In this episode Callum McKeefery, host and CEO of REVIEWS.io is in conversation with Christian Hoppe, the founder of You Tube agency Forwrd and former Head of Online at Waterdrop , discussing the leading topics in e-commerce right now.
They talk about the best ways to tackle the rising costs of acquisition, the challenges of attribution and importance of focussing on retention, alternative ways to engage with your customer and plans for the future.
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‘In reviews we trust’ podcast
Ep.1 - Callum McKeefery in conversation with Christian Hoppe
Callum: You're listening to the very first podcast of in reviews we trust. Today, I have a very special guest Christian Hoppe. Christian is the former head of online for Waterdrop and the co-founder of Forwrd Agency. Christian talks about all things, metrics, and he's super knowledgeable about how to grow your online business.
Let's jump right in. Thank you, Christian, for coming on today. Could you tell us how you got involved in online marketing, Christian?
Christian: Good question. I actually never knew what I wanted to do. And after school, I just knew I didn't want to get a job, so I just started freelancing without any clients and without any experience, which was both stupid and brilliant because you get a lot of experience pretty quickly. And then just worked a lot in agencies. Never studied anything and never finished any degree, but just learnt by doing.
Callum: I think that's how a lot of people find their way into online marketing. I think if you looked at the industry, and looked at how many people dropped out of university and college to go into online marketing. I think that's a common path. In my LinkedIn connections, you're probably the number one voice on e-commerce metrics. I would say. What's the number one metric and that you think e-commerce brands should be monitoring and why, and what's the one metric that they shouldn't be really focusing on too much?
Christian: That's a very good question. I mean, to put it down to one metric is like really, really tough. I mean, it really depends on the business, but nowadays I think very few brands can really survive from the first purchase and not focus on retention. Like drop shipping of course still works in some areas, but I don't really believe in the concept.
So when it really comes to retention, it's like also acquisition costs have been going up. We know what happened last year with Facebook, with iOS updates, it's not going to get better, let's be honest. And so it's really all about, really delivering quality product experience. And we'll be on top of that and really focus on retention because in the end, I heard one quote is really good. It's like "If acquisition is the battle, and retention is the war and you might lose the battle, but you have to win the war." And of course, then a couple of metrics that you need to look into, but that's definitely the focus to going forward from now on.
Callum: So customer lifetime value then?
Christian: Yeah, of course. That's a big word. And I guess if you ask a five marketers, what they think is customer lifetime value, you will get at least five different answers.
Callum: Yeah, for reviews REVIEWS.io I've tried to work at our customer lifetime value for years. And it's not easy.
Christian: Because customer lifetime value is very, maybe hard to grasp, right. But from talking to investors, it's actually one interesting thought maybe to map out is revenue cohorts. So that means, if customers spent like a hundred euros in the first month, how much will they spend in the following months? And the interesting thought on this is that, over time you might lose customers, so you might have customers that purchase less and less often, but those who stick with you, you want them to purchase more often and higher AOVs. So in the end, you have this chart that goes up again. And the thought of investors is also if you, acquire the whole market, basically your total addressable market size at some point, you'll be out of customers that you can acquire hypothetically. But if you have a customer base that still makes the same revenue or more, because you introduce new categories they use it more often and so on then you still have a growing business, but on the other hand, if you don't. If you lose more customers, then customers spend more then at some point your revenue will go down once you've acquired the whole market. So I think that's also a very good metric to look at. How stable is your business?How much do you depend on acquisition?
Callum: Do you use any software to monitor your cohorts?
Christian: Yeah, definitely a lot of different softwares and plugins available like applications for Shopify, especially in the Shopify universe. I think for WooCommerce and the other stores there's less, but Shopify has plenty of options.
Callum: Talking about e-commerce platforms themselves, obviously Forwrd works with a lot of other direct consumer and e-commerce brands. What would you say the split is across different platforms or is it all Shopify?
Christian: For me personally, it's almost all Shopify, to be honest. Yeah.
Callum: Yeah. And what's the split Shopify plus first is standard Shopify?
Christian: That's a good question. I guess it's really once a brand hits like 5, 10 million a year then there are Shopify plus, yeah.
Callum: That's kind of that breakeven thing. What I have seen recently is people on Twitter talking about, I forgot it. Talking about, they were like a 20 million brand and they just dropped Shopify plus and went down to Shopify standard. They couldn't see the value in it.
Christian: Interesting, I guess they're not leveraging all the features.
Callum: Yeah. They're not leveraging enough. So you've worked with some amazing direct to consumer brands. I mean, I love the work that you did with Waterdrop. I thought that was amazing, amazing brand building and it is an amazing brand now.
And I know you create different social strategies for each of the brands that you work with. What's the starting process look like for you when you're working with a direct to consumer brand?
Christian: Yeah. I mean, one part is definitely numbers first because I think that many businesses have difficulties understanding and navigating the numbers.
It's very hard to do a forecast maybe if you just come into that, but if you do a deep dive, it's actually easy to predict or project forecast numbers, what they mean. I found that still, of course, DTC companies that start out, they don't really understand the interplay between acquisition and retention and what it really means how important unit economics are. That it's very hard. If you have a low margin to operate nowadays. It's really a key driver and how you can actually project also how much your existing customer base will grow and how the revenue will look like.
So I think that's very important to map out, to understand. Then also going into acquisition channels to understand what is the truth? I mean, of course there's never truth behind it, right - but to try to get to attribution because also many brands say, oh, we've always done Facebook, Facebook is for sure our main revenue driver, because we believe the numbers that they see in Facebook business manager and most often that's not true. So really just, start with that. And then of course, when it comes to communication, really develop a brand communication strategy and really focused to leverage the brands.
And that's also one of the points that you can still do as a DTC company and should do, you're not selling commodities. And if the price point is everything that you care about. You're going to have a very hard time.
Callum: The brands you work with, you're definitely all about brand building.
What do you see as the most? Obviously you've got Facebook. You've got, what's happened with Apple, there's all the rumours about Google bringing in new rules on tracking, maybe Android. It's going to go down the same route as what Apple's done. Where do you see value at the minute? Because obviously ads are getting way more expensive. Where do you see that? Where's the next thing that DTC brands should be looking at to get traffic at a lower cost, but still good quality?
Christian: Yeah, it's a very good question. I mean, everyone is looking for the next hack for the next channel -mainly focused on Tik Tok at the moment. Which is definitely an interesting channel. I mean, obviously we've just founded the YouTube agency, so we highly believe in the channel in that it has a lot of potential also to work on direct response because you have a whole different creative game. You have 95% of the ads are audible and it's actually many brands don't use it yet. Don't leverage it yet. You have totally different targeting options based on all the search data that is available on Google and YouTube, which is the first and second biggest search engine. So we had to believe in that, but apart from, just getting traffic as mentioned, I think it's really, really important to work on product quality And the whole experience and yeah, just the brand itself to not only focus on price or differentiations. If you're only differentiating yourself with price, then Amazon is going to win.
Callum: Isn't that the truth. Talking about YouTube. Obviously your focus is YouTube at the moment. What's a campaign that you've recently seen on you on YouTube that you've really liked that's not one of your own that you think, that's a great campaign?
I know I have a couple that are, that are really good, but I'd love to hear your input on what you think is a really good campaign at the moment on YouTube.
Christian: I recently saw an ad from Heineken. I think it was when they brought two people together that are completely different in terms of their political views and stuff. And then they kind of find, overcome their differences. That was really cool.
Callum: Right. That's cool. I'm still in awe of monday.com on how they've literally owned, YouTube
Christian: It could just be that they’re targeting you, they are very good at targeting so not everybody might see,
Callum: No, no, I agree. I agree. But I think their targeting is really wide. I think they target everybody who's developing anything. And I don't think it's a great ad. I think the brand building itself is amazing and I think it'll happen more and more.
I think they got in early enough to get a big enough footprint at a lower margin. And I think now they're probably getting killed on their ad costs on YouTube. I think it's the most, one of the most popular ads on there in the SaaS industry for the last year.
I know you've run a couple of brands, as a fractional CMO, whilst that first metric that you look at in the morning, what's that one that you go to to kind of see whether everything has fell apart or everything is running well for the brand.
Christian: Well, if it's just like a daily catch-up then it's the Shopify dashboard. Yeah. But, but, but obviously, it does not always make sense to have a, have a look at metrics every day especially in acquisition and ad spend and stuff like this. You have a time delay and look-back windows.So often it's better to look at longer timeframes.
Callum: You obviously purchase a lot of shopify apps, but also SaaS solutions for your clients. What's one solution you have to, you advise all of your clients to get no matter what they're doing?
Christian: I have to say that REVIEWS is definitely one of the first things to install, because if you get started, you don't need a super sophisticated CRM strategy and everything yet, because , you will not have a super uplift in the beginning. It can be very, very basic, but reviews is really something that you can't live without.
I mean, apart from that, Yeah, very tough. I mean, from the, from the get-go, it's definitely a post-purchase service. So to really understand I always call it the, the most significant touch. It's very honest. So we've played around a lot at wardrobe. We've measured TV with post-purchase survey coming also to TV tracking, which has, , when you have this Delta eight minutes before, after a spot, setting cookies, and then see how many of them convert and post-purchase surveys is like, 5 - 10% difference maximum. When we entered new markets, we saw that those channels that we did was the only channel in that markets was like 85% of the answers. Once we switched on another channel, it's, it's changed also in the answers of post-purchase survey. So we really ask on the order, thank you, page. How did you hear about us? And then we take those answers and that's really super significant.
Callum: Yeah, I think the post-purchase survey is your true north on attribution. So what we do here is we look at posts, survey attribution, and then match it against what Google was telling us. And Facebook's telling us and Tik Tok and so forth, and, really try and work out, which one is actually telling us the truth.
I think they all will overestimate. We're definitely seeing that a lot more. So who do, which, which app do you use? For post-purchase? Is it Know?
Christian: I've tried all of them that are available, to be honest, I would not like I recommend apps if I'm really, really happy and satisfied with them without hurting anyone's feeling out of potential for a better one on the market.
Callum: Yeah. Yeah, definitely. what about customer loyalty apps? Do you use those within your programs or do you stay away from crossing the line?
Christian: So customer loyalty. That's a very interesting topic because there is a few things. First of all, some I heard some brands see customer loyalty as referral aprogram, and that. Yeah, it can be true, but it's something that I found across the board that, you don't speak to a friend and say, Hey, by the way, I have a discount code or something to offer. And that's why I recommend that you purchase from here, which just happens in a natural conversation to see the product or use super satisfied and excited about something.
And you just shared with your friends. So you cannot really grow like referral with more referral campaigns. Very, very hard. And apart from that, sometimes I see brands just roll out loyalty programs because they want to have it without really thinking about a strategy about how to brand it and implement it in the whole brand strategy. So it's a really tricky part. And I don't think that there's, at the moment, a program or an app, that's really fulfilled stats to be honest, there's a huge gap. I know that you're working on something.
Callum: REVIEWS.io is working on loyalty at the moment. And I know a couple of other brands are working on loyalty solutions and I've been really excited by what I've seen from these other brands. Because I think hopefully, these new incoming brands will push the market forward. I think we're all looking at it in different ways. I think the way REVIEWS.io looks at loyalty is very different to how the other brands are looking at loyalty.
To finish off today, what's on the horizon. Is there anything that you're seeing that listeners not necessarily be acting on straight away, but keep in the back of their mind over the next 12 months? What do you think the changes in the market are going to be? Do you think the big thing is - getting first party data like attribution data, or do you think there's other breakthroughs coming or other changes coming that really they should be getting involved in now.
Christian: It's not getting easier and acquisition. And we've talked a lot about, focusing on retention and so on, I think one more thing that is a bit under the radar, but some brands are focusing on it is communities both online and offline, but that's definitely something that's not seen. Baron has a huge base that also builds into brand and loyalty and in the end retention, it helps with acquisition I've seen Facebook groups with 50,000 super active and loyal customers, and if a new customer comes in and sees all this hype, it definitely helps.
But there is no Discord is very gamey, NFT crypto based, and Facebook is not the platform for many brands anymore for the target audience. So there's also a bit of a question: where can these communities happen?
Callum: Do you know any brands that you recommend our listeners go and look at who's got a really good Community program in place?
Christian: I mean, if you go on Discord, you can definitely find brands around that gaming sector, for example, like energy drinks or stuff like this, that, that fits that, that segment that have very interesting concepts on Discord. Even if you're not on Discord yet, I would definitely check it out just to be on top of it. And the other really community is like Facebook groups. I mean at Waterdrop we had 50,000 plus members. And if you go to these groups, it's crazy.
Christian: Some people went to Ikea and bought a new furniture because they couldn't fit all the bottles anymore that they purchased.
And if you reach that level of loyalty then and hype this is very good for the brands.
Callum: That’s Huge, I mean, obviously. E-commerce Shopify groups on Facebook are very big. Probably one of the communities I'm part of is partner league. If you're an
Callum: app developer in the Shopify ecosystem,
Callum: It's a closed group. You have to pay to be part of it. I think I got a lot of value from it and a lot of good learnings. I agree with your community over the next 12 months is going to be a big thing. And I think there's a lot of talk about it. It's similar to how the review space was probably 10 years ago when people just started to start talking about, okay, we need reviews, we need reviews.
Everyone's we need community. We need community. And I think me and you are probably in the same boat. We both have used the Facebook and Twitter community quite well. I would've said but I, I think you have got to own it to an extent and get it into your, you've got to kind of own the platform whether that's by you owning that group or being the administrator of that group, but then you're also on the Facebook platform. So Facebook can change the rules on that group.
Christian: I've seen this digital brand in the US I think it's called Beard Brands. They have this Beard Brand Alliance, and it's interesting. They have installed their own forum, kind of implemented it on their website. You have to pay either I think, around a hundred dollars or so, if you haven't made two purchases or are from a country where they don't ship to you and they talk all about what it is like to be a man in that certain age and, all this kind of difficulties and things that you go through, which is very interesting
Callum: That’s where I think it's going, that you own that. Exactly. Yeah,
Christian: Exactly. It's not a good interface though.
Callum: It's not a good, I'm going to look at it and I will pull out a link in the show notes and I will put a few links in about everything me and Christian spoke about today.
Christian, what's next for you over the next 12 months? What's the, any big projects that you're working on and you can tell us about coming up.
Christian: Definitely. I mean I'm going to focus on scaling YouTube for as many brands as possible, both DTC as well as B2B.
And I'm very excited to, to see what the, this year will bring.
Callum: Brilliant. Thank you so much, Christian, for being part of the podcast today. As I say, we will put all the links in the notes below. Christian is very, very active on Twitter and LinkedIn, and I urge you to give him a follow on both.
Thank you, Christian for being a guest today. I really appreciate it.
Christian: Thank you Callum