Episode 39:

Good to Great: Key shifts to take an eCommerce brand to 8 figures in 2024

About The Episode

Show notes:

Something a little different this week - a fireside chat between  Webtopia’s CMO/Founder - Jessie Healy, our CEO Tristram Dyer and our Head of Growth - Ben Dyer about the 4 key marketing shifts to become a $10M eCommerce brand. 

We are lucky to have a view ‘under the hood’ of 30 fast-growing eComm brands - we have noticed some key shifts that brands need to make to their marketing to make break the $10M ceiling. 

Listen up as we cover: 

◾️ Why your brand hasn't yet broken this ceiling

◾️Common traits we see in high-growth, scalable eComm brands

◾️4 shifts you can make to set yourself up for growth in 2024

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Full Episode Transcript

Welcome back to the e-commerce impact podcast. This week, we've got something a little bit different. We have a recording of a live workshop. We gave, recently to a group of e-commerce entrepreneurs, where we were talking about the four key shifts you need to make as a brand to go from. Somewhere stuck in the seven figures. And break through that ceiling to become a $10 million e-commerce brand. 

So without further ado, I will switch over to the recording and you can have a listen to what we chatted about.

 So what we're going to cover is why do econ brands get stuck in the early seven figures?

We've worked with a lot of brands over the years that have kind of been at that level and managed to get them over the line and into scaling mode. And we've observed four key shifts they need to make to go from seven figures and break that kind of elusive 10 million ceiling. 

And so before we get started, I wanted to just introduce us and give you guys the context of. Like, why should you even listen to us?

And why do we know what, what we're talking about on this topic? We are part of the senior team at Webtopia. So we're an e com focused agency with 30 plus clients. And we get under the hood of dozens of brands that have made this important transition. So over the years between us, our experience, we've really seen it all.

And I've seen which brands have been able to make this cross this path and make it to that. Elusive 10 million revenue and beyond and really got under the hood of like how they've done it and what would have been the important things they've needed to do to get there. , so I'm Jessie, I'm the former head of performance marketing for Etsy international. And I've worked my whole career in digital marketing, mostly in e commerce. And I'm now the CMO here at Webtopia. Ben is our Head of Growth. He has over six years experience growing brands from seven to eight figures.

And Tris here,  he's our CEO, similarly has a ton of experience working with brands big and small, getting them across the line. So our agency, collectively, we've scaled businesses to over 35 million a year. From less than a million. So we've really seen how that ramp up works.

 So we work with a hundred percent product brands, mostly in the DTC space. Some of them have a kind of a mixture of a footprint of retail and DTC, but our focus is always on the DTC side.

Ben and Tris over to you to talk a little bit about some of our success stories before we dig into the content. Absolutely. Hi, guys. Nice to see you all here. So yeah, absolutely. One of the case studies we mentioned here is, is Oliphant. They're kind of high end dresses.

As we've seen here, kind of during the time that we've worked with them, we've kind of seen, you know, an 18 X increase in their, their revenue. Their conversion rate has increased by 37 percent and we've increased our average value by over a quarter in that time as well. A lot of the focus for these guys have been on the customer journey, the user experience and just generally how that people go from discovering the product all the way through to buying and then advocacy as well.

And that's really helped this brand is going to grow, you know, exponentially over the last couple of years that we've been working with them. So on the next slide, then we talk a bit about the Jim apparel Brown. 

These guys spend over 7 million a year with us. You know, a focus for these guys is a lot around NCCPA, which is new customer CPA. And we managed to decrease that by 27% in the first year of working with them and increase the. The row asked by 28 percent well, these don't seem like wow, jump off the page numbers.

When you multiply that by 7 million, it starts to rack up. I mean, we found that, you know, in a way to do that was we decreased the Facebook CPA then by 50%. And we found increasing the TikTok followers for this particular brand works super, super well. Especially when social selling really became a massive part of the of the ecosphere that we were starting to sell in.

So, you know, there's a couple of really key points that we really kind of focusing on here, obviously, using the correct exclusions. And we, we, Connected with the CRM and brought in to make sure that we had the best matching of each of the customers to ensure that we were targeting just new customers and post IDs like these, these sound like some basic things, but you'd be surprised I ordered 15 to 20 accounts a week and these are, you know, key things that people are missing.

All the time I post IDs, making sure that you're collating on the social proof. And then just different, different customer paths as well. So kind of playing into the algorithms within the different platforms, meta specifically, their website and shop within the U S advanced plus shopping, different landing pages, all that sort of stuff.

 So clover are a pajama company for kids. And what we've managed to do is we, we, we've, we scale these guys from quite a a small, I think it was one person in a basement kind of scanning the stuff out. And we got the, the various expletives as that person started to get busier and then they moved it to a three PL and start to really see some scale.

And we, you know, with two and a half X increase a year on your revenue. And actually I think this year whoa. I mean, their financial year ends in June, but I mean, the, this year is looking to go at a further 2. 5 X. So it's compounding quite a lot there. But we, we, you know, we, again, we saw the conversion rate increased by, by over 40 percent really.

And we really focused a lot on new customers, with Clover specifically, we, we, we, one of the first steps we did was try to create a cult following around the core products because we knew that if someone came in and bought something at, you know, zero to six months old and they were, you know, big advocate of the brand that they would come back.

six to 12, one to two, two to three, et cetera, et cetera. And obviously another massive step there was just to help increase the visibility on social platforms, getting their name out there and streamlining the customer journey as well. I was gonna say the, the, you know, real question there is, you know, why do e-commerce brands actually get stuck? You know, you know, standard enough is that, you know, it's costing you more and more to run as each year. And, you know, it's really starting to see you know. We'll talk a bit about how we're going to solve this and how we're solving this for our clients at the moment.

It's one of the biggest things that we, you know, we're, we're seeing as, as obviously meta ads gets more, more populated and kind of the, the user base or the active user base is reducing a little bit and people are starting to move to TikTok. The same question keeps coming up is costing me more to run ads.

What do I do? So we're going to, we're going to talk a little bit more about how to combat that.  Then when it comes to, you know, are you seeing a drop in your conversion rates and your, your, your revenue? 

A lot of the, the myth that we're seeing from our side is, you know, as you start to scale, you have to accept a lower ROAS and you have to accept a lower CDR. You don't, you just need to find a better way to drive the better traffic. 

Yeah. So what we're seeing with the brands that we're working on moving from seven to eight figures, obviously coming much more. bigger, much more recognized and things like

for example, we saw when Donald Trump was in power in the U S and he was talking about buying TikTok, you know, conversion was down, users were down, all that sort of stuff. We're seeing it with some of our clients at the moment with like the shipping delays in the red sea as well. Like there's, there's multiple economic factors out there that as you start growing, unfortunately you have to kind of tie into the strategy as well.

Absolutely. Yeah. And I suppose the, the, the third problem then is, is, as well as, you know, which platform do you believe, right? As you start to build out your meta ads and you've got your TikTok ads and some people bring in Pinterest and then they bring in Google and everyone's saying they've got unbelievable ROAS and great CPA, but you look at your real CPA and go.

But how come I don't have any money? So he's got the question needs to come in. Then who do I believe?  Yeah. So as Tristan said, the attribution war is ongoing.

We look at meta, it's got a standard seven day attribution window, Google 30 day, Pinterest 90 days which I questioned a lot. Cause I don't know when the last time I saw an ad and three months later bought something. I was like, Oh, it's for the ad three months ago, which is a bit crazy in my eyes.

But yeah, as Tristan said, like that everyone's claiming a bit of attribution is trying to just understand where the real numbers are. You know, if you're putting levers within meta, if you're putting levers within Google, what, how are they affecting your top line business revenue? Okay. So, I mean, look, this is, this all ladders up to kind of the four key shifts that we see.

And as Ben was mentioning, we met, we, we We order tens of businesses a week looking at understanding this and then comparing that to the cohort that we're working with at the moment, and we're finding some some very clear structures that are in the way and the ones that are stopping people getting from the, you know, getting from.

Seven to eight figures.  The first one  is, you know, getting to know your numbers an awful lot better.  A hundred K month in sales in early, early seven figures is about three grand. A day in sales. So if you've got an about an average order value of about a hundred dollars, that's about 30 sales a day. But if you have about 20% returning customer rate, that's, it's kind of an average for our clients.

We have some considerably more. We have some, obviously a little bit less, but an average would be about 20%. So you're looking about, I said C six, it's 26, sorry. You get circuit six returning customers and you get 24. New customers a day. So the question that we asked that is, are you spending enough on that?. So how much does it cost, actually cost to get a new customer? That's, that's a massively important, that's something that we really kind of take into consideration.

But one of the things that we, we look at when it comes to co getting getting a new customer is. You know, where are you spending on your top of funnel? Where are you spending on your retargeting, but also making sure you're excluding existing customers? Because so many brands that we've worked with and so many brands have come to us have said, 

we're driving new customers really well. We take one look at the account and we can see very clearly they're not excluding existing customers and and they've been told all we we've been told their agency have told them or somebody else has told them it's better not to because you want to make sure that you're bringing everyone to engage with your forget it.

Exclude your existing customers. Make sure you're going after brand new customers all the time. It's something that we find is like works every single time when we start to exclude existing customers and drive new customers. That goes for Google, Meta, TikTok, anywhere else as well. Additionally, then there's this kind of different levels.

There's a conversation piece at the moment in the, in, in. DTC Twitter talking specifically about a DC direct consumer Twitter talking about top of funnel being a waste of money being a waste of time and you know, within that you have to understand that you know, top of funnel spend is brand new people inviting brand new people to find the brand and understand who the brand actually is.

Yes, it can be important to to drive this. As much as you can, but what's really, really important is to make sure that you're not driving at an unprofitable level. 

We've talked about you know, at the start there, how much does it actually cost to get a new customer? But we want to spend up to that level and we need to make sure we're very, very aware. You know, through your contribution margin, through your cost of goods sold. How much is it costing to get the product into the person's lap and then understand how much you've got to spend on advertising.

Once you can work that out, identify that at your top of funnel, and then you can start to work in terms of retargeting after that.  We work with a client over in the US called Petit Keep.

They're very much a one soft purchase or kind of a one and done.  They were doing a huge amount of sales volumes, but they weren't. being profitable while doing it. So one of the first things we did was we started brainstorming some supplementary products that can go alongside that had high margins.

And then we introduced a bill bar on the website. So when someone is buying something, we, we increase the shipping, free shipping costs. And we know that consumers in America love free shipping. So they'll build up to that. So we introduced a bill bar in there. got their supplementary product with the high margin added in.

So people were adding it to cart to get the free shipping. And it was it was a massive success. Another thing we did was take out the so they didn't have to click on the cart on the top of the page anymore. Once they added the cart, they went straight to the straight to the checkout page. And why we did that was because it was very much a one.

one off product that upsell came into checkout. We didn't need them doing anything else on the site. Yes, they can personalize it, but once they personalize it and they add it to cars, they go straight to the checkout. Again, massively increased the, the conversion rate. Another client then we had Cardina fashion brand.

They're very much. They had a really, really strong wholesale company, and they were starting to move into DTC there across the whole of America. So, first of all, focus on the products with the highest margin. Super, super important to get revenue through the door, and make them have that feel good factor.

Understanding the certain SKUs sold. better in certain areas of the country. So really only showed those skews in those countries and again some basic things here. Influencer activity got out there really fast in front of our target demographic with influencer activity on a relatively cheaper level than we would have through the ads.

We ran a mass email collection within Meta as well, which again came back in two folds with the lifetime value. But also allowed us to, you know, really teach people about the brand and organic media as well. So we, we really advise on the organic media and made sure that, you know, when people were, the touch points that everybody was having, that was completely aligned, that they weren't looking at organic posts and an ad and thinking, how are they aligned?

So it was important. And be honest, it was, it was a massive success.  The finally, then we worked with the PR agency in order to get press mentions. So like really kind of hammering home that confidence with people that are not quite sure who the brand is, you know, if you've got a top press mentioned that are saying these guys are amazing works really, really well, not on website landing pages, but also on ads as well.

Yeah. And just to underline a couple of the key ones there, I think press mentions, obviously like if you have something like the wall street journal or Vogue or one of these telling people that you are good, it's essentially, you're not telling them. yourself, you've got other people saying that you're cool and that you're good.

I mean, the other one there that was very clever is actually kind of showing kind of specific skews to specific parts of the country. You have to remember in specifically in America anyway, the, the, the temperature and climate in the North is very different. to the south. So it's something if you are trying to break America and trying to get your products in there, certainly something to consider as well as your, as your driving spend there as well.

 So as you start to understand how much you can spend to become first purchase profitable and understand how you can acquire these customers at a good rate. The next step is then really is to understand how you can increase your LTV or lifetime value.

 I think like one of the things just to say here that is the we've got with our LTV, we've got a lot of focus with a lot of our brands on LTV.

Part of the reason is obviously, you know, an increased LTV allows you to spend more on your customer acquisition costs, which allows you to then put more fuel on the fire, which then generates that. That momentum that allows you to drive through the the eight figure barrier. One of the things that we found to work very, very well for LTV is obviously kind of using email marketing from a automation point of view.

So actually identifying when, you know say something, say you're a shampoo brand, when you know how long someone's going to run out of shampoo, or if it's going to be a specific type of product, you can actually go in and understand what. What, what what time of year it is and start to advertise certain products for a certain time of year for fashion, for example.

So there's multiple different ways to increase LTV. And, you know, we found that, you know, as well with it, when it comes to bundling, which we'll talk about shortly you know, kind of looking at things like increasing first time purchase average order value has really LTV because obviously you're off to a better start.

So that doing things like gift with purchase or tiered sales which we'll talk about shortly, has really allowed us to increase our lifetime value for our first time customers. So we worked with a dog supplement brand  I didn't know this, but dog food is going to be worth more than the human food in the business in America in the next two years, which, you know, amazes me. But anyway, with them, what we did, we did the selling really, really hard on the product page, got people to kind of really love the product, add it to cart, and then we did a pre purchase upsell.

So we allowed them to it. Sign up for three or 12 months subscription of this. We're getting a 30 percent off, which obviously, you know, you lose on the first one, but they signed up for 12 months. The lifetime value there is, you know, great. Then with a fashion brand in the, in the, in the States called Alison Bay, they're women's leisure brand.

We found out a core product, which was leggings. And as we start. you know, bringing out new products. What we'll do is we'll take that segment within Klaviyo and we'll say, Oh, this new top that we're releasing, it goes really, really well with the leggings and, you know, sending photos and stuff.

Again, people coming back and your lifetime value. And then finally, then one that's worked really, really, really well is setting up a community and being real, really engaged in that community  people that are engaged in the community get launches and drops.

First, before anybody else and they kind of use it like a, like a mini micro platform for all the world, which is great. We'd see them putting in things like, Oh, I wore my, you know, my trousers to the shop today, or I wore my trousers to you know, a wedding or something like that. It's a bit more incentivized than that.

I think it's even like, you know, I, I wore these leggings to the gym and I did my PB, you know, I, I wore these leggings to the shop and I got some really good compliments for it. You know, there's, there's some, a very emotive stuff that's going into that for sure. Yeah, I mean, this is, it kind of just shows that the power of community is really helping to drive that LTV for sure.

 Just a summary on that, just to say, you know, making sure you know what you're yeah, you know what your CAC is and understand your cost of goods sold and making sure you're, you're, you're able to spend at the right levels.

If you're trying to break that eight figure barrier, you want to make sure you're spending enough. And then you want to obviously want to make sure you're measuring on platform and, and how that impacts your overall CAC. And then understanding, you know, working out what a one year LTV is. You don't want to be waiting longer than you know, you know, too long to be getting your money back.

So you want to work out what your one year lifetime value is, and then kind of working back from there to understand how much is going to you can actually spend on acquiring a new customer as the second thing then to, to jump straight into it is fail more and fail faster.  We  find the best winners is when we start to start you know, going a little bit outside the comfort zone.

So, you know, one of the biggest mistakes,  is. Lack of testing. You know, there's so much set and forget. There's so much. Oh, this is what works. We'll stick with it. Look, our job is not to test, right?

Our job is to find what's working. And to do that, you have to test. And so, you know, we've, it's not necessarily just testing creatives. It's testing different offers. And those mentioned earlier on about gift with purchase. So that's adding an extra gift when somebody purchases a certain product or certain amount of product.

A tiered sale works really, really well. And I think, you know, something that allows us to scale with new customers is actually allowing, as I said to you, they're driving that first purchase profitability by increasing the average order value of the first purchase. We also test things like buy one, get one, you've got build bars on your convert on your site to increase conversion rate, but then we start to talk all about you know, landing pages and stuff like that.

 Yeah, so there's like different different landing pages would resonate with different customers. So it's important to continuously test them. They're getting easier and easier to kind of churn out at a higher level, especially with like Unbounce and Replo.

But it's like we found some really, really key points that we put on most of our landing pages. USPs, CTAs throughout, so calling to action for people to add to cart throughout. Uh, if the, if the press mentions really resonates with them, there's a call to action to that. If the UGC really resonates, it's a call to action to that.

So it's filling it up with as much information as possible without being too spammy. but like we, we found that testing landing pages is really key. Absolutely. Absolutely. Our first phase is actually testing multiple different angles and, and kind of, you know, understanding the, the different hooks that it will be to do with a certain product.

We then take it into phase two. And like, like I said, we, we, we retest that against different different creative angles as we might have a, a product image, we might have a lifestyle creative, we might have a lifestyle video or a carousel.

And once we understand which is working for each of these, we then go into a bit of an iterative phase. The different colors, the different kind of hooks and the angles and the messaging specifically around that product.

And we know a lifestyle works the best. We do this on a cyclical basis so that you understand that we can keep finding new things that work. And this is a very clear framework that we've found working very, very well. And it's very repeatable for each of our brands as well. 

It's really, really important to, to, to continue to generate content so that you're being seen there in the right places at the right time. We're not necessarily just talking about paid content. We're also talking about branded content there as well. So in there is that we can see a couple of different brands that we work with here.

Some of them have you know, they, they create content on their Instagram reels. Some of them talking about specifically about you know, the products that they have, the lifestyle they live, and then some of them are even doing podcasts. Pardon me, podcast that they're part of as well. It's the idea of them of having that overall brand love, that brand feeling.

They really want people to engage with them on a deeper level other than just a transactional level. Because it's starting to be the year now where you want to really engage with your customers. Because if you're not doing that, somebody else is. So it's making sure that you're engaging with them as much as possible.

Yeah, one of the things I would just add to that is I've really noticed like the difference Brands and founders that are able to scale and ones that aren't is the ones that actually see content as almost that you're creating products, but you're also creating content. You're a business that's in the business of creating content.

So you're creating content for your organic, social, for your email, for your ads. It can't be an afterthought. It can't be something that you're just doing. Every now and again, or when you feel like it, it has to be built into the, into the DNA of your business that you are creating content. And if you really think about like the DTC brands that are really big, you know, some of the really huge ones I can, I can share some examples.

After this, but they are the ones that, you know, they're producing ads every single day. They have a team of producers in house. They have agencies they work with that mindset shift really needs to happen towards content. If you're going to scale and making content almost as important as the product.

We, we will, we'll be slower to work with brands who are not creating their own content specifically for socials, because we realized that that's actually Cree, a key critical part for success that you have to make sure that you're continuously creating brand content, even if you're passing some of it externally, you still have to be doing some of it internally as well.

 I suppose educational content is massively important, depending on what type of.

product you're selling. We work with a boat air purifier in the US, obviously quite niche. When people see the, people see the ads, they're kind of like, you know, what, what, what's this about? So it's important that we're educating them through the ads as well, not giving them too much because the idea of the ad is not to sell.

The product of the idea is to create the intrigue, but if you just have a picture of it up there, people won't understand what it is. So there's an educational piece behind it as well. We have interactive content, you know, that can come in many different forms. We work with a brand in the UK called Boys Get Sad Too.

And they, they talk a lot about the inspiring stories and how they're helping mental health with men, not just mental health, but men that, you know, face struggles in, in their life. They, they give money back to charity in, in, in the charity is called calm. So like, it's important to kind of put that forward as well.

Visual content also very, very important. You know we work with a brand that sells bread and I forget the name of them. Wonky bread. Wonky bread and wonky carrots and stuff like that. Sounds a bit bizarre, but it's actually kind of cool. That don't fit the, you know, the perfect image that goes into shops and things like that.

So when they're selling them online, they have to show. You know, the funny kind of side of it, which is, which is the visual content and then user generated content as well. We've started, well, sorry, not we started, we kind of ramped that up a lot more in the last couple of months for sure. Cause you know, what is important for you to say that you're really good is really, really important for consumers to say you're really good as well.

Absolutely. Oh, sorry. The last one, interactive content. Apologies. I'm just mindful of the time. Interactive content. We've worked with some furniture companies we've seen this work really well and it allows potential customers to put things like sofas and beds and things like that into the room and really visualize it and it's helped with the conversion rates.

The fourth and key one, , is to make sure we're following the money.

And what I mean by that is,  we find what works to drive a new customers and really double down on that. Focus a lot more on what is working and really make sure you're putting them on and it feels like cheating.

 So for example, a couple of these examples here there with Clover kids we mentioned earlier on that their key winner was the garbage truck for for for tots. It works super, super well, people found that really, really cute. We found different versions of images and we use the testing framework.

We talked about to find different creative images and iterations of this. This is one of the better performing images to, to really find what worked. And then we just doubled down on it. We found more and more of this. And as we found it, we use tools like lifetime lead that allowed us to understand, you know, what people bought.

After these products, so we're able to see the lifetime value go, but the average order might be 70, but we managed to bring the lifetime value up to nearly 800. So people bought over 10 times 11 times on average. So we found that people bought an awful lot of products as a result of this.

Ben, do you want to talk about the sister coin there really briefly? Yeah, so one of the core kind of pieces of jewelry for this brand in particular was a sister's coin. They sold it on their own. The story, the story behind it was very much like buy this for somebody that, you know, is a time of year that's really important to them, be it like graduation or a birthday or Christmas or whatever it is.

And then we kind of worked with the brand to be like, You know, if they're buying it for someone else, why not partner it up as well? So we sold it as a set. It didn't necessarily double in price. I think it was like 1. 7 times the price, but the AOV just absolutely skyrocketed because this was their core product.

And they started selling millions and millions of dollars a month in just this coin. 

Awesome. Yeah. So that was some great examples. So just to kind of sum up there what we talked about. 

So it's so, so, so important to have a really clear understanding of. What is your allowable cost per acquisition for a customer? How much can you afford knowing your lifetime value? How much can you afford to pay to acquire a customer? And therefore, knowing that you can then optimize your marketing towards acquiring as many new customers as possible at that allowable cost.

And if you can do that, and if you can tell your agency or your Your team or your freelancer, exactly what they can pay to acquire a brand new customer. And you're measuring that you will be able to scale much more effectively. Test much more than you are now.  So testing the brands that do well. We say that testing everything from landing pages to creative to offers to website changes.

To AB testing, the email testing as a mindset in your business, that is a key thing that has to change in order to get yourself into that shift to be a bigger, more successful brand. Creative is king, making creative one of your products. So your product is your product and your creative is your other product that you're creating as the other key shift you need to make.

And then finally don't reinvent the wheel and follow what's working. So understand which, which. Products are the ones that are driving the highest value customers and then use those products to draw people into your brand. So really doing that analysis of which products drive the highest lifetime value and finding ways to market those more effectively and really drill down on what's working.

So the example of. Us discovering that that dump truck product pajama product was the one that brought people in who would then spend a ton of money later on test, test, test to find the best way to market that product and make that a huge success as your lead in point for the brand. So that's the summary.

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