How To Build a Loyal Audience of Repeat Customers
Tell me, do you want to skyrocket your sales growth online?
Every single business owner I talk to – clients, students and others alike – wants to grow their sales in 2016. (Actually scratch that – I do have one client who told me I’ve made her so busy she can’t focus on growth right now, she’s too busy ramping up her production to keep up with orders! But I digress…)
The power of online customer loyalty
Back in the early days of of eCommerce, it was believed that customers were not loyal to any particular online retailer.
The World Wide Web seemed to make customer loyalty irrelevant; at the click of a mouse, shoppers could effortlessly cover the globe in search of the lowest price, with little to hold them at one site.
(I would argue that many business owners who sell online today still work off this assumption, with the result that the one and only tactic they use to convert new sales is a discount or low-price strategy!)
Yet, while it’s true that online shoppers can skip easily from one site to the next, what’s actually happened is that many online shoppers are actually highly loyal to their favourite online store.
Tools such as Internet bookmarks and highly engaging content (including email and social media) have led to online shopping patterns that are loyal, almost addictive.
Today, loyal shoppers visit their favourite sites far more frequently than they would any bricks-and-mortar store. And as a Productpreneur – you want to be that website, right?
And it gets even better: high levels of customer loyalty can have an enormous impact on the profitability of your website sales.
A study by Bain & Company, Inc, demonstrated that online customer loyalty is a crucial factor in profitability, even more so than for offline companies. It also showed that small changes in loyalty alone, especially among the most profitable customers, can account for much higher profits in the longer term.
And by small changes – even a 5% increase in customer loyalty (repeat purchases from existing customers) can result in up to 95% growth in profits!
So, why does customer loyalty have such a large impact on a website’s profitability?
1. You won’t break even on one-time shoppers.
Because customer acquisition costs in e-commerce are high (that is the cost of converting a website visitor into a paying customer, such as the cost of advertising), to recoup your investment you need to convince customers to return to your site time and again.
For example, the average online apparel shopper in this example wasn't profitable for the retailer until he or she had shopped at the site four times. This implies that the retailer had to retain the customer for 12 months just to break even!
2. Repeat purchasers spend more and generate larger transactions.
The longer their relationship with an online retailer, the more customers spent in a given period of time. In the example shown above, the average repeat customer spent 67% more in months 31-36 of his or her shopping relationship than in months zero-to-six.
3. Repeat customers refer more people and bring in more business.
Word of mouth is the single most effective and economical way online retailers grow their business. Word of mouth referrals have the highest trust rating and new customers are likely to place their first order within 2 weeks of receiving that referral!
And loyalty, it turns out, can be a key driver for referrals. On average, a customer will refer three people after their first purchase, and after 10 purchases that same shopper had referred seven people to the site!
4. Referrals are powerful selling tools
It’s not surprising that 71% of online shoppers read reviews before they buy (Forrester Research).
Here’s a couple more impressive stats to wrap your brain around: according to Nielsen, 92% of people trust referrals from people they know, AND people are 4 times more likely to buy when referred by a friend.
If ever there was a reason to make sure your customers are happy, this would be it!
How to make sure your customers are happy and coming back for more??
(Other than making sure the product or service you sell them is absolutely sensational of course!)
There’s an important thing you should do with all new customers after their first purchase and, in digital marketing speak, it’s called “on-boarding”.
So what the heck is on-boarding and, more importantly, HOW do you do it?
Essentially it’s welcoming new customers to your business and brand and ensuring their experience using or consuming your products is as enjoyable and successful as possible.
And the reason I want to introduce you to the term ‘on-boarding’ is because this is actually something you can automate in your marketing automation email application.
The on-boarding process in action
So, once a new customer places their first order with you, that purchase transaction should automatically trigger an email campaign as follows:
Example of a New Customer Email Campaign:
1. Welcome to “Brand Name” family (send immediately)
2. Share a ‘before and after’ transformation or case study, to reinforce decision to buy (send 3 days later)
3. Did your product arrive and is everything OK? (Send 2 days after your product should have arrived)
4. Share ‘how to use’ tips and tricks to ensure your customer can successfully use your product (send 3 days later)
5. Invitation to social media (for example, ‘show us what adventures your (insert product) has been up to! Tag us on Instagram)
6. Request a product review (send 3 days later)
7. Time-sensitive promotion – should be a cross sell or up-sell, related to the product they purchased (send 3 days later)
8. Follow-up reminder #1 about time sensitive promotion (send 2 days later)
9. Follow-up reminder #2 about time sensitive promotion (send 1 day later)
Now, in order to run automated campaigns triggered by a purchase, you will need to be using a marketing automation application – something like ActiveCampaign, or my preferred tool of choice Infusionsoft.
That way, it’s all hands-off for you, yet your customers are receiving relevant, personalised emails that are targeted towards their specific interests and the stage they’re at in their customer journey.
Download my Customer Onboarding campaign guide
Download my free guide for more help on how to create your own new customer onboarding email campaign. It includes a system for follow-ups that you can plug-and-play into your own business.
Catherine Langman is the Founder and CEO of Productpreneur Marketing. Her passion is to help entrepreneurs with innovative, niche products to plan for growth, to get their products in the hands of more people, and to become a household brand (whilst stressing less, working smarter and enjoying yourself as much as possible!) An award-winning business owner herself, Catherine has extensive professional experience in product development, brand communications, digital design and online marketing for eCommerce businesses and direct-to-consumer brands.
As the founder and CEO of Mums With Hustle, I have the best day job in the world: teaching entrepreneurs how to grow their beautiful businesses online. When I started the business, that was everything I wanted, but since then, it has grown into something much bigger. Now, I get my joy from helping women find their zones of genius within a community that truly celebrates their success. I truly believe that when women choose to band together, we can do anything - and if you feel the same, there’s a place in the MWH community for you.
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