Ecommerce: Conversion Rate Optimization Misconceptions and Best Practices with Raphael Paulin-Daigle

Hey guys, we're here for episode 11 of the e-commerce opportunity where I'm joined by Rafael. Rafael, how are you my friend? Hey man, I'm doing great. Thanks for having me. Good, of course. I'm pumped to have you here. Do you mind kind of starting with what you're working on? Yeah, so I run an agency called Splitbase and we do conversion optimization and landing page optimization for direct-to-consumer brands. So we typically help e-commerce brands that are between $10 million to $100 million, just really optimize their landing pages and website to improve performance. I always say people relate to the term conversion optimization, but at the end of the day, what we do is really customer experience optimization, business optimization. We're trying to make sure that your marketing materials, your website just kind of relates more to your customers. I love that, man. Do you mind breaking down what is CRO? What are some of the things you do? I think it's one of those words that everyone hears CRO and they have different definitions. How would you define the kind of CRO and the work that you guys actually do? Yeah, so I'll probably start with the biggest misconception about CRO because this is what I see very, very often when I talk with brands that maybe aren't super familiar with CRO. And the thing is, I think the issue stem with the term CRO, right? Conversion Rate Optimization. People think that conversion optimization is about optimizing the conversion rate. But the truth is, it's not about that one metric. It's not even about your average order value. It's about optimizing for the action that you need your visitors to take, right? It's optimizing for a better experience. So yes, ultimately you make more money and you're more profitable and that your lifetime value goes up and all of that. But the way that I like to look at conversion optimization is that we're really trying to learn. The first step of it is trying to learn about your customers and seeing, hey, people that come to your site, right? As an e-commerce store, what are they looking for? How are they navigating? What are their needs? And positive things that they want that you need to understand to improve your website or landing pages. So that's kind of like really the first part of CRO is about better understanding your customer. It's about doing that research. Once that's done, really, it's about utilizing that information, those quantitative and qualitative insights that you gather and building up an experimentation program, right? If you think of, you know, your science classes in school, right? You had to, you know, write a hypothesis and run an experiment and see what led to which result. At the end of the day, conversion optimization is the exact same thing. Based on the data you have, you know, you come up with a hypothesis. Well, let's say your customers, I don't know, you find out that your customers really like or convert really well with user-generated content, right? UGC. Well, then maybe you're going to have a hypothesis saying that having UGC on the product pages instead of campaign shots may perform better, right? You actually don't know if what works best, so you're going to go ahead and test it. So that's, you know, the second part of conversion optimization. It's about testing and validating or invalidating your hypothesis and learning more about your customers in the process. And that's where I think people get it wrong. They think it's about trying to see what's better and the wins, but it's really a research methodology. It's about researching, better understanding our customers, and then, you know, making decisions that will to a higher revenue level. Wow. I love that. Thank you. How did you get into all this? Like, how did you get into CRL? How did you personally kind of start your career and ultimately start like the agency around this? Yeah, I was, I can't remember how old I was, but I think I was like in ninth grade or I was in high school. And I remember I just really wanted to start an online business or not even an online business, but I just really wanted to do something. And you know, obviously like when you're back in school, there's not much that you can do when it comes to building a business. Or, I mean, all the ideas that I had at the time were not necessarily achievable for someone in that position. Now, I don't think I don't even know if Shopify existed back then or how well known e-commerce like Shopify stuff was at the time. But I always had a big interest in marketing and I kind of built this website where consulted where small business owners could send their website, the link to their website or their marketing materials to marketing experts would then kind of review those marketing materials and provide feedback to those small businesses while building that website. You know, at the end of the day, I had no idea how to run a business and it never took off because I didn't realize that I didn't have website traffic and how to really get that website traffic was a whole other story. But I was, I just really wanted this thing to succeed and to work. So I was, you know, I started learning about, you know, how to get clients online and that's kind of how I found conversion optimization and, you know, let's not forget conversion optimization at the time. And I may be confusing the timelines, but you know, when I first started learning about conversion optimization, I thought that was the problem of the businesses I was trying to launch is that the website wasn't resonating with customers or that it didn't have the right buttons or things like that. I didn't know about traffic acquisition and ultimately, you know, I just started reading more and more about it. And keep in mind that conversion optimization back then, like there was no CXL Institute or big blog on the topic where you could learn about it. There was Brian Eisenberg who pretty much coined the term and he had a course on the topic that was actually quite hard to find, but there was very little, but I was just like so obsessed about it. And I thought it was super interesting that over the years, I, you know, I did some marketing. I was the freelance digital marketer, did a few things here and there and I would always gravitate back towards conversion optimization, you know, and years later after a small break going into Bitcoin and things like that, I was like, hey, you know what, like marketing is still my thing. And that was probably, you know, five years ago when I initially started Splitbase and I was like, I just love this optimization aspect. I love e-commerce and so Splitbase was born, you know, I was doing freelancing, but I wanted to do more. So I had to build a team and, you know, now here we are today. I love that. Thank you. I want to talk about Splitbase in one second, but before I do, I would love to get your take on like who should be leveraging CRL? Like what size business is like, does it make sense? Like for you right now, you're focused on, it sounds like 10 million above, right? So eight figure plus companies due to your expertise and your size and probably what you charge. But like, where should someone start? Like, is it day one? Is it X number of visits? Is it X number of dollars in revenue? What does that look like? Yeah. So I think when someone starts, right, when you're just starting out, honestly, you're much better off focusing on traffic acquisition than optimization because, you know, in the early stages, truth is you just, you need to figure out like, is my product resonating with, you know, customers? And I mean, even before that, you're trying to understand who your customers are. You don't even know who is, you know, your, your core target. So I think in the beginning, you know, I see sometimes brands that are starting out and they reach out to us and they're like, Hey, you know, we need to help with CRO. We're about to launch soon. And they're brand new. Truth is, yes, there's about a thousand blog posts by marketers who likely know nothing about conversion optimization, but that wrote it for SEO purposes, you know, that talks about how you should be testing, you should be doing this and that the truth is look, well, to me, conversion optimization is about better understanding your customers. And from that point, I mean, you can do AB testing, you can do other things. So I would say first, you know, get some sales, you know, launch, you're going to go off off of your own assumptions in the beginning anyways, right? But once you gain some traction, and where's that number? I can't really give a number. I don't think there's a magic number. But at some point, right? Once you feel like you have some traction, well, maybe you don't yet have enough traffic to AB test, right? And to really run those experiments. But doesn't mean that you can't improve, right? conversion optimization is not AB testing. AB testing is something we use in our work as you know, conversion optimizers. But what I think that businesses can do when they want to get started with conversion optimization is number one, hey, call your first customers. Like, you know, to me, and you know, I've seen this firsthand trying to launch businesses that failed, you know, way before split base. And it's that very often, you know, on entrepreneurs that launch e commerce businesses or online businesses, you know, think that they can build the company without really talking with customers. But the truth is, your screen, it gives you this false sense of confidence about how well you understand your customers. And the truth is, until you actually pick up the phone, and call your customers, read all your support tickets, you know, send surveys, and just really understand who these people are, why they're buying, why they're hesitating to buy and things like that, um, you know, you're still gonna be operating off of your blind spots. And I mean, we're all we all have blind spots, they're always going to be there. But, you know, I think the biggest thing to remember is when you gain traction, do not forget to communicate with your customers. Because when you think that you really know your customers, sometimes that's when you realize that you've been missing out on an entire segment or something else, right? So that's, that's kind of my, my guidelines when it comes to arrow. Awesome. Yeah, I appreciate that. Thank you. I do want to talk about your agency. And I want to talk about sport based. What is the team size look like? And how do you go about finding new folks to to join the team? Yeah, so I have to say, finding new team members is probably one of the biggest challenges ever. Now, we're right now I think 1415, something like that. The biggest challenge with finding new team members for us is that there's a lot of people, for example, who does email marketing, or media buying, or maybe project management, or something's related to digital marketing. There's very few people who focused specifically on conversion optimization. And the truth is a lot of, you know, conversion optimization, the way that I like to look at it is that it's not necessarily a discipline. It's like, it's a process that links all of your other digital marketing initiatives at the same time. And, you know, you can't really do it in a silo, or it's not about knowing one thing, you kind of have to know a lot of things about a lot of things. So finding someone who understands, you know, like how, you know, stats work when it comes to A, B testing, you know, or how to, you know, prioritize experiments that are on site, and not, you know, in Facebook, for example, is something that's been really hard for us. So, of course, you know, LinkedIn, AngelList are some of the best places to find these people. You know, most people that we end up hiring that don't have like first hand experience managing an optimization program. They're generally people that are very data driven that come from a media buying world, right? Like they're already senior media buyers, or maybe they were designers, but like very focused on usability research, qualitative research, right? And then, you know, we have to make sure that internally we train them for the things that may be missing. But yeah, you know, I think the digital marketing space is, I mean, obviously, it's competitive. There's, you know, I think everyone needs digital marketers. So finding the right people at the right time is not always easy that I have to say. Yeah, man, I completely hear you. Well, I appreciate that response. In terms of you, like as like the founder and like the CEO, what is your day to day? Like, what does your week to week look like? Yeah, so I think, you know, for me, I always say the bigger the company grows, I feel like the easier my job becomes, because I love I really love what we do. I love our clients, I get excited by that. But, um, you know, I identify a bit more as a visionary than someone who's like, very operationally focused, right? So, to me, you know, kind of overseeing some strategies and motivating the team and, you know, kind of strategizing on how we can get even better that really gets me fired up. So on a, you know, day to day basis, you know, I'm typically going to be reviewing some strategies for our clients, you know, helping team members, you know, figure out how to reach X clients or X clients goals. But I have to say, right, like these days, we're very focused. Well, personally, I'm very focused on building processes, right? Like we're hiring a lot. So obviously, I'm sure you're familiar with that. But you know, there's a lot of steps to it. And if you're trying to reinvent the wheel every time, you know, you're, you're gonna find some gaps, and it's going to become very exhausting. So I'm creating those processes, you know, and finding the right people to execute those, I would say is about 7% of what I do, then obviously, there's, you know, yeah, helping some clients from time to time motivating the team, you know, and always trying to kind of get us to the next level in terms of, of, and I'm not saying this just in terms of sales, but I'm talking as well, like, in terms of skills and what we're able to do and what we're able to achieve. Um, I love the space itself. So it's, it's pretty easy. I don't feel like it's a hard work. You know, to kind of do this. So yeah, I have to say I love what I do. And most of my, most of my days is spent doing those sort of things that I like. That's great. No, I appreciate it. Thank you. In terms of like, acquiring and retaining clients, like what's worked for you over the years? What do you do now? What have you done over the years? However, you want to answer this in terms of acquiring new clients, and also more importantly, Yes. So in terms of acquiring new clients, we've been very lucky in a way that split base literally since its early days has grown through referrals. Um, you know, we maybe have like 10 bucks a day on Facebook ads that I had probably hadn't touched in like six months or so. Right. So, um, you know, we've been lucky in that sense where, um, I, I love marketing and I'd love that if we could be doing more. And, you know, I also have a podcast that is on pause right now, but I'd love to be able to restart. Um, but honestly, I think just doing great work, um, has served us well. Um, you know, we've gotten a lot of referrals from existing clients without asking for them. Um, and ultimately, you know, as, as we meet new agencies, uh, you know, well, other agencies send us their stuff. And I have to say, when it comes to conversion optimization, there's not a lot of conversion optimization agencies that focus specifically on direct to consumer e-commerce like we do, you know, even before DTC became like the hot word, you know, um, skincare, uh, and beauty was our biggest industry. You know, we, we did, um, a lot of the luxury brands at L'Oreal, so like Saint Laurent, Armani, Kiehl's, and a bunch of them. And, you know, eventually, you know, there were more upcoming brands that started appearing, um, and it kind of just like led us naturally into DTC stuff. Um, so, you know, yeah, we've been really lucky in that regards. Now, in terms of retaining clients, um, I have to say we've been incredibly lucky, uh, knock on wood, uh, as of today, uh, in two years, we've only had two clients, uh, uh, go in another direction. Um, which that's pretty happy about, you know, knock on wood again. I just did. Um, you know, I think this, well, of course there's, there's, I think two main things is one, we've never been super rushed, you know, like I started Splitface because I really enjoyed doing this. I didn't, I didn't start Splitface because I was like, I really want to make money and I'm going to find something to make money. If I wanted to do that, honestly, there's plenty of other types of agencies that would have been, that would have been easier to start than conversion optimization. Um, so I think there was that we had, you know, plenty of time to kind of set ourselves, um, kind of create ourselves a solid foundation, um, and, and make sure that we were kind of, you know, pretty smooth in how we were operating in our methodologies. Um, on the other hand, I think it's the relationship we have with clients. Um, and the reason why I say that is, look, we talk with all of our clients every week, um, you know, on the phone, obviously, you know, count Slack messages and emails. It's nearly every day. Um, I think the relationship that we have with our clients allows us to be very transparent with what we think is right, um, for them and what we think is, isn't right. Um, when they feel like there are things that need to be better, they're also very transparent, right? So I think that communication that we have with clients is very open. Um, and, and, and it's really based on trust. And of course, look, if we didn't deliver them results, like if we didn't make them more money, they wouldn't stick with us. That is for sure. No relationship will, will save an agency that's not doing great work, but you've been constantly over-investing in training. Um, you know, we constantly reward our team members for learning skills and things like that. And, um, I think that kind of pays off, you know, and look, it doesn't mean that we're perfect. Like we're not, uh, but I think at the end of the day, we're optimizers, right? So that's kind of how I look at our own business. It's always like, Hey, where, where are the weaknesses and how can we improve it? And, um, you know, yes, there are probably blind spots and things like that, but so far, I think just that relationship that trust that our customers have and, and the training that, that we have internally to deliver those results have been pretty key. That's awesome. I really appreciate that. I've got two more questions for you and I'm super appreciative of your insight and your time. Um, what tools are either you personally using or what tools are the teams using to project manage to facilitate workflow or some of the tools that you guys use? Yeah. So we've tried so many over the years and obviously every time we scale and, and we grow, you know, we realize that the tools we were using does not work anymore. So, um, we use some, you know, combination of air table, a sauna, which served us in some ways, but today we're pretty much all in ClickUp, um, which, you know, we've heavily customized literally everything in there, um, to fit our processes, but that's where we literally store, um, you know, the, the insights that we gather from all the research methodologies we execute on. Um, that's also where, you know, our clients are able to track their landing page, uh, pipeline progress, successes, and, and same with the actual onsite test. Right. So now that's pretty much what we use in for, for project management specifically. Um, obviously Slack, I mean, right. Who's, who's not on Slack. Um, yeah, so Slack and ClickUp, I would say represents the majority of, of our, of our stack when it comes to project management. Awesome, man, this has been so good. I have one final question for you. Yes. You can take this in any which direction you want. So knowing, you know, what, you know, you've started a couple businesses back in the day, some work, some didn't, you know, you run a successful agency. Um, what advice would you give to someone starting out and, you know, would you steer someone in the direction of, Hey, start an e-com biz, start in an agency, start freelancing. Like, do you have any strong thoughts around like advice that you'd give or, or where you'd recommend kind of someone that you're maybe mentoring to start? Yeah. I think there's a lot of things that I could say about this, but I think, um, very often as you, you know, whatever you pick, whether you want to grow an e-commerce business or an agency or do something else. One thing that I think every, you know, entrepreneur will have experienced at one point is that you'll feel that the grass is greener on the other side. Now here's the deal. Nothing is easy. If it would be easy, everybody would be doing it. So the thing is, look, pick what you feel the most, uh, drawn to, you know, what interests you the most, because when times get tough, right. Uh, well, you're going to want to be doing something that you enjoy doing. So that's the thing. And that's something that I've seen often sometimes where even, you know, in some of the harder times, the beginning of split base, I was like, Oh, I should have started an e-commerce business. I should have done this. But then, you know, I talked with some of my e-commerce friends and they were like, Oh, it would have been so much easier to run an agency. Right. Everyone always, you know, everyone has that had that moment where they're like, Oh, it would have been easier that way. But the truth is no. Um, I don't think it's truly easier. What's going to be easy. And obviously I'm saying easy, very carefully. Um, you're going to have an easier time, you know, building a business that you truly enjoy than if you're only doing it for money or proving something or things like that. Um, so yeah, that's, that, that's what I would recommend. And obviously finding that one thing can take some time, you know, it, it took me like literally four or five field businesses before, you know, having something that, that truly worked. So patience, patience is pretty key as well. Such a good one to end on. Thank you so much for your time and all your insights for anyone that wants to work with you, work for you, learn from you, follow along. Um, what are the best place or places for people to do that? Yeah. So split base.com that's really where it's at. Um, now I'm also on Twitter are Paul and bagel. Um, you'll probably have to look at the show notes and how to spell that, but it's just my last name. Um, I'm not the most active. I'm not as good as you chase on Twitter, but, uh, once in a while, I, I share a few things that, you know, I think, uh, I think people can get quite a bit of value. So, uh, yeah, on, on Twitter and, uh, yeah, let's go based off comments. Amazing. Thank you so much for being here. Really appreciate it. Thank you so much for inviting me. All right. Bye.