Ecommerce Growth With a Money-Back Guarantee

Troy, it almost feels like you should be the host. You're the regular guest though. Should you do it? Should you be introducing me as a guest or the other way around? What do you think? It's been a year. That just means you're choosing to not do work. That doesn't seem like a beautiful place. Once it once joined, I get on the podcast to discuss his progress. Think of this as like a public job review to discuss how you're doing and how you're evolving to meet the demands that I'm placing on you. And we're going to go through a special offer that you've released that I think is an evolution in many ways of what I am constantly hammering you about in terms of the job to be done for our customers, which is do more for less money constantly.

That is the swan song of CTC that we're after. So we're going to talk about that today, but let's jump in. This episode of the e-commerce playbook is brought to you by Apple 11.

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Axon adds our full screen videos followed by multiple interactive screens getting a minimum of 10 seconds of undivided attention and a median watch time of 35 seconds. 70% of brands see higher LTV from axon customers compared to other platforms. It's super easy to launch and brands have been able to scale to 100k per day in spend within days. Axon is offering a 5k ad credit when you spend 5k just go to axon.au/cTC to set up your first campaign. All right, Joy. You sent me over now one today that you wanted to go through with the podcast and it starts by saying that you and I have an argument and fight every week, which I don't know that that's totally true.

I mean, there is some form of argument every week because you're just an outrageous person that I have to contend with all the time. But what did you describe our weekly argument?

Our weekly argument is always about it's this idea that yes, we say at CDC that it should be always more at the same price or cheaper price.

But the other part that actually is talked about more often is like extreme accountability. You're like, yeah, everything is your fault. I don't care what happened. It's your fault.

“And that is basically, I think it's a fight in the sense that this happened, this happened, this happened.”

It was like, yes, and you're fault. And then I would ask you, how is it my fault? And you will come up with some kind of argument that would make it seem like, yeah, you're fault. To put an extreme examples for people is like, if our squid happens and you died, you could have taken a different cab, been to a different hotel, could we traveling?

There were a legged, always you could have done something that would not die.

And that's like the example what we talk about. Yeah, so I try and grant you back authority over your life is what I try and do because in the agency business, one of the things that's very easy to do as a service provider is to capitulate responsibility back to the customer for the outcome. And what I have learned over many years of doing this is that if you want to be responsible for the positive outcome, that means you have to be willing to be responsible for the negative one two. And so if you want to actually be seen as impactful and valuable, then the outcome is yours and you have to see it that way.

And so the idea is less that I believe that it's possible for you to control every variable, but just to recognize that the customers reality doesn't care about the idea of individual responsibility between you and them. Their reality is I have money or I don't have money and the consequence of that is your fired or we keep working together.

“And so the only thing to do is to remain in a position by which I believe that I can look at the playing field and I can go exert my will on it such that I would alter the future reality to a better state for our customers.”

And so when you come and you want to give me all the reasons why a customer failed, I just reject the premise that it's an externality and I grant you back the authority to solve it. And so that is a lot of our conversation. And as a byproduct, I think what you do and what I watch people do and I think what this offer is a byproduct of is you then begin to want to take over a larger surface area of impact for the business. Right, you recognize that, hey, if I'm going to be responsible for contribution margin, I probably need to have a point of view on email.

I need to have a point of view on the marketing calendar. I need to have a point of view on landing pages. I can't just sit in the meta account and use that as the express way to impact the overall business health. And so you begin to expand the area of responsibilities. That fair to say, as I pushed you to more authority and accountability, you begin to broaden the surface area that you want to impact.

It's like, this is the one argument that I haven't gone in a long time. So why does it just win it now? So this is the way we win it. Which is we just control everything. So maybe talk a little bit about what you were noticing in interactions with your customer base and for reference, these are primarily seven figure stores.

So people earlier in the journey usually smaller teams in terms of some of the limitations that you were running into with just the PE seven offer.

And then the first evolution maybe you can talk about, which is marketing moments.

That's like the first step.

“And then this offer now, which what are we calling it?”

I don't think we need a formal name. That's a little bit more appropriate for the crowd. But, but how that evolution is happened and why you've gone to each of those areas. Maybe share a little bit about that. I think it started with the core service where the idea was, we need to provide the most value, the best price and be confident.

So we call it a lot of people there. And then what happened was, if you think about growth strategy in PE seven terms and PE eight, it's different. But in PE seven terms, it's like, can I spend more money at the same efficiency or better efficiency and get more volume? And can I do that as an arbitrage so I can reach a certain number. So I can hire people so I can have every wing.

And those basically so is basically made us make marketing moments. It's like, is there something we can do that will give you outbursts of revenue or efficiency or contribution, whatever your concern is. We set it up and we for the first time that that's where this thing started, which is like, we will guarantee an outcome to you, which is if we don't make you the money you pay us, it's money back to you. We'll pay you the difference back.

Which basically held us to the hook of accountability, which basically made the same idea.

It's like extremely accountable. She's like, I come over the offer. I make the landing page. I make the creatives. So we did all that for a particular marketing moment. It runs side by side to your growth plan. So whatever your growth plan is, as the baseline and then you want to break the model as we call it. But CDC, we made marketing goals.

That's how that came out. And after that, you still didn't like it as much because we weren't able to apply it on every guys. I would say it's like the creative option rate. A lot of problems were solved because of that. But that basically made it bigger in the sense that I wanted to sell speed for the first time to fair. That's the thing which is like, we have sold value for the longest time.

I was like, if you're too like what the evolution should be is like it should be value. We should keep value and then we should also add speed.

“And I was like, where is speed the most rather like to who it and speed more valuable than anything else?”

Just came out to be subscription businesses because two units like a compounding in the opposite direction. If they don't acquire new customers, their business actually dies.

And that's basically why we're like, okay, so how can we fully accountable to it?

So I just went to all the data. We were like, okay, what are the things that we tell the person? We tell them this is the offer because of the market insights. And I actually don't think we can even think CDC has talked about how valuable the data is that it is to us. Because I don't think we have ever conveyed why the data is valuable.

And I think like the hack that we look at it at least at B7 is more valuable than B8. Because we can see an exact business and the exact same industry. Done the exact same things with a similar purpose to be like 10 times bigger than what the P7 brand is. And then we can just go and be like, hey, this is what the bid is. This is what the industry average bid is and this is what the average AOV is.

And a lot of times like I've sat through some funny conversations where the client is like, to get me more volume at a better efficiency. I'm like, okay, but the business that's 10 times bigger than you has a hack that's higher than your AOV. So like, how is this happening?

“Well, and this is where I think the idea that people don't understand that you are a market taker on that.”

That you don't get to set the price of the ad inventory. It's an auction. So the price of the ad inventory is not even really relative to the quality of your ads. That's an input. But it is very much a competitive environment for what someone else is willing to pay for that same conversion. If someone's willing to pay twice as much, they're going to get the delivery and you aren't. And so this idea, you know, I think it's been popularized through whether you call it natural cack, I prefer the phrase market cack.

The point is just that there's a price to win the feed and it goes to the person who can pay the most will get the most scale. And so when you look at, I was even, you know, yesterday there was a lot of conversation on X about IMA. And they have like a $308 cack, right, for an AOV that's like, you know, two thirds of that. And so you've got, when brands see that, I think what they don't conceptualize is that so much of the speed game is a financing problem relative to a deep understanding of the payback period of your product.

And how far, you can get someone, how far out, you can get someone to agree to finance that acquisition. We'll be directly related to the velocity of the business. And so I think that just trying to understand that. And it obviously works much better for a specific brand setup, which is brands with high LTV or subscription, right?

And so as we think about designing a service offering to meet people where they're at relative to the underlying genetic attributes of the business.

“I think this is part of what I see you doing with this offer, which is evolving for a subset of brands that have the capacity to move fast.”

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“I think it will be like two specific marketing pretty soon. I was thinking of like highly brands and it's like.”

Do you have call funnels and stuff like that like it's a very different game if you're able to hire so. I think it will keep evolving guess. Yeah, the service in growth strategy begins to sort of segment relative to the needs of the specific brand and their attributes. And that's one of the challenging things about designing a service function to meet so many different markets.

So marketing moments was this first evolution into further accountability where one of the things we often run into and this is true at the PA level pe nine level is that it is remarkable to me.

Remarkable how bad brands are at marketing planning and calendaring like the idea of what is my offer and message and story next month is so underdeveloped that people often come to us and there is no marketing calendar there is no email plan for the next 30 days or they're working in two weeks prints and so. They they don't appreciate just how effective it is to really organize your promotion calendar your product release calendar your stories to meet the seasonality or cultural moments that are happening and so you rather than depending on them to provide us a marketing calendar.

We then so say hey in that gap if Taylor's going to yell at me and say I'm responsible for this no matter what I want to take over building the marketing moments and building it soup do not this is another thing that becomes problematic is the creative and the landers and the entire delivery rather than depending on it so not only do design the calendar create the offer do the ads and run the landing pages so that you can take over responsibility and we say hey will actually guarantee the outcome of this service because we know that it works so well and so that.

That first step in the same fine Taylor I guess I'll go and make it work.

That is it that's girly it I also think that there's like a cheating part of it like to be able to guarantee I had to had so much conviction that I can just cheat like that's it like I'm not saying we're going to play the same game and me or so everyone else is playing the same. We are I'm I'm cheating and that's why we win for sure. Yeah, I think part of that is like if it's an auction if I can tell you this is what everyone is like if it's a blind auction and people don't know what everyone else is being and I can tell you that's what the competition is being that's cheating to the highest degree.

“The other one is the APA access to which we have access to and even more importantly it's like content people people talk about how content is so important if you read the refund of all of this that's actually incredible.”

I mean all the creators that work that work above average you just get access to both just like that's another. Well, so you're jumping ahead you're jumping ahead let's go through each of the pieces of the offer so as we think about this evolution and I mean even I'm writing my next talk for carpenter on table and it's it's the continuation of this idea of. I think a couple of systems does to force evolution and what skills emerge in those kind of environments and when I think about my job as an agency leader so much of it is to create the constraints of the environment such that that evolution occurs naturally.

So if you think about marketing moments and what you're doing in the service offering is you're saying okay. So there's creating a condition by which we have to continue to expand the revenue expectation while also delivering value to the customer so that they persist and so. It is really hard to create the compression where the price is low enough that you can guarantee the value consistently enough across so many different brands. I think it really hard mechanic to create and then to go even further and go all right well how do we pack so much value into this that you use the phrase cheating but that we can like guarantee the outcome as much as possible and so much of that is to like.

We've got a lot of cost reduction so you actually create savings in the business that lower the hurdle rate to investment but then also be able to create value on top of it so let's talk about outside of marketing moments so first we go and say we're going to build the marketing calendar we're going to build the landers we're going to create the ads. Now there's an even further step here and so talk about what this most recent offer is and everything that it includes for brains.

What is the best drugs that sell according to me based on my margins and marginalized choose the best perks understand the best offers for them in the industry.

“So we do all that research and we include our commentary on that then we're going to make land pages and then the answer is we don't make one land in the page and I think that's what when you talk to people.”

I always think about this phrase it should like it's not a binary like it's not do I make a land page every month or not it's like how many land pages can I make and when I guarantee it the answers infinite as many as I need to it. And that's basically the idea to create a strategy it's like it's the answer to all these variables every call growth is like how many emails as many as you need for the target how many land pages as many as you need for the target same thing for creative.

So we go and we make land pages and then it's like what is good and good and other is basically our dataset so we have that data set in status which is conversion it versus a lead a long table.

I exactly know what is the a lead that everyone needs to bid once I know that then I need I also know in that table okay what is the industry average conversion rate at that point and then I can go and make landing pages and the second I find conversion to both that I want then we so we keep testing until we do that once we find that then it's like okay now.

“If you go to the brand it's like hey I took your offer I made the landing page.”

I can't test off her because I don't have creative so we started with statics we make all the branded ads we call them branded ads that's easy like we make all the branded ads there the cheapest thing to produce best thing to validate idea. Once we do that then they're like okay so this was a great journey and for an average brand it takes a month to do this to be very free for us with the new offer it takes seven days again like selling speed at this point purely. And then what happens is like okay now how do I scale it and a lot of the reasoning and I think this is why speed is important is like if I can make an investment to find a winning offer in a month and then it takes me another month to scale that offer by having a lot of white list of content and I can do that in two weeks.

It's actually so much more valuable because their tone is so fast that it's so consolidated earlier together so we will do that we will take the winning offer and we will put a bunch of videos on it like this and adds from it from refile and they're like okay and I run into this idea with a lot of people it's like I don't think the agency cares and I know you have taken a lot of. So it's like it's a teacher's responsibility that you should make the agency care and all that stuff and I'm like okay but like what would be what would make the person on the other side say no no the agency actually cares about my business more than my employees care about it.

That the way you do that is like it's the caravan mistake right the carad is we get to keep you as a customer it's always the carad the mistake is actually the guarantee which is like if I don't I actually need to give you back the money and nobody likes to that's like the most in full thing that we can actually transfer over also. The traditional people working on it is like hey there's a guarantee we need to deliver on this that's actually one of the reason mark moments is so great is because there's an inherent guarantee to it we need to make it work we need to prove the cost.

“That helps a lot and then we're the thing that you don't like as much as like we're actually be divided 24 by seven on it so that that is my favorite part of this but if that's in her offer all.”

If we think about the questions of things that we sort of see as needing to be successful you have the offer design conceptualizing how to position your product relative to the market competition relative to the inherent attributes of the gross margin the consideration for LTV like there's some mechanic in there by which there is the right relationship between.

The conversion rate and the price and the margin of the offer against whatever cack you can afford to pay and somewhere in there is just work to be done around testing.

The bounds in every direction and also framing it relative to the consumption patterns of the product that are useful the other options of the market et cetera et cetera and so often I see brands where they've just lost a sense of where the market has moved in terms of a price per unit so let's say you're selling. I think there is a price per the underlying unit like there's a price per pill in there somewhere and often times the market will move very aggressively downwards in a way that you just sort of lose consciousness of such that the alternative options are so much better than what you're positioning that you can't actually win enough because the market is provided to good of alternatives in what becomes many ways of functional commodity.

And so I think that there are there are a lot of like ways to be aware of that that you have to just bring into the full and then you say okay now that we have a concept we need landing pages into your point not just one landing page with lots of versions of landing pages and landing pages like ads I think. Right, are something that needs to be produced at a variety in scale that allows you to message map between the creative and the the lander as much as possible to different personas and different opportunities and then we say all right we'll static images are one piece of that but we also want to be able to bring in what we find to be.

So maybe quickly for those of you don't know what does refuttle do and how are they specifically helping us in this gives.

So they were one of the biggest partners for whitelisting they had the most data the most on creators that were whitelist or through them and the way they came up is basically I called up out if he's the see or there was like hey this is the business like how can I just make everything work like I will be the person responsible for it. But I need to find a way to get a lot of creators really fast make content incredibly fast and do it at a birth scale and like there's the Hudson method which is like how do we compete with that is like the way we can do that is we have I think they had like 50,000.

Listed across I think for the show time spent I was like okay so can we plot who works the most often because there's the power law involved there and then we can just take every career that's one Sunday vision above the mean and you give us access to those careers are like okay so let's put all those people together in the community. And I think there are like 3,000 people that's like the power all these are people that worked almost always they were put in the community and the funniest thing was I was like and then it needs produce values so it's actually free to the customer that side for this from CDC that special you can actually get it anywhere else but more importantly they also don't charge percentages.

“This is like the other part is like any platform that does this charges you a percent of revenue percent of spend and they're like no no not flat feet free to CDC customers that's like value creation so I already crease cost.”

And I replace a department if people think well it's like it wasn't managed service it had to be managed because people have to reach out to thousands of creators some will reply then you need to sort out tax forms and 1099 and I like you need to do so many things for these people you need to turn off your mic is something out to me. And I have to go and change so many things and they have to get so many v is involved in all of that and now we don't need it because you just get all the work done and put in just a little community and you draw a white listing link hey this is the brand this is the content we need to make everyone who wants to make it apply done their tax forms are handle for which I actually think like a lot of people are doing their Hudson method should realize what the 1099 they're going to find and now for every single career they got and they're like thousands so that's also another thing that's covered.

You get the landing pages you get the static ads and now you get this pre curated group of creators that know how to make content that have already been defined you get the ease of access to them handling all the administrative tasks you get the speed at which you can get them. And then you're going to have to go and get them whitelisted and producing partnership ads in your account all as part of the functional service and again because of our relationship with the refund also that you get exclusively through us so if you are in a brand that feels like they're in a position to accelerate your growth and need all of those boxes just checked the capacity for our team and specifically joy who is going to be delivering this service just so I'm clear.

“It's me it's like I have the liability all the risk on this one so just enjoy personally will be the one doing the work.”

Yes, so when I think about what are all the things that I can access that a price that I can't get anywhere else we talk a lot about if you've ever heard me sort of reference the debate of inhouse versus agency my argument is always this is a dumb argument the question should be where can you get access to the most talented person at the best price to work for your brand most often like that's that's what you really want as a leader as anything is that.

The idea that the people that talent are equal on both sides of that equation inhouse versus agency is just not true there are people who are better equipped to support your band.

And I would just contend that joy is one of those people that if you had the chance to specifically hire him to work on your business under this pretense with all of this additional value you will not find you couldn't hire joy like you couldn't pay him to come work for your team I can tell you he's wildly expensive and asks for more money every day so that's a giant pain that I'm going to hold for you to resolve to figure out how to keep him fed while he.

“I think that's a lot of the global trots across the country and you know buys new hats every week but.”

This is just a really unique opportunity to get incredible talent a broad scope of service delivery with a commitment to delivering the outcome at a rapid pace with unique access to tooling from stat list to refund all to all these things we can even throw north beam in there if that's important to you from a measurements standpoint. An unbelievable amount of value at a price that you can't continue anywhere else and so that's what my pressure is to organizations how do we continue to drive the cost of delivering value down such that the hurdle rate for you to make a return on the investment with us is better all the time not because we want the value creation to be lower because we want the value capture for you to be higher.

So joy is after that all the time in the original piece of service. I still believe that's a massive home run and if you're not one of these fast accelerating businesses that's still the right place. Add in the marketing moments which are guaranteed revenue creation and support of your marketing calendar and now if you're one of these fast growing CPG brands or consumable or subscription based business.

“I think this service is incredibly opportunistic for you to take advantage. So joy what I think else you that in.”

I think too think so I was on the call with a person who was interested this offer and this was like this was mind-blowing to the person on their side. He was like I have in house teams.

I worked years to go and get landing page developers and creatives and all these people so if you give a strategy we'll execute on it. And I had to go and tell them like it actually doesn't matter if you have a strategy which is getting on our own so we just compete. I'm happy to compete at this point. I'm actually happy to compete with your internal teams external partners like bring everyone on at this point and I think that's what it should do. The world should know. Yeah, the world should know that we were the first time to guarantee this and I actually want everyone to guarantee somehow to come on the money that charge businesses and if you do that, you actually went on the value creation site like that's actually the counticle factor of this.

“Yeah, I think that people just need to understand that the convert the idea that strategy and production or dissociated is just that's a.”

Well, that's a bygone fact like if your team is saying we'll do the execution just give us the strategy. I would just say hey those people in this moment need to be able to can brought bring those skills together.

There's just no barrier to the execution layer anymore. And so and and can't it be.

This idea that like AI might be better at the production layer but not the strategy they are also is the made up well. I think I think there is so much capacity to unify those ideas and I think the missing pieces for a system to do that is the breadth of context that CTC and stateless and provide as well as then the access to the unlimited token consumption and the capacity to go and produce all day long that's another resource that we're going to provide on your behalf. So there's just ways in which I think you just should demand an expectation with us of your internal team or us.

That the tools the strategy and the production all come together one person that's I'd have published this before if you're hiring an employee. I would be asking what tools are you bringing with you what system are you bringing with you. What how are you going to unify execution strategy into a single person as much as possible because that's just the table stakes of these days. The conversation on Twitter I posted yesterday is moving from the 10% opx to the 1% opx and I think this is a service in support of that so joy good work we'll see we'll see how it turns out joy has some belief about the pace in which he's able to move that I'm skeptical of him but we'll we tested it.

I actually think there's the bottom of this is like if you're not doing this for the first time we actually did it for two businesses and now we're actually doing it for three actual business and we're documenting it to.

Yeah, I I that you are very public with this although you've been a little late in your publishing of all your data lately because you're a little bit too busy.

So I've got to get you back onto the production timeline to keep the transparency up because transparency is part of the mechanism for accountability. It's that if we're going to say these things we just want to more often then not publish the reality of the outcome and so we're committed to doing that for the sake of improving our own product. I was thinking of doing like a very bold style on the he come call by every week like this is what happened to the three businesses something.

“Well, I mean, like yeah, the building public idea right is very popular and I think.”

I think that what people miss about the benefit is it's good marketing but it also is again radical accountability just like publishing research right like publishing research about cost controls or anything else. It's an expectation that we are subjecting ourselves to the scrutiny of reality is that is the thing that we're saying true is it working and if not. What are we going to do to evolve it because we care about progressive truth care about getting better as we go so. Get with joy, press him to deliver value to you, press him to deliver a value in excess of his cost say that that's what he promised on the podcast and that and make sure that that's what you're experiencing when you come to him and that's the standard rehab so.

Joy where where where should they reach out to you to make this happen. To hear email try at the red comments or code call or draw show on your screen and I just message Taylor you can you can. Thanks for stopping him and we'll see how this goes update coming one year from now.