each time, each episode, you're going to learn something new and implement it. So it's like eating a book, you know, the elephant at the buffet, one.

Thing each time that makes sense. So, Dennis, I want to start with the question for human. There are all these crazy tactics and techniques and ways to do bidding, ways to structure your campaigns and whatever in the Facebook ads landscape. What is your, let's say if you would be starting right now as an e commerce manager for a company which has product market feed, let's say the products are not that crappy, what would you do in terms of generating demand?

So if I wanted to generate more demand, generate more sales at whatever the target roas is, I would focus on getting as much of my sales out of the learning phase. So with Facebook ads, because of things with iOS 14, because of these different negative feedback scores and whatnot, because there's less data, because the cost of traffic has gone up, because the algorithm's gotten smarter, all of these things that we've seen have made it so that the companies that are winning instead of just getting killed right now with all the things that are happening, are focusing on just having two or three strong ad sets that are 50 plus conversions per week to be able to get out of the learning phase. So when you can get out of the learning phase, then here's something that Valentin, you know, but a lot of people don't know. The companies that are succeeding on Facebook ads are running untargeted. Their campaigns are very simple and they're not doing micro targeting, they're targeting broad targeting. They're targeting the entire United States, they're targeting entire countries because A, their content is strong and B, objective based bidding on Facebook allows the system to seek conversions at your target, CPA or Target. And that's something that really has taken the last two or three years for the systems to be able to adapt. So wherever you are, I would ask, you know, look in your account and see what percent of your spend is limited by the learning and what percent is past that. So you should have the majority of your spend on campaigns that you are increasing because they're past, you know, they've exited the learning phase and then the extension, the growth from that of those campaigns that have exited. You can, ideally, you shouldn't be budget limited, but you're going to be limited by your audience in your content. Or another way to put it, is the more money you can afford to spend for that traffic, the more traffic you can get. And the better the content, the more you're going to convert, which then allows you to buy more traffic at the same base cost of that traffic. So ultimately, everything boils down to a creative game where. Now, I've looked at so many e commerce accounts on Facebook and they might have dozens of campaigns. There might be like a Black Friday, Cyber Monday, Christmas Spring, Valentine's Day campaign, seasonal, which is fine. But when I look at the big ones, they have Evergreen, they have one campaign. You know, they might have hundreds of campaigns, but usually there's one campaign that is 70 or 80% of their sales, Right? We see that all the time. So I'm asking you guys, you guys are listening and watching. You might have tons and tons of ideas, and they might be great ideas. New tools, new techniques, new channels, TikTok ads or running into YouTube or different kinds of retargeting. Those are great. But look at the winner and see can you get more. And every time I look across various accounts, they might have 10, 15, 20 campaigns, but there's one campaign, maybe two campaigns that are doing really well. What can we do to try to get more out of those particular campaigns?

Dennis, you get there, you do these campaigns. But in order to have these winners, you need to test how do you approach testing into this ad set? So how many do you propose to start with? 10, 20? You add five every day. What's your take on the diversity of the outcome?

So people ask this question all the time, and they want an answer like, oh, you should run five ads and you should spend $20 a day for a week. They want a very finite answer, the recipe. But in this case, we need to start with the strategy, and then that's going to dictate what the specific components are. Here's what I mean. When we test, we want to feed the highest quality signal into the engine because the engine is going to optimize for us, right? With Google and Facebook and any kind of social network or search engine. It's algorithmically driven, it's driven by you choosing a bidding objective. So your digital plumbing has to be set up, right? The conversion tracking, the event tracking, the conversion API automatically integrated with Shopify or what have you, like that. That whole thing has to be there. Your UTM parameters have to be there. Your Google AdWords have to be auto tagged with your Google Analytics. Your search console has to tie with these like you have, you know, you have to be collecting email addresses, you don't have of direct none traffic in your Google Analytics. All that stuff has to be in place to send a clear signal into the machine to then be able to optimize. So assuming you have that in place, you know like Google Tag Manager with all the pixels, email addresses, UTM parameters, conversion API, all those kinds of things. And this has nothing to do with Facebook or YouTube or Twitter or it's just like basic digital marketing foundational tracking in place. Provided you have that in place and you have existing customers that are buying from you from any channel and ideally those are going to show up in Google Analytics. So you can pass that back as a custom audience to Google and to Facebook. And you also have 15 second videos with those customers saying hey, you know, I use Valentin's light and it's really good and you know what I like to do? I turn it on and I change the color and I do these different things. Not testimonials but stories of different people or hey, you know Samsoni, here's a camera and let me show you how do you use this thing in low light mode or what have like whatever people sharing expertise, not selling but sharing expertise, talking about what they're doing, real stories. If you collect those stories and you have all this tracking in place and you have enough volume that you have at least 50 conversions, not necessarily even coming through Facebook, but just 50 conversions that you can, that you're connecting so Facebook and Google can see then what I would do. I know that's a lot, but you need those three components in place, right? The tracking, some level of sales, volume and then content, especially video being made with those customers. If you have those three components in place, here's the first thing you start. You retarget your entire retargeting list. So site wide, 30 day website audience, entire email list audience, which you can later segment into all the different kinds of customers and when they last left you and the different segments that we talked about with Audience Builder. But for now you want to start out with retargeting against people you know are very likely to buy because they've been to your website recently, in the last few days or they're in your email list but they haven't bought recently. Just like whatever, anyone that you have a touch with, which is a remarketing audience, you're then going to run whatever your best performing creative is. So what creative, what product is the best selling? Like whatever, whatever content is the Most likely what has already been proven to work. Not what you think might be nice, but looking at the data, what's been the most successful against audiences that you know are going to be good? Because you already have a first touch and you combine those two. That's your first step, right? Provided you have these three foundational components, your first step is bring the content and targeting together. Best quality content, best quality audiences. Why? Because that feeds the highest quality signal into Google and Facebook and TikTok and whatever ad driven system, whether it's objective based bidding. When you do that, if the initial ads or creatives and landing pages and all this are resulting in sales that are an acceptable roas and acquisition costs for you, then you take, you duplicate those ad sets and now you run instead against lookalike audiences. You run that against, I'm sorry, against your custom audiences. Then you run against the lookalike audience, right? Like a 1% lookalike audience. Because we're extending the signal of what's already. Because the highest quality signal of conversion is your actual customers and then the next is the people who've been to your website or your email list the last few days. You're just constantly moving up the funnel one step at a time. So right then you move to a 1% lookalike, then you move to a 3% lookalike and hopefully by then you've exited on several ad sets. The 50 conversions per ad set per week. If you find one that's winning, put more money against it or extend the size of the audience against it. And odds are at this point you have one ad set that's doing really well and that one you're going to copy that again and you're going to run that untargeted against the broad audience. So what I don't advocate doing, but I've seen a lot of people do and sometimes it works. But I think it's risky is you take a creative that has proven to work, you clone it and then you run it on broad untargeted. Sometimes that works, but sometimes it's just too big of a cliff because the system doesn't have enough of a signal to be able to extend. That's too big of a jump to be able to go. So when you go from custom audiences to a 1% lookalike to a 3% then to broad, that gives you an opportunity to test and be able to learn along the way. Because when you go broader and broader in these audiences, obviously your CTR conversion rate, ltv, all these things start to degrade a little bit. But then as that's happening, you're figuring out, well, is it because the available audience pool of where I make, there's only. Maybe there's only so many people that want to buy this particular thing and I've exhausted that audience. Right?

Yeah.

Or. And not because of my targeting, but because, you know, this even running broadly, there's only so many people that want to buy that particular item. Or maybe it's that the creative isn't quite as powerful. So in order for me to be able to continue to extend the audience, I have to tune my creative just a little bit. Maybe the best performing creative is a mom that's holding the product and talking about it and like, okay, so you're like, what is it about that creative? Oh, it's because it's the mom. It's because she's outside and she's walking. It's because of the way she's holding the product. It's because of how she's telling this kind of story. Like, isolate the angle, isolate that particular aspect of the creative that's working, then make different variations. So if it's the. The mom, then find other moms that are like that, which is trying to get more of the same thing. Is it because of the product? Find more things with the product. Is it because of the background? Because it's dark in the back? Great. Is it because they're wearing a black shirt? Is it because they're saying a certain thing? Figure out what that thing is. Anytime you're testing an ad, there's six or seven different things it could be. Don't guess. Figure out what that is. So this whole testing strategy to your original question on how many ads do I need to make and how much money do I need to spend and how long do I wait? Should I run for a week or a month or whatever it is? Those questions are all secondary to first, isolating what is the content and targeting combination. Once I understand how I'm extending the audiences against content, I can make derivative content and I can have larger and larger audiences. These are both growing together. I think that even though all the advertising networks follow these same principles, the idea of the account to the campaign, to the ad set to the ad, and all of them follow the same thing. Facebook is the one that happens to be the easiest to scale. Even with iOS 14 and all these other changes that have happened, Facebook's still the easiest to scale. I love it when people are complaining because usually these are people who are not succeeding. The People I know, things are going very, very well for them, and I get to see their accounts and validate like this is the case. So when you're testing, test two or three concepts at the same time. Extend the audience larger, which allows. Which by default, increases the budget that you have. Because what you've done is you've manually bid your CPA target, you've manually bid to an ROAS target. So naturally, the system is going to spend more when you have. When you expand the training wheels, if you will.

Yeah, so what I'm hearing, Dennis, and correct me if I'm wrong, you start broad. You start by having all your audiences. You have your remarketing list from the last 40 days, all the cookies that you've captured, you have all your email. And then you do this type of retargeting for all of them. You come up with some of your best creatives that you can imagine. Let's say you produce video or you give your best shot, let's say, in producing 1, 2, 3 creatives not go crazy on producing 50 and starting the campaign three months from now. And then you leave the system so that it starts to learn. Once it learns and once you get to 50 conversions, then that's the moment when you can level up and you can start tweaking. The whole idea is to reach those 50 conversions per ad set. Right?

That's what everyone's missing, is that they have things that are still stuck in the learning phase. And each ad set maybe gets one or two conversions, and then they start creating more and more ad sets and more and more campaigns, but there's no clear signal of what's winning. So you've got to get one ad set to 50. You got to find one winner. And the catch 22 is some people say, wait, but you're saying, try to focus on one winner, but at the same time, you're saying, test lots and lots of different things, like, which one is it? It sounds like what you're saying is contradictory. No, I'm saying you do have to test a number of different items to get to that one winner. Because here's the main thing. If we have a flowchart, the first question of flowchart is, are you at 50 conversions in one ad set? If not, okay, then we need to do some testing, but we're only going to test two or three creatives at a time. Now, what I've seen before is some people say, well, why test two or three when I can test 50? Well, when you have too many things, then you're overloading the system and the limited amount of money or budget you have is being split among so many different ad sets that no one ad set has enough data, has enough juice to be able to get to the 50. You have to quickly, you have to find one that looks good and then try to get that to 50. And everything is based on getting this 50. And the same thing with Google, because once you exit the learning phase, that's when you can really start to scale. And then we can talk about all the tactics on how do you scale campaigns. But until you get to the 50, you can't talk about scaling. Then you're just doing random stuff. It's a very shaky. Your account structure, your campaigns like your account. You do not have a strong advertising account unless you have one ad set that's at 50 because then the engine has, has glommed onto something that's working. Because the thing is like, that's why I said start with remarketing. Start with your content that's already working because you're giving the system the greatest probability, the greatest chance it's going to get a good conversion. It's a clean signal, high quality content that you know works. Not new products, but things that you've seen that have worked and audiences that you've seen that have worked. And then you can test other kinds of creative and other products. Then you can test expanding these different audiences. We got to start down here right before we start moving out, right?

Yeah. I love this take because it's actually scientifical and the same things happen, is happening when you do a B testing on a website. So when you have a website, an E commerce and you have all the funnel, you need to understand where you could be testing because there are so many ideas that you can run simultaneously and the best would be to go where it's the most impactful. So you should be looking at where the funnel is being affected the most and where you have the best leverage. And then you test, you come up with the hypothesis. What I want to do, Dennis, is to go a few steps back and to look at how you craft the creatives because many, many people are misled by the fact that you should be crazy creative first. And I think you should be understanding your, I don't know, your antelope. Let, let's presume you're a hunter and you need to understand what kind of rifle do you need to use. And most of the hunters, AKA the E commerce leaders nowadays are not getting what kind of prey they are after. So they are using the same thing for everyone. And you, you can't. If you want to go for an elephant, then you, you need to, to understand how the elephant is feeding, where is he going to drink water at what hour of the day and so on. And the most important thing after all these years in the E commerce, I think it's that most of the companies are wasting money without understanding who's their ideal customer profile and what they are actually selling. Because we might think that we are selling this freaking thing to track how many steps I do every day. But what I'm actually buying is the peace of mind that I'm actually doing some sport and I'm not bending myself like a monkey on this laptop. That's what I'm buying. And if you sell the product or if you sell the features or if you compare this with the other watch, then you are wrong. Because people are buying the emotion that yeah, I've made 10,000 steps today. Not happened in the last three days, but that's another story.

So that's right. I guess sell the sizzle, not the steak.

Exactly.

Sell the dream, not the product.

Yeah.

You know Valentin, I remember we had Nike as a client for a few years and we were running ads. And just because I'm mentioning Nike and if you're small, that doesn't mean this doesn't apply to you. But think about if we take what Valentin just said, then what does Nike sell? Nike's selling authentic athletic performance. They're selling just do it. They're selling, I'm going to run my first marathon, I'm going to lose weight, I'm going to feel good about myself. That's what they're actually selling. But they sell it through a product of rubber, leather and plastic sewn together by low wage workers in Asia. That's what the physical product is. But the reason why people will buy Nike is even though, you know, there's the shoe factories that are making stuff for Nike and Adidas, it's basically the same factories making everything for these brands. Right. But the reason people are brand loyal is because of those kinds of stories, because of the connections with those people and the values that those people have, which I know sounds like, oh, super bowl ads. We're just wasting money. We don't have time to do these sorts of commercials. We need to drive sales. I understand. Right. But here's the thing. When you're just starting out in E commerce and you're less than a couple million dollars a year, then yes, you need to focus initially on the product and the features and why it's better and how it's unique and slow motion product shots and all these different sorts of things that you see. Like what a shopping cart has. Yeah, right. A shopping cart features the product. Here's the information, here's pictures from different angles. Maybe there's some reviews at the very, very base level. Trying to drive a direct sale. Every ad is, when you're just starting out, is to drive a direct sale because you want to reinvest those dollars back into other things like building email addresses, maybe hiring influencers, this kind of thing. But what we see in 2022 because of the acceleration of social media and this influencer marketing thing is that people buy. People especially under 30, buy because they follow somebody else. So ask yourself, is there somebody that you admire, maybe an athlete, maybe an entertainer, maybe like somebody you admire? And because they use a certain product or go to a certain restaurant, we'd like you go to that restaurant too. Right? And a lot of us think, no, no, I don't fall for that. Just because my favorite basketball player drives that kind of car, I'm going to have that kind of car. You might think that it doesn't affect you. It absolutely does. In fact, us folks who run marketing experiments, we love people who say that advertising doesn't affect them because those are the ones who are the most effective, most easy to manipulate because they think that gravity doesn't apply. Just because you don't believe gravity doesn't apply doesn't mean that gravity, like we love it when people think that gravity doesn't apply because it's easy to be able to sell them. So here's the deal. When you are already driving some sales and it doesn't mean you have to be over $2 million, but let's say you're making more than $10,000 a month in gross sales, which I know is not 10,000 in profit. If you're only making 10,000 gross, then you're definitely not making profit because you have all these other costs. But other people might think that you're making a lot of money, but we know that's not true. But let's say you're making, you know, $10,000 of gross sales per month. Well, in order to be able to grow from 10,000amonth to 100,000amonth, it's going to require scaling to have a higher conversion rate, to have a lower cost per click, and to try to have a higher ltv, like raising the prices, having bundles, different ways of packaging, having better Content tuning your ads in a better way, all those kinds of mechanical things. But from a creative standpoint to your question, what happens with the creative is that it shifts from being very feature product specific to showing stories of people. My friend Jonathan Pantales runs a chocolate factory in San Francisco. He's the manufacturer of chocolates. He's also selling direct, largely because of Facebook ads in the last few years. He tells his story, his own personal health struggles and how he struggled with sugar and how he got fat and how his house burned down and he lost his girlfriend and all kinds of stress. And the stress created more problems with his health because then he wasn't sleeping and then he was eating bad. Because when you're unhealthy and you're poor, you're going to go eat at a McDonald's or something like just. You guys understand, right? So he tells his whole story, and he also weaves in his product. And his product is a hot chocolate that doesn't have sugar in it, but it tastes just as good or better than any gourmet hot chocolate because it uses monk fruit, because of the way it has adaptogens, which help reduce stress. Because a lot of us, we have cortisol that builds up via the stress. So he's educating people about stress. He's interviewing other busy entrepreneurs. He has friends that are. He has one friend who has a million subscribers on YouTube. And this guy is a big keto. You know, the whole keto thing like this, you know, there's some people who are really big on keto. So this keto guy uses his product, talks about keto, and it's not directly selling. Hey, you need to buy Jonathan's product. It's really, really good. He's not like a TV spokesperson, but he's showing his diet. This guy is showing how he's working out. He's showing how he lives his life. And as part of his life, has this hot chocolate, which is part of his ritual in the morning, right? Because everyone's got a morning ritual. They get up, they pray a little bit, they do some exercise, they meditate, they make their hot chocolate. So he shows that as part of his ritual. And then we put that out there on YouTube, put that out there on Facebook. We run ads against it, and it drives sales because now we're telling the story instead of just talking about the product. So the first four or five years of Jonathan, he just had things. So he just had boxes of the chocolate. Oh, look, here's a new flavor of the chocolate. You know, here's this other special October sampler package. So he was focusing on the product, the product. Here's why the product's nice. Oh, look at the new box. So he spent all this time investing, designing the box. You know, when you get a new iPhone, it comes in a beautiful box, right? It's so good, you don't even want to throw it away, right? Apple's so good, right? So he hired these people to make the box of his chocolates look so nice that you're like, ah, I don't even want to open this box of chocolates because it's so nice, right? So he was doing all the things that I was telling you. At the bottom level, when you're just starting, those are the correct things to do. At the bottom level, you're focusing on the product, on the packaging, on the price. You know, buy two, get one free, spend $50 on a gift certificate, get you another $10. You know, I'll make an order. Your next order, next seven days is 20% off. Like all those kinds of things that you start at the very beginning. But because his business has now shifted to seven and eight figures, he can now focus on telling stories. And telling stories allows him to expand the audience. Because if initially he's just on Google bidding for sugar free, gluten free chocolate, right? Or adaptogen or chocolate with adaptogens or reishi mushrooms and ashwagandha. Because his chocolates, he has chocolates contain ashwagandha, which is good for relieving stress and all this. So that's good, right? There's a fair amount of volume of people that are searching for ashwagandha and reishi mushroom, but that's here at the bottom. But then if he's able to tell stories, how much bigger is the audience? That's dealing with stress and entrepreneurship and low energy and being overweight and feeling like they are not good enough because they can't fit in their clothes and they're ashamed of themselves, right? And teaching people about nutrition, about their lifestyle. See, you start from here, which is great. This drives sales because we want to rank on, you know, you do a search for Ashwagandha chocolates, we can SEO for that, we can PPC for this, then that, that will get us to a couple million dollars a year. But now to go to 10, 20, $30 million a year, the nature of the content changes to be more about storytelling. And you don't have to wait to get to $2 million a year to focus on storytelling. If you're going from 10 grand a month to 100 grand a month. I'm telling you, the storytelling that, the little 15 second video. So I'm, I have a number of friends I love to use as guinea pigs. And you know this Valentin, using your tool, collected data. But you can see we're collecting stories with these people. And you would think like in E commerce you would expect that all the ads would have pictures of the chocolates and pictures of the different kinds of products. But what do you see in common? What do you see between, like, here's Tracy Dews, right? She's selling different kinds of water and other kinds of products. What do you see in common with all of these things that are here? They're all people.

People.

It's people. So we are selling our products through people. We start with pictures of the product. You start with the landing page, you start with all the, you know, here's the different pictures from different angles, all the stuff that's the first level. That's when you're just getting going in E commerce. But if you want to scale, you have to have people. So now all these other guys, you know, Seeds of Life is one that we Featured openly with OmniConvert. And the way they've been able to triple their business is by telling stories. So Seeds of Life sells magnolia trees. So originally their shopping cart was just pictures of trees and different kinds of trees. And how do you plant the trees? Like good. You want to plant a tree when a loved one dies. And that way the grandchildren, once the tree grows up really big, they'll say, oh, wow, we planted this when grandma was back a long time ago and now it's grown to the big tree. Now we can remember her because this tree is now so big and all this. But they went from just showing pictures of the tree and talking about magnolia trees to telling stories of people who are remembering their mother, who are remembering their pet, who they make it a ritual. And today was my mother's birthday and she would have been 95 years old. They're telling stories and so they move to the next level because the nature of the content has moved to the stories that are featuring people that collect videos, which means there's a whole UGC process to collect that from the customer. So built into this. So when we get a new customer, we immediately want to call them and say, hey, Valentin, so glad your customer wanted to thank you so much. Tell me, what was it that inspired you to buy? And then you say, well, it was because this one thing happened. And so we're listening to that phrase on what it is. And that's our ad copy. Whatever reason you tell us there, that's our ad copy. We're collecting these zoom meetings, we're turning those into ads.

And I want to, I want to add something here then. It's regarding how you get this type of snippets so that you can create the stories. A valuable piece of information for that, and I think is valuable even though it's undervalued, is by looking at the support tickets, by looking at the chat transcripts. This is a valuable piece of information because you can extract from there these type of codes that are easily transformed into ads. But if you want to go even further than that, I suggest you. And this is how to apply jobs to be done to know your customers better. So even though you have, let's say 20,000 customers or 100,000 customers, Snickers did that and they got millions of customers and that has been transformative for their business. You can just select 5, 7, 10 people so that you can do in depth interviews with them. So you get the best ones and you start asking questions. There's a method called jobs to be done and you have this interrogation method. It's actually being made thanks to Chris Voss, which is used to do this type of interviews from the FBI, right? So you have this interrogation way so that you can get to the nitty gritty to get to the real reason behind. Because people initially, when you will ask your best customers to tell you about the product, if they are happy and if they bought, let's say three, four, five, seven times, they will say, yeah, that's fantastic and whatever, and they are not bad intended. They just want to tell you that, yeah, that's fine, but you don't want to ask that. What you want to do is to find what was the reason behind why they've said today is the day that I'm going to buy a tree from Tree of Life. When was that happening? What was the context? Because people are buying in a certain context. So if somebody is buying, I don't know. I'm a Toyota fan, right? So the fact that I'm 41 years old and I'm into environment a bit, but not that much so that I can buy an electrical, because we don't have too many electrical stations in my small city near Bucharest, I'm not going to buy an electrical, I'm going to buy a hybrid. But the fact that I'm 41 years old and I live near a big city is not going to make me buy. This is not causation, that's correlation. And you want to find the causation what made people buy this kind of product. And in order to do so, you need to ask the right questions. And the right questions are in this type of methodology where you unveil the reasoning, what caused them to do this type of buying. And there are a few jobs that any product is doing. And let me give you an example. We were doing this with a company called the Hush Blankets. They sell weighted blankets. And the owners of the business, they thought that people are buying the blankets because of insomnia or as a present, right? So to improve the sleep. To improve the sleep, not to fix the sleep. After we were doing these type of interviews, a pattern appeared. So most of the customers were not buying it as a nice to have thing to improve the sleep. They couldn't, they barely could have some sleep. So they had a problem that was already clinical. And because they got this huge problem, they have replaced the pills, the sleeping pills, with the weighted blankets. So they were selling something which was a replacement for something very important in their life. So mainly they were firing the sleeping pills for a weighted blanket. But why they were firing that? Because we've got even deeper. They were firing the sleeping pills because the people were feeling knocked out. So when you are a caretaker, when you have kids and you can't sleep, when you have to take care about the others, you don't want to be completely dead right until 7am in the morning because something might happen. So that's why people were buying that weighted blanket. So once we've understood that, then the narrative, the ads, the positioning were changing towards this type of jobs to be done because there were more jobs than to feel the cuddling effect of having a weighted blanket which makes you feel comfortable. So my suggestion is to focus on what's causing people to buy your product. If you focus on the features, if you focus on the shallow aspects, you're not, you're missing out on the, on the real problems. And your ads, even though they are, are going to be crazy creative, let's say, are not going to nail the real problem. And people will not act because people are acting on emotion. It's, oh, yeah, I have this problem also. Do you feel like, like you can't sleep without being dizzy? Do you feel that you're knocked out because of your sleeping pills? Try the weighted blanket. That kind of ad is the one that's moving people towards the product.

Everyone needs to hear what you just Said because the reason people buy is because they want the transformation. So what you're doing is you're selling the transformation. You're showing. This is where they are and this is where they're before. So there's the pain of the sleeping pills and, you know, not being able to get to sleep versus not having sleeping pills and being healthy and the value of eight hours of sleep. So it's not that the blanket is heavy, it's not that it contains these certain ingredients. It's not that it's made in a certain way. Because the minute you're comparing features then that, that's an analytical, rational, left brain kind of thing. So left brain, comparison features. Logical. Rational is when people are shopping, they're shopping for the price, they're looking for a discount, they're looking at competitors. And so that's what you do not. People do not make decisions where they're in that rational kind of stage. They make decisions, like you said, based on the heart. So if we keep them in the right brain, so the right brain side, which is the emotion and the stories and the heart and the pain that they're in, and you're selling the transformation about, oh, this is so painful now. I wake up so good and I'm happy, right? You're selling the emotional transformation, physical transformation, then you're not talking about the product. So that is a key mistake you mentioned with the E Com people. The Junior people are so product focused, they forget that the emotion comes from the stories. The stories are tied to the people. All emotional transformations are tied to individual people. So when I can tell the individual story of Jonathan and how his house in Santa Rosa burnt down, right? You can see kind of these details that everything. Like think about your favorite Pixar movie, what your favorite book. It's all based on a few small details. And so when we have these jobs to be done that we're, let's say we built it into our operations process. So within 24 hours or 48 hours, when the customer buys, we call them and say, how are you doing? Then customer care and operations is not just reactive to people who are complaining. It's proactive in reaching out to them. And you're capturing their thoughts at the moment they bought. If you wait a month later, it's too late, Right? You have to capture them at the end. So if we're capturing exactly the words they're using, oh, why did you buy from us? How did it make you feel? What would you say to your friends? What was the pain that you saw what was your before state, what was your after state. Would you recommend us to other friends?

How do you use the product? How do you use the product? That's another thing. Because people need this type of prescriptions, right? You need to make the other ones feel like they need to do step one, step two, step three. Because this type of prescriptions are already making the others feel like that they are way, way behind the progress that they could be doing. If every morning at 7am you should be taking these two teaspoons of X, Y or Z. Because after your state was the struggling moment. Yeah. You make them feel like, oh yeah, I have this issue, I have this problem, then you should be coming up with the process to get to the state where they are. As you've said, Dennis, people are looking for this type of transformation. Everybody wants to make progress in their life, everybody. So if everybody wants to do this, then we should be finding out what kind of progress is this product helping them to do. For instance, this freaking iPhone is so expensive. But the job to be done by an iPhone can't be done by Huawei or whatever. Why?

I have one too. This is iPhone 13 Max. This is very expensive.

And that's why. That's because we are in a tribe. We want to be perceived as the power users, as the leaders, as the alpha mates. You can't go with the Huawei and to feel like an alpha male. This is the new gun, right? So maybe that's my job to be done. Maybe for a lady, it's another thing. But that's what I. When I've analyzed my purchase behavior, I realized that that's what I'm buying. This freaking iPhone, okay? I'm buying it. That's it. So mainly what makes you switch. You need to understand this type of things. And not everyone is into consumer behavior. Even though I think the the most important discipline to succeed in relationship, in life, in business, whatever, at school is to understand human behavior. And this is an undervalued discipline. And people think they got it, but you actually get it not only after you read free books about it, but after you do experiments. I'm a big fan of experiments. I made a lot of experiments on myself. I've done cold showers, I've gone into meditation retreats. I've got to Ayahuasca in Peru. I got to all these crazy places to transform myself because I want to do experiments. I don't want to just be like a hard disk. So I'm uploading information and I'm not applying it the idea is to experiment. And if you're a business owner, an E commerce leader, you need to experiment. You don't have to just sit over there and tweak some beads with the same old school creatives. Go out there and do some crazy stuff which are consciously decided because if you don't do advanced stuff, you're not going to learn. So theory is nothing without experience and experience is nothing without the theory so that you can improve the experience. And that's why the human beings are evolving, because they have both the theory and the experience as well.

Yeah, I would re summarize what you said to say or the title of this episode is the Lame E commerce marketers in 2022 versus the pro e commerce marketers. And the lame E commerce marketers are focused on tactics and buttons and products and tools. And those things are all good, but they're superficial compared to the pros are focusing on psychology and why people buy. And not just that the iPhone has a bigger camera. It has 1 terabyte of storage now instead of 500 gigs. But the Pro looks at this and says, Dennis is going to buy this iPhone because he cares about the camera. But he cares about the camera, not the aperture and how many photos it takes and low light and all this. But because he wants to capture the best memories. And those memories with his friends are worth so much to him and he's using them in ads and things like that, that it's worth spending an extra fifteen hundred dollars. Because I know with better pictures and whatnot, not because I have a higher status, which is like what you're talking about. There's many reasons why people buy. But for someone like me, I say like, okay, over the next three years, the quality, the extra pictures I'd be able to take, the pictures that are not being ruined because the light is low and whatnot, that is easily worth an extra 10 cents per picture that I take, right? And this seems like this is a very cheap investment if you think about it using that kind of math. Because it ties to what I care about, which is telling stories and taking pictures and visiting friends. Like I'm going to visit you in Romania in a week and a half, right? I'm going to find a way to fly over there to visit you even with all this Covid restrictions and this kind of thing. And that's how important is because. Because that's important to me. Apple knows that I'm willing to pay a ridiculous amount for a cell phone, right? Because they're tying to my Identity. So you guys out there think about what is it about your product that makes it so like a certain feature and it's going to be different for everybody, that people will buy it because it ties to the identity. Right? Make it so that your product is as important as like the iPhone is, you know, because it's premium, because it identifies with them, because the other people that they respect also use this. Right. That's what the pro e commerce marketers are doing versus the lame E commerce marketers that are still worried about three buttons on the landing page versus four buttons or, you know, or making it blue versus red or like those kinds of. That's not optimization. That's not a B or split testing. We're talking about strategy.

Yeah. I want to share something regarding the. Regarding a funny story from. From my background regarding consumer behavior. We were in this car insurance space and we had at some point 20 people which were at the customer support and people were calling a lot. And we made this crazy experiment to do 24 hours support and to help people with any other stuff. They were doing a car accident, they were having a car accident. They needed some information, we were there. So we got 20 people in free shifts and whatever. We were doing this type of load balancing. And at some point we asked of course the customers what they feel about our customer support. And some of them were super enthusiastic about it and some of them, they weren't that happy about it. And we asked them, okay, but why? And we couldn't get any answer. But in the morning, I've been there and I was listening to how our girls were answering the phones. Imagine 20 ladies over there standing with their headset and they were saying, hello there, how can I help you? And they were really, really funny and cheerful. But when I realized that we are selling this freaking mandatory third party liability which people were perceiving it like a text. And they were calling, hey, Mr. John, your insurance is expired. And they were like, I want to smash the phone. The emotional state wasn't there. So we've changed the scripts and the attitude of our people over there. And they were doing something else. They were saying, hello. I mean, they were starting with the low voice from their state. You know, I'm calling you from blah blah, blah insurance. And I know that this is not a good news for you, but your insurance is going to expire next week. However, we have a good news for you. We found the best blah blah blah. And you are going to be able to save such and such. And that was transformative for The NPS that we've received from the customers with this small tweak. So you need to build rapport and to understand what's the emotional state of the customers that you are serving because otherwise you are going to feel that you are doing a good thing but you are not empathic to their state.

That empathy is so rare for E commerce folks who tend to be more mechanical in their optimization. That's the pro level. Is that psychology?

Yeah. Dennis, I have a question for you. What do you suggest to the E Commerce? Let's say you are an E Commerce stock, right? So you, you've tried everything. You've got to seven figures. You are making five meal cookies, whatever. You don't have the best team, but you want to do this, this and the other. What do you suggest for E commerce entrepreneurs which are being stuck?

Well, we got to figure out why they're stuck. You know, if the patient goes to the hospital and you say, hey, what kind of surgery should I have if I come into the hospital? Say well, before I can. Or the phrase, we like to say, I have a lot of doctors as friends and we say prescription before diagnosis is malpractice. Right. So if you say, hey, you know, my E commerce is stuck, what should I do? And I say you should do 1, 2 and 3. Run away from anyone who does that because we need to figure out what's broken. What is it? Because any person who's stuck, they're going to be stuck on a particular thing. Is it because their content's not very good? Is it because they've limited market size? Is it because they need to increase their lifetime value? So what I would recommend they do is look at our customer lifetime value course and unlock which we want to know exactly which component is the one to work on if someone comes into the hospital. And I say, you know Doc, Dr. Valentin, oh my heart is hurting so much. Can you do me a heart operation? And then you do, you say, well, you know, I have heart surgeons. I have all kinds of doctors. They can work on your liver, your lungs, your eyes, everything. But before we do operations, we need to do an X ray. No, no, no, Dr. Valentin, I need you to do the heart surgery right now. And you say, I know it's very urgent. I know you're in a lot of pain, but we're going to take an X ray right now and we're going to take your blood and we're going to measure things really quickly. Just, you know, that's what happens in the emergency room. They don't just start operating. Right. And so you do the, you know, you scan me and you say, well, well, Dennis, we have really good news. The good news is you don't have a heart attack. You have heartburn. You ate too much spicy food for dinner. So what I recommend you do is you take an antacid and then let me know how do you feel in the morning? Right. So when you have the analysis to uncover what is the issue? It's a lot of people, they just. And I see this, I just see, like, what do you think? Or anyone who's watching, like, what? Let's be honest, what percent of the time do you see somebody who. They see a cool tool or whatever, and you just like, jump on this cool tool without saying, wait, wait, wait. But is that solving what my issue? I need to know what is limiting my business before I just start implementing everything. I can't implement everything because if I implement everything, I can't figure out which thing actually created which effect. Right?

Yeah. Plus, you don't have the bandwidth to do so. And I love what you've just told Dennis, because many, many entrepreneurs are not aware that they are stuck because of themselves. I think that the cause is what causes the company to be stuck is that the entrepreneur is stuck and he hasn't done the right decisions or he's postponing. Either he's postponing some decisions, either he's making too many decisions. However, either he's not having the right team. However it is. We have a saying here in Europe. I've heard that a friend of mine, Andre Moris, has this in Germany as well. So we found out that there is the same. The fish starts to sing from the head. So if the company is stuck, then you are stuck. And if you are stuck, you need to unstuck yourself. And to unstuck yourself, you need to take a few steps back and to look in the mirror and to realize what kind of things are not working in my model. Because the company is an expression of your mental model. You are doing this in your mind, and then you are drawing it with people with resources, with processes and so on. But if the company is stuck, then that means you are stuck. And of course, learning more. If your learning pace is not there, then your growth phase is not there also. So your number one job as an entrepreneur is to learn and improve the game that you're playing.

That's right. To be able to work on the business instead of in your business, because there's so many levers that you could pull. And depending on what kind of business it is, maybe the thing that will cause you to be unstuck is to double your price. Maybe what it is is to bundle a couple other products. Maybe it's to create a new product. Maybe it's to change the landing page. Maybe it's that you're doing really well through a couple channels, but you're not running Facebook ads properly.

Here's one. Maybe the best thing is to fire yourself from a position where you're not fit. I've seen this many, many times. People that are jack of all trades and they are so I don't know if they are too afraid to make the bet on people to say, okay, you're a very cool person. I don't know, you're better than me. Let's hire a director of marketing or let's h someone to handle the fulfillment. Because at some point, your job as an entrepreneur is to make enough money to fire yourself, make enough money to fire someone better than you are on some position so that you can get a level up and a level up and a level up and to hire people that can hire other people and so on. That's the whole mechanics of growth.

Yeah, it's the whole E Myth. Right, Michael Gerber, where people are stuck working in their business as an employee. So the mark of this is you should be able to. If you have everything organized and you have processes and you delegate it out to other people, you should be able to leave your business for a month and it should be able to operate just fine. That's the mark of it. But then, you know, other people are not trained well enough. You don't have a process to govern that. You don't have the funds to be able to hire these other people. There's a lot of barriers to, you know, it's a lot. It's easy to say, oh, you should, you know, delegate everything out. That way you're working on your business. You're looking at your business overhead like it's a machine. You're being.

Dennis, I think we lost you. Can you still hear us?

Oh, I lost you somehow. I don't know what happened.

I lost you as well. But here we are. We're back.

The key is to look at your business as a machine impartially, so you can step away from it and look above and see which are the different parts and be objective and say, which parts of these things are ugly, which parts of these things are doing well. Which parts of these things am I holding onto too Tightly because I'm not willing to delegate it out. One of my favorite people on the planet, Ray Dalio, who created the world's largest hedge fund, wrote a book called Principles, which is showing us how do we level up based on getting unstuck and getting out of our blind spots. Because like you said, we are a reflection of our business. And I think that's the most important point that we could cover here. Even though, you know, you hear listening to Valentin and I talk about optimizing and growing your e comm business in the 2022, a lot of it's going to be mindset and putting in place processes and letting go of things that maybe I don't want to let anyone else touch the ads. I don't want anyone else to create it because I know this better, capture it.

I know the best. I'm the best. So, yeah, I've seen this over and over again, Dennis. So let me tell you a story. I have a great a friend which he's been able to grow his E commerce to something like 20 million. But when it comes to Facebook ads, he's like, no, don't touch it. He's like, no way. He never leaves it. So he's doing this type of creatives. He's working like a dog for 14 hours since I know him, you know, and he's doing all these ads himself. And at some point I asked him, maybe I want to scale, I want to go bigger. And I asked him, but what have you done differently in the last three years, man? You are running these Facebook ads yourself since I know you, but you had all these dreams to go abroad, to go regionally. What happened to those dreams? I can't do it all. Yeah, you can't do it all because you are your own employee. You are your worst boss ever. And you are sitting in your own system as the PPC manager, not even the marketing manager, because he's not having other channels.

Yeah. Amen. That's a mic drop moment.

So, Dennis, we need to wrap it up. What do you want to talk about in the next episode?

I want to talk about lifetime value and different ways to increase lifetime value. Because when you can increase lifetime value, you can pay more for the traffic. There's more things that you can do. It gives you more room. It allows you to grow more. And there's so many different basic sorts of things that we are not doing to increase lifetime value.

Perfect. So you've heard the man. Next time, in two weeks from now, we will chat about how to improve customer life value, lifetime value, so that you can have enough money to grow your budget, to hire smarter people than you are, and so that you can level up your business. Or if you want a lifestyle business, go in that trip in Bora Bora. So thanks, everyone for watching. Thanks, Dennis, for being here with me and all the best from Bucharest.

Thank you, guys. So glad you're spending time with us. We want to hear what you guys are doing with your businesses, and we want to see you guys grow. Reach out, let us know how you guys are doing.