Optimizing sales strategy and scaling budget in a medical store
The results of our work
Average monthly advertising cost
Average monthly sales value
Average ROAS
Scale the marketing budget, preserving or increasing the ROAS (Return on Advertising Spend) value
This is a key challenge, but also an opportunity for companies looking to optimize advertising efforts.
What actions should be taken:
Data analysis and optimization
The beginning of scaling should be based on a thorough analysis of current data. Find out which advertising channels, target audiences, and content types yield the best ROAS results and consider increasing your investment in these most effective areas. Regular testing, measuring results and adjusting strategies are key to maintaining and increasing ROAS.
Conversion funnel optimization
Scaling ROAS is not just about attracting traffic, but also about optimizing the entire sales process. By conducting A/B tests on product pages, landing pages or email content, you can identify which elements convince customers to make a purchase, resulting in higher ROAS.
Use of technology for automation and targeting
AI and machine learning technologies can help target audiences precisely, leading to better ROAS results.
Vertical and horizontal scaling: Vertical scaling involves increasing budgets in already proven and effective channels, while horizontal scaling requires testing new markets, demographics or products. Both approaches can help increase ROAS, but require careful analysis and strategy.
Development of customer relationships and loyalty strategies
Investing in relationships with existing customers is often more cost-effective than acquiring new ones. Loyalty programs, personalization of offers, or effective content marketing strategies can increase customer lifetime value (LTV), which positively impacts ROAS.
Remember that when scaling a budget, a data-driven approach, patience and a willingness to experiment are key. Scaling ROAS is a process that requires continuous optimization and strategy adjustment.
What difficulties do we face in the industry?
Medical stores, like many other high-tech and healthcare sectors, face a number of challenges.
Regulation and compliance: The healthcare industry is one of the most regulated, which means that companies must constantly adapt to changing regulations, standards and guidelines, both nationally and internationally. Maintaining compliance with FDA, CE and other regulatory bodies can be time-consuming and costly, especially in the context of new product launches.
Marketing and sales: Reaching the right target audience, including medical professionals, health institutions and patients, requires precisely developed marketing and sales strategies, which is difficult in an environment of high competition and rapid change.
Understanding and responding effectively to these challenges is critical to long-term success and growth.
Defining the strategy
- Market and Competitive Analysis: Provide preliminary research to understand market dynamics, identify major competitors, their pricing strategies, product offerings.
- Keyword Analysis and SEO Optimization: Identify categories that require sub-page optimization to maximize the conversion rate after redirecting a potential customer.
Final strategy assumptions
At the beginning of running the campaign, we had a well-defined target audience, and the landing pages to which consumers were directed were carefully prepared in advance. Improving the overall structure of the site and making it easier to navigate also had a significant impact on the overall process.
In pursuit of long-term sales growth, in addition to standard campaigns focused on immediate sales, we have placed great emphasis on brand development.
Monthly campaign cost
Having a measure of confidence from the client, we were able to scale the budget subject to basic profitability goals.
Budgeting and optimization
- Campaign Optimization:
A/B testing – systematically testing different versions of ads, landing pages, headlines, calls to action (CTAs), etc., to identify which versions yield the best results.Segmentation Adjustment: Analyzing and adjusting campaign segmentation (e.g., demographics, location, device) based on results to more precisely reach the target audience. - Cost Control:
Expense Tracking – regular monitoring of campaign expenses against budget to avoid budget overruns.Cost Optimization:
Implement strategies to reduce costs, such as reducing CPC by improving ad quality, or reducing CPA by optimizing landing pages for conversions. - Performance Analysis and Budget Adjustment:
Evaluate ROAS and ROI – Regularly measure return on advertising spend (ROAS) and return on investment (ROI) to assess campaign effectiveness.Review and Adjust Budget:
Review campaign performance against spend and adjust budget or bidding strategies in response to this data to maximize cost effectiveness.
Specific figures
In the course of our cooperation, we gradually escalated the budget, starting from an initial value of about 3 thousand zloty per month, up to the level of 17-18 thousand zloty per month.
Value of sales generated from advertising
During the period of our cooperation, we managed to generate a turnover of PLN 1.5 million, which translates into an average monthly value of PLN 64,166.
Results
Successive increases in conversion value, going hand in hand with costs, eventually resulted in impressive bottom line results:
- 320,000. PLN – the total cost of the two-year campaign,
- PLN 1.54 million – the value of sales generated through advertising,
- 482% – average ROAS (return on ad spending) over 24 months,
- 631% – increase in customer inquiries for wholesale orders (carried out outside the online store),
- 76% – conversion rate increase.
These results underscore the effectiveness of our advertising efforts and our strategic approach to investing in campaigns, which has contributed to a significant increase in both interest and real sales results.
Does the industry matter?
Of course, each industry and store has its own unique characteristics, which is crucial when evaluating the profitability of a campaign, where it is necessary to take into account the margin on individual products.
In situations where products have a low unit price but high margins, it becomes crucial to focus on strategies that increase the value of the average shopping cart and the number of transactions. These activities may include up-selling, cross-selling or special offers to encourage people to buy more products or use additional services.
An additional way to increase sales potential is to build brand awareness and trust among potential customers. This can be realized through content marketing activities, engaging the community on social media, maintaining an industry blog, or collecting and publishing product reviews and testimonials. An increase in trust and brand recognition often translates into an increase in conversion rates, which is key to maintaining continued sales growth. Such a comprehensive strategy helps build long-term relationships with customers and encourages them to return and make more purchases.
Does an increase in CPC mean a decrease in ROAS?
Cost per click (CPC) is the result of a number of different factors at work in an ecosystem of ad campaigns such as Google Ads. Here are some key points:
- Ad and Landing Page Quality (Quality Score): Google evaluates the quality of an ad and landing page by awarding a so-called “Quality Score. Quality Score. An ad with a higher score is considered more relevant and useful to the user, which can lower the CPC.
- Competition: The number of advertisers bidding on the same keyword directly affects competitiveness, which can increase the cost per click. The strength of the competition and their determination to take a high position also matters.
- Maximum Bid: The maximum amount you are willing to pay per click has a direct impact on CPC. Strategically determining this amount, taking into account budget and potential conversion value, is key.
- Targeting and Segmentation: CPC can vary depending on the precision of ad targeting. More specific targeting, such as to specific demographic groups, locations or devices, can affect costs.
Thus, if the cost of our click increases due to narrowing the target group to a more precise one, we may find that the ROAS (return on ad spend) will increase proportionately more than the cost per click. This is advantageous because it means that despite the higher cost-per-click, the return on investment for advertising is much higher. This underscores the importance of strategic targeting and optimization of campaigns in terms of both costs and potential profits.
How to scale the budget without reducing the effectiveness?
A key aspect in managing long-term projects is the realization that experimentation is not only allowed, but even desirable. Stagnant performance is often due to a lack of innovation and fear of trying new strategies. If your results aren’t improving, and you aren’t looking for new solutions, what will you do when results suddenly drop? The answer lies in continued diversification.
Diversification of the customer portfolio and sourcing is essential to ensure the sustainability and security of the project. In practice, this means exploring and testing different marketing channels, advertising tactics and sales strategies. In the event that one channel stops producing the expected results, other channels can continue to generate revenue, preventing a total loss.
It is equally important to conduct research and experiments. A/B testing, user testing, market research and other methods can provide valuable information to help optimize existing strategies and identify new opportunities. Accepting the risks associated with innovation and experimentation can ultimately pay significant dividends, opening up new avenues for growth and success.
Remember that flexibility, willingness to learn and adapt, and the courage to take legitimate risks are key in a rapidly changing business world. Constantly monitor market changes, analyze data, and be ready to react quickly to keep your projects one step ahead of the competition.