Kit CRM founder talks marketing, ecommerce, and the importance of "letting go"
Marketing is a challenge for most online merchants. Taking the time to not only build and run marketing campaigns, but also study best practices and make those campaigns effective across numerous channels, is a lot to ask on top of running a store.
Michael Perry, co-founder and CEO of Kit CRM, a "virtual marketing assistant," says the biggest challenge online merchants face isn’t so much the difficulty of marketing (or anything technical, for that matter), but a reluctance to “let go” and trust experts who can help them.
Perry grew up in the Bay Area, where he worked in family businesses from the age of 10. His first startup was a mobile loyalty program for brick-and-mortar stores that allowed owners to market in-app through a direct messaging client. When he realized it was “too much to expect business owners to sit down and do software stuff,” he decided to build a virtual person—Kit—who could do it for them instead.
Kit is an artificially-intelligent CRM that uses text messages to help merchants market their stores. Customers connect their phone to Kit, and it texts them to build and run email marketing campaigns, Facebook ads and (as of last week) Instagram ads. Perry defines Kit as “focused on building a virtual workforce for people who need it the most.”
We chatted with Perry about the challenges of running an online store, the future of ecommerce platforms like Shopify, and some of the biggest opportunities small businesses miss out on every day.
What do you see as the biggest challenges facing online merchants?
You know, that’s something that constantly changes, but I think it boils down to one thing: openness. The world we live in today has made it easy to start an online store. The truth is, however, that running a business takes knowledge in a lot of areas. Not just knowledge of products, but marketing, SEO, website optimization, branding, etc.
Some of these things one can be strong in, other areas not so much. As entrepreneurs we all have to learn to trust “experts” to help get the job done. Because the reality is, as entrepreneurs, we all have a hard time letting go. “It’s our baby,” right?
So as a business owner, openness is about asking for help?
I think openness is realizing: “Hey! I know a shit ton about roasting coffee beans. Starting an online store is going to be awesome. I’m going to sell coffee beans.” But then asking yourself: “What do I know about logistics? What do I know about marketing those products to sell on Facebook or Instagram? What do I know about making a web page feel modern and fresh and relatable to my audience?”
I think because people want to “own the idea” or protect their baby, they always think their way is the right way, or the best way. Even as a young entrepreneur myself, I want to be involved in our design process, but I have to step back and ask myself, “Why am I paying a designer? It’s her job to do this. It’s my job to focus on what I’m good at.”
For smaller merchants, they struggle with “letting go” or being honest and saying, “I may not be the best here—let me trust someone to make this right.” We get pushback from certain business owners who tell us their way is the right way. The reality is, our company works with Facebook, we know what we are doing. We wouldn’t set businesses up for failure. When business owners ask for suggestions and then don’t like or aren’t aligned with what they hear, they act dismissive.
I think this protective way of thinking, where you think you’re protecting your “baby,” is so damaging to small business owners. Because when you look at bigger businesses, they do hire talented people with the knowledge to “own” those responsibilities. It’s not effective for a business owner to try and “own” every bit of the business.
Do you get a lot of pushback from your clients?
Well, not totally, because so much of our product is designed to work with them. But when they email customer support, saying “Hey, I don’t like the way Kit is setting up my ad,” or “I don’t like the copy of the ad,” they insist we help them change it, customize it. So we warn them, “Hey, we’ve worked with Facebook setting this up the most successful way possible. We’ve worked with copywriters to get successful copy.” And they don’t care, they disagree. So what can we do? It makes me sad. Ultimately things don’t go well, and they end up cancelling their Kit account because three months later they’re closing their store.
We talk all the time about how frustrating this is because we so badly want these businesses to be successful. But you can only lead a horse to water. You can’t make it drink.
When they’re that invested literally and emotionally, it’s hard to let go.
It’s true. I mean, I sympathize. I struggle, too. Everything as a business owner is so emotional and scary. You’ve invested everything into it. I know I have. I have put every fiber of myself into Kit. I think one thing we pride ourselves on is understanding that reality, their frustrations, their fears. We live it ourselves. So just having a discussion sometimes requires us to ask for their trust. If you get a chance to read our Shopify reviews, you will see that they beam about our customer support. It’s because we care about them and their business.
Do you have any competitors?
Well, we are doing something pretty unique. We haven’t come across another company doing what we’re doing, or trying to accomplish what we’re trying to accomplish.
You see a lot of people trying to build software tools for business owners—to make running ads easier, etc. We are literally building a person who works for these people. Kit can do so many things. We’ve sent 280,000 email marketing campaigns this month alone on behalf of store owners. And Kit works all around the world—Facebook ads, Instagram ads, even sending thank you emails to customers. It’s a full digital employee. I think that is interesting, and our software itself gives a personal connection.
Look at this:
“I love her.” People connect to Kit. It’s very special in that way.
Why use SMS to help merchants with their marketing?
For a lot of reasons. But initially it was something you used to talk to your friends and family and co-workers. It’s the global messaging client. We’ve always felt that texting Kit should feel like texting a friend. Now, you might be texting with Kit on one thread and your best friend on another, all in the same app. We’ve expanded that into Telegram and will eventually expand into more messaging clients. But we didn’t want our own messaging client.
Kit builds ads for email, Facebook and Instagram. Will you be you adding any new marketing channels in the near future?
Of course! I mean, we just launched Instagram. We would love to get involved with Pinterest. Kit needs to have unlimited abilities. The greatest marketer in the world should be able to do anything. We believe that Kit should be able to do everything that’s marketing-related, based specifically on where your business has the largest opportunity to grow.
For example, Kit should be smart enough to recognize that your conversion rates are better on Facebook than on Instagram and focus your marketing budget there. Or that certain email templates do better than others. I truly in my heart know we are just getting started.
Marketers are going to be terrified when they read this.
Ha! They shouldn’t be. Kit is special because it gives business owners the person they need but can’t afford. It isn’t our mission to replace people. It’s our belief that business owners need help. They need employees. They need a team. Why should they not have those things? The only reason is capital. To me that doesn’t feel fair. We will give every business owner a fighting chance to succeed. And that means getting those marketing challenges—the effort that goes into that—off their plate.
If someone is already doing their own marketing, running a Facebook campaign for example, will Kit totally replace that? Or can you run automated and curated campaigns simultaneously?
You know, we ran a survey recently. 63 percent of people who use Kit say they depend on Kit to do all of their marketing. They’ve completely let go. That, to me, means we are doing something very right. Until people build complete trust, they will always do things in addition to Kit, but when they see the results, they realize they can’t beat Kit. They aren’t Facebook marketing experts. Kit is designed at best practice. You literally can’t do anything better than the way Kit does it. I mean, you can, people do—but it’s our job to build something that allows online business owners to focus their attention elsewhere.
What do you see changing in ecommerce in 2016?
I think it’s not really a “change” as much it is another strong step. Reports are saying that this is the first year people bought more on their phones than online (I can’t confirm that). I think we’re going to see way more mobile commerce in 2016. I also think that social commerce finally has its breakout year. Pinterest will become a major shopping experience.
Do you see a future where merchants don’t even need a website?
No. I think websites are important. I don’t think merchants will depend on getting all their sales from their site—there will be other sales channels, like Pinterest, for example—but having your own identity is so important. You can’t have your own identity on Pinterest, Facebook, or really even Instagram (although though it’s the closest to letting you do so). A website is your store front. It has to have your brand, your personality, etc.
What about marketplaces versus branded webstores? For example, you support Etsy users and Shopify site owners. Those are two very different places to sell. How does a merchant need to think differently when selling on their own webstore as opposed to a marketplace like Etsy?
I think there’s a natural “graduation” to Shopify. Etsy is a great place to get your feet wet, sell a couple things, but the discovery benefits are dying off. All the businesses that grow on Etsy, they leave. They want their own brand. They want more benefits than Etsy can provide. Look how committed to that Shopify and TicTail and others are. They have the premium businesses. Don’t get me wrong—Etsy is great. And as you know, people sometimes have both. But they have both because they started on Etsy and graduated to Shopify, not the other way around.
How do you see ecommerce platforms evolving? Shopify, Bigcommerce, Tictail, Big Cartel—where are they headed?
Oddly, I think the interesting play is helping your traditional brick and mortar go online. With logistics becoming so seamless, especially at the local level, it would be foolish to not offer your products online. Clearly that’s where people want to shop. So, those platforms will get bigger to the extent that they all want to own commerce. They want to be the go-to solution: both offline and online.
Shopify is clearly ahead with POS and online and Shopify Plus. It’s hard not to see the reality of their dominance. We also support Bigcommerce, Big Cartel, and TicTail—all great businesses. I think TicTail is going to have a big year in 2016. They just rolled out Talk and are working on some more cool stuff. I’d encourage anyone interested in the space to keep an eye on TicTail.
What opportunities are small online merchants missing out on?
I mean, I hate to sound harsh, but small business survival is something I’m incredibly passionate about. So lately I’ve been emotionally upset, and frustrated because it goes back to my first answer—their lack of openness, the willingness to see that they can win. There are so many great apps, so many great agencies available and affordable to help them. But there has to be a willingness for their business to succeed. They have to switch their thinking from “small business owner who’s all alone” to “CEO of their business.”
Not to plug my own business, but we designed something that works for them, that does all their marketing. If you aren’t marketing your products, you can’t sell shit. There are other great agencies that will help you do all your SEO, that will optimize your page, that will design beautiful templates and themes. There are shipping companies who make things affordable and easier than ever. So there is zero excuse to not have a fighting chance in today’s world.
I grew up working in my uncle’s brick and mortar jewelry store. None of these things existed. The opportunities to build a big business weren’t there. In today’s world, you can be a 1-3 person team selling t-shirts and make a million dollars a year. You just have to fight a little harder and be a little more open.