Paul Archer, CEO and co-founder of Duel
In at this time’s fast-paced and aggressive enterprise panorama, progress is a continuing pursuit for brands and retailers, however skyrocketing buyer acquisition costs are holding them again.
Many companies we now have spoken to discover that their acquisition costs are sometimes greater than their buyer lifetime worth. Research from ecommerce know-how firm SimplicityDX reveals that buyer acquisition costs have elevated by 222% within the final eight years alone.
Why is the price of acquisition so excessive?
Prior to Covid-19, nearly all of brands and retailers have been promoting throughout a variety of channels, each on and offline. However, when the pandemic hit, these companies have been restricted to on-line channels, which prompted many brands and retailers to reinvest all different advertising budgets into internet advertising.
This led to a short-term enhance in gross sales for many on-line retailers and brands – with little else to do throughout lockdown, many people did plenty of on-line buying. But as offline incumbents moved on-line, buyer acquisition costs dramatically elevated and promoting campaigns grew to become much less efficient.
The price of dwelling disaster and elevated rates of interest have drastically impacted shopper spending habits within the final 12 months. With acquisition costs on the rise and shopper spending down, it’s no shock that the majority of at this time’s direct-to-consumer brands are on the lookout for methods to reduce their acquisition costs and grow organically.
But how can they do that?
Focus on constructing a group
CRM software program firm HubSpot says 81% of customers belief suggestions from their mates and household earlier than making a purchase order.
The key to progress for brands and retailers, due to this fact, shall be to flip their personal group – of customers, workers, sponsored athletes, {industry} professionals and extra – into a military of supporters (we name them advocates), able to selling the enterprise to their personal networks.
The manner to do that is by creating bespoke referral applications, loyalty initiatives, and unique reward schemes to encourage the group of supporters to share their constructive model experiences with their household and mates.
Some of the world’s largest and most influential brands together with Lululemon, Patagonia, Rab, Charles & Keith and Monica Vinader have grown on this manner. They are all community-powered brands that don’t pump large sums into internet advertising to promote their merchandise, however as an alternative belief their customers to do it for them – and to nice impact.
Invest in user-generated content material
Consumers discover user-generated content material (UGC) 9.8 instances extra impactful than influencer content material, and 79% of customers say UGC extremely impacts their buying choice, analysis by social content material advertising platform Stackla reveals. That is as a result of no matter age, customers need to see what different individuals are saying a couple of model – not what a model is saying about itself – earlier than shopping for from it.
We are more and more on the lookout for actual content material, created by actual individuals, whom we can relate to and belief so as to make higher and extra knowledgeable shopping for selections. That might be from household, mates, communities we’re a part of, or genuine model advocates we observe on social media.
The finest manner for brands to benefit from UGC is to construct a loyal community of brand name followers and then make it straightforward for them and incentivise them to create and share content material with their personal followers. Companies corresponding to Charlotte Tilbury, Mint Velvet and Gymshark do that: they belief their customers to share their personal content material with their personal followers, and have all grown in consequence.
Redefine the influencer
Brands and retailers have traditionally received their influencer advertising technique mistaken as a result of they give attention to the mistaken influencers – corresponding to random celebrities who know nothing concerning the enterprise and would fortunately promote a competitor if the value is true.
However, the idea of influencer advertising is a superb one. As we all know, individuals purchase into individuals, and true influencer advertising is all about genuine storytelling for brands and retailers that need their message to not solely be heard, however trusted and actioned.
Brands and retailers want to redefine who their actual influencers are – and this begins nearer to residence, by figuring out superfans from inside their personal buyer base. These customers might not purchase essentially the most, however they’ve essentially the most affect as a result of they inform everybody they find out about their favoured brands. This makes them essentially the most highly effective engine of phrase of mouth and free buyer acquisition.
The future
To reduce acquisition costs and grow organically, brands and retailers want to flip their personal buyer base right into a gross sales channel. They can do that by specializing in rising a group of brand name followers who can promote the enterprise to their personal networks, with their personal content material.
For extra info on how to flip your customers into your largest gross sales channel, go to: duel.tech
https://www.drapersonline.com/perception/the-industry-view/how-brands-can-reduce-acquisition-costs-and-use-their-customers-to-grow
