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How to drive repeat purchase in newly acquired customers

How to drive repeat purchase in newly acquired customers

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How to drive repeat purchase in newly acquired customersFirst-time customers are usually the hardest to retain, with retention rates increasingly dramatically with each purchase. For a given retailer, the likelihood of a first-time customer returning for a second purchase is less than 40%. But once that customer has made their second purchase, the likelihood of them shopping with the retailer again jumps to just over 60%.

So getting that second shop is crucial for retaining customers and increasing your customer lifetime value. In addition to putting the recommended general retention measures in place, you should specifically target first-time shoppers to help secure that second shop. Welcoming first-time shoppers, and then retargeting them at the right times, is key to this. Here are our top tips for getting first-time customers to return.

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How to drive repeat purchase in newly acquired customers

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Send timely welcome emails Acknowledging and welcoming a new customer right after their first shop is an important step in making sure you stay on your customer’s mind. You should use the opportunity to remind them about why they shopped on your site – whether that’s free delivery or offering the widest product range, for instance.

Also let first-time shoppers know about any exciting initiatives that they might enjoy participating in, as well as re-offering them a newsletter subscription if they haven’t already signed up. It often helps to inform the customer about subscriber benefits, such as a birthday gift, exclusive sales previews and content. Sephora also asks their US customers to fill in their online profile, which helps them to personalise the customer experience.

Personalise your communication and customer experienceThis approach works well as part of an overall retention strategy, but can be particularly effective when trying to get that second shop. Offering a personalised experience and communication before and during the second shop can make a big difference to your second purchase rate.

Firstly you need to understand what kind of communication your first-time shoppers are most likely to respond to – and when. This insight can then be used to tailor your communication accordingly.

There are several aspects to lifecycle campaigns that should be tested and targeted:

One way to tailor communications is to analyse the correlation between first and second purchases by a customer.

For example, do first-time cosmetics customers usually choose a product from the same brand or category for their second shop? And do first-time fashion customers usually choose a complimentary product for their second shop (e.g. top and skirt)? The more first-time customer segments you can identify, the more relevant the communication will be to the customers within each segment. You can use dynamic email templates to automate the targeting within emails and personalise the content.

A CRM system will be very useful for this, but not having one doesn’t need to be a blocker. The analysis and download of the relevant customer segments to target can be performed manually if necessary. A large UK grocer used the manual approach to overcome a long backlog of systems change and started seeing return on investment immediately.

As with most things, a test and learn approach is the most profitable path to achieve targets.

Product- and/or category-

specific

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How to drive repeat purchase in newly acquired customers

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It’s also useful to test and analyse data on the different types of promotions, incentives and content, to find out which result in the best redemption and second purchase rates. Testing different approaches will ensure you know which types of content and promotions generate the highest conversion at the minimum cost of incentive.

Type of content / incentive

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The same test and learn logic should feed into any initiatives on-site used to personalise the customer experience. When retargeting engines are used to retarget customers across the web, these engines should have information available as to whether the customer placed an order or not, or if a requested item was not in stock. Repeatedly seeing the images for a product that a customer has already bought from the site can be quite off-putting.

On-site / web experience

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In addition to selecting the right content, you should carefully choose the timing for retargeting your newly acquired customers. The time between purchases decreases with every subsequent shop. So reducing the time between the first and second shop should set the bar for subsequent shops and therefore increase the overall frequency of purchases.

The aim should be to analyse when your customers are likely to return, so that you can then target them slightly earlier than when they are most likely to purchase again. We also recommend taking a test and learn approach when it comes to the timing of communication and incentives.

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Specific measures to drive repeat purchase in first-time customers should be part of a more general customer retention strategy. Check out our 5 tips to attract and retain loyal customers article to find out more.

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