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tuff-facebook-ads-for-subscription-businesses

How To Run Paid Acquisition Campaigns For Your Subscription Business

We sometimes get questions about how other clients work with Tuff to reach their growth goals — so we’re sharing some stories to help bring our services to life. Meet Beer Drop.

Beer Drop is an all Colorado beer subscription delivering only the freshest beers from Colorado’s best small breweries you won’t find in stores. 

As a growing business, Beer Drop came to Tuff looking for a growth marketing partner that would help scale customer acquisition leveraging ppc and paid social. With clear goals and an aggressive testing plan, we’ve worked closely with Beer Drop to continually hit our growth goals and customer acquisition targets. The Beer Drop team works strategically on the product while the Tuff team is responsible for executing growth strategies that deliver quality traffic. This combination, so far, has been pure magic. 

  • In the first month, we started slow. We focused on audience research, targeting, and message development. We validated that Facebook and Google were the right fit for Beer Drop and could successfully deliver subscribers. 
  • In the second month, we tripled our budget and went for scale. We expanded our geo-targeting, introduced video, and refined the sign up flow. 

From initial launch to today, as an integrated team, we’ve been able to increase subscriptions by 531% while simultaneously driving down cost per subscription by 61%.  

Building and optimizing a customer acquisition strategy on Facebook and Google to get results like this is not easy. It’s not rocket science either, though. If your execution is data-driven and marketing and product can work as one, you can see results like this, too. 

Talk to your existing customers

When it comes to successful ppc and paid social campaigns, we spend 50% or more of our time understanding what the customers’ needs are. This is so often overlooked but incredibly critical. You have to know who your target audience is, what their problems are, and how they want to interact with you. Having these questions explicitly answered will allow you to build a much stronger customer acquisition strategy on Facebook and Google based on both qualitative and quantitative data.

During this phase, we like to: 

  • Talk to customers 
  • Read customer reviews 
  • Read competitor reviews 
  • Study social channels and followers 
  • Follow Google Analytics flows and analyze heatmaps 
  • Analyze Google Analytics audience data

Test different audiences and messages

When it comes to paid channels, especially Facebook, it’s easy to narrow in on visuals. This is important, absolutely, but don’t get stuck here. It’s more important to test early and often with multiple audiences than to spend weeks on creative development. 

At Tuff, for Facebook audiences, we take the 80/20 rule. We launch campaigns with 8+ audiences, find the top performers early and push spend to them, and then kill the rest. We did this with Beer Drop, too. In month one, we launched with 45 audiences across 5 campaigns. In our second campaign launch, we only launched with the top 30% of audiences in phase one. 

For Beer Drop, “top performing audiences” meant audiences that purchased subscriptions. This isn’t always the case though. When you are evaluating success and making audience optimizations, you have to link back to your campaign objective. Did you optimize for reach? Did you optimize for clicks? Did you optimize for sales? You need to evaluate campaign performance against the action you told Facebook you care the most about. 

Focus on your lowest hanging fruit

If you’re testing the waters with paid social and ppc, if you can focus on the low hanging fruit, do it. With limited time, money, and people, you want to put your best foot forward first. For subscription-based service, that could be: 

  • People who’ve added stuff to cart and have purchased
  • An email list you’re trying to reactivate
  • Retargeting audiences to a specific landing page 

That said, I’ll be honest, for Beer Drop, we ignored this completely. Beer Drop is based in Colorado and has more brand awareness in this market than any other state in the US. Our initial plan was to experiment with campaigns in Colorado because we thought the existing brand presence would help us convert at a higher rate. We changed directions before launch because of our overall business objectives. We needed to find out if paid acquisition would work in cities and states that had never heard of us before. It’s a balancing act really, how do you pair business objectives with the right experiments to give them the best chance to be successful? 

Optimize for subscriptions and not clicks

For Beer Drop, we tested out two types of campaign objectives. We ran a batch of click objective campaigns and a batch of subscription campaigns. This is an important distinction because it influences what optimization and bidding options you have throughout the campaign setup and ultimately how the ads are served. 

Our click objective campaigns, example below, we developed around a “quiz” concept where we wanted to drive as much traffic as possible to the quiz, collect an email, and then retarget. The engagement and click stats were bonkers. To no one’s surprise, people love beer quizzes almost as much as they love beer. Although we had incredible results here, we ultimately killed it because it wasn’t helping with our end to get more subscribers at an efficient cost. 

Our subscription objective campaigns, example of one of the ads below, were setup using custom conversion event tracking. We place code on the subscription confirmation page and tell Facebook to help us get our ads in front of people likely to subscribe. This doesn’t always work for newer brands or startups like Beer Drop but for us, because of our data-driven target and user-specific copy, it worked. 

Using real photos as social proof

Users have become pretty numb to overproduced videos and fancy creative. A few years ago the conversation with paid, especially Facebook, was “how do we stand out enough to get someone to stop scrolling?” but now, it’s “how do we get more real, more authentic, and blend in with our target audience?”. This is exciting for the small budgets and teams who want to test and experiment often. 

Here is a good example. The video below has no editing, took 3 minutes to film, was shot on an iPhone, and ever since launch, has been our best performing ad in almost every campaign: 

124 comments and 43 shares in two weeks? Yup, yup! 💪

To get this right, using real photos to drive results, revisit the “Talk to your existing customers” section of this post. It’s the one consistent thing you have to do all the time!

Learn from your traffic and make user flow optimizations

It’s not just about impressions or clicks, right? It’s about driving actions and subscribers. The customer acquisition equation is only complete when we focus as much on pre-click as post-click (and engagement and retention but let’s stick with acquisition for now!). 

When someone clicks on your Google ad or Instagram ad, what happens next? We like to use tools like Hotjar, Heap, and Optimizely to learn what users are doing when we actually get them to landing page or website. How can we make things more clear on the page, provide the right value, and remove friction? 

Beer Drop’s product team led the charge here. They’ve made small tweaks and adjustments at every stage of the user flow over the course of the last few minutes which has inched our conversion rate up and up. We would never see this type of growth, a 531% increase in MoM subscribers, without a product team committed to user improvements.

When it comes to paid social and ppc, remember that 90% of your traffic from these channels will be on mobile. Review your page in mobile, design in mobile, and make improvements based on mobile behavior. 

Use enough budget to test and get data to make better decisions

There’s no one set budget for starting out on Facebook and Google. When we think about test allocations, we start with the goals: “What do I want to learn from my paid advertising? What is the end goal? 

In the first phase with Beer Drop, we set out to answer:

  • What are my users responding to? 
  • Can I prove market fit on Facebook? 

We’ve seen that in order to answer questions like this, that you need daily budgets in the $200 to $400 a day range to get meaningful data. And be prepared, the early months are often not very profitable. I know everyone wants results, heck I’d be lying if I didn’t say Tuff is driven solely by results, but the trick is to have a smart testing plan to get data that’s statistically significant to your paid social and ppc efforts. What you prove on $100 in spend is not significant enough to say that it’s going to be the same if you spent $10,000. 

Whether you’re just testing the waters or ready to scale, figuring out how to acquire new customers on Facebook and Google is difficult. We’ve spent the past few years working with all kinds of different businesses, with small and large budgets, across a range of industries to help them figure this out. We’re still partnering with Beer Drop closely and will update this post with future results, challenges, success stories, and more. 

In the meantime, if you want to explore more about how to scale your customer acquisition with Tuff, or want a first-hand look at the data showcased above, touch base to set up a free, 30-minute growth strategy session with our team. We’d love to learn more about who you are and what you do so that we can help you find your way to the next level.

We’d love to work with you.

Schedule a call with our team and we’ll analyze your marketing, product, metrics, and business. Then, present a Growth Plan with actionable strategies to find and keep more engaged customers.

A Step-by-Step Guide for Running a Chatbot Test in 2019

It’s pretty dang hard to get around the internet these days without hearing about chatbots and ‘the future of AI’. It’s a hot topic and something we’re pretty excited about.

I’m pretty strict about what I subscribe to and here is my inbox filtering for AI (so not including emails using chatbot specifically).

We’ve been learning more about what customers need and expect from their online experience, and helping clients run a chatbot test to see how the channel converts. It can serve as a great user acquisition channel, depending on your target audience.

In this post, we’ll briefly cover what opportunities a chatbot can help you take advantage. But, the true intention is to give you a framework and template for running a chatbot test on your own to see if it works well for your customers as well as employees.

Tell me more about chatbots…

Chatbots are Artificial Intelligence (AI) programs that can process and respond to simple queries from your audience like an interactive FAQ. You’ve seen them across the internet, often in the bottom right corner of a web page. It looks similar to live chat but with programmed data on the other end.

Screenshot of Drift.com's homepage with a chatbot in the bottom right corner.

When a company is utilizing a chatbot, they’ve taken the time to teach the chatbot the answers to questions they expect a customer to ask.

It works a bit like a flow chart:

Examples of companies running chatbots…

  • Duolingo uses chatbots inside their language teaching app and allows users to practice conversation by simulating text exchanges. [Learn more about the bot here]
  • Apartment Ocean is a chatbot built to help real estate agents qualify leads and learn more about potential customers. [Learn more about the bot here]
  • Pizza Hut allows people to order pizzas and reorder their favorites via a Facebook messenger chatbot. [Test out their bot here]
  • Casper, a mattress company, has a purely promotional bot that is active from 11pm to 5am to ‘keep you company when you just can’t fall asleep’. While it can chat on many topics from Stranger Things to Seinfeld, it also takes the opportunity to plug their mattresses from time to time. [Learn more about the bot here]

Why should I run a chatbot test?

Do you ask customers to fill out a form?
Chatbots have helped create a shift toward something being coined as ‘conversational marketing’. You can use chatbots to replace long forms with more intuitive and natural conversations. You can set up a bot to ask those same qualifying leads your forms are searching for. Depending on the potential customer’s answers, the chatbot will send them through the right flow.

Looking to help your sales agents save time and close more leads?
A chatbot can automatically qualify leads and get them to the right agents. As research from InsideSales.com and the Harvard Business Review shows, even if you wait just five minutes to respond after a lead first reaches out, there’s a 10x decrease in your odds of actually getting in touch with that lead. After 10 minutes, there’s a 400% decrease in your odds of qualifying that lead. By automating this crucial step, your chatbot can quickly disqualify leads and get the most promising ones quickly to your agents.

Want to improve your customer experience?
There’s never going to be a future where Artificial Intelligence totally takes over because humans and chatbots are good at different things. Leaning on our strengths and the strengths of chatbots can make for a power team. When a chatbot pilot program was initiated in a telco company, it could handle 82% of common queries in customer service. After 5 weeks of tweaking, analyzing, and optimizing by human agents, its success increased to 88%, according to Accenture.

Let’s check out the data

In the 2018 State of Chatbots study from Drift and friends, they surveyed over 1,000 internet users in the United States and made sure to match their audience to represent the U.S. adult online population. Here’s what the group had to say about their current online experiences:

In addition to helping people get quicker answers, you can use the chatbot data to make changes to your website and try to eliminate the root cause of the most frequently asked questions.

Do you have customers spanning multiple generations?: One preconceived notion I had about chatbots is that they were better suited for companies with younger target audiences. I was excited to find data saying quite the opposite. In that same 2018 State of Chatbots Study, Drift found that Baby Boomers (age 55+) were 24% more likely than Millennials (age 18-34) to expect benefits from chatbots in five of the nine following categories:

I’m in. How do I run a chatbot test?…

We feel really great about the future of chatbots and their ability to improve customer experience and to deliver higher quality leads. That being said, before jumping in with both feet we suggest running a chatbot test to validate or invalidate whether it works well for customers and team.

We’ve organized a super simple experiment to help sales teams run a chatbot test and see if it could work for them:

  • Step 1: Develop a single hypothesis about what the chatbot will deliver
  • Step 2: Explicitly Identify the metric that will help you validate or invalidate your hypothesis
  • Step 3: Get benchmark data for that metric. You may be able to pull this from your current process or will need to build time into your experiment to capture it.
  • Step 4: Test chatbot
  • Step 5: Compare the two data sets to see if your hypothesis is valid or invalid.

Here is an example chatbot test:

  • Step 1 – Hypothesis: Implementing a chatbot will decrease the amount of time it takes to make first contact with a lead.
  • Step 2 – Metric: Hours from form filled to first contact.
  • Step 3 – Benchmark data: Depending on the size of your sales team, pull the data from at least 10% of your sales agents. If you are already measuring this metric, awesome! Just pull it and proceed to Step 4. If not, spend 10 days (without the agents’ knowledge) measuring this.
  • Step 4 – Test: There are a number of chatbot solutions out there. We recommend Intercom’s 14-day free trial because it’s a lean and easy way to get started and they have great analytics. Have the same agents you used for benchmark data spend 10 days using Intercom’s chatbot to qualify and make initial contact with leads.
  • Step 5 – Compare: In a spreadsheet, take the data from your two sets of 10 days and compare your metric, ‘hours from form filled to first contact’. Which one has a lower average? Does one have a better conversion rate?

Continued reading about Chatbots:

Ready to run a chatbot test?

If you’re interested in testing out a chatbot for your sales, customer success, or customer support team, we hope this experiment helps. We’re also always available to talk through ideas and implement an experiment tailored to your team and goals. Check out a

with Tuff.

We’d love to work with you.

Schedule a call with our team and we’ll analyze your marketing, product, metrics, and business. Then, present a Growth Plan with actionable strategies to find and keep more engaged customers.

tuff-user-acquisition-channels

How to Find Your User Acquisition Channels

tuff-user-acquisition-channels

Figuring out which user acquisition channels are going to drive the most growth is key to your business success.

Acquisition channels are diverse and plenty. With many options, how can you create a channel strategy that will really accomplish your goals?

Few companies can afford to actively use more than a handful of channels and, even so, it’s tough to figure out which ones are actually delivering the right customers.

I’ve spent the past few years working with all kinds of businesses across a range of industries to help them figure this out. Instead of sharing a whole list of tactics you can try out yourself, I’m going to share the one consistent strategy I’ve seen add more to the bottom line than any specific channel –  trial and error.

It can seem overwhelming at the start, but testing and optimization should become part of your growth DNA. What might seem like a steep learning curve will turn into a path with long-term payoff when you get it right.

Let’s dive in.

Focus on your users, not your channel

There’s so much out there, it’s often hard to know where to start. As a business owner, you might feel a lot of pressure to continue coming up with new ways to connect with and reach your audience.

However, there’s one fundamental thing you need to focus on and continue focusing on from day one. To successfully manage your tests and increase the chances of success, listen to users and understand their perspective. User research is a priority that should, in some way, find a home within the design of any new channel or tactic strategy.

Whether you have 1,000 customers or 100,000, focus on the already successful users and uncover the user acquisition channels that converted these people. Uncover as much as you can about these people to help your growth team understand what triggers and motivates them to take action. What was their user journey with your product or service and how can you repeat it with future customers? Doing this on a regular basis will give you the right lens to narrow the types of tactics and channels that are most likely to drive a positive response from prospective customers.

Set clear goals

If you’re early in your business, finding growth channels is about traction – not scale. With that in mind, before you start experimenting, make sure you’ve set clear goals you’d like to achieve – even if you don’t have much data to base them on.

Whatever user acquisition channels you attempt, testing and refining campaigns will be a critical part of the process. It’s important to measure the ROI of your efforts by channel so that you know which need a bit of tuning and which need a complete makeover or be dropped.

There’s been a lot written about goal-setting! And, you might already know what works best for you. Here are some of our favorite resources if you’d like to learn more about setting intentional goals:

Create a ridiculously long list of channels and tactics

Have a million and one things rattling around in your head? Good! Just get it all out there.

A brain dump can help you organize your thoughts and feel more in control, especially when you use it to create a growth list like this one.

Get your team together and build your user acquisition channels list – write it down, type it out, drop it into Google Sheets, whatever you want to do. Don’t worry if it’s unorganized or sporadic, you’ll restructure it later.

A chart of possible user acquisition channels

 

Evaluate channel possibility

So you have a big list, now what?

Even lean testing means an entirely new set of processes, resources, and outputs, so it’s important to be intentional with how you and your team spend your time. Attempting to drive growth on too many user acquisition channels at the same time will divide your resources and dilutes your focus.

One way to manage your tests and increase the chances of success is to spend time upfront evaluating emerging channels—the idea is to test and get early access to good opportunities, but you can’t do everything.

Consider the following questions to help you prioritize channels with a “high propensity” to work for your business:

  • Does the channel have an audience that roughly matches your customer personas?
  • Is this channel crowded or emerging? Are your competitors there and will you have to shell out buckets of cash to play?
  • What part of the buyer’s journey do you believe the customer is in when they’re spending time on this platform? How does that align with your business goals?
  • Can you effectively filter your ads to reach only your target audience to better manage your costs and get the best bang for your buck?
  • Is this a compounding loop? Will this channel enable our users to grow the product for us?

Assemble a team to make it happen

We have seen a lot of founders focus on growth strategies. The starting point for that is almost always, “What should the structure for the growth team be?”

As we’ve outlined in the process above, the first step is defining the user acquisition channels that will or have the biggest impact on growth, and working your way backward to the team needed to execute effectively. When you do that, you will quickly realize that to execute on your ideas you need a cross-functional team with a mix of engineering, product, data, design, marketing, and sales skills. The mix will depend on the particular channel you test.

Which is why I love that we are building Tuff not just for our clients, but also with them. We believe the future of growth agencies is in being value drivers, rather than service providers. Sure, we have a number of top-notch services we regularly execute. But, it’s bigger than that.  In order for you to find traction and scale growth for your business, you need a customizable, plug-in growth team.

We’d love to work with you.

Schedule a call with our team and we’ll analyze your marketing, product, metrics, and business. Then, present a Growth Plan with actionable strategies to find and keep more engaged customers.

tuff-grow-email-list

How to Grow Your Startup’s Email List

Person typing on laptop for growing email list

We sometimes get questions about how other clients work with Tuff to reach their growth goals — so we’re sharing some stories to help bring our services to life. Meet Daycation.

Daycation is a Miami-founded startup that allows people to book “daycations,” gaining access to hotel amenities without staying the night. Traditionally, people must check in as hotel guests to access amenities like pools, lounges, hot tubs, gyms, and private beaches. Now, with Daycation’s network of beautiful, on-demand hotels, users can visit their site and easily book hassle-free day experiences.

We worked with Daycation to grow their email list. In two weeks, we added 1,000 new subscribers at an acquisition cost of $1.15 per subscriber. In addition to the list growth, 25 of the new subscribers booked a Daycation within 30 days of joining the email list.

Why Daycation Focused On Growing Their Email List

For starters, email has been the #1 most profitable marketing channel for ten years in a row. From this one statistic alone, it isn’t hard to see why you need to grow your startup’s email list. It is a key piece of any well-rounded user acquisition effort.

From a growth perspective, it is the statistics on customer acquisition costs that make email a no-brainer for a business like Daycation. According to McKinsey, email is 40 times more effective at acquiring new customers than Facebook or Twitter.

While we had launched a number of acquisition channels for Daycation, including paid social and chat, we were looking to build an email list of valuable subscribers. Because Daycation is a transactional marketplace, we were confident that email marketing would be a more effective channel than social for driving people to their website and getting them to sign up and purchase a day pass.

So, how did we attract 1000+ new subscribers in two weeks?

Let’s dive in and take a look.

Daycation’s Playbook:

  • Everything begins with great content or value. People will find your site because of your amazing content. They will keep coming back because you provide relevant value. Your content will be the foundation of what you email to them, which will be the reason they stay subscribed (or hit unsubscribe!). For Daycation, we decided to run a cabana giveaway in Miami. In exchange for an email address, people entered for a chance to win a day pass and cabana for four at one of Miami’s top luxury pools.
  • Once you have the right content, you need to start putting your landing page together. Creating a high converting landing page isn’t rocket science. However, creating an effective page involves more than simply designing something that looks good. For Daycation, we leveraged these nine components of a killer landing page and mocked a wireframe using InVision.
  • The page went live, and we needed to get the word out. For Daycation, that meant adding a banner to the homepage of the site, as well as tapping into paid social. We launched Facebook and Instagram campaigns, targeting a specific subset of customers who were most similar to their best current customers.

Screenshot of a Facebook ad for Daycation

Screenshot of an Instagram ad for Daycation

  • Every interaction with someone is a chance to influence their opinion about your business. The minute you collect an email you can start providing relevant value and the message you send is critical. Using Customer.io, when someone signed up for the giveaway, we triggered the confirmation email below. For a large percentage of this list, this was the first email they ever received from Daycation. This is a large opportunity to make a lasting first impression. Try your best to step away from a transactional mindset and show your companies personality.

Screenshot of an email from Daycation

  • We ran the giveaway for two weeks, spreading the word to as many people as possible. Once the campaign ended, we announced the winner through email, sending the entire list a $10 off coupon code on their next Daycation.

Screenshot of an email from Daycation

The Results:

Duration:
2 Weeks

Ad Spend:
$1,215.76

New Subscribers:
1,264 new subscribers

Cost Per Subscriber:
$1.15

Subscriber Purchases (within 30 days):
25

Next Steps:

Our focus on email didn’t end with the cabana giveaway. You’re not just looking to grow your startup’s email list and present a nice vanity metric. It can be easy to just focus on building the list and see the number of subscribers growing and call it a success. Once you have a healthy list of emails, you need to continue focusing on the value you provide to your users with email. What is the end goal and conversion you’re looking for them to make? 

We’d love to work with you.

Schedule a call with our team and we’ll analyze your marketing, product, metrics, and business. Then, present a Growth Plan with actionable strategies to find and keep more engaged customers.