Why 8-Figure Brands Waste Days Finger-Pointing When Results Miss (And the Fix)

finger pointing problem like comes to life.

And it not always that obvious,

“it can just come in the form of a simple question”

of why did we miss? And, and not necessarily being any person who's just like, here's the core reason. And here's what we need to go after it. - This episode of the e-commerce playbook

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“- Hey folks, welcome to the e-commerce playbook podcast.”

I'm your host, Richard Gaff. And director of visual product strategy here, a comment fair collective. I'm joined today by Brian Sekansky, who is one of our profit engineer managers here

at Common Fair Collective. And Brian's been on the pod with me before. She's an e-commerce genius. And he's here to share some thoughts on a very specific problem.

But first off, Brian, how you doing? - Doing good. I mean, appreciate the flattery to kick us off here. I wouldn't self proclaim myself a genius, but yeah, I've been in the game for well over a decade.

And it's always fun and interesting here in e-commerce land.

- Yeah, but we'll let you as the audience decide for the not-brain as a genius. And I'm pretty sure I know what the answer is going to be. So let's go ahead and get into here. So what we're talking about here is something

that we call the finger-pointing problem. And what the finger-pointing problem is

“is at eight and nine figure e-commerce brands.”

What ends up happening is that when something happens when something goes sideways in the quarter or the month, then what happens is people try first and foremost to figure out who's to blame for the problem rather than going in and solving the problem itself.

So what kind of the, our thesis here for this conversation is the idea that that's not really like, or maybe what I should say is that that's primarily a human psychology problem. In a situation like that, people will inevitably point

the finger first before solving the problem unless you have a structured in place to prevent that. And that's something that we've worked on a lot here at CTC, something we set up with a profit engine system.

So we're going to kind of dig into specifically how that problem comes about and then how we fix it here at CTC. So let's start. Maybe I'll start with Brian talking a little bit about

personal experience with this type of problem. How you see it crop up, maybe with clients, maybe your own sort of e-commerce adventures over the last decade or so, but yeah, let's start there. - Yeah, for sure.

I mean, it's, I've seen it happen in a lot of different ways depending on the org structure, how big the organization is. I mean, 'cause even the org structure, although there's a lot of common patterns, you know, at eight or nine figure e-commerce brand

can have a much larger, more distributed team that has, you know, omnichannel across wholesale, Amazon, et cetera, or perhaps it's just a solo D to C brand. And so because of that, there's a lot of different ways that this figure pointing problem comes to life.

And it's not always that obvious.

It can just come in the form of a simple question of why did we miss and not they're necessarily being any person who's just like, here's the corn reason and here's what we need to go after it. Or it's, hey, I have an assumption about what happened

because maybe meta-realized it and hit its target for one day. It is therefore the paid social buyers problem. There's a whole kind of, you know, orchestration of effort to try to go, look at the technicals of it, et cetera, deep dive on it.

And then that could actually draw attention from maybe, well, actually, we're supposed to have a promotional moment that day that we planned for, they got delayed and we missed between that daily expectation and the planning process.

And now we're just going after paid social spending time and energy to go solve that. And so, you know, the, like I had mentioned, it comes in a lot of different forms. There's obviously human personality that comes into play

here as well, perhaps a more aggressive versus more of a kind of peaceful approach. But yeah, it's ever present and the fortune of sort of where we set at CTC is we get to play often a third party, which can really see all the patterns

of how this services and creative solution works well for organizations to resolve this and to put systems

which is grow the biz and make sure we're following the plan and pivoting when we're off course

to ultimately hit our core objective for that individual business.

- So you mentioned being a third party, kind of standing outside, let's say, the usual politics of the internal team. But of course, like one element of this, the fingerprinting problem is that each third party

vendor, a lot of the time, is also incentivized to, of course, defend their own numbers, defend their own actions. And so, their ends up being, yeah, the perverse incentives don't necessarily shift because it's a third party. So let's talk a little bit about then this structural fix

to this problem and how we as a third party vendor step in and are able to say like, identify the problem without there being any of these sort of issues of blame and, yeah, yeah, kind of pushing off ownership of the problem.

“- Yeah, so I think I hear two parts of that question.”

So let me try to answer one at a time here. So I think like, yes, and the way I described,

I think is just that we're a third party who is observing

how internal politics and organization can take place and how we can sometimes step into a role of being an intermediary, but you're absolutely right to call out that we also as a third party can get pulled into, hey, which vendor or which agency

is actually the one who is causing the problem is that my paid media agency, my retention agency, whoever it might be, and ultimately the solve for that that we tire ourselves to is we say, hey, yes, we might be contracted to run your metacount.

We might be contracted to run your Google out account. We might be contracted to run your email SMS program, but ultimately what we are tying are billable and our objective to in our contractual agreement is to the business, come, and the business object it.

And tying yourself to that particular objective, fundamentally changes the whole way

“that we're individually orienting around the business.”

And so that is why when it comes to the finger pointing problem, it's a whole different dynamic. We are necessarily just reporting on the KPIs that the channels were responsible for managing our, we're instead connecting the dots

and have built a system in order to tie and closely connect. The things that we are maybe keys on keyboard for to the actual business outcome, which is just a fundamental shift in sort of operating procedure.

And we've talked about this before. And there's been a number of, I think, episodes that we've published, which is just around the challenges of maybe having an agency structure tied to like percentage of, at spend

or some other structure. But when you put up front into the agreement, which is, hey, we're gonna tie ourselves to business. How come to just fundamentally shifts everything? Which is why we, you know, create the system we have.

“So I think I address maybe kind of two parts there,”

Richard, but let me know if I'm missing it. - No, no, I think that makes sense. Like to summarize, I think the point you made at the beginning there of, yes, we own your meta-add account. But our goal is not to produce a certain romance.

That's, in fact, besides the point, like the point is to produce a certain, let's say contribution margin outcome, or something along those lines. And there's many different things that ladder up to that

in meta-roast being at a certain level may or may not contribute to it. But at the end of the day, what we're contracted against is the success of your business literally. So one thing that I'm curious about those,

like, what's our approach? 'Cause inevitably you're gonna run into this sort of problem anyway. Let's say what's our approach where we've kind of crunched the numbers and it feels to us that the issue, let's say we're not hitting,

we're not hitting our contribution margin targets. And what it feels like is that this is a creative production problem. We don't own creative production. Maybe their internal team does or maybe a third party vendor does or something like that.

And we've run into that issue. What how do we work through that without kind of descending into the same sort of finger pointing? Right now, smiles giving playbook listeners a free LTV audit. What discounting is costing you and the plan to fix it.

Grab yours at smile.io/LTV. Every discount code you send is training your best customers to wait for the next one. Smile.io gets you off the discount treadmill with points VIP tiers and referrals.

It's how monosomlocked $8 million in revenue.

That smile.io/LTV get your free audit today. Just to declare you're saying what we're interacting with another third party?

let's say you have a client that's run into a contribution margin problem.

“We've kind of traced that back to the ad account.”

The issue with the ad account is creative volume. And their creative is actually produced by a third party vendor. Or maybe it's produced by an in-house team.

Either way, we don't own that fairly critical part of the flow.

So what do we do in a situation like that? It is. No, it's OK. That's clear. So there's a couple of different mechanisms here. And sometimes it's as simple as we just need to clarify

what the actual creative output should look like in terms of volume and what we should be producing. What I often encounter just on the creative, as an example, is that it's often not necessarily a reflection of what creatively needs to, or sorry, how much creative we need to produce,

but actually getting really clear about what are the things to go produce with a level of specificity. That makes it easy to go that execute.

“So sometimes creative teams are just screaming.”

You know, maybe quietly to just tell us what to make. So that we can go execute it. Because coming up with creative ideas at volume can be very, very difficult, and especially in a drama to world, the name of the game is volume.

And so when you all the sudden go from producing, say, 30 ads a month to being required to generate hundreds, sometimes it just requires a level of clarity of how much what to go produce and to be really specific around the ad plan. So that folks can then go execute that.

So that's more when we're interacting with another creative vendor, maybe at in-house creative team. But then, secondarily, we have our own creative services here where we could very quickly spin up static ads on behalf of brands. We also have our creator team, which requires a bit more

planning at advance, since we are going out and recruiting those creators, but that allows for us to get in front of specifically creative volume in the future. And then we're not opposed here, especially when our role is to hit business outcomes, bringing in other vendors

or other platforms that we've had really good experiences with to ultimately hit the number.

“And I think that when we tire ourselves to the business outcome,”

there's a very clear shift in what the priority is. It's not about, oh, is CTC doing this thing for the sake of benefiting like ourselves. In fact, it's actually, no, we need to hit a business target.

Here's what it's actually going to take to go do that, which is why

some brands were working with a handful of different vendors and helping orchestrate that effort and bringing clarity to what needs to be done. And then in other cases, we do have our own creative in-house services that we can debate and deploy on really quick notice.

If we need to fill gap short-term, or to just help benefit towards the brands overall is in a subjective. So again, it just comes down to like, when we tire ourselves to the business outcome, all of our actions and recommendations are oriented against that.

Instead of just in our maturity, well, how do we just increase the billable over time? Because that's not really the game that we're playing. Yeah, so what are you saying there is that maybe the difference between the scenario that you've just laid out and the sort of

initial scenario we sketched out of a brand with a bunch of different vendors all because sort of pointing the finger at each other. That a fundamental difference there is like those vendors are sort of running off their own KPI that they, themselves, are sort of generating.

And so in this situation where let's say we're bringing a bunch of external vendors into the system in order to achieve the outcome, it's the situation there is that we're providing the targets for them. And those targets, of course, again, aren't arbitrary. They all ladder up to something that we've sat down and worked out.

In order to get to a certain contribution margin goal, we're going to have to hit this number. If we need to bring a third party vendor on to hit that number, then that's what we need to do. But either way, we are sort of owning where the single source of truth for what

that third party the needs to do. So it becomes very clear whether who's succeeding and failing and what they're succeeding and failing at. And so then you don't have to waste all this time sort of figuring out

who or what the problem is, I guess.

Yeah, and what the thing I would just add to that too is like the beauty of, you know, working with a lot of these businesses is that we see that there are a number of core levers that tend to help close gaps against business outcomes much more effectively than others. And sometimes it doesn't necessarily just mean that we have to deploy more

Maybe we need to just deploy more add dollars because we know that they are profitable add dollars.

“So we have a lot of ways that in profit engineers have a lot of different”

levers that they can pull in order to hit the plan that we set out for

and making sure that ultimately we get to that business.

Now, so I mean a couple of other things to point out here if it's not sort of clear already one of the fundamental advantages of this system is that it's fast as opposed to having to sort of work out who's right and who's wrong. Instead of having to spend a bunch of time on that, arguing basically about what needs to happen next.

You have the definitive answer about what needs to happen next on a day to day basis. And so the profit engineer is able to put that into play quickly. Any other thoughts, Brian, and on sort of like in your experience anyway, like what with the advantage of this is over. So the general set up.

Yeah, what do we when we go and plan out among the quarter a year, right? Specifically when we zoom into a monthly plan, you know, the monthly plan is broken down into daily expectations and then those daily expectations are broken out into their respective channels, right? And then, you know, as we have those daily expectations outline,

we have the tactics and levers that we will pull in order to achieve those daily outcomes. So it's it's very quick for us to recognize what is in the green and what is in the red.

“And that's the key to the colored differentiation and status, right?”

That basically shows if you're on track or off track and that clarity is, first of all,

saves a ton of time so that we could focus on producing the things that are actually going to materially move, move the needle here and often when brands are spending, exorbitant amounts of time trying to constantly diagnose the issue, that takes away from the work which needs to be done, create more creative, send a couple more email SMS, plan for that marketing moment that is months out in advance so that we can really orchestrate a cohesive effort

that's going to, you know, move us above the baseline. And yeah, this this pattern which unfortunately I see brands kind of chasing their tails on is there's a problem like we're off course or maybe some executive comes in or founder comes in is like, why are we so off? People spend hours or sometimes days trying to diagnose it, went off to the profit engineer, you know, just in the matter of minutes and for something more nuanced maybe a few hours could

just be like, nope, that's the issue. We need to go resolve that and here's how you're going to do it and hey, we have these resources to help you do that if you can't do it yourselves. That's that's a pretty significant competitive advantage as an e-commerce brand. Yeah, so obviously statistically speaking, the best majority of folks out here listening are not CTC clients right now. And of course, if you are in its eight figure brand and you want to be a CTC client,

comment for a code.com, hit the IRS button, obviously we'd love to build this for you and and sort of help clear up some of the decision making ahead of you. But obviously let's say you're not in that position right now or you're a smaller brand, what is sort of the one piece of device like the one thing that you could put in place now to begin moving towards this. But I would say that you want to have an addition to having your monthly targets set up,

which I think a lot of brands do have some sort of monthly plan, right? Monthly KPIs that they are establishing. Often the biggest thing that I see missed is just actually breaking it down

“to a daily expectation. And and then from that daily expectation, if you want to go a second”

level deeper is what are the core actions or assumptions that lead to that expectation. It's it's all too common. And this is not a dump by any stretch of the imagination, that not a lot of people go through this planning rigor. And and often folks will not

challenge those assumptions. They will just say what we've always produced this sort of revenue

outcome or contribution, or should I come? Therefore this should be the expectation of the future. But there's very clear reasons why. And so yeah, it's a step will end daily expectations beyond the monthly expectation or quarterly expectation that you have. And then also getting really clear about what are the assumptions that ladder up to that daily expectation broken out by channel. So if it's an email expectation, what is your flow in campaign revenue on that day?

That's going to lead to that and getting really really clear down to the channel level as to the bottoms expectation that are going to lead to that that forecast. And it's just, no, that's right.

them into short term targets. So that there's always this continuous feedback loop of I know what

I need to do today. And I know whether or not I've succeeded. But those decisions are planned for in such a way that in the long run, if you hit those targets and if you're reassessing those targets properly on a day-to-day basis, you will eventually get to where you need to go. So wise words,

“I think that's going to do it for us. Anything else that you want to hit on this brand?”

I don't, I don't think so outside of, I think just normalizing that finger pointing is very

common. And it's not necessarily a negative connotation. I think it's just a more of, you know, there's, there's an, as I've learned it for being any comfort for well over a decade, it's like there's so many things you could be doing at any given point in time that it's often

“really difficult to assess what is the most important thing. And so I just want to normalize that”

being unclear is very common. But it's the reason why, you know, I'm so bullish on what we offer

is because that clarity not only alleviate so much mental weight from your decision-making, as an e-com operator or as an e-com business, but also leads you much more quickly to the most high leverage actions that you possibly take. And so I really proud of the work we do and that my team does in order to support the businesses that we work with. So again, I'll just say like it's totally normal what you're experiencing if you feel like you're constantly trying to figure

out and point fingers and, and, and solve things, you're not alone. This is, this is something that we talk through with businesses all the time that we work with, especially as we get them up to speed on what we're doing and bring them into our workplace. That's right. Well, and again,

“if you want to have us build this out for you and kind of solve this issue for you,”

comment their code.com, hit the iris button, you love to talk to you if you're an eight figure brand about construction this way. All right, as you're going to do for us, thank you for joining us Brian and thank you all of you out there for listening. See ya. See you, Richard.