Updated: Feb 17
A good salesperson knows that if a prospect isn’t entirely “sold” on one of your products they need to be offered an alternative one from your catalog that meets their needs better. You don’t just let the prospect walk away, because that would be a disservice to everyone. After all, your prospect spent a fair amount of time researching, sifting through tons of alternatives and gave your product a share of their attention.
In the traditional sales and marketing world, one can offer upsells, downsells and cross sells to keep shoppers in the consideration phase of your brand, and hopefully close the deal with a product that they love and one that meets their needs perfectly.
While advertising on Amazon may not provide the same kind of opportunity to suggest an alternative product, what it does provide is the ability to target your own products though Sponsored Products - Product Targeting campaigns. We call this the “Funnel-in-Funnel” strategy.
What is the Funnel-in-Funnel strategy?
Imagine your best traffic source, a product that has a great conversion rate on Amazon (let’s call this SKU-A). You could strategically design a Sponsored Products Product Targeting Ad for one of your other closely related products on the same page (SKU-B). This could be a higher priced item with better features, just like how conventional sales people would “upsell”.
Or, you could decide to showcase a cheaper, related product (SKU-C) with fewer bells and whistles, that might satisfy the user’s original intent on the detail page for SKU-A. Guess what, this is like designing a “downsell” offer.
With either approach you are essentially placing a funnel for alternative products within the main product funnel. Hence the name funnel-in-funnel. Imagining things this way helps you be more creative, strategic and intentional in your ad placements, and go beyond the mere mechanics of product targeting. Note that this type of ad is shown on the detail page of the product you target.
Does the Funnel-in-Funnel Strategy Work?
Yes! This strategy works great for a variety of reasons:
It’s the perfect setup for a steady stream of pre-qualified leads. Visitors who clicked through to the ad were already interested in the target product higher up in the funnel. You know this because you strategically placed related products in close proximity.
You capture a greater share of the real estate on a page. Imagine someone seeing all of your related products on the same page. The buyer has a lesser likelihood of getting distracted by other brands. You get to play defensive.
You save the shopper from time spent researching your other offerings, because you make it super easy for them to find them close by. Sure, you can argue that there are other places where all your products are showcased in much nicer ways, like your store page or a website, but guess what, those places are several clicks away. Why would you lose the opportunity right when you already have their attention?! Our job is to make it easier, not harder, for shoppers to find the best solution quickly and not stray away.
Why should I pay for the clicks?
That question is understandable. And the other related one is - Would I be stealing from sales that would have come to me anyway? On Amazon, you have NO guarantee that a sale will be yours. There are so many cheaper Chinese alternatives waiting to steal your sales, you’re much better off playing defensive on this pay-to-play platform.
Here’s an example of what we mean:
Notice how many carousel pages comprise the The "Sponsored products related to this item" band on this detail page. A whopping 206! Amazon is slowly becoming a jungle of distractions. And shoppers always have the option to click away. And, yes those clicks can hurt especially if the shopper is “just browsing”. You can always keep the bids low.
What does the data say?
We conducted several multi-month experiments to see how this strategy plays out, and our conclusion is that it works absolutely great. Here’s an example:
We were able to sell products worth 93,684 USD at a 10.64% ACoS. And the upper funnel SKU continued to perform well without losing sales. This means that these were sales that we saved that could easily have gone to a competitor!
We give the funnel-in-funnel strategy a big thumbs up. Go ahead and conduct your own experiments and let us know what your experience was like!
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