Success Hacks — 13 Jul 2022
10 Customer Acquisition Trends for Ecommerce
The online shopping industry experienced a major increase over the past year, hitting it’s most significant growth rate in two decades. It’s clear the market is there for brands – you simply have to find ways to meet your customers online.
This is where ecommerce customer acquisition comes in. Here, we’ll explore the latest trends to help your brand gain new clients and increase customer retention numbers. But first, let’s take a closer look at the concept of customer acquisition.
Customer acquisition is the procedure of finding and convincing prospective customers to patronize your ecommerce business. Customer acquisition shouldn’t be random. Instead, it should be repeatable, measurable, and align with a predetermined strategy.
There are many different ways to find and convert customers in the customer acquisition funnel. Today, ecommerce brands tend to use a mix of digital content and partner marketing strategies to increase conversion (more on this later).
Since customer acquisition strategies involve a mix of technology systems, content, and staffing, it has a price. Every new customer who patronizes your ecommerce brand comes at a cost— the customer acquisition cost (CAC).
Below are specific elements that combine to determine customer acquisition cost:
Marketers, sales teams, and IT support are all important for successful customer acquisition in today’s digital marketing landscape. You must account for salaries and benefits paid to every employee contributing to your customer acquisition funnel.
The good news is your ecommerce brand can maximize its customer acquisition while minimizing costs through technology. For example, you can save money by supporting your customer support staff with AI live chatbots. By automating responses to routine queries, you can free up your team to focus on more complex queries, without having to hire and train new staff.
Of course, the technology mentioned above isn’t free. And the technology for running your online store and monitoring marketing strategies will contribute to your brand’s customer acquisition cost too. Additional technology-related expenses include:
Tech costs also become a factor when switching partner marketing platforms. Tools like Affise can reduce these costs thanks to it’s seamless platform migration, but it’s still important to factor in.
The United States has the largest advertising market globally, with numbers sitting at $240 billion in 2020. A closer look at the breakdown shows brands spent $153 billion on internet advertising.
Ad spend is the fuel that runs the sales pipeline of the average ecommerce brand. Adverts can drive traffic to your website, landing page, and sign-up pages – and ultimately, lead to conversions.
Say your customer acquisition strategy involves one of the triopoly – Google, Facebook Ads, or Amazon. Then, your brand will spend a set price per click. This expense adds to your overall customer acquisition cost. It’s the same for print and media advertisements. Each customer you reach when you take out a newspaper advert comes at a price.
Ad spending can be expensive. However, a solid paid ads strategy can result in a massive increase in visibility, sales, traffic, and leads. These benefits prove the merits of ad spending outweigh the cost.
You can only acquire customers when your potential audience interacts with your content. In order to make that happen, you need interesting, relevant content, and that costs money.
Imagine your ecommerce brand is planning it’s marketing strategy for a new product. Perhaps this strategy involves a virtual product tour. Content production costs will include hiring a film crew, equipment, script writers, and an expert editor.
Content production costs also apply to written content, whether in house or via freelancers.
From blogs to social media posts and podcasts, good content means expenses. One way to reduce these costs is to work with affiliates and invest in ecommerce partnerships, as their methods of payment are often based on results, rather than in advance.
Inventory management expenses vary depending on your ecommerce niche and are unavoidable. Even a SaaS ecommerce business will incur significant expenses to manage its products (you’ve got to host that cloud-based software somewhere) and grow its customer base. Inventory management costs are especially critical for ecommerce brands whose products have a limited shelf life.
Here’s an example of how influential inventory costs can be on the customer acquisition cost. Zara is a huge retail chain with over 6,500 stores worldwide. They’re hugely popular and get tons of new customers because they quickly deliver clothing items to customers and are rarely out of stock.
They make this happen by delivering items to every store twice every week. Imagine the logistics expenses that go into ensuring regular delivery across 6,500+ stores, just to make sure each customer gets what they want on demand. That’s how inventory maintenance contributes to overall acquisition costs.
You can calculate ecommerce customer acquisition prices regardless of your marketing channels. First, start by accounting for all marketing and sales expenses. Secondly, you’ll need the number of new customers gained due to these marketing expenses.
The information above should always be for a certain period: monthly, quarterly, or annual. Then, calculate the customer acquisition cost with this formula:
(Sales Costs + Overall marketing costs) ÷ Number of new customers
We’ll explain things more clearly with an example. If an ecommerce brand spends $500 creating Instagram content and gets 50 new customers every month, the formula would look like this:
Marketing and Sales spend ($500) / new customers (50) = CAC ($10 for every customer)
Knowing how to calculate the customer acquisition cost can guide your marketing efforts. By comparing the resultant CAC and profit margins, entrepreneurs and marketing managers can determine how effective a strategy is. This way, they can easily identify the need for a change to drive company growth.
Each marketing channel needs its own unique set of customer acquisition processes. Therefore, not every marketing channel is ideal for your location, niche, and product.
So how should you choose the best customer acquisition channels for your ecommerce brand? Consider the following points:
Comprehensive research should precede any investment or marketing decisions. Your first step is getting the marketing team to investigate global players, competitors, and local businesses in your niche. This can be in the form of a digital marketing report and will help you identify the best marketing channel practices.
Every buck matters for small to medium business owners. Your choice of marketing channel should come with lower cost and the probability of high-impact results. For example, major marketplaces are still effective for ecommerce brands. These low-cost channels can deliver quick online presence, visibility, order bump offers, and leads with focused optimization efforts.
A section of your customers will likely prefer interactions via mail. Similarly, another section may be more accessible via social media. That means you need more than one channel to cater to different groups within your ecommerce brand’s target audience.
Asos is a global online retail company with multiple lead generation systems. In addition to an active Instagram page, Asos also operates a web blog, as pictured below. That way, people who enjoy the brand but don’t necessarily engage on Instagram can still follow their content. It’s great for consumers on the hunt for fashion inspiration, and the brand in terms of organic traffic and leads.
Partnership marketing tools like Affise offer customization and analytical features to grow your business. These features allow you to monitor important metrics during your marketing campaign.
We recommend using the customer acquisition cost as a metric to determine how effective a marketing channel is. The lower the customer acquisition cost a marketing channel offers, the better it is for your business.
Below are ten top trending customer acquisition strategies and how to make the best out of them.
Online advertising is still one of the more straightforward ways to acquire new customers. Many ecommerce brands use platforms like Facebook Ads and Google Ads to reach their target audience.
While Facebook and Google are the biggest paid ad service providers, other social media platforms and major marketplaces also offer ecommerce businesses the opportunity to buy ads. Therefore, choosing the right paid advertising channel for your ecommerce business depends on where your customers hang out online.
The same goes for print and media advertisements. What TV channels does your target market watch? What are their favourite weekly publications?
The good news is that paid ad platforms come with analytical tools that simplify advertising efforts. You can use the analytics to tweak your strategy and make changes to get the most out of your marketing spend.
Influencer marketing can help you acquire new customers while simultaneously improving your branding efforts. This customer acquisition strategy requires partnering with influential brands and people to promote your ecommerce products to their audience.
Influencer marketing is a great way to reach prospects in the awareness stage (the uppermost layer of the customer acquisition funnel). The target audience for this stage is extensive, encompassing people who may be interested in your product.
Usually, these people haven’t made any moves to buy your products. But, you can interact with prospects in this stage by cold-calling them with a phone dialer, email marketing methods, or through social media posts from an influencer.
An influencer here is someone who has substantial following on social media within a particular niche. We often think of influencers as people with millions of followers, but that’s not quite true – they simply need to be influential in their niche. The ideal influencer engages with their audience regularly and has the power to affect their purchasing decisions.
The first step to influencer marketing is identifying your campaign goals and target audience. Then, find an influencer with a following that mirrors your target audience. Set a budget and pitch a partnership plan to the influencer. The final steps include developing campaign messages, creating content, agreeing on a publishing schedule and monitoring the key metrics.
Tech also has a part to play in influencer marketing. Affise is a software that fosters marketing partnerships for brands in different niches. We recommend management platforms with automation tools, ad fraud control, CPAPI offer transfer, and ecommerce specific integrations for your influencer marketing efforts. These unique features will help your online business develop seamless marketing partnerships.
Lead generation involves getting customer information to nurture them until you make a sale or retarget them. One of the best lead generation strategies is gathering email addresses for email marketing efforts. It’s a strategy that can have a huge ROI (return on investment). According to numbers from a Litmus Resource Centre report, email has an ROI of $36 for every dollar.
Your online business can use different strategies to build an email list, including:
Turning a potential prospect into a customer requires trust. And this is a trust you can build by crafting thoughtful marketing emails. Below is an example of a welcome email OptinMonster sends to its new subscribers.
The welcome email knows exactly who it’s audience is – book lovers who want to support indie bookshops. It’s in the tagline, and it uses real-life content from an independent store. It also opens with a clear call to action, referencing potential gift cards readers might have before linking to some handy curated lists.
It then jumps straight into the content loyal customers want to see – new books, with positive reviews and eye-catching colours. It’s simple, but very effective.
People tend to trust those with whom they have a prior relationship. That’s why referral programs are highly influential for customer acquisition. Since people trust their family members or friends, they’re more likely to use a product recommendation from them.
Referral programs shouldn’t be limited to your existing customers. Ecommerce brands can also acquire customers by leveraging a referral program with a non-competitor brand that shares a similar customer demographic. For instance, Affise Reach offers a platform for agencies to meet and partner with brands for all marketing needs.
A referral program that involves your customers may include setting up a rewards system. The rewards system will kick in every time existing customers get someone to purchase a product from your ecommerce brand. Customers may get a bonus or other benefits depending on the referral program. It’s a good way of keeping your customers loyal, and hopefully, increasing their customer lifetime value.
Many marketers tend to dismiss the impact of referral programs as a customer acquisition strategy. However, even search engine powerhouse Google has a referral marketing program for Google Apps for Work. Each user gets a custom link to share with others. Then, they get a $15 deposit for every customer that activates a Google Apps for Work account with that link. So why not follow their lead?
51% of customers start their customer journey by researching the product on Google. Therefore, you can generate plenty of leads by creating optimized content that helps your ecommerce brand show up on search engine result pages.
This is called search engine optimization (SEO), and it involves doing keyword research, website audits, and using the info to create a content plan in order to bring organic traffic to your website.
The best part about search engine optimization is that it can be a permanent traffic source. Great SEO content can rank on Google for many years. As such, potential customers can always find your content and visit your website without paid ads.
With customers in the USA spending near 48 billion USD via mobile devices, mobile optimization is fast becoming a top customer acquisition trend. Mobile optimization involves making your ecommerce website accessible to visitors using tablets and smartphones.
The end goal is a mobile-friendly website that provides a seamless experience for the average customer regardless of device. Whether it’s an iPhone X, Android device, or a Samsung tablet, you want all your customers to have an equally great experience.
No customer wants to scroll horizontally on their phones while exploring a product. Neither do they want to twist their mobile devices awkwardly to find a button. Poor navigation like this can make your customer acquisition numbers suffer. In fact, up to 61% of mobile website visitors will leave an ecommerce store if they can’t find what they need immediately.
In the marketing world, a deft hand is necessary to ensure customers click the purchase button. For example, a customer who calls your toll free numbers has shown interest in buying your product. The next step is convincing them to commit.
For typical brick and mortar stores, live support agents may be enough. But for ecommerce businesses, you can increase the effectiveness of your sales process with chatbots.
Chatbots can make for a seamless customer experience. It offers your ecommerce business the advantage of providing 24/7 customer support. Plus, you can provide this round-the-clock support at a reduced overhead. Just make sure there’s always an option to escalate to an agent, for more complicated queries.
Even major ecommerce businesses are taking advantage of live chat features. For example, customers can now request a Lyft ride using a chatbot available on Slack and Facebook Messenger. The bot can also provide driver information, including location, picture, and license plate number.
You can reduce your customer acquisition cost by increasing your conversion rate. Sounds simple – but how should you go about it? The first step towards achieving greater conversions involves tweaking your existing marketing strategies for greater effectiveness. There’s no better method to find out what works than A/B testing.
A/B testing is an experimentation procedure where multiple versions of a particular variable are tested. The aim is to determine which version offers maximum influence on key business metrics. For instance, you might have two landing pages with different wording on the CTA, in order to see which gets better results.
A/B testing can help fine-tune your web copy, landing pages, paid ads, social media content, and more. You can also switch color schemes, headlines, and images to optimize your marketing efforts.
Digital marketing may be the new cool. But the numbers show old-school advert methods like direct mail and print media are still highly effective. According to MarketingCharts, you’re more likely to acquire new customers through traditional media ads because the audience trusts them.
Internet ads can be intrusive. Some people go as far as using ad blockers to avoid seeing them! But with billboards, flyers, TV and radio ads, you can diversify your marketing channels.
Content marketing can be a great source of leads for your ecommerce business. Say a customer visits your website from Google or Instagram because they like your Instagram posts. This customer is likely to click the CTA button due to their affinity for your content.
The potential impact of content marketing on your conversion numbers is why many ecommerce platforms make it simple for users to create and manage blogs. On your part, the goal is to develop mutual trust with potential leads by leveraging a thoughtful blogging strategy.
For example, you can build mutual trust by sharing accurate, helpful information with the average customer. When your audience trusts you, they’re likely to follow your product recommendations.
You can increase your conversions, average order value, and overall ecommerce profits by taking advantage of the latest content marketing trends. The best part is managing multiple marketing efforts with the right tech partner.
One good example is Affise BI, a set of digital products and services that can manage disjointed numbers from multiple channels. Its extensive tools allow you to make sense of those numbers, giving you the ability to make informed marketing decisions.
Create more opportunities for your business to gain new clients and boost customer retention rates. Try out the customer acquisition strategies and promotional channels described above today.
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