Gone very quiet

[Tim Cognito]

urquattroGus said:

The thing with the PPC is I find it hard to gauge how much is too much? Is there a rule of thumb or a percentage of sales to work to. We are going to reduce it down after the spring period. Some of my team have been completely blindsided by reports that say we have increase our sales by thousands of percent, of course my question is have we actually made any money/margin on those sales!

Some of them say we can’t reduce it but I have stamped my feet. Perhaps we started out agile on it and have now go lazy and addicted…

One of our areas of spend was on an agency/ai software to “make our money go further/more targeted”. Starting to feel embarrassed as I type this now…

Edited by urquattroGus on Wednesday 8th May 09:32

The other big pitfall is cannibalising sales you would have got anyway. Agencies can be sneaky with this by bidding on your brand name etc.

[Digga]

Tim Cognito said:

Out of interest what do you all target as an acceptable roas? As a general rule we've always targeted 10, with figures towards 5 acceptable for products with a higher repeat order rate.

This seems to be a good balance between getting good impression share and maintaining margins, but interested to hear if we are being too conservative!

That's a massive subject. Ultimately, you need to consider:

• Margin on the product(s)
• Degree of subsequent repeat business
• Your appetite and ability to pay more now, to create future growth

One bit of advice is not to jerk the ROAS around too much in one go. Shifting more than 20% is generally considered ill advised. Let the algo have at least 7 days for change ot percolate, but, if you know your products have a cyclical buy (i.e. start of month or end of month) you may even want to be looking at longer.

[skwdenyer]

Tim Cognito said:

urquattroGus said:

The thing with the PPC is I find it hard to gauge how much is too much? Is there a rule of thumb or a percentage of sales to work to. We are going to reduce it down after the spring period. Some of my team have been completely blindsided by reports that say we have increase our sales by thousands of percent, of course my question is have we actually made any money/margin on those sales!

Some of them say we can’t reduce it but I have stamped my feet. Perhaps we started out agile on it and have now go lazy and addicted…

One of our areas of spend was on an agency/ai software to “make our money go further/more targeted”. Starting to feel embarrassed as I type this now…

Edited by urquattroGus on Wednesday 8th May 09:32

The other big pitfall is cannibalising sales you would have got anyway. Agencies can be sneaky with this by bidding on your brand name etc.

The problem with *not* bidding on your brand name, especially on mobile, is that you don't appear in the top part of the screen. If you're not careful, goal hangers will be there instead. Whilst some people just throw "Brand Name" into Google because they haven't bookmarked you, others will do it because they've heard of you / seen an ad elsewhere / etc. Those people may - or may not - be susceptible to being steered away from your site by an attractive top-of-listings ad. Organic is getting cannibalised by this, and as ever you've got to consider the data you have and decide if bidding on your own brand is worth it on balance. Having a non-generic brand helps, of course

The key is data, data, data. As much as you can manage (start simple, work up - data overwhelm is also very real). Once you start getting into serious numbers (£250k on Google PPC is quite serious IMHO, for instance), you absolutely need to be in to the proper end of data collection at scale from every possible source, and building a model that works for you and your business. And that's a whole new world of pain, because you've got to start considering data decay, shifting market dynamics and external factors to contextualise the data, whether you've got a model and infrastructure that can deliver data to give you and your team the right level of of metric-centric and entity-centric contextual observability, and so on. At that level, you're also going to want to be all over your conversions, using tools like HotJar (easy to set up) or bigger stuff to really consider the whole customer journey, pain points, gotchas in the conversion funnel, and so on. And the list goes on

As DSLiverpool points out, however, it can be simpler than that: get a hero product, decent branding, find an under-served niche with volume potential, and turn the handle. But for a lot of businesses, that opportunity doesn't necessarily exist. If you're selling lawnmowers in a market full of lawnmower sellers (for instance), hero products don't come along very often. So now all these metrics and analytics become terribly important, because you're fighting for marginal gains (it is like competing in F1 - everyone is doing a great job; the gains you're after are marginal, fractional stuff that can nonetheless get you to the top of the heap).

There's a lot of data out there from suppliers and affiliates if you can find and manage it. That helps, because Google really doesn't want to tell you all that much. Various subscription services will try to give you a steer from their own data on things like keyword analytics, overall traffic levels, etc., but a lot of it has to be taken with a pinch of salt.

If you're dealing in products people buy infrequently (garden furniture and equipment was mentioned), there's a major retention problem. At every turn, you're competing against the Amazons of this world. How many customers go back to the same online retailer a few years later? That's where loyalty programmes, member-get-member schemes, and doing decent deals for affiliates can be very valuable. Where do your potential customers trust to find a good deal / decent recommendation? Voucher sites? Review sites? Neighbours? Or a Google ad? Figuring out what the pipeline is for your profitable customers takes time, data, insight and analysis. Throwing money at greater and greater PPC may generate you traffic (and then we're back to the conversion analysis above), but at what cost, and how far do you have to slash your margins to tempt them (a) to click, and (b) to buy?

Sorry, this is starting to read like an overwhelming answer to a simple question. The last time I had to do this, I inherited a completely data-free zone and had to build all of this stuff from scratch. The numbers were truly shocking - margins were on a one-way path to sub-zero, because all of the focus had been on driving top-line sales regardless of the underlying performance. But there's a lot of good advice and hard-won experience on this thread, that I've certainly benefited from!

I'll finish with some anecdata (always have to be careful with that!) which might be relevant. A data analyst at Ben & Jerry's some years ago started to correlate internal data against external data. They noticed there was an uptick in ice cream sales when certain weather occurred - not sunshine, as you might imagine, but rain (at certain times of year in certain climatic contexts). Bingo. Put your intra-day promo activity into gear around weather forecasts and there was a measurable uptick in sales and profits. Not a substitute for sunshine, but a lot better than doing nothing.

The other B&J insight surrounds customer acquisition. Ice cream manufacturers have worked out that, far from scaling back product availability (full supermarket freezers) and awareness advertising in winter, maintaining activity really helps later in the year. Customers are acquired (in the sense that they notice and remember the brand) in the slow months, because they associate availability with solidity (which really matters for more premium brands chasing more profitable sales). Going back to garden furniture, for instance, every China-buying container-shifting wannabee will be advertising heavily as soon as the sun comes out. The question is how many *profitable* customers will respond to messaging they saw earlier in the season, when the weather was poor, and can you track that awareness through a long funnel to see sales, or hook them with a pre-season teaser campaign, email chain or promotional offer? I'm not for one moment suggesting I've sold garden equipment (I haven't), but I have seen and used this effect in reality in other places; it is another place where careful and judicious use of data can reap rewards.

Finally, having dealt with Mr DSLiverpool (briefly, on a project that didn't happen form our end, not his), incidentally, I'd just say this: he's as far away from "not being intelligent" as I can imagine

[GardeningEcomm]

I'm getting a bit jaded with all of the online shenanigans - keeping up with "improvements" can be a pain.
Mind you this might be because I'm a grumpy old man in his fifties

I'm curious to know where ecommerce will end up?
I think the power that Google/Meta/Amazon have over the market is quite frightening.
Unsurprisingly they seem happy to ratchet up the costs.

For marketing ROI a good rule-of-thumb that has always worked for us is to spend 10% of net sales on marketing.
(Or £10 return for every £1 spent).
This worked for us for years but now we are hitting 15% plus as the market has become more challenging.
Obviously this marketing spend depends on product margin/average order value/repeat sales/company growth ambitions and a myriad of other factors.
We managed to stay away from the fairly ubiquitous 'free delivery' but now offer this so have lost this revenue too.

[Forester1965]

skwdenyer said:

The key is data, data, data.

This is the crux of it.

I was doing lead generation at a lucrative (and expensive- £20-50 per click) end of the market. At the beginning you're throwing away margin to buy data. To get properly granular (and efficient) you need to have enough data that you can trust the results. The difference for us in pre-data and post-data in terms of gross profit was around £50k a month (maintaining spend and T/O). That pays a lot of stuff.

As an idea of what we looked at, we sliced cost vs income on the following metrics...

- keyword x 1
- day of the week x 7 = 7
- hour of the day 7 x 24 = 168
- device type (mobile/computer/tablet) 168 x 3 = 504
- age group 504 x 5 = 2520


The above gives you a matrix of 2500 and that's just 1 keyword in our account. If you want enough data to trust what you're seeing, we'd want a minimum of 10 leads on each data point (ideally 5x that). That's 25000 leads that cost £50 each, £1.2m of Google Ads spend. We RAG rated in that matrix and dropped off the unprofitable ones.

If you're a minnow spending a little bit on Google Ads a month, you have little hope of getting enough data to compete with the knowledge of the big boys in your vertical. Which means you need to box clever and see what they're spending and where. You can't trust it completely, but it's cheaper than buying their data the way they did.

Edited by Forester1965 on Wednesday 8th May 13:55

[urquattroGus]

Thank You everyone - this is all super interesting stuff and really though provoking.

We are at just over 7% Marketing spend as a percentage of sales last year; perhaps we are not spending enough then!

But looking at the low margins I can't see how we could spend any more! We are selling leading brands but there is not much to mark them out from the crowd, also it rings true that the replacement cycles for mowers etc are quite long, so hard to grow regular repeat business, also the comments about maybe bucking the trend and trying out of season advertising when everyone advertises in season is an interesting take.....

[Tim Cognito]

Forester1965 said:

This is the crux of it.

I was doing lead generation at a lucrative (and expensive- £20-50 per click) end of the market. At the beginning you're throwing away margin to buy data. To get properly granular (and efficient) you need to have enough data that you can trust the results. The difference for us in pre-data and post-data in terms of gross profit was around £50k a month (maintaining spend and T/O). That pays a lot of stuff.

As an idea of what we looked at, we sliced cost vs income on the following metrics...

- keyword x 1
- day of the week x 7 = 7
- hour of the day 7 x 24 = 168
- device type (mobile/computer/tablet) 168 x 3 = 504
- age group 504 x 5 = 2520


The above gives you a matrix of 2500 and that's just 1 keyword in our account. If you want enough data to trust what you're seeing, we'd want a minimum of 10 leads on each data point (ideally 5x that). That's 25000 leads that cost £50 each, £1.2m of Google Ads spend. We RAG rated in that matrix and dropped off the unprofitable ones.

If you're a minnow spending a little bit on Google Ads a month, you have little hope of getting enough data to compete with the knowledge of the big boys in your vertical. Which means you need to box clever and see what they're spending and where. You can't trust it completely, but it's cheaper than buying their data the way they did.

Edited by Forester1965 on Wednesday 8th May 13:55

Just stick it on target roas m8.

In all seriousness I love this stuff, what frustrates me the most is not being able to make reliable decisions using the data. There's always so many variables/variance to confound it.

Even trying to conclusively decided if shopping promotions through Google merchant make any difference on key metrics like ctr/CPC/roas is almost impossible at the level I am dealing with.

[jeremyc]

urquattroGus said:

Thank You everyone - this is all super interesting stuff and really though provoking.

We are at just over 7% Marketing spend as a percentage of sales last year; perhaps we are not spending enough then!

But looking at the low margins I can't see how we could spend any more! We are selling leading brands but there is not much to mark them out from the crowd, also it rings true that the replacement cycles for mowers etc are quite long, so hard to grow regular repeat business, also the comments about maybe bucking the trend and trying out of season advertising when everyone advertises in season is an interesting take.....

Sounds to me like you need to find other products to upsell your customers and/or get them to come back more regularly.

• Strimmers?
• Hedge cutters?
• Aerators
• Grass seed/fertiliser?
• Mower blades?

You get the idea: increase the basket size and perhaps find some recurring high margin products that they can come back for (or get on a regular order).

[skwdenyer]

urquattroGus said:

Thank You everyone - this is all super interesting stuff and really though provoking.

We are at just over 7% Marketing spend as a percentage of sales last year; perhaps we are not spending enough then!

But looking at the low margins I can't see how we could spend any more! We are selling leading brands but there is not much to mark them out from the crowd, also it rings true that the replacement cycles for mowers etc are quite long, so hard to grow regular repeat business, also the comments about maybe bucking the trend and trying out of season advertising when everyone advertises in season is an interesting take.....

Sometimes the key for some markets is to increase your list price and then offer promos Everyone loves a bargain… if the promo is an extra product / up sell, the customer sees a “discount” of £X but it only cost you some fraction of £X to buy the bundled item. Then you can ratchet the marketing spend, knowing you’ve done some work elsewhere.

Can you do some videos on lawn care and send out links to them? Maybe a video on how to set up your new mower. Anything you can buy once (say filming costs) and use to justify a premium price (even if you discount it back down, ah-hem) can help conversion, retention and word-of-mouth.

Also consider offering “slow boat” shipping (if you can get a better shipping deal) & then take some margin on the premium shipping option. You’d be amazed how many are happy with either choice.

Extended warranties can be a nice add-on income stream, too…

[DSLiverpool]

GardeningEcomm said:

I'm getting a bit jaded with all of the online shenanigans - keeping up with "improvements" can be a pain.
Mind you this might be because I'm a grumpy old man in his fifties

I'm curious to know where ecommerce will end up?
I think the power that Google/Meta/Amazon have over the market is quite frightening.
Unsurprisingly they seem happy to ratchet up the costs.

For marketing ROI a good rule-of-thumb that has always worked for us is to spend 10% of net sales on marketing.
(Or £10 return for every £1 spent).
This worked for us for years but now we are hitting 15% plus as the market has become more challenging.
Obviously this marketing spend depends on product margin/average order value/repeat sales/company growth ambitions and a myriad of other factors.
We managed to stay away from the fairly ubiquitous 'free delivery' but now offer this so have lost this revenue too.

Not sure if you do furniture but import a few zero gravity chairs, sticker them up and use as a hook to get people on the site.
Or an egg chair etc.

I’ll be big in plants n soil in 3/4 weeks might have some crossover. I’ve a small army of brand ambassadors ready for battle. No ppc just the odd boosted Meta

[TownIdiot]

We are in services rather than goods but agree with the comments about Google and meta etc al

We find a niche that runs well for a month or so only to find ourself either priced out or mysteriously not appearing. This has been a constant battle for years now.

[DSLiverpool]

Another thing (sorry) I’ll see so many on high ppc not only with poor CRO but with no client retention or affiliate strategy.
Anyone can throw social snowball on their site and set up right it can be mustard,

[a311]

The latest round of TSB closures included my local branch. Problem is there are only two building societies left the next closest TSB is a 50 min round trip away.

Still need to make cash deposits but more so get cash for a float for the till. Going to have to look at what alternatives are available and ask around.

In the last 4 years We've had a Natwest, HSBC, and recently Halifax beaches close all nice old Georgian buildings. One became a weed farm, one a bar. Go back a decade and there's another 3 that have closed.

[monkfish1]

GardeningEcomm said:

I'm curious to know where ecommerce will end up?
I think the power that Google/Meta/Amazon have over the market is quite frightening.
Unsurprisingly they seem happy to ratchet up the costs.

Something i ponder often.

I dont have any answers, but they cant keep taking more and more indefintely.

[ashleyman]

monkfish1 said:

Something i ponder often.

I dont have any answers, but they cant keep taking more and more indefintely.

I tried to have this conversation with the insurer who covers my cat. 27% rise per policy this year. 26% last year. Within 4 years with those types of rises our annual pet insurance policy will top £1000 and I said to the woman this can’t be realistic because it’s just too much for us to afford. She said if I wanted to leave I could.

Anyway. Was out with my parents. Cat insurance came up and I relayed the above and it turns out that one of my parents works for the company that owned our pet insurance and apparently they had had a webinar a few weeks earlier presented by their CEO who was aware of this fact and was also aware that it wasn’t possible to keep raising prices and the impact it would have on them (costs to vets outstripping the yearly policy income) and people would be cancelling. I didn’t really ask what the plan was to combat it but I can see this happening more and more.

If businesses keep putting prices up then they should expect people to cancel and for them to be quiet and have no income. I imagine it’s the same for tech, price people out and what do you think is going to happen.

[r3g]

ashleyman said:

I tried to have this conversation with the insurer who covers my cat. 27% rise per policy this year. 26% last year. Within 4 years with those types of rises our annual pet insurance policy will top £1000 and I said to the woman this can’t be realistic because it’s just too much for us to afford. She said if I wanted to leave I could.

Anyway. Was out with my parents. Cat insurance came up and I relayed the above and it turns out that one of my parents works for the company that owned our pet insurance and apparently they had had a webinar a few weeks earlier presented by their CEO who was aware of this fact and was also aware that it wasn’t possible to keep raising prices and the impact it would have on them (costs to vets outstripping the yearly policy income) and people would be cancelling. I didn’t really ask what the plan was to combat it but I can see this happening more and more.

If businesses keep putting prices up then they should expect people to cancel and for them to be quiet and have no income. I imagine it’s the same for tech, price people out and what do you think is going to happen.

They just make annual premiums payable monthly or weekly instead and then they can charge pretty much whatever they want as people will pay anything if it's 'only' a "small" monthly/weekly amount. The savvy companies cottoned on to this a long time ago to keep customers on the hook, along with extended warranties for everything. 20 years ago who would have foreseen that half the country would be paying a fiver a month for a subscription doorbell ?

[LuckyThirteen]

Do any of you folk have a recommendation for a seriously good SEO firm that can work with webflow?

[DSLiverpool]

LuckyThirteen said:

Do any of you folk have a recommendation for a seriously good SEO firm that can work with webflow?

Yes I do but why not Wordpress?

Edited by DSLiverpool on Thursday 9th May 03:03

[Phooey]

ashleyman said:

If businesses keep putting prices up then they should expect people to cancel and for them to be quiet and have no income. I imagine it’s the same for tech, price people out and what do you think is going to happen.

In the case of services to consumer - there's a lot more people who earn good money and have disposable money today than ever before and those are the people these companies go after. Less clients maybe but higher revenue. It's not all inflation that's for sure.

[SuperCarrera]

LuckyThirteen said:

Do any of you folk have a recommendation for a seriously good SEO firm that can work with webflow?

Happy to recommend some. Would need to know what sector and rough monthly budget you have.

For the sake of transparency I have a digital marketing agency that has quite a big SEO team but we're at capacity, so happy to recommend the other agencies we know and trust and sometimes refer work to when there are conflicts, etc.