From Series A to Nine Figures: Leveraging Offer Testing for Ecommerce Growth

Cherene Aubert is the VP of Digital and Ecommerce at ILIA Beauty, an LA-based cosmetics brand, where she leads the charge in digital innovation and sales transformation. With a history of driving growth for over 100 DTC brands and managing nearly $300 million in media spend, Cherene's expertise spans from Series A startups to established companies post-acquisition. Her strategic mind was pivotal at Bobby, a DTC brand that soared to nine figures in revenue in just two years. Specializing in offer testing, Cherene's approach to marketing is data-driven, customer-focused, and geared toward maximizing ROI.

Here’s a glimpse of what you’ll learn:

• [2:48] Cherene Aubert discusses the concept of offer testing in ecommerce
• [6:20] Crafting the perfect entry-level offer for new customers
• [9:02] How refining offers can drastically reduce your customer acquisition cost (CAC)
• [12:13] How do you make the offer a compelling reason to purchase
• [15:16] Freebies versus discount: which is more effective for customer acquisition?
• [18:57] How to promote offers for maximum impact
• [20:00] Benefits of a systematic and prioritized approach to offer testing
• [21:26] The role of dedicated landing pages in driving offer conversions
• [23:05] Balancing profitability with customer acquisition costs

In this episode…

Are you looking to scale your online presence and sales but unsure where to start? What truly drives an ecommerce business from modest sales to astronomical revenue figures? What if the answer lies in the subtle art of offer testing?

Cherene Aubert, a veteran who has scaled over 100 DTC ecommerce businesses, delves deep into the strategy of offer testing. Cherene explains how an offer, not marketing alone, can dramatically slice through market noise, seizing customer interest like a magnet. From infant formula to beauty products, she illustrates how understanding customer psychology and crafting tailored entry-level offers can reduce acquisition costs and skyrocket sales. Cherene underscores the need for meticulous planning, cross-functional collaboration, and prioritizing testing within business operations, all woven together by her extensive experience and vivid real-world examples.

Tune in to this episode of Minds of Ecommerce as Raphael Paulin-Daigle welcomes Cherene Aubert, the VP of Digital and Ecommerce at ILIA Beauty, about leveraging offer testing strategies. Cherene uncovers the thought process and methods behind creating compelling offers that intrigue and convert new customers into loyal patrons. She dives into strategies for exponential growth and how to prioritize and systematically approach offer testing to find your winning formula.

Resources mentioned in this episode:

• Raphael Paulin-Daigle on LinkedIn | X
• SplitBase
• Cherene Aubert on LinkedIn | X
• ILIA Beauty
• “Scaling Celebrity-Backed Brands: The Chamberlain Coffee Success” with Chris Gallant, CEO of Chamberlain Coffee on Minds of Ecommerce

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Quotable Moments:

• "Offer testing is what you're offering your consumers when they get to your site."
• "The advertising wasn't driving the demand; it was the offer."
• "You have to understand how your customer makes a purchase."
• "In order for the business to work, AOV needs to go up, and subscriptions need to go up."
• "A good offer is the thing that will get them from, ‘I don't know if I'm going to purchase this’ to ‘I'm going to purchase.’"

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Action Steps:

1. Prioritize offer testing within your ecommerce strategy: This ensures that team members focus on unpacking customer psychology and helps identify the most compelling incentives for driving sales.
2. Define clear KPIs to evaluate the effectiveness of different offers: Tracking performance using predetermined metrics assists in making data-driven decisions and iterating offers accordingly.
3. Execute customer research and gather data through focus groups and surveys: This helps tailor the offers to the actual needs and preferences of the target audience, enhancing the likelihood of conversion.
4. Explore and test multiple offer frameworks before settling on the most effective one: Diversified testing over time (such as discounts versus gifts) reveals nuanced insights into what resonates best with customers.
5. Incorporate the winning offer across dedicated landing pages, ads, and follow-up communications: A unified and consistent promotional approach ensures maximum visibility and conversion potential for the tested and optimized offer.

Sponsor for this episode…

This episode is brought to you by SplitBase.

At SplitBase, we design, test, and manage high-converting landing pages and on-site experiences for fashion, luxury, and lifestyle ecommerce brands. Our optimization program pinpoints exactly where your store is losing money most, and then we help you fix that.

The result? Increased conversions and profits for our clients.

With our team of conversion optimization specialists, performance marketers, and conversion-focused designers, we've got your back when it comes to testing and optimization.

Request a proposal on SplitBase.com today, and learn how we can help you get the most out of your marketing spend.

You can find us on LinkedIn, Twitter, and Facebook. Don’t miss out on our exclusive podcasts at Minds of Ecommerce.

Episode Transcript

Intro  0:00  

Music.

Raphael Paulin-Daigle  0:06  

Welcome to the Minds of Ecommerce podcast where you'll learn one key strategy that made leading ecommerce companies grow exponentially. We cut the bullshit and keep the meat in a 15-minute episode. Founders and executives take us through a deep dive of a strategy. So you'll get to learn and grow your online sales. In the last episode, you heard from Chris Galant, CEO of Chamberlain Coffee, who shared thoughts and advice on scaling celebrity-backed brands. Now today on episode number 41 get ready because Cherene Aubert is VP of Digital and Ecommerce at Ilia beauty, and so far, she's driven growth for 100 plus direct-to-consumer businesses managed nearly $300 $300 million in media spend, and has been inside of organizations from series A to post-acquisition. And before ILIA Beauty, she was at Bobby a direct-to-consumer brand that achieved nine figures in two years and well, one of their best growth strategies was offer testing, and that's exactly what I want to talk about today. So I'm your host, Raphael Paulin-Diagle, and I'm the founder of SplitBase. This is Minds of Ecommerce. Now this episode is brought to you by well SplitBase. At SplitBase, we help lead consumer brands such as Dr Squatch high price and Amika AB test, design, build and manage high-converting landing pages in on site experiences. Now our optimization programs pinpoints exactly where your store is losing money most and then, well, we help you fix it. The result is obviously increased conversions, increased AOV, and improved marketing efficiency. With our team of conversion optimization specialists, performance marketers and conversion-focused designers, we've got your back when it comes to testing and optimization. So if that's something you need help with, well, request a proposal today on splitbase.com and you'll get to learn how we can help you get the most out of your marketing spin. All right. Cherene, welcome to the show. Thank you so much for being here.

Cherene Aubert  2:09  

Thank you so much for having me. Raphael,

Raphael Paulin-Daigle  2:11  

So as you know, this podcast is really all about going deep in one strategy, dissecting it so our listeners can get as much value as possible right away. We I really want to focus on your time at Bobby, because you shared with me earlier that one of the key strategies you guys have employed is offer testing. Now I'd love to dissect that, but I think maybe we should start with offering some context to the audience. One what is offer testing in your words? And two, why? Why? Why offer testing? Why was it so important to you guys?

Cherene Aubert  2:48  

Yeah, great questions. Offer testing in my words, is what you're offering your consumers when they get to your site. So you're doing all this amazing marketing. You're spending all this money to get them to your site. You get them there, and now you have an offering. And you know that could be your pricing, that could be discounts and incentives, that couldn't be can be how you're merchandising your products together. And I want to dive in a little bit deeper to give you more real world examples, because that sounds so broad when I was at Bobby It's an infant formula company. It was a duopoly. Similac and infamil were the two main companies in the duopoly, and one of them had a recall, and that caused demand to skyrocket for every other brand, because there's not, you know, infant formula manufacturing is not this boundless thing where you can keep just importing infant formula from China. It has like stringent procedures, and there's a limited supply. So when you have 80% of the market owned by two companies, and overnight, one of those companies goes down, all of a sudden, there's a whole bunch of demand and not that much supply. So when I was at Bobby We saw this massive explosion in demand, and we immediately knew that we were hitting we were going to hit a run rate where we would be out of supply very quickly. So we had to act fast, and we had to pull down every single marketing lever one at a time. And so we turned off our ads. We turned stopped doing partnerships, we even stopped our email automations. We stopped everything, and the demand kept coming. And we were like, What is going on? And there's one thing that we didn't stop, and it was our intro offer, our welcome offer for customers. And once we turned off that welcome offer, and I'll describe what it is shortly, we immediately saw the demand cut, I think it was like more than more than half. And we were like, Wow. It was like a light bulb moment went off. The advertising wasn't driving the demand. When you have that situation like that, where market dynamics are so. Powerful. You think that your marketing is what's driving your sales. It wasn't. It was the offer. And so we looked and we're like, yeah, it's so it was so interesting. The offer was a start, what we called a starter bundle or a trial. And it you have to think about it in the context of the industry and those consumers infant formula is not an impulse purchase, right? And it's a purchase that parents make very carefully and consciously for their babies, and they don't want to spend, you know, $200 in one shot buying 10 cans of infant formula. They want to try it and make sure that the baby actually can consume it and tolerate it and likes it. So we found out that, you know, we knew this about our customers, and we're like, let's have an introductory offer where we just give them a small volume bundled together just to get them in the door to try it. And that was our offer. That was our acquisition offer, and that was, like, one of the biggest growth drivers for the business, amazing. So on the flip side, like, when we were ready to come back after, you know, having been we ended up shutting down all acquisition for a time, and when we came back, that acquisition offer was where we put all of our focus when it came to growing the business again. Okay,

Raphael Paulin-Daigle  6:20  

that's really awesome. Now I think a lot of businesses are probably in a position where they could try that out. Now, just for a bit more context, Ed, Bobby, would you say that one of the objectives were subscriptions, and how you know, was the intro offer a subscription or really, just a one time purchase? Good question,

Cherene Aubert  6:40  

and Bobby is such a unique business case. So I mean, you may even be listening to this and thinking, Well, my business isn't in that situation. But Yes, Bobby, the majority of the business was subscription, and that introductory offer, I think for any other subscription business, like a supplement subscription or a hair care subscription. It would make sense for that welcome offer to be tied to the subscription, because that's typical, but because of the industry and because of the sensitive, sensitive nature of the consumer, which was, you know, a baby. The end user is a baby, we didn't force it into a subscription. We wanted to give parents the choice. So I think, like it as you're listening to this, every business has a different offer or a different introductory offer that is unique to them. Like, for a snack, snack business, it might be a snack sample pack, you know. Like, if you're selling a 20 case of chips, that's not going to be the first purchase that your customer makes, your customer might make a purchase on five different flavors of chips in one bag, so that they can try it and see which one they like better, and they can come back and repurchase at a higher volume. I think the same goes for you know, now I'm in the beauty industry, and we have a lot of bundles on our site to incentivize a higher AOV, but it wouldn't make sense for us to merchandise those bundles and present them as an offer for a first time customer, because it's high barrier to purchase they have to already trust the brand and want to Buy multiple products. A better introductory offer might be the you know, Hero product, with a free gift with purchase, or a mini sample, or some kind of introductory incentive to get someone through the door for the first time. And what we saw at Bobby When we started really focusing on offer testing, welcome offer testing was that we were able to drive down our CAC by I don't even remember the numbers anymore, but like more than double, we're able to increase our ROAs, like, by a very significant margin. And so we were paying less in advertising for every new customer because we were paying for them with this welcome offer.

Raphael Paulin-Daigle  9:02  

I really love how you mentioned that, you know, big bundles or subscriptions are not always the best welcome offer, even though it might be one of the biggest goals for the business. You know, running split base. You know, we're a CRO agency, so every single day, and a lot of what I believe in in testing is not moving buttons around. It's really like, let's test offers, let's test pricing. Let's test, you know, different bundles and things like that. And probably on a weekly basis, at least, I end up in those debates where the brand you know thinks that, you know, obviously subscriptions is their most important thing, and it might be one of the most important drivers of business for them. But you know, they're also trying to figure out new customer acquisition, and what they're doing is they're always just trying to force new customers into Subscriptions, which isn't always the best case. And it sounds like you agree,

Cherene Aubert  9:59

totally. Really, I think sometimes the business goal and the customer's goal are so misaligned because we're sitting there, we're looking at spreadsheets, and we're like, well, in order for the business to work, AOV needs to go up, and subscriptions needs to go up, and repeat, revenue needs to go up. So we think, let's put our highest AOV subscription offer in front of a new customer. Of course, they're gonna, you know, what? What are we doing wrong? Why isn't it working? You have to think about what the customer actually wants. And we did a lot of customer research. We did a lot of customer surveys. We did, you know, we were and we're a bigger business, so we started doing market studies. We even had little focus groups. Whatever size business you you are, you need to understand how your customer makes a purchase. Me as a consumer, very rarely would I immediately subscribe to a product that I've never tried before. I subscribe to a product and I tried a few times, I'm like, You know what? Like this, I'm gonna I want it to keep coming without me thinking of having to purchase it. Or there are consumers that are so bought into the brand, they're so sold on the brand's mission or the products or the ingredients or the value props, that they will be a first time subscriber, that their first purchase will be a subscription. But I want to say that's probably not the mass if you're looking for scale and volume, that's not the majority of people. I mean, just think about how you make purchases. It's not how a person makes purchases. They want to believe, you know, that they're a smart shopper. They want to believe that they're getting the best price, and they want to believe that they're doing the thing that's easiest and that's going to benefit their life the most. I think sometimes, if you have a subscription business, and you're running an offer on your first subscription order, it's really easy to get someone to come in, convert on that first subscription or offer, and then immediately churn, because they're like, Well, I got a good point off, yep. And I think, like a reframing of that same offer might be, instead of 50% off your first order. How do you get, you know, $100 off your first three orders, and so that way you're kind of like built building in some repeat purchase into the acquisition.

Raphael Paulin-Daigle  12:13  

Such great ideas. So many businesses are making their lives so much harder than it has to be by just being very stubborn with their subscriptions. What I'm wondering, though, is, you know, and this is a question I tend to get a lot as well from business owners, is, well, let's say you do create that introductory offer. Should it always be profitable? Or do you kind of bank on the fact that maybe, you know, X percentage of people will come back? And then you really look at your lifetime value, and you kind of build based on that. What are your thoughts on this? That's

Cherene Aubert  12:45  

a really good question. We so for that type of business, the LTV growth was just built into the business model. So you know, when you have a baby and the baby likes the formula, they're going to keep consuming the formula. So we had a really good data around our customer lifetime value, and we knew that for the people that the baby could tolerate the formula, they would stay with us for that whole year, and the baby would grow, and they would order more, and then they would have their second baby. So it was like an amazing business from a lifetime value perspective, and we knew we could actually pay for that customer, potentially at breakeven or a little bit of a loss on that first order, because we knew that we would make it up. Not every business is built like that. Some businesses may have, like, one and a half orders on average per customer. And for those businesses that need to be first order profitable. I think you really need to sit down and understand, like, what drives a profitable acquisition offer. It may not always be discount based, like, having a big discount can cut into your margins a lot more than having, say, like, a piece of merch. You know, like, what are the cogs on a piece of merch. Or what are product cogs on a product that you that is slow moving, or a sample, those cogs cost way less than taking a full price product and discounting it by 20% Yeah, I think a lot of businesses are kind of like stuck in this game where their first offer is 10% off when you give us your email and, you know, whatever. And everyone who does that, it's the person that's already decided that they're going to purchase. They're like, Okay, now that I know that I'm going to purchase, I'm going to give you my email address. But and a really good offer is the thing that will get them from I don't know if I'm going to purchase to now I now I'm going to purchase. I'll give an example in the beauty category. Please brand in our space that does a free makeup bag with your first order. And people love it, because they feel like, well, why would I buy from this brand? I've never tried. I've never heard of them. Well, they're giving me something, so I'm going to give them something. Gonna give them my purchase. You know, it's worth me trying it, because I'm getting something in return, and that's a completely different offer than the one I just talked about with this trial infant formula. So I think it really you need to sit down and think about your consumer and what they are looking for when they're making a purchase.

Raphael Paulin-Daigle  15:16  

Amazing example. Now I can think of like, you know, people listening to this and saying, Okay, well, me, it sounds easy. We pick a product, we create an offer, maybe we just give a gift with purchase, and that's it. But realistically, like, you know, how many tests Did you guys have to conduct until you found the right offer? How long does it take to find the right offer? And maybe even if we kind of backtrack, like, how do you even start with finding what you should offer. Is there, like a golden rule in terms of AOV, in terms of, I don't know You

Cherene Aubert  15:48  

and you, you're uncovering something big here, because it's way easier said than done. And at a company like Bobby, we had resources, we had people, we had funding. Not every business is like that, but to give you insight, we really sat down for probably about, I want to say, six months straight. And every week we met, and we had a cross functional team meeting between, you know, like product, our product digital product team, our growth team, and even executives in the biz finance like we were all kind of like we made it a priority. We said we're going to make testing a priority for the business, and we want to do it in a way where it's financially responsible. It makes sense for the customer. We can implement it on site, and we can implement it on ads, and every time we launched an offer, we would, we would have, like, the whole Offer Funnel kind of ready to go, because we took it so seriously. So it was almost like six months of weekly. We were looking at weekly. We had defined our KPIs that would help us make decisions about what we needed to do for offer. And I want to say, like, every two weeks to every month, we would launch a new offer test until we found the winning offer that really, I want to say, like we were we, we probably were able to double our monthly customer acquisition when we found that winning offer. And we tried a lot of them. And so I think, you know, it's like, you have to prioritize it. In your business, you have to say it's a priority. I think we had, like, our CEO knew how much of a priority it was our you know, head of finance knew, and we all sat there and made it a priority. I think, in a business that that maybe, maybe has fewer team members, and there's a lot going on, and everyone's wearing many hats. How do you do that same way? You still have to make it a priority. You have to invest in it, because there is going to be a return on that investment. And I think it's as simple as even coming up with a roadmap, like, if you don't have a project management system today, use a spreadsheet. Come up with a testing roadmap, come up with your ideas for what offers you think will resonate with your customers, and then we would rank score them. We would use the ice framework, which was impact confidence and ease. Really simple framework. You You can Google it, but essentially it was like, how impactful Do we believe this is going to be? What is the confidence that we have that it will be as impactful as we think it will be, and how easy is it to implement? And whatever had a higher score, we would do first, and we would kind of talk about, how are we going to implement this? And then we would just go do it. I think for smaller teams, you have the flexibility to just act very quickly. But I would still say, even if you're a small team, create a prioritized list of your offer ideas, and then try to get through that list based on the hypotheses you have, and then keep track of the results of those tests. And then then you can like up your offer testing game.

Raphael Paulin-Daigle  18:57

I love it now. I think this is a really good reminder for the audience, right? Like, I think most people who are listening to this probably want to scale fast. And let's remind people that Bobby is a brand that scaled to nine figures in two years. So if we want to talk about fast growth, this is it yet. There's nothing fast about figuring out the right offer for a business you're telling me it took about six months when you have already a lot of resources, including money, funding team and so on, right? So I think we also have to make sure that and remind ourselves to be realistic, right? So brands listening to this, right? If you try it for a month or two months and you're kind of disappointed that you don't yet have your offer, it probably takes longer, right? It's a bit like I always see it, like SEO or content marketing. I mean, this is conversion optimization at the end of the day, right? Weird name for offer testing, I feel, but that it is definitely part of CRO and you get most value when you do it consistently, learn from every test, and eventually you kind of find your gold mine. 100%

Cherene Aubert  20:00  

and so often, it could be reframing an offer that you already have like but you know, there's a few different ways to say the same thing. You can say, let's say something is 30% off. You can also say, Buy one, get one 50% off. Or you can say, you know, there were tests that we ran where we were trying to figure out is free shipping more impactful or a bigger discount more impactful? And we one of the things that we learned was, well, people don't even see the value of the shipping until they're in the cart, so we're kind of hiding the offer. And if we just add paid shipping, and then make the discount bigger. Like, let's test those two things against each other, and the net net revenue is going to be the same. So I think there's so many of these, just like reframing and repositioning existing offers that you might have on site.

Raphael Paulin-Daigle  20:55  

Amazing. Now we're almost out of time, but I think one thing important that our, you know, audience should know about is, is, how do you even promote that offer? Right? Like, the goal, obviously, for this is to facilitate new paid customer acquisition. But is it just, you know, like a banner on top of a product page? Do you send people to the homepage and have banners there, or do you have more focused landing pages or something else? What have you found has been most successful, and maybe it also varies from business to business, but love to hear, yeah, great

Cherene Aubert  21:26  

question. I would say, if you're resource constrained and you want to get quick learnings, if there's a way to just update your ad content and have the offer, you know live on site somewhere like if you want to do an offer and you wanted it to be based on a coupon code, and you wanted to just get quick learnings, like you could do that in ads, but ideally you have, you know, and what we saw work really well is a dedicated landing page for that offer, ads for that offer. And, you know, the post offer communications, email and SMS communications, that's what we saw work the best. And then we would also, you know, do the same thing. Is like, let's say you have a you want to get quick results. You can just turn that offer into an email and get, you know, there's, it's, that's the beauty of D to C, you can get instantaneous results. And I think, you know, the tooling is, is changing a lot. So at the time that we were doing this, it was a lot harder to do price-based offer testing. We had to, kind of like do one at a time and then match the metric, you know, over time. And so I think there's a there's probably a lot more sophisticated tooling to do price-based offer testing,

Raphael Paulin-Daigle  22:35

Yeah, intelligence, visuals, and, to some extent, rebuy as well. They're all great tools for anyone wondering, um, awesome. Well, we've been talking to Cherene Aubert. Now, Cherene, if people want to learn more about you, follow you learn more. You know where should they go?

Cherene Aubert  22:53  

You can find me on Twitter, that's probably where my spiciest takes are @chereneaubert. Or you can find me on LinkedIn. That's where my more professional takes are. But thank you so much for having me.

Raphael Paulin-Daigle  23:05  

I love it. Cherene, it was a pleasure. And have an amazing day. You too. All right, well, that's it for today's episode, and thank you so much for tuning in now, if you like what you've heard and you don't want to miss any of the new episodes that are about to come out. Make sure you subscribe to the podcast and well, bonus points if you also leave a review in the iTunes Store or wherever you're listening to this. Now, if you're working on an ecommerce tour that does over a million dollars in revenue, and you need help with conversion optimization or landing pages, well, I've got some good news, because there's a pretty good chance we can help with that. Go to splitbase.com to learn more, or even to request a proposal. If you have any guest requests, questions or comments, tweet me @Rpaulindaigle, and I'll be super happy to hear from you and again, thanks again for listening. This is Minds of Ecommerce.

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