You’ve likely heard that it costs more money to acquire new customers than it does to encourage your existing customers to purchase from you again. This is because you no longer need to invest in search engine marketing or advertising on social media platforms. To encourage repeat spending, though, you do need to reach out to your customers. Fortunately, many of these solutions are low-cost, offer a great return-on-investment, and make your business more competitive.
By far the most common way modern companies contact their previous customers is through email. This gives you the opportunity to let them know about any new stock or ongoing sales and promotions. The mistake many companies make, however, is that they don’t specifically target their emails. This means that customers quickly become accustomed to receiving information that they aren’t interested in and end up either unsubscribing from the newsletter or just deleting them on sight. Take advantage of all of the information available to you, including the individual’s age, gender, location, and previous purchases. This will give you a better idea of the kinds of products or services that would be suitable to them.
When it comes to discounting goods or running promotions, studies have found that lowering or removing the price of shipping can actually have the biggest effect. This encourages customers to make big orders and increases their overall order value. One of the strategies you may have seen companies employ is to enforce a “minimum spend” threshold before you’re entitled to free shipping. You can see this with e-commerce giants Amazon who, in the UK, recently upped their minimum spend from £10 to £20. What this does is encourage shoppers to buy an additional item because they feel as though they’re getting a better deal having not paid the price of shipping.
Finally, another popular way to encourage repeat spending is for businesses to create a loyalty card scheme. This can work in several ways. For example, many coffeehouse chains give customers a stamp on their card for every drink they buy. After ten purchases, their next drink is free. For businesses where shoppers often buy in bulk, such as a supermarket, every time the shopper purchases an item they receive “points” which are relative to the value of the purchased goods (typically between 1-2% of the total price). The value of these points can then be used to decrease the price of their next transaction. Salon specialist Phorest found that these kinds of promotions increase the average spend of customers by 30%.
Depending on what type of business you operate, you may benefit more from certain techniques than others. Whichever solution you decide on using, though, encouraging repeat spending should be a core component of your marketing strategy.