by Tom Kaneshige

Why Last-Minute Holiday Shoppers Are Worth Less to You

Dec 23, 20142 mins
E-commerce SoftwareMarketingSmall and Medium Business

If you’re in the ecommerce or digital marketing business, this is a big time of the year for you. But when it comes to those last-minute shoppers, you should take their money but don’t spend a lot of time trying to nurture them to become loyal customers. Here’s why.

holiday shopping
Credit: Thinkstock

Retailers and digital marketers love the holiday season. It’s a time when new customers open up their wallets and spend money on frivolous things that they really can’t afford. From Black Friday to Cyber Monday to the final days leading up to Santa’s epic midnight journey, the retailer’s merry chorus is “Let sales ring.”

But holiday shoppers, especially those looking for gifts at the last minute, aren’t the kinds of customers who retailers should put a lot of time and resources into courting in the future. These folks are probably buying gifts for other people, and so there’s little hope turning them into loyal customers.

Last-Minute Shopper Are Worth Less to You

In fact, last-minute shoppers who buy gifts between December 4 and December 23 typically spend less money and have a lower retention rate than Black Friday or Cyber Monday shoppers, according to a study by predictive marketing cloud vendor AgilOne, based on 5 million different customer profiles.

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The average lifetime value of a customer acquired outside of the holidays is $142, compared to Black Friday shopper’s $137 value, Cyber Monday shopper’s $128 value and the last-minute holiday shopper’s $122 value.

Put another way, the last-minute Christmas shopper’s retention is 22 percent lower compared to customers acquired during the rest of the year — that is, a retailer will retain 22 percent less of these new customers than if they were acquired in any other month.

Armed with this kind of insight and data-driven knowledge about customer behavior, the digital marketer can tweak programs and spend resources wisely.

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“We’re empowering marketers to act intelligently,” says AgilOne CEO Omer Artun. “If I knew that these customers are not likely to come back at the same rate as somebody I acquired in August, I might start thinking differently about how much money I spend on these people, what offers I give them, how I treat them.”

How to Build Brand Loyalty During the Holidays

However, this isn’t to say that there aren’t loyal customers to be found among holiday shoppers. AgilOne cites a skincare company that set up an email marketing campaign targeting first-time Cyber Monday customers. The goal was to build brand loyalty among them.

The skincare company was able to grow lifetime value of these Cyber Monday customers five percent higher than the company average, AgilOne says.