35.29x ROAS With New eCommerce Strategy

Transcript

Hey, how’s it going? It’s Chin Gregory. And in this video, I’m going to walk you through a new eCommerce strategy that I’ve been using for my clients to get them between 30 and within 20 and 40x return on ad spend. And I know what you’re probably thinking, another guy on the internet making some claims about how great his return on ad spend. So I just wanted to show you some results real quick before I show you how we actually getting such high return on ad spend numbers.

So if you can see here, if you look down here, we’re spending… This one has got 39.87 return on ad spend. This one’s got 31x return on ad spend, and you can see here, 14x return on ad spend for that account. Let me show you some more. Okay. We’ve got here. You can see with this client we spent £43,600 and we generated over 1.5 million that’s 35.29x return on ad spend. Now, the reason why I show you this is just so that you know that what we’re going to talk about today is grounded in some real evidence and real proof.

Now, I’m going to go over to my whiteboard real quick, so I can show you how I’m able to generate such great return on ad spend numbers for my clients. But before we get into that, if you want to learn more or if you want to go into more detail, I’ve got a free training on at learnwithchin.com, where I really go into detail about exactly how I’m able to get such great return on ad spend numbers and how I’ve scaled multiple eCommerce businesses to six figures per month and some to six figures per day.

So if you’re an eCommerce owner and you want to scale your eCommerce business using social media, Facebook ads, Instagram, et cetera, go to learnwithchin.com. I’ve got step by step training there, where I literally walk you through my entire process, showing you how I’m getting all these results and how I’m able to take multiple eCommerce businesses to six figures per month and some to six figures per day. That’s learnwithchin.com.

Okay, so now let’s dive into ROAS. Now, one of the really important things about ROAS, the first thing we want to do is we want to really understand; before we can manipulate and before we can get the best return on ad spend, we want to understand how return on ad spend is actually calculated. And this was a mistake that I made for so long. And I messed this up for ages when I first got started.

And the way I’ll explain it to you is that if you look at what return on ad spend. Return on ad spend is what we call an output metric. Okay. It’s an output metric. And I learned this from Jeff Bezos. And I feel like if you’re an eCommerce industry, everything, listen to Jeff Bezos as much as possible. Amazon, you can pretty comfortably say is the most successful eCommerce business ever. And arguably might be one of the most successful companies in human history.

And Jeff Bezos said something really, really clever that I heard a few years ago. And he was like, “If you focus on output metrics, then it’s going to be very difficult to control those. But if you focus on the inputs of that output metrics, and you can control those, that’s how you get the best results.” So the mistake that I made for years and I see a lot of eCommerce businesses do this as well, is that they focus on ROAS, which is an output metric, when the real focus needs to be on the inputs that control ROAS.

And those inputs are traffic… Let’s put this one here… conversion rate of the website, average order value and lifetime value. Okay. So traffic, which is the cost of getting traffic to your site. Conversion rate, how many people you’re converting into customers. Average order value, which is the amount that each customer spends on average at the point of purchase. And then lifetime value, how much each customer is worth to your business over a certain period of time.

Now, these are all what we call input metrics. Okay. And here’s the kicker, of these four metrics, traffic, which basically is your ads, right? These are your ads. It’s only 25% of the output metric. And so what I spent so many years doing and I see a lot of eCommerce businesses do now is they spend all of their time and effort trying to fix their ads. It sounds counterintuitive, return on ad spend that obviously you’d think that because it’s the word “ad” is in there, that you should spend most of your time actually working on the ads. But it’s basically only 25% of the entire return on ad spend output metric. So you’ve got to think about it. How much time are you spending on the ads compared to conversion rate, average order value and lifetime value?

Now, the way that I’m able to get such great results is that as soon as I start working for a client, before I even go anywhere near the ads, I go and I try to get conversion rate up, I increase average order value and I increase lifetime value. Those three metrics have a bigger impact on return on ad spend than actually the performance of the ads. And I don’t know that sounds crazy, but I’ve just shown you the proof of how we’re able to do it. And the reason why I’m able to do this it’s because I’m constantly going into an account and saying, “All right, let’s improve the conversion rate, let’s get the average order value up and let’s improve the lifetime value.”

And the reason why these are so great is because conversion rate, average order value, lifetime value, those are all within your control. If you were to break down traffic even more, okay, you’ve got CPM and CTR, right? Okay. Cost per impression and click-through rate. CPM, a lot of the time that’s out of your control because if you’re in a market where a lot of advertisers are advertising for the same audience, your CPMs are going to be higher and that’s way outside of your control.

So always try and focus on the things that you can control, which are conversion rate, average order value and lifetime value, first. Lifetime value is actually the Ninja one. This one actually makes all the difference, but I’ll go into that into another video. But the mindset of looking at the output metric, which is return on ad spend, and then focusing on the input metrics, but then looking that we’ve got four inputs here, traffic, conversion rate, average order value and lifetime value, traffic is only 25%.

So the advice that I would give to you is before you really spend a lot of time fiddling around with your ads, look at the conversion rate, could you get that higher? Okay. Look at your average order value, is there a way that you can add more products, incentives for higher purchases, bundling, upsells, things that you can do with your business to get the average order value up. And a lifetime value. Are you using email marketing? Have post-purchase campaigns. What’s your customer retention like? All those things will help increase lifetime value.

And when you use, do this as a whole, okay, when you concentrate on each of these constituent areas, the input metrics, that’s when you really see fantastic results from your return on ad spend. And then once you’ve got all those working, you can go back into your ads and make your ads even more effective. Okay.

So just to kind of recap, traffic, conversion rate, increasing conversion rate, average order value, lifetime value, these are the input metrics that go into return on ad spend. And by focusing on conversion rate, average order value and lifetime value first, before you even touch the ads, that’s how you’re going to get the best results for your return on ad spend.

Now, if you want to learn more about how I’m doing this, like I said, I go into a lot more detail in a free video training that I created for you, that you can go and access at learnwithchin.com. That’s learnwithchin.com. It’s a free training. And I basically dive into my client’s accounts, the accounts that I’m managing, I can show you my ad accounts, how I’m able to get these return on ad spend numbers. And I show you the exact process that I’m using to take multiple businesses, eCommerce businesses, to six figures per month and some to even six figures per day.

So if you want to scale your eCommerce business, go check out that training. But other than that, that’s it for me today. Please feel free to comment below. I’d love to hear your comments, your thoughts about this. What have you tried? Are you getting some results with conversion rate improvements or average order value? Which area do you see in your business is going to have the most success? I really love to get your feedback on this video and what you’re going to be trying with your business.

That’s it from me. Take care. God bless. And I’ll talk to you soon.

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