Our client was operating on very low profit margins by selling on discount sites. They had backed themselves into a bit of a corner as customers were now expecting big discounts on every purchase. Making matters worse, the 3rd party websites owned all the customer data so it was a challenge to establish long-term relationships with their own customers.
Our client wanted to stop selling on these discount sites and instead start building a direct customer base on their own website.
How could we establish a more appropriate price point for the products while simultaneously getting customers to buy direct rather than relying on these more established 3rd party websites?
Our team first encouraged the client to remove inventory from the 3rd party discount sites. This was a short-term revenue hardship and it had to be done in phases. But the target customer of this brand was a savvy online shopper and we felt strongly that website conversion rates would suffer if buyers could easily find the same products for less with a quick Google search.
Simultaneously, we began prospecting for new customers that were likely to be interested in these products but were unlikely to have been exposed to the brand on discount sites, and thereby not be tethered to the lower price points and a discount brand image.
We tested a variety of messaging directions, audience segments, images and videos to see what would resonate with this new customer base and started to find some clear winners.
Our team used Dynamic Broad Prospecting to cast a wide net while layering on interest-based and lookalike audience segments to guide Facebook’s algorithm to find our perfect customer. We quickly paused under-performing messaging and creative concepts while rapidly iterating new tests utilizing Smartly‘s automation tools. This allowed our team to speed up the optimization process and relieve the short-term pain of transitioning from the 3rd party discount sites much more quickly.
The Bottom Line
Our client’s goal was lofty: to increase baseline website revenue by 15x in Year 1. We were able to exceed this goal by Month 8, hitting over 22x the Month 1 revenue while maintaining between a 450% and 500% ROAS.
From the client: “We were very nervous before we started the Facebook Ads, it was a tough time for our company and it was pretty much the last thing we were going to try before packing it in. But now here we are, 10 months later, and things are going great, we’re in the black, we’re growing, and it was really the best decision we ever made.”