Elite eCommerce Strategy featuring Nathan Perdriau (Blue Sense Digital)

Have you ever wondered why some e-commerce businesses skyrocket while others plateau?

The answer lies in the metrics they prioritise and how they execute their strategies, especially during high-stake periods like Black Friday.

Ryan Martin sat down with Nathan Perdriau, co-founder of BlueSense Digital, who has plenty of insights to share after years of navigating the choppy waters of digital marketing and e-commerce.

Our conversation starts with an insightful look at the importance of focusing on Marketing Efficiency Ratio (MER) and Customer Acquisition Cost (CAC), as opposed to in-platform Return On Ad Spend (ROAS).

Nathan’s expertise in managing privacy settings and complex customer journeys shines through as he reveals his strategies for staying focused amidst the challenges of running an agency.

He shares his unique perspective on attribution and understanding customer journeys that can help you stand out from your competitors.

But the knowledge doesn't stop there. Nathan also shares his rigorous approach to Black Friday and creative advertising.

If you're in the dark about when to launch your campaign or how long you should extend your Black Friday period, Nathan's insights are a must-listen.

See Nathan's video on his advised BFCM campaign launch video here

He also dives into user-generated content, revealing why it's the ace up the sleeve for many successful brands, and how to avoid common mistakes when onboarding new clients. 

Finally, we delve into the key e-commerce advertising strategies and emerging industry trends that will keep you ahead of the curve. 

Nathan sheds light on the importance of unit economics in scaling a brand, the untapped potential of YouTube Shorts, and the need to stay updated on the latest trends. 

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Transcript

Ryan Martin : 0:03

This week. I'm excited to introduce you to Nathan Perdriau. Nathan is a co-founder of BlueSense Digital, a performance digital marketing agency specializing in scaling e-commerce brands through ultimately, paid strategies. I actually reached out to Nathan as I love the content he writes on LinkedIn and, truthfully, I love how transparent the BlueSense Digital team are around their results and their processes. So really looking forward to chatting and hearing Nathan's insights into the year so far in e-commerce. So, mate, a big welcome to the podcast. Thanks for having me. I appreciate it. I was looking forward to learning more about yourself and how you found the year and some issues with the clients. But a little bit of background, mate how did you get started and what's your sort of background? I guess you grew up in Melbourne, boy initially.

Nathan Perdriau: 0:56

Grew up in Melbourne Yep, that's correct. And then, probably about three and a half years ago now, maybe four years ago, I got into e-commerce. So started off with the basic drop shipping model, where you're not actually holding stock, just moving stock straight from China to the consumer, and was doing that through Google and Facebook ads primarily, moved into actually holding stock for a few brands, was doing quite well, but then just found myself not enjoying a lot of the aspects of e-commerce which we can go into further detail on later. So we pivoted into the agency space. I partnered with my business partner, sebastian, who leads up on all the sales and business development side of things, and then I'm on the actual core service delivery.

Ryan Martin : 1:39

Yeah, fantastic. And how have you? So? You guys have been going about 18 months. How have you found the agency journey so far? Can it be a great one? It can be a tough one all in a day, basically.

Nathan Perdriau: 1:53

Yeah, it's evolved a lot. My role is obviously, as you could probably imagine, it's changed every three to six months, but it's been a super exciting journey. At the moment, I'm predominantly on systems building and header paid media, so just managing the paid media team and upscaling everyone, which has been really rewarding, obviously taking on new people on the team, continuing to grow and then continuing to upskill them into seniors and beyond.

Ryan Martin : 2:19

Right before we get into the e-commerce side of things, I'd like to kind of learn a little bit more about the individual. So what do you do on weekends? How do you sort of get away from e-commerce? How do you relax? What sort of things are you into? I'm not going to have a good answer here. I'm not going to have the answer you're looking for.

Nathan Perdriau: 2:39

But I just work a lot. Yeah, I'm probably one of the most boring people you've met in terms of since we started the agency. For the last two years it's just been super working all day, every day. Really, I'm into my fitness. I'm obviously the gym affair bit was into jiu-jitsu for a while. But that's. I don't know if you know anyone that does jiu-jitsu. It's a bit of a rabbit hole. You start training and then you have to train like five days a week to improve as quickly as you want to improve.

Ryan Martin : 3:08

But that's definitely something that I began to get back into over the course of the next year or months, have you kept up the fitness though, whilst you're working Like obviously, working all the time is quite stressful and how have you sort of how have you balanced that or you haven't balanced that, basically.

Nathan Perdriau: 3:24

I've actually I've got a good solution that I've found. It's an expensive solution, but as we started ramping up work, it becomes super hard to actually leave work and go and exercise. So I started with a PT probably three to four months ago and that's just forced me. I know that Tuesdays, thursdays, saturdays, I have to rock up or else he's just going to be standing there going. Where is he? So that's now been really, really good for me. I've been consistent for three days a week for the last three or so months.

Ryan Martin : 3:54

Yeah, nice, all right, we'll get into some e-con talks. So, mate, what's been the biggest challenge you've had with Clio campaigns in 2023 as a as a broad overview, that's an interesting one.

Nathan Perdriau: 4:14

The main issue, the main challenge that we've probably had is we've started orientating towards MER and CAC rather than in platform ROAS, and we've gone through this big education cycle with all of our clients as well as new clients coming on board on trying to reposition everyone to be looking at MER and CAC rather than in platform ROAS, in platform CPAs, et cetera. The main reason for that is being number one, privacy settings. Obviously, as privacy continues to ramp, google Chrome's claiming that they're betting cookies in 2024, but they've been saying that for the last three years.

Nathan Perdriau: 4:51

It's going to be have to be harder and harder to track in platform, and so it's really important to also be looking at total marketing spend as a proportion of total revenue and tracking that way rather than looking at the actual in-platform metrics. The second side of things is increasingly complex customer journeys. As you're probably aware, a user doesn't see a Facebook ad and then just buy. They normally see a Facebook ad, then they'll pathway to Google, then they'll pathway back to Facebook, then, if you've got TikTok retarting ads, they might come through a TikTok ad and then, at the end of the day, all of these platforms are going to then claim the purchase. So it becomes very difficult to make any kind of educated decision if you're looking at all of the in-platform numbers and trusting them with 100% certainty.

Ryan Martin : 5:37

Yeah, that's something I'm sort of seeing a lot as well, and it always is hard to kind of get the right attribution. So what would your recommendation be on the closest source of truth for some of that? What's the default? Do you go back to the platform, like Shopify, great Shopify, for example, or do you trust Google Analytics?

Nathan Perdriau: 6:01

Yeah, so it's. We'll go to Shopify in terms of if we're looking at top line revenue numbers, especially because it'll give us a breakdown of returns and things like that. If you look at Google Analytics, it's always just going to give total revenue rather than gross. It is important to have that extra level of detail if we are like considering the financials of the business. But in terms of looking at in platform ROAS versus Mer, I'm not saying and some people take this wrong like I will just throw in platform ROAS in the bin. I'm not saying that at all. I'm saying that there's a nice middle ground of understanding Okay, google's reporting at 10 ROAS, but it's probably claiming all of the bottom of final conversions that are coming from Facebook. Yeah, so let's look at total MER and see what the impact is when we start redistributing budgets yeah.

Ryan Martin : 6:45

And just for those listening that might not be aware MER marketing efficiency ratio Okay.

Nathan Perdriau: 6:52

Yeah, which is total revenue divided by total spend. Yeah, so you can conceptualize it as it's pretty much the same as return on ad spend. When you spend a dollar, you get X dollars back. But instead of looking at just the in platform spend and the in platform attributed ROAS, you're looking at the total store wide revenue and the total marketing spend across all platforms. An example of why that might be important is if you were to launch a YouTube campaign, for example, maybe you should retire that in campaign YouTube's like notoriously bad, so not being able to track conversions properly, because most people that watch a YouTube ad don't click on it and then buy.

Nathan Perdriau: 7:28

They'll often search for the brand and then buy, and so your brand search or another campaign will get attributed in the YouTube campaign. What so? If you were to go and launch a YouTube retargeting campaign, you'll see ROAS in platform won't increase. In fact, it'll maybe decrease, but your total store revenue will actually go up because you'll be pushing more users through the funnel and you'll see better efficiency. So that's like one of the examples of where you, if you look at in platform ROAS, you might make a decision and go, oh, that didn't work. But if you look at the total store wide revenue. You'll actually see a big uptick. Yeah, brilliant.

Ryan Martin : 7:59

That's great insights. And yeah, I guess when you're looking to, when funds are getting tight and you know you start to get questions on some of those campaigns, it's an easy throwaway line To say look YouTube, you know isn't working or it's. You know we're in a space and you know we're not kind of getting our bank for buck. But if you then use that different metric, then it can kind of give you a better actual picture of what's happening.

Nathan Perdriau: 8:25

And CAC mate.

Ryan Martin : 8:27

So cost, customer acquisition costs? Just for again for those who might not be familiar with those terms and that's just the metric that you're suggesting works best to, I guess, summarize what it costs to acquire a new customer.

Nathan Perdriau: 8:42

Yeah, absolutely, especially for retention based businesses.

Nathan Perdriau: 8:47

So if you're selling a product where you're not necessarily trying to be profitable on first purchase, it's a normally consumable products where the end consumer is going to come back and repeat, by looking at new customer acquisition is really important store wide In Shopify.

Nathan Perdriau: 9:02

You can look at it really easily if you just do a filter by customers added in the last 30 days and then you usually need to do an additional filter by order value above $0, or else it's just going to count email leads or you can use a third party app and then you just take that number and you divide it by total spend. So total spend divided by whatever your new customers have been in the last 30 days, and that's. We found that to be incredibly insightful whenever we're scaling a retention based business, because we can track new customer acquisition month on month with the according spend and say, okay, we increased spend by $2,000 on Facebook this month, but new customer acquisition actually didn't change, but the row has stayed the same. The attributed revenue went up. What happened there? And it was that Facebook went ahead and just claimed all of your returning customers as purchases for itself through views, through conversions or users clicking on those ads. So that is an incredible metric to sort of north star yourself towards if you do have a high repeat purchase rate.

Ryan Martin : 10:03

Yeah, brilliant, I love that. And it actually kind of ties in nicely to a bit of content I was looking at before on your website around kind of the full funnel approach, and I think one of your quotes was around. You know your funnels are only as strong as the weakest link, so that sort of almost ties in nicely to that piece of content on the website as well.

Nathan Perdriau: 10:26

Yeah, for sure.

Ryan Martin : 10:27

Mate, how are you? We're sort of getting close now to Black Friday, cyber Monday, christmas, singles Day, boxing Day. How are you? How are you seeing this year looking? Is there some sort of common themes or some common focuses that you guys are looking to provide for your clients for this upcoming kind of probably the most important quarter in Econ? Yeah, for sure.

Nathan Perdriau: 10:58

There's a stat out there somewhere I can't find it, but I saw it which was 32% of total Econ revenue. Was done between November to December.

Ryan Martin : 11:08

It's absurd.

Nathan Perdriau: 11:10

We actually put together a slideshow. Let me try find it somewhere here. We put a slideshow together for our clients this year and a video planning out what we would recommend and the strategy essentially is gather as much first party data as you can prior to when CPAs inflate. So run giveaways, run some kind of email lead generation so you can build up all that first party data of users that are engaged with your brand and then retarget them through SMS, email and then even Facebook custom audiences if you can, if you have a big enough custom audience, because CPMs will go up like 2X, 3x during November to December. So targeting cold with direct to consumer ads, direct for squad side sorry, it's going to be hard Moving into that actual period.

Nathan Perdriau: 11:58

Our focus this year primarily has actually not been on what's the creative strategy, how much budget should be allocating, what's the structure, but instead how do we actually make money in November, december? Because most brands go into Black Friday and then just store white 30%, discount everything, do a revenue all time high and then end up with negative $1,000 P&L when their account finishes their yearly tax return and they go. That didn't work. So we've really focused around educating clients on understanding their new economics, understanding their financials and discounting appropriately. So only heavily discounting products that haven't moved in the last three months, all those overstop products that are just taking up inventory fees, then discounting the upsells in the cross, sell products where there's a bit of room and then just not discounting your core products or not discounting them heavily so that you can maintain margins on whatever you're selling. You can do that really well and clever with bundles and things like that, but that's been the focus is let's not go for revenue all time highs, let's go for profit all time highs?

Ryan Martin : 13:11

Yes, makes complete sense. And if you do have those slides or that video, I'll include them in the show notes as well, so people can actually go in and have a look and see what you're talking about there. But that makes sense, and so are you advising clients to sort of? The thing I've noticed over the last couple of years has been a lot of creep right. So brands are just so keen to get that dollar first use of that dollar, so they're going a little bit earlier, a little bit earlier, a little bit earlier. Is that something that you'd advise? How do you sort of get around that? Or do you remain true and hold firm and only sort of do the discounts on those days I would launch?

Nathan Perdriau: 13:55

early. I would. The issue is, everyone does it. Now. It's funny. Last year last year we advised everyone launches a little bit early and then everyone just watched their competitors launch two weeks early and then everyone's scrambling to quickly. Should we launch, should we not? The competitors are taking all of the revenue that we might be getting flat forward in time. I would prepare to launch early and then I actually would just hold off until your key competitors launch. To be honest, the longer you extend out the Black Friday period, the less profitable you'll actually end up being, because you start pushing new customer acquisition quite hard through paid media and that just gets less and less efficient, especially as you enter into Black Friday and continue extending that out. So the earlier you can get in, the better in terms of CPMs. But also you're hurting yourself because then you're going to have a really long sale cycle which is going to hurt profitability. So it's sort of finding that middle ground and just keeping an eye on the competitors on the landscape.

Ryan Martin : 15:01

I also love it. Some great insights and great tips there. Just with on sort of meta and the advertising around the creative that you just sort of spoke about before, how important you know you're obviously overseeing a lot of Econ campaigns around meta. How important is the creative and what sort of creative are you finding working best? I know this year I found a lot of. You know a lot of clients are kind of experimenting on TikTok and finding what works well on TikTok, flicking it across and running ad campaigns across that. Are you still seeing that raw, unpolished GGC having good cut through this year? Or yeah, I'd be interested to get your thoughts on what's working for your clients.

Nathan Perdriau: 15:49

Yeah, first up, creatives become more and more important every month. It's sort of flipped the script where the approach on Facebook used to be that let's go create the creative and then find the audience. But sorry, the other way around let's find the audience and then create a creative for them. So like, let's target interests of people that like dogs and then let's make creative for these users. But now it's let's create creatives that's for the audience and then we let Facebook go and find the audience based on who's interacting with the creative. So it's an interesting dynamic change as everything's going a little bit more broad.

Nathan Perdriau: 16:26

In terms of UGC, it's pretty dependent on the client and the account. It's still working like really well. I think there was this huge UGC boom where you've never seen a UGC ad before and now suddenly every single ad you see on your feed this is just user generated content over and over again. So I think it. I don't think it's where it was six months ago, but I think it still definitely has a place, particularly in bottom of funnel, if you're, if your woman uses up to the brand with more professional, clean cut branding assets and then you move into actual consumers directly, objection handling why you might not have purchased and going, hey, actually the product does do what they say it does. Or hey, they actually had a 5000 reviews and that's in an organic piece of content that seems to perform really well at those retarboning level campaigns.

Ryan Martin : 17:17

Yeah, awesome. That's a great little bit of nuance there I think to is. You know, so work with a few brands and seeing quite a few brands that have that quite polished. They're very protective over there over the tone of voice, and that's fair enough. They're luxury brands but then as they it's a really good point around you know more colder audience. You can keep that, but then as it gets down the funnel, then you can implement some UGC, which is a really good insight. Thanks for that.

Nathan Perdriau: 17:48

Pleasure.

Ryan Martin : 17:49

So you're obviously the agency's been going about 18 months and no doubt over that 18 months you've onboarded a lot of new clients and continue to do so. Are there some common themes or I say common mistakes, but are there some some consistent things that you notice when you're taking over from other agencies or from you know, their, the e-commerce brands themselves, that that perhaps we can advise our listeners to, to look out for and to avoid?

Nathan Perdriau: 18:24

It is a lot. There's a lot I could. I could run through. I'll give you a Google, a common floor, and then maybe a Facebook and maybe like financials around Mer and and Kakin.

Ryan Martin : 18:37

Perfect.

Nathan Perdriau: 18:38

So, on the on the Google side of things, the most common issue that I'm saying across most accounts is over segmentation. The reason why that's so important is because, with everything moving towards machine learning based bidding, what ends up happening is the more data that you can have consolidated within campaigns, within our groups, within ads, the better the performance will end up being, because you have better back end modeling on the custom, the target demographic, because there's more data. The smaller the data is, the more likely they'll be bias in that data set. So if you have, for example, 100 campaigns and each has 10 conversions, that's going to perform a lot worse than if you would just have one campaign but it has a thousand conversions, because that data doesn't get shared at the campaign level. So, on Google, it's often, if you're going to hype a segment down, if you're going to have four, five, six different campaigns, it's important for there to be a reason as to why that's the case. Is there a unit economic raisin? Do you want to be prioritizing that campaign, and so you need the ability to segment it and increase budget on those skews. Otherwise, I would always I would always recommend consolidating wherever you can. Hst On the Facebook, yeah, on the Facebook side of things.

Nathan Perdriau: 19:55

Sorry, mate, you got, you got you're on a roll.

Nathan Perdriau: 19:58

On the Facebook side of things, it's it's probably not having a clear testing framework or structure, so you'll always come into accounts and order them and it's just a few campaigns running with no real strategy or direction as to what's going on. What are we actually testing at the moment? What have we tested, what were the results of those tests and how's that informing us moving forward? The only way to continue to see growth or improvement within an account is to see the growth and improvement. The only way to continue to see growth or improvement within an account is to be testing things, taking key takeaways away and then informing the next test. So are we testing creative assets?

Nathan Perdriau: 20:36

Okay, which one performed well? That one performed well, why did it perform well? Why did the others not? And then, how does that inform the next test? And then building our scaling campaigns adjacent as we start to obviously build data on what's working and what's not. You'd be surprised, but 90% of accounts have no, no direction at all as to what they're testing or why they should even be testing in the first place.

Ryan Martin : 20:58

So how much? Is there some intricacies within that testing that you recommend. So you know, should the test go for a certain amount of time, a certain amount of budget? Like, how do you sort of allocate the budgets when it comes to testing? Should you always have some sort of testing in place by the sounds of it or would say, yes, what does that next level of content you also look like, yeah, that's the golden question.

Nathan Perdriau: 21:27

I'm going to give a bad answer that I'll try to elaborate on it, which is it's super dependent on the account and the client. If you're selling a $2,000 product, the testing budget has to go up from a $100 product, but so it's really hard to give metrics. I've tried to write linked imposts about this and give like hey, these are just rules you should follow. We do have some rules internally, Like I would never kill a test if we haven't spent at least 1.5x the AOV on that test.

Nathan Perdriau: 21:55

So if we're selling a $200 product, we really want to spend at least $300 on a test, but that's based on the fact that we're optimizing for conversions for that test.

Nathan Perdriau: 22:06

That's the KPI. What if we're just optimizing for click-through rates on creative assets? Then we can probably cut it a little bit shorter. But what if we spend $10,000 on those creative assets? Then we should probably spend a little bit more. We shouldn't just throw $10,000 creative assets in the bin after only spending $500 and paid media on them. So like there is a lot of nuance that's going to change the numbers and I think that's why media buying agencies like ourselves even exist in the first place. If there was just a clear manual, facebook would just make it and give it to you, and then they would just cut out the middleman. Everyone could just spend more on ads and not spend on agencies. But yeah, I don't think it's the perfect answer that you were after.

Ryan Martin : 22:49

Even to be honest, mate, just seeing you kind of work through that, I think, gives our audience a bit of an idea as to some of the things that they should be thinking about. So sometimes it's not the answer I'm looking for, it's just the workings out. And the third one. What was the third one you touched on?

Nathan Perdriau: 23:10

The third one would be Not understanding unit economics.

Nathan Perdriau: 23:15

Yeah, yeah, you'd be surprised, but especially with smaller client, this isn't really an issue with anyone doing above. I actually still is an issue with people doing above 10 million revenue annualized year. But very, very little business owners understand the unit economics whatsoever. If you were to ask 10 business owners tomorrow in a calm what's your contribution margins, maybe one or two would be able to give you an answer that's accurate. Yeah, so if you don't know your contribution margins, for example, how do you know what you can afford to spend to acquire a customer and still be profitable? How do you know what your mer targets should be? How do you know what your new customer acquisition targets should be?

Nathan Perdriau: 23:59

It becomes very difficult to scale a brand if you don't know the basics of the financials and the economics. So that's something that we've started working really, really hard on with the onboarding process of bringing new clients on is, if they don't understand those unit economics, hey, we're not going to launch anything until you do, and we're going to work with you to actually get a more fundamental understanding of all of those numbers. What are your 3PL costs? What are the transaction costs? Are you using Shopify's transactions or are you using a third party, where then Shopify adds on a 2% fee, because these things do make a difference when we're looking to 10X an account.

Ryan Martin : 24:35

Yeah, interesting and so future predictions. What do you think if we do this podcast this time next year, what are some of the strategies you think we'll be talking about in terms of how you see the industry trending more broadly? As an Ecom agency, Good question.

Nathan Perdriau: 24:58

I think I'll say some other stuff, but I think Marin Kac is a big one. I think privacy settings will continue ramping up, so it's more important to look at high level metrics rather than the platform metrics. But on top of that, I think a bit of a wild prediction is probably YouTube shorts is going to be a decent one. I think that'll start working well. Youtube's a hard platform to crack. I wouldn't recommend Ecom owners go and start spending on YouTube. And the reason?

Nathan Perdriau: 25:27

There's a lot of reasons why that's the case, but the primary reason is I heard a good analogy a while ago, which is launching a YouTube campaign is like driving a large ship, whereas launching a Facebook campaign is like being in a speedboat. You have a lot of control, you can quickly move, change, pivot and you can get it profitable quickly, whereas on YouTube you just have to spend a lot of money to get that ship up and running. But once it's running it'll be profitable for a very long time and there's not really that much creative fatigue on YouTube. I think with YouTube shorts it changes it up a little bit. I think because now we have that Instagram real tick top dynamic on the platform, there might actually be an opportunity there and there's 2 billion users on YouTube, so it's not like a platform where it's a new platform. Is anyone using it? There's a lot of data. It's also owned by Google, so Google has all of the customer data from search and they just translate that over into the YouTube targeting.

Ryan Martin : 26:21

Yeah, so what would be your suggestion in terms of that YouTube shorts is that they run organic content around their products or their advertising on YouTube shorts, because I think they've just rolled that out and recently you can advertise on YouTube shorts now.

Nathan Perdriau: 26:38

Yeah, you can. We've done quite a bit of testing on advertising on YouTube shorts and we've seen OK results. Once again, the issue with YouTube is people pathway to brand search, but not as much with shorts, because 90% of shorts that are watched are watched on mobile and people will click through on mobile In terms of like what are the action items? What can you actually take from it? I would just continue staying educated. At least that's what I'm doing. I'm continuing to stay educated on YouTube shorts.

Nathan Perdriau: 27:08

I'm connected with a bunch of people on LinkedIn who the only content they post is YouTube related content for e-com brands, and I'm continuing to watch videos and keep updated on the space, as well as continuing to test with small budgets on clients. Once again, if YouTube shorts takes $50,000 to work, it doesn't apply to like 99% of e-com owners. So, ok, there's not much you can do with it. But the second it becomes affordable. The second it becomes like that speedboat which Facebook is, where you can just you can launch with $20, do some creative tests and start saying something that works and scalable. I think there'll be a huge opportunity there.

Ryan Martin : 27:43

Yeah, yeah, nice, that's awesome. We'll revisit this podcast in 12 months time and see how that's going.

Nathan Perdriau: 27:50

I'll see if I'm wrong. Yeah, exactly.

Ryan Martin : 27:52

It's always hard to predict the future. Are you doing much on TikTok? Do you do much sort of advertising on TikTok? Obviously they're starting to roll out, you know, on platform shopping. I don't think it's in Australia yet, but they're rolling that out. Are you doing much by way of TikTok advertising? Not a whole lot.

Nathan Perdriau: 28:12

No, we're doing a little bit for a few clients. The two issues that I've found with TikTok and I think it's a good platform. I think I think big businesses should absolutely advertise on it and people should test it out but the two issues that I've found is that you sort of need custom content for the platform. If you just take a Facebook ad and try running it on TikTok, it generally doesn't work. Sometimes it has for a few clients that we've tested, but generally it won't.

Nathan Perdriau: 28:39

You need something that's sort of on trend, that's going to capture that first 25% view rate, and then people are going to be in and hooked and the consequence of that is that kind of content goes in and out of style every month. So you sort of have to. The creative fatigue is really really high. You have to have new content being spat out all the time. For smaller businesses that don't want to go and allocate a $5,000 a month budget just a creative production for TikTok ads, it's been difficult, unless the business owner wants to create it themselves or they have some dedicated creators and they're up to date. They understand the new hooks, they understand the new trends and they're willing to scale those assets very, very quickly, knowing that they're going to fatigue in one to two months.

Ryan Martin : 29:22

Yeah, yeah, that's very true. It is very much sort of like a fast fashion almost. It's whatever worked out one month will probably not work the next month because the trend has moved so quickly.

Nathan Perdriau: 29:36

Absolutely.

Ryan Martin : 29:37

Alright, mate. A couple more questions. So, what's the sort of type of business that you guys work with? Who's your typical kind of client customer that is sort of best suited to come on board with you guys?

Nathan Perdriau: 29:54

Typical business is e-commerce only. We don't service anyone out of e-com and annualized revenue is between $2 million to $20 million Yep. So that's all we've found is the perfect ideal client profile for us to provide the most amount of value. Generally speaking, it's more so on the lower end, where we can provide more value in terms of high level business recommendations, talking about the unit economics, talking about CRO, talking about all these retention strategies, other aspects that we don't directly manage, but where everyone's upskilled heavily in them and we do a lot of cross collaboration with other agencies to make sure we really understand retention strategies, really understand muted economics and financials of businesses. But also the high end. There's a lot of leverage in terms of we can normally come into our higher end client and make a 10% impact, which, at 20 million, is a large impact.

Ryan Martin : 30:53

Yeah, for sure, and most of those, fair to say, would be on Shopify Plus or like is that be interesting? Is there anyone who's not on Shopify Plus? Or that you work with, like what's the second biggest e-com platform outside of that?

Nathan Perdriau: 31:09

Yeah, 90% are on Shopify. 10%, it's a handful. It's all over the place. Anything out of Shopify to open this like working on there there's all kinds of issues with the other platforms, Like Shopify has its own issues, but probably probably big commerce. We have quite a few clients on big commerce, yeah nice.

Ryan Martin : 31:33

You have much on WordPress and word commerce, always with people.

Nathan Perdriau: 31:37

Yeah, a few. Yeah, also. The number one would be word commerce, number two would be Neto. Okay, yeah, yeah.

Ryan Martin : 31:46

I've worked with a couple of Neto clients. I don't particularly like the platform. I don't know.

Nathan Perdriau: 31:53

I don't like it at all.

Ryan Martin : 31:54

But it seems a little bit clunky. It's maybe it's a wholesale or actually both the clients. I had both wholesalers that are trying to go vertical and want to try and stay on Neto, but the quicker you can.

Nathan Perdriau: 32:07

Yeah, I believe that's the main value problem. They have a few unique value problems as to why people use them, but there's so many issues with the platform I can't highly. If anyone's watching this and they're thinking about it, I would highly recommend against it. One of the issues we're having right now with a client on Neto is they launched a whole new product range, but it's not syncing through the Google Merchant Center and being placed on Google. So we contacted support and they only have one integration app. There's nothing else. So you're siloed into one app and we said why is this happening? And I said oh, it's an error at the moment. It's been going on for a few months. We don't know how to fix it. Okay, I like it. So we can't advertise any of the new products on site. There's nothing we can do about it, that's awesome.

Ryan Martin : 32:57

Yeah, fantastic. Yeah, really appreciate giving us some pretty awesome insights there. I like the fact that you've mentioned to all that listening audience that they really need to understand the unit economics as much as they can, start referring to MER and customer acquisition costs as a couple of great metrics. Is there one last metric that you think is important? Is it lifetime value or average order values or anything that you can leave us with?

Nathan Perdriau: 33:33

I can give you average order value. I met a few LinkedIn posts about this the other day which got some good traction. People found it interesting, which is when you're looking at average order value on the back end of Shopify, what you're saying is the mean average order value, the average across the orders. I would highly recommend against looking at that number. The reason being is that, firstly, median AOV will give you a better representation of where the cobalt sits and that will give you a better indicator of where you should be setting off for thresholds. Whether that's a free shipping threshold at $100 or whether that's a get a free sample or gift at this amount, mean will always get heavily skewed depending on outliers. I see this on almost every single store where they might get 50 purchases that are valued at $5 and then the mean gets skewed down and so they're not setting the thresholds right.

Nathan Perdriau: 34:31

The second reason why I'd look at median is because there's normally two peaks in the cobalt data. So when you're looking at the number of customers over average order value, you'll normally see a peak at, let's say, $50 and then another peak at $80. And the reason for that is that existing customers will buy at X amount, but returning customers will always spend more. They already trust a brand, they want to make a bigger order and so you need to be setting your threshold offers accordingly. If you're looking at the mean you'll go oh, aov, $70, let's set a threshold at $80. But they don't realize that's pushing no one at $50 up, no one's doubling their car value. And then everyone at $80 is just returned customers who are already going to return anyway, and then they're just getting the offer free and they're just ruining your unit economics and just giving money away. So if you can understand that, you can curate two offers. That is pushing both cobalts up and you'll immediately see better profitability in AOV across the board A death standing.

Ryan Martin : 35:31

I love it. I honestly think people should go back and listen to this episode a couple of times, because there is a whole heap of information that you've given our audience. So that's fantastic, and I'll just love the nuance within that. There's some really, really great takeaways. I'll go back and listen to this again, but I can see why you guys are are highly regarded.

Ryan Martin : 35:59

What a couple of awards which I've seen mate. So congrats on the work so early in your journey and, yeah, looking forward to consuming more of your content and watching your agency grow in.

Nathan Perdriau: 36:11

Melbourne. I appreciate it and thanks for having me on. Another pro book.