How do you know which product is your most valuable? And how do you optimize sales on that specific item? Here’s what you need to know to make sure your marketing budget is spent the right way on Google Ads.
To figure out what your most valuable product is, you need to analyze your ecommerce assortment on categories, brands, and products. You analyze how sales have been going during the year and take into account how much you’ve spent on Google Ads on each category, brand, and product.
Let’s say you’re working for a retailing company and you go through your costs for sporting goods. Three of the brands you’re working with are Nike, Asics and Under Armour. You can see that you’ve spent a lot of money on a specific category, but it’s only one type of running shoes from Nike that people actually buy. That means you know what your most successful product is and now you need to optimize sales for that item.
How do you optimize sales then? First of all, to be successful you must make assortment optimization a priority. In short, start out by identifying the product brand and category, and show that item to more potential customers. For this, Keywordio has developed a very useful tool. With this, you not only see the actual analysis but can control your whole market budget.
You also need to look at the relationship between ROAS and pricing. In this example, Under Armour has a low ROI with pretty high prices, so maybe they’ve set up the pricing the wrong way. But if they would lower their prices, they could get the bubble to move more to the right. If you look at the other example with Nike and Asics, you can see that the price is also pretty high but the ROI is instead much higher. When setting your ROAS target, it shall include logistics, warehouse, lost sales and return cost for each product, brand, and category.
Analyze your variety of goods
When it comes to analyzing your whole variety of goods, start out by doing the same thing that you did for one product but instead do that analysis for your whole assortment. If you understand your business and where you make your money it’s obviously easier to know what you need to purchase. If you don’t, you will end up buying every available brand, and won’t be able to make the right prioritization. Maybe you chose to prioritize “underwear and socks” (picture below) that turned out to be low in revenue. Instead, you should've focused on “outerwear” which is instead has a high revenue.
Your product titles are very important. You should structure your titles based on brand, category, and attributes, and use different structures for different product titles.
Make a decision if you’re gonna continue to let the assortment grow or drop it entirely.
You can’t sell everything to everyone, so based on the data you’ve gathered you need to decide what products and categories you should continue working with.
To be successful in your optimization of sales you need to know how much you earn separately from categories, brands, and products, and figure out where you sell the most. This is just as important for an ecommerce business as others. However, an ecommerce company can have an incredibly large amount of products which makes it hard to get an overview. At Keywordio we can help you distinguishing every available product and analyze your whole variety of goods. Get in touch with us to get to know more.