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Nik Sharma

If you think your “Ads aren’t working” then you’re not going to make it

Happy Sunday! I hope you’re feeling relaxed knowing tomorrow is off (it’s President’s Day in the USA) and that we’ve got a nice, light, long weekend Sharma newsletter ahead of us. Make sure you’ve got your feet up, a beverage in your hand, and a blanket lying across your lap. I hope you’re ready to talk about people who say ads don’t work!

Also, if you missed Limited Supply this week, then you’re missing out. I feel like after 2 full seasons, Moiz and I have been putting out absolute banger episodes in season 3. Make sure you catch episodes on Spotify or Apple Podcasts, and let us know what you think.

This topic comes out of speaking to potential clients at HOOX or Sharma Brands who claim that ads just don’t “work” for their business. Not in the sense that they aren’t fit for the business model, but rather that they could never get it to work, from a financial or conversion standpoint. Now, there are some anomalies where this is true, but in most cases, it’s not. You’re usually off by a couple of key pieces in the customer journey for this to start to click.

If you’re thinking, “Well, damn, maybe this newsletter isn’t for me since my ads are working just fine” then this will be a good checklist for you to go from a 2% site conversion rate to a 4%. Or a 1.5% CTR on your ads to a 3.5% CTR.

I honestly believe that there’s no such thing as “ads not working.”

You’re either running ads with bad creative, poor messaging, bad targeting, or uninformative landing pages, or... your product isn’t valuable enough to demand the price you are trying to charge.

As we all know, the market determines the price we pay for all products and services.

Everything, and I mean everything, is worth exactly what someone else is willing to pay for it at any given moment in time.

As an entrepreneur, a brand, or an operator, your goal is to create a sustainable and profitable product or service, get people to care (through marketing/advertising), get them to buy, and then deliver on the promise of your product or service over and over again.

In other words, finding your initial “product-market fit” just means finding a repeatable process to consistently create, advertise, sell, and deliver what you are selling. That is PMF.

Additionally, If you have a product or service, but you can’t get people to buy it, you probably have one ofthese key issues:

  1. Not enough potential buyers know that your product or service exists.
  2. Once people know that your product or service exists, your product description, landing page, or ad creative, doesn’t entice potential buyers to convert.
  3. Or, you have priced your product too high and the natural supply & demand for your particular product/service/offer doesn’t make sense.

After working with brands to perfect this customer acquisition cycle, here’s how you can solve all 3:

Not enough potential buyers know that your product or service exists

The first step in marketing/sales is always awareness. It’s impossible to sell anyone anything if people don’t know that your product or service exists. You have to get people’s attention, and then you have to get them to care (note that this is a 2-part process).

In today’s marketing and advertising world, there are a few proven ways to get your message out there. Here are some of the most common

  • Organic content: including any and all social posts, articles, videos, images, podcasts, comments, and more.
  • Ads: Paying for reach, clicks, or a “conversion event.”
  • Creators: Paying other creators/people with distribution to mention your product or service in their content
  • PR: Getting mentioned in the traditional, legacy, or industry press and media outlets
  • Word of Mouth: Having friends, family members, former customers, collaborators, or colleagues share more about what you do
  • Events: Hosting digital or in-person events to help spread the word
  • Collabs: Partnering with a creator or brand to co-promote your product or service in a way that’s mutually beneficial to you both

Obviously, there are a bunch more, but those are some of the basics. For now, let’s focus on ads.

I love ads because they guarantee reach. No matter what, you are guaranteed to get views when you spend money on Meta, TikTok, or Twitter to promote your product or service. Even spending $50-100 dollars per day on these platforms can give you some really meaningful insights for your brand.

As we all know, ads are the lifeblood of the global economy. If digital ads didn’t work, Meta, TikTok, Google, Twitter, Pinterest, etc., wouldn’t be some of the biggest companies on earth.

I hate to break it to you, but the ads definitely work; you just need to learn how to crack the code! Here’s what I think you are getting wrong.

Messaging

To be successful in business, I think you need to be able to explain your product or service in 1-2 sentences max. The shorter, the better. The more flawless your one-liner is, the better everything else that’s much longer, will sound.

For example, Sharma Brands scales category-defining consumer brands.

In theory, we could also say, “Sharma Brands builds websites, runs ads, makes creative, builds landing pages, etc” or we could just say that we scale brands. In just one sentence, we articulate what we do. We help you grow.

I feel like this thinking can be applied to pretty much everything in your creative funnel. i.e., if you’re creating an ad, what’s the immediate punchline? If you’re creating a physical label for your product, what’s the value prop or enticing hook? If you’re creating a landing page, how can you quickly explain what’s in it for the person on the other side of the screen?

The clearer you can be with your messaging across all of these initiatives, the easier it will be to sell more of your product or service at scale.

Discussing Benefits, Not Features

Another common mistake I see many early-stage brands make when it comes to their messaging and ads is focusing too much on the features instead of the benefits. Then you can add angles.

Think about it. Does Nike’s content and ads lead with the fact that their shoes are made with rubber soles and nylon laces? Of course not. Instead, they use their content and ads to paint a picture of a consumer's life once they own more Nike gear.

Once you’re hooked on that, they’ll take it to the angles. You’ll learn how a shoe is much better for distance running because the additional padding will prohibit shin splints from occurring. You’re still assuming all the right value props in your head, but you’re seeing it personified — that’s why you get so excited to buy them.

Because their ads and content are about athletic performance (not materials or features), you also envision yourself as an “athlete” by purchasing their gear and partaking in the Nike story/brand.

IMO, this is exactly what great marketing/advertising is all about. It’s the story of how these products and services help us transform into who we want to be. Owning Nike makes us an athlete. Owning supreme makes us cool. Owning a Rolex makes us successful. You get the point.

The Price is Too High

The last element of your ads, landing pages, creative, and messaging not working is oftentimes that the price you are trying to charge is just too high.

Yes, everything is worth what someone is willing to pay for at any given moment, but there are real market forces that keep most products and services within a particular range.

Just because Tesla would like to charge $250,000 per vehicle doesn’t mean they can. They have to be realistic and look at the competition. Yes, their cars fetch a premium (based on a combination of the quality of their product, technology, branding, the status symbol that it’s become, and more), but it isn’t 10X. It’s more like 1.2-1.5X other models on the market.

As we all know, Tesla has incredible marketing and branding (a lot like Apple), but there is still an upper limit for what the market is willing to pay. For brands that are trying to understand how they should price their products more effectively to capture more value with a high CVR, here’s what I would recommend.

Build a landing page (with HOOX), duplicate the page, and try 2 different price points. Split test running the same traffic from your favorite ad source (i.e., Meta, TikTok, etc.) and see how the market reacts.

Are you getting statistically significant improvements to CVR when you price your product at $79.99 vs. $89.99? This is definitely worth a test. We did this with a cleaning brand 3 years ago. They wanted to run at $125 for their starter kit. When they were about to shut the brand down because it wasn’t working, we tested 3 different price points: $39, $49, and $69. We found that $49 had the highest CVR. The CPA went from $180 to $30, and they were on track to do $6M that year within 8 weeks.

Sometimes your offer isn’t converting because the price is just too high. Research the competition and alternatives, A/B test multiple price points via landing pages, and then let the market decide.

If your product doesn’t sell, and you’ve followed all of the steps above in this newsletter, that may mean there isn’t a real need or demand for what you are trying to promote. And that’s okay!

It’s much better to learn that now by spending a few months and a few thousand dollars to test your idea vs. dedicating years of your life trying to make something work that either has unsustainable economics or simply no demand.

Just scrap the idea and move on to your next attempt. With enough shots on goal, you will eventually make this formula work.

I hope this was a fun read. Next week I’m going to jump deep into subscriptions. If you have questions you want to make sure that I cover, please reply to this email so I can see them all! Ok, now, on to some fun stuff...

Vendor of the Week:

Parker — THE only credit card to offer 90-day terms as you scale your ad spend on Facebook, Google, etc.

You’ve heard me talk about Parker, and I’m here to discuss it again. Why? Because before, they were all about making it easier for merchants to pay their bills 60 days later. But now, Parker is rolling out a 90-day card!

So what does a 90-day card mean? It means you can spread expenses over 90 days for a transaction fee as low as 2% and access a credit line up to 80% of monthly sales. If you’re doing $1M/month in sales, you can get the Parker card with an $800k credit limit. Two brands I love, Venus et Fleur and Immi ramen, both have been using the 90-day card and loving it.

Ok, but now you’re wondering... what’s the catch? How does this work?! Well, there’s not really a huge catch when looking at any other credit cards for growing brands. The way it works is Parker is the first charge card on the market to offer the ability to push out expenses by 90 days. Their 90-day card works on a BNPL model where over a 90-day period, you pay a third (1⁄3) of the transaction. For example – let’s say you’re Italic and you make a $100,000 purchase for inventory; Parker would float this payment across 90 days, starting with a 1⁄3 repayment on day 30 and subsequently 1⁄3 on Day 60 and Day 90. Right now, they’re offering a discounted price for the 90-day card: a 2% transaction fee.

If you’re looking for capital solutions to help finance inventory, pay for shipping, or spend more on ads, I highly recommend booking a demo with Parker! You can learn more about their business on their website.

Click here to book a demo call with Parker and see if you’re eligible for the 90-day card!

LP of the Week:

This landing page is beautifully designed and on-brand for Pre Lab Pro. On this page, we offer a new customer two options to try it, highlighting the cost-benefits of going toward the 4-month trial. The page has a ton of depth to it, which the HOOX team researched, copywrote, and implemented on the page.

Click here to check out the Pre Lab Pro landing page!

If you’re sick of spending money on ads and they’re not working, then book a demo with HOOX, and let’s see if we would be a good fit to work with you on building a landing page. We can talk through what’s not working, the challenges, and how we can build you a landing page (strategy, wireframe, copywriting, design, and development) in just a few weeks.

Schedule a demo with us!

That's all for this week

I hope today’s newsletter was a fun one. I didn’t realize it would get just as long as the others... I figured this was just going to be half the normal length. Anyways, I hope you get a nice 9-hour sleep tonight and get a sweat in this week!

I’ll see you next week, and we’ll chat all things subscription!

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