Order frequency rate is an important ecommerce metric that says a lot about your brand. The drive of people to shop again and again measures how loyal they’re to the brand, how essential your product is for their lives, how often they can afford it and if you’re a first choice or a substitute.
Huge brands like H&M and Zara churn out new models a few times a month exactly to drive frequent orders. Their strategy is to make people visit their (offline and online) stores often to see what’s new. No need for complex marketing campaigns, just the excitement of finding something interesting every time makes people buy more often. You don’t need to sell fast fashion, to do the same.
We’ve discussed why CLV matters and why you should optimize for it before. It is the most direct way to profitability in ecommerce and balancing CACs and the bottom line. By focusing on CLV and repeat purchase rate, you are able to offset acquisition costs over the customer lifetime and make a profit off them instead of relying on only one order.
A simple formula for customer lifetime value is this:
CLV = AOV x order frequency per month x lifespan
Also, more frequent orders:
It’s natural to want people to buy from you more often – it makes sure you stay in business. With an average customer lifespan of 3 years, you’d better fill up this time with as many orders as possible. There’s a difference between 1 order per year for 3 years (3 in total) and 1 order per month for 3 years (36 in total), right?
Now, let’s see how to make people buy more often.
Here are some customer retention tactics that drive not just repeat orders but shopping more often, increasing the order frequency rate.
Changing people’s habits happens slowly. If you push them to buy ball gowns every month, it probably won’t work – they just don’t need them. But you can increase your order frequency rate little by little, nudging every next order just a bit earlier than the last. So instead of buying every four months, your customers come every 100 days and so on.
Cohort analysis shows when people place their next orders (click to see larger)
Look at when they typically come to place their next order (a cohort analysis shows you this). Then, setup your reactivation campaign for a bit earlier than that to give them a little push using the fact that they’re almost ready to buy again. This way, your message is not untimely and unwanted, and converts much better. And you keep things spinning faster. 😉
These are back-in-stock alerts, low stock or price change on wish list items, etc. The point is to make people go back and reconsider the products they singled out before. Only, use those honestly and not to create urgency where there isn’t because customers already know too well all the tricks in the book. If they see the same item going on a third sale long after they got a “don’t miss your last chance” message, they won’t believe your brand anymore.
Instead of just 3 or 4 big holiday-related campaigns a year, run more, smaller ones targeted at different customer segments. This way, engagement is more relevant and conversion rates – higher. A few examples:
Package inserts increase customer satisfaction because they add excitement to the moment of unboxing. But they can stimulate the next purchase too – coupons with discounts for the next order with a limited-time validity are great. If your products allow it, also include cross-sell or upsell offers: what biscuits go well with that tea or a bigger box of the same kind, for example.
Another trick to drive order frequency is to have a game of sorts just like coffee shops often do: a rewards program with freebies for every 5 orders maybe or increasing discounts with every purchase.
Maybe you label VIP customers those who have a high CLV or many orders placed or just few but huge orders in value. However you segment them, it’s fine but they need extra care. They can be made to shop even more – we know they already like your brand so there’s no reason not to!
And don’t overlook: excellent customer service to make people glad they shopped from you.
Of course, the order frequency rate or time between orders depends on the nature of your products. Mattresses don’t sell very often, as Casper found out. Other categories like fashion and beauty could be shopped very often in theory (and our marketing dreams) but customers don’t think so.
You can drive revenue with additional products to get people to check your site more often.
If nothing else works, at least use the time to engage and nurture your customer base to stay top-of-mind. Content marketing is ecommerce’s best friend. Educate, inform, entertain and advise your target group so they come to you when they’re ready to order again. Your order frequency rate might not be directly impacted – or maybe it will. The more people know about a brand and more it complements their lifestyle, the more likely they’re to shop it.
Related: How DTC brands do content marketing
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