Episode 280 / Tom Boxall / Naked Wines / Performance Marketing Manager
Cracking Customer Codes & Understanding Incrementality
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Most businesses already know that understanding the customer is key to success. But they’re only barely scratching the surface, according to Tom Boxall, the Performance Marketing Manager at Naked Wines. His shiny new object is incrementality, and he scrutinises sources of information keenly to get to the true performance drivers for his marketing endeavours.
"I've always loved finding out the numbers behind why a piece of creative or branding has worked, so letting the data paint the picture, so to speak," he explains. This passion has led him to explore the intricacies of customer segmentation, CRM, and growth marketing, ultimately shaping his approach to performance marketing.
To uncover the deeper insights, Tom employs a multifaceted approach, including post-purchase surveys, Trustpilot reviews, and customer segmentation. Customers, targets, and products all change - which is why marketers need to keep looking for insights. And a new sources is “creative for targeting.”
Tom's belief in the power of creative as a targeting mechanism has been tested with Naked Wines’ scaling of paid social ads: “We've been working tirelessly to build paid social from one of the least invested channels in the business to one of the largest paid channels. And that is no mean feat, and that comes through rigorous creative testing, creative velocity, creative diversity.”
It may sound daunting, but “you probably need to be testing and launching way, way more than you ever thought. You know, 30, 40, 50 creatives a week."
Tom's shiny new object is incrementality: "Essentially, it's finding out which channel is working the hardest, where should we be investing our media spend, and what is driving the most conversions that wouldn't have happened anyway." To achieve this, he uses geo lift tests, mixed media modelling, and multi-touch attribution tools.
Learn more on the podcast.
Transcript
The following gives you a good idea of what was said, but it’s not 100% accurate.
Tom Boxall 0:00
Truly understanding what's moving the needle and where you should take that next is the next big question.
Speaker 0:06
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Tom Ollerton 0:46
Hello and welcome to the shiny new object podcast. My name is Tom Ollerton. I'm the founder of automated creative, the creative effectiveness ad tech platform. And this is a weekly podcast where I get to interview one of our industry's leaders. And it's an absolute pleasure and a privilege to be able to do that and learn each week. And this week is absolutely no different. I'm on a call with Tom Boxall, who is performance marketing manager at Naked Wines. So Tom, for anyone who doesn't know who you are and what you do, could you give the audience a bit of background?
Tom Boxall 1:18
Of course, firstly, thank you so much for having me, absolute pleasure. I've always surrounded myself with food, wine. I think it's one of the greatest things you can do in life. I truly believe that all good things happen around a dinner table, and so that's where I've kind of better fitted myself in, into an industry. It's one I truly believe in. But professionally, I like to always say I've kind of trod the path between data and design. So whether that's from a young age, studying both art and maths or English and business at uni, I've always loved finding out the numbers behind why a piece of creative or branding has worked, so letting the data paint the picture, so to speak. And I guess I realized these intricacies coming into marketing through CRM. At my first role was even younger, young CRM exec, working hands on with data, customer segmentation, building out flows, intricate ways of measuring performance, but ultimately designing creative and messaging across multiple channels that speaks to the right audience at the right time, and from there, this naturally led me into growth marketing. So I've since worked with small startups on building their growth strategy where the MO is, grow, grow, grow, what, no matter what the cost to now working at Naked Wines and tying together our creative strategy and performance marketing.
Tom Ollerton 2:54
Tom, no one has started this podcast by saying, I like to put myself in the center of food and wine and what an intro you sound like an automated creative person. That's quite funny. So let's get into it. So in that career, what has been the best investment of your own money, your own time, or your own energy?
Tom Boxall 3:17
I think, put simply, is to understand the customer. Now that can be a very easy thing to say. It's quite a common thing to say, but most businesses have only scratched the surface. Most companies know what the product or service they are selling is. They know what the benefits are. They know how they intend their ideal customer to use it. But not many truly know why the customer bought, and particularly in high growth startups or any business for it's maybe high performing growth function and fast moving, it becomes very, very easy to chase growth at any cost, or, you know, Chase growth because the row assets are good in that channel. The trouble is, your customers change your target demo changes. Your product may change, you know, bottom of funnel, creative may become more expensive, more competitive, and do you therefore still know who that customer is. I think, in the world of performance marketing in particular, it's moved away from the bespoke targeting and intricate campaign structures that there once were. You know, you can no longer contact or you can no longer target, 40 year olds called Diane who live in a cul de sac in North London, who have a dog, or in middle, you know, middle income, that world is completely gone, that will continue to trend in that direction. And that's where I believe, and where my world kind of collides with it is where creative becomes new targeting. Now creative as for new targeting. That's a phrase which you've probably heard everywhere. You may have even heard your meta rep spout it, and I apologize to my meta rep if he's listening, but I tend not to believe any bullshit they say. But this is one line which I do truly believe, and I've seen work. You know, if you are taking any product or any anything that you sell, people will be buying it for different reasons. You know, let using wine as an example for Naked Wines. We know that you know yourself. Tom, you might buy wine for one reason, which is different to the way I buy wine. Someone might buy for the, you know, fancy label, because it's got a chateau on the front. Another might buy, you know, only Malbec, because that's all they ever drink and that's all they ever trust. You know, it's comfortable for them. And others might like to try something new. So how are you appealing to all of these customers? What is that buying behavior that your customers do? What is the funnel and journey that they go on to decide to purchase?
Tom Ollerton 6:21
So the best investment of your time has been to really understand this customer. So how do you do that? What's your process for making sure that you are understanding them and marketing to people who have completely different uses or focuses on buying something like wine?
Tom Boxall 6:36
Yeah, there's a few, few ways, from the ground up you can be building out post purchase surveys into your product, into your customer flow, understanding your Trust pilot pulling that, extracting all the data, and very easy ways to pull out your trust, pilot reviews and sort them by the word count. That's kind of an interesting way of looking at it. But if you sort by the highest word count, you often find the largest story, the biggest piece of information or nugget to unpack, and they really start to go into that story of, why did I buy I bought this because X. And then there's kind of deeper customer level research as well, so understanding what your core demographic is, your key profiles, and going back to my early days of CRM, we were actually building out these key profiles and customer segmentation and appending those on to each and every customer ID, so that from there, we could identify The types of products or venues or where they shop, what they interact with, what are their motivations, their likes, dislikes, behaviors, and from there, you then build in, okay, well, how does our product solve a solution for them, and that will give you a better understanding of how to target them, how to speak in their language, where you even are communicating what channel and what interactions you have.
Tom Ollerton 8:04
So if I was going to push you on one singular bit of advice that you would give other data driven marketers to be better at it, what would that be?
Tom Boxall 8:13
Think one of the biggest learnings I've had kind of growing up in this industry, growing up around data, is simply to back yourself and then go and test so you know, there's so many ideas and new theories running around, and you will only ever know what works for your business if you go out and test it. But in order for you to go and test that, you need to pitch the idea and get buy in, often from from key stakeholders, and that can be quite a kind of looming task to do. So, you need to find a way to tell the story within the data. I did a course years ago with Salford University called Beyond data analytics, and it was great fun, two, three day course, part of the time was kind of mucking about playing with blue tack and props and different charts to try tell a story from just one sheet of data. And what that gave me is a real perspective of, how can I pitch this new found, let's call it a shiny object. How can I pitch this to the CEO, the CFO, the board, or, you know, whoever you're trying to impress. What data or what goal will they respond to? And how can I align this task or this gut instinct to that? So if their goal is bottom line revenue, how will the test that I'm working on get them there? And that simply is the best way to pitch an idea. And. A lot of that comes from being personable, or, you know, digging into what they want to see, asking the right questions, getting to know their gripes. And that often comes with confidence, but if you are able to back yourself and ask those right questions, and, you know, engage with someone on a human level, find out what what's their difficulty, what's their barrier? Right now, you're halfway there. Once you pitch the idea, simply go and test it. And as we know, with testing, the winner may not always be the one that you expected, but you've made a step forward, you've learned, and you can go from there.
Tom Ollerton 10:45
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So your shiny new object is incrementality. So not everyone listening to this podcast can understand what you and I might mean by that. So why is incrementality your shiny new object? And give us a quick introduction to the topic, of course.
Tom Boxall 11:39
So it's quite a recent one. It's almost like a hot topic in particularly growth marketing right now. Essentially, it's finding out which channel is working the hardest, where should we be investing our media spend, and what is driving the most conversions that wouldn't have happened anyway. Simply put, you know a channel could be performing well, you could be seeing incredibly high ROAs. But how do you know that this is not chasing people who were about to buy anyway, or even existing repeat customers, rather than finding net new incremental audiences? And what incrementality does is it allows us to truly know where we should be investing, where we can grow, and where we are wasting dollars. And so the next question will clearly be, how do you find this? Now the answer can be found through geo lift tests, mixed media modeling and multi touch attribution tools. If any of the big tools and providers are listening, then feel free to sponsor me. But I'll give you an I'll give you an example of how this has impacted us. So for the last two years at Naked Wines, we've been working tirelessly to build paid social from one of the least invested channels in the business to one of the largest paid channels. And that is no mean feat, and that comes through rigorous creative testing, creative velocity, creative diversity for anyone out there in paid social you know, my hat goes off to you, and it sounds daunting, but you probably need to be testing and launching way, way more than you ever thought. You know, 30, 40, 50 creatives a week. The more shots at goal you have, the more learnings you get, and the greater chance of finding a new champion creative you'll have. And if that's really daunting, I've got quite a good way of understanding what is incremental and what is quite a good test for you to do in your paid social ad accounts. So I encourage you to pull your meta spend by individual creatives for the last 90 180 you know, days a year. And if you have iterations on the same creative group, these by their naming convention too, and from there, build out a cumulative distribution function to understand what total percentage share of ad spend was behind each and every ad, and you will be shocked to see how the performance and scalability of your ad account hinges on just a few champion creatives. So for example, in one market, in the last six months, we launched over 200 ads, just 10 of those were responsible for 80% of the spend. Just five of those ads counted for over 50% and just three of those ads counted for nearly 40% so that's pretty scary stuff, and that is how kind of pivot. For your paid social accounts can be and how much of it hinges on good creative performance. Now I tell that story because that is how we got to scaling meta to where it is now. But the trouble with scaling paid social to be one of the highest performing and most invested channels is we were working with assumed numbers. You know, we were assuming the quality of customers coming in based on a benchmark. Perhaps we were using, and you might do this too. Perhaps you're using predictive LTVs. You know, AI has got so good but we can't yet see five years into the future. So we're using predictive LTV models to work out our forecasting. And, you know, go from that stage top down to what does the next year look like? Maybe ROASes are even difficult to see. Perhaps you're a subscription brand and you know, ROAs, or you know, what it says in meta doesn't always add up to your to your bottom line. Or, you know, perhaps your How does your paid social channel sit within a full funnel mix? So what we did to identify the incrementality of our channels is run a geo lift test, which excludes a percentage of the market based on their buying behaviors, based on their kind of type of demo that they are. And the results that came back were truly staggering. And the truth was that it meant that our CAC on paid social was actually a third of what we originally thought it was. So incrementally, I now know that what the channels are that are working for us, what the channels are that aren't working for us, and that enables us to scale at a much, much faster pace than we ever thought was possible.
Tom Ollerton 16:58
So there is a lot there. Thank you for sharing the very specific examples and the numbers as much as you could. So to play that back to you, you're taking a channel and then you're doing a showing one audience ad and a another Geo. You're not showing them the ads, and then you're working out the the relative difference between the two in terms of performance. I mean, that sounds incredibly straightforward, so what? What makes this complicated? Why can't Why isn't everyone doing that?
Tom Boxall 17:24
Well, it's, yeah, it's a it's a very good point. You know you need, you need some tools to help do it, or you may need some, some geeks, to work out the numbers of who's who and what does a market look like, or where matches up where. But in principle, yes, you are excluding one part of of your target market, and you are understanding whether what's the difference in their behavior now that your channel has been excluded from them. And this can happen on any channel, paid social is one example. You know, I would implore you to run the test across all channels where possible. So you know, one area, one select group of counties, may not be receiving, you know, parcel or DM, or you know, you might put the exclusions at account level on your paid social but essentially, you then understand, and you monitor what is the behavior of that audience that have been excluded from your marketing versus a baseline of everyone else. And if you start to see that actually that audience, you know we were previously shifting X million dollars into into this region, on on X channel, and that audience is still buying from us, then that channel isn't incremental. That channel isn't doing anything, those people would have bought anyway, regardless if you spent the money on that, on that region or not, and in other places, you may then find that, you know, actually this channel is really moving the needle. It's really getting people to buy. And it's not just targeting existing customers, repeat customers, people who would have bought anyway.
Tom Ollerton 19:22
So now let's talk about MMM, MTA. Like, are you less favorable of those because they're a bit slower? Or help me understand how, how you balance that the geo exclusion approach with those two disciplines?
Tom Boxall 19:40
I'm a big fan of both. I'm a big fan of all three, and I think they all need to be working in tandem with another. They each paint part of the picture. So for example, MTA will start telling you, you know, where the customers saw your saw your ads or your marketing material. How did they engage with them? It might tell you that where meta says this person clicked within seven days, actually, MTA will start to tell you, okay, they may have seen this ad, but they didn't do anything. They then saw another ad on their desktop. Maybe they went on YouTube and they watched, you know, an ad on there. Seven days have passed, so you're now outside of Meta's attribution window. Perhaps they Googled you and browsed your website, but then didn't make a purchase. And then, you know, maybe they then, after all that, received a flyer in through their letterbox and used the voucher code on there, and then in the back end, your data is saying, well, that direct mail with the voucher code that they got through the post should get all of the credit. And that is just simply not true, because you've done, you know, you've invested in paid social, YouTube, maybe connected TV, all these other channels which now aren't getting any credit. And therefore, you know, come around the next financial year and you're planning your budgets, you're going to be investing in the wrong places when, actual fact, what really, truly motivated them were the several ads before. So I'm a big believer in MTA, and then then you start to paint that picture and projection looking forward. So because I invested in these channels, what might that therefore mean based on machine learning, based on AI, based on previous customer behaviors, what is this going to tell me, and how can I predict what is the best mix of investment across multiple channels? Now, geo lift tests should just be running underneath all of this. Geo lift tests will give you those hard baseline facts of this is causing X incremental conversions that wouldn't have happened anyway in this particular market. And they can happen on a regular cadence. They can happen, you know, across different channels, at different times. And what you're doing essentially stress testing your theories on who is interacting with what and what's really working.
Tom Ollerton 22:23
So, so what's missing for you right now? So a really succinct and lovely breakdown of the benefits and the how tos of three different ways of making sure that your money's going the right way. Like, what is the missing bit for you? Where are you like, Ah, if only I knew this?
Tom Boxall 22:41
It's good question. I think laying out the benefits of each you start to see how they can interact, but often they can give you more questions than answers, and to truly understand where that you should be, then forecasting and how and when and when will, you know, intent ramp up. When will orders pick up? What will CPMs look like? You know, we're talking now in the middle of US elections and all sorts. Black Friday, peak, Cyber Monday, etc, Christmas. You know that seasonality is always going to be a big question when you are doing your forecasting, and these tools will only get you so far with that. What they can give you is, how much, how much do I trust that this channel is performing to its best ability, and therefore give you confidence in where you should be investing next? But joining those dots, that's always going to be down to us as digital marketers, as growth marketers, so truly understanding what's moving the needle and where you should take that next is the next big question.
Tom, unfortunately, we've got to leave it there with a profound question. So if anyone wants to get in touch with you about anything we've talked about today, where would be a good place to do that, and what makes a message that you'll actually reply to?
The best place will be LinkedIn, yeah. LinkedIn. Tom Boxall, I mean, my what we've just talked about for half an hour, I guess, is what would make a good message? You know, truly understanding your customer, right? So if you know, I will always, always do my best to respond. And if the message is particularly targeted to me and of interest in speaking my language, then, then that's the that's the best route for that. But, yeah. Thank you.
Tom Ollerton 25:00
Brilliant Tom, thanks for your time.
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