CASE STUDY: Market expansion
Hey, ECOM growth community!
I hope May has been going well for you and you are already preparing for the summer.
Do you know what the best DTC brands do during the summer?
Turn off the ads or lower the budgets until September? Big NO.
They:
1) Launch new seasonable products
2) Develop new travel or vacation bundles
3) Test new seasonable angles (example: traveling hacks)
4) Run limited-time offers, like Christmas in July, Summer sale
5) Focus on acquiring new customers to whom they can sell aggressively during the Q4
Usually, these brands aim for lower overall KPI metrics, as they focus mainly on acquisition during the summer months.
So their focus is to:
💪 Expand the product portfolio with limited seasonable products
💪 Sell to new customers so they can grow their customer database for Q4 profitable scaling
What is your plan? 🏝️
Let’s move to the topic of the week.
Actually, I want to share a practical example with you.
It’s connected to the email I got from my 🇸🇮 ECOM friend in late April.
I will talk about:
How can poor performance in a new market be avoided? 🛫
So let’s start with the email. 📨
I checked my email after my 3-hour deep work session and it went something like this:
Subject: JK, we need your help 🚨
Text:
“Hey Jure,
it has been a while since we last saw each other at the ECOM event. Our conversation was super valuable as you provided us with some awesome tips on how to grow our ECOM sales in Slovenia.
We hit 70K monthly revenue for the first time last month 🏆
Thanks!
In March, we also tried to open up the Czech Republic, but somehow it didn’t work.
Could you check it out and let me know what you think is the problem and what you would do?
I hope you will be able to give it a look as we see the potential but don’t know what to change 😰😰😰
Really appreciate it, man!
All the best!
Tilen P.”
So, let’s check out the behind-the-scenes. He agreed that I could share the learnings with my community if they would be valuable to someone.
He added me to his Shopify, Klaviyo, Google, and Meta accounts so I could review the data.
And here are the takeaways:
ABOUT 🤓
> After two years of being in the Slovenian market, they decided to expand to Czechia with Meta ads
As Meta ads were the main driver of the results on the Slovenian market, they rely on that channel to find new customers in the new market – Logic move ✅
> They invested 5K € into Meta ads in the first month and 10K € in the second month
They had the budget ready for the international expansion, 15K € for 2 months – Great ✅
But it’s essential to have in mind not to spend no matter what, but the goal is to see week-over-week improvement on the main KPIs, like:
a) Conversion rate
b) Add-to-cart rate
c) Cost of acquiring a customer
You will see what I mean when we check the results section.
> They localized their best-performing ads with voiceovers they got from the translation agency and used a localized landing page
It could be part of the strategy, but not the whole, as in the Slovenian market, they are already known, and in the new market, it often happens that
So take the learnings but don’t rely 100% on them; let them be just one of the potential directions that could work.
PAST RESULTS 📊
Target KPI for entering the market :
💸 CAC: 20 €
💸 Net ROAS: 2.5
💸 Profitability: 7-10%
Results in the first two months:
😬 15K € investment
😬 CAC 55 €
😬 ROAS 1
😬 Losing A LOT of money
Here I ALWAYS want to understand, if it is a website problem or ads problem (or both).
So let’s see them:
Website metrics 🖥️
Conversion rate 2,5% – Solid ✔️
ATC rate: 10% – Solid ✔️
AOV: 55 € – Solid ✔️
Time on site: 1 min 30 sec – Solid ✔️
Meta ads metrics 🎯
CTR 0.57% – Poor ✖️
Cost per outbound click 1,3 € – Poor ✖️
CPM 17 € – Poor ✖️(for the CZ market, advertising the home & garden niche)
Hook rate 12% – Poor ✖️
Hold rate 3% – Poor ✖️
What is it then? It’s an advertising problem, for sure.
PROBLEMS 👻
So what were their main problems, you ask?
Let’s list them here:
> They tested only twelve videos, nothing else
> One of them got some traction, but they didn’t scale it
> They invested < 5% of their total budget on retargeting and re-engagement ads
> They tested everything with a super narrow down audience and with only Facebook feed placement
> They had AI voiceovers that didn’t resonate with the target audience
> Captions were missing from all the videos
> Only long-form copy was used
Besides the Meta ads, some things popped up during my audit:
> They didn’t collect email leads
> Missing email flows for the welcome, abandoned cart, and post-purchase
> They didn’t have Google ads running
> Surveys were missing
> No behavior tracking tool like Hotjar or Clarity
> No landing pages were tested; everything was linked to the home page or the product page
> They had no idea what bothered the potential buyers before buying
> They should make bigger changes earlier and not spend the whole budget as they didn’t see the week-over-week improvements
POTENTIAL SOLUTIONS 🛠️
We had a bit of a hard conversation with Tilen when we had a video call three days later, as he was too passive, and I saw so much potential to improve results.
Nothing personal, just my performance marketer DNA hehe
In summary:
“Make better ads that will convert.”
– Easier said than done, right? 🤣
Let’s break it down what I suggested:
+ Start testing 10-15 creatives per week
+ Test formats with videos, photos, and gifs
+ Prioritize testing new angles and hooks
+ Set up retargeting campaigns
+ Set up audience testing campaign
+ Set up scaling campaigns (6-10 active ads)
+ Implement surveys on the website
+ Set up Google ads (at least for branded search)
+ Build email flows and pop-ups to collect leads
+ Copy testing
+ Get content from 5 local content creators
+ Set up daily and weekly reports in Sheets to check the progress
+ Ask existing customers for feedback and reviews
+ Create an inspirational list of local brands to collect creative ideas
+ Build an acquisition-based landing page, like five reasons why listicle
WHAT THEY PRIORITIZED 🏃
Within the first week, they:
+ Start testing 10-15 creatives per week
+ Test formats with videos, photos, and gifs
+ Set up retargeting campaigns
+ Set up audience testing campaign
+ Set up scaling campaigns (6-10 active ads)
+ Set up Google ads
+ Build email flows and pop-ups to collect leads
MAY RESULTS 😎
This is an update on the results I got from him yesterday.
Results from 1st to 27th of May:
🏆 12K € investment
🏆 CAC 22 €
🏆 ROAS 2.35
🏆 5% profitability
On the right track, I believe!
🙏🙏 Keep growing, my ECOM friend Tilen, and I hope you, my valuable member of my ECOM growth community, also got some value out of this breakdown as a reader.
Does some of these resonate?
Please let me know if you have any questions regarding this case or your market expansion.
________
And that’s a wrap for today’s ECOM growth community!
If you have any questions or you want to break some of this further, DM me on LinkedIn
If you are interested in working together, submit this form.
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Talk soon and as always …
Happy scaling! 🚀
BESTS,
Jure (JK) Knehtl
Founder @ JK GROWTH
CASE STUDY: Skincare brand hit +200K € daily revenue
Last week, I shared with you:
13 (unlucky) mistakes ECOM brands make when going international ☠️
You learned all about:
🧠 Localization tips
🧠 Budgeting and KPI projecting
🧠 Preparation when going on a new market
🧠 How to look at the marketing mix
You can read the blog post HERE if you still need to check it out.
Now, let’s move to the topic of this week.
BIG WIN for my client.
How I help a skincare brand hit above 200K daily revenue mark without losing profitability with the Easter sale push, two weeks ago
First, let me set the scene…
They were doing, on average, between 15-50K per day in the last 60 days.
Their previous daily sales record was 150K €, last Black Friday 2023.
The skincare brand has sold its branded products in 2 European markets for four years.
They had high targets for Q1 2024, but nothing worked as expected.
February and the beginning of March were hard for them as their Meta performance dropped dramatically.
They used the same tactics as in previous years, and this year, they were far from the expected results and targets they set based on revenue, customer number, and profitability.
They overstocked inventory because they were expecting sales, and they unsuccessfully opened up 2 new markets in January. They were really starting to feel the frustrations.
They reached out to me at the beginning of February as they were a loyal reader of my weekly newsletter – we jumped on a call, did a detailed audit, and we started working together mid-February.
The Easter sale was already in progress planning, so I sense that that would be a great breakout moment we can use to gain more traction.
Although they had a date marked in the calendar, there were some challenges we needed to tackle.
The problems were:
🤔 Day-to-day, they were not operating profitable – we tackled this first to cut the fat, restructure the creative testing flow, segment marketing mix, and introduce new scaling techniques
🤔 They didn’t have a proven, scalable offer for acquisition and retention; typical sitewide discount just didn’t work anymore
🤔 They were lacking high-performing creatives
🤔 Their channels didn’t work together, but as separate islands
Seeing multiple brands doing hard pushes with limited-time offers numerous times, I created a master plan with the CMO.
💡 Here’s what we did: 💡
– Decided on the 72-hour weekend offer as weekends were the best-performing for them, and we wanted to have an urgency to buy ASAP
– Analyzed the purchase behavior with Lifetimely to understand what is best to promote for new vs. returning customers, to understand the difference between benchmark CAC, profitability vs. LTV
– Craft 12 new bundles that were segmented for acquiring new customers (best sellers for NC with complementary products), vs. high AOV returning customers bundles.
– Re-analyzed all the Influencer collaborations in the last 12 months (they had +150 collabs) and, based on the performance, selected 15 of them that will help us promote the offer with bundles.
– Booked 8 Dark posting collabs with their Meta ad’s best-performing content creators and used them across all countries
– Set up ECOM reporting with main success metrics with the tracking tool so we can scale in real-time
– Iterate on best-selling evergreen creatives and add sales-oriented creatives based on what worked in the past performance and inspiration. We started pushing with 20 creatives – 10 videos, 4 GIFs and 6 statics.
– Upgraded scaling setup for Meta platform so we could scale faster with the combo of ASC+ and CBO
– Sent five emails within three days and refreshed the main flows + pop-ups
– Align communication and timeline across all the channels to make that extra push
– Built a dedicated landing page for the special Eastern edition bundles that skyrocketed the conversion rate
– Set up the last call across all channels on Sunday.
IMPORTANT 🤓
One of the greatest tactics that made the big, quick push was to offer a free branded gift to the first 150 customers.
I tested this multiple times in the past, and it produced great results.
We announce it organically, by email, on the website, and with Influencers.
BULLSEYE! 🎯 It worked, we scaled.
We hit 200 purchases in the first 3 hours of the Easter sale, we got a lot of positive signals to the ad platform’s pixels, and it was showtime for paid ads.
RESULTS 📊
On the first day, 170K €,
on the second day, 140K €,
on the last day, 210 K € (NEW DAILY RECORD🏆) and
being highly profitable.
🏆 60% of the revenue came from the returning customers
🏆 AOV was 15% higher than their Q1 benchmarks
🏆 found a proven system how to scale
YES, THEY ARE >>> A SUCCESS! 📈
The CEO called me on Monday, said they were surprised with the scalability and that they are having a big office party because of the newly set daily record.
It feels so good to help them get to the next level.
They deserve it as they really have top products and high satisfaction scores!
Now, the work is not done.
We are already working on building the international markets and testing new funnel to increase the efficiency of the new customer acquisition.
𝐎𝐟𝐟 𝐭𝐨 𝐭𝐡𝐞 𝐍𝐄𝐗𝐓 𝐖𝐈𝐍. 🫡
And that’s a wrap for today’s blog ECOM growth community!
What’s next:
- If you have any questions, DM me on LinkedIn
- If you are interested in working together, submit this form
- If you don’t want to miss my following newsletters, make sure to subscribe
Talk soon and as always …
Happy scaling! 🚀
BESTS,
Jure (JK) Knehtl
Founder @ JK GROWTH