The Storytelling Fix For One-Time Buyers
Several years ago, Case-Mate had a problem.
Most of their customers only bought one phone case.
Like most brands, their margins on customer acquisition were low. And they knew that if they were going to scale profitably they needed to bring more new customers back for repeat orders.
But how could they get someone to buy more than one case?
After countless campaigns and promotions, they finally came up with an idea that changed everything.
Here’s a couple of recent posts from their Instagram… see if you can figure out what they did:
See, Case-Mate realized they had a belief issue.
Till then, people treated phone cases as a “utility” accessory.
Something you buy to protect your phone.
Which of course, means that once you have one, you wouldn’t need to buy another until you got a new phone.
Case-Mate realized that until their customers believed that they needed more than one case… they’d never be able to consistently generate repeat orders.
So they came up with a concept called “Outfit Of The Day”.
This was a narrative that your phone case is a critical piece of your outfit. That it is just as important as your shoes, or your watch, or your jewelry.
And that if you really care about fashion…
…you ought to have a collection of phone cases to perfectly coordinate your outfits.
They began to promote this idea in their advertising, in their emails, their social accounts… everywhere. And it skyrocketed their repeat purchase rate and catapulted them to the top of the phone case space.
If you run an e-commerce business, this is one of the most important marketing lessons you could ever learn.
The reality in 2020 is that it’s nearly impossible to scale a profitable e-commerce business without a dialed-in retention strategy.
As Case-Mate discovered, you have to be able to get new customers back for a second purchase.
And the best way to increase your repeat purchase rate isn’t a tactic or discount. It’s to create a strategic narrative that makes repeat orders the natural outcome for your target customer.
In this guide, you’ll learn why your increasing your repeat purchase rate has such a profound impact on your eCommerce store’s profitability.
Then we’ll explore five battle-tested storytelling frameworks that top brands are using to turn new customers into repeat buyers in record time.
What Is Your Repeat Purchase Rate?
Your repeat purchase rate is one of THE most important KPI’s you should be tracking in your eCommerce business.
It measures the percentage of your customers who have made a second purchase from you over a defined period of time. And it is one of the best ways to determine how well your retention strategy is working.
To calculate it, you need two data points:
1. Number Of Customers With More Than One Purchase
This is the total number of customers who have made more than one purchase in a specific period of time. You can analyze this over any period, but I’d recommend looking at an entire year so you have enough data.
2. Number Of Unique Customers
This is the number of unique customers that purchased from your store in a distinct time frame. Note that this is about counting people. Not number of orders.
To calculate your repeat purchase rate, all you need to do is divide (1) the number of customers with more than one purchase by (2) the number of unique customers.
When you write out this equation, it looks like this:
# of Customers That Purchased More Than Once / # Unique Customers
Luckily, if you’re on Shopify, they actually calculate this metric for you. You can learn how to access it here.
Why You Need To Increase Your Repeat Purchase Rate
You’d be hard pressed to find an eCommerce brand that isn’t focused on customer acquisition and making front-end sales.
But what most owners don’t realize is that the vast majority of their front-end sales are not profitable.
Don’t believe me?
Let’s take a look at the unit economics on a typical eComm store’s first purchase:
A lot of brands (and their digital agencies) would be happy with this 200% ROAS.
It’s tempting to cheer yourself because you’re getting “$2 out for every $1 you put into ads”…
… all while forgetting the other costs (shipping, COGS, merchant fees, discounts) that cut your contribution margin down to nothing.
(And that’s not even accounting for fixed costs like rent, subscriptions, software, and more)
The reality is that most front-end orders are not profitable. Even for the most successful brands.
But want to know a secret?
You don’t need to make a profit on the front-end to have an insanely profitable business.
There’s a much better way to think about scaling.
And it’s by focusing on customer retention.
A frequently quoted study by Bain & Company and Harvard Business School found that increasing customer retention by just 5% can increase profits by 25-95%.
One of the main reasons for this is that when you bring a new customer back for a second purchase, your cost of acquisition (CAC) is typically much lower:
Look at how insane a difference that is!
If you use a low-cost marketing channel like email to bring customers back for a second purchase, you’re effectively cutting out your advertising CAC. Which can dramatically increase your profit margin on the repeat order.
Now let’s talk about what this means at scale.
In the graph below, each store has 100 customers buying a $10 item each month. The light purple store is retaining 5% of those customers each month, and the dark purple is retaining 10%.
This is why you need to increase your repeat purchase rate.
By building a retention marketing program that consistently turns new customers into repeat buyers, you’ll grow faster and more profitably.
Want A Shortcut For More Repeat Buyers?
You'll Get 3 "Fill-In-The-Blank" Email Templates You Can Swipe And Adjust To Skyrocket Your Repeat Purchase Rate
Now that you know the incredible difference your repeat purchase rate can have when scaling, let’s talk about how to do it.
99% of other content out there will recommend tactics like offering a discount, dynamic content on the site, etc. And these are all great tactics.
But as Case-Mate realized, consistent repeat purchases are ALWAYS driven most by a brand’s strategic narrative.
Here at 100 Celsius, we call this narrative the “Active Journey Narrative”, which refers to the path customers take to becoming an “active”, repeat customer.
In the next section, you’ll learn 5 powerful story-telling frameworks that you can use to significantly increase customer retention in your business.
The 5 Repeat Buyer Story Frameworks
1) The "Complete Your Look"
2) The "Life-Long Journey"
3) The "Paradigm Shift"
4) The "Subscriber And Save"
Can you create a subscription or continuity program for your products? If so this one might be a great one to consider.