Attracting new customers to your ecommerce site is important, of course. But many small business owners forget an equally important—and potentially more profitable—approach: getting existing customers to buy more and buy more often.
Increasing spending by your existing customers is a smart marketing move. First, it typically costs less and is easier to re-engage an existing customer than to attract a new one. In addition, existing customers are more valuable than new ones, as a study by RJ Metrics shows.
The study reports that over time, the top 1 percent of an ecommerce retailer’s customers typically spend as much as the bottom 50 percent. The average online order value placed by the bottom 90 percent of shoppers is $54, RJMetrics says. In contrast, a loyal customer in the top 10 percent spends an average of $163 per order, while a customer in the top 1 percent spends an average of $267 per order—five times as much as the bottom 50 percent.
How can you get existing customers to buy more and more often? Try these tactics:
- Use existing customer data to personalize and target your marketing outreach. Send customers emails based on their past purchasing history. For example, if you notice a customer typically buys children’s clothing during the back-to-school season, target her early in the season with special offers and discounts. Or if you notice a customer always buys swimsuits, target her with those offers.
- Cross-sell and upsell. Use technology that displays related products in the sidebar based on a customer’s browsing history and/or the product he or she is currently viewing. At checkout, suggest last-minute related purchases that might complement what the customer is buying.
- Offer better customer service. Add-ons such as gift wrap, express delivery and other “extras” that you can charge for provide a better shopping experience for customers…and a better revenue stream for you.
- Use time-limited offers to draw customers back. For instance, if someone spends $50, give them a $10 gift certificate but require them to use it in the next 2 weeks.
- Develop loyalty and rewards programs that reward existing customers with discounts, free gifts or special offers when they buy more or more often.
- Base discounts on purchasing level. For instance, you might offer $10 off a $50 purchase, $20 off a $75 purchase and $30 off a $100 purchase. Or offer free shipping, but only after a certain purchasing level is reached.
- Make it as simple as possible to return or exchange purchases. When customers know they won’t have to go through a hassle to get their money back, they’re more likely to place larger orders. For example, offer free return shipping or the ability to return products purchased online in-store.
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