Perhaps nothing is more crucial to a scaling company than how it attracts customers — you can have the greatest product in the world, but without a consistent flow of new impressions, you’ll wind up on the scrap heap of promising ideas that failed to find an audience. Traditional advertising and retention efforts have long been the go-to for building and strengthening revenue streams, but creative businesses are finding a powerful, and cost-effective new way to acquire customers.
Amazon is proving itself a robust customer acquisition channel for those willing to get creative. What can cost a brand thousands of dollars per day in traditional advertising can be attained in a single transaction on Amazon. Here's how.
Converting Amazon Customers into Brand Evangelists
Many businesses look to Amazon for its revenue potential, but fail to see the incredible opportunity for acquisition and retention. Amazon is no different than any of your other channels. If someone purchases a product from you, then that person becomes your customer, and it becomes your job to retain them.
While it’s true that many brands struggle with “one-and-done” purchasers on Amazon, more often than not, this happenstance stems from a lack of retention efforts. The common refrain from these sellers is Amazon doesn’t provide customer information, and without the ability to own that data, the lifetime value (LTV) of that customer drops dramatically, so why bother? Whether or not this perspective holds true comes down to the choices a brand makes. We have found creative ways to work around the problem of customer ownership for sales that originate on Amazon. One of the most versatile strategies we use to help our clients negate one-off purchases and turn Amazon customers into loyal followers is the product insert.
Insert Strategies
Coupon Codes
Adding a print insert to your product packaging with an inciting call-to-action is one of the most effective ways brands can engage in a conversation off Amazon. The call-to-action usually involves a data collection element — name, email address, purchase data, etc. — and in exchange for that data, the customer receives a discount on their next purchase.
For our in-house brand LONE CONE, we put a hang tag on our rain boots to provide an avenue for customers to learn more about us.
We offer the customer 15% off their next order in exchange for a way to connect with them off Amazon. This allows us to own customer data that Amazon doesn’t make available, thus acquiring the customer off of Amazon and increasing the likelihood of repeat purchases.
SMS
While many brands choose email as their main communication platform, SMS is becoming a necessity for marketers that want to reach customers efficiently. SMS has a better open rate than email and averages a higher click through rate.
Email metrics might boast a 30% open rate with a 3% click rate, but a warm SMS list can see open rates over 80% and click through rates in excess of 15%.
Most email service providers now offer an SMS package, but for those that don’t, platforms like EZ Texting make SMS automation simple.
At $0.03 per text on average, you could find that the right offer and communication strategy nets you a customer for life at the fraction of the cost of digital advertising.
Reviews
In some instances, the strategy of a brand doesn’t entail taking the customer off Amazon, but rather communicating with them to drive further sales on the platform.
Amazon’s A9 Algorithm takes reviews into account when factoring a product’s organic search ranking. While Amazon prohibits you soliciting positive reviews in exchange for a discounted offer, they do allow you to ask for an open and honest review. Gaining reviews through a call-to-action on an insert can help make your products more discoverable over time.
Content Magnet
Some brands run on thin margins. In these instances, we recommend offering content, rather than a discount, as a way to entice customers to engage with your brand.
A QR code on your insert that links to an Instagram/Youtube/Facebook video can immediately place an Amazon customer into your social media acquisition pipeline.
An ebook or other digital download that adds value to the product you sold is an excellent way to acquire customer data and understand the needs of the end user without providing a discount.
Loyalty Programs
Another strategy for brands running on thin margins is to offer a loyalty program. For example, an Amazon purchase can provide customers with points that they can redeem for unique content or other incentives made available through your own website.
Brands can also allow exclusive “insider access” to new product releases or grant customers VIP status for a behind-the-scenes look into the brand.
Creating A Meaningful Dialog
The caveat with all these strategies is that the customer needs to be willing enough to engage with your brand to provide contact information, and that process begins before a purchase is ever made. It’s important to tell a story that consumers want to know more about. Otherwise, you run the risk of being just another transactional brand on Amazon. Well-designed product detail pages, an enticing storefront that highlights your brand story, and a high-quality product is crucial to encouraging a customer to interact with your brand.
Cannibalization Myth
One of the common fears we hear when speaking with clients is that Amazon is going to cannibalize sales from their other platforms. However, if a brand can execute an effective insert strategy, they are almost guaranteed to find sales on their own website stemming from this new customer acquisition funnel. Not only does this mean that you won’t lose sales to Amazon, you’ll have gained a new platform that adds to the overall exposure of your brand.
Amazon wants to help with this as well. In 2019, they released a “New to Brand” metric, allowing sellers to see how many of their customers are first-time purchasers on the platform. This data point allows brands to connect the dots regarding where their customers prefer to do their shopping, which ultimately leads to a bigger question.
Do You Really Want Your Customers Off Amazon?
Even if Amazon were cannibalizing your sales on other channels, does it matter? When you compare the conveniences of Amazon with the amount of work required to obtain sales on other platforms, you might find the answer isn’t as clear cut as you thought.
We provide all our partners with a thorough Amazon opportunity and risk analysis.
These numbers, compared against the costs associated with off-Amazon sales (employee time spent on customer service, added advertising spend, operations/logistics costs, etc.) often paint an intriguing picture of overall business health. While we’re not saying that Amazon is always more profitable, a side-by-side breakdown of customer acquisition cost (CAC) on and off Amazon is something we strongly recommend.
As an agency, it’s our responsibility to provide business insights that you’re not going to get elsewhere. If you want to know if Amazon is the right channel for your customer acquisition efforts, let us know, and we’ll be happy to set up a call. Our team is here to provide value in any way we can.