Performance marketing promises results, but how can you get maximum mileage from your spend? Whether you’re paying for clicks, traffic, or conversions, every retailer needs to consider how to get the best return on their investment (ROI) possible.
“One significant challenge,” says Tom Kaeding, Chief Financial Officer at Wunderkind, “is that on popular channels such as Google and Facebook, sponsored content is saturated and reaching max inventory. It’s more expensive with fewer returns, as you’re repeatedly targeting the same audience.”
Luckily, paid advertising through third-party channels is just one performance marketing strategy. Let’s explore five other successful performance marketing strategies to maximize ROI, banish wasted dollars, and help you get ahead of the competition.
Successful performance marketing strategies
1. Email marketing
Did you know that the majority of U.S. consumers (54%) find out about brand deals through email? It’s the most preferred channel of brand communication.
Email marketing continues to be a cost-effective and efficient strategy for engaging with audiences, nurturing leads, and driving conversions. By building a quality first-party data list, retailers can directly communicate with and strategically nurture their target audience down the funnel with announcements, sales, and timely promotions.
Through segmenting, A/B testing and regularly analyzing campaign performance metrics (such as open rates, click-through rates, and conversion rates), marketers can refine the emails they send (and who they send them to) to maximize revenue.
One successful performance marketing strategy template is Too Faced’s abandoned cart email, offering customers 20% off, free shipping on orders over $50, and buy-now-pay-later options. This email could be triggered after a customer browsed Too Faced’s mascara but bounced without purchasing, or maybe they purchased Too Faced products three months ago, and it’s potentially time to replenish. Emails like these can also be used as an excellent post-conversion marketing tactic to encourage repeat purchases and loyalty.
2. Text message marketing
Text marketing (also known as SMS marketing) offers a direct and immediate way to reach customers. With high open rates and quick response times, text marketing can be a powerful tool for driving conversions.
Segment your list based on customer preferences or behaviors in order to send messages that provide value and incentivize action. For example, texts can be used to reach a customer after they’ve abandoned their cart, or to let them know a product they’ve been browsing is back in stock.
Building your own list of first-party data will help you reach customers with timely messages when it matters most, so you can generate engagement and maximize ROI. In fact, it’s believed that you can expect to see a five-times return on your investment when running a strategic text marketing campaign tied to an offer or discount.
3. High-impact ads
75% of consumers think that digital publishers don’t respect their online experience—shocking, right? Don’t let customers fall out with your brand over a poor ads campaign.
High-impact ads are visually captivating and attention-grabbing advertisements that create an impression on viewers. The best part? They’re only deployed after the user has finished viewing the content they came for, so they’re much more likely to engage with your ad.
An example of a high-impact, post-content ad includes this tap-to-map feature that guides users to the nearest Popeyes restaurant. The ad drives both brand awareness and conversion—a great strategy to maximize ROI.
Invest in compelling visuals, strong copywriting, and creative storytelling to create ads that resonate with your target audience. Utilize engaging functionalities and formats such as videos, gamified ads, or location targeting, to capture viewers’ attention and drive engagement. In turn, this can help increase brand visibility, generate leads, and achieve higher conversion rates, thereby maximizing ROI.
4. Sponsored content
Sponsored content might include collaborations with publishers or influencers to create valuable and relevant content that aligns with your brand. This form of native advertising integrates promotional messages into the content, whether it’s an article or a TikTok.
Choose publishers or influencers whose audience matches your target market, ensuring the content is authentic and adds value for the readers or viewers.
When you’ve paid for clicks or traffic, you want to ensure that you’re getting the most out of the customers who are sent to your site. Invest in your owned channels (first-party data and customer identification), so when you drive users back to your website, you can follow up and retarget them through your other marketing channels, like email and text, to close the sale.
“Evaluating the best performance marketing strategies to invest in always comes back to your return,” Kaeding says. “But, equally, metrics such as lifetime value and engagement rates matter. Be mindful of whether you’re maximizing the efficiency of your spend.”
By leveraging sponsored content, businesses can tap into established, relevant communities, generate brand awareness, and drive conversions, resulting in a higher ROI.
5. Website conversion
Performance marketing tip: Your website is your strongest channel.
Yes, you heard us! The most poignant driver of brand perception is the all-important brand website (46%) followed by brand-owned channels (27%).
Don’t forget about your website in a rush to find new streams of revenue. Capturing first-party data on your site will unlock a new performance marketing channel that’s scalable and doesn’t involve borrowing data through third-party cookies.
For example, as part of your performance marketing strategy, a customer might be driven to your website from sponsored content. You’ve invested money in gaining a certain number of clicks from this content, but if that customer reaches your site and then exits, you’re leaving money on the table. Through identifying your web traffic, you can capture your audience’s contact information to send tailored marketing communications that will nurture them down the funnel to purchase.
4 performance marketing KPIs you should measure
1. Leads
Leads refer to potential customers who have expressed interest in your products or services by providing their contact information. In performance marketing, measuring the number of leads generated helps evaluate the effectiveness of marketing campaigns in capturing the attention of the target audience. Tracking leads allows you to assess the success of your marketing efforts in terms of attracting potential customers and expanding your customer base.
2. Page Views (PV)
Page views represent the number of times a particular web page has been viewed by users. In performance marketing, tracking page views can help determine the effectiveness of marketing strategies in driving traffic to your website. Analyzing page views can identify popular pages or content that resonate with your audience, allowing you to optimize your marketing efforts accordingly.
3. Conversion Rate (CR)
Conversion rate is the percentage of website visitors who take a desired action, such as making a purchase, filling out a form, or subscribing to a newsletter. Monitoring and optimizing conversion rates can help identify areas where improvements can be made in the marketing funnel, such as optimizing landing pages, calls-to-action, or targeting specific audience segments.
4. Customer Lifetime Value (CLV)
Customer lifetime value is the predicted net profit attributed to a customer throughout their relationship with your business. It takes into account the revenue generated from repeat purchases, upsells, cross-sells, and customer loyalty. It’s an essential metric in performance marketing as it helps assess the long-term value and profitability of acquired customers.
Your website is your superpower
Your website is a premiere opportunity to capture first-party data and build your own performance marketing channel.
“It’s important to build your own lists,” Kaeding explains. “This way, you can engage and interact with customers through a multitude of channels, without increased pricing dynamics. The larger your lists are, the better returns you will see. If you can identify the people who are interacting with you the most and consistently message them—that’s the future of marketing.”
Whatever performance marketing channel you choose to invest in, ensure you always lead the customer back to your site to convert. Build your own lists by capturing their email or phone number to send them tailored messages, whether that’s to generate loyalty or encourage a first-time purchase. That’s how you’ll maximize ROI.
Want to learn more about getting the most bang for your buck from performance marketing? Download the Marketer’s Guide to the New Performance Marketing Era.