Lessons Worth $50 Million | A Reflective Journey

I remember two and a half years ago, I was still looking at each advertising channel attributed revenue and thinking that we were doing great yet still we were not able to scale.

The Facebook and Google ROAS has never been stable, yet we based most of our decisions on Facebook ROAS, Attributed conversion value. Each of those platforms will always try to prove to you that they are responsible for the result where they aren't.

Now, we've streamlined our focus to key metrics across all brands:

1. New customer CPA

2. Overall CPA

3. 6-Month Gross Margin on customers

4. 12-Month LTV

5. Returning customer %

6. AOV (Average Order Value)

7. Revenue per session

Just looking at these metrics has allowed us to grow 50x more than we were able to grow previously. Set clear targets for all of these metrics and track them weekly. Revenue per session is incredibly important, just by focusing on this metric we have done 1000+ tests on websites.

Three years ago we were solely reliant on single images in our ads, which again generated a lot of "good results"

Only when we started to build out our content team that was pumping out 50+ video creatives a week we understood the importance of content diversification.

We used to come up with an ad angle and showcased it only by using images.

Which limited our messaging reach.

Right now when we find a winning marketing message ( desire + ad angle ) we're telling it 50+ ad creatives utilizing videos, images, and animations.

The way the FB, IG, and YT algorithm works is mostly based on content.

If you are clicking more on picture ads than video ads then those platforms will show you more picture ads and vice versa.

Look at the most successful brands and what type of ads they are running. Don't copy - put your twist on them and test them.

Back in 2018, 2019, and 2020, it was easy to create ads and get some sales.

Look at this amazing product, First purchase 20% off, shop now let's go.

There wasn't as much competition back then.

You could get good sales results even with simple ads. Simple message.

Marketers had it easy and I feel like a lot of people didn't spend enough time to do deep customer research.

Why should they? Just create an ad put 20% off and done, sales coming in.

Back then we also thought that we were doing customer research but in reality, we were doing the bare minimum to make sure that we get sales, and that's what held us back.

I feel like most marketers have been stuck in this stage for a while now and that's why they are struggling to scale their ads, and their brands.

To find success it's really important to understand your customer, their desires, needs, pain, problems, day-to-day life, etc.

Only after we truly understand our customers on a deep level we are able to create ad messages and marketing funnels that resonate with our target customers.

Dive deep into consumer psychology and marketing fundamentals.

I think that CRO is the wrong word for website optimization.

This should be called business optimization.

There are thousands of tests that can be done on the website.

It's not just about looking at your session - add to cart- checkout - purchase ratio.

You can improve some things and it may result in higher conversion value, but the AOV drops and you lose more money on the first sale.

For example, renaming "subscribe and save" to "auto-ship" and playing around with the benefits of using auto-ship.

This change alone has changed the way our customers interact with some of our brands.

It won't work for all the brands, but for ours, it works well.

This lesson deserves a 5 part-post series on its own.

3 years ago we thought we were doing CRO until we encountered a brand that was running 4 tests a week every week for the past 2 years.

I cannot state how important it is to have an offer that you use to acquire a customer.

Back in 2018, 2019, and 2020, you could get away with just advertising all the products under the sun and generate sales.

Look at the most successful brands, most of them have one offer that they are using to acquire a customer.

It's easier to create 50 advertising messages for one offer than to create 50 messages for 50 products.

The reason why we are successful with our brands besides having a great product is that they all have an offer that we can scale with.

It's not 20%, 50% off your first purchase.

Study top-performing brands you will see many offers that you can test for yourself.

This is so crucial.

There are brands that for the most part of the year are losing money to acquire customers in order to cash in in Q4.

Have a game plan that you follow through.

If you want to get customers and make a profit on your first purchase go ahead.

If you want to outspend your competitors to acquire customers go ahead.

If you want to do a hybrid model, where for the first 2 quarters you gather profit to ramp up customer acquisition in Q3 just before Q4 starts go ahead.

Have a game plan.

We have brands that for Q1, Q2, and Q2 lose money on the first purchase, but we do that just because we know our 6-month gross profit margin as well as our 12-month LTV.

Based on all the data that we have gathered we know that on average customer comes back in 37 days and spends an additional $50 with us.

And then 40 days later comes back for the third purchase and spends another $80

If there is one takeaway that you can take from this post - don't just do things on the surface level.

You will only end up with mediocre results.

If you want your e-commerce brand to grow then do what is required.

The market does not award mediocre inputs in the long term.