This week JD chats with Nehal Kazim, CEO of Amplifii Corporation, a Facebook ads agency for high growth small businesses. Raised in Toronto, Nehal moved to Columbia to follow his passion for salsa dancing and start his agency. He and JD discuss the seven steps to success and a few examples of retailers with both digital and physical products who have seen massive ROI by following Nehal’s suggestions. They get into the gritty details behind what made each campaign a success and dig into the need for strong analytics beyond what Facebook offers.

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Nehal: Well, those people that you are getting in every single day, they actually want to buy more stuff, you just haven’t made them an offer yet.

Announcer: The biggest names in eCommerce share tricks of the trade, from tools and software, to strategies and growth hacks. Learn from the best, and take your business to the next level.

JD: What are the actual tactical things that you are doing to attract people?

Announcer: Now your host, JD Crouse.

JD: Hello and welcome back to eCommerce in the trenches, this is JD Crouse and today I’m super excited, calling from Columbia, Nehal Kazim. Welcome Nehal.

Nehal: How’s it going?

JD: It’s going great. Let’s just jump right into this. We’ve had some technical difficulties getting all of our audio patched in from Columbia to Texas, but we persevered and we’re here. So, Nehal, your company is Amplifii Corporation.com. What do you do?

Nehal: What we do is we’re a Facebook ads agency for high growth small businesses. What that means is we take on companies that are doing mid six figures, and work with them to take them over to the million dollars in revenue.

JD: Okay. It sounds like based upon our previous conversation that you’re focusing in the coaching and consulting space, but you also do work with physical products companies, direct to consumer companies, correct?

Nehal: Yeah absolutely, and we’ve done that within driving traffic to information products and selling physical on the backend, as well as we do physical products straight from Facebook to a Shopify and [inaudible 00:01:40] as well.

JD: Okay, perfect. Well, with all that there is in the Facebook kind of ecosystem, what would you say is your super power?

Nehal: I’d say my super power is really analyzing a campaign and pinpointing exactly where to focus and invest energy, as well as resources, as well as money to optimize specific elements of a campaign. The way we look at our campaign is we’ve broken it down into seven steps.
When we’re analyzing a company, and analyzing a advertising campaign and the first thing that we’re usually doing is accessing where the campaign is now, and then making decisions on where to invest the time, the energy, and the resources.

JD: Okay. One of the things that we have learned after spending a couple million dollars on Facebook is that the strength of the offer is like so important. It’s almost like, “Well, yeah, duh JD. Tell me something new.”
Let’s walk through your seven steps, and then I’d kind of like to hear your opinions about optimizing and squeezing the last little bit of juice out of those ads once you get them running on Facebook. Walk us through at kind of a high level your seven steps for accessing a client’s campaign on Facebook.

Nehal: Yeah, absolutely. We call this our ad method and the seven steps are broken down not only what is happening on Facebook, but outside of Facebook, how you’re approaching the actual Facebook advertising, and then what happens once you spend a dollar and how to do an assessment based off of the actual activity.
Here are the seven steps. First is the most important thing and it’s the same thing that you’re talking about which is the offer. If you have every other element here lined up, you can have a decent amount of success. But, when you’re able to optimize the offer it goes so much further and I’ll give you examples why. But, number one is the offer.
Then, is the avatar. Who are you actually marketing to, and is that the right person that you should be marketing to? What we do there is not only is it the right person, is that the most profitable person, how do you find that person, how do you create the messaging to attract that person, so on and so forth?
Then, number three is the funnel. This is not just a funnel on the front end of the offer, the front end of Facebook advertising, but also on the back end or over the phone. We can talk about that.
Then, number four is the nurturing process. The nurturing process is how to nurture a click, even as far as nurturing a view, to a click, to a lead, to a customer as well. So, most people aren’t nurturing the first two, which is the view or the click if it’s a video ad. And most people aren’t also nurturing a buyer, because majority of profitability actually comes from buyers and especially in the eCommerce space.
From there, number five is the ad. The ad is everything between the creative, the copy, what kind of ad type you’re using, whether you’re using a link ad, a photo ad, a video ad, a canvas ad, whatever it is you’re using in your advertising.
Number six is the ad optimization. This is where most people focus on when it comes to advertising, and you’ll notice this is step six of our seven step program because what we realize is that that optimization usually has the lowest variability and lowest impact on a campaign, when the other elements aren’t lined up. So, number six is ad optimization and number seven is tracking.
So again, for people who are following along here. Number one is offer. Then is the avatar. Then are the funnels. Then is nurturing. Then is the ad. Then is the ad optimization. And lastly, is tracking.

JD: Nice. Tell me your bent on the offer. Give us some examples on when you’ve been able to come in and help a company get their offers straightened around, so that it actually starts converting.

Nehal: Yeah, absolutely. A lot of what we do is in the information and coaching space. One of the things that was a huge transformation in the information space that we are working in, is that the gentleman that we were working with he was giving away a bunch of funnels. Like done for you funnels.
The offer was is you’re an agency, here are funnels you can implement in your business. After speaking to a lot of the prospects and understanding what is it that they actually wanted, the last thing that the ad agency owner wanted was funnels. The only thing that they want is how do I get more clients, and I’ll figure the rest of it out.
Right? So, that has to do with your avatar and understanding them. That also has to do with understanding what’s working in your funnel. That also has to do with tracking and understanding if things are working or not, and how do you know. At that time, like Facebook ads weren’t working for this organization.
What we ended up doing is we found out that all these people care about is they want clients. What they want are clients. What they need are back end systems, and operations, and processes to actually scale their business. But, if you lead with that it’s not sexy, it doesn’t get their attention, and doesn’t get them excited, because that’s hard stuff.
What everyone wants to know is what’s that email script that’s going to get me my next client. What’s my offer that’s going to get them? What service should I be selling, etc.? So, we found out that they want to get clients. We changed the offer from here’s a bunch of funnels, to here’s three free ways on how to get clients, and we obviously made it sexier, and by changing the offer.
What we realized is that people would come in not only because the offer was good, we were getting the right type of agency owner that was primed to become a student for this $1,000 product, and what we noticed is that because people were getting results from the three videos, and the three trainings, what ended up happening is they were getting results in advance and they said, “I’ve already got my $1,000 a month retainer. Imagine how good his course is if I’m already getting results with the free content.”

JD: Very cool.

Nehal: That campaign went from not making money to every time we spent a dollar we were making ten. That was the initial foundation of that business, of that turn around. The business owner went from having two or three application calls a week to having three to five per day. Now, we kind of broke a bunch of systems because he didn’t have time to invest in the business and work on it. Now, he’s in the process of restructuring his whole sales process, not only so it’s only application based, but also so he can take sales online.
That is super important from his standpoint. The biggest change we made was the offer, and it had a domino effect on the rest of the business, and it transformed that campaign from losing money to now making anywhere between eight to ten times the dollars we were spending.

JD: Very cool. Let’s jump into the physical product space, because most of my listeners are going to be selling some type of product direct to consumer. What have you done to generate a lot of leads and then convert them into buyers? What’s a couple of your success stories that you could share with us?

Nehal: Yeah absolutely, and this is why I was super excited to just talk to you about this, because we haven’t really shared too much of what we’ve done here. Essentially with one of our clients they have the information part of their business as well as physical product part of their business. So, what we did was they have a program for something called micro-continuity. Micro-continuity is essentially a monthly membership, where instead of a super high ticket monthly program, or even a normal price $37, $40 for a membership, it was only $5 per month.
But, if you run cold ads to a $5 a month promotion and you’re just offering $5 a month, it’s really hard to get that campaign converting not only to actually get it profitable. We had a difficult challenge there. We can go into how we went from losing money on $30 a day to how we generate a 100,000 leads in 90 days profitability.

JD: Yeah, let’s do it.

Nehal: Yeah, so with them is what we noticed is that for the $5 a month with this micro-continuity, the whole goal of their business was how can we create assets in the business, not only on the information side but also on the physical product side, where we’re getting new buyers as well as leads every single day that are paying for themselves, so we can send them more additional products on the back end and launch new products in that niche?
The main challenge that we had was, again it comes down to the offer. The offer here was do you want to be part of this micro-continuity offer, or this micro-continuity community, for $5 a month? The issue from cold ads was it’s not going to work.
The first thing that we did was we changed it up, so we started doing give aways. With a give away we gave away the most obvious thing that we could have given away in that hobby niche, where it was yarn essentially. What we did was we gave that away, and we were getting a lot of opt-ins. But, just because you get opt-ins it means nothing.
The majority of people that when they run their give away, it’s either just on Facebook, they are not collecting any leads, there’s no way of following up, or even if they are collecting leads there is no follow up in sequence that’s relatively sophisticated.
What we noticed is that you’re getting all these leads, how do I get them to buy it? What we did was as soon as someone bought, we took them to a thank you page. Notice that we’re not using any kind of contest marketing software, or anything like that. We decided let’s use just funnels and we didn’t care about virality in this case up front, because we wanted them to actually make a decision and see an offer, and buy. That’s what we were optimizing for right off the gate.

JD: So, let me just stop you because I think you meant to say right after somebody opts-in, you sent them to a thank you page, but you said when somebody buys. Am I correct in-?

Nehal: I’m sorry yes, as soon as somebody opts-in.

JD: Okay, alright. So, you have an ad for a giveaway. Do you require them to take any action on the actual post? Like, is that for step number one of entering three steps to actually be entered into the contest? Or what actually happens on Facebook, because we’ve run a lot of these things. I normally have like and comment if you think it’s cool, but it’s not a requirement because Facebook would deem that as against their terms of service.
But, a lot of people still comment, you know? So you get a little bit of activity there. Then, the last step for us was always opt-in, and then we had a virality component. What was the actual process for you executing this?

Nehal: Yeah, good question. We don’t say any of that at this point. We’ve tested some different variations of copy, and the same thing if you say, “In order to enter, first like this post, then comment, then share.” If you say it in that verbiage that’s against their terms and service, but if you just say steps and say, “Step one, step two, step three,” that’s actually not against their terms, because the person reading it is just making an assumption.
But, that’s borderline, gray hatish, where people are making assumptions. People do get frustrated because they feel it’s a bait and switch, or they might not see … They don’t understand why you would do that. From a marketing stand point there’s huge value to that. Most people don’t have a problem with it but some do, and they complain verbally. The majority of the audience doesn’t mind, and they understand.
The way that we position it is we say, especially now that we’re using messenger bot with some of this give away stuff, we’re saying we’re going to message you with instructions on how to continue, or how to enter the giveaway. We are being clear this is not how to enter the giveaway, we’re going to send you instructions on how to do it.

JD: Okay, so, with this client, the one that you got 100,000 leads in 90 days, were you using messenger bots then?

Nehal: No. At that point we weren’t.

JD: So, walk me through if you would, just walk me through step by step.

Nehal: First step they see the Facebook ad and we tested both link ads and photo ads. We ended up going with link ads. Normally they were cheaper cost per click and higher conversions, so we were looking at what was working better. So, we had the link ad. They click the add.

JD: Okay, so hold on. What was the objective? Was it to get an opt-in, or a click, or what were you optimizing for?

Nehal: We’re optimizing for 24 hour return on ads spend. So, if we are spending a dollar are we able to make that profitable up front?

JD: Okay.

Nehal: So, it went as high as 421% return on ads spend. That was accumulation of cold traffic as well as traffic on the back end. What we were really tracking was if we spend a dollars a day, can we get the dollar back, if not more within in 24 hours?

JD: And that’s coming from the pixel on the thank you page for that offer, correct?

Nehal: Yes, but we manually reconciled too because the pixel is relatively inaccurate at times. We are reconciling pixel data and infusion soft data in a one excel sheet.

JD: Okay. So this goes down a rabbit hole, and I’m not going to get too deep, but it’s actually really fresh on my brain because I just interviewed Scott deGrasse with Wicked Reports. If you haven’t listened to that interview it’s actually going to go live in the next two weeks, if you’re on this podcast listening right now.
It was amazing, because attribution and lifetime value of a cohort of a customer, or a segment of customers is what his bread and butter is. He’s like a data wizard. I love that you’re manually recoiling. How are you reconciling for the cohort?
So, let’s say that JD opted-in yesterday at, it’s 2:40 my time right now, so let’s just say that I opted-in 20 hours ago. And, you’ve obviously probably re marketed to me, and you have probably emailed me once or twice, but you’ll probably get to that. Are you tracking my conversion value specifically to me, as a one human, one prospect inside of infusion soft primarily? Or a combination … Like how are you tracking those cohorts of people?

Nehal: Yeah, so I wish I could tell you that we knew every single number to the T. There were actually huge gaps in the tracking between us and the client. This happens from time to time. If you go from spending $30 a day to $700 per day profitably, it’s like, it’s a shock to most companies.
So, the person who is managing the email side for example, they were just like a writer. The thing that they’re optimizing for is just to write really good emails. But, a really good email from a writer’s perspective, versus a really good email from a direct response perspective are two things, you know?

JD: Yeah. It’s kind of like a website written with a ton of, what is it, flash, all the big … Or a Dan Kennedy esq black and white sales letter sitting on a sales page.

Nehal: Exactly. And, from our standpoint we’re so focused on direct response, and we are so focused on conversion and doing everything we can get to get another percentage bump. When everyone isn’t aligned there’s usually challenges. It’s okay. There’s growing pains.
When you go from not generating many leads to generating 1,500 leads a day it’s bound to break stuff, right? In that process we went from not knowing any of our numbers, to working with the client, to getting a better idea. To answer the question specifically, what we were looking at is what is our cold audience conversion of the clicks per day, from like the one day attribution?
Then, from there we were looking at what’s the difference in that number of sales coming in per day. And, we assigned those sales based off of back end email follow up primarily. I wish we could say, you know what, every time we get 1,500 leads we are going to generate $900, because we only spent $200 or $300 dollars on those leads, whatever it is.
But, the reality was we were primarily doing it based off of a cash flow from that specific funnel. What we realized is that even though that funnel was profitable where it had as high as a 421% return on ads spend, but on average was doing about 200 to 250, that was on the core, like direct funnel.
But, past that, every time they were sending out an email they are making between $1,000 to $2,000 worth of sales. That wasn’t even included in the actual cold ads profitability analysis.

JD: Nice. So, and I want you finish out the whole thing, but I understand. As a business owner I know that if I spent $700 yesterday, am I going to get that $700 or $1,4000 back today, because if I am … We’ve got a 24 hour attribution window. It’s a self funding proposition. It’s a self liquidating kind of a thing, and I’m adding all of these people, this fresh meat, fresh prospects into my business that hopefully I’m good enough to actually in a value proposition sell them something.
So, alright. So ad, you’re optimizing for the 24 hour return on ad spend, and you’re manually tracking that, and you’re also looking at the conversion value inside of Facebook that’s pulling from the pixel. You’re sending them then from that ad to where?

Nehal: Let me just, without any description, let me just give you the whole funnel from start to finish so people listening can follow along very clearly

JD: Great.

Nehal: So, Facebook ad, they click it, they go to a landing page where they enter just their name and email. As soon as they enter their email they go to a sales page right away with a special one time offer. We give them the annual value … We give them an annual promotion of their micro-continuity at six months and twelve months.
So, we have two options. They would either buy or they wouldn’t buy, and then from there they would be in a 30 day email follow up sequence, where we are working on sending them about 14 to 15 emails to get them to buy that same offer. If they don’t buy it they get a down sell, if they don’t buy it they get another down sell, and then they go into the normal weekly newsletter.

JD: Okay.

Nehal: That’s the whole funnel.

JD: Okay. Great. So, Facebook ad to a landing page, name and email. Step number three is immediately after they opt-in they are directed to a sales page with a one time offer. You lost me just a little bit. The micro-continuity offer, the everyday offer is five bucks a month for micro-continuity.

Nehal: Correct.

JD: That micro-continuity that goes on in perpetuity in theory, like people could stay on that forever, although they probably don’t.

Nehal: No.

JD: Is that correct?

Nehal: Correct.

JD: Okay. So that goes on forever, but you gave them a value. They could chose one of two options, the six month option. And, was that discounted?

Nehal: Correct. So, at $5 a month, twelve months is $60. At six months is $30. We discounted it to $22, from $30 down to $22 for six months, and for the twelve month we discounted down to $34.

JD: Nice. That’s great. What percentage, if you remember … How long ago did you run this, by the way?

Nehal: About a year ago.

JD: One year ago? Okay. What percentage would convert into the six month offer?

Nehal: So, between the two, more people were actually taking in the annual. But, it was about 50/50, but at the end of the day what we realized is it was about 60/40, to the annual as we started running more and more traffic, and as the dust settled because the offer was so good and all these new people were coming in.
Once we got more people in the 50/50 between the two offers, it didn’t make sense for us, because what we’re trying to do, is we’re trying to optimize for average order values. Right? Because, what we’re trying to see is if we can spend a dollar, can we increase the earnings per click as well?
What we did, the second step that we did that we were testing is just removing that six month option, and we only showed that annual value. So, I don’t know the exact number between those. I just know that the annual was more after, from like a 60/40 split. Then after we decided to completely take out the six month option and from the funnel, from click to sale, it was converting almost the exact same except the difference was per order now we’re getting $12 more.

JD: Nice. What were you converting at just going straight to the sales page, right after the landing page opt-in? Do you remember? Was it 3% or was it higher, or lower?

Nehal: Yeah, so the way it works is from click to sale we were getting a 1% conversion rate. Each friction point is they would click, they would opt-in, they would go to the order page, and then they would complete.

JD: Okay, alright.

Nehal: That conversion rate on the first landing page was 50%. It was hovering around 40 to 50%.

JD: Nice. Nice. Very cool. So, just to be clear it’s not like … I mean that’s from the very first click, when somebody clicks to go opt-in, and obviously you have a pretty good amount of people that bounce and decide I’m not going to opt-in for this offer, for whatever reason, right?
Then, whoever opts-in and goes to the thank you page and doesn’t get interrupted by a screaming kid, or the telephone ringing, or whatever distraction, the 25,000 distractions we have day. That’s pretty cool man.

Nehal: Yeah, for drop shippers listening super important, because you’re probably thinking, “Well, I don’t have an information product or I don’t have any kind of funnel like this.” This is a mistake because what happens is with a drop shipping you don’t need any inventory, so you can actually test back end offers that are the most profitable, but change the front end offers.
Here’s what I mean, with this client what we were doing is we had this information product on the back end with this micro-continuity. But, we were testing different element in that same hobby market. We tested about six different accessories as giveaways.

JD: Nice.

Nehal: And, none of these accessories were worth more than $20 each.

JD: So, say all of that one more time. I want to make sure that everyone is listening to this.

Nehal: Perfect. So, for example if you’re in the kitchen niche, right? And, so you have different products that you know on the back end is the best trick wire offer, or the best front end offer that you can give them, because if they buy that one thing they are going to buy over and over again. If you know what that is what you can do is you can give away that same product as the give away, or what I like to do is I like to go to big brands and give away products that other major brands, especially consumer package goods, like the brands that you all hear and know about. They spend millions of dollars promoting and creating awareness for those products.
You can just piggy back on them. Give that away, and then as long as it isn’t competing with your back end offer, you can actually use the big brand awareness for the really cheap leads, and then show them that offer that you really want to show them.
For example, if you’re selling in the mom niche, you can give away diapers, or you can away the main types of baby food there are. Then on the back end you can sell them that stroller that you have, or any kind of baby clothing, or whatever that is complimentary. Because, diapers and Huggies have spent so much money creating that brand awareness and teaching people how to buy from them, that it’s a no brainer. Then you get them in, you get their email and then you show them an offer that’s congruent to get them to buy right away.

JD: It’s kind of like the story I have read about the guy that used to buy reject guitar picks. He would put them in a bag of 50 or 100, a lot of them. They were good enough to play the guitar with, right? But, he would sell them for 99 cents. It’s was basically a self liquidating offer to be able to actually get a customer.
Then, he would sell them guitars because guess what, kind of like a diaper, if you have a need for a diaper, you have a need for a lot of stuff that babies go in. If you need a guitar pick, chances are you’re going to need a guitar, or strings, or whatever. It’s kind of a creative way to work the back door in. That’s really cool.
So, the neat thing about, I just did some rough math, if you converted from click to sale at 1% and you drove a 100,000 leads, well, you probably had more than this, because that would be a 1,000 … You had a 1,000 buyers. If they … I would need to know your numbers, but-

Nehal: We had well above a 1,000 buyers, yeah.

JD: You probably generated 60, 70, $80,000 in sales that essentially they were using to go acquire more customers.

Nehal: We generated about $60,000 in sales, just under from that ramp up period because it wasn’t just at 1,500 sales, 1,500 leads a day. We went from spending, again $30 per day, and we just kept doubling it and increasing it as we went.
So, that ramp up period was about a month in itself, and then once we ramped up then we were getting consistently 1,000 to 1,500 leads a day profitably. Then from there, what we were able to do was we spent about … The numbers are essentially like 45,000 is what we spent, and we generate about 50,000 around that amount just from directly in that funnel. But, that doesn’t include any of like the back end profitability, that ended up really being generated, because, all those leads are already paid for.
Then, we were thinking about new problems, which is like, well should we be even marketing with infusionsoft? Like the cost per lead versus revenue per lead on that platform is so much higher, it doesn’t make sense to switch to other platforms. What should we do with all these leads?
What will happen is if someone actually goes through and follows this similar framework here, and this is what we do now with a lot of our clients and others niches as well, which is when you’re doing that much traffic, only a small percentage of people will actually buy. So, with specific clients we are doing everything between flash sales weekly, to launches monthly, to major launches quarterly.
What ends up happening is you have all this traffic, and all these leads, and sometimes you have some customers that want to buy more, or have the ability to buy more depending on what niche you’re in and what you’re selling. What we do is, all those people who are sitting there dormant, or that three months ago wasn’t the right time for them to buy, we just show them a really good offer that’s kind of everywhere, and then that becomes super profitable.
To give you an idea, we’re doing this right now and we’ve generated about $70,000 in sales for a client. The date of this reporting is mid-November, and by mid-November from all these people that were already in one of our funnels, all we did was we showed them an offer and data launch internally, and that lead to normally that sales traffic would just be 10, $20,000. For that specific client it’s already up to about 70.
So, it’s not just can I run an ad campaign and make $2 for every dollar I’m spending? All those people you have opportunity for back end promotion. You have opportunity for launches. You have opportunities for clear outs. And, you have significant amount of opportunity to understand what they want to help create additional new products in the future.

JD: Very cool. You know, one thing I never asked you at the top of the show is what led you to Columbia?

Nehal: I was in Toronto, and grew up there for 18 years. I eventually went to Costa Rica for a bit because one of my mentors invited me out. He’s like, “Man, I have a spot for you, and it’s two minutes from the beach. You’ll love it.” I was just really unhappy with my life in Toronto then. I was working 12 hours a day, didn’t have much of a life there, a personal one.
I decided I wanted to move. I first went to Costa Rica. Loved it there, but I wanted to learn how to dance salsa. That was my goal. So, I came down here and learned, and then realized the lifestyle that I could build here. The cost of living, that’s obviously very attractive, and some super smart entrepreneurs here, as well. So overall, the lifestyle is what kept me here.

JD: Very cool. How long have you been down there?

Nehal: About a year and half, on and off.

JD: And, are you dancing salsa regular?

Nehal: At this point I have a girlfriend, and I’m happily in a relationship. So, something clicked and I don’t really go out as much, and I wake up early, so that doesn’t allow to staying out that late. But, when Columbia women are telling you, you dance better than their friends, then you’re doing something right.

JD: Then you marry her, right?

Nehal: One step at a time.

JD: Good for you. Well, it reminds me of Tim Ferris. I got the pleasure of visiting with him for a while when we were in New York, when Shopify took Amy, my wife and I to the Shopify build a business competition.

Nehal: Awesome.

JD: -Celebration. When you told me that the other day, I was just like it really reminds me of Tim, because I think he moved somewhere to learn, to actually compete in salsa I think.

Nehal: It was Tango. Yeah in Argentina. And so, that was obviously a form of inspiration for me, but I’ve been really focusing on, especially now, working on systems that generate revenue without me jumping on a call, without me being strategic, without me doing any additional work. That includes like now partnering with businesses as well as doing delivery of a specific services that are productized, that don’t rely on my time.
It’s the same approach for eCommerce entrepreneurs, because if you’re able to implement a lead generation campaign, if you’re able to implement a email marketing flow, or do monthly or quarterly launches, all of that stuff compounds into a system that’s generating way more money for you, without that much more significant work.

JD: Yeah. Very cool. I think I would take my wife’s head off if tried to salsa dance with her. She would only do it like once. That would be it.

Nehal: It’s okay, I’ll give you a few pointers.

JD: Okay.

Nehal: We’ll make it happen.

JD: You and I are not dancing together, just to let you know. But, I would love to watch you and your girlfriend. That would be wonderful.

Nehal: Anytime. You tell me when.

JD: So, you’ve been doing some work with a shoe company that does made to order, custom shoes. Tell me about some of the innovative ideas, and the things that you are doing with them that’s gaining some traction.

Nehal: Yeah absolutely. So, first of all when it comes to eCommerce a lot of people are doing organic marketing. Most people try some sort of Facebook ads, but they stop because it wasn’t working. They eventually just do retargeting as like the worst case scenario. That was similar to what happened with this client, where they are in Columbia and they are selling this shoe, and these series of products. What ended up happening is that they were actually very successful with Facebook advertising, a bunch of algorithmic updates happened, and then they weren’t able to make it happen with the last agency.
So, they eventually came to us, and we worked on taking a campaign of just getting like 20, $30 a day on retargeting, you can only spend os much on retargeting with organic traffic that you’re doing. What we did was we came in and we started testing everything between ad types, to messaging, to media types, to targeting. If you can think of it, we tested it.
What happened is that from their standpoint they know at this point in their business that when they spend and they acquire customers of about 30,000, $50,000 in a month, they’re able to generate an additional $50,000 in revenue in the next six months with that same cohort.
Say, you’re in January of 2018. You get 50,000 in sales. By July, those same people will spend another $50,000 with you. But, the difference is that there is no cost of acquisition on that second round.

JD: So, they have their lifetime value or their six month lifetime value of their customers really dialed in. They are able to up sell them and cross sell them.

Nehal: Super smart stuff, and the reason they are able to do that is because they have really good back end broadcasting and emails set up. They have conversion flows inside of [inaudible 00:36:18] that allow them to take care of people, and take them through a sequence that’s designed to convert.
Then, on top of that they are releasing products monthly, and closing down or shutting down products monthly as well. So, there’s real scarcity that’s created on top of their foundational products. So, they only have four products total with three colors. That’s all they have. They switch one or two of them per month.

JD: Wow.

Nehal: That’s it.

JD: So it’s the power of a wonderful sense of urgency, and real scarcity, which is two of the most powerful components, psychological components of a great offer, right?

Nehal: On top of that, what ends up happening is people are getting hand crafted shoes for like a quarter of what it normally costs. Hand crafted shoes cost like $800 to $1,000. Because there’s no supplier, because there’s no distributor, because there isn’t a physical store involved they obviously are able to go direct to consumers. They have their own factory, so it’s literally going factory to the consumer direct. They’re able to make that profitable.
Obviously, there are so many challenges in that, but what they figured out is once they are able to do that, they are able not only to charge less, significantly, but they are able to do it profitably and at scale for not only consumers but also [inaudible 00:37:49] service or other retailers.
So, incredible promotion and offer from like a business model, from the owners of that company. But, from a promotion standpoint, Facebook ad standpoint, it wasn’t working. What we started doing is we started testing different elements, and different ad types on Facebook. What ended up working for us are collection ads, especially when they first came out.
What happened is that we were able to get cold CPA around that 80 to $100 CPA. Their break even was around the $80 CPA mark. What would end up happening is because we are driving so much more new traffic, their retargeting CPA, they were just getting even more sales to decrease the net cost of acquisition a lot lower.
So, imagine you’re not getting any cold ads sales at all, and now you are getting cold ad sales at break even. But, the retargeting kind of flat lined, but when you start spending more, and more, and more, there are just more people who have added to cart, who have initiated the check out sequence but dropped out. Now there’s more people to come back and actually buy.
So, their break even CPA is 80. Their retargeting CPA was anywhere between 10 to 30, and that would decrease their overall net CPA a lot lower. That allowed us to start spending more and more money as we were able to scale and get more people on the front end of their business.

JD: Nice. Are you at about 400, $500 a day with them, right now?

Nehal: Yeah, we are at about 550 per day. With that, we’re still like hungry. That’s not satisfying for them or for us, and what we are trying to figure out is how to get to the $1,000 price point, $1,000 ads spend per day.
We work with another supplement company where they were spending $60 per day. They figured out some of their tracking and profitability and they went from $60 a day in ad spend to $1,500 within two months. And, within six months they were at $2,500 a day profitably on that front end, cold traffic.
So, it’s just a matter of going through and ongoing testing. Every time we try to scale we face new challenges, and changes in the conversion and scaling some of our audience, so we’ve had issues there. But, we are working through those.

JD: Nice. Well, do you do much with Brick and Mortar stores, because I know that right now, I was just reading a Denver Business Journal article, a really in depth one, and they are talking about the Amazon effect and Amazon is courting several cities to try to get their second huge major distribution center. And, Denver, the city of Aurora and Thornton are on the list. Which, that is a whole nother topic. But, a lot of Brick and Mortar realtors are scared, and they are trying to figure out online.

Nehal: Yeah, so we’ve done great with people in gym and fitness space. Again, all of it comes down to the offer that is going to get the right lead to come in from the Facebook ad to convert on the back end. What that means to us is that we’ve done five day passes, seven day passes, open houses, weight loss challenges, things like that to get people in.
But, the purpose of those is to actually get them to a, between $70 to $200 a month. With one of the gyms that we were working with, with Orange Theory for example, with one of their locations, what we were able to do is help them launch one of their gyms. Get those people to come in, sign a contract, and we were able to spend about $800 locally, and generate about $28,000 of lifetime, specifically for them, annual lifetime revenue that same year.
So, from a cash flow standpoint they broke even on month one, but if you’re able to acquire those people from a cash flow standpoint and break even, everything after that is profit.

JD: Right. So, today if I walked up to you and I didn’t know anything about Facebook, and I said, “I have a $30 product. Let’s just say my average card is 30 bucks. My cost of goods is 30%. And I’m willing to break even or I’m willing to lose a little bit because I’ve got a really good back end, and we do a great job.”
What would you tell me it’s going to cost me to acquire cold customers, provided my sight’s good, provided it’s mobile optimized, provided everything, there’s not a lot of friction. What’s it going to cost me today?

Nehal: Yeah, so what I was mentioning is we see CPAs around that 10 to $15. What happens is that it does break. You have very little room to mess up, and when it comes to that you just have to be careful when scaling and optimizing that, because you’re off $3 or $5, but that’s 100 sales a day and that just throws off numbers.
So, if you’ve never done any kind of advertising before, it’s going to be expensive than that. It’s going to be maybe 20, $30 as you figure things out. Then you can work down and chip away at the 10 to $15. It’s definitely possible. I would suggest that if you are using that type of metric, or that zero goal, video ads work super well when they have the ability to go viral, especially if you have a base of people.
If you don’t, you’re still able to create that relatively low click through rate, that relatively low cost per click to the site, with the video ad. Collection ads have been working really well for us. If you don’t know what that is, you can see that in your ads manager. And, now we’re doing more stuff with messenger bot, but primarily what we are doing right now is we are doing the video ad, as well as collection ads.

JD: Nice. Very cool. Let’s talk about messenger bot. I’m glad you brought that back up because you mentioned it earlier with a give away funnel. How are you using it, because there’s … I actually have an interview scheduled with Fitbot.io, and I’m familiar with a couple of the other Facebook bots. But, I haven’t really used them yet, so what do you like about them? How are you using them in giveaways? Give me the behind the scenes look at this thing.

Nehal: Yeah, absolutely. So, we have a give away campaign right now that’s running that we are getting about 1,500 comments per day on a promotion. Which, means that about 1,500 people are starting the messenger sequence per day. With that comes issues and we use primarily many chat for our chat bot marketing. So, if people who are listening to this are interested it’s just manychat.com.
The way we do that is we have different growth tools. I can go through like first I think a high level understanding is super important. If you’re not taking care of people in your Facebook messenger bot right now, that’s like step one. There are people who are asking you sales oriented questions that are on the edge of buying but they just haven’t had the [inaudible 00:45:17] to feel good, and feel comfortable. There’s people like that. There’s people how are giving you objections so you can fix your sales copy, and your ad copy that you might be ignoring.
And, there might be things that are broken on your site, and they will tell you and they will tell you what you need to fix. So, if you’re not taking care of those people, that’s like step number one.
Then, here’s how we are using messenger bots for cold advertising and retargeting. For someone like you JD, like you already have so much traffic and so many eyeballs of people pixeled, there’s opportunists first to start with retargeting. The way that we are using retargeting is one, we’re using carousel ads to say, “What is your objection before purchasing?” We’ll say, “We saw that you were on the … You were on your cart page, and you didn’t buy. What is it that stopped you from buying? What questions do you have?” And we’ll say, “You had a question about shipping,” so one of the carousel ad images says just shipping.
Then, another carousel ad image will say sizing. Another carousel ad image will say returns. What happens is when someone clicks that then they go into either a messenger bot, or they go into just customer service so they can take care of them in order to overcome that objection to get them to buy.

JD: Nice.

Nehal: Yeah, so we use that for eCommerce, but we’ve also used that for local businesses as well as like schools, like fashion schools. This was one of the reasons that we were able to understand some of the objections for people who weren’t opting-in from a messenger bot, who weren’t opting-in from landing pages, who weren’t opting-in form read ads. And we showed them this carousel approach, and we said chose your own adventure essentially. And, we started the conversation, and then they would get a message, and then our team would follow up, and we would get their name, email, cell phone and book a tour, and get them to come in.
This is the same thing that’s happening now for eCommerce, because we are able to understand their objection, and they will tell us on how to sell them better. That’s priceless.

JD: Well, you just about got me talked into installing it and launching it. That’s very cool. Well, Nehal it’s just been wonderful. Are there any parting thoughts for, specifically for eCommerce store owners that we really haven’t talked about?

Nehal: Yes, so with eCommerce store owners, as I speak with them, especially guys who are in drop shipping or even if you are creating your own products and filling them yourselves, or with your fulfillment center. The main thing that I see is that most people aren’t actually focusing on the real numbers.
The depth of their analysis of profitability of their campaign is just on Facebook. That is a huge trap. So, if I could leave you guys with anything about the one thing you implement is to take a serious look at your numbers. Here are some of the traps that people fall into.
They don’t look at numbers from their Facebook ads and say, “Yesterday I generated $5,000 in revue.” Or say it’s $1,000 in revenue on Facebook. On your Shopify store you’ll see that you generate $1,200 in sales. And you’re like, “Well, it’s only a little off.”
But, in reality those people could have come from literally anywhere, and you don’t really know. How many of those are first time buyers versus returning buyers? How much of that data is actually being tracked inside of the sources of Shopify so you can reconcile and say, “You know what, majority of those sales, or half of those sales, they didn’t actually come from Facebook at all. And, we’re actually messing up. Our CPA isn’t what we think it is. It’s actually 20 or 40% higher.”

JD: Right.

Nehal: What we’ve seen is when majority of eCommerce entrepreneurs, when they aren’t even doing that analysis, what they definitely don’t have at that point, is they don’t have back end email marketing, especially if they’re a drop shipper. Because, they are so focused on how can I spend a dollar and make two, and that’s it.
Those people that you are getting in every single day, they actually want to buy more stuff. You just haven’t made them an offer yet.

JD: Right, right. So, good. That’s so good. I know that thankfully every week we track everything. The one thing that I didn’t have in place because I really didn’t know about the tracking, and how robust it is with Wicked Reports, is to really be able to look at the value of a specific lead, and where they came from.
Scott Desgrosseilliers from Wicked Reports, he was saying that a lot of his clients will look at a cost of acquisition of a specific traffic source, a specific traffic source where they’ve gotten some buyers. And, their target CPA is, let’s say $40, and they spent $150 to acquire those customers. As entrepreneurs, our knee jerk reaction is okay, we’re stopping spending there, whether it’s Google Display, GDN, whatever it is.
What he said is, when he was able to track the lifetime value, the one year and the full LTV of that $150 CPA cohort, they were actually the highest one year and full lifetime value of any subset, any cohort, of the customers that they had acquired. So, rather than killing that you should actually focus more. Yes, you’re spending more money to acquire them, but as we find in marketing all the time, those customers are actually worth it. They’ll actually … I mean, we’ve got people who have spent $1,800 with us, and they started by buying a $15 product.
I mean, it just nuts, right? I always tell my wife, if we could recreate those people, and we try to, we do look a likes on really tight 5%, our top 5% of our buyers. But, I think to get smarter, to get more intelligent on the actual traffic sources, and the creative that I use to attract those people would be like the next level, or the third level, or fourth level, of sophistication.

Nehal: Absolutely. That’s a great point, and for someone starting out that might sound like, “Hey man, my business does $2,000 a month and I’m barely breaking even, and I have a day job, and I don’t know what you’re talking about.” The way to bring that all back down to reality is step one, is what is it that I could do today to improve my campaign just by 1%?
So, what that means for me is what is it that I can do on the landing page? What can I do on the actual Facebook ad from a copy standpoint? What can I test for a different ad type on Facebook? A targeting that I could do, a look-a-like audience that I could create, an optimization test that I could do. And, that one optimization could have a huge impact on your overall performance, and then you can build on that.
So, if you’re in a place right now and you’re listening to this, where things aren’t going too well with your Facebook advertising, there are some things that are probably working that you’ve ignored because you’re just trying to focus on how can I get more money up front? Our challenge to you here would be, can you look and analyze where is it that money is being generated from a front end standpoint, and then on the back end what is it that you can add to make your campaigns even more profitable?

JD: Fantastic. Well, Sabir Semerkant with Vayner Media, he runs the eCommerce division for Gary Vanderchuck’s media company. He said the exact same thing that you just said.

Nehal: Right, and if you’ve never done that as an eCommerce entrepreneur, you’re like, “Well what is 1% going to do?” If you do that and visually, if you have a way to focus on that, if you’re writing one of the test that you’re writing out or just implementing every day, you’ll see after that instant gratification, after that seven days, after 30 days of implementing and trying stuff. You’ll see that growth is not 1% or 5%, it has the potential of being 10 to 20% on that front end, on that back end and overall profitability of your business that quickly, just because you’re focusing on it and making a decision to focus on it.

JD: Well, great. Well, where can people find out more about you if they want to learn more, if they potentially want to work with you, if you’re … I don’t even know, are you taking on new clients?

Nehal: Yeah so, we’re primarily working in the information and education space, but if people are interested in learning more they can go to adtips.io, as in advertising tips. So, adtips.io. We have different types of Facebook ad education, blogs, and tips there. If people are interested in reaching out to directly, whether it’s just to do consulting or look at their campaigns, best way to reach out to me directly would just be on Facebook, and I don’t think there’s another Nehal Kazim.

JD: Great. Well, fantastic Nehal. Appreciate you setting aside time and sticking with me with the technical difficulties from Columbia. I wish you the very best and I hope that things go well with your relationship down there, and your salsa dancing, and I can’t wait to meet you in person and shake your hand. It’s been great. It’s been a fantastic conversation.

Nehal: Likewise, I appreciate you having me on.

JD: Great, alright. Talk soon.

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