Marketers competed fiercely for customers during the 2013 holidays, offering steep deals to the tune of 50 percent to 60 percent off to get them through their doors or onto their websites. And many won, registering record sales and earning new customers lured by deep discounts. But how many of these customers will they retain now that the ornaments are off the tree and the multicolored lights are stowed in the garage? The answer to this question could determine how successful a business will be annually.
Given that returning customers spend 33 percent more than first-time buyers, a marketer's hard-fought holiday success could turn into a gift that keeps on giving throughout the year. To help maximize customer lifetime value, here are some suggestions—from least to most advanced—to orchestrate a post-holiday retention campaign.
- Gather Targeted Data: If you were thinking ahead, you collected data about your new customers during the holidays that you can apply to your marketing campaigns to help lure them back. If not, waste no time in starting to gather key data points about first-time customers that you can use throughout the year to target them. There's no need to go overboard—start simple by tracking traffic sources, on-site browsing activities, product views, average order value, bargain purchases and item returns. Low-cost tools, such as Google Analytics and Tag Manger can help you with your data mining.
- Launch a Post-Holiday Retention Campaign: Now that you've made a sale to your holiday shopper, it's important to create a retention relationship with them. One of the best and easiest ways to do this is by engaging them through targeted emails based on the data you've gathered during the holidays. Create a campaign in the first part of the year that rewards new customers with free shipping, individualized promotional discounts and product sneak peeks. Give them something of value, rather than just sending a blanket marketing email that gets dismissed. A personalized approach will help engender customer loyalty. One easy way to do this is through the subject line—reference their earlier purchase, thank them for their business or welcome them back with a special offer.
- Calculate Customer Lifetime Value:Every customer is valuable, but the fact is that some spend more than others and some are more likely to re-engage. To ensure your nurturing strategy is optimized, it's important to identify each customer's lifetime value (CLV). In essence, rank your customers based on much they have contributed to your profits in order to understand how much more they can contribute in the future. The CLV will also help guide where you spend your retention marketing dollars, and prevent you from squandering your promotions on customers who aren't likely to respond to them. There are many different schools of thought on how to calculate CLV, although Harvard Business School's online tool kit makes the calculations easy.
- Be on Time:Timing really is everything when email marketing is concerned. Retention Science recently conducted industry research and found that emails sent on Tuesdays and Fridays see some of the highest conversion rates, while weekends and Mondays see some of the lowest. What's more, offers sent later in the day tend to generate the highest online conversions. Afternoons, between noon and 6 p.m., were the most effective, yielding a 38 percent conversion rate. Subscription-based email campaigns yield the highest conversions rates in the first 14 days, although the first and third days of subscription have the highest conversion rates (23 percent and 11 percent). Hitting your customer with a personalized email endeavors when they are in the buying mood can lead to more sales than a slew of ill-timed emails.
The difference between one-time shoppers and loyal customers may be determined by how you choose to fight for their loyalty.