Guillaume: Hello everyone, Guillaume Le Tual here, host of the E-commerce Wizards Podcast where I feature top leaders in E-commerce and business. Today’s guest is Steve Chou. I’m very excited actually to have Steve here on podcast, because I’ve listened to a few of his episodes on his own podcast from “My wife quit her job,” over 400 episodes in there. It’s really good stuff, I really appreciate it. I believe that we share several values, he doesn’t know yet but I know a little bit more as I listened to your episode. Today we’re going to be talking about an E-commerce store going from brick and mortar, being a traditional merchant and going online, because there’s no guarantee of success whatsoever with this process. It’s just too common unfortunately that you start an online store, you list your products and that thing just doesn’t go anywhere. I’ve seen it too many times and I’ve seen other stores, of course, going from zero to seven figures in a matter of a few years and a few more years going all the way to eight figures. It’s a topic that’s really worth talking about. That transition from brick and mortar to online and how do you make this a success because it’s not guaranteed.
Before we get started, we have a sponsorship message. This episode is brought to you by MageMontreal. If a business wants a powerful E-commerce online store that will increase their sales or to move piled up dormant inventory to free up cash reserves, or to automate business processes to gain efficiency and reduce human processing errors, our company, MageMontreal can do that. We’ve been helping E-commerce stores for over a decade. Here’s the catch. We’re specialized and only work on the Adobe Magento platform. We do everything Magento related, if you know someone who needs design, development, maintenance, training, support, we got their back. Email our team, support@magemontreal or go to magemontreal.com. All right, Steve, thank you for being here today.
Steve Chou: Glad to be here. I’m just going to say that if you are on Magento, you’re going to need help, so you’re going to need MageMontreal.
Steve Chou: I worked with Magento before, it’s complicated.
Guillaume: It’s made more for the mid-sized markets and the larger companies. Some people don’t know that, and they make the mistake of buying a $99 theme, thinking it’s for small businesses. It’s not that at all. Steve, can you tell us a little bit about yourself, before we start?
Steve Chou: Yeah. I got started in E-commerce way back in 2007. This was before Shopify and BigCommerce were a huge thing. I think that the biggest card at the time was Yahoo merchant stores, I don’t know if you remember those.
Guillaume: I do.
Steve Chou: But the reason why we started selling online is because my wife wanted to quit her job when we had our first child. I know you just delivered a child five weeks ago.
Guillaume: Yes, a second one.
Steve Chou: My wife just wanted to stay at home, she didn’t want to work anymore. We live in the Silicon Valley, a very expensive place to live if you want to get a good house in a good school district. We needed to look for other sources of income and we decided to sell handkerchiefs online, which is kind of a random story in itself. Bottom line, we made six figures in our first year of profits so she could quit her job and then today it’s a seven figure business. It’s been growing the double digits and triple digits ever since then.
Guillaume: Awesome. Congratulations. Very nice success story and definitely if you take time to read all of Steve’s stuff on his website, he’s a high level subject matter expert, I will definitely say that for everything E-commerce. Let’s dive into it. You know, if you were just to ask a consultant on a high level, how do you go from brick and mortar to online? They may tell you, do a Google ad campaign, do a Facebook ad campaign and pray that it works. That’s not good enough.
Steve Chou: There’s a number of things. I’ve worked with a lot of brick and mortar stores who want to go online. I think their first instinct is to just throw up everything on a site and just let it go. If you already have a brick and mortar store that you’ve been working on for a very long time, or you’ve run, chances are you have a customer list. You have order and contact information. Again, for the people that have purchased from you in the past, if you have the information, the first thing I would do is, I would see how many email addresses that I have. Then I would send them an email that says, “Hey, we know you purchased this from us in the past, and we really appreciate your business. Would you like to receive offers via email?” You didn’t explicitly get their consent in the beginning so that first email basically has to ask for their consent to send the photo emails. For why you’re doing so, it doesn’t help to just give them a coupon at the same time. Basically, take advantage and move those brick and mortar people over to your online store where you have their information, you can track them much more accurately. That’s the first thing that I would do.
Guillaume: Which is a very great advice. And I’ve also seen some other special kinds of ways of building lists like this, back when the days of the law passed, for anti-spam and all that, a company was doing like win with a friend kind of drop. This way, you refer a friend and you win with your friends. So either you or your friend win, you both win, and then it just like, snowballs their list of contact this way.
Steve Chou: You know what else I would do? I would take all their purchase history because you have that somewhere in the database hidden somewhere. And I will create a loyalty program and just automatically include all the purchases they have made in the past and say, hey, you’ve accumulated this number of points, you’re eligible for something free, it can be something really cheap just to get them all over online. And again, these are just different ways to get them to opt in. So if they’ve already purchased from you, just hopefully you have all that data somewhere.
Guillaume: Hopefully yes, let’s assume it is structured enough that you do. Maybe if it’s just like a cash checkout, like the grocery store there’s no data. But let’s hope that you’re…
Steve Chou: I would imagine these days, like I can’t remember the last time I used cash actually, at a store.
Guillaume: Before COVID at least.
Steve Chou: Yeah.
Guillaume: For sure.
Steve Chou: Yeah
Guillaume: Okay, so that’s a good start, you have your list that’s solicited that list and there’s do a few tactics and try to be creative on how to make that interesting, and those value for the people from your online store, or that they accept at least. You have very different laws in Canada versus the US. Like in the US, it’s an opt out system. So, you’re sort of “allowed to spam people” and they have to opt out.
Steve Chou: It’s not exactly like that. But, it’s much more relaxed unlike the EU.
Guillaume: Yeah, exactly, Canada has close laws to the EU that you must have expressed consent and all that. So it’s very different.
Steve Chou: Yeah. I was going to take that one step further. Once you have them by email, then I would try to get them by SMS also.
Steve Chou: And again, they have to consent to that. Here is what we do with our store. The way we get people on SMS, is we actually just give away something for free. Usually we go to our vendor, so we sell linens at our store. We’ll go to our vendor, we’ll say, hey, do you have anything on clearance, that you might have excess stock on for really low prices? And we’ll buy that just to give those away for free. And it’s funny, like the perceived value of a free product is really high, even though it might cost you very little money. So for example, our freebie is a free handkerchief, we sell handkerchiefs, and it costs us 15 cents. But the perceived value of that handkerchief is like $10, right? And so we just say hey, text this word to this number, and we’ll give you a free handkerchief and then again, instantly you have people on email and SMS.
Guillaume: Excellent. That’s really good advice and cost effective. I like that.
Steve Chou: Now, so we’re talking about brick and mortar over online, right? The other key to going online is you have to realize you’re not going to have sales people on the floor to help people. So traditionally, at a brick and mortar store you walk in, if you have any questions you ask a salesperson directly. And there’s a lot of information that’s conveyed in a physical conversation at a brick and mortar store, which does not exist online. But, if you’ve been running a brick and mortar store for quite some time now, you know what people’s pain points are right, when they buy certain merchandise because you have had that. It’s much easier, actually ironic to go from brick and mortar to online because you’ve already had those conversations.
Guillaume: You understand your customers.
Steve Chou: Right. You understand your customers already so your life is a lot easier. The tricky part is taking all that information on all the products that you’ve sold over the years, and putting that down in a concise manner on your online store. So it can’t just be a listing of products. Let me give you an example. Let’s say you sell children’s clothing and let’s say, because you just had a kid I’ll use this example. And you’re looking for a shirt that fits a two year old. Well, a common question that you might get asked is, at a brick and mortar store, they can touch and feel the shirt. But online they have no idea what the sizing is. And I don’t know how this works because where I used to shop for children’s clothes, it’s all based on age but you know there’s different size kids at any given age. So a common question I might get asked is, will this fit my two year old? So on your online store, you should make sure like… I saw this done really well at this store I was shopping at. They literally had pictures of kids and their heights, wearing the shirt on every product page to avoid this problem.
Guillaume: Which is really good. It shows real life examples, and the second best thing to that also or complimentary to this, is that, they have the measurements on, sometimes the manufacturer will not give that to you. And you need to invest a bit of time in graphic design to come up with the shirt and then you say what are the sizes and what’s the small, what’s medium, what’s a large and it should fit someone with shoulders of this many inches, typically, and so on. You must have the person to make a purchasing decision online with all the data that they need.
Steve Chou: But even measurements are no good because do you have a ruler on you at all times? Like this site did really well, they had pictures of different body types of kids like tall, skinny,
Guillaume: Which is awesome. It’s way better. Measurement is the basic thing. It’s the first level, but you can upgrade to what you just said.
Steve Chou: Yeah. But the point is that you might be used to being able to talk to your customer person or brick and mortar store. But online, you have to be the one who is proactively giving out the information that a customer might be looking for, because they can’t touch and feel the product.
Guillaume: I’ve seen some merchants sort of dump their inventory online, let’s say 40,000 products or something like that. And it’s not necessarily a very high quality listing. I’m curious to have your opinion on that.
Steve Chou: Assuming that they’re running both a brick and mortar store and an online store or just transitioning?
Guillaume: Let’s say that they want to keep the brick and mortar and they want to expand their business, but online.
Steve Chou: I’m always of the philosophy that, whatever you do, no matter what it is online or brick and mortar, you should do a good job of it, right? So, I would definitely not just dump 40,000 products there. What I would do is I would probably pick my best highest margin products at first, do a really good job on listing all the things that we just talked about in terms of the value propositions and list those in a special category, and then just kind of gradually expand. You might think that dumping 40,000 products is the right thing to do because you might attract search engine traffic or whatever. But what ends up happening is no one’s able to find anything online.
Guillaume: Or even if they do find, will they buy from you if you’re competent, or did a great job at the listing. And let’s say he specified the voltage and the amps or whatever in some electrical product or something, and you don’t give that specification. If you’re not sure what you’re buying, you’re not going to buy it, you’re going to buy it from the website that’s specified that this is compatible. It’s not going to blow up when I plug it in the wall, you know?
Steve Chou: Yes.
Guillaume: So, I agree with you on this should be quality listing, quality over quantity in this approach.
Steve Chou: How you organize the products really matters as well, like I can’t even imagine 40,000 products, that just blows my mind. How would you even organize that because people get paralyzed by too many choices. This happens at a brick and mortar store as well. You want to help do their job for them, and tell them what to buy. We sell linens for weddings. People often call us up on the phone and I’ve answered a couple of these calls from clueless guys who need to buy a gift for their wife or something like that. And they just like, just tell me what to buy, like, I don’t even care, just tell me what to get. And so I just steer them over to our highest margin products that sell really well. The same goes right, just imagine that you’re clueless. A lot of people who shop online are kind of clueless when they’re just doing the research part, right? So, you need to point out what they should buy. 40,000 products is just like, can you imagine sorting through all those products? You’ll have analysis paralysis.
Guillaume: Yeah, for sure. It’s a different type of business, but I do believe it’s generally speaking a mistake on this. They have a different strategy that they just want to have some kind of online catalog that will support an offline sales force or something like that. Those are different strategies and goals. But if the goal is really online transactional revenue growth, it’s the wrong approach. It shouldn’t be the way to go.
Steve Chou: Not to mention that, I’m not affiliated with MageMontreal at all, but if you have Magento, and you have 40,000 products to buy your site down too.
Guillaume: You’re going to need technical help for sure.
Steve Chou: Yeah, you need technical help.
Guillaume: That’s for sure. Magento in general, you need a programmer, like even Adobe’s moving the platform in that direction. Do you remove, let’s say, the ability for a merchant to do upgrades or add plugins themselves, you need to do it through the version control software, mainline stuff like that. So they’re gearing it more and more towards the higher end market, midsize and enterprise sized companies.
Steve Chou: Yeah. The other challenge for moving from brick and mortar to online also is just the way you get customers in the door. Typically, when you’re in a brick and mortar store, it’s all about location. Where’s the foot traffic coming in, and that sort of thing. Branding and stuff’s important, but location plays a huge part of it, because people have to physically drive there. In the online world, you have to really do a good job of figuring out what your value props are, and being able to convey that to a customer when you advertise. There’s different avenues. I don’t know where you want to go with this Guillaume.
Guillaume: Let’s explore anything that comes to mind because it’s all useful, it’s going to help somebody somewhere in the world.
Steve Chou: There’s a number of different ways to get traffic and I was just thinking about the traffic sources for my store, there’s social media, there’s SEO, there’s just word of mouth. Word of mouth is I guess straightforward, and then there’s paid advertising. Now, if you’re brand new, and you just launched your online store, you’re not going to be ranking in search. You might have word of mouth, since you’re coming from a brick and mortar store. But generally, paid ads are the best way to just kind of jumpstart your store. And depending on what you sell, the two most popular ad platforms are Google and Facebook. If people are actively searching for your products, and your search terms aren’t that competitive then Google can be a great way to advertise your store. In fact, if you’re going the Google route, I would start with Google Shopping. For our store, at least, and many of the students in my course, it’s the highest converting ad for them. Because you get to see where one may type in a search, which already has search intent, they get to see a picture as well as the price. So if they are clicking on your ad, there’s a high probability that they’re in the market to buy whatever product that you have. That’s why Google Ads work so well, but they don’t work so well if no one’s searching for your product. Let’s say you invented something that no one else knows about. Google Ads is not a good option for you. I was going to say that the amount of traffic and sales that you get from Google is limited by the number of people typing in that search term in Google search. So it’s high converting traffic, but there’s a ceiling on how much traffic.
Guillaume: Exactly, a very good point, each keyword to target that sort of fundamental, that’s important because we’re covering fundamentals here. And if you succeed or fail very often in that position, it will be because of a fundamental mistake. You need to get the foundation right to build this thing. And what do you think about Facebook traffic these days?
Steve Chou: Facebook, so at the time of this recording, iOS 14 has been out, and it’s basically hurting the reporting. I don’t want to get in the weeds on that, but there’s other ways to attribute sales to Facebook, irregardless of that, Facebook is a great way to reach a large group of customers. But the problem with Facebook is that your creativity is extremely important. Like a great creative, can drive sales, no matter what and in the type of product that you want to advertise on Facebook. And again, it depends on the type of product. When people are on Facebook or Instagram, they’re catching up with friends, looking at cat videos, and that sort of thing. So you have to interrupt them, and show them something enticing to make them actually want to click. So if you saw something boring, like office supplies, it might be hard to create that excitement for a click. So, Facebook ads are good if you have a really good value proposition. I’ll give you an example. I almost never buy from Facebook personally. But I saw this ad for a portable pull up bar that you could take on vacation because I do a lot of pull ups. I just like pull ups. If I don’t do them for a couple of days I feel weird. But whenever I go on vacation, sometimes I can’t locate a pull up bar. And there’s this video that literally had all my problems in that video ad. It said hey, do you love doing pull ups when you travel, but you can’t find a pull up bar? We have the solution for you. And it showed a picture of this really cool device and I bought it on the spot.
Guillaume: You put it in the doorframe or something?
Steve Chou: You put in the doorframe, that’s correct. And it’s portable, like it fits in a suitcase.
Guillaume: Really cool.
Steve Chou: So again, those are your two options there. Maybe we’re even jumping ahead of ourselves, right? Before you even run any ads, you have to make sure that your website is in order. I run a class and sometimes people come in with a store already. And they’re like, hey, this online stuff isn’t working. How am I going to get sales? I’ve driven traffic, I paid for traffic, and it’s just not converting and then I look at the site. And it’s literally just the listing of products. We’ve talked about some of these concepts already but as soon as someone lands on your site, it’s not like a brick and mortar store. You have to tell them exactly what you sell, why they should buy and what your value propositions are. Like front and center. The attention span of someone online is super low. I can’t remember the exact stat, maybe you know it at the top of your head.
Guillaume: I’ve heard it just goes down each year. A few years back they were saying like eight seconds, I think now it’s down to like three or four or five.
Steve Chou: I was going to say it’s around three to five seconds.
Guillaume: Yeah, it’s somewhere around that. You really don’t have much time. So first of all, your site needs to load fast. Then it has to be clear with yourself, otherwise, you just hit the back button and where that site is, I don’t get it. One mistake I’ve seen with people when creating sites, it’s not all about the design, it’s about communicating clearly. So, you may have a beautiful website that does not communicate clearly and does not convert. I’ve seen another site, I was extremely surprised when I first saw it, the Cobra dot site, it was incredibly ugly, but it was a solid seven figure a year site already. What’s going on here? No Google ad, no whatever. Okay, there was a strong offline presence, which helped with word of mouth and knowing of the brand. But their value proposition was, they nailed it. I mean, they really nailed it. I cannot say too much about it, but it was perfect. When you arrive on the homepage, you understand and, if you’re the target market, you say yes right away, and that was it. You mentioned this already, the value proposition has to be clear, as much as possible, not just to be another me too product.
Steve Chou: Yeah. I’m trying to rack my brain right now for some of the common mistakes I see. The other one is too many different things to click on. In an ideal world, when you design your website, every single page should have just one goal, and that’s it. You should make that goal, where you want people to click on some color that really stands out. On our site, all the action buttons are hot pink. You can’t miss them. Choosing your colors matters too right? I mean, if you think about it, you want your action buttons to stand out. You also want to use a different color to highlight any deals or where you want people to draw their eye, and anything else outside of that one target action on that page should fade into the background. It should be less emphasized.
Guillaume: Totally agree. If we’re talking about common mistakes, here’s another one. I’ve seen a lot of people putting too much budget into design or the mechanics of the website, building a ton of features and not keeping enough budget for their marketing and promotion. Ideally, your promotional budget is bigger than your bill budget. The bigger it is, the marketing and ads and all that, the better. Of course, people have limits and their finances, but if you have $100,000, don’t put $100,000 on the website, and then you’re left with no gas to drive the thing.
Steve Chou: Absolutely. I’ve seen so many people give up on ads because their website isn’t ready to go. I mean, yes, I would invest enough to make sure that it’s up to snuff and trustworthy. The other mistake that I see and we talked about it already, is the conversion rate. The average conversion rate I think across the board is like 2%. Which means that you’re losing 98% of your customers every time they come in on average. In order to run an effective online store, you need to be able to get their information so you can bring them back up. This happens all the time. You know that pull up bar place, the first time I saw the ad, I actually didn’t click on it. The second time was when I bought it immediately. The first time I saw it I went like that’s cool. I think I was in the car then. I was probably driving which is really bad by the way, you should never drive and browse. I put it down and then I forgot about it. I forgot about the company but I knew I wanted the product. This is very common when people are shopping on your site. You want to at least be able to grab their email or SMS or something. Messenger, push or whatever it is. If you don’t have that in place, you’re leaving a lot of money on the table.
Guillaume: I totally agree there. You need to give them an incentive, typically do-care and why should I give my email? Just put a subscription box in the footer that says, enter your email to sign up for my newsletter. While people say I don’t want one more spam email in my inbox, give me a reason. Typically an incentive, at least 10% if possible, 15% the one time usage coupon, I’ve seen that work. Especially if the person is already considering buying from your store. I just enter my email and I get 15% off, really? I see my wife doing it then yes sure. If you give me 15% off, I was going to buy it. This way, you’re allowed to follow up with this customer and you’re going to lose customers at every step of the funnel until the checkout. You may have people who add the cart but will not complete the transaction. Very often these people, you don’t have their email yet they have not created an account. So at least, if they’ve subscribed to get that coupon, it’s one way to get them. Otherwise there are more advanced techniques. If the person did login, then you can send them an automated email for abandoned cart recovery. You put the rule after one day, two day, whatever, send them an email, say. “Hey. You started to purchase and you didn’t finish, and would you have a coupon code or not to finish the transactions?”
Steve Chou: My philosophy in general is what I call the, ‘wear them down policy’. I’ll give you an example, sometimes I’ll sign up for a list but I don’t have the intention to buy right now. For example, I’m planning to buy a gift for my wife, but it’s not time yet. I just want to remember this store so I’ll enter my email. But oftentimes I’ll forget about that store. When you’re running an email list, you want to be regularly emailing your customer at least once a week I would say. They might not be ready to buy right now, but once they are, you want them to immediately think about your store. I think that’s how I got my wife, I just kept asking her out until she totally agreed. I mean, wear them down over time, right?
Guillaume: Great story and now you have a family with two kids.
Steve Chou: What else is there to talk about, that common mistake? We kind of alluded to this already. But once you get that customer, the likelihood of getting them back is extremely high. Too many people spend too much money on getting new customers and not focus on their existing ones. I have a really good story to tell about my store. As I mentioned earlier, we sell products in the wedding industry. Now you would think that if you sell products in the wedding industry, you would just make one sale, and then you’d be done. I mean, the divorce rate is high in the US, I don’t know what it is in Canada. But the chances of getting repeat business you would think will be slim, but one day I randomly decided to check our repeat business. I think I just listened to a podcast or something and I was surprised that our repeat business rate was 12%, which is on the low side for a traditional store. But I was shocked to learn that that 12% makes up over 50% of our revenue. And the reason why, is because we were attracting all these event planners and wedding planners who were buying from us in bulk, and then making purchases for all their clients.
Steve Chou: Because of that piece of data that we kind of stumbled upon. You guys should always be looking at your repeat business because when we find someone that orders an abnormally large amount of product now, we reach out to them and say. ”Hey, we noticed you bought a lot of products, are you a planner?” If so, we’ll give you a dedicated representative. “Here’s a custom coupon code, anytime you want to make a purchase, let us know what you need.” And we’ll assign someone to make sure that those products reach that event or wedding in time. And that’s how we’ve established this large customer base that buys from us regularly.
Guillaume: Pretty good. We’re moving, this is not typical as a business to consumer, almost business to business because you have another one.
Steve Chou: Businesses to business
Guillaume: Business buying from you in a regular way but didn’t have a witness ready to identify them because if they’re buying for just one wedding, is the same purchase the first purchase the same size as anybody else’s wedding.
Steve Chou: Yeah. All these principles about running a brick and mortar store apply online too. I mean, if you were running a brick and mortar store and someone bought 20X the amount that a typical person would buy, you have to register and you’re the owner. And you’d probably ask, why do you need all this stuff?
Guillaume: Exactly. It’s good. Yeah, you get to know your customer and you’re doing some segmentation. I have my regular one time purchaser in the limelight. My b2b purchaser will do repeat business. You could even have two newsletters or one separate for each of those, once you’re tagged as a b2b or stuff like that.
Steve Chou: Here’s what’s funny, as soon as people go online, they are afraid to talk to people in person. They kind of hide behind ads, or emails or whatever. You should run your online store like a brick and mortar, ironically. Pick up the phone. When we launch new products, my wife actually doesn’t like it when I do this. But if someone abandons their cart, you can have an abandoned cart email set in place. It’ll automatically do that for you. But if it’s a new product that we just launched, I’ll call them. I’ll say, “Hey, we noticed that you attempted to checkout but didn’t finish the process. And we just wanted your feedback on the product that you had in the cart, and why decided not to buy.” And I’ll say, “Don’t worry, no matter what, we’ll just give you the product for free. But we would just love your feedback.” And this is what I learned. Several years ago, we launched aprons and it was the same issue talked about earlier. We targeted our aprons for ages two to six, and then from six to 10. We had the measurements on the site. The main objection was, “I don’t know if this is going to fit my daughter?” So we made some adjustments on that. But that piece of information was priceless. It could only be obtained by actually talking to them, because this particular customer wasn’t going to email me that problem.
Guillaume: Right. And if you send surveys, which you should, most people won’t reply.
Steve Chou:That’s great
Guillaume: You’re not going to get all the information that you need. Regardless which technique or tactic you use, you need to get to know your customer, get to know their objections and get to know why this product is popular or not popular. I’ve seen the same kind of approach with let’s say, people having Facebook groups and then trying to have feedback. Which one is the best design to print on the next shirt? And stuff like that. Then people vote and then you sort of know that you have a winner before you even produce it because people overwhelmingly said that this design was the best one and in this way you are more sure when you invest in producing that batch that you know there’s going to be a success.
Steve Chou: Yeah, I mean there’s just so many little things that when you go online you just kind of forget about. It’s really painful to pick up the phone and call someone cold. My wife would never do it, but Ijust trained myself to do these uncomfortable things and they work.
Guillaume:It makes a difference but you can imagine a larger company doing it. Sometimes we may say large companies have the corporate ways and not as human, but they have a lot of systems and processes in place which small business owners would benefit or replicate or at least to some degree to sample a little bit. Like they will do customer surveys, they will try to understand better than our customers. And that is applicable no matter the size of the business.
Steve Chou: Right, absolutely
Guillaume: Once we’ll be big enough, then we’ll question our customers with surveys or we’ll ask them, but then you can start doing that right away. You don’t need to be a big corporation to put that in your process.
Steve Chou: Absolutely.
Guillaume: So many small things, it’s probably more of an addition of a lot of small things that makes it work more than one big thing avoiding many tribes, doing a lot of things right, building traffic, having a list, being able to source a date that lists regularly. I’ll be curious if you agree with this also. You said to source it down at least once a week for an email. I believe if anybody gets annoyed by my email, just unsubscribe. I’m not going to hold back from talking a lot to my list. Just talk a lot with them. Try to build rapport and if they don’t like it they can unsubscribe. You better have a smaller core of highly engaged people and then large lists that you barely dare to disturb.
Steve Chou: Absolutely yeah. I mean that’s just something that I’ve come to learn because I’m cheap. It costs money to keep people on a list, if they don’t want your emails because you’re paying for them. So why pay for these people if they’re not buying?
Guillaume: Okay, good point, not how I learned it. Good point indeed. What about trying to drive traffic to decide with other techniques than the paid ads stuff? What about forum posts or trying Facebook groups? Is it worth your time? Should you do it? How much of It?
Steve Chou: It all just depends on what your niche is. I just had this really cool person on my podcast recently, a 16 year old girl. She sells opossum pins. Do you know the animal named opossum?
Steve Chou: You would not think that there are people who just love opossum so much that they’re willing to buy all these opossum merchandise. She did not spend any money on advertising. What she did is she looked for Facebook groups for opossum lovers.
Steve Chou: Then she found these groups and I was shocked when she showed them to me. There’s one group that had over 100,000 members opossum lovers. Amazing, right? She’s kind of like an artist and she was going to sell these pins and she just posted a piece of art that just said.”Hey, I’m thinking about putting this design on some merchandise. What do you think of the design? I know you guys are all opossum lovers. I really want your honest opinion.” She didn’t try to sell anything. And then she got all this feedback like “Oh, I love it. I love it. I love it. I would totally love to buy a shirt with this on it or like a pin.” and then she was like, “Huh, Okay, tell you what? Give me like a couple days and I’ll post one of these examples up.” And then she posted a picture and she said, “Hey, what do you think of this?” Then people responded. “Hey, I want to buy that.” And then she casually steered them over to her Etsy store where she sold them. Today she makes $1,000 a month and she’s a 16-year-old kid.
Guillaume: Which is awesome. Most kids would love that. It’s way better than working at McDonald’s.
Steve Chou: Then she did something even smarter. She went to all those people and she thanked each and every person who bought publicly on the group. That stirred up another thread of people, “Oh, what do you think of them for,” and then she started giving away samples of her next design. Then she did what you suggested earlier, she’s like. “Hey, I want your input into my next design.” People contributed their opinions. She incorporated those and because those people made suggestions, they felt psychologically obligated to buy her next design.
Guillaume: I do believe the future is going toward that, to have two-way communications than have one-way communication. That’s like the big brands. “oh, we have designers, we’re amazing. We’re gonna set the trends or something.” And we publish this and we don’t ask opinions and people should buy that because it’s a very different position. Now you’re having an honest conversation, you’re asking for honest feedback, and you’re building a connection and rapport with these people,it’s soft selling, and it’s validation before you even do the production. Are people interested in this or not? Then some people may be just too nice and say yes, it’s great. But when it comes time to buy they might not buy, but at least, you know, you’re more likely to be on the right track, if you ask for feedback and have a two-way conversation. Any other techniques other than advertising that you’ve seen some of your students or yourself that work?
Steve Chou: Here’s something that always works. I’m a big believer of word of mouth. It’s not easily measurable. Word of mouth really travels fast, when you do something that’s out of the ordinary. It doesn’t have to be majorly out of the ordinary. Here’s an example of what we do. If someone so much as has any complaint about anything, we just let them keep the product, and we give them a refund. Without business also,we go out of our way, just like these little things, these little stories that end up blowing up. One time, someone had a wedding, but it was local to our house. She needed them the next day, but at the time, there’s no way we could deliver it the same day. What we did is we stitched it out this handkerchief, and then we drove it over to the venue. What most people don’t realize is that when someone has a positive experience, they tell their friends. But when they have a negative experience, they also tell like nine or 10 friends about it, too. Word of mouth is just an exponential thing. A lot of our customers come in through word of mouth also, in addition to the advertising.
Guillaume: Yeah, and it’s more difficult because when somebody is angry, he’s very likely to give you a one star and post a bad review. But for somebody to give you that positive glowing review, you need to go a little bit out of your way, like you’ve done here, and that’s exceptional customer service, which is really great.
Steve Chou: She told all of her bridesmaids. I think I know at least one of them had purchased it from us after they got married. I mean, it just kind of snowballs over time. It’s like a long game.
Guillaume: Yeah, because then you see, “oh, my friend had that thing at their wedding and it was fun, I want to have the same as well”. For that element because they plan their wedding, so it’s an interesting long game plan there. There are some other elements for example, in your own setup, you offer personalization. So you have to some degree, a defensive wall around your business. If somebody else wants to sell the same product that you’re selling, they would have to offer personalization, let’s say in a smaller startup or people just listing products online, like just listing handkerchiefs online. It’s not nearly as interesting as your offer, because you offer personalization. You have a differentiation factor and labor on it. When you receive it with your name on something, it makes a huge difference. At my wedding, everybody had their glasses with their name on it. And everybody wanted to keep it and bring it home and so on because there’s their name on it. We do the same thing at the company. Everybody has their name on their company mug
Steve Chou: Oh, cool.
Guillaume: This way, we don’t screw up those mugs, but everybody brings it home. There’s sentimental value just because there’s your name on it.
Steve Chou: Yeah
Guillaume: So it’s one interesting point I think.
Steve Chou: I’m actually a big believer in high barriers to entry. The harder it is for you to do, the harder it is for other people to copy. That’s why you should do things that are harder or that require more legwork.
Guillaume: I totally back that up. Of course, be careful not to try to get more than you can chew. That effort that you can go for it or go in steps if you’re starting out. Do a phase one that’s really functional or, for example, the client wants to offer four payment methods. Do we really need the extra delays of having four payment methods to launch the website? Your first one is perfectly functional to process credit cards. Then we could offer the second and third and the fourth one as a phase two. When you do a phased approach like this before you go live or before you release, just make sure that whatever you do it’s done really well. But you can remove features and bells and whistles, then do a real phase two. The other thing that I’ve noticed is, start phase two right after, back to back with phase one. If you leave a gap in between everybody starts to forget the project, then you get busy and understaffed. And then the entrepreneur does the phase like two years later.
Steve Chou: Yeah.
Guillaume: So we’re approaching the top of the hour here. It’s just like a shotgun question. Is there anything else that comes to mind that could help a merchant transition from brick and mortar to online?
Steve Chou: The best thing I can say is take everything that you learn from the brick and mortar, and try to do it online. Don’t forget about the human component. Treat your online store, just like a brick and mortar. You wouldn’t just slap on 40,000 products in your brick and mortar on random shelves? Everything would be nicely categorized, and logical. You would naturally place items on the shelves in a certain way so that your best sellers are more prominent, it’s the same exact thing online. As long as you translate your experience over, you should do just as well as your brick and mortar store, if not, most likely better.
Guillaume: I agree with that and I’ll back you on it. I’ve seen some traditional merchants being a bit intimidated by all they had to learn with the internet marketing industry. It’s a huge topic and you can rely on consultants to guide you in a general way. It is still the same as you do for brick and mortar. How do you drive traffic to your brick and mortar store? You do ads? Well, guess what? Let’s do ads for the websites and you can kind of help also to treat the website. It just happens that this is a virtual store, but to give it the same level of care, planning, budget, advertising, and so on, and take it seriously and it will help to make this a success.
Guillaume: All right, Steve. Thank you for being here today.
Steve Chou: Thanks for having me.
Guillaume: And if people want to find you, how did they do this?
Steve Chou: The easiest way to find me is to go over to MyWifeQuitHerJob.com. I have a mini course, whether you’re a beginner, advanced, E-commerce seller. I also run an annual E- commerce event called The Sellers Summit. In the event that you guys are getting married, I can hook you up with some handkerchiefs over @bumblebeelinens.com, which is my store.
Guillaume: Awesome. Well, thank you Steve.
Steve Chou: Thank you.