Loyal customers are worth 10x their first purchase
Understand how your customers behave
Customers are your most valuable asset. Getting them through the door is just a start; ensuring they come back is the key to your success. On average, loyal customers are worth at least 10 times more than their first purchase. But for most businesses only 20% of first time customers eventually become loyal customers. That’s a huge missed opportunity because loyal customers don’t just spend more, they’re also the most profitable. In fact, a small improvement in customer loyalty can increase business profits by as much as 95% in store.
BUT FOR MOST BUSINESS ONLY 20% OF FIRST TIME CUSTOMERS BECOME LOYAL CUSTOMERS.
What is the customer lifecycle?
Every customer that walks through your door is on a journey, we call that the customer lifecycle - from the first interaction they have with your business to the last. Sometimes that journey is short, other times it’s long. Figuring out how and why your most valuable customers became loyal is the key to getting more of your new customers to follow the same path. We’ve created a simple framework to help you understand and measure your customer lifecycle. It divides your customers into 4 groups - we call them customer lifecycle segments.
- First Time, are new customers that just made their first purchase.
- Repeat, are recently returning customers who've shopped at least twice.
- At Risk, are either First Time or Repeat customers that haven’t been back in a while.
- Dormant are At Risk customers that haven’t been back in a very long time and may be lost.