Performance marketing: 5 tips to compete with the best
In the battle of the brands, small and mid-sized businesses are often seen as ‘Davids’ to the larger, more established Goliaths of the retail world. Whilst it is true that smaller retailers have the agility and resourcefulness of the boy in the story, it has not been as easy for them to take their giants down. Research shows that despite their flexibility and nimble ways of working, over half of all SME retailers in the UK are not expanding internationally.
This is set to change. Now, new technology means that mid-sized businesses are becoming equipped with the tools they need to grow. Performance marketing in particular is one way for these businesses to compete with larger companies with huge marketing budgets on a global level, at a relatively low cost of entry.
Making the most of a moment
An effective use of a performance based approach is ‘moment marketing’. Moment marketing is about understanding that customer-centric marketing is not just about targeting the right people, but targeting them at the right time. Seasonal ‘moments’ such as Valentine’s Day and Mother’s Day, for example, have become annual consumer shopping peaks. Figures show that sales of health and beauty products were up by 51 percent on the Sunday prior to Mother’s Day in 2015, and in the week prior to Valentine’s Day there was a 115 percent uplift in sales of flowers and gifts. With propensity to spend so high in these moments, they are the perfect time for marketers to develop campaigns to drive sales.
Knowing your customer inside out
Whilst moment marketing is driven by seasonal ‘hooks’, it is important that retailers keep their customers at the centre of campaigns. Marketers need build customer personas, helping them get a better understanding of who is buying on the other side of the screen. Understanding a customer means not only knowing their age and gender but also what their challenges and pain points are, what success looks like for them and what keeps them up at night. From here, marketers can find patterns in consumer behaviour and, ultimately, predict what they want to buy next.
Adding seasonality into this mix can, depending on what a browser has looked at or purchased, help determine what the shopper will buy next. For example, someone who has been identified as a new parent from previous purchases may be more likely to be buy a mother’s or father’s day gift for their partner.
Once predictions have been made they can then be transformed into creative campaigns. Crucially for mid-sized retailers, these campaigns do not need to involve big budgets but should focus instead on creativity. Smaller businesses can use email retargeting or social media, for example, to bring campaigns to life.
Personas are important, but after making predictions, campaigns are only as strong as the channels used.
Mobile is vital for reaching customers on the go. This is particularly important during holidays or public days when consumers are most likely to not be at a desk or at home to access a PC. During Christmas 2015, over 30 percent of online sales in the UK were made through mobile devices. Last year, average mobile activity during the week of 21st December was higher than any other week of the holiday season. In fact, it peaked at 59.7 percent of all e-commerce traffic versus 40.3 percent for desktop.
Ignoring mobile is no longer an option for mid-size businesses. As competitors become increasingly sophisticated in this area, it is important that smaller retailers keep up and benefit too.
Measure success, not cost
All businesses, no matter their size, need to keep an eye on costs.
However, to make smart assessments of marketing spend, marketers should move away from thinking about budgets and look at cost of sale instead. When it comes to performance marketing, this is simple. Because costs are designed to ‘perform’ they will, ultimately, pay for themselves. This means that as long as performance targeting is working and generating profitable conversions, advertisers should continue to invest to see positive ROI.
A goliath advantage
The future is bright for mid-sized businesses. The retail market has recognised that smaller organisations are a smart option and rewarded them accordingly. In fact, 88 percent of small businesses reported growth in revenue in 2015.
To build on this, mid-sized businesses now need to make intelligent choices about the technology on offer to them and invest in marketing. By borrowing tools that have worked for the giants in their path and making them their own, mid-sized businesses can steer themselves to success in 2016 and beyond.
By Tim Frankcom, Executive Vice President of Mid Market & Online Channel at Criteo
Read the August 2016 issue of Business Review Europe magazine.