Are You Spending A Lot On Ads But Not Reaching Your Sales Goals

Are You Spending A Lot On Ads But Not Reaching Your Sales Goals?

Every Shopify store owner knows how important customer acquisition is to increase sales revenue and run a profitable, successful company. This is why many store owners spend thousands of dollars per month on advertising. After all, how will potential customers know that they want to buy the products you are selling if they don’t know that your store exists, or where to find your store on the internet?

Visit the Shopify Community forums on Shopify’s website and type in something like ad spend, no sales and you will find comments from Shopify store owners from all over the world sharing their experiences with spending thousands and thousands of dollars, euros, or pounds on advertising, and selling very little or nothing at all!

Many are quick to look at the advertisements themselves as the problem, asking “perhaps the advertisements are not creative enough, or there aren’t enough photos,” etc.

However, the problem may actually be with the steps that come after customer acquisition. Once a customer has been acquired, you have to keep them interested and happy by asking if they need assistance through a popup or via email and social media (customer engagement).

Ultimately, if a customer does not have a pleasant experience with your store from the moment they first see an advertisement or go to your store until they reach checkout, they will not buy anything which obviously means they will not become a repeat customer either (customer experience).

Customer Engagement, Customer Experience, and the Three Types of Customers

Often because so much effort goes into advertising to bring people to the store, equally important steps to conversion are not given as much attention. Conversion rates can often be improved by focusing on customer engagement and customer experience.

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There are three types of customers:

  • fully engaged
  • indifferent
  • actively disengaged

For indifferent and actively disengaged customers, try engaging them with a web push notification based on their last interaction. It is easier and more cost effective to find ways to get customers to return to your store than it is to acquire new customers that have never been there.

push-notification-campaigns-customer-engage-1-1250x546

Thankfully, fully engaged customers are likely already loyal customers who may even recommend your store to their friends.

Offer a Loyalty Program to Customers

Gallup polling data shows that “a customer who is fully engaged represents an average 23% premium in terms of share of wallet, profitability, revenue, and relationship growth compared with the average customer.” Essentially, customers who are fully engaged with a brand are way more likely to purchase products and spend more money at your store.

How do you turn average customers into fully engaged customers? By offering incentives and loyalty programs!

Sephora's loyalty program

According to Bond Brand Loyalty, a global customer engagement agency, a growing number of consumers (increased from 30-37% between 2017 and 2018) are willing to pay a fee to access better loyalty program benefits.

In fact, a study by Consumer Intelligence Research Partners LLC, a consumer market research company, determined that:

  • Amazon Prime members spend an average of $1,400 per year on Amazon vs. $600 for non-Prime customers
  • On average, Prime members shop on Amazon 26 times per year vs. 14 times for non-Prime customers
  • Prime members spend $55 per visit and non-Prime customers spend an average of $42 per visit

The data clearly shows that offering loyalty programs, even ones that customers have to pay for, leads to better sales numbers for your e-commerce business. You can duplicate Amazon’s success with Prime by creating a loyalty program for your Shopify store!

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CX: The Key to Boosting Sales

According to a 2018 Return-On-Investment model built by the Temkin Group, a company with $1 Billion in annual revenues can gain $775 million in revenue over three years by making improvements to the customer experience. One of the best ways to improve customer experience is by creating personalized experiences.

Segment’s 2017 State of Personalization report found that 44% of consumers say that they will likely become repeat buyers after a personalized shopping experience with a certain company and 54% of consumers expect to receive a personalized discount within 24 hours of signing up for an account, submitting their email, or providing another way for a brand to identify them.

Loyalty Programs + Personalized Experiences = Fully Engaged Customers

The data taken from polls and studies clearly shows that if you offer loyalty programs, discounts, and personalized shopping experiences to your customers, more of them will become fully engaged customers who feel a connection to your brand.

Customers who have been rewarded for their loyalty will spend more money at your store, helping you to reach your sales goals for 2019 and beyond!

What is the one strategy that you have used to optimize your ad spend?

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This guest post was written by John Larsen. John is a Content Writer at Storetasker, the #1 place to outsource Shopify design, development, and marketing projects. You can read more of his work here.