If you’re going to put time and effort into developing compelling email marketing (and you should!), you want to make sure you’re getting a notable return on investment (ROI). Much like setting your audiences with paid advertising, directing your email marketing to specific segments based on customer’s shopping behavior is a powerful (and some would argue essential) tool that will go a long long way to helping you retain, engage and convert your customers.

Above, you can see an example of Marsello's customer segmentation grid. This calculates customer segments for you based on an industry-renowned calculation known as RFM – organizing your customer database based on their individual purchase recency, frequency, and monetary spend. Learn more about customer segmentation here.

When you couple customer segmentation with marketing that encourages that specific group to complete a CTA, or call to action (think directive prompts such as: "use a discount code", "complete a purchase", or "leave a review"), and you ensure the email is intentionally geared towards the customer group your marketing to, you’re much more likely to get the results you’re hoping for. Read how Yuccs used customer segmentation to increase conversion rates and maximize customer engagement during BFCM.

Create eye-catching emails

“We sent a new stock alert out and saw great results. We gave our Best Customers segment ‘Early Access’ which we got some lovely feedback on in-store. And then followed it up a few days later to all our other segments. We moved over half our new stock in just a week, which we’ve never even been close to before! Now we need to get more in. Not a bad problem to have!”

How retailers are using One-off Email Campaigns:

Learn how Sigi Skin’s success helped them see a 48% increase in day-to-day revenue following a One-Off Email Campaign for Mother’s Day.

Look after your best customers. Automate an email flow that encourages your best customers to keep shopping. If product recommendations in the first email don’t motivate a purchase, automatically follow them up with an exclusive discount just for them.

Build loyal relationships on customers’ birthdays. A cheerful ‘Happy Birthday’ message or offer designed to delight your customers will get them shopping again, and help move them to more desirable segments.

Win back At Risk customers. Bring back at-risk customers with an automated email flow designed to win them back. If product recommendations in the first email doesn’t motivate a purchase, automatically follow up with a limited-time discount email.

Recover abandoned carts. Automate great-looking abandoned cart emails to be sent when your customers don’t complete a purchase and leave items in their cart. Go the extra mile and pull through product images from their cart and a button to take them back to complete their order.

Send one-off email campaigns. Update your customers with on-brand, creative, and easily built one-off email campaigns. Send and schedule newsletters, promotions, or new stock emails to your entire database or to a certain customer segment with just a few clicks.

So how do you make the switch? All you need to do is install Marsello on the Shopify App store with a 14-day free trial (no payment details required). Marsello has been built for Shopify, so all of your customers will automatically sync. Still have questions about migrating from Mailchimp? We’ve put together a helpful page of FAQs on making the switch.

Still can’t decide what to do? Ask our marketing experts for help.

To put it simply, if you spend $100 on your marketing in a month and acquire 100 customers during that time period, your CAC would be $1. As this example suggests, the CAC is usually used with reference to a specific marketing project for a certain time period. Keep in mind that CAC is fickle and should be taken with a grain of salt! Here are some quick steps on how you can decrease your CAC without enormous effort:

1. Ensure your website is conversion-friendly. Think mobile compatibility, user experience, clear product listings that make use of relevant keywords, and high-quality product photography. You want to make it easy for your customers (new and loyal) to navigate to and through your site, and to make purchases with you. They should be able to easily search for the products they’re looking for, while also navigating past products they may potentially be interested in – clever product segmentation is a very useful tool in getting your customers to make the most of your store.
   

2. Boost the value of your current customers. This means working on moving your customers to more desirable segments and increasing the Return on Investment (ROI) that you get from your marketing. Make sure to check out Part Two of this series in which we look at retention marketing with customer segmentation.

To make a profit on your marketing, your monetary output needs to be less than what you receive back. In the case of acquisition, the value of your new customers must be more than the amount that you put into acquiring that customer. Using customer segmentation to understand who your most reliable customers are, and then using that knowledge to target customers like them (think lookalike audiences with exported CSVs and negative audiences – more on this later) is how you can be sure that your marketing is reaching customers who will most likely become loyal shoppers.

Check out this blog by Shopify to get an idea of ways that you can increase your conversion rates with ease.

What do customer segmentation and acquisition marketing look like?

A recent CMO survey found that 44% of marketers use customer segmentation to develop their acquisition marketing strategy.

Making the most of customer segmentation (see part 1 of this blog series and our Customer Segmentation Guide to get started) plays directly into your acquisition marketing. It’s simple; understanding your best, most loyal customers gives you a clear understanding of who they are and what they like. You then have the power to use this information to target customers like them.

As Hackernoon states, the communication in your acquisition marketing strategy needs to be informative: “At this stage, they would prefer to learn about the solutions to their problems. In later stages, you may need to talk about other related products in your communication.”

Establishing a useful and easily understood blog, maintaining your content SEO (including your product listings), and ensuring for top-quality user experience, no matter what device your website is being viewed on, goes a long way in helping you to attract new customers. If you’re unsure about SEO marketing, make sure to check out our recent blog series. What you need to remember is that if your SEO is top-notch, search engines will prioritize you as a search result and your store will be more and more visible to more and more customers.

Let’s drill down on this a bit and look at content marketing as a way to attract customers organically.

Step one is to get started by creating a blog post closely related to your store, products, or even your processes. For ideas on what your posts could be about, check out blogs from your competitors and influencers in your industry. It could be something as simple as “10 styles that we love this summer” if you’re a fashion-based retailer.

Then, start to share your blog. Create social media posts that link to it, share the posts among community groups you think the blog may help and don’t forget to include keywords in the blog copy and in your post. Just be careful not to flood your work with keywords. If you’re incorporating the words that customers are likely to associate with your store, the chances of your store appearing in the search results for those words is amplified, but overdoing it could actually hurt your SEO. Tools such as the Chrome Add-on ‘Keywords Everywhere’ can be a really useful free tool here. And it doesn’t always have to be the newest, freshest, most thought-provoking content to make an impact. Check out this quick guide by Aleyda Solis on repurposing content to keep it fresh with minimal effort.

And don’t lose heart. Content marketing can be a slow burn and sometimes you may not see results immediately. Even though it can seem like your blog and content may not be relating directly to conversions, remember that it’s intertwined in your brand and business visibility. The more valuable content that you publish, and the more you can get your store linked to on other websites (with the more traffic the better), the more search engines ‘like’ the look of your website and are likely to boost it in the search results. The reason this takes a while is that you’re competing with all the similar content out there and it can take a little while for the search engine to take notice. Keep at it and you’ll start to notice more and more readers, a percentage of whom will eventually convert to loyal customers.

Customer Experience

Make your products and your brand so appealing, informative, and industry-leading that new customers can’t help but peruse your products – and you should try to do this for as little cost as possible because, well, you can! It makes sense then that your customers’ experience of your store should be A-class. Whether your business is brick-and-mortar, online, or both, it’s imperative that your new and existing customers have such a pleasant experience shopping with you that they’re inclined to shop again. Pay attention to your customer service practices and overhaul them – check out this blog by Vend to get some ideas on where to start.

Here are a few ideas to consider too:

Offer tracking for shipped items:

Apps like AfterShip offer easy shipping tracking for your customers post-purchase. These offer them peace of mind once they’ve spent money with your store, particularly if the item is being shipped from another country or state. Your customers are easily able to check on the status of their parcel with the click of a button and they can rest assured knowing that if there are any issues, they are able to let you know in good time. This also gives you a golden opportunity to tackle any customer service questions by creating a clear path of conversation for your customers. If in-store customers are requesting shipping and it’s within scope for you, imagine how thrilled they’ll be to hear the answer is yes, they can have that beautiful item delivered to their door. Now imagine their gratitude when you get in touch with them again to supply a shipment tracking number, simply remind yourself of their details and let them know when their package has been sent.

Approach with influencers:

Influencers from your industry and similar industries are leading faces of the market. Customers trust their suggestions and even sometimes avidly wait for their favorite influencers to discuss more products. This doesn’t have to be sneaky product placement; think about how great the PR is for a well-known social media personality to openly say they love your product. Often, all it takes is getting in contact with the influencer or their agent, striking up an agreement (X amount of free items for X in return – usually photos/videos/content and a personal recommendation if they like the product). Once you’re all agreed on a contract and have the necessary details lined up, simply send out the products. Remember it’s important to establish an expected timeline for the influencer’s marketing, and often it’s a good idea to line these up with product releases or new stock.

Consider the unboxing trend:

There’s a reason influencers and customers are videoing themselves opening products from their favorite stores and sharing these online. It’s a recognized and effective form of sharing their experience and when it’s really positive, it’s only natural for your customers to want others to know. Including a hand-written note and a sample product could be perfect, particularly if you use loyalty tiers and your customers have reached a new tier. It’s also a great way to welcome new customers to your store after their first purchase. A small prompt for an unboxing on the packaging and an additional mention of your social media handles could be just the ticket to getting your customers to share (and rave about) their experience. Just remember to keep it within the possible bounds of your business. If a short thank you note and some simple but aesthetic eco-packaging are more your style and more aligned to your brand, that’s great! Keeping it within your budget is the key to success.

Using Marsello’s segmentation to inform your paid marketing

The most effective acquisition marketing that you’ll get from your Marsello product is invaluable – it’s an in-depth understanding of your current customers and their shopping patterns. By using your segmentation data to get detailed customer insights, you’re able to create audiences of potential customers who have similar tastes, style,s and shopping patterns.

The basic steps are reasonably simple:

1. Download your most desired segments as CSVs (likely best/loyal customers)

2. Add this CSV to your social media business account as an audience

3. Select ‘create lookalike audience’ to create a selection of users that share similar characteristics to your original segment

4. Just remember to exclude the original CSV group from the lookalike audience when building a new campaign, and your marketing is set to reach a wide range of customers similar to your most loyal, without you having to pay for your current customers clicking and blowing your acquisition budget.

Remember that social media and paid advertising are complicated beasts, but understanding your audiences and who you’re targeting can set you apart. This also works best if you have an audience of over 1000 customers, otherwise, you may find that your marketing doesn’t deliver as your social media channel deems the audience too small.

Why not start with something proven? Acquisition marketing can tie in and be linked to your retention marketing. Using tactics like customer referrals and reviews incentives are sometimes the difference between a sale and not. Email and loyalty apps, like Marsello, offer pre-designed, optimized emails that are automated to send to your customers at different stages of their customer lifecycle.

Final words

Acquisition marketing is a fine art made up of knowing who your customers are, attracting the right customer based on your previous knowledge, and then making sure your acquisition efforts flow into your retention efforts – you want those ideal customers you’ve gone to so much trouble attracting to keep coming back. And with indicators like customer segments, Customer Acquisition Cost (CAC), and Return on Investment (ROI), you’re already way ahead of the game.

Just remember that whatever marketing efforts you put in place, keep testing them. If you use a lookalike audience from 6 months ago, but your products have changed completely then the profiles of your ‘best’ and ‘loyal’ customers will have also changed. Using old customer data would therefore not be as likely to appeal to your new potential customers.

Start with the basics and work your way up. With eCommerce, ensure that you have your product listings nailed, keywords carefully added without flooding your content, and product photos crisp, while referring to our SEO series to make sure you’re nailing this. Your customer’s experience of your online store, regardless of the device they’re using, should be free-flowing and simple. Buying from your online store should feel like an enjoyable experience from their first-page view right down to the customer receiving their package on time.

If your business is mostly or entirely brick-and-mortar, the basics are the same! You want your potential customer to have a peaceful, enjoyable, informed, and encouraging experience in your store and you want that potential customer to make a purchase. Don’t fall into any traps on inundating your customer with too many products and eye-catching things. Start with researching physical product placement within stores like yours to see if there are perhaps patterns you should be following.

And remember, anything to do with SEO, content marketing, and subtle prompts can sometimes take a very long time to get off the ground. Be patient and experiment with what works best for your brand.

Have you seen the rest of the Customer Segmentation Series?
Check out Part Two and Three in the links below:

Understanding your segments

As your customer database grows, that the metrics defining your segments will change too. It’s important to understand how your segments grow and change in order to get the most out of your marketing. Segmentation is an amazing tool for creating targeted marketing, but it’s vital for you to understand how the segment rules will adjust to your customer’s shopping behaviors and ultimately your segments. For example, as your ‘Best’ customers order more frequently and spend more per order, the minimum spend to enter the ‘Best’ segment could increase, potentially causing some of your other ‘Best’ customers to fall into the ‘Loyal’ segment. A good metric to look at in this example is the segment’s Average Customer Lifetime Value (ACLV).

Looking into a segment’s ACLV is helpful when you’re getting into the nitty-gritty of your budgeting, your target audiences, and your customer segments. If you know how much your customers are worth to you now, and you can estimate how much they will be worth to you in the future (over the next 3 years), you can allocate your marketing budget to get the biggest return on investment. Check out our blog on calculating Customer Lifetime Value to help you understand the basics of CLV and how Marsello calculates this for you. Our friends at Shopify also clearly explain the importance of CLV. As they put it,

“Not all customers are created equal. In fact, the top 1% of eCommerce customers are worth up to 18 times more than average customers. […] As a business owner, you need to be able to focus your efforts on acquiring the right customers—the customers who will take your business from being a flash-in-the-pan success to a household name.”

Understanding your ACLV and where you should allocate your marketing budget all come back to Return on Investment (ROI) – you want your marketing spend to even out through your revenue gain, otherwise, that marketing can quickly become an expensive loss. When you understand your segments, how they change, and who is in them, you can predict which ones have the opportunity to become more valuable and who will already give you a high ROI. Let’s look at another example of how your segment metrics can change with a different customer group. As your customers shop more frequently, your average purchase cycle will decrease. This would have a visible effect on your ’At Risk’ and ‘Lost’ segments as the timeframe for your customers to slip into these segments would decrease, meaning that these segments would likely grow. But it’s important to note that your customers are shopping more frequently, which is a good thing, so just because segments that could be more worrying at a glance are growing, does not necessarily mean that your marketing is not working.

To understand how Marsello’s Customer Segmentation feature organizes your customer database, read Marsello’s guide to Customer Segmentation “Take Personalization to the Next Level with Customer Segmentation by Marsello”.

Generating loyalty with Retention Marketing

Don’t get it confused, retention marketing and loyalty are not the same things. Retention marketing is using specific tactics to engage customers who have already made a purchase with you and to encourage them to keep purchasing. Loyalty marketing is one tactic that you can use within your retention marketing toolkit (think loyalty programs with generous rewards), however, loyalty itself is when your customers are committed to buying your products; you’ve nurtured their relationship with your store and now they’re a customer who won’t take a huge marketing effort to make another purchase.

So how do you generate loyal relationships with your customers?

Think about what makes you want to return to your favorite stores, online or otherwise; it’s all in your previous experience of that store. No customer wants to feel like just another number to a retailer – the key is in nurturing the customer’s loyalty by giving them a shopping experience to remember, and this doesn’t have to stop at the completion of a transaction. Take the example of using an email to thank a first-time customer for shopping with you. Offering them a worthwhile discount code when they spend over a certain amount on their next purchase is a perfect way to entice them to shop again.

At its core, coupling customer segmentation with retention marketing gives you the power to curate marketing strategies personalized to each segment. Get started by testing the success of your current marketing with each of your segments. Do your ‘Best’ customers love emails with product recommendations based on what they’ve bought before? What about your ‘New’ customers? Maybe they just need a reminder to join your generous loyalty program that allows them to climb to higher-earning tiers and they’ll become a ‘Loyal’ customer in no time.

Let’s create an example: Jane is in your ‘Loyal’ customer segment. She shops reasonably often, although mostly in smaller amounts – a single item at a time (your best customers shop frequently and often buy three or more items at a time). To successfully have Jane move to your ‘Best’ customer segment, you would need her to spend more with each purchase. Giving her access to a tiered loyalty program that rewards her for these purchases could be the marketing strategy that changes her shopping patterns. She knows that if she spends $X on the next purchase, she’ll move tiers and gets access to doubled points per spend. Moving tiers and higher rewards could be the incentive Jane needs to make more frequent purchases with you.

As Jane begins to spend more with you, you evolve your marketing strategies and use these to nurture your customer relationships, this, in turn, makes Jane (and customers like her) feel more engaged with your brand and fosters loyalty. Jane is therefore increasingly more inclined to shop with your store and is now more likely to enter more reliable segments. If loyalty programs aren’t working for your customers, then maybe it’s time to trial deals on shipping or offering freebies with purchases that total over a certain amount.

Check out Our Bralette Club's loyalty program for an idea of how to master a generous loyalty program. The team at Our Bralette Club makes it easy for their customers to accumulate points and then once those customers reach 1000 points and then 1200 respectively, they reach different levels of the Peach Party VIP program. At level 2, customers start earning 3 points for every dollar they spend and at level 3, they earn 4 points for every dollar spend.

The Peach Party's detailed VIP program instantly gives OBC's customers more and more incentive to keep shopping at a store they already love enough to have earned points to reach another tier.

Global beauty brand and distributor, MECCA, are also well known for their loyalty program, ‘Beauty Loop’, featuring multiple tiers and yearly freebie rewards to customers within each tier – and those gifts keep getting better with each tier that their customers reach.

MECCA are also champions of freebies and offers, including entire racks of travel-sized cheaper, but beautifully presented products near their tills and offering free trial products when certain purchase requirements are met. If you don’t have a MECCA store near you, take a look through their products and marketing online to see how the pros are nailing it in both an eCommerce and POS setting.

Check out their loyalty program in the image below:

Another power of retention marketing is that you’re reaching out to customers who already know your business, your brand, and your products. This means that you’re able to rely on this knowledge to bring them back to your store with crowd favorites, unmissable deals, or loyalty program incentives. Remember, it’s all about helping your customers to feel supported, understood, and appreciated.

Retention marketing is huge and can require a bit of trial and error. To get you started on planning, check out this blog from BigCommerce on “How to Retain Customers and Spend Less”. Take note of the way they stress the importance of personalization, customer service, and, above all, valuable content. Shopify is also nailing product advice with this course on product photography. If you know that certain products are selling more than others and you think it could directly relate to the image or text in that product listing, perhaps it’s worth testing if replicating this with other products will help all of your products to sell equally as well.

As we’ve noted before, email marketing is the most effective form of marketing within retail – even if you’re store is solely brick-and-mortar with a loyalty program linked to your POS, you can effectively use email marketing with your customers. To put it into simple figures, the ROI of email is as high as 3,800% and email marketing is as high as 40x more effective than Facebook or Twitter when it comes to product marketing making conversions. By intelligently segmenting your customers base and understanding your customers by their shopping habits allows you to open up an enormous range of marketing potential. Providing content that is relevant to each customer segment automatically helps those customers to feel more appreciated, more engaged, and therefore more likely to complete a purchase.

With all the planning, trial, and error that comes with figuring out how to make your marketing work for you, it can all feel very intimidating. Apps like Marsello, with a built-in tiered loyalty program and automated email flows, are designed to make this process easier for you and can be a powerful addition to your toolkit. Remember though, when you’re adding to your marketing toolkit, this needs to be accounted for in your budgeting.

Final Words

The buzz around retention marketing is there for a reason, it works! And with customer segmentation at your fingertips with tools like Marsello, it’s so much easier to automate this process and understand your data. Remember though, it’s not as simple as setting up a loyalty program and hoping that will be enough, you need to cater to your customers and find out exactly what it is that works for each segment. Do your research too – it never hurts to check out what successful stores like yours are up to.

Stay tuned for blog three in this series in which we will go in-depth on acquisition marketing. We want you to get the most ROI from your marketing budget, and we want it to be simple for you to achieve this success. Let us know if there are any tricks that you love using in your retention marketing in the comments below, or better yet, head to our app listing and give us a review of what it is exactly that you love about Marsello.

Have you seen the rest of the Customer Segmentation Series?
Check out Part One and Three in the links below:

Sometimes, it can feel as though your carefully planned marketing is drowning in a sea of emails, paid ads, and brand awareness campaigns. In turn, it can then feel like an impossible task to convince a customer to pick your products and brand for their Retail Lifeboats: the SS Revenue and SS Loyalty.

Marsello released Customer Segmentation specifically designed to tackle this. We’re taking the guesswork out of segmentation and targeted marketing, however, we expect retailers to want to understand what is happening. We want you to have all the information to make the most out of your segmentation, from the basics to retention marketing and finally, acquisition marketing. That’s right, welcome to part one of another Marsello three-part blog series. And if you didn’t see our SEO series, check out part one here.

As internet marketing guru Neil Patel says, "User segmentation isn’t something that is alien in the marketing world. The big brands have this down to a T, and the little guys are just waking up to the power behind having a laser-focused strategy — laser-focused on user segmentation."

Customer Segmentation 101

It’s becoming increasingly apparent that retailers should be specifically marketing their brand to smaller subsections of their customers, rather than their entire customer base. The idea that when customers are segmented by their shopping behaviors, traits, and previous purchases, it’s far easier to target them with marketing campaigns that are most likely to result in a sale. Think about how hard it is to try and create your marketing when you know next-to-nothing about your customers – using customer segmentation to inform tailored, and personalized messaging is a proven, sure-fire way to keep customers interested and even win-back customers who have lapsed.

Let’s break that down. I love this example: everyone has their coffee preferences – americano, latte, cappuccino, espresso, iced coffee, or a cup of tea instead. The thing is, selling an espresso to someone who knows they want a large frothy soy latte is a waste of time, and can even sometimes leave that customer feeling like they wasted their money. Cafes that cater to a wide variety of coffee preferences, and even dietary requirements, are already using customer segmentation by meeting the needs of as many customers as possible while still selling a small variety of products. It’s tailored marketing at its most basic! And it doesn’t mean you have to stick to catering to what customers know, for example, cafe regulars who take their coffee away may be thrilled with a reusable coffee cup deal that includes a free coffee at the time of purchase. It’s all about applicability.

Cafes can easily go the extra mile. The Marsello marketing team are regulars at a nearby cafe. With weekly meetings and daily morning coffee orders, the baristas have gotten to know even our most particular orders. For example, one of our team loves a mochaccino, but only when the coffee is strong, and the chocolate is quarter-strength. It took a little trial and error to get there (and sometimes when there’s a new barista there’s a bit of refamiliarizing needed), and now our local cafe has this particular coffee (and all the others) so nailed that when our team walks in, our Mochaccino Marketer just has to say, “My usual please”. This familiarity, their generosity with their loyalty program, and their warm, attentive customer service have made our entire team very loyal customers.

What the local cafe is doing here is helping Marsello’s Marketers to feel cared for, attended to, and that our loyalty is appreciated; this makes us want to shop with them again and again, and therefore helps us to form a recurring spending pattern. Their attention to detail, excellent quality coffee, and care for our individual needs then help us to feel further catered to, and when little perks like free scones are thrown in, we are not only sure to keep coming back, but we’re sure to bring others and form lasting habits.

That’s great for cafes, but how do we apply this to the wide variety of eCommerce and Point-of-Sale stores out there when knowing each customer at an individual level isn’t feasible? Well, have you heard of RFM (Recency, Frequency & Monetary) analysis for customer segmentation? If you haven’t, the reason we’re here is to explain the basics.

What is RFM analysis

RFM analysis starts by basically asking three questions about each customer:

1. How recently have they shopped with you?

2. How often do they make a purchase?

3. How much have they spent?

Once you’ve asked these core behavioral questions and started to organize your customers, you can begin to develop how you will work to capture these segments within your different marketing tactics.

Now, actually stopping to query this of every customer isn’t going to work, but automating it through customer database analysis will! Marsello’s customer segmentation does the hard work for you here, although it always pays to understand how that works. Yep, you read that right! Marsello’s Customer Segmentation is data-driven and based on RFM analysis. We’re also excited to give you paired suggestions that are designed to take the segmentations marketing capabilities one step further and help you to begin targeting customers, helping to move them to more loyal and reliable segments. Keep your eyes peeled on our upcoming blog on customer segmentation and retention marketing where we’ll go into more detail on this.

The RFM Analysis Ranking System

RFM analysis doesn’t just stop at organizing your customers based on recency, frequency and monetary. To make the most out of this system, it’s then important to rank the importance of these categories and rank the customers within these categories, allowing you then to find your most loyal customers, those who are most at risk, or, for example, those who haven’t shopped recently. We’re really just brushing the surface here so let’s dig in and create an example:

Sam, a sewing master, and clothing designer, has been running a successful clothing company for the past year. He's been sending blanket messages to his customers and has recently discovered RFM analysis. Instead, Sam wants to create marketing that can reach out to all of his customers, without assuming the same demographics of them; so he begins using RFM to organize them and is now in the process of ranking them. To do this, he exports spreadsheets from his Point-of-Sale and eCommerce system, combines the spreadsheets and then manually has to rank each of his customers using RFM analysis.

In order to make sure that he ranks his customers fairly and without bias, he creates his calculation process; this is easy for her monetary i.e. how much they’ve spent. However, it becomes more complicated for frequency and monetary. Frequency is the number of orders they’ve made in a specific time frame, what should that time frame be? What’s excellent and what’s not? Recency is how often they shop, however, when does a customer become at risk? What is their average purchase cycle? In short, how do you know you’ve done this correctly? And how often should you do this process?

Here’s where Marsello’s customer segmentation sets us apart. With the correlation between recency of purchasing and the likelihood of purchasing again, Marsello’s data-driven segmentation organizes customers with this in mind. For customers in the ‘New’ segment, are specifically customers who have made one order within the past year. However, if a customer makes more than one purchase within the year, they move to and of the ‘Promising,’ ‘Loyal,’ and ‘Best’ segments, scaled according to Frequency and Spend. Check out the Marsello Customer Segmentation tool below. Each block is interactive and includes a customer list for the specific segments, leaving room for detailed marketing efforts down the line.

Let’s create another example: for Sam’s highest spending customer (let’s call them ‘Belinda’), who also shops multiple times a month. Belinda is a devoted follower of Sam’s clothing designs, and he knows Belinda by face when she enters the store. Of course, Belinda is within the ‘best’ category, but to keep her here, Sam knows that he needs to cater to this customer on a personal level. Belinda likes her clothes to be shipped from the brick-and-mortar store, and, from previous experience with her, Sam knows this is the case. Sam’s more than happy to oblige because he knows it means repeat sales from his highest spending customer.

Now, it’s worth noting that Belinda the ‘Best’ can slip into the ‘At Risk’ segment. Sam knows from shopping patterns to expect Belinda at least twice per month within his brick-and-mortar store, and he can also usually expect at least one online purchase from her every two or three months. On one occasion, Belinda doesn’t complete a purchase for four months! Because this is out of her regular purchase cycle, Belinda slips into the ‘At Risk’ segment. Sam can see this is a bit of a problem and creates marketing to hopefully bring Belinda back. If Belinda doesn’t complete a purchase within 12 months of her last purchase, she moves segments again to become a ‘Lost’ customer.

With the example of Sam and Belinda, it’s simple to see how customer segmentation can have a significant effect on marketing strategies. Rather than sending Belinda an email for a generic coupon, as a ‘Best’ customer, it would be wise for Sam to offer Belinda something that feels a little more exclusive and tangible. Perhaps tiered loyalty and added purchase freebies would be a good option.

Check out Our Bralette Club's beautiful loyalty program which features VIP tiers for inspiration:

Marsello’s customer segmentation doesn’t just stop at organizing customers. As we’ve already mentioned, it can be a mammoth task to organize customers into segments manually, and to know that you have to do this regularly is daunting. Knowing how often you should be updating your segments isn’t even the start of it. The good news is that Marsello’s customer segmentation is updated every 24 hours, and we’re aiming to up the ante and make these updates even more regular. Even if you are using RFM, manually updating every day just isn’t feasible, so we’ve got you covered, ensuring your targeted marketing is accurate.

If you’re still curious about manual segmentation, Shopify and BigCommerce have published some incredibly descriptive articles on RFM.

So, what do we know

• RFM analysis is used to organize customer databases into specific segments. Basing these segments off customer’s purchase behavior gives crucial insight into the type of marketing you should use to target them and to move them between segments.

• Frequency and monetary values are core to calculating your customer lifetime value (CLV); meanwhile, recency gives insight into customer engagement and indicates the likelihood of that customer coming back again. We’ll go into this in more detail in Part Two of this series, so keep up to date with these blogs by subscribing on the right-hand side of your screen, and following Marsello on Twitter or Facebook.

• Targeting your marketing based on these metrics allows you to focus your budget on areas such as retention and acquisition, while still moving customers to more reliable segments.

Stay tuned for our Customer Segmentation Series parts two and three to learn more about segmentation coupled with retention marketing and acquisition-focused tactics.

Have you seen the rest of the Customer Segmentation Series?
Check out Part Two and Three in the links below:

The saying “You have to spend to make money,” is quite true in the world of retail. As a store owner, you often have to invest in marketing and advertising to acquire new customers and generate revenue. The question is, exactly how much should you spend on customer acquisition to ensure that your efforts are worth it?

To answer that, you need to calculate your Customer Lifetime Value (CLV).

Sometimes referred to as Lifetime Value (LTV), this metric is the amount of revenue or profit that your business stands to generate from each customer during their lifetime. So, if your CLV is $50, then that tells you that it shouldn't cost more than $50 to acquire each new customer.

There are a number of formulas for computing CLV, and the right method will depend on your business model, customer behavior, and available data, among other things.

To help you figure out the right CLV calculation method for your business, we’ve put together some of the most common CLV methods used by eCommerce merchants. Check them out and see which one is the best fit for your business.

1. Use the simple CLV formula.

The no-frills way to compute your CLV is to subtract the cost to acquire and serve customers from the revenue that you’ve earned from them. To do this, use the formula:

LTV = Lifetime Customer Revenue – Lifetime Customer Costs

So, if you earned $200 from a customer over their lifetime and you spent $140 acquiring and serving that customer, then their lifetime value is $60.

Since CLV is often defined as the profit you’ve earned from your customers, then it technically makes sense to subtract your customer costs from your revenue. That said, this takes a very simplistic view of CLV, and it becomes problematic when you’re calculating the CLV of entire customer groups or segments.

That’s because this formula doesn’t take into account the fact that not all your customers spend the same amount at your store. Not to mention, shoppers don’t all stay active within the same time period i.e., certain customers are active for 2+ years, while others just purchase once and then become dormant.

For this reason, it’s a good idea to use more complex CLV calculations to ensure that you’re able to factor in different customer variables.

And that brings us to our next formula...

2. Determine CLV based on customer revenue distribution

Another way to calculate your customer lifetime value is to look at how revenue is distributed across your customer base. You can do this by benchmarking customer spending in your business and then grouping your customers based on those spending thresholds.

Let’s say that spending in your company typically falls into the following buckets:

• Customers who spend $25

• Customers who spend $50

• Customers who spend $75

• Customers who spend $100

The next thing you need to do is to figure out how many customers fall into each bucket. So you might list them as follows:

You’ll want to sum up the lifetime value of all your customers using the formula

(# of customers 1 x revenue) + (# of customers 2 x revenue) + (# of customers 3 x revenue) & so on

So the example above would be:

(98 x 25) + (80 x 50) + (102 x 75) + (68 x 100) = 20,900

You can divide that amount by your total number of customers to get the CLV

= 20,900 / 348 = $60.05

This is a good calculation to use especially if your basket sizes vary from one customer to the next. As The Balance explains, this CLV formula accounts for the fact that “some customers may be one-time or occasional buyers, versus the regular purchasers on the other end of the scale who have a higher LTV and generate the most profits.”

3. Multiply customer value by average customer lifespan

This CLV calculation is the one recommend by Shopify. What’s great about it is that it factors in a number of variables, including average order values, purchase frequency, and customer lifespan.

This method uses the formula:

Customer Value x Average Customer Lifespan = Customer Lifetime Value

Let’s break down what each of these components means.

To determine Customer Value, multiply your Average Order Value (AOV) by Purchase Frequency. You can find your AOV by dividing your Total Sales by the Number of Orders.

Meanwhile, to determine Purchase Frequency, divide the Number of Orders you have gotten over a certain time period (say 1 year) by the Number of Customers you have within that same time period.

Once you know your AOV and Purchase Frequency, multiply those figures and you’ll get your Customer Value.

Next, let’s talk about the Average Customer Lifespan. This figure pertains to the length of time that a customer is active. You may need to examine your purchase history to figure this out, though some experts say that 1-3 years is a good estimate.

Once you’ve determined your Average Customer Lifespan, you can go back to the formula above, Customer Value x Average Customer Lifespan to find your CLV.

Total sales + No. of orders = Average Order Value

No. of orders (1 year) + No. of customers (1 year) = Purchase Frequency

Average order value x Purchase frequency = Customer Value

4. Multiply lifetime value by profit margin

Another way to approach CLV is by multiplying Lifetime Value by Profit Margin. According to Clever Tap, this method takes your expenses into consideration so you're able to figure out the net value that you get from each customer.

Lifetime value x Profit margin = Customer Lifetime Value

The formula for this method is: Lifetime Value x Profit Margin, wherein Lifetime Value is Average Order Value multiplied by the Number of Transactions, which is then multiplied by Average Customer Lifespan.

Average order value x Number of transactions x
Average customer lifespan = Lifetime Value 

Lifetime value x Profit margin = Customer Lifetime Value

Driving home traffic this Christmas is simple with Marsello’s holiday email flow marketing campaigns. The pre-built best-practice emails save time and maximize returns, the cart abandonment emails recover lost customers quickly and effectively, and the loyalty program keeps customers coming back even after the holiday-mayhem has died down. In fact, users of this Shopify add-on are seeing 20 percent more sales and double the customer average spend per order.

Their tools don’t just stop at holiday email marketing, they offer a complete marketing package, including tiered loyalty programs, a referral program, AI-powered product recommendation emails, feedback collection, pre-designed email campaigns to cover your email marketing basis and customer lifetime value calculations.

2. Wishlist  

Wishlist allows your customers to create a wishlist of their favorite products, by adding a wishlist button to your product and collection pages. Whether customers are using it to compile a to-buy list, or eagerly creating a list for Santa, this little button makes things simple and makes customers more likely to complete their purchase with you.

Free trial: 30-days
Price: From $2.99 per month

3. Product Reviews

This professional Shop Sheriff suite of Shopify plugins provides valuable tools without excessive Javascript or third-party apps creating a mess backstage. Have your Shopify pages load instantly with AMP, display a carousel of trending products on your home page and view advanced analytics to tailor your future marketing plans.

Price: Free plan available, $9/month for hobbyist, $29/month for company

Invite everyone over

If you’re having a Christmas party, you’ll want everyone there. Increase online traffic to your Shopify store this holiday season with these Shopify add-ons:

5. Expandly

 Catering for additional guests (or shopping channels) can be hard work, but it’s a little easier with multi-channel management software. Expandly allows you to connect your Shopify store to Amazon, eBay, Wish and Etsy, alongside your shipping carrier and Xero accounting software.

Free trial: 14 days
Price: From $30 per month

6. Order Deadline

Counting down to presents Christmas is the most exciting part of December, and it’s easy for your Shopify store to join in the fun. Order Deadline answers your customers’ most pressing questions: When will I get it and how long do I have to place my order? With four designs to choose from, this simple addition to your Shopify store results in fewer calls and emails, and happier customers.

Free trial: Three days
Price: From $10 per month

Send out some Christmas cheer

Delight your customers and spread the good news. These Shopify add-ons will help get people talking about you with nice things to say.

7. Plug In SEO

 Reward your hardest searching elves this Christmas by checking, fixing and improving your SEO with Plug In SEO. The Shopify add-on checks your essential SEO elements (titles, headings, meta descriptions, speed, blogs and more) constantly, telling you what’s broken, what’s worth fixing and how to do it.

Free trial: 7 days
Pricing: From free

8. Deliverr

Step 5: Show your customers that you have what they need.

Shoppers often leave stores and sites because they haven’t found what they’re looking for, but just think how high the chances are that they just haven’t found that perfect item in your store yet. Offering product recommendations based on customers’ browsing and shopping histories, and the shopping and browsing history of customers like them is a proven way to increase your revenue and customer loyalty.

Marsello has you covered here too; simply drag the product recommendations widget into your email while editing the flow, and our smart AI will do the rest. Consider combining this with a discount code recommended above and really coax your customers into making the purchase they’ve been thinking about. If you want to know more about customizing your holiday email flow, check out our Holiday Email Flow Guide.

Step 6: Recover abandoned carts of customers who’ve left your store without a purchase.

This one is extra important for you to make the most of the busier holiday traffic. When you’re shopping online, how often do you add something to your cart only to promise yourself to come back to it later?! Remind customers of your unbeatable products and the item they forgot to buy by turning on abandoned cart emails – these have proven to gain retailers an average of 6% more revenue per day. Just think about how much that adds up throughout the year; so why not tap into through enabling the flow in your Marsello settings.

Step 7: Reward your customers.

Customers love to feel valued and what better way to do that than by giving them points for every dollar they spend in the form of a loyalty program. Marsello’s loyalty feature also enables retailers with brick-and-mortar stores to cross-reference those points with their online stores so customers can shop online and in-store and still gain the same points to the same account. Being generous here and offering high incentives is a winning way to gain customers loyalty, but to also gain new customers. If you include referral incentives (another feature Marsello offers), your loyal customers earn points for every referred friend that completes a purchase and that friends earns points too. When you add the extra level of a tiered loyalty program, where customers receive bonuses for shopping regularly and reaching a certain point level, it’s easy to see why customers will keep coming back.

Step 8: Get a jumpstart on content marketing creation.

Blogs are a great way to keep your customers interested and up to date, so now is a great time to get started if you have already. For a festive season blog idea, why not take your top 5 best selling products or gift-guide picks and write about them in a creative way. Nothing sells better than a positive review, and even better if it’s third-party; so, start gathering feedback by enabling Marsello’s feedback feature and once you start reaping the rewards, add those testimonials to your blog, website or social media. There’s a wealth of content marketing opportunities throughout the holiday period, so keep an eye out for anything you think would present a good blog or social media update.

Step 9: Set yourself goals.

This seems like a basic one, but it’s the bread and butter of marketing during such a busy time. Automating as much of your marketing and possible will make this easier, but really what you’re trying to do is increase reach and revenue: you want to market to as many potential buyers and possible, and have those buyers complete a purchase they’re satisfied with. If you want to do this by having two major sales within a two-month time period, add it to your list of goals. If there’s a certain amount of revenue increase you want to achieve, add that too. But don’t just add these to a list and forget about them, create a plan of how you’ll achieve this! Will you use email marketing? Do you have a social media plan? Is your stock organized and ready for you to keep up with the demand? How much did you make last holiday period and will you be able to match or beat that this year?

While you’re considering upping the ante with your holiday marketing, here are a few more small tips which some retailers are pulling off elsewhere:

1. If you’ve got extra stock that you can’t shift but would make a cute gift, add it as a freebie promotion and advertise that. A simple email campaign with ‘Buy now and receive a free gift on us’ could be enough to convince most shoppers. We also love the idea of ‘we’ve also thrown in a free stocking stuffer’.

2. Prepare to adjust your marketing. If you notice that your social media isn’t reaching many people or your email campaigns aren’t having a high open-rate, it could be something as simple at the time of day those updates go out, or that your competitors sent out a similar email that day. Be original but authentic in your approach; remember that natural engagement with your customers is often highly valued.

3. Prepare target products. You may have holiday-specific stock or items that you’re predicting to sell well; make sure that this stock is prepared through careful stock-take, monitoring, and planning. Don’t go into a sale with half the products you anticipate on selling.

4. If you’re using paid ads or keyword marketing, be smart about it! Searches nearing the Christmas period, for example, peak when they contain words like ‘Christmas’, ‘decorations’, or ‘presents’. If your products were previously advertising, for example, stationery supplies, then perhaps it would be an idea to change your keywords to something like ‘Christmas Cards’, ‘Xmas Stationary’ or ‘Greeting Cards’.

5. Show off your products as the solution. When you give your customers the affirmation that your products are the answer to their gift-giving needs, you’re so reassuring them that they’re making a quality purchase. Does your store sell woollen socks? Great! Those are perfect for the wintry seasons when your socks do the hard yards of keeping toes warm. What about the Camera equipment you’ve just got in stock? That’s the perfect solution to family photo sessions or capturing those special seasonal moments.

There are infinite ways that you can prepare for the holiday season, but Marsello has your marketing covered. With email campaigns, smart suggestions, loyalty programs, optimized designs, free chat, and email support and so much more, it’s the perfect companion to your store for the busy holiday period and more.

Do you have a favorite tip (either one we’ve mentioned, or a fresh idea)? Add a comment telling us a little about what is it, how it works for your store and what makes you love it so much?

But before you consider how you can approach the ideas from previous years, check out the following tips picked to help you prepare for the impending Cyber Week madness.

A Holiday Marketing Plan to Showcase Your Brand

A 2015 study by the National Retail Federation suggested that effective marketing of your brand before and during Cyber Week can increase sales by up to a shocking 30%, this even increases to 40% in some industries (such as jewelry). Use this knowledge to your advantage! Even if you’re behind on your email marketing, you could try to find a moment to create a series of email flows that offer exclusive discounts and deals for your store during the Cyber Week chaos.

This is a great time to mention that Marsello's email templates library is a great place to find ready-made templates that will allow you to easily design and send emails even in a time-crunch. 

Just to be thorough, here’s an example of a manually created email flow which could be the the push you need to see holiday success and marketing ROI.

Let’s break these down:

Email 1:

• • Campaign Launch! Announce your enticing Cyber-focused deal/sale and give a clear call to action to your customers to shop with you – an idea for a first email is a gift-guide or staff-picks announcement.

  • Include some branded, appropriate and fun graphics to make your email instantly recognizable as a Cyber Week related email which is also linked to your brand.

  • Add another call to action at the bottom which suggests the customer checks out more products or visits you in-store at a list of your brick-and-mortar locations.

Extra note: you could segment this email flow so that those who are making a first-time purchase are offered a similar email immediately after their purchase, but their email includes a coupon code valid only for cyber-week, incentivizing them to shop again with you in the near future.

Email 2:

• • Your call to action needs to remind your customers that your sale or deal is ending soon and convince them to shop before it ends. A simple ‘Our sale is ending soon/ on [date/day of the week]. ORDER NOW!’ is a tried and true CTA.

  • Your cyber-week visuals for this should be fresh and attention-grabbing, reminding your customers that you’re creative and current.

  • Include your shipping costs or terms so that your customers are reassured about their shopping experience with you.

  Email 3:

  • Your sale ends today, tomorrow, or in [X] hours. With an imminent end, remind your customers that this is the last day to shop and they shouldn’t miss out.

  • Graphics and images could be changed to include themed gift-guide ideas or suggestions from popular purchases throughout the week.

  • Marsello offers an email flow option which shows the customer similar items to those that they’ve previously purchased. Including smart AI that personalizes the email will help your customers to feel as though your items meet their needs.

• Email 4:

  • Thank those of your customers that made a purchase during Cyber week for shopping with you. Or you could send everyone a reminder of the next holiday in your calendar or that it’s simply coming up to the festive season and now is the perfect time for them to get on top of their shopping.

  • You can always add themed graphics which say thank you but why not show off some of the top-sellers from the week if you haven’t used this already.

  • If there are any delays in shipping or updates, make sure to let your customers know why this is the case.

Get Creative & Be Consistent

We’ve compiled a shortlist of these 5 ways that you can make the most out of your marketing and see results from just a few quick changes:

1: Add themes and graphics to your website and social media marketing.

Whether this is just updating your website’s banner with a cute graphic that includes some of your products, or a fully adapted homepage/landing page, the end-game is to narrow your customers’ focus onto the products you’re hoping they will buy. Some stores even use a product countdown or time-until-sale-ends timer so that customers feel the pressure to shop and avoid missing your store’s deals.

Australian pet-product store, Peticular, is a seasoned pro at seasonal and festive marketing. Check out the way they’ve used social media to advertise their Halloween-specific items by including this adorable photo of a bandana-wearing pooch. They are also quick to update their store and email marketing with similar graphics which show off their brand but also their products.

We love that they’ve cleverly included the item’s price, clearly displayed with the additions of a ‘products shown’ button below the image. Peticular have also gone the extra mile and included a link in the description to even more bandana designs. They do a great job of using their marketing to show off their in-season and cutest items. We recommend keeping an eye on them for inspiration.

One key part of your holiday marketing to remember is making sure that your images are optimized and meet the needs of your customers. Think of all those stores with beautifully branded festive images and how much more inclined you are to buy from them. 

2: What deals can you offer in terms of shipping?

Maybe free shipping isn’t an option, but what if customers are spending over $100? In a survey conducted by BigCommerce, 80% of Americans cited shipping costs and speed of shipping as a major factor in determining where they shop, with 66% deciding not to buy entirely because of shipping costs. Even a small token to show that you understand this could be the difference between a sale or not.

While you may not be able to offer free shipping, no matter the amount of a customer's purchase, perhaps you could offer it to local buyers and specific locations, or perhaps you simply offer fast-tracked shipping with a tracking code. What about free returns? Giving your customers a sense of security over their online purchases will make them feel even more justified in their choice to shop with you.

Consider creating a seamless shipment and tracking system so that your customers feel your support, even at the busiest times of the year. One example of this as a store ad-on is Aftership. Basically, you’re giving the power back to your customer to follow where their item is at, and when to expect it. Cut yourself out at a middleman and forget the days of chasing couriers.

3: Be clear about what your deal or sale terms are.

Your customers are less likely to buy from your competitors if they feel the sense of urgency that the impending end of a sale brings, particularly if they’ve shopped with you before and trust you to look after them at such a busy time of year.

While we’re talking sale ends, don’t be afraid of extending that sale as well. Sometimes giving people an extra dale to check your deals out is the extra push they need to make a purchase. There’s a lot of demand in the days that follow on from holidays – give your customers a little push and remind them why your products are worth the extra purchase.

Giving a clear explanation of your timeline shows that you’re only doing this deal for a limited time, even if it’s a little beyond that of other store’s sales, says to your customers perhaps this is the best time for your customers to hunt down that item they’ve wanted for so long or to tick another item off their gift-list.

It’s worth a quick mention that a flash sale or one-day deal isn’t outdated. With the rise of websites that offer a deal for just one day, there’s room to compete, just remember to keep it on theme. Cyber week means that it’s cyber exclusive so this is a great time to out some select items on sale and advertise them through your emails and social media with that theme present. BigCommerce agrees – it’s the prime time “to capture the target market’s attention and up-sell your other products.”

4: Speaking of gift lists, why not spice up your blog as a form of gift guide?

Gift guides were the go-to marketing form of 2017 and for good reason – they work! They’re a simple way to show off your most appealing, beautiful or theme-appropriate products and to funnel your customers to your site. They also boost customer confidence, which leads the way for customer loyalty.

A shopping guide says to your customers, “I understand what you need, why you’re here and how I can make your life easiest for you.” It’s a low-key ‘look no-more’ that your customers will find easy to navigate, so the more inviting you make your gift guide, the more successful it’s likely to be. Besides, this is one of those cases where everyone is doing it, and you should too but because of that, you need to stand out.

Check out this example from Anthropologie who have a whole landing page dedicated to ‘gifts’ that sits in their navigation. Their products are all beautifully displayed in a similar style with clean lighting, pastel backgrounds, and essential details.

Gift guides don’t need to be restricted to just your website, they make an effective email flow with a clear call to action that says ‘Shop now and score great deals on these products, and more!’. Great Lakes Northern Outfitters, a Minneapolis-based men's apparel store, did a great job of this last year. The following email shows a careful selection of their favorite items. They followed these up with links directly to the items which corresponded to the numbered item from the photo.

5: Create and promote a loyalty points system.

Offering your frequent shoppers and brand-lovers an incentive to shop in the form of holiday season loyalty points is a simple way of winning customers back and developing customer loyalty. If you’re running a loyalty program (if not, check out Marsello’s easy-to-use loyalty program), you’ve already got access to a golden egg in the form of loyalty. If you haven’t tapped into this yet, make it a priority. As BigCommerce point out, customer loyalty is a multi-faceted focus point with long-game benefits.

Customers love to feel special, so let them feel appreciated and looked after in the form of exclusive deals but look beyond the short few months of the holiday season. Use this busy time to direct your customers to your loyalty program, incentivize them to join with exclusive deals or a limited time points bonus for first-time buyers who sign up.

It can be tricky to know what deals or offers will best benefit your store in particular. Marsello has you covered here too! Marsello includes smart suggestions to recommend the optimal reward settings for your particular store, offering your customers the ideal rewards.

Our top tip? Make sure that you can keep up with that marketing from now until the end of your promotional period.

Automation is the best way to do this – take some of the pressure off yourself by scheduling as much of your marketing as you can. Clearly branded email campaigns with simple, enticing call-to-actions, scheduled SMS campaigns, boosted campaigns, loyalty points promotions are all ways that you can ramp up your marketing... and, let's be real here, a little planning before the madness begins can go a long way to easing the stress of a busy holiday period.

Just remember the key is to show off your brand in a stand-out, flattering and appealing way. Offer deals where possible, and give your customers incentive to remain loyal throughout the rest of the holiday season.

And if you haven’t gotten a head-start on your holiday marketing yet, get started with a deep-dive into campaigns and the templates library.

Whether you’re running a brick-and-mortar store or eCommerce site (or both!), we’re willing to bet that you devote a lot of time and energy to marketing. Getting people to your shop or website is a priority, so it makes perfect sense to invest in resources that help to put your brand out there.

But what happens after they reach your store or website? Are you able to close the sale or do shoppers leave without buying anything?

If the vast majority of your customers don’t complete a purchase, then it’s high time to focus on conversion rate optimization.

To help you do that, we’ve put together a list of the top reasons people leave a retail store or website without buying anything. If any of these conversion-killers are present in your store or on your site, take action ASAP.

Why people don’t convert in physical retail stores

1. Poor (or no) staff interaction

If people walk into your store and they’re barely acknowledged, chances are, they’re going to walk right out. That’s why it’s so important to maximize staff interactions with customers.

Instruct your team to welcome every shopper who walks through your doors. Make sure they feel acknowledged and valued.

For best results, mix up your greetings and get creative. Rather than a generic “Welcome to the store” or “Can I help you?” consider saying things like “Who are you shopping for today?” or “What brings you to the shop?”

Another approach is to tell shoppers briefly about any promotions that you’re running. Something along the lines of, “Just so you know, all our jeans are half off” will do the trick.

2. Difficulty in finding what they’re looking for

Having a confusing or poorly organized store is a huge conversion-killer for brick-and-mortar businesses.

You need to make it easy for your customers to find what they need by keeping your shop tidy. See to it that your employees are on top of replenishing shelves and putting merchandise in their proper places.

The right signage can also help consumers navigate your store. If you have a large space, install easy-to-read signs to direct people where they need to go. You can also use signage to educate customers and provide more product information.

Check out this example from an Old Navy outlet store in California. To help shoppers find the right kind of jeans, they’ve added signage containing details about the fit and style of the various jeans, as well as the best body types for each one.

3. Your offers aren’t exciting enough

If your in-store promotions are failing to convert customers, find ways to spice things up. Rethink how you structure your promotions so you can make them more compelling.

One thing you could do is instill a sense of urgency. If you’re running a limited-time sale, make sure people know about it. Display signage or countdowns to tell shoppers how much time they have left to redeem your offers.

Check out this example from Parker Panache, a women’s fashion store. When Parker Panache ran a storewide BFCM sale, they created an SMS campaign to let their customers know to head in-store or online to receive 20% off:

Another idea is to have a sale ‘event.’ In addition to bringing people together, in-store events pave the way for interactions between customers and your staff. In turn, those interactions can open up opportunities for engagement and sales.

The lifestyle brand Soft Surroundings executed this well when they ran a sale in-line with their ‘Customer Appreciation Event’.

4. Long wait times

Long lines at checkout are another common reason why people don’t convert. A study by Omnico Group found that US consumers will leave a store without completing a purchase after just 8 minutes of waiting in a checkout line. British consumers will leave after only 6 minutes.

You can avoid losing customers with long lines by implementing smart employee scheduling. Identify your shop’s busiest hours and make sure you have adequate people on the sales floor and checkout counters to serve shoppers.

You can also alleviate long wait times by using mobile Point-of-Sale systems that let you process sales from anywhere in the store.

Conversion-killers on eCommerce websites

Now let’s talk about the biggest conversion-killers in the realm of eCommerce. If you’re running an online store, here are some of the top reasons why people don’t convert (and what you can do about them).

5. Your website is too slow

Page load speeds are everything when it comes to conversion. Research shows that a 1-second delay in page response can result in a 7% reduction in conversions.

There are several best practices for speeding up your site, and the right ones will depend on how your online store is set up. To give you a better idea of what you can do about site speed, here are Google’s recommendations for improving page speed and performance:

• Avoid landing page redirects

• Enable compression of website resources (images, text, code, etc.)

• Improve server response time

• Leverage browser caching

• Implement “minification,” which is the process of removing unnecessary or redundant data from your HTML, CSS, and JavaScript resources

• Optimize images by finding the right format, so they load quickly without comprising their quality

• Optimize CSS Delivery

• Structure your HTML to load the critical, above-the-fold content first

• Remove render-blocking JavaScript

6. Your site lacks credibility

While it’s true that consumers today are a lot more comfortable with online shopping, many still have trust issues when buying from websites, particularly if those stores aren’t well-known.

If you’re a small or medium retailer and don’t have widespread brand recognition yet, you can alleviate trust issues by setting up a pro-looking website. Nothing screams ‘shady’ like amateur designs and grammar errors, so see to it that your website looks sleek and professional.

You should also display lots of trust signals to tell shoppers it’s safe to buy from you. These could include security logos and certifications. Statements like ‘money back guarantee’ can also help shoppers feel more secure about their purchases.

And, if you want an extra boost of credibility, display logos of the top websites or publications that have mentioned your brand. Doing so offers third-party validation to put shoppers further at ease.

Beloved Shirts, a website that sells quirky apparel and accessories, does this well. In addition to having an up-to-date SSL certificate, they’ve added a ‘Verified Reviews’ badge, along with the logos of media companies and TV shows that they’ve been featured on.

7. Your site is difficult to navigate

In the same way that a poorly organized brick-and-mortar store can drive shoppers away, a website that’s difficult to navigate can kill your conversion rate.

Gather feedback from your visitors to see if they’re having trouble finding what they need. You can do this easily using tools like heat maps, recordings, feedback polls, and more. Check out Hotjar, a platform that offers analytics and feedback tools (heat maps, recordings, conversion funnels, form analysis, polls, etc.), so you can better understand your website visitors.

Once you have a clear idea of how people browse your site, you can use that knowledge to improve your site experience. For example, you can use visitor insights to streamline your navigation or improve the positioning of different elements on the page so people can find what they need quickly.

8. You don’t offer multi-channel support

Consumers often use multiple channels to browse and buy. It’s not uncommon for a shopper to start researching products on their phone, but wait until they’re at a desktop computer to complete the checkout process.

For this reason, it’s important that your site can support the multi-channel shopping journeys of your customers. See to it that people who browse your website on one channel can easily pick up where they left off when they use another device.

Speaking of which, you also need to ensure that your website is optimized for mobile. Google penalizes websites that don’t work well on the small screen, so your site could experience issues around organic discoverability.

Not to mention, websites that aren’t mobile-friendly are typically more difficult to browse, and that, in turn, negatively affects your conversion rate.

The Free Persistent Cart App can help you accomplish this. For starters, you can let your customers save their shopping carts so they don’t have to start the checkout process all over again if they switch devices.

9. There are no incentives or rewards to convert

Some shoppers need an extra nudge to complete the purchase. If you’re dealing with low online conversion rates, you may want to test different incentives and see which ones drive the most conversions.

Here are a few ideas:

Promotions – See if it makes sense to offer discounts or free shipping. Play around with conditional promotions such as, ‘Free shipping on all orders over $100’ to determine which offers are the most effective and profitable.

Rewards – If you have a loyalty program, you may be able to increase engagement and interactions from your members through various reward levels or tiers. For example, toothpaste brand, Grin Natural, offers the following rewards:

• 20 Points  – Free Travel Toothpaste

• 40 Points  – Free Toothbrush

• 40 Points  – Free Brushing Chart

• 50 Points  – $5.00 Off  

• 80 Points  – Free Cool Mint Toothpaste

• 85 Points  – Free Whitening Toothpaste

• 100 Points – 25% Off

The various reward levels not only add variety to Grin Natural’s program, but they also encourage members to continue earning points so they can redeem high-value perks.

Freebies – Got extra swag lying around? Use them as incentives to get people to buy. Giving ‘free gifts’ with every purchase can help sweeten the deal and convince shoppers to complete their purchase.

Giveaways – Have an irresistible prize up for grabs. Think of a product or experience that would appeal to your target customers, then use it as a hook to get them to buy.

OSMOSE put this tactic to good use when they ran a competition that encouraged customers to earn contest entries by shopping in their recent September 2020 sale.

10. Life gets in the way

In a lot of cases, people don’t convert because ‘life happens’ Maybe your customers were multi-tasking while browsing your site, perhaps something urgent came up, and they had to abandon their shopping cart, or they simply got distracted by a cat video.

This is where an abandoned cart recovery email comes in. As its name suggests, an abandoned cart email is a message that you automatically send after someone starts your checkout process, but leaves before completing it. These have proven to be effective. According to Get Elastic, nearly half of all cart recovery emails are opened; 13.3% are clicked, and more than one-third of clicked cart recovery emails result in a sale.

Abandoned cart emails play a significant role in getting shoppers to complete their purchases. That’s why if you haven’t set up an abandoned cart recovery email flow yet, it’s high time to do so.

Check out this example from speciality store, Ozzie Collectables. To re-engage customers who left items in their shopping cart (as well as those who haven’t stopped by in 30 days), Ozzie Collectables sends an Abandoned Cart automated email flow that reminds customers about the products they left in their cart. The email flow itself has an impressive 28% conversion rate and Ozzie Collectables have seen a 517% increase in revenue from all automations. With these results and more, it's obvious that their automations are a powerful marketing tool.

Note: If you’re still unsure about why your customers aren’t converting, consider actively gathering their feedback to gain insights. What encouraged shoppers to complete the purchase? What did they think of your store and staff? Knowing these things will uncover the reasons why people convert (and why they don’t). You can then use that information to refine your efforts.

The Nigerian shoe distributor, bCode does an outstanding job of collecting feedback. BCode sends customers a survey email and makes it easy for users to share their input. First they select if they were happy or dissatisfied with the service, then, depending on their answer, they answer a short survey detailing what aspects of the business they liked most. To incentivize participation (and future purchases), the company also rewards shoppers with loyalty points whenever they complete the survey.

Wrapping up

You’ve worked hard to get people to your website or store, the last thing you want is for them to leave without buying anything! Follow the tips we’ve outlined in this post to maximize your conversions.