After leading several successful sales organizations in the telecommunications and software space for almost a decade, John began investing in companies in the eCommerce arena. Then when a close college friend launched BattlBox in early 2015, John knew he had to be involved. So, he invested in it, offering advisement in a limited capacity.
Transcript from video:
Intro
0:00 But the experience phase is very important, too in creating a community for each brand
0:05 and just engage superfan customers. Treating them as if their family. And that's our mantra
0:13 and how we view our customers. Welcome to Honest eCommerce, where we're dedicated to cutting through the BS and finding actionable
0:21 advice for online store owners. I'm your host Chase Clymer, and I believe running an online business does not have to
0:28 be complicated or a guessing game. If you're struggling with scaling your sales, Electric Eye is here to help. To apply to
0:34 work with us visit electriceye.io/connect to learn more. Now let's get on with the show.
0:47 Welcome back to honest eCommerce. I am Chase Clymer, coming to you from Columbus, Ohio.
0:53 And today's guest on the podcast is John Roman. He is a serial entrepreneur.
0:58 John is the CMO and co-founder Battlbox along with being the managing partner at Carnivore
1:03 Club and six other brands in the eCommerce space. I feel like he's going to have a lot to share with us today. Welcome to the show, john.
1:11 Hey, Chase. Glad to be here. Awesome. Where are you calling in from? Metro Atlanta. The suburbs.
1:17 Oh, nice. I will actually be down there shortly for a wedding.
1:23 Okay. When? About two weeks from now. Oh, nice. Okay. So the weather will still be really good. It'll be a lot better than Columbus, that's for sure.
1:29 (laughs) Awesome, awesome. So you're managing and you have your hands and almost eight brands. What
John’s story of how he got started with Battlbox
1:36 led you there? What's your background? How did you end up in this in this position? Completely by accident. Not quite. But... So, my background is business to business
1:49 sale. Sales leadership. Typically, telecommunication, software as a service companies. And I was
1:57 doing that. And in 2015, we had a company that we had some shares in --that I was working for--
2:06 publicly traded. It was purchased. I got a decent little payday and I was trying to find
2:14 some investments and really just try to --in a very, I guess, non-scary way-- try to build
2:21 something outside of working for big companies so that I could eventually not have to do
2:27 that. And a friend that I went to college with, Daniel Dabbs, we had linked up. I have a Christmas
2:33 party every year and he came to that. We're talking. He ran a company at the time that
2:41 was kind of t-shirt, swag-like marketing material stuff --logos and stuff-- for companies. And
2:52 they were actually just individual. They had a couple of locations outside of universities. So the slow time for him was December.
2:59 He was chatting with me about, "I want to do something else." We threw a bunch of ideas
3:06 around, none of which were Battlbox. It was more (about) consulting ideas. And then fast
3:13 forward in February of the next year, 2015, he comes up with this idea. His wife was getting
3:21 a Birchbox subscription box in the mail and he was watching her excitement level (when
3:27 she was) unboxing it each month. Went to find a box for him. He wanted to experience this. And he wanted outdoor camping gear,
3:37 survival gear, couldn't find one. Three weeks after that, he had launched a website and
3:44 was ready to go and that's... I came in as an investment. Offering my assistance from like a business side on a very, very small scale. We saw exponential
3:56 growth. And about a year later, I quit my job and jumped in this full-time. And now
4:02 we're just continuing to try to grow and diversify. I've fallen in love with eCommerce. It's just
4:10 such an enjoyable industry. I can agree completely. There's just something... I think it's the tangibility of the numbers.
4:18 And if you have any... If that appeals to you at all, you can see where your efforts are helping or you can quickly see if you've made a mistake. You failed fast, so you gotta
4:28 move on from it. 100% and I'm kind of a data nerd. So I can just completely geek out on the analytics
4:37 and come up with business plans based on that. It's just... It's a lot of fun. It plays a
4:43 lot of my strengths, too. Which just makes it even more enjoyable. Absolutely. So let's go back to the first one. So, Battlbox. Where did you guys find
What made Battlbox grow?
4:52 your initial growth? What was working for you back then? So, none of us really had any eCommerce background at all. Daniel had this great idea. We open
5:06 up a website and we had gathered from the masses. You run an ad on Facebook and people
5:13 are going to come to buy if they like it. And this is circa 2015 so we're acquiring
5:19 customers for $4 and $5, which is... It was the heyday. At that time, acquiring customers for that was insane. So that was
5:30 our focus. It was 100% Facebook. Acquiring customers for $4 or $5, running ads... That
5:38 was the sole focus because out of pure naivety, we didn't know any better. It worked and if
5:43 it works, why would we not just do that? Absolutely. And we'll get into what happens when it doesn't work here in a bit. I have
John’s first website/platform
5:49 a few more questions. (laughs) So what's your first website? What was it built on?
5:54 So we initially launched on Cratejoy which is a niche, subscription box-centric platform.
6:02 Mm-hmm. And it was great. It allowed... Daniel had a website up using their template within a
6:09 couple days and it made a lot of the business aspect of it from the digital side a lot easier
6:18 to onboard and get honestly, what could be considered less than even proof-of-concept,
6:24 up and selling. So it was really... We're not with them anymore for a multitude of reasons, but at the time,
6:34 it was great. We had a site up and running taking orders within a couple of weeks total.
Talking about Cratejoy as a platform
6:41 Yeah. I mean, you have got to find out whether or not your product had any legs. Finding
6:47 that product-market fit. I think that's... I remember Cratejoy. I believe it's still
6:53 around. They are. Yeah. But I remember when the whole subscription model got super popular and a lot of things
7:02 we're launching on Cratejoy. And I think, "Yeah, that could test product-market fit real quickly." And then just going to
7:08 today, I can see parallels. Because Cratejoy also almost had a marketplace element to it,
7:15 did it not? No, they did. They did. Yeah. That was a big thing. They were pushing them because they were getting a reoccurring percentage
7:22 of the revenue from each box. So it was a potential great revenue source for them. So they were really, really, really pushing that.
7:28 Yeah, so I think that's cool. So these days, if you're thinking about starting a business subscription, Cratejoy might be a good idea. Or just to see if your product has legs, throw
7:38 it up on Amazon. Do you know what I mean? And if you're seeing the sales there, it means that you are onto something. And then it might
7:43 be worthwhile to invest in an actual website and building an actual brand. Right. 100%. Before you dump your savings or a large sum of money, yeah. Test it. You'll
7:55 find out pretty quickly. Absolutely. So, after Cratejoy, I'm assuming you jumped over to Shopify?
John’s reason why they migrated to Shopify
8:03 We did. So, we were with Cratejoy for 2 and a half years. We had a combination of a semi-falling
8:11 out with them, semi we really couldn't... We've kind of outgrown them and a lot of the
8:19 things we wanted to offer our customers we just weren't able to. So yeah. So we moved
8:25 over to Shopify Plus and then we went with ReCharge for the subscription billing piece.
ReCharge is a great billing solution for subscriptions
8:31 Hey, you answered my next question. Yeah. We love ReCharge. Those guys are great. They feel like... When we're working with
8:41 them, --and I have a couple of calls monthly with our account manager-- it's like he's
8:47 part of our business. (He) asks questions like he cares, and gets strategy and plans
8:53 with us to really, really try to grow the business They're my number one recommendation for subscription, as long as it's pretty straightforward. The
9:03 further you get away from the traditional subscription model, you might be trying to fit a square peg in a round hole.
9:10 Oh. Yeah. We broke some things for sure when we went over to them but I think, as long
9:19 as you can bring resolution when you break things... But the most important things... Things are going to break everywhere.
9:25 Things break on Cratejoy, things break on Shopify, it's (about) how quickly do you respond and how quickly do you get resolution. And what you get from those guys, I haven't seen
9:34 anything like it. Oh absolutely. They jump right on it. Awesome. So let's go back though. You were saying, you guys were in the heyday, the wild
John’s story with Facebook ads in its heyday
9:42 west of Facebook ads. You guys are acquiring customers for ridiculous numbers. So you went
9:48 all-in on that strategy. Yeah, I mean, it was great. I wish I knew what I know today because I would have...
9:57 My partners, Daniel and Patrick, we would have taken every single credit card, every
10:02 dollar we had and thrown it to grow the business in 2015 at $4 and $5 acquisition costs.
10:10 For us, it's gone significantly higher. But everything was great. Rocking and rolling,
10:16 throwing up Facebook ads. And thoughts throwing up Facebook ads at the time, so this is the
10:22 first time we've done this. We're probably not thinking like experts in that space with
10:30 proper audience segmentation and true multivariate testing. We're setting up ads and they're working. So we did that. Everything was going great.
10:41 And we threw some new ones up. Friday, Labor Day weekend. So we're several months into
10:47 the business. Everything is just going perfect. New promotions, all these deals, we're gonna blow Labor Day out. So excited about it. Get
10:59 done with the ads halfway through the day and they all go active 3:00 or 4:00 Eastern
11:07 Time. We're excited. At this point, we're still in Google Analytics live.
11:13 Watching people come to the site, seeing what they're doing, then all of our ads turned off. And shortly after that, we get another notification that our Facebook account has
11:23 been shut down. And this is --at this point-- 6:00 or 7:00 PM on a Friday.
11:29 So we went from tons of traffic to our site to literally no traffic unless someone was
11:36 coming back because they had not purchased previously. So all of a sudden, we had no
11:41 business. so it was kind of like an aha moment of "what do we do?" Can you translate that to dollars and cents? How did that affect your bottom line?
11:50 Yeah, I mean, so we were expecting to have $30,000-$40,000 weekend and that's just with
11:58 first time boxes. Obviously, these guys are going to love the product and stay with us for a multitude of months, or some years.
12:07 So it was kind of a, "Oh crap! We've ordered stuff. If we can't figure out advertising
12:14 at this point, we're going to have our first major hurdle trouble. Because we've ordered
12:19 all this product to put in these boxes and now we can't advertise and we were off Facebook. We couldn't get..." I don't know if you ever tried to call and get someone on the phone
12:30 from over there, it's a little difficult… Mm-hmm. ...at times. So, sending multiple messages, using every feature they have tried to appeal
12:40 this. We got super lucky. And we had a Battlbox customer --that was in our forum-- that actually
12:47 worked for Facebook and was, I don't know, a couple offices or cubicles or close by the
12:55 manual auditing team that was responsible for killing ads. (laughs) And he said, "Do you want me to go over there and get it fixed for you?" And we said, "Yes,
13:06 please." And I kid you not, an hour later we were back in business and back on Facebook,
13:12 as if nothing ever happened. But we were very scared for a solid five, six days because we went from the top of the
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14:11 So let's break this down to the lesson learned. You were putting all your eggs in that one
Moral of John’s Facebook story: Diversify your lead sources
14:19 basket and... 100%. ...then the basket disappeared. (laughs) Yeah. And then... We were putting all the eggs in the basket and they took their basket
14:28 with our eggs in it. It was absolutely brutal. But you're right. There was a huge lesson
14:34 learned. And it was one that in retrospect, in hindsight, is a common practice for us
14:39 now for any brand, anything we're involved in. But at the time, just due to naivety, we didn't know any better. And that's just diversification
14:46 of your resources. You have to have multiple lead sources. You can't be dependent on one
14:53 because things happen. And if your business is dependent on someone else and exclusively depend on that one other entity or person, that can be problematic.
15:03 Absolutely. So what's the second lead source that you went into? So the next one we went into was Google Ads or I guess, Google Adwords at the time.
15:12 Absolutely. And you started splitting it up the traffic sources and... Yeah, so we tried that. Honestly, when this happened, it was Google Ads. But then right
Battlbox’s other lead sources
15:22 away (we're like), "Okay. Let's try Twitter. Let's try Reddit. Let's try Pinterest. Let's
15:29 try everything." And we knew some stuff wasn't going to resonate and it wasn't gonna work
15:35 for the right demographic retargeting, but we know. "Let's try everything. Let's find as many different lead sources that are profitable,
15:43 that give us either the return on ad spend or the customer acquisition costs we're comfortable with that's profitable and let's keep it diversified."
15:53 And we still keep it diversified. We typically have between five and six lead sources now
16:00 at all times active. And none of them are... There are ebbs and flows when we hit an amazing
16:06 ad we're able to scale it. But for the most part, we try to keep them all pretty equal in their results and performance.
John’s leap from focusing on Battlbox to managing other brands
16:15 Awesome. And so what was the leap from going from focusing on Battlbox to bringing some
16:23 other brands under the umbrella? Sure. So, when I made the initial investment to be a part of Battlbox, it was in the agreement/in
16:33 the contract that I wanted to better understand the business model of the subscription box
16:40 piece. And if it was successful, we wanted to stamp it out and replicate it a couple
16:46 of times. So that was the next step. We launched in December and January, --December '15-January 2016-- we launched first BBQ Box,
17:03 which was a monthly subscription box for barbecue source: sauces, seasonings, rubs and recipes.
17:11 And then the next month we launched Spartan Carton, which was a fitness-centric workout
17:18 gear: workouts, supplements, protein bars, stuff like that. So we launched both of those
17:24 pretty quickly just to try to test "Hey, is this business model more than just kind of
17:32 the subscription, Battlbox business model?" But really, our roadmap and our strategy of how to launch one of these, was it correct?
17:44 So we out we launched both of those in short order and had them until June of last year
17:52 when we sold both of those businesses. So, in managing multiple eCommerce brands at once, I'm sure that There was a lot of
The best way to learn marketing is to run your own business
18:00 lessons learned, especially with the different types of audiences and the way that you were acquiring them with paid advertising.
18:08 (I'm) pretty sure there's no better way to learn the ins and outs of marketing than running your own business.
18:13 Yeah, no. I feel like in these past 4 and a half years, I feel like I've gotten the
18:22 equivalent almost of a master's (degree) in marketing. I've just went from knowing really
18:29 nothing to forced learning. But it's crazy when it's (your) business, when it is your
18:34 livelihood, when you've got to figure it out, and it's interesting, and engaging, and you're enjoying it, it's crazy how fast you can even sponge everything and just learn. And we're
18:45 still learning. I try to learn something new pretty regularly when I do.
What point in the business did John decide to expand?
18:52 So with the business growing over time and the brands' growing over time, when did you
18:59 guys take your feet off the gas and start bringing in consultants? What phase of the business where you guys are like, "Alright. Well, we know this works.
19:08 We need other people to run this so I can focus on either building a new brand or trusting a new model." When did that happen? How big were you? What was going on?
19:15 So right when we hit... For Battlbox, when we were projecting... So our first year, I
19:24 think we did $4.5 million. The second year, 2016, launching the other brands about halfway
19:33 through the year, we were projecting an eight-figure gross revenue number that year. And we were
19:41 all burning the midnight oil but there was so much oil to burn. We were spreading ourselves
19:47 too thin. So yeah. We had to identify, "What's something that we're comfortable finding experts on?
19:55 And what do we think that we're doing okay, that maybe someone else can do better? Someone smarter and can do a better job?"
20:02 So the first thing we started doing was, was outsourcing some of our marketing. So we took
20:08 paid advertising, 80% of our social content and then some tech at the time, just like
20:17 connections and integrations and setting up some automation. So we outsourced all that
20:24 to an agency. The agency was doing everything. Absolutely. And that allowed you to focus on the things that you were uniquely qualified
20:33 to do, I guess. Correct. Yeah. It's (like), "Let's focus on the things we're really good at." So we did
20:40 that. (We're) no longer using the agency. As we have grown, we brought some of those
20:47 services in-house because we feel that we can do the best job now. Yup. We still keep advertising out separately. We actually... We're planning on bringing
20:59 it in-house. We had a game plan for that earlier this year and a good friend of mine --who
Learn the business first, before hiring other people.
21:08 I've known for, actually a few years but never thought it made sense to use his services--
21:14 we ended up using his services. A gentleman named Brent and (his) company Stealth Venture Labs. So we go to them, and
21:22 they manage all of our ad buying/advertising. Absolutely. So a question about how... You cut your teeth, you had to learn all this
21:30 stuff. Do you believe that you're better off as a business owner doing it yourself and then hiring someone to do it for you? I think so. And there's been other aspects of the business that probably ring a little
21:39 bit more true to this, but it's tough to be able to inspect stuff if you don't have at
21:46 least some basic understanding of it. Not that we shouldn't trust people and just let the numbers speak for themselves, but
21:55 sometimes you want to be able to look at the side of the business. And even if it's outsourced, you want to be able to make sure that they're doing a good job.
22:05 Yeah. And if you don't understand that part of the business or that side of the business, it's
22:10 a little bit difficult. You're a little blind. And you just have to trust and hope that they're
22:16 doing the right things. And that's not always the best situation to be in.
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Are all of John’s businesses under the same umbrella?
23:14 So now, are all of the businesses under the umbrella? Or just most of them (are) on the subscription model?
23:20 So, none of them are under the same umbrella, which is really interesting. They're all separate
23:26 business units for a multitude of reasons, but we do use shared resources. So a good
23:35 example would be for Carnivore Club. So, Carnivore Club (is a) monthly artisanal meats subscription, like charcuterie. We actually
23:45 acquired them on July 1 of this year. So it was a Toronto-based company with these shared
23:53 resources, economies of scale if you will. An example would be on the Carnivore side, the Toronto side, we have a gentleman named
24:02 Curtis and he was running Amazon for that brand. Amazon subscription box piece and then
24:11 traditional Amazon FBA. So Battlbox at the time was outsourcing that to an agency, to run our Amazon. And by post-acquisition
24:25 and shared resources, Curtis now oversees Amazon for Battlbox as well. And then on the
24:36 Battlbox side, there are some shared resources like customer service, some of our content
24:42 creators, graphic artists. And so for each brand, we have spreadsheets, where we track time use so that we can allocate
24:51 (like), "At the end of this month Battlbox might have to cut a check to Carnivore Club or vice versa." Just depending on time use of the resources. By resources I mean, the
25:02 employees and us. Absolutely. I feel like you could give a crash course in the economies of scale for eCom.
Economies of Scale in Ecommerce
25:09 That's the goal. We were able to. And so we're actually in late stages of acquiring a couple
25:17 more subscription boxes and that's what we're doing now. We look at their P&L, balance sheet
25:25 and all their accounting docs and we're able to see "Okay, so last year this was their
25:31 EBITDA. But with economies of scale with this model, we can take..." Maybe, their EBITDA was $400,000
25:39 and we can say "Okay. Day one. Just day one alone, we can get it up to $600,000-$620,000.
25:46 And then over time, we can get it up to something else. And at the same level with the shared
25:54 resources of this feature subscription box, they might be able to impact the EBITDA of
26:01 the other brands too." So again, I think I'm getting a masters of that, as well, in the
26:07 past year." Oh yeah. I'm just learning... Baptism by fire.
26:13 Such a cool, growth strategy for your business. And I'm super curious about all that stuff.
26:20 So I'm sure we'll try to have you on again, and we can talk more about scaling your business
26:25 by acquisition. I don't think that's a topic that I've seen touched on in eCommerce. I've seen it for other businesses, but that's not really the topic of today's show.
26:33 Right. I do have one last question for you though. With most of the businesses being subscription,
26:39 I think one of the biggest things with subscriptions is churning. You're losing customers. People are only there for a couple of months. What are you guys doing across the board to try
26:47 to increase the lifetime value and keep people around? Sure. It's a great question. I'll try to give a shorter answer but that's actually probably
How John prevents customer churn
26:55 a whole another topic, too. So churn is so important I think, just probably industry-wide
27:03 in the subscription box space. Because 2015-2016, when we were seeing this exponential growth
27:09 and just this boom of the little sub-industry, people weren't focused on churn.
27:16 They were focused on, "I can get a customer for $4. I don't care if they leave." And obviously,
27:22 now with the exponential growth, --not really... There's still growth, but it's just not the same anymore.-- this little sub-industry, the market has gone back to a little bit more
27:33 of reality. You know, paying attention to churn is huge. So I think, it boils down to a couple of things. One, --and this is for all of our brands--
27:40 we're not just putting items in the box. There's so much more to that. It's about the customer experience. And that's important. Yeah.
27:48 Obviously, the products matter and putting high-quality products that have value in there
27:54 but the experience phase is very important, too in creating a community for each brand.
28:00 Just engage super fan customers, treating them as if they're family. And that's our
28:06 mantra in how we view our customers for all brands. So that's very, very, very, key.
28:13 The other pieces, the more math side... So, there's churn but a chunk of churn is also
28:21 passive churn. So, you can do everything right but you lose these people because the credit
28:28 card on file didn't work and the automated email that we sent went to a spam folder and
28:34 they just don't even know--and out of sight out of mind-- they forgot about it.
28:39 So it's actually been a big focus first, last quarter and this quarter. So for Battlbox,
28:45 --I'll toot my horn in a little bit-- we have our total churn right at 4%. Which typically
28:53 in the sub box industry, everybody's around --the good brands-- are typically around 10%
29:00 to 12% If you're under 10%, you're doing something really, really well. So the way we got down to it was one, making sure that it wasn't just a great product but
29:12 we're also giving the customers a great experience and they're part of this community. But the
29:17 flip side is, we put some automation in place. I know you chatted with Kristen --earlier this month-- from Churn Busters. We implemented
29:29 their product. We have certain parts of that journey with Churn Buster where it kicks that
29:36 additional ticket off to our customer service team so they can take a look and see if actual
29:42 phone call reach out makes sense or a text or maybe perhaps another email.
29:48 On the math, breaking it down, there's the churn because we did something that made them
29:56 want to leave and then breaking it off into the passive churn as well and attacking both of them at the same time was really beneficial and kind of helped us get the number down
30:07 like it needed to be. Awesome. That was great advice. And I'm glad to see that Churn Busters is out there in
30:13 the world working for people. Yeah, no. We're very, very pleased with them so far.
30:19 Awesome. Well, is there anything else that you'd like to share with the audience before you go today? Yeah, Chase. It's one thing that... It's probably a takeaway and I think those are very, very
John’s takeaway for a multi-platform strategy
30:31 important. Going back to... We're talking about the diversification of lead sources.
30:37 So you know, our average demographic for Battlbox is 24 to 44 (years old) and we don't...
30:45 So with that age group the amount of users that are on Snapchat, for example, are not
30:51 very high because typically, there's not a lot of 30-year-olds and 40-year-olds on there.
30:57 So when we were trying to find all these lead sources, we tried everything. We tried Snapchat
31:02 and it wasn't performing well. Big surprises. The age dem is just not there. But what we
31:08 found was --and Snap is actually part of the six sources we use right now-- but we don't
31:16 use it in a traditional prospecting like you would on Google ads or Facebook.
31:21 We had the Pixel placed on our site and we use Snap purely for retargeting. So it's just
31:27 another... It's just part of that multi-platform touch that gets the customer towards actually
31:36 purchasing. So the takeaway is, if you're not having luck on a certain platform, you can always attempt that platform maybe just for retargeting and
31:45 re-prospecting, purely just as another touch to try to get that, that prospect over the
31:51 hump and to buy. Awesome, thank you so much for coming on the show today and sharing all these insights.
31:56 I, absolutely, will have you back next year. Chase, thanks so much for having me, man. I really enjoyed it.
32:04 I cannot thank our guests enough for coming on the show and sharing their journey and knowledge with us today. We've got a lot to think about and potentially add to our businesses.
32:13 Links and more information will be available in the show notes as well. If anything in this podcast resonated with you and your business, feel free to reach
32:20 out and learn more at electriceye.io/connect. Also, make sure you subscribe and leave an
32:26 amazing review. Thank you!
