Loyal, repeat shoppers convert easily, spend more, cost less to service, and help spread the word about good online shopping experiences. Earning long-term customers can significantly improve an ecommerce business.
Loyal shoppers demonstrate conversion rates 5-to-9 times greater than first-time buyers, according to data from Marketing Metrics, eConsultancy, and Adobe.
In the U.S., repeat shoppers, who represented just 8 percent of all site visitors, accounted for nearly 41 percent of total online sales, according to a 2012 Adobe report, “The ROI from Marketing to Existing Online Customers.”
A single repeat shopper could be worth many new customers. Consider that customers making a second purchase may spend 3 times as much per visit as first time shoppers, according to Adobe. While true repeat customers who have made three or more purchases may spend 5 times as much per visit as new customers.
Loyal shoppers may also influence others, generating additional sales for an online retailer through word-of-mouth or mentions in social media. Business professor Stephen W. Brown called this influence the “Loyalty Ripple Effect” and argued that it might be as valuable to a business as direct sales.
Given this information about loyal shoppers, it should be clear that repeat customers are worth having. The challenge for online merchants is earning repeat business. To meet this challenge there are six behaviors that online retail businesses may adopt, including offering high quality products, providing excellent customer service, selling at good prices, making the buying process easy and convenient, rewarding repeat purchases, and saying, “thank you.”
Offer Quality Products
Intuitively, online retailers know that customers will not return a second or third time to purchase a low quality product that crumbled or broke soon after it arrived. The first step in building a cadre of loyal, repeat shoppers is offering good products.
To ensure that a business is selling high quality products, it should vet suppliers, test samples, and monitor return rates.
Provide Excellent Customer Service
Some 72 percent of respondents to a 2012 survey from Zendesk, the customer support software, said that customer service was what made them loyal to a particular brand or business.
Excellent customer service should be responsive and effective. As an example, a repeat Zappos shopper purchased a new pair of shoes for her son about two weeks ago — her husband related the story to me during a meeting. Within two days of arrival, one of the shoes broke. The customer emailed Zappos, and Zappos responded in less than five minutes. A new pair of shoes went out that day via overnight shipping; a return label was ready immediately; and the Zappos representative was “very sorry” for the trouble.
To provide great customer service, be available, be responsive, and focus on making the shopper happy. Remember the goal is to build a long-term relationship.
Sell at Competitive Prices
Price matters, especially for branded, consumable items.
Here is an example, Nutri-Vet’s Equine Joint Supplement reduces joint pain and improves flexibility in older horses. It is available at dozens of online stores, and many horse owners consider it a must purchase item. Each of those horse owners, no doubt, has a favorite store.
In spite of that apparent loyalty, a significant difference in price could get a customer to change stores.
One shopper in Florida did just that. For several years, she bought three Nutri-Vet’s Equine Joint Supplement pals from an ecommerce website every month that sold the 3.75-pounds pals for $79.99 for a 3.75-pound.
This buyer liked the site's shopping experience, but the exact same product was available for $75.99 — $4 less — at a competitor's site. Given that this customer buys 36 pals a year, the savings amounted to $144 annually, which was more than enough to encourage her to switch.
Ensure that selling prices are competitive. It is a must for keeping repeat customers.
Be Very Convenient
Shopping online should be easy. The aforementioned Zendesk report found that more than 40 percent of shoppers said that convenience contributed to brand loyalty.
Offer customer accounts so that repeat shoppers may easily login and make a purchase without having to complete a long checkout form. If possible, let shoppers log in using social media networks like Facebook, Twitter, and now, Google+.
Reward Repeat Purchasers
Everyone likes to be treated well, and repeat customers are no exception.
Progressive, the insurance company, is an example. Progressive makes its best — long term — customers “Emerald Members.” When an Emerald Member calls Progressive's service center that customer is moved to the front of the line and given immediate service. A recorded message tells the caller about the privilege.
Consider offering repeat shoppers expedited shipping, faster customer service response times, or even special sales and offers.
Never Stop Saying “Thank You”
Telling a repeat customer “thank you” costs almost nothing. But it has a huge impact. KISSmetrics, the analytics firm, reported this month that “as many as 3 out of 4 customers say they have spent more with a company because of a history of positive experiences. Kindness and gratitude for a customer’s business is an undeniable way to further enchant them for the long term.”
Try doing it often. In fact, make it a habit to send any shopper who makes more than two purchases a hand signed thank you card. It will go a long way toward building long-term relationships.