How to Identify Repeat Customers and Drive Profitability

Marketers often believe they know who their best customers are, how frequently they shop for repeat purchases, and on average how much they spend per transaction. However, they often fail to conduct a full analysis to segment these customers and uncover what makes them similar and different from most other one-time buyers.

While it’s important to focus on finding new customers and acquiring as many as possible, this approach is not always the most profitable. And don’t we all want more profit? What if I told you acquiring a new customer is 10X as costly as retaining an existing customer, would you believe me? You should. While acquisition strategies are necessary – it’s even more crucial for a brand to understand who their repeat buyers are and why they are so valuable.

Repeat buyers spend more with brands, are easier to cross sell an upsell, and have a higher spend per transaction than new customers. Many Marketers struggle to put together a strategic plan that focuses on maximize growth from the right repeat buyers instead of all existing customers.

Fully understanding your repeat rate, customer margin, order value, transactions count and most importantly lifetime value (LTV) are key to growing a more profitable business. If you’re thinking to yourself, “I know, I know, the top 20% of my customers drive 80% of my business” then you’ll be surprised. Retailers are seeing 80% of revenue come from up to their top 40-50% of customers. Didn’t see that coming did ya? It’s true. Having the right analytic tools in place to understand, identify, and segment repeat customers can generate more profit and higher CLTV for your brand.

To identify repeat customers and segment them for future marketing strategies, consider taking these simple steps:

  • Take a holistic approach to your analysis to get a full 360-degree view of who customers are and how they are behaving through all their transactions, in all channels both on and offline. Having the right CDP partner in place can help with this approach.
  • Conduct an RFM analysis to segment customers into high-value and low-value tiers based on purchase behavior to uncover where the drop-off is in average order transactions, AOVs, and lapse time since purchase.
  • Use predictive intelligence to model intent behavior, rank and score customers based on all their transactional data, and then segment them into deciles for actionable strategies.
  • Once you’ve identified who your repeat buyers are and in what categories they are making subsequent purchases, you can influence their next best purchases in categories they are most likely to migrate to, and even steer first-time buyers into categories that lead to the highest CLTV.
  • Personalized cross-sell strategies and custom model builds are both tactics that will help continue growing your repeat purchaser rate and profitability.
  • Understand the time lapse gap of repeat purchases, what that sweet spot is, and what the incrementality in CLTV is of getting repeat customers to purchase again in that time frame.

Zeta offers many solutions to help brands identify top customers (present and future) and improve retention. Find out how we can help.


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