In the last installment of the “Complete Customer Journey” we talked about the Purchase. We discussed tactics and strategies to get people to the checkout page and convert them once they are there. Before that we had discussed Brand Awareness and Attracting Site Visits.
Today we will start step four in our journey. This step is about turning one time purchasers into repeat business. This stage will go over how to engage those who have bought before and entice them to come back and do it again.
We will look at why you should focus on repeat business rather than new business, strategies to engage your existing customers, and tips for providing an amazing customer experience.
Goals of This Stage
The goal of this step is to move away from paying to acquire a sale (like using Google Adwords) and begin to optimize your marketing to retain and profit from your existing customers. To do this we need to look at the different ways to engage customers that have purchased once before. The final goal is to create a customer experience that will create brand advocates. A great customer engagement plan and an amazing customer experience will lay the groundwork to create customers who will market for you.
Are You a Hunter/Gatherer or a Farmer?
Here at Smile.io we like to use a metaphor to illustrate different ecommerce growth strategies. Civilizations almost always start as a community of hunter-gatherers. When we needed something we would go out and find it. Which is similar to retailers in their early stages.
Early merchants are concerned with one thing, getting customers. Marketing strategies include PPC marketing, social media marketing, and mainly Google adwords. These strategies are similar to hunting. When we need food (customers) we go out and find it. The effort we put in is the result we get back. But early civilizations figured out that this alone couldn’t sustainably grow a community; just like merchants now are seeing it doesn’t create a sustainable business.
Our early ancestors turned from hunting food to producing food through farming. This allowed them to grow from small groups to much larger civilizations. Merchants can see the same results with their shops. Evolve from paying for acquisitions to growing through retention. Go from hunter gatherer to sustainable farmer.
Why Acquisition Alone is Not Sustainable
Many of the popular online advertising techniques including social media advertising and Google adwords are trending in a direction that is not advantageous for those using them. These online techniques are becoming more expensive and less effective.
The CPC (cost per click) that is being paid for a keyword on Google is becoming more expensive. To make things worse you are paying more for less. The price retailers are paying is rising much faster than and the average position they are receiving.
While Adwords may be effective for you now, it may be losing its effectiveness over time. If you are solely relying on Adwords it will become a very expensive way to generate one time buyers.
Social media marketing has its problems as well. While many people view social media as a free form of advertising, it is becoming increasingly difficult to keep it free. Organic views on social media are becoming more difficult to obtain.
Facebook business pages cites a 16% reach within your network if the post is not sponsored. Facebook has been encouraging marketers to buy social media ads. They have taken a position that fans and networks in the future will merely make paid advertising more effective. AdAge has done studies to show that the organic reach has dropped even further, citing the reach to be at about 6%.
In summary Facebook will become more expensive as we move forward. Will Facebook ads be sustainable into the future? I cannot say for sure but almost half of marketers polled think it is already an overrated way to advertise. There are some other startling stats coming from other social media platforms.
Are you using Twitter to generate customers? Well, 71% of the tweets you make are ignored and only 23% of tweets made generate a reply (iMedia Connection).
Want to use Google + for customer generation? The average Google + user spends a feeble 3 minutes a month on the network. If you are trying to reach young professionals on Linkedin you are wasting resources, only 20% of Linkedin users are under 30.
Are These Advertisements Useless?
Not at all! Only using these techniques will not sustain a profitable business, but they are very effective at getting your site/brand noticed early on. The downside is that adwords and social are becoming expensive ways to acquire a customer.
What I am saying is that you cannot rely on these types of advertising if you are paying for one time purchases. If you are using them in a hunter gatherer mindset you are not using them effectively. Use these mediums with a farmer mentality and they can become seeds for later profit.
Once you use these strategies to get a customer to purchase it is important to retain them. Many estimates put the cost to acquire a customer at 7X more expensive than retaining one. If you are using traditional online marketing to obtain make sure you follow it up with a retainment strategy.
Strategies for Customer Engagement and Repeat Business
As we said at the start, our goal in this stage is to generate repeat business from our existing customers. This is the farming strategy, we have customers so instead of going out and hunting for more let’s generate more from what we have. The way to to do this is through customer engagement.
All repeat business strategies focus on re-engaging customers who have bought in the past. There are three popular ways to get your existing customers to buy more. They are Newsletters, Targeted Email Marketing, and Loyalty Programs.
Newsletters are a very cost effective way to get customer engagement from your existing customers. The important thing with a newsletter is to not make it salesy. The newsletter should give your customers information they will find useful and is relevant to your brand. Remind your customers that you exist without asking them to buy (7 tips to create a newsletter).
The one problem with a newsletter is you have to get your customers to sign up for it. Which is often easier said than done. Popular ways to get emails from your customers is to incentivize them to register for an account when they buy.
Example from groominglounge.com
This can be done by providing a discount on the first purchase, a gift with the first purchase, or loyalty points. A newsletter is only effective if your customers are signing up for it. Make sure you are encouraging them to do so.
Targeted emails are a very effective way to re-engage. Simply sending a mass email out to all your existing customers just won’t cut it anymore. You need to show your customer that you understand them and their needs/wants.
You can do this by sending them promotions for things they have bought in the past. If they bought a dress from you last time send them other dresses that they may find interesting. You could send them gifts on their birthday, or send them specific emails when they perform certain actions on your site.
Dotmailer is one example of a program that can help you target your emails to specific customer actions. The trick with email marketing is to make it personal. If your customer feels like they are just a sales opportunity, then you haven’t created any customer engagement and it won’t lead to repeat business. You can check out the dotmailer blog for more tips on targeted email.
Once again this tactic is only useful if you can get your customers to provide their email address. Use incentives to generate an extensive customer list and start targeting for repeat business.
A loyalty program is very powerful re-engagement tool and can drive a lot of repeat business. An online loyalty program is different from their retail siblings because there is so much more you can reward.
Gone are the days of simply awarding points for dollars spent. With an online loyalty program you can encourage repeat business and encourage other profitable actions. This includes rewarding points for registering for an account, or signing up for email updates. This provides great synergies with the other customer re-engagement tools listed above.
A loyalty program encourages shoppers to preform profitable actions
Anyone looking to maximize repeat business from their existing customer base should look into all three of these options. When used together these tools create a very powerful re-engagement tool. Remember, a retained customer is more valuable than a new one. Use your marketing to take a farming approach rather than a hunter gather.
An Amazing Customer Experience
The step after repeat purchasers is brand advocates. Someone who continually gives you their repeat business is great. If you can get them to turn into a brand advocate that is even better.
Brand advocates are made when you are providing an amazing customer experience. The customer experience is enhanced in many ways, but here are 5 simple tips to boost customer experience.
5 Simple Tips for a Better Customer Experience
It is very difficult for someone to become an advocate of your brand if they don’t see your brand as human. Enhance your customer experience by providing human interactions when possible. Remove automated customer service reps, don’t leave your customer talking to a machine when they call, and give your social channels a human element.
Your customers are the best source of ideas for improvement. Listen to them! Encourage your customers to talk to you by following up after orders or periodically asking what they think. You never know what your customers will come up with. A great example is Starbucks’ my idea!
Starbuck’s’ my idea is great because it allows customers to make suggestions for products, process improvements, as well as feature additions. The site shows the latest customer suggestions and shows a list of items that have or will be implemented from customer suggestions.
This comes from great customer management. Customers love to feel like they are more than just a customer at your site. Use support systems to keep tabs on as much about each individual customer as you can. Have systems in place so that every employee knows about each customer regardless of if they have spoke in the past.
Not every customer is alike and no two business situations are alike. Be flexible in how you handle customer problems and do business. Accommodating a customers needs even if it is outside what you would normally do can be very beneficial later on. In fact 55% of customers are willing to pay more for a better customer experience.
No one likes to wait, including your customers. If they have a question or want to know more about a product you need to make sure you have someone to answer it. A great way to provide fast customer support is through Olark live chat.
Repeat business is what makes you sustainable in the long run. It is important to be aware that there are different types of marketing that help facilitate repeat business, including newsletters, email marketing, and loyalty programs.
When you have loyal repeat purchasers it is much easier to turn them into brand advocates, which we will discuss further in the next installment of the “Complete Customer Journey”.