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Ep. 49 - The $500,000 Honest Marketing Approach for Growth with John Hagan

In this podcast, we talked about dropshipping, TikTok as a marketing platform, transparency vs. competitiveness and John’s half million euro strategy at PURELEI.

In This Conversation We Discuss:

  • [0:45] How to pronounce PURELEI
  • [1:22] John’ background before PURELEI
  • [3:50] Chase’s and John’s opinion on dropshipping
  • [5:33] Difference between marketing in the US vs. marketing internationally
  • [8:50] How did PURELEI, a German startup, build a Hawaiian-inspired brand?
  • [10:13] Sponsor: Simplr simplr.ai/honest
  • [11:04] John’s tips and tricks to media buying
  • [14:19] John’s experience marketing on TikTok
  • [15:36] PURELEI’s “Kitchen Sink” approach and its efficacy
  • [17:31] PURELEI’s paid and organic strategy to the “Kitchen Sink” approach
  • [18:33] John’s Honest Answer: How many dollars (or Euros) do they get in return from the “Kitchen Sink” approach?
  • [19:01] Honesty, transparency and competition in eCommerce
  • [20:57] Sponsor: Gorgias gorgias.link/honest
  • [21:46] The best part of John’s job as Director of Growth
  • [23:13] The worst part of being the Director of Growth is the struggle to change
  • [24:33] Full circle: One of the biggest things that missing in eCommerce is honesty.

Resources:

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Transcript:

 

John Hagan

I think that one of the difficulties and one of the big things that eCommerce is missing --a lot of times-- is honesty. That's why I love the podcast title so much. It's because (of the fact that we're) sharing and being honest.

 

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.

 

Hey, everyone, welcome back to another episode of honest eCommerce. Today, I am joined by John Hagan. John is now working for PURE L-E-I but before that... Or it's PURELEI (pure-lay)? Did I screw that all up?

 

John Hagan

It's okay, man. You know, to be honest, it's like the most common problem that we have. It's PURELEI (pure-lay)

 

Chase Clymer

Okay. Yeah, I read it in my head as L-E-I probably because of R-E-I.

 

John Hagan

Ahh. Okay.

 

Chase Clymer

This is the worst intro I've done on the show, but we're going to keep it because I like being true.

 

John Hagan

No problem.

 

Chase Clymer

Okay, so before you got the job at the confusing company name, I'm just kidding. (laughs) What were you doing before you started working for PURELEI?

 

John Hagan

So before I was working for PURELEI, I was actually living in --I live in Kansas City now-- I was living in Los Angeles, helping run a small, six-man operation digital marketing agency that was heavily based, actually almost entirely based in media buying. So we were running... We had a roster of about 10 clients. We were primarily buying media for them on Facebook. So that’s where I met PURELEI.

 

Chase Clymer

That's fantastic. So when was that? How long ago?

 

John Hagan

That was between 2017. That was from 2017-2018.

 

Chase Clymer

Gotcha. So that was the little over two years ago or however, you want to pick it on the calendar just to break it down for people. Because if you've been in the Facebook game as long as we have, what's the difference in terms of, I guess, the ability to hit a return on ad spend that you can brag about then compared to now?

 

John Hagan

Right. Yeah, so it was entirely different, man. So we started out running a lot of stuff for a dropshipper with a lot of success there. And then when the Cambridge Analytica scandal happened, it just didn't really work anymore. It was no... Dropshipping was no longer... And actually, I'm thankful for that, to be honest.

 

One of the things that I like to pride myself in is the honesty in eCommerce and when you're dropshipping --unless you have a sort of drop shipping like a hybrid that you have set up in the US-- you're not particularly honest, right? You're not making people happy. You're not providing an incredible service or product or those kinds of things.

 

So the difference stands --to your question-- man, there's a big difference between back then Facebook and now Facebook and there's a big difference between American Facebook and European Facebook. I've had to go through a couple of transitions.

 

Back then, it was like just a simple machine-type, ATM-style return where you receive a creative. write some --to be honest-- terrible copy at that time put it up on Facebook and bam! You have an ROI of 2 to 3 for an absolutely not sound process.

 

And now the game is only the survival of the fittest. You have to be on your game. You have to be a solid copywriter. You have to have a solid creative. You have to have solid media buying practices. So it requires a lot more attention and a lot more effort.

 

Chase Clymer

Yeah. I guess I've never really talked about dropshipping on the show and my opinions on it and I actually personally... So the agency --if to get a little more serious about it-- the agency doesn't work with dropshippers, usually, just because the margins are so thin that they can't afford our services. It's not a sound investment for them. But that kind of goes along with the mentality behind dropshipping.

 

I think dropshipping is actually fantastic. If you're trying to cut your teeth and learn eCommerce and learn how to market, go start your own store and just dive right in. You're going to learn. You're gonna fail so fast and you're gonna learn so fast.

 

John Hagan

Absolutely. The capacity... The barriers to entry with dropshipping are so low that it's such an excellent entry point for someone who wants to learn anything about marketing and eCommerce in general. Whether it's just the Shopify store or Instagram, whatever it is, it's such a great platform or a strategy to introduce those principles.

 

Chase Clymer

Yeah, but I'll be... Here's the honesty. Good luck with making money. (laughs)

 

John Hagan

(laughs) Yeah, there you go. Absolutely. But getting your feet wet, it's great for.

 

Chase Clymer

Yeah, exactly. You know what I mean? And then you can... All that stuff, all that knowledge that you're learning there, you can actually then expand and take on some other younger businesses as clients and take those practices over.

 

Starting the agency was the best thing ever for us. We learned so much cool stuff about so many processes with eCommerce businesses, new ways to approach getting customers, all different aspects of the funnel, and then automation and optimizations to do. And it all came back to that just being curious about how all this stuff worked.

 

John Hagan

Right. Right.

 

Chase Clymer

So we're getting completely off track. Let's jump back into it.

 

John Hagan

Yeah. Yeah.

 

Chase Clymer

So after working for that first performance marketing company and then you met your current company now, I guess, maybe explain that transition. Obviously, we'd kind of touched on it a bit. The differences between marketing in America versus internationally.

 

John Hagan

Absolutely. Yeah. So it wasn't all dropshipping with that agency by any means. So we started with dropshipping and then we started... Once we started winning with dropshipping companies, the client profile started to go up in quality. So then we started to gain some clients that were getting larger and solid.

 

Really solid foundational companies where we could really scale and find some success. So along with that lines, once we were finding that success, we started doing some consulting for other businesses, and PURELEI ended up being one of them --where I ended up taking a more active role in the consultations and eventually starting to work full-time for.-- A lot of my job is centered around growth.

 

So the differences that I have seen in growth and any capacity, whether we see growth, --that's my title. Director of Growth-- So whether we see growth as a great possibility in a different market, or on a different platform or with other influencers or with other companies, anything in that regard.

 

So the difference that I've been able to see from American to European eCommerce is extremely... It's a great comparison because we're doing business in both places. The major difference between those two markets being scalability.

 

So, let's say that, like what we have, we're a European first company, currently. We do most of our business in Europe. But when you do most of your business in Europe, you start to hit a ceiling relatively fast. So, for instance, Germany is our primary market. Well, there are only 80 million people in Germany.

 

So when you start to see some really, really great numbers, when you start to really grow into what we've grown into with this 100 person company, basing the ceiling of marketing every year, raising the numbers every year, inevitably you start to see a ceiling. So then you have a question, do you get into Belgium? Well, how many people are in Belgium? Do you get into the Netherlands? So you start to have this...

 

And in order to get into each of those countries, you have to tailor-make a website, you have to translate a website, you have to translate all your copy. You have to have employees there that understand the market and understand if there are profits being made there. Or you can hop into the US. So, yeah. I don't know if that quite answers your question, but difference-wise, (it's) scalability.

 

But then also difference-wise, you have extremely high costs in the US. Right now, in eCommerce, I don't think there's a more expensive place to be than the US. So, CPMs are extremely high. ROAS can be really hard to obtain. The saturation is a huge factor. So those are just a couple of differences. I don't know if you want me to dive into one particular.

 

Chase Clymer

Actually, I have a question.

 

John Hagan

Yeah.

 

Chase Clymer

About the company itself. I know that you weren't there from the beginning, but I'm sure that you know the answer to this. How did a German startup build a Hawaiian-inspired brand?

 

John Hagan

Yeah, of course. So we have three co-founders: Alisa, Freddy, and Etienne.

Alisa studied abroad in Hawaii when she was in college and she really just fell in love with the culture, resonated with the lifestyle there and wanted to bring something like that back to the EU.

 

Because there is some of that lifestyle in the EU but in Germany particularly, when you think of Germany, you don't have the beaches --I mean, you have beaches-- but you're not gonna be able to bring that lifestyle, physically back.

 

So that was her mission. She just fell in love, wanted to stay there but just also wanted to come home. So she just wanted to bring a piece of that Hawaiian culture back to Germany. And the message resonates extremely well with Germans as well.

 

Chase Clymer

Well, that's fantastic. And shout out to Hawaii in general. It's my favorite vacation spot and Shawn keeps making fun of me because I keep going back.

 

John Hagan

I have actually not been there yet. I need to go there.

 

Chase Clymer

It's fantastic. We can talk about that offline. I'll give you some nice suggestions.

 

John Hagan

Yeah, absolutely.

 

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Chase Clymer

So let's get into some nitty-gritty and strategy stuff. What are some of your approaches to media buying and maybe even some tips or tricks that you guys are doing over there that people might not be thinking about yet?

 

John Hagan

Absolutely. So right now we have this very unique strategy almost across the board and extending --It certainly has a media buying aspect to it-- but it extends far outside of simply media buying. So we have these product launches that we do every week. We are launching five to 10 SKUs of products every week. It's very difficult to execute on strategy because there are a lot of moving parts.

 

So this is the strategy in a nutshell. We have an event. We have an event with about 20 to 30 influencers in a very beautiful scenic location. Our last one was in Venice, Italy. So we had this event in Venice, where we fly in these 20 to 30 influencers. These influencers are all posting on their channels before the event actually happens, teasing that they're going to appear at the event, that there's going to be a product launch.

 

We tease it on our Instagram channel, we tease it on our Facebook channel through Facebook ads, we tease it through email. Basically, every piece of data that we can possibly aggregate, we put together for this launch. So then the influencers arrive. We have liaisons, we have our team of influencer girls there to communicate with them. They have a brunch or they have dinner and then the product launch happens.

 

Sometimes the product launches (are) tied specifically to one of these influencers. So it's the "Influencer X Collection." And then when the launch happens, that teasing turns into launching. So we transition a landing page from a teaser to a launch. And again, every single piece of data that we have acquired just notifies all of these people that we have a new product launch tied with a specific influencer and here's a little discount code.

 

Chase Clymer

Okay, so you mentioned something that I want to get some clarity on. You guys are launching new SKUs every week.

 

John Hagan

Mm-hmm.

 

Chase Clymer

And are you having these events every week? How often are these events?

 

John Hagan

So the launches... Sometimes the launches are bigger than others. So the events are probably happening on a monthly basis. Maybe a bi-weekly basis, but typically a monthly basis just because of the manpower required to have these events. The product launches, however, are happening every week.

 

But when we see the best results, it's quite... It's insane how different the results are when we have one of these huge events compared to when we don't have one of these events.

 

Chase Clymer

Oh, absolutely. And I'm just gonna get to the point there. You are making so much content to reuse, aren't you?

 

John Hagan

Oh my gosh. So we have 20 to 30 influencers in one place at one time, right? So we have five to six photographers and just the whole nine yards and we just get so much content out of those events.

 

Chase Clymer

And that just makes your job so much easier with Facebook, Instagram, are you guys doing any other kind of visual paid media stuff?

 

John Hagan

On a small scale our testing, we're actually in the beta version of TikTok right now.

 

Chase Clymer

Oh man. I just noticed that they were doing ads and I'm super curious about it.

 

John Hagan

Yeah. So to be honest, the way that we got into TikTok was, I just messaged any email that I can find on TikTok's homepage and I said, "This is who we are. We would love to advertise on your channel." And then they give you a rep and you get involved in a beta version of testing.

 

So it is extremely, extremely primitive. The methods that they... They have a paid platform but it's like, I have never even seen a Facebook click paid platform that is this primitive. But it's a beta version. So I mean, that as a marketer and early adopter know, that can be as valuable as having the robust marketing system that Facebook has right now.

 

Chase Clymer

So cool. So I'm going to definitely follow up with you in a couple of months to see how that's all worked out.

 

John Hagan

Yeah, absolutely. Please do. TikTok is one of those platforms for me right now where I just don't really understand it yet as a consumer. So it can be a bit difficult to climb inside of the psyche of a person who loves that platform because, to be honest, I feel like I'm 45 years old when I'm looking at TikTok. (laughs) I just don't. Yeah, it's just very different.

 

Chase Clymer

Oh, absolutely. Absolutely. So going back to this event structure --I know we got a little off track with TikTok. I'm always excited about new things. And that's why I like doing an agency and not a product or service because I get to try new things-- so going back to these events.

 

You're taking these events, you're launching and you're reusing all this content all over the place and I'm sure that you're using that with your visual ads on Facebook and Instagram. You’re using this content for your social posting as well and you're throwing it out to your email blasts, I'm just assuming as well?

 

John Hagan

Absolutely. Yep, absolutely. Like I said, it's an all-encompassing approach. It's every piece of data. It's what I call the "Kitchen Sink", right?

 

Chase Clymer

Mm-hmm.

 

John Hagan

It's every piece of data that we possibly have acquired. Because at that point, it's just notifying... It takes the difficulties and complexities of media buying away.

 

Because if you have the demand and you have a product that people want and then they can't have it yet but you're letting them know that it's coming, when you get to the launch, it's really just letting them know that it's happening. It's not trying... You've already got them, so they've already... So then let me explain one further piece of the...

 

So, the landing page. First, we call it the teasers. So throughout the portion of time before the product launches, when influencers are arriving and telling people that it's happening, there's a signup form on that teaser page which is a huge deal. Because then we have acquired data that we don't have to really pay any more for, media-wise. You don't have to buy any more media for it. We just send out an email or a chat blast.

 

Chase Clymer

So I'm assuming that the return on ad spend/return on investment, whatever you want to call it. So people are hitting this specific page. Are you just making custom audiences for that specific page to hit them with this stuff when it finally goes live? You're like, "Boom! These are the ones."

 

John Hagan

Absolutely.

 

Chase Clymer

Oh man! And that's just a crazy return?

 

John Hagan

To be honest with you --I can share numbers.-- To be honest with you, sometimes this ROAS on Facebook will be as high as 20x to 30x

 

Chase Clymer

That is fantastic. And so are you doing much paid before or are you just using organic social and all these influencers to drive that traffic to that page to create that retargeting audience?

 

John Hagan

So we are doing some paid before. We are certainly doing some paid before. I would say that the paid before is about 50-50 cold to warm traffic. So it's all website visitors, business engagers, purchasers, add-to-carts. But then it's also, top 4 cold audiences on Facebook and then 3 or 4 new ones. 3 or 4 new that we're kind of trying out as far as cold traffic audiences on Facebook. So it's a healthy mix of cold and warm.

 

Chase Clymer

Yeah, yeah. And you gotta be prospecting. You can't keep re-hitting your existing customers, because that's not going to grow your business. That's not going to grow your top line.

 

John Hagan

And especially when you're launching every week, you can't just continue to dig into that same honey pool and say, "Hey, you guys want to buy again? You want to buy?" It gets a little bit --not invasive-- but just a little bit too much if you're not continuing acquisition at a high frequency.

 

Chase Clymer

Gotcha. I'm going to ask this question and you don't have to answer it and if you don't answer it, we'll just cut this out. What kind of numbers are you getting from these launches and from these events? If you could share dollar (amounts).

 

John Hagan

I can answer that. Yeah. So our highest day of revenue actually happened not last week, but the week before and we did just over half a million euros from a launch like this in one day.

 

Chase Clymer

And you just shared the strategy.

 

John Hagan

No. Exactly. I think that one of the misconceptions of a lot of eCommerce people is that, "It's me versus someone." like it's PURELEI versus... But at PURELEI, we're very transparent because it's how I learned. The way that I learned how to do a lot of this stuff was through talking to people and then being transparent and sharing the strategies. There's so much meat on the bone. The possibility that there was ever actually any competition directly from me sharing this strategy...

 

Only good things are going to happen because of sharing the strategy, right? Because maybe it will resonate with someone and then they'll reach out to me and say, "Hey, I've been trying something similar as well but you should try this." There's a mentality of competition. I just don't believe them.

 

Chase Clymer

Oh, absolutely. And I think that actually was... I don't know. When I was a younger man, (laughs) it was a bad thing. I had to get over myself. It was an "us versus them" mentality. I wanted every client because if I didn't have that client then it was someone else's client, then I was against them.

 

And then I was like, "No, I had some very amazing people in the Shopify ecosystem." A shout out to Kurt Elster. He just slapped that out of my head. He's an amazing man. He's helped grow our agency. His podcast, the Unofficial Shopify Podcast, shares so much amazing content. He's an open book and it just opened my eyes. It's like, "We're all in this together. Let's just all build successful businesses."

 

John Hagan

Absolutely right. And you deal with it. I think that we deal with it a lot, too. It's like 50-50 where people are like, "Oh. Let's share. Let me get your number down. Let's open up our Facebook ads managers and let's just compare numbers and compare strategies." And then the other 50% is like, "That's competition, right?"

 

But unless you are like, I don't know, Patek Philippe and Rolex, you're not competing with each other. There's no way. I mean, there's just too much meat on the bone to ever actually consider someone competition right now. Unless you're... Yeah. Unless you're that big, right?

 

Chase Clymer

Yeah.

 

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Chase Clymer

That's amazing. Thank you so much for sharing that strategy and just the numbers and being honest about it. Let's kind of like pivot it a bit to talk about... With your job, what's the best part of having this growth position at --it seems like-- a great, growing eCommerce business.

 

John Hagan

Yeah. The best part of my job, to be honest, --in growth sense-- is just that we have such an open ecosystem and environment for growth at PURELEI that basically, my job is to throw --I don't know if I can cuss on here (laughs)-- but to throw shit at the wall and see what sticks. So to just throw a bunch of stuff... It's like mental stimulation times 100.

 

TikTok is a perfect example. If I look at TikTok and I see, "Man, there are people who are starting to make money here." And it's not like,"Well, there is no slowing me down." It's like, "Hey. Well, why don't you spend some money on there and see what happens?" The best part of my job is the freedom to try and extract growth from any possible revenue/avenue that I can.

 

Chase Clymer

Yeah. And I think that kind of blends itself with one of my favorite business concepts: Fail fast. Figure out if it's gonna work or not.

 

John Hagan

Exactly, exactly. No, because I mean, the most valuable thing we have is the company. So one of our core values is that we move fast. So and I think that aligns perfectly with my position and it allows me to really live that to the fullest extent as Director of Growth.

 

Chase Clymer

That's fantastic. So let's flip it. What's the worst part of your job or the most difficult part of your job?

 

John Hagan

Ooh. Good question. So the worst... The most difficult part of my job is that people... Growth means change, and that people sometimes struggle to change. It can be very difficult. For instance, a lot of growth potential for the company is in the US. But when you have this incredible system and robust marketing efforts in Germany or in Europe, that's where you want to put all of your focus on.

 

When you're rocking, when you're killing it, when you really think you're crushing it in an industry or in a market, it's really, really easy to think, "I got to spend all my time here. If I don't spend all my time here, then the next person is going to step in and they're going to... We've got to be the best here."

 

But when you're looking at the US in the horizon and you're thinking about it as a really pivotal part of hitting your goals --maybe not particularly this year, but certainly in the next three to four years-- it can be really difficult to align people's strategies and minds towards that goal because it's change.

 

Change is difficult and it brings you out of your comfort zone. So the difficulty of growth is the change that follows along with it. And it's inevitable.

 

Chase Clymer

Absolutely. Cool. So before we go here, is there anything that you haven't shared with our audience that you think would be something worth listening to?

 

John Hagan

I think that what I'd like to share with people in the industry is just... I think that one of the difficulties and one of the big things that eCommerce is missing a lot of times is honesty. That's why I love the podcast title so much. It's because (of the fact that we're) sharing and being honest. I think that we've all had that sort of, I don't know, the guru run-ins where there is a lack of honesty.

 

But I think that the thing that I like to share is, there is still honesty in eCommerce. eCommerce is not an integral part of some type of evil scheme to pull money out of people's pockets.

 

There is a lot of good in eCommerce and companies, I like to say, like PURELEI, represent that good. And yeah. Just promote honest eCommerce. I think it's a great principle and I think it's a great name for the podcast. That's why I was so excited to come on.

 

Chase Clymer

Awesome. Well, thank you so much for coming on and sharing that amazing strategy. I'm sure that we're going to have a lot of listens to this one because I already know what I'm gonna call it.

 

John Hagan

Oh, perfect. Yeah, that sounds great, man.

 

Chase Clymer

Cool!

 

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!