How to Take Small Steps to Grow Your eCommerce Profits

welcome to the ecommerce podcast with matt edmondson a show that brings you regular interviews tips and tools for building
your business online
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lightbulb agency we'd love to put you in touch with those guys okay welcome to the ecommerce podcast
with me matt edmondson it is great that you have joined us on this show this is a very special recording
with my now very good friend tony i'll explain why i'm laughing in a
minute before you're listening to the show but we are here to help you thrive we're here to help you grow your ecommerce
business and do all kinds of amazing stuff online now this is a very special show for two
reasons one it is the final show of season three i can't believe we've made through three seasons already
but it is also like uh i'm guessing our fourth or fifth attempt tony to record
this um as you as you know if you're a listener to the show regular to the show i broadcast live over facebook
um at the same time as we record these podcast interviews but for whatever reason when tony and i
get online together the computer that i've got the apple mac which i've spent ludicrous amounts of money on so i
could do this uh just keeps crashing and so i don't know why it is
we've not got to the bottom of it yet but tony has suffered but tony is with us now we're doing this
on zoom the old-fashioned way we've just ditched the live streaming thing we're just going to record it
and uh tony thanks for being here and and listen thanks for your patience i really appreciate it oh sure
it's my pleasure on the surface of it we may look like a professional company
but yeah geez never mind you should never what is it they say you should never work with children and animals and i'm now going to throw apple mac
computers live streaming into that mix that's just me um so tony listen um
i'm i feel like i know you like [Laughter] really well because we've had so many
conversations but um for those that don't know you that have that have not come across you just
give uh folks a bit of background sure yeah so i grew up in small business my
parents had a small italian bakery when i was um we lost everything we
lost the house the dog uh the car everything it was really nice time yeah
and that kind of set me up for kind of my future my purpose which is to help businesses avoid kind
of crisis and and come out stronger and so years later when i was in college
i i studied business went to university study business and left and started an e-commerce
company of all things and that business company to start right that's my first my first business was
the e-commerce business so back in the day this is the late s i was on the top of
google well that was cutting edge right if you're doing e-commerce in the late s i mean that's like some of the first
guys to market at this point right correct yeah we were one of the first online bakeries in the in the states and we you know we
had amazing technology we were able to take a cake put a photo on it ship it anywhere in the country
and we won a bunch of war do a great pr uh we we ended up mailing cakes to
jennifer lopez and jay-z and ibm and microsoft all these huge companies and so
like like i was sharing uh before i thought i was a rock star i thought man i am so smart you know i got this down
yeah yeah check me out guys yeah yeah exactly and that's why i learned i didn't know what i
know and then you know that business came crashing down and so that was you know it was a tough
time because it was kind of failure number two failure number one was me as a kid i really have influence over it failure
number two was really on me because i was driving all this and at the time i was newly married baby
on the way and i was like this this sucks you know how do i how do i get out of this how how do i learn what i missed you know
who knows how to actually do this and that's why i started working for some great companies
over the span of ten years like google yeah ford adp a bunch of really uh amazing
companies so in this uh in this kind of
there's so many stories like this right where we set something up it goes a bit nuts but we didn't get some maybe some of the
fundamentals right the business collapses in on itself but as a result of that we learn we grow
we develop and you know here we are and i know um you know one of the words that you use a
lot which i i think is such an important word for this moment in time is resilience right and
we've we you and i have talked about this uh but this idea of resilience and so was
resili your first e-commerce business the the pictures on the cake which is you know we see it all over the place now but it
was kind of it was really cool by then um was it resilience was that was that
missing how you would define resilience is that why it didn't work your e-commerce business
no i mean the really the thing that hurt it was the business stopped becoming valuable i mean to me resilience is bouncing back
and doing something that you know that that is workable yeah if a business
is fundamentally not workable uh in this case it wasn't because it wasn't profitable
then it's really not resilience it's you know lunacy to keep trying to make something work
that's not going to work really well insanity isn't it doing the same thing over and over again yeah so
resilience in my case was going out learning what i had to do and then starting another business i think entrepreneurs have resiliency in
their blood you know for the most part if you're a real entrepreneur you're gonna bounce back and do something else you're going to find
find what works and keep working until you do yeah that's very true actually i
i can attest to that that is a common trait amongst entrepreneurs it's not that they don't fail it's just
actually if it fails it's just a stepping stone to something else isn't it it's yes the trendy word is pivot isn't it we
kind of yeah we pivot at the moment and um and that's what you do that's what entrepreneurs do
you find the way and that's what resiliency is all about so what do you mean when you said for your your cake business saying you
stopped being valuable profitable profitable so so what happened was
we were very dependent on shipping because we could take the photo cake was it innovation at the time it's a lot
more ubiquitous now but the real innovation back then was the ability to mail a cake yeah so we had a
whole system that had dry ice and packaging and that became very cost prohibitive
very expensive and then we also uh when ups and fedex raised their prices
it just the business wasn't working and so we weren't viable anymore and just the cost
i think i mentioned this before but the cost for acquisition relative to the lifetime value just wasn't there we weren't
getting repeat buyers uh we weren't the cost for getting them in the first place was too much
and so the math just didn't work out didn't work out now so um
before you talked about uh this sort of um this idea of the results loop
and the flywheel that i really want to get into tonight um and just
just let just sort of give us the headline what where does that start with the the flywheel
yeah so the the idea behind the flywheel comes from jim collins seminole book called um
good to great yeah where he talks about great companies leverage a flywheel and that's all great in theory but what
i noticed is a lot of businesses they don't have a flywheel their flywheel is broken or non-existent
yeah and so what i said is okay how do you actually get results which i
call the results flywheel and really what i discovered is just really three components you need to know what you
need to do you need to know how to do it and then you actually have to do it take action when those three things are in
combination you can get the flywheel effect if they're missing then generally you get
stuck or or worse okay so what you need to do how you need to
do it and step number three was take action right so i've written that down
so have you got an example of how that would work yeah so this applies to anything so a
lot of times i just use the example of like weight loss you know so
i need no i need to lose weight that's the easy one then you need to know how to do it so
you have to you know eat eat less exercise more et cetera and then finally you have to actually do it
which is where most people get stuck right yeah people fail yeah i
yeah exactly exactly unfortunately for small businesses a lot of times they have the right intention and they do take action
what they're missing is the what the strategy and so if you look at it where you are today is
really of the the result of the decisions you made in the past now there can be exceptions there's like
life chances if you're in born in the middle of you know africa and you're underprivileged
that could be different but for most of us especially the people probably listening to this call you know we have a we we're in the upper
of the world at least yeah yeah at least yeah yeah at least and so for us where we end up is really the
result our decisions are really another way to think about is the priorities we we choose
and you can think about your priorities in terms of your time your effort and your money where you invest where you put your effort
makes all the difference and and that's why it's so important to know the what so what should i be focused on should i
be doing seo should i be doing facebook should i be doing something else that is really the critical thing
you don't have to take an account first because that's going to drive everything else and then also having goals attached to it so it's not
just like i just have to do facebook but i want to get x-men sales i want to get x-mini uh growth you know uh year-over-year et
cetera so many new uh buyers from this et cetera yeah and that's i i like that because
that that's critical again it's one of those things isn't it i i have so many people who will come to
me and say matt how do i do facebook ads right for my e-commerce business
and the first question i inevitably asked straight after them is what actually should you be doing
facebook ads let's not make the assumption that you should but actually tell me why you should be doing them and so this is your what
isn't it um so what what do you need to do do you need as a business with your audience
with your business model with the products that you are selling do you need to do facebook ads and have
you figured that out first rather than just assuming you need to do them because everybody else is doing them
is that correct is that right absolutely absolutely yeah it could get you know it gets more
granular as you get into deeper i'm very much simplifying it but the what can
can go across many many different facets which i'll talk about you know when we get into the loop
yeah no that's great but i think you know what for me the most powerful things are the
most simple things because i understand them um and you know steve jobs isn't it who
was who was coined as saying simplify simplify simplify his whole thing was to simplify
everything that's why there was only ever one button on the front of the iphone that's jeremy knows cut everything back and i i love
the simplicity of this what do you need to do how are you going to do that
and how are you going to take action what action are you actually going to take how are you going to measure that how are you going to be accountable to that
how are you going to ensure you're taking the right actions no brilliant brilliant stuff
so this leads into what you call the results loop correct yeah so
what is the results loop and why why honestly why should i care no it's a great question so the results
loop is really what i discovered drives the growth for the for the best companies in the world so i took
what i learned from working with over the years working with some of the great companies and tried to apply that to small
businesses and this really started when i had my marketing agency because i noticed a lot of companies
were struggling you know they want to do facebook or seo or whatever else you could think of and they weren't
getting the traction they wanted and i was thinking why is that and what i remember was working in the corporate
world we did not leave anything to chance you know we'd have teams of people sitting for weeks on end with tab
spreadsheets planning what we were going to do and how we're going going to get there and the contingencies what if we don't hit this what do we do
you know all that was worked out business owners you know they spend more time planning
you know their vacation than their business and so you know it's crazy you know
i laugh it's sad but it's true right it is sad but it's true so i know that's the reality so i said
to myself okay if that's the case how do i take what these best companies are doing and make it
simple to understand easy to execute so anyone could do it in like minutes and that was my whole mission
with creating the results loop so that's the result of it is i distilled everything they did into just six
factors that anyone can really understand wow and like i i mean i've said it before but that is a heck
of a mission to reduce all of that down so something you can do easily minutes and work on
right correct um so what are these six elements then yeah so the first one is the markets you
choose so the markets are are critical because that is how you segment your market uh or or
your your audiences so you know it can be um divided in many different ways it
could be geographically you know we're only going to serve this particular region or that region
it could be by people's needs it could be by people's behaviors but you want to come up with at least
one framework or one idea of how you slice and dice the market that way you can prioritize the sub
markets within those markets and that's going to give you the highest return investment when you kind of segment that out
so you're going to get the highest return investment when you hit these sub-markets correct so what you mean by sub-markets
is let's take um i don't know the market of uh
um oh you give me my mind's complaint yeah yeah i know it's been a long day
uh one of my e-commerce clients uh sells uh fly fishing okay and so
he he had uh different kinds of segments there you know there was people that would do fly fishing
offshore there'd be other people that would do it you know in in lakes you know different areas i'm
trying to remember myself what they were because a couple years ago but he would segment the market that way but you could also
segment it by you know male versus female for instance you know if it's primarily
he happened to have a primarily male audience but the targeting their wives for
instance could be a great win because it could be a great gift because they could sell a rod it's a thousand dollars that kind of thing
and so it's looking at okay where are we getting the greatest return like and so once you get some traction
one of the things you want to do is look at your list of buyers and say is there any patterns here that can help
determine you know what markets you're going to serve if you don't if you're a startup and you don't have that
look at your competitors see if you can model them or see if you can find you know any
how do you do that well look at their website a lot of times they'll have blog posts that target their market
and so you can be kind of strategic and say okay where is the lowest hanging fruit yeah yeah and also i think you can also
i mean check their social me for me social media is a giveaway who you're serving and who you're trying to reach
uh becomes really obvious on their their social feeds even what social media platforms they're on especially if they're smart right they
they've thought this through okay so the first one is markets um
figuring out what markets you're going to go into segmenting those markets um how do you choose the right market
then to hit yeah so what you want to look at is well this kind of ties into the next phase
which is your products and services which i call offerings and so you want to match those two together because
your your everything is the you know based on those two fundamental pillars
so your product your pricing all that is going to to matter because for instance if you
have a high-end market so another way to segment the market is by price point because if you're going higher-end right
you want to make sure your products and services are of higher quality and a higher price to justify that and that sometimes can
be a place to prioritize but how do you prioritize is based off of the profitability a lot
of times and also you can go back to what we talked about initially the profitability and also the cash flow
so if it's a product that might take forever to ship you know it's months delayed for whatever reason maybe you don't
prioritize that it's also looking at the average order value and and also is this a product that could
get them to become uh more recurring i always like lost leader products so if you can get
someone to come in a lot of times people call it a tripwire you know people come in on a low price point if we know that they can come on
that product and they'll buy it by buy again and again that's a different scenario too so you have to kind of look at it
but the end goal should be to maximize your lifetime value that's really where you look at it and
there's many ways to do it yeah you've talked about this before the lifetime value how do i
and i and you're going to hear it a lot right we used a lot in e-commerce lifetime value what sort of things do you use to
measure the lifetime value of a customer right how do you how do you know how to calculate that
number yeah so you want to look at on average how many times they're going to stay with you over a period of time
if you don't know three years is a good estimate okay then what you want to look at is um
how many times are they buying the frequency yeah so they buying more than once during the year and the goal should be
get them to buy more and then you want to look at the average price point of every product and ideally
the profitability because the profitability is so important and then you just multiply that that out now from a technical
perspective you can get a lot of this data right from you know if you have woocommerce or if you have uh you know any of the major shopping
you know shopify a lot of times they'll have that data and also google analytics will provide a lot of that data as well and so you can
build a dashboard and be able to see that and track it over time yeah yeah no fair enough um
so uh we've got our markets and then we talk about offerings so what
we're bringing to the market uh how have you seen that work
well in terms of um people sort of offerings that you think have come to
market and come well just as examples that we can think of for example uh so the question is a new product or
offering yeah yeah sorry i need to be much clearer um so we took you talk about markets
segmenting them down and bringing an offer into that market and in the markets you talked about the
fly fishing in the offerings what's an example that we could think of um that would that would help us connect
with that yeah well i mean let me go back to basics actually the way these are actually paired
together is by looking at it in a matrix and so there is a famous matrix you might learn
in in university it's called the ansop matrix and most people don't think about this but it's very powerful
matrix yeah inside matrix so that was one of the the ideas i had behind creating this these two pillars but if
you look at that you can say okay what new products can i offer the new markets or do i offer new markets to new new uh
or do i offer uh new products to existing markets okay how do i take my existing products and go new
markets so that exercise is really what can drive it so it's not just okay i have a sub market and i have
a new offering it's really looking at those combination because that forces your mind to think about how are you starting to
do some creative thinking aren't you correct yeah yeah yeah so when you drew that so to give an example how
how that would work i'll just use something really basic like uh like a coffee shop so we have
coffee shops in our area and so what they'll do is a lot of times they start off in coffee
and they say okay i have this market how can i expand it well let's offer them donuts right yeah or they might say hey now
we're gonna go into a new market we're gonna go into the lunch market or or you know and offer them new products so they kind of go hand in hand
and so you can find examples in numeral innumerable examples you know look at what amazon did they
originally had technology they were creating for themselves right and then they started offering more and more that technology for others
now all of a sudden they have this whole data division that's doing you know that's growing faster than anything else
yeah so it's really looking at how can i leverage as much of what i have as much as i can and the
easiest thing to do is leverage your existing buyers so if they're already with you today how can you get more out of those
same same kinds of buyers that's really really good so what new products could i bring to my
existing customers uh that's a really great question isn't it there
there's we use words like upsell and cross-sell and these are just the basic same questions isn't it
how can you how can you maximize the value that you deliver to your clients and therefore retain from your clients
correct that's brilliant that's brilliant okay so markets offering what's next
the next one is value and you can see on the um results loop or or we're just on podcast now so maybe
you can't see it but if you look if you look at the manifesto you can see it it's kind of the bridge between the one side and the other
so the value is what connects everything and the value answers the question why would someone buy from you
as opposed to anyone else or do nothing at all so that's really the critical function
because once you define your products and services you have to say okay why would someone actually buy it how do i make it unique
how do i make it more valuable and sometimes that can be a challenging e-commerce so if you're just selling the same things
that everyone else is doing why should they buy from you you know do you offer better uh you know
customer support you know like mac
do you um are you able to uh bundle things a lot of times you can add
extra value in e-commerce by bundling so if you just take you know a candle and you're against all the other candles
you know why would someone buy that but if you you kind of put it together with uh you know the candle holder and flower
you know you kind of bundle it together for a valentine's day gift all of a sudden it's worth a lot more
so it's really thinking creatively how do i and really what you're buying there what the customer is buying is time yeah
because you're saving them time because they don't have to hunt for everything every single thing you see this all the time with technology you know
you get the computer you get this you get that and people have to think about it and that helps you get a much higher margin
because they're not price you're not commodity at that point they're not cross uh comparing you with everybody else
yeah that's really interesting so by increasing the value you stop them hunting around you stop them
comparing and doing the comparison and one way to increase value is to do the bundles it's like they get
stuff from you that they don't get from anywhere else correct um that's really great i mean
how else do you increase value what are some of the other things um that you've seen i know for example
one of the things that we did at jersey which is one of my only commerce businesses uh it's a beauty site here in
the uk right and one of the things that we did i tell this story because i love it you know i it's it's one of my fav
stories um one of the things that we did to add value was we stopped shipping
um the products in a jiffy bag now what i mean by this is uh i don't know what you call them in
the states a jiffy bag is basically an envelope that has bubble wrap inside it it's like a padded envelope
okay and um and so people would spend on average say or quid on skincare
off the beauty side which is a lot of money right and so we would put the products in the jiffy bag and send them out now the
products were actually sent in a cardboard box so you would buy say a moisturizer and
the moisturizer would come in a cardboard box and i knew that straight away you would throw that cardboard box
out right but even though you would throw it out and it had no residual
value to this transaction at all if that arrived damaged in the post
you thought the product had been damaged even though you know it hadn't mean in some way
it's just an outer cardboard box it's a bit like going to the supermarket when you buy tins off the shelves you always
avoid the ones that have been bashed right yeah this is that kind of weird thing and so we started to put the
products in boxes um and so the goods would arrive in perfect condition whilst all
my competitors were shipping them in these jiffy bags and then you know we
had to keep innovating in this area eventually we a couple years ago what we did was we we
stopped putting products in those boxes with you know the plastic air pockets you know the big plastic
pillar type things uh to protect the products we put them uh we used packaging which was much more
biodegradable environmentally friendly and a little bit more fun we actually used popcorn
and still do use popcorn so we have popcorn machines going all the time in the warehouse for the packaging
which is amazing and so we get a lot of social we never got a social media share when we just use the plastic pillars but as soon as
we started using popcorn we got inundated with you know reviews
and social media shares wow and just adding value just thinking about you
know what can we do to make this a better experience for our customer um so that's the kind of thing you're
talking about here is that where i would put that on your resume yeah i mean it would be a
subset of it when i look at value there's so many ways to look at value at the end of the day value is an
exchange and so at the top of the value chain you really are exchanging in this case
like what we're doing here i'm exchanging my time for people's attention so that's kind of at the top of the
funnel the next stage is you usually exchange even more value for something even more valuable
uh even more you know so for instance people are going to download maybe my manifesto
exchange to get even more valuable content and then the last stage is you're exchanging uh usually money
for some kind of result so at the end of the day the value is the result i get and that could be looking better
feeling refreshed et cetera it doesn't have to be you know it could be intangible sometimes so
that's kind of how what value is it's a it's a exchange now the company
there's really two kinds of value however there's real value and there's perceived value so real
value is what it actually does so that is you know it does the job i
paid it to do you know it tastes good it works et cetera you know it records has to throw that
one but let's move on yeah there you go and then the other then the other
part of it is perceived value so this goes into the packaging this goes to your authority
you know why they're everything that's wrapped around it that's not actually it's more intangible so the
real is tangible the perceive is intangible and then under that really really you can ask yourself really the
the basic questions you learned in grade school the who the what the why the where the when so people will buy
for instance higher perceived value the why you know if you have a mission and you have a purpose behind it people will buy
that it could be you know going on the more tangible side you might be educating people with it
people also buy because your authority you know how many um athletes are are going into you know
nutrition and things like that and how many celebrities are now offering exercise programs
because they have a high perceived value so people buy that because of who they are not necessarily what the product is
so value yeah i saw that with um uh who's the guy that played thor chris
handler yeah yeah he's done a fitness app hasn't he i've seen that yeah um and he's killing it with that you
just thought years ago you never saw the movie stars doing this did you but you're right there dude the first time i
ever saw it and it may be an age thing was the george foreman grill oh yeah yeah i remember that yeah
jeremy remember the george woman girl and he i mean he killed it with that george foreman grill didn't he did
yeah and so yeah i see you see i see what you're saying now so they're bringing value with these extra things so the apps and
so yes you've seen me on tv and now you can feel like you're connected to me
much closer using this fitness app i'm going to train you you know chris hemsworth is my trainer
kind of thing so yeah exactly so there's so many ways to look at value you can really expand it and so people get to track the trap of
just thinking about the product itself a lot of times it's the intangibles around it that can you know increase it
and more impressively importantly increase your profits because those aren't really hitting your bottom line
yeah that's that's so so true so true i mean uh i don't know if this fits
right now but one of the things that i i've noticed with e-commerce is when it when we're coming up to black friday
right so at the time of recording uh we're we're in october and so
by the time you hear this it's going to be much closer to black friday right so as you're listening to this in your car
or wherever you're listening to it and there's going to be two real main offers you see isn't there on black
friday number one is i'm going to discount my product by some crazy number especially because
retail is just dive bombed this year yeah so i'm going to discount my product
the other way to add value is not to discount but is to add say a gift with purchase to increase
the perceived value of what you're getting which is what you're you're talking about earlier on absolutely with the bundles and stuff and they'll
be the two main ways that you see companies do it right yeah absolutely yeah those are tried and true and they
work all the time and they and they know that but the reason why they're discounting it is again they're looking at the lifetime
value so they're probably offering one product low especially if it's you know i'll use a non ecommerce
example but like the retail stores like we have a lot of walmarts out here they give you you know a tv for bucks
but they know you're going to buy other things that they're they're going to be very profitable and a lot of
times in the physical store they'll have those products right nearby it or this is where they're there the
accessories you know it's like oh i have the tv but i need the hdmi card hdmi cord that cord is going to be up
you know mark way up yeah and so amazon is notorious for doing this
right you buy the product and you see something else way you know way higher associated with
it yeah yeah yeah that that's very very true uh in the uk i don't know if you know this we
actually have walmart oh yeah okay well not not technically as you have it in the states walmart bought out
asda which is a big supermarket chain here and so um it's still called asda but on
the sign it's like a walmart company or something like that uh and i've been in walmarts in the
states and i've been into asda and um you can definitely see the similarities
but yeah i mean that said like you say it's really clever we call them lost leaders here where you
sell something um at a discount maybe even making a small loss on it knowing full well that
you're gonna get something on the front end and um and i've seen actually a lot of people
especially in the beauty industry do this where they'll bring you in knowing the first order they're making a
massive loss on that first order but their faith is in their ability to market and
remarket to you so you buy a second time so the second order they break even on the third order they make their profit
correct yeah it's very common i mean like like i mentioned before i can remember this was a prior
conversation or not but uh you look at columbia house and their early record stores they give you you
i remember buying cds for a penny yeah and then you they have you getting it every month on
a subscription and you know you're you're dropping a month and so that model was really where it started was back in
the s or whenever that was way back then maybe what happened before that but that's the earliest i can recall
and it works today yeah you're showing your age now tony talking about being a kid in the s not gonna lie
[Laughter] yeah but i i grew up in the s as well so you know i'm a
i'm a product of that that uh that decade so we've got markets we've got offerings
and we've got value is there anything else you wanted to add on value no i think that's the key thing
is really you know understanding the three levels of value of where you're exchanging then looking
at the perceived basis real and then how you do that which is really asking the questions the
the questions of what where when why how etcetera okay so what comes after value
so this is getting new buyers and that usually is is the most expensive right because the new buyer you require is always the
most expensive but this is where you have a funnel you get people through uh you know
whether it's online media whether it's pr however you're getting it that's really what drives the buyers
yeah okay so and this is for me this is the one where everybody
instantly goes to right right that's why i don't talk about it much i'm de-emphasizing that one yeah yeah
yeah everybody talks about and it's funny you know i i was having this conversation the other day uh speaking at a conference
and we were having this this debate about it you know when people come to you and they say listen i've
my business isn't growing how do i do marketing it's like this follow-on question right um if i had like you know ten
bucks every time someone came to me and said my website it's got traffic but it's not got any sales i i need to do marketing how do i
do i need to get more people to my website how do i do that cheaply i'm like you
if i go with your result stream you have actually missed steps one two and three correct you should not be on marketing
right now you should be on steps one two and three right and i like the fact when i look at your results we've not talked about
marketing until number four yeah and you know we've got around the corner
and and that i think is is that i mean it is obviously deliberate why
did you put it there maybe a better question well this goes back to my aging experience agent agency experience is
very similar what you had you know people come they couldn't get results you know it's like that's why you have to have the fundamentals down
like don't even you're not why i call marketing ready and when i say marketing ready most people think oh i don't have the capacity to fulfill
million orders that's not what i'm saying here like you're literally not ready to be marketing you should not be marketing
until you define those first three areas yeah yeah that's so so important so so
important but when you um i mean we've had a lot of people on the show talking about marketing but for you what are some of
the key um strategies here some of this the key things that you would focus on
if you were starting your cake business again your ecommerce business
well i would start on what i have here who is my markets how what am i going to deliver them from
a product and service perspective and then the value proposition i would go i mean that's why i created this loop
because that would be the the order i'd go in obviously i would take into account the
uh operations and the profitability all the you know the financial parts and actually if i did anything in
my business career i would have got a better handle on my numbers okay like i would be getting the bookkeeper in right away
you know having everything documented that would probably and i think creatives have that hard you know that
challenge more than most because they like i'm i'm a creator i like to create stuff i'm always building things
and it's like oh that financial stuff is boring but that's how you create keep score so if i was to do any of my
businesses over again i would have that in place at the very very get-go that's probably the biggest mistake i've made but a lot of businesses i work
with have that as well that's really interesting that's really fascinating okay um
so what what are some of the things that assuming you've done one two and three
and you've come around to number four then with your um e-commerce business what are some of the things that you would look at
in marketing some of the key touch points i'm just curious to know what's important you think in this area yeah so in terms
of getting new buyers that should really match and you kind of hit on this yourself it's got to match those areas
and so you know i had the question all the time too where people have traffic but it's not converting
well do you have your value proposing very clear can people self-identify themselves on the website on market so
if you ever been into a restaurant and everyone's you know years older than you do you feel out
of place you know or the younger you go in you're the oldest person there you feel a place
same thing on a website they call that message to market match people want to make sure
they they belong there because if they don't they're not going to convert and so making sure all these things go along
on your website but then taking that even further is that matching your blog post is it matching your lead magnets your
your downloadables do they match who actually your targeted buyer is because the more specific you
are generally the higher the conversion rate yeah that's really really interesting really interesting i called we i've
heard this called many different names usp um you know that kind of what's your
your proposition your unique proposition your unique selling point um and this language discovery i actually
use the word context where you know what is the key dilemma you are solving
for your client yeah and have you have you put that on the website in a way that they can self-identify with
right right no and that that for me is the key right so if you're doing a consulting business
i am a uh online e-commerce consultant that will x your business
um and you don't even i will ten actual business even if you are utterly confused by all the jargon
and lingo that people are using right yeah so someone's going to come across that and they're going to go that's me
i don't understand what people are saying but i want to grow my business i'm going to talk to this guy so they're
self-identifying because i've clearly articulated to them who i'm serving and how i'm going to do that
yeah is that the kind of thing that you're talking about here yeah absolutely people want to be understood they want to know that you understand
them and solve the problem because that's really what they why people buy it goes back to their motives i guess this is
this is a more advanced thing i teach in my value course but essentially motives like they're they're
either moving towards gain or away from pain and pain is more is a stronger thing to move uh you know in terms of
marketing it is but that's the first thing they have to see is like are they addressing the problem i have
yeah you know that's the key thing because that's what drives it and that's really what that exchange is about like if you look at
what i said before like here's where they are here's where they want to be that's what i call the value the results bridge the distance
you take them from here to there is is a is really driving how much value you're really providing and therefore
how much money you can actually make so it's all about the bigger the problem you solve for the for as many people as
possible the more value you'll you'll provide the more money you'll bring back in that's really
good yeah that's really good fantastic i feel like i could talk about this all night but we should probably get on to point
them yeah they can get very deep number three can get very deep i can see we're gonna have more
conversations about this tony uh so we've gone through number four the numbers we're now on number five which
is that is the size of the buyer or lifetime value and so this is looking at
i was thinking in size as in size yeah no no
no this is the size of buyers so once you have a buyer not all buyers are equal and this is where you want to know your
markets because you might find that some markets are worth much more those are the ones you want to go after and that comes down
as a function of their lifetime value which is how much they're spending and really over you know how many times
they're spending it that's really really cool so uh a classic example
of this and tell me if i'm hitting this or if i'm totally missing the point here so at jersey um the beauty company we
have we have numerous different skin care brands on there right and one of them is a french
skincare brand called gino and the typical buyer of guinot is very different to say the typical
buyer of a brand like dermalogica for example so these are two skincare brands i don't expect you to know them tony
it's fine [Laughter] but what i would say is the the average
spend of a gino buyer is much higher than the average spend of a dermalogica buyer
and the gino buyers tend to be older have more disposable income they tend to reside
more in the wealthy parts of the uk not all necessarily but you can see from the graphs where they sort of tend
to reside more but dermalogica is a much more popular product so the
the market size for dermalogica is bigger but the average order value of a gino customer is much higher and so
there's there's this really interesting dilemma we have do we um do we put resource into going
after the bigger dermalogica market where it's hyper competitive or do we put resource into going to this
smaller market where the size of it the average order value for me is much much higher where there's less
competition but there's there's less um it's a much smaller pond if that makes sense no absolutely that's
it and then in terms of taking action this is where those upsells and cross sells comes into play because that's what direct directly
increases the value or bundles there's so many ways to do it especially in e-commerce e-commerce is great because you can automate a lot of
what would happen in an offline world where you have a sales person not very reliable
you know if if it's done online you can leverage data it's just a much more powerful scenario
and so that's how you increase your your size or your buyer yeah uh fantastic fantastic okay and then
finally we are coming around to loyalty is that right yeah yes loyalty is probably the most i just
love this word this was the one that if i if i'm honest with you the one word that stuck out to me more than any on your
loot was this last one loyalty i'm like i can't wait to hear what he's got to say about this this is my favorite one because it's the
most underappreciated and it's usually where i start so if almost if if it's a startup i go
around the loop if it's an established company you go reverse because loyalty is always the
lowest hanging fruit because again going back to lifetime value and cost per acquisition there is no cost for
acquisition because you've already acquired the customers so loyalty to define it is really two things it's looking at how
do i get the buyers to buy more and then secondly how do i get them to drive referrals how do i get them to
advocate for me because that is is a huge thing that businesses miss all the time so um
i mean this is fascinating and i i i call this repeatability and refer ability right so
the yoyo effect is in my language in terms of getting these people our loyal customers to buy from us time
and time again but also getting them to refer out and be our evangelists our promotion
experts and all that sort of stuff what are some of the things then that you have seen well uh in helping uh
our customers referrers and promoters and sharers what are some of
the tips and tricks that you've picked up there yeah that's a great question i mean there's so many things you can do with loyalty but
the the foundational thing is is really to have a good product you know
[Laughter] that's the first thing that's the first because nobody will say that
most people give you some tactic oh use this special pop-up you know remind no start with your
product and so i actually have a pyramid i have a i have a uh i think it's uh the retention pyramid i
have uh ascension for loyalty so there's two frameworks i use i teach about that
but essentially you want to start the base how is your product how is your customer service and then
you kind of work up to the more tactical things and and the things that will drive but also be remarkable yeah
like that's what you did with the popcorn right yeah so that was something it was it was a what they call pattern
interrupt people see something and then you know if we're having this this you know podcast all of a sudden a
gorilla walks behind me that's going to get your attention right yeah you're going to say what so it's it's called pattern interrupt so
that's essentially what you do in e-commerce by doing the popcorn but there's so many other ways you can do it
it takes creativity if you use creativity that is you know kind of a very easy way because then
you're not enticing someone to refer you they're doing it on their own accord and so that's just so much more powerful and
more viral yeah yeah it is i like that be remarkable it kind of reminds me of um
is it seth godin that wrote the book purple cow yes have you ever read that book all
about i haven't i've heard about it i haven't actually read it yet yeah his whole theory was and this is why i call the book purple cow he said
if you saw a purple cow that's remarkable and he talks about remarkability as in
you are going to remark about it you are going to talk about it something that is remarkable yeah that was how he defined it is you
are going to talk that's for him was his definition was if it's remarkable people will talk about it
they will tell people about it if you saw a purple cow you would tell people about it
and it's a great book definitely you know if you're listening you go read it i thought it was and the principles still apply today
um but in terms of being remarkable i think that that is fantastic that um that's what we
did with the popcorn yeah absolutely that like you say that was that was being remarkable
and um i mean i don't know if you've got any other examples of companies that you think are remarkable
well i mean zappos from an ecommerce perspective very well known for their their customer
support they kind of set the bar for that uh gosh i'm trying to think of something lately i've bought
uh well even just you know um there's been examples where
i've gotten thank you notes and things like that that were totally unexpected and those can be dynamically generated
you know so it looks almost like it's real yeah you know things like that just going the little
extra mile like there's a saying was that the extra the last mile isn't crowded something along those lines but
you're at the very top of that you really don't have any competition so how do you just just do that a little
bit more to stand above the rails you're going to be you're going to be you know leap years ahead
no i like that the last mile is not crowded that's such a good phrase yeah and uh yeah what can you do i think
it's it's brilliant brilliant how can you think that through and everybody's got something right they
could do everything everybody's got something that just makes them stand out
and i i found here tony i don't know about you but i found here what you can't do is you can't stand
still so what makes me remarkable today what helps me uh get commented on today becomes
the normal tomorrow doesn't it yeah yeah so you have to keep pushing you have to keep being innovative which is great if
you're a creative type of person right you just that that whole thing just gives you a buzz and you're
thriving yes we are going to continue to push but once you've got the but first before you get pushing
what i'm hearing you say is get these foundations right and then you can do all the fancy bits
of you know absolutely yeah because yeah i could get the thank you note but if i'm ready to ring your my my um wife we're homeschooling our
kids right now because of covet and she's ordered these books she has not talked to
she's called been on the phone for an hour she must have called a dozen times by now can't reach anybody
we used to love the program now we can't stand it so they could they could send me a thank you note and that would probably go
in a furnace somewhere you know so it's like you send it back with a yeah with a
picture gun
that's so true that's so true i think the other thing to say here is be consistent
i remember um we uh one year we were we were getting so
crazy with the beauty company one of the guys from one of the ladies from the warehouse a beautiful lady called nicola came to me
and she said matt we're coming up to easter i said yeah i said um and we had this we had this phrase or
we have this phrase at jersey called smocks and we defined a smock as a sexy moment
of customer service right and so it was just it was a moment of customer service with a little bit of
sexiness added to it a bit of je ne sais quoi if you like and so
uh one of the things that we've always said to the guys listen if you've got an idea for a smock i would love to know what it is
right especially the guys in the warehouse because they see who was sending stuff out to on a
regular basis they touch it they do i mean they they get it more than anybody and um
almost more sometimes than the data you get from google analytics they they they've got like a sixth sense
these guys and um and nichola came to me said listen what i want to do is it's coming
up to easter so why don't we um just put a little um
do you have them in the states cadbury's creme eggs oh yeah i love
cooper right little speed rocket go-kart on wheels amazing things and i literally crammed
every square inch of that car with um these cadburys creme eggs my
kids loved it because they kept finding them for weeks on the way to school chocolate all over their face and we put
them in the boxes and we sent them out and um and you know what we did that and
we did that but when we stopped doing that maybe three or four years later
people were like they would call us where's my crew meg oh yeah sure i mean it was crazy because
you you've got to have that consistency yeah and um i thought it was really fascinating
so what they started to do the girls in the warehouse they would just they would start to notice different
people were ordering different and they would start to recognize names so they put a handwritten note in the parcel saying hey it's nichola in the
warehouse i see you keep ordering from us really appreciate it it's a family business um thanks so much and she would put some
chocolate inside the box uh one time she put chocolate inside the box without the note and so we got this
email from the from the lady and the customer said this doesn't relate to anything i think it's a funny story
uh we got an email from the lady saying uh i'm not being funny but i think someone left their lunch
in my in my order because she got this sort of chocolate
without any explanation as to what it was like so these things came back for a
little bit i'm not saying they they're perfect so listen we've um we've gone through markets we've got
offerings we've got value we've got our numbers our marketing we've got the size and we've got
number six loyalty and the way you've drawn this i appreciate if you're listening uh you are not seeing what i'm seeing on
my screen which is uh it's the infinity loop isn't it yes the way you've drawn it and you've
broken the infinity loop up into these sort of six areas and so i'm guessing from the way you
draw it and the fact you call it a results loop as clever as i am this is not a linear process you get to
the stop in the end it looks like you've gone right back to the beginning and you you're constantly
going around is that right yes yes it's recursive you're always going back around it and so
this you're never stopping by design because that's what you have to do and so i recommend reviewing this
at least quarterly you know for myself i review it more um more than that i
also uh it's a great thing to learn uh and review when you're stuck you know so if you're stuck
so for instance i pivoted some areas of my agency and i referenced the loop for myself
even though i created i use it myself you can see i have it as a whiteboard even yeah so i whiteboard my ideas on here and leverage that
i also use the worksheets and and that's really what helps me brainstorm so because it's a tool not
just a plan it's a really a way to brainstorm and kind of discover opportunities you may not have thought about just by going
through the exercise yeah okay so why did you if i can bring this right back to the
beginning why did you call this small steps um to grow profits yeah well
that started actually with my mother uh so my mother unfortunately uh grew up in a time very
much like what we have today and so uh with the pandemic she had she contracted polio so in the late
s there was a polio epidemic and uh she was i mean able to walk from
the age of nine months old all the way up to even before this i
asked how did you do that like how did you mentally have the capacity to like
survive that and like what enabled you to accomplish your vision her vision at that age was
just simply be able to walk in high heels something you know maybe a lot of people take for granted for her that was like
her vision and so when she was in the hospital they started off you know doing pottery so she could
build up her nervous system get a little strength then she progressed to the um pool learn
to uh to swim a little bit gain more strength and then finally walking between two poles she
went step by step or took small steps and that was really kind of the impetus between behind the results of like
knowing what to take because for business owners it's what do i have to do how do i do it and how do i take action
that was something she learned even in that hospital as a child so this is not just a business lesson
this is a life lesson that's a wonderful story that is awesome thank you that must mean a lot to you right that you've managed
to sort of connect all these things together that's so powerful oh yeah yeah thank you that's awesome that's awesome so going
around this loop this is this is you're taking your small steps isn't it and you're doing this uh every quarter or however long it is
and you're taking these small steps and this will work whether you're doing a startup business whether you're starting out an
e-commerce or whether you're a big corporate organization the principles are still
the same right yes yeah i try to take it principles yeah yeah yeah i love it i love it because you've simplified it and
i get it i understand it now um i have in front of me
uh a pdf with a lot more of this information in with that you talk about um which i
i somehow downloaded off your website so can people get access to more of this information
if they need to yes absolutely so it's completely free and i mean free as in no lead form or
anything like i didn't have to fill out my email i was really shocked i was like oh my goodness he's not asking me for my name and email
i'm definitely downloading this yeah yeah i really just want people to have the information and so you just go small steps
manifesto.com and it's available and there's the uh the diagram the loop some of the stories
we talked about and a whole lot more yeah no do go ahead to uh the sites
tony's site small stepsmanifesto.com and you can download
that pdf and as always we will put a link to uh tony's site and to you know how to
connect with tony uh on the website so you can always download that in the show notes but this
is a -page pdf i'm scrolling down it now uh as i'm talking it is a beautifully
did i mentioned this to you before it's beautifully designed and easy to read easy to scan and jam
packed full of all kinds of amazing information i see all kinds of cool company logos at
the bottom as well and there's a very very flattering photo of you in there tony yeah good photoshop skills
that looks great that looks great listen how do people uh get hold of you if they want to get a
hold of you yeah probably the best way go to my website meet tony g.com you scroll down the
bottom just connect me on linkedin and just tell me uh you saw the show that'd be great so
meet tony g.com is your website and you can go there and connect with
tony through that on linkedin and uh also through smallstepsmanifesto.com go check that out
uh tony listen finally i think we've made it through we've made it to the end
um i really appreciate you sticking with it and i i honestly i've i've learned a lot i've
got a lot of notes and we've really really enjoyed you being with us uh before you go sorry there's one
question i did have for you yeah um and that is about your book uh yes
you've got a book either it's out or it's coming out very it's coming out it's coming out very soon you can
pre-order it today so if you go to that website the manifesto small steps manifesto you can uh there's a link within the pdf to
pre-order it so that's available now for pre-order awesome and the the book is about what
you've talked about is that right yes so the manifesto took some of the juiciest parts out from the book and and it's all there for
the taking but if you want to go deeper then it's all in the in the book oh well okay so
uh and you can pre-order that at smallstepsmanifesto.com and yeah i will be on the list i'm gonna
go and pre will you deliver to the uk yeah of course especially for you yeah
we'll figure it out um that's great tony listen again really appreciate your time thanks
so much for being with us it has been absolutely fantastic thank you so much this was a lot of fun thank you so there you go that was a
show with tony that was the final episode of season number three i hope you got a lot out of
it wasn't tony fantastic giving us so much value really grateful to him for doing that do
check out his stuff do you connect with him online because it will be worth it trust me
download that pdf it is jam packed worth the stuff so we will be back again very soon with
season four that's right we're gonna be on season four so this is the final season final episode of season three
we'll be back in just a few short weeks with season four with some more great guests uh on how to drive and grow your own
e-commerce business so do stay connected with us thanks for being with us make sure you subscribe wherever you get
your podcast and i promise when we're back we will have the live streaming thing fixed thanks for
thanks for watching thanks tune in bye for now
you've been listening to the e-commerce podcast with matt edmondson join us next time for more interviews
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