Can consumer brands get 3+ marketing ROI?

👋 Hola! Welcome to Out of Singapore. This is Shan and I write every Sunday on business and marketing. I am back with another marketing challenge - how to really get that elusive 3+ ROI?

Before I start preaching, here is the thing - I knew nothing 15 months back. No Facebook Ads or TikTok Shop. I had no idea about MER or ROI. Neither did I know about 3PLs. Anyways, that’s history now (fortunately).

So, how did we really get there? From bleeding cash to making money? Here is the structure for today.

1. Increase organic presence in real life and online life

2. Reduce paid ads dependence

3. Build additional channels beyond Facebook

4. Drive repeat and bulk purchases

Let’s start.

#1 Increase organic presence

In January 2024, the only place that users would find the brand was via ads. Facebook ads, Google ads and TikTok ads. The brand had no social media or offline presence, except for a Singapore Marathon Booth. Absolutely no real human faces, not even influencers and creators on social media. We were just bleeding money on advertising.

So, we did these things every day. Every Single Day.

1. Scale up social media content - Started with daily educational content on our social media channels. These were simple text based education content to help our consumers. Daily posting. Then expanded to collaborating with creators.

2. Drove product seeding and sampling - We reached out to 100+ creators every week. Gave them products for free to try and share their experience. We purposefully did not engage in paid collaborations. We managed to get 5-8 social mentions every week.

3. Manually reached outs to prospective customers - One of target consumer group are athletes and fitness folks. They invest on health if they like the products. We reached out and sent them our products to try. Many of them learnt about us from the Instagram and TikTok DM. Some became long-standing consumers.

4. Livestreamed daily on TikTok - We improved our online presence by streaming often on TikTok. We enlisted content creators to stream from their account. We also engaged streamers to broadcast from our official social media page. The effort was to be present often on consumers digital world. We also invited doctors and scientists to speak to our consumers.

5. Strong Google Maps reviews - Doubtful users always search on google “xandro lab reviews”. They are greeted with Xandro Lab HQ map listing and over 50 positive reviews. This was achieved by closely working with our closest customers and requesting them to review us on Google.

Now, we create social media content about office and team members. Some of them are fun, others are educational and myth-busting.

Here is growth in visitors, clicks and position on google search. As you see, March onwards we started seeing the uptick.

We are still very small. Instagram followers are under 1500, same with TikTok. So, the work has just started. We need to scale our online presence by a 100x to become a meaningful medium-sized brand.

#2 Reduce paid ad spends

When we started paid ads, I believed that we will scale it each month. Meaning costs will go up, return will go up and ROI will become healthy. I realised it’s not the case. Paid ads cannot be scaled consistently while maintaining the ROI.

In fact, when we reduced spends (while improving online presence with creators), our revenue did not go down. But our spends did go down. We reduced our spends by 1.5x without impacting our topline. Our revenue kept increasing at the constantly lower spend. This is for Facebook/Meta Ads.

On TikTok, we took a conservative stance. Moved from custom ads (which were expensive) to the automated GMV Max ads. The new ads format reduced our marketing expense while increasing the ROI. However, the scale did not come through. Three months later, we mixed automated ads with custom TikTok ads and the results blew up. We were able to spend more and get more revenue as well.

From January to May, our total ad spends decreased. For more than two weeks, Facebook ads was not running. Facebook is the top inorganic source for us. But it had no impact on revenue. We continued to do well without running the ads.

I don’t panic anymore when the ads are shut down. It doesn’t hamper our revenue much. This is a strong proof that we have built a strong organic presence in the market.

#3 Build new traffic sources

This flows in from the past two points - increase presence and reduce unprofitable spends. To achieve this, traffic needs to flow from multiple channels. For example, we were dependent on traffic and users from Facebook. We decided to add YouTube and TikTok as new traffic sources. By traffic, I mean reach out to new users on other platforms and bring them to our website to consider our products.

We also noticed that some of our blogs were performing well in North America. So, we started localizing blogs for Singapore to garner incremental organic search traffic in our main market. NMN keyword was poorly captured by competition in SG. So we went after that keyword and have been doing fairly well.

Instagram had linktree attached to the bio and few people visited from Instagram. So, we scrapped linktree and instead added the website link on the bio. From 50-60 visits a month, this increased to almost 400 visits. The revenue from Instagram? Guess how much it increased and reply to this email. 😆

We also tried Reddit and it worked okay for the US market. But Reddit needs a lot of organic work and we couldn’t scale it. So, I have paused it for a while. Nevertheless, this was another source of traffic and revenue for us.

The one part we are grossly missing? Listicles and review articles by major publications. Makes me unhappy every time I think about having missed this consistently for past one year.

Anyways, the summary is that we actively worked to add new traffic and user acquisition channels and it worked well for us. The cost went down for all the channels.

#4 Increase repeat and bulk purchase

Everything said and done, acquiring new customers every time will be expensive. You know what’s cheap or almost free? Existing customers. The cost of a repeat customer is dirt cheap. Klaviyo, the email platform, is a fixed 100-200 USD a month cost. Good emails can generate thousand of dollars of sale (one single email). WhatsApp is also almost free. One single WhatsApp broadcast can again generate few days worth of sales. Remarketing campaigns on Facebook and TikTok (not exactly repeat but you get the drift) are generally the most profitable and cheapest of all.

We have managed to maintain a healthy 40%+ repeat customer base each month. While I would like to increase this further, not having new users will hurt the future. Why? Because today’s new users will become tomorrow’s repeat customers.

Finally, single unit purchasers are the most unprofitable type of customers. The cost of acquiring them is higher than the revenue they generate. Driving bulk or bundle purchases helps us deliver higher value with the same fixed cost of acquisition and shipping. Our products have 2-year assurance to encourage bundle purchase. Over the past 6 months, we have moved our focus to pack of 3,5 and 6 for every sale. It has worked wonders to reduce the costs associated with every sale.

That’s it for today!

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Thank you for reading again! Please like the post if you enjoyed reading this. My last post had good views and feedback but NO ONE LIKED IT. I HAVE BEEN SO SAD. So, please like this post if this was good.

I also made my first TikTok post. Haha, it was spontaneous. Please like and share it to motivate me to do more each week.

Jisoo - new look discovered 😂

I keep hunting for new Jisoo GIFs. Trust me, it is so difficult to get a new GIF each week. This one’s a different one - not the cutesy and pretty one but a mean look. However, did I ever say that she doesn’t look cute and pretty in this? 🙈

Awesome, thank you so much for being an avid supporter. I am going home for 4 days and may not be able to write next Sunday. Please wait for an extra week for the next edition. Thank you!

With that, please have a great week ahead! Cheers! 🥛🥛🥛🥛🥛🥛🥛