How-To Rethinking Retail: How to Increase Customer Stickiness

By Ben Kruger

Welcome back to Bluecore’s Rethinking Retail video series, where we arm you with tips to make your marketing program more effective and hopefully inspire you to rethink the way you approach retail marketing.

Today’s session tackles the one-and-done buyer problem. We hear from a lot of retailers that once they get shoppers to make a first purchase, they struggle to get those shoppers to buy again. With that in mind, let’s talk about how you can increase the lifetime value of your new customers and get them sticking with your store for much longer.

Check out the video here or read the full text below:

 

The Customer Stickiness Opportunity

Let’s dive in and look at the opportunity that exists. On average, we see that 80% of a retailer’s customers are one-time buyers. That’s obviously a huge problem, but at the same time it’s a huge opportunity. It 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 personalize messages to get them to buy again.

Notably, getting these one-time buyers to make a second purchase has a huge impact on your bottom line. If you can get a one-time buyer to make a second purchase, you can increase their 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? Getting customers to make a second purchase presents a huge opportunity to grow lifetime value and increase the chances of them sticking with your brand for years to come.

 

The Facts About 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? There are two levers you can pull to personalize messages and get customers to come back and make that second purchase (and beyond). Both require you to review your historical purchase data from customers who did buy for a second time to gather insights that you can apply to campaigns targeting one-time buyers going forward. Those levers are:

1) Timing

To start, look at the average time to next purchase for two-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, you will still get customers who make a second purchase, but the likelihood of those purchases decreases significantly. As a result, you should focus your second purchase efforts during the first 100 days after a customer makes their first purchase.

2) Content

Next, evaluate the category from which customers are most likely to purchase based on what they bought the first time around. Not surprisingly, we see a lot of customers buy from the same category for their second purchase as they did for their first purchase. Whatever the outcome of your analysis is, 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.

 

How to Increase Customer Stickiness

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 and the 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 email templates that send at set times 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 tshirt).
  • 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) to keep them re-stocking those items.

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 increase customer 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.

For more on what it takes to get customers to buy again, check out our second purchase playbook.

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