Like almost all retailers, some large organizations are facing increasingly fierce competition and CPC (pay per click) search challenges. The performance oriented marketing team realized that they could not always pay high costs to obtain the same level of revenue from repeat customers.
At the same time, these teams also realized that they could better coordinate their strategies in other channels. Such as redirection, email and direct marketing can work more closely together, and once customers start searching online, they can push customers to buy.
They have developed a new strategy to deal with search advertising. One of the strategies focuses on identifying and treating new customers, rather than returning old customers. The ultimate goal of this strategy is to achieve a more granular return target for new customers and repeat customers. Compared with the past, the return efficiency of repeated old customers is much higher.
This is not an isolated situation. Many retail marketing teams are keen to understand how a new, relatively repetitive customer model works for search. Some of the most common questions are: What should we know about this approach? What is the process of implementing it? How do we measure success? The following are seven search practice methodologies:
- The wallet war finally won at the top of the marketing funnel
In today's competitive environment, a new customer strategy relative to old customers may be of great significance. First, retailers can no longer compete for the bottom of the marketing funnel. CPC costs continue to rise in direct response channels such as search. According to Sidecar's 2019 benchmark report: Google's retail advertising data shows that the average CPC (text advertising) of retailers in Google paid search increased by 14% in 2018, reaching 0.71 dollars. In 2018, the average CPC price of Google Shopping was US $0.57, an increase of 4%. The competition in search is in a frenzy. Retailers are pushing this battle to the top of the funnel, because they have realized the benefits of downstream and can benefit from users in the research stage.
Second, most retailers have fewer and fewer customers. In terms of shopping location and time, consumers have more choices than ever before. As a result, most retailers have fewer customers. So retailers need to work harder and smarter to ensure user loyalty. Based on this point, you can consider: if a user who has just bought from you is now searching Google for products you sell in a highly competitive field using generic terms, is this person really your user? Or is she the intended user you need to regain at the top of the funnel?
These two kinds of understanding show that the top end of the funnel is becoming more and more important. Similarly, if you want to acquire new customers, you need to strengthen the top of the marketing funnel. Strengthening the top, in turn, requires tamping the middle and bottom of the funnel, so it is expected that it needs to move forward.
- Define what "customers" mean to your business
When developing audience strategy, one of the biggest traps faced by marketers is that they ignore the steps to define customer composition and how to translate this definition into their search.
This definition can vary greatly between marketing departments. Some people define customers as people who have purchased products in the past six months. Some define customers as people who have bought at any point in time. Others believe that customers are repeat customers who only use brand keywords to search.
Your definition of customers should be consistent with how you want to treat past buyers. This idea can be traced back to the idea that "most retailers have fewer and fewer customers". If someone bought something from you four years ago, but hasn't bought it since then, will you still treat him as a customer and treat him the same as the person who bought it a month ago?
Suppose two people bought something from you yesterday. Theoretically, your brand is still fresh in their minds. But today, a shopper is searching a website for the type of product you offer by using a generic term. Another shopper uses your specific brand terminology. Do you think they are both active customers? Or do you need to find a new way to catch shoppers using generic terms?
These are philosophical considerations to help you define your customers. Another factor is data. Analyze your trading data to determine the trend of repurchase rhythm. When are shoppers likely to buy back? one month? three months? One year or more? These findings can help us understand whether it is meaningful to define a customer based on time and what the time threshold should be.
- Understand the customer's purchase path
Search is usually a channel to get new customers. You can find new customers with different costs. When you move to the top of the funnel in the search market, the cost of acquiring new customers is often higher.
However, if you have a strong understanding of your customers' purchase path, you'd better know that it is reasonable to increase the cost, because you can see that other channels, such as email, direct sales, are also playing an increasingly important role in cultivating your customers' purchasing power.
Getting this understanding has a lot to do with your attribution model. There is a multi-channel attribution model, which is very necessary for viewing the different performances of various channels through different channels, which also makes it a key best practice customer strategy.
Most retailers' audiences interact with the brand through multiple channels. A multi-channel attribution model allows you to more accurately evaluate the role of these channels. This knowledge can be transformed into key information to determine the investment scale of each channel and your ROI target.
- Set up different activities for different audiences
Once you define what customers mean to your business, you can divide your advertising activities according to new and old customers. This is where search advertising remarketing lists (RLSA) and customer matching functions come into play.
The following is an example setup involving these features and several similar features. Remember, this is just one way to split it. You may find that the version of this method is more suitable for your business and goals.
New customers (potential customers) who do not use cookies: These customers never buy cookies and do not have cookies. You can create this activity without a remarketing list, but you can improve your prospecting work by using similar audiences, audiences in the market, affinity audiences, population goals and other tools.
New customers who use cookies: These customers have visited your website but have not bought cookies within a specific period of time, such as the past 180 days. Create a set of remarketing lists in search ads and adjust your bid based on your audience.
Regular customers: shoppers who have bought in the past 180 days, using the example of 180 days. You can create a combination of this part and the customer match (email list) and the cookie buyer (user login order confirmation page). In order to obtain higher granularity, these users can be divided into high lifetime values, dormancy or first time buyers.
- Set unique return targets for each audience segment
Once you have developed your audience distribution, set a unique return goal for each component. A good return goal should be consistent with the goals of your business and marketing activities.
In addition, it is important to pay attention to the internal relationship between returns and income. Generally speaking, stricter return targets will limit income opportunities, while freer return targets will bring income opportunities.
For example, you may be willing to set a target of lower efficiency for potential customers (perhaps 30% - 45% of the cost/sales), new or more efficient users (25% - 40% of the cost/sales), and more effective return on customers (about 5% - 10% of the cost/sales).
Generally speaking, you should be willing to spend more budget and attract new customers with a lower efficiency return target when using the new customer model compared with the old customer model. Instead, you should set a more effective goal for old customers, because you have invested in this area and you have determined that you are more likely to switch after buying in the past.
- Further subdivide each activity
Align it with the customer's purchase journey
Once you have established basic marketing campaigns for new and old customers, then carefully analyze your data to determine whether there is enough data to further subdivide. For example, do you still have enough data to separate each marketing campaign by device? If you know that more users start to buy on smartphones rather than desktops or tablets, can you gain more value by positioning these mobile users differently?
You can also consider whether you can subdivide by brand and non brand terms or by trademark and non trademark terms. This is because search terms, generally speaking, naturally reveal great insight into purchase intentions.
It is possible that a new customer may search for "laser printer" at the top of the funnel, while a new customer may search for "brother HL-L2370DW printer" at the far bottom of the funnel. If you have enough budget and traffic to take account of these two types of terms, you should consider subdividing them in your new customer activities.
The same concept applies to the marketing activities of your regular customers. For example, if you see enough traffic for general terms and brand or trademark terms, consider creating corresponding marketing campaigns for each type of query.
- Pay attention to successful KPI indicators
When evaluating performance, some of the most important questions are: Did you achieve your return goals? Is the new customer consistent with your ideal customer portrait? Do you maintain the same profit level while adding new customers? Is the cost of regular customers reduced?
Develop the habit of making incremental adjustments at least every three months according to the trends in the data.
If you don't innovate, your growth in search will naturally stabilize. Update your performance view and reconsider the role of search in your performance marketing strategy. Consider whether your business and marketing goals fit into a model that focuses on new customers and returning customers.