Sales, marketing and growth
We have received several questions from shareholders about expansion in Europe, sales and expectations for further growth. In addition, we have received questions about product, technology, customer service and how Lildog differentiates itself from the competition. In this update, we will talk about sales, marketing and expansion this October, before we will shortly come up with a new update where we answer questions related to product, technology, customer service and the future.
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Sales and growth – on the way to profitability
Since we started marketing and selling Lildog 2 in August, growth has been both strong and stable. We are increasing the number of paying subscriptions (APS) and monthly recurring revenue (MRR) day by day. With a low number of cancellations, i.e. low churn rate, subscription revenue is continuously accumulated. New revenue is continuously added on top of the existing one, which provides the stable and predictable growth curve.
If the current trend continues, we are well on our way to reaching our goal of 10,000 active subscriptions just before the New Year. It is not a question of if we will reach the goal, but when. We are also on the verge of reaching profitability, which will give the company a significantly better valuation.
Although we reduced some of our paid marketing in October to preserve liquidity, the positive trend continued. We shifted our focus to partnerships with stores and outlets, a much more cost-effective strategy that has already yielded good results. It does take a little longer for these sales to show up as active subscriptions, but experience shows that this provides more stable and lasting growth.
Trust and conversion
In Norway, we continue to sell very well, with low cost per customer and high conversion. This confirms that both the product and the brand have high trust in the market.
Abroad, we see a high click rate, which shows that there is great interest in Lildog, but the purchase rate is lower than in Norway. This is natural in new markets where trust in a new brand must be built up over time. To increase conversion, we are actively working to connect with well-known people with professional authority and local partners who can strengthen trust in each individual market.
International expansion
Sales on Amazon in Germany and France continue to grow, and the development is very positive. The biggest challenge in this phase is building trust in new markets – which is completely normal for a young international brand.
Our Amazon partner has put us in touch with the PR agencies that were previously behind Fitbit's success on Amazon. Fitbit was later sold to Google in 2021 for around NOK 200 billion. These agencies have extensive experience in creating impact through affiliate partnerships, mentions in technology media and independent product tests.
We plan to bring them in when we are ready for a broader push, but for now we are focusing on targeted campaigns to build volume and visibility. In November we are running promotional prices on Amazon in Germany and France to increase sales and get more active users in these markets.
At the same time, BOL.com in the Netherlands has received its first deliveries from us. Sales will start in November, and a campaign is also being launched here to ensure a quick start and strong visibility in the market.
Marketing – from interest to purchase
We divide marketing into three phases, often visualized as a funnel :
Content production and advertisements
Our experience is that quantity often trumps quality when it comes to ads. We rarely know in advance which ads will perform best, so we run many variations to identify the winners with the lowest cost per sale.
We use Notion to track and evaluate all campaigns based on key metrics like click-through rate (CTR) and cost per customer (CAC). For video ads, we also analyze “hook” – how many people watch more than three seconds of the video – as an indicator of how well the content is capturing attention.
In October, we reduced some of the production costs for new content, which resulted in a slight decrease in sales compared to September. However, we maintained a steady sales rate throughout the month. The strategy in October has been to focus on the best performing campaigns (Winners), while continuing to optimize ads in the “Above Average” and “Average” categories.
Below you can see a screenshot of some of the ads from October:
If we click on one of these ads, we will then see how each ad performs based on our metrics.
Email marketing
We recently set up automated email flows tailored to different groups – such as newsletter subscribers, customers who have added products to their shopping cart, past customers and social media followers. Each group receives a customized series of emails with a different message.
For example, customers who cancel their subscription due to subscription cost receive a different follow-up series of emails than those who cancel due to functionality. Here too, we follow the principles of the marketing funnel, with more promotional content for those who are closer to a purchase.
In October we sold approximately 230 products worth 117,100 kroner through the newsletter, in addition we sold around 120 products via other email campaigns.
New partners
In October, we shifted more of our focus to partnerships and distribution. This fits well with Black Friday and the Christmas season, while also being a less capital-intensive strategy than pure digital advertising.
We have entered into an agreement with the Buddy and Pets chain, which has recently merged to form what is probably Norway's – and perhaps the Nordic region's – largest pet store chain. Initially, the stores are free to test our products, but so far everyone we have been in contact with has agreed to take in a smaller batch. The experience from the collaboration with PetXL shows that this can be a very good and long-term collaboration, as pet stores often have a high level of trust among pet owners when it comes to the products they recommend.
Elkjøp has placed several orders in October, confirming that our products are selling quickly off store shelves. Orders are now coming in both more frequently and in larger volumes, and Elkjøp is establishing itself as a very important sales driver for us.
In addition, we have received new orders from Dyrego stores and a number of independent pet stores, confirming the increasing demand in the Norwegian market. FirstVet in Sweden has also increased its purchases significantly in October, and we expect further growth and increasing volume towards the Christmas sales.
We are also testing collaboration with large Facebook groups for dog owners, where we reach highly engaged target groups. Among other things, we have entered into collaboration with the Nitro group in Norway and Vi finder hund in Denmark. The Nitro group will have its own stand at the Oslo Dogshow, where they will present Lildog and offer member benefits. This will be a good test to measure the effect of collaboration with such communities.
Furthermore, we have intensified the dialogue with Dogman and their stores in the Nordics and Spain. Both Dogman stores in Spain have now started selling Lildog, and we have already had our first sales in the market with very good feedback. We plan to translate the website into Spanish during November in order to be able to test ads in the Spanish market before Christmas.
Telecom
We are still experiencing some technical challenges in our collaboration with Elisa, who want to offer Lildog and Lilcat to their customers. This is a potentially big deal for us. Our developers are therefore traveling to Elisa's headquarters in Tallinn to solve the last challenges together with their technical team. The goal is to ensure that Elisa's SIM cards work seamlessly in our devices. Elisa has already tested our products and is very satisfied.
Bite in Latvia has also successfully tested Lildog and Lilcat, but is not ready to launch this yet. Our distributor in the Baltics is now in talks with Telia in Lithuania where we are discussing a collaboration across the Baltics at an earlier date, instead of waiting for a possible later Bite launch in Latvia. A possible plan is to visit Telia at the same time as we are in Estonia visiting Elisa. Both of these collaborations have the potential to be very important for Lildog in the future.
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Investor Update - Technical