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Ads and discounts are unsustainable—build pre-purchase engagement instead

This is a guest post from Alex McEachern, a rewards program expert formerly with Smile and now consulting though Spark Retention.

Your marketing budget almost certainly includes money for social ads. Whether you want to expand your reach or, because of the rising cost of those ads, merely keep your reach the same, your store will likely be part of the $84 billion expected to be spent on social media ads this year. And while social ads are a way to grow your customer base, they can be an expensive gamble—and one you don’t need to keep taking.

There is a cheaper and more sustainable way to grow your eCommerce business than advertising. It’s going to take some work, a concerted effort, and strategy—but it will pay off in the end. 

By combining valuable, interesting content with a strong email newsletter, you can reduce your cost per acquisition, eliminate or drastically reduce your ad spend, and potentially even cut out the discounting that eats into your margins.

In this article, we’ll take a look at the flaws in the current, traditional acquisition and conversion methods and examine how content-driven emails can help you grow more effectively.

The current acquisition and conversion playbook

There are plenty of articles out there about 15-year-old kids, stay-at-home parents, and former corporate 9-to-5ers creating six-figure businesses by tapping into social ads. And that may have been super successful as recently as 2016, but it just doesn’t fly anymore. Here’s why.

Customer acquisition through ads is expensive 

The widely-recognized route to acquire customers today is to build a targeted audience and start putting money into paid ads on Facebook and Instagram. 

While this is a popular way to drive traffic, it is also incredibly, and increasingly, expensive. The average cost per social ad click is climbing. A click that cost you $0.27 in 2016 went up sevenfold in the span of three years, hitting $1.87 in 2019. The worst part is that this price is just for the click—it is not even taking into account the total cost per acquisition.

If a business relies on paid channels for growth (especially social), they will continue to spend more and get less every year. That’s because ads are not a growth strategy—they are merely a way to seed traffic that is then funneled into some form of lead capture, often an email form that promises a discount in exchange for that email.

An email list built solely on offering a discount is fragile

If the expensive nature of paid social traffic doesn’t concern you, the use of discounts to incentivize a purchase or acquire an email should. 

When you acquire emails by offering discounts, the customer is starting their relationship with your brand with an expectation that they’ll receive a similar discount in the future. They become conditioned to expect a discount, and to never buy without one, creating the death spiral of discounting.

The death spiral of discounting.
Via: Smile.io.

If you find you only have success marketing to your email lists when you offer a discount or promotion, that reliance on discounting makes it very hard to balance out your customer acquisition cost to customer lifetime value ratio and ultimately succeed long term.  

The ideal solution, then, is to find a way to get customers to buy without funneling money into social ads or by offering increasingly expensive discounts.

How to build pre-purchase engagement

Brands need to build pre-purchase engagement, not just traffic through ads. 

Think about the last thing you bought. Did you go through a process like the one I described above: One where you clicked an ad, entered your email, and came back later to make a purchase? Chances are you did not.

If I were to guess how you made a recent purchase, it most likely included one or all of these things:

  • You Googled a problem you were having, or a general description of a product you wanted
  • You did some research by reading blogs, listening to podcasts, or watching videos 
  • You checked reviews 
  • You asked your friends and family for recommendations
  • When you found a brand, you explored their social channels 

Was I close? Information is so readily available to us that we don’t need or want a brand to tell us anything. We want to come to our own decisions, not be sold to. In other words, we don’t trust what brands tell us anymore.

Via Nielsen. (PDF)

According to Nielsen, consumers trust most the opinions of those they know (and real people online). They generally trust brand websites, but have very little trust for paid forms of online advertising.

Today, brands are succeeding by transitioning from marketing that just looks to sell and focusing on value-add marketing

Constant engagement with content

Content is powerful, so why don’t more eCommerce brands lean on it? The number one reason I hear is that it’s time consuming to create. While it’s true that creating content is more time consuming than creating copy for an ad, the short- and long-term benefits will make up for the time you spend putting it together. 

I like to think of ads as a way to hunt for customers and content as a way to farm for customers. To hunt, you need to be out there actively looking for food—there’s little time investment up front, but you’re only getting the benefits when you’re actively engaging in the hunt. With farming, there’s cost and effort up front to plant the seeds and take care of the crops—but the food grows even when you’re not actively farming. 

Before a purchase, between purchases, or after a purchase, content gives you a constant touchpoint. It allows you to stay connected with your customers in a value additive way that does not require a sale. The best part is, it really only costs you your time. 

BluMaan's content.

I have been following Joe at BluMaan for years and the constant flow of quality content keeps his brand top-of-mind. He also does a fantastic job of introducing the products in organic ways into the content. It never feels like a sales pitch, but more of an extension of his expertise. 

The products are naturally added into videos that teach you how to build celebrity hairstyles. Blog posts include links to purchase shampoos that include the ingredients whose health benefits they were just discussing. When a brand creates high-quality content then weaves in direct marketing and advertising as a secondary consideration, it feels less like a sales pitch to the shopper and more like a natural extension of the content itself.

Combine content with email

When you encourage people to join your email list for content consumption (as opposed to just for discounts or sales promotions), you truly create an engagement machine. If you can get a person to subscribe to your list, you are able to get content in front of them as soon as it is produced. This allows you to push your content to the customer rather than waiting for them to discover it on their own.

If you are placing product offers in the engaging content you’re creating, it will lead to potential sales opportunities. Plus, building a list of people who are consuming content can turn them into a rabid fanbase that you can also use to leverage special offers (assuming they are actually special) like new product releases and VIP events. 

Here’s an example from Bloch Shoes. They use content to perfectly target their market (people interested in ballet shoes) with an email featuring interview snippets from a famous ballerina. Then, within that content, they organically weave in product recommendations and calls-to-action to purchase.

Bloch Shoes ad.
Via: Milled.

While many eCommerce brands are leveraging automations like abandoned cart recovery emails and post purchase follow ups, supplementing with a weekly newsletter is a fantastic way to differentiate your brand, cultivate your customer relationships, and truly maximize the engagement of your content. 

Getting subscribers without social ads

One of the big uses for social ads is acquiring subscribers but, as we said earlier, that strategy is expensive and even potentially unsustainable. 

There are hundreds of brands out there that are building subscriberships with consistent content production, an understanding of SEO, and utilizing their personal network and social media. Think about a blog you love, or YouTube personality you follow, did you end up subscribing because of an ad? My guess is no. 

  1. Sit down with the people who love you, ask them what they love, and start producing more content like that. They’ll tell their friends, other like-minded fans will find you, and, over time, you’ll grow a targeted, passionate fanbase.
  2. Look at what search terms are popular in your target market and start to produce content for your website about those. Then make sure to promote your email list with that content.
  3. Develop a regular cadence for your content, so people will want subscribe to your list to make sure they don’t miss out on anything you publish.

It is possible to build your subscriber list without online ads—if you are truly building something that is value add to a niche group of customers.

Key takeaways

A strong content and email combination gives you a powerful way to both drive sales and maintain ongoing customer engagement. When done properly, it creates a much more cost effective way to generate traffic and convert it to a sale than the more traditional and popular methods like ads and discounts. 

When you build your traffic with paid ads, it only gets more expensive and less effective over time. When you build an email list that is only looking for a discount you create the death spiral of discounting.

Instead, consider making the investment in high-quality, value-adding content, then promoting that content with your email list through a weekly newsletter. Over time, you can reduce your acquisition costs, remove your dependency on discounting, and grow sustainably from your existing customer base with this form of retention marketing.

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