Case: Turning €500 in to €37 439,37 profit in 2 months

Background

We were seeing a trend of customers visiting products multiple times throughout prolonged periods of time without purchasing. That’s not to be unexpected when consumers' purchasing power is strained with the cost of living rising across the world. This was however beginning to take its toll as we simply saw a decrease in people ready to spend hundreds or thousands of Euros on a watch.

However just because the purchasing power of our customers was strained didn’t necessarily mean that demand wasn’t there, it just meant that customers were thinking it over, planning, and saving instead of impulse buying. Some of these customers would make their purchase eventually, while others wouldn’t.

Our goal and plan was to capture these prospects’ email addresses, nurture them, maintain the relationship, and help the customer make informed decisions to remove any hesitation and uncertainty surrounding the products and brand.

Most brands face this challenge and take to somewhat questionable tactics to grow the list by aiming to get as many sign-ups as possible. Some companies entice sign-ups with discount codes which eat into profit margins whilst others use viral challenges which can bloat the list with unengaged leads who are more interested in the prize itself rather than the brand.

To avoid this and still generate lots of subscribers, we needed a consistent, cheap, scalable, and profitable way of growing the email list. Scandinavia Luxury Group has a vast range of brands and models with vastly varying profit margins, so giving away discount codes wasn’t feasible or possible. Another factor to take into consideration was the risk of customers who were going to make their purchase anyway opting in using the discount code. We needed to increase sales, not give away margin.

Because of this, we decided that a monthly competition would be the best way to achieve this.

Targeting and Prize

One risk of running a giveaway is that your list can quickly become populated by leads who are interested in the prize but not interested in the brand itself whatsoever. This typically happens when there is a disconnect between the brand and the prize for example if a pet store would giveaway movie tickets.

To avoid this, we stayed away from advertising to cold traffic and we also refrained from giving away specific products. We didn’t want people to see an opportunity to win a free watch, enter the competition and then forget all about the brand.

Instead, we utilised Klaviyo’s pop-ups to display the competition to customers who had been on the site for over 45 seconds and also to display on exit intent. The reasoning behind this is to gather customers who are at least somewhat exploring the opportunity of buying a new watch. At the end of the day, we were looking for marketing-qualified leads and not just a horde of random email addresses.

The prize was €500 in store credit that could either be used as a gift card in the future or retroactively to get a rebate on a previous purchase. This is important because previous competitions where we have collected thousands of customers have failed with not a single purchase due to customers waiting to see if they would win the competition before making their purchase.

We needed to remove that incentive.

Once joining the competition

Collecting the email address isn’t enough and the strategy would fail without a proper follow-up plan. Once again, the goal of the strategy isn’t to collect email addresses, it was to increase sales by collecting email addresses.

New subscribers received a pretty standard welcome flow series that reiterated the rules of the competition, welcomed them to the brand, and explained why Scandinavian Luxury Group is the biggest player in the Scandinavian online watches space.

Parallel to this we had already built an extensive infrastructure of flows.

• Active on-site
  Triggered when customers visit the store. They receive an email series where one of the messages lets the customer know who to turn to if they have any questions and a second email that explains how Scandinavia Luxury Group goes above and beyond to help their customers.
  
  
• Browse Abandonment
  Triggered when customers look at products. The messaging contains social proof and more information about the specific products.
  
  
• Added to cart
  Triggered when customers add products to their basket. The messaging contains elements of social proof and we tackle any objections a customer may have before placing their order. We also reminded the customer that they had a chance to retroactively get a €500 rebate off their purchase if they won the competition.
  
  
• Abandoned Cart
  Triggered when a customer starts the checkout process. Fairly standard e-commerce automation flow. Once again, the customer was reminded about the chance of winning the prize.
  
  
• Post Purchase
  Once placing their order, we confirmed the order and sent a sequence of emails reinforcing the customer's decision and how customers are taken care of.

Other flows and automations were supporting this core infrastructure too.

We also sent newsletter campaigns three times a week about the outlet page. Like a lot of companies, Scandinavia Luxury Group had a lot of products that needed moving and we felt like it was a perfect opportunity to promote them.

We cast a wide net by sending very broad newsletters showcasing the different brands, models, and categories.

Once interacting with the campaigns, the customers received much more tailored and unique follow-up messaging via the automation.

This meant that customers who didn’t engage with our content were left alone whilst hyper-engaged customers received much more frequent content.

Result

During June and July, we accumulated 5034 new sign-ups for no additional marketing spend. 

These 5034 sign-ups have since generated a gross profit of €37 439,37 (Sales minus cost of goods, shipping, processing fees, etc).

The only additional cost for Scandinavia Luxury Group was the €500 prize resulting in a 7388% return on investment.

Most importantly, we will be able to scale, repeat this and let it run in the background as the infrastructure has been built.