E42: Gavin Jocius

Richard Hill
Hi and welcome to another episode of eCom@One, and today's guest is Gavin Jocius, an experienced e-commerce professional and founder of River Wise Ventures, an independent investment firm all the way from Durham in North Carolina. How are you doing, Gavin?

Gavin Jocius
I'm doing great. It's a beautiful day here. I'm very excited to be part of the show and thanks for having me on.

Richard Hill
Well, thank you so much for giving us your time. I'm looking forward to getting stuck in. So how did you get in to investing? I think it'd be great to have you go into the e-commerce side of things and how that journey looked. And obviously now you're very much into investing how did you get into investing?

Gavin Jocius
Yeah, so I ran an e-commerce company for about eight and a half years. We sold wall art, it was great big canvas, canvas on demand and we actually sold the business in October 2019. I stayed on during the transition and then sort of exited out after a smooth transition. I was also doing my executive MBA at the time and I knew that I wanted to get into the search fund world, which basically, so River Wise is two fold. First and foremost, it's a search fund, which means that we're looking for e-commerce businesses to acquire and run. And then we also have a smaller sort of venture capital side where we invest in sort of disruptive technology that uses e-comm best practices to grow. So it was just a fortunate situation of, you know, I had equity in the business and we had a nice exit and it gave me an opportunity to do a self-funded search fund.

Richard Hill
Yeah. OK, so you've worked with quite a lot of e-commerce stores then to date and seen a lot of different things, I think a lot of people listening to the podcast, they'll be in one or two positions probably whether that may be thinking about getting investment, you know, and how that looks and what sort of, you know, what are the options? You know, somebody sat there that may be doing, I know we've got different currencies here, you know, most of, I think a lot of our listeners are UK but of course we've got listeners around the world. But some of them are maybe doing that 10 million turnover mark and is looking at, you know, I guess two things really looking to get investment, but also potentially to invest in other products, e-comm stores, other disruptive tech like yourself. What sort of advice, where do you think is a good place to start with that?

Gavin Jocius
Well, I think any sort of e-commerce marketing, regardless of what, you know, geographic location you're in, I'm a big proponent of starting with the math and the math first. It doesn't matter if you're selling books. It doesn't matter if you're selling art. It is the fundamentals of, you know, traffic conversion rate. And I really look for smart e-commerce marketers that really have almost like a stats and a math background to sort of sit down and formulate your sort of multichannel marketing strategy that's built on your cost per click, your cost per conversion, and the fact that you can adjust and modify that in real time. You know, for instance, that, you know, my last job, our Google AdWords annual budget was like 13.5 million. And, you know, there's a lot, there's a lot riding on those channels. But we gave a lot of assurances, everybody involved, that we were responsible, fiscally responsible in how we manage that ad spend. So, you know, whether you're running a business, whether you're a startup or even trying to get funding, if you're in the e-commerce space, you need to be able to speak intelligently to your multichannel advertising model, the logic behind it. And you also sort of understand the nuance of how paid search influences organic, how social influences organic and sort of the assisted conversion funnel, I think is that is absolutely critical to anybody in e-commerce.

Richard Hill
Yeah, I think it comes back to, I think almost like business basics, but business basics in the new world if you like, not that it's new anymore. But, you know, if you're if you're running an e-comm store, you need to know your numbers don't you, you know more than ever, you know, you're paying for, in that case, 13 million pounds worth of traffic you can lose your shirt very easily or you can do very well. Depending on, you know, what the right levers are. So when you're looking at investing in firms, then what are you particularly looking for then, within that data or within that sort of sphere?

Gavin Jocius
Yeah, so I'll start with sort of the VC side of it. So from the VC side, we're looking for any sort of proprietary technology and sort of proprietary technology that disrupts large industries. So one of the companies that we started with is called Local Line, and they are SaaS platform for farmers and farmers' markets. They actually did very have done very well with Covid. As you know, farmers markets have transitioned online and now there's a lot of people in that space, but they've done a lot of very sort of smart features to sort of differentiate themselves and provide young technology savvy farmers with the tools that they're looking for. So, and that's a massive market both domestically and internationally. And then also a key thing is a smart founder who really believes in the product, can mobilize the truth, can sort of adjust and pivot, but also can raise money. So we look for that as well.

Richard Hill
Yeah, yeah. That's fascinating. And I think there's so many, these sort of, obviously Covid, obviously terrible, but in terms of our e-commerce and the opportunity with, you know, the example you gave of the sort of the farmers market tech, which is probably, 'oh no I'm not gonna bother with that' potentially and then now it's like, it's like front and centre. It's everything, you know. And we see that a lot, you know, with sort of the click and collect side of things in restaurant and, yeah.

Gavin Jocius
Well the very much a K recovery that we're seeing is that unfortunately, you know, you have hospitality restaurants on the lower end of the K and then on the upper side, growth is digital native eCom businesses that are just having a banner year as more of the traffic is obviously switched to e-comm. And then on the flip side, like what I'm looking at, other e-commerce businesses, sort of smaller ones, do they have a level of protection, are they selling a product very easy for someone to knock off? You know, what you typically see a lot of times with e-commerce startups around products is they get a lot of traction on social media and then all the competitors take notice. And then a month later, you have, you know, someone selling the exact same product and they're undercutting you on Amazon. So, yeah. Do you have a proprietary product that you can protect is very important?

Richard Hill
Yeah, I think that's a good one. That's, for the guys that are listening in, you know it's alright going off to wherever it may be, China, etc., and finding these products. But, you know, how are you going to protect and maintain that margin is always key isn't it, or is it just a case of, right in another 6 months we've got to find something else? And how you can use branding and IP, etc.

Gavin Jocius
You know what I've been most amazed with, like you know having been in this for about 19 years, is honestly like within the last, I want to say like three to five, the level of copycats and how quickly they can replicate that product, whether or not you're selling, you know, name something that's popular on Instagram. And the minute you put the Facebook tracking pixel on your website to monitor conversions, all that data is being sent to new competitors that are targeting your customers.

Richard Hill
Yeah, it's like a click of a button and they've got your data and they've fired off, you know, a sample to somebody else. The next thing you know, they've got a better looking SKU potentially, straight away. Yeah, that brings back memories of, I was very much in the importing and selling in e-comm and I sold my agency, sorry, I sold my e-comm businesses 12 years ago and it was, yeah, it took some doing to be fair. We did new digital frames for about two years. That's over 10 years now, 12 years ago. And the margins were crazy, absolutely crazy. I would say that's probably forty dollars and then sell it for the equivalent of about three hundred dollars some. So that was the extreme examples. And then it was like two fifty, two hundred, one fifty, break even.

Gavin Jocius
And it's, it's a real challenge because the cost per click will always naturally go up. That's basically a fundamental law of physics basically. And then with more competitors, they're going to have price compression. So you're fighting this sort of two front war to protect your margins. You know, on the front end, the cost per click is going up and when competitors come in, they're going to drive down your price and that's going to erode margins. And so it's something to be very mindful of. And, you know, those are those are conversations that if you're looking to raise money, investors are going to have those questions. So you better have a good answer.

Richard Hill
Yeah, great. So I think the guys that listening in, what advice would you give them around expanding internationally? So, you know, quite often I think most e-commerce stores start at a, you know, maybe servicing their country that they're based in. And then it's like, oh, how can we do, start adding other countries into that mix?

Gavin Jocius
I think there's a number of ways to sort of slice that. So if you're selling products and SKUs, obviously the most obvious one is, you know, taxes, tariffs and duties, you know, hire a professional to really just sort of give you a sense as to like that side of it, which can be a complete hornet's nest. And you don't want to find a situation where you've expanded international and you run into tax problems. So that's an obvious one. But it's worth repeating. You know, I was in charge of all the marketing for Lulu.com, which is, you know, self publishing book platform. So we operated in five languages, eight international markets, five currencies. And but that took a while to get to that point. So my advice is pick one international location that you have some level of expertise in and expand, hit your KPIs in that market before you stretch yourself too thin by trying to launch in like five different markets at once. The the other thing from an e-comm standpoint that I think is incredibly important is what's your keyword strategy and, you know, your AdWords campaigns in those countries. So, you know, you guys deal with it every day if you're advising clients on paid search. But, you know, what is the cost per click in Canada look like in Australia versus the United States on your terms? So when we expanded our art business into Canada and Australia, yeah, we found a local manufacturer to manufacture the product, but we also registered our trademarks in those countries so that we had a level of protection as I start advertising, you know, canvas prints in Canada and my competitor starts bidding on that term and potentially violating, you know, Google's advertising policies. I have that protection. So, you know, summarize there. It's obviously taxes, tariffs, duties. Find a local partner that's good. Don't bite off more than you can chew. Register your trademark in those countries.

Richard Hill
And make one of those territories work first, I think that's the great one because people think 'Yeah we'll go into these five countries and then there's five times everything to do in but is it five times the pain before we've even found the successful one and quite often, I mean, that can be the case. You know, 'oh let's do a Google Shopping in every European country'. OK, hang on a minute. We didn't take into account that X, Y, Z, regroup, in the meantime, we've lost one hundred grand, whatever it may be.

Gavin Jocius
I'm glad you said Z (Zed) too, because that's another thing is, us Americans tend to be, I'm actually American Canadian so I have two passports, so prefacing with that, is just like little things like American English versus the Queen's English and like, you know, you've got to spell colour differently.

Richard Hill
Yeah, yeah, yeah, yeah. That's actually well, I was looking at a client site actually yesterday with one of our account managers, and that was something we spotted, that it had been spelt, it's a UK site, but it was spelt in the US way and we were like they must have a US copywriter doing that.

Gavin Jocius
Yeah, I think maybe the last thing too is the obvious ones with GDPR and, you know, also just, you know, rules and legislation around consumer data. I mean, even if you're in the U.S., you should be GDPR compliant because it's probably, you know, European Union citizens on your website anyways. But it's not something to take lightly at all.

Richard Hill
So I guess we covered a little bit of it, but when a company is looking at sort of a global, g-local strategy to expand internationally, how does a company know which one to choose, you know, are they looking at, you know, what what would you say about that?

Gavin Jocius
I would honestly take a math approach first and take a look at the market that you operate in. So if you're in the United States, you know, how big is that market and what's your market share? Because I think people tend to get starry eyed about like, all right, we need to go international. But if you only have like a three percent market share and like a multibillion dollar market in the United States, like, you haven't even scratched the surface. You know, the way that I've looked at it is, all right, if we're getting solid growth in the United States and if we're tackling this large market and our market share is below five percent, we have a lot of runway ahead of us. You really should be looking international when you've exhausted sort of all of your options domestically and you're sort of in need of growth because if you think about it objectively, you know, you probably are well, well better positioned to go after market share in a country that you know, that you already have the infrastructure set up going in and trying to chase growth in a country that you're going to be potentially behind on.

Richard Hill
How would the listeners try and find out what the potential size of a market is, I think, or total available market, or TAM is a term we use quite a lot here in the U.K., you know, somebody, they're in the U.K. now they're looking and they're doing very well, but they want to see what the opportunities are like in the US or states in the US maybe or Canada or whatever it may be. You know, what's one of the, what would be the sort of actual things that people could do to try and figure that out? What would be a start point there potentially?

Gavin Jocius
Yeah, when I've been building sort of go to market strategies for a board of directors to approve it and to sort of quantify the total addressable market and the growth drivers. I found Ibis World to be a great source. Now, I hate giving out extra business, but it's it's good. I mean, it's subscription. I want to say don't quote me on this, but it's a couple, of couple of grand a year. But it is great for reports to say, OK, you know, what is a total addressable market? What are the growth drivers? You know, what is the five year outlook look look like? And it's a good, objective source that's reliable consumer data that you can sort of bet on as you sort of build that that that case to sort of, you know, quantify the market opportunity that you're going after.

Richard Hill
Yeah. So there's that sort of professional services and subscriptions that you can sign up for that'll give you that data, that heavy lifting sort of thing. Yeah.

Gavin Jocius
And then, two, I mean, if you're in the e-commerce space, I mean, take a look at what is the keyword universe look like in the, you know, type of business and products that you're selling in those countries? You know, I use Spy Fu, I use HREFs, I can imagine, you know, agencies like you guys that can basically say, all right, here's your keyword universe, and this is what it's going to look like. And then also, you know, how many people are searching on your existing keywords in those countries and then simple things like log in to Facebook and start building out some campaigns in that country to sort of see, you know, how many people are there that sort of fit your core demographic. So that you can start to make informed decisions on the type of sort of variable ad spend you're going to need to sort of hit critical mass in those countries.

Richard Hill
It's coming back to some sort of old school spying. And you said Spy Fu, that's been, that's been around for a long, long time. And it's going to continue. And the agency uses HREFs for many things. But Facebook Ad Library is probably another one you see, if you know people selling your product in a different country up and running ads for the last three years, you'll see it in the Facebook Ads Library. Or some of it. You know if an ad's been running for six months it's either, you know, it's usually profitable or somebody's not doing a very good job if it's been running for nine months. But, yeah, a lot of opportunities there. So, that all said, you know, you've done your research into it, into a new country, a new territory, or a new area. And then unfortunately, you know, things don't always go to plan as we know, you know. And we hit various, whether it's regulatory things that we might have missed or whatnot. But obviously you will have seen a lot of different things that you know, your clients and people you work with have come across some of the specific challenges that you've encountered and you've overcome over the years you've been doing it.

Gavin Jocius
Yeah, I got a great story I'd like to share. And it's about cultural nuances that you deal with. So, you know, November 11th is Armistice Day. You know, it's the anniversary of the First World War in Canada, the same as the U.K, I mean, we wear poppies. We have a moment of silence. Like, you know, Remembrance Day is very sombre. You know, you remember fallen soldiers. Not to say we don't have that same thing in the United States, but on Veterans Day, it's a day to shop. So we have Veterans Day sales. And so I learned the hard way, do not run a Veterans Day sale in Canada on November 11th. I mean, it just backfired like no one's business. In the States it was awesome. But it's that cultural difference. And don't get me wrong, I mean, in both all countries we respect, you know, we remember, you know, the amazing service that, you know, veterans have done. But it's just this mindset of, ah, actually, no, we're going to, we expect sales on those days in the United States. And then the other thing is, is November 11th in China is Singles Day. It's the largest shopping day in the world. It like eclipsed Cyber Monday by like 4x. So, I think that's a good sort of like story about how a single day can have profoundly different sort of cultural implications across the world. And it's a reminder of like you need to know those nuances when you go into a country, when you market, when you try to target customers there, because something that you may think is completely harmless could have a terrible backlash on your brand identity. If you come marching in there, as you know...

Richard Hill
You've got to do your homework. haven't you. You've got to, it's that localised, you know, different countries have got different things to celebrate and obviously celebrate it in a very different way. So it's understanding that and doing that research. Absolutely. I can see that. Because we've both got Black Friday, but, you know, I think ten years ago it wasn't much of a thing here, whereas now it's just madness, it's great.

Gavin Jocius
And it's the same as in Canada. I think you guys have Boxing Day, too, right?

Richard Hill
Yeah. After Christmas Day. Yeah. Yeah.

Gavin Jocius
So like we have Boxing Day sales that we target to our Canadian customers. And then in the States, it's just, you know, I'm just recovering from Christmas.

Richard Hill
Yeah Boxing Day's when the sales start. But then every year now they start in November pretty much. It's like Boxing Day sales then it was you know, Black Friday is the big one really now. And between Christmas and New Year, I think is that big go to the shops type time where a lot of the actual stores have big sales and obviously e-comm it just gets earlier every year really. But yeah, Boxing Day sales is the big thing on the TV here for a lot of the sort of bigger house products like and settees and stuff like that. That's a big thing. And holidays is a massive thing. The New Year's come in. Everyone's been home for a week and thinking about their holiday for next year so that, those holiday adverts are always the big ones at Christmas as well. Yeah. So OK, so that localized understanding, you know, if you're trying to put products into, into, into China, you know, there's going to be a lot of things you just will not know unless you do your work. So like anything running a business, you know, there's time you've got to spend learning and understanding and obviously probably speaking to people that are doing it is probably I find, you know thats's something that I'm big on, investing in mentors or people that have done that. And, you know, people that are already, you know, doing selling into China, America, Canada, UK, whatever the country that you're you know, it's sort of a how would you say people could go about sort of getting maybe out of an adviser or somebody to help them with that process?

Gavin Jocius
I think it depends on the size of the business. I mean, a lot of these sort of smaller sort of micro e-commerce companies that I've seen for sale that are like in the, you know, a million to like three million in annual revenue, have been working a lot with digital assistants, you know, both to sort of handle their e-commerce, but...Yeah, like Upwork. I mean, you know, I even had a stats professor in business school that had like an Upwork, you know, statistician, PhD student that spoke fluent English in the Philippines that was basically helping out. So I think the sort of gig economy of you can find incredibly talented people in just about any geographic location to not only help you sort of prove or disprove hypotheses that you may have about, like a market opportunity, but like with your customer service, with your social media posting, you can vet them like anything and like Uber drivers, they'll have star ratings to see who's good and who isn't. But, you know, my my sort of thesis on e-commerce going forward, more so than ever, is that you can have an almost entirely virtual staff, you know, and hire the best talent. It's just basically like, hey, we're going to have virtual scrum meetings, you know, on Mondays. And my team is basically all over the globe. And, you know, you're having potentially fulfilled through Amazon and, you know, all of your ad spend is being done remote. So I would, I'd encourage folks to potentially take a look at Upwork and other sort of gig economy freelance solutions that are out there. But then obviously, I mean, if you're a multimillion dollar major company, then, you know, seek out folks to potentially hire an agency or to bring in-house.

Richard Hill
I think Upwork, that was oDesk, wasn't it, now Upwork? Yeah, yeah. So, yeah, it was oDesk. And it's something we've used probably five or times as an agency, more so previously. We do use it still, so I would very much recommend that as well. Getting those like you say, you can get people that are, you know, some of the time that you can get them in some of the projects that we've worked on over the years. But we've definitely used it for research ourselves, not for international sort of research. But, you know, initially in the early days, like competitor research, we split our agency into two, I think two and a half years ago, we had somebody on there looking at e-commerce agencies, specifically what strengths, weaknesses, SWOT analysis, various other things, look at the website strengths. And then when we we developed our first site for our second agency, we use some of the information from that. It's amazing, isn't it? Like you said you've got star ratings, you've got different price brackets and you've got five dollars an hour and obviously hundreds of dollars an hour. But it's such a raft of options in there sort of depending on your budgets and things like that, you can get started very, very cheaply potentially you know and dip your toe in that research space without spending thousands potentially, if you're doing a million pounds a year, you're not going to want to spend 50 grand to find out that China is not for you. You want to spend a couple of grand, maybe a few hundreds of dollars just to start some things and find out.

Gavin Jocius
Well, I'm a huge fan of sort of growth hacking to prove or disprove hypotheses that you may have. So let's say, for instance, you're an e-commerce site and you want to expand into Australia, you know, set up a landing page with information to collect email addresses and set up a Facebook campaign targeting people in Australia to just say, hey, be in our VIP list to learn more about our product launch. It's going to happen potentially dot dot dot. And then, you know, just do a lead generation campaign in that location on Facebook to see what's your cost per lead, how many people are interested. And that'll start to sort of give you at least some hints as to what your cost per click is going to be and what the sort of general interest rate of interest is and then sort of use, and be more firm in these hypotheses that you have for your go to market strategy. Because I'm a big fan of like the sure bet since Malcolm Gladwell article, that is, you know, it's less about risk and it's about sort of working towards collecting as much data that an opportunity becomes a sure bet. So what are those sort of baby steps that you can all sort of growth hack your way into proving or disproving if something's going to be a good idea or not.

Richard Hill
That's great, I think that's great advice, that's great advice full stop whatever you're trying to do, you're not going all in, you're testing, testing, testing. And the you go 'oh hello, that's actually and opportunity' or maybe not, next one.

Gavin Jocius
I mean, I'd rather potentially, quote on quote, waste, 20 grand or ten grand on a test marketing campaign than to hire like an Australian fixer, go through all the rigmarole of said it, and then just have it flounder when you when you try to launch.

Richard Hill
It's a bit like our strategy as an agency with without paid ad account, because let's say somebody's got a hundred grand a month spend and we will allocate a budget there, the testing side, and some stuff will naturally fail. But a small amount will fly and then you take 10 percent and 20 percent and you reinvest the main budget into the areas of the test campaigns. You know, this new this new smart shopping let's try. Then, oh, actually, it works! We're not a massive fan of smart shopping, but sometimes it has a, it has its place. And we've got to test it and iterate and change, you know, and we've been testing some stuff recently around with a lot of different conversion acts and actions and almost tricking Google smart shopping, shopping to think there's a lot more conversions in the last years so then... and we've been getting some success with that, limited but it's like, oh well, actually, we might have something here where we just do the same old thing and not look outside the existing sort of the routines that we're doing. Just going to be going after the same traffic in the same areas that everyone's going for. Whereas if we're able to test some things and find and maybe get a six month jump on everybody else on the new thing or. And just having that, I think that's a big thing for a lot of entrepreneurs and e-commerce store owners. You know, typically, you know, they they are sort of quite, you know, a little bit of risk because they started an e-comm store and quite often quite a lot of our clients you know, it's like a back bedroom idea. Fast forward five, 10 years or even five months or two months. And, you know, they're doing five million, ten million quid a year, whatever it may be. So you know they're quite open to. Oh, yeah. And they can be quite nimble and you can have that sort of attitude you know, it's great to see.

Gavin Jocius
Well, the way I would articulate that is you basically need to have a part of your budget set aside for small bets, like ecommerce changes so fast that you need to have your tried and tested true channels that are generating your revenue. But every month, just making these small bets on different geo fencing, you know, just experiments that if they fail, fail quick. But if they start to show a good return, then you ramp up spending, ramp up spending, ramp spend, because you've got to you got to get that three to six month head start on your competitors on that new channel. Like I look back on early Facebook ad days when we were really, really early on and just generating an amazing return. Like and then the entire world just jumped in and, you know, took notice. So, you know, make small bets and small bets can turn into big safe bets if you do it right.

Richard Hill
So, e-commerce store, what would you say some of the keys for growing, what are some of the key things that you've seen? And the sort of consistent patterns that you see in stores that are doing well and that want to grow further. What's some advice you would give?

Gavin Jocius
Yeah I mean, the first and foremost with any e-commerce business, in my experience, is all variable ad spend. Like that is the key to e-commerce. It's your basically your CCAC to LTV ratio. It's what private equity investors look at at e-commerce businesses. And what is that ratio and how well do you know it. And it's you know, what's a channel that for every dollar I spend I get four dollars, like go nuts. And I tell people that if you have good sound financial math that supports your variable ad spend, you should not ever have a budget.

Richard Hill
Yeah, unlimited.

Gavin Jocius
You know, it should be unlimited. It literally should be like if you can if you can put a dollar into the machine and get four dollars back at high margin, put as much money into that machine as possible.

Richard Hill
It's every conversation with every client. It's like well what's you budget? Well it's unlimited if you can get me a 7x ROAS. Well, obviously it is.

Gavin Jocius
But there's that. And then obviously conversion rate has the greatest impact on the bottom line. So if you look at sort of the holy trinity of e-commerce, it's, you know, traffic AOV conversion, conversion if you adjust that slightly will have the greatest impact. So I tell people, take a look at your Google Analytics funnel where are people dropping off, run experiments, you know, add Optimizely to your website and run multivariable variant tests because we've had where we've made slight adjustments to our conversion rate, it's for business. People want fast, easy websites. So literally do everything in your power to make it the most frictionless experience that I told my dev team. I want people to be able to butt dial and order canvas. Like that's my direction. I want it to be so easy for you to check out, but you focus on those fundamentals. I think that's that's really the key to growth.

Richard Hill
We'll probably stop, pause the episode and think, right, okay, yeah, we want to spend more. But what if we could 2x our conversion rate or even half x , take a two percent to two and a half percent. Well, if that's a hundred grand a month it's down, whatever that is. I can't think. A hundred twenty five grand a month, you know rather than always focusing on the ROAS and always, always focusing on the on the ads, obviously the ads are a massive part of any e-comm store, that, you know, that cites the, those tests that those tests, that check out process will actually, you know, look at the data, are we finding match the anybody else that is actually finding that there's a pop up coming up from the chat box in the check out or whatever it may be? You know what if you tweak, tweak, tweak, that compounded effect of three or four tweaks or tests that the point out the point here taken two percent or three percent or four percent, double a business you know that's something we don't talk about too much on the podcast to be fair. It's a fascinating topic. I think that where, you know, there's those key levers that most people are just so obsessed with over here and that, you know, that maybe ad spend, and these are yeah, absolutely rightly so key things, but those are the levers that just don't get looked at i don't think.

Gavin Jocius
Well, you can take a crappy agency and you know, have to manage ad spend for an amazingly converted website and they're going to look like rock stars. I mean, it is, you know, what type of traffic you're sending to the website, but what's the experience when they're there? I mean, one of our websites, we did like thirty million dollars in annual revenue, but when we looked at our abandoned carts, there was like three hundred million dollars worth of abandoned carts just sitting there. And we were like, if we improve that by like one percent. You know, so that's where you kind of really need to put on your data nerd hat and really see like where people are falling off the conversion funnel.

Richard Hill
I mean, absolutely that abandoned cart piece. If you're not using an abandoned cart strategy, you're just about to make a lot of money.

Gavin Jocius
Without question. Absolutely without question. And in some cases, it's just little things just, that like, small frustrations. It's not less about price and it's less about shipping. And it's just, you know, the convenience factor.

Richard Hill
Yeah. Yeah. So I know when we've researched what you what you do and some of the projects you've worked on and a little birdie tells me about the project that you mentioned actually the Lu- Lulu - Lula?

Gavin Jocius
Lulu, Lulu.

Richard Hill
I should know that, I think it's the same firm that do the print on demand books.

Gavin Jocius
Yeah. Exactly.

Richard Hill
I actually used them back in, see this is eleven years ago.

Gavin Jocius
Wow, I mean they, they say don't judge a book by its cover but with self published books you need to have a good cover. So I'm going to go ahead and say...

Richard Hill
Eleven years ago. Yes, eleven years ago. But yeah but I know you obviously, it was a very sizable campaign and they and I know specifically you worked on that email while the email marketing campaigns increased and you know the sales from that by about 51 percent I think the numbers are. What was, can you talk us around that and the sort of things that you did there?

Gavin Jocius
So a general theme that you'll get from me is I'm a fundamentalist. So when it comes to e-commerce, like conversion rate, AOV, ad spend. Yeah. And then with email, it's all about deliverability. So that increase literally was taking a look at our deliverability rates with our current email provider and then migrating to a new provider, putting them on a dedicated IP and really working towards having a very, very clean sender score for the IP that we were sending from so long and short of it is like. We had developed this terrible reputation with our incumbent, you know, email provider, and that became obvious. And my advice to anyone in email marketing is it's about inbox delivery. You can have beautiful email creative, but if it's in the junk folder, no one's going to see it. So in the same way, I would encourage somebody from a marketing standpoint to hire a statistician or a data person to help them build their the math behind their advertising campaigns. Hire a deliverability nerd, as you know, your email marketing professional, or just really put a ton of pressure on whoever your email provider is that you're on a dedicated IP that has been warmed up, that they keep a you know, they look at abuse rates because, you know, spam filtering is just getting smarter and smarter and smarter. And, you know, it's just going to be a cat and mouse game of making sure that you hit the inbox.

Richard Hill
So, if you're listening to the podcast, how many of you honestly have been checking your delivery deliverability rates, you know, it's alright checking your click through rates and open rates. But the reality is if you're sending 50000 e-mails or whatever that number is, but they're not even getting there of you know, that, you know, you just banging your head against the wall, really just sending to the same debt and in effect so I think that's a great bit of advice.

Gavin Jocius
Well, the other thing, it's like the abuse rates by different ISPs. And even back when Gmail before Gmail had like the priority folder, we would do tricky things. And this is not spamming because this is opt in where we would send our most engaged, highest open people first and the lowest people later, because Gmail spam filtering used a lot of signals to determine whether or not that would go in the junk folder or not, so there's a lot of just, you know, so everything.

Richard Hill
So it's about getting a lot of opens with your first email, will will encourage the second set of emails to be opened. Or to get through in effect. Yeah.

Gavin Jocius
Yeah. Like you don't want to send the people that never open your emails first because Gmail basically says, OK, someone doesn't want to open this, so I'm going to defer. But this is essentially spam. You know, emails are a real tricky mistress that way in that it is this constant way of making sure that you're getting people the messages that they want to receive in the inbox.

Richard Hill
I think a lot of e-commerce still is, I think with their email strategy, you know, they spend so much time on the look and feel, you know, it it's just this big design piece in it and then it's sort of overshadowed or just too big a bloody email to get through, they haven't thought of that technical piece. Oh yeah, looks great. There's like, there's like twenty seven images in there but there's not even a product shot or whatever it may be. Yeah. I see that a lot. Yeah. Yeah.

Gavin Jocius
And I tell people when you do html, when you do an email code like it's 1998 basic html, not a lot of excessive code, not a lot of heavy load. You know, be smart about the absolute your rules that you have in there. Be mindful of the language, the terms that you're using. Yeah, simpler is better to be honest.

Richard Hill
Great. OK, so quick final round. We've got a couple of questions to go. There's been some fantastic takeaways so far thank you. So social media. What would your advice, would you give to people in e-commerce stores trying to really cut above that sort of noise out there, obviously so much going on social media. That attention span. What advice would you give to e-comm brands trying to get out there?

Gavin Jocius
Well, you said noise and there's a lot of noise on social, and when you're dealing with a noisy room, be the loudest talker. I'm actually going to give you a sort of different advice in the sense that we're we've done very well on social issues when we spend a lot now that you have to make sure that the ad, the ROAS works. But basically, if you have good creative that resonates with people and if you're getting a good response rate and if your math holds, spend. So like Cyber Monday, we had some campaigns that were just doing extremely well and we sort of elevated above the noise by being the noisiest person in our particular, you know, field, to make sure that we sort of, you know, hit our target market.

Richard Hill
Fantastic, fantastic. OK, so lifetime value, you have touched on this, obviously, it's a huge thing. I think, you know, people that are running a business are all about getting a sale, but what else? You know, it's not just about getting that one sale is it? That's the reality. And that's where I think a lot of people miss. What sort of advice would you give to e-comm stores trying to improve that lifetime value?

Gavin Jocius
So lifetime value is not going to be the same for every segment. So I'd say start by doing a decile analysis of your whole customer base. So decile is 10 and basically you want to break your whole customer list into the 10 deciles, number one being your best, you know, the highest LTV. You know, the customer's available deciles two through like five or sort of that mid range. And then you can have deciles like eight, nine and 10. These are just people that came in once, low lifetime value. They may never come back again. And so what I like to do is slice and dice those deciles and sort of figure out what the LTV is for them. So decile, like two, for instance, could be OK, we can get them up to number one, but it's going to require some upsells. And I think that each one of those different segments are going to not only have a different LTV, they're going to have different motivators. They're going to be more inclined to upsells that you can sort of increase that lifetime value. But it's it's a math exercise. You know, I sound like a broken record, but that's what all this down to.

Richard Hill
I think it's good. I think that's great. Because the end of the day is about maths. All businesses in a way you know you've got to know your numbers, you've got to know what's working and what's not working, rather than just find out too late that it's not working

Gavin Jocius
The same thing, too is like deciles eight through ten. If they're on your email list and they're never opening it, that's wasted money. And that's bad signals that you're sending to the spam filters. Like we had some people in those lower deciles that we'd send them a hundred emails a year and they'd never open. It's terrible for for Gmail spam filtering. So we would do a make up or break up email and say, hey, this is your last shot. And, you know, kick them to the curb.

Richard Hill
So that would be sort of, click here to stay on the list or bye bye sort of thing.

Gavin Jocius
Or bye bye. Because it's just basically a lot of it's dead weight. And I hate turning away customers, it seems like counterintuitive. But you're going to just have some folks that, you know, they're gone and they're not coming back. So why incur the cost, you know, financially, but also the your reputation as a sender is going to be impacted.

Richard Hill
Yeah. Yeah. Well, Gavin, it's been an absolute pleasure. We absolutely rattled through that. Feels like we've been on here about ten minutes. But we are, we are there. There's some great takeaways there, thank you so much. Now, we always like to end every episode with a book recommendation. Doesn't matter what it is. Doesn't have to be e-comm. It can be whatever you would like it to be. What's your sort of go-to recommendation.

Gavin Jocius
Do I just get one? Because I've been hammering through books recently

Richard Hill
We're not that strict so you go for it.

Gavin Jocius
All right. Yeah. Just because I wrapped up my MBA and I got a lot more free time to read for pleasure now. But I'd say from a from a business standpoint, you know, some of my favourites are Contagious - Why Things Catch On with Jonah Berger. It's a little bit older at this point, but he's a professor of marketing at Wharton. And it's just a phenomenal book and just research on how ideas and concepts go viral. Scott Galloway's The Four - the Hidden DNA of Amazon, Apple, Facebook and Google. It's quite critical of all of them. But if you're sort of a nerd when it comes to the DOJ and a lot of these antitrust lawsuits that are hitting right now, it's sort of a fascinating look at sort of the monopolistic practices. And I think you're going to see a lot more of that with Amazon and AWS particularly now. So that, that I find is fascinating. And then on a personal read, I'm a big sci fi nerd and I just finished The Three-Body Problem, it's a Chinese author. It's mind boggling. Netflix just gave the show runners for Game of Thrones a billion dollars to turn this sci fi into a Netflix series. And it is mind expanding. Incredible. You know, if you like physics, you like hard sci fi. It's wow, it's it's dense.

Richard Hill
Yeah. I think a lot of our team are sci fi nuts, so. Well, that will be ordered and probably three or four of those'll be ordered in about five minutes time.

Gavin Jocius
I saw I did my research too. And one of the thing I liked about your agency is that you guys are big on originality and geekyness. So any time you want to geek out, this is The Three-Body Problem trilogy and its for total nerds, and you'll love it.

Richard Hill
Yeah, we've got plenty of them. Well, it's been an absolute blast Gavin. Now for the guys that are listening that would like to find out more about yourself, what's the best place to do that and to reach out to you?

Gavin Jocius
Yeah, I'd say on the sort of VC side of things, riverwise.net is our website and, you know, get in contact with me on LinkedIn if you want to, you know, bounce off ideas. I'm always open there and then actually run a podcast myself, Wisdom.MBA. It's on Apple and interview business leaders and talk about a whole host of different things. But yeah, this has been an absolute pleasure. And yeah, I love the well researched podcast and the great conversation.

Richard Hill
Thanks Gavin it's been an absolute pleasure. Thank you very much.

Gavin Jocius
Take care.