Why 8-Figure Brands Waste Days Finger-Pointing When Results Miss (And the Fix)

[00:00:00] Brian: there's a lot of different ways that this finger-pointing problem like comes to life. And it's not always that obvious. It can just come in the form of a simple question of why did we miss? And, and not there necessarily being any person who's just like, "Here's the core reason, and here's what we need to go after it."

[00:00:19] Richard: Hey, folks. Welcome to the Ecommerce Playbook podcast. I'm your host, Richard Gaffan, director of visual product strategy here at Common Thread Collective. I'm joined today by Brian Czekanski, who is one of our profit engineer managers here at Common Thread Collective. And Brian's been on the pod with me before.

[00:00:34] He's a ecommerce genius, and he's here to share some thoughts on a very specific problem. But first off, Brian, how you doing?

[00:00:42] Brian: Doing good. I mean, appreciate the, the flattery to kick us off here. I wouldn't self-proclaim myself a genius, but yeah, I've been in the game for well over a decade, and it's, it's, it's always fun and interesting here in e-commerce land.

[00:00:54] Richard: Yeah. Well, we'll let you as the audience decide whether or not Brian is a genius, and I'm pretty sure I know what the answer's gonna be. So, let's go ahead and kind of get into it here. So what we're talking about here is something that we call the finger-pointing problem, and what the finger-pointing problem is, is at eight and nine-figure e-commerce brands, what ends up happening is that when something happens, when something goes sideways in the quarter or the month, then what happens is people try first and foremost to figure out who's to blame for the problem rather than going in and solving the problem itself.

[00:01:24] So what kind of the, the... Our thesis here for this conversation is the idea that that's not really like a, Or, or maybe what I should say is that that's primarily a human psychology problem. In a situation like that, people will inevitably point the finger first before solving the problem unless you have a structure in place to prevent that, and that's something that we've worked on a lot here at CTC, something we've set up with the Profit Engine system.

[00:01:49] So we're going to kind of dig into specifically how, how that problem comes about and then how we fix it here at CTC. So let's start. Maybe I'll start with Brian talking a little bit about personal experience with this type of problem, how you see it crop up maybe with clients, maybe in your own sort of e-commerce adventures over the last decade or so.

[00:02:09] But yeah, let's start there.

[00:02:11] Brian: Yeah, for sure. I mean, it's-- I've seen it happen in a lot of different ways depending on the org structure, how big the organization is. I mean, 'cause even the org structure although there's a lot of common patterns you know, an eight or nine-figure e-commerce brand can have a much larger, more distributed team that has, you know, omni-channel across wholesale, Amazon, et cetera, or perhaps it's just a, a solo D2C brand.

[00:02:37] And so because of that, there's a lot of different ways that this finger-pointing problem like comes to life. And it's not always that obvious. It can just come in the form of a simple question of why did we miss? And, and not there necessarily being any person who's just like, "Here's the core reason, and here's what we need to go after it."

[00:02:58] Or it's, "Hey, I have an assumption about what happened because maybe meta ROAS didn't hit its target for one day. It is therefore the paid social buyer's problem." There's a whole kind of you know, orchestration of effort to try to go s- look at the technicals of it, et cetera, deep dive on it, and then that could actually draw attention from maybe, well, actually, we were supposed to have a promotional moment that day that we planned for.

[00:03:26] It got delayed, and we missed between that daily expectation and the planning process, and now we're just going after paid social, spending time and energy to go solve that. And so, you know, the-- like I had mentioned, it comes in a lot of different forms. There's obviously human personality that comes into play here as well, perhaps a more aggressive versus more of a kind of peaceful approach.

[00:03:52] But yeah, it's, it's ever present. And the fortune of sort of where we sit at CTC is we get to play often a third party, which can really see all the patterns of how this surfaces and create a solution that works well for organizations to resolve this and to put systems in place to really do what we're all here to do, which is grow the biz and, and make sure we're we're following the plan and pivoting when we're off course to, to ultimately hit our core objective for that individual business.

[00:04:25] Richard: So you mentioned being a third party kind of standing outside, let's say, the usual politics of the internal team. But of course, like one element of this, the finger-pointing problem, is that each third-party vendor a lot of the time is also incentivized to, of course, defend their own numbers, defend their own actions.

[00:04:41] And so there ends up being yeah, the, the, the perverse incentives don't necessarily shift becau- simply because it's a third party. So let's talk a little bit about then this structural fix to this problem and how we as a third-party vendor step in and are able to say like, id-identify the problem without there being an- any of these sort of issues of blame and ki- yeah, yeah, kind of pushing off ownership of the problem.

[00:05:10] Brian: Yeah. So I, I think I hear two parts to that question, so let me, let me try to answer one at a time here. So I think like, yes, and the way I described I think is just that we're a third party who is observing how internal politics at an organization can take place and how we can sometimes step into a role of being an intermediary.

[00:05:31] But you're absolutely right to call out that we also, as a third party, can get pulled into, "Hey, which vendor or which agency is actually the one who is causing the problem? Is it my paid media agency, my retention agency?" Whoever it might be. And ultimately the solve for that, that we tie ourselves to is we say, "Hey, yes, we might be contracted to run your Meta ad account.

[00:06:00] We might be contracted to run your Google ad account. We might be contracted to run your email SMS program." But ultimately, what we are tying our billable and our objective to in our contractual agreement is to the business outcome and the business objective. And tying yourself to that particular objective fundamentally changes the whole way that we're individually orienting around the business.

[00:06:30] And so that is why, you know, when it comes to the finger-pointing problem you know, it's a whole different dynamic. We aren't necessarily just, you know, reporting on the KPIs that the channels we're, we're responsible for managing are. We're instead connecting the dots and have built a system in order to tie and closely connect you know, the things that we are maybe keys on keyboard for to the actual business outcome, which is just a fundamental shift in, in sort of an operating procedure.

[00:07:01] And we've, we've talked about this before, and there's been a, a number of, I think, episodes that we've published, which is just around, you know, the challenges of maybe having like a, you know, an agency structure tied to like percentage of, of ad spend or some other structure. But when you put upfront into the agreement, which is, "Hey, we're gonna tie ourselves to business outcomes," it just fundamentally shifts everything which is why we've, you know, created the system that we have.

[00:07:28] So I think I addressed maybe kind of two parts there, Richard, but let me know

[00:07:32] Richard: Yeah. No, no, no, I, I think that makes sense. Like, like to summarize, I think the point you made at the beginning there of, yes, we own your meta ad account, but our goal is not to produce a certain ROAS. That's that's in fact beside the point. Like, the point is to produce a certain, let's say, contribution margin outcome or something along those lines.

[00:07:51] And there's many different things that ladder up to that, and meta ROAS being at a certain level may or may not contribute to it. But at the end of the day, what we're contracted against is the success of your business, literally. So, one thing that I'm, I'm, I'm curious about, though, is like, what's our approach?

[00:08:10] 'Cause inevitably you're gonna run into this sort of problem anyway. Let's say, what's our approach where we've kind of crunched the numbers and it feels to us that w- the issue-- let's say we're not hitting we're not hitting our contribution mar- contribution margin targets, and what it feels like is that this is a creative production problem.

[00:08:27] We don't own creative production. Maybe their internal team does, or maybe a third-party vendor does or something like that, and we've run into that issue. What-- How do we work through that without kind of descending into the same sort of finger-pointing?

[00:08:42] Brian: Just to be clear, you're saying when we're interacting with another third party?

[00:08:48] Richard: Well, let's say like w- in the case of a client, let's say you have a client that's run into a contribution margin problem. You-- We, we've kind of traced that back to the ad account. The issue with the ad account is creative volume and their creative is actually produced by a third-party vendor, or maybe it's produced by an in-house team.

[00:09:06] But either way, we don't own that fairly critical part of the, the kind of the flow. So what do we do in a situation like that?

[00:09:15] Brian: Hmm. No, it's okay. That's, that's clear. So, there-- I mean, there's a couple of different mechanisms here you know, and sometimes it's as simple as we just need to clarify what the actual creative output should look like in terms of volume and what we should be producing. What I often encounter just on the creative as an example, is that it, it's often not necessarily a reflection of cr- like what creative we need to-- or sorry, how much creative we need to produce, but actually getting really clear about what are the things to go produce with a level of specificity that makes it easy to go then execute.

[00:09:58] So sometimes creative teams are just just You know, screaming you know, maybe quietly to just tell us what to make so that we can go execute it. 'Cause coming up with creative ideas at volume can be very, very difficult. And especially in an Andromeda world you know, the, the name of the game is volume.

[00:10:19] And so when you all of a sudden go from producing, say, 30 ads a month to being required to generate hundreds sometimes it just requires a level of clarity of how much, what to go produce, and to be really specific around the ad plan so that folks can then go execute that. So that's more when we're interacting with another creative vendor or maybe an in-house creative team.

[00:10:42] But then secondarily, you know, we have our own creative services here where we could very quickly spin up s- you know, static ads on behalf of brands. We also have our creator team which requires a bit more planning in advance since we are going out and recruiting those creators, but that allows for us to get in front of specifically creative volume in the future.

[00:11:04] And then we're not opposed here, especially when our role is to hit business outcomes, bringing in other vendors or other platforms that we've had really good experiences with to ultimately hit the number. And I think that when we tie ourselves to the business outcome there's a very clear shift in what the priority is.

[00:11:24] It's not about, oh, is, is CTC doing this thing for the sake of benefiting, like, ourselves? In fact, it's actually, no, we need to hit a business target. Here's what it's actually going to take to go do that, which is why some brands we're working with a handful of different vendors and helping orchestrate that effort and bringing clarity to what needs to be done.

[00:11:46] And then in other cases, we do have our own creative in-house services that we can activate and deploy on really quick notice if we need to fill gaps short-term or to just help benefit towards the brand's overall business objectives. So again, it just comes down to, like, when we tie ourselves to the business outcome all of our actions and recommendations are oriented against that instead of just an arbitrary, well, how do we just increase the billable over time?

[00:12:12] 'Cause that's not really the, the game that we're playing.

[00:12:15] Richard: Yeah. So what I hear you saying there is that maybe the difference between the scenario that you've just laid out and, and the sort of initial scenario we, we sketched out of, of a brand with a bunch of different vendors all sort of pointing the finger at each other, that a fundamental difference there is like those vendors are sort of running off their own KPI that they themselves are sort of generating.

[00:12:39] And so in this situation where let's say we're bringing a bunch of e-external vendors into the system in order to achieve the outcome, it's the situation there is that we're providing the targets for them.

[00:12:52] And those targets, of course, again, aren't arbitrary. They're, they all ladder up to something that we've sat down and worked out.

[00:12:58] In order to get to a certain contribution margin goal, we're going to have to hit this number. If we need to bring a third-party vendor on to hit that number, then that's what we'll need to do. But either way, we are sort of owning, we're the single source of truth for what that third party then needs to do.

[00:13:13] So it becomes very clear whether who's succeeding and failing and what they're succeeding and failing at. And so then you don't have to waste all this time sort of figuring out who or what the problem is, I guess.

[00:13:26] Brian: Yeah. And, and, and one thing I would just add to that too is like the, the beauty of you know, working with a lot of these businesses is that we see that there are a number of core levers that tend to help close gaps against business outcomes much more effectively than others. And sometimes it doesn't necessarily just mean that we have to deploy more creative.

[00:13:50] Maybe we can deploy more email SMS. Maybe we need to just deploy more ad dollars 'cause we know that they are profitable ad dollars. So we have a lot of ways that and profit engineers have a lot of different levers that they can pull in order to, yeah, hit the plan that we set out for and, and making sure that ultimately we get to that business outcome

[00:14:13] Richard: So I mean, a couple other things to point out here, if it's not sort of clear already, one of the fundamental advantages of this system is that it's fast. As opposed to having to sort of work out who's right and who's wrong, instead of having to spend a bunch of time on that arguing basically about what needs to happen next.

[00:14:30] You have the definitive answer about what needs to happen next on a day-to-day basis, and so the profit engineer is able to put that into play quickly. Any other thoughts, Brian, you know, on, on sort of like in your experience anyway, like what, what the advantage of this is over sort of the general setup?

[00:14:47] Brian: Yeah. I when we, when we go and plan out a month, a quarter, a year, right? Specifically when we zoom into a month a monthly plan, you know, the monthly plan is broken down into daily expectations, and then those daily expectations are broken out into their respective channels, right? And then, you know, as we have those daily expectations outlined, we have the tactics and levers that we will pull in order to achieve those daily outcomes.

[00:15:18] So it's, it's very quick for us to recognize what is in the green and what is in the red, and that's the, you know, the color differentiation in Statlas, right? That basically shows if you're on track or off track. And that clarity is first of all saves a ton of time so that we can focus on producing the things that are actually going to materially move, move the needle here.

[00:15:44] And, and often when brands are spending exorbitant amounts of time trying to constantly diagnose the issue, that takes away from the work which needs to be done. Create more creative, send a couple more email SMS, plan for that marketing moment that is months out in advance so that we can really orchestrate a cohesive effort that's going to, you know, move us above the baseline.

[00:16:09] And yeah, this, this pattern which unfortunately I see brands kind of, chasing their tails on is there's a problem, like we're off course or maybe some executive comes in or founder comes in is like, "Why are we so off?" People spend hours or sometimes days trying to diagnose it, when often the profit engineer, you know, just in the matter of minutes, and for something more nuanced, maybe a few hours could just be like, "Nope, that's the issue.

[00:16:34] We need to go resolve that, and here's how you're gonna do it. And hey, we have these resources to, to help you do that if you can't do it yourselves." That's, that's a, a pretty significant competitive advantage as an e-com brand.

[00:16:47] Richard: Yeah. So, obviously, statistically speaking, the best majority of folks out here listening are not CTC clients right now. And of course, if you are an eight, eight-figure brand and you wanna be a CTC client, commentaryco.com, hit the Hire Us button. Obviously, we would love to build this for you and, and sort of help clear up some of the decision-making ahead of you.

[00:17:06] But obviously, let's say you're not in that position right now or you're a smaller brand, what is sort of the one piece of advice, like the one thing that you could put in place now to begin moving towards something like this?

[00:17:18] Brian: Yeah. I, I would say that you want to have, in addition to having your monthly targets set up, which I think a lot of brands do have some sort of monthly plan, right? Monthly KPIs that they are establishing. Often the biggest thing that I see missed is just actually breaking it down to a daily expectation.

[00:17:41] And, and then from that daily expectation, if you want to go a second level deeper, is what are the core actions or assumptions that lead to that expectation? It's, it's all too common, and this is not a dunk by any stretch of the imagination, that not a lot of people go through this planning rigor.

[00:18:08] And, and often folks will not challenge those assumptions. They will just say, "Well, we've always produced this sort of revenue outcome or contribution margin outcome, therefore this should be the expectation in the future." But there's very clear reasons why. And so, yeah, I would say step one, daily expectations beyond the monthly expectation or quarterly expectation that you have.

[00:18:29] And then also getting really clear about what are the assumptions that ladder up to that daily expectation broken out by channel. So if it's an email expectation, what is your flow and campaign revenue on that day that's gonna lead to that? And getting really, really clear down to the channel level as to the bottoms up expectation that are gonna lead to that that forecast and that business outcome.

[00:18:51] Richard: Yeah, that's right. As, as we've spoken about before on this podcast, it's all about taking long-term goals and turning them into short cur- short-term targets so that there's always this continuous feedback loop of I know what I need to do today, and I know whether or not I've succeeded. But those decisions are planned for in such a way that in the long run, if you hit those targets, and if you're reassessing those targets properly on a day-to-day basis, you will eventually get to where you need to go.

[00:19:16] So, wise words. I think that's gonna do it for us. Anything else that you wanna hit on this, Brian?

[00:19:21] Brian: I don't, I don't think so outside of, I think just normalizing that, Finger pointing is very common, and it's not necessarily a, a negative connotation. I think it's just more of, you know, there's, there's an as I've learned for being in e-comm for, for well over a decade is like there are so many things you could be doing at any given point in time that it's often really difficult to assess what is the most important thing.

[00:19:48] And so I, I just wanna normalize that being unclear is very common. But it's the reason why, you know, I'm so bullish on what we offer is because that clarity not only alleviates so much mental weight from your decision-making as an e-comm operator or as a e-e-comm business but also leads you much more quickly to the most high leverage actions that you could possibly take.

[00:20:17] And so yeah, really proud of the work we do and that my team does in order to support the businesses that we work with. So again, I would just say like it's totally normal what you're experiencing. If you feel like you're constantly trying to figure out and point fingers and, and, and solve things you're not alone.

[00:20:31] This is, this is something that we talk through with businesses all the time that we work with, especially as we get them up to speed on what we're doing and bring them into our workflows.

[00:20:40] Richard: That's right. Well, and again, if you want to have us build this out for you and, and kind of solve this issue for you, Cometherco.com, hit the Hire Us button. We would love to talk to you if you're an eight-figure brand about constructing this for you. All right. That's gonna do it for us. Thank you for joining us, Brian, and thank you all of you out there for listening.

[00:20:57] See ya.

[00:20:58] Brian: See you, Richard