During 2020 the ecommerce market went into overdrive. US online shopping saw ten years’ worth of growth in the three months up to April 2020. And it was a similar story across global regions as lockdowns hit and consumer habits changed.
For the first time, many customers turned to digital channels to track down products they had previously bought offline.
With these changes in consumer habits in mind, it might look like getting new digital converts is the answer to scaling up a business today. Customer acquisition is certainly still a big priority for a lot of brands, but returning shoppers are now more valuable than they ever have been, and the benefits associated with these consumers should not be overlooked.
Customer nurturing is a long-term strategy. It is about ensuring that your products, services and experiences are so good that those who have shopped with you before will return again and again in years to come.
So why is customer nurturing important?
Acquiring new customers is getting tougher and tougher. Research from Profitwell found that customer acquisition costs (CACs) grew by around 60% in the half-decade up to 2019.
With advertisers vastly increasing the proportion of their marketing spend that goes online, there’s now much more competition for the available inventory. What’s more, Google and social platforms such as Facebook, Instagram and TikTok are increasingly working to keep users on their channels and clicking on paid ads, rather than surfacing brand and retailer content in feeds organically.
This means marketers have to spend more on ads and content to convert increasingly ad-weary consumers. And with CACs climbing ever higher, the biggest brands—with the biggest budgets—are the ones succeeding in capturing new customers.
The pandemic has cast this into sharp relief
Globally, we’ve seen online leaders like Amazon shift Philippines Photo Editorfunds quickly to target in-demand products across paid search (not to mention that a staggering 74% of US consumers reportedly start their product searches on Amazon in the first place).
Here in the UK, leading supermarkets were able to ramp up their delivery and collection services almost overnight when the first Covid-19 lockdown hit. But across some product lines, it is nearly impossible to compete with industry leaders when it comes to acquiring new customers at scale.
With CAC costs and tough competition from market leaders—as well as the impending deprecation of the third-party cookie by Google—we can really begin to see why nurturing the customers you already have is so important.