About six months ago, I decided I needed a new car. I started my research online, looking at consumer reviews and resale values, and I settled on a green SUV. Since I’m such a savvy shopper, I looked at prices from several dealers in the area, made some notes and decided to think the purchase over before I headed out for a test drive.
The next time I got online to look at something completely unrelated to my new vehicle research, I was surprised to see the very same green SUV in an ad at the edge of the page I was looking at. I wanted to read the news ... green SUV. I checked in on a social media site, and there it was again. It wasn’t long before everywhere I went online, I saw that same darn green SUV. The novelty wore off pretty quick, and within a couple of weeks, not only had I changed my mind about the purchase, but I’d sworn I’d never, ever own a green SUV.
And that, my friends, is the danger of remarketing.
Remarketing Pros and Cons
Here’s how remarketing works: You look for a product—a pair of shoes, a new dishwasher, a car. The site you’re on (whether it’s Google or another search engine) puts a little line of code called a cookie on your computer, smartphone or tablet. When you visit another site, there are blank ad spaces just waiting to pick up that little line of code and show you an ad for the very same product you were searching for, as if it were some happy coincidence.
Why do companies remarket? In short, because it can work—at least for a little while. Remarketing can not only be one of the most cost-effective tools in the online sales arena, but for some products, it can also be remarkably effective at converting shoppers to buyers.
Remarketing may work because it can create multiple impressions. We’ve long known that the more impressions we have of a product, the more likely we are to recognize and buy that product. We recognize faces more easily if we’ve seen a person on multiple occasions, so it makes sense that we’re more comfortable with products we’ve encountered more than once as well.
So if remarketing is cost-effective and results in a higher rate of sales, why would anyone choose not to do it? Because it may alienate customers if it’s used too frequently or for too long, just like the green SUV.
I like to think of remarketing as a salesperson at one of those kiosks in a mall. You stop, try on a pair of sunglasses, contemplate the purchase, then set them back down. The salesperson asks, “Are you ready to buy?” You say no and walk away. But what if the salesperson shows up in the next store you walk in? “You ready to buy yet?” Next store, same deal. “How about now? Want the sunglasses?” Before long, you’d feel as if you were being stalked. You might find the overly aggressive sales tactics repellent, and you’d probably leave that mall without new sunglasses.
The kiosk example points out one of the most important things to consider about remarketing, in fact. And that is remarketing isn’t actually marketing at all. It’s a sales tactic. Marketing is about brand building—Coca-Cola ads with adorable polar bears that don’t actually seek to get viewers to rush out and purchase a Coke within the next five minutes. Marketing plays the long game, trusting that the positive associations you have between cute polar bears and Coca-Cola will serve the company well in the long run.
Marketing isn’t necessarily aggressive, but remarketing can be. All those impressions can feel intrusive—like the online equivalent of a stalker trying to push sunglasses on you.
To Remarket or Not to Remarket?
In addition to potentially alienating prospective customers, remarketing can suck you in to a false positive feedback loop. You may be ecstatic when you see your initial sales figures for your remarketing investment. What you may not see, though, is the long-term effect of the customers you’ve alienated—the ones you’ve lost forever.
So should you use or should you avoid remarketing? The answer is: It depends.
If you’re looking for a short-term bump in sales for a seasonal product or a limited time offer, then remarketing could be ideal. You may create tons of product impressions, reap the rewards of increased sales, then cut the campaign off. Remarketing can be particularly effective for new product launches, especially if you distinguish the new product as distinct from the brand as a whole.
If you have a scenario or a product you believe is a great candidate for remarketing, I offer the same advice I do for any big business decisions: Start small. I’d recommend testing your remarketing on a regional basis, or for a particular subset of clients. Look at your results and make sure they’re in line with your expectations before you consider rolling the campaign out on a larger scale.
Like anything else in business, remarketing can be a powerful tool or the kiss of death. Think carefully before you try it, and make sure it suits your big picture, long-term goals.
Mike Michalowicz is the author of Profit First, The Pumpkin Plan and The Toilet Paper Entrepreneur and is a nationally recognized speaker on entrepreneurial topics. He is founder of Profit First Professionals. His popular small-business blog shares strategies and techniques for entrepreneurs.
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