In today’s climate, it’s more important than ever to ensure that capital for your business is being managed responsibly.
While it’s important to help with sustainability, cost control is only one side of the equation. After all, you can’t save your way to boosting revenue.
Our CEO, Eric Jacobsen, recently commented in a conference call on the state of the retail sector:
At the end of this road there are few options. Operators tighten up on all aspects of the business, but this often entails cutting the staff and activities that actually boost revenue. Lose those and you may be saving money but you’re not creating the growth you need to reverse the process.
As the adage goes: “you need to spend money to make money”. That is true, but right now, all decisions also need to be approached from a direct ROI perspective. Will this make me more money quickly? What can operators do to boost their revenue and competitive stance without increasing their headcount or over-burdening present staff? One answer may be programmatic marketing.
Programmatic marketing targets on-line consumers based on geolocation and their browsing habits (what platforms they use) to create qualified cohorts of customer groups, funnel them to your online store, and convert them into sales.
Programmatic marketing may be the easiest lever you can pull to grow your sales. But, before you take the plunge and engage an agency to drive traffic to your online menu, we need to consider the key questions:
1. Is this going to generate meaningful and direct ROI?
2. If yes, how long does it take to see results?
3. Can I afford the spend from a cash flow perspective?
In this short case study, we will look at a Vancouver retailer that spent $10,000 CAD on a campaign to target local traffic and drive it to their online menu. While no two retailers are identical, this provides a valuable example to help answer the question of whether it is worthwhile to spend money at this vulnerable time.
Total Spend: $10000
Media Spend: $7000
Campaign Duration: 30 days
% increase in online orders: 371%
Increase in Orders over previous 30 days: 460
Directly attributable orders from Ad Campaign: 98
Average order amount during the campaign: $122.94
Increase in total sales during the campaign: $54,186
Verified Sales from campaign: $12,047
The customer engaged the agency, Alibi, and authorized a total spend of $10,000 over the 30 day period. This spend covered both the ad buy and agency spend. From there, Alibi used cannabis shopper data and cross-device location-specific data to develop their targeting strategy.
The targeting strategy was then put into action with a media strategy where Alibi bought targeted placement that they knew local cannabis consumers near the retailer would see. They then used interaction data to refine the targeting based on user data to focus on the customers that were most likely to follow through and complete online purchases.
Importantly, for maxed-out retail operators, the agency did all of the strategy, execution and creative, as well as the e-commerce provider integration so they could track and present results.
Analytics of the campaign, which were made available through a live dashboard, demonstrated that the spend had significant effects on the retailers’ online business: By focusing on a hyper-localized customer segment, they were able to both acquire new customers and increase average order size across new and existing customers. Online orders went up (way up) and the average order size increased as well.
Along with driving additional traffic and revenue during the 30-day campaign, the retailer also benefited from continued re-orders from new customers and a better understanding of their site visitors’ geography, demographics and non-cannabis behaviors, helping them refine their understanding of their customers.
Before you jump into launching a campaign, it’s important to carefully consider whether this kind of jump in sales has the ROI you need to see to justify the marketing spend and to determine if you have the available cash to put forward to achieve it.
If you do have the resources now and are seeing steady sales, it may be a great time to get an edge in your local market. If you’re seeing declining sales (and can muster the cash) do consider whether you can take action on a spend-money-to-make-money strategy now, as it may not be feasible down the road.
If you’d like to explore this option further, Cannametrics has reached out to Alibi to secure a special offer for present Cannametrics customers: For a limited time, Alibi will waive onboarding fees and costs for digital asset creation!