In This Episode
This week Tommy chats with Rael Cline of Nozzle.ai. Rael shares how you can use data to understand your Amazon customers better and then take action on those metrics to grow your brand. Listen now!
TRANSCRIPT
Tommy Beringer:
What's up you data-hungry Amazon sellers. This is your host, Tommy Beringer of the Sell Rank Win podcast for MerchantWords. And in this podcast, we give you the answers to your most burning questions, actionable insights that you can take away and implement into your business today. So let's go ahead and dive right into today's episode. What do you say? Let's go.
What's going on everybody. Welcome to the Sell Rank Win Podcast for MerchantWords. I'm your host, Tommy Beringer, and I'm very excited to have this next guest on with us. He came from building startups in the telecommunications in Adtech space and is now jumping into the Amazon sector. He's the founder of a one-of-a-kind SaaS company in this space. Without further ado, it is my pleasure to introduce you to the CEO and Founder of Nozzle.ai, Rael Cline. Rael, how are you doing today?
Rael Cline:
Oh, I'm good. Thank you so much for having me Tommy. It's great to be here.
Tommy Beringer:
Absolutely. I just want to thank you so much. I know you're in London, I'm here in LA and you're coming on at the end of your day. So I just want to thank you for that. I really appreciate you coming on later in the day.
Rael Cline:
Yeah, no problem. It's a little bit dark outside, but I've been looking forward to this for a while, so it's all good.
Tommy Beringer:
Absolutely. Yeah. Excited. I know we've been going back and forth a bit even from towards the end of last year and finally got you on here. So excited and I've been looking into Nozzle and it's very intriguing, very interesting. And I'm not going to lie I first thought it was just a PPC management software.
Rael Cline:
Yeah.
Tommy Beringer:
...at first glance and I dug into it more and I was like, "Whoa, this is something I haven't seen before." So if you could start off a bit about your journey, who you are, how you got here and what led you to creating nozzle.ai?
Rael Cline:
Yeah, absolutely. So for those thinking about where my accent is from, I'm from South Africa. So I grew up in South Africa the first gosh, 23 odd years of my life in South Africa. My background is actually in finance. So not in tech or engineering or any of those sort of things. So I worked in a couple sort of quantitative jobs within finance, private equity, investment banking type jobs. And then I came to the UK in 2010 to study finance at Cambridge University. And after that, I decided that I didn't want to be in finance anymore. So kind of an expensive way to learn that lesson. Studied all the wrong things, but I then went back to South Africa for about two years to do a mobile telecommunication start up around sort of messaging and voice and all those sort of things.
Rael Cline:
But my heart was really set on coming back to the UK. So after two years I came, 2013 this is now, came back to the UK and created a company called Media Gamma. So this is the advertising technology company called Media Gamma. This was very sort of engineering and machine learning focus. We were a spin out of a computer science department of University College London, UCL, and they had focused on really how to write custom algorithms for online advertising.
Rael Cline:
So what happens when you arrive on a website typically is there's a real time auction to show an ad to somebody. So in 100 milliseconds, there's an auction. Somebody wins the auction and an ad is shown to someone and we would be behind the scenes doing, how much should I bid in this auction? Or if you're on the other side, if you're sort of the seller or the publisher side, what's the max I can charge for this ad slot sort of stuff. So quite niche, to be honest.
Tommy Beringer:
It's almost, yeah, really. It's almost like the stock market, but you're doing it in the ad space.
Rael Cline:
So that's the whole thing. My background is in finance and when I came across what's called programmatic advertising. Computer algorithms are buying and selling stuff in real-time, I was like, well, financial markets have been doing this for 20, 30 years. There's got to be some stuff we could do to make a big impact here. And yeah, I mean, we landed up applying a lot of these financial sort of techniques in this markets, in this programmatic advertising market. So I don't want to go into too much detail and all that long story short, I sold that business. Gosh, about three years ago to a long time, New York based customer of ours. And then what was really interesting is when thinking about, okay, what next to do when I think about that Media Gamma experience.
And I really think about what worked or who were our best types of let's say customers. It was those customers that were always focused on kind of the end-to-end journey of an individual. So somebody views an ad, you get them to interact with the ad, you get them to download the app for instance, in that case. But then you're measuring what happens afterwards. You're measuring what happens after one day, 10 days, 30 days, six months. So you get to this idea of what's ultimately a customer lifetime value or a profit per customer. And then you're weighing that up versus the advertising budgets and effort that you put in to acquire that person. So that kind of quantitative approach was really interesting and they were very successful and we would help them on that particular use case.
So it's come to think about what our next one to do. Applying that principle to another area was really appealing. I had seen it work. And then you kind of quickly land upon Amazon for a number of reasons. Amazon itself, of course, it's just growing and growing. I mean, the ad revenue now is beyond $20 billion or whatever it is, it's just growing really fast. But very importantly, it's got both sides of their transaction. You've got the advertising side of things, and then you've got what happens afterwards. You've got that [order 00:05:58] data of what happens afterwards.
And Amazon has got the APIs. So as a technology provider, you can actually get hold of that data at scale, and you can start stringing together the story of what happens to these customers, how are they acquired? And after they buy something from you, what happens? Do they have a come back and buy again for instance. So that's really what Nozzle is about. And I guess in one sentence, it's a tool that helps Amazon sellers understand their customers on Amazon.
Tommy Beringer:
Awesome. So I love what you did before kind of spawned something into what you're doing now with Nozzle.
Rael Cline:
Yeah.
Tommy Beringer:
And just to understand a little bit about Nozzle, when did you know you achieved product market fit with Nozzle? How did you find that?
Rael Cline:
Yeah, that's a really good question there. So product-market fit is one of those things you can ask five, 10 people for a definition and you'll get five to 10 different answer, right?
Tommy Beringer:
Right.
Rael Cline:
Product market for us it's sort of, some of it is quantitative. Some of it is qualitative. So on the quantitative side, like what numbers are you looking for that could kind of achieve this, it's ultimately, for me, it's in fact to honestly, just pick one thing, it's hard to just distill it down to one, but it's probably about a retention rate. Somebody tries your product, they like your product, and they stick around for a very long time. So how long we retain our customers or put the other way, how often does somebody leave us is probably the best signal that you're creating ongoing value that people are prepared or paid for. And for me, that's probably one of the best definitions of product market fit.
Rael Cline:
The other side of the equation, is this a big enough market to serve? How many customers are potentially out there? How do you acquire those customers? How do you do that efficiently? Those are all separate questions, but if you had to boil it down to like a metric, and as I say, you'll ask 10 people and get 10 different answers. I would probably say something around our retention rate is being the most important thing.
Tommy Beringer:
Very cool. Yeah. Just like to dig into the business just a bit too, because it's very intriguing to me as well, so. Okay. Very cool. Now looking at the software, like I said, it was very interesting to me. And now if you could tell our listeners here, how as Amazon sellers, and I'm Amazon seller myself.
Rael Cline:
Yeah.
Tommy Beringer:
And how can we understand our customer better?
Rael Cline:
Yeah. Absolutely. So I guess just taking a step back and doing a bit of scene setting, the current environment for Amazon sellers and even for the foreseeable future, frankly, it is just getting much tougher to be successful. You've got a bunch of factors that are specifically to do with Amazon. And you've got a bunch of let's say macro factors, which supply chain issues and inflation and all these sort of things that are happening. But in the specific Amazon world, you've obviously got aggregators coming in that are very, we have buying, let's say one of your competitors. And then now you're thinking, gosh, how do I compete against that?
Tommy Beringer:
Yeah.
Rael Cline:
We've got CPCs that are arising and it's just becoming a lot more difficult to be successful. So for us, the fundamental thing really is you've got to think about building a brand and not just sort of selling a collection of products. So Amazon itself has been leaning in somewhat to this. So there's some data that's been slowly released over the last, let's say six to 12 months that give you more information about at a brand level, how you're doing, but really the most fundamental thing about a brand is its customers. And specifically it's loyal customers.
Rael Cline:
How do you measure a brand? And sure you can show a logo to someone. Do you remember or know who this is, that's kind of brand equity, but really when push comes to shove, what is a brand? It's a collection of the customers that interact with it and buy from it and repeatedly buy from it. So we're laser focused on the brand building aspect to be successful, but specifically focusing on your customer behavior.
Rael Cline:
So we're looking at what happens after that first purchase. So do people buy again, if they buy again, is it the same product over and over, or do they kind of go for variations or just different categories altogether? How long does it take between each purchase us? Is it 30 days, 60 days, half a year, whatever it may be? Do they buy the same thing? So all these sorts of questions and then crucially, it's not just like, here's the data, go figure out what to do with it. It's kind of like, well, how do I use this now to be successful? Whether your goal is to grow market share, whether your goal is profitability, whatever it is, this is just like the foundational building blocks of brand building and how to pull some frankly pretty powerful levers to improve your business.
Rael Cline:
I mean, primarily the tool as it stands today is for sellers who sell products that lend themselves to some sort of repeat orders. You've got to have a reason to buy again. So naturally if you're anything sort of food and drink related or pet related or health and beauty related, all those sort of, and there a bunch of other categories like cleaning, household cleaning stuff and all that. This data typically in other channels, if you're D2C, Shopify or whatever it is, this data is available and we see people making good use of this, but it's just some sort of black box in the Amazon world. So we like to say, we bring, I guess, data parody and inside parody to all the other channels with Amazon.
Tommy Beringer:
Yeah because Amazon isn't really surfacing these metrics that you're talking about. Customer lifetime value, customer acquisition costs, retention rates, right?
Rael Cline:
Yeah.
Tommy Beringer:
So that's what I love about the software.
Rael Cline:
Yeah.
Tommy Beringer:
And are you using, I'm just kind of curious, like what's the secret sauce a little bit, if you can dig into that. What metrics are you using from Amazon to kind of aggregate these numbers and are you using New-to-Brand at all, the New-to-Brand Metrics in any other new one, Amazon is surfacing.
Rael Cline:
Yeah. Ultimately it comes down to, you need some sort of unique identifier for an individual. I have no interest in knowing that it's Tommy. I just need some know that individual 1, 2, 3, 4. So when individual 1, 2, 3, 4 buys again or whatever it is, I can say, hey, I can attach that to the history of individual 1, 2, 3, 4. So we're never going to say this is Tommy and that's against obviously Amazon terms of service. It's kind of quick work-
Tommy Beringer:
Yeah.
Rael Cline:
So you need to be properly and we were, we went through an entire sort of vetting process right for this particular use case and how we're doing it and it's a whole another thing, whole another podcast, frankly.
Tommy Beringer:
Yeah.
Rael Cline:
But yeah, so it's nothing personally identifiable, but we're able to say these are the patterns that you're most valuable customers take or your least valuable customers take. And there's some really big insights around just because for instance, your main hero product has the most sales volume. It doesn't mean your most valuable customers are buying it for instance. All these kind of bigger kind of strategic questions. Those are the things we can help with. But yeah, to answer specifically answer your question, you need some sort of unique identifier, but it's not actually something that's personally identifiable.
Tommy Beringer:
Got it. Yeah, because they did take that away. I mean-
Rael Cline:
Yeah. Absolutely.
Tommy Beringer:
... back in the day, what was that? Say back in the day-
Rael Cline:
[inaudible 00:13:27] I'm I right?
Tommy Beringer:
Yeah. You could download it, download the customer info and then create look like audiences on Facebook and the market to them that way.
Rael Cline:
Totally.
Tommy Beringer:
Again, whole another podcast on that. That we can't do that anymore guys.
Rael Cline:
Nope.
Tommy Beringer:
So don't, if you guys are like, what, how do we do that? No, you can't do it anymore.
Rael Cline:
You can't do that and again, that's against terms of service so it's-
Tommy Beringer:
Yes. It is. Yeah. But yeah, interesting enough though, one of my customers, I had their phone number, they left their phone number and I had to reach out to them because there was just something, an issue with the order. But I got their phone number somehow, but it was shown in my backend. So I don't know if that's-
Rael Cline:
Yeah, fine. I mean, [crosstalk 00:14:12]. This is very clear on some of the use cases that you can use that sort of data for and all that. As I said, we went through the whole sort of vetting and all that. So yeah. But yeah, and it allows you to do powerful things. I mean, at the end of the day, Amazon's view of the world, at least to the seller universe, is very product-centric, it's ASIN centric. So a lot of the data you can get is ASIN level data, which is how many sales that I make or how many...
Tommy Beringer:
They care about your sales velocity, because they don't want you storing stuff in their warehouse. And that's why they clamp down on the inventory and given all those restrictions also.
Rael Cline:
Exactly. And even some people I guess, are thinking, well, hang on with Brand Analytics, they do report on something like a repeat order rate or something like that. But actually they're kind of two main differences here. The first one is it's a repeat order rate of a particular basin or a product, it's not the repeat order rate of a customer. So what happens if their customer buys product A and then goes and buys product B, that's not going to be captured by Amazon's data and Brand Analytics. And we see that quite a lot. The first product you buy is often not the second thing you buy.
So that whole aspect just gets completely missed in the Amazon Brand Analytics data. And secondly, the New-to-Brand is just a very different definition and Amazon's pretty inconsistent with how they define New-to-Brand, if you're on Amazon's DSP, for instance, last time I checked, at least it's a 12-month rolling definition. So if I haven't seen this person in the last 12 months and they go buy something, they're going to be New-to-Brand. But if you look in Brand Analytics, it's defined, I believe on a quarterly basis.
So if I haven't seen someone in the last 120 days and they buy on, let's say the 121st day, they're going to be New-to-Brand and that's not good because a lot of products are bought more than 120 days apart. All right. So they're going to be counted as New-to-Brand, both times, which is incorrect. So, yeah. So once we just sort of ignore all of that and we just say, it's kind of a strict definition of New-to-Brand. We say, have we seen this person before, if not, then New-to-Brand.
Tommy Beringer:
Got it. Yeah. You just service all that. All the good stuff for them and get rid of the nonsense pretty much.
Rael Cline:
Yeah.
Tommy Beringer:
So now, with all the data that Nozzle shows to its users, how can an Amazon seller like myself, an Amazon brand like myself, how can they take action on those data points in order to push their brand to the next level?
Rael Cline:
Yeah. So that for me would probably start with discussing two to three different metrics. So the first one you mentioned a bit earlier is this idea of customer lifetime value or put another way, profit per customer. So this is a pretty standard metric.
Tommy Beringer:
I think I like profit per customer.
Rael Cline:
I know right. It's funny, because in the early days, we definitely were all like customer lifetime value and all that and then we kind of realized it doesn't do a good job of like actually describing what intuitively it's not really-
Tommy Beringer:
Being transparent. Transparent is like how much money am I making-
Rael Cline:
Exactly.
Tommy Beringer:
... with this guy, Tommy Beringer. How much money is Tommy Beringer putting in my pocket?
Rael Cline:
How much is he worth to me? 100%, right?
Tommy Beringer:
Exactly.
Rael Cline:
So we're actually in the process of changing a lot of our language to be profit per customer. But yeah, it's precisely that. The average customer, how much are they actually worth to me over their entire lifetime with me? So just to give a quick example, you come in, in January and you buy something and the profit, not the revenue, not the sales, the actual profit I make, lest I'm making up numbers is $10. Then you go and buy three more times in that year for the, let's call it to simplify the same thing. So you've bought four times and each time the profit is $10. So I make $40 a year from Tommy. As I said, we're never going to say it's Tommy. We're going to say customer A, B, C.
But that information is so foundational to your business because it helps you answer a whole bunch of things and probably the most important one is the other side of what we like to say, the kind of the other side of the equation, which is how much can I actually afford to pay to acquire a customer right?
Tommy Beringer:
Mm-hmm (affirmative).
Rael Cline:
And if I know that my profit over 12 months is $40, it means I can spend up to $40 to acquire a customer knowing that I'll break even after 12 months. So that really has so many implications for how you want to go about customer acquisition via Amazon PPC or the DSP or driving external traffic, whatever it may be. But it gives you this idea of, it's basically reworking a break-even ACOS or break-even ROAS. A much better version of that.
Tommy Beringer:
Now Rael, I love this because now you can zero in and drill down, get super granular on your customer A, B, C, D, E, F, G, right?
Rael Cline:
Yeah.
Tommy Beringer:
And so on. And now you can say, "Okay, well, I know if I spend $40 in PPC money here, I'm going to make $120 back. So that's fine."
Rael Cline:
Totally.
Tommy Beringer:
I'll do this all day.
Rael Cline:
Totally.
Tommy Beringer:
I'm going to increase my budget. I'm going to increase my bids.
Rael Cline:
Yeah.
Tommy Beringer:
So now, how do we know specifically where to increase those ads and where to, because I know you guys do ad management on there as well.
Rael Cline:
Yes.
Tommy Beringer:
So my question is now, how do we dig in there, find the right places to place those ads on that customer that is going to give me $5 for every dollar I put in?
Rael Cline:
Yeah. So I'll tell you our process on executing it. I mean the vast majority of people we do ads for will also be using this tool. So we're kind of specialist in sort of eating our own dog food as it were on how to implement all these things. But it's, as I say, it's absolutely loads of people. I mean, most of the people, frankly, we're not running the ads for, they're kind of doing it themselves. But how to use this data, it really depends on your goals. So for instance, I'll give you two cases.
Rael Cline:
The process we work through is to say, okay, let's have a look and sort our ASINs by the total amounts of sales or the percentage of sales that are coming from repeat orders. So on, one extreme, we've honest and I'm not making up numbers in this case. On one extreme, we've had a customer that 80% of all their sales, were from repeat orders. I mean, that's just remarkable, right?
Tommy Beringer:
Right.
Rael Cline:
And it's remarkable on the one hand because I didn't really have to spend anything on advertising.
Tommy Beringer:
I mean, that must have been a hell of a product.
Rael Cline:
It's a pet. Yeah. It's pet food, I believe in.
Tommy Beringer:
There you go.
Rael Cline:
Yeah.
Tommy Beringer:
There you go. Yeah.
Rael Cline:
So really they don't have to work hard to acquire, to make money. It's just like printing money basically, but you can equally argue it's a very big missed opportunity because actually, if you put a lot of effort into your PPC or DSP, you should be totally New-to-Brand focused, because you just know the product is so strong and the customer retention rates are so strong that it's just really going to pay off. So the strategy there, is you don't want to go for branded terms. You want to be looking, even if CPCs are actually pretty high, you can actually-
Tommy Beringer:
So don't go for branded terms. And why not go for branded terms, because those are usually the ACOS and those are usually [inaudible 00:21:35] below-
Rael Cline:
Yeah. But you're not worried about it in this case. You want to optimize for New-to-Brand.
Tommy Beringer:
Right. Okay.
Rael Cline:
So New-to-Brand, you don't want to be showing ass to people who are searching for your brand really.
Tommy Beringer:
Okay. See what you're saying now. Okay.
Rael Cline:
Yeah.
Tommy Beringer:
Go. Continue. Go for it.
Rael Cline:
Yeah, no worries. So you could go after some pretty expensive terms, but get a lot of volume and you can afford to do it because you've done this calculation. I can spend 50 bucks acquiring someone and break-even off to 12 months sort of thing. So you've got a really good solid data behind you to say A, I need to be New-to-Brand focused, just because so much of my sales are coming from repeats. B, I can afford to be pretty aggressive here because I'm paying next to nothing to acquire someone. And that's one of the other metrics we do is this idea of customer acquisition cost. How much am I paying to acquire a New-to-Brand customer? And if that gap is large, that means there's a big opportunity.
Rael Cline:
So for instance, if over 12 months, my profit per customer is $40, but I'm actually paying $5 to acquire a New-to-Brand customer, that $35 gap is huge. And if I compare that to let's say another product, where the gap is much less, five or 10 or whatever it is. Well, I could obviously still spend on that other product, but that just means the opportunity is a lot bigger on the bigger the gap is. So we're always ranking your ASINs by the gap between the profit per customer and how much you're spending to acquire and the New-to Brand customer, and the ones with the bigger gap we would look into first to see, hey, is there a bigger opportunity to be more aggressive to get market share, go after those high volume expensive non-branded terms to drive all of that. Does that make sense?
Tommy Beringer:
Yes, it definitely makes sense. This is fantastic. So I think I need to try, I actually put your software to real work on one of my Amazon accounts, because basically what this is sounding like is I don't even need to have a PPC management software. I can have Nozzle and correct me if I'm wrong, I can have Nozzle basically run my PPC, do bid management and all that fun stuff.
Rael Cline:
Yeah.
Tommy Beringer:
Adding negatives, moving broad to exact. All that fun stuff.
Rael Cline:
Yeah.
Tommy Beringer:
And then also, I have a partner within Nozzle that can help me with, hey you know what, this customer right here in all this little cohort here, we need to double down on the bids for this because this is going to help your brand grow this way. So it seems like a no brainer to me to throw out any other PPC management software and just go with Nozzle and guys, Nozzle is not just a PPC management software. It's like on steroids from what I'm seeing here, [inaudible 00:24:29].
Rael Cline:
Yeah. I mean, they're separate things. On your own, you can sign up to Nozzle, get all the data. If you're confident on hopefully the products tells you what to do and all those sort of things. But if you sort of self serve in that way. Yeah. I mean, by all means the majority of our customers, that's how they operate. For those that also want the bid management piece and tying it sort of together, we would offer that as well. But yeah, I mean, our product starts at 77 bucks a month and you can just sort of go in and get that sort of crucial data and go with it. But I mean, just reach out to me as well. I love talking about all this stuff. So I'm very happy to do all that.
Rael Cline:
So yeah. So that for me is one of the most, one of the core use cases of why this data is just so valuable and basically means you're playing a different game to your competitors. Those competitors that are not doing these sort of calculations, can really fall behind in a rising CPC environment. They're going to pull back from certain search terms and we're making the opposite recommendation. We're saying you need to double down on these search terms because we've got the data to say, "Hey, you're going to make your money back in three months or you're going to make your money back in six months or whatever you choose to do."
Tommy Beringer:
And it's more of a proactive approach. It looks like with other software, it's like, you're doing it from the outside in, and this way you're doing it from the inside out, if that makes sense.
Rael Cline:
Yeah. We're focused. I guess the big differentiation for us, it was always focusing on your own dataset. As a seller, there's loads of excellent tools in the market around what the competitors are doing and what the market is doing and all that sort of stuff. But we're like, "Hey, no, one's focusing on actually what your own customers are doing. And that's really the core of your business, frankly." So let's really zero in on what they're doing and how we can make a big difference there. One of the other big things, it's kind of related, I guess, to this idea of profit per customer, but it's ultimately a customer retention rate.
Rael Cline:
If I have 1000 people buy the customer from me, and 200 people go buy it twice, my customer retention rate is 20%. And thinking about that customer retention rate can actually make a huge difference. So one of the stats actually I'm going to save it for the end, I think. But getting people to buy a second time is massively impactful to your business because the chances of them buying a third time, if they've bought a second time, double. So I set a customer retention rate of 20% from the first to the second purchase. From the second to the third, it roughly doubles i.e., 40%.
Rael Cline:
So do what you can to get that second purchase because the chances of somebody buying three times, double, and what that means for profits is we actually [drenal 00:27:23] the of numbers on this, is a seven X multiplier, meaning a 1% increase in retention rates. So if you go from 15 to 16% on that first to the second purchase, you can increase your profits by 7% in the next 12 months.
Tommy Beringer:
Wow.
Rael Cline:
So it's a huge multiplier on your business that is just completely overlooked. I mean, people yeah, intuitively know, yeah sure I should try to get people to buy twice and I can try do these certain things and we can talk about sort of tactics to do that, but now we're actually quantifying what that means and how impactful that is. So yeah, a lot of our strategies, we just gave the use case of focusing on New-to-Brand, but a lot of our use case as well, if you want to actually increase the lifetime value, if you think it's got a lot more potential, how do I increase that over time, well, you've got to get a better retention rate. So from the first to the second purchase is a big part of what we do as well.
Tommy Beringer:
Well Rael, so really quick before we wrap this up and we like to keep our podcast short, sweet and informative. In this last piece, I want you to tell us, say, you go over the shoulder look, just one thing you do, for the first maybe two to three minutes after you would log into your Nozzle AI account.
Rael Cline:
Yeah.
Tommy Beringer:
What do you do to look briefly, what metrics, what key metrics, some KPIs that you look at to say, "Oh, this is doing and good. Oh, I need to do this." And if you could just kind of walk us through that.
Rael Cline:
Yeah, absolutely. I mean, it really comes down to those two use cases. So if I'm interested in increasing New-to-Brand, because I have a really good retention rate already, I'm logging in and seeing what is the movement in my New-to-Brand in the last week, in the last month. And then related to that is the customer acquisition cost. Am I hitting, or am I above or below my target of how much the max I can afford to acquire a New-to-Brand customer? So that's definitely the first thing I would look at if I'm very New-to-Brand focused market share focused, all that sort of stuff.
Rael Cline:
If I'm very profitability-focused and I want to maximize my actual profit per customer, then I'm looking at basically retention rates. And am I moving the needle on retention rates? And you can do that via sponsored display ads. You can do that by Amazon's DSP. And you can do that via, let's say in terms of service compliant, obviously sort of inserts and stuff in your packaging to really move the needle on retention rate. So I'm logging in to see what's happened to the retention rate and what is the growth in the repeat buyer customer base.
Tommy Beringer:
Okay. So for example, someone who doesn't have any idea on how to run sponsored ads in Amazon, Amazon Ads.
Rael Cline:
Yeah.
Tommy Beringer:
One metric that I look at when I go into my PPC campaigns is the clicks. I'll sort by clicks.
Rael Cline:
Yeah.
Tommy Beringer:
And if I have a keyword that has given me 15 clicks without a sale, I will either immediately pause that keyword or I will immediately lower the bids, maybe 3 cents, 4 cents, 5 cents.
Rael Cline:
Yeah.
Tommy Beringer:
But now if I didn't know that, if I didn't have that information in my head, I would go there. I'm like, "Oh man, I don't know what the first thing to do here is," now, if I go into nozzle.ai, is there some learning I need to do going in with these metrics and understand like, okay what's the benchmark for this here, for this metric here? Is there a certain area that this metric needs to be in? Or does Nozzle AI do that for me? And does it tell me that?
Rael Cline:
Yeah, so at the moment, we're not reporting on sort of the advertising metrics, although that is on our roadmap for later in the year.
Tommy Beringer:
Well, sorry. I didn't mean like, just specifically advertising metric. I just used it as an example. I apologize. I just meant for like anything, you were just saying how you know of course, you know your software best, you go on, you look at the New-to-Brand metrics.
Rael Cline:
Exactly.
Tommy Beringer:
And then you kind of sort by customer acquisition costs and so forth.
Rael Cline:
Yeah.
Tommy Beringer:
Do you have tutorial videos in there just kind of show best practices and things like that?
Rael Cline:
Yeah, so we are very aware that this is a very different way of looking at Amazon. So expecting somebody to just sort of come in and sort of shift, there's an education piece to be done there and it's for us to do so. Yes. There's a whole bunch of whether as part of the onboarding videos that I've done, I've recorded myself explaining what this means and how to set your targets. And I mean, a very common question we get is, okay, my customer retention rate is 20%. Is that good? Is that bad? How do I compare to others in my category?
So we will give you a rating on how you're doing and ways to improve that. So, absolutely. I mean, we will guide you on firstly like almost a bit of an audit, your retention rate or your lifetime value is above or below average or you're amazing or whatever it may be, then we would say, "Okay, what are you focused on? Are you focused on sales, volume and market share? Or are you focused on profitability? And then what is the target setting off the back of that so that when you log in every day, you're always going to be aligned to how am I doing against that target." So that's kind of the process.
Tommy Beringer:
Fantastic. So at the end of every podcast, we like to give our listeners or have our guests give our listeners a piece of advice that they can take away from this podcast and implement it immediately into their life or into their business. You're a very successful man. So please let us know something here.
Rael Cline:
Sure. I can do maybe one of each. So the first one is, in your Amazon business, if you think your product lends itself to repeat orders, I'm not even saying, there's nothing to do with Nozzle even. The biggest impact we've seen honestly, is getting people to buy twice. So really put some of your ads spending to sponsor display or inserts or whatever it is to get people to buy twice, it fundamentally changes the profitability and the growth of your business to do that. So if there's one specific thing I would say to change your Amazon business, go and do that.
Rael Cline:
In life in general, I would say maybe, well, this is more company building, maybe not life in general, more by company building is we tend to, as founders, listen to experts. I wouldn't say maybe more than customers, but place a lot of waiting I guess on experts, but there's really no substitute for what your customers are telling you. So I've learned that the hard way, I guess, in previous businesses where you're speaking to people who've been in the industry for a very long time saying particular things, but then actually really it's the customers that and it's not necessarily what customers say, it's what customers do because those things can be very different. So focusing on what customers do is probably the strongest signal you'll have what to do with your business, as opposed to what experts say.
Tommy Beringer:
Absolutely. And I've learned that along the way, being a Product Manager here at MerchantWords as well, you have to listen to your customer.
Rael Cline:
Yeah.
Tommy Beringer:
As soon as customer feedback comes in, I look at it and see if there's something we need to iterate on immediately in MerchantWords, how many customers have given us this feedback? How many times? And kind of prioritize that feedback.
Rael Cline:
Absolutely. And it's interesting because like for this product, I mean, I guess it's kind of new and there's nothing really, at least for the Amazon world, that's out there like that. So we get really enthusiastic type customers where, I mean, they would even volunteer and say, "Hey, if you want to just test new stuff and run things by me, just call me up and we can schedule 30 minutes or something." So we've been really lucky to not have to work that hard to get all that.
Tommy Beringer:
Absolutely. Rael, now where can people find you? How can they contact you?
Rael Cline:
Yeah. So email and I guess in LinkedIn, are the two best ways. So LinkedIn is just Rael Cline, R-A-E-L C-L-I-N-E, Rael Cline. And then my email address is [email protected]. Yeah. I mean, contact me about anything. Happy to answer questions on use cases, data, anything and anything in between.
Tommy Beringer:
What if I wanted to build a startup in telecommunications kind of [inaudible 00:35:26].
Rael Cline:
Oh there you go. Can do that as well.
Tommy Beringer:
Well, fantastic. Rael I just want to say again, thank you so much for coming on. Really appreciate your time, taking the time out of your day to come on and especially that it's late out there in London on a Friday at that.
Rael Cline:
No worries.
Tommy Beringer:
So go ahead. If you drink beer, go ahead and have a beer and relax-
Rael Cline:
I will do.
Tommy Beringer:
... after this podcast. Or if you're a workaholic like me, go ahead and continue working, right?
Rael Cline:
Yeah. I can do both at the same time, I think.
Tommy Beringer:
Fantastic.
Rael Cline:
Thank you so much for having me Tommy.
Tommy Beringer:
Yeah, no, absolutely. And I just got to say, sorry to Jeff Bezos, we ran out time. We cannot have you on this episode, but we will try to get you on the next one. Until next time guys, stay awesome and be awesome. All right. Thank you guys so much for listening. And if you got any value out of this podcast at all, please let us know at the place that you listen to it at, whether it be iTunes, Stitcher, whatever it is, give us some love. Give us an awesome review and let us know maybe some things you want us to talk about on the next podcast. Till next time guys, stay awesome and be awesome.
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