Increasing repeat purchasing in online stores and marketplaces
Customer Retention vs. Customer Acquisition
The data on customer acquisition is a 101 amongst those that are engaged with the processes behind successful sales and marketing.
The Customer Acquisition Cost (CAC) metric suggests it costs up to 5 times more to acquire a new customer than it does to retain an existing one.
There are some related statistical findings that also feed into the logic behind looking after and keeping hold of your existing customers:
Increasing customer retention by 5% can increase profits to between 25-95%
The success rate of selling to an existing customer is between 60-70%, while the success rate of selling to a new customer is between 5-20%
Put all this together and clearly, there is a need to make sure you keep hold of customers once you have won them, and focus your efforts to get them to make further purchases and maximise their Lifetime Value (LTV) to your business.
For merchants - as online vendors of consumer services and products - the question is how do you increase repeat purchasing by encouraging customers that you have already won to come back and buy from you again?
Loyalty, customer experience and advocacy
In the quest for repeat sales success there is little doubt that customer experience (CX), loyalty and advocacy are something of a holy trinity. From our own activities as online consumers, we know it rings true that providing a great CX results in customer loyalty and advocacy.
There are many elements that contribute to providing a great customer experience. One of those that is increasingly important is the need to make it easy for customers by giving them a purchasing process that has as little friction as possible.
Towards the final step: payment
There are a few elements to consider when making it easy for customers to buy from you. A website that produces a frictionless process is paramount. Your online store or platform should be designed so that it meets with best practice for web design that supports ecommerce conversion. This ensures that it is intuitive and meets customer expectations about where to locate things in the webstore.
Interacting with the process steps, such as choosing and configuring products and services, and arranging for delivery also need to be as easy to understand as possible. The final step is of course payment, and it is vital that payment processes do not throw up barriers that cause customers to rethink whether to complete their purchases.
BNPL and other types of consumer credit
For decades, credit cards have been widely used by consumers to make paying easier to swallow, by deferring payments for purchases to the end of the month, or the end of a 0% promotional period.
Recent times have seen this approach being increasingly displaced. Consumers have rapidly come to prefer the BNPL style credit that merchants are now able to offer at the point of sale. Customers have been won over by the speed and the ease with which they can make such payment arrangements. The scope of the credit agreement is limited to the scope of that particular purchase, and they don’t have to take out loans to cover repayments.
There are a number of ways that this flexible approach to payments can be embedded. Some webstores provide credit facilities by offering financing funded and branded by payment services providers. However, other types of embedded finance that you can use within your webstore or marketplace may provide better value and a richer feature set.
Take a look at how Synapi helps increase repeat sales
Synapi, for example, gives you the ability to offer BNPL or other types of financing. It also allows you to provide credit under your own brand, and have the flexibility to fund any proportion of the financing that suits your business.
This is a more compelling proposition for merchants, because, quite simply, this approach lets you tailor the financing you offer to meet the needs of your business and customers, it reinforces your own brand, and lets you maximise your profitability.
To see how Synapi improves customer experience and helps increase repeat purchasing in your online store or marketplace, simply contact us to arrange a demo.