Why Existing Customers are Your Most Valuable Asset and How to Get Them to Buy Again
In a competitive digital landscape, many online retailers understand that 70-80% of customers are likely to be one-time buyers. Depending on the average order value, that could mean that acquisition costs outweigh the lifetime value of many customers. With that insight, retailers need to maximize the value of their existing customers. It is important to first examine why existing customers are valuable, and then understand successful approaches to drive them to purchase again.
4 Reasons Existing Customers Are Valuable:
- More Likely to Purchase Again
- Once they’ve made a purchase with your business, they’re familiar with the brand and they’re comfortable with the quality of your products and the purchase process. Familiarity and brand recall makes customers more likely to revisit your site.
- Provide Ratings/Reviews
- Existing customers provide ratings and reviews on products. Reviews are an essential element in the purchase path for new customers. The more you can populate your site with positive reviews, the better your conversion rates will be.
- Cost Effective Communications
- Collecting email and/or SMS information from customers allows brands to focus marketing efforts on lower cost, owned channels. For cases where customers aren’t being responsive in owned channels, knowing their value can help you decide which customers to target in paid media to optimize marketing spend in those channels.
- Brand Advocacy
- Satisfied customers are natural brand advocates. Providing customers with small incentives or rewards for social posts or sharing with a friend can be more powerful than traditional advertisement and more cost effective.
So now we understand why existing customers are valuable. But to drive long term revenue out of these customers, retailers have to take action by implementing a variety of tactical offers and programs to demonstrate continued interest and recognition of customer value. The combination of these different approaches will improve loyalty, increase revenue, and decrease acquisition costs.
- Loyalty Programs
- Customers like to feel valued. Whether the program focuses on free shipping, special events, or bonus points to redeem for future purchases, it is important to ensure customers feel that you appreciate their continued brand support. Simply collecting email is not the same as a loyalty program.
- Understanding what is important to your customers and when and why they need products is also critical to driving more value. Gaining insights into a customer’s interests and shopping habits enables you to create more personalized communications. From replenishment reminders to matching items, addressing a customer’s personal needs at the right time will drive better conversion rates.
- Customer Service
- Many businesses overlook the importance of customer service experience and the impact it can have on customer retention. Investigate ways to link your customer service feedback to your CRM data (like Zeta CDP) to understand how these interactions can impact lifetime value. Turning a negative experience into a positive outcome can help drive increase brand advocacy.