Metrics you should care about and why!

Let’s try to answer the question that is on everyone’s mind this week. How successful were my promotions last week? Typically, after an event like Prime Day or Turkey 5 (11), I would post links to share data from many of our partners, showing you how they are measuring success—this time, I want to take a different approach. I want to outline some of the metrics that you, as a brand or as a service provider, should be considering.

Sales

It’s always great to start by looking at your overall sales. Hopefully, you set a goal, and you can measure the success of your sales based on that goal. You should also consider a few other factors.

First, how did you do compared to the same period last year? This is looking at your same product/store sales and comparing it to the same days, not dates. This is critical because the previous year should be a growth baseline, and you want to see if you are growing faster or slower.

Second, you want to look at your category growth. If your category is growing at 15% and you only grew by 12%, then while your growth was good, it wasn’t at the benchmark for your category.

Finally, you need to look at profit and inflation. Were you able to grow at the profit levels that you targeted? Did you consider your sales growth when adjusted for inflation? Raising your prices by 10% and growing sales by 10% is a flat year-over-year increase in your bottom line.

Measure Ad Effectiveness

Many are quick to point out the increase or decrease of the cost per click of an ad, but let’s agree that this is a vanity metric. Maybe tracking CPC prices has some value, but I think it’s very little. It’s more important to look at your overall advertising success. This could be looking at your ACOS, TACOS, or ROAS. These figures take into account your conversion rate.

I bet many of you would be happy to pay a higher CPC if your conversation rate increased and your total cost of customer acquisition decreased.

With all this being said, ACOS, TACOS, and ROAS are only one number, and if you over-emphasize them, you may be missing the bigger picture. As a marketer, you should have a target cost per customer acquisition, which calculates how much you are willing to pay for a new customer. This number considers that a new customer can repeat, make additional purchases, and have a higher lifetime value. When you start to expand your thinking and consider this, the way you measure success allows you to invest more and build a brand. Amazon Ads has new metrics like new-to-brand, enabling you to see how your ads drive new buyers to your product detail pages and stores.

Deal

One of the great debates is deal or no deal. The answer is “yes”. Studies have shown that products with deals and those without will increase sales during a tent pole event. Typicality, those without deals may see a 1.5-2X increase, and those with deals can see a 3X or higher increase. An excellent promotional strategy uses deals to attract new buyers but doesn’t require discounting your entire catalog. When evaluating the success of your promotion consider what the increase looks like for the inventory that had deals and those that didn’t. See how deals performed at different discount levels and try to determine what an optimal discount price is for products in your catalog.

Hopefully, you were also watching your competitors. Were your prices higher or lower? All of these factors affect how your promotional plan performs. When evaluating your deal, it may be worth inspecting from an overall effectiveness standpoint and how it drove traffic. Remember that deals can underperform for multiple reasons, and the % off isn’t the only factor you should consider.

Phased Approach

Any tent pole event needs a lead-up, event, and lead-out approach to your campaigns. Now is a great time to review the lead-up and event campaigns to see if they meet your expectations. That said, we are still in the tent pole event, and you have time to adjust your campaigns. Now is a great time to look at your remarketing strategy to re-engage with shoppers who visited your page or store and didn’t purchase.

Want to see how some others are looking at the holiday weekend? Here are a few stories I have been following:

Smart sellers know the game is far from over - Joe Shelerud

Black Friday Recap - Peter V.S. Bond

Sales day ever? - Melissa Burdick

Week Recap - Laura Meyer

Sales Records - Joe Stefani

Growth, not Inflation - Thaddaeus Hay

Growth in Key Categories - Matt Anderson

Sales up, Basket size up - Andrew Banks

Black Friday Reflections - Nella Argenziano - CMgr MCMI - ACIM

Results from the Lead-in - Perpetua

The early read on BF - Fahim Naim

AMC for BF/CM - Jack Lindberg

T11 Takeaways - Jake Lukens