How do you get people to spend $3,000 online for a sofa they’ve never couchsurfed? And how do you increase sales while decreasing cost of customer acquisition?
In this episode of Retention Masterclass Peggy Ann Salz joins me in a chat with Ian Leslie, CMO at Industry West. Industry West supplies modern furniture to the likes of Facebook, Airbnb, and Google … and you! The company has seen consistent 25-30% growth over the past few years, and AOV for repeat visitors is massive. In a pandemic, their online-first retail sales approach is working better than ever.
Personalization leading to retention.
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Personalization is a plus in a pandemic
John Koetsier: How do you get people to spend $3,000 online for a sofa that they’ve never couchsurfed?
Hello and welcome to Retention Masterclass. My name is John Koetsier. Today we’re talking about personalization and customer retention.
Peggy Anne Salz: And I’m Peggy Anne Salz, one of your hosts here on the show, we are co-hosts here, and we’re chatting with Chief Marketing Officer of a modern furniture company that supplies — I have to say, John, to-die-for furniture, right? — for Google, for Facebook, for Airbnb, and maybe for you out there as well, of course, if you want it. It used to be online only, then it went into some stores, and now it’s probably back to online only because that is where we are now.
But either way, it’s a company that is masterfully connecting, collecting those data and metrics and what’s going to feed into powerful campaigns, and that’s why we have them here on the show.
John Koetsier: And you know, I mean I’m pretty familiar, you’re pretty familiar, Peggy, with user acquisition managers or growth marketing managers for maybe gaming companies, or mobile-first companies, and they know their CAC, they know their LTV, they’ve got all the data cold, all the metrics. Same thing maybe with ride-sharing companies or streaming media companies, all those that were born digital, born online, born on mobile, but a furniture company? Not so much.
Peggy Anne Salz: Absolutely. That’s why when I saw it and I thought this is a perfect fit for our show, because we have Industry West CMO, Ian Leslie. He’s focused, as I said, on data, data acquisition, data-driven and growth, and the numbers that he’s sharing are amazing. He shares this incidentally, candidly on his blog, consistently 25-30% growth year on year, over the past year. So that’s amazing in this vertical for sure.
John Koetsier: That is really amazing actually, and a lot of that growth is thanks to retaining good customers, right? And a lot of that retention is thanks to personalization.
Peggy Anne Salz: And that’s why we have him, because it’s retention, it’s personalization, it’s what we want. So let’s get into it. Let’s welcome to Retention Masterclass, Ian Leslie, thank you for being here!
Ian Leslie: Thank you so much. I’m blushing.
Peggy Anne Salz: So, I’m going to deep dive into personalization soon because I’m just going to geek out on that a little bit with you and your amazing blog. But hey, we’re just back from the Memorial Day weekend and I’m looking at all the data out there: Sensor Tower, App Annie, you name it. This is the downtime, this is that magic moment when we were shopping, hopefully. What was it like for you?
Ian Leslie: Yeah, I mean, we saw an incredible Memorial Day weekend year over year. You talked about me being pretty transparent with my data, I did share that on my Twitter account and on LinkedIn as well. What we’ve seen, so year over year for Memorial Day, our website cash revenue was up 36% while our media spend was down 11%. So we saw our CPA down 58% year over year, which was incredible for us anytime, particularly for a holiday weekend, so we were excited about that. I don’t want to kill you with data right now, but definitely we saw, you know, I do have what we were seeing in terms of for May and year to date in terms of new customer acquisition, also in terms of repeat customers where we are there, and we could talk about a little later. But yeah, I mean, Memorial Day was great for us and May has been strong on the e-commerce side, so we’re pretty excited with the way web is performing for us.
John Koetsier: That’s really amazing. I mean your sales are up, your cost of acquisition is down, we’re in this crazy time, right? 2020 has been, let’s say, interesting for most, I mean it’s been dangerous for a lot of people. It’s destroyed a lot of plans, it’s destroyed a lot of jobs, there’s lot of chaos out there in terms of where am I going with my company? We were talking just yesterday with a marketer who was saying, you know, I keep planning and my plans keep getting ripped up. What’s your experience of 2020 been?
Ian Leslie: Yeah, I mean, Memorial Day weekend’s been great, and May has been good, but I should couch that with the fact that it’s been a struggle. I mean, 2020 has obviously been difficult and we’ve had to make some very tough decisions. Even with the strong holiday weekend we’re going to end up behind where we were May 2019. And obviously when we’re behind last year, we’re obviously not going to hit the projected growth that we expected to hit this year. A friend of mine said, you know, being down 10-15% is the new flat. So, I think we’re maybe a little bit better than the new flat, but we’re still going to be behind last year and it’s been tough and we’ve had some challenges. For us, we’re able to pivot rather quickly as we are a bootstrapped company. You know, we are not venture backed, which kind of gets into a whole other kind of conversation, but it does enable our ability to pivot quickly and I think we’ve been able to be successful being e-commerce first. So, whereas a lot of legacy brands in the furniture vertical are kind of scrambling with real estate being closed, we just kind of got back to what we knew, which was e-commerce.
Peggy Anne Salz: I won’t put words in your mouth, Ian, but I would say that maybe pivoting with personalization that might be something going on here, because I’m reading your numbers, you introduced it and then you announced a 15% increase in average order value, an 8.1% increase in revenue since introducing personalized content. Which is fascinating because you don’t think of furniture and then think of content necessarily, but it’s about the presentation, it’s about the personalization. What does that mean for you?
Ian Leslie: Yeah, I mean, I think it took me a while to get sold on personalization. I think personally it was all the rave starting maybe six or seven years ago. I was working in higher ed at the time and on the marketing front in lead generation demand gen for higher ed, and trying to recruit new students to the university I was working for, and I wasn’t quite sold on personalization in that regard. A few years later, and working with Industry West and seeing the opportunity, and for me, it really started with you see off and on an e-commerce site, you know, people who shop for this also shop for that, or because you looked at this you also may be interested in that. And that’s personalization at the most basic level. Whether it’s me and my favorite soccer club, and because I looked at this from them I may be interested in other items for them. I think that’s personalization at the most basic level that I think every good e-commerce company needs to be looking at. And that could be anywhere on the PDPs or the homepage or the PLPs. There’s tons of opportunities for that placement. But then you could look at areas like your search, your onsite search and your partners in terms of onsite search and how you’re personalizing in that respect.
I mean, we have some great personalization partners that we work with. Kaivu is our search partner. Nosto is our onsite personalization. And for us, it’s not as simple as ‘because you looked at this, you also may like that,’ for us, it’s also to segment the trade buyer who may be needing a hundred stools, versus the consumer buyer who’s looking for a dining room set, four stools for their kitchen. So, kind of being able to segment in that regard and show them different things is important, and that’s where I think personalization is huge for us.
Peggy Anne Salz: So it’s huge. Is that also as in priority huge, as in this is fundamental, or is this more around just creating a better experience? Or is it really at the core of what you’re doing Ian?
Ian Leslie: You know, it’s at the core of what we’re doing to our ability to do it. So like I said, we’re not venture backed, we’re bootstrapped, you know, we have a very startup mentality, very startup staff, and I need to utilize services and platforms that are what I like to say are very wash-and-wearable. So Nosto is a bit of a plug and play personalization partner. So I mean, it’s always there. It’s always underlying. It’s always operating. Our ability to kind of continue to leverage it is important for us and expand on it. So I’d say it’s always something we’re thinking about. It’s always there, it’s always working. How we iterate on it I say it’s probably something we don’t do quite as often as I would like, but I mean it’s definitely something we’re trying to iterate on every three or four months for sure.
Peggy Anne Salz: Mm-hmm.
John Koetsier: One of the things that I was wondering about is what have you seen of the impact of personalization on retention? How does it fit with your customer journey? And I spent some time on your website and I love your furniture by the way, amazing stuff. I want some.
Peggy Anne Salz: Me too.
John Koetsier: I don’t know if it ships to Canada, but we’ll have to check that out.
Peggy Anne Salz: John, I have already asked him in prep for this, doesn’t ship to Europe.
John Koetsier: No?
Peggy Anne Salz: No.
John Koetsier: Oh man, sucks for you.
Peggy Anne Salz: Work on that Ian.
John Koetsier: I do think it ships to Canada but I need a broker, it sounds complicated. And anyways, it’s gorgeous stuff, but …
Ian Leslie: Thank you.
John Koetsier: The impact of personalization on retention, right? Your customer journey’s got to be interesting, and I speak as somebody who like probably most of the rest of the world has been spending more time buying stuff online over the past few months. And the first-time experience, the second visit, your first purchaser, you’re a registered user. There’s differences there and differences of personalization that you can give, but also differences in experience. Can you walk us through that a little bit?
Ian Leslie: Yeah, yeah, and I think we’re really just kind of starting to broach the tip of the iceberg in that regard. I mean for us it’s really, we’re really looking at that in terms of an anonymous user to a second-time user experience, we’re kind of looking at what you browsed and tried to push that first and foremost, also potentially offering codes based on that. So if it’s, you know, say you’re looking at lighting and you’ve never purchased lighting before, you may see a lighting-specific promo code where we’re trying to entice you. Additionally, like I said, kind of our big thing is looking at the trades. So if we’re able to identify that you’re a trade user versus a residential user, whether that being via a login or via how you’ve purchased in the past having purchased with a trade account, we will present to you what we’re calling “quick ship items,” even though everything for us ships rather quickly. We’re really, what it is, is items we have in high inventory, high stock volume that we can put before you and say, ‘Okay, we know you’re a trade buyer, we know you may need something in bulk, here are the options you should be looking at.’ So I think it’s really trying to broach that, really using it and trying to use the experience in terms of the consumer side versus the trade side. You know, we do see in terms of the retention, I mean, we do see AOV does increase by something like 70% from that first to second purchase.
John Koetsier: Wow.
Peggy Anne Salz: Wow.
Ian Leslie: And then an additional 30% from second to third purchase. So of course we’re trying to, I mean, on the email side, I think like when you deal with your display advertising, your social advertising, your email drip campaigns, I mean that personalization in terms of the flow there is pretty easy, right? Like, you know your abandoned cart, your re-engagement after 90 days, all that is pretty boilerplate stuff. I mean, I think to your point, the personalization on the website side is a little bit more difficult. It’s even more difficult for us because about 40% of our customer base is actually transacting online, whereas because furniture is a bit of an old school vertical, the remaining kind of trade focus is still transacting through our reps via email or over the phone. So it’s harder to kind of segment them and pull that data out of the CRM which is all things we’re working on. And I think you know that experience, specifically on the advertising side, as we’re able to churn out segments based on when was the last time they purchased, what did they purchase, what’s on their quote, and how do we show them different iterations of the site, or different display ads based on that is really what we’re looking towards next.
Peggy Anne Salz: I just want to be clear about that number. Did I hear seventy Ian?
Ian Leslie: From first to second, yes.
John Koetsier: That’s astounding.
Peggy Anne Salz: That’s huge.
Ian Leslie: As you see a lot of what it is, is our trade clients will buy a sample often and unbeknownst to us that they will come in they’ll buy one chair, they’ll show it to their client, they’ll like it, and they’ll come back online and buy 20 of them. Yeah, so if we can get that trade client to return it’s really important for us.
Peggy Anne Salz: Yeah, and that’s also important with the segmentation, but you know, it’s also about the funnel, and maybe it’s that point here precisely, that it’s not so much a funnel as it is some sort of loop that you’re building, because it’s a high consideration purchase and you’re engaging with me. What are you doing to nudge, to move me through?
Ian Leslie: Yeah. I mean, I think we generally see it as a 90-day consideration is what we look at. And so I think it’s everything across from the emails they’re receiving, the retargeting and not just simply hitting them over the head with the same product over and over and over, but retargeting them with even UGC content where it’s reviews that we’ve received, or blog content just to connect with the buyer a little bit more. Just trying to be creative with the content we have and showing them more of who we are. So yeah, I think you’re completely right, it’s continuing to nudge them through the funnel and getting them in through that first comfort level or getting them comfortable with us. And then of course, we’re asking for reviews after, so we’re taking that feedback and then if it’s positive we’re replying, if it’s negative we’re trying to fix it. So it’s a constant conversation for sure.
Peggy Anne Salz: So I want to understand a little bit about those triggers there, because yes, it is high consideration, but you’re saying depending on what I’m doing, you’re segmenting me, you’re putting me into different buckets, you’re messaging me probably, differently. I’d like to understand how you architect that because you can’t obviously have a different journey for every customer, right? But you do have to have sort of overall pathways that you’re thinking about which are also very fluid in these times as well.
Ian Leslie: Sure [traffic noise] … sorry.
Peggy Anne Salz: Is this an app, that was like got to be something here?
John Koetsier: We should mention that Ian is sheltering in place or visiting in Florida, so those might not be his diplomas on the back of the wall there, but …
Ian Leslie: This is my father’s office.
Peggy Anne Salz: Got it.
Ian Leslie: Sheltering, yes. But yeah, I mean it’s funny, you know we talked before this and we talked about some of the best practice in terms of how many segments to set up. I mean I am a believer, if you can create infinite segments of one, that is the ultimate goal, right? I mean, you want to get as granular as possible, but of course that’s impossible, so I think we utilize the tools we have. You know, we were able to build tons of segments on via Nosto to personalize what categories they’re looking at, if they hit the checkout page, how much in their cart, all those sorts of things. And then we could put those into different work or different comp flows via our email partner. I’d say of course we have confluence for when you create a trade account, when you create pop, when you submit your email via the modal, and when you create a consumer side account. So I think we actually probably do have more comp flows than the average e-commerce site, but even with that we’re probably woefully short in that regard because you know it’s difficult to create confluence for everybody. You can’t have infinite funnels
John Koetsier: Everybody wants that.
Ian Leslie: Yeah. Right, right. Yeah. Infinite segments of one, it’s difficult to achieve.
John Koetsier: It is difficult to achieve. Go ahead, Peggy.
Peggy Anne Salz: I had one more question because we’re in here to the ‘who’ of the audience and the triggers, you know, and the data will give us the who, right? The data will also give us the ‘when’ and the ‘where,’ so we’re pretty good on that. But also that what is so important, because if it’s something that really engages me, really appeals to me, is contextually relevant, then I will respond. So recommendations in the scheme of things, what role do they play, or how are you approaching the recommendations?
Ian Leslie: Recommendations are huge.
Peggy Anne Salz: Uh huh.
Ian Leslie: I think we see conversion rates go infinitely higher when they engage with a recommendation. Now what’s interesting is AOV actually is a little lower. So that’s something we’re constantly trying to nudge is how are we showing products that they’ll convert, but it’ll help raise AOV. But yeah, I mean our recommendation partner, which is also a personalization partner Nasto, when we would get those metrics constantly and we see consistent lift with someone who is engaging with a recommendation. I mean, I think the ‘what’ is critical of course and that’s the key to personalization is showing the correct what, of course. And I also think, you know, you talked about the ‘who’ and data, or the ‘where’ rather, data presenting us with the where, but I think for us, not selling t-shirts, it makes no sense to kind of go nationwide because we’re not as likely to sell in critical mass to Poughkeepsie as we are to Manhattan.
Peggy Anne Salz: Okay, yeah.
Ian Leslie: So I think it’s important for us with relatively limited means in our media spend to really focus on where the proper geo. So I mean, that’s a part of what we do as well. And even personalizing our ads to an extent per that geo, especially having the brick and mortar in Soho and trying to drive people to the location. So I mean, we hyper focus our ad spend and even some promotional, you know, some of the personalization side and promotions around design events, or furniture events, or different events in the major metros in the country to try to drive business. Because, I mean an overwhelming majority of our sales do come from those major metros.
John Koetsier: Let’s dig into that a little bit, because you said a little earlier that especially over the past weekend your cost of customer acquisition went way down. I think you mentioned 38%, I could be wrong on that particular stat, but …
Ian Leslie: Yeah, 58%.
John Koetsier: 58%!
Peggy Anne Salz: Wow.
John Koetsier: Your sales went up and your cost of acquisition went down. I mean, you’ve got a high-end product. Typically that’s linked to a high cost of customer acquisition. Is that, I guess part A, is that generally true for you? But part B is, what do you attribute the reduction recently to?
Ian Leslie: Yeah, I mean, I have to give a lot of credit to our media partner. So we work with a great media partner out of Boston called Gupta Media, and I think they’ve done an amazing job for us. I mean, just in terms of continually trying to optimize our campaigns, whether it’s across social, or display retargeting, or Google. And I think what’s interesting is, but I don’t know how many others you talked to or really kind of communicate this, but we’ve divested from Google immensely over the past year. And our spend is overwhelmingly on the social channels, some display, third-party display and display retargeting, some display retargeting platforms, and then working with some third party partners within the design industry.
But I mean, I think a lot of it goes to our media partner. A lot of it goes to, I think, how we’re continuously, you know, I think the product mix. I do think we are in a time where people are, you know, I saw on Twitter someone said to me, actually just this morning, that he’s found his budget in terms of what he’s spending monthly hasn’t changed, it’s just what he’s spending it on. So he’s not spending it to go out to eat or kind of go see a live event, we know he may be spending it on buying a new lounge chair. So I think we are striking a chord in terms of the home space and we’re in a time where people are trying to update their home, and we’re definitely seeing an uptick on the consumer side for us. What we’re not seeing is an uptick on the trade side and hopefully that will, but yeah, I mean, so …
John Koetsier: And that makes tons of sense, right? Because those showrooms have been closed.
Ian Leslie: Sure.
John Koetsier: Or they’re reduced in capacity, right? And people are spending more time home, so they want to improve that home environment. That makes a ton of sense. I have to ask this question and I hope it’s at the right time here, because I looked at your site as I mentioned twice now, sorry, and there’s something that I would love to buy, and I would jump at that because I take risks. My wife is not a risk taker and she would say, ‘You know what? I want to see it, I want to touch it, I want to sit in it, I want to lay in it. I want to feel it before I order that $3,000 sofa.’ Talk to me about how you overcome that barrier to sales.
Ian Leslie: Yeah. I mean, I don’t think it’s easy. I think it takes a special type of shopper for sure to take that risk. We try to connect with the buyer as much as we can, whether it’s over email, or phone, or chat, to reassure them, to be a voice behind the product. So I think we fill a niche that Amazon can never fill in terms of selling this level, our quality of a furniture product where Amazon will never have the personalization. And by personalization, I mean actual people who will be able to support having the conversation. I think it’s very important to have a real conversation. I mean, in terms of logistically and brass tacks, we do offer a pretty robust swatch program. We do offer, and that includes like a lot of our leather, a lot of our fabrics and then just the color swatches. We do offer samples at a discount if you do need, you know, if you’re looking for six chairs for your dining room, you want to buy the first one as a sample, we’ll give a good discount and then continue the discount through the full order.
But I mean, I think it’s difficult, which is why we were looking at showrooms, which is why we opened Soho and then why we were pre-pandemic we were looking at California, because we have critical mass of people there who would email in, or chat in, or call in, and say, ‘Hey, we’ve got to open a restaurant and I’m interested in this bar stool but I want to sit in it.’ Or we had someone on the 18th floor of a Manhattan condo who said, ‘Hey, I love this sofa but I want to sit in it.’ But not for nothing, we have 4,500 SKU’s and we don’t keep 4,500 skews in an 1,800 square foot showroom. So there’s going to be, always going to be stuff that people can’t feel and touch.
I mean, I think what goes a long way for us is our product photography. We do all of our photography in-house and always have. And it’s just such a high priority for us and I think plays huge into the comfort level people have with the product, because it’s just product on white and we just want to show it to you. It’s, we’re going to show it to you from a dozen different angles and really kind of try to gain your trust and a comfort level via that. But, you know, there’s a lot people, it’s a big step. It’s a big step and at the end of the day, we have a very small market share still, and people don’t know us from Godot. And I think it’s a big part to gain people’s trust for sure.
Peggy Anne Salz: So that’s exactly it, and that’s why I want to pick up on another point you made, Ian. I mean divesting from Google, that is something that not a lot of companies would do or risk doing now. And you’re saying, well, we’re not well known, but you know, you do have a presence.
Ian Leslie: Sure.
Peggy Anne Salz: There is something about you and we’ll get to brand a little bit later, you know. But first of all, that’s quite a decision. I’d love to know what led up to it, but I’d also like to understand then how do you engage in re-engage because you’re doing it over social. I would assume you have to weave some CRM in there to get it right to get me again. Right? So tell me a little bit about that part of the equation.
Ian Leslie: Yeah, I mean I think we just weren’t seeing the returns, particularly on display. And I think it really that was it, was that just display wasn’t generating the returns for us, whereas Instagram, Facebook, Pinterest, and then, you know, we use Criteo for our retargeting. It was, and of course retargeting on social. I mean, we are seeing those returns. We do a fair amount of branded search still on Google but in terms of having, I think for us it’s like, is really there value to competing with the big boys, like Restoration Hardware. Like whether it’s above us or below us in terms of price point, in terms of bidding on office chairs, or bidding on living room furniture, or bidding on whatever it is, and we just weren’t seeing that. And then particularly, I think what we went through with the pandemic and which drove CPMs to an all-time low and just trying to really get such a larger audience share on social media spend was huge.
So I mean, I think then to your point in terms of how are we re-engaging, I’m going to think yeah CRM to deliver lists into social and to kind of, whether we’re targeting as a trade customer and we’re targeting other consumer side, abandoned cart side, or it’s just an intro like they gave us their email via the modal definitely driving that to our digital media partners who are segmenting based on that. And then also just top of funnel, bottom funnel, you know, at the most basic level of not even abandoned cart, but just prospecting versus return visitors and that side. Yeah, I mean, I think Google’s interesting, and I think Google’s, I think we’ve all been thrown for a loop also as they’ve opened up the product listings for free. And so I think it’s an interesting time in terms of Google, and I think if you’re not, we’re at a time where if you’re not interested in video either, Google’s not as willing to work with you.
I think they’re really pushing video as a product and I just don’t know that YouTube is the right channel for us, I’ve not been sold on that yet. So, I mean we are looking at over the top and putting pieces together for that. Which of course we could utilize, you know, on YouTube, pre-roll sort of stuff. But yeah, I mean, it’s an interesting time.
John Koetsier: It’s super interesting that you mentioned YouTube because I was going to jump all over that and there’s a reason for this, because, hey, guess what? My gym’s closed and so I’ve been buying gym equipment, little bits and pieces here or there. And there’s some pieces, and I go to this retailer who is clearly a bricks and mortar retailer, but you know, okay fine, we got a website and yeah, you can order off of it. And I can see like the standard given-by-the-manufacturer description there and you know for this piece of equipment I actually want a video. I want to see how it works. I want to see how it functions. I want to see its relative size compared to an actual person or a room, other things like that. So maybe I’m wrong and you will know what’s better for your business than I will, obviously, but when I was browsing your site, I wanted to see some video. I wanted to see some video of somebody sitting in a chair or in a sofa. I wanted to see some video around it and other things like that. And so I thought, hey, that might be an interesting thing. So again, you … go ahead.
Ian Leslie: No, I don’t think that’s wrong. I think, I guess we could segment video in two ways in terms of onsite content, which I think, yes, in a perfect world, I would love every piece to have a 360° kind of panoramic of the piece and then the piece in context, in an apartment in Toronto, you know, showing the sofa in context in Toronto. But it kind of goes back to priorities and as a bootstrapped company and what you can really do. I mean, I was thinking video more in terms of people looking at Saturdays, catching up on Saturday’s SNL skits on YouTube, are they really going to care to see the 30-second commercial from me ahead of that skit?
John Koetsier: I couldn’t agree more, that’s exactly the way I was thinking of it.
Ian Leslie: Yeah, but in terms of content, I mean, I think of course like more content the better. And I completely agree, and we’re looking at different ways to kind of continue to supplement the content online. But yeah, I think I don’t disagree at all. Yeah.
John Koetsier: Excellent, excellent. I always love it when somebody says they don’t disagree. I think it means that they agree with me, but I’m not a hundred percent certain, I’m just bugging you.
Peggy Anne Salz: Next week you’re going to see videos on his website.
Ian Leslie: Exactly.
Peggy Anne Salz: Just a couple of pieces, that one couch he wants, right?
John Koetsier: Invoice is in the mail. You mentioned Coronavirus, you mentioned I guess a few minutes ago now, and you mentioned that it’s caused some changes in your sales velocity, your cycle. We’ve been doing a New Rules of Marketing Engagement series, Peggy and I, with a client, CleverTap, which also sponsors this podcast by the way. And we’ve been talking to marketers all over the world about what’s changed, what’s changed in their messaging, what’s changed in their business model, what are they pivoting into? Can you talk to us a little bit about how you’ve adapted your marketing, your messaging, your retention strategy, those sorts of things?
Ian Leslie: Yeah, of course. I think to your point just a second ago, I mean, not video per se, but we are looking at how do we connect with the homeowner more as opposed to showing it in a commercial setting. So trade really has been our bread and butter, we’re probably about 70% trade in terms of our sales and whereas e-comm will keep the lights open and keep us in business, it’s trade that’s going to make us profitable at the end of the month. So, I mean, I think we’ve really focused on trade products and focused on talking to the trade and focused on the trade’s needs and what we’ve seen with Coronavirus is the trade obviously hasn’t been able to buy. Who knows when people are going to go back into their offices, if they even are going to. Suddenly to the trade takes on a new tone and a new angle because the trade is now working at home, and then we have consumer side that seems to still be willing to spend. Shockingly, like I have to be honest, like in the throws of the unemployment numbers first coming out a month ago, I was shocked to see that weekends were still going well. So I mean I think the work-from-home aspect and try to pivot more on that and try to show more outside scenes to the extent of our ability, try to show … creating a narrative a bit more on how to change your space, trying to just talk more to the consumer side.
And then also when people are buying I think we have seen people home from work, distracted, or home from the office rather, distracted by whatever it may be, you know, maybe homeschooling, maybe, who knows what, but we have definitely seen over the past six weeks more our ROAS late in the day to overnight and on the weekends has definitely shifted upward. So as in the past, we saw strong Monday/Tuesday/Thursday/Friday. Wednesday was typically light, and Saturday/Sunday was typically average. We are now seeing Monday through Friday is typically good, but Saturday and Sunday are gangbusters. And I think it’s, you know, okay, I don’t have to teach the kids Saturday/Sunday, homeschool is over and I have a minute to shop, and maybe come back to the site that I saw on Tuesday. And so I think that’s been a surprise. So, I think we’re shifting our day parting has shifted a bit. But then to your question in terms of the messaging, yeah, I think it’s okay we have to, we need more home editorial shoots, we need to make it warmer, we need to even considering our product mix. Maybe we shouldn’t be bringing in 500 stools that are intended for commercial use, and maybe looking for softer more comfortable kind of home pieces.
Peggy Anne Salz: That’s fascinating because you’re talking about the assortment, matching the messaging. You’ve got great detail around what are the gangbuster times for shopping, for example. You know, and you put that all together and you say, okay, so if they’re doing more on the weekend then maybe that’s more of a personal time, maybe that’s more of a messaging time as opposed to emails in the week. I’d just like to understand a little bit about that because you have an interesting situation as well. You’re online, you’re physical, okay, we’ll leave that out for the moment, we’re mobile first most of us, right? So how does that all sort of come together? You have to come up with messages that bridge the gaps and blend our downtime and our sort of our uptime, if you will, our non-shopping time.
Ian Leslie: Yeah. It’s difficult. It’s I guess, like who even knows when shopping times are anymore.
Peggy Anne Salz: I don’t think they ever stop actually, but I’m female so I’m going to say that.
Ian Leslie: When I was in higher ed, I always complained like, why are we sending emails to high school students at 11:30 in the morning? Like, we should be sending them at three o’clock in the morning when they’re sitting in bed texting their friends. So, I mean, I think it’s interesting. I don’t know that our messaging changes around that but more our availabilities. So we’ve made sure to be, we’re an East Coast company, generally our entire staff is East Coast, but we’ve made sure to staff for West Coast hours more so now than ever. We’ve made sure to open up, made sure we have chat reps online through the weekend pretty much for business hours through the weekend, which has been huge.
I mean the chat that the revenue again via chat as the primary first touch point has been incredible, particularly on the weekends. So I think it’s the channels, and it’s just continuing to be there for the customer to the extent that we can, just being there when they’re ready to talk.
John Koetsier: Super interesting. I’m going to ask, and I do this on our New Rules thing as well, it’s kind of a goody bag right near the end of a show. Top tips, right? Takeaways for audience. If you had two top tips for our audience on how to be retention experts, and I’m going to say probably in retail because that’s where you are right now, what would those be?
Ian Leslie: Yeah, I think, first of all it’s know your customer base. So whether that’s the demographic, the geography, it’s critical just to know who your customer is as the starting point. I think this way you’re to be hyper focused on who that customer is. I think there’s arguments, people make arguments for kind of a buckshot approach to display advertising and Facebook advertising, and I’m not for that. I think being hypersegmented in terms of who your audience is, is critical. And then I think just do the basics right. I mean, and I think so many e-comm brands, you know, even if it’s as simple as just make sure your conversion pixels are all set up properly, like spend the time and the money to get your conversion pixel set up properly. If you’re using a CRM, use the data, segment the data, and have a partner who you can provide those lists to, who will create the proper segments with whatever channel you’re using. I mean, I think there’s so much data that we can’t even process and that so many of the networks are processing on our behalf, but if we don’t have the very basic tech functionality right on our end they can’t do that for us. So, I mean, I think just take the time and and find particularly working on the e-comm side, take the time to find partners who, whether it’s on your development side or on your media company side, they’re just making sure you’re set up to best practice. I think that goes a long way to aiding, making sure you have great transparency throughout the entire cycle.
Peggy Anne Salz: I mean that’s great. Those are great tips that makes me very effective. What about emotive? You know, I mean, these are beautiful pieces, right?
Ian Leslie: Yeah.
Peggy Anne Salz: And we want to be thinking about messaging that you have a strong brand. You want to have a strong story, and you do, you have a lot of UGC, things are coming across to make it like that. But what is it that’s going to enable me to be a brand fan in what you’re doing in your messaging and your approach? Because at the end of the day it’s got to be about brand love. I’ve got to love what I see, love that experience, and engage.
Ian Leslie: Yeah, yeah. I mean, I think that’s incredibly true as well. So I think a lot of that goes with where you’re featured, a lot of it goes with the partners you work with. We are a, not an inspirational brand, but you know, a brand that people are trying to strive toward being part of, aspirational brand, rather. So I think that’s important. So showing that, showing I’m not hiding from the fact that we’re a quality product, not hiding from the fact that it’s a part of a lifestyle that you want to be a part of. But then I think it’s important to show what’s behind the brands. So to show our founder story, to show some of the people who work for us, show how we operate every day. I think it’s good to be polished, but I don’t think you have to be too polished and I think it’s something that people want to be part of. You know, I think the whole community aspect is a little bit overblown. I think there’s a lot of venture-backed companies out there who push community, community, community and don’t make a dime. I think what’s important is to back your product and just say ‘yes’ to the customer. I mean at the end of the day we want to make everything right with the customer. And I think that’s why people want to be part of us, and why before I started, and before I was able to take on rebuilding our email platforms, and rebuilding SEM and SEO, and display marketing, before that we were growing because we … people, word of mouth, knew that we would get the order right and if we didn’t get the order right, we would make it right. And I think that’s so important to who we are as a brand and what we do.
John Koetsier: I love that part about not being too polished, because I often feel that way. Sometimes the simplest thing where you’ve got basically your phone and you’re recording a video or a just heartfelt blog post. If it feels too polished it feels contrived.
Ian Leslie: True.
John Koetsier: If it’s kind of raw, it feels more authentic.
Ian Leslie: Sure, yeah.
Peggy Anne Salz: Absolutely more real. And I love that part about just ‘yes’ to the customer as your customer. I’ll go along with that.
Ian Leslie: Yeah. Sure, sure.
Peggy Anne Salz: Absolutely. So I think we have quite a lot here to work on.
John Koetsier: I think we do.
Peggy Anne Salz: Absolutely, and some amazing numbers. And Ian, shameless plug here because I found it … Ian, your blog which I hope you will continue, you started that in April.
Ian Leslie: Yeah.
Peggy Anne Salz: So you’re new to Medium and that’s where I would imagine you’re still being as candid as you are right now with us.
Ian Leslie: Yeah. Yeah. So I mean, I am on Medium @irleslie and I post a lot of numbers and stats on my Twitter as well, which is @irleslie. And yeah, I like to hear from different e-commerce marketers and I think there’s a good group out there that are willing to share. I think it’s silly to hide what you’re doing and how you’re doing it because there’s so many ways to see what everyone’s tech stack is and what everyone is doing. So, I think we can all learn from each other and I think it’s an important time to be transparent and to see how we’re all kind of working through this together.
Peggy Anne Salz: Absolutely Ian, that’s why you were such a perfect fit for us today on Retention Masterclass. Seriously, great to have you here. Thanks for joining.
John Koetsier: Thank you.
Ian Leslie: Yeah, thank you guys. I appreciate it. And Canada for sure, and we will work on Germany.
Peggy Anne Salz: I love this, we have pull now, okay.
John Koetsier: Maybe I’ll ship it to my house, Peggy, then I’ll ship it to your house.
Peggy Anne Salz: You’re on.
John Koetsier: Go around the world a couple of times in between, and we’ll own the shipping company before it comes, so …
Ian Leslie: My boys and I are big Germans soccer fans, so we’ll work something out.
Peggy Anne Salz: Okay.
John Koetsier: It’s been a real pleasure to have you on Retention Masterclass. And for everybody else who’s watching or maybe listening later on, whatever platform you’re on, please like, share, comment, all the above. If you love this podcast, hey, rate it, review it, that’d be a massive help.
Peggy Anne Salz: And until next time, as always, keep well, stay safe. This is Peggy Anne Saltz here at Retention Masterclass.
John Koetsier: And this is John Koetsier. Have a great day!
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