Converting Cold Traffic: How $200K in Ads Generated $1.8M in Revenue

Felix: What was the transition like going from selling on a marketplace like eBay or Etsy, to your own platform? What advice would you give others who are considering making that move? 

Ace: The first thing that you get is control over your acquisition channels and retention channels. I started doing a master of management and marketing at the same time that we started Threadheads. What I could see in that course was it was really focused on traditional media, and that wasn’t really where I thought the industry was headed. My goal was always looking at digital media and working out, okay, well, how do we actually grow a business online only? 

One of the things with eBay is that you can do paid advertising and then they ship that over to Google Shopping. You can appear in organic Google Search through that and then, of course, you have the people that are just searching on eBay. But you’re really limited in the scope of channels that you can use to acquire and retain customers. Today the fundamental difference with a direct-to-consumer brand on Shopify is you need to be aware of how you can actually drive traffic to your website. We can go through some of the ways you can do that if you’d like?

A step-by-step formula for driving traffic to your website

Felix: Yeah, let’s dive into the channels you get to enable now that you’re on your own.

Ace: Earlier on what you’ll do when you have a website and you’re starting off fresh is you’re not really focusing on driving traffic. Even people that might have an acceptable conversion rate and their website might be optimized to a standard that they can actually generate revenue. In the early days, for me, it was all about conversion rate optimization and website tweaks. I’d be thinking about the color of my Add to Cart button, should it be purple or something like that, constantly. Those weren’t the tasks that moved the needles. You’d also be focusing and be bogged down with customer service and other reactive tasks. The hardest parts take the most time, consideration, and effort. In the beginning, founders ultimately need to be marketers. You need to be obsessed with growth. If you’re starting to think about getting your first customers in your Shopify store, SEO, conversion rate optimization, and email are foundational. You make sure you optimize your website for search and conversions when you launch your store. I’ll go into that. 

“If you’re starting to think about getting your first customers in your Shopify store, SEO, conversion rate optimization, and email are foundational.”

So, SEO. You go through your titles, your meta descriptions, trying to get ranking for your brand name is the first thing you want to do, and then some longer tail sort of keywords. Then you need to optimize your website for conversions. There are simple ways to do that, you might go and get reviews, have organized navigation. One of the goals on the website is you want people to be able to find your products, you want people to be able to order products that they want, you want them to be able to add them to their cart, and you want them to go through checkout all in a seamless sort of flow. 

Then you want your product page copy. Do you have compelling messaging on your product pages that can actually convert people? Can you persuade them to buy your product? Does it convey a value proposition for them? Then you use that in concert with product photography because people are visual beasts. Ultimately, they want to see what they’re buying. A combination of product page copy, so that is the written communication, and then the visual communication, so the product photography. Those together are what will get people to convert and go down your funnel to purchase.

Then, you’ve set your website up. You’ve done a bit of SEO, you’ve done your conversion rate optimization, you need to actually drive traffic. Both SEO and conversion rate optimization, which I probably focused a bit too heavily on in the early days, but don’t do that immediately. They won’t give you immediate wins. What you need then is to attract the initial customers with paid ads. The great thing about a Shopify store and a direct-to-consumer brand is it’s not like eBay. You have a lot of channels to work with. With paid ads, it’s Google and Facebook, period. 

I really encourage people who are starting off and learning, just go to YouTube to learn to do this stuff. Facebook you need to set up a prospecting campaign, and that means a campaign where you’re going to try and get cold traffic. These are people who don’t know about your brand, who don’t know about your product. You’re trying to get them to your website, you’re trying to build brand awareness. Ultimately, you still want that cold traffic to convert and that is dependent on having a good website with all the stuff that it needs to convert. You want to get people hitting your website so they at least know that you exist. From there, there are other ways to retarget them. 

The second thing I do is set up a Google Shopping campaign. Google Shopping is a really powerful way of getting traffic and it takes them to the product page, which is very close to conversion, so it’s fantastic. Then you set up search campaigns, which are the text-based ads that you see at the top of Google Search results, above the organic listings. The other thing I’d say in Google Search is also just bid on your brand name. I can’t emphasize this enough. If you type in Threadheads in Google, not only do you get the organic listing because Google has indexed us over time, and anyone who types Threadheads in Google will see us there, but you also get the paid listing above it. You’re getting all of this real estate for your own brand.

The whole point of building a direct-to-consumer brand on Shopify is that you’re building a brand. You want people to find you, you want people to know that you exist. Those people that you’re hitting with Facebook Ads, and even word of mouth, need to be able to find you. Bid on your brand name, and also try to get your name ranking in organic search. That’s already a great start to making sure that your name carries some value.

“The important thing is to get Klaviyo. There is no other real email solution that works so beautifully with Shopify. It’s an amazing tool.”

Then, the important thing is to get Klaviyo. There is no other real email solution that works so beautifully with Shopify. It’s an amazing tool. With that, you can set up flows like abandoned checkouts, and you can capture sales on the backend. The other way to retarget people is to retarget your warm traffic with Facebook Ads. You can actually create an audience of people that have visited your website and then show them ads. This is all basic stuff. All of those activities working together are how you sell products, and it’s all dependent on having a great product and a good website experience. We talked about conversion optimization, and those are the ways you actually get traffic to your website. A lot of founders at the start are focused more on product and experience, but you need traffic.

I would also say lots of YouTube videos. I honestly made more money from one YouTube video that I watched in 2019 than I did from my entire $100,000 degree. My entire degree that cost me $100,000 was less valuable to me and has made me less money than one 12-minute YouTube video by some French dude who’s good at Facebook Ads.

Optimize by addressing and removing customer objections

Felix: Let’s talk about the checkout process. What tips would give other entrepreneurs for optimizing the checkout process for conversions? 

Ace: I don’t think there is a silver bullet. I think there are things people miss out on. The first thing you go-to is a user review application. Again, all this depends on having a good product. You might use judge.me. I know a lot of people use Yotpo. There are Okendo and other great ones that are a bit more expensive. Judge.me is a great budget one to start with. You want reviews, that’s the first way of gaining momentum.

The second thing is, make sure your product descriptions and your product photography is really strong. A lot of people will cobble together their product pages. You need to make sure those things are really tight. If I were going to the theme store now, there are a few good themes. I don’t want to give them away, but there are a few vendors on the theme store that really know their stuff. Go to them and get an extendable theme that is customizable enough without knowing code. My friend and I know a bit of code, so we’ve been able to make adjustments to our website, but if you don’t have any programming experience, you need something that allows you to have a bit more control. You want to be able to communicate the benefits of your products really effectively, you can include some of that brand story that warms up a prospect and gets them to love what you do.

The number one rule with conversion rate optimization is go look at the best websites in the world that you look up to. Maybe they’re in your niche, maybe they’re not, but they’re on Shopify, and do what they do. It depends on the niche but focuses on checkout. The Shopify checkout has been designed by people at Shopify with the intention to sell. They know what they’re doing better than I do, so I’m just like, “Yeah, I’ll go with you guys. I trust you.” The checkout process, you’re all good with Shopify. That’s one of the great advantages Shopify has over competitors. 

Felix: Reviews are a very critical part of any business. Are you highlighting them in any specific ways? 

Ace: Not really, honestly. The product page is where you’re converting people, so drive traffic to your product pages. Google Shopping, great example. People click on a link in Google Search, it takes them to your product page. They look at your product photography, they look at your description, they understand why the product will benefit them, they scroll down, they get reviews. That confirms that there is some social proof this product has worked for other users. There’s so much trust built there, I wouldn’t have my reviews anywhere but a product page. You could use some testimonials on the home page depending on what your brand is. 

Felix: How do you decide the right combination of copy and information that you present to your customers on the product pages? 

Ace: It depends on the product. For us, we don’t have a lot of copy, but we really touch on the key points. First of all, we go on the key points of the product itself. The focus is on the fact that some of the designs are exclusive in-house illustrations by us, so we’ll say exclusive designs by Threadheads. We’ll say premium quality tee, 100% cotton. We’ll have that it’s ethically sourced because we have the accreditations for how we source our garments. Then we have printed in Australia because we have that Australian-made focus, that’s our market. We love Aussies, and that is how we position our brand.

You want those key points there. They’re for the product, but then do you have your shipping times there? Do you have a bit of flavorful copy about how they are going to actually get their product? What’s the exchange process like? Make sure that you have something that’s really accessible there that lets people know that they can exchange if that’s part of your process. I would encourage it to be. People are going to have objections when they’re on your product page, they’re going to think,“why shouldn’t I buy this product?”

It’s those objections that get people to leave. It may be price, it may be the fact that you don’t have exchanges, etc. Make sure you’re answering any objections that you can think of that they might have. As a general rule, if your product is more complex than a graphic T-shirt you need more detail, and you need to really communicate the benefits of this product over another one.

How Threadheads achieved a 9X return on ad spend

Felix: You had a 9X return on ad spend for Facebook and Google. You did this by focusing on cold traffic. How were you able to convert those prospective new clients? 

Ace: It depends on your store. We’re a unique brand in that we have lots of different customer segments. The first thing you do whenever you’re targeting someone with an ad campaign, whether it’s on Google or Facebook, is you’re thinking about what your target audience is. Then, within that audience, you want to think about which respective segments are going to respond to a given message or product.

In a prospecting campaign on Facebook Ads, I might think, “okay, I’m going to go after people that like cats and also like fashion and apparel.” They have a cat and some interesting clothing, and then I’m going to show them some cat T-shirts. That’s an example of segmentation wherein a prospecting campaign, these guys don’t know our brand. They might have never seen Threadheads, but if I put cat T-shirts in front of someone who has a cat and also likes fashion and apparel and the cat T-shirts are funny, they might buy it. There is a better chance of buying it than just showing it to everyone in Australia, for example.

I don’t know how aware your audience is of the changes that are coming with iOS 14. Apple doesn’t like Facebook and its controlling data for user privacy on their platform or on their devices. Segmentation will become even more relevant, and so you need to make sure that your targeting is on point. The same thing for Google Ads. If I want people to find cat T-shirts, I’m only going to make it relevant to the keywords that involve cat and T-shirt, and then I’m going to show them a landing page with cat T-shirts. All you’re doing is trying to match what the user is looking for or what you think their interest might be, and then the offer you put in front of them.

This is fundamental marketing that people were doing even in traditional media. On television, you might put a product that has a very broad appeal. Take the Australian Open. You might put things that are more related to sport on television if you’re running a TV ad. The great thing about digital media is it democratized the accessibility of it, just like Shopify has in a way. You don’t need to place a TV ad anymore, it’s not that expensive. So test, and experiment. Try to find those audience segments that are going to resonate with your message or your product. Through testing, you’ll find those segments and you’ll start to see a good return on your ad spend.

Felix: How have you set up your advertising infrastructure to be able to handle such a huge and diverse amount of segmentation? 

Ace: There are a few ways. It depends on what sort of ad creative you’re doing. If you do a carousel ad, for example, you could use a feed app. There is one called Awesome Facebook Product Feed. If I have a larger catalog store, you’d use a feed app. You do the same for Google Shopping as well. Then you could do carousel ads and you could update that carousel with products for that given segment like the cat T-shirts and showing them to a cat segment. That’s just one example showing this process.

You could do just a single image ad that shows someone wearing a cat T-shirt. We’re doing a gif one right now. Basically, this girl is in the cat dimension and there’s these cats sort of floating in free space around her in this portal. That’s a gif/video ad, short MP4 ad, and that drives them to a cat landing page that shows a Shopify collection. You don’t need to do carousel ads or anything like that. It’s more like, okay, what do I need to make to drive people to this landing page? Then, who do I need to show it to? Then you think of a creative or an ad around that.

Abandoned carts? Retarget, capture, and convert

Felix: Do you see differences in conversions when you’re using product photos on ads, versus model or lifestyle content? 

Ace: If you’re a brand like us, I don’t think it matters as much. First of all, you want your product images to be good even if they’re templated. Ours aren’t on models or anything like that, just because we have a huge catalog. We’re also not targeting specifically, men or women. From the get-go, for me, it was about, making unisex product pages. I want men and women to be able to go to these product pages and they can still buy the product. That was really critical to us. If you’re trying to start a high-end brand, let’s say you’re trying to start a sustainable fashion brand, you probably want it to be a bit trendier. You want it to be cool, so you need some good model photography.

In many cases, you’re going to use the same photography that’s on your product page in your ad. If you’re doing a photo shoot, you’re trying to organize that product photography for conversion rate optimization. You’re getting some really good photography that you can use across multiple channels. Don’t just use it in your Facebook Ads. Use it on your product page. First of all, there’s a good fit between those two. If someone clicks on your ad, then they get taken to a landing page, and it has the same image as well as other images, obviously. Then use that same image as a campaign or hero shot in your latest email. Use it in your organic socials as a post, use it as a story. What we’re getting our heads around at the moment as a team, because we’ve got lots of creatives, is let’s make content, and let’s make it omnichannel. Let’s use it across all of our channels. That is probably the best approach when you’re trying to come up with a piece of ad creative.

Felix: What do the sales funnel look like for these prospective customer campaigns?

Ace: We’re not a very high-involvement purchase. That means there’s not a lot of consideration that has to go into buying a T-shirt. It’s not that expensive. They might buy then and there, and we want them to. Most of the time with a brand like ours, we definitely want a good return from our prospecting campaigns. That’s true for most Facebook advertisers or media buyers, they want a return from their prospecting campaigns. It can’t just be all done on the backend with retargeting. That’s even more true given the sort of changes we’re seeing to the Facebook ecosystem coming.

Felix: If they land on your site and don’t buy, what is your retargeting strategy? What tactics do you try next? 

Ace: There are three ways. The first way is retargeting on Facebook Ads. That’s the most obvious way. Essentially a dynamic product ad, where you show them the products that they were looking at. That’s a very common one. 

The second way would be to make sure that you bid on your brand name in Google Ads and that you’re optimizing SEO or optimizing organic search so you can rank for your brand name. People might not buy there but they might remember your name. We see this quite commonly. They might then type Threadheads in days later. They go back to the website, and they still have that product in their cart. Or they go to the product page they were looking at, or they buy other products. You need to be present to your brand name. 

The third thing is, absolutely, pop-up form with Klaviyo. Make sure you at least give yourself a chance to capture their email. If they get all the way to checkout and then they abandon, you’ll get their email anyway through the Shopify checkout and that integration with Klaviyo. But if they don’t make it to checkout, if you have a popup form and they get their five or 10% code, then that’s another great way of retargeting them on the backend.

First things first, bid on your brand name

Felix: Bidding on your brand name seems like a more long-term play, but you’d suggest it should be a top priority from day one? 

Ace: It would be in the first. Think about it immediately. Say you started a store and you haven’t done that much SEO, or you have done your SEO but you haven’t given Google the time to crawl your page. If you start immediately running Facebook Ads, and let’s say, they don’t use an email capture form, and you don’t hit them up with retargeting on Facebook Ads, as soon as they leave your store, they won’t be able to find you unless they do a direct query and type in Threadheads.com.au. If it’s not a direct visit and they don’t remember your URL, they can’t find you.

You need to somehow be appearing in search. You might say, “I’m happy to go with the organic play and try to rank for my name using SEO.” That’s fine, but there can be certain problems with that too. What if your name is similar to some other word? For example, Apple, the tech company. Their name is also the same as a piece of fruit. If you’re starting off and your name is the same as a piece of fruit, you might run into issues there. More generally, you can afford to bid on your brand name. You don’t actually pay that much for the clicks. If it’s an exact match keyword then you’re not going to pay that much. The benefits of having that real estate to your name outweigh the costs.

Felix: As a T-shirt brand how do you make sure you’re checking all the boxes in terms of SEO and organic so that you’re providing Google with enough data to rank you? 

Ace: It’s overall content. I don’t think we’ve needed a lot of content, but at the end of the day, Google just vacuums up HTML. You need to have text on your website. That text needs to include keywords that are relevant to what you’re offering and what users are searching. The first step to optimizing any website with its on-page SEO is titles, meta descriptions, product page copy, and content on your home page.

The second thing might be trying to find what links you can get. If you’re not just doing on-page, you might try to think about, “okay, do I have a supplier? Are there any directories in my area for local businesses? Is there any way I can get some backlinks to my website?” What that does for Google is it increases your domain authority. Google tends to respect websites that have other websites linking to that domain. Those are some of the basic ways.

First of all, you need a great tool called Google Search Console for SEO. And then there is this tool called Ahrefs. It’s industry standard, it’s the best. Their blog is actually fantastic. If you need to start on SEO, you need to work out what are the first 10 things I need to do to optimize my website for organic search. These blogs are fantastic. There’s another guy called Brian Dean, who owns backlinko, he’s fantastic. Neil Patel is an industry heavyweight. His blog posts tend to border on 100,000 words though. I’d watch his video more than I’d read a blog post. Those are some people I’d look at if you’re trying to begin your SEO.

Stop reinventing the wheel, look to the pros 

Felix: When you’re retargeting a prospect or even an existing customer, what do you show them? 

Ace: I’m probably out of practice, and I need to do better with retargeting. At the moment, we use predominantly, DPA ads (dynamic product ads). We’ll show the products that people have been looking at on our website. We’ve gotten such a great return from those that I haven’t really explored other options. But I know that brands have been successful with retargeting using single-image ads, video ads, showing creative and then having copy that’s being playful about the fact that you know the user has been visiting your site.

There is a really great resource called Facebook Ads Library, and you can type in your favorite brand. One of the big brands at the moment that’s really crushing it on Shopify is called Allbirds You might pop their name in Facebook Ad Library and you can look at all of their ad creative running right now. That’s just absurdly powerful. I think the reason they implemented that was because of the election fraud, so they needed more transparency into what advertisers were putting out there. It’s turned out to be a great tool for marketers. If you need inspiration, you need to work out what competitors or successful companies might be doing on the front end and the backend, hit that up, pop their name in there and you’ll get a good idea.

Felix: There’s something to be said about looking for inspiration and not necessarily reinventing the wheel every time.

Ace: Absolutely. An ecommerce website, you’re always going to have the cart. Where’s it going to be? It’s going to be in the top right corner. A lot of these principles don’t change. There are very basic tenants of an ecommerce website. You need to see what other brands are doing and look at those fundamentals. With e-commerce, there’s this sort of intersection between user experience or UI and conversion rate optimization. A lot of people say that design experience is not very different from conversion rate optimization, that marketing and design are linked.

Ultimately, user experience is about allowing people to achieve whatever goals they have in any given experience. On an ecommerce website, it’s to find products they’re after and then to be able to checkout with them. The goals there align quite well with conversion rate optimization. Look at the best brands, look at what they’re doing, make sure it’s a fit for your brand, and then just implement it.

“Ultimately, user experience is about allowing people to achieve whatever goals they have in any given experience.”

Felix: We talked about a lot of avenues that worked well for you. Was there anything that didn’t work out, that acted as a learning moment? 

Ace: From a paid perspective, I think it’s just spending time on tasks that don’t really move the needle. Don’t think you’re really busy because you’re doing customer service, because you’re constantly sitting on your website and looking at what… All that conversion rate optimization stuff we said, just do it quickly. Get it together, get your product photography, all these descriptions, you can optimize and you can improve them, but it shouldn’t account for most of your time. The more time you spend in generating traffic, and thinking about that, the better you’re going to do.

One of the things I stuffed up with paid acquisition in the early days was not testing. If you don’t test, you’re going to constantly run into this problem of, “Oh, this campaign isn’t working, already, well, turn it off.” Maybe if you’d tested more ad sets or you were thinking about different audiences, different creative, instead of choosing a different color for your Add to Cart button on your product page, you would get closer to your goal of getting a good return on your ad spend. More time testing on things that really should be tested, is really important.

How to actually move the needle and achieve growth

Felix: What’s the question you ask yourself to make sure you’re focusing on valuable tasks that will move the needle? How do you keep yourself on track? 

Ace: That’s actually a really hard one. How do you be highly productive all the time? I don’t think you can be. I go in waves where I feel like I’m achieving a lot of things, and then times where I’m not quite getting as much done as I’d like. I’m not sure if this is true, but I find that the harder tasks, so the ones that require more effort, more thought, more research, are the ones that actually move the needle. 

I’ll give you an example, I have not done an “About” page. I’ve not done it for months. My friend Ash who works with me, he’s like, “Hey, have you done the “About” page?” And I still haven’t done it. That is something that adds a lot of value to the brand. A lot of websites have an “About” page, and we’ve gotten this far and we still don’t. So look, I’ll say, after this interview, I’m working on the damn About page.

So, work on the tasks that take a bit of time, take a bit of effort. You know intuitively that they’re valuable. That also comes from lots of research. You listen to podcasts, you’re watching YouTube videos, you get inspiration, you see what other brands are doing. You know it’s working for them, so that already is a great source of truth. You’ve got these people who know a lot more than you, I know a lot of people who know so much more than I do and I’m like, “Okay, well, it’s working for you. You’re sort in my niche, you’re in e-commerce, you’re a direct-to-consumer brand…” That will move the needle.

It should be focused on selling. As I said, a founder has to be growth-oriented, they have to be marketers. We’re talking about moving the needle. Customer service is great if you’re trying to keep customers and stuff like that, it’s really important, customer experience is everything but thinks about how you’re going to sell your next product.

Felix: You mentioned you bootstrapped the business. What were some of the most valuable things you invested in early on in the business? 

Ace: Stock. We needed capital equipment to some extent. Testing in Google Ads and having some sort of paid budget. Buying a website, unless you’re making your own custom one. I’d definitely advise if you’re starting a shop at the start like we had, getting a website from the theme store is the best thing you can do, make sure you pick a good one. Having enough money to throw at your marketing is probably the right way but you don’t want to be burning your cash either. You need to make sure that you’re testing enough, that you’re getting that validation, and your dollars are not going to waste. A lot of people might throw it into one campaign and then sort of let it sit there even if it’s not getting you a good return or they’ll just be really reactive, they’ll turn it off straight away. You need a balance there.

It’s the same for all ecommerce brands. You need stock, you need inventory, you need to invest in your product, but you don’t want to invest too much in your product that you don’t have enough to spend on marketing. There are so many examples of Silicon Valley brands that get all this venture capital funding, but they may have this brilliant product and they have no audience, they have no customers. You need a bit of money for your product but you also need a lot of money for actually driving traffic too. Striking that balance is really important.

Felix: What are your plans for the business in 2021? 

Ace: I’m not actually sure. We want to gel more as a team. We want to be far more collaborative, we’ve got a lot of creatives. We’ve got two illustrators, a graphic designer, some people in digital. As a team, we just want to put out some really good content. We want to increase our content game, push some more stuff out there, let people know who we are. From a financial perspective, we want to grow to an eight-figure brand. Then push into some other markets too, but we’ll see how it goes.