Wow, it’s been a month since my last newsletter!
Yes, I am still alive for those of you who messaged me about it, but I was swamped being in the lab with our Product Owner, Tania Grigore, working on something that most Reveal users were asking us; for the longest!
And well, it is almost here.
But let’s take a step back and revisit how much acquisition costs have risen in the last months.
Based on the data from Hunch, as of July 2021, the five major social media platforms showed an impressive increase in numbers:
- Google and YouTube with up by 108%
- Facebook had an 89% increase, while the average CPM was $11
- TikTok having a 92% increase
- Snapchat with “the lowest” 64% increase
And add up the crazy amount of competition that enters the eCommerce market every single day. These increases will be even more significant with the beginning of the busiest season of the year, the infamous Q4.
So how can you reduce your acquisition cost and save yourself from acquiring shitty customers this year?
Introducing the Dynamic Audience Builder.
If you are a REVEAL user, you know that you already have all the data you need for better customer acquisition in your account.
With the new Dynamic Audience Builder, you can improve targeting while also keeping a lean cost that will not erase all your margins that come from Facebook Ads.
When your audience is ready, you send it from REVEAL directly to your Facebook Ads account.
Any audience you build will be constantly updated with new data. So you can set it and forget it.
This feature will be available in early September for all our Reveal users. Watch this space.
Now, let’s check what’s hot or not in eCommerce right now!
📦 Are you shipping me?!
If you haven’t fixed your stock situation already, you might be screwed as the margin damages you will take might put you out of business by February. That + bad retention, bad acquisitions, and all the changes in CAC that occurred in the last months make me say: Shit got very real.
The cost of shipping containers from Asia to the US, Canada, or Europe has increased tremendously. Many companies have their profits erased because of the ridiculous prices and the ever-growing delays.
With the season peak coming in less than two months, things are not looking up.
Some companies are forced to hold off on new orders, consider sourcing products in Mexico or Central America, or make other adjustments.
Brands are now paying $300 million per year for freight transportation that previously had a logistics budget one-third that size.
If the cargo value inside the container is $30K and you pay $11K to move the box, you have a huge problem.
Shippers say they cannot get containers or space on vessels at ports of origin, as demand for ocean freight continues to outstrip supply, keeping ports congested and prices high.
This was caused by the breakout of consumer spending in the US, which has increased import levels by 10% in the first half of 2021 compared to 2019. Check this very well-written article out by FreightWaves.
📧 Adam Kitchen has released a Bible. The Email Marketing Bible for eCommerce Brands.
This email marketing guide for eCommerce brands will give you the strongest email setup you could imagine. It includes a detailed guide of each building phase of the fundamentals you should go through (and how they approach work with their clients) for long-term success and a complete customer journey over email as a channel.
🛍️ The Product Optimization Framework
Customer-centric eCommerce companies need a reliable product optimization framework to identify whether their product assortment is helping them achieve their goals or not: acquiring better customers, transforming new customers into repeat and loyal customers.
If you are focused on customer-centricity, increasing customer lifetime value is your top priority, and there are only three things your departments can do to improve this metric:
- Marketing – What do you say?
- Merchandising – What do you sell?
- Customer Experience – What do you do?
Despite being one of the most impactful pillars in CLV, product optimization research is often neglected and usually handled by the merchandising department.
But product optimization should be the result of interdepartmental collaboration. So, instead of working in separate silos, it’s time to shift towards customer-centricity and use a product optimization framework that allows you to analyze all the layers of product performance.
Above everything else that seems essential, nine times out of 10, the only thing that really can dictate strategy for a DTC brand is the product. The product and how it fits in the consumers’ life.
By using this five steps product optimization framework, you will learn how to:
- Get rid of toxic products; those products that look good in terms of sales volumes but generate customer dissatisfaction and high churn rates. The toxic products can be identified by looking at what first-time buyers and loyal customers purchased and never returned to buy again.
- Prioritize the sticky products; those products that generate repeat purchases, high customer satisfaction, and loyalty. You can identify these products by looking at what products, brands, and categories your best customers prefer and keep on buying.
- Add new sticky products to your offer; You need more sticky products to boost sales and increase the customer lifetime value. To identify new sticky products, you must consider sales volume and the aspects influencing CLV – customer behavior and experience.
⭐ Steal my post-purchase email flow template that can help you increase your CLV. Guaranteed… as long as your business model fits the narrative.
So you are probably asking yourself: How do I make a post-purchase email?
Building a post-purchase email flow based on the NPS survey responses allows you to increase customer satisfaction. Being connected with your customers’ feelings and thinking about your products and services will enable you to be more agile in addressing their complaints and understanding post-purchase behaviors. Find it here.
Until next time.