In last week’s post we emphasized that fixing the one-time buyer problem takes more than just the marketing team and proposed a four-step playbook to get everyone involved: organizational mobilization, strategy formulation, implementation, and measurement & optimization. Today we’ll get a little deeper into the first two steps.
Spread the Word (After You Figure Out What It Is)
Organizational mobilization starts with prioritizing opportunities and setting goals. The best way to start is to quantify what you’re looking to capture.
Say your one-to-two-time buyer conversion rate is at 10%, and you want to bump it up higher. You can pick a target based on what seems reasonable. Or even better, if you have access to benchmarks from peer retailers through a relationship with an external partner like Custora, you can make a more informed decision.
Your organization aligns around a definition of one-to-two-time buyer behavior, and you see that you're currently at 10% conversion, but you know that the benchmark for your industry is 15%. How much does that actually equate to as lost opportunity for your business every year? Quantifying the goal makes it less abstract.
As fundamental and straightforward as this sounds, we find many retailers skip this step, which makes it tough to figure out what to prioritize and where to focus.
Once you have your goal, make sure people know about it: put up dashboards around the office showing progress against the one-to-two-time buyer goal, talk about it in company-wide communications, and give talking points to business unit leaders so they can cascade it through their teams. These are steps that any organization can take, and while they may seem obvious, they all too often fall to the wayside.
The only organizations that succeed in making real progress on problems like one-time buyers are the ones that set realistic goals and actually socialize those goals throughout the company.
Find the Roadmap in Buyer Personas
The key to crafting a multi-team strategy to combat the one-time buyer problem is in really getting to the root cause of why your buyers are not coming back for a second round. In working with our clients, we’ve found persona-based segment analysis to be a very useful framework for this.
Buyer personas are a common tool for grouping customers based on behavior, demographics, propensity, attitude, and other factors, depending on how much data is available.
These aren’t personas assigned based on character types that we think up, like the Elite Executive or the Family Focus — these personas surface from what the data shows, based on how people buy.
Here’s an example of what a group of personas might look like for a fictional sock retailer using Custora:
You’ll note that each persona also has a customer lifetime value (CLV) assigned to them, which is key for prioritizing which segment to go after. (We think CLV is one of the most important metrics — you can read all about it here.)
Tactically speaking, grouping buyers into persona segments is a huge step because it allows you to introduce some differentiation into your messaging so that you’re sending the right info to the right people instead of relying on a one-size-fits-all approach to welcome series and win-back emails.
But the real impact for a challenge like one-time buyers is in moving past tactical fixes to more strategic applications of your persona data. We think about this as reactive versus proactive, or, to put it another way, reducing flooding versus constructing a dam. How do we build a stronger value proposition for our different customer segments over the long run?
The truth is that marketing communication isn't always the deciding factor for whether a buyer is going to go on to make a repeat purchase. Sometimes it is, but not necessarily in every case. The customer experience has multiple facets, including product quality, price point, and the channels where the customers hang out, and all of these are going to need to be accounted for in creating a proactive action plan for each of your personas.
Imagine that you had at your fingertips a dossier on each of your different personas. In our example of the sock retailer, we know that one of our personas, Show-off Steve, is somebody who tends to buy flashy things, is status-driven, the sort of buyer who is into brand logos. We're instantly able to zoom in on which products are driving higher and lower repeat purchase engagement for this persona, which channels are bringing in the repeat versions of Show-off Steve versus the one-to-two-time buyer versions of Show-off Steve, and so forth.
From a marketing perspective, what are the stories that we should be focused on communicating when we talk to Show-off Steve? Perhaps we would want to actually highlight pricier sock options which tend to lead to a higher repeat rate since we see a lot more drop off when we talk about lower price point options within these categories.
For the merchandising team, we would know exactly what products are hitting the mark with this persona and what products are falling short, giving us direction on which price point needs a bulked-up assortment.
The product team is going to be focused on fixing design and fabrication issues for this persona where we see a drop-off in products that we would expect to be doing well.
The channel team should focus on deemphasizing channels that bring in the one-and-done versions of Show-off Steve versus the repeat version.
Now imagine that we go through an exercise like this for each of our personas, basically sequencing the genomes. Then we’re able to understand exactly where the opportunities are from a channel perspective, a product perspective, a promotion perspective, etc. This lets us come up with a coherent shared strategic roadmap across all our teams.
More often than not when we work with retailers, we see what's driving changes in buying behavior by looking at their customer base through the lens of these key segments and then drilling down to root cause. We ask, where do we expect to see them repeating more than they are?
Getting to this stage is incredibly eye-opening for a retail organization. This is where the wheels really start to turn and companies can begin making meaningful progress on their biggest challenges like one-time buyers.
Check back next week for the last two steps, implementation and measurement & optimization.