Latest / eCommerce Podcast / Why Pay an Agency 15k When Your Customers Will Tell You for Free

Transcript

Why Pay an Agency 15k When Your Customers Will Tell You for Free · eCommerce Podcast

0:04
So welcome to the eCommerce Podcast. My name is Matt Edmundson, and of course,
0:09
it is great to be with you on this beautiful day wherever you are in the world.
0:13
We hope you're having a great time. Now we are going to be talking about
0:18
ecommerce. That's what we do on this show. So if it's your first time with us, a
0:22
very warm welcome. Make sure you like and subscribe. And check out the website
0:27
ecommercepodcast.net and all of that sort of good stuff. And of course, if
0:31
you're a regular, welcome back, welcome to the show. It's good that you continue
0:36
to get value out of it. And I do have to give a quick thank you to everyone that
0:40
reaches out to me during the week, from folks on WhatsApp groups to LinkedIn,
0:45
all that sort of stuff. I just love the stories. You guys get value out of the
0:49
show, which is great, keeps me doing it. So if we've not yet connected on
0:54
LinkedIn or you're not part of our cohort groups, which is— how do I describe
0:58
cohorts? It's where a bunch of us get together and talk about ecommerce online.
1:03
It's awesome. You can find out more information about that on the website. But
1:08
yeah, thank you for all the encouragement. It's been greatly received. Let me
1:12
tell you, very greatly received. But yeah, of course, if you're new, hopefully
1:17
we'll connect and you'll be sending me some of that great feedback. Not that
1:21
I'm, you know, asking you to feed my ego, but everything helps. Right. Anyway,
1:26
that's enough of that. Like I say, the website ecommercepodcast.net, you can
1:30
find out all the information about the show there. You can find the show notes
1:35
from today's conversation. You can find all the links to the guests, you can
1:39
find all the past episodes. There is a whole bunch of stuff on the website. So
1:44
do go check it out, ecommercepodcast.net. Net. Now, Cem, welcome to the show,
1:48
man. How are you doing?
1:54
I'm doing fine, Matt. How about you?
1:56
Well, yeah, you know, I always used to say when people ask me that question, I
2:01
don't know how you answer that question sort of tongue-in-cheek, but I would
2:06
always say to people, well, you've got to be doing all right when you're this
2:11
good looking, right? And then my wife said to me, maybe 2 years ago, 2, 3 years
2:16
ago, Bearing in mind, we've been married for 28 years. So she said to me 2 years
2:21
ago, I need to stop saying that. I have to now start saying to people when they
2:26
say, how you doing? I've got to be, I've got to say, well, I've got to be doing
2:31
all right when I'm married to such a hot wife. So, so if she is listening to the
2:36
show, which I doubt very much, but if she's listening to the show, Uh, both are
2:41
true. Um, and so yeah, I'm doing good. Anyway, uh, I think I feel I've just
2:46
slightly digressed. Um, Cem, tell us a little bit about yourself, where you are
2:51
and what you're doing, why you're on the show.
2:57
Sure. Um, yeah, first of all, uh, thank you for being able to be here. Uh, my
3:02
name is Cem. Uh, I'm an entrepreneur, or you could say an ecommerce founder
3:08
also. Who is just helping a lot of brands doing growth from Germany. We are
3:14
mainly focused on UK and the DACH region. So that means Germany, Switzerland,
3:19
and Austria. Yeah, just that's pretty it. I'm in the space for 13 years right
3:25
now. Yeah, worked with a couple of, or better to say, supported a lot of good
3:31
and yeah, brands that's pretty familiar to most of the listeners for sure here.
3:37
But yeah, that's pretty much— there's not much to say about me. Pretty boring,
3:42
actually.
3:48
I doubt that very much. I doubt that very much. So you're based in Germany.
3:52
Whereabouts in Germany?
3:57
Near Cologne, called Düsseldorf. I mean, it's pretty common and familiar, I
3:59
think.
4:01
Yeah, I've been there. Düsseldorf. How do you pronounce it in German?
4:03
Düsseldorf.
4:05
Düsseldorf.
4:06
Düsseldorf. Yeah, yeah, yeah. And so, yeah, Germany is one of my favorite
4:10
countries. I really love Germany. Really? Yeah, yeah, yeah. It's a great place.
4:14
I used to—
4:16
Why is that? Are you sure? Germany? Are you sure? No, lots of good memories in
4:21
Germany. So my sort of previous work life before becoming an ecommerce guy. I
4:27
used to install saunas and steam rooms, um, and health spas, and we used to buy
4:33
them from a German company called Klafs. Shout out to Klafs if you're looking
4:38
for a sauna, go check out Klafs. Um, and they were based near Stuttgart, and so
4:44
I have just lots of good memories of coming over, hanging out with those guys,
4:50
um, going and touring health spas, and just, yeah, it was just such good fun.
4:56
German beer and lots of laughter and all that sort of thing. So, yeah, lots of
5:01
good memories. That's why I like Germany.
5:07
That's actually a true thing. To make business with German companies is usually
5:11
something— I mean, if I just need to choose between having private time with
5:15
people in Germany that I don't know or doing business with them, I definitely
5:19
would recommend doing business with them because doing business in Germany can
5:22
be really fun. Not sure, for sure, not with all, with all companies, but most of
5:26
them. Yeah, yeah, pretty cool, pretty, pretty, pretty calmed down. There's no
5:30
like, yeah, I'm better than you. There's, there's like supporting each other is
5:34
more important than competition. Yeah, that's something that I really enjoy here
5:37
too.
5:41
Yeah, yeah, yeah, yeah. No, I, I've got a look. I love the fact that when we
5:45
were dealing with Klafs, it was all done on the basis of a handshake. Yep. You
5:49
know, it's very much—
5:53
Gentleman's agreements are really big.
5:54
Yeah, yeah, yeah. I said it, therefore I'll do it. And that sort of old school,
5:59
old-fashioned handshake thing I thought was wonderful. Yeah. Yeah, and I really,
6:04
really liked it. So yes, I remember, we'll start talking about ecommerce in a
6:08
minute, Cem, but I remember going to Germany for the very first time with my
6:13
then boss, a guy called Simon. And Simon and I are still really good friends.
6:18
And, um, I remember going to Germany, and this was sort of in the '90s. So this
6:23
was pre— you've got to remember, this is pre-internet, right? We didn't— I
6:27
didn't have an iPhone with Google Maps. Uh, we had to sort of read a map to
6:32
figure out where we were going, and we were sort of in the vicinity of where we
6:37
needed to be. And, um, Simon said to me, just jump out of the car and go ask
6:41
that lady over there where this hotel was. Right? And all I had was a pamphlet,
6:46
like a leaflet of the hotel. And I'm like, I don't know how to say in German,
6:51
where is this hotel? So I literally, the one phrase I knew how to say in German,
6:55
Cem, was gehen Sie geradeaus, die erste Straße links, oder die erste Straße
7:00
rechts, right? And so for those of you listening, don't speak German, it's
7:05
basically go straight on and take the first left or the first right. So I jump
7:09
out of the car, right, with this pamphlet. I hold it up in front of this lady
7:14
and just sort of shrug my shoulders like, where is this? And she said to me,
7:19
gehen Sie geradeaus, die Oerster Straße links. And I was like, ah, danke, danke.
7:23
And so I get back in the car and I said to Simon, right, we've got to go
7:28
straight down the road and take the first left. And he's like, how do you know
7:33
that? And so I kind of had this mistaken belief that I was somehow fluent in
7:37
German.
7:45
More important is how many times you repeat that until you find the hotel,
7:46
actually.
7:48
Yeah, I asked 20 ladies on the way to the hotel until one of them was right. No,
7:54
it's very good. It's very, very funny. Anyway, let's talk about ecommerce. So
7:59
you work with companies to help them grow. in the UK, uh, and different regions.
8:04
I'm curious, Cem, one of the questions I love to ask guests, right, that come on
8:10
the show, you've got a, a very specific skill set, a very good area of expertise
8:15
in helping ecommerce companies grow. When companies approach you, when you start
8:20
talking to an ecommerce business, what is the single biggest mistake we're all
8:26
making? Um, I'm really, really curious, and how would we solve it?
8:33
I mean, I think there's two. Okay. So first of all, the biggest, one of the
8:38
biggest mistakes is that they definitely have no control about their unit
8:44
economics. The first thing that I just usually ask in calls only for triggering
8:49
like this inconsistency about like what you ask for, right? Is like, hey, what
8:55
is your cost of acquisition cost to LTV ratio. And that's the first thing that I
9:00
usually ask only to see if the person who I'm sitting talking with has at least
9:05
a bit, yeah, an idea about what is going on in this business. That's the first
9:11
thing. And the second thing is I think people who are just reaching $2 million,
9:16
$3 million, even $5 million in revenue annually, they think they have a business
9:22
in ecommerce, but they actually don't have, yeah. But they came in in these
9:27
calls and their ego is so loaded. Like I'm the biggest one, the best one. So
9:32
just, I mean, the first call that I have with people is usually like roasting
9:38
them for 30 minutes and just telling them like, oh, okay, why that? Yeah, why is
9:43
that? So, and why you are not shifting your budget if this is your best channel
9:48
that is performing? Yeah, why you are doing this or X or Y and Z, right? So I
9:54
think the biggest issues that we just have right now in ecommerce are, yeah,
9:59
having not enough control about their unit economics And ego.
10:06
Ego. Love that. Love that. It's like, um, I remember, I'm just gonna be totally
10:11
honest now. I remember, uh, when we had our first ecommerce hit and we were
10:16
doing millions online and I thought I'd cracked it, right? I mean, you talk
10:21
about, you talk about hubris. We were like, whatever we do is going to touch to
10:26
gold now because we've cracked it, we figured it out, we're just going to copy
10:32
our website because this again was sort of pre-Shopify. We'll copy the website,
10:37
we'll copy the code, and we will just create another website. And we had a
10:42
beauty company that was doing really well. It was called Jersey Beauty Company.
10:47
And then we set up Jersey Gift Company. It died within like 3 weeks. It was so
10:52
rapid, the downfall. And so I often tell people I've had more failures than
10:57
successes. But it's, I get what you mean. By ego. And what do you think that is
11:03
though?
11:11
I think, uh, I mean, to be completely fair, to scale a business to $2 million,
11:15
$3 million, or even $5 million in revenue annually, yeah, it's a pretty big
11:20
thing, right? Because that's actually a milestone that is not easy to hit.
11:25
Definitely not. Yeah, but ecommerce is actually, if you're just asking me,
11:30
starting after you're passing the $10 million, yeah, because then you just
11:35
really start to feel pressure, competition, right? And you also, yeah, just need
11:40
to play the game differently, or otherwise you die within like a 3-month period.
11:45
Um, I, I have a really good example, uh, for that. Uh, we are working with a
11:50
company together where we also invested in. We also do investments, by the way.
11:55
Um, we help them to scale from $15 up to $50 million. Yeah. So revenue annually.
12:00
And I was talking with the founder like 5, 6 weeks ago and they say like, hey,
12:05
okay, now we also have, because we just reach a certain milestone, we also have
12:10
a company which is charging us $15K and tell us what we're doing wrong. And I
12:15
was just like looking to them and say like, why you did that? Yeah. So yeah,
12:20
because they just can tell us what we are doing wrong and then we can just do I
12:25
told him like, Marcel, you have 100,000 customers to ask for what you are doing
12:30
wrong. Why are you just hiring a company?
12:35
Yeah, yeah. Why are you paying them 15 grand?
12:37
Yeah, yeah, yeah. These guys have like huge reference. Yeah. And your customers
12:40
has no reference. They buy, they bought your product. So what kind of reference
12:42
you need more, right?
12:45
Yeah.
12:45
And it was like, yeah, but this is the next step. Who say you that this is the
12:49
next step? Yeah. You're just only increasing your OpEx cost for no reason.
12:53
Yeah.
12:53
Cancel this contract, please. And by the way, I tell you since the beginning
12:58
what you're doing wrong. So I mean, what are we talking about? Right? And this
13:03
is really something that a lot of brands need to understand. If you're just
13:07
having a sparring partner, yeah, like we're doing with Aurion, you just need to
13:12
be able to accept criticism. Right? But for sure, I mean, logical and criticism
13:17
that makes sense. Right? I'm not telling you something like, hey, you do this
13:21
wrong, do this different. I tell you what you do wrong, I tell you why this is
13:26
wrong, and I usually help you to solve that, right? And that's, that's the
13:30
difference, right? So that's, that's, that's the ego. Yeah, they think like,
13:35
hey, I just scaled something to $5 million, I know everything, I can do
13:40
everything, everything that I touch will be gold, right?
13:44
Yeah.
13:45
And that's actually not the case. I just learned this also on the hard way. We
13:49
scaled up our first business also to $7 million in revenue, and I was like
13:54
doesn't matter what I'm doing, I will be a millionaire, everything I touch will
13:59
be gold. Same situation like you. And yeah, we just, with the second business,
14:04
we, uh, yeah, go bankrupt in 5 months, 6 months. Yeah, really go bankrupt
14:09
because we just build another business for sure to not, uh, yeah, interrupt the
14:13
process of the current business, right? And yeah, we, it was a total flop. We
14:18
just spent over $250K and just really burned money. Nothing else happened there.
14:23
And that's pretty much it. So it's always the same. People only learn with pain.
14:28
You just need to feel this pain at least once or twice until you understand.
14:34
Yeah, I think you're right. I think you have to learn it eventually, don't you?
14:39
That you are not God's gift to business, that you don't have the Midas touch,
14:45
and that actually whilst you work hard, a lot of it is also down to luck and
14:51
being at the right place at the right time. But I'm reminded of a phrase Jim
14:56
Collins uses in the book Good to Great, which I think is a really— a book that
15:02
really helped me in my business career. He talks about this idea of if you are a
15:08
great leader, you confront the brutal facts. Right, so you look at the brutal
15:13
facts, you take the criticism, you look at the data, and you go, we have got
15:19
this wrong. Um, but you do so with a hope and belief that the future can and
15:25
will be different, right? So it's not like, oh, woe is me. You're like, but you
15:30
have to acknowledge the fact these are the brutal facts. You have, you have got
15:36
to be that clear with yourself. Um, And that's really hard when the ego's
15:41
involved, isn't it? To sort of confront the brutal facts, which kind of ties in
15:47
with what you said, the first problem we've got in terms of being able to answer
15:53
simple questions like CAC to LTV, or customer acquisition cost to lifetime
15:58
value. I do wonder whether sometimes we just don't know the brutal facts.
16:06
But I mean, so that's totally true, but is this not the brutal mistake? Because
16:11
let's just think about the difference. Let's say we are not in the ecommerce
16:16
space, you're a handyman, right? You're spending €500 or dollars or pounds,
16:20
doesn't matter, right? A week to acquire new customers and you get only €1K
16:25
back, right? Is this worth your time and your cost? If you just only get twice
16:30
back. Yeah, yeah. So you have, we have labor costs, you have, you just need to
16:35
drive there. There's like several different factors. So I mean, this is
16:39
basically a fact or a rule in every business, not only for ecommerce. If you
16:44
don't have any control about your numbers, you're losing from the beginning on.
16:49
Just let us say we scaling a channel with ROAS about 2 as example, right?
16:53
Yeah.
16:54
But our cost of goods sold are 25%, we have 30% marketing spend on our revenue
16:59
and yeah, there's like fulfilment costs, like 15%. And taxes, other stuff is
17:03
another— taxes and transaction costs is another 15%. So how much is left? And we
17:08
didn't talk about operative costs like salaries and other stuff, right? So the
17:13
first thing that every founder needs to understand from the beginning, it's
17:18
important to start fast and do things instead of just trying to learn them
17:23
first. I totally agree with that. But you just need to realize that ecommerce or
17:28
even every other business is first of all a math game. So if you know your
17:32
numbers, if you do the math, you will more likely succeed. At least like 5 or
17:37
even 10 times higher will be your succession rate if you just have these numbers
17:42
under control. I mean, you see this every day. As example, a customer is just
17:47
complaining about like, yeah, my CAC is raising. Yeah, but your repurchase rate is
17:52
40%. What is the issue? Yeah. So, but if the CAC is raising and his repurchase
17:57
rate is by 10 or 15%, right? Then it's bad for sure. But if the repurchase rate is
18:02
great, yeah, and the retention marketing things like email, WhatsApp, SMS is
18:06
running great, yeah. So it's no problem to just increase the customer
18:11
acquisition cost, right? And they need to understand this little differences,
18:16
yeah. What is good? What is bad? Yeah. A raising cost number doesn't mean that
18:21
something is going bad or good. Good, right? It more shows you where your
18:26
business is moving on, right? When you are just selling supplements or just
18:31
beauty products, yeah, beauty products are more like new customer base, but
18:35
supplements, yeah, people like your stuff as example and they just repurchase,
18:40
right? So if you are in supplement business, yeah, and don't have a repurchase
18:45
rate about like 30, 40%, right? You just do something wrong. You leave money on
18:50
the table because retention is the only channel that is generating your pure
18:55
profitability.
19:00
Yeah, yeah.
19:00
See, paid channels— I mean, if you just can do paid marketing and be first order
19:05
profitable, that's amazingly great, right? Yeah, but if you just want to scale
19:09
this up to 50 or even 100 million, you will just realize that this, this will
19:14
not work. You cannot stay always profitable with your marketing if you just
19:18
reached 100, 150, 200 million. That is not working. Marketing is not made for
19:22
that, right? So, or better to say, paid marketing is not made for that.
19:27
Yeah.
19:28
Their only interest is to get you orders and squeeze more money out of you.
19:33
That's their focus. So that means as more your spend is growing, as lower your
19:37
return of investment will be. But the side effects with retention, with
19:42
conversion rate on your shop, with signup forms, this is something that you just
19:47
can actually have impact on and can take this unprofitable traffic and make them
19:52
to profit. Yeah. If you don't understand these things, if you don't have at
19:56
least a feeling for these numbers or better, if you just outsource this 100% to
20:01
another person or agency, you're leaving money on the table because that is
20:06
actually doing your profits, right? Retention is usually most of the times the
20:11
channels which is doing insanely high profit rates, right?
20:15
Yeah. Yeah, no, I'd agree. I'd agree. I mean, we've worked very hard to get our
20:20
retention rate as high as we can, um, year on year. And actually growing the
20:25
retention rate is, is one of the reasons why businesses, I think, just, just
20:29
super well. I'm curious, I'm listening to you talk, the, the metrics that you
20:34
mentioned, um, if you approach or you get involved with an ecommerce business,
20:39
what's your process? How do you get them from point A to point 5x.
20:45
So first of all, um, when someone is interesting to work with us or looking for
20:50
an investment where we just can invest on, so first of all, we do an audit for
20:54
sure. Uh, we have two departments, yeah, which, which do a due diligence. The
20:59
one is the marketing due diligence, which I do with my team, and the second one
21:04
is the finance, yeah, which is doing my partner Tobias, right, and his team. So
21:09
we first of all really scan your business. What are you guys doing? How are your
21:14
rates? Yeah. How is your supply chain? Yeah, like things like these. Yeah,
21:19
because maybe it sounds weird, but the scaling is not— most of the time scale
21:24
doesn't begin with just increasing the marketing spend. It starts with fixing
21:29
the issues in the process that are already done. Yeah. As example, we work with
21:34
a food brand together which we're just really deep involved right now. Yeah. And
21:38
with changing their fulfilment, we saved another 12% in costs.
21:44
Right.
21:44
That's 12% that we just saved in the beginning. So then we, uh, they produce in
21:49
Europe. Yeah, they just produce food and beverage products. And, um, with a
21:53
little trick, we just save like 25% of their, of, of their packaging costs.
21:58
Because I said like, hey, you guys produce in Poland, you guys produce in, um,
22:02
in, in Bulgaria. Yeah, so why you are not finishing the packaging there? Why we
22:07
are just getting this, this, this products to Germany? Then unpack it, repack
22:11
it, and then sell that, right? So, and these are usually little twists where you
22:16
just begin to fix things. So we just make a really good scan, due diligence on
22:20
the marketing and the finance side. Yeah. And in this scan, we also realize
22:24
like, yeah, loopholes and bottlenecks that we just need to fix first.
22:29
Yeah.
22:30
So when we have, yeah, a pretty clear view on the business, we usually go in a
22:34
meeting. Yeah. I call this the second roast meeting. Yeah. Because we are
22:38
basically telling people what exactly they do wrong.
22:42
Yeah.
22:42
How they can fix that. And what we do to fix that. That's also a really
22:47
important thing. To tell someone how to fix that is usually not enough in these
22:52
days. You just need to tell them how, right? So to say like, hey, your Google
22:57
spend is this, yeah, and you just need to do it like this and with X ROAS, yeah,
23:02
it's telling them, okay, yeah, but to tell them how they do that is something
23:07
which is much more valuable. Yeah. So give people, yeah, what we do is we just
23:13
giving people what they do wrong exactly and how they fix that, right? So, and
23:18
then they have the chance to think about that, digest that first, and then say
23:23
like, okay, we just want to do this by ourselves or do this stuff with Cem and
23:28
his team, right? So that's usually the approach. We just came in and yeah,
23:33
that's actually the beginning, the beginning of the end.
23:38
Yeah, beginning of the end. So when you When you look at what's wrong in you and
23:43
you look at how to fix it, um, are you doing that on the basis of experience?
23:48
Are you doing that on the basis of research? Um, maybe a mixture of both. I'm
23:53
like, I guess I'm— if I'm listening to the show and I'm listening to you talk
23:58
and I'm running my eCommerce, my ecom business, I put my ego aside. How do I
24:03
figure out what's wrong with my business and how do I figure out how to fix So
24:08
the first thing that I always recommend is just try to cut as much feelings as
24:13
possible out of the process.
24:18
Maybe it sounds weird and we all know your ecommerce brand is your baby. You
24:23
just grow it up from the beginning and there is a lot of emotion into it. Cut
24:28
it. It's hard to say, but cut it. The only thing that is really helping is
24:32
data-driven decisions. So that means that you are just really checking your data
24:37
out. Yeah, you check out, yeah, like, hey, my product has a return rate about
24:42
like 15-20%. Why is that? What I can do for that? You can call your customers
24:46
and ask. That's the easiest thing. I mean, it's logic, right? So you don't need
24:51
to ask or build fancy dashboards or getting an expert on board. Ask your
24:56
customer why they're sending their product back. Yeah. So easiest fix. And it's
25:00
really a mix between experience, I would say, also research. But the most
25:05
important thing is really doing data-driven decisions. If you see an issue, just
25:10
think about— don't just overcomplicate it. Think about simple. So when I spend
25:15
$100K into something and get only $200K back, so what is the problem that I did?
25:19
So I just look on the numbers, I check benchmarks, right? And if I'm just under
25:24
these benchmarks, I see at least a bit the direction what could be the issues,
25:29
right? And that's the thing. People are just always overcomplicating things. But
25:33
it's really simple. Ecommerce is the basic idea, the ground idea is really
25:38
simple. The execution is the hard thing. But here's also something to fix. If
25:43
you are just not sure how you can solve something, asking people, asking your
25:47
clients, your customers, or here's also one thing, testing things that could be
25:52
the solution, just checking them out for a week or even two, and if it's not
25:57
working, just just, yeah, yeah, just cancel it and just execute another
26:01
strategy, right? It's also something. Yeah, I mean, I'm just really talking with
26:06
a lot of PEs and family offices, and one of the biggest players I know in the
26:11
space is a guy who always say about himself, like, hey, don't get me wrong, but
26:16
I'm not a smart guy. Yeah, I'm not smart, but the one thing I do right is I just
26:20
understand how pace and execution working combined. So what he do is he do
26:25
things Yeah, like 5 things in the same time and cut things that are not working
26:30
within a month. Right. And he always rotates this and he built a whole team
26:34
against that. And he's one of the biggest PEs in the European zone here. Yeah.
26:39
Because he just understands that. Yeah. Did he burn a lot of money? Yes, he did.
26:44
Insanely amount of money.
26:49
Yeah.
26:49
But if you just compare it with the revenue and the profits that he gets in.
26:53
Yeah. There is like, it was like 5 or even 6% of the money that he, that he
26:56
burned.
27:00
Yeah.
27:00
If you just compare it to his profits that he's doing. Yeah. And if you are not
27:04
able to sacrifice 5, 6 or even 10%, right, to generate another 90% which are
27:07
insanely profitable. Yeah. You are leaving money on the table and you are just
27:11
wasting your time.
27:15
Yeah. That's a really interesting point. I love this idea. I mean, the
27:20
simplicity of it is great. Data-driven decisions. Look at the data, benchmark
27:24
it, see what's working, what's not working. Talk to your customers probably over
27:29
both. Why did— why, why do you think that works? Why do you think that's not
27:34
working? Um, do some tests and check the data and see what happens as a result.
27:39
It's, it's not, um, it's not a complex procedure, Cem, in the sense you— it, I
27:43
think going back to your point about overthinking or over making things
27:48
overcomplicated I think it's easy to do that, but the simplicity of that
27:53
actually has quite a big impact on your business, doesn't it?
27:58
Yeah, definitely. It happens just pretty frequently. We had a call like last
28:04
week with one of our partners after the third order, as example, the repurchase
28:09
rate is decreasing by a lot. So they asked me, yeah, what can we do about that?
28:14
And the first thing that I tell them, let us just check out the numbers. So what
28:19
we see is that after the third order, there is no gifts, there is no welcome
28:25
series, there is no email, there is no getting in touch with them. So they stop
28:30
approaching their customers, to their audience, right? After the first purchase.
28:35
And I tell them, it takes us 5 minutes to fix something that you just thinking
28:41
about like 2, 3 weeks. Keep it simple. It's really simple. Just don't see your
28:46
business as an ecommerce business and super complex. Just see yourself as a
28:51
handyman, right? You're just fixing things, yeah. And if you just try to— yeah,
28:56
if you just go and do this with this mindset, that will help you a lot.
29:03
Yeah, yeah.
29:04
So absolutely, if you don't know, like, if you have really no clue, any idea,
29:08
just go to LinkedIn, just pick a few guys and ask them questions. Yeah, I mean,
29:11
I just get like tons of questions every day on LinkedIn and I'm just always
29:15
answering them. Even, even if I don't answer them, yeah, it takes maybe a day or
29:19
even two. I just get a reminder from my team, hey, there's a, there's a, there's
29:23
a message open, and then I answer it, right? It takes me only a couple of
29:26
seconds and also takes you maybe a minute or even two to, to figure out, yeah, a
29:30
few experts on LinkedIn and ask them. If you have like asking 5 or even 10
29:34
people and from this 10 people, 8 people say the same thing, So what do you just
29:38
need to do to fix what these 8 people say, right? Yeah. So at least you can try
29:41
it.
29:45
Yeah, exactly. And again, everyone, like you say, I love that everyone's quite
29:50
happy to answer questions on LinkedIn. Um, it's, it's, it's what people want to
29:54
do. It builds exposure. So I think it's a win-win.
29:59
Definitely.
30:00
I'm reminded actually, as I'm listening to you talk, uh, Cem, of Elon Musk, who,
30:05
I mean, love him or hate him, you know, I appreciate he's quite a polarizing
30:09
character. Um, his whole ethos, it seems to me, in business is understand what
30:14
the biggest problem is we have at the moment right now. Let me put my undivided
30:19
attention on fixing that problem and getting in people that I need to, to fix
30:23
that problem. We fix it, and then I go on to the next biggest problem, and I
30:28
just rinse and repeat. And he just travels around the world around his companies
30:33
fixing the biggest single problem that they're facing. Um, and I think it's,
30:37
it's, I appreciate his approach is not necessarily for everybody, but we can
30:42
definitely learn from that approach, which says, what's the biggest single
30:47
problem in my business right now? Um, and how do I go and fix it? I, I almost
30:51
wonder actually whether people would be able to answer the first question,
30:56
what's the biggest single problem in my business right now?
31:03
I mean, to keep this also simple, look what he does with Starlink. We have an
31:08
issue on this planet that doesn't matter where you are. There are regions or
31:14
even countries which have bad connection. Yeah, he fixed that with Starlink.
31:20
Yeah.
31:20
If it's the best solution, definitely not. There will be something better in
31:23
maybe the next years or something. But if it's fixing the problem, Right. That's
31:26
the only thing that counts.
31:29
Yeah.
31:29
Right. So you fix that problem and you can fix it for a reasonable price point,
31:34
period. That's the point. And this is also something that people need to
31:38
understand. You don't need to just always fix 100% of it. If you just can fix
31:43
the core problem, which makes things easier, that's most of the times enough.
31:47
Just thinking about the Pareto principle. Right.
31:52
Yeah.
31:52
So principle. So if you just can fix 80%, yeah, the 20% comes over time. Yeah.
31:55
But fixing 80% of the issue is usually the things that brings— that let you move
31:59
forward.
32:03
Yeah. It's the thing that moves the needle. Definitely.
32:06
Exactly. Yeah. So did I— I'm a big fan of Starlink. Definitely not. Did I use
32:10
it? No, I don't need it. But I even know that in my city where I'm living in
32:15
Düsseldorf, there's a lot of people which has bad connection, just bad internet
32:19
connection. And I just see how the Starlinks on the roofs are increasing.
32:24
Yeah.
32:25
So, and why is this so? Because it solves the solution really simple. You just
32:27
get it within a few weeks.
32:30
Yeah.
32:30
Everything is easy to set up. It solves a real core issue. Yeah. About being
32:35
online on everywhere. And that's pretty much what he's doing. Right. And I
32:40
personally, if you just ask me, I'm also not the biggest fan of all everything
32:45
that he's doing. Yeah. But his approach in business is really impressive.
32:50
Yeah, no, absolutely. Absolutely. I'm just thinking when you, when your
32:56
customers see you solve problems as well. So you identify problems, you fix
33:01
them. But I think when customers see you identify problems and fix them, that
33:06
helps with retention, which goes back to your point earlier. And it feels to me
33:11
like this is maybe the foundation of good customer service.
33:19
Definitely. So something that I just implement with my team a while ago is
33:24
because with the help of AI for sure, right? Everything is just going much
33:30
easier in these days. We build a system that is just frequently updating,
33:36
talking about the pain points and at the same time the system just understand
33:41
our language really good and we are so proactive. Yeah, so insanely proactive
33:47
that, that they basically, yeah, just getting all the information upfront before
33:53
they even think about a lot of things, right? So, but here's one thing. So the
33:58
biggest positive reviews that we just get is usually like, hey, you guys changed
34:04
my thinking, my mindset, and I start to understand things much easier because I
34:10
don't start to think about them. I go instantly in trying to solve these issues
34:15
and going in the execution mode, you could say, right?
34:21
Yeah.
34:21
So yeah, that's definitely a point, right? So the biggest retention or the
34:25
biggest feedback that we get is that we just changing how people see certain
34:28
things in the space.
34:32
Yeah. Yeah, that's fair point. It's fair point. Fair point. I How are you using
34:38
AI to help you? I mean, you mentioned it to track— well, maybe not track is the
34:44
right word, but how are you using AI to help you with this concept of fixing
34:50
problems, data-driven decisions and stuff like that? Have you found any tricks
34:56
and hacks with AI, or are you kind of like a non— well, clearly you're not a
35:03
non-AI fan. I'm just kind of curious where you guys are at.
35:10
Yeah, I'm just a huge AI fan. Yeah, but I don't think that AI is the one
35:15
solution that will change everything. I still think that humans need to be
35:19
involved, otherwise this will not work. How we use AI is also pretty simple,
35:24
actually. So what AI is doing and what AI can do better than you would ever be
35:29
able to do is just checking data and figuring out loopholes and see things that
35:33
you maybe don't think, see. Yeah. So just let us say I'm just looking on the
35:38
keyword list with 5,000 keywords. Yeah. It takes a while for me to figure out
35:43
which keywords could be a good cluster or a good topic that I just can talk
35:47
about in the next ads that I plan for. Right. So, but if you just give this to
35:52
AI and saying like, hey, just please check our data, just make a research. And
35:57
also create a Notion database as example, right, about these topics, get
36:01
references from the internet about benchmarks and other stuff. Yeah, you can
36:06
just train an AI to speak your language, giving him to understand exactly what
36:11
you're looking for. Yeah, you just give him now the keyword list, he do the
36:15
Notion database. Yeah, just create a big database. Yeah, about benchmarks as
36:20
example in the ecommerce, about KPIs and other stuff. And then you say like,
36:25
hey, Here's a keyword list, about 500 search terms that we just have in the last
36:29
3 months in our Google Ads account. Can you just build up clusters?
36:34
Yeah.
36:35
And topics that make sense to talk about because we see good results over these
36:39
search terms. And in the next step, can you just build us— let us say it's a
36:43
problem-solving product. Can you help us to build editorials for that? Right.
36:47
What is AI doing? He just figure you out clusters for keywords that are working
36:51
good combined together because they're talking about the same issue. And at the
36:55
same time, you just get a prompt or at least a mind map, a roadmap about like
36:59
how your advertorials should be structured for, right? But for doing that, for
37:03
sure, you just need to give them examples. You just need to feed them with
37:07
advertorials, with rules and advertorials. And see the World Wide Web as a big
37:11
database for information. So you can just grab basically for every topic these
37:15
kind of information, right? You just want to know how to do advertorials. Just
37:19
check competitors and ask the internet. You just want to do listicles, do the
37:23
same. Yeah, you can just basically do this for every topic.
37:29
Yeah, yeah.
37:29
So yeah, even, even Reddit is one of the best sources that you just can think
37:34
of, right? So if I have an issue, I usually ask Reddit in past, right?
37:39
Yeah.
37:39
So now I ask Reddit and Claude. So what I do is like, hey Claude, can you just
37:43
check out please how I solve issue XYZ? And also just check out Reddit if you
37:47
just find something for that. Yeah. So I just telling it specifically again. I'm
37:51
not sure if this is necessary actually, but, but for me it's getting better
37:55
results.
37:59
Yeah. Yeah. No, I'm the same way. I, I, I, I use Claude. I, I will check it. I
38:03
would check, tell it to check Reddit. I used to tell it to check Amazon as well,
38:07
but to find out problems that people were having with products like ours or
38:12
similar products. That's not as easy to do now. But yeah, I, I think it's Like,
38:16
yeah, AI is just one of those really interesting tools to help you with a lot of
38:20
this data analysis right now. You don't need to hire, it seems you don't need to
38:25
hire, um, depending on the size of your business, of course, a data scientist to
38:29
help you unpack a lot of this stuff now.
38:34
Yeah, it's getting even easier, right? So let us say you are just an ecommerce
38:38
founder and you will start your business. Yeah, everyone just tried to reinvent
38:42
the wheel. You don't need to. Go to Amazon, check a product out, check the
38:47
reviews. Yeah. Now you can do with AI. In the past, you was doing it manually.
38:51
Just figure out what you could do better. Create a product that is doing better.
38:55
Yeah. Point. Right. You have a new product.
39:00
Yeah.
39:01
You don't need to do like reinvent something. Yeah. We are not trying to get
39:05
billionaires that are just changing in the whole industry or sector. The goal
39:08
here is to build an ecommerce brand and maybe exit it for 50, 100, or even 200
39:12
million in future, right?
39:17
Yeah.
39:17
So just check what your competition is doing, figure out what you could do even
39:20
better, right? Collect all of these reviews, collect all of these points, and do
39:23
it better based on the data that you already have on their, on their pages,
39:26
right?
39:29
Yeah. Yeah. No, absolutely.
39:31
Simple as it is.
39:32
Yeah. The, the old simple rules still work. And they work very well. Even in
39:37
the, in the age of AI, it plays those rules better. Maybe it doesn't really
39:42
change them. Cem, listen, let me do the question for Matt section while I
39:47
remember, because I quite often forget. This is where we have reached the
39:51
section of the show where I ask my guest for a question for me. I will take that
39:56
question and I will answer it on social media. So if you want to know how I'm
40:01
going to answer this question, come follow me at Matt Edmundson. LinkedIn or
40:06
Instagram. But Cem, what's your question for me?
40:12
Oh, I mean, there are so many questions I would love to ask you, Matt, to be
40:18
completely honest. If you compare your biggest success with your biggest
40:24
failure, which one teach you usually more is failure for sure, right? But are
40:30
you, are you sure about that?
40:37
Okay, am I sure? That's a really interesting question. Okay, yeah, yeah,
40:41
because, okay, well, no, I'm gonna say social media. I really want to get into
40:45
that. That's a really fascinating question. Uh, well done, Cem. Thank you for
40:49
that, uh, question. Um, if people, uh, want to reach out to you, if they want to
40:53
connect with you, find out more about what you do, maybe get you involved in
40:57
what they're doing What's the best way to do that?
41:02
I mean, I'm just really active on LinkedIn. So if you have any questions, just
41:06
type in my name on LinkedIn. Yeah, ask me a question. Just, yeah, let me know
41:11
what the issue is that you just have and yeah, maybe we can help you to fix this
41:15
up. Yeah, it's really simple. Yeah, I just posting also a lot of content on
41:20
LinkedIn. So if you are just in the marketing space, in the growth space, you
41:24
can also just just, yeah, grab a few free resources, or, or a lot of resources
41:29
over the last year, uh, that can help you definitely to optimize and fix a lot
41:33
of the issues that you have.
41:38
Yeah, fantastic.
41:39
Because I'm, I'm not like these personal brands who are talking like, hey, I'm
41:42
so great because we do this. No, I just only post things that I actually use in
41:45
my daily business.
41:49
Yeah, good. Well, make sure you follow Cem on LinkedIn. The link The LinkedIn
41:54
link. Yeah, that's right. I'm just saying it again in my head. The LinkedIn link
41:59
or the link for his LinkedIn will be in the show notes, which if you just scroll
42:04
down on your podcast app will be there. If you're watching on YouTube will be in
42:08
the description. Of course, if you're on the website will be at
42:13
ecommercepodcast.net. They will be there. And if you're subscribed to our
42:18
newsletter, so many options these days. If you're subscribed to the newsletter,
42:22
you will also find the link to Cem's LinkedIn in your inbox. But Cem, listen,
42:27
this is the part of the show we call it saving the best till last. And this is
42:32
where I like to ask my guests, for those that have remained to the end, I'd love
42:36
your best advice, your top tips. And the thing that I'm thinking of is right
42:41
back at the start, you talked about not controlling certain key metrics in the
42:46
business, not knowing certain key numbers. And this seems to be a recurring
42:51
theme. What are the handful of metrics every ecommerce entrepreneur should know
42:55
in their business and why?
43:02
So, um, the first thing that is coming up to my mind is for sure, um, what is
43:06
your customer acquisition cost? What is your AOV? What is your new customer
43:11
share? Yeah, how, how much? Yeah, what is the percentage of these customers
43:16
which are coming in are new? Yeah. What is the LTV for sure? And also one thing
43:20
that, yeah, a lot of people are just getting more and more on their side is
43:25
repurchase rate. These are not the most important things, but if you just have
43:30
control about these 5, yeah, there is a lot of more control that you just have.
43:34
Yeah, because if you just check out these numbers and they work together in a
43:39
system and it makes sense, right? So if you see there is enough margin, there is
43:44
enough revenue, there is enough, the AOV is big enough, the customer acquisition
43:49
cost, is great. So you're just doing enough profit each order, right? So that's
43:53
something you just can work with.
43:58
Yeah, fantastic. Yeah.
44:02
So that's— but actually, I'm just thinking about the advice also, but because
44:07
there is one advice that I just basically stole. Yeah. So I hear it in a podcast
44:12
and it's really true because when I was listening to this podcast, I was like,
44:17
oh my God, this guy is so goddamn true. He said two things which just really,
44:23
yeah, hits me. Yeah, he said like, make— just work so hard and so much that it
44:28
makes it unreasonable to not succeed. Yeah. And, uh, be sure that pace and
44:33
execution is not the last thing you are just caring of.
44:39
Yeah.
44:41
I, I mean, I was just really impressed about that because, I mean, we all know
44:45
that, we all think about this, but no one is just talking about that, right? So,
44:49
and I mean, just thinking about like doing ecommerce and saying like, yeah, I
44:53
just only do like 5 up to 6 hours a week and my business is still scaling, it's
44:57
not working. Ecommerce brands are working the best and scaling the fastest if
45:01
you are just in a position where you're just really feeling yourself
45:05
uncomfortable. Yeah, that's what is my experience. Yeah, ecommerce is doing fun
45:09
when you are just testing new things, doing crazy things, just expanding to new
45:13
countries, doing new channels. Yeah. But only if your core is for sure stable.
45:17
Yeah, that's actually the thing. Yeah, that I really believe in.
45:22
Fantastic. Well, Cem, thank you so much, man. Uh, lots of notes, uh, again, as
45:26
always, uh, uh, lots of things to think about, but appreciate you coming on the
45:31
show. Thank you for sharing your, uh, wisdom and your insights all the way from
45:35
sunny Germany. It's been, uh, it's been a cracking show. Thank you so much.
45:40
Thank you so much for your time, and it was also a pleasure to be here.
45:43
Wonderful, wonderful. Wow, ladies and gentlemen, there you go. Another episode
45:47
all wrapped up of the eCommerce Podcast. Wasn't that a great conversation with
45:52
Cem? Make sure you reach out to him. Like I say, the links to do that will be in
45:56
the show notes wherever you get them from. But that's it from me. That's it from
46:00
Cem. Thank you so much for joining us wherever you are in the world. We wish you
46:04
a phenomenal week. But until next time, that's it for me. Bye for now.