How to use incentives in your PPC ads to drive more sales
Too often, bad prices or UX can hinder a sale. But with a small incentive, you can break through it. Here's how to apply this in PPC.
We’re still not yet in a recession, but everything in life costs more.
When everything costs more, sales are harder to come by. Especially if you aren’t the cheapest option, or worse, your website is less than ideal to encourage a purchase.
If you’re selling an in-demand good or service, have an amazing website, and are at the lowest price point among your competitors, stop reading. This article will be of no value to you.
For the rest of you who don’t have Amazon in your domain, this may actually be helpful.
Providing you aren’t selling a one-and-done good or service (and yes, those do exist), any marketer who is worth their weight will tell you that a repeat customer is better than a one-time customer. Think of it from a lifetime value (LTV) angle.
When selling any good or service, two of the most significant barriers to sealing the deal online are the cost to the consumer and the consumer’s experience on the website.
If lowering the price is out of the question for the long term, and you don’t have the means to enhance your questionable UX, then we turn to incentivization in your PPC campaigns.
Getting started: Parse out your audiences and know their worth
Disclaimer: As of April 2023, this approach is valid for Search, Display, Discovery, YouTube, Performance Max (sort of), and Bing Shopping (I still refuse to call it Microsoft). It is not valid for Google Shopping. It also may be restricted to certain categories (i.e., financial services, healthcare, etc.).
The first thing to do is segregate your previous and current customers into active audience lists and identify their LTV.
To segregate customers, set a parameter of duration (i.e., those who have purchased within the past 120 days), which can be done with a basic CRM upload to the Google/Bing UI (this works well for Meta, Trade Desk, and most any biddable media platform where the end experience is on your website).
In addition, I am a fan of creating audience lists of people who have completed a purchase on the site (use the same duration as you do for the CRM upload), allowing this to essentially act like a recycling dynamic list. (Just like the New York Jets quarterback position, a constantly rotating and repopulating role with a two-season lifespan before the player is dropped from it and a new one is added on.)
While doing this, an assessment of how much discount you can allow for should be conducted. If you know the average consumer buys three times a year from you, you can gauge how much of a first-time discount you can provide to a first-time customer (e.g., “15% off your first purchase”).
Determine how much you’re willing to eat on the final revenue (possibly even at a slight loss) if it ensures you’ll get one more purchase from that consumer.
I don’t recommend going broke on the incentive, but if you aren’t winning because of your price and the user experience is garbage (ask a 13-year-old to do a checkout on the site, they will give you unnecessarily brutal honesty of how bad it is), make it truly worth it.
Good thing to remember: An incentive doesn’t necessarily mean it has to be a discount on a good. Other avenues are gifts, free/discounted shopping, and bundle deals.
Or even the allure of the special incentive, where someone gets to join your exclusive club with their first purchase (this is a glorified way of saying they were added to your rewards program and/or email list).
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Account structure: Make sure your campaigns are designed to cater to different audiences
Here is where the tedious grunt work comes in.
I prefer to segment at the campaign level (required for Performance Max), but it could also be done at the ad group level. So for the sake of this explanation, we'll do it at the campaign level.
When possible, determine if your search campaigns generate more repeat or first-time purchases. This will help you decide on audience exclusions and placements for the next part.
Duplicate your current campaigns. (Pro tip: Doing this in the editor tools will save you time.)
If your current campaigns generate a lot of repeat shoppers, then note the original campaign will be dedicated to them. Just put it in the campaign name.
Then apply the repeat shopper audience lists and CRM lists to it as a target audience (There is a new-ish function in Google to only bid for new customers, but I don't use that and prefer lists, except for on Performance Max).
This will only allow the ads in that campaign to hit those on the target lists. If the campaign gets more new shoppers, then apply the CRM and shopper audience list as a negative audience/exclusion so that the campaign only serves ads to new shoppers.
On the new duplicated campaign, do the vice versa settings of the original campaign.
Repeat this process for all applicable campaign types except for Performance Max. On Performance Max, this approach is directionally strong but far from 100%.
Duplicate the campaigns (including audience segments). However, you will check the box for one campaign only to bid for new customers. It isn't guaranteed the other campaign won't serve first-time shoppers, but as of writing, it is as close as you can get.
The key thing to focus on is that while the two campaigns look identical, they actually show ads to different, non-overlapping audiences. This allows for unique creative to also be served to each audience.
In addition, when first-time shoppers convert, they will be serviced by the repeat shopper campaign going forward.
Implementing the incentive
At this point, you've separated your campaigns into new/first-time customers and repeat customers.
Also, you've determined the LTV of a customer and figured out how much and what kind of incentive you can provide to "get them into your system."
On the campaign designated for new shoppers, I recommend rotating three ads when possible (at least two).
One is the control/evergreen ad (something you would also use for the repeat shopper campaign), and the remaining ad(s) with an incentive.
The incentive ad should reflect a promotion, only shared with lapsed or first-time customers to entice them to buy from you once (before you hound them with emails).
Promotion extensions, sitelinks, and other incentive deals can be applied at the specific campaign level to reinforce this.
Lastly, unique landing pages that reflect the promotion in the ad (that cannot be navigated from within the site) are often the clincher.
Now you've successfully provided a promotion to a new customer, enticed them to give up their data and collected that info to market to them again.
It is a clean method and gives you a better understanding of budget allocation needs, in addition to creative assets to use for both groups.
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