Meeting Increased Expectations of Maturing eCommerce Shoppers?

May 21st, 2008 by Carolyn Gardner

ecommerce

With eCommerce competition at an all-time high, it’s an advantage to find the right balance of mass customer appeal (acquisition) and niche customer segmentation (retention and loyalty). According to Shop.Org’s State of Online Retailing report for 2008, online retailers allocate 53% of their marketing budgets to online customer acquisiton. But sadly only 21% of marketing dollars go to online customer retention and loyalty. As marketers, we should be embarrassed with such a split. Let me explain…

Just out of the gate is the MarketLive Performance Index: Building Loyalty in a Maturing Market. It’s a very insightful report that reminds us of the importance of customer value - especially as it relates to retention and loyalty. It pulls together some amazing stats that can’t be ignored. I think one of the most interesting stats relates to the fact that more than 1/3 of online shoppers have been buying online for 7 years or more (Source: Forrester). So naturally, these shoppers have increased expectations that can only be achieved by websites that put some thought and investment into the online experience via relevant, personalized content/offers.

The significance of these loyal, savvy shoppers is two-fold to say the least:

1. With respect to loyalty, let’s first explore customer value. MarketLive compares the value of new vs. return vs. loyal customers. Loyal customers are by far the most valuable of the trio - they’re more engaged (more visits to carts and adding at double the rate of new buyers) and their avg order size is nearly 10% higher than new customers. It’s called cross-sell, up-sell baby and it’s an enticing segment worth maximizing.

2. With respect to being savvy shoppers, expectations are high and this segment demands nothing less than relevant, meaningful experiences that appeal to their quest for unique finds, time savings, cost savings, etc. Each of these appeals can be addressed through personalized content and response potential is well documented. From the MarketLive report, Forrester found ”that of the 54% of shoppers who perceived that offers had been tailored to their personal preferences, 77% found the recommendations useful and 34% made a purchase on those recommendations.”

Point 2 really answers part of the “HOW?” re point 1, don’t you think? Consider the facts.

MarketLive qualifies a loyal shopper as someone who has made 3 purchases or more. With that in mind and the general state of web shopping (lots of pre-buying research and browsing time), I think it’s also fair to classify these loyal shoppers as savvy shoppers.

The other great way to tap into the loyalty segment is via email. Actually email can be segmented in virtually unlimited ways - depending on your database of course. For example, it might be worth segmenting lapsed customers with a win-back email. After all, they bought once and that means they might buy again…IF you message them appropriately with personalized, relevant offers - both online and in the inbox.

Posted in Carolyn Gardner, Conversion, Customer Experience, Email marketing, Optimization, Personalization, Search Marketing, eCommerce |