secrets to scale

Secrets To Scale Podcast
004 - How eCommerce Stores Can Grow Their Revenue By 20-30% By Focusing On Retention Marketing

004 – How eCommerce Stores Can Grow Their Revenue By 20-30% By Focusing On Retention Marketing

Secrets To Scale is a marketing and entrepreneurship podcast that revolves around hearing the stories of successful entrepreneurs and uncovering their secrets to scaling their businesses. Music for every episode of this podcast was written and produced by Treycen Clausse.

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Tanner:

This week on the show, I have Daniel Budai. He is the founder of Budai Media out of Budapest, Hungary. Daniel is an expert in retention marketing, and we’re going to talk all about how eCommerce stores can grow the revenue by about 20 to 30%, just by retargeting their existing customer base with emails, texts and Facebook messenger. Daniel is a really awesome guy. I really hope you guys enjoy this week’s episode. Welcome to the show Daniel. I’m super excited to have you go ahead and introduce yourself to the audience. Let us know who you are and what you do.

Daniel:

Hey, Tanner, it’s amazing to be here. Thanks. Thank you for the invite. And basically I’m from a little country in Europe called Hungary. My agency, my small team and myself, we do email marketing and retention marketing for eCommerce stores, mostly in North America and Europe.

Tanner:

Very cool. Very cool. How’d you get started in retention marketing? And have you always been working in marketing or did you kinda fall into it, like most people?

Daniel:

Yeah, exactly. The second. You know, I studied geology, petrol in geology, at the university, so it’s a very different background, natural sciences, physics, maths, chemistry. I finished my master’s degree and actually the oil prices dropped. I couldn’t find a job. And after I just looked around what I could do, you know, something, you know, not just to make money, but to enjoy it as well. I just found Upwork and copywriting and I started there and after a while I just built my team and we became an agency.

Tanner:

Very cool. Yeah. That’s really interesting that your career started off that way. It’s always interesting to hear how everyone gets started in the agency space. So going back to when you first started, was it just you?

Daniel:

Yeah, kinda, or my flat mates. I had a few friends, two of them were my flat mates and they were in a very similar situation. They wanted to quit their nine to five, or they even studied at the uni and they just wanted to find something which is flexible. That they could still make good money. So we just started out in marketing. But that was the very beginning and we were freelancers back then. So it’s, it was a one man show. And this is how we got started.

You should always think about what activity represents higher value.

Tanner:

So how did you go about getting your first few clients? And can you kind of give us an idea of what that was like and what obstacles you faced and kind of the timeline and how you started growing?

Daniel:

Sure. So I started out on Africa. I found a guy, he’s named Alexandre Witkin. I found this guy, he has a mastermind and he told that, you should go to Africa and find your first clients. It’s relatively easy because those businesses they look for freelancers. So I just ran there and I started sending proposals. I sent a lot, I remember my English was much worse than today and yeah, I send a lot of proposals. I had calls and after a while I just got my first gigs, like 20 bucks, 50 bucks, 100 bucks. And after a while higher and higher amounts. And I could hire someone and I hired a copywriter because I knew that might be I’m good with copy, but I’m not a native speaker. I have my weaknesses. And I was not really interested in the English language practice. I was more interested in the building a business part.

So I hired a copywriter. He’s still with me in the team and I just did the sales and my marketing myself. He delivered the work. And after a while, I thought what is the higher value activity? And I realized that creating the strategies, it really presents higher value than just copywriting. So I hired a designer, I hired technical expert and we created the whole email strategy for the stores, not just the copy and we could charge much more then and just recently we became a retention marketing agency. So we added SMS messenger, push notifications, loyalty programs. Now we are working on CRO as a service and we are just charging more and more amounts from one single client. I think this you should always think about what activity represents higher value. Your hourly rate will triple or even more, if you can change that. I think that’s a good concept. And today we are 11 people. After four years, we have almost 20 clients now. And yeah, I think after a while we will become a full-service econ agency in one, two years, we will see.

Tanner:

Yeah, I think you’re doing it the right way. I think most agency owners, when they start their agency, they start off with that full service approach, which is the very big mistake. Just because they see all these other agencies out there and that’s what they’re doing. So they’re like, “Oh, I’m just going to copy what they’re doing.” And I’m guilty of that myself, but it didn’t take me very long to realize that it was literally impossible.

Daniel:

Yeah. You cannot do everything.

Tanner:

Yeah. I mean if you’re focusing on too many service offerings, then your time is not focused on specializing in those services. Right? You’re just decent at all of them instead of really good at some.

They already have them as a customer. They’re just trying to get them to come back.

Tanner:

Let’s talk about retention marketing. You’re a retention marketing agency. Can you give us an idea of what that is and how do these eCommerce businesses benefit from it?

Daniel:

Yeah. Great question. So let’s say there is an eCommerce business. They already figured out some good products. They already figured out traffic. They have some traffic, at least. So they are not at ground zero. And after that, we can help them with this retention marketing. If they already have their first customers coming in, we can help them to retarget them with emails, SMS messenger, with different channels. But the point is we retarget them and we get extra sales, more returning customers. And it’s great because they can increase their revenue by 20, 30, 40%, but even better, they don’t spend the extra money for the ads. They get extra sales without spending on ads. So the revenue will increase by 20, 30%, but the profit many times it doubles or even more because they don’t have to spend on ads to get more sales. I think that’s the main promise.

Tanner:

Yeah. And that makes sense. They already have them as a customer. They’re just trying to get them to come back.

Daniel:

Exactly. Yeah, yeah. Yeah.

There is no channel which works for everyone, of course. But I think email is probably the most stable from all of these channels.

Tanner:

So what kind of planning goes into implementing a retention marketing campaign?

Daniel:

Okay. So let’s say that it’s an eCommerce brand. They don’t have anything like this and let’s make a plan for them. How would I do it? So probably I would start with email automations because you have to set it up only once and they work forever and they generate quite good money, like extra 10, even maybe 20% revenue with a one-time setup. Once it’s done, I would add. I will start sending campaigns to the email list that you have, but it requires on-going work. And after I would add more channels; SMS messenger, push notifications, that adds an extra five, 10%. And, you know, by the end of the day, everything adds up basically. And you will be happy.

Tanner:

Yeah. I mean, it’s always a good idea to blitz the market, focus on every channel that actually works for you. Do you find that all of these channels work for every type of ecommerce business or is it kind of some industries SMS works for, some industries it doesn’t – and same thing with email?

Daniel:

Yeah. It’s a very good question. And I think, you know, there is no channel which works for everyone, of course. But I think email is probably the most stable from all of these channels, because almost everyone has an email. People send emails, even millennials, they read emails and the email usually works for like 90% of businesses. Sometimes it doesn’t. But yeah, it usually works and every time they can see at least an extra 10, 15%, even in the worst cases. For the best ones, they have half of their revenue from email. So, these are the numbers. It’s very stable. I would say SMS and messenger it’s less stable or less reliable. Especially messenger. Old people, they don’t read it much. They just don’t like the promotions, push notifications, it doesn’t work. For iPhones, for example, and in certain countries it has its own limitations. Yeah. So overall email is very stable. It works for almost every store. SMS, messenger, it’s less reliable, I would say. And other ways it must be tested and you will see. Yeah.

Tanner:

So, I mean, if your target demographic aligns with someone that’s using Facebook messenger a lot, I bet you see really, really high open rates. Right. Because everyone reads their Facebook messages, right?

Daniel:

Yeah. We just, we have a client, he sells arts, art products and now we turned off a few email flows. The best email flows and replaced them by messenger flows because they were so, so much better.

You have only one magic trick and that’s your business. You should have more tricks.

Tanner:

So if anyone listening owns an eCommerce store, what’s one piece of advice you could give to them aside from just getting traffic. That’s a beast in itself, but if they already have a pool of customers, how, how should they get started in retargeting those customers?

Daniel:

Good question. So, if you don’t have anything in terms of retention marketing, basically you are a one – what’s the word for this? The phrase for this – you have only one magic or one trick and that’s your business. You should have more tricks. You should have, not just your Facebook ads and website, you should have email list, messenger, SMS, maybe a loyalty program. You should have more tricks in your books. I think if you don’t have these yet, you should look into these. Start setting up a few email automations, you will see the results very fast. You should set up a few popups to get more subscribers. You will see the results, I think quite quickly.

Tanner:

You know, I think that a lot of businesses are missing out on how valuable building up an email list is. And even when they do start building it, I think they wait way too long. I think even if you’re not sending broadcast to that audience, it’s still good to have that list.

Daniel:

Yeah, exactly.

Tanner:

What are some tools that you would recommend for retention marketing?

Daniel:

So, for email marketing if you are an eCommerce: Klayvio. It’s amazing how much they grew in the last few years. If you don’t have the budget, because it’s expensive, you can still start out with the MailChimp. It’s good. It’s very good as a start starting point. For messenger: ManyChat or Ricart. I prefer Ricart, it’s only for eCommerce and it’s commission-based pricing so it’s a win-win. For SMS, I prefer SMSBump. It’s a good tool. So, I would go with these three.

You should know what you want. You will figure this out by time.

Tanner:

Cool. So what would you say your secrets to scale are?

Daniel:

I have to think about it. There are many things, but I try to keep it simple. First one would be, you should know what you want, and I know it’s hard. You will figure this out by time. You will get a lot of feedback from clients, from your family or friends, your network, and you will figure it out. Figure it out in time. So don’t try to overthink stuff and overcomplicate things, just always focus on today. And I think at the beginning, you shouldn’t plan too much ahead because you are still new in this business. And we should focus on doing good work and being open to feedback. And the other thing is be very proactive and always come up with new, innovative ideas. I realize it every – almost every day, again and again, that clients, they really appreciate it – good clients. Bad clients: they want to keep you as a, almost like a slave, a monkey see monkey do. But good clients: they want to give you free hands. And they really appreciate if you are proactive, you come up with ideas, you always think about new testing ideas. So be innovative, proactive and after a while you will see the results of that.

Tanner:

Yeah, yeah, yeah. I really agree with you there. What separates a good and a bad client is what I like to call just being partner with those clients. Right? Because good clients want to partner with an agency, whereas bad clients just want to tell an agency what to do, which is the absolute wrong approach. Because that just means that they don’t trust you or they don’t care about your ideas. Why are they hiring you in the first place, right? Or they, or they treat like you’re one of their employees.

Daniel:

Yeah, exactly. And I even tell them that, if I feel that this potential client treats me like an employee, then I just tell them that probably you should hire an employee, not an agency.

Tanner:

Yeah. It’ll probably cost them more to do that though.

Daniel:

Yeah. Probably it’s just a different type of relationship.

Tanner:

Yeah. I mean, I personally stay away from people like that. I’m sure you do too. I think they’re just, it’s just a toxic relationship. Where you just start to feel like you don’t feel like the respect is there and it’s really hard to produce any results when you don’t have the freedom. And I’m sure your clients gave you that freedom. Because you’re going to say, okay, here’s our plan. We’re going to test it. And then we’re going to tell you what the results are and if they like it, they’re going to be alright to keep doing what you’re doing. We don’t care what you’re doing as long as it’s working.

Daniel:

Yeah, it depends on the client. Sometimes bigger clients, they also micromanage more because they have a very solid brand and a very strict guideline. There are pros and cons, but yeah, I think overall good clients, they don’t micromanage. They trust you.

Tanner:

Yeah. As long as you’re doing good work. And that’s obviously a factor here.

Don’t try to sell something that you are not proud of.

Tanner:

Daniel, I really appreciate you taking the time. Is there anything that I have not asked you that you think might benefit the audience?

Daniel:

Yeah. I always like to rephrase it or repeat it. Don’t sell bad products. If you are in eCommerce, sell something that you would recommend to your friends and family. Don’t try to sell something that you are not proud of.

Tanner:

Yeah. I think a lot of people are selling really bad products because all they want to do is drop ship and they don’t really care. They just want to make money. They don’t care about building a business out of it.

What’s a good way for everyone listening to get in contact with you, Daniel?

Daniel:

Yeah. So check out our website. It’s thebudaimedia.com. Should I spell it?

Tanner:

No, don’t worry about that. We’ll link it up in the show notes.

Daniel:

Okay. And just find me on LinkedIn or Facebook: Daniel Budai. Yeah, you will find me and just send me a DM and I will reply.

Tanner:

Very cool. Well, I really appreciate it, Daniel.

Daniel:

Yeah. Thank you, Tanner. I really enjoyed it. Take care.

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