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Think You’re Ready to Scale? Check These Metrics First!

DimNiko | Analytics

Profitably scaling campaigns is probably the main hurdle that every business that wants to grow has to clear. It’s one thing to spend $200 a day and stay in business, quite another to achieve the same returns spending $2000 or $4000. Here I’m going to take you through the metrics you need to pay attention to, the ‘early warning signs’ of a bad campaign, the key indicators of potential and the techniques for managing spend so you don’t empty your wallet chasing a unicorn. 

How People Are Reacting To Your Ads

First, you need to know how users are reacting to your ads: are they visually appealing? Do they give enough information? Are they attractive propositions? The base metric for this is the CTR (link click-through rate). This shows what percentage of impressions result in a successful click. CTR is a great early indicator of the success of your ads, but be careful: a higher number doesn’t automatically mean your ads are kicking ass, just that they are engaging with users. 

The distinction? The purchase conversion rate from those clicks. It would be far better to have a CTR of 1% and a conversion rate from those clicks of 5% than a CTR of 5% and a conversion rate of 1%. Trying to scale with such a minuscule rate of conversions is going to cost a fortune, and in the initial phases you are likely to see a drop in both CTR and the conversion rate from clicks anyway. Audience quality matters. So does website quality. A low conversion rate from clicks indicates several things, but the most likely are that your website does a bad job of completing the customer journey and that the audience you are delivering to the site is of a low quality. 

Audience Quality and Ad Effect

This takes us to the second ‘early warning’ sign of your campaigns – the Add to Cart and Initiate Checkout metrics. These are useful as they can give an idea of audience quality and how effective your ads are before purchases start coming in. If users are converting well on these events it indicates a level of intent that goes beyond merely browsing. Furthermore, if users are adding to cart at a high rate but not following through with the purchase it may indicate an interruption or roadblock in the customer journey at either the cart or the checkout. The average cart abandonment rate for ecommerce is around 68%, so if your numbers are regularly exceeding this it may be time to analyse the final stages of your customer journey more closely. Maybe you’re charging too much for shipping or maybe you don’t have the right payment methods available? Keep an eye on these metrics as indicators of audience and website quality alongside the purchase conversion rate.  

Cost Per Acquisition & Return on Ad Spend

Finally, we get to the meat: Cost per Acquisition and Return on Ad Spend (CPA and ROAS). Cost per Acquisition – how much you have to spend to make a sale – is probably your second-most-important metric, although this can depend on whether you have a single fixed product or sell multiple products which vary in price. Using your Average Order Value (AOV) as a guide, you can calculate what sort of CPA you need to break even and how much you need to spend to consider your campaigns worth your while. ROAS is the most popular metric – and for good reason! This is the return on your investment in one number. 1.5 means you get 50% of your investment back on top of the original amount, 2 means you’ve doubled the money spent and so on. It is the main reflection of the overall health of your campaigns. 

The above metrics are the big boys when it comes to scaling. Keeping them within acceptable ranges while you increase spend is how you scale. Inevitably, an increase in spend is accompanied by bloating in some metrics – notably CPA – and contraction in others – like ROAS. It’s important to see consistent results at least 15-20% ahead of your breakeven numbers for around 48 hours before you begin scaling, and try not to increase the budget by more than 25% each time. This will provide you with a good ‘buffer’ to absorb the initial loss of efficiency and will prevent Facebook from spitting out all of your cash in a matter of hours. Another handy trick is to implement a cost control on your bidding strategy. Once you have audiences and creatives that you know work, and are ready to increase spend, begin with a cost control of 3 times your expected CPA. Once you see regular results coming in, slowly bring it down until you reach around 1.5 times your ideal CPA. This allows you to scale campaigns – especially CBO campaigns – without the worry that you’ll check your ads manager in a couple of hours and see a catastrophic overspend on clearly failing ad sets. 

Audience Size & Quality

Two final metrics to consider are the Cost per Mille (CPM) – the cost per thousand impressions and Frequency. CPM varies depending on the value of the audience, its size and the quality and relevance of your ads. If your ads are solid but you’re seeing high CPMs, remember that this could indicate a smaller audience and therefore a limited scope for scaling your campaigns. A high CPM audience which converts at precisely the same rate as a low CPM audience will naturally have higher CPAs, so you will be able to piece this together from the metrics above – but looking to the future it’s important to know the value that Facebook places on your audiences before you start throwing money at them. CPM can grow very quickly if the audiences you are trying to reach are already saturated or if more advertisers are using the platform for a sales event like Black Friday or Cyber Monday. 

Frequency is the average number of times each person sees your ad. If this number is too high (normally more than 3) then it’s possible that you’re saturating this audience and risk exhausting it if you spend more aggressively. 

So there you have it. These are the metrics to watch to determine your ad quality, audience quality and potential and whether you’re scaling or slipping. If you want to chat and see if we can help grow your business, you can click below and see if you qualify for a call!

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Are You Spending Too Much On Retargeting?

DimNiko | Spending Too Much

I know. You’re probably thinking ‘Hell no! That’s where my best margins are!’ but hear me out.

I grant you that Facebook’s native reporting, which is pretty reliable, will show much better numbers for your middle and bottom funnel campaigns as long as you’re doing them right. 

But what else are you doing to reach out to your audience? 

How to Reduce Spend on Retargeting

Here, I’m gonna tell you some important ways to wring every last bit of efficiency out of your retargeting so you can free up more spend for prospecting.

If you send emails, make regular social posts, deploy influencers or advertise on other platforms then how can you be sure that the attribution you’re seeing on Facebook really reflects the value of the ad? 

What if they got an email about their abandoned cart, clicked through and purchased. But earlier that same day they were shown one of your retargeting ads, which now scoops up the attribution for that purchase, despite the fact that it was your CRM that did all the work! 

Maybe your retargeting ad collected a whole load of clicks and a good number of conversions but then a perfectly-crafted and timed social post pushed just a few more of the clickers to convert. Your retargeting ads are gathering more attributions that don’t rightfully belong to them! 

Each and every interaction between your brand and your customers and prospective customers represents a marketing effort. 

“But how can we possibly tally these? How can I know whether my retargeting ads are actually generating the revenue they say they are?” I hear you ask.

Read More: How to Build Effective Retargeting Campaigns for Ecommerce Stores

Attribution Model

The first thing to consider is your attribution model. If you are using Google Analytics, for example, and your attribution model is ‘last click’, then 100% of the conversion will be attributed to the final click before purchase. This ignores all of the preceding interactions with the customer. 

What nurtured this lead into a purchase? What other channels influenced their journey?

Each brand is different, has a different purchase consideration time, utilises different channels and speaks to their audience in their own way; so there is no one-size-fits-all model.

There are some pricey tools out there for bespoke cross-channel attribution calculation, but you can get some very useful data with just the attribution models on Google Analytics: 

Time Decay, for example, will give the touchpoints closest in time to the conversion most of the credit. So the first click will be given much less importance than the last. 

Position-Based models will assign a percentage of the credit to the first and last interactions and split the remaining percentage between the interactions that occurred in between. If the customer clicked on a Facebook ad and later googled you and added to cart, then abandoned cart and later converted from an email reminder, Facebook and email would receive equal credit, with the remainder going to paid search.

These are just two of many ways that you can change how you compile data on your cross-channel marketing efforts. It’s important to find the one that best reflects the way in which you interact with your customers and the way in which they interact with you. 

Read More: How to Build Effective Retargeting Campaigns for Ecommerce Stores

The Hold-Out Test

Another way to determine the true effectiveness of your Facebook and Instagram retargeting would be to run a ‘Hold-Out Test’. This is where you use Facebook’s own A/B testing tools to compare people who saw your Facebook ads to a ‘hold-out’ group of 10% who did not. 

From here you can compare the lift in the rate of conversion between the two groups and decide whether the percentage your retargeting ads achieve is worth the investment. How much of the work is done by the retargeting ads? Do your customers prefer emails, SMS marketing, social posts? Do they like to google the companies they intend to purchase from and take it from there? 

Finally, there are ways that you can arrange your campaigns to complement other channels. Let’s say your remarketing emails achieve an open rate of 25%, and an overall conversion rate of 10%. What about the other 75%? What about the people who opened and didn’t convert? 

If you use Klaviyo, you can link this to your Facebook business manager and use these audiences of lapsed email recipients in their own special retargeting campaigns. If you don’t use Klaviyo, you can still upload customer lists and create the audiences that way. You’re able to address this audience specifically with ads just for them. 

Used together, everything here will give you a much better idea of where every dollar of ad spend goes and will enable you to streamline your retargeting efforts and pump more money into the acquisition of new leads. 

Accurate attribution is absolutely essential for maximising your ROAS and quickly scaling your ad spend. Using these tools and techniques you should test, test, test! There is no textbook for your brand and your growth, so you have to find out for yourself. 

A bit overwhelming? Understandable. Attribution analysis is one of the tougher aspects of media  buying. It takes an instinct developed through a lot of experience to read the data accurately and know what to do with it.

We have the most experienced media buyers out there, managing millions of dollars a month in ad spend and utilising know-how like this to scale eCommerce brands to the moon. 

If you’re spending over $500 a day and want to scale your brand, book a call below!

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How to Keep the Sales Momentum Going Through 2021

DimNiko | Sales Momentum

2020 has been the most unpredictable and volatile year ever for eCommerce marketing. A pandemic-induced depression coupled with mandatory stay-at-home orders changed audience sizes, drove costs down and then up, and permanently shifted users’ priorities. 

As we come to the end of Q4 with the year’s largest sales events, it’s crucial to think ahead to 2021. For many eCom brands, maintaining or building on the sales activity at the end of the year could be a matter of survival. The past 10 months have shown us how important it is to be able to pivot and adapt to circumstances outside of our control and there’s no reason to think that 2021 is going to be any easier! So here, I am going to lay out three important steps you can take to carry your sales momentum into the new year and beyond.

First: Amp Up Your Empathy

The brands that have survived and thrived this year have understood the value of placing the customer at the centre of their adaptations to the crisis of 2020. The marketing adage ‘Focus on benefits, not features’ should be tattooed on the inside of your head. How do we benefit the customer? If you have to develop new products or change the way you present your offer, it has to be an organic response to the needs of the customer – not a quick-fix adaptation to make your offer appear more relevant to present circumstances. The question you ask is ‘How can we help?’

Read More: Striking Emotion to Bring in 2MM Revenue

Second: Social Media is a Sales Channel.

Another lesson from 2020 has been the importance of brand storytelling. People need to feel a connection with your brand and to understand that ‘we’re all in this together’ isn’t just a glib slogan but the essence of your offer. Social media is the best place for you to disseminate brand stories to generate buzz about what you’re doing and keep existing customers interested. You can show off how your processes have had to adapt to the new normal, what #wfh life has been like for your company and elevate customer stories to celebrate their achievements and personal milestones. Combining this relatability with product promotions in regular updates will help keep your sales volume up into 2021. Along with your Facebook Ads and paid search, your social feeds should always form one of the most vital parts of your eCommerce marketing strategy. 

Finally: Test and Measure. Then Test Again.

Keep optimising your approach. Momentum is movement – a function of mass and velocity. You have to be improving constantly or you’re not actually going anywhere. In terms of a sales funnel we can break this down into volume, conversion and velocity. 

Volume: Make sure you’re not slowing down on prospecting. Maintain an ‘always-on’ approach to optimising campaigns: testing new offers, creatives, audiences and bidding strategies to grow the number of quality leads entering the top of the funnel.

Conversion: Understand the indicators of best performance as leads move through the funnel. Pay attention to the changes made at the top of the funnel (volume) and move quickly to understand how to nurture these prospects through your retargeting not just with Facebook Ads but with CRM, social media and other channels. 

Velocity: How long should your customer journey from introduction to purchase take? Are they moving fast enough? The longer they take, the higher the cost of sale. 

Momentum is a constant cycle of measuring, testing and optimising, moving incrementally closer to the optimal formulation for volume, conversion and velocity. In times of crisis and universal change, it’s more important than ever to observe and refine the micro and macro of your strategy.

Read More: Retargeting Offer Test: FREE Shipping or Discount?

Taken together, these three factors should help you kick your eCommerce marketing engine into high gear for 2021. Stay focused on the needs of the end user, build community and loyalty with brand storytelling and constantly measure and adjust your approaches to maximise efficiency. 

If you want to chat and see if we can help grow your business, you can click below and see if you qualify for a call!

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Community: The Missing Piece of the Growth Puzzle

DimNiko | Building a Community

Contrary to what the gurus tell you, and what too many ecom business owners often believe, there is no one-size-fits-all formula for growth, known only to a select few high priests of digital marketing. There are no magic campaigns or audiences or even creatives that will take your brand from 0-60 in under 4 seconds. 

But let’s say you have an awesome product, quick fulfilment, your customer service people are shit-hot and your marketing is generating interest in your offer. Growth should just happen, right? Those are essentially all of the main things. 

But it won’t. 

And if it does, it won’t happen quickly. 

And if it does, it won’t be sustainable. 

Offering Something More Than a Product

If you’re operating in a competitive marketplace, where people have other options besides your product, you need to offer something more, something to give them a personal connection with your brand. The ideal situation is not to be selling products to customers, but a relationship with your brand. This is how you guarantee lifetime values and sustain growth beyond finding more and more new audiences to sell to once and never hear from again.

Gymshark is the oft-touted example of how effective community management helped grow a brand from some dude’s garage into a global superstar. But affiliate marketing is only one particle of your community strategy – and sometimes it’s not even an essential one. 

It’s not about having a trustpilot, a blog or customer reviews on all your products either. These are just essential tools for demonstrating social proof. What’s so often missing is that crucial X factor that keeps customers coming back, telling their friends about you and posting about you on their social media accounts. 

Let’s say you sell lemonade. You might have a few things that separate you from your competitors – maybe it’s cloudy, maybe your production methods are eco-friendly or you use half the sugar for the same taste. Okay, but the high price point and waiting for deliveries will begin to bite after a while, especially when a similar thing is available for next to nothing in the supermarket. People lose interest.

Read More: How to Use a Facebook Group to Grow Your Business

How do we stop this drop off?

How do we maintain these customers so we can focus on growing into new audiences? 

The thing is, this isn’t offering anything new. Even if all the criteria mentioned above are met. Your customers don’t feel any connection to your brand, just a short-lived delight in your product. So why not talk to them? Why not make yourself a hub for lemonade connoisseurs?

Celebrate your customers – post about them on your social feeds, ask for their own content to use in ads, poll them on what they want to see. A switch from bottles to cans? New flavours? Which flavours? If you need models – ask your customers! Everyone has an opportunity to get involved and feel that they contributed to your brand’s success. Offer a prize for whoever can write the best or funniest description of your hero product and post it on the website. 

Read More: How to Use Social Media For Increasing Brand Awareness

You could make them feel like they are members of an elite club. Offer memberships for discounts or exclusive early product launches, present your product as the real deal, the one for the connoisseurs or the hardcore

Creating customers who feel like they own a bit of your brand doesn’t make them entitled or ungrateful but loyal and obsessed. They want the latest offering every time. They want to keep up, to show off, to be hooked up to the community and have their say on what they want you to do next. These customers will voluntarily sell your brand for you

Whether you create a community of loyalists like Apple, a community of hobbyists, like Gymshark, or a community of cheerleaders like Snag Tights, you’re ensuring the survival and vitality of your brand. 

Want to learn more about sustainable growth and how we can help build your brand into a genuine powerhouse? 

Book a call below: