July 29, 2025 • 48 mins
The moment your Amazon conversion rate drops by half is when true brand resilience is tested. In this tactical deep-dive, we examine a real-world crisis where one premium brand watched their conversion rate collapse virtually overnight, triggering a cascade of mounting problems: skyrocketing ad costs, plummeting impression share, and rapidly declining sales across their entire catalog.
For brands heavily dependent on advertising—particularly those with a 60/40 or greater split favoring ad-driven sales over organic—these conversion crises hit especially hard. The downward spiral accelerates as reduced conversion forces bid reductions, leading to fewer impressions, fewer clicks, and ultimately, a severe drop in revenue and profitability.
We walk through the comprehensive troubleshooting process: examining your metrics funnel from impressions through click-through rate to conversion; determining exactly when the drop occurred; analyzing what changes (if any) preceded it; and the challenging reality that sometimes there is no clear "smoking gun" to blame. Amazon's platform complexity means the true cause could be algorithmic changes, competitor actions, or other factors completely invisible to sellers.
Most valuably, we reveal the surprisingly powerful price lever that many premium brands underestimate. Through careful margin analysis, our guest discovered they could reduce prices by 20% while maintaining healthy 30% contribution margins—because when properly calculated, the compounding benefits of improved click-through, conversion, and advertising efficiency often outweigh the perceived margin sacrifice. Learn how referral fee reductions, TACOS improvements, and sales velocity increases can transform what seems like a crisis into an opportunity for brand strengthening.
Whether you're currently facing a conversion crisis or preparing for the inevitable day when one strikes your business, this episode provides both immediate tactical responses and strategic frameworks to not just survive the challenge but emerge stronger on the other side. Have you experienced a sudden conversion drop? We'd love to hear your story and solutions.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome everybody to another Tactics Tuesday for the
Brand Fortress HQ podcast.
Today we're talking aboutsomething that is very timely,
that we see happen from time totime for brands, where you just
have one of those situationswhere you see a big drop in your
conversion rate, and what wewant to cover here is what do
you do in those scenarios andwhat does that look like.
(00:21):
So with that, mike, if youwouldn't mind, I'm going to hand
it over to you, and if you givea little bit of background on,
maybe you know the issue thatyou're working with right now
and so on and so forth.
Speaker 2 (00:41):
So that's been a little bit of a cascading event
that we've been trying toaddress.
But in that we ended up end ofMay, around May 26th-ish
somewhere in there, ourconversion rate dropped off a
cliff and it seemed to bebrand-wide, quite frankly, and
(01:01):
we obviously it was a huge issuebecause what ends up happening
then?
Anybody who's listening knowsthis.
But you know, conversion ratehas a snowball effect, right,
same as click-through rate has asnowball effect.
That you know.
There's this cascading, youknow set of issues.
So our conversion rate droppedby like half, like half.
(01:27):
And when that happens, you know, first of all your ad costs
begin to skyrocket becauseobviously your ad costs are
based very much around what isyour conversion rate?
You know, if I send 10 clicksto my, to my page, and my
conversion rate was 20%, I'dnormally get two sales and now
it's one, you know it's 10%, Ionly get one sale.
Obviously the expense versusthe revenue and profit generated
on the backside is becomes verylopsided.
(01:48):
But then, worse than that, thatsnowballs more because you know
if the cost goes up too muchthen it becomes not profitable
and so then you have to pullback on your bids because you
can't spend as much, you know,per click, and so then you're
getting less impressions, and sonow you're getting fewer sales
overall, and so revenue,everything just cascades in a
(02:09):
downward spiral, and so that'skind of what we were seeing In
fact, that's actually how wenoticed it initially was that we
started seeing our ad costs goup and our impression share
started going down, and we foundout from our agency that they
were pulling back on bids andads because the cost was
climbing so fast, and it turnedout it was because of this
conversion rate problem, and sothen it was OK.
(02:31):
You know, what do we do?
You know like we need to findthe problem, we need to figure
out where we're leaking so thatwe can fix it.
And another thing that I thinkis critical to point out here is
for us right now, this is amassively big issue.
It would be a big issue for anybrand, but for us it becomes
even more significant because atthe moment, because we're so
(02:54):
high priced in the category andwe've had some trouble regaining
some rankings that we used tohave because of a lot of low
price competitors, we are verylopsided in terms of our organic
versus ad share for revenue.
So we're probably 60-40 ads toorganic, maybe even 65-35.
This is maybe even a littlecloser.
(03:15):
And so when you're in thatsituation and conversion rate
drops because you have to startpulling back on ads, that is the
bulk of our sales and so that'sa really significant problem,
whereas if you're organic based,you know, like if we were 60,
40 organic ads or 70, 30 organicads yes, conversion rates a
(03:36):
problem.
Revenue is still going to godown, but you don't necessarily
have to pull way back on ads andit's not going to drop as
precipitously as it is for us.
You still need to find theproblem, you still need to fix
it, but it's just it compoundsthat much faster in a situation
like what we're in, and so it isone reason why, as a brand, I
do recommend that you really payattention to that split in
(03:59):
terms of your ad versus organicsales.
And if you start pushing past50-50, you probably have a
problem, and that's kind ofwhere we are.
But you really want to be 60-40organic to ads, maybe even
70-30 if you pull it off.
Speaker 1 (04:15):
Yeah, a couple of things that I think about, just
to take a step back.
That I think is important isthe first thing is that thinking
about this from inputs andoutputs is and this is typically
what happens is you startseeing your sales drop.
And then I think you guys tooka great first step in looking at
what are.
When I think about this, whatare the about?
So the first one is checkingyour impressions just to say,
(04:37):
hey, you know, are we justgetting less sales?
Because you know we're gettingyou know less at bats, where we
used to get you know 100,000impressions a week, now we're
only getting you know 50,000.
And then looking at what yourclick through rate is.
(04:58):
And then, finally, looking atwhat your conversion rate is,
because those three metrics arekind of the main three inputs
that I think about as far aswhat's going to lead to the
output that we all want, whichis more sales.
And then, when you talk aboutconversion rate, the other thing
that I would just encouragepeople that, because I feel like
this happens to every brandthat's been on Amazon long
(05:20):
enough that they go through somesort of issue like this, where
things kind of feel like theyfell off a cliff.
They they fell off a cliff iswhen we're talking about
conversion rate.
There's a total conversion rateand then there's also an ad
conversion rate, and I thinkit's important to split those
out because we've definitelyseen it with some of the clients
that we work with on theiraccounts where, you know, their
organic sales pretty muchdropped to nothing for a week,
(05:42):
but their ad sales were stillsuper strong.
And so understanding, you know,is it my ads just didn't do the
job that they were supposed to,or is there something on the
organic side?
Speaker 3 (05:56):
that's not performing like it should be.
Yeah, I think what's importantwith everything that both of you
have talked about is and thisis a conversation that we've had
a lot of times and it's aboutknowing your numbers and, I
think, being able to view all ofthat data in funnel form in the
way of a funnel.
So start with impressions andwork your way all the way down
to conversions, and if you lookat every one of those stats
(06:18):
along the way it's nine timesout of 10, 9.5 times out of 10,
the issue will will show itselfas you start walking through
that.
It's either, like John said,it's either an impressions, it's
either traffic or conversions,and there's traffic, click
through or conversions, andthose are really the main three
things that it is.
And if you look at all of thatdata, I have a spreadsheet.
(06:39):
It's not very sexy, it's just aspreadsheet with a whole bunch
of numbers on it, but it startsat impressions and then it goes
to page views and then it goesall the way to conversions.
And I look at every single stepalong the way and a lot.
Most of the time you're able todiagnose what the issue is, and
I mean, it's not always whenwe're talking about conversion,
the first thing that comes topeople's minds is images and
(07:00):
your title and pricing and thatkind of stuff, which obviously
all that stuff is very important, but it's not always.
I think a big part of that foras we start digging into the
issue that Michael is talkingabout is that you know it could
even we.
We just changed our, we justswitched over agencies, as we
talked about a couple of weeksago.
So you know, there is alearning.
No matter how good the agencyis, there's a learning phase and
(07:21):
there's some restructuring ofcampaigns that they do.
So there's going to be somesort of an adjustment up or down
on click through and conversionrate, just on how they're
targeting in terms of PPC.
So it's not always your imageswhen you're talking about
conversion.
It's not always your title.
Price is obviously a big lever.
But I think being able to havesome sort of whether it's a
software or a spreadsheet thatyou use looking at the data in
(07:43):
full funnel form, it makes it alot easier to figure out where
the issue is and then how toaddress it.
Speaker 2 (07:50):
Yeah, I think so.
One of the things that comesinto play here is then okay, so
what's the game plan, right?
So focusing on conversion rate,let's say.
Then the first step is toevaluate if conversion rate is
what dropped, then that isn'tnecessarily, you know, a result
(08:10):
of a change in impressions orclick-through rate, although
there may be a connection.
You are going to want to lookat click-through and impressions
, because if the only thing thatreally changed, like at that
point, like, so first of all yougot to go back to the data and
figure out when did the changehappen?
Because once you know when thechange occurred, then the
(08:30):
question becomes okay, well,what other metrics got worse
when that conversion rate wentdown, and how quickly, like were
they?
Was it simultaneous, you know?
Did one precede conversion rate?
Did something else, you know,come after conversion rate?
What was the sequence of thecascade?
Because maybe conversion rateisn't the starting point, maybe
conversion rate happenssomewhere in the middle of this
(08:52):
cascading series of events andyou and you just kind of work
your way back to find the onethat was the beginning of that
cascade.
But let's say conversion ratewas the initial part of the
cascade.
Then the question becomes okay.
So you know my impression sharedidn't was hadn't immediately
come down or wasn't coming downbefore that.
So that doesn't seem to berelated.
(09:14):
My click through is also fine.
It hasn't changed at all.
But one of the things that thattells you more than likely it's
not an absolute.
But for conversion rate, yourimages matter, your listing copy
matters, your A-plus contentdoes matter, your pricing
obviously matters.
But then the question is okay,well, some of those things
affect other things, forinstance click-through rate.
(09:36):
Your click-through rate is verymuch tied to your main image
and your title.
Conversion rate also is fairlyrelevant from a main image and
title standpoint, because ifsomebody clicks on your main
image and they think they'regetting something that it turns
out your listing seems toindicate they're not getting,
then they're not, they're notgoing to buy.
(09:56):
So conversion rate goes down.
So the question is did you dosomething on your listing that
caused a disconnect between themain image that they clicked on
and the image which is tellingthem what they're going to get
when they actually spend themoney?
Right, is there a disconnectthere, or did you change
something in the main image?
So, in other words, let's putit this way If you knew what
your numbers were coming in andyou see, oh, my conversion rate
(10:19):
dropped.
But then you look back again.
This goes back to what I wassaying a second ago.
You go back and you look at OK,click through precedes that.
What happened to my clickthrough rate?
Well, my click through ratejumped previous to my conversion
rate coming down.
Right, and maybe they werefairly synonymous, but the point
was I've got click through rategoing up and conversion rate
going down.
A logical extension of that isI changed my main image and it
(10:43):
caused a whole bunch of peopleto click on my listing who
aren't a good fit for what mylisting says.
The product is right.
Those kinds of mental gymnasticsare the things that you need to
run through to figure out wherewas the problem.
And realistically, I mean justto get to the heart of this Matt
and I have gone through all ofthe mental gymnastics that we
(11:05):
can come up with, as well as theagency that we work with.
We've not found the actualcover.
So I mean, I'm speaking of allthese things and they're all
important things that you needto pay attention to and you need
to walk through that process,and there's some other things we
should talk about too.
But it's also important torecognize you might not find the
problem like the actual problem.
You may not be able to pinpointit.
It might be something Amazondid that you're never going to
(11:27):
see, you're never going to know,and who knows, maybe next week
they change it back and all of asudden things are rosy again.
Could be something a competitordid that you can't see and you
don't find.
So, at the end of the day,recognize you need to look for
it.
You definitely need to dig intothe data and see if you can
find it.
But if it becomes fairly clearthat you're not going to find it
quickly, then you need to findanother solution Because,
(11:49):
realistically, although theproblem is conversion rate, the
real problem is that means lessmoney coming into your pocket,
right, cash flow is going todecline, profits decline, you
know, like that's the end pointthat becomes the actual issue,
right?
So you need to find anothersolution that's going to address
that end pain point.
And that's where we are in thisprocess.
(12:09):
We didn't find the actualproblem that caused that
precipitous decline, so we'rehaving to find a different
solution.
So at least we can solve theproblem of revenues down,
profits are down, cash flow isdown.
We're screwed if we don'tfigure what the solution is.
Speaker 1 (12:24):
Yeah, I think that's such a good point is that
sometimes you know as much aswe'd love to find you know that
that one thing, that was theproblem, that if we just, you
know, flip that switch again,everything will go back to you
know being hunky dory and rosyagain.
The reality of it is is thatsometimes they're just you know,
sometimes there are thosesimple fixes and sometimes there
(12:45):
just aren't those switches toflip.
So you have to find, like yousaid, mike, another way in order
to win, and sometimes thatmeans putting in significantly
more time to make up for thesales velocity that you lost and
the momentum.
Speaker 3 (13:02):
Well, I mean, sometimes it's not a lever that
you can pull, and I think that'swhat Mike was alluding to.
Is that?
I mean, sometimes it's Amazon,Sometimes you get unindexed from
all of your keywords, Sometimesyou are placed in a separate
subcategory, a differentsubcategory than you were Like.
Sometimes it's something thatAmazon did that, like Mike said,
is not easy to, and that's the.
That's the challenge that werun into as sellers on this
(13:24):
platform is that there's notalways a smoking gun and you can
spend your days chasing smokingguns, which is what Mike and I
have been doing the last coupleof days to be prepared for that
as a seller on the platform, andyou know, I think, that our
skills combined and theknowledge of the platform
(13:50):
combined, it's going to end upleading to a solution.
It's going to end up, you know,we're going to get back to
where we were.
Who knows if we'll ever findthe smoking gun?
But I think you know, knowingyour numbers, understanding how
to find the data and how to lookat the data and how to let the
data tell you the story, butthen also keeping in mind that
there's not always going to be asmoking gun with an easy lever
that you can pull.
(14:10):
I think those are superimportant things to keep in mind
.
Speaker 2 (14:13):
Well, I think too, you know it's reasonable to say
that if you're not tracking thechanges that you make, then it
really makes it difficult to goback and pinpoint what the
change was.
You know, if it's somethingthat you actually did that
caused this, you knowprecipitous decline and
(14:34):
click-through rate or conversionrate or whatever it is you
might be able to go back to thedata and you might be able to
pinpoint oh hey, it was.
You know it's clicked through.
That's the problem, and ithappened on this date, and we're
pretty sure it's related toeither the title or the image.
You know whatever.
But if you have, say, numerouspeople on your team that maybe
(14:54):
do you know listing updates orimage updates, or you know
things of that nature, and youare not adequately tracking who
does what, when and why they didit, then that becomes an
additional problem.
And so and I'll fess up to thefact that we weren't tracking
(15:15):
well enough you know what thingswere happening, who was doing
it, when did it happen and whydid they do it.
And so I literally have createda spreadsheet that we didn't
have before, that its onlypurpose is on a SKU basis or
ASIN basis.
You know it has.
You know you check a box to saywhat did you change?
Main image, one of thesecondary images, which one?
(15:37):
You know title bullets,description, price.
You know all the number ofthings that you could change
related to a product detail page.
It automatically enters thedate and the time of the change
and then we're entering in okay,why did we make this change?
What were we trying to improve?
Were we trying to improveclick-through or conversion or
(15:57):
whatever?
What was it?
If we change the image, whatdid we change about the image?
And then I actually have a linkbecause, because we've started
doing a lot of our design workactually in Canva I have a link
to the actual page within ourCanva document that has all of
the main stack of images for theproduct and it links directly
to a particular page that isthis design element.
(16:19):
So it has what was the previousand what is the new.
And then there's a results taband so now going forward.
It doesn't help us with thisproblem that we just ran into,
but at least going forward.
If we see a precipitous drop onyou know June 15th well, I can
go back to this spreadsheet,look at the dates, find out what
changed on June 15th or 14th orwhatever, and I can see oh well
(16:43):
, we did this, or at least theseare the things that we did.
Would any of those things youknow have affected us in that
way?
If not, well then it probablywasn't something that we did
related to the product detailpage.
So it gives you a lot morevisibility that you don't have,
and Amazon doesn't track thatLike you don't have a history.
you know who did what when onAmazon to know when did those
changes occur.
So I think, if you're nottracking those things, I would
(17:06):
create a spreadsheet and an SOPto make sure that whoever on
your team is making changes likethat, that it's being logged on
that sheet so that you can tiethe data together with the
actions that have happened onyour account.
Speaker 1 (17:17):
Yeah, and depending on what software you're using
for ads management or otherthings.
Some of those softwares do havesome of that capability as well
.
The only ones that I've seen iton are fairly expensive.
So that might be something that, if you're working with an
agency that they have otherwiseas a brand owner, those things
do, you know that software canbe kind of expensive, and so I
(17:38):
think, like you said, Mike,having something sometimes, you
know, having a Google sheet ismuch better than having nothing.
Yeah, the other thing that Iwould say is is that you know
very big on, you know analyzingdata in order to kind of figure
these things out.
That said, I think it'simportant for Amazon
specifically to make sure thatwhen you're looking at the data,
(18:03):
that you're looking at searchquery performance data,
differently from what you'relooking at from, like, your ads
data and that type of stuff,because those things are, you
know, calculated differently,and I'm not, you know, going to
go into all the details on that,because I don't think it's
really necessary.
I think you know people can findplenty of material out there on
how those things are calculated, how they're calculated
differently, but I think it'sjust important to know that
(18:25):
those numbers, how they get tothat total is different.
So just to be aware of that,make sure that if you're looking
at, hey, what was our databefore, what was our impressions
, what was our conversion rate,those types of things If you
were tracking that on your usingsearch query performance data,
that's what you should look at,you know, compare it to.
Or you know, if you're lookingat based on your business
(18:47):
reports and your ad you knowreports that you use, that data
doesn't mean that you can't use.
You know your search queryreports.
You troubleshoot it because youabsolutely should.
Speaker 3 (18:56):
But just make sure that when you're kind of
comparing data, that you'recomparing apples to apples and
oranges to oranges in thosescenarios, yeah, I think another
important stat that you need tobe paying attention to in this
conversation is in somethingthat Mike mentioned in the
beginning.
You know, when your conversionrate drops, there's a cascade of
things that happen bad thingsthat happen, and one of them is
(19:18):
your organic rank, and that'sone of the easier things,
especially with the tools thatare out there on the market now,
to track your organic rank,like that's.
That's one of the first thingsthat I checked when we noticed
our conversion rate was wasorganic rankings.
That was one of the first thingsthat I was concerned about, and
you know, your BSR and yourranking, like those, are other
stats that I think are importantto be paying attention to,
because they're those are whatare the most affected when your
(19:41):
conversion rate drops.
So you know, I think that'salso an important thing to track
, and the amount of of sellersthat I talked to that aren't
tracking organic rank is ispretty astounding Cause I mean
for me, in the way that I thinkabout advertising, is
advertising is a way to increasemy organic rank on the keywords
that matter, and if you thinkabout advertising in that way,
(20:03):
then you will start to draw thatconnection with how advertising
affects your organic rank, butthen also how conversion rate
affects your organic rank, andwhen you see a drop in your
conversion rate, you're almostassuredly going to also see a
drop in your organic rank, whichthen has, you know, amplifying
effects on on the rest of thethings, like advertising, for
example.
Speaker 1 (20:23):
Well, yeah, and I think it's a little bit of a
tangent, but I think you know,personally, I think organic rank
is a little bit of a misnomerin the sense of I think at this
point, it's pretty much it'smore accurate to call it earned
rank.
Really, what you're doing is isthat you're, you know you're
spending money on ads and you're, you know, making sure you're
building up your listings andthose types of things in order
(20:45):
for amazon to give you morevisibility, to prove to them
that they're going to make moremoney off of showing your
product ahead of yourcompetitors.
And I think at this point inthe game, you know, in 2025, you
you really have to earn thatspot, doesn't, you know?
Come to you, you know, for free.
At least, that's what I seewith the vast majority of the
clients that we work with.
(21:06):
Also, I'd say something, and Idon't know if this is, you know,
true in your case, but when wedo see this, one of the things
that I would encourage people tocheck right away is to look at,
you know, if you've beenrunning any sort of promotion
and you're used to, especiallyif you're tracking this, you
know, week over week orsomething like that, and that
promotion ends or you losesomething like strike through
(21:26):
pricing.
It could be that you didn'tchange anything on your listing
or didn't change anything aboutyour ads, but with that change
in kind of perception andpricing and badging, that can
have a pretty significant effecton your conversion rate.
And so you know you might bedriving yourself crazy to figure
out, hey, what did we dodifferently?
And the reality of it is isjust you just lost price through
striking or strike throughpricing on your listing.
Speaker 2 (21:48):
You know, that's a really good point, john.
To be honest, I hadn't actuallylooked at that.
I see that most of our heroSKUs, I believe, still have our
strike through pricing.
So that may not be it, but thatis a valuable piece.
That hadn't really occurred tome Because we know I mean it's
obvious that strikethroughpricing does have an effect on
(22:09):
conversion rate, and so if youlost that, that would definitely
be relevant, I think.
A couple other things to payattention to here, and then I
think I actually kind of want tochange gears just a little bit,
because I think the last halfof this conversation might be
better served down a slightlydifferent road.
We'll see if you guys agree onthat.
But one thing is one of thethings that we did fairly early
on here was I ran a pick foodtest just on our landing page,
(22:33):
on our PDP, because you know,one of the things that you know
you just don't know is if youmade a change, if there wasn't
any change to your productdetail page, and you know for
certain that that's true.
Maybe this isn't a valuablepiece, but I would say it's a
valuable piece regardless,because it's always good to get
(22:53):
feedback.
Pickfu has one of their testingis just straight up, go to this
page and tell me what youthought about it.
You know like, would you buythis product?
If not, why not?
If so, why so?
And so I sent out a PickFu onit and just sent them directly
(23:22):
to you know some of our pages tofind out what you know.
Did anybody say, hey, you know Ihated this, or this didn't make
sense, or this didn't line up,or you know?
Did anybody say, hey, you knowI, I, I hated this, or this
didn't make sense, or thisdidn't line up, or you know it
looked fake, you know, orwhatever?
That didn't happen.
You know like we got theresults back.
Most everybody said, hey, Iwould buy that.
You know which, by the way,slight tangent here I did.
I did determine that when yourun a picture test, you can
actually include an attributionlink.
Speaker 3 (23:42):
You can use an Amazon attribution link it goes
further, it goes further.
Speaker 2 (23:47):
If you use Switchy, which we use to create short
links, you can put yourattribution link into Switchy,
create a short link out of it,feed that into PickFu and you
can pixel them.
So you can pixel people whoactually click the link to go to
your listing.
You can attribute them so thatif they actually buy, you get
back the referral bonus.
So you might even be able toget some sales out of it and
(24:09):
make back your PickFu fees.
So but anyways, we sent thatout.
A whole bunch of people said no, I would buy it.
Very few people said no and thepeople who said no, it wasn't
really any major thing with thelisting that we could really fix
.
So it became fairly clear thatwasn't the problem.
But I would recommend that Ithink it's a great idea Consult
with other sellers.
If you're not a part of somechat groups on WhatsApp or some
(24:30):
pay for groups that maybe youcan be a part of some small
masterminds, things like that,where you're you know you know
shoulder to shoulder with othersellers at and above.
You know some below two, so youcan actually help other people.
But there need to be somesellers in there who are at
least at or above your level ofplay on the platform so that you
(24:51):
can consult with them and seeyou know what's up.
Consult with Chad, gpt or someother AI quad or something and
ask it questions, see if it canfind the problem, put your data
in there and have it analyze thedata.
Then the question becomes howadept are you at figuring out
(25:22):
other ways to make an end runaround whatever this problem is,
so you can get your revenue andprofits back up again?
What are the levers that youcan pull and how can you pull
them?
And so I think it would bereally useful to kind of focus
on some of those strategies andmaybe what we're doing right now
to get around this problem,because we're there Before we
(25:43):
dive into that.
Speaker 1 (25:44):
Would you be willing to spend a couple minutes on
just maybe you know, at a highlevel, walking us through some
of the things that you know youand the agency you work with and
your team have done to try andtroubleshoot this?
Because, while it may not bethe answer for you, I think for
our listeners out there,something may ring in their head
and go oh, that's somethingthat is the issue for me, in
(26:06):
order to resolve the problemwhen they run into it.
Speaker 2 (26:09):
Well, I would say a couple of things.
One is, let's just, we'll stayfocused on conversion rate at
the moment and you canextrapolate to other areas as
you need, as as you need, but onthe conversion rate side, we
know we know the specificparameters that we have control
over that will affect conversionrate.
So if you can't find theultimate problem, the question
(26:32):
is I still have to get myconversion rate back up Like I?
Can't.
There's no way I can continuelike this with the conversion
rate being where it is.
Can't.
There's no way I can continuelike this with the conversion
rate being where it is.
How do I do that?
And so what are your levers?
Your levers are price, whicheither means changing the
regular everyday price or salepricing or deal pricing or
coupons or any combination ofthose three.
(26:53):
So pricing is an optional leverthat you can pull.
We'll come back to that in asecond, but it's there.
Your image stack, you know thatand in fact, your main image is,
I would say, in a lot of ways,your main image and probably
your second image are the onesthat are the most critical ones,
because, one, changing yourmain image and again paying
(27:15):
attention to the connectionbetween the main image and the
listing right.
Make sure that both of thoseare speaking to the same avatar,
they're speaking the samelanguage, they're promoting the
same thing, like there's nodisconnect between those two
things.
But adjusting that main image,if it increases your conversion
rate, as long as you haven'tcreated some sort of a
(27:39):
disconnect, it probably willalso increase your click-through
rate and so then you have acompounding effect there.
So I would definitely focus inon that and make sure that
you're doing split testing onthat.
You can use PickFu or somethinglike that for quick testing,
but then obviously you're goingto have to use Amazon
Experiments.
So that would be one.
Title is another Same as mainimage.
You know it affects bothclick-through and, potentially,
(28:01):
conversion, so focus in on it.
The rest of your listing isrelevant, but as you move down
the page it becomes lessrelevant.
Pay attention to mobile versusdesktop, because sometimes you
make a change that works reallywell on desktop.
But if your product is one thatgenerally sells far more on
mobile than desktop and I wouldsay in this day and age most
products are that way Make sureyou haven't done something that
(28:25):
made the experience less usefulon mobile, like maybe you
changed out some image, and ondesktop it's great.
You know, it's a really goodconversion driver, what you did,
but it's a little text, heavyor something, and it can't be
read on mobile, and so it's notproducing For us, though.
Where we have ended up is onpricing.
(28:45):
Now, I'm going to issue acaveat here, because I've said
this a million times and I stillagree with this perspective,
and that is don't go to pricefirst.
Far too many sellers go toprice first as the lever that
they pull in order to increaseclick-through or conversion, or
whatever it is.
I think that's problematic,because there's a lot of other
(29:05):
levers that you can pull, but Iwill say this if you're in a
situation where you need to pullout of a nosedive really fast
unless you really see clearlysome specific change that you
are convinced is going to have adrastic effect via your main
image or your listing or otherfactors that you can employ.
(29:26):
Price, literally, is thefastest lever that you can pull
and the one that will likelyhave the most drastic and
immediate effect on bothclick-through and conversion
rate, both of which are thengoing to have an end reflection
on profit and revenue.
The question is where is yourprice already and how much room
(29:46):
do you have to move?
And I would say two things aretrue If you are a low-priced
product in your category, youprobably don't have any room
there.
It's just a reality.
And so then you're going tohave to look to other levers
because you can't afford for itto be unprofitable.
Maybe you could afford it inthe short term, but since you
didn't find the actual problemthat caused the conversion rate
(30:07):
decline, chances are, if youchange pricing and maybe your
ranking climbs a little bit andyou know like, but those are
going to be temporary, becauseif it's not profitable you can't
sustain that, and once you turnthat off, then you're back to
square one again.
So it didn't help you.
You just lost money and thenyou're going to lose those
rankings.
So if you're low priced, priceis probably not the lever.
(30:28):
If, however, you are high pricedin the category as we are
really high priced in thecategory then what I did was and
again, we always say, know yournumbers.
But I think what's interestingabout that is that there's
degrees of knowing your numbersright, and sometimes you know
(30:48):
some of your numbers but youdon't know all of your numbers,
or you don't know your numberswell enough on a skew basis, or
you looked at your numbers threemonths ago but the numbers
aren't the same now as they werethen, and if you're basing your
impression on what to do onthose old numbers, you're going
to make bad decisions.
So I just went back to thedrawing board and I just brought
up a spreadsheet and startedplugging in and I was looking at
(31:09):
all of our SKUs.
I was being very careful tomake sure that I had very
updated numbers.
What is our landed COGS?
You know what is the royaltythat we're paying, because we do
have a product, that we have aninventor that we pay a royalty
to.
You know, looking at okay,what's the most up-to-date
pricing on our FBA?
(31:30):
You know shipping fees, ourfulfillment fees, you know that
sort of thing.
So I put the spreadsheettogether and then I started
crunching numbers, because thething that we discovered
recently and it's not this,isn't rocket science, but I
think we sometimes get ingrainedlike, oh, our brand tacos tends
to be X, y, z Right, and so ifI lower my price on the product,
(31:53):
it's kind of like governmentRight, like when they say, oh
hey, we're going to raise taxesand that's going to bring in all
this extra revenue.
But they don't pay attention tothe fact that if they raise
taxes, business owners are goingto change the way that they do
business, and so you can'tdirectly extrapolate what those
numbers are going to look likejust because you raised the tax
percentage.
(32:13):
Well, the same thing here, ifyou look at it as these are kind
of my baseline numbers.
Well, the same thing here.
If you look at it as these arekind of my baseline numbers, if
I lower the price of the product, then my end profit drops by
that amount.
Let's say, I drop my retailprice by five bucks.
Well, you can't look at it aswell now, my profit dropped by
(32:34):
five bucks, because that's nottrue.
One, your referral fee goes downbecause it's a percentage of
the retail price and also payattention to it's different.
The referral fee is 15% of yourretail price, but the referral
fee is, you know, let's say,your profit margin.
(32:55):
Let's say your CM3 is like 30%.
Well, if the referral fee is15%, which we know it is, then
even though referral fee is only15% of retail, it is half of
your profit, like if you comparethe numbers right.
So when you make a change toyour retail price and your
referral fee goes down, yourprofit doesn't go down nearly as
(33:19):
much as your retail price did,because you make up for it
somewhat in your referral feeand it's pretty significant.
On the other end, the otherthing is your tacos is going to
change, because if you changeyour price, it is almost a
guarantee I mean depending onhow much you change the price,
of course that yourclick-through rate is going to
change.
It's going to go up.
Your conversion rate is goingto go up, which means your ad
(33:39):
costs are going to go down inrelationship to how much you
make.
Your ROAS is going to improve.
Your tacos is going to improve.
So the thing I would highlyrecommend is taking a
spreadsheet and then startcalculating out and estimating
some changes.
You know, if my taco starts todrop and my click-through rate
(34:01):
goes up a little bit and myconversion rate goes up a little
bit, and my conversion rategoes up a little bit, my
impressions probably go up alittle bit because of all of
these other confounding factors,how does that change?
The end point, you know, is myprofitability still OK.
And what I found was that whenI started playing with those
numbers with very conservativeestimates, remember that all of
this stuff compounds.
Your tacos goes down, yourreferral fee goes down, your
(34:25):
conversion rate goes up, yourclick-through grows up, your
impressions go up and you startlooking at those end numbers.
You'll be amazed at how muchthat compounds at the end point.
So we've got products where I amnearly convinced that we can
lower the price on the productby 20% and we still end up with
a CM3 that's 30% plus and ourprofit margin, although it goes
(34:47):
down, does not go down nearly asmuch.
We still have an ROI ofbasically 100% and from my
perspective, if I can have a CM3that's in that 30% range and an
ROI that's 100%, I am totallyokay with that.
Those are good numbers.
So I just found out that we canmake a significant change to
(35:10):
our pricing structure and we canhave a drastic effect, I think,
on the endpoint and our overallprofitability.
So I just think that's the leverthat we're pulling right now.
It's not as if we're not doingother things.
We're looking at main imageswhere we're making adjustments
there, but price is the one wecan pull quickly and what I
discovered was I can actuallypull that lever a lot harder
(35:33):
than I thought I could.
Like I had in my brain.
This is where our profitmargins are.
There's no way I can make thatsort of adjustment.
You know of that amount there's, we can't afford it.
Well, it turns out.
I'm pretty sure we can affordit and that's the lever that
we're pulling right now.
Speaker 1 (35:49):
Yeah, I think that's why it's so important to do some
forecasting with the data, andI think that's and also the
compounding effects that youtalked about, mike, that what I
would add to that because I meanobviously we do, we pull price
in both directions as a lever,both up and down, with the
clients on a regular basis isjust be careful, like that, you
(36:10):
know.
Think about it like the, youknow almost like the, the rocket
fuel or something like that.
You know, the nitros, if youwill, for your business of it
will send you in one directionreally fast.
So make sure that it's thedirection you want to go in,
because Amazon is very kind withyou.
As far as you know, it'll letyou lower your prices as quickly
(36:31):
as you want.
Problem becomes then if you wantto raise your price, you know,
back up, that can be verychallenging because there is you
got to have a reference pricemost of the time, and then you
know, if you raise it too much,your listing ends up getting
ends up not suspended.
What's the word I'm thinking of, matt?
Your buy box gets suppressed.
(36:52):
Yeah, that's what I'm thinkingof.
Your buy box gets suppressed,which means that you know it's
almost impossible at that pointyou know, to buy your product
and your listing becomes youknow you're going to see your
sales drop on that listing by90%, and so that's why you know.
Something that we really look atis if we're doing some of that
price testing, especially in youknow bigger increments of using
(37:15):
a coupon or you know withinAmazon's like promotions that
they offer, because then what itallows you to do is, okay, let
me test what does 20% look likeoff my product, and then the
added benefit to that is thatAmazon actually gives you
additional traffic because theyknow, hey, you're probably going
(37:36):
to see a bump in conversionrate and those types of things.
So, like you said, mike, thatcan be a real great lever to
pull, and using a promotionallows you to pull it in more of
a temporary way, so you canactually measure that, whereas
if you just straight up dropyour price by 30%, if those
numbers don't work out the wayyou would hope, forecasting,
trying to raise your price backup something like 30% can be a
(38:00):
pretty arduous process.
Speaker 2 (38:02):
Yeah, no, it's a really good point.
I mean, I think you know thatreference price point is really
critical.
You know that you be carefulthat you don't adjust it in the
wrong direction too quickly.
And that's exactly what we'redoing is we're running sales and
promotions right now.
You know, kind of test whatthat pricing differential looks
like.
And of course obviously thedifferential is going to be more
extreme when you run it as apromotion or a deal or a coupon
(38:27):
than it is if you just straightup change the price, because
psychologically people look atthose things differently.
But it does still give you anidea because it's going to be
close.
It's not like they'redrastically different, but they
will be different.
But it is definitely somethingto pay attention to for sure
will be different, but it but itis.
Speaker 1 (38:44):
It is definitely something to pay attention to,
for sure.
Yeah, and if you're worriedabout I mean especially if
you're worried about margins, or, you know, if you want a way to
test that out without having togive away the entire 20% I know
it's old school, but I'm stilla huge fan of coupons because
you know, say you want to offeryou know now.
So I'll say two things.
One, most of the brands we workwith are in the premium, you
know premium area.
(39:04):
They're high price products.
So generally what I do is youknow, $10 off $100 product most
of the time is going tooutperform 10%, and the reason
for that is because peopleunderstand what $10 is.
You know we're not good on asearch page and about you know
one, a second and a half offiguring out how much 10% is off
(39:24):
$100.
And normally the numbers aren'teven that round.
So that's the first thing is,think about how you're
discounting with that coupon.
And then the other thing isthat typically only about 30% of
those coupons actually getredeemed.
So let's say you have a $100product, you have $10 off
product, you have $10 off.
Well, you know, if only one inthree of those people actually
click, you know, redeem thatcoupon.
(39:49):
You're really only paying about, you know, three and a half
bucks per unit in order to offerthat.
You know, quote, unquote, $10off.
So that's another way that wereally like to test that out as
well, to see, hey, how much legsdoes pulling this price lever
have?
Speaker 3 (40:00):
Amazon recently.
By the way, in terms of coupons, we just ran a coupon for one
of our clients that it needed tobe a percentage off instead of
a dollar amount because we wereadding multiple SKUs to the
coupon and they changed that.
Amazon changed it and actuallythe percentage off coupon takes
up more space than the dollaramount coupon because it
(40:21):
actually tells you in the searchresults you will pay this
amount if you clip the coupon.
So it's changed now and youdon't have to do math.
It actually does the math foryou and it takes up a lot more
real estate under the couponthan just doing a dollar amount.
Speaker 2 (40:34):
So they have to explain.
So yeah, so you get more.
Speaker 1 (40:39):
Well, I mean, I feel, from a customer perspective
like you know, if you've got aproduct that's you know, 30, 40
bucks, you're like, okay, soit's 15% off.
You know, and you're like, okay,ready, set 15% off on $30.
I'm like, yeah, so, yeah, thatmakes a lot of sense, all right.
Well, I think this is a goodplace to kind of at least for
today wrap on what advice we'dhave for listeners when they run
(41:05):
in this situation.
Again, I think this is a greattopic because if you're selling
on Amazon long enough, you aregoing to run into this problem
where your conversion rate, yourclick-through rate or your
impressions drop significantlyand you have to figure out
either A what happened or, mike,as you brought up importantly,
hey, what am I going to do aboutit?
And sometimes, what am I goingto do about it is dramatically
(41:27):
more important than whathappened, because you may never
find exactly what happened.
So, with that, you know what iskind of one takeaway that you
would give for listeners whenthis happens to them, as they're
, you know, working on growingtheir brands on Amazon and
beyond.
Speaker 3 (41:44):
For me it's already been talked about a couple of
times First of all, don't panic.
Second of all, look at thenumbers and have a way that you
can look at the numbers in a waythat you can see the full
funnel.
You can see from impression allthe way down to conversion and
everything in between, Becausein most cases maybe not the
issue will surface itself, butat least the direction that you
(42:07):
need to go in yourtroubleshooting will definitely
surface itself, as long as youhave the data in front of you.
So, yeah, just make sure thatyou understand your numbers but
then also know how to look atyour numbers to be able to
diagnose things like this.
Speaker 2 (42:19):
Yeah, and I think, be open-minded.
I think it's easy.
We like to think asentrepreneurs, that we're
open-minded and creative.
Right, and to some degreethat's true.
I mean, probably, you know, ina lot of ways more than the
average person, but at the sametime we still get set in our
ways.
We still get kind of lockedinto certain viewpoints about
(42:39):
our business, about our brand,about strategy, about, you know,
all these things.
And so it's kind of like, I mean, a lot of people have heard
this story, you know, but thelady who's, you know, you know,
she cuts the ends off of herroast every time she cooks it
and puts it in the pan, you know.
And and finally, you know,somebody asked her well, why do
you do that?
And she was like well, my momdoes that.
That's just how you cook aroast.
And she asked her mom and hermom's like I don't know, you
(43:01):
know, my mom always did that,that's what she did, so that's
what I did.
And finally she asked hergrandma and her grandma says
well, my pan was too small, Ialways had to cut the ends off
the roast, you know.
So we have these things that wethink are true, you know, that
we think have to be done or haveto be this way, For instance,
price.
You know, like I literally waskind of in this space where we
(43:23):
don't have the room, we don'thave the margin, there's no way
we can you know we can makethose adjustments to our price.
That would be significantenough that it would kind of
overcome some of these problemsand start moving the needle in
the right direction.
As it turns out, I'm almostglad that our click-through rate
dropped because it forced me toinvestigate that issue further
and I actually feel that for ourbrand, that is the most
(43:45):
critical and most useful leverthat I think we're going to be
able to pull, because I thinkit's actually going to have
massive downstream effects onour organic ranking, you know,
on our overall ability to crosssell products and all of those
things.
So you know, I mean stay tuned,you know, for our next reports
to see whether it actually hasthe effect that I think it's
(44:06):
going to have.
But so far we're seeing drasticreductions in our tacos.
Our tacos have climbed up tolike 23%, 24% and with these
modifications to our pricepoints and we haven't even made
all the changes we actually onlywe ran a sale.
We're running a sale on all ofour products, but then we also
have, while we're running, acoupon on all of our products
(44:27):
and then we have a sale plus thecoupon on one of our products
that we actually had room tomove on.
We actually have more room tomove than that and I think we
may take advantage of it.
But even where we are right now, our tacos dropped almost
immediately from twenty fourishpercent to 14, 15 percent.
So it's a massive decline andfor us, because we're so
(44:50):
ad-based right now, that's a bigjump because it means that we
can actually keep our adsrunning and be profitable enough
and move forward with this.
So just be open-minded, Knowthat there's solutions that you
probably thought weren'tsolutions in the past.
You might need to consider themthis time around.
Speaker 1 (45:07):
Yeah, and I and I'll leave with this because I think
you know what you're touching onthere is so important, which is
, I think you know, asentrepreneurs, when we run into
that problem, first thing, youknow, the first thing we feel is
, man, this sucks and, andthat's you.
(45:27):
That's totally rational andtotally normal to feel that, and
it's okay to feel that for amoment and then say, okay, how
are we going to fix it and howare we going to be stronger on
the other end of it, becauseeach one of these issues that
you run into is an opportunityto make your brand and your
business even stronger.
And I think if you look throughthat lens of like, how do I
solve this in order to make thebusiness and the brand even
(45:51):
better, then it's a lot easierto put into that significant
amount of work that in a lot ofcases there's not the quick
fixes, because if there was, youwould do them.
To have that mindset going inwhen you put in a significant
amount of work to figure out howthe heck are we going to fix
this thing, level or ahead ofyou is so critical in these
(46:26):
types of situations.
Because you know, that's why Iwas excited to do this episode
is because I've seen it happen.
I've had it happen to myselfand brands that I've owned.
I've seen it happen to clients,you know, multiple times.
I think it happens to everybodyat some point that spends any
significant amount of time, youknow, selling on Amazon or,
quite frankly, any otherplatform, and so being able to
(46:46):
reach out to people and say,okay, what are, you know, what
are the common things that causethis, so that way I can either,
you know, fix it using those or, you know, identify that that's
not the problem just makesthings a hundred times faster
than trying to figure it outyourself.
So, yeah, if you don't havethat community, you know, find
(47:08):
some people, reach out to myselfor Mike or Matt, and we'll be
happy to plug you into a greatcommunity.
So with that, I think that's agreat place to wrap for this
text Tuesday, and we'll see younext time.
Welcome everybody to another Tactics Tuesday for the
Brand Fortress HQ podcast.
Today we're talking aboutsomething that is very timely,
that we see happen from time totime for brands, where you just
have one of those situationswhere you see a big drop in your
conversion rate, and what wewant to cover here is what do
you do in those scenarios andwhat does that look like.
(00:21):
So with that, mike, if youwouldn't mind, I'm going to hand
it over to you, and if you givea little bit of background on,
maybe you know the issue thatyou're working with right now
and so on and so forth.
Speaker 2 (00:41):
So that's been a little bit of a cascading event
that we've been trying toaddress.
But in that we ended up end ofMay, around May 26th-ish
somewhere in there, ourconversion rate dropped off a
cliff and it seemed to bebrand-wide, quite frankly, and
(01:01):
we obviously it was a huge issuebecause what ends up happening
then?
Anybody who's listening knowsthis.
But you know, conversion ratehas a snowball effect, right,
same as click-through rate has asnowball effect.
That you know.
There's this cascading, youknow set of issues.
So our conversion rate droppedby like half, like half.
(01:27):
And when that happens, you know, first of all your ad costs
begin to skyrocket becauseobviously your ad costs are
based very much around what isyour conversion rate?
You know, if I send 10 clicksto my, to my page, and my
conversion rate was 20%, I'dnormally get two sales and now
it's one, you know it's 10%, Ionly get one sale.
Obviously the expense versusthe revenue and profit generated
on the backside is becomes verylopsided.
(01:48):
But then, worse than that, thatsnowballs more because you know
if the cost goes up too muchthen it becomes not profitable
and so then you have to pullback on your bids because you
can't spend as much, you know,per click, and so then you're
getting less impressions, and sonow you're getting fewer sales
overall, and so revenue,everything just cascades in a
(02:09):
downward spiral, and so that'skind of what we were seeing In
fact, that's actually how wenoticed it initially was that we
started seeing our ad costs goup and our impression share
started going down, and we foundout from our agency that they
were pulling back on bids andads because the cost was
climbing so fast, and it turnedout it was because of this
conversion rate problem, and sothen it was OK.
(02:31):
You know, what do we do?
You know like we need to findthe problem, we need to figure
out where we're leaking so thatwe can fix it.
And another thing that I thinkis critical to point out here is
for us right now, this is amassively big issue.
It would be a big issue for anybrand, but for us it becomes
even more significant because atthe moment, because we're so
(02:54):
high priced in the category andwe've had some trouble regaining
some rankings that we used tohave because of a lot of low
price competitors, we are verylopsided in terms of our organic
versus ad share for revenue.
So we're probably 60-40 ads toorganic, maybe even 65-35.
This is maybe even a littlecloser.
(03:15):
And so when you're in thatsituation and conversion rate
drops because you have to startpulling back on ads, that is the
bulk of our sales and so that'sa really significant problem,
whereas if you're organic based,you know, like if we were 60,
40 organic ads or 70, 30 organicads yes, conversion rates a
(03:36):
problem.
Revenue is still going to godown, but you don't necessarily
have to pull way back on ads andit's not going to drop as
precipitously as it is for us.
You still need to find theproblem, you still need to fix
it, but it's just it compoundsthat much faster in a situation
like what we're in, and so it isone reason why, as a brand, I
do recommend that you really payattention to that split in
(03:59):
terms of your ad versus organicsales.
And if you start pushing past50-50, you probably have a
problem, and that's kind ofwhere we are.
But you really want to be 60-40organic to ads, maybe even
70-30 if you pull it off.
Speaker 1 (04:15):
Yeah, a couple of things that I think about, just
to take a step back.
That I think is important isthe first thing is that thinking
about this from inputs andoutputs is and this is typically
what happens is you startseeing your sales drop.
And then I think you guys tooka great first step in looking at
what are.
When I think about this, whatare the about?
So the first one is checkingyour impressions just to say,
(04:37):
hey, you know, are we justgetting less sales?
Because you know we're gettingyou know less at bats, where we
used to get you know 100,000impressions a week, now we're
only getting you know 50,000.
And then looking at what yourclick through rate is.
(04:58):
And then, finally, looking atwhat your conversion rate is,
because those three metrics arekind of the main three inputs
that I think about as far aswhat's going to lead to the
output that we all want, whichis more sales.
And then, when you talk aboutconversion rate, the other thing
that I would just encouragepeople that, because I feel like
this happens to every brandthat's been on Amazon long
(05:20):
enough that they go through somesort of issue like this, where
things kind of feel like theyfell off a cliff.
They they fell off a cliff iswhen we're talking about
conversion rate.
There's a total conversion rateand then there's also an ad
conversion rate, and I thinkit's important to split those
out because we've definitelyseen it with some of the clients
that we work with on theiraccounts where, you know, their
organic sales pretty muchdropped to nothing for a week,
(05:42):
but their ad sales were stillsuper strong.
And so understanding, you know,is it my ads just didn't do the
job that they were supposed to,or is there something on the
organic side?
Speaker 3 (05:56):
that's not performing like it should be.
Yeah, I think what's importantwith everything that both of you
have talked about is and thisis a conversation that we've had
a lot of times and it's aboutknowing your numbers and, I
think, being able to view all ofthat data in funnel form in the
way of a funnel.
So start with impressions andwork your way all the way down
to conversions, and if you lookat every one of those stats
(06:18):
along the way it's nine timesout of 10, 9.5 times out of 10,
the issue will will show itselfas you start walking through
that.
It's either, like John said,it's either an impressions, it's
either traffic or conversions,and there's traffic, click
through or conversions, andthose are really the main three
things that it is.
And if you look at all of thatdata, I have a spreadsheet.
(06:39):
It's not very sexy, it's just aspreadsheet with a whole bunch
of numbers on it, but it startsat impressions and then it goes
to page views and then it goesall the way to conversions.
And I look at every single stepalong the way and a lot.
Most of the time you're able todiagnose what the issue is, and
I mean, it's not always whenwe're talking about conversion,
the first thing that comes topeople's minds is images and
(07:00):
your title and pricing and thatkind of stuff, which obviously
all that stuff is very important, but it's not always.
I think a big part of that foras we start digging into the
issue that Michael is talkingabout is that you know it could
even we.
We just changed our, we justswitched over agencies, as we
talked about a couple of weeksago.
So you know, there is alearning.
No matter how good the agencyis, there's a learning phase and
(07:21):
there's some restructuring ofcampaigns that they do.
So there's going to be somesort of an adjustment up or down
on click through and conversionrate, just on how they're
targeting in terms of PPC.
So it's not always your imageswhen you're talking about
conversion.
It's not always your title.
Price is obviously a big lever.
But I think being able to havesome sort of whether it's a
software or a spreadsheet thatyou use looking at the data in
(07:43):
full funnel form, it makes it alot easier to figure out where
the issue is and then how toaddress it.
Speaker 2 (07:50):
Yeah, I think so.
One of the things that comesinto play here is then okay, so
what's the game plan, right?
So focusing on conversion rate,let's say.
Then the first step is toevaluate if conversion rate is
what dropped, then that isn'tnecessarily, you know, a result
(08:10):
of a change in impressions orclick-through rate, although
there may be a connection.
You are going to want to lookat click-through and impressions
, because if the only thing thatreally changed, like at that
point, like, so first of all yougot to go back to the data and
figure out when did the changehappen?
Because once you know when thechange occurred, then the
(08:30):
question becomes okay, well,what other metrics got worse
when that conversion rate wentdown, and how quickly, like were
they?
Was it simultaneous, you know?
Did one precede conversion rate?
Did something else, you know,come after conversion rate?
What was the sequence of thecascade?
Because maybe conversion rateisn't the starting point, maybe
conversion rate happenssomewhere in the middle of this
(08:52):
cascading series of events andyou and you just kind of work
your way back to find the onethat was the beginning of that
cascade.
But let's say conversion ratewas the initial part of the
cascade.
Then the question becomes okay.
So you know my impression sharedidn't was hadn't immediately
come down or wasn't coming downbefore that.
So that doesn't seem to berelated.
(09:14):
My click through is also fine.
It hasn't changed at all.
But one of the things that thattells you more than likely it's
not an absolute.
But for conversion rate, yourimages matter, your listing copy
matters, your A-plus contentdoes matter, your pricing
obviously matters.
But then the question is okay,well, some of those things
affect other things, forinstance click-through rate.
(09:36):
Your click-through rate is verymuch tied to your main image
and your title.
Conversion rate also is fairlyrelevant from a main image and
title standpoint, because ifsomebody clicks on your main
image and they think they'regetting something that it turns
out your listing seems toindicate they're not getting,
then they're not, they're notgoing to buy.
(09:56):
So conversion rate goes down.
So the question is did you dosomething on your listing that
caused a disconnect between themain image that they clicked on
and the image which is tellingthem what they're going to get
when they actually spend themoney?
Right, is there a disconnectthere, or did you change
something in the main image?
So, in other words, let's putit this way If you knew what
your numbers were coming in andyou see, oh, my conversion rate
(10:19):
dropped.
But then you look back again.
This goes back to what I wassaying a second ago.
You go back and you look at OK,click through precedes that.
What happened to my clickthrough rate?
Well, my click through ratejumped previous to my conversion
rate coming down.
Right, and maybe they werefairly synonymous, but the point
was I've got click through rategoing up and conversion rate
going down.
A logical extension of that isI changed my main image and it
(10:43):
caused a whole bunch of peopleto click on my listing who
aren't a good fit for what mylisting says.
The product is right.
Those kinds of mental gymnasticsare the things that you need to
run through to figure out wherewas the problem.
And realistically, I mean justto get to the heart of this Matt
and I have gone through all ofthe mental gymnastics that we
(11:05):
can come up with, as well as theagency that we work with.
We've not found the actualcover.
So I mean, I'm speaking of allthese things and they're all
important things that you needto pay attention to and you need
to walk through that process,and there's some other things we
should talk about too.
But it's also important torecognize you might not find the
problem like the actual problem.
You may not be able to pinpointit.
It might be something Amazondid that you're never going to
(11:27):
see, you're never going to know,and who knows, maybe next week
they change it back and all of asudden things are rosy again.
Could be something a competitordid that you can't see and you
don't find.
So, at the end of the day,recognize you need to look for
it.
You definitely need to dig intothe data and see if you can
find it.
But if it becomes fairly clearthat you're not going to find it
quickly, then you need to findanother solution Because,
(11:49):
realistically, although theproblem is conversion rate, the
real problem is that means lessmoney coming into your pocket,
right, cash flow is going todecline, profits decline, you
know, like that's the end pointthat becomes the actual issue,
right?
So you need to find anothersolution that's going to address
that end pain point.
And that's where we are in thisprocess.
(12:09):
We didn't find the actualproblem that caused that
precipitous decline, so we'rehaving to find a different
solution.
So at least we can solve theproblem of revenues down,
profits are down, cash flow isdown.
We're screwed if we don'tfigure what the solution is.
Speaker 1 (12:24):
Yeah, I think that's such a good point is that
sometimes you know as much aswe'd love to find you know that
that one thing, that was theproblem, that if we just, you
know, flip that switch again,everything will go back to you
know being hunky dory and rosyagain.
The reality of it is is thatsometimes they're just you know,
sometimes there are thosesimple fixes and sometimes there
(12:45):
just aren't those switches toflip.
So you have to find, like yousaid, mike, another way in order
to win, and sometimes thatmeans putting in significantly
more time to make up for thesales velocity that you lost and
the momentum.
Speaker 3 (13:02):
Well, I mean, sometimes it's not a lever that
you can pull, and I think that'swhat Mike was alluding to.
Is that?
I mean, sometimes it's Amazon,Sometimes you get unindexed from
all of your keywords, Sometimesyou are placed in a separate
subcategory, a differentsubcategory than you were Like.
Sometimes it's something thatAmazon did that, like Mike said,
is not easy to, and that's the.
That's the challenge that werun into as sellers on this
(13:24):
platform is that there's notalways a smoking gun and you can
spend your days chasing smokingguns, which is what Mike and I
have been doing the last coupleof days to be prepared for that
as a seller on the platform, andyou know, I think, that our
skills combined and theknowledge of the platform
(13:50):
combined, it's going to end upleading to a solution.
It's going to end up, you know,we're going to get back to
where we were.
Who knows if we'll ever findthe smoking gun?
But I think you know, knowingyour numbers, understanding how
to find the data and how to lookat the data and how to let the
data tell you the story, butthen also keeping in mind that
there's not always going to be asmoking gun with an easy lever
that you can pull.
(14:10):
I think those are superimportant things to keep in mind
.
Speaker 2 (14:13):
Well, I think too, you know it's reasonable to say
that if you're not tracking thechanges that you make, then it
really makes it difficult to goback and pinpoint what the
change was.
You know, if it's somethingthat you actually did that
caused this, you knowprecipitous decline and
(14:34):
click-through rate or conversionrate or whatever it is you
might be able to go back to thedata and you might be able to
pinpoint oh hey, it was.
You know it's clicked through.
That's the problem, and ithappened on this date, and we're
pretty sure it's related toeither the title or the image.
You know whatever.
But if you have, say, numerouspeople on your team that maybe
(14:54):
do you know listing updates orimage updates, or you know
things of that nature, and youare not adequately tracking who
does what, when and why they didit, then that becomes an
additional problem.
And so and I'll fess up to thefact that we weren't tracking
(15:15):
well enough you know what thingswere happening, who was doing
it, when did it happen and whydid they do it.
And so I literally have createda spreadsheet that we didn't
have before, that its onlypurpose is on a SKU basis or
ASIN basis.
You know it has.
You know you check a box to saywhat did you change?
Main image, one of thesecondary images, which one?
(15:37):
You know title bullets,description, price.
You know all the number ofthings that you could change
related to a product detail page.
It automatically enters thedate and the time of the change
and then we're entering in okay,why did we make this change?
What were we trying to improve?
Were we trying to improveclick-through or conversion or
(15:57):
whatever?
What was it?
If we change the image, whatdid we change about the image?
And then I actually have a linkbecause, because we've started
doing a lot of our design workactually in Canva I have a link
to the actual page within ourCanva document that has all of
the main stack of images for theproduct and it links directly
to a particular page that isthis design element.
(16:19):
So it has what was the previousand what is the new.
And then there's a results taband so now going forward.
It doesn't help us with thisproblem that we just ran into,
but at least going forward.
If we see a precipitous drop onyou know June 15th well, I can
go back to this spreadsheet,look at the dates, find out what
changed on June 15th or 14th orwhatever, and I can see oh well
(16:43):
, we did this, or at least theseare the things that we did.
Would any of those things youknow have affected us in that
way?
If not, well then it probablywasn't something that we did
related to the product detailpage.
So it gives you a lot morevisibility that you don't have,
and Amazon doesn't track thatLike you don't have a history.
you know who did what when onAmazon to know when did those
changes occur.
So I think, if you're nottracking those things, I would
(17:06):
create a spreadsheet and an SOPto make sure that whoever on
your team is making changes likethat, that it's being logged on
that sheet so that you can tiethe data together with the
actions that have happened onyour account.
Speaker 1 (17:17):
Yeah, and depending on what software you're using
for ads management or otherthings.
Some of those softwares do havesome of that capability as well
.
The only ones that I've seen iton are fairly expensive.
So that might be something that, if you're working with an
agency that they have otherwiseas a brand owner, those things
do, you know that software canbe kind of expensive, and so I
(17:38):
think, like you said, Mike,having something sometimes, you
know, having a Google sheet ismuch better than having nothing.
Yeah, the other thing that Iwould say is is that you know
very big on, you know analyzingdata in order to kind of figure
these things out.
That said, I think it'simportant for Amazon
specifically to make sure thatwhen you're looking at the data,
(18:03):
that you're looking at searchquery performance data,
differently from what you'relooking at from, like, your ads
data and that type of stuff,because those things are, you
know, calculated differently,and I'm not, you know, going to
go into all the details on that,because I don't think it's
really necessary.
I think you know people can findplenty of material out there on
how those things are calculated, how they're calculated
differently, but I think it'sjust important to know that
(18:25):
those numbers, how they get tothat total is different.
So just to be aware of that,make sure that if you're looking
at, hey, what was our databefore, what was our impressions
, what was our conversion rate,those types of things If you
were tracking that on your usingsearch query performance data,
that's what you should look at,you know, compare it to.
Or you know, if you're lookingat based on your business
(18:47):
reports and your ad you knowreports that you use, that data
doesn't mean that you can't use.
You know your search queryreports.
You troubleshoot it because youabsolutely should.
Speaker 3 (18:56):
But just make sure that when you're kind of
comparing data, that you'recomparing apples to apples and
oranges to oranges in thosescenarios, yeah, I think another
important stat that you need tobe paying attention to in this
conversation is in somethingthat Mike mentioned in the
beginning.
You know, when your conversionrate drops, there's a cascade of
things that happen bad thingsthat happen, and one of them is
(19:18):
your organic rank, and that'sone of the easier things,
especially with the tools thatare out there on the market now,
to track your organic rank,like that's.
That's one of the first thingsthat I checked when we noticed
our conversion rate was wasorganic rankings.
That was one of the first thingsthat I was concerned about, and
you know, your BSR and yourranking, like those, are other
stats that I think are importantto be paying attention to,
because they're those are whatare the most affected when your
(19:41):
conversion rate drops.
So you know, I think that'salso an important thing to track
, and the amount of of sellersthat I talked to that aren't
tracking organic rank is ispretty astounding Cause I mean
for me, in the way that I thinkabout advertising, is
advertising is a way to increasemy organic rank on the keywords
that matter, and if you thinkabout advertising in that way,
(20:03):
then you will start to draw thatconnection with how advertising
affects your organic rank, butthen also how conversion rate
affects your organic rank, andwhen you see a drop in your
conversion rate, you're almostassuredly going to also see a
drop in your organic rank, whichthen has, you know, amplifying
effects on on the rest of thethings, like advertising, for
example.
Speaker 1 (20:23):
Well, yeah, and I think it's a little bit of a
tangent, but I think you know,personally, I think organic rank
is a little bit of a misnomerin the sense of I think at this
point, it's pretty much it'smore accurate to call it earned
rank.
Really, what you're doing is isthat you're, you know you're
spending money on ads and you're, you know, making sure you're
building up your listings andthose types of things in order
(20:45):
for amazon to give you morevisibility, to prove to them
that they're going to make moremoney off of showing your
product ahead of yourcompetitors.
And I think at this point inthe game, you know, in 2025, you
you really have to earn thatspot, doesn't, you know?
Come to you, you know, for free.
At least, that's what I seewith the vast majority of the
clients that we work with.
(21:06):
Also, I'd say something, and Idon't know if this is, you know,
true in your case, but when wedo see this, one of the things
that I would encourage people tocheck right away is to look at,
you know, if you've beenrunning any sort of promotion
and you're used to, especiallyif you're tracking this, you
know, week over week orsomething like that, and that
promotion ends or you losesomething like strike through
(21:26):
pricing.
It could be that you didn'tchange anything on your listing
or didn't change anything aboutyour ads, but with that change
in kind of perception andpricing and badging, that can
have a pretty significant effecton your conversion rate.
And so you know you might bedriving yourself crazy to figure
out, hey, what did we dodifferently?
And the reality of it is isjust you just lost price through
striking or strike throughpricing on your listing.
Speaker 2 (21:48):
You know, that's a really good point, john.
To be honest, I hadn't actuallylooked at that.
I see that most of our heroSKUs, I believe, still have our
strike through pricing.
So that may not be it, but thatis a valuable piece.
That hadn't really occurred tome Because we know I mean it's
obvious that strikethroughpricing does have an effect on
(22:09):
conversion rate, and so if youlost that, that would definitely
be relevant, I think.
A couple other things to payattention to here, and then I
think I actually kind of want tochange gears just a little bit,
because I think the last halfof this conversation might be
better served down a slightlydifferent road.
We'll see if you guys agree onthat.
But one thing is one of thethings that we did fairly early
on here was I ran a pick foodtest just on our landing page,
(22:33):
on our PDP, because you know,one of the things that you know
you just don't know is if youmade a change, if there wasn't
any change to your productdetail page, and you know for
certain that that's true.
Maybe this isn't a valuablepiece, but I would say it's a
valuable piece regardless,because it's always good to get
(22:53):
feedback.
Pickfu has one of their testingis just straight up, go to this
page and tell me what youthought about it.
You know like, would you buythis product?
If not, why not?
If so, why so?
And so I sent out a PickFu onit and just sent them directly
(23:22):
to you know some of our pages tofind out what you know.
Did anybody say, hey, you know Ihated this, or this didn't make
sense, or this didn't line up,or you know?
Did anybody say, hey, you knowI, I, I hated this, or this
didn't make sense, or thisdidn't line up, or you know it
looked fake, you know, orwhatever?
That didn't happen.
You know like we got theresults back.
Most everybody said, hey, Iwould buy that.
You know which, by the way,slight tangent here I did.
I did determine that when yourun a picture test, you can
actually include an attributionlink.
Speaker 3 (23:42):
You can use an Amazon attribution link it goes
further, it goes further.
Speaker 2 (23:47):
If you use Switchy, which we use to create short
links, you can put yourattribution link into Switchy,
create a short link out of it,feed that into PickFu and you
can pixel them.
So you can pixel people whoactually click the link to go to
your listing.
You can attribute them so thatif they actually buy, you get
back the referral bonus.
So you might even be able toget some sales out of it and
(24:09):
make back your PickFu fees.
So but anyways, we sent thatout.
A whole bunch of people said no, I would buy it.
Very few people said no and thepeople who said no, it wasn't
really any major thing with thelisting that we could really fix
.
So it became fairly clear thatwasn't the problem.
But I would recommend that Ithink it's a great idea Consult
with other sellers.
If you're not a part of somechat groups on WhatsApp or some
(24:30):
pay for groups that maybe youcan be a part of some small
masterminds, things like that,where you're you know you know
shoulder to shoulder with othersellers at and above.
You know some below two, so youcan actually help other people.
But there need to be somesellers in there who are at
least at or above your level ofplay on the platform so that you
(24:51):
can consult with them and seeyou know what's up.
Consult with Chad, gpt or someother AI quad or something and
ask it questions, see if it canfind the problem, put your data
in there and have it analyze thedata.
Then the question becomes howadept are you at figuring out
(25:22):
other ways to make an end runaround whatever this problem is,
so you can get your revenue andprofits back up again?
What are the levers that youcan pull and how can you pull
them?
And so I think it would bereally useful to kind of focus
on some of those strategies andmaybe what we're doing right now
to get around this problem,because we're there Before we
(25:43):
dive into that.
Speaker 1 (25:44):
Would you be willing to spend a couple minutes on
just maybe you know, at a highlevel, walking us through some
of the things that you know youand the agency you work with and
your team have done to try andtroubleshoot this?
Because, while it may not bethe answer for you, I think for
our listeners out there,something may ring in their head
and go oh, that's somethingthat is the issue for me, in
(26:06):
order to resolve the problemwhen they run into it.
Speaker 2 (26:09):
Well, I would say a couple of things.
One is, let's just, we'll stayfocused on conversion rate at
the moment and you canextrapolate to other areas as
you need, as as you need, but onthe conversion rate side, we
know we know the specificparameters that we have control
over that will affect conversionrate.
So if you can't find theultimate problem, the question
(26:32):
is I still have to get myconversion rate back up Like I?
Can't.
There's no way I can continuelike this with the conversion
rate being where it is.
Can't.
There's no way I can continuelike this with the conversion
rate being where it is.
How do I do that?
And so what are your levers?
Your levers are price, whicheither means changing the
regular everyday price or salepricing or deal pricing or
coupons or any combination ofthose three.
(26:53):
So pricing is an optional leverthat you can pull.
We'll come back to that in asecond, but it's there.
Your image stack, you know thatand in fact, your main image is,
I would say, in a lot of ways,your main image and probably
your second image are the onesthat are the most critical ones,
because, one, changing yourmain image and again paying
(27:15):
attention to the connectionbetween the main image and the
listing right.
Make sure that both of thoseare speaking to the same avatar,
they're speaking the samelanguage, they're promoting the
same thing, like there's nodisconnect between those two
things.
But adjusting that main image,if it increases your conversion
rate, as long as you haven'tcreated some sort of a
(27:39):
disconnect, it probably willalso increase your click-through
rate and so then you have acompounding effect there.
So I would definitely focus inon that and make sure that
you're doing split testing onthat.
You can use PickFu or somethinglike that for quick testing,
but then obviously you're goingto have to use Amazon
Experiments.
So that would be one.
Title is another Same as mainimage.
You know it affects bothclick-through and, potentially,
(28:01):
conversion, so focus in on it.
The rest of your listing isrelevant, but as you move down
the page it becomes lessrelevant.
Pay attention to mobile versusdesktop, because sometimes you
make a change that works reallywell on desktop.
But if your product is one thatgenerally sells far more on
mobile than desktop and I wouldsay in this day and age most
products are that way Make sureyou haven't done something that
(28:25):
made the experience less usefulon mobile, like maybe you
changed out some image, and ondesktop it's great.
You know, it's a really goodconversion driver, what you did,
but it's a little text, heavyor something, and it can't be
read on mobile, and so it's notproducing For us, though.
Where we have ended up is onpricing.
(28:45):
Now, I'm going to issue acaveat here, because I've said
this a million times and I stillagree with this perspective,
and that is don't go to pricefirst.
Far too many sellers go toprice first as the lever that
they pull in order to increaseclick-through or conversion, or
whatever it is.
I think that's problematic,because there's a lot of other
(29:05):
levers that you can pull, but Iwill say this if you're in a
situation where you need to pullout of a nosedive really fast
unless you really see clearlysome specific change that you
are convinced is going to have adrastic effect via your main
image or your listing or otherfactors that you can employ.
(29:26):
Price, literally, is thefastest lever that you can pull
and the one that will likelyhave the most drastic and
immediate effect on bothclick-through and conversion
rate, both of which are thengoing to have an end reflection
on profit and revenue.
The question is where is yourprice already and how much room
(29:46):
do you have to move?
And I would say two things aretrue If you are a low-priced
product in your category, youprobably don't have any room
there.
It's just a reality.
And so then you're going tohave to look to other levers
because you can't afford for itto be unprofitable.
Maybe you could afford it inthe short term, but since you
didn't find the actual problemthat caused the conversion rate
(30:07):
decline, chances are, if youchange pricing and maybe your
ranking climbs a little bit andyou know like, but those are
going to be temporary, becauseif it's not profitable you can't
sustain that, and once you turnthat off, then you're back to
square one again.
So it didn't help you.
You just lost money and thenyou're going to lose those
rankings.
So if you're low priced, priceis probably not the lever.
(30:28):
If, however, you are high pricedin the category as we are
really high priced in thecategory then what I did was and
again, we always say, know yournumbers.
But I think what's interestingabout that is that there's
degrees of knowing your numbersright, and sometimes you know
(30:48):
some of your numbers but youdon't know all of your numbers,
or you don't know your numberswell enough on a skew basis, or
you looked at your numbers threemonths ago but the numbers
aren't the same now as they werethen, and if you're basing your
impression on what to do onthose old numbers, you're going
to make bad decisions.
So I just went back to thedrawing board and I just brought
up a spreadsheet and startedplugging in and I was looking at
(31:09):
all of our SKUs.
I was being very careful tomake sure that I had very
updated numbers.
What is our landed COGS?
You know what is the royaltythat we're paying, because we do
have a product, that we have aninventor that we pay a royalty
to.
You know, looking at okay,what's the most up-to-date
pricing on our FBA?
(31:30):
You know shipping fees, ourfulfillment fees, you know that
sort of thing.
So I put the spreadsheettogether and then I started
crunching numbers, because thething that we discovered
recently and it's not this,isn't rocket science, but I
think we sometimes get ingrainedlike, oh, our brand tacos tends
to be X, y, z Right, and so ifI lower my price on the product,
(31:53):
it's kind of like governmentRight, like when they say, oh
hey, we're going to raise taxesand that's going to bring in all
this extra revenue.
But they don't pay attention tothe fact that if they raise
taxes, business owners are goingto change the way that they do
business, and so you can'tdirectly extrapolate what those
numbers are going to look likejust because you raised the tax
percentage.
(32:13):
Well, the same thing here, ifyou look at it as these are kind
of my baseline numbers.
Well, the same thing here.
If you look at it as these arekind of my baseline numbers, if
I lower the price of the product, then my end profit drops by
that amount.
Let's say, I drop my retailprice by five bucks.
Well, you can't look at it aswell now, my profit dropped by
(32:34):
five bucks, because that's nottrue.
One, your referral fee goes downbecause it's a percentage of
the retail price and also payattention to it's different.
The referral fee is 15% of yourretail price, but the referral
fee is, you know, let's say,your profit margin.
(32:55):
Let's say your CM3 is like 30%.
Well, if the referral fee is15%, which we know it is, then
even though referral fee is only15% of retail, it is half of
your profit, like if you comparethe numbers right.
So when you make a change toyour retail price and your
referral fee goes down, yourprofit doesn't go down nearly as
(33:19):
much as your retail price did,because you make up for it
somewhat in your referral feeand it's pretty significant.
On the other end, the otherthing is your tacos is going to
change, because if you changeyour price, it is almost a
guarantee I mean depending onhow much you change the price,
of course that yourclick-through rate is going to
change.
It's going to go up.
Your conversion rate is goingto go up, which means your ad
(33:39):
costs are going to go down inrelationship to how much you
make.
Your ROAS is going to improve.
Your tacos is going to improve.
So the thing I would highlyrecommend is taking a
spreadsheet and then startcalculating out and estimating
some changes.
You know, if my taco starts todrop and my click-through rate
(34:01):
goes up a little bit and myconversion rate goes up a little
bit, and my conversion rategoes up a little bit, my
impressions probably go up alittle bit because of all of
these other confounding factors,how does that change?
The end point, you know, is myprofitability still OK.
And what I found was that whenI started playing with those
numbers with very conservativeestimates, remember that all of
this stuff compounds.
Your tacos goes down, yourreferral fee goes down, your
(34:25):
conversion rate goes up, yourclick-through grows up, your
impressions go up and you startlooking at those end numbers.
You'll be amazed at how muchthat compounds at the end point.
So we've got products where I amnearly convinced that we can
lower the price on the productby 20% and we still end up with
a CM3 that's 30% plus and ourprofit margin, although it goes
(34:47):
down, does not go down nearly asmuch.
We still have an ROI ofbasically 100% and from my
perspective, if I can have a CM3that's in that 30% range and an
ROI that's 100%, I am totallyokay with that.
Those are good numbers.
So I just found out that we canmake a significant change to
(35:10):
our pricing structure and we canhave a drastic effect, I think,
on the endpoint and our overallprofitability.
So I just think that's the leverthat we're pulling right now.
It's not as if we're not doingother things.
We're looking at main imageswhere we're making adjustments
there, but price is the one wecan pull quickly and what I
discovered was I can actuallypull that lever a lot harder
(35:33):
than I thought I could.
Like I had in my brain.
This is where our profitmargins are.
There's no way I can make thatsort of adjustment.
You know of that amount there's, we can't afford it.
Well, it turns out.
I'm pretty sure we can affordit and that's the lever that
we're pulling right now.
Speaker 1 (35:49):
Yeah, I think that's why it's so important to do some
forecasting with the data, andI think that's and also the
compounding effects that youtalked about, mike, that what I
would add to that because I meanobviously we do, we pull price
in both directions as a lever,both up and down, with the
clients on a regular basis isjust be careful, like that, you
(36:10):
know.
Think about it like the, youknow almost like the, the rocket
fuel or something like that.
You know, the nitros, if youwill, for your business of it
will send you in one directionreally fast.
So make sure that it's thedirection you want to go in,
because Amazon is very kind withyou.
As far as you know, it'll letyou lower your prices as quickly
(36:31):
as you want.
Problem becomes then if you wantto raise your price, you know,
back up, that can be verychallenging because there is you
got to have a reference pricemost of the time, and then you
know, if you raise it too much,your listing ends up getting
ends up not suspended.
What's the word I'm thinking of, matt?
Your buy box gets suppressed.
(36:52):
Yeah, that's what I'm thinkingof.
Your buy box gets suppressed,which means that you know it's
almost impossible at that pointyou know, to buy your product
and your listing becomes youknow you're going to see your
sales drop on that listing by90%, and so that's why you know.
Something that we really look atis if we're doing some of that
price testing, especially in youknow bigger increments of using
(37:15):
a coupon or you know withinAmazon's like promotions that
they offer, because then what itallows you to do is, okay, let
me test what does 20% look likeoff my product, and then the
added benefit to that is thatAmazon actually gives you
additional traffic because theyknow, hey, you're probably going
(37:36):
to see a bump in conversionrate and those types of things.
So, like you said, mike, thatcan be a real great lever to
pull, and using a promotionallows you to pull it in more of
a temporary way, so you canactually measure that, whereas
if you just straight up dropyour price by 30%, if those
numbers don't work out the wayyou would hope, forecasting,
trying to raise your price backup something like 30% can be a
(38:00):
pretty arduous process.
Speaker 2 (38:02):
Yeah, no, it's a really good point.
I mean, I think you know thatreference price point is really
critical.
You know that you be carefulthat you don't adjust it in the
wrong direction too quickly.
And that's exactly what we'redoing is we're running sales and
promotions right now.
You know, kind of test whatthat pricing differential looks
like.
And of course obviously thedifferential is going to be more
extreme when you run it as apromotion or a deal or a coupon
(38:27):
than it is if you just straightup change the price, because
psychologically people look atthose things differently.
But it does still give you anidea because it's going to be
close.
It's not like they'redrastically different, but they
will be different.
But it is definitely somethingto pay attention to for sure
will be different, but it but itis.
Speaker 1 (38:44):
It is definitely something to pay attention to,
for sure.
Yeah, and if you're worriedabout I mean especially if
you're worried about margins, or, you know, if you want a way to
test that out without having togive away the entire 20% I know
it's old school, but I'm stilla huge fan of coupons because
you know, say you want to offeryou know now.
So I'll say two things.
One, most of the brands we workwith are in the premium, you
know premium area.
(39:04):
They're high price products.
So generally what I do is youknow, $10 off $100 product most
of the time is going tooutperform 10%, and the reason
for that is because peopleunderstand what $10 is.
You know we're not good on asearch page and about you know
one, a second and a half offiguring out how much 10% is off
(39:24):
$100.
And normally the numbers aren'teven that round.
So that's the first thing is,think about how you're
discounting with that coupon.
And then the other thing isthat typically only about 30% of
those coupons actually getredeemed.
So let's say you have a $100product, you have $10 off
product, you have $10 off.
Well, you know, if only one inthree of those people actually
click, you know, redeem thatcoupon.
(39:49):
You're really only paying about, you know, three and a half
bucks per unit in order to offerthat.
You know, quote, unquote, $10off.
So that's another way that wereally like to test that out as
well, to see, hey, how much legsdoes pulling this price lever
have?
Speaker 3 (40:00):
Amazon recently.
By the way, in terms of coupons, we just ran a coupon for one
of our clients that it needed tobe a percentage off instead of
a dollar amount because we wereadding multiple SKUs to the
coupon and they changed that.
Amazon changed it and actuallythe percentage off coupon takes
up more space than the dollaramount coupon because it
(40:21):
actually tells you in the searchresults you will pay this
amount if you clip the coupon.
So it's changed now and youdon't have to do math.
It actually does the math foryou and it takes up a lot more
real estate under the couponthan just doing a dollar amount.
Speaker 2 (40:34):
So they have to explain.
So yeah, so you get more.
Speaker 1 (40:39):
Well, I mean, I feel, from a customer perspective
like you know, if you've got aproduct that's you know, 30, 40
bucks, you're like, okay, soit's 15% off.
You know, and you're like, okay,ready, set 15% off on $30.
I'm like, yeah, so, yeah, thatmakes a lot of sense, all right.
Well, I think this is a goodplace to kind of at least for
today wrap on what advice we'dhave for listeners when they run
(41:05):
in this situation.
Again, I think this is a greattopic because if you're selling
on Amazon long enough, you aregoing to run into this problem
where your conversion rate, yourclick-through rate or your
impressions drop significantlyand you have to figure out
either A what happened or, mike,as you brought up importantly,
hey, what am I going to do aboutit?
And sometimes, what am I goingto do about it is dramatically
(41:27):
more important than whathappened, because you may never
find exactly what happened.
So, with that, you know what iskind of one takeaway that you
would give for listeners whenthis happens to them, as they're
, you know, working on growingtheir brands on Amazon and
beyond.
Speaker 3 (41:44):
For me it's already been talked about a couple of
times First of all, don't panic.
Second of all, look at thenumbers and have a way that you
can look at the numbers in a waythat you can see the full
funnel.
You can see from impression allthe way down to conversion and
everything in between, Becausein most cases maybe not the
issue will surface itself, butat least the direction that you
(42:07):
need to go in yourtroubleshooting will definitely
surface itself, as long as youhave the data in front of you.
So, yeah, just make sure thatyou understand your numbers but
then also know how to look atyour numbers to be able to
diagnose things like this.
Speaker 2 (42:19):
Yeah, and I think, be open-minded.
I think it's easy.
We like to think asentrepreneurs, that we're
open-minded and creative.
Right, and to some degreethat's true.
I mean, probably, you know, ina lot of ways more than the
average person, but at the sametime we still get set in our
ways.
We still get kind of lockedinto certain viewpoints about
(42:39):
our business, about our brand,about strategy, about, you know,
all these things.
And so it's kind of like, I mean, a lot of people have heard
this story, you know, but thelady who's, you know, you know,
she cuts the ends off of herroast every time she cooks it
and puts it in the pan, you know.
And and finally, you know,somebody asked her well, why do
you do that?
And she was like well, my momdoes that.
That's just how you cook aroast.
And she asked her mom and hermom's like I don't know, you
(43:01):
know, my mom always did that,that's what she did, so that's
what I did.
And finally she asked hergrandma and her grandma says
well, my pan was too small, Ialways had to cut the ends off
the roast, you know.
So we have these things that wethink are true, you know, that
we think have to be done or haveto be this way, For instance,
price.
You know, like I literally waskind of in this space where we
(43:23):
don't have the room, we don'thave the margin, there's no way
we can you know we can makethose adjustments to our price.
That would be significantenough that it would kind of
overcome some of these problemsand start moving the needle in
the right direction.
As it turns out, I'm almostglad that our click-through rate
dropped because it forced me toinvestigate that issue further
and I actually feel that for ourbrand, that is the most
(43:45):
critical and most useful leverthat I think we're going to be
able to pull, because I thinkit's actually going to have
massive downstream effects onour organic ranking, you know,
on our overall ability to crosssell products and all of those
things.
So you know, I mean stay tuned,you know, for our next reports
to see whether it actually hasthe effect that I think it's
(44:06):
going to have.
But so far we're seeing drasticreductions in our tacos.
Our tacos have climbed up tolike 23%, 24% and with these
modifications to our pricepoints and we haven't even made
all the changes we actually onlywe ran a sale.
We're running a sale on all ofour products, but then we also
have, while we're running, acoupon on all of our products
(44:27):
and then we have a sale plus thecoupon on one of our products
that we actually had room tomove on.
We actually have more room tomove than that and I think we
may take advantage of it.
But even where we are right now, our tacos dropped almost
immediately from twenty fourishpercent to 14, 15 percent.
So it's a massive decline andfor us, because we're so
(44:50):
ad-based right now, that's a bigjump because it means that we
can actually keep our adsrunning and be profitable enough
and move forward with this.
So just be open-minded, Knowthat there's solutions that you
probably thought weren'tsolutions in the past.
You might need to consider themthis time around.
Speaker 1 (45:07):
Yeah, and I and I'll leave with this because I think
you know what you're touching onthere is so important, which is
, I think you know, asentrepreneurs, when we run into
that problem, first thing, youknow, the first thing we feel is
, man, this sucks and, andthat's you.
(45:27):
That's totally rational andtotally normal to feel that, and
it's okay to feel that for amoment and then say, okay, how
are we going to fix it and howare we going to be stronger on
the other end of it, becauseeach one of these issues that
you run into is an opportunityto make your brand and your
business even stronger.
And I think if you look throughthat lens of like, how do I
solve this in order to make thebusiness and the brand even
(45:51):
better, then it's a lot easierto put into that significant
amount of work that in a lot ofcases there's not the quick
fixes, because if there was, youwould do them.
To have that mindset going inwhen you put in a significant
amount of work to figure out howthe heck are we going to fix
this thing, level or ahead ofyou is so critical in these
(46:26):
types of situations.
Because you know, that's why Iwas excited to do this episode
is because I've seen it happen.
I've had it happen to myselfand brands that I've owned.
I've seen it happen to clients,you know, multiple times.
I think it happens to everybodyat some point that spends any
significant amount of time, youknow, selling on Amazon or,
quite frankly, any otherplatform, and so being able to
(46:46):
reach out to people and say,okay, what are, you know, what
are the common things that causethis, so that way I can either,
you know, fix it using those or, you know, identify that that's
not the problem just makesthings a hundred times faster
than trying to figure it outyourself.
So, yeah, if you don't havethat community, you know, find
(47:08):
some people, reach out to myselfor Mike or Matt, and we'll be
happy to plug you into a greatcommunity.
So with that, I think that's agreat place to wrap for this
text Tuesday, and we'll see younext time.
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