increase profit without paid ads

Trying to scale more with paid ads? ‎

by Allen Burt
May 25, 2020

 

Hey crew,

Are you trying to scale your brand by paying more on paid advertising?

If you are a 7 or 8-figure ecommerce store I want to share with you the strategies that our clients are using to increase their sales right now in the current environment without relying on more ad spend.

We help multi-million dollar physical products brands (from Fortune 500 companies to 7-figure Shark Tank Success stories) sell more online through their ecommerce stores by helping them increase their conversion rates, increasing average order value, and scale up amount of revenue driven from marketing.

Today I want to talk to you about the three strategies you can use to scale your brand without relying on investing more into Facebook, Instagram, or other forms of paid advertising.

  • 1) Traffic is not the only lever you have for scaling your business. 

At the end of the day, ecommerce is a simple equation.

Traffic x Conversion Rate x Average Order Value = Revenue

(then factor in repeat purchase rate) 

However, more often than not, we find brands focusing too heavily on the first half of the equation – traffic. They find a channel that works well and then scale it up, never considering the leverage that lies on the other side of the equation.

To scale without increasing add spend, start with the backend of the equation.

What is your customer lifetime value? This can be determined by looking at the average order rate, average order value rate, and conversion rate.

This leads us to the next strategy.

How can you increase customer order rates and average order values?

 

  • 2) Sell more of your product to existing traffic and customer base. 

The best way you can make what you’re doing more profitable is to sell more of your product to your existing traffic and customer base.

When trying to scale while focusing most heavily on traffic, at some point you will most likely hit a ceiling and then watch as your profit margin and return on ad spend go down.

Why does this happen?

As you start to expand your audience, new, cold audiences aren’t going to convert as well as your smaller isolated audiences, the most potent audiences you began with.

Take a look at other tools in the shed to increase profitability from your existing traffic and already established customer base. There are two main factors you can look at to do this.

A. Conversion Rates

How are customers flowing through your store?

What are the major barriers they are hitting from first interaction with the brand to first purchase?

B. Average Order Amount

How much money are they spending each time they transact in your store?

Increase both of these and find yourself in a position where you are driving more sales from existing traffic. Doing this also increases the profit accrued through your paid ad.

Existing ads = more profitable.

When you do start investing more in paid ads, you’ll be able to expand to more audiences that would have been profitable before.

When your store has more leverage your ads will be more profitable.

 

  • 3) Optimize your email marketing strategy.  

We have yet to take on a client who has fully optimized and dialed in their email marketing strategy.

If your email campaigns aren’t driving 25-35% of your total revenue, there’s a really good chance that you’re leaving money on the table.

Properly segmenting your audience, leveraging automated campaigns, and designing templates correctly will increase email engagement, drive more traffic to your store, and increase revenue.

 

If you find yourself in a position where you are trying to scale and the only lever you’re using is continually dialing up the amount you spend on paid traffic, or if you find it hard to reinvest in paid traffic because of the uncertain times we’re currently in, take a look at the ecommerce equation.

I can almost guarantee that you have room to improve your conversion rates, your average order value, and scale up the amount of revenue and potency of that revenue you’re driving from email marketing, all without increasing your ad spend.

If you have questions about any of this, or you realize that you’ve been relying way too heavily on paid ads, and want help pivoting book a strategy call.

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Allen Burt Allen Burt is the CEO & Founder of Blue Stout. A design and development agency that builds applications to power commerce and drive user engagement. Follow him on Twitter.