Primer of various online marketing and customer acquisitions strategies such as Search Engine Marketing (SEM), Affiliate Marketing, Lead Acquisition, Email Marketing, Retargeting, Social, Search Engine Optimisation (SEO), PR & Bloggers. Presented to London Business School MBA students on November 20th.

1. ONLINE CUSTOMER ACQUISITION STRATEGIES
PRIMER (FOR STARTUPS)
London Business School
November 2013
Kiyan Foroughi – CEO, Boticca

2. AGENDA
• Boticca Overview
• A Few Basics
• Paid Channels
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–
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Search Engine Marketing (SEM)
Affiliate Marketing
Lead Acquisition & Email Marketing
Retargeting
Social
• “Free” Channels
– Search Engine Optimization (SEO) & Content Marketing
– PR & Bloggers
• Other Things to Consider & Some More Tips
We won’t cover TV, Media and print/outdoor advertising as this primer is mostly for start-ups with more modest budgets.
#BoticcaLBS
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3. BOTICCA OVERVIEW
Boticca is the world’s luxury bazaar of
fashion accessories
350+ brands in 40+ countries and 11,000+
pieces available
Pieces shipped to 90+ countries each
month
500,000+ members with an average order
value of US$185
Staff of 20 based in London
Backed by MMC Ventures, ISAI, Digital
Garage and angel investors
#BoticcaLBS
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4. A FEW BASICS
Most online businesses live and die by their online customer acquisition strategies
You’ll need a formulaic, scalable acquisition strategy to be successful
Each business is different and so will your online acquisition mix
In the end, everything is governed by one relationship:
Cost Per Acquisition (CPA) versus Customer Lifetime Value (CLTV)
And the equation needs to look like this for a real, sustainable business:
CPA < CLTV
Your customer acquisition strategy/mix will also depend on your unit economics such as
Average Order Value (AOV) and margins
#BoticcaLBS
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5. PAID CHANNELS: SEARCH ENGINE MARKETING (SEM)
What is it?
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Google Adwords
Display Advertising
Video/Youtube Ads
What you need to measure
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CPCs, CTRs, Impressions, CPLs
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It’s immediate!
Fastest way to scale
Very measureable
Pros
Cons
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Dependency on Google
Can become very expensive
Large budgets required
Mistakes we made:
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Who does it work for
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Businesses who sell brand name or
commoditised products
Businesses with high AOVs and margins
Burned through lots of budget before
realizing it wasn’t for us
Too much Adwords optimization, not
enough onsite
TEST BUDGET: > £10,000 Per Month
#BoticcaLBS
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6. PAID CHANNELS: AFFILIATE MARKETING
What is it?
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Performance-based marketing that
rewards partner sites (affiliates) for
referring traffic and customers
What you need to measure
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CPCs, CTRs, Impressions, CPLs
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CPA-effective
Very measureable
Pros
Cons
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Affiliate recruitment time/resource
intensive
Takes a while to scale
Limits to how much it can be scaled
Technical integration
Mistakes we made:
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Who does it work for
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Businesses who can offer some margin
to partners
Underestimated how time consuming this
channel can be
Didn’t put enough budget aside to book and
schedule tenancies to push top affiliates
TEST BUDGET: > £3,000 Per Month
#BoticcaLBS
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7. PAID CHANNELS: LEAD & EMAIL MARKETING
What is it?
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Acquisition of leads (subscribers/emails)
and activation via regular email
marketing
What you need to measure
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CPLs, Activation Rates
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Ability to segment and send personalized
messages directly
Ability to retain customers
Ability to A/B test
Pros
–
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Cons
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Results are not immediate
Deliverability and renderability are key to
success
Mistakes we made:
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Drew conclusions from database sizes that
were too small (less than 50,000)
Got some emails from competitions (lower
quality)
Who does it work for
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Most online businesses that offer
constantly new products or services (not
so effective with content-led businesses)
TEST BUDGET: > £5,000 Per Month
(£1-3 per email)
#BoticcaLBS
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8. PAID CHANNELS: RETARGETING
What is it?
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Targeting users off-site when prior visits
didn’t result in a conversion to bring them
back on-site
What you need to measure
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CPCs, CTRs
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When optimised, is usually quite a CPAeffective channel
Can be personalised (should be)
Pros
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Cons
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Need traffic volume
Technical integration
When done poorly, it can look like
stalking
Who does it work for
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Most online businesses that where the
ultimate call to action is a sale or
conversion
Mistake we made:
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Used bigger retargeting specialists like
Criteo who offer no customization of
banners (looked ugly)
TEST BUDGET: > £2,000 Per Month
#BoticcaLBS
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9. PAID CHANNELS: SOCIAL (FOR START-UPS, IT’S NOT FREE)
What is it?
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Advertising and performance-based
marketing on social media platforms such
as Facebook, Twitter etc.
What you need to measure
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Member base and referral traffic
CPLs, CTRs
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Deep segmentation capabilities
Direct engagement with your users
SEO benefits as social signals are factored
into Google’s algorithms
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Generally an expensive and low conversion
channel with poor ROI channel
Pros
Cons
Who does it work for
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Content-heavy websites
Nobody in ecommerce for driving sales on a
CPA-basis (as far as I know!)
Mistakes we made:
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Thought we could use social media to drive
sales!
Spent time on networks which were popular
but didn’t have our customer demographics
TEST BUDGET: > £1,000 Per Month
#BoticcaLBS
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10. “FREE” CHANNELS: SEO & CONTENT MARKETING
What is it?
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Raising the visibility of your website to
appear in natural search rankings of
Google… I mean, search engines
What you need to measure
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Natural search traffic and conversion
Individual keyword rankings
Site performance/speed
Domain authority and backlinks quality
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Quality, targeted traffic
Content marketing can also help
PR/branding
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To be done well, requires technical resource
Time-consuming
Good content marketing campaigns are hit
or miss
At the mercy of Google and their constantly
changing algorithms
Pros
Cons
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Who does it work for
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Mistakes we made:
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Didn’t think it would take that long to scale
Didn’t put enough tech resource behind it
Releasing too many SEO-focused tech
changes at a time
Pretty much everybody
#BoticcaLBS
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11. “FREE” CHANNELS: PR & BLOGGERS
What is it?
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Spreading the word about your business via
articles in the press (online/print) and via
bloggers
What you need to measure
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Publications and bloggers that work/don’t
work
Time/effort vs. returns
Pros
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Elevates brand and trust which in turn has a
positive effect on the conversion rate of
other channels
High ROI
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Not easily replicable (PR)
Hard to measure ROI (PR)
Cons
Who does it work for
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Pretty much everybody but you constantly
need to have a story/hook with new
information (with press)
Mistakes we made:
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Focused too much on business press as
opposed to consumer press early on
Overestimated how much you can scale
blogger marketing
TEST BUDGET: >£1,000 (for bloggers)
#BoticcaLBS
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12. OTHER THINGS TO CONSIDER & SOME MORE TIPS
Don’t be afraid to test several channels and figure out what works for you
Don’t rely on one channel: have a mix
Data, data, data: Let the numbers be your guide
Depending on the channel mix, a good monthly test budget would be > £15,000-£20,000
Don’t forget to focus on the other fundamentals such as a strong, well-defined brand and a
flawless customer experience
And never forget: CPA < CLTV
#BoticcaLBS
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13. Thank you!
Questions?
kiyan@boticca.com
Slides available here: http://tiny.cc/BoticcaLBS