Bonus Episode: How $1M Brands Can Become $10M Brands

Resources:

• Connect with Chase linkedin.com/in/chaseclymer
• Connect with Andrew linkedin.com/in/andrewchristensenjones
• Provide a better post-purchase experience go.route.com/fast-demo
• Register to the next webinar about the Brand Scaling Framework carthook.com/webinar/building-a-brand-scaling-framework

Transcript

 

Chase Clymer

Hey, everybody. Chase here. Just letting you know, today's episode is a bonus episode. I was on a webinar last week and I walked through the brand scaling framework that we use over at our agency, Electric Eye. I thought it was a pretty fun conversation. So I am going to start putting these as bonus episodes on the podcast here. And I hope that everybody enjoys it. Stay tuned.  I talk about how million dollar brands become $10 million brands. I hope you enjoy. 

Andrew Jones

Welcome everyone. As anybody who's already here, we've just been riffing. So obviously, this is going to be a fantastic, fantastic session today. Just quick, quick intros. But as the title of the session suggests, today we're going to be talking about everything about scaling an Ecommerce business. Specifically how brands can 10x their sales by setting solid technological baselines, focusing on data, cork APIs, and scaling strategies.

In a second, I'm going to introduce our guest, which couldn't be more excited about. But quick intro with me, I'm Andrew Jones. I run the marketing function here at Route. And I imagine everybody who's here today, or hopefully most people, know what Route is. But if not, Route is the premier post-purchase experience platform for online sellers. We focus on customer engagement, package tracking, shipping insurance, everything like that. And we've had a really, really interesting last few weeks.

A lot of fun product enhancements. We've launched some new products, a completely revamped package tracking experience. And the best part of it, it's free forever. So if you haven't, head over to route.com obviously after this. And if you haven't had the chance to use Route and you want to, for anybody who's here today, we're giving away 100 bucks to anybody that gives it a try. And it's go.route.com slash demo if you're interested again, after the session, of course.

Let's get into the good stuff. Today we have Chase Clymer. So Chase, for anybody, again, I think a lot of people know who you are, but Chase is the co-founder of Electric Eye, where he and the team, they create Shopify powered sales machines, specializing in strategic design, development, and then marketing solutions. They have an incredible track record. They work with less than a dozen brands at any given time. And some of their notable clients are brands like Westside Barbell, DermSpot, Black Keys, Camp High. I could go on forever.

To date, Chase and team, they've driven tens of millions of dollars in attributed sales for their clients. And if anybody was here in the beginning, we were talking about podcasts. So if running that agency wasn't enough, Chase is also the host of Honest Ecommerce, a weekly podcast where they provide online stores with honest, actionable advice. 

So if you haven't already, go listen. In my opinion, it's one of the really good resources for Ecommerce brands today. And rounding everything out, basically, Chase knows his shit. And I'm stoked that we can be here today to talk about scaling businesses. Chase, what did I miss? 

Chase Clymer

I think the only thing you didn't touch on is that I'm a bad golfer. 

Andrew Jones

You're a bad golfer? Okay.  

Chase Clymer

I'm trying to get better. That's been what I've been working on this season. 

Andrew Jones

Okay. Well, there you go. There's a fun fact for everybody. Chase is trying to get better at golf. Well, Route, we're huge fans of golf. So note it and we'll talk about that after. Yeah, let's get right into it. So the title of the session is very self-explanatory. Going from 1 to 10 million, how do brands do that? So setting the stage here, Chase, how do Ecommerce brands scale from 1 million to 10 million? 

Chase Clymer

Yeah, let's just give them the answer right now so they can go and then they'll schedule a route demo. That's what we want them to do. It really comes down to data, everybody.

It all comes down to the numbers. And there are specifically 3 numbers that really drive this. You can also just relate every other KPI back to these 3 numbers. And we'll dive in a bit more in a bit about what those KPIs are and why they matter and what's the magic behind this math formula we're going to talk about. But I believe that we weren't just going to talk about how $1 million brands go to $10 million brands.

There's also, how do you get to your first million? We're going to touch on that too for a little bit as well. Don't want to leave the people out that are the dreamers that are looking to get started.  

Andrew Jones

So let's note that for later. Data. And I'm really excited to get into your framework, how you guys have really dialed in the scaling formula. Quick question again, with setting the stage. Scaling is completely relative. Ecommerce spans every single market, industry. So product, market, teams, timing, it all plays a part in scaling. But at the end of the day, knowing when to scale is kind of the thing. 

When are people ready to actually do it? When are brands ready to actually do it? Timing is crucial. So even if a brand is doing a million, what are some of those key indicators that you have seen that demonstrate that a brand is actually ready to start scaling, to start building up those operations?

Chase Clymer

Yeah, this is a great question. So I'll try to give some really just straightforward specifics. So the first is, imagine that you just go viral and you're selling twice as many products tomorrow. Does your supply chain support that? And most brands are going to say no. And that's fine. But that's something that you're going to do. That's one of the main crucial things that you're going to have to figure out before you go down this journey. Another thing is not just products but processes.  

Can you fulfill twice as many orders? Can you fulfill more than twice as many customer support inquiries? Do you have the people in place to support that? Is your infrastructure strong? Is your team large enough to support this new growth? So there's a lot of stuff that happens on the fulfillment and the product side that needs to be in place and stress tested before you start really turning up the gas with marketing.

Andrew Jones

When you say there's things that need to be stress tested, obviously, we're in an interesting inflection point in Ecommerce with COVID happening and Ecommerce is blowing up in general.  What have you seen as the main issues people have run into? Is it a supply chain? Is it people? Is it inventory? 

It could be anything. But as we're in this inflection point, a lot of brands are seeing that they're selling more just by nature of the world we're in right now. Has there been one or two main issues that you have seen brands come up against? And maybe the things you mentioned. 

Chase Clymer

Yeah. It goes back to the same core issue of just an overarching strategy. So I'll probably burst the bubble of some young entrepreneurs here. A million dollars a year, Ecommerce business isn't that big. It's like 1 to 3 people. It's not a huge operation. It's very scrappy.

And they're usually self-funded and people are wearing half a dozen hats at a time. And what is a commonality that people are struggling with? COVID didn't make it any easier. All the stuff with iOS 14, 15 privacy, that's not making it any easier. The fact that it is almost twice as expensive to advertise on Facebook today as it was 2 years ago doesn't make it any easier. 

It's the fact that these people are building businesses that they're really passionate about solving their product that they're putting out to market is solving a problem. And they're passionate about solving that problem for their customers. They might not be a data analyst  or an email marketing expert. Or they understand how to develop  Shopify themes with Liquid and Ruby, which I don't even know how to do. That's why we have Mike. There's all these layers of expertise that come with the technical side of Ecommerce that often these teams don't have.

And then there's a lot of noise out there of, you need to be doing this, you need to be doing that. TikTok is the new best thing. There's all this  stuff and it's like, what should you do?  Obviously, when you hit a million dollars a year, you have product market fit. No one's just giving away that type of money. They're not investing. 

That's a real deal business. But they don't have the  strategy in place to really be like, okay, we have to focus. Where are we leaking money? How do we improve those areas of the business? And then turn up the gas is what I like to say. But it's basically investing in marketing and sending more eyes to this thing that works. 

Andrew Jones

I know we're going to get more into that a little bit later on the data piece. And it comes back to visibility. Can you really see what's happening so much in Ecommerce, at least that I'm seeing and I wonder if you agree with that if you kind of touched on the trends? Everybody's doing this, everybody's doing that. 

I need to be doing this, my brand should do this. You're so much coming in saying these are the right ways to do it. Which at the end of the day, we've already touched on scaling is completely relative. It's personal. It's different for everybody. And so kind of jumping off of where we're at right now and taking a step back to what you said where it's a million bucks a a million bucks a year. 

That's totally. That's amazing. And it means you have product market fit, you're established, you're ready to go. But there's so much more upside. So taking a step back, even before that product market fit. Before that product market fit, when we're thinking about a solid baseline.

And touching again on what I was saying with trends and products and solutions and technology, there's so many things that an online retailer can use today. Thinking about a solid  backend, technological operational baseline. 

For you and what you've seen and the experience you have, what are some of those key pieces? And this can be technology, can be operations. But for you, if you were to go down a checklist of like what is a solid Ecommerce tech stack and operational flow? 

Chase Clymer

Yeah, I'll definitely answer the tech stack question in a second. I want to answer more about starting a business 101 type.

Andrew Jones

Perfect.  

Chase Clymer

Discussion. So a lot of people, they get caught up in these, like, have to buy a domain and I have to register my LLC and all this. None of that matters. If you have an idea that you think is going to solve a problem, go and try to sell it.

And this is across the board. This is Ecommerce, SaaS, a service. It doesn't matter. Go and try to sell that. Talk to real customers and get people to buy into that there is value behind what you're trying to sell. This is called consumer testing. Go and try and get information from your potential customers about this idea and sell it. Literally, the hardest thing is selling what you're trying to build. A logo can come later.

A website can come later, all this stuff, because you need to know that your idea is valid. You need to validate your idea. So that's the first thing you do. If you haven't done anything yet and you're thinking about starting a business, whatever it is that your product will solve for, go and try to sell it to people, get feedback on it and iterate upon it until it's the best that it can be. And then all those other things, you can slowly knock them out because those aren't things that truly matter. 

At the end of the day, what truly matters is that your product is solving a problem for a customer and they will literally give you money, not your mom, your brother, your uncle, like strangers on the internet will give you money for this product because it solves a problem. They see the value in this product and it solves a problem for you. So like do that first. And so once you've once you've validated your idea, I can give you some direction on the nerdy stuff.  

Andrew Jones

So I love this. And I'm going to interrupt you because I want to go a little bit deeper. I think this is  so often missed. It's crazy. And even myself when I'm thinking like I'm in Ecommerce, Route's amazing. But I want to start a brand myself. I get excited about it. And I myself can get caught up in the naming, logo, website, tech stack, stuff like that. So I love this point of business 101, validating a product and a need. For you, how have you seen brands do that in a creative way?  

Andrew Jones

Oh, yeah. So this is a great thing, go listen to my podcast interview. I basically only interview founders these days with an occasional subject matter expert or my partner. But you'll hear time and time again, how these founders validated their idea. And oftentimes, they were using Reddit forums, Facebook groups, going to farmers markets, and they were just getting real feedback from their demographic and using that to inform the decisions they made on not only their product, how they were positioning the product and the features and the benefits of that product. 

And also what the offer looks like and the valuation behind how they should sell it. There's a lot of really cool stuff there.  What you do at the beginning of the business is you focus  on talking to people that A, actually gave you money  for your product, and then B, the people that didn't find out why. 

And you keep doing that as a founder. You need to start solving these product market fit problems. And that's how you do it. And it's not scalable. And you have to do the things that don't scale to the beginning because that's the only way to solve those problems. 

Andrew Jones

I love that. I was reading yesterday, ironically at this point about the Airbnb story. And I think it has some definite crossover to what you're saying, where they're early I think. I don't know if they coined this or if that was just the title of the article, but it was like, do things that don't scale early to test. So the founders, before they ever had their Airbnb platform, before they had a logo or a real brand or any of the  technological pieces that would turn into Airbnb,  they set up a few of these  rental places and they went and stayed there themselves.

So like, does this feel good? Does this feel right? Would I pay for this? And they tested with a couple other people. And obviously that does not scale. They can't do that forever. They can't stay at all their places. And, you know, it's not a process that works long-term, but that was how they started validating. Is this idea something that people will pay for? 

AKA, will I pay for this? Do I like this experience? So I think that's fascinating and something that so many founders overlook. So I think that's some really, really solid insight right off the bat. Should we talk about some of the nerdy stuff now? 

Chase Clymer

Yeah. 

Andrew Jones

Validate your idea and do the things that don't scale. Find out if people will pay for it. And if they won't, why not? And just really feel good about your product. I love that. So some of the nerdy things are that you validated that product. 

What are some of the things on the technological solid backend baseline that brands need to have in place to even set themselves up for that initial success that then will lead to the 1 to 10, the 10 to 100 million type scaling? 

Chase Clymer

See, I'm going to double down on what I said earlier, but then answer the question. I'm going to do it two ways. The first one is none of it matters. You can change it down the line. You're going to make mistakes in choosing stuff. And honestly, with all business, making a decision is more important than making the right decision.

Any entrepreneur will tell you that.  That's actually done this a little bit. So don't be caught up on WordPress vs. Magento vs. Shopify,. None of that really truly matters. Just use something and then again, just go back to selling. You're gonna have more problems with marketing than you're gonna have with anything in your tech stack, believe me. But if you want my opinion as a Shopify fanboy and consultant and investor, Shopify is awesome.

Andrew Jones

Yeah. 

Chase Clymer

Just choose right the first time and just build your Ecommerce business on Shopify. Also, a Klaviyo Gold partner. We love Klaviyo. Definitely get Klaviyo set up from day one. As far as some of the technical aspects of it, build out your Facebook pixel and get that installed the right way. Obviously, there's some weird stuff going on with what data you can and can't have. But if you're building something from scratch, get your Facebook pixel in there from day one. At least it's tracking whatever data it can track down the line, you can use that however you can use that. 

Make sure you get Google Analytics put in there. And in the back end of Google Analytics, make sure you turn on enhanced Ecommerce because it's not on by default. You want to have that turned on so it's tracking  the Ecommerce specific stuff on your Shopify website. Honestly, at the beginning, you don't need robust reporting. You can get away with what Shopify offers out of the box. For support, you're going to be your support person for the first while.  

You can really run a pretty lean ship when it comes to what your Ecommerce experience is at the beginning. You got a Shopify store, you have a decent theme, you got email automations in place, and you're answering your support emails, you're going to be better than 99% of the brands out there that are trying to start. 

What you should be focusing on after you get those pieces in place goes back to how am I going to get people to buy this thing? Because having a pop-up app or having a bundle builder, or having a free shipping bar, none of that is going to fundamentally change your business and solve the problem of where are these customers and how do I sell more products.  

That's not  going to do it. The app is never going to fix your business. It's going to be the strategy. So it's like, how do I go out and find these customers? What's your marketing strategy? That's what you should definitely focus on after you knock out these  honestly easy things. You should be able to get all that stuff done within a month. 

Andrew Jones

I love that.  And I think that's good news for a lot of people. Even brands who are doing millions a year, that should be very good news. There is not some silver bullet product. There's a lot of amazing products. There's a lot of amazing platforms, amazing features and all that stuff. But at the end of the day, it's like, you can move, you can shift, you can pivot, you can change as your business grows. Can you sell your product?

Chase Clymer

Yeah. 

Andrew Jones

And if you can, like that, nothing else matters. So I love that insight and something that you just touched on that I think kind of brings us to probably the core of what we're talking about is strategy. What is your scaling strategy? We'll kind of move past like, right, you have product fit, you're making money,  doing a million, million plus scaling strategy. And just like we've already touched on a few times, but I'll just say it again, it's completely individual. 

Your strategy for scaling an apparel brand is different from a strategy for scaling a home goods brand. So how can brands,  when they know they're ready to scale, have what they feel like is a good technological backbone, have a good operational process, feel like they're ready to go, how should brands go about developing a strategy that's really catered to their specific business? And then the follow-up question is, are there any blanket strategies that every brand should follow? Or is it always unique?

Chase Clymer

Those are both fantastic questions. So I'll answer the second one first. Is there a blanket strategy? Perhaps what I'm about to talk about. Literally. What we've done at the agency for the past five years is a variation of this concept of your website is garbage, let's fix that. And then now let's do more marketing. But it's evolved into something a little more poetic now that we call the brand scaling framework.

So a framework is just like an underlying system or concept. So we use framework instead of process or strategy because the minutiae change because of your customers, your products, your industry. All that stuff changes some of the outputs at the bottom. But this overarching framework of like, here's the math behind how you scale is always the same.  

So we've been doing this for a couple years at the agency. So basically, in our opinion, which has helped people make tens of millions of dollars, there are 3 KPIs that truly matter. So those KPIs, and these can be found in the back end of your Shopify store, are your conversion rate, your average order value, and your sessions. And I use sessions because that's the one that Shopify has in their backend. And all these are right there when you click analytics. 

And I like to look at this as a 30-day snapshot. So if you take all 3 of those numbers and you multiply them together, it gives you basically your monthly sales because that's how math works. This formula is extremely easy. So if out of 60,000 sessions, 2% of those convert at $75, you're going to get roughly $90,000 a month. So now this is when it gets more specific to you and your brand. So let's abstractly say that this is a scrappy startup and they've been selling their widgets for the last couple years.

And they've just used an off-the-shelf theme to get them this far. And what they know, they've installed and uninstalled half a dozen apps over the course of that time. Here's a bonus fact for everybody. When you install an app on Shopify, it injects code and oftentimes like a JavaScript call into your code. Then when you press uninstall, all that does is it stops the app from being able to access your store. It does not uninstall that code.

So if you rinse and repeat this over 2 or 3 years, you have now basically turned your codebase into spaghetti and it's got a whole bunch of extra stuff in there that's slowing it down. So we go back to our Scrappy store that's selling these widgets, their theme file is very slow. Their mobile experience isn't optimized. You can even drill in the back end of Shopify and compare desktop versus mobile. And they're converting at 5% on desktop, but just 1% on mobile.

That's where all the traffic is. There are some glaring opportunities here. So we can make an educated guess like, you know what, if we have a new theme built that's tailor-made for our customers and the journey that they want, and it's lightning fast, and it gets rid of all this bloat, it's only the apps we want. What happens if we go from 2% conversion rate a month now to 3% because we have this thing built the right way? So the traffic doesn't change.

But their conversion rate goes from 2% to 3%. Now their monthly sales shoot from $90,000 a month to $135,000 a month. They're not paying any more for ads. Nothing else has changed. They just have a better website. It's been optimized for conversion. It's fast. Then you run through all the rest of the numbers. So something that's easily overlooked by most brands is the opportunity at hand with your average order value, which is like an insane multiplier, especially if you are heavily investing in paid ads. Your average order value is super crucial.

Let's say that your business, you actually are doing alright and you've got an average order value of around, say, $75. But you have an offer that really crushes it in store, but you can't seem to make it work online because you can't find a bundle builder that will do it. It's probably a good idea to invest in a development team to build a solution that gives that exact offer exactly what you want. 

So if you can move an average order value from $75 to $101 and maybe you don't even fix the website. You just focus on that. That's going to change your monthly sales from $90,000 to $121,000 a month. I'm throwing out a lot of numbers here. Am I confusing you yet? Because I'm sure I am.  

Andrew Jones

No, I think this is fantastic. 

Chase Clymer

The last one is sessions, which is usually where most brands want to go first. Because they're like that, I heard Facebook ads are the way and the truth. Or TikTok seems where it needs to be or we think our brand is going to do really good on X, Y or Z. We're going to dump a bunch of money, all of our budget into paid ads. You can do that. And there's nothing stopping you from doing that. 

So say you focus all of your budget into doubling your traffic. Here's also a sidebar here. You can basically see decent returns taking your organic traffic and doubling it with paid media. You'll see some decent returns, which is anything after that when your market. 

Like your paid versus organic traffic skews more heavily paid. It's like diminishing returns because you're getting less qualified traffic. So doubling your traffic is realistic. It's also expensive. You have to think about what that's going to cost you. But say you go from 60,000 sessions a month to 120,000 sessions a month, right? 

At 2% conversion rate, $75 AOV, you're just doubling your sales. You're going from 90 to 180, right? Yeah, that's 100% improvement. But what if you did the work that we talked about in the first place, right? You fixed the website and you did an awesome bundle builder or an upsell or a cross sell. All those things can change. It really depends on your product. And you did all that work upfront. Now you're going from $90,000 a month to $365,000 a month. 

You've taken a $1 million business to $4.3 million a year by putting in the work that way. So that is the outline of how brands scale it. You have to think about it from a math perspective and put the effort in the right places. Obviously, it gets a little more challenging and detailed as you go down these specific KPIs. But a $1 million brand going to $10 million a year, they're going to be focused on their conversion rate, their offer, and how to cheaply get qualified traffic and increase the amount of sessions that come to their store. 

Andrew Jones

This is fantastic. I think this is so great because it's so simple. There's a million KPIs, there's a million metrics that an online store can look at. It’s so easy to get distracted. But at the end of the day, it's like you're just saying there's 3 levers. Conversion rate, average order value, sessions. 

So as you're talking, I was like, have 50 questions, but I'll try to simplify. So how many stores do you feel  like if you're just spitballing, you have a ton of experience in this space, how many stores do you feel like if you could actually look at the back end and look at the store are facing those bloated spaghetti style systems that really slow it down. 

Chase Clymer

I mean, I don't even have to look. I can tell you. Walk through this. If you're a founder, and you are like, yeah, we've tested 20 or 30 apps in the last four months to help us with our free shipping bar. Or like, oh yeah, our theme hasn't changed since we've launched. Guarantee it's got some issues with the code base. 

Do I actually need a new website? That's a question that you didn't ask, but I'm going to answer it. There's an inflection point where it is more work to try and  get rid of this bloat in a theme versus just, let's just build a new one that's tailor-made to your brand that's extremely performing off the rip. 

Because trying to get rid of this bloat is like pulling the thread on a sweater. It could just unravel and just become a whole nightmare. And then you've invested more time, energy and money, and fixing something when you could have just got something better, faster and for a better investment.  

Andrew Jones

For anybody who's listening right now, is there anything outside of just what you said, that anecdotal like, I tested 20 different apps in the last few months? Outside of anything anecdotal, for anybody who's listening right now, what should they go look for on their website? Is there a load time? Is there a speed time? Is there something that they just say, all right, go look at it after this. 

And does it meet this criteria? Does it hit this benchmark? Is this there? Is there anything really specific that somebody can go look at their store and say, Oh yeah, mine needs an uplift. Does it need a facelift or I just need something completely new? 

Chase Clymer

Well, here are two things that you can do. One is just in Google Chrome, you can go to Developer Tools and you can click on. There's a report bar and you can run the Lighthouse report.

And you can click everything off except performance. Just run that. See what it says. Do it in incognito mode so none of your cool Google Chrome extensions mess things up. But just see what that number is. Take it with a grain of salt because you can also go do this test on your competitor's websites and go look at the Kardashians lipstick website. 

There are interesting things all over the place about how these stores perform. But the truth of the matter is, the slower your website is the lower your conversion rate is going to be. The faster your website is, the higher your conversion rate is going to be. There's data to back that up all over the internet. So investing in a faster website that gets me as a consumer to the product that I want faster is always a good investment. 

So just take a look at what your performance is doing now and understand how much have we actually paid attention to what's going on with our codebase and how many apps we have installed and how often we were testing it. So that's one thing. 

Another thing you can do,  and I do this all the time, I go into the back end of the Shopify store, I click on the dashboards and I go to online store sessions by  device. And so when I'm in here and I'm looking at it by device,  you'll see mobile desktop and traffic. And if you click on Edit Columns, you can see the conversion rate. And then you can see the difference between conversion rate of mobile versus desktop. 

And if it's extremely different, and by that, mean over 1 or 2%, it's probably got a mobile conversion rate issue because your website is probably not optimized for mobile. So that's something you should consider, maybe hiring an expert to take a look at things and see if they can't fix it for you. 

Andrew Jones

Nice. That makes a ton of sense. And I think I keep going back to the simplicity of what you're talking about, where I think so many brands can get lost in the weeds. But going back to those core KPIs, conversion rate, average order value, sessions, really simplifies everything. And yeah, there's a lot of things you can do off of that. But it's understanding that baseline first.

Let's talk about more traffic. And then I want to get into a little bit of developing a strategy. So when you're saying  conversion rate, average order value, that makes sense. Conversion rate goes up, average order value goes up, you make more money. The huge issue is getting more eyeballs, getting more people onto your site. You said, we're great. It can double your traffic by investing in paid media. 

But yeah, that costs money. So two questions. One, when you're talking about sessions, are you talking about. Or what do you think is more important? Unique sessions, new people, or just total sessions, which would include people returning to your site? Because a lot of brands really focus on that return buyer. But that doesn't totally work for every brand who might be selling something that has a very high AOV and people aren't buying tons and tons of that product. When you're talking about sessions, do you look at unique things? Do you look at the total? Do you look at bulk? What matters more? 

Chase Clymer

We look at total sessions from just the snapshot of that equation that I put together. And you're right.I made it simple on purpose because this is a concept we're introducing to our brands that we're working with that are built with the best light bulb. They don't give a crap about what a conversion rate is. 

So you have to make it simple. You got to make it understandable. From this information, we know these are where we think like this, this is what we want to work on. Here's why. And this is like the assumptions that we all have together. So it's an easy way to educate people. To your question, though, how do we tackle the sessions element of this? So there's basically... You were correct in saying there's the retargeting element of it, the retention marketing, whatever you want to call it. So there's that angle. And then there's also prospecting or winning new business or getting new customers. There's that angle of it.

Brands that only focus on trying to resell to their existing customers and they're not growing, they're never going to actually. They might grow a little bit doing that smartly, but they're going to run out of steam because your customers aren't going to keep buying forever. And if you're not growing your customer base, you're not growing your business actually. And that's like a recipe for disaster. 

So the way that it splits on a paid media perspective is you're definitely going to want to invest more than 50% of your budget, I would say even 60 on top of the funnel, prospecting, trying to get new eyes on your business. And then the rest of it, like in the middle and the bottom, like hitting with the hot traffic there. So that's just like the paid media side of things. So that's one element of the session. And the other element is that retention marketing element where you actually have their contact information, either they bought before or they've given you their email or their phone number. 

And you bought a really solid strategy of reaching out on a certain cadence for just giving them valuable content or reaching out within certain checkpoints within their unique customer journey, again, with valuable content. So an example of those unique touchpoints would be maybe an anniversary of the sale or you sell a product that you know has now been worn out by a certain threat. 

After 9 months, whatever product you bought is probably out and maybe you need a refill. You can build all those automations out on that side of stuff. Basically, the sessions come down to the marketing element of things. You got to be getting more eyes back to the website. And just like an anecdotal thing is your email marketing and just the retention marketing arm of your business. So that's email, SMS, what have you. That should be responsible for at least 30% of your revenue. And if it isn't, your strategy is not working and maybe you need to retool it. I just said a lot of stuff really fast. Do you have any questions about that?

Andrew Jones

No, that's fantastic. So the 30% number, is that just from your experience that you've seen work better? Is that an efficiency percentage where it's like it's coming. If 30% is coming through this, that provides the opportunity to spend more and bring more eyeballs in. Is that where that's coming from? 

Chase Clymer

Oh, man. That's a good question. I don't remember where I got that number from. I want to say I got it from Klaviyo themselves, or I saw it on Twitter, which obviously, don't believe everything you read on the internet. But I can say from our clients that rocking and rolling are well above 30% of their revenue coming from their own channels, i.e. their SMS and email channels. 

Andrew Jones

Right. Well, and just logically, that makes sense. 

Chase Clymer

Yeah, it's easier to sell to somebody that's already familiar with you. 

Andrew Jones

Totally. And then the more you can sell, the bigger that percentage is, the more the budget frees up for that new traffic, which is what we're talking about. 

Chase Clymer

Yeah. And this is where  it gets confusing. You mentioned this earlier. It truly depends on your product. If you're selling $1,500 couches, I'm probably buying one and then I'm not buying another one. But if you're selling $10 ice cream sandwiches, and I'm addicted and you got me on subscription, I'm a giant repeat customer. They're different customer profiles. That's where the strategy gets a little bit different, depending on what is the product? What are the customers? 

Andrew Jones

Yeah. And I think to round out how brands go about creating a strategy that's customized to their specific use case. We've already touched on a lot of different ways. It's understanding those core KPIs and then those numbers, that data, that's going to tell you where you need to pull the lever. Is your conversion rate low? Is your AOV low? Are you not getting enough sessions? Those are just three areas that brands can look at and be very prescriptive with what they do next. 

So following up on this, I had one other question on brands that potentially get lost in the weeds of scaling and focus on product expansion versus new market, new eyeballs, new customers. How often do you feel like that's an issue where brands say, okay, it's time to scale, I need more products. So I need to up my inventory, I need to do my logistics, instead of 10 shirts, we need to start having 50 shirts. There's a lot that goes into that versus the idea of scaling for new customers. How often do you feel like brands get kind of stuck at that crossroads? 

Chase Clymer

That's a great question. And honestly, I'm going to not answer the question. But there was a fantastic interview that I did with Aviator Jeans or Aviator Clothing. I forget. But he did this. He expanded the product line without really consulting his customers and  understanding what it was. And I'll let him tell the story. Go listen to that episode. That's very fantastic from the mouth of a founder making that decision without data to back it up.  

Andrew Jones

Interesting. Okay. A little teaser. I love it. Give us 10 seconds. Did it go poorly? Did it work out? Was it just a learning experience? 

Chase Clymer

It did both. It's very interesting. It didn't work originally. Let's just say that. But I think it's just brands that are scaling without a strategy in place. Just throwing stuff at the wall and seeing what sticks. That's not a way to run a real business, let alone lead a team.

When you're getting that million dollar mark, you have a team and you have to have a true vision and everyone has to be on the same page. So just changing strategy and not being just true to the choices that you're making and trying to see them through is going to be difficult for people to have trust in the product that's on your side that are trying to see the same growth. 

So what I really mean there is it's not just your company. The jobs of everyone that's working with you is very, very tied into what you're trying to do here. So if every week you're changing the strategy or changing up how you're trying to grow or how you're trying to get to the next level, you're probably losing the confidence of your core team members, which when you lose them, the business might go belly up. 

Let's be real. So this is more of a philosophical thing. It's just like, own the things that you're good at and hire out your weaknesses. If growth strategy isn't your strong suit, find someone where it is. 

Andrew Jones

I completely agree with that. Too often, we try to do everything ourselves. And at the end of the day, it's like we're good at some things and we're not good at other things. That's okay. 

Chase Clymer

And this isn't even just an Ecommerce thing. This is just a business thing. People will build themselves a job all the time. And then they realize, like, I'm not a manager. I don't know. This isn't my skill set. And it's okay to admit that. And again, it's just do what you're good at, and then hire out your weaknesses. And I think that there needs to be a lot more honesty in that regard. Just because you started the business doesn't mean that you're a good CEO. That's the honest truth.  

Andrew Jones

100%. I couldn't agree more with that. So  let's jump into the final part of this. So scaling is happening. We have those core KPIs in place. Roof tracking is happening. They feel good about it. But testing is one of the key pieces of scaling.

Because if you're going to test your conversion rate or you're going to test bundling for your AOV or you're going to test different marketing strategies, just saying, okay, we need more sessions, this is what we're going to do and then leaving it  is a huge issue. So for you with all the brands that you've built and you've worked with, how can brands really go about scaling in an efficient way that involves a lot of testing? 

Chase Clymer

Yeah. So here's some more truth bombs. If you're a million dollar a year brand, your traffic probably doesn't support doing honest A/B testing. That's not enough traffic. That's not enough orders to get a statistically significant result. So A/B testing is all about a statistically significant result. 

And there's a bunch of resources online about this. When you do a test, it has to hit a certain threshold to be like, this is a true winner. So a million dollar a year brand or anyone under this, a lot of what you're doing is best practices and going with your gut and seeing what happens and you're not going to have too many statistics behind it. 

Go more upmarket and you do get closer to that $10 million a year mark, your sales volume is a lot faster and then you can get the data that you need. So there's that whole caveat there. Or the tests are going to take a lot longer than you think. So I'd say about $1 million a year, you can maybe do a test a month. Whereas Instagram was doing a test every day because that's how much traffic that they have.

Even down to every hour they were doing split tests. I saw this insane talk that the product designer at Instagram was like, yeah, we were doing testing colors and stuff on Instagram. And they could get a significant result in less than an hour just because of the amount of users and how much data was going through their software. But if you're doing conversion rate optimizations, you have to have a conversion, you have to have an order. So every order is what you're tracking. It's not necessarily your traffic. 

There are certain thresholds that you have to hit before the data gives you the real truth. But how are brands testing this stuff? The way we do it is Google Optimize. And we have just a laundry list of ideas that we want to validate or test. And then we get buy-in from everybody on the team. And then we put them out there and then we wait as long as it takes to get that test. We take the result, we implement the winner, and we rinse and repeat. A website's never done.

And you're never gonna be done working on it. Imagine if you had a retail brick and mortar store. And as you grew, you didn't invest back in painting the walls or retiling the floor because now your foot traffic has gone up 300% and your floors are ruined. You're going to be investing back in this store. That's how you have to treat your online business. It's your number one salesperson investment like it is. 

Andrew Jones

Fascinating. Well, and thinking back to something you said earlier, any decision is better than no decision.  

Chase Clymer

Oh yeah. 

Andrew Jones

Don't get lost in the weeds. And I think that applies perfectly to what you're saying right now.  I'm not getting lost in the testing depending on where you're at. It's honestly just being authentic and aware of where you're at as a business. 

Chase Clymer

I know a lot of consultants, all they do is A/B testing. And they're like, you're gonna have 9 losers before you find that one winner. And nobody talks about that. They just talk about the one winner that did this crazy thing.

Andrew Jones

Yeah, it can be so easy to get lost in the testing of it to say, can't make decisions until we know exactly what's going to be the right thing. And to your point, it's like sometimes you're not at a place to test that way. So for somebody who is for a brand that might not be at like the threshold of, we have. I love your point. If you want to test conversion rate, you need to make a sale. 

It sounds so simple, but it's profound if you really think about it. You can't test that unless you're really selling the product. So for brands who might not be in that place to do really, really good testing, is your advice like, just keep running? And you'll know when you're at that point of really testing. Because again, it's like the use case is completely different from a home goods store to an apparel store. 

So benchmarking is hard. But is the advice at that point to say, you just need to get moving, get going and make sure you're very aware of conversion rate, AOV sessions. And is it a gut feeling? Or are there benchmarks to say, okay, you need to be able to hit this, you need to be able to test this often? What's the recommendation there? 

Chase Clymer

And these numbers aren't hard and fast, but this is just some generic stuff. 0 to 1 million, right? That's your startup. And at that point, I think that you should be 100% focused on product and offer amazing customer support. And you can get away with an off-the-shelf theme. You can get away with a little bit of a lackluster experience. Do you really need to make sure that whatever marketing engine you're starting to build out is actually working profitably? 

And that's your main goal is like, I got to get sales. I got to get this thing going. I got to get the flywheel started. So I then can have A, data and B, a budget to play with as I move into the next phase, which I would say is like the $1-10 million phase, which is like when you're scaling, you're gonna need a budget to hire smart people, you're gonna need a budget to invest in paid media, you're gonna need to have data so you can make the right decisions. So all that stuff, you can't really do at that beginning element back in the startup phase.

So when you do move in. You're like, all right, we've got all this rocketing rolling. Maybe it's 750k. Maybe it's half a million. Who knows? But you're like, we've got all that stuff in place. That's fine. We're ready to invest in the brand. I think you should definitely hire a team that knows what they're doing to build you the fastest website you can get built with the best customer experience, which we lost over this entire time.

The website needs to make sense. It needs to get me as a customer to the product that I want as fast as possible, get it in my cart with an offer and a deal that resonates with me. That's years of strategy in a nutshell. But you need a well-designed customer journey, as well as a well-designed website. There are two different things that you're trying to solve there. 

But yeah, investing in a partner to help you build a just whip-fast website that helps me as a customer make a decision, answers my questions before I even have them on the product page and gets that thing in the cart and then you take my money. It's probably worthwhile investing in that as you transition into that scaling phase. 

Make sure that your offers are on point and you do try to figure out how to raise your average order value with cross-sells, upsells and bundles before just burning your budget on paid media, which is just what a lot of people do. They're like, all right, we're making some good money. We're going to double down, triple down on Facebook ads. And it's like, well, that's a well and good but you guys could return at a 3X rate what you're doing now if you'd fix these easy, low hanging fruit, for example. You know what I mean? 

Andrew Jones

And this is a little bit of a tanger, but based on exactly what you're just saying, for your framework and your Quark APIs, conversion rate AOV sessions, is that a 1, 2, 3? Like you look at the conversion rate, if that's okay, then you move to AOV. If that's great, then you move to sessions or is it just completely dependent on business? 

Chase Clymer

That's a great question. It's actually more of a one and two than three is how we want to do it. But we live in reality. We've got some clients that we take on and it's like we have to do three regardless. And then we're doing one and two. They understand it, but they still need to run their paid ads to keep their business going. Because they've already got that flywheel started.  

A perfect example would be we oftentimes land brand like we did this year, land a brand right before Black Friday, Cyber Monday. And we're like, we're not putting on a new website. We're too close. We're down to the wire. This is not happening. They're like, that's fine. But we still need to run. 

We still need to do the holiday stuff. And we're like, yeah, we're going to do that for you now. But we know that we need to fix these things and they'll get fixed. But you just have to make choices because there are things going on in the real world that affect when stuff can get done within the business? 

Andrew Jones

Yeah, that's a great point. And honestly, I feel like we just keep going for days on this stuff. I think it's such an interesting topic. And there's so many little offshoots of how a brand can optimize their store, can scale, what tactics work, what don't, where to focus time, energy. But we're coming up on time here. I think this has been super fantastic. 

One last question I want to ask you. Somebody who's been in the space for so long, has worked with so many brands, has seen so much success in the scaling world. Where do you see Ecommerce going over the next 5 years? And what excites you the most? Or what opportunities excite you the most that you see coming down the road over the next 5-10 years in the world of Ecommerce? 

Chase Clymer

Yeah. I just think that I would say Ecommerce is a toddler. It's not in its infancy anymore. I think that it grew up with COVID. So there's a bunch of stuff that will back this up. Go Google it. But basically, the market penetration of Ecommerce versus the global spend for where people are spending their money and retail in general. These numbers are gonna be wrong. But it was like 30%. And it was a pretty steady slope. And then Ecommerce. And then COVID hit and it jumped to 40% overnight and never went down.

So we grew up real fast. So there's a lot more older businesses that are now doing Ecommerce. There's a lot more young brands that got built during the pandemic that are scrappy. So what I'm excited for is just to see where this goes. All this new stuff is going to come online. And it's going to really make the people that want to stand out invest in having the best experience, having the best creative, having the best customer service, having the best product.

So excited to work with those types of brands. Obviously, we're so tied to Shopify. That's the only platform we work with. Shopify is releasing a lot of really cool stuff. They just released Online Store 2.0, which was something that everyone was looking forward to. That's a developer but from a customer perspective, if you're a customer of Shopify, a merchant that uses that solution, basically gives you more freedom to drag and drop, move stuff around within your theme.  

So that was really cool. They're releasing some other wild stuff  to the platform, releasing a lot of updates to their APIs. So building more custom solutions on Shopify is getting more and more insane. You can do cooler stuff. We're doing a lot of cool stuff with these new APIs. Really,  within the next 2 or 3 weeks, they're releasing some updates to the storefront API that will allow you to do some really wild stuff. So those are 2 things that I'm looking forward to. 

Andrew Jones 

That's awesome. This will be my last question. Promise. In Ecommerce, we get lost in trends a lot of the time like AR or VR or all sorts of stuff. Is there a technology that you see coming down  over the next decade that will completely change the game for Ecommerce? I think it's already here. And I don't think it's a technology. 

Chase Clymer

I think it's a concept of owning your own media type. Basically, I'm going to see a lot of brands that win in the game are going to be content producers, as well as product manufacturers. So an example of this would be Hoonigan, who's a buddy of mine, Kurt Elster's client. They produce a lot of YouTube content and it crushes it. 

And then they also sell merch and automobile parts. And it goes hand in hand. Product businesses are going to start building the media side or media businesses are going to release products and it's gonna be really cool to see. 

Andrew Jones

Well, that's a topic for another day that I have  so many thoughts on. And we'll dive into that another day. But again, man, this has been so fantastic. I think your insights are incredible. Your guys' experiences are ridiculous. So here, I'll give you a minute to remind the people where they can find you. And quick shameless plug time for you, for Electric Eye. Tell the people a little bit about you and where they can find you. 

Chase Clymer

Yeah. Awesome. So if anything I said  resonates with you and you're like, yeah, I think we should talk to someone who knows what they're doing. We know what we're doing. And you can reach out to us at electriceye.io. You can click, hit connect, schedule an intro call. And we'll lay down. We'll tell you the absolute truth. Honesty is one of our core policies. We're not going to pull the wool of your eyes. You're going to know what's going on.

If you enjoy my opinions on Ecommerce, you can check out our podcast, Honest Ecommerce. That's honestecommerce.com.  And we release a new episode every week.

Andrew Jones

Amazing. Well, it's been an absolute pleasure, man. So we're done. We did it. Thanks again. 

Chase Clymer

Yeah, thanks for having me. This was great.