How to Improve ROAS This BFCM season

Jessica Hulett

Oct 15, 2024 • 5 min read

As a retailer, you’re likely seeing a lower return on ad spend (ROAS) than ever before. And the closer we get to BFCM, the more challenging digital advertising is going to be.

Why? A few reasons, actually. First, there’s increased competition. Almost every brand runs a Black Friday deal, and they all use the same channels to promote them.

This demand leads to the second issue: climbing customer acquisition costs. They keep rising year over year, and during BFCM, they rise about 13% higher than during non-peak shopping times.

There’s also the added wrinkle of ever-tightening privacy regulations. Policies like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) set high standards for data protection and consumer privacy. These guidelines are great for consumers but make it harder for merchants to measure conversions and target the right shoppers.

While finding more ways to acquire new customers is at the top of every brand’s BFCM wish list, there are only so many marketing channels at your disposal. A better strategy is to focus on boosting customer retention by improving the customer experience. Not only will this help you improve ROAS, but it’s also a more sustainable long-term strategy for your business.

4 ways to improve ROAS with an enhanced customer experience

When you prioritize customer experience, you’re actually helping to improve ROAS. The better the experience, the more likely customers are to buy from you again. It's something that customers want and that not enough brands focus on.

There are many ways to improve the customer experience, and here are some of our favorites:

Provide a personalized experience
Set the right expectations
Keep customers notified every step of the way
Make returns easy and hassle-free

All of these things will help improve customer satisfaction and boost retention. And multiple studies have shown that acquiring a customer costs five to 25 times more than retaining one. Anything you can do to focus on retention will help to lead to higher ROAS.

So, let's take a look at each of these strategies in detail.

1. Provide a personalized experience

McKinsey research shows that 71 percent of consumers expect companies to deliver personalized interactions, and 76 percent get frustrated when it doesn’t happen. If you want customers to come back after BFCM, personalization is crucial.

Some parts of the customer experience are easy to personalize, like cart abandonment flows, tracking notifications, and loyalty program updates. Others require more data, like personalized product recommendations — which retailers may be lacking when it comes to new BFCM customers.

AI-powered tools like AfterShip Personalization help merchants deliver hyper-personalized product recommendations that drive repeat purchases — even when there isn’t much historical data on customers. The solution uses machine learning to help you suggest the right product to the right customer at the right time, boosting conversion and ROAS.

2. Set the right expectations

After a customer makes an online purchase, their top concern is when it will arrive. Too often, customers aren’t given the correct information on when to expect their packages, or worse, any information at all. And even if they love the product when it arrives, a bad post-purchase experience may deter them from returning.

Retailers wanting to boost ROAS and retention must deliver accurate, real-time information about shipping and delivery status. This is especially important during BFCM, when warehouses and shipping companies can get overwhelmed by the sheer volume of orders, and delays can happen.

Using a tool like AfterShip EDD ensures customers get estimated delivery dates that reflect changing conditions and are always up-to-date. Setting and meeting expectations helps build trust in your brand and increases the likelihood of a repeat customer.

3. Keep customers notified every step of the way

The last thing any customer service team wants to deal with during BFCM is a bunch of WISMO (“Where is my order?”) inquiries. Don’t be afraid to overcommunicate with your customers — proactive updates at every stage of shipping and delivery will give them peace of mind and reduce strain on your support agents during peak times.

In order to deliver timely and accurate tracking information, brands need to know what’s happening across their carriers, in all locations. This is especially important if you sell via multiple channels, like eCommerce marketplaces, social media, or offer BOPIS (Buy Online, Pick Up In Store) shopping options at a brick-and-mortar location. Using a solution like AfterShip Tracking ensures real-time visibility and automated updates for customers, reducing WISMO tickets and helping customers avoid porch piracy during the busy BFCM season.

4. Make returns easy and hassle-free

Finally, with increased BFCM sales comes an increase in returns. No merchant likes it, but it’s inevitable. According to AfterShip’s BFCM eCommerce Returns Report, December sees the highest rate of returns, with a spike 30 days after Black Friday. Whether that’s due to impulse buying, buyer’s remorse, or unmet expectations, retailers need to be ready to handle the influx.

A bad returns experience greatly decreases the likelihood that a customer will return. Who will buy from you again if they know that if the item isn’t right for them, getting a refund is going to be a hassle?

On the other hand, a good returns experience can help you improve the likelihood of a repeat purchase, retain more revenue, and in some cases, even grow revenue. And the more flexible, the better. Our research shows that brands that offer three or more return resolution options see a revenue retention rate of more than 30%, and those that offer exchanges for any item see almost 12% in increased upsell revenue.

Improving ROAS doesn’t have to be complicated

By following these four strategies, you can improve the customer experience and boost retention. And that will lead to higher ROAS for your eCommerce business.

With the right solutions in your tech stack, you can build a BFCM ROAS strategy that runs on autopilot, delivering frictionless shopping and post-purchase experiences, offering peace of mind, and delighting customers.

The more unified those solutions, the easier it is to build a seamless customer experience. AfterShip’s All-in-One Solution helps brands widen their profit margins for BFCM and beyond, by driving sales, reducing operational costs, and recapturing lost revenue using advanced AI and automation across the eCommerce journey. Learn more.