Guillaume: Hello everyone. Guillaume Le Tual here, host of the Ecommerce Wizards Podcast where I feature leaders in e-commerce and business. Today’s guest is Reinis Krumins. He’s the co-founder of AgencyJR, and today we’ll be talking about lessons learned from working with multiple eight-figure e-commerce brands. All right, Reinis, thanks for being here today.
Reinis: Happy to be here. Thank you for bringing me on.
Guillaume: Can you give us a one minute overview of your background in email marketing as an entrepreneur?
Reinis: Yes. I co-founded the agency with my business partners almost three years ago, it’s like two and a half years ago. And today, we’ve worked with over 250 brands who have generated over 30 million in email sales. And the thing is we’ve sold practically anything in frankly any niche, all the way from stuff in the adult industry gadgets, clothing, beauty products, products in the Japanese market, products in Europe, products in the USA. We’ve gone through a lot, even like Israel and some other Middle East countries. So we’ve done a lot that you can do with email marketing for e-commerce. So we’ve been in a lot of accounts, we know and we see what works, and that’s what we’re here to share with you.
Guillaume: Awesome. So let’s dive right in. So lessons from working with multiple eight figures e-commerce brands, what’s lesson number one?
Reinis: Yeah. I’ll dive specifically into email marketing. We have a bunch of clients who are doing eight figures in sales and sometimes we see brands that are maybe at six-figure mark that are trying to get the seven-figure mark and from seven to eight figures. The biggest thing that I’ve found is that a brand cannot scale if your offer is not dialed in. I was actually having a conversation with my friends this week in digital, it’s not a Roth agency and specifically they see for brands that can spend up to $500k a month on ads need to have at least three offers running, like three different offers for three different audiences and a lot of times that’s the main way you can really scale these brands. We see brands being stuck at maybe $5-6 million a year because they do have product market fit, they’ve scaled enough that they hit the ceiling but they can’t scale any further because their offer is not great enough, it’s not possibly broad enough. They might only have one offer for one segment of the audience but then as you scale and expand you can broaden the horizon. This also taps into email marketing which is what we do.
Typically for these eight-figure brands and even low to high seven-figure brands offers and email really worked well together because you have acquisition offers which are used for a new audience to capture people’s data, get them to trust the brand and purchase from the brand and then we have retention offers. That’s something that we’re separating and that way we can get the best performance on acquisition and retention as well.
Guillaume: Right. So you’re saying you have product market fit maybe you’ll scale to like 5-6 millions or something but if you want to add another five 6 million you might need to add another marketing persona, a typical customer to who you’re selling, so you can have that second offer and then the third one, and you’re saying that big brands with like half a million per month of spending at least have three or four offers like these to different type of marketing persona?
Reinis: It might be a different service persona, it might be different products entirely, it could be different prices for the same persona. There are some brands which can scale very very high with one product, but they typically see challenges later down the line, for example, Oura ring, or the brand that sells the ball trimmers? I forgot their name. They have the lawn mower for 4.0, whatever, their hands are everywhere. This, when you sell just a product which can be purchased once, you have no retention, you get to sell and that’s it.
Guillaume: Yeah, you have no cross selling also going on there. So if you have like a one trick pony in a way, you don’t have cross selling and then you’re not building a whole ecosystem, like Apple is building a whole ecosystem of bringing you to the next product.
Reinis: Yeah, exactly. And what these brands do that have one product in their shop they typically turn to some sort of subscription off or other retention offers, for example, Oura ring, they have their ring which helps you track sleep for around 350 bucks and then they have a $5 a month subscription which helps them get the recurring revenue through the customer. Because obviously getting one person to buy products for 300 bucks is cool but as you scale the CPAs are going to continue to rise.
Guillaume: Okay, cost per acquisition, CPA. We have a second lesson that you’re sharing about the products offering, the structure and having potentially recurring revenue. Most brands in e-commerce do have a lot of products, I’ve rarely seen brands with just ‘one hit wonder’ kind of product, there are some. Then they’re wondering what’s the next ‘one hit wonder’ they can create and ideally create a whole ecosystem but this is very rare. Most shops have like 2000 to 40,000 products and larger ones may have over 100,000 SKUs. So what’s the next lesson that you have learned?
Reinis: Yeah. The reason why we’re in email marketing is that retention is the hidden magic to everything in the shop. The most challenging part of the journey of your e-commerce shop is the acquisition, getting the customer to buy from you, getting the customer to trust you. And once you have that you can really squeeze a lot through retention. Right now we’re working together with a shoe company that does around a million a month in revenue, and for them they’re trying to exit. We’re helping them increase their multiple, increase their profitability with emails. Because what we see these larger brands doing is, the bigger lists you have the more traffic you have on your site, the more you can optimize that traffic. And the way you typically scale a brand is not just by spending more money in the ad account and just increasing the spend that way but it’s by adding multiple marketing channels, which is email marketing, which is optimizations through CRO on landing page, which is, for example, retargeting through different platforms. So if your primary platform is Google or Facebook, you supplement that with retargeting through native ads, retargeting through YouTube, Facebook, etc, and also hopping on Amazon for that extra spill off. So that’s lesson two we see which is pretty massive.
Guillaume: Okay, so adding more marketing channels totally makes sense. Once you have that one working well it’s time to add more of those. And also retention because it will increase your customer satisfaction because one of the key ways you’ll work on retention is increasing customer satisfaction and having the proper pipeline in the back and then it increases your multiples for your company’s valuation, which is great, regardless if it’s investors or to sell out. All pretty good.
Reinis: Yeah, but there’s kind of a caveat because typically, when you’re starting out, when you’re under that 3 million a year mark, focusing on one or a few channels might be better for you. Because the issue that a lot of people have is that they might be doing $600k a month or $600k a year and then they try to do everything and they spend themselves too thin because they don’t have enough money to hire media buyers in different channels, or hire proper agencies. So from what we’re seeing I believe that you might not really have the proper product market fit unless you’re at a million a year in revenue. Because then you still have a lot of optimization you can squeeze through the ad account and that’s really getting the most results out of it but then as you scale and as you grow you really need to add those channels into it.
Guillaume: Yeah, I agree with you. You can easily get to 1 million a year with just one marketing channel, you can get up to 3 million with one or two channels that are working really well. And if they’re not working that well then you might need more channels that aren’t all not working that well but that’s not ideal. You probably want to get things to work really well and just have like one or two channels and then you can add more channels to scale past the 3 million.
Reinis: Yeah, simple scales really.
Guillaume: Agreed. Anything else? Any other lessons to share?
Reinis: I guess we can dive deeper into emails, which is where our expertise is at. We have a lot of friends and clients who do media buying and whatnot but we’re focused on email marketing. So the biggest thing of which we see for the brands who are doing over, I’d say, 3 million a year, the biggest opportunity you have, is 1% optimizations. For a brand, let’s say, if you do 1 million revenue a month, each 1% optimization can help you generate 10k extra and over the year that’s 120k in extra sales. Which really adds up and if, for example, you’re at the eight-figure mark you might be considering selling your business. Adding that to your EBITA could be massive for your profitability. And the way we typically do that is with number one, email marketing flows, these are behaviorally based automations, just to simplify them. So if someone goes to the site and they do a specific thing we’re able to follow up with them and retarget them and send them specific emails. We actually had a funny story with a client recently, they have four brands which they run and for one of the brands they’re launching a few new products. And then we had the founder selling me something like, ‘Hey, Reinis, I got this email about this product but it never added it to a cart’. I checked out the email, but it was a browser abandonment email. It’s basically something where if someone goes to the site and looks at the product page and leaves, we’re able to send them a message asking them to come back to the site and buy the product again. And once I explained it to them, they were like, this is pretty cool.
We had explained that to them previously but obviously the founder is doing a bunch of different things so some things just go by him. So doing stuff like that and sending emails there is very powerful. So typically, the setup we have is a welcome series, abandoned checkout, which is for people that abandoned checkout, pretty straightforward. Add to cart, the add to cart is for people who go to the product page tap the ‘Add to Cart’ button but don’t end up going to the ‘Checkout’. Browse abandonment, which is what I just mentioned is for people that go to the site and look at the product page and leave. And site abandonment is for people that go to the site but don’t look at any specific product pages. These are typically the flows which happen with the acquisitions when getting the sale, and then what you previously touched upon as well as customer satisfaction. So once someone places an order we have specific email flows, like for example, thank you in a bounce back flow where we make sure we set the right expectations for when the price is going to arrive. We show complementary products as well for the client, or try to upsell and cross sell them the different products as well.
Guillaume: It’s interesting that you’re separating the checkout abandonment email versus the add to cart email. So have you seen results from doing this? Very often it’s sort of simplified, especially with someone starting to implement that stuff into just a single email. It’s more like, ‘Hey, you added it to the cart but you didn’t buy it, we’re going to send you an email regardless if you started the checkout process or not.
Reinis: If they started the checkout process they don’t get that email. If they didn’t start the checkout process but just added the product to the cart, they get the email itself. But it’s something that I like to call a 1% optimization, it’s only going to help you generate 30% more sales, for example, with those few emails we can have in that email flow. What it is going to do is it might generate $5000-10,000, and extra sales a month where if you don’t have that you might not be able to capture those sales. That’s free money, especially at scale. I don’t recommend creating as deep of a setup if you have a brand that does less than a million a year because then your biggest leverage is paid ads but as you start to scale and as it gets more traffic you’re going to really start focusing on these small micro-optimizations. And just by adding that flow in you could add one, two, three, percent to your top line.
Guillaume: Yeah, paid ads and building your list and product market fits pretty much came to the first million. And then that’s still valid later on, but the focus is really to the first million.
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Guillaume: Anything else you’d like to share on this topic? Or are we wrapping this up?
Reinis: No, the flip side of this is email marketing campaigns, which is kind of like running ads. And by this I mean, we decide what message we send to the person and when we send it to them. In the same sense it’s a bit different than running ads. The reason why I say it’s similar it’s because it’s behaviorally three, disruption-based marketing, so a kind of push marketing. We can showcase a person’s offer or a specific product or set of products and push them to that direction. And especially if someone is selling consumable products, this works really well. Last week on Saturday, that’s the week before Black Friday, we had sent out an email for the Early Bird signup list. So this is for the consumable products selling food syrups in Europe. And for them we collect the emails of 4000 people and we generate 145,000 in email sales with that one email. We had done this previously and last year as well for another cosmetics brand with 136k euros with one email. I need to check all the accounts, we have like 68 accounts. I need to check right now to see what results we were getting as well.
But for these kinds of brands, again, this is massive because if you have a consumable brand like they do, the guys that sell the food syrup, their margins are razor thin if everything they focus on is acquisition. This one email, the cost to send out that email, the Klaviyo subscription might be, if I’m not mistaken, like one $1,000-2,000 a month for them. And for them to generate that money it’s basically all pure profit except the cost of goods, you have no ad spend calculated into that, you don’t have to pay Gmail to have your emails seen. It’s really just the Klaviyo subscription, you writing the email or someone writing the email for you and that’s it. So that’s a really good way we’ve seen to drive sales, drive traffic to your site and convert them into sales. And typically by combining these two things together we can see an uplift in sales of up to 30% per month, which is quite significant.
Guillaume: You have quite a significant list as well, if you’re paying $1000-2000 on Klaviyo, because a list of 100,000 people will cost you about $1500 a month. So you have significant leverage with that list. Okay, do you want to expand more on this strategy that you just shared with us about those kinds of launches?
Reinis: Yeah. We recently did a speech on that in Dubai. The way we structure this is specifically for Q4s or product launches. But the way we run the structure is, instead of just sending one email or just do a launch and that’s it, our Black Friday started in October, so we started preparing, firstly, we re-engaged old customers. So you might have an email list of 100,000 people, but 40,000 might not be active. And by active I mean, actively opening emails and clicking emails. So what we did is we re-engage those people and gave them an option to click the email, click the link and get back into the engaged segment so that they can get access to the Black Friday sales, or they cannot subscribe, as simple as that. Then we had a couple of tactical emails where we had the warm up email, this one’s actually pretty cool. We make the people reply to the email we send so our ‘sent from’ emails are saved as a contact in their Gmail. So then what that means for them is that all the upcoming messages we send, they skip the promotions folder and go straight in their primary inbox, so we have better open rates and better results in general. So that was the first phase of engagement.
Then we had the warm up, which I quickly touched upon. Where we also had the best seller educational campaigns where we send out emails that talk about the best sellers in a non-salesy way. Like we explain, why are they important, how can they help, etc, with no real intention to push them or sell them on the product. Then we delved into the presale. So the way we like to structure these pre-sales is we have a landing page where people can sign up and commit and raise their hand saying, ‘Yes, I’m ready to purchase’. These pre-sale pages are pretty simple. They consist of four main sections. So section one is just the header, we have some sort of an image of the product and an opt in with a headline. The headline is the primary lever for lowering the CPL, Cost Per Lead. Then we have a ‘Benefits section’ talking about why they should sign up for this Early Bird’s list. It’s a timeline on when they can expect to, for example, receive the product. So in the case for Black Friday and Cyber Monday sales, on the 19th if they sign up they get access to Black Friday sales early and they get better deals than if they wouldn’t sign up. Then afterwards the section is just a proof section with testimonials and showcasing happy customers as well.
And really once someone signs up they get added to a specific email list which is the Black Friday Early Bird’s list and then we send out messages to those people. The list size might not be huge but to pack up a punch. We had another company selling personalized baby posters. So they sell posters the size of newborns and whatnot. And for them, each email we generated cost around $1-2 and each email we generated generated $10 in sales for Black Friday. So that’s also a great way to acquire new customers, get them into your brand and get them to place an order and place a big order upfront. Because the deals we have for Black Friday aren’t just, ‘Hey, let’s get you know, 30% off’. We also pre-package bundles. Like bundles that might be instead of your AOV being $70, you might have bundles that are $250, $300, $500, or something massive like a large package. Like if you’re in the survival niche, for example, you could have three types of bundles, like the basic kit where you have some sort of a tent, a flashlight, and maybe a knife, something basic for you to get started.
Then the advanced setup could be more expensive. That’s kind of like you are buying for the bulk setup, where you get everything from the basic setup plus some extras. Then have the most expensive bundle which is just all out, like everything you might need and more. Because there are people who like to get the fewest things to kind of get started, there are people who want to get the best value which the middle bundle is for and then there are people who just like to spend money and go all out to max out. That’s kind of how I am, if I look at something and I want to commit to it, for example, I have an audio setup, I don’t want to have just a basic mic. I’m going to go all out and get really top of the line stuff. So if you’re selling to me you can show me that bundle and you can make more money off me instead of maybe 70 bucks, you can make 500.
Guillaume: Right. So personas again. You said Black Friday starts in October and you also have Halloween in October, so how early in October do you start your Black Friday stuff?
Reinis: First of October. We also do a Halloween sale but really just because our strategy consists of the re-engagement phase, warmer phase, and the sale phase. So we didn’t start the sale itself in October, the preparation starts on October 1st. So really, the emails are right and everything is right, everything starts in September. And the planning for Black Friday starts in August.
Guillaume: Yeah, you start your planning in August, that’s good. That’s something we need to get in the mind of the brands, a lot of brands think like that and some of them just call last minute. So they need to start early in the day to have the time to do great work and not just rush it all at the end. At which frequency do you email this list about Black Friday?
Reinis: In November we sent 40 email campaigns. So the Black Friday week we’re doing two emails a day. So it’s very, very aggressive because the relative frequency of your emails is lower, meaning if you’re, for example, like typically the average standard for a month the emails sent are around 12 campaigns a month.
Guillaume: The final campaign, is that one email sent or they are multiple?
Reinis: That’s a newsletter.
Guillaume: So one email sending is one campaign for you. A campaign is not a multiple?
Reinis: Yeah, it’s one email.
Reinis: Then in November we bump it up to 40. Because if you were to send 12, like brands that don’t even ever send out the emails that decide to send out the emails in Black Friday. So everyone’s inboxes are packed. Like, I’m even subscribed to a couple of email lists we send emails from, like from some of our clients. I know when the emails are going out but I just don’t see them in my inbox because they’re just buried. That’s why we do two emails a day because I might not see the first one but I do see the second one. Like yesterday for a brand selling electronics, we saw one email that generated I think 100 sales, the first email that was sent at 9am and then the email that was sent after, generated 125. So if I had sent out one email for 100 sales, cool. And by me sending out the second one, I doubled the amount of revenue that we generated.
Guillaume: Did you notice any kind of increase in ‘unsubscribe’ because they’re just annoyed with receiving that much?
Reinis: Again, relative visibility decreases so they don’t even really see the increase in frequency. It might spike a little bit but it’s worth the extra revenue.
Guillaume: Okay. Pretty cool. Any last thoughts to share about this campaigning system; you get in touch, you send them a lot of emails, you warm it up a lot, you don’t sell that first, you just educate and then you start sales on your next Black Friday. Any last thought to share about the system?
Reinis: This is a topic that we can go very, very in depth on, like the speech we had was 30 minutes and still it felt like we could talk for hours. I think the best answer is we need to look at each brand specifically, because different brands like to get the most value out of this. Different brands have different sets of products, different setups, etc., which would change what works best for them. What bundles work, what strategy works, because in some cases you just might want to keep it simple and just have a flat discount sitewide. Or if you’re a luxury brand you might not want to discount at all. We have a brand that’s selling its customers that want to buy but that have private jets and multiple houses. For them ‘No discounts’ felt like the strategy wouldn’t work at all and it shouldn’t be done. It would work but it shouldn’t be done because they need to keep their high status in the luxury market like with no discounts or with the products being very, very personalized and exclusive. So I guess if someone’s interested you can get in touch with me. Hop on a call and see how that could have worked for you?
Guillaume: What is the best way to reach you Reinis?
Reinis: Yeah, agencyjr.com/call. So agency J as in Jacob, R as in Reinis and we’ll be able to hop on.
Guillaume: All right, thank you Reinis for being here today.
Reinis: Yeah, happy to be on.