Hey, it’s Chin Gregory, and in this video, I want to show you how you can instantly increase your return on ad spend, that you’re getting from your social media marketing. Now, what’s flashing up on the screen right now? These are some screenshots from my client’s accounts, and as you can see a lot of those are clients, who are getting way over 5x return on ad spend. In fact, we’re averaging about 10x on all of my client accounts. And so the reason why I show you this is so that you know that what I’m going to cover in this really short video, it’s proven to work, it’s based on the real evidence and real results, and you could actually take what we’re going to cover in this video, and instantly go and apply and start seeing some results in your business as soon as you finish watching this.
Now, the main mistake that I see e-commerce owners make, marketers make, is not fully understanding what goes into return on ad spend. So, if we’ve got return on ad spend, right, it’s basically made up of two main metrics, CPA and AOV. So that’s CPA, cost per acquisition, which is the cost of acquiring a new customer and average order value, which is the amount every customer spends at the point of purchase or the average amount each customer spends at the point of purchase. Most businesses understand this, but here’s where a lot of people start going wrong, is that if you want to increase return on ad spend, you’ve got to break this down into its constituent parts. Because if you just go and try and say, well, I want to increase ROAS, it’s going to be very difficult to do that. But if you increase the constituent parts, that’s where most of the benefits come.
So if we look at cost per acquisition, that’s made up as two main areas, traffic, and conversion rate of the website. You’ve obviously got to get traffic to your site, but then the more traffic you convert or the conversion rate from your website, that’s going to determine the cost per acquisition. Now, traffic can also be broken down into CPC, which is cost per click, and CTR, which is the click-through rate. Now here’s where businesses start to go wrong. If we look at CPC and CTR, we can call these ads metrics, because these are metrics that are coming from your actual ad campaigns. But we look at conversion rate, that is a website metric because that is determined by your website. And then finally AOV is, you call it a biz metric because that’s basically your business model.
The biggest mistake that people make is to increase return on ad spend they put all of their focus on the ads. All their focus on Facebook, Instagram, YouTube. Whereas if you see here, your ad metrics really only account for one-third of what actually goes into return on ad spend. And so the way that I’m able to help my clients get such great results, and the way that I’m able to improve return on ad spend so quickly is that, before I even go anywhere near the ads, I focus on getting conversion rate up and average order value up. Because these two metrics are within your control. Whether it’s Facebook or it’s Instagram, or it’s YouTube, there’s a big element of the success coming from that platform that is outside of your control.
Like if you’re in a really, really competitive niche or there’s a lot of people competing for the audiences that you’re targeting, that’s outside of your control. And that’s going to increase the cost, and that’s going to increase things like your CPM. Whereas conversion rate, that’s your website, that’s completely in your control. Average order value, that’s a business metric, again, that’s completely within your control. So before I ever look at touching ads, conversion rate, that’s the first thing I’ll go to. And if you can improve your conversion rate, let’s say from 2% to 4%, your total ad spend is going to increase without you even touching the ads. So I see a lot of people go in and try and fiddle with the ads and completely neglect the conversion rate. Whereas conversion rate is going to have a much bigger impact on actually converting the existing traffic, you’re getting, whether that’s ad traffic or organic traffic, that’s going to have a massive impact on return on ad spend.
So what are some of the ways that you can increase conversion rate? Well, by far, the quickest and most effective way to improve conversion rate is the copy on your website. The sales copy, the product copy, the copy that’s on your website is going to have the biggest impact on conversion rate. From all the clients I’ve worked with, all the brands I’ve worked with, nothing improves conversion rate quicker and more effectively than improving the copy. And so whether that be the product copy, or whether that be copy on the landing page, going in and having a look at what type of copy you’ve got and making some improvements to that, to really, really convert that customer and put your value proposition of your product forward, that’s going to have the biggest impact.
Other things that have impact on conversion rate, site speed, customer experience, the way that your product page is laid out, video as well. Video is a huge one. Getting video and reviews and testimonials and that type of thing onto your product pages. That’s going to also have an improvement on conversion rate. But whatever you go and try and do, that’s the first place you want to start. Start with conversion rate, that’s going to make the biggest impact.
Then we’ve got average order value. And average order value is absolutely huge because if you can increase the amount that each person spends when they could become a customer of yours, that’s going to jack up ROAS and again, you haven’t even touched your ads yet. So what are the things that increase average order value? Well, upsells, so that’s where someone buys a product, and then you immediately offer them a complementary product that they can buy as well, usually at a discount. That’s going to increase average order value. Bundles, you can bundle some of your products together and give them a slight discount on that. That’s going to increase average order value.
But of all of the things that increase average order value, the one that’s my absolute favorite, that I see being the most effective, is giving some kind of incentive and a discount for increasing the cart value. So, for example, free shipping on orders over $200. Now, the reason why I like this so much is because you don’t need any extra products. You don’t need to go and make something new. Sometimes if you don’t have the complimentary products for an upsell, for example, you might have to go and do some tweaking with that. Or maybe sometimes the products that you have don’t lend themselves well to being bundled. But no matter what business you’re in, if you’ve got more than one product, you can give some type of incentive for having more at the purchase. And the one I love the most is free shipping for products over 200 bucks, or if you spend over 150 bucks, you get free shipping. That’s going to make massive impact on average order value.
And when you combine those two things within your control, improving the conversion rate, increasing average order value, you’re going to see your ROAS go up, before you even touch the ads. Now, obviously, ads are very important, and there’s some things that you can do and know, which I’ll show you in another video of how to improve the quality of traffic you’re getting from your ads. But start with the conversion rate. Okay? Try some of these things out. Improve site speed, better copy, videos, reviews, testimonials. Have a tweak of your product pages. That’s going to improve your conversion rate, and that’s going to jack up your return on ad spend.
And then your average order value, as well. What can you do to get people to spend more at the point of purchase? Is it going to be a bundle? Are you going to have some upsells in there? Are you going to give them some type of free shipping or gift or incentive to have more products in their cart? These two are going to have a massive impact on your return on ad spend. And then that way, when you go to fiddling around and trying to fix your ads, your ads are only going to be that more effective.
Really hope you find this valuable. Go ahead and use it. I promise you you’re going to get some great results. Feel free to comment below if you’ve got any comments or questions and I’ll answer them. But if you want to increase return on ad spend, start with the conversion rate on your website, then have a look at the average order value, increasing that. Finally, once you’ve exhausted those two, then have a look at your ads. That’s what I do, and that’s how I’m able to get my clients, on average, 10x return on ad spend from their social media marketing campaigns. That’s it for me. My name’s Chin Gregory. God bless, take care, and I’ll talk to you soon.