– A brand making $500k per year on average spends $168,000 on advertising and email agencies, resulting in a profit of around $150,000.
– The current approach of blindly hiring agencies without data collection is outdated and inefficient.
– The suggested “bare minimums” for ecommerce include setting up email flows, collecting relevant customer data, leveraging data for improved ads and emails, retargeting ads, focusing on repeat customers, and launching new products regularly.Implement a comprehensive data collection strategy to optimize ads, emails, and creative functions and maximize sign-ups for ecommerce businesses.An efficient brand making $500k per year on average will spend $2k a month on an ad agency, $10k a month on ads, and $2k a month on an email agency or pay someone the equivalent to do it. Over a year, those costs add up to $168,000. This results in a 2.97 blended ROAS. Assuming a 30% profit margin, the brand is making around $150,000 profit. These numbers will play out across a business of any size more or less under ideal situations. As a brand grows, organic traffic will also grow, and brand recognition will increase, but that’s a bit uncertain and requires the right steps from the beginning. This is the norm. It’s outdated and inefficient. It’s backwards. The next logical step is for a brand to then look into CRO as they decide to scale to optimize what they currently have. The problem is that there isn’t enough data for the CRO team to be able to start making recommendations without proper customer research (nod to Jeremy Epperson who constantly brings up this point). These are the things that I would focus on as “bare minimums” for ecommerce today:
1. Email – just set up a welcome flow and two abandoned cart flows, one for people that have purchased and one for people that haven’t. Use campaigns to remind people of your brand and product launches. Do not leverage them for sales. You should only do sales to clear deadstock for the most part.
2. Data Collection – collect data relevant to the customer journey during a sign-up in exchange for an offer. You’re already collecting sign-ups, collect data along with them.
3. Data Leveraging – by collecting the right data, you can improve your ads, page copy, and your emails to make them more relevant to your subscribers. For any brand that is spending ad dollars, if you’re not combining data collection + revenue patterns + ad spend, which no one is, you’re overspending without knowing it.
4. Retargeting Ads – leverage the data to speak directly to the people who have subscribed.
5. Repeat customers – most customers will only purchase 2 times from you within a 12-month period at best. Focus on finding more people like them. Don’t worry about retention. Great word of mouth from a new experience will trump retention statistically speaking pretty much every time.
6. New Product Launches – always be launching something or a variation of something to stay current and have things to talk about – find the balance here
So to put a cap on this, if you didn’t catch my post last Friday, go find it, that’s the bare minimum I would suggest for how to maximize sign ups with data to drive the above engine.I’ve been talking about this stuff for a while, yet brands, continue to blindly hire agencies to run your ads, emails, and creative functions with ZERO intent oriented data collection.~33% of revenue is spent without an idea on how capital efficient it is, because there is no data.#marketing #ecommerce #strategyhttps://www.linkedin.com/in/jivanco