Online Student Again, Part 8: Online Customer Acquisition – Accio Customers!

With a wave of his wand, Harry Potter cried, "Accio Customers!"

“Accio Customers!” — Harry Potter
(Supposedly, it’s not magic, though.)

As of the end of this module, my mini-MBA course is now three-quarters of the way done! I’m glad it’s getting towards the end since it’s been a while since I squeezed in a course into my busy schedule.

This week’s topic was about online customer acquisition. Staci Smollen Schwartz taught this section. She was formerly the VP of digital marketing at Virgin Mobile, and now is an independent consultant for the Interactive Advertising Bureau. I found that much of this module took elements of all the prior sections so far, picking out elements that were meant to provide the best customer experience and provide what customers needed.

Ms. Smollen Schwartz began by talking about the offline versus the online experience– what entices customers to buy online versus offline? Some sites will direct you to brick-and-mortar, some will have you shop online retailer, and some will sell direct.

The foundation for how customers are driven towards products via websites has to do with the path towards awareness, to consideration, to conversion, followed up by engagement. Ms. Smollen Schwartz demonstrated this by presenting many different kinds of ads and having the class try to determine what part of the path were the ads and banner ads as calls to action.

She discussed various tactics to bring about the conversion. Offline tactics are meant to drive you towards digital, and can include QR codes, vanity URLs, using the Shazam app to listen to commercials that will drive you to a website, and hashtags. Product placement within website can occur too, just like on TV or radio. There are also brand experience apps to consider, such as an app doesn’t sell the product but the experience. The example used was the Weber Grills app, which provided recipes and grilling techniques instead of shopping for a Weber Grill. Another examples were branded microsites like Sherwin-Williams Chip-It browser plug-in or app, and YouTube videos and channels that talks about the experience rather than the product.

Naturally, you need to figure out how the measure the awareness through reach, engagement, favorability, and re-marketing capabilities. Search Engine Marketing is important, because while relevancy in organic search is big, you also need to know how buying keywords for paid search can make a difference provided that you can bid high enough on the rights to that keyword in the paid search. You can also use product listing ads, daily data feeds from retailers (images, SKUs, price), and CPC price   – can be made and used similarly to paid search, but with product specifics

Affiliate Marketing is another tactic. It’s similar to advertising, but instead of getting a slotted space, you get a percentage based on clicks to conversions. RetailMeNot is a good example of affiliate marketing with their coupon codes. Amazon actually has the longest running affiliate program–since 1996! (Where do I sign up?) This strategy is often used on smaller sites like blogs.  Commission Junction and LinkShare are others that are affiliate marketing networks. Re-marketing in online ads is marketing to people who have already been exposed to your website or banner ad at least once. The premise is that you look at an ad, and then next day, you see similar ads everywhere, like on Facebook, Yahoo, etc.

Behavioral targeting in online ads involves marketing to people who demonstrate an affinity to your brand or category, without necessarily every having been to your website or seen a prior ad. Third party data companies see cookies for certain things, and based on those purchases and views, they can figure out what likes might be. AdChoices is a common third-party company which is an initiative that tries to educate and be transparent in doing behavioral targeting while keeping government rules out, and provide an easy opt-out.

Enhanced targeting is often paired with custom creative, such as setting up a modular ad in which, based on the cookie data, can switch up info for the ad on the fly to customize and personalize it for the user.

Email marketing is a proven and efficient online acquisition tactic. Shoppers overwhelmingly report that promotional emails tend to be their preferred method of communication with a company, and often cited as second biggest influence on a website visit.

Social media marketing is something that brands are still experimenting and seeing how this works because it’s still new. At least one-third of all shoppers say their purchases are influenced by social media, as “likes” and “dislikes” are often posted about a retailer that can influence the brand.

It was at this point that Ms. Smollin Schwartz gave us some formulas on how e-commerce conversions happen.

1) Total site conversion rate (%) =# of orders / # of visits X 100

2) Upper conversion rate (%) (This would be the awareness, consideration, and conversion) = # of orders added to the online shopping cart/#visits X 100

3) Lower conversion rate (%) (engagement) = # of completed purchases/#orders added to cart X 100

Tactics for driving upper conversion include recommendations and personalization; A/B testing, multivariate testing (variations of the same thing in different configurations) created on the fly for best performance, site search,virtual sales agents (live chat), and social commerce (negative reviews are best, because you can decide if the worst thing about that product is something you can live with).

Tactics for driving lower funnel conversion include incentives, like free shipping or accelerated shipping if ordered by a certain time, pricing incentives, alleviations to security and privacy concerns, and accepting PayPal instead of credit cards.

Shopping cart abandonment is about 71%, and this is usually due to customer shipping concerns or the customer is not ready to purchase. Some will take advantage of that, and re-market the shopping cart information for abandoned items in carts and promote a discount in order to fulfill the purchase process.

Driving cross-channel conversion is another online tactic, in which companies provide store locators, in-store pickup options, or even cross-channel prompts (allows the customer to click to call to finish the sale).

Engagement after the sale is important, because customer acquisition doesn’t stop after the initial sale.  The progression of customer engagement starts with inactive customers, then moves towards active customers, to participating customers, who eventually can become product evangelists who bring in more prospects. Building engagement and loyalty is confirmation marketing, which is done through community building, packaging and loyalty programs. Referral marketing is part of this engagement, in which incentives are used such as one customer’s referral code is used by another customer, and the original customer gets an incentive to get a reward too. This works similarly to affiliate marketing.

Ms. Smollen Schwartz summarized the online customer acquisition process with her “Key Tactical Lessons throughout the Customer Journey”, which were:

  • It is helpful to think about tactics in terms of a consumer decision framework of awareness/consideration/conversion/engagement, integration of offline, online, mobile and social, and often circular pathways.
  • Tools, tactics, and metrics differ depending on a customer’s stage along the decision pathway, nature of your product and industry, and your budget allocation.
  • Look at the key drivers of e-commerce and digital-influences sales, including the success of traffic-driving tactics, upper and lower conversion rates, ways of measuring cross-channel sales impact, engagement, and repurchase.

Before I took this module, I thought this might be an easier topic for me to understand, but this was a harder section for me to get through. I think it’s because much of this was deeper marketing than I was experienced with, and it centered around consumer product examples. While I understood the consumer product examples, I had a hard time envisioning how I might convert this same information easily for a B2B service model. Everything given was very commercial product related. The information was very dry, so while it was evident that Ms. Smollin Schwartz knows her stuff, for me personally it was tougher to get through this information. I will say that a few examples she provided proved to be well-explained, so I could see that I had already participated in some of these tactics at some point, like affiliate marketing. I could also relate to all the consumer examples she gave from my consumer perspective. Envisioning how to parlay this information into a means of promoting the potential new business I’m thinking of starting…well, that question wasn’t answered as clearly as it was on how to promote and sell a consumer product.  Even getting through the quiz– it took me several tries before I got a good result. It gave me agita like the SEO information did again.

It looks like I will definitely have to attend the virtual office hour for this module, because I need to have a better grasp of how this information translates into acquiring customers for services that are not B2C (business to consumer), but B2B as well. For all I know, more subtle tactics are used.  So for now, a good part of this topic still eludes me.

The next module will be about web analytics and ROI (return on investment). I understand on a broad level what those are, and I’ve used some elementary analytics to help me understand how webpages perform on a website, but not much beyond that, so this will prove to be interesting.

About TechCommGeekMom

Danielle M. Villegas is a technical communicator who has recently started her own technical communications consultancy, Dair Communications. She has worked at the International Refugee Committee, MetLife, Novo Nordisk, and BASF North America, with a background in content strategy, web content management, social media, project management, e-learning, and client services. Danielle is best known in the technical communications world for her blog, TechCommGeekMom.com, which has continued to flourish since it was launched during her graduate studies at NJIT in 2012. She has presented webinars and seminars for Adobe, the Society for Technical Communication (STC), the IEEE ProComm, and at Drexel University’s eLearning Conference. She has written articles for the STC Intercom, STC Notebook, the Content Rules blog, and The Content Wrangler as well. You can learn more about Danielle on LinkedIn at www.linkedin.com/in/daniellemvillegas, on Twitter @techcommgeekmom, or through her blog.
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