Unlock LTV with a Repeat Purchase Model

Customer acquisition is only going to get more expensive, making second purchases more important than ever.

Loyalty programs could be the path forward, but only if they’re set up as the beacon that leads customers back to that second purchase.

Enter: Inveterate.

We know how to design loyalty programs that tap into customer psychology to drive the lifetime value (LTV) that your brand needs. Read on to learn how.

What is a repeat purchase model?

Repeat purchase models focus on customer retention and LTV. When customers join the membership program, they receive cashback or other perks. For paid memberships, that initial investment ties them to your brand. For free programs, it’s an opportunity to keep creating excitement around your brand.

Either way, this retention strategy works. On average, Inveterate Customers see a 125% increase in purchase frequency and a 15% lift in AOV from members who join their Inveterate-backed membership programs.

While any brand would want these benefits, the repeat purchase model is especially effective for brands in crowded categories because it minimizes CAC and disincentivizes buying from your competition.

In psychology, this is called the loss-aversion bias: members have invested in your program (paid or not), so now they don’t want it to go to waste. In other words, they’re sticking with you rather than defecting to other companies in your vertical.

The loss-aversion phenomenon solves common pain points by:

• Driving retention: A high percentage of customers only shop at brands once, but the membership program motivates them to return.
• Creating excitement: Customers won’t shop with you if you’re not more exciting than your competitors. The retention program offers gifts and perks to generate that buzz.
• Boosting LTV: A retention program paves the way for customers to return by rewarding purchases instead of rewarding non-revenue-driving behaviors.

Every aspect of Inveterate’s repeat purchase model is geared toward rewiring customer behavior towards improved LTV. That’s because our loyalty programs don’t just reward actions; they reward transactions. The customer receives the pitch for it during their first in-cart experience with you. Prompting them during checkout gives you a great opportunity to show the value of the membership.

How to make the most out of a repeat purchase model

While a simple discount can encourage repeat purchases, you need more than that if you want to supercharge a repeat purchase model. You need a truly sticky strategy to draw customers in and ensure that it remains enticing.

Offer low pricing on your membership

First-time shoppers need a clear incentive to adopt your membership program. If the price is too high, people won’t join because they’re scared of losing money. But with the right price point, you can make joining a no-brainer.

You need to create a program with a low opportunity cost — where the customer loses nothing by joining and gains everything by returning. This makes your offer compelling and elicits the sentiment of “might as well,” priming customers toward loss aversion down the line.

Keep membership enticing with exclusive rewards

Perks should have obvious value and spark joy so members will cash in on them and feel excited to make a purchase, boosting conversions and increasing LTV. To keep members coming back, add exclusive rewards, such as:

• Credit for orders: When a customer places an order with you, reward them with cashback. This creates a feedback cycle: When customers spend with you, they get something extra special in return. Customers are more likely to respond rather than leave money on the table, so they’ll convert again down the line. As a bonus, you can send targeted marketing to them about the credit, which increases the likelihood of conversion.‍
• Quarterly incentive: By offering a recurring discount or cashback bonus, customers feel rewarded for being part of the community. Because they aren't being pushed to spend, they'll come back more often and spend more.‍
• Surprise benefits: The best retention programs spark joy, and part of eliciting that feeling is sometimes surprising customers with unexpected rewards. Sending members special offers, additional credits, or gifts with purchase will delight them and keep them coming back.

Launch and customize the model

Our foundational loyalty program brings together the essential components of success and a foundation to build on Member benefits, exclusive pricing, bespoke merchandising, and targeted marketing culminate in a proven approach that drives adoption and results. We’ve perfected it over time, and customers like True Classic have benefitted massively (more on that below).

And once you have a sizable enough membership base, you can test and iterate to optimize results. Then, we’ll help you customize the right program for your ideal customer.

One of the best parts is that none of this is set in stone. It’s easy to make changes, so you’re never forced to stay on any one loyalty path.

True Classic increased revenue per customer by 46% with the repeat purchase model

True Classic cultivates deep customer relationships in a competitive industry with Inveterate’s repeat purchase model. We helped them craft a program that increases LTV with:

• In-cart reminders: When customers view their cart, they’re shown how much members would save on that purchase and are prompted to sign up.
• Cashback: People easily understand the value of cash, so it is more tangible than points. Customers feel like they’re missing out if they don’t sign up for the membership.
• Conversion-driving perks: Members receive early access to new products, exclusive offers, members-only gifts, and SMS notifications to remind them what they’ve earned.

The best part? True Classic has seen results like:

• 46% increase in revenue per customer across 45k members
• $1.6M increase in incremental revenue in 7 months
• 3x higher opt-in rate, an 11% attach rate

Sound like the conversion unlock you need? Book a demo.