The Year-End Review Most eCommerce Founders Skip (And Why It's Costing Them)

## [00:00:00] Welcome to the eCommerce Podcast

[00:00:00] **Matt Edmundson:** Hello and welcome to the eCommerce Podcast. My name is Matt Edmundson and it is great to be with you. And let me start by saying Happy New Year. Oh yes, it is that time of the year when we start again, isn't it?

## [00:00:18] The Importance of Year-End Reviews

[00:00:18] **Matt Edmundson:** New Year's Resolution and Auld Lang Syne But before we start buying gym memberships, there's one essential thing we need to do for our e-commerce businesses.

And that I think is a year end review. Now, that might sound a little bit boring, and you're like, Matt, gimme something more interesting, more exciting. But let me tell you, I'm gonna argue that I think it's essential. I'm gonna show you how it saved Lego and they're gonna go through the process to do it right?

Because here's the thing, right? Here's what we've discovered, that

companies that actually capture and apply lessons have a 27% higher success rate. 27%!

Now, if someone comes along to you and offers to increase your chances of success by 27%, I think. You a jumper, the chance, right? So that's what we're gonna do, right?

We're gonna look at just that.

## [00:01:16] Lego's Turnaround Story

[00:01:16] **Matt Edmundson:** So let me start by telling you about Lego. In 2003, Lego was on the brink of bankruptcy. Their sales had fallen by a massive 30%, and they had accumulated an eye watering staggering $800 million in debt. That's insane. And this was Lego, right? The company that created many of my childhood memories, a company that hadn't made a loss between 1932 and 1998, and suddenly everything was falling apart for them.

Now, Jim Collins, who wrote the book, good to Great, and if you've not read it, definitely read it. He talks about this idea of.

## [00:02:04] Confronting Brutal Facts

[00:02:04] **Matt Edmundson:** Confronting the brutal facts. That's what he calls it.

Confront the brutal facts and how this is essential for a company's long-term success.

He tells us that success requires the discipline to honestly acknowledge and address the harshest realities of your current situation.

And we do that without denial. We do it without filtering, and we do it without excuses. And in this idea, Collins also introduces something called the Stockdale Paradox, and this is the idea that

realism about your current situation has got to be paired with an unwavering faith

that you will ultimately prevail in the end, regardless of the difficulties that you face.

So confront the brutal facts, but maintain faith in the future. It's a really interesting tension, and that's exactly what Lego needed to do. So they did. And when leadership conducted a thorough review, they discovered that the company hadn't generated any economic profit for more than 10 years. How do you, 10 years.

Right? And nobody knew. How did they not know that's. The big question, but they didn't. They did not know which products actually made money. They didn't know their customers anymore, and as one executive put it, he said that the culture was so closed off that massive opportunities were completely invisible.

It's incredible, right? How long they went without realizing what was happening. And it was this review process mixed with brutal, honestly, honestly, mixed with brutal honesty. Uh, that would reveal what would in essence remain hidden. Maybe cause the company default or whatever. Now, I don't know if that sounds familiar, right?

Not, maybe not the bankruptcy part, obviously, uh, but maybe that feeling of running so fast that you never stop to look at what's actually happening in your business. And you have that sense that you might be missing something important, but you're not quite sure what.

And the truth is that you don't know what you don't know until you look.

I mean, that's blinding logic, isn't it? It's true though, isn't it? Uh, blinding revelation of the new year. You don't know what you don't know until you have a look. You have got to confront the brutal facts, whether they're good or whether they're bad. But you've gotta do so with this spirit of faith and humility.

I think that the future can. And we'll be different. So how do we do just that? Hopefully that's convinced you. This is a good idea.

## [00:04:49] Common Year-End Review Pitfalls

[00:04:49] **Matt Edmundson:** Now, most Ecommerces I work with do one or two things at the end of the year if they actually do a review at all. Right? Option one is they, they, they're actually don't do the review.

They're just too busy. They're too tired. January arrives and they're already firefighting. The next thing, and if you guys are anything like me, you have definitely been there, right? Option B. Is perhaps the preferred option. There's a glance, um, at revenue and we celebrate it. If we went up, we panic if it goes down and we call it done.

But neither approach really tells us anything useful. It's not so much confronting the brutal facts as giving them perhaps a cursory glance. And for the record, ladies and gentlemen, uh, being totally transparent with you, I have done. Both. Now. There were years when I actually convinced myself that reviewing was a luxury that I couldn't afford.

I didn't have time, which was ironic obviously, because the review would've shown me exactly where I was wasting time and money. But let's not go there. Uh, but there, I think the other thing that I've noticed is, for me, right there is a much more subtle trap that can catch me out almost every time recently.

And that's when the facts aren't actually brutal. Um, it's when the facts are actually really good, right? Like you, you know, you've ended the year up on just about every single metric and you fall into something that I call the genius trap. Now the genius trap, in essence, looks at the numbers to prove how much of a genius you were that year, right?

I'm such a genius because I had a good year. Um. And it's dangerous and it's 'cause it's easy to find. Let me tell you, it's easy to find data that proves what a genius you actually are. Um, you can cherry pick the wins. You explain away the losses.

You build a narrative that makes you feel good,

but genuinely it doesn't really teach you anything.

And I've done that. I've been caught out many times by the genius trap. And so I think there's, you need. You need that humility when approaching this as well. You need the confidence to confront the brutal facts, but you also need to approach them with humility and the 'cause. The goal, right? The goal of the review isn't to prove you are a genius.

It isn't to prove that you are right. The goal is always to understand what worked, what didn't work, and as a result of that, where do we focus next? What's gonna have the biggest bang for our buck? And here's how I think about it, right? This may or may not help you. I don't know if you have a board, but I've got a board at my company, um, and I have to present findings to the board of directors.

If you don't have one, pretend that you do. And if you, if you use ai, create an AI board of directors. Um, I've talked about that before in the show. Really clever idea right now. Think about presenting to a board. What would you proudly share? What do, can you not wait to tell them? Right? But more importantly, what would you rather not mention?

Because it's in that second list, the stuff that you'd rather not talk about. I think that's where the real insights live for us.

## [00:08:09] Introducing the Slingshot Framework

[00:08:09] **Matt Edmundson:** So let me walk you through the framework that we use. Uh, if you are a friend of the show, if you've been here a while, you will have heard me talk a little bit about the Slingshot framework.

We're gonna be doing a whole lot more on this, um, in the coming year. Let me tell you. Uh, it's a framework that we use, uh. Because let me tell you, years after selling building for many years, e-commerce businesses, I've found this framework works super well. And actually it works really well with reviews 'cause it gives it the structure that we need and without it.

Um, I think you can get lost in the weeds because there's so much to think about when it comes to e-commerce. Um, and so we either get lost in the weeds or we stay so high level that actually it's, it's not very helpful. And so we use this framework, the Slingshot Framework, and it breaks businesses down into seven in Connect in.

Connected. That's not the right word. Interconnected, that's the right word. It's the new year. You're gonna have to forgive me guys. Now the Slingshot framework breaks then business down into these seven interconnected areas. And for each one, we're gonna ask questions about what worked, what didn't work, and obviously what we can learn.

So I'm gonna run through these seven areas quickly. Um.

## [00:09:24] Breaking Down the Slingshot Framework

[00:09:24] **Matt Edmundson:** Just so you get a brief overview of the, of the framework, uh,

number one, we call it sell,

right? Area number one. So what are your products? Fundamentally for any e-commerce business? You've gotta have a product that people want to buy, right? Are you curating high demand products that actually generate profit, not revenue, but profit, and which products are your real winners?

And which are quietly draining your resources. And this is where I think many of us get surprised because sometimes the product we're most proud of isn't actually the one that's making us the money. So we've got to audit our products, we've got to do a review of our products. Okay, so the first area of the framework is product.

The second area is story.

So I've got a product I wanna sell. Now I've got to connect my brand and my story with the customer's brand and story, right? So this is all about your brand and customer understanding. Like, do you truly understand who you are serving? Is your messaging really landing? You know, um, and for me in this framework.

I like to operate in this overlap, uh, between our story and the customer's story where I can find that commonality. Uh, between my brand, my story, what I want to do, and the customer story, what they want, what they want to do, that's where magic happens, let me tell you. And it's in that overlap that it works.

And if you're not in that overlap, I think. Your messaging tends to fall quite flat. Okay? So we need to look at our story segment. Um, not just our brands, not just our colors, but our story, what the customer story is, what our customers want, what their hopes, dreams, and desires are. And let's see where those two things overlap and see how we can get that to connect.

So area one is our product. Area two is our story. So we've got a product to sell and we've got a brand messaging, uh, idea in which to wrap that up. Now we need to work on the technology. So

area three is all about the tech stack.

Um, this is all about how we sell this to our customers. Is your technology helping or hindering are your systems integrated or is data fragmented across multiple flat platforms that don't really talk to each other?

They're all building on each other. This is where we've got all those subscriptions that we don't really need, but we bought because we thought we needed them at the time. You know, it's all of that stuff. How is our tech stack doing? The tech that we use to sell our products and tell our story to our customers, which leads me nicely to area number four.

So I've got the product, I've got our story sorted out. We have got the technology sorted out. Now

we need to think about the area that everybody loves to talk about,

which is marketing.

And this is all about getting the customers to come to your tech stack to buy your products, right? So which channels are actually delivering?

And here's the scary question. If your main marketing channel disappeared tomorrow, would your business survive? That's a great question. We've all fallen a fail of this in some way or other, I'm sure if you've been in e-commerce for a while, right? I'm, uh, if meta changed its algorithm, for example, which let's be honest, happens all of the dang time and your ad stop working, uh, ring the iOS 14 update bell.

Um, what would actually happen? Right. And that question, I think has, has kept many of us up at night, uh, as, as well it should. Um, area number five, we talk about optimizations. Now we've got people who have come to our technology stack to buy our products. We've got the brand story sorted out.

Now we need to optimize the site, which is all about conversion.

So once the visitors are there, are they actually buying? Where's the friction? Um. When did you Right last? Watch a real customer. Try and buy something from your website. Not look at the analytics, but actually watch someone trying to use your site and trying to buy from you. It is so eyeopening, right? Uh, area number six, we call experience.

So this is all about the post-purchase journey. So they've come to your site, they've bought the product, we've converted them. Now we need to think about what happens from that point onwards.

And this is area six in the framework. What happens after somebody buys?

Is that journey building loyalty or are you losing customers before they even come back?

This is one of the most overlooked areas in e-commerce because I think everybody obsesses about marketing. It is the golden child in this framework. Everyone loves it. Even in our clients, this is where we spend most of the time. Um. And it's good and it's good to do that. But don't forget this, right? Um, because you don't wanna drop the ball here.

This is where I think your business really just sink or swim.

Area number seven of the framework is growth.

Okay, so are you building flywheel? Momentum is the question. There are three levers. Levers. Why did I say levers? 'cause I've got an American voice in my head. There are three le, three levers of growth, um, and only three I think when it comes to growing a business.

Three levers that you can pull, right? Number one is the number of customers that you have. If I pull that lever, I get more customers. Number two, I can convince the customers I have to buy more product from me, which in effect in e-commerce, we call the average order value. So how do I get them to buy more when they're there?

And the third lever that we can pull is all to do with average order frequency. Average order count, as I've heard it called this, is basically how many times a customer comes back to buy from you and how frequently they do that. Okay, so if I want to grow my business, I have to pull on one of those three levers.

Okay? I've either got to get more customers, I've either got to get the customers, I've got to increase their average order value, or I've gotta get the customers I've got to, in effect, increase the frequency with which they. Buy. If I pull on any one of those levers, I will grow my business. Here's a really bonkers thing, right?

If I grow, say, new customers by 10%, I grow my business by 10%. If I increase average or value by 10%, I. Increase my business by 10%, you get where I'm going. If I increase average order count by 10%, I increase my business by 10%, right? The maths works. If I increase all three at the same time, due to the wonderful, uh, mathematical function of geometrical progression, I actually grow my business by 33%.

Um, and so you start to get geometric growth when you focus on all three areas at the same time. So they are in effect, the three areas of growth, uh, in the grow area Now. That's our sort of seven step framework that we use. We call it slingshot. Like I say, we're gonna get into it in much more detail over the year.

We're gonna really focus in on what that looks like for your business, and I'm hoping, actually, we're gonna put a load of content on the site about it. That's the plan. We'll see if we get there now. Each area right? Deserves honest scrutiny. So no matter how brutal the facts, not just how did we do, but what did we learn?

What didn't work? What are we gonna do differently? Okay. And of course, as you would expect this being, uh, an episode on the eCommerce Podcast where it's just me, I love to give the freebies to help you do this well, um, which I'm gonna explain more about in just a few minutes. So there is a freebie that's gonna help you.

Walk through this with questions and, and help you track the ideas and the numbers. Okay. So I'll explain like, say more about that in a minute. Before I do though, let me just take a minute to talk about the numbers that I think you should track so we understand the framework. There's these sort of seven areas that we need to look at.

Okay? Um. Let's look at the data, but before we get too much into the data, let me, let me preface this by saying that I have found something really helpful when it comes to data and looking at reviews, um, and the, and the results and, and. Yeah, it's, this is a really smart thing. Okay.

## [00:17:42] Lead and Lag Measures

[00:17:42] **Matt Edmundson:** And it's, I, I call it lead and lag measures.

I don't call it that, it's just what I picked up. Um, I read the book, uh, four DX, the Four Disciplines of Execution, which actually came out of the Franklin Covey, um, setup. They wrote the books like The Seven Habits of Highly Effective People and stuff like that. Really interesting management consulting company.

And they defined lead and lag measures. So before we jump into the numbers, let me give you this. Understanding around lead and lag measures, which I think is gonna really, really help you. Okay? Now, everything, uh, you measure in a typical review. So as you're going through these seven areas, as you're walking through, walking, working through the freebie.

You're putting numbers out there, hold intention, right? That probably just about everything you are seeing in the review is what is called a lag measure. Okay? So things like revenue, profit margin, conversion rates, customer count. These are in effect lag measures. They are all results. So what I mean by a lag measure is this, by the time you measure them, by the time you get that number, they are already fixed.

You can't change last year's revenue anymore than you can unring a bell, okay?

It is what it is. And I mean, you can get fancy accountants, don't get me wrong, but you can't go back and change it. So lag measures tell you what happened. They in effect help you keep the score, but they don't necessarily tell you how to play better.

The work that actually matters happens, I think in lead measures. So this is measuring specific activities that control and influence those lag measures. Okay. Stay with me. Um, so given that this is the new year, lemme give you some example, right? So the time of recording, it's New Year's Day. Um, so happy New Year, right?

Uh, time of recording. Definitely not the time of recording. The time that this episode comes out is New Year Day. Uh, I'm not recording it and posting it on the same day, just total transparency. Anyway. Uh, it's New Year's, right? So we're all obsessed with weight loss, aren't we? In the new year?

## [00:19:51] Understanding Lag Measures

[00:19:51] **Matt Edmundson:** Um, and right now, probably most of us can do with losing a few pounds.

Okay? So weight is a lag measure. It's a number that is based on decisions that I made last year. Okay. It's decisions that I made in the past. I made decisions to eat. I made decisions about exercise, and as a result, my weight is a lag measure. It tells me the net result of those past decisions. It tells me the score.

Okay? If you like football and managers, it tells you the score.

## [00:20:23] The Importance of Lead Measures

[00:20:23] **Matt Edmundson:** But if I want to change my weight, um, if I want to lower it, I can't just measure that. I can, but it's not totally helpful. Right.

What I actually need to measure are the lead measures.

So what are the lead measures when it comes to weight loss?

Well, the obvious ones are gonna be, um, how many calories I eat and how many minutes I spend doing exercise. Right? They are two lead measures that if I focus on, if daily I measure how many calories I eat and how many minutes I spend exercising, then I know. That will have a direct impact on my weight.

Okay? So my weight will come down unless I'm trying to bulk up to get, you know, big like Arnie, uh, which I'm not, by the way. Um, so hopefully you're getting the, the difference between a lead measure and a lag measure. Okay? So, um. And, and this is important, we're gonna get to this in a second, right?

## [00:21:19] Sales Revenue and Conversion Rates

[00:21:19] **Matt Edmundson:** So for example, sales revenue, let's go through this in a bit more detail.

Sales revenue then is a lag measure. So your sales number are, um. A number which tells you the results of what you have already done right? And it's a good number to know, but you have to think about when it comes to sales. So if you want to increase sales next year, as well as measuring that number, you have to understand what the lead measures are that help that grow, and then measure those relentlessly.

Okay. Uh, conversion rate, for example, would also be another one. How do we improve conversion rates? So a lead measure that affects it might be something, I don't know, like AB tests every month and implementing the winners. Okay. Or did we increase? Customer lifetime value. So customer lifetime value is a lag measure.

So a lead measure for that is did we add and test new email sequences each month for educated customers on product use? For example, going back to my friend George Byron. And so the principle, uh, is to understand the key lead measures that drive and effect the lag measure, and how often these emerge through testing ideas.

Because there's no real one size fits all. I can't say to you, right, for you to increase sales. Revenue, these are the lead measures for you because there is no one size fits all. I'm really sorry there isn't. Um, and what works for you might not work as well for somebody else. We've all seen this, right?

You've all heard things on this show. You've all seen things on YouTube where somebody comes on and said, man, I did this. And I went from zero to a million in like a microsecond. It was amazing. You do the same thing and you're down 10 grand already, right? Um. So you have to find those lead measures for you.

And the only way to really do that is to test. So when you are doing your review, you are looking at, excuse me, you are looking at the lag measures and that's fine 'cause you need to know where you ended up. Right? But when you are thinking about what we can learn from this and what's driving this, when you set your goals for the coming year.

Don't just set a sales revenue goal, we wanna increase sales revenue by 20%. 'cause you're thinking in terms of lag measures, think in terms of lead measures. Like what are the key levers that pull sales revenue? I've already mentioned the three levers by the way. Uh, but what are those levers that increase sales revenue and let me focus relentlessly on those every month.

'cause by doing that, I know my revenue will increase. Okay. So what that will tell you then is what activities, what specific activities that you can commit to that will drive the results that you want. Okay. So I, the reason I'm telling you this is the amount of times I've come to people and they say I want increase revenue by 20%.

Um, and that's all they're measuring is revenue. And I think you have to understand lead measures and lag measures and measure the impact, uh, of those things. So. All that said, I hope you're still with me. The purpose of the review is to understand your lag measures and to get an idea of the lead measures going forward into the next year.

## [00:24:28] Financial Health Metrics

[00:24:28] **Matt Edmundson:** So let me quickly run through the numbers that I think are worth tracking as lag measures if you're gonna do the review properly. Okay. Um, I think you need to track several different metrics. And again, these are all in the freebie. Okay. So for financial health, you're gonna be looking at gross profit margin.

Uh, and

a healthy gross profit margin in e-commerce is about 50 to 70%.

you're gonna be looking at net profit margin. You want about 10 to 20%. that work working capital ratio, you're gonna aim for about one and a half to two.

Now, let me explain Working capital ratio, because it's not immediately obvious what it is.

It might not even be something that you have heard of, but it is a useful health measure nonetheless. Okay? And what you do is you calculate this by dividing your current assets. By your current liabilities. Okay? And I don't wanna get too accountant, too mathematical. You do need to get your head around some of these numbers though.

Okay? So let me define current assets. Um, in a way that's hopefully gonna simplify it and just keep it really easy.

A current asset is the sum of everything that can be converted to cash within a year.

Okay? So that's your current assets. Everything that can be converted to cash within a year. So that's obviously gonna include cash in the bank.

Um, but it's gonna include accounts receivable, like maybe strip owes you a bit of money. Um, inventory that sells quickly. Um, short term investments, things like that. What can I convert into cash in the next 12 months? That's my current assets.

Current liabilities. Then follow a similar definition. These are all the debts which I have to pay within the next year.

Okay, so what do I owe my suppliers? Like short term loans, unpaid taxes, invoices, not paid accrued expenses. These are all debts that I have to pay in the next 12 months. So if you've got, for example, a hundred grand in current assets and 50 grand in liabilities, then if I take the a hundred divided by the 50.

Your ratio then is two, and that's healthy, and you are aiming for somewhere between 1.5 and two. It's generally known as the sweet spot because you've got more than enough assets to cover your debts with a comfortable buffer. So if it's below one, if that ratio is below one, what that tells you is you've got negative working capital.

In other words, you've got more short-term debt than you've got assets to pay for that, which is not, I mean, it's not the end of the world, but obviously that's something you need to be aware of. Conversely, if it's over two, um, are you being too conservative? You might not actually be using your capital efficiently.

Now, I do want to caveat that statement by saying this completely depends on your business model. Like, if I'm honest, my working capital ratio is quite a bit above two because of my personal convictions about debt, which not everybody has, and I, I'm not gonna. Try and convert everybody to my way of thinking about debt.

Um, and when, but when I'm acquiring companies, when I'm partnering with companies, when we're going through that whole process, I look at that working capital ratio and I'm looking at that number there. Okay? So depending on your current business model is gonna depend on where that is. So go have a look at that ratio.

## [00:27:51] Customer Metrics to Track

[00:27:51] **Matt Edmundson:** Now the customer metrics that I think you absolutely should track are gonna be your customer acquisition cost, also known as cac, which if you're British, is slightly funny. Um, what does it cost to get a customer? How much do you pay to get a customer? What's your customer lifetime value? That's really important.

What's your customer worth over time? Now, um, if you've been around for a while, you'll have heard Oliver Spark on the show. He talked about. This customer lifetime value. And I, I know that over the years of knowing Oliver, um, and he runs Suite Analytics, which is an analytics platform for e-commerce, which I'm quite, I'm quite, uh, quite, I enjoy Suite actually.

I think it's a good platform. A shout out to Oliver and what those guys are doing. Um. When you measure customer lifetime value, one of the questions comes in your head was how? Over how long? Right? Because it says customer lifetime value. So how do you define the length of a customer lifetime? And again, I think that comes down to your business model.

Like if you sell couches, then your lifetime value of a customer might be over 20 years, right? Because how often do we buy a couch? I'm in the supplement game, I'm in the gift game. I'm in a few different games, but most of which are quite short, repeatable, so I measure over a 12 month period. Um, and so customer lifetime value for most companies, most of the time you're gonna wanna measure that over 12 months, possibly 24 months.

Um, but majority gonna be 12, right? But whatever the period of time you choose, make sure you use that consistently when calculating customer lifetime value. Once you understand your lifetime value and you understand the cac, the customer acquisition costs, you can create then a ratio, so your LTV to CAC ratio.

Um, and you are wanting somewhere around three to one. In other words, you want a lifetime value of a customer about three times more or better than the cost to acquire one. Okay? And again, this is, there's no hard and fast rules here. It all depends on your business model. But if your CAC is too high and your LTV is too low, you've got no profits to run your business.

So less than three to one, it becomes really hard to sustain. Um, over three to one, it might tell you that you've probably got a bit of margin to put into new customer acquisition. Um, so if you have a five to one ratio, you might wanna look at actually, does that give us a bit more play to increase our customer acquisition costs?

If it means we get substantially more new customers? Always worth thinking about because new customer acquisition is obviously, is, is important. So you've got your lifetime value. Customer acquisition costs, average order value. Uh, it's one of the three levers of growth we mentioned. Gonna wanna look at that.

Um, conversion rates. Uh, an average conversion rate in e-commerce, by the way, is two to 3%. I dunno what it is for your industry. Um, you can obviously find that out. Just, you know, ask I, it will tell you these. In fact, don't ask ai 'cause it might just make it up. Do the work yourself and find out using Google, um, or perplexity actually might help you there.

Um, but understand your conversion rate and benchmark that you also want to understand your repeat purchase rate. So how many times customers come back, the percentage of customers that come back, um, is really, really helpful. Um, that's a really good number to measure. Um, and these aren't atory metrics, by the way.

I think they're vital signs for the health of your business. And if you don't know these numbers. Um, I think whatever review you do is gonna be sort of guesswork and dressed up really as analysis. So before you deep dive into the seven areas and, and go through the, the freebie, the download or however you wanna do it, but if you go through the download and ask or answer the questions that we ask you in that download, in that workbook, the workbook starts off with the spaces to put those numbers.

Okay? So spend the time you need to get them together before you start. Um, and. Regularly track them. Okay? At least, at least every year. You know, if you put those numbers in now at the end of the year, you can see where they are and you can see what's worked again, what's not worked. You know, with a year on year comparison, I think it's quite helpful.

So have a look at that. Now, let me finish, uh, with the Lego story because I think it's important, uh, just to round that or close that circle. I think they say, uh, after that sort of brutal 2023, no, 20 2003, not 2023, get the numbers right. Matt, uh, after that sort of brutal confronting the brutal facts in 2003, that review, Lego didn't just identify problems, they actually acted on them.

Uh, we can see the results now, right? I mean, they're an insanely, uh, popular brand. They discovered, in effect, the adult customers, the ones who they assumed were detracting from the brand. Can you believe that were actually a massive opportunity. They streamline their product range. They rebuilt their understanding of who their customers were.

And the net result of all of this, lemme give you some numbers. Nearly 20% compound growth. Over two decades. Oh, that's insane, isn't it? Love, I would love those numbers. Uh, in 2017, they even created an internal document, which was literally called Blind Spot to remind leadership about the opportunity that they had missed, and then by 2020 they'd launched an entire 18 and over product line specifically for adults.

I have bought Lego as an adult, right? And the review didn't just save the company. It has utterly transformed it, and I think you can all see that. So that's a Lego story. Hopefully that's rounded off that circle. And it's all of this is backed by some pretty compelling research. Let me tell you, there's one, there's one secret actually.

## [00:33:51] The Power of Accountability

[00:33:51] **Matt Edmundson:** If you do these reviews on a regular basis, there is one additional secret. This is that saving the best tall last thing we do on the podcast. Because if you stay around to the end, you always get the extra nug nugget, right? Um, this is that one saving the best tall last. It's all to do with having an accountability partner because studies show that if you do, you increase the likelihood of achieving your goals by how much do you think?

Just sit there and think, I dunno how you feel when you hear words like accountability partner. A lot of people go like, oh, really? Um, but listen, I'm gonna give you the number in a second, but I honestly think about it, right? What is the likelihood of you achieving your goals? What is the increase, sorry.

In the likelihood of you achi achieving your goals, what percentage increase do you give yourself by having an accountability partner? What's that number in your head? 5%, 10%? I don't know. It's 95, 90 5%, you want to be almost twice as likely to achieve your goals. That's one heck of a jump, right? Um, especially when you compare the fact that actually it's just 10% when you give, uh, when you just do it yourself.

So without the accountability partner, you are twice as likely to succeed at achieving your goals if you just go yourself. It's a 10% chance. Always worth bearing in mind when you're setting your New Year's resolutions as well. That is saving the best till last.

Let that sink in 95% versus 10%.

So I think reviewing in isolation has limits.

You know, you'll be kinder to yourself maybe than you should be. Uh, you'll miss the blind spots that others are gonna catch for you. And if you guys are anything like me, you've had those sorts of moments where you've explained something to a friend or a business partner or maybe a board. Remember, and just saying it out loud made you realize how crazy it sounds.

I have so many good ideas in my head that as soon as I verbalize it, I go, that's just stupid, isn't it? Yes. Uh, and that's the power of not doing this alone. And it's one of the key reasons. Quick plug, uh, why we created the e-commerce Cohort, which is a free monthly group where founders share the challenges they're going through.

They give feedback, hold each other accountable. Um, there's a WhatsApp group for the sort of ongoing conversation between the calls. It's super low key, but the account, the accountability piece is genuinely. Powerful and, um, we're loving running cohorts, so if you want to join Cohort. Uh, you can definitely find out more if you're doing this review and thinking, I wish I had someone to talk this through.

That's what cohort's for. You can find out more information at eCommerce Podcast dot net.

Go to eCommercePodcast.net and you'll find information on there about Cohort.

There's a, a link right at the top says Join Cohort. So go click that and have a little read, um, and just let us know if you wanna join.

It'd be great to see you in one of the groups. Okay.

## [00:36:55] Summary and Final Thoughts

[00:36:55] **Matt Edmundson:** So let me close because what I want you to take away from this, right, let's, let's summarize

number one, you've got to do the review.

So block in a day to do the review. Treat it like a board meeting with yourself. Don't let January arrive without understanding, uh, what has happened this year.

I don't let January arrive just thinking about this, coming out in January. Don't let February arrive. Without having taken the time to do this right. Number two, so you, you are wanting to do the review, use the framework.

Number two is use the Slingshot framework

right? I think it's a really good framework.

It covers everything you need to know. Go through those seven areas, sell story, tech stack, marketing, optimization, experience and growth. And for each one, ask what worked. And what didn't and what did we learn? You can use the freebie, like I say, track the numbers.

Number three, get your metrics in place so you can do your year on year comparison.

And number four: watch out for the Genius Trap. Especially if the business went well for you last year.

Don't use a review just to prove how smart you are. We all know you are smart. Use it to confront the brutal facts with that spirit of faith and adventure, that the future can and will be different.

And number five: don't do it alone.

Find someone to share your finding with, uh, get that accountability partner. It makes such a massive difference. And as I mentioned, I've put all of this together in the year end review workbook that walks you through all seven areas with specific questions, with metrics to track, and there's space to capture your lessons and goals.

It is completely free, and of course, the link is in the description, uh, below. All we just heard of to website eCommercePodcast.net. Click on the resources link and just search out this guide. Uh, all I ask is you download it, work through it, and let me know how you get on. And hey, if no one's told you yet today, let me be the first.

You are awesome. Created, awesome. Yes, you are. It's just a burden you have to bear. You are a genius. We know you're a genius. You don't have to prove it with the review. You are a legend. Absolutely. Thank you for being with us here at the start of the year.

May I wish you a very, very happy New Year and an insanely prosperous 2026.

I'll see you in the next episode, but that's it from me. Thank you so much for joining me. Bye for now.