Summary
When the average price of your products is $12 and your typical cost per acquisition is $25, getting the math to add up for social media ads post-iOS14 means getting creative. Using a “codeless” auto-applied discount campaign, N/A Stock Company was able to:
- Cut its cost per acquisition by up to 44% for TikTok ads
- Achieve up to 22% lower cost-per-click with calls to action for an “instant discount”
- Use a 15% discount to bring more new customers to their store and then increase AOV by upselling later on in the customer journey
“Running ads today for us is a lot different from before. Before it was a $2 to $5 ROAS. Now it’s probably around $20 to $25 cost per acquisition.”
Adam Libunao, co-founder of N/A Stock Company, like many ecommerce merchants, is feeling the pressure from smaller retargeting audiences, gaps in paid channel attribution, and fewer data signals for advertising algorithms to learn from ever since iOS 14.
But as an anime-inspired keychain accessories business, it’s been especially difficult after Facebook advertising costs exploded.
“We sell small-ticket products,” Adam says. “Our average product is probably $12. So for us to sell one product, we’d most likely take a loss on the ad campaign.”
There’s no getting away from paid social, so how can you make the most of your ad spend?
Like many Shopify merchants, N/A Stock Company has started to explore other organic marketing channels with some success:
- Listing their products on Etsy to tap into niche searches on the popular marketplace
- Creating Instagram reels with product tags (some of their more popular reels have over 40k views)
- Posting regular TikToks featuring their most buzz-worthy accessories
But there’s no getting away from social media ads as a fast, consistent, measurable channel for new customer acquisition. “It’s hard to go viral on Instagram or TikTok. No matter what people say,” Adam jokes.
To adapt, the business has shifted its key performance indicators towards:
- Increasing average order value on the first purchase by using an “add more, save more” approach to upselling within their cart **
- Nurturing current customers into repeat customers with new product drops at least twice a month
Adam has also found strong product-channel fit with TikTok’s anime fans through a mix of organic and paid marketing.
The question remained: How can you make the most of your social media ad spend?
Running a “codeless” discount campaign to slash cost per acquisition
The answer, Adam found, was running TikTok ads focused on converting customers on the first visit with a discount code as the hook—then upselling after.
The problem was getting customers to enter the discount code at checkout, which was exasperated by the fact that TikTok is a mobile-first channel.
“What was the discount code again? What products does it apply to? What’s the price after the discount?”
There were just too many questions creating opportunities for customers to drop off. Adam was open to a better way to run discount campaigns when he was introduced to auto-applied discounts through Abra.
Abra allowed him to create unique links for each campaign for a more consistent experience that eliminated those questions that added friction on the path to purchase.
“When I started using Abra—and obviously it matters whether it’s a good ad or bad ad—but when it was a good ad, I was able to get [cost per acquisition] down to around $14.”
—Adam Libunao, co-founder at N/A Stock Company
Adam ran a few A/B tests on TikTok to see if auto-applied discounts were more effective than discount codes. In one test, he was able to cut the cost per acquisition almost in half:
A: Manual discount code.
- Call to action: “Save 15% off your first order with code TIKTOK15”
- Cost per acquisition: $21.66
B: Auto-applied discount link.
- Call to action: “Instantly save 15% now”
- Cost per acquisition: $12.19
Adam says auto-applied discounts through the Abra Shopify app have improved top-of-funnel conversions for N/A Stock Company. “Abra was the starting point of the customer journey to initiate that first transaction at a discount, then we could stack discounts through another app, allowing customers to add more and more to their cart. Our average order values actually ended up being quite high on the first purchase.”
Adam says the auto-applied discounts were one factor, but the other was the ability to personalize the experience for each magic link. “There’s this one feature in Abra where you have a banner that shows up at the bottom to validate that the discount is applied. But you can actually personalize the banner itself. So if they were from TikTok, I would put in a personalized message like, ‘Hey, it looks like you came from TikTok.’”
Adam says he plans to experiment more with auto-applied discount links in customer retention campaigns, and other paid channels where he’s used discounts in the past, like influencer marketing.
“I feel like discounts, the way that they are now, can be better. And I think Abra is a really good step towards making them better.”
—Adam Libunao, Co-founder of N/A Stock Company
Install today to learn what Abra Auto-Applied Discounts can do for your Shopify store.
