Ecommerce customer acquisition: How to acquire a steady flow of high quality customers for your online business
In an ecommerce business, just like any business, you need a constant flow of new customers for the business to work. In order to acquire new customers, you need to drive traffic to your website.
You do that by getting your products in front of the right people at the right time. Depending on your target audience, you can use a combination of search engine optimisation, social media marketing, pay per click advertising, affiliate marketing and public relations.
In this article:
Before you start
- Define Your Ideal Customer
- Define the Cost of a New Customer
- Factor in Customer Lifetime Value
- Define your Acquisition Channels
Lay the groundwork
In this article, we’ll run through each acquisition channel in turn. But first you should understand who it is you want to acquire, and how much you can afford to spend to acquire them.
Define your ideal customer
So, the first stage of your customer acquisition plan is having a good understanding of who your ideal customers are, what they’re interested in and what motivates them to take action. Knowing and understanding who buys, or is likely to buy is essential to help maximise the return-on-investment from your marketing spend.
One method to defining your ideal customers is to create buyer personas, or fictional, generalised representations of your ideal customers. Facebook Insights and Google Analytics audience reports provide robust information about your customers.
If you’re just starting out, you can use a tool like SimilarWeb to analyse competitor traffic and get a breakdown of audience interests and demographics.
You can also visit competitors’ blogs and social media pages. Just look at the people who are commenting and interacting and click through to their profiles to learn more about them.
Define how much you can spend to acquire a customer
At Hang Ten Media we run customer acquisition campaigns for our clients with two key metrics in mind:
- The cost to find a new customer
- The revenue we were able to generate from that group of new customers.
Our goal is to acquire high quality customers at the lowest possible cost.
Marketing thought-leader Neil Patel defines the cost to acquiring a customer (CAC) as the cost of all of your sales and marketing expenses over a given period of time, divided by the number of customers acquired in that same period.
If, for example, you spent €10,000 in a 30 day period on advertising and you acquired 500 new customers, each customer has cost you €20 to acquire.
Now work out how much revenue these new customers have brought you, and look at your acquisition cost as a percentage of the average order value (AOV).
In this example, if your AOV is €100, then you’re spending 20% of the sale value on customer acquisition. We define this as the percentage Cost Of Sale (COS). The lower this percentage, the more profitable your campaigns.
Don’t forget about customer lifetime value
You should also factor in your average customer lifetime value (CLV). Many customers will come back and spend again, perhaps multiple times over the course of their interaction with your business. That means that your percentage cost of sale is effectively lower, freeing up some marketing budget to acquire even more customers!
Define your acquisition channels
Once you have a good idea who your ideal customers are, you need to determine where they’re hanging out online. The goal is connect with them emotionally, encourage them to click through to your website and then make a purchase.
This process defines the purchase funnel. Your acquisition channels will include touchpoints at each stage of this funnel.
Social media is a great way to reach people at the top of the funnel and create brand awareness via emotionally driven content. The goal here is to engage, inspire and persuade potential customers. Facebook, Instagram, Twitter and Pinterest are all great for engagement and driving traffic.
You can extend your social media reach by working with influencers and leveraging their audiences. Set up an affiliate program and reward your partner influencers with a percentage of sales.
As an ecommerce business focused on sales, you’re naturally going to want to target potential customers who are towards the bottom of the marketing funnel. Search engine optimisation and pay per click advertising are two of the best channels you can use to reach those people who are ‘ready to buy’.
A longer term strategy is to put your website to work as a customer acquisition tool. By optimising your site for the search engines (SEO), you can generate a steady flow of new customers for free.
For keywords you can’t yet rank for organically, you can set up pay per click advertising campaigns. And Facebook’s ad platform is great for extending your reach on social.
Leverage your growing audience and website visitors with a remarketing campaign aimed at staying connected with your target audience and turn your fans into customers.
Let’s take a look at each of these acquisition channels in turn:
1. Search Engine Optimisation (SEO)
In ecommerce, we view SEO (search engine optimisation) as the holy grail of customer acquisition. Your SEO traffic is the free organic traffic you get from people clicking on a link in the search engine results. The more quality keywords you rank well for, the more organic traffic you will generate and the more customers you will acquire.
Every click is a potential customer entering your acquisition funnel.
For the ecommerce businesses we work with, we like to look at SEO revenue as a percentage of overall revenue. The split between organic and paid traffic varies according to lots of factors, but as a general rule, you should aim to generate 50% of your revenue from SEO traffic.
Once you’ve done the hard work to get your web pages ranking at the top of the search engine results pages (SERPs), all those clicks are effectively free.
You may find that your conversion rate is a little lower from SEO traffic as you have less control over the SERP text than you do with ads, but that doesn’t matter – every click is a potential customer entering your acquisition funnel.
If you run an ecommerce business, this is the low hanging SEO fruit to focus on:
Optimise Product Descriptions
Put yourself in your customers’ shoes and think about how they’re likely to search for the products you’re selling. That’s the keyword or phrase that you’ll need to include in your product title and description.
Big multi-brand ecommerce companies get this wrong all the time.
If you’ve got a website with 100s of products, you don’t need to optimise them all at once. Run a ‘top products by units sold’ report in Shopify or 80:20 rule.
Title Tag & Meta Description
When you do a Google search, the Title in the Search Engine Results is the Title Tag and the sentence underneath is the Meta Description.
In Shopify, you can modify these by clicking on the ‘Edit website SEO’ link at the bottom of product pages.
Execute an SEO first strategy to drive customers with high purchase intent to the WT Brands’ site.
Research high volume/low competition search terms and partner with the WT content team to deliver long-term value through evergreen content.
You want to aim to get at least half your website visits from free clicks. If your paid advertising generates a positive ROI, you should definitely be doing it.
Make sure your website loads fast. Google has a mobile only search engine as well as one for your desktop and laptop devices. Google has been using site loading speed as a ranking factor since 2010. In July 2018, Google started using mobile page speed as a ranking factor in their mobile search results.
That means speed is more important than ever. Just because you have a fast 4G or 5G phone and your website loads quickly for you, it doesn’t mean everyone has the same experience.
Use Google’s PageSpeed Insights tool to get tips on what to fix to make your site faster.
A quick win is to make sure your images are optimised. With properly compressed images, your website will load faster. Faster loading pages will improve your search engine ranking.
Size your images correctly according to the dimensions recommended by your website or theme developer, and save them for the web in Photoshop.
If you don’t have Photoshop, you can bulk compress images using a tool like TinyPNG. If you’re on Shopify, there are apps that can help optimise images once they’re uploaded. Try Image Optimizer or Crush.pics.
2. Social Media Marketing
When you’re introducing a new product to potential customers, it’s hard to beat social media. You can use photos and video to engage with your followers and extend your reach with highly targeted ads.
Set up your profiles and start building a following by posting engaging content on a regular basis. Use a tool like Hootsuite to schedule posts across multiple platforms and streamline your social media management.
According to brandwatch.com, social media users grew by 320 million between Sep 2017 and Oct 2018 and on average people have 5.54 social media accounts.
For you as a business owner, knowing the statistics behind the social networks can inform strategy and ad spend, allowing focused targeting of users. However, there are over 15 major social networks, so for the purpose of this article, we’re going to focus on 3 of the best for driving ecommerce sales – Facebook, Instagram and Pinterest.
Facebook is the world’s largest social network and despite the company recently being in the news for the wrong reasons, Facebook’s users haven’t really changed their behaviour. And with 1.52 billion daily active users chances are you’ll find a significant portion of your audience on there.
The fact is, being on Facebook makes it easier for people to discover and interact with your brand online.
When you’re thinking about marketing your business with Facebook, there are two essential tools – Facebook Pages and Facebook Ads.
Set up your Facebook Page
A Facebook Page is a hub for you to provide information about your brand and it is an excellent marketing tool.
Save time and set up your page the right way by following these straightforward instructions from Hootsuite (they know a thing or two about marketing on Facebook). The best part is Pages are free and easy to set up. You’ll have your page set up in under an hour and it can look as professional as one of the world’s top companies.
Add your company logo to your profile image and make sure it still displays correctly when it’s cropped to a circle. Add a cover image that encapsulates your brand and adds value at the same time. Some companies include text in the image with an offer for first time customers.
Fill out all of the fields in your Facebook Page’s About section. You may be tempted to leave these details for later, but this section is often the first place people look for information about your business and is essential for building trust with new customers. It’s also a good idea to add information about your Facebook Messenger schedule, such as the times your customer service is available and estimated response time.
Facebook offers one of the most powerful targeted advertising platforms on the internet. You can target people based on pretty much any interest or demographic you can think of. You can even layer interests to include or exclude segments to really refine your audiences.
At Hang Ten Media, our strategy with new business is to cast the net wide with nice broad audiences. We test lots of different ad formats and creative, pause what’s not working and double down on what is.
As soon as we’re generating traffic, we set up Lookalike campaigns that are optimised for conversion.
And, once those qualified clicks are coming in we can plug your shop’s catalogue into Facebook and remarket with Dynamic Ads.
To track performance, build lookalike audiences and run conversion optimised campaigns, you’ll need to have the Facebook tracking pixel installed on your ecommerce store. Follow these instructions to create a pixel in Facebook Business Manager.
Once you’ve created your pixel, you need to add it to your website. If your ecommerce store is on Shopify, you can easily add your Facebook pixel ID to your online store preferences.
Facebook ads offer a watertight acquisition flow that you should absolutely get set up for your business.
With over 1 billion users worldwide and sky-high user engagement levels, it’s no secret that your business needs to be active on Instagram.
The first step to marketing on Instagram is to increase your following on a steady and consistent basis. After all, the more people that come in contact with your brand and follow you on Instagram, the larger your audience is that you can potentially reach every time you post. Jonathon Long from Uber Brands suggests 7 tips to help grow your brand on Instagram.
One of the challenges of marketing on Instagram is that you can’t add links to posts for your audience to click. You can only link from your Instagram profile. Buffer’s Courtney Seiter suggests that if you want to send your followers to a specific link (without paying to sponsor the post), you should change the link in your Instagram profile and add the comment “link in bio” to a corresponding photo or video.
In addition to building a strong Instagram profile and engaging followers through regular posts, you can expand your reach and customer acquisition through Instagram ads.
Instagram offers five ad formats: Stories ads, Photo ads, Video ads, Carousel ads and Collection ads. All are seamlessly incorporated into Feeds and Stories for a smooth user experience.
We find that carousel and collection ads perform particularly well. Carousel ads let users swipe through a series of images or videos, with a call-to-action button to connect them directly to your website. Collection ads allow you to combine video and images to visually inspire and help your audience discover, browse and purchase products. Try both and split test lifestyle images against product on white images to see what resonates best with your audience.
Ads can be managed with Facebook Business Manager, so you can take advantage of Facebook’s wealth of user information for laser targeting your audience.
You’re probably familiar with Pinterest as the social media platform that lets users save images (pins) from around the web. But, did you know that Pinterest can aslo be a significant driver of traffic and sales?
That’s because Pinterest users are actively searching for inspiration and each pin contains a link to the source page. If that’s a product page on your website, there’s a chance you could acquire a new customer.
Shopify’s Ana Gotter says that Pinterest can be a marketing powerhouse for online stores. Users buy products they stumble across on Pinterest organically at a much higher rate than the average social platform, and that’s partially because Pinterest users are proactively searching for things rather than just scrolling through a feed.
The first step to marketing on Pinterest is to set up an effective profile. Make sure you set up a business account rather than a personal profile. Once you have a business account, you’ll get better analytics and can start running ads.
Pinterest is perfect for product discovery, so if you have a product to sell, it’s a great place to run campaigns to grow online sales.
There are two types of campaigns available – Promoted Pins where you boost the reach of a standard pin to a targeted audience, and Shopping Campaigns, which pull directly from your product catalogue to create ads at scale.
Once you have your business account set up, it just takes a few steps to get started with Pinterest Ads:
- Choose a goal that reflects what you want people to do after they see your ad. Most ecommerce businesses will choose ‘Get traffic to your website’.
- Name the ad group and set your daily budget. Ad groups works as containers for Promoted Pins and give you more control over your campaign budgets and targeting.
- Create Pins and pick one to promote.
- Define the audiences you’d like to target. You can combine interests and keywords to reach the people who are most likely to show an active interest in your ads.
When driving sales on Pinterest there are three things to bear in mind with your creative. Firstly, your ads will perform better if they’re relevant to seasonal events or special moments. Secondly, as with all ads, the greater the consistency between your Pins and your landing pages the better the results. Thirdly, use the description field to write your ad text. Include pricing information and a call to action.
Influencer marketing is an excellent way to extend your brand’s reach in an authentic way on social media.
Right now, Instagram is the best performing channel for influencer marketing.
The first step is to find the right influencers who are popular within your specific niche and aim to build a team of brand ambassadors.
To find top influencers, you can search relevant keywords and hashtags within Instagram, or to speed things up, you can use a tool like Ninja Outreach.
The goal is to nail down the perfect Instagram influencers who cater for your specific target audience. You’re not necessarily looking for Instagram superstars, but rather mid-level influencers who have a niche engaged following and have a consistently good like-to-follower ratio.
The next step is to reach out and form a partnership. Prepare a brief of the type of content that you’d like them to post, whilst giving them the creative freedom to create content for their feed. You could prepare a mood board to give influencers a clear idea of the type of images you want associated with your brand.
To track performance beyond likes and views, you can ask influencers to include a tracked link in their bio and direct followers to their “link in bio”, as links in captions aren’t clickable on Instagram. The link should click through to a landing page with a lead capture incentive, such as a competition or a special offer.
If you’re on Shopify, you can set up an affiliate program through Refersion. The app allows you to set up a conversion trigger to automatically credit an order to an affiliate without the customer having to click on a referral link.
You can for example create unique coupon codes that are specific to an influencer. If an order uses that coupon code, the influencer will be credited for that order, no affiliate link required! This is particularly useful for Instagram and Snapchat influencers.
3. Paid Search (PPC)
Your ecommerce paid search acquisition campaigns should support your overall customer acquisition strategy.
If you think about your acquisition funnel, you can aim to layer your ad campaigns to target each stage.
At the top of the funnel, you can use Google Ads to run a brand engagement campaign. In the same way as your ‘top of funnel’ Facebook ads, the purpose is to build awareness and positive associations with your brand and your products. Google Display Ads are best for this.
Google Ads are also great for targeting customers towards the bottom of the funnel, or those ready to buy. Using a combination of Search Ads and Shopping Ads works well.
Google Display Ads
The Google Display Network (GDN) is a full-funnel channel that can be used to drive shoppers from discovery all the way down to conversion and repeat purchase.
The GDN is particularly well suited to help your brand to reach potential customers early on in the buying cycle, for instance when they’re just discovering your brand or still researching and evaluating their options.
You can use placement targeting in Google Ads to help reach a relevant audience for your brand. Rich-media ad formats including images and video help you make that emotional connection with your audience.
Once a potential customer has shown interest, you can shift your creative to something more product-centric like a dynamic product ad.
Then, once your prospects are in the mid-funnel you can push them through to conversion with Remarketing Lists for Search Ads (RLSA) and your Facebook remarketing ads.
Google Shopping Ads
Google Shopping Ads are product listing ads (PLAs) that are featured across Google’s Search and Shopping results.
These product-based ads are important for ecommerce businesses because they:
- Feature products at the top of Google’s search engine results page, even before organic listings for some keywords.
- Include visuals of the product.
- Can include additional information that boosts engagement, such as prices, reviews, and special promotions.
- Can support upper funnel awareness initiatives as well as drive lower funnel conversions.
Unlike keyword-based Search ads, Shopping ads are bid on at product level and are based on product feeds that are uploaded to the Google Merchant Center.
However, uploading your feed isn’t the end of the story; Shopping ads have become become increasingly competitive and the average cost per click (CPC)
continues to rise every year.
Search engine marketing specialist agency, Elite SEM suggest that improving your performance on Google Shopping depends on three key areas: Optimising your product feed, improving your bidding strategy and developing a more granular campaign structure. Of these, improving the quality of your product feed can have the greatest impact on the performance of your Shopping campaigns.
Shopify’s Google Shopping app automatically syncs your products and relevant information about your store with the Google Merchant Center. But, for most retailers, this is no longer a set it and forget it channel. If you want your Shopping campaigns to deliver a positive return, you’ll need to optimise your feed and your campaigns.
Google Search Ads
Search ads appear next to search results across the Google Search Network when people look for the products you offer. They are pay per click (PPC) meaning that you only pay when people click to visit your website.
If you’re a new brand introducing a new product, you’ll be restricted to mostly generic keywords like ‘wetsuit’ or ‘3/2 wetsuit’ until brand awareness reaches a point where you can introduce brand and product name keywords with greater purchase intent like, ‘rip curl flash bomb 3/2 wetsuit’.
To maximise your return on ad spend, it’s a good strategy to employ a granular approach to campaign structure. That way you can ensure that searches trigger highly targeted ads which click through to highly relevant landing pages. This maximises quality score, improves click through rate and reduces cost per click.
As a starting point, we recommend using Broad Match Modifier keywords and monitor performance. Then pause non-performing keywords and move top performing keywords into their own Exact Match campaigns. This means budget is consistently being focused on the best performing keywords.
Since quality score is mostly based on click through rate, you can use Google’s built-in split testing feature to work out which ads perform best.
And, you can use ad extensions to give people more reasons to click. Extensions add useful business information below your ad including category links, landing page links and links to special offers, etc.
Shopify make it easy to add a conversion tracking tag to your website to track campaign performance.
And you can also add the Google remarketing tag to more easily create remarketing lists by allowing you to place one tag across all pages on your site. Once your tag is in place, you can launch powerful remarketing campaigns in your Google Ads account with tailored, dynamic ads based on the pages people visited and actions they took on your site.
4. Affiliate Marketing
Affiliate marketing can provide great return on investment when done right. A successful campaign is about matching business objectives to individual affiliates to create a group of partners who operate as brand ambassadors. You reward them with a commission based on a percentage of revenue generated.
Typically, the higher the percentage of the total revenue you’re able to pay your affiliates, the more traffic and sales you’ll receive.
You’ll need to sign up with an affiliate network who will interface between you and the affiliates. They’ll manage the click and conversion tracking, plus the commission payments. In Europe, the biggest networks are Awin and Webgains. If you’re on Shopify, the Refersion app provides effective affiliate management and a simple integration with your store.
If budget allows, it’s worth considering using a performance marketing agency to ramp up affiliate recruitment and keep the affiliate community engaged.
5. Online PR
The goal with public relations (PR) is to tell the right story to enough of the right people. Once you have a handle on who our customers are, you’ll have a pretty good idea about where they’re hanging out and which publications they’re interested in.
If you have multiple buyer personas, you’ll have multiple media lists to build. You’ll then need to reach out to editors that cater to each audience.
Access to a media database makes it easy to compile a list of editors. When reaching out to editors you need to keep it as personalised as possible by addressing them by their first name, mentioning an article they wrote and making them feel like you’ve done your research on them.
Once you reach out with a pitch you should define a process for how to respond, such as using Hubspot’s free CRM combined with the custom email templates tool.
PR outreach is a time consuming process, so you could decide to use a PR agency, but that’s expensive and results aren’t guaranteed. Or you could try a mid-way solution like PR Volt which has a database of thousands of news sources and can help you determine the editors most likely to respond to your pitch.
Ecommerce customer acquisition requires a multi-channel approach. Once you understand who your best customers are, your aim is to get your brand in front of them and encourage them to move through your acquisition funnel.
For ecommerce, you can use a combination of search engine optimisation, social media marketing, pay per click advertising, affiliate marketing and online PR.
Cast your net wide and reel your prospects in. You’ll soon begin to understand the channels that work for you. Focus your efforts and acquisition spend on what works best for your business and you’ll develop a scalable customer acquisition strategy that will deliver a constant flow of new customers at a sustainable cost.
By rights, as your traffic increases should your sales. If they’re not it’s a sign that something’s amiss. If you’re confident that the quality of your traffic hasn’t decreased, then that something is your conversion rate.
So how do you convert those extra visitors into buyers? The answer is conversion rate optimisation.