Online stores as well as retailers have several common areas especially when it comes to sales. Having new customers has always been an important focus on pretty much every business I can think of , but what if I told you they are doing it wrong ?
Yes new customers are important but existing customers are even more important. The probability of selling to an existing customer is 60 % to 70 % while the probability of selling to a new prospect is only 5 % to 20 %. To top it off , it costs five times more to attract new customers than to keep existing ones.
According to RJ Metrics, there is a very important fact we must know in order to improve our sales and to study the behavior of our customers. It is the ¨Repeat order probability ¨ , it calculates the probability of a customer who has made one purchase in their lifetime to return and make a second one.
For Instance, lets say we are the owners of an Online Store who has the following customers:
90 customers who have done 1 purchase in their lifetime.
30 customers who have done 2 purchases in their lifetime.
10 customers who have done 3 purchases in their lifetime.
To Calculate this Probability we must divide the number of people who’ve made at least
( X+1) purchases by the number of people who’ve made at least ( X) Purchases. ¨
Using the example above it would be : ( 30 + 10 ) / ( 90+30+10) = 30.77%.
This means there is a 30.77 % chance of a customer returning for a second time and purchasing something. The probability of them making another purchases increases with each transaction therefore you want them to do business with you as often as possible.
Providing exceptional customer experience is a decisive factor that influences repeated purchases. Including a solution like Vudoir to your store will result in higher sales and improve the repeat order probability. Our personal shoppers will help customers choose what to buy through a personalized experience combining AI and real time assistance.
Making sure your customers don’t leave your website without checking out their products.
We can also recommend selling products that complement each other. For example if your store sells clothing, and someone is looking at a skirt, you could display in the lower section of the site an area with Pantyhoses or high heels.
Another great idea is to offer lifetime special deals to your customers, lets say your products are expensive like diamonds or cars. People don’t buy cars or diamonds every day like you would buy groceries or clothing but if you promote a lifetime deal there is a chance that second purchase will be made in your store.
A lifetime deal might include free service for your car when buying a second unit or 5 % discount on all future purchases in all diamonds available in the store. Customers will without a doubt feel appreciated and return to your store in the future.
It is more valuable than a customer that makes 3 purchases of 10 € than one that makes 1 purchase of 15 €, even though this seems pretty obvious,
most stores make the mistake of forgetting strategies for existing customers and focus solely on finding new ones. Remember it will cost less to focus on existing customers and it will improve the repeat order probability.