Building a loyal community around your brand is a hallmark of the most successful ecommerce businesses.
Data shows that returning customers make up almost 50% of ecommerce sales. So although modern consumers are less loyal to brands than before, repeat business is still hugely important.
Factors such as good customer experience and free shipping that turn clicks into customers still matter when it comes to getting them to return.
However, some strategies are particularly effective for winning repeat sales, which this article will discuss in detail.
The more data you can gather on the behavior and demographics of those purchasing your products, the easier it will be to tailor your marketing strategy to each segment and boost customer retention.
Keeping track of metrics such as click-through rates, engagement with ads, and demographic traits like age, will allow you to adopt a unique approach to each segment, delivering superior results compared to a ‘one-size-fits-all’ method.
This is supported by research from McKinsey, which indicates that data personalization delivers tangible benefits in terms of performance and customer outcomes, such that companies that personalize can expect a 10-15% revenue boost.
Using data insights should also provide the opportunity to work out which segment is delivering the most revenue for your business - it may well be that 20% of your customers account for 80% of your income (the Pareto principle of the “vital few”). Naturally, focusing your efforts here will reap the biggest rewards.
One of the most powerful ways that ecommerce businesses can leverage data personalization to win repeat customers is to send targeted product recommendations to customers following a purchase.
Recommending products that are most similar to those the customer previously purchased is going to make up the bulk of this kind of marketing. However, highlighting new arrivals or sales will also often entice customers to return to your website.
Targeting return customers with product recommendations can be done very effectively through email newsletters, as well as advertising on social media platforms where consumers spend so much of their time. Having something like a ‘special picks’ section on your landing page dedicated to personalized recommendations can also work well.
Another important point is that as a customer continues to return to your store, you’ll be able to gather more and more data on their preferences and provide increasingly fine-tuned product recommendations. This can serve to further reinforce their loyalty to your brand.
Data shows that 56% of online shoppers are more likely to return to an online store that provides product recommendations, so this is very much a proven method for gaining repeat customers.
If you’re looking for software that will provide personalized product recommendations to your customers, then you should consider UpOrder. Their powerful product recommendation engine can be set with rules and conditions of your choosing, allowing you to drive increased order sizes and boost your repeat customer rate.
Discounts are another very effective tactic for gaining return customers, provided they are used in the right way.
As with product recommendations, data insights can be used to tailor discounts to different customer segments. And by using automation software, emails can be scheduled to be sent at the optimal time - neither too soon nor too late - after the initial purchase was made by the customer.
Personalized discount codes can serve to make the customer feel special and incentivize repeat business, plus provide an additional data point, as you’ll be able to track who is or isn’t using the codes. Then, you can adjust this element of your marketing campaign accordingly.
This tracking is also important because it will allow you to, for example, see which customers are responding to marketing that doesn’t offer a discount. This will prevent you from offering discount codes indiscriminately and thus forgoing sales revenue from people who would have become return customers without one.
Offering a very high number of discounts could also backfire by cheapening the value of your product in the eyes of customers, and possibly irritate them if they feel bombarded.
The percentage of the discount also needs to be carefully considered, as data shows that discounting more than 20% potentially reduces the amount of revenue per transaction.
So discounts can be very effective in boosting your return customer rate, but they need to be used strategically.
Rewarding returning customers with points or other benefits in a loyalty program is a proven method for customer retention - 49% of customers say that they’ve spent more at a store after joining one.
Loyalty programs also provide a useful way of identifying the customers that are most likely to return - someone is unlikely to sign up for such a program if they have no intention of ever buying a product from you again. These customers can then be prioritized when it comes to targeted marketing and advertising.
When it comes to your top percentile of highest-spending customers, you may want to consider offering something beyond your regular loyalty program. On top of being your highest value customers, they can become strong advocates of your brand and recommend you via word of mouth.
Offering them perks that are more than just financial incentives - such as early access to new product releases, participation in product development feedback panels, or invites to exclusive events - will make them feel truly invested in your brand.
An example of this strategy is the loyalty program of beauty brand 100% Pure, where members can progress up through three levels, with the top tier gaining priority customer service and early access to products that have just been released.
Your customer may have purchased your item quickly and with little thought, with their decision being influenced more by pricing than by a particular affinity for your brand.
Therefore, creating a positive post-purchase experience when communicating with them is crucial, and savvy brand messaging can help get them to return.
Asking your customers for feedback post-purchase is not only a good way to collect positive reviews, but it is also a way to get them to engage with your brand.
Sending your invoice to the customer is another opportunity to reinforce your branding after the purchase is made.
Sufio’s invoicing software allows you to send professionally designed invoices that build your brand. Our invoice templates have been created by professional print designers, and can be customized to match your creative branding.
Our automation software immediately creates an invoice when an order is placed, and automatically applies the correct sales taxation, currency conversion, and language translation. This helps to eliminate invoicing errors and helps build credibility and trust with your customers.