The Secret Sauce Of This Chocolate Brand's Success
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800k to 2.2 million, that's amazing growth. What are the five big picture things we're going to talk about today? One of the major things is the irresistible offer that we put in place and the second one was investing into ads. Then the third part that is important or was important, not to wanting make money on their first order. Yeah, the lifetime value. Yes, that was a big change for us. And then investing into social media, newsletter content and that helped us.

Grow. My name's Rudy Moore, host of Living the Red Life podcast. And I'm here to change the way you see your life in your earpiece every single week. If you're ready to start living the red life, ditch the blue pill, take the red pill, join me in Wonderland and change your life.

What's up guys, welcome back to another episode of Living the Red Life. Today, if you like chocolate, well you are in for a sweet treat. Let me tell you why. Andy and Barbara are joining me and we're going to dive into five specific ways that they took their business from 800k to 2.2 million in just one year. Five tactics that I had the pleasure to wash and help them with that they implemented. Massive growth and hopefully some big lessons for you. Guys, welcome to the show. Thank you for having me.

So, you know, obviously we're going to dive into some juicy markets and stuff, right? But if someone doesn't know, you know, the chocolate side and you have the agency side, do you mind just giving a quick overview to everyone on what you guys do? Of course. Happy to start. So the chocolate business started as a fun on the side business. The chocolate maker or producer is an Austrian, very famous Austrian chocolate maker. And we knew them for decades.

20 years already and they are working with our agency for 22 years now and when Andy and I immigrated to the United States, we missed the chocolate. Yeah. Really. And then...

And then we started talks with the owner and said, how about us starting importing soda chocolates to the United States and selling it? And that was like 10, actually exactly 10 years ago. And then we just started. I thought, oh, let's start with 20 flavors. And the owner, Joseph, told us that no way we make like 500 flavors. So we started with 90. We knew we can't do it out of our home. We needed a warehouse. And this is how it started. Wow.

And then Andy, you obviously help, right? Right. And you help with the business and maybe even some of the chocolate. Right. I help with the eating, obviously. We have to test the chocolate at some point before we bring them to the market, of course. That's very important. Right. Right.

business, but also your agents. Yeah. So our agency, we are, um, our part, the agency is responsible for all of the technical stuff. Okay. So everything that you come sides, the technical side, that's what the agency does. Everything ad related to agency does. And like Barbara said, um, our introduction to the chocolate manufacturer was actually through the agency side because he, we met him 20 years ago and he, he said, you know, I want to have an online store.

And I said, I cannot imagine selling chocolate online. Oh boy, was I wrong. Because now he's one of the strongest e-commerce stores in Europe. And all of that has been built by us. And so we have got a lot of experience, obviously, because of that.

And then when we came to the United States and we figured, okay, we have to do that. We took all of that knowledge we already had and put it here into place and put everything on. Yeah. And, you know, so I'm excited to dive in. You know, you came, obviously you've been working with us for a couple of years and...

You know, you guys, you follow instructions, you go implement stuff, you know, you're always pushing and innovating. It's been so great to watch. And, you know, obviously today we're going to focus on those tactics for everyone listening. So let's dive into, you know, obviously what you learned from me there, but I would love the practical application of how you implemented it.

Yeah, I remember it like it was yesterday when we were at your office and you were telling us why not going after the low hanging fruit, which is the e-commerce store, right? And then building an irresistible offer and like 50% off the regular price. And I was shocked because I wasn't ready to think about selling something, not making money on it. But you really pushed that mindset and started making us thinking that we should try it.

and then we tried it and it was like amazing how people took on this offer and we finally had a way getting the chocolate into people's hand who wouldn't have spent more money at the beginning then they got hooked and that's what we knew if they try the chocolate for the first time they get hooked keep coming back so this was a

This was amazing. We started this more than two and a half years ago and we haven't changed that offer. It's still the same. Still works great. I think it's so important for anyone listening. If you sell any product that does better when they get it, it's so important to like get it in their hands. Right. And you do have to lose some money or cut the prices or give free shipping.

If you really believe in your product and that you believe that once they get it, they'll be lifelong fans, do whatever it takes to get it out there. Exactly. It's never going to help if they just see an image online, right? Especially any meat where you have to taste, feel, touch, experience.

You've got to do what it takes to get it out there. And obviously, you've got a lot more customers now because of that, right? Because we know, like you said, when people try our product, they love it. But the difficult part is to get them to try. So the 50% off deal, the irresistible offer made sense, but we just didn't have the idea or the mindset for it.

What's important though is you have to look at the numbers too, at the data, because we know when we get something to the store and buy the product, we know about 30% of those people stay with us and buy again. So when we look at the lifetime value of those customers, it totally makes sense. But that's something we learned from you because we didn't do that before. And how many come back generally over time when they buy the first one? 30% come back. 30%? Yes. Is that how it went back?

And those 30% probably come back again and again. Of course. Yeah, for gifts and Christmas and Valentine's Day, etc. When I say 30% come back, it's more than one time they come back. Because we have some, they come back for once and by a second time in a year or so. But then we have a bunch of them, about 20%, 22%, that by...

the whole year, every month. What do you think your top customers spend? Have you looked at like some of the top, top customers? They spend hundreds, thousands, I guess. Yeah. Top, top customers. Yeah. We have, we have people who buy 60 bars every two months, which is a lot. I mean, it's not, it's not the regular customer, but there are some super fans. Yeah. Yeah. That's great. So, uh,

you know, that's the first one, Irresistible Arthur. And, you know, everyone listening, if you haven't heard of that, I have a number of episodes talking just about that from like years ago. Go find it. But it's really the concept of standing out, right? Giving something that it's hard for them to say, you know, no to and making it so it's like,

oh, what's the risk, right? This chocolate may suck, but look, it's discounted, it's cheap or cheaper than it should normally. Obviously, it still has a premium brand, but it's maybe more affordable to be like, what the heck, let's try it. And because you have a great product, once they do try it, then you're really relying on that follow-up and that upsell and cross-sell, which is probably the, let's lead into that the second thing,

which is the lifetime value of upselling, right? So can you talk a little about how you do that? How do you get them to come back? Yeah, we have newsletters. Since, again, when we met you and we learned from you how important newsletters are, we started sending newsletters every day. And what were you doing before that? Maybe once. Every second month. Yeah.

We just let so much money on the road, you know, on the table. It's wild. So now we do it every day. It's a lot of work, obviously, because we have to figure out every day the content that we send out. I mean, we try to repurpose some of them after a year or two, but it's still a lot of work, but it's so worth it because we know every single time we send out a newsletter how many people come in order just because of that. Of course, yeah. And the thing with selling every day, sending every day is,

A lot of people fear it. But one thing I explain is most of those people aren't opening that email every day. So yes, you send every day and as the business owner, you're like, wow, this is a lot. Most of them only see one or two of those emails. Exactly. So it's not like, you know, maybe the top fans see them every day, but they like you. So who cares, right? Like if I see my favorite brand's email every day and social posts, it's like, I like that brand. I'm okay with it, you know? Exactly. And yeah, it's...

again you're working so hard to get the customer you spend a lot of money um it's like you just you you've got to do that second part right which is following up with them so um you email every day anything else you do to get more repeat sales yes so after 10 days 10 days after they get their first order new customer they get an email with a discount code for the second nice

That helps in a big way. We send them a text message after three weeks to write a review for us. But even that leads to orders because they get reminded, oh, that was that awesome brand. That's what we do. Because they have to think about it. When they write us an email or a review, they think about us. They think about the product they experience. The food, the taste. Is that how many are left in their cupboard, in their kitchen? Exactly.

What we also do when they get their box, they have a card in there with a referral program to invite a friend. They get like $15 off their order. Their friend gets $15 off. So this is also a great way and a cheaper way than ads to gain more customers. And those customers are generally better too if it's a friend selling it for you, right? It's a warm recommendation. A lot of things there. So emailing every day.

What about upsells? Do you upsell at the comp, post-purchase?

The upsell in the cart. Yes. So we have cross-selling in the cart, obviously. And we see that because people, when they come in into our irresistible offer, it's a low price offer, basically. But we see a lot of customers that order more than just that reduced package. So at the end of the day, we have a nice order value because our average order value is about $60, $65. That's amazing.

Which is great. $5 on order is great. And the thing, the psychology behind it, which is interesting, is when you sometimes do an irresistible offer, the order value still gets really high because people feel they got such a deal. I'm willing to spend a bit more because I got such a good deal here. And it's like if you get, you know, say you get free airfare flights, right, or super cheap, you might go, well, we'll spend a bit more on the hotel just to...

the plane was free, right? The plugs were free. So you justify it in your head and it can work really well. So upselling, cross-selling, email, text message, and package placement referrals and pushing reviews, right? How many reviews do you have?

We have about 600 or 550 on Google and then another almost 500 on Google Shopping. It's a separate platform for reviews, product related. So I think we come up with all across the platforms like Yelp and TripAdvisor. Maybe 500. Yeah, in total. But the majority of that, we just came in that one year. Yeah.

Because we didn't do that before. Yeah, I mean, we talked a lot. Obviously, when I teach it, I go beyond reviews. I talk about social proof. But reviews are a massive part of it. Yeah, and we take those reviews and show them on the website. So every single time when someone comes in, we have small pop-ups that show up. That's the social proof part. And again, it makes a huge difference when people come to the shop. They didn't know us before. And then they see all of those nice...

I mean, the last 10 years, we're so, because of Amazon and stuff now, we're so, and TripAdvisor, we're so seasoned to look at reviews. We have movies based on internet movie database and restaurants based on reviews, a haircut on reviews, right? Like, everything.

Everything's review driven, right? And every website now shows reviews. So if you don't, it's very hard. If you don't have a lot, it's very hard. And especially when you start charging premium prices. Yeah. Unless you're a Louis Vuitton and Gucci, they don't have reviews because they're a Louis Vuitton or Gucci. If you notice, Lamborghini, you don't see reviews. Right.

Because they've got such a premium. But if you're anyone else and you're still in that premium range, it's so important because you've got to justify it, especially if you can't taste a bite first at a supermarket, grocery store. Exactly.

So next is I would love to talk about ad spend. But one thing that I think is so important for everyone listening is, yeah, obviously we should spend more on ads. But you guys kind of and what I try and do with people is take them through mindset shifts because that lasts forever. Right. It's like a habit forming thing. So can you talk about the mindset changes with ad spend? Yeah.

Well, before we knew you, we did ad spend, but it was a very low budget. Yeah. Okay. Considerable low. Maybe $30 a day. Because our mindset was every dollar we spend in ad needs to come back immediately in the first order. And that was just not happening. You know, especially in the food industry, it's very difficult to make money on the first order. Yeah.

So when we learned you and you told us, you know, you have to be a little bit less scared and spend more ads because that's the only way you can grow. At the end of the day, we just trusted you, you know, and did that. So we spent a lot more into ads. At some point, we spent $1,000 a day or something. $3,000 a day. From $30 a day. To $3,000 a day. So that was really a big...

for us

And it just worked. Well, now you have the customers for life. Right. Because you're still making money from that. Yes, that's exactly what happened. You know, we started with how many customers did we have when we started the whole campaign? The newsletter subscribers was about four grand. Yeah. So we had 4,000 users in our newsletter subscribers and about 10,000 customers. At the end, we had almost 25,000. Yeah. After the year, we had 25,000 in the newsletter.

That's it, right? Yes, it is. 20,000 more leads. Yeah, you buy customer data too with that. I mean, not everyone comes back, but a lot is coming back. And let's say when I look back the last year, we reduced our ad spend drastically, but still have our client base. We can nurture through our newsletters, social media, et cetera. It's kind of like you do the hard work and then you can rest a little. Now you've got a good customer base and they create,

A ripple effect too, because they hate your reviews. They prefer people they post on social media. And they gift it during the holidays. Holiday gifts are a great multiplier for us. I love that. So that was the ad spend. And what did you, you know, mindset wise, what tips would you say someone watching that's maybe similar to you, they're like, they're worried about ads or they don't see the value in spending much on them?

Well, you have to trust them and you have to look at the data at the end of the day, not just spending blindly and not look at the results and the data. But if you have the data and you see results, why not spending more? You know, if you know that you make $2 a

back from $1 spent and it works for you, why not spending $3,000, $5,000 if you know you'll make the money back? That's the whole thing. It's really, for us, the mind shift was not to be frightened and

getting away from the idea to have to make money on the first order because now what we are doing is we make the money on our second and third and so on order. So it's the lifetime value actually makes the whole thing working for us. I think that's a major thing when it comes to ad spend. I think the combination of

trusting the process with ads, learning how to do ads right, because that was a process to how to target properly the creative, etc. That was definitely a process. It still is. It's constantly changing. But this in combination with learning about lifetime value and how to tackle into that customer data and nurture them afterwards and sell on the back end, this was something we didn't know before we joined your program.

Not to that extent. We didn't know it, but we just did not... It was not... Maybe emphasize it. Sometimes you have to understand something a little more or really see someone else doing it to be like, okay, I get it now. The difference between knowing about it, but like, okay, I'm all in on this. You know, I get it. So I love that. And then, I mean, another thing along that line that I know doing well for you now is social media and influencers, right? Right.

So how did that change? It's a little bit more than a year now when we started investing into, because we saw from our numbers and the cash flow and everything, we wanted to reduce our direct ad spend because ads on Meta got really expensive. Yeah.

And so we came up with that idea of working with influencers and micro-influencers, those smaller ones that are building their audience, working on their profiles. They take collaboration in exchange for product only. So we don't have to pay them. And this way we were able to expand that.

or getting more eyeballs on the product, on the videos to their audience. And we just started sending two bars of chocolate to those. So we contacted them. Most of them say yes, and they do it. And some of them do really great content, some not so much, but they are also learning. So it's really a win-win situation for us and for them. And this is the way how we got like, we have like,

almost 400 pieces of content in a little bit more than 12 months that you got through influencers. And it's great content, right? Part of it, it's great content that you'd pay an influencer 500 to shoot, but now they're just doing it...

It's a trade, right? Yeah, it's a trade. Because they want to promote it. Right. It's a trade. And if you look at the numbers again, like Barbara said, not every content is great. But if 80% of the content is great, it's a big win for us and it works. Do you recycle that on ads? Yes, we do. So sometimes. So we don't ask them to give us the ad code for that that you need for it. Some give it to us. Yeah.

If it's really good content, then we repurpose it for ad, but we don't expect them to release them as an ad for us because it's really a collaboration, a win-win situation for everyone. If you want them for ad, they usually want you to pay them. Have you looked at TikTok shop yet or are you...

We did, but we are not good at that yet. Big struggle to get into that, but it's something we definitely, that's definitely something for 2025 to dig into that deeper and learn. But yeah, TikTok is pushing that. Because they basically, I saw it today, you posted videos and you don't link it to Prada, you know? Yeah.

You haven't linked it to a product. Well, they know, you know, the more someone posts, the more money someone's making, the more they're posting, right? Right. Yeah. Because it creates more content so they can place more ads. So it becomes this big cycle, right? Yeah. So any other tips or tricks, lessons from, you know, either the agency or the lessons you've got from us and growing to millions? Yeah.

You want to share? Yeah, I think we shared most of it already. From the agency side, what we see is really important when it comes to e-commerce is the tech behind it. You have to have a fast web store. It has to be snappy. It has to be easy to manage, easy to go through and check out, navigate. Everything needs to be easy because people are so used to the Amazon shop. It's one click.

thing. So you have to be in, you have to have something that is similar to that. So the experience needs to be almost like that. And that has a huge impact on, you know, how much people actually check out. And when we look at our

at our bounce rates, that's proof that we did the right thing. So that's on the tech side very important. It's way lower than the average in the US, right? Right. Yeah, that smooth user experience, fast, simple. I mean, again, Amazon are just kind of spearheading that, but they're changing how people want to shop. And now Apple Pay too. Like I'll leave websites if it's e-com, if I can't...

pay or like, hey, remember when you said and tested it, I want to have Apple Pay. Now we have it and I see how many people use it. It's crazy. We just implemented that because you mentioned that.

So we didn't have that before, but at some point, those are the small things that can have a big impact. Yeah, totally. And then, so he talks a lot about big wins, big successes, scaling from 800K to 2.2 million, which is amazing, growing the email list to 25,000 from four. But there's got to be some failures in there. Oh, yeah. Every entrepreneur...

goes through struggles so you know and especially when you scale it's like pushing your car to that max you know the miles per hour that's listed or kilometers an hour that's listed on the on the you know the the car screen uh anything you want to share any lessons going through it i mean we had plenty of failures obviously because i mean if you're long enough in business you have yeah feelers it's just part of the of the nature i would say but the biggest thing uh in our in our truck

chocolate business was when we got hit by a hurricane Ian. It was right after we just started our irresistible offer. Yeah. That was, we started in August actually. And it was just, you know, taking off. Taking off. And then end of September, Ian hit us hard. We lost our warehouse. We lost all of our products. We had, we had,

three weeks no power so there was no way that we could stock our warehouse back again so we basically lost three weeks of our most important season I was in high season that was really hard all of our product it was like 17,000 bars at this time yes that was like a hundred grand product

Yeah, that really hurt. And at the time we were really, for a moment, we had no idea how to survive this, you know. But we had a great landlord that he fixed the warehouse within two and a half weeks. We got our warehouse restocked pretty fast. That was because we have a really great partner back in Austria that produces or creates a product for us. So we got that back.

And even though we lost three weeks of our most important season, at the end of the year, we still had some growth, which was because we had this irresistible offer. That was for sure the biggest thing.

failure or thing that happened. It was scary because after Ian hit, after the general experience of that storm which was traumatizing to us and then okay we saw the warehouse roof failed, we had no power, the chocolate was melting away and

It was like, what are we going to do? It was so, I was out of ideas. How are we going to survive the seasons? Will we be out of business after that? Because this last month of the year in chocolate are the most important ones. And it was really in a growth phase. So this really hurt us.

But yeah, we were still lucky that we got power back in three weeks. It was awesome. And it made us stronger because now we know, okay, what we can survive, you know, and how we can survive. And we know we have ways how we can go over a situation like that. But yeah, it's... I mean, insurance covered the lost product months later, but they don't cover... It was legal a ton.

But they just cover the raw product. You look like revenue and profit through that time, which is very important. So last question, just to wrap. If people want to take, we talked about chocolate for 20 minutes. I want some chocolate now. I'm sure people listening do. Where do they find the chocolate or about the agency? So the chocolate, they find it on SodaUSA.com. Yep, SodaUSA.com. SodaUSA.com. Our Instagram is SodaChocolates. So, yeah.

Yeah, and our agency, if you want to look into e-commerce stuff, we are really experts in that.

It's at smargesy.com, S-M-A-R-G-E-S-Y.com. And yeah, we're happy to help. Great. And finally, what are some of the amazing flavors they can try? Because I know you've got a lot. Oh, butter caramel. I'm usually talking about my personal favorites. Butter caramel. Top five flavors. Brown butter toffee, a marina cherry, dark chocolate mousse.

Yeah, French white nougat, currant and chili. It's very difficult because we have 175 different flavors. All of them.

Great. Well, guys, pleasure. It's been a pleasure, you know, helping you guys, supporting you guys, seeing you grow, implement all these things. And, you know, obviously been fortunate enough to taste the chocolates, give them out at Mastermind events. And thanks for coming on today and sharing all those lessons and wisdoms. And, you know, hopefully actionable steps people can use in their own businesses. So great job, guys. The good way is go implement and keep living the Red Lab. Thank you for having us. Take care. Bye.