If you’re an online retailer you probably have loads of personal and transactional data at your fingertips. Don’t let it sit there and go to waste! Use it to create an existing customer lifecycle program to increase retention.
You’d be surprised at the small number of companies who actually do this. I receive some of the top retailers’ emails and often see generic messages, at the same time each week, in my Inbox.
Here’s a basic four-step plan to get started.
1) Know your customers. I mentioned in my introduction that understanding your customers is key to knowing which lifecycle stage they’re in. Without this understanding it’s impossible to build a lifecycle program. You can have all the data in the world, but it does no good sitting in a dusty data warehouse.
A key metric to have is how recently a customer made a purchase. You should know that after X number of days have passed, the customer rarely makes another purchase. Since right now we’re only talking about building a program for existing customers (not prospects or win-backs) you might divide your existing customers into: newcomers (made first purchase within 0-30 days), loyalists (have made a purchase within X number of days) and suspected defectors (haven’t made a purchase in X number of days).
2) Act by delivering appropriate communications for each customer type above. Using recency as the key metric in this example, consider offering an incentive to suspected defectors so they make another purchase. You might treat loyalists as status quo and newcomers with informational messages to reinforce your brand.
3) Test different ideas for your messages. See if suspected defectors respond better to free shipping or 10% off their next purchase. If you’re treating loyalists as status quo, don’t take them for granted and constantly monitor the competitive landscape to see what other companies are doing to get your best customers to defect.
4) Analyze results from your tests and make adjustments as necessary. Don’t “set and forget” your campaigns without constantly looking for ways to improve performance (automation is great but don’t let it make you lazy). You’ll be rewarded by remaining vigilant and constantly running the numbers to see what messages can be improved for even better performance.
Tags: COS
