14 Days, $1.28M: We CRUSHED Our Million-Dollar Challenge!

[00:00:00] Luke Austin: We had four days left in the month and we were at 520 5K in order revenue against 

[00:00:06] Richard Gaffin: Mom. 

[00:00:07] Luke Austin: million dollar target over that 14 day period. So we were 10 days in and 520 5K in revenue against a million dollar goal. So there was an outsized revenue expectation that needed to be realized in the last four days of the month to bridge almost half a million dollars in order revenue to get to that million dollar goal.

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Hey folks. Welcome to the E-Commerce Playbook Podcast. I'm your host, Richard Gaffen, director of Digital Product Strategy here at Common Thread Collective. And I'm joined once again by our VP of e-commerce strategy, Mr. Luke Austin, who is here with a report, a final report on our 14 day million dollar and 14 day challenge.

So, Luca, what's going on, man?

[00:01:37] Luke Austin: We beat, we beat the million dollars in 14 days.

[00:01:39] Richard Gaffin: That's

That's. 1.28 against the million. And it's, it's funny it we're, I think a little, we are a little delayed in getting that last, last video out and, and in having this conversation, but in our, in the last conversation we had about this, for those that may remember.

[00:01:55] Luke Austin: We were three days, four days left in the month, and we Mm-hmm. pretty meaningful revenue gap to [00:02:00] get after. Yeah. my hypothesis is that we were gonna see some fireworks from, from the marketing moment that the brand had planned. And, and we did. And then we 

[00:02:09] Richard Gaffin: Yeah. 

[00:02:09] Luke Austin: fireworks over 4th of July weekend. And then now we're here 

[00:02:11] Richard Gaffin: Of course. 

[00:02:12] Luke Austin: and we're wrapping together.

it was it was a fantastic end of the month for the brand. It really 

[00:02:17] Richard Gaffin: Alright, so, so let's actually the kind of go back and, and for those people who haven't been following along or just tuning in or whatever the case may be kind of give us a recap of what this challenge was, what the kind of initial stakes were. And then we can kind of jump into what happened.

[00:02:33] Luke Austin: Yeah, so what we set out to do was for brand that we had worked with for for a matter of time here at CTC. were looking at the back half of June, specifically the last 14 days of June. And in order to hit the goal that the business had set, we needed to generate a million dollars in incremental revenue over those 14 days to get to where we wanted to be.[00:03:00] 

that result looked like for the brand was just under two x year, year top line growth. So they did. So they did about a million last year in, in June, and this would be getting close to 2 million in, in top line revenue. So a meaningful, meaningful top line beat on the revenue expectation and a really meaningful chunk of revenue within a 14 day period.

What we are doing along the way is we have daily targets set for 35 plus critical business and marketing metrics. And what we walk through in the series, which is worth revisiting if you haven't been able to track along with it, is how we have built the system that enables the tracking of these daily targets and that leads to.

Action on a day-to-day basis to be able to drive the business outcome. And really what the system is at CTC that we have built, it's all oriented around the belief that the path to profitability starts with clarity. And so we want to give, our [00:04:00] aim is to give the highest level of clarity to brand owners, operators, marketers, decision makers on what the decisions are that need to be made to get to the profitable goals that haven't set for the business.

And so we tracked against that for a number of days looking at different the pacing against different business metrics. We're looking at how we built our system to be able to enable that decision making. And then it all culminated on the 27th of June, the last four days, which was a big marketing moment that the brand had planned for the last four days of the month.

And so looking this looking at that day. We had four days left in the month and we were at 520 5K in order revenue against 

[00:04:45] Richard Gaffin: Mom. 

[00:04:46] Luke Austin: million dollar target over that 14 day period. So we were 10 days in and 520 5K in revenue against a million dollar goal. So there was an outsized revenue expectation that needed to be realized in the last four days of the month to [00:05:00] bridge almost half a million dollars in order revenue to get to that million dollar goal.

And so I think this, this journey has actually been. Is, is a very strong illustration of what the the most effective partnerships on our side look like in terms of the brands that we work with, and what leads to outsized business growth against these, these marketing moments, which is you need the foundation of the business forecast, the marketing plan, the budget allocation.

And manage tightly to it on a day-to-day basis across every channel, across 35 plus critical business and marketing metrics, that has to be there. That's the core engine. 'cause otherwise you don't know what's working, what's not working, and what decisions to make as a result. The management of that is gonna give you a, a high level of clarity, but it's not going to lead to a two x year over year growth sort of outcome.

That is going to come from the engineering of a marketing moment like this brand had created to produce the outside growth that lived on top of the [00:06:00] baseline expectation. Of the clarity of the forecast that we had that was based on historical assumptions. So, the, I I think it's a really fascinating sort of one, two, look at what it takes to grow businesses profitably in this environment and realize this sort of revenue impact within this short of time period as well.

[00:06:18] Richard Gaffin: So just to quickly summarize then, for the first 10 days of this challenge we did about, or this brand did about 500 k in, in order revenue, let's say. And then in the last four days, they did about 700 k or almost eight right, to get to kind of that final 1.28 million number against that 14 day window. So obviously the, the thing, the difference maker, there was a marketing moment that happened in those last four days. So to the extent that we can. Share. Give us a few details about this marketing moment and why there was maybe an expectation that this marketing moment would create the impact that it did.

[00:06:55] Luke Austin: Yes. So what I'll first say is I, I'm going to do a disservice [00:07:00] to the months and months and of planning. Strategy, thought work relationships that it took to build into a marketing moment like this. This, this is really a masterclass and what it looks like to create this level of marketing moment impact.

And and, and this, this brand crush it. They, they really hit it out of the park with this marketing moment. give some high level details because we've shared data 

[00:07:22] Richard Gaffin: Hmm. 

[00:07:22] Luke Austin: we can't we're not gonna go much more deeper on, on the specifics outside of that, but I'll, I'll start by framing it this way, which is, this was a novel approach to a marketing moment in the form of a brand collaboration at the level of brand collab that this brand.

That this brand has not had before in, in history brand collaboration aligned with aligned with product launch novel to that specific brand collaboration, the audience that it was serving and the messaging. So product launch plus brand collab a done in a very [00:08:00] specific and thoughtful way. Now, when we build out the forecast and expectations that we align on.

We are looking at historical data and understanding the impact of each of the marketing moments and marketing actions that that happened over time. And this, this comes in the form of the three core models that we use in our forecasting process. Spend a r model the retention model and the event effect model.

And one of our YouTube short videos. We, we dove into those at, at, at a bit more length. But I'll hone in on the event effect model 'cause what the event effect model does. Is we are able to look at historical marketing moments of every type for every brand, and then to be able to tag and bucket those according to the type of event that they are, to forecast the impact that those events are going to have on new customer acquisition efficiency, and then driving up returning customer revenue expectations as well.[00:09:00] 

we ingest the marketing calendar for the brands that we work with over the past years, and then index hundreds of mar hundreds of marketing moments from the International Women's Day Sale to Black Friday, Saturday, Monday to the seasonal product launch collection for for pre-fall. We look across the board for every marketing moment and then bucket those according to their type promotion, VIP launch event product launch.

Influencer brand collaboration on down the line of each of the type of moments that these, that these have. And what we're able to do in this process is understand for each brand. What sort of expectation we should have against a specific planned marketing moment in the future. So if we have seen a VIP launch or a product launch the this sort of impact from that type of event, historically, then in our planning process, we're taking into account the financial info input cohort models for our customer, key customer cohorts.

But we're also taking into the layer. Marketing calendar [00:10:00] events and those, and the impact of those on financial forecast to bridge the gap between marketing and finance. And what that leads us to is an expectation around, okay, we have a product launch in the form of a brain collaboration plan for this brand at the end of June.

What we have seen in the past from collab and product launches for this specific brand is this level of outcome based on the event effect model. And I can give those specifics. Actually in terms of, in terms of what we see, what we typically see for this brand from on a on a product launch is that a returning customer revenue ratio relative to new customer revenue is about 150% higher than it typically would be.

[00:10:44] Richard Gaffin: Hmm. 

[00:10:45] Luke Austin: when this brand does product launch, the form of brand collaboration, what we've seen in past historical events is. Compared to the baseline of the day surrounding the event, returning customer revenue increased by about, by about 150% relative to the [00:11:00] new customer revenue outcome. What we're, what we also see is that new customer efficiency in the form of a MER and spending power is stronger during these time, during these product launches as well.

What so those two things combined to make it possible for this brand too. In the form of product launch and brand collaboration. See the same level of A MER efficiency at higher levels of spend than they typically would be. So we can drive up 

[00:11:29] Richard Gaffin: Mm-hmm. 

[00:11:29] Luke Austin: spend volume, maintain the level of efficiency, and drive more new customer revenue as a result.

In combination with that, we're able to see higher returning customer revenue relative to the new customer revenue outcome than we typically would see as well. So a way to think about this is. Typically if you see $10,000 a day in returning customer revenue to $10,000 a day of new customer revenue on a day like this, you would see 15 to $16,000 in returning customer revenue re to $10,000 in new customer 

[00:11:56] Richard Gaffin: Mm-hmm. 

[00:11:57] Luke Austin: what we just talked about is new customer revenue's able to scale [00:12:00] up. So returning customer revenue jumped up 'cause of the type of event, and it increased because the new customer revenue volume increased due to the volume increasing over this, over this time period. So.

[00:12:10] Richard Gaffin: Yeah.

[00:12:11] Luke Austin: That is how in the planning process, we get to an expectation around what these events look like and we're able to create an expectation for higher revenue for this brand.

During these last four days of the month

[00:12:23] Richard Gaffin: Mm-hmm.

[00:12:24] Luke Austin: now what we saw was that the brand substantially outperformed that baseline expectation 

[00:12:31] Richard Gaffin: Yeah. 

[00:12:31] Luke Austin: very high degree on a couple of the days specifically, which, which we can talk about. But the brand outperformance, which means. The way that they did this product launch with the specific brand they collaborated with was a novel marketing event that they had never done in the history of the brand before.

That led to us beating the model expectation.

[00:12:52] Richard Gaffin: Mm-hmm.

[00:12:53] Luke Austin: It was a higher caliber brand collab and audience associated with it. The product launch associated with it, there were [00:13:00] multiple SKUs that laddered up into the brand collab. It was very thoughtful. There are multiple tiers of how it was rolled out in terms of a private event, public activation.

Then the ad campaigns going live. this was a novel approach to a product launch brain collab that even though we had a baseline expectation for what that looked like, this was. Well above what that expectation was in terms of how it was conducted. That's what led to the outside outsized growth over the course of this four, four day period. 

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Yeah, so, so what I'm curious about then is, is digging into a couple of ways that the the planning process of you as you've laid it out, in terms of the forecasting piece. Relates to the marketing moment. So, one question would be, it is a little bit of a chicken and egg thing maybe, but to what extent did the forecast and the expectation of revenue let's say like you may build out a forecast at the beginning of the year, you had some understanding that June would maybe have a gap. Does that play a role in them then saying, okay, we need to do a marketing moment at this point, or did the marketing moment come first and then the forecast was built around that?

[00:14:59] Luke Austin: Yeah. [00:15:00] It, it's a great question and, and it happens both ways typically the conversations that we have with with brand owners and decision makers. We start those conversations around what is likely to happen and then what we would like to happen. And there's a gap that exists between those two things to some extent in almost every case.

And the bridge of that gap is what we think about as strategy. Strategy is the bridge 

[00:15:28] Richard Gaffin: Right. 

[00:15:28] Luke Austin: what is likely to happen and what we would like to happen. What is likely to happen is to your point, oriented around here's the contribution we can expect from our returning customer cohort, which is the most predictable.

Here's the ad spend efficiency. And our spending power at different volumes, volume of spend at different points in time throughout the year. And so here's what we can expect if we are maximizing for new top line revenue breakeven or maximizing for contribution margin within month one, whatever the business objective is that we set and we get to a very clear expectation of what is likely to happen [00:16:00] based on those inputs, if everything was to continue.

there's a gap of what we would like to happen. In some cases the gap may not be that large and it, and it may come in the form more of increased creative volume that's gonna help us to increase spend against our spending power and improve that sort of incrementally compared to the historical baseline.

We're gonna add in some net, net new email campaigns and flows that we never had in the history and, and sort of bridge this incremental gap that exists in some cases. The gap is much larger and all the incremental actions we're gonna take are necessary. But they're not going to be able to get us to that goal.

And, and that's a lot of where our, our working perspective comes, is, comes in, is quantifying what the gap is and what sort of lever needs to be pulled to bridge that gap. Is this a. We double our creative volume and increase our spending power by 10%, and we're there, or is this, we need to do a product launch through a brand collaboration at the level that this brand did and generate two x as much top line revenue as we, as we did, compared to the same [00:17:00] time period last year to get to where we want to go.

[00:17:03] Richard Gaffin: Mm-hmm.

[00:17:03] Luke Austin: going back to your question, it, it comes in both ways. In terms of looking at here's the gap that exists, here's what's gonna need to happen to be able to get us there. And then in some cases there are planned events in the future that we factor into the forecast and see what the impact is and then and then see what gap exists from there.

But it, but in every case, there's going to be some scenario of, based on the current things we have planned, what is likely to happen. then a mapping of that to what we would all like to happen, and getting really clear on the gap that exists and the type of actions that needed to take place to bridge that gap based on the size of it.

[00:17:40] Richard Gaffin: Yeah. Okay, so I wanna ask then one more question about, again, the relationship between our forecast and this marketing moment, which is to say. Presumably with the level of planning and the level of care that went into it from the brand side, presumably if they had launched this marketing moment without actually having done any of the [00:18:00] work with us, right, the forecasting, whatever, they still would've say seen monumental success.

It would've been great, whatever. So my, what I'm curious about is to what extent did, even though it's, it's clear that the outsize impact was made by the brand's planning of this marketing moment, what additional impact. Was created or how would this have gone differently if we hadn't been there with, to do the sort of forecasting planning piece to kind of put this system into place?

[00:18:28] Luke Austin: Yeah, well it, it's a great question. And. By, by No, by no means would we the over the course of that month and the bi and the outcome that this business saw, and particularly over the course of those, those marketing moments, days, that that drove a, a large majority of the revenue for the month.

And that was, that was all on on them. What we see in terms of being. The most productive relationships that we have at [00:19:00] CTC in terms of how this dynamic works is our goal is to be able to give this level of clarity on. The business forecast and what needs to happen on a day to day basis in terms of optimizing the spend, managing the media.

And if you look back at the, the short series that we did that's what a lot of the actions look like on a day-to-day basis. Okay. We are underspending, even though our A MER efficiency yesterday was above target. Where do we come under spend? Well, Google brand, we're leaving. $7,000 of revenue just due to lost budget on those campaigns that we could be driving up by, in, by just opening up the, the budget constraint against the existing efficiency cap, and we'll drive it more spent while holding the a MR efficiency and drive the new customer revenue, which is the thing that's pacing behind that.

That is what we see as our key responsibility and contribution in this process is giving clarity on what needs to happen. And then making decisions on a day basis to help free up brands to be able to do this level of high impact work [00:20:00] that they are uniquely positioned to do. They they're closest to the product closest to their, their industry and their and customer profile connections in that way where they're just going to have the biggest impact of creating these moments.

We've talked about this time and time again with. Bear handling at Born Primitive and, and and BG and the team at Skull. Candy, and we can go on down the line, but the, the moments that we see create this sort of impact are where the. Are where we are able to provide this level of clarity and a management against the core growth engine of the business on a day-to-day basis relative to the revenue forecast, the spend, the efficiency, the budget allocation across channels to free up the, the brand team to be able to focus on these higher impact levels while we hold down sort of the core foundation, the day-to-day engine of the business, and then are able to measure the impact of.

Of, of these moments as well, right? Which is, in this case, we were able to see [00:21:00] that this moment the, the impact of it was well worth the investment over the recent months into it because it substantially outperformed any product launch brand collaboration that's happened in the past. And so we're able to quantify and give clarity around what the impact was relative to what the expectation was.

Did it provide the thing we were hoping it did, did it outperform? Did it underperform the expectation? And then also provide clarity on the day-to-day. And manage the core, the core thing, to be able to help the brand owners, operators, decision, decision makers, marketers really put the thought and focus into moments like this that drive outside growth to help beat the model.

[00:21:37] Richard Gaffin: Yeah. Yeah, that's, and, and that's something that's come up in my conversations with, with some of our clients too, which is that, uh, what we provide with the, the forecasting, modeling, the day-to-day management is. We take a lot of the brain power off of your plate or the brain power that needs to be put towards this type of enormous marketing moment can get drained by thinking about the day to day by making sure [00:22:00] evergreen is working, by worrying about whether you're gonna hit your daily revenue target or whatever. And what this system does is takes a lot, takes that essentially off your plate, and then shows you how that is. The big marketing moments get included into kind of the cohesive whole. So, the, so anyway, so if you haven't watched the series already, check it out. It's on YouTube. Has the last episode come out yet, Luke? It has, right. Okay. All right. So go ahead, watch that. Kind of watch how the journey rather watch how Luke goes through this journey and kind of get it an inside scoop into how the day-to-day works here at Combat Collective. Any any last insights for us from this process? For you, Luca?

[00:22:41] Luke Austin: What I'll, what I'll leave us all with is, is this thought, which is we, we believe at CTC, that the path to profitability starts with clarity. that is what we are very focused on in terms of building out our system and our tools and our team to execute at the highest level of clarity to give to give brands that that sort of an operating [00:23:00] system.

But the end result of. Clarity isn't clarity for clarity's sake. The end result of providing the path to the path to clarity is to give us confidence in terms of where to invest dollars that are gonna produce the mo. The highest impact growth path ability starts with clarity. So that we can all have the highest confidence in terms of investment into units of growth, 

[00:23:22] Richard Gaffin: Mm-hmm. 

[00:23:23] Luke Austin: the creative, the email, the channel expansion, and the measurement against it.

And then the larger marketing moments like this that lead to out outside impact against, against each of those things. That is how we see. Our value in terms of the partnerships that we have with brands and where things, where things work out work out. So if, if you aren't experiencing the level of clarity that that gives you the confidence in making marketing investment decisions or being able to, like you're saying, Richard, be able to step, take a step back and focus on these marketing moments, we'd love to partner with you in that, in that.

[00:23:53] Richard Gaffin: That's right. Yep. So I say it every time, but common thread code.com, hit that hire us button, let us know that you want to talk, [00:24:00] that you're interested in this type of service. And we'd love to have a conversation with you. So, anyway, thanks for joining us, Luke. And thanks for everyone listening, and we'll talk to you next time.

See you.