📦 - Capitalize on the ‘Refund Effect’ Post-Holidays

Social Proof Marketing, The Refund Effect, , Q5 Sneak Attack, 2024 Budgeting Thursday, December 21, 2023 Good morning DTC faithful! Have you seen Leave the World Behind on Netflix? It’s quite good, but a real downer about the economy (and civilization). So to keep your spirits high as you wrap your gifts and Q5 campaigns, consider Warren Buffet’s “Tao of Snickers” which points out that Snickers has been the US’s #1 Candy Bar since its creation in 1930, amidst ongoing depressions, wars, and financial calamities. Here’s your reminder to keep your focus on steady success in simplicity (and peanut-y goodness). In the meantime, here’s what you’ll find in today’s DTC: - How you can capitalize on the ‘Refund Effect’ post-holidays to finish off strong this year - Ways to plan your Q5 Sneak Attack - Three things to consider when creating your 2024 budget. You’re reading this newsletter along with new subscribers from: SD Games, Fabalish, and Oak and Eden Studio 👋 This newsletter is brought to you… IN PARTNERSHIP WITH LOOX 👔 Button Up Your Success with Social Proof Marketing Nate Brown, founder of Geek Tropical, had a great business idea that he turned into a soaring print-on-demand shirt brand with a devoted and passionate community. 🤔 The Challenge Despite the advantages of a print-on-demand business model like low start-up costs, Geek Tropical still faced challenges including consumer skepticism. Nate decided to overcome these hurdles by embracing a customer-centric approach. 🔑 The Solution Using [Loox](, Geek Tropical collected over 1,000 reviews from passionate customers with 23% of the reviews including a photo or video. Displaying them on [beautiful widgets]( across their website as social proof that buyers love their geeky products and transformed their website into customer satisfaction central. Learn how Loox helped Geek Tropical take a customer-centric approach to build trust, grow sales, and foster a vibrant and loyal community for their online business. [Read the Full Case Study Here]( POST-HOLIDAY TIP 💰 How to take advantage of the ‘Refund Effect’ As your customer support team waits with bated breath for the influx of return emails post-holidays, here’s how to capitalize on those returns. We all know returns can be costly. It’s gotten so bad that this year some retailers are telling customers to [‘just keep’ the product](. However, you can also use this as a window of opportunity. 💡 As customers come onto your website to make a return, why not cross-sell products during the return process and take advantage of the Refund Effect? ✨ What’s the Refund Effect? ✨ Customers are more likely to purchase a new product after making a return since customers consider the refunded money as money that has already been spent. Psychologically, spending the money doesn’t feel like a loss. 💸 You can take advantage of this customer behavior by cross-selling during the return process. Instead of only issuing a refund… ✅ Suggest an alternative product that better meets their needs. Get your customer service team on board with this messaging so you don’t lose out on this cross-selling opportunity. Customers are in the spending mood during this time so instead of just issuing refunds and sending shoppers on their way, try to nab more orders to close out the year! 📰 NEWS - [Amazon is in talks to partner with Diamond Sports]( as it invests more in live streaming sports. - By 2027, [one in five brands]( will go AI-free as a unique selling point due to concerns about misinformation caused by generative AI. - A survey revealed [63% of U.S. shoppers used a mobile app]( for at least some of their purchases during BFCM. - Delivery service Instacart launches [Seven Days of Deals]( this week for last-minute gifting. NRF 2024 🔮 Our Predictions for Your 2024: Shaping the Future of Commerce with Vesey Ventures! Step up your NRF Big Show agenda with Vesey’s upcoming high-impact networking opportunity this January. [Power Connections Breakfast: The Future of Commerce]( features a distinguished panel on “AI in Commerce Enablement” followed by roundtable discussions with startup founders and the biggest names in commerce - execs from Shopify, Amazon, Synchrony, Walmart, PayPal, AmEx, Firework! 🚀 Vesey Ventures is hosting this event with support from Synchrony, Cooley, and Silicon Valley Bank. 👀 So if you’re a Commerce Enablement startup attending NRF 2024, this is your sign. [Apply Now and Join the Future of Commerce]( NEW YEAR PREP 👊 Q5 Sneak Attack While you may be exhausted from the craziness of Q4, instead of slowing down, let's keep the momentum going by making moves in Q5 that will set us up for success in 2024. What’s Q5? Q5 is the period between late December to mid-January and is also known as the fifth quarter. Post-holiday, consumers are still actively seeking sales and discounts, engaging in returns, redeeming gift cards, and utilizing their cash gifts. This Q5 period not only caters to consumer needs but also presents a cost-effective marketing opportunity for businesses. Why is it cost-effective you may ask? While advertising leading up to and during the holidays comes with a hefty price tag, marketers can leverage lower media costs and sustained demand. This strategic approach allows ecommerce brands to conclude the current year robustly and kickstart the new year on a high note. Q5 often witnesses some advertisers scaling back their efforts, but it presents a substantial opportunity to leverage the platforms you advertise on and proactively enhance your marketing initiatives before the onset of 2024. Let’s dive into the stats: - On average, advertisers experience a 20% decrease in CPA compared to both Q1 and Q4. - In 2022, Pilothouse observed a 20% reduction in CPMs and a 9% increase in CPA efficiency during Q5 as opposed to October. Several favorable factors come into play: - CPMs experience a significant drop, making ads more cost-effective. This period represents a key opportunity with the auction being the most economical all year. - Reduced competition in the auction as some major brands may withdraw and shipping deadlines pass. - Sustained high purchase intent as individuals aim to utilize gift cards and cash gifts acquired during the initial holidays, alongside concluding last-minute holiday shopping. - Extended time spent on our platform due to people taking time off work during the holiday season. - A surge in new devices coming online, driven by the acquisition of new smartphones and devices. Long story short - the [Pilothouse team]( suggests that during Q5 you don’t pull back, you sneak attack! 🌐 IN THE SOCIAL SPHERE When creating your 2024 budget, here are 3 things to consider: Can't view the image? [Click here]( SPONSOR DTC 📥 Promote your product to 160,000 digital marketing professionals DTC Newsletter + Podcast reaches a highly qualified audience of Shopify merchants, eCommerce founders, and digital marketers. [Talk to our team to learn more](. 👀 BANTER Last minute holiday shoppers be like… ^^^ Have you heard our latest podcasts? - 😆 [AKNF 362:]( Is CPC for Clowns? Meta Ads BFCM Recap - 🤯 [Shocking the Gatekeepers]( – Auto Aftermarket Goes DTC with Sean Reyes from Shock Surplus - 🤫 [AKNF 360](: The Power of the Double Tap + The Secret Tool For Instant Email Scale (And How to Use it Safely) - 👏 [Breaking Barriers in Menstrual Health]( with Nadia Ladak CEO of Marlow - 💰 [AKNF 358:]( BFCM Results Breakdown with Pilothouse - 🌊 [Santevia Revolutionizes Water and Conquers Amazon]( with Matthew Gohl Don’t forget to [rate the DTC Podcast]( on Apple (⭐️⭐️⭐️⭐️⭐️) Got an awesome DTC brand story to tell? Calling all brand-side founders and team leaders! Fancy joining us on the DTC Podcast as a guest? [Tap the link to toss in your application](. DTC Newsletter is written by [Rebecca Knight](, [Frances Du](, and [Michael Venditti](. Edited by [Eric Dyck](. Was this email forwarded to you? Sign up [here](. NEED MORE DTC? 🚀 [Advertise]( in DTC Newsletter. Please note that items in this newsletter marked with * contain sponsored content. 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