When looking to acquire new customers, a brand focuses on three basic levels: awareness, consideration and decision making. What holds key importance, and is oftentimes the biggest financial hurdle, is awareness. Getting a company’s product or service into the eyes of the public is vital to its success, but a strictly digital customer acquisition strategy may no longer be the most cost-effective.
Digital Customer Acquisition: The Rising Cost of Digital Advertising
The days of simply running a digital ad and raking in conversions are coming to an end. The simplicity has lent its way to an increase in direct to consumer brands, which causes market saturation. When there is over-saturation in a given market, the customer acquisition cost (or CAC) rises.
Digitally, brands are coming to a point where CAC is rising too rapidly with minimal payoff. Consumers are constantly being bombarded with advertisements, and it is taking more and more for brands to stand out among the clutter. Many users quickly look past the sponsored links on Google’s search page and are finding frustration with the mass amount of sponsored posts on Instagram. This means the paid digital efforts may actually be driving away potential customers and can turn off current fans with overexposure.
Fear not. There is a solution — and you may be shocked to find it’s physical.
Getting Physical
We’re not talking about a standard store opening — we’re talking about pop-ups! We’ve been told time and time again that customers are shifting towards desiring a deeper connection with brands, and pop-ups are sure to do so. But what else is there to gain? What actually makes a flexible retail space more beneficial?
When a company launches a pop-up, they are simultaneously helping the brand grow while investing in their customer retention. Yes, placing focus on expansion is important, but a brand cannot ignore the customers it already has! Opening a pop-up is a fun way to keep those already following your brand … well, following. It gives them an exciting, new way to interact with the brand they already love and encourages them to stick along for the ride. This form of relationship building is cheaper to maintain than sourcing out new customers.
A key high point for any pop-up is achieving a viral loop. A viral loop is when a customer (or even a visitor) organically posts about your product, service, or event that leads their followers back to your brand. A brand wants to maximize the number of eyeballs that are viewing its pages. Even if they do not immediately follow, they have still been exposed to the offerings. The best part? This exposure comes at no additional cost!
“That sounds great, but how does my brand create a viral loop?”
Great question!
Customers or visitors who are willing to post about their experience at the pop-up leads to more buzz around the brand — but you need to give them something to post about. Providing “Instagram worthy” installations or innovative experiences gives attendees multiple touchpoints. Keeping up to date on trends in the market, like floral arrangements and biophilia can provide some installation ideas.
In a HubSpot Research study, it was found that 81% of consumers trust the words/recommendations from their friends and family over that of the brand itself. One positive Instagram post or verbal review creating a viral loop can lead one more person to your brand, leading to one more customer. This type of organic content is the most useful tool in building awareness and accumulating a following (and the promotion is … free!).
The word of mouth promotion that is being generated can lead to increased foot traffic at the pop-up location. For a predominately digital brand, this physical interaction can provide those who were wary about trying the product an opportunity to experience it first hand. This now tangible relationship with the product raises the potential of a sale. Furthermore, having knowledgeable staff to represent the brand furthers the brand’s image and can provide useful insights that may not be able to be communicated digitally.
“Okay, my brand had a successful pop-up! Now what?”
When the pop-up is over, that does not mean your physical presence has to end! Pop-up shops allow you to test your location before committing to a full-fledged lease. They become a sustainable investment in the market you are interested in. There is much less risk involved with the shorter lease duration, and your pop-up becomes a consumer data mine! When targeted correctly, the pop-up’s location in an ideal market translates to an increase in sales. The added excitement around the limited time stay increases urgency in the consumer to try and buy. To see some examples of long-standing pop-ups read our article: How Opening a Pop-Up Can Become a Long Term Investment.
Basically…
While digital marketing should not be ignored, it is becoming more cost-effective for a brand to open a pop-up shop. Pop-ups reinvest in customer retention while drawing in a new crowd to interact with the brand. Pop-up shops allow the potential for creating a viral loop that generates free exposure. The exposure expands the brand’s reach, increases sales, crystalizes the brand’s image and minimizes the cost associated with opening a pop-up. What’s not to enjoy?
by, Georgiana Zilli
…
Excited to start your very own pop-up? Popshop is here to help! Offering a variety of spaces across the globe, we’ll help you find your perfect retail location for rent. Come join the community!
