243: Scale Your eCommerce Portal with Ethan Giffin

23
Sep

Ethan Giffin, Founder and CEO of Groove Commerce, is driven by a passion to help businesses scale their eCommerce portal by solving complex challenges through data-driven solutions. Sessions, Orders, Revenue, Average Order Value, and Conversion Rate. This framework helps businesses track their success and optimize their online presence. He also emphasizes the importance of leveraging these metrics to drive growth and offers practical strategies for improving website performance and increasing revenue.

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Scale Your eCommerce Portal with Ethan Giffin

Good day, dear listeners, Steve Preda here with the Management Blueprint Podcast. And our guest again after four years is Ethan Giffin, the Founder and CEO of Groove Commerce, a leading eCommerce agency that designs, builds, and grows websites for brands. Ethan, welcome back to the show.

What’s up, Steve? I am excited to be back here with you today. So excited.

Yes, I’m also very excited. And I mean, your business has evolved tremendously in the last couple of years since we last had you on the show. So I’m very excited. And you’ve got new frameworks as well to dive in.

I’m always excited to see what you’re up to as well, too.

All right. All right. We can talk about this maybe on another podcast. This is the floor is all yours on this podcast. And particularly, I’d like to ask you about what is your personal “Why” and what are you doing in your business to manifest it?

Oh my. We got to start with the deep questions first, the hard questions?

That’s right.

I think I probably like have a similar “Why” maybe to other entrepreneurs and founders, part of me really loves doing cool stuff. I love helping to build clients like cool things that solve business problems, like in my very nature. I’m a problem solver. And if I can help someone solve their problem and generate more revenue. Like to me, there’s nothing more appealing like with that. The other kind of part of my “Why” is like, I actually really love the process of the hunt and building the business as well. Ever since I was a young kid, like I started having yard sales when I was eight years old helping my grandmother at the time to clean out their house. My grandfather had all kinds of business equipment and other things. And so, I just have always loved kind of the deal, like aspect of things. And so I just kind of have a hunger for helping people and making money. I hate to put it so bluntly. I need to help people first, but I really love the aspect of building and growing the business and solving the complex problems that come with running a business for almost 20 years as well.

Yeah, I mean, money is the oxygen for the business. If it doesn’t make money, it cannot grow. And therefore, in order to grow businesses and you’re in the business of helping other businesses grow, it’s pretty obvious that you have to put some fuel in the tank there.

Well, it’s an interesting cliché. Because they’re like, oh, I would do this for free. At the heart of it, I give my time away to other people for free to help them solve their problems. But I have a lot of interests myself and things that I want to learn and grow. And quite frankly, all of that takes making money to be able to afford to follow those kind of paths. So it’s an interesting cliche to think about.

Yeah. I also sometimes feel that when you give your time away for free, then the other person might be afraid to be wasting their time, because if your time is free, their time is not free and there’s a mismatch. I see people have more confidence in buying a premium product, but they feel like their time will be well used rather than buy a half-baked product where they are risking of becoming the guinea pigs.

I would agree with that as well. One of my kind of side passions is DJing. DJing parties, and I’m very, very good at it. I’m probably better at that than I am at all of these other things. I started doing it when I was very young, when I was 14 years old. And so, I got to a very high level of performing in large nightclubs in the 90s and things. And so I’ve gotten back to it as really one of my loves and I’ve tried to ponder. I’ve bought all this new equipment and all this fancy stuff to be able, and I was like, well, maybe I should give my time away to some of the charities and nonprofits that I want to help with their galas and other events. And it’s been an interesting kind of question because I actually think they don’t value the free as much as they do like something a bigger kind of show or a bigger kind of image with that. So it’s all about how do I come up with something win-win. But I do think that there is a value to things and people perceive that value in one way, either high or low.

Yeah, that’s definitely true. I mean, I didn’t know about this DJ thing, which kind of puzzles me. And I’m wondering what your DJ name is, but I’m going to ask this after the show. So why don’t we pivot on to talking about your framework, because this is a show of frameworks and you have developed one that helps eCommerce stores improve their websites. And I think you called it the eCommerce Scorecard. Please tell us a little bit about what this eCommerce Scorecard is about and what are its elements?

Well, so it’s been an interesting kind of evolution. So a good friend of mine gave me the book Traction, I think, back at some point in late 2017 or early 2018. And so I fell in love with this book and all the concepts of scorecards. Share on X And then you and I started talking and collaborating and you helping and consulting with what I was doing in that process. And so I’ve always tried to figure out how do I get something all the way, the scorecard’s a great concept up here to run a business, but how do I get it down to my production team? How do I create something that’s kind of at the same level as our core values. We’re a marketing agency, we’re judged every single day on the results that we get, every day. You can’t rest in this industry because there’s so many options and people will leave you. A new contact will come in, something will happen, you’re judged every single day. And so, I was trying to figure out how do I create something as important in Groove as our core values related to metrics that help our clients grow. And so I came up with the concept of our core metrics. It’s five metrics that we can track absolutely across every client. And quite frankly, if we can’t track it for a client, then they probably shouldn’t be a client. Like meaning, if they don’t fit into these five things, then they probably like are out of our core focus and should not be, and maybe should be somewhere else, unless it’s a nonprofit or somebody that we’re donating some time to, which we do. And it was five metrics related to an eCommerce website, sessions, order count, eCommerce revenue, average order value, and conversion rate. And so there are five key metrics, five core metrics that we track across every client, that we sit down and we look at from the beginning of the relationship, the middle of the relationship, hopefully never the end of the relationship. But in the case, if a relationship may end for various reasons, we look at those core metrics and maybe there’s a real kind of reason why that’s happened. And so we think about those things and we reward our Groovers when they achieve wins with core metrics. It affects how we train people. It affects how we hire them. In some ways, they’re equally or maybe slightly above our core values because some of the core values need to be learned. These are things that, like, people entering our organization should probably know or be aware of. Maybe they haven’t put on all the pieces yet, but they should be aware of. And so, we’ve built dashboards and tools to track these and automate this process across our client base. So, it’s website sessions, how many visitors are on their website, how many orders, eCommerce orders are coming out of their platforms like Shopify or BigCommerce or Shopware, sometimes Amazon. What’s the revenue generated by those orders? What’s the average order value? That’s really important to us because let’s say someone’s buying a pay-per-click ad and we can take somebody from $150 average order value to $175. Well they’ve instantly gotten more return on that click that Google AdWords spend that they had. And sometimes we’re fixing that by thinking about like the checkout aisle at the supermarket. There’s a reason why I call it trash and trinkets. There’s a reason why they have all that stuff in those aisles to just throw in your cart at the end. Or if you have a seven-year-old like myself, they’re trying to get the candy and put on the conveyor belt. And then conversion rate and that’s how many sessions do you have on your website divided by how many orders you have. So we figure out and if you think about that, like an average eCommerce conversion rate might be 2%, 3%. For some industries, it’s a quarter of a percent. And if you think about that, if Home Depot only sold to one out of every hundred or two out of every hundred people that walked into the store, they would be out of business. McDonald’s would be out of business. And so doing things to affect that conversion rate, building trust, creating better content and buyer’s journeys, making it easier to put things in carts, and it’s all the way down to the colors that we use on the buttons and the contrast between other things on the screen. So we’re really thinking about that holistically as we’re working with a client. And so it’s an interesting journey because people will come to us with hard and fast, no, no, no, no. But we’re like, hey, can we test this? And sometimes I’m like, well, that no is about a million dollars a year with a revenue. Are you willing to like bend a little bit on that? And most of the time, as long as it’s like good vibes and it’s not like something that you’re misleading people on, people are generally like, they’ll soften their stance on those types of things.

So, a couple of questions. The first one is you mentioned Groovers and listeners may not be familiar with this concept. So your company is Groove Commerce and your people are referred to as groovers. I love it. But more importantly, how do you know if someone has the right number of sessions and order count and revenue conversion rate? Are there benchmarks? Is it by industry? And how do you get these benchmarks? Do you guys have those?

So by creating these values, it’s allowed us to create a way to benchmark these numbers internally. And that’s actually been one of the most impactful things that we’ve done for ourselves as an agency. We signed a new client to help them with their Klaviyo email service. Klaviyo is a tool that plugs into eCommerce websites to automate and create email campaigns. It’s very specific to the industry. And so we’re one of the top partners in the world for that. And so what happens is somebody will come to us and we’re able to compare their metrics to the benchmarks. We’re able to compare both our benchmarks as well as even Klaviyo’s like benchmarks and they’re kind of broken down by industry. Ours are not as industry focused. We don’t have as much of a sample size. But what’s intriguing about that is we’re regularly closing deals where we highlight and say, listen, you’re here and if we can get you just to the mean, if we can get you to the middle of the pack with this, which we believe we can do in four to six months with vigorous effort and put some work in, it’s not easy. It’s kind of like losing 20 pounds, you got to put work in to do it, but we believe we can get you there. And if you do that based upon your margins, our fees and everything else is a more than a way net positive for you. So we’re really looking for, depending upon the industry, people to generate 6 to 10x what our services cost in that specific in that specific channel. And when we’re able to put the benchmarks out, we’re able to show a pathway, it just really becomes a numbers conversation at that point and they have a higher level of trust. They believe in your expertise and it just starts to sell itself in some ways. I don’t want to make it, it’s not that easy, but it just becomes a much different conversation versus like showing pictures like fancy images on a PowerPoint deck when you’re getting into the numbers and saying we want to get you here. It’s going to take but somewhere between month three and six. We think it’s going to really take off. You’re gonna have to do these six things to achieve it as well And if you do these things and we do these things together, we’re gonna get you to the mean by the middle of this contract and year two, you’re really gonna be kind of making money with this. And so, there is an investment usually that needs to be made bit like this. And it’s worked very well for us so far.

I love this concept. And it’s something that I also deeply believe in that you have to benchmark yourself. And yeah, mean is it is a great starting point to get to the mean. But ultimately, if you want to be successful and want to be competitive in your industry, you have to be top quartile or top quintile, the top 20% of the elite players in profitability so that you can create enough profit to fuel your growth internally. You don’t have to give away capital to bring on investors, and you can grow as fast as the best players. And that’s kind of the word log zone where you want to get to. And I love it that you created your own benchmark and therefore you can show your clients where the people that work with you are, and then you can map the paths. And four to six months doesn’t sound like a long time at all.

No, it’s really not. And it’s been an interesting concept from the standpoint of one of the concepts in the traction book is about kind of a guarantee. And that kind of money back guarantee is, it’s kind of challenging in a services business, especially when there’s a lot of pieces to this and if they don’t do their part, you’re not going to kind of get to like the shared goal with this, because it is a shared goal. They want to hit revenue. We want to actually sell them other services and do more with them if we’re working with somebody on like four or five different services and also maintain their website, we start to accelerate. We have those benchmarks as well where we start to accelerate even faster. We’re doing somebody’s email, their SEO, their PPC, and we’re helping them with their Shopify or BigCommerce maintenance and doing all the creative work for the website, it starts to accelerate what we’re doing. But one of the things that it’s allowed us to do is that our contracts kind of where we put forward and say, hey, we have 12-month renewing contracts. The concept of a six-month contract to us just doesn’t work. We have to put a lot of work into lifting you off with this. And if you leave at six months, we’re actually losing money. We’ve hired somebody to join the team based upon the amount of extra hours and all the kind of things there. But we do, we started also saying in evolving our contracts to think about, well, if we don’t hit this benchmark by this date, then you can have an opportunity to cancel. So if you want to cancel and you’ve hit the benchmarks, well, then you kind of need to honor our 12-month contract for whatever reason that may be. But it’s also if we don’t hit the benchmarks, for whatever reason that may be, maybe your industry, we didn’t understand it enough. Maybe there was incompatibilities between the teams. It kind of happens rarely, but if we’re not hitting our numbers within a percentage of our numbers, then you can exit as well. And that's been very, very powerful for us to kind of show the proof in the pudding, so to speak. Share on X

I love it. That’s really interesting. I also noted on your website that you have a lot of free content in the form of eBooks. I could be late, I kept scrolling, scrolling, scrolling, and more and more and more coming up. It’s like different industries, different packages compared to each other. So you seem to be going really deep in content and showing your expertise. I also would like to highlight that you run your own podcast, don’t you? It’s eCommerce Masters. So what is your mission with that podcast? And what do your ideal guests look like?

Yeah, so I am the host of a podcast called eCommerce Masters. We’re in the very kind of early stages of it, our first 10 or so episodes. I really love it, it’s so interesting to me, our mission with this is to interview eCommerce leaders, either founders or C-level executives, and find out their stories. How did they get into the industry? What types of technology stack are they using to run their eCommerce operations? What does their team look like? What’s keeping them up at night? And what type of advice would they give to somebody kind of up and coming, either an employee or another founder that’s kind of climbing the ranks, so to speak. And so I really love interviewing people and talking to people. I don’t know why, it’s so intriguing to me. We’re kind of late on this, admittedly. I used to have a television show when I was in college. I was on TV. I was a radio DJ. We did webinars, and I built an interview studio, and then for some reason, one of my idols, Howard Stern, poopooed on podcasts, and I never kind of explored the medium. I should have started this 10 years ago, and maybe I could have been Joe Rogan, an uglier Joe Rogan. It’s really been a cool journey. I’ve learned about a lot of people and their products and how they created their products and got started and the trials and tribulations of operating. Should they sell their products on Amazon? Should they not sell their products on Amazon? How do they kind of, how are they creating products and evolving them? What have they lost at? And so it’s just been a lot of great conversations with that. And so we’re always looking for people to guests to come on and talk to us about that.

So talk about Amazon. That’s a big question. Amazon is the, I don’t know, a thousand pound gorilla, probably another 500 pound. What does it take to break free from Amazon and go your own path?

Sometimes, Amazon can be a blessing or a curse. So there’s a couple of different types of folks that are on Amazon. So there is a whole sector of the eCommerce industry that just tries to find products that are manufactured in China and other places, badge them with a name, and sell them on Amazon, and then put them in Amazon’s warehouse, and fulfill them, and charge a premium for those products because you’re going to receive it within two days generally as a prime member. And that’s an entire industry. And it’s generally, it’s not named products. It’s all kind of generic names. And what will happen in those industries is that people, as fast as they build a product, they’ll take it down and go on to the next thing. They don’t really care what they’re selling. They’re just trying to kind of sell. The other side of the coin on Amazon, and Amazon can be very competitive with that by the way, they’ll come after and create their own products, Amazon basics products for those types of items as they become more popular because they’re going to the same factories to get the same things. On the other side of it is brands and retailers that are selling their products on Amazon. Brands can do okay. Because they’ve got a higher margin. You know, maybe they’re getting their products fulfilled by Amazon, it’s called FBA, or maybe they’re fulfilling them out of their own warehouse with two-day shipping, but they generally have a higher, and sometimes they’ll mark those products up on Amazon versus what you could get in the store to account for the shipping on that. And then the last one is kind of general retailers that are just kind of, maybe they have an eCommerce store on Shopify. Maybe it’s on BigCommerce, maybe they have five or ten thousand products in their warehouse the margin that Amazon takes for that to sell that is often you’re just kind of chasing cashflow and one of our podcasts, the Founder talks about, he just got tired of chasing it and took everything off of Amazon and refocused their sales efforts in other ways and actually increased their top line revenue by not having to deal with the noise of Amazon. You got to process these orders fast, has to be in stock, you have to have on hand. And so it’s an interesting kind of question. It doesn’t work for everybody. I’ve also seen people that maybe are in an industry and they put a product on Amazon and there’s another industry that could use that. Maybe they had a very specific niche eCommerce site specific to an industry or a trade group. And then this product that they sell or that they’ve created gets hooked in and it could be used in other ways. And then their sales like grow significantly because they found a new audience that’s outside of their niche. Because people on Amazon don’t care. They’re just looking for the product. So, there’s a lot of ways to cut and slice it, but you just need to make sure you’re making money from it. Because it is kind of the 500 pound gorilla in the room. And it can burn you out if you’re not careful. The thing that I just distrust about Amazon is that you could sell $25 million a year through Amazon and not get anybody on the telephone over there. That’s the thing that I think is like the craziest thing out of all of this is the levels at which you need to sell and they’ll delist people’s products for an error in the data feed or something very benign and they’ll delist all your products for 24, 48 hours or however long it takes to go through this support channel without a phone number to do it. So it might work for you, but sometimes it’s more trouble than it’s worth.

But you do help people with Amazon portals as well, or you focus on off of Amazon?

Yeah. You can buy advertising on Amazon. There’s a lot of different things that you can do with them. And in some ways, they’re the new Google. People are searching for products in Google, but they’re searching for products on Amazon. And how do you leverage that audience?

And Groove Commerce also deals with them. I mean, you help clients be on Amazon as well?

Yes.

Okay, got it. So if listeners would like to learn more about Groove Commerce and what you do, or maybe they run a retail store and they would like to be on the podcast to share some of their experiences, connect with other eCommerce entrepreneurs. Where should they go and where can they find you?

Yeah, so you can find us online at www.groovecommerce.com. I’m on LinkedIn under Ethan Giffin, no R, Giffin. I always love connecting with people and talking shop. We’ve got a ton of downloadable resources on our website that are very specific. We like to hold webinars and events from time to time. And if you’re in kind of the Baltimore-D.C. metropolitan region, I’d also really like to meet you because there just isn’t as many eCommerce folks in our area and I’ve been trying over the years to kind of have some networking and other events. So please connect with me on LinkedIn. If you’re interested, we’ll be happy to do a free audit of your website and your channels to see if there are areas where you could grow. We generally kind of work with mid-market to enterprise folks, so not generally small businesses, but maybe you’re a brand that wants to go direct to consumer for the first time. Maybe you’re a manufacturer that wants some type of B2B ordering portal. There’s a lot of different paths that we can help folks.

Yeah. And you’ve worked with the big brands, Shopify, Magento, Klaviyo, BigCommerce.

We don’t work with Magento anymore. We thankfully sunsetted that relationship in 2019 and that was actually one of the happiest times of my life. All this gray hair and my beard, gingers aren’t supposed to get gray hair, all that came from working with Magento. But through Shopify, BigCommerce, Shopware, Klaviyo, Bloomreach, Attentive, we’ve got a ton of great partners and we’re able to get fantastic service from them and we stay very in tune with what’s happening in our in our industry.

Sounds great. Sounds great. Well, thank you, Ethan, for coming and sharing your eCommerce expertise and do check out www.groovecommerce.com. They have tons of downloadable e-books and and other resources. and I found it interesting that you’re one of the few companies I see that actually have a good positioning statement on their homepage. So it was like, buy the book, I love that. So check it out. And if you’d like to be on eCommerce Masters, Ethan’s podcast, then check him out.

Check me out on LinkedIn.

Go to LinkedIn and check him out there. If you enjoyed this show and you want to hear other entrepreneurs sharing their business frameworks such as the eCommerce Scorecard that we talked about today, then make sure you follow us and subscribe and like us on YouTube and on Apple Podcast. Thank you for coming and thank you for listening.

 

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