Organic Search Customers Provide The Most Value To Retailers

Do you know where your best customers came from?  How did they originally find you online?

Not all customers are created equal, and the same goes for channels that drive potential customers to your business.

According to a recent study by Custora, a customer acquisition platform for e-commerce, customers that come from organic search have a 54% higher Customer Lifetime Value (CLV) than the average.

What is Customer Lifetime Value?

Customer Lifetime Value, or CLV, is simply calculating the potential lifetime value of a customer for your business.  Instead of calculating on a one-off purchase, you calculate how much and how often a given customer will buy from you over the course of their relationship with you.

When it comes to where the most valuable customers come from for online retailers, organic search seems to be the clear winner.  Google Analytics tracking was used for 85 U.S. retailers, and tracked 72 million customers in determining the results.

Customer lifetime value from social media and organic search survey

PPC and Email Tops Social

According to the study, Pay Per Click advertising (PPC) and email marketing were second and third behind organic search when it came to determining the most valuable customers.

So what about social media?  To all of the social media faithful touting that email marketing is dead (along with SEO), social media is at the bottom of the pile, right behind banner ad displays.  Yes, I said banner ads.

Facebook was a paltry 1% above average when it came to CLV for e-commerce retailers, which was in a dead heat with banner ads, while Twitter tanked with a -23% below average CLV score.

So is social media not worth it?  No, it's just that marketing to people on social media is usually a top of the conversion funnel activity while search and PPC customers are usually at the end of that conversion funnel, with wallet in hand.  Understanding where potential customers are in the buying cycle is important when creating your marketing plan.

Liftime value of a customer is highest with organic search and ppc

Email is back

While email marketing took a hit in recent years due to the rise in popularity of social media, this study validates what most internet marketers already know, that there is a lot of money to be made with a good email list.

I actually shouldn't say it's back, it never left the quiver of good internet marketers.

What do you think?

Search engine optimization, and search engine marketing in general, seem to be tried and true ways to drive conversions for retailers.  Social media definitely has it's place, but the conversion process doesn't seem as direct as other online channels.

image credit-Custora

 

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Gary

CEO at 3Bug Media
Gary Shouldis is the founder of 3Bug Media, a web marketing company that helps businesses create 360 Marketing Strategies to dominate their market. His blog is read by over 20 thousand small business owners a month and has been featured in the N.Y. Times Small Business, Business Insider and Yahoo Small Business.
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