Loyalty Programs — This is an excellent way to build long-term customer engagement and increase your customers’ lifetime value (LTV). Reward them for coming back and buying more over time. You don’t have to just give away stuff either; engage with them on new product feedback, give them early access to new items, or even throw events for loyalists. Personalize communication for a more significant impact, and it’s ok to use emojis.
As part of my series about the “5 Things You Need To Know To Create A Highly Successful E-commerce Business”, I had the pleasure of interviewing Aaron-Taylor Austin.
Aaron grew up in the family business and left to explore a career in the AdTech world. Starting at Yahoo! and working in Desktop Search and Display advertising, he moved into the mobile space at Softbank funded Indian unicorn InMobi, Inc. He managed the Account Management teams and then moved into the mobile programmatic space, launching the newly-formed InMobi Exchange in the North American region. He was recruited to the newly formed Mobile App Sales team at Google, where he managed a team of Account Executives working with Fortune 100 Advertisers on their mobile app strategy. The pandemic facilitated his return to the family business, where he led a successful pivot toward e-commerce. He lives with his husband and dog in the San Francisco Bay Area.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
Thanks so much for having me! My backstory is kind of all over the place. I grew up in upstate New York, where my family had a small soap business. I would do everything from wrapping the soap to picking up beeswax and goat milk from local farmers. It was a great way to see how to run a business and get experience in sales. Growing up, I was a figure skater, so I coached students of all ages until I got a job at Yahoo! in San Francisco. I fell in love with the city and have been here ever since.
What was the “Aha Moment” that led to the idea for your current company? Can you share that story with us?
My father founded the company, but it started with him making soap for me personally. I remember all the years of experimentation he went through. There were myriad difficulties, but then our family and friends would always ask for more and more soap, and we started doing the local farmers market, and that’s where things began to take off. I remember an “a-ha moment” when my father realized he could be a soapmaker full-time, and there were people who were not on board with him pursuing his dream. I remember encouraging him to persevere and ignore the “haters.” Being an entrepreneur is never easy but remember this was the late ’80s, long before the modern “organic” or “waterless” movements. Back then, it was not cool to wear Birkenstocks or talk about organic farming methods or essential oils, let alone a bar shampoo.
Can you tell us a story about the hard times you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?
There were plenty of hard times; I remember an old department store that was one of our early clients that declared bankruptcy. We were so proud of that big sale, and when we never got paid, it was crushing. Our products are made to order, so we had to absorb the cost of this large order. It forced us to think more carefully about our business and temper our creative exuberance with a practical sensibility. However hard it’s been, we always know that we must keep going. Our customers write us the most amazing notes saying things you just can’t make up. Each product is very purpose-driven, and they help everyday people with real skin issues. Knowing that we help change our customers’ lives, even in some small way, it’s worth it. Once I was working a trade show, and an older gentleman came over to me, grabbed my hand, and looked me straight in the eyes. He teared up as he told me that the cream my dad made had healed his cracked and bleeding hands that had gotten so bad he could no longer move them. It moved me so much, and I think of him often whenever I have a terrible day.
So, how are things going today? How did your grit and resilience lead to your eventual success?
Well, things are MUCH different today. My sister has been the CEO for a long time and dramatically improved the team’s operational efficiency. She moved the warehouse to Beacon, New York, and integrated within the community. We have moved much more firmly into the DTC e-commerce space, something that simply was not around when we started. It’s allowed us to talk to our customers worldwide directly and start building that experience. We love our wholesale partners, but it’s nice to have several sales channels, so we have more demand and diversification.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘takeaways’ you learned from that?
At trade shows, we would hand out samples of a mint soap to folks walking by, with the idea that they use it in their hotel at night and come back if they like it. Occasionally someone would pop the soap in their mouth without talking to anyone and keep walking. Mortified, we would call out to them and alert them, but they would usually ignore us. One guy replied, “well, it tastes great!” We laughed a lot about that and have the word “soap” everywhere, but there are still outliers. Good thing we use edible ingredients!
What do you think makes your company stand out? Can you share a story?
Our products are unique, and they work. We pledged to focus on natural ingredients more than 30 years ago — a concept that was undoubtedly ahead of its time. We pioneered soap swirls and layers and have so many types of packaging over the years. In the early ’90s, we sold a soap-making kit that enabled hobbyists (and maybe even some businesses) all over the country to explore the saponification process. Everyone needs soap, and since it’s a usable good, folks always need more! I think the fact that we are a second-generation company makes us stand out in the field. Many folks are starting personal care companies, taking a lot of VC investment and growth hacking their way to scale. We are not like that; slow and steady wins the race.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
Find something that allows you to get into a joyful “play” state. It can be hard to find the thing or activity that provokes this response, but it’s worth the effort. The pandemic was the catalyst for me getting really into Bonsai, and I’ve found it to be highly beneficial to my mental health over the past year and a half. Also, set boundaries, block off time on your calendar for meditation or exercise, and allow yourself to take that time. Often entrepreneurs are the hardest on themselves, so be gentle and make the space. You will have much higher productivity if you find that time for balance and big picture thinking.
None of us can achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
Just after I started at Yahoo!, there was a round of layoffs, and I remember an account executive coming over to my desk to see if I was ok. I was very on edge about the layoffs, and he leaned in and said, “It’s an opportunity, Aaron.” That idea has always stuck with me; there is always opportunity if you look for it when there are difficult times.
Ok, thank you for all that. Now let’s shift to the main focus of this interview. The Pandemic has changed many aspects of all of our lives. One of them is that so many of us have gotten used to shopping almost exclusively online. Can you share a few examples of different ideas that e-commerce businesses are implementing to adapt to the new realities created by the Pandemic?
By most accounts, the pandemic has accelerated the shift to e-commerce by about ten years, and I think it’s great. The mobile space is where things are happening, so I like the term “m-commerce.” Never before could brands talk to their customers 24/7 on their mobile devices and facilitate a deeper relationship. I’m a firm believer in the native app space and have seen some fantastic apps improve their functionality during the pandemic. From mobile ordering in the QSR space to curbside pickup in the grocery space, each brand is figuring out how to engage with their customer in helpful ways, so it’s essential to engage with them and listen. We also see a lot of social media engagement in playful and uplifting ways on new platforms like Snapchat and TikTok. I think this focus on utility and joyfulness is a significant evolution that will persist post-pandemic.
Amazon and even Walmart are going to exert pressure on all of retail for the foreseeable future. New Direct-To-Consumer companies based in China are emerging that offer much cheaper prices than US and European brands. What would you advise retail companies and e-commerce companies for them to be successful in the face of such intense competition?
You have to dig deep and figure out what makes your offering unique and special. Once this is clear, lean into what makes you unique — Amazon and Walmart excel at offering the lowest price, which is great, but not everything. Think of the brands you have an affinity for; my guess is that you love them because they’re filling a need in the marketplace. The narrative structure you use to talk about your brand matters just as much as the actual product itself. People don’t remember what you said; they remember how you made them feel. Of course, excellent customer service, loyalty programs, easy navigation, and payment processing are also important. I think many consumers value small businesses and want to engage with brands off of the big platforms. That said, we do sell a lot of product on the Amazon platform and will be on WalMart.com soon. We want to meet our consumers where they are, agnostic of the platform. Having an official store allows us to diversify, meet demand, and provide a consistent experience across the board.
What are the most common mistakes you have seen CEOs & founders make when they start an e-commerce business? What can be done to avoid those errors?
The most common mistake I see is founders thinking, “the product will sell itself.” You may have an amazing best-in-class product, but if nobody knows about it, it will take forever to scale up. With very few exceptions, performance marketing is the best way to advertise and get the word out about your business while also backing into KPIs. I also see folks underinvest in asset creation like photoshoots, video creation, and product shots. They also leave stale images up for too long (on-site, in marketing). Customers expect Websites, Apps, and ad creative to change frequently.
In your experience, which aspect of running an e-commerce brand is underestimated most often? Can you explain or give an example?
E-mail Marketing! This is a highly effective way to engage with your customers, and while it might seem a bit “old school” from a tech perspective, we have seen an uptick in engagement and efficiency with email marketing. When folks opt-in to hear from you and then open your email, it’s a signal that these folks are engaged with your brand and want to hear more. Use this channel to talk about your process in detail. When customers feel an affinity with your brand, they want to know everything and dive deep. Some of our customers have been engaged subscribers for decades. I’m so grateful for them.
Can you share a few examples of tools or software that you think can dramatically empower emerging e-commerce brands to be more effective and more successful?
I’m a massive fan of the Shopify platform and ecosystem. It’s effortless to get started and to curate a seamless e-commerce experience. We also advertise on the Google and Facebook platforms and are exploring TikTok (it’s work, I swear!). With just these partners, anyone can sell product and find your consumer. Of course, it’s critical to ensure you have conversion tracking set up and that everything is firing correctly. This seems common sense, but you would be surprised how many people spend on these platforms without the attribution and tracking set up.
As you know, “conversion” means to convert a visit into a sale. In your experience, what are the best strategies an e-commerce business should use to increase conversion rates?
Make sure conversion tracking is set up correctly and that you are tracking more than the final conversion. Tracking as many events as possible all the way down the funnel is critical; from there, you can create audiences and speak to them specifically. This type of personalization is one way you can improve CVR, tons of creative testing, and a tight brand story. It’s so important to make decisions based on data — often, a highly performing ad or email subject line is right there under your nose. Rigorous analysis of your data will uncover common threads between the high-performing assets to refine the brand strategy. I once worked with a prominent advertiser that had a single creative driving 90 percent of their conversions. They had thousands of variations, but one image outperformed them all. What drives the conversion for your business may vary from sector to sector and business to business, so while there are generalized trends like adding a loyalty program, highlighting customer reviews, and providing a strong call to action, you need a “test and iterate” approach that is grounded in your first-party data. Another fun fact, — using emojis in copy dramatically increases conversion rates. This holds for email marketing and text for social ads — just don’t overuse them.
Of course, the primary way to increase conversion rates is to create a trusted and beloved brand. Can you share a few ways an e-commerce business can earn a reputation as a trusted and unique brand?
Ah, you said trust! Trust is an interesting thing, and over the years of sales training, we learned the trust formula, which is always helpful. The formula says that trust is equal to Credibility + Reliability + Intimacy divided by Self Orientation. Once you isolate how you can move the needle on each of these, you will start building trust with your brand. We also strongly believe in giving back to the local community, finding causes to champion within your company ethos, and talking about your process. No company is perfect, but it cultivates a solid and authentic reputation when consumers see businesses working through their process with humility and transparency. Oh, and I’ll also just note that how you treat your employees is essential as they are the face of your company, our employees become part of the family, and we do our best to make sure we listen to and support them in any way possible.
One of the main benefits of shopping online is the ability to read reviews. Consumers love it! While good reviews are positive for a brand, poor reviews can be very damaging. In your experience, what are a few things a brand should do to effectively and adequately respond to poor reviews? How about other unfair things said online about a brand?
Reviews are a gift! I once worked with an app client with dismal app store reviews, somewhere in the 2.0 range. They went one by one, replied to each customer, and took their feedback to the product team. Over time they had fixed all the problems, and the rating moved into the 4.0+ range. The lesson here is to listen. Your actual customers are telling you how they engaged with your product or service, and this is incredibly valuable. Sometimes founders can get stuck on what they expect the customer engagement to be like, but your customer will tell you! One of our best-selling products is a hand scrub and laundry treatment. We initially made it a hand scrub, but an enterprising and adventurous customer tried it on a stain. When it worked, the news spread, and we had to pivot how we positioned it. I had a client once who made an app for high school kids but was disappointed when older females showed an interest. Eventually, he pivoted and scaled the app focusing on the demographic responding, not the one he thought would respond. Of course, the internet is a wild place, and you will always have people trolling you or engaging with bad intent. We do our best to do the right thing even in difficult situations, and we find that our loyal customers do a great job at moderating scary places like the Facebook comments section for us, which makes me proud. Your loyal customers will shout from the rafters when they are happy and drown out the trolls.
Ok super. Here is the main question of our interview. Based on your experience and success, what are the five most important things one should know to create a very successful e-commerce business? Please share a story or an example for each.
- Focus on the Product
This is where the rubber hits the road. One great product has built empires. Focus on your product and make sure it’s polished and ready for prime time.
2. Brand Building
Building a cohesive brand can be challenging, but it’s worth the upfront work. Some companies will invert 1 and 2 on this list and start building a brand before you have a product. I prefer the other way around. How your product meets the needs of its user is key to building a brand around it. Lean in to what makes you unique, “it’s not a bug, it’s a feature” is a silicon valley cliché but a great way to think about using what makes you unique to stand out among your competitive set.
3. Establish Digital Infrastructure
This one is a challenge but critical for success. Trim down to as few partners as you can and make sure it’s all connected. Get the site platform talking to the marketing platform and your CRM data, and your Financial systems. This saves a LOT of manual work down the road. We recently have seen success with Shopify because it directly connects to almost everything, and you just have one UI to check for fulfillment, finances, and analytics. Find what works for you and keep it as simple as possible (it can get crazy if you don’t).
4. Omni Channel Marketing
Strive for a consistent customer experience across all channels — Desktop, Mobile, Amazon marketplace, email newsletters, in-store experience, the retail site, the wholesale site, trade shows, shipping boxes, and packaging. It should all line up and reinforce the brand. You don’t want any single point of customer contact to be off-brand. Balance performance marketing with brand advertising and test creatives frequently to maximize return on ad spend (ROAS).
5. Loyalty Programs
This is an excellent way to build long-term customer engagement and increase your customers’ lifetime value (LTV). Reward them for coming back and buying more over time. You don’t have to just give away stuff either; engage with them on new product feedback, give them early access to new items, or even throw events for loyalists. Personalize communication for a more significant impact, and it’s ok to use emojis.
You are a person of influence. If you could start a movement that would bring the most good to the most people, what would that be? You never know what your idea can trigger.
I think there are cool skincare-related movements like the Ban the Bottle and Waterless movements, but I believe basic needs like food are so important, especially right now. Food banks are strapped and have more extensive needs than ever. We donate a lot of product to local first responders, school causes, and women’s shelters, but there are many needs in every community. I think a movement focusing on the local needs of each community will make the most significant impact.
How can our readers further follow you online?
This was very inspiring. Thank you so much for the time you spent with this!