We are fast approaching Q4, which is usually the period where direct-to-consumer companies see the most sales.
The average consumer goes a bit crazy in the run-up to Christmas, and if you play your cards right, you can make a lot of money around this time of year.
We have been running BusterBox for the last seven years, and this is when we historically get a lot of growth.
In the past, getting the most out of Q4 was pretty easy. All you needed to do was send out holiday ads and increase your email frequency, and that would lead to a pretty big increase in subscribers and revenue.
Over the last few years, though, Q4 has become extremely competitive!
This is what is happening.
- Ad prices are higher than ever as there is so much competition now.
- Companies are sending a million emails a day around Black Friday (last year, my inbox was getting slapped around to levels I have never seen before, LOL).
This means that if you are not careful, you can get priced out of the action, or your marketing activities will get drowned out in all the noise…
Now despite these challenges, there is still a lot of opportunity. Purchase intent is really high with the average consumer, so if you have an effective strategy, your company can still do really well.
In this article, I will break down five things you can do to drastically increase your chances of having a highly successful Q4.
Ad price will increase (Accept It!)
We have absolutely no control over CPM prices on Facebook or TikTok, or any other ad platform, and you can bet your house that they will increase in the run-up to Christmas.
Now this can be frustrating, and I have heard of some direct-to-consumer companies cutting their advertising budget fully around this time of year.
I don’t personally believe this is a good idea; I think the correct thing to do is really dig into your metrics and understand what is the maximum you can spend to acquire a customer and then try and make the numbers work in your favour.
At BusterBox, we have a firm grasp of our subscription box metrics, and we know exactly how much we can spend to get a customer and still remain profitable. We monitor our CLTV and CAC ratio closely, and once we hit 3:1, we are happy.
We even take it a step further, and we dig into our subscription cohorts from previous Q4s, and we know which offers are going to give us the best churn and LTV, and we focus on those.
The problem many direct-to-consumer companies have is that they don’t have a firm understanding of their metrics, and they either overspend during Q4 and get themselves in trouble or they underspend and miss out on a lot of growth.
Make the numbers work in your favour.
This is a good follow on from my previous point. We have zero control over CPM prices, but what we do have control over is the back end of our business. E.G., we can sell more products to make the numbers work in our favour.
As I previously mentioned, consumers go a bit crazy around this time of year, and if you give them the opportunity to buy more products from you, a lot of them probably will. If you make more money from your customers, then you are less likely to worry about the increasing CAC.
We make up a lot of different gift baskets around this time of year. These gift baskets will be much more expensive than just a regular box of toys and treats. Our customers go crazy for these gift baskets, and we usually sell them out each year. This makes a massive difference to the overall CLTV we generate per customer.
We also go heavy on add-to-box around this time of year, and we increase the frequency of our emails. Our customers love add to box because they can get great deals on different products and they don’t have to pay an additional shipping cost.
I highly recommend looking deeply into what other products you can offer your customers. If you don’t do this, it’s highly likely that you will struggle to make the numbers work in your favour.
Make the most of the assets you have.
You can supplement the higher CAC by simply making the most of the assets you already have. Those assets could be email addresses, phone numbers for SMS blasts, messenger subscribers or even addresses for direct mail campaigns.
If you have been running your business for a while, it’s likely that you have built up a massive database of customer data. You should lean heavily into that around Q4 and put a lot of effort into reactivation campaigns.
If these customers have bought from you or subscribed to you before, they are the perfect people you should be targeting, and they are more likely to come back around Q4. (Or buy gifts)
So come up with a special reactivation offer and then target them via all of those channels I mentioned above. We started testing direct mail in BusterBox for reactivation campaigns this year, and we have been blown away by how cost-effective it actually is.
Retargeting Campaigns will save you money.
Ever since the IOS updates, retargeting campaigns haven’t been anywhere near as effective when advertising on Facebook. There is a way around this, though, which will drastically improve performance, and I highly recommend doing a lot of this in Q4.
You should fill your retargeting audiences with people who have taken action on any Meta platform. E.g. Engaged with your cold ads, Engaged with your content, watched your videos, visited your IG / FB page etc..
These people have expressed a level of interest in your product, and anything that happens on the platform can still be tracked fully. So I would create a big campaign and dump all of these audiences into it. (Along with any visits to your website without purchasing)
We have found this is a way more effective way of running retargeting campaigns these days. It’s very expensive to reach new prospects during this time of year, but it’s much cheaper to retarget existing consumers, so you should increase your budget there.
This may sound obvious, but it shocks me the number of companies that don’t bother running any holiday offers. We have found our conversions dramatically increase when we come up with a Christmas-themed offer, change our website to Christmas-themed branding and ensure all of our ad creatives are Christmas-themed.
I will give you an example.
Last year we ran an offer where if somebody signed up for 6 / 12 months, we would give them a free Christmas outfit for their dog with the first box. This offer blew up, and we ended up getting a lot of subscribers signed up.
We also changed the design of our website to make it Christmas themed, and all of our ads had pictures of dogs in Santa Hats. I noticed this drastically improved our CTR and our overall conversion rate.
The moral of the story is that things like this make a difference, and you should do the same in your business. Don’t be lazy and leave everything the same because if you do, you are 100% leaving money on the table.
I hope you found this blog post helpful. We are a few months away from Q4, so there is plenty of time to prepare.
If you want more helpful content like this, head over to my blog at www.liammichaelbrennan.com or tune into my podcast Subscription Box Answers (You will find it anywhere you listen to podcasts).