This ecommerce case study focuses on one of our clients, Lululittle. Lululittle is an ecommerce startup that sells personalized children’s books inspired by a Arabic culture.
[Ecommerce Case Study] How Did Lululittle Generate a 532% ROI on Their Marketing Over Christmas?
When Lululittle launched its online children’s bookstore, it was generating traffic to a website by way of multiple social media channels. However, the company was struggling to generate targeted traffic, and, most importantly, convert that traffic into successful sign-ups and customers.
Lululittle contacted GrowthRabbit in order to help them with both customer acquisition and the lead generation process. The company’s founder explained to us that November and December (the Black Friday and Christmas period) needed to be their best months, given that this period is always busy for those buying gifts. Fortunately, Lululittle had a budget that allowed them to invest in marketing during this timeframe.
The GrowthRabbit team then rolled up their sleeves and jumped into action. We started by auditing their ad accounts, analytics and backend data.
Based on business intelligence received from the founder of Lululittle, an audit report and the fact that their competitors use paid acquisition strategies, we decided to optimise their seeding stage by validating their paid acquisition channels and audience.
If we wanted to hit the home run during the Christmas period, we knew we had to establish the channels and audiences that we could rely on later. Otherwise, it would be very tough to predict the numbers and difficult to grow their customer acquisition funnel.
Once we validated the channel and audiences, we could potentially double the budget and reach the target – and that’s exactly what we did.
Customer Acquisition Channel Validation And Audience Validation
To optimise the seeding stage and validate channels, we brought in both intent and non-intent based channels. For instance, intent paid acquisition channels are Google Ads and Bing Ads, and non-intent paid acquisition channels are Facebook Ads, Instagram Ads and Messenger Ads. So, we brought these two types of paid ad platforms on board in order to start channel validation.
Next, we built initial customer personas so we could validate audiences. This was a very crucial part of the process, and ultimately, it was going to make or break it.
It’s of huge importance to understand these personas well from the outset because the needs of varying personas could be the same – but their perspectives, thinking, mindsets and interests could be very different. We needed to address and consider all of this when curating ads, ad copies and creatives.
Then, we needed to figure out what the maximum amount we could spend on acquiring one customer was. This would first help us get a break-even Customer Acquisition Cost (CAC) and then we could lower the CAC from there.
After speaking with the founder of Lululitte, we found out the gross margin and product cost to establish what this maximum amount would be.
Trying to figure this amount out for yourself? Here’s an example calculation for you to work with.
Ignore all metrics at this point and keep things simple. So, for example, let’s say your average order value is $100 and your gross margin is $40. This means your product cost is $60 and the maximum you can spend to acquire one customer is $40. If your CAC is $40, you would break-even – and this should be your first KPI.
Why do we use sprints for validations?
It’s always good to do things in batches or sprints. Today, effective tech, product and growth teams work on sprint basis. Ultimately, this helps you reduce marketing waste and get you results faster. Run between 5 to 8 sprints (each sprint lasts for one week). During these sprints, you will collect data that you can utilise to optimise.
After 5 to 8 weeks of this optimisation process and sprints, we were able to establish channels and audiences we could rely on to grow the acquisition process, and most importantly, hit that home run during the Christmas period 🙂
Finally, we activated a displacement strategy. During the sprints and optimisation stages, we figured out that which channel was converting well (giving us higher ROI and bringing in engaged users). Based on that data, we activated the displacement strategy. We displaced a budget to a channel that was working and converting well.
If you would like to know how to validate acquisition channels and audiences, check out this post >>> 5 Secrets To Acquire More Customers
In this ecommerce case study, we are going to talk about two results:
- We saw the first result straight away, both during and after the channel and audience validation. In addition to that, we reduced the overall customer acquisition cost (CAC) by 44.09% in first 14 days. Also, we increased the checkout conversion rate by 68.51% and generated 319.89% ROI in the first 40 days.
- The second result was during the Christmas period – November and December. Now that we had a channel and audiences that we could rely on, we were able to double our budget during November and December and over 60 days we generated a 532% overall marketing ROI.
Now, these are great results. But, they wouldn’t have been possible if we hadn’t decided to optimise the seeding stage or validate the paid acquisition channel and audiences. Ultimately, It was a strategic and systematic approach.
As you have seen in this ecommerce case study, a lot of things needed to be carried out during the customer acquisition process, and multiple skill-sets were needed to make it happen.
So, there you have it. We hope you enjoyed this ecommerce startup case study – and hope you picked up some points for your own business/startup!
If you’re in the same stage as Lululittle was back then, here are your options:
- You can make the most of a DIY approach and there’s absolutely nothing wrong with that.
- The GrowthRabbit team can help you instead – we literally work day and night to ensure the best possible results.
Over to you.