January was a rough month for return on ad spend... let's discuss strategies to fix it.
In today's listener Q&A episode, you asked, we answered:
...and more.
Paul Reda: Is Hoonigan paying you to wear that?
Kurt Elster: No. This is not sponcon.
Paul Reda: Is this sponcon?
Kurt Elster: No #sponcon. No. To optimize my life, I try to plan my outfits out based on the weather, and what I’m doing, and I try to do it on Sunday.
Paul Reda: Oh, wow. Most people usually don’t do that. They just wear like winter coats in July and shit. They don’t pay attention to any of that stuff, so you’re really optimizing.
Kurt Elster: It’s like there’s a non-zero chance that you wear shorts in January, so I don’t want to hear it.
Paul Reda: I am not a year-round shorts guy.
Kurt Elster: But we’re not far off.
Paul Reda: No.
Kurt Elster: You’re a three quarters year shorts guy.
Paul Reda: I get hot.
Kurt Elster: And I appreciate not wanting to be hot. That’s why I can’t move to Florida.
Paul Reda: Oh, I can’t move south of Chicago. This is the line. I can’t go anywhere south of here.
Kurt Elster: You’re going to Michigan?
Paul Reda: My only direction is north.
Kurt Elster: I understand. Yeah. No, I know no one wants to be sweaty.
Paul Reda: FYI, any Shopify, Bold, if you want to acquire us, I’ll move.
Kurt Elster: As long as it’s north.
Paul Reda: As long as it’s north. If someone wants to-
Kurt Elster: Further north.
Paul Reda: If someone in Arizona wants to acquire us, get out. No. The answer is no.
Kurt Elster: Yeah. Ooh, is it a remote position? How much travel’s required?
So, today on the Unofficial Shopify Podcast, I’m your host, Kurt Elster. Joining me is my cohost, Paul Reda, and this is a listener Q&A episode. So, I had posted in our Facebook group. I said, “You know, what can we help you with? What are you concerned about? What’s keeping you up at night?” We got a stunning… There were 69 comments in there, and so we picked a few that we thought would be good discussion points that we could talk about, and it’s a lot about optimizing for the current traffic you have, your current situation, and traffic-generation strategies.
That’s important, because we’ve talking, feels like for two years now, saying, “Hey, Facebook ads are more expensive than ever!” Buying traffic from the Traffic Store, i.e. Facebook Marketplace or Facebook ads, just keeps getting more expensive. January, all month long we’ve been seeing people saying, “Hey, are your ROAS numbers down? Is your Facebook ads not working?” And that seems to be a common theme among Shopify merchants, so we’re gonna talk about that, and it’s also nice to see every January our download numbers go up. This January was no different. Last week’s Jake Starr episode, record numbers. You guys clearly like that. And it was cool, the Ponzi scheme episode prior to that one really had… I’m sorry, alleged Ponzi scheme. That was a risk. We hadn’t done an episode like that, that had broader appeal-
Paul Reda: Oh, I loved that episode, because it was just a funny… It was just a fun story.
Kurt Elster: Yes.
Paul Reda: That we got to be part of.
Kurt Elster: And that one did pretty well. So, if you haven’t listened to either of those, maybe go back, consider it, check it out. All right. Oh, and we got our Unite tickets. Shopify Unite. This May in Toronto.
Paul Reda: I’m excited. Fingers crossed, because I really liked the first… So, they moved locations. The first one-
Kurt Elster: Last year.
Paul Reda: Well, they moved locations again this year.
Kurt Elster: Yeah.
Paul Reda: After moving it last year. The first one, it was at… Is it called the Brickyard?
Kurt Elster: Two years ago it was Brickworks.
Paul Reda: Brickworks, and that was my first Unite, and I really loved it. I had a great time. The weather was beautiful. There was a lot of outdoor seating. It was just the best. And then last year’s was like clearly a lot bigger, in the conference center at a big event space, and it just didn’t feel as fun. It felt a lot more staid, and wasn’t as freewheeling, and people just kind of hanging out.
Kurt Elster: And I really, I think it’s the environment.
Paul Reda: Well, I think it’s the environment and I think it’s the size. I think you can’t have a cool, fun event where people are meeting each other and hanging out and having a great time if it’s like-
Kurt Elster: In a conference center.
Paul Reda: In a conference center that’s like thousands of people.
Kurt Elster: A literal conference center. Yeah. So, going smaller, it sold out. It’s already sold out, I think.
Paul Reda: It’s already sold out and they raised the prices to keep it smaller
Kurt Elster: So, Shopify Unite, it’s not for merchants. It’s focused on Shopify partners. The keyword being unite. We’re gonna unite Shopify partners! Last I heard, there were 12,000 Shopify partners, and so we… I’ve been every year. Paul’s been going the last several years. It is a ton of fun, but we’ll… That’s where we get the Shopify announcements for the roadmap for the coming year, and so of course we’ll cover that on this episode. You’ll hear that in June when we get back from Unite.
All right. Anything else on your list, or do you want to dive into some questions?
Paul Reda: No.
Kurt Elster: That’s a no?
Paul Reda: That’s a no.
Kurt Elster: All right. Things have been busy. Opening, we have Melita Cyril who asks, “Should we advertise on Pinterest for baby/kids products? Moms hang out there, but wondering whether to double down on Facebook over exploring Pinterest.”
Paul Reda: So, my initial thought, and this is what we thought a couple years ago, was that Pinterest traffic is purely drive-by traffic. It’s worthless. Traffic from it, it doesn’t convert at all. It’s like people are just on Pinterest re-pinning things. They’re not actually going to the places where the things are. That was our thought process. Has that changed?
Kurt Elster: Not really. Here’s why-
Paul Reda: I thought you were gonna blow me out of the water!
Kurt Elster: No. Okay-
Paul Reda: And be like, “Actually, it’s good now.”
Kurt Elster: Well, so here, they said, “Should we advertise on Pinterest?” I have yet… I’m sure there are exceptions. I have yet to have a client who ran Pinterest ads, and I can already, I’m gonna get a bunch of emails. “I’ve run Pinterest ads! And I make a million dollars on a dollar investment!” I have not had direct experience with someone who was successful with Pinterest ads. We don’t have a ton of people doing it or trying it, or who have tried it, but I’ve not seen success with it.
I have seen success with organic Pinterest strategies. I know it’s worked very well for my wife on Double Your WDW, but that was to drive organic traffic from Pinterest. That was like traditional social media content marketing type stuff. However, in Google Analytics, in Shopify Reports, you could sort traffic. You could divide your revenue up by traffic source. What I’ve found is the… Based on that, the Pinterest traffic is very much drive-by traffic. It will… You could use it to drive awareness. You can use it to fill remarketing ad funnels. But those people are not highly qualified, not wallet out, ready to buy. It’s not the same as, like Google Shopping is highly qualified.
Pinterest, yeah, okay, it’s legit traffic, but those people are not going to convert directly into a sale, necessarily.
Paul Reda: So, it’s sort of the same thing, when we did like our end of the year traffic breakdown, it was the sort of thing we saw with Instagram, where like the Instagram, the direct Instagram conversion rate was terrible. But we think that Instagram buyers are top-of-funnel buyers, and that’s the first visit of the three visits required for someone to buy something.
Kurt Elster: Yes, and so one of the things, like the last thing Melita says is, “Wondering whether to double down on Facebook over exploring Pinterest.” So, they already have success on Facebook, and they have not… They said double down. That means they don’t know if they’ve hit the limit of what they could scale their ads to. So, I’d say if you’re sitting there, and you’ve got one successful ad channel, and you’re like, “Wow, should I spend more money on the one that’s currently successful or just go play with this one that I don’t have experience with?” Double down on the one you know works!
You know that’s the answer.
Paul Reda: Yeah. Keep doing the thing that works until it stops working. Then try a new thing.
Kurt Elster: And then try your thing. Just exhaust Facebook. When you’re like, “Look, I have dialed Facebook in to the point where this is the best I can do,” fabulous. Now go do Pinterest. And if we’re saying, “Hey, we don’t know how qualified or how valuable that Pinterest traffic is,” but we know you can drive traffic from it, all right, those are people who will fill the top of that Facebook funnel. So, maybe driving the Pinterest traffic works when in conjunction with a Facebook follow.
Paul Reda: Is the idea here that you get the Facebook drive-by’s traffic, and then you can cookie those people, and then remarket to them using the Facebook ads?
Kurt Elster: Pinterest drive by, you mean. Right?
Paul Reda: They start on Pinterest. Yeah.
Kurt Elster: Yeah.
Paul Reda: And then you cookie them from their Pinterest click through, but then you have them cookied, and then you use the Facebook ads to follow them around.
Kurt Elster: Yeah, so when we talk about Facebook ads, I go, “Facebook’s so expensive, oh, it’s so expensive! I can’t. It’s killing my ROAS.” We’re really talking about cold traffic. Top of funnel. The Facebook remarketing ads.
Paul Reda: Yeah. Top of funnel, where you’re just like, “Okay, well, the people who like my product, it’s probably men between the ages of 25 and 37, so I’m buying ads for men between the ages of 25 and 37.”
Kurt Elster: Yeah. Pure interruption marketing.
Paul Reda: Yeah.
Kurt Elster: They don’t know who you are, they’ve never heard of you, and then there’s an ad in their feed for your thing, and we hope that their thumb stops scrolling when they see it. Whereas if I’ve… Like, “Oh, I found you on Pinterest, and I click through, and now I’m seeing a remarketing ad, okay, now I’m familiar with you.” That’s very different and much less expensive to do that kind of advertising. So, if we’re saying on Facebook the problem is the cold traffic, top of funnel, and on Pinterest we’re saying, “Hey, you could drive a bunch of people, but they won’t necessarily buy, but it’s gonna be less expensive,” then maybe that is the answer!
Drive a bunch of people from Pinterest, then remarket to them on Facebook.
Paul Reda: Yeah, so if top-of-funnel people are cheap on Pinterest, buy them there, and then it’s much cheaper to do middle stuff on Facebook, and then you… You know, you hit them at everything where it’s cheapest, and then after, if you can get their email from them, now you’re emailing them using your Klaviyo account, which is even cheaper, because it pays off so much more.
Kurt Elster: Yeah, that Klaviyo’s your own channel. You’re right. You would… Hopefully you’ve got a welcome popup, and an exit popup, and it’s offering them something of value, maybe something educational or related to whatever they saw in that Pinterest ad. So, all right. Now I’ve come full circle. Okay, this is a thing to experiment with. So, maybe it’s take… You’ve got 100% of your ad budget on Facebook. All right, keep spending on Facebook. If you think you haven’t exhausted it, spend more on it till you get it to a place where you’re comfortable. And then divert some of that money into let’s drive cold traffic from Pinterest and see if that works.
Paul Reda: We’re geniuses.
Kurt Elster: All right, let me give myself a pat on the back for that one.
Paul Reda: We’re so smart.
Kurt Elster: Brilliant.
Paul Reda: It’s just, we’re just better than everyone else.
Kurt Elster: Uh…
Paul Reda: It just amazes me.
Kurt Elster: That’s paul@ethercycle.com.
Paul Reda: I have very-
Kurt Elster: Do not email me.
Paul Reda: Kurt@ethercycle.com.
Kurt Elster: No!
Paul Reda: He blocked kurt@ethercycle.com. Don’t use that anymore.
Kurt Elster: I had so many… Well, because I get so many just brilliant marketers who blindly signed me up for a newsletter I never opted into, and the dead giveaway is I never use kurt@ethercycle.com, and that, they would guess that that’s the address and sign that up. And I’m like, “I know I never signed up for your email list.” But eventually it got so bad I just… I got rid of that email address.
So, moving forward. Braedon Stefanyshyn…
Paul Reda: Yeah, I don’t know.
Kurt Elster: Braedon. Braedon S… I really, with these questions, people need to just give me the phonetic pronunciation of their name.
Paul Reda: Well, if they’re just posting it in the Facebook group, that’s their Facebook name, so I mean have mercy on us. If we mispronounce your name, we’re sorry. We’re trying the best we can.
Kurt Elster: Yeah. I’d prefer not to mispronounce it. All right. Braedon S. says, “Talk more about financing apps. Having higher ticket items, we’re getting more and more requests for financing options. What works and integrates best with Shopify?” Ooooh!
Paul Reda: So, I think… What’s our favorite? I think we like Sezzle the most?
Kurt Elster: I like Sezzle a lot.
Paul Reda: I don’t like Sezzle.
Kurt Elster: Because of the widget implementation?
Paul Reda: Because of the widget implementation, for me, personally, it’s very hard to do and it never seems to work right, so if you put Sezzle on your store and it immediately goes in the spot where you want it to go, great. Good job for you. It worked out. But if it’s exactly where you want the widget to be and you try to move it, or you hire me to move it, it’s a huge pain in the ass that never seems to work. From my personal experience, allegedly.
Kurt Elster: Allegedly.
Paul Reda: Allegedly. So, what other ones do we like?
Kurt Elster: Well, so Affirm, Klarna-
Paul Reda: Oh, Affirm’s good.
Kurt Elster: … Afterpay.
Paul Reda: Affirm’s fine.
Kurt Elster: Those are the popular ones. I like Sezzle a lot because of its pure simplicity, and there is one very unusual thing about it. If you don’t transfer, if you don’t sweep the money out of your account, you leave it at Sezzle when you’re getting paid, they pay 8%.
Paul Reda: Which I don’t understand.
Kurt Elster: Yeah, what is this magic, that you’ve got an 8% guaranteed return?
Paul Reda: How are they… It’s like where are they putting the money that they get more than 8% back on it? Are they investing with the Money Store, so they’re getting 15% back?
Kurt Elster: Yeah, it’s called the Merchant Interest Program, and last I heard, it was at 8%, and then in the example they use in the agreement, it’s 8%. Yeah, they pay out 8% interest. That’s crazy.
Paul Reda: All right, so just to do the 101-level thing on this, there’s these financing apps. There’s Sezzle, there’s Affirm, there’s a bunch, they’re really blowing up, where you can offer financing on your store. It’s a little widget that appears underneath the price on your product page, so if it costs 100 bucks, your product costs 100 bucks, it says 100 bucks is the price, but then underneath it you could be like, “Or four easy payments of $25 using Affirm.” And then Affirm is just a way, just a different way for people to pay.
And generally, they don’t… Their buyers don’t pay any interest.
Kurt Elster: Well, so with Sezzle, a couple things. There’s no hard credit check, so they… Sezzle’s a max of four equal payments, and when you… The reason they chose four, because I interviewed them on the show a couple years ago, is four is like the max they could do and not have it appear as a hard thing on your credit. So, you don’t have to worry about your credit score being impacted by it, and it’s zero percent. So, often when I promote financing stuff on Twitter, I’ll get a few trolls who are like, “People don’t need more debt. I’m such a good person because I don’t want to offer people financing options.”
All right, so I’m sorry, do you not accept credit cards? I mean, a good credit card interest rate, a low interest rate, 15. Sezzle’s zero.
Paul Reda: We were just discussing this at lunch, and that my… This credit card I have right now is about to stop being zero percent for the first year, and I’m like, “Ah, damn it.” I was just giving loans to myself all year long.
Kurt Elster: And it jumps to over 20, right?
Paul Reda: And now it’s gonna be like 23.
Kurt Elster: Yeah, so that’s most credit cards, sit in that range, whereas Sezzle’s zero percent, so it’s like, “All right, if you want to be high and mighty about it, and like people don’t need more debt, all right, then you should stop accepting credit cards.”
Paul Reda: You should only PayPal.
Kurt Elster: You should take ACH and Sezzle. That’s it.
Paul Reda: Yeah. Yeah.
Kurt Elster: Those are your two options if you want to be-
Paul Reda: A good boy who never allows anyone to fall into debt, because that’s your problem.
Kurt Elster: Yes. But, so these financing apps are increasingly popular. More and more consumers are aware of them, especially millennials are really adopting them, and here’s the insane part: On every large store that’s running Sezzle that we have, of our clients, the Sezzle payment gateway, those orders have a significantly higher average order value.
Paul Reda: Well, duh. It’s free money.
Kurt Elster: Well, or it’s they’re saying, “Listen, if I’m gonna do financing, and I’m gonna get zero percent, and I’m gonna go through the process of…” Because you’ve gotta fill out an application in the checkout.
Paul Reda: Oh, you do.
Kurt Elster: Yeah.
Paul Reda: I didn’t know that.
Kurt Elster: Yeah, when you hit check out, it hijacks you into a quickie application form. If I’m gonna go through that, well, I may as well make it worth my while and spend a little more. This is just my theory, my consumer thinking.
Paul Reda: And the fact it’s zero percent. The same reason that all the cars keep getting more expensive, is because-
Kurt Elster: Yeah, the reason cars got more expensive-
Paul Reda: One of the reasons cars and houses are getting more expensive is because money is so cheap.
Kurt Elster: Because of zero percent or low interest.
Paul Reda: Because of low-interest financing. Yeah, I was talking to my dad about just a house I’m looking for, and he was like, “Oh yeah, I remember our first house. Our interest rate was 21%. We got a good rate.” I was like, “What?”
Kurt Elster: Oh, I gotta lie down.
Paul Reda: I was like what?
Kurt Elster: 20% on a mortgage?
Paul Reda: Yeah.
Kurt Elster: Whoa! I’m gonna pass out. Because mine is 3 something, and I’ve calculated out what that interest expense is, and it’s making the ulcer bigger.
Paul Reda: Oh, yeah.
Kurt Elster: Yeah. So, no, I like financing apps. Pick one you’re comfortable with. My personal preference is Sezzle. I love that they’ve got that Merchant’s Interest Program. The widget is not as hard to place as Paul says. It’s looking for a CSS selector. They have good support. I have to defend Sezzle.
Paul Reda: Yeah, okay.
Kurt Elster: I like them. I like that team. And it increases your average order value. That’s the amazing part, and it lets you offer zero percent financing to your customers.
Paul Reda: It’s just whenever I do it, it never feels like it does what I want it to do.
Kurt Elster: Well, you only end up doing when it’s a hard job.
Paul Reda: Exactly.
Kurt Elster: You’re only seeing the problem children.
Paul Reda: That’s true. Yeah. No, Sezzle, it 100% increases… It increases your average order value and increases your orders. Much to my shock, like I didn’t think people were gonna finance $10 worth of tea, but they do that.
Kurt Elster: Yeah, like in one store, their typical average order value was 50 bucks storewide. On Sezzle purchases, their average order value is 80, so that gives you a good example of like a typical increase. That’s a lot. That’s very good. So, if you’re going, “Man, I want to increase average order value and conversions.” Get Sezzle. Period. Done. There. You did it.
Paul Reda: And so, your buyers don’t pay any interest. You get the full money up front, right?
Kurt Elster: You know, I actually don’t know how that process works.
Paul Reda: Well, you don’t get it up front truly. It goes in like your Sezzle account.
Kurt Elster: Yeah.
Paul Reda: Which they’re paying you 8% at. I again, don’t know… What is their business model?
Kurt Elster: I would love to know what’s going on there, but that’s fabulous. Compounded on a daily basis. Yeah, look at this. Section 4.2.2 of the Merchant Interest Program, how interest is calculated. Interest will be compounded on a daily basis. Yeah, and then an example. It’s just wild. All right, let’s move on from Sezzle. Sign up for Sezzle, increase your AOV, get your 8%, that could be your retirement account. There you go.
Paul Reda: Yeah. Everyone always cares about like, “What’s a quick, easy win on my store.” Adding financing apps on your store is a quick, easy win on your store.
Kurt Elster: Absolutely.
Paul Reda: We’re very anti quick, easy wins, like they don’t really exist, but adding a financing app is one.
Kurt Elster: Yeah, this one is actually one of the few. And I have a referral code for Sezzle. It’s in the show notes. When you use it, you get one month free, no strings attached.
Paul Reda: There we go.
Kurt Elster: Hooray!
Paul Reda: Ask Kurt to place the widget if you don’t like where it is.
Kurt Elster: And I will personally place the widget for you. So, Leila Cools asks… Well, she states she handmakes jewelry items and has an average retail of $25, and adds, “Yes, I know I should raise that. I’ve just started to focus on my website, for which I have low traffic. Assuming that I’ll have average repeat customers.” We gotta unpack this. “Does it make sense to market low-value items with paid Facebook ads simply to get the data flowing and start remarketing, or should I start with the content marketing route? As a solo entrepreneur, I need to keep it simple and doable.”
There’s several things in here I like and want to unpack.
Paul Reda: Well, I think to collapse it down into a single question is, “I sell low-priced goods, is it worth it for me to buy Facebook ads?” Because obviously my cost of acquisition of a customer isn’t as much as a lot of other places. As for the answer to that, I don’t have one, so I’m gonna drink water while you talk.
Kurt Elster: All right. I’m gonna ramble. So, she said, “I have low traffic.” Well, set a benchmark there. What I define for you have hit a threshold of good traffic, the benchmark, the rule of thumb I use is over 30 days rolling average you get 150 people a day to your store. 150 visitors a day over 30 days. If you could do that, you have now… You have crossed the Rubicon into like, “Okay, I’ve got traction in the marketplace. I’m starting to build an audience.” So, I don’t actually know what her traffic is, so if it’s under that, we’ll say… Let’s say it’s 50 a day average. All right, that’s low. At 150, we’re getting somewhere.
She says, “I assume I’ll have average repeat customers.” Let’s define that one, too. I would say average is 20 to 30% repeat customers for an established store. So, you’ve been running it two years, and you’re sending out some emails, and doing some remarketing, and you do a good job of customer service. Expect like 25% would be where I want it. If I see below 20%, either you’re just never talking to anyone, or it’s not a great experience, or it’s like just some product someone could only ever buy once. And like 40, 50%, that’s the kind of thing, 50% you’d really only see if you have consumable goods.
And then she’s saying, “Well, yeah, should I mess with Facebook ads to get data flowing and start remarketing, or should I start with content marketing? As a sole entrepreneur, I need to keep it simple and doable.” I like that she’s acknowledging that. When it’s just you, you can’t make a giant to-do list of like, “I’m gonna do all these things!” You just make yourself crazy, and you end up just neglecting stuff and half-assing stuff, or being overwhelmed by it and doing nothing. So, she’s like, “All right, I want to do one thing.”
Here’s how I would tackle this. Like we just discussed to the first question, Facebook ads are expensive, and they’re a good way to lose money.
Paul Reda: Yeah, that was my thing, is I was like, “All right, well, if your margins are not large enough to justify Facebook ads…” They definitely don’t justify cold Facebook ads followed by to get the data flowing, and then remarketing and buying more Facebook ads.
Kurt Elster: Yes. So, let’s take a slight… Let’s tweak this. I would say set up the remarketing funnel. So, we know for sure increasing the total number of touch points with a customer, you will convert better, you’ll make more sales. And remarketing, you’re really only paying for when traffic comes to the site and clicks through. So, I’d say set up your Facebook remarketing. You don’t have that top of funnel costing you money yet, but you’ve got that remarketing in place for when we achieve a threshold of traffic that works. And you can set that up natively in Facebook, or you could use an app like Socio is good, so that’s our safety net. Increase our touch points with this remarketing.
Then use content marketing, organic social, contest, a giveaway paired… Maybe reach out to influencers and say, “Look, I’ll give you a free product to drive traffic, and could you promote my giveaway so you look like a hero with your audience?” Now I’ve got a way to get these people to my site, and then that remarketing that’s already set up will kick in.
Paul Reda: Yeah. I feel like, I mean if she’s selling them for $25, hopefully it doesn’t cost her very… I mean, hopefully it doesn’t cost her more than 10 bucks each item. Send out freebies. Try to get the influencers going. I think Instagram is gonna be key, because it’s fashion, it’s jewelry, I think that’s the gateway to cheap, top-of-funnel traffic, is for her to start trying to kill it on Instagram, and then when those Instagram people hit her site, then the Facebook remarketing funnel comes in.
Kurt Elster: The other thing, like if you’ve got a good social organic thing, where you’re posting daily, trying to build a community, Facebook like ads are extremely cheap if you get a good one, where you could probably get it down to 15 cents a like. I’m sure there’s someone who’s like, “I pay three cents a like!” But like 15 is reasonable.
Paul Reda: Stop self-negging all the things that you’re saying.
Kurt Elster: You’re right. Well, I’m just, I’m preempting the trolling.
Paul Reda: Well, no. You tell those trolls you don’t care about their opinions.
Kurt Elster: Actually, you know what I do is just block them. Yeah. If an email is too stupid to process, just block.
Paul Reda: We had one of those today.
Kurt Elster: Had a couple today. Derailed me. No, I like this. I like the Instagram strategy, Facebook likes might be a workaround. But for sure, set up your remarketing funnel and then look for alternative ways to drive traffic to the site.
Paul Reda: I’m stupid. Why am I doing a Facebook like campaign? What does that get me? So, I get likes on my Facebook page. What does that get me?
Kurt Elster: A little bit of social proof. It drives brand awareness. They saw the ad, they click like, all right, now they like your thing. A percent of, if you post daily, maybe multiple times a day, a percent of those posts will pop up in people’s feed.
Paul Reda: Okay.
Kurt Elster: And then if you know, and then if you get traction with one, you can spend 10 bucks on it to boost it and make sure everybody sees it.
Paul Reda: Can you set up an ad campaign that only targets people that have liked your page?
Kurt Elster: Yes.
Paul Reda: Okay. And I’m assuming that counts as remarketing and that’s cheaper.
Kurt Elster: That would… Yeah. Well, it’s not remarketing, but it would be cheaper.
Paul Reda: Okay.
Kurt Elster: I think. It’s when you’re just… It’s like people who have no real… Where Facebook gets expensive is people who have zero relationship to your brand whatsoever, and now you’re trying to force your stuff into their feed. And Facebook’s saying, “Look, yeah, you’re expanding your audience, we know that’s valuable to you, but we also know that’s probably the least valuable experience for the user, so it’s gonna be the most expensive to do it.”
The other remarketing audience that Facebook has that’s interesting, so you’re saying like, “Yeah, go for Instagram.” You can remarket to anyone who viewed your Instagram profile. So, let’s say you’ve got Instagram, and you do decently well there. Maybe you hire a company like Workmacro, who for maybe a hundred bucks a month, they will do a follow, unfollow campaign for you, and get you up to several thousand followers very quickly. Now you can remarket to that audience. Everyone who viewed you, viewed your Instagram profile, you can remarket to them. Initially, that’ll probably be lower value, but it’s still a… It’s a way to get your foot in the door. Like we gotta start somewhere.
Paul Reda: Yeah.
Kurt Elster: I think that about answers it.
Paul Reda: I think that was good.
Kurt Elster: And I’ll do… I’ll put Workmacro in the show notes as one of the links. Moving on to Edwin Alejandro Ruiz. Read this one for me.
Paul Reda: Oh, geez.
Kurt Elster: Geez! Oh, geez, Rick!
Paul Reda: I’m not on Fargo.
Kurt Elster: That was actually, that was my Morty.
Paul Reda: He’s fleeing the interview! What is the best sales funnel for a high-ticket item such as a $300 watch, and what strategies would you use to drive traffic to your site? Again, traffic driving. Thank you so much for the value you add, Kurt.
Kurt Elster: You’re welcome, Edwin.
Paul Reda: I think for a $300 watch, that’s not high ticket, first of all. But if we’re gonna say it is the high ticket.
Kurt Elster: Well, no, in the universe of watches, it’s not high ticket. All right, 300 bucks.
Paul Reda: A $300 ask-
Kurt Elster: But it’s not an impulse purchase.
Paul Reda: It’s a big ask. Yeah. I think it goes back to a thing, one of the important things is something we talked about before, is establishing trust indicators, because it’s like I’m popping $300 on this thing, it better be 100% exactly what you promised it was. And so they need to trust you with that, so I think images, going over all the bullshit about how cool and nice the watch is, and how it’s made of magnesium or something that’s like an expensive metal. I don’t know. You gotta have all that stuff going. I think that’s a major, would be a major point in favor.
Kurt Elster: Yeah, I think… Well, and essentially it’s a fashion item. It’s jewelry. If men could wear just traditional jewelry, the Swiss watch industry would not exist.
Paul Reda: That’s true. It’s jewelry for men.
Kurt Elster: Yeah. All right. Our example’s a $300 watch. With any expensive item, we’re gonna want to overcommunicate, and especially in this case, on appearance. So like, I want the 360 shot, I want video of the thing, I want good macro detail shots.
Paul Reda: Yeah. The lighting, everything’s gotta be full end, top-notch luxury.
Kurt Elster: Yeah. We need, I need to be able to trust you, and I think that starts with really polished, professional imagery and video.
Paul Reda: 100%.
Kurt Elster: And then dive into like give me… Overcommunicate on the details. I want to know what’s the lug width? What’s the strap made out of? What kind of movement does this have? Give me everything in there.
Paul Reda: Yeah. It’s like, “Oh, the minute hands are hand carved by Tuscan monks.”
Kurt Elster: Wow! Tuscan monks.
Paul Reda: Exactly. Just all that level of stuff, go over all of it.
Kurt Elster: The watch is bathed in rosemary herbs.
Paul Reda: In excessive detail. Go to the frickin’ Mac Pro page on Apple’s website, and just look all the ridiculous shits they’re laying out for you to try and get you to buy this $6,000 computer. That’s the same thing you should be doing.
Kurt Elster: Yeah, so every single piece of information you have and then some, lay that out there, so that they can make a decision. Because they can’t see it in person. They can’t try it on. And they really don’t know who you are or if they should trust you, so we also need social proof, having reviews there, ideally having customer lifestyle images. I think that helps. For an item like this, it’s aspirational, so we better have lifestyle images that make it look cool.
Paul Reda: Yeah. Make you look like a baller because you’re wearing it.
Kurt Elster: Yes! Exactly. And then what, is there a warranty? What happens if something goes wrong? If I get it and it’s too gigantic on my wrist, can I return it? So, those are your objection busters.
Paul Reda: Throw the word concierge around a lot.
Kurt Elster: Our concierge customer service.
Paul Reda: Exactly.
Kurt Elster: I like that. Concierge support, or concierge-level service. I like concierge instead of customer support.
Paul Reda: Yeah.
Kurt Elster: That’s cool.
Paul Reda: Concierge automatically means it costs twice as much.
Kurt Elster: Yes.
Paul Reda: Because it’s that much better.
Kurt Elster: Exactly. Okay, I like that a lot. And then on a watch, you could do upsells like, “Well, did you want different straps to go with it?”
Paul Reda: Oh yeah, totally.
Kurt Elster: And then you can also sell me the strap removal tool, so like the little… I forgot what that’s called, but that little tool that pops up the log off.
Paul Reda: Yeah, and then like different, like Swatch faces.
Kurt Elster: What?
Paul Reda: Because it’s a Swatch watch.
Kurt Elster: It’s not a Swatch. I never owned a Swatch watch. I had a Casio calculator watch as a kid. Yeah. And they still make it. I saw one on Amazon. I can get the calculator watch for like 50 bucks, real Casio, and it’s gold. Oh! That would be so dope. Should I do it? That you could email me about.
Paul Reda: So sick.
Kurt Elster: Be like, “Here’s my Casio watch collection.” I’m happy to get those emails.
Paul Reda: I want a Nixie tube watch.
Kurt Elster: You know, I get where you’re going with that. Seems impractical. Just one slip on the ice and that watch is gonna be a real mess. A Nixie tube clock, that would be cool.
Paul Reda: Yeah. Nixie tube anything is automatically cool.
Kurt Elster: You’re right. Remember, didn’t gas pumps have Nixie tubes?
Paul Reda: Maybe.
Kurt Elster: I think as a kid, my first Nixie tube experience was gas pumps.
Paul Reda: I think Steve Wozniak has a Nixie tube watch.
Kurt Elster: Really?
Paul Reda: Yeah.
Kurt Elster: I’m sure he does. All right, enough Nixie tubes. So yeah, I mean really Edwin, the answer is overcommunicate and look as polished as possible. Those two things combined are what’s going to make you look professional and trustworthy.
Paul Reda: But he wants to know how to drive traffic, to be honest.
Kurt Elster: Oh, he does want to know how to drive traffic. All right, well, for a watch-
Paul Reda: We digressed here.
Kurt Elster: Instagram all day.
Paul Reda: Yeah. Instagram all day.
Kurt Elster: Look for your niche, your hobby, your community. They have watering holes. If I’m interested in something, there’s a place to go talk about it, and they have a community somewhere. When Jake was on here, he said what really helped grow his business was tapping into the Everyday Carry community on Instagram. There is 100% a deep and faceted watch community on Instagram.
Paul Reda: Oh, yeah.
Kurt Elster: And on the internet in general, but they’re on Instagram.
Paul Reda: Well, and depending on the styling of this watch, I don’t know if it’s a pseudo-luxury watch, or if it’s like an everyday carry, like outdoorsman watch. That will depend on which sort of community you’re focusing on.
Kurt Elster: Maybe it’s tactical. It’s tacticool.
Paul Reda: Yeah. It could be tacticool everyday carry, it could be like pseudo-luxury, where it’s like, “Oh, it looks all nice and blah, blah, blah, but it’s only 300 bucks.”
Kurt Elster: So yeah, look for that community. This is also another one where you could do the giveaway and get people excited. Use something like ViralSweep and get people excited and talking about the giveaway. Then other people get interested, they’re on the newsletter, and then maybe six weeks later they pull the trigger and buy it. And this is another one where a $300 watch, oh my gosh, offer financing. $300 divided into four payments, that’s less than a hundred bucks a month. The cool part of that Sezzle widget is it shows you what your monthly payment would be. It immediately makes the thing look cheaper. And I think that’s part of why it increases conversions.
Paul Reda: And I know that this is probably fine for a $300 watch, but if he was selling a $3,000 watch, there’s clearly a point where you don’t want to have a Sezzle widget.
Kurt Elster: Yes, and I don’t know where that line is, and I do know with financing-
Paul Reda: Because it makes the product look cheap if they’re offering financing on it.
Kurt Elster: Like it would be weird if I was on Rolex’s website and they’ve got like, “Four easy payments!”
Paul Reda: Yeah. Yeah. But anyone who’s contacting us on this show, your brand is not old and storied enough to worry about looking cheap.
Kurt Elster: I mean, I’ll accept emails from Rolex, but I don’t think it’s gonna happen.
Paul Reda: I don’t think it’s gonna happen.
Kurt Elster: Oh well. So, hopefully that answers the question. Aaron Callaghan, “Best way to launch into another market? Is it making duplicate storefronts on Shopify Plus?” Hmm…
Paul Reda: If it’s a different language, maybe.
Kurt Elster: So, if he’s saying-
Paul Reda: If he’s in America and wants to sell in England, or like Australia, why do anything different?
Kurt Elster: Yeah.
Paul Reda: Other than having like a currency converter.
Kurt Elster: So, we talked to Andy Bedell about this, where he broke down like, “Hey, here’s the strategy I used to bring KeySmart into other countries.” And what he started with was, “Well, we know it sells well in North America, where we speak English.” He then loaded up a list on Wikipedia of every English-speaking country, then ranked it by GDP, yes, and then just started with, “All right, what’s the first one? Start there.” Okay, take his top performing Facebook ads, duplicate those, target them to that country, go. See what happens.
And when that works, all right, if he could validate it, then he turned around and would try to figure out distribution, so he’d get faster shipping there, and then move on down the list until he had exhausted every English-speaking country. And he had a currency switcher, and then a query string would swap out the currency, so really the most important part was when I land on the site, is it in the right currency? That was it. That was the thing that made or… So, you didn’t need another store, you didn’t have to overcomplicate it.
Then once he got into once he’d exhausted those, he did the same thing for other language stores.
Paul Reda: Yeah, you probably, you move into Spanish next.
Kurt Elster: Yes, and then he just started running through that same strategy. So, the reason he brings up Shopify Plus is part of the monthly cost, you get 10 clone stores, and the clone stores don’t mean like, “Oh, I could just start a new brand for free.” No, it has to be that core brand, your core store, so it’s like, “All right, we’ve got Acme Widget US. All right, now we’re gonna do the UK version, now we’re gonna do the Spanish-language version. This is the wholesale version.” That’s why he brought that up. You don’t necessarily have to do the different sites, though. You could just do a currency switcher as long as it’s in the same language.
Paul Reda: I think a currency switcher in the same language, you’re done. And then the next move is move into different-
Kurt Elster: When you’re using different languages-
Paul Reda: Move into different languages, yeah.
Kurt Elster: Then for sure I would do a different store.
Paul Reda: Yeah.
Kurt Elster: While you can translate it with JavaScript on the site, it’s going to get messy at best, so I would just do a different store and save yourself the headache.
Paul Reda: Yeah, like if I was… I mean, English is very much an international language, and if my choice is like… If I’m trying to sell it in the EU, if I’m trying to sell it in Germany or whatever, I’d probably rather have an English… Just like I’m selling it in Germany, but the website’s in English, then have a poorly machine-translated German version of the site.
Kurt Elster: Dave Basulto asks, “What’s the easiest and best app to use for returns? Where the customer can log in, click a reason and return with RMA and shipping done.” The answer is Bold Returns Manager. I’ve got this running on Hoonigan right now to manage their returns. It works like he described. Very convenient. You define here’s the list of reasons people can return, here’s whether these are auto accepted, here’s who pays shipping. It’s pretty cool. And then you can like… It makes it easier for managing the returns on the merchant side, but you just go in the app and, “All right, here’s my list.”
So, I like that one. I will throw that in the show notes, as well. Would you like to read Mr. Dean Fountain’s question?
Paul Reda: Dean Fountain says, “We sell a food product that obviously cannot be tasted or smelled online. What is the way to overcome this? A quick aside, thank you…” Whatever. He said thank you. Free samples, dude.
Kurt Elster: That’s my thought. It was my immediate thought, too, is either free samples, or you do like, “Here’s the sampler pack.” Like let’s say he sells a bunch of stuff. Here’s the sampler pack.
Paul Reda: Yeah. Here’s the sampler pack that’s like for 20 bucks you get a little bit of everything.
Kurt Elster: Yeah, 10 bucks shipped, and you get to try eight different of our peanut blends. I don’t know what he sells.
Paul Reda: Yeah. I don’t know what he sells, but-
Kurt Elster: He sells peanut blends.
Paul Reda: Yeah, like free samples-
Kurt Elster: I believe that’s called peanut butter.
Paul Reda: Free samples, where it’s like the free sample, whatever it’s gonna cost you to sell it and ship it, the tiny free sample is like five bucks or whatever, if your total costs are five bucks, charge people five bucks. You make zero money on it, but ads cost you money.
Kurt Elster: Yes.
Paul Reda: And this is an ad that will cost you no money.
Kurt Elster: And then this is… That’s your Facebook ad offer for your cold traffic.
Paul Reda: Oh yeah, just give me your email address, I’ll send you a free sample.
Kurt Elster: Yeah. Oh, that’s good. I like. Or do it’s a free-plus-shipping offer. Free sample, just pay shipping.
Paul Reda: Yeah.
Kurt Elster: I like that a lot.
Paul Reda: I mean, hopefully his food is delicious and he stands behind it. Just fire it off as much as you want, because if people eat your food and enjoy it, they’re definitely gonna buy more of it.
Kurt Elster: Yeah. You gotta do the sample strategy.
Paul Reda: You just gotta get it in their mouths.
Kurt Elster: And in an ideal world you just break even on it, and it’s just part of your customer acquisition cost.
Paul Reda: Yeah, if you can break even on the free samples, that’s gold, because it’s advertising that’s costing you no money.
Kurt Elster: Because like, what was the theme in a lot of these other things? It’s, “Hey, how do I drive new traffic?”
Paul Reda: I need new traffic.
Kurt Elster: “How do I drive top of funnel traffic? How do I acquire customers?” He has the offer. It’s a physical thing he could give you. And who doesn’t want to… I don’t know what he’s selling, but if it’s something, it’s fun, or maybe it’s a niche thing, like, “Man, this is one of the most delicious protein bars out there!” Okay, now I’ve got a niche I could target, free-plus-shipping offer, brilliant!
Paul Reda: And I mean, you think of the other-
Kurt Elster: And if he does that, he’s got their address. He could mail them a postcard.
Paul Reda: Oh God.
Kurt Elster: Like two weeks later you get a postcard, “Hey, place a new order for 15% off.”
Paul Reda: Here’s a coupon code. Yeah. And you think, Leila and the watch guy, they can’t give… She can’t give away a free sample of jewelry. He can’t give away a free sample of a watch. You get to give away a free sample of food. Your life is so much easier
Kurt Elster: Yes. Oh! All right. That was a good one to end on. Anything else you want to mention or cover, other than the usual, “Hey, join our Facebook group?”
Paul Reda: Well, join our Facebook group.
Kurt Elster: Join our Facebook group?
Paul Reda: Join our Facebook group.
Kurt Elster: Allegedly.
Paul Reda: Allegedly.
Kurt Elster: You should allegedly join it.
Paul Reda: All right. Well, they’re gonna hear this on Tuesday, which is after the Super Bowl, and after the Iowa caucuses.
Kurt Elster: So, who’s gonna win the Super Bowl?
Paul Reda: I think the Chiefs are probably gonna win, but that’s hard, because like Andy Reid is notorious for his fourth quarter meltdowns, but he hasn’t had it so far this year, so maybe he’s saving it for the Super Bowl. I don’t know. I don’t trust Andy Reid. I was looking at the betting. I like Pat Mahomes to score a TD at plus 400. I think that’s a worthwhile bet, and then they had a bunch of halftime props for guest appearances during halftime, and one of it was Gloria Estefan shows up at like plus 325, and I think that’s a guaranteed bet. I’m definitely betting that. Gloria Estefan’s gonna show up during the halftime show, and I’m gonna win like 300 bucks.
Kurt Elster: Wow. Not that you gamble. That’s illegal.
Paul Reda: No, that’s legal. I’m going to Las Vegas to do it.
Kurt Elster: Okay. I’m sorry. You’re right.
Paul Reda: I’m definitely, yeah, and I’m having an Iowa caucus party with my siblings, because I’m a nerd.
Kurt Elster: That’s cool.
Paul Reda: I just like watching Iowans get together in the state’s best and brightest gyms and discussing people. It airs on CSPAN.
Kurt Elster: I accept this. Yeah. That’s a little nerdy. All right, well, let’s hope your bets work out, and go on Facebook, search Unofficial Shopify Podcast Insiders. You can ask a question. We’ll answer it on a future show. And of course, we’re always happy to hear from you, so long as it’s positive. Yeah.
Paul Reda: Yeah, exactly. Don’t message us and tell us we suck.
Kurt Elster: Yeah, that’s… I don’t want that.
Paul Reda: That’s gonna set us into a spiral for the rest of the day. We’re very fragile.
Kurt Elster: Yes, I’ve… Extremely fragile. Very low self esteem.
Paul Reda: That’s not a joke, and like please-
Kurt Elster: Cry a lot.
Paul Reda: Log into iTunes and leave us a five-star review. Please don’t leave us a one-star review, it will literally ruin Kurt’s day.
Kurt Elster: It’s true.
Paul Reda: It’s not, I’m not even kidding.
Kurt Elster: Oh, I haven’t read the reviews in like a year. Yeah. I refuse. All right, we’ll end it there.
Paul Reda: Goodbye.
Kurt Elster: Thank you for listening.