Wednesday, December 21, 2022
The holidays are fast approaching, and we want to know what DTC brands you bought gifts from! Reply to this email and let us know.
If you’re new to DTC, welcome! You’re in good company with fellow newcomers from Nutrafol, Everscore, Broc Shot, and Hues&Co.
In this newsletter, you’ll find: 👇
📦 CPG lessons from scaling hemp hearts and a trifecta of nine-figure exits
📦 How to make your SMS a profit machine
📦 Last-minute call-to-actions that are crushing this holiday season
📦 The rise of TikTok reviews
Read till the end to access exclusive DTC swag. 😎
👉 If a pal forwarded this to you, subscribe, so you never miss out.
Podcast
🎧 On today’s episode on the DTC pod, we’re sitting down with CPG legend Mike Fata.
Mike shares his journey of growing his company, Manitoba Harvest, from zero to $100 million in sales over 20 years before selling it for a cool $400 million in 2019. 😎
On the pod, he shares his thoughts on the importance of branding and storytelling in the CPG industry, as well as the mistakes he sees in people’s hiring processes and the benefits of building a team that focuses on the "who" rather than the "how."
The takeaways 👇
✨ A rebranding renaissance
Founded in 1998, Manitoba Harvest initially took five years to reach its first million dollars in sales and another five years to reach $10 million. However, from 2008 to 2018, the company grew by $10 million per year.
How?
Mike attributes the rapid growth to a rebranding exercise that changed the company's flagship product name from "shelled hemp seeds" to "hemp hearts" while simultaneously increasing consumer awareness of the health benefits of including hemp foods in their diet.
“[Rebranding] gave us a tremendous ability to communicate to our consumers in a fun and playful way and in a lot of different mediums. So [it was the] same product inside and just the positioning was different on the outside.”
💪 Building a strong team
The hiring process can be vastly different from company to company. Some do it right, and some… well, don’t (😬).
Here are five tips Mike believes are key to a successful hiring process:
🔮 What Mike’s predictions are for the future of the CPG space:
Regarding trends related to the health and wellness industry, Mike mentions that he sees an ongoing trend towards companies taking "cult classic" products and making healthier versions of them.
“Midday Squares is an example [of this trend] where they make a healthier version of a chocolate bar that's made with all these poor ingredients so that it tastes better and it's better for you. I think we're gonna see a lot of that, and those are long-standing trends that, a decade from now, will still be in the same space.”
👉 Listen to the full episode with Mike Fata here!
Do You Make These Mistakes with SMS? A Napkin Matrix to Fuel +33% More Revenue
Recart’s top 100 customers (aka the crème de la crème averaging at least $4M in annual sales) see a whopping +33% in revenue through SMS. 🤑
That’s the percentage of additional dollars text-marketing drives compared to monthly sales without it: 7D-click, no “view” attribution.
Struggling to make your SMS a profit machine? Here’s why and how to fix it. 👇
👉 Want High-Profit, High-Volume SMS? High-Five Recart!
Tried & True CTA Winners for Last-Minute Shoppers
Sure, we’re only a few days away from the holidays, but that doesn’t mean people aren’t still shopping.
To all the ‘organized in your work life' but ‘scrambling for your holiday shopping’ folks, we see you… 👀
Chances are, there are still holiday shoppers who will buy your product. So make sure you’ve got the proper positioning over the next few days to convince people to click ‘Buy Now.’
The Pilothouse team has tested ample call-to-action (CTA) formats to entice last-minute shoppers, and here’s what came out on top:
Here are some of our best-performing CTAs on ad creative. Snatch these ideas for your last-minute ad campaigns: 👇
⏰ Limited time only and sellout risk: HIGH
⏩ Selling out fast
Neither of those tickling your fancy?
Here are some other CTA examples that the Pilothouse team sees crushing right now:
Have any specific CTAs or angles been fueling your growth this holiday season? Send us an example of an ad you’re running that’s crushing!
The Rise of TikTok Reviews
Influencer marketing isn’t dead. It’s different. Very, very different.
Within the last 24 months, we’ve seen TikTok go from a fun means of self-expression to a must-have in the DTC marketing stack. Heck, Instagram is revamping its entire presence to keep up with it.
So are we at the peak? Not even close. If anything, we’re just getting started.
According to Insider Intelligence (fka eMarketer), Instagram is still on track to capture nearly three times the amount of influencer marketing spend compared to TikTok in 2022. Meanwhile, TikTok will eclipse Facebook this year and is expected to overtake YouTube by 2024.
Much of this can be attributed to the shift in the types of ad creative and content that resonates with consumers. Long gone are the days of heavily edited images of glammed-up models and over-exaggerated smiles. We want real content, with real social proof, from real people.
Enter the rise of “nano” influencers and TikTok ads. According to the same study, as outlined by TechCrunch, “nano” influencer spending (influencers with 1,000-5,000 followers) will rise 220.5% in 2022, while “mega” influencer spending (creators with 1 million+ followers) will grow only 8%. Meanwhile, TikTok ad revenue is expected to triple to $12 billion this year.
And with the key role that social proof plays in the customer purchasing journey, the demand for these authentic, relevant, and trustworthy creators makes perfect sense.
The numbers don’t lie:
Knowing this, why wouldn’t you encourage your customers to spread positive feedback about your brand far and wide? Especially on a platform where any video from any account is capable of generating millions of organic impressions.
With TikTok investing heavily in bolstering its search capabilities and ‘TikTok Made Me Buy It ’ becoming the new ‘As Seen on TV’, a big question remains: Are we entering the era of DTC TikTok reviews?
Companies like Bounty are betting big on it.
Bounty’s mission is to help everyday TikTok creators make money from UGC. And the value proposition is enormous. For creators, who doesn’t want to earn money for creating content around products they love? And what brand doesn’t love nearly free exposure, social proof, and a consistent inflow of UGC? A win-win across the board. ✅
Here’s how it works: 👇
Bounty also lets companies license the content to repurpose for Spark Ads, Facebook ads, or other advertising creative. Of course, the creators will get paid for that as well. So far, brands like Jones Road Beauty, BlendJet, Olipop, and Doe Lashes are already signed up to partner with Bounty’s creators, with new brands flocking to the platform daily.
Incentivizing customers to leave positive reviews and recommendations has become common practice across the DTC landscape.
While certain companies will entice customers through future discounts or site credit, certain vendors are blunter: providing customers with cold hard e-cash in exchange for positive feedback.
But this raises an important question: Is this ethical?
It’s one thing to receive site credit to a brand that you likely wouldn't purchase from again if the product sucks. It’s another to give someone cash simply for leaving a positive review. Right now, it’s still a gray area. But as these agreements gain popularity, it’s expected that brands and creators will adjust and mark these posts accordingly. The same way they do for paid promotions.
Ethics aside, many other questions remain:
While much of these will be answered with time, the shift towards short-form video reviews is clearer than ever. Time to adapt, friends.
🐥 A new CEO for Twitter?
🇨🇦 A Canadian ban on single-use plastics.
💸 Another interest rate hike is coming soon.
🍎 Apple reportedly cancels the high-end Mac Pro.
📸 A new Instagram template lets you customize your 2022 recap.
🌎 Meta will devote 20% of costs to Metaverse next year.
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