Rachel Tipograph is the Founder & CEO of MikMak, an eCommerce marketing platform for multi-channel brands. She was formerly Global Director of Digital and Social Media at Gap.i Rachel has been honored by many publications for her creative and entrepreneurial endeavors such as Forbes’ “30 under 30”, Marie Claire’s “The 50 Most Influential Women in America,” and Fast Company’s “Most Creative People.” She is also the co-host of the podcast Brave Commerce, an investor at Harlem Capital and Cleo Captial and an advisor and investor to various early-stage startups. She takes us through the playbook she’s run for the last 15 years of her career on how to drive eCommerce sales and how you drive growth online.
What was the inspiration behind MikMak?
From 2011 to 2014, I ran global digital at Gap; I was there for three positive years of the company’s growth; net profits had increased by 70% and digital went from 5% of overall revenue to 25%. Unfortunately, Gap and just apparel at large is a totally different story right now. But the reason why I quit my job had nothing to do with Gap and everything to do with the internet. I realized that the key driver of eCommerce was also the most annoying thing, which was promotional emails. If you’ve ever shopped a Gap, you probably have been hit 500 times over with a 40% off offer. And this isn’t just a Gap problem, it’s an industry-wide problem. So I had this burning question: how do you drive sales online, not annoy people, and even make that cool again? My boss, the global CMO, said to me, ‘Rachel if you figure that out, that’s a billion-dollar idea.’
I became obsessed with trying to figure it out and observed three interesting trends. One was early signs that video was going to be the predominant form of content on the internet. The second was the change in the customer journey. No one was entering the store anymore through the front door. Everyone was using all the side doors that no one was paying attention to. And then, finally, the kicker. I watched Gap’s organic search results rise because consumers were turning to Amazon looking for Gap products. These were all early signs that the major e-retailers were about to become the new walled gardens. So that’s when I decided to quit my job to build MikMak.
What is the key to a successful online sales strategy?
The first piece is understanding what causes brands to become the most valuable companies in the world today. What causes it is ownership over first-party data. What does first-party data mean? It’s just a fancy word for first name, last name, household address, email address - any unique identifier that can tie any activity to a person. Now the reason why this is so important is that the moment you give up your first-party data online, you give up your brand. The second thing is to understand that you have to design for the mobile phone when designing your go-to-market strategies. It has to be the heartbeat of your go-to-market strategy because it is where consumers spend all of their time.
The moment you give up your first-party data online, you give up your brand.
How can brands better convert consumers to purchase?
First, you’re immediately communicating what this product is. Second, you are literally telling people, this is why you need to buy this product within the first 1.5 seconds. The third, and most important thing, is to be creative. Because your competition on the internet isn’t just a like-minded brand. It’s every piece of content out there fighting for consumer attention. But honestly, it is the third most important thing because if you don’t get the campaign objective right or the audience right, creative content doesn’t matter.
Then there’s my favorite thing. I call it the power of the pixel, every single ad manager has a pixel. A pixel is essentially a marker. It allows you to say this consumer indicated intent. Because they watched 50% of our ad, they ended up on a product detail page. And now we want to harness that intent and put them into an audience to remarket to them. The reason why the pixel is so important is that it will likely take multiple interactions to get someone to convert. At Gap, we had a rule of thumb, it took three positive interactions to get someone to buy an item on Gap.com, meaning you saw an ad, you got an email and your mom told you about a cute coat. Boom, now you buy. It’s a pipe dream to think you can set one ad and the consumer will buy it. You’re going to have to segment audiences to retarget them. And the way that you do that is with a pixel.
Do you think programmatic advertising is critical to the marketing mix no matter the brand or company size?
So programmatic is built for scale. Meaning if you’re a small business and you have very few dollars to spend, I don’t think you’ll have enough to spend to make programmatic worthwhile. But if you can put like $100,000 against programmatic, then I do believe it’s worth experimenting with. But if you don’t, then I wouldn’t encourage you to do that. I would say you should be investing in Facebook ads and Google search.
Do you feel strongly about a certain spend split between your re-marketing and prospecting performance advertising budget?
Start out with a 50/50 split. So the thing about paid advertising is, it’s all about testing hypotheses. And once you figure out what works, then you double down. But I think when you’re just getting started, you should consider 50% against prospecting 50% against retargeting, but that might end up becoming like 25/75 once you understand your customer journey.
Are there resources you would recommend for small business owners to teach themselves Facebook and Google ad strategy before getting to programmatic?
Facebook and Google want your money. So they have so many educational resources. That’s how I learned everything. None of this is rocket science. I’ve been doing it for 15 years and have experience on my side. But literally, Facebook Business Manager and Google AdWords have everything they need to know.
If you don’t get the campaign objective right or the audience right, creative content doesn’t matter.
What metrics are essential to adopt after basic analytics? Which metrics will help brands determine the next steps once a concrete foundation is established and followed?
The ultimate business metric is your CAC to LTV. How much money are you spending to bring customers in, and then what’s the value over that customer over a period of time? For example, it costs American Express around $750 to acquire a customer with the lifetime value that they want. That’s a lot, right? Because that’s a valuable customer. However, in a consumer product like makeup, you might not want to spend any more than $1.50 to $10, depending on its price point.
In terms of benchmarks, you should research to understand what’s the best in class benchmark. In my B2B business, it’s a ratio of one to four. So that’s what you need to be optimizing towards in the long run. Now you have to back into how you’re going to get there. So if you’re just starting off, and you don’t know who your customer is, you can’t optimize towards CAC. LTV. You need to first figure out who the hell your customer is. To do that, run AdSense, and add sets against many different interest groups with lots of other creatives to understand who this resonates with. You’ll want to know: when you brought them into the funnel; if they ended up purchasing; and asking 'why' if they didn’t end up purchasing.
It could be this audience segment didn’t match up with the price point of the item. Maybe it’s that the product detail page itself isn’t giving them the right information. So you have to take it step by step. And then once you have checked all the boxes in the customer journey, you optimize within the Northstar of CAC to LTV.
Where does content marketing to into play?
If you’re selling a high price point item, you need to have a lot of content. Content marketing is crucial if you have an expensive service. And you need to have content that nurtures the customer at every stage of the funnel. You pique their interest, and then you want to serve her content on what she should consider when shopping. So along with every single one of those stages, you need to have tons of content. No matter what you're selling you really need to think about content marketing if it’s a high price point item.
Can you explain the best use of newsletter content?
With high price point items, you need to nurture that customer and keep them engaged over what I imagine will be a long time, like several months. So a weekly newsletter could be a pivotal mechanism to keep someone engaged. But the thing about newsletters is you have to be giving someone valuable content. It can’t just be self-serving updates about your business.
Content marketing is crucial if you have an expensive service. And you need to have content that nurtures the customer at every stage of the funnel.
What were you most surprised about in the eCommerce space over the pandemic?
Your campaign objective is your most important thing. And if you want to drive eCommerce sales, you have to do it with a bottom-of-the-funnel campaign objective. COVID is an unorthodox time. We’re actually seeing amazing conversion rates right now and awareness-based media. The reason why is that my clients are products that people need. You need Bounty paper towels. You need Clorox. So all you have to do when you’re in a company like that is make people aware that you exist and then give them a frictionless shopping experience.
What‘s an accurate measure of how close you’re really getting to your target audience ie conversion efficiency on ad spend?
The platforms are in the business of capturing ad dollars. So they created measurement tools to grade their work. They’re going to give themselves a good grade. One of the things we do for brands is standardize reporting across media channels and e-commerce platforms. You can actually have an apples-to-apples view. But you have to align on that. If you’re an agency or your vendor, you need to align on that with your client. If you’re the client ie the brand marketer, then you need to develop a media mix model that your CFO agrees with internally. I can’t give you a perfect formula because it’s so brand to brand, but if you’re doing your research, you’re on the money.