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Facebook Custom Audiences + Optimove = A Killer Retention Marketing Channel

Can retention marketers use Facebook Custom Audiences to improve conversion and customer retention? The obvious answer is: Sure, why not? However, the technicalities involved have severely limited the use of Facebook Custom Audiences (FCAs) in practice.

Optimove + Facebook = Killer Retention Marketing

The goal is to be able to automatically create and modify Custom Audience lists according to granular, behavior-based customer micro-segmentation. This is an important step forward in transitioning the use of paid online advertising from being exclusively used for customer acquisition to making it an effective and measurable channel for customer retention.

In this post, I will explore the challenges of using FCAs for retention marketing and discuss how, with the right approach and tools, you can make FCAs into a killer customer retention marketing channel.

What are Facebook Custom Audiences?

Just a few words for the uninitiated: FCAs are an advertising targeting system by which Facebook allows advertisers to target lists of specific Facebook users for particular pay-per-click or CPM campaigns. Advertisers match Facebook users using email addresses, phone numbers, Facebook user IDs or app user IDs. All you need to do is upload your customer list to Facebook and your ads will appear only for customers matched to your list.

What are the Challenges?

In theory, this is an awesome retention marketing channel: upload your customer lists and personalize your Facebook campaigns to existing customers. However, there are three main challenges that have prevented most companies from effectively using FCAs for retention marketing:

  1. Determining how many different FCA lists to manage
  2. Deciding which customers to place in each list
  3. Having to manually upload the customer lists on a regular basis

If you want to maximize the effectiveness of your retention marketing campaigns, you really need to be working with many small segments of customers – and corresponding personalized messaging/offers. Also, to take into account recent activity, you need to update which customers are in which segment very frequently, even daily.

Facebook Custom Audiences have long held out the promise of improving retention marketing efforts, but until now the manual processes involved have limited their practical application. The missing element has been a way to automatically create and maintain Custom Audience lists based on granular, behavior-based customer micro-segmentation. While paid online advertising has historically been used exclusively for customer acquisition, we can now use it as an effective and measurable medium for customer retention!

True One-to-one Facebook Customer Marketing

When predictive customer segmentation drives automated Facebook Custom Audiences, true one-to-one Facebook marketing becomes easy – and very effective. This is exactly what we’ve been working on for the past few months and the result is nothing short of groundbreaking.

Already at the core of our Optimove software is unique customer modeling technology which provides predictive customer micro-segmentation. The system allows marketers and retention experts to drive one-to-one marketing campaigns which maximize the impact of every marketing incentive and offer. Optimove’s leading technology for automated campaign management enables marketers and retention experts to more easily increase engagement, prevent churn and maximize customer spend.

As of March 2014, Optimove’s multi-channel campaign support extends beyond email, SMS, push notifications, on-site banners, in-game advertising and call centers to include online advertising via Facebook Custom Audiences.

The biggest challenges with effectively using Facebook Custom Audiences for customer retention are deciding which customers to include in which lists and then manually updating the numerous lists on a frequent basis. Optimove addresses both of these challenges as part of its core functions: the software allows marketers to identify and manage large numbers of highly targeted micro-segments of customers and automatically updates the customers in each list every day. Updating the lists daily maximizes the response rates of customers by always targeting customers with the most relevant messages and incentives, given each customer’s most recent actions and behaviors.

Another challenge with using paid advertising for customer retention campaigns is how to measure the financial uplift of a campaign. Optimove’s retention automation platform is built around the concept of running every campaign as a marketing experiment. What this means is that Optimove automatically selects a representative control group from each target group of customers and then calculates the total financial uplift by comparing the money earned from the target group and the control group during the measurement period. Optimove can thus accurately report the financial gain from every retention campaign that is run using Facebook Custom Audiences, whether the campaign was stand-alone or if it was run in support of a concurrent email campaign. This also makes it easy to compare the ROI of retention campaigns on Facebook versus email and other channels.

Want to Try the Next Killer Retention Channel?

This is a particularly exciting capability for a number of reasons. It is really the first time that marketers can show a specific creative or campaign to certain segments of their customers on a paid advertising channel and accurately measure the uplift. When marketers understand the power of combining Facebook Custom Audiences, predictive customer micro-segmentation and automation, retention marketing will never be the same.

Our first customers have begun testing the system, including marketers at a leading social gaming platform. They are test-driving the Optimove-Facebook integration with retention campaigns targeting tens of thousands customers. They are already quite excited about the compelling value inherent in the combination of Facebook’s Custom Audiences and Optimove’s customer segmentation and automation.

If you’re interested in giving it a try yourself, drop us a line!

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