Case Study:

5 Growth Hacks We Used to Scale a Cosmetics Store From A$45K/Month to A$290K/Month

HeyBud

In the Best Case Studies, the Results Speak for Themselves. Here Is a Sneak Peek:

Start With AdKings
Start With AdKings
June 2021 (8 Months with AdKings)
June 2021 (8 Months with AdKings)

With a bit of skill this is what you can do in under 8 months:

How to grow a business by 126% in a year

✔ Improving the online store sessions by 60%

✔ Ways of doubling conversion rates from 1.54% to 2.87%

Here Is What You’re Going to Learn In This Case Study:

➜ The importance of localization and using the right channels

➜ How to retain a community and keep them engaged in the product

➜ Why you need to properly test ideas out before discarding them

➜ When to take risks to increase your revenue

Introduction

A trap marketers often fall into is assuming that because they can advertise to people in multiple countries at the click of a button their campaigns will work equally well across the world. This is not the case!

This case study is a continuation of a previous memo we produced, where we explored how our client - a hemp product manufacturer that operates in Australia - experienced difficulties when adjusting to the international market.

We will be covering various ideas and strategies that we used to grow the client from A$128K/M to A$240K/M in less than a year. Chiefly, there were five strategies that helped us achieve these results:

  1. The Bundle - Just before starting with us, the brand implemented a product bundle where they packaged multiple items together, which increased their AOV by 36% and let them scale the business from A$45k to A$128k per month. This idea gave us a good head start.
  2. Our Facebook Strategy - After we took them on, the client was already making around A$128k per month due to the implementation of the Bundle. There wasn’t huge room for improvement on the webpage, as they had a c.4.5% Clickthrough Rate (CR). However, implementing the right Ads Manager structure and having seamless creative testing resulted in almost doubling the company revenues for November in less than 30 days.
  3. Community Management - The company began to create and manage VIP online groups, which helped them increase their retention rates. This initiative worked well and helped solidify the perception of our client being a reputable brand.
  4. Creatives - Testing 4-5 stacks of creatives per week and allocating 20% of daily ad spend towards this end was a huge risk to a business after the main sale season has ended but it got us on a path to scale even more.
  5. Growth Hacking Techniques / Omni Channel approach - Introduction of creative avatar and specific advertorials helped us to achieve our first 10k+ revenue in a few days, as well as the opportunity to try different markets, such as Europe. Additionally, the introduction of Google Ads with constant 5X returns helped achieve higher revenue numbers in total as more and more people searched for the brand.

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Part 1: How we scaled the business from A$45k to A$204k a month by implementing the right marketing strategy

We started working with this client in the middle of October 2020. However, they were already doing quite well by this point. In the first weeks of October, they had focused on arranging a bundle offer campaign that had created a major difference in revenues.

Prior to this offer, the products were individually sold. But this idea of bundling items together and selling them as a package increased their AOV by 36%.

It bears saying that some elements of their marketing efforts didn’t really need our help. The website had a CR of 4.5%, for instance. So we began looking for elements that we could improve.

To that end, we began implementing our remarketing structure, as well as our cold targeting strategy, both of which helped us to achieve an instant boost in revenues and a healthy ROAS of above 2.5+ shortly after!

With their bundle idea and our help, we managed to scale the business from A$45k to A$128k a month within a handful of weeks.

After this initial success, we began to diversify our marketing efforts. First, we started to test more creatives and started experimenting with new advertising angles. This led us to find two new winning ads that we made use of. Besides, we began to experiment with advertorials and dark posts, as new potential sources of advertising.

Then we started eyeing other markets. Naturally, if you’re already doing business in Australia, it’s a no-brainer to do business in New Zealand. But our ambitions were greater, we wanted to conquer the “Big 4” - Australia, UK, US and Canada.

So we began to experiment with those new markets and committed to finding new audiences, which have proven to work to this day. This allowed us to scale from A$128k to A$201k in under a month by November.

Overall, we finished the period with high hopes of what the future might bring!

Part 2: Stabilizing revenues and planting the seeds for a second wave of scaling

After the Black Friday boost, we started to falter a bit. Compared to our initial ROAS of 2.7, the fall to 2.2 was quite concerning.

As such, we began to implement Google Ads targeting which instantly helped us regain some traffic. But, as we’ve discussed before, Google Ads often has a scalability issue.

Due to the nature of the algorithms, you can sometimes end up in a self-referential loop wherein you only target the people you know should have been targeted already. So you often have to be a bit creative and explore what other marketing angles there might be for the product.

At first, we only started marketing the hemp skincare products to trendy, young women. Admittedly, this was a stereotype we went with out of practicality, but the available range of potential clients is far greater than this. For instance, we did a 40+ mature audience angle, which worked surprisingly well.

Lesson learned: Be willing to experiment and think outside the box.

It bears saying that for some products the key seems to be to focus on building a community. During this period, our client started to invest heavily in community management and working on their internal VIP group to increase retention rates.

As a result, remarketing grew to 3.2 (which is quite a strong number for this brand).

In the US, Canada and UK we began to see some good results, but only after localizing the websites. This is something that often gets overlooked when selling internationally, but not every piece of content or bit of information will be interpreted the same way by people from around the world.

For instance, if you say that something is worth 1 Dollar, an Australian will think 1 AUD, a Canadian will think 1 CAD, and an American will think 1 USD. All of these are worth wildly different amounts. 1 USD gets you 1.36 AUD, as such potential customers might get scared off if products seem 36% more expensive than they actually are.

Slightly altering the checkout screen depending on the geographic location increased our conversion rates from 1.54% to 2.87%. But we didn’t stop there and even created entirely different landing pages for each market.

Localizing our offering did the trick, and we began to see good results. We even saw such good results from the Big 4 English-speaking countries (especially the UK as we managed to get conversions for a lower ad spend) that we began to set our sights to other European countries.

We got surprisingly good results from Germany and Switzerland and some other European countries but weren't able to deliver consistent results in less prosperous countries. It’s unclear why we got the results that we got there.

If we were to want a better and more comprehensive answer, we would have to run a battery of tests. But as it wasn’t the intention of the campaign to venture that far in the first place, we can only speculate.

It is our belief that it was a similar situation to what happened with the Dollar mixup. Perhaps, consumers in these countries are rejecting creatives for cultural reasons, or the advertorial format that we’ve been experimenting with is novel and doesn’t translate well.

Part of having a successful marketing campaign is to be comfortable with unknowns and deal with them as best you can. In this case, they do not affect the main result, so we focus on more important questions, such as how to maximize our already well-performing audiences and geographic areas.

Part 3: Second part of scaling through a simplified cold targeting structure and using 20% of the budget on creative testing

The final chapter in this story is about scaling past that initial growth spurt. By this point, our sales stabilized and we began to experiment with new ways to understand the data, as well as how to do marketing in the first place, to breathe some new life into our campaigns.

In order to better understand the attribution, we started using Hyros, a tracking and AI optimization tool for ads. Unfortunately, despite it being much talked about in advertising circles, we didn’t think it was particularly useful as a whole.

The one redeeming insight we got on the back of using it is realizing that our performance on Facebook results in negative ROAS and only counted as a customer acquisition channel. In other words, we were losing money on sales directly attributable to Facebook, but it at least brought new people into our sphere of influence. As such, it might have a place in the arsenal if our lifetime customer value far exceeds this number.

But overall, this sent us on a mission to try to find marketing channels with a higher, or at least not negative, ROAS. To that end, we began testing various influencer advertising channels.

To test this, we implemented our “dark post strategy”. In plain English, dark posts are posts that don’t appear on the main profile of a brand/influencer and allow you to run A/B tests without compromising the data of any posts via organic traffic.

Unfortunately, most weren’t successful except for one. This is a good example of how you don’t ultimately know what might work out, and it’s worth doing extensive tests on promising leads, as a single success can pay for all the others that didn’t pan out.

Nevertheless, we began to think it was worth focusing on simplifying our targeting and introducing more creative tests. Fortune favors the bold, and we had decided to try something new.

So, we used almost 20% of the available daily spend towards testing 4-5 stacks of creatives - a related series of adverts - while simplifying our cold targeting to a minimum in order to test as many different creative angles as possible.

This was a major risk, as the main sales season was over by this point in the year. Yet, often success requires a bit of will to be able to risk your rewards and increase them even more.

In addition, we leaned heavily on advertorials and introduced three different versions. Two of them worked pretty well, and it bears mentioning these were based on the customer avatars we had previously designed.

The problem is that maintaining effectiveness was a bit of a struggle. As often advertorials would lead to promising spikes, but also swift declines. But overall, our willingness to try new creatives and marketing angles led us to develop interesting new strategies, especially as the brand was introduced to new clients via a public relations campaign.

Conclusion

Overall, if we were to summarize the experience gathered from this client in a single phrase it would be “Try new things, you never know what might work.”

Starting with the product itself, it made us make some early assumptions that perhaps we would’ve been better off not having in the first place. Due to the stigma associated with hemp products, as they’re derived from marijuana, many people wrongly believe the products might be illegal.

Hence, we initially targeted young, trendy women. But over time we came to learn that a mature demographic was also willing to use these products if they’re framed with appropriate context. As such, if we had let our initial biases guide us, we would’ve not discovered new key consumer demographics.

Besides, it’s worth stressing that every region and demographic has their way of communicating.

If you just assume the same messaging will work on everyone regardless of the market, then you’re doing your campaign a disservice.

If you want your marketing campaigns to be successful, sometimes it’s worth taking a bit of risk. This doesn’t mean that you have to act foolish, just that at times you have to be willing to lose a portion of your potential returns if you want to grow.

Always remember advertising is equal parts science, and art!

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