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When you’re entering a new company or a new market, there are lessons to be learned from the past and opportunities to grab hold of to propel yourself and your company forward. Paul Lanham entered a new company and industry all at once when he became the Chief Information and E-Commerce Officer at Charlotte’s Web, a CBD company.
On this episode of Up Next in Commerce, Paul details how he used his experience at companies such as Crocs, HCL and Brookstone to help guide him as he helped grow the Ecommerce business at Charlotte’s Web to the point where it now represents 65% of the business. Paul explains the methods he has used to generate qualified traffic, conversions and a high retention rate, and he discusses the technology he thinks is going to make a huge impact on Ecommerce in the future.
Main Takeaways:
- Always Be Testing: To achieve the best user experience and optimize sales, you need to constantly test new ideas. Whether it’s pop-ups to showcase new items, implementing a legacy program, or experimenting with video, you learn something new every time you test. Plus, sometimes the failed tests are even more valuable than the successful ones.
- It’s All About the Margins: Businesses live and die based on their gross margins. If you are not charging enough and/or pay too much to have your products made, you’re putting an unnecessary financial strain on your business that could break it.
- Riding the Ecommerce Waves: There is a ton of volatility in the Ecommerce industry. In order to achieve sustained success, companies need to be nimble and able to adapt to the changing tides. Keep overhead low, focus on your P&L and build processes that allow you to make quick shifts when needed.
For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.
Key Quotes:
“Every entry point is different for every consumer and we need to leverage all those different entry points. We can’t, for example, rely solely on organic search.”
“You always want to learn from your failures and not do them again or at least understand the context and admit them. One has to listen very carefully. I parachuted into a company that was going 1,000 miles an hour and one of the lessons I’ve learned in the past is honor the past …. It’s one of the failures I’ve learned from in my past that basically sometimes evolution is better than tearing things apart.”
“Because [CBD] is such an emerging industry, word of mouth is still very important…. We spend a good deal of time on our site through blog entries and various educational videos that we put out to educate our customers on the difference, for example, between hemp and cannabis or what is the efficacy of CBD.”
“We invested in tools that enable us to personalize that journey. So, for example, back to my comment on what is CBD, if somebody enters that as a search term and they have to click on our link, we will take them initially to the education materials and will kind of guide them through the process from the ecommerce perspective of walking them through that journey and hopefully they purchase. …
“Our traffic is more qualified than I’ve experienced in the past. When they come through the site and they’ve been educated, there’s a high degree of propensity to buy.”
“In the perfect world I’m interacting real time with the individual consumer in the context of whether we’re educating them or guiding their journey and the like and the technology is starting to catch up with that capability even at a company of our scale. That’s the trend that has been there for a little while but the promise has been there, the reality is starting to catch up.”
“What I’ve been enamored of in the past couple of years is utilizing technology to tailor the experience on whatever the device our consumer has. You know there’s somebody out there who’s still on dial-up, if that still exists. It doesn’t matter how efficient your site is or your servers are, you have to tailor the experience, strip down the page load, the content, rejigger the Java script on the fly depending on that individual’s device because as far as they’re concerned, they may have a iPhone 5 that hasn’t been updated in five years but they still would like that experience.”
Mentions:
Bio:
Paul Lanham joined as Chief Information and E-Commerce Officer for Charlotte’s Web in July 2019. Mr. Lanham is responsible for leading the e-commerce business, information technology, business analytics and digital strategy. Paul has extensive executive leadership experience both domestic and international in retail, e-commerce and technology. He has served as Chief Technology Officer for multi-billion dollar brands such as Jones New York and Crocs. Paul has also served as CEO for a software company associated with HCL Technologies – a global technology services company.
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Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce
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Transcript:
Stephanie:
Welcome back to Up Next In Commerce. This is Stephanie Postles, co-founder of Mission.org and your host. Today we have Paul Lanham on the show, the Chief Information and Ecommerce Officer at Charlotte’s Web. Paul, welcome.
Paul:
Hi, nice to be here.
Stephanie:
I’m glad to have you. Yeah, I’m really excited. I’ve used Charlotte’s Web products before. So, when I saw that you were in our queue for interviews, I was like, “Oh, this is going to be a good interview.”
Paul:
That’s good to hear you have some perspective then.
Stephanie:
To start, I was looking through your background and was really impressed by some of the companies that you’ve worked at. I’d love for you to first before talking about Charlotte’s Web, kind of go through a little bit about your history and then what brought you to Charlotte’s Web.
Paul:
Sure. As you just noted, I have a pretty diverse background mostly in the retial and CBG and technology industries. What’s really colored my career is that I’ve been given a lot of opportunities, some of which I hadn’t had a lot of experience in including Ecommerce when I started in its infancy in the mid ’90s when you had to build everything. You couldn’t really go to the corner shop and buy an Ecommerce server.
Paul:
But I basically have touched on virtually every aspect of Ecommerce over the past 20 somewhat years. I’ve been a C level executive for about 25 years and worked for a diverse group of companies, a variety of sizes. Some startups.
Paul:
I started my own tech company and now it’s Charlotte’s Web, which I have to say is very much different in terms of its make up versus the companies I’ve worked for in the past.
Stephanie:
Yes. And just for people to know the difference, it would be great if you could name drop a bit. I know people hate name dropping, but I’d love to hear what were some of the companies, the largest ones you’ve worked at? I think you can compare it to Charlotte’s Web.
Paul:
Sure. I worked for what was a startup, Crocs. I think people will recognize the infamous shoe company that is just located down the street from where I work.
Paul:
I’ve worked for Jones Apparel Group, which is a mega apparel conglomerate that own companies like Barneys New York, Jones New York, Apollo Jeans, et cetera, in the apparel industry.
Paul:
I started a tech company that eventually became a subsidiary of HCL Technologies, which is a global tech firm based in India.
Paul:
And Brookstone, which is the gadget shop, competing with Sharper Image. Again, near its infancy as well. So, a diverse group of experiences.
Stephanie:
Yeah, that’s amazing. With some of these companies you’ve worked at previously, are there a lot of lessons that you were able to bring to Charlotte’s Web or is it just such a different beast that you kind of had to just start over and had a completely new hat on?
Paul:
Well, basically if you’ve been a C level executive for a number of years you have some successes and you have some failures and hopefully you learn from the failures, and I’ve had them too.
Paul:
Implemented virtually every kind of system you can imagine. Been on the business side from an Ecommerce perspective and learned a lot of different things that I’ve been able to bring to Charlotte’s Web.
Paul:
Back to the diversity of my career, one thing I can note, I probably have been in just about every function that you can imagine from finance, to marketing, to sales, to Ecommerce, et cetera, et cetera.
Paul:
So, I think that brings somewhat of a unique perspective to a company like Charlotte’s Web, where I frankly I have a lot of empathy for my peers in other departments because I’ve done a lot of their jobs.
Stephanie:
Yeah, that is so important. I’ve worked at previous companies where someone doesn’t understand I worked in finance back in the day and people do not understand the complexity or why there are certain procedures set up and you can definitely see tension between certain groups if they’ve never worked in that team before. So, that’s key I think.
Paul:
Absolutely, and financial people can be fun. Most people don’t know that.
Stephanie:
They can be. Just like me, I’m fun. You’re fun Paul. I’d love to hear or I’d love for you to explain what is Charlotte’s Web and maybe even starting with the story behind it, behind the name.
Paul:
Sure. Charlotte’s Web is CBD company that was founded by the seven Stanley Brothers and that’s a wonderful story in it of itself in that they grew up in the Cannabis industry.
Paul:
But the company’s namesake, Charlotte Figi, who many people may remember from the Sanjay Gupta CNN Specials from years back and most recently illustrating how there was this trajectory of various peoples and things to help a little child basically survive.
Paul:
So, our namesake Charlotte really is like our guiding star or north star in the context of our mission, which is to help people through natural products that Charlotte’s Web produces.
Paul:
So, it’s a young industry, it’s a young company where we are a market leader. Obviously we are commercial, but we’re always grounded by our original mission and we still do help quite a few people to where our product is very essential like the Charlottes olive oil.
Stephanie:
Yeah. I was looking at the I am Charlotte video on your website and it definitely gave me goosebumps. When did you guys create that campaign?
Paul:
Well, it’s basically been the past year. The point is with her passing it really shook us all to our core because frankly it was probably one of the core reasons that most of us joined the company. I was fortunate to be able to meet Charlotte and her mother Paige a couple of times.
Paul:
But many people in my company, and obviously the Stanley Brothers basically grew up in this company attached to Charlotte’s story. The I am Charlotte campaign is currently just obviously a testimony and our take on how beloved she is and still is.
Stephanie:
Yeah, I love that. The CBD industry as you mentioned, it is kind of a new-ish industry. When you’re in California it seems like it’s been around forever, but when you go to other states or back to my hometown, people still kind of have they either don’t know what it is or yeah, are just very unclear about what it is. You have different preconceived notions, you can say.
Stephanie:
So, how do you all think about kind of educating the public or new buyers who come to your site for the first time?
Paul:
Certainly. Two points, actually about 15% of households have had some experience with CBD in the United States. And still because it’s such an emerging industry, word of mouth is still very important. Typically, people first get exposed to CBD by a relative or a friend or somebody mentioning it that it helped them.
Paul:
When they go to search for it, we basically are actually a leader at Charlotte’s Web because we rank very high on the first page, in the first third with what is CBD. To that point, we spend a good deal of time on our site through blog entries and various educational videos that we put out to educate our customer on the difference, for example, between hemp and cannabis or what is the efficacy of CBD and various in-depth, I guess, videos to illustrate the depth of what they could know about CBD.
Paul:
So, it very much is still an educational process as you’ve mentioned to evangelize the use of CBD.
Stephanie:
Yeah. Yeah, I completely agree. How did you all become a market leader? I know you were not first, but you definitely were some of the early leaders or even starting up in this industry. But how did you go about making sure people had your name as the household name when it came to CBD?
Paul:
Sure. They were among the first and the brand story between the Stanley Brothers and Charlotte really resonated. It was made for this industry and the mission that the Stanley Brothers inoculated into the company and we still have in terms of evangelizing the product and natural products to the world to help people, I think resonate with people.
Paul:
When you talk about, for example, our end-to-end integration from seed to shelf, our quality, et cetera, all those things kind of are confluence in terms of being perceived as a quality brand and a premium brand to a consumer.
Paul:
There are a lot of smart business decisions along the way, frankly, in terms of becoming that market leader.
Stephanie:
What kind of smart business decisions? Now you’ve piqued my interest.
Paul:
Okay. For example, going really strong in Ecommerce initially in that the nature of the industry is that there’s been a slower adoption in the major retailers because hemp frankly, from a federal perspective, wasn’t quite legal until a couple of years ago based on the format.
Paul:
There are some reticence in terms of conservative retailers to carry the product. So, they were very smart in not necessarily going the mom-and-pop route even though we have a big natural store population on the retail side.
Paul:
But going very strong with Ecommerce and hiring the right people right off the bat a couple few years ago to basically push the commercial side of this. Ecommerce right now represents about 65% of our business as was in the first quarter. That’s somewhat of a higher percentage than many of our competitors.
Stephanie:
What do you think is attributed to that higher percentage?
Paul:
Being first out of the gate. Being very professional about it. But the primary drivers, they’re a couple, back to the brand story that really resonated, was beautifully presented on the site and for media.
Paul:
Secondarily, the quality that we bring to the table that we try to communicate to other consumers. From that seed to shelf continuum, we test the product 20 times, we track each individual bottle or tincture or the like back to a specific lot and seeds. We could document virtually anything anyone needs to know about that particular product.
Paul:
So, particularly in this industry where you have an influx of competitors, some of which frankly are not quite as sophisticated in the context of testing and the branding. You can really stand out by basically taking care of those issues.
Stephanie:
Yeah. Yeah, I completely agree. That is how I found you guys in the early days was because quality to me is the biggest factor when it comes to CBD.
Paul:
Absolutely.
Stephanie:
And it’s also something that a lot of people worried about early on because you do hear horror stories and it felt good going to a company knowing yeah, they’ve already got everything figured out. They’ve got the dosing down to its seed. They’ve got it’s non-GMO and yeah, I think that’s so important with an industry like this.
Paul:
Absolutely.
Stephanie:
The one thing I was thinking about was consumer journeys. Everyone is coming to your website maybe at a different place like we were mentioning before. Some people are brand new or they’ve maybe never even heard of it, where education is key.
Stephanie:
Some people have heard about it. You’ve got the people who maybe are hiding their browsers when they’re looking for it or the people like me it’s like, “Yeah, this is an obvious thing that can help you.”
Paul:
Sure, sure.
Stephanie:
How do you personalize either your Ecommerce experience or your marketing efforts to kind of go after all those people and meet them where they are?
Paul:
Well that’s a good question because when I mentioned sophisticated we invested in tools that enable us to personalize that journey. So, for example, back to my comment on what is CBD.
Paul:
If somebody enters that as a search term and they have to click on our link, we will take them initially to the education materials and will kind of guide them through the process from the Ecommerce perspective of walking them through that journey and hopefully they purchase.
Paul:
We do that in the context of segmenting our email channel. We have a variety of channels and we handle each one differently. Our affiliate channel, for example, is very strong in terms of the partners we deal with like a Healthline.com, which yet again is another educational component in that we’re very strong with them.
Paul:
So, depending on the channel, depending on the entry point of our consumer, we will treat them differently in the context of where we land them on the website, what we offer to them in the context of their journey through the website, and what promotional activity we engage with them.
Stephanie:
Got it. Yeah that make sense. When it comes to affiliate programs, how did you all think about setting that up and is that still a big part of your strategy or did you kind of pull back on that once you started becoming more of a household name?
Paul:
It’s still and will be a very big part of our strategy in that penetration of CBD from a search to perspective is still relatively low compared to what I’ve experienced in the past so that we’re still in an emerging phase where we need to use and leverage every channel we can.
Paul:
So, as strong as our Ecommerce business is, which happens to be frankly Ecommerce alone at Charlotte’s Web is a market leader in revenue compared to every other CBD company, just alone. It kind of tells you the scale of our business.
Paul:
But what I’m getting at, the Healthline.com affiliate is very important to us in that it is the number one rated medical advice site, I believe, if I look at the statistics recently.
Paul:
Every entry point is different for every consumer and we need to leverage all those different entry points. We can’t, for example, rely solely on organic search as an example, not that we would. But we basically go through every venue.
Stephanie:
Got it. What does it look like setting up a partnership like that? Because, I think that is really important kind of finding someone who has a good reputation that a lot of people trust. But what did that look like setting that partnership up and making it so both sides feel like it’s a win-win?
Paul:
Well to your point, it’s important to vet the partner because obviously you don’t want to be presented on a site that doesn’t quite meet your value set or your brand image. So, we’re fairly choosy in terms of the affiliate partners that we work with.
Paul:
Obviously, in some cases it’s a longer negotiation in that obviously we want to do it on advantageous terms in terms of the share basically. So, we don’t cast a wide swath in the context of the affiliate partners we deal with. We’re very selective.
Stephanie:
Got it. So, the one thing that I was wondering earlier when you were mentioning failures and you of course have a huge backlog of experience at other companies, what did your first 90 days look like coming in to Charlotte’s Web and what big things did you change from the start based on maybe past failures or successes that you’ve had at prior companies?
Paul:
Well, like entries in the most companies it’s a rush. My story, this is pre-COVID times obviously, I talked on the phone with a board member and my boss, the CEO, on a Friday. I flew over the weekend, got there on Monday. I took the job sight unseen after a phone call.
Stephanie:
Wow.
Paul:
I was so enamored of it. I’ve never done that before. And Danny has never hired anybody like that before, it just went so well. I showed up on Monday and I didn’t leave for 90 days, much to the consonation of my significant other in Boston. So, we worked it out.
Paul:
But it was just a rush of understanding the industry in-depth, doing triage in the context it was still a start mentality, triage in the context of building a business intelligence stack, revamping the Ecommerce organization, planning the next iterations and improvements, setting up for the holiday season for example.
Paul:
When I joined, literally the week after I joined we kicked off a new platform upgrade that we only had a couple of months to do prior to holidays. So, it was a lot of long days.
Stephanie:
Was that something that you feel like you could step into because I’m sure you’ve done many re-platforming experiences before?
Paul:
Yeah. There is some muscle memory and back to my point, you always want to learn from your failures and not do them again or at least understand the context and admit them. Basically one of those issues is that one has to listen very carefully.
Paul:
I parachuted into a company that was going 1,000 miles an hour and one of the lessons I’ve learned in the past is honor the past because there was a great deal of work and a lot of great work done that I took the attitude of evolving and adding to as opposed to turning the part which many C level executives take that as their mandate.
Paul:
I’ve never really done that. It’s one of the failures I’ve learned from in my past that basically sometimes evolution is better than tearing things apart.
Stephanie:
Yeah. Yeah, I love that and I think the quote too.
Paul:
Yes.
Stephanie:
So, I’m sure another thing that you kind of the change of thinking on would be how you track the success of a business or the Ecommerce site. What kind of metrics, did you maybe look at prior companies where you were like this is our set of metrics that always made sense versus what do you look at now at Charlotte’s Web?
Paul:
Well, there are quite a few. You know the Ecommerce business, there are probably 20 things that you look on a daily basis. That’s my routine in the morning, I get up and I look at basically all the metrics.
Paul:
But what’s important here, more so than perhaps, it’s always in the top three conversion for example, on unbalanced traffic. It’s significant here because you’re engagement with a new customer and maybe fleeting because of the nature of the industry, the curiosity about CBD, people not knowing about it.
Paul:
I actually had to look at that statistic or those statistics several times because they didn’t believe them, they were so high. That’s a testament to the people and the staff that were here in that whether it’s educating the consumer, or the customer experience on the site, or customer care on the backend, we have a high percentage of sales that convert.
Paul:
So, that probably is a much more important stat that I’ve paid attention to in the past. It’s always been in the top three or four.
Paul:
Retention of consumers. Again, in this sort of industry because of the fleeting interaction with your customers, we have a very strong subscription program that is very important to us, which are typically customers who deem the product to be essential to their wellbeing.
Paul:
So, we’ve put a good deal of emphasis on that as well as retaining customers, and again, without divulging the statistics, it’s much higher than I’ve experienced in my past 20 plus years of experience in Ecommerce.
Stephanie:
What do you think is making it so high? How are you all retaining customers so well or encouraging people to subscribe?
Paul:
Well, it’s high because I guess in a way our traffic is more qualified, then again I’ve experience in the past. When they come through the site and they’ve been educated, there’s a slightly high degree of propensity to buy. So, that’s a factor.
Paul:
Plus some of our tools really facilitate the conversion in that. Not that we’re pushy but we don’t let go in the context of okay, this isn’t right for you, maybe this or how about this promotion or have you rethought this through the customer journey in the site?
Stephanie:
Yeah.
Paul:
Basically, there’s a pre-decisive to buy basically once they get to our site.
Stephanie:
Is there any initiatives that you’ve implemented when it comes to, like you said, it’s nice you don’t let go and you make sure to make to keep reminding them or showing them new products or new ideas.
Stephanie:
Is there anything that you’ve implemented recently around those kind of initiatives that have increased conversions or increased subscription rates or anything, or anything that you’ve done where you’re like that was a big flop, don’t try that?
Paul:
Well yeah. Again, getting much more sophisticated, I don’t think anybody else has implemented the suite of what I call campaign tools and analytical tools. Typically, people use the standard GA or Google tools and we’ve gone past that and utilizing tools that I’ve used in much bigger companies without naming the company.
Paul:
So, we can have a high degree of personalization in terms of how we treat our customers as they kind of navigate through our site. A much higher capability in terms of test and react and basically inoculating those scenarios and situations into our campaigns eventually down to the individual level.
Paul:
So, we’re still learning some of those. We’ve implemented those over the past three or four months. The company is still, my staff is still learning some of the aspects of those tools.
Paul:
On top of that from an analytic standpoint, which is a little unusual in the industry, we dived in with both feet from an artificial intelligence perspective because I joke with my staff and they read too rapidly that my experience doesn’t always mean anything. I think I know everything about my customer and I’m confounded constantly in terms of why I was wrong on that.
Paul:
It comes down to the data and what artificial intelligence does for example, is that it makes those deep correlations that none of us would have thought of, I would have never thought of with my 20 plus years of experience of how our customers actually interact with our site or what are they thinking in the context of their purchase strength.
Paul:
So, when you put all those things together from a capability perspective, I love it in terms of being data driven, in terms of understanding our consumer at a deeper and deeper level and being able to provide the best experience and the best service that we can on an ongoing basis.
Stephanie:
Got it. That makes sense. When you’re implementing AI, first can I ask what platform are you using for that and what kind of surprises have you found when you implemented AI? What were the consumers doing that you would never have guessed before?
Paul:
Well it’s a third party app. It’s a bunch of data scientists who basically provide the service for us. They’re conduit for the massive amount of data that we have. To your question of surprises or those correlations or what people have affinities for in terms of say, an add-on purchase that we would never think of, what prompts them to basically make that leap to make the purchase in the context of their journey through the site. Some of which are counterintuitive to some of our experience particularly for certain segment of our consumer base.
Paul:
It’s just some of those interesting nuggets of information. The hard part of it is, there’s so many correlations that we have to rank them and we basically test each correlation over a period of time to vet out the action.
Paul:
Our challenge at this point is basically getting into a much more test and react cycle on these correlations.
Stephanie:
That’s really interesting.
Paul:
Yes.
Stephanie:
So, if you were to implement AI all over again or you had someone who does not have that on their site right now, what would you do maybe differently or if you were like we could go back and maybe I would change the way we did this or think about it differently when implementing it, what are some advice around that?
Paul:
Well what slowed us down was the notion of producing what I call hypothesis based on our prior knowledge. That tends to put you into silos of information and doesn’t quite give you the breadth of correlations that AI can do for you.
Paul:
So again, it was all of my advice that hey, I think I really know this aspect of consumer behavior. I’m really interested in terms of their conversion activity when they do X, when they do Y.
Paul:
I wouldn’t be so structured in those hypothesis going into it and probably a little more open minded in the context of looking at the correlations in a much different broader way.
Stephanie:
I love that. That’s such a good reminder about the kind of biases you bring when looking at data or your consumers and why all that should be scraped from the beginning and just let the technology work for you?
Paul:
Absolutely, absolutely.
Stephanie:
In your industry I’m sure you probably get a lot of questions around this. But I’m thinking about all the regulations you have to deal with especially on a state level and when it comes to having Ecommerce be such a large part of your business, what does that look like behind the scenes when it comes to shipping or selling in certain states?
Paul:
Well, it’s mostly an impediment from a retailer, particularly a major retailer perspective because to your point, there’s a hodgepodge of regulation in the state. Even though hemp was 0.3%, THC less than 3% as federally allowed, depending on the nuisances of what is in California or Florida, et cetera, retailers may be averse to getting into ingestibles as opposed to topicals.
Paul:
So, back to our point, one of the reasons why we’re industry leaders we’ve invested heavily in internal, external lobbyists that can guide different parties and factions, whether it be congress at the federal level or legislations at the state level or associations to evangelize the notion of CBD.
Paul:
One thing that people miss the point on, we welcome more defined regulation from the FDA because we feel that we’re heads and shoulders above most of our competitors in the context of how we test, how safe our product is, how we document it and the like.
Paul:
So, it’s an ongoing journey that hopefully more clarity will emerge at both the state and federal level whether it’s with the FDA or with various state legislatures to make the retail sales of CBD more palatable. We do ship to all states in the Ecommerce perspective.
Stephanie:
Okay. Yeah, I like that idea around encouraging the FDA to look into it and implement regulations because you’re like my product is so good, we should have the other products regulated and be held to a high standard as well because that is what can maybe hurt the industry as a whole, is having people making subpar products that aren’t as high quality as Charlotte’s Web.
Paul:
Yes. It’s kind of adding to that, major business publications have basically stated and make the articles that CBD is here to stay. It’s a multi-billion dollar business growing at a rapid rate and it’s frankly grown so fast and it’s a new industry that regulations haven’t quite caught up with it.
Stephanie:
Yeah. I was reading a bit about demand surges especially during the pandemic right now. I think maybe it was your CEO who was mentioning like, oh we had a surge in demand for two weeks and then people kind of pulled back for a little bit.
Stephanie:
I was wondering how you guys are keeping up your inventory levels, how you manage that and then if you’re changing anything going forward after seeing these surges of hopefully consumers that are going to stick around going forward?
Paul:
We’ve been really gratified and continuing to serve our customer because the majority of the customers consider our product to be essential for their wellbeing whether it’s the type of tincture they use or the ointment or the like. So, it’s been relatively stable for us.
Stephanie:
Okay.
Paul:
Now from an notary perspective, as a growing company our processes have become more sophisticated and over the past year we’ve implemented an NSLOP process or production planning process that I’m more familiar with in my CBG background to really dial into marrying strategic plans to budgets, to demand forecast and skew level and doing a relatively sophisticated job of planning product demand.
Paul:
Now the flip side of that, this industry is volatile in the context of demand in general because retailers, some are still adverse to taking the product, so it’s hard to predict demand in that context.
Paul:
So, we place a little more emphasis on safety stock and agility in the context of the co-manufacturers we deal with and the like.
Stephanie:
Got it. What are some of the best practices you set up when it comes to setting up that forecasting process because I know you’ve had a lot, like you mentioned, a lot experience with that. What did you bring to Charlotte’s Web that maybe they weren’t doing before?
Paul:
Well, they had started it but I amplified from an Ecommerce perspective, a rigorous skew demand process that is three dimensional and that it adds up from top to bottom and extremely rigorous analytical process of continually revising those forecasts taking into account promotional cadence, taking into account day-to-day iterations of different campaigns.
Paul:
So, it’s a fairly in-depth forecasting process in Ecommerce so that our accuracy is much higher. It’s in the 90 percentile by skew in terms of our monthly demand, for example.
Paul:
One of the things I’ve learned in my past is that sometimes you have to take a leap of faith on a particular product because you don’t know how high you can go. On the other hand, that’s what safety stock is for.
Stephanie:
Got it. What does that look like when it comes to thinking of new products? How do you influence your decision behind that, like you were mentioning, behind the sales channels and the marketing channels that help you influence your ideas or thoughts behind it. What does that look like when it comes to new products?
Paul:
We do have outside data and with a caveat that it’s such a rapidly growing industry that tends to change overtime. But I feel is obviously one of the standard firms we use in the context of a longer term view, in terms of product categories and growth and certain segments and the like and we use that as a baseline.
Paul:
Obviously we use our trend and my counterpart on the retail side and myself where basically experience marketers and sales people and that we have our own opinions in terms of how we correlate our thoughts on category growth versus what we’re seeing in external data, for example, like Brightview.
Paul:
So, we listen very closely to our consumer in terms of what categories we’re pushing.
Stephanie:
I was just going to say I’m sure you guys get a lot of customer feedback of what people want or what they’re looking for.
Paul:
Yes we do.
Stephanie:
How do you grab all that and put it in a meaningful way because you probably know best. So, a lot of times consumers might ask for something and then not actually buy it or not really want it.
Paul:
This is true. They certainly vote with their dollars. But on the other hand, we have a pretty good customer care department that is in my peer bid where I’ve managed those sorts of departments in the past but this is in an interesting one, the group of individuals that the empathy, because of the nature of the product and the stories they hear and the people they try to help, the empathy they exhibit in terms of comments from customer is just outstanding.
Paul:
So, it’s not only commercial, but to the extent that it’s practical based on the information they have, they are advisors to the customers that call in and we have a high volume of calls that come in not necessarily about order standard things, but really what should I do? What about this product?
Paul:
The other aspect is we have a fairly rich library of customer reviews and the technology we use enables us to slice and dice some of the categories of the customer reviews and try to get to a gist of what’s working versus not, whether it’s from a product efficacy perspective or perhaps a defect of some sort.
Paul:
The dropper may not work exactly the way we wanted to and the like. So, we have multiple sources of information of customer contact.
Stephanie:
I think that’s so key to be able to call in and actually talk to someone. That’s the perfect way to develop trust is by having someone that you can actually get on a phone with and be like, “Okay, I don’t know what to do now. Tell me exactly what I should be doing.” Or same with reviews, being able to see someone who sounds like me reviewing the product just seems like a great way to develop trust all around.
Paul:
Absolutely. From a hiring perspective, I have lunch, a virtual lunch nowadays with every associate in my group at some point. Today I just, prior to this meeting, I had lunch with three of our associates just to kind of get a feeling of that.
Paul:
When it comes to our customer care associates, I’ve never met such a group of people that are truly empathetic to where they hear a story and they’re crying on the phone with the consumer. They’re doing everything. They have a wide latitude of actions they can take to help our customers more so than I’d had in the past in much larger companies.
Paul:
But they really have the right mindset, I think, as opposed to working in a call center.
Stephanie:
Yeah. That’s so key and so important.
Paul:
Absolutely. Absolutely.
Stephanie:
So to shift a little bit into more of a marketing mindset, I wanted to hear a bit about how you guys are investing in different digital channels. What’s working and what’s not?
Paul:
Sure. Just the overview is that you may have seen our Trust The Earth campaign, which I loved, we started last fall that kind of instills what our brand messaging is. Basically, a lot of our marketing efforts go to that because again we’re an emerging industry, we’re maintaining our market lead, we want to convey a certain image, just a random stat based on our efforts here today.
Paul:
We have over 400 billion impressions from the various things we’ve done versus, I think our closest competitor from the stats that I’ve seen were about two billion and it dropped rapidly. So, marketing our digital efforts from a broad perspective are very effective and that shows in the context of where we are in organic search or educating the consumer, long ways to go.
Paul:
From a digital perspective obviously we’re active in every social media component and we’re very assertive in terms of educating our consumer through that channel, conveying our brand message.
Paul:
The industry is in a place right now, there are some restrictions in terms of how aggressive that you can market CBD on social media like on Facebook, for example, or Twitter. But that’s not a real problem for me right now because for me we want to activate understanding and education and our brand story at this stage of our growth in the social media channels.
Paul:
So, a lot of our digital, aside from our paid media, which we’re very good at I believe, a lot of our digital is focused on building our brand.
Stephanie:
How are you thinking about expanding into other markets? I think I saw that you were looking at going into a few other countries. How are you guys exploring that right now?
Paul:
Well, we’re basically putting our markers out there. We have a staff of people who are very experienced internationally. I have a good deal of international experience as well from an Ecommerce perspective in retial.
Paul:
But one of the constraints still is the regulatory environment in that we won’t sell in any country that obviously it’s not allowed. There aren’t too many countries that actually allow it. So, we’re basically putting the building blocks in place if in case that would be our strategy to understand what the international market would mean to us.
Paul:
But it’s still evolving because it’s basically not allowed from a regulatory standpoint in quite a few countries.
Stephanie:
Got it. So now that we’re kind of predicting our future a little bit, I’m wondering what kind of Ecommerce trends are you excited about or preparing for right now?
Paul:
Well, in general, like I have for a number of years it’s the technology keeping up with my visions of personalization. In the perfect world I’m interacting real time with the individual consumer in the context of whether we’re educating them or guiding their journey and the like and the technology is starting to catch up with that capability even at a company of our scale.
Paul:
So, that’s the trend that has been there for a little while but the promise has been there, but the reality is starting to catch up. The other one I mentioned is using deep technology to a point within certain boundaries to understand our customers behavior and needs and wants and applying, point number one, the personalization with that.
Stephanie:
Yeah. That makes sense. Is there any new tech that you’re experimenting with right now that you guys are loving?
Paul:
Well, I’ve experimented with in the past in terms of client side speed of devices. Every Ecommerce and you know all the tropes about how conversion is impacted by site speed and page loading and all those different things.
Paul:
But what I’ve been enamored of in the past couple of years is utilizing technology to tailor the experience on whatever the device our consumer has. You know there’s somebody out there who’s still on dial-up, if that still exists.
Stephanie:
You caught me Paul.
Paul:
With a new browser, right. It doesn’t matter how efficient your site is or your servers are like, you have to tailor the experience, strip down the page load, the content, rejigger the Java script on the fly depending on that individual’s device because as far as they’re concerned, they may have a iPhone 5 that hasn’t been updated in five years but they still like that experience.
Stephanie:
Yeah. I completely agree. That’s really important because I think a lot of people assume that users are always on a newest and the latest and greatest. The one thing, yeah, I had, let’s see, we’re doing a study on I think Google maps users in India and the majority of them were on such outdated versions that they were never seeing updated streets or an update at all in maybe a year or two.
Stephanie:
I think it’s just a good reminder that a lot of people are on older versions of things, not just in other countries but here too. Like you said, some people still use dial-up. Sowe have a quick lightning round coming up. But before that, I wanted to ask you one last question because I love your excitement towards the company and your energy behind it and I wanted to hear what is the best day in the office look like for you?
Paul:
The best day in the office, let me think about that for a moment.
Stephanie:
Yeah.
Paul:
As I mentioned before I’m usually willing to go every day. It’s when I’m in the thick of it, I’m a great delegator I believe, and I think the people who work with and for me would say so.
Paul:
But I’m most happy when I’m in the thick of it, not being Mr. Executive and my people interacting with, like a peer to some degree, in terms of coming up with ideas, debating certain concepts, making things happens.
Paul:
It’s still small enough company where many people I’ll be a jack of all trades and that’s where I’ve shined in my past of, okay, rolling the sleeves up and figuring it out and having to learn things.
Paul:
Many of my jobs have reflected that. So, that’s when I’m happiest, when I’m learning something new. I think I’ve been told I’m really, really curious to a fault. I ask too many questions sometimes.
Stephanie:
I think that’s a good thing.
Paul:
Yeah, I guess so. But that’s what jazzes me, being in the thick of things, making things happen. Now having said that, as a C level executive you have certain programs and responsibilities to create a conducive environment for your people to work in to make them feel trusted, to stretch them to the extent of their capabilities giving them a vision.
Paul:
On the other hand, I’ve always been a believer of an executive being able to walk the talk having done something. Being able to do it, without actually doing it. That lends a certain amount of credibility in your interaction with your staff. So, I think that’s very important. Back to your point, that’s what makes me happy is just being in the thick of it.
Stephanie:
Yeah. Yeah, I completely agree. I like that idea and I heard a ratio or it was a metric that an executive used called the say do ratio, and it was how much do you do what you’re going to say you do, and that’s how he gained the trust with a new company he was joining, was he actually tracked it.
Paul:
Well in a small company I think my first interaction with an associate at CW is riding up the elevator that Monday, they had heard of me, and they asked my name and they heard that I was a tech guy. I was really the Ecommerce business guy and tech guy and they asked me about an email problem they were having.
Stephanie:
A personal or a company one?
Paul:
A company one, yeah.
Stephanie:
Okay.
Paul:
“I can’t quite get this to do this.” It was a sales executive or a sales manager that we had. She asked me a question not knowing exactly what I did so I spent a half hour tracking it down and getting back to her.
Paul:
Later when she learned, you’re in charge of Ecommerce and tech and all that stuff. To me, in a small company like ours, you have to be personal, you have to be willing to help anybody with anything and follow up on it and get it done as opposed to always delegating and there’s a balance obviously in terms of the work balance.
Paul:
But you have to show that direct interest in everybody’s issue in what they’re doing.
Stephanie:
Yeah, I love that. That is such a good mindset to be in, like you said. Especially coming from a larger company where employees might be like, “Oh this guy is going to just delegate everything,” like showing them you’re willing to get your hands dirty and help them with their needs and stuff. It’s also crucial.
Paul:
Yes.
Stephanie:
All right. Next we have the lightning round brought to you by our friends at Salesforce Commerce Cloud. This is where I’m going to ask you a question and you have a minute or less to answer.
Paul:
Okay, lightning round it is.
Stephanie:
Are you ready?
Paul:
I’m ready.
Stephanie:
Roll up your sleeves, get ready. All right.
Paul:
They’re already rolled up.
Stephanie:
First, I’ll start with an easy one.
Paul:
Yes.
Stephanie:
What’s up next on your Netflix or Hulu queue? What are you watching these days?
Paul:
On my Netflix queue let’s see, geez I don’t watch a lot of TV so you’re going to stop me. I have 30 seconds left. Mostly about historical dramas. I’ve always wanted to watch The Crown, which everybody has watched. So, that’s probably next on my queue.
Stephanie:
Cool. I haven’t watched that yet. You’ll have to let me know how it is.
Paul:
There you go.
Stephanie:
All right. What’s up next on your travel destinations when you can travel again?
Paul:
Wow. When I can travel again? I’d like to go back to Tokyo. I’ve traveled so much in my career personally. One point I spent about 50% of my time overseas.
Stephanie:
Oh my gosh.
Paul:
But Tokyo because I was born in Tokyo.
Stephanie:
Cool.
Paul:
And an American descent. But when I traveled I was always able to get there and see my cousins three or four times a year. But it’s been a while. That would be my first place to basically get back to my roots.
Stephanie:
That is a good one. I love Japan.
Paul:
Yeah.
Stephanie:
What app or piece of tech are you most enjoying right now?
Paul:
I’m most enjoying, this is an odd app, is a password saver. I won’t say the name of it, but I’ve been searching for the perfect one because I’m all about convenience and security and all those things at the same time. So, it’s an odd choice but I found the perfect passwords saver.
Stephanie:
Yeah. That is actually a very good piece of tech. We recently implemented that at the company not too long ago and I was like, “Wow, this saves a lot of time. Who knew?”
Paul:
Absolutely. Get rid of the sticky notes.
Stephanie:
Yeah. All right. If you were to create a podcast, what would it be about and who would your first guest be?
Paul:
My first guest I’m thinking big.
Stephanie:
Go for it.
Paul:
Because I’m thinking really, really big because I’m enamored of her career. I was actually at her first rally, Elizabeth Warren. It tells you a little bit about politics and no offense.
Stephanie:
That’s okay.
Paul:
But I was still in Boston, I went to her first rally and I was just enamored, I’ve always been enamored of her and not withstanding what happens in the near future. I would just be fascinated to talk to her about her career and how she made that mid career shift and the [inaudible] plan.
Stephanie:
That’s cool. So, it would be politics focused or more human centric on what’s important when it comes to you?
Paul:
More human centric with a tinge of politics because I am interested in politics. Elizabeth Warren would be it.
Stephanie:
We could get her on the show. I would make that happen for you.
Paul:
You could make that happen?
Stephanie:
Yeah.
Paul:
That would be so cool.
Stephanie:
I could do it. Elizabeth call us. We’re ready for you.
Paul:
Absolutely. I remember I’ve actually seen her a few times, in the crowd obviously. The last time was at a protest at the Boston Common and she was quite compelling in her speech.
Stephanie:
Well that’s great. I will have to see if I can find that online.
Paul:
Yeah.
Stephanie:
The last hard one which you’ve kind of already answered this, but I’ll throw it anyways at your way. What one thing will have the biggest impact on Ecommerce in the next year?
Paul:
I think the biggest impact is the turmoil going around the big guys whether it’s Facebook, Google, to some degree Amazon. What is the regulatory landscape, what is the antitrust landscape, how will they evolve, how monolithic will it be?
Paul:
I think I actually think about that quite often in terms of how do we enact with them, do businesses, make the leap into Amazon as a third party do, how do the algorithms evolve from a group perspective. How does privacy work?
Paul:
That really weighs on me in the context of thinking through how do those outside forces that are so monolithic in the tech industry impact Ecommerce.
Stephanie:
Well that’s a big juicy one. We’ll have to have a whole nother episode just to talk about your thoughts on that.
Paul:
Right, right.
Stephanie:
Well Paul it’s been such a pleasure having you on this show. Like I said, I use Charlotte’s Web. I’ve been around it for a while and I really appreciate you coming on and taking the time. Where can people find out more about you and Charlotte’s Web?
Paul:
Well obviously our website, Charlotte’sWeb.com and I have a pretty fulsome linked in profile that shows you how haphazard my career has been but it’s been a fun ride.
Stephanie:
Yeah. That’s where I found out all about you. Well thanks so much for coming on. We’ll have to have you back for round two in the future. It’s been great.
Paul:
Absolutely enjoyed it. Thank you very much.
