$700/mo to $250k/mo+ in 11 Months
Krakatoa is a boutique men's underwear brand based in Los Angeles, CA.
They have been in operation for 4 years, but we're looking for a deeper understanding of who their customers are and what motivates them to purchase.
They have a high repeat customer rate but were unsure how to find more customers like them.
After connecting with Formtoro and W-C Media, we took a look at their existing customer data then worked with them to design a customer journey aimed at data collection and promoting repeat sales earlier on in the journey.
The main challenges that we set out to overcome:
Understanding the quality of traffic being driven by ad spend
How to better personalize email
How to shorten the time between purchases
Challenge 1: Understanding the quality of traffic being driven by ad spend
Krakatoa was spending money on Facebook and Instagram ads but was only able to track their effectiveness based on hit-and-miss revenue.
They used a standard save 15% off your first order but were seeing low opt-in, and it was challenging to track conversion in a meaningful way.
Customers had no reason to come back without further incentivization.
A decrease in organic social reach and rising ad costs required a new approach to understanding who signed up and what factors led to purchase.
Instead of trading a single-use discount for an email address, we introduced incentive-based signups.
The visitor was prompted with an offer for a multi-use coupon code and encouraged to provide their email address with the requirement to fill out multiple-choice questions to unlock the full coupon.
This provided valuable data about the user's underwear preferences, what mattered most to them in their underwear, how many pairs they owned, and when they were looking to purchase.
Using the data points collected, we were able to find patterns that showed us the trends leading to purchase.
We were then able to use the top producing revenue data points and look for the ad sets producing the highest combination of those answers.
This allowed us to optimize our ad sets and audiences by applying the baseline data.
Challenge 2: How to better personalize email
Krakatoa built automated email flows in Klaviyo, but the content of the emails was a best guess related to the types of personas they had developed.
The best they had was progressive profiling hoping people would open the emails and click through them to collect more data.
Although Krakatoa had stellar open rates, it was still hard for them to understand who was purchasing their products.
With Formtoro, Krakatoa was able to gain four data points per signup, allowing them to segment the subscribers before sending out the first email creating a personalized journey from the start, which led to higher open rates and more engagement.
These data points were able to be used in other flows, including overcoming objections in the abandoned cart emails and allowing for easy segmentation when sending campaigns.
Challenge 3: How to shorten the time between purchases
Using a single signup form with a one-time discount forced the user to be torn between using a one-time discount on a new brand than having to pay the total price but outside of a fantastic experience, really had no reason to come back.
Generic competing coupons were quickly reported to coupon websites, and there was no means of tracking individual purchases.
Sales fluctuated based on the offers being presented.
Create a multi-use coupon code unique to the signup.
After looking at buying patterns, we opted to go with a 20% discount that was extended for a period of one year that could be used up to 6 times.
Taking the pressure off the first purchase to save as much as possible and instead of mapping customer behaviors to allow for people to try the brand at a discount then feel comfortable to come back and purchase again using that same discount.
By providing an available coupon code for multiple purchases, we were able to track redemption of the coupon code to better understand who our top customers were and retarget those who had purchased a single time to encourage further purchases.
We looked at the best questions to provide context for Krakatoa to understand the customer journey.
Then we built a signup process to deliver an experience that would promote repeat business while collecting data.
This allowed customers to get more targeted communications and allowed Krakatoa to optimize their ads based on the data sources.
This also allowed for easier retargeting throughout the customer's individual journey reducing the amount of spray and pray retargeting and increasing the personalization.
All decisions are made based on data collected.
Results after implementation
95.5% of people that signed up completed the entire form providing data
62% of people that added products to their cart completed their purchase
22% of people that signed up and provided data purchased
12.5% of people bought a second time within a month
50% reduction in CAC in less than 60 days
Scaled to $150,000 in monthly revenue by the end of December 2021.
Krakatoa's case study is only the tip of the iceberg of what's possible, as we've only gotten better and better and added more tools and strategies into our repertoire.