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SUSTAINABLE GROWTH

 

How Conversion Path helped an eCommerce founder grow their business from $5M to $25M in sales and achieve a successful exit by going beyond the status quo used by most marketing agencies.

 


 

INTRODUCTION

An ecommerce-only online retailer launched their site in 2017 and hired one of the major digital agencies to manage their Google Search, Shopping, and Remarketing ads.

Their previous agency hit a sales plateau around $200K and didn’t have ideas on how to break through. After learning more about CPs unique capabilities, they decided to make a change.

 

 

YEAR 1:  INCREASED SALES AND PROFIT 67%

Prior targeting strategies were limited, and the brand began reaching their plateau due to this still all-too-common mistake, ignoring the incrementality of different audiences/demand.

Most of the prior targeting was geared towards branded terms, which is what happens when agencies base optimization decisions on the platform reporting. They prioritize advertiser investment into what the platform reports the highest ROI. But high ROI channels are often low in incremental revenue. Rather they cannibalize from other sales channels – which explains why despite increases to the investment, overall sales did not grow.

Solving this problem can be challenging which is why few agencies do it. It requires looking beyond the ad platform reporting to see the impact ads have on what matters.

 

The growth of the overall business.

 

Our first big win for this client came through applying our GS+ shopping algorithm to provide a competitive advantage in the shopping auction and get control over their brand vs non-brand investment – improving both the profitability of the ads and expanding their ability to reach their active market.

 

Over the course of 2019, we were able to significantly scale their new customer acquisition efforts, providing not just platform level growth, but real impact to the overall site revenue. Having taken over in Q4 2018, by the end of the first year, the result was massive.

 

 

YEAR 2.1 DOUBLED SALES & PROFIT DURING EARLY PANDEMIC

While the growth in year 1 was substantial, nobody knew heading into 2020 that the global pandemic would have such a substantial impact on eCommerce.

Demand boomed early in 2020, and with more customers moving to shopping online, we were able to help the brand position themselves to grow their market share given the huge increase in demand.

 

 

By the end of Q1 2020 (~1.5 years), we’d increased the investment by $150K over the prior year – resulting in overall site growth of over $2.7M (over 2x) while profit doubled.

 

YEAR 2.2 COMPETITION & DEMAND CHALLENGES

But the increase in demand early in the pandemic also led to a steep increase in competition, acquisition costs, and volume declined from early peaks.

CPCs climbed to all-time highs, and marketing budgets were no longer going as far as they used to in a highly competitive search-targeted market. In September of 2020 to address this challenge, we needed to diversify.

In late 2020, we introduced audience targeting with social advertising on Meta – Facebook/Instagram as well as YouTube.

 

 

 

Overall sales had seen decline from the early 2020 bubble, as competition increases ate into market share. But by expanding into audience targeting channels through Facebook, Instagram, and YouTube we were able to expand our reach beyond active customers to reach other in-market audiences. These new channels helped propel growth through the end of 2020 and into 2021.

 

THIS IS WHERE MOST BRANDS AND AGENCIES FAIL

 

If you’re looking at the picture above focusing on what matters, the blue line, overall sales, you understand the positive impact of the changes to the marketing strategy.

But if you focus on what most agencies focus on and optimize to, the purple line, the platform numbers, these results aren’t possible.

 

Here’s why.

 

 

Most agencies are measured based on platform-level results. Not because they’re forced on them, but because it makes their job easier, and less accountable. Under those parameters, we’re fighting to keep our job.

 

Fortunately, our clients understand this is an inadequate view to measure the impact of your marketing in today’s environment.

Most eCommerce brands use Google Analytics (GA4) to measure the performance of their site, marketing, and other content efforts. And marketers understand that a customers’ path to buying online is not a linear one.

Customers view, interact, search for, and navigate to your site via multiple platforms before finally buying in most cases. But Google Analytics linear reporting credits sales to whatever the last step of that path was.

 

If I for example see a Facebook ad at lunch, then later that evening I go back to your website and buy something.

Why should Facebook not get credit for that sale?

 It doesn’t.

 

 

YEAR 4 – 5

Instead of accepting the status quo reporting expectations, accountability to platform reporting, and stalling sales growth by reacting to misguiding reports, this client confidently moved forward with the plan thanks to the confidence they’re given from our Scaling Path Attribution Services.

We set up this brand on our new Scaling Path Attribution software, and our Attribution experts worked with the brand to build a tailored attribution model that measures the incrementality of each channel and represents accurate funnel level sales reporting that gives brands the confidence their investments are going to result in growth.

 

 

Long term growth requires real invested partnerships and alignment to true performance.  Marketing reports are a means to an end:  your P&L.  Results need to move the needle on the P&L, and that’s where accountability should exist.

 

 

Brands who understand how their ads impact their overall sales are the ones who can breakthrough sales plateaus.

 

 

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