Every DTC brand wants to know more about their customer: What are they purchasing? How often are they purchasing? What is their lifetime value (LTV) over six months? How about after 12 months? 

The same goes for ecommerce companies who want to grow their subscription businesses; it’s all about getting to know the subscriber. How are subscription offerings impacting LTV? When are their customers converting to subscribers? How is their upselling strategy impacting average order value (AOV)?

Peel specializes in answering these questions through automated analysis of post-purchase revenue data. As their customers required more depth in their subscription analysis, Peel built a direct integration with Recharge to study subscribers and subscriptions with all the metrics needed for growth. Merchants no longer need to rely on customer tags like “active subscriber” and “inactive subscriber” to manually analyze their subscription business.

Peel x Recharge: Powerful metrics & customization

Peel users can now connect to Recharge and gain instant access to 41 subscription metrics. Here’s what merchants have access to with this powerful new integration:

Subscriptions

1. Active Subscribers
2. Active Subscriptions
3. Churned Subscribers
4. Churned Subscriptions
5. Duration of Active Subscriptions
6. Duration of Active Subscribers
7. Duration of Churned Subscriptions
8. Duration of Churned Subscribers
9. Monthly Recurring Revenue (MRR)
10. Subscribers Churn Rate
11. Subscribers Growth Rate
12. Subscriptions Churn Rate
13. Subscriptions Growth Rate
14. Net Sales – Subscribers
15. Net Sales – New Subscribers
16. Net Sales – Existing Subscribers
17. New Subscribers
18. New Subscriptions
19. Total Sales (Subscribers)
20. Subscriptions Revenue Rate

Subscription cohorts

1. Active Subscriptions per Cohort
2. Active Subscribers per Cohort
3. Cumulative MRR per Subscription
4. Cumulative MRR per Subscriber
5. Earned Profit per Subscribers Cohort
6. Earned Profit per Subscriber
7. Earned Profit per Subscription
8. Earned Profit per Subscription Cohort
9. LTV per Subscriber
10. LTV per Subscriber Cohort
11. LTV per Subscription
12. LTV per Subscription Cohort
13. MRR per Active Subscription
14. MRR per Active Subscriber
15. MRR per Subscribers Cohort
16. MRR per Subscriptions Cohort

Subscription activations

1. Activation Rate
2. Days to Activation
3. New OTP Subscribers
4. Rate of One-Time to Subscriber
5. Subscribers Rate

These metrics allow ecommerce teams to dig into their subscription data and find out more about their customers and their subscription performance. Notably, users can look at each of their metrics for subscriptions as well as for subscribers. This is particularly useful as individual customers may have multiple subscriptions, so comparing subscription vs. subscriber metrics can often provide completely unique information.

Additionally, Peel empowers merchants to look at their subscription metrics by cohorts—based on the months that the subscribers were acquired. This opens a whole new avenue of useful analysis in finding trends within different subscriber cohorts and discovering the campaigns and strategies that best served growth.

From MRR by cohort to see which subscription cohort is the strongest, to subscription or subscriber retention and churn by cohort—having a granular look by months and by the segments allows users to find growth opportunities. 

For extra layers of granularity, users can dig further into each metric, segmenting by locations, products, or subscription types (cancellation reason, day of the month, order frequency, pre-paid). This provides more customization and flexibility for users to find exactly what they are looking for within key metrics like MRR, LTV, churn rate, growth rate, and more.

Subscription businesses demand more

Peel developed this integration as their Recharge users desired the ability to answer more of their questions about their subscription business. 

“I want to look at active subscribers by SKU” became the ability for merchants to segment by SKU to understand the number of subscriptions per product. This gives them the perfect view of which products are attracting more subscriptions, which can inform everything from advertising and email strategy to homepage features and other campaigns. 

“I want to know my top 5 cities with subscription sales” became the ability for users to segment by location, quickly identifying their top 3, 5, or 10 cities by subscription rates. They can use this to create hyper-targeted campaigns to engage their key demographics in those locations.

“When are my one-time purchasers (OTP) becoming subscribers?” turned into a whole suite of metrics that focuses on the conversion of OTP or intermittent purchasers to subscribers. This allows merchants to discover how many customers make a one-time purchase and then become subscribers and the number of days between their first purchase and first subscription. This can inform when to send campaigns to one-time purchasers by using the Days to Activation and Rate of One-time to Subscriber metrics. From there, The New OTP Subscribers metric shows the impact (by percentage) of those campaigns. 

“How do I know how many of my customers are subscribers and how long they stay subscribed or when they become subscribers?” inspired Subscribers Revenue Rate. Broken down by monthly cohort, this metric allows merchants to understand the influence of subscriptions on their business if they also offer one-time purchases. Having analysis that compares subscribers to all customers is instrumental in understanding how to grow the subscription side of the business or make overall strategic decisions. 

“If my customers prepay for subscriptions, how can I look at an analysis that splits the subscription payment over the months” led to Earned Profit per Subscribers Cohort, which provides a view of the profit over time to more accurately reflect the customer’s journey with the brand vs. looking at LTV by Subscriber, which would display all of the profit upfront for the month in which the charges occur.

By listening to their customers, Peel was able to develop a robust range of subscription metrics that supercharges subscription businesses. 

To get started analyzing your subscription data, you can start a 15-day free trial with Peel on the Shopify App store. Be sure to find Recharge under “Connections and Data Sources” in Peel to set up your connection.

The post Peel x Recharge subscription analysis for DTC brands appeared first on Recharge.

How much money do you want to make? That is the question that many business owners ask themselves when they are deciding what to do with their website. If the answer is “a lot,” then you should be focusing on conversions and conversion rate optimization strategies. Many businesses spend time trying to increase traffic to their website and fail to improve conversion rates once they get there. This is a huge but common mistake. In this post, we’re covering ten ways that will help increase conversion rates and generate more revenue for your ecommerce business! 

Make sure your website loads quickly

The faster your site loads, the less likely website visitors (aks potential customers) are going to abandon it before completing their desired action (like making a purchase).

When you are running a business, it is easy to forget about technology and the website building process because you have so much work on your plate already! Many webmasters underestimate what goes into creating an effective ecommerce website that performs well under load (traffic sources). If your site takes too long to load or keeps timing out, conversions will suffer. 

Update your website content regularly

If your website is still using old blog posts, an outdated landing page, or original photos, you should consider doing a major overhaul. Make sure that new unique visitors can easily find products and contact information while maintaining the latest content updates on blogs or landing pages for previous visitors. 

Blog posts and new website content can improve conversion rates in the following ways:    

• Helps establish you as a thought leader in the ecommerce industry and position yourself as an authority that people trust when it comes time for them to buy something. 
• Allows visitors who may not have been ready to purchase right away the opportunity to return at a later date when they are ready to buy. 
• Makes it easy for new customers who have never heard of your business before to become familiar with you and what you do simply by reading through some of your past content.

Improve your site navigation

Your website is the cornerstone to high conversion rates for your ecommerce store. Make your website navigation intuitive and easy to use. If you have important customer information or conversion opportunities on multiple pages, make sure it is easy for visitors to find their way around the site and align that navigation to the customer journey. 

The most important thing to remember about improving your site navigation is that you have to do it based on the user engagement and conversion rates that your business wants. 

If your goal is to sell products, then make sure that visitors can easily find a product and purchase it as soon as possible.

Similarly, if you want more leads for website conversions later down the road (e.g., email subscribers), place key conversion information, like contact information or an opt-in form somewhere that can easily be found. 

If you are really ambitious and want to increase conversion rates in both areas (products sales AND website conversions), consider adding interactive elements on product pages so there is something for everyone!

Optimize your website for mobile devices

In today’s world, many people are using their smartphones to shop online. Conversion data shows that 53.9% of all online purchases are done via mobile and that number is only going to continue to go up. So if your online store is not mobile-friendly, you could lose out on over half of your potential business from those mobile users! 

Making your site mobile-friendly can include a variety of changes and marketing strategies. You may need to update your design or even rebuild a new site from scratch using responsive web design principles. It might also be as simple as resizing your images. 

Review your traffic source data to see where your customers are coming from on each page. From there, you can decide which pages to focus on first for maximum conversions via mobile devices.

Utilize calls to action (CTAs)

Make sure that your CTAs are noticeable and easily clickable. You want visitors to be able to easily find it, but you also don’t want them thinking they are about to leave the website if they see a big bright red button! Work your CTAs  into your overall conversion rate optimization strategy and create a seamless experience for your website visitors. 

You don’t need to overwhelm a user with pop-ups to have a successful CTA strategy. Create CTA buttons that are noticeable but not annoying. Then, you can run A/B tests to determine if one version performs significantly higher and yields more conversions. Finding that perfect balance is the goal.

Improve your search engine optimization (SEO)

Having a strong SEO marketing strategy is key to ensuring new customers find your website. Make sure that your online store is showing up in the search engine results by improving SEO. This will increase conversion rates because more people can find you through Google and other search engines! 

Some common SEO mistakes that businesses make that can result in a lower overall conversion rate:

• Not using specific keywords on your page titles, headlines, or meta descriptions
• Repeating the same keywords over and over again – also known as “keyword stuffing”
• Not having enough internal links to other pages on your website

There are many different SEO strategies that you can implement and it’s important to analyze this part of your site carefully to ensure Google isn’t penalizing you for anything. This is another reason to make your site mobile-friendly because Google has started to prioritize this in search results.

Utilize social media to amplify conversion rates

Social media is a great tool for conversions because it allows you to engage with customers in a way that was previously impossible. The personal touch you can provide to customers on social media creates new acquisition channels. 

Social media can even help you with conversions by generating new sales leads if the online community likes your social media posts and shares them with their friends! The potential amplification from a viral post on social media makes focusing your energy on this strategy paramount to increasing your conversion rates. This means that conversions will start to happen organically which is a great way to improve conversions over time. Additionally, online reviews are much easier to collect and respond to, which makes conversions and referral traffic much more likely.

Test, test, and test some more

Make sure that you are constantly A/B testing your conversion optimization to get the best results for your business. 

A/B testing is a way to see how different tactics affect conversions on your website. You can run an experiment with two versions of the same page – for example, one version has blue text and another has red text. If you have visitors go through each variation in order to complete their desired action (like making a purchase), then you will be able to compare results at the end. 

By using A/B testing, you can see what is more effective for increasing your average conversion rates and utilize that conversion data to improve your website. This will lead to higher conversion rates over time because you are constantly improving.

Track your clicks

Make sure to use tracking codes (utm parameters) on your website. If conversions are not showing up in Google Analytics, you may need to make adjustments to ensure you’re getting a clear picture of your conversion rates.

Tracking codes are a great way to see where conversions are coming from and what pages they go through before converting. This will help you improve conversions by seeing which areas of your website or marketing strategy have the most success and pinpoint key areas you need to improve.

Check your analytics

Analytics allow you to see what aspects of your ecommerce store still need improving and which areas are working well in terms of conversions.  You can then use this information to improve conversion rates and find out what works best for your website.

Properly optimizing a site for conversions can take time and effort but the results always make up for all that hard work. EYStudios has extensive experience in helping businesses increase conversions while also making sure they look great across multiple devices. If you are interested in increasing conversions on your site, contact us today! We would love to work with you!

EYStudios offers email, social, and PPC digital marketing to go along with our award winning website design and development to help you convert your customers at every touch point. Our team of account managers and marketing specialists provide professional consultation and work with your business to craft a custom plan to integrate with your website in order to deliver data-driven results and a proven ROI.

The post 10 tips for ecommerce website conversion rate improvement appeared first on Recharge.

Here at Recharge, we work with the top agencies in the business to support merchants in creating growth strategies and implementing top-tier solutions. They’ve shared how they’re helping merchants deploy subscriptions, details on unique features they built, and their best advice for merchants as we head into 2022.

Before we dive into their answers, let’s meet our partners:

Meet the experts

As a leading Shopify Plus Partners for design, development, and growth services, Swanky Agency has spent a decade delivering innovative digital solutions that elevate their clients to the forefront of their industries.

Jamersan has helped countless merchants drive revenue-focused campaigns while making sure the technology stays out of the way.

The Taproom creates high-powered Shopify ecommerce solutions for fast-growing businesses.

Hawke Media customizes data-driven, performance solutions to help launch, scale, and invigorate businesses of all sizes, industries, and revenue models.

iamota is a leading Shopify Plus design and development agency partner that helps enterprise merchants succeed on Shopify Plus.

Arctic Leaf takes the time to thoughtfully understand brand voice and vision to deliver unmatched UX-focused website design and development.

Absolute Web is a full-service agency with strong abilities in ecommerce development and management as well as marketing, design + creative, and content production.

The expert opinions

What is the one thing all merchants should think about when deploying a subscription offering?

“Flexibility. It’s important to give customers the option to alter when they get their product delivered based on their unique needs, or to add/remove items per delivery. Convenience is essential to a successful subscription offering. 

Although it might seem counterintuitive to let customers skip, pause or delay a delivery, remember that consumable products don’t get used at a blanket rate, so it makes sense to allow customers the flexibility. This can help secure subscriber loyalty and advocacy, which is important for customer retention.”

Matt Abbott, Head of Growth, Swanky Agency

“The biggest single thing to consider is your customer needs.   Make sure you are mapping those needs to a subscription offering.  Without market fit, subscription offerings are doomed from the beginning.”  

TJ Gamble, CEO, Jamersan 

“Scalability is vital when a merchant considers a subscription offering. When you only have a few subscribers to start with, it’s smooth sailing and the logistics are easy to manage. However, you need to also plan how you’re going to handle that subscription offering as it grows and gains more subscribers. There are so many aspects to that question. How will it be managed within your fulfillment team? How will inventory be handled? What will you do to ensure it continues to be valuable for subscribers? What impact will scaling this offering have on the rest of your business operations? It’s not enough to have just that base starting plan, you need to think a year, 2 years, 5 years ahead. It isn’t just operational scalability, but what is the merchant going to do to actually scale it in terms of getting more subscribers.”

Shannon Sherry, Director of Marketing, The Taproom

“Subscriptions come in all shapes and sizes – what works for one merchant may not work for another. We work closely with our clients to map out the end-to-end customer journey for subscriptions. This allows us to ensure our merchants’ desired subscription model makes sense from a customer perspective and allows us to create a strategy to tackle any potential barriers to subscription. 

Some key considerations:

• Is the subscription offering enticing enough? What are the benefits of subscribing? eg. A discounted rate?
• Is the subscription offering easy to understand?
• Are the subscription options broad enough (pricing tiers, frequency, product options, etc.)?
• How might you reduce subscription cancellation? Can we utilize the Recharge platform to help businesses implement a strong retention strategy, including incentives such as monetary discounts or free gifts or encouraging customers to change their order date or swap out products?

Oli Best, Growth Manager, iamota 

“Merchants need to determine their business model prior to deploying a subscription offering because the model will predicate the scope of the work. If you want to sell coffee on a weekly frequency then Recharge will support everything you need right out of the box. If the merchant needs customer billing frequencies, or has a nuanced and unique buyer journey, then they will likely want to find an experienced agency who knows how to leverage Recharge’s APIs.”

Josh Garellek, CEO & Co-Founder, Arctic Leaf

“Merchants need to fully understand what their customers are looking for from an experience standpoint. This will ensure that the subscription offering aligns with the expectations of their customers as well as increases brand loyalty and lifetime value. Beyond that, it is important for the merchant to have a strategy for their subscription offering. We often recommend implementing a “subscribe and save” discount to incentivize customers and then have the merchant advertise it in their marketing communications. One more thing merchants should think about is adding a simple way for their customers to opt-out or cancel their subscription. If a customer knows that they are not locked into anything, they are more likely to give it a try.”

Shayna Silvers, Director of Marketing Strategy, Absolute Web

What creative subscription features have you worked on?

“We’ve been working with a pet supplements brand to help increase their subscription conversion rate and deploying a quiz to provide users with a tailored plan based on the age and weight of their dog. We’ve run many optimizations to this journey, currently focusing on the annual cost savings of being on a subscription over 12 months. 33% of users who start this quiz progress to purchase, which is significantly higher than the site average.

To increase the acquisition of new first-time users, we introduced a ‘sampling to subscription’ offer. A new user is taken through questions to identify the relevant product. They purchase a discounted Recharge product for their first month, before being switched to a full-price subscription. 

Utilizing Recharge in combination with Dynamic Yield, we’ve implemented campaigns showing returning users who purchase first-time products repeatedly the benefits of being on a subscription, and personalizing the on-site experience for active subscribers.”

Samantha Fraser, Lead Strategy Manager, Swanky Agency

“We’ve recently launched Copper Cow Coffee’s new site and subscription offering which is by far one of my personal favorite subscription projects we’ve worked on. Given there are so many coffee subscriptions on the market, it really isn’t enough to just have a straight subscription service, so they wanted to find a way to stand out by adding further value to the customer experience. 

Everyone drinks their coffee differently and prefers different flavors. But a lot of coffee subscriptions just send the coffee with little in the way of consideration for individual tastes. That meant the key to the customer experience for Copper Cow would be personalization. To achieve this, we worked with them to create an intuitive quiz flow that tailors the subscription to the individual customer. We also built a custom app that would essentially “speak” to Recharge, allowing the customer to further customize the box – removing items, adding new ones on, and the ability to change this month-to-month. This means the customer can try some seasonal brews, or add more of their favorite flavors whenever they want. 

What we’re left with is a super intuitive, easy-to-use, totally personalized subscription service. We’re still in the early days having launched only a few weeks ago, but we’re excited to see some results in the future.”

Shannon Sherry, Director of Marketing, The Taproom

“Working with Unilever’s teams in Seattle, New York, London, and India, in addition to Recharge, iamota significantly enhanced the user experience for Skinsei customers via our Road Map approach. We improved the UX and site performance for both potential new customers and existing subscribers.”

Oli Best, Growth Manager, iamota 

What do you believe is the most undervalued aspect of the Recharge platform?

“For me, it’s the built-in functionality that allows merchants to apply incentives based on customers’ cancellation reasons. For instance, if a customer wants to stop their subscription because it’s too expensive, you can present them with an opportunity for a discount right there and then. This can be a powerful retention strategy that reduces churn. Spending a few minutes on this can lead to a transformation in your customer lifetime value!”

Nichola Birch, Product Manager, Swanky Agency

“The most valuable features are often the most undervalued.  The simplicity of getting started combined with the knowledge and experience from the Recharge team make it our go-to platform for all of our merchants.”

TJ Gamble, CEO, Jamersan 

“On the platform side, the most undervalued aspects of Recharge are the integrations it has to ensure it fits into your ecommerce tech stack seamlessly. Beyond that, the incredible customer support that Recharge provides is another huge bonus. Through their work with some of the top ecommerce brands out there, Recharge brings next-level knowledge and expertise to the table for our account managers, prospects, and clients alike.”

Ashley Scorpio, Vice President of Partnerships, Hawke Media 

“One of the secret weapons working with Recharge is understanding how it has been built to integrate and work alongside other core apps and platforms within the Shopify ecosystem. From loyalty and rewards to upsells and email marketing, and customer service support. We are able to build a merchant solution that not only brings the value of subscriptions, but combines that with other revenue-driving implementations that bring surprise and delight to the end customer.”

Oli Best, Growth Manager, iamota 

“Recharge has a very powerful set of APIs that we don’t think enough merchants are leveraging to take their subscriptions to the next level.”

Josh Garellek, CEO & Co-Founder, Arctic Leaf

How can merchants be successful with Shopify or BigCommerce?

“There are so many strong integrations within the Shopify ecosystem that, when leveraged, allow merchants to succeed with subscriptions – these are what make the platform stand out for me. 

Some to point out include Recharge’s Shopify integration with Gorgias, which allows customer service teams to save time as they don’t have to constantly switch tools. There are also its integrations with ESPs which allow you to set campaigns based on subscription triggers (e.g. a customer canceling triggering a win-back campaign), as well as its links with loyalty tools which enable the creation of VIP tiers for subscribers. Plus, there are integrations with analytics tools like Little Data, which help merchants clean their Recharge and Shopify data within Google Analytics so they can truly understand lifetime value and churn.”

Nichola Birch, Product Manager, Swanky Agency

“The primary benefit of SaaS platforms like BigCommerce is that they are simple for merchants to manage. That has two profound impacts that compound to fuel growth. It frees up mindshare so merchants have time to properly strategize, and it alleviates technical boundaries. This builds an atmosphere of exploration and rapid trial-and-error testing that makes it much easier to find your way to success.”

TJ Gamble, CEO, Jamersan  

“I think that in order to understand why Shopify is great for merchants looking to get into subscriptions, we actually need to zoom out and take a look at the entire Shopify merchant experience. As a platform, it is so merchant-led and is constantly looking for new ways to allow merchants to grow their businesses. 

A huge part of that is the Shopify ecosystem – once you start with Recharge, there are 1000’s of other apps and integrations you can add in to add value to that subscription offering, improve your customer experience, and drive efficiency within your team. You can add loyalty programs to improve retention, inventory management systems to partially automate the fulfillment process, email marketing to boost subscriber communication, and so much more. And if you’re looking for niche functionality, there are so many great Shopify agencies and independent Shopify Experts who can help make that a reality. However you imagine your subscription offering, Shopify allows you to build that and sets you up for success.”

Shannon Sherry, Director of Marketing, The Taproom

“It was great to see Shopify prioritize subscriptions this year, by building the subscriptions model into the foundation of their platform. Customers and merchants alike can now gain the benefits of Shopify’s slick and seamless checkout experience when purchasing both one-time and subscription products. This was a revolutionary change for the platform, and has made it easier for Recharge and iamota to provide more flexibility and consistency as part of the merchant offering.

In addition, Shopify’s product roadmap includes additional features to make subscription models easier to take advantage of by merchants. We’re excited to see what comes next.”

Oli Best, Growth Manager, iamota 

“Arctic Leaf loves building subscription businesses on BigCommerce because their strong APIs allow for our team to build unique and completely custom business models. We support merchants who have very unique and complex buyer journeys that Recharge doesn’t cover right out of the box. Our team has the freedom to build middleware and headless integrations with Recharge to support this unique business model.”

Josh Garellek, CEO & Co-Founder, Arctic Leaf

Where do you see ecommerce going in 2022? 

“Given that brands need to make consumers’ lives easier than before to avoid them shopping elsewhere, I think we’ll start to see bigger brands and multi-product retailers introducing subscriptions as part of their offering in 2022. After all, it’s easier to make a customer choose what to put in their basket if they’ve already paid for it.  

The advice I’d give to merchants as we enter a new year is to always think about things from the customer’s perspective. Base your offering around what customers want, not what you think they should have. Much of this can be informed by data you already have and supported through qualitative research.”

Matt Abbott, Head of Growth, Swanky Agency

“We are still in the infancy of ecommerce. Each year, it gets more mature and difficult to gain marketshare by “following” the herd. The most important thing for the foreseeable future is to build an infrastructure that allows you to remain agile. Keep a close eye on the market and where people are seeing success. Then, as you identify emerging trends and traffic sources, leverage that agility to stay ahead of the curve.”

TJ Gamble, CEO, Jamersan 

“Throughout 2020 and 2021, consumer expectations have changed. Many of these changes are trends the industry predicted, but the pandemic really accelerated these. The biggest trend I think we’re all seeing is just how important omnichannel is to the customer experience. In 2020, it was essential for businesses to develop these fluid offline-to-online experiences, and then in 2021 it was online-to-offline. In 2022, this fluidity is going to be the expected norm, rather than a temporary accommodation. I’ve even experienced it myself, being frustrated at not being able to check stock availability in-store when I know I live nearby a physical retail store.

Merchants in early Q1 should look at their current structure for how their customers can go between channels, and identify any points where it may be difficult to get a customer to checkout. I think that it’ll be really interesting to see how subscriptions adapt for omnichannel, perhaps we’ll start seeing subscriptions have fluid fulfillment options e.g. the option to go collect your subscription from a physical store if you happen to be nearby. Or how we can better convert subscriptions through social commerce.”

Shannon Sherry, Director of Marketing, The Taproom

“Despite the move back toward in-person shopping and experiences, there is still a continued boom in online shopping across all demographics. Thus, ecommerce is only going to continue to get even bigger in 2022. We foresee in-person initiatives like branded pop ups or partnerships with big box stores being a bigger focus for brands that have likely been functioning solely on ecommerce the last two years. Additionally, with changing the regulations in the digital marketing space – iOS updates, privacy practices, data regulation, and more – we’re seeing more and more brands looking for support to navigate the landscape which means a greater appetite for partnerships with agencies and technology providers.”

Ashley Scorpio, Vice President of Partnerships, Hawke Media  

“There is a clear trend towards convenience within ecommerce and subscriptions play a key role in adding convenience to your everyday life. The more convenient you make subscriptions for your customers, the more loyal they’ll be. This could be achieved by allowing them greater flexibility over their subscription. However, we also want to make sure each decision they have to make is adding value for both the merchant and the customer.

We also foresee businesses becoming more creative in how they retain customers, with the use of exclusive products, surprise products, or additional discounts to thank them for their continued support. We are also seeing businesses create innovative business models based on subscriptions that drive dependable monthly recurring revenue.

Our advice to merchants is ensuring they find the balance between giving their customers the ability to tailor a subscription as much as possible, without complicating the experience. Striking this balance, can be tricky and this is where iamota supports merchants by mapping out the customer journey and user flows, and running user testing to ensure we are building in the right experience with the right level of complexity.”

Oli Best, Growth Manager, iamota 

“Merchants need to double down on the retargeting of existing customers. Not every customer is going to be a subscriber from the first time they purchase. A robust email marketing plan with automations that drive one-time purchasers back toward being subscribers is a must! Remember, a subscription model is an ongoing relationship with your customers and it takes time to sell both your product and story to that customer. A customer who purchased a one-off product is the perfect candidate for your subscription model, so just keep that in mind and retarget those customers.”

Josh Garellek, CEO & Co-Founder, Arctic Leaf

How is your agency helping merchants accelerate their business with subscriptions?

“We’re helping merchants to build a more reliable revenue stream. When customers subscribe, it enables the business to separate their marketing activity. Re-marketing becomes less of an expense because they’ve already secured the recurring revenue from those customers, meaning they have more budget and time to focus on new customer acquisition.”

Matt Abbott, Head of Growth, Swanky Agency

“We typically work with growing merchants that are dealing with the pains of outgrowing their infrastructure. We are constantly looking for opportunities to help them continue that growth and subscriptions are often a big part of that strategy.”  

TJ Gamble, CEO, Jamersan 

“Hawke Media is helping merchants accelerate their business by adding a subscription offering if they don’t already have one and encouraging them to diversify their subscription offering – either by offering a variety of products on a subscription basis, varying the cadence of recurring subscription box shipments, and allowing subscription box customization, or the ability to pause or skip shipments. By partnering with Recharge, we ensure any merchants we work with have access to the best in class solution to power their subscriptions!”

Ashley Scorpio, Vice President of Partnerships, Hawke Media 

“With iamota’s wealth of experience in the subscriptions space, we quickly and efficiently help businesses unpack their requirements and create a smart subscription strategy that utilizes the power of the Recharge platform. By adding subscriptions, we are able to help our clients gain the benefits of a more predictable and steady income, as well as increase the lifetime value of their customers.

At iamota we are not afraid to take on more complex projects. We partner with businesses to unpack challenges and find solutions to complicated and unique subscription models, be it highly custom kits, tiered memberships, or on-demand subscription refills.

The Recharge Theme Engine allows us the flexibility to build out fully custom customer portals to implement a subscription strategy and customer experience that is tailored to the exact business and customer needs. We focus on breaking down barriers to subscriptions to make subscribing appealing, exciting, and simple to manage.”

Oli Best, Growth Manager, iamota

“Arctic Leaf is a full-stack systems integrator who has a team of Client Success Managers, Engineers, Developers, and Baymard Certified UX Designers who support every aspect of a subscription model. Whether it’s building a headless subscription portal powered by Recharge, or redesigning a subscription page, Arctic Leaf can support in all facets. Arctic Leaf has traditionally helped accelerate our merchants’ businesses with subscriptions in three forms: the creation of custom subscription tools powered by Recharge, the creation of on-site experience to further drive subscription revenue, and accelerating business by incentivizing pre-existing customers to sign up via email marketing. We build the strategy, evaluate platforms, architect the business model, and execute.”

Josh Garellek, CEO & Co-Founder, Arctic Leaf

“Our agency is using subscriptions to help merchants accelerate their businesses by boosting brand loyalty and increasing customer lifetime value.”

Shayna Silvers, Director of Marketing Strategy, Absolute Web

If you’re looking for more advice on how to improve your subscription strategy, visit our blog for expert guidance.

The post Agency partners’ top advice for subscriptions in 2022 appeared first on Recharge.

To capture customers’ attention and keep them coming back for more, merchants need to ensure they’re meeting their customers’ demands and offering them an exceptional customer experience online. A lot of this comes down to the design of your ecommerce website. Getting it right will give you the best chance of success. 

In this article, UK-based Shopify Plus partner agency, Velstar, deep dives into six tried and tested UX design practices you can use to turn your ecommerce store into a conversion generating machine. 

Dig deep into your data 

All too often, ecommerce owners get hung up on their own design preferences or what their competitors are doing, without considering what their customers actually want. In ecommerce, the customer is always king. You need to understand what makes your customers tick – their likes, dislikes, wants, and needs. You need to make it as easy as possible for customers to find your store and buy your products. 

So before you begin designing your ecommerce website, make sure you dig deep into your customer data. If you’re redesigning your existing site, the process is a little easier. This is because you already have heaps of rich customer data at your fingertips. For example, you can use data from Google Analytics to help create buying personas, track traffic sources, customer behaviour, popular products and customer pain points.

At Velstar, our team of conversion optimisation specialists also use heat mapping and conduct a secret shopping audit to gain a thorough understanding of customers’ interactions with our clients’ stores. We then use this information to develop bespoke digital experiences that their customers will enjoy, as well as guarantee conversions. 

So, what happens when you’re designing a new store? 

If that’s the case, a good starting point would be to do some competitor research. Go through your competitors’ stores and test the customer journey all the way from the homepage to the shopping cart. This will give you a starting point. You’ll see the challenges customers face and you can resolve them on your store. 

A mobile-first approach

Mobile traffic is on the rise, so much so that the search engine giant, Google priorities mobile-friendly websites over desktop. So, if you’re not designing with mobile in mind, you’ll be leaving a lot of money on the table, particularly if you’re targeting Millennial and Gen Z audiences.  

Remember, mobile commerce is about more than just ecommerce on a mobile phone. From mobile payments and location-based services to AR and AI, every customer touchpoint needs to be accessible and optimised on mobile. 

A few things you can do to ensure a smooth mobile experience include:

• An easy to access /add to cart function
• Big, easy-click buttons
• One-page checkouts 
• Digital wallets e.g. Apple Pay, Paypal, One Touch

Seamless on-site navigation

One of the biggest conversion killers is poor site navigation. Customers have short attention spans. They’re not going to waste their time endlessly scrolling, searching for the products they want. In fact, 50% of lost sales are because visitors can’t find what they’re looking for. It’s imperative that you make navigation as seamless and intuitive as possible on your ecommerce website. 

Ensure that your search bar is visible throughout the shopping journey – on every page. And keep your navigation menu to the top left side of your site pages, because this is where your customers expect to find them. And, don’t forget to use high-quality product imagery across your store, because even the very best designs look bad with poor quality imagery. 

When it comes to site navigation, you should always be thinking of ways is to reduce any barriers to purchase. 

Always keep site speed top of mind

Never underestimate the importance of site speed. Research by Google shows that 53% of mobile users will abandon a site if it takes longer than 3 seconds to load. And a one-second delay in load time can affect conversions by as much as 20%. 

Every design decision you make for your site should be centred around quick loading speeds. During the design process ask yourself whether you really need lots of video content, a beautiful 4MB PNG image, or whether the font you want to use will be on your customer’s computer, these might make your site look flashy, but they can have a significant impact on the speed of your site. 

Simplicity 

Well designed sites are often the simplest. You really don’t need to reinvent the wheel. If something works for your business and your customers, don’t change it, or overcomplicate it. Simplicity is key. 

Test, test and test again

Like with everything in ecommerce, testing is an essential part of the design process. 

You can design the most innovative store and follow every single best practice, but at the end of the day, your customers will have their own set of unique needs. The only way to know what works is to continue to test your site and assess the changes you make. 

The customer journey is never constant. What drives significant results today won’t necessarily work tomorrow. Customer expectations are always changing. In order to continue to optimise your store for conversions and stay one step ahead of the curve, you will need to keep adapting. 

Whether you’re just starting out or are years into your business journey, if you need assistance designing a user experience that will compel your customers to buy and keep them coming back for more, get in touch with our team of UX designer, today. 

The post 6 ecommerce website UX design best practices to supercharge your sales appeared first on Recharge.

‘Tis the Season to be Proactive. As the changing foliage and dipping temperatures signal the arrival of autumn, elsewhere, activity is heating up as retailers prepare for a busy holiday shopping season.

They are not the only ones.

With the uptick in retail shopping due to the pandemic, fraudsters continue to enjoy an expanded playing field of mayhem and are poised to wreak havoc online again this year.

Attack attempts may be inevitable, especially for large well-known retailers, but focusing on the following five key areas will help ensure that your business is protected as the busiest, and most vulnerable time of year approaches.

1. Technology, technology, technology 

First and foremost, if you conduct business online, then it is critical that all your systems, software, cybersecurity measures and anti-fraud software are up-to-date. As fraudsters become more specialized and sophisticated, retailers can no longer rely on basic in-the-box solutions to securing their data and processes. 

With increased holiday sales traffic, it will be easier than ever for cyber-criminals to slip through the cracks, if those potential chasms are not secured by the most comprehensive and advanced solutions available. 

Today, advanced software will stand guard, conducting real-time analysis of all online sales and patterns — flagging, blocking, and even terminating suspicious activity. NoFraud.com offers a one-stop solution that will allow you to focus on sales and sleep soundly as your business is protected.

2. Consistency

To meet the swell of business during the holiday season, retailers often hire additional staff. This is not the time to slack off on training and management, even for those temporary hires. 

Make sure that all new personnel are appropriately directed and supervised to ensure that company protocols and processes are followed. And even more importantly, that staff learns to detect any anomalies or irregularities in shopping or return patterns that can be flagged for fraud or breach. Ensure that they learn when and how to escalate any issues identified, so that they may be appropriately mitigated.

3. Reporting

Beyond your own devices, the FBI maintains a sophisticated cybercrime website for the reporting of suspected fraudulent activity.

Consider the FBI your partners and allow them to do the heavy lifting when it comes to the investigation and prosecution of online fraudsters. Their website also provides up-to-date news and tips for protecting your business, especially during the busiest time of year. Visit  Visit On the Internet — FBI for more information.

4. Mixed Shopping, chargeback and return tactics

Fraudsters are creative and will employ an array of malevolent tactics to steal your money and business. What has become known as m-commerce, or mobile-commerce, is set to surpass traditional desktop shopping this year, and it is important to pay attention to some of the most common forms of fraud. 

Today, mobile crime accounts for up to 25% of online retail fraud. Businesses will also see an increase in digital gift card purchases, or even the employment of  “mixed cart” tactics, such as the purchase and shipment of actual goods to a victim’s physical address coupled with the pilfered purchase of digital gift cards. 

Many fraudsters will take advantage of fatigued employees, worn down by the heavy demands of the weeks leading up to the end of December, and attempt all sorts of schemes in person, on the phone, or via chats. And of course, the reliance on volume attacks using bots to overwhelm retailers’ systems, shutting down, blocking, or otherwise disrupting or corrupting the flow of and ability to conduct clean business during the holiday season. When it comes to returns and chargebacks, these are also areas to look at carefully, and allow for both human and anti-fraud software to analyze what is going on. 

With a rush of returns and chargebacks set to occur during and immediately following the holidays, it pays to take the time to employ the most effective systems to ensure that fraud is not occurring. One of the most common crimes in this area is when people order and receive items, and then reverse the charges, with the promise of returning the original goods but never do. Pay close attention as this is one of the most damaging areas of fraud to businesses not only year-round, but especially around this time of year.

5. Human weakness

In-person shoplifting attempts are generally up with the expanded holiday traffic flow and crowding in stores, as well as supplementary in-store displays. It is simply put, easier to steal, and there are unscrupulous people out on the prowl for such opportunities. 

At the same time, not everyone who ends up stealing is a common criminal. During times of desperation, people who under normal circumstances would never consider taking something that isn’t theirs, might be stressed enough to steal out of desperation. High stress circumstances such as unemployment, which in many cases is still being experienced across the country as the nation still grapples with Covid.

The same applies not only to customers who visit your brick-and-mortar locations but even staff, especially those hired seasonally who may not consider themselves part of the “team” and thus have an easier rationalization of their actions. Generally, online fraudsters are a more sophisticated and intentional set, whereas shoplifters may act impulsively. Consider fortifying your physical displays, internal security personnel, and security cameras.

The Bottom Line

The prolonged stress and tensions of Covid, coupled with the ever-expanding sophistication and specialization of the international efforts by cybercriminals during the busiest online shopping season of the year will make for a challenging period for online retailers. Like the boom-and-bust periods of yore, it can be an extremely lucrative time, or a time of great losses if businesses are not adequately prepared.

As the fraudsters of the world gear up for a busy season, shouldn’t you be doing the same?

___________________________________________________________________________

To explore solutions to help protect your online business during the busy holiday season and throughout the year, contact NoFraud.com today.

The post Cybersecurity for ecommerce brands appeared first on Recharge.

As the “golden era” of DTC startups is over. Only the brands that are able to improve their customer lifetime value (LTV) to customer acquisition cost (CAC) ratios will continue to grow sustainably. 

In this article written by Wilson Hung, Director of Growth @ Kettle & Fire and Co-Founder of GetARPU.com, we’ll examine why ad costs are rising so unsustainably, how to mitigate those costs by improving LTV:CAC, and examine high level strategic trends as alternatives to consider for your brand.

Part 1: Why ad costs are rising

Prior to 2014, it was difficult to scale a Digitally Native Vertical Brand (DNVB). However, as the major ad platforms, like social media and search engines, became more advanced with improved attribution and bidding capabilities, so did the opportunity for these online-first brands.

Fast forward to 2015-2016. Entrepreneurs started taking notice of the opportunity and the early adopters of DNVBs were entering the space. This early stage was the “golden period” where DNVBs had access to large consumer markets at very low advertising costs. Advertising via social media and search engines was still in its infancy, giving more visibility to these up and coming brands. 

But in 2017-2018, the space started to see the first signs of rising ad costs. The early brands began to saturate their “core consumer groups” and ad costs began to rise. At the same time, competition for the same product categories started to emerge and has resulted in more competition.

In 2019, ecommerce professionals and analysts predicted continuous rising ad costs as brands become over-reliant on paid acquisition and venture money flooding into the space.

Consumer CPG changed at rapid speeds, and the incumbents were struggling to figure out how the response to losing market share from the DNVB startups.

As a countermeasure, incumbent CPGs are increasingly outsourcing their R&D by creating startup investment funds. These funds are backed by some of the largest companies in the world with lots of available capital.

This has created an environment where emerging DNVBs have greater access to capital, and 40% of VC dollars go towards Facebook, Google, and Amazon.

“Today’s massive venture-backed advertising, sales, and user acquisition playbook has morphed into one that champions growth at any cost. Startups spend almost 40 cents of every VC dollar on Google, Facebook, and Amazon…fresh tactics go stale in months, and customer acquisition costs keep rising.”

Chamath Palihapitiya, Founder of Social Capital:

On top of new DNVBs having access to capital, there are also more DTC brands being created. This results in higher ad costs due to increased competitive bidding on the same keywords and audiences.

The emergence of new software tools & platforms made it easier and cheaper than ever to launch online brands thus reducing the barrier to entry. Where early brands had to develop their own e-commerce technology stacks, SaaS companies, such as Shopify, Recharge Payments, GetARPU, began to gain steam as they developed solutions to fit the needs of these online-first brands. 

There were also emerging debt financing options like Clearbanc and Circleup which made it easier than ever for brands to finance inventory and marketing spend.

And of course, the presence of the major advertising platforms have made it much easier to scale new businesses. Instead of selling a new CPG brand at local farmers markets, entrepreneurs have increased targeting, accuracy, and access to scale at any stage of their business. The digital nature of this process has allowed for the marketing and sales expenses to go toward new customers in new geographic locations, ultimately broadening the reach.

Due to increased competition, brands are now able to take “experience shortcuts” by using tools like AdEspresso to gain visibility into top-performing creatives from competitors, as well as looking at other brands for inspiration on their sales funnel. As consumers begin to see “similar” creatives and landing pages, ad fatigue causes lower performance, which in turn increases the difficulty of acquiring customers.

This phenomenon is nothing new, the effectiveness of marketing channels will continue to decrease as brands scale due to the “Law of Shitty Click Throughs” coined by Andrew Chen.

“Scale effects mostly work against you in paid marketing. The longer your campaigns run, the less effective they become – people start seeing your ads too often.”

Andrew Chen, General Partner at Andreessen Horowitz

So as a DTC brand grows, they saturate the “more affordable” core consumers. To continue growing, the volume eventually comes from the “more expensive” non-core consumer groups. This requires more education to convince these less qualified buyers. More education ultimately means more touch points, which means more clicks that have to be funded by advertisements, which means higher marketing expenses.

A recap on the rise of ad costs.

Ad costs are rising because:

1. Increased VC funding resulting in record high digital advertising spend: DNVBs have access to more VC funding than ever before combined with 40% of VC money going into Facebook, Google, and Amazon.
2. Increased Competition in the DNVB Landscape: With the emergence of new ecommerce SaaS tools, advertisement platforms, and new financing options, it’s easier than ever to create digital brands.
3. Increased Ad Costs Due To The Law Of Ineffective Click Throughs: Marketing efficiency decreases as volume scales due to consumer fatigue, increased brand competition, and access to less qualified consumers.

Part 2: What is the LTV:CAC ratio and why is it important?

The brands that will perform the best in the DTC space are able to improve their customer lifetime value to customer acquisition cost ratio to mitigate the detriment of rising ad costs.

What is the LTV to CAC ratio?

Lifetime value (LTV) is the value of a customer to the brand’s bottom line. And the customer acquisition cost (CAC) is how much the brand pays to acquire a new customer. Thus the LTV:CAC ratio helps understand the leverage a brand has between what the value of a customer is, and the cost to acquire one.

When the LTV:CAC ratio is below 1, the brand is taking a loss to fuel growth. This is unsustainable and will eventually rely on financing opportunities to sustain revenue growth. The problem is as a brand continues to grow, the customers get less qualified, meaning their customer lifetime value will decrease, which in turn, lowers the entire ratio. 

Why is LTV:CAC important?

In the model example above, the metrics are fictional but comparable to the average DNVB. Each column represents a different year, from 2016 to 2018, and for simplicity, we will assume the average purchase frequency to be equal to 1.

The only changing variable for each column is the ad-costs, captured as the “Cost Per Click” and based on benchmarks from AdEspresso.

During the “golden era” of DNVBs in 2015-2016, these early brands enjoyed access to cheap ad costs which made their business model see tremendous customer profitability.

In the 2016 example, just on the first purchase alone, the brand was able to be profitable with a LTV:CAC ratio of 2.3. This means the brand is able to immediately reinvest the profits into funding more advertisements resulting in exponential growth.

However starting in 2017, we start to see the consequences of rising ad costs. The brand is still able to be profitable on the first purchase, but barely. This means less profits are able to invest in growth opportunities.

And finally in 2018, the rising ad costs made it such that the brand is now losing money on the first purchase. This ultimately means that the brand must improve efficiency, or rely on projected future income from repeat purchases to fund growth. This puts a strain on cash flow as the brand ventures into a “payback period” user acquisition strategy.

Recapping the LTV:CAC ratio

LTV:CAC is a ratio brands can use to understand the amount of leverage they have to acquire a customer. Since LTV is the total value of a customer to the bottom line, and the CAC is the cost to acquire a customer. The higher the ratio, the more profits the brand can leverage to reinvest into growth (additional advertising, more hires, more R&D, etc). However, the lower the ratio, the less profitable the brand is and sustainability to continue growing the brand. Brands that were typically profitable with high LTV:CAC ratios in 2016 are no longer profitable due to the rise of ad costs.

Part 3: The five trends of high performing ecommerce brands

Improving Efficiency of Customer Acquisition

As demonstrated in Parts 1 & 2, the “golden era” of DNVBs are over. But there’s still a lot of opportunity in the market. Brands are able to mitigate the rising ad costs by either improving CAC efficiency, or by increasing LTV.

Improving CAC efficiency

Trend #1: The best brands will lower CAC by bringing core competencies in-house

Historically, brands were able to outsource core competencies to agencies. However, I predict that the brands that continue to thrive are able to bring in the key skill sets in-house for two main reasons:

Reason #1 

The major ad platforms have become so advanced that it has leveled the playing field for media buyers. In the early days, ad agencies focused on in-house ad buying technologies and created an advantage due to opportunities that could only be taken advantage of by agencies.

But now, the Facebook & Google algorithms are so advanced where the skillset barrier is much lower. A common & effective strategy for targeting on Facebook now is “just let Facebook’s algorithm do it’s thing” and hope it produces results. Also due to the popularity of these platforms, it is easier and cheaper than ever to find skilled & talented buyers familiar with these platforms.

An example of this is with day parting. Facebook & Google’s algorithms for the most part could be set on “automatic” without manual intervention. This is where agencies with custom in-house software become more valuable as they can automatically distribute spend to take advantage of inefficient day parting.

Reason #2

Because of the above reasons, the main value of agencies has become more strategic. They drive value by having processes and teams that optimize for ad creatives, testing, and data analysis. However, these are the core competencies that brands should nurture in-house because they are the prerequisite skill sets to the bigger picture: increasing the lifetime value of a customer (more on this in Trend #3). In order to fund the creation of these “core competency functions,” the performance channels need to be taken in-house.

For example, let’s assume a brand spends $200k per month on Facebook and pays a typical 15% of ad-spend fee which equates to $30k each month.

That 15% agency fee could be used to invest in the creation of an internal creative team (e.g head of creative, copywriter, designer). This creative team would initially support only the “Facebook ads” channel because it’s the channel with the highest demand for creatives.

However, over time as the creative team builds up internal skill sets, the brand is able to gain a better understanding of the customer pain points and what value propositions resonate the most. The customer research & learnings are also all retained in-house.

Eventually, the creative team is operating efficiently and showing results improving the effectiveness of Facebook ads due to the improved click throughs. This means the brand can now start expanding the creative team, hiring more copywriters/designers, and adding in additional functions such as videographers.

Now the creative team has more capacity to support other areas of the business by providing ads to “Google Adwords”, creating landing pages, email marketing, and so forth. And since the “learnings” are all retained in one group, an “effectiveness multiplier” is now compounded on all the other areas of the business, thus ultimately driving down the CAC ratio across the entire organization.

The same framework applies to other core competencies such as a testing/CRO team, data team, and a retention team.

Trend #2: The best brands will lower CAC by diversifying channel mix away from Facebook/Instagram & Adwords

Due to rising ad-costs, brands will be forced to look at ways to diversify their user acquisition channels so they aren’t as reliant on Facebook or Google.

Marketing channels come and go (e.g. website ad banners). As one tactic is adopted by the masses, the effectiveness ultimately declines. By the time brands realize their channels are no longer profitable, it’s already too late. The best brands are able to set aside resources for “R&D on new distribution channels” with the goal of creating their own inventory, rather than bidding on it.

“I think what’s going to happen is you’re going to see a lot of the biggest DTC brands are going to have really powerful founders, and that is going to be the differentiation,” Perell said. “If you look at people with reach or people with influence, they start off from day one with way lower customer-acquisition cost and that right there is the delta between failure and success.”

David Perell from AdWeek

This means identifying other companies and platforms your consumers spend time on outside of Facebook or Google. These channels take more time to establish and they’re not as easy as turning on an ad on Facebook, but because the barrier of entry is higher, you get better costs as it’s not widely accessible to the open market.

Examples of brands “creating their own inventory” include:

1) Perfect Keto creating their own podcast (over 1M downloads) for their target consumers. This is a great opportunity to own a valuable “mindshare” of potential customers, and to build relationships with influencers.

2) Dr. Axe investing into Content Marketing & SEO resulting in over 5MM/mo. This has “network effects” by positively impacting paid channels such as FB ads due to larger retargeting audiences.

3) Native Deodorant creating a new SKU just for “referrals” with the “give a free mini deodorant” strategy which has resulted in over 100,000 successful referred customers.

“One common trait that these thriving brands share is their oft-viral, cultivated, loyal following. In the future – brands will begin, not by immediately selling products but by curating an audience first. In 2010, Glossier Founder Emily Weiss launched Into the Gloss. It was then a beauty blog that featured inspiring women across a spectrum of professions, ethnicities, and wealth.”

Web Smith, The Pivot To Tradition (2PM)

There will always be a tradeoff for growth when compared to efficiency. As a brand grows, it is inevitable for CAC’s to continue to rise, so to improve the LTV:CAC ratio, brands must also be able to improve LTV.

Improving lifetime value (LTV)

To illustrate the importance of improving repurchase/retention rates to increase average lifetime value, let’s look at another hypothetical scenario.

In the above example, all columns have the same ad costs based on 2018 rates. Each column also has the same conversion rates, average order values, and contribution margins.

The only thing that changes in this example is the “Average Purchase Frequency” or repeat purchases.

By just increasing the purchase frequency by 20%, what was initially unprofitable is now profitable. Unless brands “pay to re-acquire a customer,” the cost to acquire a customer is only realized once. So all future purchases have improved margins because there are no advertising costs.

The importance of recurring subscriptions

Figuring out how to tie in a recurring subscription model is going to be incredibly important to mitigate the rising ad costs. Fortunately, subscriptions apps such as Recharge makes it easy for DNVBs to tie in a subscription into their business model.

Many of the major DNVBs usually have some sort of “subscription based” model tied into their purchase options. Subscribers have much higher purchase frequencies, and the predictability of annual recurring revenue helps de-risk a “payback period” model for DNVBs. In fact, a single customer can maintain a much higher LTV to CAC ratio, due to the returning nature and future revenue they will generate. 

With a lower churn rate, and higher retention rate, subscription customers are more likely to be in it for the long-haul with a brand. The customers added to the subscription model results in a compounding of growth that allows for higher average annual recurring revenue than just one-off purchases allow.

Top Left Corner: Brands that have products that do not fit a subscription based model will typically need to have very high average order values (i.e. Casper) with high margins to scale. Otherwise, these brands will need to rely on non-paid channels such as MVMT focusing on social virality to scale their online business, and creating multiple products to cross-sell to existing customer bases.

Bottom Left Corner: Brands with products that do not fit the subscription based model and lack high average order values typically will have difficulty scaling their business. The vast majority of DNVBs currently fit this category and are typically the “mom & pop” businesses with flat year-to year growth. Brands that are able to survive in this category typically rely mostly on retail distribution (e.g. Primal Kitchen).

Top Right Corner: Brands with products suitable for a recurring subscription, with high average order values and margins are the ones that are best suited to scale a paid media first strategy. These brands have the luxury of having extremely high LTV:CACs which enable unique offers such as free plus shipping or trial based funnels.

Bottom Right Corner: Then there are the brands with natural subscription products, but low average order values. These are the brands that typically require non-paid channels during initial traction, such as Dollar Shave’s viral Youtube Videos, or Harry’s referral campaign. After these brands gain initial traction, they typically will need to raise large amounts of funding to scale paid media because these of long payback periods due to the low average order values. These brands are also heavily incentivized to come up with SKUs specifically for cross-selling to increase the average order values of existing subscribers (i.e. Razors → Shaving Cream).

One of the most difficult roles to hire for is someone qualified to own the “LTV metric”. Where there is an abundance of people who know “Facebook Ads”, there is less expertise surrounding retention & LTV.

“Retention & Growth related roles are incredibly difficult to hire for. The profile of this candidate is weighted towards a data/product skill sets instead of traditional marketing backgrounds. So instead of people with “marketing/business degrees”, we’re looking for people who have traits typical of strong programmers, engineers, investment bankers, or data analysts.”

Markus Karjalainen, Head of Digital @ Foursigmatic

One mistake many brands make is assuming LTV & retention is mostly comprised of “email marketing.” So they hire people with email marketing backgrounds. But in reality, there are many aspects related to improving LTV.

Trend #3: The best brands will increase LTV by assigning an owner to the LTV metric

To improve LTV, there are three metrics brands can increase: Gross Margin, # of Purchases, and the Average Order Values (AOV).

Someone within the company must also own the “gross margin” metric by always improving on margins. Whether if it’s re-negotiating rates with fulfillment partners, or through operational excellence to increase production yields to reduce manufacturing costs, improvements to the Costs Of Goods Sold is one of the biggest drivers to increase LTV.

The other responsibility of the LTV owner is to increase the number of purchases per customer. There are multiple opportunities here, but in general, the biggest levers typically involve custom development projects to improve product/site design. So the best brands are able to manage development & UI/UX resources to increase subscription opt-ins, reduce churn, and increase revenue-per-visitors

Lastly, brands can also improve LTV by increasing average order values. Typically, brands will only optimize for AOVs on the first purchase (e.g. tiered pricing discounts to encourage higher quantity orders).

However, one opportunity many brands miss out on is increasing AOVs on their subscription customers. The customers on a subscription plan are the most engaged & loyal customer base, but very few brands attempt to up-sell/cross-sell other products. One easy way to do this is leveraging the upcoming order notification emails to sell more products to subscribers using tools such as getARPU.com

Trend #4: The best brands will increase LTV by reorganizing the DTC function to optimize for LTV

Once brands are able to assign an owner to the LTV metric, they can now start restructuring the marketing function. The support functions (creative, testing, data) established in Trend #1 are now able to assist the two main teams: Traffic & Monetization Teams.

“In the early stages of a business, it’s natural to have less specialization amongst people on the marketing team. One structure is to have a traffic team and a monetization/LTV team. The former (traffic) focus solely on driving customers in, typically to the website. The monetization and LTV team typically is responsible once someone hits the site. So everything from on-site conversion, upsells, etc. all the way thru back-end monetization and retention.”

This isn’t to say that the teams don’t interact.  Obviously, it’s crucial that the traffic team understands what’s being offered on the site, via email, etc. And so it’s helpful if both teams roll up into one person, whether a Director or VP of Marketing who helps to ensure that the teams are coordinating appropriately.  

One of the reasons this structure can work, other than creating specific accountability to team members, is that often times, the personalities who thrive at scale in these roles are a bit different.

Traffic folks certainly need to have a measure of creative aptitude, but there’s also an aspect of day trading that comes with this role. Digging into data within a platform, finding openings, pressing where things are good, backing off where they aren’t.

Conversion and retention folks aren’t necessarily the opposite, but more seem to thrive at a different pace. The reality is that working on back-end monetization and seeing the results of a retention campaign takes a lot more time than whether a new creative worked on Facebook.

It’s not about good or bad, just different.  And so find a place where each of the team members can add meaningful value, in a role that may be better suited to them, can mean a win for all parties.”

Babak Azad, Prev. SVP Media & Customer Acquisition @ BeachBody

It’s important to note that the two teams must work closely together to identify the channel sources with the highest quality of potential customers. A brand can have a world class retention strategy, but if the traffic team is bringing in low quality customers, the retention will suffer. Thus it’s critical to communicate and set different CAC targets for each channel based on the LTV per channel. This is why it’s so important to improve the data infrastructure, as we’ll discuss in Trend #5.

Trend #5: The best brands will increase LTV by making more accurate decisions informed by data

Brands that are able to improve their data infrastructure will be able to make better decisions informed by data. By understanding the LTV by Channel, brands are able to allocate resources to better quality channels.

“Given that many performance marketers will drive spend when they see good results, the accuracy of a brand’s data infrastructure is very important. I have a client in the health and fitness space that ramped spend from $75K per day to $700K per day in the matter of a week.  If their LTV model were wrong, that could be a very costly mistake.”

Babak Azad(Prev. SVP of Media & Customer Acquisition @ Beach Body).

Instead of assigning the same CAC & Return On Ad-Spend targets across all channels, the best brands are able to assign targets that are unique to each channel. This ensures quality channels have sufficient resources while divesting from poor quality channels.

To mitigate rising ad costs, brands will begin to have difficulty to become profitable on the first purchase. This means brands will need to create new CAC targets based on a payback period they are comfortable with. So the brands that have inaccurate or little understanding of their LTV model will ultimately be limited because they’ll be leaving money on the table, or losing more money than anticipated.

“Understand LTV by channel (margin, not simply revenue) is key. But so is knowing what constraints the business is operating under – based on cash flow, business risk, goals, etc.,  what are the parameters around when you have to breakeven on a new customer. So better understand how that LTV plays out over time (day 0, 1-30, 31-60, etc.) can have a big impact on how you manage paid.”

Babak Azad(Prev. SVP of Media & Customer Acquisition @ Beach Body)

The brands that are able to understand a payback period are then able to create financing strategies to cover the period of “negative cash flow”. And once brands have the data infrastructure to track the payback period, they can start reducing the period by focusing on improving up-sells & cross-sells to increase the value of each customer (e.g. using apps like getarpu.com)

Recapping the five trends of high performing ecommerce brands

The brands that are able to mitigate for rising ad costs will be able to work on the 5 trends of high performing brands:

• Trend #1: Improve sales & marketing efficiency by bringing in core competencies in-house from agencies
• Trend #2: Diversify acquisition channels to non-paid or emerging paid channels
• Trend #3: Assign a owner to the LTV metric to create a cohesive strategy
• Trend #4: Reorganize their marketing teams to optimize for LTV
• Trend #5: Make more accurate decisions informed by data

In summary, the golden days of DTC brands are over due to rising ad costs driven from rising competition. To mitigate for rising ad costs, the brands that are able to thIn summary, the golden days of DTC brands are over due to rising ad costs driven from rising competition. To mitigate for rising ad costs, the brands that are able to thrive will be able to improve their LTV:CAC ratios. These brands are able to improve LTV:CAC by increasing LTV, and also slowing down the rise of CACs with increased efficiency.

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In this day and age, CBD is not only a common topic of conversation, but it can be found almost anywhere. Brands have found innovative ways to bring the product to consumers in the form of lotions, bath balms, chocolate, water, and more. But first things first, what is it? According to healthline.com, CBD is one of over 100 chemical compounds known as cannabinoids found in the cannabis or marijuana plant, Cannabis sativa. Unlike THC, which is commonly found in cannabis and responsible for that “high” feeling, CBD is not psychoactive. This makes it a very popular option for consumers looking for relief from physical, mental, or emotional pain and ailments to enhance their overall health and well-being.

The hot topic in ecommerce

Before getting into the details of the CBD market and the strategies your brand can utilize, Arctic Leaf CEO and Co-Founder, Josh Garellek, actually spoke on the topic of CBD at BigCommerce’s Make it Big conference in 2020. We also had the huge pleasure of kicking off our first ever OnTap with Arctic Leaf discussion series last year with our partners and friends over at BigCommerce and Klaviyo. In this discussion, our audience received actionable suggestions to help scale their CBD brands while raising average order value (AOV) and customer lifetime value (LTV). We have posted the full-length video of the discussion and speaker details on the Arctic Leaf blog, which you can check out at any time! Josh and our expert partners provided valuable information around the CBD industry (some of which is shared below) and that discussion topic was the perfect foundation for what we’re going to cover below.

The rise of CBD

Since the “pandemic that shall not be named” began in March 2020, the CBD market has seen a huge spike in consumers who are looking to purchase and utilize products to help alleviate the stress and anxiety that resulted from the whole world shutting down. In a survey conducted by the Brightfield Group, 39% of people indicated that they would be using more CBD during the pandemic. This was particularly true amongst Millenials and Gen Z consumers. This increase in consumer demand has led to more brands and industries branching out and adding CBD products to their catalog, or creatively enhancing the products they already carry and produce.

In terms of the CBD consumer trends, High Times indicated that people were buying less frequently, but in higher amounts. These trends are particularly true for ecommerce brands who sell their products online. Taking it back to the Brightfield Group, 37% of all cannabis-based product sales in the U.S. during the pandemic were CBD products. Overall, 53% of consumers experience anxiety and 76% indicated that “well-being” was their desired outcome from using a CBD product. Another noteworthy outcome of the increased popularity of CBD is the widespread mentions of it on social media. Just a month after the pandemic began, there were almost 13,000 social media posts mentioning CBD. So while many industries and brands were taking negative hits to their businesses, this market was not one of them.

An important thing to bring up among all the positive trends we are seeing in the CBD market, is that the FDA has begun to really crack down on businesses that are making medical claims with CBD. This topic is one of the things we cover in more detail during our OnTap discussion, but it is something to keep in mind and really be aware of when it comes to your marketing and content strategy. Thankfully, Leafly has a great article that allows you to check out the state(s) where you do business to see if it’s legal and what the restrictions are to ensure you are playing by the rules.

How to grow your CBD brand

If you’re a brand that currently offers CBD products, or you’re looking to add CBD products to your catalog, we wanted to share some of the proven strategies and tactics we use over here at Arctic Leaf to help our merchants grow their businesses. From an email marketing perspective, an important email flow is the Replenishment Flow. This type of flow has resulted in the best conversions for our CBD clients. It takes into account the type of products your customers purchase, at what amounts, and the frequency. As your customer gets low, we use Klaviyo to trigger a reminder email that tells them to go back and purchase before they run out. With anxiety being one of the main health conditions CBD can help with, it is even more important to really get ahead of and predict your customer’s needs.

A great safety net email flow is “Back in Stock”. This flow reminds the customer that what they were previously looking for, or had purchased, is now back in stock. With mentioning this email flow, it is important to emphasize that it should be used as a safety net. It should not be a consistent flow strategy you need to use. As we’ve discussed, the demand for CBD is very high, so having your product in stock is super important. People are consistently increasing the amount they purchase, so you want to make sure you are prepped and ready for an influx of new customers and large orders.

The last thing we want to touch on is merchant processing. Of course. CBD is considered a “high risk product” so this has been a bit of a headache for existing and new brands who sell CBD products online. On BigCommerce, you now have almost 20 different options for payment gateways and merchant processors. There is no one size fits all solution, so Arctic Leaf can help you evaluate different options to find what works best for your brand.

Whether you are a current CBD brand, or a brand looking to add CBD to your product line up, the key takeaway of this read is that the CBD vertical is going to continue to grow. That being said, it’s important for you to always be cognizant of the trends and strategies that will help your brand be successful. 

If you still have some questions, or are interested in learning more about how Arctic Leaf can help you navigate this growing market, please reach out to Arctic Leaf Solutions Consultant, Chase Bowler, at chase.bowler@arcticleaf.io. 

The post The CBD market: trends, strategies, and achieving success appeared first on Recharge.

Success offers its challenges

But as we see the figures continue to grow with high double-digit month-on-month growth, so too does the pressure on online retailers to make sure that they are winning a fair share of this new business. As well as devising a strategy that sees ecommerce continue to grow as physical stores reopen and consumers return to the high street. While 2020 may have been a case of ‘all hands to the ecommerce pump’, 2021 is the year of facing omnichannel challenges and making acquisition consistent and effective across all channels. 

Here, we take a look at strategies across acquisition, conversion, and retention to help online retailers in the home and garden sector. 

Your not-so-typical customer journey 

Customer journeys in the home and garden arena vary very differently from other industries. Of course, it depends on the product entirely but if we think about a product such as a sofa or a bed–they’re not impulsive buys. They’re much more considered purchases. 

Customers are considering these types of purchases from many different angles. It’s all about timing, budget, and specifications. They want to do their research and educate themselves on what is the right product for them. This means there are multiple touchpoints in their customer journey. As a home and garden retailer, you want to be there and deliver what they want at every moment. 

The customer could be looking on review sites, scrolling through social media, and then going in-store to see the product, before then going to your website (or a different order of those steps entirely). There are a lot of moving parts to these types of customer journeys and the time frame could take from just a few days to a few months. 

Of course, there are also the types of customers who need to purchase something quickly too. It’s varied depending on the customer, the purchase, and the cost of the product. 

Acquisition is key to the home and garden retailer

Acquisition is a key component of any home and garden retailer’s marketing strategy. Acquiring new customers is important as you don’t get the same type of retention in this space as you would in other sectors. You need to find new customer opportunities through your typical acquisition channels such as Paid Social, Paid Search, SEO and Email Marketing, but also Display and Video Ads, which tend to get overlooked by retailers in other industries. In the home and garden sector, those additional touchpoints are needed to meet the customer in their purchasing journey. 

Content marketing is king when it comes to home and garden, too. These types of buyers are looking to be educated, and need additional resources to make a decision. Take beds and mattresses as an example–a person might have a bad back and search for the right mattress to help, which means they’ll be doing research around their specific affliction and how your product may help them. For products people aren’t buying regularly, customers need more education, so they may go to Google and type “best beds for back pain”. You want to be discoverable at this point in the user journey helping them in their search.  

Where we see retailers doing well is when they provide additional value to their potential customers by offering them answers to their questions in the research phase of their customer journey. This helps you to build a relationship with the customer and keeps your brand in mind when they are ready to make a purchase. 

Nurture them with retargeting

Utilising customer data is another key to success for home and garden merchants. When a customer first visits your site, it’s more than likely they aren’t there to make a purchase right away. In fact, studies show that customers are over 70% through their decision making before they ever talk to a sales rep. So how do you cultivate that portion of their journey before they even speak with you?  Whether they subscribe to emails and updates, or they’re taking actions on your site to look for certain products, use the data you have access to through your tech stack to retarget them with relevant ads. Nurture them by serving content or products that make sense based on their activity, and offer them a personalised experience in the hope of inspiring them to make a purchase and become loyal customers.  

Now they’re engaged, how do we convert?

When the customer is browsing your website, you want to give them the best experience possible to get them to stick around and convert. 

Your site search tool is a really important factor in this, especially if you have a lot of SKUs.  Not only does site search help the shopper who knows exactly what they want, find the specific product, it also is a great source of inspiration for a customer who doesn’t know what they want. Using popular search terms or native language functionality can convey what other people are searching for and help your potential customer know what to search for. If you use a modern site search in your tech stack, this can act as a virtual shop assistant helping a customer find what they are looking for on-site. Many brands also leverage an automated chat-bot on their sites to act as a search engine, support person, sales rep, and overall informational resource.

You can also use your site search to serve your content across the site. A regular site search would just show products in search results, instead, you can bring in content such as buying guides to help entice your users to stay on-site for longer. By highlighting and exposing your content in your site search, it provides more valuable information to your users, improves customer experience and increases loyalty. 

Wherever possible it is key to replicate the in-store experience, online. Provide a personalised experience by taking your customer’s data, whether that’s what they were searching for or product detail pages they were looking at, and sending a follow-up email if they left the site without making a purchase. In the email include relevant content and products to try and persuade them to return and purchase. 

By using data and insights you can really understand your customers and gain insight on what information to serve them to help nurture them through the funnel. 

Retention is difficult but worth it

When the customer lifecycle is long, asin the home and garden sector, retention can be tricky.  For example, experts say customers only need to replace their mattress every 8 years, and many consumers don’t even follow that recommendation. The question is do you invest time and money in a customer who might not need your product for a long time?

The answer should be yes, you should always engage with your customer as they may want to purchase another type of product from you, they may want the same product for a second home they own, or they could have friends and family who they’d like to recommend your brand to. There are plenty of opportunities with an effective retention strategy to continuously engage your customer base.

Keep your customers in the funnel and engaged by sending them personalised emails with products that align well with what they have already bought. You can use this as a tactic to cross-sell specific products in your line, keeping your customer retained and loyal. You should also play around with the frequency at which you send retention emails. Find the right balance for your customers so they don’t feel bombarded, but also are able to keep you top of mind. 

Referrals and recommendations are incredibly important in this industry. So, it is key to surprise and delight your customers post-purchase. 

Can you introduce a subscription model?

Are you selling products that require the customer to purchase regular refills (i.e. a replenishment style of product)? For example, coffee machines need regular coffee pods, or lighting items need bulbs. Offer the opportunity for customers to subscribe and save for these additional products. This not only retains the customer on a steady payment stream, but it also allows you to build a long-lasting relationship with the customer. 

Additionally, you can think of the rooms of the house of your customer. Where does your product offering fit in and how can you stand out from your competition? By offering the convenience of a subscription for your home and garden goods, you provide customers with the opportunity to regularly experience your products. And as friends and family visit the home, there is a secondary opportunity for your products to come up in conversation. 

Subscription management requires a level of logistics know-how in order to ensure your customers are receiving regular, flexible deliveries. Utilizing a subscription payments solution, like Recharge, automates much of the subscription process for you, which allows you to focus more on building strong relationships with your customers.   

In conclusion

These tactics are great opportunities to acquire, convert and retain customers in the home and garden sector. Keep in mind, these tips and tricks aren’t one size fits all. Utilize a combination of tactics to create a wonderful customer experience from start to finish. Find ways to surprise and delight your customers with each unboxing of a subscription with you. Continued focus on the customer experience not only creates loyal fans, but also provides you with the opportunity to gain referral customers. 

About Space 48

Space 48 is an award-winning eCommerce agency that works with global, forward-thinking retailers. It blends customer experience focused solutions with unbeatable ecommerce technology to amplify the revenue companies can generate online. Space 48 is trusted by various platforms including BigCommerce, Magento, Shopify, Shopware and more, to deliver exceptional eCommerce experiences for consumers.

During its 13-year history, it has provided a full range of eCommerce consulting services with a focus on designing solutions to improve end-customer experiences and drive online sales. This includes eCommerce design experience, engineering, platform improvements, growth marketing and eCommerce consultancy. Having a long track record as an independent advisor across leading eCommerce platforms including BigCommerce, Magento and Shopify, Space 48 offers a differentiated proposition in the market due to the breadth of its eCommerce platform relationships. It has created beautifully designed and high performing ecommerce stores for Ordnance Survey, Charlotte Tilbury, Richer Sounds, Missguided and more. Covering a range of industries but having a specialist expertise in home & garden, health & fitness, gifting & luxury, and fashion & jewellery. Visit: www.space48.com

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The reason for this is that each–and the combination of the two–has proven to be incredibly effective at increasing awareness, traffic, leads and sales for merchants.

As a result, Statista data shows that the global influencer market size is expected to reach $13.8 billion in 2021.

However, despite the wild popularity of social media and influencer marketing campaigns, there are still considerable drawbacks to the practice that merchants must be aware of before launching such an initiative.

That said, let’s take a look at the risks and rewards that retailers should expect from influencer marketing campaigns.

Social media and influencer marketing: the pros

For those who are unaware, influencer marketing is a promotional strategy wherein businesses partner with influential industry voices to amplify their company, products or services and promote these things to a relevant audience.

While influencer marketing is often combined with social media marketing to reach prospective buyers, on its own, social media marketing is merely the use of social networks to market a brand’s products or services.

As it stands, there are a panoply of benefits to be reaped from combining influencer-led and social media marketing efforts.

Some of the most notable of the bunch include:

Instant trust and credibility

Building trust with consumers is one of the most challenging tasks a brand faces in today’s increasingly skeptical consumer landscape.

However, by partnering with industry influencers, retailers can instantly earn credibility with audiences as online personalities promoting a product or service shows consumers that the brand and its products are worthwhile. This is especially important for direct-to-consumer (DTC) brands with which buyers may not be familiar.

Moreover, consumers want to see products being used in the wild, thereby providing them an authentic feel for the item. Influencers not only fulfill this desire with their content, but they also link the product to their integrity and personal flair in the minds of potential buyers.

That said, for sellers to reap this benefit, it is critical to find the right influencers for the brand.

Broadens the company’s reach

Social media eCommerce marketing strategies, particularly when paired with influencer marketing tactics,  provides retailers with unparalleled reach. Through this combination of tactics, retailers can reach anywhere from tens of thousands to millions of potential customers.

However, the extent of the campaign’s reach will largely depend on the kind of influencers whom sellers opt to leverage and the size of their audiences. While some brands will contract social superstars for their campaigns, others find micro-influencers to be more effective.

Increased sales

There is little doubt that the combination of social media and influencer marketing is highly effective at driving sales. If this methodology did not work, marketers would have abandoned it by now.

However, as influencer marketing statistics show:

“Slightly more women (89 percent) than men (83 percent) in the United States carry out purchases after getting inspired by influencers.”

Drilling down more deeply to understand the ROI of such campaigns, a 2019 influencer marketing benchmark report showed an average value of $5.20 for each $1 spent on influencer marketing.

Reduced sales cycles

Again, the most challenging part about increasing conversion rates is gaining a customer’s trust.

However, through the use of influencer marketing, social media personalities lend brands their credibility, as discussed earlier.

As a result of this dynamic, many of their followers will make a purchase much faster than if they were to discover the brand organically, thus reducing the sales cycle considerably.

While this is all excellent news for those who are interested in utilizing influencer marketing, there are some drawbacks to be considered and explored as well.

Social media and influencer marketing: the cons

The fact is that merchants must be cautious when launching influencer marketing campaigns, as they could run into the following pitfalls:

Damage to a brand’s reputation

Part of what makes influencers, well, influential, is their genuine and authentic nature. If consumers find out that social media personalities are untrustworthy, that person’s career is likely over.

Therefore, it is imperative for sellers to consider what would happen to their brand reputation and sales volume if an influencer reviewed their product and cast it in a negative light.

Similarly, if a company is not pleased with an influencer’s performance, it could lead to some high–and highly public–tensions, as was seen in the Faith Ordway and Purely White debacle, which resulted in the brand being boycotted.

Therefore, when partnering with influencers, it is critical to:

• Ensure products are of the highest quality
• Partner with relevant influencers who have a good track record of working with businesses

Partnering with the wrong influencers

Almost as bad as having a company’s reputation destroyed by an influencer is contracting with the wrong influencers.

If a brand fails to do their due diligence and partners with social celebrities who should not have anything to do with their company or are just a poor match, it could end up annoying the brand’s current and potential customers, as well as the influencer’s followers.

In this scenario, all parties lose.

Similarly, some influencers have shown little interest in holding up their end of the bargain with brands. For instance, there have been a slew of instances where influencers put in the absolute bare minimum effort to promote a product (thereby producing dismal results) but still expect full compensation.

Therefore, it is essential for sellers to do a couple of things before signing on the dotted line, including: 

• Take the time necessary to seek out and form relationships with the right social media influencers.
• Ensure that campaign expectations and demands are clearly outlined in the marketing contract

(Potentially) high costs

Some of the most popular influencers on social media command tens to hundreds of thousands of dollars per post.

Truthfully, most brands cannot pay those kinds of prices, so they seek lower-tier influencers. However, when looking at average influencer rates, even the mid-tier individuals can cost thousands per post.

For instance, when looking at Instagram influencer costs, Instagrammer Matt Crump (who boasts upwards of 250,000 followers) shared his own rates chart which shows that those with 50,000 – 250,000 followers could garner anywhere between $1,500 and $6,000 per post.

It is, in part, for this reason why many sellers instead opt to partner with a team of micro-influencers to produce content instead of one or two of their more sizable counterparts.

As a means of avoiding all of these potential influencer marketing pitfalls, it is wise for brands to partner with an eCommerce social media marketing agency that can navigate these problem areas and help to produce a profitable campaign.

Through partnering with an agency that can seek out micro-influencers for a campaign, retailers can mitigate most (if not all) of the potential downfalls listed in this piece.

Is social media and influencer marketing worth it?

When contemplating if it is worth it for a brand to get into influencer marketing, the answer is yes.

However, that does come with a caveat.

If merchants are serious about leveraging social media and influencer marketing as a means of increasing value and customer engagement, it is critical to conduct a deep level of research to find the right influencers for their brand. This does not just mean those who align with the company and speak to the brand’s target audience, but also the size influencer appropriate for the campaign’s goals.

Achieve these aims, and the pairing of social media and influencer marketing could be a hit for your company.

Remember, it’s about delivering the right messages to the places your customers are. Omnichannel marketing, with segmentation at its heart, is your opportunity for improving the customer journey.  

—–

GUEST AUTHOR:

Ronald Dod is the former Chief Marketing Officer and Co-founder of Visiture, an end-to-end ecommerce marketing agency focused on helping online merchants acquire more customers through the use of search engines, social media platforms, marketplaces, and their online storefronts. His passion is helping leading brands use data to make more effective decisions in order to drive new traffic and conversions.

The post The pros and cons of social media and influencer marketing campaigns appeared first on Recharge.

Small- to mid-size merchants must stand out among the crowded ecommerce landscape—and gain a customer who will become a repeat buyer—to survive. Relevant and consistent communication occupies a prime spot in this customer acquisition and retention cog. 

Because there are so many mediums and devices for consuming information, you’ve got to spread around your messaging and meet customers where they’re congregating. 

The numbers plead a convincing case. Consumers have a 287% higher purchase rate when retailers used at least three marketing channels, as opposed to a single-channel campaign. 

We’re not recommending a multichannel approach where you blast the same message using email, text, and push notifications without regard to the person on the other end. 

Instead, we advocate omnichannel marketing whereby channels are interconnected. 

When a customer responds to a particular message emitted by one channel, it alerts the control board to update the data for all. This way, you’re not texting the customer about a sale they already jumped on after seeing it in a previously sent email.  

At its finest, omnichannel marketing operates on the premise that data is key to crafting and sending the right message. 

Omnichannel Starts with Segmentation

Curating data in ecommerce marketing revolves around slicing and dicing your subscriber list. Don’t leave your contacts lumped together and call it a day. Group them into segments that make sense for your business. 

The number of labels attached to one subscriber is yours to determine. Consider all potential filters for shopping behaviors (Did they make a purchase from a certain product group? Have they not bought anything in the last 6 months?) and interactions with marketing campaigns (Did they open the last email?). The possibilities expand with demographics, such as gender, age, and place of residence.    

Assigning customers to all applicable segments draws your arrow closer to the bullseye. With a few clicks, you can narrow in on your target audience and devise the right promotion. 

Omnisend research supports the push for segmentation. In comparison to campaigns that did not use targeting, segmented campaigns earn: 

• 62% higher conversions 
• 52% more click-through rates
• 110% more opens

The benefits of segmenting customers stretch beyond sales and engagement figures. It helps your company focus, and you’re afforded greater visibility into what messages resonate and which need tweaking. 

Go Where the Customers Are

Your website is your storefront to the world, and your job is to drive as much traffic to it as possible. Qualified traffic, to be specific. 

With segmentation at the foundation, we’ll focus on two channels: email marketing complemented by text messages, known as SMS in marketing lingo. 

First, the stats. Despite social media’s proliferation, email remains an extremely effective channel. Email-driven sales consistently grew each month of 2020 and skyrocketed in the second half. 

Automated messages experienced a breakout year. Conversion rates came in at 29.8%, a year-over-year lift of 95%.

Mix in SMS and it gets better. Campaigns that include texts at some point are 47.7% more likely to end in conversion.

Ideas for Email-SMS Combos

Let’s take a look at two popular automation messages and how you can make the omnichannel approach work for you. 

The Welcome Message

A welcome email upon signup is universally expected. But why not start your “hello” with an SMS that directs the customer to their email for a special offer?

Or, a more sophisticated multi-message welcome campaign might look like this:   

1. First welcome email: an incentive, relevant hero image, and product recommendations 
2. Second email: user-generated reviews based on category of interest, returns information, and incentive reminder with expanded product recommendations
3. Third email: brand storytelling, best-seller product recommendations, incentive reminder, customer service contact info, sizing guide, and prominent links to social media sites 
4. SMS message: reminder that the welcome offer is about to expire

In the example above, all messages numbered two through four are only deployed if the prior message does not result in a purchase. 

Cart Abandonment 

Just like welcome messages, you might choose simplicity with a one-two, email-SMS punch when steering consumers back to the shopping carts they abandoned.  

If you go the advanced route, maybe you offer an incentive to those with carts totaling at least $150 in merchandise, with the rest receiving a standard message. You could set up your workflow like so: 

Enhance the Path for Your Customers

Welcome and cart abandonment messages are just two examples of how you can make multiple channels work with each other for greater impact. Think of all the different automations you can experiment with—birthday messages, browse abandonment, lapsed-purchaser, and more.   

Remember, it’s about delivering the right messages to the places your customers are. Omnichannel marketing, with segmentation at its heart, is your opportunity for improving the customer journey.  

—–

GUEST AUTHOR:

Tracy Puckett is a rockstar Content Marketing Manager for Omnisend, an email and SMS marketing automation platform trusted by over 50,000 ecommerce brands. Tracy is a content creator who believes in the immense power of the written word. Free time is for family, exploring community gems and reading.

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