The relation between RTO & ROAS

The relation between RTO & ROAS


On social media platforms digital marketing has become an area for intense competition for digital marketer who strive to get user attention. To earn more profit and lessen your customer acquisition cost your digital marketing game should be stronger. Digital businesses are in more competition than ever so the owner is required to use their marketing and advertising budget efficiently.

Return on advertising spend (ROAS) and return to origin (RTO) are important terms that define growth of business.

ROAS is defined as how much revenue you are earning from the particular advertising campaign. It doesn't include the cost spent on manufacturing or packing of products. It always 

RTO is when an order is placed and it cannot be delivered or is returned by the customer and it has been shaped back to the bar house. It means non deliverability of the product and it is returned back to the seller's address.  

How RTO affect ROAS?

When we advertise our product and customers will buy our product from our website using that digital campaign link. But if a product is RTO then revenue calculated from the campaign will decrease.It multiplies shipping and handling cost. It also blocks inventory. It consumes a lot more time and effort that's not worth selling. Sometimes it also decreases the cash flow causing more loss than original product price. So it becomes difficult to calculate loss over RTO.

How to use ROAS to decrease RTO

Correcting ad strategies and changing ROAS will help in decreasing RTO. Here are a few tips  to decrease RTO using ROAS.

Identify the correct target audience:

While spending money on advertising we need to identify our product is reaching the correct audience. Sometimes products reach the audience and they even purchase the product but sometimes they return to origin. This indicates that ROAS on that ad campaign doesn't give good results. Now it's time for us to change strategies and target the correct audience from that medium.

Identify the cause of return: 

When a person clicks on an ad they expect something from the site. If the audience places their order and finds the order is not the same or it's not packed properly. They will return it. We can find which set of audiences is facing these issues.

Maintain credibility and quality:

 A customer visiting our website will look at what you say about the quality,design and feature of the product. They will analyse according to your description and order the product. If they find the quality of our product is not up to your description then they will probably return the order. To keep check which ad campaign is not providing proper description about your site and product will help to decrease RTO. We should always describe your product in a genuine way. It will increase our website credibility.

Refine your keyword:

 We can optimise the long tail keyword for each product page this will help to attract high quality traffic that's more likely to convert in a credible customer who would genuinely buy our product.

Identify fraudulent: 

A fraud would do things from a fake or somebody else's card. They will receive the product and when the real owner of the card detects a money deduction they will ask the bank for a refund. This will result in loss. They sometimes take the product and use it and return it back. They use products that are not useful for us. To identify the fraudulent coming from which ad campaign will help to reduce RTO.

Identify RTO areas:

 With the help of ROAS, we can identify the places or the audience which is returning the order more frequently. We can ban cash on delivery in those areas. Cash on delivery usually makes customers more relaxed about payment.

Identify which product is on demand 

With the help of RTO we can identify which product is going well with the customer and which product is usually returned the most. We can analyse the issue. You can invest more in advertising other products than the product which is returning the most. Meanwhile we can improve the product quality or other issues you're facing.

Find issues with packaging in certain areas:

If customers from a particular area are returning orders more frequently. They are complaining about shabby packaging or tear packaging then choose those and put more effort into packaging order for those customers.

Giving special offers to credible customers:

Once you identify the credible targeted audience we will know how to keep them loyal to you. The set ad campaign we get more genuine buyers to pop them some special offers so they can't refuse to buy from us. 

You are investing in your business with your money as well as time. You wish to reach the audience that you deserve. We would love to help you to reach your goal. You know your business well and we know how to sell your product with our website designing and digital marketing. To reach your business goal contact  webUtics.

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