Maximizing Customer Acquisition Through Paid Ads, Emails, and SMS

Customer acquisition and Customer Lifetime Value (CLV) are a reflection of the value a customer brings to your brand over the entire duration of their relationship with you. Understanding and optimizing acquisition and CLV are critical for ecommerce brands striving to stay competitive in 2024. 

Brands that recognize the power of a high CLV gain a strategic advantage: they can afford to be more aggressive in their customer acquisition strategies. They can confidently outbid their competitors for ad placements despite the higher initial cost. This confidence stems from their understanding that the return over time justifies the expense. Moreover, they know they have a loyal customer base that’s not going anywhere. 

Gaining a higher CLV is a multifaceted journey that requires brands to understand customer behavior, refine product offerings, and leverage data-driven insights to craft marketing strategies that retain customers for the long haul. 

Whether through paid ads, email, or SMS marketing, each touchpoint within your customer’s journey is an opportunity to enhance their experience, encourage loyalty, and, by extension, increase their lifetime value to your brand.

Customer Acquisition and Lifetime Value Strategies

Strategic paid ads, email, and SMS create a balanced approach to customer acquisition and enhancing lifetime value. Integrating paid ads, email, and SMS into your marketing strategy not only increases initial customer acquisition but can ensure sustained engagement and long-term profitability. 

Paid advertisements are often the first touchpoint for new customers. With the right targeting and creative strategies, paid ads can reach a broad audience and set the stage for more engagement. 

That’s where email and SMS marketing comes in. These channels are more personal and direct, allowing brands to build relationships with customers over time. They’re typically more affordable than paid ads, and through targeted messages, special offers, and engaging content, brands can keep customers engaged and encourage repeat purchases.

In 2024, the synergy between paid ads, email, and SMS is more critical than ever. As brands navigate the challenges of a cookieless world and increased competition, leveraging these channels can maximize your customer acquisition and CLV.

But finding the right balance between paid ads, emails, and SMS requires a nuanced approach and careful integration strategies. Here’s how to effectively leverage these three channels to maximize customer acquisition and CLV.

Data-Driven Insights & Personalization

Data-Driven Targeting

Data-driven targeting is a core strategy for maximizing customer acquisition and customer lifetime value. By using integrated analytics tools like Triple Whale to measure how paid ads, email, and SMS collectively influence the customer journey, you can refine your strategies and use those insights to improve your paid ads. 

Analyzing which demographics or segments show higher engagement allows you to target similar groups in your paid ads more effectively. This comprehensive perspective is invaluable for spotting trends, understanding preferences, and tailoring campaigns to boost personalization and, consequently, lifetime value.

Emphasis on First-Party Data

With the decline of Google Chrome’s third-party cookies, focusing on first-party data is essential. Now, brands need to rely on data collected directly from their customers through their own first-party channels. Tools like Triple Whale, Klaviyo, and Shopify, which help in leveraging this data, are becoming necessities. 

By integrating newer tools like Meta’s Conversions API and Google’s Enhanced Conversions, you can maximize your customer acquisition efforts in 2024. This integration allows for retargeting and personalized marketing, ensuring that potential customers are engaged in a way that is most likely to lead to a conversion. It also helps improve platform signals, so you’re more likely to find customers who offer a high CLV.

Segmentation and Personalization

Segmentation and personalization involve analyzing individual behaviors, preferences, and past interactions to create personalized communications that resonate with your audience. 

This personalization goes beyond just emails and SMS that include your customers’ names; personalized and dynamic ads that can be easily altered to target specific segments based on past interactions allow you to showcase similar or complementary products. Targeted communication not only increases engagement but encourages customer loyalty.

Key Metrics in Paid Ads, Email, and SMS

Analyzing Customer Behavior for Tailored Campaigns

Utilizing insights from paid advertisements, emails, and text messages enables a thorough examination of customer behavior, allowing businesses to craft personalized campaigns aimed at improving customer lifetime value.

It’s important to consistently assess the performance of marketing campaigns by looking at their return on investment (ROI) and tracking the CLV of individuals acquired through different channels. Identifying and optimizing key moments of conversion are crucial steps in this process.

Paid Ads Metrics

• Cost Per Acquisition (CPA): Measures the cost to acquire a customer through paid advertising. A lower CPA in relation to CLV indicates a healthy return on ad spend.
• Return on Ad Spend (ROAS): Calculates the revenue generated for every dollar spent on advertising. A high ROAS can indicate effective ad campaigns.
• Click-Through Rate (CTR): The percentage of users who click on an ad after seeing it. A higher CTR can indicate more effective ad creatives or targeting.
• Conversion Rate: The percentage of ad clicks that convert into desired actions, such as purchases or sign-ups. It helps in understanding the effectiveness of the ad in driving actions. It also indicates the success or failure of a landing page.
• Customer Acquisition Cost (CAC): The total cost of acquiring a new customer, considering all marketing and sales expenses. It’s crucial to compare CAC against CLV to ensure profitability.

Email Marketing Metrics

• Open Rate: The percentage of recipients who open an email. It indicates the effectiveness of your subject lines and the overall engagement of your email list.
• Click Rate: The percentage of recipients who clicked on one or more links contained in an email. This metric helps gauge the relevance and appeal of the email content.
• Conversion Rate: Measures how many email recipients perform a desired action, such as making a purchase. This metric is critical for understanding the direct impact of email campaigns on sales.
• Unsubscribe Rate: The rate at which people opt out of your email list after receiving an email. A high rate may indicate irrelevant or too frequent communications. It may also mean customers are ending their relationship with your brand.
• Revenue per Email: The total revenue generated from an email campaign divided by the number of emails delivered. It helps quantify the financial impact of your email marketing efforts.

SMS Marketing Metrics

• Delivery Rate: The percentage of messages successfully delivered to the recipient’s device. It’s crucial for gauging the reliability of your SMS marketing efforts.
• Response Rate: The percentage of recipients who respond to an SMS message. A high response rate indicates strong engagement.
• Opt-Out Rate: The rate at which recipients unsubscribe from your SMS communications. Monitoring this can help in adjusting the frequency and content of messages and offer opportunities to re-engage customers
• Conversion Rate: Similar to email, this measures the percentage of recipients who take a desired action after receiving an SMS, providing direct insight into the effectiveness of SMS in driving conversions.

Cross-Channel CLV Considerations

• Customer Retention Rate: The percentage of customers who continue to purchase over time. High retention rates are indicative of a high CLV.
• Average Order Value (AOV): The average amount spent each time a customer places an order. Increasing AOV can significantly impact CLV.
• Segmentation Effectiveness: The success of targeted campaigns based on customer segments, which can affect CLV by ensuring more personalized and relevant marketing messages.
• Engagement Trends Over Time: Observing how engagement metrics trend over time can provide insights into the long-term value and loyalty of acquired customers.

To maximize CLV and ensure effective customer acquisition, businesses should not only monitor these metrics closely but also continuously test and refine their strategies based on the insights gathered. 

Strategies For Increasing Customer Acquisition and CLV

Lifecycle Marketing

Lifecycle marketing involves engaging with customers at every point in their journey.

From onboarding new customers with welcome emails to re-engaging lapsed customers with win-back campaigns, each communication should be designed to move customers to the next stage of their journey with your brand.

Consistency in brand messaging across all platforms—your website, social media, email, SMS, and paid advertisements—is crucial for maintaining brand recognition and trust. It’s also important to make sure that the messaging in your paid ads, emails, and SMS campaigns is mutually reinforcing. For example, if a customer engages with a paid ad but doesn’t complete a purchase, a follow-up email or SMS could address any concerns they might have or offer additional incentives to encourage a conversion.

Value-Added Content

The content that you create should add value by including insightful information, tips, tutorials, and user-generated content that complements your products or services. This establishes your brand as a resource, enhancing brand trust and encouraging continuous engagement and repeat business.

It’s important to ensure that your communications extend beyond mere promotional material by including educational content, user guides, and relevant industry news that provides real value to your customers.

At the same time, incorporate elements like videos, GIFs, and interactive features such as polls or quizzes in your emails to boost engagement and keep your brand at the forefront of customers’ minds. 

Utilizing email and SMS to gather customer feedback is a strategic way to assess satisfaction and identify opportunities for improvement. This engagement not only demonstrates to customers that their opinions are valued but also offers actionable insights to refine your products and services.

Exclusive Offers and Loyalty Programs

By providing tailored rewards, early access to new products, and loyalty points that can be exchanged for discounts, you show appreciation for your customers’ loyalty and increase CLV.

Promoting exclusive offers through paid advertisements that require an email or SMS sign-up is a great way to generate new leads. This strategy also integrates various marketing channels, guiding customers from engaging with an ad to interacting with your brand via email or SMS.

Rewarding loyal customers with special offers, early product access, or redeemable loyalty points not only motivates repeat purchases but also makes customers feel valued and appreciated. This sense of value strengthens their loyalty to your brand, enhancing the likelihood of continued business.

Cross-Selling and Upselling

Cross-selling and upselling are strategies that leverage customer purchase history to offer relevant additional products or upgrades, respectively. By analyzing this data, you can identify opportunities to recommend complementary items (cross-selling) or more premium options (upselling) through targeted communications like emails and SMS. 

Targeted recommendations based on a customer’s past purchases can encourage additional purchases. Customers who spend more are more likely to stay with your brand and continue making large purchases, so encouraging this kind of behavior is paramount. 

Timely Reminders and Replenishment Emails

Timely reminders and replenishment emails are effective strategies for products with a predictable repurchase cycle, such as consumables like protein powder. By sending well-timed reminders or establishing a subscription model, you can make it easier for customers to reorder from you. Ensuring customers have a seamless way to repurchase boosts customer satisfaction and loyalty.

A/B Testing

Customer preferences change quickly, so ongoing optimization of your marketing strategies is essential. A/B testing various elements of your campaigns can offer valuable insights into opportunities to increase engagement and conversion rates.

It’s essential to regularly experiment with different elements of your email and SMS campaigns, including subject lines, content, messaging, offers, and timing, to discover what resonates best with your audience.

Then, you can create more sophisticated audience profiles that can more effectively retarget customers and target new lookalike audiences also likely to have high CLV.

Leverage Automation

By leveraging automation tools, you can automatically send personalized emails or SMS messages in response to customer behaviors like exploring a particular product category, abandoning a shopping cart, or achieving a certain level of CLV. 

For instance, if a customer reaches a certain level of CLV, you can automatically offer entrance to a club or loyalty program with additional perks to keep the customer invested. These automated, well-timed, and pertinent communications can boost engagement and foster repeat business.

Challenges in Maximizing Customer Lifetime Value

Ecommerce brands face a lot of challenges when it comes to maximizing customer lifetime value through paid ads, email, and SMS marketing. Here’s a breakdown of just a few of these challenges and strategies to overcome them:

• Data Accuracy and Integration: Ensuring the accuracy and integration of data across different marketing channels can be challenging. Inaccurate or siloed data can lead to misinformed decisions that negatively impact CLV. Good A/B testing throughout a campaign avoids silos. 
• Balancing Frequency and Relevance: Finding the right balance in the frequency of communication and ensuring the relevance of the content in emails and SMS can be tricky. Over-communication can lead to customer fatigue, while under-communication can result in missed opportunities. Analyze the data to see if you’re losing customers after an aggressive campaign or seeing fewer results after a milder one.
• Evolving Consumer Behavior: Consumer preferences and behaviors are constantly changing. Adapting marketing strategies to these changes without compromising CLV can be difficult. Multivariant testing is a smart way to see what customers are responding to now. 
• Technological Changes: The digital marketing landscape continues to rapidly evolve, as evidenced by the introduction of AI and the phasing out of cookies. Staying ahead of these changes and adapting your marketing plans in response to them is as crucial as it is time-consuming. An expert in digital marketing can be invaluable in helping you stay on top of the changes affecting your business. 

The Future Of Customer Acquisition And Lifetime Value

As we look toward the future, several key trends are emerging that will significantly affect customer acquisition and CLV strategies. The ongoing shift towards a cookieless internet necessitates investing in acquiring first-party data. 

Brands will need to invest in technologies and strategies that allow them to collect, analyze, and leverage their own data to understand customer behaviors, preferences, and purchase patterns rather than relying on cookies. 

Further advances in AI and machine learning will enable brands to deliver highly personalized content not just in email and SMS marketing but across all paid advertising efforts. Personalization will be key to increasing engagement, loyalty, and, consequently, CLV.

About the Author: Jennifer Hacker is the Director, Integrated Media at adQuadrant. She has 4 loves in her life – marketing, music, her husband, and her pets (not in that order). In her 12+ years of marketing experience, she has had the opportunity to work in Pennsylvania, Washington, London, and Los Angeles. Her greatest motivation in marketing is driving impactful results.