Adam Torres and Caulen Foster discuss DTC growth.
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Show Notes:
What are 3 things brands should be focused on when it comes to DTC growth? In this episode, Adam Torres and Caulen Foster, Co Founder & CEO at BrainPower, explore Caulen’s top three list brands should focus on for growth.
About BrainPower
BrainPower inc. is a rapidly growing, full service digital marketing agency that specializes in multi-channel brand expansion from Amazon onto Shopify. They help Amazon brand owners leverage the power of paid media, email, direct response copywriting, conversion rate optimization, and digital infrastructure to create an effective omni-channel marketing strategy.
Full Unedited Transcript
Hey, I’d like to welcome you to another episode of Mission Matters. My name is Adam Torres, and if you’d like to apply to be a guest in the show, just head on over to missionmatters. com and click on be our guest to apply. All right. So today’s guest is Colin Foster and he’s co founder and CEO over at BrainPower.
Colin, welcome to the show. Thanks so much. Appreciate you having me. All right, Colin. So talking about skyrocketing direct to consumer growth. So lots of business owners, a lot of entrepreneurs, a lot of executives that listen to this show and this is a hot topic. So I guess just to get us kicked off, when did you get obsessed with direct to consumer growth?
How’d that take place for you? Well, it’s actually, it’s actually kind of a funny story. So kind of a random story too. So back in 2014, actually invented the almond protein industry. I basically found a way to take the fat out of almonds called defatting. I did it using the same process. They do it with like powdered peanut butter.
And I created the first almond protein powder. And this was during the time. Yeah, yeah, yeah. What year is this? What year is this? 20, 2014, right at the beginning of 2014. Yeah, so like I launched it and yeah, it was crazy. It was, you know, it was right at the time of like the vegan I just bought almond milk for the first time, Colin.
I’m not joking. Last week. Really? I’m just throwing that out there. I like getting coffee sometimes. I know you were at a coffee shop earlier, but I like getting, and I was just like, Let me, let me try it with cereal. Go ahead. This is totally nothing to do with the interview. Sorry. Celebrity in my presence.
Good job for that, for that invention. Go ahead, please. I appreciate it. Well, you know, what’s funny is I caught it right when almond milk really started to gain, like, started to really gain some traction and then it was also the plant based movement had really gained a lot of traction going into 2014, 2015.
So I got really lucky and I hit a good wave. You know, the funny thing that I always like to tell people is I built it up and then sank it, right? You know? I was hoping you didn’t say that part of it. Yeah, yeah, yeah. We’re entrepreneurs. This is a real show. So yeah, listen, I told you, go ahead. Yeah. Yeah.
Well, you know, the thing is, it’s kind of funny because I have so many, like. I have so many insanely good nuggets from the painful part because like I was really early So like 2016 facebook was killing it. You know, we were we were really you know, like we were very spoiled And I didn’t really understand a lot of the things I understand now, which is like, we were all going to always be that way.
We thought it was going to be that cheap. That would work. So, Oh my gosh, go ahead. It was, it was, it was cool on that one. Yeah. Yeah. Yeah. I know. And that’s the thing. It’s like, I didn’t, I didn’t understand the things that I know now that helped me to become a really great agency owner. Or, you know, have a team that really like grows brands.
Yeah, holistically, we don’t really focus on, I mean, we do media buying and ad spend of course for all of our clients, it’s needed for traffic. But it’s not, it, it, it accounts for about 25, literally, actually 25% of what we do. There’s, you know, remaining 75% is dispersed across the entire.
D to C ecosystem across individual ecosystems compartmentalized in there. So I learned all of those things by going through the problems as they happen, you know, understanding unit economics and the financial ecosystem, understanding like what’s your cost of goods was having implications that have on, on your contribution margin.
Like where, where does all that stuff work? You know, and when my cost of goods was skyrocketing and my profitability was tanking and it wasn’t something that Facebook could fix, that’s when I learned, Oh crap, I actually have to really pay attention to my cogs. I have to pay attention to my margin. I can’t, I have to launch new skis that are, you know, more profitable and create, you know, better, better incentives for retention.
So I learned all of those things because as I, I couldn’t ride the wave anymore, the wave kind of fizzled out and I’m like, well, crap, what do I do? And I wasn’t prepared for it. And then things started working, but I wasn’t experienced enough on how to like really Make them efficient. So it just eventually fizzled out, but you know, at the time it was super painful.
I have some really like hilariously funny stories now, but when I was going through them, they were like ungodly painful, the amount of pressure I had to, it was, it was a lot, it was a lot to bear, but. Anyway, so I got, I got, that’s how I got involved in the space. I didn’t start off in e commerce.
I, I was trying to do retail. I ended up getting put in touch with a consultant who basically said like, Hey, I’ve got an agency. I can teach you how to do it. Sat me down for 15 minutes, told me, you know, started explaining direct response advertising and all this good stuff. And I’m like, This is what I’m going to do for the rest of my life.
This is it. This is what I’ve been waiting for. This is what I’ve been looking for. And I just went full throttle into, you know, spending money in consulting. And then I even, he had an agency and I was like, Hey, I’ll tell you what, I’ll still keep paying you for consulting, but I’m even going to do intern work for you for free, because I want to get in the back of these accounts.
So he was gracious enough to let me do that. And he’s still one of my best friends to this day. And and yeah, so that’s how I got into it. And then eventually that just. After Almondpro was the name of the company, after that kind of fizzled out, I was, I was doing some consulting and then fell into the agency room just by, by luck, you know?
Now, are you now from what I can see, it’s mostly CPG, or do you also do on, the service side at all? I mean, let’s just start kind of broad, just to start. Yeah. predominantly it’s consumer goods, right? We’re vertically agnostic, so it’s not like we focus on any specific vertical, you know, we’ve got electronics, we’ve got directly consumer meat products, we’ve got you know toys, we’re literally, we’re across the entire game.
What do you, what do you, what do you favor? And I’m not, there’s obviously not a right or wrong here, I just always like to get into somebody’s psychology on this, because I feel like there’s service guys, there’s CPG guys. What do you favor about the, CPG side of things? a big direct response marketing nerd.
So I really love strong unique selling propositions. I’m not big, you know, in the service game, you’re looking, you know, if we’re discussing like B2B, it’s lead gen, you’re doing lead nurturing, you know, it’s a different style of sale. I like the, I like the ability to leverage human psychology, offer development, digital infrastructure, the artistic side of it, creating landing pages to make people want to buy things.
Like, that to me is just the most fascinating thing in the world. And if you’re a bit of an artist, but you can’t paint, I always say, if you can’t paint, you can make a landing page. Right? You might, I’m a terrible artist when it comes to painting, but when it comes to landing pages, whenever I bring like my creative juices to our team, you know, landing pages, they, they always come out.
I’m not. I’m not. You know, I’m not trying to elevate myself too much. It’s just like, I’m good at it. No, it’s alright, man. I love it. I’ve never heard that, by the way. And I agree, like, wholeheartedly. If you can’t paint, you can do a landing page. It’s still R& D. I’m in. I love that. And they come out great. And then you have a great designer.
They can take your idea and turn it into, you know, something that looks even better. So, so that’s what I really like about it. I like the creative nature of it across the copywriting Digital design, the, the whole, and then, then just how traffic mobile, you know, traffic mobilizes and monetizes. It just, it just really fascinates me.
It always has. And that, that was what hooked me and I was like, this is what I wanna do. And that was exactly why. I, I, I, that’s, that’s my preference. But I do, we, you know, we’re a service business, so I do some outbound marketing too with like, you know, lead gen and, and doing and booking, you know. lead gen to book a call and, you know, so what’s, what’s interesting to me about your background is because you’ve, especially since you’ve been doing this so long, like, especially with you know, since the early days of Facebook and all that, which for those that don’t know those, Dave doesn’t matter to recap now, but for those that do you, get it.
So that being said, your answer to this next question, I think is, provide a unique perspective, cause you’ve seen so much evolution, like what should DTC, like what should brands that are concerned with trying to grow in general? Like what should they be thinking about right now when it comes to direct to consumer?
Well, number one, I think one thing that Kind of left behind a lot is really understanding unit economics. You know, understanding your cost of goods relative to the products you’re selling, you know, we always say that it’s not what you want to sell. It’s what people want to buy. So it’s like.
You really want to understand what it is that your, that your customer really wants, what are they buying and is that a profitable product for you to really be selling because just because you want to sell it and just because you want to make it profitable, if it isn’t profitable, just because you wish it’s profitable, it doesn’t mean it’s profitable, right?
So you actually have to sell a profitable product that can actually do your business, you know allow your, you know, your contribution margin to be where it needs to be for you to actually have the money needed. To, you know, grow this it’s a cash intensive endeavor.
Whenever you pursue DTC, cause you’re, you know, unless you have. Unless you have organic traffic or you’re an influencer or something, you’re probably paying top dollar for traffic right now. So I think that understanding the product. And shipping too, depending on, yeah, you’re paying top for everything.
And so I just throw that in there as just a little nuance because it’s never what you think it’s going to be on the back end. Yep. Yep. Yeah. Yeah. No, you’re, you’re right. No. And, and, and the cost is only going up. Right. And not like at any point they’re going to be like, Oh, by the way, we’re going to lower this for you.
Nope. Yeah, what the way the way for me to bet. And another thing I was gonna say is the way for you to best answer that what we do from an agency perspective is we build and manage ecosystems, right? And we do that in different styles. But but there’s five. And that’s really the thing that people should be focused on.
There’s basically five ecosystems in your business. First one that I just talked about is your financial ecosystem. Like What do the finances of your business actually look like? If you’re not merging your marketing with your finance, if those two are not in compliance with one another, You are setting yourself up to look at vanity metrics and get sorely let down when you look at your female At the end of the month, right?
So you really need to understand your bank account and what’s actually there. Like, yeah, you made You made a hundred you made a hundred grand and you lost ten, you know, it doesn’t make it doesn’t make sense That hurt and I see her and I yeah, and i’ve seen brands bigger than that that are you know doing You know, in the seven figure months and they’re just barely making it.
So it doesn’t really matter. You gotta, you gotta, you gotta move from the vanity metrics, you know, the way in the e commerce world we get, we get, you know, We romanticize the vanity metrics sometimes. So we got to step away from that and really step into reality of what does the P& L look like and what implications do we have based on what we’re selling, what our consumers are buying, and what does that look like for the future of our brand if we continue to sell these products.
They might be your hero, it might be your hero skew, but it’s not your hero skew when it comes to profitability and growing your business. That, that can be a major problem. You’re setting yourself up for failure. So unit economic financial, financial ecosystem, the acquisition ecosystem. There’s, there’s four other ones.
Acquisition. Retention, traffic, and profit maximizer. Acquisition is exactly what it sounds like. What are you doing to acquire customers? How does your offer sequencing look? Do you have from a direct response offer if you’re, if you’re leveraging paid social? Right. If you’re doing paid social advertising, you need to have a price point, an offer, and a product that is conducive to a demand creation model.
You need, you need something that is going to give customers a reason to want to buy right now. Right. And so you need to have, you know, digital infrastructure that supports that nice landers, nice landing pages, a good welcome series, a good pop up that’s converting. Well, I always recommend using gamification.
So like doing a spinning wheel, those kill it for us. Some brands don’t like it because they think it looks cheesy, but. The money that comes out of them, it does not look cheesy. So so, so I would say, you know, that’s the acquisition ecosystem focusing on, on an actual strategic approach to acquiring customers.
Doesn’t mean just discount stacking value, free premiums are a nugget. I learned from a guy named Perry Belcher. Free premiums are, you know, free gifts with purchase are gold for increasing conversion rate and obviously increasing reducing acquisition costs. So you have your acquisition ecosystem and you have your retention that goes into your emails, right?
But that doesn’t just mean like blasting the list, right? It means getting engaged, doing giveaways, doing co branded giveaways, doing new product launches. Loyalty is obviously goes without saying once you get your list big enough, but you know, build, building that, that infrastructure on the backend where people are actually engaging with the brand longterm.
New products again is a very important component of that. Then you have your traffic ecosystem, which again, we don’t have to get into paid ads, but basically making sure you’re going through best practices on traffic. Dialing in, you know, you know, advertising, so good creative UGC, true, what I would call true GC.
Most UGC is just fake testimonials, right? Now we’re trying to do what we call at our agency. We only do with true GC that we leverage through using micro influencers because they’re usually more inclined to already be posting consistently like Our criteria for selecting people for UGC is they have to post at least once every other day They’re not posting since once every other day We won’t work with them because they’re not psychologically there In terms of like best practices knowing what they need to do in order to create content that helps their own individual platform grow Therefore we don’t want to just trade their likeness for a fake review It just doesn’t resonate in this day and age Maybe five years ago when I started doing UGC with all in pro it was working But it’s, it doesn’t work like that anymore.
So you’ve got finance, you’ve got your acquisition, you’ve got your retention, you’ve got your traffic and then your profit maximizer. What is your, what is your pre and post purchase upsell sequencing look like, right? What is when, when people add products, are they getting a pre purchase upsell? What are they getting a post purchase upsell?
What are you doing when you’re creating offers? To make sure that you’re maximizing not only your AOV, we always get caught up on AOV, and that’s where you merge the financial system, but like AOV relevant to profitability. Your AOV could be higher, but your profitability still be lower.
You know, what products can you sell that are the most profitable? And, and maybe they have a lower barrier to entry. Maybe you have a product that’s cheaper but the profitability on it is really, really great. Now your AOV doesn’t look as great, but your profitability does. So understanding what you’re, you know, how are you maximizing.
Profitability. That’s what the profit maximizer ecosystem is named. And that’s exactly what it does. It maximizes profitability. It doesn’t maximize just AOV. That’s a really big thing to distinguish. And it always goes back again to finance. So those are your five acquisition, retention, profit, maximizer, traffic, and retention.
Yeah, where do you find so talk a little bit about about your your when you’re going through this process and I know every business is going to be a little different and out of those five different ecosystems, some are going to be weaker or stronger on others and their processes and however they built their company.
But how are you normally approaching this? And how should people listening approach? Kind of like, cause I know it’s probably correct me if I’m wrong. Unlikely people are going to tackle all five at once. If they’re looking at improving, like, like how does this audit system or how should people start wrapping their head around this concept, especially because it’s, in my opinion, it’s new going to be new for many, the way that you packaged it.
Yeah, great question. So I always compartmentalize success. So, and that’s just, I compartmentalize everything, but that’s another show. That’s another one. I’m not going to give this almond milk now.
if I’m a small brand or, you know, I don’t like to say small, but let’s say you’re starting out, your first responsibility is finding predictable customer acquisition. It doesn’t matter how you get it. If it’s paid traffic, if it’s posting on Tik TOK, if it’s posting on YouTube, I don’t know what it is.
Your, your primary goal is to tackle your acquisition ecosystem. And it doesn’t mean that you have to start building all these crazy, complex landing pages. You know, have a tendency to speak in like. I guess like brands that have already kind of achieved some level of product market fit.
Most of our clients have product market fit. They’re looking to increase efficiency on that, right? They’re trying to make the most out of the traffic. They’re already driving, not necessarily just drive more. So if you’re early, your single most important job as a brand owner is to dial in the predictable customer acquisition.
Now, if you’ve got a pretty standard or a pretty, I guess, scalable and More defined approach to customer acquisition, meaning you’re getting customers consistently. You’re not having to worry about where your next sale is going to come from. Now your next responsibility is retention. How are you going to keep them coming back?
How are you going to keep them coming up? If you spend a non consumable, if you, if you sell a non consumable, What new products are you going to launch? What horizontal skews are you going to be able to get people to buy? That’s going to make them want to you know, continue to support the brand, obviously some brand messaging in there.
So now if you, if you’ve got pretty cool customer acquisition, now you need to focus on retention, right? that’s your next order of business. And if you’re in a position where you have retention, Now you need to make sure that you’re making the most.
And, and, and, you know, this, this is subject for debate. I think my business partner would probably debate me a little bit on this. But you would probably say that, that the profit maximizer would come in after. Acquisition, because you want to make sure that after you’ve got acquisition, now you can take those, that existing acquisition and just increase the profitability on maximizer ecosystem, and then probably go into retention.
So I, like, first thing would be is figure out, can you get a predictable customer acquisition. Can you then find ways to retain those customers and also simultaneously make more money with them? And obviously, if you’re doing paid traffic, there’s implications there that you have predictable customer acquisition, assuming you’re not losing money.
And then, financial ecosystem, if you’re, if you’re starting out and you haven’t launched an ad yet, really take a look in your unit economics. Really take a look at your business and the product that you’re intending to sell. If you’ve got 30 percent margins on a product that is a non consumable, You are basically setting yourself up for failure, right?
Like you don’t need, there’s just no way for you to be able to sustain the cost of traffic on a single purchase product with such low margins. And again, if that’s what you want to sell, you want to buy at the price they want to buy it at. So at that point. You know, got to be really cautious about starting from scratch before you do want to pay it out and make sure that you’re actually set up with success.
So the financial is ongoing, but from a beginner standpoint, and that’s where the direction I’m going with this is like from start to finish. If you want to find a way to apply the financial ecosystem to these things. Then what you have to do is you have to make sure that very first and foremost before you start going to market You have the right product with the right margins for you to be at least have a good chance with success Because we can never guarantee success right in this game For sure.
So final question colin. Let’s call this the bonus round, which we don’t really have one here, but i’ll call it that. Micro influencers you mentioned that working with them. what are some tips? Tips, tricks, takeaways, lot of people are curious that are listening to this, I’m going that route.
And I think it’s a great route. Not just because amazing brands out there, write me a check, but because I love it. It’s fun. I get to create new content as a content creator. I feel like, and I know we’ve built like solid relationships with some of our sponsors, like through the years. And you know, they, they even, they fly out for our conferences and this and that or whatever.
So I know from the creators. Side, like the benefits, but what are your tips for those out there that are trying to go down that route and, and, you know, court these micro influencers or work with them? What are the tips, tricks, and or takeaways? So when it comes to micro influencers, first thing I would do is I would work with somebody, number one, who’s posting on a regular basis.
This isn’t somebody who is like, you know, just posting once every three weeks, four weeks. It has to be somebody who’s actively, psychologically. Trying to grow their brand. They’re trying to, they’re trying to grow their business or their, their, their platform. And you know, they’re going to maybe try and monetize that from a business.
Number two, follower count is really important. Typically. I don’t like to well, it’s not that I don’t like to it’s just I find it easier to work with micro influencers that are sub 10 000 followers. They’re they’re they’re probably not They’re they’re from a psychological perspective. They want to grow they’re doing the things best practices following the practices Keeping up with what the algorithm changes are.
They’re invested in growing their platform. They just haven’t gotten there yet. So they leverage your brand as we’re near the long term relationships to agree. Those are the long term relationships, especially if you think about somebody building a, product that you’re going to have for a long time and you don’t see yourself exiting really quickly and you’re like, what’s the value of this and you know, X amount of years, those are those relationships down the line to me are super, it’s invaluable.
It really is. Go ahead. I just want to throw that in. Nope. You’re a hundred percent right. And I’m with you. Is that you’re working with somebody who you’re going to actually legitimize now because now your brand it shows hey Oh, look, so and so’s working with a win win, right? It’s a win win. So I like to work with my influencers That’s where we found the best level of success because again, we got to understand why we’re using this and you have to that’s another Thing that’s really important about all this sub 10k They’re posting consistently and I think the third metric just to give this as easily digestible Understand why you’re working with this person.
What I mean by that is are there’s three ways you can use an influencer or a content creator. One is for their content, two is for their traffic. Three is for both. So if I’m hiring, let’s say Kim Kardashian, I’m not just hiring her for content, I’m hiring her for her likeness and probably the 140 some odd million followers that she has.
So she can drive traffic. So she’s an additional traffic. That’s it. That’s it. Definitely a micro influencer. Go ahead. No, that’s your major influencer, that’s my that’s my i’m going that person for content and traffic and likeness But if i’m working with a micro influencer, i’m probably not trying to if I can get their traffic great But i’m not really concerned about their traffic.
I’m probably concerned with getting content from them so I can leverage it on paid advertising Email, wherever I’m going to be using those applications. So true. The value of the content they’re creating. So true. Exactly. I’m using the content to scale paid. I’m using the content to disperse across maybe my more organic social channels.
If I’m hiring an influencer that’s, you know, 100, 000 followers plus, I’m not only paying them for the content, I’m also paying them to get a piece of their traffic. They become an additional traffic source for me. If you’re starting out early, Or let’s say you have page, social running, and you haven’t really gotten deep on that yet, like you’re just starting, maybe you’re, you know, spending 10, 15k a month.
Then, you’re still very early on. From there, you don’t really need an additional traffic source, right? You need to keep going deeper, but you do need content to fuel that traffic source. I mean, you’re not investing in traffic, you’re investing in content.
So, that’s the third metric. So, how much are they posting? What is her follower count to make sure they’re not too bougie, right? And then number three is how am I going to use this influence or how am I going to use this content creator? Those are the three metrics that I would say that you want to focus on when selecting someone.
Man, Colin, you guys are sharp. I love it. Everything that you said is spot on and I get it. I’ve lived on both sides of it. I get it. And you’re accurate. I love it. That being said, we run out of time today. Brain power, the name of your company. I know we just scratched the surface on all of this.
People are going to want to follow up and also to connect. How do they do that? So the best way to get in touch with me is, well, I’m very active on LinkedIn. If you look my name up, I’m probably the only person that’s called my name the way it is. It’s C A U. L E N and my last name is Foster, so call on Foster on LinkedIn, connect with me.
the best place if you want to visit our website, it’s brainpower. agency. If you want to talk to me about that, the call to action will eventually get rerouted to me. So once you book a, you know, if you want to, you know, schedule a call or something, you do it there. But the best way to engage is on LinkedIn.
I’m very active on LinkedIn. Hmm, wonderful. And LinkedIn and then website, one more time, please. Brainpower. agency. Hmm. Hmm. Wonderful. Brainpower. agency. And we’ll put those links, by the way, in the show notes for the audience. Everybody that’s listening, those links will be in the show notes when this comes out.
And speaking of the audience, if this is your first time with us, this is a daily show. Each and every day we’re bringing you new guests, new founders, new ideas, new insights. Hit that subscribe button if you haven’t yet, because we’ve got many more interviews coming up for you down the line. Again, this is a daily show.
Don’t want you to miss anything. Collin, this has been so much fun. Thanks again for coming on the show. Thanks, Adam. Appreciate you.
