UK Based Protein Water Brand

UK-Based Protein Water Brand

CASE STUDY

A data-driven approach to scaling a UK-based protein water brand

In this case study, we will discuss the importance of utilizing key metrics like Return on Advertising Spend (RoAS) and LifeTime Value (LTV) to develop a successful, data-driven scaling plan.

We will examine a UK-based protein water brand as an example to demonstrate the impact of these metrics on growth and scaling opportunities.

The challenge

The brand is a startup that has doubled in size each year since its inception in 2019. We started a collaboration with them in late 2022, in order to help them grow with paid advertising and marketing strategy.

Given the tight profit margins of the products (around 50% gross margins on a £25 AOV) the challenge was to create a scaling plan based on RoAS and LTV that would help the business grow further without leaving revenue on the table.

Strategy

Metrics Analysis: We analyzed the brand’s performance metrics, including RoAS and LTV. After we took over the accounts, the new customer RoAS averaged 4.4x in late 2022. At the same time, the overall RoAS, including sales from returning customers, reached 8x.
Blended Customer Acquisition Cost (CAC) & LTV: We considered the blended CAC (£5) and LTV (£37 after 3 months, £49 after 12 months) to determine the true cost and value of acquiring customers.
Marketing Efficiency Ratio (MER): Instead of focusing solely on RoAS, we shifted our focus to the overall MER (total revenue divided by total ad spend) to include LTV in our growth strategy. This gave us a better understanding of what type of results we would have been able to achieve taking into account the average customer journey from the first ad impression, to 12 months after the first purchase.

Results

By focusing on LTV and MER, we were able to create a data-driven approach to scaling the protein water brand. This approach allowed for more room to scale and increase volumes without being limited by the first-time RoAS.

Key Takeaways

RoAS & LTV: Understanding and considering RoAS and LTV are crucial for scaling a business. Most paid traffic campaigns focus on RoAS (acquisition), but incorporating LTV can help create better scaling opportunities.
Data-Driven Approach: A data-driven approach to scaling relies on real numbers rather than assumptions, enabling more informed decision-making and better results.
MER: Shifting focus to MER, which includes sales from returning customers and LTV, can lead to more effective scaling strategies.

Results

Utilizing a data-driven approach that considers RoAS, LTV, and MER can help businesses scale more effectively and avoid leaving potential revenue on the table.

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