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Paid Advertising – Is It Worth It for eCommerce Brands?

Paid Advertising – Is It Worth It for eCommerce Brands?

The end goal of any paid advertising is to build a customer base that converts to long-term sales. But how do we secure this customer base? Our team has the answers.

Why Paid Advertising Doesn’t Work for Your eCommerce Store

A surprising number of eCommerce stores fail to grow on a big scale because they are either restricting how much they spend on advertising or not spending any money on advertising. Crazy, right?

Your potential customers are looking to spend money on products, just like the ones you sell. Still, you’re not getting the exposure if you’re not properly allocating money to advertising. We typically hear from marketing executives and companies why they don’t spend money on advertising because they say they couldn’t have generated a solid return on investment. However, there is a major fallacy in that thinking.

Paid ads for eCommerce are about building a customer base. And why is that so important? Our experts at Catapult Revenue are here to explain.

paid google ads

How to Grow Your Customer Base through Paid Advertising

When you’re advertising, your primary goal is to build up your customer base – not to make a sizable return on investment on an ad.

Why? Well, there are three ways to grow your business – get new customers, maximize average order value, and maximize the lifetime value of each customer. With this in mind, securing a customer base to hit on all three ways will help boost your business not just immediately but for the long haul.

Why a Customer Base is More Important Than One Sale

When you utilize paid advertising on Google or social media, you need to build this customer base that you will then sell follow-up products to. It’s not about just selling one product, but selling many to the same customer over the years.

It’s all about brand loyalty! To sell more to them and maximize their lifetime value, securing a base of customers that are loyal to your brand and trust your products will ensure years of sales.

Create a Product Line to Make More Sales

If you’re looking to maintain a customer base, you not only need to entice customers but keep delivering with an intriguing product line.

When a customer buys one product, you can sell them on many more in the product line. If they bought product A, they might end up being interested in products B or C. However, if your product line doesn’t lend you this chance, with products that all stand entirely separately and don’t tie together, you’ll miss out on this major opportunity.

Think strategically. If you want a massive return on investment (ROI) for your paid ads for eCommerce, you’ll need a product line that lends itself to that.

google shopping ads of clothes for kids

Calculate LTV

To approach paid advertising on Google, Bing, and social media platforms, we have to think about growing our customer base. And when it comes to creating a strong base through the years, it’s all about lifetime value (LTV).

You can use any Shopify platform to calculate your average lifetime value. With this tool, you can show that a customer’s purchase is not just a one-time $50 purchase, but maybe thousands of dollars over that customer’s lifetime.

With a continuous line of products, so the customer can always buy more, you’re creating a relationship that spans far beyond their first purchase – creating a long-term revenue stream for your business.

Combine Paid Advertising with Follow-Up and Email Marketing

Follow-up and email marketing is another building block to build your customer base, showing them your other items that they can add to their cart in the future. Sure, your paid ads will bring in that initial customer, but your follow-up and email marketing will keep them coming back for more.

Conclusion

When it comes to a successful eCommerce business, it’s all about leveraging every potential channel to reach customers and maximize your business’s value. Maximizing customer lifetime value and order value will drive business growth, with paid ads for eCommerce serving as the first step in the process.

To get started on building your customer base for solid LTV and sales, our team at Catapult Revenue can equip you with the perfect strategy for your business. Contact us today at 312-625-0447, or fill out our form online.

 

About the Author
Sasha Berson

Sasha Berson

Sasha serves as Managing Partner and VP of Client Solutions for Catapult Revenue, ensuring that all client’s revenue goals are met via Catapult’s marketing strategies.

Expert in: Marketing Strategy
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