Tanner Larsson  0:03

Hey, and welcome back to the Optimized Ecommerce Podcast. I’m Tanner Larsson. This is Matthew Stafford. And we are the owners of Build Grow Scale. I think that’s that company over there, I think right? That’s our company. So today, I think actually, I have to talk a lot today.

 

Matthew Stafford  0:17

So what I’m gonna do, I heard Tanner wrote a book. And so we’re going to talk about that. 

 

Tanner Larsson  0:22

Yeah. 

 

So it’s become the biggest inside joke that’s not even funny. But everybody thinks it’s funny.

 

So it’s actually not that funny. But apparently, this book that I wrote back in 2016, while he was sitting in the office with me, he never knew I wrote. 

 

Matthew Stafford  0:37

It’s funny amongst our crowd. 

 

Tanner Larsson  0:39

Especially amongst our customers.

 

Matthew Stafford  0:40

I get asked all the time, should I run through a funnel? Should I run my products through a funnel or should I run my products through a store? We’ve obviously done both and Tanner did write the entire book on ecommerce funnels, and how they work and then I know that you have another version coming out of stores, why don’t you go ahead and I’ll let you…

 

Tanner Larsson  1:03

Okay. So again, guys. That is the question, right? Because when this book came out in November of 2016, is when we published this, where we were at and where the ecommerce industry as a whole was out was very antiquated. That’s why this book was written because it was so antiquated. We had to basically evolve it and show the world what really ecommerce looks like. And in this version, if you’ve read it, the first section of version one was all about how you should never send traffic to a store and always to a sales funnel. Okay. Now, at the time, that was the common and accepted wisdom, right. And it wasn’t just accepted it was proven, it was what was happening, we could get a funnel to convert so much better than we could get a store to convert. And so at the time, the methodology used the funnel, and then used your store as a back end in a way to send existing customers and past customers back to the store. Okay? Now, it’s 2020. Right? A lot has changed. Okay, now here’s the thing. I’m going to get into whether you should have a store, a funnel and what’s right and what’s wrong. And honestly, there is no right answer. Almost anything can be done both ways. There are some benefits to doing one versus the other. But I want to talk about the evolution of where the Build Grow Scale came from. Because when I wrote the first version of this book, which we were doing funnels with the store on the back end, everything was on a landing page because we could get much higher conversions, higher average order values and all that. And then we could use the stores later. Here’s what happened. Okay. As we started working with more and more companies, through our amplified partner program, and through our business accelerator program, and just considering a lot of consulting, bigger companies and more traditional online vendors have a very hard time grasping the sales funnel concept, or if let’s say they’re an apparel company, how do they even fit their 600 skews into a sales funnel, right? It doesn’t work for a whole business model. Okay? So it was very hard and they also didn’t want to adopt it. So what Matt and I had to do was, okay, well, some of these guys just aren’t going to use a sales funnel. So we had to go back to the drawing board and really force our attention on to the store. Because before we could get away with a sales funnel, we didn’t have to pay attention to the store. So that would put turned all of our attention to the stores. And mostly through Matt and the original small dev team that then turned into 45 or some odd people now that are good, we’re over 40 full-time optimization experts. Now. We’ve figured out that everything we were doing on the funnels, we were able to take those core elements out of that, and the principles that were making them work and apply them instead of in a sales funnel was more of this way, right? A store goes more horizontal. So we were able to apply them to the store in the same way and now we can get a store to convert almost as highly, if not as high, as most sales funnels. So you know where people are getting I got a 4% conversion on my sales funnel. Cool. That’s our benchmark average for all the stores in our network. You know, we had one store over Christmas last year for the last Q4. 

 

Matthew Stafford  4:18

The entire Q4 converted over 10%.

 

Tanner Larsson  4:20  

And that’s in the 7-8-9 percent not uncommon. And now it’s not all the time. And obviously, if you throw ship traffic at it, then the conversions drop, but the thing is, is we’ve been able to duplicate the performance of a sales funnel on the stores, okay. And now, Build Grow Scale methodology, our processes, our systems are built more around a storefront because it’s more sustainable. It’s better for repeat and lifetime customer value than the sales funnel is. Now, I should probably explain that. 

 

Matthew Stafford  4:49  

Go ahead.

 

Tanner Larsson  4:50  

So let’s think about this. A sales funnel is great for acquiring customers, okay. And the reason that’s -why we still use it. So let’s, let’s lay that out. If your business has a very, very high acquisition cost on an optimized store, if your store is not optimized, your acquisition cost doesn’t matter because if you dial in your store, your acquisition costs will drop. Okay? But let’s say you have an optimized store and your acquisition cost to acquire a customer is prohibitively high, you’re not able to break even or turn a profit, okay? And you can’t boost your AOV anymore on the store, then you’ve done at that point, looking at a sales funnel for customer acquisition makes a lot of sense, because you can control the AOV and manipulate it a lot more using upsells downsells, post-action flows and things like that. And for acquisition, the first time a customer sees you and goes through a funnel, it’s cool, they’re fine with it. But if Matt bought through a funnel one time, he doesn’t want to go through the same hard sales pitchy funnel the second time.

 

Matthew Stafford  4:56  

And if I already bought your main product, I might want to see what else you ought to remember your funnel is not going to have a whole bunch of offers –

 

Tanner Larsson  5:37  

No way I can jump back to the upsell, right? 

 

Matthew Stafford  5:59  

You choreograph in the experience for what’s your highest best use product.

 

Tanner Larsson  6:04  

So where we still use sales funnels and we recommend people to use sales funnels. Number one is if your product has a for some reason has an abnormally high acquisition cost for example supplements, they typically have a very high AOV, especially if you’re selling subscription off the front end, then manipulating a sales funnel to maximize that AOV to acquire the customer at breakeven or better, is the best way to do it. And then you would, all future marketing to that customer goes through the store. So you need both, okay, it’s not so much a one or the other it’s a both. Now, if your products are more, not as hard to acquire customers and you have a more normal thing, you can get away with no kind of landing page or funnel, especially with most tech store technologies now allowing for post-purchase upsells which was really the awesome stuff. Now they’re not great on most store platforms now but they are getting better. And I think within the next year or so they’re going to really have that dialed in. So it’s not so much a matter of one or the other. It’s more a matter of what fits your needs. But I highly, highly recommend you do not exclude the store because where we found it with over $400 million worth of sales results in just the last couple years from doing this. The store is magic if you do it right. 

 

Matthew Stafford  7:24  

And that’s the reason why the new book-

 

Tanner Larsson  7:27  

So yeah, but I already forgot about that. Yeah. So it’s time to update because everything has changed again. So this book, version one was written, it was very sales funnel focused. The new book follows our revenue optimization methodology, which we talked about in the previous episodes about what this whole podcast is about. And it really dials in how we approach store based optimization, applying sales funnel principles to a store to make a store convert on both the front end and the back end and for repeat customers, so that’s the new version. And it should honestly be done in the next couple of months. 

 

Matthew Stafford  8:05  

And the cool thing about it is, when Tanner wrote this, it was basically built off of all of his experience with sales funnels, the new book, we were actually able to leverage the team. So we have multiple viewpoints for the same thing. And so really what you’re getting is a much broader spectrum of multiple things and doesn’t just rely on 1%. 

 

Tanner Larsson  8:29  

And on top of that, the data that like, so when I wrote version one of this he like he said, as most of my experiences, you know, it’s millions of dollars in sales. But it’s not scratching the surface of the amount like we’re with through our network of partner stores and everything else. We’re processing tens of thousands of sales a day sometimes 

 

Matthew Stafford  8:49  

We have one store, that in a period of a year we’ll do more millions of dollars in what we did through sales funnels. 

 

Tanner Larsson  8:56  

Totally, so the data that’s proving these points is just, it’s amazing. So everything in the new version of this book is literally our tried and true best practices. And the most dialed in, accurate will work across any store that we can possibly give you information. Now, of course, disclaimer, there will be that one store where they’re like, this doesn’t work for me. And why is that?

 

Matthew Stafford  9:19  

Well, as you said, each one has a different view. So you’re going to need to ask yourself the question of product, does it need education? Acquisition cost? Is the story going to be the, is it going to be proper for my customers? Is it, what they’re prototypical? 

 

Tanner Larsson  9:41  

Yep. 

 

Matthew Stafford  9:41  

So there’s, there’s a multitude of things. Yep.

 

Tanner Larsson  9:44  

So all that’ll be in the book. It’ll be in the next few months. As soon as it’s released. We’ll have it out on the podcast. We’ll have it on the website. If you want the version one of the books which is still totally valid. Is Ecommerce Evolved book.com you can or you can go to https://buildgrowscale.com/ and pick it up there. Speaking of URLs, it’s time for you to subscribe to this podcast, guys. So if you’re on iTunes, make sure you subscribe on iTunes. If you’re on YouTube, please subscribe on YouTube and whichever one you’re on, go to the other one, and subscribe but there as well. This is a video podcast. So you’re going to want to be able to see what we’re sharing on our screens at different times. So if you do need to links to both of these, or you need to link to the other one or you want to see the show notes on the blog, go to build, https://buildgrowscale.com/podcast and everything you need will be right there.

 

Matthew Stafford  10:30  

Guys, make sure that you leave a comment or review. We really appreciate the reviews and also the comments. And we’ll go through those and then use those to tailor the future show –

 

Tanner Larsson  10:42  

With that, guys, thank you for listening, and we’ll see you in the next episode. See ya.