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Nik Sharma

@mrsharma

2 Jan

A common mistake I see amongst brands is they often neglect the investment into building a consistent affiliate revenue channel for their stores.

Affiliate marketing costs (on avg) only 10% of what you gather in revenue, so if you make $100k, you'll likely pay out $10k.

Unlike Facebook/Google ads, affiliate rev all comes in at a fixed cost.

The only time you'd have it differently, at least in eCommerce, is with media partners where you pay them a fixed cost per conversion, and they either make a margin or take a hit to acquire those customers.

Having even 15% of your monthly revenue coming from affiliate marketing, where your "CPA" is 10% of your revenue, can really help to off-set more aggressive paid media channels, like Facebook or Google.

I.e., if your Facebook CPA is $60, your macro CPA could be closer to $35.

Read 4 tweets

Nik Sharma

@mrsharma

21 Jan 20

The keys to a successful DTC launch:

1. A product that launches with pre-launch product-market fit — this leads to low initial customer acquisition costs.

Easy to test too.

Here’s how: create a fake brand, run ads to a landing page, and understand your customer.

2. A marketing budget big enough to support a proper creative budget for paid-media assets.

When you launch with paid media, it has to be mobile-first and video creative.

Anything else and you’re going to pay more for your customers.

3. A movement-building press play among not only trade press, but also mass media outlets, and the right ones too.

I know a new brand doing 6-figures with no paid ads. Their secret sauce is memorable PR and story-telling.

Read 10 tweets

Nik Sharma

@mrsharma

3 Apr 19

Dear Brands, this is how you work with Amazon:

Companies under-estimate the importance of owning their data.

Giving up owned data for quick sales on Amazon kills the long-term potential of a venture-backed, brand-driven commerce company.

Using Amazon isn't a binary decision.

Selling on Amazon brings three main advantages:

1. Instant sales

2. Easy distribution

3. Low investment costs

If your product is good, you can win with the gamification of rankings, feedback, and reviews.

Selling on Amazon has 3 disadvantages:

1. You don’t know who your customer is

2. You can’t build brand equity

3. Your trading proprietary data for easy distribution

Brands give up their data to Amazon, and Amazon lets brands access their commerce and logistics infrastructure.

Read 5 tweets

Nik Sharma

@mrsharma

30 Nov 18

My 2 cents... The future of holding companies will be built around audiences, not industries.

Once you have a paying consumer, you can then up-sell them into different brands, rather than spending $XX per new customer.

@stitchfix

If under the same "umbrella", @stitchfix, @renttherunway, @soulcycle could all be sold to the same audience.

Today, they all spend money, individually, acquiring (likely) the same customers on the same platforms. Bidding against each other ends up increasing CAC's for everyone.

On the brand level, as brands "blow up" and become successful, they will begin to create new digitally native vertical brands (DNVBs) remarketing to the same audience, but with new solutions for that consumer.

Read 6 tweets

Nik Sharma

@mrsharma

12 Jan 18

1/ In the day and age when people want to be talked with vs being talked to, influencers are the new billboards. 👏

👇 Thread 👇

@OldSpice

2/ Traditionally, CPG brands appealed to the average consumer who needed a product (shampoo, soap, shoes, etc.). That’s why they created ad-campaigns around widely-known celebrities, or created their own celebrities.

The @OldSpice Man is my favorite example.

3/ Mass paid and advertising media rewarded celebrities with mass-awareness. The big got bigger and only the largest brands could endure expensive funnel inefficiencies. 📈

Heritage brands capitalized on this with their multi-billion dollar branding budgets. 💰

Read 25 tweets

Nik Sharma

@mrsharma

5 Jan 18

1/ Let’s start with something controversial: Brand marketers are throwing away cash. 💵 Only performance marketers bring direct return-on-investment (ROI) to a company 📈.

2/ The modern advertising industry was built around mass media. 📺🗞📬

Advertising on television was annoying & inefficient. This helped big brands who monopolized key marketing channels and retail distribution.

Only big brands could survive expensive funnel inefficiencies.

3/ Big brands dominated every mass media format.

👉 Jingles on television 🎶
👉 Slogans on billboards 🖼
👉 One liners on the radio 📻

Read 25 tweets

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