Navigating Agency Accountability & Black Friday Projections with Josh Tay

In this episode, Nathan and Josh Tay discuss the importance of accountability in agency relationships, the challenges of forecasting retention and sales, and the necessity of setting realistic goals. They delve into financial transparency, especially during Black Friday, and the impact of offer structures on consumer behaviour. The conversation highlights the significance of profitability over revenue and the complexities of branding in a competitive market.

Takeaways

• Accountability is essential in agency-client relationships.
• Forecasting retention sales requires a different approach than acquisition.
• Setting realistic goals is crucial for agency success.
• Financial transparency fosters trust between agencies and clients.
• During Black Friday, prioritizing profitability is key.
• Brand loyalty diminishes during high-discount periods.
• Effective bundling can enhance profitability and customer satisfaction.
• Understanding P&L is vital for informed decision-making.
• Agencies must connect their actions to financial outcomes.
• Consumer perception of brands can take years to evolve.

Chapters

00:00 Understanding Agency Accountability
03:06 Forecasting Retention and Sales
06:00 Setting Realistic Goals and Expectations
09:02 The Importance of Financial Transparency
11:59 Navigating Black Friday Strategies
14:52 The Role of Profitability in Marketing
18:11 Branding Challenges and Consumer Perception
20:57 Utilizing Data for Effective Decision Making
24:11 The Impact of Offer Structures on Consumer Behavior

Transcript

0:00

Hmm. Welcome back to the podcast. In this episode, I'm joined with Josh Tay. It's our second episode of the last one did so well. We'll be talking about vetting agencies. We'll be talking about potentially Black Friday prep as well for econ brands and how you can ensure that the agencies that you go into Black Friday with have alignment with your financial outcomes. So thanks for joining me again, Josh. Thanks for having me again, Nathan. This is something that I love a lot. The concept of... accountability. It's this new thing that I'm obsessed with actually, Skin in the Game. After reading a book by Nicola Nassim-Taylor, Skin in the Game and Black Swan, the whole series, and then I started to think about all the different ways in which there are very serious agency problems. An agency problem is something that cannot be completely removed. There's a reason why an agency is a separate entity and there's no way to be fully accountable for your brand success, right? So I've been going down the rabbit hole, trying to find different ways to keep our internal team, because as much as I can care about the client, I can't decide for my team to care as much about the client. The same thing, I also want to make sure that other agencies don't get, other brands don't get burned by agencies because it happens so much. Whether it's a freelancer, even for a big agency. happens all the time where you speak to a really amazing salesperson. Could be the founder, super knowledgeable, and once it gets passed on to a junior strategist, gone. Yep. Yeah, I couldn't agree more. When it comes to holding accountability, I actually have some ideas that I want to test and roll out in BlueSense, but I'll pass to you to get your thoughts. How do you ensure that there's accountability held by the agency and what common mistakes have you seen in the past or potentially even that you've made? think one of the base reasons why there is no accountability is because there was never gold selling to begin with. And this is also a very common problem with, especially on the retention side, not too sure on the acquisition, whether it's as big of an issue. But on retention, what happens is that you can't really forecast, or at least like no one has been talking about forecasting retention sales and retention revenue. It's easy to forecast future sales based on predicted ad spend, right? But then for retention is not going to be as linear as that could be. So I came up with a different model for ourselves where we look at past performance, create an over the last night, 120 days, even up to like 180 days, just to see what the historical rate would have been for each campaign type and then break it down further. So we're going to have, let's say one is going to be on product-based campaigns. One could be an engagement-based campaign, one could be a promo-based campaign, could be a social proof campaign. And then you can break that down like further into each type of promotion. So you can have like a, buy X get Y promo, you also could get a store wide promo. You can have like a double points holiday promo and the duration of each promotion. Like there is a very, very mathematical way in which you can break down and anticipate. based on past performance, what it's likely going to happen again, based on however many recipients you get and what segments you get. So it becomes a very scientific model that no one else in the entire world is talking about right now. And that's something that I've been training my team on to make sure that we are able to match these. And this becomes our basis of why we want to do certain campaigns and send them at certain times. And then we match that with what we call our pulse tape goals. So something that also no one really does is track on a regular basis, especially on retention side. Everyone just reports on a monthly basis, which I mean, it makes sense. Yes, you report on monthly basis, but at that time, it's probably a little bit too late, right? It's like when you are driving, even if that's you're driving on a straight road. you still make micro adjustments every couple of milliseconds. You don't just hands off and expect the car to go straight. So the same thing should actually happen even within the agency on a weekly basis or even like every half a week for that matter. You should be checking the account just to make sure that performance is going on track. So we've got a pulse tape that allows me or the lead strategist to be able to see from a macro view. And then the strategist goes in to check everything on a micro view. So then we have two different views of which we track performance. So on the pulse take, we have goals that we set on a monthly basis. So these goals will be aligned with the client's goals. So whenever we have any form of client intake, we have an onboarding questionnaire. ask, okay, what is your goal for this month? What's your goal for the next 90 days? What's your goal for the next 180 days? Are there any promos that you plan to run? Are there any future product drops that you're to have? What operational constraints do you have? Right now, what's the biggest concern for you? Is it maximizing profitability? Is it making sure that you're releasing your liquidating products for cash flow? Why is that a concern for you? Understanding these things and asking the right questions, honestly, is the biggest differentiator in a good agency and a bad agency. If a brand is... If an agency is just going to... immediately recommend a playbook for you, I'm quite skeptical of that. I do know of many agencies who do audits, and that's great, right? And I think even for ourselves, we do audits. Most other agencies do audits, and I think that's a very good entry point offer. And that's a very good value to show before you even get started at work, right? What's missing? How can we plug the gaps? What can be optimized? But one of the bigger constraints, one of the bigger issues missing is why was that even implemented? No one really asked that question. just like looking back at this. Yes, when you look at, but it's hindsight bias, right? Everything that you look at from a third party point of view, you look backwards. Yes, I would have known this. Same for financial crisis. Every economist could have predicted a financial crisis, but why didn't anyone? Right? Because it's impossible. There's so many different factors happening at the same time. So with that, can't take an audit. We have to take an audit at face value, right, with a pinch of salt. There are some things that would make sense in theory, but whether it pans out in reality would be a completely different subject altogether. So having some form of accountability in terms of the brand, not even having the brand have a financial tie to you, they must meet whatever goal and whatever objective you have, regardless of what it is. And this cannot be set by the agency, it has to be set by yourself. So the brand has to set that goal. You set the KPI and you hold the agency accountable to that. You say, by this time, with this, we have this goal, right? So whatever the goal is, within a certain timeline, I want to meet this. And then next thing you have to do, would be to determine and to have this discussion with the agency. Whatever you want, whatever goal that you intend might not be what is achievable. So based on where you are right now, how else can you bridge that gap? Because where you are right now and what plan that you have might not hit this goal. So you have to look at that trajectory and make sure that this actually makes sense and it's actually feasible. Because if not both, we'll be at a losing end and everyone will be unhappy in this relationship. think that's actually a really good tell of whether it's a good agency or not is whether they're going to tell you whether unrealistic targets are actually unrealistic. And like you could go and decide on some unrealistic targets, take them to 10 agencies, present it to all of them. And the ones that say, we can hit that. Don't go with them. Like you've immediately vetted down to the agencies that are actually going to give you realistic projections as to what's possible within the bounds of, of your business. You wouldn't believe how many brands we onboard. where we're just like you in terms of the onboarding process, we get very clear on 30, 90, 180 day goals. So at the 30 day mark, we can look at the goals we wrote down and we can say, it a success? Wasn't it a success? And then what was the disparity in our assumptions that led to an output that wasn't desirable? And then do we need to reassess the 90 and 180 based on what we now know at the 30? the amount of brands that are like, I don't know. Like, I don't know what my 30, 90, 180 day, it was so high that now we make them fill out a form two days prior to the kickoff call, because normally we would ask on the kickoff call. Two days prior, we say, here's the form. That's all it is. Think about it for 48 hours. And so when you come to that call, we can have a really constructive discussion around what you think is realistic. And then ideally, we're having that discussion during the initial exploratory sales process in itself. And we're getting clear on objectives there because if you don't know what you're actually working towards, what defines a win and then if you can't define a win, you never will win. Yeah, that's a huge one as well, right? Moving targets are also a huge... It's a big no for us. Or whenever you have a goal post that's constantly shifting, whenever you hit a certain target, it just moves and say, we are still not happy with that because there's bound to be something else that can be improved. There always will be something else that can be improved. Whether it's in terms of the timeline. whether it's in terms of cost, whether it's in terms of total revenue and the output and that, there's always something there, right? So, yeah, it's a huge thing and being clear on the goal is something that we are also a big proponent of. So, we've come to the point where we've started to be very skeptical of who we bring on and very selective of the brands that we bring on as well. We must know that the brand owner or the team is capable of setting their own goals. If they don't have a marketing calendar at all for the next one quarter, it's hard. It's hard for anyone to do anything because whatever you propose, there's a very high chance that when it's down the road and it's almost time for the campaign to be launched, something's going to happen. and you're going to be reactive to it and you want to change it. And that's not good for anyone else because at a certain stage, I think it's going to be the same case for many brands, even up to like 20 mil, like 25 mil. At these stages, it makes more sense to just up the volume and just bang, bang, bang, bang, bang. The frequency and getting the reps in make a lot more impact and like, yeah, on an ICE score, impact confidence and ease, on an impact level, this makes so much more than if you were to do something reactive. If let's say something happens in the world and you see a competitor doing something and you want to react to that and you say, okay, I think this is a very good idea and we want to do that as well. chances are it's not going to pan out the same way as you would expect it to be. First of all, you don't even know if it's going to be a successful campaign for your competitor. Second of all, if you are reacting to poor performance from last week... very often it could be purely a fluctuation that you cannot account for. That's why we have, our politics help us to understand this because we can see trends over a much longer period of time. And we recently also had created a BI dashboard. So our business intelligence dashboard, we build it on Power BI. So we can look across the last one year and look at the entire trend moving upwards on downwards. And then based on what activities we are doing, how is that going to affect this? Is it going to be a huge fluctuation? Is it going to be a minor fluctuation? And then we look at that and compare that against sales trend. So the sales trend, individual flow trend, the campaigns trend, and we also make sense of that with any kind of attribution tool that our client has. So if you're using Triple Wheel, you're using Northbeam, we are looking at all that stuff as well. And then something that we like to do, and I know that there are many agencies who don't like it. They don't like inter-agency work. They don't like collaborating with other agencies, but I don't care. I want my team to be able to do it because I think that's essential part, especially when you say that you are the partner of your client's brand. If you're the partner of your client's brand, there's no reason why you shouldn't be partnering with other partners because you are essentially an entire business unit now. You're just an extension. So you have to be able to understand what's happening on the other side and work with them whether or not it meets your individual goals. because it might not hit my individual KPI, but it grows the entire brand. And the business owner must be clear enough and understanding enough to realize that marketing is really just a huge chunk. There are many different moving parts that all affect itself. Not everything is going to be causation. Some things will be correlation and they're going to be ripple effects. Something that, let's say, if we were to collaborate on a brand, If you do something, it's going to have a direct impact on us. But it's not because something that we did. If let's say you increase ad spend, our welcome flow is going to have an increase in revenue. Is it because something that we did? No. It's because something that you did. So same thing. It also affects the efficiency of customer conversion. Whether you have a code on the pop-up, for example, new customer conversion rate is going to be very much different from if let's say we need to remove the code and only have that in the welcome flow. Yes, I would get higher attribution in revenue would look like a win. But then it's going to reflect badly because the efficiency of conversion, and we've seen about 30 to 40 percent drop and lead to customer conversion rate on the side. in a way, yes, it might not look good on myself or I could be looking better, but is it something that a client would want? Of course. Then why shouldn't I do that? There's no reason for me not to. And if I'm good enough, I should be able to have wins in other aspects, not just this one. It's very selfish of me to do that. But that's the reality of many agencies. I think that this is something that I just want to spread this awareness that there are many ways in which you can game a system all the time. A repurchase rate can game it so many ways. Run a 70 % sale, done. But is it going to be good for your bottom line? No. Same thing, like let's say you were to just... reallocate your entire budget to retargeting ads. Yeah, sure, you're to have a shit ton of revenue, but this is something, are you actually growing anything? You might not be, right? Is it a goal for this period? Are you mitigating any future impacts down the road? You don't know. So everything needs to be taken and you need to look at things on both an immediate point of view, as well as a long-term point of view, and what's the risk and what's the opportunity cost to every action that you take. And if an agency is unable to do that and unable to have this form of, and this level of conversation with you, I don't think that is a good partner for you. I agree. I think that an agency to bare minimum needs to be able to understand the link between what they're doing and the financial outcome, which is what we're really big on. know you'll be on it as well. Or else you're just, you're just going to. I've never thought about like this, but if you set up a game with certain parameters and you win based on, let's call it attributed row as, or you win based on maximizing revenue, then the system will automatically optimize towards the cheap route to be able to do that. And you'll just end up cranking budgets on retargeting, or you'll just end up running a brand search with majority of the budget on Google. There's so many, and there's so many ways to game it on, on EDMs and retention as well. So you almost need to disconnect from what you would normally optimize for and either take it a step further and go to profit contribution or something relevant within the P &L or just have a more holistic understanding of what you're actually doing and be able to tie the discussion into the actual business impact, which why don't most agencies do that? It's really hard to do. You need to have an understanding of business and financial operations and marketing all tied into one and it's not easy to teach. Yeah, I love that you just mentioned about contribution margin because this is, not many people know about it. And everyone is just talking about revenue, right? And it's a huge thing, which yeah, like cash flow makes sense. You also want to make sure that you have enough top line because you have your overheads and you pay them off. again, like contribution margin is not the be all and all. It's not going to be the main priority for you every single time. But there needs to be some form of unit economic calculation. goes on before you even start a brand and that is not happening enough. So there are many, we've got two, three brands that doing like three to five mil per month and they don't even do that. So we said, hey, you know what, let's just do this exercise together. Let's deep dive into this because yeah, it might be an extra complication for us, but it's gonna be extremely beneficial for you. because now you know exactly what products you should be pushing, what promotions you should be pushing, why you should be pushing these things, when you should be pushing these things, and in terms of total LTV, like which customer segments you should be going for. But yeah, it's insane how people don't talk about that. even on the LTV basis, on the lifetime value basis, there are so many different metrics that you can be calculating things on, right? And the common mistake that people make when calculating lifetime value is that they're doing on a revenue basis. And it might be gross revenue, and most of time it's gross revenue. Some people might be looking at net sales, then not many people are looking at the gross margin LTV. But then from within gross margin LTV, you should also be looking at a specific time window, like whether it's a 60-day LTV window, 90-day LTV window, 180-day LTV window, depending on the product cycle and the consumption use and the consumption and usage of the product. So there's a lot of talk about all this stuff on LinkedIn, all these experts preaching a big game. But when you see them, or when we take over from some other agencies, we don't see any of this being practiced. So it begs the question, like, What is the point of everyone talking about this? Is just for them to sound smart and to back the client, but they don't actually know how to follow through? Or is it because the brand itself is too premature and it's not that impactful yet? So I think there are two sides of the coin over here. And yeah, I'm also very curious to know what's your experience with this on the acquisition side. Yeah, I would say that it's probably people parroting. more advanced concepts that they don't know how to actually put into application. And like, I'll give you an example of what you were just saying, which is during our audit process, during the audit that I do, I'll report on a 30 day LTCM. So lifetime contribution margin, 90, 180. And then I'll show them their LTCM to CAC ratios across every single cohort for the last 18 months. So right out of the gates, we know how much actual contribution profit, or you can think about as gross profit is being generated across months because on acquisition the most important calc as you would know is LTCM to CAC. If you're acquiring customers for more cost than you're actually getting on gross profit on that order you're not making money which in some very rare instances is fine if you have incredible retention uplift but in 99 % of instances it's not fine and you're putting a huge amount of risk. into the acquisition model and you need to fix it pretty quickly. And so that's the first five minutes of every audit is me going through that concept with a brand and running them through their historical figures. And the fact that it isn't just tax that impacts the dynamics of acquisition. It's also first purchase profitability. And so if your average order value is doing large swings, your profitability is gonna jump all over the place in accordance with those gross margins. And so I think that most agencies or most thought leaders don't have the tooling or haven't developed the tooling required to be able to actually exercise the theory because all of these things sound incredible in theory. And I can sit here and this is somewhat the annoying constraint of content is that people could just call bullshit on me all the time, because I can just sit here for two hours and talk about these more like advanced complex e-commerce topics. And people can go, cool, you can talk about it, but can you actually do it? And I can't pull up the tooling because it's all internal and I don't want people to steal it, but it exists. And we can actually follow through with the promise that's delivered within the content. And so think people are just using it as a sales tool. One other thing that I'm also curious about on your side is the concept of transparency and trust. Because I know that finance is going to be a very touchy topic for many businesses. They don't want people to be able to know the entire P &L. Has this ever been a concern for you? And how do you get around it if a client doesn't want to let you see everything? every single client that we onboard, we get their P &L down to the EBITDA level. And so firstly is people don't realize, or at least most brands don't realize that just with Shopify and account access, you can get all the way down to the profit contribution level, which makes obvious sense to you. But most brand owners don't think about it like that, which is that you get access to gross revenue, take off discounts, take off returns, then take off gross margin. As long as costs are tagged up in Shopify, take off direct marketing, you get contribution margin. So you already get a pretty good idea. what their P &L looks like historically. And then from there, all you need is OPEX. We'll try to push for OPEX in the initial call, the first time we've ever met them. We'll say, like, where does your OPEX sit roughly so we can get a break-even calculation on when you're actually profitable? Half the time, 90 % of the time actually, they will not give it. People don't, because people know that that's going to give you access to be able to calc bottom line. But then once they onboard, it's a requirement. We won't let people sign the contract unless they give us not only their OPEX during onboarding, but a breakdown in terms of line items. Because quite often people don't even know what OPEX means. I've had it happen multiple times where clients have onboarded and given us a 50,000 a month OPEX figure. And I've gone, there's just no way they're operating at that because they're losing 20 grand a month. They have to be, are they funded by private equity? What's going on? And then you ask them and they go, I thought OPEX was ad spend too. And you go, no. Let's remove that out. then, so you almost need the granular level just to fact check the own client, the client because they don't have an understanding of finances and how the expenses should be split. We haven't had an issue with it. really, there's been one or two clients who have onboarded who have been pretty skeptical about giving us OPEX, but funny enough, and you can probably guess this already, they're the smallest clients we have in the entire portfolio. And so any business owner that is at a size where they want help, they will provide the information that's required for us to give them help. It is only to your benefit, as long as you trust the agency that you're working with, to have them across your break-even point on... and revenue thresholds. Because if you don't have OPEX, you have no idea what that figure is. And you end up in really, and you've probably had this with, in fact, we've had this on the same client. We've had this historically where there's this push for revenue and efficiency. And that really summarizes business to me, which is, and people get very annoyed. It's like, we need to do X amount of revenue and X amount of efficiency, or we go broke. And from our end as an acquisition partner, and I could almost imagine every agency resonates with this, is we can't get improved efficiency and improve revenue simultaneously. Like we need to get efficiency up, then work on volume, or we can get volume up and then we work on efficiency. But the unfortunate reality of business is that you do actually need to do both. in a lot of instances, or you need to cut OPEX, or you need to improve the unit economics of the products that you're selling. And those other two routes, improving the unit economics of the products that you're selling, or improving the offer structure, or reducing OPEX, if we can't have visibility on that, we're constrained to these parameters that are incredibly hard to operate within, which is just, get volume and efficiency up, which is the impossible challenge that honestly we should be charging 40K a month to be able to do. Because if you can do that, you turn a business into being incredibly valuable incredibly quickly. And so having visibility on the OPEX actually gives you that. understanding of, okay, we don't actually have to achieve that level. We can achieve this level, then we can focus on efficiency, and then we can crank volume over here on a specific timeline that is actually achievable and probably ties back to the very start of this podcast, which is setting those expectations along a timeline that's actually reasonable and makes sense. And I believe that's only possible through visibility on those figures. Because speaking about that, like when we go into Black Friday, Efficiency will definitely drop, especially pre-BFCM. But then there will still be some clients who will be looking at... the same efficiency or they still want to have improved efficiency month to month. And a lot of them will be tying stuff because this year is going to be a very weird year, especially with BFCM being like going across into December. So you can't actually forecast in the same manner. And if you use like year on year revenue, it won't be the most accurate thing to do. So how do you manage expectations on this? or what is your approach to it this year in terms of forecasting and working with cross-functioning, let's say working with an email platform, an email agency to make sure that you are still hitting the same revenue goals and the same return rates. Yeah, it's a great question. A side tangent is going to be that I want to work on a model that I know a few agencies out there do it and it's relatively simple to do that takes historical cohort data and then extrapolates forward so that you can predict recurring revenue monthly based on historical cohort acquisition and average retention uplift. I would like to bake that into the model in terms of being able to predict these next few months. But it's predominant. going to be a combination of the offer willing to be pushed because that has an enormous impact on the demand capture during the period? Are they going to want to go aggressive because they overbought on stock, which is surprisingly common. We have a lot of clients in that position at the moment. Or have they bought relatively lean and so we don't need to push an aggressive discount and we can focus on profit contribution. And then that's paired with how is year on year growth been for that specific brand to date. If a brand is up 60 % year on year, which a lot of our brands are, then we're going to translate that into Black Friday and then put an adjustment based on how convincing that offers. Vice versa, brands that are flat, which by the way, most brands are up only five to 10 % year on year. It's not a good year in the macro. For those brands, we will pivot to similar growth rates, but I'd be interested to see how you're approaching it. Yeah, we are in a very similar manner actually. So something that we have been trying to get from most of our ad partners, if you do work with them, would be their efficiency on each ad. So we want to know what's their breakdown as well. And if they are... conscientious with everything, they should be tracking it on a daily basis. So the daily ad spend and you normalize that based on the efficiency, how much, how many unique visitors are you expecting to get? What is the new customer revenue? What's the returning customer revenue? And based on that, then we look at past performance. on a, so back to that pulse state from years ago, and then we're to have that breakdown. We're going to do an exact breakdown for BFC and PUA. And we're going to see, okay, based on these people who were engaged that period like previously, how many people are likely to be re-engaged again during this period? Are there any channels that we are opening now? If let's say previously it was only email SMS and this year we're doing direct mail and then we have to bake that it will go to factor you know and increase in re-engagement from that because a lot of the time whenever you are doing multi-channel stuff like there's going to be cross attribution. And it will be very hard for you to actually predict and attribute things correctly, because every platform is going to over attribute things to themselves. And there's no one tool that will help you to be able to see everything clearly and as is. So then we've got to take that again at a conservative level. And then after that, see how we can further improve that by overdoing it. Because at this point, we want to... we'd rather overdo than underdo. But at the same time, we don't want to make sure that our delta isn't too much. So we want to shoot for something within like 5 or 10 % of whatever that we forecasted. that's honestly a very hard thing to do. And we don't really do this with many clients either. We only do this with clients that are willing to pay us a little bit more. And I mean, everyone would want the best service, but then at the same time, this takes a lot of effort. It takes a lot of collaboration. We do have like an hour, two hour long calls with with other partners, with the finance team and everything, just to be able to forecast all these things. And yeah, the sad truth about all this is that a lot of time, the forecasting isn't even done right. Either that or like the modeling from before has a lot of flaws in it where it does not take into account macro factors, right? Or you could just, if you overspend. what's going to happen, or you decide to change the offer, which actually happens surprisingly often. And I'm not sure why. People like to change offers during BFCM. And that's because someone else down the line previously had told them that they had some offer fatigue somewhere, somehow. Offer fatigue is a big issue, and ideally it shouldn't have been happening to begin with, but that really isn't the time to be testing anything new. I'd rather test and run the exact same thing that customers are used to than try to change anything. And then, you know, in Q1, we relook this whole thing. Another problem that we've had is that some clients have said that they don't even want to run a promotion due to Black Friday. Have you encountered that? Like, because they get suckered into the no discount theory and we are a premium brand, so premium brands don't discount. And they decided to just cut discounts altogether. And that's wild. It's insane. And what you end up seeing, even in the non-promotional period, like revenue just tanks and it's irrecoverable. Yeah, I'll give you. I'll give you one exception to that. There's only been one exception in the whole space where I've seen somewhat success in not running discounts on Black Friday. And that is in a incredibly commoditized product space, which is a need of a product. And so it's not a want, it's a genuine need. Like I need to buy this thing and it's on a somewhat repeat purchase cycle that's consistent. And so people need to buy the product every 30 to 60 days. And they will buy so regardless. If you run a Black Friday sale, you're sort of pulling revenue from the future back to that period and doing it so at a discount. You could argue that because you're capturing that cash earlier, that that discount applied actually has value associated with pulling money. back to today. But that is the only instance where I've seen good historical data, which has proven that is it worth running the sale? Not really. We ultimately get the same revenue over a 75 day period because these people have to repeat buy regardless. But the premium brand thing I think is ridiculous. I think it's crazy. Yeah, recently we've been having a lot of premium brand issues. speaking of brand stuff, it's not calling yourself premium doesn't make you automatically premium. Just saying that you are science-backed doesn't make people perceive you as science-backed. Saying that you have... doctors to back and experts that back everything does not make people believe you anymore. And I think that this is going to, is a huge branding issue because previously I was from another agency where we did a lot of branding stuff. We did work with a lot of branding agencies and like branding exercise can take up to like two years just to see any form of customer sentiment shift. So for you to just change everything and change the messaging altogether, it's not going to be an immediate thing. And you can't expect, like even if you pump a shit ton of ads, but to do PR stunt with lots of influencers, it's not going to change how people see you immediately. So if let's say that is the route that you want to go down and want to see that immediate impact for Black Friday, or even like let's say you do it now and you want to see that at start of the year, it's not going to happen. that actually like changing the call message, funny enough, actually in many cases, doesn't really turn out, doesn't pair up very well for many brands because people just aren't used to you being like that. Right? It's as if like you were in school and it's it's funny because I was at a school reunion about two, weeks back, three weeks back. And then people that I knew to be super extroverted. In school, life happened. That was like 15 years ago, life happened to them. So they got married and then suddenly become a completely new person and become mellow and like, know, it's just weird. The vibe is off and I don't really want to talk to them anymore because it's just, it's not who I was used to speaking to. So then it's a very similar concept with a brand. Right, was previously I used to use this brand. I'm not going to say the name of the brand for protein. It was quite expensive, actually. The market rate at that time was about 80 bucks for a five pound bottle. Not sure what the rate is in the rest of the world, but in Singapore it's it's about there. And then. They rebranded into this premium and they started selling B2B to hotels and stuff like that. So they wanted to go upmarket kind of way. I was used to it. I liked the taste. I liked the effects. And then they started selling it at $120. And I was just like, wow, that's a lot of difference. From $80 to $120 is a huge jump. And they justified that we now serve sophisticated clients. which in a way like, OK, sure, but it doesn't really make sense because your body is still the same. Your sophisticated client who's a wealthy multimillionaire isn't going to have a different body function as me. So what my perceived outcome is, it's different from your perceived outcome as the brand. I'm just not going to buy from you again. It doesn't make sense. So in the same way, if you would have changed the packaging, and previously I was very used to it, let's say it was a super gnarly brand, I love this rugged kind of thing, and suddenly you say that, I want to go soft and demure. That's not going to happen. So yeah. the issue with the brand pivot is particularly a few years into the brand existing is that it takes so long to build a brand image that you probably do need to somewhat think about it from the get go in terms of your. packaging and all the messaging that you're pushing out. And I hate to say that because I really don't enjoy when 10K a month brands, 20K a month brands are focusing on branding because I'm like, no one knows you yet. That branding literally doesn't matter. You have no customers. But then it also is like, well, once you do get two to three years in and you're doing four, five, 600K a month. Hard to do a pivot then because now you have built a customer base and you have pushed out a specific message and specific branding for a very extended period of time. And it takes literally years to change market sentiment about you. I know you've got to run pretty soon. I've got one last question for you that I think would be interesting, which is that. We pushed out messaging quite heavily two years ago that in Black Friday, you should prioritize profit and moving inventory that hasn't moved. Essentially. Category C products and D products. And that should be the objective of Black Friday, not driving revenue. And I think everyone sort of latched onto that in the last two years. And now that's everyone's messaging this year. Everyone's just, hey, drive profit, don't drive revenue, which is good. It's good to see that the market's moving in the right direction. But with that comes structuring offers. And so you need a structure offers in a way that maintains margin on the product. And what that ends up resulting in and what I think there'll be a big issue with this Black Friday, probably next Black Friday as well, is that you start to pull as much value out of the consumer as you can by starting to obscure where the value is in such complicated offer structures that it isn't actually clear what value am I getting out of this exchange? And it's probably just going to cause more harm than good to the end consumer. They're going to buy a product. which is a bundle, it had a bunch of products layered in that they didn't want, and they got 200 points with this brand for doing so. And then they're sitting after Black Friday going, okay, I got this product with all these random add-ons and I've got 200 points. I don't think I got any value here. This is probably a waste of my $250. So how are you approaching that with your clients in writing that line? Yeah, I think that the first concept that we have to understand is being profitable is not the same as trying to maximize profit. And during Black Friday, it's not the time that we restructure everything to maximize amount of profit. If I would be able to have 30 points of margin and another one is 40 points of margin, but one offer on the 30 % one that is simpler for the customer to understand and to check out, I'm going to use that. It's as simple as that, right? Because this is the time that you capture as much value and everyone is just looking, right? During Black Friday, brand loyalty is its lowest. Everything just becomes a commodity. because there's going to be slash prices all around. So if I can, I just want to get that purchase and make sure that I'm able to make some profit out of it. Obviously, I don't want to lose money, but if I can be profitable with the least amount of resistance to the customer, I'm doing that. That's all. So all my offers are just going to be centered around That's the base principle. then obviously if I can bundle in a fast mover and a slow mover, I'm going to do that. And CHERG GPT is amazing these days. I think a lot of people overcomplicate things with the bundling and frankly, I'm not even sure why. You actually don't really need a tool to be able to bundle stuff. You just need to download and export your sell-through rate report over the years and then download and export your sales report over time, over the last two to three years. And then you just put in a prompt. telling Church GPT to find out what your fast movers are and what your slow movers are based on the sell-to-rate. And then you pair that based on the normal first purchase, second purchase, and third purchase based on whatever you see in the sales over time report. And then ask Church GPT to match these things together and say, OK, I want my bundles. Suggest three bundles for me for each type. One is to maximize my profitability. One is to maximize my AOV and one to move slow moving inventory. And then ask chat GPT to do three of each and now you have nine bundles and it's just up to you what your priorities are gonna be. It's as simple as that. And now this becomes like, you can literally do this for nine different days in like Christmas. That's a great idea. That's a really good idea. I'm gonna steal it. Cool. email. Thanks Josh, this was a really good follow up podcast. I think we'll do a third as well. We end up having really good conversations. Once again, I'll put your LinkedIn in the description below. How else can people find you? LinkedIn honestly would be the best thing. Just shoot me a DM, I'm always active there. Awesome. Thanks Josh. Appreciate it. Alright, have a good one Nathan and speak