- Patrick Muir
- On April 15, 2015
- 0 Comments
This past week I changed promotional strategies to sell more Soap Molds from a “Depth” strategy to a “Frequency” strategy. Here’s a quick explanation of what I mean by “Frequency” and “Depth:”
- Frequency – How frequently you promote your product
- Depth – How deep of a discount you provide on your product
I used Snagshout – a “Depth” strategy – to giveaway a product in exchange for a review. In less than a week my products had full five star, positive reviews and more total reviews than many competitive products. After turning off Snagshout my sales rank dropped as competitors lowered prices. I fell off of page one. For a few days I tried playing with my pricing, but most of my competitors are Chinese companies that compete strictly with “Depth” promo and will continue to lower their prices.
But with so many positive reviews generated using Snagshout it opened up the second lever of promotion – frequency. I raised my prices considerably to increase my margin. For example, I took a 10-Pack of 100% Handmade Soap Molds from $14.98 to $19.98. I had no idea what this would do. The price is almost double to what a competitor sells a 10-pack. But I needed the increase margin because I now have to pay for more promotions so my product appears on page one under certain keywords.
But my hypothesis was people don’t just buy on price – especially on Amazon. I know consumers also read reviews and trust them. Snagshout helped me get quality reviews – including several that took the time to take pictures after using my Soap Molds to make soap.
Reviews are important to build trust in a brand, especially with products consumers don’t know about. Also, the star reviews show up in your advertisement.
I created a promo campaign–offering to pay 40 cents to appear on page 1–and increased my daily budget. My products owned the sponsored portions of page 1 of keywords such as “Soap Molds.” Sales started to come almost immediately at margins above 40%. This past week I sold $385.42 of Soap Molds at the 40% plus profit margins – even with promotions.
Long-term it would great for my products to rank higher so I could lower my promotional budget. But for now, these SKUs are making plenty of profit, even paying for ads. I plan on adding several more Soap Mold SKUs and applying the same strategy.