The E-commerce Leader

[00:00:00] Michael: one danger that we shouldn’t get seduced by metric analysis as a substitute for action. There’s gotta be a relationship between the amount of time has been an analysis and the amount of time he been an action
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[00:01:02] Jason: Marketing is a great game of competitive strategy, across many platforms and tools. And in today’s conversation, we’re going to do a hot take from our panel on their favorite metric, involved in marketing and e-commerce and do a deep dive for a few minutes into why they like that metric and really get their point of view on the valuable aspects of doing marketing in support of your e-commerce brands.
[00:01:30] So I’m happy to, just, start the conversation here and have somebody go first. I didn’t preplan this in any way. One of, y’all just jump in with your favorite metric for marketing. Kyle. You want to go first? Okay. Again,
[00:01:45] Kyle: absolutely. My, I would say my favorite metric. For marketing is the CPA or cost per acquisition or cost per action that I’ve found to be the most useful metric when you’re trying to measure, how much is it going to cost you in order to acquire a brand new customer?
[00:02:05] And I think. Ultimately many times our marketing campaigns are built around new customer acquisition. So in order to do that effectively, you need to, first know what is a good break, even CPA for you, and then track that across all of your channels. So you can optimize pro.
[00:02:20] Jason: All right. Love that one, man. Very cool. Cost of acquisition or customer acquisition costs. Is that what the phrase you use customer acquisition costs?
[00:02:28] Kyle: Yeah. Cost per acquisition is one, but it’s basically the same. It’s the same thing. You can interchange those two
[00:02:34] Jason: terms. Yeah.
[00:02:36] Okay, cool. All right. Let’s keep going. Who wants to go next? Michael, were you going to jump. Yeah,
[00:02:41] Michael: happy to jump in. I have lots of favorite marketing metrics. I think my favorite one is conversion rate, which is fairly primitive Sandy one. I think there’s a lot that’s behind it though. First of all, it shows a lot about the health of your product and your listing or product detail page, depending if you’re on Amazon Shopify, et cetera.
[00:02:55] If you have the relationship with price is always interesting. If you raise your prices, the conversion rate, just go down exactly correspondingly, or is there a little bit of a leeway there? In other words, do you have pricing power and that relates back to your strengths is your brand. And also the quality of the messaging is in there as well of your image work and the type of message you’re putting across resonates with consumers.
[00:03:14] You’re trying to approach and how you consumers feel about your product again on Amazon is the most direct place that if you have a review average rating that drops down by, from like 4.5 star average to four star average or. For started 3.5 star. I see. I’ve seen basically having and conversion rates.
[00:03:31] So a lot of stuff show that shows up in the conversion rate. The other reason I love it is because you can work on this without adding to your direct cost structure. So if you work once on a listing and upgrade the images or possibly just the messaging is clearer, you can get a jumping conversion rate that sticks.
[00:03:46] And so there’s a kind of magic about conversion rate optimization. For me, that is so rewarding compared to sweating to get just new traffic.
[00:03:56] Jason: Yeah, I love that one, man. In our CEO smile group a few months back, I guess it was maybe last fall. We did a whole series of, of topics on converting. What I call conversion possibility, frontiers, which is the idea that, a a lot of people get into, let’s say Shopify was a context in which we were talking about it.
[00:04:15] A lot of people get into their Shopify work and they end up with a conversion rate of let’s just say it’s 1.5%. And they get in their mind that sort of, a line that is important and that it’s like only small possible movements, but then other people’s Shopify sites have a conversion rate of 300.
[00:04:32] And other people’s Shopify sites have conversion rate of 8%. One example is our, pixie fares, 18%. Conversion rate because we run a freemium model. And so understanding the different, the range of possible conversion rates and why they change and how they change is so critically important for Shopify.
[00:04:52] We had a client, for example, who was struggling so hard on his conversion rate. It was just horrible, pretty much. It was pretty, pretty bad, no disrespect. And he knew that. He knew it was really bad and he couldn’t get it to change. And then he changed his sites. And it doubled and it was a site theme that was so like problematic.
[00:05:14] And so I love that topic as well. That’s one of my favorites, but it’s not my favorite. That’s not the one I’m going to share today, but, it’s a great one.
[00:05:21] My favorite marketing metric, but I’ll camp on it for a moment. And, and there’s two that go in parallel with, for me. And that is email list growth is the number one metric that I think is so vitally important. For so many reasons. And for people who are blown up in the Amazon world, and they’re all about Amazon velocity, this metric will be like, what now?
[00:05:44] But the underlying, premise of it is a direct to consumer conversation. Grow your own list and the growth of the email list to me, if it just track back. When we started in, on eBay in 2007, they had a newsletter tool that you could do and eBay, and, we had 125. Piled up in our email newsletter.
[00:06:05] And then I really got the conviction that email marketing was so central and you just, you had to build your own list. And we started doing that. And then, we got from 125 names to then a thousand and then 5,000 and 10,000 union. And you go through the whole journey of growth as you start to learn those systems.
[00:06:21] I’m working on switching to, the Klayvio, from MailChimp right now. And I think it’s 237,000 names that we have to migrate over. So the, that metric for me is you could just draw a line and say the growth of your business in proportion to the growth of your email list or one way or the other they’re correlated.
[00:06:40] And, and so I think that’s a huge metric. The other one that I would say is just that, fall low on metric to it is opening. Of your emails because you, that indicates that you’ve got the right people, and you’ve got the right messaging, on your list is a big list is not helpful if it’s not helpful.
[00:06:58] And so you want to have the right people. And so I think those two pieces, if anybody starting out and you got one piece of advice, I think the strong advice would be grow a list. Of interested consumers for whatever niche or industry you’re in and it will serve you well for, years and years to come.
[00:07:17] And so that’s my number one. Okay. Any follow on thoughts and you ricochet action, anybody like anybody else’s or hate anybody else’s or thoughts on.
[00:07:24] Michael: Conversation. I just want to plunge in on a what Chris said, which is very interesting. I think I’m the opposite of you, Chris, that I love analysis, but I think there’s a, there’s an opposite danger to not taking notes of the metrics, which is getting seduced by them and getting caught up in not so much paralysis analysis.
[00:07:41] It’s just like a. The pig in, the proverbial just wallowing in them. And actually not me, I’m focusing on just taking action and obviously you’re a man of huge action you’ve created, is it five, seven figure businesses? I would say that’s an opposite danger that I have seen with my clients actually sometimes early stage clients as well.
[00:07:57] Get wrapped up in that. So that is one danger that we shouldn’t get seduced by metric analysis as a substitute for action. There’s gotta be a relationship between the amount of time has been an analysis and the amount of time he been an action, I would guess. And I certainly tend to err, on the side of analysis, enjoyment and indulgence too much.
[00:08:13] Jason: No doubt.
[00:08:14] Yeah, no, that’s great. Good stuff, man. Kyle, any final thoughts from your
[00:08:18] Kyle: point of view? Yeah, I think I agree with all of what you guys have said. I think it can be very confusing. I don’t know if you’ve ever opened up a Google ads, screen or a Facebook advertising screen, and you’re looking at all these metrics and you’re like, what is happening?
[00:08:31] I don’t even know where to start. And what I think that ends up doing for me is. It drives home the importance between strategy and tactics. Oftentimes there are a lot of metrics that are tactically driven and you don’t need them unless you’re specifically trying to optimize for particular tactic.
[00:08:52] There’s a lot of advertising data you do not ever need to look at unless you are actively average trying to optimize for, for that advertising platform and what you’re doing, what I think you have to do is attach specific. Metrics would there to your marketing or business to bigger term strategic goals.
[00:09:11] And I think those are the most important things. I would also say that the more general you are in your marketing skills, so maybe you are the blogger, the email marketer that, all that you need to keep raising the level of, view, meaning don’t get to drill down into small level metrics.
[00:09:26] You need to stay very high level. You need to be looking at just a couple of key metrics that like Jason mentioned, if you’re doing email marketing, what’s your list. What’s your open rate. If you’re looking at your, if you’re doing content on your site, it’s simple Google analytics reports that you can actually build once you create or pay someone to create a Google analytics report and just have it email you, you don’t even have to open up Google analytics.
[00:09:50] They send you an email PDF and you’re like, oh, this percentage is what I’m looking for. I want my time on site, which is a metric. If you’re blogging or doing content, I want that to be going up. I want more people to be spending more time on the site. And then you attach that metric to a goal of, I want to create more compelling content and I think that’s the methodology we have to get to.
[00:10:10] And then it’s a matter of focus and everything else you ignore and you don’t even look at, and you just keep that down until you built out the strategy and seeing the success that you want to have with it.
[00:10:21] Jason: Yeah. Yeah. No, that’s great advice. Okay. It’s funny that we all have our favorite marketing metrics.
[00:10:25] No, one’s. Net profit. It is, a derivative, metric then, top line sales and then net profit. So to recap, our favorite marketing methods are, or, met metrics are customer acquisition costs, conversion rates. Email list growth and open rates and choose your own adventure, whatever you’re best at the metric that you lean into is the most effective one for you.
[00:10:56] The specific for your own skill sets. A great conversation, guys. This is really fun, who would have known, it’s fun to pick your brain and hear, the various points of views and. Thanks for sharing your insights today. I’m going to wrap it up here, but if you’re listening via replay on the call now, thank you so much for supporting the show.
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