Episode 18

Email Capture Popups

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00:34:51

October 27th, 2020

34 mins 51 secs

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About this Episode

It seems most brands are using email popups on their website. Today Jon dismantles this practice with passion, explaining why they're bad for everyone, and offering better alternatives.

TRANSCRIPT:
Ryan:
Jon, we've spoke together quite a few times around the country, and then recently just around the internet, since we can't leave our houses. And almost every time we talk, you ruffle quite a few feathers when you're answering questions about email pop-ups. It seems that most retailers and brands out there on their websites, they are absolutely in love with their email pop-up campaign, they think it can do no wrong. And I personally don't like them because they're just annoying and I close them immediately because I'm trying to look at something else. And, but you're distaste, some may say hate, goes a little bit deeper within this space, but so many, again, so many brands are using these. It's just making me crazy.
So, I want to talk about these and get your opinion, the backend and the numbers that are guiding your distaste for these. But even to start with, what do you think is pushing this trend and what data are these merchants seeing that's causing these email pop-ups for discounts or anything just to become the norm? If you don't have it, you're weird almost at this point.

Jon:
Brands, what they're doing is they see another successful brand they look up to have email popups and they say, "It must be working for them. We need to do this as well." It goes in line with all the little Shopify apps that are out there that just spread like wildfire overnight, and then they'd disappear just as quickly once everybody realizes they don't actually move the needle, but they saw their competitor trying it out, so they thought they showed as well. Tons of examples of that. I think that's generally what happens here, first of all. Second of all, the brands see that email is their highest revenue channel, most likely. And so, they say every time I send an email, it's like printing money. So I should collect more emails. And that sometimes even comes down from the executive level, down to that marketing manager who is needing to implement that, whether they think it's right or not.
And third, I think what happens is that brands look at a success metric of how many people do we have on our email list. And they see these pop-ups collect email addresses. And so, they assume they are working. And I guess the goal that they usually have is just to collect email addresses at all costs, right? And they're thinking, "If I get someone on my email list, I can then continue to market to them and the rest will fall into line." And that just is a huge problem. It's, to me, it's the wrong way to be thinking about it. And after optimizing sites for 11 years, statistically, it's not accurate.

Ryan:
Being an e-commerce brand myself, I know that if my email list goes from 10,000 to 20,000, I'm probably making more money from email. So, where are brands missing the logic behind these pop-ups and not equating to larger email database equals more revenue from emails every time I send one?

Jon:
Yeah. I think, I don't have an issue with collecting email addresses. As I said, it should be, and looking at 10 decades of content and data around emails, it definitely can be your highest revenue channel. The problem I have with is the method of collecting, right? So, let's just start with that. I mean, we could, there's lots of directions, we'll, I'm sure we'll go today about the method of doing it around discounts and everything else, but let's just talk about the pop-up form in itself. And what I mean by that is just there are multiple ways to collect email addresses. You can start with those who have ordered and how you have the actual customer contact information that you own, right? If you doing an owned to sale, as opposed to something like an Amazon, then you have that information, people you can remarket to and continue to sell to.
However, if you just put a pop-up on your site versus maybe even baking a form into the page, right? Where customers who are actually interested, will scroll down to your footer and they'll enter their information because they're super interested. Right? I would almost encourage anyone listening to this to set a separate form up in your footer and tag people who fill that form out as higher intent, because they actually are interested in what you had to say. Now, the problem with a pop-up, let's just talk about straight up pop up, not an exit intent, right?

Ryan:
So, you're categorizing your email pops up into different buckets?

Jon:
Yes. Yes. There's different types. And I think that's important here because the one that I want to eliminate from the internet is just the pop-up. As soon as I come to a site, or maybe as soon as I start scrolling or even the timed ones that come up within a couple of seconds of loading the page, those are the ones I want to eliminate. Now, exit intent. Let's put that in a different category. I'm not as opposed to those. But what I'm talking about here is the disruption to the consumer experience, the interruption factor as well. Think of your site like a retail store. Now I know your wife has a retail store, right? If I walk into her store and she jumped out at me and said, "Here's a clipboard, give me your email address." I'm going to probably have a negative reaction to that. Right?

Ryan:
At least she's cute. That does help.

Jon:
Well, Hey.

Ryan:
Popups, aren't as cute.

Jon:
Hey, you know what I mean? You could make, you could put a nice looking picture on a pop-up, but that still doesn't change the fact that I'm there because I have a problem that I'm looking to solve. And I'm at the website because I think that their product or service can solve my pain or need. And all of a sudden now, before I know anything about the brand, something led me there, was it I clicked on an ad or a Google search or someone told me about it, so I have idea that they can help me solve my pain or need. But then all of a sudden I just get there, I still don't know about the value proposition of the brand, I don't know much about their products yet, but then I'm getting hit up right away being asked to give them information.
And I think that that's just disruptive and I can promise you every test we've run where we've eliminated that pop-up conversion rates have gone up on the site and sales and revenue. Now yes, you will collect less email addresses. But I argue that's not a bad thing in this case, with this type of pop-up. And the reason is a couple of faults. So, first of all, the email addresses you're going to collect out of those pop-ups are going to be very, I would argue they're not going to be very effective, right? Because you're getting a consumer who is entering their email address into that pop-up specifically to get rid of the pop-up in a lot of cases, because they... This goes into more things like negative intent shaming, because maybe in that popup, it's a pretty common trend now for a company to say something like, "No, I don't like discounts and offers."

Ryan:
Gosh, I hate that. I had that happen a couple of days ago. And I was like, "Of course I like discounts. I'm not an idiot, but I just don't like you telling me that I don't like discounts."

Jon:
Right. You're you're hurting the brand, right? And you're hurting your customer experience and that's damaged that you now have to repair. So, within the first five seconds of getting into the website, you're already have dug yourself a hole you have to get out.

Ryan:
Yeah. And I think brands are getting kind of like, "Ooh, we're kind of that little unique, give it to the man brand. And we're going to use that humor." [crosstalk 00:07:34] That doesn't necessarily come through because I actually don't know you yet. And maybe that's my first... I don't know that that's the type of brand you are. I was looking for a pair of board shorts. And now all of a sudden you're telling me I'm an idiot before I even know that you're, that's the voice of your brand.

Jon:
Exactly. Okay. This is another great example of real world for this, right? Popups are just like those people who canvas on the street corner, who come up and you're just trying to walk by and get to your next location, right? You're trying to get some job done in your life, going to the coffee shop or whatever it might be, you have a meeting you're walking to. And Greenpeace, not just to pick on Greenpeace, but they're out all over in Portland. They run up to you with a clipboard and they say, "Hi, can we chat for a minute?" And it's like, "No, I'm trying to get something done. This is not a good time for me." And then they follow you, "Well, did you know that this is happening with the environment? And this is happening." And it's like, "Yeah. You know what? That might still be important to me, but now's not a good time." And they're like, "That's fine. Just give me your contact information. We'll follow up with you." And it's like, "No, no, no. I don't know who you are."
Right? I don't want to just give some random person my contact information. And then what are you doing with that contact information? So, I think the problem is, is that marketers stop having empathy for what the consumer is going through on the other side of the screen, and they just feel like it's okay because they can't see that person to do these really poor consumer experience activities on their site. And that's what I try to fight against with this. And unfortunately pop-ups is the worst example of this on the internet. And so, that's why I ended up fighting against it.

Ryan:
Oh yeah. And it's people like me that are probably helping give them bad numbers since my computer saves the email address na@na.com for all of my form fills that I don't want them to email me on and I'm like, "Yeah. Yeah, here you go. Have that."

Jon:
Well, that's exactly it. So, now let's talk about the data that a marketer's going to get back out of this pop-up, right. So, a new site pop-up, you just came to this, a new visitor pop-up I should say. I get a form. Sometimes it just says, "Give me your info and you can stay up to date on the latest product releases, et cetera." So maybe they're not really dangling a carrot there. Right? I can't figure out how to close it. Maybe there's no close button and it takes over the entire screen and it's really annoying. So what happens? You put in an email address that like na@na.com, right? So now the brand has pretty muddy CRM, right? Their customer data, their marketing data is pretty horrible.
Now what's going to happen there is, they're going to start using all that data. Some will clean it, but I guarantee you most don't based on our experience and what happens is they're going to use those email addresses that are uncleaned. They're going to start sending them through their email platform. And then they're going to get a ton of bounces, a ton of spam complaints for those who might be okay, it might be good, or they're going to get a bunch of generic Gmails that never get opened. And I promise you one thing that's happening with your emails and large providers like Gmail, MSN, et cetera, is they're tracking when you send an email out to a thousand people, Gmail knows that at that same email is going out to a thousand people on their platform, and they're looking to see how many people are opening and clicking on that. And they're tracking that data to make sure that spam doesn't get through. And if nobody's opening it, nobody's clicking it, it's more likely to end up in that dreaded promotions folder or just directly into spam. [crosstalk 00:11:07].
And that's not even without people who are actually seeing that email and marking it as spam, which is only going to hurt your deliverability. So, over time what's happening is the quality of your email list is going way down only because of how you collected that as emails and the methodology you went through. And so, what happens then is you've turned what should be your highest revenue generating channel into something that is no longer producing at the level it used to, even though you have more email addresses on it.

Ryan:
Got it. Okay. That makes a lot of sense there. And you can kind of send yourself in a downward spiral. But I can also see the logic behind getting to that point. If logic states that me as a brand or a website, I'm willing to break even on my first order from Google ads when I'm buying traffic to my site, and then if I don't have an email up and I put it on, I'm like, "Oh, 10% discount. That's only going to increase people's conversion rates because I'm giving 10% off. But then these are people that maybe weren't going to buy, but now are because people that were going to buy, maybe they would anyway without the discount." So, I understand that logic to a degree, but how do you see that logic break down when somebody actually starts going through with that execution?

Jon:
Well, so now we're combining two negatives. We're taking an email pop-up that's disruptive and we're making it a discount. Now what's happening is same thing. As you said earlier, I just got to the brand, I don't know anything about the brand or their value proposition, et cetera, but now you want my contact information, and also you're already giving me a discount. Now, why are you offering a discount to somebody who just got to your site? They haven't exhibited any signs of intent to buy just yet, other than showing up at your door and you're giving up precious margin and you're creating a discount brand right away. Where it's the first thing I know about this brand is, they're going to give me a 10% off for giving me an email address. It's like, "Well, okay." And what's going to happen here is a couple of things.
One is, you're creating a discount customer who sees your brand as a discount brand forever, just because that's the first impression they have. And the problem with this is you've done it just to collect an email address. Well guess what? What's going to happen now is that person's going to put in their junk email address again, the one they use just for discounts and pop-ups, right?

Ryan:
Everybody's got one of those.

Jon:
Exactly. We all use Gmail for that, probably. Right. So, then what happens from there? Well, perhaps they might open the email, maybe not, more likely not. They just wanted that discount code. And the worst offenders in these popups are the ones that, where they collect the email address without any verification, they don't email you the discount code. They just show it in the box in the pop-up. So, they just give it to you right away. Well, then that's even worse because you're putting in whatever email address you want and you're still going to get the discount.
The other thing here is that, now every time I come back to buy, I'm going to want that discount. And I know I don't need to pay retail. I know that you're going to offer 10%. So, what am I going to do? I'm going to open your website in incognito, and I'm going to give you another fake email address just to get another discount code or another junk email address, or I'm going to do that Gmail trick, where you can put a plus sign and then anything you want after the plus sign. So, it's like Jon+, whatever I want @gmail.com and it ignores anything with the plus sign and after that.

Ryan:
That I did not know.

Jon:
So, you can create [crosstalk 00:14:31] a million email addresses just out of your one Gmail address. And most email platforms allow you to use a plus sign because it's a valid email character. And so, it's really interesting when we start working with brands, one of the first things we do when they put up a fight about removing their pop-ups, or at least running a test around it, is we go into their email database and check for the plus sign and see how many emails have a plus sign in it. And most of it it's like, plus spam is what people put, right? Or they'll even get more tricky. People who are really, want to know if you're selling their email address, or if you're giving it away or if you're abusing them and they do plus in the brand name.
And then it's like if you sell that email address or share with a partner, do anything else, they now know where that came from, and they're even more upset with you when that happens. So, I think it's really important here that people, brands really need to think about not discounting because you're basically taking what is a bad consumer experience and you're making that a bad experience for your brand too. And you're just doing that to collect an email address. And now you've created a discount customer right up front, who's forever going to look at your brand as a discount brand. And that's a really hard hole to dig out of in the future.

Ryan:
Well, and I think a lot of brands don't give consumers enough credit, and I think people pick it up pretty quick, where they know the strategies to try to get discounts. Especially people like me that just because I can, I'm not going to give up 10% of my money to a brand just because I like them. If I can keep 10% in my pocket, I will, even if I can afford the full price, which generally is the case, if I'm shopping for it. And so, my wife knows that I'm the cheap one in the relationship. And if she's going to go buy something, she knows that if she can tell me she bought something, but got a discount, and I'm like, I'm much less likely to put up a fight about that. And so she knows the strategy. It's like, "Okay, all I need to do on my computer is start to move my cursor towards the navigation bar and boom, exit intent pop up."
Or she even tells me now, she'll just, if she's interested in something, but it's not a need, it's a more of a want, she'll go put things in shopping carts, and then just wait a few days. She's like, "I don't need it right now. They're not going to run out of inventory. I'm going to go set up a shopping cart, I don't care. See if they sent me a discount." [crosstalk 00:17:29]. Almost all of them do. I mean, just people figure it out. It's not complicated. Marketers, I think sometimes think too much of themselves like, "Oh, we're going to do this. And we're going to trick all these people into spending so much money with us." And I'm like, "Nah."

Jon:
Well, I think that's exactly where having empathy for the consumer really comes in, right? And just saying, "If you, if this is happening to you, what's the experience you want to have?" And I think this goes back to a whole nother episode we can record on discounting and why that's a challenge. I mean, we just did, you and I just did a webinar yesterday and a big portion of that was about discounting with one of our partners. And I thought it was really interesting because so many brands are discounting. And when you think about this, you could be doing so many things that are and offer and not a straight percentage or dollar off discount. And I'm okay with doing an offer in an email. And there's a lot of other ways to collect email addresses that tie in with offers, right?
I mean, you could do "Coming soon, get on the list to be first notified," and that's providing value for an email address that they wouldn't get unless they gave you the email address. But it's also valuable to them. You could do, something where it's like, "Hey, if you sign up for our email list in checkout, you get free shipping." Right? So, you're giving some value. It's not a straight dollar or percentage off discount. You're doing an offer and there's scarcity. You could say, "Hey, these products sell out. It's sold out right now. If you sign up for this list, you'll be notified." And we have a brand we work with, a really high end camping brand, that a lot of their products, they sell out before they've even landed in the United States for manufacturing, where they just have a running list on their product detail pages that say, "Hey, this product is sold out. We have a new product coming in soon, get on the list, we'll notify you. And it will be presale before it goes up on the site."
Now there's a lot of value to a consumer who wants a product and is interested in that and giving their email address for that purpose. And it's a much better way to collect an email address over offering a discount. So, now they're selling these products before they've even hit the site. They're selling them at 100% margin or, well, not 100% margin, but without draining their margin by discount, right?

Ryan:
Or marketing.

Jon:
Or marketing costs. [crosstalk 00:19:54]. Yeah. What? Fractions of a penny to send that email. So, I think it's really interesting that brands immediately go to this discount right upfront and present that discount through such a disruptive manner that they have to use an email pop-up.

Ryan:
I think it's just, I mean, it's the easy button that they're thinking about. They're not taking that next step and actually having conversations with people, strategizing what could my options be? Because even me, having you as a friend and a business partner and various things, I come to you and I'm like, "Okay, Jon, I know you don't like discounts, but I know that there's value in somehow doing something like that, that maybe is not a discount, that keeps me from being a discount brand." And you've got phenomenal ideas for ... Now, we should probably do one, a thing on that. But you don't have to give a discount to give a discount type thing, which is a difficult thing. You have to really think through it.

Jon:
Right. Yeah. And you got to be creative with the offer, right? And sometimes people, like you said, it's the easy button. There's so many Shopify apps, for instance, that do these pop-ups and do discounts. Then there's apps that are really cheap to free that will do customized discount posts for email address exchange, stuff like that. It blows my mind because they see other brands using them and they think it must work for them, so we're going to do it too. Or they just, they think discounting is the only way. And I really argued that as soon as you get into discounting, it is impossible. It's like a drug, a really bad drug. It's really hard to get off of that. You got to wean yourself off of it because now everybody is expecting and they're not going to pay retail price.
I mean, we talk about how your wife sends you to Michael's to pick up stuff on the way home. And you know that she's going to have a 50% off coupon, no matter what. And if she didn't, for whatever reason, she couldn't find one right then, or whatever, you just ask the person at the register when you're checking out, like, "Hey, what's that? What's the coupon that went out in the mail last week? Do you have it?" And they're like, "Oh yeah, it's right here. Here you go." And they just scan it [crosstalk 00:21:55].

Ryan:
Yeah. That actually happened a couple weeks ago. [crosstalk 00:00:21:58]. I was, I got in line, she was like, "I couldn't find my code. Can you just pull one up on your phone and do a search?" I'm like, "Okay, yeah. I'll figure it out."

Jon:
Exactly. So, they're a discount brand and you go to them because they're a discount brand. There's nothing wrong with that if that's how they want to do it. But I would argue that, they're never getting out of that, right? They're just going to have to slash all their prices if they want to stop doing discounts. Then what promo or offer can you run because you've got razor thin margins at that point?

Ryan:
Yep. No. And I think one of the points you hit on too, is part of that other bucket of email popups, which you don't hate, those exit intent things. And this one works phenomenally well, for me at least, with one of the clients you've worked with in the past is Nike. One of the shoe companies you're based in Oregon. And I have an affinity for Jordan 4's. I'm not a sneaker head, but that's the one shoe that I grew up always wanting and I couldn't get them because didn't have enough money for them when I was a kid. But now I can. And so, I do keep up on the releases. And so, in this case, I gave Nike all my information to avoid the FOMO, the fear of missing out scenario. And I went to Nike site today just to see what they were doing, saying, "Okay, Jon worked with them. Did they get the message when he was working with them?" And they use only exit intent, no discount.
Do you ever advocate for discount at... Well, I already know the answer. But exit intent, how should brands be looking at that? Is there anything besides FOMO or anything to do besides offering a discount that you've seen be successful?

Jon:
Well, I think that there's a lot of options that you can do in these pop-ups. But specifically in exit intent, this is where it's one of those things that you should really be looking at segmenting your audience and tailoring the message with those pop-ups. So, for you, let's think about the journey you just mentioned you went through. You were, you love Jordan 4's and you were looking at those on the site and they popped up with an exit intent and you were like, "Yeah, sure. I'll do that because I want to be the first to know when new ones are released." There's value there for you in that, right? And they knew, this is a collector shoe, if you will. And most of the people, you claim you're not a sneaker-head, but let's be honest, you probably are if you're into Jordan 4's, right?

Ryan:
Probably.

Jon:
And so, the reality here is they know that. That people who are looking at this shoe aren't discount motivated because for them it's all about having the Jordan 4, that they don't need the discount. They could sell those out, no problem without ever discounting them. And in fact, you and I living in Portland, Oregon, we're blessed that we get to go to the Nike employee store occasionally. And whether we're working with them or, somebody who does work with them is able to share a pass with us occasionally. And I can tell you that they have some Jordan's there, but it's not their top sellers. I say that because at the employee store, there's a large discount when you shop there because you get employee pricing, but they don't have their top sellers, usually, in the collectible ones, like Jordan's et cetera there, because they don't need to discount them. If you want them, you're going to just go up on the site and buy it at retail.
So, I think that too many brands skip right away to the discount when there's other value adds you could provide. And that's where, again, you got to do a little bit of thinking on that. It can't just be the easy button.

Ryan:
Okay. So, pop-ups, avoid coming to the site pop-ups. Exit intent could be worth it, but you make sure you're adding some value to that, that customer that causes them to want to give you a real email address and not necessarily just throw a discount out. So, all companies want more emails. Do you have any strategies that you've seen be successful in your experience over the past decade in the e-comm world for brands to get more emails?

Jon:
Sure. I think there are some great ways to do, I mentioned earlier, some segmenting. So, let's say you run somebody in to your site from a Google ad that has a specific message, your value prop in it, aligning that with the message that you share for an email signup, right? So, maybe they're searching for a specific item and they get to your site and it's out of stock, well, there you go, now you should do not a stock email collection. I think that the biggest mistakes I see around email forms are that they're missing some key information. The first is you really need to set expectations on this email form. What does that mean? Well, you need to tell people what they're signing up for and how often they're going to hear from you. Pretty simple.
But most brands say stuff like, "Sign up for updates." It's like, "Why do I care about updates from your brand?" Right? "I don't need more updates." Nobody needs updates. But if you me, I'll be the first to know when Jordan 4's are released, I'm in, right? That's what I'm here for. That's what I want to know. So, it's all about saying, "Okay. Well, how often are you going to hear from me?" Well, maybe it's, "I'll email you once a month." Okay. I'm okay with that. If you say, "I'm going to email you every week," I have to think twice about it, but if I really am into your brand, maybe I'm okay with that. Or maybe it's where we have special product bundles that are only for email subscribers, "Sign up and you can learn about our bundles, exclusives." Right? Things of that sort, that aren't straight up discounts.

Ryan:
Almost like a merging some of this email acquisition with your loyalty program.

Jon:
100%. That is a great way to build email is through loyalty. It's through having, whether you want to do something as complicated as a point system, or just as simple as saying, if you're on an email address, you will get access to things that people who aren't on the email address.

Ryan:
And people are willing to give you more information, generally, when you're providing value outside of discount. For example, Nike, I give them my birthday. No other company gets my birthday. [crosstalk 00:27:51]. But they're telling me I'm going to get a special reward on my birthday. And I'm like, "Cool." I like Nike. They do have some trust. They built a brand that says, "I can trust them with my data already," just because I have an affinity for them and I've been wearing Nike's for, geez, 30 years. So, there is some of that that maybe not every brand is going to be able to get to, but you can probably do some pretty solid segmentation in your customer database if you had everybody's birthday. Like, Hey, this person's 20, this person's 40, they probably need different messaging. They probably have different interests, different disposable income level.

Jon:
Yeah. Yeah. The 20 year old is aspiring to get the Jordan's. The Ryan Garrow age folks are really out there to [crosstalk 00:28:35].

Ryan:

  1. 22.

Jon:
Okay. Okay. If you say so. And so I think it's, now you can afford the $300 pair of Jordan's and you're excited to buy them because you've earned that right over all these years of hard work, right? And so, or those two years of hard work, if you will. But I think it's one of those things where most brands aren't even segmenting. They're just doing that really clear scatter shot, hoping to collect email addresses, just to build their list. And I just, again, that's the wrong philosophy, whole-heartedly, full stop. Popups are not the way to do that. And I just, it pains me when I see brands do that. Part of me is because our mission at The Good is, I say all the time is just to remove all the bad online experiences until only the good ones remain. And email popups are such a bad online experience. I'm on a crusade to eliminate those.
And part of that is to help brands understand what damage they're doing with these initial email pop-ups. And it's true, I don't hate them just because they get in my way as a consumer, I hate them because of what they do to the brand over time. And the experience that you're putting consumers through is really negatively affecting the brand and the brand perception. And then most brands are applying a discount on top of that, so they're kind of adding fuel to that fire of just negativity and it's really just going to hurt them.

Ryan:
And the one thing I'll leave with would be the best emails you can get are from people that have purchased from you. So, if you just got more aggressive on getting more customers through marketing or driving people to the site, those people in your email database are going to be infinitely more valuable than anybody that just wants a coupon code or signs up just to have you go away or an email pop-up. So, I would challenge a lot of brands just to say, if you're comfortable giving an additional 10% discount, so you're taking 10% off your top line for somebody, why don't you just get 10% more aggressive on your marketing and get that customer to actually buy something and get more of them and increase your market share because that's the type of emails in my database that I'm going to be in love with.

Jon:
Yeah. I mean, you mentioned right up off the top that you're happy to spend your initial margin on that first purchase to acquire the customer through Google ads or whatever advertising you would do to get them to the site, so that you can continue to market to them and go after that customer lifetime value. And that's the right way to approach this because that's sustainable. Where if you're just going to give a discount and someone's only going to purchase once, because they can't get that discount again, or maybe they just see you as a discount brand, then you're going to have a bigger issue. So, I'm all for paying to get people to purchase, but I'm not, I don't think you should do that through a discount upfront.

Ryan:
Yeah. Don't go the lazy way. If your marketing team or your agency is telling you, "Use discounts or we can't do our job." It's time to maybe look outside that.

Jon:
Yeah. Find a new marketing agency. People come to us all the time and they say, "Well, we've been doing optimization on our site." And I say, "Okay, great. Let's talk about what you've been doing." "Well, we put a pop-up on, we offer discounts and our conversion rates went up." I was like, "Well, yeah. You know what? Every house will sell at some price. Ask any realtor. And they'll just say, 'Well, we'll just keep reducing the price until it sells.'" And it's like, well, eventually you're going to sell it for less than you bought it for. And that's exactly what's going to happen with your brand too.

Ryan:
Oh, and didn't you, you have some stat around, you give a small discount, your conversion rate has to go up just some astronomical percent. What was that number?

Jon:
Yeah. Mackenzie did a bunch of research on this. They surveyed and did a bunch of research on the, it was like the top 1000 e-comm sites. And what they found was that for every 5% that you run a discount on, you have to acquire, it was like 19% in additional sales just to break even on that discount.

Ryan:
And most people are not only giving 5%.

Jon:
Right. It's way more than that [crosstalk 00:32:36].

Ryan:
It's usually 10, 15, 20%.

Jon:
And so, you really have to think about this. Now for 5% discount, is that 5% discount going to get me greater than a 19% additional sales? Likely, that's not the case. And, in fact, the article that I read on that said, and I'll have to quote it, but it said "This rarely to never has ever happened." And I was like, "Okay. So, they said rarely, never, and ever in the same sentence."

Ryan:
Yeah. Having done this a decade, I can almost guarantee you that that has not happened. I mean, because you would just double that maybe for 10%, you have to get 38% increase in revenue for a 10% discount. There's no way.

Jon:
If, I mean, if that's how the math works out on that, then yeah, you're screwed if you start discounting at that rate in reality. Because yes, you've collected email addresses and markers will come back to me and say, "Jon, yeah, sure. That's if I only do it on that first sale, but now I'm going to have those customer in my database for a lifetime." And I'm like, "Yeah, but what are you going to have to do to get them continue to buy? You're going to have to give another 5% off and another 5% and another 5%. where do you get out of digging that hole? Right? How do you fill that hole so that you're getting your margin back and your customer lifetime value and your average order value keeps going up? How do you make that happen?"
You're better off it doing an offer. And, yep, it may equate to 5% off, but in the mind of the consumer, you're giving them an offer, not a straight dollar or percentage off. And then you come back the next order and you're not having to fight on a discount, you can give them some other offer, perhaps if that's needed. So yeah, we should definitely do a whole show, Ryan, on discounting. I think that could be another way to share one of Jon's things he hates on the internet.

Ryan:
Yes. I think we for sure should do that. Man, there's so many, so many good things in this. Jon, thanks for the time. I appreciate it. And I come away learning lots of things, including just adding a plus sign to my emails now. [crosstalk 00:34:30]. I can track where I'm being sold.

Jon:
There you go. Well, I appreciate you bringing the topic up and helping me share one of my missions. So, thanks for doing that.

Ryan:
Thank you