Does Your Acquisition Strategy Need Work?

Hey everyone, 

Welcome back for another bite to chew on. 

Recently we talked about how acquisition isn’t everything - that your ads are there to grab attention and “sell the click”.

And you need to tune the rest of your funnel to make the sale so you can turn a one-time buyer into a long-time customer. 

That’s all true. BUT - 

Let’s face it, acquisition matters. A lot. It’s how you generate awareness and get people “in market” for your product. 

Because…your funnel isn’t going to deliver much value if you aren’t constantly filling it with qualified prospects.

Today, we’re going to take you through what we’re doing at Obvi to fill the funnel. Including what channels we invest in and what we do to measure our efforts. 

How we spend

We currently spend most of our time and money in four channels:

• Meta

• Influencers

• Google

• TikTok

This may or may not be the right mix for your brand, but we have found the best lift/ROI through these methods so far.

There has been a push to diversify away from Facebook (er..Meta) this year thanks to its many ahem challenges, but it remains our number one acquisition channel. 

In fact, Meta still consumes 90% of our media ad spend, with Google and TikTok coming in around 5% each.

The frustration around Meta’s instability this year is warranted. There have been more than a few drastic swings and budget-consuming bugs pop up in 2024 (for us included).

But as a DTC acquisition channel, it remains undefeated. 

It’s because Meta is so good and so far ahead of the alternatives that so much attention is paid to its performance across the ecosystem. 

So if you’re in DTC, you’re most likely going to have to wrestle the bear.

TikTok is a relatively new player on the scene and we are drip-feeding some budget to test certain creative angles to see if we can gain traction. 

Of course, influencer is also a major tentpole in our acquisition (as it should be for most DTC brands.) 

We leverage influencer marketing for affiliate, UGC, whitelisting, and organic awareness, so it’s a multi-pronged approach.

Google…is Google. 

We do some protective spend on branded search terms (ie; don’t let competitors steal your brand traffic), as well as some PMax/shopping campaigns. 

But, in truth, Google is mostly just harvesting intent rather than creating it. 

How we track

“Attribution” has become the holy grail in DTC since IOS14 came along.

And there are a lot of great tools out there to help you sort out where your sales are coming from and what ads are delivering the results. 

Internally, we use Triple Whale for attribution on a per-channel basis these days.

But you also should consider your acquisition efforts as a kind of constellation of inputs and outputs, 

Rather than an unconnected series of siloed “ads” or “channels”.

Meaning - your customer’s journey likely spans multiple devices and multiple channels… 

• They may come across an influencer’s review on TikTok - 

• Then click and an ad on Facebook -  

• And finally, search for your brand on Google - 

…before purchasing. This may happen over the course of hours, days or even weeks, depending on your AOV and consideration cycle.  

So you need to understand how your acquisition efforts are working together in concert rather than individually. 

That’s why at Obvi we have adopted a blended approach to acquisition tracking. 

How?

• First, we track total our ad spend, week over week

• Next, we figure out our new customer acquisition cost 

• Finally, we determine our contribution margin per customer

Ultimately what matters is if your overall “acquisition portfolio” is delivering profitable growth. 

If so, it grants you the opportunity to pull different levers and test the impacts. 

Did increasing your TikTok budget move the needle in terms of topline revenue? If so, what was your new (blended) customer acquisition cost?

Did your contribution margin per new customer improve? 

Etc.

How we improve 

We live in a world of increasing CACs.

You know it. We know it. 

We also know that consistent, high-volume creative testing is one of the main ways to improve performance. 

Especially on Meta. So here are some of the key ad-level metrics we pay attention to:

• Outbound CPC

• Outbound CTR

• Cost per initiated checkout

• CPA

Those are the big ones. We’ve found that stuff like hook and hold rate can be pale proxies for true value. All they tell you is that someone found your ad creative more or less engaging. 

For sure, these are clues that perhaps you are on the right track.

And can let you know what angles or messaging might deliver you a winner in the future as you iterate.

But, in truth, these are your main concerns:

• ✅ Are people clicking?

• ⏱ Are they staying on-site?

• 🛒 Are they adding things to their cart?

And, ultimately - are they buying?

Because you can create thumb-stopping creative all day long with tricks and gimmicks.

But if it’s not truly raising awareness and pushing interested, qualified buyers into your funnel, then you are ultimately optimizing for the wrong thing. 

Which is why engagement metrics aren’t as directly correlated to sales.

Of course, you should not completely ignore data in your ad manager. If an ad is killing it in terms of thumb-stop and hold rate, it is probably noteworthy. 

It’s telling you a story of what your audience finds interesting. But if it’s not resulting in clicks, add to carts, and sales you’ll need to go back to the drawing board and figure out why.

Because high engagement alone isn’t profitable and doesn’t scale. 

Tool of the Week

It’s not just CACs that keep rising. 

If you are locked in with one of the incumbent DTC retention tools, chances are you’re seeing significant cost creep over time. You know why they do this, right?

Because switching costs in terms of time, money, and friction are big. So even with potential savings available, they know they have most operators trapped. 

We were in this situation for a while. And then Sendlane came along with a game-changer of an offer  →

They call it “merchant-friendly migration”. What that means is you don’t pay them a single dollar until you’re fully moved over and onboarded. The team at Sendlane will also work with you to make the move as smooth and painless as possible. 

With the switch essentially de-risked by their “MNPL” offer, it made moving to Sendlane a no-brainer for us. 

Two more things before you go…

Speaking of not-great DTC metrics, check out our recent podcast with Drew Marconi of Intelligems talking about why CRO is a stupid metric…

And don’t forget to join me (Ron) for the upcoming free Shopify retention workshop where myself and industry leaders will talk about what tactics - and measures - to pay attention to when it comes to your SMS and email marketing. 

All the best, 

Ron and Ash