E-Com Is Hard Right Now

E-com is hard right now.

Consumer confidence is at a 13 month low. Fuel and gas prices are eating into consumers pockets. The war in Ukraine is putting everyone on edge and absorbing the attention. 

And let's be real...things aren't going to ease up over the next 12 months. 

If you've been trudging through sand for the past couple of months you're not alone. Most brands are finding it tough going.

So in this months letter I wanna break down a few things we're doing to keep our ship on course...

What's working on Facebook ads

Like most brands, Facebook performance significantly dropped in the middle of February. Feeds were full of stories about the war in Ukraine, which were capturing peoples attention over ads for products. And rightly so. 

So how are we dealing with this?

Firstly, we've scaled back spend. If the market is going through a rocky patch there is zero point in throwing money at something that clearly isn't performing. As soon as things calm down and we see our incremental store revenue improve then we can quickly crank budgets back up again. 

We also doubled down on creative testing. Your ads do the targeting. So it's crucial to be constantly testing new angles, offers and creatives to maximise your chances of success. Not enough brands test enough. And this proves to be their biggest downfall. 

Big thing that's working really well for us right now is using Tiktok style video ads. They're fast paced, engaging and don't look like ads.

Every Tuesday we create content for 3-4 ads. We then use CapCut to edit it all (takes 15 minutes) before testing them the following week. 

If you're bootstrapping your business this is the best way to go about things. There's no point in dropping £400 on one polished video when there's a 50% chance it'll flop. Instead whip up half a dozen ads quickly and chuck them into the Facebook machine. I guarantee at least one of them will fly. 

You can discover our Facebook strategy here.

Focus on what you can control

There's little point in worrying about events outside of our control. Which is why over the last 8-weeks we've built out a pipeline of new products that we can sell to our existing customer base.

A new hair mask is launching end of this month. Which will crush. We then have hair wraps, a new shampoo and larger bottles of our existing products launching in the next 6 weeks. 

The aim of the game is to increase our customer lifetime value. It's much easier (and cheaper) to sell more products to existing customers than acquire new ones. 

As long as we can breakeven on that first new customer purchase, I'm happy, as I know 20-30% of people will re-purchase later on. And this is where the profit lies. 

How to validate product ideas

So many brands launch products that no-one wants. So how can you validate a new product before you've even requested samples from your manufacturer? Just ask your customers what they want. 

We've been thinking about launching a new refresh spray yet didn't know 100% what core benefits it should have. So we simply dropped the below message into our private customer group. Within half a day we had 76 comments from customers telling us what they wanted this product to do and why. 

Their feedback has revamped our initial plans and we can now go away and create something OUR CUSTOMERS want, not what we think they want. 

This not only significantly reduces our risk, yet also makes our customers feel part of our brand.

We're now going to build this product each step of the way with their help. 

Book Recommendation

Decoded: The Science Behind Why We Buy 

Over the last 3-years I've invested heavily in understanding consumer behaviour. I believe it's critical for anyone who sells any form of product or service. 

I read this on holiday last week and had pages full of notes. It breaks down how brands such as Nespresso, Apple, Nike tap into the human brain to convince them to buy their products. 

Interesting and actionable strategies for any brand/agency. Click here to buy it on Amazon. 

Wrap up

Next month I was thinking about breaking down the launch strategy for our new hair mask. What went well, what didn't, what we'd change for the next product launch. 

In later newsletters I'll also break down how 70% of our Facebook spend drives traffic to pre-sell pages and why I don't plan on ever employing anyone at Merwave. 

If you have any questions, then just reply to this email. Happy to help.

Till next time.

Tom