Loyal customers driving profit for eCommerce retailers

Customer Management

Retailers have long placed a priority on securing repeat customers. In fact, being successful in the hyper-competitive retail and eCommerce landscape requires merchants to win loyal customers, or else they’ll spend all their time and money trying to reach new prospects rather than focusing on other critical eCommerce operations such as customer relationship management.

Using customer relationship management (CRM) software to win over the loyalty of customers makes the lives of merchants much easier as they tend to be more profitable for a number of reasons.

In fact, according to the 2014 eCommerce Benchmark Report from data analysis firm RJMetrics, the loyal 1 percent of a merchant’s customers often end up spending as much as the bottom 50 percent.

“The loyal 1 percent of a merchant’s customers often end up spending as much as the bottom 50 percent.

Using customer relationship management (CRM) software to win over the loyalty of customers makes the lives of merchants much easier as they tend to be more profitable for a number of reasons.

1. Loyal customers cost less to maintain

Reaching new customers is expensive. Retailers must invest in extensive marketing campaigns and heavy promotions to try to woo first-time buyers. Every dollar spent trying to win them over can potentially be lost if they don’t eventually convert.

That’s not to say that repeat customers will simply come time and time again. Merchants need to work to keep them coming back from more. However, these individuals are already aware that the retailer in question exists, which is half the battle, according to Practical eCommerce.

2. Loyal customers are more valuable

Retailers often evaluate their customers based on two metrics – lifetime value and average value per transaction. Loyal customers often lead the way in both of those categories, which shouldn’t come as a surprise. According to RJMetrics, the average repeat customer spends three times more money per order than a first-time shopper and shops more often as well.

3. Loyal customers are marketing machines

One of the biggest benefits of loyal customers is the word-of-mouth buzz they can provide for retailers. They’ll often tell their friends and family members about their favorite online stores. In fact, one recent report from Radius Global Market Research found that the highly coveted millennial demographic was most influenced by word-of-mouth recommendations, which bodes well for retailers that can retain loyal customers.

It’s crucial that retailers arrange their customer relationship management system to help maintain relationships with existing customers. Everything from prices to return policies should be designed with the shopper in mind, which can go a long way in helping keep customers engaged.

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