Last week, Western Wise CEO Will Watters caused a stir on LinkedIn with his post that his brand had turned off Meta ads to preserve cash.
Instead of just preserving cash, however, Western Rise grew on the back of organic content. It doubled its revenue over January 2023 via 40% higher AOV and a 4% conversion rate. 56% of the revenue came from returning customers, Watters said, but he didn’t share how the brand’s revenue typically splits between new versus returning customers.
If you’ve read this newsletter for awhile, you’re likely familiar with our challenge that there is growth outside of Meta. (So, score one for the newsletter narrative.)
With that, though, it’s worth a few words on why, perhaps, Western Wise was able to pull this off when others haven’t.
Four years ago, we talked to a founder who had turned Meta ads off during the George Floyd protests, trying to be more socially responsible with where his money went. Within a week, this founders social responsibility was out the window, and Meta ads were back on.
Sales had stopped and he hadn’t considered what the alternative means to growth were.
Western Rise, from our vantage point, had an advantage that founder didn’t have: they had already started laying the foundations of a more brand-led approach to growth by publishing narrative-rich newsletters and other non-direct response content for more than two years.
The DTC space talks a lot about building brand, what “brand” means, and when it’s the right time to invest there. But by and large, DTC is not a brand space. It is a direct-response space with good branding.
The challenging thing about this is that direct response works—and often works so well—that you don’t need to do anything else until you do reach a certain scale. It’s a more than valid approach to building a business.
Yet it is not as valid an approach to building a brand.
Direct-response advertising in our algorithmic world means that sales efficiency will be prioritized over all else. It answers the question “which segment of this audience is most likely to buy right now?” It does not answer the question “which segment of this audience is most likely to buy this brand over the long term?”
At Repeat, we have seen this in brand data.
Over the years, we have had customers who have turned off their Meta spend. When they do, their cohorted retention metrics improve dramatically—and do so from every angle you might imagine. Their new customer count, though, often drops sharply.
The takeaway, it seems, is that other channels may not have the raw reach and ability to convert customers, but they are far better at creating longer-term customers.
The consensus answer in DTC to date has been to put the onus of creating longer-term customers on retention marketing. That the job of getting a second purchase starts when the first purchase happens.
What the Western Rise story shows, however, is that the job of getting the second purchase starts far before the first purchase occurs.
"The DTC space talks a lot about building brand, what “brand” means, and when it’s the right time to invest there. But by and large, DTC is not a brand space. It is a direct-response space with good branding."
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