How we successfully expanded into the Hungarian market and secured 86% year-on-year growth in turnover
Home & Garden
Google Ads, Facebook, price comparisons, linkbuilding, content, emailing, SEO
Number of Specialists
This established company sells a diverse range of household and DIY products. At the end of 2020, they were looking for a partner to help them expand into the Hungarian market. We shook hands and today Protechshop is growing by 86% year-on-year. It has been a fairly challenging road to success and not without it’s mistakes and lessons learned.
Growth by 86%
All markets combined are growing at an average year-on-year rate of 86%. In May 2022, the newly launched Hungarian market grew by 713% year-on-year.
At the beginning of the collaboration we were given a clear brief by the client – to launch the Hungarian market. We started by translating the website and creating a Google Ads account. During the translation process, we were careful to establish:
- what terms people search for
- and which names are used by competitors.
Protechshop has a huge amount of products, but our dedication and hard work paid off in the form of a functional website that didn’t need retrospective fixes.
Following the campaign launches, first orders started pouring in and the turnover grew exponentially month on month. Our satisfied client decided to task Dexfinity with managing the Slovak and Czech markets, in addition to Hungary.
Obstacles and new Google Ads settings
With the Hungarian account, we opted for a standard account structure focusing on:
- shopping campaigns,
- dynamic search ads,
- a basic campaign for brand expressions,
- and dynamic remarketing.
Dynamic Search Ads (DSAs) were initially both product- and category-based. Later on we selected only those products that Google also preferred.
Product pages provide the visitor with higher quality content, are easier to remarket and have lower bounce rate. All these changes also meant that were able to secure a better bid price for Protechshop.
Varying stock levels increased the number of returns
The biggest challenge in setting up campaigns were products with different delivery times (in stock, longer delivery time or made to order).
We needed to set them up in such a way, that:
- products that were in stock were displayed as a priority,
- customers were also able to see other products along with information about the delivery time.
We found that in the Czech and Slovak accounts, the only products that were showing in the feed (an inventory of products for Google Ads campaigns) were products that were actually in stock. Unfortunately, this parameter was also used for products that had a long delivery time. The numbers of disgruntled customers were mounting. They weren’t receiving their goods and as a result, they were cancelling orders.
How did we reduce the number of returns?
We re-labelled products as pre-order and back-order product categories, i.e. products that have not yet been manufactured and are on pre-order and products that are in stock with the supplier.
Thanks to this parameter, the number of returns is gradually decreasing. We prioritise campaigns with goods that Protechshop has in stock and at the same time we are actively bidding for goods on order from reliable suppliers.
We segment our campaigns by market, as products with longer delivery times still tend to do well in Hungary. The campaign performance is a result of our commitment and hard work on translations and quality data collection, which we were in charge of right from the beginning.
For better business management, we also created a return report for the client, thanks to which they can better manage the return rate and thus improve business performance.
Switching on microconversions
The increase in the number of orders was also attributed in part to a change in the conversion action setting. We turned on the option of add to cart microconversions, which allowed us to collect data about users who placed a product in the basket. Based on this data, we are able to target campaigns more accurately.
We added shipping costs to the feeds
From the very beginning we worked hard to make sure that Protechshop feeds were well-organised. In the beginning, it was difficult to pair products between the online store and Google Analytics.
After that bug was fixed, we got better quality data and were able to bid more efficiently. We also added a transport parameter to the feeds, thanks to which these ads appeared more frequently than those that lack this information.
A nearly 100% increase in the number of paired products
Price comparisons are an important part of Protechshop’s marketing strategy, but initially they lacked sufficient numbers of product pairings. We were able to launch comparison shopping in Hungary successfully using Olcsóbbat.hu and Árukereső.hu.
We needed to set up an XML feed, but initially it was not paired with products. We assigned supplier codes to the products depending on which manufacturer was recognised by Heureka. At the start, the client incorrectly displayed them as unique, resulting in a low pairing rate.
We also fixed categories according to the exact specification of Heureka. For example, it was not enough to specify that the product was in the construction/hammer category; instead, the system specifically required the category “hand-held hammers”.
Over the course of six months, despite the huge variety of products, we managed to:
- increase the product pairing rate from 50% to 88% on Heureka.sk,
- increase the match rate from 40.6% to 84% on Heureka.cz,
- increase the pairing rate from 0 to 58% on the comparator Árukereső.
How did we utilise the strategy?
The costs of using Heureka keep increasing, so we are trying to reduce the credits required. Based on reports, we hide inefficient products and reduce the cost-to-turnover ratio.
Since Protechshop does not have much competition in many categories, we do not bid on price comparison sites.
A simpler structure of social media campaigns
The client had already launched social networks on the Slovak and Czech markets before the beginning of our collaboration. In Hungary, however, we were starting from scratch. When the new market was launched, social networks were allowed higher cost-to-turnover ratios, which we managed to reduce to 10% after some time.
Today, social networks account for 10% of turnover with a sustainable and profitable cost-to-turnover ratio. How did we do it?
- We simplified the structure of campaigns.
- We focused on dynamic product campaigns, which we optimised.
- We combine sales and brand posts.
- We adjusted the lookalike audience from 180-day purchases to 30 days because the client sells a lot of seasonal products.
- When remarketing, we use not only products from the cart (add to cart), but also those that the customer has viewed (view content).
The complicated structure of the campaigns was problematic – each new, unique product required a new campaign. We proceeded to merge similar products under one group. This way we were able to target the same audience and reduce the budget for credit.
An expensive misunderstanding
Our great results were not without their problems. We have to admit that at the beginning of the collaboration, as a result of a miscommunication, we spent a large proportion of the client’s budget.
The originally planned increase in the cost-to turnover ratio did not produce results and the loss of our client was imminent. We sat down at the table together and we each accepted our share of the responsibility for the situation.
We successfully resolved everything and agreed on a long-term cooperation on the basis of success fee (remuneration of work based on the achieved turnover).
Thanks to this lesson, we re-established the communication between the responsible persons and since then, to the delight of both parties, Protechshop has been growing steadily.
Revenue from emailing skyrocketed
Year-on-year emailing revenues grew by 1500%, thereby increasing the share of organic sales across total sales. This allowed us to invest more into paid channels.
In addition to setting up email campaigns properly, we are also working on other organic channels. We are improving the SEO (search engine optimisation) of online stores and strategically building up organic sales so that in the future we can invest ever-increasing sums into paid campaigns in order to maximise overall profitability.
Growth is not an accident, but a strategy
Rapid growth and expansion in foreign markets is very important for our client. In order to succeed, we needed an e-commerce strategy on which to build all other business activities.
When setting up this strategy, we answered key questions relating to the business:
- what channels should we use?
- how can we optimise advertising channels?
- how should we allocate the budget between channels and campaigns, and much more.
For the optimisation of campaigns we use advanced tools such as MagicScript, which allow you to bid effectively within Google campaigns. In addition, this allows us to reallocate the client’s budget according to daily performance and we bid on margin.
When an ambitious client teams up with an experienced international team
Along with the client, we are proud to have achieved great results even in the midst of the post-Covid e-commerce crisis. The newly-launched Hungarian market grew by 713% year-on-year in May 2022.
All markets combined are growing at an average annual rate of 86%. We have managed to fine-tune the project and spread the budget across the right channels.
Protechshop is an ambitious client. They are not afraid to spend on marketing that gets results. This expenditure is helping the business reap rewards with year-on-year sales growth.
The project in numbers
A significant increase in sales in the newly-opened Hungarian market by May 2022 (market entry was in January 2021).
Increase in year-on-year turnover
Increased turnover in all markets combined.
Higher pairing rate of products
Rapid increase within price comparisons sites.
The specialists behind this project
Gabriel works at Dexfinity as Senior Business Consultant & Project Manager. He has built several e-commerce projects from scratch across a number of European countries. He is therefore well-equipped to help clients comprehensively and across all areas, from marketing and logistics to finance and data analytics. He created a functional strategy for our client, Protechshop, and now oversees its implementation to ensure the client continues to achieve the desired results.
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