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[00:00:00] Today we are talking about how to go from single to double digit ROAS, how to do it, what things to look for. As always, I'm Nick and I'm Ricky and welcome to the Demand Gen Daily Podcast.
[00:00:22] Welcome back and thank you for by leaving us a comment. Leave us your questions. We make episodes out of them so we will answer them. Today we're talking about how to go from single
[00:00:31] to double digit ROAS and there is no single way like that's the punchline. There's more than one way and in fact it's highly contextual to your own market. However, there are some broad rules
[00:00:44] we can talk about. Ricky, what are your thoughts? Yeah, so I should also preface this by saying this conversation largely relates to e-commerce products. When we talk about going from single to double digit ROAS, one scenario is basically you're selling a product on, let's say on Meta,
[00:01:05] on Facebook, Instagram, you're already getting a decent ROAS. Let's say it's like three or four or five and you're profitable with your current paid sales but you're struggling to figure out
[00:01:17] how to get it to that next level where you can really scale and the reason why you need a high ROAS to be able to scale well is because the higher your ROAS is, the faster your cash comes back
[00:01:29] and the faster you can scale your business because otherwise you will soon a run out of cash if you try to scale too quickly below ROAS. So that's why it's so critical especially when you're trying to scale your e-commerce store and let's say you're in this situation maybe
[00:01:43] you've got like a four or five x ROAS, you could be somebody who's tested lots of different A-B tests or maybe you're using all the different types of creative video, all the different types of creative and basically assuming you're following best practices, you've read the blogs, you've
[00:01:59] watched the videos, you've figured that part out but you might be getting at that point if you're following best practices it's tough but you might be able to get like an eight to a
[00:02:07] 12 if you're really killing it, eight to 12x. Now but how do you get those higher numbers that are the 20x, the 30x ROAS that you might have heard about maybe you've never seen it, it's definitely
[00:02:18] possible. We have several clients of ours where there is achieving those kinds of results and I can tell you the answer is it's basically twofold, it's two elements one is you have to have a really solid remarketing funnel. Remarketing is generally where you achieve your highest
[00:02:34] ROAS through all of your campaigns but there's a limit to that because you obviously have to to scale that you need to have a certain volume coming through your code and that's going to bring
[00:02:43] down some of your ROAS. Now so how do you outside of remarketing, how do you really jump up those numbers? It comes down to email marketing on your e-commerce store. If you're doing email
[00:02:53] marketing really well this is where you could immediately jump from like an eight x ROAS to like a 20x overall simply because running an email program is so much cheaper and when you have the
[00:03:06] scale of all of your shoppers, your email subscribers it just allows you to achieve so much more scale if you have a product where people are willing to purchase it again and it's not something that
[00:03:20] they're going to purchase one time and then it's basically over for that product. Absolutely. So keep in mind when you're running these email programs again this assumes you've got like your all of your different email flows set up. Let's say using a platform like clavio,
[00:03:34] you've got your welcome flow, you've got all your different down sell flows and things and when you've got all of that in place that's the minimum bar. When I talk about email marketing I'm talking about those promotional emails the ones that are the deals, the ones that are
[00:03:48] driving urgency giving people a reason to shop and one of the biggest downfalls that we see when some of our clients are using email is that they're not sending enough emails. This can be huge
[00:04:00] because most people don't want to annoy everybody with too many emails, they want to send oh just like one a week or maybe one a month in some cases but really you can send a lot more than that and
[00:04:11] what you're going to see when you send more emails is that with each incremental email that you send out you will get more sales. Now it's going to slow down as you get to if you're
[00:04:22] doing like two emails a week you're going to start to see those gradual sales increases basically start to decrease a little bit but you're still going to get more sales. You just need to keep
[00:04:32] an eye on the unsubscribes that are happening once you get into that two a week kind of level in terms of your emails you want to keep an eye on those unsubscribes to make sure that you're
[00:04:41] not losing too many of your email subscribers. Basically if you have a solid remarketing program in place and if you've got a sold email program in place that's what you need to
[00:04:51] take your ROAS to the next level of course it always helps if you have a really solid brand if you've got a brand that's immunity driven and has a larger purpose than simply the product itself
[00:05:02] those types of things are always helpful. The brand is one of the best motivators long term in terms of increasing sales and lifetime value of your customers but without that email program you're really going to struggle to get to that higher level of ROAS you're looking for.
[00:05:17] Yeah and one thing that I would like to say especially with the higher ROAS brands that we work with and have consulted for I'll say this it's like I get sent to link okay we have this
[00:05:29] consultation call with this company and I pull up their website and I'm like this is a 15x ROAS brand or I pull it up and I'm like this is max 8x ROAS you can basically like once you've been
[00:05:42] in this long enough you can pretty much set your watch to okay I know where I can get this thing based on like their brand you know how good it is are they pushing like beyond below are they
[00:05:54] leading are are they leading their industry brand-wise or are they like in the middle of the pack and you can tell right away it's hey are they changing their look and feel seasonally
[00:06:06] are they doing the right things on the brand side not just on the marketing side because they're generally coming across for help because the ROASs are low I would say people are generally
[00:06:15] reaching out to us with like a ROAS that's under five generally and we get some that are people that are but a plateau between five and ten where they're like hey like I really like to get above
[00:06:26] this and I'm shopping around and we help those two but I would say 70% of the brands that approaches are in that under five you open up the website you're like yeah like this is like a
[00:06:37] 6x ROAS this is like a 12 this is like a potential 20 above and you can eyeball it by going through their content their website poking around in there seeing if you're getting some remarketing
[00:06:47] filling something out so you can get an email and get like a taste of what they're doing it's like you can get very quickly you can identify where they're at I think that the brand cannot
[00:06:55] be understated because I've seen the exact same program rolled out for for example like companies that have multiple brands underneath them where the program is like fundamentally like
[00:07:06] more or less the same and one of them will have an 8x ROAS and then and the best one will have over 20 and it comes down to brand assets how they're being positioned how people perceive them in the market
[00:07:18] price point and like the funny thing is that not only are the ROAS is really high on the best brands but the markup is also the highest on those best brands so it's like a double whammy
[00:07:28] it's like winning on top of winning that's all we got for today until next time