Acquiring customers who are enthusiastic about your brand and will support you in the long run is vital to establishing the scalability and longevity of your business. As the first step of building out a loyal customer base, customer acquisition is a high priority for marketing teams.

This article explores four ways you can leverage data science to extend your acquisition spend further to build a loyal customer base.

1) Build high-LTV lookalike audiences

The fact that it costs more to acquire new customers than it does to retain existing ones is no secret, which makes finding high-LTV prospects paramount to ensuring a successful, cost-effective acquisition strategy that will fuel future revenue.

Knowing your target audience is a key piece of acquiring valuable customers from the get-go. What makes your best existing customers unique? What draws them to your brand and/or products? Defining and identifying high-LTV customers is the first step in predicting who out there will become a valuable customer.

Predictive analytics play a crucial role in identifying traits and patterns in your customer data that are indicative of high-value customers. Of course, the depth and breadth of your customer data affects how accurate these predictions will be. Introducing third-party data is a great way to gain deeper insights, fuel your predictions, and generate higher-performing lookalike audiences.

2) Target lookalike audiences across multiple channels

Acquisition campaigns are most effective when orchestrated across multiple channels. Reaching likely buyers with consistent messaging through paid social, direct mail, and other targeted channels helps reinforce your brand in their minds and gives them more opportunities to engage.

To reach the same consumers across online and offline channels, you can't rely on anonymized audiences. Instead, you'll need a secure way of building known-identity audiences bolstered by third-party data. Faraday's predictive targeting tools let you rest easy knowing that the people seeing your ads are the leads you truly want to get in front of.

3) Optimize your channel mix with known-identity attribution

A diversified marketing mix allows you to reach varying demographics across different online and offline channels. But the sheer scale of marketing across numerous platforms doesn’t guarantee a high conversion rate or substantial ROI, so knowing where your money is best spent should be a high priority.

Equip your team with the capabilities to closely monitor campaign performance across each channel so you can identify what is working and what isn’t. It’s worth noting that this can be a difficult task with cross-channel campaigns, as several digital channels provide anonymized or aggregated results.

There are several attribution models out there, but we've found that known-identity attribution can provide you with a better understanding of who you should be targeting on each channel. Acquisition spend is precious, and having the ability to — and being excited about — shifting gears to improve your strategy is crucial. Marketing strategies should not be fixed; they should evolve as your customer base grows and changes.

4) Deliver smarter promotions and discount offers

Some consumers need a bigger push than others to convert — this is where promotions and discounts come in. But to protect ROI on your campaigns, it's important to predict which customers are will stay engaged after that initial purchase. Delivering a 15% discount to all consumer might help drive conversions and reduce your average cost-per-acquisition, but if they don't come back, you might find yourself in a tough spot down the road.

Similarly, not all consumers need a discount to nudge them along the path to conversion. Using predictive analytics to determine who should receive a discount and how big that discount should be can help you beat cost benchmarks and increase the overall return on your acquisition spend.

Faraday is pleased to announce a new partnership with Saylent, a software provider that interprets bank and credit union data to help them better understand their customers and discover opportunities for growth. Saylent’s mission aligns nicely with ours: to help consumer-facing businesses optimize their growth initiatives by bringing data science out of the lab and into the real world.

At the foundation of our partnership is the integration of our platform with Saylent Engage, their product that provides tools to increase customer engagement, and in turn, revenue for financial institutions. The native integration will enhance Engage’s predictive capabilities with a combination of Faraday’s third-party consumer data and advanced machine learning capabilities.

“There has never been a more important time for financial institutions to understand their customers and provide them with the right solutions when they need them. Combining Faraday’s AI-driven predictions with the strength of Engage’s targeted insights and actions will allow our clients to quickly gain a deeper understanding of key customer segments, increasing customer engagement and institutional growth through relevant communications." - Joe Mearn, Director of Product, Saylent.

AI-driven predictions (propensity to increase deposits, purchase specific products, churn, and more) will be embedded into Engage, enabling users to reach new segments of targeted customers with relevant messages and offers. These predictions are the product of machine learning models that train off of multiple terabytes of consumer data found in the Faraday Identity Graph and behavioral data captured by Engage.

“In an age where big banks have whole floors dedicated to data science, regional banks and credit unions need to find a way to leverage AI to deepen customer and member relations. Our partnership with Saylent will empower every financial institution regardless of size to do just this.” - Robbie Adler, Co-founder and Chief Strategy Officer at Faraday.

By incorporating the Faraday models and predictions into Engage, Saylent’s clients will now have the ability to gain a deeper understanding of their customers and predicted behaviors, allowing them to take action with better results. This expands the power of Engage to not only provide insights based on behaviors already taken, but to also highlight opportunities that would be unknown by analyzing transactional history alone.

• Get started with a Saylent demo
• See how financial institutions leverage Faraday AI

Marketers across the board (ourselves included) are trying to understand how to adapt to the effects of COVID-19 on peoples’ lives, as well as businesses’ operations.

Thankfully, most consumers and organizations seem to be following the CDC’s guidelines for protection and prevention. These necessary, rather drastic changes in consumers’ everyday lives have naturally sparked lots of uncertainty, which is being reflected in the information people are searching for online.

In researching these trends for our internal marketing purposes, I came across several articles from thought-leaders in the space sharing some pretty valuable recommendations, some of which I mention below. But I also realized that very few addressed one of the most important components of SEO/SEM strategy — analyzing and adapting to higher-level shifts in companies’ customer bases.

Immediate impacts on search trends

Several publishers are closely monitoring global search trends and have made recommendations to help marketers quickly pivot to minimize potential adverse effects on traffic and conversions in the short term. Here are a few noteworthy trends I’ve seen:

• Search traffic is surging up for essential products, health and wellness, and food and recipe websites — Search Enging Journal. Organic traffic is down for most other industries, including retail, real estate, and travel — Neil Patel.
• There have not been any major shifts in cost-per-click (CPC) for pay-per-click (PPC) campaigns. However, lower conversion rates across most industries are driving up average cost-per-acquisition (CPA) — Neil Patel.
• Competition will decrease, which could result in a PPC cost reduction. This presents an opportunity for marketers to gain search presence and improve long-term ROI on their SEM initiatives — Neil Patel.
• Amazon is focusing almost entirely on fulfilling essential products, temporarily — Search Engine Journal.

This article from Search Engine Land shares a few SEM pivoting strategies, including adding certain keywords as phrase-match negatives to ward off unwanted traffic. Search Engine Land highlights a few ways you can respond to shifts in search traffic in this article.

Given that we’re built around understanding “people data”, I want to share an additional perspective on how companies can make intelligent SEO/SEM decisions in this rapidly evolving environment.

Analyze and act on big-picture changes

As consumers’ spending habits change, companies will see shifts in their customer base. There may be a reduction in purchasing frequency in one cohort, an increase in the average order value (AOV) of another, and so forth. The ability to quickly identify and act on these big-picture changes is just as important as adapting to changes in the more granular aspects of their marketing strategy.

How marketers can use higher-level customer insights to guide their SEO/SEM strategies

• Identify distinct customer cohorts, uncover shared attributes amongst those cohorts, and monitor their purchasing behaviors to guide keyword strategies.
• Compare regional cohorts across several dimensions (e.g. housing density/property type, shopping behaviors, purchasing tendencies, etc) to personalize landing pages.
• Assess each cohort’s predicted lifetime value (LTV) to improve budget allocation.

Find markets worthy of further investment

Before allocating time and budget to create customized website content or adjust bidding strategies, marketers should have a solid understanding of which markets contain the greatest opportunities for growth and positive ROI. Some of the customer insights mentioned above become even more valuable when computing market size and penetration.

How marketers can use predictive analytics to compute market opportunities

• Use a predictive model to determine the total number of likely buyers in a market (market size).
• Determine what percentage of likely buyers are already customers (market penetration).
• Compute the predicted average LTV of likely buyers, determine how much value was extracted from existing customers, and how much potential value remains in the market (opportunity index).

Enhance tactics with another data perspective

Earlier, I mentioned that we work with “people data” — what I mean by that is third-party consumer data. Used properly, it can be immensely powerful and necessary to generate the types of customer insights and geospatial predictions mentioned in the last two sections. At this point, I’ve illustrated some of the advantages this type of data can bring to SEO/SEM strategies, but it can also enhance more granular tactics.

How marketers can optimize bidding strategies and landing page conversions with a third-party data perspective

• Customize landing pages and keyword lists using insights generated from the analysis of high-value regional cohorts.
• Take a more granular approach to geospatial analytics to pinpoint specific zip codes with dense populations of predicted high-LTV consumers. Then, use bid modifiers to raise or lower bids on target keywords in those areas.

Read our post about third-party data in marketing for more use cases and important privacy considerations.

During times of economic uncertainty, consumer spending inevitably slows. While most companies feel the direct impact, these changes in behavior can present new opportunities for brands to strengthen relationships with their existing customers, and forge new ones by understanding how their brand, products, or services can bring comfort and reassurance to consumers in need.

In these turbulant times, none of us have all the answers. But we believe it's just as important as ever to lean into fundamental marketing principals when thinking of solutions to these new and unexpected challenges. We've put together a few thoughts that might help you nurture meaningful connections with your customers and find ways to continue to grow your brand.

Reflect consumers' motivations in your messaging

Consumers are viewing their buying patterns from a strategic point of view. The transactions they're making right now are likely related to health and wellness, nutrition, home essentials, and entertainment. These purchases probably aren't frivolous — they serve a purpose.

Consumers most likely want to add value to their lives now that they're cooped up at home. Ask yourself: How does your brand and messaging bring comfort into your customer's home? How does it help with potential cabin fever? Does it keep them comfortable? Busy? Intellectually stimulated? Take some things off their to-do list around the house? Ease their financial situation?

Consider the answers to these questions and incorporate them into your engagement initiatives. Your messaging should be empathetic and show that your brand recognizes why a consumer's purchasing behavior may be changing during this crisis.

A report published by the 4A's looked at the reception of brands' messaging around the coronavirus, finding that younger generations resonate with messaging that focuses on how the brand is supporting its community, while older generations are more interested in ads that speak to how the brand is keeping its customers safe.

Monitor changes in your customer base

Understanding how your customer base is evolving is critical to making sure your messaging continues to resonate with them, and enables you to make smarter decisions about where you should allocate your resources. This is particularly appropriate now as consumers turn to e-commerce to fulfill their shopping needs and brands try to optimize ad spend, messaging, and discounting strategies for both new and existing customer groups.

While this tactic will help short term sales and keep businesses going through what will be a financially challenging time for many, it's important to continue to track changes in your customer base to help meet long term sales goals. Forbes interviewed Kathy Bachmann, GM of Americas with the consultancy Analytic Partners Inc., and on the topic of what businesses can do to adjust plans for long-term projections she noted, “Some expect that consumers may not return exactly to their prior habits when the outbreak has passed … We recommend leveraging advanced analytics to support decisioning and reduce risk that can be run against a number of possible scenarios.”

Consider the systems your team has in place to monitor and engage your customer base. Can you react quickly to small changes happening now that will affect your business at a larger scale? Are you leveraging consumer insights to serve your customer base the way they expect you to?

Meet consumers where they are

With safety and quarantine measures being put in place globally to slow the spread of COVID-19, clearly event-based initiatives and physical retail are off the table. But this doesn't mean your brand needs to slow its advertising efforts.

Despite a significant drop in digital spend, marketers should still meet their customers where they are: online. Over the past few weeks, Facebook has reported a 50% increase in messaging usage as consumers look to their site for connection and news. Similarly, Pinterest reported that it saw an “all-time high around the world with more saves and searches on the platform than any other weekend in [its] history” as consumers turn to the platform for ideas of how they can spend their time at home. When consumers visit these platforms, your brand should be there too.

An argument against increasing digital spend — or even maintaining it — is that we are in the beginning of an economic downturn; consumers aren't buying enough to compel advertisers to spend the money to get in front of them. However, there is an upside to a decrease in the number of advertisers on social media, especially auction-based platforms where ad prices are likely to drop — you're more likely to land in front of your intended audience. The brands that are pulling back on digital spend are likely to lose traction with their customers as competitors replace their ad space.

Forbes reports that during past economic recessions, brands "that maintained or grew their ad spending increased sales and market share during the recession and afterwards." But you don't need to limit your ad spend to digital. Direct mail is still an option, and a good one. Forbes continues, “Studies have shown that direct mail advertising, which can provide greater short-term sales growth, increases during a recession.” And with a captive "at-home audience," getting into someone's mailbox may never be more effective.

All this being said, the analytics side of your strategy is just as important as the messaging and platforms you use. You should make sure your team has the appropriate systems in place so you can track how your ads are performing across various platforms and audiences.

Be intelligent about special promotions

With consumer spending slowing, many brands are offering widespread discounts. You can frame these offers in ways that shows your brand is trying to make its products accessible to consumers in an economically restricted time.

That being said, some brands are approaching it in a more utilitarian way, as they realize they have to sell their product in order to survive. Reflecting that honestly in their messaging, they're offering steep discounts site-wide.

As your own brand considers a strategy around discounting, consider your audience. What sort of products are they likely to gravitate toward right now? What would serve them best, while still allowing you to succeed?

Partner with like-minded brands

Everyone loves a good Instagram giveaway. Particularly now, large and small businesses alike are using giveaways as an opportunity for consumers to further explore their brands. Promoting giveaways — especially when partnering with like-minded businesses — increases brand awareness and audience engagement on social media platforms. This has potential to increase short term sales and introduce new customers to your products.

While this isn't a new strategy by any means, during this crisis community is of the utmost importance. Brands can contribute to their online communities by engaging their audiences and boosting morale through the positive messaging normally associated with giveaways.

Humanize your brand

Everyone is experiencing some level of fear, anxiety, and grief right now. There is comfort in knowing that there are real people on the other side of your brand's web page or Instagram feed. Humanize your brand and talk about the people who are working hard to bring your products to consumers.

Many companies have already addressed health-related safety measures their teams are taking to ship out orders to limit the possibility of exposure to the coronavirus. Not only does talking about these new processes reassure customers ordering products online, but it also reminds consumers that we're all having to make changes in our routines. We're all having to adjust to a new normal. There is an inherent level of community in that sentiment, bringing consumers closer to the brands they're relying on right now.

In late October, a select group of marketers and e-commerce professionals from some of New York’s most exciting brands joined Faraday and Clearbanc in SoHo for an evening of networking and conversations around growth marketing. Discussing everything from choice subscription platforms to how these professionals got their starts in their industries, there were a few key takeaways we’d love to share.

Consider potential tradeoffs of partnering with larger retail companies

While many DTC companies are partnering with bigger retailers to get their products into the hands of new consumers, some have noticed that existing customers who previously shopped online are now more likely to buy in-store while they’re out shopping. Lower costs of products in-store may be a driver for this, or perhaps it’s simply the convenience of not having to wait for your product to arrive by mail. Regardless, this behavioral change should be taken into account when thinking about expanding your brand into larger retail channels.

Know your audience and where to best reach them.

While it's not a new concept, it's still incredibly relevant. Knowing how to leverage each of your marketing channels — for brand awareness, conversions, cross-sells — is key to building out an effective marketing strategy.

Brands are finding that certain channels are better for brand awareness, while others are better for seeing conversions. A marketer from a health and wellness brand noted that she initially expected to see high conversions from Facebook and Instagram audiences, but now she views those platforms as better for building brand awareness.

Beyond customer behavior when it comes to making a purchase, it’s also become imperative that brands understand who their customer cohorts are offline. This helps identify ideal consumers for lookalike audiences, as well as assists personalization efforts. Personalization has been a hot topic this year, but in order to implement effective messaging and creative in marketing campaigns, brands need to dig deeper into the data and get to know their customers on a holistic level.

Experiment with different software platforms

There are many popular platforms out there, especially for DTC brands, and it wasn’t uncommon to overhear “Hey, we use that platform too!” throughout the evening. But what works for some brands may not work for others — this goes for everything from e-commerce platforms to ESPs to CRMs. Integrating new software into your existing tech stack can be a pain, but it’s worth it to get it right so you can optimize your purchasing processes and marketing automation.

That being said, sometimes you have to settle for what’s available. Marketers and e-commerce specialists have big dreams for perfecting automation in their systems, but occasionally the tech just hasn’t caught up yet. Luckily, most software companies offer ways you can give them feedback to get the ball rolling in the right direction.

Why we partnered with Clearbanc

Nearly all DTC brands feel the pressure to grow as quickly and efficiently as possible. That's what our partnership is all about; Clearbanc helps fund brands' acquisition spend without dilution, and we help optimize those campaigns with machine learning and data science.

If you're interested in attending our next event, don’t hesitate to reach out.