We’ve all heard of Bombas, right?
Today, they have a $100M brand.
But when they first started out, their marketing budget looked a little different…
It might even be similar to what you’re working with..
Kate Huyett was employee #2. So she’s been there from the very beginning.
And now she’s the CMO of one of the hottest ecommerce brands.
But what did it look like when she first started out?
That’s exactly what we wanted to find out. And she shared a ton of insights you can apply to your business.
Get our best content on ecommerce marketing in your inbox 2 times a week
On this episode, you’ll learn:
- The best channels for learning with a really small budget.
- The biggest mistake you can make with ad testing.
- The simplest way to think about ROAS (return on ad spend).
- What their best-performing Facebook ads look like.
What to listen for:
- [0:51] What their team has changed since COVID-19.
- [3:49] What their marketing team looks like.
- [7:57] The transition from Goldman Sachs to ecommerce.
- [11:42] The early advertising bets they took that paid off.
- [15:17] What is ROAS?
- [20:08] How they breathe life into the brand with creative.
- [25:00] The biggest changes she’s seen in the ecommerce space since 2014.
- [28:57] The importance of having a mission.
Links to love👇👇
*There’s a 100% chance this has some spelling errors. I know you won’t hold it against me.
Dave Gerhardt: Hey, what's up everyone. I hope you're doing well and staying safe somewhere listening at home. My guest today is Kate Huyett. She is the Chief Marketing Officer at Bombas. They make amazing socks. You've probably heard of them. My mom buys them for me every single year. Kate, thanks for doing this. I appreciate it.
Kate Huyett: Yeah. Thank you so much for having me.
Just to start right off, how are things going from a marketing perspective for you all during the pandemic?
Kate Huyett: Yeah. It's been a super interesting time period for us. We're really fortunate in that socks are something people are still wearing and using every single day and are in the category of an everyday luxury that people are willing to spend a little bit on at the moment.
Dave Gerdardt: Have you changed anything from a team perspective? Was there a point in time where you sent out an email or talked to your marketing team, or somebody in your team brought or was like, "Whoa. This is real. We're going to have to change our tone." I think we've seen so many brands have jus had to adapt to what's happening. Did you all have a moment like that?
Kate Huyett: Yeah, definitely. So on the acquisition side we've always been really focused on ROAS. So we started to track, we started to adjust our marketing spend earlier than most people just because our ROAS started to shift. So we responded to that in a way that we normally would. It was more of an extreme move, obviously, than we normally see. But we sort of tracked that all the way down. And then over the last few weeks through some improvement, sort of from a channel perspective, that shifted us towards channels that have more flexibility, which are predominantly digital and away from some of the offline channels but not in any sort of extreme way.
And then also on the channel side, for emailing our existing customers, most of the people on our list, we decided initially to pretty significantly pull back on the cadence of our emails, making sure that people didn't feel inundated with stuff from us in general. And then over the course of the last four weeks we've slowly added back some of that cadence. And then we've also really evolved, I would say more on the retention side but also on the acquisition side, some of our messaging.
So leaning harder and harder into mission. And then also on the retention side, especially, but also on acquisition leaning into our apparel products, which are newer for us but still relevant in this time period.
Dave Gerdardt: I've seen a lot of discussion about brands. How hard do you push right now, do you sell? And you mentioned that you kind of, you didn't say ramp. I don't want to say that. But you kind of started to scale up some other channels again. Is that because you've kind of settled in? I know we have. We've settled in to like this thing's not going away so we're going to continue marketing and continue selling. But we're going to do it with empathy and understanding about what's happening. Is that why you scaled some stuff back up, because this isn't going to go away overnight?
Kate Huyett: It's some of that. But again, as I mentioned, we're very ROAS focused. And so the things that we had pulled back on we've pulled back on them because we weren't seeing the returns that we needed to see to justify continuing to invest. And then as the environment has stabilized a little bit we've started to see ROAS on some channels, really across all channels improve, but some more than others. And so we've taken that as a sign of, "Okay, we can start to add back some spend here." But always with a focus on that ROAS target.
Dave Gerdardt: Got it. Okay. I'm curious about, kind of a separate topic is your team. What is the team of the CMO at a top ecommerce brand? What does your team mix look like. I'm interested in how that's kind of changed and shifted since when you first started.
Kate Huyett: Yeah. So I started at Bombas as the VP of Marketing and was the second employee. We built the team pretty slowly. We've been focused heavily on profitability since day one, which was one of the major draws for me of joining the company initially. I really liked that the founders were focused on profitability from pretty early on.
So we started with, you know, technically I was the VP of Marketing. What that really meant, especially in the early days, was acquisition, and to a lesser extent, retention, mostly because when I first started we didn't have very many customers. So I'd say the focus over the last six years has really been on building out the acquisition team. When I started I was the only person. Now that team is seven. And then the retention team, which really only truly spun up last year, is now two people. And then in October of 2018 when I officially became CMO, I took under my org, on top of acquisition and retention, brand marketing, which includes for us partnerships and corporate gifting. And then I also took over our data and analytics team, which was two people at the time, is now seven and still growing.
I established a customer insights organization, which is two people. And then I took over, or really built, because we didn't have it in-house at the time, our digital product function working closely with our CTO.
Dave Gerhardt: Gotcha. What's the role of customer insights? Is that someone that was there and you inherited that role, or you went and built out that team?
Kate Huyett:No. That was something that I felt pretty strongly was the foundation of the best-in-class marketing org, and really best-in-class company in our space.
Dave Gerhardt: What do those people do? This is new world for me. What's the role of customer insights? I love it. I'm assuming, like in my head I'm like, "Oh, I wonder if it's kind of like close to product marketing and understanding the market and the positioning." But is it more on the product side?
Kate Huyett: Yep. So it's that team as well as the data and analytics team support the entire company, not just the marketing organization. So the insights world is focused on a couple things. 1.They'll do some work around market research. So for example, you know, we went into t-shirts. How big is the total t-shirt market? How does that compare with the sock market? So sort of broad market research. They do a lot of work around when people come to Bombas what are the things that motivate them to buy from us and what are the things that block them from buying from us? And then try to dig deeper into what people are telling us about why they are or aren't buying to try to generate insights that then the acquisition team and the product team is able to use to help people get to the site in the first place and then convert and then feel really great about their experience.
There's a part of the insights team that's focused specifically just on user research. That part of the team is more connected to our ecommerce products team. And then there's also an element that's focused on creative research. So if we're producing a TV spot, for example, we'll typically run the script and the concept through UserTesting. And then try to understand is the message getting through before we go to production.
Dave Gerhardt: Is that user testing specifically with Bombas customers or people who look like Bombas customers? Are you actually testing ads with customers?
Kate Huyett: No. So for that we use a tool called usertesting.com that allows us access to people that are unaffiliated with our brand.
Dave Gerhardt: How do you go from Kate, the investment banker to Kate, the ecommerce brand CMO? I can see a thread about data and analytics and looking at that. But I'm just curious. How did you make that jump and did you know you wanted to do it?
Kate Huyett: Yeah. So I actually really liked working in finance. I had a great experience. I spent five years at Goldman Sachs. But I would say in my last two years especially there, it became really clear to me that even though I loved the financial markets and really loved the team that I was a part of, Investment Grade Capital Markets, I was really most of all interested in how the companies that I was covering were operating their businesses. And it occurred to me that I might have more fun on the operating side versus financing the operators. And so after five years in finance I decided to take the leap. I went to a super early stage startup because I figured if I was going to make the jump I should really, really go for it, go whole hog. And so I joined a company that was literally just the founders and one other employee when I met them.
I had no idea of what I wanted to do for them other than learn how to operate a business. But the founders identified that I had that analytical skillset. And so I was essentially the first acquisition marketer and also did a bunch of stuff in the FP&A world that sort of fit quite closely together because marketing was one of our biggest expenses.
And then it turned out I just really, really liked performance marketing. And then became increasingly interested in broader consumer behavior and product and retention and really understanding what motivated people to interact with brands to buy. I think it's like the analytical element and then the psychology piece, which actually is quite present in financial markets too. When you're looking at the stock market or the bond market it's all about how are people reacting and the sort of mass psychology behind that.
Dave Gerhardt: Huh. We talk so much about psychology in marketing, but I've never connected it to like, "Oh yeah, that is a related skill in investment banking too." It's like being able to read, you know, see trends and see what's next. That's cool.
Kate Huyett: Yeah.
Dave Gerhardt: How did you learn the eccommerce marketing playbook, because even when you joined, there weren't a ton of examples of companies around the time. So it's not like you could say, "Hey, we're going to go be the Bombas for X," and, "Oh, I know exactly their marketing playbook and I'm going to go do it." You started with performance marketing. How do you go, as a new person coming into eccommerce, how do you figure out that marketing playbook?
Kate Huyett: The first startup that I worked on was an online dating site, which is actually a great place to learn performance marketing because that industry is incredibly, incredibly ROAS-focused. And then when I came to Bombas, it was my first time working in ecommerce. But a lot of the tools that would make you a good performance marketer in the online dating space apply in ecommerce as well.
And then the other thing that was incredibly helpful was that, as I mentioned, we had a really strict focus on ROAS and profitability at Bombas from day one. And so the marketing approach was really determined by where can we spend money profitably. And then how can we do it in a way that fits the budget we're currently at. We were bootstrapped, so early on our budget was quite small. Places that you can operate with a really small budget, but still learn are basically Facebook and search.
And then the part of our budget that we felt we had the opportunity to take a little bit more risk with because we thought it might really work, we were pretty early in the audio space, both on podcast and on Sirius. Both worked really well for us. But that could definitely have gone the other way. And if it had, we would've paused it.
Dave Gerhardt: There's something that speaks to that though, about just being early on channels, like the ability to move fast and test your way into new channels because I'm guessing knowing the way that you probably think about things, you tested your way into podcasts versus just going and, you know, blowing the whole budget on it and seeing what happened.
Kate Huyett: Definitely. So one thing I've been really fortunate in is that I had in the online dating company I worked at before I had the experience of working with TV over the course of several years. And so that was something that I had already, a channel that I was already familiar with. One of the biggest lessons that I took away from my time in TV is the biggest way to use screw up is pausing a test halfway through because then you get neither the learnings nor the revenue from that spot.
And so that was something that, you know, given my experience and the relationship I had with the founders at Bombas, when the time came to work on TV, which was mostly about de-risking from Facebook, which it had become too big of a part of our overall media mix, the story was we need to invest in channels that have real scale and we need to have proven direct response ability. That means TV, it means radio, it means direct mail. Here's how much we need to spend in each of them and over what period of time. And if we go forward on this, you cannot pull the plug partway through.
Having the experience of knowing that to be true and the trust of the Bombas founders was what really led us to get to successful offline testing. Whereas one thing I have seen other companies do is that they do pull the plug partway through and then they don't really learn what they need to learn.
Dave Gerhardt: Is that almost like a stock market thing? Like you invest in something, it goes bad, and you immediately pull out to cut your losses. Is that why people do that?
Kate Huyett: Yeah, I think so. I think part of what people don't understand about TV as opposed to something like Facebook is on Facebook the response is quite quick generally from a customer. Depends obviously on the product you're on. But somebody sees it, they click on the ad, they go to your site, they can buy immediately. TV and radio take a bit longer to what's called wear in, which basically means people need to see it, hear it a bunch of times, and then at some point they say, "Okay, I've heard this ad a gazillion times. I'm going to go take an action on it."
And what happens with TV especially if you cut it too soon is you don't give the channel the time to build into the response that you would ultimately see, which is because it's so different from digital, a lot of companies that are digital-first sort of miss that nuance of the channel. And so if they're a week in and they're seeing, "Hey, sales aren't up that much and we started running TV," they just assume it's not working, when the reality is it could be working. It just needs longer to mature.
Dave Gerhardt: Got it. Yeah. Frequency on TV and radio is probably like the key metric, where on Facebook you can get a response in minutes.
Okay, I have a question for you, which is, you've talked about ROAS like four or five times now. Can you break that down for me? I want you to pretend like I'm running an ecommerce brand and you're on my board and I don't know anything. Like you're going to beat me up over ROAS. How do I think about it? What are the benchmarks? Talk me through that.
Kate Huyett: Yeah. So the simplest way to think about it is for every dollar you're investing in marketing, how much are you getting back? So if I'm spending a dollar, am I getting $1.25 in revenue back, or am I getting $.50 in revenue back today and I expect to get another $.50 in six months, or am I expecting to only get $.75 back ever. So it's really about the relationship between what you're spending and the revenue that's coming in off of that spend.
Dave Gerhardt: And that is probably, but even below that, it's unique to each company given financing and runway, right? I'm sure that was different from you when you're bootstrapped versus, you know, having however much revenue and funding that you have at Bombas.
Kate Huyett: Yeah. So we were pretty focused what we call ROAS is actually technically not ROAS. ROAS is typically on a time adjusted basis, we especially early on. Now this is starting to shift, especially early on we were focused around how much cash is going out the door today and how much revenue is coming in today or this week or this month. There was not really a concept of, in the early days especially, of we're going to spend $50 today and like it's cool if someone takes three years to spend $50. With us that was not something that was ever really an option for us being bootstrapped.
Dave Gerhardt: Do you feel like you learned more about direct response because of that though?
Kate Huyett: I think so. I would say the online dating space is so competitive.
Dave Gerhardt: True. You can't just like spin up a landing page and like test at scale because no one's ever going to see your ad.
Kate Huyett: Yeah. So I think actually I would say the experience I came in with really prepared me well to operate in a bootstrapped environment.
Dave Gerhardt: So you were on podcasts advertising early. How do you set up your team or push your team to be like finding new channels, right? I'm sure there's people on your team right now that you're expecting like...what's the next podcast, whether that's Quibi or I don't know. What are the new channels? Do you have a way of baking that into your team?
Kate Huyett: So yes and no. So we have a set percentage of our annual media budget that we reserve for testing specifically because we look at the ROAS there separately from what we consider our business as usual spend. And the reason that we have those separate budgets, each with a different realized target, is to make sure that no one on the team is saying, "Well, I don't want to do this test because it might screw up my numbers," and that they really feel like they own the spend and the success of the test as well as the spend and success of the core budget.
I think the test versus core approach really changes a lot though over time. I think in the early days we were really small and our marketing budget was quite small. So finding a new channel where we could spend $10,000 a month was pretty meaningful. Now we're at a scale where actually like it may be that running tests on existing core channels and getting a lot more efficiency out of the things we're already doing, whether that's creative, landing pages, changing how we're bidding, may actually have a way bigger impact than trying to get in super early on a new channel. But we really try to keep a balance of exploring totally net new channels and testing things within our existing core channels.
Dave Gerhardt: Got it. I mean you're probably more in a different spot as a business too, right? If somebody's trying to come in and disrupt you, then maybe they should be testing all the crazy new channels. But you probably don't need to. You always want more.
Kate Huyett: You always want more. But also, I think a hallmark of a great marketing team is that you are always looking for what's next and really trying to have a great understanding of the landscape, not just from a channel perspective, but again going back to that core theme of understanding the consumer, you want to be where people are spending time.
Dave Gerhardt: Yeah, wherever that is. If podcasts go away, if whatever goes away. All right, let's shift a little bit and talk about the creative side of things because I think the brand that you've created is just, it's amazing. I think delicious is a good word. But it just looks amazing. You have real pictures, real colors. It's such an amazing brand. How do you shape that? I'm sure you had a vision for it, but how does that actually happen?
Kate Huyett: So I was super fortunate. Two of the founders of Bombas were really focused on brand from day one. And the reason that they asked me to join the team was I brought that more analytical perspective that we talked about earlier. And so I think the creative that you see out in the world is really the result of a push and pull between brand and creative and what performs. We really do try to constantly learn and improve on our creative.
So we discovered pretty early, you mentioned color, we discovered pretty early on Facebook that the ads that really worked the best for us were the ads that featured our brightest most sort of colorful socks. We call them our candy ads because basically the socks looked bright like you're in a candy store. And we found that even though that's not necessarily what customers who clicked on those ads ended up buying, that brightness, that color, that in other cases quirkiness, was what compelled someone to stop, pay attention to the ad, and come through to the site.
Dave Gerhardt: Is your whole creative team in-house?
Kate Huyett: It is. So all the creative ideation is in-house. All the creative production is in-house with the exception of video production and photo shoots.
Dave Gerhardt: How do you balance having such a performance marketing mindset and that's the whole model in ecommerce, how do you balance that with also having an amazing creative team? Because you're going to have so many different, like the personalities of your team is going to be split and you're obviously a super analytical-minded CMO. How do you have balance of those things on the team?
Kate Huyett: Yeah. So I think as I mentioned we've had since day one with two of the founders and myself a really good balance of we want everything that goes out into the world to perform. And we want everything that goes out into the world to look and feel really on brand. And I would say that's our reason, our goal. We don't want to really separate brand and performance because I think when you do that you end up running the risk that the two creative directions move too far apart and that you don't have a recognizable uniform brand in the world. And so we work really hard all the time from the executive level down through the rest of the team to make sure stuff looks great and performs well.
Dave Gerhardt: It's always good if it can look great and perform well.
Kate Huyett: Yeah.
Dave Gerhardt: Okay, we'll wrap up in a couple minutes. But I want to have a couple questions for you. If I was your CMO at an ecommerce brand, you were advising me, what would you be measuring me on? Like I got to give you my scorecard at the end of the year as a CMO. What are the things that you're coaching me or beating me up on?
Kate Huyett: Yeah. I think first, I mean it depends on what the goals of the company are. So I think first and foremost is, is what you're doing supporting the overall goals and strategies of the company. Are you hitting the goals and targets you've set for yourself? If not, that actually might be totally fine as long as you have a good understanding of why you're not, and being able to adjust your plans to try to get closer to hitting those goals.
I think the second thing that I spend a lot of time on and, you know, myself solicit a lot of advice from mentors and coaches on is how does your team work. Are people happy? Are they clear on their job descriptions? Are they working well together? Are they collaborating? Are they proactive in looking for opportunities? I think those are probably the two biggest things that I would focus on.
Dave Gerhardt: Where does ROAS show up on a metric scorecard? Is that something that you'd be like, "Hey, show me every quarter what this looks like."
Kate Huyett: Yes. Definitely. Yeah, that would be in that first bucket of how you're supporting company goals. I would imagine marketing spend and ROAS would both be in there.
Dave Gerhardt: Is there like a target benchmark that you could give or is it different for every company?
Kate Huyett: I think it's different for every company.
Dave Gerhardt: What are the biggest things that have changed in ecommerce since 2014 when you joined? Basically, it's been a whole new world for smaller and growing brands with the ability to go and launch a business. But what are the biggest shifts that you see in 2020?
Kate Huyett: Yeah. I mean 2020 is now a very different looking year than I would've thought it was a few months ago. But sort of more broadly over the past six years, I think just the continued explosion of ecommerce has been pretty wild. I think, you know, Shopify has really grown, it seems like exponentially. And so we're seeing a lot more ecommerce startups in this space. And I think that's probably a win for consumers. They have more choice than ever before.
The other thing that has been really interesting, which I'm curious to see how this year impacts it, is we've started to see a lot more ecommerce in retail and wholesale over the last probably two, three years, especially. And I'm very curious to see where we're still almost entirely ecommerce. We have a couple of great wholesale partners. But we're really predominantly ecommerce. And so I'm curious to see how the ecommerce landscape shifts, you know, post the Coronavirus era.
Dave Gerhardt: Yeah, like if retail's still a thing. If people are going to go in a store or not. I mean it's not going to go away, but-
Kate Huyett: Yeah, it'll be interesting to see how much of the current shifts in behavior stay and for how long.
Dave Gerhardt: For what you sell, you don't necessarily need to go to a store to try on a pair of socks, make sure they fit okay, and buy them.
Kate Huyett: Yeah.
Dave Gerhardt: You did remind me though. I had this question written down, which is did you have to change how you do marketing when you made this shift to wholesale, or was there like a new playbook you had to learn?
Kate Huyett: Not yet because as I mentioned it's a very small percentage of our overall business.
Dave Gerhardt: Okay.
Kate Huyett: I would say on the contrary what we've found is that all of the marketing that we've done for our ecommerce site has really contributed to our success in wholesale.
Dave Gerhardt: From like an awareness perspective?
Kate Huyett: Yeah.
Dave Gerhardt: Got it. All right. Maybe this will be the last one. What's the right time to hire in marketing as an ecommerce brand? You joined early in both of the companies I think you mentioned. What's the right time to bring on marketing at an ecommerce brand?
Kate Huyett: I think it really depends what your goals are as a business and how much you want paid performance marketing to be a part of your mix. And I think how you think about marketing would also really impact the hire. I think if you want to stay lean and scrappy you can probably hire somebody a little less experienced, super hungry. And it also actually really depends on what the composition of the founding team is. So in our case, you know, as I mentioned, two of our founders were really heavily focused in brand and creative. So they needed the balance of a more analytical person.
If on the founding team you had someone super analytical you would actually probably want to bring in someone who has a bit more of a brand background. If you had someone really strong in search, you might want to bring in someone who's much stronger in offline. So depends a lot on your existing team, what the core values of the business are, what the core business objectives are and the strategy you've laid out to get there because that would all point you, all of those things would point you to potentially quite different people in terms of skillsets and seniority.
Dave Gerhardt: Do you think every ecommerce brand has to have a mission like you have? I think so many of the leading brands do have that. Is that like a prerequisite of being successful do you think?
So I would say yes and no. I would say for us our mission is one of the greatest things about working at Bombas for me personally. It brings meaning to my work. It brings meaning to everyone on the team, I would say especially in the current environment. Having our mission and being able to lean into it more strongly than ever has really helped keep everyone on the team engaged and feeling like the work that they're doing really matters. And it's been really helpful in terms of giving customers another reason to talk about us.
But I think the reason it works for us is that we really ingrain it in every single thing we do. We had an all-hands call earlier today. Our giving team walked us through a spotlight on one of our giving partners. We do that every single two weeks at all-hands. We hand out socks, donation socks to people when they come in and interview with us. Like it's really part of everything we do.
I think if you have a mission that is that ingrained, it's really, really valuable. And I think if you have one that's not that ingrained, I think it actually has the potential to be more of a liability than an asset. And if that's the case, I think probably honestly you're better off just being transparent about what you are, whatever that is.
Dave Gerhardt: That's a great example. That shows that you all live that to your core. It's too hard. If you fake it today I think people are eventually going to find out if you don't really live that. Well, Kate, this was an awesome half hour. I appreciate you taking the time. Normally this is when I'm like, "Hey, plug whatever you want." But I think Bombas is a brand everybody will know. So go and check them out. But feel free to tweet at me if you're listening @davegerhardt on Twitter @privy and let me know feedback on this episode, what you're thinking about, what you want to hear on the show.
Kate, thanks for doing it and we'll talk to you soon.
Kate Huyett: Thanks so much, Dave.