Reduced Cost Per Conversion By 72% From $122 To $34.
Objective
Centralise and optimise advertising spend.
Obstacle
Unpicking transactional data to discover high ltv customers.
Outcome
Reduced Cost Per Conversion by 72% from $122 to $34.
Background
Washclub is a growing business offering subscription laundry and dry-cleaning services. Over the years, their advertising return on investment (ROI) had steadily declined, with customer acquisition costs rising significantly. Faced with the challenge of maintaining growth while controlling expenses, Washclub sought a data-driven solution to optimise their marketing efforts.
Challenges
Escalating Acquisition Costs: One of the biggest challenges Washclub faced was the rising cost of acquiring new customers. The increasing competition in digital advertising meant that their cost per acquisition (CPA) was growing, reducing overall return on investment (ROI) and straining their marketing budget. With higher costs eating into profitability, it became clear that a more efficient approach was needed to maximise returns without continuously increasing ad spend.
Algorithm Limitations: Despite setting up ad campaigns with precise targeting and optimised creatives, Washclub found that advertising platforms were failing to deliver the kind of high-value customers that would stay loyal over the long term. The ad algorithms primarily focused on short-term conversions rather than identifying users with strong lifetime value (LTV). This misalignment meant that marketing dollars were often spent inefficiently.
Solution
Account Analysis: A deep dive into Washclub’s advertising account revealed key patterns that could be leveraged for better campaign performance. By evaluating various campaign elements, such as location, cost efficiency, and landing page effectiveness, our team was able to identify what had historically driven the highest success rates.
LTV Predictions: To address these inefficiencies, we leveraged first-party customer data to build a predictive model that identified and flagged long-term, loyal customers. By analysing historical customer behavior, we were able to differentiate between one-time purchasers and those with high retention potential. This data-driven approach provided invaluable insights that helped refocus advertising efforts on attracting customers who would contribute to sustained business growth.
The Proof Is In The Numbers
3x
72%
$62k
Implementation
Continuous Optimisation: Rather than treating campaign improvements as a one-time fix, Washclub implemented an ongoing feedback loop to refine their targeting continuously. By capturing and analysing new data in real time, they were able to make iterative adjustments that further improved results. This dynamic approach ensured that their campaigns remained effective even as customer behavior and market conditions evolved.
Cost Savings: Through these strategic optimisations, Washclub successfully reduced their cost per conversion from $122 to just $34, a dramatic 72% reduction. This translated into an annual savings of $62,000, allowing them to achieve three times better results with the same marketing spend. More importantly, with their data models now in place, these savings are expected to continue growing, creating a foundation for even greater efficiency and profitability in the future.
