The fight is on for eCommerce stores. With big-name online stores constantly expanding and a new crop of smaller online businesses popping up every week, eCommerce owners are clamouring for the attention of consumers.
Landing new customers is vital and plenty of online stores focus on getting in front of new audiences, but what are you doing to keep previous buyers coming back for more?
The book Leading On the Edge of Chaos states customer profitability rates increase over the lifetime of a retained customer. But even more shockingly, a tiny 2% increase in customer retention has the same effect on profits as cutting costs by 10%.
Returning customers are your bread and butter. You need them, just as they’ve come to need you. And, with the price tag on landing a new customer sitting at 7x that of an existing customer, it’s a no-brainer to engage and market to people who already know who you are.
So how can you keep people coming back for more?
Offer Loyalty Discounts
You’ve probably seen this before: existing customers get a percentage off their next purchase or a coupon that lets them pick up something for free. These little rewards are powerful for consumers.
Think about it: if they’ve already bought from you and enjoyed their experience, are they likely to go with a brand new company that they know nothing about for their next purchase or go with what they know and like and get a cheeky little discount while they’re at it?
See, it’s a no-brainer. It makes sense that customers like receiving special treatment from brands, and offering a discount after their first purchase is a small price for you to pay to ensure they keep coming back over and over again.
Nurture via Email
Most online businesses know the power of email marketing and the vast majority leverage it to convert customers. But the key focus is often on converting new customers.
It goes something like this: consumers land on an online store and like what they see but they aren’t ready to buy so they sign up to receive email updates, then the brand sends them a series of nurturing emails that finally converts them into a paying customer. But it’s after this stage that the most important work happens.
Most brands will file that purchase as a success and go back to nurturing new almost-customers until they buy. It’s an ongoing cycle. In fact, the average eCommerce store spends more than 80% of its marketing budget on getting new customers.
This is all well and good, but if they knew that after one purchase, a customer has a 27% chance of returning to their store, would they spend more on retaining customers as opposed to gunning for fresh blood? And if they knew that once a customer has purchased from them three times, the chance of them coming back for more increases to 54%.
This makes email a vital part of a store’s post-sale strategy. If you stop emailing someone because they purchased from you, you might miss out on that second, third, fourth, or one hundredth sale. If you stop regularly landing in a customer’s inbox, there’s a high chance they’ll forget about you and the great experience they had.
By creating a nurturing email sequence that starts after the consumer has made a purchase, you’re essentially showing them you value their custom and weren’t just looking for a one time thing. Then, when they’re ready to buy from you again, you’ll be at the front of their mind because you’ve been a regular (and welcome) addition to their inbox.
Recommend Products and Personalize Experiences
In a report by Monetate, 48% of eCommerce sessions are made up from returning visitor transactions and bring in almost double the amount of new shoppers.
On top of that, new shoppers are far more likely to metaphorically “hit it and quit it” when they land on your store. Often, they’ll leave a site after visiting just one page and without having made a purchase. To tackle this head on, there’s a simple answer: personalize the shopping experience.
This works for both new and loyal customers because having a storefront geared towards what we like and buy saves us a ton of time having to scroll through irrelevant items.
Once a customer buys from you, you already have an insight into their purchasing habits. You have data and information on what kinds of products they’re driven to buy and what they’re willing to spend their money on. With that information, you can serve up personalized shopping results for them that show highly relevant items based on their previous behavior.
They say that knowledge is power, and it’s difficult to know someone who has never bought from you. This is why returning customers have so much potential.
A huge 69% of consumers want a personalized shopping experience, but only 40% of brands give them that. This leaves a massive gap in the market. Take Netflix as an example.
Photo credits: Netflix
They use customers’ previous viewing behavior to serve up personal recommendations, creating an unique homepage for each and every individual customer.
“We don’t have one product but over a 100 million different products with one for each of our members with personalized recommendations and personalized visuals,” says a spokesperson for the company. And, with a 30% increase in profits every year, their personalization strategy seems to be paying off big time.
Create a Community
As humans, we like to feel like we’re a part of something. We like to feel like we belong and that we’re valued. And, when we feel like an important part of a group, we’re more likely to be loyal to it. This translates into the online shopping world, too, with a study by RJMetrics showing that a brand’s loyal top 10% of customers spend 3x more per order than the bottom 90%, and the top 1% spends a whopping 5x more than the lower 99%.
But creating a loyal following of hardcore fans doesn’t just bring in higher profits. These are the people that will shout about your business from the rooftops, with a report by Bain & Company finding that, after 10 purchases, shoppers refer 50% more people to a store than a one-off buyer.
Just to cement this further, repeat customers not only buy more from you and spend more with you, but they also bring in new customers, too. You can think of them like online store superheroes.
Make Buying From You a Breeze
In order to become a repeat customer that comes back time and time again, consumers have to buy from you in the first place (duh!).
In his book, Marketing Metrics, Paul Farris reports that a repeat customer has a 60%-70% chance of converting. That’s an excellently high statistic. But in order to get to that repeat customer stage, they have to be a first-time buyer to begin with and that means enticing them in with an enjoyable customer experience.
The problem with online shopping is that people can be fickle. It’s incredibly easy to click away from one store and into another if you can’t find what you’re looking for – even if your cart is bursting at the seams with goodies. And, with online stores seeing an average of a 69.23% abandon cart rate, it’s a task trying to get people to buy in the first place. Which is why it’s vital that you make buying from you a breeze.
The easiest way to do this is to make sure your checkout process is easily navigable and tied into the customer’s needs.
You can do this by:
- Making sure all costs are advertized upfront so there are no nasty surprises waiting for the customer at checkout
- Ensuring there are several ways for customers to pay so they can choose their preferred option
- Displaying prices in the customer’s local currency so they don’t have to navigate away to check exchange rates
All of these little details add up to make a smooth shopping experience for customers.
Getting consumers through that first purchase is only the beginning, though. After they’ve enjoyed a pleasant experience buying from you, then the hard work begins with nurturing and building a community.
These return customers become loyal fans and not only buy from you time and time again, but also recommend you to their friends, family, and everyone in between.
So yes, the fight is on for eCommerce stores to stand out above their competition and get in front of new customers.
But while that fight is going on, don‘t forget about consumers who have already bought from you. These are the people that bring in the highest amount of revenue for your business, and they’re the people that will market your business for you without you even having to ask.
Need more tips and advice? Check our all-in-one eCommerce library that will help you run and grow your eCommerce website.
Maik Bodden, Marketing Manager @ G2A PAY