🏔 Hitting the Plateau

It’s been more than a month since I’ve sent over a newsletter. Part of the reason for this is that I haven’t had much to say that is on the positive side of things. I feel like it’s been a slog of trying to solve problems while also enjoying a bit of a trip I’ve been on.

I have been in Peru, working remotely for a bit and decided to do a trek called the Salkantay Trek, which is a total of 5 days and 50 miles in total of hiking up mountains and down mountains. I feel like I’m getting old with my knees feeling like they’re 100 years old. But I survived and got to see Machu Picchu.

This is a perfect situation for our Ache-erasing soaks from Flewd, unfortunate that I didn’t have any with me (+ any access to an actual bath).

One lesson I’ve learned in the process of scaling brands is that the scaling sometimes hits a plateau. Sometimes it always feels like you’re blitz-scaling at 200-300% growth, which is really fun. But what happens when you run into months where you don’t hit those major growth levels that you were used to hitting?

This is a question I am facing myself at the moment. When you project 3.5-4X growth YoY but then you see a slow down with even historical data showing you should see stronger numbers, what is the best way to move forward?

To be honest, I think this is a tough question to answer, though I believe most of the answers go back to the fundamentals. Plus some things that I believe have very little to do with the actual marketing around the brand which I feel the most connected to and able to speak on.

Our current slate of brands

• Flewd

• Brand X 🙂

How to deal with a plateau

First off, I think it’s really important to understand what can actually be done in the midst of a plateau. If you have projected higher revenue numbers than you’re hitting, there are a few things that I find to be super important in the process:

• Review your previous months, and the months you hit your goals + the months you didn’t. What changed?

• Re-project your next 3-5 months, understanding that you may be too far behind to recoup what you have lost in your projections

• Re-assess what is working and not working in your efforts from new customer acquisition, to retention, to CRO, and others

• Re-map what you can expand into when it comes to revenue streams

I guess you can call this the 4 R’s. But I think I really forced this one here. But in the end, my overall goal here is to really understand what is actually happening in the business so you can then move forward with clarity and understanding.

The worst thing you can do in your brand is to continue to fool yourself into thinking you can hit your projections, along with also not understanding why you didn’t hit them. Once you understand all this, then you can plan to see how you can get back to hitting your goals, and maybe even overachieve those goals as well.

I’ll break down each section that can help you clarify how to do these elements as well as possible:

Review

Looking back to previous years is nice, but I have been fooled many times by this practice. If you look back at the last 3 years of data, you will likely have a hard time projecting well. I do like to look at tools like Lifetimely to look at historical data, but sometimes the data doesn’t reflect what happens in reality.

For example, our new customer acquisition costs (NCPA) during one month last year were $33, and I expected a similar result this year. We had an increase of $7 in total for NCPA in the same month. This makes a massive difference in overall ability to scale. Granted, this is just a couple historical years and we will need to re-assess over time, but it’s good to be able to understand your numbers and you should see a trend over multiple years of data (outside of major changes like COVID skewing the numbers).

Re-Project

We have a P&L that is robust yet simple. We find it to be extremely helpful to clarify what needs to happen when it comes to overall profit as well as overviewing all of our expenses on a monthly basis. We make projections for the year, but it is silly to hold onto those projections if you are outgrowing them or underperforming.

It’s good to adjust your projections every 3-4 months, depending on how big your business is (sometimes more often). If you are not hitting your targets every month, it is not a good idea to continue to have unrealistic goals for the team morale and also for overall projections and product orders. This can be very detrimental to all parties involved as it’s demotivating to not hit our goals + terrible when you’re working through how to maintain positive cash flow and cash on hand.

Re-Assess

What’s really not working? One of the issues we found as we did a deeper dive in terms of what wasn’t working was our Google strategy. We were wasting a good amount of budget on Performance Max (I know, a tale as old as time…) and we should have been investing in more top of funnel channels for us like Meta & TikTok.

So we cut down spend quite a bit on PMax and have adjusted our budget accordingly to focus on those channels more. I’m talking $60,000 in spend off PMAX and moving that to Meta + TikTok. This has already shown itself to be much more effective.

We have looked at our creator process — we test around 250 assets per month, but some of the assets could be much higher quality. This means we needed to look at what creators were doing really well, and for the new creators we onboarded, what needed to improve or change? One big change is getting b-roll + testimonials from these creators instead of finished assets and having our video editing team make adjustments.

Re-Map

This is one of my favorite parts about figuring out what to do in situations where we aren’t performing at our best. What do we do in a situation where we’re not hitting our goals? We look for ways to get closer to them.

For us, we are implementing a few different strategies that will help in the mid to long term for our brands. One of those strategies is SEO. I think most brands should have a strong SEO strategy if they can, but sometimes it’s not realistic until you’re a bit further down the line.

Brands that are above 5M+ a year should realistically be implementing SEO strategies as that will help overall organic traffic and bring a healthier balance away from the reliance on paid channels.

The truth though is that SEO takes around 4-6 months to be effective, so you need to invest early and be patient to see the effects come in over time. But the earlier you can invest, the faster you start to see it pay off. For brands who haven’t invested in SEO they will see some strong numbers fairly quickly due to the lack of SEO traffic coming from the..lack of efforts (aka our brands).

The other strategy we are rolling out is affiliate. I remember having a call with a brand owner who was doing 50M a year, with 14M of it coming from affiliate partnerships. Generally, this type of affiliate partnership comes from paid traffic affiliates, and if you nail your offer well it can help the brand quite a bit.

We will be working on getting this in a good spot over the next 30-60 days and hope to grow our affiliate channel over time.

We are then doubling down on what we best, which is Meta ads + TikTok. We know that this is a space we can see a lot more success, just need to continue to improve the main metrics and output including: stronger creative, stronger funnels (landing pages + offers), and stronger AOV.

I shared some of these insights in this Tweet below 👇️

Biggest lessons over the last month:

• When you don’t hit projections, don’t panic. Just make sure you know what to do next

• When assessing your efforts, make sure to clarify what needs to be added, what needs to be subtracted, and what needs to be improved

• Never be fearful of adjusting your projections, which may mean you need to adjust your overall budget for overhead, but it’s important to know what you’re realistically going to do.

What’s working

• Not Much 😐️

• Editorial Whitelisting 🔥🔥 (if you’re interested in getting help with this, reach out to me as we are doing this for our health & wellness brands + bringing on agency partners + individual brands)

• ABO Creative Testing 😐️

• 1DC 🔥

• Interest targeting 🔥

• Lookalike Audiences 👀

Winning creative of the month

Memes Live On

Haven’t we given enough money to Zuck? He deserves to pay us back in more ways than one. This one gets a ton of comments about “Lizard people” and the like. It’s a bit hilarious, but I love it.

When you find winners, you have to try to just keep them going as long as possible. One insight I’ve found with our creative is that we end up seeing that most of our creative winners last for around 14-30 days if spend is going to them at a very high rate. I think this is something to just keep in mind. The goal is to always replenish the ad account with strong creative so you can support not only scaled up spend, but also consistent spend.

How we’ve expanded our spend for winning creative is throwing them into lookalike audiences + also adding them to interest stack targeting. We have actually been able to spend longer and more profitably with this setup, and will continue to do this until it doesn’t work.

I recommend trying this out if you haven’t to see if it works in your accounts.

Sponsored - Foxwell Founders

There’s not a better community for marketers out there outside of the Foxwell Founders group. Highly recommend checking them out if you are an agency owner or even a brand owner. I have seen many who work as heads of creative for brands in this group as well, and it’s a really wonderful group, I highly recommend.

Performance Update

June was projected to be stronger for our brands. We had some struggles overall, and I feel like we have some real solutions that we have figured out along with working our hardest to get back on track.

It’s interesting to see the main way that some grow and face plateaus, while some brands just don’t slow down. We’re definitely working with some slowing down but I believe it’s a short-term issue that will fix itself with being better across the board.

Here’s what we ended up at for the month of June:

Flewd

• Revenue - 557k

• MER - 2.77 MER

• Spend - 201k

Brand X

• Revenue - 36k

• MER - 2.66 MER

• Spend - 10.5k

Reviewing last months goals, and upcoming goals for July

Goals for June (to review) + July

June Goals

• Find 4-6 winners → ❌ Found 2 real “winners” that could support over 100k+ in ad spend. These are what I like to call “unicorns” that can help expand and scale. We want to get at least 4-6 winners every month if we can. And that means we have to test a ton.

• Get retention going for Brand X: ✅ Just surpassed 1k MRR with subscriptions. This is a major start for the brand and we are excited to grow subscription revenue over time.

• Hit our baseline revenue goals for both brands. ❌ We did not hit our goals

July Goals:

• Get SEO up and running

• Ramp up spend on TikTok - we are spending a sizable amount with other brands, and want to up our spend with our brands. This usually helps hit net new customers and impressions that pour over into Meta

• Get up two new landing page funnels for brands that could help unlock more scale.

One note - we have dropped Google spend by 85% and we have not seen any meaningful drop in revenue. I’m super excited to see what we can do over the next few months as we ramp up for BFCM, which I’ll share insights on that soon enough.