E-Commerce Link: Smoothing a Bumpy Ride
1. Lapsed buyers. These are customers who've purchased in the past but haven't done so within a given time frame. These shoppers are the low-hanging fruit of loyalty; they've already demonstrated trust and interest in your brand and need only be enticed to re-engage with relevant offers.
When targeting these shoppers, merchants should factor in the order value of past purchases. Bargain-hunters who solely purchased steeply discounted products are less likely to be loyal and therefore are less apt to respond to invitations to reconnect with the brand.
2. Traditional loyalists. Willing to purchase often and pay full price, this second group of customers is the traditional target of loyalty programs, with a high lifetime value due to their individual buying histories.Because these shoppers have demonstrated an affinity with the brand, offers should enhance their sense of belonging.
3. Brand advocates. With social networking referrals and customer reviews increasing in importance as marketing tools for merchants, brand advocates are now as valuable as traditional loyalists.
Crafting Relevant Offers for Your Business
Another factor to consider when studying purchase behavior is what your ideal customer's purchase frequency should be. Not all merchants can expect constant, repeat purchases; retention goals depend on the product mix, price points and seasonality of the business. Here are three segments of purchasing frequency:
1. High frequency. Vitamins, books, party supplies, gifts and cosmetics are all items most shoppers use throughout the year; once used, they must be replaced. Sellers of these low-consideration products should aim to achieve a high rate of return purchases per year.
2. Medium frequency. Clothing, small appliances, kitchen or home improvement utensils, and costume jewelry are all the type of midpriced items shoppers should find reasons to buy or replace at least twice a year. To encourage that second purchase per year, merchants should highlight what's new and fresh-whether it's the latest seasonal merchandise or newly discounted items.