Marketing. What’s it all mean anyways? Before you spend thousands on a highly qualified marketing director to grow your business in the right direction, read our tips for navigating a solid strategy and marketing plan on your own.
The original eCommerce growth hacker, Drew Sanocki, is here to talk about the top ways to scale your eCommerce marketing plan. Here are tips for growing your business without going broke.
Andrew: Hey, guys. It’s Andrew here and welcome to the eCommerceFuel Podcast. Thank you so much for joining me today on the show. And on the docket today, how do you scale up your marketing? I would say, I would argue that, that scaling your marketing is probably one of the hardest, if not the hardest part of your business to be able to scale up. Customer service isn’t too tricky, bringing in more products. Maybe not quite as hard but marketing, to be able to do that well and without bankrupting yourself is really difficult. And joining me to talk about how to do it is the man who scaled the marketing, the whole of marketing for designpublic.com, I think all by himself drewsanocki.com, Drew Sanocki himself. Mr. Drew, how are you?
Drew: The original e-commerce growth hacker. So what are we talking about today, growth hacking?
Andrew: Growth hacking, that’s like the buzz word these days for it, isn’t it?
Drew: Scalable marketing.
Andrew: Scalable marketing, content marketing, growth hacker. I feel like growth hacking, it almost peaked but that was like 18 months ago and I don’t know if took off quite as much as the other ones but definitely one of the buzz words. Hopefully, we’ll be able to avoid too much of buzz words and give people some actual stuff. What do you think, Drew? High level, do you agree is this one of the hardest parts to scale in an e-commerce business?
Drew: Yes, I think so. It’s hard to measure, hard to scale. There’s that long period of experimentation where you’re trying to figure out what’s working profitably like where you can get profitable growth and it changes. So something that gets you to a million might not get you to 10 million.
Andrew: And it seems like the early momentum for marketing almost always is driven by one very passionate, often skilled, founder in marketing or PR or something. And at some point you either reach market saturation or it’s more often the limits of the founder to be able to do that. What comes next? Do you hire a marketing director for 80K per year when you’re doing 500K in revenue? Maybe, but that probably is not going to mean best investments. How do you scale that up? So we’ll get into all this stuff today. Let’s go ahead and dive into the nitty gritty on how to make this work.
Andrew:So Drew, the way I thought this might make the most sense to tackle is to talk about the different methods of marketing and take those one by one how you could scale them. And let’s start with SEO. I would argue SEO is probably the hardest type of marketing to scale in terms of outsourcing it. It’s nearly impossible to hire really good firms at reasonable rates. They’re just the guys that really know how to do this are insanely expensive because it’s really, really hard; it’s difficult. You’ve got to understand content marketing, you’ve got to understand SEO as well, and you have to have the ambition to actually care about niches like CB radios which is a unique scale. And there are big consequences if done incorrectly. So Drew, what do you think? Have you ever seen this done really well especially from merchants our size?
Drew: Outsourced or just in general?
Andrew: Well, I guess we can tackle both but maybe start with outsourced.
Drew: No, and I agree with you. I think for a smaller company, the founder or the founding team, if you’re going to wear one of these hats it’s probably going to be SEO. If you’re going to learn one of these skills really well, it’s going to be SEO and content. I put those two together but it has the most to do with your particular niche. Actually like a reputation and a relationship with all the bloggers in your niche and all the other authority sites in your niche which usually is something that you alone can do. You can’t outsource that.
Andrew: Yeah, and the other thing too is it’s… the repercussions of doing it poorly are fairly large. If you hire someone to do marketing or PPC, they don’t do a great job. You’re out the money. Maybe you’ve annoyed some customers on your email list. You hire someone to do SEO and they botch it, you can do some pretty permanent damage in terms of getting yourself axed out of Google and much, much riskier.
Drew: This was the first… this is how we scaled our company initially. It was a lot of SEO. We were fortunate enough to be one of the only online furniture retailers, modern design retailers in 2003 and we figured that out pretty quickly. I mean now everybody kind of looks for that, but we figured out people were searching for the brands we carried, and there wasn’t a lot of Google results for the names of the brands we carried. So I personally spent a lot of time on SEOmoz, and learning SEO and learning how to structure my site and code the site the right way so that the brands would rank highly and develop content on the blog for that. And we ranked number one and number two for all the brands we carried. And I think that would be really hard to do today but back in the day it was because I kind of rolled up my sleeves and learned it myself.
Andrew: Drew, it’s funny. I’m in a real similar boat. I think Regional Radios has built almost, not entirely but on a very large portion. Definitely the majority based on my SEO efforts. Same thing just like… for me it was StomperNet and that’s where I got my . . .
Drew: StomperNet, yeah, the discs, right? The CDs. It was on DVDs or something. I owned them, too.
Andrew: I used to own them. I threw them out a couple of years ago because I was . . .
Drew: I finally did, too.
Drew: It was so valid, just . . .
Andrew: But that stuff was gold for me. It helped me build a business and so much of what the traffic we get today is even still built on that.
Drew: Yeah. It’s funny. Spider Food was another one I hung out on the forums there and mentioned and it was… you learn by doing and tweaking. I think it was at a time where there weren’t a ton of competitors for us at least or maybe even on the internet. So that was good but today, the top SEOs I know, they do it. They charge like $10,000 a month or something to work on your SEO. What start-up can afford that?
Andrew: It’s really spendy and so this is probably a great thing. Do not outsource it unless you have someone you 100% trust in the ROIs there and they have a track record. A great candidate for doing it yourself or bringing someone in-house that’s a good, fantastic writer, really good at building relationships online, really good at connecting, someone that’s good at PR. Largely in my opinion that’s what SEO has become these days. It’s about content generation, relationship building PR, and not spammy PR like let’s shoot out a press release but like building real relationships in your niche. If you’re going to do it, do it yourself or do it in-house and train somebody up, and we’ll link up to a forum discussion, a private forum discussion about someone asking for SEO agency recommendations and the thoughts and the experiences from a lot of six and seven figure store owners on how to build SEO.
Andrew: So number two, let’s talk about paid traffic. Drew, you’re going to be expert on this. Obviously you’re running an agency that does a lot of PPC or being in the past having that experience. From my perspective, much less long-term risk like we talked about; you’re going to lose money but you’re not going to do permanent damage to your search rankings if you outsource it to an agency, which makes it easier to scale. It’s super easy to calculate the ROI or lack thereof of it. You can do it in-house but it’s probably a good candidate to have somebody help you out with, that has expertise like yourself. It seems like a good choice.
Drew: Yeah, I agree. I think the calculation you’re trying to make behind all these options is where am I going to find a channel where the lifetime value of the customers I acquire exceeds the acquisition cost, the cost that I spent to acquire those customers. So in the back of your mind you’re trying to measure that, when you try SEO or when you try paid, or when you try conversion rate or whatever, all these different growth channels. PPC makes that calculation probably the easiest for a new company because you know the cost, you know what you’re spending on the ads and on the agency to run the ads if you use an agency, and then you can see the revenue at least off the initial purchase. And if it’s showing up profit, then put more money into it next month. If it isn’t, maybe switch agencies or maybe that’s not going to be or maybe you’re in too competitive a category and paid won’t work for you.
It’s a great option to at least explore early on and like I said, if it works, just keep putting money into it. I know companies that have gotten up to $60, $70, $80 million just off this channel.
Andrew: And that’s one of the things. We did an episode about regrets in the past, on the podcast. One of my big regrets is that the business model I had didn’t have large enough margins to really make PPC make a whole lot of sense. Maybe I get to squeak out some profit but with lower margins on the drop shipping side, that’s been a big ceiling on our growth. A lot of the growth that we have to do is SEO based, it’s marketing based, stuff that takes more time and maybe has a better ROI in the long-term, but it requires a ton more work personally. I don’t know about you, Drew, with Design Public. I haven’t been able to scale up our CRA channel with paid traffic. Looking forward to future opportunities, that’s going to be one of my number one criteria to be able to do.
Drew: That’s a great point. I think when I ran Design Public it was a period of time where maybe they, the ad word costs hadn’t gone up to the point where it was not cost effective.
Andrew: That was like 1992, 1992. Is that right?
Drew: Eighties. I was seven.
Andrew: A smart seven-year-old.
Drew: Maybe not for drop shippers, you’re right. Drop shippers have that added challenge. Lower margin in general.
Andrew: That’s tough. So number three, and this one kind of dovetails in with SEO is content marketing and blogging. You could definitely have a lot of overlap there. My experiences with this have been at least on the outsourcing side, in-house it’s been better. But trying to outsource content marketing and blogging, it’s been tough. I remember right when I got started trying to hire some guy on oDesk to write a bunch of technical troubleshooting articles for CB radios. I had to go in… I spent more time editing his work and changing things and correcting mistakes than I would’ve had just writing the piece.
And so granted, you can probably find outsourcers that can do a decent job for you, but in my opinion, it makes way more sense to be able to do this in-house because there’s a lot of expertise you need to build up and having someone in-house so you can have that asset, that person who knows it well that can pay off over time, it makes sense. You can do it but it takes a lot of time training somebody in-house and keeping them around.
Drew: I think I had a little bit more success than you did. This was at Design Public probably because of the power of the niche or the appeal of the niche, that there are a lot of people who know design. There are a lot of design bloggers and there are a lot of people who like to write about design. Whereas I don’t know that you could say the same thing about Trolling Motors, right? So my challenge was different from yours. You had to find somebody who could get up to speed on the niche and write intelligently about it whereas I’m just like, okay, who wants to blog on my design site and I’ll pay you and it’s like a thousand hands go up. And so my challenge was more filtering out who was good and can be depended on versus who was bad.
At the end of the day we ended up going with, in the early days, some of duty comedy writers who made our product descriptions really interesting to read. And that was a nice win and then we ultimately went with a friend of mine who is an interior designer and landscape architect and she was prolific and could write really well. It worked out pretty well for us.
Andrew: Number three, conversion rate optimization and analytics work. And this seems like one that just makes a ton of sense to hire out especially with smaller e-commerce stores in that seven-figure, six-seven figure range. You’re not going to want to hire someone in-house that does conversion rate optimization or analytics. And maybe yourself or your other team members may know them but it makes a ton of sense because you can bring someone in that has a ton of expertise there. You can pay them usually a one-time fee to dive in, do some work there, point out some big things you’re missing. You can do a CRO analysis. And the potential benefits are enormous for increased conversion and getting that done. So this seems like it is a no brainer in terms of ease of scaling up your growth in terms of consideration.
Drew: And the nice thing about these, I think, as you mentioned is there are plenty of people out there who work… it’s not something that you have to do every day. Unless you’re getting just tons and tons of traffic, even the best conversion rate optimization you’re not going to find out results from tests or anything for months. It tends to be one of those things that you can hire someone to go in there and work with you on maybe like a quarterly basis and really achieve some good results.
Andrew: And then not only did we allude to this earlier too Drew, working while email marketing. Something else I know that you’ve got experience with on the agency side. That seems like one of, if not the number one right next to PPC, definitely close. It’s a no brainer. I mean the ROI on email is phenomenal. Having somebody that has expertise they can just come in and start making that asset. You could list, start making you money makes a lot of sense. You probably have some case studies where this has just really moved the needle for people but it seems like if you’re not doing this and you’ve got a list, and with a caveat if you’ve got a group of customers and a product that lends itself toward repeat purchases. We’re kind of in the middle of… we’ve been doing some email marketing this year and seen mixed results. You always hear email as just… like what I said, it’s got the best ROI of any channel, right?
Well, I think for the right circumstances it does but we’re starting to wonder well, hey do we have the right niche for people buying over and over and over again. If you’re selling tombstones, email marketing probably isn’t going to be the best.
Drew: You’ve got to find a related product, I guess.
Andrew: I guess so. But Drew, thoughts on this? I mean is this what you say as a homerun as well as close as . . .
Drew: I’ve yet to see it not be at least a triple. Because especially when you get into the life cycle stuff or just some basic segmentation and targeting to your list, we’ve seen retailers who maybe on average they’re making a dollar per subscriber per month. And after they start to segment out their list and send out offers to different right people, right offer right person, right time. That number goes up to $5 or $10. So that’s like a 10x increase and the amount of money you’re making off your email list. Well, the challenge is I think, how do you turn that into a long-term growth channel? Because if it’s not customer acquisition per se, it’s more on the retention side. If you’re really looking to grow, you’ve got to figure out your scalable acquisition channel but when you do, back it up with email.
Andrew: Drew, the fifth one is more of a philosophical question, not a channel per se. The question is should you expect your employees to be able to drive growth? Should you be able to expect people to come in and just be able to in a high level say, “Hey, go grill our B2B channel.” Or “Hey, go do some SEO takeoff.” And it would be interesting to say because on one side, I tend to lean toward saying that if you have very well-defined processes that break those things down, B2B or SEO or those kinds of things, yes you can bring people in, train them, get them up to speed on those and have them work that process.
Especially in a smaller company, six or seven figure company where you don’t have the resources to hire an SEO director, PPC director, and email guy. You have to, by nature of the size of your business, hire people that can wear multiple hats. So to expect them to be able to come in and be able to execute on multiple levels, multiple areas, PPC, SEO really well, that’s tough. What are your thoughts? Have you been able to do that pretty well with employees coming in especially the ones that are wearing a lot of different hats?
Drew: Not at the smaller side, on the smaller level of company, no. Because it’s just… it’s hard to find real, real rock stars who will work for a small e-commerce site for whatever $30,000 a year or something like that. I think most of that innovation comes from the founding team when you’re at that level. What you can hope for is that you put a good process in place and that the employees can follow and improve on that process. Maybe you’re lucky enough to have in that process, one of the employees will unearth some growth channel that you hadn’t considered but I would say in more cases than not, I wouldn’t expect that growth out of my employees.
Andrew: It’s not a lot of people that are willing to work in a small team, work for an affordable price and have a Jack of all trades and they can get all this done. Maybe I’m repeating what you said, Drew, but I think growth especially early stage until you get to the level where you can hire a really experienced marketing guy with chops that has a proven track record of doing this on their own. As a founder, I think to scale growth ultimately you should be writing very specialized SOPs and processes for marketing task that are amazingly sophisticated things that you can break down in a step by step process. You as the founder need to be doing a lot of high-value outreach and work building those relationships with people in your niche, identifying those key processes. And then finally for the rest of it, outsource it to specialized trusted agencies for your paid traffic or your paid PPC, your email, and your CRO.
Drew: I agree.
Andrew: Drew, thanks, man. Time to head off, apply all of this stuff that we just came up with doing our own businesses and come back next week and tell people how growth is just scaling through the roof. What do you think?
Drew: Sounds good. I’m looking forward to it.
Andrew: Hey, you’ve been fun as always. Thanks so much.
Drew: Grow on.
Andrew: That’s going to do it for this week. If you enjoyed the episode, make sure to check out the eCommerceFuel private forum, a vetted community exclusively for six and seven figure store owners. With over 600 experienced members and thousands of monthly comments, it’s the best place online to connect with and learn from other successful store owners to help you grow your business. To learn more and apply, visit ecommercefuel.com/forum. Thanks so much for listening.
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