Returning customers

As a D2C business, once you’ve got a customer to buy and convert (hopefully by reading the information on conversion optimisation here); what next? Having gone to all the expense and trouble of getting a customer to buy in the first place, getting them to come back and buy again and again is essential – but what can you do to help make this happen? Assuming that your product is good, it arrived on time, was as ordered and the customer is happy of course (though if you use some of these tactics well, and you establish a strong brand, you’ll get away with a lot more than you would otherwise).

From a purely economic standpoint, offering them some gain if they re-order is a good incentive. Rather than encouraging customers to buy initially with a 10% off coupon, it could be beneficial to – after a certain time without a re-order – send them an email offering 10% off if they order again. This discount has more value to you as a retailer this way, because rather than risking the downside of a customer who was going to buy anyway on your site now getting money off (and you therefore losing profit, a topic I’ve covered in detail in the book), in this instance you can wait a certain period of time, beyond the point where a customer might reasonably have used your product and have re-ordered, and remind them that you exist with a purely economic benefit. This may be the difference between losing the customer and getting them for a second time – the more times they buy, the more data you have, the more chance they have it becoming a habit. If there’s a time-limit to this discount offer, even better; we feel the pain of losing a benefit twice as much as we do in gaining it (a tenner gained is a twenty lost), and so rather than lose out on a 10% off we may be pushed into buying.

Beyond economic benefits though, each of which has an impact on your bottom line, how else can you engender a feeling of reciprocation in your customers, one that encourages them to return and buy? Meaning is disproportionately conveyed by us doing the things we don’t actually need to do. A present to a loved one out of the blue conveys more meaning that one on a birthday when you need to do it; that fiver than Granny pushed into your hand with a hushed finger over her mouth felt like contraband as compared to the tenner in the birthday card, and a homemade present, no matter how crap, is better than one in the shop particularly if we can see the time spent making it. It signals that the giver is not viewing the transaction on purely economic terms; I give you this, you like me. We instead recognise the value of the transaction in terms of what has been sacrificed to make it happen, this coupled with the fact that it didn’t need to be done at all only makes it more valuable.

A great example of this is Derek Sivers’ famous email from CDBaby. When Sivers started CDBaby back in 1998 his ‘order confirmed’ email was the standard “Your order has shipped today. Thank you for your business.” How many of you have that standard Shopify/Woocommerce response on your site? 

He changed this email to a more interesting:

“Thank you for your order with CD Baby!

Your CD has been gently taken from our CD Baby shelves with sterilized contamination-free gloves and placed onto a satin pillow. A team of 50 employees inspected your CD and polished it to make sure it was in the best possible condition before mailing.

Our packing specialist from Japan lit a candle and a hush fell over the crowd as he put your CD into the finest gold-lined box that money can buy. We all had a wonderful celebration afterwards and the whole party marched down the street to the post office where the entire town of Portland waved “Bon Voyage!” to your package, on its way to you, in our private CD Baby jet on this day, Friday, June 6th.

I hope you had a wonderful time shopping at CD Baby. We sure did. Your picture is on our wall as “Customer of the Year.” We’re all exhausted but can’t wait for you to come back to CDBABY.COM!!

Thank you once again

Derek Sivers, president, CD Baby

the little store with the best new independent music”

This was so successful that bloggers wrote about it and people sent it onto their friends – Sivers himself says this email was instrumental in introducing thousands of people to CDBaby. At least part of this is because he took the time to do something he didn’t need to do; people recognised that and valued it accordingly.

With this in mind there are simple, small things we can do which will end up with more perceived value than the 10% off. A financial discount reminds a customer that they are an entry on our spreadsheet; let’s remind the customer that they are a person, one whom we wish to make a connection with and value more than just the money they spend with us. Personalising their standard emails is a good start, but how about a handwritten note saying ‘Thanks for your first order, Rob!’ Or one saying “Hey – this is your fifth order with us – have some goodies to say thanks” with a few free samples. An email from you personally a week later asking how everything was, and if they had anything they’d like you to know. 

Packaging – how does this get delivered? I’ve ordered F&B products from websites which looked wonderful, only to find it’s been delivered in a plain envelope with nothing else. Or worse – a fresh-looking product arrived in a sealed transparent bag with some printing on it, entirely unrelated to the product. (this is an issue more for brands who existing pre-Covid as a B2B brand and then switched offering without considering the new customer). The sandwich shop near my office has wrapping made with their logo and they hand stamp each paper bag. It’s nothing major, but it elevates the whole product in my estimation. Remember, this is about feeling – it makes the product feel more special, more valuable, and therefore makes me feel like the sort of person who deserves this special stuff. 

More interesting – could you partner up with another D2C brand? Maybe if you sell curries you could partner with an alcohol-free beer brand. For every order above £X, you add in some of the partner’s beer for free. They get a promo opportunity, you get a really happy and surprised customer. Maybe that becomes an offer on one or both of your sites; I’ve never really understood why more D2C companies don’t do this by the way – it’s good to be thinking about how you could sell ‘something that happens to the customer’, not just a product. A meal isn’t just a thing I eat, it’s bigger than that. 

What else? It depends what you’re selling, but if you’re selling big bars of chocolate some smaller samples of a new range ‘not yet for sale’ has huge perceived value to the customer. They feel ‘in the gang’, there’s a connection there, they’ve got something nobody else has and if this is coupled with the opportunity for feedback on the new flavour even better. You care about what they think, and they’ve been picked by you because of their taste. 

If you’re selling baby food then a free bib would be lovely; if its cocktails maybe some free umbrellas for your drink. None of this should be advertised or mentioned on the site – the customer isn’t buying the product to get their free bib – it’s a surprise and something that didn’t need to be done. Beyond an emotional feeling of connection, this act of simple generosity can also inspire a more ‘bottom line economic-y’ feeling of direct reciprocation; a customer given a gift from you is less likely to go to a competitor and more likely to buy again.

These things take time and effort – which is exactly the point – but I think if you were to calculate just how much profit you were losing on a 10% off voucher (as a start, it’s much more than 10%) and understand what that meant as an hourly rate when compared with the time and cost to throw in a small free gift or write a quick postcard, the personal touches would come out on top. And I bet they’d encourage people to return, tell people about you, spend more next time and forgive the odd mistake.