Now that the holiday rush is over, every retailer must have a plan in place to keep customers coming back and buying more in 2018. Make sure you’re encouraging customers to engage with your brand beyond the purchase, and delivering experiences that exceed their expectations.
The end of the holiday season and the beginning of the new year is a good time to assess the quality of the customers you’re acquiring, the strength of your existing customer relationships and the value of your VIP customers. While the holidays drive a significant share of ecommerce sales, the shoppers who buy from you for the first time on Black Friday or Cyber Monday are not statistically likely to be your most loyal customers in the long run. In fact, recent research from my company, Optimove, found that a disproportionate number of “one-timers”—shoppers who buy once and disappear—originate during November and December.
Don’t invest in acquiring more of these one-time transactions. Instead, strike a balance of acquiring high-quality customers while retaining your existing ones.
Here are three ways to make this resolution a reality in 2018:
1) Identify and reward your VIPs.
Across business verticals, the top 5 percent of customers are responsible for 60 percent of revenue on average—so it’s important to identify those customers early, and to do so accurately. To do this at scale, I recommend using supervised machine learning to identify early behavior patterns that hint at future VIP status. These patterns can later be coded into rules that will flag individuals as potential VIPs and enable your marketing team to send them dedicated offers, tailored messages and exclusive rewards.
Consider reaching out to your VIPs in advance of special occasions—new product releases, major sales, their birthday—and giving them access to your best deals. It will help your most valuable customers feel attended to, and you’ll ensure your most coveted items don’t run out of stock before they’re able to buy.
Sephora is well-known as an example of a brand that rewards its highest spenders. Its VIB Rouge program includes rewards, gifts and exclusive sales along with early access to new products, a private concierge and unlimited access to Sephora’s makeover studio. But whether you implement a full-scale loyalty program or take personalized actions around specific milestones, it’s the personal touch that counts—and nurtures that customer relationship for long-term gain.
2) Create a plan for post-holiday retention.
Plan for how you’ll retain new customers secured during the holiday season in order to nurture budding VIPs. Start by collecting the right data. Make sure you are able to identify customers across different platforms and unify all of their transactions and sessions. Don’t overlook attribution; you should be able to understand where all of your customers come from, and to estimate their lifetime value based on the source of acquisition.
Once you have a unified source of data about your existing customers, it’s much easier to tailor your promotions. With even the most basic segmentation—device type, product preference— you can better personalize your offers, identify cross-sell opportunities, and climb above the clutter to be more relevant than the competition.
3) Strategize for the long game.
Use your historical data to identify the channels that generate the most loyal customers, and invest there. I recently spoke about long-term retention strategies with Gannon Hall, head of product at the multi-brand e-commerce destination Spring. Gannon’s team has learned that the company’s most loyal and valuable customers are multi-platform users. Spring has built a great mobile app that offers exclusive sales and personalized suggestions, and Gannon prioritizes exposing new shoppers to this mobile experience.
Spring incentivizes customers to download the mobile app after purchasing via web, and reinforces this call-to-action through order confirmation and transaction emails. Customers who download the app and go through the onboarding process are proving to be more engaged—they have, on average, a 50 percent higher order value in the first 30 days and 10 percent higher lifetime value.
Looking forward: Don’t take your VIPs for granted
Remember that retention and acquisition are two parts of a holistic customer lifecycle, and you need to be investing in both. Don’t just think about how to convert more users—think about how you can turn one-time shoppers into long-term, high lifetime value customers and brand advocates.
Optimove provides cloud-based technology for targeted marketing through CRM automation.Favorite