Scaling E-Commerce Profitably: Insights from Thomas Gleeson

[00:00:00] Amanda Webb: Today’s guest is Thomas from StoreHero. Hello Thomas. How are you?

Thomas Gleeson: Hey Amanda, really, really nice to be on the show. Really looking forward to chat to you this morning.

Amanda Webb: I’m all good. I’m delighted to have an Irish guest on because as most of the people who know me know, even though I’ve got this English accent, I’ve been based in Ireland for almost 30 years. So it’s always good to have someone from Ireland on and I’m really excited to have you on cause I think you’ve been really smart at promoting what you do. So actually you were the top of my list when it came to doing these podcasts. So firstly Before we get into StoreHero, which is what you do, and what we should be measuring and not measuring for an e-commerce business, tell us where this started for you. Where did, how did you get into marketing?

Thomas Gleeson: Yeah, it’s quite a long story actually. My, my mother has actually had an e-commerce business in Ennis in County, Clare called Wowee. ie. Actually for 20

[00:01:00] Thomas Gleeson: years. So quite a while. That was a very much, you know, small family business at the start kind of grew over time. The nature with any family business is that, you know, every, it’s all hands on deck for everybody. I often kind of tell a story where. You know, in a lot of houses, maybe it was hoovering the hall or cleaning the car was the chores. We were, we were doing SEO on mam’s website. Maybe when I was 10 or 11, 12 years age, 12 years old. She always said it would stand to us. I never probably believed her, but, 20 years later, I’m still here doing this. So maybe she was right. So, yeah, I mean, it was very interesting kind of to grow up in that house, to be honest with you. wowee.ie is kind of personalized gifts, baby gifts, wedding gifts, Christmas gifts, that kind of thing. It was an interesting start. You know, people have, for instance, we actually just grew the business. I say we, mainly my mother, grew the business primarily through SEO only for probably 12 years, which for anybody listening today, which is, you know, everybody’s spending

[00:02:00] Thomas Gleeson: heavily on Meta and Google. That kind of sounds like a pipe dream. To be able to grow a business purely through organic mechanisms. But, you know, e-commerce wasn’t as rosy as that sounds back then. You didn’t have the technological infrastructure like Shopify out there today. I remember vividly days coming home, she would come home from work and the checkout would be broken or this piece of tech will be broken. That piece of tech will be broken. So yes, I mean, you didn’t have the constraint that a lot of e-commerce businesses have today around rising, rising customer acquisition costs. But you also didn’t have that kind of technological infrastructure that I kind of spoke to there as well. So I suppose, yeah, we grew up working in the family business, doing everything from SEO. Then I suppose when, maybe 2016, I kind of started, you know, figuring out what a Facebook pixel was. You know, what, what, what is that? You know, we were doing a bit of boost posting. I’m sure everybody’s familiar with that, listening to this as well. But. You know, really trying to understand how do we retarget customers and

[00:03:00] Thomas Gleeson: that kind of thing. And that was really interesting for the first time. You know, seeing the levels of granularity that you could get to, to target individuals and then being able to actually understand, okay, how many purchases have I driven from that, or from that, that ad? What’s it costing me to get a purchase? This was not data that we ever had before. And yes, it sounds very normal for everybody listening to this podcast to understand that right now. But like that was eight years ago. It’s, it’s, it’s a long time in the scheme of e-commerce, you know, I actually set up my first e-commerce business myself in 2014. So, it was a business called Stories About You. And essentially what that was, was a personalized gifts book business that I actually did with my granddad. Would you believe, So my grandad is a brilliant artist and he would paint the books originally. So I wrote four or five. I think there was one about, hurling, Gaelic football, for any of you English guests, there are two Irish sports, Christmas, First Holy Communion, and kind of going back to primary school. So the idea was that you could pop in your child’s

[00:04:00] Thomas Gleeson: name, their county, their Favorite team, favorite player. And they come on and match and score the winning goal. And, you know, the book is very tailored to them and personalized to them as well. So I started that in 2014, probably ran that for five years, never really made a whole lot of money out of it, to be honest with you. But what it did give me was a massive grounding in e-commerce and really just trying to figure everything out. Again, trying to hone in on what I had done for mam’s business, really trying to figure out SEO, setting up a website, which wasn’t on Shopify. Originally it was on a platform called Volusion. And then moves over to Shopify in 2019. But figuring out that, figuring out how to buy products, figuring out how to set up an email marketing campaign, running my own Facebook and Google ads, that kind of thing as well. It was definitely an exponential learning curve at a younger age that definitely stood the test of time to me. I know I’m kind of going on here, but it’s quite a detailed story. From there in, I think it was, yeah, I said, I moved the business over to Shopify, my own business. I

[00:05:00] Thomas Gleeson: think it was January, 2019. I’m not sure if anybody listening is familiar with the platform called Udemy. Basically an online learning platform and I found a course online to how to build a Shopify store for 20 dollars and I found a couple of them and I did them all in the space of probably two months and then move my own business owner, my own, my own business over, and I actually ended up setting up another kind of, you know, artificial plants, pots, tables of home care tables, that kind of thing, business also on Shopify. Just to kind of, I was in the weeds with it every day. And it was interesting. That June, I think it was probably 2019. I actually came across an ad on Facebook to work at Shopify directly, as a support rep. And. I mean, I was kind of just looking at Shopify all day, every day at that stage. So I thought, you know, what better place to go and learn how to run an e-commerce business than go and work at the company who has the most e-commerce businesses in the world on there.

[00:06:00] Thomas Gleeson: And. I ended up getting the job. It was a class. It was an amazing experience. So the original support role was, you know, helping people with everyday business owners with, you know, the everyday problems. How do I add my domain name? My product page is broken. I need to add a Facebook pixel. You know, more technical based questions. The parts of those conversations I would really, really enjoy was when people said, you know, I’m trying to improve my average order value. I’m trying to improve my conversion rate. My Facebook ads aren’t working. I didn’t actually really enjoy the technical side of it, if I’m going to be completely honest, but I really loved what Shopify kind of termed as those merchant growth conversations. That was kind of the first foray at Shopify. And then, I kind of moved through a couple of different roles. I spent about three and a half years there, but the last two years I was essentially working in Shopify plus. And for everybody who’s not familiar with Shopify plus is essentially the kind of the tier for bigger businesses within the platform. So the first kind of year in that role was working with, essentially

[00:07:00] Thomas Gleeson: as a consultant for brands between about five and 15 million. And then the last year I was working with brands between 25 and 200 million. And that was an incredible experience because you’re literally working with the biggest brands in the UK. You’re speaking to the owners every day of the week. And I’ll just tell you, Amanda, they don’t all have it figured out. They worry about the same things you and I do on a daily basis, but it was a really, really interesting experience to hear these guys, you know, talk about, you know, what they’re planning, how they’re thinking about it, what they’re concerned about, what the problems they have. And, you know, for me, that was the dream job to land because. Very quickly, I was just in front of the best and the biggest e-commerce and Shopify brands in Europe, speaking directly to the founders. And for me, that was just exactly what I went to Shopify for. It was to try and just soak up as much industry knowledge as possible. And I suppose, yeah, to kind of summarize that, that’s how my marketing and e-commerce journey really began.

Amanda Webb: That’s huge. So firstly, you were

[00:08:00] Amanda Webb: born into this, which people my age are a little bit jealous about because we didn’t even have the internet till I was in my twenties. And secondly, also you’re really annoying cause you’re one of those serial entrepreneurs that just keeps trying things. And again, that makes people like me really jealous. And also thirdly, I’m really glad to hear that all, cause I think a lot of businesses think everyone else is, you know, better than them because everyone else is smarter than them. So it’s really good to hear that some of those big business owners are in the same position as a lot of us. And with Shopify, which is obviously we’ll talk about StoreHero in the moment because Shopify is the obvious choice. Now, I think for as much as I love WordPress, you know, I hate setting up analytics on WordPress on, WooCommerce because it’s so complicated. Shopify really has everything in place, to, to make. e-commerce easy for small businesses. So it really makes sense for them to do that, but it is lacking in some areas. And that’s really what we’re going to, we’re going to talk about

[00:09:00] Amanda Webb: or out of the box, it is lacking in some areas. So firstly, the biggest issue for small businesses now who have an e-commerce store, you talked about installing the Facebook pixel back eight years ago, which does seem like another century ago in the world of e-commerce. What’s the situation now? What is the problem for businesses that might be using Meta ads now?

Thomas Gleeson: Yeah, I mean, even just kind of to take a step back before we go into that, you know, 2020, obviously we won’t mention the C word, but the C word basically meant that we had a massive influx of loads of new businesses online for the very first time. Many retailers, smaller businesses who weren’t thinking about e-commerce were all forced online at one time. You know, it was a crazy time, really. You had that happen. So everybody was forced online. And then you also had this other thing happen, where

[00:10:00] Thomas Gleeson: everybody was locked up at home all day. And what do you do when you’re locked up at home all day? You’re on your phone. You’re scrolling all day. You’re on your laptop. But from a Facebook and Google perspective, what that means is there’s so much people on their phones. And anybody who’s running ads, you mean you have so many eyeballs to get to those ads. And really what I’m trying to get to is you had a position where there was way more new stores, a lot of them online for the very, very first time, coupled with this situation where everybody was home on their phones. So ad prices were actually on the floor. Again, people don’t really think about that because everyone was in lockdown. Everybody was on their phones. That just meant ad prices were really, really low. And then coupled with that, you had, you know, checks being sent out to everybody. People couldn’t really spend their money. So people had way more. Just, you know, extra cash in their pockets than they probably ever had in a lot of cases before. Not everybody, but for, you know, for a lot of consumers, it actually was a good time financially. So all those things combined just

[00:11:00] Thomas Gleeson: meant that you actually really couldn’t have created better macro conditions for an e-commerce business if you tried. All physical stores are closed. Ad prices are on the floor. Consumer has loads of money. I mean, it would set up absolutely perfect for it. Now the challenge brands have had from we see it obviously every day, but I’m sure you see it as well Amanda the problem brands have had In my opinion, in maybe the last two, three years, is that, you know, physical retail has reopened, obviously, all the shops are back open, nobody’s on their phone as much as they were, so that’s coupled with way more new stores online, has just really driven the cost of advertising for e-commerce businesses, you know. To a point, unfortunately, for a lot of businesses where it’s unsustainable and they’re really, really struggling and that we kind of call it the Facebook or the Google tax, you know, a lot of brands that are advertising. Now, the cost to acquire a customer in some cases has doubled or tripled from what it was two, three years ago. And, you know, if paid

[00:12:00] Thomas Gleeson: marketing, and unfortunately it is the case. For an e-commerce business, you rely on paid marketing to drive your business forward. And if it’s now costing you double or triple to acquire a new customer, you know, that’s a huge tax that has suddenly been placed on your business that you mightn’t have had before. And it’s definitely an area that we see an awful lot of brands are struggling with. And I suppose they’re really just struggling to quantify, is paid marketing worth it? Am I making the right decisions? Like you need to make as a business owner, you know, hundreds of decisions, micro decisions on a daily basis. If ecom is your primary mechanism to drive sales, the decision around how much do I spend in advertising is probably one of the most important decisions on a daily basis that you need to make, and it’s often one of the most difficult decisions to make as well. So those two things combined just, you know, make it a challenging time for brands.

Amanda Webb: You’ve been in business a long time. You’ve been in business since you were a toddler, basically. And I remember the time when Google ads, we went through exactly the same thing with Google ads. Google ads used to be

[00:13:00] Amanda Webb: as cheap as chips. You could, as long as somebody wanted to buy your product, if you put an ad up, you would sell it, you would make profit. So is this the second wave that we’re talking about here?

Thomas Gleeson: Yeah, I think so. You know, Shopify have made it really easy to start an e-commerce business. You know, if you open up the shop, this is not an ad for Shopify, by the way, but if you wanted to set up an e-commerce business today, you can log on to Shopify. You could probably be live with a new product in an hour. If you put your mind to it, that’s, that’s just a million miles away from where things were even 10 years ago. Like so far away. That’s. That’s really easy to set up. The thing I often say to people is yes, I mean, it’s never been easier to start an e-commerce business, but I think the problem is it’s never been more challenging to grow that business profitably because you know, once the barrier to entry is dropped and it’s really easy for everyone to set up a store, everyone’s coming online. Like the amount of new Shopify stores that

[00:14:00] Thomas Gleeson: are set up on a daily basis is incredible. Now, the problem with that is. You’ve way more competition coupled with the fact that rising customer acquisition costs, which you just touched on there mean that to You know start getting that first 10 sales and making sure that they’re profitable is really really hard today And you know, I think there’s probably four I often get asked what business would you would you start tomorrow? And to be honest with you, I don’t have a specific business in mind if it was an e-commerce business, but there’s like four key Pillars that I would ensure the business would need to have.

Amanda Webb: And what are they?

Thomas Gleeson: So Number one would be you know, really healthy gross margin so when I talk about gross margin, i’m not just talking about your product cost take been taking out your product cost products packing shipping transaction fulfillment fees any return costs After you take out all of those fees. What does your gross margin look like? I think for an e-commerce business today that needs to be at 60 percent minimum a lot of brands that we’re working with, with StoreHero, that’s, that’s around 30 percent and that’s a really,

[00:15:00] Thomas Gleeson: really hard business to scale today because as we’ve just touched on, you know, the cost to acquire customers is just going north, unfortunately. So if you’re starting with a really low base of gross margin, that’s going to be a hard business to scale profitably. Number two would be, you know, capacity to have a really high repeat purchase rate, even though we’re all the best marketers in the world listening to this podcast, if you are working at a brand that sells sofas and sofas only, There’s no way you can influence your customers to buy a new sofa every three months. It’s just not going to be possible So how do you think about? what i’m trying to say there is you need to think about the product that you’re going to start your e-commerce business and the capacity of your your customers to repeat purchase that product Over a specific cadence over a certain period of time really good examples of this would be you know pet food Beauty products supplements that kind of thing where your customers will probably love to come back every 30 60 90 days . The beauty of a business like that is it almost acts

[00:16:00] Thomas Gleeson: like a software business to a certain extent, you know, buy once, sell a hundred times, whatever it’s going to be, because the more times you can get your customers repeat and come back, that just means you can afford to spend more and more up front. The initial acquisition of that customer, and that’s just a really, really important piece that brands need to take into account. The third one is just being a seriously good operator and keeping a very, very lean team. I typically would like to see operating costs as a percentage of your net sales to be at like 10 to 12 percent of your overall revenue. If you can do that, that tells me you can run a really, really lean business. And that is just so important today as that kind of Facebook and Google tax has been applied to businesses as well. And the last one I would say is brand with a capital B. And what I mean by that is don’t, if you’re selling a product, don’t just make it a product. Don’t just run bottom of funnel conversion campaigns. It’s never been important, as more important to invest in your brand.

[00:17:00] Thomas Gleeson: Once you can build a brand and get customers hooked on who you are as a brand, what you stand for, and just, you know, being very, very familiar with the brand that would massively help your organic growth of the business, your referrals from existing customers to new customers. But I just, it would also allow you to, to price your products higher. Just to give you an example, one, one Finnish shoe brand I’m working with at the moment, they increase their prices by 30% in January and that’s that’s a that’s a big that’s a big spike. They’re not cheap shoes as it is Now what they were they were terrified I was speaking to the e-commerce manager before he did it He’s like I think this is a terrible decision, but it’s coming from the top. I need to just follow my orders The other thing was they they saw like a one or two percent drop in conversion rate so what they realized was the brand had become so strong that they were very elastic in the mind Inelastic in the minds of their customers and therefore the price increase actually didn’t really affect the purchasing behavior of the customer and all that

[00:18:00] Thomas Gleeson: increase in you know the price of the product just allowed them to acquire way more new customers in the business It’s just much better off in a much more profitable position Just to recap I would have really strong gross margins Make sure that you have repeat purchase capacity built into the product that you want to start being a really, really good operator, ensuring that you have a lean team, try and keep those operating expenses under about 12 percent and making sure that you’re investing and building a brand more so than just a store that sells a specific product.

Amanda Webb: Great. And I think to me, two things have come out of that. So firstly, I’m imagining even though people are tuning into the analytics show, but there are a lot of people that aren’t even measuring these things at all. So I think we’ll talk about that in a second. Secondly, operating costs, what goes into that? What, what would you include? So that should be 12 percent of your costs of running the business. Is that what you’re saying? Or 12 percent of your margin or,

[00:19:00] Thomas Gleeson: yeah, great question. So let’s just say you’re a brand doing a million a year. Let’s just say 500k a year for the sake of simplicity. I would love to see your operating costs at 12 percent of that. So, you know, about 60k maybe. So, included in that, you’re going to have to have your staff costs, rent costs, any software fees. I would probably, if you’re paying an agency, I would put that in your marketing costs. Not in your operating expenses. There’s a slight distinction, which we’ll come on to in a few minutes. But yeah, staff costs, rent costs, that kind of thing. It within that, that kind of 12 percent bracket.

Amanda Webb: And I’m sure there’s lots of people that aren’t even thinking about that in the first place. And a lot of small businesses that are thinking about themselves, should I just take a bit of money out when I’ve got a bit of money? So I think that’s something I would like people to take a step back from. I think people are often so busy marketing their business, cause that’s Fun, as far as I’m concerned, that they forget about all the different bits they want to

[00:20:00] Amanda Webb: measure. So with that, let’s talk a little bit about StoreHero, because in some ways, that’s a bit of a solution to some of these problems, particularly if you’re relying on things like what your Facebook ads are telling you, your ROAS that can always seem Oh, look, I’ve got this much return on my ad spend, and you’re not really looking further down the line. So tell me about that.

Thomas Gleeson: Yeah, so StoreHero is a tool that myself and my co founder Carl have, Carl O’Brien have built over the last two years. So we’re now working with over 400 e-commerce brands and essentially what StoreHero does is allow you to plug in your Shopify, your WooCommerce, your Magento, your BigCommerce store. All of your Google Analytics, your search console, your email marketing, your Facebook, Google, TikTok ads. But most importantly, we also bring in your true shipping costs, your fulfillment fees, your return costs, transaction fees. And why does any of that matter? We want to help brands actually understand in real time, as they’re diving up and down their marketing spend, are they more or less

[00:21:00] Thomas Gleeson: profitable as a result? We see a huge problem at the moment in the e comm landscape in that every business I’m speaking to, their customer acquisition costs are rising. We just touched on that quite extensively. On top of that, yes, they’re spending more to acquire a customer. They’re also spending more on marketing in general than they probably ever have before. So you couple those two things together. Costing is way more to acquire, you know, Mary a new customer and to acquire 20 Mary’s. We’re also spending just way more in general as a fixed fee. The problem I have with that with a lot of businesses is I ask them, you know, okay, how are you quantifying or measuring success of your paid marketing at the moment? And they say, Oh, well, you know, we have a, we have a great ROAS on Facebook or Google. And then you dig in and say, so you trust the ROAS from Facebook and Google, do you? Okay. And nobody will say yes, they all say no, you know, we don’t because the problem is and you see this as well You know, you log into Facebook and you log into

[00:22:00] Thomas Gleeson: Google and they’re both trying to claim the same sale, you know Everybody listening to this podcast has seen this often you’ll see 50k in Meta ads and 50k in Google and then you log into shopify and you might have 80k In revenue and you know that all hasn’t come from paid marketing. So there is huge double counting going on for both parties, and that just means that business owners are in a position where they’re spending more than they ever have. And they’re basically quantifying the biggest expense in the business on a metric that they don’t trust at all. And I think that is just a recipe for disaster. And it’s just not a really efficient way to run a business. So essentially what we’re trying to do is we figured out how to get to a figure called contribution margin. And don’t get scared. That’s not an accounting term. Really what we’re trying to understand is as you spend more or less on marketing, I’m actually not as focused on your sales. I want to understand your profits after that spend. So if you’ve increased

[00:23:00] Thomas Gleeson: your spend by 20 percent this month, okay, yes, we can look at your sales, but I don’t really care about your sales that much. I want to understand as you’ve spent more on your marketing, has that meant that you’ve driven more or less profit as a result? If you’ve driven more profit as a result of that increase in my book, you have the green light to spend more again next month. If for instance, you’ve increased spend by 20%, Sales have gone up slightly, you know, previously you might think that was a good idea, but maybe what might have happened is, spend could be up by 20%, sales up by 10%, your profit after marketing spend could actually be down by 10%. The only data that we’re taking from Facebook and Google in that instance is how much you’ve spent , i’m not looking at ROAS anywhere in that equation there So this is a really really true reflection of your e-commerce business And obviously when you once you plug you in you can look back over the last 12 months and actually see, you know Okay, we know in whatever June we

[00:24:00] Thomas Gleeson: took we took we took a bit of a punt And we spent 50 percent more on marketing. We can have a quick retro on that and see was that actually within the business’s best interest or maybe the business owner has a hunch that it wasn’t really useful or it wasn’t very beneficial, but I don’t actually have the data to back it up. StoreHero will quickly articulate that value to you and show you was the increased spend actually worth it for the business.

Amanda Webb: I think that’s really important because, as someone who like a long time ago tried to run an e-commerce business, And I ended up doing more sales offline than online. Yeah, you wouldn’t know where you’re making a profit. That was the whole thing. You’d never know unless you were crunching numbers every day on top of all your other activities. So I think that’s kind of like, That is really important. Like back then I wasn’t spending on ads. It was pretty much like your mam’s business. I was relying on organic stuff to get, to get the sales, but so many businesses out there might be losing money, which brings me to just one more thing.

[00:25:00] Amanda Webb: And I’m not sure if this is your ballpark at all, which is about discounts because we see discounts everywhere. Oh, I’m not getting enough sales. I’ll run, I’ll run a sale. I’ll run a discount. Obviously there’s a danger in that. So, so what are your thoughts about that?

Thomas Gleeson: I could talk for five hours on this one, Amanda. Discounting. Yeah, I look, I mean, look, it’s a necessary evil in some, in some instances. What you don’t want to get into is a habit where, you know, end of the month, you’re not hitting your numbers and you just go on. 20, 30 percent just blanket sale. And you know, you hit your numbers. That’s a really bad way to run your business because you’re just training your customer to wait for the discount. And if you haven’t priced that discount in day one into your margins and your, your forecast for the year, you’re going to find it very hard to be profitable. The problem I see with a lot of businesses is that to that point, it’s not baked in at the very start of the

[00:26:00] Thomas Gleeson: year. And yes, your Facebook ROAS will improve. You know, you probably will hit your sales figure, but if you’ve gone on 20 or 30 percent discounts, you probably eroded all of the margin to get there. And that’s a really, really difficult position to be in. I mean, discounts can be useful to clear out stock, to, you know, promote a new product, but use them very sparingly because once you get into the habit of not doing the monthly 20, 30 percent discount, it’s very, very, very hard to reverse that cycle and train your customers to shop otherwise at full price. Particularly, and this probably sounds counterintuitive, as your Facebook ads are getting more and more expensive. If you’re going to erode all of your margin through discounting, you know, that coupled with the rising customer acquisition costs, your margin is just getting squeezed everywhere. And that’s a hard position to be in for businesses. So, I mean, one of the things we do have in the platform is the ability to see your customer lifetime value. So you can see month over month. Okay. Let’s look

[00:27:00] Thomas Gleeson: at August for instance. We acquired 700 new customers On average it cost us 20 euro to acquire a customer and the gross profit on the first purchase was, you know, five euro Okay. Now, let’s look at September. Maybe we acquired 800 new customers The average customer acquisition cost was maybe, you know, a small drop 18 euro, but we ran a 20% discount so Maybe the the gross profit on first purchase came back to like 20 quid or whatever. It’s going to be so You’re just trying to understand for businesses as you’re dialing up and down discounting A how is that affecting the number of new customers you have B how is it affecting the cost to acquire your customer but C and which is probably the most importantly how is that affecting the gross profit on that first purchase because You know That’s that’s the most crucial part of it all And it probably goes back to one point I consistently challenge a lot of business owners on is, you know, what are you actually measuring? What are you striving for?

[00:28:00] Thomas Gleeson: Most people tell me sales growth. I want to hit x amount of sales this year I honestly think that’s a really poor way to run your business. I think you need to start with, there’s a really good book out there. I recommend anyone listening to this podcast would, should read it. It’s called Profit First by Mike Michalowicz. Probably butchered that pronunciation of that name, but you get the picture. Essentially what that is, is essentially putting like, what profit do you want as a business owner? And then basically building back and saying, okay, to hit that profit figure, how much sales do I need? This is my operating cost to run the business. This is my gross margin So starting with the bottom in mind first as opposed to the top and the reason I say that to people is that because If you’re a business and you want to hit 500k this year and you get to the end of November, it’s kind of coupled with this another point I’ll come to in a second, but if you are a business that, you know, you want to hit 500k for the year, you’re coming to the end of November, you’re not there. If your sole North Star for the business is to hit that 500k for the year.

[00:29:00] Thomas Gleeson: You know, you might just go heavy into discounting to drive your revenue up. You might go heavy into paid marketing to hit your, to drive your revenue up. And you know what? You probably get there. Now, have you had a successful year? It depends on what you’re measuring. Back to my original point, you may have hit that 500k mark, but if you’ve just done the heavy discounting, coupled with the really big spike in marketing spend, There’s a good chance you’ve hit your number, but you may have lost a ton of money on the back end. So try to sit down day one, figure out what your profit goal is. Be realistic with this. We all want 10 million in the first year. I’m only messing, but you know, be realistic of what your profit goal is. If it’s breakeven, that’s also completely fine, but just reverse engineer it. Here’s my profit goal. Here’s my staff, my rent, my operating costs. Here’s my gross margin. And you know, this is what it’s going to, this is how many sales it’s going to take me to actually hit those numbers. That’s a really important piece that not enough small business owners are looking at. Start with profit first, read

[00:30:00] Thomas Gleeson: that book, and stop just simply measuring your sales revenue because I’m seeing way too many businesses, you know, really struggling as a result of just focusing on top line revenue when really they set the business up to turn a profit and it’s often an afterthought or, you know, let’s see what happens at the end of the year. You can reverse engineer it. And often you’ll be surprised with how, you know, it changes how you look at your business every day.

Amanda Webb: You know, I love that point because I am one of those persons, people who has a revenue goal, but I’m also one of those people that’s very tight on my profits. I am, as I said, I didn’t want to crush numbers all day. I do. I keep an eye on everything to make sure I’m profitable, but I’ve never, I feel like I need to slap myself in the face now because I never thought of just setting a profit goal instead of a revenue goal. That makes so much sense. So if there’s one thing I’ve learned from this interview, it’s a hundred percent that. So thanks for that. That’s fabulous. I’m going to, I want to keep talking to you all day long, but, I need to close the podcast. So I’m going to come onto our quick

[00:31:00] Amanda Webb: fire questions. So firstly, data, data or data?

Thomas Gleeson: Data.

Amanda Webb: Data, really? Really? You’re letting me down. You’re Irish, you’re supposed to say data.

Thomas Gleeson: I don’t have a strong opinion of it.

Amanda Webb: You had to think about it as well. What is it that you do say? So cookies, when you get a cookie banner, do you dunk it or do you delete it?

Thomas Gleeson: I actually usually accept them. I’m just more interested in the ads.

Amanda Webb: Yeah, most people hit no.

Thomas Gleeson: I’m genuinely more curious about what kind of marketing they’re doing. It’s probably just the inner marketer in me. I usually accept them.

Amanda Webb: So do I. So do I. And I’m often, I was actually, when I first found out that people actually do decline them, I was kind of shocked. I didn’t realize that happened, but now I see in my own stats from my own cookie thing, so

[00:32:00] Amanda Webb: many people do. Okay. And third question is, AI yay or nay?

Thomas Gleeson: Oh, massive yay. A hundred percent. Yeah. Yeah. I mean, look, this is. Fundamentally going to change how every business operates and even going back to that, that, you know, lean operating cost piece, there’s so much that you can do at the moment, even with just the ChatGPT, that it will get so much better again over time. The efficiencies that you can drive from various AI tools at the moment is absolutely incredible. You know, everything from writing great email customer copy, you know, to spreadsheet enablement to, you know, writing macros in Google Sheets. I’m not an expert in Excel or Google Sheets, but thanks to ChatGPT. I can write these really long complex formulas that would have taken me years to figure out how to do so. Yeah, I mean, it’s, it’s as good as the prompt that you’ll give us is what I’d say. And

[00:33:00] Thomas Gleeson: a problem I see a lot of brands or, you know, people in general struggling with how to navigate ChatGPT is giving it a very, very generic prompt and not being happy with the results. But, yeah, you can go so, so, so deep with this. One thing we’ve actually just launched quite recently within the platform is in the StoreHero platform is, you know, what one challenge that business owners have with the tool like us sometimes is that there’s a lot of numbers there and it’s hard to understand what it all means. So once you log into the StoreHero platform, now you set what your goals are. So you set that profit goal. And basically every metric has, you know, versus last week or last year, but also versus Target. And basically there’s an AI summary that crunches the whole numbers of the business and tells you a story as to what actually happened in the last week, what was good, what was bad and what you need to focus on. That’s just a small thing that we’re doing to try from an AI capacity to basically try and just crunch the numbers for you and tell you what to do instead of you needing to.

[00:34:00] Thomas Gleeson: understand all of these million acronyms I just mentioned in the course of the last half an hour. StoreHero will just crunch them, explain to them what they are and really just give you your to do list in terms of what’s good, what’s bad, what you need to work on in order to hit those profit goals that you’ve set yourself.

Amanda Webb: Wow, that sounds amazing and I’m so happy you, you are an AI advocate because I’m kind of like it’s not being an advocate, it’s just part of my toolkit and those macros, absolutely, in Google Sheets when I’m analysing data, they are a lifesaver. If I’m trying to pluck those out of my head, that’s not happening. So, absolutely. Never, but not for me anyway. I’m sure I could learn it, but hey, AI can do it for me, so it’s all good. Absolutely. I know you have a podcast which I think, I was going to suggest to everyone they followed you on LinkedIn because that’s where I follow you and I see this sort of wisdom every day from you on LinkedIn. So where, where apart from LinkedIn, where do they find you on LinkedIn?

[00:35:00] Amanda Webb: Where else should people find you?

Thomas Gleeson: Yeah, we’re on, we’re on LinkedIn, at Thomas Gleeson. We are on Twitter with the StoreHero account, on, YouTube. That’s where we run our podcasts on. It’s also on Spotify as well. Just type in StoreHero Podcast, you’ll find it. We’re on TikTok. We’re on Instagram. We’re not on Facebook, actually, but we’re everywhere else.

Amanda Webb: Good, good, great. So, and I hear you have an e book.

Thomas Gleeson: We are, yeah, it’s the fourth, we’re recording this on the fourth of September, but we’re actually about to release it now this afternoon. So, I’m really, really looking forward to getting that out there. We’ve got 20 to 25 really, really good contributors. I mean, really just to still, you know, You know, maybe a lot of the messaging that I’ve spoken to in the last 30 minutes, 40 minutes, whatever it’s been around, you know, really getting your e-commerce business ready for a really profitable Q4. And we have some really good contributors in there trying to break down a lot of the kind of key points that we would have touched on in this maybe in a lot more detail. So it’s free to

[00:36:00] Thomas Gleeson: download. You can head over to our website storehero.ai. And there’s a little banner up the top there to download our Q4 ebook. This year I’d recommend everyone download it. There’s loads and loads of really, really good and valuable information there. And obviously, if anyone has any questions on anything, any of the content in there, just feel free to reach out to me on LinkedIn or by email at thomas@storehero.ai. I’m more than happy to answer any questions that anyone might have.

Amanda Webb: Great. Thanks so much for, being a guest on this first series of that analytics podcast. And, we’ll see you again.

Thomas Gleeson: Thanks very much, Amanda. Lovely to be on.