As an eCommerce brand, your digital marketing tactics likely include targeting to both hot audiences (those who have engaged with your brand in ways that make them likely to purchase—typically referred to as retargeting) and cold audiences (those who have never heard of your brand before but fit your ideal customer persona).
A hot audience has presumably visited your website, is familiar with your brand, and interested in your product (or may have purchased from you before). Because of this, they should generate a strong return on investment (ROI).
A cold audience, on the other hand, has to be nurtured carefully before they reach this stage. Unless there’s an external factor that makes them convert quickly (think a Black Friday sale) they’ll typically show a low ROI until they’re familiar with your brand.
When comparing the ROI of cold and hot audiences (or when facing a budget crunch) clients sometimes ask us if we can turn off the cold audiences and focus all of the marketing budget into the hot audience to increase revenue. In some cases—such as when a budget is very small—this can be done, but in most cases we advise against it. Here’s why turning off your cold audiences is a bad idea:
Digital marketing audiences work in a funnel system. Cold audiences, who are gaining brand awareness, exist at the top of the funnel. Those who have interacted with your brand’s social platforms or website but are still in the “consideration” phase fall below that. Then comes those who are ready to make their first purchase. They’re followed by those who are repeat purchasers and brand advocates (ready to shout your brand’s name from the rooftops, or maybe just tweet about it). Here’s a basic example of this kind of marketing funnel. Don’t judge, I’m not the designer on the team.
If any of these sections are not nurtured, it will narrow the number of people who fall into the section directly below. Because the cold section is the largest, turning off or restricting your marketing here will choke the rest of the funnel. Without cold audiences, your advertising is speaking only to those who are already familiar with your brand. In the long-term this can prevent your consumer base from expanding and ultimately stunt your eCommerce growth.
Although you may not see immediate ROI from cold audiences, they’re feeding the ROI that you do see from hot audiences. Like chocolate and peanut butter, they exist together in harmony. Turn cold audiences off, and you’ll see the effect all the way down the funnel.
Instead, treat your cold audiences like they’re your new best friend. Show them videos of your product, customer reviews, awards you’ve won, and press you’ve received. Tell them why they should take the time to visit your website, follow you on social or sign up for your email. These tactics will help them stick and travel all the way down the marketing funnel.
Have more questions? Wondering how to convert your cold audiences to hot, or what to do with consumers who have already purchased? Book a free consultation with us today at hello@makadigital.com, or enter your info below to receive our guide of 17+ actionable promotions you can implement to increase your brand’s revenue and profit margins (no discounts needed!).
