Here’s what I learned this week

Everyone loves a good analogy.

Let’s talk about cooking this week one of my favorite hobbies.

Jon, what does cooking have to do with ecommerce?

If you’ve ever done a fine dining experience or watched a cooking show the end product is all based on the quality of the initial ingredients.

Great ingredients + Great Execution = Amazing food

Great ingredients + Average Execution = Pretty damn good food

Great ingredients + Bad Execution = Food better than mass produced garbage

Contrast that with

Average ingredients + Great Execution = Good food

Average ingredients + Average Execution = Food better than mass produced garbage

Average ingredients + Bad Execution = Edible but that’s about it

I won’t do Poor ingredients because all of that comes out subpar.

Let’s break it down ingredient by ingredient.

Ingredients Needed for a Cheese Burger

• Bun

• Ground beef

• Cheese

That’s it, you don’t need anything else to be called a burger, no need to even season the meat, if you’ve eaten at enough birthday parties, you’ll know that you’re lucky to get a slice of cheddar on that thing.

This is basically an ecommerce store with one product.

Technically that’s all you need in order to be a store.

The same goes for a Sign Up form, all you need is a form input for email addresses and a submit button.

This is what you get:

This is the equivalent of just the basics needed to be called a burger.

If you do the basics in ecommerce this is what they look like.

If you’re starving and have no other options, this might do.

There are multiple variables that exist across every part of this creation.

There’s bun type, cheese type, meat type, meat seasoning, etc.

Let’s contrast that to a more gourmet burger.

This is also a Cheeseburger

Here’s the list of ingredients:

• Brioche Bun

  • Buttered and Toasted

• Ground Beef

  • Seasoned with Garam Masala, Garlic Powder, Salt, Pepper, and Adobo Chili Powder

• Truffle Pepper Jack Cheese

• Heirloom Tomato

  • Thinly sliced on a Mandolin

• Red Onion

  • Thinly sliced on a Mandolin

• Jalapeños

  • Thinly sliced on a Mandolin

• Guacamole

  • Avacado

  • White Onion

  • Heirloom Tomato

  • Lime Juice

  • Salt

  • Pepper

• Bacon

• Romaine Lettuce

• Barbeque Sauce

  • Japanese Hot and Spicy

• Hot Pepper Spread

  • Sriracha

Now at the end of the day, both items will provide you with calories and likely bring you some pleasure in eating them.

But the second one has a depth of flavor that makes you want to cry tears of joy, the emotional reaction to the taste makes all the difference.

This is the difference between someone that makes food and someone that cooks.

The same goes for software and services

One of these will inherently cost more than the other, it’s why in California a $22 burger on the menu is just about the norm.

Places have had to up their game tremendously to stick out and create something that truly is better than something people can make at home.

That second burger is something that I made at home.

All basic software has the same basic components and can do the same or similar things.

But how does one suddenly decide that all these flavors are going to work well together and how long to cook different parts of the burger etc?

One word: Experience

And a lot of trial and error to figure out what combinations would truly translate to being out of this world.

I used to watch a lot of the show Chopped.

It was neat to see how people would take a list of ingredients and put things together to make something taste good.

Experience matters

There’s a lot of software that looks pretty and does one specific thing well.

Because it’s a means to an end.

In ecommerce, the goal of most software companies is to be bought by a larger company, to be acquired as a means of improving distribution before a larger company decides to just create what they’ve built internally and beat them on distribution.

This is a very real scenario for the majority of current software companies out there, a large incumbent with distribution can destroy a smaller but fast growing startup pretty quickly leaving them to have to sell out to a larger company to increase distribution as was the case with Salesforce purchasing Slack.

Even Slack needed larger distribution.

So it’s created a weird little spot in the market, where most of the time it’s better to sell the top burger to as many people as possible rather than build something with more depth. It’s building for an experience level that’s simpler.

Actually, this has come up quite a lot lately with agencies and software with an emphasis on design and making things visually appealing to match the ego and aesthetics of a brand.

Even if it doesn’t produce better results, the brand owner likes it more.

(to me this is nuts because although I enjoy design, clear and clean design tends to always beat out flashy over the top design)

When things stall out on this front, people move on to gimmicks.

I think you might be seeing where this is heading…

Here’s our food example:

This is like Dominos adding stuff crust pizza to the menu.

Is it new? Maybe? Is Dominos still bad pizza? Totally.

The problem is software is moving this direction too, rather than building towards the second burger, they are adding stuff to the first burger without rethinking all the ingredients and how they work together.

They add more and more ingredients but they don’t update the quality of the ingredients. This turns into the how many boxes can we check and will it be good enough for most people type of thinking.

The problem is a lot of the digital marketing community has been raised by YouTube.

A lot of young marketers I talk to are just trying to get in reps. The more reps, the better they get.

You don’t just make the second burger your first time cooking.

It’s the difference between me building you out a marketing strategy in an hour v. someone else that it would take 8 or so.

This comes up very often with my other half as a seasoned attorney with 10+ years experience v. a younger associate.

She has more experience, more reps, so although she costs more per hour, she does the work in half the time of a younger associate.

Once you have the reps though…you look to automate yourself if you can.

Here’s an example of a Formtoro Report Automatically generated based on a very limited data set complete with context.

This is an overview report, something good enough for the weekly marketing meeting that uses about 10% of the data we collect.

I know, I used to have to write these things weekly, I hated it.

It would take me a solid 3-4 hours on a Monday to go through all the stats from the prior week and create a report for Tuesday. It sucked, no one would read them but you’d still have to summarize everything.

The above report would have saved me all that time.

Now imagine if it used all the data we collect?

This is the unlock, it’s not overnight but everyone starts somewhere.

Innovation compounds, here’s a fascinating video around Chili’s (yes that US restaurant) automation.

This is kind of where AI is headed. A report that used to take me a few hours to analyze and write up is done behind the scenes automatically.

With the right combination of business goals (something gained from a lot of experience), automations withing platform, plus generative ai on it’s way, look out for some serious improvements in efficiency.

What I see a lot of though is software trying to just do the AI thing which is cool, but without the proper inputs destine to save a lot of time but also create a lot of work.

See ingredients analogy above.

The long term goal is the ability for anyone to be able to professionally analyze an ecommerce store with data backed guidance and strategy on autopilot.

This is the path towards automation:

Data Collection → Data Interpretation → Data Action Suggestions → Generative AI Templates → Human Curation

We're still working through manual models of Data Interpretation currently, we've done a lot, but there's a ton more to do.

Our full focus is on Data Interpretation and Data Action Suggestions, once these are nailed, then we can suggest automations and configurations within platform based on goals.

The first three parts are what's missing from most AI software.

Without them you're still just guessing.

Both Generative AI Templates and Human Curation are the easy parts.

Data Collection is technically far easier than it was in the past, but the vast majority of companies out there don't provide full context or have limited context to go along with the data collected which doesn't allow them to be able to tackle Data Interpretation and Data Action Suggestions which are necessary to fuel the Generative AI Templates.

This is the space we've been betting on for years, it's just really complicated to get it right.

The Gap

Not everyone will be able to pull this off, not every software builder will be able to create something that can actually get to this point, see above with Chili’s it’s still a person that has to man the grill, it’s just quicker and easier.

That’s going to be the role of software and automation.

Tools are always going to be in the hands of those that know which ingredients work well together that go in before the cooking process.

I’ve been talking to a lot of email agencies recently about what the future of email marketing looks like.

It looks like smart data collection, understanding how signup rates are impacted by traffic sources and quality of audience and collecting information to build out marketing strategies that influence businesses.

NOT BECAUSE OF EMAIL.

That will be automated in the future, design and all.

But because they own the popup for email.

The popup is the highest intent, bargain for exchange of information that exists on an ecommerce store.

I also think they are cockroaches I don’t see popups dying, but not for the reasons you probably think.

1. They are a work around to MAP pricing if you’re sold in retail

2. You can target them based on activities that someone takes

3. Variable offers to customers are likely the future of ecommerce as we move to a more “sales” driven economy when it comes to online shopping

I do want to highlight some big misconceptions about popups though that have been coming up a lot lately

Offering only popups to certain channels

This is great in theory terrible in practice, we have Google, Honey, Capital One, and others that just add codes to checkout. In other words if you have a coupon code box, expect people to search if they care for a discount. It’s better to allow someone to turn down a discount on the website than force people off the website to find one.

It’s true that sms has a high drop off, but also true that email does as well

This isn’t often talked about but if you lead with questions people have a far lesser drop off than if you lead with email. In fact, we’ve seen 33% of visitors provide full data, with a lot dropping off when asked for an email address.

So it’s not providing data that people don’t like doing, it’s providing data where they can be contacted that causes them to think twice.

Future of SMS

There was a post this last week that a few people tagged me on where Jeremy Horowitz was positing that SMS is the future.

Here’s my thoughts from collecting a good amount of data around it.

Historically, popups that removed SMS make more revenue about 10% more revenue.

SMS was only an indicator of intent, not a driver.

It does provide more revenue lifetime for people that buy more than once.

In a longer study, that upside was deemed worth the initial downside.

This is very brand and shopping pattern dependent.

Note: This was pre our new forms with auto apply and SMS skip to auto apply steps.

Those bump up performance around 10% and likely can close the gap, on collecting SMS. Best of both worlds.

I definitely wouldn't ask for it first though in a popup. Everyone I've talked to that prefers SMS does so for the same reason, "I get my code and it's super easy to unsubscribe"

If I was advising a brand on how to use SMS...

You can send transactional texts without explicit marketing opt-in, I'd start there to see what kind of unsubscribe rate you're getting, then people that stay subscribed through receipt of their package, target them to sign up to marketing SMS.

There's zero waste in doing it this way, you're targeting existing customers by providing value via SMS and know their likelihood of interacting with SMS generally.

Win-win.
 

The Takeaway

Have a great week!

-Jon

Catch up on past posts: https://ecomwithjon.beehiiv.com/

You can learn from me: jonivanco.com