One-and-done customers are walking away with your revenue. Here’s how to turn the tide.
You know who they are. The one-time customers who come in for a fabulous sale and are never seen again. The ones who sign up for your loyalty program to get the gift, and then disappear forever more. And the ones who get frustrated with your customer service and simply walk away. Every one of them represents a lost opportunity for ongoing revenue. What can you do to stem the tide of dollars heading out the door? Read on for insights to turn those one-time buyers into long-term, loyal customers.
The Value of One-Time Customers Versus Repeat Buyers
Let’s face reality: Chances are good that you’ll never get every first-time buyer to make another purchase with you. But even a few more retained customers can make a huge difference to your profits. Research from Custora shows that a mere 1 percent increase in retention can yield a 5 percent increase in per-customer profits. Even better, subsequent purchases can have a snowball effect: Zaius reports that someone who buys from you a second time is then twice as likely to make a third purchase. And that can help cement their loyalty for the long term.
Defining the One-Time Buyer
A one-time buyer is often just what it sounds like: Someone who makes a single purchase from you. Period. There are many reasons this can happen. For instance:
- A fashion-focused buyer may come in only because you’re promoting the hot trend of the moment.
- Someone might make a convenience purchase because your store happens to be on their route that day.
- A consumer may sign up for a credit card or your loyalty program just to get the initial incentive.
In other cases, you may be dealing with what appears to be a one-and-done customer, but really isn’t. For instance:
- If you sell big-ticket items with long purchase cycles, like furniture or automobiles, then a new customer may appear to be a one-time buyer, but may in fact be someone you simply won’t see again for a long time. Your dilemma then becomes how to get that customer back in to purchase sooner.
- If you have friction points in your loyalty sign-up program, you could appear to lose a customer and not realize they are actually coming back. For instance, if a new program member comes back for a second purchase and isn’t found in the system, or if they’ve forgotten their member ID, they may not be recognized as a member. Thus, they can look like a first-time buyer instead of a repeat customer. In some cases, these customers sign up again, and you end up with two profiles in the system — potentially one active and one inactive.
You can, for instance, look at the types of purchases you’re seeing in your store. For example, a grocery store may notice that a large number of transactions are for small items — a bottle of water, a sandwich, a pack of cigarettes. That’s a flag for one-time customer behavior, indicating your store isn’t their grocer of choice, but merely a convenience stop.
You can also compare your one-and-done figures to industry benchmarks. For instance, 75 percent of online shoppers are one-timers, according to Custora. If your numbers are disproportionately high, that’s a problem.
Turning One-time Buyers into Second-time Customers
The ultimate goal, of course, is to turn as many one-and-done buyers into long-term customers as possible. But the most important first step is simply to drive a second purchase. As we noted earlier, once a customer makes that follow-up buy, she’s nearly twice as likely to make a third — and so on. The strategies below can help you bring that first-time customer back for more.
Strategy: Implement a Welcome Series
This is a multi-week series of communications sent to a new shopper, telling her more about your store and providing reasons for her to come back. In today’s world, the communications usually take the form of an email, although mixing in direct mail can also be effective. The whole strategy hinges on capturing customers’ email (and/or snail mail) addresses. That’s easiest if they have filled out a loyalty membership form or applied for a store credit card, but can also be done with point-of-sale dialogue.
A welcome series might look something like this:
It’s ideal if you can personalize the messaging to some extent, at minimum based on that initial transaction. By digging into your data, you could also develop personas or customer segments, and create slightly different welcome communications for each one. For instance, if you’re a women’s fashion retailer, based on a buyer’s initial purchase you may be able to fit her into a “fashionista” category or a “career” segment. This can inform, for instance, the tone of your messaging and the types of product images you show.
One common segment that stretches across multiple retail categories is the value-oriented shopper who only buys at rock-bottom prices. This isn’t your dream customer, but when you need to move last season’s merchandise to clear room for new stock, why not send an alert to the folks who cherry-picked your final clearance sales last year?
Your data can also help you identify inflection points in the typical customer relationship. For instance, if you can pinpoint a timeframe when your customers tend to make a second purchase, you can time a trigger email to reach first-time buyers at that moment.
Strategy: Leverage Past Customer Data
Analyzing previous years’ shopping data can help you better understand one-time customers. By looking for patterns in behaviors such as purchase timing (e.g., holiday-based or not), channel preferences and product categories, you can make more informed decisions on how to communicate with new customers in ways most likely to drive a return visit.
- Review campaign, channel and source metrics to see which past tactics have been most effective in getting first-timers to buy again.
- Use customer look-alike modeling to find past shoppers with similar profiles to the new shopper. Use the past shoppers’ profile to inform your outreach to the new shopper.
- Use next-best-sell modeling to develop cross-sell messaging based on educated predictions of what the customer is likely to buy next based on her initial purchase.
For example, maybe your historical data shows that customers who have bought a bedding set from you are most likely to follow up with throw pillow purchases. When a new customer comes in and buys a bedding set, you can center a follow-up message and possibly an offer around your great inventory of throw pillows.
If your store’s main focus is big-ticket items, like furniture, high-end jewelry or autos, then using these types of analytics can really payoff. Study your data and conduct tests to learn which of your support services or accessories might have the most powerful pull to bring customers back long before they’re ready to invest in another high-dollar purchase from you. For instance, if a couple purchases diamond wedding rings, what’s most likely to bring them back soon? Maybe it’s a free ring cleaning — attached to a splashy promo for right-hand rings.
Strategy: Develop a Browse Abandonment Campaign
You’re familiar with cart abandonment campaigns. Browse abandonment goes a step further — or, more accurately, a step earlier in the process. By tracking a shopper’s browsing behavior on your website, you can see which products are of interest to her — regardless of what she actually puts in her cart.
For instance, if you’re a home-and-hardware store, a shopper may browse your lawnmower selections, but end up buying a weed whacker. Your next step might be to send an exclusive offer on lawnmowers or alert that shopper when your lawnmowers go on sale. (Adding a special offer on weed-whacker cord wouldn’t be wrong.)
This strategy may also help you identify gift buyers, so your follow-up messaging doesn’t take the wrong track. For instance, maybe a shopper browses women’s sweaters, but ultimately purchases a man’s shirt. Traditional triggers might focus on the purchase — which can turn your customer off if it was a one-time gift buy. By looking at browsing behavior, you may change your tactics to include both men’s and women’s wear.
Strategy: Eliminate Friction Points
Any time you create a sticking point in the customer journey, you create frustration and give customers a reason not to deal with you — especially if your competitors make things easier. On the flip side, when you strategically examine your customer journeys and store processes, and create a smooth, seamless customer experience, you’ll find it much easier to build repeat business and long-term loyalty.
Delays in your customer tracking or loyalty program sign-up processes are common bumps in the customer journey. For instance, say a new customer also signs up for your loyalty program. Later that day, she goes online to complete her profile or check her points, but your system hasn’t processed her membership yet, so it doesn’t recognize her. That’s a friction point and could be enough to turn the customer away for good. And it’s a good reason to review your loyalty program processes, such as how frequently you batch data.
A customer might similarly get annoyed and walk out if she forgets her online log in information online or her loyalty card when she’s in-store and can’t complete a purchase as a member — and you can’t help her. The solution here may be ensuring that you have multiple ways to find that customer in your system, whether it’s asking for an alternate identification (like a phone number) or allowing them to sign-in via Facebook.
Bottom line: Make it simple for customers, especially the one-timers who aren’t devoted to your brand, to interact with your company and make purchases.
This is a great place to do some original research and find out straight from your customers where they’re finding friction points. For instance, you might gather a focus group of one-time customers to find out why they haven’t shopped with you again and what might motivate them to return.
More Ideas for Turning One-Time Buyers into Loyal Customers
Here are a few more ideas that can help convert one-and-done customers into repeat buyers:
- Implement loyalty or customer relationship initiatives. This doesn’t have to be a full-blown, points-based loyalty program. It could be a simple frequent-shopper incentive or offering exclusive, members-only content or events.
- If you do have a loyalty program, give new customers an easy route to a quick win. For instance, give new members a bounce-back coupon so she has an incentive to shop after her signing bonus. Or, if it takes $100 to earn a reward and a new member just spent $90, give her a percent-off coupon that makes it easy for them to come back and spend those last $10 to get her first reward. (Take our 5-minute Interactive Loyalty Assessment quiz to identify opportunities to improve your loyalty program — and customer retention.)
- Experiment with Facebook Custom Audiences or Google Customer Match, which allow you target your social messages while increasing reach.
- Try CRM re-targeting to follow-up with online and offline customers through relevant banner ads around the web.
- Encourage one-time customers to interact with your brand. For instance, request a product review, ask for referrals or invite them to participate in a social media contest. In short, make sure they don’t forget about you — so when they’re ready to make another purchase, you’re on their radar.
The End Game
Ultimately, the strategy you choose to address one-and-dones in your store will depend on what’s causing the problem in the first place. For many retailers, the solution lies in combining multiple approaches. The effort required will be well worthwhile when you start reaping the revenue rewards from fewer one-time buyers and more loyal, repeat customers.
If you’re ready to turn more of your one-time buyers into long-time customers, CCG is here for you. For four decades, we’ve been dedicated to helping retailers solve industry challenges and build long-term, profitable customer relationships. Request a free consultation with one of our retail marketing experts today or call us at 303.986.3000 to start building your customer retention — and revenue.