Have you been feeling like you’re spending so much time trying to find customers and convert them but you haven’t made a sale in forever? You could be focusing on the wrong customer. Instead of casting out a line to reel in new customers, have a look at those already in your boat. You might be thinking that once a customer has purchased from you, you don’t need to care about them anymore. But that’s a big mistake damaging your business. So let’s set the record straight on repeat customers and why they could be more valuable than new customers.
What is a repeat customer?
It might sound simple, and it is, but let’s just go over the basics. A repeat customer is someone who purchases from you at least twice. You might find that they choose to come back time and time again because they have become loyal to your brand.
Think about the last time you subscribed to a service. You chose to receive that service regularly because it provided value for you and that’s one example of how you became a repeat customer. Repeat customers don’t always have to be subscribers, but the idea is that they turn to your brand habitually as a subscriber would.
Are repeat customers more valuable than new customers?
Nothing is nobler than loyalty and that’s why you should be seeking it from your customers. Also, you could be losing out on 65% of business if you don’t. That’s how much of your brand’s business can come from existing customers. That could be because repeat customers spend double the amount of time on eCommerce sites compared to new customers.
But there are also a few other reasons why repeat customers are more beneficial than new customers and why you should nurture them. Our top 4 reasons are that repeat customers:
1. Spend more money
Your repeat customers are already familiar with the value of your brand. They’ve experienced your products and services and know that they like what you provide. Because of this knowledge, they often feel that they can shop smarter when buying from you again. A study from Bain and Company showed that a customer familiar with a brand spent 67% more than a new customer. Having a loyal customer who’s in a stable relationship with your brand is very valuable.
2. Are easier to convert
Anytime you present a customer with a new product or service, they might be cautious before making a purchase. But, you’re likely to find that your seasoned customers will take to new offerings more easily because they have loyalty to your brand. The authors of a marketing guidebook, Marketing metrics, found that a repeat customer has a 60 to 70% chance of converting. So their loyalty makes them easier to convert.
3. Cost less than new customers
Acquiring a new customer can cost you 5 to 25 times more than retaining an existing customer, says Harvard Business Review. That’s because you’ve built a relationship with your repeat customer so you don’t have to spend as much time and money on marketing and converting. There are a few steps in the customer life cycle that you won’t necessarily have to worry about. For example, you don’t have to create awareness or advocacy. And because of this, you save money and can focus your budget on other areas of need.
4. Promote your business.
Remember how creating awareness is a step you don’t have to worry about with repeat customers? Well, how’s this for another bonus point: repeat customers can create awareness for you so you don’t have to do any of the heavy lifting. If your customer is happy with you, they’re likely to spread the word to their friends and family, raving about how great you are. And social proof is valuable. A survey found that 82% of Americans seek recommendations from friends and family before making a purchase. So why not take advantage of ambassadors that don’t cost you a thing.
How to keep repeat customers
Now that you know how important repeat customers are, what can you do to make sure that your customers stay? It all boils down to offering a great customer experience. Make sure that you identify your customers’ pain points so that you can make life easier for them. Offer them products and services that will help improve or add value to their lives. And make their purchasing journey of those products and services effortless.
Customer loyalty programmes are another way to retain customers. Give them perks for sticking to your brand like special discounts, free shipping or early access to new offers.
The bottom line
Repeat customers are a great investment because they cost you less and earn you more. Focus on keeping them happy and they will keep coming back to you. Once you’ve built up a loyal customer base, it’s easy to watch your business flourish without so much stress and effort.
If you’ve been struggling to retain your customers, get in touch with our experts so that we can help you promote your business and increase your profits with our top marketing strategies.
