Another ex-Amazonian gracing my virtual studio. If you sell consumables, this is for you.
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In this episode we discuss:
[0:00:00] George Reid: Welcome to It's Always Day One. My name is George Reid, a former Amazonian turned Amazon consultant. Each week on the podcast, you're gonna hit industry experts. Brand owners on Amazon employees share their answers to the basic yet fundamental questions. You should be asking yourself about your Amazon business. Now, let's jump in. Good morning, Charles. This evening. Time for May 1st and foremost. Thank you very much for coming on today. I know. It's obviously been a bit of a tiring week for you, given the state of your I under I at the moment looking pretty disgusting. But thanks for coming on. You want to give us a quick breakdown off of how we know each other? I guess. And then why? Why people should listen to the next 30 minutes of you operating away.
[0:00:45] Charles Instone: Yeah, sure. So e think that we met when I was tutoring you our way. Amazon worked together for a couple of years. I'm not sure whether it was good or bad for our personal development, but yeah. Welcome. The FDA team who is great fun learning a lot there with a lot of different vendors. Um, yeah. It was a good time Thio, me and the rest of guys. That was a
[0:01:15] George Reid: Yeah. Yeah, absolutely. And obviously ruled. I think you were the first person toe set, the wave of people leaving on day then then and I left. And then a number of people have since followed. Um, but in the last couple of years, what have you be? What have you Just for a bit of a background for the audience? What have you been playing with? Largely in terms of what space? Yeah.
[0:01:38] Charles Instone: So I left Amazon and went Teoh, a consumer tech start up called Catholic Sports, who developed a new product market player, which was like a GPS tracking system for sports. I did a stint, mayor, and then after a while, wanted Thio really dive into the business end of the start up World is being, you know, one of the first employees or founder eso joined the drug store which is a health and well being. Retainer s 01 of the first of its kind. In terms of the products we sell, the curation we have and how premium we are. One journalist described us as the net A porter off well being which I think was a great compliment. But maybe she didn't know God was so on
[0:02:31] George Reid: that. Journalists, if we pull on that string a little bit mawr eso when we talk about well being, were largely focusing on. Is it? A particular niche is a particular category is I know we mentioned before. It's all consumable products, but for you it's more categories than what I initially thought,
[0:02:48] Charles Instone: right? Yeah, exactly. So I mean, we really break down wellness into several different verticals. So from sleep, stress, energy, focus, relief, health, intimacy and beauty basically are pillars. So we think these Airil the pillars off well being really Andi then we have curated products in the in each of those sections, most of them big CPG products.
[0:03:15] George Reid: Mhm on. If we think about you mentioned, they're curating. And that's a big term I've seen bounding around recently with regards to content. Andi obviously the other one being creating. So what? What content do you think Brand should be creating a zwelling curating when they're starting out. But I know you're working with startup brands at the moment, as well as some who have obviously got some funding. What do you think they should be doing on that content piece on the create and curate?
[0:03:45] Charles Instone: Quite simply, I think, uh, meaningful or whatever that is in your sector. You know, we see brand a lot of brands across the space and the ones that we use a lot of the material off on dwork with closer are the ones that really nailed down what their story is and what their content is actually gonna mean. Some have amazing shoots, and the products look incredible on the picture's incredible. And the blocks there, right, you know, really well written. But is it really what the consumer wants to read in their demographic or wants to see? Um, so wear working with people using the assets were given from the different companies from, uh, you know, shoot stuff. They really think the deployment to understand what their demographic one e think it's the best answer were specifically, what they do is dance of whatever demographic urine.
[0:04:43] George Reid: Yeah, I've been doing a lot of reading on that topic at the moment as well, about doubling down on exactly who your avatar is on exactly what they like. What are their trigger points? What are they reading? What are they listening to? What are they watching? Where they're consuming content. Do you see quite a lot of brands? Perhaps skipping over that avatar creation on just going out and going will create great visuals, but they haven't quite decided who the visual is for. And that's quite a common common mishap that many brands make.
[0:05:16] Charles Instone: Yeah, a little bit. I mean, I think every brand thinks that. I think it's sort of the local one of one of marketing, so everyone tries to understand what their demographic is, but I think very few stick to it. You know, I think they're sent products toe whatever influence have reached our whichever one of the biggest following instead of really nailing and, like, you know, knowing exactly which influence the stand within their demographic, knowing exactly where the Democratic live, what they dio. So, yeah, I mean, sometimes when it's a start, it's hard to really stick to that demographic because you'll take any opportunity for growth. Eso it's you know, it depends where you're at with the company's. Some, like some of the companies we work with very hard, hard, fast with who they deal with in terms of influences, podcast magazines and stuff like that. And some, you know, will take out any opportunity, Uh, they get I don't think there's any right, But I think if you can stick to a demographic on, really, uh, sort of nail that and infiltrate it and make sure that your game or your brand advocates from within that, then you're going to see some really great long term growth.
[0:06:27] George Reid: On what sort of questions would you be asking yourself if you're that hate the term solo preneurs? Or if you're a mini team? What what questions are you asking to come up with that demographic to begin with? Because I've certainly seen the questions just never be asked. And that's often because they're not quite sure what to ask themselves, right? Is there anything you would be going? This is what you should be asking. Here's how you should be answering. Here's how you speak. Writing all this down or putting all this down on a white board is really kind of device there.
[0:06:58] Charles Instone: Yeah, I think we're best advice would be. Really look at who your competitors are. Start their, uh, see who's buying them work backwards from that and say Okay, well, this is the type of person we are now. Understand that there's a majority male female started maybe agenda split or an age. It is a good is a good place to start on. Then start working with other brands that on in your niche that might associate themselves with. So, for example, for us, the main one is Lululemon, you know, in our space at all. But a lot of our customers are female on bond in the sort of 25 to 45 range and purchase Lululemon so you can start associating yourself with other brands outside of your niche. Aunt, start building this almost caricature off the person up from what they eat, what they drink. Who they what they read what influences they associate themselves with what brands they associate themselves with. Especially what brands do they advocate? You know, you might buy you a lemon, but you might never speak about it. Okay, that's a great customer. But it's not gonna be in Africa yours either, Likely so they're sort of things I'm looking hard started, definitely started gender and age and just go down on
[0:08:17] George Reid: is this? Is this a continuous process? It's not something that happens. All right, Day one. I'm starting a brand. I'm just gonna do this. I'm gonna put some ideas down on Lululemon's Great on. That's awesome. And they're gonna be males who are 24 to 34 on my job's done. Goodbye. I've got my little one note down and I could walk away from it. Now, is this something that's happening every month, every year, five years? What your thoughts?
[0:08:42] Charles Instone: The likelihood is that you'll get a ballpark sort of area, right? Maybe first time if you've got it, bang on first time you'll be the first person ever that built a company off a spreadsheet and actually managed to execute it. So, yeah, I think this is something that you really get to know in year one of your business. Um, I don't think it changes too much after that, if anything, that you'll get more deeper knowledge. But you're also come away from that demographic a little bit, as as you get bigger and bigger and bigger. More and more people are buying, so you'll start having secondary and tertiary demographics that you also target um then year one, I think, is gonna be the eyes gonna be the time where you really hold in demographic vision
[0:09:30] George Reid: on then you're layering. We come back to the content You're layering your content around that vision. So you're looking at for yourselves what Lululemon are putting out what was working really, really well for them what people are engaging with for Lulu Lemon on all their platforms. And then you're gonna care, What can we do that similar, which will resonate with this audience as well. Kind of making Lululemon an influencer. And they've already got a touch point with your audience. Let's look to replicate it. Is that something you'd advise as well Or how you can utilize Not necessarily an influencer, but a platform like that.
[0:10:05] Charles Instone: Yeah, I think every part of that demographic shows you where you should be talking, you know? So from the age group on the gender. Okay, so if it's a, you know, under 22 year old, then you know your platform slightly to be like tic tac and instagram right on bond plus 45. Likely to be Facebook so you can even go down to the platform in which you're distributing this content and then, you know, look at the brands that they do associate themselves with the food and drink companies that they use the hotels, they stay out, look at that and see what content they're putting out. Try Thio, get news associations with them, try and even replicate the content to some degree as well, because, you know they like it. So you can base a lot of your content off that I mean, we know that a lot of customers shopping places like lemon sweaty Betty. So I mean, e quite an easy thing to go out and find a little lemon sweaty Betty ambassadors and kept them on board for you. Eso That's a simple win, you know, because then you can distribute that content to people that will likely like your stuff as well.
[0:11:12] George Reid: Andi, If we look at the influence of peace little Bit Mawr, how important do you think influences are for a CPG startup? And how early do you think they should commit to that kind of influence? Their marketing game influence
[0:11:29] Charles Instone: is a really tricky thing, just by the definition off it, like what really is an influencer. And how many of these influences actually carry influence? You know, you see on their story and judged by what they say, e Think what it is good at good for is the the awareness piece. You know, if you have the budget to give out a lot of free stock, you could get seeing quite regularly within 90. So, you know, identify the influences within that niche, send out hundreds and hundreds of products and you know, there's gonna be a broad awareness within that reach that you exist. That's that's really belong whether you're going to get sales from. It's another thing. That's really that's really don't your family. So that sort of stuff, um, but if you can get broad awareness from influences, then that's great. I think any sort of, you know, financial payback from them. You're likely going to struggle from our friend. We never pay influences. Um, it's just the unless you get these really like unicorn influence that genuinely have influences Super, super expensive. You're not likely to get on our way back from them on when you pay out something like that. You know, you always want to know I but largely influences just awareness piece. You know, if you wanna get seen, I could give a trip. Trip drinks is a great example. In the UK it's a CBD drink. Andi. They've gone from nothing Thio having 20 30,000 followers and every influence here in London is talking about. And that's just because you know their their products quite cheap so they can send a lot out. But they do send a lot out. You know, hundreds of months of units on bond. Each day they have three or four influences posting about that's when it works. When it's at that scale,
[0:13:25] George Reid: does it become a play there, then, of like, how deep your pockets? How How long can you consume the cake for? Until you start getting a reward on bond, it must be very difficult to get a data point on. How rewarding is this? Unless you're using, um, some sort of code or influence a code or something like that, or a bitterly link when the influences profile, Is there anything you can do there in terms of your operational set up to G. O right? Well, influence A has got this bit Lee link and we know that they're driving x number of sales, and it's cost us this so you can get some data behind
[0:14:02] Charles Instone: it, right? Yeah, yeah, absolutely. I mean, noise give discount codes the influences. You can always track them with your links. So, for example, a lot of people now on Shopify there's a thing called profession, which is quite good if you can't get onto the bigger refer their programs like web games and stuff like that. So, yeah, I mean, you contracted by that. But if broadly, what your goal is is awareness and I really want to drink. My advice would be really stick with that. It don't get caught with seven immediate return off. This, you know, budget that you're going to send products out 150 influences. Don't judge it until after you've done that. You might not see any results in attraction until the use entity in the 95th influence or something like that on, but it is more of a mass effect. I think the best way to track it is any awareness tracking so you can have things like how your search console quite simply, like how many people have searched your brand name. Um, if you're a drinks or food brands, you could do sell out in a supermarket, right? So where they're actually gonna purchase drink? Because they're likely not going to go into your store. Your DTC. So if you're a drink or or chocolate part of whatever. So, yeah, I mainly look at awareness tracking in terms of, like, search for even there. Number of impressions on your social media page number follows up left there because really, this is an awareness play. Not really. Said was one
[0:15:34] George Reid: Andi, is it awareness because you're just focusing on the top of the funnel knowing that if you put enough, if you get the input, ultimately you're going to get the output on bond? You've then got Obviously, we're probably going further into this kind of topic now. But you've then got the piece off, Okay? If we can put 100 people into our funnel, we know that through that awareness, we can get 10 people of the land on our site and we can get one person to buy or to people to buy on. On average, one and two people buy from us again So you know that you could go. Well, I can just continue driving awareness because I've got this funnel in places that kind of mindset behind that.
[0:16:15] Charles Instone: Yeah, absolutely. I think I'm a big believer in if we use the final. An analogy is building bottom up. So really making sure that you don't have a leaky bucket. Basically, you know, your retention game is on point. You've got amazing email flows going out to your customers when they do purchase or when they sign up, How you convert sign ups, toe actually, touch is all that sort stuff. So when someone lands on your website or, you know, see your product, they buy it on. Ben, you have a really great, like, warm audience flows on your social ads and stuff like that. And then you put the influences in. So we've only really just started doing influences. And, you know, we're two years old and doing millions of pounds of revenue. We've only just started doing it. Some people start law earlier, which is fine. That's completely up to them. But we really wanted to nail that, uh, sort of audience integration. So gala demographic, right? And then start getting our retention flows done properly before we start doing these bigger awareness place. Um, but yeah, once you know, works, you can You can go wild on influences,
[0:17:28] George Reid: I think. Yeah, that's a really good piece there. It kind of comes back to a point I've made time and time again. And when do you start your advertising and Amazon and people can be very early jumping the gun and going I'm just gonna throw it even though the listing shit. So it's not gonna convert. It doesn't make any difference how much traffic you get. Now, you make an interesting point there. So many people perhaps don't know what that demographic is. Don't know what the audiences don't have the operational pieces in play. Like you say, that email flow, that retention strategy. Um, that percentage of people that are signing up leading to a purchase said don't have those pieces of the puzzle kind of any or when the order before they start going. Hey, Mr Influence. Uh, we're gonna give you exercise that or were You begin to give you a grand for a few posts or we're going to go. We'll give you 10% on every sale you contribute towards. But they haven't got that kind of back end in order that I got the house in order before they're doing that, right?
[0:18:26] Charles Instone: Yeah. I think a lot of people failed to disassociate themselves from the numbers. So when they look at their web traffic and stuff, they see ex especially numbers. You know, one is the one on day. No, every visit on your website is equal, right? Because someone that is landing on your website is your demographic, Andi, Hopefully your whole name of having the website is getting more, more people within your demographic within your ideal space to your website. Now, if you're looking at this and you're you haven't optimized, you know, in your cable, your example, your page listening to that demographic or, you know, it just looks Shit. Um you're going to struggle on Dino, people look a conversion rate and go. Well, my conversion rate was 2%. Now it's Yeah, 1.5. My next in quality is not that great. Is that big difference? Well, yeah, is because think of all the other people have looked about this thing that might have come back. Okay, so your conversion rate might have gone down. We can we call down Day? What is the effect of that? You know, long term, if you're losing actually advocates that could have bought. So that's why I really recommend getting everything in shape first. Because if you can, if you can convert an advocate, you know, something that is gonna actually really love your ground on. But the thing that failed to convert them was because your website copy didn't speak to them or it wasn't convincing you had stock images or you have, you know, something rubbish like that. Then that's a massive, massive, massive Miss. You should not be directing any sort of mass traffic to your site. If that's the case. Yeah,
[0:20:02] George Reid: I think that's your your point There about each visit different. They're not equal on bond. Are you not converting those advocates or are you not converting transaction because you've got the transactional people who are going to come through barking you want thank you very much. And then maybe you never see them again on that is one person. But that is not the same waiting as an advocate who didn't convert because the button was in the wrong place or the wording wasn't quite what right or the images wrote low resolution on Do You Just lost someone who will buy from you every month? Who will tell their friends about your product on will happen to buy Christmas gifts when it comes up to Christmas for friends and family of theirs on. That is not just the one number on the spreadsheet. It's 30 40 50 transactions or customers or whatever it happens to be, right?
[0:20:54] Charles Instone: Yeah, absolutely. I think you know people when they're running their start, obviously revenues revenue, and you have to get your daily revenue each day to get past. You know there's gonna be a large focus on what your revenues are, but I'm also not saying that advocate to get that sort of picky person because they're not. There are early adopters, But if having the wrong picture or wrong copy is gonna be the difference between game, no, don't risk it. Just just make sure just make sure that you're listening or your website looking good on DPA particularly suited to that demographic. You know, if I started a gym wear brand aimed at women aged 25 to 35. Okay, I might have an idea about what they want. But ask someone in that demographic. Does this look good to you? Because my Logan look good. My products that my designs look good, you know, because my website look appealing Thio. Yeah, just ask. I mean, you get a very quick sense of whether it's right or wrong just by asking people in that demographic and we ask customers away the time you know, our best customers how we're doing what our customer services like whether they find it easy shopping on our site because they are the advocates for us. But, you know, we want the constant feedback. But
[0:22:14] George Reid: what are you doing on a A natural physical day to day? Like you said day, you're asking them. How are you asking? What are you emailing them? Are you ringing them up? Were you sending them attacks? Do you dropping into their Facebook messenger? What are you doing? A physical presence for that?
[0:22:29] Charles Instone: Yes. So I mean, one of the newest ways we're doing now is way work with Fabio. So email provider on, we've set up flow so that every time someone is on the fourth or fifth order on automatic, notification will go through to one of the founders, one of the founders emails from with whatever we're researching that month, you know whether it's customer service, whether it's the products, whether it's, you know, it might even just be to get them to a friend or whatever. Um, but we've got that flow set up. We've also do quite a lot of feral marketing, So basically, when someone buys on our site, we give them ВЈ10 off and they could give a friend ВЈ10 off, basically, and it used to be ВЈ5 but we're getting no traction on that right on. We know that if you you know if to acquire a customer and Facebook's gonna be between 10 ВЈ20 depending on what you know, what your cost back position is. More product. You are largely in the CPG space, so we know that is largely going to be the same there. An advocate. So if by referring a friend you're getting to the advocacy stage, you're coming closer to the drugstore on Do you also introducing a friends that's like a warm lead, right? If you were doing B two b sales, that's like a warm lead. If your friend introduced you something that's far, far more powerful than any Facebook ads way saw it take off a ВЈ10 each. Some people will do fine. ВЈ5 each. Some people will give three product. It completely depends on you. But what we found is that it didn't work. And the only way to find out if it doesn't work if you talk to your customers. So, um, this little email flow thing we've got set up with Flavio notifying founders Thio email Thes customs individually and personally has worked super wealth, and we also actually, quite interestingly send out thank you cards like a written thank you card Thio customer that purchased on their second purchase. So we know that you know, the light ahead of you by a second time is a lot lower than the likelihood of you by a third time if you bought second, right? So getting a customer from 1 to 2 orders is a lot harder than getting them from 23 So what we're trying to do on that second order that is really nailed them into a long term customer relationship, the 1 to 2 orders. That's more like email, marketing and stuff. There's a lot of people that will buy on the side once will never buy again. You know, probably seven people do that, but we know if we can make us person. That's for the second time to be a long term. Use it with us, then you know, LTV goes out the window, you know, it's infinite, you know, they will shop with us forever. And that's what the data show on the back end is. Once you brought three times from us, you're not leaving, uh, from getting them to the orders. Really.
[0:25:31] George Reid: I think that's what's great about that is you mentioned data there and you know what your job is? Your job is very, very clear because you've got that data to go once they've made that third order, we're doing really well here in a strong position. We want to get them to that third order as quickly as possible. So if that means that we've got personalized written cards for the 1st 1,005,000 people until we can find amore efficient way of doing it on but could be continuously scalable, I don't know. Or if it means dedicating ВЈ10 or what is essentially ВЈ20. If both the new customer on the existing customer use that ВЈ10 referral, so be it. But the data allows you to do that, and that's a very important note for everyone there. Three. The other interesting one is that ВЈ5 a ВЈ10 jump on that continuous feedback loop that you've got where your customers, which gave you the idea toe, raise that number and the Facebook one is really interesting because you've gone well. Actually, it's gonna cost is 20 quid to get a customer. We know that our customers typically going to spend 30. I don't know whatever the numbers are, so we're happy to spend 20. But we could have a ВЈ20 really, really warm customer from a referral on someone who's they're going to get a second purchase because they've donated 10. They're going to get 10. That takes him closer to getting that second purchase, right, because you've got 10 quid and credit sat there and you then know what if we get into two is gonna be very easy to get into three. So that whole flow is is a thing of beauty. Onda Very well thought out of just how do we get this fly well going? And it probably what triggered it was just that 5 to 10 right? That got that. Got the ball rolling, right?
[0:27:20] Charles Instone: Yeah, Exactly. And way saw that revenues from our federal program went up. I think it's 4.5 times by just doing that, you know? So it's really taking a boost, and it goes, like to take it back in. The conversation, I guess, is not every kick is equal. We know that someone has purchased on our on our study is a more qualified leads that someone hasn't by definition, right? So then then reflect a friend. One makes them in Africa, but to they're bringing in qualified leads. Okay, it's not gonna be anywhere near a scalable with something like Facebook. Are you know where you can reach millions of people today if you really have a budget? But the quality of traffic is far, far superior, right? Foster area on. I think having you know, growth is really just having a delicate balance between, you know, high growth, highly scalable activities on not scalable it all activities. The referral program is scalable. It's automated, but it's not quick, right? Like you can only scared as quickly as a number of people that previously purchased on your site. But that could quickly gather pace. More and more people are coming through. So then you know it's our job to top out. There was from other marketing sources on seeing which which customer from their sources end up referring their friends and they sort of, uh, speeds up the fly with a little bit.
[0:28:53] George Reid: Yeah, I guess it comes swings all the way back around to that influence a game of were driving top of funnel. If we know we're putting the inputs there in X percent are gonna become a refer a swell, which will further accelerate that referral program. Now, we've talked a little bit about repeat purchases, but another interesting one is basket size. Is there anything that you guys have been doing at the moment to drive up the value of each of those baskets? Um, that would be kind of keen to divulge into a little bit
[0:29:24] Charles Instone: Yeah, I think any of these, um, quite hard. I mean, for us, we've introduced a few things. Try and get get higher. One being like bundles. I think that's really the bread and butter. Whether your brand or retailer. I think a lot of retailers miss out on yearly bundles, you know, they run them a Christmas, but don't don't really do it any other time of the year. E think that's a really great way off increasing basket size, especially if there's on the product listing. Um, you can then say, Oh, this products actually in a bundle is well, you can actually drive people that would have bought that singular product because obviously, the argument against Bundle is that people would just shot bundles and they wanted they can't ever bundles that, truly driving a movie up. Um, there's obviously the plug ins you could get and stuff, you know, increasing it within cart. But another thing we did, a za retailer was actually introduced. Cheaper products. Um, so a lot of our product average order average prices probably about ВЈ35. So how would you increase, you know, having to ВЈ35 products? That's quite a lot. So how can you increase it? Mawr slowly, basically. So, yeah, I can I can I get you to buy ВЈ35 products and ВЈ8 product? It's probably a lot more likely than 1 to ВЈ35. So we did that. And then, like I said earlier, as well as the more orders people have put in, the more likely they are to stay, but also them or they spend with us. So the average order value of someone that has brought three times, um or with us is two times that has someone has bought one time. So
[0:31:17] George Reid: average order value off that hosts to purchase. So two plus
[0:31:22] Charles Instone: three patches and warrior is double If someone just purchased the first time with us, so say it was ВЈ40 on your first purchase is ВЈ80 on your third. Oh, yeah. So
[0:31:34] George Reid: that's really interesting
[0:31:35] Charles Instone: is actually a lot of upsets come within the email and education flows. So once we have that customer, we're telling them about other products on making it automated. So, you know, if they bought x products, then we could tell them Oh, actually, where this product also is really well about. It doesn't all have to happen on the website. You know, I think that's where a lot of people feel that increasing average order value comes, but it's actually once you have, that customer can educate them to spend spend MAWR with your company. E think pitching to those people is a lot easier than pitching to a new person. Basically, Uh, because they're already bought into your products.
[0:32:15] George Reid: Yeah, I completely agree that, and I get another one. I know there's been many kind of bundle subscription businesses set up in the last few years. Those whether introducing samples and that could be another cute little add on a swell, I think, particularly on Amazon, if we first time we mentioned it today. But introducing ah sample of a product, particularly now I see so many people trying to pitch the 24 pack of protein bars on that I owe my my conversion rates low. Well, when did you ever go to the supermarket and buy straight out the back 24 for protein by never tried before. Sometimes you kind of got a gobble the margin a little bit and go, We'll go for the single will go for this just to kind of get your foot in the door on. That could be another one as well to kind of increase the bundle the size. Sorry, but I like the idea there of when you've got mawr ability to customize on that product page. Having the this is part of a bundle, you can get the bundle here on Amazon. The equivalent, perhaps, would be something inside one of your images or one of the A plus modules at the bottom where you can cross sell. You could make it clear that there are bundles available, but the one thing I want to talk about a little bit more with that those educational flows on th
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