By Aisha Ahmad | Lead, Business Strategy & Analytics
Table of Contents
How focussing on “Hidden” Categories or Products for a D2C brand can improve New Customer Acquisition by 20%
While running a D2C business, there are always a few top “Hero Items” (i.e. Categories or SKUs) which are identified based on market intelligence and they become the backbone of the business carrying the whole weight of performance.
Now the effort of the whole marketing team focuses to pull up these categories/SKUs by curating the right offers & communication and aligning advertising budgets around these particular Hero Categories/Products to perform well.
However, there are always “Hidden Gems” in every D2C business which gets overlooked and in this blog, we shall be talking about how these “Hidden Gems” can unlock the next level of growth for your business after a certain point in your growth journey.
Challenge:
While performing a routine Category & Product level analysis of Performance campaigns, for a “Fresh Meat Delivery” brand, we realized that one particular category (which we will be referring to as Hidden Category in this article), which had otherwise not been a priority for marketing spend & efforts and consistently run on low spends, had been delivering NCAs that were at par with those of the major categories or ‘Hero Product’ for the brand, all the while maintaining the desired CAC.
In this case, the campaigns algorithms were not able to deliver much through auto-learning on the “Hidden Category” as the input (Offer & Creative) were focused around the “Hero Items” and it was supporting “Hero Items” to pick the maximum budget and delivering major acquisitions there.
Solution & Result:
To check if this category would continue to be one of the best performers and help scale the business further, we allocated a certain chunk of the marketing budget to the creative for “Hidden Category” as an experiment to observe the learning. Since this was an early-stage experiment, we decided to start with only 1 marketing platform – Meta and avoided leveraging it in highly sensitive Automated Campaign (e.g. UAC, PMax or ASC) initially.
Due to this proactive analysis and initiative at our end, the “Hidden Category” managed to become one of the most performing categories contributing a whopping 50% of the New Customer Acquisition for the brand, while keeping CAC constant. This experiment also pushed the Contribution% of this “Hidden Category” in the total brand revenue, taking it from 5% pre-campaign to 25% post-campaign.
| Month | Spends (In lakhs) | CAC* |
| Jun | 80 | 134 |
| Jul | 54 | 100 |
| Aug | 69 | 111 |
| Sep | 82 | 119 |
| Oct | 71 | 153 |
| Nov | 94 | 135 |
| Dec | 124 | 128 |
| Jan | 120 | 135 |
*All numbers are representative and not factual.
How focussing on a small-ticket but high-demand product of a fresh meat delivery brand improved New Customer Acquisition by 20%
Challenge:
While performing a routine Category & Product level analysis for a fresh meat delivery brand, we realized that the ‘Spreads’ category, which had otherwise not been a priority for marketing spend and consistently run on low spends, had been delivering NCAs that were at par with those of the major categories or ‘Hero Product’ for the brand – such as chicken or mutton, all while maintaining the desired CAC.
We realised that this category is the ‘Hidden Gem’ in the system and we should utilise this to grow the overall system.
Solution:
To check if this category would continue to be one of the best performers and help scale the business further, we allocated a certain chunk of the marketing budget to the creative for ‘Spreads’ as an experiment to observe the learning. Since this was an early-stage experiment, we decided to start with only 1 marketing platform – Facebook.
Result:
With the help of this experiment, we managed to achieve a 20% jump in the overall New Customer Acquisitions with the CAC being the lowest as compared to all other categories over the week.
Hence, we decided to then replicate this experiment across other platforms starting with UAC, in a phase-wise manner.
Due to this proactive analysis and initiative at our end, the ‘Spreads’ category managed to become one of the most performing categories contributing a whopping 50% of the New Customer Acquisition for the brand, while keeping CAC constant. This experiment also pushed the Contrbution% of Spreads category in the total brand revenue, taking it from 5% pre-campaign to 25% post-campaign.
| Month | Spends | NCA | CAC |
| September’20 | 8,233,900 | 6,900 | 1200 |
| October’20 | 7,138,900 | 4,600 | 1500 |
| November’20 | 9,401,900 | 6,900 | 1400 |
| December’20 | 12,417,200 | 9,700 | 1300 |
| January’21 | 12,025,000 | 8,800 | 1400 |
| February’21 | 14,190,900 | 10,400 | 1400 |
| March’21 | 16,357,100 | 11,100 | 1500 |
*All numbers are representative and not factual.
