Increase Your Repeat Business
Using Repeat Visitor and Recency Analysis
It is widely acknowledged that the
cost of winning new customers is often significantly higher than the cost of retaining existing
customers. So too on the web.
Although it is still vital to attract new visitors to your website, the unique value of a repeat
visitor should not be ignored. A repeat visitor can be a more engaged visitor, as they have made
the effort to return to your website after a previous visit.
Analysing your repeat visitor activities is a great investment. It can provide you with some
valuable insights into a loyal segment. From analysis of their past patterns of behaviour, you
can use behavioural targeting to deliver more appropriate content and offers to drive more,
higher value conversions. Then you can measure the impact, target more closely and measure again.
Business Goals
- To increase profits by retaining current customers and gaining repeat business, since the acquisition of new customers is known to be expensive.
- This of course does not negate the goal of acquiring new customers, necessary as well to avoid the risk of going out of business should existing customers be lured away by a competitor.
Sample Affinium NetInsight report showing a Visitor Retention breakdown
Background Information and Common Terminology
The concept of first time visitors versus repeat visitors is easily understood, but actually quite difficult to determine technically for a website. At a minimum, a unique and persistent cookie is required to recognise return visitors. With that, a web traffic analysis system can lookup a visitor's identification in the existing records in its database to determine whether a visitor has visited before. Intelligent website analytics systems like Affinium NetInsight will detect that a first time visitor's first page request will not yet contain a cookie, because the cookie is only issued by the web server during the processing of that first request. Nonetheless, there remains a significant margin of error due to the fact that visitors may delete cookies repeatedly, visitors may use more than one computer to visit a website, or cookies may expire. If the website is a registration website, that margin of error can be reduced using a user name for visitor identification. Even user names, however, may change over time.
The term recency refers to the amount of time that has passed since a visitor's
last visit or last purchase. Recency is known among database marketing experts to be the
strongest indicator that a visitor is prone to becoming a (repeat) customer.
Frequency refers to the number of times that a visitor has visited the website
(or purchased) in a given time frame. Frequency is an indicator of loyalty and propensity to
purchase, but not as strong an indicator as recency. Finally, stickiness is a
compound measure that combines the average recency, frequency, and reach for the website.
Most Common Challenges
- Visitor identification, whether through cookies or user names, is not an exact science due to aforementioned challenges.
- Even registered-users only websites have a public portion which requires no registration. A
visitor may only obtain a cookie or login during part of their visit. This makes sessionisation
and visitor recognition impossible for less sophisticated website analytics systems.
Required Information Sources
- A persistent cookie or website login name by which online visitors can be identified when they return to the website.
- For recency analysis, the date of the last visit or last purchase of each visitor.
- For frequency analysis, a record of each visit from each visitor along with the visit data,
so that frequency can be computed for arbitrary time periods.
Solutions for Monitoring Repeat Visits or Purchases
Affinium NetInsight includes an optional web server plug-in which can set persistent cookies that uniquely identify visitors, should such cookies or user names not already be enabled for a website. Affinium NetInsight will make the best possible assessment based on the data available to determine whether a visitor has visited before or is visiting for the first time. With this information you can, for example, monitor the trend of visits to the website similar to the example below.
Sample Affinium NetInsight report showing New vs. Repeat Visitors
In addition, Affinium NetInsight's database contains the visit history for every visitor. From that, the Visitor Retention Summary can calculate the frequency of visits for any time period. As can be seen in the image at the top of this page, you can apply filters for specific visit criteria, for example to calculate the frequency of visits with purchases.
Investigating Recency and Frequency
In order to determine the most recent visitors or purchasers, you can filter Affinium NetInsight's Visitor, Cookie or User Summaries for any time frame, such as the last three days. You can export the list in order to target campaigns to this promising segment of visitors, assuming that they have previously provided their contact information, and that you store the contact information along with the visitor's persistent cookie or user name.
Using Affinium NetInsight with a business intelligence reporting tool, for creating more advanced reports, you can gain even more insight. The example below analyses a site's stickiness, segmenting visitors by the lengths of their relationship with you (coloured bars) vs. the recency of their last visit, i.e. retention.
Sample of a Business Intelligence report which has been integrated with Affinium NetInsight
Action Items
- Measure repeat visits continuously, as you work to build lasting relationships.
- Focus repeat business campaigns on the most recent visitors and customers.
Next Steps
For more information on our advanced web analytics tool Affinium NetInsight, please visit www.sclanalytics.com/products/netinsight or alternatively call us on +44 (0) 1293 403636.
