26 Nov Matthias Laqueur | Measuring True Digital Profits
Matthias Laqueur, business strategist with BossData, says many retailers who sell offline and online make a huge mistake when measuring the success of their digital efforts.
This is one of the most impactful ways this digital marketing agency is able to help clients get a better handle on key business indicators to figure out which levers to pull to get better results, using technology to find the right tools for the job.
The goal: aligning digital marketing strategy with business and revenue targets in a constantly changing landscape where what worked yesterday might not work today.
They’re not afraid to move out of the digital marketing realm either in order to make successful campaigns for their clients. And within the company they’re not afraid to give every team member a say in important business decisions.
We unpack all that and also talk about…
- The myth of the entrepreneurial mindset
- How omnichannel marketing stacks up against ROPO – and vice-versa
- Why they don’t sell “hours” to their clients
- Ways retailers measure online revenue incorrectly
- And more
Mentioned in this episode:
Joris Bryon; Hey, this is Joris of the Ecommerce Excellence Podcast. And today I’m really excited to talk to Matthias Laqueur. Matthias is a business strategist and is one of the founders of BossData. And that’s a digital business and marketing agency based in Belgium. And they’re a true omnichannel specialist. And today, we’re mainly going to be talking about ROPO, and if you don’t know what that is, keep listening. I’m sure this is going to be a very interesting episode. Matthias welcome to the podcast. Super happy to have you here.
Matthias Laqueur: Hi. Yeah. Thank you. It’s very nice to be part of your podcast.
Joris: Cool. Yeah. I’m glad to have a fellow Belgian on the podcast because typically, we speak with a lot of Americans and people from the UK but fellow Belgian. That’s great. Yeah, maybe just to start off with I’d love for you to tell everybody a bit more about your background. Where’d you come from in your career and how did you end up on this point?
Matthias’ Career Path
Matthias; All right. Then I’ll first off, start with a little correction. I am Dutch, but I live in Belgium. So you’re, So quick overview of what I’ve been doing in where we are now. So I started off straight out of school. I started off at a digital marketing firm in Breda in the south of the Netherlands. They were focused already on what we call performance marketing, but far less on what I would see as the business consultancy sides.
And I think that’s the major change since I started off on my own together with a partner in Belgium. And we founded Bossdata. From the get-go, we started off as the firm which, by accident, let’s say is highly specialized in performance marketing, like, what can you do with Google and what you do with Facebook and stuff like that. But for us, it was a secondary thing. It wasn’t the, our main thing that we sell. It’s not our main service that we sell. We sell the strategy consultancy. And then we have the tactics, let’s say, to implement it, which is called Facebook ads, Google ads, etc. So that’s a bit on the background we have.
Joris: Alright, yeah. So you’re not really like any other, well, a digital marketing agency. It’s more like on the business end of things as well. You’re more strategic level involved with your clients, is that right?
Matthias; Yeah. At least that’s what we praise ourselves to be. That is of course for others to determine but what we often see let’s say in digital marketing, and if a company broadens out in the sense of services that they provide, we often see that, let’s say digital marketing firm also starts doing let’s say, more traditional forms of marketing, as in the sense of, we’re willing to do with printing ads or TV ads or something like that.
We very specifically said we did not want to move out into that direction like a horizontal way. We want to move up vertically and impact other key factors within an organization that determines the success or failure of a campaign. Given an example we Yeah, we went back to let’s say, the very traditional sense of what we got at school, the popular for piece of marketing.
And we said okay, so if pricing and product and promotion and place which is in this case, let’s say a website is not on par, is not, let’s say synchronized in a proper way, we can build the best Google Ads campaign in the world, but still it won’t work. So we started specializing on how can we impact all these other key factors, for example, pricing, assortment, etc. And how can we use strategies to our advantage within digital? And I think that’s, yeah, some of the biggest changes that we’ve done.
Joris: Yeah, that’s a totally different position than most other digital agencies who, as you say, go vertically instead of horizontally. And I think that makes a lot of sense because you can have a lot more impact on a business if you are involved in those strategic decisions about pricing, for instance, as well. Before we talk a bit about omnichannel and ROPO. One other thing I wanted to touch upon is about your company, is your company culture. I know that’s super important to you and you pay a lot of attention to it. Can you tell us a bit more about your company culture?
A Culture of Transparency
Matthias; My personal desire with that, say was also to always have a very entrepreneurial mindset within a company and where I worked before, they had this term like you’re an intrapreneur, so you can be entrepreneurial within an organization and stuff like that. But when you look at reality, it wasn’t so. So for me as an if you’re an entrepreneur, you have, let’s say, a very open view on all aspects within the organization.
So it’s not only about what my clients do when I’m within the organization, but I can also have a few on Okay, what other costs are there within an organization? For example, wages. How much does it cost to rent the building to if we want to remodel it, how much did that cost, stuff like that. So we decided from the start, that everybody had access to everything, so everybody has access to the entire cash flow, for example, of what we do, how much a client pays. If a client pays badly or very well or stuff like that.
And we don’t, let’s say obscure any information within the organization, for the reason that you can only be as entrepreneurial or you can only be an entrepreneur in my point of view, if you know, if you have all the cards, and you that you know what’s going on within. And it goes pretty far that, let’s say, for every, what we call big decision or make a decision, everybody can put in a vote.
And it doesn’t matter if you’re working at BossData for years, or if you’re the owner, or if you just started on your first day, if we have a topic which we need to decide on all of us, and it impacts all of us, then any vote of anybody counts just as much. So we really try to push people towards taking Yeah, forming an opinion. Making a decision knowing why we are doing certain things in a certain way to have a very open view on things that we’ve been doing in a certain way until now doesn’t mean it’s right.
So we can, we have to be able to adapt and constantly change and be very, let’s say skeptical about how we’re going to build this campaign in this way. And why, because we’ve been doing it forever already in this, within this way. And we are constantly looking back and say okay, but is this still the best way? Is this still the best way? Another aspect, which I think is a very big change for a lot of clients we work for as well, is our consultancy agency, let’s say in the broader sense, but we do not sell hours.
We say to a client, we do not track or so we can report on hours so we can sell you hours. We don’t want to sell you any hours. We say to our clients, okay, we want to go from A to B, this is what we think that needs to be done. And if we get you there, or to get you there, it will cost you X amount per month to get you there. And that’s it. And we just start working.
Joris: Yeah, that’s just kind of especially in Belgium, I know most agencies just yeah, bill by the hour. So that already is a pretty bold move. But I think the whole extreme transparency that’s very bold. I don’t know, many companies who actually do that. Are there any downsides to that? Is it, has it been always easy to maintain that kind of transparency?
Matthias: There aren’t, I think, that many companies, but we didn’t invent this system on our own. There are other companies which we talked to, let’s say, to get their experiences and etc. Only I think we are like very extreme at it. One downside we had, for example, was a big, big learning for us as an organization and for me, personally, is from the start, we had open wages. So everybody knew what I made, for example, and if I wanted to race then I had to defend against the group and say, okay, I’ve been doing this and I got more responsibilities, and we’ve grown from A to B, and therefore I think I deserve this. So we have open wages.
Everybody had the same, not the same wage. But everybody could look at eachother’s wages. The problem there is quite a long story. But what we see is that wages are constantly, so for somebody who has been here for a very long time, or for somebody who has, who adds a lot of value compared to somebody who has less value, the difference in wage doesn’t represent it. So what you get is that wages just like kind of flattened out, which is not the reality for an organization.
The reality for an organization is you have a group of people who do a very good job, you have a group, and you have a very few people within the organization who do an extremely good job and have an extremely high impact. And you want to wait accordingly, according to that, let’s say. The problem with wage transparency is that it’s very difficult to defend. Why? Because you’re constantly defending the fact that Oh yeah, yeah, but this person earns more. And you’re constantly focusing on let’s say, the not so good or the bad thing somebody else knows. So, yeah, but this earns more because you did this, this and this and that.
So you’re constantly in the by people make what they make, instead of saying, okay, but your growth is ABC and you have obtained it, yes or no. So yeah, that’s a big learning for us that what we now have is full transparency on all financial data, except for wages, we look at the total number, they can look at my wage and Thomas’s wage, which they know specifically because we are willing to open, to share it openly, but they know, don’t know, between each other what the wages are. If somebody wants to raise though, they still need to defend the fact that they get it yes or no, not the height, but the fact that they get it between themselves.
Joris: Okay. Yeah, that’s really interesting. By the way for people who don’t know Tomas that you mentioned before he said, your business partner, right? Okay. Alright, cool. So I mentioned in the introduction that we’ll be talking about omnichannel and ROPO. So, first of all, what is ROPO? And what’s the difference between ROPO and omnichannel?
ROPO vs. Omnichannel
Matthias: ROPO, let’s say, is a subject within omnichannel. So omnichannel says, okay, people go to your online-offline store via various ways of, let’s say channels, both online and offline, and it goes across vice versa. I don’t know, all kinds of, let’s say, spaghetti to go and to make a transaction or conversion or whatever you’re aiming for. And ROPO is the specific subset of it or subject of it. And it’s people that research online, RO and purchase offline. So what’s the effect basically, of what you’re doing online, on your offline physical network of stores or offices or of stuff like that. That’s what ROPO is.
Joris: I can imagine this is really important right, to really master this and understand what’s happening online that has an impact offline. How do you get started? How do you start measuring? How do you implement it?
Matthias; Yeah. Okay. To start off, let’s say the importance of ROPO is huge. It has an enormous impact on retailers, and they don’t really acknowledge it in the way that they should, I think. So currently, you have both in Google Ads and Google Analytics or Facebook ads. You can measure how many people go to a website and end up in a store. And I’m betting that some of the listeners already do this and say, Yeah, but it’s, or I know In whatever.
That’s not the main challenge for ROPO. So for ROPO, the main challenge is not the measurement itself, but it’s the organizational change towards looking at goals and targets and the way that you manage and steer campaigns into a certain direction. To start off, what we nine out of 10 or 10 out of 10 what we see is that companies say yeah, we’re omnichannel but in reality, they are not omnichannel at all in the sense of if you look at for example, goals, KPIs, goals and targets etc.
You see that an ecommerce team or digital marketing team within organizations, nine out of 10 have an online revenue target or online profits targets. And they get forced and neglect to put it in extreme words. They get forced to neglect the fact that a lot of people, and even most of the people that go to the website do not even end up buying online but end up in a physical store to make a purchase.
So, it’s very, very important for a company that if you have an online and omnichannel ambition or an omnichannel reality in most cases, that the first thing you do before you start talking about implementing measuring ROPO and etc, you need to be able to set targets in an omnichannel world. So you need to be able to say, Okay, if I spend X amount online, then it has to generate revenue and it can come omnichannel. So both online revenue and offline revenue, we can credit to the fact that we could spend X amount of media or etc. That’s the first step is as an organization, you need to change.
Joris: Yeah, so basically what you’re saying is that the digital teams They have a KPI that is maybe just online. And that’s not in the best interest of the company as a whole because if the digital team also has the offline KPIs, then that is in the best interest of the company because if they ignore those offline KPIs, they made the company as a whole maybe losing out on revenue.
Matthias: Yeah. And it’s even I think it’s very often it’s even worse. Quite often, we see that for retailers that, let’s say the online channel, as I say, is not performing very well. So they look at what they put in and what they get out in sense of X amount on, for example, Google AdSense, and we look at the revenue that’s being generated on the website, then they say, Yeah, but it doesn’t work that well. It’s not profitable, and etc.
While in reality, they generate X amount of revenue online, and they generate X amount of revenue via online, offline, right. And it’s a major change in the way you look at profitability of digital.
Joris: What are some good KPIs to measure then?
Key Performance Indicators to Track
Matthias: Let’s say two years ago, we, Yeah, we had a very pragmatic approach towards it. We literally did exit research in physical stores. So when somebody bought something in a physical store, we would ask this person. Maam. Can I ask you a question? Did you go to the website before you make this purchase?
And since we have Google Analytics or another analytics suite, we know how people go to the website and we can say, okay, X amount of revenue, offline is accredited to the online channels or online spend. These days, luckily, technology has evolved quite rapidly. And both Google and Facebook have what they call a store visits or a store, Yeah, store visit metric. So Google and Facebook measure how many people go to your physical store based on their technology.
Joris; How accurate is that? In your opinion?
Matthias: I think it’s, in the end, the answer is twofold. First of all, it’s by far the most accurate, the cheapest, because it’s free information you’ll get. So there is not another company in this world, except for Google and Facebook that have this user information, on such a fast scale that they can determine very accurately how many people go to a physical store, yes or no.
Secondly, it doesn’t have to be 100% accurate. What you need is a close to accurate or a far more accurate estimation or number that you have now because currently, you’re not taking it into consideration. And even if it’s, let’s say, 10% off, you’ll start measuring a lot more than you’re measuring now. In our personal experience, if Google says it’s 1200 people that went to your physical store in the last, let’s say, X amount of days or months or whatever, then the actual number is not far off.
Joris: It’s better than having nothing of course. And if you take one month as the starting point, and you see the evolution, I think that’s probably more important than getting hung up on too much on the exact number there.
Matthias: To elaborate a little more, it’s because sometimes clients ask us the same question in the sense of Yeah, but do we trust this number or? Yeah, but we’re very specific companies bit different than the average. So for us, it’s different. First of all, I think it’s a bit of. to be honest, bit of entity. Most companies are not that different. But still, let’s say you think it’s different. I will still implore you to do an exit research. So just do research at the cash register and ask people if you go to the website before you made this purchase, yes or no. And then you can see if the number that Google says or Facebook says is accurate with a number that you have. And then you have a benchmark.
Joris: Okay. Yeah. So when people want to get started with this, when do they get, do they have to get started? How do they implement this ROPO philosophy and framework or KPIs or whatnot, whatever you want to call it? What’s the best place to start?
Matthias: I think the best place to start is you have to talk to the person who is in charge of setting the targets and the goals. So let’s say it’s finance size, that decides, hey, what for the next year or two coming, whatever. And you have to ask this man or woman one question and say 1,000 euros or $1,000, in digital marketing, how much generate, how much revenue doesn’t need to generate? And then we’ll come up with a number saying, Okay, if you invest 1000 that we need to gain, let’s say X amount on the other side. And then you should ask, do you care if this, is this revenue is generated online or offline?
Nine out of 10 is financial, the person would say, I would rather have an offline and online. Why? Nine out of 10, you have less returns, you have a higher margin for products which you sell offline. But nonetheless, they will say No, okay, yeah, rather online, offline bucks. I don’t really care as long as it’s there, right? And then you’ll say, okay, for me, the target is, I’m going to spend X amount online, and then we’re going to generate revenue on the other side, and it can originate from online or offline.
And you have to ask the person who was in charge of setting the targets to not give you an ecommerce target, but to give you an omnichannel target. So that they understand as an organization, and they understand that the digital marketeer with digital campaigns can generate revenue both online and offline. And the second phase is okay, you need to be able to measure this impact. If you do a google campaign, do we see more people going to a store?
Yes. Nine out of 10 if you have physical stores, you already have access to store visit data from Google. The only thing is, you need to be able to, let’s say, analyze this properly. And to explain this and say on a podcast, when you analyze a property is a bit difficult. But in essence, it comes down to you need to value your store visits. Sort of value of the store visits is something you need to determine. And it’s quite an easy formula.
That’s saying that basic way is, okay, so if one, how many people do need that in a physical store for one transaction so let’s say if somebody goes to a store, nine out of 10 people buy, the average order value in a physical store is X. So you know that one store visit is valued at Y. So then you have a value you for store visits, you have a value for ecommerce, and then you can combine the two and say, Okay, I need to generate more revenue or more value.
Joris: Okay, and that makes sense. What you just said as well was that most of what your clients will say like, okay if I have to choose between an offline purchase and an online purchase, and most of the cases they will prefer an offline purchase, because usually, people are going to spend a bit more or less price sensitive. But how, what are some good ways to convert to your online traffic into in-store traffic, foot traffic?
Getting Prospects in the Store
Matthias: So what we, so let’s say for retailers we have very often we say okay, we’re going to focus less on driving more ecommerce revenue. Why? Because our objective is to generate more revenue or more profits, right? So it’s not per se ecommerce revenue. It’s to generate more profit. Nine out of 10 profitability for ecommerce is far lower than profitability within the same market classic retail channels.
So we look at our website and say okay, you need to work towards conversion and for us, the conversion is by online or and maybe best is to buy offline. So what we do is we say okay, what are the things that we can do to make sure that people end up in a physical store? So for us, for example, store locator, so where does this, where is the closest store is a very important page or two within, in a website, which you should push far more aggressively on product pages, category pages, etc. to show Hey you’re looking at these kind of products, and your closest store is there, there and there.
Other things that we for example, find very important is to provide stock levels. So you can buy this product, we still have two in stock there, three in stock there or one in stock and we have no stock there. So that people say, Okay, I can just pick it up. In-store reservations, same kind of thing. Because very often, we see that people are far more likely to buy offline than they are filled to buy online. And it depends on market vertical. It’s definitely true. But very often, we see that for most verticals, it’s still that most people buy in a physical store instead of ecommerce.
Joris; Okay, yeah, that’s very interesting. I guess like stuff like a free return in-store. That also helps to get people to the store. Obviously, they’ve already purchased it online.
Matthias: Yeah or very specific incentives. I would have no objection saying to a customer, potential customer saying, Hey, I can ship it to you, and then it’s this price. But if you pick it up in the physical store, then it’s this price. Because you have costs which you don’t have to do anymore. So, or you can give many more incentives towards people to push them towards a physical visit.
Joris: Yeah, yeah, that makes a lot of sense. Hey Matthias, this has been very, very interesting, and we could probably go on for a few more hours, but we’re running out of time. And I want to make sure that people know how they can find you and learn more about you. Yeah, what’s the best place for people to find you and connect with you?
Matthias: Well, we write quite a lot since recently, actually. So we have very extensive cases on how we approach ROPO but also, for example, on loyalty because ROPO semes to get people within to visit, the physical store is closely connected to the way you look at loyalty and marketing tactics within loyalty. So he writes quite a lot about it so you can find out on our website on resources. Other than that’s Yeah, the usual suspects, like active on LinkedIn and you can just give me a call. You can find my contact details on the website.
Joris: Alright, and now we’ll put all of that in the show notes as well. And thank you so much for being here Matthias. It’s been absolutely great.
Matthias: More than a pleasure.