Targeting the Right Audience in E-commerce: Proven Strategies to Maximize ROI

Summary

Special Ops Podcast Episode Summary
Episode Title: Targeting the Right Audience in E-commerce: Proven Strategies to Maximize ROI
Release Date: January 7, 2025
Hosts: Emma Rainville & Travis Gomez
Description: In this episode of Special Ops, Emma Rainville and Travis Gomez delve into the critical strategies for identifying and targeting the right audience in e-commerce to maximize return on investment (ROI). Drawing from their extensive experience with Shockwave Solutions, they provide actionable insights to help entrepreneurs refine their marketing efforts, increase profitability, and build efficient leadership teams.

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1. Introduction to Audience Targeting in E-commerce

Emma kicks off the discussion by emphasizing the common pitfall many marketers face: spending significant advertising budgets without ensuring they’re targeting the right audience. She questions, “Are they really targeting the right audience?” [00:04] This sets the stage for a deep dive into effective audience targeting strategies.

2. Beyond Basic Demographics: Building Comprehensive Customer Avatars

Travis responds by explaining the concept of building a customer avatar, which goes beyond mere demographics [00:57]. He stresses the importance of understanding not just who the customers are (age, number of children, etc.) but also their pain points and social-emotional needs [01:22].

Notable Quote:
Travis says, “I want to know what the customer that buys from us has the highest CLTV, the lowest refund and complaint rate, and the highest success rate on our product” [01:34].

3. Focusing on High-Value Customers

They discuss the importance of identifying customers who bring the most profit. Travis elaborates on refining demographics by targeting those who contribute to the highest customer lifetime value (CLTV) and maintain low refund rates [01:45]. This focus allows businesses to allocate resources more efficiently, leading to higher profits.

4. Scaling Across Multiple Mechanisms

Travis introduces the idea of scaling products across different mechanisms to reach multiple demographics. Using the example of a weight loss product, he explains how the same product can appeal to different groups by addressing distinct mechanisms, such as hormonal imbalance for premenopausal women versus time constraints for busy moms [02:49 – 03:15].

Notable Quote:
Travis states, “If the product works, the product works,” highlighting the flexibility in targeting multiple audiences with the same product [03:15].

5. Casting a Wide Net and Refining Quickly

Emma and Travis agree on starting with a broad audience persona and then aggressively fine-tuning it based on performance data. Travis shares his strategy of initially casting a wide net and then narrowing it down by analyzing which segments yield the best results [04:08 – 06:12].

Notable Quote:
Travis humorously notes, “Nobody bought in Wyoming in the past day. One day. But they clicked eight times. That cost me 13 cents a click. Get rid of Wyoming” [06:21].

6. Creating Anti-Avatars

A crucial part of their strategy involves defining who not to target—creating "anti-avatars." Travis explains that by understanding and delineating the undesired customer profiles, businesses can refine their marketing messages to repel these individuals and attract the ideal audience [06:36 – 07:09].

Notable Quote:
Travis reveals his unique terminology, “I call it the Donald Trump,” referring to the anti-avatar, to illustrate clients he wants to exclude [07:09].

7. Tactical Approaches to Audience Targeting

They delve into tactical methods for audience targeting, emphasizing the role of data analysis. Travis outlines how his team gathers extensive customer information through intentional tools and engagement strategies, such as quizzes and tailored content, to build a detailed understanding of their audience [07:48 – 09:15].

Notable Quote:
Travis shares, “Understanding where you are socioeconomically makes it easy for us to make sure that ingredients fall within your means and your budget” [08:30].

8. Leveraging Community and Social Media Groups

Travis advocates for creating dedicated social media groups for each product to foster community engagement and gain deeper insights into customer behaviors and preferences [09:23 – 11:04]. These groups serve as a valuable resource for understanding the nuances of the target audience through everyday interactions and discussions.

Notable Quote:
Travis explains, “If you really want to know who your audience is, create a place for them to network and be part of a community” [09:37].

9. Avoiding the Wrong Customers: Chargebacks and Profitability

A significant portion of the episode focuses on the pitfalls of targeting the wrong audience, particularly in relation to chargebacks and overall profitability. Travis discusses strategies to minimize chargebacks by ensuring clarity in billing descriptors and improving customer service responsiveness [12:10 – 13:05].

Notable Quote:
Travis underscores the importance of a seamless customer experience: “If it's a good product and I have a good checkout page and I have good marketing and I'm not scamming people, I want to understand why they're charging back” [12:41].

10. Strategies for Product-Based vs. Service-Based Businesses

Travis differentiates between product-based and service-based businesses, highlighting that the latter faces greater risks when attracting the wrong customers. In service-based operations, the wrong audience can affect staff morale, vendor relationships, and overall business sustainability [14:04 – 18:39].

Notable Quote:
Travis shares a real-world example: “I was like, what dude? Like we'll just take 30k. He's like, how blessed are we that we get to tell her to take her 30k and blow it out of her ass” [18:21].

11. Actionable Steps for Listeners

To conclude, Emma and Travis provide practical action steps for entrepreneurs to implement the discussed strategies:

1. Review Customer Avatars: Regularly assess and refine your customer profiles based on data and feedback.
2. Engage with Customer Service and Data Teams: Ensure alignment between marketing strategies and customer insights.
3. Utilize Community Groups: Create and manage social media groups to foster community and gather deeper audience insights.
4. Define Anti-Avatars: Clearly outline who you do not want as customers to streamline your targeting efforts.
5. Leverage Free Resources: Access their comprehensive 140-page guide on audience targeting available in the members' area [20:14].

Notable Quote:
Travis encourages listeners to “give [the guide] to your data and market team and tear through it” [20:14].

12. Conclusion

Emma wraps up the episode by thanking listeners and reinforcing the value of targeting the right audience to drive business success. She invites listeners to download the free playbook from their website and stay tuned for future episodes [20:30].

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Key Takeaways:

• Deep Audience Understanding: Go beyond basic demographics to understand customers' emotional needs and pain points.
• High-Value Focus: Prioritize customers with high CLTV and low churn to maximize profitability.
• Dynamic Targeting: Start with a broad audience and refine quickly based on performance data.
• Community Engagement: Use social media groups to build community and gain valuable audience insights.
• Avoiding Pitfalls: Implement strategies to minimize chargebacks and avoid attracting unprofitable customers.
• Tailored Strategies: Differentiate approaches for product-based and service-based businesses to ensure sustainable growth.

For a more detailed exploration of these strategies, listeners are encouraged to download the free playbook available at Special Ops Podcast and subscribe on Apple, Spotify, or YouTube.

Transcript

[A]

All right, so today we're diving into the importance of targeting the right audience in E commerce businesses. Right. So this is one of the things where I feel like a lot of marketers, they're spending money on their marketing, they're spending their advertising budget, but are they really targeting the right audience? And so how do we figure that out? How do we help them dive into that? So they're spending their dollars appropriately to really get the most they can out of their campaigns and their marketing.

[B]

Yeah.

[A]

So with that. So let's kick things off a little bit with some foundations of any successful marketing strategy. How entrepreneurs can go beyond just the basic demographics of what they're doing for targeting their audiences. You know, click the little buttons in Facebook ads and go, it's not that simple. Right. So when you. When you're working with our clients and we're talking about how do we really dial into the audience, what do we. How do you go about really looking at specifics of what that audience really looks like?

[B]

Right, sure. I think what you're asking is how do we build an avatar?

[A]

Yes, exactly.

[B]

That's a really good question. And as per always, I'm gonna have a really complicated answer. So typically speaking, our clients avatar comes from really diving into and knowing the client's current purchaser.

[A]

Okay. Yeah.

[B]

What do they look like? How many kids do they have? Your typical demographics?

[A]

Pain points or social emotional needs.

[B]

Right.

[A]

Okay.

[B]

But I go a little bit deeper.

[A]

Okay.

[B]

Because I want to know what the customer that buys from us has. The highest cltv. The lowest refund and complaint rate.

[A]

Yeah.

[B]

And the highest success rate on our product. And that's where I refine my demographic. And that takes, by the way, a long time and a lot of sales to do, because you come up with your first demographic and you try really, really hard to find those people. But when you find the people that bring you the most money and filter your demographic down to that, there's a lot of beautiful elements to what can happen in your business as far as deploying resources and earnings, high profits. Right, yeah. But then I'll go a little bit further because most products, if you're. If you're taking the product and you're selling it at full capacity, you can almost always find another demographic and another mech using another mechanism, another demographic, by using another mechanism to the product. For example, if you're selling weight loss, and the mechanism to selling the weight loss is hormonal imbalance. Because you're premenopausal. Right.

[A]

Not me. But yeah.

[B]

Undone. Because you're premenopausal. The other side may be I'm a busy mom of young kids working full time, and I don't have time.

[A]

Right.

[B]

Same product, but speaks in a different.

[A]

Way to each of those demographics or.

[B]

Right, right, right, right. So I need to understand the. The demographic to each mechanism within my product. And I generally have. When I work on a product that does well, I generally scale it across multiple mechanisms because if the product works, the product works. And I mean, and I do that by means of, like, quiz funnels and such. But to get back to your question, we dive into the specifics around the people who bring us the most profits, the highest cltv, most profits. And that's what we try and focus really, really hard for when we're trying to. Which is what we focus really hard on when we're trying to understand our demographic. And one of the things that I do that a lot of people, by the way, disagree with.

[A]

Okay.

[B]

I like to cast a very wide net when I launch a product.

[A]

Okay.

[B]

I rail that net in very quickly. But I definitely like to see who's.

[A]

Interested as you start seeing responses to that. Okay, so. So then you. How much. How much data do you need? How many sales do you need? How many clicks do you need for you to be able to drill into that customer to isolate them, that avatar?

[B]

That's a great question. Kind of hard for me to. Every product's different, and it depends on how many people from the same area buy, you know, the same category of demographic buy over a short period of time. So it's really tough to say split tests. They say after 100 sales and one or the other, you can call the split test. As long as it happens in 30 days. Right. It's just statistical significance. But when it comes to identifying our demographic, it's an art.

[A]

Yeah.

[B]

It's not just. There's no like, set number. Sometimes I can do it in 10 sales. I've absolutely done it in 10 sales. Most of the time. Most of the time about. Well, we did the one weight loss product. Took me 10 sales to know what I needed to know. It really did. Because we, we.

[A]

But most of the time.

[B]

Most of the time, a thousand sales. I have a decent idea. 10,000 sales. I. I know, I know. I've got it. But then I may play with the mechanism and it changes. Right. So. But I. I highly recommend focusing and getting out everything you can get out of that first demographic. Pulling in every scent you can before you go doing anything else, and then increasing the aov increasing the member take rate, whatever your specifics are to your product before you go branching out elsewhere, you get really, really granular and just really suck every scent out of it.

[A]

So start wide with like a basic Persona of what you think it is.

[B]

That's how I feel.

[A]

And then aggressively fine tune that.

[B]

Aggressively fine tune that. Aggressively fine to that. Nobody bought in Wyoming in the past day. One day. But they clicked eight times. That cost me 13 cents a click. Get rid of Wyoming.

[A]

Okay.

[B]

Don't, don't, don't come at me about Wyoming. It was just a random, it was a random reference.

[A]

But yeah, do also create like an anti avatar so who you want and who you absolutely do not want.

[B]

I. One of the first things that I do is create the anti avatar. One of the very first things that I do.

[A]

Okay.

[B]

And all of my marketing and messaging is designed to repel them and attract the person I want to attract. Just because I wrote it for that person though, doesn't mean that it's the person. So I've got to be, I've got to be intentful about paying attention to my data.

[A]

Yeah.

[B]

But yes, always, always, always. I call it the Donald Trump. Yeah. And call. You didn't know that? No, been calling it that for years. I call it the Donald Trump and it's the person I want to stay away from. Don't come at me about Donald Trump either. It's just a fun little thing I do with customer service.

[A]

But yeah, so, okay, so okay, but tactically, like how do you, is there like an actual process that you go through? Is there a checklist of questions? Is there, you know, an AI prompt that you use? Like what's, what's your legit like tactically.

[B]

How do you actually do tactically? I have a Richard Parkin. Richard Parkin is my data guy. So my data guy looks at all of the different data sets. What are their age range? How many children do they have? We use a lot of intentional tools to get their information, whether that be, hey, checking in. Let's say it's a weight loss product. Hey, Travis, checking in. See you bought this three months ago. How much weight have you lost? Tell me a little bit about yourself. I love to design some, some recipes just for you. By the way. These recipes are already done, you know? You know what I mean? Like there's just like a bunch of different sets. Do you have kids in the house? If they have kids in the house, some of the recipes gonna have kid friendly food. Right. Things that you can pre pair with your Kids, some advice on how to teach your kids how to eat healthy now so they don't have to deal with weight loss later. So I'm asking them questions for their benefit, but also for mine. So I'm essentially paying them for their information. How many children are in your house do you work? Nine to five? I, you know, do you get. Are you sitting down at a desk all day? Are you walking around? How much money do you earn? You know, stuff like that. But we ask in a way. I'm not asking them how much money to do I earn. I say we create shopping lists for our customers. Understanding where you are socioeconomically makes it easy for us to make sure that ingredients fall within your means and your budget. Here's your. What's your income? Right.

[A]

And so a logical reason why you're putting that together for them.

[B]

Right? There's a logical reason reason that benefits them, not me.

[A]

Right.

[B]

But this isn't all done in a day. This is done over time in a few different segments. I'll have you know we always have Facebook groups. Always make a group for your product. Every product should have a group. Every product should have a group. Every product should have a group. Every product should have a group.

[A]

So you're saying every product should have a group.

[B]

Every product should have a group. And I don't. And your demographic may not be on Facebook. They may be someplace else. You have a membership area, whatever it is, there should be a way. People like to build community and network. Even though no one likes to get off their phones and get out of their house anymore, they want to do it through social media, but they still want to be part of something. Community and network is important. And if you really want to know who your audience is, create a place for them to network and be part of a community. And then have someone go and write, like, write little synopsis is up on what happened. Have people go in and generate conversation. We had a group. It's a small business owners group. And I'll go in and I will just say some of the random stuff just to get. Just to get people chatting. So I'll do something like, I don't have a cat, by the way, but I literally, I literally posted this the other day. I took my cat for a walk around the block. Want to grab people's attention. Who walks their cat. So I put, hey, guys, what's up? This Tuesday morning, I took my cat around the block for a walk and started thinking about all the things that we could do in this community to make it Better. Here's the three things I thought of. Can you tell me what you did today? I didn't ask them for their opinion on what to do in the group, but they're gonna share it with me anyway. But what else are they gonna share with me? What they did today.

[A]

Right.

[B]

And so that doesn't seem like a big deal to know, does it?

[A]

But it gives you an insight into exactly who they are.

[B]

It gives me an insight into who they are. And so did they watch tv? Did they go to work and come home? Did they go get a massage? Did a whole bunch of people do self care stuff?

[A]

Right, right, right.

[B]

Did a whole bunch of people go hang out with their kids, they watch a movie with their kids, they take their kids to the park? Did they pick their kids up from school? Did they have dinner with their family.

[A]

Soccer games, whatever they're doing?

[B]

Or did they read a book alone in a cafe? Who is my person?

[A]

Right.

[B]

And the more I can build, we eventually will name. We like our avatars, end up with a name, end up with lives in a two bedroom house with a son and a daughter, 5 and 9, husband left two years ago. Like we really, really get to know these people, but it's all statistical information that we've gotten over time by giving them free stuff to tell us all about them.

[A]

Right, right.

[B]

And that's how you truly find your right audience.

[A]

So I want to kind of switch now and talk a little bit about like we talked about who we're going towards and now I want to talk about like who we're staying away from and why do we stay away from these people. Like how do we identify them and how do we actually push the conversation away from them?

[B]

Sure, sure. Great question. So a lot of people think as long as I'm selling it's fine, but it's not. You want to understand a couple, a couple of demographics. One, I spend a lot of time on the people who charge back.

[A]

Yeah.

[B]

If it's a good product and I have a good checkout page and I have good marketing and I'm not scamming people. I want to understand why they're charging back.

[A]

Right.

[B]

So the first round is me getting my stuff, my house. Right. What does my house need to look like so that you don't feel like you need to call your bank? Yeah. Is my 1, 800 number on my billing descriptor?

[A]

Is there confusion?

[B]

Is there confusion in anything billing descriptor wise? I always work backwards from charging back all the way to the front. Is it. Did I say something in my marketing that confused them. Why didn't they call me? Are people answering the phone? Are they sitting on hold too long? I'll tell you what, I won't sit on hold for a minute and a half. I won't do it. I will not do it. I can literally open my chase up and in two clicks charge something back. I don't have to talk to anybody. I don't have to hold for anything.

[A]

Like TikTok reel for more than 10 seconds.

[B]

Literally, literally, Literally. But you know, this is, this is where we're at. So this is what you have to respond to. So is my house clean? And if my house is clean now, I want to understand the person who buys my product and charges it back and then I want to avoid them at all costs.

[A]

Right? You have to get your, you have.

[B]

To dial into that data. You have to dial into that data just like you did the other data just like you did who, who you want. You won't have as much as of it, but you don't need as much.

[A]

Right?

[B]

So let's talk about why you don't want to sell. Not only people who charge back, but people who aren't a good customer for you. So selling to the wrong people can be disastrous for your business. And the reason is, is the money's coming in, but it won't be profitable. You're probably paying out a little bit more on your bottom tier customer base, but it all works out in the wash. So who cares is what a lot of people think. The money's coming in. I can rob Peter to pay Paul is usually the idea. And so I'll just keep the money coming in. However, if you get rid of that bleeding, if you go and you get your bottom customer and you just selling to them, I'm going to tell you how in a second you're, you can literally increase your profit margin by anywhere from one to one and a half percent just by getting rid of your bottom tier customer.

[A]

So I love that we're talking about this from the perspective right now of like products.

[B]

But as I'm going to talk about, I'm going to talk about services, I'm going to talk about services. I'm absolutely going to go into that because that's a big, that's an even bigger deal. So right now we're talking about products for sure, but we're going to talk about service based business masterminds and communities in a second. So for, for product based businesses. So when I say product, I'm talking About physical and info. If I can get that bottom tier client customer and get rid of them, it's usually by the way going to be one affiliate on one traffic source or two affiliates on that same traffic source. So understanding what that customer, we've talked about this many times, understanding what that customer brings in. For a CL customer lifetime value over six months, that's when you want to start eliminating them if they're. Sometimes people will buy $60 worth of your product. It was a $60 CPA. Then you get to deliver. So you didn't make any money and they won't buy anything else from you. But then you track them down the line in your esp. And if you're, you're doing it right, you've got all your affiliate sales, you're selling other people's products, you're getting a CPA for those products. So that person only brought you 60 bucks here, but maybe they spent five grand here. We've seen this. And so this customer I want, they made me $5,000 over six months buying somebody else's product. I didn't even mail email. Yeah, I mailed an email. I didn't fill it, nothing. So I want to keep that. So it's important to truly understand before I go hacking people away what my CLTV over six months is now let's switch to services.

[A]

Yeah, okay.

[B]

Much, much bigger deal on services, masterminds and communities. If you bring the wrong person into your ecosphere, your staff will quit.

[A]

Right.

[B]

Your vendor relationships can be damaged, you may not get paid, your own business can be in trouble. You'll be miserable if you're miserable. We've worked with people. I don't like no one, not for long. But no one likes to be around me when I'm working with someone I don't like. Right. So how do we navigate through those channels and how do we make sure that we're only bring, bring on people that fit into our ecosphere is, is highly important. But now for masterminds, so much worse. You bring in one shit bag, one awful person to your mastermind, you can lose 10 people easy. We've seen that happen. We run multiple masterminds. We, we run multiple masterminds and we've seen that happen within, within them and this things. And I, Kim Islam, who is one of the owners of Driven, one of the masterminds I'm blessed enough to be COO of, he very early on was like, nope, tell her we, we're not taking our 30k. And I was like, what dude? Like we'll just take 30k. He's like, how blessed are we that we get to tell her to take her 30k and blow it out of her ass. She's not a fit. She's pissing people off. I don't want her back. Yeah, so true. So true. Look at the room he cultivated. A room where people have known each other for 10 years in two years time. And that's what it feels like. A driven and so making sure that you're not selling to the wrong people.

[A]

Because it costs you way more, way.

[B]

More than selling to the right people. Right. Then you'll earn off selling to the right people. So make sure that you're. That, that you're, you're doing that. Because additionally, like what we're paying to acquire the wrong customer is keeping us from scaling the right customer.

[A]

Yeah.

[B]

So targeting your audiences in a way that makes the most amount of sense.

[A]

Especially in a service based business. Right. Or agency type of business. Because your resources are not completely unlimited. Right. So being able to really focus and just the time, energy, emotional, all the burden and the cost of that burns so much. So. Absolutely, absolutely.

[B]

So action steps, review your customer avatar and talk to your customer service and your data team and make sure that your customer and your service, your customer service and your data team think that you're targeting the perfect, your perfect match as a customer. If you're a service based business, talk to the people. If it's not you, talk to the people providing the service. If you're in a mastermind, if you're running a mastermind or a community in any way, survey them. One of the questions that I recently asked one of our masterminds, one of our other masterminds was what are two qualities you appreciate that other members have? What are two qualities other members have that would keep you from renewing? Ooh, I was told not to send that.

[A]

No, that's good.

[B]

It was really good. Yeah, it was really good. It was really good feedback. And we got, we were probably going to get rid of about 10 people on a 611 person mastermind. And I'll save 30 renewals because I asked that question. Yeah, yeah.

[A]

So worth it.

[B]

And then finally in our members area, which is free, we actually have an entire guide. It's a manual. It's a beast. It's like 140 pages on targeting the right audience. So go ahead and grab that, give it to your data and market team and tear through it.

[A]

Yeah. Awesome. Well, thank you guys so much for joining us this week. And we look forward to catching you next time.