Posts Tagged ‘lifelong customers’

The Value of Lifelong Customers (and How to Get Them)

Tuesday, September 23rd, 2008

I was in a strategy meeting today with the head of online marketing at an accommodation reservations company. They’re kind of a big deal, but for the last two years they’ve been getting at least three complaints a day from members of the public who have tried to use their system and been pissed-off because some of the prices they were initially being quoted weren’t, in fact, the prices they would be paying. (I won’t bore you with details, but basically, they were showing a list of hotel rates from a particular source, but they were often three days out of date).

The head of online marketing is a pretty switched-on guy, and he knew that pissing people off was the best way to ensure they never visited his website ever again (you don’t want to annoy any customer, but you especially don’t want to annoy tech-savvy early-adopters of your product who have the potential to tell hundreds of others). He’d been having trouble convincing the CEO that the system had to change because there was a lot of development cost involved, but finally, after a year of trying, he’d got the change approved and a new system was in place that showed accurate prices. He had been conviced that the change would result in more sales, but he was at a loss because after a few weeks, the conversion rate had barely shifted at all. The GM told him that he’d have to break the news to the tech team that the costly change he’d implemented hadn’t been effective and it had been a bit of a waste; he was disappointed.

“But…” I said.

“I’ll bet your returning visitor numbers are up.”

His eyes lit up: “Hmm?”

“That’s your metric.” I told him. “I’ll bet you any money your returning visitor numbers increase dramatically over the next few months because people are going to be much happier with your product and they’ll want to come back. They’ll probably even tell their friends. And once you get more and more returning visitors, your conversion rates are going to keep going up because they’ll stop shopping around as much.”

This was good news.

Very good news. I think he wanted to hug me…

If there’s one web metric you want to see curve upward, it’s your returning visitor numbers. More new visitors are great, but what you really want to see are more people coming back. 1,000 visitors who come back ten times are worth far more than 10,000 visitors you never see again.

The best way of getting them to come back is figuring out why they’d want to leave in the first place; think about what they’re NOT getting and give it to them. If the solution sounds expensive, think about what a lifelong customer is worth to you, over time, and I’ll bet you’ll change your mind.