Overstock Accepts Bitcoins as a Way to Increase Customer Retention

 

Most media sites have been eagerly reporting on the bitcoin digital currency for the past several months, and interest seemed to hit a new high when Overstock.com announced it would be the first retailer to accept bitcoins as payment. Considering that bitcoin value has been largely volatile so far, and the number of people who use it are relatively small, this seems to have been a PR move more than anything else.

The Importance of Loyal Customers

As far as PR moves go, though, it might prove to have been effective. “We will tap into a significant group of loyal customers,” explained the company’s chairman, Patrick Byrne. It’s no secret that loyal customers make great customers. Studies show that 80% of a company’s future profits will come from 20% of existing customers. Why? Loyal, or repeat, customers spend 33% more than new ones. If Overstock’s theory pays off, they might have hit a small jackpot in client retention.

Accepting Debit and Credit Cards Online Can Increase Customer Loyalty

Did you know that a study by Comscore analytics revealed that almost 60% of customers want to see a variety of payment options at online checkouts? Most of them are not looking to pay in bitcoins just yet, but having both credit and debit available as an option is important, and basically essential in today’s digitized world. Having multiple options means your client will be more comfortable at the point of payment, and they will remember that their purchasing experience with you proceeded smoothly.

Being Able to Accept Credit Cards Boosts Spending Per Sale

If you are just getting your business together and are wondering whether it’s worth the charge per swipe to invest in accepting credit cards, you should keep in mind that simply using credit cards affects how consumers make purchases. A study by Dunn and Brandstreet found that, on average, people spend 15% more when they use their cards instead of cash. Why is this? People have a visual relationship with money — credit cards make the action of spending feel less painful and present.

Does your business accept debit and credit cards in store, and online? Let us know in the comments. Find more on this topic here.