From Data Confusion to a Single Source of Truth, with Tradeswell’s Kathleen Booth

Think about all the data that you and your team look at every day: SEO data, paid search, social media ads, social media engagement statistics, sales trends, conversion rates, inventory, and more. What if there was a way to collect all of your retail, marketing inventory, and financial data into a single source of truth?

That’s exactly what Kathleen Booth and her team at Tradeswell are providing.

Deal Closers is hosted by Izach Porter and is produced by Earfluence.

Transcript

Kathleen Booth: Who knows what the landscape is gonna look like in a few years. But I think the lesson that so many brands have learned over the course of the last two years is that the rug can be pulled out from under them at any moment. Right? If you build your business entirely on these third-party platforms where you don’t really have control, you have a, a real element of risk, to your future growth.

Izach Porter: All right, you are listening to the Deal Closers Podcast, brought to you by websiteclosers.com. A show about how to build your e-commerce business to be profitable, scalable, and one day even sellable. I’m Izach Porter, and on the show today, we have Kathleen Booth, senior VP of marketing at Tradeswell, an operating system that allows you to throw out your spreadsheets and let them provide at a glance insight.

Think about all the data that you and your team look at every day, SEO data, paid search, social media ads, social media engagement statistics, sales trends, conversion rates, inventory, and more. What if there was a way to collect all of your retail, marketing inventory, and financial data into a single source of truth?

That’s exactly what Kathleen Booth and her team at Tradeswell are providing. So let’s bring her on to the show. Hey Kathleen, how you doing?

Kathleen: I’m great. Thanks Izach. Thanks for having me.

Izach: Yeah, thanks for being here. Really, really excited to, to speak with you. So, you know, as you know, at websiteclosers, we talk with eCommerce operators who are getting ready to sell their businesses.

And one of the things that’s been apparent to me is there is a big differentiation in the performance of the business based on kind of the sophistication of the operator and how well they’re tracking the data that is driving their business. And it can be really hard for e-commerce owners to keep their hands around what matters, And I want to ask you a few questions about how Tradeswell helps with that and, and kind of how you see that evolving with the advent of artificial intelligence. But I wanna talk about you a little bit first. So you’ve had a really impressive marketing career so far, you were named one of the top 50 B2B marketing influencers by top rank in 2021.

You could have gone many places, but earlier this year you decided to join Tradeswell, what attracted you there?

Kathleen: It was a couple things., one is, you know, I had been working in e-commerce and I saw the opportunity that Tradeswell was, was addressing, you know, the problem it was trying to solve, which is this, this problem of massive complexity of data involved in multichannel eCommerce. And I just thought that it was really exciting.

I thought the opportunity was huge. The time was right. And then on top of that, I think it was the team. One of the people who was very involved in the company’s founding is a man named Paul Palmieri, who was the founder of a company called Millennial Media, which several years ago IPOed.

And so he’s, he’s really been through massive scale successfully and he knows what it takes to take a company from an idea to a, a massively successful public company. And I wanted to learn from him and from the other people at the company, we have a, an amazing team. We have a, an incredible, you know, Chief Product Officer and we actually have a new CEO now who’s very accomplished.

And so it was exciting, the opportunity to be mentored, combined with the market opportunity. And the problem we were solving was too good to pass up.

Izach: Cool. Cool. So, give us like a 30,000-foot overview of what Tradeswell does and how it works.

Kathleen: Yeah, absolutely. And so I would say that, as table setting for that, we talk at Tradeswell a lot about the emergence of the real time commerce economy and what we mean by that and why it’s relevant to Tradeswell is that, you know, we’re, we’re living in a time of, of massive growth in the world of e-commerce and some of it’s been fueled by the pandemic, but it’s also been fueled by this explosion of opportunity in channels.

So e-commerce sellers today have the opportunity to sell direct to consumer and be very digitally native and, and sell through their websites. Or there are all of these marketplaces, you know, everything from Amazon to retail companies that now have marketplaces like Walmart and Target. marketplaces, you know, there’s, there’s so many options to meet the customer where they prefer to shop, and that represents tremendous opportunity, but it also represents tremendous complexity.

, and then on the other side of that equation, you have all these different marketing channels. Facebook, Google, Tik Toks, Snapchat, you know, plus SMS and email and, and it’s just a lot. It’s a lot. And Tradeswell is, is our goal is to empower brands with a platform that pulls all of their most business-critical data into one place, enables them to organize it and view it as they wanna see it.

Not as the marketplace shows it to them or the, you know, marketing channel chooses to show it to them, and speed the time from data to decision to action. And so how we do that is we’ve built a data platform that is integrated with a lot of these different sources. We pull the data in, we normalize it at the skew level, which is really important, so we can marry up your data.

From your Amazon ASIN to your Shopify skew, to your G 10, if you have one and show all of that data in one place, and then we have an AI layer on top of it that surfaces actionable insights and effectively tells you what your to-do list is to optimize your business for profitable growth.

Izach: That’s awesome. So I wanna dig into that a little bit more, cuz you, you said some things that really got me thinking there. So one of the themes that I’ve seen in eCommerce M and an over the last 24 months in particular are brand aggregators who are specifically good at kind of optimizing this kind of omnichannel distribution for businesses.

And they’re, they’re specifically looking for brands that are maybe out in one channel and they’re expanding into multiple channels. I think part of the value add there is they’ve got these whole teams built out to do what it sounds like Tradeswell does for an individual operator, an individual operator with this technology from understanding you correct can, can look at this data across multiple channels and synthesize the information into something usable without needing a full team to kind of back them up.

Do I have that kind of right? And is that, does that represent a big opportunity for an operator to maybe enter new platforms? If they’ve got the ability to manage the data coming off of all those platforms?

Kathleen: Absolutely. And we, fun fact, we actually have several aggregators that are customers. And so, you know, this is like the secret sauce that they have is they, they use our platform, and they have a special use case cuz not only can they see, for example, brand by brand performance in our platform.

They’ll have separate instances of it with, for each brand, and their brand customers, will be able to, you know, see some of the data as well, but they can see their entire portfolio if they want all in one place. So we have that option, but, but certainly for individual brands, yes, this gives them the, the same tool set that some of the aggregators are using to do exactly that to power multichannel commerce.

And I think what’s so important. And you, you alluded to, this is. Machine learning and artificial intelligence are, are entering the e-commerce battlefield, which is already a very contested battlefield with, you know, things like inflation and supply chain challenges and pandemics and changing customer behavior.

There’s a lot going on and, and a lot of, a lot of the opportunity today is algorithmic, meaning, you know, if you’re selling in a marketplace, your product’s positioning on the digital shelf is determined by an algorithm. Similarly, if you’re using typical marketing channels to advertise your product, your ad placement is being determined by an algorithm. And so all of these different, you know, retail and marketing channels are algorithmically driven, and then you have brands that need tools and they need data and they need real time access to data that allows them to move at the speed of the algorithm so that they’re able to take advantage of all those opportunities to optimize placement on the digital shelf, to optimize ad spend, et cetera, mix it all up, to get the best outcome for the business.

And. Yeah. I mean, it’s about pulling the data in it’s about having it updated in real time, having easy, quick access to it, having your whole team be able to access it. So not just your marketing team with access to marketing data, you know, you really need to tie all the different parts of the business together and get finance and operations and marketing and retail looking at the same source of truth so that you have this aligned decision making and you can move quickly.

Izach: Yeah. Yeah, it’s cool. So I want maybe this,, and I was just thinking about this as you were, you were speaking, you know, old school marketing versus new school, AI backed, data-based decision making. You know, what’s more important right now. Is it having access to this data and knowing what to do with it? Or is it kind of having an authentic brand story that resonates with a consumer in a, in a, in a product that’s meaningful or, or do you really have to have it all? 

I mean, I mean, 

Kathleen: I think it’s a combination of both, right? I wish I could say it was one or the other would make our lives much more simple. It’s both. I mean, there’s no denying that we are living through a time when performance advertising is more challenging than it’s ever been because of things like iOS 14 and, you know, we’re soon to be supposedly the death of cookies. I feel like it’s always coming soon, but it hasn’t happened yet.

You know, it’s just getting more challenging, which is not to say that it doesn’t work and you shouldn’t do it, but it’s harder. And so brand has emerged as being more important than ever. And also I think the last few years with the pandemic have taught us that, you know, we really need to throw our support as consumers behind the brands we love so that they’re able to weather these kinds of storms.

So yes, you should be in investing in brand. It’s very important. And, and to determine your why, and to convey that and, and to live by it. but you need to really also be data driven. There are different, it’s a continuum, right? Like not every brand is gonna have complete mastery of their data today, but what is important to think about right now is that there is this increasing move towards the use of machine learning and artificial intelligence to run our businesses. Right. And, and we’re not entirely there yet, but this is the direction things are heading. 

What you have to remember is for machine learning to work, you need fuel for the machine and fuel, in this case is lots of data. That’s how machine learning learns. It looks at a lot of data. It crunches the information and it figures out patterns and trends, and then is able to give you recommendations and answers. So what we are really advising brands right now is to prepare for that future that is machine learning driven.

What you need to focus on today is actually gathering the data and, and gathering it in a way that’s useful and usable to you. So that when you’re able to layer on machine learning, you have that fuel to feed the machine. And that’s really where I think most brands are challenged is, you know, when you’re selling an Amazon, when you’re marketing on Facebook, all of these marketplaces and all these marketing channels, they’re walled gardens, which is just a fancy way of saying they kind of have you hostage, cuz they control your data.

They decide how they’re gonna show it to you when you export it, it’s in their format and that’s not always the best format for you to make decisions about your business, for example, how Amazon categorizes your product might be not be how you categorize it on your own site., wouldn’t it be nice if you could extract the data and put it in the category that you want?

So that’s really what we’re trying to help brands address is getting control of their data, owning their data, and then being able to package it in a way that makes sense for them and the decisions that they’re trying to make about their business.

Izach: Yeah, that’s, that’s super interesting because,, as I speak with operators and I, and I have the advantage of getting to, getting to talk with a lot of e-commerce business operators, the KPIs that the founders track are largely based on the platform that they’re operating on. So, you know, Amazon sellers track PPC and Shopify sellers, you know, will track revenue and, and maybe customer acquisition costs. 

But, I think the, the, the question I have is for, let’s say a one-person business, a brand, an e-commerce brand with, with that’s being operated by a, by a single founder, you know, what are the data points that they should be analyzing each week to kind of effectively drive their business? And does, does Tradeswell, is that, is that the same data points for each business or does Tradeswell differentiate based on the distribution channel, what’s important and kind of how, and kind of guide an operator to look at the things that really are gonna move the needle.

Kathleen: Well, you, you definitely hit the nail in the head that depending upon the platforms you’re selling on, there certainly are some very specific things that you would wanna track. A good example of that is if you are in Amazon, for example, you’re looking at buy box win rate. Well, there’s no such thing as buy box win rate. If you’re selling D2C on a Shopify website, right? Like. It’s not a, it’s not a metric for you. So, you know, you gotta, you gotta track those things if they’re important, based on the channel, but there are definitely some universal metrics that I think are important to track and, and, you know, it’s all the usual things that, that any e-commerce or any product-based business would wanna look at, things like inventory forecasting, understanding, you know, breaking down on inventory, what are your fulfillable units versus inbound units, reserved units, net received, et cetera. On the finance side you’re looking at not just sales, but net margin, your landed costs, including fulfillment costs, chargebacks, refunds, shipping fees, et cetera., 

you also wanna look at promotion costs, like are you offering discounts and, and, and those sorts of things. In the marketing side, its ad spend ad attributed sales, conversion rates, impressions, and then you have a whole host of retail metrics or gross margin, lifetime value, customer retention, things along those lines. I think most business owners are familiar with most of those. The, where I think sort of that the problems happen is in two areas. One is that they have all this data, but it’s a very manual slog to compile it. And in fact, you, you guys work with brands that are trying to, to sell their business or trying to get acquired.

And we hear this all the time. I don’t have time to do X because I’m talking with investors and all my time has to be spent putting together the data they need for the transaction, and that, that really reflects what we heard. So we surveyed 300 plus e-commerce leaders last year. And one of the things we learned was that they, their teams and they spend on average 20% of their time wrangling data. That’s a day, a week, a full day a week. So you’re losing 20% of your time effectively doing manually what there are plenty of tools out there that could do automatically. I mean, that’s, and that’s literally our value proposition and you get a day back in your week. like, I feel like that’s in any business is it’s huge.

Having a tech stack that supports your ability to add a glance, see up to date data, and to have your whole team align around it is really important. And that’s something that you’re gonna need, whether you are keeping your business and running it in perpetuity, or you’re trying to sell it because investors are gonna wanna see all this as well.

And they’re gonna wanna see how it’s changing dynamically over time and be able to look back at historical trends. So that’s crucial. That’s number one. The second one though, I think is, is a systemic issue in eCommerce which has been fueled by the advertising industry. And that is this over emphasis on return on ad spend as the north star metric. And there are a lot of reasons for this. I mean, I think there’s been talk in the industry for years about ROAS not being a great metric, but nobody seems to be moving away from it. And I have a theory about why that is. I think it’s partially because, you know, it’s the metric that marketers track.

I’m a marketer. We like it because we don’t need anyone else to be able to track it. We have all that data at our fingertips. It’s in our control. It’s a lever that we can affect relatively easily, but the other thing is that this is how a lot of ad agencies are paid is based on ROAS and so there’s a systemic, kind of ingrained marriage to ROAS as the metric, because that’s how, how compensation schemes are set up.

So why that’s a problem is ROAS is a top line metric. It is literally how much sales did you drive from your advertising spend? So for every $1 spent on ads, how many dollars of top line sales did you bring in. On the surface, it seems like a very good metric, but now more than ever right now, I think people should understand and appreciate why it’s a problem.

And the reason I say that is we are living in a time of unprecedented inflation and supply chain challenges, et cetera, where top line revenue does not necessarily equate to profit, Like if your costs are increasing through inflation or your shipping and logistics fees have gone up, or you have inventory shortages, you, you have to look at net margins, because otherwise you could be funneling ad dollars into products, the, you know, promoting products that either you don’t have the inventory F to fulfill, or that are frankly unprofitable.

Izach: Absolutely.

Kathleen: So I think to me,

Izach: You can drive a lot of revenue without driving any profit, yeah.

Kathleen: Exactly and well, and sometimes for good reason, right? Like sometimes you’re promoting a product that’s not very profitable, but because you’re able to see the lifetime value. And you’ll also able, you’re also able to see kind of through cohort analysis and customer journey analysis, you can see maybe that product is a loss leader and you might lose money on it as the first purchase, but it then drives other purchases that do make you a lot of money and that’s great. And that’s a great example of how having access to really good data can help you make more informed decisions. But just looking at ROAS is very comfortable, but unfortunately can lead to really suboptimal decision making.

Izach: You also mentioned ad attributed sales, how is that different than ROAS?

Kathleen: It’s I, I mean, I don’t think it is honestly very different. It’s, it’s, it’s another way of phrasing it, you know, and, and there might be some people who, who measure it slightly differently, but in our world it’s effectively the same thing.

Izach: So, what do you think is a better metric to measure efficacy of advertising now, given kind of the, the current state of economy and inflation and margin pressure that a lot of brands are experiencing?

Kathleen: Yeah. So we call that metric net margin contribution. So for every dollar you spend on advertising, how many dollars does that contribute to your net profit margin? So that’s revenue minus landed costs.

Izach: Yeah. That makes sense.

Kathleen: Yeah. And I mean, you know, if you think about it, I, I, it, I feel like marketers should be excited to make, to shift their focus to this, because if you’re able as a marketer in a time like this, when everybody’s budgets are getting zero based and questioned, if you can go to an owner, a CEO, a CFO, and say, hey, for every dollar you give me to advertise, I’m able to contribute two to our profits.

What that does is it changes the conversation from here’s your advertising budget to guess what you have an unlimited advertising budget. It’s like going to Vegas and saying, I guarantee you’ll double your money on at a, at a table. Why wouldn’t you just keep gambling forever? Right? Like it’s a different conversation and it changes, I think the strategic position of the, the marketing or the growth leader within the business.

Izach: Yeah. Or, or if you’ve got a, a defined outcome for your investment, then it’s not gambling at all.

Kathleen: Exactly. This exactly

Izach: I wanted to ask you another question around the economy. So we we’ve got increasing inflation. We’ve got brand, you know, I’m seeing in, in my business brands that are under pressure with, with margins. What other performance indicators should these brands be tracking? I think the, the margin contribution seems like a, a great one, but what, what else are you seeing that’s new or that maybe Tradeswell does, particularly well. yeah.

Yeah. 

Kathleen: Yeah I mean, I think to us, the margin contribution would be the north star, and, and I think the reason for that is that we are we’re coming out of, of a time period when deliberate choices were made by a lot of brands to not focus on that because, and the same thing was happening in B2B software, right?

Like we’re, we’re a B2B software company and venture capital backed companies often have a mandate to grow at any cost to acquire users or customers, very often in a way that’s not profitable because they’re getting ready to position themselves for either an acquisition or another round or what have you.

And that makes their valuation higher. I think that that time is, is, I don’t know if I wanna say ending or pausing, the growth at all costs era. Everything I’m hearing from VCs right now is make sure that you’re gonna weather the next couple years, extend your cash runway, right? And so that’s where making sure that you are funneling your dollars behind things that are going to contribute to profit and not just growth is so important.

But I also think in general, it’s about looking at your ad spend and making some tough choices about channels, and, and closely looking at customer acquisition cost versus lifetime value. You know, this is a metric that we track and SAS as well at CAC to LTV and really thinking about how you can maybe change your product bundles to make them more profitable.

The other metric that we talk about that is sort of unique to us is called the marketplace multiplier, and this one’s really interesting. Not every brand is, is selling multichannel. I think increasingly a lot of them are these days, right? If you’re D2C, you’re probably, if you’re not on a marketplace, you’re looking at them the question or the doubt in most company’s mind is, is it gonna be profitable?

Right? Like, I just did a round table. I hosted one where somebody said nobody ever sells on Amazon to make a profit, which was interesting. We actually crunched the numbers. We have like 500 plus brands that are on our platform. And so we were able to see for every hundred products you sell, for example, on, through a Shopify site, how many do you need to sell on Amazon to realize the same net profit?

And the answer actually surprised me. It was 108. I thought it would be much higher. So I, I think brands need to. Consider marketplaces for couple reasons. So that’s, that’s what we call the marketplace multiplier. So understanding like the difference in margin on each different type of marketplace is key, but then coupling that with an understanding of the reach it can provide and, and the opportunity that you would then have once you’ve acquired a customer.

So going onto Amazon, for example, it’s not just about selling on Amazon. It’s about expanding your customer base because of the tremendous reach that Amazon has, and looking at that as an opportunity to convert those Amazon shoppers into shoppers on your other channels. So how can you get, you know, get somebody to make that first purchase on Amazon, and then whether it’s through the,, way you handle your packaging and offers inside of that packaging, can you draw them back to your site and either get them enrolled in a subscription where they’re buying directly from you?

Or is there some other way that you can steer that customer journey so that they become your first party customer? I think a lot of brands are increasingly focused on that and they see that if they’re gonna achieve growth and they’re gonna do it profitably, that’s really where the focus needs to be.

Izach: Yeah, I’m not sure. Sure. Amazon wants, wants people to think of that, think about it that way, but it makes sense to me. Kathleen, you’re not just a marketing exec. You also provide startup mentorship. What’s one non-data piece of advice that you can give to someone who’s just starting out in the eCommerce space?

Kathleen: So actually it goes back to a question you asked me earlier and that has to do with brand. I do think brand is more important than it’s ever been, you know, it’s not to say it wasn’t important before, but a lot of companies for many years were able to experience tremendous growth, despite not having built a very strong brand because performance advertising was functioning so well for them.

Those returns are diminishing. You know, like I already talked about this apples iOS 14.5 came into effect and it’s made it much harder, harder to, to do retargeting and to use Facebook, for example, you know, you have other changes, also due to Apple where you can’t trust your email, open rates anymore.

Google’s talking about getting rid of the cookie. Who knows what the landscape is gonna look like in a few years? But I think the lesson that so many brands have learned over the course of the last two years is that the rug can be pulled out from under them at any moment. Right? If you build your business entirely on these third-party platforms where you don’t really have control, it’s like I talked about earlier in these walled gardens, you have a, a real element of risk, to your future growth.

And so more and more, the smarter brands are seeing that to Futureproof their businesses, they can still be active on all those channels, but they need to build a strong core of first party customer relationships and first party customer data, and the way to do that is to start with building a very strong brand.

And, you know, and I think also you see generationally younger consumers are drawn to companies that have a very clear, why, and, and sort of mission driven or cause driven brand. So, not every brand is, is going to gravitate in that direction. But I think just really deeply understanding who you are, why you’re in the business, you’re in, standing behind that and having a degree of authenticity is, is so crucial.

And then that can provide the springboard for so many opportunities, things like building community, you know, which is a great way to, to really own your audience and not have to be so reliant on third party walled gardens for access to them.

Izach: So you mentioned previously that, that one of the advantages of, of your platform is that it, it saves entrepreneurs time in, in that they’re not, they’re not kind of manually gathering this data. One of the trends that I’ve seen, that I know is a value driver in the exit process for entrepreneurs is, is access to data buyers.

Ask a lot of questions about, about KPIs and performance and inventory management and sourcing. And I know for a fact that founders that have good data, not only can answer those questions, but they actually get paid a higher, multiple on the sale price of their business. And so I, I think from my perspective, there’s a, there’s a real value proposition.

Not only in, just more effectively managing the business and, and generating more profits, which will lead to a higher valuation, but then being able to produce meaningful statistics and analysis to a potential buyer, to explain why you’ve made the decisions that you’ve made, and I think that could, that could be really interesting to integrate even for a company that’s looking to sell in the short term to, to have access to this, this type of data while they’re going through an exit process could be a big value add for them.

Kathleen: Yeah, absolutely. I mean, I mentioned it earlier. We’ve spoken to a number of companies who’ve said like, I don’t have the time to think about, you know, marketing or advertising strategies, cuz I’m in conversations with investors. And I feel like all my time is taken up by putting data together and it’s like, well, how ironic is it that the very same data that you’re trying to put together for investors is the data that you would need to make more informed choices around marketing or advertising or merchandising or operations.

Like it, it all starts from the same basis, right. It it’s about having the right information, being able to contextualize it and making good decisions. And that’s exactly what the investors are looking for as well. And so it’s, it’s ironic that we, we kind of look at the situation and say, I don’t have time to think about those things because I’m putting the data together.

When, if you just put the data together in a way that was more scalable, you could be doing all of the things cuz you’d have the right information and you’d also have probably a day in your week back. so.

Izach: For sure everybody wants eight days a week.

Kathleen: Yeah, it’s, it’s my husband is famous for saying sometimes you have to slow down to speed up. And I think investing in putting in place the right tech stack, that gives you the, the good data is exactly that like, you might slow down briefly, but it’s gonna speed you up dramatically after that.

Izach: Right. So Kathleen, how can our listeners connect with you?

Kathleen: Well, you can certainly find more information on Tradeswell and, and also connect with me via our website, which is tradeswell.com and you can reach out to me on LinkedIn. I accept all connection requests and I would be happy to answer any questions or chat with anyone there.

Izach: Awesome. All right. That was Kathleen Booth with Tradeswell, you can find at tradeswell.com also be sure to check, check out Kathleen’s podcast, Inbound Success, which recently passed over 250 episodes. That’s awesome. 

Thanks everyone for listening to this episode of the Deal Closers Podcast brought to you by websiteclosers.com. If you like this show, be sure to rate us, write a review and press the follow button, share with your network. And of course, if you’re looking for help selling your eCommerce business, be sure to visit websiteclosers.com. This episode was edited and produced by Earfluence. I’m Izach Porter connect with me on LinkedIn, and we’ll see you next time on the Deal Closers Podcast.