Scaling an Ecommerce Store to $40M/year by Building Strategic Social Media Assets (with Gary Nealon)
Scaling to $40M/year through “the wagon wheel approach”
On the very first episode of Minds of Ecommerce entrepreneur Gary Nealon, founder of RTA Cabinet Store, that he now sold, walked us through a social media strategy that allowed him to scale ecommerce sales to over 40 million dollars a year.
That’s quite a feat considering cabinets are likely some of the hardest things you could sell online. We also learn how he was able to convert and acquire customers for products so large, complex, and expensive as cabinets.
The Wagon Wheel Approach
As we dive deep into one strategy that was really key to growth, Gary tells us about an approach he call “the wagon wheel approach” which is essentially using non-branded social media assets around the company to grow a fan-base and an audience that will be interested in the products you’re selling.
Gary explains that prior to selling, they didn’t have a single year where they grew less than 25%, which isn’t easy to maintain once you get up into 8-figure range. They were also able to drop their cost per acquisition from about $120 per customer down to about $15.
“Huge drop in cost per acquisition doesn’t factor in the cost to build out these assets, but those were kind of the two staggering ones. It allowed us to continue to grow where our competition didn’t really know what we were doing, and then at the same time drop our cost per acquisition.”
They were growing pretty fast but once they hit a certain level, the competition was knocking off everything they did- from the website, to the ads, and they were having to reinvent the wheel almost every single week.
Researching and understanding buyer personas is the first step of the strategy
Needing to keep the competition in the dark, and still insulate the company, they came up with the ‘wagon wheel approach’ “…it’s like the main business is the center, the hub of it, and then everything else was kind of spokes that came off of it but they all funneled back into the main asset. We did a really deep dive on the avatar of our customer. We really wanted to understand who they were.”
Gary and his team did this by using their customer database and running it through Clearbit to attach business information to their email accounts to look for patterns. On the homeowners side, they dumped that into tower data and got a really deep profile of income levels, number of children, etc.
“Buying habits, shopping patterns, any of those kinds of things we dump them all and just appended all those emails and just looked for patterns in there.”
Creating Facebook assets based on their customer personas
They also took that info and put it on Facebook, and created a look-alike audience so they’d get an idea of what pages they were frequenting and all those kinds of things, giving them insight into their hobbies.
“We knew as an Ecommerce business, especially as we were brick-and-mortar, people didn’t want to talk to us. They just wanted to buy a kitchen. They didn’t want to like have this long relationship where they’re reading articles on our Facebook page.”
Unable to get any engagement, they created non-branded pages, targeting things like cooking, baking, golf, barbecuing, cars, all things that they knew people were talking about .
And they got a lot of engagement because it was no salesy stuff.
They built an audience of about 1.5 million between all the different platform assets.
Once they had people engaged, it was time to broaden that to other platforms so they pulled them off through things like free giveaways to get them on email lists.
“The really powerful aspect of this is that Facebook saw that as part of our audience because it was all under our umbrella even though it didn’t have our brand on it. So when we were running sales ads or any big offers we were getting it as basically they saw that as one of our clients versus a cold traffic so we’re paying, our cost per acquisition normally was about $120. We’re getting it from anywhere from $15-$18 by using these audiences.”
They decided it was time to scale as much as they could, so they started creating more and more of these. Not all of them worked.
“We test them out, give it a couple hundred dollars just to see if we can get some traction on it. And if we got some traction we’d dump more money into it, but if not we’d just drop it, move on to the next one.”
People were able to engage with them, not realizing that it was an actual cabinet store that they were talking to, and then once they were onto an email list, RTA would softly introduce them to the aspect of a new kitchen.
”We’d have free kitchen giveaway and all these different things. So we were a really intricate system to pull these guys off of our social media pages and get them into our ecosystem.”
RTA was selling a product that’s very complicated to sell online, and something that people are likely not just going to browse on Facebook just for the sake of browsing. They drastically reduced their cost per acquisition for a pretty high average order value, which is fascinating, but that was really through understanding that audience and creating pages and social media assets that was really focused on those interests and not on the brand. Replicating this strategy on other platforms
Gary also created social media pages across other platforms like Pinterest and Instagram. Facebook was easiest for them to scale at the time, but Instagram has caught up. He favours Facebook for its Messenger bots which allows for better engagement than even email.
“There are little tips and tricks you can do to get that initial boost of a page, like small $5, $10 boost for posts that you see are doing well, making sure that if somebody likes the post you actually invite them to like the page. Just those little things that can help it grow at least to 10, 20 thousand followers pretty fast and then start pulling them off onto these other platforms or onto messenger bot or onto email and those kind of things.”
Honing in on customer segments
They focused their targeting efforts on the homeowner segment of their audience, rather than the professionals, because it was easier to hone in on their hobbies and patterns. They knew if they could catch them before their competitors did were running their ads because they were all geared towards the buying aspect, or the buying intent.
“We want to go way before that and talk to them before they’re even thinking about buying and actually convince them they want to buy.”
The easiest pages for them to scale related to cooking because you’re already in the kitchen when you’re doing it. Barbecuing, cooking, baking.
They had a coffee page that grew to 150-60 thousand followers. Really nothing to do with kitchens, but they knew that a passion for tasting coffee could lead to kitchens.
“Harder ones were the automobile ones and the golf ones. How do you correlate that back? They would find golf products that had giveaways to grab their email addresses to divide them into certain buckets to get conversations going.”
It’s a long 60-90 day email campaign that just kind of convinces them that they want to start shopping for a kitchen.”
Know Your Customer
Gary went on to share that the best way to use this method is to really understand the avatar of your customer. Speak their language. Focus on sharing topics that you know they will share in order to build your audience and begin to engage them. And always be testing.
What Gary Would do Differently
When we asked Gary if he were to start over again with a new Ecommerce company and was at the one million to five million mark and wanted to scale the company further what would he do differently, he said he would diversify traffic flow as quickly as possible.
“Don’t get so comfortable with one traffic source because you’re good at it, and neglect to test out the waters on other stuff.”
“We never had one traffic source that was more than I think 18% of our business.
Check out Gary’s blog garynealon.com for Gary’s free resources.