10 Reasons Original Grain Is Growing So Much This Year (With Nate Lagos) transcript

[Music] hello and welcome to the Andrew Ferris podcast thanks so much for joining me for another episode of the show today I have a great show for you with my friend Nate Legos who is the head of marketing at original grain and Nate is a great marketer and a great digital digital marketing and e-commerce thinker across the board but this episode was inspired by a brilliant sort of summary of how much they are crushing and having success tweet that Nate put out and that tweet is in the show notes so you might may want to go reference that because it is a monster of a tweet it is long and it has 10 reasons 10 learnings as to why original grain Nate's brand has seen a huge amount of success in the last year or so that he summarized and put into practice and absolutely love this I immediately reached out to Nate dm'd him and said let's please record a podcast episode about these learnings it is so many things that I feel like I'm harping on all the time ex that they're expressed in relationship to a very specific brand specific incident specific case where a lot of these things that I think are so hard to actually do they're easy to believe but they're hard to actually do seem to have come alive in Nate's brand and so we're just going to talk through it talk through maybe Point by Point go through what's going on you're going to like this episode a lot it's going to be incredibly practical and helpful for you if you are also trying to grow your eCommerce business with all the usual digital advertising tools strategies that we're talking about on this show so no reason to delay it any further let's jump in with Nate Legos from original gra Nate what's happening man hey what's going on man thank you so much for having it is my great pleasure thanks so much for just an absolute Banger of a tweet that got the conversation going it looks like the engagement numbers are pretty strong on it too I feel like you feel like it did pretty well yeah well I think probably my most liked and reached tweet of all time and now we've got a podcast coming out about it so it's great man I'm pumped good good get that follower account get all the engagement and then and then start monetizing for meon just just like watch the dollars roll in I'm trying man I'm trying awesome okay give people a little bit of context first Nate so let's talk your position at original grain what is original grain how long you been there just give people a little bit of context for what they're listening to here yeah so I'm the head of marketing at original grain watch company we specialize of making watches out of unique and reclaimed materials like whiskey barrels tone wood from guitars military ammo crates we' like to say that our watches don't just tell time but they tell stories because every piece is truly a unique and reclaimed piece of History the Brand's been around for about a decade I got hired on by the founders almost two years ago and they were facing kind of a plateau in their business you know grown fast and then scaled back a little bit in favor of profitability and efficiency so my job was to come in in and start stacking some profitable growth for us prior to OG I was uh the chief marketing officer of Dugout mugs I was the head of marketing for anchor Bat Company so if anyone needs to sell anything made out of wood I'm kind of the guy for that apparently but yeah it's been a great journey and I'm happy to look look back now on my time at at at OG and be able to to to see some of that great growth come to does original gra make watches out of baseball bats too you're stealing our product Road for 24 but we're yeah yeah we're yeah we're getting there it seems like a pretty clear one mostly as much as anything else because of your background as much as the tool itself can I give you another one for free that you should use this is an old idea I had when I was at FC Goods which was to take like vintage radios like old big wood vintage radios I don't know if anybody would care about that but I think there's kind of a cool story there around old radios but you see a lot of these old wood radios and some of them are like gigantic you know and so you could probably get pretty far out of one piece so yeah that's really cool you you uh you played highle baseball too right yeah I played at North Greenville University to small division 2 here in South Carolina and then played Summer Ball in Alaska in Cape Cod I was uh one of those weird sidearm pitchers that hitters have no clue what to do with but it was a lot of fun thanks for including that I hang up the jerseys so everyone knows I used to be a an athlete I like to to plug that as often as I can I that's fine I didn't know that you were a side armer I I threw sidearm in high school actually as well so but I actually I would switch arm slots I was bad I didn't play in college so uh like I definitely wasn't wasn't as good of a side armor as you are I think but yeah there there's a guy I was um I've talked with at Drive Line baseball a company that I work with who was there for a while who's who was like reaching down you know even past his pro career being over and all that playing some Semi-Pro ball like going like 9192 sidearm which that that's pretty BR that's pretty wild right like he like basically was hurt his arm and then kind of had to drop down and suddenly it was just pumping 9192 anyway crazy so let's talk let's talk about your Tweet so here's the headline of the Tweet is in so many words right an unsponsored list which I appreciated by the way unsponsored there's just nothing worse than the garbage especially sometimes long tweets than the garbage things even when I when I work with my sponsors like this episode as a sponsor and everything the one thing I will not include in my sponsor in my sponsorship packages sponsored tweets because it's just the worst content in the world an unsponsored list 10 reasons we've been able to grow our contribution margin by big percentages this year so actually before we get into anything specifically one of the things that jumps out right away is the emphasis there on contribution margin so can you talk about that in fact I mean we should just go into to number one here the only thing we care about is contribution margin that's the number one reason we're not making big big decisions based on me Facebook R CAC or any other metric the goal is to add money to the bottom line and none of those metrics have a 100% correlation with bottom line growth so start there that I that alone I mean I I actually just recorded an episode all about the power of focus in a business and eCommerce business I think you should be applying that mentality about Focus to the issue of of contribution margin you know in in my business service business it's a little different than that so much happens when you start to focus on contribution margin like how did you arrive at that how did you have you always been that way have you been when you're Dugout mugs were you thinking that way or is this like a more recent thing and and and and sort of how do you how have you maintained focus on that yeah so it was uh it was kind of a a change of mentality in 2022 last year we like many Ecom businesses had kind of handcuffed ourselves to our myrr or our cost of sale and said you know if if myrr is at you know 35% or below we can keep on scaling if it's not we have to cut back and then we got to actually October of last year where our myrr looked fantastic and we lost money that month and we were like well how the hell does that happen and we realized we weren't accounting for any of our fixed costs or any of our overhead or or cogs or really anything in that myrr calculation so we Define our contribution margin as Revenue minus cogs minus ad spend minus marketing department overhead so my team agencies I pay my employees content creation fees anything that like marketing department spends money on goes it into that so the only things really not included is kind of like my salary and like our executive team's salaries and and it shouldn't be for the record like that's not that's not contribution margin right so like it's it's okay you know you put that in a different bucket and analyze that separately yeah yeah so going into this year we you know looked at all the numbers and realized there was probably you know four or five months last year where performance was great we were getting as much out of our ads as we could have possibly asked them to but the bottom line for those months didn't look great because we weren't pushing enough volume to make up for all these other costs so we went into 20223 with the focus of like we've got a contribution margin for the the the year we also map it out by month we say the only thing we care about is hitting that that goal so if the goal is 100k for the month it doesn't matter if we have to do 200k in revenue or 600k in Revenue that's the amount of money we want to be adding to the bottom line yeah that's so good I was just working with with a client actually who had a really big spike in spend for a few days and so volume went way up and efficiency as a sort of rounded up combined metric efficiency went down significantly right so me m like you know which which I think you probably most people listen to this know that metric but it's just it's just total revenue over total ad spend is what that is marketing marketing efficiency ratio IO is what me is and so yeah you know Express either as a percentage where like you just did you know 35% would be the spend against the total revenue 35% spend or sometimes expressed as like a in in the same way as a Rass would be or something right so and that 35% example would be right around a 3 to one slightly less in any case this Brand's M went way down and we were looking at it and I was I was just you know going through and showing him this exact same thing which at first you know he had the same thing he'd been used to kind of running off of me and that's you know normal and whatever so I was showing him like hey it's okay like there it's actually a good thing that your M went down it means that we were able to spend at an efficiency where we were adding positive contribution dollars at that spend so we like even though your your like combined efficiency looks quite a bit worse than it did before our contribution margin went up our contribution dollars went up and it went up pretty significantly and what's more we know from the customers that we acquired today that a lot of them because we acquired so many customers that they're going to come back over more time and if you've ever looked at this carefully with your cont what you know is that because spend is part of the contribution margin culation that customer who comes back is way more contribution margin positive than that customer on that first purchase right because you don't have to pay for them the second time and so that that ad spend cost that's going into into that calculation goes away and so um so acquiring all those customers really really matters if you have and this brand is not a super high LTV brand or anything like that but it's enough to where it will matter and and so it goes from there so yeah um this interesting you say by the way that you're not making big decisions based on these metrics if contribution margin is what you are tracking but you're not making decisions based on Facebook R Us C orme or any other metric are this gets into like the attribution conversation a little bit but does that like how are you actually making decisions then in in the sense of like you know if are you thinking about optimizations are you looking at in platform metrics at all like to make those decisions how do you make the decision based on contribution and not Rass practically sure so when I say we don't make big decisions based on any of that I mean like we are not increasing or decreasing our total budget we're not changing the goals for you know any particular month the minor decisions we make are often based on either triple whale or in platform metrics cuz like obviously you know click through rate cost per outbound click on ads like that stuff matters with us being a little bit higher aov or aoov is $325 this year I don't trust attribution as much as I did you know working at a brand where the aov's 50 I think we're a much more considered purchase so I'm not a big believer in in Facebook Raz I like ads that will spend money will get me quality traffic at a good price and when I scale Those ads if contribution margin goes up to me that means it was a good decision the only other thing where we're doing is we have a spreadsheet where we're tracking advertising dollars versus Revenue by skew and by collection within our store and that's been really interesting to look at this year cuz we'll advertise our whiskey barrel watch collection and if we spend 10 grand on a week and from that collection get 40 Grand in Revenue that's great that's a win but that number typically does not correlate with what Facebook or triple wh says the Raz of that campaign is so we've kind of taken a more holistic view of our marketing performance this year and really just mainly focused on money out versus money in okay I want to linger on that but but we got you know 10 points here to get to so uh I don't even know actually we'll get to all of them maybe we'll leave some for the people to go discover afterwards but number two we work in a stable ecosystem we make changes to our FB ads once a week we make it changes to our fbss once a week there are so many people who are listening to this just at that sentence just like what like what that's wild Nate says we're not tweaking stuff daily we're not reactionary we don't panic when we have three days of poor performance we just wake up every day do the work that we know will improve performance down the line and don't worry about daily volatility having a steady hand on the wheel is incredibly valuable in Ecom not just for your bottom line but also for everyone's mental health and morale there is so much to say about this let me just hand the mic back to you and have you talk about it tell me more about not making changes to your face account it's uh a scary proposition but we have reaped the rewards of it this year and I think it's it's two parts to it one I truly believe Facebook works better when you leave it alone and do the thing you told it to do we got to a point last year where we were like seems like every time we touch something performance sucks for two days like maybe we shouldn't touch things for a while so that's half of that the other half is like what it does to team morale I think is such an understated thing in Ecom like I know at times when I've worked and lived in a stressful environment when my boss texts me at 10: a.m. because sales yesterday were down 9% that is not a fun nor productive environment to work in so I read this number two to myself once a week just to remind myself how and why we're doing it but yeah it's been so important for for for us one I don't think you're going to make better decisions looking at something every 24 hours and you're going to you know a week you're going to have more reliable data the longer you let something sit but two it's just let us focus on all the other work that we know can improve performance because in 2023 I don't think anyone's finding any hacks or anything big in their Facebook ad account that's going to double your business we know a lot of what's given us success has been outside of the account so that's what we're focused on and we're letting Facebook just be the megaphone that is so good the I think this is something that's very hard for people to really internalize first of all there's like just the reality of the human action towards or human human bias towards action right like people have that as a baseline thing like they you just you just have a bias towards making a decision and when in fact not making a decision is often the better decision and so so you have to fight the bias first of all secondly your point about like mental health and morale is really true I've been around the Facebook ads game for you know eight or nine years how long have you been total so you just know the sort of Live and Die daily adjustment kind of thing that happens and i' I've been having a little bit of debate with Taylor holiday gently recently about whether or not it's better to behave off of daily tracking for these kinds of metrics or weekly tracking I prefer weekly tracking in part because I don't want people to react every day and T and Taylor is seeing a different set of things than I am and I'm I want to be slow to like to make it sound a certain way or whatever like I think I think he's there's a logic to what he's saying too which is that like in his point like if you get a day or two behind on a spend plan and a revenue plan it can actually be really really hard to make it up and so sort of being really on that each day can can matter but I really really like what you're saying here and I think that the Baseline idea actually that meta is really good at optimizing and you should get out of the way is like one of the truths to internalize about running meta ads you know that if you make too many changes or if you if you do stuff to get in the way of of it and make little tweaks based on these things you will interpret data wrong all the time you will just get in the way and mess it up I think this is a like a fascinating point was this hard for you to make a switch to doing that it was hard for my bosses to make a switch to it I like have firmly believed that this is the right way for a while but that said it's hard to wake up on a Thursday and it's been a a bad week all week and your head of marketing is telling you the right thing to do is nothing so we went back and and forth on it we've broken this rule a handful of times but I know every day when I wake up my job is already to work on the things that are going to increase performance in the future I don't need to panic and try to get Revenue numbers up today I think that leads to a lot of bad habits I'd send out more emails and texts and Flash to sales and stuff that's not actually going to help grow the brand in the future it's just going to make us feel a little bit better today so just kind of zooming out focusing on long-term growth uh yeah that's the other reason I don't like sometimes some of the like in like daily kind of adjustment thinking is that it just it just NE necessarily leads to short-termism like if you take larger swings in in longer time intervals you're more likely to make bigger impacts with those larger swings and you're less likely to do the little like short-term things that are that are potentially going to hurt you you know so yeah okay number three we set aggressive goals and spend to the level we want to hit we don't believe in waiting for performance to get better to scale want your business to grow spend more money on ads it's that simple there's an obvious problem with this Nate which is that what if your ads are not producing to the level that you want them to the the the math tells you that if you know your Blended return on ad spend isn't as good as you want you should spend more money I think you actually posted an example a couple weeks ago of you know if you're spending a 100K on on ads at a 3X return then that return dips to 2. s the right answer to add more money to your bottom line is spend more money kind of counterintuitive but the way the math works out is volume solves a lot of issues and I don't believe that we as marketers should let Facebook or you know myrr or whatever dictate how we grow our business I think we should be able I think our our our job is to make current performance work for us especially when our business is so reliant on Facebook ads like there's a lot of things that are out of our control so let's focus on controlling the things we can control what we can control is our budget and if ad performance isn't as great as we want we should probably increase volume we should probably see if we can get cogs cheaper we should probably try to in increase our aov or LTV we should try to bundle so there's a lot of things that you can do but I don't believe cutting budget because Facebook tells you it's row as isn't great uh is the right solution to to to grow your you're saying that that is just because because actually your performance is better than the in platform metric like at least a little bit better and you could take the volume with a thinner contribution margin and still win basically is that like am I am I walking back the math you just said right yeah yep yeah I think it's it's really good this again kind of gets into a little bit of an attribution game but this is part of the reason why like you know personally I don't use an attribution tool at all of any kind except for the metaz dashboard which I mostly use as a pulse check and I think like what you're saying which is measure contribution margin will actually lead you to a a different kind of approach than than sort of any any dashboard or anything like that will if you're actually if you're actually measuring the contribution dollars and if it's actually producing those it's working that's the answer and that's that's simple yep we have every single day for the year forcasted Revenue ad spend and contribution margin and we just look at it daily and we look at it weekly and at the end of the week if the number is not what we supposed to be hitting we could can make a change but we're not going to cut budget just because myrr isn't where we want it you yeah it's good okay number four we've cut our marketing Department's fixed costs in half from a year ago as a head of this department I want the highest percentage possible of total marketing spend to be going to ads so we've cut some awesome agencies and Freelancers that were doing amazing work because we found more efficient ways to get that work done in our case a couple in-house team members along with me that wear a lot of hats AKA were built different talk about that yeah you know part of you know coming into a marketing department that needed some optimizations was cutting some teammates that were doing great jobs but you know as we looked at some of those months where you know our myrr was great you know our our ads were producing you know over a three or or three and a half myrr but money's not getting added to our bottom line because we're paying a lot of agencies and free Lancers that at the end of the day were kind of nice to have they were kind of luxuries that we couldn't afford anymore so me and a couple team members came on were far less specialized than some of our our previous Partners were more Jack of all trades but yeah we've been able to cut fix cost a ton which lets us spend more money on ads which ultimately adds money to the bottom line so it's been good it's been hard it's been stressful to run a lean and mean team but like I said at the end of the day I want as many dollarss as possible going to ads as as we can afford the way that I have typically talked about this and I think this is part of the deal here is that in e-commerce being able to run a low Opex as a percentage of your total revenue is one of the built-in advantages of the business model that like e-commerce scales really well against a pretty small team and being pretty dogged about keeping a a small team and and really resisting those nice toavs like as you call them right is so crucial and I think part of the reason that you're able to do that probably is because of the way you're tracking the outcomes right if you're if you're looking at the contribution margin and then you know measuring that against sort of measuring that down to bottom line profitability and then seeing kind of where the problem shows up between those things you're going to suddenly see like holy cow we're having a really hard time getting out from under this Opex number even though these people are doing a good job and they're hardw workking at all those things and and so I'm just like I'm a huge huge believer that Brands need to stay exceptionally disciplined about adding team members to their business because very often the case that the cost is in excess of the value for a brand in doing that even if the people are doing a pretty good job because there just are so many ways to stay efficient in e-commerce in particular so yeah do you guys Outsource Talent at all like do you are you guys working with a distributed team uh nope everyone is in house as of a couple months ago a year and a half ago we had several agencies and free Lancers on board but have taken everything back inhouse um it's been a lot more efficient like is it is your team all in the US we do have a overseas yeah you have heard me talk about more Staffing and I'm going to tell you again that if you're hiring I don't know why you wouldn't consider using them to do it Filipino employees in e-commerce come across to your business in the US remotely of course with incredible experience incredible talent and incredible work ethic as well and more Staffing can help you locate those people all for a much lower cost than hiring those same folks in the US but a great price for them which means you attract great talent in the Philippines to your business because you're paying a good local wage there even though again it is helpful for you if you're trying to grow a lean e-commerce business at the same time add great talent it is a great way to go do that they will help you with all of it they have an awesome offer where if they help you find an employee that gets added to your team from the Philippines and it does not work out for at least a year they will replace that employee for free so there's really no risk to you to doing it and so you should go and consider working with more Staffing right now by going to more now.co I am personally working with them and using them to staff up aspects of my business they've been incredibly helpful to me and so they will be helpful to you as well more now.co go work with more Staffing today if you looking to add talent in any part of your e-commerce business they will find you incredible Talent at a great price they will do it well go check it out more now.co let's talk about number five we raised our prices we're bundling more and we're discounting less than we ever have aov and LTV is Sky High compared to a year ago we're now requiring much more valuable customers than we ever have been raise your price there's an old quote from Mark and I think it's Mark Andre there was this I'm going to butcher this but you're going to get the idea that there's there's some old story that somebody was interviewing mark andreon saying if you could put one thing on a billboard that was going to attract the attention of everybody I think at the time it was in Silicon Valley about about what you can do to make your business better what would it be and he said he would put raise your price that would be like the thing he'd put on a billboard to tell everybody what to do people are terrified to raise their price they all fear a mass customer revolt and all these kinds of things talk about how you guys thought through this and how you arrived to the conclusion that you did yeah well everyone in marketing loves to complain about Rising cacs but no one ever talks about well if cacs are rising just increase your aov seems like a simple enough solution to me and we've executed well this year part of it is just looking at the state of America right now I think the inflation number is a lot worse than they're telling us it is and I'm looking at my grocery bill and my Netflix bill and my gas bill and I'm like damn everything is getting more expensive except for watches why aren't watches getting more it expensive so you know I gave a a a whole talk at triple whales event about number five here but you know when someone was considering a $400 watch a year ago that was two weeks worth of groceries that they're considering paying for this watch now it's only eight days of groceries that they're considering to buy this watch so you know I think prices are are raising everywhere so I wouldn't be afraid and the question I posed to everyone at at the conference was you know is anyone here competing purely on price does anyone if is anyone's only competitive advantage that you are the cheapest product out there and for most of us in Yom the answer is no so if we're not trying to compete on price then why are we trying to compete on price why wouldn't we try to move up Market why W wouldn't we try to have a premium product so we're now actually going into product development meetings with the goal of an aov of saying Hey I want a $1,000 watch go make the best watch you guys can and they're coming up with all sorts of stuff that's going to be awesome for next year but yeah it it's been really big for for us and then on the uh on the discount side we were discount addicted like a lot of Ecom brands are every other week was like 30% off here $100 off here we've cut back with how aggressive we are discounting this year and we're offering more bundles instead so to get the best deal from us you still have to spend a higher than average aov and all that combined means we're requiring more valuable customers who are going to probably buy again without a discount needed and are going to stick around for a longer time so all of that has uh has really added to the bottom line this year the reason you know those customers are more valuable is because they're more willing to spend more money up front which just sort of indicates that they are a more valuable customer long term up for front and over to so we're starting to get you know LTV see data from customers we it I mean do you think it's because the kind of customer who is more willing to spend more dollars on day one is also the kind of customer is more willing to spend more dollars long term yeah I think it's that simple I think it's probably customers a little wealthier has a little more cash on them if they're not hunting out a 30 or 40% off deal that means they're probably comfortable spending whatever we're asking so we've seen a lot better LTV data from these new cohorts as well makes sense of sense it's so interesting man people have they tend to think of the price of their products and their businesses as something that was handed down from on high and it becomes a genetic ele El of the brand you cannot change the price if you do people will freak out blah blah blah and it's just wrong it's just wrong you you actually can raise your price you can even actually use the moment of raising your price to Garner Goodwill by basically telling everybody hey we're going to raise our price in a week go buy it right now and it functions like a discount without discounting it actually functions as a discount while signaling value in the company because you're signaling that your price is going to go up so so you can use that for a nice moment there's a great moment at e-commerce fuel at ECF live this year where the there was a keynote speaker who was a pricing expert and she was more around like services that was the main area of expertise that she had but she was talking about people raising price in general and just how margin positive it is to raise your raise your price when you if you think about it you add you add to your price that money goes straight to the bottom line there is no Associated increase in cost with that right your shipping cost to send it to the customer stayed the same your Cog stayed the same you just raised the price you just all you did was added margin and so so if you can do it it can really work now like of course there are times when it doesn't actually work out as well as you would hope it would it was although it doesn't it doesn't usually result in in fact I've never heard of it resulting in in a revolt and somebody asked this woman this question at some point during the Q&A and said hey can you give me your pricing horror stories because she's she's up there telling everybody raise your price raise your price raise your price and somebody said hey can you give us your pricing horror stories like a time somebody raised the price and it just went like terribly and created all kinds of problems and she goes no I don't have one I've been in this game for a while I don't know of a single example of a time when actually people freaked out and so yeah well then like if it happens for the first time in history change it back that's right it's not that hard yeah who cares like nothing lost like you learned that you are at the top of what your price should be be but I would bet anyone listening could raise their prices by 10 to 20% and they wouldn't hear a word from their customers okay number six we've launched a lot of awesome new products this seems to not get talked about much on Ecom Twitter and I don't know why i' take a banger product strategy over the best marketing strategy any day of the week Nate this is 100% correct this issue is totally true the reality is especially in a business like original grain where it is sort of indivi you know there's there's no consumable element of that product release strategies is going to be the lifeblood of how you maintain growth in the business and profitability in the business because you're never going to generate LTV on one watch right if I buy a watch from you I really don't need to buy a second watch from you most likely maybe you know some small subset of people are going to be super fans who do but on the whole it's not going to be the case instead it's going to be so much about like regular product releases and and getting things continuing to move that way that is the only way for a business like yours to grow and to grow specifically with returning customers and it opens up your ability to reach new customers with new products that new people will like so yeah talk talk more about how you guys did this is this like a new thing for original gr have you guys sort of added additional efforts to this talk through it yeah so we've uh uh We've increased the velocity of how often we're launching products quite a bit usually they were doing you know three or four big launchers a year this year we've pretty much had a big one every month and next year we're looking to add to that as well but yeah as much as I would love to take credit for all of our success as the marketing guy I know that it's not my job to sell people watches they don't want it's my job to sell people watches that they want to buy and I can't do that unless our team is creating dope watches so it's been really great to see the guys get back in their product development bags and start turning out some awesome stuff because it's it matters so much and to your point there there has kind kind of been like two strategies we've taken with everything where like we launched a collaboration with Buffalo Trace bourbon last year where our best-selling collection was already made out of whiskey barrels so we're like all right let's just attach a premium distillery's name to it and let it rip we saw that Crush for our base so returning customer revenue is way up for for that because we know that people like that already and then also running ads with their logo on it has helped us tremendously on the other hand this may we launched a collection with Toyota Racing development where we used the racing grade aluminum from their new solar octane line of trucks to craft into watches and this was a completely new demo for us and this was really kind of a gamble on like well let's see if we can make something work for this audience it crushed super hard so now we're like all right how do we make more stuff that truck guys are going to love so we've likeed to kind of use it in both ways but yeah I've told the the guys like hey there's no such thing as too much product for me because I know the more we launch the more at bats we're giving ourselves to find some new bestell people misunderstand this too like because so because every launch obviously does create this LTV opportunity somebody's going to be really stoked on that who bought something before but that those two examples are perfect example which is also now like when you go to run ads against those two products right like those are going to reach different people and so it it functionally expands your ability to reach the maximum number of potential customers and therefore not only generate the LTV off of the returning customers on the launch but also generate a bunch of new customer Revenue based off of uh the fact that now you can speak to another person in a new way that it's going to really deeply resonate with them and and so they both really really matter with with new product releases yep 100% % all right number seven this is going to be a really good one so here it is the entire one I've got that dog in me I mean this is I bet this is kind of a joke but I bet it's kind of real yeah so it's a a joke I'm pretty dumb but the real message behind it is if you're an Ecom brand that I think's doing you know sub 40 million a year and your head of marketing isn't in the weeds I think that's kind of a problem I think you should be in Facebook be in clavo be in post script whatever your tools are I think you need to be really close to the work that's getting done that's something I've been I don't want to say forced into but it's a necessary part of my job running a Le it ties it ties really directly Ties That Opex thing that we were talking about earlier right is that like yeah if you are shaving those team members off then the implication of that is that you are actually in the execution of the work yeah so as much as I love managing and understand the the power and and scale of that being really close to what we we we do has been great for us so if you're out there and you think you're too good to get in canva and make some ads or get in clavio and send a plain text email I would highly encourage you to do that because I think you're gonna learn a lot more about your marketing efforts by actually getting your hands on it yeah it's really good man it's really good all right number eight we don't suffer from shiny object syndrome we're not chasing new trendy tactics and softwares we have a four-page strategy dock that I created last December I've only added two tools to it since then retention. comom and intellig GMS AB testing when we evaluate a new tool tactic teammate we ask ourselves will this increase aov increase LTV increase customer acquisition velocity decrease CAC grow the brand make our workflow more efficient we need to be able to say hell yes to at least one of those questions to add something to our strategy that is uh so good and there are so many people who or this is one of the great problems I think especially when brands are struggling they just go start chasing stuff and want to add stuff and do you know whatever and focus is so so so hard people are selling them stuff all the time people are listening to podcasts like this one and they hear about something they have to try and like oh Andrew said to do that or you know whatever pick your person of choice it doesn't it's not just m necessarily me you know or they're on Twitter and they see somebody say you got to do the you know whatever and so it just becomes really hard to resist the constant lure of the things you could be missing out on here how are you guys managing to do that you reference this four pageat doc maybe that's the key is that you've sort of written down what will work and what won't but how are you actually managing to resist shiny objects in Dr everybody wants to resist it but how are you actually doing it so we intentionally pick our heads up every quarter and look around and talk to some of some folks in the industry see what's new see what other tactics and tools people have added but that's a very conscious decision and usually only lasts a week or two of like we're looking for what else is out there we did it at the end of q1 and decided nothing was worth bringing on we did it at the end of qu2 to decided that these two tools were but it it's just a very conscious flip of a switch that's like Hey we're going to pick our heads up evaluate what's happening in the industry and then for 12 weeks we're going to put our heads back down we're going to do the boring consistent shipping away at it kind of work that we actually believe will increase performance and just make sure we're really not paying attention to much it's the reason why I really don't listen to too many marketing podcasts besides the Andrew fah show great say that it's the reason I don't you know read a lot of newsletters out out there I'm confident that the strategy we've created will double our business a couple more times before we need to add anything major to it and because we feel confident in that and because we've seen it work already it's been easy to say no a lot more often than we're saying yes to new Tex yeah I'm actually with you I don't I I listen to Taylor holiday in the eCommerce Playbook podcast sometimes I've told Taylor I don't listen to every episode and it's partly for the same reason it's that I actually am at a point where I sometimes don't want more input and this I think it's a career stage thing and and all that but the willingness to purposefully say no to stuff and I actually saw Jess Bachman who I had on my Show recently say something about this too which is that like another thing he does is actively and purposefully pursues Knowledge from other from other disciplines right so like he's purposefully trying to go read non- business books and sort of just get other kinds of inputs in his life to sort of open his creative mental space a little bit more as opposed to just another business thing all the time and again I think there's sort of phases here and and personality types and I've known other guys who I think are really great operators and gals who I think are great operators who who are just devouring business books all the time you know so this probably some personality thing here as well but but yeah I like this point very very much because again there is just this element of if you start to sort of boil down all these eight things that you're saying here so far that we've gotten to right what we've said is focus doggedly on contribution margin run a lean Opex get into the work as you need to and work hard at it spend because your advertising works and creates value there don't make too many changes it's a lot of different ways of saying if we try to be really focused on generating contribution margin in our business that means that we say no to a bunch of things we say yes to a few things and we say yes to do them as well as possible we don't overreact we just really work on having a great job with product putting that product in front of people and then tracking contribution margin relentlessly and there's a lot of potential stuff to get in the way of that and what you're saying is exactly right under you know for for brands in a certain stage of business that's the whole game that's the whole game you have to just really do that okay two more I'm actually amazed that we were getting through all of these right now but I here we are good okay number nine Facebook ads got cheap again $860 CPM year to date go ahead and say I don't know what your historic CPM is obviously different cpms cpms are different for every brand and every customer type and all those kinds of things but this actually speaks to something really important in so does number 10 which says something about the macro environment in which you're playing which is really important so talk more about that I'll take a little bit of credit for the decrease in cpms because we're running way more static ads than we have video in the past but it's across the board cpms on Facebook are cheaper this year our Facebook structure is pretty simple we separate our campaigns by collection they're all broad targeted we touch them once a week and that's pretty much it so whether it's we're leaning heavily on Statics or just the current state of Facebook cpms are super cheap that's down like 40 or 50 per percent from last year so we're reaching almost double the amount of people for every dollar we spend can't underestimate how big of an impact that makes on the business it's really massive and this is something people also just don't get about Facebook which is that like actually they're just kind of constantly finding as you know Instagram reals placements open up more or as you grab Stills or whatever and you keep doing things like it's it's definitely possible that this gets better over certain times it's hard to Target it too much but if you can reach more people and you can get in front of them can make a really big difference let's do one more and then I want to make a a broader reflection about about the sort of environment in which you're playing the game but the final number 10 and again I don't know if this is a joke or not but I bet it's not number 10 Watchers are cool again talk about that yeah so watches along with crypto and nfts had a big uh little bubble there on Co that's come down slightly from the peak but it got a lot more people into watches into watch making and it's people kind of at at every range of the market as well it's not just the Rolexes and Richard Mills and like the super high-end pieces it's trickled down to us in movement and you know every other brand that sits in that kind of sub $500 range so it's been good to capitalize on that we are not big enough where we're like creating demand for the watch industry but the demand is there and we've been able to uh capture a bigger chunk of it than a lot of watch this is the most over or underrated thing about like quote unquote good marketers good brands good advertisers whatever is the there the demand side of the equation it's just like the environment between people's spending power between the inflationary environment between what people are interested in at a time like it's just there are all of these things and this is like gets back to the Facebook CPM thing a little bit too where it's like there's a lot of this stuff that's sort of outside of people's control but it has a huge impact on it and it's I actually think it really reflects well on you Nate that you put that in there as something you recognize that is a Tailwind for you because every business is going to have tailwins and every business is going to have headwinds at different times and so recognizing when it's not just that you're a genius it's that you're actually getting some really significant Tailwinds here and now the genius move is actually to see it and to try and do everything you can like for example this one pairs really really well this Plus cpms pair really really well with the thing we talked about earlier which is like go spend more go spend more money right now while you possibly can like the great regret I still think about this all the time and my first brand I worked with was Kao the silicone wedding ring company and Taylor Hall and I talk all the time about how we didn't spend enough and we you know 0 to 20 million in a year and a half with no outside funding we were spending plenty of money on Facebook that that we knew what to do at the time this is you know eight eight years ago so it's a whole different environment and we just look at it still and go like why I mean I mean we were still getting three to one or whatever on our ads you know something we couldn't imagine now we should have been spending should have been spending should have been spending because it just like was so silly of us not to do it and when you have Tailwinds like that man you just got to take advantage of them you know the other example I think of here for for anybody else who's a baseball fan like Nate I is like look part of the reason people might hit a lot of home runs is because they play in a park where you hit a lot of home runs and that's like that's part of the reality of it right if you're playing in Colorado then you're more likely to hit home runs than in other places and it's because of the reality of the ball and the environment all those kinds of things so go take advantage of it when when you can yeah I I like to to say that uh that everything that's going well is because I'm very good at my job everything that's going poorly is because of macroeconomic headwinds that I can't control but the truth is a lot of those Tailwinds do help and I think it's up to us as marketers to make sure we're giving the ball to the guy with the hot hand and I look at you know for whatever reason the current state of the world advertising for regional Grand is going well right now so let's put all we can in that bucket knowing that you know we don't know what tomorrow will hold we don't know what 20 24 is going to hold so we're doing everything thing we can to go get it while it's hot because I too have regrets of being like man why didn't I place bigger POS in 2018 why didn't we spend more on ads all that stuff haunts us a little bit I I think so uh I definitely don't want to be making that when you make that mistake though it does probably help you to internalize not doing it again it may help it may make overreact at some point maybe your next po gets too big or something but but yeah you had a little summary statement at the end here remember this list next time someone tells you a new software or ad hack grew their Biz by 40% real growth happens in the trenches and by the trenches I mean my air conditioned office 30 feet away from my bed so glad to see that you're in the arena Nate you're in the arena dude this was before the in the arena tweet but it's like it's so funny to me when people are like I'm grinding and I'm like I'm looking I'm typing on a keyboard that and my monitor has a blue light filter on it so it's not too harsh on my eyes like we're not grinding guys okay like let's let's chill out we're all way softer than any of us want us to admit I've got my bare feet on the carpet right now and I'm chilling so let's not Pretend We're grinding we we don't grind we look people in the world with with actually hard jobs you know yeah all of all of my friends work harder than me but the front half of that part is smart which is that like again like part of the point of the list is to help people resist the shiny object syndrome thing it's like again if we were to summarize this list it's like Focus doggedly on product and on contribution margin and spend money on ads like that's really what you said here and that's what this whole podcast was and resist the temptation to go chase down all these other things that's the that's the whole game you know so yeah I think I've summed it up my whole Ecom strategy I think it's nine words spend as much money on ads as you can afford 10 words and like that takes into effect don't don't spend money on Opex don't spend money on shiny OBS try to increase aov and LTV so you can spend more money in ads I really think that's the punchline here and it's really easy to over complicate it in Ecom but simplifying it has produced great results for us so good I you know I think a lot about the journey to like from like 2 million to 20 million that's like the the kind of Revenue space that I tend to sit in a lot with clients and and certainly dealing with other brands bigger ones smaller ones as well but the part of the journey I tend to think the most about and I think that this tweet is about as good of a job as you could do summarizing sort of what it takes to actually make that and I know you know you guys have done really really well I don't exactly how big you all are but but you know you guys have done very well as far as that journey goes and can express with a lot of confidence and knowledge what it takes to get to to the top end of that Journey so yeah all right Nate yeah thanks so much for doing this this is the first podcast episode I've ever done like this just walking through a tweet but I think it was so good that means you should definitely go follow Nate on Twitter at Nate Legos and that link of course is in the show notes but it's Nate L AOS go do that right now reach out to him hit him up tell him how smart he is on on the internet so that he so that he knows that all of that absolute grinding hard work is paying off with Twitter followers uh yeah anything else to uh to tell people any any anything else to promote anything like that no that's pretty much it by watch at Regional grain.com if you're in the market for one on follow me I try to post relevant stuff in between my rants about Major League Baseball and conspiracy theories surrounding the alleged moon landings so in between that there's some good marketing nuggets in there but yeah other than that that's it does me all right thanks so much for listening as always and we will see you next [Music] time all right big thanks to Nate for joining me on this episode of the show and big thanks of course to more Staffing my sponsor as always virtual assistants can be helpful virtual professionals can change your business go work with more Staffing by going to more now.co right now hey I have a couple interviews coming up that I want to tell you about and they are the reason you should subscribe I have some solo episodes coming too but a few interviews I'm really pumped about one of them with Dan McCormick from create the creatine gummy brand and its earliest stages he's been building in public in a really public way in a really cool way so we're going to talk about what's going on with his business juu from hero Cosmetics talking about life after the exit talking about her exit all those things massive monster brand with a huge exit uh nine figureure exit for her and so going to talk with her as well about some of those things if you enjoyed my episode of Patrick kdo you will like this one as well and most importantly probably I've got another opening the books episode coming it is recorded I am now getting it into production to get it ready to go it takes some work to do these episodes so I'm working on that now but it is with a brand that you have seen and heard of and we dive deep on their meta ads account and talk about restructuring rebuilding the whole thing towards bidc cap so I'm going to tell you exactly how you'll see exactly how I would suggest you do that by watching that episode so if you liked my opening the books episode with nazarin Jafari from mixed by nazarin you will love this episode as well and if you're really looking to dive deep on meta ads it's going to be really good so great stuff there so make sure you subscribe that's the point make sure you subscribe and of course rate review that's really helpful and the most helpful thing you can do is share this episode with a friend who would get value out of it as well if it was useful to you please share it along to somebody else that is a big way to say thanks if you'd like to contact me I'm always happy to hear from you answer your questions those sorts of things reach out to me at podcast AJF growth.com you can of course follow me on Twitter at andrewj Ferris as well and we can connect there I think that's it I think that's all the things I'm supposed to say you know what to do you've listened to podcasts before and watched watched YouTube videos before so do all those things that are helpful for me and for growing my show that's really what I'm after while I help you as much as I possibly can thanks so much for joining me as always I'll see you next time and I it all I know the SCP with my eyes Clos and I say [Music] song