Like most consumers, I have some very established habits when it comes to my purchasing behavior. I have a repertoire of brands that I will tend to select from across a broad range of product categories. Within foodstuffs as a household we will typically buy the same things week after week. When it comes to things like financial services I’m not one of those people who is constantly looking for the best deal on my credit card or checking account. And in clothing I typically buy from a small portfolio of retailers. I don’t think I’m particularly unusual. A lot of consumers have fixed habits, and often that can be confused with loyalty. However, changing habits can be tough. Recently I was reminded of how difficult it can be to change a consumer’s habits, but also how intelligent data-driven marketing can help.
I usually buy my shirts for work from the same specialist retailer and these days I mostly do it online and in bulk as they have a good discount program. It’s a habit – I don’t think about where I’m going to buy shirts from if I need shirts. I go online and buy them from these guys. I’m on other clothing retailers’ mailing lists and get regular communications from them, either through the door or by email, but generally they get ignored. However, a month or so ago a catalogue landed on my doormat from a competitive retailer with a very good introductory offer for similar types of shirts for less than half the normal price. I was in the market for some shirts so I ordered a couple to give them a go. The promotional price was very good so I felt the risk was low.
You’re probably thinking, “so what?” This other retailer has just gained me as a new customer. They’ll look at the numbers from that promotional campaign and chalk me as a new customer up against it. Well, they might think that, but in reality what they have so far is someone who’s placed one order at a heavily discounted price. I don’t have a habit of buying shirts from them yet and unless they’re happy with the margin they made on my first order, I’m probably not that valuable to them.
What happened next was interesting and made me think that they understand that. I got a letter through the post. It was a nice letter, on nice paper, in a nice envelope. It was a letter from the founder and chief executive (CEO) of the business and it was headed “Thank You.” It said:
“Please accept my thanks for giving a small but passionate shirt company a try. Quality menswear is my life and I am delighted to tell you personally how much I appreciate your custom.”
It went on later:
“The enclosed voucher is sent with huge gratitude for ordering from us. It is not much, I know, but I hope you will accept it in which it is intended. It is from me – with thanks.”
OK, he was laying it on a bit thick and he was right, the voucher wasn’t that much. However, what was clear to me was that he understood that at this point he didn’t have a new customer and that what he had was a new trialist. I had given them a go and what they really needed me to do was to order from them again and preferably sooner rather than later. They appear to understand the concept of customer friction and developing habits.
Many businesses’ customer databases are littered with customers who’ve only done business with them once. That’s hard work attracting all those one-off customers. What your analytics should be telling you is also the importance of getting these new customers to order again. Because once you get them to do it twice, then it’s marginally easier to get them to do it the third time, and then the fourth time, and so on. It’s a bit like momentum on a bicycle; after you’ve got started it’s easier to keep going. What businesses need to do is to reduce the “friction” involved in moving the customer from one transaction to the next and from the first transaction to the second is where the biggest friction is. This company was trying to do that with an emotional trigger and also with a financial trigger. I suspect for them, the repeat purchase rate is probably an important metric and that they understand that the significant impact that small increases in customer retention and loyalty can have upon an organization’s financial performance.
For that reason, maybe I’ll give them another go…
Image via Shutterstock.
Emily Ma, product director of Tencent’s advertising platform products department, was a keynote speaker at ClickZ Live Shanghai where she discussed the ... read more
Nurcin Erdogan Loeffler, head of strategy and innovation, Vizeum China, outlines the seven ways businesses can future proof their digital strategies.
The terms that customers type into your site search function can help you to gain an understanding of user behaviour and can be used to optimise ... read more