The entire system of online today is build around one goal: Capture demand and convert to order as soon as possible. This approach is entirely appropriate if your goal is to acquire as many new customers as possible. The cost of acquisition, however, is growing and itâ€™s increasingly difficult to generate meaningful ROI via paid advertising or drive traffic via Google or Facebook. At the same time, new business models that leverage mobile, subscription and other related paradigms attract more and more shoppers, making it even more costly to reach new customers. So what can an e-commerce retailer do?
Armed with this information, an e-tailer can easily calculate ROI on programs targeting new customers vs. programs targeting your biggest fansâ€”the top 5 percent. Many retailers will discover that a laser focus on retaining customers and finding ways to maximize CLV will yield a better return. Instead of spending the bulk of your resources acquiring new customers, the better approach would be to find a balanced way to invest in coaxing customers into becoming loyal, repeat buyers.
Know what your customers want
Building a shopper profile is another approach that is proven to increase CLV. Who are your customers, why and how to buy and use your product. The goal is to present you with their offer customers very likely to receive. Even basic information such as gender or age can help drive repeat purchase behavior.
For example, the conventional wisdom is that women are pushing the trend, because they control up to 80 percent of household spending. However, when it comes to e-commerce, the man pushed almost as many women shopping online and are more likely to make purchases on mobile devices. Furthermore, the millennium between the ages of 18 and 34 spend more money online than any other age group. Despite having a relatively low incomes overall, this age group will spend an average of $ 2,000 per year in e-commerce. In addition, the typical online shopper has a higher income than the average.
CLV approach is extremely important, especially when targeting the savviest shoppers-millennium. As a digital native citizens, is a strong consumer who grew up with social media, mobile devices and online shopping. Their purchasing power in 2015 is estimated at between $ 1 trillion and US $ 2.45 trillion. In 2018, the millennium is expected to have the most spending power of every generation. In 2025, three out of four global workers will be aged 18-34. All of this is very important for marketers.
Based on the data and the involvement of innovation, successful retailers will develop experience-driven trading strategies for this influential group. Experience-driven means not only that the experience will be seamless in digital channels, but the digital and physical experience that will meet. In the end, people will not remember how they choose a product or where they buy it, but they will remember how it made them feel.