Answers to common questions that came up when I held 10 pro-bono consulting calls with subscribers to the No Best Practices newsletter.
This content first appeared in the No Best Practices newsletter on 5.14.2023.
Last month I held 10 free consulting calls with readers of this newsletter. I met with a broad range of marketers and operators working at brands that ranged from accessible luxury to children’s clothing to jewelry.
There were three recurring themes in these calls. I’m going to share my (anonymized) advice on these topics with you here.
Paid Social Questions
How Can I Develop More Winning Ads?
When it comes to ad creative, there is iteration and innovation. Iteration is testing new video thumbnails or swapping out the hook. Innovation is developing net-new creative concepts.
You can only do innovation efficiently if you’re able to diagnose why an ad worked. And sometimes it takes a few rounds of iteration to identify a pattern in what works for your account.
If you’re a small brand, you should really try shooting your own photo and video ads with an iPhone. There is no faster, cheaper way to discern the “theme” around what works for your brand. (h/t to Barry)
What KPIs Should I Use?
I wrote a post about that here. I’ve talked with a lot of marketers and operators who use Facebook in-platform metrics to manage their spend, so I guess this is still prevalent.
You can’t really do that anymore. Or, I guess you could, but you’ll drive yourself crazy.
In my experience, Meta in-platform CPAs for a given day are typically higher than business-level CPAs for the same day, even if Meta ads are the brand’s main growth channel. If you’re using in-platform metrics you could be leaving money on the table.
Post-iOS14, anything that happens more than seven days after an interaction is captured inconsistently. There are people who saw your ads two weeks ago, signed up to your email list, and then converted today. In-platform doesn’t capture all of this.
If I’m working with one major acquisition channel, I use business-level revenue and spend to make scaling decisions. That’s what I talk about in the link at the top of this answer.
Can I Succeed With Small Budgets?
It depends on how you define “success”, but generally, the answer is no.
To achieve optimal performance, you need to drive at least 50 conversions per week to an ad set (and ideally to each individual ad).
To accomplish this, you need an ad that can drive that many conversions at an acceptable CPA. So if your ads “fatigue” after 20 conversions, you’ll struggle. You also need enough inventory to support those conversions.
There is going to be a “ramp up” period where your ad performs below its highest possible CPA. The lower your daily budget, the longer the “ramp up” period will be.
If your brand’s AOV is $300 and you’re trying to “scale” on $100 a day, forget it. You probably want your CAC around $100, but you need to spend $400-500/day at a minimum to collect enough data to get it there. And that’s $400-500 on a “winning” ad. You’ll have to spend more to test into that winning ad.
That said, I have seen brands with proven product-market fit drive $500-3,000/day in new customer sales with low daily budgets and a strict bid cap.
But these brands are driving awareness/traffic outside of Facebook. Their creative fatigues quickly. And it’s hard for them to scale beyond a few thousand dollars a day in new customer sales.
If you’re prioritizing low CAC over scale and you’re creating demand elsewhere, this approach can provide a complement to your overall efforts. It will never scale, and it also probably won’t work for you.
Retention Questions
How should I measure retention?
I covered that topic in depth in this post. But I’ll admit that the reporting I outlined here is hard to implement for a new brand with a smaller team.
If you’re a small team:
- Install a low-cost analytics app like Lifetimely. Use this to track the value of your cohorts over time. The faster you grow, the worse cohort retention will get. Don’t let that stop you from growing, but factor it into your forecasting
- Use one data source for all retention channel reporting. In-platform metrics from your email and SMS providers are typically very biased. GA last click is fine.
- That said, use this to take the temperature of your retention program, not manage it or measure its true impact. I.E. don’t use this to make financial decisions
- Use common sense. Tactics aimed at low-funnel audiences are rarely incremental.
What kind of results can I expect?
The “retention is the new acquisition” narrative has been making its way around Twitter again. This seems to pop up whenever things get challenging on the acquisition front.
A healthy mono-brand eCom business retains 20-30 of every 100 new customers it acquires. So if you did 2,000 sales in your first year, 500 of those customers are making a second purchase. Maybe 250 will make a 3rd purchase. That all plays out over the course of 1.5 – 2 years.
With retention tactics, you can turn those 500 customers into 525, and the 250 into 260. So that’s a total of 35 incremental orders a year. That’s small potatoes. You can’t grow a business like this. Focus on acquisition.
Over time, those small incremental gains can compound. But they won’t break you out of a growth plateau. It’s worth putting the basics in place, but don’t invest a ton of time or money in retention technology, complex segmentation, etc if you’re under $25M/year.
Website Questions
How Can I Improve My Website?
I had a few of my readers ask me to do a live walkthrough of their website and provide feedback. If you’re planning to ask me this in a future pro bono session (will happen again in Q3), it’s helpful to have a few specific questions in mind.
If you’re a young, growing brand, you should optimize your web experience toward your prospects, not your existing customers. Your prospects have very little context on your brand. The more clearly you can articulate what you sell and how it solves a problem, the higher your conversion rate is going to be.
You can apply that advice to all the copy on your website: make it clear, not clever. (If you’re trying to build long term brand equity or already have it, feel free to ignore this advice).
Put your best selling products front and center on your highest traffic pages. You should have a best sellers module on your homepage. Put best sellers in the top 2 rows of every category page.
If you’re looking to improve conversion rates, site speed is a great place to start. All the CRO wizardry in the world won’t offset an intern who is uploading products with 10MB raw JPGs for every photo.
Also, many Shopify apps leave phantom code on your site, even after they are uninstalled. This code can slow down your site, so audit for this quarterly, or whenever you remove an app.