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Ecommerce In Uncertain Times with Raul Galera · eCommerce Podcast

0:05
Matt Edmundson: Well, hello and welcome to the Ecommerce Podcast
0:08
with me, your host, Matt Edmundson. Now, this is
0:11
a show all about helping you deliver Ecommerce.
0:15
Wow. And to help us do just that, we've got a
0:19
special guest, someone who has been on the show
0:21
before, Raul Galleria from Referral Candy. Now,
0:27
Raul was on the podcast in 2021. We talked about
0:30
referral marketing and if you've listened to that
0:33
episode, you'll remember how good it was. So I'm
0:37
really, really looking forward to this
0:40
conversation and getting going again. Raul
0:42
reached out to me a few weeks ago and said, matt,
0:44
I've got some really interesting stuff. Can we
0:46
chat about it? And I'm like, of course we can. Of
0:49
course we can. And before we get into it, let me
0:52
just say very warm welcome to you. Especially if
0:54
this is your first time with us on the Ecommerce
0:57
podcast, It' great to meet you. Do reach out to
1:01
me on social media, Edmundson. You'll find me on
1:05
LinkedIn, on Instagram. It'd be great to connect.
1:08
Let me know what you're doing, Let me know about
1:09
your business. I was just talking to a chap
1:11
called Dylan earlier on today. Dylan, if you're
1:13
listening, hope you're doing well. And we were
1:15
chatting about his ecom business and he said to
1:18
me he found the podcast in August, right. And
1:20
bearing in mind the time of recording, this is
1:22
October and he's already caught up. Right. And
1:25
we've been on air five years. That's some going,
1:28
not going to lie, some going. And I just have to
1:31
apologize for the sheer amount of my voice in
1:34
that time. But anyway, do reach out. Be great to
1:37
hear from you, great to connect with you and of
1:39
course, if you are a regular to the show, a warm
1:42
welcome back. Now, let's talk about Raul. He is
1:46
the chief advocate at Referral Candy, which is
1:49
the go to app for E commerce brands looking to
1:53
grow through customer referral programs. He has
1:56
got over 10 years of experience. He's been a
1:59
Referral candy a wee while, as we say, which has
2:03
empowered 30,000 plus brands to turn their
2:06
customers into a marketing force. Love that
2:10
phrase. For the past five years, Raul has led
2:12
partnership efforts connecting with marketing
2:15
agencies, media and tech companies to boost
2:19
growth without spending on ads. So, Raul, welcome
2:23
to the show, man. Great to have you back. How are
2:25
you doing today, good sir?
2:27
Raul Galera: I'm doing pretty good. Thanks for having me again.
2:30
Matt Edmundson: Oh, no worries. Always great to have you back on
2:32
the show, man. Always great to talk to you. We
2:34
were talking before we hit the record button I'm
2:36
sort of slightly envious of the weather that you
2:38
have where you are versus the weather that we
2:40
have where I am. You need air conditioning, I
2:42
need a heater. And it's amazing because we're
2:47
only a few hours apart how just a few degrees on
2:50
the old equator changes everything. But, you
2:51
know, there it is. So it's been what we were
2:55
saying. In fact we looked at the date. It was
2:58
sometime late, late September, wasn't it? When
3:00
you're on the show in 21, which is, it's almost
3:03
like you said, the three year anniversary.
3:05
Raul Galera: Yep.
3:06
Matt Edmundson: So what's been going on the last three years?
3:09
Raul Galera: A lot. Yeah, we talked end of 2021, which we were
3:18
pretty much still at the peak of kind of like
3:22
Covid fuel Ecommerce growth. You know, 2021 was
3:26
still a year in which companies were getting, you
3:30
know, crazy amounts of funding. Everyone in the
3:33
space was, you know, growing with again just like
3:35
cheap borrowing lots of money available for, for
3:39
funding for DTC brands. So things were going
3:43
pretty well for everybody, you could say in the
3:46
Ecommerce world. 2022, we started to see a little
3:49
bit of a, kind of like, you know, darker clouds
3:52
in the horizon and that kind of materialized in
3:55
2023, I think, in which I was just talking to a
4:00
few people a couple weeks ago about it and you
4:04
know, I was saying how some brands in 2023 said
4:08
that, you know, it was almost a flat year. And
4:11
some of them said actually flat year being a flat
4:14
year was almost like the, the positive scenario,
4:17
you know, for, for a lot of brands, like if you
4:18
were just flat on 2023, you know, you could, you
4:22
know, pat yourself in the back and you know, it's
4:24
like, good job. Right? You kind of, you made it.
4:27
That being said, we had a lot of growth around
4:30
the Black Friday and Cyber Monday mark last year.
4:33
A lot of people say that it was, you know, fueled
4:34
by, you know, kind of like buy now, pay later
4:36
type of debt, that we don't know what's going to
4:39
happen in the future. But I mean the numbers are
4:41
there and you know, we're entering again since
4:45
October 7th. Today we're heading into Black
4:49
Friday Cyber Monday fairly soon. Brands are
4:51
getting ready for that and there's always this,
4:54
you know, there's like this big question of
4:55
what's going to happen. It's going to be bigger
4:57
than last year. How are the US Elections going to
5:01
play out in all this? So yeah, one of the
5:06
initiatives that we put together kind of because
5:08
of all these unknowns that A lot of agencies are
5:11
having. We put together this confidence report to
5:14
try to shine some light on at least what other
5:16
people are thinking and kind of like, what's the
5:19
mood around Ecommerce agencies on a monthly basis.
5:24
Matt Edmundson: Great. So just. It says here that the confidence
5:30
report involves gathering data from around 100
5:33
agencies on a monthly basis. You guys are
5:36
creating therefore a confidence index, which I
5:39
just, I think is such a great phrase, and
5:41
tracking trends in Ecommerce, such as how brands
5:44
are spending on marketing, hiring agencies,
5:47
versus in house, and much more. So you've been
5:49
putting this confidence report together, which I
5:54
really like the idea of, by the way. Thank you.
5:57
The agencies that you're talking to, are they all
6:00
marketing agencies? Are they a variety of
6:02
agencies? What kind of agencies are we talking to
6:04
here?
6:04
Raul Galera: One thing that they all have in common is that
6:05
they are Ecommerce focused. So I would say the
6:09
majority of them are marketing agencies because
6:12
there's a bunch of questions that are about
6:13
marketing budgets. And so obviously they're the
6:15
ones that I would say the vast majority of them
6:19
have touched kind of marketing with their
6:23
clients. Probably kind of like, I would say the
6:25
main difference between all these agencies is how
6:28
they attract customers. So I would say there's
6:30
like two big groups of agencies, one of them that
6:33
are just like pure, you know, marketing ads type
6:36
of companies that focus on that or SEO, you know,
6:40
kind of type of thing. But like they focus just
6:42
100% on marketing. And then the agencies that do
6:45
like website builds or migrations or redesigns
6:49
and then kind of keep that customer on retainer,
6:52
typically with some other types of services that
6:55
may include marketing or just maintenance or
6:58
whatnot. But yeah, the one thing that they all
7:01
have in common is that they're almost 100%
7:05
focused on Ecommerce.
7:07
Matt Edmundson: Yeah. Which is great. And are they worldwide or
7:09
are they just focused in one particular area?
7:11
Raul Galera: Yeah, I don't have the numbers for me right now,
7:14
but I think it's like 50% US and Canada and then
7:17
like, I think like 30% Europe and then the rest
7:21
between Australia and Asia, Latin America. So I
7:25
mean, it's kind of leaning a little more heavily
7:29
on Europe and the US But I'm actually in the
7:32
process right now kind of getting more agencies
7:33
from Australia as well. So we can get kind of
7:36
that side of the world as well. But yeah, I'm
7:39
trying to keep it as open as possible.
7:41
Matt Edmundson: Fantastic. And so your job then is you're growing
7:44
this, you're getting more agencies on board. Just
7:47
a quick pled. Then if you're listening to the
7:49
show and you're an Ecommerce agency, then do
7:51
reach out to Raul. How do they get hold of you?
7:53
Raul Galera: Yeah, so I mean, they can find me on Twitter. I
7:58
think my ad is raulgalera D. Or just search for
8:03
roller referral candy. You'll find it. Otherwise,
8:07
on our website we have the report and we have
8:10
like a little call to action where you can, you
8:11
know, if you want to be a partner agency, you can
8:13
submit and says referralcounty.com EACI cool.
8:17
Matt Edmundson: EACI.
8:18
Raul Galera: Yeah.
8:19
Matt Edmundson: We will of course link today in the show notes as
8:21
well, which you can get along for free at the
8:23
website ecommercepodcast.net and of course, if
8:25
you're listening to this on your favorite podcast
8:27
app, they'll be on that as well. Just scroll down
8:29
and they'll be there and just click the links
8:31
through to Raul. But so let's jump into it then.
8:35
You know, you've got this confidence report.
8:37
You're talking to e commerce agencies all over
8:39
the world, all of whom Ecommerce commerce as
8:41
clients, and they can see what their clients are
8:43
doing, where they're spending and so on and so
8:44
forth. At the time of recording, it's October.
8:47
We've got Black Friday Cyber Monday coming up. Is
8:50
that a big deal right now for agencies?
8:53
Raul Galera: Yeah. And so I would say that that is probably
8:59
what is driving most of the confidence in
9:03
Ecommerce right now. Okay. So when we started the
9:06
report last year, the first month that we did
9:08
the, the first report that we put out was in
9:12
January 2024. So we started doing research on. In
9:15
December. And you know, with that, we, you know,
9:18
we're pretty much asking agencies that were, you
9:21
know, kind of in the middle of the hangover after
9:23
the Black Friday Cyber Monday and holiday kind of
9:27
season sales from last year. So confidence, I
9:30
mean, actually that was the highest level of
9:31
confidence that we've registered since, since
9:35
January. It's been, you know, going downhill
9:37
pretty much up until like June. It's when it
9:40
started to pick up again. July, August, September
9:43
have been going up, but still in the second kind
9:48
of highest month in terms of confidence has been
9:50
this month. I mean, September, but still it's
9:53
nowhere close to what we register in January. So
9:56
I have the feeling that, you know, it's kind of.
9:59
It's getting. Well, I guess we'll see. You know,
10:01
obviously if we continue doing this next year,
10:04
we'll be able to compare notes, you know, one
10:06
year versus other. But it seem to me that it's,
10:10
it's fairly seasonal in sense of like you know,
10:13
kind of like summer months, obviously slower and
10:17
like everybody's kind of always looking forward
10:20
to that. You know, black friends have Monday type
10:22
of, type of event that kind of defines the year.
10:25
And so. And again, we were talking about it
10:28
earlier where in the last year, which was for a
10:34
lot of brands was flat at best. They were looking
10:38
forward to that Black Friday Monday event. To
10:40
just see. Yeah, to see, like, okay, let's just,
10:44
let's just close the year. Like, let's just see
10:45
if it was really a flat year. It was positive,
10:47
negative, like, you know, so. But, you know, we
10:49
can't really say anything about 2023 until we hit
10:54
mark. Right. And so it looks like it's pretty
10:56
much the same happening this year. So 2023 all
10:59
over again, really.
11:01
Matt Edmundson: So people are finding it quite flat at the moment.
11:04
Raul Galera: So I would say, I mean, it's, I mean, like 2023
11:08
all over again when it comes to that excitement
11:11
about Black Friday and summer Monday. Like, it's,
11:14
it's. I don't, I don't think it's been that flat
11:17
of a year, but there has been seasonality and
11:21
again, it's not necessarily like a. From what.
11:24
Again, from what I've seen on the, on the
11:25
responses that have gone from agencies, it hasn't
11:28
been that kind of sustained growth that you're
11:32
kind of looking forward to.
11:33
Matt Edmundson: Yeah, that's interesting is if I was to think
11:38
about my own experience, I'd say 2024 was
11:42
definitely better than 2023. Yeah. Certainly in
11:46
our online businesses, in our agencies and, you
11:49
know, the people that we partner with and so on
11:50
and so forth, this year seems to have been. It's
11:53
not true for everybody, obviously, but on the
11:56
whole it sort of feels slightly better. You've
12:00
got a few key events coming up at the moment,
12:02
which I think is really interesting. In the uk,
12:08
we've got the October budget. So this is where
12:12
the government decides how they're going to try
12:14
and fill a big 20 billion pound tax missing hole.
12:18
So everyone's slightly concerned about that, but
12:21
at the same time, not. Obviously, we've got Black
12:23
Friday Cyber Monday, which people are building up
12:25
for. So I do wonder if retail sales have slowed
12:28
with the new government and everyone's going to
12:32
wait to see what happens and then obviously we've
12:34
got Black Friday Cyber Monday, you mentioned it
12:36
earlier. We've got the US Presidential elections
12:38
coming up on the other side of the pond. What's
12:41
going to happen? Who knows? It's a fascinating
12:46
one. Do you think? Are we seeing events like this
12:50
actually affect confidence or is it just me?
12:53
Because Ecommerce business owners, when sales get
12:56
down we obviously want to understand why and
12:59
sometimes we try and attribute it, you know, oh
13:01
well, the wind was going northwest rather than
13:04
southwest. You know we, yeah. Am I being crazy or
13:07
is there something in this across the board?
13:09
Raul Galera: So it's, you know, it's obviously in hindsight we
13:12
always try to look for answers to events that you
13:15
know, may or may not be correlated but something
13:18
that is. So I, that's, that's actually one of the
13:22
questions that we asked in the, in the latest
13:24
report was about US Elections. So do you think
13:27
it's going to have a positive, negative or
13:28
neutral impact on Ecommerce sales in Q4? And you
13:32
know I was expecting to just, you know we ask
13:35
agencies to rate it, you know, from, from 0 to
13:39
10. So you know, between 0 and 4 is negative, 5
13:42
is neutral, 6 to 10 is positive. I was expecting
13:45
fives all across the board. Like people just
13:46
like, you know, like, you know, I was expecting
13:48
that kind of neutral answer. No, I was, it was
13:50
actually mostly negative. So the majority of the
13:54
agencies responded that they are expecting some
13:57
sort of negative impact on Ecommerce sales. So
14:01
you know it's interesting we're going to, we're
14:03
going to get to publish another report right
14:05
before the, the US elections. So because we're,
14:08
we're planning, we're going to start planning the
14:10
October issue now and we're going to publish it
14:14
before November 5th. So it's, it's kind of
14:17
interesting if like the trend continues or if
14:18
it's kind of like a one time thing when you ask
14:20
people for the first time. But, but yeah. So now
14:24
answering your question, will they be right about
14:27
it? I guess, you know, we'll find out. Yeah,
14:30
we'll find out soon enough.
14:32
Matt Edmundson: Did they give you any indication as to why they
14:35
were negative in their opinion?
14:39
Raul Galera: So you know it's, it's, I think it's one of the
14:43
kind of keywords that I got the, you know, most
14:47
like most. One of the most common keywords that
14:49
we got from, from some of the responses and the
14:50
quotes that we got were, was uncertainty in
14:53
general. And so, and I'm tying that with other
14:58
conversations that I've had throughout the year
15:00
with other agencies. This is a theory that's,
15:03
that's going around that I, you know, I, I think
15:09
it makes sense because I've heard it from several
15:11
people and is that whenever there's like a major
15:13
event that takes people away from social media
15:19
platforms in which in which they're exposed to
15:21
ads. Yeah. Then Ecommerce sales go down. Meaning
15:26
that, you know, one example that. A couple
15:28
examples that I've kind of gathered throughout
15:30
the year and I've had some agencies kind of
15:32
confirm that that happened. So, you know, we all
15:35
remember. I think it was like, I think it was
15:37
like last year, right? The Titanic submarine type
15:40
of thing.
15:40
Matt Edmundson: Oh, yeah, yeah. Apparently there was a trial
15:43
about that recently, wasn't there?
15:44
Raul Galera: Yeah, yeah, exactly. So. But that was in the news
15:47
for like, like three, four days. Like two. I
15:49
don't remember. But apparently during those few
15:52
days in which, you know, we were looking for the
15:54
submarine, everybody was so focused on that or
15:57
like that was driving so much of the attention
15:59
that, you know, brands were spending less money
16:02
on ads and so there were less conversions. At
16:05
first, I found that kind of hard to believe, but
16:07
I had the same feedback from multiple agencies
16:10
and I, you know, and to be honest with you, that
16:12
was one of the conversations that got me into,
16:14
you know, starting a rapport like this because I
16:16
was like, this is really interesting. And these
16:19
are, this is stuff that, I mean, I only found out
16:22
because I was, you know, kind of having a beer
16:23
with one of these agency owner, otherwise I
16:26
wouldn't have been able to, you know, kind of get
16:27
that kind of data. And then, you know, got me
16:29
thinking, like, okay, let's. There's got to be a
16:30
way of verifying this and so, and so and tying
16:34
it, tying that with US elections. So, you know,
16:37
also during, during the World cup again, middle
16:41
of the summer World cup, like, apparently sales
16:44
in Europe were a little bit lower because people
16:47
were paying more attention to the TV down on, you
16:50
know, on social media, Instagram or Facebook or
16:52
whatnot. And so it seems like it might be the
16:54
same thing happening for. For the US Elections.
16:59
Maybe we're not we. But like in the US they're
17:01
spending more time kind of watching tv, like
17:04
maybe debates, you know, not not only candidates
17:07
debates, but like political debates on tv, you
17:11
know, checking Twitter to see, you know, what
17:15
candidates saying what. So that's also something
17:18
that I'm getting is I might be driving that kind
17:22
of. And there's a little bit of fear too. So I
17:24
feel like you are being a little. Just, you know.
17:28
Yeah. Kind of maybe afraid of spending money
17:30
until we figure out what's going on. I don't
17:31
know. But it's. It's definitely that kind of
17:34
uncertainty. It's probably the main word that's
17:36
been thrown right now.
17:39
Matt Edmundson: And it's a really interesting word, isn't it?
17:40
Uncertainty. Because you're right, I think when
17:44
we are uncertain as people, we tend to sort of
17:48
retreat into ourselves a little bit, don't we?
17:50
And so we spend less, we go out less, we do less
17:53
maybe of certain things like eat out or whatever.
17:56
Yep. And, and whilst it's interesting, you talk
18:01
about how the Titanic submarine resulted in lower
18:03
sales for some people, because it's the most
18:06
extraordinary sort of event, isn't it? And you
18:08
can you kind of go, well, it, maybe you've only
18:10
had like a very small percentage, but it actually
18:13
had some kind of impact which fascinate,
18:16
fascinates me. So you've got, you've got
18:18
uncertainty, but plus you've also got
18:19
distraction, haven't you? So you've got the
18:23
distract. And I mean, let's face it, you know,
18:25
the, the drama without getting political enough
18:29
and, you know, offending my US cousins, the drama
18:33
around the US election is, is unbelievably
18:37
addictive and, and serves as a huge distraction,
18:43
I think, in, in many things, you know, and I, I
18:47
just, I find the whole thing absolutely
18:50
fascinating in so many ways. But you're right, my
18:52
attention is there, plus my level of uncertainty.
18:57
Certainly in the uk, with what's going to happen
19:00
in the October budget, you're kind of like, well,
19:02
geez, these world events are actually having an
19:05
impact on me. So I can see how they would be
19:08
impacting a whole bunch of people, which has a,
19:10
has an effect. I don't know if you've got any
19:13
insights on this then Roll. I mean, how would
19:15
you, how would you counsel somebody who is
19:18
running an Ecommerce business right now? How do
19:21
you market well in times of uncertainty and
19:25
distraction like this? Because there's obviously
19:28
things that we can do when things are going okay,
19:30
but actually understanding the sign of the times
19:34
for want of a better expression and doing
19:37
something well in that time, well, that's a
19:41
different skill set in many ways, isn't it? And
19:43
so I'm kind of curious, is there any insight on
19:46
how to manage this?
19:48
Raul Galera: I mean, I would say, and probably saying this
19:53
because it's the type of marketing that we do at
19:55
Referral Candy, but at the end of the day, brands
19:59
that work really well are those that have a
20:01
community around them. And it, you know, it
20:04
doesn't necessarily have to be a physical
20:06
community. And by physical, I don't mean like in
20:09
person and I also mean like, you know, like a,
20:13
like a Reddit, you know, like a subreddit or like
20:15
a Facebook group or anything like that. It's
20:18
literally a community of like, okay, you've been
20:20
able to identify a group of customers that
20:23
probably even before they bought from your brand,
20:25
they identify with you. And so you know, you can
20:28
use, you can use ads to get in front of those
20:30
people. I mean you can get really good at ads
20:33
targeting and figure out ways that you can again,
20:37
like, okay, these people fit this criteria
20:39
because they have these catch different, you
20:41
know, categories and they check all these boxes.
20:43
I want to get in front of them. Yeah, but at the
20:46
same time it's kind of creating that word of
20:48
mouth. And so you know, when you have a product
20:50
that it's not necessarily generic because, and I
20:54
don't mean like the product itself but like the
20:56
way that you're selling it to people and the way
20:58
that you're kind of like framing because you
21:00
know, you can sell T shirts but you can, you can
21:02
sell a million different types of T shirts to a
21:04
million different type of people and you know,
21:06
make them see it and realize, okay, that's,
21:09
that's mine. That's, you know, that's exactly me.
21:11
Like I, you know, I definitely need this. Right.
21:13
And so again, when you have, it all comes down to
21:16
product market fit. Right? So when you have
21:18
product market fit to the point that you, you're
21:20
able to just show your customers that you have
21:24
the product that they have been looking, looking
21:26
for even before they knew that they were looking
21:29
for it, you're gonna be able to generate word of
21:32
mouth around it. And yeah, and so you know, your
21:35
customers are going to talk to other people that
21:37
are going to start, they're going to start
21:38
posting on, posting on social media, they're
21:40
going to start living reviews, they're going to
21:43
start generating all these, you know, user
21:45
generated content that you can then leverage on
21:47
other, on other platforms. So you know, at the
21:50
end of the day, obviously ads are important and
21:54
you know, obviously a lot of the messaging that
21:55
we put out on referral candy is, you know, you
21:57
don't, don't, don't, don't waste your time on,
22:00
waste your money on ads. But you need ads. But
22:04
it's all about like get the most out of it. So
22:06
once don't just spend money on acquiring a
22:09
customer and then kind of forget about it. That
22:11
customer can become your salesperson.
22:14
Matt Edmundson: Yeah.
22:14
Raul Galera: Make sure that after they buy they're so happy
22:17
and they're so satisfied with your product that
22:21
they're ready to tell their friends about it. And
22:23
even on top of that you're, you're, you know,
22:25
coming up with a Some sort of like referral
22:27
structure that makes it even bigger of a no
22:30
brainer for them to refer. So yeah, that, and
22:34
that's kind of like the long term type of
22:37
marketing plan that you want to have.
22:40
Matt Edmundson: Yeah, that. Powerful stuff. Powerful stuff. I
22:42
like this because I mean in times of uncertainty,
22:44
in times of distraction, you've got to stand out
22:46
and you've got to give people a compelling
22:48
reason. Right. And I think you can't be beige,
22:52
you can't be the same as everybody else. You have
22:54
got to stand out. So having, I love this, having
22:57
a community is a great idea. What that means for
23:00
you and your business is obviously very
23:02
interesting and very different to everybody else.
23:04
But focusing in on the community and focusing on
23:07
an expand, delivering an experience that you
23:09
know, just delivers. Wow. As we like to say on
23:11
the Ecommerce podcast, deliver. Well, I think are
23:16
always very sound old school marketing tactics
23:20
and principles. And I think you're right. I think
23:23
great ideas, you know, in times of uncertainty
23:26
and distraction. So what else has come out from
23:29
this research then? I mean what else has
23:31
surprised you?
23:33
Raul Galera: So and the latest report, one of the, one of the
23:37
findings that I found more interesting is how
23:41
brands. So you know, the report is about
23:44
Ecommerce agencies, but at the end of the day
23:46
their behavior depends on their customers, which
23:49
are brands. And so you know, by asking agencies
23:53
in extension, we're getting data points from
23:56
hundreds of other merchants. Right. So the
23:58
picture gets really interesting because you're
24:01
again kind of like using agencies as a proxy, you
24:04
can estimate how the rest of the Ecommerce world
24:08
is doing, how brands are doing. And so one thing
24:12
that I found really interesting in this last
24:15
particular report is that so we always ask
24:20
agencies what's if they've noticed any changes in
24:23
terms of prices, price sensitivity. So when you
24:26
talk to customers about, you know, renewing your
24:30
contract or negotiating retainers, whether it's a
24:33
new customer or an existing customer or
24:35
negotiating new services or whatever it is, how
24:39
sensitive are these customers to these price
24:41
changes? And that the next question that we ask
24:45
is do you see brands more likely to hire in house
24:49
or to outsource to agencies? And so in the latest
24:52
report we got a spike in price sensitivity. So it
24:57
turns out that, you know, somewhere between
24:59
August, September, brands got more, more
25:03
sensitive to price. So more sensitive to price
25:06
changes. You know, it makes sense. They, you
25:10
know, everybody's looking after their costs right
25:12
now because of, you know, inflation. Costs are
25:14
going up and so you want to keep everything under
25:16
control. You're probably your CFO is, you know,
25:18
probably questioning every single line in the
25:20
budget, like, do we really need this? Like what's
25:21
discharged? They recognize this. So, you know,
25:24
it's happening in all across the board. And so
25:27
they, they did notice a spike in price
25:29
sensitivity, which you would think, okay, well
25:32
then, you know, that probably means that, that
25:35
brands are going to hire more in house. Like
25:39
they're, they're spending less money on agencies.
25:42
You know, if they're, if they're getting, you
25:43
know, turned off by some of the quotes that are
25:45
getting, that probably means that they're going
25:47
down a different route. But when we ask that
25:50
question about whether brands are going in house
25:53
or outsourcing, we, we got a vast majority of
25:57
agencies that saying that brands are outsourcing,
25:59
that they're more likely to outsource than to go
26:01
in house. So it's, it's kind of like a paradox,
26:04
right? Like, so, yeah, agencies are getting more
26:06
exp. In the eyes of brands, but brands are still
26:09
going after them. And I think, and the
26:11
explanation that I, that I got, which again it's,
26:16
it's just, it's my own explanation, I don't know
26:18
if it's, if it's correct, is that at the end of
26:22
the day, hiring an agency has a set of
26:25
intangibles for, for brands that make it more
26:30
attractive than hire an employee or hiring a team
26:32
in house. When you're hiring an agency, you're
26:36
not only getting access to their, you know, their
26:38
skills and their team and you know, and whatnot,
26:41
you're getting access to their creative data and
26:45
collective knowledge of all the brands they work
26:48
with. So you, as a CMO of an Ecommerce brand, you
26:52
have access to one data point, maybe a couple if
26:54
you have, you know, people in the industry that
26:56
you talk to. But when you're working with an
26:58
agency and you know, you're having a, a weird
27:01
month or weird week, you can say, hey, is this
27:03
normal? And they can say, oh yeah, all of the
27:05
other brands in your vertical are, you know, kind
27:07
of seeing the same thing. Or like, hey, we're
27:10
actually seeing some trends right now. Like, you
27:11
know, you can have access to that collective.
27:16
Yeah, intelligence, I would say that I feel like,
27:20
makes it really powerful than hiring in house.
27:23
Obviously, you know, hiring in house and versus
27:26
an agency has. It also depends on, you know,
27:28
what's the pricing model that the agency is going
27:30
after. Are they taking a commission on revenue?
27:32
Are they charging a flat fee? But, but again, I
27:36
thought it was interesting that there's like this
27:37
paradox of brands are going with agencies Even if
27:42
they find them more expensive, at the end of the
27:45
day, they're still settling for, for outsourcing
27:48
versus going in house.
27:50
Matt Edmundson: Yeah, it's fascinating, isn't it? And I get on
27:53
one hand how that would be a paradox, you know,
27:56
and. But on the other hand, I guess one of the
28:00
things I am noticing is obviously ecom companies,
28:02
they're cutting costs quite a bit. Everyone's
28:03
becoming very cost conscious because it's. There
28:06
has been so many price hikes. It's actually quite
28:08
complicated now, I think, to rise. I'm not saying
28:11
you shouldn't increase prices, but I think people
28:15
have increased prices but still need to manage
28:17
costs. And so they're looking in, you know,
28:19
internally at how to do that. So I can see them
28:21
going, actually, we spend four grand a month with
28:24
that agency. Can we find an agency where we spend
28:26
three grand a month and get the same output?
28:28
Right. So I can see why people would ask that
28:31
question. But I guess I also see how internally I
28:36
might say, well, I need to hire two new people.
28:39
Right. So real life example, I suppose at our
28:42
company, I'm looking to hire two people at the
28:44
moment. It's a very real question now to ask
28:50
myself, well, do I actually want to hire somebody
28:52
or can I outsource this work? Right, right. And
28:56
so I'm, I'm looking at my own cost base and
29:00
going, right, what do I actually do in house and
29:02
what can I outsource? And so I can see how this
29:06
creates this sort of paradox. I'm looking maybe
29:09
to outsource more because I want to keep my
29:10
internal costs down, but in outsourcing more, I'm
29:13
going, oh, I'm not, I'm not happy with four grand
29:16
a month, dude, I need it to be three, you know,
29:18
that kind of thing. And I, I've seen that a lot,
29:22
actually. I've seen that a lot. I've seen
29:25
agencies, especially freelancers, so agencies
29:30
where it's just maybe one or two people, you
29:32
know, just sort of doing the ad spend and things
29:35
like that. I, I've seen them getting squeezed by
29:39
companies and because they are one man bands for
29:45
better, you know, their soul. And it's just them
29:47
really, that's why they're freelancers. It's
29:49
really hard to. Unless you're full on with work.
29:54
It's really hard to go, okay, I'll just drop my
29:57
prices for you, rather than just turning around
30:01
to them and saying, oh, well, if you don't want
30:03
to pay, go somewhere else. It's not actually an
30:05
easy thing. To say, is it. If you're a
30:06
freelancer, it's easier, I suppose, if you're an
30:08
agency, but even then everyone's a little bit
30:10
twitchy at the moment. So again, coming back to
30:12
your uncertainty observation, I think that's
30:16
interesting. I do think that's interesting. I'm
30:18
kind of. Go ahead.
30:20
Raul Galera: I was gonna say, I think it also has to do maybe
30:21
with the learning curve. Curve. Because
30:23
especially at this time of the month. Sorry, at
30:25
this time of the year, if you are in that
30:29
position and you're an ecommerce brand, you know
30:31
that hiring an employee, you're probably not
30:33
gonna see any results anytime soon. Cause they
30:35
need time to ramp up. Agencies need it too. But
30:38
agencies usually come with SOPs and they're ready
30:43
to deploy almost because it's for them. It's sort
30:46
of like, this is literally my everyday. This is
30:49
literally what I do every single day. Like
30:50
you're, you know, you as a brand, you're probably
30:52
not that different from the 15 other brands that
30:54
I work with. So maybe that, that speed factor
30:58
might be an aspect that brands value over hiring
31:02
in house.
31:04
Matt Edmundson: Yeah, it's an interesting one. I was going to
31:07
say, I'm kind of, I'm curious also whether
31:12
actually the traditional agency model that we've
31:15
experienced the last few years, whether that
31:19
actually needs to change as well. I appreciate
31:21
this is a much deeper conversation.
31:24
Raul Galera: Yep.
31:25
Matt Edmundson: Than what we're thinking, but I, I've not. We
31:28
have an agency, right. A media agency. And we
31:32
went down the traditional route of this is our
31:34
service, this is our retainer. You pay the
31:35
retainer, we do the service. The problem I think
31:38
people have got is, and this is my experience in
31:40
using agency, is that when you go to an agency,
31:44
you get a great service at the start. But if that
31:47
agency is good, they're going to grow, they're
31:49
going to get more clients, and the people that
31:50
are good for you are now going to be good for
31:52
three people, four people. And so the quality of
31:55
work for you gets less and less, the feedback
31:57
gets less and less, you get annoyed and then you
31:59
end up going to another agency and the whole
32:01
process repeats itself. One of the things that
32:04
we've done, and I can't give you any hard data
32:08
yet, Raul, I'm not going to lie because I just
32:10
don't know. I'm intrigued to see the results with
32:13
one of our agencies is we have gone to the market
32:15
and we've said, right, listen, this is the work
32:17
that we're going to do. This is the fee for that
32:21
but at the end of a predefined period, which in
32:24
this particular industry is going to be, I think
32:29
about five months, at the end of those five
32:33
months, your staff will be trained on our
32:35
processes and we'll be able to do a chunk of the
32:38
work. So we will help you get up and running and
32:43
we will train your staff. Now if you don't have
32:44
staff, we will carry on doing the work for you
32:47
under the traditional retainer model. But if you
32:49
do, we will train them and we will move from
32:52
doing the everyday work into a much more sort of
32:55
consultative coaching role to make sure the staff
32:58
stay on top of things and, and go forward. The
33:02
initial response to that actually has been really
33:04
positive. But like I say, it's all anecdotal at
33:06
the moment. And so part of me wonders in the
33:09
midst of all of this, whether the agencies which
33:12
change their models to whatever it is, maybe
33:14
could find a way to win.
33:18
Raul Galera: Yeah, I've, I actually had a similar discussion
33:22
last week with Jordan West.
33:25
Matt Edmundson: I know Jordan, he's a legend. He has been on the
33:28
show.
33:29
Raul Galera: Yes. Oh yeah, I saw, I saw actually so, and you
33:33
know, he, he mentioned actually so I was on, in
33:35
his podcast and I was asking him so many
33:38
questions that at some point I felt like I was
33:39
the, the host. But, but one of the, one of the,
33:46
so we were talking about this particular question
33:48
about the retainers and the in house versus
33:51
outsourcing. He mentioned that, that agencies,
33:56
when they do like a, like a kind of performance
34:00
based or like, you know, revenue based type of,
34:02
you know, get a commission on the revenue Lyft or
34:04
something like that, that at some point if you do
34:08
too well, it will get you fire as an agency.
34:10
Matt Edmundson: Yes.
34:11
Raul Galera: Because you'll have the CFO saying, wait a
34:14
minute, 30k. Like, oh sure, you know, we made,
34:18
you know, I don't know if these were the numbers
34:21
that he mentioned. I'm sure it was just like, you
34:23
know, kind of just relatively figures. But you
34:26
know, if you make a brand generate a million
34:29
dollars and you get 30k out of it, 3%, sure.
34:33
Great. You know, you've, you've made the brand
34:36
get a million dollars in revenue, but they're
34:39
going to see a 30k bill and the CFO in question
34:44
is going to say, wait a minute, do we really need
34:48
to spend 30k on this? Because obviously. And
34:50
again, it's the same thing that we were talking
34:52
about earlier. In hindsight it looks pretty easy.
34:54
It's like, oh, okay, well this agency got it for
34:57
30. There's gotta be an agency that maybe gets a
35:00
little bit less, but we pay a lot less. Right.
35:01
And so, and I feel like that's a raw mentality,
35:04
but at the end of the day in a company, you have
35:06
a ton of different stakeholders. The CFO has one
35:10
job and you know, and it's, it's also, you know,
35:14
I think it's also the CMO or the CEO job of
35:18
saying, no, no, no, you know, we, we need us,
35:20
we're not. We wouldn't be able to get where we
35:22
are. But again, in hindsight, it always makes it
35:25
a little bit more difficult to see. But yeah,
35:27
that's so, you know, answering your question, I
35:30
don't know, I don't know what's the ideal pricing
35:33
model when again even like what it could be
35:36
considered like the most fair type of approach,
35:40
you know, can also. And you know, we've seen our
35:42
referral candy too. I mean, referral candy, we
35:43
take a commission on refer purchases. So on the
35:46
revenue that the referral program generates.
35:49
Yeah. At some point we get questions. At some
35:51
point it's, you know, when we are able to help a
35:55
brand get to a certain size in the referral
35:58
program, some of them have question of like,
36:01
well, whether, you know, I'm paying a lot. Like,
36:05
you can prove what you've generated, but the bill
36:08
is there, the invoice is there. And so I can see
36:13
how it can generate that kind of situation.
36:18
Whether it's a brand talking to an agency or a
36:19
brand talking to an app.
36:21
Matt Edmundson: Yeah, absolutely. It's really fascinating, isn't
36:24
it? I mean, the whole thing just. And if you're
36:26
listening to this and you're an Ecommerce owner,
36:27
then, and you know, having sat on both sides of
36:32
the fence, having been and still running agency
36:35
and having been and still running my own
36:37
Ecommerce businesses, I get to see it from both
36:40
sides. I really do. And I think that I would
36:45
just. Probably the best advice I could give you
36:47
is just communicate well and ask lots of
36:49
questions. Don't let the anger and resentment
36:52
build up, have the conversations early. And I
36:55
think agencies are learning more now to adapt to
36:59
that and I think it's an important thing to do.
37:02
And of course, I mean, you mentioned Jordan West.
37:04
He was on the show. We were talking about TikTok
37:06
shops and he was on the show, I think, back in
37:11
May, if you want to check out that episode, Dear
37:12
Listener, it was a great episode. He's again such
37:16
a legend. He and I are on WhatsApp all the time,
37:18
just chatting away. He's such A good guy. So I'm
37:21
curious to hear that conversation you had with
37:23
him. If I'm honest with you, Raul, I'm going to
37:26
listen to that one. Speaking of questions. Right.
37:30
One of the things I like to do in the show, which
37:32
I say like to do is a more recent thing that
37:35
we've been doing is ask a guest for a question.
37:39
For me, this is where I ask you for a guest. I'm
37:41
not going to answer it now. I'm going to answer
37:42
it on my social media platforms. So this is my
37:45
little trick, my little come and join me on
37:47
social media thing for you, dear listener. Raul,
37:51
what's the question?
37:52
Raul Galera: Well, we kind of talked about it earlier, but I
37:55
want to get your full answer on this. How do you
38:00
see the US elections affecting Q4 sales?
38:05
Matt Edmundson: Fantastic. If you want to know how I see the US
38:07
election affecting Q4 sales, then come join me on
38:11
social media. You can find me at edmondson, both
38:13
on LinkedIn and Instagram and I'll be posting the
38:16
answer to that and the other questions I've been
38:18
asked soon. So, yeah, do come, follow me. Well,
38:22
anything else in closing? I mean you've, you put
38:24
this together every month. Is there anything else
38:27
in the data which you found, which you've kind of
38:29
gone, that's a little bit surprising?
38:32
Raul Galera: I don't know if it's surprising, but it's just
38:35
something I like and that. So the last question
38:39
that I ask, the last two questions that I ask
38:42
agency owners are, you know, how you see your
38:45
agency's revenue looking like in the next six
38:46
months. And then also how do you see
38:48
opportunities in the Ecommerce world looking like
38:50
in the next six months? So it's more like, you
38:52
know, just let's predict the future, right? Like,
38:54
how do you see it working? And you know, even
38:57
when we were having like months with like, like
39:01
negative responses on marketing budgets, on price
39:04
sensitivity, on you know, on different, like
39:08
different aspects that we ask agency owners,
39:10
those answers were always positive. The answer is
39:14
kind of, what's the outlook? You know, it does
39:17
not surprise me. And I've talked to a few people
39:20
about it and they say, oh yeah, like, you know, I
39:22
mean, and you know, the majority of our owners
39:24
are entrepreneurs. They have to be positive.
39:26
Matt Edmundson: I mean, it's got to be optimistic.
39:28
Raul Galera: Exactly, exactly. So that's something I
39:30
particularly love. And so again we, you know,
39:32
this, this month was no difference. I asked, you
39:35
know, how do you see the US Elections playing
39:36
out? How you see, again, we talked about the
39:39
marketing, but marketing budgets were up, but
39:42
because of Black Fridays every Monday
39:43
preparation. But again we talked about price
39:46
sensitivity and all that and. Yeah, but how do
39:49
you see everything looking like in six months? Oh
39:52
no, it's amazing. So I mean I love it. I mean
39:54
it's. And to be honest with you I'll be worried
39:59
the day that I see negative outlook in that.
40:02
Matt Edmundson: That's true. Yeah. Because then you know you've
40:04
got, if the entrepreneurs are downbeat you've got
40:06
a real problem, haven't you? Yeah. I think that
40:09
there is a blind optimism, isn't there with
40:12
entrepreneurs And I actually quite like that
40:13
because you need people who go no we, this is
40:16
going to turn around, we can, we can do something
40:19
here, there's opportunity for us, let's go take
40:21
the hill. When everything around them is
40:23
collapsing, you know and there's something quite
40:27
magical if not self denial about that. It's one
40:34
of those and I think you need people around you
40:37
like that. And agency owners especially and I
40:39
think Ecommerce entrepreneurs cut from the same
40:42
cloth when you talk to an agency, if I go and
40:46
talk to an adwords agency, give them my account
40:49
details, they're going to look at that and go
40:51
man, we can totally kill this for you. Right?
40:54
They're going to say, they're going to say that
40:56
because that's what they're going to say because
40:57
that's what they actually believe and think if
40:59
they didn't, oh mate, we can't beat that. Or may.
41:04
It's just downhill from, for you from here, isn't
41:06
it? It's that kind of actually you need that,
41:09
that sense of positivity. The danger of course is
41:15
you oversell and under deliver and you get caught
41:20
up in that excitement, don't you? And so I think
41:23
as Ecommerce entrepreneurs we, I listen to agency
41:26
owners and I'm like, I just need to filter what
41:29
they're saying because they're passionate,
41:30
they're excited and then there's a reality of
41:33
life.
41:34
Raul Galera: Yeah, yeah. I mean you're, you know, you're,
41:40
you're selling and I do a lot of sales calls,
41:46
referral candies. So like if you're, if you're an
41:49
Ecommerce store and you request a demo, there's a
41:51
chance that I'll be the one that's on the other
41:52
side of the screen and you know, you, and you
41:55
gotta, I mean you gotta believe in what you're
41:58
selling.
41:58
Matt Edmundson: Yeah.
41:59
Raul Galera: You gotta believe in what you're, what you're
42:01
capable of doing, you know, whether it's an
42:02
agency or an app. So I totally get that. And you
42:05
gotta have that optimism.
42:07
Matt Edmundson: Yeah, yeah, you do now. I love it, Love it. Well,
42:11
listen, man, if people want to reach out to you,
42:13
I mean, you've mentioned it at the start of the
42:15
show, but let's talk about it again now. If
42:16
people want to reach out to you, if they want to
42:18
connect with you, what's the best way to do?
42:19
Raul Galera: If they want to email me, it's
42:21
raul"referralcandy.com and if they want to check
42:24
out the report, that's referralcandy.com/eaci,
42:29
which stands for Ecommerce Agency Conference
42:32
Index.
42:33
Matt Edmundson: Yep. And do check it out. I mean, I've read
42:35
through the September report is very, very
42:37
insightful.
42:38
Raul Galera: Thank you.
42:39
Matt Edmundson: And yeah, really, really well put together
42:42
documents. So do sign up for that. Do go and get
42:44
that. It is free to access, so go check that out.
42:47
And of course, do connect with Raul if you've got
42:49
any questions, even if it's just to say hello,
42:51
I'm sure Raul would love to hear from you. And of
42:54
course we will link to everything that Raul has
42:56
given us in the show notes as well, which you can
43:00
get with the transcript and all that sort of good
43:02
stuff. You can get it on the website
43:04
ecommercepodcast.net and of course, like I say,
43:07
you can get it in the show notes to scroll down
43:09
on your app. And if you sign up to the
43:10
newsletter, that'll be coming to you anyway, just
43:13
automagically. Well, listen, man, it's good to
43:16
see you again and good to chat again. We should
43:20
do this more often.
43:21
Raul Galera: Definitely not every three years. Probably in a
43:24
few months.
43:26
Matt Edmundson: Maybe let's get you on sooner next time.
43:28
Raul Galera: Sounds good.
43:29
Matt Edmundson: But genuinely, thanks for coming on, man. Really
43:31
appreciate it. Thanks for sharing the insights
43:33
and love what you guys are doing and thanks for
43:35
putting it out there. Thanks for making it free
43:37
for people like me to get some insights. Really
43:39
appreciate it.
43:40
Raul Galera: Yeah, thank you. And thanks for having me again.
43:43
Matt Edmundson: No worries. What a great conversation. Huge
43:46
thanks again to Raul for joining me today. Now be
43:50
sure to follow the Ecommerce podcast wherever you
43:52
get your podcasts from because we've got some
43:54
more great conversations lined up and I of course
43:58
don't want you to miss any of them. Why would I?
44:00
I wouldn't. And in case no one has told you yet
44:02
today, let me be the first. You are awesome. Yes.
44:05
You are created awesome. It's just a burden you
44:08
have to bear. Raul's got to bear it. I've got to
44:10
bear it. You've got to bear it as well.
44:12
Raul Galera: Now.
44:12
Matt Edmundson: The Ecommerce Podcast is produced by podjunction.
44:16
You can find our entire archive of episodes on
44:18
your favorite podcast app. The team that makes
44:21
this show possible is Sadaf Baynon and Tanya
44:23
Hutsuliak. Our theme music was written by Josh
44:26
Edmundson, and as I mentioned, if you'd like to
44:28
read the transcript or show notes, simply head
44:30
over to the website ecommercepodcast.net where
44:33
you can sign up for the weekly newsletter and all
44:35
of the good stuff gets delivered straight to your
44:37
inbox. Totally for free. But that's it from me.
44:40
That's it from Raul. Thank you so much for
44:42
joining us. Have a fantastic week wherever you
44:45
are in the world. I will see you next time. Bye
44:47
for now.
44:57
Raul Galera: SA.