Retaining customers who buy multiple times is the fastest way to profitable growth. Having a customer base that typically only buys once and never again forces a brand to consistently rely on acquisition efforts, squeezing margins and reducing comfortable CAC thresholds.
Read more below or listen to Ben walk through Low Repeat Purchase Rate and its treatments:
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Low Repeat Purchase Rate Symptoms
Majority of customers only buy once and never again
Retention and lifecycle marketing makes up less than 20% of attributed revenue
Lifetime value (LTV) is similar to AOV (average order value)
Recurring customer revenue is not growing over time
Recurring customer revenue’s share of total revenue is flat or down
Highly seasonal business that relies on typical “demand” spikes (e.g. holiday)
Treating Low Repeat Purchase Rate
Lifecycle marketing: optimizing email, SMS, and other lifecycle endeavors are all low-hanging fruit to improve repeat purchase rate. Segmentation, personalization, product recommendations, automations, and creative or copy optimizations can all improve repeat rates without any strategic changes.
Basket and assortment analysis: identifying the products that generate the best repeat purchase rates, the highest lifetime value, and the most complementary products can inform which products are prioritized in acquisition and retention strategies, content, reviews, and overall coverage. Cohorting customers by first purchase product and seeing which leads to second purchases is a great way to optimize product feed assortments.
Optimizing your marketing and promotional calendar: creating themes that tie back to your unique value props, customer segments, or product categories are ways to remind existing customers to come and buy additional products. These don’t have to be discounts necessarily, but can leverage bundles, limited time products, or other time-sensitive offers.
Cross-sells and upsells: continuously pushing accessories and tertiary products that complement, assist, or augment your “core” product to loyal customers will increase secondary purchases. Many customers simply move on with their lives and are very satisfied with your core offering, but merchandising new releases or accessories directly targeted at benefiting this segment is highly effective.
Loyalty and referral programs: the psychological effect of gamifying or incentivizing customers to buy multiple times (get your tenth purchase free) or referring a friend (both you and your friend get 20% off) is incredibly powerful. The business of apps has largely perfected the art of FOMO and directing customers to keep buying, keep playing, and keep engaging with the brand.
Ongoing community management: creating a sense of community in your brand encourages users to continuously re-engage with your content, your products, and new customers. Creating a welcoming community not only builds credibility for new customers, but it keeps your brand top of mind for existing customers. Optimizing organic social content, moderating communities, and celebrating those that make content with your products are all effective.
Paid win back: at times, lapsed customers simply are inaccessible with any owned or earned channels. For higher value products, building campaigns that are similar to acquisition but specifically targeting lapsed customers can often be highly efficient compared to “cold” acquisition programs.
Direct mail: direct mail (which can be purchased programmatically through a platform like Pebblepost) can be extremely efficient at garnering re-engagement. For previous purchasers a brand also has a direct link to their mailing address, and needs to do very little to ensure that the customer interacts with your promotion, reminder, or ad.