Sourse Case Study: Value-prop A/B testing and a 39% conversion rate
Value-prop A/B Testing
When exploring pilots with new brands, the primary strategic approach we recommend is to set up a simple, but robust A/B test in the pilot campaign. You can test anything, ranging from messaging to discount type to audience segment, which often becomes multivariate testing when considering more than just two segments. However, I’ve recently seen the most success by keeping it straightforward, testing the two biggest brand/product value propositions in an A/B test. For Sourse, this is exactly what we did. Two of the biggest benefits of their vitamin B12-infused “Hype” chocolate bites are related to health (because of the vitamins) and taste (because of the chocolate). What we didn’t know is which one resonated more with Sourse’s audience. So we tested it.
By The Numbers
The value prop A/B test discussed above is just the icing on the cake. Yes, it matters and robust A/B testing like this is extremely valuable not only to optimize ad campaigns, but also to iterate and improve overall marketing/brand strategy and positioning. However, at the beginning and end of the day, your marketing needs to perform. Thus far (since the end of September 2020), we are performing at 3.4X ROI. In other words, we are helping to generate more than 3 times the value per customer than we are paying to acquire that new customer for Sourse. As explained in our Loco Coffee case study, Lifetime Value (LTV) and ROI are more important metrics to track than pure ROAS, since the former accounts for the lifetime of an average customer, whereas ROAS does not. Thus, even though we are not immediately profitable when acquiring new customers (0.94X ROAS), we more than make up for it in LTV with repeat purchases.
Even more telling than the LTV, perhaps, is the performance of this campaign compared to previous campaigns that Sourse ran with a different agency. Our ads performed at a 60% better cost-per-acquisition (CPA)-- which, to be clear, in this case refers to paying customer acquisition (and not merely email acquisition). The whopping 39% conversion rate is 4.5X better (+352%) than the previous overall conversion rate before we launched our ads. This massive performance improvement can be explained primarily by the addition of authentic user-generated content into the ads, and is testament to the trust instilled in the target customer prospect from the testimonial ads, which are then validated by the abundant positive text reviews on Sourse’s website. Oh and by the way, curious to know which value proposition won the A/B test described above? Get in touch!
“In just one month our results were improved significantly, giving us comfort to scale up our spend. The process to design the campaign, set up the A/B test, and then analyze the results was very easy and straightforward for us. This is the best experience I've ever had with a marketing partner for our company!”
- Jenne Moore, Founder and CEO at Sourse
