Building and maintaining a list of potential customers is one of the most effective things a business can do to generate sales and improve profit margins especially when launching new products and services in a competitive marketplace.
To put it into perspective, if you are for example a new online retailer that is selling a new range of fashionable scarves there are many mediums for you to start marketing and selling your products. An online retailer can choose between search engine marketing with Google or Bing or direct advertising through social media channels such as Facebook. These online mediums offer the ability to go direct to your target market to generate interest to complement any SEO and in all likelihood and if done correctly with relevant ad copy should start seeing regular sales.
Many sales departments would ordinarily jump for joy if automated sales started occurring with the people at the top wondering why they hadn’t used this method before but before we get to excited lets actually break this down and see where the flaws are. Selling through Search engine marketing such as Google, Bing and social media such as Facebook can be expensive and kill your margins especially in a competitive marketplace. Just one solitary click on a search campaign can cost well in excess of $1 and with an average of 2% of visitors to an online store actually making a purchase this example would mean a $50 up front cost before a sale is made.
By no means does the above bleak example of search and social media marketing mean you have to ditch this method and go straight back to conventional methods of marketing but it does mean that you have to work smarter to turn the figures back in your favour.
It is reasonably obvious to assume that before embarking on any marketing campaign or for that matter any business you should always have calculated your profit margins I.e what do you need to sell to break even and how much of one sale is profit. If you are selling a big-ticket item like a fine swiss watch or large- scale electrical goods then if we use the example above $50 isn’t a great deal to spend to make a sale (certainly cheaper than employing staff on a shop floor). But if we use our original example of scarves and they are of a reasonably low value item then $50 clearly can’t make sense so how can we make use of this type of marketing to grow our business.
To take advantage of search and social marketing when selling low value and low profit margin items the key is to work smarter. One method would be to unleash the power of the up-sell. Think about the chocolate bar and magazine counter when you are going through the tills at the supermarket. Many e-commerce stores adopt up-selling by suggesting products that complement your existing choice. Another great method is to send email communication thanking them for their purchase but including a list of new products or items they just might like, in fact lets throw in a discount coupon to get them buying. These methods can work very well but again they can be short-lived hits hence our favourite method is to grow your list!
Rather than specifically directing your search and social marketing campaigns to entice a purchase why not try advertising a discount code or a free trial offer of your products or services. A simple “Register for a free 10% off discount code” “Code expires tomorrow” campaign could dramatically reduce your cost per click as your aren’t competing for the actual product in a competitive market plus it is a great call to action to increase your click through rate. However the main draw and more important than the other areas discussed is that you have managed to add a potential ‘opt in’ customer to your list so when you are promoting your new lines or an end of season sale you have another potential customer to market.
Facebook and other social media marketing works especially well with this method and you can hopefully build your targeted list in a much more cost- effective way than going for that one-off sale.
You will be surprised at how many new subscribers you obtain and equally surprised at how it is much easier to turn these prospects into long-term customers. This method is time and time again being used to get more ‘bang for your buck’ per marketing dollar spent thus increasing a businesses overall profit margin.
Ruth Mcilroy is a co-founder of the Insider Media Group. Insider Media are an Australian Web Design and Digital marketing Agency. Our team are experts in and specialise in using Shopify and Squarespace to create beautiful Online Stores, Websites and E-commerce solutions. For more information please visit.