Do you give up? Go back to the drawing board? No. The issue can stem from many problems including a product with poor retention, a free trial that doesn’t convert well, and an influx of website visitors from low-quality sources. One way to combat this issue is to use Facebook Lookalike Audience of your customers with the highest lifetime value.
Customer lifetime value is a prediction of the net profit attributed to the future relationship with a customer. The better your product’s retention, the higher your customer lifetime value. Your best customers are the ones with the highest lifetime value. However, that’s not always true.
You need to keep an eye out for dormant customers, especially if you have a SaaS company. You’d be surprised at the number of customers paying a subscription fee, but not using your product. So, segment your customer base by last use of your product, then based on their customer lifetime value. This will leave you with your most valuable customers.
Wouldn’t it be nice if you could get in touch with more potential valuable customers? With Facebook Lookalike Audiences you can. Take the emails from your most valuable customers and upload them into Facebook using Customer File:
For Facebook Lookalike Audiences, you want to start off at 1%, then gradually work your way up to 10% if needed. 1% translates to the audience with the closest similarities to your uploaded list of customers, and 10% has the least amount of similarities. However, 10% includes a far bigger audience.
If the customer list you upload is small, the return audience may not be the best because Facebook might need more data. I wouldn’t use this tactic unless you have over 100 customers in your highest LTV segment.
If your Facebook Lookalike Audience of your customers with highest LTV performs well, then try using a list of customers with a worse LTV. Continue working your way down until you find an LTV that doesn’t convert well for lookalike audiences. This should give you a good size audience to target.
When testing Facebook ad copy on your lookalike audience, observe if they respond to different pain points than when you have more general targeting. Maybe your best customer purchase to save time, and your worse customer purchase to join a community. If you can find out the primary pain point of your best customers, then you can better iterate your copy across landing pages.
Using a Facebook Lookalike Audience to target your best customers can give you an easy ROI win. You might have to dive into SQL or Excel to find your seed list, but afterward, you just need to know how to create a Facebook Ad to implement this tactic. If you already have a large customer base, then this should be one of the tactics you implement first.
Growth Marketer |
Forbes Top 12 Innovative Founders |
CEO at BAMF