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December 9, 2013

Converting First-Timers Into Repeat Customers

Posted by Mohan Kumar Krishnan (View Profile | View All Posts) at 10:04 AM


Changing the Retail Story: Rachel Shechtman at TEDxHollywood [Source: http://www.youtube.com/watch?v=fbnWY-swsK0]

Global newspapers and magazines pride themselves on being arbiters of grammar and usage. I read with delight that certain publications will now accept the spelling of email without a dash as well as the verb "to tweet." However, many still frown upon using modern terms like "friending" and "googling." Regardless of the acceptability of these terms, the influence that social networks and the internet in general has on shopper behavior is something that cannot be disputed.

Getting inside the heads of shoppers is a daunting task. If our enterprises could read minds, businesses would all be eminently successful. They'd know how to tap into the consumer subconscious with surgical precision. Until they are able to read minds, however, the closest thing that organisations have to really knowing their consumers is crossing the digital divide. I call it a divide because even though it's close, it's nevertheless a challenging thing to traverse. The challenge with digital interactions is in capturing the right data as well as in deriving the right insights automatically. This, when compared to how a sales person learns about shopper needs, interests and priorities during a human interaction, is reasonably complex.

The dynamics behind getting "friended" to a retailer or to "google" for a product is key to understanding how a first time shopper can be converted to a loyal, repeat customer. When potential shoppers search, read, rate or communicate about products, invaluable information is made available about how they think. Different companies approach this issue in different ways. Some create their own networks and create enough incentives for shoppers to join them. Others try to get intertwined to mainstream social networks by inviting shoppers to befriend them. Regardless of the method, the objective is to understand affinities and priorities - like affinities to categories or brands and priorities about price or time-to-delivery. The other important aspect that can be learned is the relationships between shoppers - which can be a very useful map.

A similar learning opportunity exists when a retailer engages with shoppers online making special, targeted offers in order to obtain more information about their buying habits. Each side of the transaction offers the other valuable data so that down the line the retailer can sell goods that are more in line with the desires of its customer base. If you think these situations smack of consumer empowerment, you're right. The digital consumer is in a position to communicate specific expectations on which a smart retailer or distributor should act.

But crossing the digital divide also means obtaining first-time customers with the help of careful research and data analysis. Sure, social networks gave rise to "friending" and search engines to "googling", but organizations of all stripes are using those same strategies to build their businesses. No longer does a digital business have to be a separate part of your organization. Equipped with the right tools and solutions, an enterprise seamlessly integrates the digital world into its operations.

So the next time you have an online shopping experience that makes you want to "friend" the store's brand, there's a good chance that the retailer is bridging that digital divide - and turning you into a repeat customer.

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