Report: Low offer vs Irresistible offer for small eCommerce brands.
In this newsletter, we will share learnings as well as how the offer is impacting the sales, by working with various commodity driven ecommerce brands.
Running ads with less offers for small brands (10-20%)
We have worked with some small brands on advertising to acquire new customers. And for those brands, we were able to provide only an offer of 10-20%, due to the low margin & profit that they required.
Here is the overall spend & revenue we generated:
We Spent Over - $4670
Avg ROAS - 0-1.5X
Offer that we provided - 10-20%
In these cases, people are visiting the brand but not getting converted. The below data indicates that CTR is 3.44 which is great but the people are only interested in the ads and they are not getting enough motivation to make a purchase.
This brand actually sells Green tea, Matcha, natural & organic bags, water bottles, and water filters which are the common products sold by the brand.
As already the big players have taken up the space in the market these products have become commodities. So naturally, people prefer to buy there. Until the brands keenly invest in the values + innovations of their space in the market, it is very difficult to rope in the customers who buy other brands.
If you have products that are in the market already, then you become a commodity, not a brand that stands for something.
If you have commodities, the only option of selling your products would be by compromising your price. This brings sales in the short term, but it kills your profit margin in the long term.
Also, we tested an irresistible offer for small brands, and here is what happened!
Running ads with irresistible offers for small brands.
For the other 2 brands, we ran ad campaigns with 30-60% Offers. The brands are selling massage guns & backpacks.
These brands are also selling commodities because these products are already in the market & they don’t stand for anything.
Since they are giving offers, we were able to sell their products from the beginning of 1st week as soon as the ad got featured. Here is the split & total.
This data indicates that people are buying with the offer & urgency as a motivation, but didn’t understand the value of the product completely.
For brand A, we also ran campaigns without an offer. During that period, we didn't get sales like the above one. This comparison shows that people are interested in buying if the offers are higher.
Here is the offer price on the site for brand A.
In another scenario, Initially, we ran ads with 20% for the same brands & the sales were reduced by 50%.
This indicates how people are engaging with ads from the same targeting audiences.
Based on these data, Offers are the key motivation to take action for smaller brands.
But you need to work on value or innovation to show yourself away from the competition. So that you can win the market in a long term.
P.S: Join the upcoming eCommerce marketing seminar where I will be teaching you How to build a stable & profitable e-commerce business.📲 Register now