Definitive Proof That Cost Caps Work At Scale (With Taylor Lagace) transcript

you are spending what percentage of your client's budgets on manual bids right now cost caps bid caps uh you know Target row ass for Facebook ads what percentage of the total spend across all of kin Chip's clients your agency is being spent on manual bids right now I'm not in the business of burning money Andrew 100% is it literally 100% 100% you're actually beating me then I have have some small Auto bid spends on some retention campaigns uh just because the numbers are so small that yeah 100% we can go we can go down that lane as well but yeah 100% yeah okay uh 100 so mostly so break down bid caps cost caps Target row ass like I'm sure you don't have like a b a percentage number of how much is each but how much are you spending in each B like what do you think the breakdown is basically uh I'd probably say I mean 80% on cost controls like cost per result goal and then maybe 20% I want even say 90 10 potentially the only times we use minimum row as goal right is when the outcome is volatile right you don't you can't really it's hard to predict the aov if you're running to a collection page something along those lines you should add you should try for especially for the right client you should layer on target row ass on top of your cost cap uh stuff uh there's the reason why I do that is that you're at you know there's a different optimization and what I'll also always do is set it to a different time window so if I'm running 7 DC cost cap or 7 DC bid cap I add let's say let's I mean let's say for me 7 DC Big Tab I would also add a 1dc Target Rass um and the reason why is like I'm I'm I'm aiming at typically I actually do it the other way it would be 1 DC bid capap 7 DC Target R and it's because the different um optimization I think matters like you actually do reach different customers and often I see incremental spend um so it's like I'll see like uh you know much higher CPM on my highest value campaigns because this is the distinction that people I think sometimes don't think about is that bid caps and cost caps are running on a lowest cost model right like I.E it's targeting the lowest cost of conversion Target Ras campaigns are uh running on highest value um right so they're going to optimize for a higher value customer and so sometimes there will be increment if you sort of think about if you imagine every customer on a spectrum here on like um lower aov to higher aov right that kind of deal if they're all in that Spectrum then probably like at some point let's say here's the higher aov customers my what I think is that like a lot of people are kind of in the middle and they're like both optimization methods will reach them and so you're probably getting the vast majority of those people but that there's people on either Edge who um one of them will leave on the table basically and so and so ends up being like I just take the same ads duplicate them into highest value and it ends up being you know incremental spent like I have a client recently where we did this and it it it was probably 30 or 40% more spend like it it was it was a lot so well at the end of the day if it's not there if the incremental spend is not there it just won't spend so exactly but you're you're 100% correct though they're optimizing for different things so you might as well do that okay so wait but so you're running 100% of your client spend what kind of clients like who is kinship you you're you are the co- CEO of an agency kinship what kind of clients is kinship serving like is this all small accounts because this is like a concern people have about manual bids which is that like it works great if you're you know at five million bucks or whatever but like big accounts can't do it yeah no right I mean just prior to our uh hitting the go button on this podcast Andrew and I were talking about one of our clients spending 400k over the weekend completely on cost caps across the board right you do the math that levels up to a decent amount of spend over the course of the month um so but I mean our ideal client our typical client 5 to 20 annual Revenue I would say a million and then direct consumer e-commerce business of course and probably majority of the time within health and wellness a lot of subscription type Brands that's kind of yeah who ends up being in there yeah yeah those are all the brands that can that can most easily deploy dollars on on meta in general what you're talking about those are just those are you just described brands that we custom Spenders yeah they're worth a lot customers are just worth a lot of money to them um yeah and you guys reach above that $20 million threshold too right you got a couple couple guys who are I'm giving you my I'm giving you my sweet spot less hoops come alongside the founder and but yes we serve people you know up to 100 million a lot of times yeah yeah monthly spends you're seeing uh seven figure monthly spends 100% cost caps 100% bid caps 100% Target I mean 100% manual bids yes yes um again not not many people are spending seven per month seven figures per month between that 5 to 20 but yes we do have clients spending seven figures completely on cost caps yeah okay when you take a client uh that's new and you and you um switch them over to cost caps for the first time what is your general expectation at this point of whether or not their spend will be about the same increase or decrease um and same question for the row ask like when you do that what what what do you what do you generally think is going to happen so at this point well anything can really happen but at this Point what we're communicating is well depends you got to give me a hypothetical too like okay recently I'll just give you this one hypothetical that we just went through recently this brand was uh only running a 100 pieces of their creative uh but they had 1,500 assets of unused creative from like basically their seating efforts that they were doing internally on their own so a bunch of ugc content posted by creators on social media that they had usage rights to but they didn't repurpose or use and they were sitting on 1500 I knew right from the jump they've only ran 100 we have 1,500 we're going to put this all into a cost control environment where hey there's only upside and you have the downside protection I know we're going to make an immediate impact there but let's say all variables at least one of those pieces of content is gonna work oh man and let me and and Drew it blew it blew up like scale spend through so how how much percentage increase in spend did you get when you when you launched those so there was we did have the ability to decrease their AMR efficiency as well we're at increased spend and it lend itself to overall profitability goal so there was a decrease in efficiency to hit their overall profitability goal at the increased SP but we you decreased you decreased the ratio metric of am but you probably increased the total contributions correct correct exactly right okay that's fine exactly right that's normal right if you have a 3 to1 AMR but your target is a two to one the more spend you get through your AMR is going to come down people always just ask like was it the same efficiency well actually it leads to overall more efficiency uh but nonetheless but yes 2 to 3x to spend yeah this is actually I was just actually talking about this by the way with with an internal guy just like sometimes this is where AMR is an unhelpful metric or or roas is UN it's a blended average the ratio it doesn't say anything about the volume because like what you actually might you know the Target ad dollars or the target contribution dollars as a raw metric can actually be more useful I mean the ratio matters still but but like the the actual contribution dollars matters because like like you just said right like you could actually spend more money drag your Blended average down and it's a way better outcome for the business right so so so assum that though so take that client right how much more did they end up spending as a percentage of their of their spend before they came to you so they increase their spend by 200 to 300% in the month one again now okay I'm this is an outlier this is a case study 100% and again that's why I said what's the scenario this scenario I had 15x the amount of creative that was not being used right so that's insane amount of opportunity I knew that was a winner right from the jump but if all variables are the same and all we're doing is switching up onto cost controls within month one what we're typically communicating hey within month one you're going to see a similar level performance and as we get the creative pipelines going we're going to get more out of here and as we get into optimization get out of the learning phase as we reset things because at the end of the day I mean I'm curious to hear your two cents on this I truly feel like a lot of these bid optimizations will ultimately end up at the same place long term what cost controls do and what manual bids do for you is that downside protection where you just don't waste anything on the losers in comparison to you know the highest volume types environment yeah I well I basically think that um I was going back and forth with Nate Legos about this on Twitter a little bit he was saying like he was saying like if it's good to spend more you know if you agree with that basic principle this is one thing Nate harps on a lot is the idea that like he wants to grow his business so he wants to deploy the ad dollars that's that's like part of the point you know and I think he's right about that that like there's there's a way in which it's just good for your business to deploy ad dollars um this this can be you you know the sort of other side of that poll is like you should have Taylor holiday in your ear saying like be profitable like be profitable um so those those are both I think valuable perspectives and you know they're gonna how they play out in each business in ter in terms of which devil or angel on your shoulder you listen to It's probably gonna probably going to change which one is the devil which one is the Angel depending on your business right but but what I was GNA say was he he said um you know why why wouldn't you why would you want to spend on cost controls if you're trying to spend more money and my answer was because usually cost controls creates more spend not less this is like one of the big myths I think is that come on is that like it's it's on top of profitability and because the thing that everybody underrates is that the the most efficient use of your next dollar is the pathway to spending more money so cutting off bad spend what you see go away is the like under Target row ass right you you eliminate the creative testing campaign and suddenly there's a big tranch of your spend that is gone so now you're Blended average Ro R Us goes up right and that's like a bunch of money you get back but what people underestimate is how much that the Crees campaign has a second cost that they can't see or just like under you know ad spending under target has a second cost they can't see and that second cost is uh the money that's being spent on ads that could have been spent on other ads right for for like let's say Taylor I'm trying to advertise to you in your feed if I serve you ad a and it's a worse ad than ad B it then ad a creates cost not only in that it's like uh you know zero row ass because you don't click on it and buy right um so there's there's the obvious cost right it's like delivery under Target right but the other thing is it blocks because your feed is going to have my ad it blocks the good ad B the good ad from getting into your feed and so the most efficient deployment of the dollars creates more total spend on both sides like so it eliminates the bad spend on the bottom but it also amplifies the good spend on top um and I think people really underestimate how valuable that is and so so my expectation generally speaking is that cost controls will create more spend or the same amount of spend it's really rare really rare unless a brand is like most brands just can't spend that many bad dollars like they they can't afford to do it so they're not actually spending below Target that much except for their stupid creative testing campaigns and oh I hope we go into that today yeah yeah yeah yeah yeah well and so so what I expect though is not like is not really a big decrease in spend because they were already probably spending to their target Rass what I expect is either a similar spend at a higher r or more spend in most cases yeah in month one we're typically just communicating you know we're in the client service space right if it's all the variables are the same we're typically communicating month one it'll be similar just because we're reoptimizing resetting everything but just to piggyback up what you're saying where you can expect more spend again with all cost controls how are we setting up budgets we're setting cost controls with inflated budgets and so when the opportunity is there say on Friday Saturday Sunday or say BCM you know it will automatically throttle spend and it removes any human err right it removes any uh opportunity for you to reset optimization as well with like manually increasing budget significantly no the budget is already set at a extremely high clip and so when the opportunity is there it throttles it to maximize that moment and then on the Monday thereafter or the Tuesday after the weekend it's GNA pull itself back so it eliminates all this manual you know touching the campaigns and Human air the timing of it no it's just already there it's optimized it's set it's rolling the day of the week effect is another thing that people really underestimate like I I just looked we're recording on a Wednesday I just looked at an of mine it's spending so little money right now today and and then I look at another account and it's the same thing and I look at another account it's the same thing I like oh it's it's just because Wednesday right whereas like on Saturday and Sunday same exact ads same exact accounts they were spending 3x what they spent today like it's a really big deal the day of the week effect really matters and it's another place where like the deployment of the dollars really makes a big difference right and and then you bring in a bfcm moment and it's just like 10x that but this is this is a weekly thing and what's the alternative just you're you're you're touching budgets yourself on a Friday Saturday Sunday every week yeah right yeah no it doesn't make sense um okay so I want to go back to something else you said which is this this client that had 1500 assets um one of the things that comes up a lot is creative um what what you said those assets were from their seeding efforts like just them seeding to influencers had a ton of unused content there was it just the kind of stuff where like influencers posted and they captured the content and that was that creators customers I mean just people on social media some influencers when I say there just people on social media posting about their product they have a really good one man I think the the brands that have the most opportunity here are the brands that have a ton of social Buzz around them because I would say 90% of those Brands aren't falling up for usage rights to that content repurposing their ad account which is just a massive unlock of creative yeah um so yeah that's what was going on for this brand this brand had done it they already had reached out for usage rights and they had already grabbed the content no no no so we oh actually they did do that they did do that so yeah we had all of it ready to go at our deploy it mhm yeah so there were a little bit of an anomaly in that sense most brands don't even fall for the uses right like oh this is good it's time for you 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tracking and most affordable option I know of in the space so you you guys used to be you used to frame yourselves as an influencer marketing agency and then you you didn't do that anymore right um like talk to me about because I'm actually really interested in this question one of the questions I have is just like you know if manual bids is driving the strategy of media buying here then it creates this incentive to go and generate a whole bunch of content creation I I just put out some stuff I just released an episode about sort of a new plan I have for um for how to turn the way I frame is like one idea into 300 ads um you know on the content creation side that's with an internal team you know you think about Jack Rubin came on one of your clients he talked about just like a team of 12 people or something like that like delivering I think he said 250 Concepts in a month or something like just insane volume of output right but another thing that you guys used to talk about a lot publicly was influencer seaing and then influencer seeding for feeding the ad account so like what happened with you guys how did you end up being a really like True full like e-commerce growth agency and media buying agency as opposed to an influencer agency and and I I have a I have questions for you about the sort of influencer strategy you guys had trumpeted a lot and is that still working so answer my first question first which is like what happened to kinship and then my second question I want to actually talk about the influencer strategy a little bit still too yeah yeah where I mean that's a big bite so where do we start um I think we start I mean to where I originally got my initial start in this space was uh at Common Thread Collective my first meeting was with Andrew Ferris this is right out of college so take us way back you were my first meeting it was great and look at us full circle here but from that place uh and working with Taylor holiday working with Andrew you know we were able to see that ugc style creative worked quite well uh right and so the whole birthing story of kinship was and then partnering up with Cody over at Kao who did influencer seaing at a really robust scale and how that you know created a lot of ugc in a very cost-effective way that also lended itself to you know social organic Buzz so those combinations are thing that in entire intention behind it though was creating mass ugc you know content production to supplement ad accounts right that was the entire intention the intention behind it was supplementing ad accounts with a lot of creative what we came to find out though was not everyone ran ad accounts in the same way that we would do so uh in the background that we came from the ecosystem we came from which was you know cost controls and running these things cost effectively so I think that as the founding story ultimately led us to inevitably run ad accounts within a short window of time just because hey we're giving over the content to other brands to manage it on their end and we'd get visibility in the ad account and see that you know they're picking and choosing content to run out of the hundreds of assets that we would deliver to them they would choose their five favorites and then they would run it in a highest volume campaign and then we would get blamed for performance and so whenever that's the case you kind of got to take things into your own hands and say okay we actually just need to start running this now there's no reason why you shouldn't be running everything you're you're leaving out so much on the table the exact scenario you just mentioned exactly exactly right so we very quickly actually started running out accounts um and that was the next progression I don't know if we want to pause it but we can keep going no no it's good so okay so you started doing that so the influencer strategy didn't go away it just in fact became a development of the influencer strategy part of the system part of the system because you realize that the people were actually not taking as far as they needed to go right so right and you kind of you already touched on it right like within a cost control environment within a manual bid environment what does it become about like let's get it let's give it this ad account as many opportunities to find success against our cost control as we possibly can so create a volume a huge opportunity for unlock performance and scale against your target performance yeah and so what we're trying to do and what influencer CED did really really well and still does very effectively is it creates this massive pipeline of volume of diverse creative 2 which is meta constantly emphasized you want diversity in your creative again seeding lends itself to that at at Mass scale constantly so it's just one of these pipelines that we have internally to create volume uh and diversity within our okay so yeah so you guys still do this as part of your service stilling yeah okay great um and let's let's talk a little bit more about that for a second so um please so generally speaking what are the stats these days on what what a brand ought to expect with their influencer seeding efforts like if I reach out to let's just make the numbers easy a 100 influencers okay to seed them product uh your guys's perspective is and tell me if I'm wrong um Reach Out Palms down giving you don't ask for anything in return you just you just say we love your content we're going to send you product okay um give me the percentages what happens after that out of those 100 influencers what happens next yeah about 20% opt into receive your product 20 people only 20 of them even opt in to receive it yeah so like our numbers we typically identify and reach out to 500 and then on average 20% so 100 say yep Andrew would love to receive your product and out of those 100 30 of them end up posting two to three pieces of media each but what I'll say is these are averages across all Industries across all categories okay now you think about okay in what setting does this work well it's with products that people are proud to post about so like a shirt that you know covers up your sweating for guys like not a lot of guys are influencers not a lot of guys want to talk about how this shirt helps them stop sweating right um but on the other side of that uh for a subscript like a health and brand for a female like bamboo Earth they're proud to post about it great story great founder story you know it it seamlessly fits into like uh routine based videos um so depending on the product it will lead to a lot more or or less but that's kind of the averages yeah okay um I uh okay so that so that means basically we reach up to 500 people and you get let's call it 50 pieces of content uh something like that maybe 60 to 90 pieces of media 6090 pieces of media and that's unique right yeah so what do you think the cost per ad is at the end of the day for that on top before you say anything about any value of them actually posting it and reaching their audiences the cost is just the the cost of sending out 100 products to oh so do you guys don't charge separately for that part of the service these days oh we charge yes yes we I'm just saying if you were to end up doing this internally yeah uh as a brand it's just the cost of your products at the end of the day or or they can pay you to to handle that okay yeah that makes sense um and you there's a teex stack involved of like the ID platform for influencers and you know comms and the labor involved in doing all it's just it's more so labor intensive than anything do you guys count any value these days on the organic posting like do you see anything from that that you think brands should care about like so before before the piece of content makes it into the ad account the influencer just posts it to their followers do you care about that we see it as gravy we don't try to point too much attention towards it because at the end of the day organic you're not going to see this massive like spike in your you know on Shopify sales that day a lot of the time it could like we have had seeding efforts lead to someone go talk about on Joe Rogan and then Joe Rogan's talked about this product for separate occasions like there's these stories that exist from seeding as like the origin of it happening but that's not what we're communicating to people it's the main intention is mass volume content creation to supplement out accounts yep okay what about um what about let's see the actual performance of those ads in the ad account um do you do they work like that organic cont that that kind of influencer content that is not a structured ad Etc that Pro that may may be good maybe poorly shot maybe shot well you know right really big range of quality it's so funny we just had and I pointed this out my my partner in coio Cody he spearheads sales and marketing for our team and I these situations constantly pop up but one literally popped up yesterday there's this ad from seaing or within the ad ad account you're just like what is this and their team internally just hired two new brand people uh on on their side of things and they saw this out and they're like hey can we take this down we just like like what is this it's not it's not doesn't look like a beautiful ad by any means so on and so forth and we were like pause it's the fourth highest spending ad in your account it's currently hitting a like over a four row as uh it's crushing long story short and they're just like what whoa no way so it's like these types of moments happen all the time um and again let meta be the filter yeah right like we there's no need for you or me to be the filter let meta be the filter with the cost controls especially when when you so you've just totally unless there's some way in which it's really going to damage your brain you've just completely de-risked the thing right because like it meta just won't spend on it if it doesn't work um exactly exactly I'm not in the business of like I'm not going to repurpose any videos that are giving you a bad review or that are cussing or anything like that I'm not saying that but let's be open-minded here to not only pick our five favorites out of the batch of 300 yeah okay um do you think most brands should be doing more or less or about the same amount of influencer seing as part of their strategy and part of their content creation methodology like are are brand still sleeping on this I think so for sure yeah I mean because again we're speaking ad accounts are all about creating content pipelines this is definitely a strong one for that where like when you think about cost effective as well it's incredibly cost effective and you get the and then not to mention you know the other benefits of of the organic social and and every is going to lead to great word of mouth about your brand your reputation's everything you know people hear about you just sending products no strings attached your reputation is going to look great so there's a lot of other benefits outside of just the ad account supplementation of mass you know content creation but I would just constantly be looking for ways to do exactly that what are ways we can create content pipelines as cost effectively as possible that help supplement this ad account for scale and this is I would say yeah people are sleeping on this more than anything to do just that so what else do you guys do to create uh create ads at scale like so this is something I talk about a lot right which is like now there's this incentive to go generate a whole bunch of volume of creative but that means you have to create a process toate a bunch of volume of creative and and probably somewhere in there maybe disagree with this there's a place for like quality and really honing on the message and some of those things so um so I don't I don't disagree with that yeah okay what else what else do you what else do you guys do you guys do to do this for your clients or what do you see clients do like how else should Brands scale up their creative output to create this kind of thing right and I'm so glad you said that specifically because we're dogmatic on all you need to do is influencer seaing yeah if you heard if you heard what Andrew and I were talking about previously talking about diversification as well in the creative so this is just one type of creative that we think you should definitely be leveraging and in a way where it's like not super saly not scripted it's native to the feed it's organic it's raw like that is a creative type in of itself in addition to that we do do ugc Creation with ugc Creator creators where we do have scripts where we can kind of piggyback off and iterate off of some of the top performing Concepts from seating so we also do do ugc scripted creative we also do tap on to customers for for Content as well going into some of the core people around your brand uh we also do branded assets so we we do product on white we want all of that uh a part of the media mix here in the ad account yeah um you said customer generated content customer generated content as well yep so that's just like post purchase reach out to somebody have them send a review you post in the ad account we all we constantly have a flow setup with Our Brands where after they've been in the system for three months or more we're following up with a flow to them saying hey for in exchange for a $50 store credit can you send us a video $50 mechanism you use $50 store credit $100 store credit one of the two yeah yeah but it's like why not at the end of the day yeah why not um yeah do you um that's interesting Okay so kinship kinship did those things um and it's uh you take over ad accounts you're running all this creative and it works for your clients that's what you're telling me brands should do this because it works for them right right and I mean it kind of gets into the until it doesn't I guess uh and this is what leads kind of the next progression of of kinship and uh with with Andrew just Andrew gave me some pretty Sound Advice not too I mean I think probably over a year year or two ago now like if you're going to be in this game you got to be doing forecasting and it just like spoke to me uh so loud and clear just because the pain point of where we were at in kinship was so so profound and we didn't know when things were going wrong right like we don't know what the ad account Target should be if we don't have visibility into Topline Revenue goals and profitability goals and everything that makes that makes up that formula um so that was definitely the next progression of kinship and a huge huge value add to you guys know do forecasting as well and and all that I mean this is a classic thing I've experienced with with Brands is like in my early days of com thread Collective I would say to clients like okay so what's your row ass Target and they would just say whatever number and oh man and it was pulled out of nowhere and So eventually like you know certainly CTC did the same thing where you know and and you guys as well and this is what I do with my too it's like you you say like well I'm not just going to receive a number from you I'm going to help you think about it and it is a real service to Brands right they don't know how to think about what number they should be targeting a lot of times no and it's so evident right like yeah so as soon as we onboard a client you help them identify that Blended acquisition media efficiency ratio Target and then you help them set inad account targets based on that Target but that entire exercise you realize wow very very few people know how to do that competently and then you add in the layer of like so I just had a brand to this this I'd be interesting to hear what your thoughts are on this we have a health and wellness brand subscription type brand uh that's one of our clients and they're trying to go after a four row as and basically they were like we want to go after a four row as or uh because bone bus went after a four Ras and their first order you know their first order contribution margin company positive exactly right apparel close I was like wait well hold up man hold up cuz I'm trying to advocate for like A5 yeah right and ultim and I I'm telling him I think think it's going to get you to far more profitability we're be able to spend more we're going to be better leveraged against your Opex all of that and I also like bombas is incredibly different they have terrible LTV like apparel like that category terrible LTV like they need to be first order profit it's not I bet I actually bet it's better than you think but but that's but your Point's taken really different than like generality generalities though yeah and they're and they're yeah and their LTV is through the roof and so's like let's say their LTV was terrible the retention Mak terrible like they have to be for profitable that's not you and like in your space where you have subscription your LTV is really high and your competitors have really high LTV they're going to be willing in the auction on meta on these ad channels to be spend to go after customers way more aggressively than you to where if you're going after a four in that auction there's not going to any customers left for you yeah at the end of the day so it's just a completely different auction by brand category um but we previously weren't able to have those conversations we didn't have a seat at that table so now it's incredibly different and our ability to come alongside Partners in that way yeah yeah um yeah that yeah that makes sense because that can totally hamstring you and the brand if they have a Target that's actually not very helpful for them um yeah uh that's so so many moments when a brand would dictate the Target and then things would be going great in the next month they're like they're actually like oh this actually was incredibly unprofitable what are we doing it's like we're we're blind to that so yeah so what else what else do you just like sort of seeing in the space right now you guys so now you're now you're forecasting for Brands you're um you're running meta ads you're doing seaing for brands that sounds like is all that sort of roll it all together that's the core of the service right basically all those elements system creative pipelines so content we're doing creative uh for Our Brands we're running the ad account uh and we are doing forecasting for them do you have any like sort of observations what's top of mind for you right now when you look at when you look at what's happening for clients in the Ecom space what do you just sort of see across the landscape of your clients H something that I'm really bullish on is what I kind of just touched on the people that can afford to acquire customers at the highest clip due to their LTV and due to the retention metrics that they have are going to be the clearcut winners and if you can't if you can't afford to do that you got to die in business in my opinion yeah yeah or sometimes it's just margin it's just pure margin right like I have a client who's who's just really really margin and so they can just spend a lot on acquisition um because they don't have to have a very good uh one way or another right one way or another you got to be able to and there's different levers that allow you to do that right margin LTV so on and so forth yeah but what about you I'm actually curious well no I mean I think it's a good point this is like I I've been thinking about this a lot recently and it's it it is a it is framed like there is this thing which is like there's a there's a first principal idea here which is that like what makes a good e-commerce business a good e-commerce business um and you know my my there's there's this there's there's a couple elements of it that we're sort of so used to that we forget so one of them is that like I ship the product from my warehouse to your door and that's part of what makes it good and there are some mechanisms for which like like there's there's some products for which that is a really good way to to experience the product like supplements is a great example of this it's like it's actually way easier if I can just get if if I'm going to take a supplement a pill every day for 30 days right is actually a much like that delivery mechanism for the product is meaningfully better and more convenient for the customer than it is to go to a store and buy it um you know um the same is true for um for the subscription element of of those Brands you know where it really is actually better for me to have it on a subscription uh because then I won't forget to take it and and if if the the brand is being honest and and something's really helping people in some way that's significant for them like yeah they should take it every day you know it could be really good for them and could make a difference in their life and so um so that that mechanism just like not having to think about it is really great you know so like that's one of those things where I think like like okay that actually makes it a good a good business in that respect um it probably can't be too expensive to ship or else this is probably not the ideal way to do it like there's other elements of these things this is where like a Carol is sort of a um has has some things that are great and bad about it as an e-commerce business the the bad thing about it is that you can't try it on that is actually and so bu all get killed on return rate um you know this is like a real problem for their margins um okay on the other hand the good thing about it is that you can browse a collection from one apparel brand that you like really easily um excuse me I just held back a yawn uh was out late last night uh so the I'm boring him folks no no um no I was with a friend late last night uh the um so yeah so that is like really nice because like if you want to go look at like eight different color variations of a shoe from the same brand because you like the shoe but you want to find the right one for you like d Toc like shopping that on a website is like a lot better than it is um than it is elsewhere and I think what brands have to think about is sort of like how and there's a bunch of other things you could say about this low Opex as a percentage of Revenue is is another major element that makes DDC work the illustration I always use for this point right is it takes it takes the exact same amount of um money to design and send an email for a thousand people on a list as it does sent it to a million people and so like scale creates but but you know obviously like the designer's time is amortised across a lot more customers um you know with that with that group of a million versus a thousand so it's just it creates margin right um so there's there's just these elements like that obviously value to weight ratio this notion that like you know if it's cheap to ship relative to how big it is um you know and how much it weighs like that's a big deal so um so there's there's all of these things like this and I think what brands do have to think about is like what is my advantage in this thing like in where how can my business uniquely succeed in eCommerce and and leverage this mechanism of e-commerce to create value for myself or do I need to get out of the e-commerce game and and like e-commerce becomes a channel in a larger business instead of like you know a core thing you know you take again you go back to Jack Rubin who talked about like I I think that's a perfect example of a business that makes a lot of sense for e-commerce where it's like really nice to be stocked up for a long time on cleaning supplies and to not have to worry about sort of running out there and you know if you can make the subscription timeline work you can basically get a sense of when people are refilling and how much they're cleaning you know for his he's got you know uh clean like it's great it's a great mechanism for it you you ship the one glass ball to start and then you get little refill packs and um that's probably better than like going trying to find those things in a store and you pick the exact sense you want or whatever you know that's just like it's a good experience so I I think that's that basic point is that there's a there's a genetic way in which the Rel the relationship between the customer and the brand exists and in some way there has to be leverage in that relationship for D Toc to be great if you can do that then you can use tools and tactics and strategies like we're talking about to grow a really really good business but you have to you have to be really clear about where that thing is in your business and what makes that a good business you know no 100% 100% yeah and so you you mentioned um LTV I think margin is the other really obvious one um but yeah I I don't I mean and I think Opex percentage of Revenue is always a big one too what's that and then acquisition yeah how do you how do you make that as effective as possible at scale yeah right yeah and there actually Tam is another one that people like underrate here which is like if you actually just have it's like everybody wants to buy your category like this is where apparel again can can be really good you this is why there's a million t-shirt brands in space like I don't know people need to buy a lot of black t-shirts you know like it's just like uh there's there's there's there's value in that business for that reason you know so um yeah I think the people I think one of the things that people have the hardest time doing one we've already kind of covered it like identifying that Blended am Target Translating that to in out account targets but then understanding like how the the the dynamic between spend and those targets and what leads to the greatest contribution margin I don't know if you find that to be the case but I find it with our clients like that's where people struggle the most is understanding what between those two instead of just spitting out like you know I want a three rows or two rows because that's sounds good but like what actual combination between the two lends itself to the most contribution margin and the most profit for your business yeah um the same it's the hardest one in my opinion yeah I agree and um and I've seen some models that attempt to get at this but I'm not I'm not sure any of them really work that well like I think this is where I think like setting a p&l goal and then just trying to hit it and is like probably the way to think about this and then deciding which side you'll miss on if you don't right and there's got be some trial and error right yeah definitely and and yeah right and so if you're just like hey look I want to do a million dollars in revenue and it's gonna be 500,000 a new customer Revenue this month and I want to do that at a 2 to one am then you just decide in advance okay let's say um let's say I'm not going to reach that goal uh this month like you get to the 20th of the month and you're like we're just not going to hit it would you rather Miss on the side of more volume or more efficiency you have to have that question answered um always the chicken and egg yeah yeah everyone wants both the cake two right but you're gonna have down months it's gonna happen so you just have to decide which one is better for your business and I think this comes down to like goals and some of those things that are that are that are really less about mechanics and tactics and more about like what are you trying to build and what are you trying to accomplish you know right yeah do your your clients do you think do you think that your clients are pretty clear about about um the sort of p&l Dynamics and the P I know p&l design is the phrase I use that makes for a good business or not on average do they have a sense that like okay I got to keep my Opex slow I got to you know here's the here's what's going to happen in my forecast over time if I acquire customers like are they thinking that way or like how much when you start to show them these things do you think they're like oh no I think I think the our clients crave again my favorites is like 5 to 20 right so uh these are people that have proof of concept and they're really beginning to scale up that proof of concept and I think what that means is some of them are like a lot of them are bootstrapped and doing the best they can but they crave like these rule of thumbs yeah and and they don't they don't really know what those rule of thumbs are so sometimes we get a company that comes in they have like 50% Opex and we're just like whoa of total Topline Revenue right and just like hey rule of thumb go to rule of thumb get this to like 10% the thinner you can get this the better right so on and so forth so things like that I would say no and if they do it's kind of luck I would say yeah this is something I always wondering about because like I talk with you I talk with Cody I talk with you know Taylor holiday like I talk with some of the people in my space my team my and at this point like the world that I am surrounded with has now either told me some of these ideas or I've told them some of those ideas and there's like a shared shared strategic sensibility about it um but what I can't tell is like how much that's trickled out to a broader range of the e-commerce world or if it's sort of like a message that needs to keep being spoken I I think it's a message that still needs to be spoken I mean yeah Andrew you harp on thin margins I mean thin Opex constantly as you know a top way to really scale your brand and why wouldn't you and once people hear that though it makes sense I think it's easy for people to digest and understand just because yeah you can you can easily scale your business at the same level of expenses that's the that's the benefit of being a direct consumer business at the end of the day yeah that's right yeah um cool um okay what any any any last things that we left off the table here we got just a couple minutes left is there uh anything burning for you guys at kinship that you want to you want to make sure we get to any tactics anything at all I miss Andrew Ferris man I wish I could see my guy more that's that was the burning burning statement my heart that I've been trying to say this whole time uh but no man uh at the end of the day kinship it's a system not a service uh Cody always likes to say that as well um you want you want to do all these things you want to get creative pipe you need to understand your forecast you need to understand you know your Top Line in Revenue goals your profitability goals you need to understand how that ties to an AMR Target you need to understand how that ties to in out account account targets uh so on and so forth so and then be able to hit those out account targets ctive creative cve I think that's really helpful you give people a whole strategy sort of lens through which to view their brand and uh and like here's all the elements that have to do that media buying becomes one portion of that but it's actually a whole bunch of other stuff in the midst of that as well um I like it uh let's say I want to work with kinship uh where do I go to do that kinship k y n s.co not.com Soco link show notes link there you go super easy and super seamless right there but yeah go to the website and submit a form follow you on X Taylor lagay Taylor lagay that's right link for that is also in the show notes if you want to go do that TL thanks for your uh thanks for your time today man I miss these man we can go down a million different Rabb holes y all right man peace appreciate you all right thanks so much for watching or listening do follow up with kinship if you're thinking about working out working with them they are awesome I'm a big fan of Taylor and Cody and there's great guys so uh who do really good work uh do also follow up with Billy to get 100% server side tracking for your e-commerce business for your e-commerce store for your Facebook ad account at b.

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