Every business and digital marketer wants to increase profits. When you focus on Pay Per Click, it is easy to figure out that if you get more traffic, you will make more sales and profits. Of course, this is only the first way to increase pay per click profits. The second way is by increasing the value of each sale.
Increase PPC Profits By Making More Sales
You can get more traffic of the same quality by adjusting or changing your CPC or the entire bidding strategy of your ads. In this way, you can spend the same money to get more traffic that will send a bigger number of potential customers to your site. Please, can you add this text instead of the arrow: In order to save not only your money but also your other resources you can use marketing automation tools like PPC management software created by Adplorer and optimize your PPC advertising more professionally.
1. Change Your Bidding Options
In the first step, we suggest using the Target ROAS smart bidding option. ROAS stands for return on ad spend. If you know how much return you need to get back from your investment in your ads, Google Ads will optimize your bids to reach that goal.
When you calculate the profits of a product, you must estimate the total expenses first. You can add salaries, expenses on equipment or software, shipping costs, etc. Then, you can estimate the profits by removing the expenses from the total amount of sales.
Many businesses reinvest a percentage of the profits on paid advertising to make a sale. So, it’s important to target a specific return on ad spend to keep their system running. And this is what we want to achieve with the Target ROAS option. Google Ads will find the right CPC to get you closer to that goal.
2. Make Bid Adjustments
Your conversion rates are not the same for all your target audience every time your bid for them. It can change for different reasons during the day or before and after specific events. It makes sense that they don’t have the same buying intention all the time as well.
For example, many e-commerce niches have higher conversion rates in specific hours of the day. Some demographics of your target audience may increase their conversion rates at specific times while others decrease it. For this reason, you need to track your results and adjust your bids to get the maximum from your budget.
Finding the right times of the day to increase or decrease the CPC is a great way to improve conversion rates or avoid wasting money the times they don’t convert. You can also consider increasing your CPC on holidays, Christmas, Black Friday, and dates that your target audience loves to buy things.
Maximizing PPC Profits By Increasing The Value Of A Sale
In some businesses, it will not be enough to change your bidding options or adjust your bids to increase profits. If this is the case, you need to consider to get the same or lower sales but increase their value. Lower sales can generate more revenue if the average profit per sale is bigger.
This idea may sound confusing because most people try to do the opposite. However, below you can see two ways that fewer or the same amount of sales can bring more profits.
Increase Product Prices To Increase Profits
Some advertisers have considered changing their products’ prices, while others think it could be too risky. The truth is that that a logical increase in the prices is not so dangerous as some people believe.
It’s common sense that you will lose some customers when you raise your prices, which could be a good thing for your profits. When you raise your prices, you will earn more money per product from the existing and new customers. However, you waste less money because you create fewer products. You can also avoid ad costs, delivery costs, and staff costs.
The more you raise the price, the fewer sales you will make. However, the more you lower the price, the more sales you will make. When the price is too high, no one buys the product, and when the price is too low, the sales are not profitable anymore.
We are looking for a sweet spot that will bring maximum profitability to your business. Small changes in the price are not risky and can give you information on how you need to continue in the future.
Increase Average Order Value
Many types of businesses focus on making sales of many products together, as bulk drop-shippers and mass manufactures. They avoid small orders and focus only on the big sellers. This process increases the average order value and has some great benefits.
If you avoid small orders, you don’t spend time delivering them. Small orders will take the same time to get delivered as larger orders. The same applies to customer service, and the ad spend. The customers that make small orders require the same attention and time as the customers that generate more profit for your business.
The easiest way to avoid people that make small orders is by increasing the average order value (AOV). It will reduce the bids on keywords and ad groups that go under a certain level. Of course, your ads will be visible to fewer people that are willing to make big orders.
You will earn things that you don’t expect from this process. The customer service and delivery time will get improved, and you will raise the average return on ad spend. So, you will have more happy customers and more earnings per customer.
Conclusion
When you set up PPC campaigns, you need clear goals about what you want to achieve. The goal is not always to make more traffic or just get more sales. In many cases, you need to consider how you will get the most profits. As you can read above, fewer sales can generate more profits in two scenarios. You need to find the sweet spot for your prices and the right customers for your business. Of course, it is profitable to make more sales too. The best way to achieve that is by finding the right bidding options and adjusting your bids
