So a bit of background: I currently have 2 brands that have done 7-figures in revenue in 2021. I'll call them Brand A and Brand B.
Brand A has done pretty well and our net profit % is very healthy (generated a nice 6-figures in net profit in 2021). I don't have any problems with this brand but I wanted to contextualize the situation.
Brand B, on the other hand, although it did a similar amount in revenue, it did VERY LITTLE in net profit. Like a low 5-figures (less than $30k). Granted, it's the first year that this brand was in business (Brand A has been in business since 2020 while Brand B was launched in early 2021), so I wasn't really expecting to pocket much.
However, the numbers are low enough that it's making me reconsider running this brand. Actually, I don't think it's really about the numbers, it's more about the market we're currently targeting.
I initially started Brand B because I wanted to sell to a younger market (18 – 45), but we somehow ended up selling mostly to people 45 and up (with most sales coming from the 65+ range). The problem with this demographic is that they're absolute idiots and the return rate is higher than I'd like mostly due to these old people not understanding how to use technology or navigate a very simple website.
We also get too many chargebacks because they use shitty email service providers that end up blocking many of our automated Shopify emails (and when old people don't receive emails, they go batshit insane — I know this because I do all of the customer service emails myself for this brand).
On top of this, since our current target market is boomers, all of our products and ads are tailored towards this specific market… so everything we make (from products to creatives) are all tacky as hell… which brings me to another point: My ego.
I know you shouldn't care about how your brands make you look since money is money, but Brand B was actually started BECAUSE I wanted a brand to be proud about (I hate Brand A also but it makes me good money so that's why I stick with it). I wanted to be able to go around and show off Brand B to friends and family whenever they asked what I do, but it's gotten to a point where I won't even tell my closest friends what I do because I'm so embarrassed about this particular brand since everything is tacky and ugly.
So I've decided to finally try and pivot this brand so that I can go back to targeting the initial market I wanted to sell to exclusively.
I also think right now is the perfect time because a lot of things are lining up, namely:
- Our net profit is so low that even if this pivot fails, we wouldn't have lost much money (it also helps that Brand A is our current breadwinner and will consistently make money regardless).
- Younger people seem to be leaving (or have already left) Facebook en masse, and this is the current platform we're using to run paid ads.
- I realized my products are VERY visual (think of it like a t-shirt company, the creatives are very image/visual heavy and there's really no need for anything other than the visual element), and Instagram and TikTok seem to be the better platforms for these types of products.
- The one product that carried this brand throughout 2021 has basically died out (we've tried running new creatives but the numbers just keep getting worse and worse).
So here's what I'm planning on doing within the next couple of weeks:
- Turn off all the Facebook placements for my ads (except for like 1 or 2 of them — I'll keep running them with a very low budget, and maybe some retargeting ads) and strictly use Instagram and TikTok from here on out.
- Set the targeting parameter to only show my ads to ages 18 – 45.
- Take out all of the products that give off a "boomer" feel to them and only stock products that the younger generations would be interested in.
- Clean up my website to look more like a Millennial or Gen Z oriented website (use cleaner fonts and better colors that mimic the look of a lot of brands that they're used to).
- Move away from the basic creatives we've been using and start taking advantage of influencers and other lifestyle-type content.
I've already set up some small test ads that are only using IG placements and this age demographic range, and they look VERY promising, especially because this same product/ad did HORRIBLE when I running it on Facebook alone.
So yeah, that's where I'm at now.
Obviously, I'll still be testing more, but I just wanted to get some input from you guys to see if my current "assumptions" make at least a bit of sense. Am I making the right moves here? Do any of you guys have experience with also pivoting your business and seeing more success? Or am I being a complete idiot here by making this change?
Any general input will be highly appreciated since this is something that's sorta new to me (switching from one demographic to a completely different one).
- One of my brands isn't doing too hot
- Thinking of pivoting from old people to younger people
- I have a few ideas of what I need to do
- What are your thoughts on all this? Do you guys have any previous experiences of pivoting you can tell me about?