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.
In terms of ad dollars, the law of supply and demand dictates that the more brands bid on your typical advertising keywords, the higher the price Google, Bing, and other search engines can demand. Since thousands of brands pivoted to or invested in e-commerce during the pandemic, the demand far exceeds the supply; therefore, ad budgets will need to rise quickly.
If you remember from the previous chapters as well, direct-to-consumer brands have larger war chests and can afford to outspend you. The result is higher ad costs and lower margins as your cost-per-acquisition goes up. Your ad dollars are stretched thinner if you factor in the inflationary economy we’re currently in as well. Acquiring a customer will become quite pricey in 2022 and beyond.
Ironically, though, having a data-driven, customer-centric retention plan will actually help your acquisition efforts. As we’ve discussed before, you can take your VIP customers, send their data over to Google and Facebook, create lookalike audiences just like your VIP customers, and run ads to them.
Compare the return-on-ad-spend (ROAS) for those ads vs. running your typical ads; the return will be significantly higher.
Here’s another example: pull your unsubscribed list, send that to Facebook, run a win-back campaign to those customers, and get them back as customers or signups. All these acquisition strategies require a retention plan that identifies customers and their lifetime value.
Unless your items are high AOV and your margins are superb, most brands won’t be able to weather the ad cost increase.
Considering customer acquisition can never be off the table, offsetting the rise in low-ROI acquisition costs with a high-ROI retention strategy becomes even more important now.
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