Balancing Acquisition and Retention: The Core of a Solid eCommerce Marketing Strategy
Joy Sharma
If you’re in the eCommerce business, you probably already know that using the right marketing tactics is crucial to your growth and success. But have you ever wondered why some of your marketing efforts deliver results while others seem to fall flat?
With most medium and small business owners, it all comes down to picking the right marketing strategies that match your goals. For example, the marketing campaigns for a brand looking to improve customer loyalty will look very different from those seeking new customers. That’s because different goals equate to different strategies, and understanding how to pick the right tactic can seriously make or break your results.
In this blog, we’re answering the biggest FAQs brand owners have about creating winning marketing tactics, plus highlighting the best eCommerce marketing strategies you can use to supercharge your results.
- What Is Merchandising & What Does It Matter In Marketing?
- Two eCommerce Growth Strategies: Picking The Right Path For Your Goals
- Acquisition Revenue
- Retention Revenue
3. How To Create A Framework For eCommerce Marketing
- Marketing Tactics For Acquisition Revenue:
- Paid Media
- Owned Media
- Earned Media
- Affiliate Marketing & Partnerships
- Marketing Tactics For Retention Revenue
- Owned Media
- Offline Marketing
- Paid Media
4. How To Put Your eCommerce Marketing Strategy Together
What Is Merchandising & Why Does It Matter In Marketing?
Imagine yourself walking through your favorite mall or shopping center. Now, what’s the first thing you do before deciding which stores to enter? For most of us, checking out the exterior displays or “window shopping” determines which store has exactly what we’re looking for. After all, you probably wouldn’t want to go into a store selling high-tech gadgets if you’re shopping for shoes.
However, many business owners don’t realize that this same principle applies to eCommerce stores. Before a customer decides to order from your website, they’re “window shopping” through your marketing campaigns and product pages, determining whether you have what they’re looking for. This is why knowing how to properly merchandise your store comes before you can create an eCommerce marketing plan.
When you merchandise your store effectively, you can figure out…
- Which products are the highest sellers, so you can position them at the forefront of your advertising.
- How many of your eCommerce sales come from special offers or promotions.
- Whether your current marketing efforts are yielding the ROAS that you deserve.
- General online shopping habits of your target audience, allowing you to tailor your marketing tools to meet their needs.
With this insight, you can start to craft a compelling story that puts the right products at the front end of your eCommerce site, driving more traffic and increasing sales.
If you want a step-by-step guide on how to merchandise your eCommerce store using a multi-SKU method, check out our blog here.
Two eCommerce Growth Strategies: Picking The Right Path For Your Goals
Here’s a surprising truth that most digital marketing agencies fail to mention: not all revenue is created equal.
That means that where your eCommerce sales are generated has a huge impact on your ability to grow your business. To simplify this concept, we break revenue down into two main categories: acquisition and retention. So, before deciding which eCommerce marketing strategies are right for your brand, you’ll need to look at your overall revenue goals and decide whether your focus should be on acquisition revenue (revenue generated from acquiring new customers) or retention revenue (revenue generated from returning customers.)
Let’s take a look at these revenues in more detail…
Acquisition Revenue
Since acquisition revenue focuses on bringing new potential customers into your business with paid marketing tools, the profit margins of this type of revenue are typically much smaller in comparison. On average, a healthy profit margin for acquisition revenue is around 10%. Now, that doesn’t mean that it isn’t valuable to the long-term growth of your business! With more new customers comes greater brand awareness and growth potential, so it’s important to remember these things when calibrating your marketing efforts.
Retention Revenue
In contrast, retention revenue comes from building customer loyalty with your target audience, which is why this type of revenue accounts for a much larger profit margin. For most eCommerce businesses, retention revenue has a profit margin of 50%. That’s also because this type of revenue doesn’t have the same hefty cost per acquisition that it takes to generate revenue from new website visitors, which puts less strain on your overall marketing budget.
Now, whether you decide to focus on acquisition revenue, retention revenue, or a combination of both is totally dependent on you and your unique business goals. Either way, making a clear decision is the first step you’ll need to take to create a winning marketing strategy for your brand.
How To Create A Framework For eCommerce Marketing
By this point, you should know two very important things about your eCommerce brand.
- Which products you should be pushing based on your merchandising results.
- Where to focus on building your revenue, either through the acquisition or retention path.
From here, you can build a framework to create winning eCommerce marketing strategies that drive traffic, increase sales, and help your brand grow.
First, look at the marketing channels you can utilize to increase acquisition revenue.
Marketing Tactics For Acquisition Revenue
Paid Media
If you’re looking for a marketing path that takes the least amount of time to impact your profits, paid media is definitely the place to start. Paid media includes marketing channels you place advertisements on, like social media platforms and other outlets such as Facebook Ads.
For social media marketing, we recommend starting with the most profitable platform, Facebook ads. Despite the influx of new social media platforms like TikTok, which certainly have their place in advertising, Facebook and Google ads continue to be the best at yielding eCommerce marketing results, largely thanks to their mature algorithms.
So, suppose you’re a brand currently generating less than $5 million per year in revenue. In that case, moving your marketing budget away from Facebook and into other channels is not a good path to success.
Like other paid media options, Facebook ads follow four Levers that take your potential customers through the buying process.
1. Product: Based on your product merchandising, you’ve already decided which product is the best to advertise to your target market and the demographics you’re trying to attract.
2. Landing Pages: Next, you’ve created a conversion-driven landing page that your customers will arrive on after clicking your ad.
3. Offer: Once there, you’ll offer them any final incentives to finish the checkout process, such as free shipping, BOGO deals, and potential cross-selling opportunities.
4. Creatives: As your ads continue to generate results, you can run A/B testing on your creatives to finetune your messaging and amplify your ROAS.
If you’re ready to become a Facebook ads master, you can follow our in-depth guide here.
Now, for Google ads, there are two types of advertisements that you’ll want to utilize. Both types of ads use Pay-Per-Click (PPC) advertising to generate results, there are 3 main types of campaigns ever brand should be using ->
1. Brand Ads: The main purpose of these types of ads is to increase brand awareness and drive traffic to your eCommerce platform rather than result in a direct sale. This is a great way to introduce our eCommerce brand to potential customers and get them on your email list.
2. Shopping Ads: In contrast, Google Shopping is designed to encourage online sales. If you’re looking for a quick way to boost your revenue, shopping ads are a fast and effective way to do it.
3. Search ads – these are paid advertisements displayed within Google’s search results. Businesses bid on specific keywords, and if they win, their ad appears when those keywords are searched, helping them reach potential customers who are actively looking for their products or services.
There are more but the more you expand the more the roas decrease so make these work first and then expand
Owned Media
Next is owned media, which includes audiences you already have access to and don’t need to expend any more of your marketing budget to acquire. The most common types of owned media are your email list and SMS list.
To collect this information from customers, make sure you have email or phone number pop-ups enabled on your eCommerce website and incentives for them to sign up. For instance, offering 10% off their next order if they join your email list.
Next, you can set up your email flows, making it fast and easy to engage with loyal customers. These are automated responses with attention-grabbing subject lines that can be set up through segmentation based on where your customers came from.
Typically, a good email flow should have these four types of messages:
1. Welcome Email: This is where you introduce the customer to your brand and offer them a quick “thanks” for checking out your online store.
2. Browse Abandoned Products: For customers who looked at products but didn’t add them to their shopping cart, emails like this are one way to remind them of these items or recommend something else they might like.
3. Abandoned Cart: If they did pick something out but never started the checkout process, sending a cart abandonment email can prompt them to follow through with their purchase.
4. Abandoned Checkout: In this case, the customer started checking out but left their items behind. This is another quick way to remind them to finish their purchase.
5. Non-Purchaser Follow-Up: When a customer never decides to complete their purchase, you can still follow up with a simple email asking for feedback to better their user experience the next time they shop.
Not only do these flows help build a good customer experience for your shoppers, but they can also aid in conversation rate optimization. As a result, customers often land on your online store, even if they can’t buy something right away.
So, let’s say that you have a customer who is interested in your product but doesn’t have their credit card at that exact moment. Instead of spending more of your marketing budget on PPC ads to get them back on your page, a simple follow-up email is a cost-effective way to remind them of your brand when they’re ready to buy.
Another email marketing tactic you can use is an email campaign. Unlike automated email flows, campaigns are used to promote something specific. You can also apply this automation principle to SMS messages, sending out notifications when you have an exciting announcement.
Ultimately, human beings love to hear good news and love it even more when they’re the first to know. So, don’t hold back on the number of messages you decide to send during your next email campaign!
Some of the best ways to use an email campaign include:
- Announce new products
- Sharing an update about your brand
- Celebrating holidays and community events
- Offering exclusive sales and promotions
Now, if you want to really break down the benefits of email marketing by the numbers, you can start by assuming that a single PPC campaign brings in about 100 new website visitors. Of those 100, only 5 of them decide to place an order right away.
But for the other 95 shoppers, an email flow kicks in that reminds them to return to your online store, which has a residual effect on your acquisition revenue. Most importantly, it delivers results without the need to spend more money on expensive ad campaigns, giving you a stronger ROAS for your initial creatives.
Earned Media
Where paid media and owned media offer a relatively quick payoff, earned media takes a bit more time to see results from, sometimes needing up to six months of work before you can notice a change. That being said, earned media is still essential to a winning eCommerce marketing plan. We separate this type of marketing into two distinct categories.
Organic Search
Search engine optimization (SEO) is among the most effective long-term growth strategies you can implement for your eCommerce brand. Maintaining good SEO practices is fairly cost-effective and gives you a consistent revenue stream once you’ve got your rankings where you’d like them to be. This makes it simple for you to forecast your revenue, considering that SEO doesn’t come with all the fluctuations that Facebook or Google ads have.
Organic Social
To enhance your following or audience on your organic social platform, you might consider several effective strategies. One such approach is Influencer Marketing. This involves collaborating with influencers, mutually increasing each other’s audience size and ultimately driving sales, yielding organic revenue.
Additionally, Giveaways, Contests, and Live Events are essential components of a comprehensive engagement strategy. These activities not only deepen your connection with the current audience but also draw in new followers over time. Consistently reminding your audience about the products they love enhances brand awareness and loyalty.
While these methods may be demanding in terms of effort, content creation, and time, the immediate revenue from your organic social media might not be very high. However, they offer value in a different form, increasing overall brand awareness and incrementally improving your marketing performance.
If you’re ready to invest in these high-effort strategies, the payoff can be substantial. We recommend this approach, as it efficiently merges customer acquisition strategies by blending direct response ads with organic growth, encouraging purchases. Although it might seem like a gamble initially, it’s a highly effective and usually fruitful strategy, given its potential to boost brand awareness and customer loyalty.
Affiliate Marketing & Partnerships
Suppose you’ve already utilized paid media, owned media, and earned media in your marketing plan but you’re still not seeing the acquisition revenue growth that you’re after. In that case, affiliate marketing and brand partnerships can give you extra leverage for selling your products.
Here’s a great example of affiliate marketing in action:
One eCommerce brand sells coffee and teas, while another sells specially designed mugs. By partnering, they can share their audience information, like email lists and other customer data, to increase their customer base. This also makes for a great cross-selling opportunity across social media platforms.
On the other hand, if you don’t have a potential brand to partner with, you can also look into joining an affiliate program for discount sites like Honey, Retail Me Not, and other popular online stores.
Marketing Tactics For Retention Revenue
Owned Media
Where paid media was the jumping-off point for acquisition revenue, owned media is the number one marketing tactic you’ll need to use to improve your retention revenue. That’s because retention revenue only increases one of two ways: encouraging customers to come back and buy again or by giving them incentives to add more items in one online shopping trip.
Start by making sure that your email flows and SMS notifications and fully optimized. Then you can take your initial emails and slowly personalize them through precise segmentation.
The best types of emails to personalize include:
- Post-Purchase: As soon as a customer buys from your shop, send them a quick “thanks” and remind them of any customer satisfaction guarantees you might have.
- Cross-Sell/Upsell: A few days after their purchase, you can follow up by upselling them on potential add-ons for their purchase or cross-selling on other similar items they may like.
- Re-Engagement: When a customer hasn’t engaged with your site in a while, re-engagement emails are a quick way to remind them of your brand and even offer them a small discount for their next purchase.
- Review Request: Testimonials and other types of social proof make for great marketing content, and the easiest ways to collect these are through quick review requests that you can send to recent customers.
- Referral Request: For loyal customers, requesting a referral to friends and family in exchange for a special discount is another way to grow your customer using your existing resources.
- VIP Offers: VIP offers and other loyalty programs are a great way to inspire engagement and build lasting relationships with your audience just by offering exclusive access to new products or sales.
- Winback: When it’s been several months since a customer ordered from you, win-back emails give you an easy way to invite them back to your shop with limited-time offers or deals.
- Milestones: Finally, celebrating customer milestones through a quick email builds trust between you and your audience and enhances their sense of connection brand.
These personalized emails also give you a chance to increase your average order value (AOV) by creating exclusive product launches and other offers that incentivize your customers to buy more items at once. On average, these tactics can take up to 30 days to impact your retention revenue. But even so, the results are well worth it.
Offline Marketing
When most retailers think of digital marketing, the idea of using postcards probably doesn’t come to mind. However, a recent trend in offline marketing has shown that these advertisements can be highly effective when used alongside online marketing platforms. In our experience, offline marketing works best when it’s used to offer a win-back strategy for previous customers, offering them 50% off a new product or service to get them back in your shop.
Paid Media
While paid media isn’t usually ideal for retention revenue, there are some ways it can be used to your advantage, especially for retargeting customers who have lapsed in their purchases.
For example, running paid Facebook ads that are targeted towards previous customers who tried your product but didn’t use it long enough to see the ultimate benefits can entice them back to your store. You can do this affordable by using testimonials and UGC to create engaging, authentic content for less than the cost of producing new ad creatives from scratch.
How To Put Your eCommerce Marketing Strategy Together
With this framework, you can easily create custom-tailored eCommerce marketing strategies for your Shopify business, regardless of your current marketing budget.
As a reminder, here’s how to follow this process step-by-step:
Step 1: Sell The Right Products
Using our easy-to-follow merchandising guide, you can easily determine the product descriptions or SKUs that have the highest return, so you know exactly what to market to your audience.
Step 2: Identify Your Revenue Goals
Whether you want to boost your acquisition revenue, grow your retention numbers, or some combination of both, understanding your long-term goals will help you pick the right tactics for your mission.
Step 3: Pick The Tactics You Need To Win
From boosting your search engine results to partnering with influencers and other brands, there’s no shortage of marketing tactics that eCommerce brands can use to their advantage.
And if you need some extra help putting together a winning marketing strategy for your eCommerce brand, connect with our team of experts today.