We, at Hello Retail, pride ourselves on the information we are able to provide our customers with, so we can jointly create great experiences for their buyers.
If you missed Part I
In the past few months, we heavily focused on the significance of lifetime value for your buyers and how it influences your business. We also looked at brands creating loyal customers within certain industries, and if you missed these articles, do not hesitate to revisit them.
And now... Part II
This week, we are revisiting the hot topic, with focus on two other industries: Bike and Health & Fitness! As we did in our previous articles, we are going to dive deep into our findings for brands that create high LTV, as well as repeat customers for these businesses.
A prelude to the industry trends figures:
- LTV is the total value we see during the entirety of a customer’s relationship with a business, who also purchased the specific brand as their first order.
- Median LTV indicates the typical LTV of the majority of the customers.
- From Avg. is how the average value is compared to the average in the industry. It always refers to the column to the left, namely, LTV or the No. of Orders.
- No. of Orders is the (average) number of purchases that the same customer who first bought the specific brand makes. If the value is 3, it means that the customer tends to come back and place 3 orders in total.
Bike
Most brands with the highest LTVs within the Bike industry are selling whole bicycles. They are, of course, more expensive, and customers return less than the industry average.
Thus, we would highly recommend looking into creating more retention so that one-time buyers turn into repeat customers.
This could prove to be a challenging task for this industry, but it also allows you to get creative and try different strategies:
- You can send a small ‘Thank you’ gift with each bicycle you sold e.g., water bottle or sports socks. This will surprise your buyers, and they are very likely to spread the word and come back to you.
- If your online store offers a wider selection of products, not only limited to bicycles, you can send customers newsletters with coupons or discount vouchers, which they can use to buy accessories.
- Launch a referral program- your one-time customers get a coupon or ‘credits’ for each new customer they bring to you. This will lower your customer acquisition costs, increase your revenue, create loyal customers, and bring new ones.
When we look at brands with the most returning customers, the majority are offering bike parts and/or accessories, which are, of course, cheaper than a whole bicycle. Customers are more loyal to your shop and often return to it if they first bought one of those brands.
While it is true that the LTV of these brands may not be as competitive as the bike brands, remember it is the margin, rather than the total price, that counts.
Tip of the Day!
The brand ‘Look’ created both high lifetime value, as well as repeat customers, so if it is part of your store’s inventory, we would recommend advertising it more.
Brands with highest LTV
- Industry-wise average LTV €380 and No. of orders: 1.88.
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Brands with most returning customers
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Health & Fitness
In terms of LTV for the Health and Fitness industry, most brands perform similarly to each other. The difference, however, can be observed when it comes to repeat customers.
Brands that we can recommend focusing advertising efforts on are Nicorette, Vitals, Vivani, Membrasin, and Priorin. This brand selection performs well both in terms of generating high LTV as well as a higher number of return customers.
Retention is generally high within the Health and Fitness industry, as many brands offer supplements and products that promote wellness. Most products come at affordable prices, so we recommend you focus on increasing the lifetime value of your customers:
- Maintain a knowledge base: educate your customers on the importance of intake of certain supplements such as vitamins, minerals, etc.
- Look into seasonality to make informed decisions for your marketing: some products are more important than others during certain times of the year e.g. vitamin C & D during winter, probiotics.
- Set up a subscription model: allow your customers to easily subscribe for automatic reorders of the products they love and use daily! The recurring revenue stream will benefit your store and improve LTV. You can also get creative and include one or a few product samples in each repurchase package as a gift. Doing so will expose more of your products, and they may end up in your customers’ upcoming purchases.
Brands with highest LTV
- Industry-wise average LTV €131 and No. of orders: 1.95.
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Brands with most returning customers
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Want more data?
See our Audience solution
If you are interested in learning more about a specific brand on your online store and how it performs compared to the average for the industry, do not forget to use Audience!
Select the segment ‘Products bought the first time’, choose the attribute brand and then pick the brand you want to learn more about. Audience will supply you with information about the LTV, average order count, average order size and more!
