April 7, 2020
Ep. 49 – The $500,000 Honest Marketing Approach for Growth with John Hagan

Ep. 49 – The $500,000 Honest Marketing Approach for Growth with John Hagan

I think that one of the difficulties and one
of the big things that eCommerce is missing –a lot of times– is honesty. That’s why
I love the podcast title so much. It’s because (of the fact that we’re) sharing and being
honest. Welcome to Honest eCommerce, where we’re dedicated
to cutting through the BS and finding actionable advice for online store owners. I’m your host Chase Clymer, and I believe
running an online business does not have to be complicated or a guessing game. If you’re struggling with scaling your sales,
Electric Eye is here to help. To apply to work with us visit electriceye.io/connect
to learn more. Now let’s get on with the show. Hey, everyone, welcome back to another episode
of honest eCommerce. Today, I am joined by John Hagan. John is now working for PURE L-E-I
but before that… Or it’s PURELEI (pure-lay)? Did I screw that all up? It’s okay, man. You know, to be honest, it’s
like the most common problem that we have. It’s PURELEI (pure-lay) Okay. Yeah, I read it in my head as L-E-I
probably because of R-E-I. Ahh. Okay. This is the worst intro I’ve done on the show,
but we’re going to keep it because I like being true. No problem. Okay, so before you got the job at the confusing
company name, I’m just kidding. (laughs) What were you doing before you started working
for PURELEI? So before I was working for PURELEI, I was
actually living in –I live in Kansas City now– I was living in Los Angeles, helping
run a small, six-man operation digital marketing agency that was heavily based, actually almost
entirely based in media buying. So we were running… We had a roster of about 10 clients.
We were primarily buying media for them on Facebook. So that’s where I met PURELEI. That’s fantastic. So when was that? How long
ago? That was between 2017. That was from 2017-2018. Gotcha. So that was the little over two years
ago or however, you want to pick it on the calendar just to break it down for people.
Because if you’ve been in the Facebook game as long as we have, what’s the difference
in terms of, I guess, the ability to hit a return on ad spend that you can brag about
then compared to now? Right. Yeah, so it was entirely different,
man. So we started out running a lot of stuff for a dropshipper with a lot of success there.
And then when the Cambridge Analytica scandal happened, it just didn’t really work anymore.
It was no… Dropshipping was no longer… And actually, I’m thankful for that, to be
honest. One of the things that I like to pride myself
in is the honesty in eCommerce and when you’re dropshipping –unless you have a sort of drop
shipping like a hybrid that you have set up in the US– you’re not particularly honest,
right? You’re not making people happy. You’re not providing an incredible service or product
or those kinds of things. So the difference stands –to your question–
man, there’s a big difference between back then Facebook and now Facebook and there’s
a big difference between American Facebook and European Facebook. I’ve had to go through
a couple of transitions. Back then, it was like just a simple machine-type,
ATM-style return where you receive a creative. write some –to be honest– terrible copy
at that time put it up on Facebook and bam! You have an ROI of 2 to 3 for an absolutely
not sound process. And now the game is only the survival of the
fittest. You have to be on your game. You have to be a solid copywriter. You have to
have a solid creative. You have to have solid media buying practices. So it requires a lot
more attention and a lot more effort. Yeah. I guess I’ve never really talked about
dropshipping on the show and my opinions on it and I actually personally… So the agency
–if to get a little more serious about it– the agency doesn’t work with dropshippers,
usually, just because the margins are so thin that they can’t afford our services. It’s
not a sound investment for them. But that kind of goes along with the mentality behind
dropshipping. I think dropshipping is actually fantastic.
If you’re trying to cut your teeth and learn eCommerce and learn how to market, go start
your own store and just dive right in. You’re going to learn. You’re gonna fail so fast
and you’re gonna learn so fast. Absolutely. The capacity… The barriers to
entry with dropshipping are so low that it’s such an excellent entry point for someone
who wants to learn anything about marketing and eCommerce in general. Whether it’s just
the Shopify store or Instagram, whatever it is, it’s such a great platform or a strategy
to introduce those principles. Yeah, but I’ll be… Here’s the honesty. Good
luck with making money. (laughs) (laughs) Yeah, there you go. Absolutely. But
getting your feet wet, it’s great for. Yeah, exactly. You know what I mean? And then
you can… All that stuff, all that knowledge that you’re learning there, you can actually
then expand and take on some other younger businesses as clients and take those practices
over. Starting the agency was the best thing ever
for us. We learned so much cool stuff about so many processes with eCommerce businesses,
new ways to approach getting customers, all different aspects of the funnel, and then
automation and optimizations to do. And it all came back to that just being curious about
how all this stuff worked. Right. Right. So we’re getting completely off track. Let’s
jump back into it. Yeah. Yeah. So after working for that first performance
marketing company and then you met your current company now, I guess, maybe explain that transition.
Obviously, we’d kind of touched on it a bit. The differences between marketing in America
versus internationally. Absolutely. Yeah. So it wasn’t all dropshipping
with that agency by any means. So we started with dropshipping and then we started… Once
we started winning with dropshipping companies, the client profile started to go up in quality.
So then we started to gain some clients that were getting larger and solid. Really solid foundational companies where
we could really scale and find some success. So along with that lines, once we were finding
that success, we started doing some consulting for other businesses, and PURELEI ended up
being one of them –where I ended up taking a more active role in the consultations and
eventually starting to work full-time for.– A lot of my job is centered around growth. So the differences that I have seen in growth
and any capacity, whether we see growth, –that’s my title. Director of Growth– So whether
we see growth as a great possibility in a different market, or on a different platform
or with other influencers or with other companies, anything in that regard. So the difference that I’ve been able to see
from American to European eCommerce is extremely… It’s a great comparison because we’re doing
business in both places. The major difference between those two markets being scalability. So, let’s say that, like what we have, we’re
a European first company, currently. We do most of our business in Europe. But when you
do most of your business in Europe, you start to hit a ceiling relatively fast. So, for
instance, Germany is our primary market. Well, there are only 80 million people in Germany. So when you start to see some really, really
great numbers, when you start to really grow into what we’ve grown into with this 100 person
company, basing the ceiling of marketing every year, raising the numbers every year, inevitably
you start to see a ceiling. So then you have a question, do you get into Belgium? Well,
how many people are in Belgium? Do you get into the Netherlands? So you start to have
this… And in order to get into each of those countries,
you have to tailor-make a website, you have to translate a website, you have to translate
all your copy. You have to have employees there that understand the market and understand
if there are profits being made there. Or you can hop into the US. So, yeah. I don’t
know if that quite answers your question, but difference-wise, (it’s) scalability. But then also difference-wise, you have extremely
high costs in the US. Right now, in eCommerce, I don’t think there’s a more expensive place
to be than the US. So, CPMs are extremely high. ROAS can be really hard to obtain. The
saturation is a huge factor. So those are just a couple of differences. I don’t know
if you want me to dive into one particular. Actually, I have a question. Yeah. About the company itself. I know that you
weren’t there from the beginning, but I’m sure that you know the answer to this. How
did a German startup build a Hawaiian-inspired brand? Yeah, of course. So we have three co-founders:
Alisa, Freddy, and Etienne. Alisa studied abroad in Hawaii when she was
in college and she really just fell in love with the culture, resonated with the lifestyle
there and wanted to bring something like that back to the EU. Because there is some of that lifestyle in
the EU but in Germany particularly, when you think of Germany, you don’t have the beaches
–I mean, you have beaches– but you’re not gonna be able to bring that lifestyle, physically
back. So that was her mission. She just fell in
love, wanted to stay there but just also wanted to come home. So she just wanted to bring
a piece of that Hawaiian culture back to Germany. And the message resonates extremely well with
Germans as well. Well, that’s fantastic. And shout out to Hawaii
in general. It’s my favorite vacation spot and Shawn keeps making fun of me because I
keep going back. I have actually not been there yet. I need
to go there. It’s fantastic. We can talk about that offline.
I’ll give you some nice suggestions. Yeah, absolutely. Support for today’s podcast comes from our
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trial at simplr.ai/honest. So let’s get into some nitty-gritty and strategy
stuff. What are some of your approaches to media buying and maybe even some tips or tricks
that you guys are doing over there that people might not be thinking about yet? Absolutely. So right now we have this very
unique strategy almost across the board and extending –It certainly has a media buying
aspect to it– but it extends far outside of simply media buying. So we have these product
launches that we do every week. We are launching five to 10 SKUs of products every week. It’s
very difficult to execute on strategy because there are a lot of moving parts. So this is the strategy in a nutshell. We
have an event. We have an event with about 20 to 30 influencers in a very beautiful scenic
location. Our last one was in Venice, Italy. So we had this event in Venice, where we fly
in these 20 to 30 influencers. These influencers are all posting on their channels before the
event actually happens, teasing that they’re going to appear at the event, that there’s
going to be a product launch. We tease it on our Instagram channel, we tease
it on our Facebook channel through Facebook ads, we tease it through email. Basically,
every piece of data that we can possibly aggregate, we put together for this launch. So then the
influencers arrive. We have liaisons, we have our team of influencer girls there to communicate
with them. They have a brunch or they have dinner and then the product launch happens. Sometimes the product launches (are) tied
specifically to one of these influencers. So it’s the “Influencer X Collection.” And
then when the launch happens, that teasing turns into launching. So we transition a landing
page from a teaser to a launch. And again, every single piece of data that we have acquired
just notifies all of these people that we have a new product launch tied with a specific
influencer and here’s a little discount code. Okay, so you mentioned something that I want
to get some clarity on. You guys are launching new SKUs every week. Mm-hmm. And are you having these events every week?
How often are these events? So the launches… Sometimes the launches
are bigger than others. So the events are probably happening on a monthly basis. Maybe
a bi-weekly basis, but typically a monthly basis just because of the manpower required
to have these events. The product launches, however, are happening every week. But when we see the best results, it’s quite…
It’s insane how different the results are when we have one of these huge events compared
to when we don’t have one of these events. Oh, absolutely. And I’m just gonna get to
the point there. You are making so much content to reuse, aren’t you? Oh my gosh. So we have 20 to 30 influencers
in one place at one time, right? So we have five to six photographers and just the whole
nine yards and we just get so much content out of those events. And that just makes your job so much easier
with Facebook, Instagram, are you guys doing any other kind of visual paid media stuff? On a small scale our testing, we’re actually
in the beta version of TikTok right now. Oh man. I just noticed that they were doing
ads and I’m super curious about it. Yeah. So to be honest, the way that we got
into TikTok was, I just messaged any email that I can find on TikTok’s homepage and I
said, “This is who we are. We would love to advertise on your channel.” And then they
give you a rep and you get involved in a beta version of testing. So it is extremely, extremely primitive. The
methods that they… They have a paid platform but it’s like, I have never even seen a Facebook
click paid platform that is this primitive. But it’s a beta version. So I mean, that as
a marketer and early adopter know, that can be as valuable as having the robust marketing
system that Facebook has right now. So cool. So I’m going to definitely follow
up with you in a couple of months to see how that’s all worked out. Yeah, absolutely. Please do. TikTok is one
of those platforms for me right now where I just don’t really understand it yet as a
consumer. So it can be a bit difficult to climb inside of the psyche of a person who
loves that platform because, to be honest, I feel like I’m 45 years old when I’m looking
at TikTok. (laughs) I just don’t. Yeah, it’s just very different. Oh, absolutely. Absolutely. So going back
to this event structure –I know we got a little off track with TikTok. I’m always excited
about new things. And that’s why I like doing an agency and not a product or service because
I get to try new things– so going back to these events. You’re taking these events, you’re launching
and you’re reusing all this content all over the place and I’m sure that you’re using that
with your visual ads on Facebook and Instagram. You’re using this content for your social
posting as well and you’re throwing it out to your email blasts, I’m just assuming as
well? Absolutely. Yep, absolutely. Like I said,
it’s an all-encompassing approach. It’s every piece of data. It’s what I call the “Kitchen
Sink”, right? Mm-hmm. It’s every piece of data that we possibly
have acquired. Because at that point, it’s just notifying… It takes the difficulties
and complexities of media buying away. Because if you have the demand and you have
a product that people want and then they can’t have it yet but you’re letting them know that
it’s coming, when you get to the launch, it’s really just letting them know that it’s happening.
It’s not trying… You’ve already got them, so they’ve already… So then let me explain
one further piece of the… So, the landing page. First, we call it the
teasers. So throughout the portion of time before the product launches, when influencers
are arriving and telling people that it’s happening, there’s a signup form on that teaser
page which is a huge deal. Because then we have acquired data that we don’t have to really
pay any more for, media-wise. You don’t have to buy any more media for it. We just send
out an email or a chat blast. So I’m assuming that the return on ad spend/return
on investment, whatever you want to call it. So people are hitting this specific page.
Are you just making custom audiences for that specific page to hit them with this stuff
when it finally goes live? You’re like, “Boom! These are the ones.” Absolutely. Oh man! And that’s just a crazy return? To be honest with you –I can share numbers.–
To be honest with you, sometimes this ROAS on Facebook will be as high as 20x to 30x That is fantastic. And so are you doing much
paid before or are you just using organic social and all these influencers to drive
that traffic to that page to create that retargeting audience? So we are doing some paid before. We are certainly
doing some paid before. I would say that the paid before is about 50-50 cold to warm traffic.
So it’s all website visitors, business engagers, purchasers, add-to-carts. But then it’s also,
top 4 cold audiences on Facebook and then 3 or 4 new ones. 3 or 4 new that we’re kind
of trying out as far as cold traffic audiences on Facebook. So it’s a healthy mix of cold
and warm. Yeah, yeah. And you gotta be prospecting.
You can’t keep re-hitting your existing customers, because that’s not going to grow your business.
That’s not going to grow your top line. And especially when you’re launching every
week, you can’t just continue to dig into that same honey pool and say, “Hey, you guys
want to buy again? You want to buy?” It gets a little bit –not invasive– but just a little
bit too much if you’re not continuing acquisition at a high frequency. Gotcha. I’m going to ask this question and
you don’t have to answer it and if you don’t answer it, we’ll just cut this out. What kind
of numbers are you getting from these launches and from these events? If you could share
dollar (amounts). I can answer that. Yeah. So our highest day
of revenue actually happened not last week, but the week before and we did just over half
a million euros from a launch like this in one day. And you just shared the strategy. No. Exactly. I think that one of the misconceptions
of a lot of eCommerce people is that, “It’s me versus someone.” like it’s PURELEI versus…
But at PURELEI, we’re very transparent because it’s how I learned. The way that I learned
how to do a lot of this stuff was through talking to people and then being transparent
and sharing the strategies. There’s so much meat on the bone. The possibility that there
was ever actually any competition directly from me sharing this strategy… Only good things are going to happen because
of sharing the strategy, right? Because maybe it will resonate with someone and then they’ll
reach out to me and say, “Hey, I’ve been trying something similar as well but you should try
this.” There’s a mentality of competition. I just don’t believe them. Oh, absolutely. And I think that actually
was… I don’t know. When I was a younger man, (laughs) it was a bad thing. I had to
get over myself. It was an “us versus them” mentality. I wanted every client because if
I didn’t have that client then it was someone else’s client, then I was against them. And then I was like, “No, I had some very
amazing people in the Shopify ecosystem.” A shout out to Kurt Elster. He just slapped
that out of my head. He’s an amazing man. He’s helped grow our agency. His podcast,
the Unofficial Shopify Podcast, shares so much amazing content. He’s an open book and
it just opened my eyes. It’s like, “We’re all in this together. Let’s just all build
successful businesses.” Absolutely right. And you deal with it. I
think that we deal with it a lot, too. It’s like 50-50 where people are like, “Oh. Let’s
share. Let me get your number down. Let’s open up our Facebook ads managers and let’s
just compare numbers and compare strategies.” And then the other 50% is like, “That’s competition,
right?” But unless you are like, I don’t know, Patek
Philippe and Rolex, you’re not competing with each other. There’s no way. I mean, there’s
just too much meat on the bone to ever actually consider someone competition right now. Unless
you’re… Yeah. Unless you’re that big, right? Yeah. Let’s be honest today. All of your customers
are going to have questions. What are you doing to manage all those questions?
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get your second month free. That’s amazing. Thank you so much for sharing
that strategy and just the numbers and being honest about it. Let’s kind of like pivot
it a bit to talk about… With your job, what’s the best part of having this growth position
at –it seems like– a great, growing eCommerce business. Yeah. The best part of my job, to be honest,
–in growth sense– is just that we have such an open ecosystem and environment for growth
at PURELEI that basically, my job is to throw –I don’t know if I can cuss on here (laughs)–
but to throw shit at the wall and see what sticks. So to just throw a bunch of stuff…
It’s like mental stimulation times 100. TikTok is a perfect example. If I look at
TikTok and I see, “Man, there are people who are starting to make money here.” And it’s
not like,”Well, there is no slowing me down.” It’s like, “Hey. Well, why don’t you spend
some money on there and see what happens?” The best part of my job is the freedom to
try and extract growth from any possible revenue/avenue that I can. Yeah. And I think that kind of blends itself
with one of my favorite business concepts: Fail fast. Figure out if it’s gonna work or
not. Exactly, exactly. No, because I mean, the
most valuable thing we have is the company. So one of our core values is that we move
fast. So and I think that aligns perfectly with my position and it allows me to really
live that to the fullest extent as Director of Growth. That’s fantastic. So let’s flip it. What’s
the worst part of your job or the most difficult part of your job? Ooh. Good question. So the worst… The most
difficult part of my job is that people… Growth means change, and that people sometimes
struggle to change. It can be very difficult. For instance, a lot of growth potential for
the company is in the US. But when you have this incredible system and robust marketing
efforts in Germany or in Europe, that’s where you want to put all of your focus on. When you’re rocking, when you’re killing it,
when you really think you’re crushing it in an industry or in a market, it’s really, really
easy to think, “I got to spend all my time here. If I don’t spend all my time here, then
the next person is going to step in and they’re going to… We’ve got to be the best here.” But when you’re looking at the US in the horizon
and you’re thinking about it as a really pivotal part of hitting your goals –maybe not particularly
this year, but certainly in the next three to four years– it can be really difficult
to align people’s strategies and minds towards that goal because it’s change. Change is difficult and it brings you out
of your comfort zone. So the difficulty of growth is the change that follows along with
it. And it’s inevitable. Absolutely. Cool. So before we go here, is
there anything that you haven’t shared with our audience that you think would be something
worth listening to? I think that what I’d like to share with people
in the industry is just… I think that one of the difficulties and one of the big things
that eCommerce is missing a lot of times is honesty. That’s why I love the podcast title
so much. It’s because (of the fact that we’re) sharing and being honest. I think that we’ve
all had that sort of, I don’t know, the guru run-ins where there is a lack of honesty. But I think that the thing that I like to
share is, there is still honesty in eCommerce. eCommerce is not an integral part of some
type of evil scheme to pull money out of people’s pockets. There is a lot of good in eCommerce and companies,
I like to say, like PURELEI, represent that good. And yeah. Just promote honest eCommerce.
I think it’s a great principle and I think it’s a great name for the podcast. That’s
why I was so excited to come on. Awesome. Well, thank you so much for coming
on and sharing that amazing strategy. I’m sure that we’re going to have a lot of listens
to this one because I already know what I’m gonna call it. Oh, perfect. Yeah, that sounds great, man. Cool! I cannot thank our guests enough for coming
on the show and sharing their journey and knowledge with us today. We’ve got a lot to
think about and potentially add to our businesses. Links and more information will be available
in the show notes as well. If anything in this podcast resonated with
you and your business, feel free to reach out and learn more at electriceye.io/connect.
Also, make sure you subscribe and leave an amazing review. Thank you!

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