Intelligems is a suite of tools that empowers brands to improve their ecommerce economics. They do this by making it easy to test your prices, discounts, shipping rates, and more to maximize your margins.
In a very short time, they have run over 1,000 A/B tests across over $600 million worth of transactions and helped merchants generate over $30 million dollars of extra profit.
Mark: Drew, how are you?
Drew: Hey, Mark. I'm good. How are you doing?
Mark: I'm doing well. Thanks so much for joining. It's good to see you. I'm excited to chat a little bit more.
Drew: Yeah. Good to see you too. I'm excited to be here.
Mark: So thank you everyone, dozens, hundreds of you for, for tuning in. For those who don't know me, my name is Mark Shesser.
I'm the founder of Coldsmoke Creative. We're a Shopify plus development agency. and I'm pleased to welcome you to another edition of the Coldsmoke founder series, where we talk to founders of brands, platforms, services, et cetera, in the e commerce space. I'm excited to be joined by Drew Marconi is the co founder of Intelligems which is a suite of tools that empowers you to improve your e commerce economics.
So if you're a brand or a merchant, you can use Intelligems. And they make this really easy to do. They allow you to test your prices, your discounts, your shipping rates and more to maximize your margins and in, in a pretty short period of time. They've run over a thousand ab tests across over $600 million worth of transactions and have helped merchants generate over $30 million of extra profit.
Just pretty, a pretty good amount to just find in the couch cushion there. So really excited to learn a little bit more about the founding of Intelligems how you guys have done it, what your plans are for future growth. So, but before we jump in too much to that, I was wondering if you could just share a little bit about your background and your experience prior to founding IntelliGems and how you got there.
Drew: Yeah, well, thanks for that intro. That was you know, too kind but I'll take it.
So yeah, I'm Drew CEO and one of the co founders at Intelligems my background And I have a tendency to be winded, so just give me the, the this if we gotta, we'll start playing. Yeah, just get it going. I, I mean going back, back, majored in education policy and economics in college.
Went into consulting and used neither of those started in San Francisco at McGee, spent four years there, you know, doing the whole random walk, working for tech companies on sales and go to market problems, working for non tech companies on tech and product problems by chance ended up in the ride sharing industry after that.
Had a couple former coworkers go to a company called Via Transportation based in New York. We kind of were doing pooled rides before. We were the first to do those. And so I joined there after Series B. We were about 200 people. And was on the growth team. So trying to figure out how to get people to take more rides with us instead of with Uber or Lyft.
That pretty quickly transitioned into a pricing role. VIA had grown with flat 5 prices and we needed to start being more dynamic a bit more profitable. So that side job of, hey, let's figure out how we should do pricing within a year morphed into my main job. And that's where I got paired up with this engineer named Adam, who's now my co founder at Intelligems.
So we, we spent four years building that out a team of 20 people, and then. Everything from like basic meter pricing to surge pricing and how do we build that algorithm with, I think by the end we're ingesting like 100, 000 data points a minute to decide what prices should be in New York. We built our subscription engine, all of our discounts and like competitive Intelligems tools, LTV modeling, so kind of all things.
Dollars and cents related to either, you know, boosting customer growth, like where can we give discounts with the most impact? And boosting profitability, like where can we go raise prices and shore up margins with the least impact on our top line and on our customer growth? So my team was on the upside.
We would go use the tools that were built for us and have to go figure out how to hit our targets. And, yeah, fast forward to 2020 Adam was, he'd been living in Israel, was moving back to the States, was going to start something new. And we were like, Hey, we, we worked together so well, we should keep this going and pricing and profitability was like a pretty, pretty easy place to start.
We had just seen how powerful dynamic pricing was in ride sharing. And we were like, wow, this basically just generates. Profit in the couch cushions for companies, where else can we take it? And so after like a two week long stint as a dynamic pricing video game company, we like stumbled backwards into doing it for e commerce.
Mark: Now the video game company, is that what you applied to Techstars with?
Drew: Yeah. So we did Techstars Boulder in 2021 and we were accepted on a pitch of we're going to help mobile game companies. Dynamically price their currency products got accepted two weeks later. We started working full time and realized, Oh, no one wants to talk to us about this.
There's like pulling teeth with potential customers. And I remember our first week of tech stars was like the next month. And I told the director, like, I was super nervous to say that we changed ideas. And he was like, Oh yeah, that's fine. Like we figured you guys wouldn't. Stick with that, but we like the whole pricing angle.
So you guys should just go figure out what that means. And yeah, that was our first month of Techstars kind of doing research on different ideas, different potential industries. Until we spoke to some friends running stores on Shopify and that's kind of been the thread ever since.
Mark: Yeah. So I could go into a rabbit hole on Techstars because I remember when working at Techstars and being part of the admitting committee, like.
And a speech that one of the managing directors gave in that first week of Techstars to, to the, the cohort, they were like, just so you know, none of you were accepted because of your idea or your business. And in fact, some of you were accepted in spite of your idea won't name any names, but we know you're not going to continue with this because it's not a business or it's not a good idea, but we think you're going to make great founders.
And so we're investing in you, not the business idea. When you made that pivot, what was the process of going from video games to e commerce? Was it just having conversations with your friends who ran stores?
Drew: I'll answer that in a question, but like, just taking a step back, because it is a founder series, that, we got the same speech of like, you're not here because of the specific idea, which was such a relief and a release.
Like, I had always been interested in entrepreneurship. But I had the insecurity of like, I'm not an idea guy. I'm not going to have the perfect creative vision. And that was always like the easy excuse to just not go pursue it. And what I realized when I had my co founder was, Oh, it has nothing to do with the first idea.
It's about like, can you iterate? Grind and follow your intuition and develop the product and talk customers and basically solve ambiguous problems in the same way you do in most jobs. And that for me just really, when I realized that that's what entrepreneurship and founding a company was about, like massively increased my confidence.
Cause it's like, Oh, that's what we've done on every consulting project or every project at VIA. So anyway, that's one big learning from my couple of years. Doing this on the transition from video games to Shopify, it was pretty clear pretty quickly that dynamic pricing for video games. It just wasn't the right company for us to start.
That market is really consolidated. Like there's a million different game developers, but there's like 12 companies making probably 70 percent of the revenue. And those companies are engineering first, they're very much build instead of buy. So that was one problem, not a huge swath of customers to sell to and as new founders.
Tough bet to go spend 12 months trying to get pilot with one of these companies. Second, like kind of an insular industry, like we were seen as outsiders and it was very hard to get people on the phone that could not be more different in e commerce, like we have just loved. The like kindness and generosity and openness to new ideas in the space.
And then the third issue with, with gaming you know, I think once we realized we didn't care that much, ultimately, like I, I'm a gamer. I love my console games, but there's something somewhat casino ish and like, just mindless about purchases on mobile games in particular and in app purchases. And we're like, Oh, like, do we really want to like work on this for 10 years?
And again, very different feeling in e commerce. It's like, oh, cool, you developed this new product and have an amazing story for why you have a better version of brownie batter and cake batter that is like vegan and eco friendly. And you're trying to bring that into the world and we can help make that happen.
So those were the reasons we turned elsewhere. And yeah, we had some old coworkers who were running brands and we just were chatting and asking how they set prices. We heard a lot of like, well, our investor said we need 70 percent or 65 percent gross margins. And then, yeah, did this on a couple of price points and haven't touched it for two years.
And we were like, okay, we can definitely do better than that. And we actually had one person who was like, how, so can I like launch a test next week? We can try. It was when the first version of the product got built in like two days. So that's what, what pulled us in back in, I guess it was like February 2021.
Mark: Okay. So we're coming up, we're coming up on the two year anniversary, or maybe we're at the two year anniversary. So, so what is IntelliGems today? And you know, how, how do our merchants using it and you know, for someone just hearing about it for the first time, how do you, like, what's your, how do you pitch it today?
Drew: Yeah, it's evolving. Today, we're like a profit optimization tool. So if you're familiar with CRO, conversion rate optimization, we're that for your profit. Oh, you want to go test your prices. We'll help you AB test those, find the customer elasticity. Should you be higher priced, lower priced? Do You want to bundle things together?
We'll help you test your shipping rates. Like, is free shipping worth it? How much does it improve your conversion? Like, should you increase your free shipping threshold? Can split test all those? Find how does it impact conversion? How does it impact AOV and total revenue? And then how does that ultimately impact your margin?
Those were like our first two products. And now we're getting more into discounts. Like, Hey, you test different. Volume discounts or tiered discount can help you test out various bundles and identify where the opportunity is and give custom discounts to folks. So yeah, like think of us as a, a, a tool to run split test on anything dollars and cents.
And be like a way to just understand which products and which parts of your site, how they contribute to your margin and your profits. Go identify communities to improve them.
Mark: It's so cool. When you first launched Intelligems was there any other tool doing this?
Drew: Not really. I mean, there's some tools to AB test themes. There's Google optimize obviously, which is great and free for now, maybe sunsetting. Yeah, they like haven't been, that was shocking, a shocking announcement. You know, great for testing front end changes. But no one really, like the technical challenge we ever came was how to, it's one thing to test something totally client side, like, should it be red or green button or like this banner versus that banner, but going and linking that with a checkout to then change the price.
If I showed you 50 instead of 40 to change the shipping rate, if I showed you free shipping over 75 linking those full stack.
No one was really doing that and then the other big hurdle there is you need to look at different metrics like Google Optimize Conversion rate or like, you know revenue per site visitor Like did more people click this was green with price like I could raise the price Conversion goes down.
There is a world where even revenue could stay flat or go down but because I raised the price My margin percent on those products are higher and I'm making more total profits, despite the fact that there's a lower conversion rate and maybe flat revenue. So like the analytics we realized pretty quickly have to be different, whole different method of calculating stats.
Sig. So yeah, we kinda, we knew a lot about price testing from our old jobs, but figuring out how to bring that to. The e commerce environment was about a year of work.
Mark: Yeah. Well, I imagine not just from a product perspective, you're having to you know, analyze and look at different metrics, but there's also probably like a customer education component because I could see you know, you guys running a test and revenues flat conversion rate goes down.
And you're, you're saying to them, Oh, this is great. Like you've increased profits, but from everything that they're looking at, it's like, no revenues flat and our conversion rate went down. So how, from both from like a messaging standpoint to your clients, as well as like product marketing and product education, how have you addressed that?
Drew: Yeah. I mean, and. Further up a level on education, like, Oh, I didn't know AB testing price was possible. Right. Which product should I test? Should I test higher or lower? All sorts of questions on how it works, you know, like, well, my customers notice, how can I keep them in the same group over time? What happens if my feeds mismatch?
So there were really like all sorts of questions thrown our way. I mean, that's just like a lot of the continuous of. What we do is on the market side, what objections do people have? Like, are they legit? If so, can we fix them through features or are they things that require education? Can we put blog posts out there to dispel myths on the, like, kind of operations, customer success side.
You know, we've built out a bit of a methodology of like, Hey, the brands who this has worked super well for, here's how they do it, you know, we're going to start with shipping, easy wins. We're going to test the threshold and test up and down. And then we're going to move on to like your second most popular collection.
And we're going to take all those products and test 10 percent higher and 10 percent lower and see which direction seems promising and iterate accordingly. And then, you know, spreading that methodology first, just through like holding customers hands and having beta customers who we try all this stuff with.
And then, like, I think this is the part we're in now. How do we build those best practices into the product itself? You know, templates and documentation and recipes. So it's just kind of like a continuous. Process. Our, our big thing, I guess, looking back was we did a beta group with like brands in fall 2021.
And that was really great. Like we didn't have much of a front end. We were setting up tests in a completely non scalable way, but we found some brands who really wanted to do this, were down to work with us because they were getting to shape the product and get a good deal. And that really then determined the shape that like the user interface and the feature list.
Mark: Yeah. It's that classic advice of early on in a, in a company, do things that don't scale. Yeah.
Drew: Right. Totally. Very unscalable at that point.
Mark: Yeah. So you guys launched like in the midst of a really interesting time, I think for in e commerce like in the throws or at the end, however you're defining it, but of like the pandemic and all of the shifts that that had in, in pricing and, and I think all the more important for like.
business owners and merchants to keep, keep an eye on their profitability. Obviously it's the number, you know, thing they're focusing on all the time, but there were all kinds of fulfillment and shipping challenges. So have you seen, there's more of an appetite building amongst e commerce brands and merchants to be more data driven in their decision making around pricing and just like overall with all of their decision making.
Drew: Yes really varies brand to brand, but I think the entire industry is moving that way. I mean, yeah, like. I'm sure the thousands of people tuning into this already are aware of the context. But okay, you have iOS 14. 5, big impact on acquisition costs. And that cascades to a bunch of places you have, like, first it was the containers coming over from.
Asia getting, you know, 10 X, increasing 10 X in cost in like six months. And then you have like FedEx and UPS keeping their holiday peak rates just for the rest of the year, and then doing that like three times in a row. And then you have your suppliers, like charging you more for. Your cost of goods sold or your finished products.
So when we were first seeing, you know, February 21, it was like COVID boom, stimmy checks, like we, we saw, you could see like in our data, when the stimulus checks came out everything was great when we would ask people when the last time they touched their prices was, it was like probably two years was the average answer.
And in some. Cases much longer because it was working. I can put money into Facebook. I'm getting high ROAs my costs are predictable. So, like. That works.
Now all of those things are happening really quickly. They're driving costs up across the, the statement. Now you have interest rates to deal with as well, which I'm gonna touch, but like, your working capital's gotten a lot more complicated.
All that to say, I think a lot of people realize like, Oh, we can't just kick this project down as like a buy, you know, an every two year project anymore. Like, we need to be reactive on pricing. Like we need to make a change now. This can't be a 2023 thing. And then that led to the question of like, wait, but how should we do this?
And we've like, companies typically don't have a person in charge of this. It's kind of like a founder or C level person driving it with some financial input, with some product input and you know, whoever's. Building e commerce site. And they're going out and seeking data. Sometimes through testing, which we obviously promote and think like it is the best way to understand the impact.
Sometimes they're making a change and like watching the numbers and are right next to the core , to pull it back if they too. So yeah, we've seen many more people trying to be like reactive on pricing. I think the next step is kind of like, well, how can you be proactive?
How can you detect if it's time to change your prices?
So you're not like falling behind. We've seen a lot more interest in like using data to figure out how to maximize the yield of a given customer. Like you're spending a lot to drive traffic to your site. How do you like, what's the right first time offer, first order profitability, the offer that gets them to LTV.
There's like a dozen different factors that are related to pricing that drives someone's decision to buy or not. So more people trying to optimize each step in that touchpoint. And then I think third, like more of a focus on contribution margin instead of just revenue. Like I think two years ago, if your top line was going up, your bottom line was going up.
But now that relationship is, is And profit is clearly the more important one. So, you know, things like focusing on first order profitability and not relying on an optimistic LTV assumption to get you there. So yeah, I mean, it's, it's helpful for us. We like, it's kind of fortunate timing that all this, all these things came to a head as we were launching, but.
That's also why we've casted this broader net into like profit optimization, like a lot of these brands, both from expertise, tooling, experience, or just kind of starting from zero on how to optimize, convert contribution margin.
Mark: Yeah, it's such a good point. A couple of really good points at the beginning there, like Like whose job is it to set pricing?
Like there it's that's so interesting. I hadn't really thought about that. I feel like there are a lot of brands where, yeah, maybe it's founder driven. Like, is it the e commerce manager? Is it finance? Obviously depends on the size of the brand. And then two, like, yeah, how you haven't touched your prices in years and maybe now that like inflation is such a hot topic, people are starting to pay attention to that.
Is there a right answer for how frequently you should be optimizing or updating your, your pricing?
Drew: There's not a right answer. I would say for most brands, the answer is probably more frequently than you are right now.
Mark: Or I guess what's a sign that it might be time to update your pricing? What's, what are like some guys or some numbers or leading indicators of like, Hey, maybe this is a pricing issue that we're seeing.
Drew: Yeah. I think at like the aggregate level, just really closely tracking your contribution margin. You're like gross margin levels, and it's not like you need to say, Hey, we're always going to have 15 percent and 60 percent here, but okay, can you look at that weekly, monthly, understand changes and also understand where the inflection points are for your business?
Like, okay, this is the contribution margin level. We are gross margin level. We cannot fall below because then our CAC no longer works and our contribution margin. Like goes down to an unacceptable level. So being aware of those break points that are like, we can't go below. We would rather shrink the business, raise prices and raise margins.
You got to know where those are and keep track of them closely. Also keeping close track of that, I think helps be analytical about discounts. Like that, I think in that old more revenue is good framework. Great. If the discount generates revenue, more people buy, that's, that's golden. But I think There's not a lot of rigor about whether discounts actually drive additional profits.
Like, if you hadn't given this, how many people still would have bought? What's the incremental lift? So, keeping track of those at the high level. Unlike the product by product level, there's a few things we look at. Abandoned cart rate by product. both what is indexing super high, what has really low abandoned cart rates.
And those would be then like opportunity, high abandoned cart. You can lower the price, see what happens low abandoned cart, you probably have more buying, buying power or pricing power.
At a, higher level, we've seen some correlation between session length. And price elasticity. So if you have a product and people seem to be spending just like a lot of time On their decision to buy it or not.
You see a lot of page views a lot of circle backs You're like probably overpriced like that may be a good one to see if you can just speed up the purchase and get conversion rate a bunch.
Mark: And would you do that with an offer or just by lowering the price?
Drew: It depends on your customer and like your brand the strikethrough prices are really powerful.
Like every time we've tested those, if I'm going to sell this for 10, it's going to convert better in the short term if I do 12 struck out to 10. So. And offer like, it's probably going to get you higher conversion rate in the short term.
That said, like, I do think brands have real concerns about it. I don't want everything struck through on the site all the time.
Maybe creates lower LTV. People have like lower quality assumptions so that's where you kind of have. Like figure out which tool is best.
Do you do a strikethrough for everyone? Do you want to go target those customers to it? Browsed and them like a targeted offer over email and use that as like a test to see if it works or you want to lower the price and like monitor the data on how many of these black pens I'm selling.
Mark: Makes sense. So I was going to ask a question about like. increasing AOV. But it sounds like smartly you're focused more on like that profit as opposed to growing AOV.
Drew: Well, well, I think they're pretty related. Yeah. Like that that's been, that's been a huge topic that we've heard from customers.
Like I need to grow AOV. It does tend to be correlated with better profit. In large part, like, you know, it's going to cost me basically the same to ship one of these pens versus 20 of these pens. So if I'm paying five bucks for the box, I want you to buy as many as possible. Cause then I could just amortize this, like shipping cost over a larger order.
So it's definitely strongly correlated. And I know I'm curious,
Mark: I was just curious, where have you seen the most success in, in growing AOV? Like what types of tests are you seeing? Is it, is it, you know, bundling shipping discounts pushing it into a subscription and things like that. Like what are the most effective levers you've seen being pulled to grow AOV?
Drew: Yeah. Number one shipping threshold. I mean, it's right there. It's a powerful mechanism for customers. You want to make sure that, ideally, you can find a number that makes it an easy add on for people. Like, if you want them to buy three of your hero SKU, like, set it to that level. Or if you sell 90 pants and 20 t shirts.
100 is probably a great place to be. Like you can't, it's not easy to achieve, but as a customer, I don't need to do like an algorithm to figure out the best combination of products to achieve it. Second thing we've seen that's powerful there is like buy more, save more offers. Both across the site, and that could be evergreen or kind of a time box for a promotion period.
But, you know, make the customers earn their discount. Like, I'm going to give you 10 percent off if you spend more than 100, and if you hit more than 200, I'll give you 20 percent off.
Oftentimes the math works out profitably. You are happy to give the customer that, that offer if they spend that much. And we've helped brands like, Test rolling those out and then we have a cool feature where you can test different tiers versus one another so you can kind of figure out like Third, then like bundles, so particularly depends on the product, depending on your, your catalog, either like I sell t shirts, here's buy five, save 20 bucks, buy three, save 10 bucks.
And you can kind of like merchandise that super well on the PDP and make someone feel almost a little dumb for not. Getting more or if you have a really like complimentary catalog, finding ways to let people like build their own bundle or mix and match complimentary items there. I think merchandising can be complicated.
Like you would build your own bundle, which is really powerful. We've seen work super well, a lot of custom work we like are hoping to make that easier for folks this year. But right now those tend to be totally custom. You can have a pre built bundle page. Are you actually going to commit to driving traffic there?
Or like, how are you going to get people to go find that? But we've also seen WorkWell add ons in the, of like, Hey, add this. So, yeah, shipping threshold, buy more, save more, bundling, though you gotta make sure you merchandise it well would be the caveat. And then fourth, just like, prices. You know, if you can go find your hero and most sold products and get an extra five or 10 percentage points of price, most of that's going to flow down to your AOV.
Mark: Cool.
Great tips. It sort of goes well too, into another question I had. So saw in a case study that you guys did about integrating with PageFly and ShipBob to ensure that the customer saw consistent pricing. And, you know, regardless of the path through the store. So do you have a favorite pool of Shopify apps or integrations that currently work well with Intelligems and maybe that you're looking to integrate with down the line?
Drew: Yeah. Ooh, good question. We're always adding to it. So nothing's a no. but apps that we have been impressed by and integrate with, like on the page front. Page flight rate. We've had a lot of customers using Replo and having good success with them. On the like onsite merchandising things for volume discounts, we couldn't find anyone that was doing it well.
So we built that ourselves. So we actually are a provider of bundling and volume discounts and we work well with ourselves, surprise. Rebuy. We, we really like for, you know, cross sells upsells. Pretty easy to test with and they're smart carts. And then subscriptions, the new version of recharge, we actually have found super easy to work with and.
Like the unified checkout makes it simpler. You know, there's obviously some upstarts, you have smarter and skio and protection we've done work with each of them. And that's all been possible. It's kind of fun to see all the different features coming out in that space. I feel like the merchants are the one benefiting from a lot of competition.
And yeah, on the analytics side, like. Peel is a really cool tool, especially for subscriptions, and we have some integration with like their analytics and our analytics. Elevar, if you're dealing with site speed we've had some customers push our data there, and they do all the tracking on the server side, so that's led to some big speed improvements.
Yeah, that's, that's my, my current list.
Mark: It's a very good list and you start you kind of answer.
Drew: Oh and fondue fondue recently We've come across a lot to do like cash back instead of discounts, which has been pretty powerful for first time offers.
Mark: Oh, cool. Yeah that is an interesting way of doing of doing that i've also seen Some other ones doing things like , cashback or like funding an account.
So giving them like a savings account upfront for the amount of the offer that you would do instead, which I think is, is an interesting like differentiator from like buy now pay later. But just moving the marketing budget to a different place.
So you started, or you mentioned there was a, you know, a feature that you couldn't find anyone doing really well, so you built it yourselves.
My next question was going to be, is there an app that you wish existed so you could integrate it with Intelligems but it sounds like if there was, you'll just build it.
Drew: Yeah, that's kind of like our MO, you know, we've realized we started out with a super testing centric approach of like, we are going to help you AB test prices, and then we're going to help you AB test shipping rates.
And that's always going to be core to what we do both technically and from our expertise and like in how we believe you should optimize things. But what we've realized is there's a lot of like evergreen things stores should be doing. Like tiered discounts or these dynamic bundles that have pretty poor tooling.
So you're in a position of like download a kind of crap built cheap app or build it yourself and spend a time with an agency. And so, yeah, we're, we're trying to peel some of those things off and say, hey, well, we can build this in our framework. So it'll be high quality technically. Have all our integrations, everything's testable, and it's going to have analytics oriented towards profits and you'll plug it in.
Like, we have to figure out how to market all these and turn that into a cohesive offering. But I think particularly in like the offers and promotion space, there's just a lot of best practices around how you merchandise them, how you set them up, how you can test them and optimize that we don't see out there.
And so I think a lot of this year is going to be building out more tooling.
Mark: You teased it a little bit in the beginning of the conversation but about, you know, maybe potentially where your product and services may be going in terms of like, so you have like the test that can be run and then the different analytics
Did I hear you right in that you might be building some sort of like monitoring capability or like the proactiveness, like reminding like, Hey, we've noticed these different signals, not necessarily from tests that we're running, but we're, we're monitoring all the time.
We're seeing these different signals. Here's an insight of update your pricing, or you might have a cohort of customers that would be really reactive to a certain type of offer or that kind of thing.
Drew: Yeah, totally. I think monitoring those underlying signals around like sessions and products and who bought, who didn't to give suggestions like we have, you know, 600 million of transactions that we've seen as part of tests.
So there's a lot of price elasticity data there we can mine. For larger stores, even running micro tests constantly, like you don't need to be splitting your traffic 50 50, but yeah. If we can just expose one or two percent of traffic to a different offer or a different shipping rate or a different price at a certain scale, that's enough data to say, Hey, like our assumption is changing here.
Like the, data we based last year's decision based off of has changed. Like you have different customers or their expectations are different. Let's go retest in a bigger way. So yeah, like pushing down both of those more like proactive always on directions. And I think in a few years. I expect some brands to be experimenting with dynamic pricing.
I don't know what form that takes yet. Be it, I'm gonna dynamically price based on inventory levels, or based off my underlying cogs, or I'm going to dynamically price based on state, like I would if I were a brick and mortar store.
There's like a whole bunch of factors that could be involved there, but I think that's a matter of when not if so we want to be like, that's where our, deepest experience is.
So we want to be in a position to kind of help brands do that when they decide it's the right time for their business.
Mark: Yeah, that's really that starts to get really interesting. What is the like the threshold the minimum threshold for like traffic or like size of your brand to get statistically significant data where it even makes sense to like be running these tests?
Drew: Probably like, you're doing 400k a month is like the Maybe 400, 500 orders every two weeks. Like the way that you can't exactly predict how long a test is going to take, but if you're running three groups, you're testing in 10 percent price change. We're probably going to need 600, 700 orders for that test. And we don't like having a test run longer for a month.
It's just harder to iterate and iteration is like where you get the real value in testing. Cause you're learning and applying and learning and applying. So yeah, like about that 5 million a year run rate is where I think we start to add a lot of value to brands.
Mark: That makes sense. Okay, last question, because you've been very generous with your time.
What is one thing that you think e commerce brands, based on all of your experience, should start doing, and one thing that they should stop doing?
It's very broad.
Drew: They should stop. Letting marketers run discounting without any oversight. lIke, I think a marketer's job is to grow the top line and get conversions, and discounts are a great way to do that, but they come at a cost. And I think that's often overlooked. I think they should start having a plan for how you're going to address pricing. Obviously, I'd love if every brand in the world tested pricing. It's not for everyone, but you should like quarterly decide, Hey, I'm going to have a pricing committee. It's going to be the CEO, the CFO, and the VP of marketing.
And we are going to, every quarter we're going to meet, and these are the data points we're going to look at. These are the questions we're going to ask ourselves, and we're going to decide should we stay or make changes. And those are just going to lead to like really interesting discussions. It just needs to be cross functional.
It's kind of a pain because you need to coordinate everyone, which is why people avoid it. But that's why I'm saying like, be proactive, have a plan, put it on the calendar, decide who's going to be there, what you're going to ask. You don't need to do anything, but the odds are once you start talking about it, you're going to find some opportunities or some things you want to test.
And I think like, too many brands just avoid it because it sounds bull.
Mark: Yeah, or it's not clear whose responsibility it is.
Drew: Yeah, but like you don't have time anymore to kick it down the road, like costs and everything is just evolving too quickly for you to kick it out of here, like you need to be looking at it.
Mark: And there's so much competition. I mean, it's like you have to stay on top of it because if not, your competitor might be, and that can be the difference between growth or not.
Well, great. Thank you so much, Drew. Appreciate your time and your insights. So excited to see what Intelligems has been able to do in just two years and excited to see what happens in the next year to and, beyond.
So where, if people are. If anyone's listening, still listening, where can they find more about Intelligems should they go to the website, the app store? What's the best place to find you?
Drew: Yeah. I mean, you can like comment here and I'll follow up with you. Maybe easier if you go to Intelligems.io.
There's like a book, a demo for me. You just grab time. It's either on me or my teammate, Sam's calendar. And we're happy to answer your questions, brainstorm, plan. Like it's your time. You don't need to buy and the website has all the details. Like you can go install from the app store, but website has a lot more information about what we do.
Mark: Perfect. Intelligems. io. Well, thanks so much.
Drew: Yeah, I N T E L L I G E M S. io. .
Mark: Great. Well, thank you so much. Always fun chatting with you and appreciate you spending some time with us.
Drew: Yeah. Thanks, Mark. Appreciate you inviting me anytime.
Mark: Talk to you soon.
Drew: Bye.
