Can We Save the $1M Challenge? – We’re $577K Short

Luke Austin: [00:00:00] It's not an efficiency problem. It's a volume problem that we are looking to solve specifically to drive more new customer revenue. And how are we identifying those gaps within not leaving any revenue loss to budget within a branded search spending into our top performing campaigns within. Meta and pulling away from the lower performing campaigns and discussing ways that we can drive more new customer revenue volume to help bridge some of the gap

Richard Gaffin: Hey folks, welcome back to the Ecommerce Playbook Podcast. I'm your host, Richard Gaffin, Director of Digital Product Strategy here at Common Thread Collective.

And I'm here today with Luke Austin for a quick hit update on our, a million dollar in 14 days challenge. Now, we teed this up on the podcast last week, so you can go check out that episode if you want. But I, I'm gonna just turn it over to you, Luke, to kind of give us an update.

So first kick us off with just a brief overview of what we're doing again and then kind of jump into where we're at.

Luke Austin: Yes. So what we are doing is. Tracking over the course of 14 days over the back half of June [00:01:00] for a direct to consumer e-commerce brand that we work with tracking against, generating a million dollars in revenue within that 14 day time period to beat their business forecast for the month. A couple other data points that are interesting.

This would be. A hundred percent j just under 97% year over year growth in June in terms of top line revenue. If, if we're to accomplish this goal so substantial year over year growth and a substantial amount of revenue within that 14 day time period. And so we are on day eight.

Today is day day nine, but we have closed out day eight yesterday. And we are at $423,000 in order revenue against the million dollar target. And that is sit sitting just about 6% behind. The target that we had for where we would land by by the end of day eight. So $423,000 [00:02:00] against a million dollars in 14 days, and we're eight days through. For those of you good at doing linear, average math, we are, if we kept up the current pace, we'd land behind that a million dollars. Goal.

But there are some other things at play here in terms of what we're expecting to happen over the remainder of the month that we expect to have an outsize impact on the revenue

spend a few minutes talking about here.

But that is where we sit, eight days in to a million dollars in 14 days.

Richard Gaffin: okay. So, so talk about the last eight days. What's, so, what's working? Or maybe, maybe the, the thing to zero in on is like, what is the cause of this shortfall, I guess? I mean, you're not too far off the mark, but there's a little bit of a drawback. What's, what's kind of, or what's been happening there, I guess.

Luke Austin: Yeah, so we've been over pacing, returning customer revenue expectation, and under-pacing new customer revenue expectation. Which is leading to total revenue falling, falling short. So our returning customer revenue cohort is showing up at a higher rate than we expected. And to give a bit more context, there was a sale that [00:03:00] was run at the beginning of the month, the first few days of the month. That did really well. Put us some really strong days. And then. We've been in our sort of normal full price, evergreen rhythm as we build up towards another marketing moment that's, that's slated at the end of the month. So we haven't seen returning customer revenue drop off as much as we expected it to. Following the sale. So that's good. That's sort of helped to helped to alleviate the shortfalls on the new customer revenue side of things. New customer revenue is where we're seeing, where we're seeing the biggest drop off.

And what we've been doing is pacing in alignment with our A MER target as the core new customer acquisition efficiency.

We're plus 3% to a MER target over the course of those eight days. So sitting right where we want to be in terms of acquisition efficiency, but the volume isn't there.

And so many of the conversations we've been having in our daily updates that we've been putting out, revolve around how do we drive how do we drive more volume of new customer revenue?

It's not an efficiency [00:04:00] problem. It's a volume problem that we are looking to solve specifically to drive more new customer revenue. And how are we identifying those gaps within not leaving any revenue loss to budget within a branded search spending into our top performing campaigns within. Meta and pulling away from the lower performing campaigns and discussing ways that we can drive more new customer revenue volume to help to help bridge some of the gap that we've been seeing.

Richard Gaffin: Yeah. Okay. So you obviously, you mentioned some of the actions that you're taking right now, and, and obviously the whole point of this exercise is that being in a bit of a shortfall at this point in the month is, that's not unusual, but the idea is that you evaluate where you're at and then take a series of actions against that.

So, but part of it is also as well, kind of you alluded to this at the beginning, that, okay, so we're at, you know. Four 50 k or whatever at this point in the month with a little more than, or a little less than half of the days left to go. But you mentioned if we were talking about linear averages, we would kind of be pacing behind.

But of course that's not actually how things work. [00:05:00] In terms of how that revenue is weighted in this month,

what's the expectation for what's going to happen in these next six days?

Luke Austin: Yeah, that's a great question. So in a couple days ago worth, worth giving it a listen all our daily updates are two to three minute short clip videos, but we walked through the system that we use at CTC for building a financial cl clarity around a financial and marketing plan that ladders to. The business goal that, that we're after. And so we walk through the plan section in stat, stat lists, the use of our customer models, new customer model, returning customer model, event effect model integration in the marketing calendar the budget allocation and media mix the cost integration to get to a p and l level output and daily targets for each of those things.

So worth giving a listen to get some more context on what specifically are the tools and what is the process that we're using to land on these daily targets where we're able to say. Through day eight, we're 5.9% behind revenue goal for those for those days. And we have that laid out for 35 plus critical business [00:06:00] and marketing metrics.

But where we're, where we're at currently is we have our daily revenue targets have been, I. With some fluctuation ba based on day a week effect, hovering around 55 KA day in order revenue. So that's, that's roughly what the average over the past eight days has been. And over the next couple days, that's what, where the revenue targets are at 55 to 57 K in order revenue with some fluctuation based on, on, on the day of week effect the 26th. There is a big marketing moment launching that the brand has put an immense amount of effort and time and thought and strategy into it is a brand collaboration that launches on the 26th. And there's, there's different marketing events tied to the subsequent following days related to this brand collaboration. Launch. So that is a big key moment. That what I'll say and what I'll, what I'll tease a bit here is this brand is best in class [00:07:00] in terms of putting together these. Big hit marketing moments like the one that we're going to see starting on June 26th. And so what we have planned is daily revenue targets that about double from what we're currently pacing at.

So we're gonna, we're gonna have to step up about double in terms of the daily revenue expectation here. And hold that for a number of few days to be able to hit our revenue target. And then again, we're pacing behind so far the first eight days, so we're gonna have to make up some of that revenue so we do have a higher expectation. What I will say is, my hypothesis is these, this brand collab marketing moment is going to is going to substantially outperform some of these expectations for some of these days. To what extent, I'm not sure what specific days it's going to outpace. I. Again I'm not, I'm not sure what that's gonna look like, but this brand is best in class at putting these together and this has been months in the making. And we are really excited to see, to see what it looks like. So there's a lot of weight hanging on this [00:08:00] brand club marketing moment, starting on the 26th and then going for a few days through the rest of the month that's going to make or break whether, whether we're gonna get to this million dollars in 14 days. I think there's gonna be some fireworks in either direction.

Richard Gaffin: Alright, I like it. And if you wanna find out how all of this comes to a close just follow Luke. We're dropping these daily on, primarily on YouTube shorts, I think. So you can check that out at the Common Thread Coast Channel. So check it out, follow along, and we will see you with Luke again at the end of this to give a little bit of a postmortem on what happened and to kind of break down the whole thing.

So, alright folks. Just a quick one. Thanks for joining us and we'll see you next week. See you.