"Once you shift from the mindset of being a designer to a business owner, then you'll realize that a real business launches products consistently, on schedule. That is the difference between the company that is able to scale up and grow, and the artist who is always consistently in kind of a little bit of a grind."
Welcome to Thrive-by-Design. The podcast for ambitious, independent jewelry brands looking to profit from their products. Get ready to make more and sell more doing what you love without spending every single waking minute doing it. Hey, and if you're a creative fashion or product-based business, I want to welcome you to the show. I'll be dropping big tips on launching, growing, and scaling your business so you can spend more of your precious time using your creativity to make money. You ready? Alright, let's do this.
Tracy: Welcome to the Thrive By Design podcast, Episode 207. Hey there, it's Tracy Matthews, chief visionary officer over at Flourish and Thrive Academy, and creatives rule the world, and I'm excited to be here because I love bringing on some guest and I'm on a guest spree at the moment and I was introduced to today's guest a couple of weeks ago by one of our students, Meri Geraldine, who will be on the show real, real soon. I am really excited to have Austin Brawner on the show, of the E-Commerce Influence podcast. Austin is incredible. First of all, he's very clearly spoken and we had this conversation just because Meri introduced us and she was like, "You know, I think that your listeners would really get value out of some of the things that Austin talks about." And I was like, "Well, let's get on a call and chat about it." And we had this great conversation about customer lifetime value, so I invited him on the show to talk a little bit more about customer lifetime value and how you can increase your customer lifetime value online and off, because you heard me talking about this a lot. It is so much easier to sell to a customer who knows, likes, and already trusts you than to try to acquire a new customer, and what we're trying to is really maximize our impact with everything that we're doing so that our job becomes a lot easier as we're trying to grow and scale our business. And I love some of the things that Austin talked about because he, I was like, preach, my friend; you're like kind of preaching to the choir here, like saying a lot of the things that I feel like I'm drilling into your head often, but we had some really interesting conversations about a jewelry company called Pura Vida bracelets and what things that they're doing to actually increase their customer lifetime value and we talked about a lot of different brands and basically situations and strategies that you can pull from some of the brands that Austin's working with to implement into your own business. And I'm really excited about it, so we're going to dive in to today's episode really soon. Before I do, if you want to increase your customer lifetime value, in particular online and you're trying to scale your sales online and potentially already have a successful business selling to stores and other places, I'd love to help you out with that. Because here's the deal -- as we know, as things are changing in the world, the business of wholesale is changing. Doing a million shows every single week is exhausting, and I say "Every single week" because I love to exaggerate a little bit, but even if you're doing a show every single weekend, don't you want your weekends back? Don’t you want to stop investing in those expensive trade shows that aren’t giving you an ROI, and don’t you want to maybe maximize your customer lifetime value selling direct to consumer and growing a business model that is recession proof that you have control of when things shift in the economy? Because as we know, the business of jewelry is changing and we gotta stay up with the times. So if you have consistent sales already and you're already doing at least $50,000 to $100,000 in revenue, I'd love to invite you to apply for a strategy session for SOS Coaching Program. For those of you who don’t know, SOS is our premier coaching program designed to help you get consistent sales online, in particular online, using your website as a tool. Now this program is wonderful for designers of all types. So if you're someone who is trying to scale a custom jewelry business, and you're working direct to consumer, this program is wonderful for you. In fact, we have several designers, including myself, who have used the methods that I teach to maximize their impact and grow their custom jewelry business, direct to consumer, upwards of $35,000 to $40,000 a month in revenue, which is pretty awesome for a 1-person business, pretty amazing. If you are someone who is trying to scale your online sales and get more reach from your e-mail marketing and your automated funnels and your win-back campaigns and all those things, or if you don’t even know what those things are and you're trying to get them set up because you would love to sell more direct to consumer, then we can help you out with that because at the end of the day, this program is designed to help you build a really strong revenue stream coming from direct to consumer online sources to build your e-mail list, to help you get your e-mail marketing dialed in right, to help you increase your customer value, your lifetime customer value, and to help you build a business that excites you and enlivens you. And a lot of times when I see designers come into us for help, they've had success in other areas, but they don’t understand why their website is not working for them. So let us help you with that. So if this sounds interesting to you, I'd love to invite you to apply to a strategy session so that we can determine if SOS is a good fit for you. You can head on over to flourishthriveacademy.com/strategy to book your free strategy session and apply for the SOS Coaching Program, and jump on a call with Natasha, our customer success expert. We'd love to hear from you. Head on over to flourishthriveacademy.com/sos and apply today. Okay, let's dive in to this interview all about customer lifetime value with Austin. Austin is the host of the E-commerce Influence podcast and the founder of Brand Growth Experts. He works with top brands in the world, including MVMT Watches, Dr. Axe, Pura Vida Bracelets, to help them define their marketing strategy, scale their advertising, and hire the team needed to get to the next level. In fact, we talk a lot about Pura Vida Bracelets in this episode. You're going to really love what we have to talk about, and Austin is also the founder of Join The Coalition which is his coaching program, designed to help people with strong e-commerce businesses actually scale those businesses and do some really fun things once you have the foundational stuff set in place. So let's dive in to today's episode with Austin.
Well, I have a very special guest on the show today, Austin Brawner. Thank you so much for being here with me.
Austin: Tracy, so happy to be here. Thank you very much.
Tracy: Well, I'm excited to interview you. A couple, maybe like a month or two ago, one of our students, Meri Geraldine, of Garden of The Sun, sent me a Facebook message. She was in our Mastermind group years ago, or a couple of years ago, and she's just one of our top students over at Flourish and Thrive and I was super excited because she was like, "You have to interview this guy, Austin! He's doing amazing stuff with e-mail marketing and funnels and all things e-commerce," and so of course, I wanted to learn a little bit more about you. So we jumped on a call and chitchatted and we had a great conversation and that, what came out of that, was not only you coming, you were going to come in and potentially teach for our SOS Coaching Program in a couple of months, but also, the conversation about customer lifetime value, which is something I don’t think people really think about, but it's a message that we have been talking about -- we talk about it all the time. Because the truth is, you don’t really need a million customers; you just need to keep the ones who buy from you on a regular happy, keep getting them to buy from you. So, I wanted to invite you on the show to talk a little bit more about customer lifetime value, and I have a feeling this conversation's going to go into a lot of different directions, but… Welcome, first and foremost, and thanks for being here.
Austin: Thank you. Yeah, no, really happy that Meri connected us. You know, Meri, she does some really cool stuff on her site with auctions and really interesting things that are pretty cool, so I'm actually going to have her on my podcast as well after she posted some cool thing in my membership. So, yeah, really happy to be here and happy to talk to you about all this stuff, yeah.
Tracy: All the things. Let's do it. Well, before we kind of dive in to the customer lifetime value conversation, why don’t you tell us a little bit about you and your journey and all the things.
Austin: Sure. So, you know, I kind of got my start in the online world after college. I thought I was going to be, I was really into like finance after college. I ended up moving over to Macau, China, lived over there and did a Fulbright fellowship.
Tracy: Wow.
Austin: I thought I was going to like move into be in finance over there, like my kind of world was changed. I went to this conference and met a bunch of entrepreneurs and I was like this is really interesting, I think I want to become an entrepreneur. And so rather than staying in Asia, I moved back and I started working with this company, one of the first employees at this company that was selling healthy vending machines to basically as a franchise across the country. It was a really good time because Michelle Obama was pushing the Let's Move…
Tracy: Yeah.
Austin: And I got involved working on e-mail marketing with the CMO. I think there was, at the time, two employees. I was one of them. And we developed an e-mail marketing system that allowed for a lot of inbound to come in and we had inbound leads coming in all the time and then we segmented them. We took them in different directions and ultimately took them to a salesperson who was closing $100,000 deals, and we're talking about customer lifetime value, like you said...
Tracy: For the vending machines?
Austin: For the vending machines, yeah, the franchise.
Tracy: Okay.
Austin: So you don’t need that many customers if you're selling $100,000 deals.
Tracy: No.
Austin: And it was really interesting to me, and we actually, you know, it became quite a complicated system that really worked well and we scaled the business up and we did it about $15,000,000 before I left, and we had one salesperson.
Tracy: Wow.
Austin: Because we had so many automated e-mails going on. We got second place in Fusionsoft Ultimate Marketer, and that really first got me super excited about the power of like leveraging digital marketing. Right? And being able to take a business that's small and create e-mails and be able to make it seem a lot larger and more powerful. And so I left that company and I had a couple of friends who were working down in San Diego starting e-commerce businesses. One of them was a sunglasses company and right next to them was another company, a jewelry company called Pura Vida Bracelets. They were right next to each other in the same, basically in the same office, just like right next to each other.
Tracy: Oh, just an office, not like a market or something that they were selling?
Austin: No. So they had their own, they had their own little market there. They were selling a store and they also had an office there, so they had both. And so, I thought, you know, we took this really interesting stuff that I was using for B to B and I was like, I think we can probably do this for more B to C type e-commerce businesses, people that are also selling in markets, both of them were going and going on the road and selling and then also selling online. And so we started looking at what they were doing, capturing e-mails, putting people through like different e-mail sequences, looking at abandoned cart e-mails, browse abandoned e-mails, and really trying to focus on maximizing customer lifetime value with e-mail marketing. So the reason why it's so important, one of the big reasons it's so important, is because what we realized is it was very expensive for them to acquire customers but not very expensive to have a second and third purchase that came through e-mail, because you're not really spending anything else. So that was a big focus, and I worked with this company called Blenders and then I dove in and worked with Pura Vida Bracelets for, I don't know, two or three months at that time to get their e-mail marketing dialed in. And that was kind of the start, I started working to help increase lifetime value, got really involved in this e-commerce space, and then continued to kind of work as the consultant, built an e-mail marketing agency, built a podcast where I was interviewing all founders from hundreds and hundreds of different brands, learning what they were doing, and ultimately, continued that and built a membership of, like it's a coaching community of e-commerce businesses that are growing, and we're doing training and helping them to maximize customer lifetime value, increase average order value, and grow their business, and that's kind of been my focus over the last 5 years now.
Tracy: That's amazing. So you kind of touched on this concept of customer lifetime value. Basically, customer lifetime value is from the second someone enters your funnel and buys something once, like how many, basically how many sales can you get out of them, over the long-term. Right?
Austin: Yeah. And not necessarily in sales, but just revenue.
Tracy: Yeah, revenue.
Austin: Right, so, yeah.
Tracy: Yeah. So, before, in our pre conversation, we were talking about customer lifetime value and different cycles because for e-commerce, it's a little bit different than for people with a wholesale business because, you know, if I look back to when I had my wholesale company and I was selling to stores like Twist, you know, the customer lifetime value of a store like Twist or Sundance might be hundreds of thousands of dollars, whereas an individual consumer, it might, you know a couple of thousand over the course of you know a few years. And so, we might, we may or may not touch on that a little bit, but I think it's really important to understand you know when you're acquiring customers and when you're bringing people into your funnel, especially when it comes to e-commerce, like to understand like really the customer journey and like the how you're kind of moving them through that process. So what's the best way, Austin, do you think to kind of determine or like figure out what the customer lifetime value of your customers are?
Austin: Sure. Sure. It's a really, it's a great question, and it's a question that brands of all sizes struggle with. Right? Look, it's a really, really important question, but brands of all sizes struggle with this question because it's difficult, and depending on where you are in your journey, that the way you think about lifetime value and calculating customer lifetime value is going to change. If you're somebody who's just starting and you, you know, you're starting to sell and you've got a little bit of traction, you've been going to different shows and selling and you start to feel like you're maybe doing $100,000, $50,000 to $100,000 in sales, and it's, you've been in business for a year and a half. That is going to, you're going to have a harder time calculating customer lifetime value than a business like Nike, who has been around for years, because they've got all the data and they can show that this is how much people, over time, spend. And the problem with people who are just starting out that they struggle with is how do I project? Okay, we know right now, buy something for $150 and 20% of those people come back and buy again in the first year for another $100, so we can kind of make an estimate of customer lifetime value, but how do we actually project into the future what people… because we're planning on growing our business, you know, we're going to put out new designs and we don’t really know what our customer lifetime value is going to be. So again, depending on where you're at, it can be a little bit of a challenge to figure it out. So what I would recommend first is people to think about, you know, where am I in my journey? Am I a year in and I can go in and… well, it's relatively simple to calculate. Right? You look at the number of customers that you have, how much they've spent and you've got an idea of what the average customer is spending with you. Now, the problem is trying to figure out, okay, if the average customer is spending this, now we throw in some complications. One of them may be that half your accounts are wholesale and they're mixed in with e-commerce side. Right?
Tracy: Yeah.
Austin: So you've got five people that have spent $15,000 or $18,000 over the last year, and then mixed in with a bunch of other people who have purchased through the Shopify site and have spent somewhere between $400 and $600.
Tracy: Yeah.
Austin: That's very different customers.
Tracy: Totally.
Austin: So. So normally what I'll, when I'm working with people or advising them on this, I'll say, "Go through, export your customers from Shopify and separate out the wholesale from e-commerce and look at it separately and say, alright, this is how many people we purchased, you can look and do kind of a cohort analysis and see the people that are spending more rather than less." There's a few apps that can help you do this as well. One of them is called Lifetimely.
Tracy: Lifetimely?
Austin: Lifetimely, yeah. It's a profit dashboard in customer lifetime value, like analytic dashboard. The problem, though with this, again, is that if you have your wholesale people in our Shopify dashboard because you've run some of them through the Shopify platform, it's going to, no matter what type of app you've got, it's going to screw up your readout. So, you know, first things first is get clear with the difference between wholesale and the direct to consumer. Separate that out and then start looking into that and seeing, you know, how much people spent, and then get real with where you're at in your business. Are you planning on rolling out a lot of products in the future? If you are, then you need to think, okay, people may have, you know, average lifetime value, after a year and a half is $150 but we know we're going to be rolling out other products, so we can maybe estimate that it's going to be higher than this in the future.
Tracy: Awesome. Awesome. So what are some of the things that you recommend to sort of increase that customer lifetime value?
Austin: So there are a lot of different things that a business owner can do to increase lifetime value. First and foremost, I would say the biggest lever you've got is continually adding new, quality products. Alright? If you don’t think about anything else in your business, you don't even want to calculate this number or do anything like that, if you just consistently launch products that people want and desire, your customer lifetime value is going to go up because …
Tracy: I want to thank you for saying that, by the way.
Austin: It's something that's very much overlooked. Right? You can get so deep into the idea and the metrics of like we need to do this, increase average word of value, all these different things, but sometimes, I work with companies that they have built a wonderful, really successful business by doing something very simple, which is they capture e-mails, they build new products, and they send e-mails to their subscribers and customers about the products that they're launching. And because people love their products, their customer lifetime value increases dramatically.
Tracy: Yep. It's great. And you know one thing, I'm just going to like interject here for just a second, because this is something that we come across, like designers who are like trying to find their way and figure things out, I'm like, they're like, "Well, you know, do I really have to launch new collections every year?" And I'm like, "Yes." Because once someone buys once, like they need something else to buy, and it's so much easier to sell to someone who's already bought from you than it is to try to find a new customer, and this is like a lesson that I don't, I think that everyone needs to hear. It's like you need, it's not about overdoing the products; it's like you need new products. And we see some really interesting things, I think, these days from a consumer standpoint and I don't know, Austin, if you work with customers or companies, excuse me, who are doing the same thing, but like companies like Tamara Mellon where, back in the day, to launch a new shoe collection it would’ve been this huge ordeal to launch, you know, 20 or 30 new styles or new shoes every single season, but instead what she's doing is just dropping like new designs, like a new design a month, and it's not like these big whole collection launches. And they're targeting you hard, like the previous buyers hard, with ads and e-mails, you know, basically like trying to understand like the things that you like and that shoe company is doing it so well because I don't buy, I mean I guess I kind of am buying more from ads now, but I've purchased like 4 or 5 pairs of shoes from her in the last year just because of that, because of the way that they're rolling out new product. And so it does work. If you get good at this, and you learn how to like really either like release new collections a couple times a year or release like capsule collections or smaller items that you can deliver new product every single month or every couple of months, you're going to have a much better time being about to get more sales from a fewer number of people, grow your business, make it easier on yourself, than it will be to go deep in a bigger collection and just launch it once a year.
Austin: Exactly. I 100% agree with that, and it also comes down to a mindset shift, and I think the biggest mindset shift that you can have is owning the fact that you're a business owner versus, you know, I'm going to use the example of a designer. Because if you, once you shift from the mindset of being a designer to a business owner, then you'll realize that a real business launches products consistently, on schedule.
Tracy: Yep.
Austin: And that is the difference between the company that is able to scale up and grow, consistently over time, and the person and the artist who is always consistently in kind of a little bit of a grind because they're not thinking like a business owner. Because the business owner knows that the way to grow is to consistently launch products and to do it to the people who are most likely to buy, like you mentioned were are their previous customers. And that's, I would say, the biggest difference between, that I've seen, is the people that really embrace that, they're the ones that continue to grow their business.
Have you ever been frustrated with your website platform and you're not sure why it's not working? Well, I want to ask you -- are you using Shopify? Shopify is the premier e-commerce platform. It's designed to help you scale your e-commerce jewelry business with robust integrations and ease of use. In fact, for many, many years, I was a Word Press junkie and recommended Word Press to everyone, but I am a Shopify convert, and I endorse and recommend Shopify to all of the designers, not only in our SOS Coaching Program, but in the broader Flourish and Thrive community. Because if you want to do serious business online, you don’t want to have to invest a ton of money hiring an expensive programmer, trying to fix and tweak things. You want a system that is all-inclusive, that's robust, that's going to do the work for you. That's why we always recommend Shopify for our designers who are ready to scale and grow their e-commerce business. So if you want to jump on Shopify with a free trial, head on over to flourishthriveacademy.com/shopify and get your free trial today.
Tracy: I think also, like thinking of like your customer ascension model, too, it's like maybe they come in, like maybe Pura Vida is a good example of this, and we can talk a little bit about some of the things that they're doing since we were discussing it before. But maybe someone comes in and buys one of their $14 bracelets, but then they get hooked on the Jewelry of The Month Club and they're buying, now they're hooked in for, you know, 25 bucks a month and they're scaling that to hundreds or thousands of people every single month and just building a business that's like basically on autopilot. Do you want to talk a little bit about that?
Austin: Sure, yeah. I mean that, it goes back to your question again, which is a way to increase customer lifetime value. And you see it's a very popular way right now. People who are in e-commerce space, the direct to consumer space, everyone wants to create some sort of a monthly subscription because recurring revenue is so, it's also a whole… But back to your point, I totally agree with you about the person launching every month. Basically, if you create a box, a subscription type service, all that's doing is presaling a launch every single month. Because you have to create something and sell that through the box. The difference is you are just presaling it. So, you know, look at a company like Pura Vida Bracelets, which is a, they do a wonderful job with design. Right? They are designers and they, they're very visual and they create beautiful jewelry, but they're also really, really good business people, and one of the things that they launched… this is, this is, to be honest, one of the only companies that I have seen who has really had success, you would not expect a jewelry company to be able to sustain a monthly box because people have to, you know, people would argue, at least with me, when I was thinking about it, like people would argue with me saying, "Well, what if you don't like the jewelry; it's all visual." So what they did is they created a monthly club that gives people basically 3 exclusive bracelets…
Tracy: Uh-huh.
Austin: … and they give them a, I think they charge like $14.95 a month, and they say the value is $50. So, they're giving people a valuable offer…
Tracy: So they get 3 bracelets in the box for $14.95?
Austin: Yep, for $14.95 a month.
Tracy: Oh, my gosh. You can just give them away as gifts at that point.
Austin: Basically, you can give them away, that's exactly, if you don't like them, but what they focus on is not necessarily the jewelry, they focus on the style. So the selling point is the style. Hey, we have stylists who pick new bracelets that go together and you get some style bracelet every single month, or style bracelets that work together. So, they're not really selling the bracelets. They are a little bit, but really what they're doing is they're selling the style. And it's, you know, only $14.95 a month, so again, if you don’t like it, it's not that big of a deal, but it's one of the ways they have been able to take, have no recurring part of the business and scale it up to be part of their business. The subscription part, I think is, I don't know, my guess is it's the largest part of their business at this point.
Tracy: I love, we have a couple of designers working on a subscription model right now. Some of them have pulled it off really successfully, and others are still trying to figure it out, and I love this idea of just like, you know, we have like, it's almost like you know, it's kind of like a StitchFix model, in a way…
Austin: Yes, it is.
Tracy: … where maybe, I mean, if there was a way you could customize it based, catered on preferences. That would be awesome if you have the bandwidth to do that, but it's also cool because they're just like, "Hey, we're styling this. It's a $50 value." And at that low price point, it makes it a no-brainer. I think it really works when you have a volume of customer, though. It's hard to get something like that off the ground if you have only 100 people on your e-mail list or something. So it's really about being able to scale the offer.
Austin: Well also, you have to think about it in two different ways. I totally agree with you. The thing about like StitchFix or with what they're doing, there's really two options. One it's the customized boxes.
Tracy: Yep.
Austin: And the other one is the uncustomized boxes. The uncustomized boxes, they customize, then change every single month. You have two models you could go with. You've got the one where you change the box every single month; it's the same for everyone. There's no changes. You just, everyone who is on the list gets the same box, or you go with the other one, which is people can change whatever they want in it, and go that direction. That one's harder to pull off because there's a lot more moving parts…
Tracy: Yeah.
Austin: But, again, that's, you know, the companies that are, the really large e-commerce companies who are doing this are investing in their infrastructure to allow you to be able to change the boxes and that sort of thing. So, there's two options. I think the best, I love the option of the simple monthly boxes, you sell the style.
Tracy: Exactly. Sell the style. That's it. And I think Pura Vida, if you guys go on their website, they're going to probably get like a blast of a bunch of people checking them, stalking their website. I was on it this morning. I think that the website design is super duper clean and, Austin, I was listening to one of your podcasts about user generated content. It appears to me that they are doing a lot of like almost what appears to be user generated content, even if it's like professional photo shoot, because you know, their demographic is like, you know, girls in San Diego or Costa Rica or wherever who are like probably in their 20s who are stacking these bracelets, living the beach lifestyle, going surfing, you know maybe.
Austin: Yeah.
Tracy: And living the Pura Vida or whatever it is. But they really do a good job of kind of capturing that vibe with imagery that kind of looks like someone took it on their Iphone.
Austin: 100%. And that's something that when you are just starting out and haven’t spent a lot of money on advertising and so, if your business can grow in paid social, I think a lot of the people in your community are listening here are going to be in that boat, where they can grow off paid social, the more money you spend on paid social, the more you realize that user generated content is going to outperform nonuser generated content.
Tracy: I know.
Austin: It's, you know, I have a friend who runs a, spends a lot of money, he's a media buyer, spends a lot of money. And he got all these professional photos done for this company he works with and he, so he put them all together. He built out a big ad set. He's spending, you know, thousands of dollars a day on this…
Tracy: Yep.
Austin: … and then right before he went live, he took his iphone, he took the product and stuck it down on the ground next to a window and he took a picture of it on his iphone and put that as his split-test ad versus all the professional images, and that was the one that one. The one that took him 2 minutes to make on a little, you know, board with decent, with good lighting. The user generated content won. And he was like, "Sometimes this is so frustrating, you know. You try so hard and it comes back to the user generated content." But to that point though, the reason why it's successful is because you, it connects in a native way with whatever platform that you're advertising on and Facebook and Instagram, it's, all the other ads are user generated. No, not ads… all the other posts are user generated. So if you want to blend in and perform well, you need to, you can't break the mold and put some, you know, some super flashy, highly designed thing. It's just going to stand out, where if you flip over to YouTube, and if you ever, if you ever look at what performs on YouTube as advertising, it's highly polished videos because that's the platform. It's different than Facebook.
Tracy: Totally. Totally. Yeah, I loved listening to that episode of yours, and I will link it in the show notes as well, because it was really fascinating to me because it's something that we, one of the steps in like something that we recommend for like a post purchase sequence is like basically like snap a selfie and send it to us and then we'll use it or post it and tag and people get, I think a lot of designers, get frustrated but over time, people start to, they get frustrated because people that are maybe their customers won't do it or they're shy. I know my jewelry customers are a little bit shy, so any time they send me a picture, they like cut their head off, so it's like, no one knows who it is, but at the end of the day I think that when you can get those selfies or those pictures of people like genuinely wearing it, it becomes like, almost just like a form of like a review or social proof just from the picture, even without any words.
Austin: Yes. Yeah. I mean, just put yourself in the mindset, especially with jewelry, is like people want to see what it looks like on. That's what matters, not necessarily what it looks like on a white background. It's like what does it look like on someone's finger or on their wrist, and that's why I think they do it. That's why they focus on that.
Tracy: That's awesome. So my next question is like what are some of the biggest missed opportunities you see people making like when they're trying to sell more or things that they're not, people are not doing that could like literally like move the needle really quickly.
Austin: Sure. So, I'll start with e-commerce and talk a little about like a Shopify store and then we can also talk a little about wholesale because there's some good stuff there as well. So, around on a Shopify store, it really comes down to very simple numbers. If you think about these numbers, it's average word of value, right? Looking at your average word of value, how much people on average are spending, it's repeat purchase rate, so how often people are repurchasing and you can look at like, though… So if you start with average word of value, one of the quickest ways that you might be able to increase your customer lifetime value is by providing some sort of a bundle, so taking your products and if you've got them all spaced out and you have to buy them one by one, you can combine them together. Things that look good together can be combined.
Tracy: Bundles - I love it. We talk about bundles a lot. I love it.
Austin: Bundling is a great strategy and one that I've seen take a business from… actually, I'll give you an example. There's a deodorant company who was really struggling to acquire customers at a cost that was acceptable for them. It was natural deodorant. And they, because they were selling it, I think it was like an $8 product, or something around that, and so what…
Tracy: Cost them $8 to get their $8 sale.
Austin: Yeah. It cost them too much. So they were like well what if we just bundle it and only sold 6-packs, and they just bundled it, only sold 6-packs and it went from being a product they couldn’t scale on Facebook to a product they could scale on Facebook because they were able to set, it didn't increase the amount they had to spend that money for that much, so it's one simple thing to do. You can look at upsells and cross-sells, dip sometimes, you know, if you have products that go well together, you can upsell them, either post purchase with something like one quick upsell or cart hook, or the Bold app on your, on Shopify.
Tracy: Cart hook and the Bold app. I think we have recommended Bold before.
Austin: So, yeah, Cart hook is a little bit more advanced and I would recommend it for customer, for companies who are, you got to be a multimillion dollar range to be able to afford it, but it's really top of the line for a post purchase upsell. After everything is done, you know, they put their credit card in and they press order, then you have the opportunity at one more page pops up and it says, "Hey. Would you like to add this to your order?" And they don’t have to put their credit card back in or anything like that. They can just add it, buy it right there. And I have implemented that with a couple of clients and I've seen, the highest we have seen is almost a 16% increase, overnight, in average order value, just boom, right there.
Tracy: Wow.
Austin: And so, that's a really good toy you can use. Other opportunity, by far, the biggest missed opportunity is not e-mailing consistently.
Tracy: Yeah.
Austin: And that one, which I know you talk about a lot, continuing to e-mail, giving a, you know moving from a mindset of "I'm going to e-mail when I have time" to "I'm going to e-mail on our schedule that we have agreed upon," and do it weekly or you know twice a month or if you're a larger business, sometimes twice a week, three times a week because that's going to drive more revenue.
Tracy: So if you're like many of the people that I subscribe to, three times a day.
Austin: Three times a day, yeah. I mean, there's a reason. Right? So, when you study the people who, study the brands that are growing the fastest, and especially the ones that are launching products consistently, they are e-mailing all the time because again, back to the customer lifetime value side of it, your cost of acquisition from e-mail is going to be so much lower than your cost of acquisition from any other channel. If you're spending on paid social, it becomes very expensive very quickly and we don’t live in a time like we did five, six years ago when your organic reach mattered. It doesn't matter anymore. You're not going to build a business off organic reach on Instagram or Facebook. Just not going to happen. Not the way that it used to, and so you have to figure out these other channels. Sometimes they can be Facebook Messenger, but e-mail still drives the most revenue for all of my clients. And that's what I say the biggest missed opportunities would be.
Tracy: E-mailing regularly. Thank you, Austin. High five through the computer. On a final note, is there anything else that you think can be done to really improve order size, order value, or any other ninja tricks that you love right now?
Austin: Well, you know, I have been kind of in the Shopify ecosphere for a long time and you know you always hear of things that work for a little while. Here, I'll give you, these are always the things people love. I hesitate because whenever you do share them, they get burned out really quickly, but here's one that I've seen, a couple of things that work well. So one of them is something called priority processing. I don't know if you talked about this at all on the podcast.
Tracy: No.
Austin: But priority processing is something you can add to your checkout page and you can say hey, for $5, for, this is an example. I've seen lots of brands, a couple of brands do this, maybe like five or six brands, but they're kind of on the cutting edge. So they say for $5 extra, we can give you priority processing, which means we'll ship out either today or we'll move your order from the bottom of the pile to the top of the pile and ship it out quicker.
Tracy: So good.
Austin: And that right there is a $5 goose, and you don’t need that many people, especially if you're playing the lifetime value game or you're trying to acquire people on Facebook or Instagram and then have increased, you know, you make acquirement a break even and then continue to drive sales through e-mail. That can be the difference between a customer coming and you making money or losing money on the first purchase.
Tracy: Yeah.
Austin: So that's one that I've seen people doing that is interesting. And then they actually move to the top of the pile. One other little thing you can look at. I think people often don’t think about, don't think enough about shipping.
Tracy: Yeah.
Austin: And the impact that shipping has on whether, on conversion rate, on what types of shipping people will choose. So I'm not always an advocate for going, I mean, free shipping people prefer free shipping over non free shipping. That's pretty clear, but one place, if you don’t have free shipping that you can look at your website and kind of evaluate would be just looking at your, the way you describe your shipping and so make sure you're very clear about how you communicate when it's going to get there, what service they're using. A lot of times people see like, people don't really describe the shipping options and sometimes it can lead people to a lower shipping option or a higher one. So, be really clear about that.
Tracy: I like that because you know there's like a lot of, like sometimes I'll be shopping and I'm like oh I need this in like two days. I think that's why people love Amazon Prime so much because you can, sometimes I feel bad buying stuff on Amazon, but I know that like if I need a specific product, I'm going to get it in two days. And I think the cool thing is like when you're on a website, like I'm going to use Net-a-Porter as an example. They have free shipping that will take seven to ten days. Like who wants to wait seven to ten days for a purchase? Right?
Austin: Yeah.
Tracy: But like two day shipping for maybe like $18.95 and then they have, in New York City where I live, priority same day delivery for $25.00. So you have like free that's going to take like three weeks or whatever to get here, or two day, which is only you know $5 less than the same day, in person, hand carried delivery by 3 o'clock or whatever. And so it's, I mean, that, I'm sure that option and they just have like drivers that they pay to like deliver stuff all around the city and it's not, probably the expense to them isn't nearly as much as the uptake in like money for their business with that service that they offer.
Austin: I mean, you've to imagine it has a big impact on conversion rates because when people are there looking and they see seven to ten days, they're balancing if they need it earlier, and giving them the option can help you out there. One of the things I will mention about wholesale is I feel like it's another option, another place where there's a lot of, like if you don’t have a some sort of a CRM that you're managing, kind of to follow up for wholesale, wholesale accounts, really like spend the time and get one. Use something like Close or Pipedrive or whatever one you, you might have some other ones that you recommend, but just the follow up, consistent follow up with accounts can be the difference between somebody placing an order once a year or three times a year. And again, if you're smaller and that's a big part of your business, hey, it's very easy to let that part of your business go because you're too busy, but if you can put in even 30 minutes a day in the morning just following up with people and if wholesale is a big part of your business, that can be a big driver, increase the CLP.
Tracy: 100%. Thank you for that because that's what I'm like mornings, get your stuff done and then the rest of the day do the other things.
Austin: Yeah.
Tracy: Generating activities in the morning, including following up.
Austin: But it's hard. It's hard. And I struggle with it too. Like it's everyone does it. I don't necessarily, I have to make like non negotiable times with myself that…
Tracy: Yeah.
Austin: … even then I still negotiate with myself, so.
Tracy: I know. Exactly. I'm like, well, I'll push this off until later. Austin, this has been awesome. Thank you so much for being here. Where can everyone find you?
Austin: So there's basically two places you can find me. If you want to hear more like podcasts, I release a podcast every single week about kind of more advanced traffic and conversion strategies for e-commerce businesses. It's called the E-commerce Influence podcast and I, you know, I put a lot, I put I think I'm at 201 episodes now. So, it'll be 202 or something like that. So you can find me there if you want to listen to the podcast. If you want to get coaching and help growing your business, you can head over to jointhecoalition.com, which is my coaching community for e-commerce businesses and marketers.
Tracy: Awesome. Austin, thank you so much for being on the show today.
Austin: No problem. Thank you for having me. I really enjoyed it and I hope everybody, yeah, feel free to reach out if you guys have questions. I really enjoyed the conversation.
Tracy: Amazing. Thank you.
Thank you so much for listening to today's episode. It's my mission to help thousands of creative businesses, inside and outside the jewelry space, use their creativity to make money. Make sure that you're subscribed to Thrive-by-Design on iTunes, Spotify, Stitcher and wherever podcasts are played. We would love to hear what you think, please rate and review the show. If you're inspired, please share this with your friends. Here's to seeing you flourish and thrive.
