How much time and marketing dollars do you spend getting new customers to visit and shop on your ecommerce site? Chances are, it’s a lot. We understand, ecommerce is a numbers game and your goal is to increase new buyers. But the time consuming and costly efforts to acquire new customers can divert attention away from your greatest source of profits…repeat buyers. Having a healthy Repeat Customer Rate is the foundation of a solid ecommerce business.  

Depending on the industry, most reports estimate that acquiring new customers can cost 4 to 10 times more than the cost of keeping the ones you have. A study by Harvard Business School and Bain and Company also revealed that increasing repeat customer rates by 5% can increase profits anywhere from 25% to 95%.  

Trust = Loyalty

To gain the loyalty and repeat business of online shoppers, experts say you must first gain their trust. A survey by the Harvard Business Review asked ecommerce shoppers to name the attributes most important to them when shopping online. The number one answer was “a website I know and trust,” coming in behind low cost and broad selection.

“Price does not rule the web, trust does.” -Harvard Business Review

Amazon is a shining example of how to create trust and loyalty. Millions of customers trust Amazon to store their contact and credit card information. The resulting convenience of one-click shopping is largely why customers return and a major factor in Amazon’s competitive edge.  

 Another online retailer that understands the power of loyalty is Zappos. The ecommerce shoe store generates over $1 billion in sales while spending only $32 million in advertising. Company executives view any expense that enhances the customer experience as a marketing cost because it generates more repeat shoppers through word of mouth.  

4 Methods to Increase Loyalty

1. Loyalty programs

Loyalty programs are one of the most effective tools for increasing repeat shoppers. They not only encourage repeat business, but are also used to reward profitable actions like an account sign up or customer referral. The key to successful loyalty programs is to convey enough additional value to keep your customers coming.  There are several models for loyalty programs including:

 
• Flat discount offered to all loyalty program members
 
• Tiered rewards based on amount of purchase activity
 
• Personalized offers based on customer shopping habits

Gilt, an online clothing site with a focus on flash sales, offers a unique and successful loyalty program. Rewards customers are given points each time they visit the Gilt website. Loyalty members also earn points when they make a purchase and refer a friend.  

2. Email Campaigns

Retention emails are one of the easiest and cost effective tactics for motivating repeat buyers. Email your regular customer base offers that encourage them to come back. By identifying customers that have been gone a longer than average time you can make a more valuable offer.

3. Segment repeat customers

The more you can segment your repeat customer base by defined demographics, the more strategic you can be in your marketing efforts. That effort requires careful tracking of data on return visits, click-through rates, ad engagements and purchase history . Personalized content can significantly increase conversion rates. According to Aberdeen research, 96% of organizations believe personalization techniques can improve marketing performance.

4. Invest in high value customers

Don’t forget about repeat customers when planning your marketing budget! Industry experts recommend setting aside 25% of your marketing dollars toward returning customers. From that group, identify the highest value customers and invest more resources to keep them coming back.  

‍For ecommerce businesses, the message is clear: it’s difficult to generate long-term profits unless you achieve superior customer loyalty. Make sure your plans to attract new shoppers to your ecommerce site also include a strategy to keep them coming back to buy more.