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Shalmie PPC Blog
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You’ll get expert advice on topics to help grow your business today.
Are you struggling to make money with your Ecommerce business?
Do you ever think that perhaps you are too close to your company’s operations and need to step outside the bubble to get the full picture?
Or do you just feel completely unsure of whether or not your acquisition strategies are having a net positive effect at all?
If you answered “yes” to any of those questions, it’s time to think about some fundamentals regarding Ecommerce marketing.
So let’s get into it.
You can skip the intro if you want to get right down to the nitty gritty.
Tell me if this scenario sounds familiar to you: You came up with a great idea for a category of products to sell online. Maybe you discovered a fantastic niche or dreamt about financial freedom, or maybe you just had a passion for making beautiful products? You envision people lining up to buy your product.
One of those friends or family members probably made this suggestion: “Hey, why don’t you just throw up a Shopify site and see what happens?” So you took that advice and started playing around with Shopify themes, and seeing how easy it was (which it really is), you pushed forward with your dream.
You got excited each step of the way, whether it was making a minor tweak to your online store’s category pages or starting your company Facebook page or signing up for new accounting software to track your revenue and expenses. Okay, maybe that last part would only be exciting to geeks like me. In any case, you’re feeling amped at all the prospects and the possibilities that the future may hold.
You make all the preparations to launch your Ecommerce store. Not just a store, but a “startup”- an idea you’ve become so enamored with, you just want to say it over and over again. “Startup! Startup! Startup! I have a startup!” You think you’ll soon be sipping cocktails at some Bay area mansion, a la HBO’s Silicon Valley.
How the hell am I even supposed to get people to my site?
You have this epiphany: The notion of build it and they will come is utter bullshit.
Brushing off your momentary feeling of despair as fleeting, you set up a meeting to talk to Jon. You meet up with Jon, who happens to work at a large luxury fashion brand corporation.
Jon, while not quite a marketing veteran, has a decent amount of knowledge, so he gives you a broad overview of traditional media vs digital advertising, traditional digital advertising vs new digital advertising, and so on. Thinking it’s always easier to understand things with concrete use cases, you start asking him questions about how his company does marketing and your head begins to spin.
You suddenly realize that none of what a multi-billion dollar company like his does for its marketing actually applies to your startup.
You say this to Jon and as soon as he hears the term “startup”, the phrase “growth hacker” gets mentioned. You go home and start googling “growth hacking”. You read articles all about the concept of growth hacking, and how all these phenomenal startups succeeded through growth hacking and think, “I gotta get me one of these growth hackers.”
You put an ad out on Angel List and you interview a bunch of people. They throw out phrases like acquisition, activation, revenue, retention, referral. You think it sounds smart, and you even start to believe that one person can do all this.
But here’s what you don’t realize. The term “growth hack” has become a buzzword to mean “generalist”. Generalists are great at knowing a little bit of everything, but horrible at knowing a lot about anything.
This model is great in theory, because with software at its base you only have to build it once so it exists, and then you can sell it. Of course, to keep customers happy, it needs to work and keep getting better to retain users.
The nuances of running a store are completely different. There are tons of variables with buying and selling physical products, not to mention fulfilment and delivery. Subscription Ecommerce is slightly more similar to tech startups since, like SAAS, they try to get you to become a recurring customer. But maybe that model is to blame for muddling up all these how-to articles as a one-size-fits-all.
Subscription Ecommerce is vastly different than your catalog Ecommerce store. Catalog sales usually refer to selling multiple physical products. Think of it as a traditional “shopping” experience.
Marketing and sales strategies differ greatly depending on whether you work at a B2B software company vs B2C subscription Ecommerce vs B2C catalog sales (B2C). Which leads us to this bold sentiment:
Your Ecommerce store is a business, not a startup.
Start thinking of your company more as a business and less so as a startup – and all the allure that comes with that. If you do this, believe me, you will be much closer to success. The basis of business is simple: Profit and loss. Your end goal is sales, right? You should always be thinking, “Is this actually going to bring me more sales and even more profit?”
The above points will help you understand your position in the market. Having this knowledge will enable you to know where to allocate your marketing investment. It’s all fine and dandy to set a goal for building a great brand and spending money to do so.
In many cases, spending money on a “brand” is a means to an end – the end being more sales. But just keep in mind that focusing on ROI from the top down will allow you to build up your profits, which in turn will give room to less efficient branding tactics.
With these first principles in mind, here are some practical tips to staying profitable.
Consider Amazon: If your own Ecommerce site isn’t moving the needle yet, move the cart to the back of the horse. Or if you haven’t begun building an Ecommerce site, use Amazon as your minimal viable product testing ground.
According to a recent study, Amazon grabbed 44% of all online sales in 2017. And according to Market Pulse, 140,000 3rd party sellers surpassed $100,000 in sales in 2017.
While Amazon is certainly a beast and has no need for more market share, they have Ecommerce down to a tee. Their reach is enormous and their website is optimized to hell for conversions. You can list your products for free and Amazon can take a commission anywhere from 8% – 15% on most products.
Amazon’s FBA program (which stands for Fulfilled by Amazon) lets you store your products in their warehouse, and they fulfill and ship your products to their customers for a fraction of the cost you would pay if you did it yourself. They even take care of all the customer service, so it’s really a sweet deal.
Even sweeter is that participating in the FBA program automatically makes your products Prime eligible, so customers are more likely to buy your product because of free 2-day shipping.
With FBA, your product is also eligible for placement in what Amazon calls ‘the buy box’.
This is very important, because this means that customers who come to their product page can simply add-to-cart. Otherwise, the only way to get to your product is to click something like, “New (36) from other sellers” if you are selling a brand you don’t own. If your product is completely yours, without the buy box, customers will see that pesky “See More Buying Options” button which takes you to another page.
Pro tip: The majority of customers simply perceive they are buying directly from Amazon when they add-to-cart. If you don’t have the buy box, it’s obvious to them they’re buying from a 3rd party and they’re less likely to purchase.
Owning The Buy Box allows you to run ads with Amazon PPC ads through their Amazon Sponsored Products program. It’s not enough to just list on Amazon. Amazon is comprised of so many similar products in each category, that you may be just one out of five hundred others in the same category. Yeah, yours may be far superior, but it takes a while to ramp that up.
Running ads on keywords allows you to show up on top of your competitors.
What’s also great about this is that you know people clicking your ads are already qualified. People come to Amazon to shop! On Google, they may just be doing research or maybe they’re not looking to buy at all. Maybe they just want to know who invented that toilet scrubber product.
Increasing visibility on Amazon is all about sales rank.
There are many steps to improving your sales rank on Amazon. You may think product visibility is based on reviews, but reviews play a tiny part in sales rank, if at all. Reviews definitely improve the likelihood of someone buying your product, but it’s really all about selling units.
The more you sell, the higher up in the results you will show. Think of this like Google organic results, except where Google’s rank is based on on-page and off-page factors, Amazon is primarily focused on how well your product actually sells.
Amazon changed the dynamics of the customer “consideration phase”. Having a recognizable brand name can always help – but to succeed on Amazon, it’s not necessary. People trust what other people have bought before. You can become a “best seller” just from increasing your sales rank, and that can mean selling hundreds, if not thousands, per day (depending on the category).
Surely, when it comes to crock pots names like Kitchenaid and Cuisinart have way more recognition than Instant Pot, but Instant Pot shows up as a best seller, and that’s all that matters.
Pro tip: Sales that come through Amazon PPC count towards your sales rank. Whereas Google AdWords ads have no bearing at all to how your site will rank organically, Amazon makes no secret of the fact that sales from ads absolutely count.
This is Amazon’s way of giving you the keys to the kingdom. It’s really in your hands to leverage this strategy. Sure, it’s just another way for Amazon to make more money, but there are clear ROI metrics you can follow to ensure your spending is seeing a return.
Make your paid advertising dollars for your website count. Literally.
To do so, avoid the attribution silo.
Chances are, you are using Google Analytics or some tool to track all your acquisition channels: Paid Search, Organic Search, Paid Social, etc.
Here are some things to keep in mind:
To do so,
Don’t forget about offline sales. Say your business does a fair amount of sales over the phone. Unless you’re getting a bunch of robocallers, those phones didn’t just start ringing out of nowhere. Like the above example with Direct traffic, make sure your offline sales give credit back to online marketing.
Say the market you’re in is saturated. Your average CPC is over $2 and the whole thing is becoming cost prohibitive. You’re just about to give up on AdWords advertising. While you should make a simultaneous effort on landing page testing, you can make your life a whole lot easier by collecting emails. By doing this, each visitor who doesn’t buy is still a potential customer and not just disappearing into the ether.
There’s plenty of easy-to-use automation tools to help ramp up email address acquisition. Sumo is one of the best ones out there. If you don’t know them or their founder, Noah Kagan, you need to start following their blog now if you’re serious at all about marketing.
It’s funny, because clients are always saying they want more traffic on Google. I always come to them and say that getting traffic is the easy part. Give anyone a bigger budget, and he or she can easily do that. Of course, what they really mean is, get me more qualified traffic on Google.
I’ll be honest, while the phrase “best practices” makes one sometimes want to gag, there are three ‘dummy’ rules every PPC account manager should follow when it comes to managing ad money:
Don’t Waste Money
Even large companies can have limited budgets, and everyone wants the best bang for their buck. Be diligent about cutting out irrelevant traffic, whether it be though pausing positive keywords or adding negative keywords. The trend you want to see is clicks going up with average CPC going down.
Follow The Money
With paid search, it’s all about doing more with less. Once you filter out the garbage traffic, focus ad spending on what’s actually working – the higher quality (read: targeted) keywords, best-selling shopping products.
Ask For (Or Invest) More Money
Scale baby scale. There ain’t more sales without scales. (That’s a song I just made up). All too often with PPC, success stops at your ability to spend. A healthy PPC program is a money-making machine that’s a proven model. If this success has been proven plainly through data, pump more money into it if you can. I’ll go further. Pump more money than you would any other channel, because success is so much more repeatable with AdWords since you are marketing to people’s intent.
If your PPC manager isn’t doing this, get them the heck out of the kitchen.
If you want to get more serious about fixing your AdWords account, here’s the actual checklist we use to increase our clients’ profitability on AdWords. Get the 15-point checklist to hardcore AdWords Ecommerce success for your client or company.
Find An Agency That Doesn’t Feed You Bull
Once in a while you’ll come across a PPC agency that has years and years of experience. Ahem ahem.
The reality is that Facebook is just fancy banner advertising due to its insanely awesome targeting features.
That being the case, nobody on Facebook is actually asking to be advertised to. It just happens.
Because of this lack of intent, prioritize your campaigns effectively:
Your business’s ability to stay profitable may depend on some self-awareness and knowing your product’s position in the marketplace. With these first principles understood, you’ll be able to leverage acquisition channels more efficiently through profitable E-commerce strategies.
Profitability can come to fruition by taking advantage of platforms like Amazon, Google, and Facebook the right way. Done right, you can take away the fear factor of capital investment when your acquisition channels become a well-oiled machine.
What are your thoughts when it comes to keeping your E-commerce business profitable? I would love to hear from you in the comments below.