Optimizing sales strategy and scaling budget in a medical store
The results of our work
Average monthly advertising cost
Average monthly sales value
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:
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.
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.
Summary of results
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.