eCommerce competition is heating up! Black Friday, Cyber Monday and Christmas are all around the corner. This means that the competition is running more ads, spending more and they’re running aggressive promotions. And customers have come to expect it.
Unless you are selling something so unique that you have no competition, then the reality is that you’ll have to use the same strategies of running ads and e-mail campaigns offering discounts.
So how can you win if you’re playing the same game as everyone else and have to run the same strategies?
You play the game smarter.
We’re going to look at how to run the perfect promotion for your store that will get people buying and making you a healthy profit. We’ll break down:
- How to design the perfect promotion
- How to market the perfect promotion
Designing the promotion
Here, we need to design a promotion that is both attractive to the potential buyer, and also one that makes you money – it’s a tough balance.
If it’s too aggressive, you’re going to lose money, and if it’s too conservative, you’re going to be leaving sales on the table.
Marketing the promotion
The next step is getting this promotion in front of the right people. We have to answer two key questions:
- Who do we target?
- How much do we spend on it?
There is an old adage that it costs 5 times as much to sell to a new customer than to an existing one. The real multiplier could be as high as 25x depending on your sector or niche.
That principle applies to our targeting. It’s going to be cheaper to sell to our existing customer base than to a brand new one. Offer well-designed promotions to your existing customer base.
Of course, that’s a well that can be quickly run dry.
The next well to move to are Similar Audiences and Lookalikes. They won’t be as cheap to sell to as your existing customer base, but it will be much cheaper than a stranger.
The next well to move to dive deep into your customer data. Use the data points to create audiences that reflect your most avid customers.
ROAS is a lie that won’t help you make smart choices this sales season. We’ve got a post coming up that will dive deep into why. One big reason is that marketing attribution is a lie.
For now, we will tell you what you should be doing: setting the total ad budget as a percentage of total revenue.
If you’re in the B2C eCommerce space, you’ll probably need to spend up to 20% of your revenue on marketing and advertising. However, that doesn’t mean it’s actually a good idea – you could well be selling at a loss.
To figure out the right percentage amount, you’ll need to calculate the unit economics of your business. We can help you figure that out with our free Unit Economics Analysis.
Figuring it all out
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