It's incredibly frustrating..

..to see how etailers are still ignoring the lowest hanging fruit that could generate them the most revenue: their beloved existing customers.

It's madness. These guys have purchased from you before. They love your brand. They recommend it to friends and even buy their Christmas gifts from you. They cost you a third of the amount to market to and they typically spend at least 30% more with you. So why oh why do you still treat them like everyone else?

Experian recently carried out some research into online retailing called 'Engaging Online with the Empowered Customer'. It revealed this piece of information: 70% of revenues were generated by just 30% of customers.

The smart marketers will read this and agree. Please just  do the sums and you'll see that it's so very very clear. In fact, I'll do the sums for you just to prove my point:

Right, say your £100,000 of revenue comes from 1000 customers. If the above stat holds true, then 300 of them contributed £70,000 to the revenue (£233 per head), and the remaining 700 contributed £30,000 (£42 per head). Simples. So if you want to make another £10,000, what's going to be easier? Getting your loyal 300 customers to spend an extra £33 with you, or reaching out to 700 new customers to spend £14 each?

So spend more time and effort on your loyal customers. Give them something special for their next purchase. Surprise them and give them an automatic discount when they are next purchasing. It's like showing up tonight with a bunch of flowers (or organic chocs) for your beloved. Unplanned, but very very welcome earning you much needed brownie points.

Hey, what about asking them to recommend a friend or two? Don't be shy. These guys love you. They're just delighted that you've recognised them as 'special' and would do almost anything for you.

So please do something with these brand fans. Extract the information from your database and plan an 8 week campaign where you court them and make them feel loved. A little investment now will yield massive rewards and incredibly loyal lifetime customers.

E-commerce plus

There’s a new digital model emerging in New York and I think it’s something we could learn from here in the UK. Our NY office recently designed and built a website for luxury fashion designer Catherine Malandrino. Nothing unusual about that I hear you say, but more than that, we’re taking hold of the stock, storing it, dispatching it directly to the consumer and answering customer service queries. We’re effectively running an online shop on behalf of the designer.

Now why would a designer hand over the reigns to a digital agency in this way? Well there’s a number of reasons, firstly, a lot of them don’t ‘get’ digital, secondly they don’t have the resources or the manpower, and thirdly, they don’t have the budget. Yes we know that they are ‘luxury’ brands, but unless it’s Louis Vuitton or Gucci these designers, of which there are many, haven’t got millions of pounds in their remit to do online stuff. This sort of solution is perfect for them, because it allows them to sell online, not worry about it, make the money, and someone is looking after it all for them. 

At the moment it seems to work in New York as opposed to the US generally because of its size and the amount of designers that are based there, but I think this is going to get bigger and bigger and could work well in London. There is no cash anywhere at the moment and certainly with these kinds of brands this route makes perfect sense. The future? I think so.