3 Reasons You Need to Market to New Customers


30 days.

That’s how long you have to capture a first-time customer’s loyalty, and maximize their lifetime value.

That’s a small window for a big opportunity. And it’s becoming an increasingly important window to hit. [1]
The days of easy customer acquisition are ending. Customer acquisition costs via Google, Facebook, and others are increasing. Meanwhile, the Baby Boomer generation is retiring, and Millennials are focusing on newer business models that will reveal themselves via mobile devices over the next five years. These trends conspire to shrink the available pool of newly acquired buyers.
— Kevin Hillstrome, President MineThatData

Newly acquired customers represent the biggest opportunity for brands and retailers to improve their customer retention rate. But to retain new customers, you have to convince them to stay.

You have to show them you care. That you value their business.

In other words, you have to keep marketing to them.

Let’s take a look at the three main benefits of marketing to new customers — and some tips for doing it well.

1. Increase the Likelihood of a Second Purchase

Getting customers to make that first purchase isn’t actually the hardest part of marketing. It’s getting them to make a second purchase.

According to RJMetrics, only 32% of customers make a second purchase within the year. [2]

But once they do, the likelihood they'll buy again increases to over 50%. Getting that second purchase can go a long way to retaining customers and increasing your customer’s lifetime value. You just need to get there quickly.

RJMetrics found that the window for effectively engaging a first time customer is within the first 30 days. Marketing to new customers during those first 30 days with the goal of getting a second purchase can significantly improve your customer lifetime value — not to mention your sales.

So how do you do it?

  1. Incentivize ways to stay in touch. You can’t assume they’ll join your subscriber list or loyalty program just because they bought your stuff. You need to establish value first — what’s in it for them to join? What will they get out of it? Then offer new customers an incentive to join — like a discount or chance to win a prize.

  2. Keep communications open. Poor customer service is the number one reason customers abandon brands and retailers. [3] Keep customers informed and up-to-date on any information they need post-purchase — like shipping information, or your return policy.

2. Build Brand Loyalty

We all know brand loyalty can have a powerful effect on sales. You've seen the stats:

  • Acquiring new customers costs 5X as much as retaining a current one [4]

  • A 5% reduction in customer churn can increase profitability by 25 - 125% (depending on your industry) [5]

  • 80% of your future profits will come from 20% of your existing customers[6]

It’s clear brand loyalty is important. But how do we go about establishing it? Especially with brand new customers?

The simplest way is to create a great experience and show them you value their business.

68 percent of customers abandon a brand or retailer because they perceive you are indifferent to them. [7]

Your customers spend a ton of time researching you and your products before they commit to a purchase. So return the favour. Start to build a relationship with them. Show them you care.

Some effective ways to do that:

  1. Personalize your messaging. If they purchased online, you know what they bought. Use that data to offer complimentary recommendations. For example, if a customer bought red lipstick, send her a blog article on “10 New Looks With Red Lips” — and maybe a coupon for the other products featured in the blog post. The key is to be helpful not salesy.

  2. Encourage them to use your loyalty program. Your loyalty program should reward customers who give you their business, so make sure to establish the value right away. Show new customers why they should use your program. What’s in it for them? Then start creating habits of engagement so they use your program repeatedly.

3. Create Brand Advocates

It’s no secret that consumers trust other people more than they trust marketers.

Word of mouth is the primary motivating factor behind 20-50% of all purchase decisions [8]

Encouraging new customers to refer their friends can help you grow your customer base organically. But more than that, turning new customers into brand advocates can have a positive impact on your bottom line. Brand advocates tend to have a higher lifetime value — and even spend more than a typical customer.

Brand advocates spend on average 2X more than your typical customer.[9]

So how do you turn your new customers into brand advocates?

  1. Just ask. It seems simple, but if you have a great customer experience and product, simply asking for customers to share it with their friends and family can often be enough.

  2. Offer referral incentives. When people help your company out, be sure to reward them. This not only makes it more appealing for customers to refer their friends, but helps cement a relationship with your brand by recognizing their contributions.

  3. Encourage reviews. Reviews are another form of word-of-mouth that have a major impact on purchasing decisions. Ask consumers to review products they just bought. Or if you’re struggling to get a decent review volume, try running a contest that rewards customers who review products with chances to win a prize.

The Bottom Line

You can’t afford to ignore new customers.

69% of a customer’s first year spend comes within their first 30 days as a customer. [10]

The first month is critical — not only for maximizing a new customer’s sales value — but also for establishing a relationship with customers that starts to build brand loyalty & advocacy.

Be helpful and personal. Reward them for joining your email list or loyalty program. Encourage them to refer their friends and review your products. And be sure to reward them when they do.

This is the final post in the our path-to-purchase blog series. Catch up on the other posts below:

How to Inspire Customers and Influence Their Purchases

How to Educate Consumers Without Boring Them to Death

How to Easily Influence Consumer Decisions at the Purchase Stage