If you run an e-commerce business, you should know that how a customer finds your site makes a difference in how much they spend with you.
A recent study by Custora, a predictive analytics platform for e-commerce marketing, says customers that find your site through search engines provide the greatest lifetime value (PDF), 54 percent above average.
That’s just a fancy way of saying that these customers will spend more at your online store over a longer period than other visitors who might make only a single purchase and never return.
CPC and Email Also Effective
Other high performers as far as delivering customers of above average lifetime value to your e-commerce business are Cost Per Click advertising and e-mail marketing, the study said.
Customers reaching your site through Cost Per Click ads represent 37 percent above the average lifetime value to your website.
Meanwhile, e-mail marketing delivers customers who are 12 percent above the average lifetime value to your e-commerce business.
Social Media Lags Behind
And where did social media place in the ranking based on the Custora study?
Well, not too high, as it turns out. For all the fuss made over social media, customers visiting from these sites can actually represent relatively low lifetime customer value for e-commerce.
In fact, Facebook visitors represented only 1 percent above average customer lifetime value for e-commerce merchants. Worse yet, the lifetime value of customers acquired through Twitter was 23 percent below average.
Conclusions
So does this mean social media marketing has no value to e-commerce businesses at all? Gary Shouldis of 3 Bug Media doesn’t think so:
No, it’s just that marketing to people on social media is usually a top of the conversion funnel activity while search and PPC customers are usually at the end of that conversion funnel, with wallet in hand. Understanding where potential customers are in the buying cycle is important when creating your marketing plan.
Using Google Analytics tools, Custora conducted the study by looking at 85 retailers and tracked about 72 million customers who were making purchases online.
Image: Custora
