All Business is Personal -- Especially in Ecommerce
Traditional marketing has a single focus: getting more sales. But in today’s always-connected world, the consumer's journey is less linear and more complicated. Your marketing must constantly adapt to customer behavior, which means it can’t revolve around sales and sales alone. In this age of hyper-personalization, the old-school funnel approach won't cut it. A marketer's main goal now is to align marketing and the customer lifecycle.
You can expand your marketing philosophy to include meaningful marketing and nurture customer relationships even after clients have spent money with you. Here are three big ideas to lead the way.
1. Retention has colossal impact.
You know the data: 80 percent of your future revenue will come from 20 percent of your current customers. But roughly 81 percent of e-commerce marketing budgets focus on acquisition, and just 19 percent are geared toward retention efforts. According to Forrester Research findings, marketers obsess over getting new business in the door. "Even as the lines between marketing and customer experience blur, our survey respondents prioritize customer acquisition efforts over nurturing and deepening relationships with their most valuable and loyal customers.”
Focusing on revenue is misleading if you don't measure recurring revenue per customer. If your annual recurring revenue isn't growing, there's cause for alarm. Here's another negative indicator: Your customer acquisition cost is greater than the customer lifetime value.
In reality, marketing to existing customers can be far more profitable than chasing new leads. Bain & Company worked with Harvard Business School to produce a groundbreaking report on e-loyalty. They found that increasing customer retention rates by just 5 percent can increase profits by 25 to 95 percent. Small-business owners can take notes from the examples of a few highly successful e-commerce companies.
For example, Zappos' retention mantra has been oustanding customer service, a no-shenanigan 365-day returns policy and free two-way shipping. According to CEO Craig Adkins, “Our best customers have the highest returns rates, but they are also the ones that spend the most money with us and are our most profitable customers.” His company's free shipping and return policy is a perfect way for hesitant shoppers to mitigate the risks of online purchases -- and it's also a smart retention tactic.
Statistics from Marketing Land suggest post-purchase open rates are double those for regular bulk promotional emails. Marketers need to expand their marketing messages beyond promotions and treat the initial purchase as the first step in building a relationship with the customer. Retention email marketing can include milestone campaigns such as birthday and anniversary rewards, win-back emails, survey or review emails and loyalty messages. Saks Fifth Avenue capitalized on its email marketing by sending awesome lifecycle emails, starting with a series of welcome messages.
Marketers who proactively integrate retention as part of their overall plan also strive to make transactional emails more engaging. By optimizing transactional emails using upsell and cross-sell techniques, marketers encourage their existing customers to go for a second purchase early in their lifecycle.
Bain & Company warns that e-commerce business won't break even on one-time shoppers. Marketing Metrics, meanwhile, found that a repeat customer has a 60 to 70 percent chance of converting. If you want to build a loyal customer base, start working on your retention-marketing strategy.
2. Empower your community.
Successful businesses create value for customers as well as for themselves. To offer real value to customers, you first must know what drives them.
Black Milk Clothing, a multimillion-dollar company, built a loyal customer base by putting the limelight on its customer base. The e-commerce company has 80 private Facebook groups around the world. Black Milk Clothing empowers customers to be their brand ambassadors, featuring shopper stories and engaging them through social media. The retailer took social proof to another level by embedding customer photos in its product pages. "It should never be about selling," owner James Lillis says. "It was all about sharing customer photos, the selfies, telling funny stories.”
TripAdvisor also built a strong community with highly engaged users who love to share reviews and recommendations. TripAdvisor’s database continues to garner millions of user-generated reviews and photos. Need another example of an e-commerce company creating value for customers? Check out Dollar Shave Club's "DSC Sponsors Your Thing."
Your job as a marketer isn’t over when customers buy your product. In fact, that's the time for new beginnings. Your true job is to turn customers into brand evangelists.
3. Hyper-personalization isn't all in the name.
One-size-fits-all marketing is a thing of the past. Today, marketers are connecting with customers on a one-to-one basis. And this customer-centric marketing approach is driven by the buyer’s real-time journey rather than one-time-buyer personas.
When you personalize your marketing messages, you have to go beyond inserting fields for first and last names. Your efforts must permeate deeper levels. The more you know about your customers, the more of their expectations you can meet. To achieve that depth of experience for every repeat customer or first-time prospect, you need a few foundation components in place.
First, personalization's very nature demands you have a complete view of your customers. A unified customer profile is your key to access all customer intelligence across multiple channels and devices. You can see what products your customers are browsing or buying, which messages they choose to interact with and via which channels, engagement status and more.
Second, you'll need to tap into big data. True, data alone won't effectively personalize the customer experience. That requires analyzing and leveraging data in real time for customers and anonymous users alike. Let's use an anonymous prospect as a case study. You can put to good use whatever data you have on "Anonymous" by personalizing his or her return trip. When the user next visits your site, make sure to set up a "welcome back" pop-up or special offer on a product viewed but not purchased. Machine learning can't derive this kind of insight.
In this extremely competitive online world, it's crucial for businesses to broaden their approach. It's not just about driving sales ever higher. It's about building a customer-centric marketing strategy. Forget "buyer beware." Today's buyers are hyper-aware, and they won't stick with you if they can't see the value proposition you bring.