How Many One-time Buyers Do You Have?
Too often in our acquisition efforts we get caught up in the excitement of initial response rates and the rolling out of successful tests. While getting that first order always is exciting, we must be careful not to judge any acquisition program by first order alone. Too many of us have customer files that are 40 percent, 50 percent or even 60 percent one-time buyers. Even if you’re lucky enough to prospect at a marketing gross profit (incremental gross margins exceeds marketing costs), few, if any, businesses make money on the first order.
As B-to-B direct marketers, we’re in the business of establishing long-term customer relationships where customers order again and again. Getting the second order often is more important than getting the first. When you evaluate your acquisition programs based on the second order, they most likely look very different. One order is a test or trial; two orders and you have a customer. That said, I encourage you to do the following.
* Conduct your mailing analysis based on the second order, not just the first. Compare how your conclusions change between the two.
* Exclude that profile or segment that repeatedly gives you only one order.
* Feature a customer welcome package and a second-order incentive that you mail in the first order shipment.
* Make sure your offer doesn’t attract primarily “one-time-only” customers. Discount offers, for example, tend to attract price shoppers, who’ll quickly move for a lower price unless you do something beyond price to keep them.
* Look for multibuyer status on prospect files. If the names buy direct from other companies, chances are they’ll buy repeatedly from you, too.
* Don’t load your file up with inquiries or one-time buys, particularly if the name/customer is obtained online.
* Examine any differences you have in your multibuyers based on how you acquire the names. Chances are names from unqualified online sources won’t perform as well.