Internet Finance Tips | 4 stages to help you quickly increase your repurchase rate

1. Definition and calculation of repurchase rate

The repurchase rate refers to the number of times consumers repeatedly purchase the brand's products or services. The higher the repurchase rate, the higher the consumer's loyalty to the brand, and vice versa.

There are two ways to calculate repeat purchase rate:

(1) The number of times each customer who has purchased a product repeatedly purchases the product. For example, if 10 customers purchased a product and 5 of them made repeat purchases, the repeat purchase rate is 50%;

(2) Calculated by transaction, that is, the ratio of the number of repeat purchase transactions to the total number of transactions. For example, in a certain month, there are 100 transactions in total, among which 20 people have a second purchase, and 10 of these 20 people have a third purchase, then the number of repeat purchases is 30 times, and the repeat purchase rate is 30%.

Nowadays, companies generally adopt the first algorithm.

2. The importance of increasing repurchase rate

Once users' consumption habits are formed, their risk of churn will be significantly reduced, and their commercial value will be further enhanced, thereby greatly increasing the user's lifetime value and bringing considerable profits to the company.

In the case of a low repurchase rate, it is necessary to analyze the entire process of user acceptance of the product. Because the entire process of users accepting your product actually has multiple sub-stages. If something is not done well at a certain stage, it will affect the product repurchase rate and other issues.

Marketing experts Hua Shan and Hua Nan once talked about this in the book "Super Creativity is Super Symbol": Consumers and users can be further divided into four roles. These four roles correspond to the four stages and four scenarios of product consumption. The four scenarios are before purchase, during purchase, during use, and after use.

(1) Before purchase: The consumer has not yet arrived at the purchase location, but the consumer may have seen product information from advertisements, heard product recommendations from friends, or seen someone using the product.

(2) Purchasing: refers to the process of consumers shopping in stores or on e-commerce websites.

(3) In use: This is very easy to understand, and refers to the process of users using the product.

(4) Post-use: refers to what happens after the consumer uses the product, such as whether he will share it with others or post comments on a website or social network.

Consumers play four different roles in these four scenarios: audience, buyer, experiencer and communicator.

Therefore, when we want to increase the repurchase rate, we can start from these four stages.

3. Methods to increase repurchase rate

1. For the “pre-purchase” stage — audience

Before becoming users of the product, these consumers may be the company's target users or potential users. For this group of people, we can use the following two methods to convert them into users of enterprise products:

(1) Through advertising information. Ye Mao mentioned in his book "16 Keywords of Marketing": Dan Schultz, a famous American advertising expert, believes that the role of good advertising is like a fog, which slowly penetrates into the hearts of consumers and leaves a lasting and deep impression in their minds. This impression may not always appear in people's minds, but once consumers face the product, they will develop a sense of familiarity, a kind of joy similar to meeting an old friend whom they have not seen for many years. No matter who you are, you are born with varying degrees of insecurity. Successful advertising lies in its ability to eliminate this sense of insecurity, break down unfamiliarity and barriers, and make consumers feel instantly friendly when they come into contact with the product.

So from the early days of Youli.com and Jiboxi's land grabbing, to PPMoney's heavy investment in traffic, to Jiedaibao's 2 billion yuan investment and its massive entry into CCTV advertising, in order to quickly acquire traffic and win a certain level of brand awareness, traditional TV advertising, targeted advertising, subway and other brand advertising are still the best choices. For example, after E-Zhubao spent a lot of money on brand advertising, its Baidu search index reached 30,000, and Jiedaibao reached 80,000.

(2) Through introduction by friends. The friend invitation method is the most effective, lowest cost and highest quality way to acquire customers. Only high-quality product content, combined with an attractive invitation reward mechanism, can this method achieve the maximum effect.

2. For the “Purchasing” stage—buyers

For financial management apps, this group of users refers to the process of downloading and registering the app and making purchases. To promote user order conversion, we need to do well in the following aspects:

(1) Credibility. Users must ensure the safety and reliability of the financial management APP before putting their money into it for management. Therefore, its security must be reflected in the brand, fund custody, product interface, etc.

(2) Improve the quality of products. This is the basis for a financial management APP to survive. Only by ensuring the quality of products can it continue to operate .

(3) Increase the variety of products as much as possible. Different groups of people should be divided according to their risk tolerance, asset level, etc., and financial products with matching levels should be provided.

(4) Personalized recommendations based on big data. When there are too many financial products, it is difficult for users to find products that suit their needs and they are easily churned away. Therefore, personalized recommendations can be made based on user behavior, user information and other data.

(5) Effective operation strategy. After a user makes their first order conversion, you should continue to segment the group for operations and manage it based on their life cycle. In the four stages after the customer’s first purchase, namely the active period, silent period, dormant period, and churn period, different “awakening strategies” are used to ultimately facilitate at least 3 to 5 repeat purchases and cultivate user stickiness.

At each stage, different strategies are used:

1) Active period (0-30 days): During this stage, the frequency of contact must be guaranteed, but promotions and discounts are not the main focus.

2) Silent period (31-90 days): During this stage, the frequency of contact must be ensured and a small amount of marketing stimulation must be started.

3) Dormant period (91-180 days): During this stage, the risk of user loss is very high. It is necessary to control limited contact and win them back through big discount activities.

4) Churn period (more than 180 days): Users in this stage are basically lost, so you should reduce contact with them and only use them during big promotions.

3. For the “in-use” stage—experiencers

For Internet finance and financial management APPs, this group of users refers to those who purchase financial products and obtain the returns they bring. The income here can not only be the income from the financial product itself, but also include other income obtained by continuously improving the membership level after purchase.

Lufax has built a membership system that divides membership levels according to transaction amounts and gives each member different service permissions. Through repeated purchases, the user's level continues to improve, which will also lead to repeat purchases next time.

4. For the “post-use” stage – disseminators

There are only two reasons why I can actively spread products or activities. One is that it is a good product and worth sharing; the other is that I can gain considerable benefits after sharing.

Therefore, we can start from the following two points to cultivate more communicators, thereby reducing customer acquisition costs and allowing the product to enter a healthier operating ecosystem.

(1) Provide high-quality financial products. Different groups of people are divided according to their risk tolerance, asset level, etc., and financial products that match their levels are provided.

(2) An invitation mechanism that is attractive enough.

IV. Conclusion

The importance of repurchase rate is self-evident, but if you want to increase the repurchase rate, the construction of the product itself is the key, and the means of product operation are auxiliary.

With the development of the Internet, operational methods will certainly become more and more diverse, but fundamentally they still have to rely on the product itself. We must not only keep pace with the times, but also pay more attention to the business itself, consider it based on user usage scenarios, and deeply understand the value of repurchase rate, so that we can make the right decisions to increase the repurchase rate at the right stage.

Source: ITFINLAB (ID: ITFINLAB)