Bringing Together Content And Commerce In Men’s Fashion: JackThreads Founder Jason Ross (Part 5)

Sramana: How long did it take recoup your investment and become cash flow positive?

Jason Ross: It took a couple of months once we received publicity from the blogs.

Sramana: What threshold was that?

Jason Ross: It was a low five-figure revenue from a monthly point of view.

Sramana: How many months into the business was it before you started doing paid key word marketing?

Jason Ross: That was 12 months into the business.

Sramana: Did you select keywords around the specific brands?

Jason Ross: The keywords were either brand or lifestyle specific. Some were product specific. We cast a wide net and then cut out the campaigns that were not working as quickly as possible. Our goal was to have campaigns fail fast.

Sramana: Keywords have been a tremendously effective way of marketing for many e-commerce companies. Managing their keyword strategies is key to success. Can you elaborate on your strategy?

Jason Ross: When I think about marketing an e-commerce company online, I think the more keywords you market the more successful you will be. We were selling a number of name-brand products. We found people who were looking for those brands and the type of lifestyle. We knew the products we were selling already had a built in audience. We knew that those people were already on the Internet looking for those products.

Sramana: Keyword campaigns do well if you have that type of audience; otherwise, they do not do that well.

Jason Ross: Exactly. That is how we were successful in the beginning.

Sramana: When you started your keyword advertising in 2008, did you find that there was already a lot of competition for those keywords?

Jason Ross: Absolutely. We found that when a user found our site and recognized the value proposition they became extremely engaged. It was viral. It is a viral business model. We were able to leverage the built-in followings that the brands we carried already had. Once consumers visited our site, we were able to keep them engaged. We also enticed those users to spread the message for us.

Sramana: Essentially, you are saying that it was worth the money it took to acquire your customers because they were highly engaged and generated new customers. Is that correct?

Jason Ross: Exactly.

Sramana: How much were you paying to acquire those customers?

Jason Ross: It was a couple of dollars per sign-up, not necessarily for someone who makes a purchase.

Sramana: If you were paying a couple of dollars per sign-up, what kinds of conversion rates were you experiencing as you built the business?

Jason Ross: We would probably spend 50 cents per click, and every six clicks resulted in a sign-up. The number of sign-ups that actually turn into buyers was a low percentage, close to 10%.

Sramana: Of the 10% who converted into active buyers, how much would an average paying customer spend on your site over the course of a year?

Jason Ross: The average transaction size is close to $100. The users that do buy are very engaged.

Sramana: I have found that men and women have very different shopping dynamics. Women spend a lot of money on clothes; men don’t.

Jason Ross: That is true. I have found, however, that when guys find a brand that they trust then they will focus on that particular brand and spend accordingly. Men don’t want to spend time shopping. That is why they like JackThreads, because we do the shopping for them.

This segment is part 5 in the series : Bringing Together Content And Commerce In Men’s Fashion: JackThreads Founder Jason Ross
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