← Perpetual Traffic
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- [00:00]
Ralph Burns
Foreign.
- [00:03]
Lauren Schwartz
You're listening to Perpetual Traffic.
- [00:11]
Ralph Burns
Hello and welcome to the Perpetual Traffic podcast. This is your host, Ralph Burns, the founder and CEO of Tier 11 alongside Lauren Schwartz. Lauren Schwartz. The other Lauren. That's right. Not Lauren Petrulo. This is the second in a series of just me and her talking about beauty and wellness. I love these shows because today's a little bit of a shorter show, but I think it's very topical, especially if you're listening in and you're not even in the beauty and wellness space, but you're also interested in what's going on in the world. We've done a number of shows just on this. Like, the most Googled phrase in the last three weeks is what we're talking about today is tariffs or tariff and the impact on the beauty and wellness space. And obviously, you've got a tremendous amount of experience as a creative in that space, but also dealing with beauty and wellness brands. It's obviously an area that we do extremely well. If you're interested in learning more about that, you can always check that out over@tier11beauty.com it's tier 11 with the actual number in it this time, as opposed to the tier 11 that is not the number, because that guy just wants like a million dollars for that URL. So check that out or@yourlear11beauty.com the impact that you're seeing just in general on beauty and wellness and then how that sort of impacts creative, how that impacts how you position. Like, what are you seeing right now? What's hot? Like, what's the thing that people should be looking out for? Not necessarily just only in beauty and wellness, but also maybe even for all products.
- [01:42]
Lauren Schwartz
Yeah. So again, tariffs are obviously a really big topic right now. And before the show, we were talking that it may not be impacting you right now, but it's something that is going to impact you as you start to maybe repurchase or reorder or, you know, things like that. It's more so that if you already have the product in stock, great, you don't have to worry about it. But we've seen several brands who are needing to refill backstock inventory. And now the tariff is 145% now. So it's obviously going to create this huge markup.
- [02:15]
Ralph Burns
Yeah.
- [02:15]
Lauren Schwartz
So with any sort of product, whether that's apparel or whatever, you have to think within your beauty space, not only is it just the actual physical product, but it's your ingredients. Your ingredients are definitely going to be impacted to a higher price. Your Packaging is going to be a higher price now, therefore making everything within your product just a higher price overall. So we may not be seeing it fully yet, but definitely, I think as brands are starting to replenish their stock, I definitely think they're going to have to start to either increase their prices or really start to understand how they're going to focus and shift their messaging so that they are letting their audience know or customers know that we are going to have to start doing this sort of stuff. Like, this is the reality of what's happening right now.
- [03:04]
Ralph Burns
Right, Right. Whether or not it stays as is or whether or not it's just a ploy. We've certainly talked about this on previous shows. You and I have very strong opinions on this, which we'll leave out for at this point in time, but we are not fans of this ridiculous policy. So there you go. It's absolutely insane because, I mean, I talk to dozens of businesses every single week. Among most of our business development calls, you're talking to clients like that, our tier 11 clients, and also, you know, some of the ones that are prospective tier 11 clients. Like, everybody's talking about this. And I think the biggest thing is nobody really knows how to project out their budgets because they don't know the numbers keep changing. However, you know, we had a client that unfortunately realized that tariffs are going to basically add $4 million to their bottom line and much larger organization. However, they had already seen, like, their first container come in. That was in the tariffs that haven't even been impacted by the 145% increase. They were 10 to 25%. And that's what they were trying to project out. And now with 145%, they're like, how am I going to make this up? I mean, I have to pass that on to the consumer. That's what idiot POTUS doesn't understand. So I guess this is becoming a political show. But the point is, the tariff isn't paid by the country that you're tariffing. It's paid by the company importing it. And that cost is passed on to. Hello, you and me.
- [04:32]
Lauren Schwartz
Yeah, exactly.
- [04:33]
Ralph Burns
Or they figure out a way around it. So that's really the biggest thing. So it's not like an immediate impact. And I think that's a really good point, is that you might not see it in your business yet, but maybe when you reorder.
- [04:44]
Lauren Schwartz
Yeah.
- [04:44]
Ralph Burns
I was speaking with a prospective client yesterday. They're like, thank God, in January we ordered 70% of our inventory for the entire year.
- [04:52]
Lauren Schwartz
Yeah.
- [04:53]
Ralph Burns
So for our busiest season, because we have to load up and so impact of tariffs on them minimal in 2025. However, if you're a beauty and wellness brand and you need mineral oil or whatever it happens to be, and it's sourced in a country that's tariffed, you're going to see increased prices. And what are they going to do at that point? Do you pass that on to the consumer? Do you eat that cost? Like, how do you do it? And that's really sort of the question on a lot of businesses minds right now.
- [05:22]
Lauren Schwartz
Yeah. And I think again, like the biggest thing I think right now, especially within your creative, is that it may not necessarily be the actual like visual of your creative, but I do feel like being honest and understanding, like where your consumer is coming from. But then also as a business, I mean, you are still a business, there are still people behind it. There are still a lot of things that are real. And so I think that leading with more just honest type angles and honest type copy, especially for your customers, is actually something that is good to address now. I mean, we're all living it. We all know what's going on, we all know the situation we could be in. And so just some of the clients that we've been talking to have just kind of been, you know, like, how can we address this in a way that's not obviously going to scare people away, but just be honest with them? You know, I've actually been seeing a lot of ads within the beauty and wellness space where they specifically say like tariffs, you know, a huge static image that calls it out, specifically talking about, yes, we know we have tariffs. Obviously we don't want to increase prices, but this is the reality of where we're at at this point point. So just some of like the messaging that you could potentially address is like, we've never marked up in three years now we might potentially have to mark up our prices. Like I think just being more open and just again acknowledging the fact that this is a situation we're in, I think has more leverage in your creative than not talking about it because everybody knows what's going on. So I think just the honest route and the honesty route is a much better way to address it than not addressing it at all.
- [07:00]
Ralph Burns
Right, so how do you do that when it comes to creative? How do you visually represent a shift to address it, but then also positioning your product in the right way? Like what's your sense right now? Especially let's use beauty and wellness as the example because obviously it's part of the series here, so maybe start with that.
- [07:16]
Lauren Schwartz
Yeah, so it's interesting. I have actually gotten served ads that specifically are focused on beauty and they still take what is working for them. So whether that's a static ad and just talking about the pricing like a relatable honest copy could be like, yes, prices are up but your skincare doesn't have to suffer. Things like that, like we're not raising prices, we're raising standards. Those type of things like I think could be interesting to talk about but then again showcasing the statics that work for you. I've also seen UGC of people in their warehouse being completely honest and saying yes, like we're all being affected by tariffs. This is why you should still obviously get your skin care. These are why things, you know, like it's not a luxury anymore, it's what you need. And so just kind of switching your messaging of again like yes, we understand that this is happening, but how is it that we could shift our messaging of not necessarily talking about luxury and the price, but more just like it's essential. This is essential wellness product that you still need in your everyday life no matter if the price goes up or down.
- [08:22]
Ralph Burns
So positioning away from luxury and positioning more as this is something that is not just something if you have some extra cash, but it's something that you need on a daily basis.
- [08:32]
Lauren Schwartz
Exactly. Yeah. It's a part of your essential either self care, routine, skincare routine, diet routine, supplement, whatever it is that you know you need that it's not positioning it as it's just a nice to have. It's more of a you, it's an essential.
- [08:46]
Ralph Burns
Right. And then the creative like video image, that kind of thing. What would be your recommendation there in order to help represent that or reinforce that that concept?
- [08:57]
Lauren Schwartz
Yeah, so again, I still think just going with the honest angle. You know, a lot of the ads that I've been seeing have been a lot of people who work at the brand and they're just sharing the information that you know, it's kind of a behind the scenes, like it's very real, it's very raw, it's very organ talking about how this is what's going on, this is what we're seeing. But we're here for you. We understand like we know that this is happening. And again, I think that kind of raw, authentic content still does well regardless of whether we're in a tariff situation or not. Like that sort of just honest, relatable content just works really well, which goes.
- [09:35]
Ralph Burns
Back to some of the stuff that we've talked about in the first part of this series is having the right type of content creator that can relay the message in a genuine and relatable way. I guess I used relate to twice in that sentence. But the point is, is that like address the elephant that's in the room in this particular case. Have you seen examples of UGC specifically talking about that as of yet or at least or even started in on projects where that is a part of like the overall messaging through the content creator?
- [10:07]
Lauren Schwartz
Yeah, actually, so I did see, save one, I could share my screen.
- [10:13]
Ralph Burns
Sure.
- [10:13]
Lauren Schwartz
And this was from a clothing brand. Yeah, I think it's one of those things. Again, people, again, if it's authentic, it's relatable. It's not only does behind the scenes content work really well, but also again, like they don't know what's happening. They don't know what's going to happen. Like this could change tomorrow, this could change today. Like, who knows? Like we're all kind of up in the air and I think just being honest and relatable and showcasing that is something that's super authentic and you know, again, like so relatable. So I think like this sort of tactic is great, but then also like their messaging too. They're being real, they're being honest. But I also think that this sort of retention play is something that can be really good if you already have loyal customers, if they have backstock of something, like get the product now, like we have no idea if we're going to be able to reorder it. Your prices could increase, like all these things that you can kind of start to shift in not only your messaging, but just your strategy overall. What's going to be the best strategy for you as a brand going forward? So I think this sort of content is just starting to pop up more and more as this starts to unfold.
- [11:18]
Ralph Burns
Right, right. And if you weren't watching that, I mean, obviously you can watch it over at perpetualtraffic.com YouTube over on our YouTube channel and subscribe to that as well. But it was basically, I assume those are the two founders.
- [11:31]
Lauren Schwartz
One was the social media manager and one was the head of product.
- [11:35]
Ralph Burns
Head of product. Okay.
- [11:36]
Lauren Schwartz
Yeah.
- [11:37]
Ralph Burns
So like people that are high up, like understand this sort of thing obviously. And they were just standing in their warehouse.
- [11:43]
Lauren Schwartz
Yeah. Very simple, very authentic.
- [11:45]
Ralph Burns
Yeah. And good for them if all that stuff that was in the warehouse was stuff that they had ordered pre tariff. They're smart, they're saying, hey, maybe they're not as impacted. Going back to my original or our original sort of point here. And this is always something that's fascinated me because you guys get me to do this. Look, we did this before you came on. It's like the founder's story, the founder coming on. I hate when I see commercials. Like, it's only like the founder and the CEO and he's not good on camera. And it's just, it's an ego gratification thing. Let's set those crappy commercials on, you know, network tv aside is a founder story, is that an idea where you're addressing it head on? Obviously there you've got head of product, you know, you've got head of social media. Is that founder story part something that is relevant here? Would you recommend that to people who are listening, who maybe are like, well, maybe I can just do that kind of thing, or I'm not really even like the face of the brand right now, but maybe now's the time to do it?
- [12:46]
Lauren Schwartz
Yeah, I mean, again, like, I think we're all in this unknown phase and the more relatable, authentic content you can talk about and produce, I think is going to go so much further than just, again, your normal sort of content strategy. Because again, like, we don't know what's going to happen and people want to see the people behind the brand, you know, everybody. Regardless of whether you like it or not, founder content always works. It will always work. Behind the scenes content always works. Especially in your paid strategy. I always say, like, that sort of content resonates with your audience because people want to see how relatable you actually are. They don't just want to know that you're someone behind this big business, basically.
- [13:28]
Ralph Burns
Behind the curtain, like the wizard of Oz. Yeah, I think there's a lot of founders and owner operators that listen to this show. They are the marketing department. And how do you do that? Like, what's your recommendation? Because I remember when you guys, whenever I'm traveling like, oh, do bts, I'm like, what the hell is bts? Behind the scenes stuff? By the way, I was on the last trip, I think Alison was pissed at because I didn't do any bts. So if you've never done this before and you are a founder and you're listening, or maybe you're the director of marketing, you're like, hey, we should insert this into our organic social here. What would your recommendation be? Is it just that simple like the example that we showed? Or would there be other things like you're Addressing it head on. In their case, they're giving a discount. So that's sort of a separate question, but like, what kind of content should you maybe focus on if you are in that position?
- [14:20]
Lauren Schwartz
Yeah, I mean, again, anytime we talk to founders and we talk to them about doing any sort of founder content, I always say again, like, set up your camera and just talk. I mean, at some point you have to just get comfortable talking in front of the camera and it's never going to be perfect. And again, I think that's why it works so well, is because it's so relatable. But you just need to kind of get past that. I'm nervous, I don't want to do it. I feel silly doing this. Like I just always tell them, just set up a camera, start talking and if you find things that you want to discuss, maybe stop and then go back. Like again, that's why you have editors, that's why you can edit. Like you can cut out whatever you want, you can make it as short or long as you want to talk about. But again, at the end of the day, that real authentic content of you just sitting down at your desk and talking about what's the reality of your situation goes such a long way as opposed to making this high end great video of your content. Like the relatable content always outperforms, I think any sort of high end content when it comes to founder stories or founder videos.
- [15:25]
Ralph Burns
So if you're in the beauty and wellness space, would it be like there's a couple of tips I can give to founders having done a lot of founder content, but is it maybe going through hate? This is a good time for me to talk. Like if your pitch for your product, for example, is it's all natural or it's organic or it's, you know, sourced in these exotic locations. You can even maybe go through like your list of ingredients maybe and say, hey, this might be impacted, but this isn't. And this is the largest part of like where we're. So you're selling and being transparent about the product itself, but also sort of explaining this is kind of how it works behind the scenes. Like if you see a price increase for us, it's because of these reasons. And that doesn't necessarily mean abandon the brand.
- [16:07]
Lauren Schwartz
Some of these, like skincare products, like the ingredients are sourced in different areas and so the reason why they're sourced in these areas is because, you know, it's better there, it's higher quality. Like all of these things, like again, those are things that you can discuss with your audience and let them know this is why it costs this much, you know, and we want to still deliver a high value of a product for you, but this is the reality of kind of where we're at. So if we do have to increase prices, it's because of this. But this product has all these benefits. Again, like just calling those things out, still highlighting your brand. So highlighting the product and then again highlighting all the ingredients that are in the product, again, makes it still a great selling point, but then also just clarifies, like, why this product costs what it costs. Yeah.
- [16:57]
Ralph Burns
And for founders who are scared, there is a great app. It's called the teleprompter app. It is so good. I use it sometimes just because I'm like, I want to make sure I hit on these bullet points. And it's like the red. We'll leave a link in the show notes because it's so amazing. And you can just use it like your hand right in front of you or whatever it happens to be. We do it on a stand. So if I get something from our social team, little tip. I'll bullet out what I want to say, and then I'll give it some space, and you can make it faster or slower, or you can script out the whole thing and you can make it come across really naturally. That's like, the little hack that I use is, like, I didn't go to acting school, but we do a lot of this stuff. And I think maybe now's the time, if you are a social media manager, product manager, founder, CEO, to get in front of the camera and address your audience in really real terms like this. And I think that's a really solid strategy. Agree or disagree?
- [18:01]
Lauren Schwartz
Yeah, I definitely agree. Yeah. I think it's something that is, again, I think it'll go a lot further than just still trying to, again, avoid the elephant in the room. So I think as long as you just come out and just say, like, this is where we're at, I think more people will understand, and I think it'll just resonate, and I think it'll be better in case you do have to increase your prices. Like, right. You. They already know what's coming. They already know what's happening, and this is kind of like where we're at.
- [18:28]
Ralph Burns
Right? Yeah. You're prepping not only new customers, new clients, but also your list. I mean, those are the people that are obviously that are increasing your LTV and your AOV to a certain degree. So, I mean, definitely do that. And One big tip. If you're doing this, if you're like, oh, my God, I've never done a video before, hold it high. If you go low, makes you look like you got like the turkey chin. Like, even if you're skinny, like, it's horrible. So get it up over your eyes. Little tip for you there. So anything more to add? Because I think this is super helpful for a lot of people with an uncertain environment here. Any last words here?
- [19:06]
Lauren Schwartz
I think one last thing I would just recommend is just, again, your customers that you already have, just making sure that you are retaining them. I think a retention and LTV strategy is still super important. And if there's any way to kind of upsell or cross sell some things, you know, bundle things together, like, how can you continuously focus on just the people you do already have and how can you just continue to keep that loyalty there? Because again, I think right now we're still kind of in the unknown and new consumers are struggling a little bit more than older consumers in terms of, like, how they're purchasing and how they're buying. So I would definitely say, like, really focus on your loyalty and retention when it comes to your paid strategy.
- [19:49]
Ralph Burns
Would you recommend, as a caveat to that, a discount now to stock up in case of a later date?
- [19:58]
Lauren Schwartz
Yeah, definitely. I do think having some sort of sales strategy is great again, because we don't know what the future is going to hold. Like, who knows if the prices could increase significantly. So if you do really like the product, you really want to continue to purchase it, let's say for skin care, for instance, or, you know, makeup or health or wellness, if you know that it's going to possibly go up, stock up, you could still have it, you're still going to use it. So, yeah, I definitely think that that.
- [20:23]
Ralph Burns
Would work on discounts just in general, in the beauty and wellness space. Like, obviously it really depends the cost of goods sold and the infrastructure of the company and everything else. Because everyone has like that 10% off thing that pops up on their site. Like, what's a discount in your opinion, in that space that people like, oh, that's not a crappy discount. That's a really good discount, but not so big because you still have to, you know, you need profit at the end of the day. Where's that sweet spot and beauty and wellness? Or is it just a hard question to ask?
- [20:53]
Lauren Schwartz
I always think that 20% off, especially for, like makeup products, like, that's a great discount. Like, if I saw 20% off for the makeup Product, I'd be like, yeah, sold. Get me, like, 10 of those. You know, same with, like, supplements. I would say, like, 30%. Again, 30% off a supplement is a great price, but again, you're not pricing yourself or discounting yourself so high that it just seems like you're. I don't want to say cheap, but it just is kind of that sweet spot of, like, these are good percentages off that still make it feel relevant, still gives you, like, a good price that you're paying, but not, like, cheapening the brand.
- [21:27]
Ralph Burns
Right, right. I mean, whenever I'm on any sort of call where people ask me that question, I say, don't ever discount as much as you possibly can, especially for a new customer. Only at last resort. Like, maybe it's like your third retargeting ad to They've added to cart. You can't get them over the hump. And that's a very small percentage of people overall. But if at all, like, sell it for what you sell it for. Don't discount too much. In this case, 20, 30%. Are you talking about new customers? Are you talking really about, like, sending your list like, hey, this is our special to you guys because you're loyal. Okay.
- [22:03]
Lauren Schwartz
Yes. Yeah. I wouldn't say top of funnel or, like, your new prospects. I would say more of, like, your. Again, like, retention, loyalty, retargeting, bottom of funnel. Like, those are the people you want to start hitting with some discounts.
- [22:14]
Ralph Burns
Right. Make them feel special. Make them feel we're in this together.
- [22:18]
Lauren Schwartz
Yeah, exactly.
- [22:19]
Ralph Burns
Like it's okay to show some cracks. Like, that makes you real.
- [22:23]
Lauren Schwartz
Yes, exactly.
- [22:25]
Ralph Burns
Right?
- [22:25]
Lauren Schwartz
Yeah.
- [22:25]
Ralph Burns
Don't ever position yourself as like, I've got everything and there's nothing wrong with my product. Every product has faults.
- [22:32]
Lauren Schwartz
Right.
- [22:32]
Ralph Burns
And we used to call this. I was in the pharmaceutical industry for years and years, calling on doctors for decades, and it was like, always have fair balance. And when I first heard that term, I'm like, fair balance? What do you mean? Tell them some of the side effects at the end. Because otherwise, even if it's like a rash and 0.01%, just make sure your patients with rheumatoid arthritis don't take this. It's like, it's okay to show some cracks here and be a little bit more transparent. You end up selling more because it's genuine, organic, and that's what works in creative.
- [23:06]
Lauren Schwartz
Yeah, yeah, yeah. I mean, you always see those commercials where it's like, take this pill, but here's the 20 side effects. I could go on. So you're like, okay, eventually maybe this could happen, but at least I know. So I love the guy who talks.
- [23:18]
Ralph Burns
Really fast at the end.
- [23:19]
Lauren Schwartz
Yeah.
- [23:19]
Ralph Burns
All the things that you could get. Yeah, this could cause heart disease. Just all the things, emphysema, you know, renal failure. Yeah. And he talks really, really fast. So, anyway, well, this is awesome. I think a lot of people are going to get a lot from this, even if you're not a beauty and wellness brand, but ways in which to, you know, tariff proof your business as much as possible. And this is obviously something that we're going to continue to discuss here on the show ongoing as this situation evolves or devolves or hopefully goes away. Of course, if you want our help, head on over to tier11beauty.com. You actually get Lauren Schwartz, like, as your strategist. Like, she's the one. She is it. So if you're liking these shows and you want our help, whether you're a beauty and wellness brand or not, check us out@tier11.com of course. So amazing to have you on the show. We're going to have you on a couple more here as this series continues and evolves and super appreciate you coming on today. Wherever you listen to podcasts, make sure that you do leave us a rating and a review. We're seeing comments now on Spotify, which is great. So wherever you listen to podcasts, please leave us a rating or review that helps us get to a wider audience. Of course. And obviously all the show notes will be over@perpetualtraffic.com so on behalf of my amazing guest host, Lauren Schwartz, until next show. See ya.
- [24:42]
Lauren Schwartz
You've been listening to Perpetual Traffic.