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Why DTC Retail is so focused on Customer Retention & Post-Purchase Behavior! 🔥
Part One is all about What We Know in our two-part trend report.
WELCOME to $5.vc, your source of differentiated startup intel!
* We break down the new market indicators & behavioral consumer trends we're tracking, then figure out the unlock to growth & revenue.
ICYMI in the last 10 weeks we covered: NFT-based Artwork + Fractional Investing + Secondary Marketplaces, Hosted Live-Streaming Content, Monetizing Legendary Startup Stories, Hyperlocal News, Chaptered Movies, Podcast Discovery TikTok-style, NETFLIX going FULL Audio, Super Local On-Demand Delivery, Buy Now Pay Together, and GHOST Retailers.
THIS WEEK’S DOPE NEW STARTUP IDEA COVERS:
* Customer Retention + Post-Purchase Behavior + Branded Customer Experiences 🔥
WHAT WE KNOW:
* The Market Indicators & Behavioral Consumer Trends we've identified.
- thanks shopify! https://twitter.com/Shopify
The pandemic-induced plunge in customer acquisition costs was short-lived. Costs on Facebook have rebounded and are at or near pre-pandemic highs. In late 2020 paid search spiked 17% and paid social advertising increased 24%.
Competition—fueled by the move to ecommerce—is accelerating digital ad growth. Industry data reveals increased spend in paid search, social, and connected TV.
Though reaching new customers is important, the rising competition for online attention has reinforced the value of keeping existing customers. Retention has overtaken acquisition and conversion as a top priority for many businesses.
- thanks malomo! https://twitter.com/gomalomo
Despite email marketing already making up a large portion of ecommerce sales, most brands fall short when it comes to automating a post-purchase experience that captivates customers and builds long-term loyalty. After the customer buys, their excitement is at a peak. Most brands don’t take advantage of that time with customers, or they completely ignore it.
The first sale is the beginning of a relationship with a customer, not the end. You’ve spent money and time to get people to the site, and have already eaten the acquisition cost. So the post-purchase experience is where the opportunity is.
- thanks amy! https://twitter.com/amyegallo
If you’re not convinced that retaining customers is so valuable, consider research done by Frederick Reichheld of Bain & Company (the inventor of the NPS / Net Promoter Score) that shows increasing customer retention rates by 5% increases profits by 25% to 95%.
- thanks yaw! https://twitter.com/yawa
Your post-purchase experience is a golden goose of opportunity to drive engagement, repeat purchases, brand loyalty and much more.
Email is the most effective channel of customer retention. The issue is that most brands don’t control their most important and opened emails that they send to customers: shipment tracking emails.
Ecommerce brands can use these emails to share educational material on their product or promote their rewards programs, but here’s why they’re so critical: The open rates are astronomical. Whereas typical marketing emails see open rates of 10% to 20%, tracking notification emails see open rates between 50% to 80%.
- thanks jon! https://twitter.com/jshieber
Yaw Aning named Malomo, the service he launched for small businesses to turn their order-tracking services into branded customer experiences, as a tribute to his mother, who was a small business owner herself.
Along with co-founder Anthony Smith, Aning built a service that connects with a single click to the Shopify platform and creates custom, branded tracking pages for each brand. “It’s a landing page for a brand. They use it like they would use any marketing asset,” Aning said. “The strategy is to build up integrations to the other tools merchants use to create rich experiences leveraging those tools.”
THE DOPE IDEA & THE BRAND EXECUTION:
* Taking the idea and amplifying that into tactical action.
Join us next week for the second half in our two-part report.
We’ll discuss on how to position ourselves as a new player in the Customer Retention + Post-Purchase Behavior + Branded Customer Experiences space — and get into the development of the Brand IP, securing a legit Domain Name, then making it Internet LIVE.