In this article, we will deep dive into important strategies that an email marketer should follow in the E-commerce business. As you will scroll down, you will learn the 9 perfect strategies to drive the second purchase rate on your E-commerce website and persuade your customers to keep coming for more with the help of powerful email marketing campaigns.
We shall focus on why the second purchase rate is an important metric for an e-commerce marketer to track. We also list some actionable email strategies for the marketer to repeat customers with their well-crafted email campaigns. We shall be focusing on the email marketing strategy in particular in this article.
Firstly, let’s get to why retaining a customer has become more important for digital brands during a pandemic crisis…
Customer Retention is the new acquisition
Let’s face it…
Facing pandemic has changed the customer lifestyle and preferences. For a better part of 3-4 months, people valued home essentials more than luxury items.
Tone-deaf brands that decided to promote their products during such times faced a bad user backlash. This led to a lot of user churn from a marketer’s mailing list. That is why brands focused their attention on retaining old customers and getting repeat transactions from them.
During the lockdown, Zara – the luxury brand, closed around 1200 retail stores in Asia and Europe and focused on building its E-commerce platform and shipping capabilities.
The result: Their online sales growth made up for their overall sales weakness. Inditex, Zara’s parent company, saw a surge of 95% in their online sales during April. Their E-commerce orders went through the roof, and they ended up with 10% less inventory, which is impressive!
The precarious times we are living in call for a revision in a marketer’s strategy to attract audiences to their products.
According to a churn statistics survey, it costs 5 times more for a company to acquire new customers than retain the existing ones. According to a study by Bain & Co., retaining even 5% of your old customers leads to an increase in profits from 25-95%.
These are too big profit margins to ignore.
Metrics to measure for an E-commerce marketer
Customer Acquisition Cost (CAC) is an important metric that should be measured by an email marketer.
CAC = (Total expenses on acquiring new customers / No of customers acquired) within a period of time.
Customer acquisition has also become expensive as it continues to climb over 100$ per customer. So, the marketer should focus on their current customers, increase the incoming revenue, and build a loyal base.
Another metric that’s important to be mapped is the Customer Lifetime Value (CLV). It basically shows what kind of revenue to expect from a single customer during their business relationship with the brand.
Calculating CLV For A Customer
Average Purchase Value = (Total revenue / Total number of orders)
Average Purchase Frequency = (Number of purchases / Number of customers)
CLV = ( Average purchase value / average purchase frequency )
Now we know what CLV is; we need to know how it is related to the idea of a second purchase.
How does the second purchase rate affect customer lifetime value?
According to a survey, there is a 27% chance of a first time customer to return for a 2nd time. After the 2nd time, there is a 54% chance of that customer returning for the 3rd and 4th time. So in a way, getting a first-time user to come back for the 2nd time largely increases your chance of keeping them for the longer term.
According to Patrick Coddou, founder of men’s grooming gear ‘Supply’- “If you don’t get a customer to come back to purchase with your e-store within 60 days, you have probably lost that customer.”
A couple of statistics on E-commerce stores:
- The top 8% of the customer base will provide you almost 41% of the revenue.
- This builds a loyal customer base and forms 1/3rd of all E-commerce revenue.
- Almost 15% of customers are repeat shoppers on E-commerce portals, but they spend 3X more than 1st-time shoppers.
So the more they come back to your website for shopping, the more money they spend!
Also, with the holiday season approaching this year, E-commerce sales will sky-rocket as people will try to avoid shopping in retail stores. Sale and holiday periods are crucial for E-commerce marketers to focus on revenue and transactions.
So you need to retain your existing customers and get them to come back for more purchases.
This is the time when increasing the second purchase rate should be a priority for an E-commerce marketer.
Why is getting repeat customers crucial for an E-commerce business?
- COVID-19 Has Changed Customer Preferences
For a brand in the pre-pandemic times, it was normal to spend a major amount of the marketing budget on acquiring new customers. But the virus transmission has changed the customer mindset, where staying at home is preferred over going out to malls, stores, etc.
Our COVID survey with email users led to some interesting insights on how users have changed their behavior towards email. 40% of users had suggested that they have stopped checking their promotional emails during the lockdown period.
So getting new customers for retailers and E-commerce brands is a challenge. New business is harder to get due to store closures and a new minimalistic lifestyle of the users. Customer retention is the new king and a major source of any revenue for digital brands.
Your existing customers are the most profitable and worth the time and effort to keep them engaged with your brand. According to the Pareto principle, 80% of your revenue flow will come from 20% of your customers. Your repeat customers form a major part of this revenue stream.
- Loyal Customers Provide More Conversions
A repeat customer is easier to convert. It is estimated that there is a 70% chance of your repeated customers converting due to your promotional offers.
Your existing customers are used to a level of quality standard and hence will be reluctant to change their choices often. Quality and safety consciousness has increased with the people in the post-COVID time.
Scott Cohen, marketing manager at mattress company Purple, stated on our ‘For the love of emails’ podcast that they looked at the existing mattress customers and sent them campaigns on buying seat cushions during the lockdown phase. Existing customers who had a good experience with their mattresses were lured by the prospect of having a comfortable work from the home seat cushion.
They observed users browsing for particular products and made the best out of it. Thus, they increased the sales from their existing customers when brands were finding it challenging to increase revenue!
Familiarity breeds security for a customer.
- Returning Customers Tend To Spend More Money During The Holidays/Sales
Returning customers spend more money (almost 3 times) buying stuff from your store than the new customers. This behavior will further magnify during big sales and the holiday season.
According to adobe, people spend 17% more on buying gifts than they do for the whole year. That means more orders and more revenue just by keeping your loyal customers the center of your marketing program. Repeat customers will spend more during the holiday season, so be ready with your campaigns.
So craft some VIP offers for your loyal set of regulars and make them feel special. Velvet Rope Marketing can always be a great way to ensure that you keep your brand fans retained and satisfied with your services.
Make your top 5% of customers a priority and make them feel special.
- Repeat Customers Spread Good Word Of Mouth Publicity
Imagine a popular influencer on Instagram having thousands of followers. If they spread the word about your product on their post, you can have literally hundreds of new users checking out your app/website within a matter of minutes.
The same goes for returning customers who love your products and will gladly share a good word or two about you with their friends and followers. They are the prime reason for getting new business and ROI.
So, ask your existing customers to spread the word and create buzz on social media. And see your brand popularity rise.
Repeat customers are your strongest advocates.
Now that we have covered what the second transaction and its importance for E-commerce are, let’s go over some email strategies to get that second purchase and build more returning customers.
- Provide value to the customer with a memorable post-purchase experience
The best time to leave a good impression on a customer is when they have made their first purchase.
Naturally, you will be sending your shipping and delivery confirmation emails.
But what else can you do to make the customer leave a positive review on the purchase?
- If you need to educate the customer on the product bought then you can do that via a great engaging email.
E.g., If someone bought a hair gel/wax from your store, then send them a video on the different ways you can style your hair.
If someone has bought a fashion accessory, then you can send them a style guide for the season.
- If you have a blog on the website related to the product category, ask the users to read it, and then share it on social media.
- Keep in mind that these educational posts should be received by first-time transactors only and not for repeat purchases. Also, target them with automated drip campaigns to ensure every user opens the email and reads it.
You need to provide a lot of bang for the buck to your customers and build a relationship with them with your post-purchase experience.
You need to make sure that you provide value to your customer even when they have completed their purchase.
The post-purchase campaign by ‘Bellroy’ shows care for their customers on how they are doing with the purchased product. They have also smartly introduced user-generated content with Instagram posts. The bottom covers the promotion of other products, allowing the customer to check them out on the website.
- Introduce loyalty programs to reward the customer
Loyalty programs can be incredibly effective in E-commerce. They enable the users to spend more money and that too frequently.
Generally, post their first purchase; it is a great time to introduce your customer loyalty program. They help you to show your customers that you value their loyalty and differentiate yourself from your competition. It could be in points format, allowing them to shop more to earn the necessary points. They can redeem those points for some discount cash on their next purchase.
E.g., Providing 10 points in their program will help them get $10 off on their next purchase worth $100.
The customer ends up spending more the second time and accruing more points. There is a 10% increase in repeat purchases from customers with loyalty programs.
There should be a tier-based hierarchy for membership to the loyalty program, e.g.: (Gold, silver, platinum) where you can decide to give away some free products, doubling the rewards points for high spenders to the level of membership.
You can always use the loyalty program to upgrade your offers during major sale periods and the holiday season.
Eg: Double point weekends, holiday offers, seasonal promotions.
It’s often seen that post the holiday season shopping; E-commerce brands don’t engage with those first-time transactions in the subsequent months, allowing them to go dormant. To get that second purchase in January/February, you can give away extra points to the customers to engage them and get a second purchase.
Instead of giving discounts, offer loyalty points in your campaigns as a means to lure them. People get bored with discounts after a while. Providing discounts is a race to the bottom.
If some first-time customers have lapsed on their loyalty points, then you can send a personalized email campaign offering them to be moved to an upper tier of loyalty membership in return for their engagement. It always works to get the dormant first-timers interested in your product/service before pitching them for a second transaction.
Be data-driven in your approach and provide loyalty programs to reward your customers.
This campaign by Chipotle rewards customers with some free chipotle on redeeming their loyalty points. Offers like these promote affinity and get the customers to shop more often from your website.
- Appreciate the purchase and ask how you can be better?
Appreciate your customers for purchasing from your e-store. A thank you goes a long way in building a relationship of trust and value with your first-time purchaser.
Ask for feedback in the same email with a short form to get an idea of how their overall customer experience was. This will include all questions on delivery, packaging, shipping time, product quality, experience, etc.
Their replies will help you to nurture them better and plan your next purchase. I believe that feedback forms are utterly useful in knowing your customers in today’s competitive E-commerce market. If you don’t get to know your customer’s needs and act on it, then forget about getting them back again. They have got plenty of other options.
This campaign by meat brand ‘Licious’ thanks to the customer for the purchase and then asks for quick feedback that you can fill up inside the email itself. Quick and easy!
This feedback campaign by Frye provides a free gift card for taking their short survey. User feedback is important for brands to understand how they are faring with their customer service and product quality.
- Make your email personal to the customer
Send a personalized email specific to the customer post their first purchase. This campaign should be based on an offer tailored specifically to their past transaction and browsing history. Include the user’s name in the subject line. According to our upcoming benchmark report, personalized subject lines increased engagement across all industry verticals up to 3-5%.
Use subject line optimization for coming up with creative and impactful subject lines that work. Your campaign needs to build trust and provide the user with what they exactly want. It will nudge them further in the journey to make that second purchase from your store. Without a personalized approach, you can’t cater to your customer needs, and hence your content won’t resonate.
This campaign by ‘Hostelworld’ uses personalization in the email body and subject line to get the reader’s attention. They are offering attractive deals during COVID-times to book now and travel later when travel can start again.
- Segment your special audience and offer them VIP access
What if you had a list of all the buyers from your e-store for the last 6 months, and you wished to send them all relevant offers to bring in more business?
It is possible with the power of segmentation. Segmenting your list based on user interests, transaction/browsing history, feedback, etc., will help you tailor your emails to their needs. This will mean you will be sending relevant emails to your first-time buyers. Getting irrelevant emails is the number one reason why users flag emails as spam.
But when the content is relevant to their interests, you will see a dramatic spike in the engagement, which will reflect well in the conversions. You can provide some exclusive offers to the first time purchasers of your list. Offer them some VIP access, which is not offered to others, and this makes them special.
‘People will always forget the words you use, but they never forget how you made them feel.’
Segmenting your audience has been observed to get a high ROI. It is estimated that you get 20% of revenue from your top 5% of returning customers. This is your segment to focus on with your amazing offers and content. Keep them happy to get that fixed revenue secured.
E.g., If you have a loyalty program, offer the high-tier customers some special membership offers, and let them know that others don’t have access to it. This will make them come back to check out the offer and avail some special treatment.
You can use the same technique with the last 6 months non-responders, where this segment can be offered a free Amazon gift voucher to get them interested in your brand again. Offer an incentive to the user to browse through your amazing products.
Everyone likes to listen to music uninterrupted by ads. Spotify premium offers this and many more services for their premium members only. Your top customers need to be nurtured with top service and attention. Offer them something extra which only they can have access to. That will increase the value of your product and brand.
- Targeting similar products to first-time purchasers
To be customer-centric, you need to resonate with their interests. That means looking into their browsing and transaction activity. Your website analytics needs to be sharp to give you this intelligence. If a user is browsing for sneakers a lot on your e-store or already purchased a sneaker a month ago, why not target them with similar sneakers.
- Can you provide some great matching pairs of socks for them?
- What about brushes to clean those sneakers?
You have to deep dive into the data analytics to find out if a subscriber has made a certain purchase; what should be their likely next purchase?
Were they reading certain content on your website? Include a similar range of blogs and send them an educational email campaign. If you provide the customer at their fingertips what they were already interested in and checking out, you have won half the battle!
For e-retailers in the fashion and clothing space, targeting users with similar items or items from the same brand helps them shop for a second time. You need to know what item the customers have purchased and segment them accordingly.
Run some testing experiments around your thesis and see if that works to get more customers in!
This transactional email by Amazon still presents the top picks for you to shop for the next time. Their algorithms know which products to recommend to the first time purchasers to lure them for shopping in their store again.
- Use the power of your transactional emails to educate your audience
Transactional emails like order confirmation, delivery updates, and delivery confirmation get open rates of close to 60% [Omnisend], which is 4x times higher than any promotional email. So if you can use the power of engagement that your order updates receive, include educational content inside the same email and nudge the user to the next purchase.
Firstly post the first purchase, send an order update. You can include your educational content inside the email, like video, blogs, similar product offers, etc. That will provide the opportunity for you to do some brand indoctrination and raise your brand equity inside their inbox.
An example of how to include content in your transactional email flow and supercharge them:
E.g., After a user purchases a razor, in the order confirmation email, send a letter with tips to get the best shave from your razor. After 2-3 days in the delivery confirmation email – including a video in the same email for tips like above. After 7 days of purchase → , follow-up email and ask them for a customer review.
These drip campaigns will ensure that your brand remains front and center of the user’s mind. These campaigns will be a way to nudge the user forward into the buyer life cycle stages and get them to transact again.
You can also include some accessory products to the purchased one to make the 2nd purchase.
The order confirmation campaign by Harry’s provides the customer with additional tips to take care of the beard and have a better shave. Including educative content in your transactional emails provides clarity to the user on their purchase and explores more products of your brand. This campaign clearly shows a level of care for the customer, which is highly rewarded with return purchases.
This transactional type email from ‘Fabletics’ paves the way for users to share their own generated content and create a social buzz for the brand.
- Make use of timely cart abandonment and replenishment campaigns
Cart abandonment email campaigns could be an old tactic to get the shopper to return to the website, but it still works. Your returning customers might browse for some products on your e-store, drop them in the cart and forget about it. Treat your cart abandonment customers as your first-timers. Follow up on them by sending them your automated cart abandonment emails.
The average cart abandonment rate across industries is around 70%. E-commerce brands, on average, lose $18 bn in sales revenue each year due to cart abandonment. That is a lot of money to leave on the table for a marketer.
Why not target them and give it a shot for conversion?
Cart abandonment emails perform well with average open rates of 40% in 2020 and an average conversion rate of 8%.[barrilliance] That’s still hundreds of dollars of revenue gained, which others are just ignoring.
Conduct a survey with your internal stakeholders on what needs to be done to make the cart shopping flow smoother. Make some alterations to make it easier for the customer to fill the fields and make the payment. Offer some additional discounts to the customer if they are avoiding shopping due to additional costs.
Cart abandonment emails are an underrated but effective way to get a second purchase. Similarly, cart replenishment emails on consumable products keep the users aware of replenishing their stock. They drive shoppers to make these purchases simply because you reminded them that they need a refill.
This campaign by ‘Nomad’ infuses humor with perhaps the user’s wifi crashing being the reason for abandoning the cart. Messaging like this with a twist of humor will make your brand stand out. It will also persuade the customer to come back to the cart and make a decision.
- Have a unified view of your customer
In 2020, marketing is omnichannel with multiple sources to get the user’s attention on your product. These sources fetch you valuable insights into the customer persona, e.g., social media, website, app, Google ads, etc. To make any sense of customer behavior, the data needs to be unified into a single platform. This could be your marketing platform like Netcore’s Smartech, which offers an inclusive view of the customer activities and engagement from different channels in one place.
When you have clarity on all the customer’s omnichannel activities, you can create powerful campaigns to drive their repeat purchases. Some questions that a platform with a unified view can answer for you:
- Which channel is the user most active on?
- Which channel does the user respond to?
- What are the products the user is showing an interest in?
- What could be the best channel to target the customer?
Answers to the above will provide you the data to make sense of the real-time user interactions with your brand. AI has a huge role to play with CDP or the ESP that you are currently using. If the platform is AI-enabled, then smart segmentation, optimizing send times, and predictive churn are just some of the amazing capabilities it will provide you. These will help to make smart decisions for your email program.
You need to monitor your campaigns across the channels to find the right fit for the customer to engage with you for the second time. Only with the right CDP(Customer data platform) will you be able to target the right customer with the right message at the right time.
Visual of a unified view from our Netcore Smartech platform
Second purchases done within a short span of the first one lead to customers staying loyal to your E-commerce brand for a longer time. So don’t let those first-time purchasers lapse. Engage with them using the above strategies and get them to shop again on your portal for more revenue. Don’t leave money on the table as your one time customers can become repeat customers.
CAC and CLV are important metrics to track for an E-commerce marketer. Find out what these costs are for your brand and work on them to improve the numbers.
You will require a unified customer platform to analyze a buyer persona from their omnichannel activities. Integration capabilities of your marketing platform are also equally important, along with the use of AI to provide intelligence on how to target the user with the right kind of message with a delivery time appropriate for them.