Why We Built the Prophit Engine: Who Is It For?

[00:00:00] Richard: Hey everyone. Welcome to the Ecommerce Playbook Podcast. I'm your host, Richard Gaffen, director of Digital Product Strategy here at Common Thread Collective. And I'm joined by our CEO here, Mr. Taylor Holiday, and we're gonna be announcing something very exciting today. Well, we've already teased it in a previous episode but as of yesterday, our profit engine system will have gone live.

[00:00:21] We're opening it up to the public and it's available for brands the brands to whom it would be useful, which is many of them. So what we wanted to talk about today is exactly what it is. Break down a little bit how this is different from what we've been doing before, how this is different from what other agencies have been doing and why we think it's the future. 

[00:00:37] So Taylor, let's just jump straight into it. Talk to me a little bit about the profit engine and kind of what we're celebrating today.

[00:00:44] Taylor: Yeah, so if you're listening, the benefit to you as a founder of the profit engine, and then we'll explain what it is. But I wanna start with why you should give a crap is.

[00:00:52] Richard: Mm-hmm.

[00:00:54] Taylor: You'll forecast more accuracy accurately. Last year, we forecasted within 3% of our revenue goal across $3 billion. In GMV, you'll grow more contribution margin.

[00:01:04] Customers that were worth CTC for all of 2025 grew top line revenue 35% and grew contribution margin even more at 41.5% customers that were with us. And three, you'll save a bunch of money in the process. We think that the price of this offering can save you upwards of a half a million dollars a year against your current labor and technology stack.

[00:01:24] So that's what we built and we built this because we see something happening in our industry that we feel like is critically. Important to respond to. One is we recognize that the challenge for e-commerce brands to produce profit. And to do it predictably has never been harder. Your p and l is under attack from every imaginable angle, from tariffs on the cogs to rising CAC on the marketing side to tons of different options of services and labor and people and all of the things on the OPEX side.

[00:01:56] And so you are the challenge of generating not just EBITDA level profit, but even free cash flow for founders has never been greater. And overlay that with an immense progress in technology that allows us to maximize the capacity for labor, to bring you value and to embed technology into those people.

[00:02:14] And we think that's our obligation, is that what we have as an agency is over a decade of experience is. Working across so many different brands, building systems and processes to embed our methodology and experience into the tooling that has emerged with AI and the database structure that we've built with stat lists that allow us to deploy a methodology faster and more effectively than anybody else.

[00:02:38] And so that's what we wanna do for people is that I, I believe all the time that our job is to make it cheaper for you, to get immense value from your service providers. And to get more tooling and possibility into a better and better price all the time. And so one of the weird things we do at CTC, that's like abnormal from ev, excuse me, every agency is, I'm constantly thinking about how we can drive our prices down.

[00:03:02] How can we pass more of the excess value onto you, the customer in our service, and we've been at this for a long time, and it started in a small version that you probably saw us talk about it sometimes, which was our global accelerator program. This is the first time we took one person in combined roles in technology into a market best price, and that service has exploded.

[00:03:24] It was very obvious that not only was there demand on the front end, which was for $5,000, you get meta Google. Ha, growth strategy, stats, bi, all of the things and the market wanted that a lot, but there was, we needed to validate that the retention would be good, that the quality of service could be delivered on that promise, and the retention has been better than our core service offering.

[00:03:45] It's even more effective. It turns out one person is actually oftentimes more effective than the chain of command of many people talking to each other. And so we've watched the retention meet it and we went, okay, this is clear that this is where this is all progressing. How do we now take the same principles and apply it to what we call PE eight or our eight figure brands?

[00:04:05] And that's what's brought to life in the profit engine part Profit engineer. This new role you're gonna hear us talk a lot about it's head of growth plus meta plus creative strategy, three roles in one person. That's what a profit engineer can bring to life. Plus stats, all of the database, all of the AI enablement, all of the reporting and methodology and tooling in partnership with the engineer to bring you an incredibly effective service.

[00:04:29] Richard: That's right. Right. So to in summary, what we're kind of offering here is a rock solid for forecast that is as close to a clear vision of the future as is possible in the world of e-commerce. We're offering a system that will generate more top line revenue that will generate growth and contribution margin, and we're going to somehow do it for cheaper.

[00:04:47] And so this is a hell of a deal. I think that like. Let's dig in a little bit more, like you've already kind of touched on, and I think in a previous episode we touched on the specifics of why this could work, why this isn't too good to be true or whatever. So let's, let's talk about a little bit talk a little bit about the way that technology is maybe enabling this for enabling this service.

[00:05:06] Taylor: So if I think about, let's go through each of these. So, forecasting as an exercise right now requires many different pieces of technology to come together thoughtfully. One is just general database structure around your organizational data. So think about this as API integration into all the core stack.

[00:05:24] Obviously, we'll call it the marketing level stack. This is your Facebook, Google, Snapchat, Pinterest ticket. TikTok, that's just one layer. Then there's what we call the order level data, or the customer level data. So this is your Shopify integration that has all the order history for your entire business, including potentially Amazon as another layer of distribution for order history.

[00:05:44] And then the third is the finance data, the cost of goods, the p and l. All of that information compiled into one organizational database, and that's where there are other people that offer that. But the thing that we also add in now is two things on top of that. One is the qualitative data. So we are big believers that the marketing calendar and all of the actions that you have taken as a marketing department over your history connected to the data is a really important component to then designing a future forecast all the way down to the daily level for every dollar and every channel.

[00:06:15] And so that piece of infrastructure is a technology effort. It's organizing your data into a single place that then we can layer on a lever layer of data science that happens in partnership with AI to produce a three specific models that we care a lot about. New customer. We call it the spending power model spend in A MER.

[00:06:36] You've heard episodes about this, your retention model, look at your cohort specific LTV of your customers, and then a third model, which we call our event effect model. What do these marketing actions cause in your data? Those three sort of proprietary models sit on top of the data. And again, think of this as a science team.

[00:06:53] An engineering team that created these, that allows an individual to get leverage from their historical effort. So in our business, it's not like that one person has to go in and figure out how to develop a methodology for forecasting. We have it. They absorb the inputs and can apply the leverage of that historical technology to your benefit.

[00:07:11] Stat list is an interface that allows it all to happen succinctly and clearly so that they can build that plan across all the core metrics we care about, down to contribution margin. So there's an ideology that's woven into that. So it's technology plus ideology to say, okay, we're gonna build a, a roll up to contribution margin as well as a p and l through these layers.

[00:07:29] Of forecast, and so that every person that walks in as a profit engineer gets the benefit of that architecture at their disposal. So that's how forecasting one person can do the job of the CFO, the cmo, all these people that have to collaborate around it is that we have a system that's years and years of effort and refinement to allow one person to build a forecast.

[00:07:47] So that's just an example of how, let's take that first section and say, okay, how can one person forecast the accuracy of your finance team, in fact, better than your finance team? Well, here's how. That's the, that's the enablement for that piece.

[00:07:58] Richard: Right. Okay. So then for the second piece there, when we're talking about contribution. Margin and, and top line revenue. Rather, what we're really talking about there is the execution piece. And so like, really, one thing that I think is like so surprising or striking about this is the idea that like this guy who's also doing all your forecasting for you will also be doing your media buying for you as well, and kind of like quarterbacking almost everything.

[00:08:21] So talk a little bit about like how that's gonna work as well.

[00:08:24] Taylor: Yeah. So the three roles we believe we've sort of encapsulated into one are a head of growth, a MetaMedia buyer, and a creative strategist. And we're gonna keep collapsing more into that over time, but for now, those are the three that we think we can really go after. So if we think about the role of each of these people ahead of growth's, primary job is to set the expectations, define the media budget, design the channel allocation.

[00:08:45] So this is another big piece of it is we have an MM. We have incrementality testing in a measurement system that allows one person to make, to turn the forecast into a budget allocation across every channel to define a measurement system, and then give them the tooling to see, okay, where are we at every day on that plan, build a full email and SMS send schedule.

[00:09:06] That's all part of the calendaring and planning process. So one person. Designs the system and then can see every day whether we're on or off course. That's kind of the head of gross job. Define the expectation, manage the team to deliver the expectation. So we give them all the tooling and process to do that.

[00:09:22] Then what we found is the second layer MetaMedia buying, is that for most of these brands, 60 plus percent of their media budget is going to meta. So this is the primary place where if you're going to affect day-to-day levers, that's the channel that most of this is happening in. So we really had to deconstruct the role of MetaMedia buyer and say, okay, what takes all of their time?

[00:09:41] What makes the job labor intensive? And what we found that was that over half of their time was going into the process of building in the ad account. If you've been a media buyer, if you've ever worked, you know that it's laborious to literally create campaigns, click all the buttons, upload the images, manage the, the, the pipes from receiving a creative asset to uploading an account, to designing the account structure, to set the exclusions to all these things.

[00:10:05] And so we built something called push to build, which is we enabled a way for them to one click turn a creative asset into a campaign. In our structure, we have a defined. Campaign structure methodology that they leverage. We use bid caps and cost caps or ROAS or cost controls and all of the accounts to ensure.

[00:10:22] The budget allocation and pacing happens appropriately. And so that we were able to knock out a massive portion of the labor portion of the job. And then the second piece, the analysis, the data of looking, okay, what campaign's working? Where would I need to budget or optimize? We actually are big believers that humans are not well designed for that job, that that's where we wanna bring in AI oversight and automation.

[00:10:45] Into surfacing information for our profit engineers about the actions that they need to take relative to the performance of the system against its goals. And this is where our database, I think is really critical to understand is that because we have a data point in our data structure, which is performance to expectation against the clear defined measurement system.

[00:11:06] Now if you layer on any AI analysis. Th they're able to see, is the account doing what I want it to do? Not just how is it doing generally, but how is it doing relative to my expectation of the channel and where I need to get to. So what that allows for is collapsing the amount of time and analysis that's needed.

[00:11:24] So you obfuscate away all the layer of building, you create support around the analysis, and now all of a sudden that both of these jobs get done way faster. The third one, I'll just go to the last, the last thing here I'll, then I'll let you get it, is the round creative strategy. So we think the primary job for creative strategy is actually about creative supply chain.

[00:11:44] I've, I have a lot of content about this. So we built a tool called the Creative Demand Plan. And what the Creative Demand Plan does is it takes your monthly budget. In the channel analyzes across five specific creative metrics to define the amount of production that you need. So how many assets do you need to make to achieve, to achieve your budget and spend for that month?

[00:12:03] And then it breaks that number down into. Evergreen versus marketing moments. So brings your marketing calendar to life and then tells you which products to focus on and whether to make images or videos based on your performance. So what you end up with is, okay, I need this many images, this many videos of these marketing moments on these products, and then you partner with what we suggest is a a production network.

[00:12:28] From your internal team, usually CTCs doing some, we have creative service offerings around creator content man on the street, AI branded CTC, so we're usually taking a portion of it, the internal team's taking a portion of it. Maybe there's another creative agency in there. And we can assign the production responsibility of those specific asset types around those specific marketing moments to that network.

[00:12:48] And then those people can simply upload into our system and single click push to build from there. So now you get this analysis layer that happens on top of it. We also have an integration with motion that we're allowing for some of the analysis of the creative performance that's gonna continue to come to life in the Creative Demand plan.

[00:13:05] So it can turn that into actual recommendations around what kind of, what angles to approach, what audiences to speak to. We have something called the ultimate Brief that informs it. So again, all of this tooling. Allows someone to go, as they're building the forecast, they're actually building a creative plan.

[00:13:19] They're building a media allocation that have now gives everybody their job to do on the production side to come in and support against the execution. And so everybody's role gets clear and that one person can sit at the center of all of it.

[00:13:31] Richard: Yeah. So that, that question may be about the production coming into the system or whatever raises my next question, which is what, as the client, let's say you sign on for PE eight or whatever you know, is your relatively large business. What is your role now? What, what is PE eight taking that you no longer have to do?

[00:13:49] You no longer have to hire for?

[00:13:51] Taylor: Yeah. Great question. So those three things, meta media by our creative strategy and growth strategy or head of growth, those are the three things that right now we can immediately take off your plate. Now do we have to, do you want us to partner with your internal team? Sometimes yes. Do we? All the time?

[00:14:04] Sure. Is there sometimes overlap? There is. But in terms of if we could confidently say to you, we could take those, but that leaves lots of things to do in marketing. Number one, and I think this is the biggest job for the brands themselves, is to go build the moments and the products and the big events in the future to get out of the monthly cycle and start building the peaks into the future.

[00:14:22] I think that's the most impactful thing you can do as an internal team. That's not the rhythm of how CTC works. The second thing is creative production, so the actual making of assets. We have an offering for that that's in supplement to the profit engine where you can buy what we call units of growth if you want us to make ads for you.

[00:14:39] But building that creative production pipeline with as broad and as many people as possible those are what the best teams do. They're often sourcing creative from the. In-house from other partners, from as many different sources as they possibly can. Customers whether it's TikTok, shop pipelines, they're building that creative piping to produce as many assets as possible.

[00:14:58] That's the second thing. And the third is retention. So email and SMS, this is a supplemental service that we will offer if necessary, but somebody has to actually execute the production of the emails and the deployment of that piece of it as well. As I think about all the work to be done on the growth team those are big pieces of it.

[00:15:15] Now, there are other things. Let's say if you manage Amazon PPC as an example, or maybe you do buying on linear television or other things that oftentimes there are other complimentary pieces depending on the size of the organization. And Google is obviously the other one that where right now we still use a media buyer.

[00:15:33] If you want Google. We think it's a critical component. We will add a media buyer to that. We're building the tooling. You can see this, where this is all headed to collapse more. But for now, we wanna be clear about where we have the capacity. That's a big part of what we think about with profit engine to actually do the replacement work or where we're gonna add a team member from our side.

[00:15:50] So a lot of this is a jigsaw puzzle that we're putting pieces together between your team and ours to execute against the expectations of your team.

[00:15:57] Richard: Right. So I mean, this is a conversation that we've had, that I've had with Joy many times that the, the purpose of this is to create a situation where you, as the leader of the business, no longer have to be thinking about putting out fires basically, and. All of the things that you've always wished that you would had the opportunity to do, like fix, think six months, a year in advance in terms of brand activations, whatever the case may be.

[00:16:18] Those things are all available to you now because the day-to-day basis is no longer your concern in the same way because we have also the system of communi communicating what's going on in your account is very clear, it's very straightforward. 

[00:16:29] Taylor: Think that, I think this is like. If you wanna hire us, this is the challenge I would give you, and this is often very hard for founders or teams, is, is to let go of the day-to-day and now hold us accountable to the outcome. So we're gonna give you a forecast and our job is to deliver it, plus or minus 10% to target with immense accuracy.

[00:16:46] That's the expectation. If not, we should be on the hook for that. But what that means is. That as you let go of that portion of it, you take that space and you go create groundbreaking ideas of the future. Awesome campaigns, new product releases, big promotions, big ideas in the future that you can bring back to us and say, okay, in June we're launching this amazing new skew.

[00:17:05] Let's integrate this into the plan. We think we're gonna get to do more volume X, Y, Z, and hold us accountable to delivering on that monthly cycle of execution and planning as you go. Those are the teams that we work best with.

[00:17:17] Richard: Right. And actually that, that's maybe like, kinda my final question here is like what, what is the ideal client for this? So one is somebody who's willing to trust us, obviously, but just generally speaking, like who's gonna benefit the most from this product?

[00:17:30] Taylor: You've heard me talk about them a lot, but I'm gonna use the illustration because I think they've really embraced deciding to build with CTC in the way that they think about designing their internal team. And that's the team at Bourne Primitive and Claire who leads marketing over there. They know what they're great at and what we're great at.

[00:17:45] As an example, they don't try and forecast while we forecast. We build the forecast. They ask questions or push back on it, but they adopt our system then plan as their plan. That's a critical component. Don't hire a dog and bark two, don't. Don't hire us and then compete with your internal forecast and have multiple data points so the team doesn't really know which is which.

[00:18:02] And we're working on a number and you're working on a number. You have to unify. That the goal that we're gonna build together, that we're gonna track against is the goal for the organization. That's really important, number one. Number two is you're gonna have a team that's going to build this creative network of production.

[00:18:16] So you're gonna say, whether it's CTC or CTC, in partnership with us, we're gonna make sure that there are more assets than we could possibly need all the time deployed into the system. So with Born PRI as example, there's two different agencies that work in partnership with us. We make some ads. They make some ads, they have creator content, they do big extravagant shoots.

[00:18:32] They have all this net, this creative diversity. That's constantly flowing into the ad account together. And then third is they work on, like I said, these campaigns and big moments in the future. Product releases, stories you've heard me talk about, like the Veteran's Day where they, they paid off veteran medical debt.

[00:18:48] Like those kinds of moments that allow us to go out and say, alright, hey, on November 3rd. We're gonna be able to create a plan for a spike in revenue because we went out and developed this story. We have this Fox News hit, we have this influencer post, whatever it might be, the things that are outside the world of where we're executing.

[00:19:04] But what they don't do is micromanage the ad account on a day-to-day basis. They ask us to deliver an outcome and hold us accountable. Skull candy is like this as well, where they understand their brand uniquely and they're gonna go build partnerships and stories and efficacy, but they're not interested.

[00:19:18] And spending three hours on a call, breaking down the CTR of every ad campaign, why we did this with that ad and whatnot. That's where things just get bogged down. We're duplicitous in our work. If you wanna manage the ad account, okay, great, you, you manage the ad account and be accountable, but otherwise hold us accountable to the outcome and we'll deliver it.

[00:19:34] Richard: Sorry. Yeah, I think it's, it's, it's important to think about this as like, it's not, it's not really a service relationship in the most traditional sense of like, you are hiring somebody and telling them what to do. Like this is, it's the people that we work best with, and this has always been the case, are the people who are willing to trust us to be a guide.

[00:19:52] Right. And ultimately, like that's obviously, that's something that has to be earned. So if you're interested. In us building that trust, building that relationship, and guiding you on this journey. PEA PE seven these are our, both of our offerings for seven figure eight figure brands. They are wide open right now and we'd love to talk to you, comment thread co.com, hit the highest button and let us know that you're interested.

[00:20:14] Taylor, is there anything else that you want to hit on this? Anything you feel like we missed?

[00:20:18] Taylor: I just think that like we went through and one of the things I believe about what we're trying to do at CT C all the time is bring more value to the customer in the form of better prices. And the way that we're gonna do that is by creating technology enablement of the service. And so we've done this analysis, and I think this is roughly true in terms of what you're getting.

[00:20:36] I looked at the median price of ahead of growth. Median price of a meta buyer that's all off a Glassdoor data. You can go look it up yourself of a creative strategist. Then I thought, what does incrementality testing cost? What does an MMM cost? What does it cost to get a BI tool? What does it cost to get forecasting and planning in terms of a software?

[00:20:53] And I said, okay, that total stack, and it's about 50 to $60,000 a month for a business, we have enabled all of that and we're actually sacrificing some of the margin to take a little bit of a variable upside against that. And so we're saving you half a million dollars just from the start in the service delivery in the, of the function.

[00:21:11] And if you're a seven figure brand, that price is even better. And so there's a scale here where I do not believe that you can possibly get this level of talent and this level of tooling working on your behalf at this price. And then from there, the outcomes. Forecasting accuracy, growth of contribution margin while saving you the money.

[00:21:30] Those are the accountabilities. Those are what were the promises that we're here to deliver on your behalf. And there is no market price that you can get that at for your business. So if you are a business that's looking to go lean opex, take advantage of AI tooling and benefit for the sake of marketing, investment, product development, all the things that an e-commerce business should do.

[00:21:47] This is the way to make that happen.

[00:21:49] Richard: That's right. Better services at a better price. Folks. It's a screaming deal. Check it out. Comment through our co.com again, hit that highest button, we'd love to talk to you. Alright, I think that's gonna do it for us. Everybody Take care and we'll talk to you next time. See you.