By Robin Cronan, 20th July 2015
Marketing Datafication No.4 examines the power of purchasing data. In this article, we will look at how marketers use this data to reduce the time between a customer’s first and second purchases and why this is so important to retailers pursuing long term repeat purchases.
Selling to existing customers is always regarded as easier and cheaper than acquiring new customers. To a large extent, this is, in fact, true. But for retailers, where unit selling prices are low, existing customers’ loyalty is not that strong.
Some expert thoughts on purchasing data
You almost have to treat existing customers as brand new and get their follow-up purchase as soon as possible,
says Paresh Patel, Business Insight Director at Qbase.
The longer the time lapse between purchases is, the greater the likelihood of that customer going elsewhere. You have to use their purchasing data to trigger messages that shorten the gap to their next purchase.
By adopting the philosophy that most retail customers are ‘one-time buyers’, a retail company’s objective is to get that ‘one-time buyer’ back into the shop as soon as possible.
If you can secure that second purchase the customer becomes twice as likely to return for a third purchase. By acquiring the third purchase the customer becomes three times more likely to return for a fourth, as so on. This can only be achieved by recording, analysing and acting upon purchasing data.
Paresh Patel explains,
Never assume that a follow-up purchase is guaranteed just because they are an existing customer. The key is to get that follow-up sale as soon as possible. Marketing automation can be used to trigger communications messages when a purchase is made and pull that customer back into your store or ecommerce platform. Depending on how the customer engages with that message could trigger more communications until you secure that follow-up purchase.
Unless your organisation sells high-value products or complex services, where personal relationships are key to customer loyalty, you will experience the same scenario as retailers.
Once you secure the second purchase from your customer you increase the likelihood of a third purchase. As soon as you win that third purchase the likelihood of fourth increases. It becomes a virtuous circle, but only if you use customer’s purchasing data and combine it with marketing campaigns that reduce the time-lapse to their next purchase.
In our fifth article on Marketing Datafication, we will look at social data. Particularly, how marketers are making the most of this rich source of personal customer information to increase engagement and purchases.