Optimizing Amazon Business Performance Through Strategic Investment and Remarketing Campaigns - A Case Study

Strategic product investment: a case study

‍Background

A long-standing customer of ours, an Amazon seller looking to scale their business, reached out to discuss their current strategies and explore possibilities for growth. The conversation focused on making informed decisions regarding product and category investments and fully utilizing the power of remarketing campaigns.

Situation

The seller's account-level LTV (customer lifetime value) showed a notably high break-even ACoS of 95%. Their primary focus was in one particular category, which contributed to 85% of total sales. This hero product category had a breakeven ACoS of 124% over a 12-month period.

However, a more mature product in their catalog presented a different scenario. With a significantly lower growth rate in breakeven ACoS compared to the hero product, the mature product had an ACoS of 80-90% over the same 12-month period. This wasn't ideal for a seller looking to scale.

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Read more on Breakeven ACoS 🤓

Breakeven ACoS - What you need to know

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Solution

We identified the need for budget reallocation and resetting targets based on individual categories or ASINs. The customer had dedicated 95% of their ad budget to the hero product, leading to inefficient spending on unprofitable advertising initiatives. We recommended reallocating some of that budget towards remarketing campaigns via Sponsored Display or, if the budget was available, the DSP (Demand Side Platform) to encourage repeat purchases and grow their LTV.

Additionally, we suggested focusing on remarketing to increase customer buying frequency, ultimately boosting their breakeven ACoS.

Although it was unlikely that the breakeven ACoS for the mature product would ever match the hero product, reallocating the budget to remarketing campaigns still had a significant impact on their overall business performance.

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Product-Level Insights: The Key to Efficient and Profitable Marketing Strategies

Understanding the nuances of each product in your catalog is crucial in defining an efficient and profitable marketing strategy. Product-level insights allow you to identify the unique selling points, target customers, and revenue-generating potential of each item. 

By gathering and analyzing these insights, you can tailor your marketing approach to cater to the specific needs of each product, maximizing returns on your advertising investments. In this case study, the distinction between the hero product and the mature product made it clear that a one-size-fits-all strategy would not suffice. Recognizing their individual characteristics led to the implementation of a more targeted, data-driven Amazon seller marketing strategy that better utilized the budget and ultimately improved overall business performance. Emphasizing the importance of product-level insights can make all the difference in achieving a successful and profitable Amazon business.

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