15 Ways to Get Repeat Business

The importance of repeat customers often gets overlooked in the dynamic world of small businesses, yet these loyal patrons are the backbone of successful enterprises. Repeat business affirms the quality of your products or services and is a testament to your customer relationships, bringing comforting stability amidst the inherent unpredictability of commerce.

The economic edge of retaining existing customers over acquiring new ones is undeniable. Evidence consistently indicates that customer retention is substantially less expensive than acquisition, making it a cost-effective strategy. In this article, we aim to shed light on the vital role of repeat business in driving sustainable success, offering insights into how to capitalize on its immense potential.

Understanding the Value of Existing Customers

repeat business

Loyal customers or repeat customers hold immense value for any business, their importance going far beyond regular financial transactions. Their constant support offers businesses a stable source of income, thus creating a level of predictability that is crucial for strategic business planning and expansion. Here are some key reasons why repeat customers are so valuable:

  • Increased Profitability: A study by Bain & Company demonstrated the profound impact of customer retention on profits. It showed that even a slight increase of 5% in customer retention can lead to a profit boost of anywhere between 25% to 95%. This shows that focusing on maintaining a strong relationship with existing customers can be a powerful strategy for enhancing business profitability.
  • Higher Conversion Rates: The probability of selling to an existing customer is between 60% and 70%, whereas the statistic for a new prospect falls drastically between 5% and 20%. This difference underscores the fact that cultivating relationships with current customers often results in higher conversion rates, contributing to business growth.
  • Brand Advocacy: Satisfied repeat customers can become zealous advocates for your brand. They often spread positive word-of-mouth, recommend your business to their networks, and leave favorable reviews. This organic form of promotion can greatly enhance your brand’s reach and reputation, potentially leading to new customer acquisitions.
  • Customer Feedback: Loyal customers are also a valuable source of feedback. Because they use your products or services frequently, they can provide insight into what is working and what could be improved. This feedback can guide your business strategy and help you effectively meet customer needs.
  • Lower Marketing Costs: Attracting new customers often requires significant marketing efforts and costs. In contrast, repeat customers already know and appreciate your brand, which can lead to lower marketing expenses.
  • Customer Loyalty Programs: Repeat customers are more likely to participate in customer loyalty programs. These programs can generate significant revenue, incentivizing repeat purchases and attracting new customers interested in the rewards.
  • Positive Online Reviews: A study by American Express found that satisfied customers share their positive experiences with an average of nine people. In the digital age, this often takes the form of online reviews, which can significantly boost your business’s online presence and reputation.

In conclusion, nurturing and valuing repeat customers can provide an array of benefits to businesses beyond just steady revenue. These customers can offer profitability, increased conversion rates, invaluable feedback, and even serve as powerful brand advocates. Therefore, businesses should invest in strategies that foster customer loyalty and satisfaction.

The Cost of Acquiring New Customers Acquisition Versus Customer Retention

Understanding the cost dynamics involved in customer acquisition and retention is pivotal in crafting an effective business strategy. Acquiring new customers involves various activities – from marketing and advertising to potential customer education, all requiring significant financial investment.

Statistics shed a clear light on this cost disparity. According to the Harvard Business Review, acquiring a new customer can cost five to 25x more than retaining an existing one. This stark contrast highlights the economic strain businesses may experience in constantly pursuing new customers.

Marketing campaigns, sales promotions, and customer education are just a few examples of costs associated with new customer acquisition. Each new customer must be reached, convinced, and converted, which requires time and resources and increases customers’ cost.

On the other hand, the costs of retaining a repeat customer are significantly lower. These customers already recognize your business’s value, requiring less persuasion and fewer resources to maintain their patronage. Plus, existing customers tend to spend more. A report by Adobe showed that repeat customers, representing only 8% of all visitors in the studied sectors, accounted for 40% of the revenue.

The Long-term Value of Loyal Customers

Understanding Customer Lifetime Value (CLV) is essential in grasping why loyal customers are valuable. Simply put, CLV predicts the total revenue value a business can expect from a single customer throughout its relationship.

CLV focuses on the long-term value of a repeat customer, as opposed to the immediate gain from a single transaction. It encourages a business to shift from a transactional perspective to a relational one. By focusing on CLV, a business recognizes the sustained profit potential repeat customers hold, which significantly outweighs the value of single, isolated purchases made by one-time customers.

Think of it this way: How much do small businesses spend on advertising? If that amount leads to a customer purchasing one item, the ROI may not be especially high. However, if that same customer brought in by the ad purchases multiple items each year, the ROI increases dramatically.

Strategies to Encourage Repeat Customers

As we’ve established, loyal customers are the cornerstone of a thriving business. So how can businesses cultivate and nurture this loyalty to encourage repeat patronage? Let’s delve into a comprehensive yet easily actionable list of strategies designed to retain your existing customer base and transform them into loyal brand advocates.

1. Offering Exceptional Customer Service

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Exceptional customer service involves exceeding standard expectations to provide a superior service experience. It’s about creating memorable interactions that leave a positive, lasting impression on your customers.

Train your staff to exceed customer expectations. Ensure they know your products or services and have the right interpersonal skills to listen empathetically, communicate effectively, and solve problems efficiently.

Zappos, the online shoe and clothing retailer, is renowned for its exceptional customer service. They empower their customer service representatives to provide personalized service and to make customers feel valued. For instance, representatives have no script and are encouraged to take their time with customers. This has led to some calls lasting hours, with representatives helping customers find products on competitors’ sites. This strategy has earned Zappos a fiercely loyal customer base, demonstrating the power of exceptional customer service in encouraging repeat business.

2. Creating a Loyalty Program

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A loyalty program is a rewards system that incentivizes repeat purchases by offering customers points, discounts, freebies, or exclusive deals. It’s a structured way of recognizing and rewarding customer loyalty and can significantly boost customer retention.

Design a loyalty program that offers real value to your customers. Make the rewards achievable and worthwhile. This can be in the form of points earned per dollar spent, free products after a certain number of purchases, or exclusive access to special sales or events.

Starbucks’ Rewards Program is a prime example of an effective loyalty program. Repeat customers earn “stars” for every purchase, which can be redeemed for free food and drinks. They also get free in-store refills and exclusive member events and offers. This encourages customers to keep returning and increases their overall spending per visit, thereby increasing their lifetime value.

3. Regularly Communicating with Customers

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Regular communication with customers involves staying in touch through various channels such as emails, social media, or personalized notifications. This consistent contact keeps your business at the forefront of their minds, creates a sense of community, and allows you to update them about new products, offers, or company news.

Plan a consistent, but not intrusive, communication schedule. Personalize your messages as much as possible to make your customers feel valued. Utilize various platforms such as newsletters, social media updates, and personalized emails to share relevant information that adds value to the customer.

Fashion retailer ASOS excels at customer communication. They use personalized emails to update customers about new arrivals, sales, and exclusive offers based on past purchases and browsing history. They also maintain a robust social media presence where they engage with their audience, share fashion tips, and respond to customer inquiries promptly. This regular communication keeps ASOS fresh in the minds of their customers to encourage repeat business.

4. Providing Personalized Experiences

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Personalized experiences tailor your service or product to meet customer needs or preferences. They foster a personal connection between the customer and your business, making them feel valued and understood, which can significantly boost customer loyalty.

Utilize customer data to understand their preferences, behavior, and needs. Use this information to tailor your offerings or communications. This could be as simple as addressing the customer by name in communications, recommending products based on their browsing history, or offering personalized discounts on their favorite items.

Amazon excels at providing personalized experiences. Their recommendation engine uses customer data to suggest products based on past purchases, viewed items, and items left in the shopping cart. This increases sales and enhances customer satisfaction across the site, marketplace, and even Amazon Handmade, as customers appreciate the convenience and personal touch, encouraging them to return.

5. Offering Incentives for Repeat Purchases

repeat business

Offering incentives for repeat purchases is a strategy where businesses provide special offers or discounts that specifically encourage customers to make additional purchases. These incentives can include price reductions, add-on freebies, or access to exclusive products.

Develop a system that rewards customers for making repeat purchases. For instance, you could offer a discount on the customer’s next purchase, provide a free product after a certain number of purchases, or grant exclusive access to new products or services as a reward for their continued patronage.

The Body Shop’s “Love Your Body” club powerfully illustrates this strategy. Loyalty programs such as theirs enable members to earn points for every purchase, which can be redeemed for products once a certain number of points have been accumulated. Additionally, repeat customers can receive a $10 reward during their birthday month, encouraging them to purchase. This strategy not only incentivizes repeat purchases but also fosters a feeling of being valued, which builds customer loyalty.

6. Hosting Exclusive Events for Current Customers

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This involves arranging special events, either virtually or in person, exclusively for your current customers. These events can serve as a platform to launch new products, offer special discounts, or thank customers for their loyalty.

Plan and host events that add value to your customers. It could be an informative webinar, an exclusive sale, or a fun social event. Make sure your customers feel appreciated and special during these events.

Cosmetic brand Sephora regularly hosts Beauty Insider events for members of its loyalty program. These exclusive events often include makeup tutorials, product launches, and special discounts, adding a sense of exclusivity and value for their repeat customers.

7. Prioritizing Customer Feedback

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Prioritizing customer feedback means actively seeking, listening to, and implementing customer suggestions or complaints. This shows your customers that their opinions matter and can lead to improvements that boost customer satisfaction.

Use surveys, social media, or direct communication to gather customer feedback. More importantly, act on both negative and positive feedback and let your customers know their input has led to tangible changes.

McDonald’s “Our Food. Your Questions.” campaign is a perfect example. They openly answered customer queries and concerns about their food, clarifying misconceptions and demonstrating a commitment to transparency and customer satisfaction.

8. Using Social Media to Engage with Customers

repeat business

This strategy involves using social media platforms to interact with your customers, answer their questions, share valuable content, and build a community around your brand.

Maintain an active presence on social media platforms where your customers are present. Share content that adds value, responds promptly to customer inquiries and creates opportunities for customers to engage with your brand.

Fashion retailer ASOS regularly uses Instagram to showcase its products, provide style inspiration, answer customer queries, and even highlight customer-generated content, fostering community and engagement among its followers.

9. Word of Mouth Marketing

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Word-of-mouth marketing is when customers recommend your products or services to their network. This strategy leverages customers’ trust and influence within their personal and professional circles.

Deliver exceptional customer service and high quality products that customers naturally want to recommend. Encourage reviews and testimonials, and consider offering incentives for referrals.

Dropbox increased thanks to its referral program. They incentivized word-of-mouth marketing by offering additional storage space for the referrer and the new user, leading to a 60% increase in signups.

10. Implementing a Referral Program

repeat business

A referral program encourages current customers to refer your business to others by offering them incentives such as discounts, free products, or premium access.

Develop a referral program that benefits both the referrer and the referred party. Make it easy for customers to share your products or services with their network.

Airbnb’s referral program has been a tremendous success. They offer travel credits to those who refer and sign up, incentivizing users to share Airbnb with their friends and family. This strategy has helped Airbnb expand its user base worldwide.

11. Offering Subscription Services

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Subscription services offer customers a convenient, automated repeat purchase plan, offering them a regular supply of products or services, often at a discounted rate.

Identify products or services in your business that could be turned into a subscription. Make sure the subscription offers real value to the customer in terms of cost, convenience, or added benefits.

Dollar Shave Club provides a subscription service where customers receive new razor blades each month. This offers convenience and cost savings, creating a strong incentive for repeat business.

12. Providing Excellent Post-Purchase Support

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Post-purchase support includes all services you provide to customers after they purchase. This could help set up a product, troubleshoot, or handle returns and refunds.

Ensure you have a dedicated support team to assist customers after their purchase. Clear communication, easy returns or exchanges, and helpful troubleshooting can turn a one-time buyer into a loyal customer.

Apple is renowned for its post-purchase support with services like the Genius Bar in Apple Stores, where customers can receive assistance with any device issues.

13. Creating a Community Around Your Brand

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This strategy fosters a sense of community among your customers, making them feel part of a bigger group that shares common interests or values.

Use platforms like social media, forums, or a dedicated section on your website to foster discussions, share customer stories, and engage with your community.

Harley-Davidson has a dedicated ‘Owners Group’ for their customers, where they can connect, share stories, and even organize group rides, fostering a strong sense of community and brand loyalty.

14. Gamification of Customer Experience

repeat business

Gamification involves incorporating game-like elements into the shopping experience. This could be in the form of reward points, achievement badges, or competitions, making the shopping experience more engaging and fun.

Identify areas of your customer journey that could be enhanced with gamification. Make sure the rewards or achievements offer real value and add to the customer’s overall experience.

Duolingo, the language-learning app, uses gamification brilliantly. They offer streaks, leaderboards, and reward points to keep users engaged and motivate them to keep learning, fostering regular usage.

15. Offering a Seamless Omnichannel Experience

repeat business

An omnichannel experience provides customers with a seamless shopping experience, whether online from a mobile device, a laptop, or in a physical store.

Ensure your branding, messaging, and customer service are consistent across all channels. Facilitate easy transitions, like buying online and picking up in-store or starting a customer service chat on a mobile device and continuing it on a computer.

Disney offers a seamless omnichannel experience. Whether booking a trip online, using the mobile app in the park, or interacting with staff at a hotel, the experience is consistently exceptional, fostering customer loyalty and repeat business.

Offering Exceptional Customer ServiceThis involves going beyond basic expectations to deliver superior service experiences, which can create positive, memorable impressions for customers.Zappos has a strong reputation for exceptional customer service, with representatives encouraged to spend as long as necessary to assist customers, even helping them find products on competitors' websites.
Creating a Loyalty ProgramLoyalty programs incentivize repeat purchases by offering rewards like points, discounts, or exclusive deals.Starbucks' Rewards Program allows customers to earn "stars" with every purchase, which can be redeemed for free food and drinks, free refills, and exclusive member events.
Regularly Communicating with CustomersConstantly keeping in touch with customers through various channels keeps your brand at the forefront of their minds.ASOS uses personalized emails and a robust social media presence to keep customers updated about new arrivals, sales, and exclusive offers.
Providing Personalized ExperiencesTailoring your service or product to meet customer preferences fosters a personal connection with your brand.Amazon's recommendation engine uses customer data to suggest products based on past purchases and viewed items, creating a personalized shopping experience.
Offering Incentives for Repeat PurchasesThis strategy involves providing special offers or discounts specifically to encourage customers to make repeat purchases.The Body Shop's "Love Your Body" club rewards members with points for every purchase, which can be redeemed for products or a special reward during their birthday month.
Hosting Exclusive Events for Current CustomersSpecial events for current customers can serve as a platform to launch new products, offer special discounts, or thank customers for their loyalty.Sephora hosts exclusive Beauty Insider events for its loyalty program members, offering makeup tutorials, product launches, and special discounts.
Prioritizing Customer FeedbackActively seeking, listening to, and implementing customer feedback can lead to improvements that boost customer satisfaction.McDonald's "Our Food. Your Questions." campaign answered customer queries and concerns about their food, demonstrating transparency and a commitment to customer satisfaction.
Using Social Media to Engage with CustomersUsing social media platforms to interact with customers can build a community around your brand.ASOS uses Instagram to showcase products, provide style inspiration, answer queries, and highlight customer-generated content.
Word of Mouth MarketingWhen customers recommend your products or services to their network, this strategy leverages their trust and influence.Dropbox's referral program increased signups by 60% by offering additional storage space for both the referrer and the new user.
Implementing a Referral ProgramA referral program offers incentives for current customers to refer your business to others.Airbnb offers travel credits to both those who refer new users and the new users themselves, encouraging users to share Airbnb with their network.
Offering Subscription ServicesSubscription services provide a regular supply of products or services, often at a discounted rate, offering convenience and value to customers.Dollar Shave Club offers a subscription service that delivers new razor blades each month, creating a strong incentive for repeat business.
Providing Excellent Post-Purchase SupportThis includes services provided to customers after they purchase, which can turn a one-time buyer into a loyal customer.Apple provides renowned post-purchase support, including the Genius Bar in Apple Stores, where customers can receive assistance with any device issues.
Creating a Community Around Your BrandThis fosters a sense of community among your customers, making them feel part of a larger group.Harley-Davidson has a dedicated 'Owners Group' for customers to connect, share stories, and organize group rides, fostering brand loyalty.
Gamification of Customer ExperienceIncorporating game-like elements into the shopping experience can make it more engaging and fun.Duolingo uses gamification elements like streaks, leaderboards, and reward points to keep users engaged and motivate them to keep learning.
Offering a Seamless Omnichannel ExperienceThis provides a consistent shopping experience across all channels, whether online from a mobile device, a laptop, or in a physical store.Disney offers a seamless omnichannel experience from booking a trip online, using the mobile app in the park, or interacting with staff at a hotel.

Overcoming Challenges in Retaining Customers

In the journey of customer retention, businesses often encounter various hurdles that can derail their efforts for small businesses. These challenges range from understanding and meeting customer expectations to effectively handling negative customer experiences. However, these challenges are not insurmountable. With a proactive approach, keen insight, and dedication to customer satisfaction, businesses can turn these potential stumbling blocks into stepping stones toward building a loyal customer base. Let’s delve deeper into these challenges and how businesses can effectively overcome them.

Understanding and Meeting Customer Expectations

One of the most significant challenges businesses face when retaining customers is understanding and meeting their ever-evolving expectations. In our fast-paced digital age, customers demand high-quality products, exceptional customer service, and overall seamless experiences. Failing to meet these expectations can lead to customer dissatisfaction and, consequently, loss of repeat business.

The first step in overcoming this challenge is to understand your customer truly. Regularly collect and analyze customer feedback through surveys, reviews, and direct interactions. Use this information to create detailed customer personas to help you understand your customers’ needs, preferences, and buying behaviors.

Next, ensure that your entire team understands these customer expectations. Everyone, from product development to customer service, should be aligned with these insights and work towards meeting them. Regular training and communication can ensure that these insights are widely disseminated and acted upon within your organization.

Finally, continuously iterate and improve your products, services, and processes based on customer feedback. A commitment to continuous improvement shows your customers that their opinions are valued and that you are dedicated to providing them with the best possible experience.

Dealing with Negative Customer Experiences

Negative customer experiences can significantly harm your efforts to retain customers. Even the most loyal customers can be driven away by a bad experience, making it crucial for businesses to handle such situations effectively.

The key to overcoming this challenge lies in prompt and effective resolution. When a negative experience is reported, address it immediately. Apologize sincerely for any inconvenience caused, and assure the customer that you’re working to resolve the issue. Swift, proactive action can often turn a negative experience into a demonstration of your commitment to customer satisfaction, strengthening customer loyalty.

Furthermore, use every negative experience as a learning opportunity. Analyze what went wrong and implement measures to prevent such incidents from recurring. This could involve improving product quality, refining processes, or providing additional training to staff.

Also, consider adopting a proactive approach to identify potential issues before they cause negative experiences. Regularly review your processes, get feedback from frontline staff, and stay abreast of any changes in your industry or customer preferences that could lead to potential issues.

Remember, in customer retention, it’s not just about avoiding negative experiences but also about handling them well when they occur. This latter skill can truly set a business apart in the eyes of its customers.

FAQs: Repeat Business

How can I identify my repeat customers?

You can identify repeat customers by implementing a customer relationship management (CRM) system. These systems allow you to track individual customer interactions and purchases over time. Regular customers will have a history of frequent interactions and purchases. Also, loyalty programs can help identify repeat customers as they require customers to sign up and track their transactions.

What is a cost-effective way to encourage repeat customers?

Email marketing can be a cost-effective way to encourage repeat customers. Regularly send your customers informative and engaging emails with special offers, new product information, or helpful tips related to your products or services. This provides value to your customers and keeps your brand at the forefront of their minds, encouraging repeat purchases.

How can I use social media to increase customer retention?

Social media can increase customer retention statistics by regularly engaging with your customers. Share valuable content, respond to comments and messages promptly, and create opportunities for customers to interact with your brand. Also, using social media to quickly address customer concerns or complaints can show customers that you value their feedback and are committed to their satisfaction.

What role do loyalty programs play in encouraging repeat business?

Loyalty programs encourage repeat business by offering customers incentives for making additional purchases. By accruing points or rewards, customers are incentivized to continue purchasing from your business to take advantage of these benefits. Loyalty programs also foster a sense of value and belonging, enhancing customer loyalty and retention.

How can customer data be used to reduce customers’ costs and promote word-of-mouth marketing?

Customer data can be used to create personalized offers and discounts, reducing the cost for your loyal customers. Analyzing buying patterns can help you offer targeted deals that your customers will likely appreciate and use, thus improving your conversion rate. Additionally, you can use customer data to identify satisfied customers likely to recommend your business to others. You can then encourage these customers to promote your business through incentives or referral programs, aiding in word-of-mouth marketing.

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Myra Nizami Myra Nizami is a staff writer for Small Business Trends and has been with the team for 3 years. She is also a freelance writer and researcher with a Bachelor's degree from Cornell University and a Master's from Kings College London.