In this episode, host Josh interviews Jeff Campbell, a digital marketing expert and co-founder of AI Commerce. They discuss effective strategies for e-commerce sellers on platforms like Amazon and Walmart, focusing on increasing repeat purchases, leveraging first-party data, and tracking key metrics such as ROAS, CPC, and customer lifetime value. Jeff emphasizes the importance of consistent data analysis, understanding break-even points, and balancing efficiency with growth. He shares practical examples and actionable tips for optimizing advertising spend and expanding sales channels, providing valuable insights for both new and experienced e-commerce entrepreneurs.

Chapters:

Introduction to Jeff Campbell and AI Commerce (00:00:00)
Josh introduces Jeff Campbell, his background, and AI Commerce’s focus on e-commerce marketplaces.

Strategies to Increase Repeat Purchases (00:00:32)
Jeff discusses the importance of first-party data, email collection, and retargeting to drive repeat sales.

Key Metrics and KPIs for E-commerce Sellers (00:02:49)
Discussion on tracking impressions, clicks, CPC, CPO, customer acquisition cost, LTV, and the relationship between paid and organic sales.

Tools and Frequency for Data Tracking (00:04:26)
Jeff recommends using Excel or dashboards, and emphasizes daily tracking with monthly/quarterly insights.

Competitive Strategies and Market Trends (00:05:26)
Explains aggressive spending strategies, increased competition, and the need to monitor KPIs closely.

Balancing Volume and Efficiency Metrics (00:06:17)
Jeff highlights the importance of balancing sales volume and efficiency (Roas), and avoiding analysis paralysis.

Identifying the Two Most Important Metrics (00:07:17)
Focus on breakeven Roas and sales volume as the primary metrics for most sellers.

Importance of Long-Term Data Trends (00:07:58)
Josh and Jeff discuss not overreacting to short-term data, but focusing on monthly and quarterly trends.

Case Study: Food Brand and Revenue Formula (00:09:05)
Jeff shares a food brand example, explaining the revenue formula: traffic x AOV x conversion rate.

Optimizing Traffic Sources and Channel Diversification (00:10:23)
Describes switching to Walmart for cheaper CPCs and the impact on overall revenue.

Using Data for Dayparting and Efficiency (00:11:31)
Jeff explains using conversion and CPC data by hour/day to optimize ad spend and efficiency.

Three Actionable Takeaways for E-commerce Sellers (00:12:32)
Josh summarizes: know your numbers, review metrics monthly/quarterly, and expand channels only after mastering the basics.

Closing and Contact Information (00:15:23)
Jeff shares how listeners can contact him and learn more about AI Commerce.

Links and Mentions:

Tools and Websites 
“AI Commerce“: “00:00:31”
“Excel“: “00:04:26”
“Google Sheets“: “00:04:26”

Key Concepts and Metrics 
“First Party Data”: “00:01:14”
“Cost Per Order (CPO)”: “00:03:22”
“Return on Ad Spend (ROAS)”: “00:04:26”
“Average Order Value (AOV)”: “00:10:23”
“Conversion Rate”: “00:10:23”

Transcript:

Josh 00:00:00  Now. I’m super excited to introduce you all to Jeff Campbell. Jeff is a digital marketing veteran and e-commerce entrepreneur and professor at Wake Forest University. His strategic vision and operational approach have led multiple successful business acquisitions and exits. Jeff currently leads AI Commerce, a global digital agency focused on marketplaces and e-commerce, which he co-founded in 2020. So with that introduction, welcome to the show, Jeff.

Jeff 00:00:31  Thanks for having me, Josh. I’m excited.

Josh 00:00:32  What is there anything that you’ve done with your agency or with previous experience to really start turning a business that the average order for? I guess the average number of orders per customer, instead of it being one, you start increasing it to 2 to 3 because that’s where you start to get this flywheel of, all right, I can spend I could even spend more to acquire this customer that it’s not even break even. I’m losing money on the front end, but I make it up in the long in the long run. So are there any strategies or advice you would share to our listeners in order to help get those second, third, fourth sales and repeat purchases?

Jeff 00:01:14  Yeah, I can’t stress enough how important first party data is, specifically email addresses.

Jeff 00:01:19  So if you can get them to your website to somehow register a product or an, you know, there’s some rules with Amazon, you know how how you can get information, what you can stick in the box, etc. but, figure that out because I think that first party data is going to be so crucial for brand owners in the future for targeting as as privacy laws will hopefully come out soon. And, and, and the data sharing of of the platforms are probably going to stay heavily with the platform. So, here and now, rant over about one p data. You know, Amazon and most of these platforms have some sort of retargeting, right. So if you know that you’re you’re hawking air filters and they go out every three months and you need a replacement. Use your email database if you have it, use some of the the first party data of your platforms. Be it Amazon or Walmart. A lot of that does take some DSP work, which comes with a higher price tag. But retargeting is one strong, strong way to to remind people about the previous purchase and time to to repurchase.

Jeff 00:02:24  I think that’s probably the big one. Again, the email relationship and again, having first party data to be able to do that and then from there create and lookalike models. Right. So understanding the behaviors of those folks and starting to target people, to make maybe their first purchase because they look a lot, a lot like or they act and behave like, past purchasers of yours too. Works really well for that initial. And then you can retarget them as well.

Josh 00:02:49  Yeah, it makes great sense. I love that now, Jeff. I would love to dive in further into these profitability or just overall metrics that people should be tracking that become those mile markers that lead to scale. And let’s dive deep into what each of those, you know, metrics mean and how, you know, let’s say take an an Amazon e-commerce seller today, how they should be tracking them now, and maybe some of the tools they should be using to make sure that they’re setting up the correct foundation.

Jeff 00:03:20  Sure, sure.

Jeff 00:03:22  so, you know, I, I’d really look at making sure you are tracking the standard, you know, impressions, clicks, click through rate, you know, cost, CPC, etc.. we always want to look at that variability as CPC. That’s really important. some, some of the other ones, the new to brand metrics where you can get them, the cost per orders and kind of go into that customer acquisition cost and LTV. so CPO cost per order is, is important. and then as we as we know, especially with Amazon and some of the other marketplaces are starting to do this. The reliance and relationship between paid and organic. The more you pay to get some keyword wins, the more you’re going to see yourself organic. So you have to compile some of those sales from both paid and organic channels against the cost of the advertising, because there is a relationship there. So looking at that total Roas or that total ACOs or tacos, as the hungry people like to say is important as well.

Jeff 00:04:26  yeah. So I think those are the main ones in terms of technology. There’s nothing wrong with good old Excel, right? Get your pivot table skills rocking. be able to download and import. You can get fancy with some APIs and automations and some real cool reports and some BI dashboards. But don’t be ashamed of just using Excel or Google Sheets. Right, I still do, almost on a daily basis. have some great macros that I can download and a It customizes and beautify some of that data immediately, but you need to be looking a lot of that data, you know, daily. But then really the insights and actions need to come monthly and quarterly. So make sure the time frame you’re looking at the cups of data and looking at it, you know, year over year and week over week or quarter over quarter year, you know, whatever it might be are all there. Because I think those long term mix with short term trends are all important. I’ve seen way too many people overreact on a short view of that data.

Jeff 00:05:26  where many times a competitive strategy could be is I’m going to I’m going to come big, spend a ton of money, lose it, but I’m going to basically buy out my competitors because I know they can’t withstand, you know, paying this for a month, right. And they’re gone. And then month two is extremely profitable. And by month three they’ve made up all that money. So again, to kind of look at some of those longer term trends as well. And we are, I think, seeing more traditional, larger offline advertisers come into the space. and I know Amazon and other platforms are making it really easy for, you know, the auto or insurers and banks to come in and advertise here too, because there are eyeballs of some of those consumers and there are some behaviors you can target against that’s relevant, even though they’re not really in the e-commerce game. So competition is going to get fierce. And to your point, that’s why we’re making sure we’re watching those, those KPIs very closely.

Jeff 00:06:17  One one other point I’ll also make, and I see it as a common mistake. So you heard earlier the majority of of of of brands don’t know their break even, which is somewhat mind blowing. Why do you want a $6 row as well? Because it was five and we want better. Well okay. Like that volume and efficiency relationship is kind of the second thing that a lot of people miss. And you always need to have a counterbalance, right. So if your focus is efficiency then you have volume. which might be sales and Roas is your efficiency as a counterbalance because there are so many metrics, we can track that so many times. Well, hey, my click, the rates are down. Does that matter? Right? Like, well, you know, we’re using a little more display, a little less search. That’s going to happen. But it’s relevant customer. It’s a relevant keyword. You know CPCs are up. Okay. That might matter. but again figure out what your main volume and your main efficiency and then kind of the relationship between the two.

Jeff 00:07:17  Do you want efficiency first and then volume. Do you want volume first then efficiency. That’s you know, analysis paralysis is some people say there’s just too many metrics out there. Boil it down to the two. Most important, is another another key takeaway.

Josh 00:07:31  And those two most important would be your breakeven Roas. Correct. And then what else.

Jeff 00:07:37  Then sales. Sales volume. so that’s that’s what the majority of folks are out there working with. But again, that’s, that’s not looking at, customer acquisition and lifetime value and repeat purchases. So again the majority of people are performance channel. I need a sale and I need a profitable sale. It’s Roas and revenue.

Josh 00:07:58  Okay. Makes a lot of sense now Jeff. I love that you mentioned as you’re tracking these metrics, even if it’s just an Excel that you’re not, you don’t pigeonhole yourself to where you’re only looking at, oh, well, this happened yesterday. So I’m completely changing directions and doing this. You’re looking at things over a monthly or quarterly trend.

Josh 00:08:19  I’m curious, do any case studies or examples come to mind? just to give our listeners some perspective of, hey, in this brand and we don’t have to share brand names, but in this particular brand, we saw that our, you know, CPCs were shooting through the roof for whatever reason. And so we had to this was our strategy that we implemented or we were losing impressions. And these are some of the actions that we took.

Jeff 00:08:44  Yeah. and so you’re asking about like what type of actions or just scenarios.

Josh 00:08:49  Yeah, just maybe some scenarios and maybe. Case studies, I don’t know. Like practical examples that you’ve seen that if you’re not looking at data right and you’re not looking at these KPIs, you’re kind of missing the mark in terms of what you should be working on in your business.

Jeff 00:09:05  Right. Right. Yeah. With a, with a, a food brand right now. we’re struggling a little bit because I think we’re over focused on Roas right now. And again, if it’s good food and people would make a repeat purchase.

Jeff 00:09:19  You know, maybe we need to look a little beyond Roas. But as we look at the the keywords of that, that directly describe what they’re selling. they’re not they’re not affordable for the AOV and the, and the conversion rate that we’re getting. So, let me back up. This is another important point for listeners is it’s an age old retail formula, and it works offline and started offline. And kind of most people have brought it online. But it’s you know, the sales revenue formula is revenue equals traffic times AOV times conversion rate. So you know online I can control traffic AOV and conversion rate. And so we know from conversion rate there’s ways from you know improving the price to you know better reviews, better titles descriptions. That’s all going to help from an AOV. We can bundle we can increase our price etc.. And from traffic we have all sorts of keywords and displays and targeting and even different channels and, and whatnot that we can, we can work with. So when you back up, those are the three things that we really need to think about.

Jeff 00:10:23  And so back to the example of the food brand. Those CPCs were too high three and $4 and the AOV was only $10. So we had to have almost a 50% conversion rate to make it work. So, you know, our choice if we can improve AOV or conversion rate, we need to find cheaper traffic sources. And and that’s one example where Walmart was was a savior and it came in and it was about a third of the price in CPCs. And you added that traffic into that equation with everything else being constant. We were able to make it work. Right. So again, going back to like know your most important KPIs and keep keep an idea of those three levers traffic, AOV and conversion rate as what you are going to control the most to have the outcome of of better revenue.

Josh 00:11:09  I love that. I think that is such a good example that you just shared there of, you know, taking a look and seeing, hey, my CPCs are getting high. My Roas, it’s not efficient.

Josh 00:11:20  What do I do? Right. And then that led to the conversation. How do I drive cheaper traffic? Right. Are there any other case studies or examples that come to your mind like that?

Jeff 00:11:31  yeah. I’m trying to think through some other optimizations. You know, I mentioned, I mentioned earlier the new data that Amazon provides and again, something that Google and others have provided for many years is, is understanding your conversion rates and your CPCs by hour of the day, right? And use day party again. Unfortunately for Amazon, it doesn’t let you day part the native platforms in Facebook or Meta and Google. They all let you depart now. So I can now understand that at night when I didn’t think people were shopping or on the weekends or Fridays before a weekend is when the Gittins good, right? Conversion rates are highest. I can realize that CPCs actually drop off later in the day because again Amazon’s a great example. They don’t spread your budget across the day very well. So people run out by noon or by 8 p.m..

Jeff 00:12:16  And and then I’ve got less competition at night. Conversion rates hold. I’m still pretty good. So those are a few other uses of data and technology we certainly employ with a lot of our brands and partners that we work with, that that help returns quite a bit efficiency quite a bit.

Josh 00:12:32  Yeah. Make makes a lot of sense. Now, Jeff, I love to leave our audience with three actionable takeaways from each episode. Here are the three that I noted, but let me know if you think I’m missing something? Action item number one I’m going to say is no. Your numbers. If you’re not tracking your numbers right now, even if it’s as simple as Excel right now. And I know Amazon has their business reports, but you’ve got to interpret those business reports and actually create some KPIs that are going to mean something to you and your business that you can make decisions around. So first and foremost would be understand your numbers. That’s a whole podcast conversation in and of itself of how to do that pivot tables.

Josh 00:13:19  But there’s a lot of resources available out there. Action item number two would be implementing a quarterly or monthly review of these numbers that you are tracking. Because just because you’re tracking these things, and you might be taking a glance at them every day. And, you know, I think here’s the thing that I hear the most about Amazon sellers is they’ve got their seller app on their phone and they love refreshing. They love refreshing and just saying, oh, today’s a good day. Today’s a good day. That’s not important. What you need to do is at the end of the month, what how do I measure my data against my KPIs? And then like the example that you shared with the food in the grocery space, you need to be able to interpret, hey, our CPCs are too high. All we need to do with this equation is like, can we find a cheaper channel? And then that’s going to shift your entire business strategy and it could lead to better decisions. Instead of constantly being on this hamster wheel of trying to push a rock uphill, and it keeps coming back down because you’re not working on the things that are actually driving the biggest results.

Josh 00:14:28  Correct? Yep.

Jeff 00:14:29  Beautiful. Great. Veterans health.

Josh 00:14:31  Yeah. Good. Good action. Item number three I think is once you’ve established those, you know, financial your metrics tracking and then implementing those monthly quarterly reviews. Then last but not least, then implementing this outward approach of Kate. Now, how do I expand? Maybe my channels, my and my distribution? Because if you don’t understand the basics and the ROI of your ads and all of that good stuff to begin with, you’re just making the problem more complicated as soon as you expand on different channels. So those are my three action items for our listeners. Geoff. Well, Geoff, this has been a fantastic conversation. People want to learn more. They want to reach out to you, want to see what AI commerce is all about, and maybe utilize your guys’s services to expand their marketplaces. Where can people find you?

Jeff 00:15:23  Yeah, you can hit me up directly, Jeff at AI commerce.com or hit our website at AI commerce.com and let them know Josh sent you.

Josh 00:15:32  Awesome. Jeff, thank you so much for your time today and sharing your knowledge with us.

Jeff 00:15:36  I love it. Happy to educate anytime. Take care. Josh.