With the increase of retail competition on every front – the storefront, the ecommerce front, the mobile front, it is increasingly important that once retailers capture a customer, they retain that customer and grow a profitable, lasting relationship but how exactly can retailers maximize the value of its customers?
An often-overlooked component of customer growth and retention is the concept of a customer’s lag days – or more commonly thought of as, the time between purchases made by a customer at a particular retailer. It is incumbent upon the retailer to reduce lag days when driving customers to make a repeat purchase because as retailers shorten the time between purchases, they are in turn increasing the future value potential of the customer and acquiring more revenue, faster.
To reduce lag, and drive more incremental revenue, retailers need to reshape their communication and content strategy to focus on customer engagement through lifecycle marketing. Below are three examples of Customer Portfolios Lifecycle Marketing products that aim to reduce lag days and help guide customers to their next purchase.
One tactic for maintaining engagement with the customer is through a coordinated email Welcome Series. Today, many retailers use a single bland Welcome; however, it is recommended to build a campaign that communicates meaning and relevance to customers based on their interaction with the retailer.
While the mechanics of a Welcome campaign may vary from retailer to retailer, the goal should remain the same: the effective use of relevant content to keep customers engaged as they move along the marketing lifecycle.
It is an axiom of retail that 1x time only customers dominate a retailers’ customer base. This is an alarming trend for retailers as current customers spend 67% more than new customers. But how can retailers reconcile this and grow the number of repeat customers? One highly effective tactic is placing current customers through a Repurchase campaign following the conclusion of the Welcome Series.
An effective Repurchase strategy uses analytic-driven content to engage with customers through highly targeted and relevant content and communication. By sharing relevant at the right point in time, this helps retailers drive transactions through engagement.
Winning a customer is only half of the battle. According to our analytical findings across a range of retailers, roughly 5% of customers make a purchase at 0after 18 months of inactivity. However, through sustained engagement and maintaining communication with lapsed customers in a customer-centric manner, multichannel retailers can help reactivate past customers.
One avenue for driving customer reactivation is through an orchestrated outbound communication series that creates an increased sense of urgency as customers approach an 18-month inactivity cliff. By offering an incentive or an email with personalized and tailored content based on previous purchases, this can help to rebuild the lost relationship. Retailers can also model the future value of a reactivated customer so that they can have a framework for investing in win-back initiatives and the value gained once a customer is reactivated.
In summary, the time between purchases is a critical measure of the value of a customer and by implementing lifecycle strategies such as welcome, repurchase, and reactivation, retailers can grow customers future value and ultimately, drive incremental revenue for the retailer.