Ben: Yeah it’s a great question, so I have a technical background and I just I grew up in a house with two entrepreneurs both my Parents had been running their own small businesses, neither of which was eCommerce but I just got a good feel for how these small businesses are adopting technology. This was already 6-7 years ago.
So, you know build me a website, what’s Facebook? What’s email? What’s Google ads? Those are the types of questions that my parents would bounce off of me and I started to just kind of see a trend is that every small business is very different and unique and their stories are different but their challenges kind of line up and very parallel when it comes to marketing, and so much of it is centered around this kind of overlapping playbook that’s about a bringing an audience to your site, which is kind of the focal point of your brand, converting that audience into either a lead or a customer and then building that audience into a loyal customer base that comes back again and again.
And so, it started with like the pain points that I saw my parents having around, the need for self-serve tools that were easy to use, that were inspiring and that leveraged data to help them move faster and in turn this model.
And we kind of started the business with a focus on small business but we quickly realized that it was eCommerce entrepreneurs that really saw the value in, you know, as a channel, and over time we just realized we could differentiate and solve those pain points in the eCommerce use case.
Nathan: Right, and so when you were starting out was email always the focus or were you originally creating very different tools to help ease these stores? And then also just give us a timeline in terms of when were you guys first starting Privy?
Ben: Great questions! So, I think we incorporated in like 2012, and the original thesis was centered around promotion so it was going to be a self-serve software products that simplified the process of creating promotions that you control and distributing those to an audience.
And we wanted it to be IT free, right, so you as a business owner can do it without hiring an agency. And what we realized was, promotions were great, but the reason our early users were loving the product was it helped them build email relationships faster than they ever had before.
And so, it took us a while to figure that out but especially as we kind of work more and more with ecommerce brands and business owners, we realized the ROI of email is so clear that we decided to change the messaging and the focus and the roadmap to hone in on list growth as our wedge into the market with a free offering, and that really didn’t happen until 2015.
Nathan: And so once you came up with this free offering, you know, I want to kind of dive into the eCommerce mindset of an entrepreneur and say look, you know, let’s say I’m just starting out my store, we’re starting to do, you know, a few thousand dollars a month, what have been some of the best practices that you’ve seen on Privy that entrepreneurs especially in the ecommerce world are utilizing. Is it like a buy-one-get-one type of offer? What are some of those high-converting email grabs that you see often used?
Ben: Yeah I think there’s really two areas within the marketing funnel that we speak to and coach to, and this is really centered around the data sits we see from all the sites that use Privy, and I think nine out of ten ecommerce sites will say “Yes I think email important” and they’ll slap up a generic pop-up that really is not targeted and hits everyone.
And that might work and that’s ok, but what we would say is you need to think about your onsite conversion strategy in line with your funnel. So let’s think about the top of the funnel. What we might recommend is target first time visitors to your site with some small incentive for opting into your list.
We know that it might take a couple touches before you can drive that through a sale either through email or a look-alike audience or retargeting whatever it is. So, whatever you can do to convert more of that traffic at the top of your funnel, we would recommend “Joining our list and we’ll reveal a code for a 5% off” and I’m just kind of speaking in broad terms. That’s something that can be highly effective at the top of the funnel.
What we’re seeing is other use cases that are hugely valuable in terms of using a display or a pop up or whatever you want to call it, at the bottom of the funnel too, where you’re being more sophisticated with who you’re targeting and what you’re offering, and the perfect example of this is, we see time and time again that cart abandonment is on everyone’s mind. And when someone is– let’s say they’ve added 20 bucks to their cart. They start on the cart page, now if you’re on Shopify, certainly you move to the checkout page in the checkout flow, and at that point there’s no higher intent customer than that and so the typical model today is like, “Oh let’s let them leave the site, let’s let them abandon the cart, let’s let them wait an hour and let’s trigger the abandon cart email when they’ve already left the site.” Our view is like, look if someone’s that far down your funnel, why don’t you get them while they’re exiting your checkout with an offer before they’ve actually left the site as that last ditch effort. So at the bottom of the funnel we’re seeing that you can use these sort of email capture concepts and overlays to actually save 10% of carts before they ever leave the site.
Nathan: And that’s kind of that exit-intent dynamic in terms of that cart abandonment, is that correct?
Ben: Yeah, we really think of the world like it’s technology, so there are so many different ways to skin this cat but usually when you’re crafting a campaign in our world we think about it as, you have a message in a design and you pair that with a group of people that’s targeted and action that they take on the site right. So, a pop-up might look nice in the brand and offer five percent off but that’s used for different use cases if it’s targeted to people who are, who have over $100 in their cart versus are here for the first time, have nothing in the cart and have never purchased before.
What we’re finding is simply removing the friction of what it takes to become a lead of your brand is helpful as long as you’re crafting a nice user experience for the customer. All these other additional targeted scenarios you can open up that really can help you solve major business problems quickly without spending tens of thousands of dollars on agencies and CROs in the traditional sense.
Nathan: Really and so through you know a tool like Privy, are you able to track sales completely through the platform? Like let’s say someone lands on my site, a first time visitor, they sign up for my email list and I send them an abandoned cart offer through email and then they check out through Shopify and I track that conversion. I remember 5 years ago when I started my first eCommerce company, it was always challenging for me to track that whole conversion rate.
I think nowadays you have to be sort of numbers driven in the eCommerce world that knowing you can track that funnel is so vital. So is it easy to set up through Privy? I mean is that one of the solutions that you guys have there?
Ben: Yeah, I mean we’ve spent basically $2 million of our investor money over the last 2 years to build integrations with every single platform on the eCommerce side and on the ESP side for these exact reasons.
So, let’s say you use Shopify and Mailchimp and you add the Privy app to Shopify, all of that attribution and tracking around who is viewing these offers, who’s signing up and who’s completing purchase as a result is all streamlined and automated.
Nathan: That’s amazing. I want to also dive into some specific case studies or customer success stories that you guys have. I mean I can only imagine with 250,000 stores that use Privy that you have to have some incredible insight into the way people are utilizing email and email captures to grow revenue, and so do you have any specific examples that you can share in terms of how someone has really sparked growth just through the use of these email tools?
Ben: Totally, I mean sometimes we take a step back and look at the scale of the network and the benefit of the freemium model is that we do collect a lot of this data across the network, scales massive, we see billions of consumers every month now, you know, millions of opt-ins across different offer types, targeting rules, display formats, so I think there’s a ton there.
A couple that come to mind quickly, we were recently working with a client that was converting like 1% of traffic into leads, which is a meaningful amount of traffic right so maybe a thousand visitors a month. And they came to us and they said, “Hey, we love the product, we love the reporting and the attribution, can you help us understand the lever’s on how to get these numbers up? With one hundred thousand visitors, every percent matters and what we saw was that we could just coach them through the process of like, on-mobile, let’s segregate these audiences and treat mobile differently than desktop.
Let’s look at your abandonment flows and so if your average order value is $50, let’s target people who are abandoning cart with a less than average order value with a small offer not those that have 3x. average order value and abandoning cart, let’s really do a lot more and be a lot more aggressive to save those, and what we saw was, very quickly, like in a matter of 2 months, we were able to reduce cart abandonment by 15%. And increase at the top of the funnel from 1% to close to 10% of traffic opting-in to subscribers.
And this is someone that had already invested a lot of money into their email automation so every new subscriber that we’re bringing in is still high quality through the targeting, but it’s almost helping them do two things: driving more revenue immediately but it’s also helping them drive more revenue through the prior investment in the flows that they’ve built out.
Nathan: That’s awesome. I want to touch briefly one, because I see a lot of kind of interesting data that people say about colors, or you know different kind of little schemes on email pop-ups, in like “oh the color of my button increased my conversion by 10%.” I mean is that true? Do you see data reflecting in little specifics, like can color increase conversion that high?
Ben: Yeah, it’s a great question and every year we pull a data set and publish this stuff. What we found most recently was that there’s a series of leavers that carry the most impact on conversion rate and I’ll kind of walk through the top ones.
The first one hands down is, is there an offer and what’s the offer? I hate to say it but if you have a beautiful pop-up that just says, “Join our email list” I can tell you with a high level of confidence that I think you’ll convert about 1% of traffic. If you think about a specific incentive like a “Join our email list and get” And you’re getting like a 5%-10% code, we’d expect conversion rates probably around 5%-10%.
And then if you kind of do this like “Enter to win” concept like a sweepstakes or a spin-to-win concept, I expect probably 15%-30% to convert. So I think hands down the number one lever for a conversion is the offer.
The second is the display type, a pop-up versus a little fly out versus those bars that you’ve seen, these things matter but I put that second.
And then the third is the visual, I think the border of magnitude in terms of impact that the offer definitely outweighs red button versus blue. But I think it’s probably more prudent when it comes to design testing to strip out as much text as possible and focus on making sure that if someone only glimpses at this display on the site, how quickly can they extract the offer that you’re giving. So subtle things, like on the button, instead of saying “Sign up” If you’re running an offer saying “Reveal code now” Those little nuances can definitely have an impact. More so than we’ve seen like a red versus blue button.
Nathan: Makes sense and I also want to tie this all into the traffic sources. I know with Mark Zuckerberg’s new update on Facebook in terms of how he’s trying to cut down on some of the spam that’s going through some of these Facebook ads, what do you see the future being as some of the main and best practices to drive traffic to ecommerce stores?
I mean I think it’s pretty obvious that your traffic source is going to have a big impact on your conversion rate, and so with Facebook becoming more expensive, some adwords are extremely pricey on a CPC basis, what do you see as a future for these traffic sources? I mean where do you think that whole world is heading with Facebook becoming more expensive?
Ben: Yeah, I think what it’s going to do, I don’t think you’re going to see people running away from that channel. I think that you’re going to see people getting more sophisticated about clearly understanding the different components of their marketing funnel.
And so, whereas today you see a lot of chatter and energy spent on like, “I want to optimize my Facebook ads” I think what you’ll probably see is like “I need to understand which are the best channels for driving new visitors to my site” and then below that, you’ll see, “I need to understand once I’ve driven a visitor to my site, what are the best channels to nurture that person down my funnel?” and I still think that Facebook will play a big role in both of those, and the value of email here probably will continue to grow. I do think that you’ll just see people, rather than thinking they can drive someone to the site and transact in that first visit, they’ll understand that it’s going to take more touches and gets smarter about where to spend their time and money inside that funnel.
Nathan: Got it, that’s awesome. So last question just wrapping up here, I’ve got to ask as an entrepreneur yourself who has dealt with so many different economies businesses, if you’re going to go ahead and start your ecommerce store tomorrow, completely new store, what would your approach be? How would you grow it? Walk us through your process in terms of “How am I going to take this business to 6-7 figures and more?
Ben: That’s a really, really good question and I think that, whether you’re doing this for eCommerce, or you’re like you or me starting a SAS or technology business, rather than look for the right niche or the right dropshipping product, I would think about “What am I truly passionate about? What service or what differentiates me? What am I excited about? Who do I want to solve a problem for?” and I think start out your journey with that passion. Then even as competition comes up or challenges come up or channels come and go, you will carry on and figure out a way to get it done. What I see in eCommerce that I think will change probably soon is, a lot of folks coming to eCommerce without that passion and they’re more interested in figuring out the dropship model and there’s all this competition and you’ve never seen your product, I think that that will really just kind of crumble at some point, so I think it’s the people that are truly passionate about, whether it’s your handknit sweaters or the product that you’re manufacturing through Sourcify; when you go through that process and you’re really passionate about that one thing, those are the businesses that are going to excel because even the techniques that Privy can add or Sourcify can help with or Mailchimp can help with, those all are worthless if the entrepreneur is not passionate about what they’re trying to bring into the world.
Nathan: 100% I think you hit the nail on the head there, I mean it also enables these entrepreneurs to evolve their own story in the products, whereas if you’re just dropshipping a product you don’t even know how it’s made necessarily, you have not invested in the product.
So, I think that insight is incredible. Ben thank you so much for coming on eCommerce On Tap. If the audience wants to reach you on Privy, how can they contact you?
Ben: Yeah, they would just go to privy.com or you can reach out to me directly, ben@privy.com
Nathan: Awesome, Ben, thank you so much, it’s been a pleasure.
Ben: Thanks Nathan!