In partnership with Facebook, AdNews is developing a series of interviews with online marketers who operate, for now, in the SMB realm. Their hands-on, real-time approach has resulted in the creation of some fascinating masterstrokes, many of which should provide inspiration for marketers working across all brands – both big and small. For our first interview we spoke with the founder of online retailer GearBunch.
Dan Nikas was a homicide detective working across New South Wales until he was medically-retired and forced to re-think his entire career. In 2011, once he had left the Police, Dan started using Facebook ads to promote an online t-shirt business he had launched in Yamba, a small town just south of Byron Bay.
It was a "hobby business" he explains, but one that proved that Dan took to digital marketing easily. "I have been trained to find people who don't want to be found,” he explained before joking that following the trail to new people was "significantly easier" than it had been in his previous role.
"I had zero marketing experience. I didn't have a degree. I realised that marketing worked by developing systems and processes; something I had learned working for the Police," he explained.
The t-shirt operation was unsuccessful. Dan called it a "feast or famine" business and with a wife, two kids and a mortgage to pay, he knew he required a steady income.
After five years learning the ropes of digital marketing, much of which was focused on Facebook, Google ad words and SEO, Dan encountered an opportunity to sell custom-made leggings online and in 2016 launched GearBunch. Little investment was required upfront and the three manufacturers he used - based in Latvia, Charlotte USA and Mexico - were paid as the orders went through. Since then, he has enjoyed considerable success and is considered to be transitioning on now from his SMB status.
According to PwC Australia’s recent Connecting Benefits report, in 2017, aided by their growth from using Facebook, SMBs in Australia hired approximately 120,000 employees. GearBunch’s story exemplifies this. 11 people work for Dan's business and six of those are based in Australia - four in Yamba, one on the Sunshine Coast and another in Brisbane.
Fascinatingly, GearBunch reflects some of the findings of the PwC Australia report: the top regional area in terms of employment and economic growth from SMB use of Facebook is the Gold Coast. In 2017, SMBs on the Gold Coast hired approximately 3,200 additional employees as a result of their growth aided by their use of Facebook, generating $450 million in economic output.
GearBunch has also spread its wings and has made some global hires. For example, the designer who is responsible for the stunning array of legging designs is based in Africa. There are also technical people working in Manilla, the Netherlands and in the Balkans. This too matches the incoming business for GearBunch – “it’s a global customer base”, said Dan, “we have customer orders coming in from the most unlikely places.”
In the 2017 calendar year, Gearbunch generated $4.5m (US) in gross sales - 80% of which came via paid ads on Facebook. This year he expects that figure to drop to 70% on account of the repeat customers the business is now attracting.
Like all marketers Dan has learned how to funnel customers, albeit through five bespoke phases he has created: building awareness of product or brand; consideration and converting customers; re-targetting and re-marketing (a 180-day phase where GearBunch calls into play Facebook ads, Instagram posts, Google display and even SMS); driving loyalty and finally, advocacy.
During the consideration phase, GearBunch unleashes multiple different creatives - single designs, carousels, videos - and gives them a 72-hour window, in which the data flows back to GearBunch where Dan and the team are primed to make decisions on which campaigns deserve a bigger push, or indeed, be culled.
Dan explains that a significant portion of his budget was spent on Facebook ads alone in 2017. "We tracked that spend with analysis every step of the way - some of them worked, some of them didn't. We were quick to pull the creative that didn't resonate." Naturally, that level of spend results in some failures, yet Dan takes it in his stride. "I changed my mindset from 'we've lost $500' to 'we've acquired $500-worth of data and experience'. I consider it an investment in learning and we're learning every day."
Dan fits with the notion of owning a company that is “born global”. According to the PwC Australia report, growth opportunities – such as those stemming from online and social – have “led to a relatively new phenomenon of local businesses pursuing international sales at an early stage, which has been coined ‘born global’.” Over 35 percent of Australian globally active businesses, it says, now earn international revenue within two years of establishment.
Dan insists that this level of international growth, and growing a local and overseas team, has focused him in one area: understanding what makes his customers tick. "They have fears," he explains. "People, in Australia and even those overseas who might be more accustomed to regular online purchasing, worry when they make a purchase through retail sites. They think 'I just spent $87.99 on a pair of custom, handmade leggings: will they turn up? Will they be what I expect?'. We knew that we had to develop a way to make those customers feel safe and looked after."
To ally any customer fears, GearBunch records a short, rough and ready video on the fly of their order being manufactured and then pushes this video back out to the customer via Facebook and SMS with a thank-you message. Dan says this level of customer service is only one part of what the company intends to offer. "We are starting to use direct mail and send our customers special messages, and I have hired someone to make telephone calls to our most loyal customers asking them for feedback. I think that level of personal engagement is essential."
Meanwhile, GearBunch is negotiating with Influencers to ramp up the Instagram side of the business. Dan explains he is cautious about using Influencers, but can ultimately see the benefits. "What I have learned," he said, "is that GearBunch has to be explicit in our expectation of what ROI looks like when engaging the services of Influencers. I have written documents that outline every one of our expectations and if those can't be met, then we don't enter into any arrangements. However, I am confident we can make it work with the right people."
GearBunch is also toying with different messaging on SMS, is asking customers to record videos in exchange for discounts, which the company then hopes to roll out as part of campaigns on Facebook and is working out how it can generate the most from competitions. "We have a lot of work to do," Dan beams excitedly.
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