Episode 57: How Olaplex Manages Marketing, with Alisa Pospekhova

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Transcript

Announcer:

Welcome to Nerd Marketing, an original podcast for e-commerce operators and marketers. Looking to level up? Drew Sanocki and Michael Epstein will bring you actionable strategies from their decades of running eight- and nine-figure brands along with interviews and insights from the leaders of some of the most successful brands in the world.

Michael Epstein:

Hey, this is Michael, and in this episode of the Nerd Marketing Podcast, we talk with Jacques Spitzer, the Emmy-winning founder of creative agency Raindrop, the agency behind video ads from brands like Native, Manscape, Dr. Squash, Poopourri, and a whole bunch more. We talk about what it's like to have one of your ads air as a Super Bowl commercial, their creative process for creating really engaging ads and a whole bunch more. Hope you enjoy it. 

Great to be with you. The man behind ads from some of the biggest brands in DTC and some of my favorite ads. Going back, I will say, to the Squatch ad is probably the one where you guys first got on my radar and I remember seeing it for the first time and literally forwarding it to everyone on my team. I was CMO of a brand at the time, and I was like, that's an ad. That's what you got to do. 

Jacques Spitzer:

 You were a man of taste. I just want you to know, yes, you're a man of taste. I've known that ever since the day I met you.

Michael Epstein:

Well, I'm excited to talk. I think people are going to be super interested to hear what you have to say. First, let's start with a little bit of the history. Raindrop is the agency. How did that get started? How has that evolved over time? I don't think you started by producing Super Bowl commercials.

Jacques Spitzer:

No, most certainly not. In fact, very first ads I ever created were shot on a flip cam. I dunno if you remember flip cams. They were like, I think people, if you go back to this would've been 2008, it's pretty amazing now what you can do just on an iPhone. The iPhone lets you shoot 4K, whatever. That's insane because at the time, the flip cam was the first cam that was, I think it was like a $200 camera and you could shoot in 10 80 p, and it was mind blowing that for $200, 10 80 p. And so I had been at this for over 13 years. It started really, really small, literally just myself trying to help a local trainer, a local massage therapist. I actually joked that it wasn't like I was representing gyms, I was representing a single trainer or a single massage therapist.

Never in a million years would I think that a decade later, we have now two agencies, over a hundred people. I did not foresee that, but it has been an incredible journey. I love what I do and I'm excited to share some of the things that I love about storytelling. I mean, you and I saw you in person not too long ago at an event in Los Angeles, and we could talk for hours because the one thing that we both love is how to connect with people through your messaging. Obviously you're doing it right now in the mail, but your history goes back and the idea is, hey, everyone's just living their life and there's moments where you can get in front of them in meaningful ways and influence what they might discover. And I'm a big fan of that. And that's where things started to change for us, was both before the pandemic 2018, 2017 when we started working with Dr. Squatch, they were doing just $3 million in sales. The reason I say that is that ad that you saw was just the first of many that reorientated the brand and allowed them to really break through and break out to hundreds of millions in sales. Now they've gone national with their retail rollout and we've done really exciting licensing projects together, working with Warner Brothers and Disney and Star Wars and all sorts of things. During Covid, we had this breaking point where because we're based out of San Diego, we had these more local regional type of brands that were hospitality and tourism related. A lot of restaurant groups that's now with this agency, Marion Gold, that does incredible work. And then Raindrop is now very focused on really consumer facing products, both digital products. So we work with now some SaaS type of clients and companies. We also work with a lot of CPG brands. The success of Dr. Squat gave us the opportunity to be part of the success of so many other brands. Very proud of the work that we get to do, and you've probably seen our advertising if you spend any time watching television or on the internet, which is most people.

Michael Epstein:

Yeah, I love it. You mentioned storytelling. You're great at that. And as evidenced by that, I remember a story that you told when I saw you in person not long ago about the green Lamborghini. It was, you'll tell it better than I will, but it's like you're driving down the road and you see a thousand of the same car. You don't remember any car that you saw except the green Lamborghini standing out. 

Jacques Spitzer:

Yeah, I'm actually going to tell you two back to back stories, but they're the exact same idea. Okay, so I'm going to tell you one story that's going to parlay into another story. The first one's very personal. It's a very personal story, but I think it will help set up how these dots have been connected in my personal life and in my business life. So when my son was born, we needed him to get a very specific hearing test done, and the stakes were really high because my wife and I went through the adoption process and my son was literally four or five days old. It was just really filled with emotion. We couldn't process any of the documentation or paperwork until he got this very specific test done. And we walked into, my father went with me and we walked into the local children's hospital to try to get help.

My dad is just one of the kindest human beings I've ever met. He's so patient. He has the longest fuse. I think I've seen him get mad at me once or twice in his entire life and I could never forget it. And so we walked in and we're talking to this woman at the front desk and we're like, I have my infant son. We really need to have this hearing test done. We tried calling, we got through the phone system. Can you please help us? And she's like, oh, you can make that appointment online. And we're like, well, we understand that, but is there any way we'd love to get in to see someone today? And she's like, I'm sorry, that's just like, that's not how it works. And then out of nowhere, my dad slammed his hand down the desk super hard and he was like, that's not good enough.

And I was like, what the fuck? I was like, oh my gosh, my dad's about to get us kicked out of a hospital. I was just panicking internally. What are you doing? What are you doing? And he's like, that's not good enough. And then he's like, I'm sorry, I just did that. He's like, I need you to understand the situation. And then he looks to me and I explain it and she's like, let me see what I can do. And I was like, okay. And sure enough, we got the hearing test done that day. We walk out and we're driving back in the car and I was like, dad, what was that? How did you know she wasn't going to that could have gotten you banned from the hospital? Yeah, he looks at me and he is, in my experience, people are just sleepwalking through life and they're going with the point of least resistance.

And he's like, we had to get her on our side. And the only way I could snap her out of that is to do something different. I had to get her attention. I had to get her to pay attention to what we were doing and want to work with us. And it sounds so ridiculous, but the next thought I had was like, oh my gosh, that's all I do with marketing. That's all I do is people are sleepwalking through their life. They're just mindlessly zombie-scrolling through their phone. They're watching television. They're not there for your advertising. They don't care. That woman sitting at that counter just like next, oh yeah, maybe want to get to it, right? If you want to influence or change someone's behavior, you got to shake 'em out of the reality. And that parlayed, that was kind of the first aha I had.

But then what it really connected for me was when I realized there was a science behind it. And that's the story that you're referring to, which is the green Lamborghini story, which is I have a good friend Joey Gilkey who mentioned, he taught me about the reticular activating system, which is a bundle of nerves that essentially helps you to filter out information. And the example I give is when you drive to and from work or to and from your friend's house, you get to your friend's house or to work. And if someone say, do you remember any specific car you pass on the way here? Most people are like, no, you don't take in so much information because if you did, it would drive you crazy. I mean, literally you'd go insane. Your brain is designed to filter out almost everything. And I'm like, but if you were to drive by a bright green Lamborghini, you would notice it.

You'd see it, at least for me, I'd be like, that's a bright color. That's an expensive car. That's a very bold choice. You're going with a bright green. I'm like, I wonder what that person does. They certainly don't mind the attention. I wonder if I hit that car, what would happen with my insurance? Does insurance cover that? I better not do that so I better slow down a little bit or switch lanes. I don't hit 'em. And then I'm like, then I start thinking, I wonder how much maintenance on that pretty expensive car to take care of. And then you kind of move on and you don't think about it, wouldn't think about, but it certainly gets your attention and it gets your attention long enough that you got into work or whatever and someone says, Hey, did you pass a green Lamborghini on the way here?

You'd be like, actually I did. Right? And so we started realizing that when we create any sense of advertising, we need to create those green Lamborghini moments because you're seeing 6,000, what, three to 6,000 logos a day you're, they're all just gray Hondas on the freeway of life. A lot of people use a lot of different words to describe the work that we do. At the end of the day, it's not boring and I'm really, really proud of what we do and that's the green Lamborghini story. But it didn't start there. It started with this reality of it. People are just not only sleepwalking through life, but their brain is hardwired to make them do that. So thanks for letting me tell my stories, Michael.

Michael Epstein:

I love those stories. Super powerful and the way you tell them is also memorable. That's the whole power of storytelling. 

Jacques Spitzer:

So do you mind if I ask you a question? I know it's your podcast, but

Michael Epstein:

You can fire away flipping around

Jacques Spitzer:

In your line of work, how do you see those principles playing out with the partners that you have who see the most success? 

Michael Epstein:

I think we're very much on the same wavelength in that respect and why we think direct mail in particular is an important channel is because it's that sort of pattern interrupt that you're describing. Everyone's expecting to see an email from a brand, get an SMS from a brand. They see them a million times on Facebook and sort of tune it out exactly as you described. But how often do you get a piece of personalized direct mail in your mailbox, something tangible from a brand that you're holding in your hand, you remember it, it's memorable. It creates that connection, an emotional connection with that recipient. And so I think that's why it's so effective right now because it follows the same principles that you're describing. It is different, it's unexpected and that's what makes it memorable.

Jacques Spitzer:

I mentioned we have the two agencies on the non-direct to consumer side. We saw a lot of success with direct mail, especially as it came to at the time, more localized things that have an actual geographical region around them. We started learning about things like direct door mail and all these other ways of going about mail, but to your point, it was like the amount of stuff in your mailbox was an all time high about 15, 20 years ago. And since then it's almost become so rare that unless it's a brochure, you hardly get any mail. I mean, I feel like I get back from a trip now and mail that's not bills is increasingly rare. And let me also ask you this follow-up question, which is on the mail side, is there any need for the brand to provide value to the person on the other end? Is it usually to announce a promotion and offer a discount or a special introductory thing or a new maybe skew that they've launched? Is there anything that you see that tends to move people more than others?

Michael Epstein:

I think the personalization elements part of it, so you can dynamically personalize it and that also feels like it was special. It was targeted directly to you at a particular moment in time for a particular reason. So that works really well and you see improved engagement across the board in general. It's more a function of we've tried to reach you through sort of standard digital channels and we're not connecting with you. How do we reach you? How do we engage you in a way that we think is actually going to capture your attention and you want to have sort of a reason you want to have, you want to announce a promotion, new product, something like that. You want to have some call to action usually, but it's often a function of we're not behaving the way that we expected you to behave. How do we get in front of you in a way that we're actually going to capture your attention? You bought a 60 day supply of our supplements, you haven't been back in 65 days. We emailed you already, you didn't engage. How do we interrupt that pattern to get you back on track?

Jacques Spitzer:

Yeah, I could totally see that. Where you're more likely to open a door that someone's knocking on, and if someone is literally not literally knocking on your door but ending up in your mailbox, it's like another, Hey, you're there and you're reaching people very directly. I love that. I've always appreciated direct mail and I truly believe that in this massive rise of digital, it's one of the pieces that can really support people's funnels. And I know we have brands that work with you all already, but I love direct mails as a medium for that reason.

Michael Epstein:

Totally. And yeah, we work with a lot of your brands like Squatch and it helps amplify the message as well as anybody or better than most. It's a multi-touch experience, and so you're hitting them with these really memorable creative ads that start to form those mental connections, those neural connections and adding additional touch points to that customer journey only sort of increases the overall performance of all of those touch points. They start working together cohesively.

Jacques Spitzer:

Well, thanks for letting me hijack your own podcasts to ask my own personal curiosities.

Michael Epstein:

No, I love it. There's so many similarities in how we think about things. It's cool to talk about. So what is the creative process? How do you work with a brand to uncover what's the message that you want to deliver and how you want to deliver it?

Jacques Spitzer:

Yeah, it's a great question. Let me skip it this way. The ideal process, right? Because there's so many ways that people either need to work with partners or sometimes we'll get a brief and someone's like, here's what we need and go. But I would say the brands where it's been transformative to see their brand voices come out their journey and then see their, watch them create marketing that people really love. Really where it all starts for us is we go through this, we call it a brand identity process where we're asking a lot of questions of the brand to define something that's truly theirs. I think one of the mistakes so many companies and brands make no matter what industry or anything else is they make an ad that if they just were to put someone else's logo at the end of it, it could have been the same app.

They don't make something distinctly their own or distinguish it as their own in any way. It's sort of like, yeah, I got a brief the other day from someone and the core tenets of the brand were quality, transparency, integrity, integrity. And I just looked at it and I was like, oh my gosh. What brands tend to fail to do even at the biggest, highest levels is ask themselves, what's our version of quality? What's our version of integrity or transparency? How is that? What is a way that we can describe it? That's one of one. So what we tend to do is go through the process of trying to figure out, yes, you have these higher level themes, but at the end of the day, what's something that you can own that no one else can own? And that can be really, really challenging to do.

And the process internally is really interesting. In fact, I was just thinking about that this morning because we had this brand identity we're doing recently and I think we had the smartest people in the world personally, but I'm sure everyone feels that way that runs a successful business, but we are beating this thing up. I mean this poor lead writer on this was like, oh, on round three of it and the client hasn't even seen it yet and we're just like, it could be better, it could punch harder, it can be more specific. And then this morning we saw we were all looking at it and we're like, this thing is good. This is really, really good. I mean, we're closing in on probably 80 to a hundred hours worth of work that collectively goes into a brand identity. It's like before we even decide what type of ads to make or what to say, we've done the hardest thing, which is to stop and be as intentional as possible about how do we make sure that we are being a hundred percent authentically and uniquely ourselves with this brand and with this voice in a way that is the right jumping off point.

I think where it can get a little bit more difficult is as brands get bigger and bigger and bigger grow and grow and grow, their tone of voice and their brand becomes safer, watered down. It's kind of like a game of telephone where someone conveys it to the next person and they convey it to the next person. And so you get someone who's taking over a brand and maybe they're the fourth CMO in 10 years, and it's like whatever the nucleus of that brand is is so sort of watered down that they went from being a green Lamborghini to a gray Honda or at some point of time. That does certainly happen for a lot of brands. I mean, I think there's a reality that the world always wants to pull you towards safer and safer options as the brand grows. It's like, Ooh, let's not make anyone upset.

Let's not rock the boat there. I mean, that happens at some point for almost every brand, whether it's at the 500 million mark, the billion dollar mark, they start worrying more about what they could lose rather than what they can gain. It's just a functional reality. So I say all this to say the actual process really starts with defining that really unique tone of voice, that unique angle, and then we find marketing expressions for that to test. You can test it in words, you can test it in images, you can test it in videos. There's so many different ways to go about it. You don't have to necessarily test it. Some people have already done enough testing to say, here's working for us, let's create something new that jumps off of this as a starting point. I do want to make that clear too, that half the time a brand will be like, here's our top four performing ads in space right now across all these channels, and we can look at that and be like, oh, here's some theories on why those might be doing well. Here's what we would do next. But we also have a lot of brands that come to us and they're like, we have a great product, but we don't actually have a point of view or a story, but we're selling 20, 30, 40, 50, a hundred million dollars worth of product because people have a need and we're fulfilling that need process starts in a different place for everyone, but the same foundation is the same in terms of what we're trying to accomplish.

Michael Epstein:

So do you have to yank some brands, wake 'em up a little bit? Sometimes they come to you and you feel like they're just watered down. So part of that process is sort of establishing a fresh point of view for them.

Jacques Spitzer:

So the answer is yes, and I would say the thing that we see most often is that to some extent they've never actually done the hard work to understand brand voice. They may have a couple words that they use to describe themselves like, oh, we're clever, or we're this or we're that, and their brand team put together a brand guide that has their colors and their fonts and here's some words that describe us, and it's like, okay, but what makes you uniquely? I think a lot of people have never drilled that deep. I would also say though that on the biggest brand side, I think it's usually a game of give and take because whether it's work that we do on the licensing side or the work that we do on whatever, a lot of times there's a lot of stakeholders involved. You're not just dealing with one or two internal marketing people.

It's like this is something that needs to pass legal and pass this and pass that. And so I would just say that's just a functional reality of when you're wanting to push a brand. I mean, it's not going to be a surprise to anyone listening to this. It's like certain brands just can't get out of their own way just to put it bluntly. It's like they're just so afraid of upsetting one person in this universe that they're like, we can't say that. And you're like, okay, but if you try to be everything to everybody, you end up being nothing for nobody. And I think that that's just the reality of the process we go through. Usually what we do is we try to present concepts and ideas. You asked about our process. When we do a campaign, we always start with concepts because we want to say, here's how we think we can break through the noise and create something that people would want to watch or want to consume because it could be organic social, it could be paid social, it could be television commercials, it could be photo shoot. We just want to make sure that what we're doing isn't just another version of a stock image of the brand. We really want it to break through. So that was a very long-winded answer to that, but you can imagine that there's people that hire us and let us work magic. There's people that hire us and say, oh, well I know I said I wanted to take some risks, but we can't. And they're like, okay, all right. Well figure it out from there.

Michael Epstein:

As you work with some of these larger and larger brands, how did their success metrics change as you see brands evolve and achieve different levels of scale? A lot of people asking, when should I move from direct response performance advertising to brand advertising? What do

Jacques Spitzer:

You see? That is a great question and here's what I'll say. What I've noticed is people come from two different backgrounds. Some people come from such a performative background that they can't let go enough to understand that you'll never be at a certain spend level and a certain number of channels. You'll just never be able to fully track what is exactly moving the needle, right? It just becomes a point where if you're at retail and you're running television and you're running social and you're running all these things, it's like, how can I possibly do that? And I'll give you some examples of how some of our partners look at it. This term I use a lot lately is escape velocity because I see this with a lot of brands where when you shoot something into space, gravity's pulling it down and there's a point though where they break through.

All of a sudden you were literally in outer space. You are now in a different stratosphere. I know it's cheesy when people are like, we're going to scale it to the moon, but brands really do hit that point. I'm watching brands, I mean a lot of people on Twitter are following these brands. The event we were at, it was like listening to Steven at Cuts and listening to David with Mary Ruth and Jason Panzer with Hex Clad and Dr. Squatch now of course, and who have experienced this moment where they realize that if you're spending on more than one or two channels and your product's available in multiple places, you have to start looking directionally at it and just look at, is my business growing? Are people having a positive experience with the advertising and do they want to purchase based on the advertising they're seeing?

So of course they're looking at things like actual sales to a website or their Amazon, but then they're also looking at things like average watch times and video rates and some more engagement type metrics because if you're going to run an ad, I always say this on Facebook, if you're going to run an ad, it doesn't cost any more for it to be an image versus 10 seconds versus three minutes, you're still paying for that consumer to engage your brand. And so if you can get three, five, 10% of people to watch a longer ad, why not? Why wouldn't you do that? That's why we do get excited about having longer form advertising being part of the overall media mix because it's like there's a place for it. So is there a place for the higher velocity stuff on my podcast Marketing people love? Just to plug it right there, we do spend a lot of time talking about this because it's the biggest question people have.

I mean, my last conversation with Shady Rays, for example, sunglass brand went from 20 million to 40 million to, I don't know if they're allowed to talk about it, their numbers, but they kept growing. They finally got off of meta only and really were able to lean into a mix of television and YouTube and they hit that escape velocity where he is like, look, in platform metrics look okay, but we know it's having a significant lift in these other places, and the more that we throttle that spend, the more it lists all the boats and they start seeing a lot of post-purchase attribution. They see a lot of really interesting trackability. The brands that are at the biggest levels when we're working with brands that are already doing, we'll just say a billion dollars plus in sales, they don't go into it with the expectation that they are going to be able to triangulate the best form of success.

Instead, what they're doing is saying, this is our budget. How can we maximize it? How can we get the most sort of attention and move the needle the most for this amount of money to spend? They're not thinking about it from the standpoint of like, well, if it does this, then I can spend more on it. Right? Actually, that was a very interesting thing coming from a performative background. We started working with these bigger brands. I'll never forget we had this brand that we did so much work with very big company and they had seasonal products we're like once they sold out, they just shut off the ad. They're like, well, you're not going to make more product. The season's over congratulations. We sold out. And I was so used to these brands that were like, oh, we'll just keep making more product and growing, and they were like, Nope, season's over.

Good job. Glad we sold it out. And so I started realizing that as we worked with bigger and bigger brands, it was really about making sure that we were making ads that frankly, I know I use marketing people love, but that's a barometer that people want to feel proud of the marketing as someone who works at the company. You want your marketing to be something that you're proud of. It doesn't matter where you run the company, when you see your own commercial for your own company on any platform when you're a billion dollar company, do you want it to be something you're proud of? And I think that that's also what we attempt to do is marketing that people connect with that does move the needle. I think some insurance brands do a great job of that. Geico in particular I feel like does a really nice job. And so the State Farm where they've reached a point where everyone knows what Geico and State Farm are and maybe they can be convinced to switch on a variety of reasons, but the success metrics are not going to look like, well, we spent $50 in required a new customer. I mean, there's some point where you're like, no, we just ran our 10 TV commercial during the same game. Let's be honest, we're spending at Velocity and they've reached escape velocity a hundred percent.

Michael Epstein:

I'm smiling every time you say escape velocity because we talk about it, love it. We talk about it all the time. That is our driving goal for the year this year. So I love to hear other people talk about it. There's obviously not one formula for the perfect ad, but what are the essential components that people should be thinking about that make for a good ad?

Jacques Spitzer:

One of the things that I will do, it's just like a practice I'll do mainly for my own organization of thought, but I realize that very much is a big part of it is like I write down what is the story in the simplest way possible. So I'm like, this is what you have now. This is what this solves. This is why you're going to want to keep buying it. This is what I want you to do next. Just very, very, very simply, it's almost like creating an outline or a thesis statement for whatever the ad or product's going to be or campaign I should say, not product, but whatever the ad or campaign is going to be. What I realized in doing that is there is something a little bit more formulaic about some aspects of what we do. If your brand is one that actually solves a problem, you'll never create.

In my experience, we've never seen an advertising campaign that says, here's why. This is the best outperforming campaigns that say these are the problems and here's why this is better. And we have made so many, we've tested so many openings, so many angles, and it's like going back to you mentioned you love the opening line where it's like, listen up, the soap you shower with is shit. I'm sorry, but someone needed to tell you. Right? That's the opening line is like, you probably still use the same bar of soap your mommy bought for her little man, right? We create this, we kind of dredge up the soil emotionally. I'm like, here's the problem statement. You're using crappy soap. You've never really thought about your soap. Great problem statement secured. We didn't start with introducing the best smelling hydrating bar of soap you'll ever use. It just never hits the same way.

It's a gray Honda driving down the street. And so when you ask, is there certain aspects that need to be in everything? I would say figuring out what you're fundamentally solving is super important. Otherwise, your ad will come across the second one I said, which is like all carrot, no stick, and I feel like the best advertising brings a mix of both. For those of you that are not familiar with the carrot and stick analogy, you can look, Google it, but yeah, I would say what we found is that it's a mix of both. And when we lean into one or the other too heavily, people just don't respond to it.

Michael Epstein:

Makes perfect sense. And you also obviously started with the hook that got your attention instantly.

Jacques Spitzer:

Yeah, I would say again, it goes back to not assuming any attention. The way that we consume information and the way that we storytell fundamentally changed about five to seven years ago. I don't think people have grasped how drastic it is. We have told stories the same way for thousands and thousands of years. There's a beginning, there's a middle, and there's an end, and you can still get away with that to some extent in some mediums, of course, in a book, you can do it in a movie, you can do it even in sometimes a television commercial because you can't necessarily skip it in a lot of cases. But in things that you can skip, which is a lot of things, and including even direct mail, you can skip it. You could just not pay attention. The number one thing that we're looking at is can it get attention?

Because without attention you have nothing. And we've established that over and over and again in this podcast. And I think the fundamental thing that where brands mess that up is they're more interested in what they want to say than what people are willing to stop and hear. So every time I see a brand send, they like to put together their massive briefs. It's like none of that matters unless people actually watch your ad. So we got to start there. So when you say another story with the hook, it's like, and that's why, because that's going to be massively important to see success.

Michael Epstein:

It's so interesting to me how still so many folks think like, well, yeah, everybody's going to watch the whole ad I put out, or I'm just going to send this long email because I'm sure everyone that's opening it is just going to read from top to bottom. Every word that I said, it's an attention economy. We all know that. But it's just interesting to hear how many people they think, well, oh, they recognize me. They've done business with me, so I'm sure they're interested in every word that I have to say.

Jacques Spitzer:

Here's where it almost makes me scared is we are in the top 1% of the the world at this, and I catch myself doing it sometimes and I'm like, this is hard. It is hard. It is probably the hardest thing to do. And I'll also add, when you watch people who do it really well, man, they understand attention in ways that it can be leveraged for good, it can be leveraged for bad, but I look at certain celebrities, political figures, rappers, musicians, you could mimic back to me a list of names that come to mind where it's like they're always in the news, they're always getting attention. They just flat out understand attention. I think that the best marketers in the world are surfing whatever that is in the culture at any given moment and finding where the brand matches with where the waves are because it's just a reality that if you don't have attention, I don't love any attention is good attention. I don't necessarily agree with that. However, I also don't disagree with it, if that makes sense. I don't like it. I don't think it's fully true, but I understand why people say it and I can't say they're totally wrong.

Michael Epstein:

There's this concept of starting with your why, you actually have a little bit of a contrarian take on it or a little different spin on that concept that storytelling processes have existed forever, but it continues to evolve. And so I think there's a little bit of a different new spin on that. What is that?

Jacques Spitzer:

I'd love to share that and I'll add—earlier when we were talking about direct mail, you said something that really stood out to me. You said the more personalized the mail piece is, the more someone feels like it's for them, yes, that is going to drive better results, better action, because people feel connected to, they feel understood, they feel like you see them. The way I think about this idea of defining your why is that corporations or organizations as a whole have gone through this process of in the nineties, the popular buzzword is we need a mission statement. That was the thing. We need our values and we need our mission statement. And it was like a whole industry around defining your mission statement and a lot of mission statements were almost around what you would do. We do this better than anyone in the world.

And what Simon Sinek came along and said is like, no, people don't buy what you do or even how you do it, but they buy why you do it. Which in and of itself was a revolutionary thought that people are like, oh, wait, you're right. There's a functional benefit to what people are doing, but there's also this emotional benefit. People really connect with your why. What we have found as our guiding star, and I think people really resonate with this, is that, and the analogy I give is when we first as human beings discovered that the world wasn't flat, it was a big discovery. Defining your why as a company as a brand is a big discovery, but it's flawed because even after we figured out the earth was round, we still believed it was the center of the universe. Our whole perspective was that everything revolved around us.

And as a brand, people do not revolve around you. They are the main character of their own story. Everyone's the main character in their own life, a hundred percent. And so what we found out is that as humans, we realized, oh, shoot, we actually revolve around the sun. We're just one planet. We're not the middle of the universe. And I think brands are starting to realize that there is a lot of value in having your why as a brand, but if you can't figure out the why of your consumer, you are always going to be mismatched. And when we were working with Dr. Squash in the very early days, and the reason I keep using 'em as an example is obviously you're familiar with their company and their brand, their owner, Jack is incredibly passionate about the healing properties of all natural soap and what it could do for people's skin.

And the thing was, that was his why. It was powerful and his story has a place, but we had to find a way to make it part of other people's lives and their why. What's in it for them? What's their why? What we realized in all this is we're not selling soap. We are not selling soap, soap as a commodity for probably 12 to $15. I'd have to check. If you go to Costco, you could probably get 30 bars of a generic soap product, which is the cost of about two bars of Dr. Squatch. And what we realized in the form of the advertising and the branding was that we were selling joy. You're selling joy when you got the package, joy every morning when you use the product. When you thought about the funny commercials and it's like, what is the ROI of Joy?

I don't know. I've never been able to answer that, but that's ultimately what we realized is that people's why is that they have mundane things that are part of their life and they were able to upgrade it. And so their why is that it made them feel elevated, it made them feel clever. It made them feel like they were doing something fun and slightly better for their skin and for themselves that was worth the premium, not necessarily the fact that it could cure eczema or something. And I think that that's really what we're seeing is when people start tapping into other people's whys, it connects on a really deep level because it's everything we buy, the reflection of who we believe we are or who we want to become.

Michael Epstein:

It reminds me of Donald Miller's approach of making the customer the hero of their own story.

Jacques Spitzer:

Yes, absolutely. I'd share a lot of similar perspectives as some of the StoryBrand formulations and everything else. I think a hundred percent, and I think Donald Miller is a fantastic storyteller. I think he's figured out he's reverse engineered what goes into telling a story.

Michael Epstein:

Last question, what was it like creating an ad that appeared on the Super Bowl?

Jacques Spitzer:

That is a good question. So here's what I'll say. It was an out-of-body experience in the sense of it, especially when it actually ran. I just remember one feeling very, very anxious because it was a floater spot, so we didn't know exactly when it was going to run. And so it felt like the longest half of my life watching that Super Bowl, it was supposed to run in the first half, and I think it ran during the two minute warning, which ended up being a great placement, but we were just like, oh my gosh, when's it going to run? Every time there's a timeout or an injury? I was like, oh my gosh, here it is. And then it was like, oh, no. So I was like, it was like two hours in and I was exhausted on the viewing end, and then when it finally went out, I think I've never gotten more text messages than the 30 seconds following that ad running.

I mean, it was amazing that that moment in terms of actually creating the ad, we weren't sure that it was going to run in the Super Bowl, so we were making a television ad that we knew they were in negotiations with, I think it was CBS, but whoever it was at the time, they were in negotiations. And so it was definitely interesting creating a commercial that you're like, either they're going to put a lot of money behind this to just do national TV this year, or they're going to actually run the Super Bowl. Of course, we were incredibly excited and what an amazing moment when we realized that we had gone from this brand being two employees and $3 million in sales to the Super Bowl, and we were part of this journey, and that was, yeah, I think I'll never forget it. This year we had a regional Super Bowl spot and it was incredibly exciting. It's just like to take a brand from where they were to being able to afford and leverage the Super Bowl spot was incredibly gratifying.

Michael Epstein:

That's awesome.

Jacques Spitzer:

I appreciate you asking about it.

Michael Epstein:

Yeah, this was awesome. One of the things I love hearing you talk about, and one of the reasons I wanted you on was because I think so much of what you say is so practical, can be operationalized and actioned by people that have a big creative budget, but also folks that are still trying to figure out what works and create stuff on their own and sort of break through. So thanks so much. Super valuable, actionable advice, and I really always love talking to you and hearing from you.

Jacques Spitzer:

Always good to see you, Michael. Thank you for having me.

Announcer:

Thanks for listening to Nerd Marketing. Don't forget to check out all of the other great episodes, some of which include interviews with e-commerce Marketing Masters, working with Mr. Beast and Joe Rogan, plus Drew and Michael's experiences in private equity, advice from VC firms on what they look for in investments and so much more like share, subscribe, and tune in every week for a new episode.

Transcript

Announcer:

Hey, welcome to the Nerd Marketing Podcast. Join co-hosts and ecom OGs, Drew Sanocki and Michael Epstein. Get ready as they'll bring you trusted tactics and strategies for boosting your brand's revenue, operations, and profitability.

Drew Sanocki:

Hey everybody, this is Drew Sanocki. Our guest today is Alisa Pospekhova, and I hope I didn't butcher her last name, but I've cyber stalked her for years. She's just got such an amazing background. She has been in CPG forever. She is the director of brand marketing at Olaplex, which is a two and a half billion dollar public company, beauty brand, and at the same time she's the CEO and founder of kindroot, which is an herbal supplement company. It's really impressive to see not only what CPG is like at the public company level, but also at the startup level, how she navigates both. And there's something interesting in there about what Olaplex looks to when they decide to buy versus build into a new category, which I'm sure a lot of listeners are kind of curious about, especially in the beauty space. So without further ado, Alicia kindroot, which is a healthy lozenge. Yeah, how would you describe it?

Alisa Pospekhova:

It's vitamins and herbs blended into lozenges. So the whole concept is taking herbs on the go in a delicious way, essentially.

Drew Sanocki:

Nice. And how long have you been running that?

Alisa Pospekhova:

One, two and a half years.

Drew Sanocki:

And before that, you were involved in other brands?

Alisa Pospekhova:

I've been in consumer products, wellness, beauty for the past almost 20 years at this point. Supplements, snacks. I worked in a yoga company recently, kind of shifted into beauty, so I love that space. I love creating products and brands and marketing it, so I think launching my own thing just felt really natural as an extension of just fully owning the creativity part of it for me at some point.

Drew Sanocki:

How would you compare kindroot to Olaplex?

Alisa Pospekhova:

It is very different when you're working in a brand that's established, even though we're just celebrating our ninth birthday, so it's still rather new. But I have an operations department, I have a social media department, I have all of these cross-functional people that I'm working with. When I'm looking at kindroot, it's just me. So I am as much of a coordinator and logistics operator as I am a brand marketer and a trademark filer, so it's like a full 360 business management rather than being a bit more in a particular lane in a role. But I would say that I think running my own business and understanding all of those facets makes me a much better brand marketer and cross-functional partner to everybody else. I know exactly what you're talking about at Palette coming in, I've actually dealt with that, so I feel like running own business actually just made me so much better at my corporate career as

Drew Sanocki:

Well. And so Olaplex is 2 billion company.

Alisa Pospekhova:

It's a big, big brand. Yeah.

Drew Sanocki:

Did they start as a DTC brand?

Alisa Pospekhova:

No, so they actually kind of started in the professional channel that was really going after and working with a lot of hairstylists, particularly colorists because the product is sort of targeting repair and then of course went into the retail channel and then D two C as well. But now I mean we have a robust D two C business as well as obviously e-comm through retailers and secondary channels. If you think about Amazon and all of those expansions too,

Michael Epstein:

And you talked about how you can transfer some of the knowledge that you gained from running your own business into these bigger companies. On the flip side, plex to plus billion dollars, Nestle wonderful pistachios brands that you've worked with. What can you take from these massive brands and apply it to a smaller brand?

Alisa Pospekhova:

The scope of information that you're exposed to at these big brands is kind of incredible. You are in beta channels with different media buyers and things like that. I think you see strategic direction from a lot of retailers exposure to information is just so vast that you don't get when you're just a small little operator and quite honestly, retailer is like, Hey, I want you my portfolio, but if you're here or not, maybe not that exciting. Or even on the DTC flip side, you kind of know, Hey, what's YouTube testing? Where are they going? What's their strategy? It's all the kind of information that's available to me in a large brand that I can then kind of think about how to action on my part. We do so much testing. You have partners and I'm like, oh, they're doing that, right? I'm going to take that and I'm going to sort of do it from a brand on a much smaller scale. So I would say spot on. I think there's kind of synergies in both, for

Michael Epstein:

Sure. I know a lot of brands now are thinking about medium mix modeling and omnichannel. What do you learn at that level of scale?

Alisa Pospekhova:

Such a good question. I mean, look, medium max modeling is something that we're actually talking about a lot. I mean especially once you start spending and there's a point when you're a small brand, you're kind of not spending at all, right? Then you kind of go to Medium and then you sort of start spending probably more in the kind of conversion channels. Then you get to be a big brand and now you've kind of spent, and now you're really focusing on optimizing and you sort of have a choice. In a medium sized company, you don't even have a choice where you're spending with these larger barges. The question is where does our money go? Do we put it into Pinterest? Do we put it into out-of-home? How do we approach our audiences? We actually spend quite a lot of time on figuring that out and making sure that our dollars go as far as possible.

And then of course, not only is there sort of D two C, when you're really truly talking about an omnichannel brand, which Olaplex is, there's sort of an additional complexity of, okay, so how does that truly work on a global level in terms of supporting your retail partners but then also running your D two C and if somebody goes to Amazon, looks at your brand, but then maybe doesn't, how do you then maybe try to retarget them on Sephora or D two C? All that whole entire thing is just so much more complex and if you think about it, I mean I think about it, but there's multiple departments that are working on it internally. So getting everybody together on the same page is also pretty complex and multiple agencies. And then you talk about internationally, countries, there's the us but we're now exploring uk, Canada, middle East, Latin America. So the scope of that expands quite dramatically for sure.

Michael Epstein:

When you make those decisions, how do you think about success or how do you think about measuring the efficacy of those different channels?

Alisa Pospekhova:

That's like the million dollar question, and I would say it starts with understanding what your KPI is and what you go after, right? In my marketing career, I will say the number one reason people say like, oh, something didn't work. It is because the marketing team was running an awareness campaign focused on reach and eyeballs, but maybe the CFO thought this was going to generate a ton of sales, and so there was mismatch of expectations. So I think the number one thing is actually going into it as an organization with a truly defined set of what are you actually going after and what is that customer journey? If you're running an awareness campaign, that doesn't mean it's not going to lead to sales, but your customer journey might be 90 days out. If you're starting to look at a daily sales report, which a lot of people do and they're like, Hey, we're not seeing an uptick in sales.

Well you never were going to because that's not what it's focused on. But of course, more and more, especially DTC, you're running full funnel campaigns where each channel has a role in the mix and you're hopefully widening your funnel at the same time as you're trying to then also lead to conversion. And of course the hardest thing to do is sort of do it at scale. So as you're expanding your reach, you're still being as efficient and you're not losing some of your acquisition costs in there, you're not kind of expanding them. So that's what we're focused on really. How do we reach the most amount of people and obviously convert them, but without exceeding some of our targets and expectations.

Drew Sanocki:

I'm curious what your team looks like at kindroot or at a Shopify brand doing up to maybe 20 million in revenue is all done by one person, typically marketing at Olaplex, everything you've talked about on the demand gen side, is that all your team or is it you individually? What does marketing look like?

Alisa Pospekhova:

No, so I mean marketing at Olaplex has multiple departments rolled into it. I run the brand marketing team, specifically brand marketing, usually sort of like the hub. We are kind of setting that go-to-market strategy overall plan for how we get to the market. But we have a separate product marketing team. We have an e-commerce team, we have a media team, and then of course we have kind outside agencies. So there's a lot of collaboration cross-department, but I am very involved in all of it because obviously your media will only work as well as your creative, as you're positioning, as your audience targeting. So we tend to sort of on the brand side, cross all of the different channels just because we tend to drive the plans across the board and responsible for full kind of go-to-market plan.

Drew Sanocki:

What's typical to spend for marketing? Is it like 10% of revenue?

Alisa Pospekhova:

There's different targets, 10% is what usually people will throw out generally. I've also been though in places where we would say, Hey, we want to have a growth spurt, so we will over invest, let's say Q1, Q2 to build out that funnel and then in time for Q4 holiday and then minimize our overarching spend. But we'll go really, really into those warm audiences towards the end of the year and really target them. And then maybe Q1 you kind of reduce as well. So there's just a lot of up and down. And then of course when you go into a VC invested company or market kind of IPO company, there's a whole other layer of what are the market expectations, profitability and stuff. I've also worked for privately owned companies where we were really, really profit focused and sometimes we spent maybe 3% on marketing. Everything had to be just super optimized, so it varies. I also worked on a brand where we were trying to just financially get acquired. It was the weirdest thing where it didn't matter. Profitability, acquisition, none of that happened. It was a CBD brand very, very early in the CBD boom and they just wanted to spend, grow and kind of be acquired. And of course that didn't happen. They went out of business, but sometimes there's sort that type of stuff too. In DC

Drew Sanocki:

I feel like you've got such an interesting vantage point because not only have you been in CPG for 20 years, but you're at this big brand two and a half billion dollars brand, and then down here you've got all these little gnats, all these Shopify startups that are nipping at your ankles. I'm an investor in overtone, which is a fraction of your size in the same category. Do you look at an overtone? Do you even know it exists? Are you looking at them and trying to take inspiration from them or are you guys looking at what categories might be growing quickly that you might want to get into? Or where is the calculation ever made that you should acquire a fast growing CPG? Or do you just kind of ignore this all as noise in the Shopify world? Because I would say most listeners to this want to be acquired by an olaplex someday, right?

Alisa Pospekhova:

I mean, I pay a lot of attention to pretty much everything in the space. I mean, I'm sure you're aware just being in the space, I then haircare is truly booming. I mean beauty is booming and has been for a while, but prestige sort of premium hair care has really kind of started growing in the last three years or so. I mean, it was really still kind of a mass play. And so even if somebody previously went into Sephora or Nordstrom's to buy a lipstick or powder, whatever, the same shopper would go into Target and buy haircare. There just wasn't really enough sort of education. And previously you kind of had two avenues. You had your salon kind of distribution and that was really premium, or you went into Target, Walmart super, whatever. And then you really saw in the past few years, Sephora as an alt is really going into the haircare space.

And you're right, I mean I think the amount of indie hair care brands that are coming into the market has been kind of astounding. I feel like I'm seeing another startup launching every single week or so. So I do pay attention to it because I ultimately feel that a lot of very interesting or daring innovation tends to happen in these small spaces because obviously as you grow and you have more to lose and you start going about the innovation a more methodical way, and I sort of love an entrepreneurial way of it is like, Hey, I see a white space. Maybe I have some research, maybe I don't, maybe I talk to five people and I'm just going to sort of go from it. And I think beautiful, amazing things happen in that sort of way. So I love seeing what's going on from an olaplex standpoint.

We pay attention to it, but I also think two things are important. One, too many brands at some point start copying what other people do, and I am very passionate about know who you are and go after it and sort of stay in your lane. Brands just get diluted way too much. The second one is at some point you kind of have to start acting like a bigger brand. You can't get distracted by everything that's sort of going on. With that being said, you're right. I think that there's also an opportunity to kind of say, Hey, maybe we as a brand don't necessarily go in this direction, but we can kind of acquire somebody who's additive to our portfolio. And that's always something that's I think very, very interesting. And you've been seeing so many acquisitions in the space with way got acquired by p and g recently. You have Gio. I mean it really, really has been growing as a channel, so I'm excited to see what kind of happens there.

Michael Epstein:

And when do you think brands should start thinking more about branding and awareness versus direct response?

Alisa Pospekhova:

Look, I think consumer products are innately experiential and you experience it both from the packaging, the view, how it smells down to how it works, that influences your sort of experience. But that doesn't mean that you have to have this super beautiful packaging. You just have to story tell and have a story. And I don't think that has to be expensive by all means. I think you can just jump into Canva and create an initial brand for a launch for a startup. I don't think it has to be expensive. I do. It has to be mindful. I think you have to be mindful about how you differentiate it, how are you sort of going about it? So that's sort on the branding side. I think there's a lot of conversation around like, oh, just slap something together and put it out there. And my question is, is that how you want to show up in the world if you're sloppy, whatever.

But from the brand awareness side, I don't really recommend investing a ton of money into it from the beginning unless you're instantly VC funded and you kind of want to go out there. And by all means, brands have done it and has sort of gone well. But generally I would say, hey, focus on more of conversion. Direct response is a great one, right? Because actually hitting somebody with that card, if you were kind of expanding on the retail side, invest in things like displays, retail specific e-commerce activity, really work on driving sales to get to some kind of critical mass because you want to sort of have enough distribution and enough people knowing about you before you turn those things on. It's really easy to spend money, it's ridiculously easy to spend money. So kind of be mindful of that.

Drew Sanocki:

I'm curious what your budget is. Your budget's probably bigger than our company.

Alisa Pospekhova:

It's actually not that big. We actually underspent comparatively to a lot of our competitors. And I would say the reason for that, and again this goes back to what you just asked me previously, is that Olaplex truly started with a really groundbreaking product. They invested in community, they got these amazing pro hairdressers, that channel on board. They spent a lot of time nurturing that community via social media. And so in some ways we haven't had to really invest in a lot of above the line because the word of mouth with hairdressers, like 70% of recommendations for premium haircare come through your stylist, and we have so many consumer testimonials on social. So we are actually, believe it or not, our first awareness campaign just dropped two weeks ago. That was sort of what I ended up working on. So we are running out of home in three key cities and we're really investing in that above the line. But previous to that, for a company our size nine year anniversaries happening on June 24th, we were really kind of focused on mainly conversion driving tactics. So it can be done, but I would say you have to have a truly differentiated product in that sense. That's kind of unsu substitutable, which I think we had

Michael Epstein:

At kindroot, you're omnichannel and you're a one woman show. Yeah. Was that based on your experience being omnichannel and you understood it and were comfortable moving into it or how did you think about going D two C versus omnichannel as you started and grew kindroot? 

Alisa Pospekhova:

Good question. I designed the brand to be able to go sort of omnichannel from very tactical things of case packs and figuring out margins for both channels. So I was ready to go in that sense. I initially thought I was going to be more D two C and not necessarily omnichannel, but I launched the brand right before Covid, and quite honestly, the first six to eight months were just wild because I would have an amazing month and then everybody pivoted to spend and my acquisition costs went crazy. And then a retailer came and I had inventory and I was like, well, I need money this month, so I'll sell to you. So transparently, it was a lot less of a strategic decision as much it was a need for cashflow a particular month. And so that's kind of how I went. But with that being said, I did say no to a few retailers.

I was still strategic in a sense of going after or partnering with those that I felt aligned with. The brand didn't require a ton of spend and investment where I felt like the consumer was the right one. And so if you look at us, we're still sort of primarily e-comm based in a sense that my biggest channels are Amazon, target.com, thrive Market. It's still sort of those e-comm retailers, and then we have some distribution within natural channels. But from to your point, being a one person show with some sort of freelancers, retail is just incredibly laborious and expensive to get into, which is why I've kind of prioritize e-comm channels because it's not that hard. To your point to set up, I have a three pl, I have Shopify, everything else can kind of be done virtually rather than starting out with sales teams and field teams and merchandising teams and regional distributors and moving freight around, that's where you start to need a lot more people on your team to execute, which I just isn't something I want to do right now.

Drew Sanocki:

You've got a really interesting perspective. You see a lot of CPG brands both at krut and Olaplex. What do you see working right now in CPG? I guess it could be either categories you see that are particularly hot or marketing approaches, be it influencer or community or Facebook. What's working right now,

Alisa Pospekhova:

I will say right now is kind of a wild time. I almost want to say, I don't know. It is sort of a time where I feel like a lot of brands and people are struggling. Things are getting more and more expensive, more and more saturated. The ease with which I think you can sort of open a Shopify store is almost a little bit too ridiculously easy to where it's like there's just so many brands and kind of the path to market. Just in general though, I think building of a community I think is super important and that's what I see. The brands that are succeeding seem to be investing a lot in a lot of engagement, almost kind of to old school tactics of farmer's markets, local events. The online space is almost too dominated in a sense that you have to kind of mix digital and offline together to come to people.

That's where I see more and more probably brands that are hyper-focused on very, very specific problem solving. So it's not like you can launch a skincare brand for acne anymore. I feel like it has to be skincare brand for acne for boys between 14 and 17. You just have to be super, super targeted. Or if I were to launch a haircare company, I probably would launch one that would be like, Hey, targeting not hair loss, but hair loss of postpartum women. You just have to have a super precise solution. I think too, both from the storytelling but also just overall marketing to win right now.

Drew Sanocki:

Yeah, we talk a lot about niches and how it's niching down that makes it easier to get initial traction, but then the size of the market is smaller or you acquire all the cheap customers that there are to acquire, and then you pretty quickly plateau. So totally, it's a double-edged sword.

Alisa Pospekhova:

It is, it is. Because then it's like how do you expand from that, right? Then you're like, yeah, but if you expand now you're competing against kins and Ola plexes and Wallas of the world, then that's what you're just going to get eaten alive.

Drew Sanocki:

You just get grinded.

Alisa Pospekhova:

You just get it completely obliterated,

Drew Sanocki:

Just get jammed.

Alisa Pospekhova:

And that's sad because I'm a true, I love small brands and I love small business is a huge passion of mine. So I am always like, oh, small new brand. I just always want to help and buy and support, I guess. 

Drew Sanocki:

What career advice would you give to some aspiring CPG entrepreneur? Would it be to go work at a big brand and kind of learn the ropes or just set up that Shopify store and get started?

Alisa Pospekhova:

Both, but no. I mean, I think that my advice is actually not to be too locked into a path, a career or whatever, be more so open to possibilities and opportunities. I'm someone in addition to small and big, I've changed a lot of industries. So I have gone from juice to supplements to yoga to beauty, and people always ask me like, oh, well how did you switch from one to another? And I'm like, I never actually thought about it as switching. I thought about it. I'm selling the same premium yoga mat to the same consumer who is buying olaplex, who was buying mushroom coffee supplements. It's all the same. I think whether you sort of start small and stay there or you go big, you're going to get a little stagnant if you're kind of repeating the same things. So for me, always thinking, Hey, what's the next adventure? What's the next place that I'm going to go and learn Something that I don't know. 

Drew Sanocki:

Thank you, Elisa.

Alisa Pospekhova:

Thank you.

Drew Sanocki:

This was awesome. Yeah, great perspective and from a veteran entrepreneur, so really appreciate you coming on.

Alisa Pospekhova:

Thank you. Thank you for having me.

Announcer:

On this season of the Nerd Marketing Podcast, you'll hear from the Wharton professor that literally wrote the book on customer centricity, along with Drew and Michael's experience in private equity and advice from VC firm partners on what they look for in investments. And you'll hear topics about brick and mortar retail strategies for CPG brands and much more. Alright, Drew and Michael, we'll be back very soon.