2023 is already presenting challenges that feel completely unique. All of a sudden Black Friday and Cyber Monday 2022 feel like forever ago. We've been riding such highs and lows coming back from Covid. We've seen supply issues and shipping problems. It's been really hard for our customers to try to get some normality and figure out what what it is they can do to put a plan back in place. They're all going through the same thing. So, anybody out there who feels like. Is this Just me? No, everyone is trying to figure out what to do.
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Webinar Content:
- The Big Shift: Proving Marketing Spend Efficiency
- Finding Balance in the Data
- Steps to Build a 2023 Growth Strategy
- Expanding Channel Strategy Beyond Paid Marketplaces
- You have a clean data set. Where do you go from there?
The Big Shift: Proving Marketing Spend Efficiency
A big pain point among our customer base is it's getting more expensive to acquire customers. According to Business Wire, the cost of acquiring new customer rose 222% between 2014 and 2022. Channel attributions aren't what they used to be. People are switching their mindsets from, "hey, I've got an unlimited budget. I can just toss it into this channel. I can just grow without any concern, and everything's great," to "we need to think about operational efficiency and tying marketing to business outcomes."
We're seeing more eCommerce companies focussing on profitability versus just growth at all costs. There's a shift happening. People are focused on: How do we actually make sure that the investments we're making in our paid channels are actually driving business profitability?
Finding Balance in the Data
Some of our clients have taken austerity measures and some have even cut channel spend in half. But they are also finding there needs to be a balance and the question we're hearing is, "how do we go about finding that balance in our data?"
Not everyone's looking at the data in the same way. They might be only measuring one or two data points that define success. That playing field has changed. So have all the attribution models and the ways they're measuring success.
There is a need to discuss things from a wholistic business perspective instead of at the campaign metric level.
What's really changing is we're seeing less money being spent and more focus on things like customer lifetime value and brand loyalty.
The way to achieve this is getting away from trying to run your success in business performance off of single-channel metrics like ROAS. Instead, focus on things like MER (marketing efficiency ratio) or CPV (cost per view). This way you can tie the investment in your paid channel to the overall business health.
In 2023 the cost of capital is higher. There's more of a focus on profitability.
The marketing teams are starting to be more tightly coupled with the finance teams to not just talk about marketing KPIs, but business health and trajectory.
Steps to Build a 2023 Growth Strategy
Again, it starts with your data. The tech boom in marketing has made it a lot easier to connect to a whole bunch of different data sources. We almost have too much data in front of us these days. But a good place to start is to look back on the past 12 months and really be honest with yourself. What worked what didn't work?
Make sure you're looking at the data horizontally across your organization. You can't only look at the performance of your channels. Ask, "what was the impact of returns? Or cost of goods? Or the margins that you have/want?" You have to pull in the larger team. You have to look at the data sources. Because they can get out of hand quickly.
For example, if you're on Shopify, you have 7,000+ apps you can connect to in their marketplace. Well, every time you connect an app, you're getting a different data story.
Make sure that you agree within your organization on how to go about measuring success. Make sure you're tying those measurements to metrics that drive your business.
You know your operational costs. You know your cost of goods. You know the acquisition numbers. Always ask, "Is it costing me more to acquire new customers or less compared to the last 12 months?"
Take the time to review the data. Paying painstaking attention to your data will always pay dividends. If you're working with an agency, make sure they're being transparent with you and you're able to actually have that deep dive discussion on what all these metrics mean.
What we do with our clients is we really focus on the average baseline advertising channel data: Google, Facebook, DSP, etc. Then we focus on the analytics data. And then, of course, the shopping data. We want to get a full horizontal view across the organization of what the data means to each of your departments, but also to the overall business health.
In these exercises, always try to take the a mindset of your customer journey. Every business is trying to do a few of things really well: acquire new customers, retain those customers, and manage costs.
So if you're always looking at the customer journey and your data flows in that journey, then you can choose the proper things to measure to gauge the success of any initiative aimed at affecting that journey.
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Expanding Channel Strategy Beyond Paid Marketplaces
The gravy train of just dumping a whole bunch of money into paid and then seeing a whole bunch of revenue at the other end is over. So, what are the other levers that can drive business growth?
You have to think about this in the mindset of a managed growth model; small incremental steps across paid, earned, and owned media/campaigns will get you where you want to go. It might take you longer to get to goals that used to be attainable quickly by pumping money into the marketplace, but it will get you there sustainably. The days of growing 100% every year on year is a little unrealistic now.
Look for the gaps in your marketing plan. Do you have an account-based marketing approach. Do you have a robust loyalty program? Do you do anything to bring customers back to purchase again? How are your promotions? All of these things become more important in 2023.
You have a clean data set. Where do you go from there?
It depends on the business objectives and the type of business. So the industry you're in. Once you have the data, you can really look at what's working, what's not. You can have some ideas around your cost.
This will allow you to surface your most profitable channels, products, and customer types. You'll begin to know where you should be doubling down and spending more money.
You may have 10,000+ product in your eCommerce shop, but you probably shouldn't be spending equally to promote and sell all of them. Instead, look at your top 10 and figure out how to bundle products and cross-promote effectively.
