37: Life After Crowdfunding: e-Commerce Strategy
In this episode, we’ll focus on e-commerce strategy, especially for bootstrapped startups. And, for that purpose, we’re interviewing an expert growth strategist named John Coyle, who’s going to explain how to identify your competitive advantages, how to capitalize upon them to grow your brand, and how to strategize successfully through the three phases of bootstrapped e-commerce. Let’s dive right in...
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1. Startups must devise products that fit the marketplace well and they must maintain at least one competitive advantage in order to survive.
2. Startups should develop as many competitive advantages as possible, which may include large market size, current market trends, brand image and/or celebrity support, product uniqueness, benefits-versus-costs, figurative deep pockets, and ample relevant data.
3. Startups should stack their competitive advantages when marketing themselves.
4. e-Commerce marketing for bootstrapped startups normally progresses through three distinct phases, which are firstly gaining traction by urgently developing one profitable revenue stream, then reinvesting profits to develop additional profitable revenue streams, and lastly scaling-up all profitable revenue streams as best as possible.
5. e-Commerce marketing should usually start with advertisements, which are great for steadily yielding quick responses—especially Facebook ads, which access a vast audience while enjoying advanced features, although Google ads are excellent for targeting prospective customers while they’re shopping for what you’re offering.
6. Although generating leads for e-mail marketing is still superior for yielding cheap results over the long term, some e-commerce marketers may want to expand into the fast-developing field of messenger marketing.
7. Influencer marketing can help; influencers sometimes request simple upfront fees, but it’s better to negotiate lower fees in exchange for affiliate cuts, which incentivize sales, plus for authority to use their reviews in other forms of marketing that may increase their followers.
[01:29] Zach reminds listeners about Funded Today’s growing array of free resources for crowdfunding campaigners, along with its forthcoming book.
[02:44] Zach introduces John Coyle, who has worked since 2014 in e-marketing, and John overviews his career experience with search engine optimization (SEO) and Facebook ads and other forms of paid media.
[05:15] John states that he usually starts advertising on Facebook due to its size and advanced features, while Google is less disruptive and better at targeting people who are actively searching for things.
[06:05] John overviews how he uses e-mail lead-generation to simultaneously obtain telephone numbers for SMS marketing (for which Thomas recommends Telnyx), which he attempts to segment—but that, although SMS marketing is currently good at getting clicks, it’s currently not diversifiable while it suffers from rapidly-changing rules.
[15:01] Zach transitions into a discussion about identifying competitive advantages and using those to successfully market products.
[15:23] John relates his experience with bootstrapped direct-to-consumer e-commerce startups trying to market products that lack competitive advantages, which always proves futile.
[17:37] John presents one of several categories for competitive advantages, which is celebrity/brand power, and he urges influence marketers to negotiate with celebrities for lower upfront fees in exchange for affiliate cuts to reward performance, plus authority to use their reviews in your marketing, which may increase their followers, although you might need to resolve concerns about hurting their own branding.
[33:01] Thomas emphasizes the importance of startups focusing initially on direct-response marketing and eventually expanding into branding.
[35:09] John introduces three stages of bootstrapped e-commerce marketing, which are (1) traction, in which entrepreneurs urgently need to find a primary steady source of profit, (2) diversification, in which entrepreneurs reinvest profits to identify additional steady sources of profit, and (3) scaling, in which entrepreneurs increase their marketing scale as best as possible.
[39:33] Thomas agrees with John about taking one step at a time, while Zach notes the importance of good product-market fit in gaining traction.
[41:20] John stresses the importance of knowing your stage, as well as your competitive advantages.
[42:11] John lists additional categories of competitive advantages beyond (1) influencers, which are (2) benefits-and-costs, (3) uniqueness, (4) cheapness and/or profit margins and/or ability to pay for new customers, (5) current trends, (6) massive demand, and (7) relevant data—and both John and Zach recommend gaining as many of those advantages as possible.
[44:20] John provides examples of various competitive advantages, plus how to stack them well.
[56:18] John highly recommends identifying your competitive advantages, perhaps through SWOT analysis, plus your phase, and using these to strategically develop your marketing strategy.
[60:06] Zach and Thomas and John present this episode’s Projects of the Week.
Zach Smith: (00:00) Funded Today Nation, welcome back to the Funded Today podcast. Today, we’re we are expanding on our popular “Life After Crowdfunding” series with a another great episode. This one focuses on E-commerce strategy especially for bootstrap startups, and for that purpose we are interviewing an expert role strategy named John Cohoe who is going to explain how to identify your competitive advantages, how to capitalize upon them to grow your brand and how to strategize successfully through the three phases of bootstrapped ecommerce, let’s dive right in.
Announcer: (00:29) The Funded Today podcast is brought to you by fundedtoday.com. Funded Today is a premier marketing and video agency. From startups to Crowdfunding to Amazon and beyond, Funded Today has helped their clients generate hundreds of millions of dollars in revenue. If you’d like help launching or growing your business visit www.fundedtoday.com to speak with one of their experts.
Zach Smith: (00:57) Welcome back to Get Funded Today a Funded Today podcast, I’m Zach Smith.
Thomas Alvord: (01:01) And, I’m Thomas Alvord.
Zach Smith: (01:02) And last time we talked about prototyping manufacturing and mass distribution of your product with special guest Gaston Liang, you’re not going to want to miss that one. It was jam packed with information that’s going to help take that idea from inside your head on a napkin to the world at large really I don’t think there is anybody better in the world when it comes to that sort of thing, and that was a really fun episode to record, I learned a lot myself to it so, take a look at that, set aside a couple of hours it really was pretty long and hangout your notebook get ready to be mind-blown I think it’s going to help you. Now, finally before we begin today’s episode I wanted to once again remind you about just a couple of free resources we’ve been creating for you, are you unsure of your campaign mediate is as effective as it could be, checkout our ultimate Crowdfunding page design analyzer it’s going to overview all the basic principles of creating persuasive campaign media as it helps you evaluate your video and your page. Are you worried about missing anything important as you prepare for the launch day, if so then our thorough “ultimate Crowdfunding prelaunch checklist” is going to list point by point what you can do you help minimize those regrets. And finally craving a crash course about running a successful campaign from conceptualization to fulfillment and beyond, if so then our powerful ultimate Crowdfunding success guide is going to synthesize all of that wisdom about everything we’ve learned raising 100s of millions of dollars into a single comprehensive reference handbook. You can download any and all those resources free now from our website or checkout the show notes fundedtoday.com/podcast. Finally, one more plug for the book, it is coming, we are on track to have it finished in final manuscript form by the end of this year, you’re not going to want to miss it. If you’re interested in the book, let us know get on that prelaunch list, we’d love to have you, I think it’s going to be a great book. Thomas and I are really excited about it and like we talked about last episode, this is four years in the making or so, so we’re excited. All right, now for today’s episode, special guest John Coyle bootstrapped ecommerce marketing John, let’s just unpack all this for a little bit, tell us about your story, give us a little bit of where we’re at, and let’s just dive right in.
John Coyle: (02:58) Yes, so I’ve been kind of in the digital marketing online marketing space since for like 2014 now so like five years, and which is like.
Zach Smith: (03:11) So, you’re saying you’re a grandfather in the ecommerce space
John Coyle: (03:15) Yes, I’m an OG an online marketing with five years' experience the unique space and that way, so yes I’ve been doing this for a while, I started out just doing like SEO so like ranking, like at first I was just like helping local businesses rank organically for like plumber in Salt Lake City, Utah, and then I went from there to an agency where I was kind of the head of paid social of all things, because I had picked up some experience running like Facebook Ads for like a startup I was just kind of working with on the side, and I knew Facebook Ads so they’re like “hey, great your head of paid social”, this was back in 2015, were like to be head of paid social. You know, the qualification was like, “oh, you’ve ran an Ad on Facebook, so you’re the head of paid social”. So yes like I got to be their head of paid social and manage a lot of money they had, like clients spending some pretty big dollars on Facebook. So, it’s really fortunate to like kind of get an in doing that, and get a lot of experience in a time where maybe I felt like I didn’t deserve it, but and that also kind of gave me some connections to some other people who actually did know what they were doing, so I got to learn from them. So, yes, fast-forward a couple years of doing that got to a point where I felt like I didn’t know what I was doing. And then just sort of in 2017, so October 2017, so about two years ago struck out on my own, and now I work mainly with Ecommerce companies mostly with direct-to-consumer brands, so they’re selling their product primarily directly to consumers via their website, not through third parties like Amazon and stuff like that, I mean, some of them do that, but I’m working with their direct-to-consumer like on their site. And I run paid Ads on paid traffic on all kinds of channels on Facebook is usually where we start Facebook, Instagram, but we run Google, Pinterest, Snapchat. Snapchat is getting really big for us actually.
Zach Smith: (05:15) We had asked this all time, but why do you start on Facebook and Instagram?
John Coyle: (05:18) A couple of reasons, so number one like completely honest “familiarity” like we know the platform super well, right. And number two it’s a really big platform like everybody’s audiences on Facebook and Instagram, and then number three like the only reason that we would not start on the platform is because there is a we’re working with a product that has like that’s sort of more native to Google right? So, like this isn’t a product that we want to really interrupt people’s day with, it’s a product that people are shopping for, and so we just want to start on Google. Most of the companies we work with aren’t like that it’s sort of more of a product that’s a little bit more native to Facebook and Instagram. So, yes that’s kind of why we start there. It’s the best it’s the biggest and most advanced interruptive Ad buying channel right now.
Zach Smith: (06:05) Love it, that’s a good takeaway.
John Coyle: (06:06) Yes, yes so and then yes we also manage people’s email marketing, SMS marketing for them, they’re what we call like owned audiences.
Zach Smith: (06:13) When you’re talking SMS, are you talking about Facebook Messenger, or you’re you talking about texting or both?
John Coyle: (06:18) Yes, texting SMS.
Zach Smith: (06:20) Texting okay.
John Coyle: (06:20) Yes, text message marketing, you can do MMS as well, but which is like sending pictures and stuff.
Zach Smith: (06:25) Yes, okay. Are you doing anything with Facebook Messenger?
John Coyle: (06:27) Yes we’ve done quite a bit with Facebook Messenger. We don’t - it’s still Facebook Sandbox, so we like to own our audiences on our own email list, or on our own text messenger list, if we can, or text messages we can, but then yes we do build up messenger a little bit we see it as sort of a semi on the
Thomas Alvord: (06:49) How do you decide whether to do an SMS campaign or like an email lead generation campaign or to do kind of your traditional email lead generation as opposed to SMS?
John Coyle: (06:58) So, a lot of times these days sort of go for both, right? So if we’re running Ads to, let’s say an opt-in page, so I’m guessing for Crowdfunding you guys do a lot of like lead generation before the launch, right, where you buildup an email list I could be wrong.
Thomas Alvord: (07:12) That’s right.
John Coyle: (07:15) Yes, so we’ll start to actually like instead of just asking for an email right there, we’ll run just startup by just running a variation, right? So, running a split test on that where you ask for email and phone and just make it clear that phone is optional. If you need your TCPA language there you need all your legal stuff. Thomas, I know that you can take care of that, but you’re not using Panus you need to make sure all your legal stuff is there. So, the way that we do that as we make that phone field optional, and then we have our TCPA language there, and then we just make we make it clear that their phone field is optional, so we just run a split variation of our email opt in one and, we find like, 60% - 70% of people will put their phone in and opt in to text message alerts and that way.
Zach Smith: (07:55) It’s awesome.
John Coyle: (07:55) Yes.
Thomas Alvord: (07:56) Well, that’s interesting, and then do you, obviously the open rates substantially higher with SMS with text message in terms of traffic and clicks what do you see?
John Coyle: (08:09) Yes, so massively massive amount more clicks, massive amount more traffic. For your text message list the big issue, the big barrier you need to overcome is it’s not as cheap as email. So, email is pretty dang cheap in terms of how much you can send for how much it costs.
Zach Smith: (08:27) Let’s talk about cheapness of that just for our listeners so they kind of get a feel for that cost per click, cost per opt in what do you consider a good range?
John Coyle: (08:34) Yes, so like on email, for example, like let’s say you’re using something like Mailchimp, you’re going to be on like a plan that allows you to send like let’s say like a million emails a month and that plan is going to cost you like $500 bucks or something like that, like those are not accurate numbers, what I just said I just brought those off the top of my head, but with the biggest difference with text is that you’re going to have a cost per message you send, so whether you send SMS or MMS, it’s going to cost you per message you send. So, a big thing that we’ve actually started doing a lot of people just mass send their text lists, because they’re just like, “hey, we’ll just they just see it as another Ad buying traffic buying channel” like we’re buying traffic this way. And a lot of times the cost per click does work out to be pretty cheap. It depends how much you text your list, but like we could be talking $010 click here $0.10, $0.20 cent clicks or even less if you get a high click-through rate, but you’re paying per message, so you got a balance there, right? Like, do you send a really quick Beatty message that gets a bunch of clicks? Or do you send something a little bit more clear.
Zach Smith: (09:39) And this is after you’ve paid money on Facebook to acquire the lead regionally right?
John Coyle: (09:44) Yes, so.
Zach Smith: (09:45) This is an ongoing $0.10 per click costs.
John Coyle: (09:47) Right, right.
Zach Smith: (09:48) What’s interesting about this is back in the day, right, you were running Facebook Ads 2015, so how it was you could get clicks in the US for under $0.10, you could get clicks in Europe, Asia, other places or even a Penny right? And those were actual clicks, some mobile, some desktop, so you make a great point unless you have a targeted list then it’s basically just running ads, and now granted, they might be kind of warmer, but a little more expensive.
John Coyle: (10:18) So, we play with segmentation with text message, so we either through so right now we’re actually using a third party tool, but we’re working with them, their developers, and their API to allow us to do segmentation, so that we can create engagement based segments in our text message list so like if people aren’t clicking our texts we stopped sending to them after a while. So, it just is a more efficient way to like, make sure our traffic is a little bit more warm when we send those text messages.
Thomas Alvord: (10:49) That’s great. You know, for anyone listening, if you look at pricing for Twilio, if you were to use your own system, or build your own system, you’re at about three quarters of a Penny, so point 0.0075 cents, so just shy of one Penny to send a message if anyone’s listening and wants to build their own system one platform that I’ve seen that has the cheapest rate, it’s called Telnyx I’m probably saying it wrong, but it’s T-E-L-N-Y-X so it's not your name brand like Twilio, but it’s a quarter of a Penny to send a text message, and so that’s if you’re looking at a building your own platform that that’s the way to go, but that that’s what I struggle with, right? Because I look at and it’s like if I’m going to get somebody to opt in if somebody has messenger on their phone, every time you send a message, it’s going to pop up, and basically can send them unlimited messages for free.
Zach Smith: (11:48) So John going back to Facebook Messenger, and it sounds like again it’s kind of in their Sandbox still, it’s not quite there yet, what are your thoughts on Messenger for 2020 and beyond? You feel like Facebook Messenger is going to become the new SMS, MMS type platform or you’d like there’s still a lot of work there, and why haven’t you maybe delve into that a little bit more.
John Coyle: (12:07) So we do build some pretty big messenger lists, but here’s the barrier – here the barriers here the issues where we don’t like go all in on messenger. Number one diversification, right, and I’ll talk about that in like, you know, broad sense a little bit later, but you don’t really own that data right, like Facebook still owns that data, whereas if you get somebody’s email or their phone number you own the data like you can take it across different tools or whatever. The other reason is, like in you, I don’t know if you’ve even seen this Thomas be like or if you guys seen this like Facebook is changing the rules on what you can do on messenger constantly, so they like earlier this year, they started being a lot more strict about the messages you could send to that list that you had created. Already, though, you have to send like there is sort of the engagement period, so if you don’t have like subscription, you have to send them a another message that gets them to engage they have to engage with that message, then you can send them a message with your link in it, where we could partially.
Zach Smith: (13:05) Yes, I found that really interesting.
John Coyle: (13:07) Yes, and Facebook is actually like, they made it like even tighter earlier this year where we had to like start saying that this was like a Community Update, which if you kind of squint it is a Community Update, but it's like if I wouldn’t want anyone from compliance at Facebook to take a close look, right, and anytime I’m thinking things like that I don’t love it, so that.
Zach Smith: (13:31) That make sense.
John Coyle: (13:31) That’s why I’m not all in on that platform, but that said we do it like totally because it’s free, right, like that’s important audience you can reach for free, so we’re going to take advantage of that as much as we can for sure.
Zach Smith: (13:41) If you had to peek inside the mind of Facebook do they become more like Facebook’s traditional Ad platform in the future? Or do they become more and more strict?
John Coyle: (13:49) I kind of think so, I think they – I think you start buying impressions, you already can by impressions with your with your audience. I think, if you think about Facebook and Google like the traffic giants, 800 hundred pound gorillas of traffic like they’ve got so many buyers, so many people buying traffic that they’re sort of in this place where they are so concerned with the user experience, right? Because they’re like, what’s the worst thing we can do you lose our users. So, if you look at what they’re doing on the Ad platform on Messenger on Facebook, and then if you look at the updates Google’s making to their search algorithms it’s so geared toward trying to create a user experience that keeps people coming back and using it. So, I think the last thing that Facebook wants for messenger is it for is for it to become like people’s email inboxes where nowadays people’s email inboxes are crowded, there is tons that come up it's in their email inbox, and I actually don’t necessarily think that’s a totally bad thing because people expect you to promote to them in your in their inbox.
Zach Smith: (14:50) Yes, exactly.
John Coyle: (14:51) I don’t think that’s what Facebook wants for messenger, so.
Zach Smith: (14:54) Yes, that’s, that’s a good hard take I like that a lot. But we got into weeds a little bit here John I thought that was a fascinating conversation. So let’s get let’s get into kind of our first topic I guess you could say and that’s identifying successfully your competitive advantages and then aligning your marketing with them. I want to kind of kind of dive into that a little bit more and get a little bit of a broader picture for those that aren’t like maybe Thomas and myself and get really excited about the data and the numbers and everything. And just looking at this from a really broad level, you know, so, yes, let’s talk about that for a bit. Wherever you want to go.
John Coyle: (15:23) Yes, yes. So the comparison I make so I’ll just kind of give some background on my kind of what brought me to this sort of idea. You know, I work with a lot of direct to consumer brands who want to reach their audiences via you know, Facebook ads, Instagram ads, or whatever, some kind of paid traffic channel, you know, they want to increase their revenue from their email list stuff like this.
Zach Smith: (15:45) And for our audience, just to understand direct to consumer, they’ve got a product the consumer buys it. So it’s a toothbrush and you’re selling like that kind of thing, right?
John Coyle: (15:52) Right, you don’t sell it to target and target sells it to the consumer and you sell it directly to the consumer. So yes, so DTC, if you hear me say DTC that’s the abbreviation of that. So, see I’ll have a lot of DTC brands that come, they kind of want to acquire customers, they want to do it profitably, they’re bootstrapped, all that. And so they say, "Hey, well, you’re like a rock star Facebook advertiser. Right? So, you know, like, just make this happen for me." And that’s their strategy for, for doing it, is like, I’ll just go hire the best person I can find to do it. And, you know, that’s not like a bad idea. It’s like a pretty smart idea; it’s a very entrepreneurial type thing to do, right? Like, I don’t know how to do this, let me find someone who does. I was giving a presentation on this and like, on a Q&A panel somebody was asking me like, "How do I, you know, advertise this product on Facebook?" And I’m like, asking them questions about their product. I’m like, what, like, there’s no reason that people would buy this. Like, it doesn’t matter who you get to run Facebook Ads for you. You just like don’t have a reason for people to buy. So, I made the comparison for him like, Look, you know, like, let’s take like Lance Armstrong, right? Dude is super good, cyclist super doped up, right? Like all kinds of things going for him like, he’s probably the best person you can put on a bike in his prime if you want to win a race, right? If you’re not worried about doping at all. You put the guy on a tricycle, and he’s not going to win the Tour de France, like you just like the vehicle matters, okay? So, the competitive advantages that I’ll kind of lay out, I’ve got like six or seven of them I think they’re the vehicle, right? Like you need, these are the things you kind of need in order for the vehicle to sort of work and then you go get like the best cyclist you can get, or the best driver you can get or whatever, if that makes sense. So, that’s sort of the background on this idea.
Zach Smith: (17:38) That’s brilliant. I love it.
John Coyle: (17:38) So, yes, so the first one, like, you know, there’s, sort of two sort of categories here. And like, you know, you could say like, there’s like the front facing category, you know, and that’s like, things that you can highlight in your marketing or in your messaging. And then there’s like the back end category, and that’s like, you know, you -- like things like, Oh, you get this product, you know, cheaper than anybody else in the world can possibly get it by like 100 times or something like that, right? And that’s not necessarily a competitive advantage you can market, but you can utilize it, you know, in your marketing. So, I’ll talk about the competitive advantages and how you can use them.
Zach Smith: (18:18) Yes, so should we dive right into those?
John Coyle: (18:20) Yes, I'll dive in right now. So, first up is a like, you know, brand power or an influencer or a major influencer. So, examples I’ll give you examples on each category. So, Nike, with tones of brand power right and influencers you know, Kylie Cosmetics like Kylie Jenner’s cosmetic line, right huge influencer behind it. SNOW Teeth Whitening if you guys are familiar with SNOW Teeth Whitening, it’s like the teeth whitening brand that like Floyd Mayweather influenced before for Rob Gronkowski. So, that’s a big competitive advantages like kind of that celebrity power or that super big brand power right?
Zach Smith: (18:59) How powerful would you say that competitive advantages to get yourself a spot like that? I think –foreman and the Foreman Grill. Right?
John Coyle: (19:06) Right. Yes. I want to caution people here. I don’t want people to listen to this podcast and not already have this going for them and think like, I just need to go all in on influencers, I need to get like big celebrities behind this thing.
Zach Smith: (19:18) I love that caution, because I thought the same thing. A lot of times will work with people, if I just had this guy promoted, that’s all I need, and is that really true? Right? You have to ask yourself that question be honest with yourself.
John Coyle: (19:29) So yes, a little bit of insight there, like, you know, not to go too bit into the weeds on what you’re just saying, but I’ll tail off that a little bit. So, I’m pretty good, well, I shouldn’t say friends, I am fairly like, I know fairly well, like have a lot of similar connections, and we’ve – I’ve spoken at events with Josh Elizetxe who owns SNOW Teeth Whitening. He’s the CEO and Founder of SNOW Teeth Whitening. And one of the things he has said is that Floyd Mayweather doesn’t actually drive a ton of sales for them. There’s a couple things for them Mayweather does. So, I’ll get into a second, like what you can do if you’ve got major influencers, what you can do from an advertising perspective. But the other thing that Floyd Mayweather does for SNOW Teeth Whitening, you know, according to Josh, is that he is actually like that kind of banner influencer, that you then approach the influencer that has 250,000 followers, but they’re really highly engaged. But they’re kind of cheaper and you can negotiate the deal with them, that will get you a really good return on investment for investing in like a 200 – like a kind of a, what you might call a micro influencer compared to Floyd Mayweather. You know, you might get them to take an affiliate deal or you might get them to take you know, a less good deal because they get to promote the same product that that Floyd’s that Floyd Money Mayweather is promoting or that Rob Gronkowski is promoting. So, that’s what that big influencer does. That’s like one thing that they do. The other thing that you know, I want to put a caution out there because I have a good friend who, you know, is a media buyers, like, a Facebook advertiser, that’s the main thing he does. And he’s working with some brands, that I won’t name drop on his behalf but some brands with some, you know, maybe Jenner family cut, you know, Jenner family, Kardashian family influencers working with them.
Zach Smith: (21:15) You say they are the top – world when you’re talking…
John Coyle: (21:21) Well that’s – it got the biggest, right, yes, they’re probably up there, you know, in terms of physical products especially. So, you know, he actually has a whole presentation he’s given about, they paid, you know, this person for a post right, like, just straight up, paid her fee. She says, "This is my fee," you know, and they paid it for a post. And he’s like; it’s the biggest loss we’ve ever had on a campaign in terms of ROI.
Zach Smith: (21:48) Like it.
John Coyle: (21:48) He’s like, it’s one of the biggest fails of my career. So, then they went back to her and they said, "Okay, I’ll tell you what, like we'll pay you less for the post, but what we will do is we’ll pay you 5% of all the sales that come, you know, they give her some tracking links and stuff like that 5% of all the sales that come through your posts. But in exchange for that, we want to be able to use the content you create in Ads that we run. Right?" And this is how you use influencers now.
Zach Smith: (22:14) And they get her to promote or him to promote for, you know, 5% to 10% percent of what they drive or do they also have to pay a fee to be able to license what they create, like what Alan said, because I found from our experience, influencers want that $100,000 fee to post and they won’t work on performance, probably because they know their performance is pretty crappy. Right? Well, it’s all about branding.
John Coyle: (22:35) Yes, so that’s kind of what his take on it was, he’s like, you got to grease the wheels with money, you can’t just give them performance, they won’t take it. You can negotiate them down from their big fee by saying "Hey, like look, I’m going to take your content and I’m going to run paid traffic to it. So you’re going to get more followers and you’re going to get 5% of the sales." And so then you just say "Hey, look like you know, you negotiate, you figure out what they will do." Like what’s the lowest they’ll go for a post and if they won’t drop their fee a lot of times he says what "If they won’t drop their fee what I will do is I’ll just try and negotiate more posts out of them so I’ve got more content to run for ads" and then I’ll run it and then once they start seeing those commissions come in, because I’m putting paid traffic behind it, you know, they’re going to start making money. Once they start seeing that come in, the deal gets a whole lot easier to make, you know.
Zach Smith: (23:22) Yes that’s smart I like it.
John Coyle: (23:24) So this is how you use influencers don’t just like go start paying $100,000 to get, you know, generous to promote your product.
Zach Smith: (23:29) …2020 and beyond, I love that it’s a little bit of a hybrid way of going about I think that might be the most brilliant solution we’ve heard out of all the different ways people talk about using influencers and the failures they’ve had with influencers, right, what you’re saying, you know,
Thomas Alvord: (23:46) And what level of influencers are you going for? Obviously, you have your YouTube celebrities, and then you have your major sports celebrities, right, etcetera. At what level, do you – that’s not big enough? Or does it need to be a celebrity that kind of the mass population recognizes?
John Coyle: (24:07) Yes, I mean I think a little bit of it depends on how deep your pockets are right because you got to keep in mind you’re going to have to grease the wheels with this influencer and pay for some posts initially.
Zach Smith: (24:17) So I did – I understand you correctly as John this isn’t Pam wants be done this is how can we be working together two years down the road still? And you’re still our brand ambassador?
John Coyle: (24:28) Yes, yes, you got it, that’s exactly right. So, a couple of strategies – like I’ll highlight like the opposite end strategy for you guys. Like you know, if you’re not going to go with like a Gronk or like a, you know, Kylie Jenner or something like that. You know, what we do, I have a brand that is like a home decor brand. And you know, they’ve got some, they’ve got some dollars to spend on influencers. But what we actually do instead is we find the people and this is like, this is a little hacky, and it’s a little in the weeds. But like, we find people whose Instagram feeds just like reflect what we want. Like, they’re like, hey visually – we’re like, hey, visually, this is awesome. Like, this is what we want associated with our brand. But we find people who it’s like, oh, it’s very clear that this person wants to be an influencer, but they don’t have a very big following. And we just send them product. And they’ll usually post about it.
Zach Smith: (25:16) How are you finding those people? Because that’s brilliant, I love the strategy. But how do you, how do you do that at scale? So, you’ll find 100 people like that in the world, that have that type of network, you know?
John Coyle: (25:27) At scale, it’s, it’s a manual process. So, this is actually probably the beautiful thing about it is that it is a manual process, and that’s why like, not a whole bunch of people exploring it. So yes, VA is probably would be the way to do it at scale, but you’re going to have to, dial in the process beforehand, on…
Zach Smith: (25:46) Going and finding – finding these people, maybe they got 20 – 30,000 people, they don’t even really know their name but they probably want to be like –okay, got you. And then you’re saying "Look, 5000 or less, and you’re like, this could be a really good contact, they’re not really doing much. Let’s approach them and be and let’s give them that celebrity feel, and then they feel real special, they might hook you up. But then you find more like that once you found that profile that avatar.
John Coyle: (26:10) Yes, exactly. And so yes, they don’t even – they don’t realize the value that they could bring, and they’re just stoked to get some product from you. And but then yes, you give them the product they post, you know, and then you say, and then you just take that same kind of approach like, "Hey, I want to – you know, use I want to advertise from here." So another big side of this is data. So, any influencer you work with, you want to try to see if you can advertise from their Instagram account, right? And these people are easy to pitch on this because; you’re going to say like, "Hey, I’m going to advertise for your Instagram account. Like you’re just going to get more followers." The person has 3000 followers and they want, you know, to be an influencer. They’re like, "Yes, I’m stoked on that." The people who are major celebrities, they’re going to be like, wait, well you know, like, they’re going to be the ones who have....
Zach Smith: (26:51) Yes, exactly wait, are you going hurt my name? Are you going to tarnish my reputation?
John Coyle: (26:54) Yes. So then you have to kind of go into like, no, we’re only going to advertise content, you’ve created and stuff like that. So, yes like you know, you use these micro people, you just say, "Hey, we’re going to like pay to grow your following. And you know, sometimes you might not even have to give them a commission, but you can kick them a little commission as well. And then you know, you probably can even leverage that what we’re kind of working on, you can probably even leverage that into an exclusive relationship with them. So, you know, you’re going to grow their following they’re going to get bigger, other people are going to start approaching them. But you could probably nail that exclusive relationship. So you know, that person for home decor can’t promote another brand, right?
Zach Smith: (27:27) You are a talent scout for Instagram and Facebook.
John Coyle: (27:30) Yes, some of the cut throat I guess but its I mean, you’re giving them their break, right? And then I don’t know if you treat them fairly, they’re going to be happy with it. You can even…
Zach Smith: (27:36) It’s a pretty good deal for somebody who has 3,000 to 5,000 followers and doesn’t necessarily know what they’re doing. But in their mind, they want to become that was Uber celebrity and here you are the expert Facebook marketer, the expert Instagram advertiser willing to help them you know, and it’s a pretty good trick.
John Coyle: (27:57) Right, yes. And so you’re just kind of like, you know, making sure you don’t have the liability of them jumping ship you know, but yes, like and you can get them to do probably a lot of content for you like so much more than you can get that celebrity to do what I mean?
Zach Smith: (28:10) Are you trying to get them to post organically or with paid Ads or a combination? Because – it feels like having the brand run on their own Instagram would be more beneficial because then you’re getting those followers and then you can post organically to them for free for however long in the future.
John Coyle: (28:31) So we – our approach and given this isn’t super fleshed out, right? So, if you want to flush this out more like feel free, you know, let me know how it goes for you. But our approach is essentially that we'll reach out to them will say, "Hey, we want to send you this product. You know, we love your feed, like you know, can we just send you this product for free?" And they’ll be like, "Yes, great. Send it to me." And then I just say, you know, "Hey, well I just want to confirm you know, will you post about this? And then when you post about this, would you also whether you post a content – I’m not telling you even have to post all of this content, and a lot of times I don’t even tell them they have to post I just figured they probably will. But I was like, Hey, I’ll just say like, "Hey, I just love the way that you create videos and you create photos. Like, I’m, I just need more content, you know, to promote this product. So if I send you one of these, you know, whether you posted in or not, would you mind shooting a video like this and a video like this? And these two types of photos, right?" So I’ll give them like two or three different kind of pieces of content. And then I’ll just say like, and would you mind if I use those for ads? So like, if it goes no further, basically, what I’ve just done is I’ve crowdsource some user generated content by just sending a product to someone I know creates good user generated content. And then I can use that user generated content in Ads from my own page, if it goes no further. But if they do post about it, and they like it and stuff like that, you know, like I can, I can leverage it from there and be like, "Hey, can I you know, advertise your content from your page and grow your followers for you?" And if they’re like, sketched out about it like I can offer him a little commission…
Zach Smith: (30:02) And when you say, content, are you referring it to the content that they created of the product you sent them?
John Coyle: (30:06) Yes, so the photos and videos when I say content like assets or whatever you want to call those the actual photos and videos. So my initial ask of them is like, you know, it might not even be an ask for them to post, it might just be like, "Hey, I just love like the videos and photos in your feed. Like would – if I sent you this like, would you just create – like a video like this for me and a photo like this for me and allow me to use that in Ads and if you want, I’ll tag you" or like you can even say like "I’m totally flexible, if you want to stay anonymous, you can if you want I can tag you if you want you know, whatever I just I love what you do and we’re looking for more good content that is a little bit more genuine than what we create in the studio." And there you were pretty damping up.
Zach Smith: (30:47) I want to take a pause here and just kind of give a little bit of takeaway to Funded Today Nation our listeners. The reason this works and we’ve talked about this before, and Thomas and I do this all the time at our own company. When we do bonuses or when we want to talk about incentives, we could give like $1,000 bonus or we could give $1,000 amazon gift card, or we could give a concert away or we could give a trip away…
Thomas Alvord: (31:09) Or a Massage.
Zach Smith: (31:12) Or a whatever massage whatever a 100% of the time giving away product, giving away an experience is better than giving away cash. And it carries long term value and relationship, and if you’re trying to build relationships with people you don’t know on Instagram, what John has just described here is extremely powerful. We just barely did this full disclosure with OSNAP. We work with one of the biggest celebrities in the world who had done a lot of promotion believe it or not, for the product PopSocket, which did $168 million in 2018 and was like number two or three on the Inc. 5000 list for that year. And we worked with this celebrity who was no longer working with PopSocket because PopSocket had grown so big that I guess they had you know, not renewed the contract or whatever. And we were able to get all kinds of relationships simply from sending out OSNAP product to this person. And it worked brilliantly even though this person had probably made 10s of thousands of dollars in promotions and affiliate relationships and all kinds of things because she was looking to start that relationship up again with somebody else. So, it works really well. Now, John, a follow up question for you. How do you get in touch with these people? Is it easy because they’re only you know, those 3,000 to 5000 people so maybe they’re not getting bombarded like those million person plus Instagram celebrities and influencers? Or do you find that you have to be creative in your Ad copy to engage with them?
John Coyle: (32:23) Yes. So, for first in line, like, you probably know a couple of them that like, you know, just are in your Instagram feed that like you went to high school with, right? Like, this is just the environment we live in.
Zach Smith: (32:34) Friends, families, fools, etcetera. Who, do you know, who can help you? Why would they help you? Well, we’re friends; we’re from the same high school. We’re from this man you’re doing so good in your life right now? What’s going on? You know? Yes, very cool.
John Coyle: (32:45) So, that first and then second, like yes, if they’re like less than 5,000 people and you just like slept, for lack of a better term, slide their DM's on Instagram, and just go like "Hey, I want to send you some free product like you know, because I love your feed" like, yes, I mean, that’s, probably going to get you there, you probably be fine.
Zach Smith: (33:02) Let me ask a question, John, that I’m quite curious about. On one end of the spectrum, and I’m going to step back real quick, on one end of the marketing spectrum, you have direct response marketing. And then on the other end of the spectrum, you have branding, right? So, with direct response marketing, that would be somebody running a Facebook ad, driving traffic directly to the landing page where somebody can make a purchase, and then you’re trying to get them to convert right there to make the buy, or whatever that action is you’re wanting them to make. And then on the completely other end it would be branding, where you’re just trying to get your name out there, right? The branding is you’re driving down the street, you see the McDonald’s billboard, ad, you got all this branding. So then, a week later when you’re hungry, and you think I want to go eat at McDonald’s, right? Obviously that stuff, I’m just kind of sharing that – Coca-Cola Super Bowl Ad with the polar bears? Sure Exactly. And so with Instagram, it feels like it’s a hybrid of not quite direct response marketing because it’s not that targeted, but it’s more branding. And with my experience, right because we work with so many startups launching their campaign on Kickstarter and elsewhere, that so often we tell them, "Look, don’t worry about branding, you need to generate revenue, right?" When you’re spending a dollar, you can’t, you’re not trying to do branding. So somebody’s buying your product a year down the road you need to get the sales, like you buy the clicks. And then 10 minutes later somebody is buying, right? That’s what you need to do as a startup. So, at what stage for I don’t know if you work with different stages of companies from just launching to maybe 10, 15 employees to established brands, at what point are you working with these influencers and kind of taking this approach you mentioned or kind of once you have some extra cash so then kind of build a branding are you doing that?
John Coyle: (35:10) So there’s, you know, any of the competitive advantage, I’ll talk about, you know, so brand power influencer, you know, like that they can apply at any stage, but there’s, sort of three kind of stages that I define when I’m working with a brand. And the first stage is like traction, and that’s kind of what you mentioned, where it’s like, "Hey, you know, like, we need our Ad dollars to turn into more Ad dollars or we’re going to be bankrupt like next week, right? Or we’re going to be out of business like really, really quick, right?" And that’s, you know, because I’m working with all bootstrapped brands. So, initially what we need is we need some kind of traction, right? So, we need a way to turn you know, whatever dollars we have in budget into more dollars and that could be like any number of ways for business, usually the ones that are working with me, it’s like we're going to spend money on Ads and we need it to ROI for us. But if it’s like, we don’t even have money for ads, then you might be saying like, "Okay, well, I need to figure out how to get target to pick up my product or how to get – how to get selling on Amazon or something like that, right? And so that’s kind of the traction stage, and then the next stage is like, you know, I call it like in, you can call like fortification or diversification. So, usually what happens in the traction stage is we find like one thing that works, right? So, we get Facebook Ads working for us, we get Google Ads working for us. And you can call that a sales channel or traffic channel. But to scale really hard just on that one thing that works is really risky, right? Because it could get pulled out, you know, from under you at any time. It’s not really you don’t own the traffic somebody else does – you don’t own the yes, and that’s really it. Like, you know, whether you’re going through a retailer, Amazon or whether you’re buying traffic, you don’t own that traffic, someone else, owns it and you’re buying it. So, in the in the fortification phase or the diversification phase, that could look like you know, being like, okay, well, let’s, let’s find some other traffic channels that will do what we need. You still need all of your traffic to return an ROI, right? So, let’s say we got Facebook and Instagram Ads working well, maybe we should start selling on Amazon as well or "Hey, we got Facebook and Instagram Ads working, maybe we should use influencers or maybe we should try – try Google or YouTube and see if that works or maybe we should go into retail and see if that works. But we’re just diversifying and making sure that like if that main sales channel or main traffic channel gets pulled out from under us or it gets really, really expensive or it stops buying or you know, if it’s a retailer, they stopped buying from us or something like that. There’s making sure like, we’re going to kind of keep – be able to keep the lights on, if that happens. And then you know, the last stage is like scale, right? So, once we’ve got a few of those diversifications, you know, we’re just going to scale up and keep adding diversifications, but the thing about like, kind of diversification or fortification and scale, it’s sort of a cyclical thing, like you’re always doing both. But I always say like in the fortification stage, you want to allocate some resource whether those are that’s, you know, because you’ve already got traction. So, you’ve got some kind of profit coming in. So, you want to take some of those profit dollars and allocate them in ways that you’re like, "Hey, I don’t know if this will actually return, – this $1 will return $2 today, but it potentially will, and it’s a diversification from what I’m already doing. So yes, like that’s, that’s sort of why it’s in that stage after traction. At traction, you just need to get one thing to work. So, you know, influencers can live at traction, but you’ve got to be able to do it, right. Like you don’t, you know, if you just go pay a celebrity for a post, and you’re like thinking, "Oh, well, that will just give me so much brand reach", like, that’s the wrong fit you’re in the traction stage. Like you need to look at how can I use influencers, like use the resources or budget that I have to use influencers in a way that is going to return, you know, make my dollars return dollars, you know, profitable dollars, instantly, right? And so it’s like, "Hey, If I can send it to people who have, you know, you might (inaudible) and say, "Hey, I’m going to send it to people who have less than 5,000 followers, and I’m just going to get them to post just for sending them a product, I can afford to do that." And even if each of those people only sends two or three sales, like that’s profitable for me, you know, and I’m just going to do that, I’m just going to like hunt Instagram for as many of those people as possible. And that’s your initial like strategy. Right? So, it could live in the traction stage, it can live in that diversification stage or the scale stage, it can really live anywhere. But what is important about it is like the mindset around it, if you’re in the traction stage, you can't have a branding mindset.
Thomas Alvord: (39:38) I love what you shared, and it made me think of something right? As we’re discussing all these strategies, people who might be listening to this if they’ve listened to a lot of podcasts or some or like to research. There are so many different ways to skin a cat so to speak, right? There is so many ways you can market a brand, market a product. And the stuff John is sharing is something as I had never heard of that I think a very innovative and unique, and I think, ingenious right? They are great. But somebody who’s looking at starting a business shouldn’t feel overwhelmed like, "Oh, here’s all this stuff," right? The most important thing, my recommendation is sit down, think what’s going to make the most sense or like John said, just go start with Facebook Ads right? And the goal is to get traction, and then once you have traction, then worry about diversification. Don’t try to do everything at once, or you’ll end up doing nothing,
Zach Smith: (40:34) Another word for another word for traction is product market fit. Thomas and I found that really early on with Funded Today. We raised 100,000 plus for a project and suddenly 20 more people wanted us to see if we could do that for them. We knew there was something there, it was easy to tell. There are some businesses it’s going to take a while to explain it’s going to take – we understand that. But by and large if you’re looking for the quick wins, if you’re looking for what’s going to make sense or not, John’s story is probably very similar. He did well for some people, other people wanted him to do well for them. That’s when you know, you’ve achieved that product market fit. If it’s a product, you have a bunch of people saying, "I want one of those, I want one of those," or you run a Facebook Ad and people are tagging their friends. Those are early signs that you have something that other people want.
John Coyle: (41:19) You guys didn’t start Funded Today with the podcast.
Zach Smith: (41:19) No, that’s another great, I love that, yes. love that.
John Coyle: (41:26) Yes and I mean, my overlying message here, like I think, you know, you guys are like – it’s I love getting in the weeds on tactical stuff, and we kind of keep doing that here. But, and that’s great, because I think, people who can use that can use that. But my overlying message here is essentially saying like, "Hey, you know, identify the stage that you’re in, and then identify like, what your competitive advantages are, and that will really highlight your probably traction path or your diversity, like whatever the kind of next actions you should take. If what stage you’re in and what your competitive advantages are, it’s kind of easy to figure it out.
Zach Smith: (42:00) Do we want to keep going down that list and just rapid fire some of those now, John?
John Coyle: (42:03) Yes, I’ll straight get into that, because we spent a lot of time on influencers.
Zach Smith: (42:04) I don’t mind if this one goes a little long because I do find the content fascinating and I think some of the stuff we’ve talked about its going to be really applicable to our listeners. So, don’t feel rushed by any means.
John Coyle: (42:13) Well, I’ll tell you what, I’ll give you the headlines of the others that I have on the list. And then then you guys will know like, what we want to spend more time on stuff. So, like a brand power influencer, you know, backing that’s kind of number one. Offer, you know, your ability to create an offer that’s number two, and your messaging like unique messaging or unique angle or a unique selling proposition, a unique product like this, what we see a lot of on Facebook, right? That’s number three, your cost or ability to pay, right? Do you have for some reason, the ability to pay more to acquire a customer than anyone else? That’s a competitive advantage. Yes, margins or lifetime values, right? It’s, a combination.
Zach Smith: (42:52) Yes, lifetime value, that’s a good way to look at it too. A lot of people are afraid to breakeven because they don’t necessarily have anything on the back end, but that’s something to consider for a lot of people. If you can breakeven now and suddenly have 100,000 person email list, will you essentially have 100,000 people that are going to generate you 100% net profit on whatever you decide to sell them next?
John Coyle: (43:11) Yes, so yes, I’ll hit your I’ll hit my headlines here. And then I’ll give you the examples on those headlines, and then you guys can decide whether you want to dive deeper. So, trend is another one. So like, you know, like, this is just like super on trend right now and might not be on trend next week, but you don’t care because you’re just kind of making money when you can. And then massive demand is another one like, you know, this could go hand in hand with trend. But you know, massive demand, kind of the differentiator I say it's like your best friend, if you’re trying to sell something that has massive demand is like your best friend is hungry market. Right? So you’ve then there’s not a lot of people there’s more demand than supply for something. So, that’s kind of another competitive advantage. And then last but not least, is data right? So, do you have like a massive amount of data, of customer, right? Or have people who buy your type of stuff you know, and then kind of the last thing I’ll say here is like, honestly, if you really want to be successful, you want to stack these competitive advantages.
Zach Smith: (44:08) You need them all?
John Coyle: (44:10) Yes. As many as you can.
Zach Smith: (44:12) It’s like our Seven P’s we talked about if you’re even missing one of those seven P’s, your chances for success diminished drastically. The same is true with these competitive advantages. The more you have, the stronger you’re going to be.
John Coyle: (44:23) I’ll give you the examples on each headline there. So like, you know, an example of offer is everyone knows is Wish, right? Like they sell everything so much cheaper than everybody else, right? Like, quality varies, right? Mileage may vary, but everybody knows like hey like, you want to get it cheap, you go to Wish. They just have that like really crazy good offer. And that is actually stacked with their competitive advantage of cost, right? They’re getting the product to people cheaper than anyone else’s, and they’re passing that savings along. Another big thing we are seeing on the opposite side. So, let’s say you can’t get it cheaper, or a lot of these giveaway companies, right? So, you can sell commodities this way so we worked with a company that they sell hats and shirts, right? Like everybody sells hats and shirts, but what do they – like they say "Hey, what? Now, we sell hats and shirts to people who are into diesel trucks and we do that by making every $5 you spend on our site enter you to win $100,000 like diesel truck, right?" So they sell hats – first people this – so they have this unique offering, right? So, that’s like a really, that’s a really great competitive advantage to have like just this really strong like stand out offer. Messaging, Hook 'n Hang also like that’s like the unique products that you’re seeing on Facebook like oh, this product does something you’ve never seen before like you know, it’s like you didn’t know you need it until you saw this video type of thing.
Zach Smith: (45:45) We talked about this on Kickstarter all the time on that one John. We just call it never been seen before on Kickstarter. There are some things that actually have been seen before other places, but the Kickstarter community themselves haven’t seen it. It appears new and unique to them, and that makes all difference.
John Coyle: (45:59) Right, yes. So, and then the other way you can spend this is like I have some insight into like, I don’t know if I should name the brand but well I will I can so Blissy, they sell like bedding products. They sell silk pillows sheets, silk pillows sheets are not a new thing, it’s like a its commodity. But they do it with kind of like, advertorial type angles of like, this is like the beauty secret of celebrities type of thing or this is this mom realized that her daughter had acne because their pillowcase was disgusting type of thing. So like, a new way to spin an old thing is another way to do this. But like basically the overarching idea here on a competitive advantage is like this is kind of one that can be manufactured if you don’t have it, but you have to have like a way that like stands out to say, something new. The example we’ve used is like a wood sunglass brand, which I’ll get to in a second. Like wood sunglass brand that actually has a different competitive advantage if you go back two years but, they like we started saying like, "Hey, you know, instead of just saying these are weird sunglasses" like, why don’t we just start saying like, "Oh, these are sunglasses for wake boarders or these are sunglasses for surfers, or these are like, these are special sunglasses for people like jet ski, right?" or something like that. So it’s like, "Oh, no, like now like these aren’t just wooden sunglasses like these are jet skier sunglasses.
Zach Smith: (47:29) We saw that with one of our clients from several years ago. Thomas might remember William Painter, a lot of people in Funded Today still wear them. William Painter basically said, "These are celebrity sunglasses, wear the sunglasses of the celebrities". And that made all the difference. Every time I wear them, I’m like, I’m wearing the same sunglasses, it even works for me.
John Coyle: (47:44) Yes, so that’s a competitive advantage like some kind of unique hook or angle messaging unique selling proposition.
Zach Smith: (47:44) By the way John, playing off what you talked about earlier with influencers. They weren’t necessarily the sunglasses of celebrities. They sent out hundreds of free pairs for all the famous celebrities, the celebrities took a picture with them on their Instagram, you know.
John Coyle: (48:03) Yes, you can see how they start to intracrine these different competitive brand. So another one is cost or ability to pay. And you can see how this goes hand-in-hand with offer, like Wish uses their competitive advantage of cost, like they’ve got the products at the best cost. And they have, deep pockets so they have ability to pay a lot to acquire somebody who’s a customer because they’ve have lifetime values. So, they leverage you know, so they’ve got that – they leverage that to create the offer competitive advantage to. So Uber is a good example here not bootstrapped obviously, and they’ve already come out and said, like, "Hey, we might never be profitable," but they just had deep enough pockets that they’re like, "Hey, we’ve got the ability to pay a lot." Another great advantage here is like, you know, the some of the supplement brands out there that just have crazy, crazy, high lifetime values. You know, so they might be able to pay $100 to acquire a customer who only buys something for $50 because they know, you know, in a month they’re going to buy another one and another month they’re going to buy another one. And on average, somebody buys, you know, five of these things, type of thing.
Zach Smith: (49:04) Now taking this to a micro level John, just for our Crowdfunding listeners, specifically. When you’re developing your first Crowdfunding product, you really need to be thinking about your next two, three, four, because that’s where this cost factor can really play into the customer lifetime value. So keep that in mind. Just as a takeaway, if you’re thinking about this, specifically, as it relates to Kickstarter, Indiegogo, where do I go next? Yes, you’ve got your first great idea. What’s your next? What’s your third, what’s your fourth? Because that’s where the true exponential dividends come into play, I would say.
John Coyle: (49:32) So, the next thing I’ve got on my list here is trend right? So, you’re selling something that’s on trend. So the example I have here is a little bit old, but its Fidget Spinners, because I actually know the guy who created fidgety was like, you know, one of the biggest Fidget Spinners but sites. And the name of the game on trend is just be first to the market right early bird gets the worm. So like, you know, this is where all your drop shippers live like they’re just trying to ride whatever trends going to come next. So yes, I mean, if you’re, talking about Crowdfunding, like a lot of times you know, so the wood sunglass brand that I mentioned, like they got they were some of the biggest sunglass campaigns of all time on Kickstarter. They’ve got a couple of the top 10 because they were selling wood sunglasses, when wood sunglasses were super trendy.
Zach Smith: (50:14) We saw that trend on Kickstarter, it was Wallets then it was Smart Look, this year I would say it’s maybe Green. It’s what can be Green and ecofriendly.
John Coyle: (50:23) So, trend is another like big if you’re selling something that’s on trend, that’s, a competitive advantage. You have to figure out how to leverage these competitive advantages into your long term business, though. So, then the last one is, yes, massive demand. And that’s like, you know, the example I have there is like, you know, selling like, any kind of food product like everybody needs that right. Or like…
Thomas Alvord: (50:44) Ubiquity.
Zach Smith: (50:45) That’s what we always talk about. How ubiquitous is it? How big can your market be?
John Coyle: (50:50) Yes, so, that’s a good competitive advantage, too. So yes, I don’t know if there’s any there that you guys are kind of like, hey, let’s dive deeper into that, but.
Zach Smith: (50:56) I think you’ve done a really good summary of them and kind of – back and forth. I think, you know, even your examples really help people understand. I would say, just as you listen to this Funded Today Nation, you try to think about how these particular competitive advantages can be taken to that micro level of your product or your next big idea. And I think it’ll open up a lot of doors for you that may not have even, you may not have even thought about before. So, perfect, I love that John.
John Coyle: (51:21) Yes, sorry. I did miss one. So, the last one would be data, that it sounds like you guys are kind of talking to a lot of people who are in early stages, so that might not necessarily be the case.
Zach Smith: (51:34) But data is where people hire companies like you or companies like us who have millions of different data points and millions of different look alikes for all kinds of products around the world. So, if you don’t – like you talked about earlier. As an entrepreneur, it is best to hire the best. And in situations like this, where you need that data point to target these people. You look at people who have targeted similar products and similar businesses and say, "Look, where I might be able to fit into this. What can you do for me?" That’s where a data – nowadays with Facebook and Instagram, what you’re seeing with Snapchat and different things like that, Pinterest even maybe coming along a bit, you know, in that regard and data combining those look alikes, we got a whole episode on that. And Thomas talks about, you know, it’s powerful.
John Coyle: (52:09) The example I always give is like, you know, MVMT Watches, right? It’s huge, but if MVMT Watches launched from scratch today. They I don’t know, you know, I don’t know how big they get, but they certainly couldn’t grow the way that they did.
Zach Smith: (52:23) That’s perfect example. I mean, we've seen those watches us it’s so hard to stand out as a watch on Kickstarter. Because we’ve probably ran, I don’t know 150 watch campaigns ourselves at Funded Today. There’s just so many different people trying to create that next MVMT and really MVMT probably dominates all of them even today.
John Coyle: (52:39) Right, because they’ve got massive data. So yes, so the last thing I’ll say is like, you know, I’ll give you an example of stacking advantages here. So, like, you know, I’ve got a client a former client we used to work with them they brought everything in house actually because they got that happens a lot when I get people to a certain size but…
Zach Smith: (53:00) I think its common and nature I don’t even think as marketers, we need to feel bad about that agency.
John Coyle: (53:03) I feel great about it, yes.
Zach Smith: (53:06) Taking them to a level where they don’t need you anymore. Yes, it’s sad; we all want to work with them forever. But truly, that’s when they’ve reached success, and they can spread their wings and fly.
John Coyle: (53:14) Yes, I end up training their insight – their in-house team, so it’s great. Yes, so they’re there – yes. So, they’ve got a couple I mentioned them earlier, but they’ve got a couple here and I’ll let you I’ll just like say a promotion that they do. And we’ll see if you guys can kind of spot the headlines, right? So, like, yes, so they’ll like – they might do a promotion for Black Friday, right? Actually, you know, this is the promotion they did. They’ll do promotion for Black Friday, where they say, "Hey, yes, we sell hats, shirts, boots, you know, knives like different things like that on our website. Every dollar or every $5 you spend on our website gets you an entry to win this custom built diesel truck where it’s $100,000 truck." On top of that every order this weekend, so every order you place this weekend, we’re throwing cash in that order. So it could be $1, it could be $10 could be $100 one person is going to win five grand though, right? So we’re going to throw five grand in one order, right? So we’ve got a couple offers there and then we’re also promoting the people who promoting that are people who are on a Discovery Channel reality show, you know, where they, I don’t want to give too much away, but you probably figured it out that they build diesel trucks, right? So, they’re well known in the diesel market. So yes, we’ve got those guys promoting it. We’ve got both those offers and ultimately, you know, I’m kind of giving it away. But the reason that they’re able to do these is because they’ve got, you know, really big margins on their products because they buy really low and they mark them up because of these extremely good offers. Red Bull does the same thing.
Zach Smith: (54:49) You might be buying tones of product at the same time too to create a higher minimum order quantity which will reduce their overall cost as well, right?
John Coyle: (54:56) Right. Yes. So, I mean that’s kind of what every $5 gets you an entry thing does. So what they’ll see a lot of actually this weekend when they do cash and orders because every order gets cash, but every $5 you spend gets you an entry to win the truck. They’ll see people place like 15 separate orders for 10 bucks or something like that. But you know, they make the money either way, so you know, its fine with them, but like the exact advantages there they’re using influencers they’re using niche relevant influencers, right? They’re using two offer stacks and they’re leveraging their high margins to create those offer stacks. And then you know, the last thing they’re kind of leveraging is that like, unique hook, you know, unique angle to sell, ubiquitous, like kind of commodity type product, and they’re doing that was like really great creatives. So, that’s if you’ve got like, yes, I guess I should have said that. Like, if that’s your angle, like "Hey, it’s, you know, unique messaging or unique selling proposition, like creatives are your friend, right, you’ve got to have great creative." So they’ve got to get all that stacked up – and that’s like a super big recipe for like really, really big sales.
Zach Smith: (56:06) Are you just salivating right now? Funded Today Nation, as you are listening to some of these things like does this get you excited with what you might be able to do with your product? Maybe I’m even having my wheels turn a little bit so John this is massive value awesome, awesome stuff.
John Coyle: (56:19) Yes, yes of course it's what I try to do.
Zach Smith: (56:22) Let’s get into kind of the final topic of the podcast today, I think this is a good chance to kind of transition. Strategizing successfully through the three phases of bootstrapped ecommerce. What recommendations do you have for our listeners and how best to go about creating a long term business that is going to last, and get past bootstrapping you know?
John Coyle: (56:39) Sure so like, first of all, like, you know, I think we have this sort of like, in the entrepreneurial world, especially with digital marketing world, we get a little bit like down on like formal education like there’s sort of this like culture of like "Ah, formal education is useless". But like, no joke, like if you didn’t go to business school or whatever, like Google SWOT analysis and do one and do a SWOT analysis of your business, because that will probably let you see what your competitive advantages are. So, no matter what phase you’re in, first thing you need to do it is you need to identify your competitive advantages, and you need to identify your threats. So, you know, that’s part of a SWOT analysis. And, yes, like, for example, like, if you were Crowdfunded, and you’ve got one product that you do a whole bunch of revenue on, like your main liability is that you’ve got one product, so you need to probably bring it to multiple sales channels or you need to launch another product or whatever. So yes, I guess I’m getting a little bit in the weeds on your question, but like, kind of first step is to identify like your competitive advantage and identify what phase you are in. And then like, I guess, the you know, the next action is sort of based on that, like, what is your competitive advantage? And what phase Are you in? If you’re in the traction phase, then you have to say like, "Okay, well, based on my competitive advantage, what do I need to do to probably get traction as fast as possible". If you are in the diversification stage, you know, you look at your competitive advantage and you say, "Hey, what, you know, besides the thing that I’ve got traction doing, you know, what is the most likely thing that’s going to return a good Ad spend for me, here? If you’re in the scale phase, you probably are looking at more of like, your threats, like how can I start stacking these competitive advantages or where am I really weak on these competitive advantages? Are my costs super high? Or maybe I need to start looking for ways to reduce costs? Or maybe I…
Zach Smith: (58:28) Well John – I love what you said there. And I know you said earlier in the podcast Funded Today didn’t start from a podcast. You’re exactly right, but we looked at that diversification stage and said, year or so ago, well, where else could we be adding value? Where else could we be standing out from the increased amount of competition that we have that we didn’t have? Five, six years ago, you know. And the podcast was a perfect thing to do to showcase our expertise to add a little bit of empathy to make ourselves resonate from all the different people yelling and screaming about whatever it is they’re offering. To show look, we practice what we preach here's what we’ve done. And let us open up the kimono, so to speak. Right? So I love that.
John Coyle: (59:04) Yes, yes. And that’s really like whatever phase you’re in, kind of look at your next best opportunity. If you’re in the scale phase, it might be like, "Hey, where can I stack more of these competitive advantages?" That’s usually what it is. So yes, that’s sort of next steps I guess for anybody who’s kind of listening to this, heard this is like, kind of write that out, on paper, and then decide like what your next action needs to be. And just focus on that one next action.
Zach Smith: (59:28) Don’t get overwhelmed with so many different choices you have out there, it’s usually there’s just one thing in front of you. And that one thing is different for every business owner or entrepreneur. But if you go through this process that John as so beautifully outlined, I think you’re going to know exactly where you need to go next.
John Coyle: (59:40) Yes, for sure.
Zach Smith: (59:44) Alright, John, anything else you want to add? Anything they got left out from this action packed episode?
John Coyle: (59:47) No, I think we covered it a lot. You know, it’s if you guys have any other questions you wanted to hit me with I’m open to answering those. But yes.
Zach Smith: (59:58) Thomas, any final words of wisdom before we jump into the product of the week segment?
Thomas Alvord: (60:03) I don’t, I think that was great. Thank you so much, John.
John Coyle: (60:06) Yes, of course.
Zach Smith: (60:07) That’s when you’ve done a good job, John, everybody is silent.
John Coyle: (60:10) Great.
Zach Smith: (60:12) Alright, Funded Today Nation, It is our favorite time of the episode now. It’s the Funded Today products of the week segment and I’m going to bring back one from just a few episodes ago because they are wrapping up their Indiegogo, Indemand campaign. And this one is Dale Backus you may remember him, we even had him on the episode, The Funded Today podcast sorry we've even had him on the Funded Today podcast a month or so ago. This is Ohsnap, the phone grip that doesn’t suck, originally we raised them $466,000, $467,000 and on Indiegogo that numbers climbed to $617,169 there is not a lot of time left on this one. But the good news is dale has been so successful. He’s already starting to take orders on his website. We’ve talked about Ohsnap a ton; this is the newest competitor to the $168 million Popsocket product. I think it has a lot of potential Popsocket only raised 18,000 several years ago on Kickstarter, this product has raised over half a million. So, big things coming for Dale and his product, Ohsnap, I think you’re going to love it, check it out, let us know your thoughts Thomas, What do you got for us?
Thomas Alvord: (61:18) My product of the week is Pale Blue batteries lithium batteries. And again this was one we had also shared in the past but sharing again, it’s on Indiegogo to raise another $1,000 dollars. These are high performance, super convenient batteries, but they’re also sustainable. They have a little plug and you can recharge your batteries. So, like we were just talking about like Zach mentioned right you want to get in with the trend this year has been the year of green I imagine, we’ll continue to see green moving forward. But these are the first of its kind batteries where you can recharge your batteries just with just like you can any of your other devices, your phone or anything else, it’s insane that we literally use our batteries and throw them away. That is such a waste of resources, it pollutes the earth, and it’s a waste of money too. So, check out Pale Blue, that’s P-A-L-E Blue on Indiegogo.
Zach Smith: (62:17) Now John, you have been such an amazing guest on this episode. So, for your product of the week, I want you to pitch your business and tell us where people can reach you. Tell us what you do, who you want to help, who your ideal customer is and maybe some of our listeners will end up being your loyal customers.
John Coyle: (62:30) Yes, of course. Thank you. So yes, if you’re kind of an ecommerce brand that sells physical products, and you specifically want to increase sales through your own website, right? So direct-to- consumer like we talked about earlier, then you probably you know, it’s definitely worth a chat to talk with me. You can go to www.explosivegrowthmarketing.com. You can learn a little bit more about us, there are couple of case studies they’re pretty simple website. But you know, there’s a few case studies and then there’s a spot where you can book a call with you know, one of my partners Van is very knowledgeable guy, and he can kind of figure out what your next step should be. If you’re a great fit for to work with us or if there’s some work. A lot of times we’ll kind of go over this stuff with you. So, if you’re not sure, like what your competitive advantages are, you’re not sure what phase you’re in? Yes, head to the website book a call with van and he’ll be able to, you know; kind of bang that out with you.
Zach Smith: (63:32) That’s awesome. So, you’re telling me Funded Today listeners can basically get a little deep dive session to see if they’re a good fit?
John Coyle: (63:38) Yes, that’s the idea. Well, because honestly, I need to go over this with people before they become clients, otherwise, it’s not great for me. So, yes, yes.
Zach Smith: (63:46) Yes, I love it. Okay, we will include a link to your website, and how to reach you in the show notes. You guys can check that out at fundedtoday.com/podcast for this individual episode. Thanks for being on our show again John, it was wonderful having you, I think Thomas and I got a lot out of this. And I know our listeners are too as well.
John Coyle: (64:03) Awesome, thanks for having me.
Zach Smith: (64:07) Next time – yes it’s been awesome. Next time, we want to hear from you, we want to know what topic you want to talk about. We don’t have one that we’re going to give you a little teaser on yet so let us know what you want to hear about. Otherwise, you’re going to get what Thomas and I think you want to hear about. And as always remember, don’t wait until tomorrow, get funded today.
Announcer: (64:27) Funded today is the worldwide leader in rewards based Crowdfunding on Kickstarter and Indiegogo. Combined, they have raised over $200 million and counting for thousands of new ideas and inventions worldwide. If you’ve got an idea for a new product or invention, visit fundedtoday.com to speak with one of their experts.
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