Our hypothesis why the third order is the tipping point between a VIP customer and a short-term repeat buyer


Different calibers of brand loyalty

It’s a select group of products that create the kind of tipping point moment where a loyal, enthusiastic customer with a high lifetime value is born.

A true leather jacket that gets softer with time. A trusty bag that’s taken on every adventure, beaten up, and cleaned to look good as new.

Your favorite pair of pants, that you own in 2 different colors.

I can probably name each product that’s made me feel that way on one hand. The count grows smaller as we look back from a period of the last 5 years to 10 years ago.

These items are special.

My appreciation comes back to a theme of items being worn in, becoming better over time, rather than worn out. I’m won over in the way a thoughtful design feature demonstrates its value, or the way a well-made garment can be worn for years with confidence that it’s still looking good after several washes.

And especially in the way that I can relax – knowing when I’m ready to buy something new, I can return to a brand that feels like an old friend. Confident they’ll treat me right whether it’s my 1st, 3rd, or 5th time shopping with them.

That’s the kind of experience that creates your VIP customer.

Someone who purchases 4-6 times, maybe more over the course of several years. Their brand loyalty is a different caliber compared to someone who purchases only 2-3 times.

As I guide the marketing for our ecommerce clients, I see this pattern show up consistently in their email lists. We have the data to identify how many times someone has ordered, and whether or not they engage with our marketing efforts.

It prompts the question: What makes someone stop returning after 3 orders? And what makes someone decide your brand is worthy of VIP level loyalty?

Products that Improve with Age

Take a look around your home. For many items, you’ve bought what was most convenient. Likely from Target, or Amazon; you don’t particularly care who made it. You needed something that would get the job done at a good price.

Then there are some things you’ve taken a chance on, trying out a new company that made an eye-catching product. There are the items you’ve saved up for, and you lovingly care for them so that investment lasts.

Maybe there are a few things that were given to you, and you were pleasantly surprised by how well those gifts fit into your daily life. Throughout each of these instances, the number of times you can identify several things you own made by the same brand is pretty low.

When it comes to the things you reach for again and again, your most-loved parts of your routine, those products will quickly demonstrate if they’re up to the standard of quality you expect.

Over time, nuances and flaws that were missed in the first few uses become obvious.

In the best case scenario, nuances make themselves known as unique attributes you appreciate in a product. Features and marks of craftsmanship that lead you to fall in love with that item again and again throughout the years.

At worst, those nuances reveal some products are made with higher quality materials than others. Or they show that what looked like a good design wasn’t that well thought out after all. Sometimes, wear and tear just ends up revealing an item’s poor quality after several months of wearing and washing.

Set customers expectations

How you present your products shapes the type of consumers that make up the base of repeat customers that keep your business running from year to year, month to month.

Language Matters: Courting VIP Customers

There are a lot of people in the world who want something trendy, something new. They want it fast, and they don’t want to spend a lot of money on it.

Why is that? In some cases, people enjoy shopping so frequently they consider most items to be relatively low value once the “new-ness” wears off. Maybe they don’t consider your product an investment piece. They could choose something like fast fashion because it appeals to their desire to find many options in their closet…

Or maybe it just comes down to they don’t think what you make is actually high quality. In that case, the answer is they don’t want to spend good money on something they fully expect to break within a few weeks of buying your product.

Then there are people like me.

Ones who identify as thoughtful and intentional people, who prefer to do things slowly, when possible.

We recognize different words that signal to us the things we’re looking for. Words like bespoke, thoughtful design, intentional, sustainable, resourceful, responsible, ethical, and fair trade.

Some of these are buzzwords. They’ve started to lose the weight of their meaning. But when you tell a story that’s true to what you care about, and true to what your products indicate your customer cares about…

Those words like “bespoke” and “handcrafted” and “thoughtfully designed” start to mean something tangible.

For a business trying to present itself in the world as a brand, as a maker of products and things people may buy… How we present our products, in large part, shapes the type of consumers that make up the base of repeat customers that keep your business running from year to year, month to month.

Consistent quality in products is important, yes. Conveying that quality is equally important. Otherwise, some may never buy your product, or learn how your standard of quality shows itself across the many products in your catalog.

Tactic within this strategy

When you get it right, email can make the difference between a customer for life, and a customer for a few months.

Why are VIP Customers so Special?

Your business thrives when it has VIP customers. These people are a step beyond a repeat purchase. They’re loyal, and they tell their friends about you.

Some might even call these customers Brand Evangelists.

These are the type of people who will stand in line all night, eager to be among the very first to have the latest iPhone, or gaming console. In the ecommerce world, these are the people who wake up at 4 am to shop a new collection that’s released by a fashion label based in Europe.

A study by Business Insider Intelligence found that repeat customers account for 40% of an e-commerce store’s revenue. The remarkable thing about VIP customers is that 80% of your revenue can come from just 20% of your orders.

So what’s an effective way for you to leverage that 80/20 ratio?

When you pair attuned email marketing with a consistent high quality range of products, they pack a powerful punch.

One of the primary email marketing benefits we’ve noticed is how it nurtures customer retention over the long haul. When you get it right, email can make the difference between a customer for life, and a customer for a few months.

At ebusiness pros, we’ve been helping ecommerce businesses with email marketing since Mailchimp was the most well-known tool. A lot has changed since then.

But one thing remains the same: earning the trust of that 20% who are VIP customers becomes easier when you send emails that are relevant, at a pacing they’re receptive to.

P.S. The Numbers You Want

If you’re curious about this dynamic when you convert repeat customers to VIP customers, here are a few relevant data points to expand on the examples illustrated above.

Ecommerce brands in general tend to have a higher rate of repeat customers than brick-and-mortar stores. This is because online stores typically have more data on their customers, which they can use to personalize their marketing efforts and target repeat customers more effectively. Additionally, the convenience of shopping online, allows customers to easily make repeat purchases, and quickly find the products they’re looking for. This is a key factor that increases the ratio of repeat customers.

Now, this gets more interesting when you pay attention to companies that sell luxury, high-quality products.

According to a study by the Luxury Institute, luxury consumers are more likely to be repeat customers compared to general consumer products. The study found that 75% of luxury consumers are repeat buyers, compared to just 45% of consumers of general products.

Another study by the consulting firm Boston Consulting Group found that luxury consumers are more loyal to brands than non-luxury consumers. The study found that luxury consumers are more likely to make repeat purchases. They’re also more likely to recommend a luxury brand to others.

Published: February 24, 2023

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