Customer retention quickly becomes the most important aspect of your business once the customer acquisition efforts begin to show results. The million-dollar question is how to make a buyer become a loyal, repeat customer so that you could increase repeat business with them.
Why It’s Important to Focus on Repeat Business
It is hard to get a customer to buy a product or use a service for the first time, even in the retail industry where impulse buys are normal. By encouraging and retargeting repeat business, your bottom line can grow without you having to increase the marketing and advertising costs.
Commonly referred to as customer retention, repeat business is an effective tool that helps to turn customers into loyal brand supporters. There are several reasons why you should focus on how to increase repeat business.
Increase in Business Growth
One of the major reasons repeat business is a powerful tool is that it allows the business to grow. If you have loyal customers, who shop from you regularly, it is going to increase your cash flow and profits.
It is easy to sell your new products & services to repeat customers since they already trust your brand. In the current times, when there are so many products out there, customers are more likely to go for a business they trust instead of one that they haven’t yet tried.
Word of Mouth Promotion
All of us have bought something on the recommendation of a family member or friend, at least once. This is because word-of-mouth promotion & mouth referrals increase the trust of a customer in your brand. Once you get loyal customers, they will promote your products for free.
Not only will improving customer relationships reduce your marketing costs, but it will also increase brand awareness.
Reduction in New Customer Costs
When you try to gain new customers, you have to put in a lot of marketing effects. Customer retention programs are affordable as compared to customer acquisition cost because they have already used your products and are satisfied with the results.
How to Increase Repeat Business with Promo
Now that you know why customer retention efforts are better than customer acquisition efforts, you must be wondering how can you increase repeat business. Here are a few ways to do so.
This is one of the classic methods to encourage repeat business. To start a customer loyalty program, all you need to do is to get the information of your customer – you can ask them to create customer accounts or give them a store credit card.
When they reach a particular dollar limit or make a set number of purchases from you, you can reward them in the form of free samples, store credit, coupons, promotional items, etc. Loyalty programs are very effective since they motivate the customers to buy more to get valuable rewards.
This will become a profitable exchange for both the companies and the customers. They will gain more value for their money every time they shop, and you will reap the benefits from their repeat business.
Customer engagement and customer satisfaction are very important if you want to increase your future profits.
Giving out referral gifts is a two-pronged approach. It will not only help you acquire new customers, but it will also increase customer loyalty. In referral programs, you can provide exclusive discounts to the customers who are using the referral codes.
Moreover, you can set incentives for the customers who successfully invite other people to buy your products. It is the human psyche to be happy when we see a discount code for something – so why not capitalize on this and increase your revenue growth?
It is a better idea to offer store credit instead of a percentage discount, but you can go either way as long as it helps to increase your sales.
Customer Advocacy & Satisfaction
If you want repeat business, you shouldn’t treat your customers like a sales number. The level of customer services and care you provide to the customer will determine how they view your brand. It will not hurt to send them a thank you note along with a coupon for the next they shop at your store.
If the customer had an issue with your service, sending an appreciation gift once you resolve their issue will let them know that you value and treasure them. Moreover, you will not be left with unhappy customers.
How to Calculate Repeat Business Quality
Before you go and try to improve your customer retention rate, you need to take a look at a few key marketing metrics and have a solid customer retention strategy.
Set grades for Clients
Some people buy your products twice a month, while others buy them only once. Based on their sales level, their advocacy for your companies, how often they come back, their referrals, etc. you need to set grades for the clients.
It is good to show more appreciation to those who are increasing your repeat business rate. This will motivate and encourage them to keep doing so!
Figure out who is the Most Valuable Contact
You have to track the average repeat customer rate and to do so, you have to know two things.
- The people who made more than one purchase in a particular time period
- The percentage of customers who were new in that period
Keeping an eye on this statistic will help you see who is the most valuable contact and how will you be able to increase repeat business from them. Moreover, you need to keep an eye on the purchase frequency of the average customer so that you learn how to use that to your advantage.
Another important metric is the average order value. This will allow you to see the worth of a current customer and will help you design your appreciation programs accordingly.
As a business owner, you must know that it is important to increase the average repeat purchase rate. In this article, we have broken down the benefits of enhancing your repeat purchase rate. Moreover, we have shown you ways to increase repeat business.
Implement the strategies mentioned in this article, and you will be surprised to see your revenue increasing quickly by simply tapping into the existing customer base.
Here’s to your successful business!