Previously, we took a look at some of the basics of lifetime value and cost to acquire — and how this affects your business — but assuming you were able to successfully acquire new customers for Black Friday and Cyber Monday, how can you increase the value of these customers and get them to buy again (and again)?
One of the first challenges you’ll face in turning these customers into repeat purchasers is if, like most merchants on BFCM, you offered a substantial discount.
Most BFCM shoppers expect — and demand — steep discounts on Black Friday, so one of the first challenges can be to get them out of that mindset and get them to buy with lower — or no — discounts.
Repeated discounts can often erase profits and even cause you to go into “debt” to make a sale, so be sure to run the numbers carefully compared with your advertising costs and any overhead and other expenses.
If your store is likely to generate repeat sales, then you may be able to take a larger “hit” on the first order just to acquire the customer — and make up for it with future orders at more standard pricing. If you have particularly high margins, you can continue to offer discounts.
However, if your margins are narrow or you simply can’t justify “giving away the farm,” another strategy can be to wean your customers off heavy discounts over a period of time by gradually pulling back on discounts and letting your products speak for themselves.
It’s also not entirely unheard of to stop discounting altogether, especially if you are able to effectively communicate your products’ value added propositions and unique features.
Avoiding discounting outside of the BFCM (or even during that time period) is also another way to enforce the quality and prestige of your brand and products.
That said, generating repeat business off of BFCM buyers obviously also requires offering products that they want and need well into the future of their relationship with you.
For some product lines this is easy — especially ones that are relatively inexpensive “impulse” buys or ones which enhance your main product. This can mean a small or extensive expansion of your product line — which can be quite an investment in time and money.
For stores already carrying a large variety of products, think creatively about how you can present other products to shoppers, and illustrate why they’re worth picking up. Maybe they complement or expand upon their past purchases, or enhance the functionality of their original order. For apparel shops, accessories are an obvious choice, and for many types of shop, some kind of irresistible gadget, knick-knack or gift idea can trigger additional purchases.
In most cases, the more enticing and value-added these types of products are, the more likely you can market them to your BFCM customers — and get them to buy at smaller or no discount.
If your store has a smaller selection of products, this could require the larger undertaking of new product development or sourcing to ensure you have an enticing lineup of inventory to generate future sales — and not all store owners are equipped to do this.
For stores not able to actively create new products or that do not lend themselves to large inventories, promotions to encourage repeat customers should obviously focus on any of the products you do have.
If this isn’t an option, however (or let’s say your store only has one product), alternative strategies could be to encourage customers to buy one or more additional of the same product either as gifts or, if appropriate based on what you sell, for their home, office, second homes, travel or other scenarios.
You can also focus on “spread the word” incentives — soliciting reviews or social engagement with your brand — since happy customers can be the best form of advertising, and are likely to know others who might find your products or services useful.
Finally, keep in mind that many BFCM shoppers may be buying gifts for someone else and may have little or no use for your products themselves, so marketing to them won’t always be effective (imagine pushing ads for climbing gear or action figures to grandma).
If you do have alternative or broader product lines that might interest almost anyone, consider focusing marketing on these, particularly on orders that are likely to be given as gifts.
If the recipient of the gift is more likely to become your actual repeat customer, you’ll need to think creatively about reaching them and having them opt-in to hearing from you.
Some ideas include:
Keep in mind that, in most jurisdictions, you may need to get explicit permission from the recipient to contact them with marketing materials, especially via email.
The advantage, however, of obtaining the recipients’ contact information is that this essentially eliminates the CTA expense. Even if you do need to spend some additional money on marketing to recipients, it is often much less expensive and worth the new customer acquisition.