One regular customer is worthy of 7 new ones
“Experience has shown that endlessly search for new clients distracts marketers from their goal. Only enthusiastic regular customers bring in profits and attract new clients, who then keep returning on their own.”
This was confirmed by Adobe (American company), which in the current edition of Adobe Digital Index separates Internet customers into three categories:
- shoppers (no previous purchase)
- returning purchasers (one previous purchase)
- repeat purchasers (multiple previous purchases)
The report concludes that companies using advertising expenditure to increase the conversion rate of repeat purchasers achieve increased profits in the long run.
The Adobe report analyzed 33 billion visits, from PCs, tablets and smartphones, made to more than 180 online stores in the United States and Europe, from April 2011 through June 2012. Findings from the report include:
- In the US, 40% of revenue comes from returning or repeat purchasers
- These represent only 8% of all e-shop visitors
- Marketers in the United States and Europe must bring in 5 and 7 shoppers, respectively, to equal the revenue of 1 repeat purchaser.
- During their second visit, customers show conversion rates increased by 70% compared to that of the first purchase.
These findings show that e-shop owners should invest in optimizing conversion means and retaining existing customers.
The Adobe proposal focuses on the targeted/personalized contact with the visitor, since:
- 1% of new customers becoming returning purchasers bring in 10% more income to the e-shop
- 38% of Internet users comment on their experience after the purchase
- 67% of Internet users trust the opinion of friends to make a decision (everybody has friends and we must seriously consider not only our “real” friends but our cyber friends too, from social media, internet etc, because they are the ones who truly influence us)
Therefore, entrepreneurs and marketers should focus on retaining existing customers and look for ways to keep them excited. What innovation can you present to them and in what way can you increase the returning purchaser percentage?
These are some indicative ideas:
- e-mail marketing
- targeted ads
- offers and coupons as a means to reward and create a steady relationship
- special organization, management, and promotion of customer care / support system
Adobe Digital Index (09/2012)
You can download the entire report here (pdf)