A $300 Template Beat His $100,000 Shopify Store

Jay Myers: [00:00:00] Hey, everyone. Welcome to another episode of Shopify 1%. We're gonna get into it right away, but real quick, before we start, I just wanna tell some- everyone about something new that we're doing. If you go to the shopify1percent.com website right now, there's a button up at the top that says, "Submit a question," or, "Ask a question," and we're starting to take listener questions.

We've been getting a ton from email. People have been messaging me on LinkedIn and Twitter and asking questions, so I thought, "You know what? We just need to gather everyone's questions." And I don't know exactly what the cadence is gonna be, but probably once a month we'll do an episode where we just live answer everyone's questions.

So if there's any question you have, and today you'll probably have some questions that come out of this episode go ahead and just go to shopify1percent.com s- click on Ask a Question. You can type it in, or you can actually click on a little microphone and just voice record your question, leave a voice memo as well too.

So wanted to mention that before we get started, and that's my only [00:01:00] housekeeping, so let's actually get right into this episode today because I've got a really interesting guest sitting here with me. He spent over $100,000 building... I'm gonna tell a little story here, Brice, but he, I know he spent over $100,000 building a beautiful e-commerce store, beautiful design custom everything, and it completely flopped.

And then he did something that most people don't have the stomach to do. He threw it out, and he replaced it with a boring, ugly $300 template, and his conversions actually jumped, I think it was over 350% overnight, which... This guy sitting with me today, he's basically done this his whole career. Brice Macbeth has spent 30 years building, I think, one of the first web anal- analytics tools at IBM.

He's run his own multi-million dollar stores. He's the founder of Neurograph, which we're gonna get into, which is proving kind of an uncomfortable thing that most of us don't wanna know, and that's that what we think we know [00:02:00] about our customers is completely wrong, and it's actually costing us a small fortune.

So Brice, welcome to the Shopify 1% Podcast. Thank you for being here.

Brice McBeth: Yeah. Thanks for having me and definitely put me on that panel to answer some of those website questions. I'm in on that

Jay Myers: I will for sure. Yeah, I think it's gonna be a lot of fun. I'm blown away how many people... You know what I just found out? Actually, you're the first show that I have known this date on, so this episode might not go out for a couple weeks, but as of today, if you go in Google and if you search best Shopify podcasts or if you ask AI, officially the Shopify 1% podcast is the number one recommended show.

And so I think that triggered it to now people are starting to send questions in like crazy. So, anyways, that's a little bit of cause for celebration. I d- I did, as I really noticed that yesterday, so like the... Hopefully we get a lot of questions in. I know we will. So I'd actually love to start with what we just talked about in the intro there that $300 template.

You spent over [00:03:00] $100,000 on this gorgeous site, and then you ripped it out for something, quote-unquote, "ugly," and your conversions jumped 350%. What, what did that ugly one get right that the pretty one got wrong?

Brice McBeth: Oh, yeah, you-- Well, you blew the end of the story, so there's they know what's coming now. But no, I was kidding. So yeah, it's fine.

Jay Myers: to the juicy parts

Brice McBeth: No I respect it. It's all good. And you know, I will also say it also cost me some people on my team because I had designers walking out on me that wanted nothing to do with the change.

But essentially, you know, I s-somehow found myself in the industry of selling furniture to barbers and salons.

Jay Myers: Okay

Brice McBeth: I don't think I told you this, but there's more salons in the United States than there are gas stations, if you can believe it. There's like half times as many, and if you count up all the other beauty services related businesses, there's 10 times as many.

But I I became a distributor of this equipment there 'cause there was nobody else doing it online. Everybody was doing it [00:04:00] the old-fashioned way, going door to door with catalogs and taking orders and waiting for the phone to ring. So, it was just ripe for disruption. Before-- This was before Shopify could do drop shipping.

I was not the manufacturer, so I used a platform at the time called 3dCart, and,

Jay Myers: Okay. Yep

Brice McBeth: designed it up with w- You know, the idea was to make this fully immersive, like innovative design that took people like room to room, almost like an IKEA on a website, and give them ability to pick furniture out of these vignettes, which is like a super cool concept.

The website was awesome, cost a ton of money took a lot of time. It cost us also the time of getting to market 'cause it, it just took too long. And it, you know, it didn't totally tank, but it definitely did not meet our expectations. And at one point, I remember picking up the phone. I started doing the three random guys test.

This is where you call three random people, and for me, the random people were people who had built a cart but [00:05:00] never followed through on it. So that's been sitting there for like over a month And I remember calling them and just one after the other, just asking them like, "Hey, I realize you probably moved on at this point.

I'm not here to sell you. I'm just really curious, like how did you go about deciding, like where you bought your furniture, and like how was I not in the mix?" And the first guy told me that my products were too expensive. And I knew that wasn't correct because I spent a lot of time getting the pricing right.

I was the first in the industry to offer free shipping, which for a large order can be thousands of dollars. So I knew it wasn't right. So I hung up with that idiot and called the next guy, and he told me my stuff was too expensive. So I hung up with that idiot, called the next guy. He told me that my stuff was too expensive.

So you know the random guys tell you ask three people to tell you something. If they don't tell you what you want, you throw them out and go get three

more. They all told me it was too expensive. I heard it time and time again. After about ten or 11 times, I [00:06:00] remember being like there's something here."

I remember asking the next guy like, "Hey, would you mind elaborating? 'Cause I-- this is not the first time I've heard that. So can you elaborate? I was very intentional about the pricing and the offer." I literally, Jay, I heard him typing on the k-keyboard, and he says, "Oh, I don't know. It just looked expensive."

And that's when this light bulb went off in my head, and I was like, I remember this stat when I was looking up the quantity of the salons in the United States. I remember seeing also that the average stylist made somewhere in the neighborhood of 25 to $28,000. I think with the top earners making an average.

I'm sure there's plenty of people making way more than this, but and the top earners making like $45,000 a year. So like these guys are living paycheck, paycheck to paycheck, like most salons that you might think in a major metropolitan area does not represent what the typical [00:07:00] salon looks like. So if you really wanna scale your brand, you

can't be really like locked in on what you know to be true, in this case about salons and hairstylists, and not giving these guys a lot of credit for being like creative and putting a lot of stock in design and aesthetic.

And really they're sort of hair shorteners that wanted affordable for to run a business and make some money.

Jay Myers: Yeah

Brice McBeth: Yeah the template made a lot of people on my team really upset. It's not the direction they wanted to go. It didn't help their portfolio or their resume per se.

But you know what? My conversions increased, as you said, by 350%, literally in one, like over one night. So, yeah, I think there's-

Jay Myers: I just wanna get this clear. This is super interesting. So the theme was beautiful, and it looked elegant, and everything was awesome, but the perception was that it must be an expensive store because it looked high-end. The store itself the website itself looked high-end, so it d- it just [00:08:00] felt premium, and they just assumed the prices were expensive, pre- were premium as well

Brice McBeth: That's right. And I've actually run this test quite a few times with a handful of brands who are willing to see the truth, and sometimes it actually through with consumer brands or other types of e-commerce sites. But yeah, that's-- I mean, that's exactly what happened. And I will say, you know, this is before AI, so I had hired a 3D artist to render these, you know, really pretty, you know, salon businesses and rooms where we placed our furniture in it.

And I think that it was just unrelatable. These people could not see themselves in this type of room. It's like that they thought that the product and the services were more geared towards high-end salons, and they just assumed that they couldn't afford it. And that's the same-- You know, there's a lot of not to hijack your question, but it also re-reminds me of a test that I ran on my own, like agency site at one point where, you know, I had a, like a pretty small agency.

We had, like 25 people at the time. [00:09:00] And I tested the About Us page and, you know, a lot of things that you hear from marketers is "Okay, well," especially like an agency is, "Okay, well, customers wanna connect with people. They wanna work with people, not with, you know, you know, whatever."

So

Jay Myers: or the br- yeah, people connect with people, not brands per

Brice McBeth: Yeah. Yeah, thanks for the help. That's what I needed. And then, and so I remember having profiles of all of our staff members on the site, you know, their headshots and what position they were in or whatnot. And I kinda had this thought in my mind. I'm like, "What if people are making decisions w- without me knowing?"

And I just-- for whatever reason, intuition kicked in and said "I'm gonna try replacing all my staff." Not that this is about me. I do not want this to be about me. My name is not on the sign for a reason. But I'm gonna remove everybody off the About Us page. I'm gonna tell a story of why we exist and what-- and really kinda lean into our diff- [00:10:00] you know, differentiate our e- element of exclusivity, is what we call it.

And so I removed everybody's profile. I put my headshot and a story about my career and how it led me to start Reape. And our lead production off that website went up over 68%.

Jay Myers: Wow

Brice McBeth: and what I th-think I've concluded by that is, you know, I think, you know, p-part of the hypothesis I think was true.

And what that is, a big business could show up to my website, look at the staff of 25 and be like, "Oh, this agency is way too small. We're gonna crush these guys. They're not gonna be able to hang." And if I and at the same time, if a small business shows up to my website and says, "Oh, this-- They have a t-team of 25 people.

This looks like a really big team. There's no way I can afford to hire all these people. It just looks expensive." So if you don't give them the ability to make that decision before they talk to you, then you can frame it in a way that makes sense to [00:11:00] them. So sometimes you can say too much also what's kinda the other takeaway.

But a lot of people will make decisions just based on facts that they see, and you can't talk yourself out of a deal intentionally,

Jay Myers: Yeah. That's so interesting. And there's probably ways-- I do think there's value in having personalities, like faces come through, but rather than having just a list of a team page have a picture of one of your employees saying what they love about working at that agency or what they love about the creative design process or something more inspirational, but not "Here's our team," here-- like a directory.

Yeah, that's a, that's super interesting. You know what, it-- what's interesting is what you talk about with that site, that same theory applies to retail stores. If you think about the bargain grocery stores, it's always Like my kids ask "Why is that store called Save On Foods or something, or no, No Frills?"

There's a store we have close by that's called No Frills, and my like my kids are younger, they're like, "What's a f- what's frills, Dad? Why is it No Frills?" I'm like, [00:12:00] "Well, well, son, they're trying to position themself as a cheap store," and I don't know that milk is any less expensive there than it is at another grocery store,

Brice McBeth: But it sounds

Jay Myers: 100% perception and it's still probably cheaper if I go to Costco or Walmart or somewhere else, but this one particular store, it's just all yellow, nothing on the walls, you know the type of store, and it's you think you're getting a deal.

You just assume. You don't-- You probably don't go and price compare because you're at the bargain store. Where else are you gonna go price compare, right? But that's not your... It's such a good point because with websites, we always think, "Oh, it needs to look beautiful. It needs to look beautiful." But we, with retail stores, we've gotten used to there being like high-end boutiques and salon-- like or you know, salons that are high-end boutique salons and salons that are your corner of a strip mall and $10 haircut, and they-- you can just tell one's gonna be expensive even driving by.

[00:13:00] But

Brice McBeth: Yeah.

Jay Myers: to apply that to a website makes so much sense.

Brice McBeth: Yeah. Perception's reality, right? So if they

Jay Myers: Oh, 100%.

Brice McBeth: to be, But to me, my, my perception might be that's a, that's gonna be, that store's gonna offer a terrible experience, and it's gonna suck the life out of me. That's what a Walmart does to me. But so I avoid the store, and so that's my perception, and it's my reality.

I'm not doing business there. So yeah, I think that there's a lot of that. You can intend for, with the best... You have the best intentions in your heart,

Jay Myers: Yep. Yeah

Brice McBeth: what your customers perceive is their reality

Jay Myers: Yeah, and I think it's important to know that looking inexpensive does not mean you have a bad UI and UX, bad usability, a bad experience, low converting. It doesn't mean it's, quote-unquote, "ugly" in the sense of it's a bad experience. It can be an amazing experience, but s- just not feel f- premium in the sense of you're paying a premium price.

It still can be very [00:14:00] user-friendly

Brice McBeth: Yeah. So this thing I say is like brands don't go to agencies and ask for an ugly website. Nobody asks for an ugly website. They want something that's new, modern, really cool. They probably can recite other websites that they like, whether it's apple.com or, you know, w- whatever. Like they have a high-end design usually in mind.

Nobody's asking for an ugly website. But if they're really smart, wouldn't they ask for a design that kind of looks like Amazon? I would submit to you that Amazon is not one of the best designed websites, and people say it's so easy to use, and it can be easy after you've set up all your account information and subscribed to Prime.

But what you-- People don't buy from Amazon just because it's easy and it's fast. They have... I mentioned the element of exclusivity a while ago. They have this like magical combination of, like it's not even the cheapest store anymore. Like sometimes it is more expensive on Amazon, but you know you're at least not gonna get raked over the coals with pricing.[00:15:00]

You know when you're gonna get it, and you know it'll be super easy to return it if you, if, for, if anything goes wrong, you don't have to talk to anybody

Jay Myers: Amazon's almost never the cheapest, to be honest. I... If you actually price compare, like the biggest trick is you pay for your Prime membership, so you've got this sunk cost there, and because you've now paid for it, you might as well use it, and you know that you're gonna get it in one to two days.

You know that the logistics is nailed. But lately I've looked at a few things that I've bought on Amazon, and I just like-- I, I was buying some electro- it was a cordless phone actually for our cabin, and I like just looked at Best Buy, and it was like 30% less for the exact same one at Best Buy.

It was a four-unit cordless phone thing, and like I, I was blown away, and I bought... I was buying my son some Lego. Same thing. Looked at Amazon and I was like, "I'll just go check walmart.com or Lego." Like no, never not... But we we kind of are removed from the price sensitivity. And I [00:16:00] have said that to a lot of people and they just go, "Oh no, Amazon's always the cheapest."

No, it's not. But it is perceived that way versus like you would think buying it from lego.com is gonna always be more expensive. It's not. Yeah.

Brice McBeth: Yep. Man, I could do a whole keynote on that one. We'll come back to that. Yeah. You're mar- I'm gonna mark that for a future topic.

Jay Myers: Oh, I'd love to. Well, I actually, I was gonna... I wanted to touch more on this About page. You, y- 'cause I know you've talked about catching your customers hitting the About page, and then the Returns page, and then the Warranties page right before they check out, and catching that journey. I wanted to ask how does a merchant find their version of that kind of hidden path that you've, you found?

Brice McBeth: Well, I'll say not-- this is gonna be very sort of, self-promoting, but I think it's be- it's becoming more clear now with some of this data that we're collecting and and uncovering about these consumer insights. I would say before it was just a [00:17:00] matter of coming up with... You know, that's-- this is the thing, so I'm gonna give you a long answer to your short question, is

Jay Myers: like it

Brice McBeth: what's so great about the internet is everything's so marvelously measurable, right?

It's a whole Jim Stern quote from back in the day. Marvelously measurable. You can track everything. Every click, every load, every byte of data that's served up from a server where they came from, where they're going, what they did, how many times they came, how much they spent. Everything is trackable.

Okay, they're-- you're receiving emails or opening emails or clicking through on emails or converting on emails. Everything is trackable. So the problem is you know, marketers use a lot of averages to lump everybody together and figure out what people are doing, and conversion rates is like one example of that.

"Oh, our conversion rate's, you know, two point five." W- great. What what about these different pockets of people? 'Cause that could mean that you've got out of ten thousand visitors, you could have, you know, two thousand people that are converting at eight [00:18:00] percent and like another eight thousand people are converting at zero percent, and it all averages together.

Well, you could do-- be doing a lot better if you did a better job of that 80%. My numbers may be off, but actually I think I'm making my point, hopefully.

Jay Myers: Yeah, 100%.

Brice McBeth: the--

Jay Myers: there's there is no such true person as the average person, right? There

Brice McBeth: I have a story for that

Jay Myers: average.

Brice McBeth: Write that down. Come back to that 'cause I have-- I'll follow this with that story th- because that's exactly where this conversation's going, I think, if I sorry.

Jay Myers: If you could read my mind, that's where,

Brice McBeth: yeah, obviously, so I'm backlogging here. I might have to write this down 'cause my brain's backlogging and getting excited.

But everything's so ma-- So what I was saying is that everything's so marvelously measurable, and marketers tend to be not great data scientists. So they'll latch on to something and, you know, data doesn't lie, but it sure will gaslight the crap out of you, that's for sure. And then you're left to interpret what the data is saying, and this is-- So there's a point of human error here possibly.

And then [00:19:00] you kinda have to pontificate and guess as to what's gonna fix that problem. It doesn't tell you exactly what to do. It doesn't prescribe a solution. It just says, "People leave this page," or, "Bounce off this page," or, "Don't buy this product." So then you have to test through a number of different iterations to figure out what improves the conversion.

That still may not be the best possible outcome, but with-- but you're limited by your own ideas and your own interpretation of the data. So, you know, to your question, it's like before today, I felt like a lot of it was just you know, kind of guessing at what we think would improve these law of averages.

That's what I, that's what I'd say. So, what was the other one that I told you to remember? Oh, there's no average.

Jay Myers: well, I was wondering how f- finding that journey that customers are taking, 'cause you mentioned that you found that they add something to the cart, but then they would go to the About Us page, and then the Returns page, and then end up coming back. And it was like, how can you, knowing that's a journey that customers [00:20:00] take, and I'm guessing that you probably found that customers who took that journey converted at 7 or 8% versus customers who didn't go on that journey.

And then it was like, how to, how do you bake that journey into the normal journey a customer would go on? Was, is that, was that the, what you did after that or

Brice McBeth: well, and the thing is you gotta realize that l- you know, a lot of people are different, you know, another thing that marketers do and I'm a marketer, so I'm kinda throwing myself under the bus here, too. It's easy to do. But we lump everybody together and just make these sweeping comments like, "Hey, people don't like to read, so just keep it real short."

And that's not true. There are plenty-- you know, you look at Myers-Briggs or any of these personality assessments or working working styles assessments. There are people who are fact finders or deep researchers. They are paralyzed to action until they uncover the bits of information that's important to them.

And there's other people, yeah, that may scan, and they're just [00:21:00] looking for, you know, something that, you know, looks cool. Maybe it's the the lifestyle photography that resonates with them. To me, that doesn't resonate. I seldom find myself in lifestyle photography, so it's not important to me. So there are different things that move different people.

And that kinda see the persona stuff that we're gonna talk about here in a little bit. But there's-- I don't think there's a perfect way to do it. In fact, what you said a while ago about, you know, there's not really an average person, the average person doesn't exist, this perfectly illustrates that concept.

So back in the salon chair business for a second, I had my team run a bunch of numbers and come back and give me some intelligence about our customers and how we could do a better job, you know, in the-- for the remainder of the year. This is a couple years into the into our journey. And the one thing that they said that just stuck out to me that made me question everything that they put together was that our average order value was, like, nine hundred [00:22:00] dollars And I knew-- I mean, I s- I watched every order come in felt Mr.

Krab from SpongeBob Squa-SquarePants. All I did was just sit there and watch the orders come in. No, that's not what I did. I'm just joking. But I just knew that $900 was not representative of our actual customers. Something was wrong. And so I downloaded all the data ran some pivot tables, and what I discovered was there was actually two different key customer segments.

One was somebody replacing a broken chair, and that's usually in the range of three or four hundred dollars. And then there's this whole group of other people, a far minority of our purchasers, who were furnishing their entire salon. So you think about like multiple mats, multiple chairs, multiple cabinets, multiple mirrors, multiple shampoo bowls, all the things.

Those orders are like fifteen to twenty-five thousand dollars. Okay? So there's a range, but it's much different. Those are much more profitable deals. And so once we kind of realized that, could you imagine if we were [00:23:00] building creatives to target stylists that were gonna spend $900? Like I would've not done well with the replacement chairs, nor would I have done well with the furnished, fully furnished build-outs.

So-- And I'm finding now in this stage in my career with some product stuff that we're working on, that most brands are doing this also. They're making broad assumptions about who they're-- the customers that they're after, usually based on the founder's purpose of like why they started the company. That's not a-- I'm not knocking that.

You've gotta have that to get going. But once you hit a certain clip level, you've got enough customers to actually do the research and figure out what makes people move, because in many cases, there's five or six different personas on a website that all are motivated by different things.

Jay Myers: Yeah

Brice McBeth: it's not an ad word.

You're totally, you were totally correct when you said that

Jay Myers: is that what [00:24:00] led you to build Neurograph?

Brice McBeth: Yeah, it was kind of a culmination of a few things. And I will say back in the day you mentioned web analytics. You know, I was-- My first job out of college was to help the startup within IBM figure out how to figure out what people were doing on these IBM special event sites like Wimbledon and the US Open and the Country Music Awards.

And like Google Analytics didn't exist at that time. So the group that I worked with invented the single pixel tracking GIF, which is still a version of that is still used for tracking today. That was invented by a engineer

Jay Myers: team invented that, the team you worked with?

Brice McBeth: Yes. His name is Mike Nichols was the one that,

Jay Myers: That's crazy

Brice McBeth: and it was invented because it took us about 35 hours to receive 24 hours worth of web server logs from from London during the Wimble-Wimbledon tennis match.

And every day we're getting a half a day behind in processing this data and crunching all the numbers. But [00:25:00] our team was also the team that came up with a lot of nomenclature that's still used today, like page views, visits, visitors, the difference between a session, a visitor, a unique visitor, a repeat visitor.

So, I distinctly remember sitting in a room, 'cause before that it was just hits. That was it. And then we're like, "Well, you can easily drive up your hits by just throwing some more like images on this page." So we wanted to capture the essence of what is you know, a click. Well, a click's kind of a, like you're kind of reading a page, and so we had to come up with the logic for how you count that because then if you have iframes, like that could register another page view, right?

So anyway I forgot how I went down that tangent, but y-yes. What was that? Oh, what was I say- Oh, yeah, so

Jay Myers: To well, that to, to to Neurograph, yeah, the how that came to be

Brice McBeth: Yeah, so I was-- the reason I brought that up is because I always felt like, yeah, people are asking for dashboard. Their clients were asking for more and more dashboards. And my thesis at the time [00:26:00] was like, the only reason why you want dashboards is to gotta-- to understand what people are doing so you can interpret the data and then make a decision about what you're going to do tomorrow.

You're not gonna be looking in the rearview mirror forever. Like, how do you just get to the insights and recommendations? So at the time, like literally in 1997, I was experimenting with creating these ad-lib sentences in our reporting platform where I could swap out different metrics and compare and contrast like different visitors and different things that are happening on the website by systematically looking, and if it met this criteria, then include that in your summary and plug these numbers into this sentence.

So I was trying to get to the point where reporting wasn't what was important. It was what's ha- what's happening that matters. Don't make me think and just give me the answer of what I need to do to continue improving. So that's always been kinda underlying component of what I've tried to solve for.

And then, yes, this like realizing that [00:27:00] there was not an average customer, that there's actually two or three average customers was the other thing that sort of I built around. And then watching brands suffer through all this the technical and sort of evolution of these advertising platforms and how terrible ROAS is in terms of reporting back the efficacy of your ads to me-- just drove me crazy.

So I think all that kinda came together. I have two other business partners, the other co-founders that helped conceptualize this as well. But the, those were certainly the big motivators in my history that sort of fed into how we approach what we're doing.

Jay Myers: So what does Neurograph do?

Brice McBeth: Yeah. So N- Neurograph helps brands better understand their customers, that if-- in, in its most simple form.

It has become a operating system for managing persona-based marketing. So in a scenario like I described a while [00:28:00] ago, you know, most brands are facing this issue similar to what I described. If it's not exactly the same, it's very similar, where they make some assumptions about their customers. Some of it's true, some of it they may not just know it as deeply as what I can uncover.

They make assumptions about these customers. They lump everybody kinda together in one you know, as one sort of persona. Maybe they even have two, but it's based on a lot of fuzzy math not rooted in real deep data.

Jay Myers: Right

Brice McBeth: w- there's a... the operating system essentially means that there's a point of discovery where you learn more about your customers than you thought you did, and nine and a half times out of 10, I can find a new market opportunity that they didn't know even existed already on their website looking to buy, but we're saying the wrong things or selling the wrong products to them.

There's a point of inquiry and talking to, so I can create a synthetic audience based on thousands of visitors that have purchased from you, where you can interact [00:29:00] with them through an AI tool, essentially query the data or have them collaborate with you on how to build a campaign specific to d- to, to a

Jay Myers: To that audience.

Brice McBeth: to that specific audience.

Then there's a component of how we

Jay Myers: just so I, so do I understand this correctly? So say an e-commerce store, is it an app you install in your Shopify store or is it a separate tool

Brice McBeth: There's an app. We have to coordinate with you to start collecting the data. So there's an app that helps m- make the setup go a little smoothly or more smoothly. But we'll coordinate with the brand to actually ingest the data and enrich the data once we know it's coming in.

Jay Myers: Okay, so then once it's running, so then brands get a better picture of the different types of customers, and now t- is this an accurate statement? It might find that I, I sell shoes, I have one type of shoe, but I actually have four [00:30:00] very distinct different types of customers, for example. And now I can create...

What c- what can I do with that information in Neurograph?

Brice McBeth: Man, I was... So there's levels. So the way my brain is backlogging again. But so I sort of treat this in layers, kinda like an ogre. Ogres have layers. So the first layer is just better understanding so that you know who's on the site and you can start to think accordingly, right? In fact, I've talked to some restaurant brands large chains who, like I can't-- I, I'm not at a point yet where I integrate like a restaurant's data into our data set, but just knowing their customer, they're using it to inform menu selections actually store placement, like where they buy real estate to build a new store based on demographics that I'm feeding them about who's most engaged and who's setting these reservations.

And then sorry, I feel like I'm not

Jay Myers: The--

Brice McBeth: re-re-

Jay Myers: the, w- well, if I've got the four seg- Say [00:31:00] I've got, Once this identifies the segments, like I'm wondering like what is the tactical things as a operator can I can I run different c- ad campaigns, email campaigns? Like what are what are all the things that I could, I... Now, okay, I've got 'em, I've identified them, but then how is that used?

Brice McBeth: Yeah. So I mentioned-- Thank you. So there, there's layers. There's n- just general knowledge, and then the next step is, yes, informing top-of-funnel creative to better pull in your best audiences. Like I said, nine ti- nine and a half times out of ten, I'm finding cohorts of people who are more valuable than the brand thought their ICP was.

So if you know that and y- and you're trying to build a profitable, scalable company, you would lean into that new cohort even more. But you're probably gonna have to change the creative because everything to date has been self-fulfilling. So to inform your creative in its most simple form, but we're also pushing a lot of these [00:32:00] conversion and value signals back into Facebook to help guide their targeting.

You then also can, for these different campaigns directed at different personas, build different landing page or even collections pages specifically designed to curate the products that they're gonna be most interested with the right offer or the right you know, communicating the right detail that they're looking for.

Like I mentioned a while ago, some people are looking for the specifications. Other people are looking just for a little bit more

Jay Myers: Yeah

Brice McBeth: And then,

Jay Myers: And then do you send them there? So b- if you're running an email campaign or an ad campaign to the different segments, you just are sending them to the appropriate funnel on your store?

Brice McBeth: can. Absolutely can, yes. As usually recommended. But I mean, the same thing with, you know, Klaviyo pushing the personas into Klaviyo, so it's

Jay Myers: Or there, yep

Brice McBeth: based on like where they are in the purchase funnel. But could you imagine if you knew that [00:33:00] 70% of your customers did-- were happy to receive a discount, but it's not important to them.

They're willing to pay full price if you, if they know that you can satisfy their criteria.

Jay Myers: 100%. I

Brice McBeth: I could... The recipe of exactly what they're looking for without giving a discount, would you give them a discount? Pro- like we wanna take care of our customers, right? But you have a business to run.

Marketers love to give discounts to move product, but it's not always necessary. So if you knew the 60%, right now you don't know who the 60% are that don't need discounts, I can tell you. And could you imagine just sending a whole different set of creatives to those people than the ones that do need a

discount

Jay Myers: this, like my mind just kind of starts expanding here into all kinds of areas because like I think about abandoned cart emails and it's-- they're probably one of the things that you almost never need to actually offer a discount on an abandoned cart email, because m-my [00:34:00] thesis on this is like they're okay with the price.

They added it to the checkout. They got to checkout. They were willing to buy. That customer knows what the price... If they didn't like the price, they wouldn't have added it to the cart and got to checkout. But then they abandon checkout, and you send them a 10% offer because they forgot something in checkout.

But what they probably abandoned it for is they weren't sure how returns worked, or they had a question about warranty or exchanges or shipping, and they had a problem with the shipping. Maybe the shipping was too expensive. It was like anything but price is probably the reason they abandoned, but then we offer a discount.

But could you... Like I think about if we know the customer segment, we could probably even tailor the offers in the abandoned cart flows and so many other areas. Like how far-- Is it up to the merchant? I've got my segments now. How I use it is up to me, or does N-N-Neurograph plug into any tools and make some of this automated in [00:35:00] any kind of way?

Brice McBeth: Yeah. So that's for now, you know, still a pretty early stage with Neurograph specifically, but this is where my agency Reap Commerce is pivoting, is to provide services around helping getting the most valuable information out of Neurograph and then activating it, either working with the agency of record that's already doing this creative and ad placement.

I don't necessarily-- I don't need to necessarily take over that. It is-- The tool is self-service, and yes, it can provide a lot of that information, but, you know, ult-ultimately, the execution layer, you know, involves... There's-- in, in a world of all this AI novelty, there is some good stuff out there, and I think it'll get there at some point.

But, you know, Neurograph is kicking off these concepts and recommendations and prescriptions basically to go attack this market but it's still up to you to go implement it, right? So that's where my agency is pivoting, is just providing better consultancy around how to best leverage the [00:36:00] data to get better results.

And I was trying to-- I'm scrambling over here on the side to pull up, and I think I found it here. But, you know, marketers love to give discounts to move products. I said that a second ago. And I don't think they realize the impact of the business. I get-- I usually get-- I don't get calls for a pretty website.

I get calls from brands that are stuck, and they can't figure out why, and and they can't achieve profitable scale. And I'll look at it, and they're giving discounts right and left. And I've got this matrix that I built for my team that shows the math of if you have a-- let's say you had a consumer p- consumer good that ran at a 35% gross margin, and you decide to give a 20% discount. Do marketers know how much lift that you have to get in orders to make up for the profit? Not just the revenue, the profit that is lost by discounting. How much do you have to lift

Jay Myers: that's way more [00:37:00] than

Brice McBeth: It's 133%. So you're basically

Jay Myers: have a th... I was just gonna say, yeah, ' cause if your margin is only 35% and you're giving away...

Brice McBeth: Yeah

Jay Myers: Yeah, because you're actually giving away,

Brice McBeth: yeah, you're going from,

Jay Myers: You're actually giving away 57% of your... Yeah. So it's not just a 20% discount in the pr- it's a 20% discount on the price, but it's a 57% reduction in margin, and that's, I think, what isn't always top of mind when people are doing that.

Yeah

Brice McBeth: Yeah, and you think, you know, a lot-- the immediate sort of mental gymnastics where you think, "Okay, I discounted something 20%, I gotta lift the sales by 20% to get back to breakeven." That is not how the math works. Just to get to the same revenue, you'd have to lift by 25% to make up for a 20% loss. That, And then talking about profit specifically, yeah so like even if you're, you know, so if you're running even like a 50% margin [00:38:00] and you discount even 10%, you're talking about having to lift your sales by 25% to make up the difference.

I don't, you know, I don't think most, even business owners or founders even, like truly are in tune with that before they go throwing discounts around to try to earn new customers and... But

Jay Myers: What do you recommend for... Oh, sorry, go ahead

Brice McBeth: Well, just to say you know, finding those trigger points that compel people to action is

Jay Myers: Yeah.

Brice McBeth: where it's at, and that's what we're try- ultimately tr- all trying to do, but it's easier just to lower the price

Jay Myers: Do you have a best practice? What do you recommend if a brand's working with you? What do you give them as guidance for discounts? Like never run them, only run them for, you know, s- large sales on a calendar event like July 4th and Black Friday and stuff like that, but other than that, never? Or what do you, what would you say is best practice for running discounts?

Brice McBeth: Yeah. Well, so it, it depends. And yeah, there is like kind of a rubric for it, but essentially it's think about, you know, it's, it all goes back to their [00:39:00] goals. If they're gonna hold somebody accountable for profit at the end of the day, then that's not your answer. Do- discounting is not your answer.

And I would say in general the sort of the adage about like training customers to wait for a discount is absolutely true. Like it is hard to undo it when you've been doing it month over month for years. It is hard to undo discounts. You may have digging a-- You might, may have dug a hole for yourself.

But if you're early stage and you're trying to bring on new-to-brand customers through some sort of special offer or bundling or Amazon, it tends to work pretty well because it increases the velocity and sends those relevancy signals into Amazon saying that product is moving, and that's one of their big formulas for figuring out what products to start feeding into the SERPs.

And so, it kind of depends, but it starts with getting crystal and being consistent with the goal that you're after. Are we talking about new-to-brand customers? Are we talking about top-line revenue? Are we [00:40:00] talking about profit? I have clients that are all different in those categories, and so that helps inform.

I'm not here to say you should never discount. It's just there is a consequence that I think most brands are not fully aware of.

Jay Myers: Yeah. What do you think right now... So with your agency, w- Reap Commerce, did you s- is this one of the biggest things you focus on right now, like this with like optimizing personas or I know you do a lot, but is that your really kinda like the theme of right now?

Brice McBeth: this is what we're really leaning into 'cause it's so different. It's so... You know, I worked with Brinker Restaurants, you know, Chili's and Maggiano's, and I, you know, can't disclose what they, you know, exactly what they spend and how they do it. But essentially, they buy all this third-party CDP data to enrich their CRM so they can better understand their customers.

So basically buying demographic and psychographic information from third-party [00:41:00] sources. And first of all, using-- it's extremely expensive for that kind of data. It's usually a six-month IT endeavor to get that data ingested into their CRM. And then you know, interpreting the data, we're back to square one.

What I was talking about a while ago is interpreting it correctly to make good decisions. And so, you know, pulling that out of a enterprise level Salesforce Marketing Cloud is not the easiest thing for a marketer to do. So then you gotta call in a consultant to do some of that work for you. And, you know, so all this-- my point is like they don't even do it that well, to be, if I'm being honest.

If you, So but this like enterprise level data that used to be only affordable to these huge companies through our platform is now available to these like small sized companies, which is like really exciting. Like now we have

Jay Myers: Yeah

Brice McBeth: Now we, now there's affordable way to actually do what the big dogs do, but on affordable mid-market budget.

[00:42:00] So

Jay Myers: So what do you... Okay, so if I... Listeners right now probably fall in two or three categories, I wanna say. Category one is they have no concept of customer personas right now. They are marketing to all customers on their site the same. Then you maybe have another cons- category of customers who they have a dec- they know what their ICP is, they know a little bit about their customer persona.

Maybe they even have a picture on the wall of this is Sarah, and she's our ideal customer profile, and this is who we're marketing to and talking to, and our brand voice, and this is who we're built around for Sarah. And then you've got maybe super advanced brands that they actually have multiple personas, and they've got different marketing for each one.

So I'm maybe excluding th- that segment for now. But for segment one, who are... They're not doing anything right now. If I ask them, "Tell me the three persona types that are shopping on your store," they're just pulling it off the top of their head. They don't really, they don't really know. What's something they can [00:43:00] do this week to, to h- to do better with understanding personas and then using it to drive sales?

Brice McBeth: Yeah, if-- Well, if I'm not in the equation, then I would say the number one thing, get out behind, get away from your computer, stop trying to pull reports, 'cause reports will tell you, will kind of highlight what's broken, but it will not give you the answer to the riddle. I would suggest, if I'm not in the mix, to go do a three random guys test.

Do what I did about the design of the the salon equipment site, right? Go call people. Get on the phone and give them permission to give you bad news. Don't... The way you phrase the question is really important too, because I find that if you're like, "Hey, why did you buy somewhere else?

What did you like about my-- Do you like my site?" Like nobody will tell you that they don't.

Jay Myers: Yeah. Yep

Brice McBeth: you know, "What do you like about my site? What do you not like about it?" You kind of have to give them permission to give you something that you don't wanna hear. So for me, the way I was very intentional about the way I worded it, the way I told you about that a while [00:44:00] ago is I said, "I realize you've moved on, and I'm not here to sell you.

I'm curious about how you decided to go buy from that other site." And they kind of flipped it and said, "Well, you're too expensive." So I gave them the permission, and I opened, I kicked open the door for them to give me bad news, and I made it in a way that l- that they didn't have to confront me, but it-- because I made it so easy, they were able to give me the truth.

So, so I'd say the three random guys test is free. It involves a couple phone calls or, you know, a couple texts to get the call scheduled, or emails. But that qualitative data, instead of just trying to find quantitative, will many times give you the answer, not just the data points

Jay Myers: I mean, I think that's something a brand should be doing on a somewhat regular basis, not just as an emergency check now, but talking to customers regularly, it's... and bui-building way that you ask questions that you nailed it. [00:45:00] You have to be able to get the honest feedback out because we all want that customer complimenting you, but that's not the point.

The point is to learn the honesty of what you can improve and what processes can be better and, Okay, so now for the other segment of customers, merchants who they've got an ICP, they've got a little deck with their brand voice, and they know they maybe even got a little a-custom a-avatar of who this person is, and they're like, "This is who we're marketing to.

This is Price-conscious Penny." They usually have a name like that or something. What can they do to do better? This is, like, where a lot of brands fall. They probably have a persona, an avatar, a name. Actually, I love what you have on your website. I would encourage everyone to go... It's just reapcommerce.com, right?

Brice McBeth: Yeah, dreamcommerce.com

Jay Myers: So on your website, you have a persona of is it King Charles

Brice McBeth: King Charles and Ozzy

Jay Myers: and Ozzy Osbourne, who are two totally different people. But then you look at the [00:46:00] persona, it's, they're both born in, was it 1953 or '43 or something? Both--

Brice McBeth: the exact same

Jay Myers: Yeah, male, born in the same location,

Brice McBeth: That's in the gospel,

Jay Myers: income. One's King Charles, one's Ozzy Osbourne.

And totally different people, but they would fall in the same demographic, and I thought that was genius. So to these brands that are like, "Oh, we have a persona, we have an ICP, we know who we're marketing to. It's a 40 to 50-year-old stay-at-home mom who this is their income, this is this," what's one thing they can do to step that up a notch?

Brice McBeth: That, well, that's, you know, if you're not gonna make the phone calls, I'd say this is where Neurograph kicks in. And I think you know, again, I don't know another... You know, I think there are other persona tools out there that are based solely off of your purchaser data. I would submit that the people who are visiting and not buying is probably even more important than who you're doing well with, is who, knowing who you're not [00:47:00] doing well with.

So a lot of those e- entre level tools through Shopify, don't quite give you the same thing. So you gotta be cautious about that a little bit 'cause it will give you self-fulfilling, you know, data that you'll... and just going down the same path you're already in. But you know, with Neurograph and I promise this isn't just self fulfilling, I'm gonna make up for it with with some amount of services, whatever I gotta do to earn the credibility here.

But we're finding that that the ICPs that most brands are after is in fact on their website. A lot of that can be self-fulfilling prophecy. They're usually a valuable cohort, but the brand just doesn't understand that person w- A-as deep as they think that they know them. It's usually pretty high level sur-superficial profiling information.

But Neurograph will get down into the why. What-- Like, why did they come to the site? What do they think about your brand? Why [00:48:00] did they choose to buy? Why did they choose not to buy? What word-- it's amazing, like, how much word choice makes in people's buying decisions. We think about A/B tests, and it usually has to do with changing colors of buttons.

Have you ever not bought something 'cause a button was, like, green instead of blue or something? You know, maybe there is something there, but it's usually not something that's so obvious. It's like a word choice that you use. We found in one case that that a particular coho-h- cohort of high-value people were spending a crazy amount of money on s- things that had this novel aspect to it.

And there was a certain very specific word choice around prepping for parties

was really important. They were looking to host friends, and they were willing to-- They wanna impress their friends, so they're willing to spend more money for the right product or combination of products. But, you know, talking about the ease of preparation for, you know, group gatherings [00:49:00] was a really important factor with this one group.

And we stitched that together by just looking at all the pages that they-- products that they looked at but did not buy, and comparing that to the pages of products that they did buy, and comparing every last detail. This is stuff you can do with AI that a data scientist would never-- Even a data scientist, a good one, would never go look at every page that this person looked at and bought and didn't buy to compare every nuanced word choice that was used in the PDP to pick out which one triggered a purchase.

And it turns out it was a literally a three-word phrase that drove this cohort's decision to buy the product. So that's pretty amazing, right? Like-

Jay Myers: It's super interesting, and it's, 'Cause what you're ultimately doing is you're getting-- When you understand the why between why-- or behind why a customer buys, you can speak to the value or the pain point [00:50:00] or, you know, y- you... if you're selling party supplies, like in your example, and you're just talking about, like, how much stuff comes in it or the quality of it or this, whatever, versus speaking to the ease, where it's like never stress, the e- party's so easy, they set up themselves or w- like a party in a box or whatever you're s- you're actually selling something different.

You're selling a different value, and you're speaking to the, exactly to their deepest need really or pain point, and you don't know that unless you understand the customer. But when y- you can nail that, and there's sometimes when I'm on a brand site, like if I'm buying, you know, I don't know, some greens supplement or something, I'm not buying it because it's the healthiest greens in the world or I don't care if it's even the best tasting or something.

Like me, the reason why I wanna be healthy is so I can enjoy a longer, better life with my kids, right? And knowing that [00:51:00] if there's a segment of customers like that, speaking to that, like I'll convert like that, right? And so really what you're doing is you're helping brands speak directly to a customer.

Brice McBeth: Yep. And so we're-- You and I are the exact, fit in the same box as King Charles and Ozzy Osbourne. So we're very similar on paper. But in that exact scenario, I'm pre- I think I consider myself pretty healthy too, but my criteria is feeling good. A lot of times my-- for gut health I just feel like some supplements and things aggravate my stomach.

So looking for stomach sensitivity, and it's gotta taste good, 'cause if I can't get it down, it doesn't matter. I'd rather take something that's less nutritious that I can actually get down as opposed to something that's more nutritious, but I can't stomach the taste of it.

Jay Myers: Yeah. So interesting

Brice McBeth: being able to identify that with

Jay Myers: It's powerful. It's like that is powerful. That's like having a very large weapon at your fingertips to be able to deploy. And I think if, you know, [00:52:00] merchants running the stores understand that if you can deeply understand your customers, you have so much power, and it's at your fingertips to then deploy through your advertising copy, your imagery, your product descriptions, the titles, how you name things, your email marketing, and it's like you can do serious impact on your revenue numbers when you know your customers like that.

Like

It's very powerful. And I've seen the effect of it, so like I, Yeah. It's-- I mean, and if... K-okay, so why don't we-- We're a little bit over time, so I should actually feel like I could... Time always-- I say this every episode, the time goes fast. But I-- Do you have... I have four or five lightning round questions, and then I wanna tell people I know you're very polite, and you said you didn't wanna self-promote, but I think Neurograph is an amazing product, and I definitely want people to take advantage of it.

And actually, I-- you've got a special offer as well too which I wanna mention that I think listeners should definitely take advantage of. But do you have time for my five quick lightning round questions, and then we'll get into that?

Brice McBeth: here. [00:53:00] I'm here. I'm committed. Yeah, let's do it

Jay Myers: Okay. What is the first number you look at when you open a Shopify store you've never seen to see if it's healthy?

Brice McBeth: Revenue. I mean, I'm not saying that's the best. That's what you asked the question was what's your first metric that you look at?

Jay Myers: the first number. Yeah. Yeah, I mean, that's fair

Brice McBeth: revenue. Just to see what I'm dealing with. It's the most obvious metric. I would say it's the most important, but can't help myself

Jay Myers: W- What's one thing every merchant overvalues and one thing they undervalue?

Brice McBeth: Besides revenue they overvalue ROAS. Let's get out of that.

Jay Myers: Yep. Agreed

Brice McBeth: anybody out there still using ROAS, let's have a conversation. The other question was undervalue? What do

Jay Myers: something they undervalue?

Brice McBeth: Yeah, m- probably MRR. The-- just the ratio of their total spend to their total outcome. You know, it's, everybody's looking for, you know, the internet's so marvelous and measurable. Everybody's looking for a direct line between I spend a dollar and I got a $10. It [00:54:00] doesn't really work. We all know that it doesn't really work that way anymore. You know, Mr. Wrigley used to just say, "I don't know, but when I advertise gum, I sell more gum."

So you can't be like that. And I heard one of your other sort of podcasts where the guy from Handwrytten was talking about what's the value of a clean bathroom at a restaurant? That's-- that you do have to kind of look at some of these investments that way. And I think-- I find that the, probably the central determinant on whether the e-com business as a whole is healthy or not is the ratio of spend to revenue, and I measure that in three, three ways.

One is just a global across all of their channels, then one is for their marketplaces, and then one is for D2C. So, not broken down by you know, different ad channels, what group it goes together, that's omni-channel. But that gives you an indication of how healthy each platform is and then the e-com business as a whole

Jay Myers: Prettiest store you've seen that [00:55:00] probably converts terribly

Brice McBeth: We naming names? 'Cause I get calls from these

Jay Myers: Throw them under the bus. Come on

Brice McBeth: I'll say, okay, so I'll take one. I'll pick on one that calls, that calls me three-- that has called me three or four times in the last couple years and hasn't done much. Actually, I would say last time I checked on it they did really well with it.

But Poo-Pourri was notorious there for a while about o-design, over-designing the site. And I would also say their blogs were super creative and funny and engaging. They would get a million, no exaggeration, at least a million organic visitors a month to their blog straight from like Google or some other third-party link.

They're all organic, unpaid. And care to guess what the conversion of, I'll say, of sites like this, 'cause they're not, it's not unique to them. Their conversion rate or people like them is 0.00%. So there's a few fatal flaws that they were not taking a- taking care of, and it looks like last time I looked at the site, they actually did a good job of finally addressing it, so

Jay Myers: Finally changing. Wow, [00:56:00] interesting. Fastest way to learn something true about your customers for free? I think I know the answer to this.

Brice McBeth: Pick up the phone and call them. they're gonna call me, then call 15 of them.

Jay Myers: Yeah. Last one. Finish this sentence: Most Shopify brands would grow faster if they just stopped

Brice McBeth: Oh my gosh. I could have so many ways of filling this, but I'm gonna say using averages. Like it's very misleading. Data doesn't lie, but it can gaslight you, especially if you're using averages. It's the whole yellow plus blue does not equal green, like a 900-- there's no $900 d- dollar average purchaser.

There's, they're two different, so get out of using big global metrics and averages and get into specific segments that you're trying to target

Jay Myers: Makes... I love it. Okay, now tell me about Neurograph. You've got an offer you're willing to extend to our listeners. I don't know why my camera just went fuzzy, but that's fine. It's mostly ... Is it fuzzy on your end?

Brice McBeth: It is, but I can, the direction I can see where you are

Jay Myers: Yeah. [00:57:00] Okay, that is so bizarre. But anyways, what-- If you're on Spotify or Apple, you won't notice it, but YouTube you might. That is weird. But anyways, tell me about Neurograph and it... where people can go to find about it and the offer

Brice McBeth: Yeah, so any way you reach out to me, either through LinkedIn or through reapcommerce.com, which is my services based business, more of a sort of consultancy than we are an agency. Neurograph is the technology that empowers the persona stuff that we talked about. What I can do is I'm trying to get the word out there.

I'm trying to build more use cases, more succ-success stories, try to get more referrals. So in exchange for that for any brand that that comes in through the podcast and reaches out to me, I can do a complimentary persona diagnostic, and I'm-- it's guarantee-- you're guaranteed to discover something about your ICP that you didn't know before, and you're likely...

I can almost guarantee you're gonna find a new market opportunity that you knew nothing about. It happens almost every single time

Jay Myers: Amazing. And I just tried [00:58:00] switching cameras and it still won't work, so we'll just leave it. That's fine. Is there what does someone have to do to get that? Is there a link that I can add in the show notes or s- somewhere they need to go, or where should we direct them?

Brice McBeth: Yeah, keep it simple. Probably the best thing to do is to go to reidcommerce.com. So that's my s- services company, and there's several links to schedule a consult-consultation or to request a diagnostic. So you can follow any of those to schedule some time directly on my calendar, and that's the best way to get it going.

So I'm happy to also connect on LinkedIn or any other way that you can find to reach out to me.

Jay Myers: Awesome. Brice, this has been absolutely amazing. I've learned a lot. I know our listeners did too. Thank you so much for taking the time to come on today