Customer Acquisition Techniques Every Retailer Should Know
Congrats! You just finished setting up your online store. You’ve created winning product pages, put up some killer product photos, and you’re ready to start selling to the world.
Now there’s just the question of how to get people to find and buy from you.
Customer acquisition is a huge topic in ecommerce (and offline retail too, of course), and to help shed light on the subject, we caught up with digital marketing and ecommerce expert Paul Rogers and asked him to spill the secrets on how retailers can increase web traffic and sales.
Check out what he has to say below:
1. What are your top tips for driving traffic to ecommerce websites?
There are lots of ways to generate traffic to an ecommerce website, lots of channels and strategies, but I still think the strongest route is through building a brand.
Brand-building exercises are often overlooked on behalf of conventional customer acquisition channels like paid search (which can deliver traffic instantly), SEO / organic search (which has the potential to drive a lot of traffic in the long-term at a very low cost of sale), affiliate marketing (which allows you to only pay for conversions) and other channels like social and email marketing.
Due to the increased likelihood of a long-term relationship and the long-term value, I think brand building is really important for serious retailers. Not on the High Street are a really good example of a retailer who have invested heavily in building a brand and they’ve grown astronomically as a result – whereas other retailers have focused on more short-term customer acquisition and haven’t grown as a result.
I think SEO should remain a focus for retailers – it’s gotten a lot of harder over the last few years, but it’s still the lowest cost of sale channel and in the vast majority of verticals, the highest volume. Often, SEO gets overlooked because it requires a big investment and takes a long time to generate a return, but the retailers who really invest in it get a lot more value.
I’ve worked with a few really smart ecommerce heads who have split their budget based on forecasted return timescales and have gradually pivoted away from paid channels towards organic search as their visibility improved. There’s obviously room for both paid and organic channels; it’s more about budget allocation and understanding that you need to invest in organic channels in order to see real growth.
- Focus on building a brand first, before diving into other tactics
- Don’t overlook SEO. It may require a huge investment and could take some time before you see an ROI, but retailers who invest often get a ton of value
- There’s room for both paid and organic channels, when you’re driving traffic. The key is in budget allocation and recognizing the investments you need to make
2. What are the best ways that retailers can turn site visitors into paying customers?
Personalisation is a hot topic at the moment, which is basically the principle of tailoring a user’s experience based on what you know about them – this is definitely something I’d recommend thinking about, along with well thought out merchandising.
A lot of conversion problems stem for a user not being able to find what they’re looking for and it’s something that can be fixed either by allocating time to understanding your users more or using a third party to help automate the process. SaaS platforms like Monetate and Peerius are good options for personalisation and they’re both used by lots of enterprise-level retailers.
On-site search is another area that can really can help to improve conversion, as on most sites I’ve worked with, users are considerably more likely to convert if they’ve searched for something at some point in their journey.
On the same topic, I think that navigation is really important – so just providing clear routes to specific groups of products and making the next step really obvious. Creating personas around user journeys is a really good process for improving navigation – I always felt that this was kind of unnecessary in the past, but over the last couple of years I’ve realised how useful this process can be!
As part of this, testing different elements of your navigation and your page templates is really important, in order to understand what users respond well to and opportunities to increase conversions and eliminate barriers.
- Tailor your customers’ experience based on what you know about them
- Improve on-site search
- Improve your site navigation by providing clear routes and making the next step really obvious
3. When it comes to tracking and measuring their customer acquisition efforts, what metrics should retailers look at?
There are a huge amount of different reporting metrics around customer acquisition, but the main ones are always going to be the ones that are focused on traffic, revenue and profit.
Channel-level reporting is really important and should provide insight into the obvious metrics such as revenue, users, visits etc and then also the cost of sale (COS) / cost vs revenue (CVR), cost per acquisition, cost per user, average order value etc. Channel reporting and general reporting should also focus on branded and non-branded activity – as this is key to understanding how profitable different activities are.
For example, with paid search you may have a cost of sale of around 15%, but if 50% of your brand is delivering a 1% cost of sale, then your non-branded activity is unlikely to be profitable. It’s more difficult since Google and other search engines stopped providing keyword referral data, but you should be doing this for organic search as well. Hitwise is one of the only accurate routes to understanding brand : non-brand, but you can use Google Webmaster Tools data and the proportionate traffic indication from SEMrush to provide a bit of indicative insight in this area.
Another important metric is the lifetime value of a user – as this can often overpower the short-term ROI / profit views on paid advertising. For example, you might have a 20% COS through paid channels and only make 18% margin on orders, but if that user turns out to be a good long-term customer, then chances are they’re going to profitable in the long-term. This is usually important for looking at things like affiliate marketing and paid search.
In affiliate marketing as well – it’s good to try and understand whether orders are coming from existing or new customers and also whether the orders are incremental (looking at things like cashback and voucher sites).
- Focus on metrics that tell you about traffic, revenue, and profit
- Measure results according to specific channels or customer acquisition strategies
- Cost of sale, cost per acquisition, cost per user, customer lifetime value, and average order value are some of the essential metrics retailers should measure
4. Please tell us more about yourself and what you do. How can our readers find you?
I’m currently working as a digital marketing consultant (mostly focused on customer acquisition marketing for online retailers) and I’m also building a startup, called Audited.org – which will essentially be an aggregator of very niche, platform-specific audits (Magento performance audit or ATG SEO audit for example).
I’ve been working in digital marketing for the last 8ish years (primarily around SEO and ecommerce) and I’ve previously worked for agencies and in-house. For the last two years I’ve been mostly working with the Magento platform, working with merchants on things like performance audits, SEO audits, code audits and analytics audits – which is where the idea for Audited came from. I have a team of very strong contractors who work with me on projects in order to deliver a really strong consulting product – which I’m now looking to scale across other ecommerce platforms.