Should Ecommerce Outlets Focus More on New or Returning Customers? March 8, 2017Expert BlogsOff

When you’re growing your ecommerce business, it’s easy to get wrapped up in the practice of attracting new customers. You might think that just getting them to your site is the most important step, and that they’ll stick around if they like what they see. Finding and enticing new customers is certainly one aspect of establishing your business, but it’s important not to neglect returning customers in the process.

Not every conversion is created equal, and you may be surprised to find out the comparable value between new and returning customers. Should your online store focus its finite time and budget on leading first-time buyers to your site, or on keeping and communicating with existing customers? Let’s examine how different types of customers may affect your ROI, and measures you can take to maximize your relationships with your buyers.

It costs six to seven times more to attract new customers than to keep existing ones, per thinkJar statistics cited in the Huffington Post. Furthermore, 65 percent of companies can upsell or cross-sell to existing customers, while only 12 percent can do the same to new customers. Companies who want to get more bang for their buck out of their marketing campaigns should certainly keep in mind that it’s easier to convince shoppers who have already bought something from you to repeat or exceed that experience.

What about the straightforward likelihood of earning a conversion from each of these types of shoppers? Using information from a Marketing Metrics Solutions study, the probability of selling to a new customer ranges from five to 20 percent, while the likelihood of making a sale to an existing customer ranges from 60 to 70 percent. The numbers don’t lie: it’s easier to sell to returning customers and it costs less to do so.

All long-term relationships must start somewhere, so it makes sense that companies generally allot plenty of resources to seeking out and reeling in new customers. But knowing what you now know about the lifetime value of returning customers, it’s easy to see that any truly effective marketing plan has to entail different methods for each respective group. What are some techniques you can employ to make sure your enterprise e-commerce site is maximizing relationships with repeat customers?

Never assume that a returning customer will continue coming back just because they already know what you offer. You have to actively nurture the relationship through e-mail and social media communications, and that doesn’t just mean just promotional announcements. One Forbes columnist explains that your correspondence with returning customers should be all about them. Ask them how you can help them, and take their feedback seriously. After all, they hold key insight into exactly why they chose to come back, and can help shape your future marketing endeavors. Acknowledge that they’re a valued repeat customer, and let them know that you care deeply about their wants and needs.

Another way to prioritize repeat customers in a way that they’ll appreciate is to let them know about new products, services, or ideas ahead of the curve. You can even go so far as to offer exclusive previews or special loyalty perks to grant them privileges just for coming back.

If you’re currently realizing that you may need to take another look at how you treat different kinds of customers, don’t feel bad. The Online Marketing Institute demonstrates an industry-wide imbalance with statistics from McKinsey: Approximately 12 percent of marketing budgets are dedicated to customer retention compared to 55 percent for customer acquisition.

Don’t fall into the trap of focusing on new customers at the expense of existing ones. It’s cheaper and more effective to communicate well with repeat customers than it is to constantly be on the hunt for new ones. Achieve a balance and you’ll start to see results for your e-commerce outlet!

Photo by LDprod | Shutterstock

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