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MarTech » Performance Marketing » For online retailers, second time’s the charm

For online retailers, second time’s the charm

Many online retailers see a big bump in business in December. Then those buyers disappear when the holidays end. Columnist Lewis Gersh advises how to convert those first-time buyers into second-time buyers and eventually loyal customers.

Lewis Gersh on December 9, 2016 at 11:25 am | Reading time: 4 minutes

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Q4 is the equivalent of childbirth for online retailers. It’s a painful, stressful experience with a nine-month gestation that, in most cases, yields a brief period of euphoria followed by depression and anxiety.

Much of this is due to a defective model. Some retailers make up to 30 percent of their annual sales during the frantic month between Black Friday and Christmas Day. Many of those sales come from first-time buyers who never return — in part because too many marketers fail to pursue them appropriately. It’s like immediately trying to have another baby at the expense of raising the one you just had.

Granted, many marketers think they’re trying to nurture those first-time buyers. Unfortunately, their efforts consist largely of lumping first-time buyers in with everyone else in a one-size-fits-all email retargeting campaign.

Given all the options available, including expanding to other marketing channels, there’s no excuse not to try every avenue to re-engage first-time buyers.

As online retailers ring in the new year, they should try singing a different tune.

Should new acquaintances be forgot? No! Keep them top of mind

Online retailers need to treat holiday sales the same way merchants have long regarded sales and promotions during the rest of the year. The idea isn’t just to make a sale today. It’s to build a base of loyal customers who will return tomorrow.

Given the enormous holiday cookie pool available to online retailers, it’s amazing that so many of them fail to capitalize on it.

Granted, converting first-timers into loyals isn’t easy. Retailers need to separate the signal from all that holiday noise. At a minimum, online retailers should ID first-time buyers (aka new-to-file customers) and pursue them aggressively with appropriately targeted thank-you upsells in January.

Unfiltered data can be hazardous to your health

The one thing online retailers and digital marketers don’t want to do is indiscriminately retarget everyone who visited their site in Q4 with multiple generic online offers. That’s disrespectful to the consumer and, ultimately, harmful to the retailer.

It’s important to apply as many filters to the process as possible. For example, there’s a high likelihood that December’s new-to-file customers bought gifts for others. (Online retailers who use registries for weddings and showers face a similar challenge.) Does that mean they’re not worth retargeting?

Not necessarily. Some gift buyers, such as a motorcycle enthusiast who buys an accessory for another motorcycle enthusiast, could easily be converted to a loyal customer with respectful, relevant retargeting.

But marketers might have to ask for more self-reported information, starting with an obvious question: “Is this a gift?” Ask buyers at the time of purchase, and then follow up by asking how the recipient liked the gift and whether the buyer would like suggestions on additional gifts.

Other information can be easier to filter. First-time buyers who took advantage of a specific sale, such as a Cyber Monday deal, are more likely to respond to incentive-laden offers. Consider retargeting them for any post-holiday sales.

Whatever you do to convert that first-time buyer to a second-time buyer, it’s worth it — because the odds of a second-time buyer becoming a loyal customer increase exponentially.

And don’t forget those who have been loyal all along

The most coveted customers of all are loyals who buy for themselves and buy gifts for others. Analytics should be able to ID these customers fairly readily. They’re the customers who buy at least five times a year with purchases clustered in Q4.

Why are these customers so valuable? Because they’re prospective brand advocates. They like the company’s products enough to buy not only for themselves but also for those close to them.

Online retailers should retarget this group in January, not just with additional offers, including refer-a-friend incentives, but also with prompts suggesting that they post online reviews, an important component of an ongoing online marketing campaign.

The key word is ongoing. Online retailers need to start thinking of the uptick in Q4 not just as a way to make their nut for the year that’s ending, but as a way to get a running start on the year that’s about to begin. Otherwise, they might have to follow up their holiday sale with another staple of American retail: the going-out-of-business sale.


Opinions expressed in this article are those of the guest author and not necessarily MarTech. Staff authors are listed here.


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About The Author

Lewis Gersh
Lewis Gersh is founder and CEO of PebblePost, guiding corporate strategy and company vision with over 20 years of board and executive management experience. Prior to PebblePost, Lewis founded Metamorphic Ventures, one of the first seed-stage funds, and built one of the largest portfolios of companies specializing in data-driven marketing and payments/transaction processing. Portfolio companies include leading innovators such as FetchBack, Chango, Tapad, Sailthru, Movable Ink, Mass Relevance, iSocket, Nearbuy Systems, Thinknear, IndustryBrains, Madison Logic, Bombora, Tranvia, Transactis and more. Lewis received a B.A. from San Diego State University and a J.D. and Masters in Intellectual Property from UNH School of Law. Lewis is an accomplished endurance athlete having competed in many Ironman triathlons, ultra-marathons and parenting.

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