Are you wasting valuable marketing resources acquiring new customers, while ignoring existing ones? If your customers don’t stick around long after their first purchase, are they really worth the investment?
Seventy percent of companies agree that it’s cheaper to retain existing customers than acquire new ones. In fact, an existing customer is three to 12 times more likely to buy than a new prospect.
While the value of repeat business is clear, it can be difficult to pinpoint why most of your first-time buyers aren’t returning. Below are a few ideas to help you to figure out why your customers abandon you and how to improve repeat purchases.
1. You don’t understand what they want
Fix: Understand your lapsed customers.
What’s the best way to figure out why your customers are abandoning you? The easiest way is to ask them directly.
Surveying your lapsed customers about why they decided to abandon you will help you to figure out the loopholes in your retention strategy. Similarly, you can create an email survey to determine why they stopped making purchases from your site. This way, you can fix the issues in your retention strategy and keep them engaged with your website longer.
Gathering feedback from your customers is easy with a tool like SurveyMonkey or WPForms. Be sure to follow best practices for survey design, including following all legal guidelines. See these 10 questions to ask when gathering customer data to get started.
2. You don’t encourage repeat purchases
Fix: Start a subscription model business.
Subscriptions are a win-win for you and your customer. Your business is ensured recurring revenue from repeat customers, while your customers gain peace of mind since they don’t have to worry about reordering or running out.
Running a subscription model business has plenty of other benefits:
- Better return on investment: Compared with a product-to-consumer business, converting a first-time customer to a repeat customer is much more cost-effective than acquiring new customers all the time.
- Improved lifetime customer value: With a subscription model, customers tend to stick around longer and pay more whenever they make a purchase.
- More accurate revenue prediction: Because revenue is generated through recurring sales, you can predict it more precisely. This helps you to optimize your expansion plan, set a marketing budget and better manage your inventory.
Tools to seamlessly integrate recurring billing into your ecommerce store include ReCharge for Shopify or Stripe Subscriptions. See these five essentials for building a subscription business for ideas on how to incorporate recurring payments into your business model.
3. You don’t value reengagement
Fix: Incentivize re-engagement with remarketing.
Remarketing is a cost-effective advertising method that lets you target your potential customers on different marketing channels after they leave your site. With remarketing, you can create a personalized ad reminding your customers of their recent activity, and encourage them to take a desired action.
Remarketing is absolutely essential for ecommerce retailers, and Facebook remarketing is perfect to combat abandonment. Facebook ads are inherently visual, which is ideal for highlighting the qualities of your products that attracted your visitors in the first place.
Below are a few ways you can use Facebook remarketing to bring customers back to your site:
- Combat shopping cart abandonment: With Facebook Custom Audience, you can target your customers who’ve abandoned their shopping cart, and display a personalized ad encouraging them to complete the checkout process.
- Cross sell related products: You can create a list of recent customers and target them with a personalized ad featuring a product that is related to their recent purchase.
- Incentivize re-engagement: According to a study by RJMetrics, only 32 percent of customers placed a second order on an ecommerce store during the first year. One of the best ways to encourage your existing customers to re-engage with your site is by is incentivizing re-engagement. For example, you can create a special offer on a type of product the customer purchased previously on your remarketing ad.
See Facebook’s Custom Audiences guide to get started with Facebook remarketing, or check out the retargeting and prospecting platform AdRoll for an alternative to reach your customers across the web.
4. You give up on abandoning visitors
Fix: Use an exit-intent popup.
So far we’ve looked at offsite retargeting, the traditional PPC based method that lets you target customers who left your site.
Even though offsite retargeting is a cost-effective advertising method, you still have to spend your advertising budget since you’re targeting customers on different marketing channels.
With onsite retargeting, you can convert visitors into leads before they leave your site, without having to pay for advertising. Onsite retargeting is all about detecting user behavior and prompting them with a targeted message at the precise moment they’re about to leave.
With an optin builder tool like OptinMonster, you can easily create an exit-intent popup prompting your customers to enter their email so you can stay in touch even if they’re not ready to buy immediately.
Below are a few ways you can use exit-intent popup on your ecommerce site to increase conversions:
- Offer a special discount: You can offer a special discount to encourage on the spot purchases. You can also improve the average order value by offering a discount coupon only to users who makes a purchase above a threshold value.
- Invite to download your lead magnet: If you also have a blog, you can invite your readers to join your email list and download your lead magnet using an exit intent popup. Most of your first-time visitors won’t return to your site, so adding them to your email list is a great strategy to create a connection with them.
5. You don’t focus on customer loyalty
Fix: Create a loyalty program.
Want to incentivize repeat purchases? Then you’ll have to create a loyalty program for your ecommerce business.
According to a study, loyalty program can increase a brand’s market share by as much as 20 percent. And 84 percent of consumers say they are more likely to visit the website of a retailer with a loyalty program.
If you’re looking to start a loyalty program, start by listening to your existing customers and using the information you gain to develop a program based on their feedback.
While you can encourage your customers to spend more on your store, make sure to reward your customers for every customer action like product reviews, newsletter signups, etc. But make sure that every action is geared towards growing your sales.
LoyaltyLion is a popular ecommerce-specific tool to increase customer lifetime value by rewarding activity. See these four steps to launching a loyalty program before you get started.
It’s vital to your business that you understand why your customers abandon you. Once you get the data, you can identify possible reasons for abandonment and conduct experiments to improve re-engagement. By following these fixes, you can keep those customers longer who would otherwise abandon you.
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