Maximizing Ecommerce Growth: Budgeting and Leveraging Strategies

– Budgets are important in ecommerce and require a sound approach to achieve goals.
– Focus on increasing click through rates, sign up rates, and allocating savings to achieve conversion.
– Customizing the buying and post-purchase experience is crucial, and understanding unit economics and cost levers is essential for success.Allocate savings from high click through rates and sign up rates to provide necessary discounts for conversion and focus on products with high margins to maintain profitability.Budgets are real things in e-commerce. It’s all about calculating levers. Believe me when I tell you, this concept is foreign to a lot of companies. I see a lot of goals with people trying to reduce CAC (Customer Acquisition Cost) and increase AOV (Average Order Value) and the like. What I don’t see is a sound approach to doing it. Here’s my approach to achieving that:

1. Get a high click-through rate on your ads.
2. Get a high sign-up rate with data on your pop-ups.
3. Allocate your savings against the baseline from doing the above well to provide a discount necessary to achieve conversion.
4. Build a post-sign-up and post-purchase experience and a product experience that promotes a repeat purchase.

Focus on products where you have the highest margins and look to maintain those margins across the line. This is an oversimplification, but through testing, we’ve been able to increase click-through rates by bucking advertising trends, achieve a high sign-up rate by playing with offers, collect data by leveraging technology with those offers, and reallocate those savings to the customer by understanding our numbers and data. From there, we can customize the buying experience and the post-purchase experience as well.

This all comes down to having good knowledge of your unit economics and all the different levers you can pull during the customer journey related to your costs. The truth is, most agencies and marketing teams don’t know how to do this. They lack the tools and the strategies to make this happen. I hear a lot of people complaining about media buyers these days, where they are breaking even on their ad spend after paying them. This is the new normal for small brands and doesn’t make sense.

When you look at the budget you’re spending already on ads, it’s going to become very clear that you need to make changes today, this month, this quarter to hit the targets you need to unlock. If you find yourself in a place where the budget numbers don’t make sense for you to be able to make this investment now, the next route for most brands should be looking for an aggregator. Most brands without substantial funding are priced out of hiring people like our team internally on salary. Without internal resources, getting the most out of our consulting work becomes tough as well, which puts most brands in a catch-22 situation. They need the services but can’t afford them.

We predict that for a lot of brands, working with teams like ours through our aggregator partners is a much better option.At the end of the day it’s all about growth and getting there as quickly and efficiently as possible.#ecommerce #marketing #strategy

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