As a brand, building a community is one of the most beneficial things you can do… but why? What’s the secret behind making sure it’s successful? Well, the number one thing you need to do is figure out what exactly you stand for as a brand and what your customers' shared passion is! This doesn’t necessarily mean that it’s your product or your service, in fact in most cases it rarely is. To execute it, it involves figuring out who your customers are, reaching out to them and having a conversation; a manual process to be sure, one that a lot of big brands really don’t like doing.
Duel is a Brand Advocacy platform that drives organic growth and retention for high passion brands, scaling the management of a brand’s relationship with thousands of their advocates.
Paul is the Founder and CEO of Duel, the Co-Author of his best selling book ‘It’s on the Meter’, and is also the host of - you guessed it - Building Brand Advocacy. Jac is also an integral part of Duel as the Chief of Staff and General Manager across North America. She previously worked at Lululemon for eight years where she was also the General Manager!
To listen them answer questions asked by our lovely audience, tune in to this episode of Building Brand Advocacy!
Paul: So this is a very special episode of Building Brand Advocacy. This is our very first live AMA. And now a little bit of a secret is that we are doing it live, but we've not told anyone that we're doing it. So if anyone stumbles across it, you are the lucky ones who have not promoted this at all. So this is just a little trial for trying to do it. So my name is Paul Archer, I'm the usual host and I am joined by the wonderful Jaclyn Crocker. Jac, do you want to give us a bit of an intro before we kick in?
Jaclyn: Hi, thrilled to be live. This brings me back to our COVID days when we first explored the world of webinars and we totally missed what Zoom webinar was, and we hosted like four a day capping them instead of going for one. I'm Jaclyn Crocker. Lovely to be here today, Paul. I am the Chief of Staff and GM of North America for Duel work very closely with Paul building Brand Advocacy for brands around the globe to scale their advocacy strategies. My background is retail, so I spent almost a decade with the wonderful Lululemon, who, for those of you that know it, Lululemon has built community into the core DNA of the business and has allowed, essentially those principles, has allowed that company to be at the success that it's at today. And that's all done through grassroots community building with employees, customers, ambassadors, pros, athletes on the ground to really retell that story. I could talk about that for forever, but we pull on some of the principles as we go. So, yeah, that's rock.
Paul: And so Jac's calling in from Toronto. I'm somewhere in the French Alps, other side of the Atlantic. Normally I talk about the kind of the high level wanky brand building stuff, and Jac comes in talks about retail stuff and words like sell through and stock control and things like that, that I actually have pretty much no idea how it works. Hopefully we'll be able to answer some of these things and we've got two ways of doing this. First of all, Jac's actually been chatting to a whole bunch of brand builders in the past 30 days or so as part of a research project we've been doing at Jewels. So we're going to kick off and talk about that as a summary. But we've also asked a few questions of brands because we weren't sure if anyone was actually going to turn up to this and listen to it live. So we've got a few questions pre prepared for that one, which we'll try and do and then see where it goes. We'll be here for about 30 minutes or so, so to kick it off, Jac state of Brand Building 2023. It's been a crazy twelve months for a lot of people. What's the vibe? What's the pulse? What are you hearing when you've been talking to these people and kind of who have you been talking to?
Jaclyn: Yeah. Okay, so been in conversation with a variety of brand builders and leaders for the past, I want to say, a couple of weeks now, and those who are responsible for driving the strategies forward with predominantly consumer retail brands with a direct to consumer channel. So definitely talking here in the retail space, selling product with passionate communities, passionate customer bases. There have been three in hosting these conversations over the last little bit. There have been three very distinct trends that have come out of it that everybody is experiencing today. And the first one, which in a way, we, like, glazed over a little because everybody's experienced it, but it's actually really important to understand and acknowledge as a whole are the Macrotrends. The Macro Trends of what the world is experiencing right now is impacting everybody. So I've heard words like the cost of living, crisis, inflation, supply chain. A lot of brands were I guess if we look at the D2C world, a lot of brands went into COVID. And if you had a D2C channel, like boom, success came right from that. Right? It was easy. Brick and mortar was closed. There were limited avenues. So brands needed to pivot, and they needed to be able to provide a really great omni experience and allow consumers to get the product in their hands when they wanted it. What we've experienced since, from a macro perspective, are changes. So what is happening right now is supply chains are being impacted. The buying teams are needing to make big bets on either if they are or not going to be able to sell through these products. And looking at the consumer behavior right now, people are still spending money, but they're spending it in a more condensed, concised way. So it's not as though brands aren't seeing customers come back to their companies. It's the fact that the purchase rate is not as high. So these macroeconomic trends are the number one thing that brands are experiencing across the board. Number two is the rise. And it's not new, but it's the rise in customer acquisition costs and it's the cut in budgets. So big brand leaders are being expected to grow their businesses with less money than they were previously. It doesn't go as far. So those would probably be the two the two big areas, the Macrotrends and then these brand builders wanting to really produce a result based on what they have. But the budgets are smaller. So therefore, the decision as to what channel they're being spent on or buying an ad here is more expensive this year and it sees fewer eyes is a huge battle. So the third trend is what channel is next? What channel do I use? Where do I turn to? How can I know if that next best decision is actually going to produce an ROI for the business or not? And how do I know that's where my consumer is. So some three really big trends, but pretty synonymous across the board with everybody we've spoken to. So if you're watching and you're in that as well, it's the norm. So the space that we're in now is now what? How do we fix this? How do we move forward?
Paul: What's that mean from a morale perspective? Because that's do more with less. That's never the easiest thing. What's the general vibe you're getting from the people you're talking to? Are they optimistic about things? Are they kind of excited about this opportunity? Are they feeling broken down? What sense do you get from that?
Jaclyn: Yeah, I think morale for those that lead teams, morale for the team leader is high towards the teams, the team leader themselves, it's not high. They are trying to essentially beat the system in a way that it can't be beaten. So there's a lot of feelings around being stretched too thin. So not only are customer acquisition costs rising and marketing budgets are being cut, but headcount is being cut as well. So the request is that there's more. We grow, we comp year on year, we do more than we did last year, we produce a better result with less. So morale is not as high as it has been. And I think one of the things that feeds into morale is we all thought, like even us in our business, we all thought that we were done, we were out of it, we beat it. Right? COVID ended, the world opened, everything was going to be a bit of rainbows and butterflies for a bit. And it hasn't been the trends, the predictions that we saw in Jan 2022 are still those same predictions. So there's not a lot of light at the end of the tunnel for a lot of these Senior Leaders either Brand Directors, CMOs, those that are reporting directly into a CFO, and it's hard, but they're making good decisions in order to use that budget to the best of its ability.
Paul: And is there any you said the third one there about new channels, different channels, people consistently saying the same thing about what they're experimenting with, or are they just spreading the net pretty wide and seeing what returns fished?
Jaclyn: Spreading the net pretty wide. So there's the standard Instagram, Facebook ad spend, there's venturing into TikTok for those that haven't yet because of the virality that it can produce. And the younger generation is ultimately, in a way, some of them, not all of them, but the younger generation is moving to social media channels as a form of finding what they need rather than going to something like Google. So brands don't know what that next big bet is yet, but they're trialing things like TikTok if they haven't yet, like Nano-influencers if they haven't yet, like customer loyalty, brand loyalty if they haven't yet, really figuring out what are those things that we haven't done yet? But the biggest struggle is being a request to show an ROI right away. And a lot of these brand led, brand equity led, brand awareness led activities that will ultimately grow brand growth in the long term aren't deliverable from a metric perspective within a quarter, within a month. So it's a big bet, right? It's a big bet for these guys to take and say like, hey, this is what I did last quarter. I spent 20k and not sure the results yet, but I promise you it's coming. It's a big bet right now.
Paul: Got it. That makes sense. Cool, I like that. The sense I'm getting as well from chatting to brands is a lot of people sometimes just want to give them a hug. It's all right, everyone else is in the same boat. It's just hard across the board. And I know that you're up against it, but this is normal. You're not exceptional. And I think often my impression is because of what we do, you and I, Jac, talk to lots of different brands. Most people we talk to and brands feel like they are really unique and every brand is the same and the challenges are unique and every brand is completely different. But actually, when you do see across we'll work with 50 to 100 or so brands a year, the similarities are huge, particularly when you look at different industries as well. There are one or two unicorn brands that absolutely smash it and you think they're going to be perfect. And when you do talk to them, almost always they are never what you expect they are, and that's always nice. But then most of them, the vast majority of them going through the same struggles, same challenges, the same questions of ROI channels, uncertainty, and it is the rarity that you get one that is really well led in the sense that they're like purely, this is what we're about, this is the only thing we focus on. And the pressure then doesn't sort of simmer down to the operators, the people, the execs, who are actually going to be delivering on it on a day to day basis.
Jaclyn: Yeah. I would say one of the biggest things that has transitioned, that I've witnessed firsthand in speaking to many brands over the last three years, is the introduction of the fear. And I'm not dissing any CEO, but the fear of presenting the business case to the CFO or the CEO is a lot more prevalent in 2023 than it's ever been. Brands had even during COVID, prior to COVID, post-COVID World had a lot more free rein to grow a brand in a more creative, experimental way, moving to different channels. And the brand builders that we were in conversation with never brought this up as a barrier. This was never a concern. So this macroeconomic trend has put on a new layer of understanding awareness and fear, essentially, of doing the right thing. And for the first couple of conversations that we were having, I was like, oh, that's interesting. Like, yeah, that's kind of similar to what the previous participant said. And by the end of doing too many to count now, it's been the exact same and it's new. So nobody is in this alone. And I would suspect that many of us think that my CEO or my CFO is the only one that's asking me to really put my case together. And why can't he just understand or they can't understand that building brand awareness is good, you're not the only one. It is the trend.
Paul: And actually we do have a question from exactly that. Do you want to ask it?
Jaclyn: Yeah. So Paul would love your take on it then, because I've given my two cent. But the question is customer acquisition costs are rising and budgets are shrinking. I know that my CFO and CEO wants to see the brand grow, but really doesn't get the whole you can't measure brand awareness and brand equity thing. Can you help?
Paul: Yeah, I wish. Could magic that one up. I think like we're saying, this is the same battle everyone's having across the board. My thoughts on this is that it's easier to look at individual activities and that you are doing and measure that and then add them up to a whole than it is to try and put a dollar sign over everything that you've got. So for example, if you were to do a community activity, you put something on, you engage with a number of people, what is each one of those individuals worth? And so you got two ways of doing this. You've got a bottom up approach, which is around those individuals, and you've got a top down approach. And so I'll start with the bottom up approach, which is, okay, well, each one of those customers got a lifetime value of X, but if they're a customer that's nudged into the higher echelons of a more passionate customer, what does that mean? And actually you can do some of the data research on your CRM to figure out what's that worth. So if you take an average customer and turn them into a passionate customer, what's the difference in lifetime value? But then also, if you've got a referral mechanic of some sort you can track, how much more likely are they to refer other people to it? If you don't have a referral tool, then ask people. Pick up the phone and just take a random selection. Call ten people and say, how many people have you referred to our brand who've gone off and bought something that you know about? It's not exact data, but it's actually often more accurate than what you're getting from the data you come back from, because of the number of dark social conversations you're not able to track. So maybe it's 10, maybe it's 20, however many you can get your hands on, talk to them and understand it. And then simultaneously also ask them how much they spent themselves, how many products they've bought, some of that will be tracked. If you're an omnichannel business, a lot of that won't be tracked. So taking an individual snapshot of a particular segment of customer, who's a fan, who's the kind of person who opens your emails once a month, for example, and saying, okay, well that kind of customer is worth X to us, which is the lifetime value of them and the value of the number of referrals that have got. So if I recommend two people, that is two lifetime values. And so that person has a value to the business that you're able to sort of track there. And so you can do that calculation and see how many of those engagements you've got and you can then infer the value of the activities that you're trying to put through. Does that make sense? I just realized I was adding lots of different things together there.
Jaclyn: Does quite hefty, quite hefty. Let me break it down. So how does somebody start this? What are the easiest wins in order to take a business case to somebody that wants to see the numbers?
Paul: A lot of the time the numbers that people are looking at are just the ones that are being measured. So you're going to look at your CRM and if you're a pure D2C brand, often that's 100% of your revenue and that's fine. But actually the dark social conversations, the advocacy that's going on, you have zero visibility of that. Sometimes you're tracking a little bit of the referrals that are going on, sometimes you're not. So as I say, the first step is to identify a number of people and then to call them and to get a deeper understanding of who they are as a customer. So you can build up personas that are more than just what your CRM or Ecommerce system is telling you that someone is worth. You can look at different ones and once you're able to pattern match between 5, 10 different people that look and roughly are about the same value, then you're able to attribute someone who looks like that in the CRM, probably looks like this in real life, and then you can value them so that you're adding more qualitative data. But at the end of the day, that qualitative data has a dollar sign next to it as well. So you can infer value and you can take that up to a CFO. This is particularly relevant for those who are having a budget slash because for example, I really want to do this really amazing authentic brand building activity that I know is going to drive serious value for the company. But my CFO is trying to get me to spend all that money on Meta ads because he can track or he or she can track exactly the revenue that we get from it. So you've got to build a better business case today than you ever had to before and actually you've got to have as many dollar signs on it. So look around and see where you can add value to an individual and so doing that from the bottom up, get a value on an individual basis and then you can add those together. Okay, we engage with 1000 people here and each of those thousand people are going to be worth X because they look a little bit like that. And so you can actually build up a more robust business case for all that revenue that isn't directly attributed through ads or whatever the case may be. So that's the grassroots up way of doing it, the top-down bit is that one really will depend on it. But probably the best way of measuring, for example, social activity and reach you've got is earned media value. That some people love, some people don't. What you're looking at here is trying to put a dollar sign to the equivalent reach or engagement that you've been getting from people. That could be influencers, that could be organic posting from your customers, brand ambassadors, whomever it may be if they're posting about you on social, what's that worth to the business? Well, if you were to have reached a million people or to have 10,000 engagements across 500 different social posts, what is that worth? You actually do have a really good benchmark as to what those things would be worth, which is your cost per click on Meta or TikTok or whatever. Because many of the times your performance marketing team have the ability to use the bidding system to have an average cost per click to get someone to like a post that you put out there. So you actually have an almost exactly the same way of inferring value. So what is 10,000 likes going to cost you in Meta ads or is exactly the same as 10,000 organic likes? And actually 10,000 organic likes are far more powerful so you're able to then infer the top down value of it as well. And earned media value can be done in a bunch of different ways. You could also be measuring the reach a little bit less exact from that using cost per mill calculations tons of different ways that brands are spending money to get reach. You use the cost that that individual brand is doing to reach their audience and use that to infer the value of the earned media that you've got. So hence earned media value. And between those two things, the bottom-up per individual basis value and then the top down earned media value, you tend to be able to get a better business case than you would have done previously. When you're going into battle which would have been like this is going to be cool, give me some money, which is great.
Jaclyn: My take on it now, right, you can't really say that anymore. My take on it now is that it sounds manual. Like what you just went through sounds really manual. And the reality is it is it is manual for the time being. Because right now teams aren't getting sign off on big spends, big budgets in order to invest in something until it's proven. So it is taking that time to understand the metrics, understand the impact of it. I can even relate from the sense that we are speaking to customers and we're speaking to the market and we're trying to understand what is happening out there to support in how we can support. From a brand advocacy perspective, it has been wildly beneficial to pick up the phone and we talk about it often and it feels like a lot of hard work and the insight and the information that we're getting back is beyond invaluable because it is speaking directly to the source and it's a feedback loop. So it's helping evolve. And oftentimes from a consumer perspective, big brands don't ask customers questions. They just do whatever they want because they think they know. If you're a big brand and you haven't asked a customer a question, it is invaluable to that customer to bring them into your feedback loop. It starts to actually propel the brand flywheel even from something as simple as that.
Paul: The number of brands that haven't done that, I mean, I've had to have asked that question 100 times and just such a small handful of people have picked up the phone to talk to their customer base and it's just so valuable. I think the reason is though, we're marketers, right? We're talking to brand builders and marketers in the consumer space. And when you are in the consumer space, you are one to very many. You're one to hundreds, you're one to thousands. You're one to hundreds of thousands. So therefore this idea of individualizing the customer and understanding them better feels quite abstract. The tendency is so I'll do a form and I will get people to answer a drop down question so they can get a really solid quantitative answer. And yes, that is great across the board, but actually that isn't as useful as deeply understanding what that customer wants and deeply showing up and providing them with that value that they've got. But on the flip side of it, deeply understanding the value that they've got, they've given you in return for it. So you are right, it is manual. But there isn't a single conversation. First of all, when you pick up the phone, people are always bowled over that you actually are bothering to do it. I mean, how often have you ever received a phone call from a brand that you've just bought a product from just saying, hey, just wanted to chat. Where did you hear about it? What were you googling? Just how did you find it, oh, did your friend talk about it? And inevitably, the thing is, they'll say, what did you Google to find it? Oh, I don't remember. Okay, well, what were you thinking? You've got to then dig deep, like two, three, four times to say, well, what were you thinking? What was happening with you at the moment? Throwing them into that second when they think about it, and then you'll always find it. That person will remember exactly why they bought your product. And they'll tell you a story and a narrative of their friend taught it, or they saw this influencer did a thing, or they were cruising an ads and they clicked on it, whatever the case may be. But you're getting a much fuller picture of who is buying your product, why they're buying the products, and how much they have generated for you. And all of that is ammo that you can take back to the CFO that wants to spend all your great brand budgets and spend it on ads. So it's well worth investment.
Jaclyn: Yeah, I say, like, no, I've never had a brand call me, but what I can share recently is venturing into the baby space as a mom. It's a new shopping area, first of all, but second of all, the mom and pop boutique brands who are trying to grow their businesses, and I'm sure there's niche communities out there across the board for every type of product they sell. Those are the brands that are taking the extra step to make a good name for themselves. So, including in product collateral when the item gets shipped, a handwritten note from the founder CEO saying, like, we are a small boutique business. Thank you so much for your purchase. If there's anything else we could do, or if you wanted to see a different product, we'd be happy to have the conversation. Right. It's like just putting it out there. Putting it out there to invite the person that has actually just spent their smaller wallet share that they have these days with you, to invite them into the brand building process. We could probably carry on forever. Shall we roll into the community side of things?
Paul: Yes. Right, so we do have a question, and obviously community is your jam with your background. So all businesses want growth, and Yarrow is still pointing towards building a brand community. What are the foundations and is it worth it? Big question. A lot to unpack there, but in your five minute summary.
Jaclyn: Okay, so let's think about community. And what's the definition of community? Community is a space where people share a like-minded interest and feel a belonging to something. So community, when it came to brands, got a little bit skewed in the last five years, I want to say. So there were some really amazing brands out there, like the Lemons of the world, like Harley-Davidson. They're the original creator of brand communities. Glossier, Gymshark, Allbirds like these really great brands who were growing the brand through community which is building relationships with customers on the ground to feel like they are a part of something. It became a bit of a buzzword. And what spiraled was that every brand needed a community, so therefore every intern was given the task of creating community, creating brand community. And what it ultimately ended up being in and around like 2015 2016 was a social media channel and the elements and the foundations of community, first of all come down to a shared interest. So Harley-Davidson great example, Lululemon great example. Both of those brands did not create the industry that they built a business around. Lululemon did not create the yoga fitness industry, they built a business around an already existing passion point. Harley-Davidson did not create the motorcycle riding industry but they created a business around the passion point of adventure and lifestyle. So what brands can do is understand from their own business perspective what is the passion point. The brands that we're seeing these days that we're working with, those that are coming out with these really powerful stories, all stand for something and they all share a passion point. So an example would be Tropicfeel like the passion of travel, Monica Vinader, the passion of sustainability and product beauty brands. There's a huge passion point around beauty brands. So it's brands looking to when they're building a community, what's the purpose of it, what's the intention? Get the foundation right? And the foundation is often that shared passion point that has nothing to do with the product, that has nothing to do with the product, that has nothing to do with what you're selling, but has everything to do with what you stand for. So in my quick answer, rather than writing a whole white paper on it is the foundations are understanding the passion point and understanding that it is worth it because it leads to long term brand growth. Communities build brand loyalty because customers are able to share their experience, feel like they're part of something and subconsciously your brand actually stays in somebody's mind. So when they're ready to make a purchase again, regardless of where they are in that purchase cycle because of the feeling the brand has created, they'll likely go back to you to make that purchase. A community is not worth it if a brand is looking for a quick sales hit to like a terrible quarter. So right now saying I think it's time to invest in community. By the end of Q2 I'm anticipating X growth in X market or across the board and if I don't get it, I will be annoyed is the wrong take on community. It should be. What are we doing now to build the foundations? To have our story be organically told by those who love us most, who are our customers. So in 3, 5, 10 years time we exist, because we exist for the community
Paul: Like tactically, just going deep in that. How long should someone expect before a community is going to be returning the investment? Because there's a lot of upfront investment in building, nurturing those relationships with people when you are going to battle your CFO, I need this budget, and they say, well, when am I going to see a return? What should you say?
Jaclyn: Minimum? Minimum? Minimum? Two quarters? Minimum if you have a bit more leeway, three, if not a year.
Paul: I would say more than a year in many cases. But the difference is the growth that you get from it is exponential and free, which is the other side of things, because if you think of community, bringing more people in your brand is the sum of the relationships with those people. And every single one of those people that feel connected to your brand, they each bring in one person, two people even you have not. A typical growth curve is linear. The more money you earn, the more money you can spend on ads. But actually, if you're able to get this community thing, it may flatline for quite a while, in fact cost you money and start going down. But that growth curve you get then is an exponential curve. And that is so hard to replicate in any other channel.
Jaclyn: Yeah, totally. It's like SEO. You're never going to write a blog post and then expect it to be your best traffic driving piece within two weeks even. Right. It's a slow burn for long term gain. Okay, next question.
Paul: A little anecdote from chatting to the CEO of Tough Mother phenomenal community led brand. And he viewed communities the most important thing. He had a call every single week with members of the community to engage with them. And they built these kind of super ambassadors who would give up their weekends to go and help coordinate the events that they put on. But they were the heart of it. And it wasn't outsourced to the intern. It wasn't the social media exec who just graduated two months ago. You do the community stuff. It was the CEO's job. And it was because of that it baked down throughout the whole organization and they did very well through it as a channel of growth. Basically every single gym you went, you can go into. There's always going to be someone wearing a Tough Mother top. That word of mouth machine that they brought, that sense of belonging, that being that it was baked into the product for sure. And it was easy in a space like that, much harder to do that while selling dresses or something. But it also was not by chance because it was something that was held from the top. So getting that buy in is a challenge, but I think it's something which has such big impact on the brand.
Jaclyn: Couldn't agree more. Okay.
Paul: Yes, next.
Jaclyn: One of our other sourced questions before we hopped on today. Paul, what is your take on Social Commerce and why is it important?
Paul: Yes, good one. I like to talk about a lot. So I believe Social Commerce is all revenue, commerce sales which is influenced by people. And so this is through social, right? So it is that terminology social. Now what it's not is easy to say. It is not someone making a purchase on a social media platform. And this is something where I think that most there's a lot of confusion around this because if I buy an ad on Instagram and then someone goes and makes a purchase through my Instagram store that is just an ad and a channel. There's nothing social, there's no human element that makes that that isn't any different to Ecommerce 1.0 that's been around for years. It's just a different variance. It's a different variance of retailing or whatever the case is. Social commerce is a phenomenally, it's a phenomenon. It's entirely different to that because this is about revenue which is driving through people, through humans. It's a person is what makes it social. So someone and now that could be an influencer with millions of followers. That could be influencer with 10,000 followers, 5000 followers or it could be Joe blogs down the street posting about his favorite product. It is all revenue which is influenced by a person on social media. And then you go off and buy a product and you may even go up and buy that product in a store, it might not even be attributed but you bought that product because of someone and it is that thing which is where the phenomenon is happening. And if you look at the Chinese market, just recorded a really interesting podcast about how social commerce has evolved there like far more advanced it is individuals are selling to each other, you're promoting it to your audience, you've got these big celebrities. The commercial element of content creation is really baked in into that as an industry and it's baked into the platforms and you can make purchases within it. It's a little bit behind in the west, but it's still massively happening. Think of every single purchase that everybody has made because they were influenced to do it by a person on social media. That could have been through a referral they were sent over WhatsApp that could have been about, their posts that their mate that they follow on mate from school that they follow on Instagram did about an experience they did think about the restaurants that people have visited, the hotels they've been to. Then you then add on to that the retail layer, the beauty layer that people are talking about, their products that they love. And it's an entire pyramid, basically, of people who are driving this commerce type of thing with a small number of people with a lot of followers at the top and a large number of people with a modest following in the middle and at the bottom. But this is the way we buy. But we buy today, and we'll continue to buy more. And that's what's changing. The things like the Gen Z report came out recently that Gen Z's third search engine was TikTok. It's not Google. It's not ChatGPT they don't care what other people, what the widespread websites or the brands have to say. They care what other individuals do. They look at the reviews. They will look at content that people have created, streams, real stories, whatever the case is, to get that information and make their purchasing decision based on that. And that is phenomenally different to the first ecommerce that came out with the first era of D2C brands. And there were really two winners that came out of it, because your distribution led in two ways. It was either through Ads or it was through SEO, and ads through SEO, which was basically Meta and Google. They are the entire gatekeepers of ecommerce. And so if you are a brand and you want to get your product in front of people so they can discover it, so they can learn about it, you have to go through one of those three gatekeepers. And that was really cost effective. In 2014 15, 16, you'd get these D2C 1.0 brands that exploded, like selling direct consumer mattresses and eyeglasses and all those various different things. And that explosion happened because they could figure out exactly their customer acquisition costs using those two gatekeepers now unsurprisingly, because they rely on a bidding mechanic where the more people pile into it, the more expensive it gets. They then got more and more and more expensive. And then there was that inflection point that happened during COVID when everyone piled in online and that cost of acquisition through those channels just skyrocketed. But simultaneously, what also happened is everyone came online and everyone was learning and consuming a lot more content through social media, and social media being the very broad scope of it. The YouTube content that people are consuming, Instagram obviously, TikTok being the more recent one, when people are consuming hours of this short form content every single day, and every single bit of content you're seeing there has the ability to influence someone to make a purchase. And it's that machine which is starting to churn, which is super exciting. And I think the kind of recommendation I've got for brands that are thinking about trying to tap into that space is that it's about playing the people, not the channel. So if a brand wants to get big on TikTok, it's not about launching a channel on TikTok and pushing out great content like it was when Facebook Pages first came out in 2010, 2011. It's about creating a community of people and getting them to create content on your behalf, because that is what the algorithm is looking for. Very few brands are able to really penetrate through that algorithm with good quality content. However, content, millions and millions of pieces of content are coming from true fans, customers, influencers, creators, whoever it may be. That is what is getting into that multiple hours a day that people are consuming. And so if a brand needs to tap into social commerce, it's about tapping into the people, it's about the social, it's about the humans. So nurturing those relationships with people so that they'll create content about your brand and doing that with a lot of them because actually so much of this isn't going to land, but you've got to have enough people pushing enough of that word out there to hit enough people. So that's then a question of trying to get those humans engaged with it. So I'll pause there for a second because I can go on about for a while they're without breathing.
Jaclyn: What is so on the topic of social commerce, what is so important for brands to get a grasp of now are the generations and how the different generations are behaving and interacting with elements of social which will drive the future of social commerce. Gen Alpha. Gen Alpha is the newest generation born in 2011, the year believe the year of the iPad. Is that what it is? 2011? We have digitally native vertical brands, but now we just have digital natives, right? And we're all an element of digital natives like Paul and I as a generation, but we're actually not true digital natives based on who is coming from a generational perspective. So the expectation of the younger generations to find what they want to find, to have different experiences across the board and to be served in an omni way is so much more prevalent and relevant now than it ever has been. The thing that also gets me is the take of Gen Z's and Gen Alpha. Gen Alpha still a bit young to be buying, but soon they will be their take on the pristine image, like the pristine content. They don't get pristine content. Why is it so polished? Why is it so put together? Make it real, make it authentic. So that is also a huge factor of this whole social commerce era.
Paul: And I think that's that thing about digital natives, they're social natives. So that is something which is about the way that their minds and their lives and their brains have developed during that formative years of when they are 8,9,10,11,12 and onwards into their teens. They have developed in a world where social media happens and when you're hyper connected to millions of different people in the way that they consume it, which means that the way that they think and the way that they get that world is so different to someone who didn't grow up in that period of time. And I think that so the digital native piece, that is someone who came of age in the internet at the early days, they got rid of incarther on the disc, and they started using AltaVista and things like that. And I think the cut off for that is somewhere between currently 35 and 40, depending on how advanced your parents were at the time. If your parents were in tech or had an internet connection, you were three, four years ahead. The majority of people got an internet connection, 1999. And so that basically means that if you came of age, started secondary school before 99, you're probably not a digital native, and therefore you probably don't get digital media in the same way that a digital native does. And I think that you start to see that. And there's a big thing at the moment of the age crisis in marketing, of it all being under 40. And actually they're really connected, those two things. But what's fascinating is seeing what's happening to social natives. Gen Alpha. Gen Z. They're coming of age. Their brains are forming in a different way. They're going to have superpowers that you and I just don't get. We simply cannot get our head around it, and we'll very quickly be out of a job, I think, because there's just going to be something that they get when it comes to content creation or playing this game. And social commerce will be so natural to them that they won't be having these battles. The brands, I'm really excited about the next generation of brands that haven't been formed yet, the social native brands. And you talked about Glossier and Gymshark and Allbirds and Eaves and folks like that, the D2C 1.0, they were the ones that came of age in the ecommerce era, right when they nailed Google and they nailed Meta, and that is why they were so successful. The early ones, yeah, like those earlier ones nailed that, the Caspers and the Eaves and things like that. Then you have that more social innovative ones, the Glossiers, the Gymsharks, they got community in a way that others didn't. But what's going to be fascinating is the brands are coming up now which are TikTok native, they're short form video native. They're about something different. And they will get and because, and if they're probably run by 20 something year old, they will get this world in a way that we simply will never do. And they will flourish and explode and become the next Gymshark. I'm super excited to see where that is because there's a few sort of emerging, but I've not seen any that are so clearly night and day, just doing things completely different to the status quo. But I think we're only 612 months away from seeing one of those emerge and really kind of trailblazing the new way that brands will grow in this decade rather than the one before. We did have one more, which is kind of we touched on it in a different way, but what channels am I missing exploring in order to acquire more customers.
Jaclyn: It plays into the social commerce idea. So if a brand thinks of their network, oftentimes it can fall in the realm of a pyramid. At the bottom of the pyramid, brands have customers and customers brands tend to do really well, either customer loyalty programs or something CRM strategies, whatever that is. And at the top of the pyramid, from a brand network perspective, those that are telling the story often sits with Macros or Celebs, and those are done pretty well. Commercial agreements manage. You know that if you're going to do a partnership with a Celeb, they're going to post about you, you're going to get a big uplift in traffic and views conversion, perhaps not so much, but you know that it's at least driving brand awareness. Where we think where I think brands are missing the boat on is that middle part of the pyramid, which are those social advocates. So who are those guys that exist within your brand network? They're brand fans first. They own the product, they love the product that are willing and probably already are talking about you as a brand for their own social audiences and their high trust because they're speaking to their own audience with their own aesthetic, their own look, their own words. That is an amazing channel for brands to tap into and to create something for. That probably in itself could be its own topic, which is actually like amplifying and activating on brand advocacy through social advocates to drive customer acquisition. But I would say from a brand perspective right now, as some final thoughts is who are the customers within the network that are already talking about you? And have you ever considered amplifying their story and giving them an opt in self-select channel to then power it even more?
Paul: Love that I'll add to that. And I think we were just chatting to a really cool surf brand called Vissla and they tap into a creator network and they talk about creators. We're not talking about influencer creators, social creators. They are people who are artists, they are surfboard shapers, they are environmentalists activists who may or may not have social reach. That actually doesn't matter. But the stories that they are able to tell about those people is just fascinating and it's outside of their remit, but it's still within their area. So they're taking these really interesting people and they're telling stories through them and they're using those. They're taking those stories, they are amplifying them through their own channels. But it's those people that tell that story and it's outside of just catching waves or whatever is that classic sort of surf content that everyone is doing. It's just really in a different area and it's bolstering up the brand in a space of finding people who are cool. And ultimately brand building is about cool. Now that Noddy, the founder of this, is about those intangibles and that intangibleness of cool is just so hard to put your finger on. So if you have a brand and you want to be cool, it's not much you can do. But what you can do is you can align yourself with cool people. Yes, some of those people might be they might have 50,000 followers and help give you some distribution, but they might not be cool. But there might be someone who doesn't even have a phone and lives in a van and does the most incredible arts and they're just the coolest person in the world taking their story amplifying, it means by proxy, you're going to get a little bit of that rubbed off intangible coolness. And so that is not quite a different channel, but it's a different approach to making your existing channels work. Because if you're buying ads, we can buy ads to amplify this content that people will consume and they are then sort of impressed by you and taking some of that. Or maybe you're just using that, putting ads for your own channel. I think that's everything. If you got anything else to add there, I think we're coming up to time. Thank you so much to everyone who actually zoomed in there. This has been a lot of fun. We are going to be putting this out onto the podcast and so anyone who's listening to it, love to get feedback like this AMA sort format. If you do any other questions? Should we carry on sort of shooting the shit, carry on talking about this stuff? Or is this something doesn't work? Love to hear about it. I've certainly had a blast. And thanks, Jac, for being my partner in crime in this.
Jaclyn: No problem. Thank you. It was great.
Paul: Cheers. Take care. See you laters.
We can't wait to meet you.