Resources for Buying and Selling Online Businesses

Former CMO for Thrive Market (and GM for JustFab) Talks Subscriptions (for Anything)


Evan Padgett

Evan Padgett is the Chief Operating Officer at Stealth Venture Labs, a team of veteran marketers with full-stack experience who are focused on driving profitable, high-lifetime value customers at scale. He has over 20 years of experience working in the internet and market research. Prior to his work with Stealth Venture Labs, Evan was the General Manager for JustFab and ShoeDazzle brands in North America, the Director of Analytics for Intelligent Beauty, and the Marketing Manager for Fox Interactive Media: Alena Division.

Here’s a glimpse of what you’ll learn:

  • [03:14] Evan Padgett introduces Stealth Venture Labs and his role in acquisition marketing
  • [09:12] Evan talks about the scrutiny of earlier subscription models and how they evolved over time
  • [12:21] Generating recurring revenue in the form of a brand subscription model
  • [17:35] Why curation and customization are crucial for a successful model
  • [23:38] Evan shares the importance of smoothly offboarding a client to keep a positive voice
  • [29:06] Evan discusses how easy returns can create loyal customers
  • [35:27] What subscription options are available on different platforms?
  • [39:55] How can Amazon capture customer information to build a subscription model?

In this episode…

How can you build a subscription model with a healthy customer service base? Is it possible to create consumer desire and demand for your products?

When you take care of your customer, the dominos fall in place to generate a better business and greater profits. How? According to Evan Padgett, the key is engaging with consumers over social media to create lasting connections. By developing a consumer need for your product — and with a good customer service department — you can succeed with a recurring revenue model for your subscription service.

Join Joe Valley in this episode of the Quiet Light Podcast as he sits down with Evan Padgett, Chief Operating Officer at Stealth Venture Labs, to talk about developing a rich subscription model for your brand. Evan discusses the evolution of the subscription model, the revenue power behind a customized model, and connecting and establishing an enduring relationship with your clients. Stay tuned!

Resources Mentioned in this episode

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Episode Transcript

Intro  0:07

Hi folks, it’s the Quiet Light Podcast where we share relentlessly honest insights, actionable tips, and entrepreneurial stories that will help founders identify and reach their goals.

Joe Valley  0:32

Hey folks, Joe Valley here, welcome to another episode of the Quiet Light Podcast. Today we’re going to talk with a guy named Evan Padgett. From Stealth Venture Labs, Evan has had experience and investments in thrive in politics and savage X, all sorts of companies and brands that we’ve all heard of, that have done some pretty damn impressive stuff. He’s off on his own now with Stealth Venture Labs. And I knew when probably two or three minutes into the pre podcast interview that I always do now I just wanted to have him on because he just a very likable guy, we honed in on this podcast on subscriptions, because he’s got a ton of experience on subscriptions. Now, if you have a product where it’s, you know, a shirt, a shoe, a grill, a grilling apron, and you’re thinking there’s no way to do a subscription with it, hang on Evan’s, coming up with a number of different ideas, where you can add subscription revenue to it, he goes through some specific specific examples, and talks about some of the worst possible ways to do it as well. So it’s a great interview, go all the way through to the end, that’s where some of the best nuggets are. And he gives out his details at the end as well. He’s a guy that would just love to chat and help out in any way that he can. So here we go. It’s Evan Padgett from Stealth Venture Labs focused on subscriptions in e-commerce, and some for Amazon as well. Here we go. Evan, welcome to the Quiet Light Podcast. How are you man?

Evan Padgett  2:08

Good, good, Joe about yourself.

Joe Valley  2:10

Not too bad. Good to have you here. Good to have you here. Normally, I would tell people all about you in great detail, but I want to hear it from you. Who is Evan Padgett? What is Stealth Venture Labs. What the heck do you do that kind of stuff.

Evan Padgett  2:23

All right, well buckle up long story. We’ll take the whole time here and just get through it. Now. I’m Evan Padgett. I’m Chief Operating Officer here at Stealth. Stealth is a e-commerce agency and incubator for brands. Mostly, most of our businesses trying to grow brands that are already spending on advertising, typically direct to consumer ecommerce brands such as mud water, HelloFresh, factor 75. Others like that.

Joe Valley  2:50

As your client, I almost I almost ordered some of their products the other day.

Evan Padgett  2:54

Pretty good. He said, I got an ad for you click on one of those.

Joe Valley  2:58

I think I did. I think I did. Anything.

Evan Padgett  3:02

Oh, oh, you gotta get hit with retargeting, you know, this girl’s gonna be retargeting and you’ll eventually get it. But now you have a personal endorsement, too. So we’re also so we do we do acquisition marketing, for a lot of different brands, focused on direct to consumer high emphasis on subscription commerce, namely, due to my bigger background, I’ll talk about that in a second. And then we also have an incubator arm where brands come to us and say, Hey, we have this idea, get it off the ground. We do everything email website, CRO acquisition, marketing, branding, sort of to help get it off, you’re on uneven feasibility testing, if you’re like, not sure about it, and you want to see what it looks like, with the marketing could look like we do that as well. But now, that’s a bit about Stealth, about me. So I’ve been doing this for about 20 years. Actually, this is my 20th year in internet broadly speaking. The short version is I started my journey back at a company that was called intermix media. Most notably for its sell of Myspace, the Fox Interactive Media back in 2005. So I worked at a company on my side but yeah, is that I don’t know there’s this guy named Tom who does some stuff and you know you can you put code on your is that most people learn how to do HTML really.

Joe Valley  4:22

Like my my 20 year old would know what MySpace is they

Evan Padgett  4:25

wouldn’t so that was part of the company but I was on a product marketing division and we were selling all sorts of crazy stuff on the internet the early days, let’s say crazy stuff. I’m plugging like Simpsons bottle openers, little micro RC cars, all sorts of health and wellness products that don’t exist anymore on a negative option continuity, basically. So that is is basically Hey, you’re gonna try this today. It’s a free trial and then in 14 days, we’re gonna bill you and then you’re gonna get billed every month thereafter and until you find a way to cancel, we did that and they held them on MySpace and all sorts of stuff, that a group of people when Fox bought a company from MySpace didn’t want anything to do with the product marketing side. That’s not what Fox cared about. So the people that were on that they all jumped, I joined up a group of people that ended up building a company called intelligent beauty. Adam Goldenberg and Don Ressler, a couple of really close friends of mine and the CEOs of a company that’s now so the evolution of that is now textile fashion group, house a women’s fashion brands like fab ludecke, Saba, Jack’s just fab and shoedazzle. But I grew up at that company. In the early days, it wasn’t fashion, it was more health and wellness, I did analytics, I did conversion rate optimization of sort of dabbling into marketing there, moved into acquisition marketing sort of took on about 20 other jobs growing up at Kabuto. Eventually, I ended up running the JustFab and shoedazzle brands sort of as the brand president and GM, as Adam moved into a global CEO role because that brand quickly ballooned to to a gigantic global brand with offices and you’re up and everything like that. So I ran those brands together.

Joe Valley  6:06

Are you wearing any of those clothes right now? Just out of curiosity, maybe, maybe maybe not going to stand up? Yeah, you

Evan Padgett  6:12

know, I tweaked the hammy, I don’t want to stretch. Stretch before this. Yeah, no, no, you know. So I ended up running to those brands for while managing a pretty good p&l. Huge team loved it. Fun company. But honestly is like at that time, I worked with those guys for 15 years. I was like, I want to see what else the world has to offer love them to death. But I’m like, I got to see what else exists out there. Also, we had a kid me and my wife had a kid, we were in the bout to have another one. I’m like, I’m gonna take a year off. Well, two months into that year, I got introduced and landed at a company called Thrive Market. And they were just up and coming out of LA. And they’re still really awesome, awesome company, awesome mission. Love that team. Really, really cool operation. I jumped on as their Chief Marketing Officer, their first chief marketing officer, they’re really focused on scaling that nothing to do with me. But while I was there, they raised like $111 million. And I’ve just been on this rocket ship ever since then. But after a year and a half, I was sort of have the mindset of like, I like operating companies. I like really not being not that I’m against marketing, because I spent most of my career in marketing, but I didn’t want to be just a marketer, I really wanted to operate a business. Decided that really was for me, went back to my time off, played around in LA met a lot of people that worked a little bit and met my business partner here at Stealth. And the rest is history. Me and him been working together for five years, building this thing up and it’s been a really exciting run. And he’s Breton Freeman, my business partner here. The original founder here at Stealth is just an amazing guy. Really awesome entrepreneur, serial entrepreneur. We run for anyone out there we run entrepreneur operating system, Entrepreneurial Operating System, Eos, I’m a classic integrator, he is a classic visionary. So we work really well together believe in that program. Do very familiar

Joe Valley  8:00

with that absolutely vary from that’s a hell of a resume, you got man. dropping names and everything pretty yeah, pretty solid stuff. Cool. Now, given all your experience, given all of your travels and with companies that our worldwide, we’re very well known, one of the areas that you are focused on and highly talented and that we’re going to try to focus on today a little bit, or at least I’d like to if that’s okay with you is, is subscriptions, right? Yes, I think it’s, it’s something I, when you and I chatted before we recorded, you know, where I came from, the company that I sold to quite late in 2010 was a subscription based company 30% of the revenue was recurring. I love when companies come to us want to exit and they’ve really got their subscription side of things dialed in. Not everyone can do subscriptions. So what let’s talk about the benefits and drawbacks of subscriptions. What people should focus on what people want, what you would say avoid and what other people do, right. All right. So

Evan Padgett  9:06

all in one answer. Ready, good to go. So subscription and recurring revenue model. So I’ve been one thing you notice about my background is I’ve been in subscription models my entire career. And one thing’s for certain is its subscriptions change. It certainly was met with a lot of resistance. If I date myself back to the early to mid 2000s. Very, very resistant. Nobody liked recurring revenue models. Nobody liked to be a part of them. They were met with a lot of scrutiny and candidly a lot of them were done really poorly and a got a really bad rap because people I’ll include myself in that we’re trying to make a subscription out of anything. Anything, didn’t work, didn’t always work. So then the subscription itself evolved over time you had tools come out like the Netflix’s of the world and some modifiers and all these other types of tools that started having recurring revenue models and they started paving the way for how to do subscriptions better as in like create consumer sentiment, create a Demand and create a desire because ultimately, any recurring revenue model, right, it needs to have some benefit to the consumer to keep them coming back. You’ve given them a bill like a recurring bill, not like not unlike your phone bill, your mortgage, your rent, whatever your water bill, you have now a bill so how does that deliver every time so I’m a huge fan of subscription and how to do subscription I believe that most products out there, e-commerce products direct to consumer, SAS, you can find and discover a recurring revenue model. It may not be where you think it is, and it may not be all of your business. But you can find one and launch one

Joe Valley  10:57

go right to examples from me there because people go Damn man I run. I have a grilling apron Brant, I sell kitchen supplies.

Evan Padgett  11:08

Grilling a brand. Partner figure out how to launch your own charcoal, right? It’s a consumable thing with a subscription, beautiful when it’s a consumable best subscriptions in the world HelloFresh and all the meal at home companies, right? Like it like when I say best, I mean, they’re the most applicable, everybody’s got to eat. Prices are good. And the convenience Is there stuff is delivered to your doorstep, right like so when you’re talking about a you know, a grilling company that has a subscription model Well, a couple different ways you can go about that. Obviously charcoal, I love barbecuing charcoal is a consumable, it’s kind of hard to ship. But potentially, you could actually create a subscription there, you can also create a subscription or recurring revenue model around a service that you provide meaning either a white glove service, a the oldest one, the oldest type of subscriptions that people can remember that predates the internet, all sorts of warranties, subscriptions, right peace of mind type subscriptions that exists, pay us X dollars of year a year. And if you ever have a problem with the saying no questions asked, we’ll ship you another one ship the old one back, right like

Joe Valley  12:16

that’s it. That’s what Lowe’s does, every time I check out, they’re trying to upsell me something that is gonna protect

Evan Padgett  12:21

your electronics, right? So it’s about if you have a consumer base, and I always like to draw on this kind of example, if you open a brick and mortar retail store, you’re not opening that up. So that everybody only comes in and buys stuff once. Right? That’s not really a business like so. And then same goes for e-commerce, non subscription models, you don’t build an e-commerce website to say I only want you to come purchase from us once, never again. So you’re already thinking recurring revenue, all you have to do is tie that into something that brings people convenience solves a pain in their life. And ideally, is applicable to a lot of people and boom, you could create some form of subscription model around your business.

Joe Valley  13:09

So yeah, so grilling aprons, grilling business, charcoal, spices, things of that nature, even a old school newsletter subscription on grilling tips and things of that nature. Absolutely. And then when it comes to so the electronic charging station brand couple of years ago, if that thing breaks, right, so you if it’s $29 Sell a $2

Evan Padgett  13:38

subscription dollar a year subscription. Like I mean, you’re talking straight margin 98% of the time on those types of warranties if people don’t take advantage of them. Yeah, there’s breakage there. So to say like, Hey, you know, even a, you know, $5 or something like phones change. If you’re talking about a charging station, create a club that says, Hey, you want to make sure you always have an up to date charging station for your phone and your product boom. And then you can also mine information from them and create an account that says, hey, I’m Evan, I used to have an iPhone 10 and a 12. My wife’s got the 13, whatever, like, all of a sudden, now you have more information, you can say, hey, what about this product? Or hey, you know, does your you know, does somebody in your house need this charging station and then when I upgrade my phone, you say hey, send you know, I got sent me back this one that worked for your 12 I got one that works better for iPhone 14. And you create a system or maybe you don’t even charge it for because they’ve been paying into that or they get 70% off your list price because they’ve been paying like there are ways to create a recurring revenue model and all you’re trying to do right? A recurring revenue model or subscription I use them both very interchangeably. All you’re trying to do is establish a relationship with the consumer like as funny as that sounds, a subscription as a company you are in a relationship with your consumer. And that relationship requires you to deliver something meaning that they appreciate they like they find makes their lives better, easier and always provide value, not do different than personal relationships in any capacity as a friend or otherwise. But in order to do that, you have to consistently show up, you have to consistently support them, you got to make sure that when they have to deal with customer service, that they have the best experience possible. Because all the best packaging and everything and unboxing in the world and social presence and all that stuff, doesn’t matter if they deal with customer service, and they’re annoyed with that experience. It takes 10 resolutions to get something solved. They don’t like to solving, you know, that could just be a nightmare in itself. So customer service is one thing we talked about maybe a little bit on this, but you’re establishing a relationship with the consumer, you have to continuously put effort into that relationship. And you do that because customers will keep coming back in stay with you.

Joe Valley  15:55

Yeah, let’s get to the customer service aspect of it later. So you can create a subscription service for most physical products that exist is what you’re saying? Yeah. What is the worst type of subscription offer that people generally make?

Evan Padgett  16:17

The worst type of subscription offer? The people generally I was gonna go with one that’s just horrible. I’m gonna start with one that’s just horrible place. Like the worst kind of subscription is one where it gates people from the features or of your product that or the your, of your overall product that they want the most. I’ll use some very recent ones, I’m not gonna name the car manufacturers, people could look up this themselves. But there are a lot of different car manufacturers now that are now gaining their ability to

Joe Valley  16:46

I don’t have a Tesla, but I think you’re talking about Tesla, you know, there’s,

Evan Padgett  16:50

there’s some of them, and then others that are like, Hey, you want this feature, you want to be able to do climate control, you want to be able to do automatic driving, you gotta pay a annual fee. I hate that stuff. I hate it when you’re when you’re when you when you say the thing you want the most as behind a subscription paywall without our inability to just buy it and own it, I think, on the consumer level, so like take car manufacturers aside, on the consumer level, the things I see that happen the most are usually subscriptions that are just boring, broadly boring. And what that means is stuff in a box that doesn’t tell a story doesn’t really solve to the consumer doesn’t feel special or unique to them. So curation and customization is really important in subscription. Like, it’s just like, hey, subscribe, and save. I’m a huge like this basically the Subscribe and Save model, okay, you want to buy this stuff, or you want to get it every month and you take will take 5% off. Those are just I know some brands do it. And some brands will say it’s okay. That kind of mountain model annoys me because you’re usually giving kind of a token discount, usually some are five and 10%. When you’re trying to do that, yeah, it’s usually not very practical. And it’s not very mindful. You’re like, oh, yeah, here’s this Subscribe and Save on this grill brush. Like, they’re not going to need one every month, there’s nobody’s ever going to take it, you’re just trying to jam recurring revenue down my throat. And like if somebody does take a Subscribe and Save on a grill brush, they probably did it on accident, you’ve created a customer service issue, you’re gonna say your subscription failed. So, subscription, consumer packaged goods, has to feel special, it has to really create a need for the consumer to want that. And it can’t just be your stuff in a box, a little discount. That’s the subscription that bothers me the most.

Joe Valley  18:43

Yeah, the one that I see most often is, you know, on, you know, Amazon where it is simply Subscribe and Save, say 5% and get the product every month. The problem I have with that and any subscription model is that, you know, they’re gonna send it to me every 30 days, whether I need it or not. Right, one of the things that I did have in back in the days when the software wasn’t available. I don’t know if it is now or not, but my customer service team would always adjust. How often if somebody called cancels with subscription, or sends an email, we would say, okay, okay, I understand that every 30 days is getting to be a bit too much. Because you forget, seven days a week, or seven days a month. How about if we bumped it to every five weeks or every six weeks? We saved a lot of subscription subscriptions there. Is there a software out there that would allow someone to choose how often they get the product?

Evan Padgett  19:45

Yeah, so there’s my two cents there’s most out of the box. Subscription software, say for Shopify, if I use recharge for an example, or bold or any of those, if you’re building on Shopify building on a recharge stack, you have have the ability to, on the consumer level, allow them to control that. So you could actually, like I’m a huge proponent now of giving customers control of their subscriptions I don’t I came up from the world back in the day of, it’s hard to cancel customers or towers or weird Yeah, like, so now I’m more of the mindset of give customers the control that they want. So you could sit there and say, and you can even bifurcate that and say, here’s what you could see online, you could get this product, weekly, monthly, quarterly, whatever, right and weekly is ridiculous. But you could put that up there. And then you can also have on the customer service back end, say different examples of say, okay, these are the three we offer. But if you want it semi annually, or you want to yearly, or whatever, we can do that, or we can put it on pause. So the ability to save subscriptions is pretty much built into most subscription software I’ve seen with the ability to adjust. And that’s it. That’s the topic of customer service right there. That’s the number one thing and say, Hey, I have too much of this, like we hear you. How about this one, we put you on pause for three months? Or why don’t we change it to be every other month that you get this product? And then let us know how it is. And if you have you know, and we’ll we’ll take, you know, 10% off your next order, because you already got a little bit and then if you don’t like it, call us back in a couple of months or go online to cancel. And in many states, obviously, you can do that now. So yeah, most software’s like looking out for that.

Joe Valley  21:25

What do you mean, and many states, you can do that? Now what why not is why can’t you go on your subscription anywhere?

Evan Padgett  21:32

They will. So I am not a lawyer. But I do know that like California, for example, requires customers in California to be able to cancel subscriptions or anything like that in the form that they signed up on. So if you sign up for an online subscription, right, you are supposed to be able to cancel your subscription online.

Joe Valley  21:54

Make sense? Would it make sense from what you just said earlier, giving customers control of their subscriptions to not go with the old school method, which you and I did, which was making it really hard to cancel and send them free product three weeks later send them a three months supply? Right I did that didn’t work out. So well. What wouldn’t it make sense just to give them everybody the ability? I agree.

Evan Padgett  22:18

Login percent agree? No, I totally agree. I think you should, the consumer. And here’s the real data behind it. This isn’t like, just because I feel this way is everything. It’s more like, when you do the math, when you do the math, every customer that you keep them from canceling, they’re going to rack up customer service costs, every time they submit a ticket, every time they make a phone call, there’s dollars going out, then what they’re gonna do, they’re also going to blast you on the BBB or on facebook or Trustpilot. Or everywhere that they can. They’re also going to tell everybody how much they hate you everywhere that they can go, they’re gonna leave, you know, really crappy of your views on your ads. Every time they get your ad on Facebook. They will I’ve known personally, people so spiteful and angry about a business that they’re like, oh, yeah, I keep getting their ads, every time I get their ads, I paste this stuff on there. Because I hate this brand there, I won’t let you cancel and they’re horrible customers or whatever. So when you do the math, and I’ve been part of the team that’s done the mouth with companies that have handled, you know, millions of subscribers in different ways. It’s always better to just let the customers have control. Because if a customer is canceling because they have too much stuff, or if they can’t afford it, or they just don’t like your product, off boarding them smoothly, will actually keep them from becoming a pure detractor in like an NPS, you know, Net Promoter Score setting. They might be a neutral, but they’ll be like, Yeah, you know what? This product wasn’t for me, but it was easy to cancel it and you know, maybe you like it, right? They’re not going to be dragging your brand through the mud. They’re not going to be you know, blasting your customer service with profanities and everything like that. And I’ve seen the worst and worst of that. If they don’t like your product, and they don’t buy your your, you know, your save a sale of like, hey, well, how about we take 10% off? Or how about we switch your shipping? And they’re like, no, just please cancel, okay, you know that, you know, we hope you enjoyed it, whatever, they’re not going to be hating on you. And that k factor of people hating on you and the momentum that can build a snowball effect of people hating on your brand. When that gets enough inertia and doesn’t take much 1% 1% of your customer base being displeased with you can become a louder voice than the other 99% that are fully happy with what you’re offering. And that is super real. And you can look at instances in the past where companies any company that gets dragged through the mud publicly or has, you know, FTC issues with it. It’s usually stemming from a few percent of their customers, not the majority that think it’s fine, right?

Joe Valley  24:57

In all of that there’s one thing you didn’t mention it And that is chargebacks. Oh, yeah,

Evan Padgett  25:02

the other costs is chargebacks. Right. So when people, you have a 1% chargeback limit, typically on your merchant processor before you get put into very rigorous like practices, and you can lose your ability to be a merchant, if you continue that, and 1% of the charges going through, that’s all it takes 1% More than that, you are you are in all sorts of probation and extra charges, and they’ll take a higher perceived percentage of all your fees, and it’s nasty. And also, if you have chargebacks, at high, you’re making a mistake somewhere I just candidly, something’s going wrong, you necessarily,

Joe Valley  25:34

yeah, fix it do the right thing for the customer. So let’s just say we’ve got a two or three person shop, right? A single owner, a single owner, and then a couple of VAs or local people that are out there. How do they build a real, true customer service support team to support the subscriptions that they’re trying to build? Is, is offloading it overseas to virtual assistants? Is that something you find that works? Well, if it’s set up properly?

Evan Padgett  26:07

Yeah, actually. So one part of my background, this is very relevant, we didn’t we didn’t plan this one part of my background at textile, I took over our customer service department and grew that from about 35 people domestically, over significant hypergrowth. If you can imagine this, but about 600 people overseas, and phones ringing as well as emails before we had a lot of phones at that time, this would have been the early 2010s. Now, to your so one, I’m a huge fan of creating processes that allow this to go overseas. Because from a cost perspective, I mean, keeping it domestic is great. But the cost is a real thing. When you’re bringing a business up, the cost is usually half or less than half are dedicated support. And it’s all process right? Like your product, if you’re talking about a product that doesn’t need technical support, right? Like, you can’t do that overseas as easy if they need literal, like, hey, I need to know how to use this technology, you can still get there, but it takes a little longer, right, because like there’s so many different ways to do that. But if you have like a consumer package, good, it is like people are calling to cancel, people are calling to replace the product. Or people are trying to figure out where their product is, by the way, all three of those things, you could make your website handle that. So I am all about creating customer service that customers can drive in there and do their own customer service, especially when you’re small,

Joe Valley  27:38

is when you make your website do that you’re saving all the time and hassle and money of you know, needing to employ people overseas. My, my, I’m thinking about my mother law, she’ll be at one in September, she’s, she’s probably going to be better off picking up the phone and calling. But she’s going to have a hard time understanding the language barrier, possibly, if there’s accent. So every time I shop online, from buying clothing, wherever it might be, they want me to set up an account. And is this where if I have an account, I could just log in and handle my customer service and cancel subscriptions. Yeah, and the returns and things of that nature handle returns

Evan Padgett  28:22

or just do it over email, right. So even your your 80 year old. Yeah, she

Joe Valley  28:27

said emails, she’s company sends emails,

Evan Padgett  28:29

right. And if you have a good rep on the other side domestic or not, like they know how to handle that. Because it’s the there’s only so many scenarios really like, again that it’s like, okay, we hear you need to replace this, we hear you need to do this, we hear you need to cancel. Here are the resolutions. And you know, even if you’re having an email dialog emails a lot cheaper than picking up and ringing a phone usually great. So if you’re small, and you’re just trying to come to market, like chances are you’re the CEO, and you’re also had a customer service, right? Like you’re looking at some of these escalated ones, sometimes nation engineer to very much so. So yeah, giving customers the power out of the gate is my preference. And like while you might have slightly higher than desired return rates, because if you make it easy, then more people will return. It’s actually still a better read for your business, like anytime you’re trying to can trick or an even trick, but make it more difficult for the consumer to get the support that they need. You’re making a bad decision for your business. It’s sort of my stance now. Yeah, 15 years ago, probably wasn’t my stance. But now definitely my stance.

Joe Valley  29:38

Yeah, it’s definitely my stance now as well. So for VAs for folks that are listening. If you’re like how do I you haven’t hired a VA yet? I had John Jonas on the podcast a couple of months ago, and he owns online Take a look. Take a listen. That’s one great resource. There’s lots of agencies out there that can help you as well. Unfortunately, sometimes the agencies take, in my opinion, way too much money from the VA, by example, we quite light had a pistol have a couple of years because we took them from the agency and hire them directly. But, you know, for every $174 that we paid, the VA got $100 of it, and the agency got 74. All right, for just setting it up initially, then doing nothing. So we bought them out and pay them directly. And not only is that cleaner and simpler for us, but the VA makes more money. Yep. And they become much more loyal and committed to your company, we can afford to pay them more, and we will pay them what we just brought them on. But you know, bonuses incentives, things of this nature that are really hard to handle through an agency when the agency is hard to get in touch with to begin with. So no, I

Evan Padgett  30:56

so I’m very familiar with the Philippines, that’s actually where I moved all that operation out to add to go visit out and Devou city, and then was gonna say Oh, and to that point, you’re totally right about how the agencies work. And also, like we have here at Stealth, we have on our cap tables, some of our Philippine outsource team members that are that they do graphic design for us and some post production work there. It’s really great. So like I’m, I’m personally a huge fan, it sounds like you are to have the Philippines because you do have the costing is great, and speak very good English for the most part, especially the younger generations. They’re very customer service focused.

Joe Valley  31:42

Yeah, absolutely. Both people that we employ, are I think ones 25 ones 28. They both have degrees in economics. Yeah. And, and they teach English starting in the first grade or kindergarten, it’s actually their education, at least the two that we hired, their education was entirely in English. So they spoke a different language at home. But their education at school was entirely in English. I think that actually was passed as a law recently, wasn’t it ever? Maybe Yeah, we’re talking about hand here. But anyway, on to the other part, a little tangent story. So I sold the business, this is for everybody to hear. I want to say it was a year and a half ago, actually I did technically I didn’t sell it because I wasn’t taking on new listing some somebody else on our team took it on. But it was somebody that I own an affiliate platform. I sold it for him years ago. And then he built up a subscription business in the pet space. Anything in the pet space was subscriptions is very high value. The problem was that it was growing so fast. And they made the ability to cancel subscriptions fairly hard. Or they will forget because it was an annual subscription. Oh, yes, there you go. annual subscription. And they didn’t send out reminders didn’t do anything. And one day, the guy calls me the owner, because Joe, we’re ready to go to market, but I think we’re gonna have a problem. And here’s the deal. And it was their chargeback. Their chargebacks are so high that they they had any and he laid out a plan. He’s like, what we’re going to do is, you know, have one merchant provider, you know, charge the first 100,000 and subscriptions. And then we’re going to bump to the next one. And then the next one. And then I’m like, dude, and I’m not going to use his name here. Let’s just call him you know, John did call him June, dude. I like that’s a house of cards, right? First, you gotta explain this to a buyer. They’re just going to your valuation is going to go way down. And so the first thing is, why don’t you just do the right thing by the customer, and give them a notification, that they’re actually going to be charged again for the subscription? Because, well, that would reduce the total number of customers that would unlock Exactly, yes. But the trouble you’re having on the back end would be resolved for the most part. And your ability to sell the business would change greatly. You’d go from a sketchy business that might be worth two times even though it’s growing rapidly. It’s two times because the house of cards you building on to you know, four to five time multiple. Yep. And he took it to heart I, I remember. I remember. I’d known him for years. So I was a total straight shooter with him. And I thought, okay, that’s the last we’ll ever hear from him. Kind of thought like, I might have been too straightforward with him. But he called back six months later, they fixed everything. And he sold, he sold it for four and a half multiple and had and had multiple offers on it. So to your point, Evan, when you put the customer service in place and take care of the customer and make it easy for them to subscribe, or cancel, then it makes the business just better and more profitable. And that’s exactly what he found as well. The minor loss that they found They ended up having in terms of recurring revenue was made up with, you know, less headaches and less costs on the other side of it. So I totally agree with everything there. Now you mentioned Shopify and recharge what what it and maybe you don’t know the answer but what type of plugin tools like that or ideal for people that build on WordPress other similar things just reach out to work on WordPress

Evan Padgett  35:27

does not currently work on WordPress, my understanding is they are trying to expand they took in a lot of money earlier this year I don’t times times with fuzzy construct, but within the past year that took on a bunch of money, in part to expand. I know you could do on WordPress, you have WooCommerce, I believe, which has subscription capabilities within you also have if you’re building on WordPress specifically, that’s the only feasible option that I’m aware of. If you have to build I think there are let me take that back. I know there are ways where if you need your content on WordPress, you can also have a different e-commerce back end. So you can use things like charge B, and a handful of others like that, that are specifically essentially the cart process for for these which can be powered off of several different

Joe Valley  36:17

I’m gonna get totally selfish now. And if you don’t know the answer, I want someone in the audience if you know the answer to reach out to me to [email protected] or send me a text by cell numbers in my email. So folks that are selling on Amazon, but have but don’t want to have a three PL I know, I know now that on some platforms, you can put a plug in and people can order it on your site, but Amazon will fulfill it. Fantastic, right? How do you do that? With books? Right? So I sell its prints on demand through Amazon. I’d love to keep the customer on my site, sell the book to them on my site, but then offer them a subscription model for monthly, you know, for next to nothing but monthly updates and videos and trainings and things of that nature. But do you know the answer? Are we going to I don’t

Evan Padgett  37:13

know that answer. I want to know that answer. The reason why I don’t know that answer it, this has been a little sore. I get asked this a lot. So this is actually a conversation I’ve had more times than I’d like to admit, which is, hey, I got this brand on Amazon. But I want to go vertical. How do I do that? But I don’t want to lose my Amazon business, right? And my main response usually is, do you want to advertise, you want to send your people to your Guess what, like, a vast majority of those people are going to see your ad and find you on Amazon. And you’re not going to get that customer information. You’re spending money to drive to Amazon, and Amazon’s already taking a piece out of it. I could go on a rant about that. We won’t we won’t do that today. But I would love to know the world that allows you to actually transact personally and then push through Amazon in a clean way. Because that would be pretty amazing. Because that’s the rub with Amazon, like Amazon is a fantastic, globally, obviously an amazing marketplace. And it’s made people tons of money, everywhere. But the rub is at a certain point, almost every business says how do I go vertical? And it’s like, well, you want to go vertical and sand Amazon unless you’re Procter and Gamble, or somebody that’s just using Amazon as a fulfillment center to sell Crest toothpaste, you’re gonna have a hard time making that makes financial sense. It’s just my two cents on that.

Joe Valley  38:39

Yeah, especially if their expertise is Amazon. Right. You know, starting with air. Yeah, my my my advice, when I get asked that question, which I get asked often is, you know, have you maxed out? Amazon, you know, before you start diversifying into spaces where you don’t have the skill set or hiring people that are just going to rob you make sure that you’re doing everything you can on all of the different platforms on Amazon? Is it? Is it better to, you know, really focus on spending money on your own Shopify store? Or is it better to go ahead and expand a Germany? If your product is good fit in Germany? So they’ve got to do that analysis? For sure. I think the answer to the question is for me, I’m going to answer it myself. And folks, please hit me up with an email and we’ll share it with everyone as well. I think the answer is let them go ahead and buy the book on Amazon. Because most people come back to the site for some of the tools and resources that I offer after reading the book. And at that point, there can be the subscription model, where I’m offering a higher level of access and tools and resources. Because now they’re more invested in in the concept of of training for an exit because they’ve read

Evan Padgett  39:55

the book. There you go. Well, so the best way on that if you’re in books, or consumer packaged goods or anything is your own self branding on your packaging and everything and creating, if you create, as I wouldn’t say hypothetical, you that seen this done, I just a brand doesn’t come to mind right now is you’re buying this thing you’re buying lip balm on Amazon, but all over your packaging is you know something to get you to come back to your lip website. And a reason why you might want to do that is exclusive offers deals, other products that you offer that aren’t on Amazon, things like that, to just start getting some consumer information, it at least starts building your own internal brand. And the reason behind it. So people aren’t just buying a lip balm because they want to lip balm in that case. But having people circle back or, or in your case with a book, having people circle back to that website to create some form of interaction, in this case directly with you or directly with your brand. In ways that like Amazon does a lot of things. What they don’t have is community. Community is not a part of what Amazon offers. Like there’s reviews, and sometimes they’re hilarious, right? But like, they don’t offer community can offer community how does that connections via social with your podcast with all these with other things? Like giving people the ability to text your email you Right? Like that’s, that’s community that you don’t get and that that has intrinsic value and sometimes extractable value, right?

Joe Valley  41:27

For sure. Okay. So, last last question really is around Amazon. We’re running short on time here. And I know that we could rant about this, or you talked about this baseball, what you said, people have built businesses on Amazon and change their financial life forever. And in some cases, you know, multiple generations, because of the Amazon platform. And I shop there too, so I’m not going to post on it. And looking back on the

Evan Padgett  41:51

deliveries coming today. Yeah, every day.

Joe Valley  41:57

The best way to you know, sort of try to capture those customers on Amazon, if you’re selling lip balm, is to do a proper insert and give one away though, like what? It let’s just say your product is $25. Wait, let me think about what I just got recently from Amazon, I can’t even say what did I get, I get so many things, that’s a problem. Let’s just say I got something for $25. And it’s a consumer product, what kind of insert because most of the time, I don’t see any inserts from anybody. What kind of insert is Amazon going to allow and what kind of insert is going to be best to capture that customer information. You know, to get them to go back to my website or anybody’s website and capture their information, and then hopefully build them into a subscription model.

Evan Padgett  42:46

Yeah, so there’s, you know, price point dependent. There’s a lot of different things that come to mind here. But what you want to do is obviously Amazon’s not gonna let you do inserts per se, but we have to do is incorporate it into your packaging. So certain products are a little bit easier to incorporate things into packaging. And what I mean by that is like, they’re not taking your grab something you’re here like advising, right, like they’re not just sending me this bottle by zine it comes in a box. And that box itself has papers in it and such like that. So if your product is box double, which also makes it easier to ship because it’s not awkward sized, right? You can do all sorts of branding and such on there and create ways to have people come back around sometimes, like giving stuff away is actually not I mean, certainly that works well. So hey, here’s a $5 coupon to or something like that, right? Like maybe right but actually, depending on your brand and depending on what your brand stands for having people essentially want to be a part of your brand and your brand journey is actually what I think works the best is that tugs on the emotional heartstrings of people. And that can mean I’m selling this product. And 5% goes back to saving the turtles making stuff up right, learn more about what we’re doing on And then they scan a QR code, which is slowly becoming more probably I love QR codes. I wish they were more popular than they are but you know people are getting they’re going to punching in this code you have you create a member and then you learn more about what you’re doing higher priced items. If you’re going up market, here’s almost a really good reason to go back because they usually say hey, register your products. And you know you activate your limited warranty or extended warranty or whatever, right? So you buy a microphone, you buy a computer monitor, going to that site, registering that product makes a lot of sense. So you know creating a reason and telling a story that’s authentic to your brand. Because what you’re basically asking people to do is not not to just engage with you. Maybe they keep buying on Amazon, but not just to engage with you on Amazon. You’re actually asking them to say Come learn more about us like learn more about what we’re doing and what we’re what products we’re building on. I rebuilding these products. And the why is, especially with younger demographics becoming more and more important to the fraction of people’s wallets that they’re putting out there. The why now, isn’t everything No, but people want to know that their dollars are contributing to something more and more and especially the younger generations, the millennials, and even the next ones, the Gen Z’s are really trying to, like sort of do commerce with with emotion attached to it, right. So you have brands that stand for something, and have a social enterprise part of it. It’s not everything, it doesn’t have to be what the cornerstone of your businesses, but that is becoming more important, and don’t disregard that in the the consumers of the future, having a focus on social impact and what your company does for that. And that’s the reason why, you know, all VLV organic and non GMO and all these really doing well. Trying to make the world better brands are taking off is because consumers are voting with that. So if you can, if you have a brand that can do that, find ways to engage with them. Get them to like your socials, get them to interact with your socials, get them to create accounts on your dog calm, and then you will monetize that guaranteed over time. It’s kind of like our SEO is you don’t monetize SEO immediately. But if you do SEO right and 1218 24 months from now, it’s paying for itself and drove the same thing goes with brand building and in grading connections. They’re

Joe Valley  46:32

excellent. I love it. I love it great information. And then how do people get in touch with you learn more about what you do? Have conversations to do so forth?

Evan Padgett  46:42

Yeah, so you go You can fill out a form there. I see all those that come through. So anybody that wants to do that, that’s great. Evan at You can hit me up there. I’m on LinkedIn, find me talk to me. I love just chatting about this industry, even throughout my personal email is very difficult. It’s [email protected]. That comes right to me. So I love love talking about this industry loves helping find ways to either work with us or find ways to just chat because I can rattle on about all the fun things to do in this industry all day long.

Joe Valley  47:15

Awesome. We’ll put that in the show links as well, folks, Evan, thanks, retirement. Really

Evan Padgett  47:21

appreciate it. Thanks a lot, Joe.

Outro  47:24

Today’s podcast was produced by Rise25 And the Quiet Light content team. If you have a suggestion for a future podcast, subject or guest, email us at podcast at Be sure to follow us on YouTube, Facebook, LinkedIn, Twitter and Instagram and subscribe to the show wherever you get your podcasts. Thanks for listening. We’ll see you next week.

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