Gut Driven Brands! Nate & Producer Scotty Take Over!

Summary

Podcast Summary: Brain Driven Brands Episode: Gut Driven Brands! Nate & Producer Scotty Take Over! Release Date: December 3, 2024

In this special episode of Brain Driven Brands, host Sarah Levinger is absent, allowing Nate and Producer Scotty to steer the conversation. Titled Gut Driven Brands, the episode delves into instinct-based marketing strategies that complement advanced neuromarketing tactics. Nate shares four actionable tactics to enhance e-commerce marketing through gut instincts, while Scotty provides insightful interjections that add depth and clarity to the discussion.

---

1. Stay Close to the Ground Floor of Your Work

Nate emphasizes the importance of being intimately involved with the foundational aspects of your business operations.

Key Discussion: Nate begins by advocating for leaders, especially CMOs and heads of growth, to maintain hands-on involvement with critical platforms such as ad accounts, Klaviyo, intelligence accounts, and Shopify. He argues that understanding the nitty-gritty details allows for the identification of subtle changes that can significantly impact business outcomes.

Notable Quote:

Nate [01:13]: "There's no excuse not to be in your ad account. There's no excuse not to be in your Klaviyo account and your intelligence account and your Shopify every single week."

Scotty’s Insight: Scotty questions the practicality of Nate’s approach, prompting Nate to clarify that while delegation is essential as a business grows, leaders must still oversee and understand the granular details to make informed decisions.

Notable Quote:

Scotty [02:24]: "I think that's kind of the bold move."

Nate [03:13]: "I started running our Facebook ad account myself two years ago and what I've learned from it is massively valuable across every layer of our marketing."

---

2. Connect Your Daily Tasks to One North Star Metric

Nate underscores the necessity of aligning all business activities with a single, overarching metric to ensure cohesive growth.

Key Discussion: Nate explains that businesses often falter by trying to optimize multiple metrics simultaneously, leading to confusion and diluted efforts. By selecting one North Star metric—typically a profit goal—teams can streamline their focus and enhance decision-making processes. This approach prevents conflicting objectives, such as pursuing revenue and marketing efficiency ratio (MER) goals that may not align.

Notable Quote:

Nate [08:20]: "Jesus said, you can't serve two masters. I say in business you can't serve two metrics."

Scotty’s Perspective: Scotty agrees, highlighting the challenges small brands face when balancing sales and profit. He emphasizes that prioritizing one metric over another can lead to more sustainable growth.

Notable Quote:

Scotty [10:03]: "Everybody wants sales or profit, but you have to pick one."

Example Provided: Nate shares how his company shifted from MER goals to contribution margin goals, resulting in tripling the company's size and improving profitability, despite a less favorable MER.

Notable Quote:

Nate [13:16]: "We've tripled the size of the company and our bottom line is way better than it used to be."

---

3. Stay Close to or Become Who Your Customers Are

Nate advocates for deeply understanding your customers by immersing yourself in their experiences and perspectives.

Key Discussion: Understanding customers on a personal level allows businesses to tailor their products and marketing strategies effectively. Nate uses his experience selling watches made from whiskey barrel wood to illustrate how embodying the customer's lifestyle can enhance product relevance and appeal.

Notable Quote:

Nate [17:02]: "Get as close to your customer as you possibly can, even if it's just a thought experiment for like a week."

Scotty’s Story: Scotty shares his personal journey of embracing aspects of Nate’s customer base, highlighting the psychological benefits of aligning closely with customer identities.

Notable Quote:

Scotty [18:48]: "But I'm fine. You know, I'm fine."

---

4. Document Monthly Business Happenings and Feelings

Nate highlights the value of regular introspection through documentation to refine business instincts and strategies.

Key Discussion: Maintaining a monthly journal of business activities and personal feelings helps leaders reflect on their experiences, recognize patterns, and make informed decisions. This practice fosters a deeper understanding of what drives business success and addresses anxieties proactively.

Notable Quote:

Nate [19:31]: "Once a month, I want you guys to document what's happening in your business and how you feel about it."

Scotty’s Advice: Scotty encourages embracing financial literacy by collaborating closely with CFOs to better understand financial health, budgeting, and the interplay between marketing and finance.

Notable Quote:

Scotty [14:28]: "Cuddle up to that CFO, get to know them, and work on budgets to understand the math."

---

Conclusion: Balancing Brain and Gut in Marketing

Nate and Scotty wrap up the discussion by reiterating the importance of integrating gut instincts with analytical strategies. They emphasize that while data-driven approaches are vital, leveraging personal insights and instincts can provide a competitive edge in the dynamic e-commerce landscape.

Final Thoughts: Nate acknowledges the significant improvements since adopting a more brain-driven approach under Sarah’s guidance, reinforcing the synergy between instinctual and analytical marketing methods.

Notable Quote:

Nate [22:12]: "Work with Sarah. Make more money. Buy nicer whiskey, buy a farm and be happier."

Shout-Out to Sarah: Despite the episode being a guest takeover, Nate and Scotty pay homage to Sarah Levinger, acknowledging her pivotal role in their marketing success and encouraging listeners to follow her expert advice.

Notable Quote:

Scotty [21:45]: "Sarah Levinger is a badass. Do what she says to do."

---

This episode provides invaluable insights for e-commerce brands seeking to blend instinctual decision-making with data-driven strategies. By staying engaged with the core aspects of their business, focusing on a singular metric, deeply understanding their customers, and maintaining regular introspection, leaders can foster sustainable growth and enhanced profitability.

Transcript

[A]

Here we go. Here we go. Sarah's not here, guys. So this is not an episode of Brain Driven Brands. Just me and Scotty O in the. In the studio today. And to be honest, before I met Sarah, I didn't use my brain a lot when it came to marketing. It was. It was a lot of gut. It was just a lot of shooting from the hip.

[B]

And you came from the streets.

[A]

You have, man.

[B]

You came from the streets of marketing.

[A]

Yeah, Just. Just left my university that you've never heard of with a 2.4 GPA, a degree in the interdisciplinary studies of business and marketing because that was the quickest way to graduate, apparently. And when I say quick, I mean four and a half years. But yeah, it was. It was a lot of instincts that had gotten me through my career and even to this job. And, you know, since Sarah has been around and helping us, it's gone better. That's for sure. But today, this is not an episode of Brain Driven Brands. This is an episode of Gut Driven Brands. And I'm going to cover four tactics because, you know, we're going to get tactical and practical while Sarah's gone.

[B]

There it is. Ring the bell, everybody. Drink.

[A]

I'm going to cover four tactics to help develop your instincts in E commerce. How does that sound? Scotty?

[B]

I'm. I'm on the edge of my seat.

[A]

All right?

[B]

I weren't sitting.

[A]

All right, Interrupt me whenever you want to dive deep on these.

[B]

I don't even know why you want me here. It's a solo show. You. You said, hey, Sarah couldn't record a full takeover, so. I bet.

[A]

All right. All right, then I'll go. Tell me when we're at time. Go number one. Stay close to the ground floor of your work. Stay close to the nitty gritty. Don't be afraid to kind of keep your hands dirty, especially as your business grows. I think there is no excuse for a CMO of an E. Com brand as long as you're doing less than like 250 million a year. There's no excuse not to be in your ad account. There's no excuse not to be in your Klaviyo account and your intelligence account and your Shopify every single week.

[B]

Okay, so this is my role in this.

[A]

There you go. You said this is a solo show 30, 35 seconds ago, but here we go. First interruption from Scotty. What's up?

[B]

I think that's kind of on par, isn't it? Exactly. No, I like to qualify that. I think it's a bold statement. Cotton. But I mean, a bold move. Cotton. But my point is, okay, so do you have a team under you? What kind of, what does chart look like here? What do you have responsibilities? Empowerment? Because I think that's, I think that's, that's the underbelly of your comment. I'm not disagreeing with you. I don't have a, I don't have a hard take against it. I'm just curious.

[A]

You don't need to be the one doing all the work, especially as you grow, even to our size. I have a team under me that is doing the vast majority of the work. But I think you need to be in there to check on it. And this has nothing to do with not trusting your team or not delegating appropriately. I think you need to see all the little details and the nuances that go into making all these different platforms and channels work. Because I think the devil's in the details. A lot of the times in E commerce and oftentimes it's subtle changes in headlines or copy or account structure that can produce outsized business results and their piece of information that, you know, your lead media buyer might not always know to include in a weekly report. You know, your email strategist might not always know to include like, hey, we tweaked our send times a little bit and maybe the team running our ads should know that. I think if you're in the seat of CMO or head of growth or VP of marketing, you're in that seat because you're probably better at this than everyone on your team. And I think you need to run all the data through your filter rather than just relying on high level reporting.

[B]

You have some examples. I'm going to let you go. Not that I have pushback, just, but just I think this is an interesting string here.

[A]

I think it's important. And the biggest example for me is I started running our Facebook ad account myself two years ago and what I've learned from it is, has been massively valuable across every layer of our marketing. And it is all about the subtle nuances that don't come up in weekly reports. You know, it's about the different headlines and copy and messaging and subtle tweaks to our visual creative that I wouldn't have known are making a real impact. Just looking on the Monday report I get from my marketing guy and because I'm the ringleader of this marketing department, I'm able to now see the all those data pool points really decide what's making a difference and what's Not. And making sure those differences get implemented across the entire team. Yeah.

[B]

Now this. In this scenario, Nate, you knew that you got to know the business from the bottoms up. I mean, this is a bottoms up. Right? You're on the ground level and now you're the hoity toity having to make decisions. And you're responsible for those decisions and the outcomes. Correct. But you. Yeah, I'm all for you. It's. You're going to be a great. A better driver and a better leader if you understand from the bottom up what is going on. So therefore your questions are actually a lot smarter.

[A]

Agree 100%.

[B]

But there's another route to that that is not always you have ground up. But keep going though.

[A]

Because I think you gotta understand enough to be dangerous.

[B]

Yeah. You have to understand concepts you understand. Here's the biggest thing with all the senior. Again. I was, you know, I had a small company. I was a senior or whatever. All I cared about is what does it mean and why should I care? That's really all. If I trusted my people and I understood it because I did it from the bottoms up. And there's always variables and there's always reasons. Right. I didn't want surprises. And I just like, what does it mean and why should we care? That's all I wanted to know.

[A]

Agree with that. 100. I just think someone in your seat or my seat is going to be better at answering that question than sometimes your team is going to be.

[B]

Got it.

[A]

That's all. Because, like, kind of coming back to the next topic here.

[B]

Oh, really? Is that a smooth transition?

[A]

This is smooth transition here.

[B]

Smooth transition.

[A]

Because I think everyone's had the experience. You need me?

[B]

Do you need me?

[A]

That was almost scripted. How smooth this is going to flow into it. And now it's not. Because we're pausing for 30 seconds to talk about what a smooth transition it is. But that would have been great if we were professional enough to just keep it rolling.

[B]

You know, I ain't buying it. Let's go.

[A]

Maybe next time Sarah leaves us alone for a week. All right, the next point is to connect your daily tasks to one North Star metric. And what was the thing that was just a smooth transition? What were we talking about?

[B]

Jesus. Good God, man.

[A]

What. What did you say about.

[B]

How about decisions about the. The leadership? As far as understanding who.

[A]

Why do I care? Why does it matter?

[B]

Yeah. Well, why is it. Yeah, why does it care? What does it mean? How do I. How does it.

[A]

Okay, so the reason I like to connect everything to one Business metric. And one North Star metric is because I think we've all had the experience of like getting a weekly report from an employee or an agency or contractor or whoever, and they'll report on a metric that you don't really care about and they'll be like, hey, the click through rate on our ads is the highest it's ever been. Meanwhile, you're looking at the P and L and you're like, we lost money last week, so what the fuck are you talking about? So there you go. Smooth transition completed here. But I'm really big on boiling everything down to one metric. Scotty, have you heard the quote, no one can serve two masters? Maybe it says you're either going to hate one and love the other or do you be devoted to the one and to despise the other you? Do you not know who said that?

[B]

I. If I did, I forgot.

[A]

All right, his name was Jesus. He was, he was a carpenter a couple thousand years ago. Dropped some bars, if you're not familiar. But Jesus said, you can't serve two masters. I say in business you can't serve two metrics. I think when you set out, see.

[B]

What you're doing there. Wow.

[A]

Yeah, that's nice, right? I know you're Jewish, so that didn't hit super hard.

[B]

Hey, you know what? Nice Jewish carpenter, the last.

[A]

Do you know who else was Jewish? Jesus. There we go.

[B]

I know, that's what I'm saying.

[A]

Yeah. Anyways, I think it's such a problem when businesses set out to achieve a revenue goal at a certain efficiency metric. I think you're going to miss one of those goals. I think it's counterintuitive to growing your business. I think if you're trying to hit that, you're probably actually trying to hit a profit goal and you should just make that profit goal your North Star metric. Instead of saying do X amount of revenue at X blended efficiency and see how it goes. Because confusing the waters and confusing your team on which metrics are most important to you is not going to be good. And if you connect your tasks to that one metric, you're going to help develop those instincts quicker and you're going to be able to make decisions quicker on what's actually moving you guys in the right direction.

[B]

Now, now here, that. Now you're speaking my jam.

[A]

Here we go.

[B]

Yes, now you're speaking my jam. Because the laws of digital advertising and this, I run up against this all day long. Everybody's like, producer Scotty who? What do you know? Well, I know A couple things. I've just been doing this for a long time. I don't know.

[A]

For the record, Scotty's not a podcast producer. For everyone listening, there's a lot more to the guy than that.

[B]

Thank you, Nate. That's very nice. I'm a complicated soul. No, my point is, is that everybody want. I agree. Get everybody on board to one, as the kids say, KPI, the one metric. Okay. But in digital advertising, the law is the law, and I've tried to break it and everybody tries to break it. You either want to get sales or you want to get profit. It's again, you have to do. And when you start out, it's just you can't have both, is my point. I mean, there are brands that have. And now everybody's going to get pissed off. Like, I have both. And it's like, yes, okay. There's reasons behind it.

[A]

If you have both, you're aiming for a profit, though. Like, that's.

[B]

Well, this is my other thing because I actually going to do a whole rant on this because I'm so fed up with the full funnel. Full funnel, which I'm all for. Full funnel, but small brands can't afford full funnel, Nate. They can't afford it. I'm sorry. They don't want to hear that, but they can't preach. So this drives me crazy. It's a fork in the road. There are two streets. You either pick sales or you pick profit. Now if you do one, in theory, the other one will come back around. But this is. This is the myth of all myth of all senior leadership, of all CEOs, C suites. They don't understand this and it drives me batshit crazy.

[A]

Preach. Retweet. Couldn't have said it better myself. Right there. The. The only thing I'm going to add is step two of this. Once you pick that one metric to optimize for, you're going to get so much better at knowing what's going to really push that metric in the right direction. Do you remember the pistol shooting guy from the Olympics?

[B]

Yeah, I saw that. I saw you.

[A]

Who like everyone else, has got like magnifying glasses at desk strapped to their face and their dorks, and then he comes out with LensCrafters glasses on and dominates. And his quote was, I don't need special equipment. I'm a natural shooter. That's how I think you should feel about your business a few years into it, if you've been optimizing for one metric the entire time, because you'll start to get a real good sense of like, hey, what's going to push profit in the right direction here and push everything towards that as you can. Don't confuse yourself with a revenue goal and a profit goal and a blended return on ad spend goal. It's messy and doesn't do any one any good. So pick one goal.

[B]

Let's get real life here. Nate.

[A]

Yep.

[B]

Do you have a cfo, a controller, somebody who responsible for the financial health of the company?

[A]

Yep. Laura. She's great.

[B]

Okay. Does she understand this concept of yes. Of one metric? Did you, did she know that before she came? Is she from a sales and marketing or digital ad background?

[A]

No. This was something that we kind of changed throughout our organization three years ago because previously we were operating the way that most econ brands operate is a revenue and a MER goal or a marketing efficiency ratio goal. And we got in there and basically the rule, it's like if we're doing better than that MER goal, we can scale ad spend. If we're not, we have to cut.

[B]

Yeah.

[A]

Which is a problem. And it's a vicious cycle that never really pays off. So we ran some scenarios of like, hey, what if MER goes up a little bit, gets worse, but we can double our ad spend. What does that look like? And that's when we changed to shifting everything towards a contribution margin goal or bottom line goal. And now we are running at a worse MER than I was allowed to run at three years ago. But we've tripled the size of the company and our bottom line is way better than it used to be. So yeah, this was like a big thing for us and it's something I tell every brands to do. Now map out those different scenarios. What you're going to see is profit does not always correlate with roas or mer and you need to be optimizing for that if you want to stay in business for any amount of time.

[B]

That's awesome because so many finance. Again, my, my recommendation to people they're intimidated by. Again, I, I can speak, raise my hand. Before I was intimidated by CFOs, they asked me hard questions. I didn't really want to answer all those things. But my. To your point. And that's a great story and that's. I believe that's a rare story.

[A]

Yep.

[B]

To be honest, because most people, they're siloed, they don't really know what's good. They just gas. And like you said that they do their own mental math of what a P and L looks like and it's they don't understand how the process is. So my here thing is, you cuddle up to that CFO Nate, you get to know that cfo, you work with them and work on budgets and understand the math, understand balance sheets, P and Ls, understand the finance world. And I'm telling you, it'll pay off, which it sounds like it is for you.

[A]

I think some of the most important work I do is aligning marketing with finance and with operations. Like, if those three things are not tied at the hip in your company, you're going to be in trouble a lot of the time. And like, one of the biggest kind of mental shifts for us has been to realize that advertising is not an expense. I do not look at advertising as an expense. Most CFOs and CEOs and even some CMOs look at it like the biggest line item on their P and L and they're pissed about it. But since we've been doing it this way, we see that ad spend is the thing that has the strongest correlation with profit. The more we spend on ads, the more money ends up in the bank account. So now we don't look at it as an expense, we look at it as an investment. And everyone's a lot happier and a lot richer these days.

[B]

Now, I'm going to on the other side of that, right? It isn't just, just go hog wild. No. You got to be good drunken sailor every day and just spend your little br out because then you have dependencies and you have like, if we don't spend this, it returns that. And, but I agree with you. Roas is probably one of the biggest false narratives and, and limiting returns because in the finance world, I get it. I spend a dollar and you give me $3 back or $2, whatever. Yeah, you mean more than the dollar back. That's how I measure everything. But that's not, that's not the truth. That's not really what's actually happening.

[A]

Yeah, and then like this year, I actually ran the numbers today is those decreases in efficiency as you scale aren't always as bad as you think they're going to be. Like the numbers I pulled today. This year we're spending 107% more money on ads than last year. Our blended return on ad spend has gone down 8%. So it's like double ad spend, lose 8 points of efficiency. That's great. I'll make that trade for the next, I don't know, 10 years and we'll be fine.

[B]

Well, that's a bigger story. But yes. Okay, I like where you're going. Keep, keep, keep.

[A]

All right, last two points here. Number three, stay close to or better yet, become who your customers are. Get as close to your customer as you possibly can, even if it's just a thought experiment for like a week. I have the massive advantage of being a good representative of who our customers are. But even if you're not, attempt to live their life for some period of time. I sell watches made from whiskey barrel wood. So obviously kid drinks whiskey, you know, but if you sell tents, yeah, that'd.

[B]

Be funny as hell. I'm Nate and I'd never liked whiskey before.

[A]

I came to no straight edge. But now it's full blown addiction. No. Can I tell you so you. I.

[B]

Bars and whiskey.

[A]

So I think you know, because I think we've talked about on here. I'm doing sober Q4.

[B]

Yeah.

[A]

So I've not had a drink in whatever, 41 days. Not that I'm counting. Do you know how extra hard it is to give up something you like when my entire job is like writing copy? Like, good whiskey creates good times. And here's 15 photos of watches and whiskey bottles and it's like, all right, come on, that's.

[B]

That's brutal. But man, tip the cap to you. I mean, that's.

[A]

We're making it.

[B]

How do you feel, dude?

[A]

No, better. I'm pissed because I was expecting to sleep better and like, feel all this mental clarity and feel physically better. Don't notice a difference.

[B]

How's coping with all the things you have going on?

[A]

It's good. I'm also now like seven days without a Snickers bar, so that's big. I'm eating cleaner.

[B]

Are just knocking them down.

[A]

Yeah, but I'm fine. You know, I'm fine. I'm fine.

[B]

No, but there's a psycho psychological rant to this. There's an edge to this. There's an angle psychologically. Right. What did the. The. What you did in that relationship, how you earned the trust of the cfo, how you. How you figured out how to become the customer and all of these things. I think there's. See people go, oh, sales. You know, I'm not in sales. Yes, you are. Everyone is sales all day long, every day.

[A]

The entire goal of your company is to sell the thing. So I don't care if you're in accounting. It's part of your job to help sell that thing.

[B]

We go back to your very well crafted document here.

[A]

Let me get my last point out here. Once a month, I Want you guys to document what's happening in your business and how you feel about it, and then go back and review it quarterly and yearly and, like, put in notes about why you were feeling that way. What was the ultimate outcome of that. I think that's something can be huge for your, like, developing your instincts for your business, because we all know that hindsight's 20 20, but we never use that to inform future decisions. And, like, for me, like, in October, I was feeling anxious and underprepared about hitting our Q4 numbers because we're looking at the biggest and best quarter that we've ever had, and the numbers are big. So then I went back and checked my journal from last October, and I was feeling anxious and underprepared about hitting our numbers because at the time, we were aiming for the biggest quarter we'd ever had, and we crushed it. And I was like, all right, maybe I just need to not worry about October anymore and just focus on doing the work I know that we need to do to get there. And the numbers will take care of themselves.

[B]

Now, what's the likelihood next October, you're going to have to refer to said journal.

[A]

And a hundred percent, it might even start in September.

[B]

Right, but 100%, these are fantastic tenants to try to live by.

[A]

Yeah, but that's it, guys. Brain is great, but don't be afraid to intentionally develop your gut and your instincts, because I do think that plays a part in this. At the least, to give you conviction over what you should be doing in your business.

[B]

Yes, your brain, your gut, but use your brain. Don't just trust all the numbers and get history. Nobody remembers the history. But I like your Gut Driven Brain. Is that the name of the show?

[A]

Yeah, Gut Driven Brands. And let me also acknowledge, since Sarah's gone, since I've been using my brain in marketing, shit's going way better, too. Okay, so let's not throw out the rest of this podcast. We've been working together, whatever, two and a half, three years now, and, yeah, going way better than it was going before that. Do we want to talk nice about Sarah for a minute?

[B]

Okay. You. You did pretty much the entire thing.

[A]

All right, good.

[B]

I mean, if you're listening, she's a badass. I mean, do just, you know, she's Sarah Levinger is. You know what the problem with everybody who listens to this podcast is? And I don't know if this is going to stay in or stay out. Do what she says to do.

[A]

Yeah, guys, just do it like nobody.

[B]

I mean, Half the people, they like the. Whatever.

[A]

Just. Just actually do it.

[B]

She's written a prescription, Nate. You are living, breathing proof.

[A]

Yeah.

[B]

You just do what she says to do, right?

[A]

Yeah, yeah, I, like, we actually. I just helped her film, like, a case study thing. For what the work she's done for us. And she, like, asked me to prep some numbers for it, and, like, the biggest piece of evidence I can give to, like, hey, why this works? I bought a farm this year. Like. Like, guys, I'm making way more money than I made two years ago. Like, not to be flex or, like, to be weird or anything, but, like, God, life is so much better because we're selling more watches, and we're selling more watches because we really understand why people want to buy them. And we're using content that, you know, Sarah created by pulling research from our customers. Like, it's not that complicated. I understand it sounds often theoretical and sounds kind of abstract, but, like, let me give it to you as concrete as possible. Work with Sarah. Make more money. Buy nicer whiskey, buy a farm and be happier.

[B]

Have a great day.

[A]

That's our out right there.

[B]

The Brain Driven Brands podcast is part of the Learn and Laugh series on the Quickfire Podcast Network.