Customers are an incredibly important part of your business. If you want to be successful, you need customers, and those customers need to lead to sales. Sales mean you can improve your advertising reach, release new products, increase inventory, hire staff, and more.
However, equally as important as the customers you acquire is the cost of each customer you convert. Your cost per customer acquisition tells you if your marketing efforts are effective, based on your cost per lead and conversion rate. This information provides crucial insight into effective marketing and sales strategy, which can be the difference between a thriving and failing business.
If your recent pay-per-click marketing campaign resulted in 1000 visitors at $2 per click, but only 5% actually buy from you, you’ve spent $2000 on winning 50 customers. To break even, each of these customers needs to spend enough to earn you at least $40 in profit. However, if you can increase your conversion rate to 10% using conversion rate optimization (CRO), that 5% improvement cuts your cost per acquisition in half to $20.
Ready to start boosting that conversion rate and optimizing your marketing spending? Keep reading to learn how to win more customers for your business for less.
Develop Effective Marketing Strategy
Optimize Your Ad Campaign
When you put an advertisement on Google, Facebook, or another platform, you are trying to find customers, not just get clicks. After all, when you pay for every click you get, you only want visitors who are more likely to become customers. Otherwise, you’re losing money with every half-interested click.
The first optimization you can implement is specifically targeting your ads towards “transactional” searches. This means you are using keywords that express some level of interest in becoming a customer, not just learning more about a topic or product. For example, targeting “kayaks” as a keyword will return more “informational” interest than “buy cheap kayaks online”, which displays intent in the search. While the first option will likely reach more people and be displayed more often, the second should improve conversion rates from clicks.
To make your ads themselves more efficient, you can optimize the way they are created and presented. They should draw the attention of the viewer, make an argument, and tell you how you can get involved. This can be done by using proper wording and relevant images that make it clear what you are offering. You don’t want to mislead the user with clickbait because it will cost you money and do more harm for your image than good. Nobody likes to be deceived!
Ads should also give interested viewers a reason to click, known as a call to action (CTA). A CTA should tell them what to do, such as “click to start a free trial”, “learn more about a product”, or “call us today”.
Test and Retarget Ad Campaigns
One of the major benefits of online marketing campaigns is the wealth of information that is available. With the metrics provided from Google Analytics or Facebook, you can discover which ads are working and refine them by testing different formats, content, and locations.
If you have two very similar keyword variations (such as using “soccer” interchangeably with “football”), you can run a test campaign with each of the two as a separate target. Within a couple days, each campaign will provide you with the statistics you need to know which term performs better so that your next campaign can be more efficient.
You may also want to test ads that use different approaches like color schemes, text or graphic-heavy banners, a different call to action, or a new offer. The analytical information you receive from these different campaigns will help show you how to improve efficiency and your conversion rate for lower customer acquisition costs.
Use Social Media
Did you know that there are about 3.5 billion social media users in the world? That’s a lot of potential customers for you to reach out to, and when you’re an online store, the world is your market.
As a marketing tool, social media is unique because it is essentially free if you want it to be. Once you have accumulated a following (often acquired secondhand through other ad campaigns or your website), you can continue to market to these potential customers for free with a tweet, post, or message.
Social media also provides the benefit of collecting a targeted audience for you, with your following often being composed of people who are interested in your business or industry. This helps to improve the conversion rate of your social media marketing strategy, although the main goal of social media is reaching more people, not necessarily boasting a high conversion rate. When the cost per acquisition is so low, even a subpar conversion rate can still lead to a positive result.
Alternatively, if you want to invest in your social media platforms, sites like Facebook, Twitter, and Instagram allow you to create paid ads that only display to people in your target audience through cookies related to searches or usage of these sites. These advertisements can link to your profile, boosting your following more quickly than organic means, or link to your website directly in an effort to convert viewers into customers.
Humanize Your Brand
Internet shopping is inherently impersonal. As opposed to in-person, hands-on shopping, there are just computer or phone screens showing a product catalogue. With little identifying information outside of a domain name and logo, many companies are faceless entities vying for sales in a highly competitive market. This provides the opportunity for you to personalize your business, humanizing the sales process and increasing trust.
If you want to connect with your target audience better to increase marketing effectiveness, consider creating an “about us” page on your website. This can include your story as a business, something about you, or anything else that personalizes your brand. To take this a step further, you can become the outward face of your company, publishing thought pieces on your blog and becoming a trusted source that can recommend products to followers of yourself – not just your company.
Additionally, you can become involved in your industry by joining conversations on social media platforms, Reddit, and other community sites. By simply answering questions, providing valuable content, and interacting with potential customers, you can create a unique connection that helps to foster trust between the customer and your business.
Offer Coupons to New and Returning Customers
Everyone likes a good deal. This is especially true when the deal feels unique or exclusive, such as a personalized offer as part of an ad campaign. In fact, the average online shopper using a coupon will spend 25% more than someone without a coupon code.
While offering discounts can be a quick way to cut into your own profit margin, they can also make the difference between a sale or missed sale. According to research, 36% of coupon code users will look elsewhere for a product if there is no coupon code available to them. Even a difference of 5% off can be a major motivator for customers, helping to increase the average sale value and convince more customers to buy.
To provide coupon codes, you can create banner advertisements on your site that highlight special deals or discounts. Also, you can use email marketing to send returning customers loyalty rewards in the form of discount codes to try to get them back to your store.
Best of all, coupon codes only cost you money if you complete a sale, providing a minimal-risk way to win more conversions.
Provide Referral Incentives
The best kind of advertising is an ad where you don’t have to pay unless you make a sale. Commissions or referral bonuses are a great way for you to access high-converting leads that you don’t have to seek out yourself.
Trust plays a major role in eCommerce, and personal recommendations from someone a lead trusts are among the highest converting leads you can attain. When you offer a referral incentive or affiliate program, you are offering existing customers or sponsors a percentage of each sale that they bring to your business. This is useful because you only pay based on the sale amount, and if the referred visitor doesn’t convert, you don’t pay anything.
Create an Optimized Webstore
Build an Efficient Website
An online business needs a beautiful, functional, and effective website to create an efficient sales process. The website acts as a salesperson for business, which means the content you’re providing should be informative, well-organized, and fast – just like good salespeople.
Fast load times are an essential part of any successful business. On average, online shoppers have an attention span of about 8 seconds, which means that you have 8 seconds for your site to load, your content to catch their eye, and to engage them enough to keep them from leaving the site. For each second it takes your site to load, you have even less time to convert the visitor – a killer for PPC ad campaigns and sales alike.
Accounting for more than half of web traffic worldwide, mobile traffic is something an online business can’t ignore. Responsive web design allows your site to adapt to different screen sizes so that no matter the platform they use, customers can still navigate your site without a problem. Without this optimization, you could lose half of your sales.
Finally, your web design should look professional. With 75% of consumers judging the credibility of a business based on the quality of their website, an effective website design is essential. It should be easy to navigate, provide clear CTAs, and follow a simple structure.
Fortunately, when you set up your dropshipping store with Shop1, all of these optimizations are included in the platform. You can choose from a variety of templates that are all fast, responsive, and practical.
Set and Maintain Competitive Pricing
While customer experience should always be the selling point of your business, price plays a huge role in sales. As we said earlier, everyone likes a good deal. But, if you sell your products for too cheap, you can take money out of your pocket by cutting into your margins. If your prices are too high, people will look elsewhere for a better deal.
To maximize conversions, set and maintain competitive pricing. It’s not wise to directly undercut competition to try to steal sales, so using your known expenses and the price you pay for each product, set yourself a goal for a certain profit margin you want to maintain. If your pricing strategy isn’t working, consider hosting a sale to drum up additional interest.
Offer Free Shipping
Nobody likes to pay for shipping. When a customer is happy with their cart and gets to checkout only to see a shipping fee, it can cause as many as 55% of carts to be abandoned. After all, there’s a reason that Amazon Prime’s free 2-day shipping is taking over eCommerce.
To prevent abandoned carts due to shipping costs, you can offer free shipping on all orders, or only orders that meet a certain threshold. This way you can maximize the conversion rate and even increase the average order value thanks to the “savings” that free shipping provides.
With Shop1, all shipping is handled by the network of suppliers that process orders on your store’s behalf. If you’re on one of the premium plans with Shop1, you can offer your customer discounted or free shipping to maximize your conversion rate.
Implement Cart Abandonment Tools
According to research, almost 7 out of every 10 shopping carts are abandoned without making a purchase at various parts of the buying process. While it’s not possible to salvage all 70% of the carts that are abandoned, conversion rate optimization at checkout can help you to convert a few abandoned carts to sales.
Cart abandonment tools record the contact information of site visitors who reach checkout but don’t finish paying. With this information, you can create an exclusive offer to send them in an effort to get them back to your store to finish the process. Discount codes, special gifts, and free shipping are just a few incentives that can be provided, and this process can even be automated to make it easier.
Shop1’s cart abandonment tool does more than just record customer information. It stores cart information that can be restored if they come back later, or even if they visit on another device. The tool can also be configured to automatically send an email to anyone who leaves mid-checkout.
Everyone wants to reach more customers, convert sales, and grow their business. However, it’s not always easy to turn a simple website or social media visitor into a lead and then a paying customer.
With the tips we’ve provided above, you can set your business up for success. Less expenses, more sales, and more growth are possible when you use the right tools and strategies.
To make your dropshipping business simpler, take advantage of Shop1’s all-in-one dropshipping solution. From creating an effective website to recovering carts and handling returns, it simplifies the task of managing an online store so that you can focus more on optimizing your strategies and improving your business.
There’s no better time than now to raise your return on investment. Start implementing these strategies today, and watch the sales go up tomorrow.