There are a lot of things that we want to do just to make sure that our business will grow. However, have you considered thinking about the importance of your best customers? Most often, we focus more on acquiring new customers rather than giving more attention to our returning customers. Keep in mind, that these are actually the people who have helped you in building profits for your business. As a marketer, we are always looking for ways in order to grow our customer base and our business. To help you increase your conversion rates, there are different resources that you can find on the internet.
As a business owner, you must acknowledge your repeat customers since they are the foundation of your profitable business. There are lots of successful businesses that have a steady number of returning customers that helps them in growing their profits. Amazon would be a good example of this. They were able to keep their returning customers because they implemented effective strategies. For instance, offering these returning customers with free shipping every time they purchase products that amounted to $25 or more. This can entice customers to buy more and to keep on coming back to their sites.
According to SumAll, 25% to 40% of the total profits of most businesses originated from these returning customers. Moreover, having steady customers can help your business in overcoming the economic crisis. Businesses that have at least 40% repeat customers will likely generate almost 50% more revenue compared to those that only have nearly 10% of repeat customers.
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How To Obtain More Repeat Customers?
There are a lot of ways that you can do so your business can acquire more repeat customers. You can encourage your customers to buy more during their first purchase. Keep in mind that there is a close relationship between the amount that the customer spends during his first purchase and the possibility of repeat business. Customers who are spending more during their first purchase will likely become your repeat customers as opposed to those who are spending less. Because of this, creating promotions intended for new customers would be a perfect way of turning one-time buyers into returning customers.
After encouraging them to make a huge initial purchase, you could continue by pushing for a second purchase. There is a 27% chance that your first-time buyers will likely make a second purchase. By encouraging customers to make a second purchase, there is a greater chance that they could become your longtime followers. When the time comes that your customer will purchase from you for the fourth time, then there are more chances that they will return again.
Allocate 25% of your marketing budget for returning customers. This can provide you a greater chance of having steady purchases. If you want to increase the number of your returning customers then you should provide them with extraordinary attention. For instance, you can provide them with free shipping, gifts, exclusive events, VIP classifications, as well as different types of incentives. These things can make your customers feel that they are special and give them more reasons why they should make another purchase.
Why Is It Important To Encourage Your Customers To Come Back?
As an entrepreneur, the importance of repeat business is not something that you should ignore. But, what is actually repeat business and why is it important to your business? Customers who like and enjoy your products or services will probably come back to you in the future. Aside from this, these customers will likely promote your business through word of mouth.
Repeat business occurs when you have satisfied customers who keep on returning to your company to purchase your products or services. Although acquiring new customers is necessary for your business to grow and prosper, however, it is the significance of repeat business that makes you stand out from your competitors.
For most successful companies, they consider repeat business as their lifeblood. Managers, CEOs, and other executives who are running successful companies know the need of keeping customers happy, loyal and satisfied so they will come back again and again. They understand that a business that has no repeat customers will likely struggle regardless of what industry they choose.
If you have an endless flow of new customers, then most probably your business will continue to develop and prosper. But keep in mind that it is much cheaper to make customers come back time and time again rather than acquiring new ones. According to some studies, attracting new customers will cost six times more than having a steady base of returning customers.
Why Do Companies Get Repeat Business?
There are many reasons why companies get the chance to have repeat business. One of the obvious reasons is because these customers liked their products or services the first time that they obtained it. This is very important since customers will not keep on coming back if they do not feel happy and satisfied with the products or services that they received. Perhaps they like the products because they are not too expensive and are made of high-quality materials.
That is why it is extremely important that your business must be able to provide reliable and efficient products and services all the time. Additionally, be sure that you have competitive prices. Once a customer purchases your products or uses your services, it is essential that you have to look for ways to keep them coming back again and again. Clever business owners are very creative. Aside from providing their customers with the best products and services, they will also look for ways to promote their business by keeping in touch with their customers.
There are simple yet effective ways to help you stay in touch with your customers. For instance, you could send them an email, mail a letter, or make a phone call just to say hi. If you don’t want your customers to forget about your business then you could send them some thank you cards, flyers, business cards, birthday cards, Christmas cards, calendars, pens, and other stuff.
Most customers would enjoy promotional deals, special offers, and gifts from companies. That is why most successful companies would spend a lot of money on promoting their business as well as their products or services.
Aside from your desire to have repeat business, you also want your customers to promote your business to their friends and family. The key to establishing a profitable business is through word of mouth. This means that you should encourage your customers to spread the news about your excellent products and services. If you feel confident about your products and services, then most likely your customers will also feel confident and they will be loyal to your business.
Why It’s Better To Have Repeat Customers Than New Customers?
If you are trying to increase your revenue, then which is the best place to look? Like most businesses, you will probably spend most of your time and money on acquiring new customers. While this is crucial in creating a profitable business, however, this is not the best option. What if you focus your time and money on your most worthy resources which are your existing customers? As much as possible, try to encourage repeat customers and customer retention since this can help in creating long-lasting, valuable relationships.
Why should you concentrate your efforts on repeat business? First of all, these repeat customers will spend more money. Your repeat customers will likely purchase more from your company again and again compared to new customers. Since they already trust you, then these customers will probably purchase some of your more costly products or services.
Most often it is much easier to sell to repeat customers. If your time and resources are only limited, then you would not want to waste them on potential clients who would not buy anything from you. Remember that when you are promoting your products or services to potential customers, then there is only a 13% chance that you can convince them to purchase. But there is a great difference if you promote them to a repeat customer since there is a 60% to 70% chance that they will make a purchase.
It is a fact that new customers will cost you more. If you only have a small business, then you will do everything just to save some money. Do you know that acquiring a new customer will cost you five times more than keeping your current customers? Also, if you want that new customer to have the same spending level as your current customer, then it will cost you 16 times more. You need to spend your limited resources on those which can give you more impact.
The best thing about repeat customers is they can help you in promoting your business. Marketing your products and services can be very expensive. And small businesses can hardly afford it. But what if it won’t cost you any money at all? If you focus more on repeat business, then your loyal customers will gladly promote your business through word of mouth. Repeat customers will likely refer 50% more people to your company.
Your business should be built on customer retention. By increasing your customer retention even just by 5%, your profitability can increase by 75% on average. If you are aspiring to become successful in the future, then you need to strengthen your relationship with your current customers rather than starting new ones. Eventually, 80% of your future revenue will come from 20% of your existing customers.
Hence, investing in repeat business would be the best decision since it can cost you less but will make you earn more. This means that you don’t have to exert more effort in order to succeed. At the same time, there is less stress involved.
So, how are you going to push repeat business? One of the easiest and simplest ways of reaching out to your customers is email marketing. You could encourage your existing customers to purchase from you again.
What Are The Benefits Of Having Repeat Customers?
Small businesses usually depended on repeat customers. Most often, marketers focus more on acquiring new clients while ignoring the importance of repeat customers. They are searching for effective ways so they can grow their business as well as their customer base. However, if they want their business to have a steady income, then they should value repeat customers.
Successful and large businesses such as Amazon and eBay rely mostly on their repeat customers in increasing their revenues. Based on several studies, having repeat customers have greater financial advantages than constantly attracting new customers. Here are some of the benefits of returning customers and how they can help in growing your profitability.
Returning Customers Are Less Costly
It is worthwhile to look for new customers, however, this will involve a lot of hard work and costs. Come to think of it, when you are trying to attract new customers, you have to exert more time and effort in convincing them that your company is reliable. This means that you have to do a lot of phone calls, emails, and visits. So, when these new customers will decide to make a purchase, you have already spend a portion of your profits. However, when it comes to returning customers, it will be entirely different. Repeat customers only involve lesser cost. Since they have already bought from your company, then they will likely buy the products that you sell.
It Is Easier To Sell To Existing Customers
Selling to new customers will require you to spend more money which could reduce your revenue. On the other hand, selling to existing customers is less costly and much easier compared to selling to new customers. The most essential factor here is trust. Since you have already sold some products to them in the past, then you have established trust. Most likely, they will purchase from you over and over again since you have lived up to their expectation with regards to the products, payment method, shipping, and customer service that you offer.
Repeat Customers Will Keep On Purchasing
Repeat customers are those who have made more than one purchase. These repeat clients will most likely purchase from you again and again. There is a 27% chance that your customers will buy from you again after making their first purchase if you know how to pursue them. The more these customers will visit your store, the greater the chances that they will be loyal to you.