Driving a second purchase is crucial to converting a first-time buyer into a loyal customer, but trickier than ever in the digital age. Here are 5 tactics that can lead to more buyers making repeat purchases.

Tasso Argryros, CEO, ActionIQ

Tasso Argyros, CEO, ActionIQ

Traditionally, retail marketers have focused their efforts on acquiring new customers, confident that a certain portion of them would end up adopting their brand for the long term. But in the digital age when consumers have so many choices at their fingertips, customer loyalty has become a far trickier proposition. That’s why forward-thinking marketers need to keep a razor-sharp focus on driving second purchases—a critical step in converting one-time buyers into loyal customers..

The potential upside for these efforts is huge—even if you move the needle on only a small percentage of one-time customers. Across retail verticals, approximately 60% of customers tend to make only one purchase from any given brand. Yet a small group of customers—around 20%—tend to provide 80% of retailers’ revenue. That means that if you can convert, say, just 2-3% more of those first-time buyers into loyal customers, you can increase revenues by close to 7-10%. And securing that vital second purchase is the critical first step.

Just as there are big upsides for leaders, there are  serious downsides for laggards. They risk losing evermore ground to savvier competitors—specifically, competitors able to leverage the valuable data gathered during a consumer’s first purchase to quickly create hyper-targeted, cross-channel campaigns that drive second purchases.

In the age of the fickle consumer, a strong second-purchase strategy is the surest first step to re-establish brand loyalty.

While most retailers may have an abundance of customer data locked somewhere across their various systems, they still lack the systems and processes to use more than a tiny portion of that data— especially to support the fast turnaround that effective second-purchase campaigns require.  


Sound familiar? Here are five key steps to help you pull ahead in the race to transform one-time buyers into long-term customers.

Step 1. Measure your window of opportunity.

Time is a crucial factor when it comes to securing that critical second purchase. The industry rule of thumb is that you have 90 days to capitalize on the opportunity. However, that number varies widely between industry segments and even individual businesses. So the first step in driving second purchases is to calculate  your own window of opportunity, whether it is a week, a month, a quarter or a year.

To measure your own window, you need broad historical insight into when individual customers made their first purchase, how long it took repeat buyers to complete their second purchase—and at what point the chances of conversion drop precipitously. Such insight requires not only comprehensive, granular information about customer transactions, but also the ability to connect transactions across multiple channels to an individual customer’s ID.


Step 2. Empower marketers to act at speed.

Clearly, time is of the essence when driving second purchases. The good news is, marketers have just gained valuable customer insight based on the first purchase, from their channel preference to demographic details. However, marketers don’t have time to wait  for IT or analytic experts to gather that data, discover insights, and create the targeted segments based on all that information. Yet currently, most retail marketers find themselves in this hurry-up-and-wait quandary.

The solution?  Marketers should be able to create highly targeted segments on the data just gathered during the first purchase in real-time—for example, based on knowledge of a customers’ ZIP code, product purchased or total spend. The ability to do this quickly will separate the brands with high customer loyalty from the rest. 


Step 3. Identify highly targeted, personalized second-purchase offers.

Ultimately, marketers should use all that customer data and insights to identify the next product that first-time customers are mostly likely to want or need. However, marketers must go beyond the generic “people who bought x, also bought y” model.

For example, customers in one region may be far more likely to buy practical snow boots with a winter coat, while in another region it might be a stylish scarf or other accessory. Potential “look-alike” customers—consumers who share a set of behavioral or demographic traits with existing customers— are out there, but marketers can only discover them with deep historical insight into customer behavior. Just as important, marketers must be able to access and act on these insights at speed, given the short window of opportunity to drive second purchases. .  

Step 4. Fail fast, refine fast, test everything.


While insight-driven second offers can be very effective, they are obviously not going to work with every single consumer. However, customer responses to these offers across channels—even failures—provide invaluable insights going forward. The faster a retailer can draw these insights, the quicker they will be able to create refined, targets offers to first-time customers during that critical 90-day window.

Step 5. Use all that insight to build effective win-back campaigns.

There will inevitably be a set of customers a retailer is not be able to convert during the 90-day window, but the steps above will provide a wealth of insight to continue refining winback campaigns going forward. After all, these consumers have already demonstrated their willingness to buy from the brand.

Until now, such a sharply focused approach to second-purchase campaigns has been the privilege of digital-first leaders like Amazon, who have customer data built deeply into their DNA. However, a new generation of customer data solutions are enabling more traditional retailers to catch up. In the age of the fickle consumer, a strong second-purchase strategy  is the surest first step to re-establish brand loyalty, something retailers can no longer afford to take for granted.


ActionIQ provides customer data technology designed to improve personalization, sales and customer retention.