Jeremy Weisz 15:28
Any other bad advice that you see, that it’s maybe kind of dispelling a myth.
Raphael Paulin-Daigle 15:37
I think the second one is, there’s a lot it’s very similar to what I just mentioned. And this one is tricky, and I’ll explain why. So a lot of experts agencies, including myself. okay, so I’m putting myself in this, they’re sharing test results, right? So, like, we had a test that was a winner. And in this case, I mean, like, if I’m sharing test results, I’m sharing it when the test is statistically, mathematically valid, right, and we’re confident with the results, so statistics aside, we’re sharing some wins, because obviously, you know, we do great work. And as an agency, well, we want to share some of our wins so people can see some of the wins that being said, I think there’s, it does create a bit of a problem in I really try, when I explain those things and I share those wins on Twitter or LinkedIn.
I really give the context as to how we came up with the test idea and why this idea was relevant to this one brand and might not be relevant to your brand, but sometimes what I see is a lot of these wins are shared without any context, and what happens is, people are just keep you know, sharing best practices. They just keep sharing, oh, this worked for that brand, and without any context, without any warning or without really an educated audience on the topic, or an audience that’s really an expert in the topic, what happens is a lot of people are just taking those best practices. Or what worked for another brand as like, free money and again, then it kind of goes against our testing traffic, which is instead of actually using analytics from your data and human feedback, qualitative survey data from your customers, and then building tests based on your own situation. Well, then what people are doing is they’re literally just taking what works and what’s been shared across Twitter as ideas and inspiration.
They’re going to go test it, but they’re going to waste a lot of time and money because it may not be relevant to them, and who knows, knowing how many people are not properly testing and doesn’t have the right statistical backing behind their test, a lot of these wins that are being shared on Twitter may not even be true, like they might be false positives and false negatives, like, who knows, right? So I think I’d recommend people to be wary of that. Again, I think sharing wins can be great to understand the context. That’s why I say I share them, but I say how we came up with the idea, and that can give you great ideas of how you can do your own research to come up with your own test. But I think blindly copying best practices or what people are saying are great things or things to do can lead brands into, like, a danger zone of a lot of time wasted on tests that won’t really do anything.
Jeremy Weisz 18:44
Yeah, so what worked for one company may not work for another. I mean, I don’t know why this pops up Raphael, but I’m looking like someone’s like, oh, we changed our red button. Add a big heart to something else. Like, oh, okay, well, I should just change the red. Well, it may have to do with their brand colors, or the whole color of the site. And so people take that, what you’re saying is, oh, I can plug that and play in that into my company, and it works where there may be a lot of factors involved, of reasons why it wouldn’t work.
Raphael Paulin-Daigle 19:17
True. And I think Jeremy, like you think about it right, like it’s true for conversion optimization, but I think it’s also true for anything else in business. So for example, think of all those business books, right, that just gives examples from the big brands, like Google, Facebook, Apple, did this right? Well, what they did? Right? Like, those are billion-dollar companies, if I’m trying to solve one specific situation and problem in my business, are those examples truly relevant, right? Maybe some. The concepts are relevant. But is it truly relevant to my business today? Probably not. And a lot of these, like button. Color test, which is kind of a running gag in the industry, right? Because it’s like, oh, change your button color to blue, and it will increase your conversions by 100% right?
It’s never going to do that. And second, most brands would run that test, and it would come up as inconclusive, because the change is too small to detect a behavioral change, and you would need a ridiculous amount of data to see a change, if there would be any. And this example often comes as well from like this random Google or Amazon case study or test that was run like 10, 12, years ago, and somebody wrote about it, right? But again, like Amazon is the most or one of the most trafficked website on the planet.
Jeremy Weisz 20:40
They can get some statistically significant data in five minutes, probably.
Raphael Paulin-Daigle 20:47
Exactly. And so, like, situations are different, like, don’t look at Amazon or don’t copy Amazon’s test on your site.
Jeremy Weisz 20:59
I want to talk about it. I’m gonna just pull up your website for a second here last time, we talked a lot about swipe files. So, yeah, I just encourage everyone to check out. If you go to Inspired Insider and in the search bar you put SplitBase, or Raphael Paulin-Daigle, we went through actually a bunch of they have swipe files. So if you do want to check them out, you can go to splitbase.com/swipe. I mean, they have swipe files in the navigation. You can actually take a look of them, breaking down a lot of these things that they actually did. And there’s a lot of context there, like Raphael said. So there’s a lot here that you can actually check out.
Raphael Paulin-Daigle 21:41
Yeah, and I actually want to add as well. And this should probably be a disclaimer on our side as well, right. Like swipe files. I love them. We built this because I had all of those in a doc, just in a file. And then we said, well, let’s just put it on the website, right? But to us, the way I use swipe files, it’s not like, let’s look at how one brand does it, and let’s copy them, because there’s actually some swipes that we’ve included in there that are things that we don’t like, and we put them in sweat files, because what it does is, let’s say you found a problem through your data, your analytics, maybe through customer surveys, and you’re trying to solve that problem, right? Maybe it’s that customers don’t know, can’t find x pieces of information about your product, right? Well, then you still need to come up with solutions. You’ve identified the problem, there’s probably multiple solutions. That is when it’s great, when swept files can be great, because you still need inspiration somewhere, right? And that’s why…
Jeremy Weisz 21:41
Where should we look?
Raphael Paulin-Daigle 22:53
Yeah, like, exactly so quickly. I can say, okay, well, let’s look at product pages across 100 brands quickly. And I can say, how do they display these pieces of information? And knowing the problem…
Jeremy Weisz 23:07
Product pages, collection pages, cart navigation, landing pages, and then whatever you need.
Raphael Paulin-Daigle 23:15
So, knowing what I’m trying to solve, I can go and I can get pieces of information of okay, well, I like how this brand does it. I don’t like how this brand does it, let’s look at how this brand does it and so on, right? And then we can shape our own strategy using best practices or swap files as starting points, right? They’re not solutions. They’re not what we’re going to be copying. But let’s look at what’s being done out there, and let’s not forget, we don’t know how these brands are doing right? Like it could be working for them. It could be, it could not be working as well. So I think it’s always good to approach best practices and swap files as inspiration, as a grain of salt, but not as something to copy necessarily.
Jeremy Weisz 24:01
Love it, yeah. So you could check that out. And we actually went through a bunch of swipe files last time. So check that episode out. But I want to talk about and you could check out. They have a case studies page where they break down some of the things they do. So just to give people a sense of that, talk about Dr. Squatch for a second, and we’re seeing here. Dr. Squatch adds 800,000 plus a month.
Raphael Paulin-Daigle 24:25
Yeah, and that number is probably bigger today, because when we posted that case study, I think it was probably a year or two ago, and now we’ve been working with Dr. Squatch for about four and a half to, if not five years, right? So Dr. Squatch is a brand. When they came to us, they were a pretty small brand. They were not advertising in the Super Bowl yet, they were not a multiple 100 million dollar business, yet, they were about 10 million and their marketing team was pretty small, and we were working directly with the founder and CEO and all. Ultimately, when they approached us, they said, Well, hey, we’re growing, but we were not testing. We don’t know how to make the website better.
So can you help us? And that’s what we did, right? So we really applied the testing trifecta methodology before just running any test. We tried to understand, okay, well, this is a pretty self-explanatory product, but what are some of the challenges that the brand has, and what are some challenges that maybe customers have? So we did the deep dive into their analytics. We tried to understand how people were navigating from different paid channels, what people were buying, what people were buying together. And then we also went into the surveys and tried to understand, who are these customers? Are they just like lumberjack-style men that felt like the persona that we’re targeting? Turns out, by the way, we also discovered a lot of women were buying products for their sons and husbands and boyfriends.
Jeremy Weisz 25:56
You smell. We need to get you some of these stuff.
Raphael Paulin-Daigle 25:59
Exactly. Yeah, exactly, and then that was really interesting, because we said, well, well, there’s probably room for campaigns that are targeted towards these women, and that’s exactly what they did, and they’re accelerating those type of campaigns. So ultimately, yeah…
Jeremy Weisz 26:19
This was a Super Bowl ad, I think right here, right?
Raphael Paulin-Daigle 26:21
I think that was Super Bowl from last year, two years ago. Yeah, correct, 2021, wow, time flies. I think it was last year, but that’s the thing, right? We identified the weaknesses. We identified what the brand had to do in order to really move the needle. We actually found out that we had to push the brand towards more bundles, because margins on one $7 borrow so well, it’s not fantastic if that’s the only thing that one person buys. So, we really aim to, how do we push more people into bundles, into subscriptions? And over the past couple years, I mean, we’ve ran probably hundreds of tests now and built some landing pages, and really tried to understand, how can we make the website better?
And ultimately, while it paid off, right and it’s still paying off, at the time of this case study, it was about $800,000 a month in additional revenue generated from optimization. There’s obviously things that’s hard to quantify, like the fact we discovered there was a woman audience, and then they went and created campaigns. We’re not in charge of creating those campaigns, but we did find the insight. How much money does that mean to the brand? I don’t know. It’s not included in this calculation. We’re only looking at the increase from the AB test. But regardless it’s been a great journey to work with them.
Jeremy Weisz 27:43
Talk about stages of growth. You see it as a partner to some of these companies, stages of growth in some of the things you see these DTC brands go through.
Raphael Paulin-Daigle 28:00
Yeah, I think the first stage right up to about 10 million. And people might have different philosophies on the stages, but at least from what I’m seeing, generally from zero to 10 million, a lot is about figuring out the best angle, right? It’s about figuring out who’s the best customer segment and how to best talk to them. I don’t think that ever stops, by the way, because obviously, as you grow, you’re going to have to expand to bigger audiences and to different audiences if you want to keep that pool of potential customer big enough for you to grow as much as you want to grow. But in the beginning, I do think, like in the early, early stages, I do, under a million, for example, we don’t really work with these brands. But what I always tell them when they come to us is I say, well, you really need, like, don’t even think about conversion optimization right now.
Focus on messaging. Focus on understanding. By the way, to me, it is kind of conversion optimization, figuring out the best message so people resonate. That’s what it is for me. My definition of it is pretty large, but yeah, my recommendation is figure out the best messaging, figure out your best ads, figure out the best angles, because as soon as you want to start spending a lot of money on ads, you want to make sure that you’re relevant and you’re talking to the right customers. So really, that product market fit is super, super important. After that, obviously, when a brand is around eight to 10 million, if they’re not doing CRO, that’s where they’re losing a lot of money.
They’re going to be leaving money on the table. They’re going to be spending way too much on not that they’re going to be spending too much on ads, but they’re not going to be able to get the returns they should be able to get if they were optimizing their websites. Because that’s the thing. People spend so much time, focusing on the ads, optimizing the ads, finding the best message, but then the purchase actually happens on your website, right? People get the information like all the next steps happens on your website. So you need to treat those as one and not as two separate things. And obviously anything beyond 10 million to 100 million or conversion optimization doesn’t have a destination. The key thing though, is whatever the test results you get, you need to be able to learn from them if you want to be able to grow from them. And that’s something Dr. Squatch has been doing and has done more successfully than a lot of other brands, no matter the test results, right?
So let’s say we’re running one, two or three tests in a row that turns out, didn’t produce any revenue lift, which happens the actual industry statistics Jeremy, are that I think about one out of seven tests will win. So that means that six out of seven tests won’t produce results that generates you more money. Okay, at SplitBase, our ratio is better than that. That’s just generally like across people running A/B tests. But that means that, hey, if you’re about to run six tests that doesn’t produce any lift, well, you better be able to find value out of that somehow, right? Otherwise, it’s a long road to getting those lift and does. That’s what we focused on. So for example, with Dr. Squatch, there’s things that we found out their audience didn’t care about. Well, great. We learned that through some tests, and we were able to simplify some pieces of the website. And ultimately, that’s the thing. As you grow, you really need to be able to use the learnings from an optimization program, what worked and what didn’t work, and apply it across your marketing.
Jeremy Weisz 31:46
Yeah, it allows people to focus on different things, because if you have a hypothesis, right? And obviously there was a page put up for some reason, you realize no one’s going to that page. And there’s maybe multiple reasons, but it’s just as much as maybe cutting stuff out, and it’s adding stuff in which could be make things clearer, simpler and easier. I think, right?
Raphael Paulin-Daigle 32:10
Oh yeah. There are so many things that brands assume, you know, all those vendors and apps and Shopify apps. Everybody sells their product has installed this app. Use this you will increase conversions. It’s like, kind of the hot UVP for almost everything today. But the truth is, like, there are so many times where, like, virtual try-ons, for example or, like so many things that brands paid a bunch of money to develop or to install. Well, turns out we’ve tested them, and sometimes they actually lowered conversion rate. So, yeah, don’t assume that because it’s fancy or big or shiny, that it’s necessarily going to do good for your business. “Don’t assume anything” is kind of how I think of things.
Jeremy Weisz 33:03
You have any favorite apps?
Raphael Paulin-Daigle 33:07
Do you have any favorite apps? I would say, yeah, I do like Replo a lot for landing pages. Not every e-commerce brand, even though they’re 100% on Shopify and technical well, not every brand has a developer in-house or technical skills to maintain and code and make changes to the site all the time, but landing pages obviously are a great way to get more money out of your marketing spend on ads, and they’re focused funnels, right, but yeah, and we build those for brands. The thing, though, is Replo makes building those landing pages so much faster. You don’t need a developer. It’s really easy to use. It’s not too complex, but you can still do pretty much everything you ever dreamed of doing with the landing page. So, yeah, Replo is a great tool.
Jeremy Weisz 34:05
From a growth aspect for these companies. And I know part of the ecosystem is venture capital, like as they make more we mentioned in the front, what role have you seen with some of the brands and raising money and our venture capital is usually involved.
Raphael Paulin-Daigle 34:25
Yeah, well, I’ve seen some interesting things, which around venture capital and e-commerce, and it’s mostly that in the past year or two that capital kind of dried up for a lot of e-commerce brands. When we look back at like the COVID years like, I don’t remember even what year was that, 2020, 2019, I don’t know, but around that time, right, there was, like, a big surge in e-commerce brands. Like, we’ve seen so many e-commerce brands grow incredibly fast. We saw record amounts of money getting invested into e-commerce brands as well, right at crazy high valuations.
There was really, like a peak of DTC investments there. What we started seeing, you know, towards the tail end of the pandemic as well, is, well, a lot of these brands were likely only very successful bootstrapped or with VC investments doesn’t really matter. We’ve seen a lot of these brands, though, start declining. A lot of them went away. Like, we had a lot of clients over the past years that we lost, not because of us, but just because their business, like, they couldn’t acquire customers profitably anymore, like it was, just like the business model didn’t make any sense. So we kind of saw a cleanup after that big rise we saw like a cleanup in the space where a lot of brands just disappeared, got acquired, and VC money also starting getting dried up, because they saw less promise in this space. I think we’re starting to see it come back now, but it’s been a very long and slow decline, and it didn’t help as well that the iOS changes made acquiring customers more difficult. Like, there’s been a lot of things thrown at brands that made things a bit difficult.
Some of them still managed to thrive during all that time. But then we’ve also seen some big brands like, I think it was like Casper where, like, there were some press articles where like, they’re not profitable and they were overvalued. It might be the wrong brand I’m thinking of, but there’s been a couple of these as well where big e-commerce brands once valued at massive valuations are now on shaky grounds. So it’s an interesting space.
Jeremy Weisz 36:47
Are there any venture capital or companies that stick out to you when we’re thinking of, like, people are out there in the DDC space, and like, the well-known companies were looking to raise money. I’ll just share. There’s one guy I had on here. He was interesting background, Zach here, of Newground Ventures, and we talked a little bit about and his companies. And, like, some of them were interesting, like spindrift, which I actually drink, and zvia, which I actually drink. So we had some interesting conversations, or any that you’ve seen that are well known in the space.
Raphael Paulin-Daigle 37:35
Yeah, I’m not super up to date. I’m gonna say on the like VC space. A lot of brands just have VC money, but they come to us directly. Um, what I have seen, though, is maybe this may not answer your question, but I have seen a lot of and I’m not going to name them, but I’ve seen a lot of VC firms that don’t know a lot about marketing try to do marketing on behalf of the companies are invested into and we’re talking about big brands making a lot of money, and that’s been interesting to see right, because you see that not the right marketing decisions are always being made. And then I think there’s also a focus on the wrong metrics. And anyways, that’s a whole other thing, but that I’ve seen a couple right? I think it’s something that brands should be careful of.
But I’ve also seen some really great ones, like, there’s one we work with digital fuel capital, who really knows their stuff when it comes to digital marketing, right? And they really support their brands in the best ways possible. They know, they just know the space really well, and they’ve worked on and they’ve invested in big brands, right? So, so there is definitely that, I would just say it’s something that people should be aware of. There’s really, I don’t think all the venture capital money is the same, and I know that the agreements with those really vary from brand to brand. Like I said, for some VC firms almost are in charge of all of their brands marketing, or you really have to use their partners, versus some others, it’s really you’re on your own, and they just invest. I think brands need to really consider that, though, and like, what’s the level of marketing expertise that you can find in those VC firms?
Jeremy Weisz 39:30
I want to talk about your podcast and some of the learnings you’ve had from the podcast, you could see splitbase.com you can go to the podcast page, Minds of Ecommerce Podcast, maybe talk about a few interesting episodes people should check out from you.
Raphael Paulin-Daigle 39:49
Yeah, lots of great conversations. So nearly everyone that I interview on the podcast are founders of e-commerce brands, but the majority of those brands doing eight to nine figures. All obviously our million dollar brands, that last episode, podcast episode number 33 with the founder of Loom Cube, which sells ring lights, which I’m using one right now. So this was very interesting, because I talked earlier in this episode here that there’s a lot of misconceptions and best practices that are being used the wrong ways, and one of those is that a lot of brands while they hear, oh, landing pages are great to increase conversion, so we’re just going to build landing pages and we’re going to test them.
But what happens is a lot of brands don’t set the right budget aside in order to test them. They’ll build those pages, and then they’re gonna release them. They’re gonna put 25, 50 bucks a day, because they’re like, well, this page is not proven. We have to test it out. The truth is, now I can tell you this, but you can hear it from Riley directly, the CEO and co-founder of Loom Cube. And what he says is he tries to spend between $5,000- $10,000 minimum on any type of landing pages that he tests. He’s trying to get hundreds of transactions per test and he runs those tests for, you know, two, three weeks. And that’s the right, proper methodology. If you want to test something, you need to have data in order for that data to be reliable. So that episode was really interesting on that end. Another one that I thought was really interesting. If you scroll down a little bit, I mean, they’re actually all very interesting, but eat, sleep, it was actually very interesting. Alexander’s approach to building partnerships.
They’ve built partnerships with F1, Barry’s Fitness, and then I keep seeing other partnerships that they’ve done. And their approach to partnerships isn’t just to slap your brand name next to another big logo. It’s really about understanding your values and how both audiences can benefit from each other. And I thought that was a pretty fresh take on building and sponsoring brand opportunities.
Jeremy Weisz 42:10
So people can check out the podcast. You go to splitbase.com and go to the podcast page, it’s Minds of Ecommerce Podcast on any of the channels. Raphael, one last question before we end, I want to just encourage people to check out splitbase.com, last question is, just any of your favorite resources that could be software, tech, it could be a book. What are some resources that have been valuable to you?
Raphael Paulin-Daigle 42:39
Yeah, a couple, I would say on the tech side of things for my day-to-day work, like I said, Replo for building the landing pages and having them live on a site without much coding. That’s a great tool for A/B testing. Convert.com, fantastic tool. I actually have this thing behind me here, convert, we’re a Certified Partner at the highest level with them, and have been for six years now. I actually don’t get a commission from anything we do with them, but they have a great team, and it shows when there’s we need customer support. They’re a great tool. So convert.com, is great for that. I would say, in terms of books, there are so many I’m looking behind me. There’s so many that I can think of that are great. I think Profit First is a classic. I know a lot of people are familiar with it. It really changed the way I think about kind of organizing money in the business. So that was really interesting.
Jeremy Weisz 43:43
Love it. Raphael, yeah, actually, people can check out. I did an episode with Mike Michalowicz, who has several great books, one of them being Profit First. So we talked about, I forgot which book it was on that one, but probably several of them. But check out. splitbased.com more episodes of the podcast. I want to be the first one to Raphael, thanks for coming on again, and we’ll see everyone next time.
Raphael Paulin-Daigle 44:08
Thank you, Jeremy.
