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Hello and welcome to another 
episode, the winning Shopify 

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podcast and me host Nick Truman.
It's great to have you guys 

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tuning in. 
And if you're listening to this 

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and hear some really weird 
noises, we are currently at Sub 

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Summit in Kansas City. 
Byron and myself are flown out. 

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Byron's just behind the camera 
at the moment and they're 

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setting up today. 
The conference starts tomorrow. 

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So by the time you're watching 
this, the conference is either 

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about to start or it's just 
started. 

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But I thought I cannot miss an 
episode. 

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So sorry for any weird noises. 
And if you're watching this, 

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obviously, you see these guys 
setting up in the background. 

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We could use virtual backgrounds
these days, but we don't have 

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that kind of production budget 
here. 

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So this is all authentic, It's 
all real, but it would have 

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missed an episode. 
And what I've been doing for the

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last five weeks is writing down 
5 things that I'm seeing brands 

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that they should be asking their
data and probably aren't. 

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And each of these has come from 
5 different clients I've been 

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looking at across the work we've
been doing with our agency. 

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So we don't want to miss that 
and stay tuned for the end 

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because I think the first 
question you guys are going to 

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have is how big does my business
need to be? 

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How many transactions do I need?
How many customers do I need, 

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where these questions actually 
start to make sense and and 

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become relevant. 
So the first thing is order 

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profitability. 
So many brands, they just look 

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at total money in, total money 
out and they don't look at how 

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much profit has actually been 
made on each order and that's 

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net and gross. 
So net profit being OK, these 

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products have cost us $50.00, 
the order was 150. 

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We've made $100 profit, gross 
being how much it cost us to run

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the business. 
What was the marketing budget? 

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Did they come through a paid 
channel? 

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And so I think one of the 
biggest things that brands 

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failed to look at is looking at 
this data to actually segment 

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orders and see orders that these
are like the over $100 

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profitability orders, these are 
the 50 to 100 and these are the 

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sub 50. 
And quite quickly you can say 

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actually we're spending money on
advertising, we're targeting 

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customers, we're spending time 
and energy emailing customers. 

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But actually the orders even 
just on net profitability, just 

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that cost of products versus 
order actual order amounts that 

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net profitability brands are not
making those segmentations, 

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therefore wasting time, wasting 
energy, wasting marketing 

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budget, possibly making a loss 
on a lot of those orders. 

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It doesn't mean you shouldn't go
and get those orders, it's all 

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revenue at the end of the day. 
But one of the biggest things we

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need to be doing is targeting 
those VIP customers and those 

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smaller, less profitable orders 
or those orders that make a 

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loss. 
You might be able to make a 

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business or behavioural change 
to put it into profits. 

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The first one, Massive 1 and 
probably the biggest is order 

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profitability. 
Maybe it's not the biggest 

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actually. 
The second one is customer 

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profitability. 
So many businesses and I've 

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spoken about lifetime value and 
repeat orders and getting 

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further orders from existing 
customers. 

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I talk about it a lot on the 
show. 

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And when you look at customer 
profitability, some of your 

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customers that have spent 
thousands of dollars over the 

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last 5-10 years with you might 
not actually be profitable at 

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all. 
And that's my point is looking 

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at just the revenue, not the 
profitability, that is a 

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massive, massive problem for 
brands. 

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And one of the biggest issues we
see, which we'll come on to in a

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minute and it kind of reflects 
to a few of these points is 

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around return on ad spend and 
how much return you're trying to

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make from ad spend. 
The problem being is 1 product 

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makes you $50 profit, the next 
one makes you $200 profit. 

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And obviously you do get that 
reflected in row as return on ad

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spend or ROI. 
One of the things you don't get 

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on on that though is the same 
two or the two orders that look 

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the same or have the same value,
so $50 each, you won't actually 

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find the same profitability on 
each order. 1 might be $5 

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profitability, 1 might be 25. 
And the point being is you're 

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targeting those two the same. 
So we'll come into items in a 

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minute. 
But that customer profitability 

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flows from that, that actually 
some of your customers might not

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be profitable even though they 
have a high revenue. 

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We tend to find that the 
customers that spend the most 

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with a lot of brands, they're 
actually ones that come back 

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during sales seasons. 
So during Black Friday, Mother's

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Day, Father's Day, Easter 
campaigns, Thanksgiving, Labour 

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Day, there's loads of different 
times that people will offer 

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discounts through their store. 
And if you're, if there's a 

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whole segmentation of customers 
that only buy at those times, 

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they're only buying when you've 
already slashed the price by 

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25%. 
So you slashed your net profit 

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on that item by 25% and that's 
the item they're buying. 

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That is a problem and that means
you are, you may actually be 

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selling loads of items and not 
making profit and that's a 

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problem. 
This is about working smarter, 

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not harder. 
Within that customer 

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profitability. 
I'd highly recommend looking at 

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the volume of volumes of orders 
per customer per year and 

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profitability per customer, 
which is the lifetime 

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profitability. 
So it's how much profit we've 

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made. 
You probably will only be able 

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to look at that net, not gross, 
but even then it's we sold all 

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these products. 
And if you've got the cost of 

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goods in Shopify as a metric, so
that's how much say this 

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baseball cap is, how much this 
baseball cap costs for us to buy

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and put it on the shelf in the 
1st place. 

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So that's super, super 
important. 

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The long term return on ad spend
needs to be a target as well. 

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You might actually be able to 
find that looking at the 

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lifetime value of customers, 
where your Google ads and Meta 

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ads might be running at 3 to 1, 
four to one ROI or 8 to 1 ROI. 

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Whatever your, your business 
model says has to be the, the 

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minimum. 
You might find that actually, 

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instead of eight to one ROI, you
could be running a four to one 

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ROI because you know you're 
going to get the lifetime value 

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later, which means you can scale
faster, which is super, super 

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exciting. 
And you can scale faster. 

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You could even take a loan from 
a bank or something to scale 

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faster knowing we get, you know,
we get 4.5 orders per customer 

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on average. 
And at the moment, our row as 

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targets, targets are only based 
on the 1st order. 

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So we could exclude customers, 
existing customers from our 

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marketing in Google Ads and in 
Meta Ads. 

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So we're not targeting those 
guys with ads again, once 

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they've bought. 
It's only e-mail, WhatsApp, if 

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you're in the UK, SMS, that sort
of thing to get those second 

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orders, that customer 
profitability, again, super, 

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super important. 
So we've looked at order 

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profitability. 
Well, it's a customer 

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profitability. 
And the next one, you guessed 

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it, is another profitability 
one. 

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It's the last of their 
profitabilities, but it's item 

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profitability. 
And I've spoken about it's 

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already with the orders, with 
the the customers and that net 

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profitability per item. 
But again, this then means that 

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your row as targets on Google 
shouldn't be a blanket. 

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You shouldn't say that it's four
to 1/5 to 1/8 to 1, whatever 

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that row as or row as itself is 
a percentage. 

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So 400 percent or ROI $4.00 for 
everyone that we spend. 

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But actually, when you look at 
the item profitability on this, 

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you should be splitting 
campaigns in Google and in Meta 

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because it's a campaign level, 
you set that row as target. 

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So if you split the campaigns by
the robot's targets, this 

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campaign here needs to get 2 to 
one because we've got fantastic 

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lifetime value. 
We've got an 80% margin on those

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products, so we can spend up to 
50% of the retail price. 

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We make a 30% margin after 
taking into account the product 

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and the advertising cost. 
It's a smarter way of running 

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stuff. 
As soon as we get this data from

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clients, we're like, Oh my gosh,
we've been trying to target all 

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these big furniture items 
because they're more expensive. 

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And this particular example came
from that. 

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That kind of client. 
They sell lots of lighting, they

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sell furniture, they sell 
outdoor furniture and then they 

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sell candles. 
They make hardly any margin on 

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candles. 
They make a little bit on 

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lighting and then they make 
loads of margin on furniture. 

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And so we target furniture more 
now and we split the campaigns 

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so that the row as targets 
reflect that higher item price, 

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that higher profitability for a 
single sale. 

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Because that if you put them all
together, you're literally 

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considering the same cost to 
acquire a customer or the same 

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ROI. 
Not cost to acquire, but the 

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same ROI. 
You're targeting the same ROI 

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for a selling a small lamp as 
you are from selling an entire 

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outdoor furniture set for 
thousands of dollars. 

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It doesn't make sense. 
One will, one has a higher 

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percentage as margin and the 
other one has lower. 

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You should treat them like that 
within Google Ads and just some 

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more niche ones then. 
So the last two you might not be

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expecting these. 
This the number 4 is the landing

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page versus item purchased. 
So one of the things we find in 

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Google Shopping is people click 
on a picture of the item. 

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It's got the picture, the title,
the price, maybe the reviews, 

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delivery info, returns info, all
of that's displayed on Google 

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and you and they, they see that 
bit without you paying. 

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You only pay when they click 
through to the website. 

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They've already seen that 
information. 

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They land on that product page. 
They're pretty, pretty qualified

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at this point as a customer if 
you've done good marketing 

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within Google. 
But what we often then find is 

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people actually go on the 
website and they look at things 

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like your site search, they look
at the main NAV, they look at 

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the people who like this product
also like these customers also 

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viewed this product goes well 
with this one. 

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Here are some alternatives to 
this product. 

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Here's a product that's on sale 
at the moment and the it's not a

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problem. 
But the challenge then for you 

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guys as marketers is you look at
your data from, from Google 

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Shopping, from Meta ads and you 
say, well, actually advertising 

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these outdoor furniture sets is 
a good example of these baseball

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caps. 
Advertising those makes us loads

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of money, but no one's actually 
buying the baseball cap or very 

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few people buy the baseball cap.
They land on that product and 

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go, it's an $80 baseball cap. 
This one wasn't, I got some 

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really good deal on this 
yesterday in the States, but 

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they landed on that baseball cap
and then they went and bought a 

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different product that gives you
a decision that you need to make

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on your website. 
Do we want to stop distracting 

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people away from this more 
expensive item you've clicked 

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on? 
Or actually we're just going to 

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use this, We're just going to 
stock 1 of this item and if it 

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goes out of stock, we'll get 
another one in. 

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But we're only going to have one
of them because people don't buy

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them. 
But we know when people land on 

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this product, they then go 
through and purchase other more 

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expensive products. 
Or actually they land on this 

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one product. 
They buy this product, but they 

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buy it with five other things. 
And if they're not buying it 

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with other things, but then 
there's a job to do on the 

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website, isn't there? 
There's a massive conversion 

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uplift. 
So in terms of the data that you

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need to be looking at, the 
question you need to ask is what

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are people buying on and what 
are they doing next? 

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And that should define what you 
do with your web design, your 

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page layouts, your user 
experience, what you push, what 

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you don't, what you stock, what 
you don't stock. 

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And therefore the user journey 
you want to try and trigger off 

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the back of them landing on that
product. 

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I'm going to call this out and 
sorry to all of our partners 

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because we work with lots of 
other agencies on this. 

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So often, so often when people 
are designing a website, they 

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say we just want to make the UX 
better. 

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00:10:01,600 --> 00:10:03,480
And they don't look at data like
this. 

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Data like this defines what you 
should and shouldn't be trying 

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00:10:07,440 --> 00:10:10,080
to do with that page. 
So super important to look at 

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this data, ask the question of 
what journey do we want to give 

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that makes us the most profit? 
And you want to make that the 

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forefront of, of what's going 
on. 

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So if it's any random background
noise, we're in a very noisy 

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environment right now. 
And #5 and then, and then we'll 

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talk about when you should be 
looking at this data, some 

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minimum levels of data to look 
at, but #5 channel performance. 

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And there's two bits you need to
look at on channel performance. 

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I call these silo. 
And I call these integrated silo

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is just how many people clicked 
on an advert from that Channel 

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or a listing on that website or 
that PR activity we did or 

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e-mail we sent out, how many 
people click on that? 

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And that was what's considered 
last click. 

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And then they went through and 
purchased versus it being 

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integrated. 
It's part of a wider integrated 

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set of marketing where they 
might have seen it on Meta, 

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clicked on it and gone. 
That's a really cool, I don't 

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know, waterproof backpack. 
Like as episode coming out soon 

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with Adam from Blend Commerce 
and we talked about stubble and 

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Co backpacks and they're 
waterproof and they've got the 

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little rolly tops. 
They're super popular. 

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I probably saw one of those on a
Meta ad. 

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I started talking about them and
then someone I knew bought one 

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for me as a gift. 
You're never going to connect to

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that journey because the person 
that bought it wasn't even me 

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who clicked on the ACT. 
But that's what we call 

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integrated and you've got to do 
some very extensive testing to 

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really double down on how 
important was the meta add to 

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that item being purchased. 
Would they still have bought 

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that item? 
Would they still have bought 

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that item from the same retailer
for me as a gift? 

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And so you see the challenge 
that comes in and there are ways

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to go around that. 
So the question you need to ask 

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your data is, do people just 
click and buy? 

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Is it something you would buy 
really quickly or actually do 

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people need to do some research,
be sold on this item, find out 

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more about it before they 
purchase? 

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If the latter, then your 
marketing probably needs to get 

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an e-mail address or get them 
hooked into something on that 

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first journey. 
Give them a reason to sign up. 

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And it might not be a 10% or 15%
of your first order if you use 

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it in the first, you know, 
within the next 7 days that kind

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of, it might be something much 
better than that saying, you 

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know, why don't you receive 7 
emails about what the best 

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backpacks are, or you know, what
backpacks last the longest? 

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Or if you're buying this 
backpack because you're into 

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hiking in the outdoors, one at 
Santo. 

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A News Letter every week we 
released a new blog post about 

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someone who's done an amazing 
challenge. 

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They might have climbed Everest.
They might have gone through the

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Rockies and you know, and 
survived on, you know, survived 

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with no food. 
They haunted and and and 

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gathered all of their food 
really cool stories. 

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So if you can hook someone in 
now, you don't need to pay for 

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those marketing channels. 
You and you lose the, you lose 

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that risk or lower that risk of 
them buying elsewhere. 

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And so again, it totally changes
the marketing where the moment 

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it might just be, here's the 
item you're looking for, it's 

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$500 Click to add to basket. 
It's too much of a commitment on

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that first journey. 
So actually on that first 

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journey, offer something else. 
So again, I think the point 

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there on #5 is stop wasting 
money on bad channels and double

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down on the channels that drive 
revenue. 

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They but they might not be 
obvious. 

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So the question you need to ask 
is what channels are important 

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to us? 
Which ones are wasting money or 

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which ones are we using but 
using wrong? 

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We've not fully understood where
they fit in the journey. 

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So those are my five points that
order profitability. 

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So you need to ask questions 
about what orders are the most 

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profitable. 
You need to ask questions about 

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what customers are the most 
profitable. 

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You need to ask questions about 
what items are the most 

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profitable, What landing pages 
do people land on versus the 

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items they buy. 
And #5 channel performance, What

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channels work for us and where 
do they sit in that top, middle 

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and bottom of funnel journey for
us? 

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So the big question we get from 
clients and we, we get this a 

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lot with AB testing or we push 
this where clients say, you 

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know, we want to start running 
some AB tests here because we 

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want to improve our landing 
pages or the performance of our 

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website. 
If you have less than 1000 

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orders a month, it is really, 
really difficult to get some 

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good concrete data. 
What I would suggest you do is 

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say right now we're converting 
this much traffic we're paying 

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for to customers and rather than
testing, it's quite easy to go 

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well, we're getting 3 sales a 
day right now. 

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For example, we made a change 
and now we're getting 4.5 sales 

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a day on average. 
We've made another change, we've

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dropped down to four sales on 
average to undo the change. 

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We're back up to 4.5 because you
don't have the data to run AB 

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tests on the site or even with 
some of your adverts depending 

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on impression volume to click 
volume to order volume. 

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Sometimes actually just making 
those changes until you reach 

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1000 orders a month is it tends 
to be my benchmark and I would 

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just make more drastic changes 
until something sticks. 

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I would say actually you're in 
the MVP part of your journey, 

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the minimum viable product, just
make it work. 

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What's the minimum we can spend 
the minimum amount of changes 

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and the fastest way we can 
deploy those changes to start 

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getting uplift as quickly as 
possible. 

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If you're launching a new 
business or you've launched a 

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00:14:42,360 --> 00:14:44,800
business, you've launched a new 
product range or you've launched

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00:14:44,800 --> 00:14:48,240
a new store or a new sister 
company recently, it's just a 

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00:14:48,240 --> 00:14:49,880
mad scramble in able to get 
those orders in. 

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00:14:50,200 --> 00:14:53,040
So just be ready to change 
everything you've possibly come 

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00:14:53,040 --> 00:14:54,840
up with, which I know is 
painful. 

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I know it's difficult. 
So many brands I see enter into 

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00:14:58,320 --> 00:15:00,440
e-commerce and they're like, 
well, we know so much about 

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00:15:00,440 --> 00:15:03,400
products, this will be easy. 
And five years in, they've still

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00:15:03,400 --> 00:15:05,160
not nailed it. 
And so I think be ready to 

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change absolutely everything. 
It very much is a chicken and 

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00:15:07,720 --> 00:15:09,880
egg. 
So I love, I love this, this 

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00:15:09,880 --> 00:15:13,200
thing that my team use a lot is 
get the data, run some ads and 

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00:15:13,800 --> 00:15:16,640
but you'll be completely blind 
initially, so be ready for that.

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00:15:16,640 --> 00:15:19,400
So get the data, run the ads and
accept the in fact, you're going

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00:15:19,400 --> 00:15:21,720
to be blind initially because 
you haven't got the data to see 

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00:15:21,720 --> 00:15:23,920
what's really going on. 
Hope you find that useful. 

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00:15:23,920 --> 00:15:25,560
Guys. 
If you come into sub summit over

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00:15:25,560 --> 00:15:27,880
the next few days, we will be 
here until midday Friday. 

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00:15:28,040 --> 00:15:29,840
If you're a cool brand and you 
want to record with us and 

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00:15:29,840 --> 00:15:31,760
you're in Kansas, also reach out
to us. 

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00:15:31,760 --> 00:15:33,400
I should have plugged that 
probably about two or three 

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00:15:33,400 --> 00:15:36,440
months ago and but we were in 
the US over the weekend as well.

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00:15:36,440 --> 00:15:37,920
So if anyone wants to come hang 
out, please do. 

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00:15:37,920 --> 00:15:39,880
If you're a Brandy wants to come
on the show, you want to sponsor

351
00:15:39,880 --> 00:15:41,520
anything else, do reach out to 
us. 

352
00:15:41,520 --> 00:15:43,480
Loads of our sponsors are here. 
We're going to go and see them 

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00:15:43,480 --> 00:15:45,360
over the next few days. 
And if anyone is here as well, 

354
00:15:45,360 --> 00:15:48,320
our sponsors Tax Cloud, they'll 
sponsoring the puppy lounge. 

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00:15:48,880 --> 00:15:51,040
I respond this morning just 
saying I hope there are real 

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00:15:51,040 --> 00:15:53,480
puppies and she said there are 
real puppies. 

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00:15:53,480 --> 00:15:55,200
So I'm super excited for the 
next few days. 

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00:15:55,640 --> 00:15:57,560
If you've not listened to the 
show before it's first time, 

359
00:15:57,560 --> 00:15:59,440
please hit the subscribe button 
and check out some of the 

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00:15:59,440 --> 00:16:01,640
episodes who are coming out on 
the next few Fridays as well. 

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00:16:01,640 --> 00:16:04,000
We've done loads of face to face
and we're recording quite a few 

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00:16:04,000 --> 00:16:06,000
while we're here as well. 
Thanks for tuning in. 

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00:16:06,000 --> 00:16:07,120
Hope you can join us again next 
time.