Solved: High customer acquisition cost on dog treat subscription box

Hi there,

Thanks for reaching out. I'm happy to give you some initial thoughts and guidance on your B2C subscription box for organic dog treats and the high customer acquisition cost (CAC) you're experiencing with Facebook ads.

It sounds like you're doing some things right by targeting dog owners with specific breeds, but $80 per customer is indeed very high. Let's look at some areas where you can potentially improve your strategy and bring down that CAC.

We'll need to look at the complete funnel...

First off, it's worth examining your entire marketing funnel. It's easy to assume it's just the ads that are the problem, but a funnel's got many stages that are important to conversion rates. Let's say you manage to get someone to click the ad. Are you sure the landing page is doing it's job and converting? Is it easy to navigate, visually appealing, and clearly communicates the value proposition of your organic dog treats? Ensure there's a clear call to action, such as signing up for the subscription box, with a compelling offer.

I'd say you need a very strong offer. A free trial can work really well, or maybe a significant discount on the first box. Make it a really 'no-brainer' offer to attract those initial customers, then win them over with the treats and service. One thing is for sure, you'll need good copy. We work with a fantastic copywriter, it could be money well spent if it is something you think you are struggling with.

Consider also the overall user experience. Is the website easy to navigate? Are the product descriptions clear and enticing? Ensure your website is mobile-friendly, as many users will be browsing on their smartphones. High-quality product photography can also make a big difference. People eat with their eyes, and that goes for dogs too!

I'd say you should really look at ad targeting...

While targeting dog owners with specific breeds is a good starting point, it might not be precise enough. I'd say to test lookalike audiences based on your existing website visitors or email list (if you have one). Facebook can then find users who share similar characteristics to your current customers, which will likely lead to higher conversion rates. Alternatively, try broadening your audience, but tailor your ad creative to resonate with specific dog breeds. Showing images of happy dogs enjoying your treats can be a powerful way to capture their owner's attention.

We saw an increase in customer retention and therefore LTV by sending a discount code when asking for a customer review. If you are, for instance, targeting labradors, maybe mention something about how much labradors love a specific ingredient in your treats. Think of really customising the campaigns, so they are highly relevant to the audience. Think about the messaging, but think about the images and videos too.

Also think about retargeting - if you've got good engagement on your website, you've really got something to work with. Showing retargeting ads to people that visited the website but didn't purchase is a good way to get them over the line and make a purchase!

You probably should consider ad creative...

It's definitely worth thinking about what type of creative you use. One SaaS client had great success with UGC content of users showcasing how the software worked. This might not be relevant for your dog treat subscription box, but perhaps you could get some happy customers to post about your product on social media, so you can then use this for your advertising. User generated content can build trust, and also is great for creative as you get lots of angles to test from. This goes to say - the more creative you have to test, the better!

You'll need onboarding nailed...

Don't forget, great advertising is only half the battle. Once the dog owner signs up, what happens next? Is the onboarding process smooth and easy to understand? Are you communicating the benefits of organic dog treats effectively? Consider sending a welcome email with helpful information about the treats and how to best introduce them to their furry friend. This goes back to customer lifetime value. If you retain customers for longer, this means your customer acquisition cost is less important.

Also, what's your cancellation policy? Is it super easy to cancel? It might be a good idea to have more friction when it comes to the cancellation policy, as people will have to consciously make the effort to cancel. This could be something as simple as them having to contact customer support. When they contact customer support, you can then try and persuade them not to cancel, or offer them a discount or promotion to stay.

I've detailed my main recommendations for you below:

Implementing these changes should hopefully bring down your CAC and improve the overall profitability of your subscription box. It might take some time to test and optimise different strategies, so be patient and persistent.

Of course, achieving real success isn't always easy. There are lots of things to think about. You might want to think about working with an expert in paid social media advertising, or paid advertising in general. This means that you can focus on other areas of your business while someone else focuses on getting you the success you want.

If you'd like to discuss your specific situation in more detail and explore how our agency can help you achieve your goals, feel free to book in a free consultation. We can get on a call and discuss this in more detail, and provide you with some clear advice on what to do next. We have a proven track record of helping businesses like yours reduce their CAC and increase their customer lifetime value. Some of our past case studies include:

• 1000% Return On Ad Spend
• 633% return, 190 % increase in revenue
• Store launch - 1500 leads at $0.29/leads

Good luck with your dog treat subscription box!

Regards,

Team @ Lukas Holschuh