(V x CR x LTV) - VC = $

This equation is the lens we look through to problem solve growth for our clients. Essentially, drive visitors, convert them as often as possible, increase their value, focus on variable cost, & you'll have profitable rev growth

Let's break it down...

2/ V - Visitors

How can we drive as much high-quality traffic as possible for a brand. You can look at this in two categories: Paid & Organic. Naturally, brands earlier in their growth will be heavy on paid & light on organic. As they grow, a healthy brand will invert that.

3/ Paid traffic is critical for the growth of any eComm brand. Facebook & Google are still the stars of the show with Pinterest, Snap, Tik Tok, Amazon, etc. all supplementing. Facebook generates the demand, Google captures it. So how do we think about these channels...

4/ CTC Facebook best practices are as follows:

- CBO Cost Cap
- Broad Audiences
- Full Funnels & Exclusions
- Exit Learning Phase

We have plenty of others but these are the big themes.

5/ All of those layer up into something that is v important to the growth of an ad account: Specificity. Treating everything the same in an ad account will lose you $$. Breaking out an account out by profitable angles/products will make you $$. Not all purchase types are the same

6/ So how do we understand those profitable angles/products? Through Statlas. We can see which angles are the most profitable for brands, break them out into their own campaigns, set exact bid targets, and then speak specifically to each through ad creative.

Small sampling

7/ Creative strategy here is an absolute must. Developing ads for the sake of developing ads doesn't work. Having a system for understanding why creative is working so you can stack learnings, does work. Introduce the AIDA framework - Attention, Interest, Desire, Action

8/ So now that we're generating all this demand, we supplement capture through Google. The goal here?

Own real estate

Fend off Brand competitors, invest heavily in Shopping, optimize your Non-Brand search efforts, and continue to test in YouTube, Discovery, & Display.

9/ Sidebar, while Google has been traditionally viewed as demand capture, @tonychopp and the Google team have been seeing some very intriguing results with Prospecting on YouTube. I expect to see a blog post soon

10/ Last but not least on Visitors, SEO. While there are many technical aspects of this, the hero of this story is Content Marketing. If Facebook is like Bitcoin or DOGE in big return quickly, Content Marketing is like an Index Fund. A long-term play that has compounding value.

11/ A robust content strategy gives your brand a reservoir of assets for every other type of marketing I mention here. From ads to email, acquisition to retention, content has become a moat that separates average from great.

12/ CR - Conversion Rate

When it comes to CR, there's plenty of routes to go. We focus primarily on assets that make up our core Facebook ad funnels. Why? Because the lessons from paid traffic are rapidly testable and more widely applicable to other sources.

13/ For this, we focus on Message Mapping. In other words, ensuring that the customer journey is consistent from the ad all the way through the purchase. Sounds like common sense, but many brands have abandoned this work-intensive process in their desire to scale quickly.

14/ That approach might have worked 5 yrs ago, but with ad costs rising, this method of growth is no longer cutting it. A common theme throughout everything we do at CTC when scaling brands: Specificity. The more you can tailor a customer journey, the better you will be.

15/ Often overlooked, your offer can have the biggest effect on CR. This doesn't mean a discount, it means a sum of two key areas: Product and Price (and even Positioning). Stop running small tests. Take big swings. They can fundamentally change your business.

16/ LTV - Lifetime Value

LTV is a nice buzzword, but it's misleading. For early-stage brands, it's a guess. Also, brands work off cash flow, they can't wait a "lifetime" to realize the value of a customer. They will curl up and die. As a result, we focus on different metric…

17/ Cash Multiplier! Essentially, your 60-90 day LTV (adjusted by brand). The gold standard is a 30% increase in LTV within 60 days and a 100% increase within a year. To put it plainly, if you increase your 60-Day LTV, you WILL increase revenue and cash in your pocket.

18/ Why is CM so important? Well b/c of the Law of Shitty Cohorts. In a nutshell, at scale user acquisition gets more expensive. To offset that, you need to increase the value of customers you acquire.

Great two-part podcast on it here
https://andrewchen.com/a16z-podcast/ 

19/ Well how is this measured? As I mentioned before, Statlas! It makes it possible to easily track payback windows on a variety of cohorts such as:

- Product by first purchase
- Time of purchase (seasonality)
- Acquisition channel, campaign, or specific offer

20/ Now it's time to pour gas on this LTV fire through Email & SMS! No other digital marketing tactics can outperform a well-executed Email/SMS strategy. This comes through hyper-focus on each touchpoint from flows, to campaigns, to creative, thoughtful SMS sends, & more.

21/ We've found that this is often an under-optimized channel, yet one that can lead to a consistent stream of revenue all while building a community. If a brand fails here, they've let all the hard work of acquiring customers go to waste.

22/ VC - Variable Cost

There are many ways to measure variable cost, but we recommend a four-quarter accounting matrix.

- COGS: Cost of Delivery
- CAC: Customer Acquisition Costs
- OPEX: Operating Costs
- Profit: Speaks for itself

23/ Ideally, we want to aim at 25% of revenue going to each of these categories. For ex., if COGS are higher than 40%, this looks like a good area for improvement. If brands can squeeze every drop of profit out of VC, they'll be making their life much easier.

24/ To tie it in a bow, arbitrary plans won't grow a business. You need real strategies with specific growth goals. That is what we focus on at CTC & if you're interested, that's what we can focus on for your brand.

You can find out more here https://bit.ly/3gekBj3 

25/ As a disclaimer, there are many other areas to consider when growing a brand. This thread is meant to be a sampling of some of the key areas we focus on. We fundamentally believe that if brands can affect each area of the growth equation, they will have sustained growth.