The case for targeting the repeat customer — it’s good for revenues and loyalty building
There’s no arguing retailers have gotten really successful at acquiring first-time customers through the tested marketing trio of search, online behavior tracking, and ad re-targeting. Retail’s real problem today is achieving the second sale, a much more profitable sale and one that’s more likely to lead to continued loyalty.
Studies continue to find that the valuable second-sale is overlooked, as much of retailers’ messaging and targeting approach (as much as 80%) remains focused on the first Purchase instead of continued engagement. Retail consulting firm Bluecore crunched the numbers on second-sale value, and here’s what they found when analyzing 16 apparel companies (via Retail Customer Experience).
- Second-time buyers are 130% more valuable
- Customer value increases with each purchase, however, the biggest jump in value is between the first and second purchase
- 60% of second purchases occur within 100 days of the first
- After 100 days the chances of a second purchase drop below 10 percent
- Converting just 5% of these 80,000 one-time buyers (from the studied retailers) could lead to $550,000 more in revenue over the next two years
Why second-sale stats matter?
In addition to driving more revenue at a lower customer acquisition cost (CAC) and building stronger loyalty, the shift in retail models means Brands need to embrace more personalized engagement to remain viable.
Direct-to-consumer brands need to be especially vigilant. While the future looks bright for brands ranging from Warby Parker and Dollar Shave Club to Casper, success comes with a hefty price tag. The good news is that 81% of consumers plan to make at least one purchase from a D2C brand. The not-so-good news? The difficulty with connecting with customers online drives these brands to compete in mostly the same channels, which drives up the CAC dramatically. As a result, many have opened up brick-and-mortar locations to provide more opportunity for long-term, personalized engagement and because “customers can often be acquired in a store more cheaply than they can be by paying Facebook or Google.”
How to achieve repeat sales?
Going back to the Bluecore data, retail analysts advise that for meaningful engagement worthy of driving second and repeated sales, it needs to happen at the point of interface (online or in-store) where and when the customer chooses to engage.
That sentiment is in line with TimeTrade research, too. In our 2018 State of the B2C Buyer Experience, buyers expressed significant demand for increased engagement in ways that make it easier for them to interact and schedule meetings prior to making a purchase.
Here’s how to make it easier for all consumers to interact with brands and make those interactions more personalized and meaningful.
- Give the customer more control and let them make the schedule We know customers are in the driver’s seat. Armed with information they often go to a brand only in the final stage of the decision-making stage and are ready to purchase. Unfortunately, our data shows that 61% of consumers frequently do you not hear back from a company after contacting them with a purchase-related question. Brands are overwhelmed, but an easy fix is to let customers schedule appointments when and where they desire. In fact, 83% of respondents indicate they are likely or very likely to schedule an appointment with a company they may buy from.
- Enable scheduling directly from search results Search is king in today’s retail economy. Google accounts for more than 90% of search traffic, so why not let customers book an appointment straight from Google search results? It’s a cost-effective way to convert more web and mobile searches to scheduled appointments in branch locations.
- Offer in-store experiences Brands like Sephora and previously mentioned Warby Parker offer more than shop shopping experiences. Their in-store events and classes engage customers, offer tips that are relevant to their lifestyle, and plant the seed for continued loyalty. And don’t overlook the obvious, too! Getting more people in the door boosts product sales.
One thing is clear from all the research, customers are demanding more personalization, and the most successful retailers will need to compete on experiences, and not just price.
The post How to capture the valuable, yet overlooked, second-sale appeared first on TimeTrade.