Growing Lean
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Growing Lean
Exploring E-commerce Evolution with Phil Masiello, CEO of Crunch Growth Revenue Acceleration Agency
Prepare to be immersed in a deep-dive conversation with Phil Masiello, the brains behind the rapid growth of Crunch Growth Revenue Acceleration Agency. As its CEO and co-founder, Phil guides us through the agency's evolution and how they've managed to keep pace with the ever-accelerating e-commerce landscape, especially in the wake of COVID-19. We'll hear about their strategic approach to managing supply chain disruptions, and the shrewd tactics they've employed to adapt to Amazon's evolution, all while maintaining a laser-focused selection process for their partners.
As we venture further into our dialogue, Phil generously shares the success metrics that drive his business and the significance of preserving business relationships. He sheds light on the surveys his agency uses to stay in tune with their performance, their unique payment models, and opens up about the possible drawbacks of the AI revolution. He also shares his encounters with social media influencers peddling courses on how to build a marketing agency. Wrapping up, Phil offers a treasure trove of free resources for entrepreneurs and extends an open invitation to connect with him on social media. So, buckle up, dear listener, for an enlightening episode packed with actionable insights for anyone navigating the whirlwind world of e-commerce.
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Welcome back to another episode of the growing Lean podcast sponsored by Lean Discovery Group. This is your host, dylan Burke, also known as Deej. I'm very happy to be here with Phil Masiello. Author, entrepreneur, e-commerce pro and CEO and co-founder of Crunch Growth Revenue Acceleration Agency. Welcome, phil.
Speaker 2:Thanks, thanks for having me.
Speaker 1:Awesome. So, phil, can you get us started by telling us a little bit about your background and your business?
Speaker 2:Yeah, sure, my background predominantly was an entrepreneur. I founded my first business at 27, which was an absolute disaster and it was an eye-opening experience in entrepreneurship. And I probably for the three, four years that I ran that business, I could have worked somewhere else and made more money, but I sold that business and took the money and I went into graduate school. Then from there I got involved with another company and I was more of an entrepreneur in that company. I developed a lot of things that helped grow that company. Then I founded Raw Beauty with Carol Alt, which was a skincare line. I founded 800 Razors.
Speaker 2:I did a lot of work with a lot of brands on Home Shopping Network and sort of fell into building an agency. After we sold Raw Beauty and we sold 800 Razors, I actually got calls from people that we had done business with or that I knew saying, hey, can you help me with my e-commerce business? Can you help me on Amazon, can you help me with all these different pieces? And we started helping them and I'm not really a consultant, so we started actually helping them do things, place ads, build content, and it's sort of grown from there. We manage social media accounts for a lot of our brands. We manage a lot of Amazon accounts. We place a lot of advertising inventory through DSPs and things for our brands that we work with, so we also build and host and manage sites. We merged a couple of years ago with another company that did that because we were getting a lot of requests and I'm not a developer. So, yeah, it's been quite a growth spurt.
Speaker 1:Okay, amazing. And with the clients that you have, is that more due system, more on the operational side or the marketing, or what do you do for them Exactly?
Speaker 2:I think everybody has to have their strengths. I have people that handle social media and handle web development and things like that. My role is more I can tell you what we have to do on Amazon, I can tell you what we have to do with ads and things like that, and I need people to execute. I'm not a very good executor personally. I am more of a. I know what's wrong, I know what needs to be done and I can direct and lead people. But it's fine because I have a tremendous amount of young people that are willing to do it and willing to learn and learn from me, and so we meet constantly every morning and go over things. But my role is really more customer interface, getting new clients and sort of directing everybody.
Speaker 1:Okay, amazing, I love that, and could you walk us through your kind of overall business strategy?
Speaker 2:Our strategy yeah, yeah, at this, you know, at this point, we only work with brands and we only work with, really, our sweet spot is consumer products, because we understand consumers, that we've been working with consumers for, you know, over 40 years, and so we really focus on consumer product brands. But our strategy is we're very particular about the types of brands that we work with and who we can help. We don't want to get involved with brands if we don't think we can help them. If we're not into just taking money for growth's sake, we want to make sure that we have a strategy and we can take on somebody and help them get to where they want to be. We're not one of them and that's why we keep frankly, we keep our customers for years. We still have our first group of customers that we started with our clients back in, you know, 2015. So we continually employ that strategy. So we're very selective about who we want to do business with. If we can't help you, we're going to tell you right away that we can't.
Speaker 1:Okay, amazing, I love that. And how have you adapted to any changes in the industry over the past? Well, since you started, but more specifically, more specifically over the past four years or so, because there's been a massive drive of e-commerce, shops and dropshipping and all that. So how have you adapted to the changes in the market?
Speaker 2:Well, I think the first rapid change was COVID and what happened there and that really caused havoc for a lot of people our clients, us because people couldn't you know, the clients couldn't get raw materials to get their products out. So trying to maintain sales while, you know, figuring out what was happening with supply chain and the increased costs and things like that. So that was very difficult to adjust. But we, you know, we didn't. By working closely with the clients, we do work very closely with our customers. We try and almost be an extension of their marketing department, so we get involved with things. You know the whole supply chain issue and all that.
Speaker 2:The biggest changes, I think, in e-commerce, you know dropshipping and all it's fine, it doesn't really affect us much because, again, we're dealing mostly with brands and people who are building brands.
Speaker 2:But what the biggest changes I think have been on Amazon, where you know Amazon continues to change, amazon continues to evolve and all of our clients in one way or another, whether they're vendors to Amazon or whether they're on seller central, they're on there somehow and so managing resellers, managing people who are trying to hijack their brands, those types of things it's gotten a lot more aggressive.
Speaker 2:In the meantime Amazon's changed a lot of their systems so it's in some respects for the better. So it's more difficult to try and get legitimate reviews. They took away a lot of tools we used to use. We used to be able to email clients directly or customers directly. Now we have to go through the Amazon systems and you're only allowed to send one. So it gets a little bit tricky to do that and do it legitimately. We don't like to play games and try and get fake reviews or any of that stuff. But it continues to evolve and I think as long as you stay on top of it and understand it and sort of get involved with forums and groups where you can discuss these things and how other people are handling it, then you can continue to move forward.
Speaker 1:Okay, amazing. Yeah, I agree, I actually spoke to someone the other day who's I won't say too much, but he's founding this AI business that basically verifies whether reviews are real or not, and I think that's going to play a huge effect in the online e-commerce business.
Speaker 2:Yeah, absolutely I'm not against it. It's more difficult to get reviews today, but I'm not against it because I do think that there's a lot of fake garbage out there and it does affect the whole business, the whole world.
Speaker 1:Yeah, 100%. I was looking into e-commerce a couple months ago. All the videos are just telling me to make fake reviews. It's a problem because you want your people to believe in you. You want your customers to believe the product and know it's legit and it's hard to differentiate those.
Speaker 2:Yeah, I did. I was speaking to someone a while ago about how to spot fake reviews and I said when you think about yourself, if somebody says, hey, place a review for this product, you generally say something like it was a great product, great experience, something short, quick. But when you see these reviews where they write a book and they start talking about all the key points that the brand points out, that's when it's just seeded.
Speaker 1:Yeah, exactly 100% yeah. And do you have any specific tactics or tools that you've used that have been particularly effective for growing the business and getting where it is today?
Speaker 2:I think we've been very early adopters of all technologies, but AI, which everybody talks about now, we've really been using for several years through different platforms. I mean chat. Gpt is part of it, but we've used a product called Jasper for a long time which has chat built into it. But I like it because it has a lot of templates you can put your brand in and understand. It'll understand the brands, it'll scan the site so it'll have that voice, that in conjunction with things like Grammarly and plagiarism checker because we do build a lot of content we do like AI for helping us, not so much building posts on social or building comments or building what do you call it content posts but it gets you about 50% or 60% of the way there. But more importantly, when you think about ideation or idea generation for us, we've got so many clients and so many different channels of business it gets hard to break it all apart and come up with ideas. So we do use AI a lot for idea generation, thinking about directional posts or what we should say about this or social media.
Speaker 2:I'm not a big fan of the photo side of what's happening with AI. I don't think that that's at least we haven't had good luck with it and we're probably not going to continue until it gets more refined. We'll still use real images, but I think video we've really expanded that side of our business because between TikTok and Reels and Stories and everything that's happened with the consumer which I think has been a big shift over the last four years we've really had to beef up what's happening with video. So using a lot of tools to be able to edit and make videos more appealing and putting text on them and things like that, and doing it automatically and rapidly, which again is another AI product. So we've really embraced technology to make our jobs faster and more effective, not so much to eliminate people whenever trying to do that 100%.
Speaker 1:I actually had this conversation with someone yesterday about AI and that people are just they so scared it's gonna come and take our jobs and replace us, but what you need to understand is it's a tool to make, it's a job and life's faster so we can focus on more things and I think, that's what people need to understand is that it can do things a lot faster than us, but it can't do it at the level that humans can.
Speaker 1:And if you, if you use it correctly, it's like Banging a nail with your hand versus a hammer versus a rock. You just get faster and faster. So if you use the tools correctly, you'll be able to do your thing much faster.
Speaker 2:Yeah, like I said, I think it gets you 50 to 60 percent to where you want to be. It certainly helps you move things forward. We have on the development side. We have the. You know our developers use it, use AI for building apps and things like that. But they'll tell you that you know you can't just take the code directly off of what AI gives you. You have to still test it and refine it and make it work. But it'll get you 50 to 60 percent of the way to where you want to be. I don't think it's going to replace Human interview humans in a while. I mean, we've always used chat, chat bots and chat robots on on Websites and things. But that doesn't take away from customer service. You still need a person to handle the big customer service. That just that just keeps the flow going or it sort of funnels them into where you want them to be.
Speaker 1:So yeah, exactly, exactly. And how do you measure the success of your business, like? What kind of metrics or KPIs do you use?
Speaker 2:Yeah, well, the the biggest one is we. We want to find out how our customers view or our clients view us, because for us that's that's the key. We want to maintain our business relationships. We don't want to be in a business where we're churning customers and we have to constantly try and find new ones. So we always we, we.
Speaker 2:We use a lot of surveys and things that go out to our clients once a year to see how we're doing and see what we can maintain, mostly about response time and are we meeting their goals? Because our goals are whatever their goals are. So if we have a client who wants to get 10% revenue increases, then that becomes our goal for them. So, as far as our goal for the business, I don't like to lose people. I don't like to lose my employees. We've been very lucky that we've had really good retention. We've had a couple that we've had to let go or have left us for other reasons. So I like to measure that because I think stability is a great thing in this business. So we use a bunch of different tools. Like I said, it's mostly driven by what our clients are doing. As far as our sales growth, everybody measures sales growth and everybody measures profitability, but the reality for us is it's really about sustainability and whether or not we can maintain our clients.
Speaker 1:Okay, amazing. And so you said your goal is basically your client's goal. So the way your business works, if you don't mind me asking, is are you performance based or do you have like a fixed monthly rate, for example?
Speaker 2:It depends. It's both. It really depends on the client, it depends on the product, it depends on where they're selling and what they want to do. We have no problem with performance based. We do it with several larger clients and that keeps us With us. It's not about yes, it's great that we share in the revenue growth and we do it a lot with, obviously, on e-commerce but for us it's more about making sure that we're focused on not so much on our profitability but as much as attaining the goal.
Speaker 2:So a better example would be like advertising. We place advertising for a lot of our clients, but I think the industry for agencies. Basically they take a percentage of that advertising and we don't. We have a flat fee for how much advertising we place. It's based on the hours it takes us to do the work. So I think we're a little bit different in that way, but we definitely, when it comes to sales and growth and things like that, we're performance based. On the social media side, it's generally a flat rate because it's very difficult to. I don't think social selling has turned into the boom that everybody thought it was going to be. Four or five years ago. I never thought it was going to be a boom. I think social is great for getting across your brand message. I think it's great for connecting with your customers and eventually that'll lead to sales. But I don't think people are gravitating towards the marketplaces to buy your product versus going on your website or Amazon.
Speaker 1:Yeah, 100%. I definitely agree on that. So, with this shift in technology, like the AI revolution and all that, we're obviously on quite a steep trajectory. Now Did you see your industry hitting? Yeah, where do you see your industry heading and have your goals shifted based on any technological changes that we've had?
Speaker 2:Yeah, that's a good question. Really, our goals are, a business hasn't really changed where we want to be. We just embrace technology as a tool to make things better Animation for things on social media, or anything that you can do. 10 years ago, 5 years ago, doing animations was cost of fortune. Today you can get them done very inexpensively using tools like through AI, and that helps enhance the result that you get for your client. So I think embracing technology just for us is making our jobs better, our performance better or the results better.
Speaker 2:As far as yeah, I don't really know how to sort of, I don't see any dramatic changes happening in my industry, but I will tell you that I do see a lot of bad agencies are falling by the wayside because they're sort of getting exposed as to the not knowing what they thought they knew. Because people are now getting wiser and there are agencies that are using these tools and coming up with great results. A perfect one are these advertising automation tools that have been out there for, whether it's Amazon or on the meta platform, that were just terrible. They're just the same old keyword driven. Get rid of this non-performing keyword. Blah, blah, blah. That's just such old technology. I think the AI products that are coming out are really showing that those things are just terrible. So I think you're going to see a lot of those go away, but we'll see.
Speaker 1:Yeah, 100%. I've seen quite a few social media influencers that have built their marketing agencies and are now selling courses on how to build your own marketing agency, which people will then learn and then sell their own courses. They're basically just doing it to create a business and not really to help their clients with more, to prove that they know what they're doing so they can sell their course. It's kind of like an endless loop. Well, I think I nearly got caught up in it, but luckily I did enough research and didn't go down that road.
Speaker 2:Yeah, I see those ads and they aggravate me. I see the ads about Amazon On LinkedIn. I have a bunch of friends and we sort of talk about this because we see these guys that are talking about I'll set you up with an Amazon store and you'll make a million dollars in a year. Amazon is hard work. I don't care who you are, it's hard work. I think it's disservice to people when you have these guys coming on saying I'll teach you how to run an agency or I'll teach you this how can you run an agency if you've never done it before? You're a guy who you watched the course and now you're going to teach people how to run an agency. There's more to it than just getting. I'll show you how to do B2B outreach so you can get clients. That's a difficult thing unto itself, yeah 100%, 100%.
Speaker 1:So we are running out of time here, but before we sign off, what advice would you give to other business owners that are looking to succeed in this industry?
Speaker 2:So other business owners that own brands or business owners that own agencies.
Speaker 1:I'd say agencies.
Speaker 2:So I think the agency side of it you really have to get in this day and age. You have to really get entrenched with who your client base is. You can't go too broad. Like I said before, we focus primarily on consumer products because we understand that, we understand consumers, we understand retail, brick and mortar, we understand the whole piece. I think you really have to understand who your customer is and then who their customer is, because once you understand who their customer is, then you can help them get to where they want to be.
Speaker 2:Too many times I think I've seen agencies that sort of have a they're one-trick pony. They have one specific way of doing things and we don't. We use all kinds of tools. We'll use PR if it's applicable. We don't do PR, but we have relationships with PR firms which can be very powerful for startups, For example, to get your message out there. We understand home shopping, we understand direct response television. We understand direct response video online. So we employ different tools depending on the product, but it all comes down to who the client's customer is and who they're trying to get to. So I would say that you really have to start focusing on customers and then you can help your client.
Speaker 1:Okay, amazing. Well, thank you so much for being on the show, Phil.
Speaker 2:Yeah, sure, thanks for having me.
Speaker 1:So, before we sign off, what is the best way for people to either get in touch with you or follow Phil Masiello? What's the best way if they're looking for an agency or advice, or just to follow your story?
Speaker 2:Yeah, well, I have actually two websites CrunchGrowthcom, which is my agency site, and you can contact us through there. We have contact forms, and then I also have PhilMasiellocom, because what I do is, again, I'm an entrepreneur and I've been an entrepreneur, so I mentor entrepreneurs at the University of Maryland School of Entrepreneurship, but I also have a show where I talk about entrepreneurship, and so at PhilMasiellocom you can go. There's some tools you can download for free. We're not trying to teach you anything. I've got a planning tool for if you want to do a startup, or tools to help you think through that. So if you're looking for mentorship or something like that, then go to PhilMasiellocom on the agency site CrunchGrowthcom. Either way, there's ways to contact us on there and you can follow me on social at PhilMasiello.
Speaker 1:Okay, amazing. Well, thank you so much again, Phil. I'm looking forward to following your story and we'll definitely keep in touch.
Speaker 2:Yeah, thanks, I enjoyed it. Thanks for having me.
Speaker 1:It's my pleasure.