4 Steps to Lower Your Social CPA (and Increase ROI) By 94%

Ready to drastically reduce your CPA on Facebook using just 4 practical steps? Learn how to better understand your customers, put your assumptions to bed and develop a data-driven marketing strategy to increase your social media ROI.

In the early days of social media and digital marketing, brand marketers experienced enormous growth. However, many of the same brands are now experiencing a plateau or even a decline in the same tactics.

Let’s dive into some of the reasons behind this dip in social media marketing ROI and the steps you can take to increase your ROI. We’ll explore these 4 steps using the example of one global brand that managed to improve their social media ROI by reducing their CPA by 94 percent.

Why Have Social Media Marketing Results Plateaued?

There is no one single contributor, but the driving factors behind this industry-wide marketing plateau include:

• Higher advertising costs
• Algorithms preferring paid content over organic
• Non-linear customer decision paths
• An increase in competition
• A confusing data landscape

… and so much more. These factors are making it difficult for brands to live up to the same metrics and benchmarks they experienced in the past.

As their ROI from social media campaigns drops, marketers are going back to the drawing board, seeking answers to why they are experiencing more and more of the dreaded “W” word: waste. Brands today have to evolve to be far more data-centric than ever before in order to increase social media ROI.

The winner of this marketing evolution? The customer.

So How Do You Win Back Your Marketing Dollars?

In the case of a global footwear brand, their cost per acquisition on Facebook had been rising year after year, resulting in reduced social media ROI. The brand became concerned that the reason behind the decline was that they no longer understood their customers, in part due to lacking the resources and technology to fully analyze their customer data.

The brand’s most urgent needs were to:

1. Understand existing customers better to find more high-value audiences.
2. Activate audiences on paid and owned media to increase social media ROI.

This gap in knowledge was an opportunity for the brand to re-evaluate their existing customer data by updating their MarTech and re-segmenting their audiences to understand who their core customers really were.

By actioning new customer segments discovered through a Customer Data Platform (CDP), the brand saw a reduction of 94% in Facebook acquisition costs and an overall increase social media ROI. Here’s how they did it:

4 Steps to Increasing Social Media ROI

1. Identify customers with a Single Customer View.

A Single Customer View is a complete and comprehensive profile of your customers that tells you everything you need to know

By implementing a Single Customer View, the brand was able to get a better understanding of existing customers. Furthermore, overlaying third-party social and household data enabled the brand to learn more about each customer, including their location, buying habits, and interests on social media.

But without core marketing technology, you won’t be able to collect, organize, and analyze customer data successfully. Check out our Navigating MarTech report to learn how to choose and implement the right marketing technology for your business.

2. Add third-party data to enhance personalization.

Personalization is key for successful social media marketing.

By using third-party data to better understand the common interests and behaviors of different customer groups, you can tailor your marketing messages to be more relevant and appealing to those customer segments.

For example, if you were a sports brand and you saw that high-value skiwear customers also tend to be active on social groups about surfing, you could use that information to develop a targeted promotional campaign for your new surfing line.

Using the same method, our global footwear brand discovered two very different high-value customer segments, each with their own similar social interests and demographic attributes. This helped to put previous assumptions to bed. They formed two groups:

• Urban-Dwelling: This group included customers who indexed higher for flat footwear and a larger foot
• Suburban-Dwelling: This group included petite-footed customers indexing higher in heeled footwear.

So how do you do this type of advanced, third-party analysis and segmentation? By using a CDP. This helps you not only view and access your own customer dataset but also enhance that dataset with third-party data.

For example, Lexer allows for seamless and simple linking between all social channels, major email platforms like MailChimp, Campaign Monitor, as well as ingesting any data source in raw format from SFTP, AWS and more.

3. Activate new audiences using segmentation.

By segmenting your audiences based on these similar interests and behaviors, you can deliver more targeted messages to increase conversions and stop wasting social media spend on audiences who are unlikely to convert.

For example, the global footwear brand activated these audience segments on Facebook. They chose influencers who resonated with each segment to promote products that were known to be an interest of each group; for the suburban, petite-footed group, influencers chosen were known to also reflect the same attributes and vice-versa with the urban group.

By understanding the shared interests of these high-value groups, the brand could more confidently personalize their messaging. It was during this influencer campaign that the cost of acquisition drastically reduced.

Interestingly, the Pareto Principle or 80/20 rule was in full force here, with the two niche groups of customers making up a lion’s share of revenue. Another brand, Spyder, recently found that the Pareto Principle was true for them too, with their high-value customers representing roughly 80% of their revenue.

Are you looking for segmentation strategies? We are fans of RFM, a classic transactional segmentation technique that can be a great place to begin a segmentation overhaul.

4. Improve your database quality with surveys.

Surveys enable you to fill in the blanks about your customers and can be executed in a range of ways that add value to your customer’s experience with your brand.

For example, you could let your customers know that providing their missing emails and self-selecting their interests will help you better personalize communications and cut downtime in trial and error methods.

In this particular case, the footwear brand found that knowing the shoe size of their prospects would allow them to send them size-matched ads. Informed by the above-mentioned influencer campaign, they knew that this information increased conversion.

By sending out a survey to prospects requesting their shoe size the brand was able to channel this new data directly into their CDP. This knowledge improved their ability to better personalize all customer communications and re-engage lapsed customers.

Customers Are Still Priority #1

Despite the changes in marketing over the last few years, marketers have learned that truly and genuinely understanding your customers is priority number one. However challenging the starting point may be, a better understanding of customer data leads always leads to an improvement in results and a better customer experience.

To recap, the steps to social media success are:

1. Establish a single customer view with a CDP like Lexer.
2. Add third-party data for a more comprehensive customer profile.
3. Create high-value segments and activate new audiences.
4. Enhance your customer data with surveys and forms.

Not convinced? Check out our Corbetts case study, in which the business launched its first CDP-powered social targeting campaign and saw amazing results, with some audiences delivering an average ROAS of 74.89!

Let’s Grow Your Database and Revenue Today

Not sure where to start? We can help.

Contact us today to find out how to improve your Facebook campaigns with a customer data platform.