Digitally native direct-to-consumer brands are spending thousands of dollars to drive traffic and interest to their brand through Facebook, TikTok and paid influencer partnerships. The social channels and the sites that they are often driving the traffic back to feature perfect photography and carefully crafted graphics.
The common line of thinking is that this is simply the cost of doing business in today’s world, as these “socially born brands” are facing stiff competition and are doing anything that they can do stand out. But is this the right approach?
Most brands have dreams of going viral through an influencer, but the truth is, virality rarely ever happens and brands are left pouring thousands of dollars into TikTok and Facebook just to stay afloat.
The overlooked part of this cycle is that 98% of new site visitors do not purchase from a brand on their first visit. And while these social commerce brands may be spending thousands of dollars on advertising and building out a visually perfect social strategy, promotions and website, they are not setting themselves up for long-term success.
While brands are obsessing over the photography of their goods, they are not thinking about some of the most important aspects of an ecommerce business, such as:
- How are we going to capture contact information of visitors who are interested in the brand but don’t purchase right away?
- How are we going to turn a one-time purchaser into a repeat customer?
Although this may seem overwhelming, getting access to the right tools, can let a brand easily set up the tooling to create a cross-channel strategy that aligns their social product offerings to promotions on adjacent social sites — via email, chat and text, and even through direct mail.
These promotions can include:
- Setting up a Welcome Series to educate a new subscriber and sell them on products through a nurture series
- Segmenting customers who have engaged with the brand but never made a purchase, then sending them personalized campaigns.
- Setting up an automation to engage with users who have started a check-out process but not completed the check-out, to try to capture a lost sale
- Encouraging a customer who has purchased to buy from you again by promoting a complementary product to the one that they purchased
According to a recent survey, 44% of business owners have a greater focus acquiring new customers, while only 18% have a greater focus on retention. Acquiring a new customer costs 5X more than retaining an existing customer, while increasing retention by 5% can increase profits anywhere from between 25% – 95%. So while the focus may be on the shiny new object, the backbone of your business should be built from what you already have; your existing customers.
You may be asking yourself, why don’t all of these brands have better tooling in place to be able to do this today? Some common reasons are:
- Lack of awareness. Many social influencers project an image of entrepreneurial success that comes easy. They make it seem like you can simply post a product via social commerce and have instant sales. Often social merchants find out after they have gotten started that a full marketing strategy both on the social site and via other communication channels like email, online chat, and text are critical for sustainable success.
- Cost. Even though the brands have money to spend on advertising, spending on software is not flashy or seen as a necessary item. However, the right marketing software is significantly cheaper than the cost of advertising and can have a greater impact on your overall business.
- Worries over technology limitations. Brands are overwhelmed at the thought of how to create a cross-channel strategy and begin to implement software because of the number of technologies that they use and the perceived difficulty to connect everything together. The right software can connect all of your points across your customer journey and make it easy for you to orchestrate your marketing in a few short clicks.
- Access to the right tools. Brands may believe that setting up an abandoned cart flow or welcome series requires coding and it will take a long time creatively to be able to put the cross-channel communications together. Most solutions offer plug-and-play features that you can implement in minutes.
With the proper tools in place, any size company can realize growth. Take it from Brett Nobles of Your Income Space who says that “we’ve been able to get this many subscribers, to grow our business to seven figures, with just the two of us, with no tech team. To have an automation platform that allows us to reach so many people at once, with setting up just a few rules, it really wouldn’t be possible to do this with just the two of us.”
Acquiring new customers is important for any business. But, according to Gartner, 80% of your future profits will come from 20% of your customers. So if you are not tapping into your existing customer and subscriber base to drive repeat purchases, you will be putting a strain on the rest of your business.