Maximize E-Commerce Customer Acquisition: Key Post-Click Strategies for Higher Profits
In the world of e-commerce, driving traffic to your website through paid ads is only the beginning of the battle. The factors that generate a real return on your investment lie in what happens after a potential customer clicks on your ad. A successful customer acquisition campaign hinges on several critical factors that can significantly impact conversion rates, average order value, and customer lifetime value.
In this blog post, we’ll explore the key elements that can help you optimize your post-click experience and transform visitors into loyal customers. We will provide specific examples of what each of these factors are, as well as example calculations showing the impact they can have on ROAS for a customer acquisition campaign. For our calculations, we will use a low-ticket product with a base price of $19.99 per unit.
1. Landing Page Layout and Trust Signals for Improved Conversion
Once a visitor clicks on your ad, they are directed to your landing or product detail page. This page must be designed with conversion in mind. Here are some essential aspects to consider:
- Clear and Compelling Content: Your content should immediately convey the value of your offer. It should be attention-grabbing and relevant to the ad that brought the visitor there.
- User-Friendly Layout: The layout should be clean and intuitive. Use a simple design that guides the visitor’s eye toward the most important elements, such as product images, descriptions, and calls to action (CTAs).
- Trust Signals: Incorporating trust signals can significantly enhance credibility and encourage conversions. These can include:
- Logos of recognizable News / Media outlets
- Customer reviews and testimonials
- Security badges (indicating secure payment processing)
- Money-back guarantees
- Industry certifications
A well-structured landing page that incorporates these elements can lead to higher conversion rates, turning casual visitors into paying customers. This, of course, also depends on the quality and price level of the offer.
In the example above, the media logos below the hero image are a clear example of a trust signal that can give the brand greater credibility.
Example Calculation:
Assuming an average cost per click (CPC) of $2.00 and a benchmark average conversion rate of 3%, here’s what the numbers would look like:
- Cost for 100 Clicks: $2.00 x 100 = $200
- Conversions from 100 Clicks: 3% of 100 = 3 Conversions
- Revenue from Conversions: 3 x $19.99 = $59.97
- ROAS: 0.3
With a well-optimized landing page, you should be able to increase your conversion rate to at least 6%, yielding:
- Conversions from 100 Clicks at 6%= 6 Conversions
- Revenue from 6 Conversions: 6 x $19.99 = $119.94
- ROAS: 0.6
Note that even with a well-structured and beautifully designed landing page, getting twice the benchmark average conversion rate, the ROAS would only cover a fraction of the cost of customer acquisition via paid ads.
2. Use of Product Bundles and Upsells to Increase Average Order Value
Once you have a customer on your landing page, a great strategy to maximize the value of their purchase is to bring product bundles and upsells into play.
– Product Bundles: Offering bundles can create a perception of increased value. By grouping related products together at a discounted price, you encourage customers to purchase more than they initially intended. For example, if you sell skincare products, you might bundle a cleanser, toner, and moisturizer at a lower price than if they were purchased separately.
– Upsells: Upselling involves encouraging customers to purchase a higher-end product or additional items that complement their original choice. For instance, if a customer is buying a camera, you could offer a premium lens or camera bag as an upsell. Effective upselling can significantly increase your average order value and enhance the customer’s overall experience.
In the example above, the product is offered in a single unit as well as in 2-pack and 3-pack bundles.
Sample Calculation:
Let’s take a look at what the numbers would look like with the use of product bundles. For illustrative purposes, we will define the following bundles:
– 2-Unit Bundle Price: $34.99 (a $5 savings)
– 3-Unit Bundle Price: $49.99 (a $20 savings)
If you simply convert some of those same 6 customers to buy the bundles, here’s how the numbers might change:
– 2 conversions of single units: 2x $19.99 = $39.98
– 2 conversion of a 2-Unit bundle: 2x $34.99 = $69.98
– 2 conversion of a 3-Unit bundle: 2x $49.99 = $99.98
– Total revenue from conversions: $209.94 ($34.99 per customer)
– ROAS: 1.05
In this example we were able to attain a positive ROAS by using product bundles. In this scenario, the use of higher priced bundles boosted the AOV from $19.99 to $34.99. Even so, the total revenue level generated with bundles was barely able to cover the cost of acquisition via paid ads.
3. Use of Subscriptions to Increase Customer Lifetime Value
Another effective strategy for enhancing customer lifetime value (CLV) is the implementation of subscription models. Subscriptions not only provide convenience for customers but also create a steady revenue stream for your business.
- Recurring Purchases: For consumable products, consider offering a subscription option that allows customers to receive their favorite items on a regular basis. This ensures they never run out of essential products while providing you with predictable revenue.
- Loyalty Benefits: Incorporate loyalty benefits into your subscription model, such as exclusive discounts, early access to new products, or special promotions. This not only incentivizes customers to subscribe but also fosters brand loyalty.
In the example above, the product offers discounted subscription prices for the main offer and the bundles.
Sample Calculation:
For this calculation, we will make the following assumptions: a 33% benchmark subscription rate from your initial conversions, an average subscription term of 6 months, and only single unit sale subscriptions. Using these assumptions, you will yield:
- First month revenue from conversions: $209.94
- Additional monthly revenue from single unit subscriptions: 2x $19.99 x 6 = $239.88
- Total revenue generated: $449.82
- CLV: $74.97 per customer
- ROAS: 2.24
In this example, we doubled the ROAS simply by introducing subscription purchasing options. By converting even just a fraction of your initial customers into subscribers, you can significantly boost your revenue as well as your customer lifetime value. A higher subscription rate and/or a higher average ticket could have an even greater impact on your ROAS and CLV.
4. Use of Retargeting and Remarketing Campaigns to Recapture Lost Sales
Even with the best landing pages and offers, not every visitor will convert on their first visit. Using the same example as above, if 100 people clicked on you ads and only 6 of them became customers, that means 94 of them didn’t. These are 94 potential customers that clicked on the ads you paid for but for one reason or another didn’t complete their purchasing process. This is where retargeting and remarketing strategies come into play.
- De-anonimization of site visitors: Since the release of iOS 14, Apple has essentially blocked most third-party cookies through a featured called “Intelligent Tracking Prevention (ITP).” Apple prohibited other platforms such as Google and Facebook from using their tracking pixels on their devices. By installing a first-party pixel on your website, you can identify the vast majority of those visitor who didn’t convert, and then use that data as the basis for a client recovery campaign.
- Retargeting Ads: Use retargeting ads to remind visitors of the products they viewed but didn’t purchase. These ads can be displayed on social media platforms or across the web, keeping your brand top-of-mind and encouraging potential customers to return to your site.
- Email Remarketing: If a visitor adds items to their cart but doesn’t complete the purchase, you can use email remarketing to gently remind them of their abandoned cart. Offer incentives, such as a discount or free shipping, to entice them to finalize their purchase.
The screenshot above shows an abandoned cart recovery flow in Klaviyo using the visitor data obtained with the fist party pixel.
Sample Calculation:
For this calculation we will make the following benchmark assumptions: 60% of visitors de-anonymized and retargeted; 5% conversion rate; and same average CLV as calculated in the prior section ($74.97). Furthermore, we will assume that the retargeting campaign is conducted via email without any additional media expenditure on paid ads.
- Identified Visitors for Retargeting: 60% of 100 = 60
- Conversions from Retargeting: 5% of 60 = 3
- Revenue from Retargeting Conversion: 3 x $74.97 = $224.91
- Plus Revenue from prior efforts: $449.82
- Total Revenue: $674.73 ($74.97 per customer)
- ROAS: 3.37
In many cases, recapture and remarketing efforts are the difference between having a profitable campaign or not. In this example, we significantly increased the ROAS from 2.24 to 3.37 by recapturing and retargeting a portion of the customers that didn’t complete the purchase process. This is a critical step that many e-commerce and DTC startups fail to implement, therefore leaving substantial money on the table.
Conclusion
A successful customer acquisition campaign in e-commerce extends far beyond the initial click. Driving clicks through paid ads is just the beginning of your customer acquisition journey. By focusing on what happens after the click, you can create a seamless experience that enhances conversion rates, increases average order value, and boosts customer lifetime value.
Each of these factors play a crucial role in your e-commerce success and add significant value to your bottom line. Using the sample calculations provided, it’s clear that even small improvements in each of these areas can lead to substantial increases in revenue. Optimizing your landing pages with trust signals will enhance your conversion rate. Implementing product bundles, upsells and subscriptions will increase your average order value and your customer lifetime value. Lastly, leveraging retargeting and remarketing campaigns will boost your revenue by recapturing lost sales and re-engage unresponsive buyers in a cost-efficient manner.
By mastering these key factors, you can turn your customer acquisition campaigns into powerful engines for growth and profitability. Start implementing these strategies today to maximize the effectiveness of your customer acquisition campaigns!
