Get Your Head Out Of Your ROAs & Start Asking The Right Questions w/ Andrew Faris Founder of AJF Growth

Let's talk about how to ACTUALLY grow your business... Understanding the in's and out's of your business is everything when it comes scaling the right way...

In this episode Mark and Trevor interview Andrew Faris, Founder of AJF Growth. Andrew walks us through the proper questions you need to ask about your business before you can answer questions like, "what is a healthy ROAs?". 

We talk about unit economics, contribution margin, product market fit, what your personal goals are, new customer acquisition and more...

If you want to truly understand what it takes to scale your business the right way. Then this episode is for you.

Please connect with Trevor on social media. You can find him anywhere @thetrevorcrump

Episode Transcript

Trevor (00:00):
This episode of The Unstoppable Marketer Podcast is

(00:02):
sponsored by Besty, the numberone customer survey platform for
E commerce and direct toconsumer businesses. Mark. I
remember when I was a CMO, nomatter what we did our
attribution that never seemed tobe right and getting feedback
around why our customers werepurchasing our products was much
easier said than done. Focusgroups were way too time
consuming and survey tools weretoo complicated, limited and way

(00:26):
too expensive.

Mark (00:27):
That is a pain point that every ecommerce brand or
marketer or owner is wellacquainted with. And that is why
Besty was created. So itsimplifies customer insights by
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(00:50):
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creative, and that allowed themto finally change their strategy
and confidently scale to theirfirst seven figure month,
followed by eight more.

Trevor (01:08):
Geez, I like that. Well, I guess that's why hundreds of
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and search bestie downloadbestie today yo what's going on

(01:31):
everybody welcome to theunstoppable Marketer Podcast
with me as always is my co hostMark goldheart Mark what's going
on my man?

Mark (01:38):
Oh, it just live in life and dealing with sick kids sick
dogs, you name it. Last week hasbeen eventful to say the least
at my house but but the summer'shere so we're good.

Trevor (01:51):
You had a gnarly when we wouldn't be in you and I chatted
on the phone the other day andyou were telling me about what
you'd experienced you might haveto let the listeners know here
in a second after we introduceour guests but that was you had
a pooping incident with your dogsomeone else's dog you've are
watching right?

Mark (02:10):
Yeah, we almost killed my parents dogs. So that's always
fun. Always your parents, myparents.

Trevor (02:15):
So you found out it was something you did?

Mark (02:17):
Well, technically, it's something they did. They gave us
food. It seems like that foodwas contaminated or something
but yeah, not you know, TMI,there was it was messy. There
was blood. It was it was adisaster scene, but the dogs
alive. I don't have to tell myparents I killed their dog. So
all as well.

Trevor (02:38):
All as well. Well, perfect. We'll do. We'll segue
that into our I don't know howwe segue that into our into our
guests. But let's let'sintroduce our guests. I'm really
excited about this. This hasbeen a podcast a long time
coming. We actually tried torecord this podcast, what was it
last week or a week or so agoand we had so many weird

(03:01):
technical issues that it justcouldn't go through. And so I'm
excited that this one's goingthrough everything seems to be
recording just fine. But I wantto introduce our guests His name
is Andrew Ferris Andrew Ferrisis the founder of AJ F growth,
which is a d to c e commercegrowth marketing consulting

(03:22):
agency, former CEO a four by 400former VP of growth over at
common thread collective AndrewFaris what's going on my friend,

Andrew (03:30):
driver. Mark, thanks for having me guys. Appreciate it
glad that we got all thetechnical issues worked out. And
I was just trying to sit quietlywhile Mark talked about.

Trevor (03:40):
Yeah, it was kind of a nightmare trying to get on last
week. We don't know what wasgoing on. But I'm really
excited. No worries.

Andrew (03:46):
I got a lot of experiences like an amateur
sound guy with stuff actually.
And some funny place. Yeah. Andso I have walked down this road
a lot of times, and I completelyunderstand. So it's no big deal.

Trevor (03:56):
Yeah, love that dude.
Love that. Well, Andrew. Sonormally, what we typically do
when we get a guest on is we tryto figure out what what was the
origin story of how we gotconnected because this, we've
never really met in personbefore. And neither of us all
three of us haven't really metyou. So you're based out in
California, Southern Californiaarea, we're based out of Salt

(04:18):
Lake City. Essentially, I thinkwe got we got to know you
through Cody WITTEK over atkinship. So Cody is a good
friend of ours. We've had Codyon the podcast before. For those
of you listeners who didn't golisten to that. That was an
episode where all we literallytalked about was influencer
marketing, which is such an epicepisode. But yeah, Cody and I
were just jamming one of thesedays, we had an event together

(04:42):
in Vegas. And he was kind ofsaying, hey, who Who should I
have on my podcast? He wasasking me is there anybody you
think I should have my podcast?
I was like, oh, you should haveso and so. You know back and
forth. Like what about whatabout me who should have he's
like, the very first person hetold me he's like, you gotta get
my buddy Andrew Ferris On yourpodcast, he's just an absolute

(05:03):
legend when it comes toeverything e commerce and direct
consumer growth, he knowseverything about it. And he'd
been an incredible guest. AndMark and I love talking about
ecom growth. So we figured thatthis is going to be a perfect a
perfect episode. So while it'svery,

Andrew (05:20):
very kind of very kind of Cody to say that and he is,
he is the best. I love Cody.
Yeah, I'm really glad to bedoing it, guys. I'm really glad
to be with you. And and yeah,this is exactly the conversation
stuff that I want to talk about.

Trevor (05:34):
I love it. Well, let's get into it. Man, let's let's
search. Just tell us a littlebit about you. What are you up
to right now? What brought youto the point that you are at
today? And then what's going tohappen just for all the guests,
right? We're a couple minutesinto the podcast. This is going
to be like I'm just going totell you right now I can already
tell you this is going to be ameaty episode, and we're going
to talk we're gonna talk a lotabout how to scale your business

(05:57):
I can I can already see itbecause the three of us that's
what we do is we scale ecommerce businesses. We have a
lot of experience doing that.
And so get your notepads out.
I'm excited for this. So yeah,let's get a little history on
you, brother.

Andrew (06:11):
Yeah, man. So I have been an E commerce for about
eight years maybe maybe and ahalf something like that.
Started off on the brand side atkalo. Kind of the first big
silicone wedding ring companyactually, Cody and I worked
together for crossover a littlebit there. And I was a media
buyer there. And theneventually, like, was sort of I
was actually doing all kinds ofmedia buying started with

(06:33):
digital stuff, but then was likebuying print ads and stuff like
that to which were generallydon't do that, at least at
least, at least at least at thattime for that brand. They were
Yeah. But that was a wild ridethat was zero to 20 million in a
year and a half was no funding.
It was just like, put up apicture of a ring on the
internet and people click andthey buy it and you get four to
one on your money. It was crazy.

(06:54):
So so went from there withTaylor Holliday, who his brother
had founded kalo. He was on thecap table at kalo and it traded
services for equity while he wasbuilding his ad agency comm
thread collective. As Taylor'sagency started to grow he went
over to kind of run the agencyfull time out of instead of out
of being essentially a VP ofMarketing at kalo and I went

(07:16):
with him pretty soon after sortof became the first ad
strategist they're working withother clients turned out it
wasn't that easy for otherclients actually, that you
didn't just put up a picture ofthe product and then get four to
one on your money. That was aunique thing about kalo. And so
start working around a wholebunch of other brands and
clients that which is which wasreally fun eventually became the
head of strategy there. And thenCTC spun off its own brand

(07:39):
holding company aggregatorcalled four by 400, which I
first went over to lead growthout and then eventually ran that
company to MC success, I wouldsay we had some some really good
wins along the way some lossesalong the way. And now for my
400 has contracted basically tobeing one brand, which is bamboo
Earth skincare brand, which justwas by far an outsize
opportunity relative to theothers kind of ditch the

(08:00):
aggregator thesis. And I leftthe end of 2021 in the beginning
of last year 2022 I wasn'tactually sure if I was gonna go
back to CTC I had a fewdifferent things I'm super still
actually a partner over there.
And that's the kind of holdingcompany of CDC and great
relationships there as well. Sothere's, there's no, there's
nothing relationally challengingthere. But wasn't sure what I

(08:21):
was going to do looked at acouple of brands and going in
house somewhere. And and sort ofa couple of a couple of clients,
it sort of fell in my lap. Andso I started consulting on my
own and loved it. Just like I'vereally enjoyed doing that. And
now I'm at a point where AGFgrowth is my own consultancy,
you call it an agency but that'sactually like too big of a word.
It's basically just me and thenI have a just brought on

(08:44):
somebody to bring to do creativestrategy help with me, even that
is just part time. So it'sreally me getting kind of in the
weeds with some brands workingin the sweet spot really doing
sort of managed services, metaads, being the first growth
lever that I'm going to workwith brands on is where I'm
strongest. But but reallythinking broader than that about
growth strategy and ecommercewhat like I call like p&l

(09:07):
design, like, what is your p&lgonna look like if you grow your
business effectively relative toyour goals? So if you want to
grow up with the million dollarbusiness in the next three
years, what does your p&l haveto look like for you to get
there? And then how do we designyour customer acquisition
strategy to meet that? Sothat's, that's the short ish,
medium ish version. I think itmight have been a little long

(09:27):
winded but the shortest versionof of where I'm at and what I'm
doing.

Mark (09:32):
That's amazing. Well, I have a question right. Going
back to my intro and messysituations. I think a lot of E
commerce is in a messy situationright now. I think across the
board on Twitter, it sounds likethere's some three PL companies
reporting 20% 30% year overyear, decrease in volume being

(09:53):
shipped out of their theirwarehouses. So it sounds like we
are seeing a contraction in themark. It somewhat just, I mean,
relative, I mean, the growthtrends still going up, right?
It's just, there's a big boom,because the 2020 COVID. And now
we're kind of seeing some ofthat. Come back. So you said,
you said you're going into thisrole as a consultant trying to

(10:14):
help people figure out their p&lis Do you Do you see that being
more of a role for agencies? Andyou also, do you see agencies
contracting into more of likeconsultants going forward now
that people have to actuallyworry about, oh, it's not so
easy. You can't just throw an adup and get four to one anymore?
Right. Like, that's just nothappening for anyone?

Andrew (10:37):
Yeah, there's a lot there. I, I would say that there
are a couple of layers of greatgrowth, thinking in E commerce
right now. One of them is likethe skill of Facebook ads and
media buying, which has changeda lot. And I would I would
include in that creativestrategy, and, and sort of like

(10:58):
some combination of I wouldthink about a sort of an in
platform skill. How do you usethe platform? If you're thinking
of an agency and media buying,how do you use the platform?
This could be true with Googleads, it could be true with with
tick tock, it could be true itreally in any platform, but how
do you sort of know the ins andouts technically of the platform
to to maximize itseffectiveness? And then from a

(11:19):
creative perspective, or, youknow, a keyword perspective as
the case may be? How do you alsolike design your ads to maximize
that platform's efficiency?
That's one layer. And I thinkthat's a really important skill.
Some people are really greatthere. There's another layer up
from that, which is like thefinancial leadership, and I
caught up not necessarily interms of its

Mark (11:40):
hierarchy just upstream, right? Like the Yeah,

Andrew (11:44):
right, you just have to have this at a higher level of
the business thinking, thankyou, Mark. I'm not trying to be
condescending towards anyonewho's my point, the point is
just like you is that like, ifyou can actually think carefully
about financial management ofyour company, it really makes a
huge difference for them how yougo and be good in the technicals

(12:06):
of a platform. And, and, like,there's the simple example here
is like target setting, like howmuch should you spend on your
ads? How much does that? Well,that that question? You know,
the question that people alwaysask if you've been in an agency
is, well, what's a good row us?
And it's like that questionbelies that the person asking?
It is not thinking very wellabout the question in the first
place. Because a general good roass is impossible to guess. It

(12:29):
really depends what it dependson what are unit economics,
like, you know, where are youprofitable or not? Are you
trying to be profitable? Andfirst purchase? What's your
financing? What are your goalsfor your company, like, like, I
have two clients right? Now oneof them really wants to go and
create a massive outcome thatclient a client a wants to
create a massive outcome, highlydriven person can, you know,

(12:49):
really, really wants to go andnine wants to be a nine figure
brand or nine figure exit, youknow, or something like that,
and just create something huge.
Okay, so there's client a,client B is like, I want to grow
20% a year, you know, 10 to 20%,a year for five years end up
with a business that I feelreally proud of I love running,
definitely wants to grow,definitely wanna be profitable,

(13:11):
definitely want to besuccessful. But, but the
outcome, there is like 20 25million that they're aiming at.
So So what what's the robusttarget for those two clients?
Well, I mean, immediately, evenbefore you talk about unit
economics, LTV or anything else,you have to be thinking about,
what are you trying toaccomplish with this? And how
risky Are you willing to be?
Well, it depends how big are youtrying to be? And all those
kinds of things. So so thatgoals, ladders down to unit

(13:33):
economics ladder down to LTV,and by unit economics? Just
mean, are you profitable onfirst purchase, where and you
know, where's profit created inyour business? All those things?
And you can just think aboutthat right before now I do
before I ever press publish onan ad in meta ads, or whatever.
Those questions, ideally, areanswered first. So I do think

(13:54):
the best versions of agenciesright now are able to do all of
that. That's what I think Ithink the best agency, the best
possible agency, or internalgrowth leader for a team, right,
is able in some way to thinkabout all those things, how do
you maximize the effectivenessof the platform as its own
skill? How do you connect allthat stuff to your finances and
what you're trying to accomplishas a business? And then, and

(14:14):
then the elite of the elite cando both of those things
together?

Trevor (14:19):
Yeah, I completely agree. I mean, you've got well,
not only that, but just likemarketing agencies. They're such
a dime a dozen to right now. Andit is, it is relatively simple
to run, just run out for people.
It's scary, right? People whodon't know it, it is scary.

(14:40):
Hence, the reason why they willoftentimes hire an agency that
and usually the pricing is muchbetter than than hiring somebody
from an internal perspective.
But I think you're absolutelyright, you know, the average the
average, I think, I believe Iread that the average lifecycle
Have a client for an agency isbetween four and six months. And

(15:03):
it's for that reason exactly,which is, hey, you set some ads
up for me and you're running it,and you've got some creative and
some copy going. But I'm notseeing growth, I'm not seeing
much more of a value or abenefit. And so I think in order
for agencies to succeed, intoday's day and age, you have to
come at things a little bitdifferent and provide more value

(15:25):
from an over all consultingperspective, not just a, I'm
pressing buttons on the backend, and trying to make this
work as good as possible. I wasjust gonna say, you know, Mark,
and I also own a marketingagency. And we've seen the same
kind of thing where, you know,we've had some, we've, we've
worked with some clients wherethey said, Hey, I wrote us has

(15:45):
to be XYZ. And because of that,we were only spent, we could
only spend a certain amount ofmoney. Whereas the moment we
dove deeper into their uniteconomics, and said, hey, guess
what, if you triple your spend,and you're able to take a hit
here, you've got the potentialto grow really rapidly here, and
then start to make it up on theback end with your lifetime

(16:08):
value on your returning customerand your retention strategy over
here. And brands that weremaking few hundreds of 1000s of
dollars a month are now makingmillions of dollars a month
because we introduced biggerunit economic chatter, rather
than simple. Hey, what do youwant your requests to be? And

(16:28):
we'll keep it there.

Mark (16:31):
And what I love about this conversation is what you said,
Andrew, is it's not, it doesn'thave to do with necessarily an
agency. It's also the internalgrowth leaders and a lot of
internal growth leaders are setup for failure because
businesses don't answer thosequestions first. So they hire
growth leader and say, Hey, Ijust want to grow, but they
don't really have a vision ofhow they want to grow their

(16:53):
company, or what they want theircompany to be. And so then those
internal growth leaders are alsoput up in a situation just to
fail, because they have no ideawhat they're supposed to aim
for. It's like, okay, am Iaiming for high row as low as
growth? Is it? You know, is itthe new customer acquisition? Is
it retention? You know, what isit exactly? And so, how would

(17:15):
you say a company? I mean, youwent over a little bit, but if
you are a company right now, ifyou're an econ business, how are
you approaching this vision? Isit strictly set by what the
owner wants? Or does a companyalso have to kind of look at
where they sit in the sea? Andunderstand what kind of fish
they are? Like, Hey, do youactually have product market

(17:38):
fit? You go to that kaloexample? Am I a good marketer?
Or did this just have productmarket fit? Right? Am I a good
marketer? Are we were we livingin a 0%? Interest? timeframe?
Like there's there's certainquestions like that, that we
have to ask ourselves asmarketers? So as a business? How
do you approach that, like, howdo you help businesses approach?
What is the actual vision? Andwhat is an attainable goal for

(17:59):
you?

Andrew (18:01):
Yeah, so I love this question, actually, because this
gets to something that is whatit says, I kind of can't answer
that question. It's, it soundsreally simple to say to
somebody, what are you trying tobuild? Just answer the question.
The truth is, most people don'tknow the answer to that
question. And they don't knowthe answer to that question.
Because it's actually not abusiness question. It's a human

(18:21):
question. It's about what youwant in life. And, and so for
example, I talked to a client atone point who had an offer for
their business, and they said,they shopped the offer to me and
just said, like, what do youthink you've seen a lot of
instances this a good offer?
Should I take it essentially?
And my answer was, it is a goodoffer objectively, but there's

(18:43):
absolutely no way for me whetherto tell you whether or not you
want to take it, or whether ornot you should take it because
it depends on what you're tryingto do. At some point, I can tell
you if the multiple on yourvaluation is good, I can tell
you that with some objectivity,actually, like I know the answer
to that question. But thequestion I can't answer for you
is, are you going to be set youwent and started this business?
This is your blood, sweat andtears? Is this is this the is

(19:03):
this a big enough outcome foryou to be like, satisfied with
it? And in this case, actually,it was a good offer? And the
answer was no, it wasn't a bigenough outcome. This was
actually my client, a Ireferenced earlier who said,
like, No, I want to buildsomething really, really good
again. So that was that. So now,the interesting thing to me
about this, is that after isthat when somebody tries to

(19:24):
answer that question, if theyactually don't have clarity to
what they're trying to build,they almost everybody does the
same thing, which is they justdecide to want something bigger,
they default to more money. Theysay like, I want more money,
because it's sort of a tangiblegoal, you can always chase and
if they don't have a sense ofwhat they're trying to
accomplish in their life, thenthen it just always sounds good

(19:44):
to have more money, you know,so. So that's kind of what they
do. And I think there's a lot ofquestions people should ask
about whether or not that'ssomething they want. There is
one of them you got that mark,which is like is the business
that we're talking about hereactually able to generate the
kind of outcome that you We'retalking about, for example,
like, is the ceiling on thisbusiness? A nine figure
business? Or is there actuallynot enough? Like, total

(20:07):
addressable market? And if not,what do you do about that? Like,
is this position businesspositioned? Well, to grow that
much? But there's also anotherquestion for me, which is like,
well, what is the source of joyin life? And that gets to the
deepest values that a human has,I think, and, and how you spend
your working life and your thelimited time that you have as a

(20:28):
human alive in the world? Andwhat are you trying to
accomplish? Yeah, I can't answerthat. For somebody, though.
Though, I hope also to developfriendships and relationships
with my clients in ways that Ican become a sounding board for
even those kinds of questions.
So, so yeah, so it just depends.
So I will try to objectivelytell them, here's what I think
is possible. Like, for example,another another thing on this

(20:48):
is, you know, for this client aI was talking about who wants to
build something pretty big. Oneof the things like they said to
me, Do you Do you actually thinkthis has nine figure upside, or
whatever. And I said, I'm notsure because I'm not sure if
your LTV is strong enough yet,because you're just never going
to be able to build that big ofa business. Well, not never,

(21:09):
it's really, really hard. I canthink of a couple counter
examples to this, actually, it'sreally, really hard to build a
very large business that doesn'thave meaningful returning
customer revenue in E commerce,it's just really, really, really
hard to do that. That means ifyou don't do that, if you're
making almost all your money onfirst purchase, then you have to
be in like, I mean, the 99thpercentile quality digital

(21:34):
marketer, and many peopleprobably think they're that
good, but they're just not. AndI'm not for the record, like I'm
not that good. The example Ialways say here is the rich
guys, the rich white guys likethey are clearly that they are
the 99th percentile digitalmarketers where they have
figured out how to do customeracquisition at massive scale. So
even though you only need onewallet ever, and that's the bulk
of their sales, they have builta nine figure giant business

(21:56):
that Shawn Frank said to me, theother day was going to do mid
100, millions this year, youknow, I think he's been pretty
public about that, and veryprofitably. And that's not with
very much returning customerrevenue, all told, it's
basically built off of off ofthe fact that they can just
they're so good at acquiringcustomers at scale, and continue
to generate word of mouth andall those kinds of things. So.
So that's what I said, I lookedat that I looked at the LTV

(22:17):
piece with this particularperson and said, like, Okay, you
want to build $100 millionbusiness, you probably need some
measure of LTV, or some a hugeamount of channel expansion or
something that's going to that'sgoing to put you there. And if
those things are not on thetable for you, then you probably
don't have that big of abusiness.

Trevor (22:33):
Totally. Yeah, I think the other the other thing that
you can also, I like what you'resaying about like, Hey, you got
to be in the top 99%. The otherthing is not only do you have to
be in the top 99%. But you alsohave to have a product that is
that is customers are fallinginto that total addressable

(22:56):
market to constantly does that.
Does that make sense? So likethat's, that's the other thing
about their ear. Yes, the ridgeWallet team is absolutely
fantastic at what they do. Butthey also have a product that
just like, everybody needs awallet. And when somebody hits a
certain age or whatever, right,it's, that's always growing like
the growth and need for that isconstant to your

Andrew (23:20):
point, Trevor. The other example I was thinking of, and I
thought of that is is simplemodern, which is a business that
I've worked with worked withlast year, they were a client of
mine, and saw their DTC businessand their omni channel, massive
Amazon in their 100 millionAmazon alone. They're just
incredible. Actually, I did aincredible interview with their
chief ecommerce Officer BrianPorter, about how they got to
100 million on Amazon that'slike, like, go listen to that on

(23:41):
my podcast. It's so good. It'she's so smart. So there is that
it's like, again, that samething, like elite of the elite
market are on that team. Butit's exactly just that total
addressable market, everybodyneeds a water bottle. And if you
can find the right way to like,get water bottles in the hands
of everybody who needs one, likeliterally other slot three and
for the 4 million Americans. Andthat's I think they probably are
international to like, all ofthem, like even down to my three

(24:04):
year old, you know, like, hashas a water bottle and in fact,
he has a simple modern waterbottle. So yeah, it's exactly
that massive, massive totaladdressable market is another
way to do it.

Mark (24:13):
Yeah. It's also a unique value prop. I think with Ridge,
they have a huge totaladdressable market, like you
mentioned. And again, this isn'ttaking any away from them. I
think it's more credit to themfor developing something that's
unique. It's a very unique valueprop for a wallet. So there's
Well, I mean, everybody has awallet. That's true, but most

(24:34):
wallets are the same. Or regcame out with the first unique
iteration of a wallet since howlong did I have no idea a long
time, right? I mean, maybe youhad like some variations like a
thread wallet or something likethat. And maybe that's a similar
vein. But with Ridge, theydevelop something that was
unique, and so they have a hugetotal addressable market. They

(24:55):
have a very unique value propand an excellent marketing team,
like you said, Right, so notonly do they are they killing it
on each are on the marketingside, they have a unique value
prop for their total addressablemarket, which if you add all
those things together, they'regonna grow over time, and it's
just gonna happen. And so theyhave the potential of being in

(25:16):
that nine figure, type brand,maybe even a billion dollar
brand. I know, that's what ShawnFrank is aiming for. So the real
question is, you get down tothese most companies, right?
They're not in that situationright now. Right? Most, most
companies are in a situationwhere they're, they're kind of
trying to figure this out,they're trying to understand
where they sit, we've workedwith clients that just had to

(25:39):
accept that, like you said, Hey,if you don't have a returning
customer rate over 15%, like,you're just gonna be in this
kind of little over seven figuretype brand. Like, that's just
what you're going to be unlessyou alter it. So in your in your
consultancy, do you help peopleunderstand and then move towards

(26:01):
how do I increase my LTV withnew products? or new lines? And
how do you go through thatthought process with them?

Andrew (26:11):
Yeah, so it starts for me with identifying that
question, which is like, do youactually have good LTV? And the
first question a lot of you Imean, I appreciate the way you
asked that question, Mark.
Because the first question a lotof people ask when that when
they don't have enough LTV islike what more emails do I need
to send to generate more LTV?
It's like sort of retentiontactics. And that stuff can be
super useful. To help on themargins like good retention

(26:35):
marketing matters, a good emailprogram matters for sure. But
that is a is not the the maindriver of LTV, the main driver
of LTV is your product. And it'speople's experience with your
product. The only tactic that Ithink seems to me to be able to
produce a meaningful increase inLTV, relative to the product
being static, basically, issubscription, if you can be

(26:58):
great at generating a meaningfulamount of subscription revenue,
that is how you can potentiallyreally jumpstart your LTV. So
that's that's that's part of itfor me is is to think through
that issue. But it starts withidentifying the number and many,

(27:19):
many people, many, manyentrepreneurs that I see, don't
actually know what their LTV ison their products. And they
especially don't know what it islike by product. So if you have
any meaningful difference inyour SKU set, like apparel is
actually the probably the bestexample of this where like a
customer who buys leggings fromyou, and a customer who buys a
shirt from you very likely havedifferent long term

(27:40):
relationships to your brand,because they've had very
different product experienceswith their brand. But based on
sort of the buying cycle of thatproduct, sort of how promiscuous
customers are in that category,right? Maybe you don't want all
your shirts from one company.
But you do want all yourleggings from one company.
Because once you find the rightfit leggings, it really matters
to get the right fit over andover and you say you're really
loyal, there were the shirts,it's like fun to have a lot of
shirts, you know, I don't know.

(28:01):
I don't know if that's true.
That's just like a hypothetical,right. And, and so being able to
begin to break that down. Andone of the ways that you
increase your LTV is that youfind your best LTV products, if
you have any meaningful mix, andthen actually generate more new
customers against that productspecifically. So this this is
another place where like thefinance affects your ad strategy
before you can create awesomecreative, you have to be
generating that creative againstthe right product, which is a

(28:25):
question of unit economics likemargin on that product plus LTV.
And if you're listening this andyou want to know where to start
with that my my answers is justgo get lifetime ln I'm not paid
by lifetime li at all. But youcould get a free trial on it.
And there's like a middle tier,that's like 49 bucks a month.
And you'll get really goodclarity to your LTV. You can
sort it up by product and justgo play with it just go play

(28:45):
with their cohort thing for awhile and see what you can kind
of uncover there. But But yeah,that's that's a that's ends up
being I do that now, as far asdeveloping new products.
Additionally, like you askedthat Mark, I'm not a good
product guy. But I willdefinitely have that
conversation with brands to say,Hey, we should be thinking about
if there's a way with productdevelopment to generate
increased LTV, what are we doingthere? And actually, this gets

(29:06):
into something I was talkingabout actually, just in the last
few days that I think is is likethis question of like how does a
brand grow past meta ads,especially if they're willing to
tap their meta ads performanceand they're sort of doing an
awesome job there, which iswhich is you know, for a lot of
econ brands where they are,they're putting a lot of time
and energy into that. Thetemptation for a lot of brand
owners at that point is to startlooking at other ad channels. So

(29:28):
they go in, they're like okay, Igotta get on Tik Tok, or go to
YouTube or whatever. I amstarting to believe that until
you're at like 50 million plus,if you have a good Google
categorical search and shoppingsetup, and you've got meta ads
going, you probably don't needmuch else. And if you are
tapping your meta ads volume inthat moment, my recommendation

(29:49):
for most of those owners wouldbe instead of spending your time
trying to beat down the door ofother ad channels which are
going to be less efficient. Sofar as I can tell, it's really
rare. I've I've actually seenthose channels X to produce
meaningful value for customers,relative to meta, like normally,
the next best dollar you canspend is still on meta.

Mark (30:07):
But Pinterest has, I would say buys on it.

Andrew (30:12):
I would say redirect that time and effort into really
thinking about how do youprovide more value to your
customer with your with yourproducts and memberships. And
anything you can do to do that,so that you can actually just
grow your meta spend, not by anew piece of creative but by
like generating new productsthat you can run creative
against, or that help your LTVor something like that. Kill

(30:33):
yourself on in your business tocreate more value for your
customers and your products. Ifyou do that your medicine will
grow. And you can actually keepkeep pushing on that channel.
Again, up until that sort of 50million plus level.

Mark (30:43):
Yeah, just for our listeners, the Pinterest comment
is a joke because Pinterest isnotorious for being useless with
performance marketing, souseless. Does not matter what
industry

Trevor (30:53):
shiny though, sometimes it's so shiny.

Andrew (30:56):
I've seen some apparel or not apparel, furniture brands
actually, like straight upselling furniture have not a
large spend there, but like adecent spend there. But that's
pretty much it. It's prettyrough otherwise,

Trevor (31:08):
I love where the conversation has gone. Because I
think that I think a lot ofpeople that I've talked to, and
a lot of stuff that I've seen,you know, they don't oftentimes
break their product categoriesinto acquisition products versus
retention products, you know,and so it's I love the point you

(31:30):
brought up that it's superimportant for you as a business.
And there's really easy ways foryou to figure this out. A really
simple way is to just go intoShopify, and look at what your
best sellers are, right? And youcan break that down by first
time customer as well. You know,there's other products, like you
said, like timely, that can thatcan break those things down into

(31:51):
cohorts and actually tell youwhat a lifetime value is based
off of a specific product, etc,etc. But I think a really great
point for people to start outwith what you're saying, Andrew
is just understanding what thoseproducts are that drive a first
time customer purchase, andstart to lead with those, you
know, and then what you'resaying here is, you know, if you
want to continue to grow, and ifyou have not hit that $50

(32:14):
million mark, rather than jumpinto the Pinterest of the world
and the tiktoks of the world,you know, expand those
acquisition products, try tocontinue to expand those
products. Yes, you've got towork on your retention stuff as
well, because you need to buildthat lifetime value and get
those customers to continue tocome back. You know, but start

(32:36):
building out bigger productsthat people want to buy the
first time to increase thattotal addressable market on the
acquisition side of things. So Ilove that.

Mark (32:44):
Yep. If I can add another layer to that is everyone likes
to talk about the 8020 rule,right? The Pareto principle, and
it's totally applicable in thisrealm, when you look at your
products, you will startfiguring out that 80% Not just
revenue, but profit, right?
comes from a cohort of peoplethat buy a specific product. We

(33:06):
see that over and over and overagain. I mean, it's always in
play, it's always in this like70 to 85% of your company's
profit comes from a cohort ofpeople that are buying a
specific product. And if you canyou understand those unit
economics, like you were talkingabout Andrew as a company, that
is where you can startsucceeding, because guess what,

(33:28):
you're losing money on a ton ofcustomer acquisition, and you
don't even know it. And that'sthe other problem is people
don't understand that. Not allcustomers are equal. Like just
getting a customer isn't alwaysimportant, right? You might be
losing money on customers. Andpeople don't even understand or
grasp that even though you'reselling to certain people and
you think that's great, youactually really might just be

(33:51):
losing money on that. And Iliked that term, you said they
might be promiscuous customers,right, they come in, they just
want a t shirt, and then they'regone. So you got to either
figure out, is it worth evenadvertising to those kinds of
people? Right? Or how do youactually get them into your fold
and convert them into yourbrand? And then I wanted to ask
you when when you're looking atthese things, how do you

(34:14):
approach converting people intoa brand? I know you talked about
growth levers? Do you get intothe retention levers at all of
hey, how do we get somebodythese promiscuous buyers? Let's
call them how do we get them tostart looking for other dates
and get more bought into thebrand?

Andrew (34:38):
Well, yeah, so again, I think you said something right,
which is first of all to bethinking about this on the front
end instead of just after theyconvert right which is like this
notion of like, like to use myexample from earlier, acquiring
customers on your higher LTVproduct implies that that
product experience is better andthat that's the reason why
they're going to stick with you.
So So it starts with kind ofwhat you were just getting out

(34:59):
remark, I think, which is likegoing in and getting the right
customer first. As opposed to,as opposed to thinking about
this sort of just broadly, thatthat's, I think, job number one.
I think as far as like, brandbuilding in that respect goes
and sort of tying people in. Ithink the, the main issue here

(35:21):
is having an incredible productexperience, first and foremost.
So it's not really a marketingtactic issue, there's stuff you
can do, again, here, I think,being smart about your
communication, in a way thatdeepens your relationship with
customers meaningfully is reallygoing to this depends a lot on

(35:42):
your category, like, again,like, you know, apparel is going
to be really highly about sortof, brand feel, once you get
past sort of providing productsthat people like the fit, and
the look of, and you know,materials, quality, all those
kinds of things. But like, likereal estate, I'm wearing a fresh
clean threads shirt right now.
And I wear a different threadshirt basically every day and

(36:03):
have for a long time because thefit is right for me. And that's
hard for me to find I'm tallskinny, dude. And so finding
this shirt that fits me right isgreat. So now I have 20 of them.
And, and that's just what I do.
And it's easy. And it's franklynot because I think the fresh
clean threads brand is somethingthat I like deeply resonate
with. Personally, I just likethe way it fits it like delivers
on the promise that that, thatand I think, you know, I think

(36:25):
there's some element of thatwith some brands, and then some
element, you know, if you thinkabout the sort of monster brands
in the world, and they're wherethey're spending giant amounts
of money to get you to have adeeper level of brand affinity.
A lot of those are sort ofapparel brands and that sort of
thing to if your problemsolution oriented in your in
your brand is really aboutsolving the problem, right? So
again, I think of a categoryhere like skincare, I've worked

(36:48):
on a skincare brand for 400. Andthere was some really awesome
brand work that was done by thefounder of that brand to
resonate deeply. Her vision forthe brand was in her words to be
a refuge for women. So shereally resisted a lot of the
over problems, solutionmessaging of that category, and
basically making it sound like,Hey, you're going to be an ugly,

(37:09):
disgusting person, if you don'tuse our stuff. It was like,
totally a different message thanthat and was really cool. That
said, if the product didn'tdeliver on the promise that it
was done, people would have gonesomewhere else they just would
have. And so that's what I wouldsay my answer is if you want to
generate real loyalty, thenumber one thing you can do is
work really hard to make sureyou deliver on your promise in a

(37:32):
way that meets and even exceedsthe customer's expectations. And
that you're in a category wherethere's actually a reason to buy
again. So again, another counterexample that would be that ridge
example where it's like, itdoesn't really matter how good
of a job they do. You don't needfor wallets, you know, so like,
so they have to actually developproducts that are going to, like
reinforce this and that aregoing to build into that brand.

(37:52):
But they're kind of scale, etc.
But, but yeah, for a consumablebrand, it's different. So but
yeah, I think that's probably myanswer is deliver on the
promise. And as much as you candeliver above and beyond,

Trevor (38:02):
I want to I want to break this down just a little
bit where you kind of you kindof explained it, but can you
just like, give me a littlesynopsis, you've used the word
product deliver on your product

Andrew (38:11):
experience?

Trevor (38:13):
Can you give me a list of like, what are the three ways
four ways commonly that somebodycan deliver on a product
experience?

Andrew (38:22):
Yeah, so I would start with thinking about I would
start with thinking about it'sreally depends on the category.
So again, Problem Solutioncategories. For those kinds of
products, it is just aboutsolving the problem that is like
overwhelmingly what it's about,right? If you're selling
deodorant, and the persondoesn't smell good after they
use it, and they stink. Like,there's your problem, you have

(38:45):
to solve that your deodorant hasto be better, right? Skincare is
the other example I just use forthat. I think it's a problem,
right? That's like solve theproblem. Yeah, there's from
Yeah, that's good. Okay, solet's take another one. I work
with a client called the wanderclub. Brand I love entrepreneur,

(39:06):
I love Kenny Ozama. Amazingdude. And they it's like tokens
that you? This is actually agreat example of your question,
I think. So Kenny had this ideaof basically, he's been to 50
countries in his life. And he'snoticed that he wanted to sort
of commemorate those things.
Think about the memories. Traveloften really is really important
to people and forms people inthese deep and significant ways

(39:28):
in their lives. And culturalexperiences do that. And so, so
Kenny created this keychain withthese little like tokens on the
keychain, and you there's atoken for each country you
visited and you can do the samething for landmarks that you've
been to baseball stadiums,people who like trying to go to
all 30 stadiums, you know,national parks, you know, that
kind of deal. So So, can youhave these tokens, so right now

(39:50):
the token has a washer, it'sjust like literally a washer
with an engraved laser engravedname of you know, the Grand
Canyon or whatever. Right, andit hangs from this kitchen wall.
So Kenny started doing somethings to the product. To take
this idea, if you think aboutthat it's not problem solution
at all. It's just, I think whatyou're selling there is you're
tapping into, if I have theexperience of traveling to a

(40:14):
country, it's a job that I lovedif I go to Japan, and it's just
like a joyful, amazingexperience in Japan, I then
leave Japan and I have thememory, but I don't have the
experience anymore. But in anyway possible. I want to tap back
into that experience, becausereminding myself and recovering
that is an act of joy in mylife, right? So I can re access
my joy. And so the token thatjust says Japan on it is a nice

(40:36):
start to that, and people havebought it and he's grown a
really cool business. But Kennystart thinking like, what if we
did some other thingsdifferently. So on his baseball
stadiums, one, he started makingthe keychain that holds it out
of an old baseball glove. And,and I think that's awesome,
right? That's, that's one way sothat every time I look at that,
and I think about my love forbaseball, it reminds me like,
Man, I love baseball. Ipersonally do love baseball. So

(40:57):
I relate to this deeply. And solike I can think about that
experience. And so upgradingfrom a keychain to a baseball
glove keychain, keychain, endsup delivering more on this
promise of I'm gonna help youtap into your joy basically,
right. And then the tokens noware changing from just an
engraved washer, to you know,he's getting MLB licenses, so
that it's like, every one of thetokens is gonna have the actual

(41:21):
logo on it to be a little nicerthan it was before national
parks, he got custom art foreach National Park. And so when
you get one, now, it's gonnajust gonna be a cooler little
thing. And what I mean, there islike, people were already in on
the water club, like he'sgrowing a good business there
with a token, he already gotsomewhere there. But now he's
taking this idea that he had,and like working really hard to
figure out how to make sure thatthe experience of buying that

(41:44):
token is even better. Andactually, a lot of those
customers are gift buyers, too.
And so now that's another way todo it. Because I'm gonna feel
better about giving us as a giftif the product has a little bit
of a higher quality, etc. And sono, that's not problem solution
at all. But it's just like, andthat's so many hours of work,
Trevor, it's like, so hard to dothat, you know, but that's what

(42:04):
I mean. And you know, you thinkabout things like packaging. And
at some point, Ken, he's gotthis idea of like, what about,
it's called the Wonder club?
What about creating an actualwonder club, you can be part of
it and share your memories. Andyour experience is all built
around this idea of helpingpeople tap into these things
that are important to them. Andso that's the kind of thinking
that I'm thinking about here.
How do you like, push down intothe experience you're promising

(42:24):
and the brand you're building,and help people actually help
your customer do that reallydelivering maximum amounts of
value on your promise to acustomer? They give you their
money, and they're just so happyto have done it afterwards?
Yeah, I

Trevor (42:37):
love that. So it's like UK get the you got to fix the
problem. That was the numberone, not every brand is going to
do that. Okay, because it's nota problem solution. The second
one you just talked about waslike, it's experience, right?
Like, the experience is whatbrings the joy, it's what brings
the memory, right. There's alsoother things you can talk about,
from an experience perspective,perspective, even from like a,
from a packaging perspective,right? Like, if you ever ordered

(42:59):
anything from ag one, athleticgreens, or seed, for example,
and experience their packaging,packaging experience, you know,
like, those are things that keeppeople coming around because of
how it makes them feel like ifyou can tap into that feeling
emotion. The third one, I thinkthat you you brought up earlier

(43:19):
before asked the question, Isyour your example with your T
shirt. Right? You okay? It'skind of problem solution, but
not really, its problemsolution, the way you think
about it, because you're like,hey, I have a specific body type
that's challenging to to find agood fit. But to me like that
third thing is maybe justquality, right? Like, like,
yeah, it measures up on thisquality of how it fits, it goes

(43:43):
to the wash X amount of times,and it's still okay, because
that's another thing that sucksabout shirts is that they start
to, they start to ball up, theystart to shrink, whatever,
whatever. So I love this kind oflike product experience kind of
direction you've gone down. Andthere's a several different ways

(44:03):
that you can measure that oneway, one way you guys can do it.
You know, people can do thatoutside of just like listening
to social chatter and justwatching what your sales are
doing. But there's also thingslike NPS surveys that you can
kind of produce to people tounderstand like, Hey, how are we
measuring up? And if we're not,you know, so for those of you

(44:24):
who don't know what NPS is,like, that stands for Net
Promoter Score, right? I believenet promoter score, and it's a
scale of one to 10. Right? Andwhat happens is you either have
people who are promoters, and Ibelieve I believe promoters are
seven and above, right? You'vegot passive people who are what
is it? Is it like a four to six,and then you've got detractors,

(44:48):
you know, who are this like 123or 124? You know, and so asking
the detractors and the passivepeople like, Well, why, like
what is it right like if you Youwant to really, really get to
the bottom and then asking thepromoters who are like, Okay,
why do you love it so much? Youknow? So there's several ways
you can do that good.

Andrew (45:09):
Yeah, well, I agree with that. And I also think
everything you do, there's like,get on the phone with customers
and just like, try to learn fromthem. Just absolutely claw
through your reviews, see whatpeople say they like what they
don't like, and try to tap whenyou're reading reviews try to
tap into like, emotions that yousee. And not just like comments
about the product, but like,what are people saying about
themselves, like, a guy lookedat a deodorant brand where

(45:30):
people were saying, like, I'm,I'm very active person, I live
in a very hot environment. Andthis deodorant stood up to that,
that tells you a sense of selfthat people are experiencing,
right, they experiencethemselves as fitness people who
are living in Texas, orwhatever, and it's like hot all
the time. And so they feel likethey need a deodorant that can
stand up to it, whatever. So Iagree with all of that, and

(45:51):
think that that kind ofqualitative and quantitative
information could be useful. Theother thing that I would say is,
if you are in a category thatshould have loyalty, right, so
you're not the wallet examplehere. If you're in a category
where people should be rebind,for you, and they're not that
that one piece of information isall you need to know that
something's wrong. And that youneed to do so like in the
example I gave of the waterclub, if people buy the wallet,

(46:13):
the keychain and the tokens, butthey just never come back and
buy more tokens in their lives,even if they go to more national
parks or whatever, somethingwent wrong, that they're not as
into the product as you think.
And, and, and you need to figureout how to deliver that. More on
that, you know, or, or problemsolutions, the same thing,
apparel is totally the same way,if somebody buys a shirt from
you, maybe they don't return it,but they never come back again.

(46:34):
You know, especially dependingon the category and probably
something went wrong there. Andyou need to be thinking about
like what's going on, and that'swhere you get on the phone and
talk to people and, and that'skind of jewelry

Trevor (46:45):
socks, like those are all you know, CPG anything and
CPG falls under what he'ssuggesting. Right? It's like,
figure out why that person isnot coming back. It didn't taste
good. They didn't feel sick,didn't fit right. tarnished
quickly, whatever it is, figurethat out. And fix that. For

(47:07):
sure.

Andrew (47:07):
I love that. Yeah,

Trevor (47:09):
Andrew, what? I know we've I know, we've been
chatting for quite some time.
What's something that you'rereally hot on right now that
you're noticing that a lot ofbrands are not focusing on?

Andrew (47:21):
I actually love this question, Trevor. And something
I've asked people on my podcasta lot too, because I think
almost everybody I've beenaround who's in a world like
this is, has got stuff likethat. They're just like noodling
on some stuff at any given time.
And so they they just havesomething the top of mind. So
anyway, for me, it's it's newcustomer revenue versus

(47:42):
returning customer revenue. I'vementioned it a few times it's
conversation. But I think like,I'm at a point where like, I
don't even know how to look atan E commerce business anymore
without immediately going totheir Shopify first time versus
returning customer sales report.
And looking at that, it's thefirst thing I look at, I don't
even look at the homescreenanymore, honestly, unless I
really want to see likesomebody's on Shark Tank. And

(48:03):
you want to see how many peopleshowed up, right? You know, at
that moment, or whatever, right,the live view. But otherwise,
like, I just don't even I justdon't even look at that main
screen. Because I now justbelieve like that that breakdown
is actually one of thefundamental things about DDC as
a channel experience, is thatyou can see with clarity, your
new customer revenue versusreturn customer revenue. And

(48:23):
when you start doing this, youyou will not be able to look at
your business a different wayanymore, which is really good.
Your ad spend is like measuringthe effectiveness of your ad
spend doing that, as I see thisall the time, people measure
their ad spend as a as a numberthat's against their blended
revenue. So they'll they'll saylike, oh, I have a four m er,

(48:45):
right, which by which they meanif I have $100 in revenue, I
have $25 and spent blended for41. Right? So revenue divided by
spent. But like, for me, that'sjust not going to work because
your ad spend is overwhelminglyaimed at acquiring new
customers, if you're in DC formost brands, you know, obviously
for the exception, yourexception and measure the other
way. But But starting to dothat, and then actually

(49:09):
forecasting everything aboutyour business based off of that
that cohort model forecast isjust the key thing. I actually
record I recorded an episode ofmy podcast in the day called
there's no such thing asrevenue. And it's entirely about
this thing, because I now don'tbelieve in DC. You know,
obviously there is such a thingas revenue, but I just look at
new customer revenue, returningcustomer revenue, I just don't
look at it. But once you startdoing that, you'll have all

(49:31):
kinds of insights, you'll gowait a minute, why aren't people
re buying my product or wait aminute my ad spend is not
generating the return I thoughtit was or wait a minute, it's
generating way more return thanI thought it was this sudden I
see all the time people arerunning triple whale or
something. And it's telling themthey're not making very much
money but their actual newcustomer revenue is growing way
faster than they expected andscrew the attribution platform.
are you generating new customerrevenue if you are great. So

(49:53):
that kind of thing. Is is justlike, yeah, you start doing that
you start developing thatinstinct and it will pay off
massive Massive dividends inyour business, I cannot
recommend it an amazing yeah.
What are some I love

Mark (50:03):
that suggestion that too because it requires a question
beforehand, right, which is whatis your goal? Right? What is the
goal? What is the purpose ofonline advertising? It's to
acquire new customers. So if youknow what that goal is, and how
do you measure that goal, right,and I think what you said summed
it up perfectly, I think, rightafter iOS 14, happened, a lot of

(50:27):
people shifted to that M erapproach, which wasn't
necessarily bad. And, and quitefrankly, if your recurrent
turning customer rate is 10%,then that probably works fine,
right? If you have a highreturning customer, right, and
you have to start separatingthese two things out and
understanding, hey, how do wegrow new customers? Right? How
do we actually grow the businessin a profitable way? You just

(50:49):
nailed it right on the head. Andit but it requires those
questions that you asked at thevery beginning of the podcast or
use, you know, you help brandsanswer, and that's like, what's
the actual goal in the vision ofthis company? Is it to acquire a
ton of new customers and grow?
Is it to be very profitable, andjust kind of just steady as you
go? Like, the little stream thatcould or The Little Engine That
Could, right? I mean, what areyou what are you trying to

(51:11):
accomplish? And not enoughbrands ask those questions at
the beginning of their journey?
Or when they're trying to doonline advertising to begin
with? What's the goal of doingonline advertising? Right, is
it? Is it just to grow at Xpercent? Or is it to also get
eyes on your brand? Is there anoverall arching theme here? Or

(51:32):
are you just trying to like,grow and get more money? Like
you said, people default to moremoney. But there's a there's a
right way and a wrong way to dothat, depending on what your
goal and vision is?

Andrew (51:44):
That's right. Yeah.
Yeah, I completely agree witheven the NVR example you gave
though, Mark, one thing I wouldsay about that is, while it's
true that it's not as big of adeal to see those separately, if
you don't have much returningcustomer revenue, what else is a
lot of people actually don'trealize they don't have that
much returning customer revenue,they don't realize how big of a
problem that is in theirbusiness, if they're not
thinking about them separately.
And, and so like, even if youdon't have much returning

(52:04):
customer revenue, even if youare using a blended ner number,
it's like, it's still reallyimportant that you see these as
separate so that you canidentify that issue in your
business and think about whatthe implications of our of that
are for your strategy goingforward. And I've seen the other
thing too, by the way, somebodydoes blended M er, and they
actually have incredible amountsof returning customer revenue,

(52:25):
like some of the highest I'veever seen, actually was like in
one business with massivereturning customer revenue. They
just did not seem to realize it.
And they were massively underspending on their customer
acquisition because of that.
Yeah, they were just leavingmillions, millions of dollars on
the table, because they justweren't acquiring customers,
nearly aggressively. And we'veseen

Trevor (52:41):
the same thing. Yeah.
100%. And what are some thingsthat brands give me like a, you
know, so So for you as somebodywho's like, Hey, I can't look at
a business any other way now?
Okay, that's, that's somethingas you you know, however long
you've been thinking about it,you've you've come up with some
thoughts, some strategies, whenyou jump into a new business,

(53:04):
what are some things a brandshould be looking at? For to
understand, like? I mean,obviously, every industry,
depending on what their p&llooks like, you can't quite say
what is success? Right?
Obviously, we know you can'tjust give me a blanket statement
of success. But can you give ussome sort of like, what are some
things that they should belooking at and looking for, when
they start to do that? To helpthem make decisions? Is it can

(53:29):
you even answer that question?
Like, what are you looking atwhen you jump in? If I already,
you know, hey, I've got ajewelry business. I need Andrew
Ferris, you know, give me giveme just like a quick breakdown
of what you're going to do ifyou were to jump into the
business.

Andrew (53:46):
Yeah, so the first thing I would ask is, what your goals
are. And I would try to help yousort that out as much as
possible. And then the secondthing that I would start to do
once we've got those is to tryto figure out what your business
looks like at those goals. Sojust sort of imagine that future
if we're going to draw my goalas a consultant is to draw is to
take you from point A to the Xon the treasure map. So if you

(54:08):
tell me what the treasure is,then I'm gonna now need to know
like kind of where that like, ifyou tell me what the treasure
is, I'm gonna tell you where itis on the map and what it looks
like essentially, when you getthere, this analogy is getting
bad very fast, but but you getthe idea, right? We need to
identify that x and thattreasure seriously before we can
possibly draw the dotted linesto it on the map. And so then

(54:28):
then the next question isdrawing the dotted lines to it.
And that comes down to for me,forecasting the business and
starting to look at and saylike, Okay, you want to get this
big this fast? Well, how much adspend do you need to accomplish
that how many new customers doyou need to accomplish that? How
often are those customers needto come back to accomplish that?
What is your contribution marginon those customers when you
acquire them and and what isyour capitalization and all of

(54:51):
those kinds of things? Becausethat will then help me determine
how we should what levers weshould or what targets we should
set in our space. And both thevolume of spam and the
efficiency of that spend, if ifyou've, you know, and if you're
working with me, it's becauseyou want to spend to get there,
like you're not working with meto give you an organic strategy
that somebody else is to do thatI will, you will waste your time

(55:12):
with. In fact, I won't take yourmoney to do that, because I will
blow it. So. So that's, thatends up being that ends up being
a lot of the front end. And whatI ended up doing is like a month
to two months, and up gettingclarification on those and then
trying to spit out by the end ofit. Essentially, a forecast
that's cohort based, so we'relooking at that LT we're

(55:32):
building the forecast off of notjust like, How much money do we
think we'll get? I don't know,if we grew 20%. Last year, maybe
we'll go 22. This year, what Iwant to say is, if I'm gonna
acquire 1000 new customers nextmonth, how much those customers
gonna be worth to me over time.
Well, that's actually like aforecast double. I mean, you'll
never get it. Right, exactly.
But it's you can forecast thatwithin a way that's intelligent,
and then start to think aboutthat over time. Build that that

(55:54):
actually determines anotherthing which people don't think
about, which is like, How mucham I able to spend on objects in
my business? How much can Ispend on SGA. And my business, I
think that one of the greatefficiencies in E commerce is
that you can scale an E commercebusiness, there's massive
economies of scale, and you'rein your OP X, and you're in your
SGA. Right. So the simpleexample I always use is that it
costs basically the same amountof money to send an email to

(56:17):
1000 people as it does to sendit to a million people. And so
the graphic designer hours,there are the are the same, you
have to pay a little more forCLEVEO at that point when you
leave when you've spent more,but it's not it's not nearly
commensurate with the valueincrease. And so, so that
percentage of your OP X thatgoes into that can shrink
drastically. And I would say formost ecommerce businesses, the
number you want to be targetingis like 15% or less of your

(56:38):
revenue in SGA. And if you cando that, then that creates a
massive efficiency reallyquickly give everybody who's
listening SGMA tell everyonewhat that means. Yes, sales
general administrative, so it'sbasically your your, your fixed
costs in your business relatedto salaries, salaries, general
administrative rights, sosalaries, rent, if you're paying

(57:01):
that anywhere, and then I wouldput things like for an E
commerce business, I would putlike, sort of flat software
costs, those kinds of things aswell. Anything that's not a
variable cost in your businessthat's going to do that. So
yeah, that portion of your p&lshould be pretty low. Whereas,
you know, think about softwarebusiness, it's gonna be a lot
higher, because you're gonnahave to pay a bunch of
engineering dollars and thosekinds of things. So anyway, so

(57:24):
the the, that's, to me, one ofthe great one of the great
efficiencies. So that's, that'swhat I'm thinking about. Now, we
can actually build your p&l,which is like this dotted line
I'm talking about essentially isa big part of it is saying like,
okay, next year, this is that,and that gives us a target
profit margin at the bottom ofyour p&l of x. And that x can be
a lot of different things,depending on your goals, right?

(57:45):
It might be 5%, might be 20%, itmight be negative 10%. Right?
Who knows. But, but, but that's,we can start to do that based on
those things. Because now we've,we've calculated the value of a
customer to us how much we'rewilling to spend to acquire that
customer. And somewhere inthere, I might have breezed over
it. But somewhere in there,we've also calculated how much
all the variable costsassociated with selling that

(58:05):
product are, for example, yourcost of goods, your three PL all
those kinds of things, you know,your processing fees, etc. Even
your credit card fees, right,like the 3%, Shopify is gonna
take all your purchases or 2%,or whatever. So. So that's,
that's what I ended up doing alot of, and then from there,
after all that work is done.
We're developing creative andtrying to execute against the
best practices and meta ads andthat sort

Trevor (58:26):
of thing. I love that dude. Thank you so much, Andrew,
this is yes, I hope that. Yeah,I mean, it's, I always love to,
you know, what I found on a lotof podcasts that I've listened
to is people talk about whatthey're doing and all the
success that they're having, andhow they, but a lot of people
don't break down the process,right? Because you're talking

(58:48):
where you're at today, but ittook you how long to get there.
You know, so I always love tokind of break that down a little
bit more simply. So somebodywho's just getting started or
somebody who has been stuck, canbe like, Oh, okay, cool. Here's
some quick actionable steps thatI can jump in and start to get
to what Andrew was talking abouthere. I may not be where he's
going to be in the future. But Ican get 50% of the way there 60%

(59:10):
of the way or even 10% betterthan what I'm doing right now.
So I appreciate that. Well,Andrew, do this has been an
amazing conversation. I don'twant to take up too much more of
your time because we were goingon an hour here but what where?
Where can where can people findyou?

Andrew (59:29):
Yeah, man. I mentioned a couple places and yeah, it's
been great conversation, Trevor,I appreciate it so much. And
Mark, same. My podcast isprobably the best place to
start. If you liked thisconversation and you want to
follow up with me then you maybelike hearing from me there more.
I mentioned a couple episodes.
I'll kick those to you if youwanna put him in the show notes
or something Trevor? So thatpeople can maybe start there.
But then I'm on Twitter atAndrew J. Ferris FERS, so if you

(59:54):
want to follow me there, that'sfine. The other thing I'm I'm
actually not taking on clientsright now but but I'm actually
considering putting together tothe point that he's mentioned
that I'll call like, a meta adsbootcamp where I'd kind of get
together for a day and try toput to take take some brand
owners really and that sort oflike, mid seven figures space

(01:00:15):
who are trying, you know, lowmid seven figures, it actually
could be lower than that. Butwe're really trying to take that
journey up towards 2040 50million. And say, like, let's,
let's like, let's like solve alot of this stuff that I'm
talking about in one day. Sowhat about how do I set that
target correctly? How do I thinkabout attribution and then
actually to walk away with like,a forecast in place, a target in

(01:00:36):
place in a one day meeting,basically, an intensive with it
would be only three or fourbrands, probably I would invite.
We'll see if I actually deliveron this. But this is what I'm
thinking of. And, and then also,like with a creative strategy,
and a media buying strategy inplace, so it'd be a deep dive,
it'll be an intense day. Andyou'll be tired afterwards. But
you know, have some dinner anddrink together as well

(01:00:58):
afterwards. But But working ongetting that set up right now,
if you're interested in that, goto ajF growth.com. And send me
an email, there's a form there.
It says service you'reinterested in just put other and
then just send me an emailsaying are interested in that. I
think it's gonna be awesome. Butbasically, to do exactly, you
just said, Trevor, which islike, Hey, maybe I got 15% of
this. But I'm really I want totry to get closer to 80 to 90%

(01:01:21):
of this or more, you know, andso I'm looking for a couple of
folks I my favorite stage ofbusiness is like, is that like
sort of low mid seven figureswho were trying to get to 20.
Plus, I just love working withentrepreneurs who are like
building their own thing. That'sso much more fun to me than some
monster hunter million dollarbusiness or whatever. So. So,

(01:01:41):
yeah, that's, that's, that'swhat I'm talking about putting
together so amazing podcast andthe AGF growth.com. And go go
reach out to me there and I'llput that together. Cool.

Trevor (01:01:49):
Well, everybody go fall, Andrew, this has been an amazing
conversation, such apractitioner in this space. And
I've listened to your podcast,and it's so actionable. So I
love it. Man. Thank you so muchfor joining us. And thank you to
all the listeners who follow usevery single week. We really,
really appreciate you guys andwe will see you next week. Thank

(01:02:11):
you so much for listening to theunstoppable Marketer Podcast.
Please go rate and subscribe thepodcast whether it's good or
bad, we want to hear from you.
Because we always want to makethis podcast better. If you want
to get in touch with me or giveme any direct feedback. Please
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Crump on both Instagram andTiktok thank you and we will see

(01:02:32):
you next week.