Amazon isn’t getting any easier for sellers. The days are gone where throwing up a listing, getting a handful of reviews, starting an ad campaign, and sitting back to watch revenues jump month over month. In fact, as Amazon routinely updates their algorithm and becomes better at weeding out the gray or black hat tactics that were at the forefront of organic rankings over the last few years, more and more sellers are finding themselves scratching their heads at why revenues aren’t increasing or even dropping.
Here’s the answer, their focusing on the wrong things. In 8 years of selling on Amazon, we’ve gone through countless campaigns, identifying what works, what doesn’t and what sometimes works. For any seller that hopes to remain in the game for a long time, it boils down to 4 main components: Organic Keyword Rankings, Sku Sessions, Traffic Campaigns, and Conversion Rates. Each of these four areas can tell us 95% of the story about how well our campaign is or isn’t performing. Sales are down; well are we getting traffic? Is that traffic converting? Did we drop in keyword rankings? If we focus on each area correctly and routinely, the chances of our campaigns ongoing success jump dramatically.
Step 1: Keyword Rankings
Organic keyword rankings are the backbone of any good Amazon Campaign. First question I ask a new client or an Amazon seller is, “What keywords are you targeting and where do you rank?” Most don’t have an answer.
Here’s how to breakdown your organic keyword strategy:
Everyone wants to rank for the main, traffic driving terms, in their space. But the reality is, those are highly competitive and take time. Focus on the long tail, low traffic, high converting terms in the beginning. Build your campaign to get traffic first through ranking in a top 3-5 position for low competition terms. This will get you revenue faster, which gives you time to rank for the more difficult terms later.
STEP 2: SKU Sessions
There are two main components within the Amazon A10 algorithm that lead to organic rankings: Traffic and Conversions. Amazon is all about putting the most relevant and quality product in front of its customers and If you are driving relevant traffic and that traffic is buying your product at a high enough rate, Amazon is going to want to put you in front of more traffic by increasing your organic rankings.
Step 2 is probably the easiest step out of all the steps. All you do is have to track it. Track your sku sessions on a month over month basis. If they are going up, great! If they are going down, then we have a red flag and we can start to figure out why.
Say sessions are down. What’s the response? Here’s a checklist:
- Organic Rankings: Have we lost positions to competitors?
- Best Sellers Rank: Are our organic rankings the same, but best sellers rank down? This could indicate an industry wide trend. Check your competitors BSR as well.
- Ad Campaigns: Have we changed our Ad campaigns, ie reduced spend, keyword focus, or has cpc gone up due to competition?
- Brand or Social: Have we changed what we are doing in promoting our own brand outside of Amazon. If you have a tool like Helium 10 you can see if your branded terms have dropped in monthly search volume.
Step 3: Ad Campaigns
Ad Campaigns are the foundation to our offensive playbook. With proper Ad campaigns, we can quickly affect 3 of the 4 KPI’s; Keyword rankings, Sessions, and Unit Session %. Ad campaigns can run in all shapes and sizes, complexities and spend.
We could spend multiple blog posts on building ad campaigns but let’s keep it simple.
- A healthy ad campaign should make up 30% of our total revenue with a 20% ACoS. Now that ACoS can go up and down depending on your margin and how aggressive you are wanting to be with certain keyword.
- Your Ad Campaigns and your Organic Rankings should align. An effective campaign will dramatically boost your organic keyword rankings.
- In a lot of cases your Ad Campaign strategy can and should reflect your organic strategy. Focus on long tail, low competition keywords or phrases first. As your campaign and listing matures, broaden your keyword base to find high converting terms.
Step 4: Conversion Rates or Unit Session %
If you are a long time Amazon seller, ask yourself “What is the Unit Session % of my top selling products?” If you can answer that question, you’re an All-star!! Unit session % tracks how well your products are converting based on the traffic that is coming to that page (Unit Sessions). This little number gives us massive amounts of insight into how well our campaigns are performing.
Now each campaign is going to be different, but on average we have found that a good Unit Session % will be anywhere from 25-35%. When a product has consistent traffic and is converting at a high %, our organic rankings have gone up dramatically faster than a product with low conversion rates. Again, think back to one of the basics of the Amazon A10 Algorithm, traffic + conversions = organic rankings. Consistently tracking our products conversion % will give us valuable insight into how to improve our overall campaign.
So say we have a 10% unit session %. What do we do? Here are the key things to look for in order to improve your conversion rates:
- On Page Optimization:
- Reviews: Best way to kill your conversion rate is with poor reviews. Any average review rate under a 4 Star can negatively affect your conversions rates.
- Title: Keyword stuffed title will not only negatively affect your keyword rankings now, but can also lead to consumer confusion. Make sure your titles follow Amazon’s guidelines so you can check that off your box as a reason for low conversion rates.
- Imagery: Amazon customers use your images to understand your product more than your bullet points and your description. High quality images are a must, with lifestyle images and infographics now almost standard across all good listings.
- Traffic: How well do we understand where our traffic is coming from? (see organic rankings) Oftentimes we are driving the wrong audience to our pages. Are running ad campaigns for terms that are too broad, or for competitors that have a lower priced, higher reviewed product? Start taking out traffic sources that are irrelevant to your listing.
- Price: If your on page optimization checks all the boxes and your traffic, then double check your price! Amazon customers are more review sensitive then they are price sensitive, but your price has to be supported by the perceived value of your product. Higher priced items will oftentimes require higher review rates, great imagery and A+ or Enhanced Brand Content. Amazon customers need to know what they are buying is quality if you are at a higher price then most of your competition.
- Coupons and Promotions: If products traffic is solid, consider an incentive. Give a coupon or run subscribe and save to give your customers a little push over the edge.
Being a successful seller on Amazon can seem daunting and overwhelming. But by following these simple Key Performances Indicators, you can put a “why” behind your campaigns performance and create a game plan to increase your sales and profitability.