(Source: https://pltfrm.com.cn)
Customer retention and repeat purchases are crucial components in building a sustainable business on Tmall or any other e-commerce platform. Their importance can be understood from multiple angles:
- Cost-Efficiency: Acquiring a new customer is often more expensive than retaining an existing one. Marketing costs, advertising expenses, and promotional offers aimed at new customer acquisition usually surpass the costs of retention strategies.
- Predictable Revenue Stream: Repeat customers provide a more predictable revenue stream. They are familiar with your products, trust your brand, and require less convincing to make a purchase.
- Higher Average Spend: Loyal customers tend to have a higher average order value compared to first-time buyers. They are more likely to trust product recommendations and upsells, leading to bigger baskets and more frequent purchases.
- Positive Word-of-Mouth: Satisfied repeat customers are more likely to refer friends and family, offering organic growth through word-of-mouth marketing, which is especially important in the Chinese market where peer recommendations hold significant weight.
- Feedback and Insights: Repeat customers provide valuable feedback, allowing you to improve your products and services. They can offer insights into product development, features they’d like to see, or even new product categories they’re interested in.
- Reduced Risk of Negative Reviews: Happy, loyal customers are less likely to leave negative reviews. In the age of online shopping, where reviews can make or break a product’s success, this is crucial.
- Enhanced Brand Credibility: A strong base of repeat customers boosts brand credibility on Tmall. New customers often check the number of followers a store has, as a high follower count indicates trustworthiness and product quality.
- Support During Sales Events: During major sales events like Singles’ Day (11.11), having a loyal customer base ensures a certain level of sales and can help in clearing inventory.
- Higher Lifetime Value (LTV): The total monetary value a customer brings to your business over the entirety of their relationship with your brand is significantly higher for repeat customers.
- Platform Algorithms: Platforms like Tmall use algorithms to determine the visibility and ranking of stores. Stores with higher engagement and repeat purchase rates are often favored, leading to better organic visibility.
In conclusion, while acquiring new customers is essential for growth, nurturing and retaining existing customers is the key to sustainability. Brands should balance their focus between these two facets to ensure long-term success on Tmall and other platforms.
PLTFRM is an international brand consulting agency that works with companies such as Red, Tiktok, Tmall, Baidu, and other well-known Chinese internet e-commerce platforms. We have been working with Chile Cherries for many years, reaching Chinese consumers in depth through different platforms and realizing that Chile Cherries exports in China account for 97% of the total exports in Asia. Contact us and we will help you find the best China e-commerce platform for you. Search pltfrm for a free consultation!
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