Here’s what I learned this week

I made a mistake with zero party data.

I was too close to the problem to see the issue with what was going on.

The learning is a lesson that I usually teach others when consulting, but I missed it myself because I was too close to the problem.

Pushing a boulder up hill vs. creating a boulder that slowly rolls downhill to pick up speed

This isn’t going to be a conversation about freemium v. paid.

You should always have a paid product, I do believe in a free trial though when you’re starting out.

There has been a shift in the market thought where it’s turned into people trying products and cycling through lots of them in hopes of unlocking short term wins and gains.

This mindset has stifled what should be short conversations into longer ones that require deeper understanding.

My thoughts on zero party data use are well documented.

To me, it’s the smartest thing a marketer can collect.

It has been crazy useful for me to work with companies and provide suggestions based on the data and context collected. It makes me a better marketer.

The problem is my approach with go to market was all backwards.

My assumption was that everyone was at the same point in understanding it’s power as I was. This simply isn’t the case.

This puts me in the minority, which is OK, but it is also trying to push a boulder uphill.

When you’re looking to wholesale change the approach of what people are used to, by changing the core behavior of an existing website element, you’re challenging nearly 30 years of internet marketing practices.

I’ve written before about how I thought this was an education problem.

I no longer think it is.

I think it was a fundamental problem with our solution that forced people to take too large of a step towards proper marketing.

It took me 4 years to be able to take a step back and say, “Look the goal is zero party data over the long term, it’s going to happen, it’s the smart thing to do, but the current market is obsessed with quick wins rather than smart long term business strategies particularly because what worked to get them to this stage will not work long term and they are feeling the pain of one bad quarter away from going out of business all the time.”

The switch from pushing uphill to looking for leverage to fix something already being done the vitamin v. painkiller argument

Do you need zero party data to succeed? No.

People have been doing well without it for a long time, guessing works, every once in a while you get things right.

But working with common perceptions of how to succeed in ecommerce there are certain things that brands are told they do need:

1. Ads

2. Sales

3. Profit

4. Email List

5. SMS List

6. Attribution

7. Traffic

But there is confusion amongst brands in understanding how all this fits together.

Here’s the best I can figure is the current understanding of these things.

Ads

Why people think they need ads:

We need ads to drive traffic to find people to buy our stuff.

Why people actually need ads:

We’re too lazy to figure out where our audience hangs out and create content that resonates with them and places our brand top of mind related to the lifestyle activities they participate in and listen to that community to create products that are beneficial to the broader lifestyle segment with the aim of finding other complementary lifestyle segments to move into over the long term.

Sales

Why people think they need sales:

We need more sales so we can make more money.

Why people actually need sales:

We need sales to figure out what products we offer resonate the most with our core audience that we’re targeting. Sales data will then be used to allocate our resources more appropriately, focusing on those personas that most carefully match who our target audience is, this group of people identified through our sales and customer growth programs will influence our roadmap of future product offerings and content marketing relevant to that lifestyle.

Profit

Why people think they need profit:

We need profit to keep the lights on and not go out of business.

Why people actually need profit:

Market demand is a fluctuating beast that can turn on a dime around broader lifestyle changes and segments, profit is the measure of whether or not the industry or lifestyle is oversaturated or not. If an industry is oversaturated then profit is much harder to come by due to increased competition. Profitability generally speaking is the position of a brand in a brand segment where awareness and appreciation can command a higher price than similarly constructed items using the same materials.

Email List

Why people think they need an email list:

We need an email list so we can market to people and remind them to buy our products.

Why people actually need an email list:

The whole point of collecting emails via a popup is to provide something to derisk a first purchase and get product in hand, it’s not to send emails.

90% of all revenue generated from email campaigns comes from people that have already purchased and the vast majority of those do so within 45 days of signing up via a popup for an offer.

If someone signs up and doesn’t purchase in 45 days there is a strong correlation that they did the same thing on another similar website and made a purchase somewhere else.

Unfortunately, you’ll never know.

To me the email list isn’t about sending emails, it’s about providing an incentive in exchange for data collection to better understand the quality of the audience in a way that never loses sight of the desired outcome of a sale.

SMS List

Why people think they need an SMS list:

We need to collect SMS because then people will buy more from us because we’ll avoid their cluttered email inbox.

Why people actually need an sms list:

It’s just a marker for people that are high intent. But when you look at the whole process of sms collection including Postscript and Klaviyo’s new 2 factor auth or one time use code for verification plays, you’ll realize that the journey stops at that step. This is cool because it keeps people on your website.

No one is talking about the 60% of people that drop off at that step though and don’t get anything. (Remember that analogy of pushing a boulder down hill, yeah, we figured out a solution to this gap.)

You don’t learn anything from an email or sms alone.

An SMS list is great for people that have already purchased and love your product and prefer to be contacted via text, but if you study unsubscribe rates, you’ll start to see that there is a universal problem in how we approach sms.

Sign up rates are less than 50% on popups and unsubscribe rates are about 50% within the first month too. It’s just too easy to unsubscribe.

So the churn on the list is serious, which makes me question when is the best time to collect phone numbers…

Attribution

Why people think they need attribution:

They want to know what’s working so they can spend more money on it.

Why people really need attribution:

People really need attribution to understand where the highest quality audiences are coming from that most closely match the lifestyle that they are catering to. Attribution isn’t about money or dollars, it’s about quality of audience.

ROAS and performance isn’t measured in a 1:1 format, instead it’s measured in a format that more closely resembles action to 180 days repeat value with variables kept consistent. (which they never are)

We need attribution as a score of the audience that we’re driving and the messaging that we’re using to resonate with that audience over longer periods of time.

Traffic

Why people think they need traffic:

The more people that seem my products the more will purchase them.

Why people actually need traffic:

Is my content relevant to the audience enough to encourage engagement or fandom with my brand? That’s it.

If you want a lot of traffic you can buy traffic campaigns on Facebook and drive a ton of people to your website, but that traffic is often low quality, so turns out you don’t really need “traffic” you need instead a quality audience that is likely to bond with your brand and lifestyle and be interested in making a purchase. So a quality of audience.

Why this shift matters

I can fight the above, I can debate all these elements and their worth, I don’t have an issue doing that.

The problem is that it’s a fools errand to do that.

It’s smarter to find one thing that is being overlooked that’s costing people money that they can relate to personally, then look to solve for that one thing before introducing smarter business logic.

Rather than push a boulder uphill, you need to find something that can be implemented with little effort that has an immediate positive benefit, where the results can not only be tracked easily, but the underlying technology allows for expansion to more deeper learnings when the time is right.

We have something special coming in a few weeks that will change the course of what was possible with popups and I think it’s going to be the start of adoption and shift prior to data collection and zero party data.

The Takeaway

Go unlearn something this weekend, browse some ecommerce websites, figure out how bad the experiences are.

Have a great week!

-Jon

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

You can learn from me: jonivanco.com