Is Your Advertising Worth It?(How to Reduce the Average Cost of Acquiring Customers in a Hurry)
What is it costing you to make a sale?
It’s important to know the average cost of making a sale online. Assuming you want to run your business profitably you’ll include this in calculating your profit margins. If you have multiple products working out the average cost of making a sale can quickly become complicated.
For example, you may be using some products as ‘loss leaders’ to build brand awareness with your customers so that you can convert a percentage of those customers to your higher margin and more profitable products. In general, there are two big levers you can pull to make more sales. One is traffic and the other is conversion.
Traffic is a factor in the calculation of the average cost of acquiring customers because it takes time, money and effort to get it. You might spend time building up interesting content for your audience or simply paying for advertising with Google Adwords. The quality of this traffic is also very important because it will have an impact on your conversion rates. If your website is not very relevant to your customers your conversion rates will be low and your average customer acquisition cost will be high.
The importance of conversion rates
Before you send a lot of paid traffic to your website you had better first think about conversion rates. Without a good conversion rate on your website all the traffic in the world is not going to make much of a difference for your bottom line. There are many ways you can increase rates of conversion on your website and instead of discussing all of these options now we are going to focus on just one highly effective and under-utilised strategy. We have already mentioned that one way haven’t we? Getting better quality traffic.
What does better quality traffic really mean?
The quality of traffic to your website is broadly a function of how relevant your offer is to your audience. Every time someone visits your website it would be useful to understand their motivations, ability to benefit from your product and what prompted them to visit don’t you think? But surely that’s impossible right? It turns out there are many ways you can track both the source of your website traffic and how it converts into sales. For example, let’s pretend you are selling standing desks. If someone clicks on your Google Search ad and lands on your website you know that they are searching for standing desks. The words they typed into the search box and used to discover your ad will indicate their intentions. They are most likely in the market for a standing desk. Pretty obvious right? But they are not likely to make a purchase right away are they?
If they have just started researching and looking at options your website might the 5th website they have visited selling standing desks in the last 5 minutes. They are likely comparing models, features, prices and style. There is a very high likelihood that you will not convert this person to a sale on their first visit to your website. Which is a big problem for your sales conversions isn’t it? As soon as they navigate away from your website there is only a very small chance that they will return. In order to make a sale you need to show up multiple times. Using Google this might be through showing up in search results again and again. Each click likely increasing your average cost of acquiring each customer.
How to leverage the traffic you are already paying for?
Showing up like this to your potential customers is the basis of how Google has become a wildly successful company. And the cost of advertising with Google has increased continually because it does work and now most businesses have started employing this strategy. Google connects buyers with buying intent to merchants with the products they are searching for. Paid traffic through Google is much like being in the old yellow pages book. A way that you can stay in front of this higher quality audience is to use a pixel on your website.
Back to our example of the standing desk, when I was in the market for a standing desk I went to a few websites to check them out and then noticed that standing desks were showing up in advertisements all over the web. On news sites, blogs and in my Facebook feed. The way this is done is through the use of a pixel on your website.
How pixels can be used to create custom audiences
What’s happening here is that while I browsed standing desks on a website a pixel was placed on my browser. A pixel is a tiny piece of harmless code that sits in the memory of your web browser. It’s like how when you are walking through the entry turnstiles of a sporting event you are sometimes given a band around your wrist. This might allow you access to certain areas and to leave and re-enter at another time. The people at the door can see that you have already paid and let you in. The difference with a pixel is that you are recognised as a visitor to that standing desk website when you visit a different website such as Facebook.
One way you can get back in front of your website visitors is by using a Facebook pixel on your website. Every visitor to your website would be tagged by Facebook to create a custom audience and this will be remembered for 180 days for every single user. The power of this audience is obviously that they have already visited your website. You know they are interested in what you have on offer. Now you have a way to get back in front of these same people with an ad on Facebook’s platform for up to 180 days with related offers. And I’ve really only scratched the surface of what is possible with just Facebook’s pixel alone.
There are additional filters and triggers that you can set up with your Facebook pixel to further segment this audience. For instance, you might tag people who added a product to cart but did not complete the purchase. Then in your advertising copy you can directly address the question of having left something in their shopping cart and to prompt them to take the next step. There are numerous options available but the general idea is retarget ads to those people who were motivated enough to click on your Google ad. This can then increase your conversion rates and reduce your customer acquisition cost. Put simply...
Facebook pixels are worth the effort
Increasing the quality of traffic to your website is important for reducing your customer acquisition cost that will result from an increase in sales conversions. The main concept is to keep showing up in front of an audience who you know are already interested and aware of your brand. It’s a powerful strategy that many of your competitors are not yet using.
Leveraging your existing advertising campaigns on Google with Facebook custom audiences and retargeted ads starts by placing a pixel on your website. It will take some time to build up your custom audience and also depend on the volume of traffic your website is getting.
If you would like to know how you might be able to start building a custom Facebook audience using a pixel on your website schedule a free 30-minute call by clicking on the link below.