Latest / Talk Commerce / Turning Marketing Into a Profit Control System with Cem Atik
Transcript
- Brent (00:02.274) Welcome to this episode of Talk Commerce today. Today I have Cem Atik, He is the founder of Harucon Ventures. Can't Cem, go ahead, do an introduction for yourself. Tell us your day-to-day role and one of your passions in life. Cem Atik (00:16.909) sure. Thank you for intro, Brent my name is Cem. I just born and grew up in Germany. stay in marketing for a couple of years right now, 13 in total. I'm I'm the CMO and co founder of Harucon Ventures. We basically do buy and build in e commerce. So what other people do with real estate, yeah, we try to do or do yeah in e commerce. To keep it simple. Yeah. Brent (00:40.876) That's awesome. And passions outs put passions outside of marketing? Cem Atik (00:47.545) I I do judo for over twenty years and started like four like three years ago again with it. So I would say judo. Brent (00:57.004) That's awesome. Yeah, my son is big into judo judo and jujitsu. So anyways, yeah. Yeah. Cem Atik (01:01.627) Wow. The combination is is is yeah, really, really so Brent (01:06.71) If we ever get over to Yeah, perfect. Cem, before we get started though, you have volunteered to be part of the Free Joke Project. I'm gonna tell you a joke. You just give me a rating eight through thirteen. So here we go. My wife yelled from the upstairs and asked, Do you ever get a shooting pain across your body? Like somebody's got a voodoo doll and they're stabbing it. I probably I replied, no. She responded How about now? Cem Atik (01:43.015) I mean, yeah, it it's it's it's a solid one actually. I would say a twelve. Yeah, a twelve is okay. I like that. Yeah. Brent (01:52.0) All right, perfect. I I I've I've spoken a a a bunch of times in Germany and I like to put up the slide, the German flag, and I put up the different what what the different ethics in Germany are different values in Germany and I put up like hard work for orange and I and then I put up blue for humor. And I sometimes get a laugh and sometimes you know, I had e commerce and they're always so s it Cem Atik (02:13.894) Yeah. Brent (02:19.918) They're very serious. Doesn't matter. All right, let's get started. Yeah. so you know, I think in in the green room, we started off. I like this idea in you had in your notes, turning marketing to a profit control system. My personal view on marketing is marketers often overlook overlook all the data that's there for marketing. And if you're don't, if you're not tracking your data, you're just flying blind. Cem Atik (02:23.684) Yeah, Germans. Germans are a bit difficult. That's that's correct. Brent (02:48.238) So l kind of start off with that and tell us your thoughts and and some of those things you had around that. Cem Atik (02:55.32) Yeah, I just started to think about this profit growth engine as a whole system like like seven years ago, I think. when I when I was really deep into marketing and doing a lot of operational stuff, I figured out that exactly that happened. Yeah. Everyone is seeing the numbers, but no one is really digging into them, yeah, and just understanding exactly what is going on there. I mean, today it's easy, you just get the access sheets, put it into cloud. Tell me, yeah, show me the loopholes, show me the bottlenecks. But in past, that was for sure, yeah, really hard. Yeah. to do data-driven decisions based yeah, on a two-build-in growth engine was in the beginning really difficult. Yeah. So because I mean Excel sheets over and over, yeah, and I was just like thinking like thinking like, hey, what could I do here? after I just realized something really crucial, which was that every brand is basically doing most of the time the same issues and I realize that there's a pattern, yeah, that I can follow and start to use. Yeah. So I started on smaller accounts and it's going over bigger, bigger. And I just use always the same pattern, a bit different for sure, right? Based on brand, based on industry, to figure out, okay, is this something that I just could use basically everywhere? And after a while I realized that is possible. Yeah. really the most important thing in the beginning is that you just have full control about your unit unit economics. What is coming in, what is coming out, how much I pay for my products, how much I pay for fulfillment, all these numbers. Yeah. You just need to be familiar with that. If I just woke you up at four AM in the morning and ask you what is your cost per acquisition and if you just don't fire me that answer within like two seconds, yeah, then you are definitely doing something wrong. Yeah. So and yeah, then I sorry. And and and that's something that I that I understand that Brent (04:45.452) Yeah, that's I mean the that's yeah, go ahead. Sorry. Cem Atik (04:51.926) that that marketing is starting on unit economics, yeah, combined with with performance and retention and all the other all the other pillows for sure. pillars for sure. Brent (05:02.286) Yeah, I'm a big believer in the EOS system, entrepreneurial operating system, and you get a scorecard and you get numbers and and there's all kinds of things that are in place for you and that you should have a dashboard that you run by and diff different roles in the company should know those numbers by their dashboard. So you know, let's let's talk a about a couple of roles as the CEO, and you gave us an example of just your cost of acquisition or CAC. tell us tell us some of those numbers that's so important that as a leader you should know. and then maybe let's go into what as a CMO you should know more deep into those numbers, right? Cem Atik (05:41.009) Yeah. I mean the the the common metrics, I mean, everyone have them on on their hand usually. Yeah. What is my marketing efficiency ratio? What is my ROS? What is my POAS? Is getting more and more popular popular, profit on ad spend, yeah. what is my costs? Yeah. what is my CTRs on campaigns? What is my conversion rate? That's great. But there's a bum bunch of numbers that no one has really on view, like how much my product costs until it arrives to the customer. Yeah. So that means product costs, shipping costs, and also fulfillment and all the costs together. Because usually you have all this cost separated, but no one sees this as one element. Yeah. So what my pro how much my I pay for my product plus the shipping together until it reached actually the customer, right? So that's a really important yeah, metric that at least everyone should track because that's really crucial, right? So that's one thing that I always just like to implement because we have benchmarks because we're just working with so many different brands. So I know okay, cost cost of good sold should be in this range. Yeah, fulfillment costs should be in this range. And if I see something is just really off or much higher than than usual, yeah, then I can work out to figure to fix that. As an example, really simple, we had an store we are working with together, and I sent, first of all, a test to to the founders, yeah, basically a character test. So they There is a test about like to see who who's the guy who's doing the operations, who is the guy who's doing the managing, right? So we always send a test to get an idea about what what people are actually doing. so what you figured out really quick is is that the operational guy is really great, but the management guy is setting everything up once it's running, and then he didn't just try to adjust or optimize overall. Yeah. So I get in and see, like, hey guys, you are losing like four dollars each package because you're packaging the product in UK instead of making the package ready in China. Yeah. So as I I just make them clear that it's much, much more better and simple to yeah mm finish the whole packaging in China and then send it to the fulfillment center in UK, yeah, and then to ship it out. You ch you sa save a lot of time, a lot of cost. I mean we know all the pick packing codes in US and UK. Cem Atik (07:59.471) In in Europe, it's insanely expensive. You pay like two up to five dollars sometimes. Yeah. So you just need to be careful there. yeah, that's pretty much usually usual the start that we are just really looking. Okay, what are the core metrics that that needs to be fixed here? Yeah. If you just have for everything a benchmark, it's much easier because you just figure out, yeah, that's what I mean with pattern before, you figure out what is off here and you can instantly go and fix it and also make a priority list for sure. If I know that as example, cost of goods should be something between fifteen up to twenty five percent. That's the standard in e com. Yeah. If you just if I have to if I have twenty eight, twenty, twenty, thirty-five percent, I need that that I d just need to fix this as soon as possible because I losing money while I'm buying it. I losing money while I buy my product, right? And yeah. Brent (08:53.26) Yeah, that's really that's really br yeah, definitely good stuff there. you know, you had mentioned using Claude or using AI to help you with your numbers. I think there's a warning there for people, and it really is Claude or I'm a any LLM doesn't necessarily look forward. It looks sideways. So you have to be there as a human to make sure that whatever it's telling you is what you what is it that you're asking for and Cem Atik (08:53.284) That's actually how this engine starts. Brent (09:23.19) I guess the second part is that it that does have slippage. No matter how hard you train it, it will slip to its mediocre mediocrity at some point. So without some kind of mechanism to to double check on something, or or just even a you know, like you mentioned, a benchmark is a great example of how to how to tune it. talk a little bit about how the role of AI and the role of AI and marketing. Cem Atik (09:50.011) Yeah, so AI is just yeah getting more and more important. I work with AI since two two years right now and I'm a huge fan of it. I just spent endless hours in the rabbit hole, yeah. staying at night, l awake long. Yeah, my wife is really unhappy about that, right? but I'm just a bit I would say l a little bit addicted to AI, definitely. AI is important, but AI is only that good, like you Teach AI. So that means when AI is doing mistakes, that's usually a communication issue by you, not by AI overall. So AI is just tries always to be a mirror. Yeah, a mirror. So just think about like you are just mirroring yourself with more knowledge about the whole topic, maybe about the whole industry, because it yeah, it's it's like in library which can just get yeah, all kinds of researches within a a few minutes right now. Yeah. AI is really important. But something just needs to be clear here. I double check every number at least two times to be 100% sure because AI can look sideways, AI could also understand things differently because there is no emotion behind that. I'm not a friend to put a lot of emotion into business, but sometimes it's important. As a as example, if I see that we create a new ad and the CTR rate is really high, but we don't have any sales. Yeah, as example, the small smallest idea. Hey, I will cut that after we spend it spend a certain amount of budget because there's no sales. Yeah. But if I see a a and significantly higher CTR for a product, let us say for females, right? They have like back pain, something like that, right? So I know that With with such a high CTR that I just need to fix something on my website, maybe, or somewhere else, or maybe wait a bit more and spend more because the product is more expensive, right? I just need to wait and figure out what is the issue. AI will cut it because it's not working. Yeah. So, and there's two ways how you can solve that. Either you train AI to understand that, yeah, or you just keep it as an as an as a non emotional system that is doing decisions based on based on data driven decisions. Yeah. Brent (12:03.704) Yeah, that that emotion piece is really important. AI AI has no emotion and as long as you as even if you do capital all caps and start yelling at it, it doesn't really care or understand why you're doing that. and I you know, I I I wanna kinda go on that click-through rate, because I think a lot of what we're hearing from the industry is that click-through rates are going down. Maybe even if sales are flat, click through rates are down, so it's harder to measure. your effectiveness of some of these of these different metrics. Talk talk a little bit about what people should expect from the different metrics and what's coming up. Cem Atik (12:42.032) So first of all, I mean I didn't see a whole CTR drop over the over the last years, but what I see is that we yeah, we s we we see a bigger difference between good and bad ads. Yeah. As example, when we're just thinking about sales, yeah, a good salesman sells outcomes, solutions, results. A amazing salesman sells feelings. That's exactly the same on your marketing campaigns. If there is a headline with saying like brand's official store, yeah, that's basically something that yeah, just yeah, tell you that this is brand store, right? And his official store is yeah, right there into the behind this link, right? But if we say like get free of back pain or sol solve your back pain issues in no time, yeah. That's an emotion or and solution, right? So you have two things combined. So you have back pain, that's a huge pain that you have, and there is a solution that is behind this link. So you combine two things. And what I see is more and more the separation between really good headlines and descriptions or or ads and and all of these things and bad ones, right? So as example, the benchmarks on on Google is something between two and five percent for ads, right? So when when I just check accounts that we just run with really emotional driven products, yeah, our CTRs usually are over 15 up to 25 on average, yeah, even on generic keywords. So not all of them for sure, but but but but a bunch of them. And that means that you just really need to yeah, communicate differently these days, more solution, more solution driven, more feeling and outcome driven. And also just play with them what you have. If you have 5K reviews in your store, 100k. one million one million reviews talk about them if there's experts that that just yeah love your products talk about them and say like hey this and XYZ expert approved yeah why you don't do that so it's really about the messaging overall I don't see any C huge CTR drops to be honest to be fair you know in in all across the industries. Cem Atik (15:04.262) Sorry, you're muted. Brent. Brent (15:06.198) I'm sorry, yes. The emotional component in there I think is so important. And I think many people overlook that, especially if you're just generating content with AI, that the content it generates is emotion free, right? It's an emotion free content. It it maybe try to mimic some emotions, but humans really dive into that emotional part of it, whether however you're doing it. what sort of w what what what are you seeing as success in marketing right now and do you think that there's an overabundance of AI driven marketing and I I'll even sh I'll even go like it seems like everybody now is doing AI images and some AI video. I tend to just skip that. Like I'm not even interested in looking at it because I know nobody it's possible nobody bothered to even look at it before they've published it. But what what are you seeing? What what kind of trends are you seeing? Cem Atik (16:05.232) So what I see is that AI is reducing a lot of manual work. ro a lot of manual everyday yeah same thing tasks, yeah. So that for for for your for that kind of stuff, AI is really good. But especially about i i if you just need to s yeah read a bit behind the scenes, I would say. Like like if you just really need to see a lot of touch points in a system, yeah, then AI is Is not at this point that you could say like, okay, we are just yeah, able able to also figure this out or automate this with AI. Or maybe I'm not using AI ac actively and successfully enough. This could be also for sure, right? but yeah, I see AI as a huge leverage, as a huge opportunity for changing a lot of in in our industry. Yeah. I mean there's a lot of rumors like like a in like ten years or five years we will not have any jobs, everything will be managed by AI. I don't think so. Actually, I think there is still a human required to understand, communicate, and work together with AI. I think if we are just can build a team, that's much more worth than just letting AI do everything. Because that will never work. Yeah. Because we are too different. Right now. Maybe maybe maybe different in a few years. Brent (17:26.188) Yeah, I mean i there's def yeah I mean there's definitely a myth about the amount of of decisions a human can make when managing an AI bot. And I would I would disagree when people say that, hey, I can just be by myself as a CEO and then I'll hire a CMO and a CFO and they're all just all just AI bots. 'cause I think the amount of information that they're giving you, you have to decipher. And especially if you're doing it at scale or at speed, that information is ultra critical. And if you make that wrong decision, AI goes down the wrong road and suddenly your whole thing, your whole marketing campaign is off kilter because of a decision that ChatGPT has made. Cem Atik (18:16.998) I mean there is ways to avoid it actually, to just tell always AI that he should be your sparings partner, that he should be brutally honest, that he should always make a research about every statement that you give to be hundred percent sure that that you are yeah, not not incorrect, yeah. things like that. But yeah, you're right. So AI is still your mirror and it's it's acting like you w want to li li yeah, like to him act. Yeah. So that's why it's really important. To understand these, if you just do a mistake, yeah, or better to say if AI makes a mistake, you made this mistake, and then you just need to figure out first what is the mistake was to maybe fix their understanding and go further. Yeah. So if you just have an issue and start a new conversation, you didn't change anything because you didn't like bring to understand, yeah, what exactly was the problem. So it's really important to talk about the problems and solve that. I mean you can criticize AI as much as you want. AI is no feeling, right? If you just criticize me right now, maybe maybe after a while I will be just pissed. This could be, right? But AI is here and is our partner and it's it's there to help you to make your stuff better, right? So use it as as best as you can. That's that's what I would say here. Brent (19:34.23) Yeah, yeah. I mean I yeah, and then my warning is always that there should it should be a human as part of that, as part of that mechanism. And as as a leadership team, I believe that a group of humans are still gonna be are gonna have more creative ideas than a group of ClaudeBots or eight chat GPT bloc bots or whatever. I think that there's a group of people that are gonna come together and they're gonna find different things. that are new even, like maybe we find something brand new that's new to the world, that's not gonna come from Claude or AI, that's gonna come from a human being. Cem Atik (20:11.236) I think so too. But honestly, my my impression is that we only see maybe zero point one percent so far from AI. I have no idea about this will be in fifteen, twenty years, twenty five, thirty years. It could change. I really hope that will not change because if the creativity is not coming from the humans, yeah. then it will be really hard to understand why AI needs us overall. Maybe it sounds weird, but I mean That's the thing, right? Brent (20:40.916) Mm-hmm. Yeah, I mean, I think as a marketing professional, you could get very lazy and just depend on AI for everything and forget forget about being I mean, at that point you're just all you are is an administrator, you're not a creative person. So I think that inherently there's there there's a a need for humans to be creative and they have a they have a part to play. And I think taking them out of that is a mistake, whether it's efficient or not. Cem Atik (21:01.979) Yeah. Brent (21:10.362) so Cem, we have a we have a few minutes left, dear. Wha what what are you seeing? What what are you excited about for this re for the rest of the year? What are you what are you excited about? Cem Atik (21:21.872) Honestly, I would just be really excited about w when we see that more and more people are actively using AI and just putting the time into it to understand and just yeah, make enough enough research to really be able to increase the usage of AI. Because I think even in the in the in the most simple industries which are totally manual, let us say accounting, let us say hand demands, let us say plumbing, yeah. AI can do things easier, which otherwise people would do every day, yeah, manually, which is ex exactly the same work every day and every day again. I think I think AI can solve huge issues, yeah, especially for manual work, yeah, or processes. And we should definitely yeah, use it carefully and wisely, yeah, as much possible as it is, yeah, to yeah make our life easier. I'm I'm a huge fan Yeah, of of this vision. Brent (22:24.204) Yeah, that's awesome. So Cem we have a few minutes left now. I've s as we close out the podcast to give everybody a chance to do a shameless plug about anything they'd like. What would you like to plug today? Cem Atik (22:35.398) honestly it's it's really simple and straightforward. I just like to share a lot of value. That's actually what I do every day on LinkedIn. So when you hit me when you have a question or if anything is unclear, feel free to hit me hit me up on LinkedIn. I'm there to answer on every question. I share every day tools and yeah, tips and other stuff that I use for our operational business every day. Yeah. Yeah, and that's pretty much it. Brent (23:02.264) That's perfect. And on Link in your SEM ATEC ATIK. SEM - ATIK How else can people get in touch with you? Cem Atik (23:12.534) also over our website, yeah, Harucon-Ventures.com I just can yeah, send you over link. And yeah. Brent (23:20.878) Yeah, we'll we'll make sure we get all those in the show notes. Sem, it's been such a great conversation. Thank you so much for being here today. Cem Atik (23:24.218) Okay, perfect. Cem Atik (23:28.102) Thank you so much for the invite.