How do you build a DTC offer that raises profit without hurting conversion rate?

Simplify the offer so a shopper understands it in seconds, then raise MSRP so you can show a bigger discount at a higher final price. The offers scaling DTC brands run today are buy more save more, a discounted first subscription order, or tiered dollar-off bundles. Brian Ng of Digital Ride raised one brand's MSRP to $74.95 behind a 50% discount and saw conversion rate hold steady while the brand moved from a monthly loss to profit.

In this episode, Andrew Foxwell, Brad Ploch and Zach Stuck talk DTC offer strategy with Brian Ng of Digital Ride, covering how to raise prices without losing conversions, the three offers scaling brands run right now, and how a $10M a month brand manages creative with outside agencies. You'll learn why raising MSRP behind a bigger discount can lift profit at the same conversion rate, how to test a new offer with a single URL parameter, and why more creative volume often makes performance worse.

We discuss:

• What a bad DTC offer looks like, and why confusing offer pages lose the sale
• The three offer structures scaling DTC brands use: buy more save more, subscription-first, and tiered bundles
• How Brian raised MSRP to $74.95 behind a 50% discount and turned a monthly loss into profit
• How to test offers with Convert or Intelligems experiments versus sending ads to a new landing page
• How to forecast ecommerce revenue year over year and why you shouldn't scale before new customer ROAS is there
• Running a $10M a month brand's creative through three agencies with no in-house strategists
• Pricing psychology: why $39.99 beats $35.99, and a $30 price change that lifted profit per session 40%
  

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This episode of the Scalability School podcast is sponsored by NorthBeam and they just launched Northbeam Incrementality. Northbeam Incrementality gives you easy, automated, self-service incrementality tests, while protecting you from the major mistakes so many people make while running incrementality tests. Your MTA handles the daily tactics, your MMM guides the long-term planning, and Incrementality provides the causal truth. It's a closed loop that allows you to scale what works and cut what doesn't. Right now when you head over to www.northbeam.io/incrementality, they're offering Scalability School listeners 50% off unlimited tests for a year when you join. Just tell them we sent you!

To connect with Brian Ng: https://x.com/briannjho

To connect with Andrew Foxwell send an email Andrew@foxwelldigital.com
To connect with Brad Ploch send him a DM at https://x.com/brad_ploch
To connect with Zach Stuck send him a DM at https://x.com/zachmstuck

Learn more about the Foxwell Founders Community at https://foxwellfounders.com
Learn more about the The Hive Haus Creators Community at http://HiveHausUGC.com

Scalability School is the podcast for media buyers, agency owners and DTC operators who want to grow without guessing, hosted by Andrew Foxwell, Brad Ploch and Zach Stuck.

Chapters

00:00 DTC offer strategy: why $39.99 beats $35.99
02:35 How Digital Ride grows DTC brands as a growth partner
05:27 How to forecast ecommerce revenue year over year
08:56 Can creative agencies replace an in-house creative team?
14:26 How much creative a $10M/month brand launches
22:29 The 3 offers scaling DTC brands run right now
23:55 How to test a new offer: Convert experiments vs new landing pages
25:29 How raising MSRP turned a monthly loss into profit
30:25 Pricing psychology: the $30 price change that lifted profit 40%

How do you scale a subscription app with Meta ads?

Start with an offer whose value is obviously outsized for the price, then test the packaging rather than the product. Format Finder moved from a single $97 plan to $29, $59, and $97 tiers, and the single change that moved AOV the most was toggling annual billing on by default. Free trials failed outright because the cost to acquire a trial on Meta never backed out. Target customers with a need rather than a want, since need-driven buyers churn less and complain less, and turn your best users into your ad creators by paying them a percentage of the spend their ads carry.

Scaling a subscription app with Meta ads comes down to the offer, the pricing
packaging, and where the creative comes from. Brad Ploch and Zach Stuck sit down
with Naveed, who went from affiliate marketing to a 45-person performance agency
to an ecommerce brand to Format Finder, the app he built in three weeks and now
runs at $20,000 to $25,000 a day in Meta ad spend. You'll learn how he builds an
offer, the pricing tests that worked and the one that failed, the campaign
structure behind the spend, and the creator flywheel that turns his own users
into his best-performing ads.

We discuss:

- How to tell whether an offer is worth running before you spend a dollar
- Why problem-solution fit matters more than unit economics at the start
- The move from a single $97 plan to $29, $59, and $97 tiers, and why the free
trial never backed out on Meta
- The pricing change that moved AOV the most, and it was not the price
- Why customers with a need churn less than customers with a want, and how a
realtor funnel tested that theory
- Why he runs one CBO split by geo, no ABO testing, and no interest targeting
- The creator flywheel: users who hit a million views make his ads and take 5%
of the spend those ads carry
- What a one-click AI video editor actually costs to run, and how SaaS margins
survive per-user API fees
- How he runs the ad account, customer service, and product development through
AI agents in Telegram and Slack
- Why the harness around the model matters more than the model

Subscribe for a new episode every week.

Get the newsletter: https://www.scalabilityschool.com/scalability-newsletter
Learn more: https://www.scalabilityschool.com

Connect with Naveed https://x.com/navuud
To connect with Andrew Foxwell send an email Andrew@foxwelldigital.com
To connect with Brad Ploch send him a DM at https://x.com/brad_ploch
To connect with Zach Stuck send him a DM at https://x.com/zachmstuck
Learn more about the Foxwell Founders Community at https://foxwellfounders.com
Learn more about the The Hive Haus Creators Community at http://HiveHausUGC.com

Scalability School is a weekly show from Andrew Foxwell, Brad Ploch, and Zach
Stuck about what is actually working right now in DTC growth. No theory, no
recycled LinkedIn takes, just the numbers and decisions behind real brands and
real ad accounts.

Chapters

00:00 How to scale a subscription app with Meta ads
00:29 Meet Naveed: Switch Research to Format Finder
02:45 From affiliate marketing to a 45-person performance agency
04:06 Getting banned by Meta and what it exposed
05:45 Why the ecommerce inventory cycle burned him out
08:10 How One Peak turned viral videos into a course business
10:10 Building Format Finder in three weeks with AI
11:50 What the app does, from format quiz to finished cut
13:15 Why the offer is the biggest lever nobody talks about
16:18 How to price a subscription without killing conversion
19:15 The pricing change that moved AOV the most
19:55 Why customers with a need beat customers with a want
22:05 A word from Northbeam
23:20 Why your ad does the targeting, not your audience settings
24:45 Ad account structure: one CBO, no ABO testing
25:31 The creator flywheel: paying users 5% of ad spend
28:35 How the video editor cut churn and unlocked scale
29:35 SaaS margins when every user burns API tokens
32:50 Why the TAM for creator tools is enormous
37:50 Running ads, support, and dev through AI agents
42:00 Where to find Naveed