In the marketing world, the concept of conversion is amongst one of the most crucial steps for the success of a business. The moment when a ‘window shopper’ browsing around a website decides to take the next step and make a purchase is a beautiful thing to see. However, marketers tend to forget that this does not mean a long-term victory, but rather, an immediate reward for their efforts.
Once a consumer has made a purchase, how do you ensure that they keep coming back down the line? The mistake that advertisers make is that they place too much emphasis on the initial conversion process, and not enough on post-conversion upselling. The internet is saturated with results from search engines, so marketers should focus on building a consumer base that makes return purchases and will eventually become loyal clients.
There are many standard go-to methods for upselling to existing customers, such as offering discounts on a next purchase, or sending out surveys 24 to 48 hours after the transaction. Regardless, upselling post-conversion should be a main aim for advertisers and marketers. This is in the rapidly growing world of e-commerce, which is expected to reach 4.88 trillion U.S. dollars in sales by 2021 globally.
At Admitad, we spoke to our experts about the best way to retain customers after an initial purchase. In short, to increase the Customer Lifetime Value (CLTV),companies (shops, services, online games providers, etc.) need to do one of two things: increase the average receipt amount, or increase the amount of transactions in a unit of time. This can be deconstructed, in more detail, into 5 main ‘pillars.’
Pillar 1: Automatization and Modernization
E-shops should be as modern as possible. A study published on tandfonline concluded that users decide in about 50 milliseconds whether they want to stay on a website, or leave it. This must be kept in mind for all aspects of website design.
For example, in the process of choosing goods and purchasing them, customers prefer to spend as little time and energy as possible. This means that they won’t stay on the website if its shopping system is not intuitive or forces them to perform too many actions in the purchasing process. Internet resources (online shops) cannot forgo e-payment options such as Apple Pay on their online platform. If they ignore the need to set up e-payments, they could lose customers.
In terms of automatization, it helps to avoid mistakes made due to the human factor. When simple and repetitive processes are automatized, this decreases the frequency of human inaccuracy. This is especially true for mundane tasks such as IT maintenance and monitoring, which may make workers bored, therefore more prone to error-making. Electrically trainable analogous neural networks can benefit online stores by automatically predicting customers’ needs and sending out warnings, such as advising that the demand on certain products will increase in the near future. This could help those in charge of production or the handing-over of goods, and is a great way to plan processes ahead of time.
Pillar 2: Know The Audience
Extensive knowledge on your target market is important when selecting promotion and marketing methods. Each target audience has specific preferences of information channels and factors that influence its decision-making process related to purchasing.
For example, Generation “Z” (those born between 1994 and 2010) can’t be bothered to view email blasts and e-mail click-through advertising. Generation Z is the first cohort to have internet technology readily available at a young age, so they are well-adapted to the newest technologies on the Internet. In comparison to customers of older generations who spend the majority of their time at work, teens is more reachable by instant videos on Instagram and influencers of their age who they trust.
Creating a marketing campaign in line with the calendar of holidays of the country where marketers promote their brand could help reach these newer generations. The campaign should also be in line with customs and attitudes established in said country, while understanding the way the locals think. Even big brands such as Samsung and Nintendo have had successful hyper-localized campaigns.
Pillar 3: Work With Unsatisfied Customers
We can’t stress the importance of customer satisfaction enough when it comes to retention. This is especially considering that the number one reason customers leave a product or service is because they feel unappreciated.
Advertisers need to receive customer feedback and find out what exactly made them unhappy. This information will help the online store find its service weaknesses. Moreover, it’s important to delegate an individual who within the company is capable of operatively solving the issue. And, who is officially authorized to suggest compensation for the unsatisfied customer’s next order without long approval wait times by company senior partners. Compensation may include vouchers for free services, discounts, gifts, and so on.
Disgruntled customers are easier to make loyal than one who has an average satisfaction level. Dissatisfied people are usually emotional, and quickly move from extreme to extreme. Those who have a medium satisfaction level are always neutral. According to a study from the Lee Resources, 70% of customers will cooperate with a company again if the origin of discontent is resolved in their favor. The goal of feedback from critics is building trust with unsatisfied customers and demonstrating that companies care.
Pillar 4: Loyalty Programs
Customers should never be the ones requesting to be placed in a loyalty program, especially if they’ve been doing business with a company for some time. It is the responsibility of the company to consciously offer these loyalty programs, making their clients feel appreciated.
If a client continues to support a specific brand, he or she will likely spend 67% more than any new customer. This is a direct demonstration of the importance of loyalty for brands. A customer could have discounts and incentives through these loyalty programs. Another method is a points system, which enables customers to collect points from each purchase and further exchange them on discounts or goods.
Loyalty cards are a useful tool that help advertisers and sellers understand the customer and the pattern of their behavior. Giving a discount as a seller gets valuable information about the buyer, and can predict their next purchases.
Pillar 5: Creating Upsales
People tend to associate the word “upselling” with negative connotations. In reality, it doesn’t have to be doomed to the world of stereotypes and clichés. What’s more, is that people tend to confuse upselling with cross-selling.
Upselling can be used to offer discounts for added features. For example, if the customer purchases an item of clothing from an online vendor, the vendor could offer custom designs for a reduced price. Sometimes a customer will want the added feature with the value of having the reduced price. And if they decline, it won’t be because they are feeling pressured to pay more. Companies should look at upselling as a way to make their customers happier, instead of a way to get more money from them.
The checkout for the customer’s purchase is a great place to offer extra features or upgrades. Companies can also send out emails with limited-time offers, all while focusing on how the client is benefitting from the upsell.
Often times, cross-selling helps to retain customers. For example, a customer goes to buy clothes at a women’s clothes shop. At the cash register, upon checkout, the customer is given a skin cream at a reduced price. The cream is of very high quality, and it is offered to the client for cheap, hardly exceeding the cost price. Then, after the client finishes the cream, they return to the same shop, because they want the cream. This is customer retention with the help of cross-selling.
To most customers, when additional sales techniques are used effectively, it comes across that the sales representative is eager to help. The act is interpreted as the representative sincerely wanting to make the customer happy and comfortable.An argument can be made for the importance of increasing customer lifetime value while also generating new leads. When people have good experiences with a company, they are more likely to recommend it to their family, friends, co-workers and so on. As such, one could say that focusing on existing customers also generates those new leads marketers strive for. Either way, when the client is happy, the company benefits.