A common misconception for consumer brands is that the marketing process ends at the point of purchase.
Instead, smart brands recognize that acustomer’s lifetime value— or the net profit that you’ll take in over the course of your entire relationship with a customer — is far more important than any singular purchase in terms of revenue and influence over others.
But that customer lifetime value will continue to stay low if they only shop in your store once and never return. The subject of luring customers into your storefront over and over again has become a hot topic in recent years for several reasons, including:
Intense Competition for Consumers’ Disposable Income
With direct-to-consumer brands popping up daily, and theside hustleeconomy enabled on platforms like Shopify, brands may only have one chance to capture the loyalty of customers before they move on to the next retailer.
捕获一个相当大的市场份额是密苏里州的一部分ob欧宝娱乐app下载地址re difficult these days, regardless of your product or service. With so many options available for consumers, stores and brands have to work hard to rise above the noise.
Proliferation of Social Networks
Historically, a customer that had an issue with a brand’s product or service had very little external recourse. They could tell their families, friends, and colleagues, but their reach was limited. Today, they can share their frustration with millions of other potential customers, and negatively rate brands on third-party sites such as Amazon or Yelp, which can have an exceedingly detrimental impact on sales.
In fact,according to a studyconducted by Harvard Business School for restaurants, a one-star difference on Yelp can lead to a 5-9% difference in annual revenue. Of course, the reverse is also true. Consumers that have positive experiences with brands are empowered to share their satisfaction with a far bigger network.
The increasing popularity of social networks has amplified the effects ofword-of-mouth marketing. While this method of marketing is one of the most old fashioned, it’s also one of the most powerful. It impacts 20% to 50% of all purchasing decisions, according to the research firmMcKinsey. And 92% of consumers will act upon recommendations from friends and family over any other form of advertising, based on research fromNielsen.
As such, brands have a powerful opportunity to engage consumers post purchase, improving not only the likelihood of return business, but the chance that they will share their positive experience with other potential customers.
Fuel your retention marketing with Shopify
Only Shopify lets you create customer profiles that unify online and in-store order history, preferences, and contact information. Use tags to build segmented mailing lists and increase customer lifetime value, make more relevant product recommendations, and more.
Shifting Consumer Behaviors
Today’s consumers expect more from brands. It’s no longer enough to convey the function of a product or service in marketing efforts; instead, consumers want to feel as if they are part of something bigger.
Brands like Toms Shoes and Warby Parker have gained massive, loyal followings at least in part because their products are closely aligned with philanthropic causes. Certainly, customers will still make impulse purchases, and will still consider price and convenience for specific buying decisions.
However, if a modern brand wants to engage and convert a potential customer, it needs to look at the relationship beyond the point of purchase and consider the deeper desires of the consumer. Doing so will help convert one-time shoppers into repeat customers.
Here are three strategies to get you started:
1. Create a Community Around Your Brand
Modern consumers want to shop with brands that align with their values and lifestyle choices. They believe there is power in the insights of their peers, and are more comfortable gaining product inspiration from one another than from brand messaging. With the advent of ad-blocking, especially, there is a need for better marketing and ecommerce experiences. Instead of resisting this trend, brands can lean into it by helping enable these experiences through curated consumer communities.
Such communities can help forge an ongoing emotional connection with your customers. This is crucial, because feelings drive buying decisions. Research shows thatemotions fuel customer choices before, during, and after purchases. Retail expert Georganne Bender ofKizer & Benderrecently said: “People’s buying decisions are influenced daily, and emotions play a huge impact on these decisions.”
Your customers are included in that group that makes spending decisions based on their emotions, and they’d likely spend more with your brand if they felt emotionally charged to do so.
Many brands in the financial services sector have done a good job with this strategy by creating the perception of exclusivity for their customers throughloyalty programs, partnerships, and other benefits given only to their audiences.
Content portals designed to help customers share these experiences with one another and rate potential benefits of various credit cards and other financial services offerings help relieve the complexity of the industry and replace it with a sense of community and shared experience.
One such example is BB&T, whichallows banking customers customize their portal dashboardwith “tiles” that include information that’s most relevant to them (think breakdowns of spending by category, sales receipts, etc.). This customizable experience gives customers control over how they view their finances at a glance, and spurs them to check their online banking more regularly.
2. Provide Utility to Customers Beyond the Purchase
As we’ve established, the belief that the pursuit of a customer ends after thepoint of saleis largely outmoded. Brands that are only focused on a singular selling opportunity are missing the bigger picture and leaving a ton of revenue potential on the table. By engaging customers post-purchase with education, value-add services, and complementary product offerings, brands can re-engage customers and drive additional purchasing behavior.
Keep the conversation going with customers after they leave your store.Post-purchase communicationis a vital step that keeps merchants and consumers connected; especially when you consider that attracting a new customercosts five times as muchas keeping an existing one.
READ OUR GUIDE:Want to keep the conversation going with customers? Check out our guide onpost-purchase communication strategies.
Much of this effort is enabled through intelligent data collection and segmenting. If you can create personas and audiences based on demographic data and prior purchasing behavior, you can serve up relevant messaging to entice repeat business. Not sure how to go about building buyer personas? Read our guide:How to Build Buyer Personas For Better Marketing.
The good news is that most customers, particularly millennials, are willing to give retailers their personal data in exchange for utility. In fact, according toAimia’s Global Loyalty Lensreport, 80% of consumers in 11 markets studied are willing to share personal information, with the idea that it will improve their experience with brands. However, just 23% are seeing that value through messaging highly relevant to their interests.
What does this mean, exactly? There is a disconnect between customers and brands, leaving plenty of opportunity for those able to adjust and create more personalized shopping experiences. Brands that can provide more utility to customers beyond the purchase will increase engagement, conversion, and long-term loyalty.
To cultivate a more customized experience for your shoppers, simply follow the steps we’ve outlined in “4 Ways to Personalize Your Customer’s Shopping Experience.”
3. Involve Shoppers in Your Marketing Efforts
在零售领域,具体地说,许多品牌基于“增大化现实”技术e turning to consumers’ own content as a way to better understand their target markets and provide them with incentives to repeat purchase behavior. With consumers sharing over 95 million photos per day on Instagram alone, many of which featuring brands and products, there is an enormous amount of insight that can be gained by viewing how consumers are considering brands and utilizing products in their day-to-day lives.
转发他们的品牌内容和鼓励我们ers to create using hashtags, through contests or other messaging, are seeing a wealth of high-quality visual content which helps to enhance the communal feel. Additionally, this content can be used to connect otherwise disparate marketing channels, in display advertising, social media, ecommerce, and even offline in print, direct mail, and outdoor activations.
According to a study conducted byWorldwide Business Research in collaboration with Olapic, 90% of retail leaders using this “earned” content in their campaigns are seeing measurably positive results. In short, consumers are looking to one another for inspiration and to spark loyalty. By enabling this trend for your audiences, you can reap the benefits of today’s consumer-to-consumer (C2C) marketplace.
Want some foolproof tactics to utilize this content? Read our4 Tactics to Drive Traffic and Sales With User-Generated Content.
Final Word
How are you working to turn your one-time shoppers into repeat customers? While these are just a few strategies to get started, it’s most important to choose an initial strategy and drive toward it confidently. From there, you can build a more sophisticated engagement strategy in time.
Fuel your retention marketing with Shopify
Only Shopify lets you create customer profiles that unify online and in-store order history, preferences, and contact information. Use tags to build segmented mailing lists and increase customer lifetime value, make more relevant product recommendations, and more.
customer lifetime value FAQ
What is customer lifetime value formula?
What is the difference between CLV and LTV?
How do you calculate lifetime value?
- Calculate the average sale or purchase amount for a customer over their lifetime.
- Calculate the average number of transactions or purchases a customer makes over their lifetime.
- Calculate the average customer retention rate or lifetime.
- Multiply the Average Sale or Purchase Amount by the Average Number of Transactions or Purchases to get the Average Lifetime Value.
- Multiply the Average Lifetime Value by the Customer Retention Rate to get the Lifetime Value.
