Repeat Business is Online Retail’s Core Customer Metric

In a study released recently by MarketLive, research confirms the importance of repeat business to online retailers.  Many online (and off line) retailers focus strictly on acquiring new customers, often in the mistaken belief that volume is the name of the game.

This work indicates that it’s the size of the online basket that makes all the difference.  New customers buy 10% less than existing customers, and are less engaged with the retailer and the buying process in general.

Not surprisingly, marketing budgets for online retailers reflect this disparity, with more than half being spent on acquisition, and only about 20% being spent on retention or loyalty.

Yet another reason why knowing what’s best to measure is more important than traditional marketing methods or metrics.