Last Week of Q3 is Upon Us…🤯

Coming to you live from San Diego! Here for a few days for Commerce Roundtable. Great city. The weather, lifestyle, and food scene here is great. My favorite place in Cali.

Lots of diverse topics to cover today… let’s start with some quick updates since we last spoke:

QUICK HITS:

• Federal Reserve Cuts Interest Rates: The Fed finally cut rates. They’re confident in inflation subsiding towards its 2% target and aggressively cut fed fund rates by 50bps (0.5%), which is higher than the typical first interest rate cut of 25bps. This day hopefully marks the beginning of a strengthening consumer.

• New Performance Max Insights & Controls: PMAX is rolling out enhanced reporting on creative assets to show performance on image/video and copy. You’ll also now be able to add negative keywords to Search campaigns. The black box of PMAX seems to be opening up a bit!

• The Concept of “Founder Mode” is Born: Paul Graham (Founder of Y-Combinator) published an essay on the concept of “Founder Mode.” It brought quite the stir on social w/ dissenting opinions. Here’s mine.

• New Marketing Operators Podcast w/ Shopify President: A+ episode featuring Harley Finklestein. Must-listen for anyone working in the ecommerce space. Every time I hear Harley talk, it reassures me that building, investing, and operating in the Shopify ecosystem is the right decision. He covers his take on “Founder Mode” and what the future of Shopify looks like. Listen here.

• Check your ad platform daily spend limits: Now that Q4 arrives next week, you must be prepared for holiday season and the volatility that enhanced consumer behavior brings. Increase your daily ad spend limits on each platform by at LEAST 5x of what you expect to spend. Do NOT wait until the last minute. Drop what you’re doing and contact support now so this doesn’t fall through the cracks.

• iOS 18 UPDATE: you can now “schedule send” your iMessages! Been waiting for this update for years. Now I don’t need to message people at 6am and feel guilt. Better late than never.

  

1. Commerce Roundtable Key Takeaways:

1. Great opening chat by Chase Dimond & Jimmy Kim on Email Updates. They took a look at a huge data bank and gave some industry insights:

• Don’t forget about iOS15 from a couple years ago! Most iOS users opted out of email tracking… can’t compare open rates (ORs) TODAY to open rates from pre-iOS15 since Apple defaults to 100% open rate. Remember over half of your email sends are iOS devices. Your ORs today are an inflated metric and only should be used directionally.

• Same can be said for “Click to Open Rates”- b/c of inflated ORs, C:O rates appear to be on the decline.

• Average Order Value (AOV) has been on the decline YoY on email, SMS, and ecommerce at-large. What’s the reason for this? More tepid consumer? Brands discounting more heavily? Not clear, but not great.

• Email vs. SMS revenue attribution: Email represents 81%, SMS 19% of retention revenue.

• iOS 18 email “categorization” and “summarization”:

  • Categorization: Apple is introducing AI-driven inbox categorization to sort emails into distinct categories: Primary (for personal & time-sensitive emails), Promotions (marketing emails, offers/deals) & Transactions (receipts + order confirmations).

  • Summarization: Apple Mail app will introduce a new email digest view later this year, which will group multiple emails from the same sender into a single, summarized view. While this is designed to improve user experience, it will impact email marketers significantly. Major ramification: be sure to add alt text to your images and ensure your copy is clear & concise to ensure it ends up in Apple’s email digest.

• “Send More Emails”— biggest takeaway from Chase & Jimmy. Email is still the premier retention marketing channel. It’s cost-effective and performative. You’re likely sending too little email!

2. LIVE Operators podcast episode: great content as always.

• Jason shared his perspective on the consumer and how it’s impacted even Hexclad in 2024. I’ve been screaming about this for 2 years now and it’s been coming up more & more in daily DTC conversations. Matt shared that he’s in a group with other mid-8 figure brands and not one brand in that group is up on revenue for the year. In fact, he mentioned that the best performing brand in that group was down 12% YoY. Even the top 1% of Shopify brands are feeling the pain.

• Jason also shared that it’s easy to get distracted by the new shiny objects in the martech world. Don’t just dive in blindly because it merely sounds like a good idea. Rather, you must understand the WHY behind the test/activation. What will it lead to in the business that underlies the reason behind the initiative? Ask yourself this question.

• Matt isn’t that bullish on TikTok Shop. He believes TikTok Shop (much like Temu and Shein) is taking advantage of a deal-hungry consumer and TikTok Shop has subsidized growth of merchants on the platform and that it will not continue on this trend. He still said it’s a “fine channel” but isn’t as excited as others. Fair point. I’m personally more excited, but its growth can certainly be opportunistic in nature given macroeconomic conditions (which seem to have just taken a turn for the better).

• Jason is most excited about investing in Analytics for Hexclad. He sees it as a profit generator, not a cost center. He’s sick of having to login to 10 different platforms and nudging 10 different people for a simple analytics answer. He wants the numbers and he wants them accessible, without jumping through a ton of hoops and time lapse prior to getting them. Invest in your ETL & your data warehouse, regardless of the size of your brand. Shopify Analytics simply will not do the job for you longterm! TOTALLY AGREE here, it’s exactly why invested heavily into building a centralized analytics platform for our clients.

3. Excellent talk by Bryan Starck on Subscribe & Save Strategies to Elevate Recurring Revenue

• Make subscribing a no-brainer vs one-time purchase. Ex: free shipping, gifts, early access to product launches, etc.

• Optimize your presentation of the offer. Value-adds of the subscription option should appear clearly in the buy box.

• Condition users to engage in the longterm mindset. If it takes weeks or months to notice effects, lay this timeline out for the user so they go into the subscription with the understanding this is a longterm product.

• Optimize “re-bill reminders.” Rather than the ugly automated text-only flow email reminder that your customer will be “re-billed soon,” position the email as an exciting alert that their next product is coming soon with exciting images. Make it fun. Use consumer psychology to your advantage.

• Level up your new subscriber onboarding experience

• Focus on your subscription cancel flow. Aim to achieve an 8-10% save rate on your churn. Most brands sit at half of this. Export cancellation data, analyze for trends, have rebuttals for each cancel reason to address the user’s concerns and nudge them to resubscribe.

4. A+ talk by Taylor Holiday on Ecommerce Financial Literacy: he spoke about the consumer, the timeline of how the industry has shifted on a macro and consumer basis, how to properly forecast new and returning customer revenue and how you should go about finding your proper ad spend levels based on what you want to optimize for (contribution margin, etc), and how to detect whether your brand is in trouble months in advance through lapsed customers that you can kiss goodbye. Taylor is a super sharp guy and tend to agree with most of his takes (even though some are super hot and may ignite controversy on the social airwaves).

2. TikTok Opens Up Search Ads to All Ad Accounts

Today, TikTok officially made the Search Ads campaign type generally available to all ad accounts!

We’ve been testing Search Ads on TikTok in Beta for a while. We’ve seen similar performance on Search Ads as our standard Smart Performance Campaigns.

With Search Ads, you’re able to now specifically appear on the TikTok Search page and target users based on the keywords in their search queries. Just like Google Ads.

We know that TikTok Search has been getting a ton of attention as a potential “Google killer,” which is a bit extreme. But, Gen Z has used TikTok as a search platform a significant amount. According to TikTok, 57% of its user base uses the search functionality and 23% of its users search for something within 30 seconds of opening the app.

Thanks to the significant search volume on TikTok, you’re now able to meet your prospects where they have high intent. If they search for your brand or non-brand keywords, you can show up with the creative of your choice (video or image) right there in the search field.

TikTok claims that advertisers who run Search Ads in addition to In-Feed Ads see a 20% increase in conversions on average. They also state that 18% of users who see an In-Feed Ad but don’t interact with it, end up doing so after seeing the corresponding Search Ad. Makes sense in the user journey.

If you run Google search ads (you better be), then there’s no reason why you wouldn’t activate this same campaign type on TikTok.

This is now a table stakes campaign type to be running in your TikTok ad account.

3. Mr. Beast Releases 36-Page Employee Onboarding Doc

Mr. Beast has 316M YouTube subscribers, the most on planet earth. Last week, his 36-page employee onboarding doc leaked. Lots to take away. Absolutely worth reviewing. Check out my 10 Favorite takeaways from it HERE.

If you’d like to check out the full 36-page doc, you can view it here.

Do You Need a Wealth/Money Manager?

This past week, I listened to the Operators recent podcast.

Hot topic came up about "wealth managers." Personal finance is a severely underrated topic.

My 3 main rules for investing:

1. Don't blow up (go to 0)

2. Minimize fees

3. Don't try to time the market

Do you need a wealth manager?

My stance: NO.

It breaks Rule #2 above.

Check all 3 boxes through index funds & a well-balanced portfolio.

As Jason Panzer mentioned on the pod, do NOT allocate a significant portion your port for stock picking. This violates Rules #1 & 3. Proper stock picking DOES require timing the market. Stocks don't go up forever. They eventually go from growth to value & multiples collapse. If you didn't time this (it's rare you will), your opportunity to exit the position is gone. The market will always be ahead of you on single names.

Don't pay a money manager to do this either. After their fees, it's RARE they'll ever beat an index fund.

Stay diversified, track macro & load up on index funds.

Here's what a reasonable portfolio looks like:

- Index funds (total stock market or S&P 500)

- Bonds

- Cash (money market fund; aka MMF)

- Privates: angel investing (highly risky, not a fit for most), RE & other funds

- Play money (stock picking & crypto)

How much of each asset should you have?

Depends on risk tolerance, interest rate environment, and age (how close to retirement)

How to think about investing?

Understand your monthly cashflow & use most of it in your portfolio.

Do NOT let it rot in a bank account where inflation continuously depletes cash value over time.

Most of your cash should sit in a MMF.

Especially during times like now where interest rates/yields are high. Right now, you get paid 5%+ on your cash in a MMF vs checking account. MMFs are liquid within 24 hrs if you need the cash.

Dollar cost average (DCA) positive cashflow into a mix of index funds, bonds & MMFs. They all pay you dividends. This is literally 1 of the only true ways to generate passive income in life.

I personally DCA weekly to erase as much "timing" the market noise as possible. There are so many "no fee" platforms out there. I prefer JPM.

By DCA'ing, your investments are on autopilot.

Also, don't panic when there are pullbacks on the index. If you believe in the US economy, you have faith it'll bounce back & march higher (it ALWAYS has).

Final rule: do NOT be greedy. Be thrilled with 5-10% annual gains in the market. Take that all day.

Don't try to become the next GameStop millionaire, unless it's w/ money you'd be fine taking & losing in a Vegas casino.

Stay disciplined, sleep good at night & avoid having to look at the stock ticker all day w/ anxiety.

NOT financial advice.

This is purely my own perspective.

Read "The Little Book of Common Sense Investing" by John Bogle, founder of Vanguard.

Managing my own money has kept me informed on the market & money has worked for me for the past 10+ yrs of being invested.

The image above depicts how the S&P 500 index has performed over the past decade.

What I’m Listening to 🎧

Beats of the Week: SÉBASTIEN LÉGER & ROY ROSENFELD at LOVELAND FESTIVAL 2024 • AMSTERDAM

I don’t think Roy Rosenfeld or Sebastien Leger have appeared on my newsletter yet, but they’re top notch. Most of the music you’ve seen me post has been Afro house. But these guys master the art of melodic house. Dreamy & euphoric are the best words to describe their style. I’ve listened to this set on repeat now for a couple weeks, I can’t get enough!

I welcome all feedback. Good, bad, everything in between.

Hit reply, and let’s hear it! 👂

📧 Share your thoughts or what you want me to cover next!