Client Overview
This client, a niche e-commerce business in the sports industry, was heavily reliant on repeat customers, but their gross and net profit margins were shrinking. They struggled to attract new customers and diversify their customer base, leading to stagnation and a declining customer lifetime value.
The Challenge
When the client came to us, they were experiencing the following issues:
- New Customer Acquisition: Their campaigns were attracting no new customers, despite having a decent budget. With limited new customer growth over the last quarter, the business was overly dependent on repeat buyers.
- Customer Lifetime Value (CLV): Their CLV remained flat, with no increase over the quarter, leading to diminished profitability and little room for growth.
Our Strategy
To address these issues, we implemented the following strategies:
- Targeting New Audiences: We restructured the campaigns to specifically target potential first-time buyers using Performance Max campaigns and enhanced audience segmentation.
- Budget Reallocation: We redirected the client’s budget from underperforming campaigns to those more likely to reach new customers, focusing on expanding their audience.
- Creative and Ad Copy Optimisation: We refreshed the ad copy and creatives to better appeal to new audiences while maintaining relevance for existing customers.
The Results
Within three months of executing this strategy, the client saw the following improvements:
- New Customer Growth: The client experienced a 95% increase in new customer acquisitions. This significant growth helped diversify their customer base, reducing reliance on repeat buyers.
- Customer Lifetime Value (CLV): With better-targeted campaigns and improved ad performance, the CLV increased by 53%, creating more profitable long-term relationships with new and existing customers.
- Gross Profit: As a result of attracting more customers and increasing the CLV, the client saw a 76% increase in gross profit, providing the financial cushion needed to reinvest in marketing and further scale their business.
This turnaround demonstrates the impact of precise campaign management and continuous optimisation in driving sustainable business growth.
