Scaling Subscription Product Business from 0.5 to 2.5 ROAS while increasing Ad Spend to $30,000/mo (Step-by-Step)
Industry
Health / Nutrition / Wellness
Results
Growth from 0.5 ROAS to 2.5 ROAS
Brand History
Project Goals
Being a startup that wasn’t able to get their paid traffic campaigns profitable, they initially just wanted to acquire more subscribers through a new funnel. However as we kept hitting the initial goals they saw an opportunity to aggressively scale, so we quickly went from $1000/mo ad spend to over $30.000/mo ad spend. Since their business model relies mainly on constantly acquiring new subscribers, one of the crucial points for this project was to maintain a profitable CPA (Cost per Acquisition) while scaling so they could hit their investors’ target and secure another round of funding.
Results
- Scaled Facebook Ad Campaigns from $1000 to over $30.000 ad spend per month while staying within the target Cost per Acquisition.
- Reaching $59.356/mo revenue with an average of 2.5 ROAS.
- Achieving 6.4 ROAS days.
- Client secured another round of funding from investors by demonstrating growth and profitability.
- Skyrocketed customer’s lifetime value through implementation of loyalty campaigns.
- Built a solid foundation for further scaling.
Consulting Call and Audit
After doing an in-depth audit on their past facebook ads data and their website we had a clear vision of what needed to be done, so we developed an in-depth tailored plan to take Vivoo’s business to the next level.
Their setup was more complicated than the common ecommerce store, so the priority was to ensure that we were collecting 100% of the data so we could make the right decisions on our campaigns.
We also noticed some common mistakes such as no proper structure on the ads and not isolating the variables, which made it hard to understand what was actually being tested, especially when it came to audience testing, so we swiftly corrected this to bring clarity when analysing the data.
We then implemented the correct pixel tracking, taking into account the IOS 14 update and implemented proper campaign structure on all parts of the sales funnel so we could capitalize on every opportunity.
Splitting Traffic by Temperature Level
We began by splitting the facebook ad campaigns according to their traffic temperature level, we then targeted the best performing interests according to our analysis and finally created Lookalike Audience campaigns based on the results of the previous campaigns.
Thank to our creatives team we also created some amazing scroll stopping videos for our client.
Educating the Customers
The main priority with the creatives was to educate the customer, since this product is not a product that we see everyday we focused on getting a few user generated videos that would display exactly how this product worked and what people could get out of it.
Retargeting Tactics
On the retargeting campaigns we focused on touching on one of the main sales triggers that we humans have – social proof. Since people here either saw the video up to 75% or clicked on our ad we would then bombard them with social proof displaying the huge customer base our client has, how much people love their product and how this is changing their lives.
And with this quickly we found some winning audiences that we started to scale aggressively as we saw positive signs (over 1.5 ROAS on TOF) We were generating a positive return on the first purchase knowing that the client would return 2 or 3 times more!
Capitalizing on Black Friday Sales
However we didn’t stop there during Black Friday we decided to give it our best shot with this client and focused on creating creatives that would simply display the promo (30% off) that were super attention grabbing so people would just click right away, usually on Black Friday there is no need to do so much selling as people are already with a buying mindset. This worked out insanely well for us going over a 2.5 ROAS on most of our cold traffic campaigns and our retargeting campaigns over a 4 ROAS with 20.000$ of ad spend.
After the insane success of Black Friday we kept on scaling, always searching for new audiences and new split tests we could do to have even better performing campaigns.
Nailing Down the Best Ads
We’ve ended up testing a lot of different creatives but the ultimate best performers for this client were carousels that would teach people how the product worked and user generated content (UGC) that would showcase users testing their product and showing the results they got. These ads had CTR’s of over 2.1%
Vivoo is now hitting all of their targets and scaling aggressively.
What you can learn from this Case Study
- Generally, it is better to invest in high quality creatives, either by hiring a videographer or sending the product to influencers so they can make user generated content, before increasing the ad spend.
- The potential to scale ad spend while being profitable is way higher when using high quality creatives.
- Lookalike audiences are not the end-all-be-all of Facebook Ads. Understanding customer avatar and using Interest-based targeting is also a very profitable approach, and it allows you to cover all bases.
- Sales and Special promotions, like Black Friday and Cyber Monday, can be amazing for sales but also for brands to capitalize on getting more data on their facebook pixel and ad account.
- For new products that are not self-explanatory, it is important to have ads that explain what it is, how to use it and why it is beneficial.
- Running special offers, such as a 20% off coupon code, on the BOF(bottom of the funnel) helps to convert customers that are on the fence.
- If you have a complex product your website should explain thoroughly and clearly all the aspects about it.
- It is very important for subscription-based businesses to know the average LTV(lifetime value) of their customers, since sometimes acquiring a customer with a ROAS(return on ad spend) of 1 can actually mean a ROAS of 4 in the span of a few months, in the case of returning customers.
