Get a Grip

Get Customers to Come Back

Companies that build repeat sales reduce their average cost of customer acquisition and increase the average lifetime value of their customers. Dotcoms that can effectively deal with this universal business fact will make it when others fall by the wayside.

Dotcoms with a future develop site visitor databases. "They segment purchasers, nonpurchasers, whatever segmentation is appropriate for their business," Hunt says. And they find ways to contact those customers and prospects with coupons, free offers and information, often by e-mail. They test various messages and contact schedules to determine what brings customers back, and they persuade visitors to become customers.

Develop an Understanding of Customers, Not Just Computers

Dotcoms here for the long term are more than technologists, stresses Jack Shaw, president of consulting firm eCommerce Strategies Inc. in Marietta, Georgia. They're also experts on the needs and wants of their customers. "If they sell to a particular industry, they understand its business processes and issues," he says. "The ones who don't understand represent a substantial percentage of the unsuccessful dotcoms."

To find out whether a given dotcom is likely to survive, check out the backgrounds of key executives. "Typically a number of key people in the organization have spent years working in the customer industry," says Shaw. "Having the technical expertise is not enough."

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This article was originally published in the June 2001 print edition of Entrepreneur with the headline: Get a Grip.

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