Little Data, Lots of Expectations: Making the Leap from First to Second Purchase

May 10, 2018


BEST PRACTICES SERIES

Article ImageCustomer acquisition is expensive and time-consuming. The last thing brands want to do after landing new customers is lose them. So, they follow up--they send an email, and another, and maybe even another. The result? Radio silence from customers. Sometimes the customer opens the email, sometimes they don’t--but many times they unsubscribe and all the work that went into acquiring that customer amounts to only that single sale.

The second purchase is pivotal for businesses. For example, in apparel, a one-time customer only has a 14% chance of buying again, while a second-time customer has a 27% chance of buying again. Nearly double the chances!

Here are five insights that help brands generate the next purchase and build long-term customer relationships: 

Customers Want Brands To Pay Close Attention To Them, Right Away

When customers make a purchase, they go from being perfect strangers to expecting the retailer to know all about them. Customers begin evaluating brands on how well they’ve been paying attention when the first post-purchase communication kicks in. “Did you target me with an ad for something I’ve already bought?” “Do you know my size?” “Did you notice that I bought for my children?”

Retailers want to know their customers, but there’s a disconnect between the speed at which it actually happens and the speed at which the customer expects it. 

Brands Want Customers To Pay Close Attention To Them, Right Away

The disconnect between what companies know about customers and what customers expect companies to know can get awkward…

Soon after the initial purchase, brands are eager to “re-activate” new customers by getting them back to their store. Often, they send the new customer a post-purchase email focusing on an item they believe the customer will buy next. Messages to new customers are intriguing: post-purchase emails generate some of the highest open rates (39%).

That open rate might be due to customers looking for a shipping confirmation: these same emails also have particularly high unsubscribe rates (0.4%) and relatively low click (5.8%) and conversion rates (0.38%). Customers are opening them, but they’re not engaging with them. And when customers aren’t moved to engage with the first post-purchase email, they’re less likely to open any that follow. 

Determine Where Things Went Wrong

To determine why their post-purchase emails aren’t working, many marketers focus on the timing or the frequency of their emails they send after purchase. What they also need to focus on is the relevance of the first communication that attempts to re-engage them. Customers don’t care how many relevant emails they get, but they will unsubscribe after they receive one irrelevant email. 

There’s No Excuse For Irrelevance

Even though brands usually don’t have a long history with the customer at the time of a first purchase, they should know enough about the customer to be relevant.

After the first online purchase, retailers have data regarding what a customer viewed, searches they conducted, product(s) they purchased, and product(s) they abandoned. (Granted, not all marketers have easy access to this data – but they should.)

These insights should inform which products the customer is likely to buy next–or at the very least, bring the brand closer and closer to knowing the customer’s next preference. While you don’t need to be completely on-target with their product recommendations, they shouldn’t be completely off-base either.

Focus On The Next Interaction, Instead Of The Next Transaction 

Knowing the customer is critically important when trying to convert a first-time buyer into a second-time buyer. And getting more data on a customer is critical to achieving this.

Instead of focusing strictly on the next transaction, retailers should use the post-purchase email to drive the next interaction, which will give the retailer more insight into the customer’s unique preferences and patterns. Every product a customer engages with has specific attributes--so the more products they browse, the better the recommendations will be from the brand.

Even further, marketers should take into consideration an entire audience’s overall purchasing patterns to inform recommendations and influence cross-sells. For example, if a customer’s first purchase was a pair of shoes, retailers can use the collective wisdom of their other customers and see what they purchased next. If many customers bought socks following their shoe purchase, retailers can then recommend socks to this first-time buyer to drive another interaction.

The good news is that brands don’t have to seal the deal with customers on their first attempt. Depending on the industry, our research shows that 60% of second purchases occur within 100 days of the first purchase. A post-purchase communication’s function should be demonstrating relevance and driving interaction. These activities build emotional relationships with a brand. Purchases will follow.


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