Building a Resilient D2C Brand Through Channel Diversification – Episode 47: 7-Figures & Beyond Podcast

Episode Summary

In this episode of the 7 Figures and Beyond eCommerce Growth Podcast, Greg Shuey interviews Neal Goyal with Disco, a post-purchase ad network. They discuss the importance of diversifying customer acquisition channels to avoid over-reliance on a single platform, a mistake that has become especially evident since iOS 14’s impact on Facebook ads. Neal shares insights on the need to prioritize long-term customer relationships and build brand community rather than relying on quick-win advertising. He also highlights the value of understanding customer lifetime value (LTV) and the benefits of cultivating owned channels like email and SMS to sustain profitability. The conversation emphasizes a forward-looking strategy that balances existing high-performing channels with prudent exploration of new, relevant ones.

Video Replay

Key Takeaways

  1. Channel Diversification is Critical: Brands relying solely on one channel, like Meta or TikTok, are at high risk if there’s a major algorithm or policy shift. Diversifying acquisition channels can provide stability and resilience.
  2. Prioritize Customer Lifetime Value (LTV): Rather than focusing solely on conversions, brands should seek customers who contribute long-term value. Disco’s post-purchase ad model helps brands target high-intent buyers likely to boost LTV.
  3. Community and Brand-Building are Essential: Returning to brand fundamentals like community building and personalized customer experience can strengthen customer loyalty and profitability.
  4. Data-Driven Channel Expansion: Analyzing current customer data, including purchase behaviors and feedback, can help brands make informed decisions on which new channels to explore, especially when resources are limited.
  5. Operate with Prudence During Good Times: Brands should save and reinvest in diversification while their primary channel is performing well, rather than waiting for a downturn to begin exploring alternatives.

Episode Links

Greg Shuey LinkedIn: https://www.linkedin.com/in/greg-shuey/

Neal Goyal LinkedIn: https://www.linkedin.com/in/nealgoyal/

Disco: https://www.disconetwork.com/

Tapcart: https://www.tapcart.com/

Episode Transcript

Greg Shuey (00:01.014)
Hey everyone, welcome to the Seven Figures and Beyond eCommerce Growth Podcast. I hope that everyone is having a fantastic day. I know I am here in Utah, it’s snowing. We’re three weeks away from the ski resorts opening, so we’re pretty pumped about that. And I’m sure it’s nice and sunny in San Diego. Or is it overcast?

Neal (00:20.695)
No, it’s pretty sunny. It’s pretty sunny. mean, it’s unusual, but it’s sunny.

Greg Shuey (00:27.266)
I love it. Well, today I’m stoked for our discussion and for our guests. So if you’ve been in e-commerce for a minute, you probably recognize him. Our guest is Neil Goyle. And up until this month, Neil was with a company called Tapcart. You’ve probably heard of them. There’s a good chance your website is running a mobile app powered by them. And that’s what they did. So he is now with a company called Disco. They are a post purchase ad network. We’ll let him.

talk a little bit about that in just a minute. what are we talking about today? Well, we’re not talking about mobile apps, although when I first reached out to him, I wanted to talk about that, but we are going to be talking about the diversification of customer acquisition channels, which is incredibly important because there are so many different ways to acquire new customers. Some are better than others, especially depending on your brand, your industry. And in my personal belief,

it’s important to have at least two channels going at the same time that work well for your particular brand. And so we’re going to talk all about that today. Neil, thank you so much for being with us.

Neal (01:36.043)
Hey, Greg, I’m so excited to be here. think there’s a long time coming. I’ve been following your journey for a long time. Hats off to all of your success. And so I’m so glad we’re doing this.

Greg Shuey (01:45.558)
Yeah, well, thank you so much. Before we jump in, would you just take a couple of minutes to talk about your history, your story, help our listeners understand where you’re coming from and how you’ve gotten to where you are today.

Neal (01:59.629)
Yeah. mean, when we think about just the last several years, I’ve spent my entire career doing two things for brands, right? Helping them diversify their sales and marketing channels and reduce customer acquisition costs, right? Like my entire career has been devoted to that. And most people are familiar with my journey at Tapcart. I spent the last three and a half years there and really believed strongly in the channel. Felt like I was, I guess,

almost evangelizing the channel myself by virtue of what I was doing on social. Yeah, I was, I preached like all things mobile commerce. and, that, worked that, I mean, there was a huge move that came from that. had a lot of success at Tapcart, the merchants I was able to serve had a ton of success at Tapcart too. And so I think one of the things that,

Greg Shuey (02:30.881)
Yeah.

You were the evangelist.

Neal (02:56.295)
where I, what I loved doing the most over the last several years is understanding what the world of the merchant is, what are the problems that they’re facing? What are the challenges that they’re navigating? And I was just wanting to learn. And that was actually a lot of large part of my journey on LinkedIn as well. Just the goal to get a little bit closer to the merchant, understand what makes them tick and what resonates with them. And

In that journey, I found that the only thing that mattered to them really was just this glooming situation of customer acquisition costs going higher every single year without fail. When I was departing TapCard, it was actually a pretty tough thing because I’d spent three and a half years marrying my own identity to the world of mobile commerce.

And so to make the call to join Disco, there had to have been something very just magnetizing about what Disco is doing in order to say, I’m willing to almost separate my identity from preaching all things mobile commerce to going into a different direction, which was more of a top of funnel type of solution. And I was just so excited about it. So, you know, look forward to chatting a little bit more about that.

today on the show. I’m excited about the big things to come, but I spend my entire career serving brands and I’m looking forward to doing that in a bigger way as well.

Greg Shuey (04:27.574)
That’s amazing. Give me a little plug about disco.

Neal (04:30.645)
Yeah. So Disco is the largest post purchase ad network on Shopify. So if you think about, you know, brands trying to acquire customers and retain customers, those are, those are the two major conundrums that they’re trying to build. That’s right. Those are the two things that make a brand move, tick, grow. And, what got me so excited about Disco is that we’re serving actually both ends of that, right? It most by being a post purchase ad network.

Greg Shuey (04:42.396)
That’s what you work on. Yep.

Neal (04:59.809)
We’re an acquisition channel where you can serve, have your brand served up on the post purchase checkouts of a thousand other brands of the network. Right. So think of it going through a grocery store. You’re going through, you put a number of items in your cart, you go to the checkout and you see the chewing gum, the candy, the magazines. And it’s at that moment where you’re at your highest intent. You just haven’t added things to the cart. You actually have your wallet out at that moment. Right. So think of that in a digital sense. Right. And now you can have.

Greg Shuey (05:25.142)
Yep.

Neal (05:29.877)
A number of millions of customers across these thousand brands also serve, see your brand or products at the moment that their intent is the highest. Right? So that’s what gets me so excited about it. The flip side of that is it’s not just about any conversions. And you know, you’ll see me, I’ve been preaching, you know, diversified from meta for years now. Right. and

What gets me so excited about this one is it’s not just about any conversion. It’s about the right kinds of customers, right? Because first purchase profitability is just that biggest challenge right now, right? With rising CAC becoming profitable on that first purchase is near impossible. Your AOVs have to be so much higher than just, you know, two, three years ago. And here at Disco, we have live.

Greg Shuey (06:01.58)
Yeah.

Neal (06:19.871)
order data and customer profiles of the thousand other brands, all orders that are happening across 1000 brands on Shopify. And so we know what one particular customer with Greg were to shop on one brand. We already know what his spending was with the 14 other brands that he has shopped with in the network. And therefore we learn a lot about Greg and therefore we make recommendations when he checks out one of those brands.

Greg Shuey (06:40.024)
And got it.

Neal (06:47.863)
two or three other brands, they may be a great fit for them, right? So not only are we driving conversions as a sales channel, we’re driving the right kinds of customers, the customers that are most likely to be high LTV in that process.

Greg Shuey (06:50.924)
Yeah.

Greg Shuey (06:59.424)
and to come back and buy again and again and again. I like that.

Neal (07:04.029)
LTV all about LTV. It’s that only path to profitability. I think I’m a broken record on preaching that

Greg Shuey (07:10.69)
Yep, I love it. Cool. So, you know, let’s jump in and start talking about channel diversification. When I think back, you know, I was thinking about this a couple hours ago. We started Stride 13 years ago and we started it because of the need to diversify traffic channels. So I’m an SEO guy.

I’ve been doing SEO since the early 2000s and I was working for an agency. I was there for about five years and all we did with us was SEO. And we had some really big clients that were putting in 20, 30, $40,000 a month in SEO and that was their channel. And I got to the end of my time there and I’m like, no, we can’t just do SEO anymore, right? We’ve got to start layering in PPC. We’ve got to start figuring out the, you know, the Facebook ad side of things. We’ve got to figure out email and

the agency wasn’t willing to pivot and shift like that. And so I left to start an agency that was more diversified, that was more full funnel, that was more holistic in nature. And I think that brands that pigeonhole themselves into one channel are really doing themselves a disservice. So when you think about

know, diversification. Where does your mind immediately go?

Neal (08:39.661)
Yeah. My, my mind immediately goes to understanding a pre 2021 world versus present day, anything after 2021. think, you know, when we, when someone, let’s call it 2015, 16, when someone started a brand, yes, Shopify had just, you know, hit the scene at that point, made it a lot easier to open up a brand overnight. But the,

There was still an emphasis on like brand building because you still had to do a lot of things to actually get the word out there about your brand to drive that traffic to the site. Read ads hits a scene. It’s new. It’s experimental. Take this, you know, dollar bill, fold it up into a paper airplane. It comes back as $10. Right. So it just became super easy. Facebook, you know, hats off to Facebook for, making it super easy and digestible for people to understand. as soon as.

COVID hit, right? We saw this huge up and to the right move in terms of the number of stores that are blowing up, but at the same time, you saw consumer behavior actually shift and permanently shift, right? So obviously we saw this massive bull run, right? That is no secret, but what happened in that bull run, as with any bull run in any type of market, whether it the bull run of 2005 and six in real estate, whether it was the bull run of the tech

tech era, you know, 99, 2000, right? Bull runs all have a very common theme. And that is at the tip of that bull run, we have people, actors that come into the market that are looking for like the quickest way to get rich. We’re looking for shortcuts. We’re looking at the fastest path to growing a business where it may be a divergence from fundamentals. And that’s what we saw in 2020, right?

Greg Shuey (10:22.21)
Yeah.

Neal (10:33.217)
We’re 2019 and 20 early 2020. saw this big boom, but then for most of the late 2020 and early 21, we saw this shortcuts, you know, my gosh, paid ads paid ads. So paid ads were cheap demand from consumers was high and meet for this absolute perfect storm. many entrants could come into the market. so it diversification actually took a complete backseat right before it had brand building.

It had to be like customer experience. had to be rolling out the red carpet for that customer. It had to be grassroots marketing. Remember that was a thing. and, and it had to be SEO, right? All, all these things that were, front and center, but you had to do all of them. Right. And then Facebook just made it easy. So easy that like everyone kind of abandoned all of those and put 95 % of their budget towards Facebook. And again,

Greg Shuey (11:07.862)
That was a thing.

Greg Shuey (11:12.182)
Yeah.

Neal (11:26.605)
no harm, no foul there, but there was a departure from fundamentals. We became so obsessed with direct response, click and conversion that we could have gave brand building that backseat. And so I think that’s where the lopsidedness away from diversification really took hold. And so then when iOS 14 happened, it literally caught everyone off guard.

When you think of algorithm changes, when you think of like impacts that are happening, that are really impacting performance in a negative way, that’s been happening with Google and SEO since the beginning of Google, right? It’s like you’re in the SEO game or it had been for since the beginning of the internet, basically, right? And, and, you know that, that it’s constantly changing and you’re always having to change strategy there. So algorithm changes is no secret to you, but

Greg Shuey (12:15.532)
Yeah.

Neal (12:19.597)
when someone’s so over reliant on the channel, then all of a sudden privacy changes hit, catches everyone off guard, business is over, my God, what’s happening? My conversions are dropping. It’s not as high quality intent. It really caught everyone off guard when it’s been happening on every other channel already. So that is the big kind of turning point where diversification became this thing. And then, guess what?

Greg Shuey (12:37.271)
Yeah.

Neal (12:47.297)
first nine months post iOS 14, things were really hard. And as soon as people started to get a grip, Algo changes again and changes again. And all of a sudden just guess what? They had to put in a little bit more work to rolling out the red carpet, getting the right kind of customer version of the funnel. It became more expensive to do so. And so I think that’s where this whole iOS 14 drove the tailwind for owned channels. Get customers into an owned channel.

Greg Shuey (13:05.046)
Yeah.

Neal (13:16.353)
So you have more control again, hence why email and Klaviyo took off. Hence why attentives and postscripts took off with SMS. Why the tap cards of the world took off with mobile apps and notifications. So I think now fast forward the clock, CAC is exponentially higher. Reversed navigation hasn’t happened with the velocity that it needs to. we’re kind of in this place where brands are

Greg Shuey (13:35.009)
Yep.

Neal (13:43.873)
I think we hit that bottom in 2024 in terms of profitability, impact on bottom line and the ability to navigate it.

Greg Shuey (13:50.135)
Yeah.

Greg Shuey (13:53.876)
It’s been a tough year for brands, a really tough year. Why do you think that brands keep making this same mistake over and over and over again about just doubling down on a channel? I like I’m talking to brands that are building their business on TikTok shop. Just like that one channel. What are we doing? Why do you think they do that?

Neal (14:20.365)
the, it’s kind of what Facebook taught us to do. Right? So like, even if it’s TikTok, for instance, we, what do we learn? We learned from Facebook on how to change our behavior as entrepreneurs, right? Because Facebook made it so easy. You ask any marketer right now, they still dream and fantasize about pre-IOS 14 days. They know it’s no longer a reality, but like, they still like fantasize.

Greg Shuey (14:23.659)
Yeah.

Greg Shuey (14:33.558)
Yeah.

Greg Shuey (14:42.751)
Right, yeah.

Neal (14:47.979)
Right? They still think about it like the go-go day. they’re always, it’s kind of like this gambler’s mentality, right? Where it’s like, my God, I hit it big that one time and you’ll always remember that one time. And now facing that, right? It’s kind of like this, it’s almost like a chase for, it’s like a dopamine hit, right? Combined with a desire to

Greg Shuey (15:02.114)
And then you keep chasing that, right?

Neal (15:16.813)
get rich quick and find the shortest path to success. So that’s for one. Number two, think it’s the concept of you look at most of the shock fight ecosystem, 90 % of the brands that were born during the era of 2019, 2020, most of those were individuals who never ran a business before.

Greg Shuey (15:20.151)
Yeah.

Greg Shuey (15:44.354)
Sure. Yep.

Neal (15:45.921)
They either quit their job or they got laid off or they decided to go hey, we’re working for home This is my opportunity to start for business. There’s a beautiful thing, right? It was like it was just a huge boom for entrepreneurship but what also comes with that is Everyone’s kind of learning on the fly, right and Learning on the fly. What what did they learn at that point when you it’s kind of like? Listen, you’re you’re a parent of three. I’m a parent of three what you teach

Greg Shuey (16:01.079)
Yeah.

Neal (16:13.909)
our child, what the child learns at in their infancy in those first few years, very much shaped their mindset and their philosophies and their thought process in future years. So for brands that were born during 2019, 2020, they were born with the mindset that Facebook is the only way to grow a business. And therefore they’re only born with the mentality that, listen, things can happen really quick. you catch things at the right time, at the right moment. And there’s always going to be that

Greg Shuey (16:19.106)
Yeah.

Greg Shuey (16:27.682)
Hmm.

Neal (16:42.957)
that chase, that’s what they were taught at that time. And so you see brands that most of the brands that were, that are blowing up and they’re saying, we’re only doing TikTok shops. They actually had a brand before that was started in 2019, 2020, right? That brand was born on Facebook, right? So it’s actually, it’s this behavior that’s not necessarily a bad thing. Yes, it needs to be corrected.

Greg Shuey (16:56.224)
Yep, that’s fascinating.

Greg Shuey (17:08.78)
Yeah.

Neal (17:08.813)
But it’s also just a function of like, everyone is kind of learning on the fly, right? That’s what entrepreneurship is. So you’re left, you’re looking right, what’s working, what’s not. Everyone sees Facebook ROAS right now, if you’re doing a one and a half ROAS, you’re like winning. You’re winning. So, so new entrance to the market. Don’t really look at that as attractive when, listen, even though we need to diversify from Facebook, doesn’t mean abandon Facebook, right?

Greg Shuey (17:22.006)
You’re crushing.

Greg Shuey (17:27.959)
Yeah.

Greg Shuey (17:33.366)
Yeah. Yep. So a lot of our listeners are like sub million dollar brands. Like they’re not huge. And so as they kind of navigate this, chances are they’ve probably leaned pretty heavily on a single channel. How do you, when you, when you talk to brands like this, how do you kind of guide them and coach them to figure out what’s the next thing they need to bolt on?

Neal (18:03.341)
So I think one of the hardest things for brands that are getting started is looking at all the other brands that have made it, right? And the overnight successes or even the brands that have scaled since COVID era and they’re looking at the $200 million brands and trying to do what they’re doing, right?

Greg Shuey (18:11.692)
Yeah, overnight successes.

Greg Shuey (18:23.008)
Yep. Yeah.

Neal (18:26.018)
And there’s nothing wrong with that, right? Like we all want to look at successful people or successful entrepreneurs, founders, and replicate their success. Often there’s a whole lot that comes in the middle of that on that path. what I would like the biggest constraints on brands that are getting started are the function of funding, right? Function of bandwidth and like actual time constraints, right? And so

Greg Shuey (18:32.706)
Yep. Yep.

Greg Shuey (18:48.246)
Mm-hmm.

Neal (18:56.223)
understanding that doing things that don’t while it may be feel harder, while it may take more time and resource, those are actually really positive things to do in early days, right? Rolling out the red carpet for your customer is a really hard thing to do. It doesn’t mean have a chat widget on your website. That’s not rolling out the red carpet to your customer, right?

Greg Shuey (19:19.383)
Yeah.

Neal (19:25.069)
What is it that you can do to truly…

make them feel special. And it’s early days that founders do that a lot. That happened a lot in before Facebook ads and when it was just kind of like Instagram was the biggest organic thing. Like it was a very big brand building, community building effort. Anyone who started a brand was all about building community. And I think we departed from that. Right. So there’s no earlier time.

Greg Shuey (19:32.513)
Hmm.

Greg Shuey (19:51.2)
Yep. Yeah.

Neal (19:55.693)
to invest resources and energy into building community, building brand fans, rolling out that red carpet, making them feel special. And so that’s one aspect, right? Like that, it’s hard to do. It’s not a scalable thing. It requires personal touch and personalization. The other aspect is understanding that there is no shortcut to success. if it’s harder than ever to build a brand right now,

then prepare for that, right? Prepare for it. Because if you learn from history, there were, let’s call it 2.8, at one point there were 4 million brands on Shopify, right? Now there’s about 2.8, right?

Greg Shuey (20:42.54)
So about what a third of them gone out of business, shut off their sites.

Neal (20:46.231)
Third of them went out of business, but then even from that 2.8, there’s about 50 % of those or more that are considered just ghost stores, right? Or zombie stores, if you will, right? In other words, born during the 2020 era and they just kind of like…

Greg Shuey (20:57.174)
Yeah.

Greg Shuey (21:07.222)
I have a couple of those. They’re just kind of fizzled out and putting along, right?

Neal (21:10.166)
with

You then kind of just doing a thing here and there and that’s okay. Right. Like every, everyone set up a shop overnight. Right. But there’s a large majority of the Shopify ecosystem. That’s kind of in that. Like in that mode or like, listen, just because you’re a founder, doesn’t mean that has to be your full-time job. A lot of people did it as a side hustle too. Right. And side hustle, some side hustle become full-time job. The vast majority stay a side hustle. Right. So like, there’s a.

Greg Shuey (21:24.545)
Yeah.

Neal (21:42.733)
large chunk of those out there. you know, where you look at trying to avoid that scenario where your full-time founder role ends up becoming something that becomes exposed to what changed in iOS 14. iOS 14 was the biggest trigger for the zombie companies being created. It’s like, my gosh, it just got super hard. And now…

Greg Shuey (22:05.324)
Yeah.

Neal (22:12.373)
Yup. It’s just no longer worth it for me to devote the attention there. And so literally that happens with an overreliance on one channel. So I think it’s about surrounding yourself with the right partners. It’s about testing all channels. It’s about leveraging what people are doing just one step ahead of you. So for brands doing sub one million, go find a network and interact with brands that are doing sub five million.

Greg Shuey (22:42.614)
Yep. Join a mastermind with those people.

Neal (22:42.753)
Right. And that’ll give.

That’ll give you the clue as to what you need to do. It’s very hard for a brand doing some 1 million to truly be able to put a lot of strategies that a hundred million plus is already putting into place, right? The a hundred million plus, they were also born during a different era. Various brands are a hundred million plus that were born 2022 or later, right? Vast majority were born during the dot com equivalent.

Greg Shuey (22:56.802)
For sure. Yeah.

Greg Shuey (23:03.105)
Yes, they were.

Neal (23:16.523)
And then they just found ways to survive, adapt, and then continue scaling, right? So they were just born during a different era than you were.

Greg Shuey (23:25.506)
100%. And when I said like overnight successes, that was kind of tongue in cheek, right? Like most of these brands have been building for seven, 10, 15, 20 years, but all of a sudden they’re on your radar and you think, smokes, they launched last year. Look at this company, right? They’ve been doing those foundational marketing pieces. Like you talk about community building, brand building, those types of things that just take time and effort. And a lot of times we don’t see that or recognize it that actually happened.

Neal (23:56.525)
Sparta, Sparta.

Greg Shuey (23:57.41)
Yeah. So, we have a brand that’s mastered one channel. How do they figure out what’s next? Like how do they decide what they should expand into? You just made the comment that test all the channels. I mean, is that a wise move for a brand that’s just crushing it on Facebook to go test five more channels or how do you, how do you guide or coach through that?

Neal (24:27.309)
That’s a great, wow, what a great question and a different answer depending on what channel that they’ve had success on, right? If someone has had a great level of success on Metta, first off hats off to you. Just candidly, it’s the brands that are operating at a place of scale that are having a little bit more success on Metta.

Greg Shuey (24:43.71)
Lucky!

Neal (24:55.093)
Ultimately, it’s understanding what’s working and what’s not working. if you’re able to, I think LTV is actually gonna tell you the story there. So understanding what kind of channels to leverage is gonna tell you, is gonna come from understanding, okay, when my customer comes into the funnel, what are they doing? What’s the future behavior look like?

I think there’s no better way to understand what channel to expand into than to ask your existing customer base, learn from them. Right. I’ve also talked for years about that, right? Where you can leverage learning about your customer behavior either with a mobile app or collecting first party data, know, surveys rolling out.

Greg Shuey (25:35.916)
Yep. Using no commerce to do post purchase surveys or just calling up your freaking customers on the phone and talking.

Neal (25:44.567)
Thousand percent thousand. Right. Exactly. Exactly. So you learn about that customer, right. And once you learn about the customer, that’ll kind of give a lot of clues on what channel to explore. So I think, you know, right now I’m speaking with a baby brand, right. They’re focused in the baby space. They they’re sub two million, right. So kind of very much in line with your with your audience. And they’re like, OK, we’re

all in on meta right now, what should we be doing? And when they looked at their cohorts and LTV, I wrote about this just recently in that, you know, baby brands have a very short LTV window. And the LTV window closes virtually overnight, right? Largely because why? Their kids grew up.

Greg Shuey (26:28.704)
Yep.

Greg Shuey (26:37.89)
You blink and they’re 12.

Neal (26:41.197)
No fault of the brands other than the audience who they’re shopping for just grew up. And this is where that LTV window means everything, which means understanding your customer. they say, Hey, our moms are shopping in the middle of the night. Our moms are not coming after three or four sessions. They’re shopping on impulse. Right? So this is the reason why they’re actually looking at disco.

They’re like, okay, how do we maximize that LTV window? How do we get more of those types of shoppers into the funnel? And that’s why they’re looking at that channel.

Greg Shuey (27:16.834)
And you’re like, actually, we have all these baby brands that we work with. Let’s slot your right in and boom.

Neal (27:22.905)
Well, exactly. But I mean, like, listen, Disco is amazing. It’s not the only answer, but this is one example of how you evaluate a channel by learning from your customer, understanding what they’re specifically asking for, what their behavior is. Right. If you’re looking at customers that are acquired from TikTok, you’ll actually notice that their LTV, LTVs are actually substantially less than those acquired from Metta. That audience, no matter

Greg Shuey (27:35.67)
Yeah.

Neal (27:50.925)
what category you’re shopping in, they’re programmed with a different level of an attention span, right? By virtue of what TikTok, again, taught us to do. So yes, we view and we rely on that first 10 words of that video to catch our attention. And if it doesn’t, we’re on to the next. Shopping behavior on TikTok is literally exactly the same. It promotes that very quick action. And once that moment of feeling like you want to buy goes away, it actually permanently goes away.

And so once those customers come into the funnel too, their attention spans as consumers are actually pre-programmed to hurt your LTV, right? And whatnot. So I think it’s understanding your customer, looking at the data, and then responding to it and understanding what channels you need to explore next.

Greg Shuey (28:38.498)
I like that, cool. So what are some of the biggest mistakes you see brands make when they try to diversify?

Neal (28:45.355)
Mmm.

First, going after too many channels at once, right? Bandwidth is a constraint, like I mentioned before. brands often have, and I’ve spoken about this before, this thing called shiny object syndrome, Where they very much like in childhood, it’s like a childhood, you have this toy, you’re really happy about this toy, you’re having a great time. And you feel like

wait, I want that toy over there. Cause that toy is going to be better. Very kind of like a grass is greener kind of thing, or this is going to be the quick fix to solve all my problems. And so I think a lot of times when. Listen, sub 5 million, it’s really tough to achieve scale on most of the primary acquisition channels. So life is going to be hard. And as a result is very easy to fall into. I need to test these all four out because what I’m doing right now is not working or it’s hard.

Right. And I think prudence is the hardest thing. Prudence in expanding into those channels is one of the hardest things to maintain because when you’re exploring new channels, that means you know less about them and therefore kind of guessing and you’re kind of dipping your toe into each one. Right. But the challenge is spread yourself too thin and you’re actually never going to realize the full potential of that channel if you don’t devote enough attention to it. So I think spreading oneself too thin.

in exploring those new channels, biting too much off too quickly.

Greg Shuey (30:21.228)
Yeah. So like I said at the beginning, I like two channels. What’s your sweet spot? And I know it depends on budget and the type of business, but like, are you kind of in that same ballpark? Start with two, start with three. Like what is, what does your mind and gut tell you?

Neal (30:40.174)
I don’t know if there’s any one specific kind of silver bullet answer on how many channels to explore. I think it’s a function of how well you have performed with your existing channel to the point in how well have you kind of saved up. You think of like, let’s say you see, you you’re driving a 1989 Volvo.

Right. And you are looking at that Camaro, you’re looking at that Mercedes and you’re like, someday I’m to have that. Right. And so you work and you work really hard and you say, okay, I’m going to keep tucking them, tucking some money away for that. Right. That is the exact mindset to when you’re having success on any one channel, lot of times everyone’s like, Hey, you’re having success on one channel. Put all your chips in that channel and dump all of that. actually take a different view and say, Hey, continue to emphasize that channel. That’s performing really well.

But don’t forget to create that other cushion that’s going to fuel future success in other channels. Right. And I think it comes down to how much prudence, because typically when someone’s saying, I’m exploring a new channel, they’re typically doing it at the moment where their current primary channel dropped in performance. They’re struggling. They’re making it panic mode. It’s a reactive choice to explore new channels because my primary one wasn’t working before, working like it was before.

Greg Shuey (31:52.394)
Yeah, they’re in panic mode.

Neal (32:02.859)
So I think when you think about prudence, it’s like, hey, this times are good right now. And I think that’s the problem. have this grass is always greener. Therefore I’m going to, and they make that shift only when things get hard, right? But who are the ones that can say, listen, this is working right now, but I’m not going to put everything in because this is my opportunity to understand that things won’t always be like this. I know how good I have it right now.

Greg Shuey (32:09.504)
Yeah.

Greg Shuey (32:18.732)
Yeah.

Greg Shuey (32:28.886)
Yeah. Yep.

Neal (32:32.897)
Great things don’t last forever. Arbitrage opportunities eventually close up. And therefore, this is my opportunity to say things are working. Let me start exploring a new channel in that process. again, it’s not a number of channels. It’s a function of how much budget have you allocated during those good times set aside to explore those. The best time to explore a new channel is when your primary one is working as opposed to the exact one.

Greg Shuey (32:59.444)
is crushing. Awesome. What about brands that are on very fixed budgets? Like are there low cost options out there to help them, you know, really ramp up their customer acquisition? Or do they have to just approach things differently? Like, like, what would you say?

Neal (33:23.437)
Now, I mean, that question in terms of brands with fixed budgets, actually that applies. That’s like a new thing right now. We even brands operating at huge scale, right? We talked earlier about how kind of the reckoning that started with iOS 14 and things got hard in 2022. It got much harder in 2023.

Greg Shuey (33:32.482)
Yeah.

Neal (33:50.157)
Brand life was the hardest, I think, in early 2023, where it was just the ultimate pain that was felt, And it was 2023 where Brand said, okay, we need to operate with a different level of prudence. We need to cut costs and budgets. We need to reduce our spend at the top. We need to reduce spend on retention. We need to reduce spend on…

Greg Shuey (34:16.086)
They started talking about contribution margin, marketing efficiency, all of these acronyms that people started talking about last year. It’s wild, right?

Neal (34:19.947)
now.

Neal (34:25.805)
100%. Right. All of those things were all on profitability, profitability measures, looking at efficiency, right. As the primary indicator for success. But the thing is, it’s, started, everyone started talking about this in 2023. Everyone started exploring this in, as a new concept. Yes. Profitability was a brand new concept, right. That had, you know, like it was. which is mind boggling, but that’s the thought process that

Greg Shuey (34:32.362)
Yeah.

Greg Shuey (34:48.578)
which is mind-boggling.

Neal (34:53.503)
really hit home in 2023. Brand teams are leading than ever. You know, the average brand team has cut headcount by almost 20, 30 % since that time. So budgets were cut across the board. So when you talk about this fixed budget, right, all of that really became a reality that like this fixed budget must happen regardless of your scale in early 2023. But it took time to implement that, right? It took time to like fully

understand what that meant in theory and putting it into practice. And so that’s why I call 2024 the bottom in a good way, in a really, really good way, because it’s the first time where we’re operating in a non bubble environment where the pain has already been felt. The understanding of what needs to be done to solve that pain and get out of that trough has been understood. And we had six to 12 months to put those theories into practice.

Greg Shuey (35:45.216)
Yeah. Yep.

Neal (35:52.717)
So in my view, think 2024, that’s why I’m so bullish on 2025 is that like finally had the reckoning, the understanding of what needs to be done. The changes have taken effect. 2024 was that year, right? So getting back to your original question, fixed budget, what do we do in a fixed budget environment? That’s like literally the story for everybody right now. and one of the most exciting things, that, that got me so pumped about disco, right?

Greg Shuey (36:03.34)
Yeah.

Neal (36:21.941)
was the concept of saying your budget at Disco is fixed. You choose your CPA. You choose what you want to pay to acquire a new customer. With Meta or TikTok, you are going to continue to pay regardless of your performance over the course of time. You’re going to continue to pay regardless, and you’re just going to understand what’s my return on this and try to figure that out. But regardless of whether or not people buy, you’re still paying for those eyeballs, right?

Greg Shuey (36:28.364)
Yeah.

Neal (36:49.803)
Whereas with Disco, you would say, well, I’m only going to pay if I get a conversion. If I get a 10,000 impressions on someone’s post purchase, but nobody buys, you don’t pay anything. So I think that’s what it got me so excited about. We’re in a fixed budget environment. So there’s 12,412 software companies that are chasing the same three to 4,000 brands on Shopify right now to land them as potential logos or brands to work with, right?

Greg Shuey (37:00.47)
Yeah.

Neal (37:17.825)
It’s an incredibly crowded ecosystem of software. And so what got me so excited about Disco is, the combination of being able to have a fixed CAC, being able to have predictable CAC, right? And then the data play that comes with that, right? That arms the brands to be able to keep those customer acquisition costs lower to understand what channels they should be investing in. It’s the data play that’s going to funnel through all of that. Right. So, I think.

Greg Shuey (37:43.553)
Got it.

Neal (37:46.189)
LTV is going to be that’s that largest offset for rising CAC. Again, invest in LTV no matter what, whether it’s actually those retention channels that everyone always talks about. I’ve talked about for a really long time or focusing on top of funnel channels that are guaranteed to bring high LTV customers into the channel. Because again, in a fixed in an environment where CAC is going to continue to go up, the only way you can offset it is by improving that LTV. Right.

Greg Shuey (38:11.468)
Got it. I love it. Predictions for next year. Where do you see us going? Are we going to have a bunch of winners next year?

Neal (38:20.749)
I think this is going to be, as I mentioned, think 2025 has a potential to be a pretty euphoric year. Now euphoric, I’m not comparing euphoric to 2020 euphoric, but I think it’s going to be the first breath of fresh air. because brands have finally understood what needs to be done, right? in order to achieve profitability, think expectations have been normalized, right? 10, 15 % margins.

Greg Shuey (38:36.852)
I so.

Greg Shuey (38:41.26)
Yeah.

Neal (38:50.369)
are good, strong, right? It’s like we have a much more feet on the ground line of expectation of what business growth and profitability should look like. so predictions for next year. I got some bold ones. I think on the search front, I think Bing is going to double its market share against Google.

Greg Shuey (39:15.284)
Interesting, okay.

Neal (39:17.471)
talking to this SEO guy here, you know, like I thought I’d open with that one for sure, right? And I think that’s largely going to be driven by the open AI partnership. that’s just really Google’s AI efforts are just not quite where they were hoping to be. And they’re not great. And so I think

Greg Shuey (39:29.196)
For sure. Yep.

Greg Shuey (39:36.738)
They’re not great.

Neal (39:42.081)
Google obviously remained the clear winner, but Bing doubled its market share over the course of that time. I think TikTok is going to continue to be a huge performing channel. think there’s still a reluctance. I don’t know why there’s brands that go all in on TikTok and then there’s this other cohort of brands that say, don’t do TikTok and it’s like this badge of honor, right?

Greg Shuey (39:48.502)
I like it.

Greg Shuey (40:05.953)
I won’t touch it.

Yeah.

Neal (40:09.715)
I think that badge of honor is going to disappear really quickly.

Greg Shuey (40:13.314)
Well, I think social selling in general, right? You’re going to be able to start shopping on YouTube. I think any of these platforms that are doing social selling are going to be huge next year.

Neal (40:22.317)
Thousand percent thousand percent and then one that’s related to ecom but not quite Ecom is LinkedIn I think LinkedIn is to literally go next level next year. I think we’ve seen this growth of Ecom operators building personal brands over the last two years and that’s been happening with much greater velocity. So I think the

Ecom community is going to have a viral moment in, or viral period in 2025. When it comes to LinkedIn, you’re going to see more brand founders than ever building in public. You’re going to see more brand founders and ever, you know, getting out on stage and showing up on podcast. Right now we kind of have that very similar circle of the same sets of operators that are moving from stage to stage pod to pod.

Greg Shuey (40:57.025)
Hmm.

Neal (41:19.721)
And I think we’re just gonna see this huge.

just bull run on building on LinkedIn as a part of the personal brand, right?

Greg Shuey (41:29.522)
I hope so because I’m tired of hearing from the same people over and over and over again. Not a knock on them, but like I want to hear from more founders who we haven’t heard of before.

Neal (41:40.525)
Yeah, I think I’m most excited to hear about those that have grown a business post 2022 from the ground up. Right. And you’re seeing that, right? You’re seeing them build in public. Hi, I have only $10,000 a month in revenue right now, and I’m going to start this journey building in public. Right. Those are amazing stories to build a brand right now, to start a brand right now is way harder.

than it ever was and to see those people. So I think you’re gonna see a lot more of that in the e-comm community. I think e-comm on LinkedIn is gonna have a viral moment on the personal brand building front.

Greg Shuey (42:21.14)
love it. Those are some fantastic predictions and I think I’m right there with you on a lot of them. that’s awesome. Well, Neil, any final thoughts?

Neal (42:33.335)
Well, first off, I’ve been following your journey for what feels like the beginning of time. And, and candidly, like this was an absolute pleasure, man. Really enjoyed our chat. Really enjoyed our conversation and looking forward to the big things to come for you.

Greg Shuey (42:49.738)
Awesome man, appreciate it. likewise, following your journey, I’m excited to see what you guys are able to do over at Disco. Already crushing it. You’re gonna 10X that dude. You’re gonna 10X her.

Neal (43:02.209)
I appreciate that. Thank you. That’s the goal. That’s the goal. And looking for the big things to come. I appreciate the support.

Greg Shuey (43:09.986)
Well, thank you again for being with us. So to everyone listening, I mean, we have learned a lot today. So make sure that you carve out some time over the next couple of weeks. Hopefully you’ve got two or three really strong takeaways and you can start executing against those. So thank you so much for joining.

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