Strikes It Rich

Last week I had some opinionated things to say about online companies that invest $10 a head to acquire new customers — and spend only about a tenth of a cent to retain them. I think “stupid” was one of the words I used. Now I’ve had a week to think about this, and I’m going to upgrade that to “dumb and stupid.”

Back to the “Nick-on-a-date” analogy:

I meet a great girl, take her out for dinner and buy her flowers. We have a wonderful time. True, it’s cost me a couple of hundred bucks. But we share a twinkle in our eyes and the future looks good. So who’s counting?

Next night, I don’t bother to take her out to see that movie I said I’d take her to. Instead, I spend another couple of hundred bucks on taking another girl out for dinner.

The fireworks don’t happen with the second girl. So now I’m counting the dollars. And the first girl got a little upset about the broken movie date.

Like I said, dumb and stupid.

Well, here at we’re a little smarter than your average button merchant is. So here are just a few of the basic things we’re going to do to retain those first time customers:

  1. When they complete their profiles, we ask them to opt in to a variety of levels of communication — both by email and snail mail. Our ongoing communication with each customer will then be tailored to the level of permission granted.

  2. First, we’ll always say thank you when a customer first buys something.
  3. We’ll add in an extra gift with their first purchase — always.
  4. A week later, we’ll email an extra thank you note from the president. We’ll include a button gift certificate. The value? That will also be customized — depending on the value of their first purchase.
  5. If they buy for a second time, we’ll send them another gift. But this time, instead of including it with the order, we’ll send it under separate cover. At our cost.
  6. If they buy for a third time, we’ll invite then to become a member of our ‘ Save FIVE Club.’ They’ll get an extra five-percent savings on everything they buy.
  7. And more — we’ll keep on investing to keep our customers happy. After all, if you recall last week’s spreadsheet, these are the people responsible for almost all of our profits.

Yes, we’ll do the math on this. We’ll spreadsheet it to death. And yes, with each new reward we’ll ask for a little more information. A little more permission.

This isn’t a nice guy thing. This is a dollars and cents thing. This is about investing a few extra bucks to create a lifetime customer. Wouldn’t it be easier to “buy in” an outside rewards or points program?

Maybe. Probably be cheaper too.

But there’s a significant difference here. With an outside points program your loyalty is being outsourced and your customers stick with you because of the remuneration they receive. If someone comes along next week and offers more, you’ll find out just how deep that loyalty runs. About the depth of a dollar bill.

That’s why at we’ll invest a few extra dollars in building a loyalty that is built not just on rewards, but on a rewarding relationship. As permission deepens with our customers, so will the loyalty and so will the buying habit.

Well, that’s the plan anyway.

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