For an online retailer, things are becoming even more complicated in terms of defining a digital marketing strategy and understanding the benefits of those strategies. The retailers who are winning in the online space are putting efforts to keep more customers and unlock their revenue potential.
Why is this important? Many online retailers are experiencing higher new customer acquisition costs due to increased competition in their space & more pressure to discount products via sales and promotions because of consumer trends to do more comparison shopping. With these industry trends, it is essential for online retailers to maximize their customer’s lifetime value – consider it the “secondary funnel” of driving customers to return and repeat purchases.
Here are a few ways online retailers can maximize their customer lifetime value:
- Keep customers engaged with your brand – Online retailers love to sell their own products but consider deploying messaging strategies to keep customers engaged with your brand during times that they are not in the market to purchase. Send out a birthday messages, ask them to review or comment on the product they have purchased, or even ask them to suggest a new product or give feedback on a product development initiative. This will keep your brand top-of-mind with your customers all year.
- Make sure customers can find you – If a customer has a good experience and is looking to repeat or return purchase, it is essential for brands to ensure they are found, but more importantly, to make sure their competitors aren’t. Proper optimization of your brands social properties, including Facebook, YouTube, and Google+ can help take up more organic search listings for your branded searches. Also, running branded paid campaigns can ensure you will maximize the real estate on your branded search engine result page, leading to less competitors, and more returning customers.
- Understand your customers and your products – Gaining a better understanding of you customers, their likes and dislikes, as well as your products, will allow more relevant messaging opportunities. When is your customer going to need a product replacement? Are there complimentary products to what they purchased? Knowing more about your customers will open up-sell and cross-sell opportunities within a dynamic messaging campaign, to maximize their revenue potential and keep them coming back.
According to Adobe, returning purchases generate 3x more revenue per visit and repeat purchasers generate 5x more revenue per visit than new shoppers. A customer retention and re-engagement strategy to increase lifetime value is a key element for long-term growth (and profitability) for online retailers.
Prepare for the August 2014 shopping search transition with Google Shopping and data feed optimization: