At some point, probably many points, all businesses are faced with the question of how to grow profitably. What’s the right next move? What does it really mean to “grow your business?”
The mind immediately goes to “make more sales”, but it’s more nuanced than that, especially when it comes to cash. If you have limited resources, it’s hard to buy the ads and all the other things that come to mind when you think of “growing your business.” Where should your precious resources go?
What you really want during those crucial foundational years, is a heavy focus on strategy, particularly where marketing is concerned. Every single dollar should work for you somehow, and the strategy that you put in place should be solid enough to scale as you grow.
As you’ll see as we deep dive into a year in the life of one of our clients, when a solid strategy works, it really works. But when that logic is changed, with no meaningful strategy to replace it, things can go off the rails quickly.
This client came to us in 2022 as a growing brand with limited monetary resources, but a solid foundation to grow from, and a nice catalog of quality products. Their previous agency did a good job of growing their business from a vendor first model to marketplace, but then stalled after focusing too much on engagement based growth rather than profit based growth, as you can see in the chart below:
The red line represents last year, the blue line is this year, when numbers flattened out.
As a cash-limited company, particularly if it is paying your salary it’s crucial to:
- Be strategic with where you place your advertising money. Not all ads are created equal.
- Understand the strategy inside and out. Know what each part does, so you know what will happen if you change something.
- Be wary of ads managers, and choose yours wisely. There are many “gurus” in the digital advertising space, and plenty of ads people who follow them and employ their techniques without regard for whether it’s the right strategic move for the client.
Is “Growth” The Real Goal?
One important question to consider is what you want your brand to grow into, and then of course, how to make that happen. For example, if you are doing this business for needed income to pay your bills, it really matters whether it’s profitable or not. And paradoxically, it may actually make you more money to sell less, so you can focus on quality, and scale the business comfortably, at a pace that’s right for you.
“Figure out what the profitable approach would be for you. Not what a “guru” tells you will work.” – Rachel
How do you figure out the profitable approach for you? For our client, the strategy was very simple:
- A specific budget for new customer acquisition.
- A specific budget for our top performing keywords.
- No budget for superfluous advertising; only resources toward new customer acquisition and ranking for the right keywords.
A Word About The Gurus
Many of the advertising strategies out there are not appropriate for your particular business or the direction you want to take it. That’s why it’s crucial to know and understand your advertising strategy, and why it works. Gurus, no matter what space they work in, tend to offer fads… the latest way to “hack” this or that. And for some, the hack does work. That’s why the guru has followers. They’re not just blowing smoke. But it’s important to discern whether their solution will work for you. Your business is what’s important here, no matter how convincing the guru seems.
Low (Or No) Budget Amazon Marketing Ideas
Being limited on cash doesn’t have to limit your creativity where marketing is concerned. In fact, frugality is baked right into Amazon’s Leadership Principles: “Accomplish more with less. Constraints breed resourcefulness, self-sufficiency, and invention. There are no extra points for growing headcount, budget size, or fixed expense.”
Where budget constraints and innovation meet, Amazon offers many tools and ways to help you flourish in your frugality. Here is a list of creative ways you can spend time, not money, growing your Amazon business.
Do “Collabs” With Other Small Brands On Amazon
You’re allowed to put anyone’s product on your Storefront, it doesn’t have to be your own brand. So if you sell candles, you could team up with a brand that sells candle holders and have a dedicated page on each Storefront to each other’s products.
Comment On Other Brands Amazon Live Broadcasts
Look for Lives from large brands with a high volume of commenters, and comment when there is something happening that’s relevant to your product or brand, for example “That’s fantastic! I use it with my [insert product name].”
Go Live Yourself
When you go live, Amazon sends a notification to your brand’s followers’ mobile devices – some will join immediately and you can interact with them live, which is great for engagement and building loyalty.
Use Prime Exclusive Discounts (PEDs) On Deal Days
When you offer PEDs on Deal Days, you get placed on a special discount page, so you get eyes on your brand in a new area without having to pay for it… you just take a little less profit on any sales you make.
Run A BOGO Sale On Your Whole Line
If you’re a new brand in need of publicity and exposure, consider something like a “buy one, get 5% off anything else” sale. Shoppers peruse your whole catalog, and hopefully they put more in their carts.
Leverage Amazon’s Creator Connections Program To Get More Exposure & Publicity
With Creator Connections you can work with social media influencers to spread the word about your product. Social proof is a solid way to build trust in your brand.
Post Posts
Think of Posts like Instagram for Amazon. You can promote your brand and catalog through interesting lifestyle images, creative and descriptive captions, and links to product pages.
Your brand’s Posts show up in various places on the Amazon app (and desktop view), including your product’s listing and your brand’s feed, as well as related product and category feeds.
Use Brand Tailored Promotions
Reward loyal followers, repeat customers, even zero in on cart abandoners with promotions designed to inspire them to take action.
Request Reviews With FeedbackFive
As you probably already know, it takes a long time for a product to get a solid lineup of great reviews. The conundrum is that reviews are what help shoppers make a decision about whether to buy. The good news is that you can expedite the reviews-getting process by simply asking.
Use FeedbackFive to automatically request reviews using Amazon’s system, while staying compliant with their policies.
Request Reviews With A Request
The packaging that arrives in the customer’s home is a great place to ask for a review. A small card thanking them for their purchase and letting them know how important their opinion is, can really help positively shape their view of your brand and boost those reviews at the same time.
Answer All The Questions (And Then Some)
The Q&A section is a prime place to build rapport with your audience. Be sure to answer every question you can, and while it’s not kosher to get friends and family to leave reviews on your products, it is OK to have them ask questions… so if there are any questions or tips that you can offer that don’t already appear in the Q&As, get someone you know to seed it with the right question and then you can swoop in with an answer that shoppers will appreciate.
Go Where No One Goes
Everyone is vying for rank on this particular keyword or that one, meanwhile there’s a wide expanse of cheap advertising options that could work great for you. Look for low cost per click ads in less competitive areas to spread brand awareness and gain new customers – video ads are still less used than others, and an engaging ad can have very high click through rates for less than $1 a click.
SEO Your Store
Your Amazon Storefront is essentially a mini website, and Google can index it. Use the text fields in the Storefront to create blog content and use the metadata section on the left to get Google traffic and ranking.
As you can see in the list above, there are scores of cheap or free ways to be “out and about” in the Amazon community, ready to engage with your ideal audience. As a growing brand it makes sense to dedicate substantial effort to following and participating in the current trends of your target audience, not just on Amazon, but through local and national events, platforms like TikTok and Facebook, or communities like Reddit.
Ongoing purposeful engagement is essential to developing brand strategies that are not just culturally relevant but that also resonate with your target audience. For your brand to truly make a connection with a loyal and dedicated following, you must actively and authentically participate in the conversation.
When you do this, you’ll begin to easily identify where the people who emotionally align with your offerings are hanging out. By engaging with these communities and analyzing their behaviors, you can craft messages that not only evoke strong emotions but also foster a loyal, dedicated following. And all it costs is time.
Some Paid Ads Are A Waste Of Money
Do paid ads really drive success? If not, then what does?
There are many ways to strategize an ad campaign, so it makes sense that there are scores of ad options out there too.
There are types, such as search engine advertising, social media, and mobile advertising. Then there are variations to consider like CPC (cost per click), CPM (cost per thousand impressions), and CPA (cost per action). But you don’t need all of these things to really move the needle in your favor. In fact, as in the case of our client, you probably just need a couple of targeted moves.
A word of caution as you build your campaign: Be on the lookout for redundancy. Do not spend money on two different ads that drive the same action. This is a surprisingly easy mistake to make.
You’ll recall this was our strategy for the client. It was simple and it worked very well:
- Specific budget to new customer acquisition.
- Specific budget for top performing keywords.
- No budget for superfluous advertising.
Relevancy is everything
Paid ads aren’t necessarily a strategy, they are a tool. Some ads waste money because the message doesn’t reach the right audience. If you haven’t laid the groundwork, as above, in the places online where your audience already hangs out, you should start there.
Think of paid ads as a way to amplify your existing message through relevant channels. Paid ads should only become part of your marketing strategy once your messaging is totally dialed in and your brand’s unique selling proposition is already out there getting attention.
As you move into paid advertising here are a few tips:
- Set a budget for testing before launching a full campaign.
- A/B test different versions of your ad to see which works best.
- Use simple, clear messaging inspired by the online engagement you’ve done with your audience.
- Track ad performance closely and adjust quickly.
- Listen to feedback from your audience to refine your ads accordingly.
- Turn off awareness ads, video ads, and brand defense ads. Awareness and video can be highly effective, but they can also cost a lot if you go the wrong direction. And brand defense ads don’t usually actually make you any more money, but they do tend to make your ROAS (return on ad spend) look great. So be wary of ad managers who move in this direction.
Remember, the effectiveness of different mediums is not the same for every product or service. What is weak for one product might be the perfect solution for another. What does your online research tell you about where and how to best reach your audience?
ROAS vs. Profitable Acquisition Cost
Why ROAS is the wrong metric to focus on
Unfortunately, it’s really easy to derail your brand’s growth. It’s crucial to stick to your well-thought-out strategy. Do not hire an ads manager who is more focused on ROAS than on your strategy. If you do, you may see your sales go like this:
The red line represents last year, the blue line is this year, when the new ads manager started.
What is ROAS, exactly?
ROAS is a marketing metric that shows the revenue earned for every dollar spent on advertising. But it doesn’t look at organic conversions at all, which is a particular area that a growing company should focus on. Not to mention, ROAS is a report of conversions that would probably have happened regardless of the money spent. It’s an ad manager’s dream.
“ROAS is basically a report of low-hanging fruit. What you want instead is a profitable acquisition cost.” – Rachel
Since we have been working together for a while now, at this point what we do for the client is simply manage the ads strategy that we carefully built out when we were ramping up. But a new ads account manager came in, ignored that strategy, and tanked our numbers right away.
One key aspect of the strategy was maintaining our keyword ranking, a strategy that had long been effective for us to keep reeling in that organic traffic. But if you focus your ads budget in the wrong places, all real progress grinds to a halt, even while certain reports may seem to look good. It’s standard practice in the advertising industry to look at a strong ROAS as a sign that a strategy is effective. This makes it easy for an ads manager to show you strong numbers, even when actual revenue and profits are down.
Once we realized the damage he was doing, we let him go, but the damage had already been done and will take a few months to recover from.
This is why it’s crucial to know the how and why of your ads strategy. If you don’t understand what you’re doing and why it’s working, you won’t be able to pinpoint the problem if something like this happens. An ads manager would point to their great ROAS and tell you the problem is not them, when it is in fact them, because they’re putting money in the wrong places.
“ROAS is a measure of efficiency. The most efficient ads are the ones that likely would have landed the sale to begin with. Obviously you’ll get the best return on things that people already want from you!” – Rachel
Acquisition Cost > ROAS
Bottom line, ROAS is irrelevant to being successful on Amazon. Where you’ll definitely want to focus, however, is on a profitable acquisition cost. Getting there is a bit more complicated than realizing a strong ROAS, but focusing on your acquisition costs, not your ROAS, is how you’ll achieve success.
Strategic Focus vs. Spreading Awareness
Before the new ads manager came in, our strategy was a solid focus on keywords, new customer acquisition, and repeat subscriptions. The ads manager employed a largely awareness-based strategy, which is the wrong area to focus on for a profit focused business with narrow margins. It takes about six months to start driving income through this method, and it’s expensive too.
For our client, whose salary depends on continued strong sales, the new ads manager cost him an entire month’s salary. When we approached him inquiring as to what happened, he said simply that “you have to wait for the system to work.” He just did not get it.
It’s Crucial That You “Get it”
Gurus don’t have all the answers
We let that ads manager go, and requested a new one, but it was a frustrating situation from start to finish. He didn’t follow the strategy, he cost the client a lot of money, and we have to start all over again.
The moral of the story is that you can really mess up your ads strategy if you don’t know exactly how or why it’s working. And if you don’t know how or why it’s working, you have to trust someone to understand it for you. But not everyone is trustworthy… not because they are intentionally out to harm you and tank your sales, but because of where they get their advice, knowledge and strategic thinking. If they’re following gurus in the space, and not translating what they learn to strategy that’s appropriate to their real-life clients, they may do something that’s ineffective at best, and at worst, kills your sales.
Your ad person is not smarter than Amazon’s algorithms
When growing your business on a tight budget, be wary of anyone who says they can manipulate, or worse, “trick” the algorithm. They can’t. This is, again, courtesy of the gurus in the space who dispense advice that only applies in certain situations, and ad people who blindly follow what they say with no regard for strategy.
One “strategy” that we see, is attempting to trick the algorithm by repeating keyword phrases in the title. So for example, instead of having “stainless steel cookware” in the title, the strategy is to change the title to repeat “stainless steel” in four different places, thereby wasting valuable space and making it totally unreadable too. The thinking is that it tricks the system into believing the ASIN is more relevant than others because it has more of the target keywords.
This can work quite well for a short period of time with a brand new ASIN launch, but it’s detrimental anywhere else. Why? Because if you change things to be “more relevant” on an ASIN that already exists, the system automatically re-evaluates the relevancy score. This sends it plummeting, because the ASIN loses rank on all keywords. The system needs time to “learn” about all these new words that have been added, and recalibrate the score, which takes up to six weeks.
Simply put, the algorithm remembers what the ASIN did before. When you suddenly change what it’s doing, the system has to integrate all the new information with the old before it “knows” the ASIN again.
Bottom line, be sure that whomever you work with on your ads, that they understand your strategy and you understand what they’re doing and why. And if they tell you they follow the advice of the many gurus in the space, pay attention. Remember, it’s not that gurus give bad advice all the time, it’s that their advice is not relevant to all situations… and shouldn’t be taken as gospel.
Thrive with Focused, Profit-Driven Strategies
Growing a business on a budget requires a strategic approach that prioritizes profitability and resourcefulness over following generic advice from so-called “gurus.”
The key is to focus on what truly matters: a deep understanding of your unique market, careful budget allocation, and a commitment to strategies that align with your specific goals.
Paid ads can be a valuable tool, but only when used with precision and purpose.
Remember, success in business is not just about expanding quickly or following trends—it’s about building a sustainable model that allows you to grow at your own pace, with a strategy that’s both profitable and adaptable to your needs.
How can we help your brand achieve success? Contact us.
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At Troveres we help brands articulate their story in unique and beautiful ways that utilize strategic, data-informed steps that drive engagement and increase conversion rates. Our content strategy was developed by former Amazonian of eight years Rachel Johnson Greer, who was part of Amazon’s private label team for more than two years, developing and maintaining brands with hundreds of products across dozens of product lines. Click here to download Rachel’s guide to Content Marketing That Converts for free.
