00:00:00:00 - 00:00:24:03

The way e-commerce is now is it's a vehicle for a lot of people to own a $10 million brand less than it's a vehicle for a few people to make $1 billion brand. A lot of times I see brands make it to a certain point. Things are working on platform. They're seeing conversions, but then they just stop. They just run the same stuff for like months.

00:00:24:07 - 00:00:43:23

A lot of incumbents right now, you're just like trying to move. They're like, okay, this isn't working anymore because it's a lot tougher. And measurement and tracking is such an obscure concept that people are still adapting to, but they're still not thinking. I think in like like I want to push people to think even more outside of the box.

00:00:44:00 - 00:01:14:24

Alex J. Welcome to Social Studies. Welcome to the pod. Really excited to have you on. We have been interfacing a ton online and I've been reading your newsletter a lot, which is super insightful. And, I think you know, your perspective on this industry is really refreshing. Lucas and I were chatting earlier today about how how many people are online talking about tactics and strategy, but you can kind of tell if you're really in the weeds on some of this marketing strategy stuff.

00:01:14:24 - 00:01:34:13

You can tell who is in the weeds as well, and who is being super honest and vulnerable about what they do and don't know. And, in my mind, you are top of that list. Which is super refreshing. So what I want to do is just give a little bit of background for those people listening on where you where you're coming from and how you've gained your perspective.

00:01:34:13 - 00:02:04:04

And then we'll just dive right into, you know, more tactical level things. So, Alex, it's safe to say you became pretty popular from your newsletter, which is called Know Best Practices for those listening. If you haven't heard of it. Go check it out. No best practices goes out to thousands of subscribers every month. And Alex really had her rise in marketing strategy experience for brands such as Tibi, tapestry, which is a house of brands that holds companies such as Koch and Kate Spade.

00:02:04:06 - 00:02:31:11

And, you know, you work a lot with fashion, beauty, wellness and maybe a little bit of CPG sprinkled in there. So we have a lot of synergy as far as our book of business in our portfolio and the companies that we're working with, and I would say even more so, we both you and our agency, we both have found a sweet spot with companies that are in the seven figure range, eight figure range who are trying to break through certain growth plateaus, which are quite common.

00:02:31:11 - 00:03:09:17

We see companies stalling at 5 million in annual revenue, 10 million, sometimes 30 million. And so I really want to dive into things that you've learned of what not to do when you reach those milestones and things that you've seen become major unlocks for breaking through those plateaus. So just to center this, because there's a lot of ground that we can that we can cover and it's it's honestly difficult to figure out, like where to begin and where to meander through, but just to center it, I think it'd be interesting to know, you know, for the companies that you've started to work with that have reached that, say, 1 million to 5 million range in

00:03:09:17 - 00:03:33:15

annual revenue, that are really stuck and they're getting frustrated at that milestone. What have been some things that you've learned of, like this is absolutely detrimental. Don't do these things or the things that are on the flip side, the positive, like the 20% things that really help unlock that next level of growth versus maybe the 80% of tactics and and motions that might be a waste of time.

00:03:33:19 - 00:04:04:20

I think a big one is figuring out what your main customer acquisition channel is going to be and like, really leaning into and perfecting that, not just your creative approach, but your the systems that you have in place to make it sustainable and scale it and measure it. So, for a lot of brands, that's meta advertising, but you really want to be thoughtful about where your audience is and if meta is even the right channel fiscally or brand.

00:04:04:20 - 00:04:33:18

Because there is there are definitely products and pricing and brand positioning that works better on meta and some that, you know don't work at all. So I think some brands will hit a scaling plateau where, you know, either their their brand is really niche or their unit economics are not suited to meta. And they get down the road and they're able to get up to like a million, $2 million, and then they're not able to scale profitably anymore.

00:04:33:21 - 00:04:57:11

And that's the point where they need to step back. Like I was advising one brand very, very niche like they were in the jewelry category, but they were targeted at a very, very niche audience. And I think after iOS 14, it became harder and harder to reach some of these really niche audiences. So my advice to them was, maybe you need to build your own community around this niche.

00:04:57:11 - 00:05:37:24

Maybe you need to do some research and find out, like where where these people are already hanging out. Like who do they think are credible and lean into that versus continuing to try to make Facebook ads work better? Yeah, for sure. It's it's interesting. I think we find that it's actually relatively easy to get to the seven figure mark using a channel like meta, but I'm curious though is and of course, everything is is different and there's a multitude of factors, but do you see a pattern where a brand is able to get to seven figures using a channel like meta, because they're not so worried about profitability, because they have some funding or they

00:05:37:24 - 00:05:56:10

have some momentum in the early days, and then when things become serious and stakeholders are like, okay, you're doing well, we should be profitable at this point. Let's keep growing. That's where they're hitting those ceilings. And it's because of that reason or are there other factors at play? You see what I'm saying? Yeah, I mean that's definitely one.

00:05:56:10 - 00:06:20:01

And I hate to be a buzzkill, but the idea that you, you can start off with unprofitable unit economics and consumer e-com and then scale to a place where you're profitable, as in nine out of ten cases. That's just not going to work. So if that's the situation that you're in, my advice would be to kind of hit pause, walk back the growth and like recalibrate your unit economics.

00:06:20:01 - 00:06:40:05

See you're either profitable on the first purchase or close to it. But some of the other scenarios that I see are like, you've kind you kind of run out of steam on your product like every for every product out there, there, there's this pool of in-market demand, and you don't know what the number of people in that pool is going to be.

00:06:40:08 - 00:07:06:13

It shifts over time. So like, you basically reach the point where you're no longer able to reach in market demand profitably and that's the point where you probably need to, extend your product line to capture more in market demand. So, like, that's something that I see where it's like a 1 or 2 product brand and they're in the, you know, between 10 and $20 million.

00:07:06:13 - 00:07:25:05

They hit a wall scaling with meta, but they were like really good at creating ads and ad variations. And they're trying everything like they're trying to speak to new audiences, they're trying new hooks. They're trying TikTok and Pinterest. But the solution is actually they just have to launch new products that are going to appeal to a similar audience.

00:07:25:05 - 00:07:50:00

And and that's how they have to unlock the next layer of growth. Yeah. No, we we see the same exact thing. We agree. I mean, the other thing is, is, is launching certain sales channels, whether that be Amazon, Walmart or whether that's getting into some brick and mortar retail, just getting different diversified sets of distribution in there. I want to go a little bit deeper into some of that.

00:07:50:00 - 00:08:14:23

You mentioned this word systems and sustainability. These are two words that we use a lot as well. And I like to talk to our clients and talk to our team about this case scenario, where you may be doing a lot of things, tactic level things that work for the first 12, 24 months of the business. But if those don't turn into systems, sustainable systems, what happens is then you want to move on to the next, the next set of priorities.

00:08:14:23 - 00:08:34:10

But there's no one or no processes in place to manage the first order systems that got you to where you are today. And so there's just like this leaky kind of bucket effect and that that solves growth as well. And that's very frustrating, especially for founders who are trying to to work on product development and innovation. And they constantly are.

00:08:34:11 - 00:09:04:19

It's like Groundhog's Day where they're just going back to the beginning because they haven't set up the systems. But I want to talk to you about, like, how you consult your clients and work with brands to build those systems. What do those actually look like, or what systems are important to you? And one way to think about that is, you know, if you're starting to work with a brand in the first 30 days, what things are you maybe looking at within their toolkit or within their ad accounts to assess, like, are these systems in place or what systems do we need to prioritize first?

00:09:04:19 - 00:09:28:13

That's just one prompt that you could use to like frame that, but you can take that wherever you want to go with it. Yeah, I think taking that and kind of zooming in on meta advertising, two big things that I see when I audit new accounts or meet with brands is that the first is that they just, whoever is running the account is using outdated account structure.

00:09:28:13 - 00:09:50:06

So like things are hyper segmented. And honestly, I'm surprised how often I see that, like when I walk into a situation and they're they have like five different campaigns with $50 a day budgets targeting different audiences. You can't like, like your goal is to get a campaign pass 50 conversions a week so that that approach doesn't work anymore.

00:09:50:08 - 00:10:11:18

Can you, can you actually, I just want to double click on that. Explain why that is, because a lot of earlier stage companies have founders doing the marketing or more junior level people that have just been brought in to kind of help scale that growth. And it logically makes sense to say, okay, we want to target these audiences and build out funnels based on those audiences.

00:10:11:18 - 00:10:47:16

So if you could just explain the mechanisms on meta and why that may not be the best approach. I mean, the big part of it is that after iOS 14, which for those who don't know, is, was an Apple privacy update to their, their operating system and their built in browser, it's harder for Facebook or Meta to consistently identify a single user across platform, like the reason it used to be so powerful is because, they knew they could tie together one identity what you were doing on, like, your laptop and your phone and your work computer.

00:10:47:16 - 00:11:09:00

Like they can tie all that data into a single profile and assign you into all of these targeting buckets and consistently know when you were shopping on e-commerce. Like if you're clicking around on adding things to cart on your work computer, they can serve you ads for that same stuff on your phone and the the ability to do that cross-platform ID has degraded a bit.

00:11:09:00 - 00:11:34:20

It's not it's not 100% gone, but it's not as good. So the accuracy of the people who are in the audiences has gotten worse. And meta itself just recommends that you try to make your targeting as broad as possible and use signals from how people interact with your creative to help find more people who are relevant. Yeah. So the, the efficacy of, of tracking is, is is degrading and it's going to consistently degrade.

00:11:34:20 - 00:11:57:15

Jackson I were talking about this last week at an event that we had. And so like determining signal is becoming harder. And a lot of that's happening on individual ad creatives and that's how the platform's optimizing based on, on those sorts of creatives. So it's harder to niche just off of pure media buying, segmentation and targeting. Lucas. You should actually you should actually touch on Vermont.

00:11:57:15 - 00:12:22:04

I think this is an interesting point. You just as a sidebar, what what Vermont is doing, because they're taking a very interesting approach to this problem that I think deserves a little bit of a plug. Yeah, I think for Vermont and even just like on platform shops, these closed loop ecosystems that, you know, have really good ways of, of understanding signal because it's happening within a closed loop environment.

00:12:22:04 - 00:12:40:24

So Amazon's a really good example of these ecosystems that have still high efficacy because they're not beholden to, you know, 80 changes on Apple or I.T or you know, whatever comes out in the future. And this is where you see kind of a bit of a dynamic shift within the advertising space. Platforms are going to start introducing shops.

00:12:40:24 - 00:13:01:16

And I think brands should really lean into that because you have better signal and therefore you can have more efficacious marketing and, and hopefully better returns, because in aggregate is what we're seeing is advertising is becoming less effective. CPAs are going up. So if you have customers interacting with ads and they're actually interacting with commerce on the platform you have, you have better signal.

00:13:01:16 - 00:13:25:06

So think of like an Instagram shop, TikTok shops and then Vermont. And this is the plug for shop is, you know, they're creating a storefront for every ad. So you have kind of better signal and better fidelity in terms of like what advertisements and what sort of products and lenders are performing better because it's it's 1 to 1, rather than just having all ads drive to the web experience or the home page or the collection page.

00:13:25:08 - 00:13:43:24

And I think the more interesting thing is, like when you play this out over the next five years, it's like, how does the customer experience evolve and change? And what is the role of the website? How important is the role of the website in the advertising equation, in the customer experience? That's something I'd love to ask you, Alex, to if you could opine on.

00:13:44:03 - 00:14:10:18

Well, honestly, what really scares me about the direction this is all moving in is whenever one of these big players is able to create a competitive advantage, they immediate that. Maybe not immediately, but they they do whatever they can to to take more and more of the pie. So thinking about a future where Facebook is starting to charge a commission on all of the shops, transactions like that, not a pleasant thing to think about.

00:14:10:20 - 00:14:40:04

So, I think it behooves every brand who wants to stick around for the long term to think about ways to build awareness and and customer acquisition flywheel outside of paid social. Like, if you can crack paid social, that can become a stable base of cash flow for your brand. If you can run paid social so that you're walking away from each transaction with at least you know, 10 to 20% of the ticket price.

00:14:40:10 - 00:15:07:10

After you factor in all of your variable costs. And that's and you have systems where you, you know, you can keep that relatively stable, then that's just cash that you can use to fuel, you know, other aspects of your growth. I generally get the feeling that paid if you can unlock paid, it's like it's like a blessing and a curse because you get, you know, it's a bit of a crutch in the sense that, you know, it can be a great springboard for, for your business.

00:15:07:12 - 00:15:27:01

Especially if the unit economics work and the ways that we were talking about earlier, for you to expand and, and really grow a business on relying on, on third party providers and the need for distribution, etc., etc. but at the same time, it trains the the marketer to be a little bit more reliant on deterministic tracking, which is becoming like a thing of the past.

00:15:27:01 - 00:15:46:06

And I think it just makes you a little bit more risk averse, like you don't want to lean into uncrackable channels that might have crazy upside for you. It might just have more friction. This is what I see with a lot of incumbents right now. They're just like trying to move. They're like, okay, this is in the way post iOS 14, in the way that we used to run our marketing programs.

00:15:46:06 - 00:16:04:05

This isn't working anymore because it's a lot tougher. And measurement and tracking is such an obscure concept that people are still adapting to, but they're still not thinking. I think in like it, like I want to push people to think even more outside the box in a way that like, you know, Jackson said. We were thinking about, you know, we talked about this a couple times in the pod.

00:16:04:05 - 00:16:26:06

But Joly like how they're just comfortable, like being uncomfortable with the tracking. They're being very deliberate about there. Their ROI on on on their marketing in aggregate. You just don't need to tie back the ROI directly to the channel. Yeah, it takes the entire customer journey. I think that's what is super cool about looking into what Joly is doing and companies like that.

00:16:26:06 - 00:17:02:12

And Alex, you've been very vocal about acquisition and retention being two sides of the same coin. And so I'd love for you to to chat about that a little bit. I mean, the way that we've been pushing our team and our clients is to really look more at the bird's eye view of the customer journey. And I don't just mean I definitely don't mean the Ada funnel in a linear type of mental framework, but making sure all of the messaging, the strategy, the content is cohesive throughout each touchpoint because customers, at the end of the day, they're not thinking about your strategy.

00:17:02:12 - 00:17:42:20

They're not thinking that they're in a funnel, they're just interacting with touchpoints. And the more that those touchpoints compound, the sense that they need to purchase from this brand or the affinity that they have towards the brand overall, and over the long run, those customers will become, you know, more profitable customers. That's the goal. But I'd love for you to share your perspective on how you talk to brands about acquisition versus retention, how to actually align and integrate those two teams, whether it's like two people on a team or whether it's like two large teams trying to work together as well as like, you know, measure the effectiveness of those programs effectively.

00:17:42:20 - 00:18:10:18

Yeah. I mean, when I'm advising smaller brands like brands that are under, say, like $25 million in revenue annually, I think a lot of there's a tendency to over invest in retention because acquisition becomes so hard. So it's a little bit of kind of running away from the real issue. If you're a mono brand e-com business, like you're selling, you're one brand, you're selling online, you're doing really well.

00:18:10:18 - 00:18:45:05

If between 30 and 35 of every hundred new customers you acquire comes back. So all of these e-commerce businesses, the model itself, it's like your business is a leaky bucket unless you have a really strong subscription component. But that's a whole other thing that I won't get into. So. So acquisition is critical and retention becomes more valuable, valuable over time, because every year you're in business, you're building up another layer of those like 5 to 10 customers that remained after you get to like purchase three or 4 or 5.

00:18:45:06 - 00:19:12:19

So when you're a smaller brand, I think retention is really about getting the basics right. Like, are you collecting emails? Are you mailing list at least 2 to 4 times a week? Do you have a good welcome series? A good post-purchase series, abandoned card, abandoned, browsed, and like, is the content of the emails themselves good? Because I've received emails from pretty big brands where like you click on a picture and it just makes the picture bigger, like it doesn't go anywhere.

00:19:12:21 - 00:19:42:22

So, so really getting the basics right. When I talk about the tie in between acquisition and retention, a lot of times the best way to improve customer LTV is to acquire better customers. Like, if you're trying to run a full price business, don't do all of your customer acquisition when you're on promotion. The bigger the delta between your full price and the pay you are of whatever it is you're selling on sale, the less likely those sale customers are going to come back and buy at any price point other than sale.

00:19:42:24 - 00:20:08:04

And then it's just it's kind of understanding, like the relative value of customers that you get from different acquisition channels and even, the relative value of customers you get who are entering the brand through specific products or categories and figuring all of that out. And then, retention, kind of passing that info onto to acquisition and integrating it into your acquisition strategy.

00:20:08:06 - 00:20:28:03

Yeah. And sometimes that's like really easier said than done. It's so interesting because I see it both ways for, for certain businesses. I mean, like in theory, as you're acquiring more and more customers and reaching colder and colder traffic, in theory, the propensity of those of those customer cohorts to be like as strong as your early adopters is lower.

00:20:28:03 - 00:20:56:01

You kind of get like a natural taper off. And probabilistic CLV over time said differently, you know, as you grow and get bigger and bigger, your later customer cohorts are, they have a lower CLV on a on average, I would say this is normally what you what you see. So it becomes it's almost like when you have like really large data sets becomes very hard to discern, like what a brand should really do, you know, and like how much you should be looking back at product to make the business stickier.

00:20:56:01 - 00:21:21:08

And then what I've been thinking about recently, and this is just me going on a tangent here, is the way that younger consumers are being trained to behave like there are endless product substitutes they're being conditioned to. There's kind of like endless scrolling. I would say that's the only way I can describe it. It's like an infinite scroll mentality where like, there is no incentive to remain loyal to a brand in the ways that, like you once were to certain products like, I even find this about myself.

00:21:21:09 - 00:21:43:18

I might have like a brand that I really, really enjoy. But then within a span of a year, like there's five substitutes that I consider. So I think understanding and having like a very loyal customer following, it's so hard to do today for for brand especially has you have more competition in most consumer verticals and like niche down of new entrants where like they're carving off a percentage of your customer base.

00:21:43:18 - 00:21:59:21

And I think there's a huge phenomenon here going on that's just making it very hard, even for incumbent businesses to, like, stay super competitive and to maintain a high level of LTV just when they're looking at their metrics. But curious, like when you look at Cohorting and you're kind of like trying to figure out a lot of these things.

00:21:59:23 - 00:22:14:05

Where do you start, Alex? Like how do you work through some of these challenges? Because I know for a lot of founders like you have access to all these tools, all these data tools now, and it's like, okay, how do I sift through the data? What do I do? So I wanted to touch on something that you brought up about Gen Z.

00:22:14:10 - 00:22:34:23

I think that's just young people. And it's it's something I realized that the older you get, the higher your switching costs become. And brand is really like a shorthand for something that's a known quantity. So if you buy something and you like it like, you know, at my age now, especially as a parent, one of my time is really limited.

00:22:35:02 - 00:22:55:12

I'm not going to sit and like infinite scroll through things. If I know that I go to a certain brand for, you know, clothing or HomeGoods and like, I know that it works and it's dependable. I'm not entertaining myself by trialing new brands. Whereas, you know, if you're younger, you typically just have more time both in your day and in your remaining life.

00:22:55:12 - 00:23:15:16

And so, you know, you can afford to be less loyal. So I think part of it is like trying to, to build a youth focused brand is just always going to be harder than either building a brand that's aiming for people who are like 35 plus or just like a diverse range of ages now, not only because of the time thing, but also just because older people tend to have more money.

00:23:15:16 - 00:23:35:04

So that's something to keep in mind. That's a really interesting take. I just want to say, because it's so sexy to build for the youth culture, but it sounds so much more pragmatic when you put it in that term, those terms of if you build something that inherently you need to replenish your building for busy people with high disposable income.

00:23:35:04 - 00:23:55:14

Yeah, that just sounds like a better customer off the off the bat. To me. They they are I mean, they are. It's a bigger market like baby boomers and they just have a ton of disposable cash. I will say though, like, I think the trend in the market, as those consumers become more digitally literate, which they basically did overnight through Covid, I think their attention spans are decreasing too.

00:23:55:14 - 00:24:16:04

They are having trouble with commitment. I even see it on the B2B side, like there is endless options there. There is a lack. There's perfect information symmetry. Now with the internet, like, you know, you know, the product or service you're going after and all of the five and ten competitors, just by virtue of, you know, how instant the internet has, has made things.

00:24:16:05 - 00:24:36:05

So I think there is risk even for the older demos where, you know, I'll just use anecdotal evidence like talk to my parents, they've got like tons of new products. They're being introduced to, you know, tons of new products through, you know, the work that we do and advertising. And I don't think the velocity with which that that is happening now was, was happening previously.

00:24:36:05 - 00:24:57:18

But your point is totally, totally taken. And I think it's definitely true. More true of of younger demos than, than older generations. Yeah. I mean, I think at the end of the day, if something works exceptionally well, that's a wedge. Like if you look at the the beauty category, there's a lot of snake oil. There were a lot of like pure marketing and a lot of competition.

00:24:57:18 - 00:25:18:12

Like DTC blew the field open, where five years ago there were, you know, tons of beauty brands scaling up to like $100 million in revenue. And now it's just a lot harder for everyone. But like, if you look at all of Plex and Katine, that stuff really works like it's backed by science and it does repair damage in your hair.

00:25:18:12 - 00:25:53:01

And those are both like really highly valued companies. Yeah. And and we, we just looked at both of those businesses. I mean Katine came out of nowhere. And just to, you know, I think 2019 and just scaled like crazy. Olaplex is now their category leader in that prestige haircare category. Yeah. I mean, those are great businesses, efficacious products to like, you know, they're built on good products so that I think those type of products have an advantage in the need that they're solving for and in the fact that once it's depleted and it worked, you kind of inherently go back to it.

00:25:53:07 - 00:26:12:09

Alex, I know that. Did you I heard somewhere that did you start your own mom, Jean brand, early in your career? Was that. Oh, yeah. I was working for a mom jeans brand. I did start a T-shirt line, but, like, that was actually my first entrepreneur. My, I guess, my, my toehold into entrepreneurship. It was like a complete disaster.

00:26:12:12 - 00:26:32:20

We are the same in that I, we did the same thing I did. I started a t shirt brand as well. That's a that's just like a rite of passage. I feel like, yeah, at this point it's like if you didn't start your t shirt company, what are you doing? Are you even real? Yeah, but no, it's a super hard business model, as you know.

00:26:32:20 - 00:27:06:24

And so I want to actually talk about fashion because you have a lot of experience in this industry. And the way you carry out acquisition retention strategies, I think is just it's just different by nature of the way the business functions. So give us some of those kind of takes of of things that a fashion CEO or CMO need to approach differently when it comes to this, this double sided acquisition to retention coin, when they're coming out with a new collection every six months, they're selling something that people realistically, at the end of the day, may not need.

00:27:06:24 - 00:27:31:08

They're selling something beyond just the physical good that have to do with people's vanity or their joy, waking up every day and putting on these clothes, their personal style. How do you kind of approach that with those type of companies? So I'm very selective about the fashion companies that I work with now as a consultant, because there's a lot that has to be done well on the product and merchandizing side for marketing to work.

00:27:31:08 - 00:27:54:09

And the businesses goals also have to be aligned, because a lot of what you do, like, if you build your business around the wholesale calendar and marketing to wholesale accounts that all like kind of runs counter to what you need to do to to succeed as a DTC business. So wholesale you're selling, you know, you're selling bikinis in December and winter coats in August.

00:27:54:09 - 00:28:13:06

Like the calendar is just like completely out of whack with buy now where now? And I don't even really know why that is so you have to run your ecom store on the same calendar and you're out, you know, using meta ads, trying to capture and market demand for things that people aren't going to need for 3 or 4 months.

00:28:13:08 - 00:28:39:08

I think merchandizing is really important because to succeed as it in DTC, as a fashion brand, you need a core proposition. So typically that's like a handful of bestselling products that you bring back season after season, and you might tweak the fabric or the colors or whatever. But people come kind of come back to stock up on that core, and then they see what else you have and crush up into other categories.

00:28:39:08 - 00:29:03:09

And that's how you maintain your customer loyalty. So the core is really important. And it's something that a lot of what I see that or what I see happen often is that brands go to market. They think they're targeting a certain customer, they have an item that is really successful, and it turns out that the customer shopping that item is like completely counter to who the brand founder thinks their core customer is.

00:29:03:09 - 00:29:29:16

So that causes a lot of friction. If you're trying to market the brand or grow the brand. So, so getting all of those little nuances and merchandizing figured out are very important. Yeah, those conversations between performance and brand building, I'm sure, you know, for us are always challenging. There's always friction there in that category in particular. I think it's an interesting conversation.

00:29:29:21 - 00:29:55:16

And to your point, when you have, you know, the connection between the connective tissue between product and marketing in those companies is really difficult, is is an understatement. And I'm not even sure if that's the right word. But, you know, you have a creative arm in those companies that is coming up with the next collection and they're thinking about how to merchandise, and then they have to, to your point, go out and create samples and then manufacture.

00:29:55:16 - 00:30:25:23

All of that takes a long time. A lot of money is spent. And then they have to go out and advertising market it. And the companies that we've seen be the most effective between their product marketing sales are ones where those three functions are tied to the hip, and they're focused on a very select few things at a time that each of those functions is contributing to and is super aligned on, as opposed to totally siloed organizations where there's a million things going on.

00:30:25:23 - 00:30:43:09

That sounds obvious, but by and large, I think like I'm confident saying that 80% of the companies that we see operate in that more chaotic, siloed fashion as opposed to the 20% that don't. And I can see a clear difference in their output. Jackson, let's take that a step further. I think, for let's just focus on fashion really quickly.

00:30:43:10 - 00:31:11:24

Alex, I love your take because you obviously have a lot of depth here. I think for the best, like a high growth fashion businesses you don't even like need to market in many instances like contrarian take here, throw out some names. I want to talk examples. Aldi is a really good example. Aldi Kate. It has a. They have a denim business where the denim sells for between like three and 500, and everything else is at least 500 all the way up to like multiple thousands of dollars.

00:31:11:24 - 00:31:41:14

So Kate, the reason that Kate didn't crash and burn was they had the denim and the cashmere, and that's like a wholesale staple. And then they had Katie Holmes. I don't know if that was organic or not, but like Katie Holmes wearing that one like cashmere bra made the the brand kind of like go viral. But then they had things like they had things that were fairly accessible for, you know, when they got that huge head of PR and awareness, like, you could come in and spend 250, $350 on a pair of their jeans?

00:31:41:19 - 00:32:00:03

I was going to say, I shop at Rag and Bone, like, I don't do a lot of luxury shopping, but like, that's one brand that I consistently go back to. And they have their denim like platform. It's not super expensive, it's good. And then they kind of build on top of that and I Jackson's a big James Perse guy as well.

00:32:00:03 - 00:32:26:16

So big James purse guys well know this by Lucas. Go ahead. We cut you off. So these fashion businesses though like first of all very difficult to execute. I think anyone who's worked at fashion can can tell you that it's subjective and like, it's very hard to create edge. Not a very high margin business model in general. And then it seems like if you get product right and you generate some sort of organic community and hype, the marketing kind of figures itself out.

00:32:26:16 - 00:32:47:11

Would love your take on that, Alex. Yeah, I mean, I think the list of brands that you mentioned are kind of like status brands, and the best way to build a status brand is still, physical retail. It's like getting your product in front of the local celebrities. Like, I think that's how Golden Goose really made it big in America, too.

00:32:47:11 - 00:33:07:10

It's like you get into the Rei wholesale accounts in the right cities, and first you have like the rich Tribeca, Upper East Side moms buying it, making all of their friends jealous, like, oh, what is this new brand? Why does she have it? And I don't, and then it spreads to like, the, like the Dallas. And, it's like, I don't know you.

00:33:07:10 - 00:33:33:15

You get it in the right wholesale accounts and the right people buy it, and then they create like local awareness and envy, and then you kind of sprinkle in a little PR to like, reinforce it. But, but that also only works with the right product. Like the reason that golden goose works so well is because it's like crack for the kind of person who is you know, spending $100,000 a year at their local Neiman Marcus and has like a personal shopper.

00:33:33:15 - 00:33:58:11

So it's product, it's positioning, and then it's kind of like it's go to market. Could you build Golden Goose with Facebook ads? Maybe if it was a to like, you could build the $250 sneaker equivalent with Facebook ads. Maybe it doesn't have the same cachet, though. I mean, you see, you see a lot of those businesses in that in that niche Miami Coyote.

00:33:58:11 - 00:34:21:04

So but they're not like common projects. Golden goose and and the scale that those business kind of achieved. Golden goose is a multibillion dollar brand. Now I think they just changed hands pretty recently. And I think just the scale that they've achieved is pretty insane. And they're really selling one thing. I mean, that's the brilliance of it is like they're they're selling one thing with a million ways to iterate on it.

00:34:21:04 - 00:34:43:09

So it's like if you are the fanatic, you're buying like multiple pairs a year for your collection. But if you're not the fanatic, there's going to be something there that appeals to you. Probably. Yeah, it's really true. It's just, you know, you can have really good repurchase mechanisms with that, with that shoe. What's really interesting is to see how their strategy has changed.

00:34:43:15 - 00:35:05:04

Their clothing line is like questionable at best. I don't know if you've seen it, but like I've, I've heard I'm, I'm big into the shoe space. I've tried to start my own shoe company. At a certain point. And, you know, Jackson, I worked on that for a while. It's really tough business. What I heard last was that golden goose is trying to push.

00:35:05:04 - 00:35:23:17

You know, they have leverage because they're so big in their department stores. They're like, you have to buy this amount of clothing product from us to have, you know, to, to to keep our business in and shorter. So we'll see how that kind of pans out over the next couple of years. But I mean, if you just go in the Soho store that their clothing, it's like who's who's wearing this stuff?

00:35:23:18 - 00:35:48:16

Well, it's really hard for a footwear and accessories brand. Like, it's really hard to go from shoes to clothing or for handbags, clothing, because when you think about, like the average consumer, like the one who doesn't have 100 grand spend on clothes a year, you're spending the most on your bag, then your shoes, then everything else. So these brands try to launch their clothing into the same pricing tier as their shoes.

00:35:48:16 - 00:36:11:15

But the for the most part, the shoe customer is not paying that that same price for their clothing. Like if you're the average golden goose shoe buyer, you're probably wearing like head to toe. You're not going to spend $1,000 on a shirt. So it's like the clothing flops because they can't cross-sell it to their existing customer base. It's honestly like really hard to sell clothing at that.

00:36:11:19 - 00:36:34:05

Once you get past the contemporary price point, the market for clothing is just like it becomes so niche, like the Tam is small and then there's so many like little micro segments within the Tam, like the big luxury houses, you know, I'm sure they they don't make money on their clothing for the most part. Yeah, they have just like, you know, certain verticals that are really crushing it.

00:36:34:05 - 00:36:54:22

I think that's a risk, though, for businesses that are scaling, and they're trying to figure out what the next like home run product is going to be touching on product. This is a perfect segue because, Alex, I wanted to chat with you about this. You know, as a CMO level, director of marketing level person coming in and working side by side with these brands, I want to touch on product.

00:36:54:22 - 00:37:15:06

How do you interface with the people developing product? What type of advice or feedback do you find that you're able to give that they'll actually listen to? Do you even touch that? And then also creative and I want to go into how you approach process to create creative and what you think, you know, the frequency of. Net new creative need to be delivered and all that.

00:37:15:09 - 00:37:42:12

But on the product side, first you know, what is your experience there, either good or bad for most? I mean, if you're working with a fashion brand, typically product wants no input from marketing. Right. And I mean, a big thing that I do before I work with any client, especially in the fashion space, is, I go to them and I say, like, this is exactly what we're going to need to do to be successful.

00:37:42:12 - 00:38:07:08

Like, if you're coming to me to launch on meta, we're going to need to borrow from this playbook. And part of that is like shooting your creative on iPhone or like being more like loose with your brand codes and, you know, not not being like having everything locked down and low code and perfect. And if they say like no, that's unacceptable to us, then I'm like, okay, this isn't a good fit.

00:38:07:08 - 00:38:28:03

And then I've actually like walked away from clients because they're not like, I've even been in a relationship with a client where they said they were willing to do it. And then in practice, they either were not willing to or like they weren't willing to prioritize it. So I'm like, okay, I can actually help you, like, let's, you know, go find someone else, maybe who can.

00:38:28:05 - 00:39:07:00

That's part of it, I think. I think what what the brands side or the, the merchandizing planning side does find helpful is when I'm able to introduce like a customer level forecasting perspective. So, you know, basically like studying customer cohort behavior to project how much revenue you're going to get next year from returning customers. And then you have to whatever your goal is, you have to make up the difference with acquisition and sharing insights about what those returning customers buy and, you know, categories and price points like that information can become really valuable and start to influence decisions.

00:39:07:03 - 00:39:31:14

I'm wondering if we can go a little bit deeper there. When you're thinking about forecasting with with your clients, it sounds like you're working backwards, looking at repurchase rates from the existing customer base, and then you're layering on acquisition on top. Can you just talk a little bit more about that? Yeah. And I think this ties back to what we were talking about before with like when you the faster you scale, the least likely those customers are to repeat.

00:39:31:20 - 00:39:56:05

So so what you'll often see is like a brand goes viral. Like if you think about like, the Hillhouse Home nap dress or I can't, I can't remember any other viral products off the top of my head. But like things that really get ingrained into the pop culture conversation and you see your sales like double and triple year over year and year can go down by half or more.

00:39:56:07 - 00:40:17:07

You often like you can't anniversary that growth like you can't assume you're going to go viral again next year, and your sales are going to go are going to double again. And sometimes you can't even assume that your baseline is going to remain flat. It depends on how much staying power that virality has. So that's that's where the forecasting comes in.

00:40:17:13 - 00:40:46:03

I think it's two inside baseball to talk about for forecasting methodology here. But there's Dave I don't know how to pronounce his last name. Dave Russa has a good course on Seattle about how to do customer cohort, forecasting. So it's partially just running the forecast. And then part of it is stepping back and looking at it with a critical eye, like are there macro factors that are going to, change the outcome.

00:40:46:03 - 00:41:09:20

Like what can we realistically expect to happen next year and having that influence, both the top line goals and potentially, you know, what the product team does to achieve those goals or things that the marketing team tries to do to achieve those goals. Do you find most businesses that come to you? Their forecasts are like, for the most part, like educated guesswork?

00:41:09:22 - 00:41:32:08

Most businesses only do, I guess what you call like traditional financial forecasting or like inventory planning, style forecast saying kind of like a top down versus a bottom there. It's like, I never know where the goal comes from. It's like the goal usually comes from the owner of the company. Like we we want to grow 10% this year or, well, we grew 10% last year.

00:41:32:08 - 00:41:51:21

So we should grow we should grow 20% this year. And then it's like, okay, well we have that top line. Like how can we make that happen? How do we break that out across the months of the year based on what happened last year, what inventory do we need to support that level of sales? That's what most companies do from a forecasting perspective.

00:41:51:24 - 00:42:12:07

When companies want I want my input on it. I do the bottoms up where it's like, okay, what can we expect to do from returning customers? What do we need? What do we need to make of an acquisition? What are the trends in our cost of acquisition and our marketing? Like, can we realistically expect cash to go up or down or stay flat?

00:42:12:09 - 00:42:39:09

And then based on all of that information, like developing a plan, like what do we need to do to achieve this? Yeah, we have a very similar process. I think this is why we really enjoy working with 7 to 8 figure brands, because you have more attention from the CEO, CMO, even the board versus some of these, you know, nine, ten figure companies where there's a lot of obscurity and no one really wants to get on the phone.

00:42:39:09 - 00:43:03:12

One thing that we've started to to do with our clients right off the bat is a super forward looking outlook approach where we just do a simple exercise of, okay, what is the ultimate objective of this business as an asset? Are you trying to exit? Are you trying to hold? And that is subject to change of course, but just sort of orienting like what is the ultimate goal of the stakeholders here?

00:43:03:12 - 00:43:25:15

What would be a good outcome in their eyes, and being clear about what that actually means in your industry? What does what do companies in your industry sell for? What is the EBITDA multiple? What does that mean? We need to get to as far as revenue, net profit, etc. and then talk about just just kind of sketch out, okay, here's where the business is at today.

00:43:25:15 - 00:43:51:08

You have one hero product or you have a core collection if you want to be able to exit at nine figures. Here's the playbook that other companies have achieved. Here are some of the ways that we can meander and get to that ultimate goal. And then breaking down the next year, 2 or 3 years as far as financials, as far as revenue, profitability targets, figuring out what bottlenecks are in the way between the present day and hitting those targets.

00:43:51:08 - 00:44:14:21

And then, just as you said, like deciding on the strategy to take from a marketing perspective and a product perspective, to get there, that has been massively helpful. It's such a simple thing that I think, you know, goes overlooked because honestly, the CEO and sometimes the board, they're not even discussing that or they're keeping it super private and back curtained, which just does nobody any good.

00:44:14:22 - 00:44:40:03

So we found that to be really helpful. I want to make sure we talk about creative AI because, Alex, you said you can go a little bit over the hour, which I really appreciate. So I had I had talked with you yesterday about creative and you know, at the top of the the episode, you mentioned that a lot of companies you work with are good at testing hooks and doing multivariate creative testing and they understand the need for that.

00:44:40:03 - 00:44:58:04

I think that's pretty prevalent, at least online, and a lot of people talk about that. But I just love to hear from your experience how you have found success working with brands on a creative level. And let me just tell you where I'm coming from. A lot of times I'll see a creative team or, you know, our own team in-house.

00:44:58:04 - 00:45:21:15

We do, we do, you know, obviously the acquisition strategy and then all of the post-production for creative. And so there may be like seven people or ten people involved in that flywheel and that entire process from strategy to then getting creative on platform and analyzing the data of that strategy or of that of that creative. And so there's a lot of information loss that can occur when you're going through those checkpoints.

00:45:21:15 - 00:45:45:09

And there's a lot of like room for random acts of marketing or random acts of creative without like a clear path to scaling the actual creative or scaling the ad accounts. So I'm just curious how you work with brands on this level. Do you how do you train teams on this or how do you, you know, how have you seen success or failure when it comes to generating new creative?

00:45:45:09 - 00:46:08:08

That actually helps scale out accounts when I work with brands on this, I do it in a creative strategist capacity and sometimes do mediavine as well. But like I'm not shooting UGC or photoshopping stuff. So the first thing that I reach out to them about is like, what are your internal resources? Do you have access to a graphic designer or a video editor?

00:46:08:08 - 00:46:33:02

What kind of assets do you have in your library? How do you shoot new creative? And I want to really work with them on an ongoing basis. Unless, they have, you know, the capabilities they need in-house or sometimes I'll do like, kind of like a creative strategy, deep dive, you know, customer persona work, testing, like basically sketch out what should you be speaking to?

00:46:33:02 - 00:46:55:09

What and how would how would I test it and then give that to them and say like, okay, here's some partners you could work with to like actually execute it. But, if I had to make a list of things that brands need to be successful at first is just having the capabilities to produce, at least, you know, 5 to 20 pieces of creative a month.

00:46:55:09 - 00:47:19:08

And that doesn't mean a studio video. It could literally mean iPhone picture pictures like taking. If you have three product, giving them to three of your employees and telling them, like, okay, go home and like shoot this on your bathroom, like in your medicine cabinet or whatever. So, building that out and then having people on your team who understand and the organic sensibility.

00:47:19:08 - 00:47:41:13

So like, there's a difference between a catalog shoot and a TikTok, and you want to make sure you don't only have to do the TikTok style, but you want to make sure that face is covered. And there's definitely like, an esthetic language there. And some people really get it. Some people can be trained to get it, and some people are just simply disinterested, disinterested in trying.

00:47:41:13 - 00:48:15:15

So making sure that you have that base covered. I could talk about process to know. That's great. I would love to talk about process. I think, you know, you said covering the bases. I find that companies at that stage, even companies that are doing, you know, I can think a few off the top of my head in our, in our portfolio that are doing 30 to 50 million in revenue, that, you know, they haven't really solidified processes for continually beating out fatigue in perpetuity on their evergreen campaigns.

00:48:15:15 - 00:49:01:12

Like a lot of if you're between, you know, seven, eight, you know, I would even say 7 to 9 figures between that range, a lot of your and maybe excluding, you know, fashion brands that have new SKUs every six months. But a lot of companies that have 1 to 3 core product SKUs haven't set up funnels or evergreen creative campaigns with a process associated that is a flywheel of defining new experiments of, hey, here's how we can improve the combination of these metrics, whether it's engagement metrics on platform plus conversion metrics, you know, Roas, whatever it is, defining those experiments, getting new creative produce that aligned with those experiments, and then telling a story with

00:49:01:12 - 00:49:22:07

the data that they're seeing from on platform or software's like Triple Whale or Motion or what have you. And then going back around the flywheel, it's just sort of like a lot of times I see brands make it to a certain point. Things are working on platform. They're seeing, you know, conversions and their markers going up. But then there's like they just stop.

00:49:22:08 - 00:49:43:21

They just run the same stuff for like months and then they wonder why things are tanking and fatigue is setting in. And they then have to kind of double back. And that's that Groundhog's Day effect that I was talking about earlier. So I'd love to talk to you about your process and how you think about sustainable processes for creative, if that, if that makes sense to you.

00:49:44:01 - 00:50:11:15

Yeah, I think part of it is, is almost like when you're managing Facebook, you're like, it's I always equate it to stock trading, which I've never done. But, you're fighting against your lizard brain like the entire time because you're getting so much short term signal. And I think something that's helpful is to just put processes in place to force yourself to do, to force yourself not to succumb to your worst instincts.

00:50:11:18 - 00:50:32:20

So you don't want to be turning ads on and off in the account every day. You don't want to be toggling budgets up and down every day. So. So almost putting yourself on a schedule where it's like we're going to test this many assets every week. We're going to put at least one new asset into well, well, everyone kind of scales differently.

00:50:32:20 - 00:50:59:19

But if not into your like, hyperscale winners campaign into your moderate scale campaign like get at least one new asset into play every week in a meaningful way. Because what I've seen is that sometimes, especially if you have a longer, purchase consideration window or higher price point item, putting a new asset into an asset will bring a new audience into that asset, and they may convert on your winner.

00:50:59:24 - 00:51:24:02

So it will look like a new asset. Isn't getting conversions or isn't performing, but it's getting delivery. And it's like kind of bringing fresh blood into the asset and improving your overall metrics. So I think weighing asset metrics a little bit more heavily than like individual ad metrics. And I mean, the process is, is just forcing yourself to kind of refresh things on a cadence like that, but not overly tweak them.

00:51:24:05 - 00:51:50:16

And then having the creative flywheel in place to to fuel that with new creative. There's also an element of like, sometimes you just have to take big swings. So like doing research and testing something and developing something that's like a complete departure from what you've been doing in the past at least every 2 to 4 weeks, like speaking to a completely different audience or, you know, shooting things in a completely different way.

00:51:50:18 - 00:52:14:18

Yeah. One thing that we've done is there's like so it's it's also like you just said, creative Flywheel. This is a term that we've been using internally every day, just building. That's what we're calling this process. So that's cool. But you know I look at these two processes in parallel. You've got this flywheel, this creative flywheel that's like a circular motion that's creating that cadence and it's building momentum.

00:52:14:18 - 00:52:35:02

And then you've got this linear process that is I look at it mentally as like stages. So you know, you could take a big swing or a little micro swing. But it's you're kind of in that stage one discovering something. You're just you're just sort of throwing a wide net out there to see what works, what's going to land.

00:52:35:02 - 00:53:02:16

And then you start to incrementally optimize, and you bring that idea through as a series of stages that ultimately hopefully gets that idea, that concept, whatever it is, it could be a full fledged campaign or just a creative style to become fully integrated into your program. And then, you know, and that's part of the flywheel as well. And then to your point, every so often you're going back to that stage one to try to really rejuvenate your program overall.

00:53:02:21 - 00:53:24:12

So that's that's really cool. It's good to know sometimes when you're working with clients and you're you're tinkering with these processes in these systems, sometimes you can feel like you're just so insulated. You're like, is this the best way to do this? And so it's cool to just kind of hear that confirmation. And, you know, it seems like we approach things the same way, which is really cool since we just have a little bit of time left.

00:53:24:12 - 00:53:50:24

I just want to end with your take on the industry as a whole. Right now. There's so many people on LinkedIn, on Twitter, there's so many different narratives and topics too. Sure, I'm just curious what you think are some things that are completely, maybe overrated right now that a lot of people are talking about or keep harping on, and what things may be completely underrated where you're like, no one's talking about this, but I'm finding success with this, or I think this is really interesting.

00:53:51:00 - 00:54:22:03

Anything come to mind? I think people should. Well, no, I won't go there. No, you should go there. Get spicy with it. So I think the way e-commerce is now is it's a vehicle for a lot of people to own a $10 million brand less than it's a vehicle for a few people to make $1 billion brand. Like, I really believe to make $1 billion brand, you still need to exist in real life.

00:54:22:03 - 00:54:55:04

And even as you're approaching like the $100 million plus level, of course, there are exceptions to that, but they're mostly in very specific categories in these cases. And I think that's interesting because people are starting to realize that. So a lot of them get rich quick. You know, Twitter thread grifters are kind of fleeing the space. So there's more I think there's been more content from operators lately or just like more high value content in the ecosystem, which is great in terms of, I guess, slept on, slept on tactics.

00:54:55:04 - 00:55:22:21

I think you can never over market after your first purchase at most post-purchase series. I see you're too short and don't have enough emails. And then programmatic direct mail, something. I don't see a lot of brands testing, but the brands that I have worked with that have run tests on it, it always drives a lift. I think speaking with your customers during regular regular customer interviews and then incorporate that feedback into your marketing and your product.

00:55:22:23 - 00:55:46:03

Yeah, those are huge. Those are huge. Alex, thank you so much. I think that was a great those are three great points to end on. Thank you for coming on. This is awesome. And it's great to see you. All right Alex thanks so much. Have a great day. Thanks.