Top Performers in Multi-Channel Experience Revenue Gains of 33 Percent

Over the past two years, retailers have felt the sting of a contracting economy and the reluctance of shoppers to part with hard earned dollars. However, MarketLive's most recent quarterly Performance Index, a survey of over 100 retail sites, found that merchants are starting to experience small gains and show signs of recovery. The study reveals average revenue gains of 2% from Q2 2008 to Q2 2009. For "Top Performers," which represent 44% of retailers in the study, the numbers look even better. These retailers experienced average revenue gains of 33% in the same period. It's no surprise that much of that growth is coming from loyal customers.

A loyal customer is a valuable asset. Research shows that loyal customers convert at a rate nearly 160% higher than new customers and spend close to 13% more per order than first-time buyers. Yet many retailers miss important opportunities to understand this critical audience.

Today's most effective retailers rely on analytics to derive actionable insights about their customers. These insights allow retailers to effectively communicate and captivate customers with relevant, highly personalized offers that entice them to buy again and again. They help retailers engage customers effectively, at every touch point. The result is improved conversion, loyalty, and revenue.

To earn loyalty, merchants must continually present products and offers using preferred communications and onsite interactions. Tracking and analyzing consumer behavior after the first purchase reveals opportunities for significant additional revenue:

- First visits represent 63% of orders and 57% of revenue
- Second visits represent 22% of orders and 19% of revenue
- Subsequent visits represent 6% of orders and 5% of ongoing revenue

To win repeat business, merchants must track and analyze customer behaviors and preferences and market to them individually. Analyzing both onsite and off-site behavior can provide useful insights about customer preferences and interest -  ultimately allowing retailers to offer the right products via preferred offers. One-to-one offers entice customers to stay in contact with retailers, and establish preferences and shopping habits. One-to-one marketing is essential to building loyalty and analytics are essential to one-to-one marketing. Several new technologies and approaches are now making true consumer intimacy possible.

Merchants are now tracking and analyzing an average of three attributes per customer. These include:

- Geography
- Unique user profiles
- Referral keywords
- User-defined preferences
- Previous session activity
- Affinity groups
- Clickstream activity
- IP addresses

Because a significant number of purchases occur soon after the first site visit, it is important to begin enticing customers back to the site while the initial shopping experience is still fresh. Simple tactics can facilitate this:

1) Encourage email subscription signups on the 'thank you' page after the order and in the order conformation email. Analyze the thank you page to assure optimal performance.

2) Include discreet promotions within transactional email messages. These emails are a valuable asset as 67% of online consumers report they are open to receiving promotions along with notifications.

3) Use event-triggered messaging and offers after the purchase. Keep in touch with customers through offers designed to keep them engaged with the site.

By employing a range of advanced analytics and delivering increasingly personalized experiences and offers, multi-channel retailers will build customer loyalty and ultimately increase revenue.

Mark Pierce is CEO of MarketLive, a e-commerce platform and services provider for retailers. Statistical information contained in this story can be further explored in the MarketLive Performance Index volume 8, Analytics-enabled Strategies for Multi-channel eCommerce, available for free at www.marketlive.com.