Stephen Carl | The Fusion of Offline and Online

Unstoppable CEOPodcast

Are you so caught up in the day to day of your business that you don’t have time to look closely at your marketing strategy? Could key changes boost conversions… increase traffic…grow sales… exponentially?

Get out of the weeds, says Stephen Carl, founder of digital strategy firm Needle Movement. It’s time to take the time to examine your marketing strategy, especially the digital marketing strategy which faces the challenge of ever-changing channels and best practices.

What’s working today? Where do many businesses fall short? Stephen shares his thoughts and much more, including…

  • Creating sustainable – not explosive – growth 
  • A winning strategy for boosting customer retention
  • How tweaks to your digital marketing strategy can spur sustainable sales growth
  • The biggest strategic error ecommerce entrepreneurs are making today
  • And more

Listen now…

Mentioned in this episode:

Transcript

Adam Lean: Welcome to P is for Profit, a podcast that breaks down business concepts into simple and clear language. This season is dedicated to interviewing ecommerce experts that can help you improve your ecommerce business. I recently had the pleasure of interviewing the founder of a digital marketing company that helps online businesses grow their revenue. So why does this matter? So I preach all the time that profit is more important than revenue. Why is that? Well, profit is what turns into cash flow. 

If you make a million dollars in revenue and spend a million dollars in expenses, you’ve made a million dollars in revenue, but zero dollars in profit. And guess what? You’ve also generated zero dollars in cash flow. What’s the point? However, this doesn’t mean that revenue is not important. You still got to focus on generating more revenue. However, just keep in mind that the revenue you do generate just has to be profitable revenue. So let’s jump into the interview with Stephen and talk about how he helps businesses grow their revenue. Stephen, welcome to the show. 

Stephen Carl: It’s great to be here, Adam. Thanks for having me.

Adam: Teah, I’m excited because we’re going to be talking about digital strategy, something that we all know we need to but we’re not exactly sure how to get there. And you’re the expert on the topic. So I’m excited to dive in. So, you know, before we get started, how did you get to this point? You own needlemovement.com. How did you get to the point of being an expert on digital strategy?

How Stephen Became a Digital Strategist

Stephen: Sure. So I started in ecommerce back in 1998. And that was right before kind of the first internet boom. And, you know, I was fortunate to join a company called cosmo.com that was doing last-mile delivery. So it was just a, it was a concept running out of New York City where people would order videos and food online and have it fulfilled by bicycle delivery. And, you know, back in 1999, I could see that instant gratification culture forming. 

How if you order something online, and then seven minutes later someone comes with your package to your home, like it blows your mind away. So you know that’s where I started my career in ecommerce. And it’s just, you know, it’s, it was wonderful to be part of technological transformation. And to see, you know, how our office lives are changing, you know, and how, that was the first step of how, you know, digital transforms our business lives.

Adam: Okay, this is fascinating to me. So if you started in 1998, and is 2019. How come it’s taken this long for big ecommerce players to figure out the last mile.

Stephen: Logistics is a really tough business. You know, it was what’s interesting about that company was that Amazon gave $60 million to, you know, to cosmo.com, and the company eventually went out of business. So they lost $60 million on it, and Jeff Bezos still went, you know, Amazon Prime is really how they were able to get a leg hold of US ecommerce. So it’s fascinating that someone can lose $60 million on an investment, and still, in time feel good enough about it to go all in, in the future. 

You know, so but yes to your, logistics is really hard and very expensive. So I think to get delivery really quickly, there’s, it’s always going to cost someone to transport it. So I think that’s why it’s taken so long, but I think it’s getting better and better. I mean, I think even international logistics is really interesting too. Because we’re seeing how a company like Alibaba is making it simpler. And I guess in Europe and Asia, the borders are closer, so people are more accustomed to it, but it’s, you know, slowly getting better as the customer expects immediate delivery. You know, so you know, after. 

So further, let’s see, about three years ago, I think started Needle Movement, which focuses on digital strategy. And before then I spent about 15 years at larger companies on just being that first ecommerce hire and showing them how to, you know, take advantage of digital trends and run their marketing, and technology teams. You know, and I think that having done it on the brand side for so long, it gives me a lot of empathy for just some of the challenges that go into, you know, having a winning profitable, sustainable business. 

Adam: So you two brands would hire you to, they would say, hey, I want to get online. There’s online things sticking around. So what would be the biggest hurdles that you would have to overcome with these brands that have traditionally not sold on?

Stephen: A lot of it is cultural, where you know, that, you know, the company would know, oh, I need to, you know, we see this, you know, we know, the web is going to be a big thing, and we don’t want to lose out. You know, so it would be coordinating with the leadership teams, hiring people, you know, where needed, and, you know, just filling the gaps between your technology, your creative, which tools are most beneficial, and which marketing is working. And, you know, and will be, you know, that you’re seeing movement from. 

Adam: Got it. So you spent 15 years doing that, and then you started the Needle Movement. 

Stephen: Right. So I think it was a transformative experience for me on the client-side was working in fashion. I was at a luxury women’s wear line called Lafayette 148, New York. And it’s not a household name, but it is actually a $200 million business. I’m actually I’m sure it’s a household name to, you know, too many women who love the brand. But just seeing that business grow, and like, you know, in the four years I was there, it went from an $8 million online business to, like, over $45 million. 

You know, so seeing also how growth changes the company, because when growth, when you go to that when you have that spiking growth, it also changes everybody’s jobs because you go from. So a lot of times the, you know, like your company goes through certain phases. And it was just, you know, with, you know, with all that growth, you needed to buy more inventory, you need to have expertise in different areas that were done, and maybe were one person was handling, you know, an area now you need it, you know, three people, because there was more, the goals were higher to reach. And just, it was just a more complex business.

Adam: So 8 million in sales to 40 million in sales. What was the main drivers of that, if you had to sum it up? 

Stephen: I think it was a good fusion between offline and online. And so Lafayette 148, sends out catalogs on a monthly basis. And a lot of it was just fusing some of the positive attributes of the catalog business with what you can do with digital. You know, so as, you know, so that was, you know, putting together a real email marketing strategy, you know, where, you know, you’re, you know, so a lot of times, it’s just building on what you have. That’s what’s funny about it, like, it’s not, like, you know, so, you know, we did a, I think like, let’s see, I’m trying to remember the number, but I think we went from about 1 million in email sales to about 12 million in the span of three years. 

Yeah, so like, you know, it’s just finding things that people that you’re already doing that you could possibly do better. Paid search was another one, where, you know, there was a lot of business on Google on that, you know, it was there before, but we were investing more in paid search and display advertising strategy. So, you know, some of it was also just customer retention. I mean, I remember, we did this VIP promotion there, where we just sent out to VIP a letter from the president. And this is a mailing that got a 21% response rate, which is unheard of. It’s like that, but I think a lot of it’s just like, it’s all it, you know, it was a lot of teamwork. 

And a lot of people that were, you know, dedicated to the product, were working together. Ecommerce is always about solving problems. And the more you’re trying to figure out what’s wrong and fixing it, and just, you know, getting a pulse of what’s really going on, the further you can go ahead. You know, so, you know, so after Lafayette, I just had a realization that, that I, you know, I always wanted to have my own business. And I think, you know, having that great experience behind me, gave me the courage to, you know, to start my own. 

Adam: So, needlemovement.com is a digital strategy agency. So, what exactly is digital strategy?

Defining Digital Strategy

Stephen: That’s a great question. I think digital strategy is one of the more misunderstood terms. Because, you know, it’s like, you know, we think we’re on top of it, but, you know, it’s, it’s hard, because I think sometimes businesses are so time-starved these days, and the day to day, just, you know, covering it is overwhelming, you know, with updating your website, making sure you have inventory, covering all these social media channels that pop up every six months, and a new one is, you know, is always there. 

You know, so the day to day cover so much that sometimes, you know, people don’t spend as much time as they need to on, you know, the on digital strategy. You know, so it’s, you know, so that would be, how am I you know, what kind of what more can I do on my website to increase conversions and sales? What are my best marketing channels? Product market fit? Which is, you know, do I have an audience that is enthusiastic about the products that I’m selling? And if they’re just happy, not enthusiastic, how do I get it from good to great? 

You know, so there’s, you know, and then a lot of it’s just how to scale the business. And, you know, right now we’re, I think, business owners are lucky because with staffing you don’t always have to bring on an expensive hire. You at least have options. You know, you can either bring someone on full time, you can bring someone on a contract basis, or you can bring someone on a temporary basis. You know, so a lot of it is all these little, you know, so that’s another component of digital strategy, which is, you know, how to scale that org chart so that your small team doesn’t, is doing what they do best, not doing everything. 

Adam: So essentially, you, if I’m understanding correctly, you take an ecommerce business, and you sort of assess it and then create a strategy to grow it. I mean, it is that the bottom line?

Stephen: Correct. So we’re, I’m looking at, I’m really just an extension of the team. So, you know, it’s just that my area is owning the digital strategy. You know, in a situation before, where sometimes with businesses, like, the executives sort of own it, but they really don’t have time. You know, or a number of a team is, you know, taking a portion of it. You know, so I’m, like, you were saying, I’m looking at the business and just, I just want to see what’s working and what’s not. Because what’s working, double down on what’s working. 

You know, just like we were talking about with Lafayette, if I see email is working, then we’re going to talk about how we can invest more in email because the return on investment can be really high versus other channels. And then finding out what’s not working. When you under, like, it’s much better that you understand your weaknesses than your competitors and their weaknesses, and take advantage of them. 

So there is a process of assessing the business. And, you know, and then the exciting part is, you know, let’s start doing some initiatives. You know, so then I’m just a member of that team, who’s working towards that business’ success. And I think these days, like, I really like the idea of sustainable growth versus, you know, explosive growth. Because, you know, if you do your numbers, and like, let’s just say your business improves 10% each month consistently, then after a year, you would have over 300% growth. 

So, in many ways, I just be as a member of the team, just taking whatever we launch or do, and trying to improve upon it. You know, understanding what can we can do better. Or what, you know, is, you know,  when things are not perfect, and things are not optimal, how do we get a little better? You know, is it the creative? Is it the platform? Can we support, how else can we support the staff is doing something. So it’s just working towards continuous optimization, you know, with the brand so that they can hit their monthly goals. 

Adam: What are the biggest mistakes that ecommerce owners are making today when it comes to strategy? 

Stephen: When it comes to strategy or when it comes to? 

Adam: Or anything just in general, yeah. 

The Importance of Market Segmentation

Stephen; Okay. I think niche is very important. And product-market fit. So that just having seen, you know, I’ve had, I’ve worked with over 30 businesses, and just looking back, you know, the brands that do very well, they have an established audience. So they’re, you know, they are seeing results. There is an audience that the product really hits them on. You know, it really that is impacted. And even if their marketing is imperfect, they still have an audience that kind of that wants the product and needs the product. You know, so that’s, so the reverse of that is, you know, if they’re struggling, I think a lot of it is just being adaptable. 

You know, where, like, in some ways with businesses, these days, we all have this like, there’s this facade of perfectionism, where it’s like, you know, you’ll get, like, I just want a company where people can admit mistakes, where the executives do it, where the interns do it. And because mistakes are awesome to find. They’re opportunities. And we have to encourage, the more they get out because you can only improve upon something it’s like, you know, once you admit it, not perfect. You know, so I think for businesses that are struggling sometimes, it’s just they got to find out what’s wrong, and what they have to fix. 

You know, so it’s not, and oftentimes it’s not like, I mean, sometimes I’ve heard businesses, I’ve heard a lot of four-letter words when it comes to certain social media channels and advertising. Like, you know, there has been some pain recently in the community with businesses not getting good return on investment with Facebook and Instagram ads. Not every business but for some. And I think it’s just it’s a problem-solving process. 

So it’s like, if it’s wrong, it’s not every, like, you know, it’s not only Facebook’s fault. You know, there could be multiple factors, like creative and branding have a huge factor on the success of any outreach. You know, so it’s just trying, I think, with businesses that are not excelling as much, it’s just trying to problem solve and pinpoint what’s wrong, and being adaptable to it. 

Adam: And you mentioned niche, would you say that a lot of businesses struggle with the fact that they’re trying to appeal to everybody? And therefore, they’re not really appealing to anybody? 

Stephen: Yeah, I think that’s true to some extent. There’s, you know, it depends on the size of the company, and who they’re, you know, it’s like how many different marketing like personas. Like a lot of times, your customer is not, you know, not one personality or type of person. There would be, you know, there can be multiple people that want to purchase that product. like I have, I work with a shaving company. And you know, that with that company, there’s, I mean, and this is wet shaving, so it’s with a straight razor, and they have people that grew up with wet shaving. They also have their children, like the son who learned from the father. 

And then they also have the wife who loves, you know, her husband’s wet shave. So like, all three of those people are different. It’s there’s a different psychology to the, you know, to buying the product and their motivations to it. But I yeah, I think it’s in the situation you’re describing where it’s kind of vanilla. I mean, you know, that one size fits all messaging that speaks to nobody, I guess is that you want, you know, with branding, and the niche, you want it to speak to those personas. You know, to the main people that are purchasing the product. You know, and I think typically brands suffer more from vanilla branding, that doesn’t mean anything. 

I mean, it’s hard out there. I mean, that’s the thing, because, you know, as I’m saying, this, I’m thinking, well, like 15 years ago, or 10 years ago even, people will be telling you the opposite thing. These days, brands, you know, it’s just like that, like the Nike Kaepernick ad campaign. I mean, that was a bellwether moment, because consumers have so many options these days, that brands have to be more persuasive. And these days, customers want a brand that has certain values, or, you know, to, and to speak to those values. 

And have a brand doesn’t speak to any values, which was definitely the way that things used to be, then, you know, it might be possible that it doesn’t create a passionate enough following. You know, and that’s, you know, I think the Nike stand is, you know, it’s just more of just having it’s really persuasiveness I think that brands need to think about, of how they’re really like, hitting upon what problem they’re solving for the customer. And why, you know, like, you know, if you take the Nike situation, you know, people can buy 50 different brands of shoes. So, why are they going to choose my brand of shoe versus all the other options that they have?

Adam: Yeah. And going back to your shaving client, I bet that they, even though they may focus on those three types of target audiences, buyers that you’re talking about. They’re probably just nitching down on just shaving instead of going into, you know, toothbrushes or, you know, hairbrushes, or, you know, shoes or clothing. Yeah, so that makes sense.

Stephen: Yeah, shaving is a little shaving of a nice, it’s a nice, because you’re, you know, men shaving is going into, like a very, like, it’s a masculine demographic, and it’s, it’s well-identified. So in some ways that niche can make it simpler to market to. 

Adam: So what do you think is the thing that separates successful ecommerce businesses from those that just always struggle? 

Gather Data Outside of Your Comfort Zone

Stephen: There’s, I think fiscal discipline is also an important element of, I think successful brands are, they’re more open to try things out and see if things work and test them You know, it’s like with optimization, there’s really a constant process of testing and optimization. You know, so I, you know, and that’s what I see in that successful brand culture that they will have, they will try things out, and they might do bold things, and they’ll test them. And then if it works, great, if it doesn’t work, they’ll go and they’ll stop. Fiscal discipline, I think, is really important too. 

Because, you know, there is, the person looking at the books, I mean, with an ecommerce brand, there are so many different expenses that are coming up quickly. And the transparency of your finances is incredibly important so that you’re not throwing money away. Like I’ve seen, and it’s, there’s a lot of, like, one example is operations. You know, where, you know, just a random event where, you know, I remember a business owner telling me, like, you know, not I’m not doing as well as my sales look, no, like, my gross revenue looks great, but I got all these returns happening. 

So, you know, take out 20%, of whatever you see, because that’s really what my net is. And then I just have all these other expenses. So what we did is we outlined the marketing expenses, the staff expenses, the operations. And we noticed some things with operations that we just thought were really expensive. And we found out that, you know, the warehouse was working with one shipping carrier. And guess what, like, they might have been charging a little more than they should have. 

You know, so I think it’s just, you know, that’s just something that the owner was probably just seeing expenses, but, you know, doing some regular auditing of all the software providers, you have all the third parties. And just making it a regular thing I think is important. Because sometimes there’s more today, like, I’ve seen the panic audit. And, you know, but it really should just be like a quarterly thing that, you know, you that the CFO or the person in charge of finances goes to the marketing head and says, Hey, are you still using all these vendors? 

I just want to check. You know, and a lot of times, you know, digital marketing is so fluid that you’re going to hear Oh, yeah, we’re not using that anymore. I think we don’t need that. Or, you know, another thing that I’ve noticed is, with software, is when you go on to annual plans versus monthly plans, you can often see 25%. So there’s just, you know, I think that fiscal awareness plays a part with I mean, another part of fiscal awareness with advertising is finding the right statistics to work with. Like in advertising the statistic I don’t like the most is ROAS return on ad spend. 

Adam: You don’t like it? Really? Okay.

Stephen: I don’t like it. Because I think, yeah, I think it’s useful. I mean, I’m not saying don’t look at it, but the conclusions that people draw are wild. Because a lot like sometimes like, let’s say, let’s say I’m doing Google advertising, and I’m making $2.20 for every dollar I spend. I have $2.20 of gross revenue for every dollar that I’m spending on advertising. 

That’s probably not a profitable formula with all your other expenses, because I, you know, with most companies, they’re not putting over 35% into their marketing. You know, so with ROAS, it’s just, you want to make sure your ROAS like return on ad spend, whatever multiple you’re making from your ads is a profitable formula. 

And if you’re starting out, and it’s not, that’s cool too, but just be aware that it’s not. That’s, you know, but I think, you know, it’s really like people are, you know, ROAS is still a statistic, that is a good word reference point. But, you know, just seeing how it’s used in between brands and agencies. Like I don’t, sometimes I don’t see enough panic when someone has $1 50 ROAS, you know, or, you know, like, that should be a sign that things are not working great. And we have to improve versus, hey, we made more money than we spent. 

You know, so that all ties into this fiscal, you know, just being aware of the key numbers that are going to impact your business. Because that fiscal awareness will allow you to adapt quicker, and how to identify when things are working or not working. You know, because you would rather if something’s not working, you’d rather cut it off after three months, then after nine months. And I think your numbers are a great way to keep a part of the picture on how effective they are. 

Adam: 100% agree with you. I mean, I love what you said earlier about the fiscal discipline, and testing because it goes hand in hand. Let the numbers drive your decisions. Use data and that and where do you get the data, you test? Test everything and let the numbers dictate whether or not something works. Totally agree with you. 

Stephen: And I think it just, it also just starts the conversation of decisions. Like I think sometimes, I think a lot of times when you run the business, you get scared of people getting in your way. And, you know, it’s just numbers are the way you make, you’re going to make the best decisions. And even if you don’t, like even if the CFO comes in and says, I don’t know if we’re doing well, on this marketing campaign, or with this initiative, it’s just a conversation of whether you should continue or stop. You could still keep going but at least you have that insight versus thinking that everything’s working when the day to day it hasn’t been working yet. 

Adam; Yeah, totally agree. And, Stephen, this has been very interesting. I could talk about this all day long, just because it’s such an important piece of ecommerce. I mean, just your strategy, got to have a strategy in place, but how do you have to know if your strategy is working or not. So this is all good stuff. Where can people find you? 

Stephen: So the easiest way to reach me is send an email to hello@needlemovement.com. And I look at everyone and, you know, that’s the easiest way to start a conversation. 

Adam: Excellent. hello@needlemovement.com

Stephen: Yeah, so and, you know, I think, you know, I mean, the one thing that’s, it’s, you know, ecommerce is really a process of learning and that’s when you and we, you know, or anyone comes in as the expert it’s like we really learned from the crowd. So I just, you know, I love you know, I enjoy hearing about the successes people have and the challenges and you know, how we can do it better.

Adam: Fully agree. So, hello@needlemovement.com. Your website’s needlemovement.com. I encourage everybody to check that out. Stephen, thank you so much for coming on the show today. I really appreciate it.

Stephen: Thanks for having me on Adam. It’s been great.