Yay for new customers! Everyone loves the adrenaline rush of gaining a new purchaser at their Magento store. It’s what eCommerce is all about isn’t it, getting brand new shiny customers to convert for the first time?
Wrong. What about all those tried and tested existing customers who have already shown you a powerfully convincing vote of confidence with the purchase they made last year or their consistent stream of business over the past few seasons’ sales figures. That’s where the real eCommerce success lies. Forget having all your focus on new site visits, conversion targets and bounce avoidance. The real keys are in the magic acronym – LTV.
LTV stands for the lifetime value of any customer. It means the total amount of spending that a customer will place your way over the whole course of their lifetime. Who cares if they only come to you for tiny spends? If those quick sales are regular and ongoing, they really can be the bread and butter of your business.
With previous Magento purchasers, you have your readymade audience – the subset of the public who have already shown themselves interested and engaged in your products or services, enough to actually invest their hard-earned money in them. That makes them well placed to do it all again if you play your cards right. Did you know that the stats show the prospect of selling to a brand new customer if around 20%, and that’s on a really good day? By contrast, existing customers are up to 70% likely to snap up your latest range. Yes, really.
Think about it. You’ve already put a lot of time and money into securing conversion in the first place, so it makes a lot of sense to follow through and tighten up on this potentially really effective target for your next eCommerce marketing campaign. Keep existing customers engaged with emails and newsletters. Upsell where possible and make sure any content you send them is well worth reading, to maximise the potential that they’ll bother to do so.
So next time you’re tempted to overlook your existing Magento customer base in favour of expansion, remember to factor in LTV and you may well save yourself some money and effort.