How Do You Reach Only New Customers?
Today's question is about whether to exclude existing customers from your ads when you want to acquire new ones, and how to do it. Meta retargets existing customers by default, which isn't automatically a problem because those people convert easily and keep your costs down, but it can mask real performance or lower your average order value. Jon explains why you need to confirm there's an actual problem before excluding anyone, how to use website and customer list custom audiences together since each is imperfect on its own, and why new features like customer lifecycle strategy and value rules for existing customers could change the approach entirely.
Want your question to be answered on a future episode? Go to JonLoomer.com/Question and record your question today.
Question
Hi Jon. My name's Mike Armstrong. And I have a question for the Pubcast. If Meta is already retargeting my customers, and I can see that in the breakdown in audience segments, if I just want to acquire new customers only, how would you recommend I go about that? Thank you.
Answer
So this is actually a very timely question that Mike asks because of some recent feature developments, so let’s talk this through.
First, yes, Meta will automatically retarget your existing customers by default, even when going broad without any audience inputs. I’m so happy that Mike is using his audience segments and the breakdown to see this happening.
Now, to start, reaching your existing customers isn’t necessarily a problem. These people are most likely to convert, which has both benefits and downsides.
The upside is that remarketing to your existing customers, assuming they can still buy the product you’re promoting, should lower your cost per purchase.
But the main downside is that, in some cases, they may have converted with or without your ad. So just remember that Meta wants your results to look good, and showing your ads to existing customers will help accomplish that.
Another potential issue is that existing customers may actually have a lower Average Order Value. Maybe they’ve already bought the product so any new purchases will be refills.
Now, I wouldn’t assume either of these two things to be a problem without first confirming it. Because removing existing customers without a clear problem to be solved will just hurt your results without benefits. And your surface level results will look worse.
But if there is a problem, you can absolutely exclude your existing customers with custom audience exclusions. This is an audience control and Meta will respect it.
You may need multiple custom audiences to do this as thoroughly as possible. Website custom audiences and customer list custom audiences are both incomplete and imperfect individually, but use them both to complete the picture as much as you can.
There are a couple of other solutions that are in testing, and it’s always possible that you have one of these.
Customer Lifecycle Strategy allows you to choose at the ad set that you only want to reach new customers. I assume that Meta will then just apply the custom audiences you used to define your existing customers to exclusions, but this feature remains mysterious.
The other possibility is a new value rule that’s floating around. It allows you to bid differently on your existing customers, engaged audience, and new audience. In some cases I’ve seen other options for bidding based on high and low quality customers.
So if you have this feature, you don’t need to exclude your existing customers entirely, but you could bid less on them.
Bottom line is I’d make sure that you first have a problem to be solved that requires excluding your existing customers. Confirm that first.
If you don’t have either of the new features, you can still apply custom audience exclusions.
A final possibility would be splitting up remarketing and prospecting so that you can control your spend on existing customers.
Great question, Mike!