How to approach segmentation in your bottom-of-funnel campaigns, and how to compliment that with bid caps.
Last night I sat down and spent some time thinking about how I wanted to approach my account structure for BFCM. Do I do what I’ve always done, or do I try something new?
I already had a pretty good idea of where I wanted to go with prospecting, so I moved my focus to retargeting and immediately lost track. Usually, my approach to retargeting with larger budgets would be to segment by recency and add accompanying Bid Caps - something like this:
Add To Cart Retargeting DPA Campaign (Using $100 AOV as an example)
Add To Cart past 3 days - $150 BC
Add To Cart past 7 days ex. 3 days - $120 BC
Add To Cart past 14 days ex. 7 days - $100 BC
Add To Cart past 30 days ex. 14 days - $80 BC
Unfortunately, I’ve recently abandoned this tactic as bid caps with high segmentation of audiences seemed to taper off in performance this year with the changes to the platform because of iOS14.5+.So, I started thinking about the customer journey, and what segmentation would look like if it wasn’t just about recency within each audience.
Beyond that, I looked at average conversion rates in bottom-funnel metrics across all accounts. In general, what I’ve seen (and some friends I spoke to about this) is ~40% drop off between Add To Cart and Checkout Initiations.
Then it dawned on me - why am I treating all Add To Cart abandoners the same? With that large of an average gap between bottom-of-funnel metrics, there is clearly a difference in behaviour between the two. So I thought a little bit about ‘why’, and here’s where I netted out:
Those who added to the cart but didn’t initiate checkout
These people were fine with the product and price, added it to the cart and got cold feet. This could be for several reasons - messy UI, hidden fees, total with taxes, etc.
The user is likely still a purchaser with the right nudge.
Those who initiated checkout but didn’t purchase
These people saw the product's final cost and were fine with it, but once they were presented with the actual final cost of the order, they got cold feet.
One of the most common reasons for abandoning this part of the funnel is the final cost and, even more specifically, the shipping cost. With the right offer, you can get these users to forget about that final cost and convert.
Traditionally, my go-to was running a flat 10% off discount code in my Add To Cart abandoner campaign as a means of getting the fence-sitters over onto the side of conversion, and it’s worked reasonably well. That said, I am beginning to think this strategy might be better used with some adjustments.
Here’s how I am thinking I can pivot this to a structure so that it leans more heavily into acting as a response to user behaviour, with (admittedly terrible) example messaging:
Campaign 1: Add To Cart Abandoners excluding Checkout Initiated
Last 3 days - “Did you forget something in your cart?”
Last 7 days ex. last 3 days - “Use code MISSYOU10 for 10% off your order now”
Last 14 days ex. last 7 days - “Don’t forget to use code MISSYOU10 for 10% off your order now.”
BONUS*: Last 21 days ex. last 14 days - “Use code MISSYOU15 for 15% off your entire order now. Offer expires in one week.”
The bonus here is if you really want to ramp it up and have the margin to support it, increase your 10% discount to 15% as a final ‘hail mary’ before giving up on these users.
Campaign 2: Initiated Checkout excluding Purchasers
Last 3 days - “Your items are waiting for you!”
Last 7 days ex. last 3 days - “Use code FREESHIP for Free Shipping on your order”
Last 14 days ex. last 7 days - “Your code for Free Shipping is going to expire soon - don’t forget to use FREESHIP at checkout to unlock savings now!”
The general concept here is not to lead with the offer immediately but to provide the right offer at the right time. This structure will provide more flexibility in messaging and should provide a better user experience.
Of course, this isn’t an exact template, and every brand is different. Instead, consider this a conceptual exercise. Use the general concept and adapt it as needed in your own funnel. Also, definitely change the copy. Please, please don’t use that copy, lol.
Have fun with it. Experiment with your copy at each stage, and try different offers - maybe a discount code doesn’t make sense, but a small, free gift does. Test, test, test. Profit.