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Michael B.: Hello folks and welcome to eCommerce QA. I’m your host Michael Bower and today I’m joined by Michael Perry, the founder of Kit CRM, which is an amazing app that can be used by Shopify stores. Hi Michael.
Michael P.: Hi Mike. Thank you for having me today.
Michael B.: Absolutely. So I was looking you up on LinkedIn and I noticed that I found not only you, and you have an amazing amount of accomplishments that I noticed, but also your assistant Kit is also on LinkedIn.
Michael P.: Yeah, that’s right. We really try to do everything that we can to kind of personify Kit and make people feel a little bit more comfortable about this reality that there is an opportunity to have Kit work for their business. We try to think about what people would look for or what avenues they would go down to do research when hiring somebody, and so it felt kind of appropriate to give Kit a profile on LinkedIn.
Michael B.: I thought that was great. I loved that. It’s called Kit CRM. CRM I think people usually think of oh like a huge contact database with the ability to do reporting on and add attributes to your fields, and that’s so different from what Kit is.
Michael P.: Yeah, I mean the truth of the matter is that kitcrm.com is a bit kind of a node to our legacy technology. We started back in 2013 after kind of crushing and burning and started before Kit, and the idea was that we wanted to build a CRM service for small businesses that really kind of helped them identify who is the most likely to buy their products based on their social engagement and build out some sort of customer database and prospect database out of that social engagement.
We spent about a year really kind of pushing that product and then in 2014 after thousands of conversations with merchants of all different sizes selling on all different platforms there was a common theme of a problem that they all had, and it really had nothing to do with software and it had everything to do with how many people they had working at their store and the challenges they faced by doing it by themselves. We were inspired to try to convert all of the technology that we had built into this kind of virtual employee that would help them leverage that CRM tool to drive sales for the business.
Michael B.: That’s so interesting that you went at it from a … Essentially CRM is related to marketing, but then you ended up finding that there’s an operational problem that you needed to solve that was kind of hiding underneath that problem. Kit, it’s a kind of cool name. Can you explain?
Michael P.: Yeah, again going back to the legacy thing, it was Kit back in the day, and it was just, it kind of all serendipitously tied together nicely, but Kit back in the day, I don’t know how old you are, I’m just shy of turning 31. I was a big AOL Instant Messenger guy and it was just this serendipitous thing that Kit was an acronym for keep in touch. We wanted merchants to kind of keep in touch with their business. I also sold cars in my past life and knew the ad performance kits to cars to try to give them more performance, and so the initial idea by calling it Kit was like they were adding this performance add-on to their store that was going to hopefully drive them more sales and then obviously keeping in touch with their customers was kind of the point of the whole entire software that we built anyways. It just kind of came together perfectly in terms of naming it Kit CRM.
Then as we ventured into this world of let’s not be a software platform, let’s not be a CRM tool, but let’s actually build a virtual employee, we just dropped the CRM and just went with Kit. Obviously kit.com was at the time a landing page, our parked page, which then Google bought, which then somehow got .com and so …
Michael B.: Sorry, didn’t mean to jump in there. It’s just it always give me so much hell. All good the domains have some really stupid landing page on them and you can’t acquire them unless you’re prepared to fork out.
Michael P.: It hurts. It’s a bootstrap business. We were bootstrapped at the time. We obviously ended up raising venture capital, but just couldn’t justify trying to buy kit.com so we just continued to roll with kitcrm.com. Hopefully some day kit.com will be the domain we own and we’ll just be officially Kit at that point.
Michael B.: Kit is good at a lot of things, and every single CRM that I looked at is typically not any good at. So what is the main thing that Kit is good at?
Michael P.: So I mean our focus is marketing right now. I grew up working in small family businesses. It’s what inspired me to build technology for small business owners. The number one thing that I kind of realize or wanted to accomplish first helping small businesses was helping them make sales. As a sales guy I use the CRM to prospect customers, follow up with customers, make sales. Initially we just didn’t think that there was any sort of technology available for merchants. The reality of it is that they just don’t have the time to actually leverage that kind of technology, and so we wanted to design a person that could leverage that technology for them.
We became a specialist with Facebook advertising. We’re a badge partner for small businesses in ad tech. So we crush it on Facebook ads, kick into email marketing, kick and send thank you emails to your customers, both new customers, repeat customers, do social posting for you. We built up an API that allowed for other app developers to build skills for Kit so that Kit can do more for merchants outside of the world of marketing. We just launched with a partnership with ship where Kit can help your logistics for you in their four major cities: San Francisco, Los Angeles, Chicago, and New York. We’ve worked with SEO partners, dropshipping companies, B2B invoicing businesses, other ad tech companies. So really we started with this really simple approach of trying to build somebody to help you with your Facebook ads, and overtime Kit’s been all kind of consuming to help people with other aspects of their business as well. We’re pretty good at these things.
Amazon has Alexa to kind of help you with your Shopify orders or turn on music and do all those kind of things. Obviously Siri is an assistant on your phone as well. I mean clearly what we want to be is that digital interface for Shopify merchants to run their business and to help them accomplish their marketing goals, and to either make their first sale or drive sales, so that’s absolutely the approach and the journey that we’re on right now.
Michael B.: It’s so exciting. Michael, can you talk about not all of our audience are using Shopify, although there’s a lot of … that might want to consider it. Talk to us about just how should small ecommerce merchants, even mid-size ecommerce merchants approach marketing in 2017.
Michael P.: Yeah absolutely. I mean before getting acquired by Shopify we were on five, the five major commerce platforms: Etsy, Shopify, BigCommerce, we’re actually on Tictail as well, and I guess Big Cartel is not one of the big players anymore, but obviously they were kind of a big deal and kind of pioneering in the space. We saw businesses of every size, of every GMV, from people who were trying to make their first sales, people who were making a million dollars a month, so we’ve seen everything. I think what’s radically important for people to realize, and I think that they think that just because you open up an online store people are going to just start funneling in and sales are going to be made. But really the reason why people pay high real estate for foot traffic is because you need people to walk in the door to make a purchase. Location is everything in brick and mortar retail. Facebook ads are everything or Google ads are everything for digital retail, for online, for commerce.
I think that people need to get very crafty and very well educated around the various opportunities that these platforms present for them to reach targeted audiences to buy their products and eventually drive and grow their business. It takes a lot of branding and it takes a tremendous amount of momentum for people to just stumble across your page or to be able to leverage various organic channels that you can get started with almost virtually nothing on Facebook ads and start targeting customers who you believe are most likely to want to walk in your store.
It baffles me. I go around the world now speaking at different small business conferences and the volume of people who still think that they do not need to run Google or Facebook ads to grow their business, or even have any sort of success with their business. I just think that the very few people that I’ve met who have been able to be successful with no digital advertising strategy are like so far and few in between. It’s like the comparison of every tech entrepreneur thinking they’re going to build the next Instagram. Those companies are far and few in between. You can still have a tremendous amount of success but you really need to have a strategy in place.
Michael B.: Let’s take a simple example. I had someone ask me something today. They said, “Hi Michael. I’m doing AdWords. I’m on Google shopping, using Facebook and Pinterest my traffic is really low.” Can you pretend to be Kit for a minute and tell me if I connect this fellow, his name is Kurt, not Kurt Elster, my good buddy who you’ve also met on this podcast, but what is Kit going to do for Kurt?
Michael P.: Yep. So when you connect to Kit there’s a lot of things that happen, one of course is Kit pointing your products and understanding your inventory. It’s also seeing if you have any sales and point in your sales history. I mean really quickly try to asses the business in an automated way, to basically understand the stage of the business. We start communicating with Kurt about should be a milestone or goal that they work towards together. For a lot of people it’s helping them make their first sale. I don’t know where Kurt’s at in his business cycle.
Michael B.: Let me tell you a little bit more about Kurt, how about that? So Kurt now sells like wood plaques, plaques that have like carvings on them. That was …from looking quickly at some SEO data it looks like he is ranking marginally okay on some of the terms and then on others not so well. So there’s probably some SEO stuff to do but let’s ignore that for the moment. I think he’s been in business for several years so definitely not his first sale. I think we’re more talking about a) I feel like I plateaued, how do I get to the next level?
Michael P.: Yes, so what Kit’s going to definitely do in this guy’s situation, in Kurt’s situation is it’s going to point all those customers that he’s made sales to over the past couple of years. It’s going to create what’s called custom audiences on Facebook. It’s going to hash those user IDs and find them on Facebook, and then basically what it’s going to do is it’s going to create something that’s called a lookalike audience that finds people on Facebook that best match those people, and it’s going to ask Kurt and propose an ad budget price to advertise to those people.
What’s going to happen is is that Kit’s going to go ahead and target the ad at those people, it’s going to optimize depending on again the stage of his business, it’s going to include pixel tracking with this advertisement that down the road they can do re-targeting ads. It’s going to build the ad, the image, the copy, obviously the audience inside it’s been created, it’s going to publish the ad and it’s going to continue to communicate with Kurt through the life cycle of that advertisement, how that ad is performing, what the return on ad spent has been, and if they’d like to obviously up the ad budget and continue to run the ad.
This is typically how the working relationship starts, it’s that in the case of Kurt he has sales history. Most people don’t understand how valuable first party data is, specifically on Facebook. It’s what makes Facebook a juggernaut, is that first party data is absolutely gold on Facebook. It’s going to best leverage and use that data and those learnings to help Kurt make his next sale and hopefully a lot more sales, and as time goes on with their working relationship, the performance of these ads are going to get more crystallized, tidier and perform better.
That is kind of how it would start. Where Kit kind of branches from there is as Kurt’s making sales from these ads, Kit’s going to send thank you emails, it’s going to propose email marketing campaigns to follow up and upsell these people, and they kind of start building this cohesive working relationship. Because we have machine learning and other things kind of in place, Kit’s going to start learning what Kurt doesn’t like to do, Kit’s going to start learning the budgets that Kurt’s comfortable with, and hopefully become an all encompassing employer to help grow his business.
Michael B.: That’s so amazing. I just needed to confirm this. But Kit is going to actually build the ads including the visuals, is that right?
Michael P.: Yeah, it does everything. Kurt will never have to build an ad ever again
Michael B.: Wow.
Michael P.: It’s been an amazing journey. We’ve been recognized by Facebook for a lot of these things. It’s just, it’s absolutely sensational like how many businesses Kit has helped become successful. We have reviews. People will tweet me and that Kit’s helped them make their first sale. I mean we’ve taken something that takes a tremendous amount of education to stay on top and stay abreast of all the new technologies Facebook’s offering, and in some cases people spend hours trying to build the perfect Facebook ad. Kit can do it in three text message responses. In some cases it’s one text message response. Kit’s always going to be looking for best marketing opportunities and practically reach out to Kurt when it sees a good opportunity to market a product.
Michael B.: I’m trying to figure out how I can use Kit because we, we spend a lot of money and time trying to get our Facebook ads working and they never seem to work as well as I want them to.
Michael P.: It’s a tricky thing.
Michael B.: For sure. You’ve done something pretty amazing with Kit. I’d like to understand your vision for the future. How do you see AI changing businesses, specifically ecommerce?
Michael P.: Yeah, well I appreciate the compliment. I’m happy you think what we’ve built is exciting. I think it’s still a massive work in progress. I mean the reality of it is is that I grew up in small family businesses. I painfully watched my uncle slog through things and try to build up his business and work his butt off and get everything he could to his business.
Michael B.: Micheal, can you tell me a little bit about this? Does family businesses … I have a kind of similar background.
Michael P.: Oh yeah, absolutely. My uncle owned a jewelry store. I grew up in a town called Alameda. It’s in the east bay just about 50 minutes just outside of San Francisco. He owned a jewelry store. Sorry about the background noise of the sirens. I’m obviously in San Francisco right now. We are in a city. He had a jewelry store on Park Street. It was a jewelry and coin store. I worked with him there for years. Before that he had a video store, worked with him there for years. My grandfather moved to Hawaii in 1966. He was the first person to sell carpet in Hawaii. He ran a carpet business for 30 years. My father ran a car dealership. It was not our family’s car dealership. It was a family owned business, had about 100 employees. I worked there for about seven years.
So I’ve kind of seen things of all sizes. Being a restocking boy for videos at seven, eight, nine, 10 years of age, to kind of being a shopkeeper, boy who sold coins and jewelry, to eventually helping my father sell cars and working in that family business and worked for my father for a long time. And then had the opportunity to learn a tremendous amount about building a business from my grandfather who had a pretty small operation but a very successful one in Hawaii for three decades. It’s been a great opportunity for me to learn at an empathetic level how hard it is to build the business and to understand what it takes for a small business owner to give everything that they have to this business, the sacrifices that come with it, not just financially, but time away from your kids, time away from your home, like all the things that people don’t talk about, the emotional stress of laying there in bed at night wondering how you’re going to pay your rent, how you’re going to get your PG&E bill.
I’ve been privy to all these things. But from stories from my grandfather and actually real life experiences from working with my uncle and working closely with my father, and so I’m supper passionate about these things. A long time ago I made a commitment that I was going to give my life to small business owners so that I can try to help them avoid some of these pains, and that’s kind of how really Kit came to be. I really hope for when we think about the vision in the future is that my goal as an entrepreneur and why I think I can impact the world is building the world’s best team with these people laser focused on this mission of building the world’s best employee so that small business owners have an opportunity to hire somebody that they typically cannot afford.
I actually, and we’re in this really weird unique situation where I actually don’t think, there’s all this, these ramblings about automation and AI taking jobs. Kit’s in this unique situation where we’re not taking anybody’s job. We’re actually giving people an employee that they can never afford to have in the first place. So I think we’re actually going to help the success rates in businesses go sky high.
I hope when I look deep into the future and see this world where a merchant could really talk to Kit in the same way I’m talking to you, whether it’s through my computer or my phone, and Kit’s able to help them make adjustments to their store, update their theme, help them list products, help them engage with customers, understand what’s the discount, understand the best marketing opportunity, understand when it should be marketed, how much it should be marketed for, AB compare Google ads to Facebook ads to Pinterest ads, like really kind of just be like this man and machine relationship that really propels them to a level of success they could not accomplish on their own. That’s what I’ve dedicated my life to and that’s what people come to work at Kit for. I’m really excited about what this future looks like and I think people are going to be really impressed with some of the things we’re building right now.
Michael B.: I can’t wait to know more about what you’re building Michael, I really can’t. Is there anything you’d like to leave our audience with that’s really practical other than go to kitcrm.com and install it?
Michael P.: I don’t want to plug our own product because …
Michael B.: Well I do. I want to plug your product.
Michael P.: Oh, I appreciate that. I think we super appreciate that. I think the one thing that I want to leave if I just had an open pin, open letter opportunity here, is that people are really fighting for them. The one thing that’s been the biggest kind of take back for me in joining Shopify is that there are a ton of crusaders at Shopify who want to make commerce better for them. And if they’re not on Shopify and they’re using Big Commerce or whatever, that’s totally okay too. There’s other great app developers who are fighting for them, who want to build technology for them, that I really hope that they understand that we all know it’s hard.
I think some people don’t understand it as well as others, but there is a genuine base on understanding that we understand that being a small business owner is terribly hard. I totally nod my head to them and tip my hat. I think if you’re listening to this I think you’re an incredibly courageous individual for being a small business owner and a pioneer in your own right. I would love to make myself accessible to help anybody. They can email me. My email address is email@example.com. They can tweet me at Michael Perry. If I can help a small business owner who’s listening to this right now, I would love to have that opportunity to help them.
Michael B.: Absolutely. Well if you don’t mind we’ll go ahead and put that in the show notes. Wow. Micheal, this has been such a … I’ve enjoyed this so much more than even I was expecting, and I really was expecting to enjoy it. I totally want to talk about this more offline and just understand more in-depth what you’re about. So thank you so much.
Michael P.: Oh the pleasure is mine, and then Micheal, thank you for having me, and I hope I can return to your show again soon.
Michael B.: Absolutely, absolutely. I’d like us to dig more into maybe some of the nitty-gritty on how to be successful across a variety of ad platforms.
Michael P.: Yeah, absolutely.
Michael B.: Well thanks again, and everyone as you know, the show notes are available at ecommerceqa.com and we will be releasing this show hopefully as soon as possible. We’re a little backlogged but I want everyone to start using Kit ASAP.