Ecommerce Playbook: Numbers, Struggles & Growth
Ecommerce Playbook: Numbers, Struggles & Growth

Turning Black Friday Shoppers Into Customers Who Stay

10h ago35:538,018 words

The Podafi briefing · AI analysis

Charity memberships and contribution margin pay drive DTC retention

5 min brief · 4 takeaways · Based on this episode’s transcript

The 30-second brief

TL;DR
  • 01Overlapping three specific consumer interests in ad creative makes audiences feel uniquely seen.
  • 02Shifting media buyer compensation to contribution margin prevents overpaying for unattributed top-of-funnel value.
  • 03Automating entire offer deployments with AI reduces the time and cost of testing variations.

The big picture

DTC brands face tension between low-margin physical products and the need for retention. Operators resolve this by tying memberships to transparent charitable impact and shifting media buyer compensation from last-click revenue to overall contribution margin, using AI to accelerate offer testing.

Useful for: DTC operators managing media buyer compensation, membership programs, and AI-driven offer testing.

Synthesis of podcast conversations. Speaker claims are not independently verified.

01Creative Strategy

Overlap three interests for hyper-specific creative

Justin Palmer explained that combining three distinct passions, like dogs, military service, and faith, creates highly specific ad angles. This specificity makes consumers feel uniquely seen, increasing their connection to the brand compared to broad targeting.

Why it matters. Hyper-specific creative cuts through generic noise, driving higher engagement by making the consumer feel the brand understands their unique identity.

Your next move · Podafi’s suggestion

Map three intersecting customer passions for your core product. Rewrite your top-performing ad copy to explicitly include all three elements in the headline and primary text.

The catch. Facebook can latch onto a niche sub-topic and scale it too aggressively. You may need to pull back ad spend when a hyper-specific angle over-performs.

Transcript evidence

From the transcript

“when you can find these people then they really uniquely feel known or seen”
Read the source transcript ↗

Evidence summary · paraphrased

Palmer noted that finding the overlap of three passions makes people feel seen, which led to the creation of his men's apparel brand Hero Company.

02Attribution

Shift media buyer pay to contribution margin

The brand moved media buyer compensation away from last-click Google Analytics revenue. They now base pay on the overall contribution margin provided by the business, using last-click only as a conservative signal to prevent overpaying for unattributed value.

Why it matters. Paying strictly on last-click attribution risks underinvesting in top-of-funnel awareness, while contribution margin aligns buyer incentives with actual business profitability and prevents overpaying for untracked conversions.

Your next move · Podafi’s suggestion

Audit current media buyer commission structures. Model a hybrid approach using contribution margin as the primary denominator, keeping last-click as a conservative guardrail to prevent overpayment.

The catch. Contribution margin calculations require highly accurate and timely accounting data. Ensure your finance team can reliably allocate costs before changing compensation structures.

Transcript evidence

From the transcript

“we do have a comp model that is based on the CM”
Read the source transcript ↗

From the transcript

“it's more driven by the entire CM that's provided by the business”
Read the source transcript ↗

Evidence summary · paraphrased

The speaker noted they no longer pay media buyers on last-click GA revenue, using a comp model based on the contribution margin provided by the business instead.

03Creative

Automate entire offer deployments with AI

The brand is moving beyond using AI just for ad creative. They are building systems to automatically generate the entire offer, including duplicate product pages, discounts, codes, native landing pages, and publishing them.

Why it matters. Automating the full offer deployment drastically reduces the cost and time of testing. When creation is cheap, brands can test more offer variations to find winners rather than relying on predicting them.

Your next move · Podafi’s suggestion

Map your current offer creation workflow. Identify bottlenecks between ideation and publishing, then explore AI tools to automate landing page and discount code generation.

The catch. Automated systems still require human review. The team manually checks AI-generated outputs to ensure the generated offers and landing pages actually make sense before publishing.

Transcript evidence

From the transcript

“we're trying to like go all the way up to the offer level”
Read the source transcript ↗

From the transcript

“Have an AI system basically create landing page and offer in the back end”
Read the source transcript ↗

Evidence summary · paraphrased

The speaker explained they are trying to use AI to go all the way up to the offer level, creating the landing page, offer in the backend, ad creative, and publishing it.

04Retention

Tie memberships to transparent charitable impact

Home Life Brands offers a monthly membership providing discounts and early access. Crucially, it tracks and displays the exact number of shelter meals and pet transports each member funds, treating the physical product as a symbolic souvenir of that giving experience.

Why it matters. Transparent impact tracking gives customers a recurring emotional reason to maintain their subscription, increasing lifetime value and reducing churn beyond just financial discounts or product utility.

Your next move · Podafi’s suggestion

Partner with a relevant nonprofit and build a customer dashboard showing their cumulative personal impact. Upsell this membership at checkout with a clear value proposition.

The catch. Charitable operations require significant logistical overhead. The brand handles physical distribution of care packs to shelters, which demands warehouse resources beyond standard retail fulfillment.

Transcript evidence

From the transcript

“our product is like it's like a souvenir of a of a giving experience”
Read the source transcript ↗

Evidence summary · paraphrased

Palmer described a membership tier that tracks funded meals and chartered pet rescue flights, showing members a dashboard of their cumulative impact over their customer journey.

From listening to doing

Take one idea into the week

Suggested experiments, not proven results. Choose what fits your brand.

Test contribution margin media buyer comp

  1. 01Calculate the historical contribution margin for all media buyer campaigns over a recent period.
  2. 02Run a parallel compensation model where a subset of buyers is paid based on this contribution margin instead of last-click revenue.
  3. 03Compare the total profitability and media mix efficiency of the test group against the control group.

Measure: Net profit per media buyer compared to the control group paid on last-click attribution.

Guardrail: Stop the test if the test group significantly overspends on unprofitable channels or if contribution margin calculations prove too inaccurate to pay commissions fairly.

Context & limitations
  • TikTok Shop currently represents only 2% of revenue and lacks profitability, serving primarily as a creative and halo effect channel.
  • November and December holiday acquisitions tend to be lower quality, one-time gift buyers, requiring aggressive October acquisition to build a profitable Q4 cohort.
  • Contribution margin compensation requires highly accurate and timely accounting data, which many growing brands lack.

Listen to the conversation

0:000:00
Original episode description

Justin Palmer, Founder & CEO of Home Life Brands, joins Taylor Holiday live at Commerce Roundtable in San Diego to discuss Black Friday customer retention and turning holiday shoppers into customers who stay.After 12 years in pet ecommerce, the company behind iHeartDogs and The Hero Company prioritizes acquiring customers in September and October, when they’re more likely to buy again during the h...

Transcript

EN

This episode's special for me, like, I know you guys think I'm an OG, that I'...

And I remember he was like, again, I told the story about Nick when he came in and taught me about Facebook ads manager Justin Palmer here is the founder CEO of home life brands and he had some of the OG.

You guys used to own how many different pet accounts on Instagram. I'm excited for this opportunity to connect and for you to share a little bit about what you guys have going on with all year.

I have seen all over the place how you guys are transforming something that I think most people don't perceive there to be that large of a potential impact it. So tell us a little about what that is and how you guys make it happen. I'm Sean co-foundancy of all year and what we do is super simple. We just do pop-ups. Typically, we see it's like we'll see a two x-op theory and then we'll see something like a 1.8x increase and welcome the revenue. So then that's that's the key metric to track here. Of course, we want revenue to go up as a whole, but like there's a little bit so much a pop-up can do.

“I think the best thing about us is that we offer 30 day free trial.”

No strings attached, like you can cancel if it's not worth any for you. During that free trial, both managers to pop-ups for you will give you kind of the outcomes that we promised will give us. There you go. So where do people go to side after try it? Yeah, so all you pop-ups.com, A-L-I-A pop-ups.com. We're here with Lucas Pactor, the founder CEO of Tribe.

So for those that don't know, what is Tribe Tribe is like tick-tock shop or direct-to-store sales. So tick-tock shop was genius. It democratized content and made it so any average person with a tick-tock shop account can sell a product. But it's only limited to e-com and it's limited to people that have access to a tick-tock shop account. But instead of posting the video on your page, you're just making the video, you're sending it to the brand.

If they accept it, you get paid or you get a percentage of whatever revenue it generates. With Tribe, what we've been able to do is go from 500 to 1,000 or 1,200 to 1,400 to 1,400 ads a month at a lower total cost of production.

The data is the most important part.

If you give your creators the ability to see what ads are working and real time, they're going to go make the magic happen.

“So, dude, where can people if they want to check it out? Where do they go?”

It's just join Tribe.com. Check it out, join Tribe.com. Welcome back to another live edition of the e-commerce podcast. We are here at Commerce Roundtable. This is not AI. He's not AI.

This is real. That's the skylight of San Diego. And we are here for the second in this series of what are you going to do in Q4 featuring some of the amazing awesome humans that we get to interact with here. And this episode's special for me. Like, I know you guys think I'm an OG that I'm old, but this is actually one of the individuals that I learned from in the very early days of e-commerce who has been at it longer than I have. And I remember he was like, again, I told the story about Nick when he came in and taught me about Facebook ads manager.

Justin Palmer here is the founder CEO of Home Life Brands. They were gathering up. They own German acturments and at everything you can imagine.

And so this was like, first examples I've seen white listing ads that he would teach me about.

And then I was team would do measurement. There were so many things that Justin and our kids go away. I just haven't seen probably our kids. You hung out a lot pre-COVID. It was like, I just found out his daughter just passed their driving test today.

There's Sun's 13. And I'm like, my mind is blown. There were little kids running around. So we hung out.

“I think you, there's an episode of Justin that Q4, you're going to have to dig up.”

It's from a decade ago of coming on the pod. So I just went about to the time to tell people how old you are. Why don't you give us the load on the, on what is home life for us today? Yeah. Yeah. So home life brands is, we're been around for about 12 years.

And my Taylor said, we focus on pets. And this really was all born out of the very beginning days of Facebook, right? So I, you know, I had a rescue dog, a four year old Siberian Husky at the time. And I just was kind of inspired like, okay, Facebook's kind of becoming a thing. I'm seeing these Facebook pages grow and take off and get viral.

So I created a page called I love dogs. And one thing led to another, the audience grew pretty quickly. We, you know, it was, it was a lot of just posting memes and viral stuff. And I didn't really have a monetization, you know, plan at that time. But one thing kind of led to another.

And we started one breed and then we started another breed. And they kind of grew from there. And that was kind of the beginning. It's just like kind of writing that organic wave of Facebook pages and Facebook growth. This episode of the Ecommerce Playbook is brought to you by Universal Ads.

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Get on TV without the fee. Go to the link in our show notes and use code UACTC when you sign up. That's code UACTC. So there's two things that Justin taught me that like really changed a lot of even how I think about my business today.

The first was you guys always saw yourself as part media company.

And you had revenue as a media business inside of a commerce business. So you were at cell sponsorships to your pages and to your newsletters and things like that. And that's become a huge part of CDC and what differentiates us is I actually think about us as a media property as well. And so I owe that to you for sure. The other thing you used to talk about was this idea that like people.

“If you really want to create great ads, you should think about the overlap of three interests.”

So you would say like don't just think about dogs. Most people would think like oh pet owners that's one or pet owners that are in the military. But you would go like no no take three pet wine military. And at the center of those there are people. And when you they really feel seen and known when you find the overlap of these three passions that they really care about.

And that was an inside of always thought about developing creative strategy.

It's like it's easy to do the one interest and go oh that's my customer. But when you can find these people then they really uniquely feel known or seen. And you were even telling me you have a brand most recently that I think kind of plays on that idea. Yeah, well yeah. So yeah, here are a company actually launched out of our main brand which was I heard dogs.

And you know we sell mostly to women and I heard dogs. But this was a product that we actually created for men. It was like a parent for survival style bracelet with a cool American flag on it. And we launched it and all the sudden we had a problem because we had all these women buyers. And we ended up having all these men buyers that are coming to the site buying this product.

And you know so we realized that we had something here. And we realized there was like this intersection of patriotism, dogs and faith. And that's really what kind of you know created the hero company. And what we do is it's a men's apparel and jewelry brand. And we raised money to provide veterans who are battling PTSD with service box.

So yeah, it's really truly passionate about my partner Marshall. He's an army veteran and he's seen firsthand the effects of men and women coming out of the service. And just the emotional scars that anybody who's had a dog. You just know how much joy and healing that a dog brings to you.

“And that's that's what we're able to fund.”

So we've been, you know, fortunately to to to fund over about two million dollars in donations to organizations that match veterans with service dog.

So we have a line of jewelry in the peril and that's that's great. And I mean, I think about it because you I don't even remember telling you the free intersection thing. But but that's actually the genesis of that brand is kind of overlapping those three interests. And just really building on that. Yeah, because I think about this, I listened to Jonah Peretti who started Buzzfeed.

And he talked about how the way they built Buzzfeed was this idea that you could create a piece of key up content that someone would see and they'd nearly go, that's me. And so you think about all the quizzes they used to build like things only kids from the 80s would understand. Like if you were born in the 80s, all of a sudden you self identify into that content in a way that makes it feel very personal. Even though that headline is really applies to literally hundreds of millions of people, but yet it feels so personal.

And so I always thought that you sort of tapped into a similar idea, which is that if I'm somebody who is former military who has a dog and is has a faith, like when I see that kind that specificity of content. It's like for me, like when I see people do baseball and you come, I'm like, oh, that's like uniquely me. And so it increases your connection to the thing in this way that is really powerful to spite those being really large demographics. Like there's a lot of people that actually can fit into some of those circles, but when you overlap them, then it suddenly feels very personal.

And so even ad creative, it's something I still think about them to this day, which is that. Like there's this, there's this exercise you can do with creative that's like rewrite an ad five times more specific every time. So I would teach our people to use this idea, which is like, okay, you wrote a, it's a testimonial it says. A thousand customers love this product, it's like they're ready to get and it's like a thousand women love this product, okay, ready to get a thousand moms over 40 love this product.

Okay, ready to get a thousand moms with thought, you know, you can take that same idea, which is find that overlap of three concentric interest that makes someone self identify into it in this personal way.

“A great headline chooses its on and I think that's something that I owe to you man, thanks for all the wisdom over the years, you know.”

But so talk about the brands though, and like because it's not so you have that one, which is this, like you said, the overlap of that's patriotism and faith. But talk about some of the other ways that I heard dogs plays on this idea, there's some of the other products that you guys saw. Yeah, so we kind of think of ourselves as we sell everything that you can't find a pet color of pets. So, you know, we're big on actually lifestyle products that kind of represent who you are and and like you said kind of make you feel seen.

So maybe it's a specific dog breed that you associate with that you're very passionate about that you've rescued. And it means a lot to you, so we'll have, you know, we have a lot of breed specific products. We have a lot of, we sell supplements as well, that is probably the one kind of problem solution area that we're in, but most products are actually lifestyle based.

The peril, you know, mugs combed before we do a lot of seasonal products, lik...

We, we paid a lot of attention to and really kind of lean into seasons in a way that you're not going to find at a typical pet store that sells garden flag or home decoration that's for a dog. Super interesting. And then you were telling me before we got on that you pivoted to a thing where I think is kind of this pursuit because I know one of the things that was true about your visit is that.

“There wasn't actually maybe in German Shepherd wine glasses, this really high LTV in the products themselves, and so that's why you got into the supplement a little bit.”

But then also there's always this sense that like, but we have this community that's really engaged with us, but the price don't lend themselves to monetization on a repeated schedule.

And so it felt like there was always this tension on how do we get more value out of this thing. And so you guys have created memberships. Yes, so tell us a little bit about that product and what that's done for your business. About two years ago, we really started laying into memberships and memberships, there's kind of two benefits. So, and this is something that we upsell it check out.

And we sell other ways to typically most people are signing up at check out. And what we do is it's it's it's one, it's a discount program. You also get early access to products, you know, drops right person's time, things like that. And it's pretty substantial discounts. It's not a 10% off, like it's actually a real discount on the product.

But more importantly, like the second part of the membership is it's a charity.

A give back program. And what we do is we actually keep a scorecard of people's metrics. So when you buy a product in our dogs, you're funding a specific number of meals that we donate to a animal shelter in order of your purchase. And we actually show you a dashboard of that. You can see how many meals you've funded over the life of your customer journey. And you know, some people go back 12 years.

So, and we also have other programs to where we actually charter a plane. And we fly pets out of areas in the country that are basically high meals. So, a lot of areas like Texas right now, there's a lot of abandonment. So, you know, and then you got up and like Washington, New Jersey, there's basically more demand for pets than there is supply. So by putting these pets on a plane, you're literally pulling them out of the situation where they would be used to nize that shelter.

So, you know, we really take people along for that journey. So it's like, and, you know, this is also for you, the whole creating a peak moment. It's like, we do this every month, we do a flight. And yeah, so it's it's it's it's almost like you look at the back end of our company. We're kind of almost more wired like a charity than as an retail company because of all these operations that we're doing charter. We're working that we're working the nonprofit, but we kind of get to direct some of the marketing of what not.

And we're also choosing the pets and the stories that go on the flight. So, we will actually bring, you know, at least five photos of these pets to our customers.

“And we'll show them the stories and we'll say what, you know, what would the history of this dog?”

And hey, they're going to be on the plane of this day. And here's our goal. We're trying to fundraise. And we have, you know, products around that, like T-shirts, bugs, whatever. A lot of people just donate. And we just pass that through the charity. But we're also a marketing partner for these nonprofits because they're looking for, you know, donors, you're around. And we're able to provide that flow for them of our customer base.

That's great. So if I'm a member, do I have a just a portion of our membership or just a portion of our purchases go towards the charity or how does that?

Yeah. Yeah. So basically it keeps track. So we have several different tiers that goes anywhere from five bucks a month to 25 a month.

And whatever you choose, there's a certain metric of how many bills that are funded, how many miles a transport that are funded. And then you get all the discounts and stuff as well. So yeah, and people loves seeing the dashboard and loves seeing the updates. Basically, like a monthly statement, they get in there. You know, they're kind of shows their impacts. Obviously, that's a great. I think that those brands really suffer from, I don't really have a good reason to talk to you right now.

But this episode of the ecommerce clipbook is brought to you by universal ads.

“Here's a question. How much of your TV budget actually makes it to the big screen?”

On most TV platforms, it's not all of it, not even close. Platform fees, data fees, optimization fees, it adds up fast. With universal ads, you can ditch the middleman. It's 100% self-serve, TV advertising built for brands of all sizes with zero platform fees and zero hidden markups. You get your brand on premium networks like NBC Universal, Fox, and Paramount.

Right next to brand safe content, your customers are already watching. Right now, new advertisers get $2,500 in matched ad credits when they spend $2,500. That's double the TV for your first campaign. Get on TV without the fee. Go to the link in our show notes and use code UACTC when you sign up.

That's code UACTC. What is the reason I'm sending you three emails a week? They need that. There's so many buildings. You have minimal turn right on your email list and things for stuff like that. Yeah, for sure.

How much of a percentage of the business has that become? How do you think about that going forward? It just keeps enriching the value of the membership. How do you think about that as a platform for the business growth? Most retail companies, it's tough to make money from January to October.

There's more stability in that. We're able to fund more charitable operations.

It's not displaced everything.

We still have to have good product.

You can't just have a cause and have crappy product.

“You do designs have to be good and you have to speed a reason to buy it.”

Having that story to tell in that park, narrative to bring them back to why they bought. And here's actually the fruits of your purchase. That's something that it's much harder to replicate. People can honestly replicate our products. But that whole experience is much harder to replicate.

That's what we're interested in. How many products are you guys releasing a year now? I know there's a lot. Because a lot of the products should be in order. I mean, we're talking in the thousands.

But the physical product that we manufacture. You're probably talking 150 items a year that we physically make and warehouse in our warehouse. And in Shabbat. What's there a while where? Is that to hear remember back?

Part of the mechanism was like.

A petrol had designed by just basically automating designs onto those templates.

And then just having those kind of constantly pumped out. Figuring out with scale to just them. Is that still a lot of the system for the. It is. Like AI has really.

I was really really changed that. Okay. What do you guys do degree of automation? Yeah. I mean, we built custom tools that basically takes a URL.

It takes our PDP. It runs it into the tool. And it creates just the overwhelming amount of stock ads. You know, instantly and of course we're too seeing it. Make sure this makes sense.

But I mean, our our ability to output ads. Has actually caused us to increase our product. Right? Because there's a bottleneck somewhere. So the bottleneck used to be at the ad side.

Now it's like we've leaned in the product development even more. And you're just finding those little niches of like, okay. The dog person also loves this sub topic, right? And you know, those are those are great. And sometimes Facebook latches under those and sometimes a little bit too much.

Wow, this is going to be a weird direction with drama. And like whenever niche sub niche it found.

“Sometimes you have to kind of pull it back.”

But it still works. And we we definitely, I mean, AI has changed a lot. Have you guys done anything with TikTok shops? We have. Yeah.

It's, I mean, it's like 2% of revenue right now. But it is something that we're focused on. And I think the primary reason there is just for the creative that comes out of it. I mean, the profitability isn't there. It's just at this point.

But there's definitely a halo effect. We were on Amazon as well. So we see the halo maybe more over there. Yeah. Yeah.

Yeah. Imagine. All right. Well, the point of this pot is to talk about Q4 and holiday. We talked about building peaks.

What does it seems like a lot of your products are oriented around gifting that there could be a huge opportunity for that to play out. Tell us a little bit about how you guys approach handling Black Friday's ever Monday and Q4. Yeah. So yeah. So, you know, we definitely approach.

Subtemporal October pretty aggressively because that's the cohort of customers that tend to rebuy in November December, and you know, actually the people that get acquired in November December tend to be pretty low quality and just one time gift differs, right? So. But again, we're trying to get as many people as we can on to the membership because like we do have a gift. A gifting product. It's relatively low LTV.

That exception of supplements. So it is this exercise of trying to like they don't need a t-shirt every month. But but actually do care about animals. So we can kind of move them into this membership. And so everything's really kind of oriented around that.

So we tend to first thing we do is like we when we build the product. We're using this model where we create AI concepts. We put them out in the survey. We have a very structured survey that we've done the same for years. And we're basically showing almost what looks like a finished good is AI is that good now.

And we're asking them a very, you know, in a very specific way if they would make that purchase. And we give the price that we anticipate. You know, if you remember, we actually run ads to two because what we don't want is we don't want something else to serve. We run ads to serve. We run ads to serve. So we get cold audiences to the survey because we don't want just.

You know, serving the choir like we want people who have actually never seen us before and just like would you buy this cute Christmas decoration.

You know, so we do a lot of that. So because of that, we tend to be more confident in those work bodies that we, you know, when we place those orders. So but we're off sometimes and you know, it's always this adjustment of, you know, we have a daily projection model. It's like, okay, here's the inventory that we just need to get down to zero by our shipping cut off. And we're running that against Facebook ad spend and we're saying what needs to be ramped.

“We actually tend to start pricing pretty low and that goes to members first, right?”

So we actually start kind of inverted lower pricing. And as this flag goes down on the best items, the pricing will go up a little bit. And we pull back an ad spend to get more organic signals. I saw a research that I would curious if you were thought about doing this is that. There was a group out of say they boss in university somewhere that took. A bunch of ad creative and tried to build.

Basically a machine learning a simulation around whether or not the ad creative would perform. So I'd be wondering on the survey results. If you could actually create a set of agents that review the ad creative prior to publish training on all the results that you have at the asset of work. And if they could predict the outcome prior to the ad dollars, I've always I've always felt like there's there's a there's a product out there that is like. Like prior to publishing your ad creative like the idea that testing ad creative is like in the real environment.

It's like the the shelf by Sim Jim that they tried to create did you see that.

It was like they created up in ability like to do CRO where you could create a simulation of your website. It would have to reach its run for real. And it would tell you whether or not it would improve the conversion rate prior to publishing. So that you didn't actually affect, you know, you get up to work through the test from a failing or fetching revenue. But super interesting.

“Do you do you feel like you are good at predicting which one will work?”

Yes, so this is interesting. I feel like five years ago I was really good at predicting when I do not feel like I can predict. Winners of the offer level like this product at this price with this story. Yeah, going to work. I don't feel like I'm very good at predicting ad creating where I feel like there's a degree of randomness in this new and drama and a thing or whatever.

And I sometimes I feel like Facebook latches on to something way too early and just runs over it. Yeah, and I'm basing that on like how that product might sell on another channel or via email, but like.

Yeah, I feel like I've actually gotten worse out, but I think the solution the solution is just.

It's not that much as low cost. Yeah, because this you can bring down that cost to create that, then it doesn't matter if you're batting it. Yeah, that's right. Yeah, that's that I feel very similarly. It's like a constant just blown away of whatever comes out the other end of the sheet.

So when you guys get to actual Black Friday, cyber Monday, is the goal then do you just you give like first month membership free. That is the goal to provide the discounted value around trying to get people to opt into the membership or is it bigger discounts for members. Like, how do you think about the offer decided is it both like where do you actually do? Yeah, so, but by Black Friday, you know, we would have already dropped product at a very discounted price to remember. So sometimes the pricing is going to be a little lower than the sequencing it to the members get early access to discounting is out there.

Yes, yes, early access plus plus the discount. And you can, by the way, you can become a member at any moment and get that discounted price as you're going to see the two price. So you'll save money right away. Yeah, exactly. And some people sign up just for the discount and cancel.

That's fine. We're going to make it easy. We're not going to keep you on there. It's not something you can't cancel. It's very classic retail.

Like sign up for the credit card today and this, your flights free or whatever it might be. Yeah, but ultimately, we want people who are staying more for the cost. Like they want to see like their impact every month. So we find that the people who stay are going to eat more from that. Yeah, interesting.

So the primary driver of the membership value is the perceived value of the charity. That's the highest LTV. I think it is long-term. But I mean, you definitely, you definitely sign up for you. Get free shipping your first order and you get it.

You know, sometimes 20, sometimes 30% discount on that item. So is the payback? Do you think of it as like you're willing to subsidize that for a period of time for the payback? Or do you try to be first order or month membership positive? Yeah, no.

We try to be first, you know, or positive. I think, you know, we may get a little more aggressive in September, October. Yeah, maybe a little bit in the red just because like we see the payback on next two months. But like, you know, we're still ultimately a product, a company that sells products that don't have the DNA of these products is not high LTV.

“So you still remember one of the things that you did is that you like paid and come off all of your media buyers on last click GA revenue?”

Is that still your preferred? No, we do not do that anymore. So we do, we do have a comp model that is based on the CM. Okay. And then it's basically it's carved up amongst the media buyer cool based on that.

But it's no longer. I mean, it is somewhat last clicked, but it's more driven by the entire CM that's provided by the business.

I always because it's funny.

I remember somebody about conversations like because I don't think it was ever that you didn't disagree that it was understated. But it was that it had this long continuity of like it's a data point that exists. It's still indicative relationally over time to the value. Yeah. It's conservative and protects you as a business.

And I always like would go back to this in my head of like, yeah, there is something about the persistence of that that you can look out over time. And it's not an attempt to answer the question of like, is this all of the value attributed? But it's that it's a signal that moves in points in one way that if you were to pay people off of it, would you ever over pay those? Which is like dangerous. Yes, the business. So I've always got to go back to it.

Okay. What do you if a brand? What do you think needs to be true?

“Because I think membership is one of those things that at its worst is just like exploitive of the customer for the sake of hoping they forget to cancel it.”

And you can extract your dollars when they're not ordering. I've also seen people like make the mistake of they start accruing all these like credits basically as part of the very end all of something. That's like your balance sheet and you're like, oh, shit, I actually this person has an outstanding 75 dollars that I owe them. Right, but they have like and it creates like immense complexity and all these different things. We went on this path that they were for a while.

Then it was like the end of it were like, is this incredible all different?

Just moved dollars from revenue to membership, it's like, what happened? Like, how do you think about trying to assess the value of those dollars versus the revenue dollars had not conflated?

Yeah.

Yeah, it's already.

I mean, I know she's talking about with the sort of credit model and we went a different direction, which is just it's just discounts and you really don't know what your discount is going to be.

And so that product appears and then you get that. So, but I mean, to be honest, I don't think our membership model would work without that experience that customers have, which is like watching the journey of dogs being fed from their purchases, watching the metric.

“You know, yes, they love the product and they love the discount, but I think that it's that whole package.”

So I think that it's if you have a if you have a consumable and you start a membership program. I think that's where you got to ask how much. What is the incrementality here? Because it's like the nature is already different. But you don't have that at all.

Yeah, right. Super. Yeah, because it almost feels like the frame is like I think about if I'm charity water and I'm selling somebody up for a $10 monthly donation. Their job that is to in line with the donation also add to me. They've done these other things, but it's some ways that it seems like that.

Like you're almost getting them a schedule.

And in their heads, they're going, okay, I'm doing this recurring donation to this program.

And I'm getting this that benefit for all these things. Right. So, like do you think. Can you think of other brands? Do you pay for any of our ships?

Um. Not like this, I mean, you know, gym membership. Yeah, I'm just trying to think of what, what would a brand have to offer me? Yeah. I think the vibe, the interesting thing for us is we're not a charity.

Right. But I think that in a lot of ways, are you a beauty or? No. No. I think a lot of ways we do a better job than the charity partners that actually show me the impact.

Right.

“I think that's why people stay just like they're coming along and it's more of like a club and the experience of like they're following the journey of animals.”

And that happens to be product through. I think of like our product is like it's like a souvenir of a of a giving experience. So, it's like when you go in vacation, you're not buying a t-shirt because you need another t-shirt, right?

You're buying it as a symbol to remember something like an amazing memory.

And I think that people with immense mugs, all those things are absolutely. You don't need any of it. It's a discretionary purchase. So, but you will buy it to symbolize something that you believe in something that you did. And that's your product.

Yeah. That's a great thing. Is I think there's so many brands. You didn't like the ones that they're just. We just had somebody on and I asked in this question of like if if you look out to.

2030 and you were to look at your existing product mix. Then you were to say okay. Four years just four years. What percentage of your revenue in 2030 comes from the products you have today? And he's like, maybe 40%.

“And I think what's so hard about e-commerce is that.”

Our future revenues are so predicated on ideas that don't exist yet. Then we have to come up and solve for it. There's nothing about the revenue that is truly Durham. That's really resilient. Makes the business model really hard.

There's no network of fact. There's no thing where you can look out and go because I have this revenue today. It's not going to have this revenue tomorrow. And it's just it's really fleeting in that way that's challenging. And so I think there's this desire to find.

I saw what you guys do with media. Like this way in which don't have to. When you when you do the hard work of selling a customer into your community. That there's some way that the relationship has some longevity to it. Yeah versus so being so transactional all the time.

It's hard. Is there anybody that you take inspiration from if you look out and you did? Like, where did you come up with the ideas? Like, where do you get inspiration for thinking about how you do what you're doing? Yeah, it's a question.

I mean, not particularly. I mean, I definitely follow a lot of brands that have charity components. And it's just like it was such a big thing for a while. It does and it feels like it's trendy for a while right? And I think that, yeah, I think that, you know, a lot of it is.

It's really hard to actually plug your company into a, you know, charitable experience and sort of like do the hard work. I mean, like later our warehouse is doing distribution of care packs to shelters. It's like, oh, you think we just ship orders, but no we're actually doing logistics to bring, you know, food and treats and toys to shelter dogs and bring the pictures back to people. So it's really kind of our competitive advantage in doing that is that, you know, it's just that that's an experience that we're really investing.

And you know, not just, I think anybody who gives any percentage their sales. It's good. I think that sometimes it just feels like it's just kind of slapped on top of it rather than betting the DNA of the company. Yeah, I think, Brad's. Where was having the conversation with a lot of times early on.

There's this desire, everyone, the community accepts this word that everyone wants around their brand, this idea that there's persistent engagement. And I think what's easier to do or where there's more potential, if you're genuine about it is to embed yourself into a place where it exists. And I think the one thing charities are often forced to do because their lifeblood is community engagement is they do build that. And so, and if you are seen as like, I remember when we did this with Kayla, so we saw the CrossFit community is this place that we could engage, but we like we weren't going to build.

We weren't authentically part of this community, you know, we would go to the gym or whatever, but there was a.

A charity called barbells for booths that like had sort of like we're really ...

We ended up sharing our office space. We were really close to them personally and by saying like, hey, we want to like take the thing that you're doing and support the effort towards it. What it signals to the actual communities, oh, these people are here to get not to just explain.

“Like, and I think a lot of times the easy thing is to walk into communities and go like, oh, how can they, how can we use them to sell our products wherever.”

So there's this like, if you can actually genuinely be present by partner. It's called being palms down like come in and say like, what do we have to give in this space such that we could become contributing to it then. And in your case, like literally developing systems to help support the logistics of their operation, like you do in dear yourself authentically to a community in a way that you will. Yeah. All right, anything else, what do you think about.

Do you guys is medicine for your primary growth engine? Yeah, by far. Yeah, nothing has come close. I mean, we're, we're on Amazon, Amazon tends to be more transactional. These people are not, they don't even have the option to sign up as a member, right?

So, you know, TikTok shops is best, is definitely kind of a top of the funnel that we're. We're in Apple 11. We are in Apple 11, but yeah, we haven't scaled too much, but we obviously haven't given it probably enough. Because it seems like demographically it could be interesting. It could be a way.

Yes, it would be. What would he get for you guys? Absolutely. Anything else interesting?

You've always got some weird idea of your trying.

What do you got up to? Oh, gosh. Yeah, what do you do with AI? Like you said Marshall's doing crazy stuff. Marshall's his business partner.

Like, what do you guys, yeah, how many employees do you have? No. So, if that's the other thing that I feel like you've toggled up and down a lot. Yeah, I think it's roughly around the same probably last time we talked around 60 people. Okay.

Probably about half of them based in the US and half of them, you know, are remote. And yeah, you know, with AI, I think, you know, our first kind of major, I think use case of AI. Besides improving systems and stuff in terms of working and making things faster.

“But like, I think was obviously just deploying ad creative quickly, right?”

It just like because we make some of the products, we wanted to deploy quickly. I think what we're trying to do now is like bring it up to the offer level. So right now, it's like something gets an idea for a price discount. It's like it has to go to our product team. That's a duplicate product page.

It's got a discount. It's got a code. Some of the national landing page. So we're trying to like go all the way up to the offer level. Have an AI system basically create landing page and offer in the back end.

And add creative and publish. Right. So it's kind of all the way up. It's kind of where we're focused on it. I think that that's going to, you know,

I think innovating on the offer levels always more important than it being on the creative level.

You know, I mean, yeah, level. So I think that like the ability to iterate faster there is what we're looking at right now. And for you guys, like, there's so much opportunity there because you're not precious about what the end price of that system would be. Like, like, if it worked and the economics of the cac against the realization of value was a $13 or $38, $14, probably. Yeah, right, right.

Either way, it's going to be cheaper than having humans do it all the way through the value chain. Yeah. I think we're headed to a world where yeah, like that whole end deployment is like C. Yeah. I mean, it's like, the physical things are going to be left, right? It's like product development.

It's a factor. You know, that's, even though we use AI to concept there. We're still a physical production until the robots can do it. You know, we're not big fans of pure, you know, we don't do AI influence or things like that. But there's, there's, there's some amazing ways to make AI creative.

It doesn't attack you. So that isn't manipulating people. And really shows the problem the way you never be able to do it. If you were to take it, that's for sure yourself. Um, you still have never, you're still pretty private.

You don't go out. You have the chance. Yeah. Yeah. Yeah.

Uh, are you on any of the socials these days or are you writing? Like, you're getting, you're getting to your old man face.

“Like me, bro, where you need to reflect your with the money.”

You're probably like 15 years ago. I had a, I had a blog and I published on Twitter. Yeah. And this was, I've before I knew you and I just got over. I just like, I don't know.

I don't know. I just like the hide now. You could probably just probably probably should. I think that writing clarifies you thinking. I need to do more of that.

Um, what's new with your kid? What's it like having a high school or driving? Yeah. That just happened today. She passed her driving test.

So here we go. Well, she excited to get her license. Because I heard the kids these days don't even want to see us. Yeah. She's very responsible. Yeah.

She's going to be taking the kids to school. Really? She's yeah. Did you get a car? Yeah.

Yeah. We get her car for a birthday. Nice. That's a surprise with that. So amazing.

She's like, where are they going to school? Uh, they go. Ali, my oldest brother. You don't want to say this. Oh, no.

She goes to orange Luther and then the grass. We go to St. Paul's. Nice. It's wild. We're watching.

Like I literally have pictures in my head right now. Our little kids just running around. Um, but then you've been out. You've been out this long time. I appreciate you stopping by.

And uh, Everybody go get yourself some military patriotic wine mugs for dogs. Over 40 pounds that are from out Cheerios. Yeah. Yeah.

Whatever your breed is. Oh, it's funny because well, here's another funny story. So I was, I'm not going to say I was anti.

I was like, I never had a dog.

Mainly because I did a thick.

I think I saw them as an emotional cost.

And I was tired because I have children.

“But now I've realized that like I talk as like my emotional.”

It's emotional support is real like.

Only person who's ever excited to see me when I come home is my dog.

“We actually have a bathroom in our house.”

That is literally only.

Only the only decoration is painting of the dog.

A candle of the dogs. We're awesome. We're awesome. Justin, hi. I appreciate you, bro.

“Thanks for being a mentor to me and give me lessons that have lasted a long time.”

Appreciate you. Appreciate you. To you.

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