Michael Bower

What if you could add $3M at 80% margin to your eCommerce business without having to sell a single additional product? Here is how the team at Homelife Media figured this margin innovation playbook...

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DTC brands: If you’re optimizing your website for desktop over mobile, I'd highly suggest flipping priorities. At Anatta, we see at least 70-80% of site visits happen on mobile devices. If you’re not designing for mobile first, you’re designing for 20% vs. 80%, and that math just doesn’t math. This is also why it’s so important to get mobile usability right. We did a user study with our friends over at M.Gemi in which we showed them the behavior of their customers on mobile vs. those on desktop devices. On mobile, we could clearly see users’s eyes darting everywhere, telling us that they were distracted. When using their mobile devices, people are cooking, they’re taking care of their kids, they’re playing video games, they’re talking to their partner, they’re in the bathroom... all while shopping on your site. If you’re competing against that, you have to consider what type of experience you’ll need to design to - at the very least - capture their attention long enough for them to add-to-cart or bookmark your site for later. Getting all of those mobile attributes right - the sizing of buttons, the sizing of text, the placement of content and elements, and being mindful that there’s not too much on-page clutter - is so key… Because on mobile, you’re not just up against your competitors for someone’s attention. You’re competing with all of the many, many things going on in their life. #mobileux #ecommerce

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After 5 years of experience and generating millions of dollars online for 6 to 8-figure DTC brands, I’ve put together "The Ultimate Guide to Segmentation Strategies in Klaviyo" Why is segmentation key? It’s the foundation for personalized emails that engage customers and drive serious revenue. If you're not segmenting, you're leaving money on the table. Especially with Q4 around the corner! Comment ‘Segment’ or ‘Q4’ and I’ll send the guide straight to you. Let’s make some bags this Q4 together! (Must be connected)

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Funny story about Intuit Mailchimp and Shopify . . . Years ago Shopify flew me up to toronto to do a 2 day email marketing supercourse. I did tons of content, all about how to do lifecycle marketing on Mailchimp. Win-backs, ACs, how to sync with Shopify, mine your customer data, etc etc. Lots of screenshares showing step by step how to do things. Literally one day after returning to NYC, Gwen Aussem from Shopify calls telling me that they had a falling out with Mailchimp and kicked it off the platform. They would have to edit my course down to remove Mailchimp references. I'm like "The class was 90% Mailchimp." Gwen (trying to sound upbeat): "Yup . . .we can make it work." So they went live with the remnants which was my face to camera talking about email for about 45 min. It still did turn out OK! A credit to the editors I guess. I loved the experience and working with Gwen Aussem and Jonah Wolfraim! But gave me a funny story about being an unknown casualty in a much more strategic war between these two giants.

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Check out our recent case study for a Shopify website We teamed up with Pinkergreen (who assisted w/ UX & design) Outcomes from work? Conversion rate up ⬆️ 60% Avg order value ⬆️ 7% Upsell value (within 45 days) $8100 SEO up ⬆️ Bounce rate ⬇️ Check out the full case study below with more info on process & outcomes

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Another banger from Chewonthis DTC, this time about post-purchase flows. 5 takeaways and comments: 1. The strongest post-purchase offer is an upsell of the same product to leverage the buyer’s recent decision-making momentum and familiarity with the product. I personally only use this offer for one-time-purchasers, to mitigate subscribers from cancelling because of 'too much product'. 2. Optimal funnel structure: cross-sell at checkout, then upsell the same product post-purchase (1a, 1b if the first one is declined), follow with cross-selling related items and end with downselling accessories. 3. Use free shipping thresholds in the cart: display a progress bar for free shipping eligibility in the cart to visually drives higher cart values as customers strive to meet the threshold. Btw: you can find your sweet spot by analyzing your past orders to determine the median order value and average shipping cost. Then, calculate your gross profit margin and test different thresholds to see their impact on profitability and customer purchase behavior. 4. Use post-purchase surveys to gather data on why customers bought and tailor future communications and offers based on this. It's a gold mine of content you can use on ads or the product page. Definitely go beyond asking where they came from. 5. Network offers. Display premium third-party offers (e.g., Nike, Hulu) on the thank you page to add incremental revenue. Can add about 45 cents per transaction, covering some fulfillment costs. Credit to Ashvin Melwani Ronak Shah Dhruv Patel Nick Shackelford

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Why scaling Google Ads without knowing your contribution margin is a recipe for disaster. We helped an outdoor furniture brand go from overspending to optimizing by forecasting based on their real contribution margin. Here’s how we saved them tens of thousands.👇 Most DTC brands look at their total revenue, but here’s the thing… Revenue doesn’t equal profit. To scale profitably, you need to know your contribution margin – how much money is left after covering variable costs like production, shipping, ad spend, your agency fees, and CC fees. Here’s how you forecast Google Ads spend using contribution margin: Calculate Contribution Margin (CM): Revenue – Variable Costs = Contribution Margin. Example: If you sell a product for $97.99 and your variable costs are $52.00, your CM is $46. Determine Your Ad Budget Based on CM: Once you know your CM, you can calculate how much you’re willing to spend to acquire a customer and remain profitable. Optimize Ad Spend: Track how well your campaigns are performing against these margins. If you’re overspending on CPAs, it’s time to adjust bids or pause underperforming ads. Build your ad strategy around contribution margin, not just total revenue or ROAS. It’s the only way to grow while staying profitable. Need help building a forecasting model? I’ve done this for dozens of DTC brands. Let’s connect and chat about scaling profitably.

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Cotopaxi has so much potential but needs to evolve to be different from everyone else (Patagonia), and their stores need more experience. Companies get stuck with the "textbook mission" and must innovate but remain authentic. Their sale during BF told me there is something amiss. https://lnkd.in/gAdNX-_q

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The physical location "halo effect" for DTC brands is too simplistic. In reality it looks more like a J-Curve. First 6-8 months you cannibalize your ecommerce sales. And then... "Over a two year period they go back to shopping online in apparel because they have been fitted, they see a broader assortment, they are more willing to buy expensive product. So they become much better ecomm customers." Just one of many gems from my discussion with Andrew Neelon.

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This will sound "duh" but a lot of new DTC brands don't realize it until it's too late. Invest in really good photography. The difference between a forgettable eCommerce site and one that gets the order (besides a good story, good marketing copy, and social proof) can come down to the quality of the creative assets. In a world of a million knock-offs and shoddy products, showing high-quality photographs of your actual product in the hands of real people in a genuine setting: big difference. We've never had a situation where we've had too many great photographs. The more the merrier. If you're a DTC Brand CEO looking to boost your revenue, then grab 'The 5 Ways High-Performing DTC Brands Get 10-20% eCommerce Conversion Rates'. This guide reveals the 5 tactics that the highest-performing DTC brands employ daily to achieve 10-20%+ conversion rates on their eCommerce websites. Note: If you don't see my comment below with the link, choose 'Recent Comments' in the dropdown below my post.

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Sweet Top Tip #8 Top DTC brands aren't just measuring success – they're predicting it. Today I'm sharing the game-changing blueprint for leveraging predictive analytics for your brand. The key components of predictive success: 1️⃣ Focus on input metrics, not just output 2️⃣ Master customer unit economics 3️⃣ Build a balanced dashboard of leading and lagging indicators 4️⃣ Use multi-channel strategies effectively Next is breaking down these components into actionable steps. 6 steps to replicate ecommerce success: ✅ Identify your leading indicators Look beyond revenue What metrics give you early insights into your business health? Think engagement rates, click-through rates, and add-to-cart rates. These metrics can signal potential issues or opportunities before they impact your bottom line. ✅ Check your customer unit economics Once you've identified your leading indicators, it's time to dive deeper. Understand the nitty-gritty of your customer behavior. Calculate Customer Lifetime Value (CLV) and Customer Acquisition Cost (CAC). This will help you make informed decisions about customer acquisition and retention strategies. ✅ Create a balanced dashboard With your leading indicators and unit economics in hand, it's time to build your command center. Mix leading and lagging indicators to give you both predictive insights and performance tracking. Include metrics like - Average Order Value (AOV) - New Customer Acquisition Rate - Year-over-Year Growth This balanced approach ensures you're not just looking at where you've been, but where you're headed. ✅ Act on early signals Now that your dashboard is set up, it's time to put it to work. Use your leading indicators to make proactive decisions. Don't wait for revenue dips to make changes! Be proactive, not reactive. ✅ Optimize your multi-channel approach With your predictive analytics in place, it's time to supercharge your reach. Diversify your paid media strategy. Combine platforms like Meta, Google Ads, and Pinterest for maximum impact. Businesses using multiple channels in their marketing mix often see higher purchase rates compared to single-channel campaigns. ✅ Maintain brand consistency As you expand across channels, keep this crucial point in mind: Make sure that your brand message is cohesive across all platforms. Consistent brand presentation across all platforms can significantly impact revenue. Your brand should be recognizable and reliable, no matter where your customers encounter it. By following these steps, you're not just measuring your DTC success – you're actively shaping it. You're moving from reactive to proactive, from guesswork to data-driven decision making. So, we've laid out the blueprint. Are you ready to shift from measuring to predicting? The future of your brand depends on it.

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*Shopify BEATS on Q1 earnings* - I listened to Harley Finkelstein at 2x speed so you don't have to.. Highlights below 👇 In Q1, Shopify beat on both revenue and earnings with increased payment adoption and rapid growth as well as continued wins in the enterprise segment. Notable wins included BARKBOX, INC. PrettyLitter, Overstock, WYN BEAUTY by Serena Williams. A quick rundown of the #'s Gross Merchandise Value: $60.9B ( ⬆ 23%) - same growth rate as Q4. impressive to see that growth rate sustained at increasing scale. Revenue: $1.9B (⬆ 23%) - up 29% when adjusting for the sale of Shopify Fulfillment Network to Flexport. Gross Payments Volume: $36.2B (⬆ 32%) - most importantly GPV grew to 60% of GMV up from 56% in 2023 which means they're capturing more share of payments via Shopify Payments which means more revenue. Looking closely, their take rate also is increasing as Shop Pay increases penetration Subscription Solutions Revenue: $511M (⬆ 34%) - mainly driven by price increases and increased merchant adoption. MRR: $151M (⬆ 32%) - interesting 🚩 this is only up $2M from Q4 2023, so QoQ MRR growth is actually a tepid < 2% Shopify Plus accounts for 32% of MRR, a decline in share from Q3 last year. This is one of those hard-to-reconcile counter-narratives to everything the team says on these earnings calls about enterprise and moving up market. Gross Profit: $957M with GM at 51.4%. It's interesting to watch this GM oscillate on revenue mix for the quarter. Q4 is payments heavy which is traditionally lower margin whereas more of the revenue in Q1 comes from SaaS and subscriptions and pushes margin up. GP is what pays the bills so great to see it growing so quickly Free Cashflow: $232M (12% FCF margin and doubling YoY) - Shopify continues to become a cash-generating machine that will allow it to reinvest in its platform and growth to up the pressure on incumbents like Salesforce and Adobe. THE MAGIC METRIC - Shopify talks about increasing the Attach Rate, but I don't think they spend enough time on it. Ultimately, it's the number that drives this business and the long-term shareholder value of the company. Attach rate is defined as (merchant revenue/merchant GMV). Effectively, it's how much of their customers' revenue they capture as revenue to the platform. However, it's the ultimate balancing act - if too high competitors can steal share, too low, the business doesn't grow. The way to continue to justify increasing this take rate is to build valuable net new features where merchants have no problem paying incremental dollars to Shopify because they're either adding more value to the business or replacing other costs in the PnL. This is why Shopify Editions is such a big thing! Currently, Attach Rate is at 2.99% and growing QoQ The Look Ahead to Q1 2024 Looking forward, Q2 is forecasted to be in line with expectations set at the end of last year, so no surprises there. Good quarter Shopify!! #shopify

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DTC brand founders—when you’re mapping out inventory and ad spend, are you making decisions based on bold targets or realistic forecasts? How do you separate the two? -- Hi, I'm Jon Blair founder of the DTC Finance and Accounting firm Free to Grow CFO. Want more tips on growing a profit-focused DTC brand? Give me a follow. Want to learn more about how Free to Grow's Accountants and CFO's can help you increase profit and cash flow as you scale? Shoot me a DM. Until next time, scale on! 

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An easy way to build your promotional calendar: Be on sale when your key retailers on sale. This is when they’ll be driving the most traffic to their site, and you want to be included in that call to action. It let’s you ride the wave of marketing they’re doing to make that sale a success. It’s important for your brand to have its own promotional calendar—but there should be strategic alignment in timing with your most important partners.

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Most DTC brand growth stagnation today is due to a strategic misdirection over the last several years... Focusing on acquiring the cheapest customer, instead of the most valuable.

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Controversial DTC topic of the day... Does your ecom business look at "Acquisition" and "Retention" as two separate things? Are both handled under one team, or separately?

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