Regular Customer to Loyal Customer

Convert New Visitors Into Loyal Customers

Jay El-Kaake

March 27, 2012

General News

We’ve found that merchants spend a significant portion of their budget on (expensive) customer acquisition. eMarketing is now at a point where, if you have a large enough budget, you can get customers to visit your site and purchase. Most merchants have a strategy for getting customer attention on their website. But surprisingly they don’t have an effective strategy for making these new potential customers into loyal customers who will make repeat purchases and refer new business.

Here we’ll show you how to take a new visitor and turn them into a frequent purchaser and source of new customers.

First, let’s determine what our customer process is, and rank customers in each stage according to how valuable they are to us. Once we do this, we can observe our customers as a funnel from least to most valuable over a lifetime:

Visits the site once

Visits the site often - but doesn't buy

Makes one purchase

Makes one purchase, considering second purchase in the future

Makes multiple purchases

Makes multiple purchases and refers other customers

Now that we are able to rank the value of a customer, our goal should be to take a customer from the top of the funnel to the bottom of the funnel. How do we do this?

By giving an exceptional reward for their first interaction, you can significantly increase the probability of a second purchase.

By immediately giving your customers a reward that they perceive as exceptionally valuable, you are increasing the likelihood of a customer moving from Stages #1-4 to Stages #5+, and are therefore increase the value of that customer. This may seem trivial at first, but this simplicity sometimes gets lost in a loyalty program’s initial planning phases.

Here are some examples of how you can create an exceptional initial reward and increase the value of your customers:

Reward for sign-ups

How much would you pay to develop your email list?...