Defining Success Within The Ecommerce Journey with Kelley Thornton

Andy Splichal:

Make Each Click Count podcast. This is your host, Andy Splichal. We are happy to welcome this week's guest to discuss today's topic, which is defining success within the ecommerce journey. After a successful 20-year career in the throes of corporate America, he left to become the founder of Purchase Point LLC. With Purchase Point, he brought a creative approach to captivating consumers during the last 7 seconds along their path to purchase. In 2016, he stepped away to create his next company, Tinley, an ecommerce company with a mission of helping men look and feel amazing. In July 2022, they shipped their 1.5 millionth box and have over 350,000 customers worldwide. A big welcome to Kelly Thornton. Hi Kelly.

Kelley Thornton:

How are you doing? So nice to be on your show and I thank you so much to have me and actually I should update my profile. We just shipped our 2,000,000th box.

Andy Splichal:

Wow. Congratulations.

Kelley Thornton:

Thank you. To the twelveth of September. So just a few weeks ago, we flew down to Atlanta and hand delivered it with my partners to our 2,000,000th customer. It was excellent.

Andy Splichal:

Wow, that's awesome. Now let's start the interview. I was really curious when I was reading your profile. A Purchase Point and the last 7 seconds along a customer's path to purchase. I don't think I've ever heard of this terminology. The last 7 seconds before purchase. So what is the last 7 seconds on the path to purchase and how can a company use this?

Kelley Thornton:

Yeah, Purchase Point is a very retail focus shopper marketing company. So it's really about understanding how a consumer is thinking about making a purchase and what happens in that last 7 seconds. So what are the key drivers that's going to motivate someone to make a decision? And there's many things about it. We think of ourselves purchase Point, which is no longer a company I'm directly involved in, we think ourselves as disrupting the shopper journey. And truthfully, it's not that dissimilar from the concept of what we do at T Shanley, which is around social media, marketing, influencer marketing to engage a customer. It's the same concepts. So it is what is the right messaging, what is the right color, which is the right retail pathway that someone would take? What is the need state of a shopper at that very last second when they're making a decision that's going to either increase or decrease the likelihood of them purchasing.

Andy Splichal:

So you were doing a lot of testing around pushing the submit sale button. I mean, I guess I'm not following. How were you influencing these last 7 seconds?

Kelley Thornton:

So what specifically we're looking at is secondary placement, display systems and signage. So any store that you can pick in your imagination there are secondary and primary locations for consumer products. The primary location is the store shelf where the product is normally found. So you want to look for Tide or you're going to look for Dove Shampoo. It's in a very specific place in the store. There's also secondary placement which is usually a pay to play situation where Tide is coming out with a new variant say Tide Balls or Tide Pods. And so they are also considering that as putting that product in a secondary location in the store and that secondary location, we measure what that kind of encounter looks like through consumer product testing to see whether or not somebody is going to in fact be more or less likely to see that secondary placement and respond to it. Like what is the likelihood of a consumer actually seeing it and engaging with that product at that secondary location? And that's what we study and we do it through consumer research.

Andy Splichal:

And so the last 7 seconds before purchase is really referred to in store, not online.

Kelley Thornton:

No, it's an in store concept and I think it's very applicable to online. It is very similar to what we're seeing. Like where are people's gazes when they're looking at our site? What specifically are looking at? How long are they staying there, what's the time between home pages to PDP, pages to check out, adding to cart? I think all of those things are relatable at least with the ecommerce space.

Andy Splichal:

So are you using any of that in your new ecommerce company?

Kelley Thornton:

I think we do the same type of consumer panels and consumer testing. We don't do it in the exact same way, but we do it in a similar way. What we were doing in bricks and mortar offline is we were doing consumer panel testing prior to going into the retail. So prior to spending a lot of money and going into retail we were doing consumer product testing panels on things and we were showing them different stimulus, different messaging, different colors and we were saying what's the likelihood of you engaging with something? There's not as much of that in the ecommerce space. We will create an ad and we will test iterations of that ad and depends on the platform. We'll do multiple live ad tests and see which ones perform the best and then of course we'll iterate and spend more money on the ones that work. So I think conceptually it's very similar concept. One is more the digital space allows you to do things more real time.

Andy Splichal:

Now with Purchase Point. I mean, it looks like you were crushing it. You were working for companies. You were working companies. You had clients. Unilever. Mars wrigley pfizer. Why did you decide to step away in 2016?

Kelley Thornton:

Yeah, I'm not a gambler. But if you were given two hands, right, you're given seven cards in one hand, seven cards in the other, you kind of look at that and you say, okay, what's my likelihood of one of these hands actually performing well for me? And Siege Hanley was actually a side hustle to Purchase Point, and I was actually doing both. And the hand of Tiege Hanley was a much better scenario. And as I Got deeper and deeper into Tiege Hanley, the Ability To Scale that business, our business, our Current business, the Ability To Reach more people, the Total addressable market, everything about it Was Just A Much better hand. And I felt that was a much better play for me. So I started to unwind what I was doing at Purchase Point. It's still in existence. And there are people there running that business.

Kelley Thornton:

I'm just not involved. And then I just fully switched over in around 18 into working in TJ hanley.

Andy Splichal:

So when you launched Teach Hanley in 2016, was it?

Kelley Thornton:

We actually launched a variation of V one in 16 and it sucked and it failed.

Andy Splichal:

So I guess my question is, when you started, what ecommerce platform did you begin with? And are you still on that one?

Kelley Thornton:

No, we were on Woo and it was a very simple website. The premises of that was similar to what it is today. Educate a guy on a skincare routine. Help him understand why it's important to have healthy habits in his life and basically talk about what he needs to create good skincare. Like? What is the routine? The changes between V one and V two was that we did not own our own brand. In V one, we were selling highly curated products. And it's kind of like the Birch box kind of model where you're selling other people's products with hope of them coming back and buy those products from you. It's a bad concept.

Kelley Thornton:

I mean, it was for us. Maybe there's some people out there that are making it work. It's a bad concept for us because you could buy those products even though we were selling them in a system. You could buy those products. They were highly curated the time. Most of them you couldn't find at Amazon. Today. You can.

Kelley Thornton:

You could buy the products elsewhere. You really didn't need us. So it was bad. We decided to make our own brand, make our own formula, and we decided to switch to a subscription platform. And then we relaunched in 2017. About 910 months later. After making that decision, we launched V Two, which is its current form.

Andy Splichal:

What platform is it on?

Kelley Thornton:

It's now on shopify. We've migrated to shopify. We've been on shopify for a long time. We use Recharge as our subscription engine. We've been on Recharge very early. We got on Recharge pretty much immediately.

Andy Splichal:

And do you sell anybody else's products anymore or is purely we do not.

Kelley Thornton:

It's only tiege Hanley branded products.

Andy Splichal:

So let's talk about your business during COVID I mean, some companies they did really well, others did not, I guess. I'm curious, how was men's grooming when everybody was staying home?

Kelley Thornton:

We were great in the very beginning. I mean, we started off 2000s really good. It was a really good year. I had super high hopes for the year, and it stayed pretty solid until the beginning of Q three, which was actually four or five months. Five months into COVID, it stayed solid, and then from there, it dropped straight off. 21 was a very difficult year for us. We lost money for the first time in 2021. We've been a cash flow positive business since the beginning, and we lost money in 2021.

Kelley Thornton:

We had to take some debt. I actually had no idea how bad we really were at. I was really thinking about raising money, not because we weren't doing well, but it was just part of my trajectory that we would raise some money, and it was not a good time. I mean, I don't think Andy, anybody was thinking about taking care of themselves, taking care of their skin. What they were thinking about was taking care of their house and like, their backyard.

Andy Splichal:

Home improvement. Yeah, I know. That was crazy.

Kelley Thornton:

I mean, they were going nuts over nesting. They were taking care of themselves in other ways. They were buying pelotons and things like that, buying themselves new running shoes, but they're buying new pillows. They weren't really investing too much in their skincare.

Andy Splichal:

Now, did you find you had to pivot at all, or did you just kind of wait it out?

Kelley Thornton:

We did pivot. It was a mistake. I actually tried to go downstream a little bit and sell less expensive systems. We sell like a 44, 55, $65 system. We were monthly system. We dropped down to like a $15 kind of starter kit, and and we sold those a lot during the year. And it did keep acquisition numbers high, but it significantly suppressed AOV and our total revenues for the year.

Andy Splichal:

How much have you played with the average order value?

Kelley Thornton:

Every day. We're constantly playing with AOV. We're looking at AOV by channel, by cohorts, by platform, whether it's in App, at, you know, at Amazon or any other marketplaces. We're looking at, you know, one of.

Andy Splichal:

The best things that an e commerce company can do is to really define their avatar. How have you guys been able to do that with your customer base?

Kelley Thornton:

We did it qualitatively first, and we've done a lot of it. And so for the first couple of years, we had a brand manager and we had a researcher on staff, and we were constantly talking to our guys and really had a very good we had names for all of them, like Healthy Hank and on and on and on. And I think it was very important. I mean, it really gave us a baseline for who our customer is, what he looks like, where does he live, what activities is he involved in, what kind of music does he listen to, what kind of car is likely to drive, what's his education, all that stuff. Lately we really want to look at first party data, and we want to look at actions, the channels they come in on, the offer discount landing page kind of path to purchase that they took. And we want to look at behaviors that they did post purchase that mirror what very successful and high AOV avatars look like. So we really want to measure that and then focus on figuring out what it takes to acquire guys like them.

Andy Splichal:

So you seem really cutting edge on all your stuff, and AI is the thing that everybody's talking about in Ecom. Have you incorporated AI in anything your systems?

Kelley Thornton:

Yeah, I was at a conference last week, Andy, and I think there was a lot of talk about AI. I don't think any of it really rung very true to me. It's been around for a long time. Like back in Purchase Point, we were using natural language processing. In all of our research that I was describing earlier, we were saying, what is the sentiment score associated with someone saying XYZ? What is the sentiment score? And the association of their experience. If they use the word like versus great versus good, et cetera, et cetera, et cetera, natural language and those type of things have been around for a long time. I mean, they lend themselves into predictive text and stuff like that. So I think that's been around.

Kelley Thornton:

The reason why everybody's talking about it now is because they're seeing it on I'll say the creative side, right? They're seeing it on not only the copy side, but they're seeing it on creative development and implementation and testing of creative. We're really using it in the data side, so we're using it for predictive analysis of what is the likelihood that we're going to hit a certain number of orders next month? What is the likelihood that our churn rate is going to go up or down? What is the likelihood of our revenue coming from new acquisition versus returning? What is the likelihood of how much we're going to get out of a channel one channel versus the next? We predicted our returning sales in the month of September to 00:20 8%. So we predicted returning sales, not new sales, returning sales by zero point 28%. So in essence, we were off by a couple hundred. We're talking about tens of thousands of returning.

Andy Splichal:

That's amazing.

Kelley Thornton:

We're off by a couple of hundred.

Andy Splichal:

Now for subscription businesses. I mean, the churn is really the lifeblood. What is your churn and how have you been able to decrease it over the years?

Kelley Thornton:

Yeah, well look, measuring churn and answering a question like what is churn? There needs to be a lot of agreement into what is churn? Right? What is our retention number? What is our churn number? What is our churn number? By cohort we're breaking it down by cohort. So we're saying of the people that came in with zero discount, what is the churn rate? If people are coming in by 10% off, 20% off, 30% off, 40% off, 50%, all the way down to basically a free offer, what was their likelihood of getting to box two? So box two is like a critical number for us and it's like in the high fifty s to sixty percent range. So it depends on channel. It can go down as low as 30%, 32, 33%. So based on tech and AOV and percentage discount, we'll look at what is our minimum threshold for a box two renewal rate and that cohort needs to be able and that cohort is that number of guys that took that offer on that day, that week, that month, needs to hit that box two threshold percentage return rate. And if they don't, then we will not be spending ad dollars with that campaign. So we want to have guys come back in the 60% range to box two. Some of our channels are coming back at 68, 69, 70% of our guys are coming back.

Kelley Thornton:

Some of them are coming back even higher than that. And then we measure box one to two, two to three, three to four and so forth and so on and the curve drops off and then it flattens out. And when it stays and as it gets further and further out in box count, our retention rates are almost flat. Meaning we barely lose anybody.

Andy Splichal:

It sounds like you're doing an amazing job. One of the things that they always say that a company needs to know their numbers and the way that you are splitting out is amazing. To get that granular, what system are you using? To get that granular? What kind of reporting are you using?

Kelley Thornton:

I would like to have an even more robust CRM system but it's all homegrown and it's primarily data storage, lakes and snowflake piping in through like fivetran, going into polar analytics and then being visualized and developed through SQL database queries and through some of we used to use Tableau to visualize it all. We pretty much do all our own data pulls out of Polar and look at everything. And I really know these are pretty advanced. You have Triple Whale and North Beam and those companies that do a really good job. And if you don't have a lot of analytics chops, I think they're outstanding platforms for us. It's a lot of homegrown stuff.

Andy Splichal:

Now what advice would you give to someone who is launching their new e comm business today regarding Data or regarding.

Kelley Thornton:

Churn, what to do?

Andy Splichal:

How are you going to grow? You have a product. You know there's a demand.

Kelley Thornton:

There's one question only. Everything else doesn't matter. But this how are you going to sell your product? And show me, prove to me you can sell product. Everything else doesn't matter. Like Data, churn, rates, none of that matters. In the beginning, zero. It does not matter at all. If you can't sell product, you don't have a business.

Kelley Thornton:

So how are you going to sell product? I had an advisor in V one. Look at me. I presented the whole business plan to an advisory board. I was not seeking money, but they were all money guys. And I said to them, what do you think? And they basically said, It sucked. This is horrible. There's nothing good about it at all. And one of the guys, Joe, said to me, just beyond family and friends, just sell ten boxes and then let me know you did it.

Kelley Thornton:

And he was right. If you don't have a clear way, a clear mechanism, a clear voice in the market, a way to have a voice in the market, which is brutally hard, you've got nothing. So sell.

Andy Splichal:

Know tiege. How did you decide to get into men's skincare? I mean, that category itself much more difficult than women's skincare. At least there's not the demand there. How did you decide to get into men's skincare?

Kelley Thornton:

I thought we needed help. I thought guys needed help. I needed help. I did not understand what was going on in skincare. I didn't even realize that it was something that guys should be thinking about. I was getting older. My skin wasn't looking as good. And I was doing research at Purchase.

Kelley Thornton:

You know, when I was doing research, people are like I was in department stores and I was talking to people all around the world, and they were, like, pulling stuff out from underneath the counter and said, like, Andy, you got to try this. It's like BB Ten. It's going to do this. I was so embarrassed. I was like, Talk about fake it till you make it. I don't even know what that stuff is. I didn't say that. They're like, yeah, this is my last box.

Kelley Thornton:

That'll be gone by the end of the day. One of my best customers will come in and buy this. Just launched. And I just started thinking about it and looking into it and saw how around the world, outside of the US. How engaged guys are in this category. And truthfully, like, women have known it forever. We're just know gorilla style here in the just like, we don't realize that you can actually do things to take care of it's not just skincare. It's having healthy habits in your life and simple things.

Kelley Thornton:

Don't eat too much, get enough sleep, make sure you exercise and have healthy routines in your life. So that's how it all started.

Andy Splichal:

How big is the category growing?

Kelley Thornton:

I think they are they're saying it's like in the 1213 percent as a total grooming category. Men's skincare is probably like if you look at the Amazon numbers up 38, 40% year over year, significant massive.

Andy Splichal:

I'm trying to think there's what Anthony Logistics I've heard of or the artist Shaving. Is it getting more saturated or is it still a pretty untapped market, you think?

Kelley Thornton:

I like, look at it in grade school, right? There's a bunch of people like us that are just entering from elementary school to twelveTH to high school. There's a few of us, there's not too many of us. And when I think about that, I think of revenue in the 20 to 100 million or like 15 to 60 million, 70 million range. I think there's a few of us, not many. And I think there's like a couple of us that graduated, like the Duke Cannon of the world or every man jack, maybe Dr. Squatch that are beyond that, that have gone to next level and mainstream. And then I think there's new guys every day, every single day. I think there's new players that come in that are in the zero to whatever 5 million or 3 million range.

Kelley Thornton:

And I constantly see people leaving too that didn't make it in the last year. I've seen a lot of people fold up shop. I think there's a tremendous amount of pressure.

Andy Splichal:

And so what did you do in creating your product that separated from what else was on the market?

Kelley Thornton:

Yeah, that's interesting. In our business, there's a lot of foo foo dust. I have water and I have some interesting main ingredient, and then I put in something else like vitamin A, and then I go to market with it. Like a lot of the big consumer brands like Bulldog or these type of brands, which I think Dove makes good product, but there's nothing really special about them. They're just a lot of water and some moisturizer. And I think for us, we really spent a lot of time making products that are super efficacious. Our products are legitimately good and it's better ingredients and much higher quantity of ingredients. Our products are just expensive as hell to make, even in high quantities.

Kelley Thornton:

I mean, we're ordering 100,000 units at a time, which by the way, by standard of big corporations is like a drop in the bucket. But we have really high quality ingredients. We own our own formulas. We're constantly innovating and reformulating every three to five years. So those are the things that really separate you from the other guys. Andy, at the end of the day, guys that are trying our product, they need to see results. So if they don't think our products are working, they're gone. So we've got to have great products, just kind of an ante to play.

Andy Splichal:

And how can an interested listener learn more about working or finding your products, teach Hanley online.

Kelley Thornton:

Yeah, go check us out@teach.com. We have like 8000 reviews, I think, or over that I don't even know. Seven, eight, 9000 reviews. We have a 4.59, something like that. Amazon. All of our products are almost every product is over 4.5 stars. So 454647. We have an outstanding offer for any of your listeners@teach.com.

Kelley Thornton:

Makeeach click count. I think it's a 30% offer. It's a great offer.

Andy Splichal:

Oh, well, that's great.

Kelley Thornton:

If you want to try our products out, take a look around. We're all over social, and if it's not us, try to get yourself into a healthy skincare routine. You'll thank us for it.

Andy Splichal:

Well, this has been a lot of fun. Is there anything else you'd like to add before we wrap it up today?

Kelley Thornton:

No. I wish everybody good luck. We're going into the holiday season. We're really excited about what Q Four looks like. We're really prepared for a great close out of the year, and we're very kind of apprehensive about what the economy the macro impact on the economy looks like, but we think it should be pretty good. And then 2024 is going to be really interesting because we've got an election year and everybody knows what happens to the markets during the election. I mean, start out probably pretty strong and then kind of go quiet until everybody figures out what's going to happen in November and just very, very excited about the future.

Andy Splichal:

This is great. Well, thanks for joining us again today, Kelly.

Kelley Thornton:

Thank you, Andy.

Andy Splichal:

For listeners, remember, if you like this episode, please go to Apple podcasts and leave us an honest review. And if you're looking for more information on Kelly Ortiz Hanley, you'll find the links in the Show notes below, including the special offer for the 30% discount. In addition, if you're looking for more information on growing your business, check out our all new podcast Resource Center, available at podcast makeeachclickcount.com. We have compiled all of our different past guests by show topic and include each of their contact information. In case you would like more information on any of the services discussed during previous episodes. Well, that's it for today. Remember to stay safe, keep healthy, and happy marketing. I'll talk to you in the next episode.