7 Easy Steps to Grow Ecommerce Sales from Instagram

If you feel like social networks, such as Instagram, are difficult marketing channels for ecommerce, you’re not alone.

According to our research, social traffic has the worst Conversion Rate for online stores.

In addition, organic social traffic is dwindling fast. According to Instagram itself, people miss 70% of what happens in their feeds.

But as we all know, social media is where people spend most of their time online, and Instagram’s monthly active users number is 700 million. That’s a huge pool of potential revenue.

How, then, can online stores leverage Instagram for profitable growth?

The answer is to use Instagram Ads to distribute your content and Retargeting to close sales.

This is a much more secure approach than trying to create viral posts or paying influencers to share your products.

If you’re already using Instagram for your store you can create a free acquisition report with your Instagram metrics here.

InstagramCTA.jpg

In this article, we’ll show how this strategy can bring followers, likes, comments, and online sales growth. All you have to do is follow these seven easy steps:

1. Distribute Engaging Content First

You are on Instagram to sell, but Instagram users are looking for fun or interesting content. So how do you reconcile these two opposing interests?

The solution is to generate value to visitors that aren’t in a “shopping mood” by using ads to promote engaging content that fits with your store.

Instagram Ecommerce

Real engagement ad from Compass’ Instagram campaigns

Add a retargeting pixel to the campaign’s landing page in your site, then run ads targeting this audience in both Instagram and Facebook featuring promotional and sales content.

This may seem like an extra step, but it’s an effective way to filter your audience and show your products to those who will most likely be interested in them.

Sending someone straight to a product page and asking them to buy on their first visit is like asking someone you just met to go to bed with you. Earn their trust and affection first, then propose a sale.

Here are more examples of this strategy:

Instagram Ecommerce

You might find engaging Instagram content to promote in your feed by running a free report from Simply Measured: https://simplymeasured.com/freebies/instagram-analytics.

Instagram Ecommerce

Or, if you have a business account, Instagram provides insights for each post:

Instagram Ecommerce

You can also create a brand new piece of content for your customers. It could be in the form of:

  • Webinars
  • E-books
  • Guides
  • Podcasts
  • Videos
  • Classes

2. Watch Your Click-Through Rate

The quality of an advert can be measured by its Click-Through Rate (CTR).

CTR is the percentage of people that click on an advert they just saw in their feed. You can monitor the CTR of each advert in your Ads Manager.

Instagram Ecommerce

Most ecommerce adverts on Instagram generate a CTR of 0.6%. The number is low because most marketers try too hard to sell at their first “encounter” with the customer.

Engagement adverts, like the ones above, normally have a much higher CTR since they provide value upfront.

You’ll know very quickly if your target audience is seeing value in your content if your CTR is above 2%. If not, create a new piece of content and try again.

3. Keep Bounce Rate Low

A bounce happens when a user leaves your website without performing any action. That implies they didn’t like what they saw and left right away.

A Bounce Rate higher than the 60% mark is a sign that you need to improve your landing page.

You should add UTM parameters to your ad links to measure their bounce rates via the Google Analytics’ Campaign report (Acquisition > Campaigns).

In the case of the Compass advert above, the URL with UTM parameters was: http://report.compass.co/ecommerce-analytics-guide/?utm_source=instagram&utm_medium=cpc&utm_campaign=Ecommerce+Analytics+Guide

Instagram Ecommerce

4. Improve Conversion Rate

Conversion Rate is the percentage of visitors that convert into buyers.

At first, it may seem that taking users from an advert to a content piece, instead of a product page, would be bad for Conversion Rate. But it becomes easier to convert shoppers with a retargeting campaign later on, once they engaged with a piece of content from you.

If your Conversion Rate from Instagram Ads is too low, you need to work on improving your retargeting campaigns.

You can find the Conversion Rate from your Instagram campaigns in Compass’s Acquisition report, if you remembered to use UTM parameters in your links.

5. Keep Customer Acquisition Cost (CAC) Below Customer Lifetime Value (LTV)

Customer Acquisition Cost (CAC) is how much you spend on Instagram Ads to make a sale.

Monitoring CAC for every channel is important, but could be tricky if you’re running multiple advertising campaigns.

Compass calculates this automatically. It also takes LTV (Customer Lifetime Value) in consideration to show if your ads are generating profits.

Instagram Ecommerce

If the blue bars are below the green line, your CAC is lower than your LTV. It means that your campaigns are profitable.

6. Maximize Revenue per Visitor

Now that you have an engaging and high-converting Instagram marketing strategy, the next question to ask is: “Are these customers valuable to my business? Are they spending a good amount of money in my store?”

If not, you are probably not targeting the right people. Trying going back to your first ads and experiment with different target audiences.

Instagram Ecommerce

Instagram / Facebook audience targeting tool for advertising campaigns

Knowing how much money each visitor is spending can be difficult to figure out, but by running a Compass report you’ll find out:

  • How much money each visitor generates for your store
  • How much money each visitor spends on your store
  • The amount of revenue each Marketing channel brings to the company in total

Instagram Ecommerce

The store above makes $3.30 per Instagram Ad visitor. But only $0.20 per social visitor.

7. Calculate Return on Investment

Instagram Ecommerce

For any business, what matters most is how much money they make per dollar invested.

The online store above, for example, makes $3.57 per dollar invested on Instagram Ads. That’s 3.5 times their investment. There aren’t many financial investments that pay off like this. They should be ramping up their Instagram spending as soon as possible.

That’s it. It’s easy to be strategic and scientific in your Instagram Marketing and run profitable campaigns if you monitor and work to improve the seven metrics above.

Questions? Leave a comment below or get in touch with me at ramon@compass.co.

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  • Krista Lulu

    reporting should be on gross profit not revenue. The cost of providing the sale or cost of goods sold should be taken into account when calculating ROI. If you are only making 10% GP and your ads are costing 10% of revenue, that’s a loss making situation

    • Ramon

      Hi Krista, you are right in saying that gross profit is very important. But it’s also important to look at revenue. My point here is to say that you should keep an eye in both these metrics. The gross profit is implied in the LTV calculation, since Customer Lifetime Value takes gross profit into account (different from Customer Lifetime Revenue that takes revenue into account). I’ve chosen the former. So we’re in agreement here.

    • Anyiam Hearthy Koko

      hello Krista i love the way you explained it, but please i have challenges selling on Instagram , i said this because my my ads are demanding more while am experiencing low revenue

  • I have tried Instagram for promoting my website, but unfortunately they closed my account by suspending it for unknow reason. My website is products shop : Jodyshop.com. I don’t know why they did that?

    • Meghan Page

      I help people learn the ins and outs of instagram on a facebook group I call “Hustle All Day – On Instagram” if you want to observe and learn there.

  • Meghan Page

    I help people learn the ins and outs of instagram on a facebook group I call “Hustle All Day – On Instagram”, and I also sell a service on fiverr if anyone is interested in learning about the secrets of the algorithm and how to market better 🙂

    • Md Muneer

      Hi can you help me
      I want to understand this properly

    • fiverr link

  • Edvards Daniels

    One really powerfull strategy on instagram is to leave engaging comments on your target audience posts. We use Instagram automation tool http://www.autq.us which leaves comments like, “Great photo. You should DM us. We have a great offer for you” And this works extremely good, people are responding us and we can then start a conversation start to earn trust and then sell.
    https://uploads.disquscdn.com/images/dc1f0cebbbbe5e4844a669f7504f45197b081a7e847c2d987ddbf0380df14892.jpg

  • Xristos

    Really solid advice here. Thanks Ramon! our new store thescreensociety.com will leverage your coaching 🙂

  • علي شوشان
  • علي شوشان
  • Gerardo Celaya

    Mi site: https://opcionesbinariasgo.com/ Cant be advertiser on instagran, they close my occount buy my ROI wasn`t very good.

  • Ahmed Alzomor

    What is your advice for retarfeting when I sell expensive products?