Layered With Lace (LWL) is an affordable, monthly bralette subscription business. With stunning and high-quality bralettes offered at an amazing price-point, we knew that this campaign’s success had the potential to explode once we took over. Facebook advertising strategies are not one-size-fits-all. Because of the very specialized niche involved and the monthly subscription aspect to this campaign, we knew that we had to build the right framework for this business to compete in the monthly subscription ecommerce space.
The Problem: Lack of FB ads knowledge caused the biz to get “stuck” and hindered growth
Prior to reaching out to our team of experts, LWL had been operating for about 2 years and felt ready for substantial growth. The owner and founder had dabbled with Facebook ads very briefly before but didn’t know how to effectively run FB ads. FB ad manager was SUPER confusing for this ecommerce biz owner, which is not uncommon since it’s a very complicated platform. She quickly realized she needed an expert team to help create a killer strategy and manage the campaign in its entirety. While it is possible for someone with no Facebook experience to run ads, it’s quite challenging for anyone not well-versed in FB ads to create a successful campaign from scratch. Scaling a campaign up and allowing room for growth is another piece of the puzzle that is best left in the hands of FB ad experts!
The owner of this biz felt stuck. She couldn’t grow her promising business like she wanted to without doing more in terms of digital marketing. Influencer marketing had been working well for building up her business, but she had reached a plateau where she knew she needed to be doing more to take her business from feeling like a very involved hobby, to her dream of it being a full-time and thriving business.
The Solution: Build a subscription-specific strategy with an irresistible offer for new customers
When LWL brought our reputable team of experts on board to manage their campaign, they trusted that we would know how to build them the right type of strategy for subscription-based ecommerce businesses right from the beginning.
The Power of a Compelling Promo
One of the first key aspects to the new campaign was creating an irresistible promo for first time customers: JUST $10 for the first month. This type of offer is SO appealing to your target audience customers and removes any barriers to entry for new customers. Don’t underestimate the power of a good promo. Most of the time, promotions that are at least 15% off can be a game changer for bringing in new customers. This is because first-time customers in particular are always the most difficult and expensive to convert for any business. After someone makes a first purchase, additional sales down the line are much easier because trust has been established; past customers don’t really need as much of an incentive to purchase as brand new customers do.
After launching this specially crafted campaign, we got the immediate ROAS over 3, which was incredible considering we were aiming for just a 1 ROAS immediately. While that 3+ ROAS was amazing in itself, the long term ROAS was 12+! This double digit ROAS is calculated by taking into account the average amount of time someone remains a subscriber and thus how much revenue a new customer will ultimately bring in over the lifetime of them being a subscriber.
Let's break down some of these amazing results a little bit further, shall we? In just a few short months of running ads for this subscription business, we've generated a 10.99 projected ROAS.
Want to know exactly how we got these figures?
$4,115.86 in ad spend
$8,887.40 immediate revenue
10.99 projected lifetime revenue: (525 purchases x LTV of $86.19 = $45,249.75. We then take $45,249.75 in projected revenue divided by $8,887.40 in ad spend = 10.99 ROAS).
In other words, with every new subscriber, that new subscriber will bring in $86.19 in revenue during the lifetime of them being a subscriber. This is an AMAZING lifetime projected revenue and a result that we are all thrilled with!
A “Good” Problem-Outgrowing Wholesale Suppliers
Shortly after launching their new campaign with TDM, this client’s business grew so much that she had to find full manufacturers due to growing out of her wholesale suppliers. This was new and sudden territory but also VERY exciting as it means her business is experiencing the growth and success that both she and our team were hoping for!
1- Have Patience: Like most FB ad campaigns, you need to offer an irresistible intro promo for first-time customers. This is especially important for subscription based businesses! It’s also extremely important to have realistic expectations; don’t go into running the ad campaign with the mindset that you’ll be making a profit right off the bat. The long-term profit comes with the recurring subscription.
This business owner knew that we would likely break even with each first purchase and that is totally OK and even to be expected with subscription-based businesses.
Let us break it down for you: With LWL, the average lifetime value (LTV) of a subscriber is $86. This means they will be making money on every new subscriber in future months. In their case, if they spend $10 to acquire a new customer (our target number which we have been often well under!), that’s completely OK since she’ll potentially be making about $76 for the lifetime of the customer. That is an 8.6 ROAS over the long-run, which is amazing. But we haven’t just reached 8.6 ROAS for Layered With Lace; we’re often into double digit ROAS!
2- The Power of Influencers: Utilize influencer content! Do some research on what influencers are popular in your space and reach out to them to see if they will promote your product. More often than not, you will be very well-received. Testimonial videos and personal reviews can go a long way in terms of attracting your target audience and drawing them into trying your product.
3- Know your LTV: Again, it is very important to know the lifetime value of your average customer so you can precisely calculate the projected ROAS and what you have to work with in terms of the cost for acquiring new customers.
4- Compelling Promos are a MUST: We’ve said it before and we will say it again. We cannot emphasize enough the importance of running a GREAT first-time customer promo. Try not to get caught up on making a profit with a new customer. If you do make a profit, that’s awesome, but if you don’t, remember IT’S OK: you’re going to make up for it and MORE in future months as long as they’re a subscriber. It is best to focus on increasing the LTV of a subscriber, and you’ll continue to make an even higher profit in the long-run.
5- Utilize the Excitement of a Sneak Peak: Lastly, this tip is imperative for subscription-based ecommerce businesses. Show the current month’s products/subscription box to lure people in. When you highlight exactly what they’re getting, instead of just being generic, it helps. Not that you can’t bring in people with just the subject of the subscription, it just tends to bring in a higher ROAS when it’s even more specific to the month; people want to know exactly what they are getting.
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