Repeat Business: What is It? (And How Can You Get More)

  • Jerrel
  • February 21, 2022
  • 1254

What is Repeat Business? (And How You Can Get More of It)

On average, repeat customers spend 33 percent more than new customers.

And reducing your businesses’ churn rate by just 5% can increase your profitability by up to 125%.

But what do those mean exactly? And how can you optimize your business to bring in more repeat business in the first place?

In this article, we’ll answer all of that and more- so stay tuned.

What is Repeat Business?

Repeat business happens when a customer comes back to buy after their first purchase from a store.

While it might not initially seem so significant, returning customers form the foundation of every sustainable business.

Let’s talk about why that is.

Are Repeat customers More Valuable Than First-Time Customers?

First-time and existing customers are both essential to a businesses’ success, but from a purely numbers-based standpoint- return customers, on average, net more profit than their first-time counterparts.

This is for a few reasons:

  • As your customer pool grows, there will be fewer potential first-time buyers to bring into the fold.
  • Acquiring a new customer costs 5 times more than retaining one.
  • It costs 16 times more to build a relationship with a new customer than it does to keep an existing customer relationship.

While this isn’t an exhaustive list of advantages, it just goes to show that repeat business is critical for stores in any industry.

You’ll always need a flow of new customers, but if you aren’t converting those customers into repeat buyers (and eventually loyal brand followers), you’ll be missing out on a massive amount of profit.

So how can you take customers through that journey and generate return business?

How Businesses Can Leverage Their New Customers | Customer Retention Guide

Defining a structured customer journey is one of the most helpful things you can do for your business.

If you have a plan on how you’ll get every prospect from first impression to loyal follower, it’s nothing but clear skies ahead.

On the other hand, if you’re playing your customer journey by ear, you’re flying blind through cloudy weather.

While this post isn’t a full guide on the customer journey, here are a few tips and tactics you can use along the way to increase customer retention and repeat business.

Tactic #1: Implement Loyalty Programs

Loyalty programs are some of the most popular tactics to generate return business, and it’s pretty simple to see why.

Reward customers with points and discounts for coming back to your store, and they will – so long as you provide great service, that is.

Loyalty programs aren’t just great ways to keep customers coming back, though. They’re also one of the best ways to stop customers from switching to a competitor brand.

After all, if they’re getting accumulative rewards, why would they switch?

Tactic #2: Design an Email Marketing Campaign

There’s one simple fact that business owners forget all too often.

Consumers are people, and people forget things.

Abandoned carts, reward points, even switching to a competitor can just be the result of a non-perfect memory.

Which is why it’s vital you work to stay on top of consumer minds. (without being too pushy)

And one of the best ways to do just that is by utilizing email marketing in your strategy.

Email marketing can take many shapes and forms, from abandoned cart emails to newsletters, the possibilities are virtually endless.

If you’re not already, consider putting an email marketing funnel in place to stay top of mind and encourage customers to come back.

Tactic #3: Produce High-Value Content Across Multiple Channels

hellofresh blog page
If brands as big as HelloFresh implement content marketing, it’s safe to say your brand should too.

Content marketing, social media, and SEO should all have a place in every digital businesses’ repertoire because it allows stores to multiply their marketing efforts with minimal investment.

To get the most out of your marketing, stay top of mind, and generate plenty of return business over time, produce high-value content and share it wherever your target audience visits online.

Take snippets from long-form blog posts to create social media posts, or even create scripts for video content to get the most bang for your buck.

New Customers Cost More Than Repeat Business

To explain this, let’s ask a question:

Which do you trust more: A brand you’ve seen for the first time or one that you’ve shopped from for months or years?

If you’re like most consumers, it’s probably the latter.

And that’s because those brands have invested the resources to build that trust with you.

And this is exactly why new customers cost significantly more to convert than existing ones.

If your product is high-quality, most existing customers already trust you and only need a small nudge to buy again.

Whereas a new customer has to go through the whole journey from start to finish.

But once a new customer turns into a repeat customer, your job still isn’t finished. You’ve still got a few steps to go.

Converting Repeat Customers into Loyal Followers

A large following of loyal customers can be one of the most significant factors in a company’s profitability.

They’re your biggest advocates, have the largest lifetime values, and will follow your brand in whichever direction it goes. (so long as you treat them right)

Why Loyal Customers Are Your Most Valuable Assets

Social proof is as good as gold for ecommerce businesses.

And loyal customers aren’t just repeat buyers, they’ll often be your biggest advocates too.

A majority of your great testimonials, case studies, and reviews will come from people who strongly support your brand.

So how do you turn a repeat customer into someone who’d happily recommend your products to friends or family?

How to Gain Loyal Customers for Your Brand

1: Practice a Customer-First Approach

No one wants to follow a brand that doesn’t look out for its customers.

If you want more brand loyalty, forget the short-term profit approach.

Instead, operate on a customer-first basis. This includes revamping your customer service (which we’ll touch on just below), interacting with your following, and showing that your brand cares about more than pure profit.

2: Provide Exclusive Offers

Want to show your followers that they’re seen? Send out exclusive offers for them occasionally.

You can send the offers through a loyalty program as we mentioned before, for holidays, or even use a plugin to send discounts on customer birthdays.

3: Improve Your Customer Support

No matter how well you’ve built your store, customer issues will always pop up.

And your customer support will be the difference between the customers that walk away 100% satisfied and the ones that never return.

Set up live chats, phone lines, email support tickets, and make sure your customer support reps are all top-notch.

A customer support section that prioritizes customer happiness is one that generates some of the most loyal advocates out there.

The Wrap Up

And there you have it, the full rundown on return business, customer retention, and brand loyalty.

Think we missed something? Make sure to leave a comment below!

And if you found this guide helpful, make sure to check out the other content on our blog.

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