[Case Study] 3 Facebook Advertising Growth Strategies To Fuel E-Commerce Growth
When H&H Outfitters (STLHD Gear) came to us they were spending less than $10,000/month in online advertising, with mounds of opportunities ahead of them. Like many apparel startups, they were scrappy. The guy who was running their Facebook ads, was the guy who was designing their apparel, printing shipping labels, responding to Instagram comments, keeping track of their COGS and managing the day-to-day. Meet: the do-it-all owner/founder of STLHD Gear, Alex Hudjohn.
Before working with us, H&H Outfitters proved a few important things that were instrumental to the success of the partnership; they had a great product/market fit, an existing following of niche fishing fanatics, and they had already proved Facebook and Instagram advertising could work for them. Before working with us H&H had put in a lot of hard work to get them to a point where they could really benefit from working with hyper-specialized Facebook ads agency.
The biggest problem that H&H Outfitters was facing was knowing how to scale and grow their fishing lifestyle apparel brand through digital advertising while finding the time to create, optimize and launch ads, as well as keep up on the ever changing world and best practices involved with running successful Facebook campaigns.
Audience overlap. Competing audiences. Ad frequency. Audience frequency. The list of daily optimizations had not only fallen by the wayside, H&H didn’t know the right levels to pull to scale their ad spend while maintaining a high return on ad spend (ROAS).
Furthermore, in those early days of growing a business, every penny counts. There’s not a lot of room for test budgets and brand awareness campaigns when you’re self funded and carry a lot of skus.
This is the foundation for the case study. This is not a case study about impressions and clicks. This case study is about the hard work and and follow through on a comprehensive strategy that quadrupled a brand’s revenue over nearly 3 years.
Of course, a tremendous amount of work went into growing this brand through Facebook & Instagram advertising —much more than we could ever put into this case study. But if we had to pick the strategies gave us the most outsized results, we would narrow it down to these three;
- Converting new customers to fuel growth
- Setting the groundwork for Q4 months in advance
- Targeting past purchases increase Lifetime Value (LTV)
Let’s take a deeper look at how we approached these three strategies and what worked:
Finding and Converting New Customers To Fuel Growth 80% YOY
There are two ways to grow a business: 1. You can find new customers and 2. You can get more from existing customers. We’ll hit on the second point below, but finding and converting new customers who had never heard of STLHD Gear was instrumental to their growth success.
Here’s how we did it:
- We focused on building ads with social proof – AKA likes, comments and shares on top funnel cold audience ads so that when people were hit with the ad it would give them reason to pause to see what all the buzz was about.
- We pushed ads through learning phases to ‘active’ status to get better results. We tested ads, audiences and budgets until we reached active status on ads – so the algorithm could give us steady and predictable results.
- We launched product carousel ads in addition to traditional formats. We launched catalog ads with a scaled down set of products most appealing to new customers.
- We retargeted new customers with dynamic product ads to increase touch points and interest in the brand with a range of our products and different messaging and copy to inspire conversion; the hook, hook, JAB approach.
- We focused on the “Gateway Drug” Entry Point to the brand. With fashion/clothing brands, there’s undeniably a “gateway drug” product that appeals to a mass audience. For STLHD Gear, we focused on three different designs to bring people in for their first purchase; a fishing/baseball design; a bigfoot fishing design; and a bigfoot social distancing design. We’d test against these designs constantly, hoping to find new winners. Ultimately, these three designs/ads were used exclusively with a cold audience and not with our retargeting to acquire a first purchase.
“Fall Line helped us look beyond our core customer base and helped us grow our business into sections of the outdoor consumer group that we may have otherwise neglected.” – Alex Hudjohn.
“Fueling The Pump” Strategy: Building Warm Audiences To Target During The Q4 Holiday Season – Resulting in 4X ROAS & 60% Increase In Sales
There’s a saying in e-commerce advertising that Q4 starts in July. This is certainly the case for e-commerce apparel brands. The prep work to prepare your website, ads, pixel, data and strategy starts well before BFCM, and even well before Oct. 1. We work hard all year to best set ourselves up for success when we know consumer habits change and consumers have a higher propensity to purchase, and purchase more. Here are a few triggers we pulled beyond simply running sales and increasing spend over the holiday season:
- We went beyond purchase conversion campaigns to build warm audiences. Leading up to the holiday season, we launched different types of campaigns – view content campaigns, video objective campaigns and engagement campaigns to build our Facebook retargeting audiences.
- We offered free products to build our purchase event and email list. We tested different audiences by targeting them with (1) a free desktop wallpapers and (2) a free comic e-book. The customers were able to checkout on the website with their free purchase and were then added to the email list and post-purchase campaigns.
Our main goals for the holiday season were to (1) increase average order value (AOV) and (2) make sure we weren’t leaving money on the table and focusing on growth. By running specific promotions, and highlighting certain “add on” stocking stuffer products we were able to increase AOV by 40% over the holiday period. By increasing our spend to match holiday CPMs (cost/1000 impressions) by 450% compared to our typical ad spend, open up our retargeting audiences to a wider period of time, and focus our ads to those who had already heard of us at least once we were able to increase our revenue in Q4 by 63.8% year over year while maintaining a 4X ROAS.
- We steered clear of a blanket discount, and instead incentives people to purchase more with a tiered promotion to increase AOV. We ran a promo where if customers spent over $100, they got a $25 gift card, if they spent $200+ they would get a $60 gift card. In combination with a Shopify app, customers were nudged to spend more to get the kickback gift card.
- We utilized a custom collection of stocking stuffer gifts within our product catalog. By offering up items like the limited edition “Merry Fishmas Coffee” and other highly giftable items we increase our AOV.
- We created a curated experience with landing pages dedicated to gifts for him, her, kids and gifts under $25. In combination with promoting these curated gift experiences on email, we also created ads to drivepeople to landing pages with our most popular items to help the sometimes confused shopper with gift ideas.
- We used broad Dynamic Product Ads during this time to reach a cold broad audience and let the algorithm work it’s magic and not set audience parameters. We tested this strategy throughout the year, and never was able to duplicate the results we got during the holiday season (4X return) – proving that some strategies work better during specific times of year.
To say that this holiday promo was a success was an understatement. Because we worked with H&H the previous holiday season as well, the bar was set high and the typical levers to pull had already been pulled the previous year when we increased their revenue 68% compared to the previous year, so increasing revenue another 40% year over year was no easy task.
“Fall Line worked with us to tailor ads targeted to customers who landed in all the active funnel categories. They helped us create a funnel before the holiday season hit, that we could convert at peak time.” – Alex Hudjohn
Creating A Strategy To Increase Repeat Customer Rate By 26%
Earlier in this case study we mentioned two ways to grow your business; 1. finding new customers and 2. getting more revenue from your existing customers. Getting your existing customers to purchase again seems simple in theory, but like everything else in this case study the devil is in the detail. Here’s what worked:
- We constantly updated and tested ad creative and products to avoid ad fatigue. Within our Facebook funnel strategy we identified a group of people who were engaged with the brand who had a high propensity to purchase – given the right ads. We made it priority to update new ad creative to this group at least once a week. Every ad and product was guilty until proven innocent – meaning when rotating in new ad creative we always tested against what was working and converting. Only until it proved it was a highly converting ad would it get a spot within our coveted evergreen ads. Even our evergreen ads for this segment of our audience have a limited shelf-life until we need to innovate again.
- We launched a post-purchase ad strategy to increase LTV. Instead of making a big assumption that our customers wouldn’t purchase from our brand again right away, we served them a buy one, get one offer that converted all of time at 6.52X (and it’s still going).
- We use Campaign Budget Optimization (CBO) across our repeat customer campaigns to understand which audiences were most likely to purchase again. We then took those insights and bid down on non-performing audiences and scaled up top performers to get the best return.
- We set up a retargeting funnel based on the last time people visited the site. Nothing is worse than being hit with the same ad or the same two ads for 30+ days straight – and this strategy also doesn’t help you gain insight into when people are likely to purchase. We set up an add to cart and view content retargeting strategy where the ads and messages would rotate every 5, 15, 20 and 30 days. Ultimately, our insights showed that between 20-30 days we weren’t able to run a profitable campaign, and therefore turned off the ads in order to not waste budget and annoy potential customers.
The power of social advertising is being able to target the right person, with the right message, at the right time. The message is going to be completely different for someone who has never heard of your brand, vs. someone who has already heard of you vs. someone who has already purchased. This message also changes throughout the course of the year as online shopping habits change. Taking each segment of your audience and looking at them differently throughout the year is key to Facebook advertising success. Facebook advertising will never be set-it and forget it for this reason.