Why do we spend so much of our advertising budgets on acquisition rather than wooing our existing customers?
Marketing budgets are biased towards acquisition. The well-established knowledge of the superior value of existing customers sits in the back of our minds while we allocate large chunks of budget to new customers.
Research has shown that, within Europe, it takes 7 new customers to equal the revenue of 1 repeat shopper.
Research can’t tell us why marketers are spending so much on new customers, but it can provide a compelling case for why this is not the right direction for retail marketing.
While the majority of people visiting your site are new shoppers they are also the most likely to leave without buying. Your repeat customers may only be 10% of your website visitors, but they are more likely to complete a purchase.
Some of the best ways to reach your existing customers are not through display and search ads – they already know where to find you – but through social media and customised email marketing.
The inclusion of social media in your marketing plans also helps bring existing customers back for more. If they already know and like your brand, they are more likely to follow you on Twitter or like you on Facebook too. Special ‘social only’ offers for your fans will keep their attention on social media and help you keep their custom. So be sure to add your social channels to your website, emails and display ads.
A great example of customised email marketing is Amazon. Amazon tracks user journeys, product views, wish lists and incomplete shopping carts to generate customised emails for their existing customers.
Why does this work? Customers are seeing personalised emails geared towards their purchase habits; they see updated pricing for products they’ve added to wish lists and even stock updates for items in their basket. These reminders are no doubt helping Amazon harvest what could have been lost income due to customer forgetfulness.
Let’s break old habits and keep existing customers keen with targeted, personalised campaigns. We’re working in an era of “prove it” or lose it, so if you need some data to back up your repeat customer pitch, check out our recent Adobe Digital Index Report: The ROI from Marketing to Existing Online Customers.