Chances are, you've already heard that keeping a customer you already have is cheaper than acquiring a new customer. According to Marketing Metrics, the probability of selling to an existing customer is anywhere from 60 to 70 per cent. On the other hand, the probability of making a sale to a new customer is anywhere from 5 to 20 per cent. Harvard Business Review, meanwhile, finds that it's 5 to 25 times pricier to get a new customer instead of just keeping one that exists.
Is it possible to increase the profit of a business without a new customer?
Acquiring new customers can be quite difficult. However, it's entirely possible to get your eCommerce business's profits to improve even without winning even a single brand-new customer. There are two essential ways for profit to increase. As any accountant for eCommerce will point out, you can decrease expenses and/or increase sales.
How can sales be increased without new customers?
Raise your prices
Work with a trusted ecommerce accountant on this one. While the concept sounds simple if not downright obvious, many people who own eCommerce stores tend to resist raising their prices. It's because they're worried they'll end up losing their customers to the competition. Unfortunately, a lot of these same owners end up making assumptions from their gut, with no data at all to back their claims up.
Run A/B tests on your products that are popular. This means half your visitors see the original price point, while the other half see the raised price. Measure the gross profit and conversion rate, then base things on those results. Even if your sales decline, if there's an increase in gross profit, that's a win.
Resell to customers that you already have
Reselling to your existing customers is a great step to take. When someone buys something from you the first time, it's a clear sign of something crucial: they trust you. That in itself is incredibly powerful, especially with so many entities and brands existing within multiple platforms online. No matter what it is that made this customer trust you, it's crucial to leverage that correctly and do your best to resell to them.
Group your existing customers based on what they bought from you. Once you've done that, send them relevant promotional messages through direct mail, digital retargeting, or even e-mail. As previously mentioned, make sure it's relevant; meaning, it should be related closely to the purchase they made.
For example, if you sell coffee makers or coffee machines, it's possible to send customers related accessories, parts and even coffee grounds promotions based on the coffee maker or coffee machine they bought.
There is truth in the belief that it's far cheaper to retain customers you already have than getting even a single new one. Profit can be increased in two fundamental ways: decreasing expenses and increasing sales. Sales can be improved through raising prices or reselling to existing customers.
In need of ecommerce accounting services? Contact The ECommerce Accountant today! We’re business advisors for online stores and influencers that can’t wait to help you.