With the right marketing strategy, your e-commerce business can reach, convert, and retain its most valuable customers.
Contemporary e-commerce businesses aren’t just competing against their comparably-sized peers. They’re also up against some of the most powerful digital marketplaces in the world, like Amazon and Alibaba. Success for e-commerce businesses of all sizes depends on knowing who their target audience is, how best to connect with them, what targets to set, and how to optimize digital commerce properties for conversion. These are the elements of any robust e-commerce marketing strategy.
In this article, we’ll highlight some of the techniques and tactics that e-commerce marketers should consider when determining how to reach their most valuable customers.
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Identify your target audience
Most successful e-commerce platforms won't meet every need for every customer — even Amazon started as an online book distributor. When you’re launching an initial marketing strategy, focusing on a target audience is essential. Which is why your starting point must be understanding what drives your potential customers:
Segment existing customers: The most valuable data at your disposal is that of customers who already want to buy your product. Segment any available sales data by age, demographic, location, education, income level, and other identifiers.
Conduct detailed market research: When first-party data isn’t available, you’ll have to conduct thorough market research. In most cases, this includes analyzing industry trends, benchmarks, and competitors to find untapped opportunities.
Validate your assumptions: Wherever possible, validate any assumptions that emerge from your research. Perhaps you can verify insights within existing sales data or conduct surveys of your target market.
Create customer personas: Taking your highest-value segments and industry insights from the steps above, build fictional personas that act as anonymized versions of your ideal customers. As you continue to develop your e-commerce marketing strategy, ask yourself what techniques will appeal to these individuals. Resources like Hubspot’s Make My Persona tool can be particularly helpful at compiling the right level of detail.
Determine optimal channels
Most companies building a marketing strategy from scratch do not have unlimited budgets — they must be selective about their chosen advertising channels and focus on those with the highest ROI. This step can be difficult, considering there is no shortage of options to choose from. The most popular examples to consider include:
YouTube and Streaming Video Ads
So how do you choose the right channel? Your customer personas may determine the answer, especially if they overwhelmingly favor specific channels. If you’re developing paid and organic social channels for Gen Z, for example, you’ll want to focus on Instagram, TikTok, and Snapchat over platforms like Facebook. Other channels may engage with rewarded advertisements while enjoying a mobile gaming break. Once you know where to reach your audience, it becomes much easier to tailor ads that speak to their needs — be it a specific product or access to a special promotion.
Of course, marketers shouldn’t feel limited to these options. Wherever possible, try to allocate a small number of resources to testing new channels to see how they perform. In some cases, the results may surprise you and generate a high return — especially if you’re the first to reach a market. By the same token, pay attention to competitors’ channels since they may have valuable insights or insider knowledge.
Define e-commerce marketing success
Once your ad campaign is complete, how will you know your e-commerce marketing strategy was successful? Even if your goal is “closing sales,” you’ll need to measure performance by choosing the right metrics and comparing your achievements against industry benchmarks.
Start by considering how your business compares to other brands in the same industry — particularly those of comparable size that serve the same target market. This examination will help you set a benchmark to expect and aim for.
Next, choose metrics that reflect your campaign goal. Go deeper than ad clicks — for most e-commerce apps, you’ll want to track the following at a minimum:
Click-through rate: The percentage of ad clicks compared to the number of total ad impressions.
Conversion rate: The percentage of customers who complete a conversion activity compared to total ad impressions. This event is usually closing a sale but might include installing an app or signing up for a rewards program.
Cost per acquisition: The final cost of acquiring a single customer in an advertising campaign. This metric helps you determine whether the revenue generated from your strategy is worthwhile.
While robust data collection is essential, marketers must prioritize actions that help them achieve specific goals. Metrics and benchmarks will help you see the path forward.
Don’t overlook retargeting
Many marketers prioritize user acquisition to drive growth, but that’s not the only indicator of success. In practice, e-commerce apps will fare better if they strike a chord among existing customers. These shoppers are already familiar with an e-commerce brand’s services, making it easier to convince them to make follow-up purchases. Marketers likely also have first-party sales data that lets them analyze their audience to create more effective campaign strategies.
Of course, there’s also the bottom line to consider. It’s at least 5x less expensive to retarget a previous customer in a campaign than acquire a brand new customer. What’s more, increasing an e-commerce app’s retention rate by 5% can drive a corresponding 25 to 90% increase in revenue.
Retargeting campaigns may be more effective, but they still require special considerations. Start by segmenting your market by occasional customers, semi-regular shoppers, and superfans who share your brand on social media. When designing ad creative, personalize it to match each level of engagement.
It’s also worthwhile to vary product offerings for each shopper. Unless you sell something consumable like groceries, customers probably won’t need to purchase the same product again. For example, someone who just bought an oven won’t appreciate ads for another unit — but they might be on the lookout for other appliances. Paying attention to these details can help retained customers feel respected and valued, cultivating more loyalty for your brand in turn.
Optimize the checkout experience
When you’re launching an e-commerce app, the most important feature is your checkout screen — if everything else runs perfectly but the checkout does not, all your work is in vain. For that reason, marketers should emphasize the checkout experience and take action to help it run smoothly.
One of the simplest ways to do this is by offering ads that automatically open the app and place a product in the cart. Not only does this maximize convenience for shoppers, but it also reduces the number of steps between considering and purchasing an item. The checkout screen is also an excellent opportunity to promote related products that will enhance the initial purchase value.
Even if you’re promoting a general sale instead of specific products, ads can emphasize the checkout experience. Including a call-to-action such as “Enter BRANDDISCOUT21 at Checkout” highlights the value to customers while keeping the big picture in mind.
Finally, don’t forget about checkout-based retargeting opportunities. According to one study, shoppers abandon 80% of e-commerce carts without completing the purchase. Wherever possible, reach out to customers with an app notification or email reminding them of unpurchased items. Taking the time to send a message is reasonably low-cost, and the return of a completed sale is well worth the effort.
Whether you’re planning a retargeting strategy or seeking a new audience, you don’t have to develop your e-commerce marketing strategy alone. MOLOCO can work with you to create techniques that will boost conversions and help you acquire users at scale. Reach out today to learn how MOLOCO’s self-optimizing programmatic ad campaigns can make a difference.