Patrick Coddou is a direct-to-consumer pioneer, having launched Supply.co in 2015. The company designs, manufactures, and sells premium shaving products — all to great success.
Until April 2021. That’s when Apple launched iOS 14.5, which tracked the actions of iPhone users only if they agree. It upended Facebook’s ability to hyper-target ads. The result is Facebook’s cheap but profitable ads are now less cheap and not so profitable.
Coddou’s company relied on sales from Facebook ads. He told me, “Supply.co had a really tough summer. For the first time ever we recorded two monthly losses.”
But he has retrenched. He fired his marketing agency, adjusted personnel, and moved forward on two long-planned product releases.
He and I discussed it all in our recent conversation. The full audio version is embedded below. The transcript that follows is edited for clarity and length.
Eric Bandholz: What’s going on with Facebook?
Patrick Coddou: This topic is no surprise to anybody in ecommerce. The short of it is that my company, Supply.co, had a really tough summer. For the first time ever we recorded two monthly losses. We’ve always been profitable, except for the very early days. We recorded some pretty decent losses this summer. Those were some painful months, and they were 100% directly attributed to the iOS 14.5 updates. We started to see changes in our advertising performance quickly after that update, as early as early May. We had lower revenue months over the summer and much lower and negative profit.
Bandholz: We’re feeling the same pain at Beardbrand. iOS 14.5 made it hard for Facebook to track people and thus target ads. What was your response? What’s your plan?
Coddou: We saw those rough months coming. We shifted into an immediate problem-solving mode. It was clear to me that our agency at the time didn’t have a plan. They spent like drunken sailors on really poor advertising. They wasted a ton of money.
So I cut off that agency relationship. I moved everything in house. I hired an internal head of marketing. I reassigned one of my guys to be our new head of creative. I hired a new full-time developer. I hired a full-time copywriter. I’m currently on the look for a part-time senior media buyer as well. And then I upped our videographer budget.
I took this huge chunk of money I was giving agencies and, for the first time with our company, took ownership of our marketing channels. I’m not saying it was a silver bullet. But that was my initial response.
Bandholz: Are the new employees remote or local?
Coddou: A little of both. Most of them are in the Dallas-Ft.Worth area. Most of my full-time team is there. My developer is in Africa. I have other teammates around the world, but the new guys are in the U.S.
I took a very different approach this time in terms of finding the new staff. I’ve hired so many expensive people in the history of my company. I hired a very expensive, full-time head of marketing last year. I’ve retained fancy, costly agencies. None of them worked out.
So this time around, I hired green people, those without a lot of experience. I over-leveraged on hunger and chip-on-the-shoulder mentality. I wanted people eager to prove themselves and a desire to learn. Those are the kind of people I hired. I found most of them through Twitter, incidentally.
Bandholz: How do you distinguish between someone who’s hungry and driven versus annoying and overbearing?
Coddou: I’m no hiring expert. It’s very subjective. I look for raw honesty coupled with motivation.
Here’s an example. One of the new hires didn’t have a great resume. He couldn’t keep a job for more than a few months. I asked him, “Based on your resume, I don’t think you’re hire-able. Why I should hire you.”
His answer combined honesty and hunger. He admitted why his previous positions had been failures. He told me what he learned from them and how he wanted to prove himself despite those failures.
Otherwise, there’s not one thing that I always do. However, I use a book called “Who: The A Method for Hiring.” I pretty much follow it word for word. It’s always worked for me. You ask direct questions, and you get surprisingly good answers.
Bandholz: You’re hiring green people. Who trains them?
Coddou: I’m doing a bit of training and mentoring. I’ve set one of the hires up with some forums. I’m hiring a seasoned person to help him. I’m honest with my hires. I tell them that there’s not a lot of structure at my company. There’s not a lot of, “Here’s your job. Go do it.” It’s more like, “This is what we need. Go figure it out.”
For the most part, it’s worked well. But for media buying lately, nobody knows what they’re doing. So how can I expect a green media buyer to know?
Bandholz: Nobody knows what to do with Facebook ads now.
Coddou: Nobody. So we might as well make it up and start from scratch.
Bandholz: Do you have a primary KPI for your ads?
Coddou: I have two: total revenue and the marketing efficiency ratio, or MER, which is the percent of revenue spent on advertising. From there, it gets convoluted because our return on ad spend on Facebook doesn’t currently make any sense. We used to hit a 2 to 3-times return on ad spend easily. Now we’re lucky to hit a 1. So the challenge with media buying now is we don’t know what’s working.
It feels like we’re moving around in this dark room, hoping to shed light on what to do. We’re using Wicked Reports, which is a first-party pixel. It’s helped us know what works, but it’s not perfect.
What is a better KPI than MER? I haven’t come up with a good answer.
Bandholz: Let’s switch gears. You’ve just launched a Kickstarter campaign.
Coddou: Right. This is our fourth Kickstarter. We’ve raised close to $500,000 over the past six years. We started our company on Kickstarter in August 2015. We love Kickstarter.
We went back to Kickstarter because we’re in the middle of an ambitious launch of two new products. I’ve spent hundreds of thousands of dollars in research and development as well as tooling costs.
I need to place purchase orders to have these products manufactured. But I don’t have half a million dollars sitting around to do it. So we turned to Kickstarter to raise the money. Plus it’s a lot of fun. It’s an event.
And then there are other benefits. I’m acquiring new customers through Kickstarter at a much lower return on ad spend than other channels. I’m buying Facebook ads to drive ad traffic to the page.
Kickstarter is a fantastic platform to launch a new product on. Not every product will work, however. We had a campaign that was a dud a couple of years ago for our Dopp Kit, a shaving bag.
Bandholz: This is a big year for Supply.co. You’re launching two new razors and bringing marketing in-house. What will 2022 look like?
Coddou: Let me talk about the future in the context of our product launch. Our current razor, the one on our website, is $75. It’s not cheap by any measure. But it’s a bargain because it lasts forever. It has a lifetime warranty. It’s made from steel.
And blade replacements are cheap. So you’re saving money in the long term. But it’s a lot of money to pay for a razor. The reason is that it’s very high-quality and it costs a lot to produce.
So I’ve always wanted to offer a lower-priced version. I’ve also wanted one that’s easy to use. Safety razors are not always safe, and they’re not always easy to use.
One of our new products is called the SE, the Sensitive Edition. It’s super easy to use, with a 30% lower price. And so I view that product as my Amazon and Target product, my mass-market product. It’s still not cheap at $49. But it’s more affordable for a quality safety razor.
So we’ll have that product. And then, for my most seasoned customers, my shaving fanatics, we’ve introduced a new complex-engineered razor. That will be our higher-priced product.
So we’ll have a two-phase pricing strategy.
Bandholz: Are you killing the old razor?
Coddou: Yes, once it’s out of stock, we’re going to kill it. It doesn’t offer anything different from the other two.
So what’s the future for us? Next year, 2022, will be about this lower-priced version, getting it on Amazon and, hopefully, Target. There’s a lot of work to do. But getting that product in the hands of many people is my strategy.
The mission for me from day one has been to evangelize single-blade shaving worldwide. We call it the single-blade revolution.
Bandholz: How can listeners reach you, buy your products, follow your Kickstarter?
Coddou: Our website is Supply.co. I’m usually on Twitter, @soundslikecanoe. Our Kickstarter page is “The Single Edge SE & Pro.”
via https://www.aiupnow.com
Eric Bandholz, Khareem Sudlow
