Case Study:

How We Tripled An Auto eCom Brand's Revenue in 8 Months By Fully Relying on Facebook’s DPA Carousel Ads & Leveraging Emails

Rhino

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

Within 8 months we have achieved the following:

Growing the online store conversion rate by almost 10x

✔ Increasing the number of orders by 399%

✔ Taking a $50k/month revenue business to $400k/month

✔ Maintaining a returning customer rate of over 15%

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

➜ Why good products can sell themselves

➜ How to cheaply market to existing audiences

➜ What marketing styles work best with established brands

➜ Why accidental disruptions might be a good thing

Introduction

Shopify Conversion Rate 2020 August - 2021 June

This is the story of how marketing often doesn’t need to be as complicated as people think, and how good products can sell themselves if they’re given the right platform.

We began to work with this client, a powersport accessories company, in October 2020, and they had a respectable monthly revenue of $50k. By this point, they had built a strong brand, a loyal following, and thousands of positive reviews on sites like Amazon.

That said, their marketing wasn’t particularly well developed. So within a handful of weeks, we pushed the conversion rate up by several times and kept it consistently above 2%, as opposed to the former sub 0.5%.

Over the next year, we were tasked with maximizing available acquisition channels and developing new marketing opportunities. However, after putting more emphasis on ads to drive performance, as well as search campaigns to attract prospects, we began to notice that Dynamic Product Ads (DPA), worked better than our attempts to write and optimize a specific copy.

In addition, we targeted our existing clientele through email marketing, which reduced advertising costs and increased the Lifetime Value (LTV) of our client’s customers. Surprisingly, email marketing came to represent up to a quarter of our revenue! Sometimes going old school is more effective than fancy new techniques.

This discovery led us to 8x the monthly revenue, from $50k to close to $400k, but it wasn’t immediate and there were bumps along the way. The following sections will cover the main factors to consider regarding scaling a product marketing campaign, and how we were able to do so in three easy phases.

Are You Ready to Transform Your eCommerce Store into an 8-figure Powerhouse?

Let's figure this out! Book a FREE 45-min Discovery Call with us and let's talk about the possibilities of your brand.

The 5 Main Components of Our Success

A successful marketing campaign rarely depends on a single factor to achieve its goals.

There are almost always various components that help attract clients in multiple ways.

Sometimes, there are factors beyond your control, which affect consumer demand. We’ve seen this multiple times over the past year; the COVID-19 pandemic has caused a massive unplanned shift in consumer demand towards eCommerce and caused disruptions in the availability of goods and services, which users have had to adapt to.

In other moments, campaign success depends more on factors that are directly under one’s control. We’ve identified key components that played a pivotal role in our campaign’s success:

1. Strong offer - As we’ve hinted at before, our client was already well known for impeccable quality, and had thousands of good Amazon reviews. This meant it was much easier to work with them, as they could rely on brand recognition alone to get clients.

Overall, they have a pretty good market fit and are selling relatively cheap and high-quality products that people love. To top it all off, the industry they’re in is a very particular niche so it's not easy to find a lot of high-quality competitors.

2. Leveraging Emails - When we started working with them their Email revenue brought in around 5% of overall store sales and the customer LTV was surprisingly low. Realizing that the product had a strong, core audience, we began to focus on utilizing this goodwill to cheaply market via emails.

By pushing this marketing channel, we managed to increase the store revenue attributable to emails to 25%. This lessened the overall marketing costs and greatly reduced the pressure off the acquisition channels, which allowed us to scale.

3. DPA Carousels & Facebook Algorithm - In Phase 1 we started testing various strategies and found that Carousels worked the best. Until recently, nothing could really beat display product ads; until now where we are starting to finally find some winning videos.

However, the interesting thing about relying on dynamic product ads, is that we could make use of the strong merchandise line and customer interactions.

It makes our work easier because we were not as creative reliant, the product essentially markets itself and Facebook simply makes it available by presenting the product to the right people.

Essentially what we did was just let Facebook’s algorithm work, to find lookalike audiences or have the algorithm search by interest, and present the best offer at the most effective time to find the perfect customer.

4. Optimizing Google - In the beginning, this was our main channel, our highest spending traffic source, but it was limited to how much we can scale. Due to budget restrictions, the maximum we could go in terms of spend is around $1.4K and we could not scale past that level.

It worked well in the beginning because the brand was a known brand on Amazon, thus a lot of people were searching for it. Nowadays, the Google marketing channel is very reliable bringing solid returns of around 3.5X - 4X ROAS every month.

However, after a certain point, the nicheness of the brand can cause issues. After all, even if people could potentially be very interested in the product, they’re not actively searching for something they don’t know exists.

5. Boosting Conversion Rate - When we started working with our client in October, their conversion rate was around 0.3% and we managed to get it up to 2.7% in under a month! That was primarily a result of using DPA Carousels and relying on Facebook’s algorithm.

In other words, Facebook found the best customers at the right time with the right product. It’s always worth remembering that trying to outsmart Facebook is a losing battle - they’re an almost trillion-dollar company solely built with the purpose of understanding their users to better sell products to them. So if you can’t beat them, join them, and take advantage of their skills.

Additionally, we also worked on the landing pages and found new ways of presenting the growing range of best-selling products. The main issue has been having enough in stock to keep up with demand.

The 3 Marketing Phases

2020 was not a normal year, and 2021 hasn’t been one either. As such, rather than trying to explain to you in broad brushstrokes what we did, we’ve come to the conclusion that we need to break it down into various phases.

These are simply for organizational and storytelling purposes and carry no deeper meaning behind them. But it will allow us to explain in detail the specifics of what happened over certain stages over this past year.

Phase 1: Testing, Black Friday & Christmas (November & December)

Before AdKings
Before AdKings
End of Period
End of Period

We originally signed up to work with this client in mid-October 2020, but setting the campaigns up and testing the various products and creatives took some weeks. As such, we only began to see proper results starting in November.

The initial problem we had was that creatives weren’t working so well. For some reason, we hadn’t found the right hook. Deliverr Ads performed well in the beginning and gave us an uplift, but it wasn’t quite enough to be satisfied either.

Thus, during this period, Google was a major factor in our campaign, as this brand has high awareness and offers unique products.

However, this strategy’s scalability was limited, as there weren’t that many people actively looking for items in this niche sector. But this gave us a good idea. Using our existing audience which was passionate about us, we began to remarket and engage with them via email for our first Black Friday marketing campaign.

The reason is simple, emails allow you to easily upsell new products as well as cheaply remarket existing customers and thereby boost their average LTV.

Steadily, this began to yield results, and from an initial 3% of sales attributable to emails in September, our emails were responsible for 19% of sales in November. This is because we knew that Black Friday is crucial and can often make or break an eCommerce business, so we prioritized it.

Unfortunately, our approach wasn’t sustainable, as by December sales attributable to email marketing had fallen to 6%. So we would have to tweak our strategy going forward.

In the meantime, while targeting our existing passionate audiences, we began to think about converting new customers. Facebook is likely the best way by which to find people who fit particular demographics or interests, as cataloguing this is almost their duty.

So we began to use the data provided by our trained Pixel embedded on our client’s site to find lookalike audiences or also have the marketing algorithm search by interest. Then, we would dynamically offer them different products according to their priorities via DPA Carousels.

We didn’t majorly need to tweak anything as the Facebook algorithms are very good at finding product-market fit. It was also far more scalable than other means as Facebook was quick to identify potential customers.

Another thing worth mentioning that happened during this period is that we worked on the product pages to increase the conversion rate. As you can see, even minor changes to the existing landing pages created a 10x increase in conversion rates!

These are the initial stages of how to take a business with a revenue of $50k to over $200k in December. The next phase covers the difficulties of scaling beyond this level.

Phase 2: Scaling up and breaking the $300K barrier (January, February & March)

January
January
February
February
March
March

You would think that the months following Black Friday and Christmas would not be nearly as good sales-wise. After all, there’s no major buying holiday or socially expected excuse to make purchases.

But having already gotten a handle of the type of marketing strategies that work best with our audience, we began to activate campaigns and ideas we pre-prepared in December. We managed to increase revenue by 40% in a single month, even after Christmas.

This made us quite optimistic about breaking the $300k revenue target, but this turned out to be a bit overoptimistic. After January we stagnated and tested multiple strategies to break the new ceiling we’d created.

In order to maximize the return of every dollar invested in marketing, we focused on promoting the best selling product that had the highest Average Order Value (AOV). To do this, we tested different angles and creatives, but unfortunately, nothing worked better than the DPA Carousels we had found in the prior phase.

The most important thing to consider for success during this period was, surprisingly enough, still emails despite a lower CPM than in months prior.

It bears mentioning that another thing that affected our performance during this period was unpredictable fluctuations in stock. Sometimes we lacked inventory in our key product lines.

This limited supply accidentally created a sense of exclusivity and time pressure whenever products were available - similar to how clothing brands like Supreme will deliberately undersupply their clothing lines to increase the perceived value.

However, the difference was that in this scenario, the scarcity wasn’t artificial. As such, whenever the products were available on Amazon again, we saw an immediate uptick in sales.

Perhaps the key takeaway is that many of the deliberate or even accidental (as with the scarce product lines) strategies employed relied on our client’s strong brand name. If you don’t have a vetted product with good brand strength, you will almost solely have to depend on the success of creatives or immediate demand.

Phase 3: Further scaling, trying to break the $400K goal (April, May, June)

April
April
May
May
June
June

Prior to this period, we had steadily been increasing the importance of email marketing, and by April it represented 27%of our monthly revenue. We began to get a handle on the audience expectations, and luckily our best sellers came back into stock.

This created an ideal scenario where we managed to hit a new record of $388k in revenue. It wasn’t evenly spread either, as we have generated 25% of our monthly revenue in just three days.

However, this good fortune was short-lived. Once again, there was a supply shock issue in May. The problem was two-fold:

  • Supply Chains have been broken over the last year due to various reasons. As such, our clients have to order inventory half a year in advance.
  • Inflation is increasing the price of metals, which reduces the client’s profit margins.

In other words, they have a few difficult choices to make. They could order items in advance and hope that demand eventually meets the oversupply. Besides that, they could also increase the price, and hope that the community is somewhat price insensitive.

To also add complications, the company is also innovating. So they don’t just have the same products available but are adding new ones. In May they released a new product which luckily proved to be the new best-seller.

The problem is that there is a lot of uncertainty in their operations. If they expand too much, they might end up with a warehouse full of items they can’t offload, and especially with rising production costs that can cause severe cash flow problems, this can cause life-threatening business disruptions.

Unsurprisingly, June was a bad month because all of the best-sellers were completely out of stock by this stage. There wasn’t much to be done from a business development side, other than marketing a few new successful products.

Nevertheless, we tried to increase the profit margins to the best of our abilities. To that end, we have tested various new strategies, such as ROAS Value optimization which performed very well.

On a small scale, we also began to experiment with copy that our initial tests indicate performs well. In addition, we have found some video ads that seem to perform better than DPA Carousels. But more testing is required to determine this with any degree of accuracy.

We also aimed to improve optimization by increasing our tracking capabilities. So we introduced Hyros, an ad tracking and AI optimization tool, but we ultimately didn’t think it helped us scale and it wasn’t worth the price.

Not every avenue that seems promising will be worth it, and there’s no shame in withdrawing from a strategy that didn’t pan out. As such, in the last weeks of June, we moved to make decisions on Facebook again. Ironically, the shop performance actually improved!

Despite the supply-side problems with the best-seller items in June we managed to maintain over 75% of the revenues of May. We remain optimistic that in July it might be possible to scale up to $400k.

Conclusion

Overall, our client has come a long way. It was founded mid 2017, and until recently had been billing around c.$50k monthly. In total it had gotten a revenue of close to $800k, but with our help in 8 months, they generated 3x what they generated in their entire existence.

We took them from their emails only producing 5% of their revenue to 25%-30%. This is very good, as considering our budget restrictions and the businesses’ increasingly thin profit margins we can offer relatively inexpensive leads.

As such, the advertising budget can focus on customer acquisition and keep pace with the rising CPM. But we will have to find more scalable acquisition channels, as Google is reliable and produces 4x ROAS, but it has seemingly reached its limit.

It is our belief that once the company is able to adequately address the ongoing supply-side issues, it will be in a fantastic position to grow. At the core of our marketing strategy was putting the product at the forefront.

The foundational cornerstone of our whole 8-month strategy was to highlight the already considerable admiration that people have for these products. When you have a fantastic product, selling it is often the easy part, as you just have to find the right platform and customers will come.

Are You Ready to Transform Your eCommerce Store into an 8-figure Powerhouse?

Let's figure this out! Book a FREE 45-min Discovery Call with us and let's talk about the possibilities of your brand.

Ready to Take Your eCommerce Business to the Next Level?

Click the button below.

AdKings - White Banner Logo - LG - 1.05
Untitled-2