Imagine you are an ecommerce brand that has been able to generate notoriety and attract significant numbers of customers after being around for a good amount of time. You will likely find at some point that, whether it is paid searches or social ads, you could be promoting people who would shop with you anyway. This is the beginning of a conversation that can lead to even more questions, such as:
- How do I make sure that ads are only shown when they are needed and not paying extra money for acquired customers?
- How much am I willing to spend on acquired customers to make sure they don't leave?
- How much am I willing to pay for new customers?
- How do I create a clear separation between new and existing customers?
- What strategy can I use for new and existing customers?
- How do I understand how paid search and paid social interaction? Which one is more important to me?
While it is not possible to answer all of these questions as it all depends on your particular case. However, it is possible to set up a campaign structure that will form the basis for overcoming these challenges.
The campaign structure
The following structure is based on two premises that your business must have in order for you to deploy it:
- A customer is acquired through a first purchase, groomed with the brand message or product quality becomes a frequent buyer of your products and will eventually become a full Brand adopter who buys from you by default.
- You have the option to create custom lists based on the criteria mentioned in the first premise: Newly acquired customers, Well-cared for customers, frequent buyers, brand users, churn customers.
The aim is to create campaigns on both search and social platforms, all segmented according to the audiences mentioned above using dynamically updated customer lists, to achieve:
- The ability to create well-defined customer lists for each stage of your funnel
- The ability to drive a customer through the funnel and eventually Stop or minimize advertising once it reaches the branding stage.
- The ability to Combine paid search and paid social effort by defining an articulated strategy based on the specific target groups mentioned above.
- The ability to Report on high spend, income and ROAS hence better understanding of attribution and incrementality for each audience.
- The ability to understand cost / acquisition, the cost of maintaining it, the cost of keeping frequent buyers, and the cost of keeping track of branded users.
Let's see how that would work with a real business example.
A practical example
We consider the following e-commerce company:
- Name: Pet Toys
- Average customer buying frequency: Once every 3 months
- Advertising platforms: Google and Facebook
Now … let's get to work.
Step one – Create dynamically updated lists of new customers, well-kept customers, high-volume buyers, brand users, and customers with churn.
- Newly acquired customers: People who recently joined our customer base with their first purchase
- Well cared for customers: People who only made between 2 and 3 purchases within L365D
- Frequent buyers: People who have made at least 4 purchases within L365D
- Brand users: People who have made at least 7 purchases in the past 2 years.
- Customers with Churn: People who have not made a purchase in a year
Step two – Define a strategy for each audience and platform
How exactly you choose to set up segmentation depends on your case, the size of your audiences, and the control you want on each audience. For example, in Facebook you can decide that you only want these audiences at the campaign level and not on the ad page, as Facebook optimizes the results. In Google Ads, you may find that the brand users or other remarketing segments aren't big enough to create your own campaign. As a result, you may be targeting the audience with aggressive bid adjustments.
Step 3 – Start, enjoy, report
Once all of this is in place, you should be able to report expenses for each audience by combining costs on each platform and using internal data to report income. That way, you can see what your ROAS was for each audience. This helps in setting goals and allocating budgets. The possibilities in terms of insights are endless: Understanding whether it makes sense for you to bid on branded keywords when it comes to a new-found customer versus a branded adopter; Understanding what causes customers to reactivate is required and understanding what non-branded inquiries you often make buyers are looking for so you know what their needs are etc …
It could be a big change to your account, but …
You don't have to change anything yet. You can start by targeting Google Analytics or Facebook ads based on the above criteria to get insights into your funnel. This helps in the discussion of whether or not such a setup is worth it for your account. It never hurts to collect data!