Episode 598 Guiding E commerce Success Black Friday Strategy and Finance With Matt Putra
Show Highlights
The source is a transcript from “The SDM show” podcast, hosted by Rob Cairns, featuring guest Matt Putra, discussing e-commerce, digital marketing, and business strategy. The main topic revolves around the importance of early planning for Black Friday and the Christmas retail season, emphasizing that preparation should begin in July or August. Putra outlines a “guidance system” for e-commerce brands, which includes creating a long-term financial plan (July through next spring) and mapping a daily profit tracker and conversion funnel to monitor performance and react quickly to opportunities or problems. The conversation also touches on the necessity of a conversion-optimized website before running ads and the need for high-volume, specific creative content in advertising campaign
Show Notes
Introduction: The Early Bird Gets the Black Friday Worm
- Host Rob Cairns and guest Matt Putra, fellow Canadians, kick off the conversation by stressing the importance of early planning for Black Friday and Christmas sales.
- They emphasize that waiting until October is too late; a solid Black Friday strategy should be in place by the end of September.
- Retail Reality: Stores often operate a season to a season and a half ahead. This foresight is crucial for managing inventory and campaigns effectively.
Matt Putra’s Journey from Corporate Finance to E-commerce
- Matt shares his professional background, starting in corporate finance and eventually becoming a CFO for a private equity group.
- The demanding corporate life, with long hours and a three-hour daily commute, led him to seek a new path.
- He began helping friends with their e-commerce businesses, discovering a passion for the field.
- During the COVID-19 pandemic, he made the decision to leave the corporate world and launch his own e-commerce consultancy.
- E-commerce Focus: His work primarily involves Shopify stores, though he also works with WooCommerce and Magento. He also works with CPG (Consumer Packaged Goods) brands that sell to grocery and big-box stores.
Defining a Black Friday “Guidance System”
- Matt defines a guidance system as a framework that keeps a business moving in the right direction, especially at high speeds. It’s a system that ensures you stay on track, preventing problems before they derail your progress.
- A good guidance system has two main parts:
- A Long-Term Plan: A high-level plan for the period from now until next spring, covering revenue, marketing, and inventory purchases. This plan helps ensure a business has enough cash to buy new inventory and avoid cash crunches during slower months.
- Daily Systems: These are the tools and metrics that provide real-time guidance. They consist of two core components:
- Managing the Conversion Funnel: Monitor key metrics like CPM (cost per thousand impressions), CTR (click-through rate), and add-to-cart rates. Knowing these numbers in advance helps identify where problems or opportunities lie.
- Daily Profit Tracker: A system to monitor daily net sales, cost of goods, ad spend, and profit. This allows for quick decisions, like increasing ad spend when profits are high or troubleshooting issues when they’re low.
Optimizing Your Ad Strategy & Website
- The discussion touches on the importance of knowing your numbers, not just what they were but what they’re projected to be.
- Ad Platforms: While Facebook is a significant player, it’s not the only answer. The best platforms are where your target customers hang out. Alternative ad spaces like Reddit or platforms for specific niches should be considered.
- Top of Funnel Marketing: Matt explains that people willing to invest in top-of-funnel marketing—ads not focused on immediate conversion—will ultimately win.
- Ad Spend: The idea that you can make money with a small daily ad spend is a myth. Businesses need to be willing to spend thousands of dollars to get a new campaign out of the learning phase and generate enough data to be effective.
- Website Optimization: A good ad campaign is wasted on a poorly designed website. Rob and Matt agree that a site must be optimized for conversions before any ads are run.
- Actionable Advice:
- Focus on one product per ad: Drive traffic to a specific product page, not a collection page.
- Remove distractions: Consider removing the header and footer from your ad’s landing page to keep the customer focused on the purchase.
- Utilize the thank you page: Don’t just say “thank you.” Use that page to suggest other products or encourage newsletter sign-ups.
Three Takeaways for Black Friday Planning
- Create a Financial Plan: Project revenue, cost of goods, and advertising from now until spring. Ensure your projected profit can support your inventory needs.
- Map Your Conversion Funnel: Know what it takes to hit your revenue goals at a granular level. Monitor metrics like click-through rates and ad costs daily.
- Implement a Daily Profit Tracker: Use a system to monitor your daily sales and profit. This allows you to quickly identify and react to problems or opportunities.
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