Mark Baartse: Bullshit. You're a data driven marketer. You are not a data driven marketer, you're a moron. Okay? It's gone through companies, this cultural thing, this idea that marketing is a slot machine and you put a dollar in and 30 days later you get $8 out. How do you get to a point where you don't need to buy traffic at all and you just become the preferred brand of choice? And I do this for companies and we see the metrics move and it's so exciting when I do that.
[Voiceover]: Welcome to ADD to Cart, Australia's leading e commerce podcast that express delivers all you need to know in the fast of online retail. Every week, Nathan Bush from E Suite and an e commerce industry expert will share the news, research and insights that you need to know to keep you at the top of your game and of course, keep your customers adding to Cart.
Nathan Bush: Hello and welcome to Add to Cart. My name is Nathan Bush, host of Add to Cart and director at E commerce talent agency eSweet. Today's guest is the James Bond of marketing. Don't worry, no spoilers. You call him in when you've got a problem to solve and you need
Nathan Bush: the best in the business.
Nathan Bush: Mark Bartzer is, in his own words, the outsourced chief marketing officer.
Nathan Bush: Before consulting, Mark led the growth for
Nathan Bush: leading fashion brand Showpo back when they were a smaller fashion brand. Much smaller, and has worked with clients including catch, Menulog and Officeworks. He's been awarded the top 50 CMOs, top 50 people in E commerce and he's a regular contributor to publications like Rag Trader and Inside Retail. I wanted to get Mark on today so I could pick his brains on behalf of you and for free.
Nathan Bush: Kind of.
Nathan Bush: I wanted to focus in on performance
Nathan Bush: marketing because while it's not Mark's only
Nathan Bush: focus, he's a well rounded cmo. Ladies and gentlemen, I know it's a point of agitation and confusion for many
Nathan Bush: of you right now.
Nathan Bush: Hopefully there's a few nuggets in here which either subside your fears or help you make changes to your business. We also touch on customer lifetime value, how to use performance channels for branding and getting yourself into the shoes of customers. Like for real, not into the shoes, but actually getting in touch with customers. Before I get into today's episode, I want to let you know that enrollments for E Suites E commerce accelerator are now open. If you're looking to get into E comm or take your career to the next level, come and join in. Classes commence March 22nd and and you can sign up at learn.esweettalent.com au all right, let's get into it. Thanks to our partners, Shopify plus and Signet. Here's our conversation with Mark Bartzer from Mark Bartzer Consulting. Mark, welcome to ADD to cart.
Mark Baartse: Hey, Nathan, good to see you again.
Nathan Bush: We've been talking about having this conversation for a long time and I put
Nathan Bush: up on LinkedIn a call out for
Nathan Bush: who I should have on the show in 2022.
Nathan Bush: Your name, I think from memory got the most votes. But then I also had a couple
Nathan Bush: of your clients say, don't interview him because we don't want him giving away secrets.
Mark Baartse: Oh, man. Yeah. So you're my dirty stark secrets.
Nathan Bush: That's right. We're here to dig your secrets out.
Mark Baartse: Yeah, a lot of it's magic. You need some eye of newt and different things in there. And Yeah, I mean, I don't know. I don't think I have anything about secret. I think a lot of what I do is actually pretty boring. You know, it's. I mean, a lot of what I do is about helping people with marketing maturity. I kind of say, okay, you're this and so you're not, you know, you're at step A, you're not ready for step Z. But how do we get you to be or see your D? Yeah, and that varies a lot from company to company. You know, like I'm working in one company whose budgeting is atrocious and so they're spending money where they shouldn't be spending money and that's, you know, that kills performance. And you know, another company where they don't know how to use their own data. And you know, I'm doing a pricing strategy project at the moment, which is really fun. I'd like to do more of them trying to figure out how much we should be selling the products for. Doing a lot of stuff around lifetime value, around customer insights and brand strategies. So it's really, really diverse, but it's what's right. And often doing multiple of those things for one given company.
Nathan Bush: Yeah. And as a fly in CMO for many, especially e commerce brands in Australia, are there any problems that you find yourself continually solving over and over and over again?
Mark Baartse: Oh, yeah, yeah, yeah, there is. Budgeting is a really common one. Most people don't have really good discipline around budgeting and particularly for a lot of companies is forecasting. I'll give you an example. As a company I work with, they were doing a budgeting basis basically just looking at the last two weeks sales, which is working okay for them. But then what happened is this sale event happened in the US market in this case, which they weren't ready for. And by the time the event was over, that was like two weeks and they missed it completely because they hadn't done their forecasting properly and they probably left a couple of million dollars on the table because of that. And that's the sort of stuff I'm trying to prevent. Another thing is that people are really, really obsessed with just buying traffic. Just buy traffic, buy traffic, buy traffic, buy traffic. And look, that's good, it's a way to grow. But you know, there's only so much traffic you can buy. You know, it just starts getting expensive and more and more pricey. And so how do you convert that traffic? How do you, how do you increase the lifetime value of your customers? How do you increase average order value? But then how do you get to a point where you don't need to buy traffic at all and you just become the preferred brand of choice? And that's where it really starts going. And I do this for companies and we see the metrics move and it's so exciting when I do that.
Nathan Bush: Now you're talking that magic, now you're talking that stuff.
Nathan Bush: Just on the budgeting piece, quick question
Nathan Bush: on that because we are diving into performance marketing today. That's where our conversation is going to be around. But on the budgeting thing, obviously, Covid, we've had ups and downs and we're all over the place, especially with supply chain. What's your approach to forecasting in an environment like this?
Mark Baartse: I got to admit, it's a nightmare at the moment and I wish I had some magic formula for forecasting. Covid, I don't. It's just a matter of being really, really adaptable. But a good, well set up budgeting process can pivot really quickly. But no, I wish over the last two years because some companies I work for, I actually do the forecasting for them. Not all, but a few. And yeah, at the moment it's just sticking your finger in there and making educated guess. Particularly as we were going in and out of lockdown, which for most companies lockdown was a good thing revenue wise. So yeah, yeah, yeah.
Nathan Bush: Cool. So there's no magic formula. It's just staying on top of it and being flexible. Yeah.
Mark Baartse: I think in some cases I was looking at where Victoria had their big early lockdown. I was kind of and New South Wales going lockdown. I kind of looked for what was the impact on Victoria and then did some forecast to project for New South Wales. But forecasting is ultimately backward looking.
Nathan Bush: Yeah, cool. All right, let's get into the performance marketing because it is a topic that is right at the heart of many of our listeners. We get so many questions around the state of performance marketing, especially with all
Nathan Bush: the changes happening and what we are
Nathan Bush: seeing around the decline of roi, for lack of a better word, on channels like Facebook and Insta. So what's your view on the landscape of performance marketing at the moment?
Mark Baartse: Yeah, I mean I'll start off with. I don't call myself a performance marketer. I mean I certainly do a lot of performance marketing but I think that's like saying I'm a hammer carpenter or you know, I'm a, you know, it just doesn't make sense. It's like, you know, marketing is a full discipline and anyone who focuses, anyone. I don't, I don't even like the term digital marketer because it just doesn't make sense. It's like, you know, I've got a bus campaign in market at the moment and for that company at that time. No, I mean I am a marketer who works with digitally LED companies and usually digital is the best answer, but not always. And so, you know, I've run TV campaigns around bus ads. It's like, you know, whatever. And marketing's a lot more than that as well. Like pricing, that's marking. I'm working this pricing strategy project that's marking. But performance marketing. So what was the actual question just
Nathan Bush: on that point, do you think because it's at E suite, it's one of the most in demand skills at the moment. We get from clients. We want someone to come in who can be in house because we've outgrown our agency. Want someone in house who has a performance marketing specialist. Do you think we need performance marketing specialists or should every marketer be able to work their way around performance marketing?
Mark Baartse: Yeah, I know exactly. I talk to companies as well and they say, they give you these job descriptions and say oh, and you look at it and maybe you want someone who's a complete agency in one person. You must get those job descriptions through surely. And you know that they're just not going to do all the model. They're just not. And that's fine in a perfect world. I think every marketer should be a full stack marketer. I think reality that's probably not going to happen. I do think every CMO should be a full stack marketer though. I think that's important because there's so Many different levers to pull from diving into the data, to doing brand strategy, to working with PR companies or in house PR and then looking at Google Ads and that sort of stuff. And if you're a CMO of a company who doesn't understand all those leaders pretty well, I would question your ability to manage them properly.
Nathan Bush: Sustainability and ethics lie at the heart of everything that Australian cosmetics brand Adorn Cosmetics does. And this extends to their packaging. They've used eco friendly packaging since 2013, but when their orders went up to the next level, they needed a sustainable solution that could keep up with them. That's when they discovered Signet's Giami wrap pack system. It's helped them reduce packaging costs by 54% and cut paper waste by 50%. That equates to 40,000 meters of paper saved every year. No doubt that's something to Adorn. Signet has over 5,500 packaging solutions that help leading e commerce retailers like Adorn Cosmetics step up their packaging game. Visit signet.netau to find out more. That's signet.net au.
Nathan Bush: As a cmo, how deep do you have to go in your knowledge, especially around things that can get pretty complicated like performance?
Mark Baartse: The deeper the better. You know, like I'm strong on some things and I'm weaker on other things, but there's no major channel I don't understand. And you know, there's some where I could work as a practitioner in several I could work as a practitioner in. But you know, sometimes, you know, people approach me and say, oh, you know, can you just run a Google Ads for us, Mark? And it's like, I can, sure, I can run Google Ads, but I also can introduce you to someone who can do it better than me, cheaper than me. And so I spend a lot of my time doing introductions to the right people and it's just not, it's not just about the skill, it's about the culture, about. Well, I mean this is what you do for a living, right? It's about the culture fit. It's not just about, oh, this agency in this company are a fit. It's, you know what I'm saying? It's the right culture, the right fit, the right approach, the right pricing model, all those things. Yeah.
Nathan Bush: So there's still a role for specialists, but at the CMO level and those leadership levels, you've got to actually get your hands dirty and know your shit around performance marketing about all elements of marketing.
Mark Baartse: I think so, yeah, I believe so. And not everyone agrees with me on that.
Nathan Bush: So what is happening in the world of performance?
Nathan Bush: We've obviously seen cookies come in, we've seen changes in the way Facebook and Insta are returning. New channels coming through. Do you still think it's a viable
Nathan Bush: channel for E commerce businesses, especially dtc?
Mark Baartse: Yeah, it is. It just requires a bit more, you know, I think we had like this, I don't know, we used to term loosely but this golden age where you know, it was, it was very easy to do. And one of the downsides to that is we have this entire cohort of marketers, people who do call themselves digital marketers, who bought up and they only have this one very simplistic way of looking at the world and basically they just say if I can buy and if the tool reports a positive roas, then I have succeeded in my goals. That's it. They have no understanding about the measurement, the attribution, reward implications about lifetime value, about all those things. And they just say, you know, that is. So I'll give you an example company I was working, there's like two or three markers in that company. Who are those sorts of people? You know, probably mid, late 20s, bought up in digital. That's the only view of the world they have. And so their Facebook campaign was running, this is probably early last year I think it was. They were getting about 7, 8 to 1 on Facebook. So every dollar they spent making $7 back as reported by Facebook and so they were budgeting based on that. And then what happened? I think it was trying to remember middle of last year, but before the whole kind of Apple thing might have been the year before when Facebook changed their measurement from being 28 day post click to 7 day post click. And this company was like slightly more expensive products, had a slightly longer buying cycle. And so they saw their numbers drop like 20, 30% overnight when Facebook made this change and they were freaking out saying oh, we should spend less on Facebook, we should spend less on Facebook. It's like your customer behavior hasn't changed at all. There's not a single person who's saying, well I'm past the seven day attribution window, I can't buy anymore. Right, it doesn't work. But yet that's how they were thinking because that's the only way they have in the world what the tool tells them. And even prior to that there were people buying beyond 28 days because it's the sort of product, it's a luxury product and it's sort of thing that people are just going to look at and then Buy a month, two, three, six months later.
Nathan Bush: And do you think that's because that ROI number, whether it's seven, eight times or more, has become so entrenched in businesses beyond the marketing team, into CFOs and all sorts throughout the business that
Nathan Bush: any change in that spells panic stations.
Mark Baartse: That's exactly it. Yeah, I think so. There's two problems here. One is that people value accuracy over reliability. So these tools can tell you you've got a 7.28 times return. It's not a reliable number, but they can very accurately report the wrong thing. And people like that, they're seduced by accuracy. Whereas I could get you another tool like I had a meeting this morning with a company and we figured out using other tools and other approaches, that the approach was like, you know, returning 7 to 900%. It's not as accurate or precise, but it's very reliable. And I can tell you absolutely guarantee this is not returning less than 700%, but, you know, competing against something, you know, that's doing 623.5%, it doesn't look as good. So that's one. And then the other one is that's, it's, as you said with CFOs, it's kind of, it's gone through companies, this cultural thing, this, this idea that marketing is a slot machine and you put a dollar in and 30 days later you get $8 out. If that's what you don't want to do as a living. That's not what marketing is.
Nathan Bush: It's a nice idea, isn't it?
Mark Baartse: Sure. And to some extent it did work for a few years. But those days, even two, three years ago, we're at a heyday of this. It was kind of somewhat working, but even then it was imperfect. And it's just becoming less and less perfect as well, with cookies dying and the measurement problems. And it's going to be an interesting time for a lot of companies.
Nathan Bush: So what's your approach to measuring performance? Marketing? Because I'm so interested from a bunch of levels here around where you're drawing the data from, because you mentioned there around reported by Facebook, the tools that you're using and the metrics that you're looking at. Is ROAS still a thing? So there's a lot of questions bundled up in there. Let's start with what metrics are you looking at to report return from performance?
Mark Baartse: Yeah. Okay. I'm going to answer your question directly. So what I get asked a lot is people say what attribution model should I use Mark. And it's like, hang on, it's not even the right question. It's like marketing as a discipline has been around for, let's say, 100 years, give or take, depending on when you define the start of it. And attribution as a discipline has been around for 10 or 15 years. So there was like 80 or 90 years of marketing with no attribution. And we're kind of look back, they were doing okay for themselves. You know, pretty much every big global household name we know was built prior to attribution. Yeah. And so there's this whole suite of tools and, you know, we've got. Media mix modeling is coming back into vogue at the moment, mostly because of a death of cookies. And if you talk to anyone at Facebook, they'll kind of, you know, it's pretty hard to have a conversation with them without mentioning media mix modeling. It can be expensive, it can be hard to do. But there's like regression analysis, which is quite cheap and easy to do. And that's kind of like a poor man's media mix modeling. And it's very, very reliable.
Nathan Bush: Tell us about regression modeling. What is that?
Mark Baartse: Basically what it does is it looks at inputs and outputs. I'm not a statistician, but there's independent variables. Independent variables. That's about as deep as my statistical knowledge goes at that point. I've got some statisticians I work with on this stuff and basically they say, okay, this is how much we spend on Google. This is much we spend on Facebook. And in almost every company that's fluctuated for a variety of reasons, and then this is what our revenue is. And it basically says, what is the statistical correlation between your Facebook spending, Google spend and your revenue? And that will come back with a reasonably accurate number. Now, the downside to regression is it doesn't look at what we did last week or it doesn't look at what this one specific campaign does. So you still do need to use the tools to figure out how to optimize day to day. But for you, and that's fine. But for your big picture stuff, how are we assigning budgets? How are we growing the company to 2,300%? So the stuff I mostly work on, vendor aggression is a really cool tool.
Nathan Bush: So you're still interested in trying to get a return number based on channel? You're not kind of. I felt we were getting to a point at the end of last year where there was a lot of people going, actually, this whole attribution thing, it's too Hard. Let's just throw the whole marketing spend in and get a marketing roi rather than by channel. You're still going after by channel.
Mark Baartse: Yeah, it is. That's not the worst approach, what you're describing. So some companies work towards a MER management expense ratio. Look, it's not a horrible way of working. There's downsides to it, but the people on the tools, people actually in Facebook and Google every day, will still be looking and should still be looking at that, unless there's some cases where they've been expressly instructed not to. So I'll give you an example of a campaign I ran. So it was for running this campaign for a client I had a sale event on. And so I just kind of. Fortunately, a lot of people I work with tend to indulge my crazy whims, which makes my job more fun. And so what I did is, let's say, okay, let's just go in one state and let's run a YouTube campaign promoting this sale and chatted with like, you know, the media buyers and they'll say, oh, yes, yes, we can do that. And remark audiences. No, no, no, no, no, no, no, no. Let's do it on a complete reach basis. Demographic targeting only. No audiences. No remarketing. In fact, I'm trying to remember, we might have even excluded our existing audience. I don't remember for sure, but it was like a really, really broad reach. It was just like women 30 to 50 in one state. That was it. The benefit there is. You get really cheap cpm, so you can reach a lot of people. Really, really, really cheap. And just ran this campaign for like, I think it was five days or something. It was like a sale event. And looked at YouTube afterwards, and I think we spent like five or ten grand on it. And YouTube reported like a 50% rise. So for every dollar we made, we'd made 50 cents back. Great. Way to go out of business, right? And it's like, let's just hold on a second. Let's just hold on here. And so then what we did is we looked at the revenue in that state compared to every other state and use them as a control group. And nothing special in the state. There's no lockdowns going on at that particular point in time. That golden era where we were kind of locked down, free for a few months. And what happened is that state actually climbed significantly more. And at that point we're at about a 300% ROAS. Not profitable, but interesting, interesting. 300%. That's interesting, right? Yeah. And Then we turned off the campaign and I rerun the data and the revenue stayed up in that state and at that point it tapered off after a while. It didn't stay up forever, but it stayed up in that state. And at that point we had like a 5 or 600% ROAS. And that point it's basically break even at that point. Yeah, this company's targeting about 800%, so 600%, let's break even. And the creator wasn't particularly strong and there's a lot of things we could have done better. And so that was a really interesting campaign and I do that sort of thing for a lot of companies.
Nathan Bush: So it's really interesting what you said there because you're essentially using what is typically regarded as a performance marketing channel, but using it as an awareness and brand play.
Mark Baartse: Yeah, that was performance metric still. It still performed a near a break even row as there's other ways to structure. That was a very tactical one. There's another company I did a very similar campaign with, but we've been running for three months and we've been running it in one region and it's a naturally seasonal product. And at this point right now, just looked at the data a few days ago, every region that this company is targeting is in decline except one which is actually hitting record sales levels.
Nathan Bush: Wow. Okay.
Mark Baartse: And we dropped like five or ten grand.
Nathan Bush: Yeah. And do you always split geographically to do these tests?
Mark Baartse: Sometimes it depends on the test. But that is one of the tricks that again, you know, I think it wasn't the question something, what do you look at apart from how do you measure marketing? And that is one of the ways of looking at it. And there's lots of different ways.
Nathan Bush: Yeah.
Mark Baartse: Okay, so regression is one, geotargeting is another.
Nathan Bush: And when you're looking at these numbers, what sources do you trust? Are you trusting the platforms and their metrics or are you bringing all those numbers into somewhere else look yet?
Mark Baartse: Yes and no. Okay, can we go on a tangent here, Nathan? Yes, we can.
Nathan Bush: And I love tangents.
Mark Baartse: Good, good, good. I like your tangent as well. So, so, okay, tangent. Let's go on tangent here. One of the buzzwords in the industry is we're data driven. Right. We're data driven marketers. Do we swear on this podcast, Bring it on bullshit. You're a data driven marketer. You are not a data driven marketer. You're a moron.
Nathan Bush: Okay, thank you for our intro grab there as well. We're going to take that.
Nathan Bush: That will bring so many people into
Nathan Bush: this episode because they're like, what is
Nathan Bush: Mark blowing up about?
Mark Baartse: This is fantastic.
Nathan Bush: Oh yeah. All right.
Mark Baartse: Bullshit.
Nathan Bush: You're a data driven marketer.
Mark Baartse: Yeah.
Nathan Bush: Yeah.
Mark Baartse: So the reason you're not a data driven marketer, you're probably not. But of course for our day driven markets out there. So the number of companies I look at, because I work with clients on a long term basis by projects as well, the number of companies I look at where pretty much the first thing I do is I do basic data quality checks. And these are companies and their data is a disaster. And they are making daily marking decisions on this. Did a project with a company not long ago, several months ago, big company. You've heard of them spending half a million a month on Facebook? Something like that. So good size spend, double tracking.
Nathan Bush: We can do charades if you want. If you want to help me. Guess it
Nathan Bush: starts with.
Nathan Bush: Sorry, carry on.
Mark Baartse: No, no. If you knew the company it was doing charades, this would be really, really funny. Yeah. And yeah, you know, half a million, I don't care who you are, it's a lot of money. Right?
Nathan Bush: Yeah.
Mark Baartse: They were double tracking the results and they were making daily decisions based on this data that was twice as good as it should have been.
Nathan Bush: How is that happening?
Mark Baartse: It's common. That's the thing. This is not an anomaly. I'd say probably one in three companies I look at have something similar to that. I'm not talking little, oh, this pixel is not quite implemented. I'm talking major. Major things I'd call anything that's affecting your Data More than 30% are calling major. Yeah, probably if we look that definition, maybe half the companies I look at.
Nathan Bush: Wow.
Mark Baartse: Yeah. So let's start off with that. So you're not data driven if you don't care about data quality. Right. And almost everyone I've talked to doesn't care about data quality even. I'll give you. Okay, here's a tip for your listeners. A really basic one. And this, I don't even call this a data quality problem. This is just a routine thing.
Nathan Bush: I'm not sure I want to endorse
Nathan Bush: this one, but here goes.
Nathan Bush: COVID 19 sparked a huge demand for homewares. Very aware of this, but it's not
Nathan Bush: a user experience that is easy to get. Right.
Nathan Bush: Sarah, my wife, seems to have no trouble. That's why Crate and Barrel Singapore replatformed over to Shopify plus with Shopify POS to deliver a seamless customer experience. They upgraded to enable virtual consultations, real time inventory and ERP.
Nathan Bush: Integration.
Nathan Bush: The result for Crate and Barrel, a 350% increase in loyalty signups and an experience ready for expansion through Southeast Asia. But seriously, let's just keep this one on the lowdown. Hey, to read more of Crate and Barrel Singapore's story and see other case studies, visit the customer section on shopify.com.
Mark Baartse: When people, you know, half a companies these days running a Shopify, they start their Google Ads and they implement it so that because it's easy to do, they use Google Analytics for tracking. But Google Analytics tracks differently than Google Ads does. And so you're actually getting a lot less data. And even quality aside, Google Ads will give you a higher volume of data, which allows Google algorithm to optimize better. Let's think about how you're measuring and how you're tracking. Just from a pure algorithmic optimization perspective. You're better off using the Google Ads pixel than the Google Analytics pixel, but it takes an extra half hour to do.
Nathan Bush: Kind of makes sense too because you're
Nathan Bush: paying for Google Ads, aren't you? Whereas Google Analytics, why would they give
Mark Baartse: it to you for free? It's just easy to implement, that's all in Shopify when if you just follow the dotted line in Shopify, you end up doing it that way.
Nathan Bush: Yeah.
Mark Baartse: So there's one thing and then even if your data is accurate, most people don't understand the data. I mean I was interviewing for like a very senior like head of performance for a big company a while ago and one of the questions, you know, we had pretty open budget. It was like we just wanted the best. Right? That was it. We just wanted the best. Whatever they charge, doesn't matter. We wanted the best person. And one of the questions I asked them and these, they were mostly agency people, multimillion dollar budgets routinely magic for clients and asked them what's the difference between post click and last click attribution. None of them got it. Not one.
Nathan Bush: I definitely echo your sentiments and I've seen this as well, not as often or as much as you have, but
Nathan Bush: I feel it comes from no one
Nathan Bush: having an ownership of the data as well, is that you might have had a bunch of e commerce coordinators or managers coming through, even marketing people putting pixels around, setting things up. But there's no documentation, there's no understanding of exactly how it's all pulled together.
Mark Baartse: Yep, yeah, no, that's often the case. But you can't call yourself a data driven marketer if you haven't confirmed your data quality. And if you don't understand what Data means if you can't tell the difference between last click and post click, then you don't understand your data and you're not a data driven marketer. Yeah.
Nathan Bush: So data driven marketer, what's the ultimate source of truth for them in a marketing sense?
Mark Baartse: I don't think there is a single source of truth. I think that's a bit of a myth. Like that conversation this morning with someone where we were going through and looking at regression data. So we have a follow up meeting on Friday. I think it is where we're actually aggregating data from as many sources as possible. So we're looking at what's Google Analytics saying our performance is, what's for tools saying our performance, what's for regression saying our performance is. What do we know just from our experience having run this business for a few years and seeing the ups and downs of it. And I'm going to sit down with head of marketing Bear and just have a discussion and we're going to make a call. But as I said to her this morning, it's like, you know, a lot of marketing is sticking your finger in the air and making guessings and that's what we're going to do. That's going to be a really, really well informed, well educated guess. Yeah, that's the difference.
Nathan Bush: I feel a lot of people try
Nathan Bush: and set up marketing data especially to try and save them from thinking, but it should really just enhance the thinking.
Mark Baartse: Yeah, absolutely. And that's the other thing is people, you know, why do you make that decision? It's like, oh, that's what the data said. But data didn't tell you that. It's data is just so widely, vastly open to interpretation. The last call I was on like an hour and a half ago chatting with CEO of a company and you're saying we're talking about discount strategy and we're saying, okay, if we do a 15% discount, we make no money on it, margin's gone. So that's true. It is. You know, you're making pennies at that point. And I said but with this particular discount strategy and showed them their own data. These customers have a lifetime value that's between double and triple your regular customers. And so if you're taking a six or 12 month view of things, you're actually going to make far, far more money. They're both data driven decisions. It was a data driven decision. That's a business judgment at that point. Let's forget about this data driven bullshit. Let's forget about what's right for the business. I mean some companies you need to make your money back within a month and that's fine, that's not a bad call. But you know, in this case he's prepared to make a 6 to 12 month kind of call. And so we're having ongoing discussions on that one.
Nathan Bush: Nice. And so we're diving down another rabbit hole here around lifetime value. Obviously it means so many different things to different people, especially when you start trying to put a time frame around what is a lifetime for customer. How do you approach calculating lifetime value?
Mark Baartse: Yeah, so it's hard to do. I mean to start off with most companies I look at don't even look at lifetime value. Which for some industries is fine. Like you know, I've got one company I work with who for products, it's really by and large 80% of their customers are one and done. And for that category it makes sense. And we have made a conscious, specific, informed decision to ignore lifetime values and metric as a company. But the other one I just saw phone with, it's off zoom with a few hours ago. It's a very lifetime value driven company. It's a product which naturally replenishes and kind of has a natural lifetime value to it. Yeah. So you get into cohort analysis at that point, how many people from a particular cohort repurchased after a particular time and the longer the better. But we're fast moving businesses. We can't look at three year lifetime value. It's just not realistic. So normally looking three, six, maybe 12 months if we're lucky. Yeah, looking at that. But the most important thing is to segment it as well. So if you're saying okay, we've got, you know, lifetime values, you know, we're making you know, 100 bucks off a first purchase and after 12 months most of those customers spend 170 bucks. It's like what you'll find digging about numbers is a percentage for customers have made one purchase and a percentage of customers have made 20 purchases. And it's trying to figure out who is which and how do you target them and how do you. That's where the smarts come in and the strategies come in. You know, how do you get the one and done to make a repurchase if you can and how do you find more of those 10 purchase customers and then segmenting to figure out who those 10 purchase customers are?
Nathan Bush: Yeah, it's an interesting one because we had James from particular audience come on
Nathan Bush: a couple of weeks ago.
Mark Baartse: I think I met him.
Nathan Bush: Yeah, yeah, yeah, great.
Nathan Bush: And like we had a great chat
Nathan Bush: especially around this topic and his view was that customer cohorts are dead and
Nathan Bush: that for him getting like minded customers together was an activity that kind of
Nathan Bush: wasn't worth its salt because I'm putting words in his mouth. Obviously his preference and what he's selling is that we should be going on product journeys and product intent because that will tell us the next likely step better than a cohort will.
Mark Baartse: Yeah. And from memory, particular audience, like visual merchandising, stuff like that.
Nathan Bush: Right, yeah, Visual merchandising, search, all that stuff.
Mark Baartse: Yeah, I've had a quick look at it. Yeah, yeah, one of those products. Yeah, I've had a quick look at that and from his perspective that makes sense. But when you're looking at acquisition and like CRM strategies, then look, in a perfect world. Yeah. But the data maturity required to do that is in some cases just simply not possible. The data is not simply not available or in other cases it's beyond the scope of anything less than a billion dollar company. But from an on site merchandising perspective, he's probably right. He knows more about that stuff than I do. So I don't think it's neither all.
Nathan Bush: No, no, no. I don't think so either. I think it's just interesting that we've. The death of the cookie. I think the death of the cookie
Nathan Bush: has not so much.
Nathan Bush: It's probably been overblown, but I love that it's opened up new ways of thinking about things that have been seen as gospel for so long.
Mark Baartse: Yeah. I mean, I don't know. In some ways I'm kind of excited by it, to be honest. I think it's going to shake out a lot of amateurs and a lot of people who've had very poor practice. Whenever Chrome does the final death now, whenever it's like mid next year, I
Nathan Bush: can't remember the date it got moved, didn't it?
Mark Baartse: Yeah, yeah, it's sometime 2023 and then Chrome just, just. Oh good, sorry, not Chrome. Google just this week changed the. They dropped flock and replaced with their new. What's it called? I can't remember what it's called. It wasn't bird themed. Have you noticed all the cookie replacement tools are bird themed? Google it. Almost. You know why?
Nathan Bush: You know why? Because they just fly in and shit on you.
Mark Baartse: Yeah, that's true, that's true.
Nathan Bush: All right, so let's, let's put our broader marketing hat on.
Nathan Bush: And what are you seeing out there?
Nathan Bush: What's. What's really exciting. You in marketing at the moment? Any new platforms, tools, executions?
Mark Baartse: Yeah, I don't know platforms. So like talking. Sorry, I'm not obsessed with this but just getting back to ltv. I'm working with a startup in New York who do like amazing LTV work and it's basically in a perfect world you have a team of data analysts and data scientists and a data warehouse. But most companies don't, can't afford that. And even if you can't afford it, it takes 612 months to get back useful. And so this is kind of like the poor man's aid warehouse and gives you all those questions I was talking about was from this product and so that's really cool, that's really exciting. What else is happening out there? I don't know. There's so much work and so much stuff happening in the cookie replacement world.
Nathan Bush: I'll put a scenario to you. Assume you are an up and coming young women's fashion brand. I won't name any names. Would you be starting a TikTok channel right now or do you think it's flown?
Mark Baartse: No, I reckon it is. So I think TikTok is overhyped but doesn't mean it's not a good channel. I just saw some data just a few days ago that said Amongst the over 18 audiences TikTok is reaching 37% of people whereas YouTube's reaching 89% of people. So if you're looking for broad reach, YouTube is still far and away superior just to reach as many people as possible. But if you're aiming at 20 year old women, I would imagine those. I don't have the data but I would imagine most numbers would be pretty neck and neck at that point and
Nathan Bush: I feel like that audience is still and from what I've seen, the research I've seen is still visiting Facebook but not necessarily engaging. So you're still getting the numbers from some of the eyeballs but it's just a check in what's going on. I'm out again.
Mark Baartse: Almost like yeah, could be potentially. But then again this is another marketing bugbear of mine that so many marketers think that they are the customer and they're not, you know, but rule number one of marketing, the second you join the company, you cease to be the customer. Yeah. But even then I work on one kind of younger women's fashion brands client and they're still driving significant revenue. Like you're talking double digit percent from Facebook and yet you go around, you go around the office and talk to It's a fashion company. It's like filled with 20 something girls in the offices that they all are. And you go and ask them and say, how many of you on Facebook? And they'll all say, we're not. It's all Insta or even TikTok. They've even abandoned Instagram. But yeah, but the data is quite clear. Facebook's still a dominant player.
Nathan Bush: Yeah, right.
Mark Baartse: And it's probably only in the last year or two in that market that Instagram took over from Facebook and TikTok's still a long way behind. So I'm not saying for a second because you've got to build up your maturity and your following and there's a great audience there. But just don't assume that you are the audience.
Nathan Bush: Such a great tip. Because Even if you 100% fit the cohort and you fit the brand, as soon as you're within an organization, your viewpoint changes on that world. It all of a sudden becomes you're the center of it and that you think customers care all about you, when really you're a passing, you know, a passing scroll for most customers. You're not the center, center of their lives. What are some of the tips or the tactics that you've got for marketers to put themselves back into the real shoes of customers?
Mark Baartse: Oh, it's a good question, man. Okay, so one, I've been going on this for years and years and years and it still hasn't stuck. So I'm going to keep going on it. Is talk to customers.
Nathan Bush: You're crazy.
Mark Baartse: I know, isn't it radical? But I remember I was speaking on a panel at a conference two years ago and one of the other guys on the panel was like country Manager, I won't say who, but a large, well known data company. And I was talking about this, I said, talk to your customers. And he was going, I think he was the sponsor of the panel actually. And he said, oh yes. Through our data platform, we enable data driven conversations with customers. It's like, okay, I'm going to say it again. Bullshit. There's no such thing as a data driven conversation with a customer. Look at your own personal experience. When have you had a data driven conversation with a company? It doesn't happen. It's not real. And I said, no, actually, hi, I'm Mark, pleased to meet you. What's your name? Great. And look, it doesn't necessarily mean being literal like that, but one of the basic things I do for companies is, okay, I'll give you an example. So company I work for, they have free shipping and free returns. Right. And in their space, in their niche, that's quite unusual. So that's a unique value proposition. And so what I did is there's a process called remote unmoderated user testing where you actually set a bunch of questions. People record themselves while using your website answering these questions. So you say, hey, find a product you'd like, go add it to your car and go do this. And then go and set a bunch of tasks. And they do it 10, 15 minutes usually. And I got five customers to do this and I think three of them got to checkout. So they found a product they liked. They added to cart, they got to checkout, and at the checkout you're always kind of eyeing off, what's the shipping price? And then it said free shipping. And three or five said, oh, wow, free shipping. That's so good. But they should know that before they get to cart. Right. That's obviously going to increase their chances of adding to carp.
Nathan Bush: Otherwise it's just a bonus, isn't it?
Mark Baartse: Yeah. And so what happened is like I was watching these. I still remember it was like Friday lunchtime. I immediately went and went to the A B testing tool. Within an hour, I'd set up an A B test to promote. And they said free shipping on their site. It just wasn't clear enough and people weren't noticing it. I just went and added this tag that said free shipping, free returns underneath that add to cart button. Ran that as an a B test. Revenue was up 10%. Went and changed the wording a bit to I think was free return, free shipping and risk free returns or something. I can't remember what. I did an ABC test. That's right. Did like a few different copy changes. Revenue was up another 10%. So we got an incremental 20% in conversion rate with zero extra media spend based on me spending an hour and a half watching videos of customers. Yeah. Now tell me, talking like 20 bucks
Nathan Bush: a month kind of tools, aren't we?
Mark Baartse: You normally pay per head. So I think that tool I was using was 20 bucks ahead. So cost us like 100 bucks to do that. And this is a company doing tens of millions a year. And so they just added another 2,3 million a year in revenue and open up new channels. So it was. That's great. And that's. I can give you like a dozen stories like that.
Nathan Bush: Yeah, it's so good too. Because a lot of times, take your free shipping example, you might go, I don't think people are seeing our free shipping. And you say it to the team and the team like, yeah, it's right there.
Mark Baartse: Like it's there.
Nathan Bush: It doesn't mean people see it.
Mark Baartse: Yeah, yeah, yeah. Just because you put it there, you know, the problem is not communicated until the customer's seen it. Yes. And I have that all the time. But people say, but it's there. It's on our site. It's like, I don't care if they don't see it. It doesn't exist.
Nathan Bush: Exactly. Just on that. Talking to customers as well. I love that idea around AB testing. Key messages, key paths, but just talking to customers. And I think I've said this before on the podcast, but it's as simple as what we've done with some of the clients that I've worked with is
Nathan Bush: go every month, I'll give you a
Nathan Bush: report of your top three purchases. Just ring those people who purchased those items. Just say thank you. And you never know what they're going to say. And it just has that connection straight up. And you get that kind of intel on. On your customer so quickly.
Mark Baartse: Yeah, that's great. That's an awesome thing to do. Yeah.
Nathan Bush: And easy to do.
Mark Baartse: It's like that free shipping add to cart example I just gave. Most people when they're doing AB testing, they just poke around Google Analytics. Right. Tell me where you find that report in Google Analytics that people aren't noticing. Free shipping. It ain't there. And I tell you what. Cause I do a lot of AB testing, a lot of CRO. I'm obsessed with it just because most companies just don't do enough of it. And while I mostly do strategy, that's one thing I kind of do tend to get a little bit hands on with. And I'd say probably 8 out of the 10 biggest wins I get are based on user testing, not analytics data. I do, I look at analytics. Absolutely, I do. But it's a minority.
Nathan Bush: And I'll tell you what, there is no worse feeling in the world than watching users use your site that you've developed and you've built and you've spent all this money and time on. And they go, the free shipping button is just there.
Mark Baartse: It's there, it's there.
Nathan Bush: Click it. And getting so frustrated and go, I
Mark Baartse: shouldn't be frustrated with the customer, I
Nathan Bush: should be frustrated myself. But there's a visceral kind of response to it and I think it works really well as a team, especially when you're trying to show other people that the Customer is having a problem.
Mark Baartse: Yeah, I've had kind of a diverse career, but I've worked in lots of different fields and I worked as a U.S. person briefly years ago. And I would sit back old school, you'd literally sit next to the user and give them instructions and talk with them and get them to the side. And the number of times where people are just like scrolling right past the finger meant to be clicking and you're just sitting there trying to keep a straight poker face and you just like went away. It's right there. It's right there. That's my problem to solve. My favorite saying of all time is, don't make our problem the customer's problem. It's not the customer's problem to solve. It is our problem to solve. And if they can't find a button, if they don't know we've got free shipping, that is my problem. It's not the customer's problem.
Nathan Bush: You know what I think you should say in those situations? Bullshit. You're customer centric. So you can changeable for data or customers. You can interchange it.
Mark Baartse: If people. Yeah, no, no, I do say that. No, if people say they're customer centric and then your question is, oh, how many customers you spoken to recently? Oh, no, no. So what do you mean by customer centric? Oh, I just think about what the customer would like. It's like. And how do you know what the customer would like? Oh, I think they're probably the same as me, so. They're not. They really, really aren't, I promise you. Yeah, they're just not. So when I did, I did some like advanced marketing studies a few years ago and literally the first item of first lecture was, you are not the customer.
Nathan Bush: Did it hit home?
Mark Baartse: Oh, yeah. I mean, I knew that. That's kind of just reassured me that I was on the right course. Yeah. Beautiful.
Nathan Bush: Now, last question I've got for you because we better let you go.
Nathan Bush: Last question.
Nathan Bush: We all need to know this. Should we be bidding on brand terms?
Mark Baartse: Oh, man, that old chestnut. A lot of what I do for a living, I sometimes feel guilty taking money off people. Not that guilty. I still take it. But a lot of what I do is I just test things. I guess the thing is I know what to test. That's probably the trick. And so I say just test it. But having said that, I've run that test a number of times and I don't recollect ever losing. As in turning off has always been the good thing.
Nathan Bush: As in sorry. As in Keeping them on is the way to go. Or turning them on.
Mark Baartse: Turning them off. Turning them off, yeah, usually. Look, there's lots of reasons if you can get it cheap enough. My general rule of thumb is because I do a lot of international market entry as well. And so, you know, so typically a country company that's done well in Australia wants to enter us or, you know, Singapore or something. So typically I recommend leaving on in most markets because it's a trust, I believe, and I have no data to back this up. That's a trust element because when you enter a new market, one of the biggest issues is trust. And so by having a paid ad there, I believe that's a trust element. I have no data to back me up on that. And it's usually you're looking at 500 bucks a month or something in the new market. So it's not a big deal.
Nathan Bush: Yeah, Mark, we better let you go. But before we do, what's next for you and some of the projects you're working on?
Mark Baartse: I don't know. I'm just going to keep doing what I'm doing. Yeah, it's lots of fun. Everyone keeps saying, oh, you're going to hire someone because I've got plenty of work on. But it's like I like what I'm doing. I like taking on the sort of challenges that other people can't do and so that I can't hire someone to do. And if I start doing boring routine work, then I'll probably stop what I'm doing at that point.
Nathan Bush: Love it. And if people are interested in putting a challenge to you, what's the best way to get in touch with.
Mark Baartse: Oh, probably LinkedIn. I spend a lot of time there. I assume the spelling of my name is in the show notes. So Mark Bartzer, or if you particularly want, you can email me markbaazer.com beautiful.
Nathan Bush: Mark, thank you for coming on Add to cart and spilling some of your secrets. We didn't even get to branding and all the other things that you do. That's a conversation hopefully for another time. But appreciate your thoughts on performance marketing and lifetime customer value.
Mark Baartse: Cool. Thank you, Nathan.
Nathan Bush: When Mark and I were throwing around the idea of having a chat together, performance marketing was just one of a handful of topics we were considering. All of them would have been good. And it really goes to show the depth of knowledge that Mark has. And not just that. I love that he doesn't always stick to the conventional lines that are always trodden out, especially in marketing. And he caught me off guard a couple of times in there which I actually really enjoyed. Here are the top three three takeaways that stood out for me. Number one AB Testing Rules Mark spoke about how data and data quality is important, but actually watching users complete tasks on your site gives you insights that you would never get from analytics alone. I've used tools such as usertesting.com to do this and you can literally set your tasks up like add something to checkout and get screwed screen recordings in half a day and for under $100. If you're not doing this, there's no excuses not to. Number two Performance Based Branding While we often chase immediate ROI for our online campaigns, Mark gave a brilliant example where he set up broadly targeted reach campaigns but limited to one state. That state didn't see direct conversion but saw a larger uplift over a long longer time frame. A really simple but potentially game changing test for your marketing. Number three the true marketer I 100% agree with Mark that there should not be a title of digital marketer. It is redundant. Why limit yourself to one set of tools if you're a marketer? Get comfortable with all the tools at your disposal, even if you're naturally better at one or two, which you will be. Pick a channel or two that you're not familiar or comfortable with and just get experimenting. To finish up. I have three resources for you. Firstly, if you're a first time listener of Add to Cart and you want to stay up to date with new episodes, head over to addtocart.com and you can sign up for our weekly newsletter. We'll let you know every time a new episode drops as well as giving you my three takeaways from each episode and a link to the transcripts so you can know that this is an episode that you want to dive straight into. Secondly, if you want a weekly roundup of the best e commerce case studies, tools and research, sign up to the High Five Friday newsletter which is delivered to inboxes at 8am every Friday. Friday morning I read all the e commerce news and send you the bits that I think you can take action from. Sign up at 12high12h I g h.com au forward/high5 and the last thing if you are looking to explore your next e commerce opportunity, head over to esweettalent.com we are a dedicated e commerce talent agency connecting the best ecommerce ecommerce talent
Nathan Bush: with the fastest growing brands.
Nathan Bush: Check it out. Sign up to the email and get in touch with me if you want to discuss your next move. Until next time. Thanks for listening and keep those customers Adding to cart it's finally happening. Registrations for E Suite's E Commerce Accelerator program are now open. If you're looking to get into e commerce upskill in e commerce or just want a refresher, we've got you covered. I've taken the lessons from my e commerce career and the insights from all the e commerce leaders I've been lucky enough to speak with here and distilled it into 10 weeks of e Commerce learning. We cover the foundations of e commerce including strategy, marketing, technology, finance, analytics and supply chain. You'll even leave with an official Shopify certification. Every week I will host a two hour live lesson which will be supported supported by templates, case studies and resources to accelerate your e commerce career. And because you guys lend me your ears, I'll lend you a discount code. Use the code add to cart all one word to get $200 off your sign up. That's add to cart as the discount code, so don't wait. Class commences on the 14th of March and registration is now open. Head over to learn.esweettalent.com that's learn.esweettalent dot com to secure your place today. See you.
