On this bonus episode, we talk with Kelsey Eyers and Lori Lefcourt from Rexxy, the Affiliate Marketing Headquarters. We talk about creating unique offers for affiliates, how to properly pivot, adding value to clients by niching down, and so much more!
Kelsey started her first brand, Sweat CBD in 2018 which she grew using affiliate marketing.
She then went on to freelance her affiliate marketing services and eventually built a full service agency called BossBoxx.
Lori started her career on Wall Street and then went on to launch a brand called Unicreamer and also take her experience to the agency world.
Lori and Kelsey were introduced by Chris Harder after both joining his mastermind.
Shortly after they started working together they realized that they had very similar goals and interests and both had a passion for helping brands.
They decided to join forces and work together to help product based businesses start, launch & scale.
After about a year of working together, they started to realize that affiliate marketing was bringing their clients the best results.
They had a dream to help brands large and small build organic affiliate marketing programs that could help them scale the way affiliates helped both of their brands in the past, and Rexxy was born.
Rexxy is an affiliate marketing hub where companies of all sizes can find tools and resources to design, launch, and scale a high-converting affiliate marketing program.
While they continue to grow their agency, the Rexxy team is also gearing up to design and launch an affiliate tracking software in 2023.
In This Conversation We Discuss:
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Being able to walk away from something is actually one of the smartest things that you can do. You're walking away because there's a better opportunity elsewhere.
Welcome to Honest Ecommerce, a podcast dedicated to cutting through the BS and finding actionable advice for online store owners. I'm your host, Chase Clymer. And I believe running a direct-to-consumer brand does not have to be complicated or a guessing game.
On this podcast, we interview founders and experts who are putting in the work and creating real results.
I also share my own insights from running our top Shopify consultancy, Electric Eye. We cut the fluff in favor of facts to help you grow your Ecommerce business.
Let's get on with the show.
Hey everybody, welcome back to another episode of Honest Ecommerce. I'm your host, Chase Clymer.
And today, I'm welcoming to the show not one, but 2 amazing founders.
These women co-founded Rexxy, the affiliate marketing headquarters. They have so much to share on the topic.
Welcome to the show, Kelsey and Lori.
Hey, how's it going?
Thanks for having us.
Oh, thanks for being here. Oh, there's your dog we're talking about. (laughs) It's fine. We're doing this live. Awesome.
So Kelsey, quickly talk about what are the services that you guys are offering over at the agency. And then we'll go back in time and talk about how this happened.
Yeah, so we've gotten really clear on what those services look like over the past year, based on a lot of feedback, a lot of experience.
And right now what we've locked it down to is we basically have a self-implementation option and we have an option where our team comes in and does everything for you and you are completely hands-off. It's 2 really different clients or customers.
But we have a lot of demand for the full service offering. However, we didn't want to outsource this work completely, because we are the experts.
And so that allows us to only be able to take on a limited number of what we call our "enterprise clients".
And so we were leaving a lot of brands out, especially those small to new or emerging brands.
So we decided to take that process that we use with our enterprise clients, basically write it out in step-by-step format, along with a lot of templates and videos, audio, and a lot of worksheets.
And now it's available to those small or new brands to go and implement it themselves at a very, very affordable price.
Absolutely. And quickly for the brands... I think one thing that is oftentimes confused and they thought about in the same vein maybe is affiliate marketing and influencer marketing.
So can you quickly give a Venn diagram of what's what?
Sure. Yeah. So affiliate and influencer are both really, really broad terms. But here's how we specifically define affiliate and influencer. An affiliate is anyone who is getting paid on commission.
So an affiliate technically could be an influencer in our day and age and in this space of social media. A lot of people think of themselves as influencers. So you may be able to be an influencer. However, you can still be set up as an affiliate.
We have a couple strategies that we actually use to get influencers or someone with an influencer level following set up as an affiliate. So it's really reducing the risk for the brand owner.
And again, you're only paying them unless they perform. So they're being paid on commission.
An influencer, by the book, would be someone who is getting paid per post or paid in advance. And that ranges anywhere from $50 to $50,000 per post, depending on the level of influence.
But again, an influencer could technically be set up as an affiliate and affiliate could also be getting paid for posts as an influencer. So they really are intertwined.
But I'd say the most definitive answer is just pay for post and pay on commission.
Absolutely. Alright, so take me back in time. Obviously, you didn't wake up as a little girl and go "I want to start an affiliate marketing agency when I get older." So tell me how you got here.
Yeah, no. Absolutely. I wanted to be something crazy like a fashion designer or something. And now all I wear is like sports clothes.
So I actually started my CBD business in 2017.
And at the time CBD was super restricted. You couldn't even have a domain name with the word CBD in it, unless it was on a certain sort of a site. But it was very restrictive. You couldn't do traditional forms of marketing. I couldn't run ads.
So really, it got down to me like going out to street fairs, and markets, and expos, and really just trying to market my product by word-of-mouth. Obviously, I knew with one person running a business by myself, that wasn't scalable.
So I knew I wanted to build out a sales team and a commission-based sales team because the business had been completely bootstrapped. At the time, I really didn't know that it was affiliate marketing.
But later came to find out after I built out this team of 50 people within the first month, these people started going out and selling my products, they started posting on social media, they gave me major brand awareness, drove a lot of traffic to my site, increased my sales...
I actually tripled my revenue in the first month. My Ecommerce revenue in the first month. So I knew that I was... This was something that really, really worked.
So I went and started doing it for other businesses in the CBD and cannabis space, which was the only industry that I had proven out at the time. And just over time, we really started seeing a lot of requests. Lori and I started working together.
And actually, we were doing everything in Ecom: Branding, web design, social media, PR... We had built out a full-service agency and we still were getting so many requests for people asking about affiliate marketing.
And we were creating great results for our clients in that space. So we decided to really just niche down to affiliate marketing. And now we've worked with brands in literally every single industry, and each of them creates equally great results.
That's fantastic. So is Sweat CBD still around?
Yeah. I actually am partnering with someone who is going to be basically taking it over and adding a few other products into the mix.
So it gave me just a lot of experience. But I hope to l still see it come to something really awesome in the future.
Absolutely. And I think it's really interesting and shows your business savvy of how the evolution of what you were doing as an entrepreneur changed. So you launched the CBD brand.
Then to market it, you build out these systems for affiliate marketing, and then realize that your value is actually superior in these creative aspects.
And you then launch an agency from that and then narrow it down to where you get the most market response.
That's Pivoting 101 for anyone out there that isn't following what she was doing there. But I guess a lot of people have problems with changing their mind or changing the direction or following what the markets are responding to.
Do you have any thoughts on that?
It really, really... It is really hard to do.
Because I think Lori and I are really similar in the sense that when I change, I feel like at first, that initial feeling is like "I must have failed. I must have failed at that first thing because why wouldn't I just keep doing it otherwise?"
But what I've come to realize over time is that being able to walk away from something is actually one of the smartest things that you can do, because there...
You're walking away, because there's a better opportunity elsewhere. You're not giving up.
You're just seeing a better opportunity and taking it but narrowing down and niching down is tough. It's really, really tough.
And Kelsey had closer ties to the team because we outsourced her agency for a lot of the work.
And I don't actually look at it as almost pivoting, more so than adding just more value to the people that were coming to us.
And we could have sat there all day and said "We do this. We build houses while we build your Ecom store." We were taking on anything and everything because we were those types of people that were very resourceful and to figure it out.
But were we adding the amount of value that we wanted to these clients? No. This is where the value add was.
So we were taking the same clients, we were just like, "Hey, we know these great partners you can go to. We just don't handle them anymore. This is what we do."
Absolutely. So let's talk about what you guys narrowed down to, which is affiliate marketing.
So you spoke a little bit earlier about the 2 paths: You got a do-it-yourself path and then you've got a done-for-you path. What would you say...
What type of merchant would be best suited for each of those paths?
Yeah, it's... Like I said, it's 2 really, really different clients. The playbook is what we call the self-implementation option. That's basically the do-it-yourself option.
That has ranged anywhere from the very, very new entrepreneur who actually hasn't even started a business yet but really wants to know about affiliate marketing so they can implement it once they do, to the very high-level marketing executive who works for a large company and is able to implement it themselves and doesn't need our team to do so.
So it is quite broad, the people who are choosing to go that route. And regardless of which option they're choosing, they're getting so much support for our team.
We're still at that phase where we like to be really, really hands on and we're nurturing these people all the way through this process.
So we're meeting with them weekly in a small group coaching call, we have a community that we built out, and we're answering their questions in our lifetime.
We're offering a ton of additional support for those people. And then I would say the enterprise is also quite a pretty big range. Lori, [is it] correct? Like it's...
Yeah. It's been an evolution, I would say, the enterprise. I will touch a little bit more on the playbook.
And when I had my brand, which is separate from Kelsey's. We didn't even know each other at the time, but it was a plant-based coffee creamer.
We built the playbook for that. Because when I started that brand, I used a plug-in for affiliate marketing and nothing was really happening, even though I had a really set group of customers that I knew would kill it for me.
If I had something like the playbook where I wasn't googling things all day, trying to figure out what affiliate marketing is, how to even reach out to these people at even the simplest level... That's why we created this playbook.
And then with enterprise, that's been quite an evolution because we realized there are some smaller brands with funding that just wanted done-for-you services.
But I think more than ever, we've realized even recently that our enterprise might even be more than that, just because it is in the economy that we're in right now, the investment to install our affiliate marketing software is not small, because this is something that...
This is a process that people do not have and that is so in demand that we're building out. And in order to be able to afford our team to implement, it is...
It's a lot of strategy and a lot of work, so I think we're always refining what that corporate enterprise looks like.
So yeah, it's been an interesting journey on that side of things.
Absolutely. Talking about investments. We talked a little bit about the returns and how a lot often, everyone's spending a lot of their budget on paid media.
Looking at the more direct response, and retargeting, and stuff like that.
Do you have any sort of information about how affiliate works into the marketing mix and types of returns that you should be anticipating?
Yeah. And this is everyone's favorite question, too. It's like, "Well, what if I invest --let's just say-- $20,000 to get this set up, what is my return? How fast am I going to make my money back?"
And I would love to give someone the most solid answer on that. I can tell you exactly what will be in place. But I think that the hardest part about this is when you compare it to something like running a Facebook ads campaign. There's very little...
There's a setup involved with that but there's not a ton of work compared to what we're doing on the front end. What we're doing is we're designing the program so affiliate...
Figuring out what these affiliates are going to get in exchange for posting, and sharing, and driving traffic. We're creating a custom onboarding system, we're designing messaging, we're figuring out who your affiliate is, and testing multiple different types of affiliates and channels, setting up tracking software, building out...
Like Lori said, this very in-depth process...
Without this process, the rest of it doesn't make sense. A lot of people tried to just start an affiliate program and they assume everybody wants to come promote their brand. And it's just not how it works.
So with that bigger front-end setup, we have to charge a larger fee on the front end, if we're implementing it.
Because we're basically giving you our bread and butter within the first 8 to 12 weeks, depending on the size of your brand. And then after that, it's really up to you how you want to work with us. So that is a question most people have.
Like, "Well, how fast am I going to earn back this investment." And to be honest with you, it really is brand dependent.
We've had brands who have had a commodity type product ranging anywhere from $10 to $20. And obviously, at that rate, we're gonna have to...
We're gonna have to onboard 200, 300, maybe 400 affiliates within the first month to see an equal return on your investment within the first 2 to 3 months.
And that's a lot of work. That's a lot of work. That means we're gonna have to bring on a lot of people to start doing organic outreach to all of these people.
We've also had brands who are a higher ticket at maybe like a $3,000 to $5,000 product, and we just tell them like "We need to get 2 people in the door and you're gonna have a return."
So, super brand dependent. Depends on where the brand is currently at as well. If you have a founder who is a celebrity or an influencer and can put one post out and say, "Everyone go join our affiliate program."
Obviously, we're gonna expedite things substantially. There are a lot of factors that go into it.
But our goal is always to have like a 2:1 return on the investment into your setup by the end of the second month in what we call our "Management Phase".
Yeah. And if any of your audience is familiar with Facebook ads... Facebook ads, you're testing audiences, especially as a newer brand or company.
Or even [if] you're pivoting, you're testing different audiences by doing a campaign. You might have a campaign for a new product and you're testing different age groups and demographics. And that's like exactly what we do.
Facebook ads, they used to do a lot of [that], but that doesn't really give you the data that people want anymore so I think everyone's kind of looking for influencers and creators to give them that data.
So when we test these audiences, we're essentially setting up a campaign. We're testing these different types of people and seeing who loves it the most, who is going to promote it, and get the best conversions.
Once we find who that person is, just like any sort of Facebook campaign, then we go ham on those people.
And we have an outreach process that no one really has because everyone likes to dip into a database, and we don't.
We're like, "Okay, this brand is very unique, they have this avatar, let's go crazy over these people." And that is our goal: just find who that person is, and take it to another level.
And I will add to that as well. Yes, of course, the goal is always to drive sales. Everybody wants to see dollar signs. That's a no brainer.
But along the way, unlike running a Facebook ad, we're also just creating a ton of really personalized brand awareness that...
When I see a Facebook ad, like very rarely am I going to stop and then go Google that brand.
With this, if someone messages me and asks me to be a part of that brand, I'm googling that brand, I'm looking up their Instagram, I'm checking them out.
So we're creating a ton of brand awareness, we're building a community for the brand.
Even if the affiliates take a few months to get some traction, at that point, you already have a community of anywhere from 50 to 200 to 1000 people who are out there promoting your product on a consistent basis.
And you're also building a huge library of user generated content, which we know is what sells products.
Everyone's over the curated Instagram feed. People want to see real and relatable testimonials.
Absolutely. What I really enjoyed about your answer there was you just got straight to the point of "Well, it depends." which is a tried and true sign that you are a successful agency because you know... It depends.
And you broke it down on why: The AOV of the product. It could take forever or it could be really quick. It depends on how expensive and your margins and all that stuff.
But I do think that it's a fantastic avenue for brands to explore, especially with how chaotic paid advertising is getting lately without being... Tracking is difficult.
It's getting more expensive. Awesome. Now, is there anything I forgot to ask you about today that you think would resonate with our audience?
I think... I would love to talk about the future of affiliate marketing and what we're seeing, and I think that would be really helpful to your audience.
Absolutely. Let's dive in.
Awesome. I think lastly, there's been such an evolution to affiliate marketing since when we started this agency in January to where it is right now. And more and more, we're seeing creators get more power in the game.
We're seeing that with Shopify's acquisition of Dovetale. The reason why they bought Dovetale is because Dovetale gives curated lists of creators to brands, but what they really wanted was for creators to start using Shopify.
So what that really tells brands is like, "Okay, these creators have a lot of power now and they know this."
"They're going to be asking for more so your offer has got to be better than it was before. It can't just be 10% commission anymore, if you're a fashion line."
And when I say a better offer, this can mean so many different things. This could mean the positioning of your brand. REVOLVE is like the cool kid on the block when it comes to fashion. So they don't even have to give permission. They just do events. But that really depends.
And then also, with the creators, it's like, how are brands going to form relationships with them? And then how do you assess which creators are going to actually convert for your brand?
So this is something we're definitely keeping an eye on very closely in the next few months and hopefully provide more data to brands we're working with and in our content as well.
Absolutely. And what I liked about that is you were talking about how an offer doesn't have to necessarily mean more money. It can be every...
And that's something that it goes across the board for offers. That's something about discounting, that's something about rewards... It doesn't have to be more money.
And that's something that I think a lot of young entrepreneurs get hung up on and there's a lot of more interesting, more creative ways, which necessarily do not affect your margin, but will drive more activity with whatever you're trying to do.
Absolutely. We have a jewelry line who just signed up for an affiliate program because they had a mentorship from their founders.
So that there's definitely a lot of really cool, unique ways to present it.
Yeah. Yeah, one of the things that we really focus on doing with a lot of our clients is building out a really, really unique offer.
I think everybody listening to this is probably getting anywhere from 1 to 5 of the like, "Hey, girl, I want you to be a part of my brand" messages on Instagram. "Use this link and you can save 10%." Nobody is interested in that anymore.
And unfortunately, a lot of the products that these people are promoting, or trying to build an affiliate program for are a $10 product and they want to give you 10% commission.
Well, I know personally we're always working on valuing our time more, but I think that most people's time is worth more than a dollar creating a sale.
So in that case, a lot of our clients don't have the margins or their product [doesn't], it doesn't have a high enough AOV to really incentivize these people with just commission.
So for example, we're working with a celebrity brand who instead of giving any commission at all --because their margins are super, super slim-- they're going to just have a monthly webinar with this celebrity and that celebrity is going to add... They're going to do a Q & A.
And to everyone who's in that community, it is worth it. To be able to... They have to make X amount of sales per month or per quarter in order to attend this Q & A, but it's worth it for them because that is...
That has way more value than earning anywhere from $1 to $5 per sale.
That's super interesting. I'm gonna ask you about that afterwards. Awesome. I cannot thank you guys enough for coming on the show. This is a really fun conversation.
Lori, Kelsey, if I'm picking up what you're putting down, where do I go? What [should] I do?
You can go to rexxy.co. It's W-W-W.R-E-X-X-Y.C-O And then if you go to members.rexxy.co, you will also be able to join our free community. And we're really pushing for that right now.
We're adding a ton of value there. We're going to be having guest speakers. We're going to be...
Our team is going to be in there answering questions about affiliate marketing, so we'd love to see you there.
Awesome. Thank you so much.
Thank you so much, Chase.
Alright. I can't thank our guests enough for coming on the show and sharing their knowledge and journey with us.
We've got a lot to think about and potentially add into our own business. You can find all the links in the show notes.
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