E-Commerce Insights: 7 Ways to Find New Customers Online

Online marketing activities produce a cacophony of statistics: E-mail screams with information about open and clickthrough rates. Paid search demands that you focus on deliverability and clickthrough rates. Search engine optimization hounds you to build inbound links.

The daily stream of numbers can be deafening, leaving you unsure of what to pay attention to. Yet the most important metric for the success of your online business lies quietly behind all this data.

What’s the one metric that tells you whether your business is likely to be successful in the future or at the beginning of a death spiral? It’s a decidedly old-school stat: the number of new customers you acquired last year.

Many catalogers responded to higher postal rates by cutting back on catalog prospect mailings because they didn’t have much choice. The current postal rates make it impossible to mail to the many lists that previously worked.

In the short run, reduced prospecting translates into a small hit to revenue. This has allowed many companies to survive a difficult year. In the long run, though, it’s a failing strategy.

When you continually find new customers, you can grow your business dramatically. But how do you consistently find new customers in this tough environment? Here are seven ways you can use the online world to replace customer acquisition activities that are no longer affordable offline.

1. Invest in search engine optimization (SEO). SEO is the most underused means of customer acquisition for catalogers. Many pure-play Web sites acquire 70 percent of their new customers from their organic listings on Yahoo and Google. For most catalogers, this number is usually 10 percent or less — it’s even lower with their brand names removed.

Catalogers have bypassed this strategy because it’s not as directly measurable as other online customer acquisition techniques, but you can no longer ignore it in today’s world. Take the money you would have spent to mail 50,000 to 100,000 prospects and invest it in SEO.

Don’t fall into the trap of thinking SEO is free. It’s not. It requires constant investment, mostly in labor and expertise. It’s not hard to do, though it does take patience. Use a well-respected SEO firm if you need help.

2. Use paid inclusions. Paid inclusion for Yahoo can boost SEO results. Companies such as Booyah Networks can take a data feed from your site, rewrite and reformat it to highlight relevant key phrases, and pass it on to Yahoo.

This feed gives Yahoo a much cleaner and clearer view of your site than it gets through spidering. The links appear in the organic search area. You pay per click, though usually only a fraction of what the click costs through sponsored search. I’ve seen paid inclusion programs produce 10 percent to 20 percent of the total sales that sites generate through their Google AdWords programs.

3. Pay attention to both your ad spending and sales results. Challenge whoever does your paid search to increase sales and spend by at least 20 percent this year.

Many paid search campaigns focus primarily on return on advertising spending, ignoring overall sales results. Pay attention to both. Find new key phrases to bid on using sites like KeywordSpy.com. Don’t stop there, though. I’ve seen sites produce 20 percent to 50 percent increases in sponsored search programs solely by testing different ad copy.

4. Consider ad retargeting. More than 97 percent of first-time visitors to your site don’t buy. Ad retargeting networks present banners on large content sites, such as washingtonpost.com, to shoppers who have recently visited your site.

While you’ll also present ads to existing customers, retargeting gives you another chance to get first-time visitors to return. Companies like aCerno, Dotomi and MeritDirect (for B-to-B sites) have widely used retargeting products.

5. Consider comparison shopping engines (CSEs). CSEs, including Shopzilla and Google Shopping, also can boost sales. Companies like MerchantAdvantage and SingleFeed make it easy to get your products into a number of these shopping engines, and some even provide optimization services.

A word of warning: You can’t use your regular lifetime value metrics when analyzing CSEs. The customers you acquire from these sources are more likely to purchase again from the CSE rather than directly from you.

6. Use e-mail to promote “old-school” direct marketing promotions like friend-get-a-friend. Your customers are your biggest advocates. If you ask them to forward an e-mail to someone who might be interested in your site, many will. You can offer a small token of appreciation for doing so.

Another strategy to try includes sending recent buyers an offer to send a similar item as a gift to someone else. You’re leaving money on the table if you’re not taking advantage of these time-proven opportunities.

7. Finally, you may be able to tap into social networks using a widget developed by ShareThis.com. The widget is easy to install on your site and allows shoppers to share a link to your site through AOL Instant Messenger, e-mail, Facebook, MySpace and others.

More than 70,000 sites now offer the widget. Content sites report up to 2 percent of visitors come through links generated through ShareThis.com by other visitors. Similar data doesn’t exist on e-commerce sites. The widget is quick to install and doesn’t take up much real estate on the page, so just about anything you get is a plus.

Larry Kavanagh is founder and CEO of DMinSite, a provider of search, e-commerce and e-mail solutions for multichannel merchants. You can reach him at (859) 547-5501 or lkavanagh@dminsite.com.