How to Increase Amazon Customer Lifetime Value

Webinar Recap

Do you know how to calculate your customer lifetime value on Amazon? Ryan Flannagan, Founder and CEO of Nuanced Media, explains strategies to increase your Amazon customer lifetime value in this webinar.

Before you get started, be sure to check out (and bookmark!) Nuanced Media's customer lifetime value calculator. At the bottom of the page, you can even request to have the Nuanced Media team provide you with a more advanced and precise calculation. Now, let’s recap some of the highlights from this fantastic webinar!

What Is Lifetime Value?

According to Flannagan, “Lifetime value (LTV or CLTV) is the amount of money a customer will spend with you until they die, or you go out of business.” It can be measured for one person or a group and is found by multiplying the Average Order Value (AOV) and the Average Purchase Frequency (APF).

Every company will use LTV differently depending on where they place their emphasis. Some will focus more on Average Order Value, while others will place a greater importance on Average Purchase Frequency. Ultimately, as a business owner, you’ll have to figure out what’s best for you.

Need some examples? If you’re basing your LTV on Average Order Value, you’ll be looking at typical one-time purchases. Amazon is filled with small catalog brands that would focus on this metric! If you’re basing your LTV on Average Purchase Frequency, you’d look at typical customer purchases that are made more than once. These orders would include things like supplements, razors, and food items.

How to Increase LTV on Amazon

Whether you’re new to the marketplace or have years of experience, you should always be looking for ways to increase your Amazon customer lifetime value. Your strategy, of course, will depend on a few key factors.

Flannagan encourages Amazon sellers to understand their product catalog. “Are you the type of brand that has the high frequency purchase rate? Or are you the type of brand that has a larger catalog and maybe people are doing a lot of one-offs, so there's more of a cross-sell and upsell opportunity? Maybe you're a hybrid of the two.”

In the webinar, Flannagan dives into multiple ways to increase your LTV, including the Amazon Storefront (which can convert at 13% or even higher) and Amazon A+ content (otherwise known as Enhanced Brand Content). Through these options, the opportunities to upsell and cross-sell are much higher, giving you more opportunities to attract and retain loyal customers.

He also discussed the benefits that come from Brand Registry. “Amazon really unlocks a lot of additional capabilities… so getting your trademark is really important. If you don’t have a trademark, I highly recommend IP Accelerator. The key to these strategies is having Brand Registry, or you will not be able to attempt the Storefront or the A+ content.”

Why Subscribe & Save Boosts Profits

Are you an Average Order Frequency brand? If you haven’t already, you might want to sign up for Subscribe & Save! This Amazon program allows customers to set up automatically recurring purchases, so that they don’t forget or run out of the things they use in their everyday lives.

“The razor blades, the supplements, the vitamins, the food products, all these other elements... this is a great way to get repeat purchases,” Ryan explains. Through a separate dashboard on the back end, sellers can track these metrics, create goals, and make targeted efforts to increase the number of people signing up for Subscribe & Save.

Amazon DSP

In recent years, Amazon has rolled out a demand-side platform, or DSP. While it’s relatively new, sellers can work with select agencies, such as Nuanced Media, that can serve DSP to their clients, or they can work directly with Amazon. In the webinar, Flannagan provides a great overview of how everything works.

Overall, DSP allows sellers to retarget customers who have advanced targeting, attribution, and cross-sell capabilities both on and off-platform. As Flannagan said, “So you're not just restricted to advertising on Amazon, but you get the 250 top publishers and then you get a full, larger exchange too...That's really the capability with Amazon DSP for increasing your lifetime value on Amazon.”

Amazon is evolving and growing more sophisticated every day. Are you actively finding ways to remain competitive and profitable? If you’re ready to take the steps to secure your place on the marketplace and build your brand, you don’t want to miss this webinar!

Colleen: Thank you again for joining us for our webinar today, on how to increase lifetime value on Amazon. My name is Colleen Quattlebaum with eComEngine. I am the marketing manager here. We have several tools for Amazon merchants, including FeedbackFive, RestockPro and MarketScout. We've been in the industry for about 15 years. I'm so excited to have Ryan here with us today. Ryan has been in the eCommerce industry for over 10 or so years as well. He is the founder and CEO of Nuanced Media. As he said, he's calling in from Arizona, so it's the sunshine, sunny weather down there. But as founder of Nuanced Media, he works closely with a lot of brands. He and his team, they pride themselves on building strong client relationships, long term. They have helped brands make hundreds of millions of dollars in revenue. In one of his clients that was about a $4 million company, he helped them to achieve $18 million in sales in one month.

Colleen: So he definitely knows his stuff and I hope that you learn a lot from him today. He's going to talk a lot about how to increase lifetime value on Amazon, how to calculate lifetime value, as well as some other metrics. So I'll go ahead and jump into the agenda, to share with you a little bit more about what he plans to share. So as I mentioned, what is lifetime value? He'll talk about the calculation, how you can calculate this, what average order value or AOV is, versus average frequency purchase, AFP, and why lifetime value is so important. He's also going to talk about different Amazon programs and ways to increase your lifetime value on Amazon. And hopefully, bring more money into your pocket. So without further ado, I'll kick it off to Ryan and he'll take it from here.

Ryan: Well, thanks, Colleen. I really appreciate the introduction. Thanks everybody, for attending. I know this is a pretty important topic for everybody, because Amazon is sometimes a black box with this, and it's hard to calculate what exactly your lifetime value is, how do we do it, how do we improve it? And how do we do all those really important things on Amazon, to really kind of know our unit economics? So I want to kick off here and kind of just talk about the definition of what is lifetime value, and then kind of speak a little bit more of why it's important. So as you probably know, a lifetime value, LTV or customer lifetime value, CLTV, is basically the amount of money you make from a customer and how much they'll spend with you until they essentially die or you go out of business.

Ryan: This is really important to look at, because we want to figure out what are our customer acquisition costs, how it works in with our unit economics and some other things like that. But essentially, lifetime value is kind of broken out by two key metrics here. And that's average order value multiplied by the average purchase frequency rate. So if you're in the razor blade model, it's why you see Gillette, the Amazon Basic brand, and a lot of these other type of brands out there selling their razor blade for relatively inexpensive, with the kind of three razors on that, because it's easy to get into the market and then they continue to sell you the razor blades. So there's a strong average frequency purchase rate, which drives up the lifetime value of the customer.

Ryan: The lifetime value can really be measured by one person, or a group of people, based on that. So women, for example, in the razor blade market, have a higher lifetime value, or I presume that they do, than men, depending on how much they shave. Women have legs, they have longer areas, those type of things. So you'd typically purchase more razors, because of that. Therefore, increasing the lifetime value compared to individuals such as myself, that have no big area to shave. I can basically keep a razor for three to four months and be okay with it. Particularly, now that everybody's working from home, because putting all this together takes a lot of work. With that, each company basically uses their lifetime value in a different way. Typically, focusing on more average order value or average purchase frequency, depending on the customer and the company.

Ryan: So the first thing you really need to determine is what is the lifetime value of what type of company you are, while looking at this. Quickly, to talk about Amazon compared to e-Commerce website or things like that, something that we do typically see and I'm sure everybody's kind of aware of this, but on Amazon, your typical customer acquisition cost is significantly less, because it is such a high percentage of eCommerce and all of these type of things. But your lifetime value is less too, because other than Subscribe & Save and some other things that we'll talk about later in this, it's hard to kind of crosspollinate, cross sell, upsell, get repeat purchasers and things like that. Compared to your website, where your customer acquisition is typically a little bit higher, because you have to drive traffic there, the conversion rate's a little bit less than Amazon, but your lifetime value's a bit higher on your website, because you can do email marketing, additional retargeting and a variety of things like that.

Ryan: So in this topic today, we're going to talk about how can we increase the lifetime value on Amazon in particularly. So looking at this is as are you and average order value type of company, or are you average frequency purchase company? So the average order value typically tends to be a little bit higher price point on this, but not always. And that's essentially when a typical customer comes and buys from you once and then they're gone forever, they kind of move onto the next thing, they never see you again. And this is kind of small catalog brands, anything that you've ever just bought once on Amazon, is basically an average order value company. Or Amazon is basically filled with these type of brands, because traditionally Amazon was significantly more of a department store compared to a mall.

Ryan: But what Amazon, as it matures and we're really kind of seeing, is really getting a little bit more brand oriented with their introduction of social posts, the store front, some other things that we can talk about a little bit later. The second level is to look at are we an average frequency purchase company? This is typically kind of that razor blade model I was talking about, supplements, food products. These are typically brands that you purchase once and because I love Doritos, I order them on a monthly basis moving forward and I have a higher lifetime value with this customer. Because I'm purchasing more frequently, in a repeat fashion. So first thing is which type of company am I, how do I do these things?

Ryan: So why is this important? Well, profitability is important. We're all here in order to be profitable so we can continue to grow our... A, support out family, which is important, people need to eat. But then also, do good in the world and help people with great products. So in order to do that, we need to be profitable, right? So we need to look at our revenue minus costs equal profitability. And we need to look at our lifetime value minus our customer acquisition costs to figure out our profit per customer. And this is why this is such a key factor on Amazon. Particularly, we see this a lot in the supplement space, vitamin space, food area, groceries, these type of things. But if you don't know your lifetime value, you may look at the metrics and say, "Well, my product goes for $20 and my customer acquisition is $25, so why would I ever do that, because I'm losing money?"

Ryan: But if you figure out your lifetime value, and the person repeats five or six or 10 times, well then that's actually a completely different metric. If it's the purchaser buys 10 times from you, that's actually $200 in revenue, compared to just the $20. So you would do that any day, all day long, for a customer acquisition cost of $25 to make $200 in sales, assuming that the rest of your unit economics makes sense and those type of things. So this is one of the key elements that you understand about Amazon and how it works, is what is your lifetime value and how do you grow with that? So this really kind of breaks it down to your unit economics. So by understanding your lifetime value, you can really understand your unit economics, you can really identify your customer acquisition targets.

Ryan: And this can be by personality type, like I gave the example of razor blades and the female/male market. Well, if that holds true and women over a two year span spend 30% more than you, then we really should be targeting out that segment group significantly more because they'll give you a higher lifetime value on that. And then we also can discover how profitable or unprofitable Subscribe & Save really is for us and our brand. So kind of looking at this, how do we really focus in on increasing your lifetime value on Amazon? And this really depends on a few key factors. Are you the type of brand that has the high frequency purchase rate? Or are you the type of brand that has a larger catalog and maybe people are doing a lot of one offs, so there's more of a cross sell and upsell opportunity? Or maybe you're a hybrid of the two.

Ryan: So the first thing we want to look at is the Amazon Storefront. Everybody, I presume at this point, is aware with the Amazon Storefront, and this kind of speaks to the maturation of Amazon that we've seen. So initially, when Amazon was launched, it was a bookstore way back when, and then's really been evolving. One of the things that we've really seen in recent years is Amazon focusing more on brand and brand affiliation, and one of the keys to do this is the Amazon Storefront. So this enables people to click on your link, either through your sponsored brand ads, display ads, or through Amazon DSP if you push to the Storefront, or just on the brand picture up top on any listing that you look at, and browse your catalog.

Ryan: So we've actually seen some Storefronts convert as high as 13% or higher on this. You can drive brand ads to the Storefront. And then this people who have brand affinity with you and really have liked one product, or are looking for bundles or a variety of things like that, other things that you offer, enables them to cross sell products, it enables us to cross sell products, really build brand affinity and credibility. And thus, increasing our lifetime value. So one of the things that we generally see on Amazon, is typically, because of how ranking velocity works and a variety of things like that, you'll have one product that makes up the... The Pareto principle kind of comes in here. Maybe it's 20% of your products or 20% of your SKUs make up 80% of your revenue. Or you have one product that's making $300,000 a month and the rest are making 10,000 or less.

Ryan: So what this enables you to do, is cross sell those products, and look at these, particularly based on you having strong review velocity with these elements. Another way to cross sell is really on the listing itself and with product families and kind of building out product families so you can show different colors and that, and a variety of different options. So the next thing that we want to look at here, is really the A+ content side of it. So one strategy, just quickly talking back to the Amazon Storefront, can increase lifetime value, is in your sponsored brand ads, make sure you are listening to the store. Sometimes, there's technical errors and people actually just link to a listing of their products compared to their Storefront. If you're running a DSP, you can push to the Storefront as well as this, but these are different ways for people to browse your catalog. And really, you want to leverage this Storefront to increase your brand awareness and do these types of things.

Ryan: The second thing here, is really the Amazon A+ content, otherwise known as enhanced brand content. And the things that we see with this, is there's a pretty strong opportunity for cross sell and upsell. So this is MOO, this is an example of one of our clients. The last one was one of our clients as well, Coat Defense. But when we look at these, MOO here has a number of different products that they're selling. So we helped them launch this line a while back, and essentially, we see a variety of different kind of premium notebooks. We have one with Seth Godin. It's a workbook that you can go through. We have dotted notebooks for people who are in the Getting Things Done movement, every day accessory type of people, those individuals.

Ryan: So there's an opportunity here to cross sell and upsell products, when doing these things. And that's really kind of a core level that we want to focus on. When people are browsing your product, what can they cross sell, what can they upsell, what can we do in these units? Just as a quick note, Amazon, as I'm presuming everybody's aware, really unlocks a lot of additional capabilities when you have brand registry. So getting your trademark is really important. If you don't have a trademark, highly recommend IP Accelerator. You can just Google that and they can actually enable you to get a trademark significantly more quickly compared to going with your local attorney that has to go through the governments and things like that. But the key to these strategies is having brand registry, or you will not be able to attempt the Storefront or the A+ content.

Colleen: Ryan, we have a question here about A+ content. Do you recommend an A+ content with only images or is it necessary to use text boxes for the SEO ranking purposes?

Ryan: Yeah. I like to get as much content on the page as possible, so we typically recommend a hybrid with that, and design that out with your elements. In the product description, you can put more text behind that for kind of keyword stuffing, for lack of a better term, but we do recommend a hybrid of photos and text on that as well.

Colleen: And the comparison tables are great too, that you have here at the bottom. So-

Ryan: Well, because that's the whole cross sell and upsell side of it, right?

Colleen: Right.

Ryan: I'll get my fancy pointer out here, because pointers are really cool. So what you want to look at here are, "Well, I'm just coming here for the midnight blue, and what can I do with the wild ones collection? Oh, those look designer. My sister might like that one." Or, "Seth Gordin, I'm a huge Seth Gordin geek, so why don't I get his workbook as well?" This is also something that's a little bit more limited, particularly on Amazon kind of coming down on the product family, but that's another area that we see. And we see that as a big strategy, actually. Not necessarily a bait and switch, but you'll have a product family, let's say supplements for example, that you'll have a... As a jet flies by, I don't know if you can hear that or not.

Ryan: They'll have a supplement thing, maybe this is a fast acting supplement that you don't need a full 30 day supply to get the boon, maybe a sleep aid for example. And they'll do one product that's a 10 count, that's significantly less expensive to buy, and then you'll have the 30 count, and you'll have the 60 count, and you'll have the 90 count. So somebody can easily come in, particularly in the sponsored product images, you see, "Oh, this one's only $10.99 and everybody else is 30 plus dollars." As a sample, and then that product family actually does the cross sell and upsell based on doing that. And you can Subscribe & Save on maybe the 90 count, because you get the best unit economics with that.

Ryan: So that's another strategy with product families, but you have to be pretty careful with the product families, because you shouldn't be selling knives and spoons in the same product families, because they're different products. So just proceed with caution, if you were to attempt that strategy. Here's something relatively new, this has really come out within the last six months to a year on Amazon, and it's virtual bundles. Now the first thing I want to say with virtual bundles, is you do need to have brand registry for this, again you have to be able to unlock this. But it's only supported right now with sponsored brand ads, and it's not supported with sponsored product ads.

Ryan: Now, here's a quick example. They kind of have this item plus this item, showing the virtual bundle. You can basically upload your own custom images, your own custom copy, all your own custom things to the virtual bundles. And how this works, is essentially, Amazon will still charge you the individual FBA shipping for each one of the items in this, but it enables you to do two to five complimentary ASINs within a purchase, enabling them to purchase together in a single page. Now the core element of this is A, that can significantly drive up lifetime value, because now I don't have to go purchase five different things. But from trial standpoint, particularly with FBA, setting up a new UPC code, doing all this type of things, it enables you to go in as a seller and test different market concepts pretty quickly. So does this bundle take a while? Is my red lipstick really going to go with the... I'm talking about makeup. I'm probably the last person who should be talking about makeup.

Ryan: But does the red lipstick go with the black hairbrush as a bundle? Do those complement each other or does it go with a blush or something like that? This is a quick way to try these bundles to see if they work. And if you get traction on it, then you can say, "Okay. Now, I'm going to actually make this as a bundle in my warehouse, send it in and then I can get the less expensive FBA shipments." Because you're not fulfilling on each of those individual SKUs, you're fulfilling as an overall bundle. So this is a pretty strong strategy to increase the average order value, test bundles and profitability, really increase your catalog quickly, because event bundling, there's a whole bunch of different things you can do with that. And because these are being purchased together, there's a higher potential that you'll have the frequently bought together box show up on your listing, which is just huge real estate on your listing in order to cross sell and up sell in those areas as well.

Colleen: And, Ryan, to clarify, you said that these are only allowed for sponsored brand ads not sponsored product ads?

Ryan: Yes, that is correct. I mean, this has been rolling out for the last six months to a year. I think it's eight months, but don't quote me on that. So that's where it is right now with this, and I'm presuming that they're going to roll out sponsored product ads here pretty quick. But I did double check this on Amazon today, so that's what their documentation says. If anything's changed, they haven't released that beta to us at this point.

Colleen: Got it. Thanks.

Ryan: Okay. Were there any other questions? I know some things were popping up. Are we... Okay. We're good. All right. So, here's social media promos. Now, the first thing to know about social media promos is that they don't need to be social media promos, right? These can be promos that you're putting out from an Outbrain campaign, contextual targeting campaigns, these can be a variety of different ways to do this. But essentially, what you can do is you could put bundles in here and then drive traffic from Facebook or Google Pay-Per-Click, or Display or YouTube videos or through influencers, or whatever you want to do to push these areas to the bundle.

Ryan: So what we typically recommend with this, is you do kind of the one two punch, is that you set up a bundle and then you push it here for somebody to test and buy that way. You can also do this just by enabling people to come and see your overall catalog and purchase and doing more like catalog elements in this for purchasing and doing those things. One thing to note on this, is if you're going to use the social media promos link on this, then your discount must be at least 5% and you can't do deep discounting over 80% of this, but it is a way to drive people to another area. Particularly, last time I checked, you did not need brand registry for social media promos. So if you don't have brand registry, this might be the hack to get around it, to bundle your things, and kind of show these thing out while you're working on getting that trademark or any of those other things.

Ryan: Next on this is really kind of the Amazon promotions and the percentage off. And I don't know how many people have seen this, but we've been recently seeing this happen. And Amazon's always beta testing, they're always testing their market. But this used to be tucked away, kind of towards the product description area and it used to just be text. And now, we're starting to see this kind of promotion of bundling on this, that you can kind of see here, you buy one and you get a discount on the second product, or you buy two and you get another discount on a selected product, or you buy three and you get this much off on the third product. So essentially, what Amazon promotions enables us to do is basically, it gives us a large variety of options. Everything can be visible from to claim codes to customer terms, but you can basically use this to encourage larger basket quantities by applying a discount to only two or more items as a strategy. And this can actually show directly up on your listing.

Ryan: So this is a great way to take that listing, the 20% of your listings that are doing 80% of the sales or sometimes that one ASIN that's making 90% of your sales, to cross promote other ASINs, to get those guys to start buying and selling more of those things, right? You can also kind of do large stacked options, like I talked about, buy one, get this percentage, buy two of something else, get this, buy three, you can do that. And then you can also do this just for that one product compared to a Subscribe & Save option. The other element here is you can also leverage the buy one get one free option with this, and that's something that we typically look at with new product launches for established brand. A, to drive up just sales velocity, but get reviews really, through these other type of things that are going on with that. And more importantly, increase the likelihood that you'll get the frequently purchased with potential with that main item that you're selling, so people have a higher chance to convert on that. "Oh, I'm getting the sunglasses. And now, I should maybe get the sunglass covers, because that's a frequently purchased with item." Okay.

Colleen: And, Ryan, in regards to those Amazon promotions, do you need to be brand registered for those?

Ryan: The Amazon promotions, I do not believe so.

Colleen: Okay. And then another question, where do we find promotions on Seller Central?

Ryan: You go to the promotions tab. That's a complicated thing, it's on there. You can walk through this pretty quickly, just Google Amazon promotions, Seller Central and this will come up, Amazon's documentation how to do this directly on that. All right. So Subscribe & Save, here's another option. This is really Amazon's level for how to get subscriptions, how to build these things out. And what we see with this, is this is one of the best techniques for average order frequency brands, right? The razor blades, the supplements, the vitamins, the food products, all these other elements, this is a great way to get your repeat purchase coming up and then obviously be able to monitor a bit more.

Ryan: So this enables us automatically set up reoccurring purchases, so people don't forget. The end user gets to select what frequency they want these products delivered to us. This increases our average order frequency. We get a separate dashboard on the backend of Seller, where you can see how many people are joining per month and lost, and all these type of things. And then also, with Amazon demand-side platform, or DSP, you can actually... There's no way to do it on the backend of the platform, but you can track the attributions for people who are signing up for Subscribe & Save, which inherently have a higher lifetime value, so you can actually manually track those metrics and then target out that as a goal within that to increase how many people are signing up for Subscribe & Save, those user groups such as men and women and the razor blade analogy, to really targe those out and go after those people to increase that lifetime value.

Ryan: One thing that I do want to tease right now, and I probably should have teased at the beginning of this. If you don't know your lifetime value on Amazon, Nuanced is putting out a free calculator for you guys. We're taking emails for it right now. We'll give you a link later on, how to sign up for that, and I'll shoot out an email to everybody when that goes live. So you can calculate it, or at least you have the process to calculate it on there. We also have a blog that kind of walks you through how to do it manually, but it's a pain in the butt, so we're putting together a calculator as well. Okay. So the next thing... And, Colleen, I'm seeing the comment thing go through, just hop in if there's anything. Are we still good?

Colleen: Yeah. We're good. I put a link to the customer lifetime value calculator, as well as to the promotions tab in Seller Central.

Ryan: Okay. Great. Great.

Colleen: But actually, one just popped in as you mentioned that. Does Subscribe & Save require FBA shipping?

Ryan: Yes, it does. I'm 98% sure that we have to have FBA shipping for Subscribe & Save. So don't shoot me if I'm wrong, I'm 98% sure, but I'm pretty positive. Okay. So the other side of this, is Amazon DSP. I'm sure the vast majority of people are familiar with demand-side platform, but it is a relatively new phenomenon. It really kind of gained its own legs over the last few years on this. And to kind of break it down, the typical Amazon seller has Amazon Ad Console, and you basically get sponsored brands and sponsored products. Now, on the sponsored brand side, we've seen a lot of movement on this. To get sponsored brands, you need to be able to... You need to have brand registry for sponsored brands. Sponsored products is available to everybody.

Ryan: But on the sponsored brand side, we're actually seeing, just within the last few weeks, them enabling you to start uploading design creative into that, compared to just changing the titles and doing the dynamic side of it. The video ads are coming out of sponsored brands. This is all kind of what I alluded to earlier, that Amazon is really starting to focus more on not being a department store, but being a mall and having a whole bunch of different brands underneath that. And we've seen that with A+ content, we've seen that with Storefront, we've seen that with the evolution of sponsored brands. But we're also seeing that with Amazon Posts that recently got rolled out, so now you can engage in social media. And maybe that's because Facebook's coming in with Facebook Shop and all these other things.

Ryan: But Amazon is definitely maturing on this side of it, and focusing significantly more on being a brand. So that's why that brand registry is very, very important. And then also, unfair advantages similar to Amazon DSP become more and more critical with that. So these are the things that you're kind of limited to with the self-serve model, the Amazon Console, these type of things. We're also starting to roll out retargeting and some other things like that. Amazon DSP is a service that only select agencies, like Amazon agencies, like Nuanced Media, have pretty much where we can basically serve DSP to our clients. There's other agencies that do this, of course, as well.

Ryan: But you also can work directly with Amazon to get DSP, although... And don't quote me on this. I think the last check was you need to spend a minimum of $35,000, that could have moved over the last six months on this. Compared to working with an agency, you can typically start a little bit lower and get these things in. But essentially, what we can do with Amazon DSP, because Amazon DSP enables us to do a variety of things. I would look at it like the Facebook Pixel or the Google look-alike audience, similar audiences for Google. Essentially, we can pixel our listings, so we can do retargeting. We can target direct competitors with display and video ads. We can go onsite. We can go offsite. We can do a variety of these different things.

Ryan: But when we're talking particularly about the lifetime value side of this, we can re-target customers that have already purchased. If you know that you have a supplement and it's a 30 day supply, or you know you have a razor blade and you know most women order new razor blades after three months, you can say, "Hey, it's been two and a half months, let's start showing ads for this again." Right? And get people to come back and purchase that haven't done that. With that, you can also target out the Subscribe & Save attribution. So you can say, "Well, don't target people who Subscribe & Save, because I already have them, but people who've purchased who haven't." Right?

Ryan: The other concept of this is with the analogy I made for the vitamin and the supplement company earlier, with the 10 count of items, and then the 30, and then the 90, and then the 120 or whatnot. If somebody buys that sample pack, and you know it's a 10 day supply, then you can pause for 10 days and then start marketing to them or seven days or whatnot, and then start marketing to them with the Subscribe & Save option for the larger one or pushing to really kind of that metric. We can basically create target lists based on this behavior. We can really cross sell and upsell products. With the razor blade side or the makeup analogy that I used so horribly earlier... Because again, I have a face made for radio. If somebody's buying lipstick, we can do makeup brushes, we can do hairbrushes, we can do a variety of things like that.

Ryan: So the benefits of DSP on this are advanced targeting, advanced attribution, cross sale capabilities, and then, really on and off platform. So you're not just restricted to advertising on Amazon, but you get the 250 top publishers and then you get a full, larger exchange too. So that's why you're kind of probably seeing ads for Amazon pop up on regular browsers that you're doing. Now, you're going to say, "Hey, I just saw that product, or I saw a competitor of that product and now I'm getting served ads." So that's really the capability with Amazon DSP, for increasing your lifetime value on Amazon.

Colleen: Great.

Ryan: Okay.

Colleen: We do have a question here about DSP. So can't you do a lot of what DSP does these days with sponsored display on a self-serving model? And because of that, should someone push all of the self-serving ads prior to trying DSP?

Ryan: Yeah. So yes, you can do a certain amount with the self-serving model on the display side of it. But I'm the type of person that likes to bring a gun to a knife fight, just to quote The Untouchables, right? Sean Connery, may he rest in peace. Anyway, I'm probably too old now for people to get that reference. Anyway, with those things. Yes, you can do those type of things. And we always recommend doing as much as you can with the tools that you have to optimize for profitability. The other side that we like with DSP, is it is a programmatic platform, right? So we do have to spend a certain amount of money in DSP, for the algorithm to optimize and do those type of things. So we typically recommend a minimum of $10,000, to do the prospecting, to find out what your real ROI is, and all these other thing, which is something you something you could be doing in sponsored brand ads. But if you need to then go do it again somewhere else, that's a to-may-to, to-mah-to type of situation.

Colleen: Great. Well, that was a lot of information. Thank you, Ryan. It was a lot that he shared in 30-35 minutes. And we do have Ryan for a few more minutes, 15-20 minutes. So if there's any more questions, please feel free to share them in the Q&A. But we'll go ahead and hop to the next slide, while some more questions are popping in. Just to share, as a thank you for joining us today, from eComEngine, we're offering a 30 day free trial to our two major tools, FeedbackFive, which helps you to generate and request more feedback and reviews as well as monitor reviews on your own brand or your competitors. And then also RestockPro, which is our FBA inventory management tool, which is available in 10 different international marketplaces. You can learn more about those tools at ecomengine.com. And then Nuanced Media, Ryan, do you want to share just again, about your-

Ryan: Yeah. Yeah, yeah. So I'm obviously not very passionate about lifetime value, right? Sarcasm. So one of the things that we've found is it's pretty hard to calculate your lifetime value, right? Particularly, if you have a large catalog or you're an average frequency purchase company, right? And then you want to make sure that what is really my lifetime value for my razor blades or the makeup or my supplement brand? So we basically have put together a calculator, it's internally, we're finalizing it right now. And we are going to be launching it relatively soon, I'd say within the next two to four weeks, for the general public to use for free, as a test.For those who can't wait, we actually have ran a full article on how to calculate your lifetime value on Amazon.

Ryan: So you can go through the task of downloading all the reports, doing the equations on your own and trying to do those things. It's a pain in the butt to do. So we are basically making a simpler way to do that, which will be out shortly. So basically, the logistics on and kind of the math behind it, we're very fortunate at Nuanced Media, our CTO is actually a mathematician as well, to solidify these things. But essentially, we have, for those of you who can't wait, if you go to the link that Colleen shared, you can figure out how to calculate your lifetime value right now. And those of you who can wait two to four weeks, at the bottom of the blog, we have a signup form where you can signup right there, and then we will tell you when it comes out.

Colleen: Great. All right. So we do have another question here. Is there any additional benefit to using the promotions or percentage off to adjust prices rather than just using the sale price in Seller Central?

Ryan: So the benefit of... Sorry, what was that? I've decided that we had talked to each other, so I just turned off the-

Colleen: No, this is good. What's the additional benefit of using the promotions or percentage off to adjust prices verses rather just using the sale price in Seller Central?

Ryan: Yeah. So the thing with this is really trying to do the cross sell and the upsell angle, right? So the goals with this, like the social media promotion was an example of doing that concurrently with a bundle. Because then you're selling two products, compared to one. On all your listings, we do a whole bunch of coupon, discount promotions, all those type of things, anything that'll drive and help you grow your brand and your sales on Amazon. But really, the concept of the tactics we talked about today, is to cross sell and upsell. And in some cases, really focus on getting the frequency purchased with attribute at the bottom of your best selling listing, so then you drive sales through that mechanism.

Colleen: Okay. Great. And what insight do you have into performance of offering multi-packs as a new ASIN in a variation, versus scaled discounts using percentage off promotions?

Ryan: Okay. So the how well it works is a little limited right now, and that's for a number of reasons. A, do three lollipops or five lollipops sell better? Well, we need to test that, right? So what I really see on the virtual bundling side of things, is it enables us to test things at a relatively low cost. And then based on that testing within the market and if we find a winner, something that's really converting, then we can make a new ASIN out of that and put that and do those type of things to really grow that out. Right? So that's more of a split testing, research concept to find out what that works with. And the second part was about scalability, could you repeat that?

Colleen: Right. Just that offering multi-packs as a new ASIN versus scaled discount using the percentage off promotion.

Ryan: Yeah. So the percent off promotions, you'll get a pretty small amount that convert on that. Some people are going to buy it, but again, that's really based on the value of the offer and the additional products and the savings that work with that too. Again, the virtual bundles are very much in... They've been out for six to eight months at this point, so they're very new. So there's a strategic advantage of getting it on now. We do see a higher conversion rate on the virtual bundles compared to the promotion side of things.

Colleen: Okay.

Ryan: And it really depends on, because Amazon's been playing with it, where are those promotions showing up now? Are they directly underneath the listing taking up a ton of real estate? You're going to have a significantly higher conversion rate when it's doing that, compared to tucked away around the product description level or the A+ content, because it kind of gets lost in the noise down there.

Colleen: Okay. And what about FBA fees, do you pay individual FBA fees if you're offering quantity discounts and promotions?

Ryan: Yeah. Essentially, yes, and that's why it's a good testing system to find out a winner. And then from there, you can switch to an individual SKU that you're sending in the three lollipops compared to the five lollipops, because you know the three lollipops really go when you have grape, orange and cherry. But three lollipops that are grape, sour cream and cherry, for some reason, people don't like sour cream, it doesn't really sell.

Colleen: All right. Just like with many things, you just have to test and learn.

Ryan: Right. Well, and then the other thing, particularly for grocery brands and things like that, a lot of people take time to build out the sample pack, to do these type of things. Because the first thing is, it's about customer acquisition. So if I can just get somebody to buy my lollipops, then I know they buy them every week from here on out, right? And compared to making out an ASIN that is the grape, orange and sour cream, and then setting that up and sending an FBA, which takes three weeks, and doing all this type of stuff. And then to find out three months later, you still have 100 units of the sour cream with the other two products. Now, that can be very painful. But for food products particularly, you can mix and match and see how people get in. And really discount even heavily, just because it's really about getting them in the door if you know the lifetime value and that you have a high repeat purchase for your customers.

Colleen: Okay. This ones about Amazon reporting and data. Are you using Amazon's more recent reporting about impressions, share percentages and sponsored brand display?

Ryan: Yep.

Colleen: And if so, can you share a bit about how you're getting value out of this data?

Ryan: Yeah, so data's data. So A, it's great to see that we're actually getting impression share. We use a lot of different tools internally. So one of the benefits of working with so many different sellers and kind of having this agency, is that we've taken a whole bunch of... We spent a lot of money getting the best and the best from a variety of tools. So we already had market share, keyword impression share, some of these other type of things coming to us. But one of the nice things about impression share, is you can actually find out where you are with your campaigns and if you're missing a big part of the pie, right?

Ryan: As you know, if you're running sponsored brands or sponsored product brands, just because you launched a campaign doesn't mean that you're going to be showing up for that ad. It can take up to three days before it captures that. And that metric enables us to really dive into the data a little bit more, and find out actually how effective we're being in that area and how much more percentage of the pie is there. Now, will Amazon ever let us get 100% of the pie? Probably not, because they thrive on competition, they do those things, even if you are really focusing on outbidding your customers, but at least you can know what the upside is and the downside.

Colleen: Very good. I think that's the last of our questions that have come through at this point. So just want to thank Ryan again, for his time today. Again, Ryan, with Nuanced Media. You can visit his website at nuancedmedia.com. His agency is fantastic and has worked with so many brands, helping them to succeed in the long term. So feel free to reach out to him if you have any questions, and we'll be sure to send everybody an email that has a copy of this recording or the webinar, in case you want to share it with anybody else on your team. And we'll share the links that we shared in the chat as well. But again, thanks, Ryan. Everybody stay warm out there.

Ryan: Thanks, Colleen. I really appreciate the opportunity to come on and speak. And flattery will get you everywhere, I appreciate you being so complimentary. I tell my wife she can tell me how great I am more. So just, wow. I'm just-

Colleen: Well, yeah. You're a great partner so we enjoy working with you.

Ryan: Thanks.

Colleen: All right. Well take care, everybody. Thanks for joining.

Ryan: Bye.

Colleen: Bye.