Loyal Users Or New Customers, Who's More Important? | Blog | Digivante

Loyal Users Or New Customers, Who’s More Important?

by Digivante, 5th September 2019

We all know that conversion rates are the key focus for any ecommerce site and in the increasingly competitive world of online retailing, where price comparison apps and product & pricing information is now even more readily available via the medium of mobile, the challenge of customer experience and retention is growing substantially.

Did you know that 81% of shoppers conduct online research before making big purchases? This is before they even visit your online shop!

Not only that, but a whopping 44% of consumers go directly to Amazon to start their product searches?
So, with this in mind, the last thing any ecommerce company wants is their customers visiting their site and experiencing issues that affect them being able to make a purchase and affect the visitor having a positive experience. Broken links, dead pages, sites that are not mobile-friendly, menus that cannot be opened and checkout issues are all (very common) problems that you have probably experienced yourself and then decided to shop elsewhere.


Acquisition or retention?

What is the impact of a poor performing ecommerce site? Most organisations understand attracting new customers is more expensive than retaining existing ones – but by how much? Interestingly, the average ecommerce business devotes more than 80% of their marketing budget to acquisition, forcing retention to fall by the wayside.

Yet the impact on revenue is substantial:

40% of an ecommerce store’s revenue is generated from only 8% of its existing customers
• After one purchase a customer is 27% more likely to return to your store
• Two purchases result in 45% likelihood and three equates to 54%!
• A repeat customer has a 60%-70% chance of converting.

It’s time to shift a little more focus on retaining existing customers and exceeding their expectations.

Repeat custom as a key revenue generator

Repeat customers spend more and more often. According to a study by RJMetrics, loyal customers who purchase from you on a regular basis are more profitable than your average customer.
Your top 10% of customers are likely to spend up to 3x more per order than the other 90% of your customer base, and your top 1% will likely spend up to 5x more than the other 99%. Your loyal customers are also more likely to recommend your site and stick with you during the tougher economic times.

According to Thunderhead and Populus, 25% of consumers will switch to the next best choice in the blink of an eye after just ONE bad experience and 45% will walk away from buying something if they experience long and complex payment processes.

Don’t underestimate referrals

This isn’t just about repeat business – it’s about customers who become your brand advocates; ambassadors sharing their experiences on social media, connecting with others and supporting the causes that they hold close to them. Give a great, issue free experience and your customers will help you increase revenue. We all like to hear from friends, family or colleagues that have great experiences – and are more likely to trust these recommendations than from a stranger on a review site.
It is estimated that 89% of your brand advocates’ friends and family will purchase brands recommended to them.

So, your loyal customers spend more, more often, recommend your brand, and stick with you during tougher economic times… It’s a no brainer then that you want to look after them.

The cost of a poor performing ecommerce site

£150million cost and an 8% drop in sales due to poor design and testing

Launching a new platform has inherent risks and updating apps or sites can impact significantly on your existing customer base if it isn’t done well. In 2014, one major UK High street retailer launched a new website at a staggering cost of £150million with a fanfare of excitement – yet, on certain key devices, their customers couldn’t register on the site or navigate around the new site, which was significantly different to the previous one. They also had trouble finding items and found there to be an erratic delivery of orders. Usability issues with filters and the general design of the site, navigation and lack of product information just switched their customers off.

This lead to an 8% fall in online sales vs double-digit growth previously. A two-year process, with 50 software developers and an internally driven testing process failed to deliver.

You’ve worked hard to get your existing customer base and you’re working hard to get new customers on board. Digivante will work closely with your Development team to identify the issues that are switching your loyal and new customers off. Whether you have a new release on the horizon and need it testing quickly or have an ecommerce site which adheres to a tight and frequent release schedule, Digivante can help you.

Web testing tailoring


Article by Digivante

Digivante have developed a digital performance platform to help you optimise your customer experience proactively to assess, test and accelerate your digital performance.

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