Thread by @WilsonGHung

One of the most important metrics in 2019 for DNVBs will be increasing LTV/CAC. Brands able to achieve this will outbid competitors, and continue to scale despite rising ad-costs

- If you prefer blog form + more detail blog.rechargepayments.com/current-trends…

- If you prefer a summary, read 👇

1.0 - Lower CACs by building your own inventory instead of bidding on it. "In the future – brands will begin, not by immediately selling products but by curating an audience first." - @web.

Be careful of the paid marketing addiction andrewchen.co/paid-marketing…

1.1 - Marketing channels come and go (e.g. website ad banners). As one tactic is adopted by the masses, the effectiveness ultimately declines. By the time brands realize their channels are no longer profitable, it’s already too late. Do you have resources allocated for "R&D"?

1.2 - Examples of brands that are able to diversify to non-paid channels:
- Dr. Axe's investment into content marketing & seo
- @moiz & @native_cos creating a SKU specific for referrals/virality
- build distribution into your product on day 1 --> @mduboe

https://twitter.com/mduboe/status/1082515214241656832

2.0 - Brands that are able to figure out how to leverage a natural use case for tying in a "subscription". Subscribers typically have much higher purchase frequencies, and bake in a level of predictability which enables a "pay back period CAC strategy" to afford rising ad costs

3.0 - Brands typically under-invest into their operations function until CACs rise to the point where the COGS margin structure is the bottleneck. By reducing COGS, it enables higher allowable CACs. When was the last time you negotiated on your merchant fees or audited your 3PL?

3.1 - What does your retention strategy consist of? Is it just email marketing? Or worst, just paid re-marketing (hope you have this modelled in)? Remember there are many input levers to improve overall repurchase rates. Example: blog.rechargepayments.com/why-investing-…

3.2 - Our mentor @babakazad has great advice on this. If you were to plot your AOV of subscribers over each "charge cycle". Is it increasing?

If not, try upselling to your most loyal customer segment (subscribers). Check out getarpu.com (disclaimer: my app)

4.0 - Do you outsource your core competencies to agencies? Or are you able to build an internal growth engine to:
A) bring in paid/non-paid visitors to your website efficiently
B) optimize for RPV & Sub-Optins
C) maintain key learnings in-house via support functions

4.1 - “In the early stages of a business, it’s natural to have less specialization. One structure is to have a traffic team and a monetization/LTV team. The former focus driving visits. The latter on RPV & retention." - @babakazad

5.0 - Brands with an accurate & robust data infrastructure can outbid competitors because they have a more accurate understanding of their allowable CAC.

5.1 - Once you're able to understand your LTV & cumulative revenues (day 0, 30, 60, etc)... you're able to assign a different allowable CAC depending on your allowable pay-back-period. Just make sure you set "guardrails" to ensure your predicted future revenues are accurate

Read the entire comprehensive overview at blog.rechargepayments.com/current-trends…

- My plug: increase LTV via upcoming orders with my app getarpu.com
- This stuff isn't easy. Learn from the source, follow: @babakazad @bbalfour @andrewchen @mrsharma @david_perell @2PMinc