A growing number of e-commerce entrepreneurs are reducing the amount of money they spend on Google Ads and focusing on Facebook instead. This is due largely to the cost of Google Ads, which has risen to $2.69, making it too expensive for smaller e-commerce companies. Many e-commerce marketers have started to increase their spend on Facebook ads.
The average ROI on Facebook Ads is estimated to be 450%. One of the main advantages of using Facebook Ads is that there is more room for creativity when choosing your target audience. This also helps to keep costs lower. However, there is also a downside to using Facebook Ads. It is harder for advertisers to control the quality of their leads.
Too many online businesses waste time and money on the wrong projects or try to reach customers who will never make a purchase. Founder and CEO of Clients On Demand, Russ Ruffino pointed out in his Q&A interview on Entrepreneur that many businesses spend too many resources on things that don’t contribute to their ROI. This is a lesson that e-commerce entrepreneurs using Facebook Ads need to keep in mind.
When you run ads on Google, you are reaching customers who are actively looking for products and services. If you target the right keywords, then you will achieve high conversion rates.
Facebook, on the other hand, is a form of interruption marketing. These people might not be thinking about making a purchase when you reach them initially. You are also targeting people at different stages of the buying process. Since most of them are not ready to make a purchase, you’ll need to collect their information and begin building a longer-term relationship before closing a sale. This can take a couple of months or more. Building a lead marketing strategy with Facebook is even more difficult for e-commerce brands than local businesses because they don’t have the opportunity to build physical relationships. E-commerce platform provider Shopify illustrates vividly this in their encyclopedia article: What Is The Difference Between E-Commerce And E-Business?
Signs that you need to increase lead quality
You need to generate quality leads to attract buyers through Facebook Ads. Here are some signs that you might need to improve your lead generation strategy.
Most of your customers only subscribe when you offer free stuff
One of my colleagues on the AffPlayBook forum shared some observations from their email marketing strategies. He was able to increase his opt-in rate by offering free incentives. The problem is that those subscribers failed to convert.
If you want to build a profitable Facebook funnel, then you need to attract customers who don’t mind paying for your services. You will need to tweak your ads and landing pages to attract paying customers.
Email engagement rates are poor
Many e-commerce marketers use Facebook to build an email list. There are several important benefits to this approach:
- Marketing automation tools can be used to segment email lists to deliver relevant offers to different customers.
- They can build relationships with customers at every stage of the buying process by maintaining longer-term relationships.
- A better rapport can be nurtured with brand followers, which helps to achieve the trust needed to convert leads.
You will need a great engagement strategy to convert your email subscribers to customers, supported by a careful monitoring of engagement metrics. Your opt-in rate, click-through rat, and open rate are all important metrics. If they are poor, then you clearly need to improve your funnel to attract higher quality leads.
One of the benefits of using Facebook Ads is that you’re able to build an email list that segments the users you’re targeting. This way, you will see which subscribers are most interested in your various offers.
Customers can be unclear about what they are looking for
When you begin engaging with new leads, you will need to ask them which offers they are looking for. Some customers already know what products they need. These people will usually be the easiest to convert.
On the other hand, certain leads won’t be able to communicate their needs as clearly as you’d like. They may not know that they have several options or might not be sure if they want to make a purchase at all.
It takes time to assess the quality of leads by monitoring your email engagement rates. However, you can gauge the level of interest by looking at the information they provide. If most of your leads lack information your product or service, then you will need to find a different promotional strategy.
Are you wasting time on the wrong leads?
Some leads are going to be more likely to convert than others. You will need to spend time and resources engaging with them before they convert. As an e-commerce business, you probably won’t need to spend as much time and money doing this as many other businesses might have to. However, you are still going to need to invest in those relationships. If you attracted leads that aren’t interested in your offers, then you’ll be wasting your resources. This is the reason lead scoring is so important. If you are investing resources on leads that don’t convert, then you probably need to improve your lead scoring model. Here are some ways you can do this.
Score leads individually, rather than as categories
When advertisers predict the ROI of their leads, they often look at the wrong factors, such as:
- The traffic source they are using, such as Facebook or Google.
- The ad copy they used to attract the leads.
- The targeting options used, such as Facebook demographics or keywords on Google ads.
Of course, there is a correlation between these factors and your conversion rates, but it’s important to not draw too many conclusions from them – you need to score each lead individually. This will give you the best indication of your future revenue.
Consider changes in the market
The market is constantly changing. You need to be aware of these changes and factor them into your lead scoring model. For example, British e-commerce companies that sell motorcycles typically failed to sell to buyers in other parts of the European Union. However, demand for motorcycles has increased since Brexit, which means they may begin to focus more on reaching these customers.
Look for indications that certain users are not interested in your offers
The devil is always in the details. When you look at new leads data, you are likely to see signs that certain of leads are never going to convert. They might leave most of the fields blank in your quote form, or their answers on the form may suggest that they know little about your products.
When you first create your marketing strategy, you might have a hard time knowing what to look for when scoring leads. It will take time to perfect your lead generation model, but if you persevere, you will get better at understanding them, and will know which leads to invest your resources in.
Base your lead scoring model on interest, rather than conversions
When looking at your initial lead data, you are probably going to find that users who provide a certain type of information typically do not become paying customers at later stages in the funnel. You might think you should avoid focusing on these leads, but keep in mind that they might prove to be lucrative for your business if you apply a different marketing strategy when dealing with them.
Instead of looking at the conversion rate of different types of leads, focus on the level of interest expressed by these leads. If certain subscribers suggest that they are highly interested, but have a low conversion rate, then you should consider customizing your funnel around them. You might be surprised by the increase in sales generated by those leads.
Use income as a variable in your lead scoring system
Facebook allows you to target users based on their income. Using this targeting option can significantly increase your conversion rate and ROI. However, you are going to need to avoid making any major assumptions when scoring them.
It is important to remember that customers with more income are not necessarily going to be more valuable. It really depends on the nature of your offer. E-commerce brands that sell discount offers may find that they generate the most money from customers making between $12,000 and $32,000 a year. They might want to avoid focusing on people with higher incomes.
Give more weight to customers who start out making small purchases
Did customers pay to join your network or make a small purchase at the beginning of your funnel? These leads can be far more valuable down the road if you manage to upsell to them.
Every e-commerce marketer needs to score the leads from their Facebook advertising strategy
Many e-commerce marketers are investing in Facebook. The ROI can be very high if you know how to reach your target customers and focus on engaging with the right leads. The trick is to come up with the right lead scoring model.