Why second sale is so damn important in ecommerce?

Jeff Bezos, the founder and CEO of Amazon, once said:

We’ve done price elasticity studies, and the answer is always that we should raise prices. We don’t do that, because we believe […] that by keeping our prices very, very low, we earn trust with customers over time and that actually does maximize free cash flow over the long term.

The most successful ecommerce entrepreneur of our times says that less is more. How can that be?

Ecommerce, among other things, has the big advantage of being able to track customer behavior in a very precise manner and measure the impact each customer brings to the business. And figures say that, when looking at profitability, you can split your customers into two categories:

  • the new customers
  • and the returning customers.

Nothing new, right? Though, the statistics to come might surprise you. According to Forrester and U.S. Census Bureau, returning customers, which bring only 27% of conversions on your ecommerce website, generate 100% of your company’s profit. In fact, retailers sometimes complain that they earn nothing when acquiring a new customer.

Nevertheless, the truth that Jeff Bezos knows is that he doesn’t have to increase prices for higher profitability. He just needs to make a second sale to that newly acquired, unprofitable customer. Because a returning customer:

  • will spend more
  • will come with 0 (zero) acquisition cost
  • and, last, but not least – will tell others about you and generate more business.

To support this idea, Adobe’s white paper proves why ecommerce marketing should focus more on returning customers and generate repeat purchases. The study states that, in Europe, the average revenue from a first time purchaser is around 1.75 euro. The second sale will count for 3 times more money, and the returning customer who comes back over and over again will spend 7 times more than a first timer.

So yes, second sale and loyal customers are the most important for ecommerce success. Getting there though means going through both 2 stages of the process:

Stage 1 – Before a second sale, complete a first one by:

Remarketing – get your new visitors back on your ecommerce website. If you didn’t convince them to buy something with the occasion of the first visit on your website, then find them again! Tell them more about your service and brand and take the best out of today’s email marketing possibilities.

Being a good advisor – help your customer choose the most suitable product on your website, by being transparent with your product specifications and other users’ testimonials.

Not complicating things – no one wants more hassle with buying something online than from a physical store. So offer every information and opportunity you can in order to make contact, shipping and return as smooth as possible.

Stage 2 – Make that second sale and get returning customers by:

Service, service, service – it’s a fact that everyone knows: a happy customer, always a customer. So care about your customer satisfaction, measure your score and see if you can reach Amazon’s performance regarding returning customers.

Adapting to the media devices your customers enjoy shopping from – adapt your online store to a digital catalogue format that can be easily viewed from a tablet, for example, and give your customers the possibility to shop easily while browsing through your website as a free time hobby.

Relevant communication – ask for feedback after the purchase and measure your customers’ satisfaction. Set-up a way of sending customized email messages to your customers and you’ll get that repeated sale!

Now that you know what you have to do for your online shop’s success, check out our conversion rate optimization solutions and start taking action!

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