Stop Focusing on the Wrong Customers – My Appearance on the Llama Commerce Show

Brett Curry: Hello and welcome to another fantastic edition of The Llama Commerce Show. I’m your host Brett Curry lead strategist here at Classy Llama. I am absolutely jazzed, stoked, excited about today’s episode and we’ve got a fantastic guest. I would argue that he is the most frequent guest on all e-commerce podcasts. This guy mixed with [crosstalk 00:00:27]

Drew Sanocki: Really?

Brett Curry: I think so, I think …

Drew Sanocki: I think I’m one of them, but yeah, maybe I’ve been on that one a lot.

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Brett Curry: I listen to e-commerce podcasts a lot because I’m in the business obviously. I hear this guy all the time, but our guest is Drew Sanocki. Drew has made a name for himself. He started and rand a very successful e-commerce store. Started back in the early 2000s called Design Public, we’ll hear about that in just a minute. Now he runs his own blog and does consulting. You’ve got to check out nerdmarketing.com. Without further ado I’d like to welcome Mr. Drew Sanocki. Drew, how’s it going, man?

Drew Sanocki: I’m doing well, how are you doing?

Brett Curry: Good, good, so would you agree that you are the most prolific guest, co-host …

Drew Sanocki: I think of like, Ezra Firestone, who every time I open Facebook he’s in my feed 20 times. I would say Ezra is probably above me.

Brett Curry: Ezra may have you been by a little bit. He’s on the show a lot, we love Ezra, he’s a good guy. Actually, I think that’s how we first met was on a Ezra Firestone event …

Drew Sanocki: That’s right.

Brett Curry: … Orlando that’s how we first met each other. So, Drew, I love our topic today. We are talking about how to stop focusing on the wrong customer. I know that I run into this all the time. You do as well. Where merchants don’t really know who they’re focusing on or if they are focusing on the wrong customer they don’t realize it. We are going to talk about how to overcome that, where to focus your energies and your intentions and your marketing. I’m really excited about conversation. If you wouldn’t mind, give the folks just a quick background for the handful of people that don’t already know you, give just a brief background of what you did, how you got in to the e-commerce business, and what your doing now.

Drew Sanocki: For the one or two people out there that don’t know me, even if they’ve heard me on other podcasts, I don’t think I’ve ever done a visual one, so now they see me.

Brett Curry: Yeah, they’re like, this is a handsome dude.

Drew Sanocki: Thought it was like a Harrison Ford guy, it’s just this guy. My name is Drew Sanocki and I started designpulic.com. It was, I think, one of the first drop-ship retailers back in 2002. We drop-shipped home design products. Grew that, 100 percent drop-ship, bootstrap company, grew that through 2011. Sold it to a private equity fund. I kind of joined that side of things around then and became what is called an operational partner at 2PE funds. Operational partner is like their operational bench, so if they’re looking at a deal that is digital and has some e-commerce to it, I might get involved and do diligence on that deal and talk about how they might grow the company and what the opportunity is. If the deal goes through I may also take on a operational role at that company for a period of time. Most recent example, the firm I work with, Comvest, bought karmaloop.com out of bankruptcy several years ago. It was a hundred million dollar retailer, went bankrupt and we own it now and we’re trying to get it profitable again.

Brett Curry: Yeah, that’s really cool. Karmaloop it’s urban apparel correct?

Drew Sanocki: Street wear.

Brett Curry: Street wear.

Drew Sanocki: Which is not what I’m wearing here. I’m like the oldest guy at the company. I show up at the conference room table and it’s like a bunch of Oli Gs around the table.

Brett Curry: Yeah, that’s awesome, but I love the fact that you were in e-commerce in the beginning and you’re one of the rare true success stories. You built Design Public into this awesome business. It was acquired, so you’ve got experience on the building, the marketing, the how do we grow our customers all the way through to the sale. Really just a wealth of experience and knowledge. Most people don’t have your experience, which is cool.

Drew Sanocki: Thank you.

Brett Curry: Let’s talk about how to stop focusing on the wrong customers, how to focus our energies and our efforts on developing and growing the right customers, because I think that’s one of the most important, if not the most important elements of e-commerce is, are we attracting the right people? Are we selling the right people? Are we doing everything we can to grow the right customers? Because I’m sure you know, when you got to sell your e-commerce business. Whether you’re wanting to build it and keep it or whether you’re trying to build it and sell it, having good customers, loyal, repeat customers, I mean that’s the most valuable part of the business right?

Drew Sanocki: I think it’s the number one thing you have to do to grow your business and I think the evidence backs me up on that. Other than year 1 when your focus is traction and you’re just concerned with getting people in the door and buying. I think as soon as you have been in business long enough to have repeat customers, it’s got to be one of your priorities. You know e-commerce as well as I do, e-commerce, so much has been written about how hard it is. Andy Dunn, the Bonobos CEO has that article e-commerce Is a Bear.

Brett Curry: I love it. It’s a great article.

Drew Sanocki: Josh Hannah, partner at Matrix, venture capitalist, has another article that he published on Pando Daily that’s called something like, That’s a Nice Little Thirty Million Dollar e-commerce Company You have There Call Me When it Scales. The joke being, anybody can grow an e-commerce up to a certain amount, 30 million seems kind of high, but it plateaus there. They don’t scale. That’s what Dunn was talking about in his article. It’s because the cost of acquisition is so high that e-commerce companies start from zero every month. Unless you’re fortunate enough to run a subscription company you’ve got to acquire all new customers every month. If you look at where the profits are made, they are very rarely made on that first sale. You make profits on the second or third or fourth sale, so retention’s got to be a focus.

What I argue, actually it’s not me, it dates back to the 50s to the catalog companies that started thinking this way, but it’s the 80/20 rule, you’ve got good customers and bad customers. Good customers order several times, they have high AOVs, they don’t complain, they don’t return stuff. Bad customers order once and return, they take up all your customer service time. I’m hoping anybody who is in e-commerce who’s listening to this is like nodding. If you assume that they have a comparable cost of acquisition, growing your company is a heck of a lot easier if you focus on the better customers, what I call the whales, as opposed to the small customers, the minnows.

Brett Curry: Yeah, I’ve heard you say that not all customers are created equal. That may at first make someone cringe, but I think it’s totally true. Doesn’t mean that they are good or bad people necessarily. It means that some customers are a much better fit for you than others. Just like you said, some are going to buy again and again, others are going to return and just cause headaches. What I’d like to do now is how do we find and identify the right customer? Then, how do we develop that?

One of the things that I hear a lot is as we start talking to merchants, most of them will readily admit they don’t know their numbers like they should, they don’t know their customer numbers like they should. What are some ways, if you were consulting, I know you do it all the time, a store owner, on how to better understand their customer, on how to identify the top tier, the whales so to speak? What are some metrics you would tell them to look at? How would you have them get started?

Drew Sanocki: There’s a quick way to kind of prove this point out to you. If you go into your Google Analytics account, just create a new segment. I’ve got a little demo on my blog on how to do this, but you create a new segment and make that segment your whale segment, so it’s going to represent your best customers. It’s really different for every business, but set that segment to everybody who’s purchased at something like twice your average order size, so 2x the AOV. Then just see how that stacks up to the rest of your traffic. It’s not uncommon to see that this was like 2 percent of your total sessions on your website and it contributed 50 percent of your revenue for any time period. That’s just a quick thing you can do if you’re curious to kind of prove the point out.

Then if you really want to dig into the metrics, I fall back on what the catalog industry pioneered in the 60s. It’s this, 3 metrics RFM, R is recency, so how recently a customer has been on your site. F is frequency, so how many times that customer has purchased from you. M is the monetary value or the total amount that that customer has purchased from you. Using only those 3 you really can score all your customers, get a good idea of who the good customers are, who the bad customers are. Intuitively, if a customer was on my site more recent, the guy who was on my sit yesterday versus the woman who was on my site 2 years ago, they guy who was on my site yesterday probably is going to be a better customer going forward. They guy who’s ordered 5 times, versus the guys who’s ordered 1 time, I would take that 5 times buys as more indicative of a better buyer going forward. Then the guy who’s purchased more in the past, the total monetary value, is usually a better customer going forward than the person who’s purchased a lower amount.

Take those 3 metrics, anybody can dig them out Google Analytics you can dig them out of your transaction table. Just start there, start by ranking your customers and trying to see what the commonalities of what the good ones are versus the bad ones.

Brett Curry: So what would you be looking for as you rank these good customers, what are you looking for specifically?

Drew Sanocki: I find that there are 2 things that they usually have in common. The first thing you want to look at is acquisition channel. You’ll find that your best customers are acquired disproportionately through certain channels. Even within channels, say it’s AdWords, certain keyword groups or ad groups are more likely than others to drive good customers. It’s never black and white. It’s never 100 percent of my good customers come from Facebook and 100 percent of the bad ones come from AdWords. It’s always like 21 percent here versus 18 percent there, but you find that certain ad groups, certain ads, certain ad copy and visuals all are much more likely to drive a better customer with a higher LTV. The question there becomes, if you’ve got a dollar to spend on marketing where are you going to spend it? Spend it on those acquisition campaigns that drive the good customer.

The second thing I like to check is more of a merchandising thing. It’s usually the product or the product category that’s first purchased does tend to correlate with good or bad customers. I talk about Bonobos a lot, just because I know some of their data, but the guy who goes into Bonobos and buys the swimsuit as the first product purchased, sat it’s a 40 dollar product, has a much lower LTV over time, customer lifetime value, so the total profits that you make off that customer, has a much lower one than the guy who goes in and buys a suit for a couple thousand bucks. It intuitively makes sense, but it’s born out in the data that they compare the customers who enter buying swimsuits and the customers who enter buying suits and all their subsequent purchases and it’s night and day. In addition to the acquisition channel, look at initial product and initial category purchased.

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Brett Curry: Yeah, I love that. Let’s talk about acquisition channel to begin with. What I love about what you just said, this is something we try to do and this is one of those aha moments where merchants say, uh oh I wasn’t doing that, I should be doing that, [we’ll 00:13:25] look at channels just in aggregate. Organic search, oh look at that this is the average order value and if they can calculate it lifetime value for someone that buys there or AdWords, lets lump all of that together. Certainly that’s better than nothing, if you can drill down more specifically to a campaign or an ad group or if you’re looking at Facebook, what was our initial hook and our initial offer in that campaign, what did that do? What kind of initial AOV, average order value, did that create? Then, what did that do lifetime? I love that.

Drew Sanocki: Yeah, when you’re first starting out the calculation is easy, it’s like, did I make money or lose money on the first sale? You basically can stack up that key equation in e-commerce which is the lifetime value has to be bigger than customer acquisition cost, so you stack up how much did it cost t acquire this customer from this one marketing campaign or this one ad versus how much did I make off that initial purchase. You’ll find if you’ve been in business for a while, the more you can track the total lifetime value over years back to that initial campaign the better. You’re going to have a leg up on your competitors if you can dot that.

Brett Curry: Yeah, that’s awesome. I also love the fact that you look at the first product purchased. What does that tell you about the customer long-term, whether that is a good indication of what the customer is like or whether that purchase kind of trained someone to buy at a certain level, there’s probably a couple of ways you could look at that, but how should that influence … To go back to the Bonobos example, hey guys that buy the suit versus guys that buy the swimming suit, totally different picture, how should knowing that data, how should that impact the way you [crosstalk 00:15:13].

Drew Sanocki: Yeah, what do you do with that information. Well, you’ll find typically that a lot of merchandisers will put the highest converting product on the homepage. In Bonobos case maybe they put the swimsuits up, because volume-wise it looks like everybody is buying more swimsuits.

Brett Curry: Everybody’s buying them.

Drew Sanocki: Yeah, that. Everybody’s buying them, put them up there, but what they don’t realize is that they don’t see the entire life cycle of that product. They don’t realize that maybe a lot of this customers are never coming back, or they are buying and returning the swimsuits. Instead you want to feature the suits because you know you are bringing in these whales when you feature the suits. The actual volume won’t be as high, but if you walk into a Bonobos store, the first thing you see are the suits because they know that they are trying to attract that buyer. What I would do if I were running my own e-commerce shop is you think about the kinds of customers that are created by these initial products, make sure they are worked into your home page mix. Even, if you’re getting into e-mail automation I think it’s a great opportunity. The customers who buy those key products that create higher lifetime customers, chase them with an e-mail sequence that encourages more purchases because you know that those are your high LTV customers. They’re more apt to buy from you, they like you, up-sell them, continue to up-sell them over time.

Brett Curry: So they buy this particular product, the suit or this bedroom set or whatever the case may be, not I’m putting in this certain segmentation, this certain list, and now I know they’ve got a higher likelihood of buying the next thing so I’m going to market to them a little bit differently after the fact.

Drew Sanocki: Yeah, a really a quick back of the envelope … A lot of this stuff can be done with some serious data crunching in Sequel or it can be done back in the envelope really quick. Obviously, if you’re one person running your own store, I’d opt for that. A simple way to segment out your customers is to just look at initial AOV, how big was that initial order. Usually that correlated really well with how good that customer is going to be over time. Divide your customers in half. The high AOV customers and the low AOV customers and really just focus your offering in on the high AOV customers. What makes these women or these men similar? Where are they coming from? What do they want from me? What problem am I solving? Pick up the phone and call your highest AOV customers and talk to them. Find out how you can improve your offering to suit them.

Brett Curry: I love that idea. We encourage merchants to survey, to e-mail out a survey or whatever, but I’d be really fascinated, when you were at Design Public or even now in your consulting world, do you guys do that? Do you actually call customers and ask them questions? Because I think that’s brilliant.

Drew Sanocki: Yeah, we do. It’s a great idea and you learn so much, but you want that little nuance thing that you know who you’re talking to before you call them. If you just survey all your customers, what happens if you survey all the bad ones? You’re going to get feedback on your offering that really won’t improve your offering.

Brett Curry: Only call the best customers.

Drew Sanocki: Kind of, or know that these customers were good and these were bad and let’s compare what they said. The number one question I ask is give me some names of your top customers, give me your top 5 customer names. I’m always surprised that nobody can ever answer that. That’s like, now at the companies I work at, we can answer that. We know the peoples names, we know what they want and who they are and why they buy from us. You just get great insights from that. At Karmaloop we know that these guys who buy street-wear, they want sneakers. They’re sneaker-heads, so we’ve got to blow out that category because this category really attracts the whales.

Brett Curry: Yeah, it’s kind of like in the car business, I’ve had conversations with my wife about this, I’ll notice the wheels or tires on a car and say, man that’s so awesome [inaudible 00:19:37] like what I didn’t even see the wheels or tires. For some people the way they dress all revolves around the shoe, the shoe makes or breaks the outfit.

Drew Sanocki: Right, right.

Brett Curry: That’s cool. How do you think knowing your customer like that, calling them, having that name in mind, how does that influence what you guys do? Because I love the fact that you know that. How does that influence what you do? You said the sneakers, but anything else that influences, from the language in your marketing to …

Drew Sanocki: Yeah, merchandise is sort of the obvious thing. If they give you recommendations on what they’d like to see, but it’s not always merchandise, it could be service too. Zappos knew what their biggest customers wanted and they changed their service offering to fit that. It might be as easy as a 1-800 number that you only reveal to your top customers if they value that sort of thing. It could be a better service contract, it could be a better offering, it could be a better way to deliver the product, all that stuff goes into it. You really don’t know until you start talking to the customers.

Brett Curry: That’s true. I like what you said, getting back to the metrics and how do we measure this and quantify this, you said something really great a minute ago where kind of a quick back of the napkin or down and dirty way of calculating it. Just looking at AOV, high AOV versus low AOV and starting there. What would you recommend for calculating lifetime value. For a merchant to really take their business tot he next level and start to scale I think they need to know that, right? They need to know what is my lifetime vale, how do you begin calculating that or how do you begin taking steps towards calculating that? I know there is probably several directions we could go there, but any advice around measuring lifetime value?

Drew Sanocki: Yeah, my advice would be not to do it initially, because it is a cumbersome calculation. Kissmetrics has a great … Google Kissmetrics lifetime value calculation, you’ll see it’s got like the denominator and all these fractions and a derivative in there. It’s not …

Brett Curry: Cold sweats because you’re back in math class.

Drew Sanocki: Yeah, it’s not an easy calculation and it’s not actionable. I think it also is a little bit deceiving because when people talk, oh my lifetime value is 100, what it does is it’s a lazy calculation in that you actually have several customer segments with different LTVs and there might be 1000 and these guys, their LTV might be a dollar and until you break it down by segment …

Brett Curry: Your treating them all the same.

Drew Sanocki: Yeah, you don’t want to treat them all as if they’re 100. That’s the issue. Then what do you replace that with? I argue that there is this thing called the customer life cycle which is a little bit easier to get your head around. It means that customers have a typical way of interacting with your business over time. Take me and Bonobos, when I first discovered the brand that fit really well, I bought a lot of Bonobos. I bought more over time up to maybe a peak, then it fell off. I burned out on Bonobos, my wife called BS or whatever and you know, I just stopped.

Brett Curry: [inaudible 00:22:50] Bonobos on the credit card statement, Drew, what are you doing?

Drew Sanocki: Yeah, so it ends up looking sort of like a bell curve, where you buy more over time then you buy fewer items. Really, you’d be surprised at how once you figure out what that standard life-cycle looks like lots of different … It’s not a law, but it’s close to it. It’s a great way to approximate your business. Different buyers within your business might if you have … In our case at Design Public the kids and baby buyer that was buying for nursery had a certain life-cycle where their purchases would accelerate over a 3 months and then decelerate over 3 months and within 6 months they were done buying from us. Whereas the furniture buyer might have had a much longer life cycle that, if you were furnishing a living room, lasted over a long time. I would say the first step is finding that life cycle and you can just do something as easily as export all of your transactions and figure for everybody that has bought more than twice, what was the average time between the first a second purchase. In retail wide a good guess at that is say 30 days. If somebody buys this coffee cup on day one, 30 days later they’re going to buy another coffee cup or the plate or something that goes with it. Then you …

Brett Curry: I saw that Intelligentsia coffee cup, that’s nice.

Drew Sanocki: Yeah, that’s my Intelligentsia coffee cup. Maybe they buy the cup and 30 days later they buy the plate or something. That starts to give you an example of what the life cycle might look like. Then you use that to market. Money is made when people start deviating from the standard behavior. In other words you don’t have an infinite number of dollars to spend on marketing. You can’t market to me all the time, so when is the most profitable time to market to me? It’s when my behavior is deviating from the norm. If I go to your site and I’m buying a t-shirt every month on average then all of a sudden I stop. It’s been 35 days, 40 days, 50 days and I haven’t bought that t-shirt, my behavior is deviating form the norm and that’s a great time to market to me.

Brett Curry: Yeah, I’ve heard you call that win-back campaigns right?

Drew Sanocki: Right.

Brett Curry: In some cases, so talk about that, how do you set those up? What kind of offers are you putting in these win-back campaigns? What does that look like?

Drew Sanocki: Well the classic, win-back campaign is … Everybody knows these life cycles exist, they may not call them life cycles, but you know that there are defected customers. There are customers out there who haven’t bought from us in x amount of time and well what is that? It really depends on your retailer, but someone hasn’t bought from my retailer in 5 years, I’m calling them defected, they’re gone. A win-back campaign, usually you do it around the holidays, you go back to everybody who hasn’t purchased from you in a year or 2 and you say, hey come back and buy. I’m going to try to win you back and I give you an offer.

What I’m talking about is better than a win-back campaign. It’s actually like an anti-defection campaign, because you want to predict that that customer’s going away. In the SAS world, it’s like imagine you’ve got a customer who’s got a monthly recurring subscription to MailChimp and every month MailChimp is charging me, I want to predict when that customer is going to turn. When they’re not going to buy from me anymore. That’s the anti-defection campaign. It’s, I think, the most profitable campaign any retailer can do. The way I would do it is just start thinking about this life cycle, then every month maybe if you figure out that 30 days is typical between purchases, I’m pulling a list every month of every body who hasn’t purchased in over 30 days, maybe 45 days and I’m going to send them an offer to come back. I’m going to send them a 10 percent offer, I haven’t heard from you in 40 days, come back. Really you can do it manually and ultimately, when you get better you can automate it using Klaviyo or MailChimp or something like that. That’s the way I would approach it.

Another best practice is typically to do what’s called a discount [ladder 00:27:09] with your anti-defection campaign. One mistake I see a lot of retailers making is they’ll send out one discount. Let’s have a sale, we’ll send out 20 percent to everybody right now. The problem with that is that when you do a blanket promo like that there are a certain percentage of your customer who were going to buy anyway. Like they were literally on your site with their credit card out then they got the e-mail from you that said save 20 percent so you are … There is a hidden cost there, it’s called a subsidy cost and you’re giving away money when you wouldn’t have to do it otherwise. What I like to do is ladder my promos. If you haven’t bought in 30 days you get 10 percent off, if you haven’t bought in 60 days you might get 15 percent off, and if you haven’t bought in 90 days you get 20 percent off. Then you find that you’re really increasing the amount of your promotion with the likelihood that the customer is not coming back. It’s a super effective way of doing promotions.

Brett Curry: I love that, because it all goes back to the recency idea from the catalog days. Someone who’s purchased pretty recently they’re much more likely to buy than someone who hasn’t bought in 90 days or a year or whatever. I think that’s fantastic.

Drew Sanocki: You don’t want to sent a promo out to me if I just bought from your site last week. I say promos but I know a lot of retailers are really sensitive to promotions. They don’t want to go on promo. I use the term loosely. It can be any added benefit or incentive you can employ to get a customer back. Maybe it’s free shipping or free gift with purchase or something like that.

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Brett Curry: Well, as we kind of begin to wrap this up a little bit and tie up a few loose ends here, what were some of the mistakes that you see people make? As we drill into [inaudible 00:29:04] or things just to avoid, what are some of the mistakes you see people make? As they’re working on their marketing efforts or they’re working on their merchandising efforts, and I know we’ve touched on several of these so this will be kind of part recap, part maybe hear a few things we didn’t mention, what are some mistakes you see people make around acquisition or retention?

Drew Sanocki: Yeah, I mean, just broadly speaking for newbies or for people who are just starting out it’s keep that golden equation in mind, where your lifetime value has to be bigger than your cost for acquisition. I just find people not paying attention to that. They are paying more money than they are making off their sale. You don’t have a business if that”s the case. Your job, when you just start out is to throw a bunch of stuff up against the wall and hope that you can find one marketing channel that you can scale up. That’s where lifetime value or just even profits off your initial order is more that what you’re paying to drive someone to the site. Then I would keep in mind that money is made on the second or third purchase, not on the first purchase. A second big mistake companies make is they don’t employ e-mail. E-mail and remarketing are the number 1 and 2 way to get someone back to your site. E-mail is probably a little bit better, in that case they opted in, the customer opted in to hear from you, but remarketing, if they didn’t opt in to hear from you, you can still win them back. Use e-mail and remarketing to pull people back and purchase that second time. That’s where you’re going to make your money.

Brett Curry: This was kind of interesting, Drew, I know you get called in to a lot of e-commerce companies some are very successful. Some are on the upward trajectory, others are like Karmaloop where they’re trying to bring themselves out of bankruptcy, those that are struggling that you come in and consult with, do you find a pattern where usually they’re not doing e-mail marketing correctly, they’re not doing remarketing correctly, they’re not segmenting their customers properly? Is that something you see often?

Drew Sanocki: Yeah, it’s often the lack of customer analysis. This whole good customers, bad customers thing, you don’t realize when you run a promotion that you attract a very different kind of customer than if you sell it full-price. The businesses that are struggling have become addicted to promotions. They run a promotion and yes it juices revenue, but, we talked about acquisition earlier, you’re inadvertently attracting bad customer. You’re attracting a customer that only buys on promo. You’re training your customers to only buy on promo. If you promo every other day in your newsletter, your customers are just going to sit back and wait for the next promotion. You get this cycle where it’s like a heroin hit, you spike up your revenue but then it drops right down and you’ve got to do it again to spike revenue up. It’s just a vicious cycle that gets worse and worse. A lot of the companies that are struggling are at the bottom of that cycle. It’s really a long process of trying to attract a completely new cohort. Maybe they see a new site and they see a new offer, but you treat them differently. You try to bring them back and try to get them to buy at full markup. I would say that’s the biggest issue that most of these companies have.

Brett Curry: So insightful. I remember several years ago I heard a guys say one time, I thought it was awesome, that the customers will behave the way you bring them in or they will behave you train them. So if you don’t like the way your customers are responding or behaving or buying, it’s your fault. That’s the was you’ve got to look at it and it’s kind of painful, but true. It’s the way you have to address it. I love that, we’ll kind of wrap things up with this quote then we’ll talk about your awesome blog and how people can connect with Drew here in just a minute, but I read a blog post you wrote that said, the best new customer is an existing customer. I love that, you can talk about that quote at all and who actually said that first, I wonder?

Drew Sanocki: I don’t know where I used that quote, but I like the quote. I think it’s … I probably said it in response to people who are so fixated on I just need more traffic, I just need more traffic, I ju- … It’s like why do you need more traffic? It’s because you want a profitable business and if you’re looking for profits, you’re going to get it from your existing customers more likely than you are from new customers. I think that’s probably what I was getting at with that quote.

Brett Curry: It’s a great way to kind of shift that perspective. I’ve always been in the marketing business and mainly the acquisition business and I love it, but like you said the promotional cycle can be like a drug to the business owner. Sometimes new acquisition can be too when there’s so much more to be made if you also go after cultivating your best customers and getting them to buy again and not treating customers the same. Identifying the whale versus the minnow as you say, or the good customer versus the not so good customer and treating them differently.

Drew Sanocki: I don’t mean to come across as being against acquisition. It’s vital, it’s more, just think about the kind of customers you’re acquiring. I could acquire a ton of customers for any business. It’s easy, 50 percent off your first sale. Done, you’ve got a bunch of customers now, but they all suck so … I think paying attention to the quality of the customer who comes through is pretty important.

Brett Curry: Fantastic. Well, Drew I know we only scratched the surface on this topic and you have a ton more wisdom and insight to share. Talk a little bit about Nerd Marketing, love the title.

Drew Sanocki: Thanks.

Brett Curry: What are you trying to accomplish with Nerd Marketing and who should go check it out?

Drew Sanocki: I talk about customer analytics a lot and it’s kind of a heavy subject and people don’t like it. They don’t like pulling out spreadsheets and thinking through this stuff, but I love it because it’s like tested ways to grow your business. It works. The goal with Nerd Marketing is to make it easier to understand for any business owner,. There are really heavy books out there on Amazon all about customer data analytics and they’ll put you to sleep. The goal with the blog is to try to make it a little but more digestible. I just launched a podcast I think you mentioned where it’s just me talking about this stuff 5 to 10 minutes a week. The goal is to give you one actionable step every week to grow your business. That’s nerdmarketing.com.

Brett Curry: That’s fantastic. I will say that it is very digestible. They’re fun reads. I get your newsletter, it’s also a fun read. Great subject line, it’s entertaining. If you’re not careful analytics can be absolutely, mind-numbingly boring, but the way you put this stuff together is fantastic. Everybody check it out, nerdmarketing.com. How can they follow you on Twitter as well? Because I know you are pretty active there.

Drew Sanocki: Just DrewSanocki.com S-A-N-O-C-K-I that’s my last name.

Brett Curry: @DrewSonacki. Well, Drew, this has been a ton of fun, we’ll have to do it again sometime, really appreciate it and we’ll talk soon.