Podcast Summary: Marketing Operators E040—How Product Positioning and Post-Purchase Upsells Supercharge CRO with Shane Rostad

Release Date: December 31, 2024

Hosts: Connor Rolain, Connor MacDonald, Cody Plofker
Guest: Shane Rostad

Introduction

In Episode E040 of Marketing Operators, hosts Connor Rolain, Connor MacDonald, and Cody Plofker welcome back Shane Rostad, marking his second appearance and solidifying his status as a "friend of the pod." This episode delves deep into the intricacies of Conversion Rate Optimization (CRO), focusing on how product positioning and post-purchase upsells can significantly enhance CRO strategies.

Shane Rostad's New Brand Launch: Cheeky

Cheeky: An All-Natural Body Soap Line

Shane Rostad shares exciting news about his recent venture—Cheeky, a brand offering all-natural, cold-processed bar soaps. Launched on November 15, Cheeky targets the personal care hygiene space with a sustainable approach, distancing itself from the hype-driven models of brands like Prime.

Shane Rostad [04:59]: "The launch's been awesome. We did like 10,000 orders, which was about 70% of our inventory. It’s off to a really good start."

Strategic Partnership with Content Creator

A key factor in Cheeky's success is the partnership with Charlie, a well-known YouTuber. They leveraged Charlie's large, gaming-centric audience, addressing the stereotype that "gamers don't shower" by introducing an honest, behind-the-scenes look at soap making.

Shane Rostad [07:31]: "We recorded a dedicated video on Charlie's channel, showing the entire soap-making process. It resonated because it was transparent and authentic."

Achieving Early Success

Despite initial uncertainties about market reception, Cheeky surpassed expectations, selling 10,000 units in its first month without extensive marketing efforts beyond the initial video.

Growth Strategies and Offer Positioning

Balancing Hype with Sustainability

Shane emphasizes the importance of building a sustainable business rather than succumbing to explosive, short-term growth driven by hype. He contrasts Cheeky's approach with that of Prime, highlighting the pitfalls of overproduction and dependency on temporary hype.

Shane Rostad [07:31]: "We didn’t want to scale like Prime and hit a wall with excess inventory. Instead, we opted for a steady, manageable growth."

Prioritizing Offer and Target Demographics

The discussion underscores the necessity of crafting compelling offers and accurately identifying target demographics. Shane explains how Cheeky’s initial offer—a starter pack of four bar soaps—was designed to ensure profitability while accommodating customer preferences.

Shane Rostad [12:45]: "We can’t sell a single bar at $7 without losing money, so we set a minimum purchase of four bars, which aligns better with our unit economics."

Website Design and CRO for DTC Brands

Optimizing the User Experience

Shane discusses the strategic elements incorporated into Cheeky's website to enhance CRO. Emphasis was placed on clear value propositions, intuitive design, and effective messaging tailored to the target audience.

Shane Rostad [15:25]: "We highlighted the top reasons to use Cheeky right on the homepage, ensuring visitors immediately understand the unique benefits."

Leveraging Social Proof Without Traditional Reviews

In the absence of conventional reviews, Cheeky utilized video testimonials featuring familiar faces from Charlie’s channels, adding authenticity and relatability.

Shane Rostad [25:44]: "We used videos of people from Charlie’s other channels to serve as unbiased testimonials, making the social proof feel more genuine."

Handling Unisex Branding Challenges

Cheeky's branding aims to be unisex, countering competitors like Dr. Squatch that target a specific gender. However, this led to some initial confusion among female customers, highlighting the challenges of inclusive branding.

Shane Rostad [29:38]: "We had multiple women express that they thought the product was only for men because our social proof featured only men. It’s something we need to address moving forward."

Expanding to New Demographics

Segmented Landing Pages and Personalized Funnels

Shane and the hosts explore strategies for reaching new customer segments without alienating the existing base. This involves creating tailored landing pages and personalized ad campaigns to resonate with diverse demographics.

Shane Rostad [31:03]: "You have to identify those new demos and speak directly to their unique pain points. It’s about creating segmented experiences that feel personal."

Balancing Brand Consistency with Targeted Messaging

Connor highlights the importance of maintaining brand consistency while tailoring messages to different audiences. Shane agrees, emphasizing the delicate balance between broad appeal and specific targeting.

Connor Rolain [15:25]: "Your main site should encompass different demographics, but also allow for personalized touchpoints through segmented funnels."

Post-Purchase Upsells and Cross-Sells

Maximizing Revenue Through After-Sale Strategies

A significant portion of the episode is dedicated to the role of post-purchase upsells in boosting Average Order Value (AOV) and overall revenue. Shane advocates for using tools like After Sell to seamlessly introduce additional offers post-purchase without disrupting the customer experience.

Shane Rostad [53:22]: "After Sell makes it easy to set up funnels based on purchase behavior, allowing us to offer relevant accessories or complementary products effortlessly."

Strategic Implementation of Upsells

Shane shares insights on how Cheeky strategically implements upsells, such as offering accessories at a discount to complement the initial purchase. This approach not only enhances the customer experience but also improves unit economics by increasing the margin on each sale.

Shane Rostad [68:40]: "Accessories always have a positive effect on unit economics because they tend to have higher margins. This allows us to offer discounts while still maintaining profitability."

Balancing Profitability and Customer Satisfaction

Connor and Shane discuss the importance of ensuring that post-purchase offers are both profitable and enhance the customer’s experience. Shane notes that while upsells contribute to revenue, they must be thoughtfully integrated to avoid overwhelming or deterring customers.

Connor Rolain [57:59]: "Post-purchase offers don't interfere with the purchase experience since the initial sale has already occurred. It’s a prime opportunity to introduce additional value."

Key Takeaways and Conclusions

Holistic Approach to CRO

The episode underscores the necessity of viewing CRO not just as website optimization but as a comprehensive strategy encompassing product positioning, offer creation, targeting the right demographics, and leveraging post-purchase opportunities.

Sustainable Growth Over Hype

Shane Rostad’s experience with Cheeky illustrates the benefits of prioritizing sustainable growth through thoughtful product development and strategic marketing over short-lived hype-driven tactics.

Importance of Post-Purchase Strategies

Effective post-purchase upsells and cross-sells can significantly enhance revenue and AOV without compromising customer satisfaction, provided they are implemented thoughtfully and align with the brand’s overall strategy.

Adaptive and Segmented Marketing

Successfully expanding into new demographics requires adaptive marketing strategies, including segmented landing pages and personalized customer journeys, to resonate with diverse audiences while maintaining brand coherence.

Notable Quotes

• Shane Rostad [07:31]: "We recorded a dedicated video on Charlie's channel, showing the entire soap-making process. It resonated because it was transparent and authentic."

• Shane Rostad [12:45]: "We can’t sell a single bar at $7 without losing money, so we set a minimum purchase of four bars, which aligns better with our unit economics."

• Shane Rostad [25:44]: "We used videos of people from Charlie’s other channels to serve as unbiased testimonials, making the social proof feel more genuine."

• Shane Rostad [29:38]: "We had multiple women express that they thought the product was only for men because our social proof featured only men. It’s something we need to address moving forward."

• Shane Rostad [53:22]: "After Sell makes it easy to set up funnels based on purchase behavior, allowing us to offer relevant accessories or complementary products effortlessly."

• Shane Rostad [68:40]: "Accessories always have a positive effect on unit economics because they tend to have higher margins. This allows us to offer discounts while still maintaining profitability."

This episode offers valuable insights for DTC brands aiming to enhance their CRO strategies through effective product positioning and post-purchase upsells. Shane Rostad’s practical experiences with Cheeky provide actionable takeaways for marketers seeking sustainable growth and increased revenue.