Marketing Case Study

How a Subscription Brand Increased

CLV 73% by Optimizing Promo Codes

73%

Increase in CLV

24%

Increase in AOV

50%

Increase in Retention rate

The Challenge

A Subscription brand was having trouble understanding why their Customer Lifetime Value was lower across campaigns where they had the greatest Return on Ad Spend. The campaigns driving the highest volume of acquisition didn’t seem to be delivering the quality of customer needed to remain profitable.

Increase in CLV
Increase in AOV
Increase in Retention Rate

the outcome

After working with the merchant, we quickly realized that they were investing ad spend based upon top line Custom Acquisition Cost (CAC) metrics, but no looking at the long term user behavior. After leveraging Sublytics’ insights, we were able to determine that their deep promotion offering 50% off the first box, led to high volume and low Customer Acquisition Cost (CAC); however, the customers quickly churned, resulting in unprofitable ad spend.

With these insights, the merchant split tested new promotional strategies to determine the sweet spot for driving high converting traffic that was truly aligned with their product value prop. This new promotional strategy led to an increased retention rate and CLV. With access to real-time user behavior data, they determined the discount range that was competitive enough to incentivize qualified target customers to convert, while not diminishing their brand and profit margins. This new promotional strategy lead to an increased retention rate and CLV, as their customers were more aligned with the brand’s core value proposition and less focused on deal-seekers.

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