Our 2024 DTC Strategy for Neat Apparel (Don't tell anyone!) (#164)
And that's a thing that a lot of brands think about, but don't go as aggressive about, where you need to understand, do you know the natural seasonality of your business?
Speaker 2:I'm Jim Hoffman, and this is If I Was Starting Today, a collection of conversations about half baked startup ideas, growth tactics, and stories from founders, including my own journey as a business owner. All of the content is centered around one question.
Speaker 3:What would you do if you were starting today?
Speaker 1:Hello. Welcome to today's episode of If I Was Starting Today. I'm sitting here. It's late February, and in two days, I'm flying to New York City to do a photoshoot for our new brand, Neat. And by do a photoshoot, I mean, we got the cheapest possible venue in all of Brooklyn, the cheapest and maybe the smallest, so we could use more money for a good model, a good photographer.
Speaker 1:And I'm flying in town, not because I have any skills, but to ensure we squeeze the most amount of assets and images and videos out of this. But as I'm leading up to this, I thought it would be fun to do an update on our brand need and where we're at today. We finished the acquisition late q four twenty twenty three. And as we get the year going, there's a lot happening. So as a recap, we have a growth marketing agency called GrowthHead.
Speaker 1:We work with a lot of Shopify direct to consumer brands. And we're like, hey. If we're so good at growing this, why don't we get our own company? And we got lucky. It was very serendipitous.
Speaker 1:A client of ours had a brand called Neat Sweatproof of Apparel, and it just made sense for us to come in, acquire it, and then take it over. They're still very much involved. And as we take it over, there's a lot of fun things going on. So the the first thing that I did post acquisition was what I call shut up and listen. Instead of just coming in thinking I know the answers to everything, I did the opposite.
Speaker 1:I set up, you know, 50 plus conversations with customers to really get a feel for how they heard about the product, what they like about it, what they don't like about it, other brands they use, their wish list for product development, and what they would change about it. And it was eye opening. It really changed some assumptions that I had. A lot of our early adopters are people that have hyperhidrosis, severe sweating, or menopause, or it's people in warm climates where they walk out and they're just sweating, and they they don't need, but they have to have a shirt that can keep up with them. If not, they will even go out, or they will have to bring a back up.
Speaker 1:So that was really interesting to see the utility of it and to hear some of the tweaks they would want. Until also understanding from our standpoint, what's working and not working with the website, with how we're getting traffic. And so there wasn't a lot going on as far as driving traffic, so that's the opportunity. Alright. So the second phase, this is where I can roll up my sleeves and get my hands dirty.
Speaker 1:And it wasn't like, hey. Turn on the ads and do everything. It was the complete opposite. I wanted to do what I call lay the foundation, and it's super simple. Do we have the infrastructure in place to start growing and start marketing?
Speaker 1:So first, the data. Let's look at Google Analytics. Let's look at Shopify. Let's look at a Facebook pixel. Let's look at the conversion tracking on AdWords.
Speaker 1:Is this all working properly? Is it double counting? Is it accurate? That way, we have the right data to make the right decisions. Right?
Speaker 1:This the the next part of that is the website. So we looked at the website. It wasn't horrible, but as a conversion rate optimization agency, we're kind of licking our lips. Like, okay. We need to make this a conversion machine.
Speaker 1:And I'm gonna come back to that in a minute on how we thought through conversion with this industry and this category because it's super important. The next part was email. Do we have email set up? And when I say email, it's the email automation flows. Do we have, you know, the welcome flow, the first purchase flow, the win back flow, the abandonment flows, referral flows?
Speaker 1:All of those are key to direct consumer brands or ecommerce because the money usually isn't in the first purchase. The money is in the second, third, fourth, and fifth. And the more you can compress that buying cycle, the better it can be. Okay. So that's something we've been working on is that foundation.
Speaker 1:The the third part that I'll talk about is crafting the strategy. So it's like, alright. We've got this d two c brand. Let's go. What do we do?
Speaker 1:So first, we need to know the resources we're working with. We are not a venture backed company. We do we're not sitting on a gold light of cash. We have limited cash reserves, so we have to be really thoughtful in how we grow. So what does that mean?
Speaker 1:We can't just YOLO this and throw money at Facebook and hope it works. That's definitely part of it, but we have to balance our acquisition strategy. Part of it is what I call scrappy bottoms up marketing, where with hand to hand combat, where we're getting it by being really crafty. The second is a more scalable channel like paid acquisition. For us, we're only focusing on Facebook, Instagram meta, and Google Ads, where with the first hundred thousand we're spending per month.
Speaker 1:As we expand beyond that, we'll be looking at others. But too many times, we see brands diversify too soon, and we will not be making that mistake. Alright. The other part that I'm looking at from a strategy standpoint, now that we know the resources, if we are gonna run paid ads, it will not work if we're just trying to sell one off t shirts for $40. Because usually to acquire a customer with how expensive cost per impression CPMs are with Facebook and Instagram, you're gonna be spending 20 to $30 per acquisition unless you're super aggressive with your offer or you've created some lightning in a bottle viral campaign, which we will try and do, but I'm not gonna bank on it just yet.
Speaker 1:So for us, we have to create a strategy of average order values. Right now, the website is about selling single products. We're totally changing that. It's all about bundles. Buy three, get four free.
Speaker 1:Buy four, get five free. We need our average order value to be up over a hundred dollars. If we're able to do that, I'll gladly be spending, you know, $40 to acquire someone as as a cost per acquisition ceiling. So that's one callout. The other callout is if we can't get them with bundles, we need to be very, very good at going for the upsell.
Speaker 1:That could be at the cart level. That could also be a post purchase purchase upsell with an on-site experience or with an email campaign. So that's something that as I talk about infrastructure, we're also designing that into it because it is so important with this this business model that we really get a strong AOV and lifetime value. And some brands we've looked at for inspiration, Chubbies and ThirdLove, those brands are putting on a masterclass with average order values and upsells. So with us, I posted this on our our the GrowthHead blog, but we're doing things where, you know, unlock free shipping at a certain pricing threshold, unlock a free product at another pricing threshold, and there's some other things that that we will be doing.
Speaker 1:Alright. So as we look at the strategy that you kind of know what I'm going for. I know the resources I can do with free channels and paid channels. I know the AOV that I want, and then having those emails in place is essential so we extend the lifetime value. Now, as we go to part four, this is the most important thing with any d to c brand, and it's all around customer acquisitions.
Speaker 1:As we look at our brands that have gone to 7 figures and failed to hit 8 figures, it's because they didn't nail their customer acquisition strategy. So for us, it's very simple. We are in what I call red ocean. It is a knife fight. There's a bazillion shirt brands out there.
Speaker 1:So we can't just be like, oh, wow. Look at this new shirt. Everyone's gonna love it. No. People already have their favorite brands.
Speaker 1:So we have to do two things. We have to have a phenomenal point of differentiation in value prop, and two, get people to switch. So for us, it's like, hey. You have your favorite shirts. You have your favorite brands.
Speaker 1:That's great. But does your shirt actually perform? Is it sweat proof? Is it something you can wear and you won't sweat through? Make the switch today.
Speaker 1:So that's something that we're really pushing and championing is really leaning into that reason to switch and the reason to try. And by doing that, we're not telling people, we're showing people. As we're going after a lot of influencers and content creators, it's all around that core messaging of point of differentiation. And so we're even put thing put putting things in place like guarantees on, you know, if you sweat through the shirt, you get it for free, or we'll send you a new one on us. We also get inspiration from other brands that have entered a red ocean type of market, like Third Love, the bra brand.
Speaker 1:They're going after Victoria's Secret, and they're competing on one core element, and that is fit. So that's one thing that we're doing. A second component is it's not enough just to have a great, you know, value prop and point of differentiation. You have to give them a little bit of urgency and a reason to try it today. So we've been playing around with what I call some irresistible offers.
Speaker 1:We're giving Ray free shirts that they share on social. We're giving them a free product if they buy one. We're doing the guarantee. We're doing the water balloon test where we're having people pop water balloons in their shirt to show that the water doesn't go through. Again, showing, not telling, all on this point of differentiation on how you can't sweat through our shirt.
Speaker 1:And a lot of the content that we're doing is really around that demo. So we've been writing scripts for a lot of content creators. We're we're going direct to content creators. We're using platforms like Joyn Brands to really have this unified message and with different personas. It could be the golfer.
Speaker 1:It could be the person in South Beach. It could be a person that's starting to sweat because they're doing a presentation. We're testing all these different personas. Okay. Now, let's talk about we have our point of differentiation, and we have, you know, the offers that we're putting out there.
Speaker 1:And it's all about showing, not telling. Now it's about how do we promote this and put it out there. So one thing that we're doing is it's it's very much hand to hand combat. We're mainly reaching out to different communities, bloggers, and editors to give them a product, see if they like it, and see if they'll talk about it within their community or on their platform. We're earmarking basically 500 products that we can do this with.
Speaker 1:What the conversion rate will be with that, I don't know yet, but it's something that we're going after. If you if you see my LinkedIn stuff, I'm handing out shirts left and right to what I call micro influencers. This is something that is a long, play, but this is how we can build those early adopters, where we can really control the narrative and the story of of the brand. Alright. The second thing that we're doing, it's really around, you know, the creative on the paid campaigns.
Speaker 1:So for Facebook and Instagram, we've come up with about 30 different concepts that we're creating. Some are, you know, user generated content of influencers doing a demo of the product. We're doing some that are ugly ads. We're doing some where it talks about the science behind it. We're doing some where it talks about the problem that we solve.
Speaker 1:We're doing ones where it's just attention grabbing and kind of fun. And there we'll be publishing all the ads we do. Some are ugly. Some are beautiful. So you can see the the spectrum of what we do.
Speaker 1:But we know with our growth agency really well how to play with the machine learning and to scale campaigns, but the most important thing is creative. Hence, why I'm about to go to New York to do a photo shoot. On the Google Ads and SEO side, with Google Ads, we are doing a significant spin there, but it's really going after the long tail searches, where people that are actively looking for a shirt with a problem that we solve is who we want. I'm not going after people that are like, oh, I need a new crewneck shirt. That that will be a knife fight.
Speaker 1:Instead, it's people that are like, hey, need a shirt that won't show sweat stains or need a sweat proof shirt. Those are ones, while the search volume might not be high, the intent is there. And that's a lot of low hanging fruit that we wanna capture. So we will be spending probably out of our ad budget, you know, 70% will go towards Facebook and Instagram, and the remaining 30% will go towards Google Ads. And then we'll be readjusting based on performance, and then we'll be readjusting based on seasonality.
Speaker 1:Another thing that we're doing, lots of things I'm talking about are more short term. The long term opportunities we're looking at is SEO, search engine optimization. What the technical setup of our website and the SEO driven content strategy. When I say technical setup of our website, there's this thing called faceted navigation, where based on how people filter through your collection pages or category pages, you can make those pages be something that you submit to Google so you have found traffic just on the natural site map of your website. So, for example, if you're Lowe's or Home Depot and people go to your collection page and they start filtering, oh, I need a refrigerator with French doors.
Speaker 1:It can create a page that all of a sudden is talking about refrigerators with French doors. You put a FAQ on it, and then bam, you're on the first page of Google. And as you have, you know, a website that has over thirty, fifty SKUs, you have the ability to do that. So many brands are taking advantage of that, and that's something that we do at our agency that we'll be doing ourselves. Another thing is owning the kind of blog content around any conversations with, you know, sweat proof shirts, hyperhidrosis, shirts for menopause, that those are things that that we wanna be participating in and playing with.
Speaker 1:So that's some of the ways we're we're driving traffic. So what's next? Where are we at right now? So as I sit today, I'm packing up for our photoshoot in Brooklyn. I'm literally bringing some of my clothes for the model to wear in addition to the shirt.
Speaker 1:So if you don't like the clothes, it is my fault because they are mine, especially the shoes. I have to clean them for them. But the website is almost done. We are testing it right now. We'll be talking about it.
Speaker 1:So it'll probably be up and live and running by mid March so you can see the latest designs and how we've optimized the bottom of the funnel. Emails are being built out from the email flows that I said. Those should be done here in the next month. The ad creative, which is super exciting, we finished about a fourth of it. We're working on the scripts for the content creators, and we're starting to get that back.
Speaker 1:And honestly, I've been pretty excited about that. The other thing is we are entering peak season. And as a company that makes sweat proof shirts, summer is is time to make hay. And we know what's coming, so we'll be flipping on ads at the March in preparation for the the peak season that that's happening. And that's a thing that a lot of brands, I think, think about, but don't go as aggressive about, where you need to understand, do you know the natural seasonality of your business?
Speaker 1:You know, usually, with a lot of direct to consumer and ecommerce brands, there's two natural highs in your twelve month calendar. One could be q '4 because of Black Friday, Cyber Monday. Another, like us, could be in the summer because of the use case of our shirts. But that also means there are two lows throughout your twelve month calendar. That could be q one because things are slow from the q four holiday the year before, or it could be q three.
Speaker 1:And what we're trying to do is really go super aggressive, not underspend in the peak seasons, but in those low seasons. That's where we're getting really creative where we can experiment with crazy campaigns, viral stunts, new product launches and drops. So those are things that we'll be factoring in as our inventory allows it. And then, yeah, we're doing the photoshoot here in two days, and we'll see how that goes. But but that's the latest on the in the strategy that we have.
Speaker 1:I'm excited to report back on some of the numbers on, you know, what we've invested in ad spend and how that's performing and how that's scaling. But more to come. If you would like to follow along with how we're growing meat, you can just go to the growthhit.com website, growthhit.com/blogorresources. And if you go to the blog, you'll see a section where it shows the weekly posts we're doing about needs, the ads we're making to the the strategy behind it. And if you want a shirt, go to kneedapparel.com, and I would love to have you you check it out.
Speaker 1:Then, finally, we've been doing a lot of different things on the podcast. I'm test testing different content types. We're really seeing that people are enjoying our updates that we do on Growthhead or on the brands that we acquire or that we're starting. People are also enjoying, you know, what we call iconic reads, where we break down some of our favorite books or blog posts that can help you with whatever you're working on. But we'd love to know what you you think.
Speaker 1:You you can send me an email at jimgruth. Thank you all so much for listening. Really appreciate it.
Speaker 3:I'll give a few plugs. First, I send a weekly newsletter each Thursday featuring five articles or tools that have helped me. You can sign up these weekly updates at jimwhuffman.com. Second, for anyone running a startup, if you need help growing your business, check out GrowthHit. GrowthHit serves as your external growth team.
Speaker 3:After working with over a hundred startups and generating a quarter billion in sales for clients, Growthit has perfected a growth process that's hell bent on driving ROI through rapid experiments. Plus, you'll get to work with yours truly. So if you wanna work with a team that's worked with startups have been funded by Andreessen Horowitz or featured on Shark Tank, then check out growthhit.com. And finally, I wrote a book called the growth marketers playbook that takes everything I've learned as a growth mentor for venture backed startups and I've distilled it down to a 40 pages. So instead of hiring a growth team, save yourself some money, get the book and you can just do it yourself.
Speaker 3:I hope you enjoyed this episode and I'd love to hear your feedback. I'm on Twitter at Jim w Huffman.
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