Week 3: Mastering Foundational & Performance Marketing for eCommerce ✨📈
Your DTC Marketing 101 Cheat Sheet
After Week 1: Branding & Week 2: Community, we’re back for Week 3 to talk on all things Marketing. In the eComm world today, there are two ways to think of marketing: Foundational and Performance. Let’s review both, beginning with Foundational.
Part I: Foundational Marketing
‘Foundational marketing’ can best be described as mastering the fundamentals of modern eCommerce marketing. Before you run, you have to walk, and before you excel at anything in life, you have to deeply understand the basics.
This is important to think about when attempting to tackle Performance Marketing, which we’ll touch on later. It’s complex, advanced, and can seem daunting. So before you dive into that world, let’s make sure you are mastering the basics first.
Let’s start this week with six foundational marketing tips by Joanna Galbraith, Co-founder of Letterfolk. She and her husband, Johnny Galbraith, bootstrapped their company to be a profitable, multi-million dollar business with hundreds of thousands of devoted followers — and also happen to be the most recent brand to officially join the Pattern family. Joanna shares her foundational marketing guideline below:
Joanna Galbraith’s 6 Steps to Foundational Marketing Success
- Be Consistent
- Find Your Brand Voice
- Offer Value to Your Audience
- Create Shareable Content
- Adapt as the Platform Changes
- Engage and Partner with Like-Minded Brands & Creators
‘It sounds simple, but consistent content has always been key for us. Yes, the content should be quality, but it should also show up regularly enough that it becomes a routine part of your audience’s content consumption — something they’re used to and expecting to see daily.’
We like to say ‘Progress over Perfection’ at Pattern. Joanna expounds on that here; noting that while high-quality is important, you don’t want to get so caught up in the details you forget to communicate regularly with your audience. ‘Out of sight, out of mind’ is something to be aware of when marketing to your audience today.
If you can routinely find ways to engage with your brand’s fans and followers, you will be rewarded with better customer metrics. This is important because almost all marketing platform algorithms prioritize highly-engaged content to current, and potential future, audience members.
Find your Brand Voice
‘From day 1, we wanted our community to know what to expect from us and then become familiar with who we are over time. For our brand, this has meant relatability — like a friend speaking to a friend. Find the voice that fits your brand and stick to it.’
Similar to what we discussed in Week 1: Branding, remember to try and not speak as a ‘business.’ You want to have a personable, relatable brand voice when communicating with your audience. That’s a foundational pillar for good marketing.
Offer Value to Your Audience
‘We always try to ask ourselves how our content is of value to those viewing it. It can offer inspiration, entertainment, know-how, etc., but it needs to be of value in some way (not just selling something) if you want to organically maintain and grow your audience.’
At Gin Lane, we would test how a brand sounded through what we called the ‘cocktail conversation test.’ 🍸
If you were a brand at a mixer and were introduced to a circle of people listening, would you be able to add value to the conversation and move it forward in an interesting way, or would your sentences feel out of place and fall flat?
It’s important to think through the eyes of your customers when asking yourself, ‘Am I bringing value to the conversation?’
Create Shareable Content
‘This is easier said than done, but we try to regularly create content that’s compelling enough for our community to share with friends and family — such as sending a Story or Reel or tagging a friend in comments. Do this regularly, and organic growth will follow.’
As an experienced marketer, Joanna is constantly taking a temperature check on her environment. People want to *engage* with brands they love, not just follow along. As we talked on in Week 2, inviting your community to participate and share is a social form of word-of-mouth; it allows your community to spread the gospel the most effective way ever — within trusted groups of close individuals.
Adapt as the Platform Changes
‘When we first launched on Instagram, posting photos was the extent of the content. Now there are Stories, Reels, Live, IGTV, Shopping, etc. Social media is always evolving, and it’s essential to evolve with it in order to stay relevant and continue on a growth trajectory.’
A former Gin Lane alumni, Gregory Passuntino, once described creating on the internet as painting on a digital ‘wet canvas.’ He meant that the ‘paint’ never dries online; you can, and you have to, constantly add to your canvas.
For brand marketing, this means accepting, and embracing the only constant is a constant state of change. Have fun with this, and you will be rewarded.
Engage and Partner With Like-Minded Brands and Creators
‘From giveaways to collaborations, we wouldn’t be where we are today without shout-outs from other brands and content creators. Engaging with others’ content and forming genuine relationships on the platform goes a long way.’
At Pattern, we call this ‘social validation’ — when someone online does the talking for you. Whether a review, a testimonial, a comment, or even a whitelisted ad, it’s influential for today’s customers to see real people putting their names, handles, faces, and reputations behind a product. When people hear, see, or read numerous people they trust validating your product or service, you are going to get a new customer.
Part II: Performance Marketing
Up there with supply chain management, one of the most challenging parts of running a growing and sustainable eComm business today is performance marketing.
Working within the technology sector can often be a double edged sword; on the one hand, you can be part of an extremely innovative sector, and if you excel within it, you can reap the benefits. On the other, technology changes so fast that what worked yesterday may not work tomorrow.
Performance marketing is an area where this acutely applies.
Adapting to Today’s DTC Ad Duopoly
Around a decade ago, the first crop of DTC brands came of age alongside Facebook and Google’s ad duopoly. It was a symbiotic relationship whereby brands were able to cost-effectively reach customers over the internet who they wouldn’t have dreamed of reaching with only a website a few years earlier. However, as brands excelled, others noticed, and the market crowded — fast. Today, only a few years later (but a generation in internet time), costs are high, the algorithm’s are complex, and the landscape is extremely volatile.
This has meant that today there is a return to brand fundamentals, first.
One of today’s best digital marketers, Nik Sharma, founder of Sharma Brands, explains, “The ability to just turn ads on doesn’t exist anymore. Today you need to build a foundation organically, then slowly transition into paid. Then take your existing marketing and use media dollars to expand it.”
“Consumers have adapted,” Nik continues. “You can’t just flip a switch and effectively acquire customers. The moments have to be there. The story has to be there in every detail, down to the icons, and gifs. It’s really hard to make any of the other pieces work without first building that foundation organically. Consumers want a real emotional tie; they require you to have a reason to exist in the first place.”
What Nik is highlighting plays into Joanna’s foundational marketing thesis: You have to build a living, breathing, functioning brand that pays attention to its audience, has a consistent voice, offers value, and has original content that can be scaled and then shared. A lot of foundational work today has to be done before you can turn on performance marketing.
In regard to the complexities of today’s landscape, we asked Ilanna Fricks, our Senior Growth Manager at Pattern to drill down into the contemporary challenges of Performance Marketing. How do you manage and spend your brand’s hard-earned money on the duopoly we mentioned earlier; Facebook and Google? Let’s listen to what Fricks has to say for both:
Facebook is driven by 2 main things — Creative and Targeting.
Creative is the highest impact, with targeting being secondary. One of the most important things for successful campaigns is to have frequent creative testing, and ads that very clearly explain the value prop of the product to a consumer.
Having a variety of creative is also important, so you can reach different demographics. Video is the biggest driver of performance and user generated content is becoming increasingly important.
When we run tests for new acquisitions we set up a test based on how many conversions we need to drive to get a clear read, rather than a budget amount.
For targeting — there are a few levels to targeting. The broadest way to look at it, which is fundamentally important, is where different people are at in the consideration funnel.
This is how you advertise for potential customers who haven’t purchased and may not know about the brand.
We nuance our advertisements for re-targeting which is aimed at potential customers who have been to our site but haven’t purchased.
This is for customers who have already purchased that we are targeting to purchase again.
At one more level of granularity, we target different segments of people within these groups. Since we’re an earlier business, prospecting is the area we can do the most audience testing.
For prospecting audiences, since iOS14, interest audiences are becoming one of the more effective types of audiences.
We aim to test at least 3–5 new audiences per month, in interest areas that are adjacent to our customer demographic (for example, targeting people interested in DIY or parenting interests for Letterfolk).
Key Performance Marketing Terms
These are terms that are helpful to know and understand for Performance Marketing:
ROAS (Return on Ad Spend)
The amount of revenue you are driving with every dollar spent. A 1.0 ROAS means you are making $1 for every $1 you are spending.
MER (Marketing Efficiency Ratio)
This includes all revenue, and measures a more wholistic picture since not every revenue dollar influenced by marketing will actually be tracked back to the marketing platform.
This is revenue attributed to ads, whereas MER is total DTC business revenue divided by ad spend.
The rate of people who click on your ad that see it. This we use as a metric to often measure the effectiveness of creative.
CVR (Conversion Rate)
This is the rate of people who purchase an ad that have clicked. This can measure a few things, including the quality of the audience, strength of intent to purchase (i.e. a good price or promotion will have a higher CVR), and ad creative to landing page experience (an ad creative that aligns with the landing page it leads to will have a higher CVR).
CPM (Cost Per thousand iMpressions)
We use this to track delivery costs. i.e. in Q4, as competition increases CPMs skyrocket, meaning we need to be extra competitive with CTRs and CVRs to hit our goals.
For Google, We asked Ilanna Fricks to talk on two examples of spend being used at GIR, one of Pattern’s brands.
Fricks explains, ‘For GA (Google Ads) we typically focus the majority of our budget on shopping ads (the screenshot on the left) as this acts as a good way to find new customers searching for your general product and drive incremental revenue.
We always want to have a presence on branded search (screenshot on the right) so that customers can find us when they’re searching, and don’t go to a competitors site instead. However, our branded search efforts have a relatively small dollar investment and very high ROI as we’re capturing demand, not driving demand.’
‘One big impact on the DTC world,’ Ilanna says, ‘is the increase of data security and transition away from cookies, changing how we are able to collect data on customers, target potential customers, and measure success of our campaigns.’
Since knowing your customer is a key to success for DTC businesses, limitations on second and third party data make first and zero party data increasingly important. With this, we must also rethink how we are targeting our customers, improving our collection of first party data and diversifying our targeting strategies away from relying on second party data.
Internal Weaves & Understanding Your Customer First
Just as important as collecting consumer insights in how your teams (whether internal or contractor/agencies) work together to share their information.
Daniel Batten, the Associate Creative Director & Co-Head of Design at Pattern talks on this. ‘Having good, open lines of communication between both team leads, and team members always increases the quality of the output.’
‘It’s a conversation, not a reading exercise! From an execution perspective, being able to look at the consumer data to help inform creative/content decisions and output is key.’
He continues, ‘The more you can understand how the consumer is interacting (or desiring to interact) with your product, the more you will excel in the marketing/creative relationship. Data is one of the most important design inputs you can have, and being able to confidently utilize it to inform your work is a powerful tool!’
‘On the tracking side, we’ve had to be dynamic with how we measure our campaigns, using multiple data sources while having a higher threshold for performance fluctuations, knowing that conversion tracking is now less accurate. Previously we could rely on Facebook, but now we have to get more creative and find people based on information they give out voluntarily.’
In Conclusion: Slow & Steady Wins the Race
As Joanna said, we must adapt as the platforms change, and the only constant is that they are going to constantly change. One of the biggest challenges in being a digital-first brand today is acquiring your customers. You can’t just magically make that happen anymore. As Sharma said, ‘Consumers want a real emotional tie; they require you to have a reason to exist in the first place.’
To recap, find what resonates organically, and from there you can slowly start testing performance marketing.
Take your time. Test, iterate, and be patient.
That is how many of today’s best small to midsize eComm businesses are profitably scaling.
Make sure to check out our prior installments:
Week 1: Why Great Brands Make Great Businesses
Week 2: The Power of Community & Why Great Brands Have It
If you are interested in learning more about your business joining Pattern, we’d love to hear from you! 👋