August 24, 2010 | Ecommerce, Marketing | Andrew Kamphuis

Generating The Second Order

Last December I wrote a post that the most important time in a customer relationship is the three months following their first purchase. I want to revisit that and state that the most important order is a customer’s second order.

A visitor walks into your tasting room, tries some of your wine, and places an order. They then leave your tasting room. Now what? How do you take this new customer and turn them into a repeat customer?

In preparation for this post, I ran some numbers. Here’s how important the second order is. We analyzed wine sales across our system and found:

55% of customers ordered a single time.
Of the 45% of customers who ordered two or more times, these customers make up 82% of the sales volume.

Here are some more numbers from About.com

Repeat customers spend 33% more than new customers.
Referrals among repeat customers are 107% greater than new customers.
It costs six times more to sell something to a prospect than to sell that same thing to a customer.

Getting a person to become a repeat purchaser is important, but how do you move them from a onetime customer to repeat purchaser?

Recognize first time customers as an important market segment. Treat them differently (treat all your customers well, but for your first time customers – why not recognize them with an email such as ‘Thank you for your first purchase’)
Seek customer feedback early and respond quickly. Follow up the first sale within 10 days. Try and pinpoint any problems immediately.
Come up with new ideas for first customers to get them to come back and place the second order. Especially if the first order was in the tasting room, create an offer to drive them to your online store.

One example might be to send an email thanking the customer for their first time purchase and have them rate the wine and their purchasing experience. For their efforts reward them with a coupon for a second purchase.

Whatever strategy you implement, remember to test and measure the results (and be sure to share them with us).

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Comments

Mike Duffy

@ Aug 25, 2010 at 9:29 AM

http://blog.winerywebsitereport.com/

Great to see numbers, Andrew. You're in a unique position to be able to provide them. At the same time, this isn't rocket science. Why do wineries have a hard time with this sort of follow up? Is it just that they have "too much to do?"

Andrew Kamphuis

@ Aug 25, 2010 at 9:46 AM

http://www.vin65.com

Mike - it's a combination of 'too much to do' and/or they don't have the CRM tools that would integrate this style of marketing into their regular workflow.

Amos Benning

@ Sep 15, 2010 at 3:55 PM

Frankly, I believe there is an over reliance on CRM tools. Oddly enough these systems have very little to do with the "customer". Instead, they serve the organization requirements more than they serve the customer. Since buying decision have a huge emotional component, these systems fall well short of delivering the quality of "customer experiences" that results in repeat or sustain business. Those organizational failing to make an emotional connection with their prospects stand a very little chance of enjoying repeat business. With CRM tools, the systems dictates customer interactions...how many time when contacting customer service, we hear the phrase "according to our systems"...ostensibly, the customer is being told " our system is more important than you are"

Andrew Kamphuis

@ Sep 15, 2010 at 8:33 PM

Amos - great point - it is about the customer experience more than the systems. I do think your systems can work too improve your customer experience (but some people let them get in the way of a great customer experience).

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