I hear it all the time from my corporate clients, “We spent $10,000 in online advertising and we did not get a positive return on investment, we don’t know where we went wrong!” Or from individuals who are just starting out in ecommerce, “I spent $2,000 setting up my store and advertising my products, and I have hardly any sales to show for it.”
The fact that they think merely spending a lot of amount of money should yield commensurate results shows that their thinking is all wrong. Selling your product(s) takes money, yes; but, how much money you spend is not the measure of how well you will do.
So what is happening? How are all these people throwing money down the drain?
WEBSITE DESIGN AND DEVELOPMENT
First of all, don’t throw lots of money into website design and development.
An online store platform such as Shopify (or BigCommerce, Squarespace, etc.) is enough to get started. This will cost you about $30 per month (more or less, depending on the service you use).
If you are an individual with a small budget, just use one of their free themes. The free themes usually look good enough for most purposes.
I don’t recommend purchasing a theme, because if something doesn’t work, you may have a hard time trying to get the developer to correct it, and this is not what you want to be focusing on.
If you are an already-profitable business, you probably should care a bit more about the appearance of your store to make sure that it is consistent with your brand. But you still shouldn’t be spending more than $2,000 on customizing a theme, it just isn’t necessary.
This is where the most money is usually wasted, because people think that the ad effectiveness is merely a result of how much money is spent. But this is completely wrong.
Set a small budget for testing each ad strategy before you throw lots of money into it. Oftentimes, a budget of $5 or $10 per day is enough to test a Facebook ad. If after 3 to 5 days, you aren’t getting a positive ROI, then you need to make a change. A similar strategy can be employed on other advertising networks such as Google Adwords, Twitter, etc.
Poor targeting is usually responsive for failed ad campaigns. Targeting to should be as specific as possible. The aim is to get in front of persons who are the most likely to purchase your product. That is not the same as the persons who are interested in your product or niche; You are trying to reach those most likely to buy.
How you decide who is mostly likely to buy may vary based on the niche and type of product. And at the end of the day, it will still take some experimentation. But if you keep this in mind, you will improve your ad targeting.
Only after you have found an ad campaign that works should you scale it up by increasing your budget. Increasing your budget on a failing ad campaign will not make it more successful.
NOT TESTING THE PRODUCT
Not testing the product/service is also one of the major ways that people throw money down the drain.
Test your product before you start investing lots of money in it; whether that investment is in inventory, marketing, or any aspect that requires you spend money on selling the product.
You initial ad campaign should be designed around finding out if people want your product in the first place.
Simply talking to persons who are interested in similar products or in your niche will give you valuable insight into how your product will be perceived by the market, and it will also tell you which products that they market demands.
In fact, this should be your very first step. It’s easier to let persons tell you what products they want than to pick a product, invest in it (even if it’s just a time investment), and then ask people if they like the product.
As soon as you suspect that a product may be promising, talk to your potential buyers about.
You can find them in Facebook groups, Reddit, and forums.
If the market tells you, by not purchasing your product, that it isn’t interested, then cease sales of that product and focus on something else. It’s that simple. Don’t get hung up on any particular product, even if you invented it. If they market doesn’t want it, you will be wasting your time and money trying to sell it.
I hope you can appreciate, by now, that simply throwing money into your venture will not make it successful. More often than not, persons only end up wasting money; and worst of all, they end up feeling depressed and demoralized.
If you want to tried-and-proven execution strategies to make sure that your new online venture is launched and run effectively, then check out the programs we offer here at Josh Black Agency. We love to help persons succeed online, and I’m sure we can help you too.