How to use Klaviyo to improve ROAS

When building your lookalike audiences, the first step is to set up your segments using RFM properties.

After you have created your RFM segments, follow these steps to use Klaviyo’s integrations to push those audiences into your advertising platforms:

1. Create a segment for Champions and Loyal customers.
2. Send the audience to an integrated platform, such as Meta Ads, or TikTok.
3. Create a lookalike audience in your ad platform to target similar users.

Once you’ve created your lookalike audience, target them to drive higher conversions and improve ad efficiency. By focusing on audiences that mirror your top customers, you’re more likely to reach individuals who will respond positively to your ads, ultimately maximizing your return on ad spend and growing your customer base with greater precision.

When it comes to your Needs Attention and At Risk customers, it’s important to take action before they stop buying altogether.

Reconnecting with Needs Attention customers, who were once high spenders or frequent buyers, can make a big difference. You can:

• Offer exclusive, time-sensitive discounts and promotions to create urgency.
• Launch winback campaigns to re-engage them.
• Share updates on new products to keep them interested.
• Personalize your outreach by suggesting products based on their past purchases.
• Send reminders to restock items they’ve bought before.

A more cautious approach is key for At Risk customers, who tend to spend less and haven’t bought recently. Try these tactics:At Risk customers, who tend to spend less and haven’t bought recently, a more cautious approach is key. Try these tactics:

• Use winback campaigns with strategic, personalized messages.
• Provide special offers or discounts to grab their attention.
• Recommend budget-friendly products that match their past purchases.
• Be careful not to over-message, as this group will likely stop buying if overwhelmed.

Additionally, a big focus should be on Needs Attention and At Risk customers who aren’t engaging with email or SMS. This segment likely isn’t aware of your latest products or any recent brand updates. For these customers, consider alternative ways to reach out, such as ads on social media, targeted website pop-ups, or even direct mail to capture their attention and remind them of the value your brand offers.

If your Needs attention and At risk groups are large and you are looking for ways to prioritize, consider targeting customers in these groups who may be unsubscribed to email and SMS but were recently active on your site. This way you can target this group without overextending your ad spend.

To maximize your return on ad spend and avoid wasting your budget on ads that aren't necessary, focus on targeting customers who truly need an extra push to make a purchase. RFM targeting makes this easy. For instance, you can exclude your Recents from upcoming social campaigns, as these customers have recently purchased and are unlikely to buy again immediately. This way, you’re not spending ad dollars on people who don’t need immediate reminders or offers.

Here are some targeted strategies for your Recent customers without overextending your ad spend:

• Encourage them to subscribe and engage more deeply, so they can eventually become Champions or Loyal customers.
• Share personalized product suggestions based on their recent purchases to increase the chance of follow-up sales.
• Send reminders for items they might need to restock or purchase regularly.
• Highlight reviews and testimonials from satisfied customers to build trust and influence future purchases.

Additionally, consider how to strategically manage your Champions and Loyal groups, who already purchase frequently without discounts. Excluding these customers from promotions or discount-driven ads helps maintain profit margins and avoids offering incentives that aren’t needed. Instead, you might:

• Target Champions or Loyal customers with loyalty program promotions, if they haven’t joined yet, to deepen their engagement.
• Use ads to reach Champions or Loyal customers who are not engaging with your email or SMS content, reserving paid channels for situations where they are essential.
  

By taking a more focused approach to your ad targeting, you can lower your costs and improve overall campaign performance.

To improve your ad engagement with the right content, start by reviewing your product analysis to better understand what customers are buying together and when they return for more. This kind of product analysis can help you create personalized and relevant ads for each segment.

Here’s how you can use this approach:

• Showcase products bought together: If you notice that certain products are often bought together, group them in a carousel ad. For example, if customers often purchase a skincare set with a moisturizer, display both in the same ad to inspire similar purchases and show customers how these items complement each other.
• Advertise complementary products: When a segment has already bought a popular item, use that knowledge to introduce them to products that others tend to buy in their next purchase. For instance, if someone has bought a high-end coffee maker, consider advertising specialty coffee or accessories to keep them engaged with your brand.
• Time your ads strategically: Consider how long customers typically wait between purchases. For your Recents (those who just bought), hold off on ads for a while, but as that time window closes, start showing ads that remind them of related products. This way, you reach them at the right moment, increasing the chance they’ll return for more.

By using product data to inform your ad content, you’ll be able to deliver ads that truly resonate with each audience, making your campaigns more efficient and engaging. This strategy helps ensure that you’re not just showing ads, you’re showing the right ads.