As any e-commerce marketer can tell you, digital advertising is one of the most important tools in their toolkit. This is even more true during big sale periods like Black Friday/Cyber Monday or Boxing Day. Nailing those sales can make or break profitability for the year (no pressure).
That’s why I sat down with our resident e-commerce expert, Chris Erickson, to interview him on his best tips and tricks for performance marketing.
Santana Blanchette: Hey Chris! I’m excited to talk to you today so let’s get right into it. What is an under utilized tactic for e-commerce marketing?
Chris Erickson: I think within e-commerce marketing the most underutilized thing is understanding the LTV (lifetime value) of the customer and how that maps back into where we want to put our marketing dollars. There's a lot of good efficiency metrics out there like ROAS (return on ad spend) or marketing efficiency ratio, both really important to fully understand where to optimize and to help triangulate the source of truth. But ultimately understanding the value of the customer is the best way to know how efficient your marketing efforts are and how much you're willing to pay to bring in a new customer in the door or even an existing customer.
What makes marketing for e-commerce different from marketing for other verticals?
Chris: I think there are a couple things quite special to e-commerce. One is that in other forms of performance marketing you don’t really have to worry about stock and that’s something really important. You don’t want to be investing a lot of money into products the business might sell out of anyway, because then you’re just going to be wasting your money. But you also want to be careful you’re focusing on the high value and/or high margin products as well to drive that high value ROAS. And then those impressions you’re bringing in are going to be resulting in a ROAS positive result for the business.
The second thing is seasonality. What we commonly see with e-commerce is that it is a heavily heavily seasonal business even if the product is not seasonal. This is because e-commerce is very involved in the large B2C promotional periods such as Boxing Day or Memorial Day. Having that is a little different than other verticals so you need to make sure you’re fully able to understand how to navigate those more complex, high seasonality promotional periods.
Tell me about some of the common misconceptions you see with performance marketing for e-commerce?
Chris: I'd say a common misconception, or at least something we see a lot and advise against, is not looking at the value of the sale versus just the sale itself. While all these businesses understand a higher price, or higher AOV, or higher profit margin, however they're looking at the sale, is more important a lot of the times that they're marketing campaigns are not structured in a way to really utilize that. So for example, when looking at more feed oriented campaigns, like performance Max in Google or Advantage Plus Shopping in Meta, the business knows that they want to drive higher value, but they don't segment out these types of campaigns to really make sure that we're focusing the majority of our effort, time, and budget on to those more higher value products. We want to make sure we aren’t treating every sale identically and even though a lot of businesses understand that, it’s not necessarily always translated into the marketing efforts.
Finally, are there any ways that marketers can easily improve their sale periods?
Chris: The biggest one that can be done immediately by any business is understanding budgeting and using historical performance to best do that. So for example with Boxing Day coming up I'm looking at previous years, understanding where we were maybe under or over efficient and mapping out a day-over-day budgeting spend. This ensures it's a really thought through budgeting plan and that we’re spending into the most high impact areas.
To look more in detail at our example, we might see in the previous year that we under spent early on in our sale and were overly efficient. Maybe we left money on the table in the first couple days before the efficiency started to level out as we got farther into the promotion. Taking these things into consideration can make sure we’re driving as much revenue as possible and getting the full amount of return back for our marketing dollars.
The next one is making sure we're utilizing messaging everywhere. Every channel should be pushing sale messaging and utilizing urgency, especially when it comes to the end of the sale period. Even something as simple as,” sale ends today” or, “sale ends soon” can drive a lot of extra value. Your audience will see this and want to make the purchase right away so they don't miss out. We want to make sure it's very clear once we get close to the end of the sale when the sale is ending. But we also can’t message the ending date too clearly, too soon because then we see users usually just wait until the end of the sale. We want to make sure we're sustaining that urgency messaging but really hitting it home close to the end of the promotional period.
Want to learn more about running a successful sale? Chris wrote a whole blog on it here.
Chris Erickson
