Turning Buyers into Loyal Buyers

Jun 19, 2006 10:00 PM  By

Just because a person is a buyer doesn’t make his a loyal buyer. Loyal buyers are those who have purchased from the company two or more times. The single-buyer rate on a 12-month house file can range from as low as 20% to as high as 85% depending on the product category and marketing strategy. This presents an opportunity to increase the multibuyer portion of the house file and greatly improve the company performance on the top and bottom lines.

First-time buyers are more likely to respond to your offer than prospects because they have brand affinity and actual history of purchasing your product line. In addition, with no additional cost to acquire this name, much higher profits result than with prospecting. The overall marketing strategy should be to immediately try to convert these single buyers into a higher-value multibuyer and an even higher-value multichannel multibuyer. The longer a company waits to convert these first-time buyers, the less likely the customers will be to respond.

You can implement several marketing strategies among these new buyers to yield the highest return:

  • Package stuffers. Include a package stuffer with the shipment of every order. This catalog can be the same catalog mailed to customers or one with a special cover, dot wack, or inkjet message targeted to this recent purchaser. Package stuffers are very productive catalogs with strong response and only an incremental cost to print and send with the outbound order.
  • Thank-you e-mail. Within three days of the customer’s receiving his order, send a thank-you e-mail stating that you hope he is enjoying his purchase. Include relevant product offerings in this e-mail. Depending on margin and the 12-month lifetime value of a customer, you could include an incentive offer to increase response rates.
  • Order stripping. Order stripping is a technique of pulling recent orders out of the order entry system on a regular basis (daily, semiweekly, or weekly) so that you can quickly mail new buyers without waiting four to six weeks for the next regularly scheduled catalog mailing. When mailing catalogs via order stripping, it is best to use your catalog request fulfillment center or an expedited service. You can use either a standard catalog or a special catalog or offer with order stripping. To further build the relationship with the customer, mail the catalog in an envelope with a personal letter thanking the customer for his order and showing appreciation by including a special offer that expires in 30 or 60 days.
  • Hotline merge/purge. Include all new customers in the next hotline merge for a catalog mailing. Putting these customers into the normal mailing cycle quickly will improve results and the conversion to multibuyer status.
  • Add buyers to database. By loading these customers into the database, you can clearly identify the remaining one-time buyers as well as their recency and channel. Future print and e-mail mailings will be pulled from this database. Special offers, messages, and mailing strategies can be created for the one-time buyers to encourage conversion to a loyal buyer.

By creating a timely marketing plan for first-time customers, with a high-frequency initial contact pattern and myriad marketing vehicles, you can triple your customer response rates and value. So start turning your first-time, new buyers into loyal multibuyers today.

Michelle Farabaugh is a partner with San Francisco-based Lenser and will be presenting “Maximizing Lifetime Value: The Promise of Multichannel Marketing” at MCM Live, a two-day intensive session presented by MULTICHANNEL MERCHANT, Oct. 5-6 in San Francisco. For more information on MCM Live, which explores the multichannel organization from the inside out and from the front end to the back, go to www.MCMLive.com.