In the competitive world of ecommerce, ROAS is the ultimate metric. For Shopify brands with $1M+ in annual revenue aiming for rapid, sustainable growth, mastering ROAS is essential.
Navigating the ROAS landscape, however, is far from straightforward. It's a complex journey with challenges, requiring more than casual tweaks to your marketing strategy. Recognizing this, Triple Whale offers a unique high-level perspective derived from analyzing data across more than 5,000 $1M+ Shopify brands, providing clearer insights into the mechanics of successful e-commerce strategies.
We created a full report called The ROAS Refresh that you can download to get into the full nitty-gritty, which will help you:
But in the interest of sharing all of these killer insights, we’ve compiled some recommendations for maximizing ROAS from Triple Whale partners, ecommerce experts, and thought leaders. Using our giant dataset in combination with their years of experience, the following experts are providing actionable insights in this article:
Without further ado, let’s explore how you can improve your ROAS in 2024 and beyond.
Maximizing ROAS through AOV is straightforward: The more money each customer spends per transaction, the more revenue your advertising efforts generate.
Increasing AOV does more than pad your bottom line. It’s also a smart way to offset the rising costs of customer acquisition and ad spending. And free shipping is one of the most effective ways to boost AOV.
To get the most bang for your buck when promoting your free shipping offer, tailor your ad strategy to regional AOV trends.
For instance, ShipBob found that the average consumer in Florida spends 11.7% more than the average American, while the average consumer in Illinois spends 11.4% less per order. By targeting your free shipping promotions to the right audiences, you can maximize your ROAS and avoid leaving money on the table.
Here are a few tried-and-true tactics for using free shipping to incentivize customers to spend more and increase your AOV:
The benefits of free shipping go beyond improving AOV and ROAS. But if you’re not sure how to achieve free shipping without breaking the bank, consider working with a fulfillment partner.
So go ahead, take the plunge and join the free shipping revolution. Your customers (and your ROAS) will thank you.
Brands cannot afford to focus solely on customer acquisition.
While bringing in new business is crucial, neglecting retention strategies can lead to a leaky bucket syndrome, where you’re constantly pouring resources into replacing churned customers. As ad costs continue to rise and channels become increasingly saturated, investing in your existing customer base is more important than ever.
Take BrüMate, for example. They use a mobile app to reacquire customers for free through targeted push notifications, creating a direct line of communication with their most engaged audience.
Investing in owned channels like this allows you to build relationships with your customers on your own terms, without being at the mercy of algorithm changes or rising ad costs.
So, how can you enhance your retention efforts and drive long-term growth? Start by providing exceptional value to your current customers. Go beyond the basic post-purchase follow-up and create personalized experiences that keep them coming back for more.
Here are some actionable ways to do just that:
While it’s tempting to pour all your resources into chasing new customers, don’t underestimate the power of cultivating loyalty among your existing ones.
Not all channels are created equal. Each platform has its own unique strengths, audience behaviors, and performance metrics that can make or break your campaigns.
To stay ahead of the game, savvy brands embrace a multi-channel approach that leverages the strengths of each platform at different stages of the customer journey.
By tailoring your advertising campaigns, targeting, and objectives to align with how users engage on each platform, you can capture full-funnel opportunities from awareness to conversion.
So, how can you implement this? Start by assessing the role of each channel in the purchase process and matching your budgets to user intent and behavior on those platforms.
For example, you might use TikTok’s engaging, short-form videos to drive top-of-funnel awareness, then retarget those users with Google ads to seal the deal. Or, you could adapt a Google Search campaign into a Performance Max campaign to expand your reach across multiple Google surfaces. The key is to create a seamless experience that guides customers along the path to purchase, no matter where they start their journey.
Here’s another insight into channel-specific advertising based on our data:
But adapting your strategies doesn’t stop at creative and targeting. You also need to set channel-specific objectives and allocate your budgets accordingly.
It’s all about understanding the role each channel plays and investing accordingly. But of course, even the best-laid plans need room for flexibility.
Let the data be your guide and trust the algorithms to optimize for the best results. By continuously testing and adapting your strategies based on real-time insights, you can make sure every ad dollar counts.
In the world of ecommerce, timing is everything. Just like you wouldn’t wear a fur coat in July (unless you’re a fashion icon, in which case, you do you), you shouldn’t blast out the same ad strategy all year round.
The key to maximizing your ROAS is to align your campaigns with the seasonal peaks and valleys of consumer demand and channel performance.
This strategy hinges on identifying when your audience is most likely to engage and convert. In our data analysis, this historically could include months with high consumer spending, like November, July, and August.
To implement this strategy, dive into historical sales and engagement data.
This analysis will reveal patterns in consumer behavior so you can pinpoint the months when your campaigns can achieve the highest ROAS. By directing more resources toward these peak times, you’ll better capitalize on the heightened purchase intent among your target audience.
Once you’ve identified these high-impact periods, plan major promotions or advertising pushes during these times to significantly improve your marketing outcomes.
However, creating targeted campaigns during these months involves more than just increasing ad spend. You also must craft messages and offers that resonate with the seasonal interests or needs of your audience.
Here are a few ways to make the most of your peak season spend:
From Black Friday to back-to-school, there’s no shortage of prime opportunities to capture consumer attention. Plan your ad blitzes around these critical dates to tap into the surge of purchase intent.
For instance, if you’re planning a campaign for Black Friday, start teasing your offers early in November through social media posts and email newsletters. This builds anticipation and ensures your audience is primed to take advantage of your deals when they drop.
When the ROAS is hot, it’s time to strike. Analyze previous years’ data to identify when your ads performed best in ROAS and CVR, then plan to increase your ad spending during these periods.
For example, our data shows that Google Ads campaign ROAS peaks at 6.42x and CVR jumps to 6.23% in November, so consider reallocating the budget from lower-performing months to double down on your November campaigns.
For a winter holiday season campaign, you might use festive imagery and copy that evokes warmth and family, offering special holiday bundles or gift-wrapping services as part of your promotion.
Highlight how your product fits into the holiday experience, such as suggesting your headphones as the perfect gift for the music lover in someone’s life. This approach makes your ads more relevant and engaging while tapping into the emotional aspect of holiday shopping.
By using historical data to inform your strategy and focusing your efforts on peak engagement times, you can ensure that every dollar spent on advertising works harder for your brand. Plus, leveraging high-impact months for targeted campaigns will deepen customer relationships by offering them value when they are most receptive.
In a world where third-party cookies are crumbling faster than a gluten-free biscuit, ecommerce brands need to get up close and personal with their customers — and that means embracing the power of first- and zero-party data.
By collecting first-party data directly from your customers through owned channels (like your website, app, or email) and encouraging them to voluntarily share zero-party data (such as preferences and feedback), you can build a treasure trove of accurate, relevant insights that will help you create personalized experiences that boost engagement, loyalty, and ROAS.
Another example is using these insights to improve your website and drive conversion rates.
But how do you get your hands on this precious data without coming across as invasive or annoying? The key is making it a win-win for you and your customers.
Start by identifying key touchpoints in the customer journey where you can naturally request information, like post-purchase surveys or account creation forms. But don’t just ask for data without offering something in return.
Here are a few ways to make data collection a positive experience for your customers:
Once you’ve collected all this juicy data, it’s time to put it to work.
"ROAS can act as a key metric to assess the ease of converting your various audience groups," Wilson said. "This easy-to-convert signal will give you insights on who to tailor your other marketing channels to."
Segmenting your audiences based on their preferences, behavior, and value enables you to create hyper-targeted ad campaigns and personalized product recommendations that make your customers feel seen, heard, and understood.
Focusing on audience segments with a proven track record of higher conversion rates and lifetime value can significantly uplift your advertising efforts. You’ll direct your ad spend toward users who are not just more likely to convert but also contribute to a higher AOV.
Implementing this approach requires a savvy blend of first and zero-party data collection. This means diving deep into your customer’s purchase history, engagement data, and preferences to tailor personalized messaging and offers.
Then you can create targeted campaigns that speak directly to the needs and desires of your high-value audiences. Here are some ideas for how to do this:
And the results speak for themselves: improved ROAS, higher AOV, and a loyal customer base that sees your brand understands and values their needs.
For ecommerce marketing, landing pages, and each specific ad campaign to succeed, you need to understand where each dollar can work its hardest.
This is where leveraging first-party analytics tools comes into play. These tools go beyond the basic insights ad platforms provide to paint a fuller picture of advertising performance across the customer journey.
But with great data and advertising costs (ad dollars) comes great responsibility — and a lot of spreadsheets. To make sense of all these insights, you need to roll up your sleeves and dive deep into the numbers.
Start by implementing a first-party attribution tool that supports multi-touch models, like time decay or position-based attribution. This will give you a more nuanced understanding of how each touchpoint contributes to the final conversion, rather than just giving all the credit to the last click.
Then, use media mix modeling to simulate different budget allocation scenarios based on each channel’s incremental impact. For example, you might discover that shifting some spending from Meta to Google during peak months could boost your overall ROAS by double digits. Or, you might find that TikTok on your landing page is driving a ton of assisted conversions for your Google Search campaigns, even if it doesn’t have the highest last-click ROAS.
But don’t just set it and forget it — the key to success with first-party analytics is continuous optimization. Here are a few ways to stay on top of your game:
While targeting and channel strategy are crucial for marketing success, ad creativity is a key driver in maximizing ROAS. By consistently conducting A/B tests on various elements of your ad creative—such as visuals, copy, and call-to-actions (CTAs)—you can discover which combinations achieve the highest engagement and conversions.
In terms of visual testing, experiment with different types of imagery, like product photos, lifestyle shots, or videos, to determine which best captures your audience's attention. For copy, test various headlines and body text to see what messaging resonates.
CTA optimization involves trying different phrases, colors, and placements to encourage more user action. By refining each aspect, you enhance your ad’s effectiveness and overall return on investment.
An often overlooked factor in improving ROAS is the performance of your website. A slow or poorly optimized site can lead to visitors leaving quickly, translating to wasted ad spend.
First, focus on Page Load Speed; ensure your site loads in under 3 seconds to minimize visitor drop-off rates. Next, prioritize Mobile Optimization. With mobile traffic on the rise, your website should be responsive and provide a seamless experience on smaller screens.
Lastly, employ Conversion Rate Optimization (CRO) techniques; use heatmaps and analytics to detect and eliminate friction points in your checkout process to increase conversion rates. By optimizing these areas, you can enhance the user experience, reduce bounce rates, and maximize the efficiency of your ad budget.
Dynamic pricing is a powerful strategy for enhancing your return on ad spend (ROAS), as it allows you to adjust prices in real time according to customer behavior, current market demand, and competitor pricing. By using dynamic pricing tools, you can stay competitive by monitoring your rivals and maintaining attractive pricing strategies.
Additionally, implementing flash sales and limited-time offers can create a sense of urgency, prompting potential customers to make quicker purchasing decisions. This flexibility not only helps align your sales strategies with market fluctuations but also maximizes revenue and profitability by enticing budget-conscious consumers and increasing overall conversion rates.
In the digital buying environment, consumers find recommendations from fellow shoppers to be an influential factor in their purchasing decisions. User-generated content (UGC) like reviews, testimonials, and social media posts can significantly enhance brand credibility, driving higher conversion rates.
To capitalize on this trust, integrating genuine customer reviews prominently on product pages can effectively build trust and reassure potential buyers of product quality. Incorporating social proof in your advertising by featuring UGC allows potential customers to see real experiences and results from actual users, which boosts authenticity and reliability.
Additionally, launching UGC campaigns encourages more customer engagement by inviting satisfied customers to share their experiences.
Offering incentives can further motivate participation, subsequently expanding brand reach and attracting new users. By strategically utilizing UGC, brands can create a credible and inviting image that resonates with the current and potential customer base, ultimately fostering loyalty and boosting sales.
AI and machine learning are revolutionizing advertising by automating and optimizing campaign management to enhance efficiency and results. With predictive targeting, AI leverages historical data to identify and reach audiences with the highest conversion potential, ensuring that your ads are shown to the right people.
Machine learning algorithms can further refine your efforts by dynamically adjusting budget allocations in real-time across channels, maximizing return on ad spend by prioritizing high-performing platforms.
Additionally, AI can enhance creative optimization by analyzing ad performance data and suggesting which elements resonate best with specific audience segments. By automating these processes, AI reduces the time and effort required for campaign management, allowing marketers to focus on strategy and innovation. Ultimately, the integration of AI and machine learning into advertising strategies leads to more precise targeting, improved budget utilization, and higher overall campaign effectiveness.
Regularly gathering feedback from your customers is crucial for fine-tuning your business operations and enhancing customer satisfaction. One effective way to obtain this feedback is through post-purchase surveys, which can illuminate aspects of the shopping experience that are either delightful or in need of improvement.
Encouraging customers to leave product reviews and ratings not only provides insights to improve your offerings but also helps tailor your marketing strategy to better meet customer needs and preferences.
Additionally, seeking feedback on your advertisements allows you to ensure they are resonant and relevant, thereby preventing potential ad fatigue among your audience. By incorporating these practices, businesses can make informed decisions, fostering a more engaging and personalized customer experience, ultimately leading to increased brand loyalty and higher conversion rates. Keeping a finger on the pulse of customer opinion is essential for continuous growth and success.
Expanding into international markets is a strategic move that can significantly enhance your Return on Ad Spend (ROAS) by tapping into new customer bases. However, achieving success abroad involves more than merely translating your content into the local language.
Localized ad creatives are essential; this means customizing your messaging, imagery, and promotional strategies to resonate with local cultures, traditions, and current trends. By aligning your marketing with regional sensibilities, you build authenticity and connection with new audiences, fostering greater engagement and conversions.
Additionally, offering localized payment options is crucial in ensuring a seamless shopping experience. Every market has its preferred payment methods, and by supporting these options, you remove a significant barrier to purchase. Whether it's popular digital wallets, local credit cards, or other payment solutions, accommodating customer preferences can lead to increased trust and higher conversion rates.
Finally, efficient international shipping solutions are vital. Partner with dependable global shipping providers to ensure your logistics are streamlined and cost-effective. Clear communication regarding delivery times and shipping costs also helps manage customer expectations and reduces cart abandonment. By addressing these aspects, your brand can successfully expand internationally and optimize ROAS across diverse markets.
By embracing the power of first-party analytics, you can finally see the full picture of your customer journey and make data-driven decisions that maximize your ROAS. No more flying blind or relying on gut instincts — just cold, hard facts and a whole lot of pie charts.
With platforms such as Triple Whale, brands can review channel efficiency with a fine-tooth comb, adjusting their strategies in real time to capitalize on what’s working and cut back on what’s not.
To put this data into action, check out our full report called The ROAS Refresh, sign up for Trends to get access to real time data, or explore our benchmarks board in the next generation of Triple Whale.
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