19 September 2022 17:55
How to save a furniture factory from buy phone number list bankruptcy and sell sofas for 12 million rubles without a showroom
Gornostaev Andrey
Technical and General Manager of MAKO
Content
Getting Started
How to INCORRECTLY advertise sofas in contextual advertising
The right approach is to work with the audience
What results have been achieved?
Scheme of agency work with the client
1 month of work - we reduce the cost of the order by 25% and increase sales by 80%
Optimized advertising for the economy segment
Results of 1 month of work
We explore the mid-price segment: what sofas are bought for 40,000 rubles
2nd month of work: testing sofas for the mid-price segment
3-4 months of work: restructuring processes in the sales department
Bringing business to maximum capacity: another 132% in sales volume
We have developed a quiz for choosing a sofa online
6th month of work: the quiz increased conversion by 38%
After a year of work: 12 million sofa sales per month
A Moscow manufacturer of inexpensive sofas contacted my agency. The factory opened about a year ago and all this time tried to establish its own sales of products, but it did not work. There were no resources to create a network of showrooms, and the company's online store did not bring in profit. Marketers came and went, and the sales situation did not improve.
The factory tried selling sofas through third-party stores, but had to significantly reduce purchase prices to compete with other manufacturers. The margin from such sales was minimal and did not cover costs.
The money invested in production was to run out in six months. The customer understood that it was necessary to create its own system of product distribution as quickly as possible and was looking for a contractor to implement this task.
Getting Started
The goals were inspiring for us - to build a business process for online sales in a short time and scale production by 2-3 times in terms of turnover and 4-5 times in terms of profit.
Customer problems
Unknown brand.
There is no network of showrooms where you can come and choose a sofa.
Low conversion from request to order - less than 20%. Sales managers did not think about the difference between different segments of the target audience and how to work with them.
The high cost of purchasing a sofa on the website is 6,635 rubles per order on average over the last 3 months.
Low average purchase receipt - 14,117 rubles. Buyers preferred the most budget models.
The sales volume through the website is about 40 sofas per month, worth 500-600 thousand.
High share of advertising expenses (SAE) in turnover – 47%.
All this made its own sales unprofitable. The factory was operating at a loss and was kept afloat only by investments, which were gradually running out.
Tasks for contextual advertising
We already had experience working with the topic of sofas in contextual advertising, and I understood what indicators we could achieve:
the order cost is less than 3,000 rubles;
DRR - within 15%;
average bill over 20,000 rubles;
Sales volume: more than 300 sofas per month.
These target guidelines inspired the customer, and we began working together.
How to INCORRECTLY advertise sofas in contextual advertising
I will first tell you about the mistakes that contextual advertising specialists make in the "couch" theme. Several years ago, we also went through these rakes.
The demand for sofas is huge: more than 1,000,000 search queries per month on Yandex alone. An inexperienced advertiser takes the standard route.
Forms a huge semantic core of several thousand key phrases, goes through all possible combinations by type of sofa, type of mechanism, size, color, material.
Combines keys with all selling add-ons: “buy”, “price”, “cost”, “store” and others.
Creates thousands of ads with unique, repeating request, titles and identical text, which contains a standard USP about a large selection, guarantees, low prices, discounts.
Launches advertising and waits until at least several conversions (leads and orders) have accumulated for each keyword in order to optimize rates and attract orders at the desired cost.
With this strategy, the advertising budget is spread thinly over a huge semantic core. It will take the average advertiser years to accumulate enough order data for at least 30% of key phrases.
And since there are no conversion statistics, it is impossible to determine the effectiveness of key phrases. Therefore, the director acts blindly and makes cosmetic edits - cleans out non-target search queries, of which there are a great many in this topic. Looks through and disables questionable sites in the YAN, of which there are also hundreds. Makes general adjustments by gender, age and devices, improves ad clickability (CTR) with ever higher discounts and catches up with users with annoying remarketing.
This is what a standard sofa-themed ad looks like:
001
As a result, we have a low average check, high order value, high DRR - all the same problems that our customer had.
In the large couch market, contextual advertising according to standard rules, or "mechanical context" as I call it, gives a very mediocre result. Especially in cases where the advertiser's brand is unknown.
The right approach is to work with the audience
The system-forming idea of the right approach, effective in many markets, is to work not with keywords and ads, but with a specific target audience. In the huge search demand, it is necessary to isolate precise segments of the target audience: find and unite people into groups with the same tasks and problems. Create precise advertisements for them that meet their needs. And bring them to specially prepared landing pages to quickly convert into an order, preventing them from going to competitors.
You need to look past the keywords and ads and see the real people behind them with their pressing needs and problems. Come up with ways to meet those needs on your website and in your sales department.
What results have been achieved?
Using this methodology, we increased sales by 14 times in six months, reduced the cost of ordering a sofa by half, increased the average bill by 51% and reduced the DRR by 3 times to 14.3%.
This brought the factory out of the red and provided funds to scale up production.
