One-time buyers are 'major problem for marketers' 

Thursday, March 10 2011 by Kate Billinghurst

There is a growing challenge that has "huge implications on profitability and customer loyalty" if it is not identified, according to a leading expert.

This week, Loyalty Builders claimed that the hardest thing for companies to cope with is the issue of one-time buyers. This demographic, which will place one order and never return for another sale, is something often overlooked in favour of general sales figures.

In its latest study, Loyalty Builders found that on average, 41 per cent of a customer population is comprised of one-time buyers and certain companies have a rate as high as 89 per cent for a single purchase.

Given the highly-competitive nature of the web and customer loyalty, managed emarketing and website promotion must be in tune with getting repeat visits, as the organisation warned how the gross margin from a single purchase does not cover acquisition costs and makes these one-timers "highly unprofitable".

Chief executive officer and founder of Loyalty Builders Mark Klein said: "Historically, the problem has been swept under the rug and we're here to bring it to the forefront of every marketer's attention.

"In our eleven years of helping direct marketers, we've learned how to size and solve this problem. As you might expect, the information you gather when sizing the problem is the key to the process you'll use to solve the problem."

He set out a three-step process to reduce one-time buyer problems and get a second sale. Firstly, analysis of data is important as companies already know more than they may think through existing transaction data.

This valuable information then allows businesses to segment the optimal customers to target, know the best ways to distribute marketing communications, as well as what products and services to offer.

Finally, true one-to-one direct marketing campaigns should be "highly individualised" for each recipient as this produces "significantly higher returns and response rates".

Earlier this month, Nielsen discovered that grandparents are too large and influential a consumer segment to ignore, as any organisation not targeting these individuals with search engine optimisation providers could lag behind their rivals.

Living Streams "Improving clients' profitability through better use of the internet".