Shopify recently published their 2022 Future of Commerce Trend Report. One of their feature insights in the report is that brands must build long-term relationships with their customers in order to combat rising acquisition costs.
As it grows easier than ever to launch a brand online, the report says “This means more brands competing for customers. As a result, digital advertising is more costly and less lucrative than ever before.”
If retailers expect marketing strategies that rely on online advertising to continue delivering growth in the future, they may be in for an uphill battle spending more to get less in return. The solution according to Shopify? “Get ahead of the competition by investing in your brand”.
Here are three steps Shopify recommends for merchants to combat rising acquisition costs in 2022.
1. Figure out a way to measure brand health
With more tools available to demonstrate the value of brand-building activity, it’s important that merchants “Align brand activity with your top-level brand goals”. This means agreeing to a shared methodology to evaluate brand performance. Shopify recommends KPIs like “growing share of mind, market share, or brand consideration.”
Additionally, building a habit of gathering data through consumer surveys and tracking metrics like share of voice, traffic, and social engagement can help marketers paint a clear picture of brand health.
2. Balance short-term and long-term goals
There’s an ongoing debate amongst marketers about the right split between performance marketing and brand marketing. Shopify argues that the two are not mutually exclusive. In fact, they suggest a balance of “performance marketing and brand marketing to create lifelong customers and brand evangelists”.
Shopify recommends a “60/40 split” for brand-building and performance marketing to see increased returns on spending long-term.
3. Diversify advertising and sales channels to reduce acquisition costs
Over the past decade, brands have grown overly reliant on paid social and search to acquire customers. And for good reason - they have been incredibly effective to date helping emerging brands acquire new customers. However, as the economics change, retailers need to adapt by testing new channels to increase sales. Shopify says, “Experimenting with new channels like voice shopping, connected TV, and messaging apps can act as a hedge against digital advertising uncertainty.”
Accrue Savings is another example of a channel to help brands shift dollars away from digital advertising directly to their customers. Merchants who work with Accrue Savings are capturing more of their upper funnel activity by incentivizing customers with rewards as they save up to make a purchase. Not only is it good for their business, but it offers consumers a credit-free payment option.
To learn more about partnering with Accrue Savings, schedule a demo today!