Ecommerce Growth: The 3-Pillar Framework We Use

That's happening on September the second at CTC's offices in sunny coast to Mesa, California. You're going to hear a keynote from our CEO Taylor to kick it off and then you're going to join a cohort of about 10 other brands rotating through workshop sessions where we're going to be talking about forecasting paid media, creative production, hiring, and AI tooling, all of the building blocks to get your seven-figure brand to the next level, uh, Lug Austin and Tony Chopp have

both been on this podcast regularly, are also going to be their in-person, so come meet them as well. So to grab tickets, just go to comethercode.com and hit the banner up top, we would love to see you there. All right, mom with the show. This episode of the e-commerce playbook podcast is brought to you by E-Capital. For many e-commerce operators, growth isn't limited by demand, it's limited by access to working capital.

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backed by inventory, and built specifically for e-commerce brands. Unlike traditional financing that provides a fixed amount upfront, liquid inventory gives you access to working capital as needed with additional availability as your inventory grows. Draw only what you need, pay interest only on the funds you use, and access additional capital as your business scales. Whether you're preparing for Q4,

expanding product lines, or scaling customer acquisition, liquid inventory is designed to grow alongside your business. Visit e-capital.com/liquid-hiphoninventory to learn more and see if your business qualifies. That's ecapital.com/liquid-hiphoninventory to learn more and see if your business qualifies. If folks, welcome to the e-commerce playbook podcast, I'm your host Richard Gaffin. Director of Digital Product Strategy here, a common thread collective, and I've joined today

by Mr. Luke Austin, who is our VP of e-commerce strategy here, a common thread. It's talked to us about a couple things, but mainly his big fish store. Before we get to that, look how you do it, man. I'm doing great. I'm going back from a little fishing excursion,

and this time of year is always an interest in one where you have the week and a half of the

role of Q3, you know, like maybe if you're lucky, you have like, okay, we're in between the end of season stuff and fourth of July, and then Q4 hits right away. Never, never, never do a moment, glad for for a few days, getting out, getting out on the water, and back in the saddle is always well. Yeah, of course. So, yesterday we had our big town hall for H2, Q3, Q4, and so part of what we were doing there and what you were sort of presenting to us as a group was defining

our goals and sort of the specific methods that we need to use to hit them and kind of frame

“it up in a literal big fish story, which I thought was awesome, because you and your dad, I think,”

went out on a fishing expedition and caused what a frankly an outrageous amount of enormous fish. So, I would before we hit record here, I was asking if that was luck or skill, but it sounds like well, actually, so where were you guys, yeah, of course it was skill, but where were exactly real fishing? Yeah, and for those listening to this, we're going to do a little story time here, so if you're interested to hear about a lot of Siddke last fishing for a few minutes and then

tied it into one of the things I've been reflecting on as it relates to that trip and how it

ties into three of the most critical things that we've seen be necessary for H2,

commerce brands to be able to grow effectively, that's where we're getting to, and this, and then we're going to talk about fish for a few minutes and then tied it into the big figure thing. So, yeah, my dad and I went to Siddke last, my dad's big fish when he's grown up fishing a lot, and I went fishing with him to grown up, but we talked about doing this trip for a while, so we're in Siddke last, the site of Puzzle, and then for familiar snow dogs as well.

“That's I think those are two Siddke's two claimed films as it relates to public pop culture,”

but flew in, small down Alaska, and it's a three-day fishing trip, right there for about 12 hours a day, just on the boat, catch and fish, and it was absolutely

incredible. It was like, and it's also like a negative cactm experience because we came back with

a little over 90 pounds of fresh fish, fish fillets, black caught or butterfish, stable fish, a lot of different salmon and lasking king, and halibut as well, and then some, some, so like over 90 pounds of fish fillets, which like covers the costs of the trip, so I could recommend this, recommend this trip enough, and you're out there like, you're out there on the water off the coast of Siddke, and you have your real-in-in fish, and you have the breeze

coming through the ships rocking, and you're seeing packs of orcas go through the water. We had a little juvenile great white swimming around the boat for a minute, too many humpback whales to even count circling around. There's a whale that had gotten hit by a cruise ship, unfortunately,

there, and there's a pack of bears eating the whale that had just gnarly stuff, and like the the National Drug Geographic ship, like that was out there, and so you're out there like

real-in-fish, just like seeing orcas jump, it's incredible. It was just an incredible experience,

that was oddly tiring days as well, a lot of core strength, cab strength, just holding yourself in the boat, all real-in-in, big, alaskan kings, and incredible trip, and and served for a lot of reflection time as well, coming back from the trip, but grateful for it. It was incredible time out there. Yeah, it's awesome. So part of what kind of happened over the course of this trip is it kind of inspired you, sort of thinking through some of the ways we need to approach as an agency or

goals for this second half, and so that part of the reason we wanted you on today was to kind of tell that story here and make that connection for everyone listening to the pottery now. So talk about a little bit about what you were explaining to us yesterday and how what you sort of realized over the course of that trip. So when I came back from the trip, probably 20 times over the

“course of the, you know, days following was supposed to question, how was the trip? How was the fishing trip?”

And it's interesting when you're asked the same question so many different times, it like at least for me, like I try to think about different ways to answer the question or really like reflect on it and orient around like, how do I even answer this question? How was the trip? Well, that's interesting. What are the criteria? What is the like, what is my feeling as a relates to that question and what I had expected as well? And so, and it got me thinking about like

for the brands that we partner with and for e-commerce brands a general, when you're running a business, the, the, answering the question around, is the outcome we're getting good or not? Are you satisfied with the outcome? Are you satisfied with the trajectory of your business, the outcomes that you're getting, how are things going for your e-commerce brand? Is it, is it really, can be a really loaded question, right? Like, there's a lot of different ways we can answer that question. And

what I came, what I came down to is there were three things that in reflect on my fishing trip, were like, these three things needed to be true for the outcome of the fishing trip to be what it was,

which is it was an incredible experience and like how I actually can reflect on. And those three

things are like, there's, there's direct parallels of those three things being in place, generally

“in terms of concepts as like, okay, answering the question, how are things going with your brand?”

Is it good or bad or otherwise and how are you, what's your, your framework for your framework for answering that question? So, I'll talk about the fishing trip first and I'll try this into how we think about answering this question for e-commerce, like, how are you doing, how are things going for the business? So, for the trip, there were sort of three things at the center of this question of how, how was the fishing trip? And what was the outcome? What made it be the success

that it was looking back on it? Like, why, why do I feel that this was an incredible trip and actually have a conviction that it, that it, that it, that it was and it's sessing that. So, the, the first thing that was absolutely necessary is we needed the right equipment and tools for this fishing trip to be what it was. We, we're on a charter boat with Captain, this, that's a

whole sort of other topic. These, these, these, these captains are incredible. They, they spent,

you know, 10, 15 years as deckhand, learning the whole area and then they go and buy their own 37 to 40 foot charter boat and these boats are incredible machines. They got $700,000 and finance against them and you're working 14 hour days, seven days a week mostly over the course of the fishing season to be able to pay off the boats, like just sort of incredible entrepreneurial spirit that it's on the, the coast of Sicca. So, we need, we need the right boat to be able to

get out in the deeper water to go when you're going for black cod, you're going 1,400 feet down, you're going to the depth of the sears tower to get to where the black cod are and since very specific, where it's the gradient of the, the gradient of the, the ocean floors in a certain way in which they like when you're going for halbit, you're about 350 to 400 feet down. You're going

“for salmon, you're, you need to get to shallower water and maybe even going where some of the”

streams are coming out to meet the ocean. So, this, this boat has to be very specific to like what you're, you're wanting to achieve and the type of fish that you want to get after and then the technology and tools that exist that are, the boat is equipped with without it, it's like you're, you're, you're literally dead in the water, like you just have nothing, you need GPS, you need the depth finder, like you need, you need all these tools to be able to understand where

we're at on the map, where the depth of the water is, where do the things under us and the water and be able to detect those with sonar and then and then you need communication as well because these captains are talking, all the time about what they're seeing in the water, you need to understand

going to scare off the certain fish that we're going after, right? Like, with other stuff like

“you, you can't, the boat can't get you to the places you need to be and you don't have the tools”

and technology, you even be able to make the decisions. Like, this, this is foundational to like, us having a good boat and having the tools that allow us to be able to make these decisions, otherwise like, you're, and it's funny, one of the days we had a boat that was smaller boat, older boat, less equipped boat and it was very apparent. Like, it was, it was, we didn't know as the day that we caught the least amount of fish and it was like, it was kind of the most disappointing

day because it was like, we could tell the captain was kind of guessing around some things like

it just wasn't, it wasn't the same. So the equipment and the vessel or critical. So that's

the thing one, thing two is relates to the expectations we had against the outcome of this trip. So there are four of us on this trip. Me and my dad, my good friend from middle school away back in the day and then my uncle who's gone in a couple of these trips and made some sort of connections for us. So there's four of us on the trip. All four of us are really close. Like, it's me, my dad and my uncle, you know, and one of my best friends. Like, we're, we have the amount of time,

though, despite that, that us four spent talking about what are what we're going to do that day, what the strategy was going to be for that specific day or even that block of time in the afternoon. We spent a lot of time having these discussions because we can see it like, we have a picture like all the fish we caught on each of the day. The first day, we caught a lot more

fish than the third day quantity wise. We had, we, we maxed out our limit on black cod,

maxed our limit on halibut, then we went for some rock fish and us caught our limit there. And then we ended the day with salmon and caught as many salmon as we could. It's a very specific strategy to maximize sort of the limit on those fish and then grind out as much salmon as you can, which are like the harder at this point in the year, the harder, the harder fish to catch. The last day, we had caught so much black cod the first two is that we didn't catch one black

“cod the final day. We didn't want to spend time because you have to go out an hour into deeper water.”

We didn't want to spend time. And so what we wanted to do was actually catch more salmon that day than we had any of the other days. And so we caught half the amount of fish in terms of the pound amount, but we got like three times as much salmon as that first day on the last day. But those are totally different outcomes. Like we could have done the like get three times as much fish as just a different composition of it versus the salmon like we and anything in between.

And there was other guys we were talking about and other boats were like the two days, they just did all salmon all those days and nothing else. And it's like that's what they wanted out of the out of the trip and the experience for themselves. So us four, I just spent a lot of time in conversation with one another to get to a place where we are agreed upon here's the plan for the day. So a lot of us to get to the end of the day and not just be like, oh wow, look at all this fish

that we caught. Oh we only have five salmon. This sucks, right? Like an effort to be a bummer third

of the trip and of the allocation. And then the thing three, so the final piece of this, we have, you have the equipment, vessel on the technology. You have the agreement between these the four people on the fishing trip around like what we're actually going after. What the objective is and strategy to get there. And then the third piece was the execution, which I was mentioned earlier, like was this, was everyone catching this much fish or was it skill? And this is

like, this is my plug for like, it did take some skill where like, and I showed a video in our in our company as well, like around around this and I've looked past some a couple of otherties, but like specifically for salmon, we probably reel then in terms of like the salmon being large enough, like half the amount of salmon that we have because of executional on our part. So when you're really in a salmon, the boats are doing a slow troll. So you're like one, two miles per hour.

You got a lot of tension on the rod and the salmon's doing all this crazy stuff to try to get

“off the hook, right? And so you're pulling the man. And so what you need to do is you need to keep”

really in and you need enough tension on the rod and you need to angle to be right so that the fish doesn't get off. Well, it's coming through. And then you get the boat rocking. So you've got like, kind of like wedge yourself and like a, you know, placed like, not fall over. And then when the boat gets close enough, it's actually when it gets, the fish gets close after the boat is actually when it gets hardest because the fish will start to come up on the side of the boat. And then you

start to relax, you're like, oh, the fish is right down here and you start to give some slack in the rod and you're like, oh, I've almost got it here. Cool. And the guy comes in with the net. Like so another person on the team is like, they are the net guy. So you got to get down there with the net. And right when the fish is there, you don't want to like break the line of it poking the net. And so you go like scoop it up in a certain direction, bringing on and then someone's got to take it off and

if it fits the limit, great. Keep it. If not, it's going back to the ocean. And there's another guy with like a backup boat because it's another pole in the water. And he's watching it hold the

got closer to the boat because they're like starting to go towards the motor. We just sort of like

“give some, you know, let off some tension because we think the net guy has got it and it jumps out”

right before it got into the net. But the execution against this outcome was was really critical,

especially for the, especially for getting on this last day, what we wanted to do. So this is like sort of my reflection. Like how was the fishing trip? It was incredible. And particularly those first two days, we had a really great captain with a really quick boat and the tools and technology that allowed us to get to where we wanted to be. We had really clear agreement on the group of us of what we were after in terms of the makeup of the fish and the strategy to get there on the

allocation and then we had pretty tight execution. We didn't lose that many fish. Then the third day, not as much. The vessel was different. We had alignment as a group, but we didn't have the tools to like totally get there. So we just, we just got less salmon than we wanted and then we lost

a execution side as well. So overall, incredible trip. But up those three things, it would have been

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“This is obviously like, I think the metaphors like a parent, right? It's like the tooling, the people,”

the strategy, and then the execution against it. But in part of what we were talking about yesterday is around the standard or expectation that we hold ourselves too relative to our execution for clients. So, I mean, is it just as simple as how you need those three things in place or what specifically kind of were we thinking through yesterday in terms of like how we approach the second half the year. So, these three quarks expectation, I'm going to tie the like this,

what we why we do, what we do at CTC and why we believe so strongly, is that these three things are the quarks expectation for people and what we've been eager to work, are people on what we're building around and beyond that, like why we've built around it so much is because we've just seen so many cases in which when you don't have those three things, it's very challenging to to know if the outcome you're driving to is a good outcome, bad outcome or otherwise,

or to have the tools to be able to get there in an effective way. And so, to sort of draw the parallel on between this metaphor and they're like, how, yeah, this metaphor, I don't know, I feel like this metaphor is probably because it's my metaphor, I feel like it holds really well, but we're obviously taking this to its limits, so bear with us here. But the three, the three parallels here, so what do you need, what do you need as part of the system to be able to enable

predictable profile growth for your e-commerce brand and to be able to get to the end of day and someone asks you, how are things going with the business, how are things going with the brand? And for you to continue with that self, these three things need to be a part. And if they're not like, it's going to be really challenging answer that question and to orient a group of people around a specific outcome because there's not going to be visibility. So the first, the first piece of this

is a reliable source of truth that the business operates on and then the system and the methodology and company. So how we, how we solve for this is it's why we've invested so much into stateless because all of the data across the financial data, the order level data, the qualitative data and the financial data for your business all needs to live in one place for you to even have a starting like, if we had just the depth finder sonar and not the GPS on the boat, like, you cannot

operate. Like, you have the GPS and be like, okay, this will go to this way point. Well, how deep is the water? The tides, the tide goes up and down every day too, like you make these decisions.

“And so that's why these four, the financial data, the market data, the order level data and the”

qualitative around the marketing calendar, etc., are critical pieces to have in a unified system

altogether because with only one or two or three of these four pieces as part of it, it becomes really challenging or near impossible to make the best informed decisions. And this is really hard. We were talking with a brand that we'd all, many of us would know and recognize just last week,

and a couple months ago went through a process with another tool to try to unify their data.

“And it failed. Like, they were not able to get there. There were a lot of money and effort and time,”

and they were not able to unify their data in this place. It's really hard to do. So it's why we made such an investment in stateless and as well in the the team that surrounds our data integration and tooling technology so that we can work with you all to get the data really right. And then in addition to that, the other thing that we were, we've been talking about more recently is the CDC canon. It's that our methodology, it's how we do things. This is going to

series on it right now. It's why it's live on our site. You can see it, which is a agreed upon this is how we do this specific thing. This is how we approach Facebook ads. It's how we

broke Google ads. It's pretty strategy forecasting and media measurement. That forms on top of the

unified data source of truth. The agreed upon methodology and approach for how we're doing. Right. This is the like you have the boat and the tooling on the boat. And then you have like the captain's

“all talking to the captain's and agreeing on like, okay, the best way to catch black cod is about”

1350 to 1400 feet and he used this bay and this and these hooks. Right. Like that. That is the equivalent of what the canon and the methodology is to ensure that you're getting consistently in the best out. So that's pillar one. System reliable source of truth. The pillar two in this parallel is a shared definition of success. And the simplest way to think about a shared definition of success is that there is, there is data that everyone agrees that this data's accurate

and everyone's looking in one place to to be able to assess whether the business is on track or

off track relative to its expectation. Having one one shared definition of success is here's the goal. Here's where we're going to look to see how we're doing against the goal is a simple thing that's also very, very challenging to get to. Various as the groups get bigger tend to have like different people start to look in different places. And the market teams like we're looking at these reports and these platforms and the finance team is that we have a daily P&L. And without a shared

definition of success you're going to get to in the month in the quarter and in the year. And everyone's like how do we do? And like this group is going to be like oh well based on this we did pretty good. This group's like well based on this other thing we did good but based on that we did like you you don't have a shared of initiative what we're after. What we've built in our system is this is the home dashboard we look at every day and with a profit engineer audience

the work and the team around is the home dash and stateless where we have contribution margin at the top and if daily targets for every metric that ladder down full contribution margin rev due in returning customer cohorts to each of your marketing channels we have daily targets for each of these metrics and we've aligned across everyone from profit engineer to the market team to the finance team to the CEO the business our goal is x amount of contribution margin dollars

this this month for this business and we can see how we're tracking against that if we get there then that is good and we have skin in the game related to our our feet and our variable tied with that tied with that outcome this is like the equivalent of the four of us sitting in the boat having conversations of like okay do we want to make some trade off of like the black card for the salmon today is that the you know like we want to push a little more revenue for a little less

CM like that's that's the that's trade off right and then the final final piece the relentless execution to make it make it a reality you you need a clearly to find workflow for every piece of how

“of what drives the outcome for for for for a brand you need to you know to greet upon work”

flow and system for managing against your marketing calendar your ad plan your email plan the ad log that connects to how we how we publish a high volume of creators into the meta account driving that mMM and incrementality geohold out testing you need to find tools that are able to you that folks are able to be equipped with to actually drive this outcome on a daily basis so that we can see here's our shared definition of success here's our pace and against it

here's the action we're going to take in each of these areas to be able to to be able to drive that that outcome forward and okay the you know the the person managing the net on the you know pulling the man we're getting too much slack as they're coming in so they're jumping out of the net okay so what that what that means is we need to be an ultra direction in this way let's bring fish on the right side of the boat and let's approach it this way and okay that that email and that

ad campaign didn't drive as much revenue as it were expected we need to slot in these additional pieces into the plan tomorrow or in two days to be able to make up the gap you need that tight of an executional system workflow and team to be able to actually make that outcome a reality yeah yeah and and the one thing too is like this it's probably clear though but like each of those pillars is reliant on the other or on the previous one in order to

which is to say like you start with does everybody believe that this is the truth right like you're saying a single source of truth that you can trust that everybody trust that

everybody degrees is equal to quote right right and then the second tier of that is like once you

have an understanding what's right then you can become clear on like which number going up is good which number going down is bad right like you have a very clear sense of what that is and then you can execute against that because you have some understanding like this metric went up or down therefore we need to take this action against it right if you don't have the first two in place then there's really no point and I feel like a lot of brands will just out of almost

a sense of necessity skip to part three like whatever we don't have the right ship we'll just go out anyway we don't we don't not necessarily agreed on how much salmon we should get whatever

“we'll get some fish and see what happens but actually like you have to have those things in place”

first one of the thing that I think is you know we've already taken this metaphor way out to see but we'll take it even even farther here is the is the the rule of the captain too which is interesting which maybe what we're saying here is that's sort of the profit engineer I had a friend who did salmon fishing in Alaska for like three months when he was in college and his captain was called Gandalf by everybody in the fishing community in Alaska because he because he was a wizard

they they other boats would basically follow to wherever he went because he had an intuitive sense of where the fish were right and even though it's not quite that there is still a sense of like you need to have an operator at the helm who understands the entire system and has you know with with the our agency as a collective we have like 15 years of experience with this actually so you have that sort of level of experience and then again in the metaphor the people doing

the fishing are maybe the client in terms of sort of like the execution so it's about having like the

“right person at the helm as well I think is important yes part of it but I guess you know what point”

here is it's those three pillars need to be the expectation and that's kind of the point you were making yesterday that like our expectation for whether people are doing a good or bad job he is based on are they doing what's necessary to put all three pillars in place and I think our sort of contention is that you your brand should do the same in order to achieve the cold spot yeah yes and this is what we and so this why we share this in the in the meeting with

the organization yesterday is like where this is this is the expectation we're all renewing our commitment to this and then for with our customers as well we we have this we have this agreement and our in the partnerships that work best we have this agreement very explicit which is for these three things to boil it down that we are committing to getting all the data accurate in statless so that we can so that this can serve as the source of truth for everyone

across these dimensions and we are committing to the CTC canon as the approach for how we do things based on our our 12 plus years of experience so that's that's one we're committing to statless and having all the data in there and that data's accurate and working to get accurate and in the CTC game tool we're committing to every month every corner every year we have a shared definition of success that is the target that gets a lock that we're going to operate against it build a

forecast we build a plan and we all agree and hold hands this is what success looks like for this time period and then third we're agreeing that the job our job is now to make that forecast a reality collectively and we all play a role in that and we're going to orchestrate what that looks like and there is contribution from all the parties as it relates to who's owning the channels but the goal is we have this expectation that's now just a number and a tool and what and the execution

needs to happen happen to make it a reality and we're going to use every lever at our disposal

to be able to make that a reality if we're off plan that's expected forecast are always wrong

now we need to go and do new things to be able to to be able to adjust our trajectory that's

“the commitment that we have that's what's necessary in terms of driving success while comes for”

ecommerce brands and that's the agreements that we have with our customers and the partnerships that are most effective to have the baseline of each of those pieces a play so that we can actually execute and build a plan against it and then we get to the end and we look back and we say great that was a that was an incredible month and we have these we have these we have these we we highlight these things as well in terms of that our our conversations with our customers and the

feedback feedback they share one and and and and it always the alignment between the expectation that we set out together track to get instead every day to make it a reality and then achieving it at the

end and being able to say here's the thing we said out to do did we achieve yes or no yes we and

everyone is happy and and has the you know shared perspective on yes that was that was a success it's like a it's a really it's a it's a really helpful it's a really helpful thing to orient around a group people and a necessary thing to have and and to get to the end of it like we again we've all had this

you or like you have a you know black Friday ceremony with your brand whatever it is like these

“like periods it's like hey how how was it how are things going with you like how how was the”

fishing trip how how was how was the first half of the year been the business and like if it's not

very clear on if it was a miss or not relative to what the measure is and then also not clear

on what the plan is to be able to change that trajectory relative to your feeling around it like

“that's what we want to do first and foremost it's helped to get clarity with you around”

what that should look like and then pardon it with you in some capacity against the execution in whatever form look now all right well that's that's our literal fishing story for you today

“if you want to come catch some with us to continue the metaphor can't hit the highest button”

let us know that you're interested in building this system you would love to talk to you about more all right but I think that'll do a forest look appreciate you joining us everybody else listen up there thanks for listening and we'll see you next time