Lessons from Festive Chickpeas’ Success in the U.S. Market
Understanding the true cost of acquiring customers is critical for a brand’s growth and long-term success, and this is particularly true when introducing a new product to an unfamiliar market.
The Festive Chickpeas launch in the US market is a strong example of why CPA is a more effective metric for evaluating marketing success than ROAS, TACOS, CPC, and other similar measures. When setting a marketing budget for a new product in a new market, the important number is the total cost of acquiring a new customer… all the way from “try” to “buy.”
It’s easy to fall into the trap of focusing on Return on Ad Spend (ROAS), especially when so many ad agencies put the focus there. After all, ROAS does reflect the cost of the sales you made with your advertising dollars, which is good information to have. But this approach often overlooks the bigger picture.
Cost Per Acquisition (CPA) provides a more comprehensive view of the real expenses involved in gaining new customers, making it a more effective metric for evaluating true marketing success, especially in challenging launches.
The Cost Of Curiosity
Festive Chickpeas came to our team in 2023 for help in launching their crunchy chickpea snacks in the US market. Chickpeas (garbanzo beans) are a popular food in India, but not as common in the average American’s diet. So the big challenge for Festive Chickpeas was to get new people, in a new market, curious and excited about a product that they’d never heard of.
This is such a major challenge from a marketing perspective because the “try hurdle’ is the biggest one to get over… It’s very risky and expensive to get people to try something brand new. So the question becomes: What kind of costs can we bear for getting new customers?
“That’s the tricky bit for brands doing a new product launch,” says our founder Rachel Johnson Greer. “They need to get new people to try their product, but an enthusiastic ‘sure I’ll try!’ is difficult to achieve.”
Often, consistent sales numbers for consumer packaged goods (CPG) brands like Festive snacks, comes from regular subscriptions as opposed to one-time purchases. Where the “try” demographic is the most risky and expensive, the “subscription” demographic is easy and cheap – no substantial ad spend needed. So our strategy for Festive was to budget for the advertising cost of acquiring new customers plus encouraging them to make repeat purchases. Getting new-to-brand people to love it and then locking in the ongoing subscription.
How do you introduce people to a brand new concept and get them to try it too?
Free trials give brands an opportunity to gather feedback from potential customers, and allow those customers to test a new product without any commitment or risk. Of course, it’s much easier to get those samples into their hands when you can just hang out at the mall in front of a Sunglass Hut and pass them out. But how do you accomplish that online? Samples and freebies are still the gold standard, you just have to get a little creative.
Oura Ring
Take the Oura ring for example. You may be familiar with “smart jewelry” that provides statistical insights into an individual’s sleep, fitness, and stress levels. And at around $300USD, it’s a very tough sell for someone who is brand new to Oura, and the technology as well, which is itself quite new. Three hundred dollars is a lot of money to just “try” something you saw online without knowing whether it will suit you or even fit you.
So Oura offered a sizing kit, the cost of which could be credited to the cost of the ring purchase, once you know for sure what size you need and whether you like the weight and feel of it. The kit comes with a plastic version of the ring in every size they make, so you get a really good idea of what to expect from the real thing. And if you don’t like it for whatever reason, you’re out a small amount of money and it was worth the try because now you know it’s not for you. You can even pass the kit to a friend who might be interested.
Blue Nile
Online jewelry retailer Blue Nile has run similar promotions in the past to get customers in the door, with a free ring sizing kit in exchange for a shopper’s email address and other contact information. You can learn a lot about a person by what kind of jewelry they are shopping for, and plan marketing campaigns accordingly.
PopFlex Active
Athleisure brand PopFlex Active gave away free branded tape measures. This way you can get accurate measurements in the comfort of your home while you shop their website. This takes the guesswork out of what size to order. Then, it helps drive shopper confidence, customer loyalty, and reduce returns all at once.
For Festive, we used the “hang out in front of Sunglass Hut” model, but with an ecommerce spin. Since Festive Chickpeas are a crunchy roasted chickpea snack, we placed awareness ads on Corn Nuts pages, a perennial favorite among crunchy snack lovers. We also aligned Festive with already-popular gluten-free products. Though chickpeas aren’t a part of the average American’s diet, they are indeed a staple of many gluten-free and vegetarian diets. So we put ads on pages selling chickpea puffs, chickpea flour, and other items that the target market is already inclined to purchase.
“No matter what category they sell in, new brands must find a way to drive interest in trials if they’re not offering a commodity.” – Rachel
Opportunities Abound With A Focus On CPA
Work with advertising agencies that know what they are talking about.
We love to work with Myan Advertising as often as possible because their software model is based on profitable growth. Most ad agencies are focused on advertising growth because they are incentivized by percentages. This is the wrong thing to zero in on. Spending more money on advertising doesn’t inherently make your business grow.
If an ad agency is trying to drive profits, then they’re paying closer attention to shopper behavior. This is where all the opportunities are. They’re not as focused on the dollar amount they should spend on advertising.
The best way to tighten up your advertising strategy and streamline your budget is to maximize what Amazon’s A9 search engine is doing, which is evaluating based on conversion rates. If your advertising agency is focused on a good return, thanks to a good understanding of shopper behavior, they’ll get better results.
How do they define success?
If an ad agency defines success around ROAS versus engagement, that’s a red flag.
Engagement is what helps Amazon’s business grow. ROAS is merely a measurement of efficiency. Therefore, defining your brand’s success on Amazon (a platform motivated by engagement) by a strong ROAS (a reporting metric of sales resulting from ads you were pretty sure were winners anyway) is not the way. Tracking and optimizing for ROAS is essentially the availability bias at work. It’s a metric that’s there, and it’s easy to track, so it must be a thing we should track. ROAS is a metric that doesn’t give your brand any strategic or actionable data. But because it’s a report of what worked (it’s right there in the name: Return On Ad Spend), it’s a great one for an ad agency to point to if they want to justify ad spend and keep their position.
When choosing an ad agency to work with, you want to hear them talk about new to brand customers, and what kind of engagement they hope to get. They should talk about total media spend, and be curious about your brand share of spend. You want to hear them talk about what your conversion rates are on ads, and plans for your new-to-brand customers.
A great ad agency will know where your brand currently fits into the landscape, and understand what the goals are. Are you totally new on the market? Festive is a startup with a new market full of people to get in front of. This is a tough place to be, so tread carefully. How do you get customers in the door? The right advertising partner for your brand will have some compelling answers to that question.
Know your numbers
One of the biggest missed opportunities for brands is getting a clear picture of their finances and then forming a realistic plan that will give them the biggest bang for their advertising buck.
It seems so elementary, but it’s crucial that you arrive at a sustainable monthly advertising budget. The one big unknown is how long it will take for your ads to reach that critical mass where you’re in the top 5 search results and really selling through stock. So, sustainable is the operative word because it may take some time.
And, as we already know, the hardest scenario is a new brand trying to break into a new market with a new product.
Though awareness ads are some of the most pricey, that’s what was needed for Festive to get in front of the Corn Nuts fans, and the gluten-free eaters. Because we initially had no share of the US market, we had to pay to play with the big brands that already do.
Another important piece of the puzzle is getting social proof by working with the right influencers, creating content about your product and using the specific generic keywords that you want to rank for. Their content will be indexed by search engines, so you’ll get an SEO lift for those keywords.
When the whole plan came together for Festive, we hit new sales highs, and promptly sold out of stock. We were so successful that Festive had to go back to the drawing board and figure out how to scale their whole production. More on that later.
It has been said that it’s impossible to launch new products in new categories on Amazon. But that’s really not true. What you do need is a fairly large marketing budget, which is quite normal for any product launch whether it happens on Amazon, Facebook, YouTube, or any other platform. A monthly advertising budget of about $5,000 USD seems to be the minimum for these kinds of launches. This is because it costs so much to hang out on competitor pages.
“I don’t think Amazon’s barrier to entry is any worse than other platforms,” says Rachel. “Bottom line, the product is still a completely new thing that shoppers must be made aware of, no matter where you place it for sale. Brand awareness is the difficult and expensive part.”
Why CPA Outshines ROAS: A Comprehensive Metric for Profitable Ecommerce Growth
CPA is a critical metric for ecommerce brands, because unlike ROAS, which focuses on the revenue generated per dollar spent on ads, CPA provides a clearer picture of the actual cost to acquire a customer. It takes into account all costs associated with acquiring a sale, including advertising, promotions, and other overhead expenses. CPA shows the true financial impact of marketing efforts and helps brands set realistic budget limits.
ROAS, on the other hand, is often misleading because it only considers ad spend and revenue generated from ads. It doesn’t account for all sales-driving factors, nor does it differentiate between high-margin and low-margin products.
By focusing on CPA, brands can better understand their customer acquisition costs, optimize campaigns to target high-value customers, and achieve sustainable growth too. So after taking advantage of all advertising opportunities that fit our budget for Festive, we watched closely as the metrics began rolling in.
Some of the most important KPIs to keep an eye on are:
- ROAS
- Ad spend
- Ad sales
- Advertised-to-organic ratio (how much came in through ads versus how much came in organically)
- New to brand orders
- Repeat orders
- Cost Per Acquisition (CPA)
The CPA numbers to zero in on are:
- Advertising CPA – should not be more than the lifetime value of the customer.
- Account CPA – needs to be below the product’s profit margin after the initial launch period.
As a brand it’s imperative to look at the most important metrics for growth. Not just the things that are easy to track. We have a special formula for that, but really, for any brand, it all comes down to making strategic decisions based on the data that’s coming in.
Strategic Moves To Validate & Optimize Ad Spend
One very important lesson from the Festive launch is to have faith that your efforts will gain traction… it’s just a matter of time. Here’s a snapshot of 2024’s numbers.
In September of 2023 we began the process of getting brand awareness in the US market for Festive. The plan was simple: great content, convincing reviews, and social proof.
The first order of business was to make a page that would appeal to our particular demographic, based on our research, and then run test ads to it and see if it worked. It doesn’t make sense to drive ad traffic to a page that doesn’t convert, so the key is to validate that the page is targeting the right customer, and they’re doing what you want them to do, before putting all your budget into it.
We also enrolled all of Festive’s chickpea snacks into Amazon’s Vine program so we could start getting current, real-world feedback and reviews from the US market. With that feedback, we updated the content, then ran more test ads to see if we could get more clicks than the first edition. After a few iterations, we were getting a high enough conversion rate on our target keywords to justify real ad spend.
As mentioned, a launch like this takes about $5,000 USD per month in ad spend. The test ads were in the neighborhood of around $500 USD per month. Relatively speaking not a lot of money, but necessary to get the important answers.
Flashover
In late 2023, once we had a page with ads performing at a solid baseline, we graduated it to our preferred ads partner Mayan Advertising, who began aggressive awareness and keyword targeting, which started getting us the traction we were hoping for.
In January 2024, we launched a 2 week influencer campaign. By February we began seeing good results on an ad that we launched in January targeting our top chickpea keywords, the same ones we had our influencers use in their UGC. That ad did well through March, then in April, as you can see in the snapshot above, we got our sales boom.
To some degree, that boom is to be expected. If you have created good content that people consistently take action on, that has the right keywords and the right influencers saying the right things about it, it’s only a matter of time before word spreads and you see a lift in sales. But how long that takes, and how big the boom is, are the unknowns.
Perhaps you’re familiar with the term “flashover”, as it relates to fires in enclosed areas. When a fire ignites, it burns what is next to it first. But at some point, everything gets so hot that it becomes engulfed in a big flash of fire.
The same process happens with advertising, but with a lot less drama, and without damaging your stuff. In fact, in the beginning, watching ads do their thing is almost boring.
At first it’s just an outlay of cash to gain brand share. Sticking to the strategy, and moving up the ranks slowly. Eventually one day you hit the top 10, and finally some movement begins to happen. Placement in spots 1-4 is when that flashover occurs. This is especially true if you happen to get Amazon’s Choice for a particular keyword. If that happens, it’s normal for sales to explode 10-20x.
It bears repeating that it’s tough to predict that flashover point. But if you are consistent in your sales and conversion rates, eventually, you will overtake your competition because that’s just how Amazon works.
If your brand does a better job than others at converting, then Amazon is more likely to get their commission off of you in particular. So they’ll give your brand a prime spot no matter how big or small you are. That’s how no-name brands beat out bigger brands all the time on Amazon. They simply do a better job of targeting and converting their customer. Hit one of those Top 4 spots, and it’s time to hope you planned well for it!
A lot of faith, but not a lot of math
Many sellers say they want to double or triple their sales, but what does that really mean?
For Festive, we got the market share we came for. But unfortunately, we quickly learned that their processes had not been scaled to the sales level that we were hitting regularly. So there were some growing pains to work through, including stock outs which are not ideal on Amazon.
When we dug deeper, we realized Festive, in spite of their success in other markets, had never planned for the flashover. So there were questions to address, like: Could the factory handle that much production? What about the logistics of moving that much product? The costs associated with storage? Shipping?
We offer a 3 year pro forma to help our clients plan ahead for success. This is key, particularly in terms of production. With it all mapped out, we know what needs to be in place in order to sell at any particular velocity. We can go with a low pro forma, if the money isn’t there for things like investing in equipment. Or, we can dial it up too if that’s feasible.
When you achieve the velocity you’re shooting for, it’s crucial that you know what exactly it will look and feel like.
With the right marketing and advertising, it’s only a matter of time before you hit that flashover point. But can you handle the growth you are headed toward? Be ready! It’s important, and maybe even fun, to look at the possibilities.
“Most people are so worried about failure that they don’t even think about the problems of success” – Rachel Johnson Greer
Why CPA Matters: The Compass for Strategic Growth
Embracing CPA as a primary metric for evaluating marketing success can transform how your brand approaches new market launches and long-term growth strategies. It certainly did for Festive.
Unlike ROAS, which often provides a narrow view of ad effectiveness, CPA offers a holistic perspective on the true costs of customer acquisition, allowing for smarter budgeting, targeting, and scaling decisions.
Festive’s US launch underscores the importance of looking beyond conventional metrics to understand the complete impact of your marketing efforts. By focusing on CPA, we can navigate the complexities of market entry with confidence, drive sustained growth, and ultimately build a stronger, more profitable presence in any market.
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At Troveres we help brands articulate their story in unique and beautiful ways that utilize strategic, data-informed steps that drive engagement and increase conversion rates. Our content strategy was developed by former Amazonian of eight years Rachel Johnson Greer, who was part of Amazon’s private label team for more than two years, developing and maintaining brands with hundreds of products across dozens of product lines. Click here to download Rachel’s guide to Content Marketing That Converts for free.
