The holiday season is full of opportunities for retailers to drive sales online, but for every opportunity, there are as many challenges. In fact, according to the Ecommerce Holiday Customer Benchmark report, businesses can expect up to 59% more customers during the holiday period. So how do you turn these holiday customers into loyal ones?
By their nature, customers acquired during the holidays often fall outside the profile of the target customer. These customers are usually looking for specific holiday items or gifts for other people, with no intention of making further purchases.
This unique challenge over the holiday season provides the perfect opportunity for retailers to revisit and optimise their strategy for repeat sales. Whether you’re already utilising some of the techniques below, or feel you need to do more, improving repeat purchases should remain a priority for the holiday season.
Why are repeat sales important?
Aside from driving overall revenue, repeat customers hold unique value to a business. A customer becomes more likely to make an additional purchase after each one. Not only does this make the second purchase important, but it makes the third and fourth even more so. A customer is 45% more likely to return to your store after a second purchase, but are 54% more likely to return after a third. This also makes repeat customers easier to convert, meaning less time and effort spent on hard conversion tactics.
Additionally, repeat customers tend to spend more with a higher AOV than first-time buyers. The top 10% of loyal customers spend 3x more per order than the bottom 90%, and it is estimated that overall 8% of a retailer’s customers are responsible for 40% of its revenue. Add that to lower acquisition costs, and repeat customers prove to be extremely valuable to retailers.
So, what can retailers do drive repeat sales this holiday season?
Quality, not quantity
The potential for acquiring customers can seem an attractive opportunity. However, the diversity of customers acquired over the holiday season can be overwhelming, and many retailers simply won’t be able to do turn all of them into repeat customers.
It can, therefore, be just as effective to limit customer diversity and focus on acquiring more of your target customer over the holidays. These customers are likely to be more interested in your products and services, and more open to your marketing from the outset. Essentially, they’re much more likely to purchase again.
Simply put, retailers should focus on the quality of traffic rather than quantity of traffic.
Keyword and SEO techniques should continue to be an important part of this, ensuring your keywords are attracting the right kind of traffic to your website. However, in addition to your current strategy, referral programmes can also help expand your customer base while ensuring these customers are more in line with your target market.
Referral programmes work by incentivising customers to refer friends and family, who are likely to have a similar profile and therefore just as likely to purchase. Additionally, customers are also more likely to refer others who may also be interested your products. By leveraging the customer base you already have, this strategy is also cost-effective.
This referral strategy can also work particularly well during the holidays as it makes the most of the acquired customers that do fit your target market, and even one-off holiday customers may end up referring someone that does fit your typical target customer.
Rewarding customers and nurturing loyalty is a tried and tested strategy for effectively driving repeat sales. A loyalty scheme is another cost-effective strategy that looks outside the box of holiday season customer acquisition and focuses instead on current customers.
Loyalty schemes can be developed using a range of a metrics and can reward customers based on how often they purchase, their total number of purchases or the amount of money they’ve spent. Deciding the most suitable rewards programme for your business may depend on the average price of your products and the life cycle length.
All the information needed to help you decide on your loyalty scheme and segment your customers can easily be found in your ecommerce data making it remarkably easy to set up. For the holidays specifically, the Magento Holiday Dashboard can help you identify and reward profitable customers based on metrics such as their Average Order Value and Customer Lifetime Value.
Once your loyalty scheme is in place promote it on your website and via email, making it a permanent feature in email footers and at your checkout. For customers making their first purchase or returning just to browse, your rewards scheme just might be good enough to help encourage that next purchase.
Look to CRO
Conversion rate optimisation should always be a top priority for retailers. While all the strategies and techniques of CRO are aimed at improving the conversion rate of existing traffic, much of CRO can also encourage those customers to purchase again.
CRO techniques that focus on the ease and quality of the purchase experience can leave customers with a positive lasting impression and drive a repeat sale. A one-page, one-click checkout process as well as providing a range of payment and wallet methods helps facilitate a fast and easy shopping experience. Additionally, the ability to securely save payment and delivery information shows customers how easy it is to be a regular customer with your business. Just like your loyalty scheme, make sure these benefits are clear to customers from the outset.
There are also simple CRO techniques, such as having fast page loading times and an easy-to-use mobile site. While they may not directly influence repeat purchases, they do ensure that you don’t lose any potential repeat purchases due to a poor shopping experience. Your holiday customers may put up with substandard mobile to get the purchase out of the way, but they probably won’t be returning anytime soon.
Segmenting your customers and setting up email automation can be as simple or as complex as needed and can effectively drive repeat sales from customers at all points of the sales cycle. The versatility of email segmentation makes it a must-have strategy for retailers, particularly over the holidays when it can it be difficult to effectively cut through the noise.
Using ecommerce data, retailers can segment their email lists to send personalised targeted campaigns with the direct aim of encouraging repeat sales. This might include sending a reward or incentive to customers who have just made their first purchase, or sending personalised suggestions to more regular but currently, dormant customers based on their previous purchases.
Email automation can also help to this effect. If you sell product bundles or closely related product accessories, set up automated emails promoting these related products to customers who have already purchased one. Depending on the products, these emails may be best effective immediately after, or a month after the initial purchase. For example, items that need accessories or components replaced after a certain amount of time such as printers and ink cartridges.
For holiday customers, this could encourage them to buy related products as future gifts, such as with games after the purchase of a games console. It can also help show a wide range of your products. While they may have bought that automatic drill for their dad, a follow-up email could remind them that they themselves need a new toolbox.
Encouraging a repeat purchase can be as simple as being at the right place at the right time and staying front of mind. For retailers, this means utilising all their channels to consistently reach their customers. If your customers are spending some of their time on social media, then you should be too.
To be effective, retailers need to quality content that is engaging and targeted. This type of content should be of genuine interest to your customers, enticing enough to cut through the noise and diverse enough to prevent your customers from getting bored.
Sharing interesting content will encourage customers to keep you in their network, while promoting new products and services may encourage them to revisit your site. The moment a customer realises they need a new dress, might be the day they see your new stock on social media.
Additionally, high-quality content that speaks directly to your followers is more likely to engage customers. Whether it’s through competitions or simply an interesting news story, the more customers engage with your content the more visible it becomes across your network. Improving visibility helps your brand salience and can put you above your competition in the mind of your customers.
Repeat sales should be the foundation of any business, providing a reliable revenue stream to support the business year after year. If you would like help tailoring your ecommerce offering to encourage repeat sales, contact one of our team today.