Consumer insights:
FANFINDERS
How to fight rising acquisition costs when you scale In his latest column, FanFinders’ CCO Adam Gillett gives us the lowdown on how brands in the baby sector can set about solving the inverse relationship between scale and cost when marketing to consumers.
W
hen it comes to plans for objective is to scale a lead-generation scaling, the default go-to or customer acquisition program over for many, in our a sustained period, that’s where industry and beyond, partner networks can help. remains the likes of Google and Facebook. I would argue that this is Scaling with partcommonly understood – perhaps more ner networks so in the US – and it’s difficult to get When it comes to any form of away from the ‘big guys’. performance marketing and However, if we consider more advertising, the crux is to find the most traditional methods of reaching consumers efficient way to do something, based on via space in magazines, web banners and how much you’re spending and essentially other people’s inventory, the conversion rate. contrast to now is stark. You can forget For any objectives, the maths are the bulk-buying in advance and getting discounts for series bookings or larger commitments. When it comes to any In programmatic marketing, the more scale form of performance you want, the more it’s marketing and going to cost you per advertising, the crux is person, all the way up. Lets say you want 1000 to find the most efficient customers and it costs you way to do something, £5. Then, you want 5,000 based on how much customers in the next period; each of those you’re spending and customers is going to cost conversion rate. you say 2x what they cost before, because you have to compete and bid for space. same. How much are you paying per The pandemic has only stimulated customer? What scale are you getting? this competition. How many At what cost is it converting? And, if companies are now advertising online? you’re a brand who wants reach and They are bidding and competing for engagement, this could be how many the same people, because everyone is people are opening your emails or now in the digital space and not percentage of views that turn into clicks. focused on the high street. Whatever your costs may be, at some What this all means for your funnel, point in that funnel those costs will which encompasses your reach, leads, multiply with scale and you don’t want conversion to customer – and your to end up in a race to the bottom on metrics could be anything from advert ROI. It also takes a serious amount of views, clicks to landing pages, email time and resources to run scalable opens and clicks, is that regardless of campaigns and social. which stage you’re entering, it’s going With partner networks and affiliates, to cost you more money as you scale. you can fix your costs and add The traditional media buying system flexibility. This could depend on has been reversed. different metrics such as customer With how the ‘big guys’ are setup, it quality, life-time value, average basket will not be long until that inverse size or average order value. relationship pushes your budgets By fixing your costs, you can pay completely out of sync. If your
“
people who provide more value, more money. Or pay weaker performers less money. And you can also negotiate on those fixed rates – which is a leverage that doesn’t exist with the ‘big guys’. At FanFinders, we insert ourselves at various different points of the funnel. We’ve all seen those nice diagrams showing the various stages; and we’re involved from the top with 1st party lead generation all the way down to delivering new customers or subscribers, all with ‘guaranteed cost per’, which is designed to de-risk partner marketing programs.
Connecting with customers before they’re customers
Another evolution, which has gathered more momentum during the pandemic, is that more and more brands are looking to accelerate into the ‘pre-customer’ acquisition space and build up their own database at scale. Doing this is incredibly useful when it comes to events like Black Friday and Christmas where dealing with the Duopoly could be double the price due to competition than in
Q1-Q3. Marketing in Q4 is incredibly expensive because of how the algorithms work, so if you own your database, you remove the need to compete on price when everyone else has to. Using email programmes, competition or online discount codes, the aim is to intercept someone prior to becoming a customer, then market to them from that stage onwards. Acquiring people way before the purchase point and using data to convert them into customers is far more efficient and cost-effective. Diversification and looking at other ways to support your scaling objectives will be crucial. As an example, you might have 2,000 partners and only 5 -10 generating around 90% of the bulk, because they sit in your specific niche, this is entirely normal. If you set about developing your own database over the coming years, you will be able to avoid having to rinse and repeat, targeting the same people via social platforms and paying for the same reach to get conversions. What’s better than marketing directly to your potential customers and taking financial control of your pathway to growth?
FanFinders is a performance marketing and consumer insight company that connects brands with parents who want what they have to offer via Your Baby Club. With over 3 million members, our network covers over 80% of the UK baby market. Visit fanfinders.com.
For more information on FanFinders and the consumer insight they can offer, call: 0203 808 3011 or visit www.fanfinders.com nursery today
39
“
