Data is the key to modern business and there’s so much of it about that the challenge is less about how to get it and more about how to process it all.
Gary Tramer is the Co-Founder of LeadChat who are responsible for those little pop-up boxes on websites that ask if you need any help. Gary explains that he’s now taking his experience with data in e-commerce and applying it to bricks and mortar retail – to provide more information about physical shoppers when they walk into a store.
Simon Mathonnet is Head of Digital Strategy at Splashbox. He’s obsessed with data and digital marketing. Simon shares how he uses data to help startups and long-running businesses to achieve their goals.
Disclaimer: Transcripts may contain a few typos. Similar sounding words can lead to them being deciphered wrongly and hence transcribed likewise.
Serpil Senelmis: What do you think is the most useful data for a startup?
Interviewing Public: It will be starting from customer intelligence. So identify which customers are interested in their business or the products. So this way we need to refine how we get and engage their attention.
Interviewing Public: Potential customers, somehow being able to identify who they are, and their details. Probably definitely some data on the type of consumer you want to target. Who would be interested in your products and some innovate sort of that way?
Serpil Senelmis: For WeTeachMe this is the Masters Series where industry professionals share their secrets to business success. I’m Serpil Senelmis from Written and Recorded. Data is more than just numbers and details, it’s our new currency. All those free apps you’re using are all paid for with data and it’s worth much more than you might think. for startups, data provides valuable insights to understand clients, competitors, and ultimately to hack growth. In this episode of Masters Series, we’ll meet two data nerds sorry, experts who will help us empower our data and get our startups growing faster. Simon Mathonnet is head of digital strategy at Splashbox. He specializes in harnessing online marketing channels for startups to drive growth.
Simon Mathonnet: If you identify that a button on your website is critical to user conversion. Just really design a test that’s going to be maximum impact. Don’t slightly change the color like one gradient or something like don’t change it from blue to light blue, by changing from blue to red. Go from maximum impact with your tests, with your results with everything just make everything count.
Serpil Senelmis: We’ll hear more from Simon soon. Now if you’ve ever had a good chat with a website, chances are you can thank Gary Tramer and his team at LeadChat. There’s little pop up windows that ask you if they can help you. That’s LeadChat. Gary studied neuroscience before popping up in Windows, which might account for the success of the system. That and a lot of data. In this fireside chat with WeTeachMe’s Kym Huynh, Gary says he’s learned over several startup experiences that it’s important to sell first and build your product second.
Gary Tramer: If we sort of go back, I started University, about 2000. I decided to do a degree in behavioral neuroscience, which is really a fancy psychology degree. It sounds far more impressive on the resume. So I did it did his degree for three years and it’s you know that weird awkward time in your life. When you entrust into university, and you really have no idea what you want to do with yourself. And you’re trying to come up with the answers. And your parents are like be a doctor, be a lawyer, and you say, I didn’t get the grades. You know, it’s not as simple as that. It was this period where I was trying to find what I was good at. And sometimes you don’t find that out until much later, I finished behavioral neuroscience. And I got involved in sales. And the sort of sales that I got involved in was probably the dirtiest most frowned upon type of selling, door to door sales. When you go home and you tell your parents that you’re going to do door to door sales. What do you think they’ll say?
Kym Huynh: Well, I can only imagine.
Gary Tramer: So I never said that I was going to do door to door.
Kym Huynh: What did you say?
Gary Tramer: Well, I said I’m going to be a residential sales consultant. Which is like glass for door to door add-in like workbook, and I actually found it really quite awesome. You know, You get the door slammed in your face, you get the dog chasing you down the street. And we were trying to sign people up for energy companies and telecommunications companies. And I actually really enjoyed this idea. Completely commission-based, by the way, no base wage, if you didn’t do a sale, you didn’t make money. We were working 14 hour days. And I sort of knew then if I could do that, and if I can sell in that environment, this is sort of for me. And so I built a company 2004 through 2010, which is actually one of Australia’s largest direct sales companies. So if you would have walked through Melbourne airport or Sydney Airport, between those years, and somebody tried to sell you a Citibank or American Express credit card would have been our guys. And we wrote huge amounts of volumes of sales for these companies. And I decided after doing that for five or six years, if I’m doing so well for these companies, what if I put the sales resource to something that I owned and added some value to myself. And so my business partner, Michael, he’s actually a friend of mine. We’ve known each other since we were three, living the same street, went to school together, best mates, we went on different paths and came back. And in 2011, we decided to do this cool thing called a startup, which back then wasn’t really like a word like this. It was to start a small business, actually, we had this idea. So this is not going to sound exciting at all now, but back then, we thought, How awesome would it be if you could have the entertainment book on your phone? Now I know it sounds really boring. But back then iPhones have been out for like two or three years. It was like really cool. And we asked our accountant to help raise some money because that’s what you do. And we managed to raise about a quarter of a million dollars, which is, I think, quite an amazing thing. We spend I reckon like seven or eight days locked in my house, doing a business plan, using Business Plan Pro software. It’s like a wizard that tells you like what to write, amazing. Because we thought that’s what you do. Right? You have a business, the accountants are like he has a business plan. Yeah, have a business plan. All this thought into how it’s going to work. And we’re paying for these Ibis reports on like industry sizes and things we had now, that’s what we did raise the money. And we spent the money on developing the product. And I say that with a smile because I would never ever do that again. But we spent about $200,000 on the line item in the budget was turned $1,000 on building the app and the website, about $30,000 on the sales guys, and 10,000 on this, and then 10,000 on marketing. And we’re like, it’s going to be huge. The movie, The Social Network, just come out. We were all inspired like, we will be the next Facebook.
Kym Huynh: Did that in two hours.
Gary Tramer: Exactly. And we’re like this will be yes. And needless to say, we built this unbelievable product. Like literally, it was amazing that no one ever used. We got no users,
Kym Huynh: Okay. Why?
Gary Tramer: Because we didn’t spend any money on marketing. We learned this lesson. And I say that now. But we learned this lesson. That was the most painful lesson to go back to investors and say, we lost your money. It takes a big hit on your pride to say that. And it was that gut-wrenching moment that we said, Never again, are we going to build something before we actually sell something. Because to try and market the product, you really only needed a brochure. You didn’t need all this stuff that we build. So we didn’t even know if it worked. And I know nowadays with the lean startup and these sorts of teachings, that’s sort of the way of doing things. And so we’ve applied that ever since, and so I’m going to find For a few businesses to today, as that business was failing, we thought that selling SEO would be cool because Google just released Google Places and we figured, small businesses are probably going to want to rank well. So we took my door to door team. And we went, printed some brochures, and we call the company Search Words. And we decided to go and sell local SEO door to door. We had no SEO team. I don’t think we were even registered as a company or a business yet. And we said we’re going to do it for 12 weeks. And if we get customers we’ll find an SEO team somewhere in the world. But if we don’t get customers or enough, we’ll just refund on the money and say, sorry, couldn’t get your results, which is sort of common in SEO land. 12 weeks went by, and we had 600 paying customers that paid up front for the year about 1000 1500 dollars
Kym Huynh: 600 paying customers in 12 weeks.
Gary Tramer: So we actually have them on printed, like it wasn’t iPads. It was like literally a piece of paper, like a contract, or like tiny writing. So I really went rating it, but put the name, the details, the credit card, they wrote at the bottom, they signed it. We had all the ideas of doing this as a really great business. 12 weeks later, we hadn’t touched any of their websites, Google nothing. And we looked at each other. And we said I think we need to find an SEO team now. And so we did we put one together. And we build that business to about 6000 customers over three years. And then we had this mass realization that building a business that competes against Google’s best interest is probably not the best business model. Because like every three weeks or every six months, they’ll change the game. And you have to redo it all over again, which is very frustrating. And customers saying to us, why am I getting results. I was ranked one, now ranked like nothing And we’re trying to explain to them that’s because you don’t see it anymore. But the person on their phone sees it now, or whatever it was. Search Words actually still runs with one person running the entire customer base. We don’t sell anymore. We just manage the customers. They’re all ranking pretty well. And having so we sort of said, let’s just keep that going. Search Words then morphed into a company, which we started called LeadChat, which we talked about, we had this thing where we were getting traffic to people’s website in SEO land. And the problem was, when you looked at their website, a very small percentage, we actually convert into an inquiry, like 1%, maybe 2%. So we said, how do we fix this? I had a Filipino virtual assistant at the time. She’s amazing, literally amazing. And I was. I said, What if you sit on live chat, like all day for me, I wonder how many people will chat with you on our website and it worked instantly. It worked. We got 10 times the leads. And we said, if it worked for us, and we would pay for this, then we should definitely make this product. Same thing. Let’s find 100 customers. And then we’ll decide whether we’re going to build out a team. We got 100 customers, we built out a team. And later it still runs now and operates in about 10 countries, 15 countries, which is pretty crazy. But the lesson was to sell first and build at second and we sort of apply that model every day. And then it comes to power local. So LeadChat got to the point where it was running quite well. I get bored very easily. I don’t have ADD. I don’t think. But I think entrepreneurs you know, we like the shiny new thing. And then once it’s running, it’s like not that exciting anymore. So this LeadChat business that we had that was doing live chat. We had a customer that was in e-commerce that was like an online store and said can you do chat for us, and we said, of course, we can. Because when you’re in sales, you just say yes to everybody. You know, like, course we can do it. We did a terrible job and their website conversions went down. So they actually lost money. And we couldn’t figure out what had happened. And then we have another customer in e-commerce say, Can you do it for us? Of course, we can. We screwed it up again. So my business partner said, there’s only one way to solve this. Let’s start an e-commerce company. And let’s put chat on and figure out how to do it ourselves.
Kym Huynh: Makes sense.
Gary Tramer: Okay. So the chat didn’t work for this e-commerce company. We couldn’t make it work. But this e-commerce company worked. And within 18 months, we were showing Gamma apparel like hoodies, manufacturing in China. We’re selling them globally, marketing through Facebook. And within 18 months, we had a $20 million annualized run rate. So do we have $1.8 million dollars a month, we were spending about $750,000 on Facebook ads a month and we’re still enjoying all the frequent flyer points, still. And we sold that business to a US big internet company in 2016. And that was a really great lesson on how to sell without salespeople and had to have a business that had really, me and Michael, Andre, who was the advertising guru, and some Filipino customer service reps who were amazing. A team of like five and that was it.
Kym Huynh: A team of five?
Gary Tramer: Yeah, I mean, if manufacturing was outsourced, it’s when we sold that it was a real wake up. It was. This is actually like, This is crazy. We couldn’t make chat work, but we made e-commerce work. And people asked us, what was the secret to making eCommerce work? Like how did you do it so far?
Kym Huynh: Tell me.
Gary Tramer: And the secret was that Facebook allowed us to target people quite uniquely with specific interests. So we had a custom audience. We had an email database that we were growing through these people who had purchased that we could re basically remark it to we knew everyone visiting the website via what’s called a cookie, you know, you see the ads after you visit a website over and over again, so we could get people back. And after that purchase, we could get more money out of them by upselling like a second item for half the price. And so Mike and I said, This is unbelievable. Cogan does it all the big brands do it the iconic, that’s how they get so much out of their website. But the Brick and Mortar stores like the JB Hi-Fi or the restaurants or your fitness brands that don’t know who you are when you walk in? Could we solve that for them? So we decided to build a company called Power Local, which is our focus today. And that business is about identifying people that walk into venues through Wi-Fi. And then helping those brands market back to those individuals as a way of building a database of their foot traffic. And now we have this view of what business should look like for us. And that is we should always have customers before we invest anything. We never raise money for any of our businesses besides the one that we lost the money. And by the way, those investors from the first business, we actually gave them equity in every other business since, as a side of good faith, that’s code for guilt. They had a leap of faith with us, and businesses where we don’t have to sell every time. So we like subscription businesses where you do a sale, the customer will keep paying for the service. And every sales effort or cost to acquire somebody is for a new customer to throw into the bucket. Because our e-commerce company, you had to keep spending with Facebook to get the customer to come in. And we didn’t like the idea that we have to keep spending for the same customers. And the models have worked quite well for us. And so that brings us to today where LeadChat and Power Local still run. And now we spend our time just trying to optimize those businesses and bring people in that can help us run them because we’re terrible managers. We’re not very good at doing the day to day team, they hire us. I mean, they’re like, every day we’re changing the CRM. It’s like I found this new CRM, we have to use that one. They’re like, we just spent the last four months learning that one. I’m like, Yeah, but this is way better. You know, it drives them nuts. But it keeps us fresh, so.
Kym Huynh: I understand that I bring back books to my team all the time, and they started using it as doorstops. Now you’re very heavy on the sales front. What is that one piece of advice that you can give people in terms of growing their own businesses or startups with sales?
Gary Tramer: The one piece of advice, I would say, is to use Google Keyword Planner to determine if there is a need for what you are thinking about offering or a tool called SEMrush.com, which is a paid version of that. To find out if there is a need, there is nobody looking for what you want offering. Maybe it’s not a good place to start. If you’re really ballsy like me and trying to products that aren’t in the market, then I would spend about $100 on some Facebook ads to get out to the audience that you think might be interested and see with anybody even looks or clicks on that ad. That will be my number one piece of advice.
Kym Huynh: Amazing. Thank you. If everyone could join me in thanking Gary?
Serpil Senelmis: It’s impressive to hear how those old school face to face and door to door sales techniques are still important in this digital world and so much passion for data and new CRM system. Thanks, Gary. In just a moment Simon Mathonnet from SplashBox revealed data’s valuable role in digital marketing.
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Serpil Senelmis: Thanks Ad Guy. Simon Mathonnet is head of digital strategy at SplashBox. He earned a master’s degree in digital marketing from universities in Paris in San Francisco. Simon’s worked extensively with startups in the US, Europe, and Australia, assisting them with the deployment of online marketing channels to drive big growth. Simon says it’s important to remember that correlation is not causation. And you need to have clear goals in mind for your data.
Simon Mathonnet: I first encountered the startup ecosystem when I was finishing my master’s degree in digital marketing in San Francisco, but four and five years ago, and really quickly, I got really passionate about what we represented. I got really interested in founders’ passion for their products in the different constraints and the challenges that it created. And despite that, now, I work on all types of clients. We work with a couple of startups here at SplashBox, and it’s still my favorite type of project. There’s no doubt about it. I’m obsessed with digital marketing and data analytics. And I think it presents a huge opportunity for startups to grow. And I’ve seen startups of all types basically leveraging data to design their marketing strategies and really grow from small eCommerce stores to hundreds of thousands of dollars and millions of dollars per month just by analyzing the data that they collect, leveraging that to designing their strategy online and basically designing a growth plan. So what is lean analytics? Well, lean analytics. It’s a methodology to basically leverage certain specific pieces of data to basically impact directly your business results. And it basically all relies on working on certain key data points that you can work on to reach your goal. Well, we call this causation relationship, which is if I reach more people with my product, I will sell more and you want to look for that causation effect. For instance for Buffer. They basically found direct causation between the number of posts in the first week and their retention rate. Basically, what they’ve identified is if a user posts through Buffer more than 15 times a day, they’re more likely to remain inactive user three, free six, nine times later. So what now they can do is they can basically develop strategies to make people post more for their tools, and therefore that will directly impact their retention rate. From a practical perspective, looking at any types of business, how do you actually do it? The first thing you want to do is you pick a KPI, then what you’re going to do is you’re going to draw a line, you’re going to say this is my average revenue per month. Currently, this is my average revenue, and then you’re going to find a potential improvement. So usually, it’s like a very educated guess where you’re going to think, all right. On my websites, on average, if people look at three or more products, I feel like they’re more likely to buy because they’re more engaged, right? So what I’m going to do is I’m going to try to work on that number of pages per user, right? If I’m able to increase that, or if I’m able to increase the number of users who view three pages or more on my website, then maybe that’s going to impact my revenue. You don’t know yet. But it could, right. It’s all about those educated guess, you know, your product. And if you followed Gary’s advice, you know, your customer as well. So you have that hypothesis, which is if I do this, and if I increase that number, then it’s going to increase that number, and it’s going to help me reach my goals. So you either design a test, or you can just make changes that you think are going to improve, and then you’re going to measure the results. By doing this, did we get closer to a regional goal? And if you did, that’s great design another test and try again. etc, etc. And if you didn’t, well, maybe it’s time to design another test and try something else. Or maybe it’s time to look at different elements or another strategy. So you can use a variety of tools at any step of this process to basically collect data. This depends heavily on your business model, I’m not going to give you like a three-step framework on how to run all these tests because no two businesses are the same. For instance, let’s say my goal is to grow my sheer number of customer base, you’re not going to use a Optimizely, which is a split test and a conversion rate optimization website because that affects the conversion rate of people who have already come to your website, for instance, or you’re going to do for instance, is if your hypothesis is alright, I think that my target markets is 25 to 35, making this amount of money per month being in that target market having those interests? Well, I can use Facebook. And I can advertise to that type of demographic. I can create an ad I can push my product.
Simon Mathonnet: Did I get new customers by spending a 50 or 100 dollars on Facebook ads? Yes, or No, that’s a really easy, lean analytics cycle. So just a few of the tools we have here. You need to have Google Analytics on your website like you want to capture all that data. It just gives you so much insights into customer behavior and how people interact with your website and your products. This data is really good when it’s actually aggregated, like when you get like a significant amount of users to your website, especially when you’re starting out at the beginning you’re not going to have a lot of people coming to your website. And that’s one of the pitfalls, having too much data versus having too small data how do you then interpret it? So in that case, instead of using a tool like Google Analytics, which basically gives you all the stats regarding browsing behavior on your website, you would want to use something like Hotjar. What Hotjar does is it’s a heat mapping and session recording software on your website. For instance, it will record a sample of sessions of user browsing your website. So you can actually see your website and you see people moving the mouse around clicking stuff, reading things, which actually gives you insane insights into how someone who’s never been in contact with what you do, actually reacts to the way that you promote your content the way that you have your messaging, etc. And you don’t need a lot of those to actually make some critical assumptions. With Google Analytics. You need a lot of data to actually see patterns, where as with Hotjar, you can see a couple of sessions with people getting confused about a button that you’re not because you navigate on your website every day to make an educated guess that this could improve your conversion rate, for instance. Optimizely, if you want to design split tests on your website, AV tests to basically improve your conversion rate is what you want to use. Segments is maybe a bit more advanced, but it’s basically when you have a lot of different tools, collecting a lot of data. And you want to feed that data through to customer support, or things like that. So maybe, for instance, your goal is to improve retention. So what you’re going to do is you’re going to design a test around customer support. If you improve your customer support and personalize your customer support more then your user are going to stay with you longer. So in that case, you can use segments to actually feed that data through your customer support to be a bit more personalized. I have LeadChat here, what a coincidence, why do I have LeadChat here? If you design a test around customer satisfaction in customer profiling, that kind of live chat on the website is brilliant. Because you get direct input from your customers, you can actually look at like, what types of questions do they ask? Do they ask questions about price? Do they ask questions about features? Can I actually use that and improve my website based on this feedback, like you get really, really good customer insights using the live chat features, which is really cool. And Google Ads is really strong to actually test search behavior with your custom audience. You may think my product answers a problem and people would search for my solution a certain way. I’m gonna take the example of Splashbox. We offer digital marketing services, but it’s not very cheap. It’s more like we designed complete custom strategies. So we’re wondering, someone who’s looking for that more of that high-end product high-end strategy. Would they type in Google SEO Services, digital marketing services, digital marketing agency enterprise? What kind of words would they use? What kind of words would they use to define what we do and search for what we do? In that case, what we can do, target all those keywords on Google ads, put a bunch of Google Ads see who clicks on whats, what kind of keywords brings us the most clicks? What kind of keywords do we get the best click-through rates, what kind of keywords so we get the best traffic from is really good. And then we can use like things like Hotjar, etc. So we can also design tests around that. Like it can be as simple as that don’t overcomplicate it. Two years ago, we had a big retention problem at Splashbox. We had a lot of customers, leaving us and going to over SEO agencies, over SEO agencies, digital marketing agencies was so aggressive in targeting customers really hard for us to keep up and the problem is, we have no sales team. Everything was organic growth. Everything was word of mouth, everything was a referral. And therefore, having a retention problem for us was big. So we looked at or like core group of clients, we looked at clients that we’ve asked for two, three years or more. And we look at what do these clients have in common? And we looked at everything we looked at the profile of the people that we were dealing with, were their expectations really high, their expectations really low. How are they treating us all like we looked at the size of the business, we looked at the different fields. And we looked at all the elements and we try to identify a pattern. And the pattern that we found is actually in results. And we found that our most loyal customers are the customers that had the best results within the first three months. Right? So you want to look at patterns and find things like that. What that means is that we can design a test around that finding around that pattern around that insight to validate it and make our business better. So what we did, the next month, we’re launching about 10 campaigns for 10 clients. And what we did is five of them, we actually reprioritize a lot of the elements of the campaigns to actually have like maximum impact in the first three months. Usually what we try to do is we try to design a strategy that has incremental growth over time, so that basically, it’s more of like an ongoing value that you get each month for what you pay as a retainer. But what we did for those five is we reprioritized it to make sure that the first three months they were getting like six months results, and we put more efforts in and we put more hours. So usually what we do is a client pays us on a monthly basis. we allocate them a number of hours and we worked a number of hours. What we did is we doubled the hours for those five clients in the first three months. And what we noticed is that those fives actually stay the other fives left after 12 months, right. So then validated, we knew that this is how we had to retain clients, we had to focus on those three months that were critical for us. So a few pitfalls and a few things to just consider and be careful when you’re following that kind of methodology. The first thing is you need to define everything and every single metric. Once a user to your website, someone comes and just straight bounce, they consider the user. No, really no business considerations. Sometimes in companies, you would look, for instance, to hire a data scientist because data analytics is really good for you. And then that data scientists will just go on their own. And they would go through all the data that you’ve collected, and they would come back with what I call fun facts. They would say like, hey, I found that, oh, most engaged users, they watch that particular picture on the website five times on average, and yeah, what do I do with that? That’s great, but it’s really really not actionable, right? That’s that doesn’t have that business consideration. So if, for instance, you have a co-founder or you have an employee, that’s a data scientist, I strongly, strongly encourage to basically integrate that rule as much as possible, even though most of the time they operate as a silo, really, really make them understand business considerations, get their buy-in with the product that they’re buy-in with the business, just going to make their output way better. Too much, or too little data, be careful. It’s very easy to get lost in all the different data points, especially with all the software now, that just gives you a whole bunch of data like even Google Analytics, the amount of data you get through it is massive. Really think about your career objective. Really think about that. And really think about the meaningfulness of the metrics that you’re looking at. Not going for maximum impact. You have limited time to hit your goal. You really want to hit your goal. If you identify that button in your website is critical to your user conversion, just really design a test that’s going to be maximum impact. Don’t slightly change the color like one gradient is something like don’t change it from blue to light blue, right? changing from blue to red, go from maximum impact with your tests, with your results with everything, just make everything count is my last advice. Those are all key concepts that we use in designing digital strategies for upcoming businesses. And I hope that some of them you can actually use go ahead and apply and action. And thanks a lot for coming here today.
Serpil Senelmis: Well, sounds like the learning never ends when it comes to collecting and analyzing data. And I love that example from Splashbox collecting data from individual clients, rather than masses of details and numbers. Thanks, Simon, and thank you Gary as well. Next time on Masters Series business tales from the edge. We’ve heard some great stories of the highs and lows of starting a business over the past few episodes. And next time we’ll double down on those tales from the age. Until then, I’m Serpil Senelmis from Written and Recorded. And for WeTeachMe, this is the Masters Series.
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