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Ep. 50 - Diversifying Lead Sources, Subscription Boxes, and Battling Customer Churn with John Roman

Ep. 50 - Diversifying Lead Sources, Subscription Boxes, and Battling Customer Churn with John Roman

by Chase Clymer

3 years ago

After leading several successful sales organizations in the telecommunications and software space for almost a decade, John began investing in companies in the eCommerce arena. Then when a close college friend launched BattlBox in early 2015, John knew he had to be involved. So, he invested in it, offering advisement in a limited capacity.

Transcript from video:

but the experienced pieces is very
important to in creating a community for
each brand and just engage superfan
customers treat treating them as if as
if they're family and that's kind of our
our mantra and how how we view our
customers welcome to honesty commerce
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I'm your host chase climber and I
believe running an online business does
not have to be complicated or a guessing
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apply to work with us visit electric i
io / connect to learn more now let's get
on with the show

welcome back to honest e-commerce I am
chase climber coming to you from
Columbus Ohio and today's guest on the
podcast is John Roman he is a serial
entrepreneur John is the CMO and
co-founder a battle box along with the
being the managing partner at carnivore
Club and six other brands in the
e-commerce space I feel like he's gonna
have a lot to share with us today
welcome to the show John hey chase glad
to be here
awesome were you coming in were you
calling in from metro Atlanta the
suburbs oh nice nice I will actually be
down there shortly for a wedding okay
hey and about two weeks from now it'll

be a lot better than Columbus that's for
awesome awesome so you're managing and
you have your hands and almost eight
brands you know what led you there well
what's your background how'd you end up
in this in this position completely by
accident not not quite but so my
background is business-to-business sales
sales leadership typically
telecommunications software as a service
companies and I was doing that and in
2015 I was I had we had a company that
we had some shares in that I was working
for publicly traded was purchased
I got a you know decent little payday
and I was trying to find some
investments and and really just try to
in a very I guess non scary way try to
build something outside of you know
working for big companies so that I
could eventually not have to do that and
a friend that I went to college with
Daniel DAB's
we have linked up at a Christmas party
every year and he he came to that we
were talking he ran a company at the
time that was kind of a t-shirt swag
like marketing kind of material stuff
logos and stuff for for companies and
actually just individuals they had a
couple locations outside of universities
so the slow time for him was December he
was chatting
with me about you know I wanna do
something else we threw a bunch of ideas
around i none of which were battle box
it was more kind of consulting ideas and
then fast forward in February of the
next year 2015
he's he comes up with this idea is his
wife was getting a birch box
subscription box in the mail and he was
like watching her excitement level and
boxing at each month went to find you
know a box for him he wanted to
experience this and he wanted kind of
outdoor camping gear a survival gear
couldn't find one three weeks after that
he had launched a website and was ready
to go and that's I came in as an
so with offering kind of my assistance
from like a business side on a very very
small scale and we saw exponential
growth and about a year later I quit my
job and jump in this full time and now
we're just continuing to try to grow and
diversify and I've fallen in love with
with e-commerce it's uh it's just it's
such an enjoyable industry I can agree
completely there's just something I
think it's the tangibility of the
numbers and if you if you have any if
that appeals to you at all like you can
see where your efforts are helping or
you can quickly see if you've made a
mistake and you failed fast and you got
to move on from it a hundred percent and
uh I'm a kind of a data nerd so I can
just completely geek out on the
analytics and come up with business
plans based based on that it's just it's
all it's a lot of fun it plays a lot of
my strengths too which just makes it
even even more enjoyable
absolutely so let's go back to the first
one so battle box where did you guys
find your initial kind of growth what
was what was working for you back then
so you know none of us really had any
e-commerce background at all um you know
Daniel had this great idea and we opened
up a website and we had gathered from
the masses you know you you run you run
an ad on Facebook and people are
you know come by if they like it and
this is circa 2015 so you know we're
acquiring customers for four four and
five dollars which is you know just it
was the the heyday at that time it was
you know acquiring customers sure that
was insane so that what that was our
focus it was it was 100% Facebook
acquiring customers for four or five
bucks running ads it was that was the
sole focus because you know out of pure
naivety meeting we didn't know any
better it worked and if it works why
would we not just just do that
absolutely and we'll get into what
happens when it doesn't work here in a
bid I have a few more questions
so was your first website what was it
built on so we initially launched on
great joy which is a niche subscription
box centric platform and it was great it
allowed Daniel had I had a website up
using their template within a couple
days and it made it a lot of the
business aspect of it from the digital
side a lot easier to on board and kind
of get honestly uh what could be
considered less less than even proof of
concept I've been selling so it was
really you know we're not with them
anymore for a multitude of reasons but
at the time it was it was great we had a
site up and running taking orders within
within a couple weeks total yeah I mean
you got to find out whether or not your
product had any legs
you know defining that product market
fit I think that's I remember create joy
I did I believe it's still around they
are yeah yeah but I remember when the
whole subscription model kind of like
got super popular and you know a lot of
things we're launching on create joy and
I think yeah just it that contested
product market fit real quickly and then
just like kind of going to today I can
see parallels because great joy also
almost had a marketplace element to it
did it not they no they did they did
yeah that was that was a big thing they
were pushing because they they were
getting a reoccurring percentage of the
revenue from each box so it was a
potential great revenue source for them
so they were
really pushing that yeah so I think
that's that's cool so these days if your
start you're thinking about starting a
business subscription you know create
joy might be a good idea or just just to
see if your product has legs throw it up
on Amazon you know what I mean and if
it's even if you're seeing the sales
there it means that you are onto
something and then it might be
worthwhile to invest in an actual
website and building an actual brand
right a hundred percent before you you
know dump your savings or a large sum of
money yeah test it you'll find out
pretty quickly absolutely so you know it
was after create joy I'm assuming you
jumped over to Shopify we did so we were
we were with great joy for two and a
half years we had a combination of a
semi falling out with them semi we
really couldn't we we had kind of
outgrown them and and a lot of the
things we wanted to offer our customers
we just weren't able to so yeah so we
moved over to Shopify plus and then we
went with recharge for the the
subscription billing piece hey you
answered my next question yeah we we we
love recharges those guys are are great
they feel like when we're when we're
working with them and I have a couple
calls monthly with with our Account
Manager it's like he's part of our
business gas ask questions like he cares
and then gets strategy and plans with us
to really really try to grow the
business they're my number one
recommendation for subscription as long
as it's pretty straightforward the
further you get away from like the
traditional subscription model you might
be trying to fit a square peg in a round
hole oh we yeah we broke some things for
sure when when we when we went over to
him but I think
as long as you can you know bring
resolution when you break things but the
most important things things are gonna
break every where things broke them
crate joy things break on Shopify it's
how quickly do you respond and how
quickly do you get resolution and and
what you get from those guys I haven't
seen anything like it
no absolutely yeah they're right there
they jump jump right on it awesome so
let's kind of go back though you were
saying you guys were in the heyday the
Wild West of Facebook ads I see you guys
are requiring customers for ridiculous
numbers so you you kind of went all-in
on that strategy yeah I mean it was it
was great I wish I wish I knew what I
know today because I would have been in
my partner's Daniel and Patrick we would
have we would have taken every single
credit card every dollar we had and
thrown it to growing the business in
2015 it at four and five dollar
acquisition costs for us it's gone
significantly higher but um everything
was great
rocking and rolling throwing the
Facebook ads and in sauce throwing up
Facebook at the time so these are them
this is the first time we've done this
you know we're we're probably not
thinking like experts in that in that
space with you know proper audience
segmentation and and true multivariate
testing we're still not bads in there
working ah so we did that everything was
going great and we threw some new ones
up Friday Labor Day weekend so were
several months into the business
everything is just is going perfect and
new promotions all these deals were
gonna blow Labor Day out so excited
about it get done with the ads you know
a halfway through the day and they all
go they all go active around like three
or four o'clock Eastern Time we're
excited we're all at this point we're
still like in Google Analytics live like
watching people come to the site seeing
what they're doing then all of our ads
turn off and shortly after that we get
another notification that our Facebook
account has been shut down and this is
at this point like 6 or 7 p.m. on a
Friday so
we went from tons of traffic to her site
to literally no traffic unless someone
was coming back because they had you
know not purchased previously so all of
a sudden we had no business so it was
kind of like God aha moment of what do
we do
can you can you like translate that to
dollars and cents like how'd that affect
your bottom line yeah I mean so we were
we were expecting to have like a thirty
forty thousand dollar weekend and that's
just with you know first-time boxes
obviously this these guys are gonna love
the product and stay with us for a
multitude of months that you know some
years so it was it was kind of a oh crap
like we've ordered stuff like if we
can't figure out advertising at this
point like we're gonna have our first
like major hurdle trouble because
they've ordered all this product and put
in these boxes and now we can't
advertise and we we were we were off
Facebook we couldn't get anything if you
ever tried to call and get someone on
the phone for over there it's a little
little difficult at times so sending
multiple messages using every feature
they have it try to like appeal this we
got super lucky and we had a battle box
customer that was in or forum that
actually worked for Facebook and was I
don't know a couple offices or cubicles
or close by the the manual auditing team
that was responsible for like killing
apps and he said you want me to go over
there and like get it fixed for you and
we said yes please and I kid you not
like an hour later we were back in
business and back on Facebook as if
nothing ever happened but we were very
scared for for a solid five six days
because we went from top of the world to
we're not getting any sales
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in EST so let's kind of like break this
down to the lesson learned is you were
putting all your eggs in that one basket
and one hundred hundred percent and then
the basket disappeared yeah and then and
then and then the bat we were putting
all days in the basket and they took
their basket with our X in it and what
it was it was absolutely brutal but
you're right there was a huge lesson
learned and it was one that in in
retrospect in hindsight is common
practice for us now for any bread
anything were involved in but at the
time would not just in a naivety we
didn't know any better and that's just
diversification of your wheat sources if
you have you have to have multiple
resources you can't be dependent on one
because things happen and if your
business is dependent on someone else
and exclusively depending on that one
other entity or person that can be
absolutely so what's the second lead
source that you you went into so the
next one we went into was Google Ads or
I guess Google AdWords at the time
absolutely and you started splitting it
up the traffic sources and and yeah sort
of trying that honestly when when this
happened it was it was Google Ads but
then it's right away okay let's try
Twitter uh let's let's try reddit let's
try Pinterest
let's try everything
and you know we knew some stuff wasn't
going to resonate and and and and it
wasn't gonna work for the right
demographic we're targeting but you know
let's try everything let's find as many
different lead sources that are
profitable they give us either the
return on adspend or the customer
acquisition costs we're comfortable with
that's profitable and and let's keep it
diversified and we still keep it at
first might we we typically have between
five and six lead sources now at all
times active and in nine of them are
there's those ebbs and flows when when
we hit an amazing atom were able to
scale it but for the most part we try to
keep them all pretty equal in uh in in
their results and in performance awesome
and so what what was the leap from going
from you know focusing on battle box to
kind of you know bringing some other
brands under the umbrella sure so when
when I made the initial investment to be
a part of the battle box it was in the
agreement in the contract was that I
wanted to better understand the business
model of his description box piece and
if it was successful we wanted to kind
of stamp it out and replicate it a
couple of times so that's that's that
was the next step we launched in
December in January December 15 January

2016 we launched first barbecue box

which was a monthly subscription box for
barbecue connoisseurs sauces seasonings
rubs recipes and then the next month we
launched Spartan Cardon which was a
Fitness centric workout gear workouts
supplements protein bars stuff like that
so we launched both of those pretty
quickly just to try to test hey is this
is this business model that in more than
just kind of the subscription bottle box
business model really are our roadmap
and our
you know strategy of how to launch one
of these was it was a correct so so we
have we launched both of those in in
short order and had them until June of
last year when we sold solar both of
those businesses so in managing multiple
ecommerce brands at once I'm sure that
there is a lot of lessons learned and
just especially with the different types
of audiences in the way that you are
acquiring them with paid advertising
pretty sure there's no better way to
learn the ins and outs of marketing than
you know running your own business yeah
no I feel I feel like in this in these
past four or four and a half years I
feel like I've I've got in the
equivalent almost of a master's in
marketing like I've just went went from
knowing really nothing to force learning
but it's crazy when it's when it is
business when it is your livelihood when
you've got to figure it out and and it's
interesting and engaging and you're
enjoying it um it's it's crazy how fast
you can you can kind of sponge
everything and just and just learn and
we're still learning I I I try to learn
something new pretty regularly and I do
so with the kind of the business growing
over time and the brands growing over
time when did you guys kind of take your
feet off the gas and like kind of let it
start bringing in consultants like what
phase of the business were you guys like
alright well we know this works we need
other people to run this so I can focus
on either you know building a new brand
trusting a new model you know when did
that happen how big were you what was
going on so right when we hit for battle
box when we were projecting so our first
year I think we did like four four and a
half million the second year 2016
launching the other back brands about
halfway through the year we were
projecting an eight-figure Chris revenue
number that year and you know we were
all kind of burning the midnight oil but
there was so much old a burn like we
were spreading ourselves too thin so so
yeah we had we had to identify know
what's what
thing that were comfortable finding
experts on and what do we what do we
think that we're doing okay to maybe
someone else can do better someone
smarter and can do a better job so the
first thing we started doing was was
outsourcing some some of our marketing
so we took paid advertising about 80% of
our social content and then some tech at
the time just like connections and
integrations and and setting up some
automation so we outsource all that to
an agency a team agency was doing
everything absolutely and it allowed you
to focus on kind of that the things that
you were uniquely qualified to do I
guess correct yeah it's it's let's focus
on the things we're really good at so we
did that no longer using the agency um
as we've grown we we brought on some of
those services in-house because we build
it we can do the best job now yep we
still keep we still keep on advertising
out separately we um we actually were
planning on bringing it in-house and had
a game plan for that earlier this year
and a good good friend of mine who I've

known for actually a few years but never
thought it made sense to use his
services we ended up using his service
as a gentleman named Brent and companies
still venture labs so we we go to them
and they they manage all of our mad
buying advertising absolutely so a
question about you know how you kind of
you cut your teeth you had to learn all
this stuff do you believe that you're
better off as a business owner doing it
yourself and then hiring someone to do
it for you I think so
and there's been other aspects of the
business that probably bring a little
bit more true to this but it's tough to
be able to inspect stuff if you if you
don't have at least some basic
understanding of it I mean not that we
you shouldn't trust people and just let
numbers speak for themselves but but
sometimes it's you you want to be able
to look at a side of the business and
even if it's outsourced you want to be
able to make sure that you know they're
doing a good job
and if you don't understand that that
part of the business or that side of the
business it's a little bit difficult
your your fly your flying a little blind
and and you just have to trust and hope
that they're doing the right things and
um that's not always always the best
best situation to be in
absolutely let's be honest today all of
your customers are going to have
questions and what are you doing to
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second month free so now are all of the
businesses under the umbrella or just
most of them on the subscription model
so so none of them are the same umbrella
which is which is which is really
interesting they're all separate
business units for a multitude of
reasons but we do use shared resources
so a good example would be for carnival
or club so carnival club monthly
artisinal meets subscription link
charcuterie we we actually acquired them
on July 1st of this year so it was a
Toronto based company with this shared
resources economies of scale if you will
an example would be on the carnivore
side the Toronto side we have a
gentleman named Curtis and he was
running Amazon for that brand that
Amazon subscription box piece and then
you know traditional Amazon FBA so that

at the time was outsourcing that to an
agency to run to run our amazon and you
know by by post acquisition and shared
resources Curtis now oversees Amazon for
battle box as well and then on the
battle box I there's some shared
resources like customer service some of
our content creators graphic artists and
so there's a for each brand we have
spreadsheets where we read track time
use so that we can allocate you know at
the end of this month battle box you
know might have to kind of check the
carnivore club or vice versa just
depending on time use of the resources
my resources I mean employees in us
absolutely I feel like you could give a
crash course and the economies of scale
for EECOM that's the goal we were able
to and so we're actually in late stages
of acquiring a couple more subscription
boxes and that's that's what we're doing
now we look at their their their P&L and
balancing them and all their their
accounting Docs and and you know we're
able to see ok so last year this was the
Reba de but with with economies of scale
with with this this model we can take
you know it may be maybe they're even it
was four hundred thousand and we can say
okay Dave wine just day one alone you
know we can get that up to six hundred
six hundred and twenty and then over
time we know we can get get it up to
something else and at the same same
level with with the shared resources of
you know the future subscription box
they might be able to impact the even of
the other brands too so it's it's again
I think I'm getting a masters of that as
well in the past year oh yeah
just learning baptism by fire such a
cool just growth strategy for your
business and and I'm super curious about
all that stuff so I'm sure sure we'll
try to have you on again and we can talk
more about the you know scaling your
business by acquisition eat us I don't
think that's a topic that I've seen kind
of touch
in e-commerce I've seen it for kind of
other businesses but that's not really
the topic of today's show right I do
have one last question for you though
with most of the businesses being
subscription you know I think one of the
biggest things with subscription is is
churning you're losing customers people
are only there for a couple months what
are you guys doing across the board to
try to like increase the lifetime value
and keep people around sure so it's a
great question I'll try to give a
shorter answer but that's actually
probably a whole nother topic do so so
churn is is is so important I think just
probably in industry-wide in the
subscription box space because of
2015/2016 when I was seeing this
exponential growth in just this boom of
this little sub industry people were
focused on on churn they were focused on
you know I can get a customer for $4 I
don't care if they leave and obviously
now with with the exponential growth not
really there's still growth but it's
just not the same anymore than this
little sub industry the market has kind
of gone back to a little bit more of
reality you know paying attention to
turn is huge so I think it boils down to
a couple of things wine and this is for
all of our brands it's not just putting
items in the box there's so much more to
that it's about the customer experience
and that's important yeah obviously the
products matter and in putting high
quality products that have have value in
there but the experience pieces is very
important to in creating a community for
each brand and just engage superfan
customers treat treating them as if as
if they're family and that's kind of our
mantra and how how we view our customers
for all brands so that's that's very
very very key the other pieces the more
the more math side so you know there's
there's turn but but uh but a chunk of
churn is also passenger it so you can do
everything right but you lose these
people because the credit card o file
didn't work and the automated email that
we sent went to a spam folder and they
just don't even know and out of sight
out of mind they forgot about it I so so
big focus first last quarter and this
so for battle box out to my horn a
little bit we have our our total churn
at right at 4% which typically in in in

the sub box industry everybody's kind of
around that the good brands are
typically around 10 to 12 if you're
under 10 you're doing something really
really well so the the way we got down
to it was one I you know making sure
that it wasn't just a great product but
we're also giving the customers great
experience and and they're part of this
community but the flip side is we put
some automation in place I know you
chatted with with with Kristin earlier
this month from churn Buster's we uh we
implemented their product we have
certain parts of that journey with churn
Buster where it kicks that additional
ticket off to our customer service team
so they can take a look and see if if if
a actual phone call reach out makes
sense or a text or maybe perhaps another
email so for breaking on the math side
breaking it down and you know there's
there's the churn because we did
something that made them want to leave
and I'm breaking it off into the passive
churn is one attacking both of them at
the same time which was really
beneficial and kind of helped us get the
number down like a to be awesome I
was a great advice and I'm glad to see
that uh turn busters is out there in the
world working for people ya know we're
uh we're very very pleased with with
them so far
awesome well is there anything else that
you'd like to share with the audience
before you go today yeah
chase it's one thing that uh that it's
probably a take away and and III think
those are very very important going back
to more time with the diversification of
lead sources so you know our average
demographic for battle box is twenty
four to forty four and we don't
so with that age group the amount of
users that are on snapchat for example
are not very high because it's typically
you know there's not a lot of 30 year
old and 40 rolls on there so when we
were trying to find all these lead
sources we tried everything we tried
snapchat and it wasn't wasn't performing
well right big big surprises the ebh
them is just not there but what we found
was when Snap is actually a bit of part
of our r6 sources we use right now but
we don't use it in the traditional
prospecting like you would on Google ads
or Facebook we have the pixel place on
our site and we use snap purely for
retargeting so it's just another it's
just part of that that you know
multi-platform touch that gets the
customer you know towards actually
purchasing so it's the takeaway is if
you're not having luck on a certain
platform you can always attempt that
platform maybe just just for retargeting
Andry prospecting purely just has
another touch to try to get get that
that prospect over the over the hoppin
and to buy awesome thank you so much for
coming on the show today and sharing all
these insights and I absolutely will
have you back next year chase thanks so
much for having me man really enjoyed it
I cannot thank our guests enough for
coming on the show and sharing their
journey and knowledge with us today
we've got a lot to think about and
potentially add into our businesses
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available in the show notes as well if
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