# I Studied Every $100M Ecommerce Offer So You Don't Have To

Channel: Max Sturtevant
Video: https://www.youtube.com/watch?v=SjSkuT5BtTA
Duration: 22 min
Language: English
Words: 5255
Transcript page: https://viewrankai.com/tools/youtube-transcript/SjSkuT5BtTA

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[0:00] How is it that two brands can sell the exact same product, but one hits nine figures and the other stays at seven figures forever? Not the team, it's not the ads, it's definitely not the product. It is the offer. Multi-nine figure brands like AG1, Grunt and True Classic have figured out the art of the offer. This is what separates the true winners like that, as well as some of the other brands that I've been able to play a part in their growth. I've watched the same pattern across every single category from subscriptions to

[0:23] apparel, accessories, CPG, everything. And I've been a part of several brands who have gone from the eight-figure mark to the nine-figure mark seeing everything play out. So, in this video I'm going to be breaking down the three offer types that have helped these brands scale to nine figures. I'll walk you through the brands that are running each one and then how it can fit inside of your business. See, most brands are

[0:39] thinking about offers wrong entirely. They'll do something like slap on a regular 10% off offer and leave it at that. Maybe they'll always have a 20% off sort of seasonal sale always on their website or just give a discount for somebody's email. But, that's not what the fastest scaling brands are doing. They're actually putting real strategic thought and add money behind testing the offer making it the forefront of their business. They test it religiously because they know that if you can make an offer that just hits a different psychological nerve with the customer, that will get them to buy more than any other creative can. Just like

[1:09] Alex Hormozi says, the offer is everything. Make an offer that people feel stupid saying no to. A lot of you might be thinking, "Okay, perfect. Let's throw up 50% off or 90% off and that'll get you sales." It probably will, but it's not going to last you very long. A lot of other people out there are just going to test different discount percentages like 10% off, 20% off or 30% off. That's not offer testing. That is discount testing. And that is the biggest reason why brands don't break through the ceiling. An offer is not necessarily a discount. A discount is percent off. An offer is a series of

[1:38] benefits and advantages [clears throat] that a customer gets from buying with you. And so, the real lift and task comes from testing different offers, not discount depths. There are three core offers that I want to go over today. Now, this blew my mind once when I saw this with a client who was around the seven-figure mark and they wanted to get

[1:56] to eight figures as fast as possible. All they were doing was they were just running a plain discount on their product. They're CPG brand, and they were just doing, "Hey, get an extra 20% off if you subscribe to our product." That was boring, and that does not grab your attention. In the days of people scrolling meta, and their discounts being thrown everywhere, you need to have an offer that actually grabs people's attention. That's what this brand did. If you subscribed to their product, here's what you got. You got $10 off, you got three free gifts, and you got a $20 gift card of future credit that you can use at that store. With all

[2:28] the gift value, it essentially made the product free, and instantly their CAC dropped, and they were able to scale like crazy. And the fact that it was subscription means that they got higher repeat order rates, so their LTV drove considerably. This brand is now one of the fastest growing in the space, and they are multi-eight figures. So, let's break down the first offer type, which

[2:46] is the front-loaded subscription offer. So, you may have seen that a lot of the fastest growing brands like Mars Men, I Am 8, Rhone, and AG1 are all subscription brands, and they really try to get you to subscribe on that first order. Why do you want people to subscribe? Well, subscribers repeat order at a much higher rate. This is our custom analytics platform, and we're looking at cohort LTVs of people who are subscribers or non-subscribers. If somebody is a subscriber, their month six LTV right here is around $226 on average. But, if we switch to people who did not do subscription, on average, they're worth $138 just at month six

[3:19] alone. That's why getting people to subscribe on their first order is so important, and that's why these brands create better offers around subscription. And that does not mean 10% off. It means building an actual offer, discount, bundle, value. And all that goes away if you try to one-time purchase. The best example of this right now is I Am 8, who has been scaling like crazy. Take a look at this offer that you get if you subscribe to their product. It's $91 every single month for this 90-day supply. You get exclusive access to a 90-day I Am 8 transformation program, which is right here, which is a

[3:51] quarterly sort of complete mastermind with some of the biggest health experts in the space. You get a free welcome kit, which you can see right here, 100 euros in value. Look at all the stuff right here that the customer sees. You get absolute maximum savings, so it's $91 compared to a $130 if you did a one-time order. And you get this 90-day money-back guarantee, and again, you're reminded of all these discounts. That is a banger offer. It is 30% off. So,

[4:14] they're really incentivizing 90-day. Whereas 30-day is 20% off right here. You still get some similar stuff. You get a welcome kit of 81 euros in value, but you don't get access to this other sort of stuff. That is an offer. You think that is going to convince people to buy compared to this? No offense, but just a regular subscribe and save 15% off. This does not grab anybody's attention. They're relying just on the product. Whereas this will get people to convert no matter the product because of the value that's been stacked in. So, how are they able to economically make this work? They just jack up their

[4:43] prices, and then you stack up the value. AG1 follows the similar playbook right here with subscription first. You can see just how low the buy once is, and it's $99 compared to if you do the one month, you get all these free gifts, $43 value right here, and you get 20% off. Whereas three months, you get even more, $72 in value right here. They're taking items that are low cost for them to produce, things that help the customer experience, and bundling it all into one and stacking the value, and making it only available on subscription. Whereas if you do a one-time order, you have to pay much more, and you don't get any of

[5:16] this fun welcome kit. That's an offer that gets you to convert to subscription. So, if you are a subscription brand, here's exactly what I recommend you do. First, we want to front-load our discount offer. Instead of doing a regular subscribe and save 15% on every single order, we want to front-load the discount. Because getting 15% off on every order does not incentivize me to subscribe on my first order. People who do one-time, only like 10% of people who place a one-time order actually come back and subscribe. So, we want to push it on the first order. So, we want to front-load that first order to really incentivize that first order

[5:48] place subscription. So, instead, what we would do is increase the discount on the first order and then decrease the recurring. Aura does this really aggressively, where it's 30% off your first order to get you to subscribe, then it's only 5% recurring. A massive front-loaded discount just like this. In the case of this, what I would recommend this brand does is I would do 25% off the first month and lead with, "Hey, subscribe and save 25%." And then down here we say, "But it's 10% recurring on every order." Cuz at that point, we already got them. And now we're going to

[6:16] save on our margins in the long term. So, it's actually probably going to make us more net margin because we're saving on recurring orders. So, that's the first step is give something juicy on the initial order, just like these brands right here do. Step two is adding in strategic free gifts. We need to make sure these are strategic and things that actually contribute to the customer

[6:34] experience. We do not want a tote bag. Otherwise, this is pointless and the customer doesn't really care about it. And this is an excellent opportunity to actually contribute to the customer experience, and this is going to help our long-term retention. For example, Everyday Dose, they're a coffee brand. And they add as free gifts, they add a creamer right here that helps with the customer experience. They add an electric frother, which the customer probably would have to buy on themselves. And if a customer doesn't use a frother, their coffee is not going to be nearly as good because it's going to be clumpy. So, they add this, then

[7:02] also a gunmetal spoon instead of like a plastic one, just something that feels special. And this breathwork app as an added bonus. This contributes to the customer experience, it's going to help the consumption in getting people to actually use the product and make it something fun and exciting. Not only that, it adds value because you have $20 in value here, $65 in value here, $10 here, and $20 here. Do not offer stupid free gifts. Make them actually

[7:23] contribute to the customer experience. So, taking it a step further with subscription, there are really like four types of subscription offers that you can do. Some of them more effective for others, and it's going to depend on your brand and what [clears throat] is perfect for you. So, you have the basic recurring discount, like a simple 10 to 20% off every purchase, just like New Chapter here, it's just subscribe and save 15% and Bloom right here subscribe and save 10%. There's no sort of

[7:45] front-loading the discount or anything. No free gifts, nothing. And then we have a step up is the heavy front-loaded discount just like Armra right here which I showed before. 30% off first order 5% recurring. This is much more enticing and a much better offer to get people to subscribe. Same thing as Groom's right here. But the best and most effective offer here is the welcome kit giving a discount on recurring orders and then also adding these free gifts. This is what the banger offer is and this is why these brands have been able to scale so heavily. Test these offer types, test these price points, test the free gifts, and see what works

[8:16] the best. Now these brands have one-time purchase, but the last one you could do is don't offer one-time purchase and it's just hey, you have to subscribe. Those are really the four different ways that you could run these offers as a subscription brand, but the real banger offers come in this welcome kit with stacked value making you feel stupid if you say no. Real quick, this is a client of ours where we're showing some of the retention numbers inside of our customer retention analytics platform. And these is some of the repeat customer numbers that we've been able to do with them over this time period. You can see

[8:42] repeat customer rate at 40% up from 35% and originally 30% from where they were when they started with us over a year ago. Increase the repeat customer rate by 33%. This is all inside our customer analytics platform called Well TV. You can see the different tabs here and what we're able to measure for brands and how we're able to make strategic decisions for you. If you want a completely free audit for us to take a look at what your retention numbers are like and look at these things like the peak conversion window, when to get people to repeat buy, then book a call with the link in

[9:07] the description. We've worked with over 300 plus brands using their email, SMS, and retention systems. So we kind of know what we're doing. Back to the video. Now we're going to go with the next offer which isn't necessarily subscription-based only. This is one that we see True Classic execute to perfection. They do over $500 selling plain t-shirts. It's all because they've

[9:26] mastered the offer and value stacking. They have all sorts of different offers, but the main one I'm going to highlight is the simple bundle offer. It's overlooked in a lot of cases, but it is the best by far offer for fashion and accessory brands. Let's break it down. This is their breadwinning product right here. It is the classic crew neck. And the whole reason this works, most clothing brands would just have one specific product and that's it. They're driving traffic just towards that. But people like different products in different styles. So why don't we sell them as a bundle and stack the value? So what they do here in all their

[10:00] messaging, they have auto selected the six-pack right here. In all of their ad messaging, they talk about the staple six-pack. That is the AOV that they are trying to shoot for is this six-pack right here at $120. And so they give a simple discount. A single right here is $35 which you could get. But the three-pack, you can see the crazy value, $34. It drops to $23 an item. In the six-pack, which they have auto selected and it's treated as the base standard right here, is down to $20 an item and you save $89. Notice how they anchor the price towards the singles version right here. And they use human psychology to

[10:35] select this middle option. They don't make six-pack the biggest because most people opt towards a middle option. The biggest seems too scary, but a middle option is much more friendly. And so that's what they do right here. And the bundle offer absolutely crushes. It's simple, easy to follow, and easy to execute. Like literally all their ads just talk about the six-pack. That's all they're pushing. So I'm going to take this even a step further with the bundle offer cuz my favorite way to frame this offer is by doing a BOGO or a buy two get one free. And this brand does this absolutely perfectly. This is Live

[11:08] Fresh, a very fast-growing toothpaste brand. And they have done crazy offer tests right here. And they have used this to help scale to eight, nine figures. The thing is a brand like this might just lead with, "Hey, 33% off." But after meticulous testing, we have found out that free always works better. People just like free. So instead of 33% off three products, why don't you just knock off 33% of it and say, "Hey, you get this one for free." And that's why this absolutely crushes for them. The one pack is just a simple discount. You can do buy two, get one free, or you can do buy three, get two free. That is my

[11:41] other favorite offer is offering a free item if you can in a bundle, because people like that much better. And I consider that part of the bundle deal. Now, a lot of people are going to see that, me talking about bundles, and try to like create bundles of all sorts of different products. And I don't necessarily recommend that. For example, if you're a supplement brand and you sell creatine and protein powder and all this sort of stuff. We don't see bundles like that perform as well. Just because it's not something that the customer particularly wants to do. They might only want two of the three items in your

[12:08] bundle. That's why I instead push bundles of the same product. So, doing buy two, get one free of the same product in a different flavor or a different color, or just more of the same. I also want to highlight True Classic and just like how much they've mastered the offer because they also have their evergreen offer, but then they have this flash deals page, which I don't know if they are actually refreshing this with new deals every single day. But, they just run ads towards this flash deals page, and it's like, "Hey, time to purchase right here, and this is how much time it is until

[12:36] midnight." And it's custom deals right here on like overstocked items or anything. And they use 79% claimed right here, and that adds a ton of urgency, and it makes it feel special. And then, what's funny is under it, they actually link their best seller, the six-pack right here, classic crewneck. But, I think it's just absolutely brilliant to have your core offer as your bundles, and then you have these flash deals on the other side. This is because they have mastered the offers, and they know that people buy from offers. And so, these are just big discounts. So, that's what I really want you to focus on for

[13:03] this next offer type. Now, let's get to the last offer type, which is definitely by far the most used, but the most used incorrectly. And that is the first order simple offer. Specifically, usually through your pop-up form to get people onto your email and SMS list, or some sort of discount to get somebody to buy. But, so many brands do this absolutely wrong, but the ones who do this right absolutely print. So, most brands, for example, like Ridge right here, just don't have any discounts on their website and it's just the standard dollars right here and then maybe they'll have different sales throughout their website here and there throughout

[13:34] the year. That's the standard sort of setup that most brands run. That's okay, you can execute that correctly, but it is going to be really hard to get first orders. You don't have any discounts right here or nothing incentivizing that first purchase, which is where we insert the first order special offer. However, most brands again just throw up a 10%

[13:50] off discount and think that's enough. Spoiler alert, it's not. I'm going to show you just why. And then I'm also going to give you a list of different offers that you can test and run. This was an eight-figure brand that came to us similar to sort of Ridge's setup where it's just like they have standard dollars on the website. They don't really do any like slashed out discounts or anything. Pretty standard. And they had this regular offer on their website

[14:09] of a free gift with your first order. That's what the email pop-up form said. That's what it said on the website. Hey, on your first order you get a free gift. And they've been running that for years. And they thought it was great. They weren't even struggling or even thinking of anything. And they didn't even want to change this. But we came in and we're like, let's just test this. Let's see what happens because this is one of the biggest levers that you can pull on a business is the offer. So, we tested our simple offers in the pop-up form to the email list to see how it turned out. So,

[14:34] you can see it was an eight-part offer test right here. We had eight different pop-up forms with eight different variations of offers. We tested free gift versus a different percentage amount versus dollar off, a different dollar off. We tested cash back. We tested a different free gift. We tested a bundle. We tested all sorts of different things just to see what peaked the customer's interest the most. And we boiled it down to four and one offer completely crushed the others. And here right here you can see the final answers right here. We had the free gift, which they'd been running for forever. We had a mystery discount, which was actually

[15:03] $25 off. Then we had $25 off and then we had 10% off. This brand's AOV ran from about $250 to $300. So, $25 turned out to be around like 10% value. And we can look at the numbers and performance right here. All four different pop-up forms with these different offers got the same traffic to them. The only thing that changed was the offer on the pop-up form. And some of these got more email addresses. And then some of these got people to convert more. So you can see the free gift offer, based on the same traffic as the others, it only got 520 people to opt in. A pop-up form that

[15:34] said, "Hey, give us your email for a free gift." The 10% off was low as well. It didn't do as good as the free gift, and it got 476 people. But it got a much higher placed order rate right here. You can see it generated $10.5 thousand compared to $4.6. Okay, so we got an upgrade there, just like that. However, you would need to look at the gross profit because the cost of this was definitely less than that. But then we go even further, and we have the mystery discount. And now it gets even more people. And then it had a 7.6% placed order rate. So again, we're moving up,

[16:02] and the final winner was look at 1,800 people opted into this. It had three times the amount of opt-ins, telling people, "Hey, you've got $25 in credit." And on top of that, it also had a 10.7% placed order rate. So it got three times the amount of people to enter, and then three times the placed order rate, from 3.3 to 10.7. Just a simple change in offer. When you break down the gross profit right here of what the COGS of the free gift was versus $25 off, this absolutely blew it out of the water. As a result, the welcome sequence right here did $33,000 in January. In March it

[16:32] did $210,000. And the store was able to increase their total store revenue by $200,000. We can see the email revenue doubled in this period, and total store revenue increased around $400,000 at that time with no other major changes in the business, just from a simple offer test. Real quick, I want to highlight my school community right here. So this is Email Marketing Mastery. All the insights that you see right here, I post daily insights right here within the community, and I host live calls twice per week right here. I just had my live call earlier today, answering your questions about retention, email, SMS, and offers. There's a full course in

[17:02] here, there are templates and resources, there is a custom clawed scale even to execute your email and SMS calendars, and so much more. There are over 290 people in here, and I highly recommend you should check it out. Link is going to be in the description. So you know we're [clears throat] just giving a first-order discount, and you know the leverage that it has. Now, let's go over the different offers you can run. There are all sorts of fun ones that you can do. Now, the main ones are going to be

[17:23] dollar off percent off and free gift. That free gift also entails of like buy one get one or buy two get one. You could also do something fun like cash back. And I wouldn't recommend anything else besides everything that I just listed. I'm not a fan of giveaways. You really get low quality leads and they don't really convert. So, I wouldn't recommend that. And I don't typically recommend free guides because you don't have high intent around that. People just buy from offers and discounts. So, if you want to give yourself the best chance, I highly suggest you build some sort of offer around this. That doesn't

[17:50] mean slashing your margins. You can jack up your price and then discount down to your target price that you're going to charge anyways. That's what I recommend. A great place to get inspiration on different offers is here on Ali's website aliapopups.com. They've all sorts of different pop-ups with different offers whether it's dollar off, percent off, different amounts of percent off because it sounds pretty basic me saying like percent off, but there's so many different ways you could do it. You could do 15% off. You could do a random number like 18%. I've even

[18:15] seen brands do something like 17.5%. One of my favorites is the mystery discount. So, you can use this for any of your offers, have it be percent off, dollar off, or a gift, or whatever it is and say you've got a mystery offer. That mystery really gets people enticed to want to opt in. We see really good results from that. You could have it be exclusive discount. So, again, it's hidden. You could frame dollar off as store credit. That's another one. All this sort of stuff which you can see on their website right here. We use Ali for pretty much all of our clients. This is

[18:41] the best pop-up platform in the game. And so, shout out to that. If you do not use them, you 100% should get on them and use their free trial. As far as what I recommend, I always recommend with starting with a plain percent off versus dollar off. In most cases, if your AOV is above $100, your dollar off offer is going to perform better. But, if your AOV is under $100, then your 20% off offer is going to convert better. Why is that? Say your AOV is $50 and you offer people 10% off. You're willing to give 10% of margins away. Well, that's $5 off. So, really it's just a $5 bill for

[19:15] someone. And usually, do you want a $5 bill or do you want 10% off? Usually, 10 is the higher number than five, and so it sounds better and converts better. Whereas, if my AOV was $200 and I'm willing to give away 10%, then saying 10% versus $20 off, usually the $20 off sounds a lot better. There's usually a really big lever that we're able to pull for brands right when we come in is if they're a high AOV brand and they're charging a percent off, we just convert that to dollar off. It usually works a

[19:41] lot better and converts a lot better. The other super quick note that I want to be sure to highlight is use the offer that's already on your website and stack that with your first order discount. In this video right here on my channel, I did a live audit with a brand owner and this was one of the things that we fixed. You should definitely check this out. We literally just went through his whole business in Klaviyo. But, this was one of the big lessons and levers we were able to pull. They were pushing everybody towards this product of this hemp cream and you save 15% off. And

[20:07] this is on the website just available for everybody. What is that 15% though? Converts to about $25. And so, we are giving $25 off. And that sounds a lot better than 15% off. So, in our welcome flow, we're doing a mystery discount. And right here, it's an extra 10% off. But, we weren't advertising that in the welcome flow for them. It was just, "Hey, get 10% off." But, they're able to mix that 10% off with this 15% off. So,

[20:31] the percent offs don't sound as good. And we were advertising 10% off when in reality, it's 10% off plus 15% off. So, now the messaging in the whole entire welcome flow is 25% off, aka you've got $35 off. What sounds better? $35 off? Hey, place an order for 10% off. That's why I really recommend that you use what's already on your website to your advantage. And actually, they could take this even a step further because there's an extra 10% right here. So, in reality, it is 35% off your first order, which is going to be like almost $50 off their first order. So, if I was running this

[21:01] brand, I would have a pop-up in a welcome flow that says, "Hey, you've got up to $50 off your first order." That's essentially what this is because look it, it's almost $50 lower and then add the extra 10% off welcome discount. It's actually like $60 off the first order. So, I would put that front and center and make that the core offer. Make sure you don't have conflicting offers with your website and then also with your pop-up form first order. And make sure you combine them, so you have the juiciest offer available. You want to measure your conversions and then also measure your 90-day LTV, cuz maybe an

[21:28] offer works better on the first purchase, but it gets repeat purchases really low. So, when you're doing these offer tests, make sure that you are tracking not just that first order, but you're looking at the downstream effects as well. At my agency Well Copy, we work with over 100 seven-to-nine figure brands and we do this for them. If you want us to do this for you, setting up all these tests and everything, we could

[21:46] literally have it live within a week. Then you should book a call below, because be honest with yourself. You watched this video, are you actually going to go make this happen? Most people probably not, because you have a million things to do as a business owner and things get unprioritized and things move around and happens. So, you have this on your to-do list, but it doesn't end up getting happened for months. But, this could be a massive unlock and so you need somebody to take control of this. So, if you're interested, click the link below to book a call with us. And that does it for

[22:08] this video, three different types of offers for three different types of brands. I hope you got value from it and if you want to see more from me, I have a killer video coming up next. This is the most valuable welcome flow training. So, we talk about offers, now what does your email and SMS welcome flow look like? Cuz you need to have this in place in order to get people to convert. So,

[22:24] I'll see you over on that next video. Thank you so much for watching.

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