Guest posts » How to Improve LTV in eCommerce through Facebook Ads

How to Improve LTV in eCommerce through Facebook Ads

Customer lifetime value (LTV) depicts the total revenue a business can gain from a customer during their lifetime. High LTV indicates product-market fit, customer satisfaction, and brand loyalty.

No wonder, LTV is the most crucial eCommerce metric that outweighs all other metrics, including visitors, CTRs, bounce rates, and conversion rates.

Facebook is the largest social networking platform, with 2.96 billion active users. Facebook ads are paid posts that allow businesses to promote their products.

With Facebook ads, eCommerce businesses can get more visibility and reach the target audience. This can help them optimize LTV, thereby ensuring steady long-term growth. 

In this post, we will share the best tips to help eCommerce businesses improve their LTV through Facebook ads.

#1: Invest in Hyper-Targeted Ads

Audience segmentation is a common yet vital marketing practice. It involves dividing the audience into several groups based on gender, age, location, interests, and more. This helps eCommerce businesses tailor their marketing efforts for the target audience.

Hyper-targeting is a marketing tactic that uses audience segmentation data to identify and deliver relevant messages to the target audience. 

With hyper-targeted Facebook ads, eCommerce businesses can gain better value for money. They can reach customers with high lifetime value and generate recurring revenue. Besides, they can target prospects that can become loyal customers. 

Here are a few tips to consider.

Leverage Customer Data. Customer data, such as online purchasing behavior, demographics, and more, is an asset for eCommerce businesses. With accurate data, they can optimize marketing strategies and provide personalized customer experiences. 

Reports reveal that 56% of customers desire personalized buying experiences. So, data can prove helpful in improving LTV. The question is—how to collect accurate customer data? There a multiple customer service softwares for this purpose. For example, customer service software like Hiver that helps businesses make data-driven decisions.

The software enables companies to collect customer feedback via customer satisfaction (CSAT) surveys. Creating and sharing relevant surveys can help businesses gauge customer experiences and needs.

Embrace Cross-Selling and Upselling. Cross-selling encourages customers to buy complementary products. On the other hand, upselling invites them to buy a higher-end version of the current choice. CS-Cart is an excellent multi-vendor marketplace platform. Besides providing an online marketplace for multiple vendors to sell, this tool has a cross-selling and upselling features.

It can help eCommerce vendors to identify:

  • Bestselling products
  • Newest products
  • Most popular products
  • Recently viewed products 
  • Similar and featured products
  • Recommended products

This can help eCommerce businesses sell effectively

What’s more? Facebook ads created using this information can help increase the average bill and customer lifetime value.

#2: Use the Most Suitable Facebook Ad Format

Facebook offers an array of ad formats to choose from. Each ad format allows eCommerce businesses to highlight their products and services. They can opt for the best ad format that meets business goals. 

Here are a few Facebook ad formats that can help improve LTV.

Image Ads. This is the most basic yet powerful ad format. It allows businesses to post a single image to promote their services and products. They can use high-quality imagery to increase the chances of conversions.

Check out how Halara, an athleisure wear brand, leveraged image ads to increase its reach. The brand witnessed a 1.7X more target audience reach and a 1.9X boost in impressions.

Video Ads. This ad format allows businesses to post videos to promote their brand and services. This format can be a great fit to showcase product demos and tutorials. Check out how AppsVillage used video ads to increase brand awareness. This campaign helped them manage their spending on demographic. Besides, it encouraged their target audience to sign up.

Here are the results of this video ad campaign. 

  • 5.8-point higher campaign awareness 
  • 6.7-points higher ad recall with broad targeting
  • 1.5-points higher familiarity

Carousel Ads. This ad format helps businesses showcase up to ten videos or images. It offers the provision to add a unique headline, link, and description for each video. This format can be helpful when a brand wants to highlight a series of products. Notice the carousel ad by Chi Chi London. This campaign helped them achieve a 40% increase in sales.

Pro Tip: Run multiple low-budget Facebook ad campaigns leveraging different ad formats. Showcase your business’s unique value proposition (USP) to make the ad more effective.

When it comes to eCommerce, there could be various USPs like pricing, order fulfillment, customer care, and others.

For instance, highlight speedy eCommerce order fulfilment can be a strong USP for an online store’s Facebook ad. According to McKinsey, quick order fulfilment enhances customer experience. 

So, a well-crafted ad featuring this USP can improve the chances of conversions. This can help businesses drive revenue and build customer loyalty, thereby achieving high LTV.

#3:  Leverage Facebook Features for Ensuring Improved Visibility

Facebook has several brand safety control features. They can help prevent your ads from appearing with inappropriate content. Besides, you can leverage these features to boost your visibility and reach. Here are a few helpful features:

Manual Placements: This feature enables businesses to improve the placement of their ads. For instance, they can select relevant video feeds, stories, marketplace, Facebook right column, and more. This can help increase reach and recurring revenue, thereby improving LTV.

Block Lists. This helps businesses to block places where they do not want their ad to appear. They only need to upload a list of URLs for blocking. 

Topic Exclusions for In-Stream Videos. This enables businesses to exclude specific topics where they do not want their in-stream video ad to appear. For instance, they can choose politics, news, gaming, and other irrelevant spaces.  

Inventory Filter. This allows businesses to control the sensitivity of the content in which their ads appear.

The inventory filter lets businesses choose from:

  • Standard Inventory: This excludes sensitive content, thereby providing a balanced reach.
  • Limited Inventory: This excludes moderate and sensitive content. This can lower reach.
  • Full Inventory: This includes eligible content, thereby providing maximum reach.

Pro Tip: Use the full inventory filter to increase the chances of repeated purchases and enhance LTV.

Summing Up

Facebook is more than a social networking platform. A HubSpot poll states that 51% of respondents use Facebook to research products. 

What’s more? Reports reveal that this platform’s potential advertising reach is around 2.11 billion.
So, leverage the shared tactics and tools to create engaging Facebook Ads. They can help you reach the target audience, improve conversions, and tweak LTV to ensure long-term success.

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