The 5-Part Offer Stack
In this episode, we discuss how to unlock lower acquisition costs, retention, and profitability by captivating the right type of customers. Scott Cunningham shares his five-part offer stack formula for Shopify merchants. Learn how to understand your customer, use hooks to grab attention, create a relatable narrative, differentiate with brand attributes, and craft a value proposition that converts leads into loyal customers. Listen in as Scott offers insights gained from managing millions of dollars in digital advertising spend and driving 20-40% of all sales through email marketing.
The Unofficial Shopify Podcast
Kurt Elster: Welcome back, my friends. So, I was thinking, eCommerce success is governed by a simple formula. It’s traffic times conversion times average order value will give you revenue for that period. And you can test this. Go back. Do your last… First quarter of last year and then multiply it times four and then see how that compares to the actual numbers that came out for last year. But I don’t know. It can’t be that sample, right? Can it? If it is, where and how do we get the first part of that, the traffic? The qualified traffic. I could send endless traffic to your website all day. None of it will convert. I can get it for pennies on the dollar from Fiverr, right?
I need qualified traffic. There’s that magic keyword in there. Or even if it isn’t that simple, what are we missing? Oh, I know. Retention. Customer retention. What’s your repeat customer rate? I can’t just keep… I can’t be a vending machine and just constantly acquiring new customers and then having them disappear. I need those customers to come back. Joining me today to discuss it is Scott Cunningham, Founder of Social Lite, an award-winning Shopify Partner agency that has helped hundreds of Shopify stores scale past seven and eight figures. His team has managed millions in digital ad spend for their clients and driven 20 to 40% of all sales through email marketing as Platinum Klaviyo masters.
We’re not done here. He’s also a cofounder at Merchant Mastery, a bestselling program on Thinkific, helping early stage Shopify stores reach their first 100K a month in sales. With over 20 hosted Shopify meetups across North America and teaching experience at the University of Alberta, we’re excited to hear from Scott on his eCommerce strategies. And his time management strategies. How does this man have time to get anything done? I can’t believe it.
So, I’m your host, Kurt Elster.
Ezra Firestone Sound Board Clip: Tech Nasty!
Kurt Elster: And this is The Unofficial Shopify Podcast.
Sound Board:
Kurt Elster: Scott, welcome. How you doing?
Scott Cunningham: All right. Great intro there, Kurt. Thanks for having me out here today.
Kurt Elster: I am so thrilled you’re here. I want to open with a question I’ve heard a lot. I have my opinion. True or false. Facebook ads, no go. They no longer work for eCommerce businesses. Zuck is too busy with VR headsets.
Scott Cunningham: Kurt, are you trying to scare me away from the podcast as we’re just getting started here?
Kurt Elster: I don’t know the answer.
Scott Cunningham: All right. This is one of those things I feel a little bit traumatized about because I can’t tell you how many times entrepreneurs come to tell me. They’re like, “Scott, something’s changed. Something’s changed in the world. Facebook no longer works for my business.” And I hear this all the time. I hear it from all angles. I hear it from dozens if not even hundreds of entrepreneurs telling me, “Scott, Facebook no longer works.” So, then what do they do? They go and chase down another channel.
So, they’ll be like, “Scott, Facebook no longer works. I’m gonna go and try TikTok. TikTok no longer works. I’m gonna try YouTube. YouTube’s not working. I’m gonna try Pinterest.” And it becomes this chasing the channel hamster wheel process that kind of never gets you anywhere.
Kurt Elster: I like that phrase, chasing the channel.
Scott Cunningham: You know, you just gave a pretty good introduction into me. We do manage a lot of ad spend, so I would know as you would know as a guy who works in the eCommerce space. Acquisition costs are going up. So, it is getting a lot more expensive to advertise. I think back in 2016, 2017, you could be kind of okay at marketing. You could put some ads out there. You could reach a ton of people. And you could get some sales. You didn’t have to be that good. But as the acquisition costs keep going up and it gets more competitive, I think the key is not that Facebook no longer works. It’s that we no longer work the way we were working, right? So, we gotta do better.
Kurt Elster: Aha. So, what I’m hearing is the popularity of these things, of Facebook as an ads platform, seven years ago there were fewer players overall, but Facebook had a similar number of eyeballs and use time as it does now, but with way fewer advertisers. So, that sounds like supply and demand to me, right? And then over time things… Obviously, we’re all making ads continuously on Facebook. The people who are advertising are getting better at it and then you have big players, like Walmart, BMW, who’s like, “Hey, it’s gonna be 10 years for someone to consider then purchase a car, so we could just waste money on Facebook ads,” kind of thing.
And so, I’ve got them in there. Now, suddenly same number of eyeballs but way more advertisers, and more sophisticated advertisers, and so in this bidding system I now have to spend way more to get the same results. That’s what I’m hearing.
Scott Cunningham: Absolutely. More competitive. More money from the big corporations, like the Walmarts. But one thing that was missing there is just also more regulations, right?
Kurt Elster: Tell me about that.
Scott Cunningham: So, now there’s the whole iOS privacy updates, and there’s algorithms, and it was the Wild West back in… It was the Wild West back in 2012 to 2014, 2015, even 2016-2017 was still pretty easy to get in front of a ton of people with a little effort, and key to that all is what you were highlighting there. It’s like no competition. So, you can kind of just be okay, get in front of thousands and thousands of people, get a bunch of traffic. I know at the start of this show here you were saying it’s not just about getting traffic. It’s about getting good traffic, right? But with a little bit of spend back in those days you would get the good, the bad, and the ugly with a little bit of effort, right?
So, I think nowadays, yeah, you’re right. More regulations, more privacy issues, more iOS updates, more everything. It’s just getting harder and harder to generate a sale.
Kurt Elster: So, should I still bother? Or should I look elsewhere? Because Facebook’s not the only game in town anymore.
Scott Cunningham: Well, you know, I’m actually a marketer, right? I’m a good old fashioned marketer. This is what… I’ve worked in sales a lot too over the years. I’ve done lots of coaching. I’ve done entrepreneurship. But at the heart of it I was just an in-house marketer back in the day and I became an accidental entrepreneur just because enough people were asking me for marketing help or consultation, right? So, I think when I think about the state of acquiring customers, I’m like, “Oh, it’s kind of good news because it’s not hopeless.” It just means the playing field is getting a little bit more challenging and we gotta do what? Do better at marketing.
So, we can’t just kind of like launch some ads, cross our fingers, hope everything works out. We gotta get back to the basics. And if we could get back to the basics and do well, we stand a good chance to not only survive but thrive.
Kurt Elster: If we’re going back to basics on marketing and I’m thinking back to business school, it starts with a positioning statement and maybe a customer persona. I couldn’t tell you the last time I saw a customer persona for an eCommerce store. Or even a positioning statement, for that matter. And these are like cornerstone fundamentals that they beat into you to get an MBA.
Scott Cunningham: I beat it into myself over the years a lot. You know, at Merchant Mastery we do have a mentorship school. We have 800 merchants in there and this is the thing I harp on the most, right? We used to host… We have this Merchant Mastery school where people come in, they get help with optimizing their store to get ready for launching ads. They get some email set up and then they launch some ads. And I noticed that people were kind of skipping over the avatar and the positioning part, so I injected myself into our own coaching program and it was like, “Nope, I’m now hosting a call every Monday that’s all about perfecting your avatar because I noticed a lot of you are just skimming over this or not doing it.”
Because a lot of people look at it and they’re like, “Oh, avatar document. I’ve done that before. I’m not gonna do that now. I know the answers.” But there’s a reason they force this into you in business school. It’s because this is the key to unlocking lower acquisition costs, retention, profitability, everything. It’s all about captivating the right type of customers.
Kurt Elster: Is there a process or approach for this? Certainly, this morning, coincidentally, I was playing with ChatGPT like I do. Good way to procrastinate and feel productive at the same time. And I played with it. I tried to have it write customer personas. I tried to have it do research. And of course, the issue with ChatGPT is it is incredibly convincing. Who knows if the result is accurate or not? And what is it really basing it on, right?
So, tell me… That’s the easy cheap way out with mixed results. What’s the right way? What is the Scott Cunningham approach here to customer personas?
Scott Cunningham: All right, Kurt. All right, Kurt. I’m gonna give it to you because this is serious business. This is serious business. And we’ve hosted, like you said, 20 Shopify meetups all over North America, and this is what I always force people to answer. I say, “Okay, everybody. Raise your hand if you’ve filled out a customer avatar before.” And everyone’s kind of like, “Oh, okay. Yeah. I have before.”
Kurt Elster: It’s like half up.
Scott Cunningham: Half up.
Kurt Elster: All right, if I don’t put my hand up he’s going to waterboard me. If I do put it up, then he’s going to quiz me on this halfhearted customer avatar that’s really just a description of myself.
Scott Cunningham: Yeah. It’s a trap. And then I say, “Okay, well, keep your hand raised if you’ve actually put it to use. If you’ve actually put the avatar document to use.” And it’s even fewer hands that remain, right? But the key is whenever I start a campaign… We run a lot of our own ads for our own businesses, right? And I would never create an ad, or I would never have a team member create an ad, without using the avatar, right? So, we have this 41-point questionnaire that we go through to create the customer profile and it has things like how do they spend their weekends, what do they do for fun, what websites do they go to for information, what are their fears, what are their wants, what keeps them up at night? We have all these questions but there’s one part of this avatar profile that I use most often and it’s a simple before and after grid.
So, it’s literally like your customer’s in this miserable state right now. Your product is a vehicle to get them to this aspirational state. So, what was life like before they use your product and what is life like after? And it’s things like what did they have before? How did they feel? What was their average day like? What was their status? And what was the worst-case scenario if they never used your product? Compared to hey, now I use the product. Now I’ve transformed. Now I have all these amazing things, and I feel so empowered, and my average day is so amazing, and my status is elevated, and now… What is the greatest outcome that a customer could receive from using the product?
Kurt Elster: I see the value in that. Where does… How do I inform it? Where do I get those answers?
Scott Cunningham: That’s a good question and the reason it’s important, so I’m gonna answer that, but I just want to highlight one thing. The reason it’s important, and I could go on a tangent on this for a long time, but just a quick note is that a lot of marketers, when people are not doing good marketing… This is gonna be one of the topics today. Good marketing versus not good marketing, right? When people are doing not good marketing, they talk about their products as if they’re the greatest things that have ever graced this planet, right?
So, they’re like, “Oh, you gotta find our product. We’re so amazing. We’re so awesome. We do all these things.” But the customer doesn’t know the benefit yet, so they don’t know if it’s for them, right? So, we want to really read that customer’s mind and speak to their nuances, and the more that we can do that, the more we win their attention. But the best way to do it… Obviously, I have an agency that works with most often Shopify stores doing a million-plus a year, and then we have Merchant Mastery, the school, where some merchants are doing like $1,000 a month when we meet them. So, very wide spectrum.
So, the answer is gonna be different based on where you’re at. If you’re just getting started, sometimes it’s speculative, right? Sometimes you are the avatar.
Kurt Elster: Yeah. Before you’ve made that sale… I made that joke derisively, but the reality is like that’s the truth. When you’re first starting out that’s where it has to start. But then over time it’s gotta evolve, right?
Scott Cunningham: Totally. Because you get more data. And the best kind of marketing is driven by data, right? So, if you’re just getting started, it’s more like… You know, I’ll tell this to a business. I’ll say, “Okay, you’re just getting started.” The first thing I’ll ask, do you have any reviews? Okay, because if you have a handful of reviews, we’re gonna go sift through them and we’re gonna find those hyper engaged responses and find the ones where people were just pouring their heart out about how the product changed their life. If you don’t have those, go look at a similar competitor who sells a very similar product and see what the customer was loving most about their product that is similar to yours.
So, we could do a little bit of research looking at reviews, and if we don’t have those, my favorite thing, my favorite thing, if I ever meet a merchant and they tell me that they sell face to face to customers, I’m like I want to put them on my shoulders and march around a parade. Because-
Kurt Elster: You know, in interviews with… Because we’re on episode 500 or something at this point, that’s a common thing when I talk to people. The ones who are early on and sell physically in person, they’re like, “I’ve got a table at some kind…” And it’s always an event. It’s like, “We go to drift events, drag races, a high school football game,” whatever it is. Wherever you can put a darn table out and sell your wares, old school merchant style, those people always have the best understanding of their customers because they’ve talked to them face to face in this ideal scenario. It is so easy a thing to dismiss and yet so powerful. Even if it’s like, “I’m gonna rent a table at a flea market,” do it once for the experience. It’s quite enlightening.
Scott Cunningham: Okay, Kurt. I want to put you on my shoulders and march around a parade right now because I feel like you and I are two peas in a pod on this topic here, because it’s like there’s no… You’re spoiling yourself. You’re spoiling yourself and your future marketing efforts by getting out there and talking to your customer. Presenting your products, presenting your offer, and just gauging the response. I would tell anybody if you’re just getting started, or maybe you’ve been around for a little bit longer, you don’t want to run ads until you know that there’s actually people out there that love you, right?
So, it’s a good exercise to get out there, talk to customers, and see if there’s a few people who really resonate with what you’re saying. Because if you find those people, you’re gonna gain their insights. You’re gonna build out your avatar based on what they’re telling you. And then you’re gonna go find more customers just like them based on that avatar, right?
Kurt Elster: It’s just it makes it so much easier to make decisions, create the content, have a marketing message that lands when you have met real people and you can picture them. Oh my gosh. I’ve done that for the longest time. When creating content, I will picture a specific person that I’m like, “This is really who I’m writing to in this case.” And it’s often… It’s not the same person. It’s generally going to be a Shopify merchant, but it’ll be different ones depending on the scenario, and the initial content creation, whether it’s like newsletter, post, a paragraph in a newsletter, there’s a person I’m thinking about that I’m like, “This is who I’m telling to and speaking to.” Now it really… It just makes it easier to write as opposed to the traditional way of like the void of a blank piece of paper and a megaphone, knock yourself out. That’s intimidating.
It's much easier to picture it one-to-one when you’re creating one-to-many.
Scott Cunningham: It really is. It really is. And I think you’ll also find out what kind of customers don’t appreciate what you sell, and things that they don’t like, and you can kind of… With marketing, you never stop the process of reiterating your messaging based on the constant feedback loop with your market. So, even myself, when we go to these Shopify meetups all across North America, my favorite thing is that I get to hang out with merchants, right? And I get to learn about what their challenges are in the moment and those kinds of things.
So, if you’re listening to this right now, and you’re advanced, and you’re already scaling to the moon, hey, would it hurt you to go and set up a little popup shop to get some more insights that are gonna improve your marketing? It’s probably a good idea for everyone.
Kurt Elster: So, we’ve established if we’re struggling with our digital ads and we don’t have a customer persona prepared, ah, we’ve found a serious issue. Go back and put together that customer persona and then once you have that, that’s gonna solidify in your mind who you’re writing to, why, what’s driving them, why they’re purchasing from you, what they need to hear, and now you can filter your content through that. Whether it’s the existing ads… Go through your library, rework it, and now we have a much clearer image of what we think should work before we spend the money on our PPC ads, right?
Scott Cunningham: Absolutely. And it’s like if there’s anything else you take away from this exercise, here’s the other thing. It’s hard creating an avatar profile. It really is. Perfect customer profile, avatar, whatever you want to call it, it’s like sometimes you’re gonna feel like you want to bang your head against the wall because you don’t have the answers. But just try. Get some words out. But specifically, I would say try that before and after exercise.
Think about what does the customer have before meeting you, how does it make them feel, how’s their average day, what is their status, and then the worst-case scenario. And I’ll give you an example, like I’ve worked with this one business for a long time. They’re called Ocean Sports. They’re located in Alberta, Canada, where I live. We’ve probably worked for them for like four or five years now. And they were primarily a brick-and-mortar store and not an ocean in sight, right?
So, we’re in Alberta in the prairies. No oceans nearby. So, they were brick and mortar. During the lockdown and everything, that’s when they were like, “We gotta ramp up our eCommerce,” and that’s when we really started helping them sell across Canada. But one of their avatars is… There’s lots of avatars that they have. They sell lots of lake gear, so if you think about that, they could have professional wakeboarder, beach bum, a newbie to sports, or they have the lake dad, right? And they love the lake dad. Why? Because the lake dad is the guy with the disposable income. He’s buying all the gear for all the kids and the family at the lake, right?
And a really quick version of his before and after grid, think about it. He’s shopping for wakeboarding gear for his kids, so what does he have before shopping with Ocean Sports? He has broken down, run down gear that nobody wants to use. How does that make him feel? Embarrassed and guilty that he has to give his kids that garbage. How did that impact his average day? Well, he’s no longer at the lake making memories with his family. He’s just working over the weekend, right? And what is his status? He used to be a cool guy at the lake. Now he’s a reclusive neighbor, right?
And what’s the good versus evil on that? What’s the worst-case scenario if he never gets better wakeboard gear? His kids grow up on TikTok and Snapchat, right?
Kurt Elster: It’s such a great illustration because you started with like, “Hey, here’s a place that sells boat accessories,” and that sounds very mundane. And then as soon as you said lake dad, all right, I just turned 40, I got 3 kids, I suspected I knew where this was going because even just applying that label, I think that’s important to those customer personas. The label. I can picture it. And right away I’m like… I see advertising geared toward me or my wife and it’s like, “Hey, you’re gonna make special core memories with your kids.” That’s code. That’s code for your kids are gonna think you’re cool. You want your kids to think you’re cool, right? It’s only gonna be for a moment. You’re gonna spend a lot of money to do it but it’ll be worth it because for an hour your kids thought you were cool.
And that’s the magic of those customer personas, isn’t it?
Scott Cunningham: Absolutely. And if you didn’t build that, if you didn’t go through that exercise that we just went through, you might have just been like, “Oh, I gotta force myself to write an ad about wakeboarding gear, so what am I gonna talk about?” I’m gonna talk about the gear. I’m gonna be like, “We have this fiberglass material. It’s safe. It’s fun. It looks good. It’s multicolored.” All these features, right? But if we think about the avatar first, the guy who is most likely to buy and spend the most, what kind of ad is gonna resonate with him more? Is it gonna be like, “Buy this new fiberglass wakeboard,” or, “Get your kids off TikTok and hit the lake and create some memories?”
And according to Kurt, I think it sounds like you would resonate with the latter.
Kurt Elster: Yes. Oh, absolutely. Yeah. If it’s like, “Look, spend this cash and you make family memories, cool guy,” I’m like, “Oh, fine. Here’s the credit card number. Just take it.” So, I’ve got this customer avatar. I’m applying it to Facebook ads. How am I determining success, my total success here? What is the KPI we’re looking at?
Scott Cunningham: Okay, so this is a key thing. You said it the best. I do feel like you and I are two peas in a pod. If there was a big peapod, I would get in there and get cozy with you.
Kurt Elster: That’s probably a product somewhere. Giant peapods.
Scott Cunningham: If somebody listening could find that, send it over to us. But the key is like it’s about the reason I was saying two peas in a pod. You said it. It’s about the customer and positioning. So, first we need to understand the customer, and then we’re gonna position our products and our ads to resonate with that customer the most. So, we actually use this five-part positioning formula. We call this a full offer stack.
And the first ingredient in the five-part formula is the hook, right? And the hook is all about the customer and not about you. So, when I’m thinking about this before and after grid and the customer avatar, I use that exercise to create hooks. Mostly I’m just doing that before and after exercise to pull out some awesome hooks.
Kurt Elster: Give me an example.
Scott Cunningham: Yeah, so an example of a hook is like get off Snapchat this weekend and hit the lake.
Kurt Elster: And the magic of this is you have both agitated a pain for the customer profile is my darn kids spend too much time on social media. And that’s what that statement has done is either I recognize that pain from myself or others, and now you’ve got my attention immediately, or it doesn’t land and I move past it. It’s a bit of active disqualification. So, first half, get off Snapchat, and hit the lake. Okay, and so now we… That is qualifying our target customers. It’s like it’s gotta be someone who’s interested in the lake.
And you did it in very few words. That’s the magic. Okay.
Scott Cunningham: It’s a qualifier. It’s basically saying do you have this pain point and do you want this other thing.
Kurt Elster: Agitate the pain. Active qualification or disqualification.
Scott Cunningham: That’s totally it. And this is a campaign I do not work on, but I see their ads every day, and everybody listening probably has seen their ads every day. It’s AG1, like the health drinks, right? I literally just before hopping on here today, I saw another one of their ads and I took a screenshot because I love their hooks, right? And their hook says, “Say goodbye to your daily pill routine.”
Kurt Elster: Yeah, that’s good.
Scott Cunningham: Right? And they literally… The ad that I just took a screenshot of, I sent it to our marketing team because I want to document this. They literally had a before and after, like a video, and in the before the woman was opening up all her pill bottles and taking like 20 different pills, and in the after she was just having a sip of this nice green juice and then she left, and the other avatar was sitting there still taking her pills. But it’s basically saying without even seeing the creative, if you just read the hook, say goodbye to your pill routine. What does that do? Serves as a qualifier for anyone who’s fed up taking their zincs, vitamin Ds, and irons every morning, and then you forget a pill, and it’s kind of like a big pain in the butt.
So, anybody who is having issues with that daily pill routine, suddenly you got their attention. It’s a qualifier.
Kurt Elster: Okay. And so, we’ve got… Again, it’s agitate the pain and qualify. It’s people who were taking supplements. It’s like, “All right, I need the people who were taking supplements and kind of annoyed about it.” It has become a chore, a necessary evil for them, and I’m going to give them, “Hey, this is a seemingly better alternative.” It does sound attractive. It does sound better. Athletic Greens. That seems more natural, legitimate than a variety of strange pills I got off Amazon.
Scott Cunningham: Totally. Totally. And with the hook, it’s important to remember here, with the hook we didn’t explain what we did. We didn’t explain how we solve that pain point. It’s just the qualifier, right? With the lake dad example, it’s like get your kids off TikTok and hit the lake. Okay, I don’t know what you do. I’m interested, right?
So, with the hook all we’re trying to do is capture their attention and not capture the sale. We just want them to know that this message is for them, and we help them with some miserable thing that they’re going through right now.
Kurt Elster: So, we got our thumbstopper.
Scott Cunningham: Yeah.
Kurt Elster: Okay, so number one, hook. Two through five? Five is profit, I assume.
Scott Cunningham: Yeah. Well, five is… It’s gonna be about the price, for sure, right? But the second ingredient is basically they’re like… As soon as you win their attention with the hook, they become a detective. Your customer turns into Sherlock Holmes, and they’re agitated, right? And they’re like, “Okay, you won my attention. This better be worth it.” And they’re gonna interrogate the heck out of you.
Kurt Elster: So, now it’s a challenge.
Scott Cunningham: Yeah.
Kurt Elster: Okay.
Scott Cunningham: Now it’s like, “I got your attention. I gotta deliver. I gotta deliver value now.” So, we have these four value attributes, we call them, and the first one is about function. And this is like how does the product work and actually make my life better? The features and the benefits. So, it’s like say goodbye to your daily pill routine. We have a drink that you take every morning, and it has 75 minerals and 75 nutrients that your body absorbs. So, it’s explaining literally how the product works and how it makes your life better.
Kurt Elster: All right, so value is like… or that initial value is the straight functional proposition of it, going very quickly into something factual?
Scott Cunningham: Yeah, like literally factual. This is the features, benefits, function, it’s literally like what the product is, what’s the use case, and how it works to make my life better.
Kurt Elster: Okay.
Scott Cunningham: So, it’s just like explaining your product and your value proposition.
Kurt Elster: And do we do it as the bolded style Amazon descriptions? Is it a landing page?
Scott Cunningham: So, this is the key. Anyone who’s listening who is feeling compelled to use this five-part formula, what you want to do, you just want to brainstorm lots of things, right? So, right now we’re just brainstorming. So, when we come up with hooks, we’ll look at all those before and after boxes and we’re just gonna come up with many hooks, right? The lake example, we could have said, “Have the best summer with your kids this year.” That could have been a hook. Or have the best summer at the lake. Maybe it’s a little bit more of a qualifier but there’s lots of different hooks we could have come up with just through that little before and after exercise.
And same thing with function attributes. We just want to list off all the things. It’s like with AG1 they could have said, “We have 75 nutrients and minerals for your body.” That’s the ingredients function. We could have done use case function. You just put it into a cup of water every morning, you stir it up, and it comes out green and it tastes good, right? So, those are two different function attributes. One is like what are the ingredients and the benefits for the body. The second one is how do I use it, right?
So, we gotta brainstorm lots of different functions. And what you’re gonna say later when we reveal how this formula comes together, there isn’t… It’s not like step one, step two, step three. Sometimes these ingredients are in a hook that’s overlaying the creative. Sometimes it’s the intro to the body copy. There’s no right and wrong way to mingle up all the ingredients. But we want to include them all.
Kurt Elster: Okay. And so, all right, so far this is the easier part.
Scott Cunningham: Yeah. This whole thing is gonna be simple. Very simple. I like simple.
Kurt Elster: Yeah. When you break it down into A, you’re presenting it as like here’s a standard operating procedure to do this, and then the individual steps in it are accessible and reasonable. It’s when you’re looking at the problem as a whole without those series of steps and without context and experience that it becomes deceptively complex and easy to do wrong. But not wrong in a way where it won’t run. Wrong in a way where Facebook will just spend your money.
Scott Cunningham: Yeah. Yeah, and I think it’s therapeutic to do this exercise, so like right now we don’t want to be thinking about Facebook Ads Manager and setting up ads. We’re just in the brainstorming zone right now.
Kurt Elster: All right.
Scott Cunningham: Right? So, we’re just getting it all out there, and it is actually therapeutic for business owners. I’ve worked on this exercise with hundreds of Shopify store owners, and they’ll be like, “Oh my goodness, Scott, I’ve had all these ideas, all these thoughts about my business before, and this exercise has allowed me to just document everything.”
Kurt Elster: How often does this process end in tears?
Scott Cunningham: Maybe 1 in 10?
Kurt Elster: I was gonna say if it’s not like 1 in 100 you’re lying or we’re not trying hard enough.
Scott Cunningham: Yeah. Yeah.
Kurt Elster: Yeah. You know, copywriting and thinking through this stuff can be tougher than it sounds at times. And I think most of the time probably easier than you think if you approach it in this systematic fashion. All right, so what step are we on? Where are we going from here?
Scott Cunningham: We got the hook, right?
Kurt Elster: We got the hook.
Scott Cunningham: So, basically the customer is like, “You got my attention with the hook. I’m interested. That sounds like me. How does this work? Okay, I get it.” We answered that with function. And the next thing they might ask is, “Okay, but who sells this? Do I like them?” It’s literally a likability. Do they like the brand? So, with this one it’s very much we use brand attributes, right? And we want the customer to see themselves in your narrative, align with your values, believe in your mission, support your cause.
And a favorite example that we often use for brand attributes is like a founder’s story. I started this business to solve this problem in the world and I climbed the highest mountains and swam the deepest oceans to solve this, and I failed 20 times along the way, but I got back up. And I figured this out for you, customer, right? And they see themselves in that narrative. They’re like, “Oh, I’ve been trying to solve this too.” So, they’re seeing themselves in the narrative and they’re aligning with the mission.
Kurt Elster: How truthy does my founder narrative have to be?
Scott Cunningham: This is a very common question that comes up. It has to be truthy. But the key is I don’t think we all look at ourselves as romantically as a marketer could. We could… Not embellish. Embellish is the wrong word. We could romanticize the story in a way that most founders don’t see themselves. You know, I was talking to an incredible merchant who’s the founder of a business that sells Dungeons and Dragons dice. She’s just crushing it. She’s so smart. But she’s like, “Scott,” she asked me the same question. “How truthful does my founder’s story have to be?” And I’m like, “Well, what are you talking about?” In a million years I would never start a business to sell Dungeons and Dragons dice, so there’s gotta be something that led you there.
She’s like, “Oh, I just wanted to start a business.” I’m like, “No. No. Why did you choose Dungeons and Dragons dice?” And through my interviewing process with her she was like, “Oh. Well, I play Dungeons and Dragons and I’m super particular about the dice I use.” And I’m like, “Well, you’re a founder out solving a problem,” right? And I have this really good example of this guy, his name’s Rodrigo. He sells craft vinegar. And he was like the smartest guy I’ve ever met. When I met him I was like, “He’s gonna do so exceptional.” I met him through Shopify for startups, like through that community, and he ended up working with us at Merchant Mastery, and he was hitting the ground running, so smart, doing everything we told him to do, he was doing it.
But then when he launched ads he had like a 0.58 return on ad spend, so he was spending like $1,200, generating $600, and we just did a little audit based on the five-part formula that I’m talking about now, and he was missing brand attributes. And we’re like, “Rodrigo, what’s going on? What’s the founder’s story?” And he’s like, “I don’t really have one.” Then we find out his craft vinegar, he was at a farmer’s market, he couldn’t find quality craft vinegar. He could only find like the white kind that is fermented for two days. I know all this now because I’m becoming a vinegar expert through him.
But then he’s like, “Yeah, and then I was like oh, well, okay, how do I make better vinegar? I wanted to solve this. So, I was in France, and I went to this library, and I found this encyclopedia that taught me this 1800s method of fermenting vinegar for nine days, so then I consulted with Harvard University about creating this machine and I was able to build the machine, and I built the facility, and now I’m fermenting nine-day vinegar and the taste is so much better.” He couldn’t find that story himself.
Kurt Elster: Yeah. And it’s because when it’s your own life it seems just… It seems obvious and mundane to you. And then this happens all the time where I’ll ask a founder. I’ll be like… Someone will apply to work with us and of course it’s like, “Tell us about yourself, your story,” or they’ll have the about us on their site, and it’s like it’s factual and whatever, kind of soggy, a little limp, and then I’ll get them on the phone, and I’ll say, “Hey, tell me about it. How’d you get here?” And they’ll tell you this incredible story like that and then every single time I go, “Why is that not on your website?” And they go… They’re like, “What?” It just hadn’t occurred to them.
Scott Cunningham: Hadn’t occurred and they’re just so in the… You know, you’re just kind of in your day-to-day life doing your thing, but it’s like let’s pause for a second here and identify what led you there. Because there’s something. There’s something that you had an interest in solving this specific thing. And so, I think that the story needs to be factual, but it’s a good idea to probably bring in somebody else to pull the details out.
Kurt Elster: Okay, so it’s like our own perspective, our own humility is working against us, and so it works better if you explain it to someone else, and so they can tell it in the third person. It’s also weird to write about yourself in the third person.
Scott Cunningham: It is. It is. And we actually had one of our team members help Rodrigo retell the story and we turned it into this beautiful ad, with carousel images showing the fermenting process, the encyclopedia image that he found in the book, and this ad when we relaunched it got a 4 return on ad spend within the first week.
Kurt Elster: Whoa.
Scott Cunningham: So, he was spending $400 generating $1,600. And three weeks later emailed us and said, “I’ve run out of product and my staff want to quit.” Right? It’s a good problem to have but the key is just more… That’s what we’re trying to do with this five-part formula is we’re just auditing. Are you including all the ingredients? Did you try everything? Because with these five ingredients, we’re kind of like making an omelet. We’re making an omelet and we don’t know which of our omelets our customers love the most.
So, we’re gonna try and serve them green peppers with cheese and tomato one day, and then the next day we’re gonna try onion and mushroom and sausage, right? And it’s just like putting these ingredients in different ways and then finally seeing, “Oh, everybody loves that one omelet.” And then we’re like, “Okay, let’s scale that omelet. Let’s go big.”
Kurt Elster: I want an omelet, but you know, with the price of eggs, it’s multiple eggs for an omelet. What are you out of your mind? I’m gonna need these Facebook ads to scale if we’re making omelets here. All right, brand attributes, and I like the way you phrase this. This is where people decide if they like you, the brand, or not.
Scott Cunningham: Totally. Likability. Yeah.
Kurt Elster: You gotta tell your story. You gotta have values in there if that’s important to this process. Oftentimes that might be like sustainability, or like 10% of profit goes to X, that kind of thing. And then we’ve got… And then that narrative-driven story of why you’re doing this, how you ended up here, and you gotta get out of your own head to do it.
So, ignore that polite dinner party humility. That’s not gonna work. They’re not gonna help us out here. Where do we go from there? We got hook, functionality or value, brand attributes…
Scott Cunningham: Yeah. And with brand, I like that you brought up the sustainability thing. That’s the quickest path to likability. It’s like I only buy from sustainable brands. They are sustainable; therefore, the likability is instant. In most cases, right? But it’s also another way to think about it is polarizing audiences. So, you could be really controversial and it’s like, “We only work with these people and everybody else can go away.” That’s a quick way to get a lot of people not liking you, but a whole bunch of people, attracting a whole bunch of the right kind of people.
Kurt Elster: Separate the wheat from the chaff. It’s active disqualification.
Scott Cunningham: Yeah. And honestly we work with Canada’s biggest lamb producer. There’s a lot of vegetarians that heckle on their ads, so we just decided to-
Kurt Elster: Stop driving engagement for that brand.
Scott Cunningham: Yeah. And we just decided to own it. We’re just like, “We’re beef people,” or like we’re… I guess, sorry, lamb, not beef, but we’re meat people, and here’s meat recipes, and we own it, and we respect your decision to be a vegetarian, but we are meat people.
Kurt Elster: And you’re not a butcher is what I’m getting here.
Scott Cunningham: Yeah. I’m not a butcher, for sure.
Kurt Elster: Neither am I.
Scott Cunningham: But you know, just kind of like owning your audience. That’s a brand attribute and people who like to barbecue are gonna be like, “Yeah, I like that they’re standing up for the meat crowd,” right? But brand attributes, it’s about likability. So, just to recap where we’re at, it’s the hook, got my attention, function, I get how it works, brand, love this company. Then the next thing they might ask is okay, so far so good, but is this company legit?
Kurt Elster: And? Yeah. Well, I’m gonna give you my credit card. I better think you’re legit. How do I determine that? That’s one of my issues when I’m like, “All right, I’m about to buy.” Is my stuff actually gonna show up?
Scott Cunningham: We address this one with what we call influence attributes, which are third-party endorsements. So, these are things like the best influence attributes are customer reviews, customer testimonials, user-generated content, but it’s also gonna be things like industry endorsements, celebrity endorsements, influencer endorsements, and social proof, right? What publications were you featured in? What awards did you receive? What certifications do you have? We’re looking for the stamp of approval from third parties.
Kurt Elster: I agree with all of those. Who knows if it’s true? I read a study saying that people were… As eCommerce became more dominant in our lives and people got more sophisticated with shopping online, they are more distrustful than previously of some of these endorsements. But even if they are more distrustful, I think they still work. I think they’re still necessary.
Scott Cunningham: I think it’s like this is the key to this offer stack formula, is like we want to be intentional with testing multiple ingredients. Here’s the thing too. You’re probably like, “Whoa, Scott, every ad you write you’re putting in these five ingredients?” No. We don’t. Sometimes it’s two ingredients. Sometimes it’s three. But we could look back and be like, “Ooh, these ads are terrible.” Just like with the craft vinegar example we were like, “He doesn’t talk about brand ever. Let’s try that.” So, if we looked at somebody’s ads and they were terrible we could be like, “Oh, they’re not trying to influence at all.” And I’ve seen influence be done in a really subtle way, like there’s a brand… Obviously, you and I are looking at all these eCommerce brands and admiring and we’re infatuated with what everybody’s doing, but there’s a company, Kotn, right? They’re a big direct-to-consumer brand and they were like, “Our best-selling items are finally back in stock.” Or like, “Our best-selling throw blanket is finally back in stock.”
So, that’s a subtle use of influence because it’s saying customers love this thing. But it’s also using the last ingredient, because it’s using a little bit of scarcity, right?
Kurt Elster: I love… Yeah, I love the best sellers, back in stock. I think it is valuable and important to let products be notably unavailable and then if you can bring them back, because it creates that urgency and scarcity and I think it adds legitimacy. It’s like, “Well, those products didn’t sell themselves out.”
Scott Cunningham: It’s totally like a double… We’re gonna get to the last ingredient in a sec, which is… But scarcity and urgency is part of the last ingredient, but it’s a double whammy. It’s scarcity, urgency with influence. And I’ve seen it. There was another ad I was looking at. That’s all I do all day. I look at ads, audit, and admire, but there’s a brand, Ana Luisa. They sell jewelry. And I was looking at all the ads that they were running at once and they had one that was like, “52 sold every day.” The product that has sold out 52 times. It’s just leveraging influence in different and creative kinds of ways.
Kurt Elster: Yeah. It’s that implication of scarcity. But you’re right. Yeah. Sold out 52 times. That’s a lot of sales.
Scott Cunningham: Totally. Totally. And it’s like, “Ooh, this thing’s in demand. I better check it out.”
Kurt Elster: Right. We all want what everybody else wants or that we can’t have. And man, if you can combine those two things…
Scott Cunningham: Powerful, right? And we want what other people have endorsed, and that’s the whole idea with influence.
Kurt Elster: Humans are interesting and sometimes predictable.
Scott Cunningham: Yeah. And I do caveat here. I believe in authenticity. I don’t want to manipulate with this formula. It’s a powerful formula. With great power comes great responsibility. And we want to be really genuine. We want to be authentic. We want to be true to the attributes that we include. And that’s what we’re doing. We’re having the best chance of selling more by being authentic but addressing all of these lines of questioning that we know customers are all asking. Anybody listening to this right now, you’re probably like, “Oh, I always ask those things when I’m shopping,” right?
So, it’s pretty simple. That’s what I like about it.
Kurt Elster: Yeah. It is. It seems reasonable and relatable. Once you laid it out, it’s like oh yeah, I go through that. Or I recognize that tactic, or I recognize that behavior in myself. 100% I’m on board with this approach. Absolutely, it would work.
Scott Cunningham: Yeah.
Kurt Elster: What the heck was I gonna say? But yeah, I brought up… we’ve talked about it has to be truthy, it has to be authentic. The basic rule I conduct my life with is: Is this activity MEL? Moral, ethical, legal. All right. If it passes those three, fabulous. And obviously truth falls under morality or ethics. If I live by those things, both in business and personal life, things should work out fairly well, I hope.
Scott Cunningham: Yeah. I like that. I wrote that one down.
Kurt Elster: Yeah. It’s easy to remember. MEL.
Scott Cunningham: My wife’s name is Mel too, so I’ll tell her.
Kurt Elster: Oh, she’ll be thrilled that she’s an acronym.
Scott Cunningham: Yeah. You bet.
Kurt Elster: All right, so we got number five in your five-step formula.
Scott Cunningham: Right. So, if you remember the name of this formula, we call it the full offer stack. It’s like the five-ingredient offer stack, full offer stack, whatever you want to call it, but what we’re trying to do is stack so much perceived value that when it comes to making the decision, it’s a no brainer, right? Because they’re like, “Ooh, you got my attention. I get how it works. I love the company. People are saying amazing things.” The last question is, “Is my perceived value of this product in the moment greater than the price?”
So, this one is a pricing question. Is the perceived value high enough that it’s a no brainer to buy? But what we ultimately need is them to commit, so we don’t want to leave it to chance. So, to really tip the scale in our favor we’re gonna include offers, and this is what we call transactional attributes. This is the last ingredient. And with offers, I don’t mean just discounts. A discount is a type of offer but it’s not the only type of offer, and I’ve taught this formula to so many people and a lot of people are like, “Scott, but I never discount, and I would never do that.” And I’m like, “Good, good. I’m not telling you to just discount your products away.”
But with offers, we could do things like discounts. We could do welcome offers. We could do 10% off your first purchase. We could do free gift with purchase. Or we could do some cool things, like my favorite kind of offers are ones that increase the AOV, so the average order value. Things like bundles, tiered bundles, like buy two, get a third.
Kurt Elster: Tiered bundles. One of my favorites.
Scott Cunningham: Yeah. All right. Love tiered bundles where it’s like buy two, get a third for 50% off, or buy two, get a third for free, right? Threshold rewards. Spend $150, unlock a free gift.
Kurt Elster: Tiered free gift with purchase is what I call threshold rewards. Yeah. And the first thing I thought of, Chubbies. Chubbies Shorts. It would be like, “Look, no matter what you’re getting this cocktail umbrella.” And it’s like, “Well, spend $50, you’re gonna get these sunglasses. Spend $100, you’re gonna get this belt.” Well, so it’s like-
Scott Cunningham: Love it.
Kurt Elster: That introduces… For them, it’s like a shirt’s like 60 bucks, and so that introduces may as well pricing. Like you want that threshold to be-
Scott Cunningham: May as well. Oh, man. That’s great.
Kurt Elster: 10, 15% past where we expect some of these typical carts to be, and then may as well pricing. It’s like, “Well, if I just add that second thing I get the free thing.” And free shipping is one of these things that you want to price in like that.
Scott Cunningham: Yeah. Free shipping too. And it’s like gamification, right? I love gamifying the shopping experience. Because it’s fun and customers feel like they’re winning when they continue to unlock these rewards. And it’s like yeah, sure, you’re winning. We’re all winning, right? But I love that may as well. I may as well add it on this thing. I’m like it’s gamified experience, right?
Kurt Elster: For me, anyway, when we’re shopping we both know what’s going on, and yet I appreciate that you are making the case, you’re putting in the effort, and you’re making it easier for me to part with my money. For me, it’s a painful experience, right? And so, that… It’s gonna make it that much easier to spend. And what I love about especially some of these tiered discounts that try and increase average order value by adding free gifts, or unlocking discounts at higher levels, it makes the value go both ways, right? I’m getting something in return. The merchant is giving something up in exchange for me making this purchase, for me, especially as a new, first-time customer to make this. Because I’m taking a leap of faith here.
Scott Cunningham: Totally. Yeah. And you’re right, another way of saying this is like buy more, save more, right? So, I’m happy that you save more if you buy more because acquisition costs are going up. I need my AOV to go up to offset those acquisition costs, right? And then with the customer, totally. They’re saving more when they buy more and they’re just unlocking more goodness.
Kurt Elster: Okay, so we’ve got our five steps here. Hook, our functional attributes, our brand attributes, we’re gonna tell the story of our brand and what our values are to see if they like us. Oh, I hope they like us. Check yes or no if you want to go out with me. And we need our third-party endorsements or social proof, which can include industry stuff, anything that’s just not us tooting our own horn, and then fifth, our price, our proposition, which ideally is we’re not straight discounting but we’re trying to increase average order value. We are making some kind of offer beyond just will you buy, yes or no.
Scott Cunningham: It could even be just to take away the risk, like moneyback guarantee, 30-day exchange, right? It could be scarcity and urgency, limited time, limited quantity, limited supply. It could be even just pricing justification, like Thursday Boot Company. Right on every product page, honest pricing. It’s like, “Hey, our competitors will sell this same kind of product at retail for like 600 bucks. We sell it for 200 because we’re operationally efficient but we never discount. It’s always this price.”
So, just to recap some more ideas about the transactional attributes at the end there, but you got it. That’s the five-part formula. And a good way to remember this, so it’s your hook plus your four value attributes, and to remember the four value attributes we have a good acronym. It’s TBIF. Thank Buddha It’s Friday. Transactional, brand, influence, and function.
Kurt Elster: I like that. That’s good. All right, we’re coming to the end of our time together. Let’s do some rapid fire questions here.
Scott Cunningham: Sounds great.
Kurt Elster: Because you do a ton with email, and we didn’t really touch on email. One of the things I wonder about, and I get asked about is what’s the balance between promotional and non-promotional campaigns or content within an email? So, it’s like here is content email that’s not selling you anything. Here is back in stock, 50% off, new product launch. Is there a rule of thumb you use for balancing this ratio here or am I overthinking it?
Scott Cunningham: No, so this is a massive takeaway right now that a lot of people overlook. This five-part formula that I just introduced you to, this offer stack formula, you and I opened the conversation saying it’s important to maximize customer lifetime value, right? So, we just need to think. I always use the five-part formula. I use it for everything. I use it for homepages, landing pages, product pages, collection pages, ads of course, but I also use it for email, right?
And the key is you still want to use hooks. You still want to. When we’re speaking to a cold audience, they’ve never heard about us before, so we’re just trying to serve a qualifier that we can help them. But later on, we can still use other hooks based on where they’re at with their journey with you. For example, I just bought some luggage from Monos. Monos, they’re a luggage company. I was fascinated by all their marketing, worked well on me, and there was a good hook at the beginning that was like something about… They actually had a statement that was like the Apple of suitcases, so that was a qualifier. I like Apple and I like innovation, so I was like, “I gotta go check this out.”
And then I bought, and then before I even got the luggage there was an email that’s like tips for traveling with our luggage and how to take care of it, right? And then there was another hook once I bought it that was like, “Are you having issues packing still?” And they’re just asking me these qualifying, and they’re like, “We have these compression packs.” So, they’re like… I think it’s important to not… We want to think about the avatar, and we want to sell them their first product, but let’s think about the second problem that we can solve for them, right?
So, I think when it comes to… I hope this is a longwinded answer to your question. When we write emails, I want to use that same offer stack formula and I want to think about adding value, and we do that by showing the customer we understand them with our hooks.
Kurt Elster: And so, I bought the luggage because it fancy, and then once it arrives I discover, “Well, I still am just stuffing all my clothes loosely into it the same way I always did along with my shampoo,” and then… So, an email shows up and is like, “Hey, dummy. You having problems packing? Check out compression sack and packing cubes.” Which, if you’ve not attempted this, forget the fancy… Get yourself just whatever Samsonite and then the packing cubes and the compression. Oh, now you’re a pro. Totally get the value in it. You’re right.
Your approach, the five-step formula, Thank Buddha It’s Friday, was laid out as like, “Well, this is for Facebook ads.” But the reality is it’s gonna work for any kind of advertising, right? Any pitch.
Scott Cunningham: We use it for everything. I actually had somebody that I’ve mentored on this come to me and be like, “Scott, that exercise,” she’s like, “You just created my whole social media calendar.” Because there’s all these little topics that we could touch on. And I think as long as you brainstorm the hook plus the TBIF value attributes, you got a plethora of content to work with and you could use it in email. And I think to answer your question, we do want to add a lot of value in our emails. It’s kind of like the good old Gary Vee. Jab, jab, jab, right hook. We’re not just gonna shove the discounts down people’s throat all the time. We want to include brand attributes. We want to talk about how meticulous we are with the products we source. And we want to just look at all those attributes and tell stories about each of them, right?
So, I think that if you get that five-part formula down, you could use it for email too.
Kurt Elster: So, you’ve got a lot of content out there. You’ve got courses, training materials. Plug something. What do we want to sell? Give me a call to action here for people. Or do you have a special offer for us? Ooh, we love special offers.
Scott Cunningham: We could do something cool. We could do an offer. But I think if you’re listening to this and you’ve kind of been struggling to get past your current level of sales, we do have a mentorship system. It’s like four levels that we go through. We have been kicking some butt. You’re right. We were the top selling course on Thinkific last year in the eCommerce category. Fourth overall. And the reason is people are getting results. I just had to plug that little influence attribute there.
Kurt Elster: I see what you did there, buddy.
Scott Cunningham: Right? So, I get in the habit of using these five ingredients all the time, but hey, honestly, if anybody’s struggling, just go check out our website. I don’t have a strong pitch, just merchantmastery.io. If you’re looking for help, you can come find us there and see what we could do. And if you’re like, “Hey, I heard about this through Kurt Elster’s podcast,” I’m gonna do something cool. I don’t even know what yet, but I will do something special.
Kurt Elster: I love it. I’ll take it. Scott, thank you so much. I just love the practical, non-technical approach to this. It’s like, “Oh, what are your tools?” A pen and paper, man. Just start brainstorming, right? I don’t have to subscribe to anything. I don’t have to buy something. I don’t need to go anywhere. A pen and paper and you could sit down and start working through this. And that’s freeing and helpful. This has been fabulous. Scott, thank you so much.
Scott Cunningham: Yeah. Thanks so much, Kurt. And I think that’s the key. If you can get this offer stack right, everything else gets easier. Ads get easier, email gets easier, so I appreciate Kurt so… I actually learned a lot from you. I was taking notes here too, so thanks so much for having me here today.
Sound Board:
Kurt Elster: Oh, I need different applause. That crowd is too rowdy. Knock it off.