Appstle | Unlocking Profitability in E-commerce: The Power of Repeat Customers and How to Win Them Over

Unlocking Profitability in E-commerce: The Power of Repeat Customers and How to Win Them Over

Appstle | Unlocking Profitability in E-commerce: The Power of Repeat Customers and How to Win Them Over

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In the high-speed chase for success in the e-commerce arena, every store seems fixated on one goal: capturing new customers. It’s a relentless pursuit, often overshadowing a more subtle yet powerful strategy – cultivating repeat business. 

While the allure of new clientele is undeniable, the real growth hack lies in the customers who come back time and again. These repeat customers are not just buyers; they are the unsung heroes of sustainable growth. 

In this blog, we’re going to unveil the true value of repeat customers and explore how they can be the game-changers for your e-commerce business. 

What are repeat customers?

Repeat customers in e-commerce are consumers who consistently return to use your services or purchase your products. These are customers who go beyond one-time transactions, evolving into loyal patrons of your brand. They represent a segment of your customer base that not only contributes to your revenue through multiple purchases but also reduces your overall customer acquisition costs. By closely monitoring the data and behavior of these returning customers, you can identify key trends and preferences that help in fostering even more repeat business. 

The significance of these repeat customers lies in the multitude of benefits they bring: from providing a steady revenue stream to acting as brand advocates who can draw in new customers through word-of-mouth. Their recurring engagement is a powerful indicator of your business’s ability to meet and exceed customer expectations, making them an essential asset in the growth and sustainability of your e-commerce venture.

Why are repeat customers important? 

Here is why repeat customers are extremely valuable for an ecommerce store: 

1. Increases Likelihood of Repeat Purchases

The probability of a customer making another purchase grows with each transaction they make. Initially, a customer has a 27% chance of returning to your store after their first purchase. This likelihood significantly jumps to 49% after a second purchase and 62% after a third. Essentially, the more a customer buys, the more likely they are to keep buying.

2. Higher Conversion Rates and Lower Marketing Costs

Repeat customers are easier to sell to, with a notably higher conversion rate compared to first-time buyers. While average conversion rates in e-commerce hover between 2.5% and 3%, repeat customers break this mold, thanks to their familiarity with your brand. Moreover, marketing to them is more cost-effective, as they’re already in your database, allowing for targeted, automated campaigns and less reliance on broad-spectrum conversion tactics.

3. Greater Spending Per Purchase

Not only do repeat customers shop more frequently, but they also tend to spend more per purchase compared to new customers. This increased average order value means that repeat customers contribute significantly more to your revenue over time.

4. Enhanced Sales During Peak Times

During key shopping seasons, such as the holiday period, repeat customers play a crucial role. For instance, in the November and December shopping season of 2022, 38.4% of customers were repeat buyers. This statistic underscores the importance of repeat customers, especially during high-demand periods like Black Friday, Cyber Monday, and Christmas.

5. Profitable User-Generated Content (UGC)

Repeat customers are invaluable for generating authentic, trustworthy user-generated content (UGC), such as social media posts, video content, and online reviews. In 2023, UGC was ranked as the most credible content type by consumers, highlighting its potential for building authentic customer relationships and influencing purchasing decisions. Encouraging repeat customers to share their experiences through loyalty points or rewards, especially for photo or video reviews, leverages this trust and amplifies your brand’s reach and impact.

How to Identify Repeat Customers? 

Identifying repeat customers is crucial in crafting a targeted retention strategy. This can be achieved through various methods:

1. Loyalty Programs

Encourage existing customers to join your loyalty program, which could offer initial purchase discounts, freebies, or loyalty points. Ensure the program is easily accessible and the signup process is smooth and intuitive. Integrating the loyalty program signup during the checkout process can enhance customer experience and increase participation rates.

2. Analyzing Customer Data

Customer data is a treasure trove of insights. Calculate the repeat customer rate using this formula:

(Number of customers who’ve purchased more than once / Total number of customers) × 100 = Repeat customer rate (%)

For deeper insights, adjust the formula to account for specific spending patterns or frequency of purchases:

(Number of customers who’ve purchased X times / Total number of customers) × 100 = Rate of customers who’ve purchased X times (%)

3. Point of Sale Data

Your Point of Sale (POS) system provides comprehensive data, including customer longevity, purchase frequency, total expenditure, and product preferences. Analyzing this data helps to understand shopping behaviors and assess the impact of your marketing strategies on sales and repeat customer rates.

💡 Pro Tip: Combine your POS data analysis with e-commerce analytics for a more efficient approach to inventory management and to gauge the impact of your physical store on online sales and customer loyalty.

4. Customer Profiles

Use your POS system to review customer profiles, which can provide a comprehensive overview of individual purchase histories and preferences. This information is invaluable for tailoring your offerings and marketing efforts to suit repeat customers’ needs. For example, PDPAOLA, a Spanish jewelry brand, utilizes Shopify POS’s customer profile feature to merge in-store and online data, creating more personalized incentives based on customer preferences.

💡 Pro Tip: Collect customer emails at checkout by offering digital receipts. This approach helps build your email list for retention marketing while ensuring compliance with data protection laws by obtaining customer consent.

By implementing these strategies, you can effectively identify repeat customers, enabling you to tailor your services and marketing efforts to nurture and grow this vital segment of your customer base.

How to Increase Repeat Customers?

While there isn’t one way to go about it; here are some strategies we recommend:  

1. Reward Repeat Customers

Transforming your one-time buyers into loyal patrons hinges on how well you reward and acknowledge their repeat business. It’s crucial to remember the 80/20 rule in retail: typically, 80% of your revenue is generated by just 20% of your customers. This underscores the immense value of repeat customers in your business model.

To effectively reward these customers, leverage your POS software to its fullest potential. Track their purchasing habits, create comprehensive customer profiles, and synchronize this data to provide highly personalized shopping experiences. Quick access to data such as order history and customer preferences allows you to tailor rewards in a way that resonates with each customer.

Consider implementing a variety of rewards that appeal to different customer segments. These could range from exclusive discounts on future purchases to early access to new products, or even personalized gifts that align with their purchase history. The key is to make your customers feel valued and recognized for their loyalty.

Moreover, introducing a loyalty points program can incentivize repeat purchases both in-store and online. This can be effectively communicated and managed through automated systems, making it easy for customers to understand and benefit from the rewards on offer.

2. Focus on Customer Service

Prioritizing exceptional customer service is vital in transforming one-time buyers into repeat customers. Excellent service doesn’t just solve problems; it creates a memorable experience that encourages customers to return. It’s about going beyond the basics and truly exceeding expectations.

Take inspiration from companies renowned for their customer service, like Chewy. This online pet retail store sets a high standard by consistently delivering service that surprises and delights its customers. Whether it’s through quick response times, personalized attention, or unexpected gestures of goodwill, their approach turns ordinary transactions into memorable experiences.

In your business, ensure that every interaction with your customers – whether it’s a query, a complaint, or feedback – is handled promptly, empathetically, and effectively. Train your team to not only resolve issues but to proactively offer help and advice that enhances the customer’s overall experience with your brand.

3. Use Email to Stay Top of Mind

Effectively utilizing email as a communication tool is a strategic way to keep your brand at the forefront of your customer’s minds, encouraging repeat business. By using email effectively, you can maintain a consistent and engaging presence in your customers’ lives, gently nudging them toward becoming repeat customers. It’s about crafting email campaigns that are not just informative but also engaging and personalized.

To excel in email marketing, think beyond the standard promotional messages. Start by segmenting your email list based on customer behavior and preferences. This allows you to send targeted content that speaks directly to different groups of customers. For instance, send tailored recommendations based on previous purchases, or exclusive previews of new products to your most loyal customers.

Additionally, leverage the power of storytelling in your emails. Share behind-the-scenes glimpses of your brand, customer success stories, or the inspiration behind new products. This not only keeps your audience engaged but also builds a deeper connection with your brand.

Also, remember the importance of consistency. Regular, well-timed emails keep your brand in the customer’s mind without overwhelming them. Balance is key – too many emails can be intrusive, while too few might cause them to forget about your brand.

Lastly, always include clear, compelling calls to action in your emails. Whether it’s inviting them to check out a new product line, read a blog post, or take advantage of a special offer, make it easy for customers to engage further with your brand.

4. Offer Subscription Purchases

Introducing a subscription model is a powerful way to boost repeat customer engagement. By offering subscription purchases, you not only provide a convenient solution to your customers but also establish a regular and predictable revenue stream for your business. It’s a win-win approach that strengthens customer relationships and enhances business stability.

The key to a successful subscription offering is to make it irresistibly convenient and valuable for your customers. Consider what products or services in your catalog are suitable for regular use and would benefit from being offered on a subscription basis. These could be anything from daily essentials to specialty items that customers love and need regularly.

Make subscribing an attractive option by offering special perks or discounts for subscription purchases. For example, subscribers could receive a certain percentage off each order, exclusive access to new products, or flexible customization options for their orders. These incentives not only encourage customers to subscribe but also make them feel like they’re part of an exclusive club.

Additionally, ensure the subscription process itself is user-friendly. The sign-up should be simple, the options for customization clear, and managing the subscription – like pausing, changing, or canceling – should be hassle-free. The more control customers have over their subscriptions, the more satisfied they are likely to be.

5. Offer Membership Programs

Introducing membership programs is an excellent strategy to cultivate a sense of exclusivity and loyalty among your customers. By offering a well-thought-out membership program, you not only enhance customer loyalty but also create a dedicated customer base that is more likely to make repeat purchases and advocate for your brand.

When designing your membership program, focus on offering unique benefits that resonate with your target audience. This could include early access to new products, members-only discounts, or special customer service privileges. The goal is to make members feel privileged and appreciated, which in turn, fosters loyalty and encourages repeat business.

Ensure that joining the membership program is a seamless experience. It should be straightforward for customers to sign up, understand the benefits, and see the value of being a member. Transparency about the program’s terms and conditions is also crucial to build trust.

6. Set Up a Loyalty Program

Establishing a loyalty program is an effective way to encourage repeat business and deepen customer engagement. A well-designed loyalty program rewards customers for their continued patronage, making them feel valued and incentivized to return.

To create a successful loyalty program, it should be straightforward and rewarding. Design a system where customers can easily accumulate points for purchases, referrals, or engagement with your brand. The rewards for these points should be enticing and attainable, such as discounts, exclusive products, or special experiences.

Transparency is key. Ensure that customers clearly understand how they can earn points and what rewards they can expect. This clarity builds trust and encourages participation. Additionally, make the process of tracking and redeeming points as simple as possible, enhancing the overall customer experience.

Personalization can significantly enhance the effectiveness of your loyalty program. Tailor rewards and communications to align with individual customer preferences and purchasing history. This personalized approach not only increases the perceived value of the program but also strengthens the emotional connection between your brand and your customers.

Regularly evaluate and adjust your loyalty program based on customer feedback and participation rates. This adaptability ensures the program remains relevant, engaging, and aligned with your customers’ evolving needs.

Wrapping up

The journey to nurturing repeat customers in e-commerce encompasses a variety of strategies, each pivotal in building a loyal customer base. From rewarding repeat purchases and crafting personalized membership programs to utilizing targeted email campaigns and establishing impactful loyalty programs, these methods collectively contribute to enhancing customer loyalty and driving repeat business.

In implementing these strategies, having the right tools at your disposal is key. This is where Appstle steps in, offering a comprehensive suite of apps designed to support and streamline your customer retention efforts. 
With Appstle, you can efficiently manage loyalty and membership programs, set up subscription models, and much more, all tailored to keep your customers engaged and coming back for more. Embracing these tools from Appstle can be a game-changer in converting one-time shoppers into long-term, repeat customers, ultimately fueling the growth and success of your e-commerce business.

About the author

Appstle | Unlocking Profitability in E-commerce: The Power of Repeat Customers and How to Win Them Over

Vanhishikha Bhargava

Vanhishikha Bhargava is the Content Marketer for Appstle Solutions. You’ll always find her creating content or reading up on the industry with a cup of coffee in hand, which makes her anxious at times! But stay tuned for insightful pieces. Always.

If you are looking to understand more about Appstle Inc’s products and solutions, you can get in touch with us. Our 24x7x365 available experts will be happy to assist you further.

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