April 3, 2020
Jeff Cohen – Seller Labs on E Commerce, Customer Support, Amazon Changes 2019

Jeff Cohen – Seller Labs on E Commerce, Customer Support, Amazon Changes 2019

are you ready to scale and outsource
your business okay let’s go welcome to the outsourcing and scaling show I’m
your host Nathan Hirsch a show where we talk about everything
Amazon shopify ecommerce and digital marketing let’s get started welcome back
to outsourcing and scaling my special guest today is Jeff Cohen are you the
CEO the owner of southern labs what’s your official title you know my title
seems to change every week but today I’m I am an owner but I am NOT the founder
and owner but I’ve worked for the company for almost six years now which
is kind of crazy to think about we’re hitting our six-year anniversary and I
run all business development partnerships relationships all that type
of stuff awesome so Jeff you’re probably one of
the most outgoing people I know whenever I see you at a conference you’re talking
to large groups of people yesterday we were i prosper and you came over to my
booth and you were giving the freeeup sales pitch to two different people I
want to take a step back and talking about your childhood where were you
always that way were you a good student were you kind of a rebel I’m always
curious where people came from yeah I don’t know that I would call myself a
rebel but I definitely wouldn’t have called myself a good student I would
definitely say that I’ve always been outgoing I would say that I’ve always
enjoyed I’ve always had the gift of gab you know that’s probably what my what my
mom would say if you if you asked her I would always say that I’ve been more of
a experiencial learner than a classroom learner right so I’ve learned bye-bye I
learned more by doing and I’ve learned more by conversing with others and and
understand how they’re doing things and then taking pieces and bits and parts of
those things and integrating those into what I do
awesome so did you did you go to college I did I went to college I followed a
pretty traditional path I went to high school I went to college I started
working and I got an MBA you know how to corporate had a corporate job for a
number of years you know it’s it’s kind of funny when you look at education
today we really teach our kids to be entrepreneur
we’ve learned we’ve learned that whether you work in an office environment or or
you work from home or or your you create a start-up the entrepreneurial spirit
makes you more successful and so the way I describe my career I’ll say prior to
seller labs was I called myself like a corporate entrepreneur I wasn’t always
the one who came up with the idea but when somebody had an idea I was the one
that ran with it so a great example was like when I started text books calm I
worked for a wholesale textbook distributor I had worked for them for a
number of years and they had owned a website called text books calm but had
never done anything with it I worked with the CEO of the company to develop
their whole ecommerce strategy so I was like the founder and general manager of
textbooks calm but I never really like owned it myself got it so is that how
you got into e-commerce yeah I mean that’s I’d say that was kind of my
movement into e-commerce prior to that the only stuff I had done was really
focused around like building corporate websites and things like that and you
know back in 2005-2006 when I started textbooks com after that site launched
we did you know eight figures in our first year and like I was considered an
e-commerce like guru because you know it was such a new industry back then that
one year of experience you know allowed you to to be that you know super
experienced person so you started textbooks comm and bridge the gap
between that and seller labs how did did you have different jobs in between how
did that transition happen yeah so the short of the version the short part of
that is that when I left textbooks com I went to work for a company called campus
books and my first hire was up was a programmer and his name was Brandon
jackets and I hired Brandon to come work for me and Brandon worked for me for
about two and Brandon is very entrepreneurial and
had started another business on the side and it started taking off so he left
campus books to go pursue that business that business was a website called books
Scouter it was a site for selling textbooks so campus books worked on the
buying like how students bought their books his site worked on me how you sell
your books and he left to go run that business and a few years past him and I
kept in touch and he had started buying books himself he started buying products
at USPS action and he called me up and he started telling me about going to
USPS auction and buying books and selling them online and I was like that
sounds really cool so I hopped on an airplane I flew down to Athens Georgia
and went to a USPS auction with him started buying stuff myself started
running around my house with my phone and in uploading products to sell on
eBay and on Amazon and I guess kind of caught the Amazon bug back this was like
back in 2011 2012 very cool it actually all comes together so back when I got
into e-commerce it was textbooks and actually I tried to sell my books to the
school bookstore they didn’t give me a good price I actually went to campus
books they didn’t give me a good price so I was like alright I’ll do it myself
so then I went to book Scouter which Brandon owns and that’s how I really got
in e-commerce and yeah back in 2008-2009 when Amazon was becoming more than just
books so it’s kind of funny how our past kind of intertwined there yeah everyone
said every once in a while at a show I’ll run into somebody in this industry
that I’ve known for 10 years and if you go you know if you go back to to the oh
geez right to the to the to the old for the old school people in the space
most of us started in the book business because if you think about Amazon five
10 years ago it was all mixed media and books right so you know I think that
that we’ve evolved our personal businesses and our and our software
businesses along with the space as the space has as the space has grown but
yeah a lot of us all started back in the book business
right so you mentioned the software space let’s talk about that for a second
because with my Amazon business I built some software and it was a pain I’ve
always said that if I was a developer if I knew how to code I’d be a billionaire
right now because there’s so many there’s so many ideas in my head that I
have to figure out how to transfer to a developer and write good freeeup I
didn’t really look at us as a software company until probably about a year one
and I’m like oh my god we have this platform we have to start looking
ourselves as software and invest in that what does that like from the ground up
starting a software company yeah I mean I I think that it’s I guess the same for
us like we’ve just been figuring it out as we go along I think we’ve we’ve knew
we knew from the beginning that we were software engineers at heart that our
core was software and software development and so while we really
enjoyed the physical product part of the business we had a 15,000 square-foot
warehouse we were doing three to four million a year in sales but all of the
operations that we built were driven off of software that we were creating on the
back end so we created our own inventory management system we created a feedback
a feedback management system we were building all these things ourselves
and then we kind of realized that other people in the space needed them and a
lot of the software in the space if you go back to its core was developed for
that purpose somebody had some kind of need of their own and and and then they
realized other people needed that same thing and you know we’ve you know we’ve
learned a lot none of us none of us at the beginning have that had ever run a
software business so a lot of it was just kind of trial and error and making
mistakes and you know we focused on a few really core pieces at the beginning
that I think helped launch our business and put it to where it is today so one
was we really focused on customer success customer support so from the
beginning we hired customer support people we brought them on you know we
had them locally we we made it a point to to make customer support a primary
focus of our business you could actually reach out and talk to us
people always found it funny when they would call customer support and I would
respond to a ticket but all of us did it at the at the beginning I still do it
sometimes today just for fun I’ll go in and see if I can still answer support
tickets I think the second part was that you know we we we focused on solving a
need that sellers had in the space and we did it at an affordable price so we
made it work from a pricing standpoint into something that fits into their
business today and helps them accelerate their business and essentially you and I
do the same thing we use software to create outsourcing for your business you
guys use people to create outsourcing for your business and ultimately there
are things that you can automate through technology and then there are things
that you can automate through process and that’s just I think where you decide
whether you’re gonna go to a third-party software or you’re gonna go to a an
outsource I also think timing has a lot to do with with everything right and
while I know you talked about the gig economy and and and how we’ve we’ve
grown in this economy of pain services to paying other people to do services
for us we’ve also grown in the SAS economy which is the software as a
service economy and so ten years ago most of the stuff that we use today
we’re all on enterprise contracts and they weren’t available to everybody in a
in a very easy manner and today they are and so we were kind of at the at the
forefront of that of that of that world when it broke you know over the last you
know five to ten years let’s talk about customer service because you know how
seriously I take customer service it’s one of the reasons we love partnering
with you and and we know that if we send people your way you’re gonna take good
care of them and and vice versa and customer service is one of those things
you can’t compete with every single big big business out there on marketing on
software but you can always compete on customer service and I think some people
they start with that mindset but as they scale it gets harder and harder to find
the right people that makes that customer service at the same level with
twenty people you had when you were just doing every
email yourself right talk about that and how you’ve been able to hire people that
have that same high standard that give the same end result to your clients yeah
I think that’s a I think that’s a great question and I’d say that building
process it’s the same as outsourcing right building process training and
developing company culture and so it’s kind of silly like when I’ve read about
it in books but like we studied Zappos and we studied these other companies
where the culture was built around customer success and we’ve really built
that into our our core as well so our engineers at time they pair with
customer support so they actually hear what the customers are complaining about
we don’t do it as much anymore but we used to bring engineers to to trade
shows to hear about it directly from the customers we train our customer support
people not just on our tools but we train them on how to take information
from a customer and turn that into a fix or a feature we also train our customer
support people how to understand whether a problem is user error or a problem is
software error because that’s a tricky thing as well right customers always
want to believe that the software isn’t working
and sometimes it’s the customer who isn’t working or the expectation of the
software is different than what they’re getting and so by training we’ve also
had a by training and and really I’ll say retaining we’ve been able to retain
our customer success people so you know Tyler who works for me and business
development came from customer support Caroline who a lot of people who’ve met
at trade shows came from customer support so a lot of people who have you
know one of our lead engineers started as a customer support version so we
really see customer success in our company as a as a as an entry point into
all different positions in the company um the the person who is our lead
strategist for our managed service around advertising started as a customer
support person the person who does sales right so we have all these people in our
company who grew out of customer support so when you get hired for your first job
with seller labs and you’re making you know you’re making an hourly wage you
look around the company and you see all these other people who work at the
company now who started in where you are and you see a path for the growth of
your career and you buy into the customer success philosophy that we have
and and and you see that you can actually by doing well in your job you
can grow finally the whole company the whole company every employee in the
company is is bonus based off of customer success and so we don’t just
talk about it as one person’s job to do it we consider every role in the company
to be critical to customer success and so we have a metric that we follow
around customer success and that metric is something that’s part of everybody’s
into year bonus Jeff I love it and I actually just made a Facebook post the
other day that customer service is that position you have to retain people if
you’re turning people over every six months it becomes impossible to build
relationships with their customers people see other people leaving they
want to bounce so customer support is one of those things you have to invest
in you have to get out of the mindset of oh they’re their chief people they’re
just followers and I got a lowball them and and save money there and then invest
elsewhere you’ve got to keep money in social customer support and I love
bonusing based on that can you give people a feel for how many developers
you have how many customer service people you have and talk a little bit
about how they communicate with each other yeah so um so one lat one thing on
what you just mentioned which is that that our turnover of customer success is
people leaving for other positions in our company right and it it’s funny
because John who runs our customer successes is like constantly like oh man
I’m getting I’m it’s like we hire and train people so well in customer success
that within six months to 12 months they’re ready for another position in
our company so it’s really become kind of like a feeder system for the company
in terms of how the the interaction works between engineering
and support I would say that our company we’re around 60 employees I would say
that we’re probably I’ll call it a third a third a third so we’re a third around
what I’ll call general operations marketing product and then we’re a third
around engineering and a third around customer support those numbers all kind
of shift in different ways over time but it gives you a general sense of about
where we’re at I think that the way that we work together is that both our
customer support team our account and our account managers they pair with
engineering and they pair with the product team and so when when like for
example our account managers have a list of feature requests they wait that
feature request list based off of who’s asking for particular features and then
on a regular basis I don’t remember if it’s weekly or bi-weekly they meet with
the product team to go over what the biggest needs are from the market that
they see now customer support does something similar to that and they’re
able to bring that more from a a bug enhancement standpoint to say this would
really you know if we solve these three issues it would reduce the number of
emails that we get or the number of phone calls that we get and so we look
at all of these different channels and we look at how we can use those to
improve our product then finally we have what we call an engineering escalation
team which pairs with the customer support team on a weekly basis
because a lot of our issues can be resolved just specifically by our
customer support people digging into the software every once in a while we need
an engineer to have to go in and do a deeper dig this actually happened at the
tradeshow we were talking about a customer brought a problem to us we
could see that the problem existed but we needed an engineer to go in and
figure out because when you when a customer tells you a problem or a
challenge they’re telling you what they see it’s our job it’s customer support
job to figure out is is are they seeing the wrong
are we presenting the wrong data are they interpreting the data incorrectly
are they trying to do something with the data that’s different than what we
intend the tool to do right they have all these things that they have to go
through to figure out like is it a bug is it an enhancement that needs to that
needs to happen is it retraining is it marketing that needs to change the the
wording of something because there’s added confusion so in this particular
case we were able to go and we needed an engineer engineer went and dove into the
data we realized that we had all of the data on the back end but for some reason
part of their data wasn’t showing up on the front end we were able to get back
to the customer within an hour tell them that we understood exactly what the
problem was the data was there the data was present and we gave them a timeline
for fixing the front end of the problem which I think has now been resolved in
less than 24 hours so that’s the way our teams kind of pair and work with each
other that’s a prime example we have a somebody on the customer support team
whose specific role is taking the information from customer support and
translating it to engineering for deeper dives and information so we’ve built out
all these systems and processes as we scaled as a business because it’s really
easy when you’ve got a couple hundred customers when you start getting to
thousands of customers you have to build all these systems and processes and
procedures and ways for the departments to interact with each other and that’s
really an all honesty like when we when we step back and we look at like I think
we’re about to hit our six-year anniversary in in in April and we step
back and we look at like where the company has grown and we’re we’ve
matured as as managers and facilitators of the growth of the company that’s the
stuff that just kind of blows us away because I know how support worked five
and a half years ago when I started and I know that it was a cornerstone of our
business and today it works in a totally different way and it’s still a
cornerstone of our business I love it guys if you’re listening that’s gold the
communication between the support staff and
the software side I mean even with free up we do the same thing people would
report bugs or a different feedback and if you don’t have that open
communication and an actual process they communicate back and forth
you struggle and yeah took us a little while to figure that out you mentioned
this is your six let’s go back to year one and I know with a software company
you can spend forever trying to perfect that product before you get it out there
and especially with Amazon when things are constantly changing how do you find
that balance between let’s keep improving the software to let’s just get
it out to market and get some feedback and get people using that yeah so I’m
what you’re talking about in software terminology is called product it’s
called MVP versus product market fit right so your MVP is kind of like your
your what’s the basic level of product that i need to bring to market so that i
can then determine whether product fit product market fit is there and B P
stands for Minimum Viable Product by the way know that and
and what I’m looking what I’m looking for I would say that that any weak so
when we started we did that when we started we did the MVP for a software
today we do MVP for a feature because one of the things we work in what’s
called an agile development process and so what that allows us to do is we’re
constantly iterating and developing and in end what happens in a development I’m
getting a little technical here but what happens in a development type of sense
is that if you wait for the product to be perfect you’ll never bring it to
market right it’s actually like goes right back to like sellers on Amazon who
are just trying to keep looking at the data and looking at the data and they’re
trying to make it all work for them before they bring their product to
market and that’s just not the way sourcing products for Amazon or or
developing software works so you have to bring a product to market and then you
have to continue to iterate on that based off of what the market says and so
you bring a product to market and whether the physical product or a
software product you bring a product to market and then as you get feedback from
the market you start to change either your persona of maybe you thought
that the product was for a 24-year old female but then you realize that when
you bring the product to market it’s really a 45 year old female who’s your
key buyer so you have to start changing how you do things as you see the market
fit and I heard this from a great restaurant tear so I live in Chicago and
there’s a guy here who owns a business called Lettuce Entertain You they own
hundreds of restaurants around the city and somebody asked him wants at a at a
fireside chat when do you know that your restaurant will be successful what is
the critical point of success in the restaurant phase is it is it at launch
is it at year one is it at year five like where does that happen and he said
that with an 80% accuracy he knows that a restaurant concept will be successful
within the first 21 days how’d it go deeper into that the reason
he knows that it’s successful within the first 21 days is because he brings a
minimally viable product to market on day one and he has 21 days to adjust the
menu the decor the hours all the things that work within a restaurant business
and if he can’t hit product market fit within that 21 days then that market
concept that he brings isn’t going to work and so what he said and I thought
this was really interesting because I like taking parallels from other
industries and bringing them into mine right what he said was that the
restaurants that fail are the ones that launch and expect their concept to work
and when they hear the feedback that their concept isn’t working they don’t
want to hear it and so they keep saying oh but that person doesn’t know this or
that person doesn’t know that or they’re not intelligent about this or they don’t
understand what I’m trying to do with that the person that succeeds is the one
who listens to all of that feedback and goes oh they weren’t really looking for
this to be a $20 entree they were looking for this to be an $18 entree we
really should do some pricing menu option
and see what this is gonna be and so our ability sell it labs ability or anyone’s
ability to hear the feedback from the market right goes back to feedback
genius will take this back in a loop take the feedback that you get from your
customers and iterate your product based off of that feedback and if you are
getting a bad review then you should figure out why are you getting that bad
review and a lot of people want to when they get a bad review or when they get
negative feedback they just go oh that person doesn’t get it that person
doesn’t understand what we try to do as a business is we try to understand who
is that customer does that customer fit into our core persona so our persona is
who we’re targeting our software to work for and if you fit inside that persona
the value of that copy of that enhancement that you’re looking for
becomes more valuable if you sit way to the right which is like a stretch goal
of who we want our software to work for we try to not get distracted by that and
if your way to the left meaning that you’re you’re not where you know you’re
not ready for our software just yet then maybe we look at like how do we
train you up to work for our software and so I think one of the things that’s
really made seller labs successful in our ability to grow is understanding who
our market is understanding who our customer and our target customer is and
developing our product to work for them as opposed to trying to be the
everything for everybody type of solution I love it and those people that
follow me know how important I stress feedback and when you get feedback you
have two options you can take it personally and say oh I’m right and the
clients wrong or you can listen that feedback and make adjustments and I
obviously recommend option two I can’t let you go without talking a little bit
about Amazon what’s going on in Amazon in 2019 what should people be aware of I
know one of the cool things about you and your company is you have a very
close relationship with Amazon and I feel like that gives you a little bit
behind-the-scenes look at what’s going on what can you share with people that
the people maybe won’t know or don’t think about when it comes to Amazon 2019
um let’s say I think Amazon 2019 the only thing that’s constant
change and I think that Amazon sellers brands and the community just needs to
embrace the idea that change is constant within Amazon and that we need to look
at change is a positive and a lot of us want to fight that change every time it
occurs I was actually just thinking about this same question coming out of
the the prosper show I try to look at like what are the themes right what are
the themes that people are more interested in this year than they were
last year so one of the interesting themes was I didn’t see tax as being as
big of an issue and concern as it was last year I think sellers have kind of
gotten an understanding of tax they have a better understanding of what tax is
and how they need to do with it with their business I think that the big
concern right now on the first party side is like will first party still be
there for some of these brands and do they need to be considering third party
that probably doesn’t affect third-party sellers as much as it affects first
party sellers but I think it’s a it’s a it’s a 2019 theme I think advertising
continues to be a 2019 theme Amazon released like five or six features
through q4 around Amazon advertising from bid controls to product ad
targeting to new auto campaigns and targeting within those and sellers
trying to understand what all these new features are I talked to a seller at the
show who said oh that didn’t work for me and I said well you know what did you do
and he goes well I took my existing campaign that was working and I started
doing product ad targeting on it and and it stopped working and I was like oh man
like you can’t just like take something good that’s working and then just change
course right you got to have a you got to have a strategy you got to have KPI
metrics that you’re looking at you have to have a testing period you should
probably start a start a testing campaign don’t do it in your and your
existing campaigns and so everyone’s eager to want to try the new things to
come out and advertising is gonna be releasing even more of them
in the future because Amazon is generating a ton of money from
advertising right now I think the the other big theme for 2019 is gonna be
logistics and and profit and I think they’re gonna go hand in hand and so
logistics are everything surrounding your product and warehousing and
shipping and so while I think like shipping your products over from your
manufacturer and getting them into the Amazon warehouse isn’t gonna be the the
crux of that I think sellers that are gonna start looking at three P options I
think sellers are going to be looking at inventory management options that allow
them to maintain inventory somewhere close to an Amazon facility think about
this long-term storage fees are gone right this this concept of being charged
twice a year for long term storage fees they’re now being charged monthly which
means if you keep that inventory in amazon over 180 days your bill starts to
go up well what else happens in Amazon on October 1st all of the fees in Amazon
go up considerably so if you’re used to shipping in 3
months worth of inventory at a time and you’ve got a 90 day turn on your
inventory there’s nothing wrong with that nine months of the year but as you
start looking now its March for the people that are watching this in the
future you start looking now to q4 you better have a strategy for how you’re
gonna send your inventory in because if I hit the dock on September 1st with 90
days worth of inventory what happens to my fees in October when I have 60 days
worth of inventory and then in November when I put another 90 days in my fees
for November in December go up dramatically and so there are going to
be some shifts of strategies and philosophies around logistics in terms
of how I send in 30 days worth of inventory and how much inventory I hold
there and where I hold that inventory in the meantime I’m not a logistics person
that’s not my thing but I know that’s gonna be a major theme as we move
forward love it Jeff where can people find out more about you contact you and
tell people a little bit more about labs yeah so seller labs.com is our
website you can find me on linkedin that’s probably the best place to
converse with me personally I like to use LinkedIn for business Facebook for
my personal life you can connect with seller labs on our blog we we have a lot
of great content that we put out there and for those that aren’t aware of
seller labs we’re a software that provides reputation management
advertising management and listing optimization we do it we do it for you
through a managed service we do it with you through our software or you can do
it yourself through training and self service so we have a lot of different
options that are out there depending on where you’re at how much time you have
all that good stuff so thanks for having me on yeah thanks for coming out and I
have to say I’m so impressed because you must have talked to twice as many people
that prosper and I did and I’ve lost my voice I’m struggling today and you seem
like you could talk for the next five hours so no I’m gonna I’m gonna be I’m
gonna be drinking some hot tea as soon as we get off this call exactly have a
good rest of the day Jeff thanks Nathan hey everyone thank you so much for
watching did you enjoy this content if so click
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