This blog was last updated on January 17, 2022
By Zach Kamphuis, Vice President of Business Development at Commerce7
October, November and December represent the best direct-to-consumer (DtC) sales months for many wineries. With the 2021 holiday season now behind us, how can wineries capitalize on the new customers gained through the past months and avoid falling into a post-holiday sales slump for DtC wine?
Capitalizing on all the first-time customers created during the holiday season is one of the best ways to beat the post-holiday season slump. Through this article, I will talk about three ways you can drive more revenue from your newly created customers.
1. Push for the second sale
Now that you’ve created new first-time customers through the holiday season, it’s critical that you push for a second sale with these customers in Q1. In ecommerce, the second sale is the most important sale you’ll have with a customer. If you can convince a customer to purchase a second time, the chances they purchase a third, fourth or even fifth time increase dramatically, and their average lifetime value will increase to significantly higher than for a first-time buyer.
- Customers who have made a single purchase have a 27% chance of buying again.
- Customers who have made two purchases have a 45% chance of buying again.
- Customers who have made three purchases have a 54% chance of buying again.
Aside from having an ever-increasing chance of purchasing again, repeat buyers also tend to have larger average order values and refer more customers to your brand. Thus, the second sale is very important to increasing a customer’s lifetime value, upping the chances they become a club member, and can even help with new acquisition by sending you more referrals.
The best time to push for the second sale is in Q1, as 60% of second purchases occur within 100 days of the first. After 100 days, the chances of a customer making a second purchase drop below 10%.
The first way to beat the post-holiday sales slump is to target all your newly acquired first time customers in Q1 (within that critical 100 day time period from their initial purchase) and push them to make a second purchase.
2. Tailor the second sale offering
Now that you’re committed to pushing for the second sale, let’s talk about the best type of offers to encourage a second sale. A great offer is a personalized offer.
Because you’re targeting customers who have already made an initial purchase with you, when you push them to purchase a second time, you can personalize your offering to them based on the data you’ve collected in the first purchase.
Offering your customers personalized product recommendations based on what they previously purchased leads to a lot of great outcomes for your brand. For example, emails with a personalized offering have:
- Higher open rates
- Higher conversion rates
- Lower unsubscribe rates
The results can be dramatic, with an average 760% increase in email revenue from personalized and segmented campaigns compared to generic campaigns.
3. Discounted or included shipping
Now that you’ve piqued your customer’s interest with a personalized offering, you need them to convert and actually purchase that offering. One of the easiest and most impactful ways to get more ecommerce conversions is to offer nearly-free or heavily discounted shipping.
When it comes to ecommerce orders, the #1 reason why a consumer abandons a cart and doesn’t complete an order is shipping costs. Forty-nine percent of consumers have said they’ve abandoned a shopping cart due to the price of shipping. If you want to push for the second sale, one of the best things you can do is offer nearly-free or included shipping in your promotions.
Ninety percent of consumers would shop online more often if given the option of free shipping, and 24% of consumers said they would spend more to qualify for free shipping. Shipping wine is expensive, but there are some ways you can offer low-cost or included shipping without breaking the bank.
Build the cost of shipping into the price of your product
If you typically sell your wine for $50 a bottle with $20 shipping, instead charge $70 a bottle online with $0.01 shipping. Countless ecommerce studies have shown that consumers value free shipping far greater than they value the equivalent dollar value in product discounts. If you build the cost of your shipping into the cost of your products and offer included shipping to the customer, you’ll sell more online.
Use included shipping as an incentive
Offer included shipping once customers reach a certain order value. This is a great way to motivate customers to increase their order value, and the larger orders help offset your shipping costs.
To summarize, many wineries see a slump in sales after the holidays, but there is a lot that can be done to offset this. One of the best things to do is to push for a second sale with all the new first-time customers created over the holiday season.
The second sale is the most important sale for ecommerce as it dramatically increases the average lifetime value of the customer, the chances they become a club member, and the chances they refer your brand to their network.
It’s best to push for the second sale within the first 100 days after a customer’s initial purchase, and offering personalized product recommendations along with included shipping will ensure you get as many second sales as possible.
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Zach Kamphuis is the Vice President of Business Development at Commerce7 and works with wineries to assist in creating great customer shopping experiences through all direct-to-consumer sales channels. Zach believes that customer experience is the primary reason why a consumer chooses a brand, and that in order for wineries to meet consumer expectations, they must adopt a more customer-centric approach to selling direct to consumer.
Commerce7 is a certified Sovos ShipCompliant partner—one of the 60+ integrated partners that makes Sovos ShipCompliant a central hub of the direct-to-consumer and three-tier beverage alcohol ecosystem.
Sources:
https://blog.smile.io/repeat-customers-profitable/
https://www.forbes.com/sites/blakemorgan/2020/02/18/50-stats-showing-the-power-of-personalization/
