Use E-Mail to Drive Repeat SalesSmall-business owners have understood for years that success is rooted in building long-standing customer relationships. They nurture their customers over time by learning and remembering individual preferences and interests. They acquire this customer information directly from customers through in-store interaction.
Profitability in e-commerce is all about creating loyal customers and driving repeat sales. Leaders such as Amazon.com report that more than 65 percent of revenue is due to repeat sales. Since it is roughly six times less expensive to sell to an existing customer than to acquire a new one, the value of customer loyalty and repeat sales is too compelling to ignore.
So how can you, the small e-tailer existing in the shadows of the online giants, expect to get to know your customers (and help your customers get to know you) in the vast digital marketplace? Apply the techniques you have used in-store -- asking visitors and customers their preferences, observing their shopping patterns and requesting their addresses for future communications. Then use what you know to communicate with your customers according to their interests.
The Internet can provide a level playing field for small online retailers if you choose to observe and apply the tactics of e-business leaders. Larger e-tailers, with their venture funding and generous marketing budgets, have led the industry in applying the best practices of personalized customer communication techniques originally perfected by traditional retailers and their catalog counterparts. Meanwhile, small e-tailers, with limited technology and marketing resources, have been slower to adopt these practices for their online stores.
Still, both large and small e-tailers possess the keys to online success -- their online customers and Web site visitors. Though the number of customers and visitors may vary among large and small e-tailers, the value of each customer is based in large measure on how an e-tailer cultivates the customer relationship.
Most online retailers, especially small e-tailers, have learned that a well-designed Internet presence does not ensure e-commerce success. The idea that "if you build it, they will come" is no guarantee with Web sites. Even if they do come, the key to profitability is getting them to come back. E-mail marketing delivers a return on your e-commerce site investment by turning one-time site visitors into repeat customers.
Using e-mail to communicate with your customers is an inexpensive yet effective way to retain their loyalty. You can capture your customers' and visitors' e-mail addresses in a number of ways: add a sign-up link to your Web site or an extra column in the guest book in your retail store. As you gather e-mail addresses and the permission to use them, you also can gather customer preferences to target your e-mail communications.
E-tailers use e-mail to tell their customers about new products, special sales and holiday promotions. Start a monthly newsletter. Customer e-mails can be anything, as long as it is interesting and relevant to customers. And e-mail can include a built-in call-to-action, the "click here to buy" button that links your customers to your Web site.
The critical success factor is relatively simple -- know your prospective and actual customers. And it's easier to accomplish than you might think. If you are doing business online, then you are capturing information about your customers with each order. Your commerce package is capturing order history and other data relevant to each customer. Even if you are not taking orders, you can collect the e-mail addresses of prospective customers who visit your site by allowing them to opt in for more information or to sign up for gift or event reminders. You also can collect personal interest information from these visitors.
Your goal as a small e-tailer should be to provide targeted, relevant and personalized communications with your prospects and customers. With little investment in time and budget, you will discover that implementing e-mail marketing is a tactical maneuver that will help you build customer relationships and repeat business as effectively as your big-name competitors. The playing field is level. It's time to get in the game.
• Gail Goodman is CEO of Roving Software Inc., Wayland, MA. Reach her at firstname.lastname@example.org.