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on February 24, 2022 by Drew Kramer in Marketplaces, Technology & Data

Guide: Acquiring and Retaining Customers on Amazon in 2022

Amazon is home to 200 million paying Prime members and continues to grow rapidly. Earning new-to-brand customers and keeping them coming back for more is a major key to any brand’s success on Amazon. See how you can acquire and retain customers for your business with our guide below.

What is customer acquisition and retention?

Simply put, customer acquisition refers to earning the business of a customer who has never before purchased a product from your brand (hence the term “new-to-brand”). Retention refers to customers who make repeat purchases within a rolling 365-day period.

Customer Acquisition on Amazon

Did you know that most sales on Amazon take place with new-to-brand customers? WBX Commerce data shows that on average, 70% of sales on the marketplace are attributed to new customers, while 30% are from repeat buyers. For CPG (consumer-packaged goods) brands, the split tends to be about 60% new customers and 40% repeat — still a major leaning to the former. So with such a large percentage of sales coming from new-to-brand customers, it’s important to know how to increase customer acquisition so your brand can stay competitive.

Identify and acquire new customers on Amazon

Step 1: Identify an audience of potential customers who haven’t purchased a product from your brand before. You can use Amazon Market Basket Data to identify two products that are often purchased together and target those buyers with ads through the Amazon DSP to ensure they’ve never bought from your brand before.
Step 2: Target and serve ads to that potential customer pool. If you know these shoppers are searching for or purchasing items in your brand’s category, program search-based ads that appear in their search results. (This step may require a lot of testing to see what works best for your brand.) Be sure to leverage advertising via Amazon DSP as well.
Step 3: Measure sales generated to ensure they are from new customers, not repeat ones using Amazon Marketing Cloud data.

Amazon Marketing Cloud offers exclusive data points to measure new-to-brand customers, including customers acquired through sponsored products and the sequence of media (ads) delivered to shoppers before they convert.

Illustrative quote "70% of sales on the marketplace are attributed to new customers."

Optimize the customer journey

Provide a seamless shopping experience with an optimized customer buying journey. If your brand sells on multiple marketplaces or combines brick-and-mortar and ecommerce experiences, consider using omnichannel data to track how customers interact with your product pages, and tailor the experience so they feel comfortable and confident in making a purchase.

Tip: While your Amazon store isn’t going to be as branded as your Shopify or Woocommerce page, you can and should make the most of your Amazon presence by maintaining consistent branding. A+ content and storefronts are a crucial part of building brand awareness on Amazon.

Personalize the Amazon customer experience

Reaching potential new customers is a great opportunity to showcase other relevant products in your catalog. If your brand sells coffee, consider serving an ad for one of your creamers. Amazon Market Basket Data and halo data play a big role here. This information helps you cross-promote products to maximize customers’ average order value.

Customer retention on Amazon

Illustrative quote "30 of sales on teh marketplace are attributed to repeat buyers"

Offer discounts for subscriptions to keep Amazon customers coming back

Promotions and discounts are a great way to win new-to-brand customers and keep them coming back for more. Even though these come at an initial cost to your brand, the investment can maximize the lifetime value of the customer through repeat purchases. WBX Commerce helps brands minimize the effect of promotional discounts with our optimized fulfillment services that keep costs lower than the competition.

Retarget customers in a timely manner

WBX Commerce’s proprietary business intelligence tool WBX Insights allows us to measure total sales generated from new-to-brand customers over time, not just from ad-attributed sales. This data helps develop strategies for earning more new customers and retargeting existing buyers for repeat sales.

Ensuring that you are retargeting customers with ads is critical to customer retention on Amazon. When retargeting ads, it’s important that the ad is relevant and recent — it should appear within a typical purchase window that would be natural for customers to come back for a subsequent purchase. For instance, if your product is typically purchased once a year, like holiday decorations, you would only expect to re-acquire that customer once per year. But if your brand sells a 12-pack of drinks, that repeat purchase window would be closer to 30 days.

Subscribe and Save provides an incentive for customers that have a high lifetime value to get a price break. It’s a crucial part to any consumable product’s success on Amazon.

Optimize shipping and delivery

Want to keep customers happy? Shipping and delivery are huge components here. Customers want their packages to arrive quickly, and even though brands don’t have much control over how carriers perform, it’s important that orders are processed and out the door as quickly as possible.

WBX Commerce uses a carrier-agnostic approach to get the best rates for our client partners. We operate out of strategically located fulfillment centers across the country to keep inventory closer to customers (with 99.9% two-day delivery coverage for the U.S.), which passes more cost savings to brands.

Allow for returns

It happens. Customers occasionally need to return products, especially in an online shopping environment. Consumers may change their minds, accidentally buy the wrong size or just prefer to try the product in person before committing to keeping it. It’s important that customers have confidence that if they no longer want or need the product, returning it will be simple. Allowing returns shows that the brand is confident in its products and is willing to back that confidence with a money-back promise. Take stock of your brand’s returns management process. Is it seamless? If there’s room for improvement, reach out to a WBX Commerce team member today.

Ready to grow customer acquisition and retention on Amazon?

WBX Commerce offers a unique solution to unite sales and fulfillment data so ecommerce brands can seize every opportunity in the value chain. Our in-house data science team has access to Amazon Marketing Cloud and leverages data from WBX Insights to help brands gain and keep more customers while saving costs with smart advertising and efficient fulfillment strategies. Ready to take your Amazon business to the next level? Contact us today.

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