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Primer of various online marketing and customer acquisitions strategies such as Search Engine Marketing (SEM), Affiliate Marketing, Lead Acquisition, Email Marketing, Retargeting, Social, Search Engine Optimisation (SEO), PR & Bloggers. Presented to London Business School MBA students on November 20th.
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ONLINE CUSTOMER ACQUISITION STRATEGIESPRIMER (FOR STARTUPS)
London Business SchoolNovember 2013
Kiyan Foroughi – CEO, Boticca
AGENDA
• Boticca Overview• A Few Basics• Paid Channels
– Search Engine Marketing (SEM)– Affiliate Marketing– Lead Acquisition & Email Marketing– Retargeting– Social
• “Free” Channels– Search Engine Optimization (SEO) & Content Marketing– PR & Bloggers
• Other Things to Consider & Some More Tips
We won’t cover TV, Media and print/outdoor advertising as this primer is mostly for start-ups with more modest budgets.
#BoticcaLBS 2
BOTICCA OVERVIEW
Boticca is the world’s luxury bazaar of fashion accessories
350+ brands in 40+ countries and 11,000+ pieces available
Pieces shipped to 90+ countries each month
500,000+ members with an average order value of US$185
Staff of 20 based in London
Backed by MMC Ventures, ISAI, Digital Garage and angel investors
3#BoticcaLBS
A FEW BASICS
Most online businesses live and die by their online customer acquisition strategies
You’ll need a formulaic, scalable acquisition strategy to be successful
Each business is different and so will your online acquisition mix
In the end, everything is governed by one relationship:
Cost Per Acquisition (CPA) versus Customer Lifetime Value (CLTV)
And the equation needs to look like this for a real, sustainable business:
CPA < CLTVYour customer acquisition strategy/mix will also depend on your unit economics such as Average Order Value (AOV) and margins
4#BoticcaLBS
PAID CHANNELS: SEARCH ENGINE MARKETING (SEM)
What is it?– Google Adwords– Display Advertising– Video/Youtube Ads
What you need to measure– CPCs, CTRs, Impressions, CPLs
Pros– It’s immediate!– Fastest way to scale– Very measureable
Cons– Dependency on Google– Can become very expensive– Large budgets required
Who does it work for– Businesses who sell brand name or
commoditised products– Businesses with high AOVs and
margins5#BoticcaLBS
Mistakes we made:– Burned through lots of budget before
realizing it wasn’t for us– Too much Adwords optimization, not
enough onsite
TEST BUDGET: > £10,000 Per Month
PAID CHANNELS: AFFILIATE MARKETING
What is it?– Performance-based marketing that
rewards partner sites (affiliates) for referring traffic and customers
What you need to measure– CPCs, CTRs, Impressions, CPLs
Pros– CPA-effective– Very measureable
Cons– Affiliate recruitment time/resource
intensive– Takes a while to scale– Limits to how much it can be scaled– Technical integration
Who does it work for– Businesses who can offer some
margin to partners6#BoticcaLBS
Mistakes we made:– Underestimated how time consuming this
channel can be– Didn’t put enough budget aside to book
and schedule tenancies to push top affiliates
TEST BUDGET: > £3,000 Per Month
PAID CHANNELS: LEAD & EMAIL MARKETING
What is it?– Acquisition of leads
(subscribers/emails) and activation via regular email marketing
What you need to measure– CPLs, Activation Rates
Pros– Ability to segment and send
personalized messages directly– Ability to retain customers– Ability to A/B test
Cons– Results are not immediate– Deliverability and renderability are key
to success
Who does it work for– Most online businesses that offer
constantly new products or services (not so effective with content-led businesses)
7#BoticcaLBS
Mistakes we made:– Drew conclusions from database sizes that
were too small (less than 50,000)– Got some emails from competitions (lower
quality)
TEST BUDGET: > £5,000 Per Month (£1-3 per email)
PAID CHANNELS: RETARGETING
What is it?– Targeting users off-site when prior
visits didn’t result in a conversion to bring them back on-site
What you need to measure– CPCs, CTRs
Pros– When optimised, is usually quite a
CPA-effective channel– Can be personalised (should be)
Cons– Need traffic volume– Technical integration– When done poorly, it can look like
stalking
Who does it work for– Most online businesses that where
the ultimate call to action is a sale or conversion
8#BoticcaLBS
Mistake we made:– Used bigger retargeting specialists
like Criteo who offer no customization of banners (looked ugly)
TEST BUDGET: > £2,000 Per Month
PAID CHANNELS: SOCIAL (FOR START-UPS, IT’S NOT FREE)
What is it?– Advertising and performance-based
marketing on social media platforms such as Facebook, Twitter etc.
What you need to measure– Member base and referral traffic– CPLs, CTRs
Pros– Deep segmentation capabilities– Direct engagement with your users– SEO benefits as social signals are
factored into Google’s algorithms
Cons– Generally an expensive and low
conversion channel with poor ROI channel
Who does it work for– Content-heavy websites– Nobody in ecommerce for driving sales
on a CPA-basis (as far as I know!)
9#BoticcaLBS
Mistakes we made:– Thought we could use social media to
drive sales! – Spent time on networks which were
popular but didn’t have our customer demographics
TEST BUDGET: > £1,000 Per Month
“FREE” CHANNELS: SEO & CONTENT MARKETING
What is it?– Raising the visibility of your website to
appear in natural search rankings of Google… I mean, search engines
What you need to measure– Natural search traffic and conversion– Individual keyword rankings– Site performance/speed– Domain authority and backlinks quality
Pros– Quality, targeted traffic– Content marketing can also help
PR/branding
Cons– To be done well, requires technical resource– Time-consuming– Good content marketing campaigns are hit
or miss– At the mercy of Google and their constantly
changing algorithms
Who does it work for– Pretty much everybody
10#BoticcaLBS
Mistakes we made:– Didn’t think it would take that long to scale– Didn’t put enough tech resource behind it– Releasing too many SEO-focused tech
changes at a time
“FREE” CHANNELS: PR & BLOGGERS
What is it?– Spreading the word about your
business via articles in the press (online/print) and via bloggers
What you need to measure– Publications and bloggers that
work/don’t work– Time/effort vs. returns
Pros– Elevates brand and trust which in turn
has a positive effect on the conversion rate of other channels
– High ROI
Cons– Not easily replicable (PR)– Hard to measure ROI (PR)
Who does it work for– Pretty much everybody but you
constantly need to have a story/hook with new information (with press)
11#BoticcaLBS
Mistakes we made:– Focused too much on business press as
opposed to consumer press early on– Overestimated how much you can scale
blogger marketing
TEST BUDGET: >£1,000 (for bloggers)
OTHER THINGS TO CONSIDER & SOME MORE TIPS
Don’t be afraid to test several channels and figure out what works for you
Don’t rely on one channel: have a mix
Data, data, data: Let the numbers be your guide
Depending on the channel mix, a good monthly test budget would be > £15,000-£20,000
Don’t forget to focus on the other fundamentals such as a strong, well-defined brand and a flawless customer experience
And never forget: CPA < CLTV
12#BoticcaLBS