Happy Sunday!

If you’re reading this, I hope you’re sitting on your couch, have a beverage in your left hand, and are ready for a fun Sunday email. As I wrote today’s email, I imagined feeling like a kid in a candy store, seeing so much tactical information about building the perfect acquisition offer. I hope you feel that kid-in-a-candy-store feeling as you read it, too! Some of it is wordy, but my goal is to get you to also see the way I am thinking, not just what the final thought is.

After dealing with canceled flights over the last 48 hours (thank you, Crowd Strike), I’m finally on my way to LA to spend a few days outside of the NYC heatwave. It’s pretty crazy to think about how the additional line of code at Crowd Strike caused the whole country to halt operations and even states to shut down for the day. Shouldn’t these tech companies know not to push updates from Thursday to Sunday? If you’re curious, the last time something this big happened and halted the country was when the window-less NSA/AT&T building in Tribeca, New York City, lost its power. Here’s the LA Times article from 1991.

Before we dive into today’s email, I just wanted to say THANK YOU for sharing the roles we are hiring for at Sharma Brands! Thanks to you, we’ve been able to add some amazing new faces to our team. My favorite is when people see my cold email template and email me for a job. We’ve hired three people this way, and they’re all extraordinary at what they do.

A big part of our work at Sharma Brands is managing the customer funnel under one roof. We oversee paid media, ad creative, website optimizations/landing pages, email flows/campaigns, and on-site promotions. This way, clients can tell us their revenue and budget targets, and we can build plans around them. A big part of this is figuring out the acquisition engine that brings the new customers in — everything from the packaging of this box to the ad creative, the positioning of the brand, all the way through to the follow-up emails, and how those differ depending on the funnel.

In fact, the hardest part of building your online DTC sales channel is figuring out what the acquisition engine is. If DTC is the only channel you’re selling through, then your acquisition engine is essentially the water that nourishes the rest of the tree. Without this water, it’s hard for the rest of the tree to really grow and flourish.

Before we start going into scalable customer acquisition, it’s important to understand the math behind this. Running ads is a drug, and if you’re not careful or paying attention to the red flags, it can be easy to get carried away and ultimately waste a lot of money. Understanding the math of your customer acquisition includes knowing your COGS, shipping costs, pick/pack/storage fees, and leftover margin. From these numbers, you can derive your allowable cost per acquired customer (CPA), also known as customer acquisition cost (CAC). The OGs say CPA, the noobs say CAC — I don’t make the rules.

In today’s email, I want to discuss what I call the Customer Red Carpet, which, to me, is the journey in which a customer transitions from a prospect to a customer. 

Now, a quick disclaimer: This is ONE strategy to scale customer acquisition, and I’ve spent at least $100M on media on it. It may not be the right strategy for 1-2% of you, but for almost everyone, this is something worth trying if you’re mainly sold via your DTC channel.

Okay, we know the ultimate goal, if you’re a subscription-focused brand or a brand built around a routine, is to get people into your subscription program. If you set that up right, you know there’s something beautiful about waking up and seeing that revenue processed before you’ve even showered. If that sounds too romantic, then, at the very least, it’s nice to rely on subscriber revenue when times get tough on the acquisition side. Brands like Jolie have a sub-1% churn, so the game really is about getting to the subscription.

Here’s how I think about the different channel’s purpose:

  • Ad: demonstrate the problem and offer a solution.
  • Offer: product/solution, discount, promise/claims.
  • CRM (email/sms): a reminder of problem, solution, and promise. reminders to reorder.
  • Organic Social: content to push brand messaging (i.e., routines) and product claims.
  • Subscription: get them on the high LTV flight path.
  • CRM: continue to provide content that reminds the customer of benefits, why they signed up, how they continue to be the best option, etc. (the inverse-competitor landing page)

In my past newsletters, I’ve talked about the TRACE framework:

  • [T]echnology — CMS, gamification, bundling, etc.
  • [R]eporting — heatmaps, customer data, Northbeam, etc.
  • [A]udience — customer segments, 2nd/3rd party audiences, etc.
  • [C]reative — problem messaging, visual assets: videos, statics, etc.
  • [E]xperience — landing page or site, offer, product merchandising and messaging, etc.

The TRACE framework is like a toolbox, and everything inside it helps you create the perfect scalable acquisition offer. Outside of the technology used to power your acquisition experience and the reporting to analyze it, it really comes down to the audience, creative, and the on-site experience you lead prospective customers to. 

Most brands focus on bringing people to their homepage or a collections page if they have a lot of SKUs. In my opinion, a standard homepage or collections page is not where you want to be sending paid traffic. Here’s why:

  • They don’t focus on a singular problem or solution to position your product in front of a new customer.
  • If you go to a standard homepage or collections page, it’s very hard to match the problem on the ad to solution-based messaging on your website unless you have only 1 way to talk about your product.
  • You’re likely not offering any sort of incentive or discount for this customer since they’re hitting a standard web page rather than something custom for a new customer.
  • Your homepage and collections pages don’t validate why you’re better than your competition, what the brand promise is, why I should trust this brand more, or what makes the products superior. Those pages just show the product with, maybe, cheeky brand messaging.

Whether you are creating an acquisition offer focused around a consumable product with a small SKU assortment or a one-time purchase brand (like Hexclad) with a larger assortment of SKUs, building site experiences that first educate customers on the brand.

If you’re running ads behind a brand with a high number of SKUs or products, regardless of AOV, it can be useful to use a landing page as a qualifier of traffic and a customer checkpoint. Let’s say the brand is EVERLANE or Fleur Du Mal, and we know that we are primarily going after net-new customers. Running traffic to a generic collections page may be okay because it’s apparel, but having a hero section that quickly addresses the top 2 or 3 reasons that people love EVERLANE will result in a higher conversion rate and potentially higher AOV. Here is a great example of that 2-3 lines further explaining WHY you should trust buying Ripple’s Protein Shakes. The Sharma Brands design team does such a great job building beautiful sites that convert.

If you have ads behind a brand that is aiming to get people onto subscriptions (beverages, supplements, air purifiers, digital subscriptions, cereal, electrolytes, etc.), or you’re a brand with fewer SKUs, I would recommend more product/benefit-focused site experiences, even if you have amazing product pages. 

The way I think about building funnels is:

  • Use ad creative to identify new audiences and the problem/solutions that match those audiences well.
  • Once you find something that works, meaning it shows a stable CPM, good CTR, and conversions, it’s a signal to build a stronger funnel that is more specific to this audience’s problem and solution.
  • Test into better messaging, a more tailored offer, and reiterate that messaging in follow up emails.
  • If it’s not working, keep testing.
  • If it starts working, continue to crank paid traffic and monitor/improve the funnels (a good funnel can last years).

I want to explain quickly what I mean in the second point because it can be confusing. Let’s say you know you already have funnel #1 working well for the plant-based audience with messaging around getting your protein in with these shakes. This funnel is focused on an offer that you know does well for new customers, but specifically, the landing page has messaging constantly reinforcing protein intake. While that is true, using FB ads, you also come to learn that you have a high CTR amongst runners when talking about better marathon prep using your shakes. Running funnel #1 to this audience is a great way to validate there is demand here, but building out funnel #2, where the messaging is specific to runner nutrition intake, will likely demonstrate a stronger CVR and customer loyalty. Make sense?

One last disclaimer: to have a successful acquisition offer, whatever you’re selling needs to be able to follow the “Cans in hands” mentality. This means that the second someone tastes, touches, tries, and feels your product, they should love it, and it should deliver on its promise. When I worked at Hint Water, I knew all I had to do was get people to taste the product. Then it was game over. The product was so good it did all the work to keep people coming back. If your product doesn’t evoke this same feeling, you won’t be able to build a scalable acquisition offer.

Ok, let’s dive into what all this acquisition offer consists of. In a perfect world, your new customer offer focuses on:

  • Product Sampling + Assortment: making sure you have enough product variety (flavors, scents, colors, etc.) for the whole family to try.
  • Offer & Value: make it an easy financial decision with a discount or gifts to counter-balance the total price.
  • Promise: outline, for the customer, what they from it.
  • Insurance: explain the process if they don’t like the product.
  • Soundbites: make it easy for someone to answer the “WTF is this?” question to a spouse or friend.

Unfortunately, I don’t have a good acronym for this, but these are the main needs a high-performing acquisition offer generally consists of. Here are some examples of some evergreen acquisition offers that continue to do well:

Hint Water’s 36 for $36. This is an offer that I made in 2017. Since then, their copy, landing pages, subject lines, and pricing haven’t changed. The offer is so good; nothing has beat it in over 7 years. The 3-case offer helps maintain a higher AOV than just a 1-case purchase, allows the whole family to try the product, and gives them the ability to try multiple flavors. The offer itself is easy to understand, $1 per bottle, and compelling at 40%+ off. 

One thing worth noting that we did well at Hint, that most brands today don’t do — is have disclaimers on the offer pages. If you scroll to the bottom of the page, you’ll see the T&Cs that protect Hint’s customer service and potential chargebacks.

Javy Coffee’s GWP Offer. This LP has a beautiful example of building a high-perceived value offer for new customers. For Javy, their goal is to get a higher number of bottles in your order and to get you on a subscription. How do they make the case for that? Well, you get a discount with the subscription, and you get free gifts, 1 for every bottle you add to your subscription. When you add the bottles to the cart, all the gifts have strike-through pricing and are replaced with “FREE,” and your bottles have an additional $5 discount per bottle. It makes for a compelling offer, and throughout their funnel, they also show social proof, benefits-first messaging, and give that insurance guarantee if someone is unhappy with their order.

Magic Spoon’s Cereal Bar Bundles. Magic Spoon already has so much awareness and credibility from selling millions of cereal boxes. To properly acquire customers for their cereal bars, they built out bundles to drive sampling. They have social proof, a happiness guarantee (insurance), and a strong offer, even highlighting the cost per day (which I’m a fan of). Even smarter is they bundled their cereal with the bars, so if nothing else, as a cereal eater, you’re already getting a good deal on the cereal.

Everyday Dose’s GWP Bundle. This page does everything I’ve talked about in this email. With this page, they’ve got a strong offer (25% off), gifts (frother, spoon, stickers), and a promise (focus, mood, stress, and energy). They even added a digital product from Othership, which is genius. Why? Because while the COGS of a digital product is extremely low, it can have a high perceived value by customers. This offer is replicated around almost any holiday, proving this is also a very strong funnel for them.

A scalable acquisition offer is something that is a must-have when you’re scaling the business, in my opinion. Sure, there are outliers, but if you’re wondering if you’re the outlier, it’s probably not you. Understand your numbers, figure out what your CPA target needs to be, build funnels, and test into an offer that allows you to acquire high-quality customers (strong repeat purchase rate or strong conversion from one-time purchases → subscriptions) but also scale efficiently with a reasonable CPA.

Some funnels, like the Hint Water example, can last almost a decade. Others may fluctuate depending on how your customers' “market” or world changes.

Once you acquire the customer, customer retention becomes the new challenge. It’s important to think about curating this experience as the antidote to how your competitors are advertising and trying to steal your customers away from you. Are they starting to focus on benefits or messaging in a way that makes your product feel inferior or not up to par? Use email, SMS, organic social, remarketing ads, direct mail, etc., to make sure customers are reminded why they continue to receive your product and not anyone else’s.

If you have any questions about crafting the perfect acquisition offer, feel free to DM me on Twitter or email me here. I’m happy to help. If you want my company, Sharma Brands, to run this playbook for you, submit your info using this contact form!

Ok, this felt like one big rant, but I hope it was helpful. Now, onto some fun stuff...

Vendor of the Week:

Recharge — The subscription tool trusted by 20,000+ brands, powering millions of customer routines.

Some of the most powerful DTC brands in the world have one thing in common: they focus on repeat purchases powered by subscriptions. At Hint, my goal was always to get customers in the door who would eventually become subscribers—that’s where the LTV jackpot was.

It is the holy grail of DTC. If you can get a portion of your customers to subscribe to monthly, quarterly, or annual refills of your product, you can unlock predictable, recurring revenue for your brand. And Recharge is the tool to make it happen. Over 20,000 brands trust them to power their subscription programs, unlock new insights, and retain more customers and subscribers. 

Beyond their famous subscription and analytics tools, Recharge has recently added several new ways to retain and grow subscribers, including cancellation prevention, failed payment recovery, winbacks, and rewards like punchcards, milestone-based rewards, cashback, and other credits. 

And obviously, the stats speak for themselves:

Their software has helped thousands of brands manage 100 million subscribers by processing more than $20 billion in payments through their tools. 

Recharge is back in a new way, and they’re ready to show you what is new under the hood. If you’re looking to unlock more recurring revenue, learn more about Recharge using this special link.

That's all for this week

How was today’s newsletter? I was planning to send something out about M&A, but then after talking through the importance of acquisition offers with another client this past week, I felt this could be more valuable and will probably make you more money this coming week. If you have any feedack, please reply and send it over — you can’t hurt my feelings, I promise!

Tonight is Sunday night, so make sure you get those 9 hours of sleep tonight, plan for a few sweat sessions this week, and make sure you stay hydrated! My new favorite water has become Neau Water (try it from Amazon) — they use a process called HART (Hydration by Advanced Restorative Technology) to create the tastiest, crisp water. If Essentia were a BMW, Neau water would be a Rolls Royce. 

I hope you have an amazing upcoming week. I’ll see you next Sunday, same time, same place!