Linda Bustos | You Need to Spend Money to Make Money

Posted in  Podcast   on  January 21, 2020 by  Joris Bryon

Marketing on Facebook can be a gamechanger for eCommerce companies. But, says eCommerce consultant and blogger Linda Bustos, it can also be a waste of time and money if not done correctly. 

We talk about how you can leverage all the capabilities Facebook offers to laser target your ideal customers, and why you do have to spend a bit to actually see results.

But social marketing strategy is just the start. 

Linda also shares her thoughts on the best way to protect your business from copycats, other ways to stay ahead of the competition, and…

  • How you could be making it hard for your customers to find the right product
  • Dealing with the coming wave of AI in marketing
  • The biggest challenges – and misconceptions – in digital marketing today
  • What you should be spending to acquire new customers
  • And more

Listen now…

Mentioned in this episode:

Episode Transcript:

Joris Bryon: Hey, this is Joris of the eCommerce Excellence Podcast and today I’m really excited to talk to Linda Bustos. Linda is an eCommerce consultant and blogger with a get elastic eCommerce blog and her personal project eCommerce illustrated. She’s covered to space for over a decade now. And she’s worked with companies large and small on confusion and digital transformation projects. So I’m sure this is going to be a very interesting episode. Linda, welcome to the podcast. Great to have you here.

Linda Bustos: Thank you so much excited to be here.

Joris: Cool. Yeah, before we get started, maybe it would be interesting to delve a bit more about your background. Where’d you come from in your career? How did you get started and then how did you end up in eCommerce? How did you get to this point?

Linda: I kind of fell into eCommerce by accident. I was an SEO and PPC manager and usability kind of consultant with a digital agency originally, so we were working a lot with small businesses that want to kind of brochure where sites right and then we got one client that I was assigned to that was an eCommerce, business to business for promotional products kind of company where they had to we had to work through all of the decisions of the features and functionality of this from the ground-up build.

So back in like the mid-2000s. We didn’t have eCommerce platforms that necessarily had things like filtered navigation and faceted navigation just out of the box, right? You had to actually work through those use cases and just figure out how to display products in the right way and the product grid and all that kind of stuff. So that was such interesting and high maintenance maybe project because it was just complex, but I really fell in love with it. And at that point, you know, I really got a taste and a love for eCommerce. So at that time too, I had just started blogging on the side just as a hobby as a pet project for myself. And 2006-2007 was kind of the cusp of social media as well, it was kind of before the businesses and marketers had joined the party, right? So social media was just emerging as a way that you could integrate with SEO and digital marketing and eCommerce as a way to promote your business. And so I started blogging about that quite early on and then that transitioned into an opportunity with the get elastic blog. It was very young. It had been around for a few months and I was hired to kind of join them full time and build out that eCommerce blog.

So I was able to apply some of the stuff that I was doing with SEO and PPC and social media and just right up About that for people to apply that to their eCommerce sites. And then I did that blog for eight years. And then I transitioned into the consulting world worked with, as you said, retailers big and small on conversion product projects, and then recently rejoined get elastic to continue the talking about eCommerce again.

Joris: Cool. Yeah, that’s, that’s really interesting. And then an older those years, you’ve seen a lot of evolution, I guess. And it’s good to have someone who has that overview of the industry as well. That’s really interesting. So you know, a lot about what’s going on in eCommerce. What are some of the trends that you’re seeing today in digital commerce?

Digital Commerce Trends

Linda: So one of the biggest trends I’m seeing right now, so there are two different contexts, right? There are larger companies that have started in physical retail first and then added eCommerce after as another arm of their business but there’s also So this great group of people that have started digitally native, right got just on direct to eCommerce and grown it that way. A lot of solo entrepreneurs and people taking advantage of how easy it is to get up and running on platforms such as Shopify or marketplaces like Amazon.

And so so the trend that I see with these startups and entrepreneurs is that there’s quite a bit of opportunity on social media to actually grow your business and Facebook, just crushing it. Like there are some businesses that I’ve had the pleasure to meet or hear talks from or know personally, that are just crushing it with Facebook and the targeting options that they have and some of the features that are available through those ads and the natural receptiveness that that social users have to products and great marketing. So I think that’s one of the biggest trends for small companies.

Joris: Okay, so yeah, you mentioned companies really crushing it on Facebook or any good ways to grow? What are the best ways to crush it on Facebook, in your opinion?

Crushing The Competition With Facebook

Linda: Well, I think the number one thing is you need to find the right growth hacking partner, somebody who actually really knows how to get results on the platform. So, I have worked with some companies on, you know, just doing general audits of their marketing programs, and I kind of see it, they’re going one of two ways either you have an excellent partner who really knows what levers to pull and how to leverage everything that Facebook and Instagram and those platforms have to offer and others that are just babysitting your account, maybe putting a very junior person on your account and really not getting any performance results. It’s sometimes I’ve seen the wrong messaging and the wrong targeting pointed out the wrong audience right stuff for like you’re preaching to the choir to the lookalike audience and you’re giving You know deals and offers to people that haven’t already liked your page versus building awareness and really introducing your brand to people that haven’t joined your Facebook page or haven’t visited your site yet.

And that’s the reverse strategy right or in pay per click targeting the wrong geography sometimes with campaigns, it’s really insane. So I think number one, like if you want to grow your business, picking the right partner, and making sure that those programs are actually delivering ROI is really important. And I do believe that you need to spend money to make money. So sometimes you can be a small company and look at how much it might spend, how much it might cost to do a Facebook campaign and shrink back from that, right like, well, we can’t afford five K or $1,000 a month, for example, you know, to get a campaign running that’s on the very, very low end. And if you don’t have a good budget to start out with, and then your agency can’t really they don’t have a lot to play with for you, right. So they’re going to either put you into just a very basic maintenance account that’s not in growth mode or you know, you’re just going to get flat results.

So I mean if you don’t really have a lot of revenue to support marketing spend and that’s where you have to kind of look at, you know, do you have a strong enough business plan and vision and product-market fit where you can go out and raise a little bit of money so that you can build that traction and build that awareness and you know, not focus on making profits for yourself in the beginning but actually growing the business and investing in these channels. That’s a decision that everybody has to look at seriously.

Joris: Yeah, absolutely. And I mean, I get it that when you’re just starting out and you have to spend a lot of money on advertising it can be daunting, but there’s no other way basically you have to spend a little wall or a lot if you want to. If you want to grow there also agree on picking the right partner aspect or I mean, I run the agency and oftentimes price come comes up and like there’s always someone cheaper, right? There’s always someone who can do it like you can find someone on fiber and yeah, that’s going to be cheaper but they’re not going to get the same result results. And I think that’s an important thing to keep in mind if you pay peanuts, you get monkeys, right? So yeah, like someone. Yeah, the big right partner. I totally agree there. So, are there some of the basics that you see people struggling with? Like some of the stuff you already mentioned, like not spending enough money or targeting the wrong region? There is stuff that you notice on the consulting projects where Yeah, they were not getting some of the basics, right, because I know there’s a lot of tendencies to talk about trends and let’s see what 20 brings because that’s right around the corner. Now when we’re recording this I buy them yeah. So, I often find a lot of people get lost on the next shiny object. And they don’t have to basics in order to get some of those basics that you noticed that people still struggle with?

Biggest Challenges in Digital Commerce

Linda: I think the biggest challenge kind of dovetailing off of you know, you have to spend money to make money is understanding how much it truly does cost to acquire customers, and understanding what different activities you know what the ROI on different channels and platforms that you are spending on. But then also tying that back to the product level and the average order value and how much discounts are you giving and where does the affiliate margin start leaking these kind of things, because at the end of the day, you know, like, if it costs 40% of your average order to acquire customers, your you can grow like crazy and never be profitable.

So that’s really challenging because there’s a lot of downward pressure on prices. is upward pressure on discounting. To to keep customers to write, you can get a great email list and a lot of social followers and stuff like that. But they might only respond to your sales and your offer codes because they know that they’re going to come eventually, and maybe your product isn’t so indispensable that they need to be buying every two or three months. So I think that’s the most difficult thing to manage is there there’s kind of this marketing adage that that’s been floating out there for years that it costs 10 times or 20 times as much to get a new customer like it as it is to keep a customer but that’s not really true and eCommerce it costs to keep customers as well because you have to keep marketing to them and you have to understand what customer lifetime value is and you can never really sit back and rest on the customer base that you have.

You have to be very hungry and constantly acquiring new customers. The second part of that is, is that consumers and trends as a whole are very flaky and they go through cycles. So you need to always be thinking at least a year ahead two seasons ahead, no matter what product that you sell, because if you have a product that maybe people buy once and then that’s it, then you’re not going to have tons of customer lifetime value, right? If you have products that are consumable, and people come back, that’s another story but the freshness of your catalog, staying up to date with you know, what people prefer and also understanding the competitive environment because one of the kind of pitfalls of becoming successful especially if you have a very unique business, a very unique product is that once it gets good once you start getting a name, other people are breathing down your neck to copy it, knock it off, do something similar and then you get into having to defend your IP and defend your value proposition. And that kind of thing. So if you want to get into eCommerce, you just have to accept the good and the bad and like Steve Jobs said, you know, stay hungry, stay foolish. expect that you’re going to have to fight against disruption from all different angles and be prepared for that.

Joris: Yeah, absolutely. And I think whatever the areas, entrepreneurs that just start their eCommerce often overlook, and I totally get it is branding. But building a strong brand is definitely a bed for the future. Because if those copycats come breathing down your neck, then you’ll have at least your brand and that’s where you’ll be ahead of your competitors, I think.

Linda: Yeah, and Amazon has a big problem there because all the visibility is within Amazon. There’s lots of tools like Jungle Scout and others that have been built purely for people to get some visibility into what’s doing well on Amazon so you can join the party, yourself and private label your own stuff. in that space, so that’s kind of another threat, you know that that emerged out of the great opportunity in eCommerce is that, you know, there’s just someone’s always watching you.

Joris: Absolutely, and trying to, to basically steal your success. So, one of those trends that we have seen last, I don’t know, two years probably, and it’s becoming increasingly ever-present is AI. I feel like a lot of tools have to join the term AI because I think it will, it will help them sell what’s your take on the AI? Will it have an impact on eCommerce? Will it have an impact on the way people buy and sell?

AI and Digital Commerce

Linda: And that is an excellent question. I just saw an article shared on Twitter yesterday from Gartner. And they were saying by 2025 that 80% of marketers we’re going to abandon personalization do ROI. That’s a very sobering thought, right and Gartner has been wrong on it on a ton of things. So let’s just get that out of the way. They have also predicted that by 2020, which is what, two and a half weeks from now, by 2020, as 80% of all interactions would happen through an AI-driven chatbot kind of thing. So we can take these predictions for what they are there.

They’re just predictions, their ideas, but yeah, with machine learning, there’s a lot of potential with it. But I think that the image of AI and machine learning is that it’s a lot closer to perfect than it really is right now. And, and so so it’s nice to think that there’s going to be a machine algorithm that can make all of your merchandising decisions for you. But if you’re anything smaller than Walmart, or Amazon or a massive, highly trafficked site, You’re not going to get the data that makes accurate, predictive, personalized recommendations, especially if you have a large catalog, right? When you think about even at testing, how much traffic do you have to get to a certain page to get a statistically significant results on an A versus B experiment, when you’re dealing with a large catalog and all the permutations of, you know, affinities between product and product the person bought this might also like this. A lot of personalization engines, you know, they do use machine learning and they have been using machine learning for the last decade.

This isn’t a new thing that just popped out of nowhere. This is kind of how these algorithms work. They can be kind of funky and especially when you first implement them. The You know, I’ve seen product associations where there’s a croc shoe, you know, those, rubbers, those associate ended with a very high-end leather boot, you know those two things together and that was based on a recent purchase, right? Maybe somebody bought a croc kid and, and a leather for themselves but that’s definitely not what’s happening on the aggregate. So it’s tricky. It’s dangerous to rely too much on the machine if you don’t have a lot of data to feed it.

Joris: Yeah, and I think a lot of people overrate what the capacities of it sound fancy and all new and solve all the problems. But yeah, it’s good to be a little bit skeptical on some things and then really keep an eye on what it is actually doing and how it’s working. Let’s, let’s talk a bit about mobile. I know you’re really into UX and conversion optimization, what are some of the biggest mobile mistakes merchants make?

Biggest Mistakes When Going Mobile

Linda: Well, the nice thing is, is that responsive design is kind of so accessible that you can go in and buy a responsive theme for $100 or less, you know, some of these theme marketplaces and it’s doesn’t require the effort that it did when responsive design first rolled out, right, you had to have a designer and the developer working so closely hand in hand to make sure that something on one end didn’t break on the other end and that the breakpoints were right and that the content refloat in the right way and all of this kind of stuff.

So it’s kind of nice that that is not the massive time and money investment that it was before. But you have to be really careful that when you do pick a theme, that there aren’t some you’re not adopting some mistakes that have been coded into those themes. So some of those mistakes that I see is like definitely with the filters and facets and the sort features that as you know on any product list, whether it’s a category or search results or another type of landing page that you have with products, merchandise on it. You want to have a way to refine those 3000 results, you know, john, help people get to that tighter set. It’s hard when all those filters and facets are collapsed behind a small icon, right? So testing that behavior, and sometimes making the development changes on the back end is a lot more work than just, you know, building it.

Like you can, you can spend a lot more than that initial hundred dollars that you spent to actually get it performance and to get it usable. So definitely go through make those decisions, pick your template well. And also consider the different things with how content scales down, especially on your home pages, right. So when things are developed for desktop, they oftentimes just scale down to the mobile view and then you can’t read the text and maybe there’s a, an image that kind of loses its content. Text because it doesn’t crop itself to a more, you know, user-friendly or visually appealing dimensions. And call to action buttons can sometimes get lost.

And especially if you have one of those carousels that that scroll or change, then those little buttons kind of overlap over the call to action and it just becomes a mess. So understanding how to present content in the optimal way on mobile and how that’s different than desktop and planning for that and doing a little bit of extra work at the creative stage, to make sure that you have different assets that are optimized and really important to and then another thing too, is just to consider that responsive design might not be what you want or need. Like if you’re a bigger site and you have the budget for it actually considering having a separate adaptive site that is different from your desktop and optimized for mobile. There are some speed advantages That and of course, speed is really important for conversions. So if you have the budget for it, I’m seeing a trend away from responsive design and towards adaptive domains in at least the, you know, internet top 100 sites.

Joris: Yeah, I think that’s, that’s important to mention. I mean, responsiveness is fine to get started, but I think the main problem with it is that a lot of the decisions there are, well basically the design is then responsible for the screen if you know what I mean, but it should be responsible for the experience whereas and that’s different, different approach I mean you can have because if you make it responsive, you you need to make some of the decisions and things that you mentioned like the filters and sorting options on collections pages that that’s super important because you experience and and and the goal of someone on mobile is really they what they tried to get accomplished here on the collection speeches to narrowing down to find a product they really like or want.

And if you make it hard by having those filters or sorting options hidden behind an icon or leaving them to get away altogether, just because you don’t have the space on the screen, well, then that’s not ideal, then you’re not optimizing for the experience, or what do you use it as trying to accomplish but you’re just optimizing for the, for the screen. And I think that’s an important new one to make.

Linda: Yeah, and I think that it, I mean, obviously, you have to have it collapse. But there are certain ways to keep it visible, right. So you can pin your filter button and have it kind of floating or on always visible as somebody scrolls. That’s a great thing to do. And also to make sure that if they do expand that and they want to apply a filter, that the products that don’t reload right away that somebody can apply multiple color size filters or whatever it is before they reload. So it’s not a constant, you know, back and forth process.

Joris: Yeah, that’s really yeah, I know you’re passionate about UX and conversion optimization just like me. So it’s the beginning of the year when this episode is going to be live. So it’s gonna be January, people are making plans for 2020. if they haven’t already done that, how can an eCommerce company best prepare for 2020 to make it a big success?

Preparing for 2020 Success

Linda: So I think the nice thing about having the luxury of time being in January is that if your peak season is in holiday, you have some lead time to make investments in your development and your customer experience and maybe some integrations that you might want to make and be able to test them and all that kind of stuff you have a lot of time before the next holiday season. So think about the features and functionalities the offers.

Maybe it’s geo segmentation that you want to have right so that you’ll be able to have your black Friday deal. start applying on the West Coast if you’re in the States, you know, in the West Coast Three hours later than on the east coast and make sure that those things are recognized. Or it might be that you want to have certain promotional discount codes that can’t stack. There’s a lot of promotional logic that maybe you want to have next year and now’s a great time to get started and plan that. But when it comes to looking at like what happened in the holiday season 2019 and how that applies to 2020. A lot is going to change. 

So the holiday season is going to start a couple of days earlier next year. This year, we actually had black Friday falling on the latest possible starting on in 2020. No, but yeah, it was a very black Friday and how does that impact consumer behavior and there’s a lot of pressure to start your discounts even earlier pre Black Friday. So now’s a great time to look through. Your data and actually see what happened. What were the discounts that were responded to match that back to profit, where you’re shipping offers, comparable with your average order value where you losing money, take a look at the profit and the revenue, not just the total orders and responses to your marketing and that kind of thing.

Because, you know, definitely Black Friday is meant to bring you back into the black right. And I think that now because of the Cyber Monday and consumers access to so many deals, that it can kind of become you know, the holiday is all about discounts. You have to make sure that you’re choosing the right discounts to actually add, add to your bottom line at the end of the year and not lead that margin out too much. So those are things that you can start analyzing today. Go do a retrospective over your holiday. There’s a lot of information about what happened to the industry as a whole, you know, across retailers.

So like Salesforce and Adobe put out some really great aggregate metrics that you can look at and kind of benchmark against your own business. And you know how looking at when the promotion started, and when they peaks, they peaked at around 30% this year for Black Friday and Cyber Monday. So keep that in mind when you’re planning, you know how competitive you want to be. And when you start turning that machine on next holiday.

Joris: Yeah, that’s actually an excellent exercise we pray at all. All of a sudden you start panicking and thinking, Oh, we should start working on that. So now’s a good time to think about it and plan ahead. It’s really great advice. Elena, this has been absolutely great. And we could probably go on and talk about it for hours about eCommerce, but I’m gonna just want to make sure how they can find you and learn more about you. What’s up. What’s the best place for that?

Linda: Well, there are a few different ways. So check out get elastic. I’m a contributor there. We also have a lot of, we have a lot of e-commerce experts that contribute to that blog regularly. And so you can find me there on LinkedIn. Linda, boost us on LinkedIn. I’m Linda boosters on Twitter. And if you want to check out my other blog, eCommerce illustrated, that’s actually got a lot of ideas from homepage through checkout to help increase your usability for various factors of like, you know, category pages, search, landing pages, check out, etc.

Joris: Alright, cool. Thanks so much for being here tonight, it’s been absolutely great.

Linda: Thanks so much Joris.

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