Question

I have a huge meeting tomorrow with a company that does over 4m a year in profit. It’s an e-commerce store and I wanted your opinions on ROAS. How would you guarantee a good (or an exact) ROAS for an e-commerce store?  

Answer 1

Proof but if you dont have proof then tell them that you will do this much in this amount of time and if you dont then you will pay them back and walk away.  

Comments

@shanney743 fuck no

Answer 2

That word guarantee for a service based business spell disaster

Answer 3

If people want that in the contract I tell them that we need to run ads for 2 months on trial to get benchmarks. Then, after that testing period we have a much better idea about goal ROASs to put in a contract.  

Comments

@campbellite True, big companies are doing the same.  

Answer 4

You cant guarantee anything in marketing. Your best pitch should involve the word potentially and having the potential to make certain profits

Answer 5

Gain your info by asking for data to study if they want that. There is no chance a logical explanation can be given in advance of reviewing the existing data. Off the top of your head can you guarantee me how long the sun will continue to burn, I mean just a rough estimate? [ their is no difference ]

Answer 6

I wouldn't guarantee a ROAS. What is the current ROAS (aggregate including prospecting campaigns through conversion)? What is their breakeven ROAS? I'd look at those things first and have that discussion. Offer an audit of their metrics and their ad account to determine what opportunities exist. Some of our clients have all kinds of structural stuff they need and we know we're going to make a big impact. Others are pretty dialed-in and it's going to come down to a lot of testing and creative development

Answer 7

Any service provider that agrees a performance KPI (that triggers their payment) is a mug. ROAS is affected by multiple other things than your ability to run campaigns: delivery proposition, CRO, UX, stock levels, this list goes on. You can't be commercially on the hook for something this isn't entirely within your control.  

Answer 8

@congressional call or text me tomorrow. I have a lot of insight around this with the company I’m with @sociallyin —-7692579183

Comments

How can you have insights if no one knows which company or what industry we're talking about?!  

---

@tacet exactly. He’s lying.  

Answer 9

Well done for getting the chance to talk to someone with $4 million/yr profit.  

Answer 10

Nobody can guarantee this , nobody can predict economies over 12 months let also how much business volume will be ! If you agree your gonna face penalties and Bill's for that which nobody can control Cost per lead is the nearest when based on good data as long as you also control what doesn't get spent as well as does .  

Answer 11

I would not just discuss RoaS but go a step further. Discuss brand, loyalty and bring up the topic of Cost Per Acquisition and Life Time Value. If they’re selling on sites like Amazon and eBay, they’re already use to giving 15% in marketplace fees.  

Answer 12

The only thing you ‘might’ be able to guarantee is CPM, CPC, CTR. CR, ROAS and ROI are not based on marketing alone.  

Comments

Thi @congressional. The best way to guarantee anything though is to get a great contractor with industry expertise. Have you found one already?  

---

@headway I have not, any recommendations?  

Answer 13

If they’re an ecom company especially at that size they should have a good idea of the LTV of their customers. Screw ROAS. Focus on CAC and setting a goal for the acquisition cost and increasing LTV by either working alongside whoever does their email marketing or getting approved to also run a campaign against people who have already purchased. You’ll obviously need data from them to set these goals and if they don’t have it then fall back on what everyone else said, trail period for benchmarking.  

Answer 14

Lets be straight up here for a second, the discourse is really about expectations and how you as an agency will use your tools to the best of your ability to come as close as possible to achieving them. also they need to understand your expectations. So in saying that you need to explain to them the secret sauce you use to achieve this in dummy terms if they need it. obv there is a little more to it but i tried to summarise it a very condensed format

Answer 15

Refer the deal to me lol

Comments

@minnow I’m open to seeing where you are in your agency and going from there. Dm me and let’s jump on a call if you’re open to it  

---

@congressional awesome !  

Answer 16

How would you guarantee . I don't. Guarantee results is a good way to see your client in a court.  

Answer 17

Old saying . goes like this.  

Answer 18

Don't guarantee. Be creative. Which sounds better to you? "I GUARANTEE if you hire me you'll see 400% returns in 2 months. " Then what happens two months later? If you don't you're out a job. "Based off of last quarters growth for businesses in this sector, return should be between X and Y. I believe with the right strategy we could get to Y or Z" Ask what their current return and expectations are before you say anything.  

Answer 19

No. ROAS is absolutely the wrong metric to optimise for. Here's why: You could increase ROAS just by pausing the least profitable half of their spend. That might increase ROAS, but reduce profit. Why would any smart client want you to do that?  

Comments

@zwick11 that’s true, what metric would you suggest brother. Thank you in advance.  

---

@congressional Cost per purchase, and LTV, while improving AOV

---

Net profit.  

---

@congressional I wrote about this years ago, but you can improve any metric while reducing profit. Clicks, impressions, ctr, cost/click, cost/conv etc. So the only metric to optimise for is profit.  

Answer 20

@congressional so how’d the meeting go ?