Your webshop is bleeding customers and it is costly. That is the conclusion of a study, where we have looked at statistics on more than 2,7 million customer profiles across 100+ European webshops.

Very few things can compete with the satisfaction of watching a new order ticking in. Right?

Another successful transaction and once again a customer has found your webshop and your product catalogue interesting enough to reach for the credit card.

But what if I told you that for every time 4 of these customers converting in your webshop, only 1 returns...?

It sounds incredible, but (sadly) the numbers don’t lie.

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We have made a study based on Big Data covering the average purchasing cycle and customer life time value on more than 2,7 million customer profiles across more than 100 webshops in Europe.

And what it shows is that a majority of these customers (77,28%) are inactive, while only 17,68% of them are active. The remaining 5,04% are customers, who are slipping away, which means that they are in the risk zone of becoming inactive.

The most loyal customers buy beauty products

When looking more closely at the numbers from vertical to vertical, it becomes evident that webshops selling beauty and care products have the largest percentage of active customers (24,86%).

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At the other end of the scale, we find webshops selling interior design articles. These webshops have less than 10% active customers and a churn rate of a whopping 85,50%

Inactive customers cost millions

However, this is the point where you could argue that a high percentage of inactive customers is irrelevant as long as you keep attracting new ones…

But facts are that this is a very unhealthy strategy if you want to run a healthy e-Commerce store. It is basically a little like peeing your pants to keep warm (in lack of better imagery).

Kissmetrics thus report that the average value of a lost customer amounts to $243. And on top of that it is 5 times more expensive to attract new customers compared to retaining existing ones.

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In other words, there’s a good case to be made for customer retention when looking to boost online sales.

And yet, 44% of webshops still spend more of their resources attracting new ones - an approach that can create a significant competitive disadvantage in the long run, as e-Commerce businesses become increasingly better at optimising their revenue streams by making more loyal customers:

»It’s crucial that webshops start focusing more on getting their inactive customers back. First of all, there’s a lot of profit to be made here through increased revenue and marketing optimisation, but we can also see that customer retention is becoming an increasingly decisive competitive parameter in e-Commerce.«

Hans-Kristian Bjerregaard, Founder & CEO, Clerk.io

Get more of your inactive customers back

But rather than dwelling too much on all these doomsday prophecies, let’s instead focus on the positive side: You are sitting on a virtual gold mine of customer data and there is a simple way for you to utilise it to get your many inactive customers back where they belong.

alt By using a segmentation tool that enables you to target customers according to specific interests, past purchases, loyalty and life cycle status, you can tailor campaigns to reactivate that majority of your customers, who’ve slipped through your fingers.

Simply put, segmentation will allow you to be relevant in every recommendation you make to your individual customers through emails and ads, which also means that you will markedly improve your marketing ROI.

And next time an order ticks in, you can feel slightly more satisfied knowing that this order is no single-deal case, but more likely the first of many from that customer.