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Ep 583: Counter Intuitive Ways to Maximize Net Present Value from Your Email List with Jordan Gordon
00:19:02
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- [00:00]
A
Every time you send non performance emails, performance goes down. It's always a challenge to get people to stick to pure content and engagement emails for a long period of time. Now here's the thing. When you stick to them, if you do tools and then you've got every week you do an email that's you in front of the router, you in front of the skill saw, it'll sell something too. But it's not about pushing products, about pushing the craft. If you ran that once a week or on a regular basis, the click through rate of all of your emails would go up. Because you're building a habit getting someone to open your emails and because you're getting more engagement, your list size will grow. If you have a company with flat revenue but a larger list, that would be value.
- [00:50]
B
This episode is brought to you by Contentful marketers. You know that feeling when your creative clicks, when that social post sends engagement through the roof, when your outside of the box campaign hits ROI positive, when a personalized homepage turns prospects into customers. It's utter marketing bliss. Contentful helps you create tailored omnichannel experiences without working overtime. No stress, no limits, only possibilities. Get the feels at contentful. Com. It's all killer. No filler. Today we're just gonna talk about politics. Just kidding. We don't talk about politics on the DTC podcast. But I do have Jordan Gordon returning. What's your title now, Jordan?
- [01:29]
A
Head of Email Retention and CRO.
- [01:31]
B
And CRO. You had CRO tacked onto your purview. You are the host of the world's best email and retention podcast and now you're also why did that happen? I'm just curious. From from an organizational standpoint, why did CRO come in with retention?
- [01:43]
A
Great question. I have kind of a philosophy and approach to E commerce which anybody can figure out if they regularly listen to the world's best email retention podcast. And it's centered around low cost revenue and bottom of funnel and how bottom of funnel should interact with with the business to make advertising work better. If I could say, any one thing that our teams do at Pilothouse is they make advertising work better by driving low cost revenue. You know, by not chasing the same dollar driving revenue from customers that that aren't already in your ads. Funnel drives up your shopify revenue without driving up your ads cost, improves your marketing expense ratios and unlocks more money so you can grow your business. You can grow your business more. But more importantly, you can out compete the guy next to you who's trying to bid on the same terms, on the same ad space. Right. So email and CRO together at the bottom of the funnel. Email and website together. I mean an email is an HTML page. So we see email as. It's just part of your website. It's an extension of your website that loads inside of someone's most personal digital space. Their, their, their email account. Yeah. And so putting them together from that perspective makes sense. And just making that like just this core engine that just drives revenue and once that thing's working and you also, you know, have a, have a great strategy for how to grow your business. Come to Pilot House if you want to build that kind of strategy. Once you have those two things together, then you can start advertising and grow with success.
- [03:11]
B
The topic that you selected today was actually a term I hadn't heard before. I think it's pretty common business term. Net present value. What does it mean and why are we talking about it today?
- [03:20]
A
Yeah, it's, it was a bit of a loose use of that term. It's more like the value of your business which would be put together off. Off net present value terms. But there are, there are other ways that, that you, that you value your v. Business. And I had this really engaging conversation even 25 years into my career. I just have all kinds of cool aha moments every day. Right. Especially here at Pilothouse. I just work, working with so many brands and, and getting so many different perspectives and so how would you increase the value of your business? I'll just ask you. Pop quiz, right? How would you increase the value of your business on this, on flat revenue, what would it take to increase the value of your business? Even if revenue was exactly the same.
- [04:04]
B
You'D have to pay less for the revenue. You'd have to get your cost to acquire that revenue down.
- [04:11]
A
Very good. And that's, that's, that's kind of what we just, what we just discussed. So certainly nail that one to be more general. You'd have to have, if you had better supporting non revenue metrics. Right. If, if the business looked better on other measures than just revenue, your business would be more valuable and people would pay more for your business. Right.
- [04:31]
B
If it's more reliable, if it's gonna come from something that you own versus something that you have to outlay.
- [04:37]
A
Yeah, all kinds. I mean all those reasons, right? So listen to this. Let's say you had email. We manage email, we manage website. So from that perspective, hey, you know what, you've got Klaviyo. You've got, you've got A really good running email program. Now you've been listening to the world' email retention podcast and you've implemented all the best tips and tricks. And you also have a website, of course. So how this is. Let's talk about how we might refactor how those two things play together to increase the value of your business. Many email programs, they just react at the top of the funnel. Someone comes to the top of the funnel, they hit the site, they bounce and it says, hey, you forgot something in your cart. It's just trying to squeeze as much as it can out of stuff that's already coming through. Chasing the same dollar. One way to improve your email audience is to send better content, right? Like send emails that are at least a portion of your emails that are focused on helping your audience become the better person they want to be. The problem that people have with this, see it every time when you start doing it is every time you send non performance emails, performance goes down. It's always a trial and a challenge to get people to stick to pure content and engagement. Basically engagement emails for a long period of time. Now here's the thing. When you stick to them, when you, if you, if you have, you do tools and then you've got like every week you do an email that's it's just like, you know, you in front of the router talking about routing you in front of the skill saw, right? And it's, you know, of course, hey, it'll sell something too. But it's not about pushing products, about pushing the craft. If you ran that once a week or a couple times a month or something like that on a regular basis, what would happen is the click through rate of all of your emails would go up. Because you're building a habit getting someone to open your emails. You're building a habit getting someone to engage. And because you're getting more engagement, more regular opens, your list size will grow. You'll get a larger list. Right? Now if you have a company with flat revenue but a larger list, like two, the exact same company, right? Selling the exact same stuff, but one has a larger email list, that would be value.
- [06:54]
B
Totally.
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A
Now here's the other.
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B
Or if one has a better engagement rate.
- [06:57]
A
Yes, absolutely. Yeah. So you've got this, you've got this list that's, it's, you got higher engagement, higher rates, right? And also it is larger because when you have, when you get first party targeting data, when someone opens and clicks, they stay in your list for longer, right? They're in the party for Longer. But as we just discussed, when you focus on these pure engagement emails, these non performance based emails, the sell through is worse. What you would then do, you would then go to your website, you're dropping people on your, you know, like a video of you, you in the router. You would then implement something like site funnels which we discussed in episode 66 by the way. Everybody go check out episode 66 in the world's best email or intention podcast where we go through site funnels. And actually I think episode 68 we analyze de vault. Eric was saying it's dewalt, right?
- [07:47]
B
Well, I live here, I think it's dewalt.
- [07:49]
A
Dewalt. Dewalt. It's hard for me to say dewalt. It looks like dewalt to me. Anyway, I look at dewalt's website and analyze it by site funnel. So a couple of awesome episodes. Everyone go check out episodes 66 and 68 now. So you would then implement site funnels that focus entirely on getting someone as fast as they can with as few clicks as possible from where they enter to putting some of their something in their cart, right? And we talk about five funnels. But you know, to not go into the whole, not redo the whole episode, it's like, okay, well then take your site and get your site focused on a cart ad. Like your sole focus in that site is get that cart ad, right? From a variety of different. You'd want to have an aware landing page, an unaware landing page and the homepage. So a page where you send traffic that is unaware of you, a page where you send traffic that is aware of you for ads and the homepage, and the homepage has aware and unaware traffic. Now here's the thing. So if you do this, what's going to happen is you're going to have this list that is not performing as well, but is larger and you're going to be sending it and you're going to make up for that gap in performance by sending someone to a site that has like I say, lower performance from, from this very large traffic source. You know, your email should be a big source of your traffic if you're a successful E commerce company. But higher cart ad rate from that email traffic, right? And through that also higher, higher cart ad rate to your whole business. So if we think about this, this idea, it's like make your focus your email, refocus your email program on engagement and a higher level of engagement and drive people to a site. You refocus the site on fastest path to cart ad. And what you're going to have is even if you end up on flat revenue, doing this because you, you lost a bit of revenue because you're a little less performance y but you got some revenue, you got it back because you got your higher cart ad rate. You're going to have, if you had flat revenue, you'd have a bigger, more engaged list and a higher cart ad rate and your, your business would be more valuable just on flat revenue without even increasing your revenue. Someone would pay more for your business. And so comments and questions and comments on that.
- [10:11]
B
I think it makes sense. And it's also a platform for you to make more money in the future. It may be flat revenue now, but if you are making these choices and improving things strategically like this, you are creating a platform for more revenue growth in the future.
- [10:23]
A
So once your list is larger, what do you start doing? You start promoting to that list, right? You know, once you fatten up that list, there is a financial value to a large and growing list. That's what we're just discussing right now. Someone looks at that and goes, oh, that's a big list. Oh, you've got a, you've got a way bigger list than this other guy. Your business is worth more because the businesses are valued on comps. Once you get that large and large and growing list, of course you're going to promote to it, right? And so an important point here is for people to understand the massive light at the end of the tunnel for starting to, starting to engage with your list. Have a large and growing list of people who are engaged and engage with more of your emails as habit and offsetting that with a higher performing website. This is the work you'd want to do so that six months down the line you have a larger list to promote to. Right? You have a better performing website. And yes, you want, through all this, you want your revenue to go up. But the important point is even if the revenue doesn't go up, just having these, these two channels optimized for what they're supposed to do in a complimentary way, your business is worth more.
- [11:34]
B
It's interesting. I met a guy at Ecom north. Maybe I'll intro you. I don't know if it would make sense for a podcast. But he has a model, it's lead gen for E Comm, essentially where his whole thing is about creating complimentary newsletters for brands, which is funny, which is literally exactly what D2C and Pilot House did way back in the day. He has this method essentially of getting. Peaking someone's interest about the topic. So de vault. Exactly like you said, Dewalt. As I will say, even though I'm German as well, it would. You'd send, you know, home improvement things. You'd send content about using the tools for home improvement kind of thing as opposed to just always asking for sales. This guy's apparently doing quite, quite well building up this audience, cultivating high engagement and then as you say, harvesting or going in and in subtle ways switching the tone, you know, to a sales version. What have been these best engagement, the best strategies for these engagement emails that you've seen?
- [12:30]
A
Great question. Ultimately, every brand has one of these. I've been on here and I've talked about recipes for cooking brands and you know, diy, you know, videos for. For tool brands. The important point is whatever for, for. For makeup, of course it's going to be makeup ideas. The important thing to think about is that every brand has one of these. You're listening to this, your brand. There is something tangential to what you sell that people would be interested because it's going to make them the better person they want to be. Whether it's a better rock climber, a better stock trader, whatever it is. And you want to, you want to. And also it should be obvious, you know, like it should be super obvious. Rock climbing company. Yeah, Videos about, you know, bouldering videos, right?
- [13:22]
B
Hey, look at here's chafe.
- [13:24]
A
Yes. Yeah, it should be obvious. And you, you, you pick the thing and you just pick the schedule and you nail it and what you want. This is the, this is the gold standard is on Thursday. People are, they can't wait for that email. Oh, I know every Thursday I know there's like a bouldering tip, right? And of course, what are you selling? You're selling like climbing shoes. Right? But there's that bouldering tip. Different. Different grip or whatever, right?
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B
Yeah. Do you want these highly produced or do you want them closer to plain text and like just regular email communications?
- [13:58]
A
I mean generally speaking, engaging content would be, would be more produced. But I wouldn't make that a rule. Like, I mean, test it. Yeah, yeah, totally. Maybe it was like this interesting kind of note from the found. I mean just to play with this idea, it's like, you know, hey, I'm the founder of this climbing shoe company and you know, it's almost like a little, like a little note. Hey, you know, we're here in whatever Vantage in. In. In. Obviously I've climbed. We're here in Vantage in Washington and I Tried this thing and you just kind of talk about it, maybe even have a little picture. Right. And the fact that it was like from the founder talking about his climb and the thing that he tried on this well known route and then you can talk about the route and someone can click through and go to, you know, route finder. And again that's where it starts to perform. Oh, it goes to this route finder thing and I can see where that route is. Right. It's actually driving traffic in another direction. Purely for engagement. That could totally outperform a slick video because people are. Because it's so authentic. And part of the whole thing with AI Swap now is that authenticity. There's this huge. So answer your question. I don't know, you'd want to just play around with it. But if you picked that and you tried different formats, you would find the one that works. And what you want is when the engagement on that email goes up and you stick with it, the engagement on the other emails will magically go up.
- [15:23]
B
Well, everyone needs a little magic in this day and age. Yeah, I feel like. So let's, let's just leave this one there. Nice, short, sweet, all killer, no filler. Think about. Yeah. What are your closing words on this one for our listener base?
- [15:37]
A
Closing comment is like there's obviously email and website are two different things. They're trying to achieve two different things. Email is trying to grow and maintain your audience, which means you shouldn't be super promotional. Right. Websites are trying to convert traffic. So you should probably be pretty promotional on your website. Right. They hate your site. Try to sell them something. I mean, we again go and check out that episode 66 where we talk about most websites, their page with the most traffic is home. And it's also like ignored by lots of people. I audit all the time. And someone like you haven't really done much with your homepage, have you? Oh yeah, we're driving traffic here. Yeah, but you've got so many page views from people who find you. You've got aware and unaware traffic. So if we go to our email channel and we say we're going to focus this on engagement and maybe drive a bit less performance, but grow the list if you go to the website. Okay. We're going to land people on engaging places, but we're really, really, really going to focus on funnels and conversion rate on this site. Those two, they now are doing different things that complement each other, right?
- [16:42]
B
Yes.
- [16:43]
A
One is going to grow the audience. Little less performance. One is going to perform better with the audience that it has. And that's how you want to think. You don't want to just think 20% off to 20% off. Hey, 20% off. Go to, go to page 20% off. That is just, it's flat and you're not developing your business. And you're also not really appealing to the people who are in your sphere.
- [17:08]
B
I think that's smart. Everyone's like, it's a flywheel. When you create that kind of proper strategic motion between the two, you create a bit of a flywheel.
- [17:15]
A
And by the way, everybody else out in audience land, I don't see a whole lot of this, like I do lots of audits. Like it's, it's growing businesses. And here's the deal, you're growing, you are sprinting as fast as you can. Like, oh, we just got product, we just moved production to a different country. Hey, we hit this many units so we can get, you know, and you're just like chasing after that. And then there's your audience. And very often I see that, that audience. There's no real strategy for how, how am I going to speak to someone over three years? And that's the question, how am I going to speak to someone over three years? And then on website it's also like, well, I assume they'll just poke around the website until they find something they like, which is a great way to have a below average conversion rate.
- [17:56]
B
Jordan, thanks for coming on the podcast. If you're not already, you've got to go listen to the world's best email and retention podcast as always. Also, if you want to come work with PIL Pilot House, just come talk with me or Jordan and we'll, we'll hook you up. We're just doing. We haven't even announced this. This is going to probably come out after, but we're just doing our very first D2C Dines event in Vancouver. We're kind of keeping it hush hush for now, but we've got 24amazing brands coming out to join us. We'll have to get you to a future one, Jordan. I don't know if we're going to do one in Port Alberni, but you never know.
- [18:26]
A
There's a couple good breweries out here. They might.
- [18:29]
B
Nice.
- [18:30]
A
Great talking to you.
- [18:37]
B
Thanks for listening to today's episode. If you're not getting the D2C newsletter, you can subscribe for free at directtoconsumer.co. and if you want to learn more about Pilothouse's all killer, no filler Services. Take off to Pilothouse co. I'm Eric Dick and this has been the D2C podcast. We'll see you next time.