"Hunters" can post the cool products they come cross, after which the community votes for the ones they love. If a product ends up trending, it can earn a lot of exposure to an audience of avid early adopters with disposable income.
With a sizeable user base of tech industry people, makers, and entrepreneurs, Product Hunt was the perfect launchpad for Startup Drugz, a lifestyle brand for entrepreneurs that makes kickass startup-themed tees, hoodies, posters, mugs and more.
On this episode of Shopify Masters, we're joined by Maxwell Finn of Startup Drugz who will share how they used the Product Hunt platform to bring in 35,000 unique visits in their first week after launch.
We'll discuss:
- How to know if there’s room in the market for your t-shirt brand.
- The traffic and sales impact of being highly ranked on ProductHunt.
- How to warm up cold Facebook Ad traffic.
Listen to Shopify Masters below…
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Show notes:
- Store: Startup Drugz
- Social Profiles: Facebook | Twitter | Instagram
- Recommended: Product Hunt, Ryan Hoover, SumoMe, JustUno, Credible (Shopify app), HotJar, Maxwell Finn
Transcript:
Felix: Today I’m joined my Max Finn from startupdrugz.com. That’s S-T-A-R-T-U-P-D-R-U-G-Z.com. Startup Drugz is a lifestyle brand for entrepreneurs making kick-ass startup themed tees, hoodies, posters and mugs and more, and was started in 2015 and based at Orlando Florida. Welcome Max.
Maxwell: It’s good to be here. Thanks for having.
Felix: Max, tell us a little bit more about your store and maybe about some of the more popular products that you sell.
Maxwell: Startup Drugz is a little venture that we launched in late 2015, me and my partner Nick Haase. We had just exited our first venture back startup. We kind of lived that life for three and a half years and then saw what was happening on Silicon Valley, in TV show and pop culture. It seemed like everybody had this assumption that being en entrepreneur was really glamorous and you could start a company and you get a billion dollar evaluation in the first week. That’s not the truth. We started this little side project, funny tees that kind of spoke to the reality of being en entrepreneur and launched on Product Hunt, if you are not familiar with Product Hunt and you have a cool product you definitely need to do that because it’s a huge launch platform. We got like 35,000 unique views just in the first week.
We made a ton of mistakes, I’m getting into that later but we knew we were onto something. We put a lot of more time and resource into it, kind of flash-forward to today, we did about $150,000 in our first year. We are on pace to do about seven to eight times that this year. It’s definitely a fast growing business. I’d say we have a lot more products than we had our first few months in business. One of our shirts which is the hustle t-shirt probably makes about 80% of our sales. That said, we can also get into talking about having product diversity because you never know that one product you launch that’s going to be huge for your business. If we hadn’t launched it, we’d probably still be on pace only to do $200,000 this year.
Felix: You said that you already had experience running companies before, exited your venture back startup. Was this the very next big project that you were getting into, or was this something that you were thinking about starting aside while you thought about the next big thing to get into?
Maxwell: It was kind of at the winding down point of our last venture, and I’d always done consulting on the side as well, even in college, on the digital marketing side of things. We were kind of in between things. We were looking to get potentially into the VR and AR space because that was really exciting stuff for us. It was an in between point, and we weren’t really onto that next thing yet. This wasn’t supposed to be the next thing because it’s not an innovative revolutionary idea, it’s just selling t-shirts. It’s a commodity business. However, even in commodity businesses, if there is a market that’s growing and nobody is going after, that’s an opportunity. As entrepreneurs we said, “Let’s just do it.” Worst thing that happened is we lost the week of our time and 200 hundred bucks in getting a Shopify theme and a store to put up.
It’s a super low risk, high reward project for us. Then we had a big peak right off the bat on Product Hunt and then it kind of scaled down because we didn’t have, we weren’t doing any paid marketing. We were a brand new store. There wasn’t a lot other traffic sources for us. We kind of went and continued to do our own things and launched some other products and decided to get involved in some other space and companies. Startup Drugz kind of was still there and it was growing organically and it probably it wasn’t until the summer of 2015 that I started to put some more time into the paid marketing side of things, specifically on Facebook. That’s when things really started to go to the next level in terms of traffic and sales and brand recognition.
Felix: You mentioned t-shirts and other kinds of merchandise like hoodies, and mugs. They are commoditized like you are saying. You said that you noticed something in the market that made you think that there was room or at least enough room, or at least you felt a big enough hunch that made you want to test it further. What did you see exactly, how did you know that there might be enough room for a product or a brand like Startup Drugz?
Maxwell: There is 26 million entrepreneurs in North America alone. Just the sheer size of the market and the fact it’s growing very fast and it’s something that I think a lot of kids coming out college nowadays are seeing, the Mark Zuckerbergs and [inaudible 00:05:28] and the big figures in our world who are not rock stars or athletes anymore, they are entrepreneurs. It’s definitely becoming more aspirational, it’s becoming more accepted to be a “Geek or nerd” which explains me exactly because I just love numbers and building things. That’s become more popular, normal and respectable which is what it should be. We saw the growth there, we saw the sizes of the market already. We saw the fact that the existing players in the industry were really focused on the inspirational and kind of happy go lucky sayings.
Not that it’s a bad thing, we have plenty of those in our store too. There wasn’t any of that really specific entrepreneurship in terms of talking with terms and facts and information that only entrepreneurs would get. There is certain sayings, sort of insider things that people in the outside of the industry don’t know what that means. I think that ability to bring kind of the insider terminology and inside jokes, and put that into a product, and let other people that get it buy it, that resonated a lot with our market. It also got a plenty of push back. The other thing about our brand is super controversial. I wouldn’t say, compared to really controversial things, but in this kind of space as a brand, we get a lot of negativity. We get plenty of trolls, plenty of hate.
A lot of people saying, “No self respecting entrepreneur will wear this.” Even though we have 50 thousand people that wear our stuff and some of them are some of the biggest entrepreneurs in the world, and VCs in the world. That’s the other thing is we weren’t afraid to be controversial. I think there is a lot of companies out there, especially that I speak to, that are just getting started in Shopify or any other platform. They are afraid to really speak the way they want to speak, and they are afraid to make waves, and they try to be corporate.
That approach stales nine times out of ten. Everything we embody as a brand that’s translated into our marketing, into our email marketing, or Facebook ads, into our products, into our messaging on site. That’s why we have such a loyal fan base, it’s also why we have plenty of people that troll us on regular basis. I’d much rather, people that would never buy from us and don’t care about us, and have a deeper connection and draw in that are our best customers and make them feel a deeper attachment to us.
Felix: That makes a lot of sense. Did this kind of hate, or this negativity, did it come out early on like right from the beginning or is it something that developed over time?
Maxwell: No, that was pretty much right at the gate, pretty much our first Facebook ad. I got to pull the actual ad itself because it’s funny. We had hundreds and hundreds of comments on the ad. Many of them were very positive, people tagging their friends and saying, “Check this out.” There is plenty of people out there that are just negative people, and they don’t have anything going on in their lives, and that’s how they fulfill something that they are missing inside. The cool thing is that Facebook has seen this and it’s, now after this election, it’s becoming more and more prominent, Facebook, Twitter, all the social platforms. If you have a brand page on Facebook, you can now use their publishing tool section to basically automate the filtering of those types of negative comments.
You can use keywords and Facebook will substantially just remove those comments before you are going to do it, which is good for really negative stuff. I’m also not a big believer in deleting every comment. I think that that’s a bad look for a brand is if you literally have 100% of the comments on your post are, “This is the best brand in the world. This is so cool.” It starts to lose that sense of authenticity and being genuine, and consumers especially our generation of younger, can really sniff BS, and can really tell when brands are being inauthentic or when they are not really showing the full picture. I do think having some negative comments on the field is a good thing, and getting rid of the all negativity can have a negative impact on your brand ironically.
Felix: I also think that it helps your devoted fans have something to rally behind you. There is a bunch of haters, or people that are negative or negativity coming on board. Your devoted fans almost have something to, not as a battle I guess but it can fire them up as well. That’s always a great way to get more of your fans to fall even more in love with what you are doing.
If you saw this right from the beginning, why wasn’t it a sign for you guys to back off, or what made you say, “Even though there is all this negativity, I’m going to keep pushing forward.” Because like you are saying, your brand is not that controversial. I’m sure other listeners out there have this similar issue every once in a while there is some negativity, especially in the early days when people may be doubt them or don’t believe in the vision. What helps you keep on going even though you were bumping up against this negativity?
Maxwell: There is a few things there. One is, and this is something that’s become really big in my life right as it also rolls out a lot on our products entirely, people, and this is kind of a famous Steve Jobs quote and it also goes back to Henry Ford. Henry ford said, if you’d ask people at that time what people wanted. They would have said faster horses, they wouldn’t have said cars because there was no cars in the world. Steve Jobs said the same thing with the iPhone. I’m a big believer in the fact that majority of consumers most of the time don’t exact, they don’t know what they want. A lot of their viewpoints can be flawed or not based in the right kind of mindset.
We don’t let a few haters or people having negative criticism or comments or now the idea of the concept of the product messaging, whatever it might be, deter us if we truly believe in a product, and we have data that shows that it works. Those are the two things is, if you genuinely believe in yourself, and you believe in your product, and your service and you think that it’s a good idea. That alone is not enough. That’s a critical component of it. However, if you have that and you also have early data showing that this works people buy this product, and we have early customers in the right traction. You can’t let a few people saying, “This is stupid, this is dumb. Nobody will buy this.” Tell you to pack your bags up and go.
If you do, that’s a sign probably that you are not cut out to be an entrepreneur. I know that’s harsh but it just gets more and more scale … The scale of negativity increases with the size of the business. If you can’t handle a small four or five figure a month business, when you get a six, seven, eight figure a month business, that 2% of people that are negative now look a lot bigger and you are going to hear a lot more. You need to be able to filter that out, you need to be able to focus on the metrics that matter for your business and the percent of people saying negative stuff shouldn’t be a factor of that. Just as Apple, every year Apple has an iPhone and every year there is tens and millions of people who bash it, and say there is no more innovation in apple and it’s stupid, why would anybody $800 for an iPhone, yet every single year there is people lining up two weeks before to buy the product and give apple $800.
I think the short answer to that long rambling is you can’t just let people sway your company, and the sense that you believe in it, and you have early numbers to show that it’s actually a viable business in terms of if you are actually paying for the product, you should follow that through and not be swayed by other people.
Felix: When you do see this negativity though, especially when it’s public, when it’s on your Facebook ads, or on your fan page, how do you handle it, do you respond to it especially if it’s in public, or what have you found the most effective way to I guess deal with negativity?
Maxwell: This is like a super tricky area for businesses. It’s something that we still wrestle with. Especially with a client, because we get asked by our clients who are on our Facebook campaigns force, how should I handle this, how should I deal with this? The short answer is that there is no right answer with brand, it depends on the kind of personality of your brand. For us at Startup Drugz we are very aggressive and we say what we think. We don’t hold back if we are not, we don’t put a filter on anything. For our brand, it does make sense to be somewhat confrontational to a degree. People are totally at a right field and it’s very hateful. We don’t engage at a serious level there.
A lot of our engagements are usually equally sarcastic. It’s not like a serious argument, in the sense of, we are not going to get into a deep heated political debate with somebody in regards to our brand. We might crack a joke, we might reference something. Like somebody one time wrote, “No self respecting entrepreneur would wear a t-shirt.” Something really stupid like that. Our response was, we just grabbed a picture of Zuckerberg, like every billionaire entrepreneur and just created a graphic saying the net-worth of each one and posted that back. We’ll do things like that. That’s super, it’s not super in your face. It doesn’t make us look bad. It’s funny, it fits our brand.
At this point too, we have most of our customers now, because we’ve grown so much, handle it for us. That’s kind of the point where we recognized that we are really onto something, when we started having our fans actually engage trolls and negative people for us and kind of shutting them down for us. We don’t have to really worry about that anymore. It’s definitely a fine line and it’s definitely something that you need to make sure you don’t engage in the same level of negativity. If you do engage, it’s got to be, you’ve got to take the higher road, and you’ve got to be [inaudible 00:15:46] about it. You can’t stoop down to that level because that’s a bad look, and that’s what people that do that look for is to try to bring you down to that level.
You kind of fight the same type of battle wise. You can engage, keep it lighthearted, leverage your personality when dealing with it, and try to make an environment where your fans and your supporters can be there to support the brand and deal with this for you.
Felix: I agree with that answer too about how it varies from brand to brand because like you are saying, because of the nature of your brand, because of the messaging behind Startup Drugz, it makes sense to push back a little bit because you are an entrepreneur, you are representing entrepreneurs. Entrepreneurs shouldn’t just roll over whenever somebody starts negatively bashing their business. It makes sense for you to push back while another brand, maybe a luxury brand or something needs to be a little bit more, I won’t say apologetic but it has to have a softer touch than that.
I think like you are saying it varies, and I think the key thing is to stay aligned with your brand and stay aligned with what people would expect your brand to do. I think that’s exactly what you guys are doing with kind of pushing back but in kind of a friendly way and trying to disarm the situation rather than to elevate it. You are saying you can’t base the validity of a product or a business just based on comments especially if there is a lot of negativity around it. How did you guys validate, what have you found to work well, to validate if a product or a brand or an idea is worth pursuing?
Maxwell: You definitely need to have … There is a few ways here. Some are things we do internally with our agency to roll out new products. Then I’ll tell you the one for Startup Drugz. For Startup Drugz, we found a launch platform. That platform for us is Product Hunt, and for a lot of companies, if you are a B2C product company, making software, physical products, hardware, Product Hunt is a great platform for that. It’s been around for over 3 years now, it’s launched several companies. Throughout the lifecycle of Product Hunt it’s been interesting to see it’s power grow in in terms of driving traffic and validating concepts. Ryan Hoover is the founder there, he’s built something really magical that every day, in case you don’t know what Product Hunt is, there are … People can hunt products. Which means they can post them up there, similar to Reddit. The community then up-votes those product/services on daily basis.
The ones that have the most votes along with other factors that go into the algorithm [inaudible 00:18:19]. If you are in the top, three or five on Product Hunt on each day, especially today, you are going to get 10–20,000 plus visitors to your site probably in a day to two window, because then they also send out follow up emails the next day. For us Product Hunt was a great platform to launch on and to get immediate market impact and validation. It doesn’t work every time because there is plenty of times you can put something up there and it just, you might have launched on the same day that Apple came up with a new product, or Google or Uber came up with a new product.
You have no chance to rank high there. If Product Hunt or Reddit or another launch platform isn’t available to you, I would look at taking a small budget, a small Facebook ad budget, and running some test ads, where you essentially are just asking for direct marketing feedback. We are looking on internal product right now in the professional wrestling space. I can’t go into this specific product but we took this really specific targeting and essentially just ask people, “Is this something that you would do?” We have a lead-gen out on Facebook we are collecting their email address. We’ve been getting an insane amount of opt ins. Cost per lead there is like 10 cents.
We knew we are onto something there as well, now we have initial cost from the list, and we can broadcast when we roll the product out. We have validation directly from the customers. We know that this is something they’d paid for and we also know exactly what they paid for it. It really comes down to the type of product. It comes down to what space, what platform it’s really available and most accessible for you as a company based on your industry and type of product. There is a lot of ways, I think a lot of it has to do with simply asking.
I think that there is a lot, a bunch of entrepreneurs out there, and I definitely fell into this bucket early on that don’t ask for feedback as much as they should, and don’t take advantage of the amazing technology, communication technology today, to get instantaneous feedback from very specific people. That should definitely be taken to consideration when you are launching your product is you have almost immediate access to 1.5 billion people on daily basis. It just comes down to who you are going to target and what kind of questions, not just assuming that I’m not going to ask anybody and I’m just going to roll with it and launch the product, cross my fingers and hope that it works.
Felix: Very cool, Product Hunt is definitely, like you are saying a very great platform to launch on because there is such a target on there. But like you are saying, you have to be launching something in I guess that space where there are tech people involved or your product is targeting tech folks or millennials and people more in that age bracket. I think it does apply still for a lot of different products, a lot of different companies out there. Tell us about your experience, how does someone even get on Product Hunt in the first place?
Maxwell: It used to be a lot easier. This is my dilemma as a marketer is, as a marketer that also does coaching/consulting, is a lot of the stuff that I do I beta test a lot of things on Facebook. I beta test a lot of things for other big marketing companies. The stuff you beta test has incredible result because nobody else is doing it, and it’s small circle people doing it, such as like before Facebook roll out video ads, I was able to do that, and that was crazy. You have this dilemma as a digital marketer where you could be selfish and you could take advantage of all these features and not show that to the world, and crush it to make a lot of money for yourself, or you can bring that to everybody and teach as many people as possible. That’s going to level the playing field a little field a little bit because everybody is going to be doing it.
It’s kind of the same with the Product Hunt where we were launching a product a long time before it was a huge home run success that everyone knew about, two or three a years ago. Two or three years ago, pretty much anybody could hunt anything and the chances of getting on top ten were pretty easy. Nowadays it’s a whole, there is books written about marketing a product, ebook and stuff, and strategies. The most common one is to find a hunter who’s been on Product Hunt for a long time who hunts a lot of the best and top products, and reaching out to them trying to initiate a dialog.
Don’t be pitchy because that’s the last thing somebody like that wants is to get sold constantly. Simply to ask for 10 minutes of their time to show them a product or something and get their feedback, and hopefully be able to sell to somebody like that and convince them about the coolness of the product and value of the product, and get them to agree to hunt something. It’s a very fine line because the team at Product Hunt and Ryan Hoover are very are very secure and careful about not letting the platform be gamed or monopolized, because that’s the entire point of the product, is if you can game it and artificially get your startup on there, rank really high. It defeats the reasoning that created the company.
That’s probably one of the few strategies that work too is finding that person that you know has done a lot of hunting and reaching out to them. There is a lot of websites up that show leader boards and on that front you can actually go to review, who are the top people that have done that, and what types of companies do they hunt, and reaching out to them via their Twitter handle, Facebook or Instagram.
Felix: Because it’s not like Reddit where anybody can just post anything, with Product Hunt you have to be I guess authorized to post on Product Hunt?
Maxwell: Yeah, at this point it’s changed.
Felix: Once your product does make it on Product Hunt, I guess in your case, one the Startup Drugz did make it on there, what did you, what should you be doing while your product is successfully hunted by somebody that like you are saying hunts a lot on Product Hunt?
Maxwell: The one you want to be sure to do especially today is have somebody in your team on there all day answering questions and engaging with the community, because that’s a big factor too when they are ranking algorithm is frequency of comments and the level of engagement from the company. The last thing they want to do is highlight a company that has zero engagement with the company on it. They can answer the questions or reply feedback to people that are interested. You are definitely going to have someone dedicated in your team that is answering questions, providing feedback, doing kind of AMA style, Reddit style, Product Hunting.
That’s on the day, you also want to make sure set your store on a splash page or whatever it might be that you have live at that time, has some references to Product Hunt. If you are selling a product, you probably want to offer some type of discount or special offer to product on users, Product Hunt loves that. They actually have an icon that they can reference on your product on that day that shows that you are doing something special like that. We usually use like a, you can use hello bar or something for your store, to put up a little message at the top of your store saying, welcome Product Hunters, use code XYZ today to get 20% off your order. That’s something you also would want to do is make some time a bit exclusive offer for the Product Hunt community.
Felix: When you were running this or when Startup Drugz was featured on Product Hunt, what methods were you looking at to validate whether it will be worth pursuing or not, were you looking at anything specific?
Maxwell: Yes, we were looking at unique daily visits, and we were looking obviously at purchases and sales. If I went back in time right now a year and a half and saw the traffic we got and the sales we got, I’d probably kick myself because we got, if we had the conversion rates we had today, a year and half ago, we probably would have done $50,000 in sales that day. Unfortunately the store wasn’t optimized, we weren’t, we were doing a lot of things wrong on that front. We were really focused just on, are people coming to the site, what are they doing when they kind of get here? Kind of having that experience, and two are they actually buying things?
Then we were also looking obviously at the direct feedback on the page on Product Hunt in terms of comments and people’s overall opinion on it. The overwhelming opinion on the page that day was, “This is a great idea. I loved it. I’m going to buy a few shirts.” Between those kind of three different metrics of sales, or traffic and market feedback we definitely knew that there was something there. Then it continued, it didn’t just stop that day. We had a really strong week. We had people talking about it. It was very highly shared on social.
We had people coming back and recovering the cart and buying things. We definitely knew between all that that there was something there at least we saw, it’s a pretty low risk thing and that’s the beauty of Shopify is, if you have a cool idea you can start selling it in an hour. It’s pretty cool that you can turn an idea into a sellable product on a weekend pretty much. For us it was so low risk to pursue it and we knew the upside was there, that as an entrepreneur when you find a situation where there is really low risk and higher reward. That’s the entrepreneur’s dream right there.
Felix: When you are on a launch platform like Product Hunt or again a large traffic from Reddit, what should you be doing? Because you said that you are kicking yourself now because the site wasn’t as optimized as it is today? The conversation rate have drastically improved since that first day on Product Hunt. What would you do differently to make sure you got the most value out of that bursting traffic for that week?
Maxwell: There is a list of things, the first is having a lead collection system upfront. Whether you are using Sumomi or Justuno. We use Justuno now to collect emails on first time visits, offering some type of discount, whether it’s free shipping or 10% in exchange for email address is something we do upfront for all of our sites. That’s a no brainer at this point. Through doing that, if you don’t want to be as intrusive with a pop up you can use kind of the Uno bars, what Justuno calls it, which is the small topper bottom bar, that’s a little less intrusive for collecting emails.
We use exit intent. Exit intent pop ups are huge. Essentially exit intent is the ability to show a pop or an offer to somebody that’s about to leave the site. It uses mouse function technology and can see the person going to the red button into the top of their browser, and we’ll hit people with a 15–20% offer if we know they are going to leave. That specific offer alone probably increased our sales, last time I checked it was 15% a month. For us that’s huge. If you can do one thing that brings in a 5% increase or even a 4% increase, that’s worth doing. To have a 10–15% increase on exit intent lead collection upfront is huge. Having some type of chat mechanism on the site. We use messenger integration, because we do so much stuff at Facebook. People have questions and if you built the site, you don’t see it in the same, you are kind of blinders on, you don’t see in the same perspective as somebody that’s never been to the site before.
They are going to have questions you couldn’t even think of. Having somebody there, whether it’s you in the first days because you are a one man company, one woman company is really key to answer live feedback on a site is huge. We use a live sales ticker called Incredible which we love. That kind of shows sales real time and it helps build credibility, authority and trust which is kind of three psychological triggers for non-Walmart, Target, Amazon stores that we as entrepreneurs have to overcome which is, does anybody buy from this company? Is it a scam? There is a lot of variables here to overcome as a new store owner.
Adding things like that show, Bob in Wisconsin just bought their shirts. Sally in Florida just bought this shirt. That stresses as well the retargeting side of things, it’s huge. Even if you don’t have a Facebook ad budget right now and you can’t run ads, you still should get your Facebook pixels installed and custom audience is created, because that’s data that’s coming to your store, really valuable data that without a pixel installed you are just letting disappear. It’s pretty much in my opinion the same thing as letting money come into your site and fall out of it.
Shopify again has made that process incredibly easy. It used to be do some coding to set the pixel and track all the 12 centered events. Now you can just your pixel ID in there, just like Google Analytics ID to track your Facebook pixel. Definitely putting a pixel, setting a custom audiences and then also Google Analytics. You need to Google to understand where people are coming from, what they are doing on the site, and more importantly what’s causing them to leave? Where is the bounce happening on the site? Is the bounce rates high, what traffic source has the highest bounce rates?
All that data is so valuable especially early on with your store when you are brand new, because that’s going to determine which areas of your site you spend time optimizing, working on what product lines you expand on. Those are, this obviously I can keep going on. They are talking about action tools and things you should use in your store to optimize conversions. Those are kind of the basics that should be in every single store from day one.
Felix: I want to talk a little bit about all those tips that you gave. Before we get there I want to close out, one thing is about these, the initial products that you have for sale on the site when you had this big surge of traffic. I think there is a lot of listeners out there that are thinking about starting business for the first time. t-shirts are one of the easiest way to get your kind of your toe in the water. Did you have many designs created at the time or how did it get done, what did you have ready or for sale on the site on that initial, that test that you ran with Product Hunt?
Maxwell: I’m lucky, I’m saying lucky but I have the multi kind of diversity in terms of my skillsets I’m a digital marketer who also is an operations guy, that’s where I started out on, with a finance background but I also then taught myself to code and design. I kind of, when I first started my last company which was a tech startup, I had no idea about any code, and I taught myself out of necessity. Today I kind of have, by no means an expert programmer but I can solve BS and I can do stuff of my own. At the store design, first version to date it has all been me. The shirt designs I designed. I don’t have to outsource anything which is a huge advantage, especially when you are starting a t-shirt poster company. In terms of launching your store, you definitely want to have a variety of products. I don’t have the magic number. I’m sure there is data out there that shows the perfect number of variants to launch with.
I think we launched with say 10 different t-shirts and five or six posters. That was our total product catalog on launch day, which I think was in the higher end of what I’ve seen other stores launch with. From experience I can say that the more variants and the more options you give consumers or you put on your store, the greater the chance you are going to find that home run. For us, if you look at our first shirts we put up there, and then you compare that to today sales, the fewer shirts that we’ve launched in the last four or five months make up 99% of our sales. All of our initial shirts in the grand scheme of things, are really terrible on sellers. If we had put up more designs and more options and did v-necks and crew-necks and women style shirts, we probably would have made a lot of money but it’s always an opportunity cost.
It’s, how much time do I have to put into this? I don’t want to spend days, and days putting up all kinds of variants if the whole concept isn’t working. I’d rather validate the concept in general and then work to add more skews, and variants and get direct feedback from customers. Because that’s what we got, after the first launch we heard, “Hi, I’m not a fan of 100% con-shirts,” or we had a lot of female entrepreneurs that wanted female styles and women cuts. We started working to do that, and that’s still a struggle even today is everybody wants something different. People want, I want a red color, I don’t want black, or I want to deep v-neck, I want a tank top. It’s a real challenge of filtering out everything and focusing on only adding a few things at a time because if you try to please everybody you are never getting anything done.
I think picking eight to 12 different options to launch your store on and constantly getting feedback and consistently having a plan of, the next month we are going to add these few options, and really scheduling that out is kind of the best way to go about it, because it’s not just feasible to do everything at once.
Felix: Makes sense. When you get this feedback, like you are saying it’s super important because you want to try all these different products, whether it’d be t-shirts, whatever other products you are selling. You want to try a different, a bunch and you kind of put it out there and then get feedback from your customers, your potential customers. What was an effective way for you to get this kind of feedback? Were people just emailing you or how were you getting their feedback on the different products that you are putting out there?
Maxwell: A lot of it was customer initiated. We get a lot of emails on a daily basis. A lot of them were about, “Hey, you guys plan on making this in a hoodie sometime soon or do you plan on making this into a female cut?” Every time we would get that we would document it. We have it in Google Sheet, we just got this request again, we got this request again, this is a new request. We also get a lot of shirt ideas. We have an accelerated Google Sheet with probably 500 different shirt ideas. 300 of them probably are our internal ideas, and 200 are from customers. We in the early days weren’t as active with going out and soliciting that feedback, we should have. A lot of it was just initiated by the customer. There is a lot of ways that as a store owner you can initiate the feedback loop.
You can run, you can put a Facebook post up with a Carousel ad with five different shirt designs or five different shirt color options, and simply ask, “Which one do you guys like more?” Really initiate that feedback. I think this goes back to a second earlier, people’s perception that asking potential customers or prospects question is a bad thing or it’s going to annoy people or piss people off. That like surveys are kind of like a dirty word and nobody wants to do surveys or polls because they are from the 90s and nobody wants to do it. The reality is that people like sharing their opinion. Everybody wants to share their opinion, that’s why it’s more prominent today than it is even five, 10 years ago.
Everybody wants to be heard, everybody has an opinion they want to be valued. Opening that channel, that dialog with prospects and giving them an outlet to do that is a win-win because it connects the feedback and the data you need, but it also shows that you value their opinion and their feedback which has its own benefits. I wouldn’t be afraid to create surveys, to create polls. Don’t go crazy and ask for more information than you need, keep it simple, keep it short, do just a few questions. Potentially have some type of reward system in place to benefit them. If you can’t offer a gift card to everybody, maybe you’d do contest or a raffle, they enter in or something. There is always ways to get creative with how you reward people.
Felix: Very cool. One thing you mentioned earlier about the metrics that you look at is the bounce rates. You said you looked at two different I guess sources of bounce rate. One is where the referral traffic coming from that results in a high bounce rate? Then also which pages are on your own site that result to the higher bounce rate? Maybe starting with the pages on your site that have a high bounce rate. How do you begin go diagnose the issue or eventually optimize that page to reduce that bounce rate?
Maxwell: The first thing is you need to be able actually identify what the bounce rate is and where it’s happening. Google Analytics is a great tool for the basic stuff. There is also tools like Hotjar out there that allow you to actually watch in real time, get heat maps, get a much detailed look at pages. We look at the data and we understand, the homepage is majority of the traffic is coming from and has a 40% bounce rate. Affiliate traffic is at 10%, search engine is 12, paid traffic might be 45–50%. Then we test, and so the top thing with eCommerce stores as opposed to when we build out click funnels at landing pages for our marketing funnels is, landing pages are a lot easier to A/B test, because the single page, you can easily duplicate, you can test button colors, you can test headlines. When you are dealing with entire stores, it’s a little harder because there are so many more variables to test, and there are so many pages. We usually look at a few big things.
We look at pricing. Pricing is a huge thing that I don’t think enough people test. That’s a huge factor on why people would just leave the site right away. Product images is a big thing to test, testimonials, user generated content, product descriptions, kind of navigation elements we test a lot. Navigation, probably one of the bigger things because if you have the wrong words up there, or you make it too difficult to find products or too difficult to check out, you are going to lose people. That’s what it comes down to too, it’s like the more difficult and the more steps involved for a customer to give you money, the less likely you are going to be able to get money from that customer.
Shorting that cycle, and shorting that window is huge. Unfortunately, Shopify has a three step checkout process which is kind of frustrating, although there are tools out there that you can overwrite that. That definitely doesn’t help. For us it’s a constant work, you’ve never done A/B testing until you are 100% conversion rate. You can test pretty much an infinite number of elements on your site, you just need to be able to understand, one, when I do change this element, making sure I give it enough time and actually track the right metrics and identify a big enough margin of error that I know, this isn’t just a fluke. That’s the other issue with eCommerce stores is that there are so many variables in it that can sometimes be misleading when you make changes.
For example, if you had to run an A/B testing campaign last month and you had changed, or let’s say ran it this month, the last month it was the same. This month you change the product descriptions and navigation and sales went up 15–20% a month. The challenge is that it’s November this month, and this is peak shopping time. Last month was a very slow month. That’s got another challenge with A/B testing is being able to isolate those conditions and if you are an existing store, it’s a little easier because you can look at historical data, and that’s a more apples to apples, whereas comparing it November to September or August is not necessarily apples to apples.
It’s definitely, I wish I had like a special formula for it. It’s definitely a labor of love and it’s definitely something that you constantly need to be doing and experimenting and testing. It’s never something you are totally finished with, we do it everyday with startup, not every day but it’s something we continue to do with Startup Drugz, even with the store being really successful.
Felix: One of the things that you mentioned in the pre-interview questions about one of the keys to your success is that you said that was creating marketing funnels and attracting cold traffic to your store and then maximizing the customer lifetime value of that traffic. Can you say a little bit more about this? What is your … I guess generally speaking, what does your funnel look like?
Maxwell: The challenge with a business like Startup Drugz as opposed to a non-commodity type business is that the model of cold traffic being directed to a sales page and expecting them to buy a product is really tough, and it’s flawed for so many reasons and 99% of the time it doesn’t work. Our funnels with, not just Startup Drugz but with all of our agency clients, all customers that I consult with or coach with, whether it’s 3M or a small mom and pop shop is, that initial traffic, that initial cold traffic that’s never heard of your company before, it needs to be warmed up before you ask them to buy something. As a marketer and as a person that creates a product or a service, you are creating a product or service to either solve a problem or address a pleasure point for a consumer. Those are kind of the two options you have as a company.
For someone new to buy your product, they either have a problem and you are offering the solution or they have something they really are passionate about and enjoy and you have a way to address that, like a vacation or something. What we do with all of our funnels is upfront we don’t sell anything, we’ll either run traffic to a blog or to a video or an infographic that begins to highlight a problem. If we are selling, one of our clients has a product that helps you go to sleep, stay asleep, wake up really refreshed in the morning. We are running infographics and videos that are highlighting the problems of sleep.
We have a video, 10 things that could harm your health by not getting enough sleep, or six ways to get a better night sleep. Essentially what we are doing there is we are pre-qualifying buyers upfront, because we are getting them to raise their hand essentially, virtually and saying, “This is a topic that’s relevant to me. I am interested in learning how to get a better night sleep, because I’m watching this video, or I’m going to this blog post.”
Then we’ll, depending on the price of the product, if it’s a really expensive product, we might have to throw in a few more steps in between that, and ensuring that prospect, agitating the problem, really pushing the negativities and the consequences that come with that problem, and then we need to highlight the solution, the value proposition. If people watched 50% of the video on Facebook, we have a custom audience that we are retargeting of 50% watchers and above.
If somebody read the article and spent a minute on a page, we’ll re-target those people and get them to the next step, and they will begin to pitch the product. Even that, at that point it’s still a tough sale, to either the low warmer. You still need to overcome a lot of hurdles in the buying cycle. We’ll then use things like press awards, testimonials, user generated content to push them over the edge, because those are kind of the variables that most people need kind of a handholding to get through the buying process, unless you are on Amazon, Target or a company that already has those elements in place.
Then on the retargeting from beyond that, if they get to the add to cart, they are much further on the funnel, then we’ll look at things like pricing because if we’ve gotten somebody to that point where they’ve come to the site, they’ve viewed the product, they add the product and they started the checkout process, and didn’t buy. There is usually two reasons why they didn’t do that. One is, the price is an issue, potentially they are waiting for a deal or a sale. The other is that they got distracted potentially or they are not ready to buy, maybe they are going to buy for [inaudible 00:47:13]. These are the elements we address on our retargeting campaigns. We either offer them a reminder or we’ll offer them a discount, usually starting with free shipping working this, up to 25% one time discount on 24 hour loop that’s only eligible for that day. The same thing happens with email follow ups. It’s Facebook marketing and then email automation, [inaudible 00:47:36] that will kind of follow the same block.
Felix: For a store owner out there, do they need to have this entire funnel built out before they ever drive traffic through it or can it be something that’s taken step by step?
Maxwell: My two cents is that you definitely need to have the foundation there. I think the problem is, with most businesses, and this isn’t just small business owners. We’ve seen this shockingly as in Fortune 500 companies is, 100% of their time and money goes into acquiring traffic. Everything is about getting people to the store. There is no work, there is no time, there is no money spent on getting them back and maximizing the value. I did a podcast three weeks ago with click funnels where a lot of the conversation was about once you get that customer it’s shocking how many businesses never follow up with that person, and never to try to maximize that purchase. They never try to upsell or cross-sell them, or engage with them or solicit their referral or their feedback.
I think it’s really important, I know you can’t do everything at once. If you are a small business owner, it’s hard to do all of this, especially if you are not technical, and you don’t have the time and bandwidth to build out an entire marketing funnel. That being said, if you are going to pay money to acquire traffic, you 100% need to have a return pack for your customer, otherwise you’ll unbelievably, you might as well just kind of throw that money out of the window or promote it because the chances of you getting a direct sale from that cold traffic are [inaudible 00:49:10]. You need to have that return path, you need to have retargeting at a basic level. At least abandoned cart to get people back. Then you’ll also need to remember that once somebody buys from you, they are five times more likely to buy from you again, than a cold traffic is likely to buy from you. We do a lot of upselling and cross selling on Facebook, post purchase. We also do it right after their purchase directly in the store.
We also have have a lot of email sequences. We know that the average customer reorders after 40 days. 40 days is the time majority of our customers, key customers reorder. On day 39 and day 40 we have an email that goes out, showing them our new products, and giving them a special VIP offer. Little things like that just paying attention to what customers are doing and engaging with them dramatically increases that lifetime value of the customer which in turn makes all your marketing efforts more profitable.
Felix: I like this approach of multiple touchpoints during this warm up period and not just driving them to the product page. You mentioned that retargeting is something that you use a lot, not just for people that are visiting the product pages, but if they are just coming to watch a video or look at an infographic or read a blog, you still re-target them after that. Do you also invest in getting them to opt into an email list, what do you find is more successful, the retargeting when you are still warming up the customer, or the opt in?
Maxwell: Honestly that really depends on the type of product, industry and the price of product. If somebody, if we are selling a $5,000 informational product or [inaudible 00:50:52] something, we’ll probably, our first interaction, our first ask from the customer posts, like vetting them with content is going to be a lead-gen out on Facebook or an opt in form or sort of the lead magnet. We know it’s going to take more communication and more engagement with that prospect to and be a customer, and it’s a lot cheaper to do half of that on email and half of that on Facebook than trying to do all of that on Facebook.
We’ll spend the money to acquire the lead upfront, then we have them pixeled, we have their email. We can hit them on Facebook with retargeting, and then we can also put them to email sequence. Then even beyond that, we have tools that can connect our email system, whether it’s Infusionsoft or MailChimp with our Facebook ad account, so we can know that, if this person gets this email and opened it but didn’t click on a link, we can then re-target them. Everything we do is connected, it’s intertwined, nothing is kind of independent or doing its own thing. The goal of every post whether it’s on Facebook, email or self organic social or whatever it might be, has a purpose and is designed to take a lot of people on the top of the funnel and weed them out and push them down to a really hot buyer at the bottom of the funnel.
Felix: Makes sense. You’ve mentioned the Carousel ads, these lead gen ads on Facebook, I think you also mentioned dynamic product ads in the pre-interview questions. What’s your experience been like with all these Facebook ads, which ones do you use at which different points?
Maxwell: Again it’s contextual in the sense that it depends on a business and the product. Carousel website conversion ads for a physical goods company, a company that’s selling actual physical products, works really well. I would say 90% of our ads at Startup Drugz are Carousel ads. We are highlighting our 5–10 best selling t-shirts in the actual Carousel, we’ll work in customer photos, we’ll work in testimonials and reviews into those ads. Those work incredibly well especially early on in the funnel and for our initial retargeting, dynamic product ads. Dynamic product ads essentially connect our product catalog with our Facebook pixel ad account. We can actually show personalized ads to people based on which products which products they looked at, which products they bought, which products they added to the cart.
Those ads do incredibly well in terms of ROI. I created some for a buddy of mine running another eCommerce company and we did the upsell dynamic product ad campaign for them. We probably put it up maybe a month ago. I think that ad we spent maybe 2,000 bucks on it and it’s done about 55,000 in sales. We just put up a cross-sell that’s maybe an 8X ROI. Those ads are rock star in terms of ROI. The challenge with those ads is they are only there if there is traffic. I think a lot of people want the 10X ROI campaigns, they don’t want the 1X, or the [inaudible 00:53:54] campaigns.
You should realize that in order to get the 10X, 20X and 30X campaigns, you need to have a lot of traffic that gets to that point. It’s important to look at, whether you are doing paid Facebook, whatever it might be. You are looking at the campaign as a whole and not the individual pieces, because if you look at the individual pieces alone without context, you might turn things off that will ruin the entire funnel, the entire campaign.
You need to understand that if I’m spending $200 a day on my first touchpoint campaign, to drive cold traffic, and I’m only making 150 bucks, 200 bucks a day and maybe I’m losing a little money on it, but down the funnel I have this dynamic product ad that I’m spending $20 a day and making $2,000 that combining them together you have a profitable campaign. It’s important to look at all the parts together as a whole and not just the individual part because, especially with retargeting, they are interconnected and they are dependent on each other.
Felix: I think that’s an amazing approach for building out a funnel especially when it comes to, if you can only use Facebook is to have all these different types of ads like you are saying. You’ve got to look at the entire campaign as a whole and not just individual types of ads, because like you are saying you can try traffic first before the other ads pay off. Where do you want want to see the business go in the next year, where do you want to see Startup Drugz? I think off air you were saying that this is something that you guys are doing at side. Is this something that you want to turn into a much larger business over time?
Maxwell: Yeah, I think for me it’s exciting for a few reasons, one is we spend a lot of money with Facebook, it gives me the ability to test a lot of cool new things, that Facebook is rolling out, whether it’s for Facebook directly or Instagram and even Facebook, even if Startup Drugz wasn’t profitable and didn’t make money I would still want to keep running it for that reason alone, because I can bring their strategies through agency clients which is exciting. I’m a geek and so I like doing that stuff and it’s fun.
That being said, for me I think for Startup Drugz, the long term play there also is building, turning the community into a profitable aspect of the business. We have our products that we sell and those are great, but we have so many incredible customers that are people that I’ve gotten to talk to on a one on one level that a year ago or two years ago, I looked up to more like idols of mine and now we are kind of on the same playing field and get to chat and hang out.
That’s been super rewarding and those people want to share their stories and we’ve done, we’ve tested the water, we are doing some interviews and stuff. I think there is a content play with Startup Drugz that could be really interesting where we’ve leveraged our community, because our customers aren’t just a typical customer. If we are selling just funny t-shirts or just doing normal regular crowd, we’d still have customers. All of our customers are really successful entrepreneurs or entrepreneurs that are looking to be successful and working really hard. We have a really interesting customer base, plus we have VCs, we have angel investors, we have social media influencers. Leveraging that community and building a content hub that can help some of our customers that are just getting started, or other entrepreneurs learn and better themselves, just like you are doing with Shopify’s owners is really exciting.
Potentially doing events. There are all things that we’ve been testing the water on and exploring and something I think in a long term could be an interesting play for Startup Drugz just going beyond, just being a typical product company and being more of a movement. The other exciting thing too is doing good is really important to me, and being involved at the nonprofit side or the B Corp side is really important. Being able to take what we do and actually help the community and help kids that might be struggling to find their tools to start their own business. Beyond that, you don’t need to start your own business to benefit from entrepreneur lessons.
I think lessons that are taught by successful founders and entrepreneurs are not just about how to launch a cool tech product. They are life lessons and there is discipline and ethics that entrepreneurs have that aren’t taught in the mainstream. It’s not something you learn in school unfortunately, it’s something that you learn by doing. If we can take what we’ve learned by working 24/7, 365 days a year for years, years and years, and give that back to the community, either through knowledge or whatever it might do, I think there is a lot to be done on that side of it as well and that’s really important too. To me it’s important and for the people that I work with.
Felix: A very exciting future then. Thanks so much again Maxwell, startupdrugz.com is the website. Anywhere else you’d recommend our listeners to check out if they want to follow along with what you are up to?
Maxwell: Sure, if you are on facebook.com/maxwellfinn you can follow me there. You can follow us on Instagram, you can follow me on Twitter, but I post a lot of stuff on Facebook, a lot of live videos and specifically about Facebook marketing and stuff we are doing on the agency. Feel free to reach with with the z.com.
Felix: We’ll link all that up in the show notes. Again thanks so much again for your time Maxwell.
Maxwell: Thanks Felix.
Felix: Thanks for listening to Shopify Masters, the eCommerce marketing podcast for ambitious entrepreneurs. To start your store today visit Shopify.com/masters to claim your extended 30 day free trial.
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