Why Direct Response Alone Won't Build This Brand — Transcript

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1. 0:00I am the founder and owner of a skin
2. 0:02care brand. I started the business when
3. 0:04I turned 50 back in 2017.
4. 0:07>> in 10 years?
5. 0:09>> Uh yeah, I'm
6. 0:10>> [laughter]
7. 0:11[gasps]
8. 0:12>> So I um am currently um bringing it and
9. 0:16I start I I left the television uh
10. 0:19producer career after 27 years.
11. 0:22>> Okay.
12. 0:22>> Um and
13. 0:24how I got into skin care is a whole
14. 0:26different story, but
15. 0:27>> What's revenue?
16. 0:28>> Um it is a hundred I'm sorry, 1.3
17. 0:32million a year. And then 275,000
18. 0:37in profit.
19. 0:38>> Got it.
20. 0:39>> Okay. We can definitely
21. 0:40>> Where do you want to go?
22. 0:41>> I want to go at least to doubling my
23. 0:44sales within the next year. Okay?
24. 0:46>> Okay. How do you get customers?
25. 0:48>> I
26. 0:49>> [laughter]
27. 0:49>> 70% comes from Meta and Google.
28. 0:53>> Organic or paid? Okay. All ads?
29. 0:55>> All ads. I do email marketing um
30. 0:58>> it's all paid. I mean
31. 0:59>> Yeah. Yeah.
32. 1:00>> How'd you get into paid?
33. 1:02Are you good at it?
34. 1:02>> How did I get into paid? No, I have a
35. 1:04digital marketing company that does my
36. 1:06ads.
37. 1:07>> Okay. And that was like the first thing
38. 1:08you did? You started this business and
39. 1:09you just hired a digital marketing
40. 1:10company to start running ads for you?
41. 1:11>> No. I didn't start See, I had a large
42. 1:15network from the television industry and
43. 1:17I got a lot of my celebrity friends to
44. 1:19do
45. 1:20>> did endorsements for you?
46. 1:21>> videos. Yeah.
47. 1:22>> Okay. So did they So did you give them a
48. 1:23kickback or they did it for fun?
49. 1:25>> Oh, they did it for free. Like these
50. 1:27[laughter] are people who I put on the
51. 1:28map, you know?
52. 1:30>> But they did this and that that gave you
53. 1:31a little bit of affiliate base or kind
54. 1:33of a a mini influencer launch.
55. 1:34>> Right. And so those ads are not really
56. 1:37performing well anymore. I need more
57. 1:38like organic ads.
58. 1:40>> Sure.
59. 1:40>> But my my whole question is like I want
60. 1:44to at least double my sales within the
61. 1:46next 12 months.
62. 1:48>> Okay.
63. 1:48>> And I I am the key man who if I
64. 1:51disappear, everybody below me is just
65. 1:54They make the products cuz they're
66. 1:55handmade products. And then we they ship
67. 1:58the orders. And that's pretty much the
68. 1:59operation.
69. 2:01Um and so, I want to know like what
70. 2:04would you do to double the sales if you
71. 2:06had the capacity, space, the warehouse,
72. 2:09all of that?
73. 2:10>> So, I would erase key man from your
74. 2:12vocabulary for now.
75. 2:14Because you're doing a million bucks a
76. 2:15year.
77. 2:16Obviously, you're key man. It's you and
78. 2:17five friends. You know what I mean?
79. 2:18Like, you're going to be key man. Like,
80. 2:20key man risk is predominantly it's it
81. 2:23reduces the value of the asset for an
82. 2:25acquirer, for somebody who's going to
83. 2:26buy the business. You're not trying to
84. 2:27sell right now. No one would really buy
85. 2:28it at this level anyways, right? No one
86. 2:30real. You know what I mean?
87. 2:31So,
88. 2:32if we take that off the plate, I'll I'll
89. 2:34I'll Sorry. Like, we put a pin in that
90. 2:35for a second.
91. 2:36>> Mhm.
92. 2:37>> We're just asking how do we sell twice
93. 2:38twice as many people, or do we get How
94. 2:40do we get the customers we have to
95. 2:42double AOV? How do we get the average
96. 2:43cart value up, or how do we get them to
97. 2:44buy more times?
98. 2:45>> Right.
99. 2:46>> Those are your levers, right? And so,
100. 2:48any of those
101. 2:50would double the business. If you do all
102. 2:51three of them, you eight X the business.
103. 2:55So,
104. 2:56>> [gasps]
105. 2:57>> the thing that I I will tell you is that
106. 2:59you are in the e-commerce space that is
107. 3:02highly commoditized, right? The lotions
108. 3:05and potions, you know what I mean? Is a
109. 3:06space where
110. 3:08uh you know, it's 98% water anyways,
111. 3:10right? And so, having
112. 3:12>> Mine is 100% pure.
113. 3:14All natural ingredients.
114. 3:16>> Water's all natural. So, uh
115. 3:18>> [laughter]
116. 3:19>> my stuff is different. So,
117. 3:21>> I'm
118. 3:22Point Point being to the consumer,
119. 3:24lotion squeeze, whatever, okay? So,
120. 3:28the the point is is that
121. 3:30if you play this out, right?
122. 3:32>> Mhm.
123. 3:33>> You could you Why can't you double ad
124. 3:35spend right now? The ads aren't
125. 3:36performing, right?
126. 3:38>> Yeah, and according to Ed, I have too
127. 3:40little ads in the first place.
128. 3:42>> Yeah.
129. 3:42>> [laughter]
130. 3:42>> Yeah, the ads aren't performing, right?
131. 3:44And so, in order to fix that, we'd have
132. 3:46to create UGC campaigns, right? And have
133. 3:48a huge variety of avatars,
134. 3:51ICPs, whatever you want to call them. Um
135. 3:52which will feed into Andromeda, which is
136. 3:54how the ad, you know, ad platform is
137. 3:55working now. It's all about many micro
138. 3:58niches rather than big hero ads, or less
139. 4:00of those.
140. 4:01>> Mhm.
141. 4:01>> And so, that would be how you would
142. 4:03double the business.
143. 4:05The issue with a double as a goal, and
144. 4:07I'll explain specifically for your
145. 4:08business, is that
146. 4:11unless you have a clear and compelling
147. 4:14brand,
148. 4:16you will just be in the arbitrage
149. 4:17business, which is that you were in the
150. 4:19buying clicks for a dollar and selling
151. 4:21them for two, and then continuing to buy
152. 4:23more inventory, and then over time as
153. 4:25you go to colder and colder audiences
154. 4:27that are less and less likely to
155. 4:27convert, your margins will compress
156. 4:29until you're doing $10 million a year
157. 4:30and making no profit. And the amount of
158. 4:32e-commerce businesses that are in that
159. 4:34in that realm is is too many to count.
160. 4:37>> Mhm.
161. 4:38>> Because they started as media buying and
162. 4:40performance-driven marketers,
163. 4:42rather than thinking how can I develop
164. 4:44this brand and distribution, because the
165. 4:47end goal
166. 4:48is that to compete at the higher levels,
167. 4:50which is I'm guessing where you want to
168. 4:51go.
169. 4:52>> Mhm.
170. 4:53>> Do you want to go there? I don't I don't
171. 4:54I don't presume. Okay.
172. 4:56>> Brand delivers the three things that an
173. 4:58e-commerce company needs. You get
174. 5:00cheaper clicks,
175. 5:01you have higher conversion rates,
176. 5:03at premium prices.
177. 5:05I guess it's four things. Higher
178. 5:06conversion rates at premium prices, and
179. 5:08you get higher, and this is the big one,
180. 5:09higher return rates, as in people coming
181. 5:11back.
182. 5:11>> Mhm.
183. 5:12>> And so one asset that you develop
184. 5:14basically covers the whole business and
185. 5:16allows you to continue to scale.
186. 5:18The way that e-commerce companies have
187. 5:19done this in the past and do this today
188. 5:21is that they borrow the associations
189. 5:22from other people who who espouse or who
190. 5:25who represent the values that they want
191. 5:26their brand to be. Simply said, they get
192. 5:29cool people to be in front of it, so
193. 5:30other people are like, I'll be cool, so
194. 5:32I'll buy it.
195. 5:33Right?
196. 5:33>> Right.
197. 5:34>> And so
198. 5:36to double the business, we have to do
199. 5:38UGC campaigns, and we want to be really
200. 5:40selective about who these influencers
201. 5:43are,
202. 5:44making sure that they represent your
203. 5:46values. That is the simplest way to do
204. 5:48that for you. I would probably also look
205. 5:51really aggressively at the front-end
206. 5:53email campaigns, um and like how many
207. 5:55different flows we have to bring people
208. 5:57back, what different levels of awareness
209. 5:59in terms of the ad hooks that we're
210. 6:00doing so we can hit different slices of
211. 6:01the market, and we can basically layer
212. 6:03our campaigns so we can bring people in
213. 6:05from colder to more aware, and then we
214. 6:07can start really like your blended ROAS
215. 6:09will go up even though some specific ad
216. 6:12sets will go down in actual ROAS. So,
217. 6:14it's more a campaign approach rather
218. 6:15than just finding individual winners. I
219. 6:17know it's a little bit more complex than
220. 6:18probably you're looking for, but it's
221. 6:19the reality of the answer.
222. 6:20>> So, I don't need an operational
223. 6:24manager working under me?
224. 6:26>> No, not now. You're doing a million
225. 6:27bucks a year in e-commerce. It's like
226. 6:29>> Yeah.
227. 6:30>> Not nothing, but like it's like you're
228. 6:32just getting going, you know? It's a
229. 6:34very low It's a low operational drag
230. 6:36business. Like that compared to a
231. 6:38service business, it's it's it's easier.
232. 6:40>> Got it.
233. 6:40>> Harder on the marketing side.
234. 6:42>> Okay. Thank you.
235. 6:44>> If you're not getting as many leads as
236. 6:45you want and your business is demand
237. 6:46[music] constrained, meaning you could
238. 6:48service more customers than you
239. 6:49currently have, then this is [music] for
240. 6:51you. So, marketing is changing and I
241. 6:53think ACQ tends to be on the bleeding
242. 6:55edge of the stuff. We certainly spend
243. 6:56the money
244. 6:57to do it, but we also build custom
245. 6:59software and we pay amazing vendors and
246. 7:01very expensive people to figure out the
247. 7:02system that we have right now and I want
248. 7:03to share it with you kind of open kimono
249. 7:05style. If you're not getting as many
250. 7:06leads as you want,
251. 7:07boy do I have the thing for you. Click
252. 7:08below, book call, and
253. 7:10hopefully I'll see you in Vegas.