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Tiny Treehouses is an online ecommerce brand that specialises in 3D wooden treehouse models used to decorate your space and give life to your plants. Created in 2020, they successfully launched a Kickstarter campaign that beat their original goal by almost $300,000. Long story short, people loved these magical little puzzles.
Fast forward to 2023, the business was struggling to stay profitable. Due to the limited SKUs (they only had 4-5 different items to purchase) and the lack of a clear lifecycle marketing strategy, returning customer rate was quite low. And since the agency hired at the beginning of the year was unable to hit the owner’s goals he was too time poor managing them to design and create new products. With a rising CAC and a low returning customer rate the mission was clear: drive lower acquisition costs and keep customers coming back to buy these extremely cute and fun items.
Our efforts resulted in a remarkable 200% increase in revenue within the first 90 days. The returning customer rate saw a notable improvement, growing by 60% in just two months. The optimised Black Friday sale in month 4 was the brand’s best BF sale ever, showcasing the sustainability and predictability of the implemented strategies.
In overcoming these challenges, we not only revitalised Tiny Treehouses’ business but also laid the foundation for continued growth and success. Join us as we uncover the strategies we used to grow this Aussie hobby brand.
Tiny Treehouses faced several key challenges that required strategic intervention. With a limited offering of only 4-5 items, the challenge was to find creative ways to enhance customer value despite restricted opportunities for upselling and cross-selling. Additionally, the absence of a clear lifecycle marketing strategy limited post-purchase engagement, presenting hurdles in nurturing long-term customer relationships and loyalty. These issues were compounded by ineffective management of outsourced resources and the owner’s limited availability, which impacted both the design of new products and the overall strategic direction.
In response, we focused on optimizing resource management and minimizing the owner’s operational burden, while also addressing rising customer acquisition costs and a low returning customer rate. Implementing targeted retention strategies and re-evaluating our marketing approach, we aimed to balance acquisition costs with improved customer retention, ensuring Tiny Treehouses could achieve sustainable growth and profitability amidst these challenges.
While the Tiny Treehouse website maintained a straightforward and functional design, it faced significant conversion obstacles that discouraged potential customers from exploring the product. Our team conducted speed tests, identified areas for improvement in website navigation, and revamped the home page layout with new headline suggestions. Additionally, we enhanced the product page by incorporating social proof and FAQs, reinforcing the brand’s value propositions and ultimately fostering a more compelling user experience. In the first 90 days of the engagement we saw a 15% increase in conversion rate while driving a 30% increase in traffic.
One thing the client had never done before was to allocate a small budget exclusively to creative testing. By doing this we were able to drive our best results from the winning ads of these tests and scaling them effectively. We began by looking at the key performance indicators of the previous ad creative like CTR and noticed these results were lacking. Our strategy was to find the creative that would drive the most traffic to the site, while maintaining or increasing the conversion rate.
Our scaling strategy for the business also ensured predictable and sustainable growth, allowing us to scale revenue and ad spend by over 100% in the first 4 months.
A pivotal aspect of our strategy centred on elevating the Lifetime Value (LTV) by boosting purchase frequency within the constraints of a business characterised by a limited number of Stock Keeping Units (SKUs). To achieve this, our team implemented a comprehensive email marketing initiative, introducing a well-structured calendar that catered specifically to customer segments.
The cornerstone of this approach involved crafting tailored offers exclusively for VIP customers, ensuring they felt valued and incentivized to engage with the brand consistently. These special promotions not only heightened their satisfaction but also played a crucial role in fostering brand loyalty.
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Defiant Digital is a Sydney based Digital Marketing agency that specialises in Creative Performance.
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