Customer Acquisition Cost (CAC) is on the rise, and there exist numerous approaches to address this predicament. For achieving optimal results, consider employing Shopify Audiences, a powerful audience targeting tool that helps you reach the right customers at the right time, dramatically reducing acquisition costs. Hence, Shopify merchants using Audiences have seen their CAC slashed by up to 50%, proving its potential to turn the tide in the war for efficient customer acquisition.
A. What are Shopify Audiences?
Shopify Audiences is a recently introduced tool for audience-building that helps connect Shopify Plus merchants with high-intent buyers, improving the chances of your Shopify store converting visitors into customers, and getting a better return on ad spend as a result.
Shopify Audiences was restricted to Facebook Ads and Instagram Ads lists when it first launched in 2022. Nonetheless, Shopify released Audiences v2.1 in September 2023 which improved algorithms and assisted North American retailers in reaching a larger consumer base across all major ad networks. As a result, Meta, Google, Pinterest, TikTok, Snapchat, and Criteo are now included in the list of platforms.
Additionally, Shopify unveiled a brand-new benchmarking tool that allows retailers to assess how well their ads perform in comparison to other establishments with similar target markets and business structures.
B. What are the benefits of using Shopify Audiences?
To have a better understanding of the benefits of using Shopify Audiences, make sure to discover the capabilities of this powerful tool below.
1. Boost advertising performance
Shopify Audiences uses shopper insights to create targeted lists for ad campaigns, improving precision and providing detailed information on customer behavior thus safeguarding merchant data. These lists can be integrated into digital ad accounts to effectively reach specific audiences and increase sales. The platform also offers different types of lists for various stages of the sales funnel, including retargeting boosts, prospecting, and lookalikes. By utilizing these lists, advertisers can serve ads with greater accuracy and reach the desired audience.
Let’s take a Shopify store called “Cozy Comfort Home” specializing in stylish, modern furniture as an example. To amplify the reach further, users generate a lookalike audience based on top-performing customers. The catchy Pinterest ad featuring a before-and-after home makeover using furniture pieces appears in their pins and boards. As a result, the brand exposure explodes as reaching a wider pool of potential customers who might not have found it organically. Website traffic soars, leading to increased newsletter subscriptions and inquiries for future purchases.
2. Target audiences precisely
The data science team at Shopify Audiences is constantly exploring and implementing various algorithms based on rigorous testing to improve the effectiveness of their models, aiming to maximize conversions and minimize the cost of purchasing ad impressions (CPM). Numerous participating Shopify merchants have reported that the ads using Shopify Audiences are the top performers within their advertising campaigns.
3. Boost ad campaign effectiveness with Performance Benchmarks
Shopify Audiences provides performance benchmarks that allow merchants to assess their ad campaigns’ effectiveness and see how their ad performance stacks up next to merchants with similar shops in the same industry over the past 30 days. It will also assist businesses in pinpointing where to make improvements across key metrics, including click-through rate, conversion rate, cost per 1,000 impressions, cost per click, and cost per conversion. By using these benchmarks as a reference, Shopify merchants can set realistic goals and strive for continuous improvement in their customer acquisition efforts.
C. How to set up Shopify Audiences?
It is worth noticing that users must be a US or Canadian-based Shopify Plus merchant accepting Shopify Payments, then carry out the subsequent actions:
- Install the Audiences app
- Connect ad networks, such as Meta, Google, Pinterest, Criteo, TikTok, and Snapchat. Meta is the best place to start. Your audience lists are automatically created by Shopify Audiences and exported to the associated ad accounts. Notably, the audiences will not fill up completely in the ad manager for a few days.
- Manage and run your advertising campaign with a custom audience list in mind.
D. How to utilize Shopify Audiences to reduce customer acquisition costs by up to 50%?
In light of Shopify Audience’s recognition as a potent marketing instrument, acquiring a comprehensive understanding of how Shopify Audiences can substantially reduce CAC is imperative for entrepreneurs seeking to optimize its utility. CAC (Customer Acquisition Cost) refers to the cost a business incurs to acquire a new customer. By calculating the CAC, Shopify merchants can determine how much it costs to acquire a customer and compare it to the revenue generated from that customer, which is crucial for making informed decisions about marketing budgets and strategies. The fact that CAC has recently been getting harder due to the higher marketing cost, walled-garden social media sites, larger human resources fees, and so on has raised a growing demand for leveraging Shopify Audiences to optimize strategies for acquiring new clients.
Businesses are likely to achieve a significant reduction in customer acquisition costs by effectively taking advantage of Shopify Audiences with the detailed guides as follows.
1. Tailor your audience to your ad’s aim.
To expand the customer base, consider utilizing Prospecting and Lookalike audiences which are designed to help Shopify merchants discover potential buyers who may be interested in your products.
Prospecting audiences consist of larger lists that incorporate various data, including past purchase behaviors, indicating potential interest in the products offered. These audiences should be added to your new or existing prospecting ad sets. The Prospecting list specifically includes potential new customers that Shopify predicts will engage with your brand.
On the other hand, the Lookalike audience utilizes the Retargeting Boost list as its source. By finding people similar to this audience, the ad platform helps Shopify merchants attract even more new customers to their shop.
For example, in the promotion of a new skincare product, businesses can employ targeted strategies through Shopify Audiences by focusing on customers who have previously made skincare purchases (Prospecting) or browse or react to skincare-related products/posts (Lookalike).
2. Refine your targeting once the audience list is sent out.
After the ad campaign is live and the audience has been exposed to this ad, monitor the performance closely. Analyze the data to identify any patterns or trends that can help Shopify merchants refine their targeting further. If notice shows that a particular demographic segment is responding more positively to this ad, merchants can allocate more of their budget to target that segment specifically.
3. Run checks to ensure it’s delivering results for your store.
To maximize the effectiveness of ad sets, it is crucial to analyze them and ensure that merchants are allocating enough budget. To exit the learning phase, they should typically observe roughly 50 conversion events in seven days. If merchants can not see the data, try to adjust spending after determining the budget is sufficient, and try running experiments to help themselves more rigorously understand the incrementality of Shopify Audiences. Alternatively, merchants can run a prospecting Shopify Audiences mid-intent list and compare it with a prospecting list that does not utilize Shopify Audiences. These comparisons will help them better understand the impact and effectiveness of using Shopify Audiences in different targeting scenarios.
In conclusion, Shopify Audiences presents an invaluable opportunity for online businesses to significantly decrease customer acquisition costs by as much as 50%. By leveraging the power of this tool, Shopify merchants can optimize their ad performance and gain a competitive edge in the e-commerce landscape. Don’t miss out on this game-changing solution and take action today and start taking the benefits of Shopify Audiences to drive your business towards success!