In this episode of Add To Cart, we are joined by Sabri Suby, founder and head of growth at King Kong
Sabri launched King Kong in 2014 as a $50 venture from his bedroom in Byron Bay. The now global business is one of Australia’s fastest growing companies and was valued at $72m last year. In this chat Sabri shares the metrics that matter most and how to use them, tips on when and when not to use an agency like his, his minimum GP and AOVs for ecommerce businesses he’s involved in and the brand that gave him the best unboxing experience of his life. We even get to go behind the scenes in a Shark Tank deal he did with one of our previous Add To Cart guests.
“A campaign is a good story with multiple different hooks in it”
Sabri Suby
Upskill or agency?
“I think it comes down to where your competitive advantage lies and where your skillset lies because in the beginning, if you’re passionate about sales and marketing and that’s the thing that you really want to do and it’s not a hugely overly complex business to run, other than getting the sales and the marketing dialed in, I think that educating yourself and getting a knowledge base is really important for everybody in the beginning, because if you’re bringing an employee in and you’re building an internal team or you’re hiring an agency, you need to know enough to be dangerous, right? You need to know enough to know if somebody’s bullshitting or they don’t know their stuff and to understand these platforms, the limitations and their metrics.
I think that as a very bare understanding, you wanna look at yourself as like a T-shaped individual and understand a little bit about email, a little bit about paid traffic, a little bit about SEO, a little bit about conversion rate optimization, and then go deep in one.
Even these massive brands have some of the best marketers in the world. And they have so much money, they have endless money to build internal teams. These people still hire agencies because they understand that it’s not like either or like it’s both, like the game is won by getting the most talented people.”
Most important metrics
“I would definitely say what the CPA is, what the AOV is and what the LTV are. They’re like the three metrics that are going to really tell you what the health is of the business.
Obviously it’s all dependent on what the product is that you’re selling. LTV is going to dramatically vary, selling protein powder versus you’re selling anti-aging cream or acne cream or you’re selling massage chairs or mattresses in a box. So typically the golden rules that we look for is that you need to be selling something that has got a gross margin of more than 70 percent. You need enough margin on there to cover those CAC costs, right? And you ultimately want to be profitable, if not break even on day one.
The average order value needs to be $70 or more so that the net dollar amount on that 70% margin is enough to cover that CAC because the CAC is, depending on what you’re selling, is going to hover anywhere between like 20, 30, 40 bucks, right? It all depends again on what it is that you’re selling or they also go out the window, right? In terms of needing to have those two prerequisites if you’re selling something that has an AOV of over 500 bucks. If you’re making an AOV of $500 or more, obviously even if that, it’s not 70% gross margin, even if it’s lower, there’s still gonna be enough to basically cover the CAC.”
The difference between a story and a campaign
“I think that story is the underlying skill and that can be constantly used in multiple different campaigns, right? And really a campaign is realistically just a good story with multiple different hooks in it.
So typically the way that I structure them, if you’ve seen my ads that run all around the internet, is that there’s one under arc story that you’re telling in whatever that ad is. And then I test multiple different hooks into that one story.
So when I was just getting started, I didn’t really know that strategy and I would just basically create a campaign, put all of my eggs in that basket and then just pray to the internet gods that thing pulled its head off and it was a success. Now I know better and my model now is I shoot the one campaign and then I might shoot 20 different hooks. And I’ll run that ad with multiple different hooks and vary it and then do different edits of the best ones to find out what works and what doesn’t.”
Links from the episode
- King Kong
- Condoms and Quiz Shows: The Get Down Story | #218
- Last Crumb
- Shopify Plus (sponsored)
- Signet (sponsored)
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