Why D2C Brands Need To Integrate LTV Into Their Product Launch Strategy

Why D2C Brands Need To Integrate LTV Into Their Product Launch Strategy


Many D2C founders overlook the importance of setting LTV targets, leading to frustration and uncertainty when their product launches fail to meet expectations

Integrating LTV into business modelling and product launches is crucial for success

Clear success metrics and understanding your numbers are crucial before testing products. Without progress indicators, it's challenging to assess progress and product viability

While working at Meduit, I have met many early to mid-stage D2C founders who invest time and resources into product launches, only to realise months later that they fail to meet their LTV (Lifetime Value) targets. Sometimes they don’t even have any LTV targets. This often results in frustration and uncertainty. 

One effective method to tackle this crucial challenge involves utilizing a strategic approach to Facebook ads. I strongly advocate for integrating LTV into the initial business modelling and product launch process.

Let’s address the elephant in the room: How much are you willing to lose to determine whether a product is worth pursuing based on its LTV? Defining success and knowing your numbers are crucial before embarking on product testing via Facebook ads. Without clear progress indicators, you’ll be shooting in the dark, unsure if you’re making any headway.

Strategise Your Product Launch

To ensure you set off on the right track, it’s essential to define your strategy for each new product launch. Begin by auditing your previous launches, and carefully examining the customer experience associated with each specific product. Understand what your target audience expects from your new offering and analyse the landing page experience to pinpoint areas for improvement.

But don’t stop there — take the opportunity to test your competitors’ funnels. If your product is similar to or competes with a rival, dive into their ads, become their customer, and document the entire customer experience. This exercise will provide valuable insights and allow you to replicate successful strategies while adding a unique touch that distinguishes your brand.

Aligning Your Strategy With Product Launch Objectives

Now, let’s focus on your business objectives. When validating a new product on Facebook, your primary objective is to test its conversion potential among a cold audience. Allocate a specific percentage of your budget to this test, keeping in mind that you should already have a control campaign generating consistent results. It’s crucial to have a stable revenue stream while exploring new product opportunities.

Before launching, ask yourself some key questions:

  • Is the product the right market fit?
  • Have I tested it on a hot audience that knows my brand?
  • Is there a demand for this product?
  • What are my competitors offering?
  • How much can I invest in validating this product?
  • What is my allowable cost per new client?
  • Do I have a backend strategy to engage clients who didn’t purchase this product initially?

With answers to these questions, you can dive into thorough market research. Utilise platforms such as Answer the Public, Adspy, Facebook Ads Library and Quora. You can even leverage insights from your current customers. This research will guide your advertising approach and ensure it resonates with your target audience.

Building A Solid Foundation: A Structured Approach To Product Validation

When it comes to Facebook ad campaigns, a structured approach is essential. Break down each ad into three elements: primary text, headline, and creative. Test each element individually through a brand awareness campaign, with around 30 different ad variations. By treating each ad as a unique entity and setting a threshold of 5,000 impressions, you can streamline the testing process and focus on the most promising assets.

Once the initial test is complete, move into a conversion campaign. Identify the highest-performing assets and integrate them into a dynamic creative testing campaign. Through this process, you’ll pinpoint the winning combination that outperforms the rest — a proper validation of your product’s potential.

Conduct thorough market research and gather insights from competitors, online opinions, and customer preferences to enhance your creative approach. Create 10 different creatives for the same product and filter out the winners based on their performance.

Lastly, never overlook Facebook’s compliance rules. Adhere to their guidelines to avoid ad account bans that could hinder your testing efforts. If you encounter any issues, promptly reach out to Facebook support for assistance.

Note: The views and opinions expressed are solely those of the author and does not necessarily reflect the views held by Inc42, its creators or employees. Inc42 is not responsible for the accuracy of any of the information supplied by guest bloggers.

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