August 22nd, 2018

How to increase your Ecommerce sales using Facebook lookalike audiences

Wouldn’t it be great if you could use your existing customers to find new customers? By targeting people that are similar to your best customers, you can increase conversions and sales. In this blog post, I will describe how you can do exactly that by using Facebook Lookalike Audience. I will take you through why you should use lookalike audiences, what it is and how to set it up.

Why use Facebook Lookalike audiences

A great opportunity to improve your customer acquisition and increase conversions is to target people that are similar to your existing customers. By doing this, you are more likely to reach people that will buy your products. You can even target audiences that are similar to your best customers to further increase your conversions.

What is a Facebook Lookalike Audience

Facebook Lookalike Audience is basically what it sounds like - an audience that looks like or is similar to an audience that you define. For an ecommerce store, a good starting point is to create a lookalike audience based on your existing customers. Facebook can then find people who are similar to people who have already bought something from your store. Facebook finds similar people by first identifying the common qualities of the people in the group, based on e.g. interests or demographics.

Worth noting is that the audience you use to define the lookalike audience is not included in the lookalike audience. In the case of using your existing customers, you would therefore not be targeting your existing customers with the campaign, just people that are similar to them.

How to create a Lookalike Audience based on your existing customers

The first step is to define your source audience. This is the audience that you want to base your lookalike audience on. Facebook recommends using a group of people between 1,000 to 50,000. If you are a small or newly started business, 1,000 existing customers could sound like a lot and you can start with a smaller audience than that. Facebook requires at least 100 people from a single country in order to create a lookalike audience.

If you are a larger business, you can segment your existing customers into smaller groups to create even more relevant lookalike audiences. One way to do this is to choose only your best customers to create a new audience. Another example is to segment by type of product, e.g. customers that are buying high heeled shoes, and to then target this lookalike audience with relevant ads for that type of product (high heeled shoes in this case).

Once you have defined who you want to use as your source audience, you first need to create a custom audience based on that audience.

How to create a custom audience with existing customers

What you need to get started is a list of email addresses or phone numbers for your existing customers. Once you have that list, use it to create a custom audience on Facebook.

Go to the Audiences page on Facebook

Click Create Audience and choose Custom Audience

Create Audience, Custom Audience

Then choose Customer File Create Custom Audience, Customer File

Thereafter, you can upload your customer list as CSV or TXT. Create Custom Audience, Customer list

You now have your custom audience with existing customers on which to base your Lookalike audience.

How to set up your lookalike audience

The next step is to create your lookalike audience. In order to do so, go back to the Audiences page on Facebook

Click Create Audience and this time choose Lookalike Audience

Create Audience, Lookalike Audience

Choose your newly created custom audience (containing your existing customers) as your source. Thereafter choose the location that you wish to target and the desired audience size.

Create Lookalike Audience

The audience size options determines how similar your lookalike audience will be to your source audience and ranges from 1% to 10%. An audience size of 1% means that you will target the 1% on Facebook that are the most similar to your source audience. This will give you high similarity and low reach. An audience size of 10% means higher reach, but lower similarity. On a side note, it can be very beneficial to experiment with these audience sizes to find the reach and similarity that works well for you.

Now click create audience. Done! You now have an audience that looks like your existing customers that you can target in your campaigns.

Conclusion

By targeting people that are similar to your existing customers, you can improve conversions and sales. Use the people that already buy your products, your existing customers, to help you find new customers. Facebook Lookalike audiences is a great way to do this and there are many ways that you can experiment with your audiences to get the best results.

One thing to note

Targeting people on Facebook that are similar to your existing customers is a great starting point to increase conversions. One thing to note, however, is that the list of existing customers that you have uploaded as a custom audience is static and is not updated when you get new customers. We recommend setting up a routine to update this audience at regular intervals to make sure that your lookalike audience remains relevant.

Further resources

Another smart way for ecommerce stores to increase sales is to target users that have shown interest in your business on Facebook or Instagram. See our blog post how to increase online sales by targeting people that have interacted with you on Facebook for a step-by-step guide on how to set this up.

If you are just getting started with Facebook advertising and want to learn why you should advertise your ecommerce store on Facebook and the different advertising options available to you, check out the Evermark ultimate guide to Facebook advertising for ecommerce stores.


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Helena Ahlström

CEO, Evermark


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