– Ecommerce brands heavily rely on paid media, particularly Facebook ads, but most have a low return on ad spend (ROAS).
– As consumer sales slow down and budgets tighten, brands need to focus on optimizing their existing traffic and increasing their subscription to conversion rate.
– By converting more subscribers into purchasers, brands can decrease their customer acquisition cost (CAC) and drive more sales from existing customers, leading to higher lifetime value (LTV).Focus on optimizing the subscription to conversion rate by collecting more data, identifying quick wins through campaigns, and integrating winning campaigns into personalized welcome flows.E-commerce brands are slaves to paid media. Nearly every brand is spending at least $1000+ a day on Facebook ads. Most ROAS is less than 2x. Yet when it comes to software, every dollar is scrutinized. Must be good being an advertising platform. Just saying. The thing is, consumer sales are slowing, purchasing is slowing, and budgets are getting tighter. So a lot of brands will need to make a shift to ensure they are getting more out of the existing traffic that they are driving. Here are the 5 questions I ask brand owners:
1. How are you currently driving traffic to your website?
2. How many people that come to your website subscribe in exchange for a discount per month?
3. How many of the subscribers are purchasing?
4. How are you tracking your subscription to conversion rate?
5. What are you doing to optimize it?
As budgets tighten and brands begin focusing intently on CAC/LTV metrics, there’s one thing that directly impacts both of these and their relationship: leveraging the existing traffic you have. Subscription to conversion rate. On the CAC front, if you can convert more subscribers into purchasers, your CAC decreases. These are the highest intent prospects you have. If you can’t convert them, you need to look at your entire model. On the LTV front, campaigns drive 10x more sales from people that have purchased than those that haven’t. Product in hand allows people to experience the product and decide for themselves if it checks the boxes and the value is there. The odds of getting someone to convert more than 30 days after they sign up is less than 5%. Build a formula that works, steal ours:
1. Collect more data during signup.
2. Understand what data points are leading to conversion.
3. Identify quick wins through campaigns every week.
4. Test quick win campaigns for content breakthroughs.
5. Integrate winning campaigns into personalized welcome flows.
6. Repeat until subscription to conversion rate increases.
All this is now available, with cumulative benefits over time that will return way more than ad spend. Does it require a bit of work? Yup. But it’s more of a “do it once, you’ll be good enough to keep iterating into success” kind of work. It’s the work that compounds. #marketing #ecommerce #datahttps://www.linkedin.com/in/jivanco