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- [00:00]
A
All right, we are back with another episode of Marketing Operators. We could talk soccer quickly. Connor's got the cool hat on. It sounds like a number of us have made it to a World cup game this year. Which one did you make it to, Connor?
- [00:13]
B
We were at the USA Turkey game last Thursday, and probably the most electric sporting event I've ever been to. Just, like, a crazy energy that I think only comes from an event that happens once every four years and that the USA host. I mean, what. It was in, like, 1992 or 94, I think, the last time they hosted the World Cup. So that all that together was pretty. Pretty wild. And then that was my first time at SoFi, and that place is like. I felt like I was in a. Like, a alien spaceship or something. It's, like, just so, like, futuristic and, like, concrete. That, like, whole scoreboard they have going around the. The center of the fields. Insane. So it was a pretty cool experience. And hoping they can bring home the round of 32 win tonight.
- [00:55]
C
Dude, let's go.
- [00:56]
A
Yeah. SOFI is awesome. Are either of you guys soccer fans outside of the World Cup?
- [01:01]
B
Not yet, but I. Dude, I'm turning into one. Like, I. I could see myself becoming a soccer fan after this. Kind of the same way I became, like, a little bit into tennis when they rolled out that. That Netflix doc.
- [01:13]
C
Yeah, totally.
- [01:15]
A
You know, I will say, I've got my qualms with soccer. I'm gonna take. I'm gonna. I'm gonna take, like, the. The curmudgeon view here. Soccer, great sport. I get it at its best. Extremely entertaining. What I think is funny is, like, there's so much not happening all the time. Like, people are going to hate this take. There's so much not happening all the time. Except every single moment can be so important, so you can't look away for 90 minutes. Like, I stood up last night. I had the Ecuador Mexico game on, and I just had to throw something away in the trash. I'm like, all right, I'm good for, you know, 30 seconds or whatever. Missed a goal, and it's like. And there's only. There might not be more than one in a game. There might not be one at all. So I think that's an issue. And then we're in the knockout round now, so they're going to penalty kicks. And it's so ironic to me that penalty kicks are the exact opposite. Like, for all the. The space and time and suspense and, like, the uncertainty that you get from the normal 90 minutes of soccer penalty kicks, are the exact opposite. You know exactly when they're kicking, you know exactly that they may or may not score. You get perfect visibility. And what it reminded me of is it almost feels like the TikTok version of soccer. Like, it's like it's Brain Rod soccer is, is penalty kicks. Brain Rod Soccer. And, and that's my favorite part. Now I'm like, dude, just, just let me just tune in for the penalty kicks at the end of the game. It's 15 minutes. It's high energy, it's high stakes. I know exactly what's happening. So that's my take on soccer. I'm, I'm, I'm anti regulation pro penalty kicks.
- [02:48]
B
Fair enough. Dude. The, the penalty kicks are so exciting though. Like, it swings so far in the other direction. You know what, you know what else is great about soccer? The games take like two hours. Like, I was shocked at, I was shocked at how short those games are. Like literally from first to last whistle, two hours. You know, it's not like a baseball game where you're sitting there forever. Even like really any professional sport, it's like, you know, usually three hour games. So I really appreciate that. About 2:45 minute half with the extra time. Like you're, you're in, you're out, it's quick, it happens fast and, and you move on. Um, so that. I thought that was very interesting. I was not expecting that.
- [03:25]
A
Have you guys followed that? They, I, they introduced it, I guess in Qatar a couple years ago, but the water breaks. Because it was so hot in Qatar, they added in additional water break. So, so they keep the clock running, but like they stopped for everybody to hydrate and they added it to the games here, no matter what the temperature is. And a lot of people say it's just, just so that we can run more commercials. We just get an additional commercial break, which I think is hilarious. Great for advertisers.
- [03:52]
C
Yeah, I, I think that's what it is. No, I, I think that's what it is. There. There's been a lot of like, feedback on FIFA. Like, so in MetLife in New Jersey, they're telling people not to park here because they're using like essentially all the ground like the parking lots for like commercial things for like brand activations and stuff like that. So I think they're just. Yeah, I think they're just, you know, trying to, trying to milk it for all it's worth.
- [04:12]
A
Look, you know, we're hosting it and largely in the U.S. but let's make it the most capitalist World cup possible.
- [04:19]
C
Well, have you guys seen. I'm sure you have all of the content of, like, Europeans and. And, you know, non. Non Americans trying all of our food and ranch and they get. It's like. It's so wholesome. It's such great content.
- [04:30]
B
It's amazing. I saw the ranch video. It's like, what are you taking back with you from. To. From the US he goes, ranch dressing. I put it on everything. It's so good.
- [04:38]
C
There's like. There's like people from, like, there's Asian people trying barbecue in Texas for the first time. Just like taking a bite of a giant rib and just being like, I love America.
- [04:49]
B
That's something I noticed at the game. And I've kind of gotten this vibe. Like, we have. We have some partners with like, one screeners are out of home vendor and they're based out of Boston, and obviously Boston has a lot of. A lot of games being hosted there. And they're like, you know, I could see it going one of two ways. Either it's like super annoying or it's like great vibes. And everyone I've talked to said it's awesome and it's like great energy. And. And I noticed the same thing at the game. I went to like, the. Just the energy between the two different groups of fans was like, very, very. It was just good. There was no, like, you know, tension like that you might have at a football game. Like, everyone was getting along and it was just good vibes all around. It didn't really matter who won. So I think that's been cool to like. It seems like that's happening across the board. Like, it's been fun to have all these different people from around the world coming to the US and it's just like. Seems like everyone's really getting along, which we'll see if that remains true. And like the round of eight and the round of four and all that. But that's. That was cool to see and I really much. I very much noticed it at the. With the Turkish fans at the USA Turkey game.
- [05:47]
A
I wanted to start. You know, I feel like we've had this conversation on a developing basis over the last couple months. Cody, you had a great tweet about it, but she's like, meta performance over the last few months. Quick temperature check we could talk about. I've got some examples from. From inside of Ridge on how we've been identifying or addressing some of these things. But to take a quick step back. Brian Bumgarner at Northview, I think has done a fantastic job. Sort of like frankly, I think we've got. This is a bit of a tangent. Zane, our good friend Zane who runs a TikTok agency doing fantastic job, like doing a roundup of who's succeeding on TikTok shop. I feel like he's. I just had the thought this morning. He's writing the X post, he's doing the podcast with, with what's working Great podcast. He's deviated from the shitposts and he's like providing value and I'm supportive of that. I think it's really good.
- [06:38]
C
Oh, I thought you were going to say you're like disappointed in him for it.
- [06:41]
A
No, no, no, no. Well, you could go either way with it. Yeah, we all, we all miss the just super low tam posting for like the two dozen people on, on DTC Twitter. But no, he's doing a great job. Brian Bumgarner similarly, I feel like people are just doing a fantastic job of putting out content that's valuable. I say all that because Brian posted a X article and again he's got access to like thousands of Northview accounts, big data set laying out trends and he identified some interesting ones that I wasn't quite sure what to make of. What I've heard anecdotally from a number of brands at this point is Meta. Meta has really struggled with acquiring new customers to like maintain the performance that we've seen over the last couple months. What he laid out was basically a 12 month trend of increasing CPMs click through rates increasing even further than that. So dropping CPC is dropping conversion rates where if you look at it closely for a lot of that period, a one day click, a seven day click row is like maybe higher. But that the traffic and the way that we're driving it is fundamentally different year over year. And I think that is an extremely odd trend and it seems highly correlated with people saying that their businesses are struggling at least over the last couple of months. So Cody, you had a response to this tweet that got a lot of good engagement. Maybe you could just walk through like what the main points of that were and like what you know, drove you to finally chime in on the discussion Motion just dropped their 2026 creative benchmarks report and it's been getting shared Everywhere, Slack channels, LinkedIn, Twitter, sharing it in our private group chats. And it's great because everybody's been asking the same four questions forever. What is normal? How, how many ads should we actually be shipping? What is a healthy hit rate and which formats really win. The report analyzes over 575,000 creatives from 6,000 advertisers and over a billion dollars in ad spend to answer these exact questions. And the report has some really interesting findings, like the fact that only 4 to 8% of ads actually become winners and over half of ads actually lose. And for Motion customers, this report is especially helpful. You can upload it into your Motion dashboard with their runneth AI chat and compare it directly against your vertical benchmarks. Here the link in the show notes, I promise you won't regret it. And as always, go to motionapp.com and tell the marketing operator sent you.
- [09:01]
C
I'm always scared to do it because you say like, oh, this, you know, let's talk about this. It's struggling. And then you get like five people that are like, well I, I'm having the best performance I've ever had, you know, and, and it's like, all right, cool. There's on. So I think, I think there are, listen, there are brands that are doing really well. It seems like Ridge is, Ridge is crushing it right now. There's, you know, health seems like it's doing really, really well for the, for the majority. So it's always challenging to figure out what's macro, what's vertical meaning like is, it is, is beauty in a, in a beauty recession. But you know, maybe health is doing well because there's, you know, maybe some, some evidence there. And then also what's meta? Right, because that's, that's the majority of it. And yes, you can compare other channels to see like is meta hurting more than others. But I do think, and I'm hearing more of some of these issues now. Some of them are beauty, beauty brands like Oddity. So they're a public company. You know, usually one of the, they're actually like, usually one of the only really high performing, like D2C brands that have gone public. Usually they crush it, they're profitable, they've grown extremely fast. They're, you know, great advertisers. They're down like 30% year over year. And in their last two earnings reports they have, I don't wanna say blamed meta, but they have said we think that there's an algorithm bug or an algorithm change on our top spending ad channel, which is, which is obviously meta. And what they have shared, we haven't seen it as significant as them, but it's definitely been significant is they've seen bounce rates just skyrocket. So traffic quality just, you know, skyrocket. Right. Like, um, I don't know if they said anything about like cost of traffic and things like that, but it just is a very similar thing. So what we are seeing, again, I used to talk about how we, we've had such a hard time reaching new audiences and things like that. It's, it's been easy and part of it is we've optimized for that. We've done things like IA and change exclusions, whatever. But I also think that Meta has, this is just my, this is my tinfoil hat conspiracy theory. I think that there's multiple factors here, but I think that Meta has pushed really hard into trying to help brands reach new audiences both on acquisition and then on, you know, incremental reach. And there's probably, this is like, again, I don't really understand how the algorithms work, but there's like from a technical level there's probably some trade off between intent and, you know, or intent and reach. Maybe it's exploration and exploitation where, you know, the feedback last year was like, meta is great at intent, but it just goes out to the same people. I don't know what you guys are seeing. We used to see north beam new visit rates 40. I know, I know ours have always been worse, but 40s, 50s, stuff like that. Now like we're easily 70s, 80s, like significant difference. And in the past, prior to maybe a few months back, we always had a really positive correlation between improving reach and improving ad account performance, improving business health, improving incrementality, like validated with all of those for the first time. Now several, several months back, we are, we're able to get new reach, we're able to improve new visit rate and the traffic quality is just so much poorer than it was. So I think Meta's heart was in the right place. I know that they've tested a lot. I don't know that it has all been successful. There's probably other factors, but that's at least one, one of the factors and one of the big things that I'm seeing.
- [12:28]
A
Are you guys seeing what Brian laid out with the increasing click through rate like click through rate at 12 month highs. And again he's looking at like an aggregate of a thousand advertisers click through rate at 12 month all time highs. Which is not how click through rate should work. Right? Like that's, we shouldn't be talking about trends in click through rate and see it like dramatically shift just every month increase over over a year long period. But are you guys seeing that trend, the increase in click through rate and Then the decrease in conversion rate, we're
- [12:56]
C
definitely seeing decrease in conversion rate. We're definitely seeing traffic quality. So probably, I mean I don't think CPMs are down, like frequency is lower so I'd have to pull that up. But I would say, I would say probably, yeah. And then some interesting shifts of platforms and stuff. Like we're definitely driving more to, more to reels, more to Instagram. Like I think we're driving spend to places that are doing a good job reaching people.
- [13:22]
B
But.
- [13:23]
C
But maybe not the, you know, quality. We've had some audience network spikes that we've tried to, you know, get away from.
- [13:27]
A
But there's like factors external to meta macro factors, people not wanting to spend more money than they used to, that's going to affect advertiser performance. The trends in click through rate, the trends in CPM I find a bit suspicious in like a meta exclusive way. Like the platform itself seems to be behaving different and that's particularly true with like some of the placement type stuff. And that's what, when I've talked to brands it's like the first thing you want to be sort of doing some sort of diagnostic check on is like make sure you're not spending a ton of money on audience network. That doesn't make any sense if you never done that in the past. But even, even dollars being shifted into reels and Facebook stories and things. It's like, oh yeah, that, that is something that you should be suspicious of in my opinion. It's exactly how we do sort of analyses internally at ridges. Like if from a high level perspective, if performance is getting worse, let's look at what has shifted in that same time period. And then more often than not it's like some sort of. We'll often see demographic shifts. All of a sudden we'll start bidding on men more than women or more reels than feed. And like all of those things I think are a little bit odd. And at least we've been trying internally to sort of counteract as much as we can.
- [14:38]
C
Yeah. So I have the data for you. Pull it up with, with Claude while we're talking about. Click through is up 20% year over year.
- [14:43]
A
Yeah.
- [14:44]
C
And I don't think our ads are any better. CPMs are down 30%.
- [14:51]
B
Like down.
- [14:52]
C
Yeah. And granted there's some shifts like we are. I think we were too heavy on VO before, now we're not heavy enough on it. But still it's. Yeah, it's. Everything points to is just much lower quality audiences that we're reaching.
- [15:05]
A
Okay, so do you want to hear my tinfoil hat theory? And then I actually, I want to ask Claire about how maybe he'd recommend brands diagnose some of these issues. But my tinfoil hat is met is obviously trying to best optimize their ad platform to drive performance so they can get more ad dollars from advertisers. When I hear things like oh yeah, click through rate is up 20% year over year, 30% year over year, that at the platform level they seem to be prioritizing clicks, it feels to me that they say hey, more and more advertisers, especially large ones, are optimizing towards click based outcomes. And you look at like in Applovin who drives an insane amount of clicks for every impression that they say hey, our performance will look better if we can drive more clicks and therefore they can push it into placements where they drive more clicks. And that's why like, like another way to think about this. And I don't have this data pulled up but like anybody could pull up. It'd be relatively simple. If you get a, let's call it a 1x1 day click ROAS and you drove a hundred clicks, like you'll see some sort of latent revenue get attributed to those ads. If you can drive and that'll happen over a 7 day or 30 day, however you want to do it, you'll, but you'll see a lift between one day and whatever like longer period of time you want to be comparing it to typically and we've seen this across basically all ad channels. If you drive more clicks you can see a larger increase over time. If I drive a one day click rose but I drove 400 clicks, there's simply more people that clicked and if they can convert then on a longer period of time I can see a larger lift between that one day and seven day period. And if advertisers are increasingly making budget decisions based on data like that, I as an ad platform and now am, am now incentivized to be driving more clicks. And that's part of my tinfoil hat is like they may be trying to, you know, reshape the way their, their platform works and like the, the outcomes that they're trying to drive. And even when I say outcomes, I mean the softer outcomes, the impressions, the CTRs, the clicks to site, moving away from shops, things like that let me reshape how my platform works. So it actually will look best in whatever lens that advertisers are looking at it through. That's My that's my quick tinfoil hat is they may be thinking about it from that perspective. Some engineering, you know VP on the meta team is thinking that that will be the most advantageous for winning over more ad dollars. That's my quick as my as my I'll take the tinfoil hat off now.
- [17:45]
C
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- [18:50]
A
know, problem and I'd also say they probably have like a hundred different objectives at any given time like all the different people working on all the different parts of the ad platform. So I think also many of these things can be true. Connor, let me get a bit of consulting from you here. Ridges identified like a meta specific issue. We think we have a meta specific issue. Do you have any at hexcloud? How do you, how do you guys dive in around like diagnosing the issue and what steps might you take to try to improve performance?
- [19:19]
B
We're seeing the same trends as well. Like our CTR is up, our CPMs and I'm just looking at the month of June. So CTR is up, CVR is way down. Like we're seeing like a 50 drop in CVR. CTR is double in the month of June is where it was last year. CPMs are up like 20. So we're basically seeing all the exact same trends that that you Guys are calling out which, which I think's go just quickly going back to your, your tinfoil take here like because it's, it's only a matter of time now until advertisers are going to start saying, oh, Meta, Meta traffic sucks, right? CVR is down, way down on Meta. So now what is, what, what happens then? Does that mean all the, that same VP of product at Meta is now going to say, hey, we need to go swing back the other way and we actually need to drive less clicks, but more high intent clicks. And now we're like swinging back towards more of like the high intent audiences that. And now the lower net new visit, right. Like I, it's just like this pendulum that, that keeps on swinging back and forth, back and forth. And I think for us it's, it's hard. Like there's so much nuance year on year. Like we are spending up a big amount on Meta in June and year to date really we're spending up a quite a, quite a good bit more. But so much is different in June than June last year, right? Like prime day was in June, we ran a little bit longer summer sale in June. So like it's hard to say, all things being equal, how much revenue decrease we would have seen. Like we saw one day click row as basically flat year over year in June. But, but I'm assuming it would have been way down if we didn't have all the offer moments happening in June that were not existing in June last year. I think for us the tricky part is like going, going back to your point of like one day click versus seven day click in growth there. Like we're thinking about this on a much longer time horizon. You know, I'm, I'm happy with the traffic that Met is driving and the new users that met is driving. But it's hard to tell like is this high quality intent traffic that's new to our brand, that's going to convert in 6 months or in 9 months or 12 months? Or is Meta truly driving just low intent traffic to our site? Like we use things like you know, server side analytics tools to help gauge this. Like what's our like product view rate growth, what's our add to cart rate growth? And then we can like filter that by UTM source as well to like kind of back into whether or not this, this traffic is high quality or is Meta driving, you know, 50% higher, higher traffic year on year. But the product view rates flat or the add to cart rates flat. Like to me that's A good signal that this traffic is not great overall. I don't, I couldn't speak to like what meta's at specifically right now. But like overall we are seeing growth in, in our like product view rate and our add to cart rate and all those, you know, downstream metrics. So I'm feeling like somewhat confident in the quality of this traffic. But to your point, like what do you, what do you do? Like I don't know, do you do, do you diversify away from meta? Like maybe, maybe that's the solution here. But I don't know about you guys but like we're seeing CPMs up across the board. Like in June our Google CPMs were up like a hundred percent. YouTube was the only one that was down. But like Amazon was up, Applovin was up, Meta was up, Google was up the biggest. So it's not like, it's not like meta's in a silo here where the competition is only growing in meta, but it's not growing elsewhere, at least for us, it is growing elsewhere. I mean I think there are some levers you can pull like going back, like we know what, what targets a more middle bottom of funnel, right? It's like static images, product focused stuff. So maybe you start like leaning more into that and like specifically force Meta into sending more ads to people that have already visited your website. That should be a way to combat some of like the, the lower quality traffic. I think we already talked about like the audience network stuff. I think most brands are seeing that that's driving low quality traffic. So I think there's some like manual placements that can be done, but to an extent, like how, how much can you really offset the back end changes that MET is making? Like you can, but you can't fully offset it. So I think it's, I think those are some of the levers you can pull. You know, maybe you're introducing more doctor Offers to try to convert some of that traffic earlier and like pull some of that revenue forward. And I know that's something that we're starting to think more about, like do we roll out a little bit more like easier to entry, easier entry point offers in our funnel and that's another lever brands can pull. But I know that kind of goes against some brand rules that people have. So I think there's a variety of things you can do. But the question is like how much can you truly offset the back end changes that MET is making? No one really knows.
- [23:49]
A
Yeah, I totally agree with that and I do think when it comes to people addressing these issues, doing things like testing new offers, launching new sales, kind of loosening the reins on some of those constraints you might have had previously. Makes sense. I just talked with my team because I do think I, I, I typically don't think we don't typically deviate from our like a media buying strategy. Like we have a methodology, we're using these attribution settings, we set up our campaigns this way, we do this level of targeting like and we're more or less locked in on that year round and we're making maybe slowly incremental changes that we're testing into. For us we were seeing these declines in this very similar to the numbers that you guys are actually closer to Cody's. We're seeing a decrease decrease in rows, decrease in cpm, increase in ctr. Just fundamentally different traffic in the EU and the uk. And my ask to the team was there are a number of external factors that help explain worse performance year over year. We've got, we didn't have as strong of product launches year over year. We're just coming off the sale all the points that you mentioned. But I do think we should put ourselves in the headspace of what media buying specific changes can we make to try to readdress performance because it does feel like an opportunity and for us that's like make sure you're doing the placement exclusions I think is super key Audience network is a no brainer. We're doing bid decreases on like reels and stories. I don't know the exact like technical changes there that we can make but you can decrease bid by placement and we've continued to found to find that reels and stories are not necessarily increment more incremental. We shouldn't have a lower ROAS target for some of these like short form vertical video placements versus feed. So if we can start adjusting our bids a little bit more granularly there and pushing spend into feed like I think those are the small changes that might help just triage some of the issues that we're facing. So at least that's been our approach. So that's what I got on. I think that's a good solid meta segment if you guys want to move on. Unless there's any other points on that.
- [25:45]
C
I got one too things to say but yeah, I think bid multipliers value rules like that's really smart because we're definitely seeing shifts there. Like again I used to think that those were more incremental when we needed to improve reach that, like, all right, let's, you know, let's, let's push to reels a little bit and we'll be okay with that. And I think it made sense at the time and now it's like we're seeing less Facebook delivery, right. In general, more Instagram delivery in these different places. And yeah, I think bid multipliers or value rules are a really good way to do that. One other very big, not, not a big adjustment, but a big impact that my team made is we switch our exclusions and just excluded less. We, as we were chasing reach and found some tests, we, we added a lot more exclusions and we pulled them back. Significantly better performance. Like, much better. So what are, what are you guys doing for exclusions currently?
- [26:37]
A
Yeah, I was talking about excluding things like audience network placement and just being more aggressive there.
- [26:43]
C
We exclude site traffic. Do you just do customers?
- [26:46]
A
We do. We. So I mean, we do a mix. We have like our, our. The campaigns that we view as being more top of funnel. We're excluding all engagers and site traffic. So let's just like be as aggressive as possible and then we'll run like 40% of the account with slight, slightly less exclusions error. And at least recently we haven't changed that approach. But that's the exact sort of thing that I would try, I'd be trying right now when I feel the platform itself, the meta platform itself is behaving differently is like I'd begin sort of toggling some of those, those, you know, levers.
- [27:17]
B
Yeah, I need to, I would need to go back in and see what we're doing for exclusions right now. I think it's probably a mix of things, but yeah, I need to, I would have to go back in and look at some of our top spending ad sets here.
- [27:29]
C
Yeah, like post. Post iOS really. We were like not excluding any site traffic, you know, visitors and it was just customer exclusions and obviously like playing around with different ones, whether it's like waste not or different meta stuff. But we started adding in, you know, site exclusions and, you know, different. I forget the windows, but, but got a lot stricter on exclusions. And we saw the audience breakdowns of your spend. We saw those get a lot better and we had a lot more prospecting spend and in the past that always was correlated with success. But I think maybe because of this other things, it kind of did too much. So as soon as we changed them back. And so we still are excluding site visitors. I think we're still excluding, but just Like a much narrower period, much better performance. So now I think we should rethink it. Test no site exclusions at all. I still think we want the full customer exclusions but definitely like with how much is changing. My always biggest learning is like you just can't take anything for granted really. And you kind of, yes. You want to like lock in on the big levers. Right. But also like something like that. That had a really big impact actually.
- [28:35]
A
I totally agree. I totally agree.
- [28:37]
B
Yeah, we're mainly just excluding our purchase list now. Um, I'm like looking at a lot of our top spending ad sets and it's primarily like yeah, pixel purchasers, Klaviyo list, Shopify exports and, and keeping website visitors and engagers out of there. Cause we don't want to, we don't want to avoid those people too much.
- [28:58]
C
Yeah, makes sense. Makes sense. I think that's the next step to try
- [29:02]
A
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- [29:52]
B
Okay, so I wanted to ask, I wanted to ask Connor about, about one of their new categories they launched. We've talked a lot about ridges like wallet expansion strategy and how you guys are. You've built like just an amazing system to churn out so many new wallet patterns like monthly, weekly, whatever. I mean it feels like you guys are launching new ones every single week. And then we've also talked a lot about how you've actually run holdout tests on ads promoting those wallets and you have validated that those do drive incrementality. You're reaching new audiences even if they're not necessarily buying that. That colorway. Right. Some people are, of course. But you're also finding that you launched this new colorway, this new design and ads and it's reaching a new audience. And then they're coming into the website, the funnel and they're buying your like hero three colors. But you're also doing a lot of chant of category expansion which, which has been really fun to watch with the new one being chains. So I just want to like give me the, give me the run through on, on everything. Like what? Let's just start with like the why. Like what, what kind of were you seeing that made you want to expand into chains?
- [30:54]
C
Totally cool.
- [30:56]
A
I will say I've advocated for chains for a super long time, like probably two years where I'm like, I think we gotta try chains for a couple reasons. One is people purchase wallet. Like I'm trying to like root it back to like who our customer is or why people buy from us because not even who our customer is. It's like what are the attributes that people see in Ridge that might have some portability over to, over to other categories or other, you know, products. Chains was my thesis for chains was I think people are buying our wallets for like a fashion reason that historically like people typically haven't bought wallets. The average guy was getting largely gifted some random leather wallet that he'd used forever. He didn't think about it as any sort of statement piece. And now we're selling carbon fiber and forged ember and cool like titaniums and prints and colors. So I see that like behavioral change in how men are buying things. And if people are valuing, valuing us in any way as like a fashion brand or like a way to make a fashion statement, then like we could be exploring other categories where they do that. So that's like one piece of it. The second one is it was when I was living in Utah and I'd go to the gym and there's just like a bunch of dudes just wearing chains and you see it. I, I feel at least this is very anecdotal. I feel like I've been seeing it
- [32:09]
B
more and more
- [32:12]
A
in like, you know, I call it like flyover states. And I mean that in a very like loving, endearing way. But like the, the, the Utah's, the Montanas, the Ohio's, like these guys that are, you know, grittier, outdoor at the gym, blue collar, et cetera. I see them wearing chains more and more. My ex's dad was an electrician and wore like a, a cool like little chain that was just like a little style piece. I'm like, okay, that's like he's our guy and I see those guys wearing chains more than they used to. So I felt like it was a trend that we could play into. And then the last one is chains are just a fantastic DTC product. A lot of the same attributes of the wallet, cheap to ship, cheap to store, high aov, high margin. So I said like from that perspective, they're very similar to rings in that way. Rings, wallets, chains, all very similar economically. So that for me was like the pitch as to what we could do. I think there's reason to believe that people would purchase, purchase this sort of product from Ridge. The customer that we'd be appealing to I think is like a growing market and then three great economic product for, for DTC acquisition. So that's kind of how we, that was my pitch to the team. That's how we backed into it.
- [33:20]
B
Were you seeing any like a lot of that is anecdotal just from your experience and I think you've been in the game long enough where often that's probably all you need to take a swing. But what kind. Were you seeing any trends on, you know, Google search trends, you know, going into like a refs and like finding any, any positive trends and like the amount of search volume 4 chains, like was that, was that part of it or was it really primarily off of like all the things you just said?
- [33:49]
A
Yeah, no, that's a, that's a good question. Not like not Google trends, not a refs. This is similar to how we got into travel too where we looked at the travel category and we said, you know, you look at Monos, July Bays away, Those are all nine figure D2C travel brands. In the case of travel and luggage. Like we also said they're, they're maybe not targeting women but they're gender neutral at best. And we felt like there was white space in the category to be like a more men's oriented, outdoor, rugged, hardshell luggage brand. And, and the point being it's not Google trends, but it's like, hey, there are many big brands succeeding in this category right now. Chains doesn't have nearly as many like large doctor focused D2C brands, but if you look at a Jackson or a crafted, there are people who have built very solid D2C businesses in the chains category. So it's kind of proven out and that was like signal enough for us to sort of at least begin exploring it. And again, and this maybe comes down to like how do we think about category launches at Ridge? And I'll actually Say something super. Just semantics here. We don't think about this as a new category. It's really jewelry is the category and we have wedding bands and chains within that now. And it's the same way. Like, I've brought up this. I've brought this up a little bit, but we have everyday carry category and within that we have wallets. And then a growing piece of that is like our tracker card. So, like, we're beginning to move towards this future where we have multiple sort of hero products within a given category. So just semantics of how we think about it within the business.
- [35:28]
C
Yeah, I was going to ask. You said something or maybe kind of a question and that kind of answers it. But like you said, like, hey, one of the things that we will do is like, do we think we have the. Like, will people buy this from us? Like, not like, part of. Because part of your thought process is chain's even a good category to get into. But then also, how will they buy it from us? What's your thought process here? I think this one is like, you're having success with jewelry, so it seems like a next. A next bolt on. But like, how else do you think? Because I think that's one where like, founders, entrepreneurs, like, can get really confident and maybe think that. And it's like, how do you do it? Like, actually critically. So you're. You're actually like, sure that you have a really good chance or you have the credibility to play there.
- [36:08]
A
Totally, yeah. And it happens both ways because I think brands will say, you know, I hear this word a lot, like, we don't have permission from our customers to get into this new category. And it's like, oh, you're actually, like, being way too conservative about, like, what people will be willing to buy from you. Sean and I fight about this all the time. Sean ends. Ends up the. The CEO of Ridge ends up on the very other side of the spectrum where he says, we could launch absolutely anything. And I'm like, I just don't think we can launch soap. I'm like, I don't think people will buy soap from Ridge. And for chains, it just lands somewhere in the middle. I said earlier, like, this point around people buying wallets for. As a fashion statement. I think, like is one thing that leads me to believe chains might work. Bring up wedding bands, which is a great one. Aside from the fact that I do think our wedding band customer is significantly different than our chain customer. Like, I. We end up. We end up skewing, like a little bit older for wedding Bands and like maybe not as they're thinking about it more as like a utility item. Like I'm getting married, I need a ring. I want the, I want the never lost forever fit sort of warranty program that we have. I want the silicone attachment and the box. Like that's a utility play where they're not necessarily buying it because it's like the coolest ring or like they're necessarily going to look so much cooler. So I, and that's still a little bit TBD. Again we're like 45 days into the launch. We'll see what's crossover there is. I don't expect there to be much. The last thing that I'll say is I, I could still see it as being a point for why chains are, are worth trying. And then really a lot of what we've seen work to like at worst a middling degree is small metal items you carry with you every day. Wallets, knives, pens, rings. Like we just continue to find like hey, when we are operating in this space like there is enough demand, people are willing to purchase this product from us especially if we can come in at a, if we can land at the right spot in the market. And that's the, the other point that I had here was around like pricing and positioning. The other mistake that we've made in the past was with watches which I've talked about a number of times. This was I think 2020 to one of our first early product expansions. We have every, we have the permission to sell watches. Like people like buying small metal items that they carry every day from us. Like watches should work. We just came in at like a 400, $500 price point with the design that like didn't justify that. So like just making sure we like nail the, the price and the offer and like the sort of the merchandising component of it I think is really key. And that's where in the case of chains we just landed much closer to where the market is. We didn't think or we decided the market we want to be playing where a Jackson plays or a, or a crafted plays or even you know, we want to be playing in a similar part of the market that we do with wedding bands where you have like Ridge and manly bands at these like premium yet accessible prices. And we didn't come in and say hey, we're going to be, we're going to be David Yurman. We're going to sell $2,000 chains and like be this high end fashion brand. Like we Definitely. We definitely approached it from a pricing perspective that we've seen work well in the past.
- [39:16]
B
Very much, and correct me if I'm wrong here, but very much like your, like your new wallet designs and colorways are driving incremental customers. I think you said in the past that all your different categories are incremental for one another. It's like you're not seeing a ton of spillover between the categories. Like it feels like a wallet customer is a wallet customer, a ring customers are luggage, as a luggage and so on and so forth. So I know you're early in here, 45 days in, but are you seeing a similar trend on, on chains right now? Like is it primarily first time revenue coming in on this product or are you seeing a lot of repeat revenue from wallet buyers or luggage buyers or you know, insert any category, product, category, already selling?
- [39:58]
C
You know the difference between hitting your numbers and missing them. Clear signal on what's actually driving growth. It can get really, really noisy. There's so much noise. You got platform data, you got blended data. Mmm. All the acronyms, MTA experiments, all of it all pointing in different directions. The more you're spending, the faster you move, the more bad signal can cost you. That's why we use House and we've been using it for years. That's why the other marketing operators do as well. They're the best tool on planet earth for measuring what we call incrementality, which we talk a lot on the podcast. What is the true impact of your advertising dollars on your business? We have causal MMM for channel level budget calls, causal attribution down to the ad level And Architect, their AI agent tells you exactly where your next dollar should go. And the results speak for themselves. StockX saw a 41% lift in IROs using House. And you're not stuck with a help desk. You get an embedded measurement strategist who actually helps your team make better decisions. Their whole team is great. We've worked with a lot of them. They are world class error. Go to House IO operators, H A U S IO operators and start backing your budget calls with real causal data
- [41:07]
A
with the, the kind of the shape of the revenue that we see. And this is typically, I mean we don't have like a ton of examples of this but like this is the best sort of launch where the first like week or 10 days we saw 50, 60, 70% of revenue come from existing customers. Because you want to see that just makes our lives easier if like the customers we're acquiring elsewhere are going to be at some point interested in, in chains then we have this sort of like underlying base. What I will say by that is it's also definitely incremental. I don't know exactly how incremental, it's hard to say. But like our business is not built on repeat purchases. So it's not as if that chain purchase was cannibalizing someone's like second or third wallet order. So it can be returning customers and still be very incremental. And then the flip side of it is, is after that 7, 10 day period then all of a sudden we're scaling up ads. We have to be new customer oriented especially if this is going to be a, a scalable category for us. And this is what I'm saying like within the company this entire time where we're seven days in, we're hitting like some really solid revenue days. We're really excited about it. And I'm like hey, we should just pump the brakes a little bit because 60% of revenue is coming from returning customers. Like we have to prove this out much further as an acquisition product. And then we're, and then we see that split change and over the last 10 days it's 70% new customers and 30% returning. So that's kind of what, what, what we're looking for in the shape of revenue. I'd even say like I think something like wedding bands was like more immediately new customer revenue. So it's not to say like it has to look that way for a category to be successful but like those are sort of the, the trends in new and returning customer revenue of a new category that might indicate that it will be like a sustainable sort of tool for us.
- [42:55]
B
And then what like let's get into the fun stuff which is like channel go to market.
- [43:00]
C
Yeah. I was, I was curious your go to market for this, like how big you go with it.
- [43:03]
A
I don't know. So I, Connor, you texted me this morning, said you wanted to talk about this. So I was, I was thinking about it a little bit more because some of our go to market's like really not very sexy. Like this was um, we did a full video and photo shoot. This would be considered like a tier 2 launch for us. We did a video, we did a photo shoot. We activate across all the channels. Um, we, we have, we had multiple emails set up. We spent a lot of time on the performance creative front. Like let's, let's come into this with a number of different sort of concepts and angles and let's engage a number of creators. So we've got like a full toolbox of ad creative but like we're going to launch it on meta, we're going to launch it on YouTube. I guess one thing I'll add here because I've brought this up on the podcast before. We continue to see success in layering in like non doctor brand creative as a percentage of the budget, especially for these new launches. So like some of the, the go to market strategy was like We've got this 15 second cut that's like I said, literally the point of this ad is not to like sell you on the features and benefits of the ring or even why to buy the ring. I want the message to be Ridge now has rings and they look really sick and like that's it. We've got that in a 15 second cut and let's make sure we're layering that in in like really high value ad inventory like, like YouTube and keeping that as a part of the launch. So that was, that was part of it. We built out a capsule page on the site. It got like a second tier homepage treatment. So it didn't even have like a homepage takeover or anything like that. And that was basically our a go to market and the idea was let's see how this looks for the first 30 days and then we'll build into it further from there. And there's, we're at the point now we're waiting on inventory for the next couple weeks but we'll build out dedicated flows, dedicated pop ups. We'll make this less sort of an always on performance creative deliverable. So we're, we're including new ads and creatives but that's kind of it. And, and I say that's unsexy because that is like it's just redundancy. That's what we do across everything else just to a smaller degree. So we could test it and I don' know if in the future when we're doing these new hero launches if we shouldn't make it splashier, is it worth trying to engage larger creators at first and making it more of a brand moment rather than like hey, we're going to send a couple emails, start spending money on ads, sort of slowly build this up from a doctor perspective. But that is at least as of now how we do things at Ridge.
- [45:26]
B
How do the, how do the. So is it mainly meta or are you, are you running like YouTube ads? Is it like meta and then like search or what's the channel?
- [45:35]
A
Yeah, yeah, yeah. We get searched live Chains is not like a super high intent category. Like, wedding bands is our highest intent category. We're able to spend the largest percentage of our budget on Google search, mostly meta, YouTube. And then it depends on how it shifts over time. Like, we did see. And this is where I'm really. This is maybe another reason that it's worth trying is I think Chains could be a really great gifting product. We saw some of that over Father's Day, wasn't on sale. And honestly, it might not even be like a. We'll see Father's Day. We've got the holiday sale coming up. We'll have plenty of inventory for that. So then all of a sudden, that was a concept that we came into the launch with. This could be great for gifting. Then as we identify those concepts, it's like, okay, maybe we're spending more time on an Apple event or something like that. So depending on what signals we're seeing from a concept perspective, it'll then help dictate channel strategy. And those channel strategies are things that we have observed across our other ones. We know gifting works great for wallets on Apple during Father's Day, so we can sort of quickly follow that with Chains if we're seeing any sort of similar behavior.
- [46:37]
B
And are you seeing like, competitive North Beam reported return on ad spend with. With chains out of the gate or. Yeah, okay.
- [46:45]
A
Yeah, yeah, totally. And that's again, we're like, let's call this our fifth cat, like, quote unquote category. The ones that have worked have almost always, like, kind of worked off the bat. We don't have a great example. We launched some of our failed ones. Watches. Watches launched terribly. And it got better over time, but we never got it so good that like, we could actually scale it. And we tried like, T shirts briefly. Like, we did a bunch of weird stuff in, in 2022. And those things that, like, didn't see that early traction, like, we never really got it there. But that's also. I'll just say, like, our launch strategy is built for us to react that way. Like, it's not a huge inventory buy. Even if we, even if we didn't sell one chain, the, the, the dollars that we spent on the inventory is like kind of a drop in the bucket. There was no scenario where it's like, oh, my God, we have to go scramble all the jets and figure out how to like, build this big acquisition funnel to move through all this inventory. This was deliberately, like a very tempered launch.
- [47:51]
B
I saw Sean's tweet I don't know. Three weeks ago, four weeks ago about growth via new products. I mean, it's not rocket science that launching new products can really help brands grow. I think it's something that we're not doing a good enough job of that. We're really, we're building the team around. We're really focused on it in the back end of this year and into 2027. How much, how much of Ridge's growth can you attribute to the, the new chains launch? Like, however you want to think about that. Like if you didn't have chains, like adding chains, all the revenue from chains added X percentage points to your top line growth. And like since you launched, like is it a, is that a big chunk?
- [48:32]
A
No, it's not a big chunk. I mean it, it for a few weeks was very meaningful for the jewelry category. Like, I think jewelry as a category, it can probably increase our growth for 2027 by 40% or something because it'll be, it'll be like totally incremental to the category, something like that. But, but jewelry is a relatively small subset of the Ridge business, right? So it's like if the reason the region, the reason Ridge is having such a strong year is because we're able to get growth in edc, we have luggage, we have, you know, things like power banks, things like that. Chains, chains from like a top line growth perspective is, is going to be like a really relatively small contributor. But for us it's like getting more iron in the fire and having like, you know, can change, do 40 million in 2029, like maybe. And it's like, it'll be good to have that revenue at that point. One of the reasons I'm excited about travel still is like travel is just a bigger category and can be a bigger line of business than something like chains. Like there's just, I don't think there's any path to chains doing $200 million a year. So the idea is it can remain a smaller subset of revenue. It can be high margin, it can help, you know, alleviate growth pressure on something like rings at some point, which I also don't think has $200 million potential. So it's just about having like sizable, you know, sizable opportunities for wins without spreading ourselves too thin.
- [50:00]
B
Maybe shifting a little bit here into like what you said about where your growth is coming from. You said most of your growth is coming in EDC if you could choose. I'm sure it's a lot of things, right? I mean, you guys are always have a lot of Irons in the fire. You're constantly improving your funnels, all of it. But, like, if there's one or two things that you had to say are driving most of the growth this year for Ridge and edc, what would those things be? Is it. Is it product expansion within edc? Like, is it the continuation of launching more and more and more new designs and new colors and. And just more wallets that are reaching new audiences? Or. Or what would you attribute the growth to?
- [50:34]
A
Totally, yeah. And just like, for what it's worth, it's not like we're getting massive growth in EDC, but 10% growth in EDC is multiples more than what we'll do in chains this year. Right. So it's like we only need, like, kind of small, small incremental growth for it to be like a relatively big, like, nominal impact. Yeah. Where's that growth coming from? Newness is the big one. And that's been the case for us for, like, two years now is when we can get great colorways, great designs. Like, that solves all problems. And I've talked about this before, but, like, far and away, our most incremental ad dollars are spent on newness, where we are scraping by getting 1.2, 1.3x incremental ROAS on, like our evergreen. If we're trying to sell a gunmetal or a royal black wallet and then we have a cool tattoo design that comes out. And I've talked about this one before. This was last year. We can observe a 4x incremental ROAS. Like, it is just so much more impactful. So we've had a couple of those wins. Things like TikTok shop.
- [51:31]
B
Wait, sorry, can you. I missed that. I missed the difference in. In like the. The 1.2 Iro AS versus the 4X Iro AS. What's driving them much higher.
- [51:39]
A
The newness 1.2 is on, like, our core evergreen stuff. The gunmetal, the blacks, the carbon, the wallets that we've had for 13 years. It's really hard to drive very incremental results with. It's when we launch something brand new that, like, we just continue to observe significantly more incremental, you know, returns. The second point that I was going to hit there was, oh, channel expansion. TikTok shop. We're spending way more on YouTube year over year. Like, just those standard, like, media buying wins. We've continued to like, find opportunity in and are all. It's like, I don't know what the.
- [52:16]
B
The.
- [52:17]
A
The inverse of death by a thousand Lashes is. But like that's how we're getting to 10% growth is. It's just coming from all across the board, really slow and sort of like, you know, these marginal improvements.
- [52:30]
B
Quick gut check for the operators listening. If you're spending on TV or CTV today, can you actually say what it's driving incrementally? This is exactly why we work and have worked with Neon Pixel at hexclad for the last three years. We've grown with them a lot over time and CTV has become one of our top growth channels. They help us treat premium living room TV like a real performance channel. It has smarter household targeting, it has suppression of people who already know us. It has a very robust analytics back end. So we feel really good about the measurement. And ultimately, and most importantly, it is a strategy that is built around incremental growth, not just claimed attribution. We look at incrementality as the true north star on measuring channels and they are really measurement agnostic. They don't force us into their own black box dashboard. They work inside the measurement systems we already trust and help us understand what TV is actually doing. If you want to check it out, go to NeonPixel Co and ask them to design a controlled CTV test on your numbers. What are you seeing on TikTok Shop in terms of product mix AOV? Like is it a similar product mix as what's driving growth in revenue on Shopify or is it very different?
- [53:42]
A
Yeah, it's super different. I think we've talked about this a bit but like our hero product on TikTok shop is our tracker card, which is like $30. And so that's, that's another big thing. Again, we count the tracker card within our EDC category. It is ultimately like a wallet accessory. And we've just found like that ends up being one of our top silhouettes. And, and we found it surprisingly to work extremely well in TikTok shop. And then now we're trying to build out funnels on Meta and Applovin and seeing like maybe this is a new sort of beach head into the brand, which is still very tbd, but we think is potentially like a growth opportunity for us going into, you know, the next couple of years.
- [54:25]
B
Do you find that people are like buying tracker cards and they're not even buying a ridge wallet? There is buying the tracker card and throwing it in there. The wallet they already have. Oh, interesting. Okay.
- [54:33]
C
Yeah.
- [54:34]
A
Our top ad for a while is like one that didn't have a ridge wallet. They were using like a Leather wallet. Wow. Okay, I want to hit before we, before we jump here. We're not. A little, a little bit of time. I want to hit over under with Cody.
- [54:48]
C
I love this one.
- [54:50]
A
Connor and I did it last week. We had a blast.
- [54:52]
C
Oh, you did?
- [54:52]
A
10 minutes.
- [54:54]
C
Same. Are these the same topics? Same, same. Same ones. Okay.
- [54:57]
A
I removed the ones that we hit. I removed the ones that we hit last week. Okay, so you're familiar with the game because you've got. The really key thing here is you've got to assess how is it currently rated and then figure out whether you think it's over or underrated.
- [55:12]
C
So do you want an explanation or just an answer?
- [55:16]
A
Answer and brief explanation. And then we kind of let it deviate quite a bit. We only hit like three of these last week and we, we, we ended up going deeper than I expected. Let's do the, let's go straight to TikTok Shop. Good segue here. We're seeing success. We've talked about it a lot. TikTok Shop over or underrated?
- [55:35]
C
It's very, very, I would say hot right now. I still think it's underrated.
- [55:39]
A
Connor, where do you land on this?
- [55:42]
B
I think it's perfectly rated. Finally. I think it was underrated for like leading into this year. But I think brands are like, you hear about Groons has like a whole tick tock Shop studio. I was with Wyatt from Mary Ruth Organics last week. He said that they're streaming 24 7. He said they're never not streaming on a TikTok Shop live. They hire D list actors to run these, these lives. And I think we're seeing more and more of that. I know at hexcloud we're investing more and more and more in the platform, even though our product price point doesn't lend itself as much to, you know, the platform. But yeah, I think it's like, I think it's pretty, pretty well rated right now.
- [56:18]
A
Well well rated.
- [56:19]
C
I think it's still early.
- [56:21]
A
So what do you mean by that?
- [56:22]
C
You, you know, so like with investing, people are like, oh man, it's like too late. I wish I got in the stock later. And it's like if you look at the long term trends of some of these stocks, it's like sometimes when you think it's still early, it's like. And like everyone has jumped in and you think, you think it's too late and you've like missed it. If you zoom out in the grand scheme of things, it's probably early. It's Obviously not as early as it was. It's like meta ads in 2019. Yes, you missed the $5 CACs, but you're still going to get a $30 CAC compared to the $100 CAC that you're going to get now. So it's like, yes, it's not as good and there's not as much arbitrage as it was, but I think it's just still on a rapid growth trajectory. And in the grand scheme of things it's still early.
- [57:07]
A
I think to get success on TikTok shop, there are some brands that like, are natural fits for it. Mary Ruth Organic is one. You know, the way that Comfort does their like promos and their products. It's big tam, it's women oriented, it's impulse prices. It's like really well done. It feels to me at least the way that it will have to work at Ridge. And I spoke to another executive at another company which she oversaw TikTok shop and she oversaw merchandising, which I thought was a really interesting point because I do think many brands, in order to win on TikTok shop will have to take a different merchandising approach. For us, we're seeing a $30 tracker card work and like if Ridge is going to be really big on Tik Tok Shop two years from now, we'll probably need a lot more like small, high utility, impulse purchase price products. And like mer, it will force us to like take a new merchandising strategy exclusively for that channel. And then the second one is, and I've talked about this quite a bit but like the idea of TikTok shop being at its core just a way to activate affiliates at scale or just creators at scale. I shouldn't even say affiliates. The ability to mobilize dozens or hundreds or thousands of like people to begin creating content about your product. Those two things feel extremely underrated to me. Both of them can happen independent of TikTok shop. And I think TikTok Shop ends up getting credit for both. Where it's like all of a sudden like TikTok shop is the, is synonymous with like great merchandising strategy. And I would just, if I could decouple those, I would say the underlying components, the merchandising and the creator activation is highly underrated right now. TikTok shop itself maybe perfectly rated. I'd almost go slightly overrated because I don't think people are understanding the tactics that TikTok shop is forcing someone into and that, you know, the Shop itself is not necessarily the value.
- [59:01]
B
That is a great point. That is a, like decoupling those things is because I, I actually think that's what we're, what we're doing really well with TikTok shop is the sheer amount of content that's getting produced and the creators that are producing it and the impressions we're getting from that. I think that we still have the opportunity to do better merchandising for TikTok shop. Like, can we create products that are sub$100 and still get good efficiency and volume on those products at some point? Potentially. But for now we're like, hey, this is a great extension of our, of our product seating program that is already pretty big. And I fully agree with that. Like, that is the, at least for hexclad, that is the value. It's not, it's not driving. We're not going to drive 50 million in revenue. We might not even drive 10 million in revenue on TikTok shop this year. But I do think we'll drive tens of millions, maybe, maybe hundreds of millions impressions through those creators that are only flowing because we have the, that set up in the, you know, creators can come and apply for it. We send it to them, they're creating content around it. We're starting to pull that into the ad account now. So we're getting that flywheel going. I'd say, like, that is way more of a, of a value add to our business than actually driving revenue through TikTok shop.
- [60:10]
A
All right, let's, let's hit. I want to hit two more. The last one is more of a joke. I'm, I'm hiring for a director of retention right now. I've been thinking a lot about loyalty programs. Loyalty programs over or underrated?
- [60:21]
C
I'm going to ask you guys, because we are actually looking into it and I've been not super open to it in the past partly because it's just I have never seen evidence of incrementality on them. I know it's a very hard thing to do, but we're likely going to do one. So I would say it's probably overrated, but I'm trying to be open minded
- [60:48]
A
because I would also say, like perceptions. They're not highly rated right now. Loyalty programs are not hot. It feels almost like a relic of like 20, you know, 2015 brands or something.
- [60:59]
B
I think they're proper, properly rated because of that. That they're not hot.
- [61:02]
C
Right. If you think about it, they were like, you know, I always think about like comotor's I think, I don't know butchering how to say it, but they're, they had like a sick program. Maybe it was more of a referral program, but like brands like that, those like you know, D2C 1.0 like raise a lot of money. Like and, and yeah, when, when brands need to be profitable and budgets get cut, I think that's like survival of the fittest and you see what stays and what doesn't and you know, brand. So that's probably why I think they got cut. So yeah, maybe, maybe they're, maybe, maybe they're appropriately rated. I don't know. Have you guys ever seen success like, have you ever seen anybody publish a case study or anything that's like, oh, this actually drove real revenue? Or it's like hard to know.
- [61:44]
A
I don't mean to like, well this is kind of the point of this game but like I'll break this one apart again because the out of the box loyalty programs do feel overrated to me or like maybe, maybe properly rated just because people don't like them that much. Like it feels like we're past that point. You know, kith they like made news with their loyalty program two years ago and it's one of those things where it's like, if you fully commit to it and integrate it well, I think brands totally have the ability to 100% drive a better customer experience. And I just, I don't, I don't have evidence of this literally happening. But if you're providing a better customer experience, I do think you'll be driving incremental revenue at some point. So if you can fully commit and like thoughtfully integrate a loyalty program, I think it can be beneficial. But those examples are really, really few and far between in my opinion.
- [62:35]
B
I, I agree. I think like I, we, we were doing the exploration of this two years ago and kids is at the top of our list of like, they've just gamified it and it's like a fun brand experience. I think that's where, that's where the value is in a loyalty program. It's not, hey, for every hundred dollars you spend, you get a hundred points and 100 points equals $10 off. Like, I just, I, I don't think that that actually drives a lot of incremental orders. I mean we've grown our, our like yearly cohort ltv pretty consistently for the last four or five years. And like, it's certainly not through loyalty programs. It's through better retention tactics and new product go to market and I don't think having a loyalty program would have, would have made that any better. I think we're. But I think if you, if it's like. I think loyalty programs need to be thought of as like a brand marketing exercise and not a. Maybe not for every brand, but at least for hexcloud. That's how we were thinking about it. Like, if we ever roll out a loyalty program, it'll be a really cool brand. Brand play right where like you spend X. Like we have three tiers, you spend X dollars. And if you get into like the Black Apron Club, you get like a custom design black apron that says Black Apron Club that no one else is getting. Like a gold plated, you know, hexmail, or like, you know, a gift card to a really nice, like, restaurant in your city. Like something like that that's just kind of more brand oriented and just gives people a really good touch point. But it will not be transactional. I think that's the decision we've made. We're never going to have a loyalty program that says, hey, you have 2,000 points in your account and that's worth $200. I just don't think, I just don't think that's the move. Like, just if you're gonna give people a discount, just like run a sale and give them a discount, you know.
- [64:11]
A
Totally. Yeah, 100%. And it reminds me a little bit of the TikTok shop answer where it's like what you just described is like really cool merchandising, developing products that you are going to like reward like certain customers with in order to drive loyalty. And it's like, yeah, that's, that sounds like a great loyalty program room. All right, I got one more for you guys. You guys both did it in the, in the group chat this morning. Sending voice notes over or underrated.
- [64:35]
B
So underrated. So underrated. Like, although what I will say is I feel like they've become, with the, with the insertion of whisper flow, I think they've become slightly, maybe a little less valuable, less valuable than they used to be. Because now whisper flow, you can just like tight, you know, speak to it. It'll. It'll write it out. But like, for me, I can send a voice note in a fraction of the time that, that I can write it. But then we have people on our team that just hate it. Like our, our chief info and admin officer. Like, I'll send him voice notes and he will freak out at me. He's like, well, you want me to open that and listen to it. I'm like, yeah, yeah, I do. Come on. Like, what's wrong with that? So I think they're. I think they're underrated, though. I love voice notes. I love getting them. I love sending them.
- [65:22]
C
I was gonna say, Connor McDonald, as the recipient of a few voice notes this morning, I think you should be the one that weighs in, because it's not about, you know, is it good for sending? But how is it as a recipient? How do you feel about them?
- [65:34]
A
I think they're properly rated. That's where I'm gonna go now. And I say that because some people hate them. Like, it is, like, kind of mixed, and I think that's, like, probably, like, the right approach. I didn't mind you guys sending voice notes this morning. Olivia from House sent me one yesterday and started the voice note apologizing for sending a voice note. That's where I'm like, oh, it's like, such a. Such a. People are so split right now on whether they're good or not. I send them all the time. I'm more of a loom guy. Like, I. More often than not, I send looms. Even if, like, I really just want to be heard saying something like. Like, 80% of the value of the loom will be, like, the audio portion of it. But, like, you know, maybe I'm sharing a doc or something. So, yeah, I'll go. I'll go. Properly rated. I don't mind receiving them. I often send them. Not too often. The only tricky thing is, like, there will be times where I'll be out, and I want, like, I want to get the message. Oh, it's two things. One, I'll be out, and it's not always good to listen to something that's a little bit trickier.
- [66:32]
B
I'll listen to the. I'll read the transcript. Then if I don't want to listen to it, but I want to know what they said. I'll just read the transcript. And it usually works pretty well.
- [66:40]
A
So that's good. So that makes it. That makes it much easier. The other one is Apple doesn't have two X. So you guys sent the voice out this morning. I'm like, dude, I'd love to listen to this on, like, 1.5, 1.7. Like, speed. Like, let's speed this up a little bit. So those are my only two qualms. But, yeah, let's call it properly rated.
- [66:58]
C
You know who I found out hates voice notes? Taylor Holiday apparently does. Not a fan of voice notes.
- [67:03]
B
Yeah, that surprises Me, he, he strikes me as like I'll do all the efficiency gain things.
- [67:08]
A
So where do you land on it, Cody?
- [67:11]
C
Oh, I'm a big fan. I'm a uh, I like voice notes, like receiving, giving, big whisper flow fan. I think the one thing you know, you gotta be careful of, cause I use whisper flow a lot is it's easy to go very, very long and that now you're making the recipient just read like a novel. Um, so it's easy to do that. I am a huge whisper flow fan for, for, for Claude, for AI And I've seen people start calling it yapper. Strategy is like they'll just, they'll just essentially yap whisper flow 10 minute brief, just like full brain dump and then just be like, all right, go do it. So I'm actually like a very big fan for but yeah, I think you just got to be mindful of, of you know, is this a good experience for you? So like, like I, I, I struggle with that with looms. I'll be like, I'm just going to do a short loom and before I know it, it's like a 12 minute thing. And I'm like, that's like I, I will, I will occasionally restart a loom because I'm like I didn't need to say half that stuff. And that's like not, I don't want people, you know, having to sit through a 12 minute loom. I don't want to sit through a 12.