[ad_1]
Paul Jauregui first appeared on this podcast in September 2020. He and Lisa, his spouse, had launched BK Magnificence, a direct-to-consumer cosmetics model, the 12 months earlier than to nice success.
Since then, many DTC manufacturers have suffered as a consequence of iOS 14.5’s affect on Fb promoting. However not BK Magnificence. Jauregui “pulled the plug” on Fb advertisements in late April 2021, simply earlier than the iOS launch.
He advised me, “There was quite a lot of mud that wanted to settle with Fb advertisements, quite a lot of questions. I needed to focus elsewhere.”
“Elsewhere” for BK Magnificence is online marketing. He and I lately mentioned that channel — getting began, recruiting associates, assigning commissions, and extra.
Our total audio dialog is embedded beneath. The transcript is edited for readability and size.
Eric Bandholz: BK Beauty is among the few DTC corporations that wasn’t damage by iOS 14.5 and Fb advertisements.
Paul Jauregui: It didn’t have an effect on us. We scaled up Fb advertisements by March 2021 to roughly $50,000 a month. Then issues began getting rocky, and the reporting wasn’t giving me confidence. So we pulled the plug in late April.
Bandholz: Proper about when Apple launched iOS 14.5.
Jauregui: Sure. I discuss to quite a lot of owner-operators. There was quite a lot of mud that wanted to settle with Fb advertisements, quite a lot of questions. It was a distraction, and I needed to focus elsewhere.
Bandholz: Beardbrand had the identical downside. We reached roughly $120,000 a month in Fb advert spend through the summer season of 2021. We began trying on the numbers and realized we have been simply giving Zuckerberg cash with nothing in return. We ended up blowing a half-million {dollars} in 2021 in advertisements that didn’t drive gross sales.
Jauregui: We acquired prospects profitably by Fb before iOS 14.5, nevertheless it wasn’t the ROI we wanted. Plus, the shoppers coming in didn’t join with the model as a result of we have been targeted on chilly prospecting. Customer support emails have been ticking up.
Our return price has at all times been low — slightly below 2%. Nevertheless it began to creep up, too. There have been many indicators. They weren’t the best prospects I needed to be bringing into the fold. We had different alternatives — some model partnerships and product collaborations. Internet online affiliate marketing with content material creators on YouTube was our first flywheel and nonetheless is at the moment.
We’ll revisit paid social and paid acquisition, however not for now.
Bandholz: Many people thought we had to make use of paid social, however there are numerous methods to develop a enterprise. Inform us about your associates program.
Jauregui: We arrange an associates program fairly early. Right here’s the context. We launched the enterprise in August 2019. However earlier than that, my spouse had a well-liked YouTube channel round make-up and cosmetics for about eight years. She did model partnerships and included affiliate hyperlinks in her description field about merchandise she loves. So we had a great deal of perception into the mindset of content material creators and the way they function.
So my spouse had relationships with of us who supported the model and our launch. We opted to ship compensation to these supporters for the gross sales that they have been producing. That was the beginning of our associates program.
Many creators in our area of interest use rewardStyle, which is a sub-affiliate community. It’s now known as LTK. I didn’t know a lot concerning the house, however I knew I wanted to be on rewardStyle as a result of that’s the place the oldsters we needed to have interaction with have been working from. So I reached out to rewardStyle to get extra information. They pointed me to different affiliate networks that needed to be the first platform.
Sub-affiliate networks piggyback off of main platforms, equivalent to Shareasale, which is the one we’re on. CJ Affiliate, previously Fee Junction, is one other.
Bandholz: All of that’s complicated. Beardbrand simply launched an associates program utilizing AvantLink. How does a service provider discover the proper affiliate platform?
Jauregui: Affiliate networks and platforms deal with the again workplace and the transactional nature of a service provider and its associates with payouts, reporting, hyperlink monitoring, and related. I didn’t assume Shareasale would convey creators or relationships to us. Definitely rewardStyle and one other sub-affiliate in our class, MagicLinks, have applications to attach with influencers and creators. However we’ve got at all times sourced our personal associates. We attempt to develop genuine human relationships.
We do quite a lot of product seeding. We meet new content material creators, ship them our assortment, and difficulty a custom-branded 10% low cost code that they’ll share with their viewers. We’ve no expectations. As a rule, they use the product, adore it, and discuss it. After that, we introduce them to our associates program. We’ll point out, “By the way in which, we’ve got a 15% off fee by Shareasale and rewardStyle.” We are able to look of their YouTube description field and see what affiliate platforms they’re on.
Bandholz: So let’s discuss price. How a lot are these platforms taking? And the way a lot fee do the associates obtain? Do you provide them a reduction code for his or her viewers?
Jauregui: I’ll begin with the final one. Sure, we sometimes difficulty a ten% low cost code to the creators. For the platform price, I’ll break it out by working backward from Shareasale to us. In my expertise, most main platforms cost related quantities, though it’s typically calculated in another way. Shareasale takes a 20% reduce of payouts. And we’re working a 15% fee.
So on a $100 sale, $15 goes to the affiliate. And 20% of that — $3 — goes to Shareasale.
That mentioned, the sub-affiliate networks, rewardStyle and MagicLinks, take one other reduce of the creator’s payout. Creators who join immediately by Shareasale get the complete 15%. However creators who join by rewardStyle would obtain the web quantity — as a lot as 40% much less. Loads of creators aren’t conscious. Sub-affiliate networks take cash from associates, not the manufacturers.
Bandholz: Why pay a 15% fee plus a ten% coupon versus a 25% fee and no coupon?
Jauregui: We difficulty coupon codes for 10%. That’s our baseline. It offers the creators with a branded low cost code to entice their viewers. When it comes to the 15% fee, we needed to verify our content material creators are getting truthful compensation. They drive our enterprise. Fifteen p.c is an effective center floor when it comes to commissions.
Bandholz: What number of associates do you’ve got?
Jauregui: We now have over 100 of us who we work with or have some stage of engagement. Past 100, it’s troublesome to handle.
All are within the magnificence house. Many individuals, together with coupon websites, apply to our program immediately by Shareasale.
Bandholz: Coupon websites — they’re basically stealing cash from you. A buyer prepared to purchase will search on Google for a coupon.
Jauregui: Past that, they’re stealing cash from our content material creators and our associates. I sometimes don’t approve coupon websites. I’m very selective.
Bandholz: Many listeners are most likely on the fence about entering into online marketing. What are sensible expectations? How a lot enterprise can an associates program drive?
Jauregui: Each enterprise and class is exclusive. For us, associates drive 20% of gross sales, however I can see that rising. It’s quite a lot of buyer acquisition and lifelong worth. Many content material creators give attention to magnificence and make-up. It’s infinite.
We’ll attain out and have interaction and seed product to of us who possibly solely have 2,000 to five,000 subscribers. However our candy spot is 10,000 to 50,000. We are able to get an early begin with content material creators in that vary. We are able to are available in early, give them quite a lot of direct consideration, and assist develop their channel with commissions, product, and help.
Bandholz: How can listeners attain out to you?
Jauregui: Our web site is BKbeauty.com. I’m on Twitter and LinkedIn.
[ad_2]
Source link
