Repeat customers make up the majority of sales for many businesses, sometimes as much as 80%, yet repeat customers tend to be overlooked when it comes to social media advertising. Not only are repeat customers cheaper to serve than new customers, advertising to them is also cheaper and more effective. So how can you more effectively retain customers through social advertising?
There are two basic ways – growing your social communities so that you can send promotional updates to customers (and their friends) on an ongoing basis and using highly targeted ads to entice them to make repeat purchases.
Facebook is at its heart a retention and a loyalty platform—not an acquisition tool. Earlier this year, Forrester Research studied four major brands on Facebook and found that fans of Best Buy were twice as likely to purchase or recommend one of their products as non-fans. They also found that the average Facebook fan spent $368 at Best Buy in the year before the survey, and the average non-fan spent $150.
Tapping into your existing customer base is likely the easiest way to get fans onto your Facebook page and Facebook recently made some changes to their ad platform that makes it much easier to transform customers into Facebook fans. With Facebook’s Custom Audience ads you can upload lists of customer email addresses or phone numbers and use them target existing customers with ads that drive people to like your page.
SocialCode, the Washington Post’s ad arm, recently reported that one Custom Audience campaign delivered a 15 percent lower cost per fan rate than standard Facebook ads while another received two times as many viral engagements such as likes, shares and comments. Another ecommerce company, OpenSky, was able to get a 30 percent better conversion rate on its Facebook ads by targeting them through Custom Audiences.
Once you’ve got a customer in your social community it’s important to provide value and to avoid over posting. Along with providing great customer service and valuable information about your products, now you can also post in-store and online discounts or “Offers” on your Facebook page in order to entice your fans to buy.
With Custom Audience ads you also have the ability to advertise products or services similar to what the customer has already purchased. By segmenting your email lists based on what the customer purchased, or overlaying some of Facebook’s other targeting mechanisms, you can create more customized ads that are highly effective.
Another option is Facebook Exchange, or FBX ads. This ad format targets people based on the sites they’ve visited. For instance, if a customer came to your site and purchased a new computer you could target them with ads for accessories. According to Zach Coelius, CEO of Triggit, “advertisers are seeing two-to-four times better post-click conversion rates [than other exchanges], and they’re seeing six times lower [cost-per-acquisition rates]”. FBX ads tend to be more expensive than Custom Audience ads and many vendors have a minimum spend, but they’ve been highly effective in driving repeat customers.
While we’re still waiting for more results from both of these new ad formats, initial data shows that targeting existing customers with social advertising can be an efficient and effective strategy for driving sales. When creating a social advertising strategy, we highly recommend testing these two option to see if they can have an impact on your business. [24×7]