As customer acquisition costs (CAC) continue to rise, ecommerce brands are still looking for new ways to increase their reach and revenue without breaking the bank.
A solution that’s gaining traction amongst brands? Cooperative marketing.
By partnering with other like-minded brands, companies can leverage each other’s audiences to reach new customers and boost their bottom line.
Leading the co-op marketing charge, Disco is a unique network of consumer brands working together to cut customer acquisition costs by leveraging the power of collective data.
We sat down with Disco’s Founder and CEO Conner Sherline to learn his perspective on co-op marketing and how Disco empowers brands to jive together and learn more about their customers while reducing CPAs.
The Road to Disco
Ecommerce and product discovery have always been at the heart of Sherline’s career. Before starting Disco, he spent several years at Meta, working across Facebook and Instagram's global product marketing teams.
“I was always thinking about how these two channels were the only places to discover new brands at the time,” he says. “However, they were not inherently made for shopping.”
Sherline left Meta to join the product marketing team at Affirm, where he worked closely with ecommerce brands. There, he realized that the website traffic for independent brand sites is dispersed across thousands of brands competing against each other.
“The web traffic for independent brands is much larger than Amazon’s web traffic” explains Sherline. “I kept thinking: Why are all these brands competing against each other in the auction? Why don’t they unify in some way?”
According to Sherline, that was the initial idea behind Disco.
To kickstart this initiative, Sherline knew he wanted his platform to live on an independent brand’s website. Soon, he landed on a cross-selling initiative for brands integrated into a post-purchase experience. DiscoFeed, Disco’s original product, is a cross-selling widget that sits on a brand’s order confirmation page. It recommends complementary products to shoppers based on their past purchases, giving brands a cost-efficient new customer acquisition channel that allows them to get in front of high-intent shoppers.
By leveraging DiscoFeed to cross-sell, not only do brands get in front of new customers, but they also get to learn where else their customers are shopping. These are the kinds of insights independent brands don’t easily have access to and illustrate why Disco believes that brands can grow faster by working together.
Leveraging the network’s collective data for collective benefit is at the core of everything Disco does. Essentially, Disco has pooled the combined shopper transaction history across its hundreds of brands to build over 75M US ecommerce shopper profiles. This cross-brand data is what powers all of Disco’s growth tools.
Another tool, DiscoAudiences, helps brands effectively target the shoppers on Meta, Snap, and TikTok that are most likely to make a purchase from their brand.
“The next chapter of Disco is all about using our unique data layer to help brands grow faster and lower CACs in other places.”
Why Co-op Marketing?
Most small DTC brands can’t be everything to their customers. Why? There’s limited bandwidth and resources at this stage.
However, what makes co-op marketing unique and attractive for brands is its ability to tailor diverse shopping experiences to individual customer behavior.
With Disco, brands are able to fill in the gaps for one another when it comes to customers’ preferences and needs. Plus, they can access and leverage the data from cross-selling initiatives. In turn, customers are introduced to even more brands that they’re likely to enjoy based on their previous purchases.
Long story short, it’s a win-win for all parties involved.
To further illustrate co-op marketing’s value, Sherline points out that most shoppers today rely heavily on product reviews and influencer content when looking to make a purchase. The same philosophy can be applied to how they discover new brands.
“We resonate with brands for a reason,” Sherline adds. “If a customer likes Caraway for their good-looking, non-toxic kitchenware, and the brand recommends a knife company that can also level up their kitchen, the likelihood of that customer making a purchase there is very high.”
It’s better to grow together, especially since collaboration drives profitable growth.
“What we’re trying to do within our community is give brands a chance to directly work with other brands that have similar goals or aligned value propositions.”
The Disco Collective
Disco’s community of 1000+ brands is very impressive, to say the least.
It features a wide array of brands, spanning nearly 20 product categories, including DTC cult favorites like Dieux Skin, Aura Bora, and Vacation, to name a few, as well as mass-appeal brands like BlendJet, Banza, and Poo-Pourri.
Disco also presents a great opportunity for smaller brands—that are relatively new or that cater more to niche interests—to gain exposure. By joining Disco, these brands can tap into a larger audience and reach even more potential customers.
So, how do you join?
As a brand, all you have to do is set up your account and share who you are, what you sell, the category and subcategory that your products are in, as well as some product imagery to use across selling initiatives.
“From there, we start syndicating you across the platform and look for brand partners willing to work with you,” explains Sherline.
The Disco team works hard to maintain the quality of their brand community as well. Strong brand guidelines are followed when it comes to vetting brands to include in the network.
Once approved, brands are typically syndicated across the Disco network within 24 hours.
“Brands set up their own guardrails, and we take care of filling out the blanks for what is most likely to convert.”
What types of brands are seeing the most success on Disco?
The Disco team has seen strong results in nearly every brand category, says Sherline. “But, the category that performs by far the best is baby,” he adds. “Which isn’t necessarily surprising because the purchase intent is there.”
A father of two, Sherline has a deep understanding of this buyer behavior. “When you’re having a baby, you have to buy everything in one fell swoop. So you're constantly asking yourself, “'What's the best stroller?' 'What's the best crib?'”
Another segment that performs exceptionally well on Disco? Consumer Packaged Goods (CPG).
Although most people still prefer to purchase CPG products in physical stores rather than online, Sherline points out that the subset of consumers who choose to purchase their CPG products directly from ecommerce retailers represents a highly-qualified target audience, especially from a cross-category perspective.
“Our product is especially lucrative for people with that kind of mindset,” he says. With this particular segment of consumers, the likelihood of a purchase is significantly higher.
With other brand categories, Disco typically sees higher success at the top and middle of the funnel.
“We usually see that we played some part in the conversion journey. People usually find out about the brands for the first time elsewhere, and then convert later via the DiscoFeed.”
In Q4 of 2022, Disco rolled out their Audiences tool which helps brands find their future shoppers across social platforms while lowering CPAs.
With DiscoAudiences, brands can tap into a network of 75M+ US-based ecommerce shoppers. “We know who’s checking out and buying in each category, and we are able to use that data set to enable brands to target customers more quickly and effectively,” says Sherline.
One key metric that Disco brands look at as a predictor of purchase behavior is recency.
For instance, if a shopper purchased a swimsuit and also happened to purchase a bottle of sunscreen, it’s likely that they’re going on a trip soon. They might also be likely to purchase a passport holder or a travel backpack if the right marketing comes their way.
“All of these things are really relevant signals that drive better results than a signal you might get from Instagram or Facebook,” says Sherline.
The result? Significantly lower CACs and at least 20% in efficiency gains.
In addition to Meta, DiscoAudiences is also available on Snapchat and, very recently, TikTok. The team also has plans to launch it for direct mail marketing efforts in the next few months.
“We want to essentially create this place where you, as a brand, can see results that you can’t find anywhere else. And then, we want to empower your overall marketing stack.”
Leveraging Collective Data
All of the data that empowers these consumer insights lives within the Disco Partnership Dashboard, which is built into the Disco platform and is unique to each brand.
Brands are utilizing the dashboard for a variety of purposes. Not only are they measuring customer overlap, but they’re also leveraging the network’s intelligence to capitalize on brand partnerships and mitigate risks associated with product expansion.
Disco is also working on bringing all of these insights together at the forefront of the platform experience. The main purpose? To provide brands with immediate, personalized insights about who their customers are and where else they are shopping across the Disco Network.
“We want to surface more things, such as the subcategory shopping behavior of customers so that brands can action this data in specific ways,” Sherline says.
The possibilities are endless, whether that’s reaching out to someone in the Disco Slack to work together, targeting a different customer subset, or completely changing the way a brand targets in the DiscoFeed.
"Our hope is this helps brands generate new and fresh ideas, not only within targeting but also with their overall business strategy."
Disco Best Practices and Results
For brands looking to leverage Disco as part of their customer acquisition strategy, Sherline has a few tips to offer.
First, brands should regularly log in to check their dashboards and keep a pulse on where their customers are shopping. “These are insights you can’t find anywhere else - or at least not easily. This is really one of the core benefits brands get from being part of Disco,” says Sherline.
Another way that brands can leverage Disco to their advantage? By joining the Disco Slack community and engaging with other brand operators. Made up of 1000+ ecommerce founders and brand operators, Disco’s vibrant Slack community is where all the magic happens.
In terms of making the most of the channel, the Disco team has seen success with brands that have multiple team members engaging with others within the channel. Typically, brands initially send their growth representative as the main point of contact to Disco. Once the brand becomes familiar with the platform, a partnerships person is brought into the fold to establish brand partnerships and drive such initiatives.
“There’s a lot of stuff that goes down in the DMs,” says Sherline. “We’ve seen tons of collaborations come out of this community.”
Some notable brand collaborations? A swimsuit collection by Faherty and Andie Swim, a partner marketing initiative between Glamnetic and Parade, and a matching sleepwear gift set for parents and babies by Little Sleepies and Once Upon a Farm.
- What to pledge
- How to improve
- Which tools will set you up for success
I think the most important thing brands can do in 2023 is to better manage their customer data—both ethically and effectively. There’s an opportunity for brands to know their customers better than ever before—a clear benefit for both the customer and the brand. When you manage your data correctly, you’ll create stronger and more personalized ads, creative, site experiences, and so much more.
This is a classic: Let the data guide you. Go where the buyers for your products are and communicate with them on a personal level (i.e. by persona and funnel position) and nurture those relationships (past, present, and future customers). It’s possible—all through data.
We recommend that Shopify brands analyze and update their websites using data-driven decisions. Using analytics tools such as heatmaps and scrollmaps can help brands better understand how customers are interacting with their store.
Store owners tend to make assumptions about the way customers interact with their website. Most never go back and analyze their design choices to find pain points or areas of opportunity. By using heatmaps and scrollmaps, they can see where real customers are clicking and concentrating their attention. Leveraging this data, brands can start to iterate on design and make their online store experience streamlined and intuitive.
Hotjar provides a simple way to implement heatmaps, scrollmaps, and recorded user sessions on your site, helping you acquire incredibly informative user data. Additionally, it gives you the ability to create on-site surveys, which allows you to obtain direct and often critical feedback from users about their experience.
Test various attribution models and analyze the impact on your business. At Fifty Six, we are always here to help our clients identify and optimize their approach—a critical step in any successful marketing strategy.
If I’ve said it once, I’ve said it a million times–Customer Lifetime Value. And even more importantly, Future Lifetime Value (FLTV). With the ever-growing importance of first-party data, it is crucial that brands take a good look at their CRM and FLTV metrics.
Stop allocating budgets to low-hanging fruit that doesn’t move the needle on conversion. Think about what’s really going to improve your CX and the return of undertaking different initiatives—not just on what’s top on your list of bugbears on the site!
One of the best ways to understand your customer behavior is by using HotJar. Their heat-mapping and screen recording tools shine a light on where customers are navigating to and from on your site, where they're rage clicking and experiencing frustration, and where conversion is dropping off within real life customer journeys and flows!
Understanding your customers’ pain points via data and analytics , will allow you to work with your CRO/CX Agency to solve customer frustrations and improve conversion.
Rewind backs up all product, customer, and order data for Shopify sites—essential since Shopify itself doesn’t provide this solution. It's saved so many of our clients time and money from administrative accidents.
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33% of customer service inquiries are pre-sale questions. What does this mean? If you’re not investing in customer service, you’re missing out on revenue-generating opportunities.
The benefits of elevating your customer experience:
- 10% to 25% increase in AOV for customers who engage with live chat pre-purchase
- 21x higher conversion rate for customers who reach out via Live Chat or SMS compared to other site visitors
- 87% of customers who have a great customer experience will make another purchase
- 72% of customers share positive experiences with 6 or more individuals
Gorgias is our favorite Helpdesk platform. They can reduce costs by 35%, primarily by decreasing the average ticket handle time. Their machine learning algorithms are trained on millions of ecommerce-related interactions across Gorgias’ customer base and provide accurate, automated replies for the most common ecommerce inquiries. This helps our agents resolve tickets faster, which provides the customer a seamless experience.
Trust your agency! Agencies do the same things across multiple brands and niches, so we see the trends and have the practice and experience!
Don't be afraid of data and insights. If customers aren't clicking on your emails, try a new CTA. If your ads are driving good metrics at a small spend, start scaling. If your customers are complaining about a product, look into QA! If the data tells you something isn't working, let it go and try something else!
I'm supposed to say Tydo, right? 😉
Double down on differentiation. There will be a lot of headwinds this year and standing out from the crowd will set you apart.
A picture is worth 1,000 words. A video? Probably millions. In ecommerce that value translates into engagement, acquisition, and retention—everything you need to impact your bottom line.
At soona, we've seen the we've seen the impact of creative and the continuous split testing of it yield results. Our resolution is to challenge ourselves and double down on innovation and creative optionality so that each brand we work with can distinguish themselves in a crowded sea of D2C ecomm. We'd love to see our brands share this resolution and keep pushing the creative limits.
Klaviyo. We're using it to power our email and newsletter at soona too!
Optimize your returns strategy! This can lead to valuable customer insights, enhanced user experiences, and increased revenue and customer loyalty.
Brands need to dive deeper into understanding their customers to set themselves up for success. Conduct research to gain insights into customer needs, preferences, and behaviors. By doing so, you can develop targeted strategies that will enhance customer experience and boost overall retention.
Right now I would say Gorgias. Having a good customer service tool is crucial to building strong customer relationships.
Start paying heavy attention to data, specifically around retention. We see a lot of effort put towards acquisition with the assumption that once someone buys, they are your customer forever. Instead, get to know your customer, understand their needs, and analyze their behaviors once they are on-site and judge their sentiment after they have visited. Work with a retention focused and data-driven agency to implement tools that contribute to repeat business and customer delight. It will pay dividends.
When surveyed, about 80% of ecommerce merchants think that they are delivering a great experience to their customers. However, when the same customers are surveyed, only 8% of those customers think that they are getting a great experience from the merchant. Now, more than ever, retaining loyal customers is an essential part of any online business and you should spend time with your customers to judge their experience with your website and products and offer improvements based on that feedback.
Tydo's report cards are an essential tool, along with Klaviyo for email and SMS, Recharge for subscriptions and memberships, Okendo for reviews and surveys, Rebuy for AI driven collections and upsells, Loop for self service returns... each tool is great on their own, but their strength as the ultimate tool comes from when they are used together!
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