The 5 Categories Of Ecommerce Businesses (And Why It Matters) transcript

if you have this kind of brand then what you need to think about is maximize those moments it is all about for a brand like that your ability to generate and capture a whole bunch of demand in a very small period of time for longterm sustained success in your business you need to understand what areas of the business you need to develop the most skill in and that is dependent on what kind of business you are actually running today on the interferes podcast I'm going to talk about five different kinds of dtoc businesses and help you think through what skills you need to develop if you find yourself in one of them I think I've covered most of the kinds of businesses that I've come across with these five categories of businesses I'm going to lay them out for you and tell you exactly what you need to know to maximize your growth your profitability and ultimately the value of your company so I've been thinking a lot recently about uh not just sort of tactical strategies in a given Channel or something like that but but sort of zoomed out a little thinking about for some of my clients what once we've sort of mastered and mastered quote unquote once we've you know gotten the lwh Hang fruit at least off of the key areas of uh of a core strategy and a core channel right let's meta ads we're running manual bids we're producing creative at scale Etc that's going to get you to 10 1520 million in Revenue really good business strong profitability you you do all the normal stuff right you keep Opex low as a percentage of Revenue all the things we talked talk about that generally shape a good D Toc business uh in in all the ways I I talk about all the time but like if you want to go from there to a hundred million and even sometimes if you want to get to there 15 20 million something like that you really need to understand what kind of business you are building and therefore what areas you need to develop either yourself or on your team the most skill set for and to sort of think through that what I've been thinking about uh recently is sort of different kinds of businesses is where these businesses sit in the marketplace the economics of the business the way customers interact with products and in light of that these might be considered sort of genetic components of the business of course they're all it's your business you can change all of these components potentially but given the business that you have like what do you need to do what efforts do you need to put in to generate a bunch more money like if you step back from D Toc for a second you might think okay I Andrew run a very small agency so what are the leverage points in my business to create more Revenue well it's going to be really different than product business and the way that I generate profits going to be really different than a product business and therefore I'm going to think differently about my skills in relation to this business then I'm going to think about them in relation to you know what kind of skills I would need in e-commerce business for example here's an obvious one I spend zero dollars on Facebook ads for for AJF growth zero dollars uh so whatever I have to say about bidc caps has no relevance to the skill set that I need for this business on the other hand I think about how do I staff creative at the level I need to generate the outcomes my clients need and how do I do that in a way that's cost effective to keep the profit healthy in the business Etc right so those are really really different kinds of skill sets and that's that's sort of an obvious thing every business is GNA have difference you could think of a small retail shop coffee shop would be really different than either of those Etc okay but even within D Toc we talk about the idea of DDC or e-commerce as a business and I'm actually I'm of the belief that that e-commerce D that DDC is a business model and its own way it's at least a starting point it tells you something about uh about the business within that there are subgroups or maybe subcategories of businesses and we ought to think carefully about what kind of business you have to think carefully about what kind of business you are in and in light of that where you need to get great so I think this will make sense as I start to name these there are probably more than this but in my experience I see at least five different kinds of businesses that are D Toc businesses and that uh necessitate different kinds of skill sets okay and I'm going to start with the broadest category category number one I'm going to call the solid margin solid LTV solid to good total adjustable Market kind of product-based business right and and what I mean here is just this is this is many many brands that I that you deal with are going to fall into this category in some way you're talking they're D Toc they know kind of some best practices they're doing some basic things right and they realize okay we're at 60 plus points of landed margin to the customer you know somewhere around 60 give or take Five Points uh you know being above 60 is really where you start to get towards solid to pretty good margin and and and a lot of these variants are going to be you know closer to 65 maybe even you get to 70 points of landed margin that's a really good margin but 6065 is a pretty common place for a lot of businesses to be okay we'll call it solid LTV 50 to 60% increase in value in the year so what I mean by that is um and and I'll keep using the percentages this way if we let's say it's let's say 60% plus what I would mean there is that if a customer spends a dollar on their first purchase or let's make it easier let's say they spend $100 on their first purchase $100 aov they're likely to spend on average $60 more dollars with you throughout the year okay so um so that's what I mean by 60% increase uh 60% LTV uh really we're calling it one year LTV so they may last quite a bit longer than that right so uh solid margin solid LTV and then we'll say good Tam I don't have a way to measure this but total adustment Market being pretty good uh where you know there's a broad range of people that you can address again this this is many many Brands just making products for Mass markets uh that are pretty good they're unspectacular in each of these categories but they are pretty good and therefore they have the core of what you would just say is sort of Baseline a pretty good e-commerce business you just think about this right solid uh margin solid LTV like that and uh and again you keep your Opex low as a percentage of Revenue you do all those things and you've got the basic Financial core of a pretty good business a lot of businesses work this way and I would call this kind of business like the steady brand Builder kind of business and and typically what that means is that a brand like this is not going to have crazy overnight success in most cases if they're ring D Toc they don't they don't have some insane growth trajectory because they they don't have the margin or the LTV to justify huge huge amounts of investment in growth but they can justify good investment in growth because they have good margin and good LTV and there's a good amount of customers to reach and create awareness with and all those kinds of things and so what do you do if you have this kind of business well you do all of the stuff as well as possible across a broad range of stuff and what I mean by the steady brand Builder here is year over-ear you keep trying to add another uh$ five million in Revenue in the early stages maybe you know three to five million every year or something like that you go from two to five to 10 to 15 maybe maybe at some point you start getting the percentage goes down but the the revenue comes up so you're doubling you know each year for a couple years in the early stages you're picking low hanging fruit all those kinds of things and then you're adding another 20% growth year over year over year and you do that for 10 or 20 years and you end up with a really really good business it's really hard to go rocket ship growth in this business but it's but it is possible to keep adding and in this business what you want to do is just keep doing everything a little better all the time this is like a classic case of be a little better every day in a business like this just like keep running ads uh that get a little better every day start noticing what creative Works produce more of it start producing more creative in general make sure you're running manual bids make sure you're you know leaning on machine learning all the stuff I talk about kind of the B basic things there so you get that spend up to $200 $300,000 spend per month and now you've got a$2 to3 million ad spend that's happening every year on your meta ads as the Baseline for that you build a good Google ad campaign on the back of that you're running good email and SMS and you're thinking better about those all the times your marketing calendar as you're able to uh creates more and more value you're producing products you're having some sales you're staying lean you're really careful about staying lean on the business because you don't have super mega fast growth and you can't just you know power it to the moon and go really really super aggressive because you're growing so fast uh you know you keep chipping away the margin and the supply chain and your demand plan you get better and better at managing all those things you just do all the little things well over a long period of time and you know every time your business gets a little bit bigger you go back to manufacturer and say we want better terms and you shorten your terms all you know all of those things and and some businesses no like all of those things are true for every business bu right but there is a way in which a business like this gets a little better all the time and keeps creating more value and you just don't have as good of a case in this business to go like slam all of your energy and resources into one particular thing in this case you just want to make everything a little bit better all the time and that ends up being how you grow now again that's true for a lot of businesses but but especially in this case um you're just looking for the next opportunity next and you're trying to fix it and keep on going um probably can in this business run some sales and should run some sales you know this is part of the way you're going to turn that 60% LTV into 65 or 70 or something is by just um you know and maybe even more doing that um that also uh you may be able to maintain customers for a longer period of time so it might be 60% LTV in a year but by year two that 60 might turn into 100 like you might not churn customers so fast as you keep producing um products and sales and reasons for people to come back and in that respect that's another reason why the growth curve can be like a little bit more uh less extreme but can be a very long and continuous one um because customers do this and there's a particular um oh new products are a big part of that and there's a particular kind of brand that I think often fits this mold and that is an apparel brand apparel brands are some of the top ones like this they're not the only ones there's other brands that are just releasing a lot of different products across the different categories of products and for those Brands uh they can have a very similar thing but apparel brands are a classic example of this you just keep releasing products and the more you can produce products the more you can cut chipo hit your return rate the more you can uh run sales the more you can um do a great job with email and SMS the more you can keep working with your factories to get your demand planning dialed in you can set the foundation to just keep steadily growing and this is also where you know other AD channels start to make more sense over time you know you get influencer going and you think about customer content uh producing uh other things for you and organic can grow and grow and grow steadily as you keep producing product that people like and keep producing reasons for people to come and just check out what's going on on your Instagram and all those kinds of things so it's not going to be like organic is going to power your business massively in most cases you know instead it's just going to be a Another Touch Point that's a good quality touch point for your customer as you keep producing over time and I've seen apparel businesses produce very large um aggregate ltvs you know I'll I'll me I'll talk more about subscription businesses in a second but when subscription businesses have customer churn those customers very often just don't come back they're done they they have a life cycle and they're done they may be a longer life cycle but they're done apparel business business you'll see keep customers for I mean think how long have you been buying clothes from your favorite like uh clothes retailers whether it's you know a brand like you know whatever one of the big ones Nike or whoever Lulu or something right um or it's just you've been going to the gap for 20 years or something you know like people have very long life cycles on apparel Brands and on some of these and so the LTV doesn't have the coff point um that others do as long as the brand keeps producing products keeps running sales and give people the reason to come back and so again you get better and better over time that produces some margin expansion it's just a longer game of continuous optimization as opposed to a put put your pedal to the metal on One Core tactics so that's what we we'll start there this is kind of my catchall bucket for a lot of Brands and if you're a brand with like 40 points of LTV and 50 points of margin maybe the next thing you need to be thinking about is O I need to get that 40 points of LTV to become 50 or 60 or and I need to get my my margin from 50 to 60 and that's a product development issue that's a um pricing and offer issue there's a bunch of things you could be thinking about there to try to solve those problems which will make it so that all of the things that I just talked about produce larger benefits over a longer period of time right because if you run your sale if you release your next product and you have you know uh 50 points of margin even let's say you have 60 points of margin instead of 50 boy that's just like a whole bunch more profit that you can generate off of that next product or off of that sale uh by just having margin to begin with and it produces more value over time it makes your cash flow easier all those things okay so there's number one a lot of Brands fit this um you know uh maybe there's a a second category as well that we might say as like another subcategory if apparel is one of them you might make something like um skin care or other personal care products somewhere fit into here often the margin is a little better it's not 60 points it's 65 70 even 75 points sometimes especially in skincare something like that um LTV there goes from 60 point to 70 to 80 something something in that range again a lot of personal care Brands kind of fit in here and um in this case though the product development is less obvious at some point you've sort of uh generated a lot of the products that you're going to generate you can't just endlessly create new designs like you can in apparel and the Tam be and these categories are also so competitive people can sometimes be brand loyal in them you know uh to use the skincare example Dave recook mentioned I think he said this publicly that he surveyed his customers and asked them um what their other favorite skincare brands are from uh besides bamboo Earth the skincare brand that he runs right that I used to work on um and and he said like no brand came up more than 2% of the time it's it's too good of a category it's so hyper competitive that that's that it creates a challenge there's plenty of Tam but the growth is tough because there's so much competition there that being a newcomer in the space it's just really hard to get people's attention relative to all the other folks trying to get people's attention especially with tactics like meta ads and all those things so there's there's challenges on that side as well so yeah again you can think about these things um with some tweaks relative to your specific business but that's the Baseline kind of case okay all right number two let's talk about uh a different kind of brand that has this really particular uh quality to it which is Extreme LTV often a sub almost always a subscription brand uh subscription brand with extreme LTV and by extreme LTV I mean this is where you get towards like 200% in a year so again customer spends $100 today they're going to spend another 200 throughout the rest of the year but with LTV extreme LTV Brands I've seen 300 350 like I've seen very big amounts LTV LTV that is so high that it's actually kind of hard to lose money on customer acquisition unless you are just really blowing money okay because the customer is just so valuable to you again and most of these LT higher LTV brands are also something like a personal care supplement something like that with pretty good margins as well 6065 uh somewhere at least in those cases um now you have a different thing you don't want to get a little better overtime across the whole business and think about product release and promotional calendar ET in fact you probably don't want to run sales at all which reduces your need to output on the promotional calendar and or on the marketing calendar and the reason you don't want to run sales at all is because you don't want to do anything that going to jeopardize the value of subscription to your brand subscription becomes the core driver of how you create margin expansion in the business with all that LTV you're getting and when you do that um you end up with this really incredible business so you eliminate sales and promotions you might have something at Black Friday or something like that or some special offers that you cross sell to people or something but you're not going to run hey for three days the whole site's 40% off or whatever because then all your subscribers are going to be annoyed at you and they're going to turn they're going to switch and all those kinds of things instead you want to do everything you can to smash your paid spend right probably probably is the starting point it's not the only answer here but it's one of the things that you want to think really really hard about and really this kind of brand these subscription Brands is the ultimate case for D Toc D Toc as a mechanism for business and for customers interactions with business makes so much sense for subscription Brands where the the product gets used on a repeatable regular schedule there's a re you want it to show up and you never want to run out and this this is why supplements are so good right uh because because if it's a pill and I know I'm going to take the pill for 30 days then what if then the subscription is like awesome it's a great customer service mechanism it's like it's it's so perfect for for the customer experience if the pills just show up every 28 days and I never run out and uh and it's just perfect for me then um then I can just take them and keep going and I don't have to worry about reordering typically I get a little discount or free shipping or something like that with it and everybody's really really happy and now retail expansion doesn't make nearly as much sense I mean it might help at some point as a it's a layer of your growth but there's not really a great reason to do this is like you know butcher box you think about again as sort of an extreme example of this where they've got built a 500 $600 million business they've been public about this I heard some podcast with their CEO and just like the whole thing is just built on boxes shipped to people and what you see and so yeah Amazon may fit for this as well because subscribe and save is such a good thing um but what you really see here really clearly is that these businesses get very very good at paid and they also get very very good at thinking about tactical Improvement incessantly on their funnel and so they're building offers all the time and they're testing Landers all the time and they're thinking about how can they do this because every dollar additional they can spend on their uh on their customer acquisition produces for them you know two three dollars something like that often over the course of a year all the time and so if you go back and listen to my episode with Jack Rubin my most my second episode with him really both of them are really great I'll link both in the show notes um you hear him talk about this kind of thing it's a subscription business that's growing really really fast really effectively and when you hear Jack what you hear is just like this extreme focus and that's even what I titled the episode on getting his uh his offer right measuring carefully is another thing that these businesses do really well very often is they analyze their LTV really carefully and measure really carefully what customers are more valuable to them and less valuable to them and what offers produce different amounts of value to them and you know you you get really good at these paid channels often again starting with meta and over time once you get to 30 40 50 million in Revenue something like that you end up uh expanding out to other channels because you can push meta really far in these businesses because again you can many of them can exist at like a you know if the LTV is good enough at a 08 7 row ass or whatever at and as long as they can float the cash uh which which uh over time can can become possible through a bunch of different mechanisms then they can just keep pouring that in there and you know if you think about this from an Roi perspective like a return on invested Capital perspective like as if a customer and a product was an investment vehicle for them like a stock or something like that you know they're going to get 50 plus percent annualized return on those customers even if they have to spend at a loss to start and so it makes all the sense in the world to just get really really good at investing in paid uh and and incessant tactical Improvement often usually with less skews too which also means you're not really working so hard to generate like incredible demand planning across a wide range of skews and a careful ordering strategy and develop you know playing developing a really good skill set on a hard game like that instead what you're doing is keeping a few key SKS in stock all the time make sure you have Safety stock make sure subscribers never run out put a little extra cash into those things again typically high margin for these subscription businesses uh and as as long and also predictable Revenue because they're on subscriptions you can tell generally when people are going to churn Etc and therefore um uh the the skew management is easier you don't have to go develop a bunch of skills there you just as as you grow you just keep renegotiating with your manufacturers as you do more volume and become more valuable to them and get better terms get you know better pricing all those things um but then each product release now becomes a new pipe basically a new customer acquisition mechanism so that as you add you know um supplement B to your or let's say let's say you've got supplements a b and c already now as you add supplement C uh D excuse me sorry so you've got a through C now as you add supplement d uh now at some point you can acquire a set of customers that you were not getting before um now you may not want to do that right away because you can take supplement a b and c really really far but that becomes the mech that becomes the goal for product development and sometimes uh additional product development can actually be a distraction from your core line in a way that uh is not that helpful because again the business is about acquiring as many subscribers across a few key areas as possible and getting really really good at doing that again that's that's what the Jack Rubin episode that I mentioned before reflects I have talked to Jack about product expansion in that business he has good ideas for products that he's sitting on but he's going like not yet there's still so much further to go on this core product I'm just going to keep pushing on that before I get distracted by doing something else so that's number two extreme LTV Brands if you've heard my ads for a while for more Staffing and thought about the idea of adding Talent from the Philippines to your business but been nervous about integrating overseas Talent Talent like managing things like time zones and languages and workflows and all of the kind of things that may make you have some hesitation there is an amazing opportunity for you to take a Next Step without getting on the phone with more Staffing Qui yet if you're not ready to do that and that is via a webinar that they are producing this coming Thursday this coming Thursday it's April 25th 10:00 a.m.

Pacific uh 1 pm eastern time it's going to be a a whole webinar led by Lara the CEO of more Staffing and Greg krey who's the the founder of Mor Staffing who founded the business in part because he had staffed his us-based e-commerce business with Filipino employees saw the value of it and said we've got to get this to more people so he has been down this road he knows what it's like to build a business around uh overseas Talent specifically in this case in the Philippines and can tell you a lot about the pitfalls uh to avoid the mistakes to avoid as well as all of the advantages and the benefits to it and so you could just learn more about it I would really recommend you go and check that out the link to the webinar is in the show notes for this episode and of course everything that more more Staffing is doing at more now.co more now.co is where you can find um everything that uh they're doing including associated with me the webinar is going to be called managing an international remote team in the e-commerce World massive advantages in the serious Pitfall so go check that out don't miss it if you've thought about working with them if you see the value of incredible Talent from the Philippines at a lower cost than it would cost you to staff uh equivalent talent in the US but at a great price in the Philippines which gets you good talent if you've heard me make that pitch before you thought about it but you're not sure check out my show notes go sign up for the webinar and learn more about uh how to manage this effectively uh it's going to be really good you're going to learn a lot go check it out brand type number three bad LTV like bad LTV we're gonna say sub 40% sub 30% uh and and sometimes even worse than that right you know 20 25% I've seen plenty of times uh and and maybe even lower occasionally okay um but good Tam so this is where you have a c a product that can reach a very wide range of people like probably good maybe even great margins this kind of customer or this kind of product where you you have something that is really really Mass Appeal um and and that's really the core driver of the business and at that point it becomes a demand capture and maybe demand generation game typically if you have a really truly great total adjustable market and it's not so overly competitive and may maybe even is pretty competitive uh very often it's the case that what you are actually doing is tapping into existing demand that's what you mean by good Tam in that case it's not that you're you're creating demand creating a category Etc instead what you're doing is you are going into a category with existing demand and getting really good at capturing again if you want an example of this think about simple modern now simple modern pretty bad uh margin they would tell you that they're pricing uh you know insulated water bottles very aggressively and so they're lower price but what they got really good at and again there's a great episode that I did with Brian Porter uh that I'll link in the show notes a while back uh who's the chief eCommerce officer at uh simple modern that in the early days of that the the unlock for them was um creating uh a they they saw the addressable market for uh water bottles they they did some things to test to figure that out and then they figured out at the same time how to tap into that demand in a in a unique way specifically with Amazon so that's really not a d Toc business first and foremost it's an Amazon business first and foremost and so in that respect it's a little different than this and for D Toc Brands they they actually may be doing category creation as long as the category is large enough to uh to support like as long as there's enough like apparent demand for it again you might think here a little bit about Kao uh as a as a brand like this probably not quite the level of totable Market as some others and there you've got extreme margin uh silicone wedding rings right this where I started working um uh and and if you're watching this I just showed you mine that I'm wearing right now um but again lot of wedding rings a lot of people wearing wedding rings out there and so part of the game was just get in front of those people as well as possible in both cases whether it's demand capture or demand creation the game is get incredible at paid now the game actually might be pick a different business because it's it doesn't have great genetic elements for a business but if you have the right skill set here you can still do awesome and uh again another example here would be ridgew wallet uh at least in the early days know they've done a lot of product expansion since but basically it was a low LTV product once you got a wallet you only needed one and what they got so good at was paid including measurement on paid understanding exactly like if you're super high LTV your paid measurement in terms of your uh like Channel value you know how much value is Facebook producing frankly isn't as important because the customer's worth so much to you that it just doesn't matter that much it's just not a big deal right um like ultimately if you miss a little bit on one side or the other who who really cares as long as you're basically within the range of right because you have so much customer value uh that you can be in really good shape you just don't need to measure that carefully if you have to make all your money on first purchase and you are running ads and your whole way of reaching this very large Market is with paid and that's the main way you're doing it then you got to think really carefully about not only if you want to grow a very big business doing this and and again you don't maybe you say like I'm comfortable building a $10 million business in this category and I'm just going to take more margin per customer I'm going to keep it not too complicated and that's going to be good enough for me that's great I'm Pro um building a business with uh goals that make sense okay um for for what you want to do with your life but if you want to grow a very big business what you have to do among other things is get incredible at uh maximizing each Channel understanding how each channel is producing value measuring carefully the value that you're creating and so on and so forth if you can do that then you can still build a really good business and sometimes what I've seen is that people who are incredible at paid with these businesses can build really large businesses doing this another example of this would be loop earrings which Taylor holiday has pointed out a couple times recently not incredible um Financial core metrics to to my knowledge in that business but they've just gotten so good 98th percentile at learning how to use paid across the organization including operationally building up like how do you bring in more and more people to produce more and more creative and uh manage more and more channels and how do you give them targets to hit and incentivize them properly all those kinds of things um and that can be in this case also though a good uh case for sales Channel expansion this is like uh again simple modern is another good example of this um where a brand like this that has really big Tam at to Market uh and is spending a lot of money on paid and getting really good at that one thing they may end up wanting to do at some point is saying like Okay we're creating all of this demand we want to create some retail outlets where we can go capture more of it in more places um especially if you're a demand capture brand um in a known category again simple modern like I said is a good example here started on Amazon added d2c added Mass retail uh and that ended up producing a bunch of additional value for them especially as they created a pricing advantage in some of those other channels to make it so that they're really uh well-loved and popular product in those channels okay so um just again if you don't have great LTV and the key thing here is probably you need to get awesome at developing a skill set around paid because now it's going to be your lifeblood to measure that stuff carefully or at least have some other way to grow your business without LTV and you need to be very clear about what that way is that's really the point here if you don't have great LTV stop trying to produce it and don't worry about hiring your attention manager to make it better like you're not going to make it a lot better very likely it's just not going to work that well instead uh accept it deal with the fact that that's what you have and get good in other areas okay number four and this is kind of a subset of the of the bad LTV uh brand but it's it's a really specific thing and this I'm going to call this the super seasonal gifting brand okay probably gifting related not necessarily right if you think of like a Christmas tree uh Farm or something like that that would be a super seasonal brand that's not gifting but a lot of these brands have the same thing super super seasonal or super gifting oriented where you've got and I think back to my time at FC goods for a brand like this bad LTV decent margin um and you know 75% 80% of the year's sales probably 80% uh came in uh two 30-day periods which is the run up to Father's Day and then holiday it was overwhelmingly a gift product people were not buying it for themselves and as wallets made out of baseball gloves if you don't know that story um wallets made out of old baseball gloves and it was all about the run up to Father's Day and the runup and and the Christmas period basically uh you know holiday shopping because that's what the brand was and if you have this kind of brand then what you need to think about is maximize those moments it is all about for a brand like that your ability to generate and capture a whole bunch of demand in a very small period of time which means in those periods of times to maximize those moments well first and foremost what it means is don't fight it seasonal headwinds and seasonal Tailwinds are in many ways unable I see Brands make this mistake all the time they they have seasonal elements and they may be less extreme than this holiday gifting example that that I was thinking of here um but they'll they'll overspend in bad moments or in in poor seasonal moments because they are annoyed at how low their revenue is and they're trying to fight it and they're going gosh you know our Revenue two months ago was three million bucks this month and this month it's only 500,000 and ah if we could just make that bigger and get that 500 closer to 3 million then this brand would be so much better and my answer to that is instead of trying to turn 500 into a million you're going to have a much easier time turning three million into three and a half million I me just think about as a percentage right uh what what is three adding a half a million well adding a half a million to a half a million is 100% growth adding a half a million to three million is what like 17% growth is that right something like that okay it's so much easier because you have all those Tailwinds and the mistake I see all the time with these kinds of brands that have extreme seasonality or even a lot of seasonality or extreme or extremely gifting uh type Brands is they go and they try to make all the rest of their yeary moments um much bigger when they actually should focus more of their energy around how do I absolutely maximize those moments that we're in that's the way I'm going to generate the most Revenue possible hammer away so when you get to those moments your marketing calendar should be incredible it should be awesome it should be dialed to the day you should know exactly what you're doing what's your promotional calendar is going to be and how good it can be plan for it four months in advance make sure you don't miss the moment okay hammer away at email and SMS capture list building whatever you have to do and make sure those lists are ready to go for those time periods and then once those time periods come once those time periods come do not be afraid to over email or over send in general why because you've got 30 days to get somebody's attention very likely or however long you have like email them a lot over that period of time and if they turn off your list so be it uh it's just the time to say we're not going to worry about that we're going to worry about instead capitalizing on and maximizing this moment while we have your attention in a very short period of time and we're going to fight really hard to maintain your attention at the time it is by far the most valuable to us okay um offers should be built in firing and creative uh doing the same and this is where the through the year uh work can really pay off what you can do by uh running a bunch of different offers and launching new creative all year long is essentially you know maybe help your down periods but even more than making your your your slow periods bigger what you can do at this point instead is build up ammo for your top periods right so that's the goal you're generating a whole bunch of creative and getting that into the ad account and you're generating new offers and Landers and whatever it is and the point of doing those things is so that uh above everything else is so that once your conversion rate just goes up a whole bunch because the moment is bigger which is what's going to happen when those moments come suddenly every click you drive is way more valuable to you and now if you have more ammo in terms of creative and offers you can maximize that moment more more and so um that's so much of the point of iterating on that stuff you're round uh is think about it in relative terms it may not be performing that great right now but you may be able to get way more spend out of them when the time comes and that would be the goal of doing it okay and I think manual bids here are your best friend uh for maximizing those moments I've just watched this I've got a couple Brands I've had I've worked on Plenty of brands that are like this actually and what I've seen over and over is that manual bids have this unique ability especially if you're bidding one day click to ride up and down the seasonality waves with um a lot faster and easier than auto bidding does auto bidding you're predicting these things manual bids will go capture a moment so much quicker and more responsively than uh other kinds of bidding are and the only time where this becomes a real problems if you have like a true hard cut off type thing right if um you know a from Black Friday to S Monday a you know if you have a one day Black Friday or one day Cyber Monday where you're going to have particularly excellent performance then sometimes manual bids underreact a little bit to that they'll under spend on the front end and overspend on the back end right so you'll get to Tuesday after Cy or Monday and still be spending too much or you'll get to Friday and you don't spend quite enough and so you might have to be a little bit careful and thoughtful about how you adjust that in real time but uh otherwise they're very good at writing up seasonal Trends as the conversion rate goes up and up each day meta is going to see that experience like you know recognize that and it's going to update his probabilistic forecasting model pretty quickly as long as you're spending enough to get lots of purchases going to your adssets and so um so manual bids can really help you capitalize on those moments and then at the same time they can also really help you slash your spend when the moment ends really quickly and responsively so okay that's number four super seasonal super gifting type brand and number five I'm going to call this one this one could actually fit a number of these different categories but there's a specific thing here that's important I'm going to call this this the subculture native brand okay and this is a brand where the Tam is probably lower but there is a unique group of people who will particularly love your product and this is not like typically you know a brand that's trying to make itself part of a subculture though that can be really good too right again I think back to my time at Kao we we were when we went really hard on CrossFit as a subculture to invest in okay and that is fine and that that worked really well we we had a great experience with that learned a lot in that process okay but it's not I mean and there is a unique use case for Kao in CrossFit but that's not even what I'm thinking of here if I could take back my time working with slick products a brand that made wash products for off-road vehicles specifically dirt bike and like ATV UTV those kinds of things the thing I would do probably really differently is think harder about just how aggressively I could invest in the in the key subcultures there in the right ways and um in that respect you can still run meta broad targeting because meta is going to go find those people based on all kinds of stuff right but this is also though where you've got the best case for organic I think where there's like a in community where you can really work on producing content and producing um Community around in your subculture and become part of it again the sort of extreme super example of this that again Taylor holidays uh highlighted a couple times recently is Missouri Star Quilt Co where they just own quilting so far as I can tell I don't know anything about quilting but so far as I can tell they are just the players in fact so much so that when um I did my episode with Taylor which if you haven't listened to you should go check that out um and Taylor in that episode talks a little bit about this story and so if you want to hear that very early in the episode um you can hear about that a friend of mine was listening to that episode and she reached out to me and Saidi can't believe you are tangentially connected to the people who run Missouri Star Quilt Co you have to understand of all the non-celebrity celebrities that I would want to meet in the world um like the the the woman who leads their content and leads that business would be like my dream I watch so much of her content all the time and that is the perfect encapsulation of the kind of thing I'm thinking about here the kind of brand that could produce somebody who is incredibly important to one person but I've never heard of her I have no idea who this person is and she's getting tons and tons of views that is a great case for building organic content that serves a local significant community and just makes yourself established in the space and um and so the growth here can be paid for sure but because you're not really aimed at Tam in the same way you're not trying to reach the most people and expand forever instead you should be thinking about how that goes along with other growth elements in the business business and if you think that means you can't grow that big or good of a business you are wrong because what can happen instead is uh though you don't necessarily reach a huge swath of people you can create massive profitability with a core group of customers and again that Missouri Star Quilt Company is a good example of this where um where customers are so incredibly valuable and keep coming back and keep using your product and keep um telling all their friends about it because you just have become such a key an important player in the space and everybody knows you and at some point what happens is you generate um leverage in in terms of your uh profitability in your brand you create margin expansion in the business by making it so there's like massive Word of Mouth um and Word of Mouth I mean quote unquote um it may be actual word of mouth like I tell a friend about this business who also is into the same thing as me that definitely happens in those businesses in fact it happens much more in a business like that than others uh but also it might be sort of like essentially organic sharability where recommendation engines starts serving you content related to the thing that you're interested in and it's content from the brand and therefore you produce you spend a very low amount of money on ads relative to other businesses in the same space for that kind of business the case really is clear for generating a serious organic presence and becoming core to it and really investing in the community in every way you can this is where like um subculture uh influencers subculture Charities subculture retailers if they exist right again the the quilt the Missouri Star Quilt Co one basically came that but I'm sure there's you know retailers that would carry quilt stuff that those those folks would go to I think about this also when we started doing this at slick products when I was working with slick making those we we started to get some um retailers within the subculture and that made a lot of sense for that brand and probably we should have been more aggressive about that earlier on thinking about how do we make sure that the places where dirt bikers and ATV riders shop is a place where slick is and um and may not be massive you know not it's not Target necessarily right that's not the point the point isn't to get into a big box retailer the point is to be in the retailers that these people go to over and over and over again and to be a presence there um and that's where you invest in those communities in every possible way that you can show you're really a part of it and you actually have to really be a part of it in that case so to recap okay five types of Brands and there again are probably more I didn't I don't claim this is an exhaustive list but um the solid margin solid LTV good Tam like the steady brand Builder Okay uh that could be often apparel Personal Care those kinds of Brands okay that's number one get better at everything all the time number two extreme LTV subscript I Brands uh that's where getting incredible at your funnel and measuring the value of different customers and um efforting against those becomes the core of the business number three bad LTV good Tam this is where you have to develop super muscles around paid um and maybe also uh generate uh sales Channel expansion with mass retail Amazon those kinds of things number four the super seasonal gifting brand key there don't fight don't fight the seasonality instead lean into it uh let the head let the Tailwinds push you further and faster um and don't try to make up ground on the headwinds you won't do it number five the subculture native brand that's the brand that uh that has a specific Niche specific subculture get really good at being there in presence and probably invest a little bit more in organic content uh get good tactically leaning on recommendation engines to get your content in front of your customer and go from there those are uh five different kinds of Brands and here's the key above all of this know which kind of brand you are develop the muscles you need within that if you can do that then you can create a really good business no matter which one of those core are a lot of you probably got into it because you love the product you love the customer you love the culture not just because you were thinking you know pure financially about how do you generate a really good business you something else brought you to this business and you can probably be successful in a lot of these you just need to know where to invest your time and effort and dollars all right that's it for the show today thanks so much for watching for listening as usual I have a great episode coming up my next opening the books is going to be me coaching someone through a product releasee you are not going to want to miss that don't forget to go check out my sponsor more Staffing um uh virtual assistance can be helpful virtual professionals can change your business build a lean Opex e-commerce business in part by hiring incredible talent in the Philippines uh you will not regret it there a great partner go to more now.co to go check them out I've been working with them for a while I staff my business with them you know about them go do it if you want to respond to me I'd love to hear about it maybe you've got a buiness bus type that I didn't mention you can email me at podcast ajg.com you can comment on this video uh I usually respond to comments and you can uh find me on X andrewj feris you can also what else can you do oh you can go to AJF growth.com if you want to work with me see anything that I'm doing AJF growth.com is the place to find all of that again don't forget to subscribe wherever you're watching or listening this I've got all kinds of great content coming bunch of interviews I also have a followup with Nazar and Jafari coming soon with my first opening the books guest I've been working with her for a while we've got a lot to talk about so that's it thanks so much for watching for listening I'll see you next time [Music]