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Ep. 87 - Bad-Fit Customers Hurt Your Retargeting Efforts with Tom Kacevicius

Tom has spent 10 years running his own digital agency. During that period, he implemented digital solutions for brands such as Ferrari, Red Bull, Nokia, and Maybelline. 

He also worked directly with the marketing departments for some of the biggest clients in the Baltic States, the USA, Russia, and Africa by creating 150+ Facebook viral apps and 300+ digital solutions (social media and mobile apps, interactive display ads, internet games, and viral content). 

Currently, he is the founder of Firepush, a powerful omnichannel remarketing app for Shopify stores.

In This Conversation We Discuss:

  • [00:00] Intro
  • [01:19] The Product-Agency Paradox
  • [02:43] Tom’s history in Ecommerce
  • [03:31] SMS marketing for Shopify is trending
  • [05:33] Sponsor: Postscript postscript.io/install
  • [06:04] Best channels for remarketing
  • [08:00] Investing in the right customer
  • [09:38] Funnel vs Flywheel
  • [10:22] Pricing influences customer behavior
  • [10:52] Firepush retargeting strategies
  • [11:34] Omnichannel retargeting approach
  • [12:14] Huge returns on SMS marketing
  • [15:01] Sponsor: Klaviyo klaviyo.com
  • [15:39] Defining omnichannel marketing
  • [16:24] Planning your omnichannel strategy
  • [18:30] Seamless integration within channels
  • [19:56] Sponsor: Gorgias gorgias.link/honest
  • [21:18] How to properly use discount codes
  • [24:15] The dangers of bad-fit customers
  • [27:19] Start gathering subscribers now

Resources:

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 Transcript:

Tom Kacevicius  

Just go and focus on driving traffic to your store because without traffic without fuel your car won't go.

Chase Clymer  

Welcome to Honest Ecommerce, where we're dedicated to cutting through the BS and finding actionable advice for online store owners. 

I'm your host Chase Clymer, and I believe running an online business does not have to be complicated or a guessing game. 

If you're struggling with scaling your sales, Electric Eye is here to help. To apply to work with us visit electriceye.io/connect to learn more. Now let's get on with the show.

All right, everybody. Welcome back to another episode of Honest Ecommerce. Today, we are welcoming to the show, Tom from Firepush. Tom and Firepush have over 5 years experience in the Shopify ecosystem.

During this time, he and Firepush have helped many Shopify and Shopify Plus stores use Firepush to achieve outstanding results, such as driving $1 million in revenue for their customers.

Also before that Tom, had a lot of experience running his own agency so he's been in the game for quite a while. And today, he's going to run us through some amazing data that they have and insights that they've found on retargeting strategies. 

But I have now talked for way longer than I want to talk. So Tom, welcome to the show. How are you doing? 

Tom Kacevicius  

Hi, I'm good. Thank you. Thanks for inviting me to show. And PSA, a bit about me, I had [a] digital agency before we started to work with Firepush. 

It was always the dream to have something on our own and develop something special for all clients. 

So before we started Firepush, we did many different projects for different clients like Red Bull, Maybelline, Volvo in the Middle East… And eventually, we just started to develop our own SaaS project and ended up here.

Chase Clymer  

Absolutely. I think the grass is always greener... If you are an agency you think like having a product would be easier. And then like on the other side, when you have a product and you have a good strategy, you're like, "Oh, this would just be so easy to be an agency." Did you ever feel like that? 

Tom Kacevicius  

I completely agree with you and the grass is always greener when you don't have those things. And we have much experience with different clients. And at some point, we just got bored and started to develop our project.

Chase Clymer  

Awesome. So you've been working on Firepush now for over 5 years. And you guys help a lot with retargeting and making sure that you're sending essentially the right message to the right channel, if I'm going to try to simplify it. Does that sound like I got it?

Tom Kacevicius  

Yes. I can probably start from [my] history. We started from push notifications initially 5 years ago. And, you know, it was a new technology. 

Idea came up from many requests of our clients. They asked the developers different native applications just to send push notifications.

And when Chrome released the possibility to push notifications, we just came up with an idea that could be a good channel to do that --as part of emails and SMS messaging-- that pushes could work really well. 

So we started to develop it. And in a couple of years, we introduced SMS messaging. 

And in a year or so, we introduced emails as well. So we just found that combining different channels works way much better than just having one channel.

Chase Clymer  

I couldn't agree anymore. We're right now it's... SMS is so popular these days. 

And it seems like almost every project that we're doing now is either refining someone's existing SMS strategy or bringing that into the fold, because now it's a lot more affordable these days, I'd say and the technology's there with the integrations in the Shopify ecosystem. 

So it allows people to start to capitalize on that.

Tom Kacevicius  

Yes. And Shopify has an ecosystem which allows you to easily install the app and start sending messages. And of course, you have to prepare yourself. You have to collect subscribers in a legal way. 

You can't just start... [You can't] just install and send. But it's so easy. Just install the app, activate automations and then that's it. And today, I would like to talk more about retargeting customers and help them recover abandoned carts

Most merchants, --what they do when they start businesses-- they run paid ads to the product pages. 

Some people buy some but most of those people just go away. And the easiest way now for Shopify to target customers would be emails, because they have those tools on board and you can start doing that completely, basically for free. 

But what we found [is] that combining different channels... Let's say [that] I'm sending [out those] pushes and emails in parallel which are much more cheaper SMS messages first, [it] works way much better because basically, you send an email or push to your customer and wait. 

If he didn't buy, then you can send an SMS message and it works way better than just sending emails. It really depends what audiences you're targeting. You have to have that in mind as well. 

And I know people, they are more keen to give permission to send push notifications rather than emails. So if you're targeting let's say a younger generation, that could just work for you really, really well. 

Postscript Ad  

Want to get each newest episode of Honest Ecommerce sent straight to your phone? Join our VIP texting list for updates on new episodes and exclusive deals from our partners. Text HONESTVIP. That's H-O-N-E-S-T-V-I-P to 72599 to join. 

By the way, we're powering our text messages with PostScript, the #1 text message marketing app for Shopify stores. Check out the show notes for a link to install PostScript for free today. 

Chase Clymer  

Yeah. Essentially, you want to contact the customer or potential customer the way that they'd like to be contacted. So the way that I know... The ones that I'm very familiar with, you've obviously got email. That one's the big one. Then you've got SMS. 

It's huge right now. And then you've got some other ones out there like Facebook Messenger. It's one [of the channels] Push notification is another one that I don't see as many brands utilizing. Are there any that I'm missing?

Tom Kacevicius  

I think that you mentioned the most popular ones.

Chase Clymer  

Mm-hmm. 

Tom Kacevicius  

Facebook Messenger was and is a great channel as well. 

So, it allows at the moment to target your customers easily by sending images and specific information which may be [activated when the] customer is added into cart. So it's a really good channel to utilize as well. 

There are a couple of restrictions where Facebook started to go more. I see Facebook Messenger more like a support channel now. Because of restrictions where Facebook, it looks like they want to avoid sending promotional messages and then maybe focus more on support messages and transactional messages more. 

But that pushes and emails. If let's say somebody subscribes to your push notification, we start tracking them straight away. You don't have to leave [an] email or [a] phone number to send push notification. 

As soon as you subscribe --the customer subscribed-- we start tracking and if he added in or she added into cart [or] something, we know that. So push notification can be sent slightly earlier and emails and SMS messages. 

Chase Clymer  

Awesome. Cool. So let's talk about what a typical customer journey looks like for the typical merchant, I guess and then I guess pivot it to what a more omnichannel approach would look like.

Tom Kacevicius  

Yeah. So typical on the channel, [the] funnel looks like we drive traffic via Facebook ads or Google ads

It's really important to make that step really well because if you target the wrong audience, you will retarget the wrong audience as well. So you will pay twice for a wrong audience. So, you can drive the traffic via those Facebook chats, via that channel to a product page. 

Somebody buys [but] most of people, they just go away and they have to be called [back] to an extent. And we have stats which show that about 50% of people buy the first day and the rest [of the] 50%, they can buy after 1 day, 2 days. Then 30% can buy after 2 to 3 weeks. 

So imagine how many times you have to display ads or show your brand in front of their faces just to get that sale. And with such tools like Firepush, our channels, you can basically cover only [the] first 2 to 3 days, because you won't start sending the abandoned cart messages every day, for 2 weeks. 

So, you set your tool to send messages, after 30 minutes, 50 minutes, 1 day, and so on, and then the rest has to be covered by such channels like Facebook. We have to retarget your customers via Facebook or Google ads and then display those items which [the] customer added into their cart.

Chase Clymer  

Absolutely. Building out a fully functional funnel is probably the hardest thing to do just because it takes a long time to get it done right. 

Because what you're saying here, it takes at least almost half... Well, almost a third of these conversions are happening after 14 days. 

So when you're building out your funnel and you're testing new strategies, it's going to frustrate a lot of people that it's not a direct response anymore on these channels really, it's more akin to building a flywheel

You have to get more people into the funnel, more people into the retargeting strategies for it to really start to pick up and it takes time. There's unfortunately not a... There's not a shortcut to let the algorithm and the data work, finding the right customers, and then retargeting the right customers.

Tom Kacevicius  

Yes. [The] more expensive stuff you sell, the more time it takes for people to decide to buy. Because if you sell something for up to $50 - $60, those purchases can be impulsive first very quickly. 

If you sell items, which are more than $100 to $200 people, they are keen to double-check pricing, [they will] go to check where maybe they will find something cheaper elsewhere or no, you know, it takes time for them to decide.

Chase Clymer  

Absolutely.

Tom Kacevicius  

So yeah. And then when it comes to retargeting strategies, we always suggest our clients to send email, send their pushes first after 50 minutes. Why 50 minutes? Because we did like a bigger search last year just before Black Friday. 

And we noticed that the best ROI, best return of investment to send those messages would be after 30 minutes or after 15 minutes. First is one abandoned cart message. 

So if you start sending pushes and emails slightly earlier, get a small gap for people to buy. And then if they didn't buy, then send SMS messages on top, you will get much better results than just sending, you know, messages via 1 channel.

Chase Clymer  

Yeah, I think that's a great strategy. So Tom has an amazing slide deck put together for this that I'm watching now. But unfortunately, this isn't a video just yet so we're going to make sure that we have this in the notes for everybody. 

So you can check out all these stats as well. But I'll just reiterate what he just said here. So the best time to send the first abandoned cart is at 30 minutes and then... Well the best time according to this data is at 50 minutes, but then the second best is at 30 minutes. So if you're talking on the timeline, you're gonna send it 30 minutes and 50 minutes. 

So maybe email on one of those or push notification and then SMS on the other. And then the second best time to send or the time to send your second abandoned cart would be 8 hours later is what this data says.

Tom Kacevicius  

Yes, correct. And we received many questions about whether SMS messaging is still working.There was an impression that SMS messages have died. But I think that they have renaissance at the moment. 

And basically, those messages are so powerful, we can get a return of investment of more than 40 times. If you start sending promotional campaigns to all your subscribers, we will get a slightly lower conversion rate. It's about 0.5%. 

And generally, it generates the biggest amount of sales, it's about 70%, something like that. So you can get a return of investment up to 13 times. When it comes to abandoned cart messages, conversion results were much higher, it can be up to 2% to 2.5%. 

Sales, on the other hand, will be slightly lower. It normally generates about 30% of sales from all messages we send, but return of investment is enormous. It's huge. It can be up to 30 times. 

So now, it's a really powerful tool. It can send messages to very specific targeted audiences. You can target people by how many, how much they spend when they purchase, what they purchase by location, and then different stuff can be done.

Chase Clymer  

Yeah. These are some amazing data points here. So we've got it broken down into 4 types of SMS messages. So you've got your promotional messages, your abandoned cart messages, your win-back messages and your reward messages for new customers. 

And it's pretty eye opening here to see which ones are going to be driving the most sales. At the end of the day here, all of these returns are above 10%. So I'd feel like you need to make sure that you're building all of these campaigns into your SMS strategy.

Tom Kacevicius  

Yes, correct. And we have a couple of more slides where we can just display other channels and you can compare that. 

For example, if you start by using emails, you should expect a conversion rate of about 3%. If you're using... If you have some sort of SEO strategy, conversion rates from --traffic coming from marketing channels-- can be about 1.5% and so on. 

And I think that we will put another deck somewhere for you to download so you could double-check those conversion rates and it probably will help you to focus on specific channels more rather than just trying different sources and so on.

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Chase Clymer  

Awesome. So when we are talking about omnichannel, maybe some of the listeners don't even know what omnichannel means. So maybe we should take a step back and quickly explain what an omnichannel approach would be for those listeners that are a little bit newer into marketing at this scale.

Tom Kacevicius  

Yeah. So for us... There are so many omnichannel examples out there. When it comes to marketing/remarketing, it means, basically, that you are using different channels to retarget your customers and approach them where they want, rather than just focus on one channel and hoping that they will respond to your messages.

Chase Clymer  

Awesome. So, I guess if we were to set up maybe a checklist... Because it does take time to craft these messages and build out the campaigns and all that. 

So I guess, if you were to talk about which systems to start with, and maybe once you get those ones down, which ones to start adding in next. So would it be to start with email, you need to get a really solid email strategy done. 

Once you're done there, maybe move into SMS or move into push notifications. What do you see being a good stepping stone or plan to build out your omnichannel strategy? Because obviously, something successful like this, you can't build overnight.

Tom Kacevicius  

Yes, you're right. And I would probably suggest starting, as usual, from emails because it's the most common channel and people know how they look and how it works. 

And it might be slightly easier to start, even though it takes lots of time to build your own email templates and start sending those messages. 

But as I said, it's [the] most common channel and people already know how it works. When it comes to those pushes and SMS messages, I would probably start from push notifications first because it's a much cheaper channel compared with SMS messaging. And results are very, very similar to SMS messaging. 

It's also slightly a more open channel. So you just install the app, activate one of the automations or messages, and start collecting subscribers and that's it. It's as simple as that. 

With SMS messages, you have to spend slightly more time preparing your checkout page to be TCPA Compliant to send SMS messages in the United States, and it takes time to track a bit more. 

So yeah, I would say emails first, pushes second, and then SMS on top of that, but I would definitely recommend to use all those free channels. And of course, you can add Facebook Messenger on top of it. It's a great channel as well.

Chase Clymer  

Absolutely. So that's for all the notifications. 

Once you get those down... I would actually start with those first because then when you're talking about paid retargeting, you're opening up another can of worms and having these people being retargeted through these lists, you can retarget them as well through Facebook and Instagram. It'll be a little bit cheaper. 

So once you have those systems built out and you already have those lists that makes it easier for you to retarget them on Facebook and Instagram. 

Obviously you can do it through other methods as well like Pixel retargeting and whatnot. But for example, if you're using a powerful email automation software, you can build out specific segments within those software that you can usually push right over to Facebook and Instagram for a more dialed in retargeting.

Tom Kacevicius  

You basically can do that in the old channels. Email would be like that connector for Facebook. 

And nowadays all these tools which we have on Shopify can identify a client if somebody, let's say, subscribes to Web Push notifications and later leaves an email or SMS messages. Sorry, a phone number, that we can basically identify that person and create even deeper and more sophisticated segments on different channels like Facebook, as I mentioned.

Chase Clymer  

Absolutely. Yeah. And that's when it gets fun for me because I'm a nerd. I like jumping in there and creating some really fun, retargeting strategies. 

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Chase Clymer

It's definitely a lot easier, I guess, if you have a smaller product count. When you have a larger product catalog, it's probably a little more difficult to make some really unique retargeting strategies for that. 

So if you do have a larger product count, I would focus on building out, something a little more unique for your best sellers, or the most profitable items in your store. That's something that people tend to ask me quite a bit is how to approach that. 

With that being said, I guess, Tom, is there anything that I forgot to ask you about today that you think would be helpful and worthwhile for our audience?

Tom Kacevicius  

We can maybe discuss a bit more about the discount codes and double check there, but it's worth it to use these coupon codes are not for different types of messages. 

Chase Clymer  

Absolutely. 

Tom Kacevicius  

And we just noticed from our stats that if you're giving away discount codes very easily on your website, on every corner, just land a pop-up [with a] discount code --throwing away a pop up with a discount code-- and those discount codes starts... They just run out and people... 

If you start sending SMS messages or emails with discount codes, then it's way much more complicated to get those sales. Because people think that, "Oh, I can get that discount code anytime anyway, so why should just click now and then go and buy?" 

So, you will have to provide a really, really good deal. So for example, if you  have a discount code for 10% or 15% nowadays, for most of Ecommerce today, it looks very small unless you are not getting discount codes at all. 

But if you're giving discount codes, 5% to 10% discount codes, it looks worthless for these customers and you have to send SMS messages only when you have a really good deal. And the example I have here, you can see that it's... 

You will see that if you have a really good deal you can get even twice more orders and sales rather than just like a small discount code, it will generate much smaller results. And you have to be very careful because conversion rates, according to our stats, are very, very similar from promotional messages. 

This new discount code or "Here's our discount code.", it's about 1.5% [conversion rate]. And you will get a very similar amount of click rates, clicks, but average or the value of the discount code will be way much more smaller. So you have to be careful.

Chase Clymer  

Yeah. That's some surprising data right there. So to reiterate what Tom just said, they've got a bunch of data here for promotions with a discount and without a discount code. 

And the conversion rates are essentially similar, same with the click through rates. And the biggest difference between these is the average order value, which makes sense because the ones with the discount code are going to be less money. 

Tom Kacevicius  

Yes. 

Chase Clymer  

So that's some surprising findings.

Tom Kacevicius  

Yeah, it might be because we did that research based on what we have on board. And it's very, very popular among them to say, to use discount codes everywhere. 

So I think that it might be sometimes misused and overused, so you have to come up with a strategy [with] how you're going to give those discount codes. And when you're going to give those discount codes [you have] to build a proper strategy to get more sales.

Chase Clymer  

Absolutely. Awesome.

Tom Kacevicius  

And yeah. And as I mentioned earlier, you have to... In order to make those tools like Firepush to work properly, you have to prepare your home... 

You have to prepare homework initially and then you have to target your customers really, really, specifically and then target them in a way that they... If you target those people who are not keen to buy your products, then you will retarget these people again and again and again. You will build, basically, a big audience, but it won't work for you.

Chase Clymer  

Yeah, that's some sage advice. So at the top of the funnel, i.e. when you're prospecting or advertising the cold traffic, if that's not dialed in, and you're getting weird people into your funnel, it's going to keep retargeting those people. 

If it's a bad fit, if they're never going to buy your product, advertising to them isn't going to change that. If your product doesn't solve a need that they have, they're never going to buy it. 

So that comes down to making sure that you have a really dialed-in strategy at the top of the funnel, making sure that you are only targeting people that actually want to buy your product, potentially, is going to save you a lot of money in the long run.

Tom Kacevicius  

Yeah. That's why I always suggest to our clients to use --if you run Facebook ads-- to use the layering system. And I call it the layering system because it just narrows your audience and extracts those who most likely could buy your products. 

For example, if you're selling something for body builders and you start advertising your product for people who like Schwarzenegger, it doesn't mean that the people are bodybuilders. 

They might like Schwarzenegger because he's a famous Hollywood star. But if you start targeting people who like Schwarzenegger but at the same time they're like... 

They are interested in bodybuilding, one and they didn't bother to put 2 at the same time, then your audience will shrink to you know from 2 to 3 to 5 million to maybe a couple of hundred thousand and you will target a much more specific person. 

And so this is... This could be like a good advice to run prospecting ads. And then of course, you have to set your retargeting ads in parallel to prospecting ads. 

So you're on prospecting ads to drive traffic to your store. And then you're targeting with via email via SMS pushes at the same time the Facebook ads showing displaying exactly it was Items people added into cards. So you have to combine different different channels all the time.

Chase Clymer  

Yeah, you're hitting the nail on the head there. So, Tom if people are curious to learn more about what firepush can help them do or if they just want to ask you a few questions, what's the best way to get a hold of you?

Tom Kacevicius  

So Firepush. While we're just talking, I would probably suggest, just to come and activate, abandoned cart messages first. 

So to start collecting subscribers and retargeting your customers and at some point, when you have more subscribers, you will be able to descend promotional campaigns and talk to your customers via in back sort of messages, and so on. 

But initially, you know, you know, you're just focused on the on the cart messages. Those are the most powerful messages. And this is where you should start, and then you're done. You just go and focus on driving traffic to your store because without traffic without fuel, your car won't go out.

Chase Clymer  

All right, Tom, I can't thank you enough for coming on the show today. It was great to have you. Thank you.

Tom Kacevicius  

Yeah, thanks a lot for inviting me.

Chase Clymer  

I cannot thank our guests enough for coming on the show and sharing their journey and knowledge with us today. We've got a lot to think about and potentially add to our businesses. Links and more information will be available in the show notes as well. 

If anything in this podcast resonated with you and your business, feel free to reach out and learn more at electriceye.io/connect. Also, make sure you subscribe and leave an amazing review. Thank you!