Why BFA Industries switched to ROAS-based measurement
Ido specializes in the intersection of technology and operations, building digital infrastructures to help companies achieve operational excellence and enabling their growth at scale. He led transformation projects in Marketing, Operations and Supply Chain for BoxyCharm, one of the largest subscription box companies in the US.
2021 proved to be one heck of an intense year for most every department of most every industry. Even brands that raked in big money through the course of 2020 ended up getting hit with unpleasant surprises as 2021 hit. Why? Because consumer behaviors and expectations changed amid the new normal. I mean, how many of us are spending the same amount of time and money on the items/activities that kept us occupied in 2020?
With that in mind, I decided to reach out to some top marketers, to get a better grasp on how they responded to the changes that came their way through the course of 2021.
My friend, the esteemed operations optimizer of BFA, Ido Kissos, experienced something that we previously covered on our blog: the need to shift from CAC strategy, to payback strategy. This shift is changing the way UA teams are building, optimizing and measuring their campaigns from setup to ongoing.
Here’s the thing. CAC strategy limits a brands ability to scale, because it only “locks” the price they are willing to pay. Inversely, payback/return based strategy allows growth teams to “stretch” that limit by focusing on the return and not limiting networks to “fish” in a limited pool.
It was something Ido noticed for BFA industries, which is home to the largest beauty subscription brands in the world, such as IPSY and BoxyCharm.
Here’s what he had to say about the changes made in 2021:
“As CAC soared in Q2 of 2021 and created a “new normal”, our financial assumptions and goals broke. Our acquisition costs were not in the green zone of profitability anymore, which pushed us to redefine our marketing objectives and evaluation method. The company moved to a ROAS based measurement, which provided a clearer guidance on the spend caps and marketing strategy.”
Click here to find out how some other top marketers responded to the changes that came their way in 2021.