- It's not just raising prices,
but how do we introduce things like limited
edition specials?
How, how can we introduce things that feel more valuable
and are more valuable so that we can charge a a premium?
All right, Nick Flint, the buzz for right now
and likely the foreseeable future is
what do we do about the tariff madness
that's impacting our industry?
And so wanted to have you on here
so we could talk briefly about what are some ways
that we can mitigate risk, that we can protect profits
so we can cut costs so that we can still find opportunity
for growth and opportunity
to thrive even in this climate.
And so let's dive in. But first of all, how's it going?
By the way,
- I'm doing pretty good over here.
Really starting to dial in with some of our clients
and the strategies that they have with these new changes
and what they might see in their price structure,
differences in the future.
- Great. Well, email's gonna play a big part of this.
So Nick is our, our director of email.
And I think now is the time we lean into the tried
and true, right?
Doing more for our customers, leaning into them more.
Email is one of the, the most guaranteed returns
and the lowest cost to execute on.
So now is the time for emails.
We'll lean into some tips there,
but ultimately what we're looking for right now
and whatever brand wants is how do I protect profits?
How do I continue to grow? How do I protect profits?
And I think ultimately the first thing, Nick,
that we gotta look at is how can you increase prices and
or increase profit per order
without tanking conversion rates, right?
Without killing conversions.
'cause not just as simple as raising
rates through the roof, right?
Raising prices through the roof
because then people will stop buying.
And so let's talk
through some suggestions here on, on what we can do.
So, so raising prices.
One thing to keep in mind, Nick,
and you know, we've been talking to a lot
of our, our bigger clients.
I've had 10 to 15 calls recently.
We've been texting, messaging, you know, talking
to clients frequently.
And so one thing I'm hearing a lot from bigger brands is,
Nick, they're just gonna raise prices.
They're just gonna raise them, have not heard fully,
you know, what, what percentage kinda lift that's gonna be
that that's gonna be brand by brand,
it's gonna be depending on the category, depending on
how much room the brand thinks, they have
to still remain competitive.
Depends on the strength of the brand as well.
But also a lot of people are just gonna raise prices, right?
And so I think you gotta look at that
and whether that's a 5%, 10%, maybe a 20% increase,
it's gotta be on the table
and you gotta be talking about it.
One of the other things that we're looking at is
how do we maybe bundle things
and come with creative offers so that we can raise the a OV
and and like the raise the profit per order.
So what, what are your thoughts on both of those items?
What are you hearing? What are you seeing?
- What's, what's funny is a lot of the stuff
that we're looking at, you should be doing this year round,
but it's really top of mind right now. Like
- Yeah, - What does it come down to?
Charging the right amount and then cutting your costs across
the business when possible
and trying to run a lean operation so you stay profitable.
And it really comes to the forefront where you're starting
to look at every dollar, every statement,
every transaction coming through.
Yep. So some of the easiest low hanging fruit
that they can be doing right now to help raise
that average order value, not give away too much margin.
'cause if you can not discount your products
and extra 10%, that kind of combats
that 10% extra that you're paying Yes.
Over on your, your cost of goods coming across the seeds.
So off the bat,
one thing we've been shifting is the initial,
just the popup offers on the site
and the intro, instead of going with like a standard,
you know, 10, 20% off your first order,
we're putting a minimum threshold in there now.
So, you know, $10 off any order
of $50 plus if they're gonna spend 70, 80, 90 bucks,
that $10 is gonna stay the same
and not gonna be that fixed percentage versus 20% off
of your $90 order.
It's eight bucks that the brand saves.
- Yeah, I love that. So, you know, one, one of the,
the best tools we have to grow our email list
and grow our email marketing is the,
is the popup in the offer.
But nows may be a time to, to be less
liberal with your, your discount.
So make that a flat dollar amount
so it doesn't scale to infinity.
Also, maybe just raising the
threshold for when that kicks in.
So yeah, we're, we're going to limit that, right?
I think the other thing to think about is, is, you know,
how do we bundle products to, to,
and create some interesting pricing there where we're,
we're still getting more profit per transaction even while
maybe our, our cost structure, our cogs have gone up.
So I think that's an interesting one to look at.
And it's something you've talked about Nick,
and we, we've seen this with brands like Nike
and others, is it's not just raising prices,
but how do we introduce things like limited
edition specials?
How, how can we introduce things that feel more valuable
and are more valuable so that we can charge a,
a premium? So what, what are your thoughts on that
- For these limited edition items?
It works for whatever level you're at.
That, that's one kind of really unique
thing about this strategy.
If you're selling a $10 cup,
launching a limited edition collab with someone,
or even like a new colorway, you're just doing 200 of,
you can now sell that for 15 instead of 10.
Same thing on like the sneakers.
Just like you talk about, you know, instead
of $150 via sneakers, you're now going for 180
'cause it's a limited edition release.
So if you can find some kind of way to implement scarcity
with a new product, launch a new variant,
we have a coffee brand doing this,
they're leaning into more select roasts from
around the world and they're really putting the emphasis on
the Costa Rican farmers who are making these beans.
And that's why it's slightly more per bag,
but the quality's there and people appreciate it.
And you also see people start to splurge on some stuff like
that, you know, when they're starting
to look at their own bank accounts a little bit tighter,
you know, I'm not gonna go buy a new car right now,
but you know what, I'll spend 15 for bank coffee.
Might not my coffee. Yeah, totally. It's every morning then.
Really good.
- Yeah, it's a really good thought that,
that even when the consumer is, is pinched a little bit,
even when the consumer confidence is low, it's not
that they stop buying, right?
We still, we all, we love to buy things.
It's our favorite recreation, you know,
retail therapy is a real thing, will always be a real thing.
But yeah, how can you lean into something where, hey, okay,
may, maybe I'm trading down in other categories,
but I'm trading up in your category and
and that's what you want to try to, to create there.
So yeah, I I really wanna underscore, you know,
this is not a time to cut growth costs, I believe, right?
And, and this is, we were talking about this in our morning,
Monday morning meeting today, Nick, where you know, David,
David Ogilvy, legendary ad guy, the the guy
behind Dove stoke and man in a halfway shirt
and Rolls Royce and a number of others.
He talked about, man, I I view advertising
as an essential part of every product,
just like I would an essential,
an essential ingredient or central component.
And just when times get tough, I'm not gonna cut,
I'm not gonna cut the tires outta my Rolls Royce, you know,
because times are tough.
I I've gotta, I've gotta invest in that.
And same is true for marketing.
We don't wanna pull back on marketing
otherwise we'll lose market share
otherwise we'll, we'll create a death spiral potentially.
And so lean into marketing,
maybe you wanna lean into it in a more efficient manner.
Maybe you raise your mirror, things like that, but don't
but your advertising and growth budgets.
But on the topic of cost cutting, Nick,
I think this is a real thing, right?
We've gotta look at how can we get lean?
How can we be lean and mean right now?
So what are some suggestions there?
What have, what have you heard from others?
What tips do you have?
- Especially on the SMS side of things,
we're getting really tight with
who we're sending to right now.
You might have a 20,000 per SM person SMS list with,
you know, 10 k those being engaged
and the other 10 k is like,
you're hopeful they'll purchase one day,
they've been hanging around forever
and you will send them those texts
for the big launches or product drops.
But now we want to tighten up that window
so those SMS sends are to your more guaranteed segment,
keep the revenue coming in from them
and then as things start to normalize,
then breach back out into that broader audience
that you were looking at before, kind of
that hopeful window you're spending some extra money on.
- Yeah, I love it. And you know, one
of the other things we're, we're leaning into, you know,
we do a lot with obviously Amazon ads and Google ads
and YouTube and things like that is, you know, there,
there are times when, when things are smooth
and easy where, where maybe you kind of
ignore some wasted ad spend, right?
Where maybe there's some keywords that are not gonna
performing with an Amazon ads with Google ads,
but when times are good, you kinda let that slide.
We audit, you know, dozens of accounts every month
and we regularly see, you know, wasted ad spend in the 10
to 15 to $20,000 a month range, meaning you could cut
that ad spend and sales would not dip.
Now's the time to be looking at stuff like that.
So don't cut your overall ad budget, but man, cut the waste.
And so I think that's something you wanna lean
into and look at right now.
You know, one of the basic things we do all, all the time
as an agency, Nick, is we at least quarterly and,
and now I'd say you probably do this monthly,
look at all your recurring expenses.
What, what are, what are we paying for?
What tools, what softwares, what are we paying
for that we're not using?
And we see this a lot where maybe you're like, oh wait,
we're paying for three multi-touch attribution tools, right?
We're paying for these two tools
and those reporting, we don't,
we don't need all that, right?
And so what can we cut to get lean and mean?
Because really I think right now we're kind of fighting
and scrapping for every point, every point
of profit that we can get.
And so looking to cut expenses, cut software costs, cut,
cut opex, things like that.
What are the tips or insights you have
on, on cost cutting? Nick,
- It is funny for that.
That's one thing I don't recommend automating it is going
over your p and l.
Yeah. Like, yeah, QuickBooks could automate for you
and shove into the different categories,
but even for my own personal finances on Sundays, I sit down
and I go look at every line item.
And if I have a, a late fee for my gym,
'cause I missed a class, I punch myself in the arm for
that $15 feed. I they hit you with
- Your wife's like Nick pushups right now.
- They, they get you with those cancellations.
But looking at like cost cutting as a whole, get aligned
with your inventory forecasting,
sit on the extra inventory might have been a nice safe play
and good to have in the future.
And what if sales just spike up outta nowhere?
Then I have the inventory for it.
But really start to figure out how much you are selling
through on a 30, 60 day basis.
How much you need to be ordering
so you're not running out of product.
And then start saving some costs.
'cause you don't have a bunch of debt inventory sitting
there in some kind of three pl
- Love it man.
And this is also the time of you looking at your three pl.
How can we cut costs there? How can we renegotiate?
How can we lower shipping costs?
Obviously talking to your factory, to your, your factory,
to the manufacturers you work with.
How can we extend terms,
how can we maybe share in some of the price increases?
So get creative there and,
and really just look for any way
that you can save and partner.
Really nothing should be off the table
because every point of margin matters at this point.
And, and you know, another, another thing we recommend on
the, on the Amazon side, we got a couple services we
recommend where they will go
and help you recover fees from Amazon
because there's probably some fees you've been charged
that you can get a refund on for a variety of reasons.
But often that amounts to 1000, 5,000, $10,000 a month type
of thing in, in recouped fees.
So now is the time to look at everything like that as well.
Try to save as much as you can without
reducing product quality
and without taking your foot off the gas pedal
because you want to still be gaining market share
and growing through this time.
Now another thing we, we talked about Nick, as you know,
hey, now's the time to lean into email marketing.
So what are some creative things we can do
to make our email marketing better that's going
to lift sales, lift profits. What can we do right now?
- I really like leaning into the brand's tone
and the brand's voice.
And just remember that you're talking
to other people on the other side of this transaction email
or SMSI can see a lot of brands kind
of just sending out this one way informational bit.
One account I was auditing earlier today, a text,
it was just super scientific, followed
by read the blog post here.
I'm like, do you think your customers really want
to get this text and will it make them feel special
like that the blog post?
Like, come on, figure out a new way to phrase that
and relate to your customers and work on your tone.
You know, general population probably a little bit stressed
out now as well.
So connect
with them on a personal level that'll make them feel more
connected to your brand.
And a great way to do this is just, you know,
asking questions and having a real conversation with them.
Especially if it's your top a hundred, 300, 500 customers.
I always recommend sending out a question type email
campaign to get those replies to help with deliverability
and to boost your results in the future.
But for now, if you don't have like the customer service
backend to deal with a thousand replies, start
with your top a hundred, 300 customers
and figure out what question you wanna ask them
and actually relate to them and have that back
and forth conversation.
And it's more likely could get you some referrals in the
future when they send people your
- Way's.
Really great. And you know, one
of the other things I'll mention an idea that we actually,
we did this a couple years ago for another client
where they were about to raise their prices.
They had not raised prices in quite some time
and so they emailed their entire list.
I think they started with our VIPs
and then they emailed everybody, but they said, Hey,
you know, we're raising our prices on this date, here's why.
And I, and I think it's another way
where email gives you the, the freedom to do this.
You just explain this to your customers that hey, our cost
of goods are going up 50% right now,
so we're not raising our prices 50%,
we're raising our prices 10% or whatever the case may be.
But here's why we have to do a price increase.
We just, we have to, right?
But here's what we wanna do for you
because you're a valued customer locking in the existing
price through this date.
And what's interesting about that is it,
it's basically a sale.
It's not a sale. 'cause you're not discounting,
you're just saying we're about to raise our prices,
but you can order right now.
Now obviously there are a few things you gotta
keep in mind there.
If you're low on inventory, you can't do it if, if you're,
you know, inventory forecasting is not
precise right now you can't do it.
But if all those things are good
and you wanna raise a little bit of cash right now to kind
of help weather the storm, it's a great way
to do a quote unquote sale without doing a discount.
- Especially if you have a subscription based business.
Hey, you know, subscribe now to get 10% off
for every order moving forward.
Yes. And that'll give 'em reason to not cancel in the future
because we'll see those new price increases.
Oh, if I cancel then I gotta come back into this new higher
- Rate.
Yeah. And maybe, maybe make
that offer just for subscriptions only.
We're like, hey, we're about to raise prices,
but not only are we not raising prices on our existing
subscriptions, we're on this current discount.
So get locked in now so
that you don't have to worry about it later.
And, and yeah, that creates predictable, consistent revenue,
which is worth it in the long run.
So Nick Flint, any, any final thoughts?
How do we protect profits, cut costs?
How do we find ways to win right now?
- Yeah, closing out in less than a minute here,
focus on what's working for your business right now.
Probably don't use this time to test out a ton of new things
that are gonna cost you a lot of money.
So focus on what's working for you.
Communicate with your customers openly
and like a human, actually connect with them.
Look at all of your costs.
And then lastly, consult
an actual tariff lawyer.
You know, yes, before you do something silly, like try to
backend this secret deal with your manufacturer
where they put it as half the cost when it comes overseas
and you're gonna get audited
and probably sent to prison, dodge all that by talking
to an actual professional.
'cause it's hard
to sell products when you're in a jail cell.
- Yeah, yeah. That, that cut in profits,
reduce profits much easier to tolerate than prison foods.
So I I like that. That's really, really sound advice, Nick.
I appreciate that. And,
and just final thought as we wrap up here is that
even in the midst of tariff craziness and,
and the way this all will, will shake out
and likely change a million times here in the,
in the coming months, there's always, always,
always a path forward.
There's always a way to win, there's always a way to grow,
there's always a way to gain new customers.
And so that's why we wanna bring you solutions.
And so with that, we'll wish you good luck.
Thank you Nick, for joining us and until next time,
- See you then.