Brand VS Performance: Lessons Learned Finding the Balance | The Brand Builder's Playbook #2

Welcome to the Brand Builder's Playbook!

The Brand Builder's Playbook is a newsletter that contains the collection of lessons learned about how to build very profitable, fast-growing brands people love, informed by mistakes made along the decade-long journey to a 9-figure acquisition and 10-figure IPO.

Introduction

If you're looking to get more profitable, navigating the diminishing performance of your "performance" marketing, or if you know that investing in building brand is essential, but the "how" is less clear, this post is for you.

Here are my mistakes and biggest learnings around finding a balance of Brand building and DR in hopes you can skip the pain and get to the balance that works for you.

A) Why I got overly-reliant on bottom-funnel, short-term revenue-maximizing strategies and tactics:

The early days of Chubbies coincided with good ol' days of Facebook ads. They did work at driving revenue, which was my definition of success at that time.

The dopamine hit from putting a dollar in the Meta Machine and getting 6-10 out was ridiculously addictive

However, as with any addiction, the need for more dollars in to get the same dollars out kept gradually increasing

But it was hard to feel that pain since the change was so gradual, peppered with times where performance would improve, which roped me back in and kept me convinced that if I just wrote a better tagline or found the perfect static asset CTA position, we'd unlock the ROAS we saw in the early days.

B) How I found out it was no longer working

I started to learn about vanity metrics, metrics that matter, and to update the definition of success to go beyond maximizing ROAS and Revenue

One example was the composition of new customer revenue traffic sources.

A larger and larger portion was connected to paid traffic sources.

Therefore, the proportion of new customer revenue from owned and organic channels was decreasing as a percentage of the total, making it more and more expensive to hit growth goals.

Stepping back and looking at that data over a number of years made it clear that change was needed.

C) As the importance of growing a resilient base of owned and organic new customer acquisition became clearer, it also became clear that greater growth, and more profitable growth, could come from that balanced approach.?

To be clear, a balanced approach does not mean you have to immediately turn off all DR ads, discounts and promotions.

They're essential and accretive when they're driving growth on top of a stronger and stronger foundation of that resilient base of owned and organic new customer revenue.

D) How to find that balance

Being prescriptive here wouldn't be helpful since all brands are different.

But if your answer to any of the following questions is no, it might make sense to start spending more time thinking about building that resilient base of new customer revenue coming from owned and organic traffic sources (AKA explore some shift from 100% DR to some version of a balanced approach):

1. Are your contribution dollars AND contribution margin both increasing?

2. Are you increasing the dollars and % of new customer revenue coming from owned and organic traffic sources?

3. Is the % of your revenue on discount going down over time?

Hope this helps

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