Building Community, Leveraging Novelty & Creating Urgency with Kurt Elster

Keith:                                 Hello, and welcome back to Data Beats Opinion. I am Keith from SegMetrics and my guest today is Kurt Elster from Ethercycle. Hello. Good to bring you in here.

Kurt Elster:                       My pleasure. Happy to be here.

Keith:                                 Yeah.

Kurt Elster:                       Why am I here?

Keith:                                 I have no idea at this point. We’ve known each other a while now. So you host The Unofficial Shopify Podcast, which I think is the number one Shopify podcast?

Kurt Elster:                       Yeah, it depends. According to me it is.

Keith:                                 Okay. That’s all we need, that’s all we need.

Kurt Elster:                       It’s got over a million, downloads and it’s frequently top 50 in the entrepreneurship category on iTunes. So, that’s pretty good.

Keith:                                 That is solid numbers, and a really good podcast.

Kurt Elster:                       Thank you, I appreciate it.

Keith:                                 Yeah. So we’ve known each other a while. You focus mainly, of course named on the podcast, on ecommerce people, specifically with Shopify. You’ve had some really cool clients over the years. I know the big one that always sticks out to me is Jay Leno’s Garage, which is awesome.

Kurt Elster:                       Hell yeah.

Keith:                                 And I get to see a lot of pictures of that on Twitter, which is always fun. So, I want to say thanks for joining us and taking us through some of the ecommerce and just strategy stuff, especially now that we’re winding down from Black Friday, which was I think, God, three weeks ago? I don’t even remember anymore. It feels like months, years.

Kurt Elster:                       Yes. So what I did, I got smart this year. Listen, everybody’s busy, all my clients, all the merchants are busy during Black Friday doing customer support, fulfilling orders, et cetera. So, the day before Thanksgiving, we left for eight days to Disney World. And I didn’t bring my laptop, I just went, and it was fantastic to not, though it was kind of cool, though, for Black Friday, you know, I don’t want to miss out entirely on this experience. I went to Disney Springs. I don’t know if you’re familiar with this.

Keith:                                 No, I don’t know Disney Springs.

Kurt Elster:                       Disney owns a giant, amazing, beautiful outdoor mall. So, it’s like Disney does it up, everything, they plus it, as they say. If you want the best mall experience possible, Disney Springs is it.

Keith:                                 It’s the Disney version of a shopping mall, essentially.

Kurt Elster:                       Yes, yeah.

Keith:                                 That’s awesome.

Kurt Elster:                       And it was packed. It was unreal the number of people. The single craziest thing I saw was, you know those spin-to-win popups that plagued websites for the last two years?

Keith:                                 Mm-hmm (affirmative).

Kurt Elster:                       And they’re finally starting to die. They’re starting to lose their effectiveness. I saw a billboard, I wish I’d taken a picture of this goddamn thing, or I did take a picture of it, I wish I’d taken a picture of the whole setup, billboard outside the store. It is literally, they clearly took the spin-to-win popup that you see that slides out and made a sign that was like, “Spin to win!” But it was the same colors, the same layout. It was clearly, the inspiration was the popup. So this is like art imitating life. It was crazy. And then I look in the store and sure enough, they’ve got a giant spinner in the dead center of the store.

Keith:                                 And it’s a physical one, yeah?

Kurt Elster:                       Yeah. And people are spinning it, and then you won, it was like, “X% off your purchase,” “X% off your next purchase,” “Free Gift.” I mean it was cool. And there was a line of people to do it. So, I thought that was interesting that it went from like, things have gone full circle where now brick and mortar stores.

Keith:                                 Right. I mean that was a physical thing. You go to the store and they’d have a raffle or something and then they decide, “Oh, let’s take it online.” And now it’s back into the store since it’s not effective online anymore.

Kurt Elster:                       Yeah, it was the craziest thing.

Keith:                                 Do you remember the “punch the monkey” ads way back?

Kurt Elster:                       Oh, yeah, punch the monkey.

Keith:                                 Where it’s like, “punch the monkey”-

Kurt Elster:                       Shock the monkey.

Keith:                                 Shock the monkey, all those things. I’m waiting for the those things to make a comeback.

Kurt Elster:                       We brought this up at our own podcast and then it like, went down quite the rabbit hole researching it. The thing that killed those ads was the death of Flash.

Keith:                                 Yeah. 100%.

Kurt Elster:                       Once that happened, it was over. We didn’t have those fun, absurd ads anymore.

Keith:                                 Yeah. Well, and now, even a lot of the ad platforms will not even allow the HTML or the SBG version of those because you can reproduce those, but none of the ad platforms will really allow us to put on animated ads anymore which is kind of a, I mean, simple ones yeah, but not the fully interactive ones, which is sad. Like, I think those would be fun again.

Kurt Elster:                       Oh, absolutely. I wish the internet were more fun. Given the tools we have now, sometimes I just want things to be novel and fun and ridiculous.

Keith:                                 And that’s one thing that I think, especially if we’re talking about ads that people don’t really get a sense of is that the novelty is what sells the ad. They’re like, “Oh, this super pink ad” or, “This ad that’s drawn with Crayon is converting. People must love ads that are drawn with Crayons,” like, no, it’s that it stands out. Right? You’re doing something different that is enticing to the user and that’s why you’re getting that good return on ad spend and that good click-through rate.

Kurt Elster:                       I think you’ve touched on something more important and less reported on than it should be. I have been doing this 10 years. This is the first year the importance and impact of novelty really, finally sunk in. And there are a few things that did it. So, we do Facebook ads, Facebook, Instagram ads. So we realized our most successful of those ads were for the clients that provided the most content and most consistently. So, for a lot of clients it’s like you know, it’s like pulling teeth, and then you know, we get a little bit, and then we have to make the ads ourselves. And really what we ended up doing, and here’s a decent hack is, we would split the audience up and have a couple of ad sets and then you just round robin it, so that way people see different ads. But the ones who really excelled were the people who, every week, every two weeks, once a month, they would drop, “Hey, here’s new fresh media content, ads, and promos for you.” And then we would put that into effect. That keeps it fresh, that keeps it novel, that keeps it working.

Kurt Elster:                       And so that was an interesting takeaway in general. The brands that did a lot, and I’ve just jumped into “Things I Learned in 2019.”

Keith:                                 Right.

Kurt Elster:                       The brands that have done a lot of new product launches, those did the best. We had one brand that did 97%, so here’s some Black Friday stats, they had a 97% revenue increase. This is a seven-figure brand. 97% revenue increase from-

Keith:                                 During Black Friday?

Kurt Elster:                       November 4th to December 4th is the date range I pulled the data for. 97% better revenue, so it doubled, on seven-figures in sales with only increasing traffic 17%. The brands that engage with their customers, that treat their customers as a community, brands that did that performed the best. But the ones that could do that and combine that with like a lot of media creation and combine that with new products, well that’s where it worked really well. And those two things are novelty, right?

Keith:                                 Right.

Kurt Elster:                       Like, new product launches are novelty. I had someone on Twitter go, “When are we finally going to stop just using, ‘new, new, new’ as subject lines?” I said, “Never. The human bra craves novelty.”

Keith:                                 Because it works, right.

Kurt Elster:                       Yeah. So, those new product launches, phenomenal. New creative is more important than we realize. At this point I’m just doing a monologue.

Keith:                                 But I think it’s true. I think that there’s also-

Kurt Elster:                       Go ahead.

Keith:                                 Oh, no, no, go ahead, go ahead. Where were you going?

Kurt Elster:                       I was going to say, the takeaway there, my point is #1, novelty is never going away. So, if you’re looking for like, “What’s the conversion lever? What’s the revenue lever? What’s the thing I could do?” I think it’s you always have to go back to human behavior and human psychology. So, it’s like, all right, instead of treating people like a customer or a brand, take that to the next level and build a community out of it.

Keith:                                 Right.

Kurt Elster:                       And we all love novelty, and we are affected by scarcity, which creates urgency. So, in terms of Black Friday, we don’t always want to have to be discounting. I mean that’s like traditionally what we do on Black Friday. But our brands that performed the best, a few were just like, “All right, here’s site-wide discounts,” and they did well but the ones that really excelled did, “Hey, here’s a limited edition product.” So, either they did product launches, in addition to their sales on Black Friday, or it was free gift with purchase but the gift was an exclusive.

Kurt Elster:                       So, I’ll give you an example from Hoonigan, I think they did this so well. Hoonigan.com, it’s this automotive lifestyle brand, skews younger, and the cars that they create in their garage, they are part of the talent. They are as important as the YouTube hosts, the talent themselves. And so I don’t know how many, I think it was 8 or 10, they did, you know, “8 Days of Christmas.” And each day, if you placed an order on the site, you got that day’s free lapel pin and the lapel pin was one of those cars.

Keith:                                 Oh, that’s cool.

Kurt Elster:                       But it was an exclusive. You had to make an order to get that pin. And they didn’t tell you what. They said, “Hey,” they teased it out where you just saw the silhouette, where they were like, “There’s going to be a pin each day, and it’s going to be exclusive for that day.”

Keith:                                 So you’ve got to check every single day? [crosstalk 00:10:07] And you have to make that decision of, “Hey, am I going to get the pin for today? Or am I going to get the pin for tomorrow?” Right. Maybe there’s a better one? Man, that’s smart.

Kurt Elster:                       So, they knew what cars were important to the community because they listened and they built that community, and they’re leveraging that novelty but also creating urgency because there’s that exclusivity where there’s a 24-hour period in which you can get this pin. That’s I think is a perfect example of, “Here’s how you check all the boxes,” and really have successful promos. Not that they did this for Black Friday but, I mean, there’s no reason you couldn’t do this at any time.

Keith:                                 Right, exactly. I think it was just Josh Pickford was just saying today that he was seeing the end-of-year sales, the Christmas sales, for his product and he was like, “How can I do this every month?” Right? Well, this is one of the ways you can do that is to create that uniqueness and that limited time scarcity. The problem, of course, is once you do scarcity all the time, it stops being scarce. And this is something I see with especially kind of info product things where they’re like, “Oh, this is an offer that’s only available now,” and then next week, “It’s only available now,” and the week after, “Only available now.”

Kurt Elster:                       Right.

Keith:                                 And you have diminishing returns without, what you were saying, that authenticity. Right?

Kurt Elster:                       And that’s so important.

Keith:                                 Exactly, exactly. The authenticity of the offer, as well as building that community and having people trust you, is what is the majority of that trust and that benefit that you get.

Kurt Elster:                       The other side to this is Facebook ads are getting more and more expensive. Every digital marketer knows this. So, do you have a theory onto why they keep getting more expensive? Because I do, I want to run it past you.

Keith:                                 My theory is that it’s just become a much more competitive market. I think that there’s just more money going into it. I mean I remember when Facebook ads were like 10 cents. Like, they were super, super affordable. And now they’re, I’m guessing [crosstalk 00:12:13] No one took them seriously and they converted great, right? Because no one was taking them seriously. But now, because everyone’s piling on, there’s so much competition for it, the pricing just goes through the roof. I assume because there’s so many people jumping in.

Kurt Elster:                       Yeah, well, more than ever, we’ve lowered the barrier to entry. We have more people seeking entrepreneurship and tools like Shopify and these other platforms have really democratized being able to build a digital brand. So yeah, you’ve got more people entering the marketplace, but even more important, the big brands are now jumping into and taking Facebook ads very seriously. So, like Walmart, Proctor & Gamble, BMW, those people are now dumping money into ads. And for them, their customer lifetime value is wildly beyond anything us mere mortals can conceive of, right?

Keith:                                 Right.

Kurt Elster:                       And so, like if I’m BMW and I’m going to spend money on digital, and I’m going to spend money on Facebook ads, I might be trying to hit, I want to target that kid at 13, I want get him that brand affiliation of BMW now because then when he’s 30, he’s going to buy a BMW.

Keith:                                 Exactly.

Kurt Elster:                       And then maybe he buys another one and another one. So, the lifetime value for them is insane so big brands do not think of customer acquisition costs the same way we are in terms of the digital funnel. And so those people are now dumping money into Facebook ads. At the same time, like a year, year and a half ago, Facebook did that PR push where Zuckerberg came out and he’s like, “We want to connect you to your friends and family with things you care about so we’re going to show you less ads and more of your friends and family.” What? He limited the inventory. It’s a supply and demand problem.

Keith:                                 Right.

Kurt Elster:                       This supply just went way down as the demand is going up so wow, of course they’re going to get more and more expensive.

Keith:                                 Yeah.

Kurt Elster:                       That’s not going away.

Keith:                                 No, it’s not.

Kurt Elster:                       It’s just going to keep getting worse.

Keith:                                 And it’s interesting because I see the same thing, and this is a little bit of a tangent but with email providers as well and they’re always saying, “We have the best deliverability.” Well, of course you do because you’re brand new and all the spammers aren’t on your platform yet. But as they get older, as things go on, that quality goes down because there’s more spammers around. It’s the same with the ads. I think it was two or three years ago, I was getting great returns on Bing ads of all things.

Kurt Elster:                       Right.

Keith:                                 Who the hell uses Bing? Right? So-

Kurt Elster:                       But that’s why it worked.

Keith:                                 That’s why it worked. My target audience were people who would be using Bing and I was able to get like 50 cent leads that converted. Like, that’s amazing, right? You could never do that on, Google right now I think they’re average is like $3, $4 cost per click. Like, it’s getting up there, it’s getting up there. Now people are looking at Twitter and Reddit and other ad platforms that we can go to because the main ones are so-

Kurt Elster:                       A necessity.

Keith:                                 Yeah. I mean, there’s so many tools like AdEspresso and even Canva and stuff that automatically builds and pushes ads up to these platforms. Right? And at that point it’s become so automated that it’s really difficult, I think, to get a good return on ad spend for anything that is not a good thousand dollar product. Maybe a hundred dollar product but it’s rough, it’s rough. Not that it can’t be done but I think it has gotten a lot rougher and you have to be a lot smarter to stand out from all the crap that’s out there.

Kurt Elster:                       I’ve got some stats for you.

Keith:                                 I would love some stats.

Kurt Elster:                       Okay. So, I asked our marketing manager, I said, “Give me a general narrative. I want an overview of BFC on cyber weekend and then I want to know your takeaways. I want to know what you saw.” So, Thanksgiving was much later this year so sales started earlier. I think early on there was this fear of will that work and quickly found yes, the early sales worked and then the fear was well are we going to cannibalize the Thanksgiving and the actual Black Friday, Cyber Monday sales? Are we just kind of shifting the money around? Like really that’s the dark truth of Black Friday is you get soft sales in October and early November and you make them up at a discount during Black Friday. So, the fear was oh no, did we just make that worse? And the answer was, “No.” If you started your sale before Thanksgiving, you probably saw pretty strong numbers and those were just like bonus days because acquisition costs then were lower resulting in higher ROAs but Black Friday and Cyber Monday themselves, still strong in terms of generating revenue but acquisition costs were way higher for many, not all advertisers compared to last year, to 2018.

Kurt Elster:                       We saw ad accounts drop performance significantly over the weekend. So, Saturday, Sunday was slow. So, we did a lot of just like lowering ad spend and then just shifting that ad spend to Cyber Monday. Cyber Monday itself, that’s a work day, sales starts low, people were anxious but then we got into the evening, sales take off with the peak showing up at like 9:00 PM.

Keith:                                 Oh wow.

Kurt Elster:                       So, I assume it’s after dinner, the kids are in bed and that’s when things really took off.

Keith:                                 That last kind of holiday shopping sprint when everything is kind of calmed down, everything is done and just kind of now we’re starting the purchasing.

Kurt Elster:                       Yeah, absolutely. So, those big ROAs numbers, not as easy to come but this year as they were last year and I think it’ll get worse next year. But to give you some ranges, so our accounts spent a hundred grand or more that weekend landed in the on average 2.5 x ROAs and accounts spending less than 100k, they did better because it’s more targeted where in on average about 4 x ROAs. 3 to 5x was the range so average 4.

Keith:                                 Now how does that compare to like your general sales numbers for similar brands? Is that a doubling of ROAs? Is that about the same? Is that less?

Kurt Elster:                       That ROAs is trending down from what they would normally do.

Keith:                                 Got it.

Kurt Elster:                       Say if like you ran the July super sale kind of thing.

Keith:                                 Interesting.

Kurt Elster:                       And then of the offers, obviously like the big discounts generated a lot of sales. We found the typical offer was 30%, 30-35 or like that seemed to be the magic number where it got people’s attention. And you didn’t want to be the guy who was like, “Get 5% off.”

Keith:                                 Right, right.

Kurt Elster:                       Everybody is deleting that email. But you don’t want to have to offer more than you need to. So, it seemed like 30 was where you got people’s attention. Even 25 wasn’t enough. We said earlier, the offers that weren’t discount related that did well, new product launched on Black Friday, that used to be like heresy.

Keith:                                 Right.

Kurt Elster:                       You couldn’t launch a product during sale week. Now everyone who did that did well with it.

Keith:                                 Interesting.

Kurt Elster:                       Or like the variation on that would be limited run product. You know, like the lapel pin idea that Hoonigan did. Also we saw a lot of people do like bundles, BOGO sales or spend X, get a free gift or like free product. Those did as well if not better than just like the sites that were like, “Yeah, x off site wide.”

Keith:                                 I think at this point, you know, we’re talking about the uniqueness and standing out. At this point I think X percent off is just such a standard offer that you have to have something that’s maybe a little more complicated but a little more standout-ish, right? That gets beyond the, “Oh, it’s 30% off.” Because in my mind, and I could be wrong, but the 30% off, the percentage off, that really hits someone who is already on the fence about something but isn’t an initial like, “Oh, this is really interesting.” Where a new product launch, the lapel pins, that is something that can get you excited and into a product that you weren’t necessarily excited about in the first place.

Kurt Elster:                       Yes. And I think there’s probably like, you know, depending on what you’re product mix is, you could do both strategies. But yeah, I think you’re right where it’s like if it’s 30% off, it was a thing on my wish list, right?

Keith:                                 Right.

Kurt Elster:                       And so like all right, I’m going to pull the trigger, buy this now versus if I’m like, “Well, I like that brand and I’m on their list and I made a past purchase but I wasn’t necessarily thinking about making a new purchase,” having that novelty or the exclusivity of something new, that could be a good time to do it, to launch it. And [inaudible 00:21:07] very high anyway. So, I think people are trying to get away from discount strategies.

Keith:                                 Yeah. The discount strategies, I think they’re good, they’re simple, they’re straightforward but I think at the end of the day they’re not great for the brand to be honest. I mean, because then people are just waiting for the next discount, they know it’s going to come. For example, I wanted a monitor, I found one that at a discount, it didn’t work out, I had to return it and I’m not going to go for another one until they’re on sale again for football season.

Kurt Elster:                       You’re such a baller for getting that $6,000 Mac Pro super display. I’m so jealous.

Keith:                                 I got two of them in fact and I just kind of like wrapped them around myself, no, I’m a cheap bastard. So, my monitor is a 55″ TV that I’ve repurposed into a monitor. It is super nice. It is super nice but I got the upgraded version of it, it just didn’t work out so next time they’re on sale I’m going to get another one.

Kurt Elster:                       And you’ve got TCL is the brand?

Keith:                                 The one I had bought this time was a TCL. I got a Spector or a Scepter. Yeah, Scepter.

Kurt Elster:                       I had one of those. It was great. I have the TCL Roku TV in my house and I think it’s great.

Keith:                                 It was a great TV, it was a great monitor, the issue was it wasn’t curved and they do not make curved ones and when you’re sitting, I think I’m 16″ back from my monitor-

Kurt Elster:                       I like the curve. I got a curved monitor.

Keith:                                 Yeah, you have to have a curve.

Kurt Elster:                       I think it’s a 30″ but I got the curved Dell and I thought it was a gimmick until I’ve been using it, now I’m really into it.

Keith:                                 It is night and day. I tried it with the flat one. I hooked it all up and everything and the sides, it’s like you really get that perspective sitting this close where the words are like this thin on it. Oh it was miserable. It was miserable. So, Superbowl sale is the next TV sale and I will be getting it then. But going back to it, it’s like there was nothing there that inspired me to get it other than the fact that it was cheap. Right? And I had no brand connection to them, I wasn’t excited about it for any reason whereas a lot of the other stuff I did buy I’m excited because there is a new product, there is a new offering, there is something cool that’s happening with that more so than just the 30% off which they’ll eventually get my money at some point but-

Kurt Elster:                       Did you make any Black Friday or Cyber week purchases that surprised you? Where you bought a thing that you didn’t expect to buy.

Keith:                                 A couple yes. Mainly for the kids but it was interesting because I was in a buying mode and so I was in this buying mode and whenever I saw something that was interesting, I had to force myself not to buy it rather than to like actually consider it because I’m getting all the Christmas gifts, right? And so-

Kurt Elster:                       Yep.

Keith:                                 I see something that’s either insanely cheap or I see something that is interesting enough that I think that the family will like it, the kids will like it and I make that purchase but it was all about that uniqueness and things standing out much more than the actual price for the majority of things.

Kurt Elster:                       So again, it’s back to you did make a value purchase but it really didn’t do anything emotionally for you.

Keith:                                 Correct.

Kurt Elster:                       The stuff that was unexpected, that was novel, that’s where you surprised yourself and pulled the trigger on it.

Keith:                                 Right. Exactly.

Kurt Elster:                       Okay.

Keith:                                 And it’s interesting because what I thought was coming out that was new, so I bought some board games and stuff because they had a big promotion around them, and I had seen these for the first time and I was like, “Oh, these look great. These are new games that I’m going to be excited,” and then I check them on BoardGameGeek and they’re like six years old but they had been positioned to me as something that was new and exciting which was really interesting because I’d just never heard of them before. It’s the whole thing like if you haven’t read it, it’s still news. Right?

Kurt Elster:                       Yes.

Keith:                                 And the fact that I thought that these things were brand new, I was like, “Oh, I’m at the top of things,” and everyone’s like, “No, we’ve been playing that for years.” I’m like, “Oh, okay.”

Kurt Elster:                       So, let’s think about that. How would you implement that for clients for products? Two ways to do it, one is just a straightforward is like a back in stock strategy where like, “Hey, check out these trending now. These best sellers back in stock. These favorites returned. Our most demanded item.” I have one client who intentionally lets stuff go out of stock just so they can bring it back in stock and announce it and it’s always like limited run and that fashion. That could work, create some scarcity and add some fun to it.

Kurt Elster:                       Another strategy that I thought was really clever, this comes from Mark Arruda at Constantly Varied Gear. They sell leggings with pockets for women but they have really cool prints and some other apparel. It’s like gym apparel for women.

Keith:                                 Right.

Kurt Elster:                       And they do a run-off strategy. So, they’ll take two of their all time favorite previous best sellers and they say, “Look, we’re going to bring them both back in stock and you’ve got 24 hours to buy either one and whichever one has fewer sales, that one never comes back in stock again. We discontinue it forever.” Yes. And the one that wins, that will bring that back in stock and you can reorder that and that’ll be around for a few months. Yeah. I’ve never seen anyone else do it.

Keith:                                 And that’s a continuing strategy that they do? They’re like, “This is just the way we do business”?

Kurt Elster:                       Yeah. They do that and they do just a lot of like, “Hey, here’s the new designs, here’s the new thing.”

Keith:                                 Right. That’s awesome.

Kurt Elster:                       Yeah. Isn’t that clever?

Keith:                                 That’s is amazingly cool.

Kurt Elster:                       So, it helps build that community, it helps create that urgency because it’s like let’s say if the one you want to buy is the one that didn’t sell out, you just missed your chance.

Keith:                                 Right.

Kurt Elster:                       But you don’t know. So, it’s a lot of fun.

Keith:                                 So, I’m wondering how much that increases the average order value from people buying two. Right? Like one of each, right? Because that same thing of like, “Oh, this is the one I want but I don’t want to miss out on this.” Right? And I’m wondering if that increases number of products purchased or not. That’d be interesting to see.

Kurt Elster:                       Well you know what would be cool, is to have like a progress bar so like a landing page where it shows.

Keith:                                 Oh yeah.

Kurt Elster:                       Like, even if it just said which one is the current winner.

Keith:                                 Yeah. Don’t tell them by how much but it’s like this one is winning, this one is not and see if that changes the dynamic of which one is purchased or if both of them are purchased or how that-

Kurt Elster:                       Well, I think it’d probably be nice to have a, no I want a progress bar that shows like a slider.

Keith:                                 Oh, like a fighting-

Kurt Elster:                       Yeah. Because I think if it’s like right in the middle and you see it’s the one that you like is like 49%, you’re like, “Well shit. I’m going to buy that, show them. These people haver no taste.”

Keith:                                 I think there’s some research done into that with polling and especially like Twitter polls and stuff like that where seeing the results ahead of time influences the decision that you make much more-

Kurt Elster:                       Primes the pump.

Keith:                                 Primes the pump, exactly. Much more than people think because some people by their nature are contrarian and some people want to go with the flow. Personally I’m more contrarian and I’ll generally go to one of the lower ranked ones just because I want to support underdogs, right? I would love to see the result on sales on something like that where if they had essentially the fighting progress bar and then-

Kurt Elster:                       I’m going to pitch it to them because I think that’s such a great idea.

Keith:                                 I think that’s solid. And then also understanding like okay, do people buy two? That would really interest me if making people decide between the two actually increased the people who can’t decide and want both, you know? Interesting.

Kurt Elster:                       I’ll text him and if he replies we’ll see.

Keith:                                 All right.

Kurt Elster:                       All right, I just texted him. We’ll see if he replies. I was texting him this morning so we’ll see. Maybe he will, we’ll get lucky.

Keith:                                 That’d be cool. So then going back to the kind of ad spend and the different kind of strategies that people are using on those Black Friday sales, did you have a breakdown of how much of that comes in through email, people already on the list, how much of that is coming through new people and new ads? Like did you see a difference in those types of sales strategies? Understanding, of course, that ads influence email and email influences ads.

Kurt Elster:                       Good question. So, for a majority of people, return customer rate remained unchanged from whatever the site usually does. Like, either it would be up 4% or it was like plus or minus 10% seemed to be the typical range.

Keith:                                 Interesting.

Kurt Elster:                       So, it’s hard to say and there was just one outlier where it seemed like they picked up 32% more new customers than they usually would.

Keith:                                 Oh wow.

Kurt Elster:                       But for the most part it was like whatever your normal breakdown is, it’s probably going to be about that.

Keith:                                 Right. Right. Okay.

Kurt Elster:                       As far as channels, on the people who used SMS, SMS did really well if you used SMS because I don’t think a lot of brands are using it yet and the people who are on it are like hyper engaged.

Keith:                                 That is mind blowing to me. I mean, as someone who hates SMS, especially SMS like sales messages and stuff, I just cannot believe that people convert from that. It’s mind blowing to me and I know they do.

Kurt Elster:                       Which one are you more likely to ignore? Your email or your text?

Keith:                                 I’m definitely going to ignore my email more. I understand it’s like right in my phone but I can’t imagine ever signing up for that.

Kurt Elster:                       Right.

Keith:                                 And if I did, like if I just got an SMS from a brand being very upset that I got this SMS from a brand, right?

Kurt Elster:                       And that’s the pushback against SMS, that’s what everybody says and yet every single client I have that runs it, and I’m with you, like no brands, I’m not opted into anything. Every brand that uses SMS sees a 99% open rate and like an equivalent of a 20 x ROAs.

Keith:                                 Oh my God. That’s crazy.

Kurt Elster:                       Yeah. It’s very successful.

Keith:                                 I’m kind of curious with the brands that are using SMS, is it mainly like lifestyle brands and like kind of that boutique style brand or is it more general stuff? Like are the people using the SMS the rabid fans who are like, “Okay, anything that’s put out by this company I want to have,” or is it something that’s more generic?

Kurt Elster:                       Part of the success of SMS is I suspect only the most engaged people are the ones who are going to sign up for SMS. They’re the people who are like, “If this brand is saying something, I don’t want to miss out on it.” And when you do a lot of product releases, or a lot of like novelty, that’s the kind of thing that people will sign up for and get engaged with on SMS.

Keith:                                 Yeah. Definitely, definitely. And then-

Kurt Elster:                       I got a reply to my text. They refer to it as their face-off where two product releases are pit against each other and he said it drastically increases that people buy both whereas normally if you’re like, “Hey, here are two products, go.”

Keith:                                 Right, right. That’s interesting. That’s interesting. That’s what I figured. That’s what I figured. I mean it’s that fear of missing out, right? And it goes back to that whole idea of marketing as psychology, right? You have to understand how people are thinking and the human behind some of these decisions. Right? And that’s what’s really going to change the makeup there, so.

Keith:                                 There’s one thing I was going to mention, you were talking about the SMSs, oh, it was just that I was going to mention, you know, one of the things that I think a lot of marketers forget, and I know I forget, is that we’re not necessarily out best customers. Right? Like you and I would never sign up for an SMS message but they convert.

Kurt Elster:                       Yeah. That’s such a common mistake that people make especially you’re a merchant or you’re the brand owner. When you’re initially building the brand, it’s easy to see it as like, “Well, I’m my own best customer.”

Keith:                                 Right.

Kurt Elster:                       But by the time you’ve make a hundred orders it’s over, like you’re no longer, the experience, the outcome, what people get out of it, it no longer belongs to you.

Keith:                                 Right.

Kurt Elster:                       So, you need to always be talking to your customers and I think that’s one of the most overlooked strategies that people miss out on especially around conversion rate optimization is always be serving your customers, figuring out where you can improve but also how do they see themselves, how do they see the brand and what do they get out of the brand and who do they view this brand as being for?

Keith:                                 Right.

Kurt Elster:                       And then put all that back into your copy and that’s really, our most successful conversion rate optimization campaigns have all been born out of customer surveys.

Keith:                                 And it’s interesting because I think a lot of companies don’t like to do that and I don’t know why. I wonder if it’s partly because we don’t like talking to people, we like our little offices and we like working on the computer. But I agree that every time we’ve talked to our customers, it has been an eye opening experience because like you said, once you get a number of customers, you’re no longer the main user of your software or your product or your best customer. You’re not your target audience anymore because the audience has kind of taken over from that.

Keith:                                 And one of the experiences we had was that we started getting a lot of sales companies and sales processes using psych metrics which we did not design it for. We thought about it for info products, we didn’t even think about it for ecommerce but now we have a ton of ecommerce and we have a lot of people using it for sales processes which it works, it’s great, we have features for that but just 100% did not imaging that going forward. And so our pricing isn’t matched to that and we need to review that and stuff and see how that works but it’s just interesting that we were able to find a niche and a customer need that we didn’t go out to find, right? They just kind of found us organically and now we’ve managed to latch onto that and build that up as a sales channel and as a product benefit as well.

Kurt Elster:                       Yeah. And this works for basically all businesses that get income from the general public. You need to be talking to them because you don’t necessarily know that your message is why you’re successful.

Keith:                                 Right.

Kurt Elster:                       It could be something entirely else and positioning is so important. So, if you could always be iterating on that based on feedback, those are the businesses that really see consistent growth.

Keith:                                 Yeah, exactly, exactly. Awesome. Well Kurt, anything else that you want to, I mean this has been amazing, like talking through this. I think a lot of people just don’t get the insights, you know we’re kind of siloed, right? We understand what we’re doing, we understand what our friends are doing but we don’t have a view of what goes on in these types of sales and what’s going on with the ecosystem in general because that’s the benefit that consultants like you provide which is you get to see a lot of people and you get to see the trends over all these different brands and all these different agencies and all these different stores and I think that’s super valuable for people to have that baseline and to get that understanding of how other companies in their niche are performing.

Kurt Elster:                       I think the one key takeaway I want to leave people with, so we talked about like a lot of this was about how to differentiate yourself so that you standout so you get that sale to try and work against these ever diminishing return on ad spends. And I think the biggest missed opportunity is tell your story. So, we’ve got big brands like Walmart, Target, BMW and Proctor & Gamble are eating up this ad spend, they can’t tell a brand story the way an individual can. They can’t connect with people. They have to hire spokesman, right? Whereas if you’re a small business, if you could get out in front of it and you can be the face of it and you can talk to people in a one to many fashion as a human, well people buy for people, not brands.

Keith:                                 Right.

Kurt Elster:                       So, I think it’s this huge advantage that small businesses have over big businesses that they utterly ignore or actively work against. But it’s like, “We here at Acme Corp,” you know, when it’s like three guys in a garage, own that, people will relate to that. That’s how you find your tribe and it will make your life much easier when you embrace your won story and get in front of it.

Keith:                                 Yeah. I mean, there’s a reason that KFC still uses the Colonel, what? 80 years after he’s passed away, right? People engage with people and people love that story and that’s why I think we see a number of the products and stuff that are very life cycle founded, I guess, they’re founded on personalities and a specific type of lifestyle that they are showing and they want people to emulate and they stand as an example of. “Hey, if this is the type of lifestyle you want to live, if this is the type of person you are, this is the brand for you.” Right? “And this is our personal story,” and then connecting it with a human person that’s not just a paid mascot like getting Kevin Hart or someone to pimp your soft drink, right? It’s more about authenticity, right?

Kurt Elster:                       Yes.

Keith:                                 Remember we were talking about authenticity and uniqueness-

Kurt Elster:                       That’s a key word, authenticity.

Keith:                                 Yeah. It really is because people trust people and when we look back at the brands that we love and that I purchase from, they’re all vert small boutique and have strong stories behind them.

Kurt Elster:                       100%.

Keith:                                 Awesome. Well Kurt, thank you so much for joining us and besides Ethercycle and The Unofficial Shopify Podcast, where can people find you?

Kurt Elster:                       Oh my gosh, Google me. Head to Kurtelster.com. Sign up for my newsletter. That comes from my real email address. If you reply to one of those emails with a thoughtful question, I will happily send you a thoughtful answer.

Keith:                                 All right. Well, I’ll be spamming that inbox then.

Kurt Elster:                       Please do.

Keith:                                 And I’m loving your Disney shirt.

Kurt Elster:                       Oh, yeah. Well, this is from my Disney Land trip, not to be confused with my Disney World trip.

Keith:                                 Got it.

Kurt Elster:                       You want to talk about community and branding? These are a line of things they do called The Spirit Jersey. It’s just a long sleeved t-shirt with like huge branding across the back and now they do them as like there’s exclusives for the extra ticketed events. So, if you went to the Halloween party, you then had the opportunity to purchase a Halloween party specific $65 Spirit Jersey. So the goal is to get these people to buy not one, but like several Spirit Jerseys.

Keith:                                 Right.

Kurt Elster:                       Having explained to you the concept in a [inaudible 00:41:38] fashion, here I am wearing one, so it worked on me.

Keith:                                 I mean, I know we technically already did our sign off but I mean, yeah. I think Disney is one of the masters of this and you know, I was in Japan for 15 years and Japanese brands have that down pat. They understand the collectiveness, they understand that limited edition, like they have limited edition Kit Kats that you can only buy in certain cities or certain times of the year. Like, it’s this idea of okay, and you look in America on American Twitter and people are like, “Oh my God, do you see these Kit Kats I found?” It’s like it works. No one ever got excited about a Kit Kat in Kmart, right? It’s this specialness, it’s this uniqueness, it’s this branding, it’s this I have something special that you can only get in 1997 from this one place, right? And that is now special to me and I’m willing to pay for it because it has that uniqueness and it has that value.

Kurt Elster:                       Absolutely. Especially since we can buy anything online.

Keith:                                 Exactly.

Kurt Elster:                       It makes those exclusives so much more important and special.

Keith:                                 Yeah. When you can get anything anytime, it’s the things that you can’t get that are special.

Kurt Elster:                       I think you should patent that slogan right now. When you can get anything anytime, it’s the things you can’t get that are special.

Keith:                                 Yup. Yup. Going back to Japan, they are very season based with foods and stuff and there are certain foods that you can only get certain times in restaurants and not like the McRib, right? But there’s like entire brands-

Kurt Elster:                       The McRib which is based on pork price. That’s its availability.

Keith:                                 Special time offer because pork has become cheap.

Kurt Elster:                       Literally that is what it is.

Keith:                                 Yeah. It’s awesome. It’s awesome. All right Kurt, thank you again. Good talking with you as always.

Kurt Elster:                       My pleasure. Talk soon.

Keith:                                 Talk soon.