What are Lookalike Audiences?

Lookalike audiences are a useful tactic if you want to reduce your cost per acquisition and bring higher-quality leads into your sales pipeline.

What is a Lookalike Audience?

A lookalike audience is simply a group of people or companies that share the same or similar characteristics, behaviors, and interests as your existing or target audience.

Imagine a company that sells laptops and other devices. Using their buyer data, they create a list of their top 1,000 frequent customers. 

They then analyze the behaviors, interests, and demographics of these customers to help them identify other people who share similar traits. This could be an interest in fitness, shopping for workout clothes, or following fitness influencers. With this info, the company can create targeted sales campaigns that reuse previous sales and marketing assets without needing to create new ones.

Services like Facebook, Google Ads, and AiSDR use data and algorithms to find people who are likely to be interested in your products or services. If it’s set up correctly, this helps you reach a broader audience while improving your chances of engagement and conversion since you already know how to sell to the audience.

How Lookalike Audiences Works

To build good lookalike audiences, AiSDR pulls information from multiple sources:

• Your buyer personas 
• Your ideal customer profiles
• Websites of your current customers
• Intent signals: hiring intent, web search, news, tech stack
• Lead databases and other prospecting tools

AiSDR merges this information to assemble lead lists filled with prospects who are more likely to engage with your outreach. From there, you can quickly launch a cold outreach campaign where AiSDR crafts personalized emails tailored to the lookalike audience.

Benefits of Lookalike Audiences

These are some of the benefits of leveraging lookalike audiences for your sales outreach:

• Increased reach – Lookalike audiences make it easier to quickly scale your outreach by finding potential customers who share traits with your existing ones. As a result, you can reuse sales and marketing materials, making adjustments only to any personalization elements.
• Improved targeting – Focusing on leads who are similar to your current customers increases your odds of engaging prospects who are more likely to convert. This is because these leads are based on your actual data instead of hypotheses and assumptions.
• Easier ROI – Since lookalike audiences are highly targeted and match your current users, your outreach should yield higher returns while spending fewer resources on irrelevant leads and creating brand-new content.
• Time savings – Lookalike audiences streamline lead generation and reduce time spent prospecting new customers and analyzing websites.

Overall, this approach allows you to reach more people and get more results without investing considerable resources.

Drawbacks of Lookalike Audiences

There are a few drawbacks to lookalike audiences:

• Lookalike audiences rely heavily on the quality of your data. If it’s inaccurate or incomplete, your lookalike audience won’t be ripe for results.
• Lookalike audiences won’t help you reach entirely new customer segments. By design, lookalike audiences target prospects who are similar to your current users. It’s akin to “doubling down” on your ideal customer, which naturally places a limit on total reach.
• Potential audience overlap. Aside from diminishing returns, if your lookalike audiences are too big, you’ll potentially end up reaching out to them multiple times. This might cause them to ignore your emails or mark them as spam, torpedoing your deliverability. 

Fortunately, these drawbacks are easily avoided if you follow best practices for using lookalike audiences.

Best Practices for Using Lookalike Audiences

To get the most out of lookalike audiences, here are some best practices:

• Use quality data – Lookalike audiences sink or swim purely on data quality. Bad data leads to a bad audience, while good data leads to a good audience. So make sure you’re using high-quality data sources to get the best results possible.
• Create clear segments out of your audience – Don’t restrict yourself to one lookalike audience. Instead, create multiple based on segments like “top buyers”, “recent customers”, “seasonal customers”, etc. This allows for more targeted campaigns and better results.
• Fine-tune your targeting – The narrower your audience, the better the relevancy and likely campaign results. This means refining your list with factors like intent signals, key demographics, pain points, and more.
• Start small and test – Lookalike audiences produce their best results if they represent 1% of your source audience. Not only does this improve engagement and relevance, but it helps avoid audience overlap and gives you room to quickly pivot your approach.

These best practices will help you get the most out of lookalike audiences while reducing the risks.