Right Place, Right Time, Right Keyword
Right Place, Right Time, Right Keyword
By Ann Meyer
The Internet is not only a new channel for marketing to and servicing old customers, it's also a new channel for gaining new customers, thanks largely to search engine and affiliate marketing.
Case in point: Personal care and cosmetics merchant Garden Botanika. At the beginning of 2004, the Redmond, WA-based company implemented a strategy to acquire customers using natural search and paid keyword advertising, says Web marketing manager Ellena Stiff. It later added banner ads, portal sites, and affiliate marketing to its online acquisition efforts.
A year later, nearly nine out of 10 of the company's online customers were new to file, Stiff says, blowing away the theory that most online buyers are catalog customers who prefer online ordering to picking up the phone. "I'm sure there’s some overlap," Stiff says. "But with 88% who are new to file, we feel that's proof we're reaching a new segment that we would not have otherwise."
Garden Botanika's experience is in line with overall industry numbers, experts say. New-to-file customer acquisition through search engines ranges from 30% to 90%, says Stuart Larkins, vice president of partner services for Chicago-based Performics, the performance-based marketing division of online marketing services provider DoubleClick.
What's more, online acquisition programs can cost you less than offline prospecting methods. Larkins estimates that the average cost of acquiring a customer through traditional catalog prospecting is $30-$40, compared with $10 via an affiliate program and $20 through search marketing. Ironically, however, many multichannel merchants continue to hold online prospecting to a higher standard than offline prospecting, he adds. "A lot of catalogers think their catalogs are driving online sales. Our argument is that it works the other way as well," Larkins says. One reason could be that customers acquired online sometimes have a lower lifetime value than those acquired via print prospecting. Norm Thompson Outfitters’ Internet acquisition files continue to grow at a healthy clip, thanks to paid and natural search efforts as well as affiliate marketing. But while the Internet is expanding the Portland, OR-based apparel, décor, and gifts merchant’s reach, “we are seeing that Web prospects do not have as high of a lifetime value as [those acquired via] traditional prospecting,” says director of acquisition Patty Davis. Still, Davis says, the Web marketing is boosting the company’s brand awareness. And as the company continues to market to those customers, their lifetime value might improve.
The fact is, the Internet is changing the way Americans regard shopping, says Peter Dammann, director of online marketing for multititle mailer Redcats USA, and any cataloger that ignores the opportunity to find new customers online is handing its competitors quite an advantage. “Not participating in any particular area of the Web’s marketing mix—whether paid search or natural search or affiliate marketing--is a missed opportunity," he says. "There's a certain segment that prefers those methods."
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