- It is five times more expensive to acquire a new customer than it is to sell to an existing one
- Harvard Business Review says that a 5% increase in customer retention could lead to 95% profit increase
- Some major retailers spend as much as $200 to acquire each new customer
It is far cheaper to retain a current customer than it is to acquire a new customer and new research shows how package inserts can help encourage repeat purchases. An effective strategy to stimulate second purchases is soon after the first purchase. In the past, before the days of GDPR, e-commerce retailers would send customers follow up emails—thanks for shopping with us, hope you like your items, perhaps you’d like this item, too—in hopes of achieving a follow up sale. But now, with even loyal customers opting out of newsletters, new product announcements, and upcoming deals, online retailers—including those selling via B2B channels—need new tactics to keep in touch with their customers and to turn them from one-time buyers to loyal, repeat customers. This article summarizes a new report by eDelivery and Internet Retailing that goes into detail on customer retention and making old ideas new again.
The thrill of unboxing
By now, most of us have seen ‘unboxing’ videos made popular with consumer electronics and video games; especially with Special Editions and brand new models of phones, tablets, and watches. Everyone wants to know, What’s in the box, so they turn to YouTube and watch early adapters and bloggers open a brand new box, peek inside, and start pulling out the goodies for close examination. According to Google, the amount of time people spend watching unboxing videos is the equivalent of watching the film Love Actually more than 20 million times. By adding an insert to the box or pallet of items, you are adding to that experience as further explained below.
Replacing the in-store experience
Online sales are expected to account for 13.7% of total retail sales in 2019 and to reach 17.5% by 2021. With more and more shopping done online, and customers receiving their items in shipping boxes instead of shopping bags, retailers are losing that in-person connection. No longer do sales associates get a chance to say, “See you again, soon” with a friendly smile. That warm and fuzzy moment can be replaced with a package insert. This might include a customized message thanking them for their current purchase; the message could also make suggestions for future purchases and/or encourage folks to find them on social media. From a marketing perspective, a customer isn’t “won” until they have shopped with you a second time. Migrating a consumer from being “a purchaser” to being “a customer” is all about driving second and subsequent sales.
How to do inserts right
According to eDelivery and Internet Retailing, to make a purchaser into a customer, the package insert slip has to do a few of the basics.
Choose your message
It’s important to know what the customer wants to hear. For small business retailers selling bulk liquidation items, that means tailoring your message to a reseller who is looking to continuously source new inventory for their store. Your messaging could include how often you list new auction lots, what to expect in those auction lots, and what type of quality and condition the buyer can expect. The insert could also include related items that you also liquidate in addition to what they purchased. For example, if you sell major appliances and a buyer just bought a truckload of scratch and dent dishwashers, they might also be interested in your scratch and dent washing machines.
A study by the Direct Marketing Association suggests that the response rate for a generic leaflet is around 1%. That’s hardly worth hiring a creative agency or working with a freelance marketer. However, in this day and age of data collection, if a customer bought from you through an online marketplace, that means you most likely have their name, geography, and language. There’s no excuse for not starting off your insert by saying, ‘Thank you for shopping with us, [insert name here].’ It sounds simple and basic, but using this information makes the interaction more personal for the consumer.
According to a 2013 study, attractive packaging stimulates impulse purchasing—i.e., I’m so excited and happy about this purchase I want to make another! For SMB retailers who need to liquidate in bulk, it might be difficult to make a pallet full of returned and overstock items look pretty, but with the right stacking and taping, a messy box of cluttered items could look neat and appealing.
Make it easy to rebuy
When a customer buys from you through B-Stock, you know they are a professional reseller who is continuously sourcing new inventory. Your package insert should remind them that you have regular auctions on B-Stock Supply and to check back often.
Packing the slip
To actually place the insert into the shipping boxes, you can have a staff member go around the distribution center to insert the slips before it’s taped up on and placed on the truck.
B-Stock operates the world’s largest network of B2B liquidation marketplaces, including our marketplace for SMB sellers and buyers, B-Stock Supply.