When is a dollar not a dollar?
Sounds like the beginning of a joke, doesn't it? It isn't -- and there won't be a cheesy link to email marketing... at least, not yet.
To divert your attention momentarily, a question: where is most of your marketing budget spent?
Chances are more is spent on acquiring new business than retaining existing customers: 37.3% of SMBs spend more than half of their budget trying to acquire new customers, whereas only 5.7% do the same for retaining customers. (Read more on that here.)
It's a common tactic to get more customers in your funnel, but it's not the most efficient use of that money. Or the funnel.
Making a better connection will increase sales and revenue
Another popular stat often thrown out there is that 20% of customers account for 80% of sales. That means that there are 80% of customers who are not buying very much.
If a business could successfully transform new subscribers or first-time purchasers into high-value repeat customers, they could be on the receiving end of a mind-blowing increase in sales and revenue.
Once people have already bought from you, they’re more likely to buy again when they visit your site. A study by Marketing Metrics found that the probability of a sale with an existing customer is 60-70%, whereas with a new customer it is often in the range of 5-20%.
So, how do you connect with these first-time customers?
The question now is, how can we achieve this? How can you make a better connection with first-time customers? How do you keep them coming back for more?
We thought about this question long and hard, and we’ve found the answer lies in using real-time data to send personalized emails. The more personalized a message, the better response you have. Based on certain triggers and behaviors from your customers, you can then send a relevant message that speaks to them.
Acknowledging the trust that a first-time purchaser has put in your brand could be key in securing a loyal customer. When a customer first buys from you, you can create personalized welcome emails and newsletters showing how much you care about this big journey.
That means you can secure a long-term relationship between you and the customer, increasing their lifetime value.
Being able to identify and converse with a first-time customer is priceless. Your brand builds a relationship in much the same way a greengrocer did with his regulars (back in Ye Olden Dayes). Nowadays, however, customers put a premium on being recognized digitally because it’s so rare.
How do you practically reach these new customers?
- The simplest way is to create a "Purchase Complete" Trigger, which sends a sequence of one-or-more real-time emails following any purchase. Make it call a filter to only send to first-time buyers (contact support if you'd like help with this).
- Or turn on Triggered Analytics to load into your ESP, then use your ESP's capabilities to segment and identify first time purchasers. It lets you target these individuals with personalized content or incentives (if necessary).
You can assess activity in real-time to create an email campaign that you can be confident will convert. By making the customer feel valued in this one-to-one way, with personalized messaging, you can increase revenue from them. Remember, this relationship lark is a two-way street.
So when is a dollar not a dollar? When it's spent by a new customer -- in which case it could be worth a whole lot more. No joke!
This was originally a guest post from Fresh Relevance on the ExactTarget blog: http://www.exacttarget.com/blog/when-is-a-dollar-not-a-dollar/
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