DTC Offer Strategy: Raising Your Price Without Losing Conversions | Brian Ng
How do you build a DTC offer that raises profit without hurting conversion rate?
Simplify the offer so a shopper understands it in seconds, then raise MSRP so you can show a bigger discount at a higher final price. The offers scaling DTC brands run today are buy more save more, a discounted first subscription order, or tiered dollar-off bundles. Brian Ng of Digital Ride raised one brand's MSRP to $74.95 behind a 50% discount and saw conversion rate hold steady while the brand moved from a monthly loss to profit.
In this episode, Andrew Foxwell, Brad Ploch and Zach Stuck talk DTC offer strategy with Brian Ng of Digital Ride, covering how to raise prices without losing conversions, the three offers scaling brands run right now, and how a $10M a month brand manages creative with outside agencies. You'll learn why raising MSRP behind a bigger discount can lift profit at the same conversion rate, how to test a new offer with a single URL parameter, and why more creative volume often makes performance worse.
We discuss:
What a bad DTC offer looks like, and why confusing offer pages lose the sale
The three offer structures scaling DTC brands use: buy more save more, subscription-first, and tiered bundles
How Brian raised MSRP to $74.95 behind a 50% discount and turned a monthly loss into profit
How to test offers with Convert or Intelligems experiments versus sending ads to a new landing page
How to forecast ecommerce revenue year over year and why you shouldn't scale before new customer ROAS is there
Running a $10M a month brand's creative through three agencies with no in-house strategists
Pricing psychology: why $39.99 beats $35.99, and a $30 price change that lifted profit per session 40%
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To connect with Brian Ng: https://x.com/briannjho
To connect with Andrew Foxwell send an email Andrew@foxwelldigital.com
To connect with Brad Ploch send him a DM at https://x.com/brad_ploch
To connect with Zach Stuck send him a DM at https://x.com/zachmstuck
Learn more about the Foxwell Founders Community at https://foxwellfounders.com
Learn more about the The Hive Haus Creators Community at http://HiveHausUGC.com
Scalability School is the podcast for media buyers, agency owners and DTC operators who want to grow without guessing, hosted by Andrew Foxwell, Brad Ploch and Zach Stuck.
Chapters
00:00 DTC offer strategy: why $39.99 beats $35.99
02:35 How Digital Ride grows DTC brands as a growth partner
05:27 How to forecast ecommerce revenue year over year
08:56 Can creative agencies replace an in-house creative team?
14:26 How much creative a $10M/month brand launches
22:29 The 3 offers scaling DTC brands run right now
23:55 How to test a new offer: Convert experiments vs new landing pages
25:29 How raising MSRP turned a monthly loss into profit
30:25 Pricing psychology: the $30 price change that lifted profit 40%
Full Transcript
DTC Offer Strategy: Raising Your Prices Without Losing Conversions | Brian Ng - YouTube
https://www.youtube.com/watch?v=aeja1y-eUlw
Transcript:
(00:00) why have your price at $35.99 when you can have it at $39.99? Why have your price at $37, $38.99 when you can have your price at $39.99, right? It's something that also, that's how you can squeeze a couple of dollars of profit per order whatsoever. And something like, for example, a lot of people run the buy one, buy two, get one, buy three, get two.
(00:21) And then you run the sub offer on top of that, right? And so after 15%, you get your prices at, let's say you start at 29. You get your prices to like, I don't know, $22.99 or something like that. Why not make that like after the discount, after the sub discount, $24.99? It's the same thing. You're going to make more money off that.
(00:37) You're going to get the same conversion rate, a higher rank per user one. And now let's take a listen to the Scalability School podcast. Welcome to another episode of Scalability School with a rare appearance of Zach, Brad, and myself back on the podcast together. Although I will be leaving early in this podcast because I'm in Europe and it's late.
(01:05) Brian's in Singapore. It's 4 a.m. Brian, cheers to you for getting up our guests. And Zach and Brad are in a time for them that's totally normal and makes sense. But Brian, I'm just going to say Brian. So Brian is a great guy, member of our community, has been a member for three years, totally an incredible growth expert, somebody who is an agency owner, who has recently gotten into being a brand owner, somebody who I respect and who I turn to a lot.
(01:34) He has always been somebody that doesn't settle for just the baseline. He always is pushing. And I know somebody who's really great when I introduced Brian to Zach last year at a Foxville Founders event. And then Zach texted me after and goes, you were right, Brian's insane. And I was like, correct. He's awesome.
(01:54) And because every time I talk to Brian, I'm like, what do you got going on? And then you send me these like 35 minute looms of all the stuff. I'm like, it's like watching that scene from Always Sunny in Philadelphia where the lines of a string are going between pieces of paper. That's you. That's you, man.
(02:09) So I'm really glad to have you on the podcast and I'm glad to get some sauce for our listeners for you here. So on to the, since we had the longest intro of all time. Sorry about that. Anyway, so Brian, super glad to have you here, man. Also background. One of the reasons I think you're a killer is because actually you were a killer in the Singapore military.
(02:27) Is this correct? Oh, that's not true. I was like the death of us. I wasn't actually holding the rifles. Brian, before we hit record, you were kind of telling us about the agency journey a little bit. And you said kind of over the last three years, you've onboarded a handful of clients. And it sounds like you've intentionally been thoughtful about how many you onboard.
(02:48) But the thing that was really interesting, and I think that what will set the stage for kind of what we're going to talk about today is just give us, give us like a little bit. You're running through examples of like, client was here, now they're here. They were here, now they're here. So just like brag for a second and kind of rifle off a couple of the results that you've seen.
(03:06) And I think that'll help us like set the stage for conversation overall. Yeah, maybe I can get started a little bit about the company itself. So DigitalWrite, like Andrew, as mentioned, we do like Rants and as well the agency side of things. We actually started off with Rants, my business partner. This company is actually like 10 years old.
(03:25) But my business partner was in like e-commerce dropshipping for like the first seven years or so. And an agency came over because we've been working with like an email marketing agency, Hustler Marketing. And they came over and said, hey, you guys are doing pretty well on paid ads. So like, can you help us do this with some of our clients as well? And he was like, sure.
(03:48) And we handpicked some of like the clients that we think could work really well for us. And that's when I joined in actually as a junior media buyer, but like three years of experience past that. And so we've only taken on eight clients over the past three years or so. We have grown them from like around 500k to 10 mil, 500k to 2 mil, 500k to 1 mil, whatever the numbers are.
(04:18) And we really act as growth partners to the kind of the brands that we work with, right? So it's like a more of like a head of growth, not a CMO, but like the head of growth, the people that do all the work in that sense. And so and we don't bring on a lot of clients because we really want the people to get results, right? And there's always like so many factors.
(04:42) It's never just media buying. So it's me buying creatives, offers, and the landing page that you send to, right? Acquisition side, that's what we focus on predominantly. And so, yeah, that's kind of where, how we started and some of like the kind of results that we've seen. Cool. Yeah. And you mentioned a bunch of different growth levels.
(05:01) I know we're going to dig into at least a handful of those, particularly interested in offers personally. I feel like not enough people spend time talking about offers and actually how to craft it. So we'll come back to that. But so we have growth levers as options, but there's like some foundational work that you can do ahead of time to help set brands up for success.
(05:19) And you mentioned forecasting is one of those things that you have a unique perspective on and something that you help clients with. So can you just kind of walk us through like, what is the maybe the 10,000 foot overview of like how you do forecasting? And I'm sure we can dig into a bunch of different questions from there.
(05:34) Well, I mean, I don't think it's, it's a, for, for a forecasting piece, a lot of times for us, it, when, when you, when you do things a certain way, when you like creative test a certain way and you have a certain amount of creative volume for a period of time, you were able to then kind of see the seasonality of it.
(05:54) So like the forecasting that we do gets better kind of year on year, just because you, you know, you, you know, let's say in February you have a completely shit month, you know, in November to January, it's like a really good period. And then, you know, kind of what the trends are between like maybe certain July and August are similar revenue numbers, right? So you kind of know the, the trend, trend of revenue that, that, that the brand is on and you can kind of forecast just based off year on year, right?
(06:21) So we just look at previous year and this year, how, what do I forecast in terms of year and year? It's like the 80%, a hundred percent year on year grow, right? So like double, double grow. And then from there, a lot of times, that's where you start thinking of like, okay, I'm going to be growing like 120% here whatsoever.
(06:37) I really want to push hard here. Let me just, let me onboard creative agencies during this period. Because that's like the biggest element. When your offers is kind of doubtful, you have a decent offer and you have a good offer page and all these things. It's like, okay, I'm going to bring on new creative partners here.
(06:52) And that's when you need to come in and it's like, going at attention, it's like, you need to find a good, good, like good creative partners in. You need to, you need to make sure you know how to vet them, et cetera, and coming in like that. And so even with that, when you're forecasting, you are able to know like, okay, during this period, we actually really sucked ass because we, like we didn't do these certain things, right? We didn't plan for, I don't know, Mother's Day properly or we didn't do any.
(07:16) And then that's when you, you add that in, you know that you have more creative coming in. You know that you can hit your, your 120% year on year grow or something like that. Right. But every single month we plan consistently, like a person, like a percentage of like year on year growth. And we usually hit that number.
(07:34) And usually, and how we control this is that we can go like, we actually can go past that, that kind of year on year growth. But because we control it with bitcaps, we just like, we, we make sure we hit that pace that we need for, for that number. And we could go over, but you know, that guarantees us kind of like hitting the forecast and in that sense.
(07:55) So that's how we do forecasting right now. Usually when the brands first come in, they don't have that stability. So it's more so based off feels. A lot of the things that we do is based off feels, but, but also it's like, I'm, I'm always pushing, like you should never scale when you're, your new customer Royals and your, your numbers are not, like are not there.
(08:17) Right. Brand owners have like, or a lot of clients sometimes come to me. It's like, we need to hit this number. We need to hit that. And it was like, yeah, but it's better to hit a lower number with, with a, with a better new customer Royals, unless you need to clear inventory for cash, cash flow that then pays for your, for your loan that you took or whatever it is.
(08:35) Then, you know, that is a case, but then you need to be like backed up by something else as well. There was a case like that too, but a lot of times you don't need to push, to hit your forecast numbers. You should only push when you have something working in the creative side with a decent offer. So, yeah. More so, I, I, I was going to say that, you know, the, the, the most successful partnerships that we've had with creative agencies have been getting them when they initially first start off.
(09:06) And it's really difficult to find that. Um, and for example, one of our home runs was Harry, when he first started his creative agency and, and getting that in and he got like a lot of wins off that, a lot of total screenshots of it, of that as well. Um, a bunch of clients from that as well. So, uh, that's been like a really, really, um, great, great partnership.
(09:27) We're really happy with that. Um, and then we have some other ones. So we're still exploring when you have like three creative agencies on the, in the pipeline right now, but, um, or like working with us right now, but it's all long-term relationships. And, and, and that's kind of what, what, what we do, do with, with that brand.
(09:45) Um, less so like with creative strats, et cetera. Yeah. I'm curious. So do you, you don't have any in-house creative team for that brand? It's all agencies that are feeding creative. We have like two marketing coordinators that manage the, the, the brand side, the agency side of things, whereas like they're managing the, the content that's coming in and, and reviewing and giving feedback, et cetera.
(10:05) So I think that's, I mean, that's a really interesting call out though. So like this brand's doing 10 million a month and you have three creative agencies and no in-house creative strats. Like I think everyone always tries to go, Hey, we got to build this house, you know, in-house, it's always going to be better.
(10:17) I think it's good to just like say like, it's possible to build this all with like external agencies. Um, we at Marsman have rotated through a lot. Like we've probably hired and fired like 10 to 15 creative agencies at this point. Um, we currently are on with like three. Um, but we've, I think the one question that I have for you is like, how do you dictate a someone, are you or someone dictating what each agency is focused on? Cause I think that's the other part of it too, is like getting, at least diverse creative, getting different types of assets, whatever.
(10:50) Like how do you think about that? Um, for a brand that has like three creative agencies? So initially I'll say when we bring on a creative agency at the start, we usually just say like, Hey, just do what you think would work. And that creative agency probably has access to other ad accounts. They see what's working in the market.
(11:06) They're going to try different structures and, and, and kind of ideas that are working for those accounts, um, bringing them to yours, right? That, that gives the, the biggest success in that sense. Um, once you have that and, you know, one agency focuses on mashups, the other focuses on Yappers, then I, this is what happened.
(11:24) We brought on the third creative agency. They could do everything. I was like, I want you to focus on just these like AI pick sides or just AI creatives in general. So can you please just focus, focus on that? And, and, you know, of course they, you need to see that they might have the talent for it. You need to see the other creatives and what they have given to you, et cetera, as a portfolio whatsoever.
(11:43) Um, so that's kind of how we have split up. Uh, say when coming into a brand and bringing on a creative agency, I'm just usually, I usually know what they are good at. And also I'm telling them like, do, do what you think would work. Of course there's guardrails, right? Like we will look, we'll, we'll see, like, um, we'll, we'll kind of know what would work for the account at best.
(12:03) If they give like some out of the box idea that's like really different, then we'll probably be like, no, like we're not going to do that. Can you like maybe go into this direction instead? But it's like, I guess it's more of, more of like managing. There's also like just managing people in general. You need gifting guardrails and, but let them kind of do their own thing.
(12:22) And giving them like a, so we, Zach, you call it pillars. Like pillars is like the core message that's being communicated in the ad. So it's like, um, hollow, the example we've used 8,000 times on this is like hunters versus compression or whatever. Are you telling the agency, are you at least giving them like the parameters? So it sounds like in some cases you kind of know, Hey, make yappers or make mashups.
(12:43) Are you also helping guide them with the direction for like what they should be talking about? Are you giving them the freedom to say, Hey, we see that this pillar angle message or whatever is working and we're going to create within that. The idea is at the start, we give them the direction, like more so where it's needed.
(12:57) Give them the creators that they need. There's what best in our account. Give them kind of the winning videos that we have and the messaging that we have and what we say in the ad and all this that makes it work. And after we guide them and give them in. But then like over time, after that three months, after that period of time, like I don't want to be managing the creative agency.
(13:17) I don't want to be guiding them into the right direction. They need to know what's working and they need to iterate on that and then get new stuff that's working without my time. Right. Because then it becomes very like I'm doing a job basically. So it's like they need to be able to do it themselves. Maybe guardrails at the start.
(13:35) And even if they're not like they don't follow it as well. Right. I mean, that's usually a sign that it's not going to work out for a creative chat or a creative agency. But if they don't, you know, we still give that three months and we test them fully because we onboarded them in the first place, which is then we know we trust that they're going to produce good creative and their kind of portfolio and all that.
(13:56) But, you know, sometimes there's kind of deceiving in that sense. But after three months, then you can fully judge. And it's not really for a bigger brand. It's not really a cost. It is a cost, but like the cost of not doing it is more expensive. So, yeah. Yeah. And you mentioned this has been the topic of the Twitter discussion.
(14:15) This is not going to come out for a couple of weeks at least. But literally in the last like 48 hours, it's been is creative volume important, which we can if you want to share an opinion on that, you're more than welcome to do that. But for the brand that's doing 10 million a month, like what's what is what kind of creative volume are they pumping out? I think it's like launch like maybe 60 to 75 concepts a month.
(14:34) It's not that and not that how many how many variants like of that is it like concept is okay. You should have a variance or whatsoever. So a couple hundred couple hundred and like when you say concepts like pretty distinctly different concepts probably across messaging as well as formats. Yeah, exactly. So so basically like, you know, I mean, Harry has done I think probably has talked a lot about it on Twitter and probably on podcast.
(15:01) But he is one of our main creative partners right now. And he really like just changes the front end story of it and maybe changes the mechanism, like the unique mechanism a little bit like and and and so. But yeah, it's it's pretty diverse in that sense, like really different stories. Got it. Got it. I can give a comment on.
(15:23) Yeah. On the volume and create the volume. Yeah, please. Volume. I think it's it is such a like common problem, I would say, like volume as of itself is not really that helpful. I've seen like newer like we just onboarded a new brand maybe two months ago. The founder was doing really well last year, August, and he was making his own content, et cetera, blah, blah, blah.
(15:48) And then after that, he started going into this like if you guys know Tribe, Tribe is like TikTok shop for Meta, he went to that tribe where a bunch of creators coming in producing like hundreds of assets every single week. And I'm like, dude, you produce more than this brand. But but his results have gotten worse and worse.
(16:08) And so I see in this way, it's, you know, you need to have like thought out like concepts, right? And you need somebody to do it. So you need like if you have a creative shred, they need to be thinking out their concepts and then producing it with with intention. And and then you can do like maybe 10 to 15 iterations.
(16:29) You do five is completely net you. Right. And the same goes for, let's say, Tribe creators. I would say or at least the creators that they're coming in, they need to have that have a like thought behind it. You know, if not, I test them a different way. I'm not testing them in a ABO creative testing where I really spend budget on putting them in a CBO and I'm throwing it in.
(16:49) Because TikTok shop for Meta, like the tribe thing, the thing is, like, I've only seen that work with and this is my inexperience. I've only got on the platform for like a few months, like three months or so. And, you know, I don't have that much experience in this, but I'm starting to get way more because we have brands that are pushing this.
(17:07) Um, but it's like the those brands are like TikTok shop. They have creators that are producing stuff that's winning. Then they pull that over to tribe and then they start posting that or they then pull them over into their own. Um, they have their own system of of doing things and and and and and that works for them.
(17:26) Right. But those are like top creators and they're putting spend behind them. Right. We sometimes brands just use tribe specifically to use for like the payment processing of creators, paying the retainers, paying the percentage of ad spend or revenue that that you're doing. And that is worth the fee that it comes with, the 1.5% fee that it comes with.
(17:44) Right. So, yeah. But going back to that creative piece is more so like you need you need people of intention to produce that. If not, you need to find a different testing structure for them. So if like creative agencies, they need to be producing that with intention. And and that's the most important thing.
(17:59) And the way that you scale volume is to have more creative agencies and more creative strategies and that have the intention and push that through. Yeah, that makes sense. Um, cool. I want to jump into offers because I think you it sounds like you have some strong opinions about offers. And so I'd be very curious.
(18:15) Maybe where we start is, um, it sounds like maybe even recently you've pulled up and you've started to look in some ad accounts. And like one of the first things you're looking at and trying to diagnose is just like offers in general. Um, what does it what does a bad offer look like? Is maybe a good start. All right, friends, quick break.
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(19:27) And when the test concludes, your results flow straight into your MTA, meaning you can easily see results alongside the rest of your data. Incrementality was broken. North beam fixed it. No discount. It's like 20% discount here. It's really not really incentivizing any action on like the middle or bigger bundle.
(19:50) It's really difficult. I think the visual of it is very important. When you land on the site or the PDP or offer page, now it's the same thing. You need to understand what's going on. A lot of brands, they have it designed so badly. Like in a way where it's like things are so messy, right? The paragraphs that they have is like four paragraphs under the image carousel.
(20:13) Like that whole like, and it looks super bad. The four paragraphs in. And then you have like another offer, which is like four blocks long, you know, or like five blocks long of like the different tiered discounts, for example. And that just does like extremely horribly. Why? Because when customers land, they don't know what's going on.
(20:30) They don't know what you stand for. It takes too much time to read what you're saying. It takes too much time to understand the offer. So one of the things is like simplify the offer. Try and put that higher kind of discount threshold as well. Like raise your MSRP, bigger discount, you know? So like that. And they're like standard offers that you can run nowadays with like supplements is like buy one, buy two, get one, buy three, get two.
(20:56) For any type of multi-skew or single product multi-skew, like different color brand, you can run like more of the javvy style offer pages. Those are like our go-tos right now. Yeah. So bad offers. It's confusing. There's like way too many things like the customer has to do math to try to understand the economics.
(21:14) Like that's a good example of that. And then like the low percentage. Yeah. It's too confusing. It doesn't look like a good deal. It just needs to feel like a good deal. They land on it. Your ad needs to do all that persuasion makes them like really want to perk. And then they land and see what you have, maybe some reinforcement, but then you see your offer is like, okay, this makes sense.
(21:32) You know, do I want to fork? Then the question in your head is like, do I want to fork out this dollar amount for what I just, you know, heard through an ad? Yeah. And so you mentioned a couple of things in there that was interesting. So like the idea of like stacking and you can kind of do that with buy more, save more while also like playing with the MSRP value.
(21:49) And I think particularly in the supplement space, like there's a couple of outs that people are going right now. It's buy more, save more or subscription only or some kind of like blended version of the two. I think like that's, that's pretty common. But when people are doing the BOGO, I guess this is actually true of the subscription offer as well.
(22:06) They're kind of like, it's like, okay, what is all in that first, that first order? It's like, okay, we're going to throw in, you get, you get, you're going to get the base products. You're probably going to get a couple of free gifts. Then you're going to throw in free shipping or you're going to throw in shipping, which has a value assigned with it.
(22:21) So it's important to actually calculate that entire MSRP. And then you do your markdown on top of that. Is that kind of in the right direction? Yeah. I mean, I can talk about the offers that work right now. Because technically there's only like three different offers that brands that are really scaling hard are doing.
(22:38) Right. It's that buy more, save more, which is you, you, you buy one or you buy two, get one and you buy three, get one or get two. The other one is more of like what Marsman does, which is like you do the, the, the, like a subscription only at the front end. We're actually going back to the buy more, save more.
(22:57) That is like the one-time version that you can run. And then you can run that 15, 20% discount as well on top of that for subscription. And usually you see like a 60% tick rate on that. Right. Best app to use that for is Keqing Bundles. It's the easiest to do it. That's why the dropshipping demons do it. Use, but the, and then you have the, the, the, the one that Marsman runs more.
(23:17) So it's, it's like that, like a bigger discount up front, $39. I think you get a higher tick rate from that for sure. And then the subsequent orders are like $59, $59. And then the last one, which is more of like what Better Body Co-runs and like Rejuvene that like those two companies, they're like, last I saw it was like a buy one and then you buy two and then you buy three.
(23:40) And then it's like $10 off, something off, and then like $30 off, something like that. But also not sure how well that is doing for them, but it doesn't seem to have, they haven't seemed to have grown that much from, from the past couple of years. But probably has, I don't know, it's looking at traffic wise.
(23:56) How are you testing this? Like, how are you testing in the ad account? Is it like in the ad account, you're doing separate ad sets and doing ABO? Are you doing IntelliGems on the backend? Like, I think there's, there's so many ways to be able to try to test and I feel like offers is like a really complicated thing to test.
(24:09) It is, well, there's two ways, right? You either throw it in, like you, you add like a UTM parameter that triggers this experiment, like in a convert or IntelliGems, or you can shoot it to like your best ads to the new kind of offer page or landing page itself, right? I still fall into the lines of like convert experiments.
(24:37) I'm a bit old fashioned that way. My business partner does all of the tests now through, through the, through new ads, new ad, best ads to that landing page. What we found is that different ads perform to that landing, if it's a different landing page, let's say. But offers wise, usually same ads. I think, I'll presume the same ads would perform, but that's two ways.
(24:59) That's the two ways. I honestly just like, like do a convert experiment because it's like just way easier. Like I just throw it in, put the URL parameters. I launch it and then it just tells me like 20% up, right? For user. And I'm like, cool. That makes sense. And then I throw into cloud, profit, profit analysis.
(25:17) Does that make sense? Okay. It makes sense. Great. You know, it's a winning thing. Like that's how, how we do things. But my business partner now has gone into the route of more so like, um, ad set. And then after that to new, new landing page. But yeah. How much are you thinking about like offers? If you are like on the, on the, the, the rebuild side.
(25:35) So like from a subscription perspective, like, are you charging, like thinking about charging, shipping on, on a rebuild? Is the price going up? Is it going down? Are you throwing in free gifts? Like, are you, are you thinking about the retention piece and the offer for rebuilds? So many of the clients that we have scaled right now, uh, just like more so one time.
(25:52) So like a 10 mil per month client is a one time purchase kind of thing. Very small subscription after, um, we also have skincare. Um, but you know, like we're starting to push this like piece a bit more in terms of the retention side. One great piece of advice that, um, Zach did give me was to like, you know, free shipping up front.
(26:13) But after that you charge them $8.795 or something like that. And that, um, we have implemented. So this new brand that we just onboarded is the one that I've stopped off like this. It's like, they were losing money for a lot of months now. Um, went from like negative 24k. And then like the next month was 10k net profit.
(26:32) Then the next month, this month, um, should be like 50k in that profit based off what we've seen. Um, and that, that was just all based off like an offer change, right? We modeled that Javi framework, multi skew, um, different, different flavors. And then the MSRP were just too low. The co-founder told me like, um, oh, I think the price is too high.
(26:56) Or like, I don't even think we can charge it much. I'm like, fuck it. Just run. Let's see. Let's, let's run it and see. And, and, you know, this, this is literally what your competitors charge. You're charging way less than them. Why don't you, you increase your prices and, and, you know, so they went from a one-time offer, which was buy one, buy two, save like X percent, buy three, save X percent, buy four, save X percent, which in and for itself is like so big and long on screen.
(27:23) We moved it to that Javi offer page style, you know, and, and that is sub first. And then after that one-time purchase option, it's like, if you click on it and go to the site, no free gifts. We raised MS, MSRP to like $74.95 and then we gave it a 50% discount. And then the sub, the, the, the interesting thing is, is that the conversion rate has stayed roughly the same.
(27:45) Like, like, um, the conversion rate has stayed the same as it was a 4% increase in conversion rate and like a 18 or 15% increase in revenue per user. And we're getting subscriptions like every single day. They like, we're going to get more, like in two months time, we're going to get the entire subscription thing that they have been doing for like the past year plus year to two years.
(28:07) And it's a script. And usually with subscription, you see like a negative 10, 15% gram per user. So it's like this, that was like an insane win. And it was also predominantly by increasing price. Now we're going to get free gifts. It's, and the gifts are going to be related to kind of the, the product that they sell.
(28:23) And it's going to like convert even better. And so then there are a lot, a lot of spit tests that you can do, especially on the Javi style page. We can talk about that if you want. But yeah. Yeah. The MSRP thing is so interesting because at the same event that like whatever a year ago where we were all in the same room, but we didn't meet when you talked to Zach.
(28:41) Zach, I'm pretty sure we sat down with like a handful of brand owners and like I watched you talk to them about their offer. And they were like, they were really hung up on like MSRP and changing it. And you just, I don't know if you even remember this conversation, but you were basically like, you just need to change it until like the offer makes sense.
(28:58) And like the offer looks compelling enough. Like you sat with them and it was just like, you just have to continue to like manipulate some baby, an aggressive word, but like you have to continue to manipulate and like, don't be afraid to change the MSRP. That really stuck with me because like people don't, like they don't, they don't change the base price.
(29:13) Because Brian, to your point, like they're worried that it seems too high, maybe by comparison to like what the market is saying, or like they don't think that they can, they can justify that. Zach, I don't know if there's anything else that you remember from that conversation or offer. Yeah. I mean, I just, I gave them the example of hollow, which is like, dude, like we shouldn't be charging 50, $60 for a single pair of socks, but to hit the, to hit the discount and offer that we want to, to make it compelling
(29:35) enough to buy, to hit the AOV versus the NCOC that I have to have to back out to the math works. Like you sometimes have to increase prices that you can play with offers. And yeah, their performance wasn't hitting where they needed it to be. I'm like, it's not going to fix by you, by you not messing with this, like this offer dynamic.
(29:53) You just have to try. Yeah. So yeah, I mean, that's, that's usually the brands candidly that are stuck at that like sub few hundred K a month in revenue. And they're like, I just like can't break through or like, we're just not profitable and just can't get it to work. Almost always it's like an offer problem.
(30:08) And then obviously like, you know, creative is a huge piece of this, but almost always I think it's like an offer issue. Yeah. So yeah, Brian's, Brian's right. Exactly how, I mean, I think more brands need to be aggressive when it comes to pricing and stuff like that. Cause yeah, if you're torching cash, it's not working like an offer change can literally turn the business around.
(30:25) Yeah. Yeah. We ran a pricing test recently. Yeah. It was a quick kind of quicker pricing test that we ran. It's a high AOV call it in like the $400 range. The MSRP kind of like close to $500. And it was just like an awkward in between number. Like I'll pick a random number. Like for example, it was 297 or 279.
(30:46) It's like 279, like the 79 feels super random. It's like not quite 299, but it's also not 249. It's just like this awkward spot. And so we push them to drop it to just like get it below the next threshold. Like they were running a $50 discount to get it to 229, but 229 still feels kind of random. So like, okay, try pushing into 199.
(31:05) And we saw like a 40% lift in profit per session while also being able to scale substantially further. And then just like a couple of times throughout the month for various reasons, which we don't need to get into. It's like they go to full MSRP and it's like MER gets shittier and they lose 50% of their spend volume for the course of that week.
(31:25) Unless we try to hold it to like continue to like maintain whatever funnel. Um, and it's just like, it's insane what just those, those small changes can do. Even if it's like the change is not that meaningful. It was a, it was a $30 change on a really expensive product. And, uh, it, yeah, 40% increase in profit per session.
(31:42) Insane. The, it's just pricing psychology. It's like, why have your price at 35.99 when you can have it at 39.99? Like, or 30, why you have your price at 37, 38.99 when you can have your price at 39.99, right? It's, it's something that also, that's how you can squeeze a couple of dollars of profit, um, per, like for order whatsoever.
(32:07) And, and something like, for example, a lot of people run the, the buy one, buy two, get one, buy three, get two. And then you run the, the sub offer on top of that. Right. And so your, your sub fifth after 15%, you get your prices at, let's say you start at 29, you get your prices to like, I don't know, 20, 22.99 or something like that.
(32:27) Why not make that like the, after the discount, after the sub discount, 24.99. It's the same thing. You're going to make more money off that. You're going to get the same conversion rate, a higher revenue per user. Why? Just because like people view it the same. That's why all the stores, they put it like, and at 9.99 or 9.97 or some bullshit like that.
(32:45) So it's like, yeah, it's like the pricing part is so important. I see so many people, they put like their price at $85. I'm like, why not $89? It's like, why put it at 85? So like, that's how you squeeze. Like, this is where we like squeeze so much of the profit, all these little small changes that we've made onto the site.
(33:05) And if like so many more like CRO wins that can go through, they're like super obvious, but like have really made a substantial difference to our business. Even though we don't run CRO, it's just like common sense. You know, like we're not a CRO agency, but we technically run it like that. The Amazon thing is super interesting because the one I just, the one that I was talking about, they did the, they intentionally did it.
(33:25) Well, they intentionally left the MSRP higher. They didn't like go raise the price, but like Amazon, and I'm sure there's like some Amazon pricing things you have to consider for this, but their Amazon is listed at the MSRP. And then they have a nice little, you know, it's not an always on offer on the website, but same thing.
(33:39) Like it launched on Amazon and the website stayed the same. Pricing was better on the website by a small amount, even though MSRP was listed. So there was a discount and they saw like, okay, yeah, Amazon went from zero to a couple thousand dollars a day. But the website went from, you know, whatever, 50K a day to 60, 70K a day, because to your point, like the pricing psychology and like, oh, now it feels like a better offer.
(34:00) They saw the exact same thing. Since we're going, since we're going bar for bar on tests right now, let me tell you about a loser. It's pissing me off. We launched a, we have a test rolling right now. It's just a, it's a PDP test. Well, the original version, when they redid the PDP, they relaunched it with like an AI summary of the reviews.
(34:18) And to me, I'm like, okay, that's interesting. Like Amazon's got the AI summary, but like, I just feel like customers are kind of like averse to AI things. Maybe not with reviews because it's on Amazon, there's that summary, but there was no, you couldn't read actual reviews. And to me, I was just like, felt like, ah, it feels weird, especially because there's tons of glowing, like they have great reviews, 4.7 stars, tons of awesome photos.
(34:37) Everything is great. So the test we're running right now is the summarize version against the full review widget. The summarize version is winning by 10% profit per session. And it's pissing me off. It's like, it makes no sense to me. Because like, to me, it's like, you'd want, you would assume customers on a high AOV product would want to read real authentic reviews from other humans.
(34:55) Um, but apparently they like the, the summarize version and it literally says AI summary. No, no, but that's a really good idea. That's interesting. Um, that'd be super interesting. That, um, what's front row, front row MD just came out with that. A bunch of people are testing this like clinicians AI thing.
(35:09) I don't know if you guys have seen that. IMAID's doing it. And I know a couple other brands are doing it where you land on a PDP and you can ask clinician AI about the product. Um, super interesting. We tried to, I tried to break it yesterday for IMA by asking it like, will this heal, cure my whatever disease? And it was, it was, it was pretty good about response.
(35:27) Yeah, I'm sure. I go follow Brian on X. Brian, B-R-I-N-N-J-H-O on X. Brian, thanks for being here, man. This is great. Thanks, man. The only way that we grow this podcast is by you sharing it with your friends. Honestly, like reviews kind of don't really mean anything too much anymore. They're really meaningful, but they don't do a lot for the growth of the podcast.
(35:49) Um, and so sharing YouTube links, sharing Spotify links, sharing Apple, whatever we call it under the podcast app. Now, anything you can share the better we're going to be. Um, guys, anything else you want to say on this? Yeah. Please go check us out on YouTube, rack up those views for us. We'd love to see it.
(36:06) And then subscribe, make sure to subscribe on YouTube as well. And I relentlessly refresh the YouTube comments because it dictates my mental health for the day. So please say something nice about all of us. Thank you, everyone. Thanks for listening. Honestly.
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