Article

Kresten Bergsøe
Kresten Bergsøe 27 May 2016

Who Are Your Most Valuable Visitors?

You have two types of visitors: the new and the returning. While the new/returning segment is about as old as it gets in ecommerce, digital marketers usually have a choice to make: Do they focus on finding new visitors or find ways to keep their existing visitors? The performance differences between new and existing visitors are so pronounced between these two visitor types—and the opportunities to improve experiences are huge.

You have two types of visitors: the new and the returning.

While the new/returning segment is about as old as it gets in ecommerce, digital marketers usually have a choice to make: Do they focus on finding new visitors or find ways to keep their existing visitors?

Monetate, surveyed US online marketers on the topic of balancing acquisition efforts against retention efforts. 47% of them told they struggled to create tactics and offers that allowed them to do both well. Which is a huge problem.

The performance differences between new and existing visitors are so pronounced between these two visitor types—and the opportunities to improve experiences so great.

In Q4, despite making up less than half of all eCommerce sessions (48%), returning visitors spent nearly $5.3 billion online— almost twice as much money as new visitors spent during the same time frame ($2.7 billion).

But that is only the top of the iceberg. 

Add to cart ratio as well as conversion rate is significantly higher for returning customers. Bounce rate for new visitors is also significantly higher than returning customers. And this difference only seems to increase when compared to the same numbers from 2014:

It seems online marketeers have the same fundamental challenge that offline marketeers have had since the mid 80's when personalized individualized marketing started out. The money is still largely spent on acquisition even if numerous studies document that more should be spent on existing customers and prospects with earlier interactions.

While access to customer data, personalization technology and management sponsorship has slowed down things in the offline world since the beginning of times - this may point to something deeper.

Could it be, that the vast majority of businesses nurture a culture of shortism - where chasing the new customers simply just take preference of servicing and nurturing existing customers?

Could it be, that most businesses simply have no idea and lack imagination of what to do next - after the initial contact or the first purchase?

If so - there is a huge and potentially growing opportunity for companies who focus hard on re-balancing the resource spending where it generates the most ROI and attract people who can build structured marketing interaction experiences that in fact generate value for clients as well as prospects.

No matter what - you now have a few KPIs to benchmark your own ecommerce performance against. If you cannot beat the average - you need to take a thorough look at how you spend and what people you attract to your organization....and more importantly what focus and priorities management is pushing down the ranks.

You can download the full report here.

 

Kresten Bergsøe
Monoloop

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