About a decade ago, an unlikely rap star named Rich Boy emerged from Mobile, Alabama. Rich Boy aka Maurice Richards was studying mechanical engineering at Tuskegee University. During freshman year he learned mixing from a friend and soon began writing, producing and recording his own rap songs.

In 2001, a producer named Polow Da Don was visiting a radio station in Mobile. Rich Boy got a demo tape in Polow’s hands. They stayed in touch and 5 years later, produced a hit song called Throw Some D’s (Dayton’s wheel rims).

He sold 300K records. The music video is considered by some to be one of the best hip hop music videos of the 2000s.

But sadly for Rich Boy, his later songs were not as popular and he became a one-hit wonder.

The same one-hit-wonder phenomenon can happen in e-commerce when stores grow without focusing on increasing customer lifetime value.

Your business feels successful because you have a steady stream of orders.

But when most orders are from new customers, your profitability is not growing. The acquisition and servicing costs of new customers are very high, sometimes so high that retailers end up losing money.

That’s why it’s key to convert new customers to repeat customers.

Each time a repeat customer places an order, they increase your revenue without increasing acquisition costs. Which means more profits for you.

The fastest way to increase customer lifetime value is to offer rewards through a customer friendly platform like RewardCamp.

Sign up for a trial at www.rewardcamp.com

Share This