Lowering Customer Acquisition
Cost with Samples

The Challenge: Affordable Customer Acquisition
U Beauty is the poster child of an up-and-coming beauty brand. They have distinctive products, viral word of mouth from happy customers and a leadership team experienced in the beauty segment. This has all led to rapid growth 
in their direct-to-consumer business selling through their website hosted on Shopify.
One key challenge to growing efficiently has been the rising cost of customer acquisition. Competition is fierce in the beauty segment and paid ads have continued to get more expensive over time. While customer lifetime value is strong, rising customer acquisition cost puts a lot of pressure on a growing brand.

To tackle this challenge, U Beauty went back to their roots - free product samples. U Beauty started their endeavor in 2019 by giving away samples to anyone who wanted one, they ended up giving away 100k samples. While great for brand awareness, their prior samples program didn't lead to significant customer acquisition. They needed a new approach.

Samples have the power to engage new customers that otherwise would not have purchased, have them trial the product and then convert to a full size purchase. But how can a DTC brand like U Beauty implement this online?
The Solution: 
Try Before You Buy Samples
U Beauty joined forces with Blackcart to implement a Try Before You Buy (TBYB) sampling program for their ecommerce store. A “Try a Sample” option was placed alongside the full size products on the product details page for their best selling items. Samples, including shipping, are free with a $3 refundable deposit and it’s enough product for the shopper to try for a week.

Once the sample is delivered, a 15 day trial period starts. At the end of the trial period, a full-size product is automatically shipped to the shopper and their payment method is charged. They are able to opt-out of receiving the full size product during the 15 day trial period.

This workflow is key to making the sampling program successful. For the shopper, it’s frictionless to receive the full size product after enjoying the sample. No additional action needed. And opting out is easy as well, a single click on a Blackcart webpage. For the merchant, the automated opt-in is critical to driving full size conversion and program profitability.

For the merchant, the automated opt-in workflow optimizes conversion rate from sample to full-size. By sending out a sample-size version of the product first, unnecessary returns of full-size products are avoided. This makes the customer journey more efficient and more profitable for U Beauty.
U Beauty is converting sample customers both from existing store traffic and paid advertising. Within the existing store traffic, the vast majority of shoppers leave without making a purchase. Offering the TBYB samples converted some of these shoppers to customers, increasing the conversion rate of the store. Additionally, TBYB sample ads were used on social to promote the offer and drive store visits with the intent to try a sample.
The Transformative Results
The results of the TBYB samples product for U Beauty have been significant.

1. Lowered customer acquisition cost by 65%.

Sample customers convert at a far higher rate, leading to a significant decrease in the CaC vs existing benchmark at U Beauty.

2. Incremental first-time customers.

94% of shoppers converting to a sample purchase are first-time customers to the brand. And the new customers are incremental, measured by a higher conversion rate on the eComm store.

3. Conversion to full size purchase of 40%.

Sample customers convert to making a full size purchase 40% of the time. Additionally, there are minimal returns of the full size items because the customer has already sampled the product. This compares to a traditional brick and mortar sampling conversion rate of <1%.

4. Consistent LTV : CaC ratio as regular customers

Sample customers are just as profitable as customers purchasing a full size first. U Beauty and Blackcart compared the sample customer cohorts net sales lifetime value vs acquisition cost 
to the ‘full size first’ customer cohorts.

Conclusion: 
Unlocking Growth in Beauty eCommerce
U Beauty has demonstrated a keen sense for innovation that makes their customers’ lives better. In the process, they’ve unlocked a significant growth opportunity for their brand to reach new customers and drive profitability.

Partnering with Blackcart to bring this sampling technology to market showed up in the financial results - lower customer acquisition cost, incremental, new customers and consistent customer profitability. The story of sampling for U Beauty is just beginning.

At a Glance

65%
Decreased customer acquisition cost
94%
Of shoppers are new customers
40%
Of sample customers purchase full size product
Your Turn
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