S4E7: Ethan Giffin

Welcome to Commerce Famous, a podcast that celebrates the celebrities of our industry. Join us for a conversation with the taste makers in ecommerce. In their daily lives, these are just normal everyday people like you and me. But to us, they are commerce famous. Hello, and welcome to season four, episode seven of Commerce Famous podcast.

Today, I've got a special guest, Ethan Giffen, a new artist and the guy I consider to be the Joe Rogan of ecommerce because he's, got a great podcast y'all should tune into. Anyway, Ethan, thanks for coming to the pod. Thank you. Thank you, Jason. Thank you for having me on.

I'm always excited when we when we get to spend some time together. You know, I I always appreciate when you refer to me as the Joe Rogan of of ecommerce podcasting. I don't know if I need to be consuming large amounts of DMT and, like, you know, Elkhorn, you know, like, these days. But, you know. If you have to well, it depends how much you want that title.

You gotta earn it. So let's let's bust right into it. So, Ethan, you know, you are a newly minted author. Yes. The book is called closing the digital revenue gap.

I have got it from Amazon. I have already left you a positive review because you earned it. Where did you get the inspiration for the book? Maybe let's start there. Yeah.

You know, so, I've been building ecommerce websites for well over twenty years. I think going back to, you know, 2002, or even earlier than that. And so, over the years, we've I've just had a lot of different experiences and wanted to kind of write those stories down. There's definitely some commonalities that's happening, you know, especially in manufacturing and distribution. There's a lot of common stories and themes that happen over and over again, and I really wanted to get those on paper so for people to maybe feel that they weren't alone, in that in that process as they're going through those challenges.

Yeah. That's nice. Well, you and you you've kinda laid it out in a really, really consumer friendly or or reader friendly way. Kinda talk through the methodology around how you organize those thoughts, why you pick the kind of the the story arc, the the, you know, you broke it into the 10 lessons. Like, talk talk us through that methodology.

Well, if, you know, if you've gotten to spend any time with me, you know, I'm like a an avid storyteller and and and so, you know, it it really started with the stories. And so what I wanted to do was break down some common themes. You know, themes like, hey, we're we're let's just treat this like a website. Let's give it to marketing and treat it like a website redesign. Or I've got too much of my revenue, still being entered by hand into into systems and broke that down with with with customer stories from over the years, why why it's important to think about this, and then three things to think about if you're deep in it, for each of those each of those topics.

And the the the the honest truth is I actually wrote a second book. I actually wrote a a book before this. This is, you know, we I consider this a compact book. You can read this on an airplane ride. It's about a 100 pages.

But I before in the process of writing this, I actually wrote a 300 page book that was very in-depth. And, what happened was my lawyer came back and said, hey. You can't put that book out. It's got too much of your intellectual property in it. And second, I don't think people wanna read that much of you.

I think the, you know, they've had enough of you after a 100 pages. So we boiled I boiled down the 10 kind of core, stories and topics from that larger book and and turned it into this, compact book for people, the people to read and experience. Now the other thing that I that's very notable about the book is that it's that it has an audience that's really a lot of lot of talk around mid market. Why did you kinda narrow in on that segment as an underserved segment that that that could benefit from this information? Well, I think the mid market needs a lot of help.

Right? And I think they are at times sold a lot of snake oil or they make decisions where they aren't fully educated on where they're going. And being in the mid market, they have bigger budgets, they have bigger staffs. It's bigger dollars, quite frankly, to protect. And so I and so those mistakes can get very, very expensive.

At times, I also think there's a huge mentality change between mid market and enterprise. You know, enterprise is fine having a room of 24 people, you know, making, like, to, you know, spending, you know, two years to make a single, like, decision on should it be a period or a comma. But the mid market needs to move a little bit faster and needs to be, you know, needs to have have more information. And so, you know, our kind of, general customer is somewhere between generally, you know, a hundred and three hundred and fifty million. Some are a little bit bigger and some are are definitely smaller.

But we see common themes for those organizations where they make decisions that seem right, but maybe aren't the right thing for what they wanna accomplish. So talk a little bit about I'm gonna kinda go into into the, the book a little bit. Talk a little bit about early you say in the book, it's rarely a technology problem. What do you mean by that? Well, I think it it's it's I think that often people wanna start with the technology.

And sorry, I know, you know, you were you're you're a platform. Right? So you wanna start with I agree with you. I agree with you. It's You know, sell a platform first.

But again, I think that if you don't have alignment, going into this, we talk kind of about the five legged stool. And if you and if you don't have alignment between kind of sales, operations, marketing, IT, and finance on what you really wanna achieve, you know, from from this type of strategy, from a from a digital revenue strategy, then I don't think that you're gonna be successful overall. I also think that there needs to be top down alignment. When we do a discovery for our for our, ecommerce transformation projects, we bring everybody in to our studios in Baltimore for a three day immersive, discovery session. And, you know, often a CEO may push back and say, do I really have to come to that?

And and we want them to be there for the first day and a half or so, because, and and what I say to them is, like, listen. You're a $150,000,000 company. Like, let's say that this this revenue channel becomes, you know, 10 or $20,000,000 within the first, you know, twenty four months, isn't that important enough, you know, for you to spend a day and a half, like, talking about and learning about and becoming more knowledgeable about? And and generally, the pushback stops there. Commerce famous is proudly presented by Shopware, the leading open source e commerce platform for mid market and lower enterprise merchants.

More than 50,000 clients already process over $25,000,000,000 in annual GMV through Shopware. Find out more about Shopware and the best value in ecommerce at shopware.com. Well, I think one of the other important things that you call out in the book very early is the roles that that, there's a lot of human middleware. You're you're relying on people placing orders, manually into systems. And so I assume that your on-site really highlights some of these manual processes and risks because if Susie or Billy leave, that data doesn't get entered.

Yeah. Yeah. Well, it's it's it's funny. You know, you know, I I think that there's a lot of talk these days about what they call industry four point o. Right?

It's the fourth industrial revolution. It's, you know, Internet connected devices. It's AI, big data, all of these things. And so, you know, people have gone to great lengths to retrofit fifty and sixty year old machines with, with Internet connected diagnostics. But you go into these factories that are retrofitted and have robotics, and then you walk into the front office, and they they're still, like, you know, like, taking orders on scribbled notepads and and, you know, typing things into spreadsheets and, you know, doing it off of a text message from a customer.

And, you know, so it's, you know, so I just I think that sales is the tip of the spear. So you wanna have your your revenue, being digitally, focused as well. And I also think that, a lot of customers these days in their day to day life are using Amazon, using Uber, using the Starbucks app, using target.com. Right? They're just used to placing these these orders.

And while you don't need to be Amazon, in fact, you can't be Amazon, You wanna start thinking, you know, like them because they need to be able to come in. Why not have a recurring shopping list where I can just come in and add all the things that I get once a month, you know, from you into a cart and and check out and be done with it versus having to deal with a salesperson. Yep. The convenience still matters even in the context of b two b. Yep.

So, you know, you you have what's such an interesting read because there's so these micro, case studies, I guess, where you saw this observation and why. Like, where did you where did you get all these? How did you keep track of them? Are these just recalled and documented? Like, how did you do it?

Yeah. I mean, they're recalled and documented, and it's funny. And, admittedly, we've we've, you know, some of the stories are a little shared to protect those parties that are Sure. You know, that are deep in it. But, you know, for example, there's a, a story of the skydiver.

And so that's a very real, story where, you know, of course, we we can't share our client's name, but they had a, a skydiver that was the sole person that had all of the, you know, all of the keys to the station, so to speak. And it was like, you know, when private equity came in and acquired them, they're like, you just can't it can't be like that anymore. We've gotta we've gotta have repeatable systems and processes, that aren't relying on a single person. When you yeah. By the way, that happens all the time.

There's there's, enormous reliance on someone who built the bespoke system that is still working there, is still happy, but smart businesses try to figure out how to how to deleverage your bad risk or, you know, your dependencies. When you talk to people about the book, are there things that overwhelmingly stick out of, like, hey. I you know, when they talk to you about it, they're like, hey. What about x? The the inconvenient math or, you know, whatever the topic might be.

Yeah. I mean, that's a great question. You know, the book's been out about six weeks at this point. And so, you know, quite honestly, like, there's been alignment with with with all of the conversations that we've had around the book and people reading the book and prospects that we've sent the book to. You know, almost everybody aligns with at least one of the stories, in in the book.

I'm a member of an organization called EO, Entrepreneurs Organization. It's a worldwide, you know, group for CEOs. And I've got about, 55 people in my local chapter, and I gave everybody in the chapter books to kinda preview and and read. And it was funny just to hear, we just had our all chapter retreat, this week, and it was it was just funny to hear all the different stories of, like, oh, that's me. Oh, that's me.

And it's so everybody kind of comes at it a different way, but I think, I think everybody is kind of that's been in this has been touched by at least one of the stories, that we that we talk about. And that's the real goal of it. Like, just to let people know that you aren't alone and that these are fixable, situations if you have, the ability to, to think about it the the right way? Well, I'll give you my favorite, and it's obviously being a a technology guy who's responsible for P and L and and and, also trying to sell new licenses of of Shopware. There's a there's a on page 19, it talks about the impact of not addressing it.

And I'll just read it. The impact isn't a sudden collapse. It's a subtle drift. The drift gains visibility when the organization resists evolution. And it's really hard to see this in the context of a one year window.

But I literally met with a merchant today who has a 1998 custom built ERP, that they're running their business on, and it looks like like AOL looked in 1998. But it's it's the sub the impact of not addressing it compounding, when you look back that far, it's obvious. But when you're in the moment where you're like, this will last another six months or another year, let's just leave it as it is. Is that kinda what you were talking about when you when you kinda wrote that thing? Yes.

Yeah. Yeah. Yeah. And and, you know, so from from our point of view, a lot of people come to us in those situations where they have this aging technology. They don't know what to do with it.

And, generally, it's the VP or director of marketing that reaches out to us first in the process. But we end up touching everybody across the buying committee, like, in terms of the head of IT, the CFO, you know, you know, and and and other folks along the way. And so what what and we get different questions. Like, the CFO wants to know different things than the VP of marketing. And so we have a we have a signature system.

It's basically a three year life cycle that we lay out to go from kind of zero to to being fully focused with a digital revenue arm of the organization, right, and and just optimizing that. And and and there is a lot of clarity with that when we talk to a CFO and say, listen. Year one, you know, you're gonna engage with us. We're gonna go through the process of of discovery. We're gonna, we're gonna, help you pick technology.

You know, we're gonna create alignment. We're gonna set goals. Then we're gonna design and build, you know, the solution for you. The goal being that within those twelve months, we begin actively piloting, our pilot phase with those customers, usually year two, you know, right or right or close to year two, we're activating, their existing customer base within the system, and in year three, we're optimizing that. So we wanted to give a very transparent view to an organization that was coming in and being able to, like and and considering this and thinking about it.

So often, they don't their people aren't educated or or taught, like, what it really takes to be successful with something like this, and we'd rather be transparent with it. But what we find is that organizations will, just get stuck because they don't know, what to do or where to where to go next. And, there's a lot of different voices. Maybe they have an IT consultant or maybe they have a, you know, that that's helping them in various aspects of the business. But, generally, this is very specialized.

It's like going to you know, this is why you go to a brain surgeon, you know, and, you know, and not a a general surgeon if you if you if you need brain surgery. Right? Like, we're very specific with what we do. I love it. And and I'll tell you, you you guys cover a lot of the psychology, in this book.

You talk about the the psychological cost, the steering committee, the readiness trap, the cost of doing nothing. These are all change management and psychology, angles, which is really important because ultimately, these are people making decisions and frankly, betting their career, that things are gonna go well. Is that is that part of the calculus when you when you wrote this stuff? Oh, yeah. Absolutely.

Absolutely. So, you know, we have a large international, industrial manufacturer as a client, and they asked me, hey. Can you come in and talk, at our national sales meeting? And it was about 65 folks in the room, and you could just see the nervousness on their faces. They were like, is this thing gonna take away our commission?

Is this system gonna, you know, like, what's it mean for us as a salesperson? And we believe that the salespeople need to be fully ingrained and bought into this process because if your salespeople are ingrained, they're your kind of boots on the ground. Like, you actually want them selling to your customers and helping to grow their long tail the long tail customers in their book, not hand injuring orders or typing stuff into a CRM system. So it's important to kind of reset everyone psychologically in this process when you're when you're looking at it. And, you know, I think all too often somebody might get the bright idea of, like, oh, that commission comes back to the house.

Right? Oh, yeah. By by building a system like this, and that's just not the right, the right way to think about it. Now if you don't have salespeople or if you, you know, if people just call into your call center and place orders, you know, there's that's a there's different path. That's a different path.

But salespeople really, get nervous about how this is gonna affect their life. Well, I think you're onto something there because, you know, us old guys remember when e commerce started to become mainstream, it went from sub 1% to now, you know, 12% of all sales are are happening online. And that and that's a really DTC kind of metric. But what also happened during that that time was the great, channel conflict that was created because of digital. And so you're exactly right, Ethan.

The the the view of digital in a lot of ways can be a competitor to them and their ability to make money. And so the the other end of the spectrum, as you know, is, well, let's just go hire more sales guys and continue to neglect digital. And what it sounds like to me is the answer is somewhere in between. Yeah. Listen, if you wanna if you wanna increase quotas, right, or you wanna increase territory size and try to do more with the same amount of salespeople that you have because you've, you know, created a full digital strategy, I'm all for that because, technically, they should have more time if they're not typing everything in by hand, you know, like these days or or filling out order forms.

And so that's all well and good, but you wanna think about it in terms of, like, alignment, internally. You know, there's a lot of, businesses don't realize how much friction they often create in the process of buying from them. And that's another big thing that, when we're in these, when when we're in our immersive discoveries and you start to hear people around the room that are, like, boots on the ground talk about this in front of the CEO, they're often very surprised at, like, what, you know, like, how challenging it it can be. You know, I like to share a a story of, I love to make pizzas. I've got a a cool pizza oven, you know, in my backyard.

I love to have people over. And I really like to go out and get these special pepperonis that kinda cup up. Right? And that that look really and they're also really good. And there's only one grocery store, near me that sells those pepperonis.

And so, in I'm in Baltimore, and they recently enacted a law where you have to pay 5¢ for every grocery bag that you get. Now when you go to the self checkout at most grocery stores, it's on the honor system with zero one to five of how many bags you used. Well, I would go to this grocery store every now and then. I usually get three or four things at a time, and their self checkout doesn't do that. You actually have to go they lock the bags up at the checkout.

You have to get the self checkout attendant to come over, swipe their cards, enter a bunch of codes in, unlock the cabinet, get the bag out, and give it to you like you like it's Fort Knox. It's like this golden bag. And it's such a pain in the ass that it took, it took something that was very joyous for me to go and get and turned it into something that I see as just a pain in the ass, a negative. And while you may be manufacturing something unique that that your customers need and can't get anywhere else, it doesn't mean they enjoy the process of actually buying it from you. And so that creates friction.

And almost every manufacturer that I know has some products that might be maintenance or consumable that live around the edges, kinda like the, you know, at the supermarket, the gum and the things at the end of the checkout aisle to increase your, you know, your average, you know, order average order size, and you'll start to see those commoditized products, like, evaporate. People will start to order those from other places that are just easier, you know, and so kind of like quiet quitting. And so, it's really important to think about, like, that friction that you're creating. And and while, you know, b to b is very different from direct to consumer, you know, people still get a dopamine kick when they, like, complete tasks and and, you know, and and and it's easy for them. So you wanna make sure you lower the friction and make it easy to buy from you.

I like it. I like the quiet quitting, example. You're losing them quietly. Now one of the things that I've I've certainly seen, and there's a tremendous amount of agencies that are really good at this, but they they view the problem as very acute. Like, I need just this one system changed of my 20 operating systems.

They hire a, a body shop to stand up the the new tech. That's not who you're trying to be. Right? You're you're you're, by the way, I should also announce you're you're, CEO of a company called the b two b agency Yes. Which is an amazing title.

Can't believe you got it. You're definitely gonna rank well on on Google. But I just wanna make sure to call the differences between a firm who does stand up tech and get out of the way versus you're trying to be the McKinsey of b two b ecommerce where you come in and say, well, you you describe it. Your words. Yeah.

Yeah. Yeah. Yeah. Yeah. And so yes.

And so we do, we do, like, prefer to stick around and assist through the entire process. So, we kind of there's two paths that you can take, when you work with us. So every person that reaches out and, by the way, anybody that's listening will get to this at the end. But anybody that's listening and wants a free copy of the book, we're happy to send it out. But what we do is, people that are interested in working with us, we will, we'll put them through a two to three week diagnostic workshop, to see, where some of the high level challenges on the project are gonna be, and are they ready to move forward, in in an endeavor like this?

Because we wanna discover that before we get too far down the path, and sometimes there's some homework to go do. But we have two different paths. We kind of have our accelerator path, and we have our full ecommerce transformation path. We do have people that come to us and say, hey, you know, I have one, customer that told me that they're gonna stop buying from us if I can't implement punch outs, you know, in the next hundred and twenty days. Right?

So we will do accelerated projects that maybe are for a single customer or a single use case or two and get it up, get it running, and then iterate on that long term. Or for more advanced company, you know, organizations, we're doing the full transformation, and that's an eight, you know, eight to ten month process. But at the end of the day, we wanna stick around, and we wanna be trusted advisers, to folks and help them along the way there. I appreciate, you know, the call for Mackenzie. We do not have Mackenzie rates.

I just wanna preface it like that. It's a little hot right now in the in the news cycle, you know, with certain cities and their investment in McKinsey. We do not have McKinsey rates. But we do wanna be thought of as trusted advisers. You know, we take on a handful of new client projects a year.

I'm actively engaged in conversations and helping people, you know, as part of that. And so we really wanna have a kind of, almost as if they're able to come in and learn a lot from us, as well as from our other customers, during that process. We have a a an an in person event in the fall, the b two b ecommerce summit. And so, we're, our goal is to teach and educate and and and create community, with this as well. Very cool.

Well, one of the one of the things I know you wanna avoid is the we built it and customers didn't use it outcome. Maybe talk a little bit about how your process kind of avoids that outcome. Yeah. So I you know, the the I think at the beginning of it, that is where the alignment comes in. Right?

If you get your customer service and ops folks on board, if you get your sales folks on board, you know, marketing is gonna be on board because it's a great new project. And so if you get that alignment from the beginning, as you're kind of, coming to the end of the project, we, move into what we call the pilot phase. And that's where you're, you know, reaching that's where you're, you know, working with, you know, maybe a dozen or up to two dozen of your customers. Customers that adore you and love you that aren't gonna fire you. Customers that have been maybe even asking for digital commerce within the organization to say, hey.

Listen. We've got this new system, and we'd really like you to be a part of this, of this pilot. And we're very involved in the pilot. It's a high touch, even, you know, working directly with customers if need be. And the goal is to get them in the system, get them set up, make sure their products are there, get them to place their first order, their second order, their third order, and and really kinda kick the tires from the beginning to end.

Right? And we think that these are such complex transactions that, we we need to have a lot of hand holding during that phase. And a lot of organizations don't do that, and then they really flub activating their customers. They might send an email or two and, really, really, aren't don't do a good job of of fighting to get their customers, in there and ordering. And so, we have some tactics and tools that we that we use to do that.

And we also are big believers in marketing automation and other technology, and we've gone out and, you know, we're a big hub a big HubSpot shop. We're a big Klaviyo shop, and we've we've, we have game plans to, onboard people into those systems. And and and while they're direct to consumer focused, we have our our path for setting them up for b two b. Love it. How do you how do you help?

We're kinda running, towards the end of the conversation. I wanna hit a couple of key things. One is how do you help manage expectations around what the digital channel will do in terms of increasing revenue or decreasing costs? Yeah. You know, our it depends upon the digital maturity of the of your customers.

Right? So there are some customers that they, like, flip a switch, you know, and within six months, they're at 10%, like, you know, of of their revenue. If they're, there are other folks where it's, more of a fight. We tell people that we wanna track to eight or 10% of revenue digitally. And, you know, you wanna start and and start building building towards that.

There are many organizations that are well above that, but but that's where we wanna start, we wanna focus. And if they have other things, we may even start at 5%. But our goal is to get there, you know, by the end of twelve months post launch. We wanna be tracking, you know, towards, you know, towards towards that goal. And we have dashboards and tools that we use to track all of that information.

Yeah. I love it. And what I'm hearing there is you help them build the business case. Help them build the business case. Yeah.

Yep. Obviously, there's a there's a time commitment. There's a a money commitment, but there also has to be an outcome. You know, it's you gotta get a return on all that aggravation. So Yep.

That's, that's good. Talk to us a little bit about how people can get involved. Obviously, you're the author of Closing the Digital Revenue Gap, the book. They can reach out direct and get, a copy. It's a great copy.

It's super easy to read, which is key for a guy like me. Thirteen five star reviews on on Amazon is at this point. And then the next one is you guys have an event in Baltimore. I was there last year. It was excellent.

The b two b ecommerce summit. Can you talk a little bit about that? Who's invited? Who should who should who should come? Yeah.

So it's a it's a great event in Baltimore. It's invitation only. It's really focused on the VPs and directors of marketing, though others can apply to attend. We get them in. It's a small, you know, you know, it's a small group.

We, have a great facility with a built in our our office facility has a built in Marriott hotel. And so we put everybody up that's traveling, and we have a series of, things across, two evenings and one day, and, and have various sessions and guest speakers. You know, I've met a lot of very smart peep people like yourself, Jason, in my travels. And so, I, when I ask for favors, this is the favor. It's like I need you to come to Baltimore, and I need you to stick around and spend time, and and not only present, but I want you to go to the dinners and the happy hours, and I want you to introduce yourself to people, and I want you to answer questions.

Because that's the name of the game. Right? So it is a intimate event in Baltimore. People have traveled from all over the country to get there. We put you up.

We we have a a great restaurants on-site. And, and and really, it's a it's a day and a half of of learning and networking around b to b ecommerce. Amazing. Well, I was there last year. I'll vouch for it.

It's a very community centric event. It's a lot of really good people making new friends, and it was an excellent show. And and you can count on Shopware to be a part of it if invited. Sounds like it's invite only, but if invited, you can count. We love you very much, Jason, so I know you're you're always invited.

Excellent. Well, Ethan, thanks for spending about a half hour with me. Again, get the book Closing the Digital Revenue Gap by Ethan Giffin. Sold anywhere you get your books, including Amazon. Yep.

And if you go to, btobecommerceagency.com or btobecombook.com, will and fill out the form, we'll happily send you a free copy and and, and get you on the list to learn more about our summit. Fantastic. Ethan, give you the last word. Thank you, everybody. It was great to great to meet you, and I hope that something I talked about resonated, with you in the conversation today.

Today.