I recently sat down with Michael Hollenbeck, Finch's Chief Revenue Officer, to talk about our approach to solving problems for our clients and the evolution of changes that have impacted eCommerce brands over the past few years.
Michael is such a great guy, and I thought he did a terrific job of articulating why eCommerce brands ought to work with agencies instead of doing all of their performance marketing in-house.
He also discusses why it's critical that a brand's digital marketing be aligned with the Customer Journey for their biggest chance at success in both ROAS and efficiencies.
So here's Michael's take on the questions I asked him, in his own words.
Finch is an eCommerce growth marketing agency, and that means that all of the aspects of an eCommerce brand need to grow their revenue – those are the major problems that we solve, and that varies from year to year.
For example, in ’23, we saw a sharp left turn in the capital market. All of a sudden, what previously had been readily available capital for very low costs was far less available, and when you could get it, it was far more expensive.
Brands had to rethink their strategy of how they were selling their products online.
Where previously it was really about acquisition at any cost because it was so inexpensive to borrow, it became really important for them to be profitable from the first order or to be very capital efficient.
So, the problems that we're solving for people right now are how do they still continue achieving those growth goals, but how do they do that in light of capital that's far less available and far more expensive?
It's a great question because as these brands are being asked to do more with a lot less capital, they have to really think about that.
"Well, why don't I just do that in-house?"
"Why don't I just have my staff do those things?"
"Are agencies still relevant?"
It's incumbent upon us always to be a great partner to them and provide that value. And what that really means is if they "in-house" it right now, yeah, they're going to be able to run campaigns; however, a critical part of what an agency does for brands is really to strategize with them and to help them decide where is the next dollar spent most efficiently.
So, if I spend a dollar on this advertising medium versus the other advertising medium, which one is likely to yield the best benefit for our company?
And if you're having people do that internally, then that type of strategy isn't well-considered or isn't that well-conceived.
So, a critical function of the agency is to really help decide where to spend those dollars. And agencies have access to a tremendous amount of data that an individual brand might not.
So, we have a lot of perspective, and we see how things are playing out across broad markets.
It's been really interesting watching brands decide how they're going to handle the capital market and how they're going to do with the post-pandemic period.
It seemed like in 2021 and 2022, most people utilized paid media.
That was kind of what they did in entirety because you could spend the money on Facebook, you could spend the money on search, and the revenue would come in, and it was great.
But now that that's not the situation; things are very expensive.
The cost of acquisition, which is what it costs to actually acquire a customer through a social channel or maybe through Google, has gone up a lot. And then there is also concern about cookies going away, which means they are going to lose a lot of control there.
So, what we’re talking to our customers about right now is how they focus on the entire customer journey.
When you can just throw money at paid media and your business model works, that’s what people are doing, and that’s what most people were doing, but now they are saying “OK. Now that things are so expensive – capital is so hard to come by” – how do you cope with that?.
And the answer is that we have to focus on the entire customer journey.
So, from the point that customers become aware of you to the point that they consider you to purchase, how do you retain that customer, and how do we promote their lifetime value?
Those are the strategies that people know about.
They’re tried and true, but they work out of fashion because we didn’t need to do that.
So now we are reintroducing loyalty programs. We are reintroducing all of the communication mechanisms to make sure that we have effective communication and a continued relationship with our customers.
Yeah, it starts with people.
Excellent people, great expertise across the channels, and then process.
So not only do we at Finch have world-class experts in channels like Google, and Facebook, and marketplaces, and display etc., but we also spend a great amount of time working on the internal processes or coordinating all of that.
And the thread through all of those people and the processes is also the proprietary technology that we bring to the table in terms of dashboards and reporting.
As an agency, we need to make sure that we are dealing with this vast amount of rich data in a way that our customers can benefit from it.
So, the people, the processes, the technology that we deploy to make sure that everything is orchestrated, everything is coordinated. Then also, there is a great deal of transparency so that people can log into their dashboard can log into their reports, and they’ll know exactly what’s going right, they’ll know exactly what’s going wrong, and they’ll know what to do about it.
So, that’s how we take an eye on that for our customers.
The vision in ‘24 is actually a pretty exciting one because we still have a little work to do from what we learned in 2023 about how we best take care of our customers along the entire customer journey to make sure we are maximizing lifetime values and that we’re really providing the best experience for our customers
Also, though, people are trying to decide ‘what we do with this AI thing, and how that figures into – you know –how we go to market?’
However, people will continue to struggle with data.
I’ve been doing data for a long time, and still, the data volumes – they grow, and they grow exponentially.
And especially as a young brand, understanding how to manage that data – and man, it can feel overwhelming – but how do we go from a place where it feels overwhelming to a place where it informs every single action that we’re taking to make sure that our customers are happier – that every dollar we spend on marketing is more efficient.
So between AI and just the general use of data, there are a lot of great opportunities and just making sure that when we acquire a customer, we do a much better job of taking care of them and thinking about the entire lifetime relationship that we have with those customers.