How to Identify and Test Winning Products Before start scaling brand?
All the early-stage D2C brands are running ads on Facebook, Google, YouTube & amazon. 90% are failing to generate the Profitable ROAS.
Do you know the reasons?
There are two main possible reasons for failing in performance marketing.
- You don’t have product market fit. When you don’t have it, how much money you spend doesn’t matter. you are not going to get the desired results you want.
- You have product market fit. But you are not finding the winning product at the right time to scale via ads.
You are not going to learn about product-market fit here, but you will learn how to find winning products to scale with e-commerce marketing at the right time. Additionally, you can learn about profit-market fit in my podcast, where I discuss it in detail.
In this article, I’m sharing the secrets & strategies which we use to find the best products to scale & manage 1Cr ad spend every month.
What happens when you promote the wrong products at the wrong time?
When we took one of the clients who sells switch plates ads management, we realized the ROAS around 2X & client. The client wanted to achieve at least 3X to make the profit they desired.
This brand has 100+ Products. But only the top 25 products are generating results. remaining campaigns are generating ROAS less than 2X.
Then we turned off the non-performing products and started running campaigns for only the best-performing products. As a result, the ROAS increased from 2X to 2.7X.
Imagine, we have not done much on the advertising campaigns, still It has improved the Return on ad spend.
Let me share one example:
For another client who has 250+ products who focus on the Natural & Organic segment, During Apr month we launched a marketing campaign for the food category. We were spending 30K+ budget on ads. But still, the overall performance dropped by 22%.
I hope now you can able to imagine what happens when you choose the right product at the wrong time.
This is the main reason you need to figure out which products are in demand before you start scaling.
RIGHT PRODUCT + RIGHT TIME
When we took one of the clients who sells switch plates ads management, we realized the ROAS around 2X & client. The client wanted to achieve at least 3X to make the profit they desired.
This brand has 100+ Products. But only the top 25 products are generating results. remaining campaigns are generating ROAS less than 2X.
When we took one of the clients who sells switch plates ads management, we realized the ROAS around 2X & client. The client wanted to achieve at least 3X to make the profit they desired.
This brand has 100+ Products. But only the top 25 products are generating results. remaining campaigns are generating ROAS less than 2X.
Whether you have a Unique Product or perfect product positioning doesn’t matter. All you need is Right product at the right time.
If you can remember, most of the brands are bullish before Diwali & Christmas because everyone knows that people are going to spend a lot to buy for the festival celebration.
Just think about the remaining 10 months, there are many festivals. But people’s buying behavior is low.
Do you agree?
Here’s another surprising data. In India, most of the people watch IPL every year. Also, most of the brands spend huge money on showing ads during IPL.
When I asked for pricing to show ads during the IPL match on JIO Cinema. We need a minimum 2 Lakh money to show the ads in a single match.
For one of our brands, sales dropped by 50% from 4 PM – 11 PM. Even on some days when the Chennai vs RCB match happened, the sales dropped by almost 80-90%.
We have been monitoring the same trend during APR & MAY for the last 3 years. Because the people’s attention is focused on the cricket matches & they are not getting attention to our ads.
If you noticed, the brands who spend more money on IPL, they are losing after 1 or 2 years. Maybe the same attention issue is happening on a bigger level & brands are burning money. Here are the brands which failed after sponsoring on IPL Vivo, Tata safari, BYJU’S etc.,
Please let me know your thoughts on the comment about this.
2 Methods to Identify the Winning Products which has Demand in the market
1. Look at your past trend in the last 3 years.
To find the right product & time, you can look at your last 3 years’ sales data. Compare this month with the last 3 years.
Here is a example of sales data (Numbers are not accurate)
If you have seen the above data, I will check the sales for the May month in the last 3 years. The sales were great in 2022 & 2023. Only 2021 was low compared to previous months in the same year.
Next step: Analyze the Products that moved well during the May month in the last 3 years. Here is the best selling product list from shopify analytics.
Please note: the data must be a minimum 3 years. if it is less than 3 years, data may not be accurate.
2. Run Campaigns & see which products are working for you.
This will be the way to go if you don’t have data for the last 3 years. Before you learn how to do that, here is a recent example from a client who just started with paid ads & who wants to scale.
The brand has 10+ products, we decided to test only 4 products & we figured out 2 products which we can scale with profitable ROAS.
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SR Winning
Jun 10, 2024 • 3:42
Once you know the product is moving, Keep scaling advertising. it is more likely to perform. At the same time, you need to keep an eye on the people’s behavior & cultural moments. They may keep changing based on the time & situation.
When product demand in the market & Advertising time is correct, you will win the ad campaigns with High ROAS.
When product demand is low in the market & Advertising time is not right, you will end up with ad campaigns with low ROAS.