Tero Isokauppila

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Hey everyone! Today, I share the mic with Tero Isokauppila, founder of Four Sigmatic, a company that aims to make medicinal mushrooms a more heavily researched and accessible commodity.

Tune in to hear how Four Sigmatic became one of Amazon’s best-selling coffees, which platform is their key to promotion and why you might want to turn to mushroom coffee.

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Michael Broukhim

Hey everyone, in today’s episode, I share the mic with Michael Broukhim, the Co-CEO and Co-Founder of FabFitFun, which offers an incredible beauty box subscription service.

Listen as Michael shares what makes FabFitFun different than their competitors, what their key marketing strategies look like, how he sold 2,000 beauty boxes in 2 days and continues to grow 300% YoY, and what it’s like to partner with his brother.

Download podcast transcript [PDF] here: How FabFitFun Brought in $40M in Revenue and 200K Subscribers Last Year TRANSCRIPT

Time-Stamped Show Notes:

3 Key Points:

  1. Being a successful company in the subscription industry means offering valuable products.
  2. Keeping a positive relationship with customers is of the utmost important—keep it friendly and fun!
  3. Influencers and big launches are instrumental for your business, but will not determine the overall and continued growth of your business.

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How We Instantly Raised Average Order Value by 10%

This is a guest post by Edwin Choi, VP of Marketing at Mobovida, a customer-driven, vertically integrated mobile accessory brand delivering fashion forward products direct to consumer. Check out our recent podcast interview with Edwin

At CellularOutfitter.com, a leading online retail site owned by Mobovida, it can be said that we have created a new religion centering on conversion rates. This can best be exemplified by the giant (slightly altered) Wu-Tang decal we had in our old office:

C.R.R.E.A.M. = Conversion Rates Rule Everything Around Me!

Sadly, the decal didn’t survive the move to our new office. It’s hard to fault us for being dedicated to this metric: it’s a key reason why we have been growing like a weed during my five year tenure.

With higher conversion rates, we were able to exponentially lower our cost per acquisition for new customers and pour the cost savings into capturing more marketing share on our top-performing marketing channels. We’ve also built a considerable moat as competitors struggle to keep up with the rising costs of paid digital marketing (I’m looking at you, Google Adwords).

Read More: 13 Quick Tricks to Increase Conversion Rates that You Can Do Right Now

What Makes Our Customers Tick

A huge proportion of our time during the last three years was dedicated to running hundreds of A/B tests through our constantly evolving conversion rate optimization process. A consistent, ever-present motivator for the blood, sweat and tears involved are the numerous learnings we were able to extract from our test data.

With a heavy combination of quantitative and qualitative data, we’re able to get into the minds of our customers and build marketing messages that resonate with our core personas. The wealth of information driven by Adobe Test & Target, Visual Website Optimizer and Optimizely tests helped us to intimately understand what makes our customers tick.

CellularOutfitter.com is built to handle large volumes of traffic and daily orders, so our testing methodology was perfect for scaling the business rapidly. However, what if each order was worth more to the business? One of our core metrics is the all-important “revenue per visit” metric, which combines both conversion rate and average order value into a telling key performance indicator.

The Impulse Buy

We decided to extrapolate our learnings about the customer with a new goal in mind: raising the average order value.

We knew that our customers loved a great deal and that they often wanted to buy more things on the site, but they didn’t know that we had certain deals or products available. Because of this, we could hypothesize this through some of the data that we ran in previous tests as well as effective event-based, triggered marketing campaigns.

A light bulb went off in our heads: what is one of the most effective ways that retailers increase average order size in physical retail? It’s the “impulse buy” section at a checkout aisle:

How We Raised AOV

This is the same reason why Fry’s Electronics, a large consumer electronics chain, sells candy in their checkout aisles as well. Customers waiting in line to complete their order are confronted with low-priced, high-margin items that they didn’t want or need. Close rates are high because the customer is already in line to make a purchase and the comparative cost of adding additional items to their current order is relatively small.

Also, it’s super easy! All you have to do is reach over to a bag of M&Ms, toss it onto the conveyor belt, and the retailer just gained $2 in average order value. It takes the customer just a few seconds and there’s very little decision criteria needed to add friction to the process.

We hypothesized that we could mimic this same experience online on our virtual shopping cart and increase the average order volume of our carts.

The First Test

Our first test would give a massive discount if the customer added a certain amount of items to their cart. This was mainly powered by two widgets:

We launched the test and crossed our fingers.

It bombed.

It sharply decreased conversion rates and the net loss from losing those orders hurt one of the most important parts of our site. In order to confirm this, we double checked the amount of carts created before, during and after the test in order to make sure it wasn’t influenced by pre-cart site factors. It was flat:

How We Raised AOV

We have losing results from our tests all the time, so we were excited to see what type of learnings we could dig up from this test. We started to look into the key losing metric: cart conversion rate. It plummeted 6.2%:

How We Raised AOV

At the very least, we proved that we could sharply change consumer behavior! This means that the presentation was effective enough to alter the path of our customers.

Let’s dig in further!

We segmented the customers who reached this page into three groups and looked at their average order values:


We really spiked up average order values for users that somehow powered their way through promo redemption. The proportion was just too small to overcome the drastic drop in conversion rates. We cross verified this with coupon use event fires in Google Analytics, Adobe Analytics and our internal reporting system and everything checked out.

The Second Test

We had huge learnings from our first test, so we decided to refine the test and launch it again. This time, we had additional data and hypotheses. We knew we could significantly influence consumer behavior, but we were turning off too many people with the minimum order redemption requirement. We decided to build custom promotional tiers based on data:


How We Raised AOV

As you can see from the above chart (KPIs blurred for privacy), we mined our cart data from our in-house business intelligence database and broke users out to certain cohorts based on the average number of items they had in their cart. We then asked ourselves this question:

Can we have a personalized widget that will get more people to “just buy one more item”?

This is akin to getting more people in the checkout line to buy a pack of gum. We also heavily reduced the amount of friction needed to add one more item to their cart. We had these hypotheses:

  1. We can affect AOV via tiered discounts.
  2. Cart level promotions get high visibility and therefore high usage.
  3. Users can be easily motivated to add 1-2 more items to their cart with discounts.

We decided to target certain Average Order “breakpoints” where the discounted AOV would still raise our sitewide based on our cohort data. The hypothesis was that we could upgrade cart AOV for our high volume cart cohorts if we tiered out our coupon code structure.

Learn More: LeadPages CEO Clay Collins Talks About How To Ramp Up Your Conversion Rates (Up To 75%!)

Test Launch (and the Aftermath)

We relaunched the test with a new widget – this widget would count how many items were in a customer’s cart and give them a special discount upon adding one more item. The discount was mathematically derived to give the customer a great deal while at the same time raising our average cart values.

The results were astonishing for average order value – it increased by over 15% and it stayed there over time! It also resulted in flat conversion rates which meant that we had a massive double digit net gain.

How We Raised AOV

As with any test, we had to cross verify the numbers with as many different data sources as possible to be sure that this was, indeed, the case. We built a custom dashboard that feeds data in real time from our business intelligence server to monitor “Big Carts.” A “Big Cart” is a cart defined as a shopping cart with an average order value at least two standard deviations above our typical rolling average:

How We Raised AOV

After the test was launched, our number of “Big Carts” increased by over 20%! The widget coupon codes also became some of the most highly used coupon codes on our entire site. They also have some of the highest conversion rates and revenue per visitor metrics as verified by Adobe Analytics:

How We Raised AOV

This single test has added millions of dollars in revenue to our site per year.

What We Learned

For every test that wins big, we always try to harvest the learnings from understanding our customers better into more wins down the road. The learnings from this test powered other similar winning tests on our mobile sites as well as countless hyper effective campaigns (for example, this was converted into a very effective e-mail campaign).

For us, this test also highlights the importance of testing for learnings instead of wins. When we lost heavily during the first test, our first reaction was not “Aw shucks, we lost. Let’s go for that win!”

It was “Let’s see what we can learn from this” – and the second home run test would not have happened without the first test.

Read more on this topic (and much more!) from Edwin Choi on his blog Marketing Muses.

What is your experience with AOV? Have you run any tests or learned anything new about it? Share in the comments below so we can all learn!

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Andrew Tsai, Jonathan Hong, Mike Zhang, co-founders of The Drip Club

Hey everyone, today we have a very special show featuring three of my friends from high school: Andrew Tsai, Jonathan Hong, and Mike Zhang, co-founders of The Drip Club, a trusted online e-liquid and vape shop. Andrew is the VP of Sales, Mike is the CEO and Jonathan is the VP of Products.

On today’s show we’ll be talking about how The Drip Club began as an online subscription service, similar to BirchBox, and evolved into a consumer products company, what they did to get to a quarter million Instagram followers without paid advertising (which they can’t do because of the industry they’re in), and how they scaled the effectiveness of working as a team with a divide-and-conquer strategy.

Download podcast transcript [PDF] here: How Drip Club Used Influencer Marketing to Get 250,000 Instagram Followers and Grow the Business 1,000% in One Year TRANSCRIPT

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hayden photoToday’s interview is with Hayden Slater, CEO and co-founder of Pressed Juicery, which is a company I’m a big fan of. (I drink their juice all the time.)

Hayden was a former fast food junkie who introduced juice into his diet and lost 60 pounds. He and his co-founders took their passion for good, fresh juice and built a business that’s now grown to over 40 store locations.

How an LA Guy Destined for Show Biz Fell in Love With Juicing

Hayden was born and raised in LA, and he says he always intended to work in the entertainment industry. Even when he was younger, he would work with his parents on movies and TV shows.

He went to NYU to study film, and when he finished, he moved back to LA and landed a job at HBO.

But because he didn’t take the time to travel abroad while he was in college, he traveled by himself to southeast Asia for seven months after he wrapped up an HBO show he’d been working on.

While he was there, he fell in love with cleansing and homeopathic medicine, so he decided to come back to LA to pursue it professionally.

Growth Over the Last 4.5 Years

Hayden and his two other co-founders started the company 4.5 years ago with one traditional employee, and another employee that would help them juice at night.

Their product caught on really quickly, and today they’ve gone from five employees to 600; and from one kiosk to just over 40 store locations.

Juicing by Night & Selling by Day

Hayden and his co-founders all had different reasons they were so passionate about their juicing business, but they were all strong enough to keep them going to get the business running.

For example, Hayden loved it because it helped him live a healthier life, one co-founder loved it because she loved the idea of masking nutrients in juice so her kids could eat healthier, and another had recently lost her mother to cancer.

None of them had any prior business experience, but they knew they wanted to create a best-of product, so they made all their decisions based on what they wanted as customers.

When they started, they got a cupcake company in Beverly Hills to give them their kitchen to make juice in at night, and they rented a 22 square foot broom closet in Brentwood.

Every night, for six to seven months, Hayden would make juice with someone he found on Craigslist from 10 pm to 4 am, load up his car, and take it to their only “store” which was a kiosk.

From there, he would go get some sleep, and another co-founder would work their store, selling the juice.

Maintaining High Quality at Their Current Scale

From the beginning, quality was the most important thing, and it was something they were never willing to jeopardize just to be able to expand. They’re not willing to add fillers like water or apple juice. Everything’s got to be 100%.

And though they consistently receive loads of franchising inquiries, they don’t like the idea of having their product out there without being in control of it from beginning to end, so that’s not something they do.

In the early days, to make sure they kept their quality up to par, they had to take food safety classes and were doing loads of online courses to educate themselves on juice manufacturing.

When they really started to get to scale, they assembled a team of food scientists, experts in the juice industry, and nutritionists to lead their quality department.

The Pressed Juicery Lifestyle

Growing up in LA, Hayden said he found health and wellness to be a bit elitist, daunting, and intimidating.

This was something they wanted to break down with Pressed Juicery to make it accessible, enjoyable, and fun.

They started Pressed Juicery with the idea that the product would be for absolutely everyone… so just like a kid in a candy shop, you could walk in and see a flavor or juice that appealed to you.

With their approach, they tell people to come in, try the juice, and if they like it, to keep drinking it. But if not, to find something else that works for them as an individual.

Differentiating Themselves From the Competition

Juice is something they didn’t invent, says Hayden. It’s been around for thousands of years.

That said, he admits it’s been interesting to watch different companies in the space.

In previous years, he says many juice-centered companies would mask their juices with colors and fancy names, but they decided to opt out of that and keep everything simple from the beginning.

Over time, a lot of competitors have entered the space. And in the early days, Hayden says he would lose a lot of sleep to the competition.

But, about a year in, he realized that competition was a good thing because it creates awareness, educates, and informs people of what juice is. And at the end of the day, he says consumers are smart enough to let the best product win.

Growing to Their First 1,000 Customers

Pressed Juicery hasn’t ever done typical marketing, and most of their business has grown simply via word of mouth.

He said they had a great response early one for two reasons:

  1. They offered a stellar product at a great price point.
  2. They released at the perfect time because there was a demand that had already been built up when they launched the product.

They’ve also been fortunate to be located in the heart of LA with Hollywood to support them. So when Nicole Richie tweeted about them, for example, a lot of people would get curious to come check it out.

They also get a lot of celebrities voluntarily wanting to take part with their brand, or with their lifestyle site, The Chalkboard, which also helps drive awareness.

Store, Package, Label & Site Design

For their first few stores, Hayden says they just threw up some reclaimed wood and called it a day.

But after store three or four, he realized that Starbucks, Anthropologie, and other big guys were using the same look, so he also wanted to create something that stuck in their stores.

They wanted a space that was inviting, warm, and that felt high-end. They also wanted to keep the feel of California, since that’s where their roots are.

So when you look at the store design, says Hayden, everything is in neutral colors, which is intentional… it makes the wall of juice pop and tell their story when you walk in.

And all the little details add up to a certain feel, says Hayden, even if you can’t pinpoint what those factors are.

For example, all of their doors are made of white oak and glass. They feel heavy when you push them open, which gives a more high-end, luxury feel than a typical beverage or quick-serve shop.

Customer Acquisition Beyond Word of Mouth

For Hayden, the best way to acquire customers is trial.

Once you get someone to try a juice, he says, chances are that they’ll come back.

So they’re constantly working on getting their product out to people who haven’t tried it yet and engaging the community.

For community engagement, they do a huge opening event when the open a store where they give out juice, partner with like-minded businesses, work with schools, and just get the word out the best they can.

Social media is a big part of it, he says. Foursquare, Instagram, and Facebook all play a part in acquiring customers.

In fact, to date in 2015, they’ve had 1.3 billion media impressions in 170 countries by spending less than $20,000.

Getting Shut Down by the Health Department: A Huge Struggle to Recover From

Six months into their business, when they were sharing a kitchen with a cupcake factory, they were shut down by the health department because they found out that you’re not allowed to have two separate businesses operating in one location.

It was an honest mistake, but they had to bring a whole legal team together to help them get turned around.

It seemed like everyone was saying that it would be impossible for such a young company to recover from being shut down so publicly.

But, instead of getting too discouraged, they worked with the health department and got their first store open in less than three weeks. And their re-opening day brought in the largest number of sales they’d seen since the inception.

“There’s always options,” said Hayden. “There’s always ways to get through it.”

Publishing a Book

Since there aren’t Press Juiceries on every street corner in the country, Hayden says that publishing their book was a big part of of taking a step forward in their company to help give people the access they need to more accessible health food.

The goal of the book was to give people the tools they needed to do juicing on their own, so they’ve got almost every single recipe of theirs in the book.

The idea of a book was always a fantasy for them, says Hayden. But once it came to fruition, he says they realized that it was months and months of work, rather than the couple of weeks initially imagined.

They had to collect recipes, work with book publishers, work with photographers, and go through a lot of trial and error.

It was a big undertaking and a big expense, costing them somewhere around $60,000 at a minimum.

Advice to His 25 Year Old Self

“Do exactly what you’re doing.”

“I made a lot of mistakes at 25,” says Hayden, “and I don’t regret any of them.”

At 25, he says, a lot of young adults don’t know what they want to do professionally, which is fine. You don’t need to discover it immediately, you just need to do things that make you happy.

“You’ll discover in that process what you’re meant to be doing.”

Daily Structure

Hayden says he’s always been a morning person, but starting a company has really made him wake up early.

He says he wakes up between 5:00 am and 5:30 am almost seven days a week, goes to the beach with his dog, does a workout, and eats something clean before he heads to work.

From 8:00 am until noon or 1:00 pm is when he really cranks stuff out, he says.

In the afternoons, he visits stores, scouts new locations, and does meetings in his existing shops. Lately, he says, he’s been doing a lot of traveling since they’re expanding pretty aggressively out of California.

The benefit of spending so much time on-location, he says, is that they’re able to make decisions based on what their customers really want, not on what they would decide by sitting down in a remote office.

One Must-Read Book

Hayden suggests The Art Spirit by Robert Henri, which is a work of an artist who, when he passed away, his students compiled all his notes on various artworks.

He says it’s a book you can flip to any page and enjoy, and something he goes back to periodically.

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