Podcast Episode 148 of the Make Each Click Count Podcast features Joel Stevenson, the Vice President of Growth at Vendasta, the All-in-One Platform for Selling to Local Businesses.
Joel shares the early years of Wayfair, the challenges they faced in sustaining growth and driving repeat revenue, and how they overcome these hurdles through investing in a brand and different strategies. He emphasizes the difficulties and complexities involved in growing a business, highlighting the need for perseverance and resilience.
In this episode, Andy and Joel discuss the importance of understanding the customer and market dynamics when determining the allocation of resources and investment in customer acquisition and experience. They talk about the importance of using tools like Google Analytics in data tracking and analytics for effective decision-making in marketing and business strategies.
Episode Action Items:
To find more information about Joel, go to:
ABOUT THE HOST:
Andy Splichal is the World's Foremost Expert on Ecommerce Growth Strategies. He is the acclaimed author of the Make Each Click Count Book Series, the Founder & Managing Partner of True Online Presence and the Founder of Make Each Click Count University. Andy was named to The Best of Los Angeles Award's Most Fascinating 100 List in both 2020 and 2021.
New episodes of the Make Each Click Count Podcast, are released each Friday and can be found on Apple Podcast, iHeart Radio, iTunes, Spotify, Stitcher, Amazon Music, Google Podcasts and www.makeeachclickcount.com.
00:00 Andy Splichal Welcome to the Make Each Click Count podcast. This is your host, Andy Splichal. We are happy to welcome this week's guest to discuss this topic, which is insider secrets to scaling your e-commerce business. Today's guest is the general manager of direct brands at Vendasta, which acquired Yesware in 2022 where he was the CEO. Prior to Yesware, he built Wayfair's B2B business from scratch to 400 million in the annual revenue. He also ran Wayfair's UK business and oversaw the FP&A function as Wayfair transitioned into a publicly traded company. A big welcome to Joel Stevenson. Hi, Joel.
Joel Stevenson Great to be here. Thanks for having me.
Andy Splichal We're excited to have you. You know, let's start with talking about your experience at Wayfair. So what was the key to growing from scratch to a company with 400 million in annual revenue? And is that is it repeatable for other businesses?
00:59 Joel Stevenson Yeah, well, you know, the the whole Wayfair story is pretty interesting. And for maybe folks that don't know the early history of it, when I joined Wayfair and I joined in 2009 and the company had been around, I think, for five or six years at that point. And we at that point were this company called CSN stores. And CSN stores had hundreds of micro sites that were sort of SEM and SEO optimized. So things like, you know, I was responsible for a bunch of them that I do with home improvements. We had ones like Every Vessel Sync and CSN Tools and, you know, all this stuff. They're like those all those early, like pre, you know, pre penguin, pre panda, you know, SEO update types of website. So we had all that stuff. And we in many ways, the company, the company started because the co-founders, Nourish and Steve, saw an opportunity whereby it was a very early days of Google paid search. And there weren't as many people that were bidding on, you know, merchandise types of terms like I didn't really made it that far yet. And so what they their first foray into this was selling gadgets and that kind of a thing. And then they eventually sort of said, well, this sort of works, but this is a hard category. So they did an analysis to sort of look at what were the things that were had the most organic search and the least paid search presentation that eventually brought them to this thing called racks and stands or so. Like, you know, speaker stands and racks and all that stuff. And that took off. And so then they did the next category, which I can't remember what that was. But eventually they got into some bigger home furnishing categories like lighting and furniture was sort of the big, big unlock. And in those early days, I remember, you know, this had started to slow down by the time I got there. We were still launching categories. But in the early days, every single category just went vertical because their cost of acquisition was lower than what the customer was putting down on a credit card in the first 30 days. And because they were there in a drop ship business where we were paying vendors 30 to 60 days after we collected the money upfront with a credit card, it just went it just went vertical. And there was there were no cash flow constraints like you typically see in a business. And there just wasn't that much competition in the early days of paid search. And so it was it was just a money pump. It was incredible to look at this. Then, you know, more people enter the market. You know, it's just like classic economic theory, like everybody sort of sees that you're making an economic profit. People come in. Then then the business started to get, you know, much more difficult to grow. We were at a very significant scale at that point. And so we started to invest in other types of strategies. And one of the big strategies was, let's take all these individual websites and we'll combine them into this thing called Wayfair dot com, because we think we're going to get nailed by some of the Google updates that are coming. And we read a real hard time driving repeat revenue because somebody would buy, you know, say a light on CSN lighting dot com. They will. And, you know, we'd be like, oh, you should buy some plumbing, you know, like buy a right. Because they didn't make the connection that you have. OK, with L is CSM faucets like that kind of it just never, never really worked that well. And so we had some early prototypes where we had this thing called CSN home, where we tried to sort of bring the whole selection there. And that sort of worked. But ultimately, it took us sort of investing in a brand. And we and we when I say invested, like we spent a lot of money on national TV advertising and, you know, in addition to all the stuff that we were doing with Facebook and Google and all this sort of the direct response stuff, so huge, huge investments. And so by the time we got to the B2B business, that was more of in some ways, that was very opportunistic, because in my categories, what I saw was that we had people like electricians and plumbers and interior designers that were sort of showing up again and again in the order histories. And in the early days, like we didn't have that many orders. You could literally just scroll through them. And you just start to see some patterns. And so since I had come from more of a tech, you know, B2B background, I was like, well, let's put some account managers against us and see if a different model of serving this customer will produce better customer lifetime value. And it took us a long time to really get that right. But eventually we did get that right, where we proved that we were able to deliver more lifetime value from those customers. Then it was a question of acquisition. And so we had the benefit of Wayfair driving a lot of acquisition. So we were able to sort of run models that said like, OK, this is a good fit. This is a good fit. This is a good fit. Sort of get into the program. Then we juice that with with very effective Facebook advertising, you know, some, you know, some traditional keyword stuff. You know, we sort of flooded the zone at that point. We go to trade shows and, you know, all kinds of things to try to drive it. But we we were sort of lucky that Wayfair consumer business was really on was really on a strong trajectory. So we sort of drafted off of that and then added our own acquisition on top of it.
05:48 Andy Splichal Interesting. Well, that's a thanks for the history. I never knew that about Wayfair. How, though, I guess, what what can be taken by our listeners to replicate? I mean, I know you touched on a few different things. The customer experience, I think, for one, adapting, I guess. Where where do you see that some of the lessons can be taken?
06:10 Joel Stevenson Yeah, I think because the because the market has become so competitive, I think what we found was a sort of niche down strategy works pretty well, where like if we wanted to go acquire an interior designer, we had to be very, very specific about acquiring that interior designer. We had to have the right ad creative. We had to have the right landing pages. We had to have the right, you know, sort of then, you know, sign up experience and how to get somebody from, you know, sort of a interested buyer to an actual like all of that. Stuff was extremely tailored. And, you know, I think today where, you know, every there's a lot of really very specific sophisticated marketers that are out there. You know, you really have to start from this sort of very specialized funnel if you can, and then maybe you can build out from there at additional specialized funnels. Maybe you can start to get a little bit more general if you get good results. But but to me, it's very different from the early days where you could just throw up, you know, pretty generic keywords and set it to, you know, broad match. You might do pretty well with with that strategy. By the time we got to the B2B business, it was very, very, very, very tight, I'd say.
07:18 Andy Splichal You know, I mean, most people who start an Ecom company, they have a dream. They have a dream of scaling it to this this huge monster, selling it, moving to Tahiti, what have you. But where do you think that most companies get it wrong when trying to scale their business?
07:32 Joel Stevenson Oh, man, I mean, we probably need five hours in this, but there's so many things that, you know, there's it's difficult. It's just very difficult to scale a business. I think first off, I think people just need to understand that, like, there's, you know, it's a tough it's a tough market out there. Not say that it can't be done, but like, you know, you really have to have some fortitude. I think grid is the biggest thing. I think sometimes people give up too early on some of this stuff. But where I, you know, I think particularly for the e-commerce business is what I've observed from talking to a bunch of people over time and observing some and being an advisor to some is that you, you know, let's say maybe you start on Amazon or something like that and you're just circling an FBA vendor like all of a sudden, like something sort of catches and you're not ready for that. And then all of a sudden, it's like you went from like, oh, I do this. I have this thing. I get it on Amazon. I start to sell it. And then you go from having sort of a relatively simple set of problems of like, what am I going to what am I going to make or market or import? How am I going to put it on the site? And then how am I going to get people to show up and buy this thing? It then starts to be getting to supply chain problems. And how OK, well, now I have to figure out replenishment. I'm like, what's a good replenishment strategy? And like, how do I go and negotiate with the factories to make sure that I have good terms? And how do I make sure that this stuff shows up on time? How does it make how do I make sure that it gets into the right warehouses? And then, you know, how do I scale the other parts of the business that have to go along with it? Like, you know, how do I scale my cash flow like in my cash stars? Like, can I figure out what the networking capital cycle is and make sure that I have enough? Am I investing in the right area? So to me, it's like you start to get into this myriad set of of operational challenges that I think a lot of people start the businesses originally because, you know, what they like, the thing that they're selling or they're interested in this, like, oh, man, the world needs this thing. And that's great. But then once the world actually once you sort of meet the market where it is, now you got to figure it out, becomes, you know, sort of a spreadsheet problem, not a creative problem.
09:32 SPEAKER_01 Now, a debate that I recently had with quite a few of my different guests here, especially in 2023, is customer acquisition versus customer retention and how much of a company's resources they should be focusing on each. Where do you stand on that debate?
09:47 SPEAKER_00 Yeah, well, it depends, I think, at some level on what you're selling. I mean, if you look at the wayfair numbers over time, I think one of the challenges that they've had is they continue to have to spend a good amount of money on customer reacquisition because the home goods buying cycle is pretty long. Like, there's a study that says that I think people spend as much on furniture in the first six months of moving into new places as they do in the next six years. And so, you know, wayfairs tried things like trying to do more high frequency items, you know, like pillows and that kind of stuff. But at the end of the day, while they've made some progress, they've never really been able to get that expense down all the way. And so part of the other big investments that wayfairs made over time is in customer experience. So building out their own delivery network, you know, making sure that there's good customer service, all that and all that stuff helps. But if you were to take what we were doing with designers, for example, like we invested way more as a percentage in service because those were repeat customers and so like making a big investment and then made a lot of sense because we knew the orders were just going to sort of keep going. And so I think the first question you got to ask about where does that split happen is like what type of a category am I in? Am I in a high frequency category where there's a good lifetime value or am I in like a one time, you know, look, I'm going to get a hundred dollars from you one time and that's great because there's another hundred million people out there. I can go get that from. So it's, I think it's a little bit of like understanding your customer and your market and sort of frequency.
11:18 Andy Splichal You know, I mean, that's a great point. And it takes me to my next question, which is, you know, And what do you think of the new Google Analytics 4 that's coming?
11:30 Joel Stevenson Yeah, I mean, obviously tracking is tracking is key.
I haven't, I will admit that I haven't spent a lot of time in Google Analytics for myself, and so I'm not the best person to speak to all of the changes. But I would say that, you know, what, what we generally see in Google Analytics is, you know, you're taking all of your data, you're getting into some sort of a data mart and then you're running analytics that are sort of, you know, not just siloed into one thing. And so you understand, oh, well, you know, we acquired someone on this channel and then they ended up acting like this over time, like this was a great customer. This was a bad customer. And you can start to figure out like, oh, well, customer, you know, you know, you're not going to be able to do that. You're not going to be able to do that. You're not going to be able to do that. And you can start to figure out like, oh, well, customers that we acquire from this particular Facebook ad, we convert them like crazy, but they're terrible customers. They all turn out. Like I think that that's a level of analytics that you need to get to and to get there. You know, usually I think, you know, the Google native and face all these tools are getting better over time. But what I've where I've seen people have success is just get all your data into some kind of a data lake, get the right kind of BI tool in there or the person that can help you understand that so that you can stitch all of this data together into one into one cohesive story. That's what I've seen be successful. And there's tools like segmented on the enterprise level that can help with stuff like that.
Andy Splichal Now, what are some of the essential sales processes that you think companies should be following in today's pretty competitive markets?
Joel Stevenson Yeah. Well, you know, again, it comes a little bit down to what you're selling. You know, if you're if you're on the lower end of the market, you know, I think you want to focus on, you know, more direct response types of things where you can get somebody on the phone and the salesperson has an opportunity to close the close the sale in a single phone call or a single interaction, you know, chat or or whatever it ends up being. And so you're making sure that you have the right tech in place for, you know, call tracking and analytics would be very important in that area. If you've got a longer sales cycle, a higher dollar value item that that you're working on, then you start to get into, you know, how are you how are you managing the sales process? And so having a good CRM is important. You know, having tools like, you know, obviously, selfish or yes where that can help you manage your email follow up much more effectively. Those tools become important because that in sort of this age of, you know, a more restrained age than we were in like a couple of years ago, you don't like those leads are just precious. And so one of the things that we see is like I would call it like the cardinal sin of selling is, you know, you have an unforced error where you lose a customer because of something that you could have controlled. So something like you didn't follow up in a timely manner or you didn't follow up appropriately or you didn't you didn't sort of prepare for the call with a customer and ask it. So you didn't ask good questions like all those kinds of things you can control. Other stuff like budgets getting cut or, you know, whatever, you know, whatever somebody ends up moving and the thing that they were going to buy from you. All that stuff is sort of outside of your control. But you got to you got to make sure that you have flawless follow up, I think, is the is really the is the number one thing you got to make sure that you're doing well as a sales organization today.
14:51 Andy Splichal So what's a couple of quick wins in an e-commerce business owner could implement right away that would most likely improve their sales process?
14:59 Joel Stevenson Yeah. Well, if you've got if you've got a sales process where an individual is talking to the customer and trying to convert them into a prospect, I would highly recommend. Yes, we're a tool like a yes, we're whereby you can put a customer into an email campaign. And so you can think of it as very similar to something like, you know, MailChimp or constant contact for your company. But this is for you as an individual selling to another individual. And what ends up happening when you do that is now it becomes a personal conversation one to one. So you get the benefit of that. But then you also get the benefits of automations where you're making sure that you're following up a certain number of times. And like our data suggests that the ideal number of contacts initially with someone is six contacts over 14 days. And so in order to make sure that you're doing that effectively, you normally need some tools to sort of help you with that. And so I think that that can be a quick win for anybody. And then once you start to set those tools up, you can then get you start to get some data back and you can start to experiment. So like, oh, well, is it better? Is this subject line better than that subject line? Is it should I send three emails right away or two of this white paper that like all this stuff that you would do as a marketer, you can now do as part of an individual sales process. And I think a lot of e-commerce business owners get the marketing part because they're so they're usually understanding their Google data, their Facebook's console, like they understand. And so the sales process is that much different. But for some reason, a lot of times I think we forget that sales now can be a very quantitative exercise, since it's primarily digital and so it's all knowable. And we can treat it in a very similar way to the way we've treated marketing historically.
16:47 Andy Splichal You know, that's a that's a lot of contacts. What did you say? Six times in 14 days? Yeah, I know that from my experience, I talked to a lot of e-commerce store owners that are private clients or just come for me for consultation. And a lot of them are worried about over communicating with customers. What what would you say to to those that have that worry?
17:08 Joel Stevenson Well, I think you got to test it. I mean, I think is one thing I would say. The other thing is I think there's a question about how big is your market. And so if your market is, you know, billionaires that are buying, you know, you know, G8s or something like that, like you probably probably want to be careful about not over contacting them and burning them out. However, if your market is, you know, the 50 million people that need a sofa, you know, in the next three years, like I wouldn't worry so much about the the burnout aspect of it. Now, you don't really want to go into spam world because that can cause your deliver. Just like in marketing, your deliverability can suffer. You won't get through to folks. But I think if you've got a legitimate need that you're solving for your customer and they've especially if they've expressed some inbound interest, I don't think you should feel badly about contacting them many times across many channels over a short period of time, because, you know, people are busy. And the reality is like you might think you're bothering them. But how many people do you know that manage their inbox by it's like if they just happen to be in it and something happens to be there, they'll click it and there's another 50 messages below the fold. They actually never get dealt with. You know, it's like the number of people that actually it's probably it's funny because like the e-commerce owners more likely to be an inbox zero type of person. That's like very methodical and goes through everything. But your average customer probably isn't. And so if you just send one message, you know, our data suggests here's another kind of interesting factoid is that if you don't get a response in the first day to an email, you have a one in 20 chance of that message being responded to in the future.
Andy Splichal Interesting. What how do you feel about SMS text messaging?
Joel Stevenson You know, it can be powerful, I think, because it's sort of it's sort of an inbox that isn't as crowded as as as an email inbox these days. There aren't as you know, there's I think there's a little bit, you know, a little bit tighter regulation, not as not as many people use it. It's a little bit more of a I think it's a we've been sort of trained with this Pavlovian response to like respond immediately when we get a text, which is not necessarily the same as as an email. So used effectively, I think it can be it can be very powerful. I think the the the the the line to tread there. And I don't really have any great advice here other than, you know, if you get to spammy and text, then you either have to, you know, use one of these services where you're like you're sort of recycling the number. But if you're if you're using like your own, you know, numbers like you can very quickly get put in spam jail now and with text, just like with email. And so I think if you're if you if you're using it thoughtfully and well and sort of measuring to make sure that you're not sort of actively pissing people off, it can be a very effective method.
19:58 Andy Splichal Now, before we get into what you're doing now with the DOS, then yes, we're one of my favorite questions that are like, especially from entrepreneurs have been around a while. Have there been any business books that you can attribute to some of your success?
20:14 Joel Stevenson Well, the one that I always go back to is is David Allen's getting things done. That's just been a, you know, and I'm not a naturally super organized person. And I don't know, I don't really, you know, I sometimes and better or worse using that system, but that that's the one that that I think has provided the most value to me over a long period of time. There's a bunch of other ones that that I like for various things, but that's the that's the one that always seems to come back as a sort of cord to what I've been able to do.
20:44 Andy Splichal So let's talk now about Vendasta and Yesware. I guess let's start with Vendasta. How long has it been around and what solutions are being offered?
20:55 Joel Stevenson Yeah, Vendasta. I think it's, you know, it's well, 15 years, I think, just about 15 years old at this point. And then Vendasta provides a set of solutions for customers that are selling to small and local business. So think of like the the products that then NASA provides are things that a smaller local business might want, like reputation management or being in, you know, the various Internet directories, you know, SEM, SEO, all those types of things. And that's delivered by primarily by by digital agencies and media companies and other folks that have a large stable of small local businesses. And so Vendasta provides both the individual products that get sold on and also provides a marketplace of other products and solutions that are relevant to those businesses that can be sold and white labeled. And then they provide the tools for the agency to sort of make it look as though those are their products, deliver all those through sort of a single sign on in a single bill and then other sort of, you know, things, you know, think of think of things like CRM and email marketing automation to allow those agencies for effectively run their business on top of the Vendasta platform.
22:11 Andy Splichal How is AI going to affect and Vendasta?
22:15 Joel Stevenson Well, it's you know, it's a thing it's going to it's going to affect everybody on the on the Vendasta side. We're trying to embrace it as quickly as we can. And what, you know, one of the use cases that we've already pushed out into the product is the ability. So one of the things that we that will that will do for folks is social media management. So we either give you a tool to post yourself or we'll we'll actually do it on your behalf if you want. And so we've launched a tool that now gives you the ability to sort of use open AI to generate those those posts and responses. We will generate images, the whole thing. And and you can sort of do you can have it run through a few to sort of get to the one that you like and you can sort of tweak it. Usually it takes a little bit of human intervention to get it exactly right. But that sort of brainstorming process of like, what am I going to post or what's like we're cutting, you know, 90 percent of the time out there. And I think for for marketers, this is the first area where this is going to really come up as a major disruptive force. Because to me, the like, if you think about the sometimes think about like the bar for truth and like the bar for truth and like nuclear engineering is very high. But the bar for truth and Internet marketing is, you could argue, pretty low. And so I think the first area that we're going to see a lot of AI applications is is in some of these marketing use cases.
23:36 Andy Splichal And before Vendasta, you were running Yesware. They got purchased. What what is Yesware and is that now incorporated under the Vendasta umbrella?
23:45 Joel Stevenson Yeah, Yesware is a is a sales tool primarily used by, you know, inside sales types or anybody that's in a in a sales and marketing orientation, like, you know, as an e-commerce owner, if you've got a high high product that you're selling to individuals like that, that's the type of person that that would use. Yes, where we integrate very deeply in the inbox. So Gmail and Outlook and we help you figure out things like who's opening your emails, what types of email communications are working, send out make calendar scheduling easy, all that type of like very core sales productivity and sales enablement. And so part of the part of the thesis for the Vendasta Yesware merger is that we're going to take that core Yesware attack and we're going to embed it into the Vendasta platform. And so they already have pieces of CRM. We're going to make those way better. And so for the Vendasta customers that are in turn selling to these small local businesses, they're going to have even better tools at their disposal to now be able to win more business.
Andy Splichal And so who is the perfect client for for Vendasta and Yesware?
Joel Stevenson Well, for Vendasta, it's typically it's typically I would say the middle of the bullseye is kind of a is an agency that's large enough that you have people that are doing delivery and people that are doing sales that aren't sort of the same person because you get them to get to take advantage of some of the some of the platform features that that the Ness offers that are specific. The sales are specific to delivery. And on the on the Yesware side, you know, for us, we tend to to work best. I mean, we have plenty of individual customers that use us and very large customers. But we find teams that are big enough to get the advantage of sharing, but aren't so massive that you can sort of hard, hard, fire an army of sales enablement. Folks tend to be best. So think of companies that, you know, might have, you know, 10 to 30 salespeople in them tend to be sort of the I think the the the middle of our bullseye, if you will.
Andy Splichal And how can an interested listener learn more about working with you with the DASTA and Yesware?
Joel Stevenson Yeah, well, you you can go to Vendasta dot com, tons of resources there, particularly if you're selling to small and local business. There's a whole content community there called Conquer Local, which is great. And on the Yesware side, yes, we're dot com. If you want to learn about sales, yesware.com/blog. We've got tons of content. It's all free. We've been writing it for 10 years. You can see some of the studies that are some of the metrics that we cited here. You can find the the studies there. And, you know, if you really love sales, I also do a podcast called The Hard Sell, which you can find at Yesware.com/podcast.
26:28 Andy Splichal Well, it's been great. Is there anything else you would like to add before we wrap it up today?
26:33 Joel Stevenson No, I don't think so. I think, you know, it's it's an exciting time to be an e-commerce business owner. There's disruption all over the place. And I think it's going to be some, you know, just there has been the last five to 10 years is going to be some really big winners that emerge. It's an exciting time.
26:49 Andy Splichal Great. Well, thanks again for joining us today, Joel. Great. Thanks for having me. For listeners, remember, if you like this episode, please go to Apple Podcasts and leave us an honest review. If you're looking for more information on connecting with Joel or Vendasta, you will find the links in the show notes below. In addition, if you're looking for more information or growing your business, check out our podcast resource center available at podcast dot make each click count dot com. We have compiled all of our different past guests, but show topic included each of their contact information in case you would like more information. Any of the services I've discussed during previous episodes. Well, that's it for today. Remember to stay safe, keep healthy and happy marketing, and I will talk to you in the next episode.