What is Repeat Strategy for Ecommerce?

7Mar - by OnoHaruyo - 0 - In Outline of Repeat strategy for E-commerce


What activities are important for every business to build up more profit? Those that can acquire prospective customers and develop repeat customers.

Acquire new customers and generate repeat customers

To acquire prospective customers, companies should have the marketing strategies, which are methods for targeting customers. After getting new customers, we should retain and expand repeat customers in order to build up more profit.

However, the costs of acquiring new customers are increasing rapidly due to intensified competition in the Japanese market. The number of new customers that we can acquire by spending the same cost is decreasing. That’s why we need to pay attention more to generate repeat customers.

You have customers in a basket with holes.

If you do not implement the repeat strategy, it’s like a basket with holes. Since you have it, your customers will not stay as candidates for your repeat customers but will flow out to other shops as its new customers. It is one of the reasons why your shop is not able to expand its profit.

Repeat strategy in basket with holes

Why do owners of online shops not pay attention to repeat strategy?

Originally, the benefit of taking advantage of internet technology is that we can refine to segment targets than traditional advertisements such as TV, magazine, newspaper, and radio. In particular, there are a wide variety of internet ads related to search engines, which allow us to acquire targets accurately at an affordable cost.

So, most of us only looked at the advantage for the last 15 years when internet businesses became popular in Japan. Moreover, repeat strategy seemed like to spend much cost and effort because its methods included actual tools such as sending postcards and newsletters or calling loyal customers. It was an easy way to focus on acquiring new customers with only internet ads in order to make profits.

You included repeat strategy into traditional tools

The digital technologies for generating repeat customers are now available.

Since most of the people who are entering the internet business look at the advantage that can acquire prospects accurately at an affordable cost, it was natural for them to avoid using traditional tools. In that trend, they included related information of repeat strategy into the traditional tools and stopped to think about it.

Recently, a wide variety of internet tools for generating repeat customers have been developed. It’s time to consider how to retain and expand repeat customers.

I would like to mention 5 reasons why we should implement repeat strategy.

1. 80 20 rule, Pareto principle

“20% of loyal customers create 80% of profit”. It is one of the basic facts of business.

Since you have a limited time and budget, you should consider how to allocate them between acquiring new customers and fostering existing customers. Without giving a priority to generate repeat customers, the number of loyal customers will not increase.

Creating a long-lasting and profitable business., It’s important to have loyal customers as your business foundation.

2. Repeat customers will accept offers from you.

It’s good for businesses to make an effort to create positive customer engagement. It means creating an emotional relationship with its customer base to foster brand loyalty.

Engaged repeat customers are most likely to spend more money to purchase your products or services. According to some results, loyal customers spend 15 times more than new customers.

Not only are loyal customers will spend more money, they will most likely trust your business. So, keep in mind that they are not tools of creating money for you.

3.The cost of acquiring new customers is increasing steadily.

The cost of the internet ads continues to increase.

For example, CPA, cost per action, is one of the important parameters to measure the performance of the Pay-Per-Click Advertising and has increased. So you need to spend a lot of your time to adjust the setting of the ads to maintain CPA properly.

One of our clients, he is the owner of his online shop and runs PPC ads by himself, mentioned: “I spent only several hours a week to adjust the ads when I started the shop 10 years ago however, I have to spend most of my time to do it now!”

PPC is a model of internet ads in which advertisers pay a fee each time one of their ads is clicked. Search engine ads, one of the popular PPC ads, allows advertisers to bid for ad placement, like search engine’s results. That’s why the more the number of advertisers, the more expensive the cost.

It seems like a competition between the performance of CPA that become ineffective with the increase in competitors and the knowledge of the people who strive to adjust it. They don’t have enough time to think about their customers.

4. The cost of creating relationships is decreasing resulted from the newly developed digital tools.

Although we aren’t willing to think about traditional tools, newly digital tools for generating repeat customers have been developed.

LINE@ is one of the popular tools to help make relationships with prospective and current customers. You can start using the app for free. LINE became the most famous SNS in Japan since 2011 and has 71 million users.

Also, when you check your customers’ satisfaction, you can use Google forms instead of sending mail individually. I would like to introduce these useful tools in another article.

5. Repeat strategy enhances businesses the mind and perspective for the near future.

This view is what I think the most important thing in having repeat strategy. A business is existing in its vision that they would like to realize with the help of their customers.

While the business external environment is changing, they are required to continuously generate a new value for customers. Who is the person that can find the idea of the future value that the business should have?

The answer is their customers. The customers who like something related to the fields of the business have more knowledge than the company. Since they like it very much, they will get new information and learn from it and how to enjoy it more. At the same time, the employees of the company do their jobs. That’s why customers will become skillful about the needs and insights of the business.

If you do not acknowledge the importance of creating relationships with customers and do not take advantage of such skills the customers have, it’s difficult to find out what kinds of value you should provide in your business in the future.