So you’ve put in time, effort, and hard work to attract new customers to your store. What is the next checkbox on your to-do list? Bringing those customers back again.
A study by RJMetrics on ecommerce buying behavior discovered that nearly 32% of first-time customers return for a second purchase. That may not seem like so much, yet listen to this: the consumers who did make those second purchases probably like to return for a third, then a fourth, etc, on an incremental scale:
Bring a customer back only once and you’re more likely to count them among your most loyal shoppers. However, how do you even start establishing that sort of “I’ll only buy from you” loyalty, anyway?
One of the most ideal ways you can create longtime loyalty is with smart pricing strategies. We aren’t speaking about offering coupons nonstop— we’re talking about rewarding buyers for always selecting your store, or giving discounts they can’t find anywhere.
Following are a couple of strategies you can try to bring those first-time buyers back again and again.
The first tactic to try: promise a reward after they purchase
By now, you’ve most probably seen so many new customer acquisition strategies. You may have even been told to try discounts or coupons for first-time customers. This strategy is specific is a little short-sighted — a returning customer might feel slighted when they come to know that they can’t receive that same discount, or even redeem the same coupon so many times.
Rather than offering a discount on a new customer’s very first order, try attracting them in with a reward for making that first purchase. For instance, instead of offering $5 off any order, you could promote a coupon code good for $20 off a shopper’s next order being sent via email once a purchase is finished.
Even if it doesn’t offer instant pleasure, that second offer is superior to the first, as:
- It brings back your customers for a second purchase, and
- It doesn’t have to be restricted to brand new customers, which makes you look great to both first-time shoppers and customers who are thinking about you for their second, third, and so on. order.
If a shopper knows you’re likely to reward them, they’re more willing to be loyal to your store. Instant gratification is amazing, however, it isn’t long-lasting, and customers know that.
Reward shoppers for multiple purchases or other intentional activities
Speaking of rewards, shoppers love feeling recognized for returning, buying again, or spending a particular amount of money. Even a small recognition can go a long way: people love using Target’s Cartwheel app as they get (virtual!) badges and rank on a leaderboard if they save more money than their friends.
That might seem childish — and when you just save 46 cents on socks and complain about not getting a badge, it is — however, Cartwheel is the best example of another loyalty-inspiring pricing tactic. In this case, Target customers need to search the items on sale, then scan a barcode at checkout to save. If they don’t utilize Cartwheel at checkout, they don’t save. However, if they save, they feel like Target is rewarding them for being a savvy shopper.
Much like Target, your aim ought to be to make your customers feel good for shopping with you in the future. Your pricing can reflect this if you:
- Reward customers who have bought from you a particular number of times — for instance, after someone has placed 4 orders with you, you could inspire them in a combo of that gets 15% off all items, or constantly send them special coupons.
- Offer coupons for shoppers who reorder a similar product again and again— sell consumables like makeup or coffee? Why not dock the cost for customers who have purchased that same one from you two times or more?
- … or offer a discount if those buyers switch to subscription rather— “We’ve noticed you’ve bought our espresso four times now. If you subscribe to a monthly subscription, we’ll send you the first bag free.”
At last, it’s not about saving money that makes customers loyal. Sometimes it’s what they feel when they visit a store — and whether you can make them feel happy, you’re on the correct track.
Offer superior prices depend on a consumer’s purchasing behavior — automatically
Dynamic Pricing has many options that start automatically. In fact, you can utilize this same extension to offer customers better prices on products depend on their existing purchasing behavior.
For example, you’re running a store where customers are most likely to purchase multiple products from the same category, like cosmetics. One choice you have would be to automatically discount a buyer’s order if they buy 4 or more lipsticks at the same time.
There’s additionally an option to discount items in a different category depending on the purchase of a particular item. For instance, if a customer purchases a laptop, you could consequently discount the price of cases or sleeves by 10%. Whoa, instant savings.
These pricing models urge customers to make greater purchases, and can likewise boost a shopper’s feeling of loyalty toward your store. Why would a customer go anyplace else to purchase a laptop skin if they can get it from you for 10% off? What’s more, why would they purchase lipsticks in bulk elsewhere if they can’t receive an order discount for doing so?
Consider members-only pricing
If you purchase your groceries from a nearby store, chances are you have — or think about — their membership card. These cards are typically free, however, with them, you get extraordinary savings that members don’t.
Grocery stores utilize these membership cards to make their customers more loyal. If you’re running out of something, you could go to a gas station or a closer store… yet with your card, it’s undoubtedly less expensive at the grocery store, right? Aha.
Some more amazing members-only pricing tactics to consider:
- Regularly change which items have a members-only discount or lower value, which could include some staying power for current members and make non-members bound to sign up if they’re keen on one of those products
- Create different membership levels and increase the discounts as the levels go up — for instance, Bronze members might get 10% off all items, Silver 20% off, and Gold 25% off
- “Unlock” savings on extra products when a member changes levels— possibly a Bronze member can just advance to Silver after two orders, and it’s just by then that they can save on a monthly membership of those stunning coffee beans
Memberships aren’t an ideal fit for every store, however, for some, they can prove a stunning method to motivate loyalty… and a lot of repeat purchases.
The impact of pricing on customer satisfaction
So far, we’ve given applicable pricing tips that improve customer loyalty. Now, we are going to analyze the relationship between customer satisfaction and pricing and how they support one another.
Let’s start with an example;
Imagine that you are an ecommerce retailer selling of all shapes and sizes home appliances. As per the research – The influence of price fairness on customer satisfaction of Hermann et al. (2007), the general satisfaction of an online shopper is straightforwardly related to how you priced your products. To be more clear, if you charge significant prices for your home appliances products, the fulfillment level and desires of the customers are proportionally high. In that case, the customers will anticipate fast delivery, repair service, and quick customer support as they are seeing the overall experience of shopping ought to be satisfying due to the high price.
We are not living in a utopic world where the costs are low, the quality of products is high and the support is impeccable and you ought to show this fact by giving an extraordinary experience and satisfying them.
But how you can manage this with pricing?
In order to deliver a superb customer experience, you need to create a financial resource to help and design the ideal experience. Increasing your prices will give you a chance to designate a sufficient budget for that goal. Then, fast delivery, quick support, and repair services can be given. In the worst scenario; charging high prices while delivering terrible experience will bring about poor customer satisfaction.
The good news is coming! As per the research –Price Tolerance of Anderson (1996) and Customer Satisfaction, extraordinary customer experience decrease the price affectability. It means that if the customers are satisfied with the overall shopping experience, price turns out to be a lesser extent factor.
Pricing affects much more than first-time purchases
When you set up your store and choose how to price your products, you were likely to focus on making those initial few sales. Now it’s an ideal opportunity to shift your mindset and concentrate on pricing strategies that will turn the customers behind those sales into loyal customers that return over and over.
We trust these tips have given you a couple of ideas for your online store. Give one a shot and let us know how it goes, we’d love to hear your success stories.
