Customer Stickiness: What It Is & How to Increase It
Many retailers share a similar problem: Once they get shoppers to make a first purchase, they struggle to get those shoppers to buy again. In fact, 80% of the average retailer’s customers are one-time buyers. That’s obviously a huge problem, but at the same time it’s a huge opportunity.
Having a high number of one-time buyers means you have a large share of existing customers that you can tap into to drive additional revenue. And because these customers have already made a purchase, you have clear information on their interests that should make it easier to create personalized messages that will turn them into long-term, loyal customers.
By combining customer, behavior and product data, your retail marketing team can tap into a customer’s product preferences and convince them to purchase again and again — increasing customer stickiness. Read on or watch the video below to dive further into exactly what customer stickiness is and examine steps your brand can start taking today to improve it.
What is Customer Stickiness?
Customer stickiness describes when a customer chooses to buy a product from your store more than once due to aspects of your value proposition, such as your product quality, convenience, pricing, engagement experience and other transactional factors. By increasing customer stickiness, you will create more value for your business.
Getting these one-time buyers to make a second purchase has a huge impact on your bottom line – it could even increase customer lifetime value by up to 130%. That’s because once you get a customer to go from one purchase to two purchases, you increase their chance of making yet another purchase by 95%. And every time they make another purchase, the likelihood they’ll buy again continues to increase.
The bottom line? Convincing customers to purchase from your store on multiple occasions presents a huge opportunity to grow lifetime value and increase the chances of them sticking with your brand for years to come.
The Difference Between Customer Stickiness and Loyalty
Customer stickiness and customer loyalty are both valuable aspects of customer retention that retailers should strive to improve. Like customer stickiness, customer loyalty describes when an individual purchases from your brand on a continuous basis. However, the difference between stickiness and loyalty lies in why that individual purchases more than once.
While customer stickiness focuses on the transactional value customers get from shopping at your store, customer loyalty focuses more on your brand’s emotional and relational value to the customer. Loyalty is borne out of a long-term, trusting relationship between customers and your brand — and when customers are loyal, they will continue to purchase from your brand even if a competitor has offerings that are less expensive or higher quality.
Customer stickiness, on the other hand, tends to target newly acquired customers, and relies on offering a high-value shopping experience on a consistent basis through factors like convenience and relevance. For instance, perfectly timed replenishment reminders or personalized cross-category product recommendations offer convenient access to new products. These activities play a part in improving the transactional value behind your brand, increasing stickiness and laying the foundation for customer loyalty.
This isn’t to say one is more important than the other. In fact, customer stickiness is a fundamental stepping stone that leads to customer loyalty. When you consistently offer and promote products that customers will want, they’re more likely to instinctively return to your store for more relevant and useful products. For that reason, retailers should focus on growing customer stickiness to improve customer loyalty.
How to Increase Customer Stickiness
If you can get customers to make another purchase from your store, their spend and lifetime value will increase. So, how do you do it?
First, you should take a baseline of your current customer stickiness. Take a random sample of customers and measure how many have made two or more purchases from your store. For the average retailer, this should hover at about 20 percent. Once you’ve taken a benchmark, you can determine the success of your efforts to improve customer stickiness.
Once you’ve established a baseline, review historical purchase data from customers who did purchase from your store for a second time. Then, use the insights contained in that data to design and target future campaigns for one-time buyers. This will help you understand what drives a certain type of customer to purchase more than once.
When reviewing historical purchase data, there are three primary factors that keep customers coming back. Retailers should find an average customer’s time to next purchase, discover product or category affinities and create personalized content with product recommendations. Let’s take a closer look.
1) Evaluate Time to Next Purchase
First, look at the average time to next purchase for one-time buyers. Looking across a variety of retailers, on average we see that shoppers are most likely to purchase again within 100 days of their first purchase. Beyond that 100-day mark, some customers will make a second purchase, but the likelihood of those purchases decreases significantly. Generally, you should focus your second purchase efforts during the first 100 days after a customer makes their first purchase – however, this can vary depending on the retailer. It’s recommended to learn the average time to next purchase for your particular brand.
2) Find Affinities
Next, determine which items customers may want to purchase next based on their first purchase. Broadly speaking, many customers buy from the same category for their second purchase as they did for their first purchase. To determine affinities for specific types of customers, your team should use an AI-driven retail marketing platform to analyze product or category affinities using customer, behavior and product data.
3) Send Personalized Content
Once you’ve determined a typical customer’s time to next purchase and affinities, you can use that information to personalize content. For example, if a customer bought a shirt for their first purchase, you might send them an email showing more shirts they might like. Or if their first purchase was a replenishable product like eyeliner, you might send an email featuring the same exact product with a reminder to refill.
Once you gather insights from all of your customers who did go on to make a second purchase, it’s time to use that data to take action and convert your one-time buyers into two-time buyers.
Specifically, you can pair the timing, affinities and personalized content to create journeys that nurture customers and get them to come back for that second time. Focusing on email, you can build a few triggered email templates after a customer’s first purchase and dynamically pull in content based on what you know each customer is most likely to purchase next.
Once you do get that second purchase, you can focus on expanding and increasing each customer’s lifetime value even more. Three of the best ways we’ve seen retailers to do that successfully are:
- Complete the look recommendations: Expand the variety of products customers buy within a single category (e.g. recommending eyeliner to someone who bought eyeshadow or recommending a cardigan to someone who bought a t-shirt).
- New category recommendations: Get customers to buy from entirely new categories to further expand what they buy from you (e.g. recommending bedroom furniture to someone who bought living room furniture or recommending accessories to someone who bought pants).
- Replenishment recommendations: Continue to nurture customers within their original purchase category (and any new categories they might purchase from along the way).
Ideally, all of those recommendations will work together to keep your customers coming back and making repeat purchases.
Are You Ready to Rethink Customer Stickiness?
There you have it: A look at the opportunity to drive stickiness and advice on how to make it happen. Hopefully this approach has inspired you to solve that one-and-done buyer problem and keep your customers around for years to come.