Why Online Consumer Packaged Goods Need to Utilize Amazon in their Marketing Strategies

If by now, you’re still in the league of people saying NO to Amazon or still think you need enough time to ponder on why you should choose Amazon as your next sales tool then, this post is for you! Believe me, when I tell you that the saying “if you can’t beat them, you join them” is no fluke and with that being the major statement Amazon has been sending across all over the globe, I think consumer packaged goods brands (CPG) need to rethink their choice of marketing platform. Can CPG companies survive without Amazon? Of course! Opting for Amazon is an option but with where things are headed, consumer packaged products will have no choice someday if they want to erase their weak survival. Aside from a promising future prospect, other reasons why CPG companies should make Amazon their choice of e-commerce platform includes:

1. Audience Size

This remains Amazon’s major selling point and come to think of it, no other marketing platform can be compared to Amazon in terms of audience size. If it were only a function of size, it wouldn’t mean much but aside being huge, these customers are totally addressable and amidst them resides a pool of already established sellers. About a year ago, Erik Fairleigh; an Amazon spokesman disclosed the fact that Amazon had more than 200 million sellers and made global sales of over 200 billion. Worthy of note is the fact that most sales were made by individual sellers who made Amazon their choice of marketing platform. I’m sure by now you know what you’ve missed. Do you want to miss it again?

2. Own Ad Products

In contrast to other standalone e-commerce platforms, Amazon’s algorithm allows for unsolicited referrals. The last time you were on Amazon, I know you saw a list of recommended products and you checked it out. Now imagine over 100 people checking out the same thing in a matter of microseconds, how many consumers do you think will purchase via this recommended page? Never forget the fact that their new interest may not be the chief purpose of visiting the marketing platform but the redirected consumers may change your brand’s potential for good!

3. Better Fulfilment

Heard of Amazon FBA as part of an Amazon marketing strategy? If YES, then you know by now this is one of the sweetest marketing features you can get on any e-commerce platform. Amazon FBA is a feature that makes sellers do less while earning their normal profits. With Amazon FBA, selling online is where your work ends! Amazon takes full responsibility for packaging the product and delivery. If any issue should ensue, its customer service handles it for you. What more can you ask for?

4. Unique Customer Service

Like I mentioned in point 3, the back end customer support Amazon offers is second to none. It is this stellar department designed to prevent, solve and make customers delighted. I would say that this is the backbone of their business and why users trust them so much. With over 16 supported languages from 130 locations all around the world, I dare you to tell me which other customer services can boast of this level of uniqueness.

5. CPG Value

If you think a trademark like Nike doesn’t understand what it is doing by merging with Amazon, then, I think it is high time you start guessing right! With reviews showing an estimated 59% increase based on direct sales between 2016-2017, consumer packaged goods have become assets of inestimable value. If you form an alliance now, a jaw dropping result is guaranteed!

6. King of E-commerce

Amazon doesn’t just own 49% of total e-commerce, it is accountable for more than half of online marketing transactions. Thus, it is a moving train you want to be a part of, no doubt!

Team-Up + Wrap-Up

Don’t take my word for it, do your homework and find out more reasons why Amazon remains your best bet when it comes to CPG sales and marketing. We at Good Monster know that this can be a daunting task. Finding a company to partner with that understands your brand and that can effectively help you get started on this journey is the toughest part. It is important to have a dedicated team in-house or out-of-house to take this task on. If this isn’t done correctly you can miss a lot of the small nuances involved and bottleneck your productivity on the Amazon platform. If you need some more information on beginning steps, feel free to reach out and we will set you on a profitable path.

On a parting note, I would like to say there is no bad time to make the right choice, however, the sooner the more cash flow.

We Really Need to Get Over Our Instagram Follower Obsession

Good Monster gets approached every week from brands that want to increase their number of followers on Instagram. Many are willing to shell out tens of thousands of dollars for the chance to get tens of thousands of Instagram followers with little regard to what the impact of an increased following on Instagram actually does for their brands.

To many of them, breaking a certain threshold is a rite of passage for their brands. It signifies popularity, and so getting those followers IS the end goal.

However, this way of thinking couldn’t be further from the truth.

Having 200,000 followers on Instagram doesn’t drive actual business results on its own.

Many brands correlate “followers” with results on social media. While revenue is the obvious end goal for the majority of brands, marketing teams often get caught up in the detour of what they think will happen if they get more followers.

It’s crazy. Revenue could be up and business is great; but if they don’t have a magical number of Instagram followers, it’s the end of the world.

It’s totally a vanity thing. It’s about competition and proving to the masses that “people like us.” Marketing executives, who aren’t familiar with social media, get caught up in the hype and are worried that if people come to their brands’ Instagram pages and see that they only have 5,000 followers, they won’t take them seriously.

This is simply not true, unless the people visiting are other marketing executives.

I’m fully aware that marketing executives need to prove their worth. Increasing revenue is harder, more complicated and takes more time, but increasing followers is an easier, more transparent route to take to be able to say, “look, we are growing.”

I get it, it’s about getting results; but spending money on gaining followers should not be a priority for any brand.

We’ve had countless brands come to us that had paid tens of thousands of dollars to gain Instagram followers, but when they got them, they were perplexed as to why revenue was down.

Well, for those of you in that boat, here is an explanation to the paradox:

Let’s say, you are trying to gain market share against a competitor. They currently have 5,000 really engaged Instagram followers. Each post is deep and gets 50 comments and 500 likes. You only have 1,500 and have decent engagement–maybe 10-20 comments and 200 likes.

You want to beat them. So, you hire an agency to increase your followers. They set you up with a software program that automatically follows and unfollows relevant people to try to get them to follow you back. They also get you involved in several multi-brand giveaways to trade and share followers with other brands.

After three months and thousands of dollars, you’re up to 15,000 followers. However, you can’t figure out why your engagement isn’t any better than it was when you had 1,500 followers.

The moral of the story: you can’t buy followers and expect them to love you. It just doesn’t work that way.

5,000 engaged followers will beat 200,000 unengaged followers any day of the week.

This goes for Instagram, Facebook, YouTube, email subscribers, website visitors, and virtually every other platform that can accumulate a community.

On the flip side, if a brand’s following grows organically, there’s a much better chance that this audience is engaged enough to eventually make a purchase. But the race to grow followers has caused many brands to try to take the quick and easy route to growing a community. This often mean some version of “buying” their followers.

Buying followers can be done in a variety of different ways: it could be in the form of literally buying followers from a click-farm, or it could mean doing a multi brand giveaway in which you are paying in the form of product giveaways to gain exposure. The latter is extremely common with Instagram’s popularity, and it’s definitely something for brands to think through before agreeing to participate.

Consumers are becoming so desensitized to brands’ “sales pitches” that even if they enter these giveaways or opt-in to these lists–without a story to back up the engagement–they will be gone quicker than a mouse click, or more appropriately, a fingertip click.

The ultimate takeaway is that you should look at followers like people in the room–if they aren’t paying attention to you, they won’t be impacted by you. 1,000 people who aren’t paying attention to you won’t bring you very much value. However, 200 people who hang on your every word are invaluable.

When it comes to Instagram followers, it’s quality, not quantity that counts.

You might think that with all of the headlines and ads for ecommerce, online marketplaces would be dwarfing brick and mortar stores exponentially, however, that’s not the case… yet.  

The reality is that ecommerce is still in its infancy. According to the first quarterly 2017 Census Report, E Commerce still only contributes to about 8.5% of total retail sales in the United States, which means that about 91.5% of sales still occur when people physically walk through the doors of a store.

That being said, those numbers are shifting balances very quickly. Online retail is becoming more and more accepted by consumers and, therefore, retailers are shifting gears toward optimizing their presences online.

People are flocking to, and even preferring to purchase from online retailers like Amazon.com and jet.com. Big retailers like Walmart and Target are pushing people to order online as well. The shift to online shopping is clearly evident at scale. Grocery shopping is easier than ever for people in metropolitan areas like New York City and Chicago as well as for those in rural areas and food deserts. Consumers can shop online through websites like Thrivemarket.com and more regional grocery stores, like Wegmans, are offering the option to order online and pick up when it’s convenient for the consumer.

The same transition that is occurring in grocery stores is having a similar impact on the matter at hand, consumer goods. As technology improves, consumers value their time more than ever. Any task that requires people to carve out just a few extra minutes is considered a waste of time. As a result, our buying habits are evolving to become more accepting of platforms and companies that can help us save time and be more efficient, like Uber and Airbnb.

This transition is causing online buying to increase at a rapid rate. However, a word of advice for brands and their websites, don’t expect to see online conversion rates soar through the roof. There is another variable to consider.

If you look up what the standard, or average conversion rate is for a CPG company, you’ll likely see that this value will range between 1% and 3%. This means that anywhere from 1% to 3% of the people that visit your website will end up making a purchase at that time.

E commerce conversion rates are beginning to dwindle despite the obvious shift to online shopping. This might come as a surprise to you as notice that your online sales and revenue continue to go up, up, and up. What could possibly explain this paradox?

Amazon prime.

Amazon, as well as a growing number of other online retailers, are making it easier than ever to buy products online. With trends like one click buying and subscription options, people can get things quicker and often cheaper than through brand websites themselves. Amazon Prime offers free two-day shipping, and other retailers reward their customers for signing up for subscriptions with alternative options, promotions and discounts.

The takeaway: Consumers are becoming more and more comfortable with buying the majority of their products online. This level of comfort leads people to click around until they find the easiest or cheapest option before they buy.

Notice the order I went in: “the easiest” THEN “the cheapest”.

As previously stated, opportunity cost of time is not a term used just for business anymore. Consumers value their time more than ever, and are willing to pay extra dollars in order to save time. Just look at Uber or Lyft, look at Airbnb or social selling app, Letgo. We don’t just want fast, we want now.

My point is, if conversation rates on your website are going down, but your sales are going up, don’t freak; Amazon is bigger than you.

But, and this is a big “but”: if conversion rates are going down, and you are not set up somewhere like Amazon, then you better start freaking out.

If you are looking for a specific number, Facebook ads have an average ROI of 400%, at least they do with our clients; but that number is a complete situational statistic and if you are thinking about basing your marketing off of this, then for Pete’s sake, please read on:

There’s no better feeling in business than when you have leverage. It could be leverage on a system that makes things move smoothly. It could be leverage against your competition that gives you a seemingly unfair advantage. It could even be leverage on your customers that allows you to improve their lives in ways that are better and easier than ever.

Leverage is what catapults companies forward with great momentum.

In marketing, certain platforms give a brand more leverage than others, but this fluctuates frequently as new platforms pop up and others make changes.

A platform that you all know very well that has been consistently creating amazing leverage for brands over the past 10 years is Facebook. Its engaged community is larger than any other current platform, including television and radio. And while the sheer numbers of people that use the platform regularly worldwide are staggering [2 billion], the real value is in the reach of its advertising platform.

10 years ago, businesses were marketing based on more traditional metrics like gender and income profile. Today, Facebook allows brands to target people based on what their favorite foods are and if they eat out a lot, or if they have a pet bird and just moved into town. It’s insanely specific. Any business owner or marketer can post a photo with his or her phone on Facebook and make sure that the exact people that they want to see it, do.

This is amazing leverage. But just because the targeting is awesome, and you post something on Facebook, doesn’t mean that it will bring you results. Remember, every business has access to this platform, so your unfair advantage isn’t so unfair without one key ingredient: creativity.

A few years ago, the early adopters of Facebook ads did have an unfair advantage because their competitors probably had not jumped on board yet. But now businesses all over the world are running Facebook ads to their potential customers. The ones that are generating huge amounts of revenue are not the ones simply posting a picture of their service or product in a Facebook ad. The ones that are crushing it are the ones that are exploring the depths of their creativity and testing various forms of it against multiple audiences to see what people respond to the best. The ones that are crushing it are investing in video storytelling and utilizing the amazing segmentation to funnel various demographics of consumers and leads back to their websites or through the doors of retail locations.

The performance of your Facebook ads can be in the gutter if your ads are boring and lack creativity to connect with your prospects and potential customers. On the flip side, it could be skyrocketing if you know your customer, are willing to test various creative, and look at the data deeply enough to make decisions on how to improve.

So, back to the question at hand: what is the ROI of a Facebook ad?

The answer isn’t as cookie-cutter as you would like because of the creativity variable; but that’s not the only reason. There is also a little factor known as the “comeback principle”. This is the theory (backed by data collected over the past few years) that people see an ad on Facebook or other platforms, then they go to the search engines and other platforms to research the brands in the ad. They want to read reviews, look at the competitors and shop lower prices. People are very comfortable shopping on the internet, in fact it’s ingrained in the younger population’s blood – they grew up like this.

Once they research the product or service and what other options are out there, they either come back to make a purchase, or they do not. That’s not to say that they never do. We’ve seen purchases made by people who initially came through a Facebook ad visit a website 100+ times before they make a single purchase; but we’ve also seen people comeback once and make a purchase.

The takeaway is that no one has any idea what is going on in an individual consumer’s life that will make him or her purchase right now, or in 6 months. Sure, we can get an idea from historical data, but we never truly know.

For this reason, the ROI of a Facebook ad will be relatively low if you are looking at immediate sales, but extremely high if you are looking at overall revenue growth.  

Here’s an example to paint a picture and round out this article:

We ran a Facebook ad campaign that promoted a new product for one of our clients. We spent about a thousand dollars in ad spend over a month, and got about $2,000 in immediate sales from those ads. If you looked at this you would probably say that’s not very good; but when you look at the overall sales for that product across all platforms during that month and the month after, we knocked it out of the park. Website revenue of $9,000 looks a lot better, right?

Now of course, there were other factors at work here. We also had email opt-ins for people to get the product at a discounted price, we ran a couple of email campaigns for the product, and we also ran Facebook retargeting (still Facebook ads) to keep people engaged and reminded. All of this helped to increase the ROI of the ads.

The takeaway here is that while Facebook is a powerful platform, it won’t do squat for your business if you don’t have the creativity and understanding of the data off of which to base your decisions.

It’s like owning a Ferrari but not knowing how to drive. It’s going to be really expensive and not very enjoyable when you crash it into a tree.