💰 Intelligems - The Ultimate Profit Optimization Tool🔗 https://www.intelligems.io/
In this episode of Chew on CRO, part of the Intelligems series, Ash and Drew sit down with Dave, the President of Bambu Earth, to discuss conversion rate optimization (CRO) and how it ties into their marketing strategies, specifically using cost caps. Dave shares his philosophy on maximizing revenue per session and how focusing on efficiency can lead to significant volume growth. They discuss the importance of testing and implementing CRO strategies to improve efficiency and increase volume, with a focus on surprising customers with free shipping to increase AOV. They also discuss the benefits of subscription models and memberships, emphasizing how these recurring revenue streams can stabilize business and enhance customer lifetime value (LTV). Dave stresses the importance of understanding unit economics and identifying natural affinities within the customer base to optimize offers and increase profit.
🎯 Maximizing Revenue Per Session: Dave emphasizes the importance of converting CPMs into margin per thousand (profit per thousand), effectively turning ad impressions into profitable transactions.
💰 The Power of Cost Caps: Cost caps offer both downside protection and upside potential. They enable brands to control efficiency while allowing volume to fluctuate based on performance.
🎁 Surprise Free Shipping: This strategy leverages price sensitivity in new customers by offering unexpected free shipping, boosting conversion rates and reducing cart abandonment.
🤝 Win-Win Offers: Dave encourages crafting offers that benefit both customers and the business. For example, including a free gift with a higher-value bundle can increase AOV without negatively impacting conversion rates.
🚀 Optimizing for LTV: Dave advocates for testing and implementing subscription models and memberships to increase customer lifetime value, stabilizing revenue and creating a more predictable business model.
0:00 - Intro.
2:15 - Improving CRO to increase spend and volume.
5:01 - Optimizing CPM and variable RPM.
7:00 - Efficiency, margin, and volume in advertising.
10:06 - Manual bids and cost caps for downside protection and efficiency control.
14:05 - Adjusting cost caps based on performance.
18:05 - Increasing margin per session by offering discounts strategically.
20:01 - New customers vs repeat customers.
27:49 - Value of annual ARR for companies.
28:22 - Strategies for A/B testing and behavior retention.
29:07 - Increasing revenue through product subscription.
30:03 - Managing shipping costs and packaging efficiency.
31:25 - Membership model for recurring revenue.
33:00 - Impact of subscriptions on customer LTV.
34:39 - Stabilizing revenue through subscriptions and memberships.
36:02 - Impact of discounts on customer LTV.
37:38 - Balancing conversion rate, AOV, and margin in offers.
41:08 - Personalized content for better performance.
42:01 - Leveraging quizzes for personalization and guiding customers to the right products.
46:06 - Branching logic in quizzes to tailor product recommendations.
52:47 - Final chew.
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