Thursday, December 17, 2009

Concentrating on existing customers instead of marketing towards new ones may be the key to increasing online sales

Every business wants to attract new customers, but are they losing sight of current customers?

A recent study by Verdict Consulting (a research company that provides analysis on a large variety of retail sectors, issues, geographies, and demographics) and Webloyalty (a company that offers a rewards and discounts program for over 450 online retailers) described actions online retailers should take to grow their business post-recession.

In the report (entitled "Internet Retail Trends 2010: Ten Actions For Your Business"), online sales have increased 13.3% in 2009. An increase is always great, but without a recession, sales were estimated to be $2 billion more. The report also states that in 2009, over 60% of shoppers will have used the internet to make purchases and will increase to an estimated 66% in 2012, but this is a much slower growth than the previous 5 years.

Neil Saunders of Verdict Consulting states that, "The recession has certainly caused online shoppers to alter their purchasing habits and online retailers are now also facing a severe slowdown in new customers. Our report suggests that retailers must turn their attention to driving repeat business — shifting marketing spend away from attracting new customers and instead focusing it on adding value for their existing customer base. Those retailers that try to win on price alone will be left behind but those that clearly offer extra value, and communicate it upfront to the customer will be ahead of the game.”

This shift from luring new customers to adding value for current customers will most likely change the web presence of many companies. suggests , "Coupons, recipes, dietary advice and frequent shopper exclusives are all relevant to savings and health and could be effective at making a retailer website and stores compelling sources for how to live frugally and live well. Online games and family-oriented contests can entertain and build continuity. Each of these enhance the marquee retail brand."

As a business owner, how has your web presence changed during the recession (if at all)? Do you plan to change your online marketing techniques to engage existing customers? Do you feel that the recession has significantly influenced your online sales?


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jacob said...
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