This ecommerce strategy article is an excerpt from our new book, The Ultimate Ecommerce Email & SMS Playbook. We’re diving into our ecommerce strategy chapter focused on the 7 Reasons Why Ecommerce Customers Leave Your Brand.
Option 1: Invest in Social Media
Let’s dive into one of the more popular options that brands are using to grow customer loyalty: organic and paid social media.
Everyone’s on social media. You can run ads, leverage Instagram influencers, and build organic reach with gorgeous videos and posts. The social platforms are endless as well – Twitter, Pinterest, TikTok, and others are joining Meta as platforms with great consumer reach. You can run funnel-based ads and retargeting ads, track user behavior on your website and build lookalike audiences as well. Investing in a competitive strategy on social media sounds very appealing.
So, let’s see if social media, as a whole, helps you compete with the top seven reasons customers leave.
✓ Yes, you can create a unique brand story with social media. It works. Brands are out there running great ads, telling great stories through video and carousels, and leveraging user-generated content in their content.
In fact, look at the steady increase in social media ad spend. Social ad spend is consistently growing at around 50% every year. And even if you settle for a low return on ad spend (ROAS), it’s not a bad investment.
Here’s the downside, though. With all that paid social traffic and investment, organic reach is taking a major hit. Across all major platforms, social posts are simply not reaching people all the time.
And the traffic that does show up to your website? They increasingly seem to be automated bots that inflate your traffic numbers. In order to maximize the potential of social media, you have to actually spend money to tell your story; organically, you won’t find much of an audience.
Long story short: yes, check that box. You can create a brand face and unique story using social media; you simply have to pay to play.
❌ Here’s where social media doesn’t work: it does not do great customer personalization. You can build lookalike audiences and do some fantastic segmentation options – though still limited primarily to Facebook engagement only – but when it comes to personalizing the ads to every user, you become very limited.
Retargeting ads with items customers shopped or looked at is possible, but that’s a minor transactional part of personalization. You’re not able to get to the root of this customer’s challenges, needs, and pain points using social media. Segmentation may be pretty vast, but personalization is quite lacking on social media. As of the writing of this book, a recent Wall Street Journal article highlighted that Meta stumbled trying to navigate their paid e-commerce ad options. So, personalization via social media does not check that box.
✓ Social media is becoming better at crafting a perfect omnichannel experience. More and more customers are DM’ing brands on Messenger, Instagram, and WhatsApp.
Brands are using social as customer service, encouraging reviews, dialogue, and education. So, yes, we can give social media an omni-channel check because it’s being used the way it should be used: being social.
✓ You could also build a community of value out there, although you’re kind of leasing space on Meta and not really owning it. The upside of social is that you can build a tribe and share positive news, great products, and create active groups.
The downside is that one black eye will go viral really fast. Take Peloton; as I’m writing this, they’ve faced major stumbles in their business – TV deaths, product recalls, and slowdowns in demand – and the news spread like wildfire across social media. But if your brand and product are high quality, you can build a strong community of value with the right people. So, let’s give the benefit of the doubt and check this box.
❌ But you’re still placing social media at the center of everything you’re doing. You’re still relying on Meta to be the middleman for your story, success, and tribe. That’s a major red eye and fails this checkpoint. Doesn’t need much more explanation here; you can’t say you own the customer relationship when Meta is in the middle of it all.
❌ Because Meta wants to remain the middleman, they have little incentive to share data with you. In their drive to remain the middleman, Meta, Twitter, and even Google will not give you enough data-driven insights to help you make bigger business decisions.
The data they do provide is geared around helping you run better ads, build better audiences, establish in-social groups and increase social engagement. Those insights don’t help much if you’re trying to run an e-commerce store beyond social media.
❌ The biggest fail of rolling out a social media strategy to help you compete is that everyone else can do the same thing. Amazon, D2C startups, and unicorn brands are doing the exact same thing right now; they’re already three years ahead. In fact, the top 1% actually get more help from Meta than you do, simply because they spend more. So, you definitely won’t overcome their budgets, reach and influence using social media. You’re outspent, outreached, and outgunned.
Let’s recap. Going all-in on a social media strategy to help you compete against the top brands has pros and cons:
✓ Social helps you create a brand face, story and mission
❌ Social is highly limited in customer personalization
✓ Social establishes a great omni-channel experience
✓ Social helps build a community of value that’s unbreakable
❌ You lose full ownership over the customer relationship
❌ Social has scarce data to help you be customer-centric
❌ Brands can do the same on social & outspend you
Investing in social media, organic and paid, does not hit every single checkbox, and you still remain highly vulnerable. Although you may be fine with rolling this strategy out regardless of its failings, remember that a leaky bucket will eventually lose all water. It just takes longer.
As a second check, let’s run the social media option through our litmus test to see exactly if maybe it passes all those tests.
- Social does not help you level the playing field. The top brands can do the exact same thing you’re doing.
- You lose ownership of data and destiny. You’re relying on Facebook and Meta to do that.
- You are investing your dollars smarter. If you have a great paid social team and a generous budget, you can see ROI here. The downside is attribution to social media efforts is kind of low. And then there’s Apple with their iOS updates screwing up your results. But social is a better investment than other channels.
- It doesn’t keep customers loyal. If you’re spending money to keep your customers, you have bigger problems. Paid social is best for customer acquisition, not retention, and your brand, service, experience, and product should retain customers.
- It can generate profitable revenue. Some brands could see as much as 20x returns on paid social, so, again, if you have a crackerjack team on paid social, you can be profitable. Until the next Apple iOS or Meta algorithm change, that is!
So, the litmus test fails with only 2 out of 5 KPIs that actually help your business stave off competition and keep customers loyal.
❌ Level the playing field.
❌ Maintain ownership of data & destiny
✓ Invest your dollars smarter
❌ Keep customers loyal
✓ Generate profitable revenue
Once again, this isn’t a knock on the power of social media. You should definitely have a social media strategy in place regardless of this analysis. This recap is simply showing that there may be a better (or worse) strategy out there that will help your brand keep its customers and stave off the competition.
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