This post is by Travis Romine, an ecommerce growth consultant at Sharp Commerce and previous owner of ParadiseFibers.com. He consults for online retailers throughout the U.S. on building high performance ecommerce businesses, growth strategy and digital marketing. Sign up for Travis’s weekly ecommerce tips at sharpcommerce.com.
You’ve been playing the AdWords game for years now and most of you have been losing.
Today I’m finally going to address the underlying causes why AdWords isn’t making you money like it should.
This article contains information that continues to make my clients millions of dollars’ year over year. It applies to any paid traffic source including affiliate sources and remarketing.
There are dozens of key factors related to why AdWords isn’t performing the way you dreamed. Here, I present the tools to change that.
Most digital agencies will concentrate on Google Analytics to find advertising inefficiency. Analytics can be a great tool when used appropriately but often the inefficiency issues are actually in plain sight. What is happening to your customers once they click?
- Are customers even landing on the correct page?
- Does every page have complete information to make an informed buying decision?
- Are you showing item stock levels? (are you showing zero quantity on drop ship items…?)
- Are you using professional, attractive, original photography?
- Does the page load quickly?
- Is the layout attractive for your customer base?
This is just the tip of the iceberg kids. If you aren’t 100% on any of these simple elements, fix them immediately. Reallocate your team resources or outsource the work and get your catalog at least up to these basic standards. Without proper catalog presentation you are wasting 10%-65% of your AdWords spend!
Getting orders out same day is no longer special. We are all now competing with Amazon Prime which has some of the fastest shipping on the planet. I can tell you that if you aren’t getting orders out same day you’re hurting your AdWords cost per acquisition (CPA). When orders go out same day it builds trust with your customer and increases the likelihood of another order.
Answer emails lightning fast. There’s no excuse for slow response times with so many powerful CRM tools out there. A quality CRM system will increase efficiency and reduce response time.
Add live chat. When customers are shopping your site they should be able to have the most common answers to their questions available on the product page. Shoppers should be able to ask more advanced questions and get help during their shopping experience via chat. This helps the customer stay focused and keeps them from clicking away to Google or a competitor for answers. Yes, it’s expensive to allocate staff and resources to chat but in the end you’ll see a solid increase in conversions to pay for it.
Increasing Customer Lifetime Value (CLV)
CLV is basically the total amount of business you expect from each customer. Do you know what your customer lifetime value is? The standard can vary quite a bit depending on the types of products being sold: consumables vs durable goods. For example, ink cartridges are consumable but the printer would be durable.
Consumable goods have more opportunity for improving customer lifecycle generally. If you can turn a one-time customer into a 2- or 3-time buyer you have substantially increased the value of your initial cost of customer acquisition.
Some of the popular carts and order management systems will have CLV reporting. If not, see if you can get a feel for repeat customers behavior through exporting customers and order totals over a certain time period. Some industries will require analyzing a longer time period, depending on the relative customer behavior.
One tool to increase repeat shoppers is to implement a solid loyalty program. Presenting loyalty program benefits during the shopping experience can also increase conversions. Offer a free shipping coupon with newsletter sign up and watch initial conversions and initial average order value (AOV) increase overnight. Offering a rebate or free gift follow up email after the sale can be a strong tool to get a quick second sale.
Getting customers into a pattern of buying from you is always beneficial. When customers are familiar with your product selection and checkout they are more likely to return. Remind your customers via automated email when their rebate points are expiring as a last ditch attempt to get them back.
Incentivize your email sign up. Give customers an offer they can’t refuse and they will opt into your email list in droves. Increasing your email list size is paramount to repeat purchasing and growing your customer base. Create a basic email welcome series. Tell your customers about why your company fits them, what you’re all about. Limit it to what they truly care about, not what you personally care about – they often differ.
This is the absolute key to gaining the greatest understanding of what’s going on behind the scenes with AdWords. From my early days in ecommerce I discovered cutting AdWords hurt sales far worse than the performance AdWords was reporting. For example, AdWords reports that it is driving 275 conversions out of a total 1,000 conversions a day, with a $1,500 ad spend. When we cut the ad spend to zero, the total order count is reduced far more than 275, down to only 550 orders overall!
What’s happening there? During the customer lifecycle your customer will likely encounter multiple touch points. Often we jump to the conclusion that a given sale came from the last touch point before the conversion: AdWords, email marketing, affiliate partner, Facebook, etc.
Here’s an example. On Monday, Customer A finds your website on organic search, she creates an account but is interrupted by screaming children and abandons the cart. On Wednesday she sees your remarketing ad on a blog, clicks, and adds an item to the wish list. One week later she sees your Facebook ad and likes you. Another week later she finally converts from an email coupon your sent out.
When you review the reports, you praise your email campaign, and the rest of your channels go without appreciation. But it was the combination of touches that the customer experienced that ultimately converted them, and not one in particular. Customers are often influenced by one or more touch points over weeks or months during their conversion journey.
Measuring attribution is tricky but can be powerful depending on your industry. There are new tools in Google Analytics designed just for this purpose. However, make sure you have all your marketing best practices in place first.
Try to efficiently throw as many healthy lines in the proverbial water as you can via marketing channels. Then you’ll be fine tuning what’s already working to some degree. Some channels, especially social media, can appear to fail on the surface but are likely building a foundation of authority and adding to your current and future conversion rate.
Know that your conversion metrics are often misleading, and you’re likely touching your customer through a handful of channels. Even though your social media shows a conversion, that was only the last touch point. The customer probably clicked on a remarketing ad you posted last week, and an email they liked but didn’t convert from.
Fine tuning your AdWords campaigns is important, but realizing what happens after the click is vital. If you are driving traffic to pages that are not setup optimally to convert you’re just wasting your money.