Increase ROAS by 50% Optimizing Your Sales Funnel with Omnipresent Marketing

The Customer Journey From Complete Stranger to LifeTime Consumer?

The purpose of running paid traffic is to capture attention from potential new prospects to come across our ads multiple times to effectively purchase our products and keep coming back.?

The sales funnel process is comprised of these universal principles of:

Creative > Visitor > Landing Page > Checkout Stage > Complete Purchase?

Now a sales funnel can be expanded from a 4-stage process to a 8-stage process depending on upsells, discounts, or information shared based on average sales cycle.

Variables dependent on the Sales Cycle

As consumers from our adverts aren’t intentional with purchasing from our brand when they first open up a social media platform, we have to keep this into account when developing the sales cycle of customer archetypes.?

A product priced at $20 has a lower barrier to entry to drive a sale from an average American customer than a product priced at $100+.

From a TikTok perspective, 95% of traffic derives from Smartphones (Apple + Android) and 5% derive from laptops.

A $20 product has an ROI justification to it and a shorter sales cycle because of price-point and the ability for a consumer to purchase off impulse.

A product above the $100 threshold seamsly has a longer sales cycle because of pricing being out of the impulse purchase range.

Impulse Purchase

Impulse Purchase is simply the relation of a prospect to advert ratio in which a sales is derived off from frequency of advert.

Conversion = frequency(advert / # of visits)?

An impulse purchase has a frequency of 2 or less times a prospect needs to come across an advert to be willing to buy from an initial viewpoint without ever having prior knowledge of the brand.?

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Complete Purchase is the single variable dependent upon pricing.?

Platform Targeting

The ratio at which an impulse purchase is derived from is solely reliant on the advertising channel itself and audience demographic.

Each platform has a unique formula used to lower CPA and Increase AOV.

Ex.

If Brett had market-validation across Facebook already with spending 100k/m with various static images and carousel ads and tried to copy and paste assets onto TikTok, he would not get the same results.

Why is each platform different?

Google, TikTok, Meta, Snapchat, and Meta are not all the same platforms.

They provide different experiences per each user.?

A person who utilizes Google is mainly trying to acquire information about a certain topic as Google is an SEO driven Search Engine.

?A person who utilizes Youtube is consuming long-form content horizontally based on content creators or information one is trying to seek from an individual or group.

A person who utilizes TikTok consumes content very rapidly as the platform itself has videos no longer than 30-45 seconds on the FYP. Content is very different here than Google and Youtube.

A person who utilizes Meta simply is either searching for entertainment, news, community, or catching up with friends.

Relationships amongst Google, Meta, Youtube, Instagram, and TikTok

Each platform is incentivized to keep the most amount of users engaged on their software.

The more time a user spends on a platform, the more advertising budgets get allocated to a demographic in which these platforms make the majority of their cash-flow for having an engaged audience.?

Different platforms = Different algorithms?

After spending 500k in total ad spend this Q4 alone, here are my conclusions of platform relationships amongst each other:

1. Optimize sales funnel for TikTok and you are able to duplicate results across Meta with same exact Creatives, Landing Pages, and Offers
2. If you try to replicate Meta success across TikTok without optimizing your Creatives, Landing Pages, or Offers for the “TikTok” Audience, you will see low sustainability and low sales conversions (Some creatives may/may-not work but overall success is stagnant)
3. Google, Instagram, and Youtube are following TikTok’s early success by introducing Reels/Short-Form Content

The Rise of CPMs On Meta?

This recent study was conducted by Kristen McCormick?

Average CPM cost shared across each industry based on data that was derived from January to November of 2022.

With CPMs increasing from $11.54 on average to $14.40, CAC is and will continue to increase overtime as more brands are adopting Meta as their main traffic source for revenue.

Based on concurrent data, in order to scale a D2C brand in 2023, a brand must not only rely on a single advertising channel year over year.

CAC will continue to rise on Meta Year over Year.?

What Platform Offers Less Competition for My Brand?

Depending on your brand’s history and past sales, I’m going to break down scenarios of brands at different revenue points headed into 2023 commonly are facing.

Scenario A) Brad owns a D2C brand in the supplement industry that has been advertising on Meta profitably for the past 3 years. In the past 6-months, Brad saw a drop in ROAS for initial CAC from a 3.4 to a 2.3x. Brad spends, on average, $50k/m in adspend and takes profits from CAC to fund next month’s ad budget. He understands that he must diversify into other platforms.

Scenario B) Susan is bootstrapping here D2C brand in the supplement industry and has limited budget to work with in around 10k in total ad budget. She understands that Meta has high CPMs and Rising CPAs to even break profitability. She is trying to find an advertising that is untapped and offers rapid organic growth on top of paid traffic.

Scenario A + B both share similar problems in that Meta isn’t the platform D2C Brand owners should rely on anymore. Rising CPMs, Rising CPA, and More Competition in common industries.

If majority of marketing mixes for high level D2C brands are dispersed in these sequences of advertising channels:

1. Meta/IG
2. Google/YT
3. TikTok
4. Snapchat

TikTok is still the undertapped channel that has proven significant growth in the past 2-years with other advertising channels copying the “TikTok” fast-paced content elements and algorithm.?

Is TikTok For My Brand?

Data information sourced by Daniel Ruby

Facebook coupled with companies like Google and Youtube have been around since the early 2000s.

TikTok was founded in 2016 and is already the 6th most popular social media platform.

Here is a quick breakdown of TikTok’s revenue numbers since 2017:

2017 - 2020, consistent quarter after quarter revenue growth.

The same is reflected from 2021 - 2022

TikTok offers the ability to capture attention into a growing audience that isn’t saturated with other competitors in your industry.

In order to master the TikTok platform, you have to truly understand the algorithm in which TikTok operates from the For You Page to the Advertising Algorithm.?

How Do I Generate Profitability For My Brand On TikTok?

I want to revisit the scenarios I mentioned earlier from Brad and Susan.

If you fall into a similar position similar to Brad’s in which you have product-market fit and generating consistent sales on Meta but looking to diversify to lower initial CAC,

Here are the Tweaks that need to be adapted in order to become profitable on TikTok:

1. Creative Variations of content
2. Optimized Sales Funnel?
3. TikTok specific audience offers

Creatives are 90% of success on TikTok and 10% is left to Media Buying and optimizing the sales funnel for a “New” TikTok audience.?

From running a TikTok Agency for the past 11 months, the reason why Majority of Brands struggle to generate success on TikTok is not that their product doesn’t solve issues or doesn’t have market-fit on the platform, it’s the amount of creatives produced.

TikTok Algorithm Formula?

In order for you as a brand owner to get sales from Ad Creatives, we have to understand the audience demographic on TikTok.

TikTok’s algorithm is very fast-paced with users having the ability to swipe-up from video to video at any given second.

I highly recommend that if you don’t have TikTok on your smartphone, you download it so you understand what I mean.

This is how the following ad creatives are promoted in-app via TikTok.

Let’s take a deep dive into the Customer Journey and sales funnel:

The breakdown is simple:

User comes across ad creative ??Stops-scrolling ?? Clicks onto the Landing Page ?? Adds to Cart ?? Inserts Payment Details + Address ?? Complete Purchase?

There are 2-single components that must be optimized completely in order to generate a profitable CAC and continuously scale profitably.

1. Creatives?
2. Post-Click Sales funnel optimization

Creatives:

After speaking to 250 brand owners in my career so far, here are the common scenarios I see in the D2C industry:

1. Brands don’t have an internal creative team in place to produce enough high quality creatives month after month.?

1. Brands have a creative team or agency in place but the Creatives made are focused around “looking good” instead of optimized to get a sale at lowest cost-possible.?

1. Brands don’t have a creative system in place to turn 1 video into 6 testable advertising creatives?

1. D2C brands lack the ability to produce sufficient volume of creatives at higher advertising spends

1. Brands don’t have an internal database of content creators they can at their disposal that have already been vetted and gone through creator training

As a brand owner, there are 20 different hats one must carry in order to bring the brand to potential success.?

But a brand’s success is heavily dependent on the quality and volume of content produced.

TikTok is a very fast-paced platform, therefore, the Creatives must have direct relation to what the audience is accustomed to on the TikTok platform.?

The term “UGC” or User-Generated Content has been heavily utilized in the industry but very few actually understand how to make Creatives in a way that lowers CAC.

UGC is simply defined as brand specific content created by individuals who are supposed to “replicate” the buyer's experience with the product.?

This approach is great but creating a video from scratch without any clear direction will not generate profitability on TikTok.

Creating Content That Produces Impulse Purchases

After handing over 1 Million of total ad spend in the past year of 2022, I’ve constructed a step-by-step formula that breaks down the ability to create content that generates profitable sales off of impulse.?

The qualities that make-up a Profitable creative:

• Creatives no longer than 25 seconds
• Scene Changes + Transitions every 2-3 seconds
• Various B-Roll footage
• Story-telling Dynamic?

In order to turn a stranger into a lifelong customer, we must tackle certain emotions with the Creatives.

1. Interest to stop scrolling
2. Curiosity to want to learn more?
3. Urgency to buy this product right now?

In the diagram above, we have a storyline:

• Hook
• Problem
• Failed Solution?
• Intro Product?
• Features/USP
• DEMO
• Benefits
• Desired End Result?
• CTA

1 unique video consists of 9 sectors as shown above.

Each sector is 2-3 seconds long maximum in order to match the algorithm requirements to capture attention and maintain interest.?

The reason we break up content clips into 2-3 second segments is simply to build out variations of content.

Ex.

Creative 1 has a really good thumbstop ratio from the hook - problem - failed solution but sees a dropoff in CTR during the product intro segment.

Creative 3 has a really good thumbstop ratio and has a really high CTR because clip segments from Failed Solution to Product Intro reflect that from data.

We then combine winning elements from Creative 1 and Creative 3 to then launch a new testable ad that is going to generate lower CPC’s and Higher CTR’s because they embody all of the winning elements.??

Benefits:

• Data-Driven Content that increases profitability as content production increases over-time while lowering CAC when coupled with the winning “Audience”

• Reusable Assets that sustain consistency as 1 video can turn into 12 testable ads which in a given month can easily become 120 videos for ads

• Ability to take what works on TikTok and apply that directly to Meta to boost lift in blended ROAS

When Also utilizing an untapped channel like TikTok, audience fatigue is no longer an issue.

You are constantly funneling in new eyes to your brand from a whole different ad channel that increases awareness at just the fraction of the cost via TikTok Ads.

Post-Click Sales funnel optimization:

Creatives affect 90% of success on the TikTok platform.

10% is split across media-buying and optimizing the proper sales funnel.?

Sending Warm Traffic to an Underperforming Landing Page or Checkout Page is the difference between seeing a 50% drop in initial CAC and an underperforming TikTok campaign that can’t pass break-even.

Ex. Below from auditing a client’s account prior to working with my team and I

Let’s look at metrics:

Total Landing Page Clicks: 5943

CTR: 1.04%

Total Add To Cart: 257

Total Complete Purchases: 9

Value of 9 Purchases: $593 USD

When Analyzing Data:

• Cross-reference attribution from TikTok in-platform data to across TripleWhale or Northbeam to verify accuracy before making any changes to the sales funnel

As I broke down early,

The customer journey goes from:

User comes across ad creative ??Stops-scrolling ?? Clicks onto the Landing Page ?? Adds to Cart ?? Inserts Payment Details + Address ?? Complete Purchase?

Creatives are the very first metric I like to analyze to cross-reference data from thumb stop ratio % to CTR %

An Ad Creative close to 1% with a CPC less than $4 and a CPM less than $10 verifies that the creative is promising from initial data from a 1-3 day window.

Creatives from initial testing will never be perfect. It is very rare that your ad creatives will generate above a 2% CTR right out the gate.?

The methodology I broke-down earlier about variation testing increases the performance of potential creatives overtime.

But from the data from the screenshot above, 5943 clicks to the landing page were generated and only 257 potential buyers added to cart.

This data tells me that there is a post-click issue.

Scenarios to analyze for high drop-off rate:

• Landing Page loading speed
• Is Landing Page optimized for IOS/Android Users?
• Does the Landing Page utilize features that enhance user experience (pop-up of products/features + Gifs)?
• Congruence across creators to post-click
• Is there an offer ladder for upsells/discount reveal for “TikTok” only code

General Rule of Thumb:

• Products priced below $50, you want to see an average 10% of prospects who click on the landing page to add to cart (100 clicks ??10 ATC)
• Products above $50, you want to see an average of 6% of prospects who click on the landing page to add to cart

All of these rough metrics are solely dependent on the average sales cycle per SKU.

• Out of the total people who add to cart, 50% should complete payment. (50 ATC ??25 Complete Purchases)?

Every step of the sales funnel should constantly be optimized to reach the highest roas while lowering the CAC.?

There is always room for improvement even if you are at a 3-4x roas consistently.?

Next step in the sales funnel from:

Creatives ??Landing-Page ?? Offers

Offers are the bridge between someone buying more than 1 product or simply even buying any products at all.

The premise around offers is to lower the barrier to entry to get a brand new customer in your ecosystem.

The quality of your product severely affects the LTV (Lifetime Value) of a customer.

LTV = Frequency a single customer buys back from your brand in a 6-12 month time period

This is what separates brands doing multi 7-figs from brands just stuck at 200k - 500k/m in MRR.

After speaking to over 250+ brand owners in my career, some individuals view advertising from a single lens of profitability.

(initial CAC isn’t profitable, I’m wasting money on ads, D2C isn’t for my brand)?

When you're a brand owner testing a new platform, initial CAC will not be profitable. But this is what testing is all about.?

You spend X in adspend ?? Acquire data from creatives + post-click ?? Tweak sales funnel to turn initial CAC into profitability.

A brand who is even just breaking-even from initial CAC is still profitable if their LTV is higher than CAC.???

Offer Structure:

(we don’t want to train new customers to only buy from our brand when a discount is present and they don’t fuel an increase in LTV)?

Here are the offer archetypes that work best:

• Lower initial CAC, discount around higher AOV (Product bundles)
• Buy 2 products and get free shipping?
• Buy 2 products and get your next purchase 50% off
• TikTok “Only” redeemable coupon code?

Consumer sophistication levels have increased post-2020 when everyone had to pivot to buying from online stores.

Every single brand is running a 20% discount or $15 off first purchase. These offers constantly cycle through month after month.

These discounts work with big retail brands with over 100s of SKUS.

As a D2C brand offering less than 10 SKUs, you cut net-profit margins by half simply cycling through discounts big retail brands are utilizing.

Offers around low CAC but high AOV from 1 brand new customer maintains healthy profit margins as although initial CAC may be close to break-even, the increase in AOV boost roas…

You are profitable from initial CAC + LTV with a new customer in your ecosystem.

Backend Email + SMS is simultaneously important here as well.

The focus should of course be to lower initial CAC + Increase AOV from new buyers.

But,

Just like any new relationship with a girlfriend, business partner, or even a friend, you have to nurture that relationship that builds connection after month 1.

Constantly be top of mind for new customers who enter your ecosystem.

Share the community they’ve just chosen to be a part of.

Nurture the relationship so they become a loyal customer for your brand years to come.?

That’s where Email + SMS comes to play.

To Nurture the relationship.

Conclusion:

D2C is an industry that is highly competitive and very fast-paced with market changes.?

Those who capitalize on market changes maintain success for longer periods of time compared to other brands who pull-out of the industry due to lack of positive cash-flow.

In order to capture positive cash-flow and continue annual YOY growth, the concepts I covered today should be applied ASAP.

TikTok will not offer low CPMs for long.

Not constantly optimizing your sales funnel will also reflect in your net-positive cash-flow.

There are 2 paths a D2C brand owner can walk:

1. Build an in-house team

Or

1. Work with an agency that specializes in your current bottlenecks

Let’s look at PROs and Cons for each:

IN-House Team PROS:

• Team-members fall under one umbrella of the brand’s vision?
• Capacity to constantly renovate around new verticals?
• Direct control in communication from team to brand owner?

Cons:

• Talent is very difficult to find and time consuming?
• Owners have to understand marketing principles and fundamentals at a very high-level to weed out good/bad talent during interviews?
• More time commitment from the brand owner to manage team in the very beginning?

Working with My agency Pros:

• Plug and play into your brand right away to deliver results?
• Specialist in your field and have worked with other brands in the past in your similar position?
• Internal built-in team process from Creatvies to Landing Pages to Media Buying
• Built this guide off of industry best practices we’ve seen from client to client?

Working with my agency Cons:

• Not your very owned in-house team?

Agencies get a bad rep in the industry because people who start their “own” agency lack the knowledge you pay for.

Great “Agencies” are a dime a dozen and are already working with high quality brands.

My team and I only have 2 more slots available to work with high quality brands owners in preparation for Q1.

Book-in below ??????

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