Direct-to-consumer health products

Scaling Ad Spend 3x and Reaching Profitability in Seven Months

A strong growth plan across targeting, creative testing, website A/B testing and lifecycle compounded to scale monthly ad spend 3x at a constant cost of acquisition, and took the business from losing money to profitable in seven months.

Product: Direct-to-consumer health products
Model: Product purchase plus a monthly subscription
Timeframe: 17 months

Results

3.1x

Monthly ad spend, to $276K a month managed

Flat

Cost of acquisition while spend scaled 3x

2.4x

New customers acquired a month

-27% to +12%

Net margin, profitable seven months in

3x the monthly ad spend, at a flat cost of acquisition

2.4x the new customers a month, and profitable seven months in

What we did

- Audience and product targeting, matching each use case for the product to the audience it serves
  - Tested new audiences beyond the core buyer, like expecting parents, longevity and brain health, alongside iterations of past winners
  - Split campaigns by age and gender and read each one against cost of acquisition
  - Launched new bottom-of-funnel audiences and mid-funnel campaigns, the two highest-scored paid projects on the board
- A creative testing roadmap built from why people buy
  - Every concept started from a trigger and the feeling under it, like a condition that runs in the family or a doctor who could not give an answer, then the message that answers it
  - Ideas came from competitor ads, user research, customer interviews and the team, scheduled month by month so the tests ran in order
- Website A/B testing and optimization on the landing pages and checkout
  - Tested bundles and pricing for a high-priced purchase
  - Added buy now, pay later and HSA/FSA payment to answer the price objection at checkout
  - Built promos around the big shopping holidays, for a product people buy as a gift
- Bolstered the lifecycle program to pick up conversion drop-off in the cart and checkout
  - Abandoned cart, failed payment recovery, upsell and win-back flows, each tied to revenue, churn or LTV:CAC
  - Subscribers grew 5x and monthly subscriber churn fell from 17.6% to 12%
- A holistic growth strategy that sized our growth bets and put investment behind the key areas that drive future growth
  - Every channel and project was sized in yearly revenue from our own data or benchmarks, then scored on complexity and effort
  - Investment went first to making the channels already working perform better, and new channels were validated with a small test before they got real budget