March 25, 2024 • 43 mins
Prepare to have your mind blown, as e-commerce whiz Josh Coffy from E-commerce Alley joins us to reveal the secrets behind his clients' staggering $70 million sales figures, all thanks to Facebook ads and email marketing.
If you're a subscription box entrepreneur looking to sharpen your ad strategy, this episode is your golden ticket. We're not just discussing the ins and outs of Facebook ads; we're diving into the compelling world of customer acquisition, strategic ad placements, and the nuances that turn good campaigns into great ones - like why that candid iPhone photo might just be your ad's best friend.
Josh brings his years of expertise to the table, offering up a mix of foundational strategies (step-by-step) and advanced tactics that cater to the unique challenges of subscription box businesses, including understanding the pivotal role of lifetime customer value.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
So you want to launch a subscription box and don't
know where to start?
Girl, you are in the rightplace.
I'm Julie Ball and I'm ReneeGonzalez, your host here at
Subscription Box Basics, apodcast for new and aspiring
subscription box entrepreneurswanting to avoid overwhelm.
So grab a coffee, some pen andpaper and let's have some fun.
(00:21):
Hey everybody, and welcome backto Subscription Box Basics.
I'm super excited today for theguest I'm about to introduce.
Just get your pen and paperready, because today we're
talking about Facebook ads.
Whether you love them or youhate them, or you're curious
about them, this is the episodefor you.
So today I have my friend, joshCoffey on the podcast.
(00:45):
He is the founder of thee-commerce alley and has been
helping e-commerce clientsgenerate listen to this more
than $70 million in salesthrough Facebook ads and email
marketing.
Now, if that doesn't make youlean in, I don't know what does.
Josh hosts his own podcastcalled the e-commerce alley, and
I can tell you from experiencethat this guy obsesses over new
(01:09):
customer acquisition andbuilding sustainable businesses.
Josh, welcome to the podcast.
Speaker 2 (01:16):
I'm super excited because, julie, I had the
privilege, the honor, ofinterviewing you and Renee on my
podcast.
I don't remember where that was, it was like six months ago,
maybe something like that.
Yeah, fantastic.
I even took principles from itand I started teaching in our
coaching program.
Sorry I stole it, but I gaveyou credit on gamifying your box
and gamifying your customerjourney.
(01:36):
I'm super excited and justbefore this I got to tell I told
you this is the second guestpodcast I've ever been on.
I'm like 120 episodes into mine.
All I do is interview and stuffand I've only ever been on the
Rainmaker podcast.
That's the only other podcastI've been on with Steven and his
wife, but she wasn't on theepisode.
Chelsea Steven and ChelseaChelsea.
(01:57):
Yes.
Speaker 1 (01:58):
Did you know I'm in that mastermind.
Speaker 2 (02:01):
I did not know, but I'm learning that everyone in
this industry is all connectedbecause we have a lot of people
that are coaches there, likeCassie Ford and a lot of other
people who are also in our maxprofits mentorship program.
Speaker 1 (02:13):
Oh my gosh, look, we're learning new things about
each other on the fly.
Yes, I started dabbling inAmazon products probably maybe
last summer or so.
I just love different businessmodels and you know that I have
a place in my heart forproduct-based businesses.
I love that story.
Without further ado, let's diveinto the topic.
(02:35):
We're talking about Facebookads, the reason.
You guys, as you're listening,you're thinking okay, well,
Julie's been in business for along time, Can't she teach us
about it?
No, this is not one of thespots.
That is my zone of genius.
I have always looked to othersto help me learn this, to help
coach my students through it,because this is an ever-changing
(02:58):
landscape.
This is one that I just while Iwas coaching subscription boxes
, I couldn't keep up withFacebook ads as well.
That's why I brought someonelike Josh on board.
Just tell us, why do you thinkFacebook ads versus any other
platform that's out there?
Speaker 2 (03:17):
For a lot of reasons.
Number one it's what I teach,and do you know I'm biased.
Outside of that, the reason weare so heavy like all chips in
on Facebook is we've gone inspots.
We've been in business for 10years.
As of October, I remember, likesix, seven years ago, we had
this moment where I had maxedout our lines of credit.
(03:40):
I had maxed out our creditcards.
We were in loads of debt.
We were overstaffed at ouragency and in our business.
We looked at what were thethings that produced the most
revenue for us, what actuallygot us customers very regularly,
what took the least amount ofresource to do that, Either time
and money.
When we looked at everything,there were two things that
(04:00):
produced 90% of the revenue.
The first one was Facebook ads50% to 60% of revenue that we
did, as well as the clients thatwe managed did.
Then the other 20% to 30% ofrevenue came from email.
It was this moment in timewhere I'm like, hey, we have to
stop doing all these things thatare like take a lot of resource
and time.
That were good at the beginning, which you should do, but at a
(04:22):
certain point you have to decideif I want to really start
having predictability in mybusiness unless, like peaks and
valleys, you need the stabilitywith orders coming in every day.
We decided to go all in onFacebook and email.
Those are the two things thatwe believe heavily, Not that
social is not important and notthat Etsy or Marketplaces aren't
important.
That's just what our experiencehas been, why Facebook is
(04:45):
interesting If you look at.
Have you heard of like TrippleWhale, Hiro's North Beam?
Have you heard any of thosetools before?
Speaker 1 (04:52):
I've heard of Hiro's.
Speaker 2 (04:55):
If anyone listening is like what the heck are these
weird words that they're saying?
There are tools out there,called attribution tools, that
allow you to run ads and trackout everything that happens.
Well, north Beam and TrippleWhale they basically they manage
billions of dollars and spendcollectively.
And they came out with theirsoftware and said hey, based on
all of the ad platforms thatdirect to consumer e-commerce
(05:16):
businesses are spending on, getthis, 70% is going to meta of
spend of all brands in theirplatforms, 24% is going to
Google and all the remainingentire 6% is going to everything
else TikTok, snapchat, x it'shard to say X now.
(05:36):
It's still Twitter to me andeverything else, and so if you
look at where businesses thatare really thriving are spending
, it's actually on meta.
70% of direct to consumerbrands are spending 70% of their
budgets on meta.
So to me, that's why it's soimportant is that if you look
where the money is going, itusually shows you in the market
(05:59):
where the value is.
Speaker 1 (06:00):
Here come in right from the data perspective, and I
think it's smart becausethere's so many businesses that
have the funding and thepersonnel to actually test all
that stuff and if it wasn'tworking, they wouldn't be
spending all their money there.
So let's take a step back.
I forgot to even say give us alittle bit about your background
(06:22):
.
I know who you are, I know whatyou do, but I know some of the
listeners are going to bemeeting you for the first time.
Who is this Facebook ads guy?
Where do you come from?
Speaker 2 (06:32):
So I came from this little town in the middle of
nowhere, ohio, where even thecattle get to vote here.
So we still live here, we'reheadquartered here, but we do
have some theme elsewhere.
But yeah, no, 10 years ago gotinto the online marketing.
I was big on social media atthe time, leaning heavily to
Twitter and things like that,and as the market evolved and
(06:52):
where I saw a lot of the value,we decided to lean into Facebook
back in like 2014, 2015.
So we're going on eight yearsof only being all in on Facebook
and then we stacked an emailthere and so what we kind of do
just the e-commerce alley is awhole.
We rebranded two years ago, sothe e-commerce alley just kind
of like was eight years and thentwo years were the e-commerce
(07:14):
alley from our previous agency,flight Media, and basically we
went all in and on Facebook adsand what we do is we basically
teach e-commerce businesses howto leverage Facebook ads to
create new customer flow everysingle day, because one of the
greatest problems that moste-commerce businesses have I'm
sure a lot of people listeningis inconsistent sales.
(07:34):
And when you have inconsistentsales and then you start to
struggle on the profit front andwhen you have a little profit,
then you feel really, reallyburned out and you feel really
stressed out, and so if we cancreate predictable sales and
reliable revenue, then whathappens is your fixed costs are
already covered and it starts togrow your revenue, you're more
profit and then you just youstart to make this momentum and
(07:55):
fuel like energy, and so that'swhat we basically teach and we
have a cool Facebook group about6,000 of us there and we live
stream in the studio here everyweek and we like break down
different elements of Facebookand budgeting and all kind of
budgeting on ads not regularbudgeting stuff like that.
Speaker 1 (08:10):
Right, and y'all are not a stranger to the
subscription box world.
The listeners here are all inthe subscription box industry
and I know that you've workedwith a lot of subscription box
business owners and I thinkthat's so cool, because so often
when we get our own Facebookads or when people target us,
it's always about sellingdigital assets, selling courses
(08:35):
selling this or that.
And it's such a different worldthan selling a product via a
Facebook ad.
So that's one thing I reallyappreciate about you guys is
that you can actually speak withexperience of product based
businesses in Facebook ads.
Speaker 2 (08:51):
Well, and you're so right, it's so different.
So like I am in the digital,like I sell digital stuff, like
it's great.
But you know what?
Digital people don't have costsof good soul.
Digital people don't have todeal with returns, they don't
have to deal with inventoryforecasting and pre-planning
what the next.
And then you look atsubscription boxes.
Subscription boxes are a wholedifferent.
(09:12):
I even put subscription box, soit's like digital.
And then there are what I callmargin based products, products
that they can make.
They make all their money onthe front end.
And then you have LTV basedproducts, which are subscription
boxes, food and beverage,things that have like residual
revenue from them, sosubscription boxes I even put in
a other category from otherphysical products.
(09:33):
So I'm like digital physicalsubscription box because it
behaves so different.
And if you don't understand themath and the numbers of like
lifetime value and how powerfulthat is, then you're usually
because we work.
But we work with a good handfulof them and I got a text from
one yesterday.
I met him one well less than ayear ago, last April, and he
(09:57):
came in.
I met him.
He was doing about 2,500,$2,500 a month and he texted me
yesterday and he said we're nowa seven figure brand as of this.
And the thing is, as long asyou know your math and you do
the right stuff and you'reconsistent, it pays off and you
have this wonderful thing calledlifetime value, that like high
lifetime value that most otherbusinesses don't have.
(10:19):
And so, mike, he just keptscaling and scaling and scaling
and like slow and steady.
So subscription box.
My biggest piece of advice foranyone listening is like don't
look at all these big brands,don't look at BattleBox and Pip
Sticks and look at all these bigcompanies out there that are
really big.
They got there over a very longperiod of time and for you, the
biggest asset you have isconsistency and compound of time
(10:42):
because you have this residualthat kicks in.
So, yeah, I love thissubscription box world.
In our coaching program I hadto break out a separate little
group of them because they arethe minority of the entire
program of just subscription box, because it's different
language, different numbers youhave to look at when you're
making advertising and budgetingdecisions and your strategy is
(11:03):
just generally a little bitdifferent than other people.
Speaker 1 (11:06):
Yeah, okay, well, let's dive a little bit into
that.
So a lot of times people willcome to me and say okay, can I
use ads for launch?
I need to grow my email list,can I use ads to acquire new
customers?
So all these things.
So where do you even think thatis in the subscription box
world as it pertains to ads?
How do you get started?
Where do you get started?
Speaker 2 (11:29):
So they're gonna be the basics, for sure, of like,
how do I set up my businessmanager and how do I set up an
ads manager and how does thehierarchy of like campaign ads
at ad?
Like what does that look like?
So they're gonna be the basicsof that, and if I was like
starting as zero, I'm just gonnago to YouTube and just search
that.
You can see a breakdown of that, very, very easily defined,
(11:50):
just the general basics of howFacebook works.
Once you've got to have thegeneral, I think that you have
to evaluate what's the objectivebased on where I'm at right now
.
So, for example, like I knowyou guys, you guys are big on
like building a pre-launch,pre-launch list, right, you guys
build a list.
How do you guys build a listright now?
Like what are some of the keystrategies to use?
Speaker 1 (12:10):
Oh, giveaways for sure are one of the things that
we recommend, because that wayyou can have a prize that is
very desirable to your targetaudience.
You're not just giving awayAmazon gift cards, you're giving
away something very specific.
We like to recommend thesoftware, king Sumo, because
it's one of those ones that haslike the viral capability.
So like share for more entriesor go follow us on Instagram for
(12:34):
more entries.
So I love that in the verybeginning stages and I've used
it all along the way like sixyears into my box I was still
using that King Sumo giveawaysoftware.
But what I like about it at thebeginning is, at the same time
as you're gathering emailaddresses for your launch, you
can also grow your social mediabecause you're saying get two
(12:56):
extra points for following us onInstagram or go watch this
video I created for another fivepoints.
Go visit my landing page forfive points.
So you're kind of hitting themat multiple points and getting
them really excited.
But the main point of it for usis to grow that email list so
you have someone to launch to.
Speaker 2 (13:17):
Okay, sweet.
So we're gonna build let's usethat as strategy number what
based on where you're at?
I'm in pre-launch and I'm gonnabuild on your strategy, because
I'm familiar with this, by theway, and we have a lot of people
that run giveaways on anongoing basis to grow their list
tremendously.
I'm gonna build on that, andthen what I wanna talk about is
like that's pre-launch, right,but then what do you do once you
(13:38):
launch?
So I think it's kind of like twodifferent buckets.
Some of you are like I'mpre-launch, how do I amplify
this?
And I have like 10,000 peopleon my list, or how do I amplify
this?
I already have launched and Iwanna say, how do I get more
people buying my box right now?
Two different categories, twodifferent objectives.
So one is lead gen and one ispurchase conversion objective.
(13:59):
If we're looking at Facebook, soif you're using King Sumo,
there are two others.
I'll just drop them out there.
King Sumo I know who createdthat Noah Kagan, I think it's a.
He owns King Sumo.
I've never used King Sumo'sgiveaway tool, but I have used
gleamio and I have used Upviralwith Wilco, with the owner Wilco
(14:20):
.
Him and I are friends.
So Upviral, we used to use thathuge fan of it.
We used to build this out.
Fun fact, we used to actuallydo what we call giveaway
launches for clients and so weused to build this huge giveaway
and then we would build theiremail list and then we would
sell to the email list on thebackend.
So I'm familiar with the processyou're talking through.
I just haven't done it in along time.
So here's what I would do.
(14:42):
So if that's your objective,then what I'm gonna do is build
out a Facebook lead gen campaignand it's gonna be very, very
simple.
We're just gonna drive trafficto where you.
You have to figure out whereyou're driving traffic.
I'm gonna drive it to whereyou're already pushing people.
So I assume you have organic,you have your friends.
If I'm just getting started, isthat the typical scenario?
(15:03):
Like we're just getting started?
Yes, okay, pre-launch friends,family, organic audiences that I
have.
So this is like warm audiences.
Now I wanna say, can I growthis from a cold audience?
People that don't know me standup.
Speaker 1 (15:16):
Yes, that's such a challenge.
It's like getting beyond yourown network.
Speaker 2 (15:21):
Absolutely.
And I think part of it, too,comes to like a limiting belief
that like people aren't gonnawant it, or there's like this
deep fear down that like, hey, Idon't wanna run ads because
it's going to these people thatdon't know who I am, and deep
down we're afraid of failing,we're afraid of it not working.
And I wanna tell everybodylistening it works, it works, we
(15:42):
do that.
I'm in 20 to 30 ad accountsevery single week.
I get stories every day.
I got an email this morning froma guy that I mean I'm not gonna
go into detail on the emails,but I get emails all the time of
people that never got intoFacebook ads.
They were so nervous they tookthe first steps, they started
figuring it out.
The first is the worst, is whatwe like to say, but then over
time you get these skills andyou get better.
Just like the first time, youprobably plan your month for a
(16:05):
box, or plan the quarter youlike over forecast, the amount
of product that you need, or youunder forecast.
We just had a client do thatand then they sold out of their
boxes and they're like, oh, whatdo I do while I'm waiting for
the next one?
And so the first is the worst,same thing with Facebook ads.
So all of that said, you can doit.
I mean, here's what I'm gonnado.
(16:25):
I'm gonna centralize all of mytraffic.
I'm gonna send to that pagethat you build for the giveaway.
Do you usually just?
This is my curiosity Do youusually embed that on your
website and send them there?
You?
Speaker 1 (16:37):
can.
It depends on what websiteplatform you're using, but
Kingsumo does give you a landingpage URL that you can share.
Now, it's not your domain, so Idon't know how that impacts
Facebook ads, but you can embedit on a WordPress page, for
example.
Speaker 2 (16:54):
So Okay, so if you were doing that, it would depend
on the integration of Kingsumo.
Sometimes you could add yourpixel in there.
Yeah, is it a lot?
I don't know if it allows youto do that, I'd have to double
check.
I would bet that they do, gleamdoes, upviral does, I'm sure
they do.
So here's what would happen is,whether it's your website or
not and it's a landing page,what you would do is create a
(17:15):
Facebook ad campaign and I wouldcreate the objective of leads
and, as long as you can justconnect your pixel from Facebook
after you set up your accountto Kingsumo, you would just
create a series of ads, and I'mnot gonna get into like ad
testing and stuff like that.
I would just say the basics are.
This is I would create acampaign and I would create an
(17:37):
ad set in the campaign and I'llshare it.
Now, this is a little nerdy, butwhen it comes to ads, a lot of
people think that, like who youtarget is like the critical
component of your success.
Like I need to select thisinterest, or I need to build
this lookalike audience, or Ineed to do someone who is
interested in crafts but also isa mom but also has kids between
(17:59):
ages, this and this, and wethink we have to get caught.
We get caught up in like who weneed to go after.
But Facebook's machine learningand AI is so, so good that
right now we, for most accounts,we're doing what's called broad
meaning there's no targeting atall, like zero targeting, even
for the most random, preciseniche.
As you can imagine, mike theguy I talked about, his
(18:21):
subscription box is a T, it'scalled project life and it's a
fertility T, so he's going broad.
Facebook is very good at findingwomen who have gone through
whether it's IVF or IUI, andthey've had the, they've been
struggling with infertility andhe helps them and Facebook just
finds them.
So what I would do is set up acampaign in the ad set where you
(18:42):
have to choose your targeting.
You choose no targeting.
If there's a gender that you goafter, great, choose the gender
and then, within the campaign,we would add three ads.
Without getting into supernerdy stuff about testing
frameworks and stuff, I wouldjust come with the best three
ads that you can.
Three images, by the way.
I see images do better thanvideo in sub box world.
I'll say that For the most part, I see images do better.
Speaker 1 (19:04):
Interesting.
Speaker 2 (19:06):
That is the majority of them.
I'd probably say it's like a 70, 30 split 30%.
Speaker 1 (19:12):
Any specific type of image Like an unboxing or a
flatline, oh yes yes, yes, okay.
Speaker 2 (19:17):
So what we generally see do well is really simple.
Like you can just open aMacanva and show the box with
everything in it Crazy huh.
It's a crazy concept.
What's inside the box?
Here's what some people getreally wrong is they start by
showing that they love thebranding of the box.
You think it's such a greatpackaging and the colors and the
(19:40):
brand name on it and all ofthat, and we love it.
And then we, we put the box.
Nobody knows that it's a likeif you look at it straight on,
nobody knows it's a box.
It could look like a button.
They don't know it's in the box.
And so, like, really make itknown that you could have the
box like open up with everythingcoming out.
Or you could just pulleverything out and have a flat
lay of the shot of the productin it without the box, even in
(20:02):
the picture, because it comes ina box.
But do people care that itcomes in a box?
Not really.
They usually care about how thestuff in it makes them feel or
how they feel connected theirkids or their animals, you know,
whatever it is, that's whathe's doing.
The best right now is.
That's so interesting productjust laid out.
I will say the ones that dovideo really well are ones where
(20:23):
maybe your, your box is alittle harder to understand.
So, like, if I look at likeNicole, we work with Nicole from
G Pig box.
G Pig is like guinea pig, soshe does stuff for like guinea
pigs and so to like just lay outall the product, that's pretty
easy to understand.
Okay, guinea pig, guinea pigproduct, show little guinea pig
on the image.
But then you look at Mike whosells fertility tea.
(20:45):
That, by the way, is $450 amonth subscription.
It's not a cheap subscription.
Then we move the needle with animage and convince people of
what it is and the value of it,that it's worth $449 a month.
From an image we learned thatwe couldn't, so in that case
video made more sense.
So I would say if you have aproduct that's like hard to
understand, then video willprobably be worth landing into.
(21:08):
But I would say the majority ofsub boxes again, the majority,
the 70%, 80% that you could justdo an image and images are
great.
So I would have three imageswith three different headlines,
the bet in three differentprimary texts, and here's the
best way.
I would say this If you were totake all of your chips and
you're like playing poker.
I don't play poker, I don'teven know how it works, but if I
was and I had a big pile ofchips and I was to just take all
(21:32):
my chips and put them all in onthese three headlines and these
three primary texts with thosethree images, then that would be
Mike all in best.
So what that means is, with thebest capabilities, with the
best, your best ability to writead copy, which the first is the
worst.
The first headline we write isprobably the worst headline
because we don't know anythingyet.
So take the best knowledge thatyou have right now and write
(21:54):
three headlines, write threeprimary texts and then just put
them with the images however yousee fit, and that would be the
campaign.
Drive them straight to thatgiveaway landing page.
Now I would say typical resultsI see in giveaways is easily
under a dollar per lead,depending on the product.
So it's like a mass consumerproduct.
(22:17):
That's like, let's say, dogs,like we've done a dog giveaway
before.
So if you have like dog petproducts, pet products are a
mass consumer market.
So your cost per lead might be20 to 30 cents.
Someone who's like we havesomeone else who does giveaways
all the time.
He sells high end handmadeguitar, electric guitar cables,
so a little bit different.
(22:37):
So for him it's like 75 cents,80 cents, so it's a little bit
more, but you should be under adollar per lead.
So if you're like mass market,I would expect even less as you
spend, launch the ads, commit toan amount and then sit for five
days, let them optimize forfive days and then, usually by
five days in it'll stabilize ata cost per lead and you'll be
(22:58):
able to see what that looks like.
Speaker 1 (22:59):
So again Okay, so do you put like a campaign budget
or a daily budget?
Speaker 2 (23:04):
A daily budget Daily budget Okay yeah.
So you could set.
What Julie's talking about hereis what's called lifetime
budget.
So, like you could, you couldchoose a starting, an end date
and say I want to spend thisamount in this window of time.
You can do that.
I would just say that we seedaily budget do pretty well and
then, if you want to, you couldalways just just do the
calculations of how long youwant to run it for and then just
(23:25):
have an end.
It's the exact same thing.
It's just how Facebook treats.
It is a little bit different.
So we do daily budget for themost part.
Speaker 1 (23:32):
Okay, another question how do you feel about,
in something like this,targeting the country?
So, like most of my studentsonly shipped to to the United
States, so obviously those arethe only customers that are
valuable to them.
So is this a good time to goahead and target to the country?
Speaker 2 (23:52):
Yes, what else would you normally target?
What would you say?
Speaker 1 (23:56):
Well, I think if you didn't, if you didn't exclude
other countries, you know, myconcern would be that you're
going to get a bunch of leadsfrom countries that you can't
ship to.
Speaker 2 (24:06):
Yes, yes, okay.
So I think when I say broad,when I say broad, it's more in
regards.
Only thing you would select isdemographic.
So location, age, gender, thoseare the only things I would
choose.
So do what makes sense for you.
So if you're like us, onlygreat us.
We only sell to women, becausethis is a, you know, a haircare,
(24:26):
makeup product, whatever.
Just go to women and if there'sa certain age range, go ahead
and put the age range.
I will say this most if you'renew, unless your product has to
be sold to like, let's say, boomby Cindy Joseph, is makeup for
women over 50, right?
Unless you're a very precisesituation, I'm going to remove
my bias and I'm just going tolet Facebook choose and I won't
put an age range Unless you havea lot of data to say hey, I
(24:49):
know that this is only myaudience here in this age
bracket.
I'm going to exclude thatbecause you would be surprised
at how easily Facebook oh, goodthere, yeah, very, very good.
Speaker 1 (25:00):
Yeah, all right.
One more question when it comesto imagery Is there a personal,
you know unboxing picture orone that you've done, as that
looks more lifestyle, more likeuser generated content?
Speaker 2 (25:13):
It kind of.
Obviously.
The unfortunate answer is itdepends.
But I would say that use whatyou have like.
Don't go like I think peoplebelieve, because we have seen
all these fancy like Dr Squatchads, we've seen purple mattress
ads or dollar shaped all theselike high production, half
million dollar ads.
Right, we think like we have togo have these professional
(25:34):
things.
So one thing that we specializein is, add to we teach what's
called rapid experimentation andad testing, where we'll go test
like 50 to 100 creatives inless than a week.
So we're like really good atdoing this methodology and I
will say, from testing thousandsand thousands of creatives, the
ones that usually win arethings that are just like taken
on your iPhone because it's sonative to the platform.
(25:54):
It's so natural to the platformwhen you start overlaying text
and banners and fancy thingslike it looks like an ad.
And if it looks like an adusually it did not always, but
oftentimes it deters people fromclicking on it.
So, honestly, if you have theproduct, I'm not going to go
invest a high degree of resourcein getting product photography
(26:15):
done.
I'm going to say, hey, what doI have?
Let's open up my box and let'sput this on a white sheet of
paper, you know, makes it alittle easy to call attention to
what the product is, and let'sjust snap the photo, or let's
take the photo, throw it inCanva, remove the background,
you know, and play with it ifyou have that skill set.
Speaker 1 (26:29):
Yeah, and one thing, quick tip guys.
If you're like, okay, I need totake some photos, I would go to
literally like the DollarGeneral, I'd get some of the
phone board so that it was alittle bit more structured
behind it.
And here's a quick tip lay thebox on the back and then splay
the products out.
Take the picture from straightabove, because it's easier to
(26:52):
make the products look almost ina way where you can see them
better and they're kind ofdisplayed more with more space.
If you have your box sitting uplike normally on your table,
you have to figure out how toprop this, this item, up, how to
make sure this one doesn't flopover.
Just flip it on its backsideand, like, lay it out, layout
(27:14):
all the products, so nothing'sgonna fall over.
It's just an easier way to takethe picture.
Speaker 2 (27:19):
Yeah, I love that.
No, I think that's easy.
And one thing to keep in mindis intent versus intrigue.
So I was on a call yesterdaywith a pretty big supplement
company and we're analyzing alltheir ads and as we're looking
at them, she's like well, whichone of these do you think is
(27:39):
gonna resonate the most?
And they had two differentcreatives she's like and break
down why you think so?
And one creative was asupplement it's called Bloom, by
the way, and this is asupplement of the product and it
has like the powder.
And then it has the drink nextto it and it has mangoes in the
background and strawberry, soyou can like kind of smell it or
taste it through the screen,which is great.
And then the other one was thisathletic model who was in her
(28:03):
sports clothing and she washolding the drink, like this,
and there was text over her andshe's like which one do you
think would be better?
I'm like are you running to menand women or just women?
And she's like we're running tomen and women.
I'm like well, the moment youadd a woman with her shirt off
and a sports bra and leggingsand you don't exclude men, what
are they gonna click and it'sgonna skew all of your budget.
(28:24):
So what I say is, like one hasa great degree of intent.
This is the product and there'sno question about it.
One has a great degree ofintrigue and so you're getting a
lot of clicks, but not a wholelot of leads, in this case, or a
whole lot of purchases, if youdo in a purchase campaign.
So when you're doing it, keepthis in mind.
If you have a product that'slike for and I like to give the
(28:44):
extreme of like kids or babiesor animals right, If you have a
little cute puppy on your photo,you're gonna get a lot of
clicks, but it might not bebecause of what your product is
so like.
If you were just wondering withthe photo of a dog and there's,
you don't see the product andknow what it is, they're gonna
click in, thinking it's like avideo of a dog or a blog post on
a dog or whatever that is.
And then they get there andthen there's there's lack of
(29:07):
congruency between the ad andthe landing page.
So, whatever you do, I'm allabout.
I'd rather be highlyintentional where it's like.
This is what it is.
Click here, buy or click here,join the giveaway versus trying
to be like really intriguing andscroll stopping in a way that
like doesn't create a congruentexperience for the person.
So I would just say, in yourphotos, just pay attention to
(29:29):
that.
Yeah, that's great advice Ifthat can skew you from
systematically.
Speaker 1 (29:32):
Okay.
Okay, so you kind of broke downthe objective of leads growing
your giveaway list.
So what are some thoughts on ifyour objective is to convert
new buyers?
Speaker 2 (29:45):
So this is actually the area that we play in them.
This is what we primarily do is.
So there are only twoobjectives you should ever have
lead gen or purchases only twotypes of campaigns.
Facebook has other objectives.
Don't worry about any of them.
None of them matter exceptleads and purchases.
So when you're running a box, Iwould just say there are kind of
a couple of things here.
The first thing is you have tohave a really good offer, and
(30:09):
this comes into knowing yournumbers.
You have to know your numbers.
So if I'm just doing back ofnapkin math here, an offer is
gonna be what will you givesomeone for their first box
purchase, whether it's like afree gift with purchase, or 40%
off your first box, or $10 offyour first box, or whatever that
might be right.
We call them cash cow offers.
(30:30):
You need a good offer to getthem in on day one, but don't
expect to be profitable on dayone, and I know that's not what
anybody here wants to hear.
Nobody wants to hear that, butthat is my mass observation from
doing this for a pretty longtime.
The subscription box world 2017,pre-2021,.
Yeah, you could be running likefour ROAs and it's like happy
(30:51):
as a duck with a french fry.
Like you're good, you know.
Like you're just raking in theprofit on the front end.
The market is more saturatednow but that's not a bad thing.
Like, hey, the subscription boxworld is growing, that's
awesome.
You just have to be moreintelligent with your marketing
and know your numbers better.
And so here's what I would do.
The first thing is I need youneed to calculate your I call it
(31:15):
your 31 and your 61 daylifetime value.
And here's why it's 31.
Because if someone buys a boxtoday, well, in 30 days they
renew.
So technically, if I cancollect, I want to figure out
how much profit do I have in mybox for two in 31 days.
So when it's two months worthof boxes, it's actually only 31
(31:37):
days because they process 30days later, if that makes sense
For most of us.
Some of us are rolling andthere's a little bit different
stuff in there, but ultimately Iwant to figure out how much do
I make in the first two payments, which would be a 31 days, and
then how much do I make in thefirst three payments.
So like, let's say, your box isI'm sure you use round numbers
here $50.
And your cogs in that ship tothem and everything are 50%.
(32:00):
So you have $25 in profit inthe box and within two months,
31 days, that's $50 in profit.
So if I can acquire a customerfor less than 50, then I'm
breaking even in unprofitablewithin two payment cycles.
So I have to float the gap fora little bit.
So if I could acquire them lessthan 50, that'd probably be a
good range to acquire customers,but if I'm acquiring them, I'd
call it like 100.
(32:21):
Well, that's four paymentcycles that I need to be
profitable.
And yes, while some people thatare just sitting on a bucket
load of cash confront the gap init capitalally, in the meantime
, until they're profitable on it, most people can't.
Speaker 1 (32:36):
I can't.
Speaker 2 (32:37):
For me.
If I'm profitable in two tothree cycles, I'm okay with that
.
Most people in our coachingprogram that we do.
We try to get them profitablewithin two.
It's very hard, being flat out.
It's hard to be profitable onday one.
If you can dial it in, awesomegood for you.
That is the minority, but ifyou can be profitable within 31
(32:57):
days, then guess what?
You're pretty close to a creditcard payment cycle, right?
So you only have to front thegap for that one day, plus the
two days of processing beforeyou get to your bank.
So you have a three or four daybuffer that you just have to
float the gap of being a littlebit upside down on the ads, if
that makes sense for that smallduration of time.
So here's what happens.
What most people do, though, isthey say my box is $50 and it's
(33:20):
costing me $50 to acquire acustomer After my cogs.
I'm upside down $25 on thatcustomer in month one, and so
they get in their head andthey're like oh shut them off.
They panic.
I'm running a one return on adspend.
I can't live on that.
Well, guess what?
30 days later you'll be at abreak even.
Or you'll be profitable and soif you know your numbers, you
(33:43):
have the fact that you havelifetime value.
So today won't feel good, butin a month, okay now this feels
good.
In month three, oh, this feelsreally good because I paid from
three months ago and I'm stillcollecting on those customers
and so most people don't knowtheir numbers, I would say, and
they don't know how much theymake in a lifetime on a customer
.
Speaker 1 (34:01):
Or if they're early, or if they're early stage.
They don't have that data yet.
Speaker 2 (34:06):
Yes, well, and you know what's kind of interesting
is.
Here's quick math For anybodyhere listening or watching that
doesn't know theirs.
They're just starting.
Let's use a $50 box as anexample for simplicity here.
What is an average churnerywhen you say in the subscription
?
Speaker 1 (34:21):
box.
So we recommend to keep itunder 10.
So let's say like five would bereally good.
Speaker 2 (34:28):
Okay.
So five is good.
Let's say that at the beginningwe're not that good, let's go
10.
Let's just be 10 here.
Here's how you figure out yourlifetime value.
Back of napkin, you take yourAOV.
So let's just say I'm a $40 box.
Let's change it up $40 boxdivided by churn rate 0.1, right
, that's 10%.
That means your AOV probablycan't see it here is 400, your
(34:51):
lifetime value is $400.
That means the average person.
If you're churning 10%, right,it means they churn after 10
months.
Well, 100% turnover.
So you take your monthly AOV,monthly box, right, divide it by
churn rate and that gives youyour lifetime value.
And if you say, okay, I have50% margin, well, that means I'm
gonna make 200 in profit over10 months.
Okay.
(35:11):
So then we get really nerdy andsay, okay, divide 200 in profit
divided by 10.
It means I make $20 profit perbox per month.
And if your cost-requiredcustomer is $40, well, it takes
two payments cycles, that'sactually 31 days to break even.
If it's $60 to acquire acustomer, it actually takes
three payment cycles, which is61 days.
And so with that in mind, knowyour numbers then you need to
(35:35):
have a really solid offer to getthem in in the first month.
Sometimes you can go without anoffer.
I would say right now, what I'mseeing do pretty well is like
free gift with purchase, so likeif you have something like you
could just throw in for free andit's really light, doesn't
change the shipping doesn't costa whole lot.
Free gift with your first boxis a really good lead-in.
What I see not doing well andI'll share this it's really
(35:56):
common.
I feel like everyone comes into our program that we work with
with first box is one box freewith six or 12 month commitment.
Well, here's the thing ifyou're new and no one's ever
worked with you, who commits tosix or 12 months?
It's very unlikely, and so myrecommendation is to focus on
(36:16):
the month to month.
You might have prepaid options,but focus on that one month,
right, and say, okay, if theyonly went one month, what could
I offer them on?
Maybe 40% off your first box,maybe free gift with purchase,
maybe $10 off your first box,and I'll give you some gold here
.
We saw this do a big uptick forpeople in our world right now,
and that is if you're paying forshipping.
(36:38):
Sometimes you don't even give adeal off.
You know what you should do.
Test this first Don't pay forshipping and just lower your
price by the amount of shipping.
So we had someone who their boxwas 59.
And I said, kimberly, how muchis your shipping?
10 bucks.
I said great, your box is now49.
And your shipping?
You don't pay for shippinganymore.
They do.
They pay the $10.
(36:59):
, that single switch, and nowshe's signing one to two new
boxes a day.
But I literally just flipflopping things like that.
So, like play with your offeronce you know your numbers and
know how long it takes to breakeven.
And then I would just say, likeyou have to, you have to commit,
you have to commit for life,for like a long period of time.
Like to go slow, especially inyour world, in subscription
(37:20):
world, to go slow is to go fastand to go fast is to go slow,
Because if you inject all ofthis cash, you're like, okay, I
have saved up $10,000, you know,for my savings, I want to just
put it all into ads right now.
You're going to throw it all inand you're not going to know it
works yet you don't know youroffer, yet you haven't dialed in
your landing page.
You haven't dialed in.
You know your ads and yourtargeting.
And so go slow and just knowthat it's this constant rise
(37:45):
because with subscription, yourrevenue trails your ad spend.
You acquire them today but yourrevenue will trail the ad spend
over time because it's arecurring subscription and so
you will realize your return ina longer time horizon, which is
it kind of stinks, you know,versus the other people that are
like they're running andthey're like I got a forward
return on ad spend and I wasprofitable on day one, but they
(38:06):
have to fight to get repeatpurchases and you don't.
Speaker 1 (38:09):
Yeah, and I think it's a mindset thing.
I know when I first launched mysubscription box, I worked on a
lot of money mindset because Iknew that I would have to spend
before I would earn, meaninglike I had to buy my product
before those sales would gothrough and that I would be
spending on ads to acquire thenew people.
(38:31):
Yeah, that wouldn't beprofitable from that first month
, but I knew on average how longthey were going to stay.
So, and the other thing too Ithink it's important to say is I
just did an interview with LiamBrennan.
He is co-founder of Busterboxand he talked all about offers.
We had an entire conversationabout offers and you're right,
(38:52):
Like it's so important to havethat.
What's in it for me, factorthat carrot dangling in front of
them to say, okay, enroll now,join now, subscribe now whatever
word you're using and to testit.
You know what works in thespring might not work in the
winter.
Like there's just differentthings.
You got to keep it fresh, yougot to continue testing.
(39:15):
So this has been so interesting.
I'm sure that you have allkinds of templates and stuff,
because I know we've been doingyou call it napkin math.
I love that.
I'm taking notes here and I'msure the listeners are taking
notes, but I know that youprobably have all kinds of
resources and templates.
Will you tell everyone wherethey can find some of that stuff
if they're looking to dive intothis ads world and learn more?
Speaker 2 (39:39):
Yeah, so I'll give you a couple of things.
So like the e-commerce highlypodcast.
For sure I'm biased, but it'sthe second best podcast on the
planet.
Second, to subscription boxbesties here.
So so definitely go check thatout.
We have a Facebook group calledthe e-commerce alley.
There's about 6,000 of us inthere.
Go check, just search thee-commerce alley group in
(40:01):
Facebook.
Super awesome, we're the studio.
We're like live streaming every.
Actually, I have a live streamhere in 42 minutes and we dive
into all kinds of stuff ads andemail and growth.
But I would say the biggestthing is if you're listening and
you're like, hey, I want toknow a campaign structure to
follow and I'm doing purchasecampaigns.
We did a state of advertising amonth ago and there is one
campaign type that isoutperforming everything else,
(40:22):
regardless of spend threshold.
If you're spending $10 a day orI just have someone yesterday
that's spending $8,000 a dayNumber one campaign structure is
advantage plus shopping.
It is taking the cake on everyother campaign structure we've
done.
I have a step-by-step video onhow to do that, julie, I can
just give you the link to thatif you want to throw that at
show notes or something likethat.
Speaker 1 (40:43):
Yeah, for sure.
Speaker 2 (40:43):
Travel me, rattle off some long URL.
Yeah, We'll give you a link toit completely free, Everyone
here.
Just follow the steps in it andset it up.
I'm telling you.
It's like I don't want to saythere's a magic bullet, but
there are moments in time,especially in tech, that some
things are a little more magicaland we put people in the
structure and then suddenlytheir campaigns start performing
Not 100% of the time, but agood chunk of it.
(41:05):
So I would just say I'll giveyou that, Go out.
It's like a 15 minute video.
I walk through the ads managerdo this, do this, do this, do
this.
We're going to set it uptogether, Okay, I love videos
like that, where you're walkingalongside me.
Speaker 1 (41:18):
Now I know that when you get into the ads manager and
you're creating a campaign, italmost feels like a wizard, like
it's taking you step by step.
But then I can get frozen infear in different steps, because
I was like, am I targeting toodeep here?
Or like, just like you said,just be broad.
So you're probably in thisvideo, walking through and
saying, okay, step one, this iswhat you're going to do and
(41:40):
let's move on to step two, likeyou're not going to get frozen
in fear.
Speaker 2 (41:43):
Yeah, exactly, and then you could always pause.
But I literally walk throughevery setting in the manager in
live time and it's like a fancycool edited video that they're
doing.
Speaker 1 (41:52):
I cannot wait to check it out.
Speaker 2 (41:53):
Animations and everything.
Speaker 1 (41:54):
I've had so much fun chatting with you.
Do you have any final words onFacebook ads?
Or for those listeners who arebrand new to this and they're
just like man, I am fired up toget started now.
Speaker 2 (42:07):
Yeah, you can do it.
You know the first is the worst.
We believe the marketing ismathematical equation, not an
emotional decision.
So if you know the math, if youlean into it, the first
campaign is the worst campaign.
Your hundredth campaign you'llbe way better at it, way more
profitable.
The only thing you need to dois actually start.
So that's what I would part on.
Speaker 1 (42:29):
There was a friend of mine who, once we were talking,
she said action createsconfidence, and it's so true.
It's like you're if you'retrying something new, you're not
confident in it and that's okayFail, but then get back up and
try it again.
So and it's important it is acrucial part of an e-commerce
business in 2024.
Speaker 2 (42:49):
Yes, 100%.
Speaker 1 (42:51):
So, okay, well, Josh, thank you again.
I really appreciate it.
I thank you for sharing allthose free resources.
I'll make sure everything is inthe show notes so they can go
check it out and, you know,really makes take some action
and make progress in whetherthey're doing lead gen or trying
to get more subscribers.
So, thank you.
Speaker 2 (43:11):
Of course.
Speaker 1 (43:12):
See you guys.
All right, thanks everyone forlistening and we'll see you in
the next episode.
Bye.
So you want to launch a subscription box and don't
know where to start?
Girl, you are in the rightplace.
I'm Julie Ball and I'm ReneeGonzalez, your host here at
Subscription Box Basics, apodcast for new and aspiring
subscription box entrepreneurswanting to avoid overwhelm.
So grab a coffee, some pen andpaper and let's have some fun.
(00:21):
Hey everybody, and welcome backto Subscription Box Basics.
I'm super excited today for theguest I'm about to introduce.
Just get your pen and paperready, because today we're
talking about Facebook ads.
Whether you love them or youhate them, or you're curious
about them, this is the episodefor you.
So today I have my friend, joshCoffey on the podcast.
(00:45):
He is the founder of thee-commerce alley and has been
helping e-commerce clientsgenerate listen to this more
than $70 million in salesthrough Facebook ads and email
marketing.
Now, if that doesn't make youlean in, I don't know what does.
Josh hosts his own podcastcalled the e-commerce alley, and
I can tell you from experiencethat this guy obsesses over new
(01:09):
customer acquisition andbuilding sustainable businesses.
Josh, welcome to the podcast.
Speaker 2 (01:16):
I'm super excited because, julie, I had the
privilege, the honor, ofinterviewing you and Renee on my
podcast.
I don't remember where that was, it was like six months ago,
maybe something like that.
Yeah, fantastic.
I even took principles from itand I started teaching in our
coaching program.
Sorry I stole it, but I gaveyou credit on gamifying your box
and gamifying your customerjourney.
(01:36):
I'm super excited and justbefore this I got to tell I told
you this is the second guestpodcast I've ever been on.
I'm like 120 episodes into mine.
All I do is interview and stuffand I've only ever been on the
Rainmaker podcast.
That's the only other podcastI've been on with Steven and his
wife, but she wasn't on theepisode.
Chelsea Steven and ChelseaChelsea.
(01:57):
Yes.
Speaker 1 (01:58):
Did you know I'm in that mastermind.
Speaker 2 (02:01):
I did not know, but I'm learning that everyone in
this industry is all connectedbecause we have a lot of people
that are coaches there, likeCassie Ford and a lot of other
people who are also in our maxprofits mentorship program.
Speaker 1 (02:13):
Oh my gosh, look, we're learning new things about
each other on the fly.
Yes, I started dabbling inAmazon products probably maybe
last summer or so.
I just love different businessmodels and you know that I have
a place in my heart forproduct-based businesses.
I love that story.
Without further ado, let's diveinto the topic.
(02:35):
We're talking about Facebookads, the reason.
You guys, as you're listening,you're thinking okay, well,
Julie's been in business for along time, Can't she teach us
about it?
No, this is not one of thespots.
That is my zone of genius.
I have always looked to othersto help me learn this, to help
coach my students through it,because this is an ever-changing
(02:58):
landscape.
This is one that I just while Iwas coaching subscription boxes
, I couldn't keep up withFacebook ads as well.
That's why I brought someonelike Josh on board.
Just tell us, why do you thinkFacebook ads versus any other
platform that's out there?
Speaker 2 (03:17):
For a lot of reasons.
Number one it's what I teach,and do you know I'm biased.
Outside of that, the reason weare so heavy like all chips in
on Facebook is we've gone inspots.
We've been in business for 10years.
As of October, I remember, likesix, seven years ago, we had
this moment where I had maxedout our lines of credit.
(03:40):
I had maxed out our creditcards.
We were in loads of debt.
We were overstaffed at ouragency and in our business.
We looked at what were thethings that produced the most
revenue for us, what actuallygot us customers very regularly,
what took the least amount ofresource to do that, Either time
and money.
When we looked at everything,there were two things that
(04:00):
produced 90% of the revenue.
The first one was Facebook ads50% to 60% of revenue that we
did, as well as the clients thatwe managed did.
Then the other 20% to 30% ofrevenue came from email.
It was this moment in timewhere I'm like, hey, we have to
stop doing all these things thatare like take a lot of resource
and time.
That were good at the beginning, which you should do, but at a
(04:22):
certain point you have to decideif I want to really start
having predictability in mybusiness unless, like peaks and
valleys, you need the stabilitywith orders coming in every day.
We decided to go all in onFacebook and email.
Those are the two things thatwe believe heavily, Not that
social is not important and notthat Etsy or Marketplaces aren't
important.
That's just what our experiencehas been, why Facebook is
(04:45):
interesting If you look at.
Have you heard of like TrippleWhale, Hiro's North Beam?
Have you heard any of thosetools before?
Speaker 1 (04:52):
I've heard of Hiro's.
Speaker 2 (04:55):
If anyone listening is like what the heck are these
weird words that they're saying?
There are tools out there,called attribution tools, that
allow you to run ads and trackout everything that happens.
Well, north Beam and TrippleWhale they basically they manage
billions of dollars and spendcollectively.
And they came out with theirsoftware and said hey, based on
all of the ad platforms thatdirect to consumer e-commerce
(05:16):
businesses are spending on, getthis, 70% is going to meta of
spend of all brands in theirplatforms, 24% is going to
Google and all the remainingentire 6% is going to everything
else TikTok, snapchat, x it'shard to say X now.
(05:36):
It's still Twitter to me andeverything else, and so if you
look at where businesses thatare really thriving are spending
, it's actually on meta.
70% of direct to consumerbrands are spending 70% of their
budgets on meta.
So to me, that's why it's soimportant is that if you look
where the money is going, itusually shows you in the market
(05:59):
where the value is.
Speaker 1 (06:00):
Here come in right from the data perspective, and I
think it's smart becausethere's so many businesses that
have the funding and thepersonnel to actually test all
that stuff and if it wasn'tworking, they wouldn't be
spending all their money there.
So let's take a step back.
I forgot to even say give us alittle bit about your background
(06:22):
.
I know who you are, I know whatyou do, but I know some of the
listeners are going to bemeeting you for the first time.
Who is this Facebook ads guy?
Where do you come from?
Speaker 2 (06:32):
So I came from this little town in the middle of
nowhere, ohio, where even thecattle get to vote here.
So we still live here, we'reheadquartered here, but we do
have some theme elsewhere.
But yeah, no, 10 years ago gotinto the online marketing.
I was big on social media atthe time, leaning heavily to
Twitter and things like that,and as the market evolved and
(06:52):
where I saw a lot of the value,we decided to lean into Facebook
back in like 2014, 2015.
So we're going on eight yearsof only being all in on Facebook
and then we stacked an emailthere and so what we kind of do
just the e-commerce alley is awhole.
We rebranded two years ago, sothe e-commerce alley just kind
of like was eight years and thentwo years were the e-commerce
(07:14):
alley from our previous agency,flight Media, and basically we
went all in and on Facebook adsand what we do is we basically
teach e-commerce businesses howto leverage Facebook ads to
create new customer flow everysingle day, because one of the
greatest problems that moste-commerce businesses have I'm
sure a lot of people listeningis inconsistent sales.
(07:34):
And when you have inconsistentsales and then you start to
struggle on the profit front andwhen you have a little profit,
then you feel really, reallyburned out and you feel really
stressed out, and so if we cancreate predictable sales and
reliable revenue, then whathappens is your fixed costs are
already covered and it starts togrow your revenue, you're more
profit and then you just youstart to make this momentum and
(07:55):
fuel like energy, and so that'swhat we basically teach and we
have a cool Facebook group about6,000 of us there and we live
stream in the studio here everyweek and we like break down
different elements of Facebookand budgeting and all kind of
budgeting on ads not regularbudgeting stuff like that.
Speaker 1 (08:10):
Right, and y'all are not a stranger to the
subscription box world.
The listeners here are all inthe subscription box industry
and I know that you've workedwith a lot of subscription box
business owners and I thinkthat's so cool, because so often
when we get our own Facebookads or when people target us,
it's always about sellingdigital assets, selling courses
(08:35):
selling this or that.
And it's such a different worldthan selling a product via a
Facebook ad.
So that's one thing I reallyappreciate about you guys is
that you can actually speak withexperience of product based
businesses in Facebook ads.
Speaker 2 (08:51):
Well, and you're so right, it's so different.
So like I am in the digital,like I sell digital stuff, like
it's great.
But you know what?
Digital people don't have costsof good soul.
Digital people don't have todeal with returns, they don't
have to deal with inventoryforecasting and pre-planning
what the next.
And then you look atsubscription boxes.
Subscription boxes are a wholedifferent.
(09:12):
I even put subscription box, soit's like digital.
And then there are what I callmargin based products, products
that they can make.
They make all their money onthe front end.
And then you have LTV basedproducts, which are subscription
boxes, food and beverage,things that have like residual
revenue from them, sosubscription boxes I even put in
a other category from otherphysical products.
(09:33):
So I'm like digital physicalsubscription box because it
behaves so different.
And if you don't understand themath and the numbers of like
lifetime value and how powerfulthat is, then you're usually
because we work.
But we work with a good handfulof them and I got a text from
one yesterday.
I met him one well less than ayear ago, last April, and he
(09:57):
came in.
I met him.
He was doing about 2,500,$2,500 a month and he texted me
yesterday and he said we're nowa seven figure brand as of this.
And the thing is, as long asyou know your math and you do
the right stuff and you'reconsistent, it pays off and you
have this wonderful thing calledlifetime value, that like high
lifetime value that most otherbusinesses don't have.
(10:19):
And so, mike, he just keptscaling and scaling and scaling
and like slow and steady.
So subscription box.
My biggest piece of advice foranyone listening is like don't
look at all these big brands,don't look at BattleBox and Pip
Sticks and look at all these bigcompanies out there that are
really big.
They got there over a very longperiod of time and for you, the
biggest asset you have isconsistency and compound of time
(10:42):
because you have this residualthat kicks in.
So, yeah, I love thissubscription box world.
In our coaching program I hadto break out a separate little
group of them because they arethe minority of the entire
program of just subscription box, because it's different
language, different numbers youhave to look at when you're
making advertising and budgetingdecisions and your strategy is
(11:03):
just generally a little bitdifferent than other people.
Speaker 1 (11:06):
Yeah, okay, well, let's dive a little bit into
that.
So a lot of times people willcome to me and say okay, can I
use ads for launch?
I need to grow my email list,can I use ads to acquire new
customers?
So all these things.
So where do you even think thatis in the subscription box
world as it pertains to ads?
How do you get started?
Where do you get started?
Speaker 2 (11:29):
So they're gonna be the basics, for sure, of like,
how do I set up my businessmanager and how do I set up an
ads manager and how does thehierarchy of like campaign ads
at ad?
Like what does that look like?
So they're gonna be the basicsof that, and if I was like
starting as zero, I'm just gonnago to YouTube and just search
that.
You can see a breakdown of that, very, very easily defined,
(11:50):
just the general basics of howFacebook works.
Once you've got to have thegeneral, I think that you have
to evaluate what's the objectivebased on where I'm at right now
.
So, for example, like I knowyou guys, you guys are big on
like building a pre-launch,pre-launch list, right, you guys
build a list.
How do you guys build a listright now?
Like what are some of the keystrategies to use?
Speaker 1 (12:10):
Oh, giveaways for sure are one of the things that
we recommend, because that wayyou can have a prize that is
very desirable to your targetaudience.
You're not just giving awayAmazon gift cards, you're giving
away something very specific.
We like to recommend thesoftware, king Sumo, because
it's one of those ones that haslike the viral capability.
So like share for more entriesor go follow us on Instagram for
(12:34):
more entries.
So I love that in the verybeginning stages and I've used
it all along the way like sixyears into my box I was still
using that King Sumo giveawaysoftware.
But what I like about it at thebeginning is, at the same time
as you're gathering emailaddresses for your launch, you
can also grow your social mediabecause you're saying get two
(12:56):
extra points for following us onInstagram or go watch this
video I created for another fivepoints.
Go visit my landing page forfive points.
So you're kind of hitting themat multiple points and getting
them really excited.
But the main point of it for usis to grow that email list so
you have someone to launch to.
Speaker 2 (13:17):
Okay, sweet.
So we're gonna build let's usethat as strategy number what
based on where you're at?
I'm in pre-launch and I'm gonnabuild on your strategy, because
I'm familiar with this, by theway, and we have a lot of people
that run giveaways on anongoing basis to grow their list
tremendously.
I'm gonna build on that, andthen what I wanna talk about is
like that's pre-launch, right,but then what do you do once you
(13:38):
launch?
So I think it's kind of like twodifferent buckets.
Some of you are like I'mpre-launch, how do I amplify
this?
And I have like 10,000 peopleon my list, or how do I amplify
this?
I already have launched and Iwanna say, how do I get more
people buying my box right now?
Two different categories, twodifferent objectives.
So one is lead gen and one ispurchase conversion objective.
(13:59):
If we're looking at Facebook, soif you're using King Sumo,
there are two others.
I'll just drop them out there.
King Sumo I know who createdthat Noah Kagan, I think it's a.
He owns King Sumo.
I've never used King Sumo'sgiveaway tool, but I have used
gleamio and I have used Upviralwith Wilco, with the owner Wilco
(14:20):
.
Him and I are friends.
So Upviral, we used to use thathuge fan of it.
We used to build this out.
Fun fact, we used to actuallydo what we call giveaway
launches for clients and so weused to build this huge giveaway
and then we would build theiremail list and then we would
sell to the email list on thebackend.
So I'm familiar with the processyou're talking through.
I just haven't done it in along time.
So here's what I would do.
(14:42):
So if that's your objective,then what I'm gonna do is build
out a Facebook lead gen campaignand it's gonna be very, very
simple.
We're just gonna drive trafficto where you.
You have to figure out whereyou're driving traffic.
I'm gonna drive it to whereyou're already pushing people.
So I assume you have organic,you have your friends.
If I'm just getting started, isthat the typical scenario?
(15:03):
Like we're just getting started?
Yes, okay, pre-launch friends,family, organic audiences that I
have.
So this is like warm audiences.
Now I wanna say, can I growthis from a cold audience?
People that don't know me standup.
Speaker 1 (15:16):
Yes, that's such a challenge.
It's like getting beyond yourown network.
Speaker 2 (15:21):
Absolutely.
And I think part of it, too,comes to like a limiting belief
that like people aren't gonnawant it, or there's like this
deep fear down that like, hey, Idon't wanna run ads because
it's going to these people thatdon't know who I am, and deep
down we're afraid of failing,we're afraid of it not working.
And I wanna tell everybodylistening it works, it works, we
(15:42):
do that.
I'm in 20 to 30 ad accountsevery single week.
I get stories every day.
I got an email this morning froma guy that I mean I'm not gonna
go into detail on the emails,but I get emails all the time of
people that never got intoFacebook ads.
They were so nervous they tookthe first steps, they started
figuring it out.
The first is the worst, is whatwe like to say, but then over
time you get these skills andyou get better.
Just like the first time, youprobably plan your month for a
(16:05):
box, or plan the quarter youlike over forecast, the amount
of product that you need, or youunder forecast.
We just had a client do thatand then they sold out of their
boxes and they're like, oh, whatdo I do while I'm waiting for
the next one?
And so the first is the worst,same thing with Facebook ads.
So all of that said, you can doit.
I mean, here's what I'm gonnado.
(16:25):
I'm gonna centralize all of mytraffic.
I'm gonna send to that pagethat you build for the giveaway.
Do you usually just?
This is my curiosity Do youusually embed that on your
website and send them there?
You?
Speaker 1 (16:37):
can.
It depends on what websiteplatform you're using, but
Kingsumo does give you a landingpage URL that you can share.
Now, it's not your domain, so Idon't know how that impacts
Facebook ads, but you can embedit on a WordPress page, for
example.
Speaker 2 (16:54):
So Okay, so if you were doing that, it would depend
on the integration of Kingsumo.
Sometimes you could add yourpixel in there.
Yeah, is it a lot?
I don't know if it allows youto do that, I'd have to double
check.
I would bet that they do, gleamdoes, upviral does, I'm sure
they do.
So here's what would happen is,whether it's your website or
not and it's a landing page,what you would do is create a
(17:15):
Facebook ad campaign and I wouldcreate the objective of leads
and, as long as you can justconnect your pixel from Facebook
after you set up your accountto Kingsumo, you would just
create a series of ads, and I'mnot gonna get into like ad
testing and stuff like that.
I would just say the basics are.
This is I would create acampaign and I would create an
(17:37):
ad set in the campaign and I'llshare it.
Now, this is a little nerdy, butwhen it comes to ads, a lot of
people think that, like who youtarget is like the critical
component of your success.
Like I need to select thisinterest, or I need to build
this lookalike audience, or Ineed to do someone who is
interested in crafts but also isa mom but also has kids between
(17:59):
ages, this and this, and wethink we have to get caught.
We get caught up in like who weneed to go after.
But Facebook's machine learningand AI is so, so good that
right now we, for most accounts,we're doing what's called broad
meaning there's no targeting atall, like zero targeting, even
for the most random, preciseniche.
As you can imagine, mike theguy I talked about, his
(18:21):
subscription box is a T, it'scalled project life and it's a
fertility T, so he's going broad.
Facebook is very good at findingwomen who have gone through
whether it's IVF or IUI, andthey've had the, they've been
struggling with infertility andhe helps them and Facebook just
finds them.
So what I would do is set up acampaign in the ad set where you
(18:42):
have to choose your targeting.
You choose no targeting.
If there's a gender that you goafter, great, choose the gender
and then, within the campaign,we would add three ads.
Without getting into supernerdy stuff about testing
frameworks and stuff, I wouldjust come with the best three
ads that you can.
Three images, by the way.
I see images do better thanvideo in sub box world.
I'll say that For the most part, I see images do better.
Speaker 1 (19:04):
Interesting.
Speaker 2 (19:06):
That is the majority of them.
I'd probably say it's like a 70, 30 split 30%.
Speaker 1 (19:12):
Any specific type of image Like an unboxing or a
flatline, oh yes yes, yes, okay.
Speaker 2 (19:17):
So what we generally see do well is really simple.
Like you can just open aMacanva and show the box with
everything in it Crazy huh.
It's a crazy concept.
What's inside the box?
Here's what some people getreally wrong is they start by
showing that they love thebranding of the box.
You think it's such a greatpackaging and the colors and the
(19:40):
brand name on it and all ofthat, and we love it.
And then we, we put the box.
Nobody knows that it's a likeif you look at it straight on,
nobody knows it's a box.
It could look like a button.
They don't know it's in the box.
And so, like, really make itknown that you could have the
box like open up with everythingcoming out.
Or you could just pulleverything out and have a flat
lay of the shot of the productin it without the box, even in
(20:02):
the picture, because it comes ina box.
But do people care that itcomes in a box?
Not really.
They usually care about how thestuff in it makes them feel or
how they feel connected theirkids or their animals, you know,
whatever it is, that's whathe's doing.
The best right now is.
That's so interesting productjust laid out.
I will say the ones that dovideo really well are ones where
(20:23):
maybe your, your box is alittle harder to understand.
So, like, if I look at likeNicole, we work with Nicole from
G Pig box.
G Pig is like guinea pig, soshe does stuff for like guinea
pigs and so to like just lay outall the product, that's pretty
easy to understand.
Okay, guinea pig, guinea pigproduct, show little guinea pig
on the image.
But then you look at Mike whosells fertility tea.
(20:45):
That, by the way, is $450 amonth subscription.
It's not a cheap subscription.
Then we move the needle with animage and convince people of
what it is and the value of it,that it's worth $449 a month.
From an image we learned thatwe couldn't, so in that case
video made more sense.
So I would say if you have aproduct that's like hard to
understand, then video willprobably be worth landing into.
(21:08):
But I would say the majority ofsub boxes again, the majority,
the 70%, 80% that you could justdo an image and images are
great.
So I would have three imageswith three different headlines,
the bet in three differentprimary texts, and here's the
best way.
I would say this If you were totake all of your chips and
you're like playing poker.
I don't play poker, I don'teven know how it works, but if I
was and I had a big pile ofchips and I was to just take all
(21:32):
my chips and put them all in onthese three headlines and these
three primary texts with thosethree images, then that would be
Mike all in best.
So what that means is, with thebest capabilities, with the
best, your best ability to writead copy, which the first is the
worst.
The first headline we write isprobably the worst headline
because we don't know anythingyet.
So take the best knowledge thatyou have right now and write
(21:54):
three headlines, write threeprimary texts and then just put
them with the images however yousee fit, and that would be the
campaign.
Drive them straight to thatgiveaway landing page.
Now I would say typical resultsI see in giveaways is easily
under a dollar per lead,depending on the product.
So it's like a mass consumerproduct.
(22:17):
That's like, let's say, dogs,like we've done a dog giveaway
before.
So if you have like dog petproducts, pet products are a
mass consumer market.
So your cost per lead might be20 to 30 cents.
Someone who's like we havesomeone else who does giveaways
all the time.
He sells high end handmadeguitar, electric guitar cables,
so a little bit different.
(22:37):
So for him it's like 75 cents,80 cents, so it's a little bit
more, but you should be under adollar per lead.
So if you're like mass market,I would expect even less as you
spend, launch the ads, commit toan amount and then sit for five
days, let them optimize forfive days and then, usually by
five days in it'll stabilize ata cost per lead and you'll be
(22:58):
able to see what that looks like.
Speaker 1 (22:59):
So again Okay, so do you put like a campaign budget
or a daily budget?
Speaker 2 (23:04):
A daily budget Daily budget Okay yeah.
So you could set.
What Julie's talking about hereis what's called lifetime
budget.
So, like you could, you couldchoose a starting, an end date
and say I want to spend thisamount in this window of time.
You can do that.
I would just say that we seedaily budget do pretty well and
then, if you want to, you couldalways just just do the
calculations of how long youwant to run it for and then just
(23:25):
have an end.
It's the exact same thing.
It's just how Facebook treats.
It is a little bit different.
So we do daily budget for themost part.
Speaker 1 (23:32):
Okay, another question how do you feel about,
in something like this,targeting the country?
So, like most of my studentsonly shipped to to the United
States, so obviously those arethe only customers that are
valuable to them.
So is this a good time to goahead and target to the country?
Speaker 2 (23:52):
Yes, what else would you normally target?
What would you say?
Speaker 1 (23:56):
Well, I think if you didn't, if you didn't exclude
other countries, you know, myconcern would be that you're
going to get a bunch of leadsfrom countries that you can't
ship to.
Speaker 2 (24:06):
Yes, yes, okay.
So I think when I say broad,when I say broad, it's more in
regards.
Only thing you would select isdemographic.
So location, age, gender, thoseare the only things I would
choose.
So do what makes sense for you.
So if you're like us, onlygreat us.
We only sell to women, becausethis is a, you know, a haircare,
(24:26):
makeup product, whatever.
Just go to women and if there'sa certain age range, go ahead
and put the age range.
I will say this most if you'renew, unless your product has to
be sold to like, let's say, boomby Cindy Joseph, is makeup for
women over 50, right?
Unless you're a very precisesituation, I'm going to remove
my bias and I'm just going tolet Facebook choose and I won't
put an age range Unless you havea lot of data to say hey, I
(24:49):
know that this is only myaudience here in this age
bracket.
I'm going to exclude thatbecause you would be surprised
at how easily Facebook oh, goodthere, yeah, very, very good.
Speaker 1 (25:00):
Yeah, all right.
One more question when it comesto imagery Is there a personal,
you know unboxing picture orone that you've done, as that
looks more lifestyle, more likeuser generated content?
Speaker 2 (25:13):
It kind of.
Obviously.
The unfortunate answer is itdepends.
But I would say that use whatyou have like.
Don't go like I think peoplebelieve, because we have seen
all these fancy like Dr Squatchads, we've seen purple mattress
ads or dollar shaped all theselike high production, half
million dollar ads.
Right, we think like we have togo have these professional
(25:34):
things.
So one thing that we specializein is, add to we teach what's
called rapid experimentation andad testing, where we'll go test
like 50 to 100 creatives inless than a week.
So we're like really good atdoing this methodology and I
will say, from testing thousandsand thousands of creatives, the
ones that usually win arethings that are just like taken
on your iPhone because it's sonative to the platform.
(25:54):
It's so natural to the platformwhen you start overlaying text
and banners and fancy thingslike it looks like an ad.
And if it looks like an adusually it did not always, but
oftentimes it deters people fromclicking on it.
So, honestly, if you have theproduct, I'm not going to go
invest a high degree of resourcein getting product photography
(26:15):
done.
I'm going to say, hey, what doI have?
Let's open up my box and let'sput this on a white sheet of
paper, you know, makes it alittle easy to call attention to
what the product is, and let'sjust snap the photo, or let's
take the photo, throw it inCanva, remove the background,
you know, and play with it ifyou have that skill set.
Speaker 1 (26:29):
Yeah, and one thing, quick tip guys.
If you're like, okay, I need totake some photos, I would go to
literally like the DollarGeneral, I'd get some of the
phone board so that it was alittle bit more structured
behind it.
And here's a quick tip lay thebox on the back and then splay
the products out.
Take the picture from straightabove, because it's easier to
(26:52):
make the products look almost ina way where you can see them
better and they're kind ofdisplayed more with more space.
If you have your box sitting uplike normally on your table,
you have to figure out how toprop this, this item, up, how to
make sure this one doesn't flopover.
Just flip it on its backsideand, like, lay it out, layout
(27:14):
all the products, so nothing'sgonna fall over.
It's just an easier way to takethe picture.
Speaker 2 (27:19):
Yeah, I love that.
No, I think that's easy.
And one thing to keep in mindis intent versus intrigue.
So I was on a call yesterdaywith a pretty big supplement
company and we're analyzing alltheir ads and as we're looking
at them, she's like well, whichone of these do you think is
(27:39):
gonna resonate the most?
And they had two differentcreatives she's like and break
down why you think so?
And one creative was asupplement it's called Bloom, by
the way, and this is asupplement of the product and it
has like the powder.
And then it has the drink nextto it and it has mangoes in the
background and strawberry, soyou can like kind of smell it or
taste it through the screen,which is great.
And then the other one was thisathletic model who was in her
(28:03):
sports clothing and she washolding the drink, like this,
and there was text over her andshe's like which one do you
think would be better?
I'm like are you running to menand women or just women?
And she's like we're running tomen and women.
I'm like well, the moment youadd a woman with her shirt off
and a sports bra and leggingsand you don't exclude men, what
are they gonna click and it'sgonna skew all of your budget.
(28:24):
So what I say is, like one hasa great degree of intent.
This is the product and there'sno question about it.
One has a great degree ofintrigue and so you're getting a
lot of clicks, but not a wholelot of leads, in this case, or a
whole lot of purchases, if youdo in a purchase campaign.
So when you're doing it, keepthis in mind.
If you have a product that'slike for and I like to give the
(28:44):
extreme of like kids or babiesor animals right, If you have a
little cute puppy on your photo,you're gonna get a lot of
clicks, but it might not bebecause of what your product is
so like.
If you were just wondering withthe photo of a dog and there's,
you don't see the product andknow what it is, they're gonna
click in, thinking it's like avideo of a dog or a blog post on
a dog or whatever that is.
And then they get there andthen there's there's lack of
(29:07):
congruency between the ad andthe landing page.
So, whatever you do, I'm allabout.
I'd rather be highlyintentional where it's like.
This is what it is.
Click here, buy or click here,join the giveaway versus trying
to be like really intriguing andscroll stopping in a way that
like doesn't create a congruentexperience for the person.
So I would just say, in yourphotos, just pay attention to
(29:29):
that.
Yeah, that's great advice Ifthat can skew you from
systematically.
Speaker 1 (29:32):
Okay.
Okay, so you kind of broke downthe objective of leads growing
your giveaway list.
So what are some thoughts on ifyour objective is to convert
new buyers?
Speaker 2 (29:45):
So this is actually the area that we play in them.
This is what we primarily do is.
So there are only twoobjectives you should ever have
lead gen or purchases only twotypes of campaigns.
Facebook has other objectives.
Don't worry about any of them.
None of them matter exceptleads and purchases.
So when you're running a box, Iwould just say there are kind of
a couple of things here.
The first thing is you have tohave a really good offer, and
(30:09):
this comes into knowing yournumbers.
You have to know your numbers.
So if I'm just doing back ofnapkin math here, an offer is
gonna be what will you givesomeone for their first box
purchase, whether it's like afree gift with purchase, or 40%
off your first box, or $10 offyour first box, or whatever that
might be right.
We call them cash cow offers.
(30:30):
You need a good offer to getthem in on day one, but don't
expect to be profitable on dayone, and I know that's not what
anybody here wants to hear.
Nobody wants to hear that, butthat is my mass observation from
doing this for a pretty longtime.
The subscription box world 2017,pre-2021,.
Yeah, you could be running likefour ROAs and it's like happy
(30:51):
as a duck with a french fry.
Like you're good, you know.
Like you're just raking in theprofit on the front end.
The market is more saturatednow but that's not a bad thing.
Like, hey, the subscription boxworld is growing, that's
awesome.
You just have to be moreintelligent with your marketing
and know your numbers better.
And so here's what I would do.
The first thing is I need youneed to calculate your I call it
(31:15):
your 31 and your 61 daylifetime value.
And here's why it's 31.
Because if someone buys a boxtoday, well, in 30 days they
renew.
So technically, if I cancollect, I want to figure out
how much profit do I have in mybox for two in 31 days.
So when it's two months worthof boxes, it's actually only 31
(31:37):
days because they process 30days later, if that makes sense
For most of us.
Some of us are rolling andthere's a little bit different
stuff in there, but ultimately Iwant to figure out how much do
I make in the first two payments, which would be a 31 days, and
then how much do I make in thefirst three payments.
So like, let's say, your box isI'm sure you use round numbers
here $50.
And your cogs in that ship tothem and everything are 50%.
(32:00):
So you have $25 in profit inthe box and within two months,
31 days, that's $50 in profit.
So if I can acquire a customerfor less than 50, then I'm
breaking even in unprofitablewithin two payment cycles.
So I have to float the gap fora little bit.
So if I could acquire them lessthan 50, that'd probably be a
good range to acquire customers,but if I'm acquiring them, I'd
call it like 100.
(32:21):
Well, that's four paymentcycles that I need to be
profitable.
And yes, while some people thatare just sitting on a bucket
load of cash confront the gap init capitalally, in the meantime
, until they're profitable on it, most people can't.
Speaker 1 (32:36):
I can't.
Speaker 2 (32:37):
For me.
If I'm profitable in two tothree cycles, I'm okay with that
.
Most people in our coachingprogram that we do.
We try to get them profitablewithin two.
It's very hard, being flat out.
It's hard to be profitable onday one.
If you can dial it in, awesomegood for you.
That is the minority, but ifyou can be profitable within 31
(32:57):
days, then guess what?
You're pretty close to a creditcard payment cycle, right?
So you only have to front thegap for that one day, plus the
two days of processing beforeyou get to your bank.
So you have a three or four daybuffer that you just have to
float the gap of being a littlebit upside down on the ads, if
that makes sense for that smallduration of time.
So here's what happens.
What most people do, though, isthey say my box is $50 and it's
(33:20):
costing me $50 to acquire acustomer After my cogs.
I'm upside down $25 on thatcustomer in month one, and so
they get in their head andthey're like oh shut them off.
They panic.
I'm running a one return on adspend.
I can't live on that.
Well, guess what?
30 days later you'll be at abreak even.
Or you'll be profitable and soif you know your numbers, you
(33:43):
have the fact that you havelifetime value.
So today won't feel good, butin a month, okay now this feels
good.
In month three, oh, this feelsreally good because I paid from
three months ago and I'm stillcollecting on those customers
and so most people don't knowtheir numbers, I would say, and
they don't know how much theymake in a lifetime on a customer
.
Speaker 1 (34:01):
Or if they're early, or if they're early stage.
They don't have that data yet.
Speaker 2 (34:06):
Yes, well, and you know what's kind of interesting
is.
Here's quick math For anybodyhere listening or watching that
doesn't know theirs.
They're just starting.
Let's use a $50 box as anexample for simplicity here.
What is an average churnerywhen you say in the subscription
?
Speaker 1 (34:21):
box.
So we recommend to keep itunder 10.
So let's say like five would bereally good.
Speaker 2 (34:28):
Okay.
So five is good.
Let's say that at the beginningwe're not that good, let's go
10.
Let's just be 10 here.
Here's how you figure out yourlifetime value.
Back of napkin, you take yourAOV.
So let's just say I'm a $40 box.
Let's change it up $40 boxdivided by churn rate 0.1, right
, that's 10%.
That means your AOV probablycan't see it here is 400, your
(34:51):
lifetime value is $400.
That means the average person.
If you're churning 10%, right,it means they churn after 10
months.
Well, 100% turnover.
So you take your monthly AOV,monthly box, right, divide it by
churn rate and that gives youyour lifetime value.
And if you say, okay, I have50% margin, well, that means I'm
gonna make 200 in profit over10 months.
Okay.
(35:11):
So then we get really nerdy andsay, okay, divide 200 in profit
divided by 10.
It means I make $20 profit perbox per month.
And if your cost-requiredcustomer is $40, well, it takes
two payments cycles, that'sactually 31 days to break even.
If it's $60 to acquire acustomer, it actually takes
three payment cycles, which is61 days.
And so with that in mind, knowyour numbers then you need to
(35:35):
have a really solid offer to getthem in in the first month.
Sometimes you can go without anoffer.
I would say right now, what I'mseeing do pretty well is like
free gift with purchase, so likeif you have something like you
could just throw in for free andit's really light, doesn't
change the shipping doesn't costa whole lot.
Free gift with your first boxis a really good lead-in.
What I see not doing well andI'll share this it's really
(35:56):
common.
I feel like everyone comes into our program that we work with
with first box is one box freewith six or 12 month commitment.
Well, here's the thing ifyou're new and no one's ever
worked with you, who commits tosix or 12 months?
It's very unlikely, and so myrecommendation is to focus on
(36:16):
the month to month.
You might have prepaid options,but focus on that one month,
right, and say, okay, if theyonly went one month, what could
I offer them on?
Maybe 40% off your first box,maybe free gift with purchase,
maybe $10 off your first box,and I'll give you some gold here
.
We saw this do a big uptick forpeople in our world right now,
and that is if you're paying forshipping.
(36:38):
Sometimes you don't even give adeal off.
You know what you should do.
Test this first Don't pay forshipping and just lower your
price by the amount of shipping.
So we had someone who their boxwas 59.
And I said, kimberly, how muchis your shipping?
10 bucks.
I said great, your box is now49.
And your shipping?
You don't pay for shippinganymore.
They do.
They pay the $10.
(36:59):
, that single switch, and nowshe's signing one to two new
boxes a day.
But I literally just flipflopping things like that.
So, like play with your offeronce you know your numbers and
know how long it takes to breakeven.
And then I would just say, likeyou have to, you have to commit,
you have to commit for life,for like a long period of time.
Like to go slow, especially inyour world, in subscription
(37:20):
world, to go slow is to go fastand to go fast is to go slow,
Because if you inject all ofthis cash, you're like, okay, I
have saved up $10,000, you know,for my savings, I want to just
put it all into ads right now.
You're going to throw it all inand you're not going to know it
works yet you don't know youroffer, yet you haven't dialed in
your landing page.
You haven't dialed in.
You know your ads and yourtargeting.
And so go slow and just knowthat it's this constant rise
(37:45):
because with subscription, yourrevenue trails your ad spend.
You acquire them today but yourrevenue will trail the ad spend
over time because it's arecurring subscription and so
you will realize your return ina longer time horizon, which is
it kind of stinks, you know,versus the other people that are
like they're running andthey're like I got a forward
return on ad spend and I wasprofitable on day one, but they
(38:06):
have to fight to get repeatpurchases and you don't.
Speaker 1 (38:09):
Yeah, and I think it's a mindset thing.
I know when I first launched mysubscription box, I worked on a
lot of money mindset because Iknew that I would have to spend
before I would earn, meaninglike I had to buy my product
before those sales would gothrough and that I would be
spending on ads to acquire thenew people.
(38:31):
Yeah, that wouldn't beprofitable from that first month
, but I knew on average how longthey were going to stay.
So, and the other thing too Ithink it's important to say is I
just did an interview with LiamBrennan.
He is co-founder of Busterboxand he talked all about offers.
We had an entire conversationabout offers and you're right,
(38:52):
Like it's so important to havethat.
What's in it for me, factorthat carrot dangling in front of
them to say, okay, enroll now,join now, subscribe now whatever
word you're using and to testit.
You know what works in thespring might not work in the
winter.
Like there's just differentthings.
You got to keep it fresh, yougot to continue testing.
(39:15):
So this has been so interesting.
I'm sure that you have allkinds of templates and stuff,
because I know we've been doingyou call it napkin math.
I love that.
I'm taking notes here and I'msure the listeners are taking
notes, but I know that youprobably have all kinds of
resources and templates.
Will you tell everyone wherethey can find some of that stuff
if they're looking to dive intothis ads world and learn more?
Speaker 2 (39:39):
Yeah, so I'll give you a couple of things.
So like the e-commerce highlypodcast.
For sure I'm biased, but it'sthe second best podcast on the
planet.
Second, to subscription boxbesties here.
So so definitely go check thatout.
We have a Facebook group calledthe e-commerce alley.
There's about 6,000 of us inthere.
Go check, just search thee-commerce alley group in
(40:01):
Facebook.
Super awesome, we're the studio.
We're like live streaming every.
Actually, I have a live streamhere in 42 minutes and we dive
into all kinds of stuff ads andemail and growth.
But I would say the biggestthing is if you're listening and
you're like, hey, I want toknow a campaign structure to
follow and I'm doing purchasecampaigns.
We did a state of advertising amonth ago and there is one
campaign type that isoutperforming everything else,
(40:22):
regardless of spend threshold.
If you're spending $10 a day orI just have someone yesterday
that's spending $8,000 a dayNumber one campaign structure is
advantage plus shopping.
It is taking the cake on everyother campaign structure we've
done.
I have a step-by-step video onhow to do that, julie, I can
just give you the link to thatif you want to throw that at
show notes or something likethat.
Speaker 1 (40:43):
Yeah, for sure.
Speaker 2 (40:43):
Travel me, rattle off some long URL.
Yeah, We'll give you a link toit completely free, Everyone
here.
Just follow the steps in it andset it up.
I'm telling you.
It's like I don't want to saythere's a magic bullet, but
there are moments in time,especially in tech, that some
things are a little more magicaland we put people in the
structure and then suddenlytheir campaigns start performing
Not 100% of the time, but agood chunk of it.
(41:05):
So I would just say I'll giveyou that, Go out.
It's like a 15 minute video.
I walk through the ads managerdo this, do this, do this, do
this.
We're going to set it uptogether, Okay, I love videos
like that, where you're walkingalongside me.
Speaker 1 (41:18):
Now I know that when you get into the ads manager and
you're creating a campaign, italmost feels like a wizard, like
it's taking you step by step.
But then I can get frozen infear in different steps, because
I was like, am I targeting toodeep here?
Or like, just like you said,just be broad.
So you're probably in thisvideo, walking through and
saying, okay, step one, this iswhat you're going to do and
(41:40):
let's move on to step two, likeyou're not going to get frozen
in fear.
Speaker 2 (41:43):
Yeah, exactly, and then you could always pause.
But I literally walk throughevery setting in the manager in
live time and it's like a fancycool edited video that they're
doing.
Speaker 1 (41:52):
I cannot wait to check it out.
Speaker 2 (41:53):
Animations and everything.
Speaker 1 (41:54):
I've had so much fun chatting with you.
Do you have any final words onFacebook ads?
Or for those listeners who arebrand new to this and they're
just like man, I am fired up toget started now.
Speaker 2 (42:07):
Yeah, you can do it.
You know the first is the worst.
We believe the marketing ismathematical equation, not an
emotional decision.
So if you know the math, if youlean into it, the first
campaign is the worst campaign.
Your hundredth campaign you'llbe way better at it, way more
profitable.
The only thing you need to dois actually start.
So that's what I would part on.
Speaker 1 (42:29):
There was a friend of mine who, once we were talking,
she said action createsconfidence, and it's so true.
It's like you're if you'retrying something new, you're not
confident in it and that's okayFail, but then get back up and
try it again.
So and it's important it is acrucial part of an e-commerce
business in 2024.
Speaker 2 (42:49):
Yes, 100%.
Speaker 1 (42:51):
So, okay, well, Josh, thank you again.
I really appreciate it.
I thank you for sharing allthose free resources.
I'll make sure everything is inthe show notes so they can go
check it out and, you know,really makes take some action
and make progress in whetherthey're doing lead gen or trying
to get more subscribers.
So, thank you.
Speaker 2 (43:11):
Of course.
Speaker 1 (43:12):
See you guys.
All right, thanks everyone forlistening and we'll see you in
the next episode.
Bye.
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