An organic skincare brand that had been in existence for 2+ years was on the brink of going out of business. The company had a website, but did almost no online sales. Most of the sales came through a brick and mortar location which was not profitable due to the high rent for the space. The founder had been funding the business out of her pocket and had been taking heavy losses since its inception. Women’s skincare is also one of the most competitive consumer spaces that you could possibly be in. When we went to our local Ulta store to do some market research, we were instantly overwhelmed. There were literally thousands of different products and brands in view as soon as we walked through the door. How could we stand out and carve out a space for ourselves in such a crowded noisy market?
Although the skincare and cosmetic space is extremely crowded, it is still a multi-billion dollar industry. Within that multi-billion dollar industry, we identified that the natural and organic niche was largely ignored and underserved by the major brands. The competition thinned out even more when we looked at the premium organic space and we realized that this was a sub-niche that was big enough that we could sustain a business, but small enough that there wasn’t much competition. Additionally, the products from this particular brand were second to none, and the stories behind the brand and products made the consumer feel something. The problem was the founder had never figured out how to put them in front of the right consumers at scale. Because of the consumable nature of skincare products and the premium price point of these particular ones, we knew if we could get consumers to try one of these products just once, we would likely have a long customer lifecycle and an extremely high lifetime value.
The first thing we did was have our client shutdown the brick and mortar store and redirect those dollars online. Second, we had her completely rebrand, because even though the product was great, the original name didn’t do a good job conveying that this was an organic skincare brand. Third, we rebuilt the website so that it would actually sell product.
Once those key foundational pieces were in place we began running Facebook ads and testing a plethora of different creative approaches, images, carousels, dynamic product ads. You name it, we tried it. Initially we didn’t find much success so we began polling friends and acquaintances to try to figure out what the potential barriers were that were keeping people from purchasing. The most common answer we heard was “I’ve never heard of this company, how do I know if it’s good?” We instantly knew that social proof was the answer. We added verified reviews across our website and all products and began collecting video testimonials from customers to use as ads. All of a sudden we were making some sales and the people who bought raved about the products, but not enough people were buying. We went back to our focus groups and asked again “What would keep you from buying this? We have 100+ reviews that say this is a good product, why wouldn’t you want to try it.” It turns out we had shot ourselves in the foot with positioning and pricing ourselves as a premium brand. Our best selling product was $70 and we found out that was above most people’s risk tolerance for trying a new product that might not work or might not be the right product from the line for their particular needs.
The answer was lower the barrier to entry with an offer that anyone could afford. We knew that if we could get someone to make a small commitment, the product would prove itself and we could then re-sell them later for a larger purchase. We activated a sample program and overnight we sold hundreds of kits to people that had never touched our products. We broke even on the sample product, so from a profitability perspective it wasn't a huge win, however the payoff came later: the following month we targeted these users through a multi-channel campaign and over 40% returned to purchase one of our high-priced products on the store which made this strategy a huge success.
In 90 days we were able to take a business that had run in the red for 2 years and made it profitable for the first time ever. By 120 days we had it pacing towards making more dollars annually than what it had lost in the previous 2 years combined. Since then, the product line has continued to expand, as have our marketing efforts and sales. We are now able to acquire new customers at a 2x-3x ROAS and 40% of those turn into long-term customers that order multiple times without us having to spend any additional ad dollars, making our true returns greater than 10x the original investment. Now that the business is profitable and growing we have set our sights on getting it to $1M in annual revenue.
