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The Federal Trade Commission introduced a new rule stating that subscriptions need to be easy for customers to cancel.
The final rule called ‘click to cancel’ requires ecommerce businesses to make online subscriptions as simple to cancel as it is to sign up.
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Here’s what you’ll find in today’s DTC:
🏆 The DTC brand equation has changed. Here’s what it takes to be successful in ecommerce now.
🍿 How LesserEvil went from being a struggling startup to one of the most recognizable healthy snack brands.
💡 And…people like products more when they know that you’ve put in more _____ into making it.
You’re reading this newsletter along with new subscribers from: Rinse Soap, Monk, and Your Golf Package. 👋
👀 Revenue? Up. ROAS? Up. Conversion Rate? Up. AOV? Up.
A wellness brand joined Pilothouse’s brand accelerator, Pilot Program, dreaming of growth… 💭📈
The team strategized using their time-tested and data-backed tactics, took over the brand’s campaigns, rebuilt their creative approach, and geared up to see the brand crush its goals.
And crush they did…
An 80% increase in ad spend, coupled with a ROAS and AOV improvement, yielded a 155% increase in revenue! 🔥
Q4 is in full swing, and Pilot Program has limited slots remaining for brands looking to achieve results like these.
Will one of those slots be yours? 👇
💡 The DTC Equation Has Changed
When entering the DTC space, most think the equation is simple – get a website, sell products, grow your social media following, and start running paid ads.
This was true in the early days of DTC when the space was less congested and competitive.
But now, the equation for launching in the DTC space differs from what most people assume.
Here are three common traits the Pilothouse Meta team observes in brands that successfully launch and scale their DTC operations during their first year, consistently achieving month-over-month growth. 📈
1️⃣ A Product that Solves a Problem
The product doesn't have to be a massive problem solver, but it should offer consumers convenience, ease of use, or something that common space in the niche doesn't already offer.
Cane Brew Sweet Tea is the perfect example – a brand Pilothouse launched from an ice cold pixel into exponential growth. Cane Brew solved a simple problem by providing presweetened iced tea bags, saving customers an additional step from adding their sweetener.
2️⃣ A DTC Friendly Website
A website that is easy to navigate and quick to load showcases the product's unique selling points and displays social proof.
Paying for ads to go to an unoptimized website is like pouring water into a bucket with holes, and nothing is retained.
Just like the time crafting a great problem solving product, the time and energy needs to be put into a solution giving website.
Pilothouse stepped in and helped optimize Cane Brew's website before launching ads and the energy paid off with a conversion rate increase of 6.05%. A good website matters. It doesn't need to be fancy, just needs to give the user what they are looking for.
3️⃣ Launch Ads and Be Patient
Most new DTC brands will start with Meta Ads, as they are the most affordable way to acquire new brand customers.
However, the process of warming up the Meta pixel to understand your users and generate sizable sales can take 3-6 months. It can be sped up with the right campaign structures and budget but will still take a fair bit of time.
Through these same steps above, brands tend to scale pretty quickly. For Cane Brew, launching ads in February saw a +824% increase in sales for Q2.
In the first 6 months of launching, Cane Brew was able to maintain an average Meta ROAS of 2.16.
The takeaway?
To recap – Cane Brew didn't have a strong organic social media presence. They created a product that solves a problem consumers are aware of, built a website that showcases the solution in an user-friendly journey, and stuck through the pixel warming process to reap the benefits on the other side.
🍿 LesserEvil’s Mindful Snacking Mission
In 2011, LesserEvil was failing.
Despite what they did, the company needed help to remain profitable.
That same year, Wall Street veteran Charles Coristine had second thoughts about his career. He was sick of the daily grind and wanted a fresh start.
He decided to quit his job at Morgan Stanley and start his own business.
The name of the company resonated with him. He wanted a healthy lifestyle and decided to purchase the company for $250K, pouring his savings to turn the brand around.
Thirteen years later, LesserEvil is quickly becoming one of the most recognizable healthy snack companies because of its hero product, coconut oil popcorn, which brought in over $103 million in sales last year.
Here’s how they did it:
Rebranded: Instead of positioning themselves as just another snack brand, Coristine positioned LesserEvil as a healthy option by encouraging customers to practice ‘smart snacking’. The brand’s mascot was also updated to appeal to health conscious consumers.
High-quality ingredients: In 2014, the brand introduced extra virgin coconut oil as a key ingredient. This change allowed the brand to maintain flavor while reducing fat content so they could stand out on shelves.
That year, they introduced Pink Himalayan popcorn, generating $2 million in sales. 📈
Biodegradable packaging: Not only were customers purchasing a healthier snack, but they were also buying into a sustainably conscious brand using biodegradable packaging.
The takeaway?
LesserEvil was able to connect deeply with customers due to its mission. Devout fans weren’t just buying a product but joining a movement to live a healthier lifestyle.
By tapping into what customers really wanted, LesserEvil was able to turn their business around.
🌐 IN THE SOCIAL SPHERE
Make sure to communicate how much effort it takes to develop your product. The more work it takes to make it, the more people perceive it as valuable.
📥 Got a B2B Biz?
Join dozens of B2B companies finding demand-gen success through our niche community of 160k brand leaders and founders this year. Talk to our team to learn more.
Have you heard our latest podcasts?
Don’t forget to rate the DTC Podcast on Apple (⭐️⭐️⭐️⭐️⭐️)
DTC Newsletter is written by Rebecca Knight and Frances Du. Edited by Eric Dyck.
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