The shop revenue from Oct. 20th until Dec. 31st which equal $1,081,580.62 at the time of writing.
No matter if you currently make 5k, 30k, 100k or already mid 6-figures a month. This case study is designed to take your eCommerce brand to the next level.
You're an eCom owner and you're struggling with your ads even though your product is of high quality and receiving great feedback? If you're tired of listening to hysterical "gurus" and agencies that say things like "iOS14 ruined everything and you should shift your budget to other channels" or "we can't track 100% accurately that's why we can't scale" then you're at the right place. The truth is.. it is absolutely possible to scale post iOS14 and this case study is the living proof.
DISCLAIMER: The big numbers might trigger something like "This can't be real?!" or "They spent 30k a day?? This is what we make in a month. We first need to make more profit with what we spend and then get to 40k, 50k step by step. This is just too far away for us and might not be valuable to read."
Our goal here is not to brag with big numbers. We've been where you are right now with multiple brands and know that every brand is unique and comes with unique challenges.
While we’ve been able to scale this business to a million a month within 30 days and helped many others achieve a 2x on their business within 1-2 months.
The common denominator in all of those cases is that we used the same exact system (our LVRG eCom Growth Framework) outlined in the following paragraphs in all cases. Wether a store's goal is to get from 30k to 100k or from 150k to 450k.
No matter where you are on your journey, after you have finished reading this case study nothing will ever be the same!
Sharpen your pencil and set aside a piece of paper. 100% value. No B.S.
Without further ado, let's jump right in...
We at LVRG are a team of determined e-commerce growth hackers. We joined forces to enable a few hand-picked e-commerces to grow with us in ways they never dreamed possible. We were also fed up with agencies that deliver mediocre results, take on way too many clients and don't go the extra mile.
We therefore only work with a maximum of 10 partners at a time, so that we can go into detail and deliver world-class results.
Our mindset with every client that we decide to work with is to take her / him to the next level by achieving maximum growth while aligning with the clients business goals.
Recently we were able to redefine how hyper-scaling in eCommerce should look like by scaling an eCommerce DTC brand from low 5-figures a month to 7-figures a month within 4 weeks.
It was a stress test for our LVRG eCom Growth Framework, but as real partners the client and us were able to pull this massive growth case off.
While this case study shows how we were able to achieve this 31x in this particular case, these strategies can be applied to all eCommerce brands.
"What doesn't work when it's small, won't work when it's big."
This motto gives focus anytime we're optimizing for hyper-growth. In order to scale budgets fast and profitably, it is essential to prepare your funnel so that you reduce the risk of loosing money while scaling. That's one of the building blocks of our LVRG eCom Growth Framework.
One of the first things we do in every store is to increase the average order value. It is one of the most overlooked, yet most effective optimizations that will enable you to scale more profitably.
You might ask "But what about the conversion rate?". Of course the conversion rate is very important and depending on what the client has already done in terms of CRO we do a basic CRO on the product page.
The metric that brings both of them together is the revenue per session (rpv = AOV * CR)
Let's assume two scenarios:
Assuming that in both scenarios it cost us the same to acquire one click (1€), what scenario would outperform the other when scaling?
Apparently the second scenario is winning.
The reason why we focus on AOV first is that it's mostly pretty easy and quick to optimize while CRO with real A/B-Testing is more effort and needs sufficient data points to be significant.
Especially with lower AOV products below 60€ it is essential to think of ways to increase the revenue per visit.
To optimize the AOV we look at every single step that a customer is taking from click on the ad to the confirmed purchase and evaluate where we can position up- and cross-sells.
In this case it made sense to give people an incentive to buy more of the same product at a discount. Therefore we added two more bundles, the bigger the bundle, the bigger the discount.
We used the app OneClickUpSell by Zipify to up-sell. When someone proceeds to the checkout an up- / cross-sell pop-up is shown as well as right after someone purchased a product.
Through presenting other taste variants of the main product we managed to convert around 4-5% more people.
All of the above gives us more room to test and scale potential winning ads while being profitable.
This one is highly under-rated... Use it to further understand why people are purchasing your products. Are they buying it for themselves or as a gift? If so, whom are they gifting it to? Don't you think you could come up with more specific angles and messages if you would know more about this? That ties into the next step...
Then book your free eCommerce audit call now, where we'll show you how we would increase the AOV in your specific case.
The truth is...
"You're only one creative away from scaling to the moon and back!"
The main challenge then is to find (or how we say "hunt for") that one winning creative.
The basic reason why our LVRG Framework works so good, no matter if we’re trying to scale to a million like in this case or we want to 3x a 30k per month brand is our in-depth research process. Most agencies avoid this step and rather jump straight to the ads manager to "throw some 50 creatives in and see what sticks" (definitely a red flag!).
"Without knowing your target audience and your product inside out, you're risking to loose a lot of money when running ads."
So before our creative team cuts or edits any creatives or our media buyers jump to the ads manager we always start with a detailed research.
Research about the target audiences, the product and especially the benefit that the target audiences see in the product.
We want to deeply understand how our future customers think and feel to communicate through the voice of the customers in our ads.
We do this by scraping tons of reviews, reading in forums, extracting facebook & instagram comments, using the products ourself and conducting customer interviews. The process would be an article by itself, but you get the idea..
After that process we've identified angles which we then test with simple creatives to see what angle creates the most resonance and is scaleable.
Instead of going out and producing hundreds of creatives in different formats, with different content types, UGC, etc. which is a huge investment of time, energy and money usually, we start with very simple image creatives that communicate the angle in a very straight forward way.
When we see that an angle has potential and hits our targets even with a very, very simple image creative, we then make the next step by creating variations of this ad and communicating the same message in video.
It's all about reducing complexity at the beginning to speed up decision making.
Our winning creative had more than 4.220 likes, 5.400 comments and over 400 shares at the end. A good amount of comments were from the client's support team. We saw early on that there was high interaction and people were tagging and commenting so we instructed the client's support to answer within no more than 2 minutes and also filter out bad or false comments. We saw a significant increase in performance for creatives that were actively managed. If you see people interacting a lot early on, leverage this to the full extend.
Then book your free eCommerce audit call now, where we'll show you how we would find winning creatives in your specific case.
At this point we have an optimized sales process, multiple creatives in multiple angles so next step would be to throw them all in the ads manager and see what sticks, right?
Yes and no. Yes because we want to test the angles on a limited budget in order to be able to evaluate if it makes sense to increase the budget.
No, because we need to have trustworthy data on which we base our decisions. There are mainly two things that we want to avoid:
So, why don't we just look at the ROAS in the ads manager?
To make it short: Because it's wrong more often than not. After iOS14 we've seen over multiple accounts that the ROAS and the sales tracked by Facebook hugely differ from what we see in the shop analytics. That's why we don't look at the data in the ads manager any longer.
The whole scaling that you see in this case study was done without even considering looking at the data tracked by the pixel or the cAPI. Pretty crazy, right?
So what did we use instead you may ask...
We mostly used UTM parameters that we dynamically attached to the links in the ads. This way we could retrace where the sales have come from in our shop backend (Shopify in this case).
To be fair, it's not possible to track 100%, but 60-70% of the sales as some of the UTM parameters seem to get lost.
We've actually let go of the idea that we have to track 100% in order to be able to scale. We're fine with solid estimates and rather use the time and effort to understand where the 10% of not attributed sales come from to look for opportunities to scale smarter.
Important: We always optimize for CPA, not ROAS. Especially in a small data set, you could make poor decisions. Two scenarios to illustrate that:
Which ad is the winner? Clearly number two. Those "one-time-big-sales" can lead us on the wrong path early so be cautious of that.
Apart from the UTM tracking we always track the MER by hour(marketing efficiency ratio). The MER is the total revenue divided by the total spend across all channels. As we've defined our target MER (more on that in the next section) we know at any time how we perform overall.
Then book your free eCommerce audit call now, where we'll show you our tracking setup and how you can implement it as well.
"Before you start the game, you have to know exactly when you're winning and when you're not."
Most people skip this important step and rely on rough estimates. In order to determine if an ad, an ad set, a campaign and all marketing efforts over all channels bring the results we want them to bring we need clear target metrics!
First we calculated the margin of the main product that we were advertising. From that we knew exactly where the break-even CPA was. As the goal was not just to break-even, we added a little more to that for our target CPA in order to ensure a certain profit margin.
We used OrderMetrics to see how the overall margin was behaving and how it was linked to the MER. That way we knew at what MER we were hitting our target margin. As this is an important optimization metric, we tracked it in a separate sheet to see the hourly changes in MER.
Let's get to the core part of this case study and our LVRG eCom Growth Framework...
"Stop acting emotionally when making optimization decisions."
One of our biggest learnings was to decide upon data we trust, define rules based on this data and execute according to those rules.
The typical "the CPA is way to high, but meehh maybe if there will be one more sale, we'd keep it" will only create inconsistency and unnecessarily bloat up the decision making process.
We rather decide once upon rules and stick with them until we come up with better versions of those rules than deciding every single optimization. This costs a lot of time and energy that should be used on other things such as optimizing creatives.
A simplified version of our rules:
The macro KPI was the MER of course.
We did this optimization every 2-3 hours, every day in order to always stay on top of the game.
Every store has its peak hours where most of the sales are coming in and the revenue per session peaks. What we wanted to do is to spend more of our daily budget during those hours and essentially shift budget from weak hours to strong hours.
First we identified the peak hours and then integrated those findings in our optimization. An example:
Let's say your target MER is 1.8 and the peak time in your store is from 7 - 9 p.m. On 5.30 p.m. today you see that your MER is at 3.5. What would you do now? We would take a look at the campaigns that performed best and scale the budgets aggressively in order to capitalize on the top hours. That's exactly what we did in this case.
If possible frame your product to the occasion that people care about at the moment. In this case it was christmas so we tested variations of the winning message where we highlighted that it will be the perfect christmas present.
Then book your free eCommerce audit call now, where we'll show you our unique scaling techniques.
The heavy lifting was obviously done through Facebook Ads, but at the same time we've seen an increase in sales on our brand name search campaigns. This is a natural behavior.. people see an ad and then go straight to Google to look for reviews for example.
But sometimes they are not only looking for the brand name, but rather search for the product itself. So let's say your product is a red baseball bat. When you're scaling hard on Facebook chances are high that the searches for "red baseball bat", "baseball bat red", etc. are going up.
In this case we directly started search ads on the product name and saw 5-10x returns depending on the day.
If your product is allowed in Google Retargeting, you should definitely use it. In this case it was not possible otherwise we would have had even more higher returns.
There are no shortcuts in life. Don't skip the important homework, meaning:
We've only covered about a handful of insights of what was going on in the back while scaling to over $30k daily ad spend. The media buying part is crucial, because if you don't have the right expertise there you are set up to loose a lot of money while scaling and then may be forced to stop even though your product was great.
Then book your free eCommerce audit call now, where we'll walk you through our LVRG eCom Growth Framework and see if there's a fit.
Important: As you've read in the introduction.. we are a highly specialized eCom Growth-Hacking agency and service maximum 10 long-term partners at the same time in order to provide world-class service. That's why we are very selective with whom we decide to work with and see it as our fair duty to reject applications where we don't see a culture fit and the potential to scale to the moon and back together. Also we could be full at the time of your application. If you're a potential fit, we'll still do a strategy session with you and update you once we have free slots available.
This is NOT a pushy sales call, we never did that and don't need it as we're grateful to have more than enough opportunities. Our goal is to share how we would proceed if we were in your shoes and if we see a fit and have a free slot (and only then) we can talk about how we could work together. Click the button above now to apply for your free eCom Scaling Audit.