How To Drive Repeat E‑commerce Sales and Build Customer Loyalty

Keep shoppers coming back and increase your customers’ lifetime value.

When it comes to learning how to price a product, the process involves a lot of trial and error, and it doesn't hurt to have a deep understanding of human psychology. No matter what type of products you sell, what you charge customers largely determines the success or failure of your business.

There are many different types of pricing strategies, each with its pros and cons. However, certain principles are common to all of them. The price has to cover both the costs of doing business and making a profit. To lower prices, you also have to lower your cost for things to balance out. Additionally, prices have to drive sales for your product launch to succeed.

After you set your initial prices, it's important to frequently review them. Take into consideration your current expenses, profit goals, and market demand. Along with all this, you have to constantly review your competitor's pricing and align your own strategy accordingly.

When should you adjust a product's price?

You should adjust the product’s price when you introduce it to the market. If you initially set the price low, you might want to raise it once volume increases.

However, pricing strategy is not a set it and forget it process. You'll also need to reevaluate your pricing if your costs change. If you lower your costs through economies of scale, you can charge a lower price or mark up the product to increase your profitability.

Do you know what prices your competitors charge? If not, that's something you should remedy as quickly as possible. In order to compete, you'll need a pricing strategy that matches your product branding. For example, you might decide to sell your product at a higher price to establish a premium brand.

In cases of inflation or recession, you may have to increase or decrease your prices accordingly.

What happens if you don’t price a product properly?

You can incorrectly price your product by charging too much or too little. If you charge too much, customers might feel that they have been taken advantage of and you'll suffer lower profit margins. However, if you charge too little you can impact the way that customers perceive your brand.

Here's a look at four scenarios where improper pricing can negatively impact your business:

Customer dissatisfaction

If you charge too much for your product and it doesn't live up to expectations, it can lead to customer dissatisfaction. In turn, this can lead to poor reviews that impact your ability to increase sales in the future. Make a list of other products on the market and what people pay for them. Determine where you want your product to fall, taking into account how the price changes will affect your branding.

Low profit margins

If you charge too little for your product, you'll barely cover costs and, therefore, suffer lower profit margins. You can prevent this problem by using cost-based pricing. With cost-based pricing, you will add your desired margin directly on top of your cost to set the price.

Low sales

Products that are overpriced do not sell well, resulting in low sales. Even if you're trying to establish your product as a premium brand, it's important to gain an initial following. This may involve temporarily lowering sales to increase your footprint.

Perception as a “bargain brand”

If you constantly offer your product for half price for deep discounts, it'll be looked at as a bargain brand. In this case, people will rarely pay the full price for the product. Therefore, it's important to avoid this mistake by pricing your product reasonably but not too cheaply.

When deciding on your pricing strategy, you'll need to take these factors into consideration.The right price covers costs, stays competitive, and nets a profit—follow these 7 steps to find that sweet spot.

For small businesses, success requires balancing what your customers want with what you need to make a profit. That's why strategically pricing your products is key. With the right prices, you can generate more sales and maintain a healthy bottom line.

Before setting the cost of the product, figure out the cost of producing products and running the business. Your total sales will need to cover these costs plus your target profit margin. If your prices don't cover your cash flow, you won't be able to stay in business very long. Keep reading to learn everything you need to know about increasing your prices.

Customers don’t buy from a company only because they like the products or service. They buy—and return to buy again—because they feel a positive connection with that business.

It’s easier to build this customer loyalty with someone who’s already bought from you than to attract someone brand new. It’s also more profitable. The Pareto principle famously states that 80% of your business will come from 20% of your customers.

“While it’s important to continually attract new buyers, it’s also good for your bottom line to be selling again and again to existing customers,” says Deana Thornton, Director of Commerce Marketing at Mailchimp. “Having strategies in place to drive repeat purchases will make your business sustainable and give you longevity.”

Creating a relationship with your audience will keep them engaged and coming back for more. Use these tips to inspire repeat business and build long-term customer loyalty.

Ready to launch your online business? Now you can sell physical merch or book appointments directly from your site with Mailchimp’s commerce products. Plus, boost sales with our built-in marketing features that give you full control over the success of your business.

Make the customer experience easy

Customers are much more likely to make a first purchase from your e-commerce store and then buy again if the website experience is quick and easy to navigate.

“To encourage people to come back to your website, you need to have a streamlined path to purchase,” says Deana. “When they land on your website, they need to be able to find what they’re looking for quickly.”

To design a website that customers will want to return to again and again, remember these basics.

  • Make important information easy to find. Details about pricing, customer accounts, order status, and other basics should be easy to locate. If you’re running a promotion, make sure the call to action (CTA) is prominent on your home page and all your landing pages.
  • Make sure your site is easily searchable. Consider the taxonomy—the way your site is organized and labeled—and use the same language your customers use to describe what you sell. Good website taxonomy makes it easy for people to find what they want to purchase.
  • Showcase your products. Imagery that highlights your products’ or services’ best features will encourage customers to buy. “Choose images that accurately represent your products and brand,” says Sonaly Patel, Senior Commerce Marketing Manager at Mailchimp. “This could be 360 views that show items from every angle or close-ups that highlight important details or design features.”
  • Encourage purchases with reviews. Three-quarters of shoppers use reviews to help them evaluate products. You can set up an automated email to be sent to customers who made a recent purchase and ask them to share a review of the product or their experience.
  • Be mobile responsive. More shoppers are making purchases via mobile devices. Make any adjustments necessary for a smooth mobile transaction process. “Don’t overlook your mobile experience. Make sure everything displays properly,” says Deana. “It should be as easy to navigate and shop on your mobile site or app as it is on desktop.”
  • Make it easy to get answers. Visitors to your site may have questions about your products or services, so make sure they can get answers. Every page should have links to connect with customer service by email or phone, or consider a live chat function to get answers to simple questions quickly.

Build your brand with social media

Seven in 10 Americans regularly use social media, which makes platforms like Facebook, Instagram, and Twitter great places to interact with customers, build brand loyalty, and stay relevant with your audience.

“Social media should be an extension of your brand and your website,” says Deana. “It can help you build authentic relationships with your business.”

It’s easy to create and schedule social posts. There are many ways you can use social media to build a deeper connection with your audience, show them how you contribute to the community, and encourage repeat business.

  • Share news. Keep your followers up to date about new products and special promotions on your website. It’s also a great way to give people a heads-up when popular items that sell out quickly will be back in stock.
  • Showcase your people. Use social media to introduce the people on your team to your customers. Putting a human face on your brand helps establish an emotional connection, which will help create loyalty and a sense of advocacy.
  • Highlight good deeds. Social media can help you share your company’s values with your audience. If you work with community or nonprofit organizations, social can publicize that connection—and give those organizations you support a signal boost in the process.
  • Engage your audience. Start conversations on your social channels with polls and contests. You can tie them to holidays, special events, or other dates your audience cares about.
  • Encourage user-generated content. Resharing photos, videos, and other content your fans post about your products is a great way to expand your reach. Encourage your followers to use and follow a signature hashtag to keep posts organized and easy to find.
  • Try retargeting. Retargeting ads can bring back customers who looked at items on your website but didn’t follow through and complete their purchase. Combined with email, retargeting ads on websites like Facebook and Instagram can drive more traffic back to your website.

Create a loyalty program

Loyalty programs help drive repeat purchases and increase engagement. Offering discounts, free gifts, and exclusive or early access to special merchandise will make your fans feel valued and connected to your brand. You can also create tiers of membership, offering higher-level perks to your very best customers, based on spending levels or length of time in the program.

There are several components to a successful loyalty program.

  • Make it feel exclusive. Give people a reason to join and be active. Members should feel like they’re part of a club and that they’re being treated as VIPs.
  • Encourage participation. Make sure the program is simple to join and use. It should be easy for members to understand how they can earn points or move to the next level, based on the criteria for gaining those benefits.
  • Keep it attainable. Don’t make it frustratingly impossible for people to gain a reward—have items or promotions available at high and low levels to keep people excited about the program.

The type of program you create will depend on your business model and niche. “Tailor it to your customers and make sure the incentives add value for them,” says Sonaly. “Some groups might like perks such as free 2-day shipping, while others may crave early access to seasonal products.”

Communicate frequently

To stay top of mind and be there when people are ready to buy again, you need to stay in touch with personalized communications. Email messages that show your customers you understand what they care about and need is one of the most effective ways to foster this engagement.

Marketing automations can help you easily create and send email messages that are triggered based on customer habits and behaviors. Use automations to make sure your website is a destination on your customer’s journey to purchase.

  • Promote popular products. Draw attention to your bestsellers and new arrivals with emails highlighting products customers might enjoy.
  • Welcome new customers. A welcome email series can help connect your followers to your business and direct them back to your website to read more.
  • Say thanks. Follow-up emails after purchases show people that you appreciate their business. They’re also an easy way to request reviews or recommend other products.
  • Send reminders. Abandoned cart emails can help you nudge customers to complete their purchase.
  • Celebrate special occasions. Birthday or anniversary messages—possibly including a discount or offer—can make people feel special and encourage them to shop again.
  • Bring people back. Re-engagement emails can bring back customers who haven’t shopped recently. Include new products or a welcome-back offer or discount.

Offer incentives

Encourage repeat purchases with special offers or promotions. These could be based on spending level or type of product previously purchased. “Consider what will make your audience more inclined to buy again,” says Sonaly.

Many types of incentives can prompt your customers to purchase.

Items offered as incentives don’t have to break the bank. “It could be an appealing low-to-mid-priced item that you have a surplus of in your inventory,” says Deana. “And you can encourage customers to share their surprise with a special hashtag, boosting your social presence as well as your sales.”

Ask for feedback

Customers are more inclined to buy from you again and remain loyal if they feel you understand their needs and value their business.

One way to show customers you care what they think is to ask for their opinion. Surveys can engage customers with your brand and help you find out what they like about your products or services, what they think about your competition, and where they think you can do better.

Creating a survey is easy, and the data you get back can help you shape future marketing campaigns.

  • Ask what people want. Customers might share ideas for new products or services they’d like to see you offer.
  • Get to know your customers. Details they share about themselves and their needs can help you define new audience segments.
  • Gain competitive insight. You can learn which competitors they also shop from and why you’re not getting that business.

“Surveys help you take a pulse on what is and isn’t working—this is important, because unless your product is unique, you have competition,” says Deana. “A survey can help you find out what makes you stand out and how you can keep your best customers loyal to your brand, which will encourage repeat sales.”

Build relationships

While it does take some work to encourage repeat sales and build customer loyalty, the benefits you reap in the long run will be worth it.

“When you encourage repeat business, you increase the lifetime value someone adds to your business,” says Deana.

Ready to launch your online business? You can sell your products or book appointments directly from your own site with Mailchimp’s e-commerce offerings. Our built-in marketing features give you full control over the success of your business.

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