User acquisition costs can take up a large portion of your margin. For example, Amazon referral fees range from 8-17% of retail price, with most products getting charged 15%.
Unsurprisingly, it is extremely important to drive these UA costs down as far as possible in order to increase your profit margin. We are going to look at some free user acquisition channels, some of which you might have already thought of and implemented; others may be new to you (like the Amazon hack at the bottom of the post…)
1. Email lists
Let’s start off with an easy one. 24% of e-commerce sales comes from email marketing.
If you’ve busted your ass to get someone to interact with your brand (by purchasing a product, subscribing to a newsletter, signing up for new product updates,etc…), you should work equally hard to provide them with consistent, relevant updates to keep them engaged with your brand. These aren’t just potential repeat customers, but also new customers and ambassadors.
The best thing about email lists? They’re free (well, super cheap…)!
Remember, you’ve already done the hard work in getting the users to share their email address with the brand. In reality, the only ongoing costs are a mail service (e.g Mailchimp) and your time to put together the content.
You may be thinking “Sure, it may be cheap to email them, but I can’t send them multiple emails a week about new products we’re releasing. We don’t have that many products…..”
Well, it doesn’t have to be just about your products, you could be sharing news, updates or other products that users interested in your vertical would find useful. Airows sends out a great daily email highlighting higher-end lifestyle products that their readers may find useful. This can 1) build trust with your user base since you are sharing info they may find useful that is beyond just promoting your products and 2) you can see which topics / products people engage with most (new product-line testing anyone?).
Figure 1. Sample daily email from Airows.com
2. Blog posts
We were just talking about keeping your users engaged by sending frequent, relevant, email communication.
A great way to do this is with blog posts.
Blogs are an extremely useful tool for storytelling and building a brand identity. Biolite and BestSelf do a great job of adding value to readers who are interested in the industry they operate (outdoor adventure and self-improvement respectively), while subtly promoting their products.
Figure 2. Biolite Blog. https://blog.bioliteenergy.com/
If you have built up engaging content on your blog, it’s not a big jump to get people across to your e-commerce store to discover more about your company and products.
According to HubSpot, companies that blog see their monthly leads rise by 126% more than companies that don’t blog.
Guest blogging is also a great way to drive traffic back to your site.
3. Community
Engaging with a community that is interested in the problem your product solves is a great way to build not only referral traffic, but also word of mouth, as the community tells others of your solution.
The key with any community is to avoid the hard sell (or any type of selling for that matter). If you are providing value to the community, the community will discover your products naturally.
Where to engage with applicable communities:
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- Reddit – Reddit has subreddits for almost everything and a huge amount of traffic (as of writing this post, Reddit was the 7th most visited site in the US). It’s especially important here not to try and sell anything. Some subreddits specifically call this out as behavior that is frowned upon or even expressly forbidden.
- Forums – Being an active member on individual forums can drive a lot of word of mouth traffic. Be sure to add value by giving solutions for people’s problems in your area of expertise, and, if they ask, answering questions about your product in a timely manner.
- Create your own – Rapha (a cycling apparel brand) started off selling DTC but over time created an extremely strong community through their cycling club and coffee shops in their retail stores (these retail locations are seen as starting and ending locations for rides). As cyclists wait for friends to turn up, they find themselves looking at the new season’s kit that has just arrived.
4. SEO
Captain obvious time….
SEO can be thought of as the original ‘free traffic,’ making sure you are as high up on Google’s rankings as possible. And if you make it up above the fold, that’s the holy grail.
We’re not going to try and list all the ins and outs of SEO here since 1) it is a vast topic and 2) other people know WAY more about it than we do.
However, we will point you to some helpful guides:
Ecommerce SEO: A Simple (But Complete) Guide
Ecommerce SEO Guide: How Online Stores Can Drive Organic Traffic in 2019
The Ultimate Guide to SEO for E-commerce Websites
5. Amazon
This is a weird one, and we’re by no means saying you should leverage Amazon like this, but it is a possibility since e-commerce brands already do it.
49% of US internet users start product searches on Amazon (Google is 22%). Crazy, right? This means a vast amount of people are on Amazon looking for products – one of the main reasons you may already sell on Amazon.
However, Amazon isn’t without issues. It is expensive (on top of the Amazon referral fee, you may also have to pay fulfillment and advertising costs). In addition, when a user buys one of your products on Amazon, they aren’t your customer. You can’t re-market to this customer.
But if the customer had bought something on your site, you would then own that customer and be able to re-market future products and deals to them. So, if you were able to get all these initial product searches on Amazon to buy something on your site it would be beneficial for you. More traffic and you own the customer.
You could try increasing the cost of your product on Amazon (or reducing the cost on your site) such that when a client finds a product on Amazon and they search to find your actual store (whether it’s to find out more information Amazon doesn’t list about the product, or to discover more about your company), they will be more likely to buy from your site vs Amazon.
The price difference has to be distinct enough for people to be happy to give up the trust and ease of shipping with Amazon to buy on your site, but it should be worth it if you get to own that customer for life and have the ability to remarket to them.
Are you an e-commerce company looking for extra cash to help you grow? We’d love to help! Come over here and say 👋 to the team by adding your email address to the bottom of the page.
so informative article Andrew thank you so much, keep sharing