Businesses in the digital economy are increasingly dealing with tons of data. Supplier data, traffic data, site performance data, sales and promotions data, AB testing data … Big Data. How do you sort it all out and have the confidence at the end of the day that you are not missing what’s important? Oh well – you are right – the title gave it away. The most important data for a business to organize well and leverage is the customer data. The goal of course is to attract, keep and grow the number of customers. Or is it? Let’s see.
Understanding the Customer
The key question a retailer needs to ask is – what customer data do I have, or can I easily obtain? Data that will help me learn about my customers, their affinities, their influencers, how they prefer to buy, what deals are they most likely to respond to, what time of the day or the week are they most likely to engage and interact with my brand, how often are they likely to make a repeat purchase and in what circumstances.
The answers to these questions will help the retailers to segment their customers better, to make the right offers at the right time, to capture up-sell and cross-sell opportunities. Based on customer data over time the marketers can determine if acquiring new customers at a low cost is more profitable than nurturing and cultivating existing customers to become repeat customers.
Segmenting the Customer
According to the 2014 RJ Metrics Ecommerce Benchmark report – the top 1% of customers, spend 30x as much as the average customer. Do these 1% get more attention? Can you use your customer data to increase these 1% to 2%?
Source: RJ Metrics 2014 Ecommerce Benchmark Report
What about the average spent per order? Is it possible that your best customers not only spend more often, but also spend more per order? Not only possible, but according to RJ Metrics – they spend 5x more per order than the average customer.
Source: RJ Metrics 2014 Ecommerce Benchmark Report
Based on behaviors of the best customers, identified through customer data, marketers are getting better at influencing repeat purchases. Tactics like group buying, subscription commerce, flash sales and VIP sales are winning more and shifting the focus on building long-term customer relationships.
So – going back to the goal – attract, keep and grow the number of customers. I would like to redefine this to – attract, keep and grow the number of repeat customers. Talk to us today and we will help you see how you can attain this and more with the tools of the Upshot Commerce platform.