CASE STUDY: 22:1 sales to cost ratio through more repeat business
We frequently get asked, "why do companies buy rais? What do they get?" There are a number of reasons why. But one of the main ones boils down to the fact that we help our clients get more repeat business. For the vast majority of e-commerce businesses that sell direct to consumers, customer acquisition is expensive and hard. Hanging onto these customers and getting more repeat business from them lowers that cost of acquisition as the average lifetime value of a customer increases.
Many argue that a disproportionate amount of time, effort and money is spent on acquiring customers and not looking after them. Time is the biggest enemy here, which is why rais has been useful to our clients in the way it automatically enables our clients to talk to their existing customers in a more relevant way. This gets more repeat orders.
So we decided to look at how our clients repeat rates have gone up since we've started working with them.
Here are the results:
We calculate repeat rate in a very simple way. We take a time period and count how many customers bought during that time period. We then count how many customers bought two or more times within the same time period; repeat customers. We express divide this count of repeat customers into the count of all customers and that provides us with a repeat rate. We then do the same thing for a comparative period from the previous year, prior to when the client started using rais. This removes any seasonal effects.
All of the clients in the graphs above have used rais to create more targeted marketing campaigns, predominantly through email marketing.
The incremental sales revenue generated by these 6 clients during the study time periods was £227664. The cost of rais for these businesses, over the study time periods was £10,188. So rais has helped generate sales revenue, 22 times more than the cost. So for every £1 spent on rais, £22 was generated in topline sales. We should probably put our prices up! :)