How I'd Build A Growth Playbook For Every DTC Category (With Patrick Coddou) transcript

Patrick, do you want to talk about my midlife crisis or do you want to talk about the challenge of scaling an agency with between repeatable processes and individual considerations for individual brands? Which one of those is more interesting to you today? >> I mean, uh, the midlife crisis, but I think, uh, we'll [laughter] do that we'll do that on the other podcast. >> As soon as I as soon as I asked which one's more interesting to you, I thought that was the wrong question.

I know the answer to [laughter] that question. You and I talk about this kind of thing all the time. Yeah. Um, okay. Maybe we can get to my midlife crisis at the end. So, you know, if we have time, we can knock that out in two minutes. Um, >> okay. I'm going to read you a tweet from Dave Stickland. I love Dave Stickland. You know Dave? >> Uhhuh. >> Have you ever talked with Dave? And I know you like know who he is. Have you ever hung out with He's been at some ECF events? >> Yeah.

ECF events. >> I've had lunch with Tal, his business partner. Um, I I just love Dave. He's a great dude. Um, so this is this is not to dunk on Dave, even remotely. I think he's expressing something in this tweet that I uh I think is good. Uh Dave has I'm gonna We'll see if we can get it uh put into the we'll get it we'll get it shown here. Um the tweet is um the Elizabeth Holmes meme that's going around. Nathan Fielder, if you know Nathan Fielder, just just uh made this documentary movie.

And there's this little clip that's that's surfacing as the sort of preview for the movie, and it's Elizabeth Holmes telling Nathan Fielder, "I would never deceive you. Of course, I would never deceive you. I'm not I'm not I never deceive people. It's not what I do." Um, and so now that's turned into a meme of Elizabeth Holm's face and she's and in the meme she's saying things that are deceitful. Okay, that's the idea.

So, yeah. So Dave is so the point is Dave is making this post and he's making fun of this this line of thinking. Okay, so here's the line of thinking that he's making fun of. Bring your meta account over to my agency. You'll only talk to me personally. Everyone on my team is a veteran with years of experience. We're not just applying a system to your ads. We're building everything tailored to make your brand work. Okay, that's the tweet.

But of course the idea is that it's a seal, right? So the idea is that it's it's like this. It's like me on a sales call. It's telling >> it feels very directly rel. Have you had sales calls with him recently? [laughter] >> Well, this is not our sales pitch actually. But yeah, >> um I I I certainly never promise you'll only talk to me personally. >> Yeah, it's true. >> I do stand behind the quality of our team though.

But I think it reflects so much of what people think about agencies in general. >> And um you know, I've been brand side, I've been agency side, I've been aggregator side. You've owned a brand. So, actually be like before I say anything else about this, I'm curious. Do you resonate with this as a brand guy? You built and sold an e-commerce business. Like Dave is making fun of, you know, a few things here, right? It's like it's like you're going to get bad talent at an agency is basically the claim, right?

Or like lower quality talent. >> Um, you're going to get a a system applied to your ads instead of something individual relative to your brand. >> And you're going to get those things. And I think this is actually one of the things implied in this is after a sales pitch that is deceitful, you know, about about all this, right? Um, do you do you relate to those agency complaints from your I mean I get where he's I'm not saying he's crazy.

I get where he's coming from. Um, I I get what he's responding to. I never personally worked with an agency that I felt deceived me. Um, and I mean, we're certainly not in the business of deceiving people. I think I think probably what's more in in my history is a com maybe maybe poor communication, poor setting of expectations. Um probably on both sides. Uh poor um just and maybe not just poor but just like wildly wildly different coming into the relationship with wildly different expectations and not being clear about what those are and maybe not even knowing what they are, frankly.

And that just leading to like really poor outcomes. >> Yeah, that's interesting. I I um So, do so when you think of those poor outcomes, you think it's a was it communication problem? Was it a talent problem? Was it like >> well if we're talking about my >> speak for our customers here for a second you know like whenever the report I mean I guess you had really good outcomes in the end but >> when I think about me as a brand owner it was uh just from my side of the table looking back it was often uh complete inexperience and >> maybe even naive on my part like I'm coming into an agency relationship not not knowing what I'm even supposed to expect.

So, I have like a certain set of expectations and things that I think I want and need and expect and like >> I'm learning it as I go and um >> yeah. >> Yeah, I'd have to do a lot more reflecting to give you a stronger answer, >> but uh >> there's there is a lot of like hate for agencies out there. Oh, yeah. people feel really and and I'm not even being condescending about like people feel burned by agencies a lot. I think part of the thing this reflects is this notion of like like I said like there's deceit in the sales pitch and that's part of the thing. >> Yeah. you know, you're there.

And I've even wrestled with like this idea of sort of at what point in our sales process um like I don't know like h what what kind of promises should I make to somebody in the sales process in a way that I feel like I can really stand behind them? >> I certainly never guarantee anybody success, you know. Um but >> um >> but like how do you do that? People are like looking for an agency to solve their problems in certain respects.

Um >> and so yeah this notion of like like that the there is something here that Dave is getting at that I think is right which is that and I think this is good actually that >> the the service the product needs to match the promise you know like there needs to be a way in which >> and I think Dave is a reasonable guy like I think if some if he got people who were working hard and really trying >> showing good quality effort and if it were basically reflected what he was sold and it didn't work for his brand I don't I don't think he would walk away super bitter but like um >> but There is something here that people are frustrated about a lot I think which is this notion that like the that the the promise and the actual product are not aligned. >> I think that's really putting the finger on it.

So if I take what you just said the product needs to reflect the promise and you take what I said which there's either poor or a lack of clear communication. I think those two things together can result in in really bad situations. So I'll give you an example like one one agency that I worked with when I ran my brand like I came in with the expectation that you guys are my marketing department. You are my head of growth.

You run like you are growing my business. You know I'm x million dollars now. Your job is to get me to y million. And >> they didn't I mean maybe in some ways they explicitly kind of use that verbiage in their materials. Maybe they did maybe they didn't. But they certainly didn't tell sit me down and and say things like >> we're not your head of growth. Like they didn't sit me down and say >> and and maybe I I'm I'm not trying to assign blame one side or the other, but there was no clear like here's what you do, here's what we do, here's what we can promise as our product, here's what we definitely can't promise. like this is what's what's coming up for me is like maybe we AJF need to be a lot better at setting really clear expectations on the front end and maybe you're doing that in your sales calls but like >> in writing in decks in like something we always go back to and being really clear with ourselves internally like >> you know um >> what does it mean to be a growth strategist like what where does our scope begin and end and that's different for every client because clients have different um preferences and desires and like uh needs to be in the details versus not be in the details.

But um >> yeah, well we're called we're called AJF growth, >> you know, >> and we have a person called a growth strategist, >> right? >> You know, uh and so it's like well presumably that means that we're taking a pretty good amount of responsibility for the growth, you know. >> The that's correct. I mean, there's no conversation we have when which we're like, "We got a $10 million client. We're going to take him to nine next year or we're going to keep them at 10." Like, [laughter] >> yeah, >> that never happens.

Um, >> yeah. Yeah. I mean, I think it's funny like I was thinking about this just as I was saying, we're called AF Growth also like we're called AJF and so Dave's tweet is making fun of the notion that like you never talk to the actual founder, you know? Yeah. >> Um and >> yet, you know, and and he's also making fun of the idea of like a system applied to the ads. >> And I think there's there's uh there's a reality here where like I get asked this question a lot in our intake form like sort of how how much do we get to talk to you?

Um, >> and I also think there's a there's a reality to where like just by putting my initials on it and then and all that like it is frontloading me and then therefore even if people recognize they're not going to have me as their growth strategist and that maybe even it wouldn't even be best to have me as their growth strategist like in how much time commitment I could have which I I think it's actually true like it isn't best to have me um that there is a a system downstream from me >> that is like my way of thinking applied to their ad account that's what they're looking for you know I do feel this responsibility which is that that you know like at one point we had a team member say like hey can I do my my preferred way of sort of media buying on these accounts and what I said to him was something like this is like a new team member and I said if you do my way and it clearly doesn't work and or you convince me that your way is better than my way then I'm open to the idea because the point is not that I am always right that is definitely not the point >> but But what we are selling is something that is coming from me and from beliefs that I have, you know, about this sort of stuff.

And so we actually do we owe it to the client who bought AJF growth to sort of execute AJF growth methodology as best as possible. And that means it's it's incumbent on me internally to make that methodology repeatable, you know, and incumbent on you to do the same thing. Like that's a lot of what yours and my job is together. um um and all those things, you know. Um so yeah, I I think there's like there's something here to where what Dave is making fun of in this tweet actually reflects what we are trying to accomplish.

And I think like the thing that the reason that I think this is all sort of worthy of a minute of reflection on a podcast. um is that I think Dave stands his tweet stands in the place of a lot of people like in terms of what they think they need like what what Dave is reflecting here is a point of view about what his brand does and doesn't actually need. >> Yeah. >> Um and then I also think it it is a nice jumping off point for what I think goes right and wrong about this in these processes.

Um, you know, when I speak with admiration about where CTC is at, so much of my admiration for them is precisely in their ability to to develop and deploy, as far as I can tell, >> uh, a replicable system that is that is not tailor made to any individual brand that, but that is actually purposefully repeatable across a bunch of different things, you know. Um, >> yeah. And a lot of brands, a lot of agencies go wrong. Not because I like there's one perspective in all this that makes me kind of nuts, which is this notion that sort of like the agency founders are like crooks, you know, when they >> when they take your money for an agency relationship and it goes wrong. >> I just haven't met many people like that.

I'm sure they exist service business providers who are just like >> churn factories who take their money and >> yeah, >> you know, deposit it into their bank accounts and don't really care about delivering great service. I I just don't spend time with those people. So, um, you know, when I think of my my agency friends, I just have never met somebody who feels that way about it. Um, and so, um, so yeah, so I just don't I think it's just hard.

I think it's just really hard to actually do this really well. And that's actually true for all e-commerce. It's actually hard whether you do this inhouse or at an agency to actually find great talent who apply great thinking to your particular business and the particular customer and the particular challenges. And I've watched I've watched clients who have fired us do a lot worse, you know, uh thinking thinking that in-housing was a great solution and actually having it go really poorly.

I've watched clients who fired us do a great job. You know, I've watched >> all kinds of things happen. Um and and we're in housing was the right solution for them depending on who they were able to, you know, what talent. So, um it's just it's actually hard is the problem. and and this idea that there's sort of like a a solution to this that you can make fun of or something, you know, and again, this is not to dunk on Dave at all, like Yeah. >> but uh it's just like it's just wrong, I think, you know, or it's just it's just actually because like growing these brands is really really difficult and >> um and it's there's no simple and obvious quick solution to doing it. >> You need help in your business as you grow just like I have needed help in mine.

AI can't solve everything yet. You should be working with my friends at More Staffing who will help connect you to incredible talent in the Philippines throughout your entire business everywhere that you need it. More staffing was built on the back of a US-based e-commerce business that had brought in a bunch of really good quality Filipino talent into their business, experienced how valuable that was [music] in their business as they did that, and a light bulb went off and they said, "Why don't we do this for more e-commerce businesses?

It was so transformational for us." And so, Greg Carrey and his team did exactly that. They've built a team in the Philippines that connects you to incredible talent in the Philippines, across every level of the organization, every side of the organization. So that's like coordinator, manager, director level talent, and that's across design and marketing and operations and supply chain and customer service and anywhere you could need people.

And all with the value proposition, it's really, really simple, which is that your dollars go really far to attract the best talent in the Philippines. The Philippines is a country of like 80 or 90 million people or something like that. And and so there's plenty of really talented people who are working in US-based e-commerce businesses, who know who have been grown up speaking really good English, who know what it's like to [music] work on good businesses, and who are like real professionals here.

They're they're not just people who are coming in, like I said, at sort of assistant level, $5 an hour levels. Those kinds of people have a place. I think entry- level employees have a place in your business for sure, but it's not the real unlock. The real unlock is getting incredible talent at a reasonable price. You do that with more staffing. And I have story after story after story of people who have heard me run this kind of this advertisement for years have done this in their businesses and seen real unlocks happen because of it, including my own stories like this.

Go to morstaffing.co/ af morestaffing.co/af. They will help you with every single part of the process. They'll help you put the job description together. They will help you source the talent. They'll bring it down to just a few interviews with the most qualified candidates. I had someone tell me just the other day that they had a person [music] from more staffing who was just incredible in their business. It's a huge unlock for them.

And so that was all because they had taken that step of finding that talent. Um, and you should do the same thing. Staffing.co/af. >> I think one thing that may be different is between Dave Straw Man and your approach is that you correct me if I'm wrong or maybe speak to this like you'll pretty often tell potential clients or at least a couple times you don't want to hire us. You're better doing this in house. >> Yeah.

Yeah. Um, and like I guess what I' I'd be interested in hearing you talk about is like how do you know when you talk to somebody um whether or not you think our services are good for them? Um, and what like cuz >> one of the things I love and trust about you being in charge of our BD process is that like you don't sell to somebody unless you think they would benefit from our service and that we would, you know, benefit or be a good fit for them.

So, like tell me about the people that you say, "Nah, you don't want to hire us. You need to do this in house." >> Um, yeah. I that's that's actually not too hard. So, one of them is I can think of three scenarios where where I would do that. One of them is the client's just not far enough along yet. >> Yeah. >> To where even if I could talk them into spending the money uh on us, I think I look at it and say, I just don't think it would actually be a good use of your money yet at the stage of business you're in.

Like maybe you're spending 50 grand a month on ads and it's time to get some help, but it's not really time to get our kind of help. >> Yeah. >> Um you know, like like you just can't afford us yet relative to like where you're at to where even if we win, it'll take long enough time to where it's just not actually great. And there are other clients where I know they're going to lose money for a little while in the deal, but that on in the grand scheme of things, I think it's still worth it to invest for them in the long run.

So, >> um so this can go either way. Um but um but yeah, so that's part of it's just a pure financial consideration. If if there's not at a stage where that's there. Um a second one would be if they have a need for part of what we do but not all of what we do. We don't unbundle services. We don't really offer all of cart services. We do some some media buying all the cart, but um but I I've I've looked at some some brands where they they like actually have really good financial infrastructure or something like that.

Um and their media buying is solid and they just need creative help or something like that. And I would say like, well, we actually we could do that, but it's it's actually like you might want to go work with Fire Team, you know, and that's okay. Like they um that's all that's really the thing that they do. And as much as I think our creative would be great and would work really really well and all that stuff, like it's it's actually probably paying more than you need to for this stage of things and you should keep the other stuff in house or or the opposite of that, right?

They have um really good creative then I would do a media buying only kind of thing for for for some. But um but yeah, so there's some of that stuff uh that I think could could be there. So I'll offer a smaller service than the main thing or something like that. Um, but the third one actually is when somebody and this is kind of related to that is, and I I'm thinking of one particular brand, a brand came to me and said, "I love your content.

I would like to get you involved with our brand or whatever." And I said like, "Okay, let me look at your account." So, I looked and it was the best explainer creative I've ever seen. Like, it was like it was it and that's that was performance-wise. It was validating like they were growing really fast. They were doing awesome. And what I told this client was like you um you should not only not give this to us, you should not give this to anybody.

You are clearly like 90th plus percentile at the skill of generating this kind of creative. And even as you grow, your temptation is going to be to move into less like you're going to your temptation is going to be to move into a management role or or an executive role or whatever it is. But I'm just telling you, be really, really, really slow to that because you're really good at creating this kind of stuff. And I don't know if you're writing the scripts or if somebody else is or if you're overseeing the shoots or somebody else is, but the investment you're making here, it is just the very best dollars your business can spend and you you should hold that really close to you.

So like, you know, I kind of went to them and said like, well, >> I think we didn't have a media buying only slot at the And in fact, what I looked at in their business was that they needed um what they really needed was some somebody who had been down the growth route before who could really seriously help their financial plan um at the sort of highest level. And I looked down and said, "This is a perfect CD CTC candidate." Like somebody who >> the CTC system with mega hyper growth that this brand was experiencing >> but with but but without the CTC uh or but without any as much need for creative like just so they keep the creative in house whatever and they do that.

I just thought like that is the right agency for you. That what they are the best in in the world at is the stuff that like I think we're good at that stuff, don't get me wrong. Like we do financial forecasting for our brands all the time and we do a nice job of it, but they're just there was a level of sophistication that the brand required in their stage of business as they were growing and getting more complex and all these kinds of things that I looked at and said like okay, you got to do this.

So anyway, it was one of those things where I was saying to the brand like I am just begging you don't outsource this ever actually like what you're doing is too good and it's too demonstraable of a skill. there is no like more important quote unquote executive role and you just need to go do this. So, >> but um you know and I was like trying to think about like how do I learn from what they're doing as I was looking for creative you know um because it was so it was so good but I just think that like I said that was like 90th 95th percentile creative like that's just not most brands and I think we do a better job than the vast majority of brands on that kind of creative and so you know we we could be a huge upgrade relative to most.

So yeah it was that kind of stuff. >> Okay. Yeah. Love it. Yeah. I think maybe when I think about back to Dave's tweet, you know, um >> may maybe he's just having a good time and just making fun of a trope or m maybe he's had like real bad experiences with agencies before and I and I wonder if you know may if those experiences actually happened um [clears throat] if if the kind of sales process had been more upfront about you know >> if just there had been better communication about expectations and and um where there's a good fit fit and where there isn't. >> Yeah.

And I think I I've heard Dave talk about one thing uh that he's done that I would recommend to anybody actually, which is that in an earlier stage of business, he's stopped outsourcing his meta- spend to other people, got a coach and learned it himself, and he sort of he sort of stopped allowing him the excuse of like, oh, meta is this world that I don't know. I got to have some expert do it. Um instead instead he forced himself to like learn and develop some point of view here >> which I would recommend to everybody including our clients.

Like I think if you are running a TTOC brand and you are not conversant in real ways with the people running your ad account and and able to sort of push back at times whatever I look at that and say like you you're being irresponsible. Like it is the big it is as I always often say meta ads is very likely the largest single line item on your P&L. it may be number two depending on how much your cogs cost. >> So um so if you are running that business it you are responsible for that.

You have to know how that works. And actually what I think is that that becomes the breeding ground or like the jump I don't know if that's the right analogy. >> The jumping off point, whatever. It becomes the foundation is the word I'm looking for. The foundation for actually the best partnerships we have, which is >> that's true. >> The worst partnerships we have, I think, are when somebody on the client side looks at us and says, "You guys are the ad people.

Go make the ads that sell the products." You know, the best ones we have say it's hard. which is what Dave is reflecting actually I think in his tweet. >> Um it's it's actually hard to grow a business. There are things about my brand that are different than other brands and we are going to assume that the combination of your point of view across accounts and your intelligence and work ethic as an agency is complimentary to what we know internally.

We're all going to develop together point of view on what we see happening in the ad account. Nobody's going to pull one over on anybody else and just say like, "Oh, there's some metads magic that you don't know about that's making your spend work or not work, you know." Um, and instead everybody says like how do we all pull on the same side of the rope? Yeah. And and actually like try and say like what are we seeing?

Okay. What are what's the ad account telling us about what's resonating with our clients or our customers? And then back on the other side, what's our organic social and our email and our product development and our influencer telling us about what resonates that we can give back to the ad team etc. And when we when you have those two things going at the same time and when the ad team is seen as one part of the total business when there's investment in um uh other kinds of creative than what we make you know it's not a competition of all these people fighting each other for who's best it's like how can we all work together on this uh when that happens then you then you end up I think having the best success and you've got brands that grow really really effectively when there's sort of this like you guys over here or even competition like we're just trying to fire you because we hate your bill.

But uh and so therefore we're going to sort of like hold you to standards all the time that are uh impossible or whatever it is. When you have those kinds of things, it just doesn't go as well. Um and so so yeah, so I like I said like I think actually Dave's perspective that he has done over time, I've seen him talk about this is like he decided at some point, wait a minute, meta ads is not rocket science. Um I you know and there might be levels of it and I bet we would improve on Dave's stuff, right?

Because we think about it all the time and Dave has other things to think about in his business. That should be the case >> and I stand behind our methodology. But at the same time like he held himself to the idea that he could learn and develop his own point of view on this kind of thing that mattered and he he's not going to give that up easily and quickly and I think that's great and I I tell brands especially earlier stage brands they they actually have to do that.

They should do that. How do you feel like we can do a better job um of setting that tone or those expectations or having those conversations up front? Because like the pain is real, you know, whether you want to think of >> real existing clients or not um that you know we're currently having or maybe have had those challenges before, but like >> what is our >> It's a great question. >> Yeah. How can we do better? Um like when I think of our I'll just be frank.

When I think of like our onboarding process, you know, I don't know that we do a whole lot of that. Um, >> no, it sucks. >> Yeah. >> Yeah. It's one of the better. >> Is there like, you know, is there like a >> video message from Andrew? Is there like a canon like a >> Yeah. >> Uh, something that they, you know, like nobody's going to read a big old the one because there's two questions here. One is like what do we believe and how do we communicate it?

And then the second question is will anybody listen or pay attention or will it actually or will it actually change anything? Um and then maybe there's a third question which is how do you constantly reinforce that thing? So like when when the when the relationship starts to go off course like how do you identify it get your team to identify it and get it back on track? That's a I know that's a lot, but but what comes up for you when I mention all that? >> If you're growing an e-commerce business, you should be putting real effort into how to generate more value on your actual website itself with conversion rate optimization.

[music] And uh you should be doing that uh with my friends at Intelliggeems. Uh, you know, I actually have started doing something on this podcast where I'm bringing [music] on somebody every couple of months who's some kind of an expert in CRO and who can talk with seriousness about the kinds of tests that they're running that are really helping move the needle, push businesses forward for their clients all on the website.

I think in some ways I've neglected CRO with different brands that I have worked on in the past and that can be like simple tactical stuff. It can be much bigger messaging focused things and everything in between. Intelligence is the tool to help you unlock all of it though. And it's it's because Intelliggeems helps you measure not only set up tests for all the things that are most important, right? Uh so so things like price testing and free shipping thresholds and sitewide offer testing and you know simple CRO landing page tests of course can all be done as well.

Not only do they do that, but they also have post-purchase and pre-purchase upsells. They have checkout customization so you can test there. Just all kinds of really cool things, testing subscription options, all of that kind of stuff. But critically, they also help you measure it at the level of actual profit per visitor. Uh because they tie into your COG's information and spit out the an the results of every test based on all the way down to the level of profit, not just conversion rate, AOV, etc.

It's a really robust tool is the point. If you're serious about CRO testing, serious about value creation and this part of your website, Intelligjs is just one of those tools you should have. So go to intelliggeems.io, use the code ferris 20. F A R S20, get 20% off your first three months. Intelliggeems.io. Ferris 20 for 20% off your first 3 months. Or if you want to see what Intelligence would recommend to you that you should do first, what tests you ought to run first, go to intelligence.io/ audit, AUDit audit, and go through their little form there.

Really cool little exercise to go check it out for yourself and see what tests you should be running. Yeah, it's really cool. Go play with it. It's a fun tool. Intelliggeems.io/ audit or just intelligence.io fair 20% off the first three months. Really great tool. Go use it. Actually, it comes back to Dave's tweet a little bit. The thing that I most disagree with with what he said, um, he has this line in there, we're not just applying a system to your ads, we're building everything together to make your brand work.

And that is the thing that I think is actually mistaken in Dave's post. Like the idea of making fun of that idea. I am I am convinced that more brands need a system applied to their ads. They need they need like I come back to this all the time. It is incumbent on us to have actual point of view to have real beliefs that we think work across the board. We we simply cannot be it is not allowable to us to say um it's different for every brand uh because uh because uh like we have to be able to repeat process across the board.

And part of the reason I think an agency works, I think I think actually people Taylor points this out all the time. People at individual brands have a really hard time seeing it's they they tend to overextrapulate from their one brand's experience and assume that's sort of what it works how it works all the time. um when in fact like uh what we see is like a wider range of reps across a wider range of brands and we can actually see the things that do really work consistently across the board. >> And um and and so that is my first point.

But but then to round that out I think it's actually gets I'm going to get to your question I think um on the other hand there is something right about what Dave is saying. Okay. So let's just take the example of Dave's business popsmith. Dave is selling um fancy popcorn makers. We have one bought one for my wife for uh for Christmas and um it's delicious. My kids like making it. The popcorn's awesome. Go buy a pop go buy a Popsmith.

Everybody have them on the podcast. They're great. Think about what that product is. Popsmith is a fancy popcorn maker. It's like a couple hundred bucks. I think it's beautifully designed product. Um you theoretically could sell somebody the popcorn and the oil and the flavorings uh on the back end of selling the pop fancy popcorn maker, right? Um, but the LTV, but the like value of those things is just going to be low over time.

It's be really hard to create serious LTV off of that. Mostly what you're doing is selling somebody a gift product for like Mother's Day or holiday or a birthday or whatever, you know, y for things like that. That is that is the bulk of that business. Okay. If I try to apply my system for our supplement brands to that, we're we can actually use the same tools like a like a cohort forecast, but they're going to reveal really different things about the business.

And in fact, Popsmith is much more like uh just to use a common publicly used uh example, early stage ridge, you know, where it's basically like one product that nobody's ever going to buy a second time. You know, it's going to be really super low LTV. And so now we are what we are doing is formulating the some ideas around a category of brands and um and say like okay uh durable consumer goods like a popsmith is going to have a different path to 2050 $100 million whatever your goals are um than supplements.

And so therefore we ought to we ought to build >> um plans differently for these different brands. And if you start to play this game like okay PopSmith for example one ad type I've seen from them publicly they posted a lot is an explainer ad showing them what you need to see is like first of all you need to see the product is beautiful you need to see that it's cool and then you need to see how it works. You need to see there's this cool little spinning thing that you do on it that makes it kind of fun and like and you need somebody needs to show the popcorn at the end and show that it's delicious and and you know again here's how it works content I think showing different flavors and making it look appealing.

That kind of ad is what moves the product right now. Compare that to my jewelry brands, okay? Where you don't need deep explanation of a piece of jewelry. You just don't. Um or apparel is another example of this. You just you just don't need deep explanation of most apparel. Most apparel is not featured in such a way >> that that this is the case. And so now what we've done is named four different categories because um you've named durable consumer products, right?

Uh like uh like Popsmith or Ridge or whatever. Now we've named accessories, jewelry. Now, we've named um apparel, okay, which there's some overlap in all of these categories, actually, but there's overlap between apparel and and jewelry, but I can tell you they're also really different. Um, okay. And then um and then supplements. Okay. And that's before you get to other like CPG non-supplement like call it skincare or we have a a brand right now that sells dishwasher detergent tablets, you know.

Um, okay. So, how do you apply a system across all those different categories? And the answer is it the answer to that question is it does it there is a core system. There are some media buying beliefs that we believe in across all of those about how you do creative testing and how you scale ads and manual bids and cohort forecasts and um different creative types and still design and video whatever. But those are all inflected by the category.

So there's ways that those all show up and work differently in each of those. And this I think begins to be the sort of middle ground between what Dave is saying and not. And what I think to come all the way back to your question that we have to do and I've been thinking about this a fair amount is actually start building playbooks by category a little bit more to where we say like this is how an accessories brand grows.

Um and I'll just I'll tell you I'll just rattle them off right now. A jewelry brand an accessory brand grows with influencer with product release with sales and with a really full really good quality marketing calendar. And then over time they also create um sales channel diversification. Okay. So you show up in Target, you show up in your own own retail if you want to, um you know, whatever, like all of those different kind of places.

So um so that that is how those things grow. Supplement grows with monster um just incessant ad volume across a small skew set a lot of times trying to find hooks and angles and funnels that work with offers that work and then LTV over time, right? And so okay, so there's that. So whatever. So I could play that um different ways. I could tell you about apparel and all these things. And I think the what we have to do as an agency is first of all get as clear as possible about each of those.

Constantly update them as we learn more about different ones of them and then show the client on day one. Okay, this is your category. When we see brands in your category grow, this is what it looks like. And you may break convention here in all kinds of different ways because there are ways in which individual brands perform differently, right? But all other things being equal, this is basically what we think you have to accomplish and our and here's the part of it that we can do for you and that we want to be part of.

But also what we want to do is say we are a growth partner beyond that and therefore here is what the rest of your team needs to look like over time at different revenue stages and and all that kind of stuff. Now there's some amounts of specificity here that are going to be really hard to get down into but that's the way I'm thinking about it. And I'll and just one last comment on this. What we're actually starting to do is beginning to play with the idea of building pods specific to categories for this exact reason.

So, we have one pod right now that's like our jewelry pod. Um, and this is sort of an accident. We ended up with a couple jewelry accessories uh brands in there. Um, and we're adding another one now. And that all they're going to work on for a little bit is jewelry brand. So, our creative strategist is going to just master jewelry creative. um our growth strategist is going to really deeply understand LTV and jewelry businesses and sale moments in jewelry businesses and whatever it is and margin profile and all that kind of stuff, you know.

Um and so hopefully what we can do with that is continue to develop more and more and more point of view so that we can sort of fit this middle ground of like what's the system that's repeatable across everything and then how is that inflected into specific categories. Um and then what is my job as an agency person and then what is your job as the owner of the brand and how do those two things come together? I love that vision.

Yeah, off the cuff, I think it's the right one. But if I if I was going to push back on it, my concerns would be one, at what point do you have to develop so many granular playbooks? >> This is definitely a problem. Yep. >> Um, and then two, like I don't know the answer to this, but I'll ask the question. Like, does every jewelry brand fit into the jewelry playbook? Like when you think about your playbook, do they all fit or maybe the answer is yes.

Um, >> maybe it's not. How do you respond to that? >> I think it's exactly the right concern. I think it's possible that this whole that whole idea that I'm suggesting there was a fool's errand. Um but but there are financial realities here. Like let me just give you let me rattle a couple of them off to you. Okay. >> Yeah. >> Um some durable consumer businesses like Popsmith or whatever I I have not seen Popsmith's numbers so just to be clear I'm just making this up.

Right. uh without product expansion being meaningful um >> are like sub sub 20% retention rates in a year sub 20% expansion year which means you have to make all your money on first purchase okay >> um another category where this is the case is often like uh backpacks bags like that right >> yeah yeah >> okay leather goods can be like this as well uh surprising surprisingly low crossell happens in those brands yeah >> okay >> um margin profile in those businesses can be pretty good.

You can end up with I bet Puffsmith has really good margin. I think Ridge has excellent margin. Um, you know, but there can also be problems here um uh with uh with gross margin and then you can be in a really tough spot. This is why backpacks are really hard by the way. Um as as Sean Frank pointed out a long time ago, zippers are just expensive to make actually. Um and it's like surprisingly expensive and there's not really a way to win there. >> Okay, so there's that. um supplement brands like you're you're getting 200% LTV in a year a lot of times, you know.

Yeah. So, uh customer spends a dollar today, they spend three by the end of the year as long as some material portion of your spend is um >> is subscription and you're often getting that at 60 plus points of of margin delivered to the customer. Okay, something like that. >> Uh okay, so there's there's those things that are happening. Apparel, you can get 80 to 100% LTV in a year. Surprisingly good. But you also have massive return rates to the tune of 20% plus because uh fit is really hard online.

Okay. So no matter how good of a job you do here, fit can be really really hard. Um also it depends a lot on your ability to generate new products and sales. Um you know people just need a lot of shirts, you know. Yeah. >> Um and they like buying them too and so you just put out different stuff and you end up doing that. But it's it's different than CPG in the sense that you're not refilling something, you're getting new stuff or like, you know, uh like I'm wearing born primitive shoes and born primitive shorts right now, you know.

Yeah. Um and it's like so I I like this, they introduce the shoe, now I'm going to buy across categories. And actually like people won't do that. They won't cross-ell in lots of durable good categories, but at apparel they will like they'll buy, you know, the the woman who likes the leggings, so she tries the sports bra or whatever, right? >> Um that kind of idea. So um so yeah that's like 80 to 100% typically something like that.

Go ahead. >> May maybe your playbooks as you're speaking they're not necessarily about category of product but they're more arranged around like the atomic principles of the brand and like >> I think of like >> I think of like video games. It's like choose your fighter and like your fighter. >> Yes. >> Okay. So for this brand, I want one and when I say fighter, I mean my pod or my growth strategist or my artists like the people working on the brand are really good at >> um well I I definitely need long form explainers, you know, for this type of brand.

I need >> I need understanding of LTV. I or or maybe LTV doesn't mean anything and forecasting is uh kind of you know it's just like what are all the is there a way that you can arrange the the principles so that you've got like >> let's call it four I'm just making it up four four kind of brand playbooks one is like >> high subscription LTV you know fixed fixed products you know uh another one is like massive marketing calendar, you know, um, often product drops, you know, I I don't know what the categories are, but I think I think you get what I'm trying to say here. >> You're totally I mean, you're totally right.

And so the thing is when I start to play that game, the atomic principles game, what I start to do is I end up noticing that they seem to be consistent across in certain categories. And so that's why I end up going the category route, right? And it's funny, jewelry and apparel, I mentioned earlier, right? jewelry, you get a big advantage over apparel, which is that the return rate is not nearly so high because like fit is not as much of a problem. >> Um, but you also don't get the same repeat behavior.

So, you get better repeat behavior than durables, but you get worse than apparel. Um, and you you can often generate really high gross margin. And so, then it's like, okay, well, what is this business exactly? Um, yeah. >> And product development can be fairly straightforward in that business. And so, that can be interesting. So, yeah. So, you um, by the way, beauty, cosmetics is another category we haven't talked about.

So um so um so yeah and then and then what you just said is also interesting right the idea of like you know explainer content like this gets into creative as well right which is like with with health exactly exactly with health and wellness >> and I thought about doing this you know we have our ad format template library this idea of like >> there's certain kinds of formats that we see and we just use this as a starting point to make new creatives just as a way to package messages really and I thought like should we start actually um tagging each format with like what it's best for. >> So like long form explainer I've actually found can work for a lot of brands.

But um but but are some formats just really not that useful for supplement? >> Yeah. >> Like I don't know. Um or like in supplement or anything health and wellness like do you just need somebody in a lab coat at some point to sell the product? Like do you just need or somebody super jacked, you know? like is there just some element where like influencer or like something like that is just really important for being able to get this across and if you're not doing that then you're not going to win you know apparel.

Do you just need people who are your target demo that you're selling to making a UGC with the product in it for anybody to ever believe that it's for them? >> Um and and again there's just like and then they don't have to explain it. they don't have to do features and benefits like the same way with health and wellness like you might need the doctor to say this is this is good for you but in in uh in apparel you don't need that you just need them to like do 10 seconds of them like showing they look good in it you know like whatever um >> so yeah I and I think this so so the same kind of thinking applies across all of these and there's this way in which the creative is inflected based on >> you know what the different um categories are that actually is different than um than just atomic units.

Like it actually is about the category and the way customers interact with the category. >> Well, when it comes down to it, it what does it affect? Like the category affects the creative you use, which which affects the raw assets you need. It affects the landing pages you do or don't use. You know, some brands don't even have landing pages. >> Uh >> yes, that's that's a great one. No landing page at all versus like listical short form versus long form advertorial.

Those are all applied differently to different brand types. >> Yep. Yep. Um, so like maybe it would be helpful. We're kind of approaching this problem from a bunch of different lenses, but one lens or maybe if we thought about it more, maybe the more the most important lens is like how does it actually change what we do in terms of our services? And like you can almost come up with like a grid you know it's like categories across the top services along the side or >> maybe not service maybe in addition to services it's like strategy you know how we think about the brand >> you know it's like the services we offer the way we think about it you know maybe even like the practices or the cadence >> um the tool >> here's what about pricing I've actually thought like >> I've actually thought like I wonder if we need to take certain brands and say like, "Hey, you you actually need dramatically more long- form video creative than >> Yeah. >> than other brands and therefore we're going to staff you with more video editors. >> We're going to write more scripts and we're going to charge you more for it, you know. um versus like maybe you know and so maybe there are different ways in which like because the needs are really different that we actually could produce the service that is really specific to different brand types >> entirely because like the actual cost structure for us is really different >> um you know to where it would to where it would would be that way like even right now we tell brands we'll make 200 to 400 ads a month for them that's like that's actually a 100% difference in ads 200 to 400 is a huge range and I say that I always say that because it sounds like a lot and Every brand wants to ask me like, "Well, how many am I going to get?" And I'm always like, "Well, I I I answer the question this way.

I say, well, like probably your brand is going to work with a lot more still image creation than um than some other brands and therefore you'll be on the high end of that 200 to 400 range." You know, whereas another brand I might be like, I don't know, we're going to make fiveminute video explainers for you. You actually might be under 200. You know, the point is just to say we're going to try and create as much as we can within the constraints of the resources.

But like uh but yeah there's there's a reality to where like maybe we do price those differently and think about that differently over time as we develop more playbook around it you know. >> Does it change the media buying at all? >> Yes. Um at least to some degree. I think in some ways the principles are the same but um yeah I I think like it does create different challenges like the low skew count brand often like we have one client right now where it's a media buying only client where it's one skew.

There are two campaigns a value optimized campaign and a volume optimized campaign just to make sure we reach maximum number of people. Arguably we could probably get it all in the volume optimized campaign. Um but they're both working so we're not going to touch it. Um, and it's just like a really really simple setup. And um, and our goal in that is to be on top of of financial concepts, watching creative, feeding back what's spending and what's not and being essentially like a coach and strategist in in the midst of watching those things and then keeping an eye out for if and when they ever expand products, you know.

Um whereas like again an accessory brand or whatever it's like you've got like you've got a really wide range of AOVs in the ad account and so now you have to like separate adsets otherwise you get like different you know I've talked about this a lot but volume optimization like uh if you if you need a $50 CAC on product A and a $75 CAC on product B and their AOVs are such that those both produce a two to one rowass.

Okay, then you actually have to separate those out and keep an eye on them separately and it and it actually limits your ability to super consolidate the way that meta wants you to and so it can create some challenges there >> and and you have to be really attentive to those details. >> Yeah. >> Well, >> so it doesn't change whether we use cost controls or do creative testing, but it does change like what what the account looks like. >> Well, I think this is the right vision.

How it actually fleshes out and like the details of it. Um, I'm not sure of, but it feels right. I mean, just just in the way we internally already talk differently about different brands and like how to approach things and even what you just said about media buying being different. I mean, it it feels right to not just have a one-sizefits-all approach, which we don't currently have, but it >> yeah, >> it feels right to train our team and to to specialize team members on certain styles.

Like one thing I've been wondering, this is maybe another conversation. Well, we're probably out of time, but like >> yeah, >> we have certain artists that are really good at certain things, you know? >> That's exactly where I was going to go. >> I actually want to like if I got an artist that's like really good at long form explainers and that's what they love to do and they want to do that all day every day, then like >> let's just unleash that artist maybe across the entire organization. >> Um, you know, you could go down the list of like formats and >> or again, you build a pod.

You build a pod that needs that kind of thing and they work on a few brands all the time doing those kinds of things. I mean, we just did this. We we with this jewelry pod, like part of the reason I wanted to pull the trigger on creating the jewelry only pod uh as sort of our test run of this idea is that I have a creative strategist who just writes like beautiful jewelry ads. They're beautiful. They I like I've been no kidding on the verge of tears at times reading some of her ads like the because they are they're actually that meaningful, you know?

They really move me. >> Um and part of it is because the clients have like sincerely moving stuff, you know, so that they have they have brands that are worthy of that kind of writing. Um, >> for for anybody not watching the video, Andrew is visibly moved at this point. >> Yeah. Yeah. Yeah. Yeah. It happens to me a lot. That's because I think about it. Um, so yeah, but the um, you know, when she when she writes those ads, it makes me think like, well, why would I want her to write like >> Yeah. >> Um, an a a supplement ad, you know, when she has this skill, like why would I Isn't that just playing her out of position?

You know, it's like it's like a sports team. Like if you got a guy who can go hit home runs, like don't try to tell him to hit the ball on the ground and run fast, you know, like or whatever, you know, like >> um so uh yeah, so I think there's like a real thing here, you know, um where you could you can imagine different and I can think of different designers of ours who make who just like you give them the right lane of design and they they are awesome, you know.

Um and they're they're solid everywhere. It's not like they're bad at other stuff and the same with this creative strategist. It's just that like when you see them really go into the place where they they really thrive, yeah, you could set them up that way. It does make it harder to scale, I think, on our side because it makes the jobs less repeatable. But, you know, >> Well, I think I think this actually fits perfectly into where we're headed, which is like you can, you know, you can use AI to do the repeatable like more not mundane, but like kind of >> uh blocking and tackling so that then you can release.

So, so imagine the just think of a creative an artist who does amazing, beautiful long form explainers. Why are we making that person do you know status textonex only stills or whatever? Like why are we wasting their time when a robot can do that so we can free them up to like have more creative freedom and time and energy to do what he or she is really good at. That's kind of what I think a lot about a lot. >> Um yeah, I agree.

I agree. >> All right, great. Solved it. >> All right, great. Okay. Um, >> if we ever if we ever make some of these playbooks, maybe we'll release some of them publicly or tell people like, >> you know, I don't know, try to make some content that is good and >> you'll have them done tomorrow. >> Helped by it. >> Tough. No, bro. I'm on a flight to see you tomorrow. [laughter] >> Let's go. >> Yeah. Um, are you going to pick me up from the airport, by the way? >> Yeah.

What time? What time? >> Can you do that? Uh, >> text me. >> 1:15ish. 1 to 1:15. >> Sounds good. >> Local time. >> You got it. >> Great. See you then. >> Adios. >> Cyber. This is the cyber truck will await me. Can't wait. >> Cyber growth. >> See you. >> Big thanks to Patrick as always uh for coming on the show for our monthly hit on what's going on in our business, how we're thinking about e-commerce and our agency and all that.

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Like I said, fill out the intake form there or just email me if you want podcastfgrowth.com. tell me a little bit about your business that I can understand what we're looking at and then we'll see if a call is best or or whatever. Uh big thanks to my sponsors for this episode, more staffing and intelligence who allow me to do this show and hopefully it's helpful to you. [music] Go to uh check out the links for both of them in the show notes.

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