This could have been me had I stopped yesterday which by the way I wanted to.
This is me instead because I hung around longer.
I spent the past couple of days trying to optimize a new product launch. All metrics looked great. Every step of the funnel just as I wanted. I had low CPM, high CTR, low CPC, low CPATC, low CPIC, but.. also low conversion rate. For those who don’t know what am I talking about, I had low cost for everything, but the number of users purchasing were also low which was something I really didn’t expect to happen.
Due to this my cost per acquisition was higher than where I wanted it to be. Instead of making money, I was losing money until I launched the retargeting campaign.
For those who don’t know, retargeting is reaching warm audience or potential customers again. People who showed purchase intent but didn’t purchase. My retargeting campaign brought me really cheap sales. So cheap that it offset all the loss that other campaigns caused. Not just that, it turned the overall campaign around and made the product launch profitable.
This showcases two things. 1) Retargeting is really really powerful. 2) When you’re thinking of giving up, hang around just a little bit longer.
I had a really busy day today. We successfully launched phase 1 of scaling for our new store. I also started retargeting campaigns today. For those who don’t know, retargeting is simply reaching back to the potential customers who showed some sort of intent to purchase your products.
Generally, I like to run 5-6 types of retargeting ad-sets including retargeting those who visited the product page, added the product to cart, initiated check-out, watched at least 75% of our video ad, and top 25% of the users by time-spent.
Recovering abandoned carts, and potential customers with intent is incredibly important. You’ve often spent 90% of your budget already to capture their intent, you just need spend 10% more to capture the sale.
I prefer running retargeting ads with photo creatives. Although I run almost all other ads with video creatives. Since the retargeting user group have already seen video ads, they just need to be reminded again about a product with a photo. This has provably worked for me and I’ve had tons of data to support this argument.
This is the second post of the three-part series that I’m publishing on dropshipping to help create awareness of what it is, and scaling strategies that we use in our company to rocket-fuel growth. This post is not for beginners and will make more sense if you have already started your dropshipping business or have some sort of digital marketing experience.
Since 2016, our company has been running several dropshipping stores in 3 different niches. Most of the growth comes from paid-advertising with majority budget spent on Facebook, Instagram and influencer marketing (also on FB & IG). We also spend about 20% of our ad budget on Pinterest and Google Ads. There is no reason why we spend less on the latter, we’re just more comfortable advertising on Facebook. It’s possible other dropshippers find more success on Google. So by all means I recommend that you explore it. Below I’ll list the top strategies we use in our company for growth.
#1 Product Hunting
I can’t stress enough the importance of product in your dropshipping business. Without a good product and creative, your chances of winning would seriously suffer no matter how good your ads are. I recommend that you spy other stores, AliExpress, Wish, Amazon and everything else that you can to get access to products before others. Most dropshippers use some kind of product spy tool which is often a paid subscription service. You can also search for products on social media platforms where they are being advertised.
#2 Influencer Marketing
Influencer marketing is often always an easier method to find success with dropshipping. To some people it looks more complicated because it involves reaching out to many people, testing their audience and sometimes losing money to less-engaging audience. You may also end up finding accounts with large amount of bot followers, causing total capital loss for the campaign.
The reason why I say it is the easier option is because once you make connection with the right influencers, this is basically an on-going, long-term money making opportunity. You can keep trying new products in the same niche with the same influencer and you can continue to get sales.
Influencer marketing is often also lesser competitive compared to the platform ads where everyone is competing, whether in a dropshipping business or not. This also means that once you have right influencers, you’re likely to have a much higher profit margin compared to running ads on any platform.
#3 Pixel Training & PPE Ads
Without pixels installed on your store from Facebook, Google (and any other platform you choose to advertise on), you’re never going to be able to run successful ads. In short, pixel is a small snippet of code provided by ad platforms that you can install on your stores. Once installed, the pixel establishes a connection between the store and the platform. For example, FB pixel will exchange data between the actions committed on your store and FB ad platform.
The pixel fires whenever a user initiates any action on your store whether it is view content, add to cart, initiate checkout or purchase etc. All user behavior and action data is stored in your pixel. As long as the pixel keeps getting fired, it continues to create an audience profile for you. The more sales you have, the more easily the pixel can help you find better audience. Without pixel training, your campaign is unlikely to do well for you.
First strategy that we commonly use to train pixel is running influencer marketing campaign to get quick, cheap sales. These sales help pixel understand our audience.
The second strategy that we use is running PPE (Page Post Engagement or simply Engagement ads). Engagement ads are cheaper than conversion ads. You get quick social proof, you get quicker, cheaper clicks and this can be a nice way to train and prepare your pixel for your actual campaign.
#4 Horizontal Scaling
After generating a few sales from influencer marketing and PPE ads, we start running website conversion ads. We create a large number of ad sets with a unique targeting angle for each ad set.We generally run these ad-sets on a small budget. This allows us to scale our campaign through many targeting angles. We also end up testing many targeting options. Setting a small budget for each ad set means you’re not trying to win all bids and so you don’t over-spend. Instead you scale horizontally, running many $20-$50 ad-sets. This way you can continue to lose bids (save money) as well as spend more budget (scale) your ad campaign.
#5 Vertical Scaling (with Manual Bids)
Once we have found our top winning ad-sets we also want to scale them vertically. What that means is we ideally want to increase budget for these ad sets. There are generally 2 methods of how this can be done.
Using the first method, you can increase budget for winning ad sets by 10-20% every 2-3 days. This is obviously a slow process and can sometimes not work as expected because ad-sets try to re-optimize every-time they are updated.
The second method is scaling through manual bids. This means that the budget can be exponentially and immediately increased. But we put a cap on what we’re willing to pay for each sale. If the ad-set fails to get a sale, it stops spending. We have had success running $5000/day ad-sets using this method. So this is a fool-proof method to scale vertically. You win, or you don’t spend.
#6 Lookalike Ads
Lookalike is a magical AI technology by Facebook which allows you to run ads without any targeting options. Once you have generated more than 100 sales from a single country, you are eligible to create lookalike audience. This is the quickest, dumbest, simplest way of scaling your ads by letting Facebook do your job.
The simplest explanation of retargeting is not leaving money on the table. A lot of clicks to your website are going to result in missed sales, abandoned carts or simply window shopping. You can reach these high-intent buyers again. Just run retargeting ads, emails & SMS to convert these missed leads for almost negligible price.
A lot of this information is going to sound tough especially if you’re a first time advertiser. But who said running a 7-figure business was going to be easy. The good news is, you can simply start with influencer marketing and learn your way up. The better news is, this is a very low cost business to begin with. You can start with as little as $2000 and make your way up to 7-figure. And the best news is, we have seen it happen first-hand.