Broken Cupcakes, the $139 billion fake and Hercule Poirot (almost)

Welcome to Throb, The Reality of Business podcast. Real business chat from real people without the shiny veneer of gurus anywhere near it.

With your hosts Bertie Cordingly and Paul Chapman and maybe some guests along the route, we'll talk about our experiences of running a business, helping others run a business and sharing real stories based on real experience. Thanks. Hello, Paul Chapman. Beat Doggy Dog, how are you? Oh, I need to change my chair because it creaks. He needs to change his chair because it creaks. We always say we're going to cut this bit out. This is the gold. Got his feet up. What do you call this thing? What would you call it? The first word that came out was poof. Right, yeah. You put your foot in the poof. That was like a rock back to my kid. A footstool?

I said for the purpose of the tape, I'm just referencing something that I've put to rest my weary legs on. Lovely chap. Yeah, buffet, buffet, buffet. I think it used to get called an hour out. I think it has just a load of food on the table, mate. I do love a good buffet. My concern is that Covid has killed the buffet. I don't know. I'm sure I've had, well, I don't know. I've definitely had some really good buffets recently. I'm sure you have.

Why do you have to turn everything into something? I think you call it boffing. I don't even know what that word means.

Anyway, anyway, do you know what? So you laughing, do you know what your laugh reminds me of?

I don't want to know this.

I was going to say just laugh again, but I don't know yet. So you know on Back to the Future?

Yes.

You know George McFly?

Yes.

Yes. It's very, your laugh is very George McFly.

That is exceptional knowledge of a film that you know what, like a minor character's laugh sounds like.

Well, no, just watch it. I think any Back to the Future fan will probably know exactly what I'm talking about. So we're here again. So what have you been up to today?

I just had a breakfast with a friend of mine and that was about it. Now I'm here and we are recording the Throb podcast. The reality of business. Here is the reality of business.

We are. I like how you turn that into a nice little advertisement for the podcast that the people are listening to. But anyway, very well. Anyway, why don't you ask me what I've done?

No, you're all right, thanks. Okay, well anyway. Wait, what have you done? What have you spent this morning doing, my friend?

I have been shopping. Oh. Yeah, I've done the big shop today. So, well actually it wasn't that big, I just needed a few items. So just a shop then? Just a shop. But yeah, I went into one of the larger supermarkets. They had loads of offers. So I've spent, I literally went in to get one item.

Yes.

One item and I've come out probably about 200 quid lighter. Brilliant. From there. But yeah, one of the lower cost items, interestingly, that I bought there was, I spent today £10 on a tube of toothpaste. Good.

Is it gold plated?

Gold leaf toothpaste? And the reason I spent £10 on it is because it was reduced from £20. So I bought some, yeah, I know.

You can buy toothpaste at £20?

Apparently so. I've never seen £20 toothpaste, but I thought, well, yeah, I've got a few like stains and I'm having, I've mentioned before, I'm having this tooth change next week. What are you having put in? What? Well, just a different tooth. Oh, okay. But there's a period where I don't have a tooth and they just replace it with an opal fruit or something. I don't know if I stick it in there. Like it's everyone. A mento. Don't drink any coke. Yeah, so I'll be hiding out. Yeah, there's a period throughout November or December where I'll be hiding and I'm not telling anyone when that period is because I'm far too vain to show my face with that temporary tooth.

I imagine that will coincide with you not being on Instagram.

It probably will, yes. Top secret.

You're like a spy.

Anyway, so yeah, and it just made me think that, yeah, I wouldn't normally spend that much. Like if I saw a toothpaste for 10 quid, there's no way I would buy it. But, you know, my perception is, oh, I'm saving £10 on the toothpaste. So I bought it, I had a look at it, I thought, well, I'll give this a go, see what happens.

It sort of ties into what's happening at the moment in terms of, you know, wherever we're recording this sort of mid-November, it's Black Friday time. Well, it's Thursday 18th, November. It is. Which I believe makes tomorrow Black Friday.

No, Black Friday's next week. Okay.

Well, anyway, look, Black, Black, Black. There was a lot.

Last Friday of November, isn't it?

Although it gets earlier and earlier, it is, didn't it? Yeah, Black Friday is coming up and it is.

That's because of Friday, the date changes. Yeah. That's why. Brilliant. So it'll get a bit earlier, then it'll go later again. Yeah.

I think it's, anyway.

That's how months and years work. It's never on the same deck. Really? Sorry, carry on.

No, I don't want to carry on.

You had something in for it. You do it. Okay. So we're talking, so yesterday was Singles Day, wasn't it? It wasn't. No. Was it not? No. All right then. Well, you do it then.

Right.

So, well, we are in and around Black Friday. We are. It is sort of coming up there. And I think, you know, it is a thing that gets talked about in businesses a lot in terms of, effectively, let's wrap it up in, should you discount, should you not, et cetera, et cetera, et cetera. And I think, you know, with what's going on at the moment, we've got some other stuff to talk about with that. But, you know, in this kind of thing, let's talk that. And so, you know, where do you stand on this? Where is your positioning on, should you discount? Should you discount?

So I've already had a very strong position on it, certainly with online stuff. And that's that you shouldn't. However, my view is now changing. I think, so actually, let's rewind. I think discounts are overused and I don't think they're used correctly. So as a rule, because I don't really fully understand it that much, I just generally personally avoid them. However, that is something that I'm now changing my view on and learning a lot more about how they can be used effectively. I think discounts are used incorrectly and can be extremely damaging. So I've seen discounts used incorrectly and destroy a business, as in this business can't then operate ever again.

You saw that with Groupon. I mean, when Groupon's not that old, is it? I seem to remember having this conversation in a previous life at, what, 10, 15 years ago, Groupon, because it sunk a few businesses, didn't it? I think there was a famously a cupcake business or something like that.

And that's exactly the example I was going to use.

Yeah.

So thinking back, so going back, this is probably 10 years ago, maybe, if that, around that time. For the consumer, it was just amazing, right? Like, you'd buy these vouchers for, I don't know, like 20 quid, but you got like 75% off, like crazy, crazy discounts for restaurants. And yeah, I was just a Groupon haul when it first came out. I was going around loads and loads of different places. And you'd eat out for a meal for two for like four quid or something. Yeah, it was amazing.

But I don't think there's a single one of those restaurants that ever went in, sorry, that I went into that are still there now. And actually then being in that industry, being in like, you know, restaurants and takeaway, actually talking to the owners, things like that, it was killing them because they would do these huge, huge discounts, not make any money off them because the Groupon model, I think, you know, was you would give, say you had to give at least 50% off your menu anyway. But then they would take 50% of that in revenue. So you'd end up with a teeny tiny percentage and people were doing it because on the promise that they would go back. And I'm sure some people did, but the amount of money that they lost and then because you are then perceiving that place to be cheap because it's discounted, like I never went back to those places again. Because it's like, you know, in my head, it's like I've paid, why would I pay 100 quid for a meal when I've just paid 20? It's like it completely, I think in those instances, it can be really damaging and very difficult to get out of. Yeah. And I think you're right.

I think a problem with discounts is that it attracts people looking for discounts rather than looking for what it is that you do. And I think, you know, there is that side of it. You know, discounts can be very useful. You take that situation there. What's gone wrong there is that the restaurant, whatever it is, has not captured your details and then use them.

Exactly.

That's what's going to, you know, there's nothing wrong with that. You know, there's, I'm sure there are plenty of businesses actually, Groupon changed it forever, but in a positive sense. And actually it had traffic. It drove a lot of people to you. You know, I hope clearly not. I hope people have actually done their maths before and think, well, okay, if we're giving away, so we are, I don't know, we are now just operating at cost, but this is a play to get. This is a play to get more people back in. And actually what I'm guessing you didn't have is loads of people capturing your details and saying, hey Bertie, we loved having you in there. Here's what we normally do. Here's how it looks. Here's what I'm going to invite you out. Which is, it is the right thing to do. But there is also that problem that quite often people just want discounts and discount hunters will look for stuff and there is nothing that you can do that will make them pay full price. Because I don't need to. And actually kind of, you know, I mean, is Groupon still a thing? I think so.

I mean, I can't remember the last time that I used it. I was using it for like Christmas presents at one point because I'm always a last minute Christmas present buyer. So it was like, we feel special. Not got. Hey kids, we'll get them a Groupon.

Here's 25% off kitchen roll.

Thanks dad.

So, you know, it probably is a thing. I can't remember the last time that I used it. Um, but yeah, you could get, I mean, you know, the, the model for consumers is great. Like you can get some, you could at the time get some great deals. Like it just felt like I was always eating out on Groupon. But as you say, I was probably a discount hunter at the time and would just like, why would I go back to that restaurant when there's another 20 restaurants on Groupon that it's just like, well, actually I'll go and try somewhere else. Like it was amazing. Yeah.

And I think, you know, discount for me, this comes under, give people a reason to spend. You know, this is, this is all, this is all kind of discount. It is give people a reason. There has to be a reason for people to come to you as opposed to someone else. Yeah. You know, and that's really what we're saying. And I think, you know, that's why, you know, I have, I have no issue with discounts. You know, it, a discount, you know, particularly through something like Groupon, but anyone, you know, look at that as a third party. You and I have spoken on this before. Every customer you ever need is already on someone else's list. How can I get the attention of that person? Get them to me. You know, discount is perfect for that. And actually you do the, doing the Groupon thing. If you're, if I can, if you're doing it properly, and again, no one does. If you do it properly, it can be a massive valuable thing. You've got access to it, but it's, you know, this is just, this is just give people a reason to buy. And this is, this is all Black Friday is. Black Friday is just giving someone a reason to buy. And I think, you know, people are, people are busy. People are kind of forgetful. People are not only dealing with the purchase of your product. They have life going on, which is why things like remarketing and retargeting is so massively valuable. But this is about giving people a discount, giving people a reason to buy. You know, you look at, you know, a few years back, I wrote a book, me and my ex-business partner, we wrote a book. I was very, very clear that I wanted this book to be a bestseller. Yeah.

And actually, I think it was a bestseller.

It was a bestseller. Yeah. But actually, I don't sound funny here. That's really easy to do. It's because there's a process behind what you're actually doing here. So actually, all we did was, in fact, do you know what? It was about, it might've been five years ago today that it hit the top of the charts. Anyway, it doesn't matter.

Five years ago today. I don't know.

Maybe, maybe 2016, 2017. Doesn't matter. Don't remember. But actually, we gave, we wanted, to get a bestseller, you need to sell a lot in a short period of time. That's how kind of the charts are working, okay? So what we needed to do was make sure people bought in a window. Yeah. So we spent all our time. You know, the reason was there was a discount. I'm sure we discounted. There was a discount between this time and this time. So loads of lead up to it. Loads of lead up to it. Loads of lead up to it. Bang. Doors are open. And it's like, it's the stuff that American markets teach you forever. Yeah. Doors are open. Buy the book. Loads of volume. In a really short time. Shut the window. Go. And that's it. That's hence it became kind of a bestseller. And I think that's all things like Black Friday and everything else is. It's just giving people a reason to do it. And I think, you know, what people, as ever with this stuff, you look at the concept of what's happening and then try and work out what's behind it. And then how do I do it? You know, Black Friday, so many people make so much money from Black Friday. Every business can do it. That's not every business has to get involved in Black Friday. But every business give a reason. You know, maybe it is you, the owner's birthday. Maybe you've been in business for 20 years. You know, I had one guy ages ago and he launched a price rise. And it was brilliant. He just told people on this date, the prices are going to go up. And, you know, and in that time, you know, before that, he just got loads and loads and loads of business in. When it came, you know, when he had to draw and he did, he did the right thing. He, you know, put the line down and said, right now the prices are higher. But he had, you know, he went back and had a load of people and said, look, I know not all of you could get in before that. So what I'm going to do is I'm going to, you know, do for the next day because you couldn't get in. It's still a higher price, but I'll do it 50% of the difference. So let's say it was going 100 to 150. For those people, he did it at 125 quid. And it's just, it's ridiculous how you use a price rise to get more money in and how he launched it. But it's just give people a reason to buy. And that's all, that's all discounts. That's all Black Friday is. It is just, you know, people are waiting to do it because they know it's coming up. And it, it's just a reason. Does that make any sense? It did. Yeah.

It makes absolutely perfect sense. I think if you're going to discount, I think it's part of a much bigger strategy.

Yes.

And I think it's when it's done as a knee jerk, oh shit, it's Black Friday. We just need to discount everything. It's probably the wrong thing to do unless you already have those systems and processes in to capture and then reuse that data. And then, as you say, remarketing. You can give high value, low cost offers to try and get people through the door. I'm talking like our sort of industry that they're going to help people know, like, and trust you. So then you can sell them higher price things. I think that's a really good strategy for it. One of my earlier jobs when I used to work for people back in the day, back in the day, is when I first moved to London, I don't live in London now, obviously for the purpose of the tape, I'm in Nottingham. I lived in London for a couple of years and the job that got me down to London was, I went for a job in selfridges. I didn't actually know what job I was going for.

You incidentally don't sell fridges. They do. Do they not? Anyway. Really?

Probably, probably didn't. Yeah, probably never saw a fridge in there. There you go. Well, maybe there was one in the staff room.

Curries don't sell curries if it helps.

Don't mind laughing, that was terrible. Anyway, so in fact, funny story, right? So I went to, I went to a job interview in Selfridges. Excellent. And didn't actually know, so someone that I knew had got me like an interview. So I turned up for an interview and got a job, but actually I just turned up for the wrong interview for the wrong job, but still got that job. Excellent. So I was supposed to be going for an interview in menswear. So that's, that's what I was going to be doing, but I didn't. I got the job in the home department. So I was a towel folder. Oh, nice. In Selfridges. Nice. So that's, that's what I did for a while. So I worked in Selfridges and-

You moved to London to be a towel folder.

Well, not exactly. I didn't move to London to be a towel folder. I just became a towel folder. Right. Okay. Anyway, well, yeah, lots of stories I could tell about Selfridges. But anyway, one of the things that particular sort of stays in my mind is when the Christmas sale came, like obviously Selfridges department store, it's fucking crazy. Yeah. Sale time. Right. What like, but one of the things that really like surprised me is like, it was very little of the existing stock that actually went on sale. So all of the, the, the good stuff in, I've noticed this now in other stores, wasn't really being reduced or maybe it was, maybe it was like 10 or 20% or whatever, but all the real like 50 to 75% off stuff. I don't know where this stuff came from, but one day it wasn't there. And then the next day we had to clear the shelves and bring out all of this other stuff. Like we'd never seen it before. Like that's the heavily discounted stuff, but people, everyone was just, just swooping in and buying it. And the whole thing was a mess. So, you know, like I suppose that's a long-term strategy, isn't it? That's just like, Oh, it's Christmas. Let's just discount everything. That was their plan. Like, I don't know how long that stocks, where it existed before, but yeah, that's a good example of someone has thought that through and then that stuff was sold cheap. And then all the, the, the good stuff was still there for everyone's payable price again.

It's just, and the sales stuff will bring people in that, you know, you know, it's their own internal group on the, if you will, that brings people in and those people in the store, I bet some of them buy the non-sales stuff and it is, and it is, you know, all of this, it's just, yes, people can buy from you all the time, but everyone needs a reason. Everyone needs a nudge over the line. Everyone needs to be reminded that they want this thing. And again, it's like we said about remarketing. That's why it's so powerful is the fact that, you know, I'm ages ago. I mean, when it was kind of still quite a new thing, I mean, I were heading to Rome. I think I can't remember. I got halfway through the booking. I didn't book blah, blah, blah. Whatever reason. And the next day I'm being shown adverts that say, do you still want to go to Rome? Oh, actually, yes, I do. You know, it's like, back to Bill Tom. It's like that reminder. It's like that. You haven't bought. Do you want to do it? Just give people a reason. Get them back over the line. Get them, because, you know, the more they come into you, people are going to Selfridges sale every year. Yeah. It's a thing. They do. And because they can, you know, they are controlling, in inverted commas, they're controlling people's behaviour, because they know the sale, they know it's a premium place, sale is good, etc., etc. You know, the public kind of see that, think, well, okay, it's Selfridges, but there's a sale in somewhere that's nice, it's Selfridges, they'll have some good stuff. And it's just this kind of this bringing behaviour in. But it all sits under this banner of, like, people will buy 365, but if you can give them a reason to buy, you bring in a lot of sales in a short time.

Yeah.

You know, and there's millions of reasons about that. I mean, you look at Singles Day, I don't know if people know Singles Day, if you don't know Singles Day, Singles Day is, I think it was the 11th of November this year, and Singles Day is, in theory, the antithesis, is that it? It's anti-Valentine's Day. Yeah. It's very, very big in the Far East. It's a day, it is 24 hours. Have a guess how much money they made this year. So there's one company, Alibaba, how much money did they make in 24 hours? They absolutely rinsed it, didn't they? They do. They did. Alibaba, absolutely rinsed it. Have a guess.

As a guess, I would say 139 billion.

It was 139 billion. I feel you've stole my thunder there.

You're such a prick.

No one likes you. We spoke about this.

We spoke about this.

You must.

But anyway. But if you say to me, don't look at the notes. I'm going to look at the note. You might as well have just...

Wait, we've been doing this podcast now for eight months. You have never, ever looked at any notes before any of our podcast recordings.

You tell me to look at the notes.

This is why no one likes you.

You told me not to look at the notes. That's the first thing I'm going to do.

This is the reason why no one likes you. Anyway. So, 139 billion. That was a good guess, wasn't it? Billion. It's a very good guess.

139 billion.

For the purpose of the tape. Paul just flagged me off.

What does that mean? What? Flagged you off? Yeah.

It means stick your finger off.

Oh, I gave the finger. Yeah, I wasn't... Yeah.

Have you not heard flagged you off? I haven't. It doesn't matter. Anyway. Right.

139 billion in 24 hours. Yeah. I've done some maths. Right. It's not my forte. 5.8 billion an hour.

Right.

97 million a minute.

Yeah.

1.6 million per second. Alibaba were making 1.6 million dollars per second. And do you know what the best thing about this is? Yeah. What? I just assumed you were going to say almost no. I didn't mean... The best thing about this... So you've got to remember, you know, so Alibaba have made 139 billion in a day. Right. The best thing about this? Alibaba invented Singles Day. That's crazy. So they have just made up a fake day that has made 1.6 million dollars a second.

Well, that's amazing. Are you sure those numbers are correct? Go and Google.

Yeah, I did it last night. I mean, it's not yen. Dollars.

I mean, that seems like 139 billion dollars. Just from Alibaba? Yeah. In a day? I believe so. Google it. Go and Google it. Maybe I'm wrong. It just seems a lot. Yeah.

Well, and do you know what? I understand that I'm being... It is a lot. It is a lot. And I think... Look, one of the things to kind of talk about here, because I mean, people that don't know Alibaba, it's a bit like Amazon. And it's very, very big in the far east. Today, not everyone knows. But it is a... What they've done here is something that absolutely anybody can do. And it's really important we don't get lost in the figures of this. Because, you know, most of the businesses listening to this are going, I can't make 1.6 million dollars a second. I just can't. That's not the point. They have created a reason for people to buy on a specific day.

Yeah.

You know, what would happen if you managed to put a year's worth of income into a day, into a week? What if you've got a little weeks worth of income into a day? What does that do for your cash flow and that sort of thing? And all they've done, they've created a reason to buy. Now, every single business can do that. It can be a... You know, it's our birthday. We're doing this. We're offering 10% off. You know, it is... You know, we've been incorporated 15 years. So this is what we're doing. You know, there can be anything. There can be... You know, kind of you see them flash sales. You're giving... Now, flash sales are quite interesting. Because unless you are Alibaba or someone of that ilk, flash sales, I don't think, particularly work. Unless you've got a really good relationship with your list. Mm-hmm. And I think they actually... A flash sale only works if you tell someone there's going to be a flash sale. That whole kind of... There's 50% off now. For most businesses listening to this, I wonder how useful that is. Because I think with any of this stuff, you need to warm people up. You need to do what I did with the book. You need to have to say, hey, look. Yeah, book is launching. You know, next week. I think we had... Look, we've been really excited to show you. Keep an eye out. We're going to tell you all about it on the 10th at 10 or whatever it was. Da-da-da. And you walk them through. Like, you know, can't wait for the announcement tomorrow. Bang. Announcement. And then tell you, tell you, tell you. And then it's... And you kind of build all that in. But all of this stuff, it is... It needs to be done. It's like you said about discounts. It needs to be kind of part of, like, an overall strategy. And you need to kind of have it. But, you know, just doing a flash sale, I don't think is necessarily helpful. Unless you've got a really, really good, strong, engaged list. And again, you know, it's just looking at the tools that you do. You know, I think, you know, things like Instagram stories will probably work quite well for this. Email. Possibly less so. This whole thing just amazes me that they can make that much money in such a short time. But it only comes down to the fact that they are giving people a reason to buy at that point. Yeah.

I mean, I'm all up for, like, doing things, testing and stuff like that. Like, with discounts, they just make me nervous a little bit. Because I just see so many places get it wrong. And it can be super damaging. I think as part of a longer term, a bigger strategy, I think it absolutely can be something that everybody can utilise to some degree. But, yeah, just done incorrectly. I'll tell you someone who doesn't do it, or I don't think does it right. Maybe they've got better at this. Ocado. Okay. Okay. So I know someone who just used to rinse Ocado's discounts because he would order from there and get his 40% off. And then if he didn't order from Ocado for, I don't know what the period was, four months, then they would do it again. But they would just do that repeatedly forever. He only ever ordered from there to get the discount. Never used it at any of the time. He'd just wait. Yeah. So, you know, is that the right way of doing it? For some businesses, that could be crippling. But, you know, that's not necessarily. If people know when your discounts are going to come and if you're not, I don't know, maybe at 40%, they are making money on that. Yeah. So, okay.

Look, I mean, this is quite tricky then.

How do we help people? How should you use discounts? Discounts.

So I think discounts are a great. If you can. So let's look at the selfish example, right? If you can use something that is, you know, a high perceived value or high, you know, not necessarily high perceived value, but a lower cost to get people through the door. So that 75% sales was getting people through the door, but then they're in the store and they were buying other things. So if you've got something, if you can create something that you can give away or sell cheaper, that isn't necessarily using a lot of your time.

Yeah.

Or energy or effort, but it's still a high value to the consumer. Something maybe you can either mass produce or.

Okay.

Let's just say if you're a coach or a consultant, right? Maybe you could produce something like an online course.

Okay.

That could do maybe 20, 30, 40% of what you could do face to face, but then you can sell that at a cheaper rate. Gets people through the door. People are getting huge value for that offering.

Yeah.

But then when they watch that, they're like, okay, great. Action, do all that stuff. Do you know what? I fucking love this guy. Now I want to work with them. And then actually you can then lead them and upsell them onto the, maybe a one-to-one or a group coaching. You know, that is one example. And I think there's, there's probably lots of things that you could do, you know, in retail or, you know, with some sort of product, just something that's cheap to give to the door, but it doesn't devalue the higher offering that you're doing.

And, you know, that's, that's the, I think that's the danger. If you like, because if you are a coaching consultant, you start discounting your main core offering, like your main, you know, one-to-one, your time is limited.

Right.

So then suddenly if you sell all of those at a discounted price, then your time is finite. But if you're, if you're giving or selling something that isn't finite, like a course that's reusable, it doesn't matter how many, you know, whether you sell one or a hundred thousand, the work effort that you've put in is the same. So you're better off selling more at a lower cost because it doesn't devalue anything else you do. Yeah.

And I think it's tricky because devaluing, there is a point that you don't, there are lots of industries where it doesn't work. I think the way I see discounting, discounting is effectively, it's just another marketing cost. It's the same as me having to spend a hundred quid to get in a magazine and, you know, cause that can, you know, that's a chunk of your profit. Anyway, I think it's a different way of looking at, I think to go back a step in that, like how to make it work. But you have to be a multi, well, you don't have to be, you should, it is better if you are a multi purchase product.

Yeah.

You know, if there is just, you know, like it will be really difficult. And I think the wrong thing to do to discount if you are a estate agent where you're basically going to get one purchase, you might get two, but they're years apart. Yeah. Okay. So I think that that's a different way to do it. If it's, if it's, if that's what you're looking at and you want to do it, the, you know, there might be a value add option. So actually you're not doing that. You're going to add something extra for free and you can layer stuff on. So perhaps we'll talk about that in a bit, but I think, you know, it needs to be a multi purchase thing. So actually you can kind of get them in on the lower price and then do it. But again, you need to make sure there is a proper plan strategy, kind of set up in advance of discount to do that, talk people through it and kind of. Take them part of it, but it really comes down to understanding what is the lifetime value of a customer.

Exactly.

I was chatting with, with Leanne earlier about, uh, traffic and conversion summit in America and Ryan Dice. And, um, I spent a lot of time a few years ago in that world with people like Dan Kennedy and that sort of stuff going and learning off to San Diego. Great. Yeah. Really interesting. I mean, full of weirdos, like full of absolutely wackos, but, um, yeah, really interesting space to be. And a lot of those guys were basically affiliate marketers is kind of what they were, but they'd kind of, because they all sort of in that group, they'd all like kind of work with each other. And they were effectively just giving all the money from that first purchase to the person that referred, you know, and we're kind of going slightly off center here. But yeah, most people, if they're doing like a referral, we'll give you 10%. Like it's really hard to get interested about 10%. But when you've got all that money, I know, you know, if you're going to give me, you know, you're selling a hundred pound course and I get a hundred quid of that for every person I send you away that buys. Well, actually maybe it's worth me sending you 50 people and me working hard to do that. Cause that way I don't have to do anything other than have a relationship. People say, Hey, Bertie's really good at this.

Yeah.

You know, but that only works if you understand the lifetime value of you having a customer. Yeah. Yeah. And you, and I don't, I don't think people think about this. No, they don't.

And like, like, you know, this is, I mean, I'll do like lifetime value customer work with, you know, clients, especially sort of in startups when they're trying to use paid advertising, right. To get customers through the door. Let me give you an example. So, you know, going back to, as you know, like, you know, an online takeaway, fillmybelly.com. The commission that we made on an order was 10%. It was always 10%. That's didn't matter how many restaurants they had, who we're working with. It was 10% of the order. The average order of takeaway back then was 16 pound.

Okay.

So one pound 60, you know, that's, that's what we had to play with. Now AdWords actually, fortunately was a lot cheaper back then, but even if we, we, we were paying two or three pound per ad to get that person through the door, we knew the lifetime value of the customer wasn't just one order. You know, it was, there was order from us every month for two years. It's at least, you know, that's so, it's a, it's a higher value. So we were paying, we were losing money on acquiring those customers for certain keywords. However, we knew that the lifetime value of the customer was higher. And it's important to do those maths because we could have quite easily, like if you looked at that from a very linear perspective, it's like, whoa, hang on. Well, we're losing money on words because for that, every customer's cost me one pound 40. Exactly. But it's not a bit, yeah, it's not, it's the lifetime value that you're looking at. And of course, not all of those customers are going to come back. And this is where you've really got to be on top of your numbers and analyze your data and figure out all of this stuff. And, you know, it's, it's not an easy thing to do, but if it's not something you've ever done, just start recording some stuff and you'll start to see patterns in that number. Anyway, this is a whole separate, yeah, conversation, I suppose, if we start getting into those, those, those details. But yeah, understanding how long those customers are going to be with you is really, really important. And, you know, we knew that if we got a customer two or three times and that was it, that our job was done.

Yeah.

Because, you know, once they've ordered the third time, they were like 60% more likely to order a fourth time. And then we don't have to worry. They're, they're through the door. They're, they've built those habits. And the interesting thing with customer loyalty is that it's quite hard, but it's, it's just as hard sometimes to lose a customer as it is to get one. As in, you've really got to do something to piss them off because people are in just the habit of doing it.

So I think, you know, having that, that's the great thing with e-commerce. You can, you can spend more money getting people through the door. And that's probably what the case with Alibaba, right? Like they've just done all of that, you know, marketing to get people through the door. But now all of those new customers and some will be existing. They've got their email address. They can then be sending the new offers. They can target them from the stuff they've bought. So, you know, that's it. And obviously they've just made all that 139 billion as well, which I did was Googling as you were talking. And I couldn't find anything to, to disprove your words.

Maybe it was 12 pound 16. Yeah. Yeah. But you are, you need, you need to model this. You need to go into it kind of seriously.

Yeah.

And I think, you know, if you are going to do it, you need to do it properly. Like, you know, kind of, you know, what's the point of a discount? The point of a discount is to get someone to change their behavior.

Yeah.

You know, from buying from someone else or buying the product for the first time. You know, the whole point is to, because if that was already the behavior, you don't need the discount.

Yeah.

And therefore, when you do a discount, it's got to be meaty. Like someone tried to entice me the other day with 5% of something. And I'm like, no, and I get it. And it's, I do, you know, and I get it because, you know, cash and cash is always king. You don't want to cut it away. And again, this is someone that's clearly doing this, that has never thought about lifetime value, has never modeled it, doesn't know the numbers. But, you know, regardless of the product, I mean, I don't know, maybe for a house, but regardless of the product, has anybody ever got excited about 5%? No. They just haven't.

No, it's not.

And, you know, has anyone got, you know, because, you know, and if you absolutely have to do tiny margin like that, for God's sake, just turn it into cash.

Yeah.

Tell someone it's 20 quid off or, you know, even like 5 quid off because people can understand 5 quid, 5% they don't really understand. And it's just, it's not going to get them excited. You have to do something that changes behavior. And 5% is not going to do it. Now, I'm not saying you have to give away, you know, and this is why, you know, that, you know, when you see big discounts, you know, because it has to be at full price somewhere else, doesn't it? Which is why there are, you know, probably shops up in the Cilly Isles, kind of population four, where this toothbrush has indeed been on sale for £900. And they can then show that it's been on sale somewhere live for £900, and then they can put it in their supermarket at £1 and say, look, yeah, I can't do the maths, whatever it is. But it is, you know, it is, it has to be thought about because, you know, 5%, it's not going to cut it. It's not going to make people act.

It's not, I see this with like, especially smaller businesses, you can see they've not thought it through. I mean, it winds me up, but, you know, I suppose, you know, they just don't, they just don't understand or no one's ever sat down and explained it. I suppose what frustrated me is I was always trying to explain it to them, you know, going back to like, you know, selling to small businesses, selling to takeaways, and then, you know, coffee shops and other sort of industries and stuff that I've been into. And it's that mindset when you're trying to get someone to actually give a proper, well thought out discount or a loyalty scheme to try and get people to come back. And it's like, they just don't see it. It's like, so, you know, okay, right, well, we'll do a 10% discount if someone's been in 10%, you know, the stamp card thing. And it's like, that's fucking useless. Like, who's like, who wants 10%, like, they just don't. It just, people just don't think like that. And they see it as like, yeah, but if on that 10th visit, if we give it, if we're giving 50% of our coffee, we're losing money on that. And it's like, seriously.

They've had to have nine other coffees with you as opposed to someone else.

And they don't just come in and buy coffee, do they? They come in and buy cake and they'll buy like a little chocolate croissant or, you know, like it's, it's, you've got to look at the bigger picture. So with discounts, here's, here's the thing. I don't know whether you do this. So I do this every single time. And some companies have got really good at it. And tell me if you do the same thing. No matter what I'm buying online, if I get to the checkout and I see coupon code, and this is why I never did it. Yes, I know what you're doing here. It's like, that then, enter your coupon code. I am fucking Hercule Pyro at this point. I am. You're who? Hercule Pyro? Hercule Pyro? Pyro? Poirot, yes. Wow. Do you know what? Right, funny story. I've used, I can never say this right.

I should learn.

Because that's the second time. I was on the one show once talking about, it's a true, true story.

You were on the one show?

I was on the one show. I was being featured to do with like credit card frauds. I wasn't doing the credit card fraud. We'd got hit really hard. And I made that joke. I was like, you don't have to be, how do you say it?

Hercule Pyro.

Anyway, I said Pyro. No one fucking corrected me on the interview.

They'll correct you on the internet. Yeah.

Well, and that night I just kept getting like, ooh, it was Pyro, Pyro, Pyro. Oh, the fucking hell.

You were on the one show? I was on the one.

I've been on TV like a few times. But anyway, what are we talking about? Anyway.

You don't have to be Poirot. You don't have to. Yeah, him.

You don't have to be Sherlock Holmes.

You don't have to be Sherlock.

Anyway, I'm scouring the internet is the point for a discount code for that checkout. And I'm going to find one. And I won't buy from that place until I've found a discount. I'm going to find something. So I think when you see like enter your voucher code here, like that stops me. That literally stops me from buying at that point. But I'll tell you here, and I can't think of the names, but there's a few times now places that have understood this behavior. So what they've done on their own website, they've published 10%, right? Yeah. For the sake of argument. Yeah. And I've had this probably two or three times with places. And it's on their own website. So you're Googling it, and they just make sure that they are the first in Google for that thing. And it's actually, it's like, okay, fair play. I'll take the 10%. So they've published their own code to counter that behavior. So I feel that's quite smart. It is.

And I suppose all of this, it's understanding customer behavior.

Yeah.

You know, we know in loads of different kind of scenarios, we know how customers work. And we can find out how customers work. And people spend, you know, the big guys spend lots and lots of money on how customers work.

Yeah.

Down to like heat mapping on websites and all this kind of stuff.

Yeah.

You know, which way people go around a supermarket, where they look, all this kind of stuff. And, you know, this data is out there for all of us, really. Well, actually, most businesses won't buy that data. But the fact that other people are doing it, you can then go and look and think, look, where is the hero aisle in the supermarket? What's my version of that? Et cetera. It is. All this stuff is out there. And I think, you know, this sort of brings us kind of full circle. Look, if you think more and replicate the things that you know work, you will just make more money.

Yeah.

You know, and that, you know, kind of goes into discounts and kind of goes into, you know, everything else. And it is, you know, it's, it is, it's why Black Friday is so big. It is why Singles Day is so big. It's why, you know, it's why Christmas, it's so big.

Yeah.

It's why, you know, it's why people kind of put their money into these different things. And yeah, I think, you know, it's just, just give people reasons to buy.

I was just thinking how we could wrap this up and just give some advice to the listeners. We've got loads. Yes. I know.

I shouldn't sound as surprised as I do, but yeah. Yeah. Well, yeah. Thank you, everybody. Yeah. Thank you. Thank you.

If you've got this far. Yeah. Yeah. Thank you. Well done. We're sorry. We're not sorry. No, this is obviously they're enjoying it. The listeners are enjoying this. Anyway, listeners, listener or you personally listening right now on this podcast, if you are thinking about, if you've got a business and you are thinking about discounts, you know, maybe you're suggesting discounts for someone that you work for, just think about it. You know, how will this discount fit in the longer term strategy? And, you know, like, you know, you can always try it and see how it works, but it isn't just necessarily about that one discount to, you know, sell these things off cheaper unless you've got, you know, overstock of something. And then, of course, you want to try and get rid of it.

Right.

But if you're discounting things that you could probably sell anyway, especially come up to Christmas, then can you, you know, how can you make the most of it? How can you capture that data? How can you get those people to buy more? Can you discount something if they buy something else? You know, there's so many things. So I would say just don't rush into it. There's a lot more behind discounting practice than what you would think. And we would just want you to think about this stuff. Yeah.

And I think, you know, and again, Black Friday particularly kind of really sort of splits people. Some people are like, yeah, it's brilliant. Some people are like, it's ridiculous. Look, the reality is there is loads and loads and loads of money out there that is going into making Black Friday so big. So actually, do you know what? If it's not too late, go and try it. Go and put a discount out. You know, because it's really hard for most businesses listening to this to create a Black Friday singles day thing on their own.

Yeah.

So if this thing is happening, there is nothing wrong with you joining that bandwagon. This is effectively you using someone else's data. This is no different for you putting an ad on Facebook. Okay. That's where the people are. Black Friday is a thing. You can use that stuff. But it is. Do the work first. Do the thinking first. Offer a discount. That is actually a discount. Something that is kind of sexy enough to make people want to take action. Make sure you know lifetime customer value and do some modelling. And again, just because it's me and I'm miserable, I would do some really tough modelling on this and kind of worst case scenario stuff. So if all these people, you know, if 100 people buy at the lower price and no one goes any further, what does that look like? What, you know, I mean, it's probably not that. You know, do some real modelling. But, you know, don't go, oh, you know. Knock out work modelling. Yeah. Financial modelling. Yeah. You don't want to go, oh, you know, 100 people to buy, 80 are going to buy again. That's probably not a thing. Mm-hmm. You know, because there will be a lot of discount hundreds in there. But, you know, discounts can be a massively valuable thing, the same as any other bit of marketing. You've just got to think it through. And I think that whereas with other stuff, you know, you can spend 500 quid on Facebook ads and almost kind of forget it if it goes wrong.

Yeah.

But discounting, because of its very nature, you are cutting cost off only profit. You know, nothing else is changing. You're only cutting your profit on it. Mm-hmm. You just need to be really cautious, careful, and thought through before you get it in. Yeah.

If you've never done the financial modelling before, just, you know, do like a worst case, mid, and then, you know, best case scenario. You'll get it wrong. You're always going to get it wrong to start with. But as you keep doing that process, you will just get better and better informed. And that financial model of all of these things, how they fit together, will really help you figure out how you're going to do discounting in the future. So, yeah, if you're listening to this before Black Friday and you're thinking, fuck, I need to get on that bandwagon, I've got to discount everything. You really don't. Like, it's one day. Like, people forget it as quickly as it comes. But, you know, if you do have a bigger strategy and think, oh, actually, I could use this to leverage this, et cetera, then, yeah, give it a go and just see what happens.

Yeah, and if you're not sure, like, lifetime value is really important. And I think if you don't know that, you need to find out. If you haven't got a product ladder, you need to do it. And actually, there's a real argument that says, don't do Black Friday this year. Do it next year. Go back to everyone that has bought before and try and sell them other stuff and see if actually you can create a product ladder. Because that will then think, well, okay, every time, you know, every hundred people that buy this pencil go on to buy this paper. Yeah. Brilliant. And you can then start to kind of work that out. So, actually, you know next time Black Friday comes, well, you can have a punt on it. Because, you know, actually, all you need to do is get the pencil sales. And, you know, history sort of shows that, you know, every 20 pencil sales, four papers look great. And I think, you know, I think you can go and do that. But, you know, for me, kind of my last word on it is that it's just a thing. It's just a reason to buy. But it's a really good reason to buy. You know, people are putting so much money behind advertising Black Friday because it works. You know, and I think, you know, you don't have to do a Black Friday. But take, as ever, with all this stuff Bertie and I talk about, what is the, not the thing itself, what is the concept behind the thing? How could that work for me? So, maybe you are going to do a business anniversary. Maybe it is your birthday. Maybe it is, do you know what? Next week we're going to have a Because It's Friday sale. So, I'm going to open some beers. I'm going to put 10% off everything on the website. You guys have yourself a brilliant time with my best wishes. Whatever it is. Like, that reason to buy, whatever it is, can be massively profitable.

Well, thank you very much, Paul, for joining us again in the studio today.

It's a pleasure, mate.

For the Throb podcast.

For the Throb podcast. Yes. Like, subscribe, share your stuff. And, yeah, thanks very much, mate. We'll see you next time. Yes. Thank you. See you all soon. Goodbye.

We'll be back next week for another edition of the Throb podcast.

If you want to find out more, you can find me at paulchapmanuk.com.

And you can find me, Bertie, at bertiecord.co.uk. Thanks again. See you next week. Bye. Bye. Bye. Bye. Bye.