Using Marketing Potential Effectively: Growth Through Data-driven Channel Control
Newsletter, SEO, SEA, price comparison: Every marketing channel is characterized by specific features and potentials. Accordingly, every channel requires individual management to achieve maximum results. Where do high returns, cancellations or sales costs occur, which assortment is selling well in which channel, where can margins be increased significantly by promoting certain product groups intensively? Searching for the answers, simple contribution margin accounting can reveal essential insights. A minubo customer happened to experience this just recently.*
*assortment and numbers edited
First analytical steps
Order values indicated that SEA was highly successful as a marketing channel – so why not invest more budget in the keyword portfolio? By using minubo, the shop was able to calculate the actual profits before making further decisions on investment. The result was surprising.
Going deeper: Contribution margin accounting
Contrary to expectations, SEA performed much worse than the quite low-selling channel Direct: Despite order values being 1.5 times higher, SEA (as well as Newsletter) recorded a lower net sales margin due to higher return rates and cancellations.
Drill-down return rates
On the basis of these insights, it is crucial to actively reduce the high return rates in the problematic channels. Therefore, they are drilled-down to single product groups. Evidentially, the high return rates actually originate from specific product groups for the most part.
After the analysis: Make better decisions – pull the right strings
Direct: the targeted channel for marketing to existing customers
Those who visit a shop via Direct typically know what they want. This leads to low return rates and high margins.
Newsletter: promote sales of selected products
Newsletters are a great opportunity to intensively support sales of selected products. The right product portfolio enables the avoidance of high return rates and sales cost as well as allowing for the exploitation of profit potentials.
SEA: Create a high-margin keyword portfolio
SEA records high costs of sales as well as high return rates in Jackets and Jeans. Great unexploited profit potentials are hidden here!
Price comparison: beware of high sales costs
A customer who compares prices is located in quite an advanced state of the conversion process – this reduces returns. The one who keeps an eye on his sales costs now has a good shot at high margins.
SEO: Stop optimizing ranking results blindfolded
SEO is time-consuming. Therefore, it is important to focus on keywords that actually flush money into the coffers.
*based on anonymized customer data