This post is part of a series that covers eCommerce Lifecycle Emails.
First-purchaser campaigns are the campaigns that are designed to trigger when customers have purchased from your site for the first time.
The fact is going from a one-time buyer to two-time buyer is a huge hurdle. So you want to get as many customers as you can over this initial hurdle of going from one to two.
Recency & Frequency
To understand where customers are in the purchase lifecycle, you can score your customers using a technique known as RFM that stands for: recency, how recently a customer has ordered from you; frequency, how many times that customer has ordered from you; and monetary value, the total number of dollars the customer has spent on your products.
The idea behind RFM is that customers who have purchased from you recently are more likely to buy from you again than the customers who haven’t been to your eCommerce store for a while.
In addition, the customers who buy from you frequently are more likely to buy again than the customers who don’t buy from you very often. And the customers who spend more are more likely to buy again than the customers who spend less.
When it comes to RFM and the first-purchaser campaign, recency and frequency are the most important attributes because those two predict the monetary value.
RFM has been around for around 30 years and was originally developed by the cataloging industry to ensure that their mailings were reaching the customers that were most likely to buy.
Their thinking was that a customer who bought last week is much more valuable than a customer who bought two years ago. Likewise, a customer who bought 10 times is more valuable than a customer who bought once.
So what you need to do is create more low R (recency), high F (frequency) customers. Using RFM, you can predict which customers are going to be good customers in the future. And you want to nurture relationships with these customers because they are most recent and have had the highest frequency of purchases in the past.
Customer Scoring 101
The quick way for eCommerce retailers to grade their customers is to rank them by the recency of their purchases.
To calculate RF scores, you first have to find the values of those two attributes for each customer. First, the most recent purchase date – 0 meaning a customer bought from you that day, and 365 meaning a customer last made a purchase from your site a year ago. So you want to rank them from top to bottom and then group them, i.e., the top 20%, the next 20%, etc., in terms of recency.
Then you do the same for frequency. So a customer with a frequency of one, only purchased from you once, etc. Then rank your customer database from top to bottom and group those customers the same way you did for recency.
This is how you develop an RF score. Once you’ve calculated their RF scores, it’s easy to identify your most valuable customers – the top 20% of your customers who have the highest scores. These customers will typically generate 80% of your revenue. That top 20% of your customer database will drive your business. They are naturally the low R, high F customers.
Then you can begin to analyze the characteristics and purchasing behaviors of this group so you can try to understand what makes them different from typical customers.
Executing First-time Purchaser Campaigns
Successfully marketing to the customers who just bought from you for the first time, you’re in effect reducing R and increasing F. You’re increasing their frequency, reducing their recency and getting them to buy more, sooner. These campaigns tend to be some of the highest revenue-driving emails you can send.
You also want to market to people as soon as they’ve made their initial purchases because because if you can stay top of mind for them, they’re more likely to buy more from your store going forward.
It’s also a great time to collect reviews, which you can add into your product feeds that you give to Google if you want your products on Google Shopping. Google ranks your eCommerce store based on your reviews. A first-purchaser campaign is also a great time to thank your customers and in doing so build up brand loyalty as well as engage them in social networks.
The best method to run your first-purchaser campaign is via your order receipts or your order shipped notifications. Emails containing these receipts are the most opened/read emails sent by retailers.
You can start with very simple messaging. For example, “buy more and save,” i.e., “buy three and save.” Give customers a reason to go back to your site and order a few more items. For the most sophisticated marketer, you could even try to cross-sell or up-sell like the Amazon example below.
Another way to run a first-purchaser campaign is to build out a separate email drip using your email service provider of choice that targets only first-time buyers.
This might consist of three emails:
- Relational: This is sent out almost immediately after a customer makes her first purchase from your store and she’s exicted. You want to feed off that emotion. You want to remind the customer why he bought from you as well as reduce any buyer’s remorse. Send it out about a day or two after the customer makes his first purchase.
- Connect: This email should go out in about five days. The purpose of this email is to get the customer engaged with your brand. You can invite the customer to connect with you on social networks.
- Related Products: This email should be sent about seven days after your customer made his first purchase. You can ask for a review of the product and make a recommendation for a follow-on purchase.
What do you think? Have you ever been enticed by a retailer to complete the all-important second purchase? Are you running these campaigns at your own retailer? Let us know in the comments.