Case: development and launch of a subscribe-product in Ukraine

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Penguin-team, together with the organic cosmetics manufacturer TOUCH, launched a joint project – WOW! TOUCH. What came of it, how we managed to stay afloat and what we are now ashamed of – in a detailed case with all the internal kitchen.

Introductory data

WOW! TOUCH — it is beauty boxes with natural cosmetics of Ukrainian production;
product distribution format — subscription boxes 6 times a year (4 seasonal + 2 holiday);
created on the basis of the TOUCH brand for the production and retailing of the same cosmetics;
the review period in the case is 7 months.

Work plan

Develop a product concept and launch strategy.
Create a website.
Think over the sales funnel, sales and marketing strategy.
Form a go-to-market strategy: distribution methods and sales mechanics.
Plan project implementation and optimization based on the PDCA cycle.
Launch paid advertising and start!

Preparatory stage

I. Concept

TOUCH had several different personal care products: scrubs, creams, masks and bath salts. All products were united by one goal – comprehensive self-care. But they were sold separately in a small online store www.scrubt.com.

The classic e-commerce model of an online store was not suitable for competing with large brands: taking any significant position in such conditions would cost irrationally large budgets and difficulties.

The solution is a subscribe project with beauty boxes. This format qualitatively develops the market and meets the needs of the client segment. This is a win-win for business and the audience: systematic purchases cover the needs of people for regularly used goods and gain a regular audience of customers from the business. A subscription simplifies the purchase for the user and reduces transaction costs. Ultimately, the company has more resources to invest in the product.

Example for inspiration — dollarshaveclub.com:

the first subcribe product on the market worth more than $1 billion;
founded in 2012;
turnover – 250 million dollars a year;
occupies 51% of the online razor blade market in the US, outpacing P&G online with their 70-year history of success.

We also analyzed the Ukrainian market of subcribe products, highlighted our competitive advantages and important aspects of competitors.

II. Website

During the development of the site, it immediately became clear that it was pointless to make a classic project, because there are already aggregators and online stores. Aggregators are a big budget and a promoted platform that is easy to enter for retail sales (as the client did before starting cooperation). We don’t have enough strength to create our own aggregator yet 🙂

For an online store, you need an assortment that there is no TOUCH (the brand had 9 items at the beginning of cooperation), plus classic stores have limited potential. Large aggregators will gradually crowd out small stores.

As a result, we settled on a landing page with a simple and stylish design for a presentation + a modern personal account for subscribing and tracking client performances.

III. Sales strategy

When forming the sales funnel and website, developers, designers and marketers worked together so that the marketing strategy was directly embodied in the layout and qualitatively raised the level of the project.

The sales process itself is structured as follows:

The client fills out a questionnaire: indicates age, skin type, allergies, color type and other information in order to reduce the risk of receiving inappropriate products.
To go to the next stage, you need to specify an e-mail and a name – the test is the beginning of registration on the site.
After registration, a personal account is created where you can purchase a test beauty box without linking a card or link a card and subscribe to regular sending of boxes.

In Penguin-team, during the development of the strategy, we relied on two facts: the market’s need for new formats and the unpreparedness of the audience for these new formats. This meant that the team faced an ambitious task: to make a website that would introduce the audience to a fundamentally new product, and at the same time make it simple, stylish and easily perceived.

That’s how we did it:

№1. Stage Awareness (customer awareness) – the first screen of the website.

Traffic comes from advertising campaigns:

→ the user is interested in the new service and brand

→ went to the website

→ the videophone tells about the essence of the project, the phrase over the background lists the benefits

→ button with CTA offers to fill out a questionnaire

→ the user is involved in the project

Purpose: to motivate the beginning of filling out the questionnaire.

№2. Consideration stage (customer awareness (Lead)) – registration form.

The traffic comes from the section above, ad campaigns with remarketing and email:

→ the user has filled out the questionnaire

→ to get the results, you need to leave your email and fill out the registration form

→ if the user did not fill it out for the first time, then remarketing campaigns work for him

Purpose: to encourage to register and leave an e-mail.

№3. Intent (intention to make a purchase) — personal account or tariff selection page.

Traffic comes from the section above, remarketing and email:

→ the user gets to the tariff selection page (subscribe or buy a one-time test box)

→ if he is not ready to make a choice, he goes to his personal account for information about the delivery date, the production status of the beauty box and other information

→ from your personal account you can return to the choice of a test package or subscription

Purpose: to place an order.

№4. Purchase (order) – payment page.

Traffic from the section above, from remarketing and email:

→ the user has chosen a test box or decided to subscribe

→ went to the payment page and easily understood how to do it

→ if you have not paid, we remind you with the help of a remarketing campaign and e-mails.

Purpose: tie a card or buy a test box.

This structure allows to work more efficiently, promoting users through each stage using different tools: email, remarketing, etc.

Launching to the market

I. Strategy

To output WOW! TOUCH to the market Penguin-team acted according to the following strategy:

since when a user gets to the website, the user automatically enters the funnel, the task of all advertising campaigns is not just to introduce the brand on third-party websites, but to lead everyone to the website;
the user on the site immediately receives an offer to take a short test and choose the right cosmetics, this test is registration – we expected to get 50% of commercial traffic from it (spoiler: we didn’t get it);
to drive traffic to the website, an omnichannel strategy is needed using paid advertising Ads in search and display networks, Facebook, work with opinion leaders – and marketers have developed a multifaceted and multichannel strategy;
the first stage of bringing to the market is the fulfillment of the norm of 50 boxes.

II. Planning

We divided the work on the implementation and optimization of the project into sprints and built it on the basis of the Shewhart-Deming theory according to the PDCA cycle:

planning (Plan);
implementation of tasks (Do);
verification and analysis of results (Check);
action, elimination of errors (Action) – and further repetition of the cycle.

In this way, we could start bringing the product to the market without dragging out the terms for “polishing” the product / site / processes, but at the same time gradually improve the entire work cycle.

III. Marketing

The main emphasis in the advertising strategy was on Google Ads: according to our forecasts, it was PPC advertising that would bring the largest flow of traffic.

The entire marketing strategy was divided into 2 directions:

several “hype” (temporary) advertising campaigns: for acquaintance, with a New Year’s offer, for the formation of recognition, for March 8, an interview with a beautician, etc. The purpose of temporary advertising campaigns: to build communication with the audience around temporary hype topics;
“stable” (permanent) advertising campaigns that work forever. The goal of stable ads is to work with commercial traffic, increase company awareness, funnel remarketing.

Temporary advertising campaigns included 4 directions:

№1. Acquaintance: PPC campaign in Display Network Ads “What is WOW! TOUCH?”.

Goal: sowing + opening a new company.

⏱ 10 days

💰 12% advertising budget

👩 25-40 years

📈 3 000-3 200 clicks

Its goal is to introduce the brand to the general public, create buzz and get the maximum number of clicks at the lowest cost. As soon as users get to the website, they automatically fall into the sales funnel.

For the campaign, designers have developed minimalistic and attention-grabbing banners with the brand’s beauty boxes.

First there was a teaser advertisement “Do you already know what WOW is! TOUCH?”

After it, there were static and dynamic banners that talked about the beauty box and its benefits:

№2. Seasonal offer: Ads video ads for the New Year.

Collected remarketing lists for those who watched the video on the YouTube channel WOW! TOUCH.

Purpose: to stimulate the transition to the website and getting into the sales funnel under the New Year theme.

⏱ 10 days

💰 15% advertising budget

👩 25-40 years

📈 maximum reach

🔧 broad interest tuning for minimal cost per view

For the campaign, videos were shot with the video production studio Hunky Production: 1 full and 1 short, up to 30 seconds.

№3. Working with influencers through Instagram bloggers is a native advertisement with a beauty box review from a well-known person.

💰 10% advertising budget

№4. Popularization and disclosure of the essence of the project in the second campaign in the Display Network is a continuation of the first campaign “What is WOW! TOUCH?”.

💰 30% advertising budget

📈 4 000 cliks

Stable advertising in Google Ads included 3 PPC campaigns in the search engine: for branded, non-branded and queries for competitors.

💰 15% advertising budget

As well as funnel remarketing campaigns targeting those who watched the filmed and edited promo video on the WOW! TOUCH on YouTube.

💰 18% advertising budget

Together, their goal is to collect warm traffic without interruption and convert it into customers in order to fulfill the sales plan.

Results

* General analysis made for 7 months of work; detailing – for the first 4 months of work: the results of work for the last 3 months are a trade secret and partially have a delayed effect, and therefore are not yet ready for analysis.

I. Product

The main insight after sending the first batch: people are not ready for the Subscribe model

The Ukrainian market has a different culture of consumption, which does not yet include the automation of purchases. That is, few people are ready to tie their card right away – and they did not tie it up the way we expected. It was a fakap.

✔At the start, we fulfilled the plan of 50 sales by introducing the possibility of a test purchase of one box into the subscribe format. It was a victory.

Conclusion: to automate the process, you need your own community, work with the database of existing customers manually, an advertising campaign to increase customer confidence. These are long-term goals and objectives, but they will modernize the Ukrainian market.

Х Marketers predicted the filling of the questionnaire at the first stage – 50% of users from commercial traffic. According to the results of the first PDCA cycle, this figure reached only 20%.

✔ The results grew after the Check/Act stages of the site refinement: a new video was added to the main screen, which improved the performance.

II. Website

In the original form, for ordering on the website, it was necessary to link a card for automatic payment, as in the classic subscribe format. According to our forecasts, this would immediately stimulate the audience to switch to a new format.

At the first PDCA cycle, at the analysis stage, we realized that this prediction was not justified.

✔ After the Check-stage, we introduced a cash on delivery system – we increased the conversion rate and reached operating profit.

✔ We simplified the mobile version for fast loading – the share of mobile users is 67%.

III. Work organization

From the beginning of cooperation for 4 months WOW! TOUCH received 1711 leads. According to our forecasts, project managers would take their applications and convert them into real purchases.

Х Only 25% of applications were actually converted into buyers due to overload of managers.

The main fakup in organizational activity in the first 5 months: we launched advertising campaigns and forgot about risk management. Plan lead processing? Yes, why, everything will work for us! Coordinate with the rest of the team? We’ve got it all figured out!

Of course we burned out.

A sharp influx of leads from advertising created a blockage for all employees and filled up processes.

How did we get out:

✔ At the next Check-Act stages, we introduced the work of a call center – this increased the indicator by 29%.

✔ After reaching 36% of the processing of applications, we reached the level of operating payback

✔ To our surprise, large purchases of boxes are made by corporate clients for their employees. Originally WOW! TOUCH did not even consider other companies as a segment of the target audience. About 20% of sales came from corporate clients.

IV. Marketing

Strategy

When launching paid advertising, we relied on 3 channels at once – search campaigns and campaigns in the Display Network and YouTube, but did not forget about multi-channel, attracting people through opinion leaders, email newsletters and more.

✔ The unique Ads strategy, combining several advertising campaigns, made it possible to interest the market in the new format and warm up the interest of the audience, having collected 1014 applications from scratch.

Search Ads

Search advertising showed excellent results, providing ⅓ of traffic on the website (including non-commercial). And this traffic is warm. The main thing:

11,737 clicks;
CTR 15.28%;
CPC 2.12 UAH;
conversions 2,159 in total (passed the test and left an e-mail);
conversion rate 19%.

✔ Search campaigns bring 57.8% of completed questionnaires (stages 1-2 of the funnel).

Video Ads

Video ads performed well:

386,317 total views;
View rate 43.93%;
CPV 0.06 грн;
282 conversions (passed the test and left an e-mail);
conversion rate 0.07%.

Banner ads in Display Network Ads

45,308 total clicks; 6,473 clicks/month;
CTR 0.77%;
CPC 0.80 грн;
326 conversions;
conversion rate 0.72%.

Х The first campaigns on the Display Network showed lower results than expected due to the complexity of the product and the coldness of the audience.

Other advertising channels

✔ Organic search provides 2% of website conversions. At the same time, such traffic has a 50% lower bounce rate, and a conversion rate of 13% – only a few percent lower than search PPC campaigns (17%). The team predicts an increase in organic traffic in the coming period.

✔ Work with bloggers gave a good response. An unexpected insight: according to our plan, well-known bloggers with higher pay were supposed to attract more customers and audiences. But in fact, more applications were brought by placement with those bloggers who did the review for free, for samples.

✔ YouTube is doing great, bringing in 26% of the total Social traffic and providing 24% of completed questionnaires that managers convert into orders!

? Facebook targeting works at an average level.

? Email marketing works at the middle level; have not tried Viber and SMS messaging.

For 7 months from the start, the product WOW! TOUCH is at the stage of entering the market. The purpose of this stage is to adjust the overall product development strategy based on real market situations.

Here’s what we’ve achieved:

748

boxes sold all time

buyers per month

11,000 $

received income

months – operating payback

assortment has doubled

What’s next

Our next step is to develop the service products, add new features (purchase of coupons, gift certificates) and increase the range of cosmetic products (+3 new products have already been released in the summer collection).

Summarizing

What we understood:

it is impossible to predict what no one has done;
however, you still need to predict everything and always: this way you can compare expectations-reality in numbers and operate with specifics in future work;
if something works in the West, this does not mean that it will work in the CIS. The mentality decides;
when promoting new products, maximum interaction with the audience is important, so advertising on YouTube turned out to be one of the most effective: it provides the most opportunities to contact people.

All the fun is just beginning!

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