By Harry Hidding, President, Malibu Commerce
Competition is fierce for online shoppers. We’ve seen the fall of many brick and mortar stores nationwide as buyers indicate they would rather shop from the comfort of their own homes rather than get dressed, drive, park and physically go to a store. For companies who offer an eCommerce option to their customers, it is a challenge to attract them, and keep them coming back.
We suggest that the first step to developing a strategy to keep your customers is to analyze your highest performing customers and offer them rewards to keep them shopping.
Here are four metrics you can use to identify valuable customers, and actionable steps to retain them:
- Customer’s Lifetime Value (CLV)
CLV is calculated by adding up the lifetime purchase totals for each customer. You can rank your customers by CLV to find your highest performing customers.
- Customer Loyalty: The number of orders-to-date
Total the number of times a customer has come to your site to place an order. This KPI (Key Performance Indicator) can be used to evaluate a customer’s loyalty to your company.
- Customer’s Average Order Value (AOV)
Divide the customer’s total revenue by the number of orders placed to see the average amount spent each time a customer orders. For example, if your customer placed 10 orders with a total revenue of $10,000 your AOV would be $1000.
- Date of Last order
The fourth and final KPI to evaluate is the length of time since they last made a purchase. They may be a high-value customer, but may not be an active customer.
Actionable Steps to Retain Your Best Customers—and Find New Ones
Now that you have your list of your most valuable customers, its time to show them some love.
- Customer surveys. Discover more about what your customers care about by sending a survey that will offer them a discount on their next purchase upon completion. You need to know what motivates them and can use this information to create the rest of your rewards program.
- Classify Your Customers. Create tiers of customers that qualify for different reward programs. Their level of activity determines the rewards earned. Jump them up to the next level to earn even more rewards.
- Point system. Allow your visitors to earn points for each purchase transaction — either based on how often they order or the order amount. Their points can get them a reward such as a discount percentage or free delivery.
- Gift Cards. Buy gift cards from local businesses and use them to reward your customers for purchasing certain items. (or other criteria)
- Customer Day. Show your appreciation to your high-performing customers by hosting a customer appreciation day. This will create an opportunity for networking and strengthen the bond with your customers.
- Birthday/anniversary promotion. Make it personal. Send your customers a card celebrating their birthday or anniversary with a special discount.
- Welcome emails. All new customers will receive a follow-up thank you with a discount on their next purchase.
Do you have great examples of rewards programs that have worked for your eCommerce site? Please join the conversation and comment below.
Malibu Commerce is a company devoted to empowering Microsoft Dynamics NAV ERP users with a bullet-proof connection between “best of breed” Magento and Microsoft Dynamics NAV ERP, the most popular software on the planet.