Although cart abandonment is an everyday occurrence for e-commerce sellers, the reasoning behind why they’re being abandoned are always changing. Jordan Gal of Carthook.com understands that this is an area e-commerce sellers need to explore to better understand what customers need to complete orders on your website. Check out the advice Jordan Gal provides to minimize your cart abandonment rate!
In the Eighth episode of Skubana’s E-Commerce Mastery Series where we invite experts of their respected fields to share their best practices for success, our host, Dr. Jeremy Weisz of InspiredInsider.com interviews Jordan Gal founder of CartHook.com.
Some essential lessons include:
The top recommended software to help prevent cart abandonment and retain customers
When are carts most abandoned and how to counter that
The importance of cart e-mail reminders and the offers you can provide with those e-mails to reduce cart abandonment
How to optimize your checkout pages efficiently to ensure the customers process their orders
Methods of tracking the customers’ journey through your site and how to use that information to increase your conversion rate
How to use phone interactions with customers to further adapt your product to boost order volume
Raw Transcript: Jordan Gal of CartHook.com
Jeremy: Dr. Jeremy Weisz here. I am founder of inspiredinsider.com where I talk with inspirational entrepreneurs and leaders like the founders of P90X, Baby Einstein, Atari, many more and how they overcome big challenges in life and business, and this is part of the Skubana e-commerce mastery series where top sellers and experts teach you what really works to boost your e-commerce business. Skubana is a software platform to manage your entire e-commerce operation. I am especially excited to have Jordan Gal. He’s founder of CartHook. Their software…pump the fist. Their software covers lost revenue by contacting people who don’t finish the checkout process. Genius idea. We’ll talk about how he improved on it and he previously ran a successful e-commerce business that was acquired. Jordan, thank you for joining me.Jordan: My pleasure. Jeremy, thanks very much for having me on.Jeremy: I’m excited and there’s so many questions. I want to start off with Jim Cartmill. He’s front and center on your page, and anything that says, “I recovered $44,639,” gets my attention, probably gets the user’s attention. So tell me what Jim did?Jordan: They’re up to $80,000 now which is a good thing. Sure, what Jim did is…it’s actually all connected back to my days running an e-commerce business. That’s kind of where the idea came from. That’s where everything came from, and funny enough, that’s actually where Jim as a customer came from.Jeremy: Really?Jordan: One of the most important things we did in our e-commerce business was find a great Volusion developer. Volusion is a platform. It’s pretty good but it has a lot of limitations. But we found an amazing developer that really knew the system and was able to do things that even Volusion told us were impossible, that helped us to optimize the store. That same developer worked with Jim at Let’s Talk Health, their site. So when I launched CartHook, obviously reached out to my network first and Cameron, our Volusion developer, said, “Hey, I’ll get my client, my current employer, on the system.” And now Cameron has moved onto other things, but Jim and I now have a relationship.So even that all goes back. So what Cameron and Jim did was to have a Volusion store, and they do pretty well, and they have cart abandonment like everyone else. And they signed up for CartHook, and our software has helped them recover now upwards of $80,000 from people who start the checkout process, type in their email address but don’t complete the purchase, and that’s what CartHook does. It grabs their email address, it triggers a multi-part email campaign designed to get them to come back.Jeremy: And I want get into how you came up with the idea seeing some of the pain because you use this in your e-commerce business, but I want to talk about first, Jordan, about most common reasons people abandon. What are some of the reasons because you are very good? I know, you have live chat and you’ve tracked the actual pathway of customers. Can you talk a little about what you’ve seen customers do when you are watching them go through your site?Jordan: Yeah, it’s a tricky thing. So there’s two different types of cart abandonment, at least in my head I separate the two. There’s the type of cart abandonment that people…Someone puts an item in the shopping cart and then doesn’t move onto the checkout page. That’s one version. And there’s another version that’s slightly different where someone puts an item into the cart, goes to the checkout page, and begins to fill out the checkout form, and then abandons. So obviously much more common. When everyone says 70% of carts are abandoned, they’re talking about that first type.Someone puts something in the cart and doesn’t buy. So at CartHook we focus more on the people that go to the checkout page because we need to them to fill out their email address at least, so we can pick it up. But as an e-commerce merchant where you can have a bigger impact is in optimizing the checkout flow so that more people that get to the cart page actually get to the checkout page.Jeremy: so there’s two things there. One is optimizing the page which could affect both of those, but primarily, if someone is not typing in their email and they’re not making the next step, then it’s hard to get them back. So what would you say to people, how do they optimize for that step? What are musts on the checkout page?Jordan: Yeah. So let’s talk about the optimization part for a second, and then we’ll talk about why people actually abandon, right? Because they’re correlated, it’s like two sides of the same coin. So, I think you can separate down to a few different categories. The first one is focus. So when someone goes to the product page, you obviously want them to get whatever information they need in order to make a buying decision. Then once someone gets to the shopping cart page, you don’t want any decisions.You just want them to move forward to the checkout page. So that’s why the focus of the shopping cart page is really important. You do away with the navigation. You do away with unnecessary distractions. Right? That’s not the time to up sell someone. That’s the time to just get them…you essentially want that cart page to have the lowest amount of time spent on it possible. You just go there, the most obvious thing on the page is the proceed to check out button or buttons, I use two buttons, one at top and one at bottom and then trust symbols. Right?You don’t want the coupon field present. You ideally want it as text that you have to click on before the field appears. You want that little x that says, “Remove from my cart.” You want that like a gray. You want all distractions aside, and you want the focus entirely on proceed to check out. So that’s, I think the general concept behind that page. Trust and focus.
Jeremy: So what mistakes do you commonly see? What are the most common mistakes people make on that page that they include too much or don’t include? What do they do?
Jordan: I think, the biggest mistake people make that I see these days is they’re thinking about it from their own point of view. They’re saying, “I run this site and this site needs a shopping cart page. So I’m just going to make sure it’s there and maybe change my button color,” but they don’t look at it from the user’s point of view. From your visitors’ point of view, why do they need to see the left side navigation? They don’t. Why do they need…I see too much going on on the page, and I see people not addressing the fact that you want someone to very, very obviously know what they should be doing on that page.
I wrote a blog post recently called The 10 Foot Test, right? That’s something I learned while running the store. You basically want to walk 10 feet back and look back at your screen while looking at basically any page. But most importantly, the shopping cart page. If you can’t tell from 10 feet away exactly where you should be clicking, then it’s not obvious enough. So it’s good to look at it that way. I see way too much stuff going on and Twitter feed on there. Just so much going on when really from the visitor’s point of view, you just want to give them what they need on that page, which is moving onto the checkout page.
Jeremy: So to the next element which is, okay, now they’ve gone to that page. They start filling out their information. Why do they leave at that point?
Jordan: So, this is like…it’s a murky topic, so there are generally believed reasons for people to abandon. The top one that people say is unexpected shipping costs.
Jeremy: I thought you were going to say, unexpected kids yelling. That’s what I thought you were going to…
Jordan: Well, distraction. It’s really hard to measure distraction. So that’s why it’s murky. People look for coupons. Some people even abandon. I saw on Good Morning America recently, here’s a tip to get a coupon online. Go and fill out your email and abandon your cart because a lot of people send abandon cart email with a coupon. So there’s, “Let me see, if I can get this same product on Amazon. Let me look at the competitor window to see if maybe I want that.” So there’s all these different issues that go in. All you can do is affect the ones that can be affected. Like telegraphing shipping costs ahead of time. Right? If you can’t do free shipping, which is the ideal, then don’t let someone go all the way into your check out process, and then right when you ask them for a credit card, spring $10.95 on shipping on them, that will cause people to abandon.
Jeremy: How did you discover that? I would not have guessed that. This is the first most common one, unexpecting shipping cost.
Jordan: It’s anecdotal and from studies so.
Jeremy: Yeah, I asked because I know you are really good at talking to your customers. So I’m wondering when you talk to them, what are they saying?
Jordan: Well, for the e-commerce business, you end up talking to people as they’re trying to make the decision whether or not they want to buy. And then once you talk to someone and you get the information across, those people don’t usually abandon. Those people are like anti-abandoners. Those people that will call you and say, “Hey, my credit card’s not working. How can you do this? Can I give you money and you just take it over the phone?”
Jeremy: Right, right.
Jordan: So that’s the opposite. It’s the people that you never get to talk to that is more difficult to address. So trust is a huge issue, right? One of the stories that I like to tell from back in the day, I think you alluded to earlier with the live chat. So I always recommend live chat. It’s like one of those no-brainers these days. But what I recommend is a live chat technology that allows you to see the customer’s path. So I know things like Olark are free but they don’t give you a good view on the path that the person is taking. We use Live Person, I don’t even know what it is these days, I think it got bought by someone, and it’s a different thing.
But you want a live chat technology that allows you to see where the person came in from, ideally like the ad they clicked, what page they are on currently, what pages they have been on, and for how long they were on each one. So when that little bell goes off. Ours used to have a little dingdong like a retail store, so you can’t help but look. So when someone comes in, we used to watch the path that they took. So we used to run AdWords directly to a product page. And so, let’s call it one out of every five people would put it in the cart. You get all excited, all right, and you can see what they see. So this person has $395 in the cart.
This is exciting, come on baby, go to the checkout page. So one of the things that we saw, at first we didn’t notice, and then it happened often enough that we did notice. People would go to the product page, add the product to their shopping cart, and then from there, instead of going to the checkout page like we wanted them to do, they’d go to the about us page, and we were like, “What are you doing? Why do people keep go to the about us page?” And the reason was because we hadn’t built enough trust.
This person searched on Google, found our ad, came to our site, is about to buy $395 worth of solar lights, and then it dawns on them, “Who the hell are these people that I’m about to pull my credit card out?” So they go to the about us page to see, who am I about to buy from? So what we did is we optimized our about us page. We put a picture of us, it was myself and my two brothers. We wrote our five point pledge to our customers. We had 10 testimonials below that. And then we would see people go from the shopping cart page to the about us page, and then back to the cart, and then to check out, and to buy.
So then we started thinking about that the whole way. So we added a big banner on the shopper cart page. We added more trust symbols. We had our five point pledge summarized on the shopping cart page. And that’s what helped us get into the mindset of, “Oh, we need to do more for them instead of just, ‘Here’s the product.’ We need to help them be comfortable pulling out their credit card and buying something from this site they’ve never seen before.”
Jeremy: And so unexpected shipping costs. So why do people abandon SAS, so they go to your site, obviously, you’ve done all the optimization. Why do people abandon…like if someone’s a SAS company out there, they don’t have shipping. Why do people abandon it?
Jordan: I think, it’s a very different mentality, SAS. The biggest difference in mentality is consumer verses B2B. So what we see from a SAS point of view is we see people who are checking out five different tools, and they just sign up, they never taken step one to the onboarding process. They just want to take a look inside. And they’re doing the same thing to three, or four, or five other solutions and saying, “Where do I feel right? What makes sense? What features are a fit?” There’s a big debate…I don’t know if you want to call it debate. There’s two different schools of thought between asking for a credit card up front and not, when it comes to SAS.
Jeremy: Like for a trial you mean?
Jordan: Exactly right. So almost everyone does a trial, but some people ask for a credit card up front before you start the trial, and that causes a huge amount of abandonment because obviously, a lot of people would prefer…the thought is that if you ask for credit card up front, more people end up converting and you focus your energy in customer service and support on those people who are genuinely in need of that solution. So there is a lot going on there. If you go to Get Drip, right? Which is Rob Walling’s software, He requires a credit card but he has a two-step process.
So first step is just info, then you go to step two, and there’s a credit card, and of course lot of people abandon, it’s very analogous to a retail site from cart to check up page. So then he has an email sequence go out to those people who didn’t complete the purchase, and basically he is saying, “I obviously didn’t convince them of the value enough,” and so that email sequence is designed to alleviate fears, answer questions, and build up the value so that you are convinced to come back. Very similar, very close analogy.
Jeremy: Yeah. And Jordan, I want to talk about your e-commerce days. But also I just first want to hear about some interesting observations with CartHook customers. Because you are in a position where you see a lot of customers come through. You probably check out their sites. You check out what they are doing because you want to make your service the best. What are interesting observations you’ve had that other e-commerce business owners should know about?
Jordan: I think the biggest one is it’s very closely related to the lesson we learned in our e-commerce business and the real driving reason on why we ended up selling the business and not continuing on with it, and that is selling other people’s products is easier but there is less of a future in it. Whereas, building up your own brand and your own products is much more difficult but a much more secure future with bigger potential. So we see that a lot. I think of a customer, we had recently that’s no longer a customer, they’re no longer in business. They sold shoes. Competing with Zappos, there is always going to be someone that sells the same product that is unattainable.
You can’t compete with Zappos, good luck. The same thing, Amazon is obviously the 5,000 ton gorilla in the room. You sell other people’s products and that’s what we were doing. We were selling other people’s products. You need to add so much value. You know what it makes me think of is right channel radios. Right? Andrew Youderian, highly skilled e-commerce professional. He sells products that are sold by other people also. So what he has had to do is layer on an enormous amount of value to show that they are the experts in CB radios, and that’s why you should buy from them.
So we look at our other customers, I think of Rev Balance, right? This guy in Canada sells balance boards for skaters and surfers. In the winter, you can practice and hang out with these balance boards that you do tricks on. He’s not had an easy path building his own products with his own brand, but now that he’s more established, he has an infinitely bigger future as opposed to someone. So that I think is the biggest lesson that we see. So when someone signs up, I go to their site and I see they’re selling other people’s products. I think to myself, “Woo, this should be interesting to see how they’re doing.”
Jeremy: Right. Do you give marketing advice too to these people or is it more they’re just using your software? Are you hopping on calls typically, like if you see this person, you should really…not that they’re asking for it, but do people ask you for that type of advice ever or no?
Jordan: Yes, and we are at an early enough stage that I want to talk to as many people as possible. And this again, is very closely related to one of the most important lessons we learned while running the e-commerce business that there is nothing like the phone.
Jeremy: Right.
Jordan: There is email, chat, whatever, intercom, there is nothing like getting on the phone and hearing what people say. So any chance I get to talk to a CartHook customer, I get on the phone with them and I just spew any possible value that I have, and that’s really important for the relationship, for the longevity of it and also for forgiveness because we are an early stage software company. Things get messed up, man. So when you know them and you’ve given them value, they’re much more likely to be forgiving, “I hear you, you sent five emails to this customer instead of one email, I hear you.”
Jeremy: They bought five times, it’s okay.
Jordan: Yeah.
Jeremy: So let’s talk about the phone and what have you learned about the phone, talking to customers for CartHook and then let’s go back to the e-commerce and what you learned. Start with CartHook.
Jordan: Yeah, well CartHook, if you’re building software, it’s a necessity to talk to people because you think you know what you want to build, but they will tell you what you actually should build.
Jeremy: That’s a good mentality, Jordan, but you could have just easily had the opposite mindset, I have had an e-commerce business, I’ve grown it, I’ve run one, I know what people want. So I like that mentality, but some people may be thinking, I know, I’m scratching my own itch here, I know what people want.
Jordan: I like this idea extraction route of let me go in completely blank slate. You tell me what you want, and then I’ll go verify that. I like that. CartHook was not that. CartHook was, I ran e-commerce business. I know what it should be, but all I know is version one. I know the solution it should be addressing. People abandon the cart, and I want to email them automatically and not manually in an automated way that’s designed to bring them to come back, and it needs to work on a one page check out. So that means it needs to pick up the email address as soon as it’s typed. So all these little things that I knew but that’s step one. From there, where to build a product from there, what features to add and what reporting, and all these other use cases that’s from other people. Yeah.
Jeremy: Yeah, go ahead.
Jordan: Yeah, I was going to say, let’s take it back to the e-commerce thing.
Jeremy: Let’s take it back to the e-commerce days. What was working from talking to customers and in general boosting the sales of the e-commerce?
Jordan: Yeah, I love this topic. I think of all the stuff in e-commerce business, this is our coolest story that came out of. It’s the most unexpected, ridiculous thing and at the same time, had this single biggest impact on the business of everything else. So we’re good, ambitious entrepreneurs. We sign up for Grasshopper. We put a phone number on our site. Come on, you should have a phone number on your e-commerce site, unless you’re…there’s no excuse. Even if you’re working a full-time job and growing it on the side, get someone else to answer the phone, whatever it is.
Jeremy: So stop right now, if you have an e-commerce business and you don’t have a phone number, Jordan is saying, stop, go get one.
Jordan: Even as a trust symbol, literally having a phone number on your site builds trust, the same way like a little VeriSign seal does. So what we would do is we would advertise. So we’re spending money, we’re spending three, four bucks a click getting people to come check out a solar light, okay? We had our assumptions of what people wanted to buy. We sold solar lighting. That was our most successful site. We’re thinking, “Oh yeah, the solar lights that are on the ground in people’s yards. That’s what we’re going to sell.”
Not at all. And the way we learned it was, we kept getting the same phone call that we thought was so absurd. Someone would call up and say, “I see you have a solar spotlight on your site. This is cool. Will it reach 20 feet to light up my flag?” Okay, I don’t know, I will find out from the manufacturer. Forget it, right? Then you get the same exact phone call. “Will this reach my flag? I have a flag in my front yard. We have a flag in front of our VFW, will it stay lit overnight? Will it…?” Just flag, flag, flag over, and over, and over again. Eventually, we were like, “What the hell is going on? How many people…?”
Jeremy: And you’re in New York City, where are you located?
Jordan: Yeah, I’m in New York, I’m in Brooklyn, with their flags but everything’s lit up 24 hours a day anyway. So turns out, we find out, the American flag has a very specific code. You can’t have the American flag out when it’s dark. At nighttime, you either bring it inside properly like with the respect it deserves or you keep it lit. So now, a lot of people in this gigantic country of ours are very proud of the country and have a flag out front. But a lot of people don’t live in Long Island or Brooklyn and they don’t have electricity 100, 200 feet up where their flagpole is. So the most logical thing to light it up is a solar light. So in our minds, we thought, what is this weird niche? Bizarre.
So eventually, we got enough phone calls of the same exact question that we said, “You know what we need to do, we need to create a solar flag light category and run ads to that, and only have lights in there that will reach 20 feet. And not only that, let’s go the next step. Let’s hunt down the best flag light.” So we have found a company that had a light that would attach to a pole three feet below the flag, cool. Then we went and hunted down a manufacturer of a light that would reach 20, 25 feet, and then we started running AdWords to that, and when I tell you sales blew up, you wouldn’t think, you could sell a thousand dollars’ worth of solar flag lights every day.
But in this country, you can, it’s a big enough place and a big enough need. So that little thing, having a phone number, listening to what people say and reacting to it, and then building the copy on the page, literally, you’d go to the product page, the first bullet point, “Will reach 20 feet to light your flag.” Exactly, “will stay lit up to 12 hours over night to light your flag. Attaches to your flag pole directly,” addressing what people actually want and bam, we couldn’t spend enough money on AdWords. Whatever searches were out there, we would throw every dollar at it, no matter what we did, a dollar of ad spend would bring us back five bucks in revenue. And that worked all the way up until spending 15,000 a month and making 75K in revenue almost all of that on flag lights.
Jeremy: That’s amazing. Talk about a really specific niche. That’s amazing.
Jordan: Yes, and you wouldn’t think it’s big enough, but if you listen to your customers and not assume, it’s like the software thing, don’t assume that you know exactly what they want. If we had stayed in the business…because the next thing that we found out was getting phone calls about flood lights and people needing bigger lights. So if we stayed in the business, we would have gone to China and had exactly built what people asked for, and we would have done well off that because we’re actually satisfying a need.
Jeremy: Yeah, and Jordan, I want to talk about the phone, what you learned in CartHook. But I want to stick here for a second and what else worked in your e-commerce business. Obviously, phone, listening to people, giving them exactly what they want. Talk about scaling. It sounds like you also, you didn’t just sit and did the same thing. You actually would just keep pouring money. What were some of the good things and hard things about scaling that up?
Jordan: Ae saw it as a sequence, things that happened in order. And so we knew our ad spend would be inefficient at first, and we had to convince ourselves that was okay because if you’re anywhere near profitable, when you first start paid advertising, you’re actually in pretty good shape. If you expect to be really profitable right away, it’s probably not going to happen, especially these days with the marketing being as sophisticated and big as it is. So we knew let’s just spend money to learn and that’s when we started to learn these types of things. The flag light, what people cared about, what features, what benefits. Then we started optimizing.
So one of the most important things we did was we paid for a one hour session with Site Tuners, right? That’s Tim Ash. I got his book. I couldn’t read a page of it. It’s all math. I was like right over my head. So instead of the book, we hired them. It was a one hour session for 500 bucks. My brothers thought I was crazy. “How can you spend 500 bucks?” He’s a lawyer, like is this really going to make an impact? But what that session did is it taught us optimization.
They just went through our site and said, “Here is why you don’t want to do this and why you want to do that. Here’s why the homepage should be building your brand and building trust and not selling individual products. Here is why your product page should talk about benefits first before features. Here is why you want to use reviews to add to that third party credibility. Here is why your shopping cart page should be focused. Here is why,” all these different things that what it started to do was started to make our advertising more profitable.
So we would spend a thousand bucks and get a thousand bucks in revenue. Not great, because of the margin. Then we would optimize. We’d make changes on the pages. We’d send ads to a category page instead…we’d experiment. And as things got better, we were more and more willing to step on the gas. So we did everything ourselves, and then once we got to a point that we said, “Hey, we’re optimized, when we send traffic to this site, to this page, and this page, and this page, we have a profitable way of spending money to make money.” And that’s when we hired an AdWords expert and hit the gas.
It wasn’t like this brilliant move by us. It was just, once we got to that point, anyone with expertise in AdWords that did it efficiently, you would make more money. So we went from 10K a month to 20, to 30, to 50, to 60 over the span of a few months simply because we were just optimizing and spending more, optimizing and spending more, optimizing and spending more. So I think that’s the big lesson for people. Don’t expect advertising work right away. Get it optimized and then go for it. Spend money.
Jeremy: So once you optimize it, then you hand it off to a professional who basically had different channels that they can just pour money on and bring more traffic to essentially?
Jordan: The difference between me doing AdWords myself and an AdWords expert, it’s nine day. It’s completely, completely different from the structure of the campaign, to individual categories, to negative keywords. It’s just a completely different thing. So once we got it anywhere close to profitable. For us what we do, we could affect was the page, the on page optimization, once someone got there. And then we knew, once we handed off AdWords to someone who…they would be a lot better at it. So they would bring the bids down, they would cut off the ads that weren’t working and testing. That’s why it was in conjunction with an expert but what we could affect is the on page optimization.
Jeremy: Yeah. So at that point, Jordan, what mistakes should people avoid? What are some things that only someone who’s going through in the trenches like the e-commerce business like you had. What did you learn that people right now, you just tell them, “Listen, I did this, you need to not do this also”?
Jordan: Oh, man. We definite made a lot of mistakes. The most painful part of the business for us was post purchase and that’s because of the some of the quality issues we had. We were selling solar lights from China, and one shipment would be amazing quality and the next shipment would mire us in customer services issues. And that pain felt from customer service and returns affected our behavior. It affected our ambition, it affected our…at the end of the day, it affected if we want to continue on in the business. One of the reasons we sold the business was because it was just such a giant headache that we thought, “If we 5X this business, we’re going to be in even larger world of pain.” So figuring that part out and in the manufacture, in the quality, that’s a big thing and also having a system in place. If I had something like Skubana…we had Google Docs mixed with Excel.
Jeremy: Yeah, what were you doing?
Jordan: So Volusion on one side and it wasn’t like API happy back then. So there’s no integration. So we had Salesforce for customer service issues, then we have an Excel sheet for running the process the way we wanted to of like, “Did we send a thank you? Did we send when it shipped? Has it officially shipped? Did we send a thank you email, please come back to right a review?” It was all mangled up. And we had drop shippers, we had stuff in Amazon warehouses and something like a Skubana, the type of technology available now. And so I think that’s important to have straight once you get up and running. On the front end, more from a business point of view, I like paid advertising because I think it helps you learn a lot faster.
Jeremy: Yeah.
Jordan: I see a lot of people who are really, really hesitant to start paid advertising. And I think that’s a little dangerous because you say to yourself, “I’m not going to spend that because either it’s not in my budget or I don’t want to, and instead I’m just going to work on content,” and then three months go by and you’ve learned the same thing you would’ve learned in a week of spending a thousand bucks. Your life for three months is a lot more expensive than a thousand bucks of AdWords. And so I think, a willingness to spend money on that even at least at the front end, at the very least, to retargeting an efficient way of paid ads.
Jeremy: What I see a common trend, Jordan, with you is you really like the shortcut learning. You don’t want to spend the time. You want to hire the expert, pay them $500 and have them break down everything you need to know in an hour, or hire an AdWords person that can…that’s their expertise. You know enough to hire the person, sounds like. But then from there, you just want to keep…what would you say your wheelhouse is? What is your biggest skill set? There’s no way I’m handing this off. This is my thing.
Jordan: In the e-commerce world, it was the optimization. And that’s just also a function of the roles we played, right? We had three people in the company. One guy was in charge of getting people to the site. SEO, paid advertising, traffic, partnerships, links whatever. One person is in charge of converting them, that was me, and then one person in charge of after the purchase, delivery, thank you, shipping, customer service. We broke it up that way into three functions. And my function was getting people to purchase once they’re on the site.
So it makes sense that that’s where my expertise was. But in entrepreneurship in general, I think out of necessity for people who bootstrap things and don’t raise a ton of money and are able to hire people right away. And you have to be…it’s like this desperation/creativity. You’re like, “I don’t have these resources. How am I going to get it done anyway?” So I think that’s why it was, “I don’t have the resources to hire someone to optimize a site. So $500, that makes sense to me to spend to learn a lot and then apply it ourselves.”
Jeremy: Right, right.
Jordan: So right? And hiring an AdWords person, I’m not going to do that right away. I’m going to bang my head up against it first to learn enough about it but then I’m going to just going to acknowledge, I’m not the best person to do this. Yeah, so I think, it’s like taking shortcuts but out of necessity.
Jeremy: Yeah. And Jordan, you bring up a really good topic that I have written down that I want to talk to you about is bootstrapping versus funding because when you deal with a physical goods company, you have to pay, it’s not like a SAS, but you have to pay a ton money and you’re driving all this traffic and selling $60,000 worth of goods. You’re paying a large amount. How do you manage the cash flow and what things should people watch out for? Because you bootstrapped this and at what point do you start working to get funding?
Jordan: So this is the reason it’s a lot easier to sell other people’s products. And it’s a lot easier to drop ship, and that’s also the reason that so many retailers selling physical goods look to Kickstarter because it’s just a giant challenge and a huge risk. And I know we were not willing to take that risk. So what we did, we went the drop ship route, and then as soon as we saw things that we knew would sell, then we’d try to work out a better deal. So once we’re selling $5,000 worth of solar flag lights a month and we know we have a lot of room to grow on the AdWords front, that’s when we go to the manufacturer and say, “Okay, so now, we’re willing to pay up front to get a few hundred units.” So it’s as risk free as possible. And remember, when we sold the business, we actually had like $20,000 worth of inventory, but the buyer was totally fine in taking it on because there was a track record.
Jeremy: You proved it. You tested it.
Jordan: Right, 10 unit [inaudible 00:34:46] sell a day, you only have 300 units, within 30 days, you’re done. The Kickstarter path, that did not exist back in the day, and that I think is the ideal because it gives you funding to buy physical good that isn’t someone else’s product.
Jeremy: Today, you would have been like, “Okay, we’re doing this flag light and you just have a bunch of contributors and you’d make a high quality one with the crowd’s money, that type of thing?
Jordan: Right, and if you fail, it doesn’t hurt that much. You give money back or you decide not to do it or it fails and you haven’t invested six months of building up a store and a ton of money in inventory. So I think that’s the biggest challenge for people just starting out. It’s which way to go and if you do want to build your own brand, you need to put some resources up to get it done.
Jeremy: And then testing wise. Obviously we saw that you did really well with the flagpole lights and you tested that and you heard from customers. What was something you felt was really going to work, you’re convinced and it just bombed?
Jordan: Oh, painful topic. So we found success. Our business was a network of niche stores. So we were basically looking at NetShops which is now Hayneedle and CSN stores which is now Wayfair. I think I have that right. And the way those companies started out is the same way. They had like 400 niche stores. And each store had a very, very narrow focus and a narrow category, and the concept was a fisherman will buy more at a fishing store than he will at the fishing aisle of Wal-Mart. Because that’s your home. That’s what you’re there for. And because of that, the way that translates online is better ROI on ad spend. Higher conversion rate. So we started doing the same thing. So our most successful store sold solar lighting products. Now worse, that was our first store.
Jeremy: Everything’s going to be like this.
Jordan: That’s what we thought. And so we started putting a lot of our time and energy into building other stores. And those stores didn’t work out as well. And so we thought, “Hey,” within a few months, we’re making 50K a month on a store, let’s do this with ten stores, so exciting and it didn’t work. And the time that we had put into building these other stores took away from the solar store. We kind of screwed ourselves in the middle by assuming, “Hey, this is just like everything else.” Instead of taking a much slower approach and saying, “Let’s launch one more store and if it doesn’t take off within 30 days, cut it off entirely.” Instead, we started sinking our limited resources into spreading too thin. So I think that was our biggest…
Jeremy: You wanted to go big. So instead of just testing one other store, you just launched three or five more.
Jordan: Exactly. Like three or four more.
Jeremy: What was one of those that you were surprised like, “I can’t believe this didn’t take off. This was a great idea, a good niche”?
Jordan: Electronic fireplaces.
Jeremy: Okay.
Jordan: It sounds like an absurd…all of these things are absurd niches, gardengnomes.com was one of NetShops. It’s a million dollar year business selling garden gnomes. It’s all these weird things that are hard to find offline, and you can give a much wider selection. We had a one, we had and Adirondack chair store. So when you go…
Jeremy: I don’t even know what that is.
Jordan: Adirondack chairs, those loungy type chairs that you sit on or you see next to the pond.
Jeremy: I see, I see, okay.
Jordan: So when you go to the store, you have a choice of like three or four of them, online, you can a hundred different ones.
Jeremy: Right.
Jordan: So it’s that kind of mentality. So I was pretty sure I saw all of our competitors spending a lot of money on advertising to those sites and we built it up. We spent a ton of time. We made a nice site. Good product descriptions. The whole deal and it just didn’t go anywhere.
Jeremy: why did you think? Electronic fireplaces, because you did all the research, you did the due diligence. You saw people are spending money on it.
Jordan: We forgot about the customer side. We looked at the competitors. We talked to the manufacturers. They are willing to do it and so we convinced ourselves that it was a good move but forgot about the customer side, and the customer side, they required expertise that we didn’t have. So when you call us up and asked about a solar light, yeah, at first, we didn’t know what we were talking about. After a few months, we were experts. Every single person that called on the phone, turned into a sale. The electric fireplace, totally, I didn’t know what they were talking about. And we didn’t put in the time to learn, and then the shipping costs were too big. So all these mistakes compounded on top of one another to make it a failure.
Jeremy: Yeah. I’m glad you talk about that with a smile because someone right now is thinking about doing that whatever you’re talking about, right? They’re thinking about going to something, and so I think, if you at least talk them through it…maybe if you did spend the time for the expertise, maybe it will work, maybe not but…
Jordan: Yeah, what I think about, if we go one layer deeper into the mistake, the right approach would have been lower risk. And so right now, if I was in that same situation, I would find, I would just make the risk a lot lower. I would launch a site with three products. I might even launch one landing page with one product. And then run ads to it and get people on the phone and start to learn and say, “Whoa, whoa, I don’t want anything to do with this niche because of X, Y and Z,” and that would have taken a week or two, instead of spending a month making a perfect site. And that’s actually what I would do with a lot of things. Even if I was considering selling a physical product, right now, I would probably just start off with one page.
I would maybe even just sell a competitor’s product. I would say, that’s the best X of what I’m trying to do. Let me sell just that and then listen. That was our process, and what made it successful was here’s what we have to offer in the market and then people calling and say, “Yeah, but it doesn’t have this. Yeah, but I need it to do this,” and then us going and finding that product. So I if I wanted to build my own solar flag light right now, I would just sell whatever’s on the market and then get the feedback on what people want and then I’d come out with my own version, and I think you could do that same process for a lot of physical goods.
And that’s what people do these days. Amazon’s obviously big for private labeling and people go to the review section of competing products and they look at the lower star reviews to hear about, “Oh, this is awesome but the paint peeled off after 30 days. Oh, and this is great but it still has water coming out of it after a few days.” All these little things are the product improvements, they’re benefit and features that people want in the market.
Jeremy: Right. And there’s stuff that you would put on your product page, “Does not peel after 30 days.”
Jordan: That’s exactly the right mentality.
Jeremy: So what platform is…obviously, you were on your own platform. You were using Volusion but people were going direct to your site. What other platforms do you recommend people check out or were you testing out other platforms too, at the time?
Jordan: It’s a big conversation, right? The bottom line is that no platform is perfect. Even if you make the perfect platform, to maintain it and pay for it is imperfect. Obviously, if we’re talking about shopping cart platforms, back then Volusion was a phenomenal move for us. We were on Yahoo Stores and then moved to Volusion, that opened up the whole universe of options for us, and optimization, and changing things whereas in Yahoo, we were stuck. You couldn’t do anything.
Things have changed since then. Obviously, Shopify has sucked every bit of air out of the room and that’s the only one people talk about, and I think they’re fantastic. They’re not perfect. But they’re fantastic. I like Lemon Stand a lot, which is also another Canadian, and so they do a lot of really interesting things. WooCommerce, I personally wouldn’t go that route because there’s enough headaches in e-commerce to begin with to add in all the headaches of WordPress on top of it. I personally wouldn’t do. I will tell you what, my best business idea that I willingly give out, hosted solution for WooCommerce. WP engine for WooCommerce. If you want to partner up on that, call me.
Jeremy: I have this question at the very end, Jordan, ideas people should steal from you that you’re not going to use or don’t have time for, or they’ll call you and say, “I’m going to do this with you.” So hosted solution for WooCommerce. What else is on your mind that you’re like, “I’m focused on CartHook, I can’t do this e-commerce product or solution or whatever.”
Jordan: Yeah. I’ll say the majority of my thinking time is on CartHook, so a lot of these different ideas are about innovations to CartHook and which direction to go and which competitors to look at and why things are happening in the market a certain way. People talk about Klaviyo to us all the time, so I look and see and what they’re doing. I look at what our competitors are doing. So a lot of those types of ideas I wouldn’t share because they’re one step away from what we’re doing now.
Jeremy: You’re going to build them up. You want to maybe build them out as a feature in CartHook.
Jordan: Right, we probably won’t stay a cart abandonment solution forever. We will probably start adding other things.
Jeremy: Sure, sure. Well, let’s stick there for a second because you talk about what you use in your e-commerce business. You use Volusion, you use another cart abandonment. What else were you using and then I want you to talk about what you didn’t like about the cart abandonment?
Jordan: Yes. You got to have review software and I think the best one out there is Yotpo.
Jeremy: How do you spell that?
Jordan: Y-O-T-P-O, Yotpo. So they started off as just reviewers and they were good at it. Then they added in something enormously important and that was an automated email X number of days after a purchase, requesting a review. I can’t tell you how important this thing is. So we had the same thing on our e-commerce store. And we were blown away, not only by how many reviews we got, and reviews on the product page makes the conversion rate go up, and it’s a third party credibility. It’s not you talking about it, it’s other people talking about it. Think about how you shop. I do the same thing.
Jeremy: You look at reviews, yeah.
Jordan: Right, so having an automated email that goes out X number of days after the purchase, hugely important. I’ll give you a little hack that we did. We wanted more reviews. So what we said is, “Come back and write a review. If you write a review, you will automatically be entered into a raffle for a $100 Visa gift card that we give away once a month.” So that got a lot of reviews. Then the secondary hack was, “If you include a picture of our product in use into the review, you will get three entries into the $100 gift card raffle.”
Jeremy: Nice, I like that, yeah.
Jordan: So all of a sudden, we had a ton of review…I don’t actually know if that’s legal but just saying.
Jeremy: Maybe things have changed. So we we’ll put a disclaimer here. You have to check out the rules and regulations or whatever.
Jordan: Yes, the location instead of a.
Jeremy: The platform you’re on.
Jordan: I’m past the statute of limitations, so we had a tremendous number of reviews, and we also had tremendous number of pictures. Some of the really good pictures, we used in the product pictures, right? When you’re selling other people’s products, one way to differentiate is to have different pictures than what the manufacturer provided that most people use. Okay. I think we took a dive into a different direction.
Jeremy: No, you were just going through the software you were using.
Jordan: Yes. So review software, hugely important for those reasons. The secondary reason, people who come back to write a review, they buy also. So this automated email not only increased our reviews and our convention rate, it also generated revenue, a decent amount of revenue because people came back and they bought another thing, another…now that they already know you and trust you, right? And that’s another conversation for maximizing lifetime value, that’s something else.
So review software, huge, live chat software, we talked about. You got to have something to stay organized. These days, my best idea after the e-commerce business, the one that I was about to do instead of CartHook was a CRM for e-commerce. One that’s connected directly with your shopping cart that can easily suck information and one that organizes what you need to do, and who you owe, and who you need to email back. There was nothing back then. Now there’s more. Now there’s Help Scout, there’s Groove. So that’s hugely important to stay organized because you got to give amazing service these days as a small company.
Jeremy: Yeah, customer support, yeah.
Jordan: Right, one of the big differentiators. If you do drop shipping, then you do need something like Skubana to get organized. If you sell on Amazon and you have four different drop shippers and some stuff in Amazon warehouse, you need to coordinate all that. What else? And email marketing. You got to…your email game, I think that’s where it’s at these days. The issue of what I see happening in the market is I see well-funded bigger companies who do not care about making money on the first sale. They are willing to spend up to and above the cost of customer, excuse me. They are willing to have their cost of customer acquisition equal to or above the amount of margin they make on the first sale.
And so they’re happy to lose money. So if you’re looking at AdWords as a channel that you can be profitable at, I have this conversation with a lot of our customers. They’re like, “What am I supposed to do right now? I keep spending money, and I’m barely breaking even,” and it’s because you’re competing against sophisticated marketers that don’t care about the first purchase. They say, “I’m going to make my money over the next year by up selling, cross selling and reengaging my customer list.”
So that’s a huge shift to make as a business owner. You have to start thinking long term. You have to start looking at your email marketing as that’s your profit center. That selling something for the first time is like lead generation. That’s like, “Okay, now I have someone that I can market to. I might have spent a $100 for it and gotten $100 back. I need to be cool with that. Because I need to make another $100 from this person in an efficient way over the next year,” and that’s all, that’s email.
Jeremy: Yeah, yeah. I remember, I went, I saw the founder of Proactive speak, and I forgot, they know their metrics to the day, like, “Oh, we spend…we don’t make our money back on a person in a year and 272 days, that’s when we make it back,” and they…exactly what you’re saying, they spend above and beyond.
Jordan: That’s who you’re competing against.
Jeremy: Right.
Jordan: So that’s a big shift that happened over the past few years. Right? Software’s used to it, they’re like, “Oh, we make our money back in six months.” Right? Well-funded companies that are growing fast make it back in 12 months. We are a smaller…we have some funding but not gigantic, so we want to make our money back in two, three months. E-commerce needs to think the same way, and what that requires is a reorientation of the way you think about acquisition and again, email. That’s where you can make it up.
Jeremy: Yeah, so then what we were you doing with email then and then what you do now. Obviously, with CartHook, it’s engrained in the product.
Jordan: Yes, so when we ran the store, we made, I don’t want to call it the same mistake. We did the same thing that a lot of people still do. Every two weeks, we send out an email saying, “Hey, 20% off this category or this product.” And that’s the bare minimum. That’s slightly better than never sending email. That’s really not, not the right way to go. So you do want to have campaigns in place that reengage, and cross sell, ideally in an automated way, which is why people love something like Klaviyo even though it’s really complicated, and that’s why people invest in that. That’s the direction that CartHook is looking into also.
Because that’s where the value is. When I have a conversation like this, that’s what I recommend, that’s probably where we should move toward. So right now, we have that for one function. When someone abandons a cart, it triggers an automated email campaign to do this. So the next logical step for us is after someone makes a purchase, trigger this multi-part campaign designed to do something different. Maybe based on what they bought or how much they spent. So that’s the, not trick, but that’s the difficulty that you have to invest in as a retailer.
Someone bought your slippers. I just came across a cool slipper company. You need to get me to buy and be really happy with the experience, and with the box, and with the shipping, and everything, and then start hitting me up before the holidays.
Jeremy: Buy it for your wife or something, yeah.
Jordan: Buy it for your wife, buy it for your father-in-law, and that’s where you make the money.
Jeremy: Yeah. So what were you using, or you don’t say you were using it but you were using cart abandonment software?
Jordan: Yes.
Jeremy: And then what did you see, what was lacking there?
Jordan: So, we used it and then we couldn’t use it anymore. That’s actually, that was the first time, I was like, “This isn’t smart. I wish, I had something else.”
Jeremy: You mean it just didn’t integrate with or it was breaking or…?
Jordan: It did. We use a product called Autoresponder Max, which was put out by Brand Labs. Brand Labs is the best Volusion shop out there. Guys are awesome. We had them do a bunch of other stuff for us. They also had this product called Autoresponder Max. That’s the same software that automated the review. “Hey, you bought a product, come back and write a review.” So what happened was their software integrates with Volusion, and what that means is it integrated on the back end.
So it wasn’t sitting on the front end. What I’m actually getting to is when we did a lot of our testing and optimization, we found that the highest converting flow of our check out was forced anonymous. We don’t give any option to create an account. Who is going to create an account for a solar lights order?
Jeremy: Right, it’s just an extra step.
Jordan: Right, it’s an extra step of friction. So when we experimented with that, with forcing anonymous, with not even having the option, let alone forcing someone to create an account, everything worked a lot better. And Autoresponder Max couldn’t work with that.
Jeremy: So Autoresponder Max worked on the front end. So people would have to enter their information before where you have them enter in after and that’s what they didn’t do.
Jordan: Right. What they required is a button to be clicked and action on the page that, technically speaking, wrote the email address onto the database. And so…
Jeremy: Which doesn’t make sense at that point because you just want people checking out and…
Jordan: It’s a one page check out. There is no button.
Jeremy: Right, right.
Jordan: There’s just purchase or no. So it didn’t work for us. And so that’s when I started working on CartHook. The developer I worked with was like, “Look, man, we need to do this in a way that picks up the email address as soon as it’s typed because that means I don’t require a button click, a page refresh, or any action on the page, and beneficially, that means, we capture as many abandoned carts as possible, the maximum amount. Anyone who types an email address and clicks at the field, we got them.” So that was one of the biggest innovations that I felt the pain of, in the existing product that I was using and we built to improve. Now that’s one of our biggest selling points. If you have a WooCommerce site, if you have a Magneto site, as soon as people type it in, that’s when we capture them so we can say, rightfully, that we capture as many as possible.
Jeremy: So with that, okay, then does it send, you said, automatic sequence. So they can send, if someone abandons and they put their email in, tell me what happens after that, and does it send multiple emails at certain frequencies or is that the choice of the person?
Jordan: Yeah, it’s the choice of the person, right? We have what we call best practices built in by default.
Jeremy: Talk about the best practices, yeah.
Jordan: Sure. So what we do when once someone’s email is captured, first we have to give them a chance to buy, right? They’re not abandoned until they really are abandoned. So once we capture the email address, we have a 60 minute count down. If they don’t hit the thank you page, meaning they bought, within 60 minutes, that’s when we consider it abandoned. And once it’s considered abandoned, then it launches the email campaign. And the email campaign is determined by our customer. So the best practice is one hour after abandonment, 24 hours after abandonment, and then five days later.
And let me talk about those real quick. One hour after abandonment is like the golden hour. Right? That’s the most important one because if you think about the way, you shop, think about the way you just live online. I know myself, I have like 30 Chrome windows open. But which window do you always go back to? Your email. Right. So getting an email into the inbox with the abandoned cart with the product, right? Everything specific to that cart, within an hour, odds are that Chrome window is probably still open.
That session is probably still there. Going back to the email inbox and getting that email is probably in the same session like they’re literally sitting down, they haven’t gotten up, they’re at work, whatever it is. So you’re capturing them right as they were just considering the purchase. So if it really is a function of, “Oh, that’s right, I never finished that purchase,” that first email is our best performing email.
Jeremy: Yeah. And then let’s stick there for a second because, so what do you recommend people say in that email?
Jordan: Nothing salesy. Customer service. Just “How can we help? Here is our phone number, here is our email address, do you have any questions, can we help? Reply to this email, call us,” just fully customer service oriented. “We noticed you didn’t finish your check out. How can we help?”
Jeremy: I ask this because, I know your experience going back to your dad’s business where you were doing direct response marketing. So I’m really curious to how you frame it because I could see you maybe saying something funny, like, “What the hell happened to you? You were about to purchase,” or I don’t know.
Jordan: Yeah, so that’s why we have these default best practices, and then what we tell people is, “You know your customers better than us.” Right? The guy selling cool balance boards to skaters, very different language, very different feel and shtick compared to “Let’s Talk Health that sells supplements to elderly people. So you need to tune it into your channel. But the more personality the better. The more…we have people…
Jeremy: I think I would default to the funny, I don’t know.
Jordan: Yes. Yes.
Jeremy: If you fall, you can’t get up, go to the check out.
Jordan: Right, so if you go to Chubbies, the shorts company, abandon a cart on their site, you will literally laugh, it’s like comedy.
Jeremy: Chubby is a short. I’m not.
Jordan: Yeah, Chubbies, they’re cool jockey shorts, whatever. But you abandon a cart on their site, they send an email, it’s like eight feet long, you scroll down for 10 minutes, and it’s just full of hysterical jiff, after jiff, after jiff, and that’s their style. That’s their whole persona, so it makes sense.
Jeremy: Right. So customer service, don’t get salesy or whatever kind of personality you have.
Jordan: No coupon, don’t discount yourself. The person might’ve come back even if they didn’t get the email. So the email is helpful and a reminder and it’s not salesy. So that’s the first email. The next one’s kind of interesting. The 24 hour thing is something we found is interesting. So the reason you want to send it. You can adjust, you can do 12 hours, 24, 36, 48 for that second email. We recommend 24 hours because think about how you shop and think about how you live your life. You’re probably doing the same thing at the same time of day.
Jeremy: Yeah, that’s a good point.
Jordan: At least, five days a week.
Jeremy: It’s at their lunch. They’re already sitting down, that’s their normal break.
Jordan: That’s probably when they [inaudible 01:00:15].
Jeremy: That’s smart. I like that.
Jordan: I think about my wife. My wife’s got two kids to juggle, going to school, she doesn’t have time to go on email. She goes online twice a day, once when the kids are asleep and once at night when we’re watching TV. So that’s when she shops. So when you hit her back in that inbox when she’s hanging out watching The Good Wife [inaudible 01:00:39]…
Jeremy: That’s why you try and distract her during that time so she doesn’t shop, right?
Jordan: Yeah, I’m fully in control. Right.
Jeremy: So that’s smart. I wouldn’t have thought that. Okay, so do you, in the system, and you’ll tell me, but is there an asterisk, like this is what we found to be best, or you just give the choices and people decide. Within CartHook, is it obvious that you say, “We recommend 24 hours.”
Jordan: We should do more messaging inside the app, but we do messages that you don’t need to change anything and yo