[Watch Webinar] Emerging Trends: How Brands Are Lowering Their CAC and Increasing LTV in 2023
With competition in ecommerce rising and ad restrictions ever-changing, online merchants need to do all they can to keep customer acquisition costs low. This focus, aligned with continuing to drive sales and increasing the buyer frequency, is what will allow your business to thrive in 2023.
Come join us to hear how Flxpoint and OMG Commerce clients are driving down the cost of customer acquisition and increasing the lifetime value of their customers.
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Below, you can view a transcript of the webinar.
All right, guys, we’re going to go ahead. It looks like there’s some attendees coming through right now, but we’re going to go ahead and get started right on the dot. We know we moved it up early, so thanks for those that did make it, obviously, a little bit last minute scheduling.
And those that didn’t, you’re probably watching the recordings, so appreciate that. I know me personally, I like to watch the recordings anyways, I’m sure most people do with a busy schedule. So, Brett, thanks for making this possible and making the webinar today, man.
Yeah, man, thanks for the invite. Glad to be collaborating on this. And yeah, we’ve both had scheduling issues over the last couple weeks, so those that stuck with us and you’re here live, kudos to you man, we really appreciate you. And we promise to bring the goods right now and make this worth your time, whether you’re watching live or on the recording. So, pumped to be here.
Awesome, cool. So, I’m going to kick us off. Really, today, we’re talking about emerging brand or emerging trends for brands and really the focus being how brands are in 2023, looking to lower their customer acquisition cost as well as increase that LTV.
I ideally do both at the same time really to maximize that and getting creative in this new environment and this more challenging environment we’re seeing in eCommerce. So, I’ll be touching on that and how the brand marketplace is helping with that goal.
And then, we’ll be switching over to Brett to talk more about the next level customer acquisition and retention and really just overall improving your business as a whole. So, with that, I’ll go ahead and jump right in. All right. So, the two pieces that we’ve talked about, the lowering customer acquisition cost and increasing LTV, really how we can accomplish both of those.
I’m going to be talking about a strategy called rolling out a brand marketplace, and most of my presentation is talking about this concept. So, this concept really is a traditional product brand. As we all know, it’s creating a product, whether private labeling or manufacturing a single product or multiple SKUs under a certain brand, thank Yeti, think Nike, things like that.
Well, a brand marketplace is essentially a brand who has a direct to consumer website with their SKUs that also is featuring other brands in partnership on their website, giving a partnership, co-marketing approach, a bundled approach to having not only their brand but other brands.
So, that’s the concept we’ll be talking about. I think Yeti also selling real tree outdoors gear next to their cups and their coolers, and we’ll talk about some examples there. So, it’s different from a traditional retail marketplace, which most of you might be familiar with.
This is going to be a Walmart, where Walmart isn’t necessarily creating Walmart type products. They might have private label brands or their own brand that’s a different name, but they’re known as being the retailer and having a ton of different brands and a huge selection assortment in their stores and on their website.
That’s not the case with a brand marketplace, which you know that is the actual brand launching this. And then, you think Yeti, which you’re just going to find Yeti products on the Yeti store and you’re not going to find anything else, that’s what you traditionally seen like a DDC brand.
But then, we’re going to talk about Brooklinen, which is that exact example of a brand marketplace, that is a brand but is selling other brands. So, typically, when you see this situation, this brand marketplace or any marketplace, a lot of times they can be drop-shipped.
So, a lot of times, the brand is going to partner with other brands but not actually buy wholesale, those products. They’re going to drop-ship them. It’s not always the case but more often than not it is. We’ll talk about some of the complexities in that fulfillment model in general.
So, you just to drive this home. You go to Walmart’s, there’s a retail marketplace, you go to Walmart’s website, you’re going to see other brands like Halo Top and this Circuit Explorer. This brand here, you’re going to see all of those different brands under the retail marketplace type model.
Or if you just go to a DDC brand like Yeti, their DDC website at least, you’re just going to see Yeti brand products. You’re not going to see anything else. That’s really the two models were most common in eCommerce that you’re going to see.
This new emerging strategy is really the concept of a brand that also is listing other brands under their brand marketplace. And what that looks like, Brooklinen’s a great example of that is Brooklyn has their own sheets, bundled sheets and bedding and linens and things like that, and that’s their brand.
However, they want to provide more of a shopping experience. So, not only are they offering their sheets and their linen and pillows and things like that, but they’re also selling bed, bath, home and décor, gifts, things like that to really transform their website into more of a shopping experience so that you’re not just going there buying some sheets and coming back.
Three years later, you’re going back to their website looking for things you need in the house or in the bedroom, not only just in your room or in the living room, also in the bathrooms and things like that, you got furniture and shelving.
You can see here they’ve even called it out with these spaces by Brooklinen, and really creative approach to segment, here’s our product, here’s our sheets, here’s our bedding. But then, also, here’s these spaces, there’s these other curated products that we think go great in the spaces in your home.
They even called on the website, what does this mean? It’s basically a way to find stuff that you love for your home. They’ve made it a great experience on the website to differentiate it between the two products or product types. And even go on to say we curate the products. We look for stuff that makes it simple and clean and you’re can really put and pull a room together.
They’ll even call other brands. So, this is a great opportunity for Brooklinen to work with other… the partners, brands like Yamakazi that they can call them out. They can have their own featured lifestyle, photos of them and they can even shop to a dedicated page within Brooklinen’s website that looks at just Yamakazi home products.
So, as you can see, it’s more of a partnership approach than you might think of an endless aisle marketplace where you’re just shopping through a ton of different products, you’re going and you’re saying, “Wow, okay, Yamakazi and Brooklinen obviously work well together.”
“They have a good partnership there. Their products really complement each other.” And then, it’s a really beautiful experience as you go through to understand that partnership. So, you might think if it’s not obvious right out the gate, like why would a brand do this?
So, there’s a couple different examples. New brands for one, if you’re brand new, just trying to launch your products, your product line, trying to get out in front of your customers for the first time, one, it’s a great… it’s an ability to drive traffic and exposure to website.
So, we’ve got this site here, Yoox, which is clothing. They do clothing and apparel and they’re a relatively new brand, and they’re looking for customers to find their product and find their clothes and to get in front of them. So, they also sell other designers that they know their customer, they sell their products as well on their website.
And so, you can see right there the top navigation, they’ve got well-known designers right there at top level navigation like Coach and Versace and Gucci and things like that. So, customers are searching for those which there are a lot more customer searching for Gucci than there are for their brand.
They’re going to find their website, they’re going to visit it, they’re going to be… they might even buy that Coach piece of clothing or purse or whatever it might be. They might actually buy it, and now they’re a customer. They’re one step closer to becoming and buying Yoox products and becoming a customer of their brand specifically.
So, it is a cheaper way. And I’ll get into the customer acquisition side of things, but it is a cheaper way to get in front and get a higher conversion of a well-known brand on your website versus just pushing your own brand right out the gate. And it also established trust.
You’re partnering with these other brands, they’re on your website. So, if they never want… no one’s ever heard of you, but they know that you are able to sell Gucci or Versace, that’s a great way to just establish trust out of the gate. So, for new brands, this is a great strategy to launch your brand and get in front of your audience in a cost-effective manner.
And then, so say you’re established, we talked about Brooklinen and we talked about… I know Steve Madden did this a little bit. We’ve got Willow Tree, we’ve different customers that we know that will do this. And so, why would an established brand who’s been around, who has an audience, why would they do it, right?
So, this is really about transforming that transactional process of just buying your brand every so often. Maybe you only have a dozen SKUs. Even if you’ve got a good 100, 200, 300 SKUs, whatever it might be of your own brand, it’s tough to launch a new product.
You might only do that every once a year or every six months. So, how do you get them back to your website if they have most of the products they want from your site or you just don’t have that frequent of a buyer?
So, what you do is you partner with other brands to create more of this retail destination where it’s more cost-effective to just simply list products from other partners on your site, roll out seasonal offerings, bundle products together, put together somewhat of a content marketing piece where you can say, “Our linens go great with these three or four other pieces of house decor.”
And so, put together a lifestyle shoot around that and just have a reason for them to come back and just enjoy the experience of coming back and shopping your website. So, it’s really a good way to get people back into your site and to change that brand mindset of, I’m not just there to buy a single product and then come back when I need it again.
But I want to be engaged with this retail brand now on an ongoing basis more so more weekly or monthly than quarterly or annually. So, shop the room’s a great example and doing things like that, shop the look, you do that seasonally.
And then, just adding more value along the way as being a consultant, a curated advocate for you as the customer rather than just being a single product company. And then, not only is it great for the business and the brand that does this, but it’s also great for the customer.
So, the customer wants this inspiration, they want to look to their retail partners, their brands, whatever it might be to get curate assortments to say, “I like your brand so I’m probably going to like these other ones as well.”
“Can you put it together for me so I don’t have to go poke around other websites and scroll Instagram and do whatever to find out what I like and what I want to buy that compliments your brand and your style.” So, it’s great for inspiration for the customer.
You also get that one seamless checkout without… versus linking out to another site, going to their checkout, not having shop pay or your credit card saved or whatever, and just adding friction there. So, one seamless checkout is obviously an advantage for the customer.
And then, also single-source for customer support returns. You do have to manage the drop-ship and the return side, which I’ll talk about that in a slide… here in a couple slides. But if you can provide that one single support experience, that’s obviously a great opportunity for your brand to just have that customers back and to build that trust with them.
And then, just ending in an overall better shopping experience. So, let’s get into the basis. So, all those, if you didn’t dissect out of that already, what we’re talking about and how that might lower your customer acquisition cost, well, it is really that first example I was talking about with Yoox.
So, you can advertise well-known brands and their products that are in high demand to your customers. So, because you have such traffic and volume around that, you can get in front of those brands fairly cheaply versed, the demand generation that you need to do with your own brand-new brand that no one’s ever heard of. And so, there’s a lot more traffic out there.
There’s ways to leverage YouTube, which Brett’s going to talk about or even Google shopping ads and things like that to get in front of those customers at a cost per click that makes a lot more sense than just generating demand about a brand that your customer’s never heard of or doing more of a generic keyword type approach around your product.
If you just do linens, that’s going to be pretty expensive before you get a first conversion versus doing an actual brand name or an actual product that someone’s looking for that’s more relevant, so that’s the thought behind that. And then, as I alluded to, you’re going to get higher conversion.
They’re looking for that specific product. They trust that brand already. They’re going to convert. And even if you don’t have much margin, maybe you only make 20% or 30% or whatever it might be, a post year 50% to 60% on your own brand, you’re still going to get that customer to that take first step, to go through your checkout, to become a customer.
To get that first party data that you want in the checkout process, to have that now in your funnel to then obviously upsell or eventually sell your own product to them at a higher margin. So, another way that it’s a little bit cheaper to get them take that first step and then your conversion’s going to be higher when you actually do go sell your own product with better margins.
And then, just the partner co-marketing efforts that you can do, getting in front of someone else’s audience. If you were to partner, say that Yoox’s example, if they were to partner with Gucci and get in front of their audience, that’s obviously a cheaper way to acquire customers in higher converting way versus just a generic paid ad.
And so, you’ve taken this approach to reduce the customer acquisition cost and then while you have the customers now. At the same time, you can actually also increase your lifetime value. And what you’re doing there is you’ve got the customer and now you’ve got more products for one.
So, you’ve got additional SKUs. Not only do you have your linens and things like that that Brooklinen has, but now they’ve got lamps and shelves and soaps and all that might be. And as long as it’s a curated selection and it’s not this endless aisle of irrelevant products and your customer sees value in it, sure, why not?
Why not sell them the products that they want and they value that align with your brand. So, you’ve got more SKUs there and you still do have margin there to go ahead, increase that value that you’re getting out of the customer so you can have more SKUs to sell in general.
You also have the ability to bundle more offerings. So, whether it’s adding more in the checkout process or you’re bundling them together to give something unique that’s going to convert more or it’s going to just add to that overall AOV, that’s how you can really see that LTV in increase.
And then, just in general, doing more co-marketing offers along the way, more opportunities to get in front of your customer and sell something that you wouldn’t have been able to with just your own brand, it’s going to drive LTV over the… for each one of your customers that do take advantage of that.
So, that all sounds great. Let’s all do that. Let’s all just start adding more products to our… let’s go out, let’s find the brands we love that we know our customers love. Let’s add more products, that sounds great. Obviously, it’s a little bit tougher than that.
There are some challenges along the way. Nothing that can’t be solved with the right partner, the right software, the right solutions out there, but it’s worth noting these before you go down this path. So, the challenge for, one, is you’re taking on inventory risk and non-core products.
And so, in some cases, you might feel like, “Hey, I need to have these products in my warehouse. I don’t want to do multiple shipments or I want to have them in my packaging or whatever it might be.”
You can work with drop-ship partners, one, to if you work with another brand that’s used to drop-shipping for other partners, they might have the ability to have their own branded packing slip for you, work with you on the packaging in general.
If you’re not that worried about it, you can drop-ship. If you have the right partner that’s able to provide that branding for you or the branding isn’t as big of an issue, you can do drop-ship so you don’t have to take on the inventory risk of non-core products so you can drop-ship.
Especially in the linen space where you’re buying something very outside the core brand and they did a great job with Brooklinen to show it was a different brand product vendor there. It’s not that big of a deal to send that into two different boxes or a non-branded box in general.
So, one way to look at that is start drop-shipping. If you start seeing a lot of take on certain products that you’re not selling as a core product, you could always bring them in-house if you really want to control the branding. I’m going to jump right down since that’s a good point on what usually stops people from doing this.
There’s also the opportunity depending on, I’m going to jump down this bottom right section, to do what we call cross-docking. And so, this is where you don’t want to take on the inventory risk, but you don’t want to sacrifice the packaging and the branding, the experience.
And so, if you have enough margin or if you have the right types of products that it might be light and the shipping might be not as expensive as you might expect in other products, you can take the advantage of taking that product and having it drop-shipped directly to your warehouse combined without going up into a bin or into the warehouse, but then combined cross-docked into one package and then shipped out.
In some cases, you can do that. If you have enough volume with a supplier, with another brand, if you’re sending multiple orders to them a day, a lot of times, you can do that without getting charged double shipping.
We’ve seen a lot of customers where Flxpoint, this is one of the things we do where we’ll take a bunch of orders that come from individual customers will consolidate that down into one purchase order that you can send to that one supplier, that one partner brand, and they will fulfill that into almost a freight shipment directly to your warehouse and then you can cross-dock that, put that in the right branding.
So, that is something to do that is not as costly. Once you have the volume, they’re not going to charge shipping for… if you send over a certain order volume or a minimum order quantity, whatever it might be. So, there’s something to think about there if you can actually get volume there.
Or, if you just have that right partnership where it’s like, “Hey, we’ll split the shipping on that crosstalk approach.” There’s definitely ways to make that advantageous for both your partner and your customer. So, something to think about when it comes to that approach.
The other challenge though you’re going to see is high volume new items setup process. So, what this means is as you want to add a ton of more… ton SKUs, you want to also get the right imagery, you want to get the right descriptions, you want to get pricing, all that stuff needs to be set up what we call new item set up.
And so, there are integration tools like ourself and others out there that will allow you to connect directly into the other brands, Shopify store, and just pull imagery, pull descriptions, pull things like that to give you a base to get started before you load it up to your website.
You might want to modify it a little bit more. You might want to add a lifestyle image. You might want to modify the descriptions a little bit or change the categories to make meet your Shopify categories or Big Commerce categories certainly.
But at least, you can pull in a baseline and have 80% of that product item set up done and then push it up to your store. So, something to think about. If you are used to just adding two or three items every quarter to your site.
And now, you want to start adding 10, 15, 20 every month, there’s… you’re going to want some flow to get the product data into your product management software or your online store and then finished up and put on and merchandised to the front end.
And then, lastly, three 3PL inventory management work and fulfillment workflows here in the bottom left. So, once you get an order in, this is basically referring to you got an order in, now you have to split them. One might go to your own warehouse, you got two order line items, one is for that linen, one’s for the lamp.
The linen is in your warehouse, the lamp is in your partner’s warehouse, how do you orchestrate that? How do you send it to multiple… split that off, send one to the 3PL, one to the drop-ship partner, whatever it might be. Once again, just make sure that you are thinking about that at very basic level.
Shopify locations can help in that regard. More advanced level Flxpoint and other distributor order management software can help in that process. So, those are really the top four challenges and different solutions you might want to look into if you feel like this might be a good strategy for you.
Cool. So, that at a high level is how brands are leveraging the brand marketplace to reduce customer acquisition cost and increase lifetime value. So, with that, I’ll kick it over to Brett and we’ll see if we have any questions at the end, but I’ll go ahead and just shoot it on over to Brett to get started with his side of things.
Sounds good, appreciate it, Travis. And yeah, what a cool perspective and a unique look at how do we use our product strategy, our merchandising strategy, creating this own little curated marketplace inside of our brand to improve both LTV and customer acquisition costs.
And so, we’re going to look at now how do we do both of those things? Increase LTV, lower CAC to an acceptable level through good marketing strategies and good advertising strategies. And so, we’re going to break that down a little bit. Can you see my screen okay, Travis? Is this looking good?
Awesome, make that bigger. Great. So, obviously, we can do both of these things, increase LTV and lower CAC, and that’s like the holy grail for growth. Easier said than done, but I’m going to break down some next level strategies, some mistakes that you might be committing right now that you need to avoid to make this happen.
If we do not know each other, I run OMG Commerce. We’re performance marketing agency work with brands like NATIVE and Organifi and Truvani and BOOM by Cindy Joseph and many, many others. And we’re a team of 73. We focus on Google, YouTube, Amazon full channel management and then email and SMS on the retention side.
And so, I share that to say, like everything I’m going to break down here, all these strategies we’ve tested, proven with millions of dollars a month in ad spend and some pretty big brands to back this up. And so, let’s break down these ideas.
Mostly, I’m going to be showing the power of combining YouTube and the rest of Google Ads to drive LTV and to lower CAC. And I just saw this the other day, so these are new stats, but a billion people a day shop across Google. So, that includes, of course, Google Search and Google Shopping and Google Images, but also YouTube and the Display Network.
And everything that Google touches, a billion people a day search there. Now, what I believe is still one of the most untapped shopping opportunities or growth opportunities for an eCommerce brand is YouTube. And YouTube basically reaches about 90% of the population.
Essentially, whoever your customer is, it’s almost guaranteed that they’re spending a lot of time on YouTube. So, as you look at this breakdown, really with all age brackets, they’re on YouTube a lot, and they’re spending a lot of time each day on YouTube.
So, average watch times of 70 minutes for that peak. And even that 55 plus age group, we’ve got several brands that are targeting that, especially BOOM by Cindy Joseph, they’re still there. Almost 80% of that market is spending time daily on YouTube.
But most brands and likely your competitors are not advertising on YouTube and so, it’s an open opportunity for you. And then, almost 90% of people, 86% of people say when they’re shopping for a product, they check with Google at some point in that shopping journey.
And so, being on Google, on YouTube across Google Properties makes a lot of sense. And so, to do that though, to increase LTV, to lower our customer acquisition costs to an acceptable level, it really takes these three things, better strategy, better creatives, better campaigns.
So, let’s break down some ideas here. And I want to look at BOOM by Cindy Joseph just really quickly. So, when we started working with BOOM, and we started working with them about six years ago, seven years ago maybe, and then about four or five years ago started doing YouTube really heavily for BOOM.
And at that time, their primary customer acquisition strategy was running Facebook ads. That’s how they Ezra Firestone, the founder, really good at Facebook ads, that’s how they were scaling. We’d been doing some Google and it was going great.
Then, we started adding top of funnel YouTube. And then, we started going next level with our search and shopping and display and remarketing. And once we did that, once we launched YouTube and went full funnel for BOOM, they saw 30% top line revenue growth, 116% growth and remarketing activity and close sales, and then almost 200% growth from Google Ads as a whole.
So, we’re going to be breaking down some of the things that made that growth possible for BOOM and it can be possible for you as well. Now, I’m not going to be able to do this topic justice just due to the time that we have on the webinar today.
But Performance Max or PMAX as we like to call it in the biz, is the newest Google campaign type. And what I’ll say quickly about it is this, if you are not running it, you should be. And if it’s not one of your top campaigns in your account, then something is wrong.
This is the future of Google Ads. Google is all in on Performance Max and then other campaigns in the future, they’re going to be like this. We work very closely with Google. We have five dedicated reps and we talk to them all the time.
And there’s been hints and stuff that show that Performance Max and other campaign types that are similar, that’s what Google’s headed towards. And so, basically Performance Max is all of these channels that you see here. So, search, shopping, display, YouTube, Gmail, even Maps, it’s all of those channels in one single campaign.
I will admit when I first heard about Performance Max, I hated the idea. I thought it would be impossible to control. I thought it was just Google trying to remove all the controls, all the creativity away from media buyers and agencies and marketers.
But as we’ve used it… and now, we’ve spent about $6 or $7 million on this campaign type on the last year or so, a little less than a year. I like it and it’s working actually quite well. But what you have to have, and this is what’s required, you do have to have your best assets.
So, basically, one of the first components is you bring Google your very best assets, your best images, your best videos, your best headlines and descriptions, your feed, your product feed. You got to bring all your good stuff to Google. And then, there’s some other things you can do with the campaign in terms of segmentation.
But if you give Google the best of your assets, that sets you up to succeed. Now, I’m not going to play all of this, but this is a video from Overtone and this type of video is doing very well on YouTube but also on Performance Max. And here’s what’s interesting.
I was hyping YouTube a second ago. Running YouTube campaigns is not the easiest thing to do. I actually think it’s easier to run Facebook campaigns, but Performance Max has a YouTube component to it. So, for a lot of marketers getting their foot in the door, dipping their toe in the water, whatever you want to… analogy you want to use for YouTube may be best done through Performance Max.
So, let me play like the first 20 seconds of this ad.
Today, I am dyeing my hair for the first time with Overtone. It’s a semi-permanent color depositing conditioner. It’s vegan, it’s moisturizing. It’s really, really easy to use.
I’m going to part my hair in like six sections.
I applied it on my dry hair.
You want to make sure that you are fully-
So, that gives you a good example there. Could you hear the audio, Travis? Did that come through? Okay, awesome. So, basically, it’s high energy, it’s fast-paced. You’ve got some UGC, User Generated Content, some influencers there. They’re showing you how the product works.
They’re showing you what it does. They’re showing the benefit. It’s instantly visible, the benefits and the before and afters and things like that. They also talk about how the fact it’s vegan and healthy and all these things. So, that type of video ad is working really good as a YouTube standalone campaign, but also inside of Performance Max.
So, video is hot. Here’s an example, this is from a lawn care brand, which I will say back to piggyback on Travis’s point. This lawn care brand, they mainly have a make your grass grow cleaner, better, whatever type of offering. But they started doing what you were talking about Travis, where they were looking at, “Hey, let’s start selling some other things that people need for their lawn.”
And some of that was done through a little marketplace and that worked. We were able to scale Performance Max pretty quickly for them and got to almost 200% return on ad spend, which for subscription product was awesome for them and continuing to grow.
So, let’s talk about three mistakes that very possibly you’re making one or two or all three of these right now that if you just stop making these mistakes, instantly better results. So, the first one is you’re not striking while the iron is hot.
And here’s the deal, if you want to get better at attracting new customers, so running Performance Max to cold traffic, top of funnel audiences, running YouTube, the top funnel audiences, you actually got to get better at remarketing first.
And remarketing is one of those things that everybody’s doing it, but most people suck at it. We get to analyze hundreds of Google Ads accounts each year, and most of the time, there’s one remarketing campaign, it’s not optimized properly, they’re not the best assets there, the targeting is wrong.
So, a lot of times, we’re not striking while the iron is hot. And one of the first things to fix is just focusing on really tight windows for remarketing. Here’s what we found. No matter how fancy you get or how long the window is for people to purchase your product, three-day windows or less seven-day windows or less, that’s where most of the conversions come from.
So, spin the majority of your remarketing budget here, put most of your creativity, your time, your campaign buildouts into these tight windows and it will do better for you. If you’re remarketing to 30, 60, 90-day windows, that’s not necessarily bad.
But 90%, 80%, maybe 70% of your attention needs to go right here to these tight windows. Okay, I’m saying number two, stopping short of driving action. We see this a lot. And this is a little formula that I like to talk about is simplified, but I think it creates the point nicely.
You got to have awareness. You got to create understanding, and then you had to create motivation before someone actually takes action. And I think if you look at the way a lot of people are running their ad campaigns, they’re stopping after either just awareness or just understanding, they’re not completing all three.
And so, let’s talk about this just a little bit. First of all, awareness. You got to have enough impressions. And so, we’re seeing often, and this goes back to an old ad principle. But a lot of times, somebody’s got to see an ad seven times, six times maybe before they actually are aware, before they realize that, “Hey, I saw this ad.”
And we’ve seen this. You’ve probably seen if you’ve been on YouTube and you see those surveys that show up before you watch your video, that’s Google running those surveys for brands, and we run those surveys all the time for our brands.
And so, you really got to get several impressions before someone even remembers seeing your ad. So, you got to be pretty aggressive for someone to be aware of your brand. And then, understanding. Someone really needs to see clear language and they need repetition to really understand what you’re doing.
And so, here’s a couple of simple examples. So, Boom by Cindy Joseph, skincare for boomers. And so, one of the things that they’ve got this probably called Boomstick, which replaces your makeup. And what a lot of people wonder is, “Well, will it work for my skin tone?”
And the cool thing is, it will match any skin tone. So, actually, this is Boomstick Glimmer. Live Bearded, longtime client, awesome marketers. And so, they launched a Beard Trimmer. So, they sell products like Beard Butter and Beard Conditioner.
Launched a beard trimmer and it is the… I will say it is the best beard trimmer that I’ve ever used, but they launched it with simple ads. You can see that and you get an idea of what it is, it’s the best beard trimmer. Maybe I don’t believe it’s the best yet if I don’t know Live Bearded, but I see the picture, I know exactly what it is.
But then, you got to create motivation. So, urgency and value, I think those are two components that you need to have for motivation. And this doesn’t have to be a big sale or a big offer. Sometimes, you just got to add a little more value to your offering.
So, this was a client we helped launch on Google and on YouTube, but big blankets, huge blankets, like 100 square foot blankets. So, they ran ads where they were talking about, “Hey, build an epic blanket fort.” So, maybe it’s one of those things and they’re not cheap blankets.
But maybe you see the ad, you want one, but you need a little more justification. And so, you look at this and you’re like, “Okay, memories with my kids, blanket forts, hard to put a price tag on that. Okay, okay, I’ll shell out the money for this blanket.”
So, creating extra value for the product does not necessarily require a discount, but you need to show the value in a unique way. And then, mistake number three, assuming that you’re top of mind with your customers. Assuming that they’re thinking about you.
And this goes for even people that have purchased from your brand, from your store before. You are not top of mind for all of your customers. This is your customer. They are being hounded by life or in this case hounded by three small children.
And so, they got a lot on their plate. You’ve got to remind them in a lot of different ways, not just email, not just remarketing, not just SMS, but really a combination of all the tools you have at your disposal, not to bug your prospects or your customers but to remind them and to make it easy and to be top of mind.
And to make it where it’s likely that they’ll continue purchasing your products and reap the rewards of that and get the benefit of enjoying your products. And so, you really got to be everywhere. You got to be everywhere and you got to be there frequently, but you have to do it in a way that’s smart and cost-effective and that really meets that goal for better CAC.
So, here’s the deal. We’re trying to drive LTV. We’re trying to lower CAC. But the truth of the matter is, ad costs are not going down. If we project, what is it going to cost me on YouTube five years from now or what will Facebook CPMs be like five years from now?
If you think they’ll be lower than they are now, you’re praying for a rude awakening. Ad costs just don’t… they don’t go down, they… it’s like inflation mostly just goes up. So, ad costs are going up. So, here is one of my favorite quotes from Dan Kennedy, “The company that can afford to pay the most to win a customer wins.” Not the least but the most.
And this ties into LTV. Because a company that can spend more to acquire a customer, that’s because they got a better backend. They’ve got a marketplace that Travis is talking about. They can get more value out of each customer than other competitors in their space.
And yes, we want to drive down customer acquisition costs to an acceptable number. But just know that there’s a floor there and ad costs are not going down, so we got to get better at LTV. So, let’s talk about how we can drive that with good ad strategies.
So, three next level LTV strategies that I’m going to lay out that if you’re not running these campaigns, you need to start. The first one is Bought X Not Y Campaign. And I learned this first from Ezra Firestone at BOOM. And so, basically, this is where you look at someone who, in the case of BOOM by Cindy Joseph skincare brand.
Someone who’s purchased moisturizer, but they’ve never bought the mascara. So, this is someone that they know the brand, they love the brand, they may be bought moisturizer once or twice but never bought mascara. So, now, let’s build an audience of those people inside of Google Analytics and let’s run ads showing them how awesome our mascara is.
They know our brand. They know our other products. Now, let’s introduce the new product to them, in this case it would be mascara. We’ve done this now for multiple brands, supplement brands, clothing brands, automotive brands. Your best audience, your best customer is someone who’s already bought from you before.
But here’s the deal, I think a lot of times we assume, well, they bought moisturizers, so they’ve got to know about mascara. But what we found is that there are a lot of people that are in our buyer list that are then searching for some of these other products, but not on your site, they’re searching on Google.
And so, not everybody knows your full product catalog. So, you need to run these campaigns and we recommend running them in display. So, Google Display Network, YouTube, and even in Search. And in Search, that’s where you’re targeting keywords like mascara in this case, but you’re targeting people who are buyers of your brand.
So, Bought X Not Y Campaigns, very powerful. Again, we did this for Live Beard, for the beard trimmer, great example, where people are religious almost about buying their Live Bearded Beard Butter, Beard Conditioner, the scented, the fragrances to make you smell like a man, but they didn’t know about the beard trimmer.
So, we built an audience of buyers, started showing them the beard trimmer through videos, through display ads, through reviews, and then that really helped propel sales for the beard trimmer. Here’s a quick look at BOOM by Cindy Joseph.
These people that have bought color but not other products, actually, it’s a variety there. But you can see for this top campaign, 166 direct conversions at a $32 cost per conversion, but then also almost 400 views through conversions, meaning, people that saw the ad and then bought later.
And so, that’s also what happens when you’re reaching your own customers. They see it and they’re like, “Oh, BOOM, yeah, I know, BOOM. And that looks awesome.” But they’re doing something else. They’re on a news site, they’re on YouTube researching something, whatever.
So, later, they’ll go back to your site and purchase. But these campaigns absolutely work. Here’s another example from BOOM and then from Overtones, maybe you bought the coloring conditioner, but not the full hair kit. So, now, we’re going to advertise the full hair kit to you.
And again, similar type of performance there, although YouTube conversions for this brand was off and just absolutely off the charts. So, two more quick strategies and then we’re done and we’ll be open for questions. The next one is a reorder campaign.
So, if you sell a consumable, think about, “When should someone reorder my product?” And one of the best lessons I ever learned in marketing was from Jay Abraham. If anybody’s an old school marketing, direct response marketer, you probably know who Jay Abraham is.
But he talks about how it’s a marketer’s duty. It’s an entrepreneur’s duty to recommend the optimal amount of your product. And if you don’t, you’re doing your prospect a disservice. So, if I sell vitamins, let’s just talk about vitamins for a minute.
And I know that for my customers that have optimal health, they need to take my vitamins every day or some vitamin every day to get optimal health. But if I’m not recommending that, if I’m not reminding them, if I’m not nudging them to buy enough vitamins where they take the recommended amount, I’m doing a disservice.
I’m not just short-changing my own sales and my own business growth, I’m doing my customer a disservice. So, how often should someone reorder? And then, let’s create campaigns to remind people. And what’s really interesting about this, and I talked about email a second ago, but let’s just talk about that in more detail.
We may say, “Well, yeah, but I’ve got my email campaigns.” Someone buys once and then they need to buy again in 30 days or 60 days, I’ll just fire off an email. I’ll send an email and that’ll remind them to get them to come back. But think about what are really good open rates for email?
Maybe 30%. Maybe if you’re really, really good at email marketing and you’ve got a small list, it’s very responsive, maybe it’s 50% open rate. So, if all you’re doing is email an SMS, you are missing 50% to 70% of your customers. They’re not seeing it or they’re not opening it, they’re not taking action.
So, add in reorder campaigns and include YouTube and Display and even Search where when it’s about time for someone to reorder, we’re hitting them with the message and it’s just a reminder. It’s just a nudge saying, “Hey, it’s time to reorder this.”
Amazon is very good at this. We’re an Amazon family. We’ve got Amazon Echoes all over the house. I’m sure people are listening in, but it is convenient. So, this happens with some of the… and I’m a supplement and a hot sauce junkie, but love hot sauce.
And so, I get reminders sometimes on our Echo show like, “Hey, is it time to reorder Cholula or I’m into Truff hot sauce right now, is it time to reorder Truff? So, just those little reminders can cause someone to say, “It is. I’m getting low. I forgot to reorder. Thanks for the reminder.”
So, reorder campaigns, do this for BOOM, do this for Live Bearded, works really well. You can see some of the examples here of campaigns for Overtone. So, these reorder campaigns vary cost-effective, and we’re running some of the same videos like we showed before.
But sometimes, shorter and often more just like product demo, but these serve as great reminders to get someone to purchase again. And then, the final strategy and this is super quick, is the subscriber campaign. So, what about someone who’s ordered once or twice before, but they’re not a subscriber?
If you do have a subscription program, again, this can be a great way to run an ad saying, “Hey, you can save more, automate this, don’t think about it, never run out again.” that type of thing. So, we’ve seen a lot of success here by going after customers who bought two or three times but are not a subscriber.
Let’s entice them to be a subscriber and really grow our LTV that way. So, that’s a wrap there. I do have a couple of free resources. If you want to learn how to create great YouTube ads, I think one of the best ways to learn is to look at other cool examples.
So, we put together a collection of 16, 18 of our favorite YouTube ads, and I break them down as to why they work and what elements of the ad make them work. So, you can scan this QR code or go to omgcommerce.com under guides, it’s free, get the YouTube guide.
And then, if you want to keep learning and hear from other really smart marketers and store owners, I’ve got two podcasts for you, Spicy Curry Hot takes on eCommerce, and then eCommerce Evolution, What’s New and What’s Next in eCommerce.
And so, with that, that’s a wrap on my portion, Travis, so we can open it up to Q&A if we’ve got time. I think we got a couple minutes here. You know what, I think you’re muted that or I can’t hear you.
Yeah, thanks, appreciate that. Yeah, so, that was great, Brett. I really appreciate that. We do have a couple questions we can dive into. I love the statement there. No reorder campaign is a disservice, which I completely agree with. I’ve got this, they call it a Pool RX, which helps keep the pH balance, and I just rely on that subscription to let me know I need to change that.
If I didn’t have that… luckily, it took me a couple buys before I actually got the subscription, but I think I was hit with a couple ads on the way before I actually said that subscription.
Yeah. And somebody just need that reminder. They want the product. They need the product. They know they do, but kids happen and life happens and stuff happens and so you forget. So, you’re not bugging your customers, you’re helping them. And if you have that perspective, that’ll shift how you approach your campaign build out and your messaging and things like that.
No doubt. Well, cool. So, we had one question come in from Matthew, really just want to understand more around… you, basically asked, can you explain a remarketing campaign and provide some examples around what that looks like?
Great. So, basically, what you’re doing with remarketing is you’re building an audience of people who have engaged with your brand in some way, but who maybe haven’t taken the action you want them to take. So, as an example, it could be someone who’s visited, just visited any page on your site.
Or, it could be someone who’s visited a product detail page, or it could be someone who’s added something to the cart but they haven’t purchased. So, any of those audiences, they’ve done those actions but they have not purchased. So, those are groups of audiences.
And so, basically, you would then target them with a Display Ad, a YouTube ad to get them to want to buy. But it could be someone who’s bought one time but not twice or not three times, or not a subscriber. So, it’s any audience of someone who’s engaged with your brand and taken some action but not the action you want them to take.
And so, you build those audiences inside of Google Analytics or Google Ads, and then you target them with a relevant ad saying, “Hey, is it time to reorder?” for someone who’s bought once but not twice. Is it time to try this product for the first time for someone who’s added a carpet they didn’t purchase.
And so, yeah, it’s helping someone along the journey. Because if we stop short and if we just run that first ad or get that first impression or get that first interaction, then we’re not going to get that sale. And so, remarketing campaigns can really transform your overall customer acquisition cost.
Yeah, makes sense. Especially with that seven times, takes seven times to actually remember you.
Minimum, exactly. Yup.
Another one we had here, and I’m not sure if you had anything on the fly here, but any apps you like from creating videos, as I mentioned B-roll. Is there any apps that you like to quickly create videos or are you all organic, natural, you just like to create it with your own?
Yeah, it’s a great question. I don’t know of any apps necessarily. I know you can. Google is offering some ad editor, video editor options inside of Google Ads and they’re always improving that. And we’re in one of the groups where we give feedback and help them improve those products, and so that’s getting better.
There are tools like Animoto and there’s a couple others like it where you can basically upload videos and upload audio and then it’ll mash them together. So, those are good.
But we love to get user-generated content for our brands. And so, it’s really just easy to ask for that, having someone shoot it on their iPhone or cell phone, send it to you. Because having that combination of some raw video assets, and then if you edit it and make it look cool that’s got authenticity and usually just works really well.
Okay. Another one just came in. So, talk about PMAX campaigns. This person, they said their current Google ad agency says their PMAX campaign underspends consistently, and are there ways to help it increase? Is there something that we’re missing out on?
Great. So, if Performance Max is underspending, then it’s likely a few different things. It could be that the agency went in and added brand negatives or some negative keywords, that’s a possibility. It could be that the bidding is too restrictive, meaning they’re shooting for a really high return on ad spend.
We’re really low cost per acquisition, and that’s causing the smart bidder Google’s algorithm to say, “Eh, we can’t really reach that number so it’s going to pull back.” So, it’s often those things. Or, you’re not giving it the right assets. So, you’re not giving it your best images, your best videos, your best headlines, best descriptions.
It can only work with what you give it. One of the other things that I would also mention is Performance Max needs audience signals. So, you want to give it, and it’s not audience targeting if you’ve been running campaigns and stuff, it’s not the way Google usually works where if you use an audience, it’s like that’s who Google targets.
If you give a Performance Max campaign an audience, it’s an audience signal. So, it’s like a suggestion. It’s like a starting point. We found that campaigns work better if you use your buyer list as a signal, and then audiences based on someone’s Google search behavior, so there’s some ways to do that.
But it’s likely one of those things. Either you’re not giving it the right audience signals, but likely it’s going to be something bid related or you don’t have all your assets or good assets in the campaign where Google’s got enough to work with.
Got it. That video you showed earlier, a lot of UGC, a lot of User Generated Content in that. Any thoughts on the amount of UGC content versus created in-house content and that mix and how you should blend that in?
Yeah. Ideally, I want to throw in some UGC into every video, if it’s good UGC. If it’s just someone saying, “I really like the product.” or something generic, that’s not that powerful. But if they say something that overcomes an objection and really shows why they love the product, that’s super powerful.
So, we’ve seen ads that are just UGC, so just a mashup of UGC, that can work. Or, even one person that’s a longer UGC, sometimes that can work for remarketing and stuff like that. But there’s not really a right or wrong there in terms of the amount.
I think it’s a matter of, are we hitting on the biggest benefits? Are we overcoming the top objections? Is the pacing that’s enough because hey, attention spans are short. Are we showing the product in action? Does someone see the video and get a clear picture of here’s what the product’s going to do for me if I buy it.
So, I always like to have at least some UGC. But really, it’s going to depend on can you accomplish all of those things with just UGC or do you need to mix in a narrator and stuff like that. So, yeah, more than one ways to skin a cat in this case.
Yeah, make sure it’s quality and get it in with it… when you can if it is quality.
Awesome. Well, great, Brett, really appreciate that. Some really good content there. I love the list of different things to look out for. And yeah, hopefully, this is helpful guys on in the audience here.
Really appreciate it, how engaged everyone was and really just dealing with us as we scheduled back and forth. We had flight delays and games and things like that that we had to work around, but we got it done. We had it done today.
Yeah. Thanks for sticking with us and yeah, had a lot of fun. Thanks for the invite, Travis. Thanks for pulling it. And to the Flxpoint team, you guys did all the heavy lifting on the back end of pulling this thing together, so appreciate you guys. This was a lot of fun.
Awesome. Yeah, thanks guys. Have a great afternoon.