How we PROFITABLY scaled from $30k per month in ad spend to $100k per month, in under 3 months.

The Impossible Challenge...

This client is a variety loot box business. Each month they send out a box filled with physical Anime and art goodies to subscribers and Facebook advertising has always been their main business driver by far - no other traffic channel comes even close to the results they get with Facebook.

They have struggled for years to break through their $30,000 ad spend level per month while keeping it sustainable to the business. Every time they tried, the cost to acquire each customer would explode to unsustainable levels.

This was a problem because, at this point, the customer volume being generated was barely combating the churn (the rate at which customers unsubscribed). Remember, no other marketing channel comes close to how effective Facebook ads were performing for them.

Their multi-million dollar business became stagnant. It stopped growing.

But it was not so impossible after all...

At this point in their multiple years of advertising, they have struggled to keep their CPA (cost per customer acquisition) below $40 even at a $30,000 monthly spend.

In 3 months we were able to take the ad account to $100,000 ad spend at under $30 cost per new customer. This is a 2x ROI on the initial sale... but what's crazy is that this ROI is compounded for each additional month the customer stays subscribed.

Even at a 14% monthly customer churn rate, we are growing this business FAST.

The first thing I realised when we started working with them was that the existing ads were ONLY working because audiences resonated with certain characters or anime shows over others.

The ads were capping out at $30,000 month before the cost per customer would spike uncontrollably.

This is because the ads were only appealing to a small finite portion of their total audience base. The more they optimised to these sub-niche audiences the harder it was to scale up from it.

So how did we smash through the unbreakable $30,000-month ceiling? As you're about to find out... it's not rocket science.

Introducing The Island Strategy ??

The business is the island. We need to supply and feed the island with new customers for the island to survive and thrive.

To do this, we build pipes through the ocean that introduces customers from the outside world to our island.

However, each pipe is costly to build in both time and resource. This is why whenever a pipe becomes sustainable and sufficiently feeds the island (i.e. the business makes money from it), we must keep that pipe connected and flowing at all costs, or the island will die.

The more important the pipe becomes, the more we reinforce and double down on it. In the meantime, we build and stack new pipes to grow the island faster.

Applying The Island Strategy to the variety loot box subscription offer

Here's how we set up each pipe.

I'm not going to talk about the content and creative strategies we implemented because that would be a whole other topic in itself. If you're interested, just let me know in the comments or drop me a note because what we did is absolute ?? .

Each new pipe centres around a specific character or anime show (they appeal to different audiences of varying sample size) and they consist of these initial elements at launch...

• x5 image creative variations
• x2 video variations
• x3 ad copy variations
• x1 congruent landing page
• x1 30-day lead flow (email and SMS)

As a pipe becomes profitable, we reinforce it with more spend or more creative elements to optimise.

We keep 2 'test' pipes running in parallel at all times. When we want to introduce another pipe to test, we put a hard stop to one of the existing test pipes. This allows us to be progressive without taking any unnecessary risk.

Each pipe has a spending break-point (the threshold at which the cost per customer acquisition remains sustainable to the business).

With pipes maxing out at $30,000 a month, some at $20,000, and others at $50,000, we can stack them all to a combined $100k spend level while easily keeping a low customer acquisition cost.

As the business develops further, we'll be able to accept a higher customer acquisition cost and push this spend even higher!

And that's it. This method doesn't apply to every business. No one strategy fits all. But the concept can be applied in many ways. I hope it helps.

I would love to get your feedback, good or bad, so drop me a message and we can bounce some ideas.

Thanks,

Eddie