What is F2 conversion? BtoB marketers also want to learn about the importance of repeat customers in mail order

Marketing, in a nutshell, is “creating a system to sell.” In mail order, profits are greatly influenced by second repeat purchases from new users. It is important to create a system that allows users to continue making second, third, and fourth purchases, rather than just making a one-time purchase.

When a new user repeats for the second time, it is called F2 conversion. This time, we will introduce F2 conversion, along with the reasons why it is considered important and measures to improve the F2 conversion rate.

What is F2 conversion?

F2 conversion refers to a new mail order user making a second repeat purchase. F stands for Frequency, and the number indicates the number of purchases. F1 is a new purchase, F2 is a second purchase, F3 is a third purchase, and F4 is a fourth purchase. In addition, prospective users before purchase are represented as F0.

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The F2 conversion rate is the percentage of new users who return for the second time, and it can be used to measure the effectiveness of measures aimed at promoting repeat business and user satisfaction with the product. The F2 conversion rate is calculated using the command below.

F2 conversion rate (%) = Number of users who repeat for the second time ÷ Number of new users × 100

For example, if 60 out of 100 new users make a second purchase, the F2 conversion rate is 60%. In general, the F2 conversion rate is the lowest, and the conversion rates after the third purchase, such as F3 conversion and F4 conversion, tend to be higher than F2 conversion.

It is very difficult to convert new users into repeat customers for the second time, and once they return for the second time, they tend to continue purchasing from then on.

There are other indicators that you should keep in mind besides the F2 conversion rate. “CPO” and “F2 conversion CPO”. CPO is an abbreviation for Cost Per Order, which is an index that represents the cost per order, and is calculated using the following formula.

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CPO (yen) = Advertising cost (yen) ÷ Number of orders (items)

In addition, F2 conversion CPO refers to the advertising cost incurred per F2 conversion and can be calculated using the formula below.

F2 conversion CPO (yen) = CPO (yen) ÷ F2 conversion rate (%)

In order to lower the F2 conversion CPO, it is more effective to aim at improving the F2 conversion rate.In order to lower the CPO, it is necessary to increase the number of orders and improve the CV rate, but as will be explained later, it is costly and will never be possible. It’s not easy.

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Why is F2 conversion rate important?

In addition to the high degree of difficulty of F2 conversion, there are two reasons why the F2 conversion rate is important.

① Important for monetization

It is said that it costs five times as much to acquire a new user as it does for an existing user, not just through mail order. This is called the “1:5 rule.” Acquiring new users is costly and reduces profit margins, so retaining existing users must be prioritized.

Even in mail order, some companies are in the red when acquiring new users, and their profits are designed with repeat purchases in mind. In this case, the conversion from the first purchase to the second repeat is directly related to monetization, so the F2 conversion rate is an extremely important indicator for management.

② Optimal approach possible

Existing users who converted to F2 will have detailed user information at hand. Based on this data, you will be able to make the most appropriate approach to existing users. By taking the optimal approach, you can increase user satisfaction and encourage repeat business.

Factors that reduce F2 conversion rate

Although we recognize the importance of F2 conversion, improving conversion rates is not easy. There are two factors that are lowering the F2 conversion rate: (1) There is a gap between advertisements and products, and (2) There is no follow-up.

① There is a gap between advertising and products

If expectations are raised by advertisements and there is a large gap between actually using the product, it will not lead to a second purchase. In short, you need to be careful that the advertisement is not exaggerating the actual capabilities of the product.

Even if you raise expectations and make a first purchase, if it does not lead to a second purchase, it will not only be difficult to increase profits, but it will also negatively impact your company’s image and have no positive impact on word of mouth.

② Not following

One of the reasons why new users do not continue purchasing products is the lack of follow-up system after purchase. New user referrals Sometimes, after making a purchase and shipping the product, they don’t do anything and don’t follow up properly.

New users purchase a product with high expectations and apprehensions as they use it for the first time. If there is no follow-up from the company after that, I will not think to purchase from the second time onwards. On the other hand, if you can provide a moving experience to your users by following them, they will continue to buy from you.

Measures to increase F2 conversion rate

Measures to suppress the factors that lower the F2 conversion rate and promote F2 conversion are divided into pre-purchase and post-purchase measures.

① Improve the experience before purchase

First of all, we will make adjustments so that the gap between the expected value of the advertisement and the actual performance of the product is small, so that the advertisement itself does not become an exaggerated advertisement. Also, if you get the impression that the e-commerce site is not easy to use when making your first purchase, you will be hesitant to use the site for your second purchase.

We recommend that you regularly check for any negative elements in the user experience before making a purchase, and for any problems with advertisements or the site.

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② Increase customer satisfaction after purchase

We always follow up with new users after they make a purchase. We understand when users who have purchased your product will consider returning, and approach them at the right time. Specifically, we will send step emails, DMs, and postcards.

Also, when following users, prepare content that matches the user’s psychological state at the time. Appropriate content changes depending on the point of contact with the customer: when the product is delivered to the user, when the product is being used, or when the product is nearing the end of use.

The content itself could be “your skin diagnosis” for cosmetics, or “a reminder calendar” for health foods. You can also consider a variety of other content, such as “How other users use it,” “Secret stories about product development,” and “Detailed product information.”

If the timing of following and the content provided are appropriate, user satisfaction will increase and the rate of repeat purchases can be improved.

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