Category Archives: Analytics

Lifetime Value: Understanding The Metric That Drives All Marketing

It’s the metric that drives all marketing. It determines how much you can spend, it determines how much you make. It decides whether any marketing channel is profitable. It determines your CPC, your ROI, and everything in between.

I’m talking about Lifetime Value, or LTV. It’s one of the most important metrics to understand in almost any type of marketing. It affects just about every area of your business – and yet, it’s one of the most frequently misunderstood metrics.

In this article, we’ll take a deeper look at lifetime value. We’ll start by defining LTV, then we’ll take a deeper look at how it can impact your business and your marketing.

The Basics of Lifetime Value

Lifetime value is, simply put, the amount of money a customer will spend with you over the course of their lifetime. Typically LTV is an educated guess. While companies can look back in time and analyze their historical LTV, but that doesn’t necessarily mean their LTV will the the same moving forward.

For newer companies – companies that are less than 3 years old – most LTV numbers are mostly approximations. Even so, these educated guesses can be very useful. Having a rough sense of your LTV will let you estimate how much you can spend to acquire a customer.

Understanding LTV allows you to compare the amount you’re spending to acquire a customer, against how much you expect to earn from them over the course their lifetimes. For planning marketing spend, this is far better than comparing cash out and cash in.

Cash In, Cash Out vs. Lifetime Value

Why is measuring LTV better than measuring cashflow?

Because generally when you acquire a customer, you’ll be cashflow negative. For example, let’s say you have a $100 LTV. Your revenue might come in like this:

  • Acquisition Cost: 45
  • Week 1: Free Trial
  • Month 1: $20
  • Month 2: $20
  • Month 3: $20
  • Month 4: $20
  • Month 5: $20

If you’re only looking at cash in and cash out, a $45 customer acquisition cost might look like a failure by month 2. But over the lifecycle of the customer, it’s actually a very successful campaign.

Measuring Lifetime Value

So how do you actually measure lifetime value? The formula for calculating lifetime value is fairly simple:

Transaction Value x Number of Transactions x Profit Margin

Or, for subscription businesses:

Monthly Revenue x Number of Months x Profit Margin

Although calculating LTV is relatively simple, actually measuring and gathering all the data can be rather complicated.

For one, actually linking purchases to a buyer can be tricky. People often have multiple email addresses, especially if they’re splitting orders between work and home. They might be purchasing items as gifts, or can move residences. You might also have the option to checkout as guest, in which case tying transactions back to individuals is even trickier.

There are tools you can use to help you her this data. Even Google Analytics can help provide some of this data. Unfortunately, part of the art of marketing is also working with incomplete data.

Instead of waiting until you have a perfect set of LTV data, you often have to work with what you have, discard certain segments, and make inferences. For example, you might exclude people who checkout as guest entirely from your LTV calculations. Using people who have longstanding accounts, you can baseline a rough LTV estimate, and apply that across your customer base.

What’s a “Good” Lifetime Value?

A typical rule of thumb is that you want your lifetime value to be 3 to 5 times your customer acquisition costs. In other words, your gross profit should be 3 to 5 times what it costs you to get a new customer.

This 3-5x rule of thumb gives you room to hire staff, pay for the office, phone bills, etc and still have enough margin left over to make a decent profit.

For example, a eCommerce site might calculate their LTV-to-CAC ratio like this:

  • Revenue: $50
  • Cost of Goods: $20
  • Gross Margin: $30
  • Customer Acquisition Cost: $10
  • Average # of orders per customer: 1
  • LTV to CAC Ratio: $30 to $10

There are a lot of rules of thumb with LTV. While these rules of thumbs are useful, they’ll vary significantly from business to business. A grocery store with 7% margins needs to think about LTV very differently than a software business with 70% margins.

Using Cohorts to Analyze Lifetime Value

Your customers’ lifetime value can change over time. As you improve your products, develop your brand, and test different marketing approaches, your customers’ behavior will change as well. Cohorts allows you to measure this change over time.

Let’s say you have a consistent marketing campaign running, from January to June. Although your marketing is the same, your product quality and your customer service have both improved. That means the number of transactions per customer should go up, while your returns should go down.

Instead of just tracking LTV based on customer IDs, or based on marketing campaigns, cohorts let you compare customers by groups of time. Each customer is grouped by the time they made their first purchase – January, February, etc. These groups are called cohorts.

In an ideal world, we’d be able to track the impact of every single variable – website changes, product changes, marketing changes, etc. In the real world, that’s usually not possible. Instead, often the best we can do is to measure our LTV over time, based on when customers first purchased, to make sure our numbers are going in the right direction.

Doing a cohort analysis will tell you a few things:

  • Are new customers likely to make a repeat purchase, or less likely to make a repeat purchase, than other customers in the past?
  • Are new customers spending more or less per transactions?
  • Are your products and your marketing getting better or worse over time?

How Much Can You Spend to Acquire a Customer?

The #1 reason for figuring out your LTV, is so you can figure out how much you can afford to spend to acquire a customer.

By taking the reverse of the 3-to-1 rule, we can say that typically you can spend up to 35% of your LTV to acquire a customer. If your customer LTV is $100, you can afford to spend $35 to acquire them. Again, these are based on averages, and will vary a lot by individual businesses and industries.

Payback Periods

One key thing is missing from the LTV-to-CAC calculation. The factor of time. Although a customer might spend $100 from you during their lifetime, we don’t have their whole lifetime to recuperate our investment.

A metric almost as important to LTV then is Payback Period. Payback Period is the amount of time necessary before you recuperate your customer acquisition costs. You can absolutely go out of business by spending $35 to acquire customers that earn you $1 a month for 100 months.

Venture backed or angel backed businesses tend to be comfortable operating with payback periods of up to 2 years. Most bootstrapped businesses tend to operate on 3 – 6 month payback periods.

Other Factors

Building a business isn’t always about hard dollars and cents. Especially in the early days of a company, or even in a new product launch, it can make sense to spend up to 100% of LTV to acquire customers.

Why?

Because you want to get as many people using your product as possible. You want word of mouth, brand, referrals, and network effects to start kicking in. You’ll start the new product off with more momentum, as well as gather a lot more data about what’s working and what’s not. By having more customers, you’ll also get more feedback on what’s working and what to improve.

You can’t continually run a business by spending all your profits on acquiring customers. But it can be a powerful way to get a new product off the ground.

Using LTV to Determine Your Cost Per Click

If you know how much you’re willing to spend on acquiring a customer, you easily figure out how much you can afford to pay per click (CPC) to your website. Based on that CPC, you can figure out which marketing channels you can test.

For example, let’s say you have a LTV of $200. You’re willing to spend up to $60 to acquire this customer.

Your website conversion rate is 2%. Which means it takes 50 clicks to get a conversion. Another way to look at it, is each click is worth $1.20 to you ($60 per sale / 50 clicks per sale.)

Now you know that as a rough rule of thumb you can afford to spend $1.20 per click. Marketing channels that cost substantially more than that should be avoided.

Expanding LTV = More Marketing Channels

Increasing your LTV is one of the best things you could do for your marketing. Increasing your LTV does not mean a linear increase in traffic. A 40% increase in LTV doesn’t mean a 40% increase in revenue – it could mean a 400% or even 4,000% increase in revenue.

This is because increasing your LTV lets you open up new marketing channels that you wouldn’t have been able to make profitable on the old LTV. For example, let’s say your business was profitable at $200 LTV. Then, by improving your product and marketing, you increase this to $300. Now, AdWords and podcast ads are working, doubling your revenue.

A year later your LTV is $600. Now you can afford to buy ads on TV, pre-roll video, and display ads, which drives your revenue another five times higher than before.

In other words, an increasing LTV has an exponential impact on the entire business. Not only does it increase profitability, it unlocks entirely new marketing channels.

Lifetime Value is Not Evenly Distributed

Most companies use an average LTV to calculate the amount they can spend on acquiring customers. Unfortunately, taking the “average” LTV is often not the best idea.

Using an average LTV to make marketing decisions gives the impression that LTV distribution looks something like this:

When in reality, LTV usually plays out something like this:

In truth, using an average LTV is deceptive. Customer values can vary widely, and often follow a power law distribution. 10% or 20% of your customer can account for 80% of your revenues.

The bottom line is, a small portion of your customers are often responsible for the vast majority of your revenues. This means that taking a simple average is often not the most useful number.

Using an Average vs Segmenting Customers

When you take an average of all customers and use that to calculate LTV, you’re essentially treating all customers as equal. Unfortunately, doing so often results in lower ROI and less effective marketing.

If some customers are worth $5 and others are worth $70, it doesn’t make sense to spend money evenly to acquire an “average customer” in hopes of getting more high value customers.

Instead, your marketing will be more effective if you separate customers into different buckets, and identify the behaviors and traits that highlight a high value customer.

So, how do you go about finding high value customers?

Finding the Patterns of High Value Buyers

Identifying your high value buyers, and then finding more of them, first starts with diving into the data. Ask yourself:

  • Is there a difference in demographics between our high value and low value buyers?
  • Do high value buyers tend to purchase different kinds of products?
  • Do certain traffic sources tend to bring in more high value buyers?
  • Do certain messages or marketing funnels tend to bring in higher value buyers?
  • Etc

Note: You can export a list of your high value buyers and upload it to Facebook’s Audience Insights. That’ll give you a lot more information about their demographics and interests.

Once you’ve identified the buyers that tend to spend the most money, adjust your marketing accordingly. For example:

  • Use an email list of only your highest value buyers to create a Facebook Lookalike Audience, and run Facebook Ads to them.
  • Identify the demographics of your high value buyers, and use those demographics when you’re doing your ad targeting.
  • Feature the products that tend to attract high value buyers in your ads.
  • Create referral programs to incentivize higher value buyers to refer more of their friends, who are also likely high value buyers.

Most businesses have an uneven distribution of LTV. That said,  there are exceptions. For example, gas stations and locksmiths both most likely have a fairly even distribution of customer values.

The first step in determining your approach to LTV is to figure out if your distribution of profits is even or uneven. Once you know that, you’ll know whether you should focus on tailoring your marketing to high LTV customers, or to focus on the average LTV-to-CAC ratio.

Dealing with Uncertainty

As much as marketing managers love to put definite numbers in powerpoint slides – me included – the truth is, LTV is a fuzzy number. Most companies don’t know their LTV, and the true LTV number is almost impossible to know.

Instead, we learn to use our best guesstimates to make decisions. We might not know if our LTV is $231.3 or $191, but we can estimate that it’s around $200. We can tell if certain groups are more valuable than others. And we can use that data to inform our marketing efforts.

How do you and your team think about LTV? Share your ideas in the comments below!

Ian luck
Founder, MarketingStrategy.com

How We Got 60,000 Likes and Used Them to Boost Sales

Ever wonder how to get more Facebook likes? In this guide, I’ll show you how we got over 60,000 Facebook likes in 3 months, then used those likes to predict and influence what customers would buy.

My Strategy for Getting More Facebook Likes, Quickly

While running my T-Shirt business, we used Facebook Like campaigns to generate tens of thousands of likes to our Facebook pages. Then we would routinely use those Facebook likes to predict what people would buy. Using that information, we’d create products (t-shirts, hoodies, etc.) and sell hundreds of thousands of dollars worth of products. Products we already knew people wanted, before we made it.

Although the examples in this post will be from the t-shirt industry, the overall strategy can be used in just about any business. Almost every business can benefit from:

  • Knowing exactly what your customers want to buy,
  • Quickly getting more fans and followers,
  • Being able to rapidly and cheaply test new ideas, before investing in creating new products,
  • Using social media to get new customers, as well as get existing customers to buy more often.

Here, I’ll walk you – step by step – through the entire process we used. I’ll start by explaining how we got tens of thousands of Facebook likes, in multiple industries. Then I’ll show you how to build a strong relationship with your fans, and finally how to use your fans to inform product decisions and generate more sales.

Note: You should never buy fake likes. Fake likes hurt your engagement, and will hurt your social media marketing overall. All our likes either came in organically, or through Facebook’s own “Like Campaigns”.

How Facebook’s “Like Campaign” Ads Work

A Facebook Like Campaign is an ad campaign type within Facebook’s ad platform. The ad unit can be displayed on both mobile and desktop. The way it works is very similar to other ad types, except in this case people don’t click off of Facebook.

Instead, the call to action on the ad is “Like Page”. When someone clicks on the like button, they’ll like your page. Clicking on the image or your page name takes them to your page, where they can learn more about your page and potentially like your page there.

Here’s a screenshot from our ad account, generating 63,000 likes in 3 months:

Like campaigns results

In this guide, we’ll use our writer page for the majority of our examples. We’ve used a similar strategy in a lot of different industries, but using just one industry will help illustrate how this works.

Our writer page currently has about 37,000 fans: Writer page with 37000 likes

The way you setup a like campaign is identical to other ad types:

  • First, you create a campaign in Ads Manager or Power Editor.
  • Next, you create your targeting, just like any other ad. Retargeting audiences, lookalike audiences, or audiences you already know convert are great places to start.
  • Finally, you upload your ad creative.

Let’s go through this with a real world example.

How to Get Real Facebook Likes for $0.06 Cents Each

The key to getting inexpensive likes is to create an ad that gets people in your audience to think: “That sounds great! I’d like to get that page’s content in my newsfeed. Sign me up.”

Here are a few things that’ll help:

  • Don’t be a corporate page. It’s hard to get people to like United Airlines’ Facebook page. On the other hand, it’s much easier to get someone to like an “I Love to Travel” page.
  • For brands – like United Airlines – many of these tactics should still work. Just expect like costs to be a bit higher.
  • Use keyword in your page name if possible. Invented names like “Kaizeo” are harder to work with than “Writers United” (if you’re targeting writers.)
  • Spell out what people will get if they like your page. For example, “get daily inspiration, how-tos & humor”. Don’t ask people to like just for the sake of liking your page.
  • Users should feel like they’re getting value by liking your page, not doing you a favor by liking your page.
  • Using images that stick out in the Facebook news feed. Your ad should break people out of their “news feed trance” and get them to pay attention to your ad.
  • Test cartoons – cartoons have performed well for us across multiple industries.
  • Test lots of different images. The images will make the biggest difference.

The last one is the key. Our cost per like ranged from $0.74 each to $0.05 each. That’s a 1,480% difference. The way we get cheap likes is by testing many different images.

Example: Here Are 5 Images We Tested

Testing images is a big part of succeeding with Facebook like ads. In our writer example, we saw a range from $0.06 per like to $0.24 per like. Here are the images we tested.

This ad generated likes at $0.13 each:

Facebook like ad 1

This ad generated likes at $0.12 each:

Facebook like ad 2

This ad generated likes at $0.14 each:

Facebook like ad 3

This ad generated likes at $0.24 each:

Facebook like ad 4

This ad generated likes at $0.06 each:

Facebook like ad 5

Clearly, in this case the last image was the winner.

We would typically start with just $10 a day on these ad campaigns.

We’d quickly kill off the worst performing ads, and whittle it down until there’s one left standing. Then we’d slowly turn up the budget until we were spending about $30 per day.

Using this process, we got our average lead cost to around 6 or 7 cents. At that pace, $1,200 gets us 20,000 likes.

Now that you have a page with thousands of followers – how do you leverage that into actual sales and revenue?

Cultivating a High Engagement Facebook Page

You’ve probably heard that Facebook only shows your page posts to about 1% of your followers for any given post.

While this is true on average, we found that we could often get over 70% of our like count in our post view counts. For example, if we had 20,000 likes, we’d frequently have posts that had 15,000 in views.

Get more facebook likes - engagement example

Here’s the bottom line: if you create content that is engaging, Facebook will reward you by showing your posts to more of your audience. Even though the average page gets only 1% viewership, if your engagement is far above average, your viewership can be far above average as well.

Which begs the question: what kind of content do people engage with? What kinds of content do people LOVE to comment on, like, and share?

Content that does well:

  • Image posts
  • Funny, inspiring, witty
  • Images that stand out
  • Videos
  • Text posts asking the community for input

Content that does NOT do well:

  • Purely promotional posts
  • Posts about your company or products
  • Text only posts
  • Uninteresting or emotionless posts.

Content that SOMETIMES works:

  • Videos. We found the image posts outperformed for us in every market we were in. However, pages like Tasty have clearly shown that video-only posts can do really well. This is something you’ll have to test for yourself.

Your page should be a place people look forward to visiting. When they see your page name in their feed, they should smile to themselves. Their reaction should not be “groan … what are they trying to sell me this time?”

We scheduled five posts per day, seven days a week. That’s 35 posts a week.

Does that seem a bit excessive? Remember – Facebook only shows your posts to a small portion of your audience. If Facebook is showing your posts to 5% of your audience (which is already way above average) – that means that if you post 5x a day, only 25% of your audience is seeing your post that day. Another way to look at it is that everyone on your page sees a post once every four days.

Of course, the distribution isn’t perfectly even. Some people will see 2-3 posts from you a day, and some won’t see any posts for weeks. But on average, if you post 5 times a day, your engagement will still be pretty high and you’ll maximize your chances of getting in front of your audience with your best content.

Leverage Your Engagement for Sales and Revenue

Okay, so now you’ve got a few thousand followers. And you’ve regularly posted content that gets your fans engaged. You’re showing up more and more in Facebook’s algorithm, and people are regularly liking, sharing and commenting on your posts.

Now, how can you turn that social capital into … well, actual capital?

The most valuable use of our Facebook pages came from insights that we turned into products. Our Facebook pages were never a big source of direct sales for us. Instead, we used the intel we got from our posts to direct our sales efforts.

If we tried to sell directly to our audience by posting on Facebook, we’d generally make about 5 sales per post. That’s not worth the cost and effort we had to put into generating our audience. If we only approached our fans as a direct sales channel, it wouldn’t be worth doing like campaigns.

Fortunately, the real value of having a highly engaged Facebook page comes in using the engagement to inform your products and your marketing. You can use it to predict what people want to buy, and how they want to be sold to – and launch marketing campaigns that you know will succeed before you even launch your campaign.

Use Facebook Insights to Spot Outliers

The easiest way to see what people strongly resonate with is by checking your Facebook Page’s Insights dashboard. Generally you’ll see that most of your posts have an “average” amount of reach and engagement. Then, every once in a while, one will be an outlier – something that gets a lot more engagement than the average.

For example, on this page we consistently got around 4,000 reach on a post. But this outlier has 15,000 reach and a much higher engagement:

Highly viral facebook post

That tells me something about that post strongly resonated with our audience. I can turn that into a Facebook Ad, product, or email campaign.

Let’s take a look at a real world example.

Case Study: Using Our Engagement to Sell $37,000 of One T-Shirt Design

Early on, when we’d just started our Facebook Page, we had a post get an unusually high amount of engagement. Almost 1,000 likes and 650+ shares. That told us that this message strongly resonated with the audience.

Turn a viral post into a product

So, we hired a designer on 99Designs.com and turned it into a t-shirt design.

We ended up running the design three times, selling over $37,000 in a couple months.

Furthermore, the ad itself we used to advertise the t-shirt got 46,000 likes and nearly 20,000 shares, which helped us get a lot more Facebook likes as well:

Successful product example

You see the ad live on Facebook here.

This in turn drove thousands of free likes for our Facebook page, further increasing our reach and giving us even more insights into our customers.

Applying These Strategies to Any Industry

Not every business can directly turn a Facebook post into a product. How can you use these strategies to help grow your company, if you can’t directly turn a Facebook post into a product?

  • Use this to create new marketing angles. If a post goes viral, it’s likely hit on an emotional nerve within your market.
  • Identify product improvements.
  • Identify new product ideas. These can even just be upsells.
  • Reach out and have private conversations with customers.
  • Turn them into testimonials or case studies.
  • Find gaps in your brand and plug them.
  • Know how you’re doing. Companies often think they’re doing great, until their customers tell them otherwise.
  • Avoid costly product launches. Waterfall vs. Lean Methodology.
  • Find inexpensive “Surprise and Delight” opportunities.

These are just some of the many ways that having an ongoing two-way dialogue with your customers can help your company.

You now know how to very quickly build up new Facebook pages, and get them to be extremely engaging with your followers. And you learned how to use those highly engaged fans to do market research, test new product ideas, and get feedback.

What strategies have you found for quickly growing an audience?How are you leveraging your audiences in your company? Share in the comments below!

Ian Luck
Founder – MarketingStrategy.com

10 Strategies for Boosting Amazon Sales

Selling on Amazon and want to increase your sales? Here are 10 ways to boost your sales and increase revenues.

Note: most of these strategies apply to Third-Party sellers, i.e. “Seller Central”. If you’re selling under “Vendor Central”, or wholesaling to Amazon, most of these strategies won’t apply.

Without further ado, let’s jump right in.

Strategy #1 – Add Additional, Related Keywords to Your Listings

Most Amazon listings are under-optimized in terms of the keywords they’re targeting.

For example, compare the two listings below. Focus on the headline. The first listing would only show up for a couple keywords:

  • Wired Keyboard
  • USB Keyboard
  • Black Keyboard

The headline is short, and doesn’t have many keywords. Therefore, the product won’t show up for many searches.

Amazon SEO keyword example

The second listing on the other hand, would show up on a search for:

  • iPad 9.7 Case
  • Trifold iPad Case
  • iPad 2017 Case
  • iPad Hard Case
  • Lightweight iPad Case
  • iPad Smart case
  • Etc.

Keyword optimization is a big part of Amazon SEO. Don’t just go for your primary keywords. Find your tangential keywords and make sure to incorporate them into your listings. You can use two tools to generate your keywords.

Tool #1: Google Keyword Tool

To get access to the Google Keyword Tool, you first need an AdWords account. You can open one here.

Once you have an AdWords account, go to Planning > Keyword Planner to access the Google Keyword Tool. It’s a free tool.

Use Google Keyword Tool for Amazon keywords

Tool #2: Merchant Words

Merchant Words is one of the few tools on the market that pulls Amazon specific data.

Although Google’s keyword tool is free, the Google’s Data and Amazon’s data can often be very different. For example, someone who’s interested in smoother hair might type into Google “why is my hair frizzy?” That same person might type into Amazon “hair conditioner” or “biotin for hair”.

Although Google’s keyword suggestions are useful, when you’re doing Amazon SEO it’s best to use the data directly from the source.

Merchant Words screenshot

The idea here is to build up a library of keywords that you’d want to show up for in Amazon. Once you have those keywords, add them to your listing. High priority keywords should be added to the title, while lower priority keywords can be added to your description or the keyword fields in your product details (these don’t show up to customers, it’s in your back end settings).

Strategy #2 – Add a Bonus to Your Product

One way to make your listing stand out is to include a bonus that nobody else is offering. This works especially well if you could include a bonus that has high perceived value, but doesn’t cost you very much.

For example, the listing below includes a free stylus and a free protective screen. These are items that would both cost an extra $5 – $10 on Amazon, yet cost only a few pennies to manufacture. If a user were deciding between a couple different cases, this could be the added push that tips them in favor of this product.

iPad case amazon

eBooks can be another great bonus. Once an eBook is written, there’s literally zero cost in producing another copy. Yet they’ll continue to help your marketing for years.

amazon listing with ebook bonus

Strategy #3 – Make Your Images Different Than Everyone Else

Are all your competitors using the same style of image? In most industries, sellers tend to all go in one direction. When that’s the case, try to go in a different vein. When others zig, zag.

For example, take a look at the image below. These are the results for “Dancing Shoes”.

In a sea of shoe-only images, the image with a pair of legs clearly stands out. Despite having lower star rankings and fewer reviews than other shoes, this pair of shoes has higher rankings and higher sales volume than their competitors.

use a product image to increase amazon rankings

Strategy #4 – Drive Sales Using the “Type In Search” Contest

Amazon’s search engine is optimizing for one thing: sales.

Every time a specific phrase is typed in, Amazon is hoping to put the products that consumers are most likely to buy in front of them.

For example, let’s say I typed in “travel backpack.” Amazon then tracks every product – in terms of how many people click and how many people buy – and puts the products people tend to buy near the top.

This maximizes Amazon’s income (they only make money when a sale happens) and also gives users exactly what they’re looking for.

Which begs the question – how can give Amazon the experience of having more people type in a specific search phrase, select your product, and then buy it?

There are two simple ways to do it.

1) You can ask friends, family, and staff to type in a specific search phrase that you want to rank for, find your product, and purchase it. Note that this is very different than giving them a direct link to the product and having them make a purchase.

You want them to make a search, in order to for Amazon’s optimization algorithm to recognize your sale and boost you’re relevance for that specific search term.

2) You can host a contest or giveaway. Tell your customers to go to Amazon, search for a specific term – like “travel backpack” – and to make a purchase. Then, send you the receipt to receive a free bonus or to be entered into the contest.

The free bonus should ideally be something that has high perceived value, but doesn’t cost a lot to make. For example, in the travel market this could be wool socks. They’re socks that rarely need to be washed – perfect for traveling.

This can be a great way to use your existing list to boost your Amazon rankings.

Strategy #5 – Use a Autoresponder to Ask Buyers to Leave a Review

Do you have an email autoresponder setup to ask buyers to leave a review?

If not, this is a simple and easy way to automate getting reviews. This alone can double your review rate.

For example, this is an automated follow-up I received after purchasing a mouse:

Amazon email follow up

There are several different softwares you can use to send these emails. On my Amazon stores, I use Feedback Genius. Overall I’ve been pretty happy with it.

Strategy #6 – Use Seller Ratings to Protect Yourself from Negative Reviews

One common strategy for reducing negative reviews is to send customers to leave seller rating reviews instead of product reviews. Here’s how this works.

When you email your customers to ask for a review, instead of sending them a link to leave you a product review, instead you ask them:

  • Was there anything wrong with the item? If not, would you leave a review?
  • Send them a link to a seller rating review.

Customers will then write their comments into your seller ratings field. These can be accessed via Performance > Feedback in Seller Central.

Amazon seller ratings

Now comes the manual part. Every day or two, go through your seller feedback ratings and ask anyone who left you a positive review to also leave you a positive product review. This is a manual outreach process – you’ll need to find their order and send them a message.

Why do it this way instead of just asking for a product review in your follow up emails?

Because getting a negative review is much worse than getting a positive review.

By going through this process – sending customers to Seller Ratings first, and manually asking for a Product Review only if they’re happy – you greatly reduce the chances of a negative product review. Your negative reviews will end up in your Seller Ratings rather than your product reviews, and your Seller Ratings are far less important.

This will reduce your total number of product reviews, as there is an increased step for people to leave a review. But it’ll increase your average star rating significantly.

Strategy #7 – The “Gift Card Method” for Removing Bad Reviews

Even a half point drop in a star rating can have a significant impact on sales. So, how can you remove negative reviews if someone does get through your “Seller Rating Filter”?

One of the best strategies is to use the “Gift Card Method”. Here’s how it works.

Regularly review your listings for customers who are unhappy. If you receive a review of 3 stars or less, send them an email with a sincere apology. Include a $10 Amazon gift card for their troubles. Offer to fix whatever the issue was (give them a replacement product, etc.)

Don’t ask them to remove their review right away. Once you’ve fixed the problem, and they email back saying that they’re happy, then ask if they’d be willing to go and change their review.

You won’t get 100% of reviewers to change their mind this way, but the success rate is a lot higher than if you just emailed them to ask them to remove a bad review.

Strategy #8 – A/B Test Your Images and Headlines

Did you know that you can A/B test your images and headlines?

Many Amazon store owners make the mistake of simply changing images and headlines and using gut feel to figure out winners. Unfortunately, things like days of week, weather, holidays, and other factors can dramatically affect sales over time. The only way to truly know if a certain headline or image performs better is to perform a true A/B test.

The best software for this is Splitly, an Amazon split testing tool. They’ll actually rotate various images, headlines, etc. for you and track the impact of variations. They’ll not only track conversion rates and sales, but also track how different headlines and images affect your rankings and organic traffic within Amazon.

Amazon split testing with splitly

Strategy #9 – Use the “Automatic to Manual” Sponsored Listings Technique

One of the most powerful ways to boost sales is to use sponsored listings. Sponsored listings can be quite complicated. Fortunately, there’s one way to do sponsored listings that’s actually quite simple.

You can actually let Amazon do most of the work for you. Here’s how it works.

In SellerCentral, go to Advertising > Campaign Manager and create a new campaign. When you’re asked to select the targeting type, select Automatic Targeting.

Sponsored listings targeting type

Amazon will then put together a list of all the keywords they think you might be relevant for. This isn’t just based on your product page. It’s also based on the keywords people tend to type on to land on your page, the keywords your competitors are ranking for, and many other factors only Amazon knows about.

There’s no additional setup required. Unlike AdWords, you don’t even have to write an ad. Amazon will just use your listing as the ad unit. They’ll also put together your keyword list for you. It’s plug and play.

After 5-10 days, go back into the campaign and run a report.

Amazon auto-targeting

Then you’ll be able to see which keyword(s) converted best for you. You can now export those keywords into a separate campaign and target them with a manual bid.

Strategy #10 – Use Facebook’s “Offline Events” Conversion to Run Ads

Facebook Ads is one of the most profitable channels in eCommerce today. Yet people rarely use it for Amazon sales. Why? Because there’s no built-in way to track your Amazon conversions in Facebook Ads.

If you test a dozen different groups of targeting – men vs women, 20s vs 30s, etc. – there was no way for you to figure out which group actually made a purchase. There was no way to improve your campaign performance over time.

Fortunately, that’s changed now. You can actually track your conversions in Facebook Ads. That means running ads to your Amazon product pages can be very profitable. In fact, this is working fantastically well for a lot of Amazon sellers today.

Setting up a Facebook Ads campaign is a more complex topic that’s outside the scope of this article. But the most important thing to realize is that the connection can be made now via the “Offline Events” conversion event in Facebook.

To do this, go to Menu > Measure & Report > Offline Events.

Facebook ads for Amazon listings

Then go through the on-screen signup process to register for offline events. Once complete, you’ll get to a window where you can upload a list of customer names, addresses and phone numbers into the offline events conversion tracking.

This is all info that’s provided to you in Seller Central. Manage By Stats is a tool you can use to export all the data in bulk.

Use Offline Events to run Facebook Ads

Wrapping Up

These are 11 strategies you can use to increase your Amazon sales.

What’s worked best for you? Have you tested these strategies? If so, how did they go?

Did we miss anything? What are your favorite tactics for boosting sales? Share in the comments below!

Best wishes,

Ian Luck
Founder, MarketingStrategy.com

11 Examples of Brilliant Facebook Video Ads

Video ads are one of the most effective ad formats on Facebook. The ROI on a video ad can often be several times higher than on still images.

Videos tend to perform well for a few reasons:

  • They auto-play in the news feed. You can catch attention much more easily than with still images.
  • You can convey more information quickly.
  • You can demonstrate the product instantly, rather than explaining what the product does.

So, what makes a good video ad?

Generally, a good video ad should:

  • Catch attention within the first 3 seconds.
  • Clearly communicate what the product is.
  • Be interesting and get viewers excited.

Let’s take a look at a few examples.

#1 – A Serial Killer, Delivered to Your Door


The Product: This is a subscription mystery box. Every month, you get a box containing clues to a mystery, which you help solve. It’s basically a murder mystery delivered by mail.

Price point: $27.50 per month

Landing Page: Click Here to view


What I love about this ad is how vividly it gets you to feel. The sense of mystery, creepiness, foreboding. For people who enjoy a good mystery book, I’d imagine this ad converted very well.

Their website says they have over 17,500 subscribers. At $30 a month, that means they’re generating at least $500,000 per month, not including upsells. They’re doing very well using this style of advertising.

The Video:

Surrounding Ad Text:

Hunt a Killer facebook video ad

#2 – Anti-Theft Backpack


The Product: A backpack with several anti-theft, anti-spill features.

Price point: $49.99

Landing Page: Click Here to view


This ad does a great job catching attention in the news feed. Within the first few seconds, the ad already manages to show off a few of its core features.

The ad combines several animated product shots, with lifestyle shots of the product being used in the real world. They overlay it with text to show off the most important features.

Overall a very well executed ad.

The Video:

 

Surrounding Ad Text:

 

eCommerce video ad example

#3 – Use Still Images and Effects to Create Animation


The Product: A phone case for Legend of Zelda fans (a video game.)

Price point: $14.85

Landing Page: Click Here to view


This ad is a great example of why you don’t need expensive video shoots to create an effective video ad.

This video looks like it’s a real video, but if you look closely you’ll see that it’s really just still images plus a couple effects. Basically they’re using images and using flashes plus image movements to create the illusion of it being a video.

This ad likely performed very well for them. This video got about 950,000 views. At a CPM of $25, that means they probably spent about $24,000 on this ad. If they had a 3-to-1 return, that means this ad generated approximately $75,000 in sales.

And that’s only one video – it’s likely they ran additional ads for the same product, using the same style.

The Video:

Surrounding Ad Text:

iPhone case video ad example

#4 – Custom Vitamin Gummies


The Product: A subscription for vitamin gummies. They let you customize your own package with different vitamins. They’re selling a subscription package.

Price point: $12 to $120 per month, based on quantity.

Landing Page: Click Here to view


I found this mixed-ad format quite interesting. This ad is basically broken into two parts:

  • Part One: The company explains the product and how it works.
  • Part Two: A mix between a video testimonial and a commercial. They have a customer explain how the product works.

It was a little on the longer side, but I think it works for this product.

The Video:

Surrounding Ad Unit:

supplement example ad

#5 – Try the World


The Product: A subscription snack box. Every month, you get a different box of snacks from a different country.

Price point: $35 a month

Landing Page: Try the World


This stop-motion style ad definition catches attention. It stands out in the news feed, as most other videos are of people.

This style of video is likely quite expensive – actually more difficult to produce than just filming a product video.

That said, Try the World has been around for a while – so I imagine they’ve tested multiple styles of video. The fact that they continue to invest in this style of video means it’s most likely working for them.

The Video:

Surrounding Ad Text:

Try the world facebook video ad

#6 – A Simple and Clear Product Demo


The Product: A light that lets you project the ocean floor onto your bedroom walls.

Price point: $39.95

Landing Page: Click Here to view


Sometimes all you need to do is clearly show off what a product does. This is especially true if you have a very unique product, or a very unique offer.

This video is simple and to the point. It tells you what the product does, and then shows you a few examples of it in action.

The Video:

Surrounding Ad Text:

eCommerce facebook video ad

 

#7 – Humor Sells


The Product: A better pillow, made with higher quality materials.

Price point: $99

Landing Page: Click Here to view


Yes, this is a $99 pillow. And yes, it’s selling very well.

This ad does a lot right. For one, the attention catching headline above the video gets people curious. The first 5 seconds of the video are also weird and quirky, further drawing the viewer in to check out the video.

The rest of the video balances humor and sassiness with actually explaining the benefits of the product. It’s an infomercial that people would actually sit through with a smile.

This style of ad can work very well (a similar ad launched the $1 billion dollar Dollar Shave Club.) That said, these ad types are very expensive and time consuming to produce.

The Video:

Surrounding Ad Text:

funny facebook video advertisement - purple

#8 – Create the Impression of Value


The Product: A posture correcting device. Attach it to your upper back, and whenever you’re slouching it will buzz you to remind you to straighten up.

Price point: $99

Landing Page: Click Here to view


This ad uses a combination of:

  • Text and visual effects on the screen,
  • Videos of people straightening up,
  • Product shots.

The ad creates the impression of being very high production value – which increases the perceived value of the product – yet probably didn’t cost that much to film.

Best of both worlds.

The Video:

Surrounding Ad Text:

Upright facebook ad example

#9 – A Creative, Text-Only Ad


The Product: A web analytics software.

Price point: $49 per month

Landing Page: Click Here to view


This ad really breaks the mold.

It’s text only. And it starts off by addressing the fact that it’s an ad. It made me really curious to see the ending.

The key takeaway here isn’t necessarily to do text only video ads. Instead, it’s to try and come up with something that stands out. Something that gets people to stop in their news feed and say – “Hmm? That’s interesting – let me stop and watch this.”

The Video:

Surrounding Ad Text:

Text based facebook ad

#10 – The Best Thing Since Sliced Bread


The Product: An icing squeezer that makes icing look like flowers.

Price point: $27

Landing Page: Click Here to view


This is another example of a simple, product-shot based video ad.

All of these shots can be done in one single video shoot. Note that Facebook Ads do decrease in effectiveness fairly quickly, so it makes sense to shoot extra footage and turn it into multiple video ads.

The Video:

Surrounding Ad Unit:

Product demo video

#11 – Simple Slideshows


The Product: RX Bar sells snack bars, with the ingredients clearly labeled on the front.

Price point: 12 Bars for $20

Landing Page: Click Here to view


This ad is basically just a few photos of the product, one after another. A simple yet effective ad. This could easily have been taken on an iPhone camera.

The Video:

Surrounding Ad Unit:

RX bar slide show video ad

A Few Common Themes

While some of these ads – such as Purple’s ad – needed a lot of investment to create, many of them are also very simple ads.

Before investing tens of thousands of dollars into video production, it could be a good idea to test using simple slideshows or iPhone videos. Verify that this is a medium that works well for your product or service, then invest more in higher quality videos.

Do you have a favorite ad? Share it below!

Ian Luck
Founder, MarketingStrategy.com