As an e-commerce business owner, consider these two marketing approaches:
Scenario One: You have a product to promote and a customer base of 100,000. You decide to send a marketing campaign to everyone on the list. The outcome? 500 conversions, resulting in a 0.5% conversion rate.
Scenario Two: Again, you have a product and the same customer base of 100,000. This time, however, you analyze your list, identify 10,000 customers most likely to be interested in the product, and launch a targeted campaign to this refined group. The result? 450 conversions, but with a much improved 4.5% conversion rate.
While we all want to believe everyone on our list is a right fit for all the products we have to sell, that is not how to get the best out of e-commerce marketing.
At first glance, scenario one, which illustrated mass marketing, seemed like the best option because of a larger audience, and narrowing down seems like leaving money on the table. But on a closer look, that is far from true.
In the first scenario, the e-commerce business owner expended more resources, time, and effort to achieve the results. More importantly, the irrelevant content could lead to a high unsubscribe rate and negatively impact the customer experience.
But with scenario two, which illustrates targeted marketing, instead of bombarding all 100,000 customers with your offer, you target the customers with the highest propensity to buy with a better-targeted sales message.
As a result, you achieve a more effective e-commerce campaign with a significantly higher conversion rate and a vastly improved, personalized customer experience.
The takeaway? For optimal results, always aim to tailor your campaigns, targeting only the most fitting audiences for each product.
As you read on, you will learn the importance of targeted marketing in e-commerce and how to launch one.
Importance of Targeted Marketing in E-commerce
E-commerce is no longer a play of hit or miss. With AI-powered data analytics tools, you can segment your audience based on insights and get the best out of your marketing campaigns.
Such benefits of targeted marketing include:
1. Customer-product fit: Marketing the right product to the right audience is an important determinant in business outcomes.
Targeting your audience gives you a clearer understanding of your ideal customers and helps you optimize customer acquisition costs.
When you clearly understand who the right customers are, you can also optimize your sales message better and craft tailor-made offers.
2. Engagement boost and quality customer interaction: Not all products you sell resonate with every one of your customers. Directing your campaign to everyone on your list will turn off people who are not the right audience for that product. However, if you direct it to the right customer, it will boost engagement and build quality customer interaction.
3. Customer loyalty and repeat orders: With targeted marketing, you can write tailor-made offers for your customers. This makes your customers feel more valued than receiving messages not suited for them, thus increasing customer loyalty and reducing the churn rate.
According to a survey by Accenture, 91% of customers are more likely to shop with brands who recognize, remember and provide relevant offers and recommendations.
4. Increase in conversion rate: Through data-driven insights, you can obtain data on which customers on your list have the greatest propensity to buy your products based on past interactions.
Leveraging such data insights will help you target your audience better, get a higher conversion rate, and generate more revenue.
Boosting Your E-commerce Sales With Targeted Marketing Using MagicBean TargetScore
With technological advancement and the advent of AI-powered e-commerce analytics tools, e-commerce business owners can now make more informed business decisions. Sumit Shekhar, Head of E-commerce at Konga, also thinks likewise:
E-commerce is data-driven, and analyzing data and making informed decisions is crucial.
MagicBean TargetScore is an AI-powered tool designed to help e-commerce business owners gain valuable insights into the right audience for a specified product to boost their marketing conversion rate.
With TargetScore, you can launch as many product promotion campaigns as needed.
Suppose you want to launch a marketing campaign for 5 products, you can launch 5 different product promotion campaigns to get the best audiences for each of the 5 products.
Rather than directing the same sales messages to every single customer on your list, this will allow you craft personalized sales messages and optimize for sales.
With TargetScore, you can also estimate the conversion rate and potential revenue from your planned marketing campaign using the opportunity size feature.
Here is how:
1. Opportunity Size: Based on your customer's past interaction, Magicbean TargetScore estimates your conversion rate and potential revenue of your marketing campaign with your specified target audience.
This helps you make informed decisions on whether to launch the campaign. You can also adjust associated factors until you get your desired potential revenue estimate before launching.
The opportunity size feature also shows you the customers who are yet to buy a product you have launched. This allows you to follow up more effectively. According to statistics, a campaign with a follow-up message converts about 22% more prospects than one without any.
2. The key propensity to buy specified products: Based on the customer's past buying patterns, Magicbean TargetScore also shows you the key drivers of your customer's buying decisions and allows you to target sales-qualified leads for your campaign.
Examples of such key factors are:
Category and brand: This helps you determine which categories and brands make your customers buy as customers are biased with brands, and this influences their marketing decisions
Location: Location is another key driver of sales. With TargetScore, you can gain insights into which state will likely buy your specified product. Below is an image showing the conversion rate by state.
Number of orders: With TargetScore, you can check which customers made a certain amount of orders within a specified period. For example, you can check how many customers purchased more than five orders in the past month. The higher the number of orders, the higher the propensity for conversion.
Amount of orders: This allows you to check how much customers spend within a specified period. For example, you can check which customers spent above $1000 in the past month. The higher the number of orders, the higher propensity for that customer to convert.
3. Customers most likely to purchase a specified product: TargetScore gives you the list of customers likely to purchase your specified product, giving you a productive score for each. It also displays the total number of orders each has made so far and the number of days since the last order.
Below is an image with details of customers most likely to purchase a leather duffle bag.
With this insight, you can get valuable insights into the customers most likely to buy your specified product and leverage it to launch a targeted campaign and generate a high conversion rate.
Integrating Your Target Customers into Klaviyo for an Email marketing campaign
After getting insights on the list of customers with the highest propensity to buy the product you want to sell, TargetScore takes it a step further by allowing you to upload the list directly to Klaviyo to kickstart your targeted email marketing campaign.
The benefits of targeted marketing in e-commerce are worth their weight in gold. If you are yet to start implementing it, you are leaving money on the table and missing the opportunity to drive more revenue with less expenditure.
With Magicbean TargetScore, you can target the right customers with the right product, boosting your conversion rate and driving higher customer lifetime value.